Property Book - Elmer Rabuya

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BOOK II PROPERTY, OWNERSHIP, AND ITS MODIFICATION

Title I. CLASSIFICATION OF PROPERTY
PRELIMINARY PROVISIONS
ARTICLE 414. All things which are or may be the object of appropriation are considered either: (1) (2) Immovable or real property; or Movable or personal property. (333)
1. Introductory Concepts
[1.1] Origin of the Word Property
The word property is derived from the Latin word proprius, meaning belonging to one or ones own.1 Traditionally, therefore, the concept of property extends only to those things which are already possessed and found in the possession of man.2 Hence, in the traditional notion, the concept of property is inseparable from the relation which the object has with the person exercising dominion or right over it. It is in this sense that the concept of property is said to be limited compared to the concept of things, which extends to all objects that exist,3 whether it is already in the possession of man or not.
1 2
Miss. Thompson v. Kreutzer, 72 So. 891, 112 Miss. 165. 2 Falcon 6, 3 Manresa 10, cited in II Tolentino, Civil Code of the Philippines, 1992 ed., II Tolentino, Civil Code of the Philippines, 1992 ed., 2. 1
2.
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[1.2]
Concept of Things
The concept of property (bienes) is intimately related with the concept of things (cosa). It must be noticed that the Civil Code does not dene the term property but simply implies that the concept refers to things which are susceptible of appropriation.4 With the foregoing in mind, it is but proper to begin the discussion of property with the concept of things. There was a time in history when certain persons, called slaves, were considered merely as chattels or things that could be the subject of appropriation. But as human civilization progressed, the practice of slavery has been condemned and eventually eradicated. In the modern world, therefore, distinction is made between persons and things. The former is regarded as the subject or the holder of rights while the latter is its object, although the actions of the former may likewise be the object of rights. Thus, while the human person may not be considered as property, his conduct or acts, to a certain extent, may give rise to enforceable rights in favor of other persons if such act or conduct is considered by law as a source of obligation. Things, therefore, are objects external to man. But the concept of things under the Civil Code is not limited to corporeal objects or to objects that can be perceived by the senses. The concept also extends to those which have only an intellectual or juridical existence (incorporeal objects). Otherwise stated, the concept of things in our Civil Code embraces both material objects and rights. This is clear from the provisions of Articles 414, 415 and 416 of the New Civil Code. To illustrate, in Article 414, the law considers all things susceptible of appropriation as property, which may either be real or personal. In Articles 415 and 416, on the other hand, rights are likewise considered as property. This is exemplied in the provision of paragraph 10 of Article 415 which classies as real property those real rights over immovable property and in the provision of paragraph 1 of Article 417 of the New Civil Code which classies as personal property obligations and actions which have for their object movables or demandable sums.
See Art. 414, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Preliminary Provisions
[1.3]
Concept of Property under the Civil Code
As discussed in supra 1.1, the traditional notion is that property are those things which are already possessed and found in the possession of man. However, in our Civil Code, the concept of property is not conned to things which are already appropriated or possessed by man but also extends to those susceptible of such appropriation, although not yet appropriated. This is clear from the provisions of Article 414 which classies as property all things which are or may be the object of appropriation. From the viewpoint of the Code, therefore, the terms property and things are identical to each other and may be used interchangeably.5
[1.4] Susceptibility to Appropriation
As mentioned in supra 1.2, the term property under the Civil Code refers to things which are susceptible of appropriation. Hence, even in the juridical sense, not all things may be considered as property. This much is clear from the very provision of Article 414 of the New Civil Code. Pursuant to said article, it is essential that a thing must be susceptible of appropriation before it can be considered as property. Things which cannot, therefore, be subjected to human control by reason of sheer physical impossibility are not considered as property. Examples are the following: (1) Things which, because of their distance, their depth or their immensity are not capable of human control such as the sun, the stars and the ocean, are not properties; (2) Ordinarily, forces of nature such as lightning and rain are not properties because of impossibility of appropriation in their diffused state. However, when they are brought under human control through the help of science, i.e., electricity, they may now be regarded as property.6 For the purpose of classifying things as property, the criterion of susceptibility to appropriation should be distinguished from the concept of things or objects which are outside the commerce of man. While things which are outside the commerce of man may not be the object of
5 6
See II Caguioa, Civil Code of the Philippines, 1966 ed., 3. See Art. 416(3), NCC.
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a contract,7 they are not necessarily disqualied from being considered as property pursuant to the criterion mentioned in Article 414 of the Code. For example, properties of public dominion pertaining to the State, being outside the commerce of man, cannot be the object of contracts. However, they are considered property under the Code.8
[1.5] Additional Requisites
Aside from the criterion of susceptibility to appropriation mentioned in Article 414, most authors in the subject provide for two additional requisites before considering a thing as property: (1) utility, or that it can serve as a means to satisfy human needs; and (2) substantivity or individuality, or that the thing must have an autonomous and separate existence. With respect to the requisite of utility, it is inconceivable at this age to think of a thing which is incapable of satisfying any human need or want. As such, this requirement is of little use in law because almost all things are capable of giving utility to man. The requisite of individuality, on the other hand, need not be spelled out separately for the same is implicitly required in Article 414 of the Code. Thus, to be considered a separate property, a thing must have an autonomous and separate existence and not simply a part of a whole. But if a part is separated from the whole and, while in that state, is capable of satisfying any human need or want, it can then be considered as a separate property. This is the basis, for example, of the rule stated in Article 466 of the New Civil Code which states that whenever two movable things belonging to different owners are, without bad faith, united in such a way that they form a single object, the owner of the principal thing acquires the accessory, indemnifying the former owner thereof for its value. Hence, when a diamond stone is attached to a ring, the ring and the stone constitute a single property since they now form a single object. However, when the stone is removed from the ring it will be regarded as a separate property from the ring to which it has once been attached.
7 8
See Art. 1347, NCC. See Arts. 419 to 425, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Preliminary Provisions
The same can be said of the different parts of the living human body. While these parts remain attached to the person, they are not considered as property because they are integral parts of the person and the latter is not, in law, considered as thing. However, when a part of the human body, such as hair and teeth, is separated from the person, it may now be considered as property for it now has an autonomous and independent existence. 2. Classication of Property
[2.1] Classication under Book II of the Civil Code
Although there are many classications of property, Book II of the New Civil Code enumerates the more important classications, as follows: (1) Immovable or movable (Arts. 415 to 417); (2) Movables, in turn, are classied into consumable or nonconsumable (Art. 418); (3) From the viewpoint of ownership, property is classied either as property of public dominion or of private ownership (Arts. 419 to 425). It is obvious from Article 414 that the term immovable is used synonymously with the term real property and the term movable is used synonymously with the term personal property.
[2.2] Importance of Classication
The classication of property in Article 414 into immovable (real) and movable (personal) is based on the nature of the thing itself and is the most important in point of law because of the various legal consequences owing therefrom, as follows: [2.2.1] For purposes of applying the rules of acquisitive prescription: The ownership of movables prescribes through uninterrupted possession for four years in good faith or through uninterrupted possession for eight years, without need of any other condition.9 Ownership and other
Art. 1132, NCC.
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real rights over immovable property, on the other hand, are acquired by ordinary prescription through possession of ten years10 or thirty years, without need of title or of good faith.11 [2.2.2] In determining the propriety of the object of the contracts of pledge, chattel mortgage and real estate mortgage: Only movables can be the object of the contracts of pledge and chattel mortgage.12 On the other hand, only immovables can be the object of a real estate mortgage contract.13 As a consequence, should the parties execute a chattel mortgage over a real property, the same is null and void and registration of the instrument in the Registry of Property does not validate it insofar as third parties are concerned.14 [2.2.3] For purposes of determining the formalities of a donation: If the value of the personal property donated exceeds P5,000.00, the donation and the acceptance are required to be in writing; otherwise, the donation is void.15 In order that the donation of an immovable property may be valid, it must be made in a public document, as well as the acceptance thereof.16 [2.2.4] In extrajudicial deposit: Only movable things may be the object of extrajudicial deposit.17 [2.2.5] In crimes of theft, robbery and usurpation: Only personal property can be the object of the crimes of theft and robbery.18 However, the crime of usurpation dened in Article 312 of the Revised Penal Code can be committed only with respect to a real property.
Art. 1134, NCC. Art. 1137, NCC. 12 Arts. 2094 and 2140, NCC. 13 Art. 2124, NCC. 14 Associated Insurance & Surety Co., Inc. v. Iya, 103 Phil. 972 (1958). 15 Art. 748, NCC. 16 Art. 749, NCC. 17 Art. 1966, NCC. 18 Art. 308, RPC.
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PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property
[2.2.6] For purposes of determining the venue in remedial law: In the law of procedure, it is important to know the classication of property for purposes of venue. If the action affects title to or possession of real property, or interest therein, the action (referred to as real action) must be led in the proper court wherein the real property involved, or a portion thereof, is situated.19 All other actions (referred to as personal action) may be commenced and tried where the plaintiff or the defendant resides, at the election of the plaintiff.20 ***** Chapter 1 IMMOVABLE PROPERTY
Art. 415. The following are immovable property: (1) Land, buildings, roads and constructions of all kinds adhered to the soil; (2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable; (3) Everything attached to an immovable in a xed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object; (4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements; (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works; (6) Animal houses, pigeon-houses, beehives, sh ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included;
19 20
Rule 4, Section 1, 1997 Rules of Civil Procedure. Rule 4, Section 2, 1997 Rules of Civil Procedure.
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(7)
Fertilizer actually used on a piece of land;
(8) Mines, quarries and slug dumps, while the matter thereof forms part of the bed, and waters either running or stagnant; (9) Docks and structures which, though oating, are intended by their nature and object to remain at a xed place on a river, lake, or coast; (10) Contracts for public works, and servitudes and other real rights over immovable property. (334a)
3. Immovable Property
[3.1] No Denition under the Code
Article 415 of the New Civil Code does not dene immovable or real property but enumerates what are considered as such.21 This is so because of the difculty of drawing precisely a denition of this term simply because the word is not used in its etymological or grammatical meaning but in its juridical meaning, i.e., the term is applied to many things which, although by nature are personal, are considered by law as real. Consequently, to avoid difculty the law simply goes by way of enumeration.22
[3.2] Kinds of Immovable (Real) Property
Immovable or real property may be reduced to four general classes or kinds, notwithstanding the enumerations in Article 415, to wit: [3.2.1] Immovable by nature those which by their essence and nature are immovable or cannot be moved from one place to another, such as lands and roads in paragraph 1 of Article 415 and mines, quarries and slug dumps in paragraph 8 of Article 415; Immovable by incorporation those which are treated as immovable by reason of their attachment or incorporation to an immovable in such manner as to be an integral part thereof, such as buildings and constructions of all kinds adhered to the soil
[3.2.2]
21 22
Peoples Bank and Trust Co. v. Dahican Lumber Company, 20 SCRA 84, 93 (1967). 3 Manresa, 6th Ed., 16, cited in II Caguioa, Civil Code, 1966 ed., 11.
mentioned in paragraph 1 of Article 415; trees, plants and growing fruits mentioned in paragraph 2 of Article 415 while they are still attached to the land or form an integral part of an immovable; and those that are attached to an immovable in the manner provided for in paragraph 3 of Article 415; [3.2.3] Immovable by destination those which are essentially movable, but by the purpose for which they have been placed in an immovable, partake of the nature of the latter because of the added utility derived therefrom, such as those mentioned in paragraphs 4, 5, 6, 7 and 9 of Article 415; and Immovable by analogy or by law those that are mentioned in paragraph 10 of Article 415.
[3.2.4]
4. Real Property under Article 415(1) Lands, buildings, roads and constructions of all kinds adhered to the soil (A) Lands and Roads
[4.1] Lands and roads
There is no question that lands and roads are always immovable. By their nature, they are considered as immovable or real property. (B) Buildings
[4.2] Building Is Immovable By Incorporation
A house (or a building) is immovable by incorporation.23 As explained in Bicerra v. Teneza,24 a house (or a building) is classied as immovable property by reason of its adherence to the soil on which it is built. Thus, a building which is merely superimposed on the soil is not a real property.25 When paragraph No. (1) of Article 415 of the New Civil Code classies buildings as immovables, the building referred
Ladera v. CN Hodges, (CA), 48 O.G. 5374, 5379 (1952). 6 SCRA 649, 651 (1962). 25 Bautista v. Supnad, (CA), 59 O.G. 1575 (1962).
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to is that which substantially adheres to the land and not one which is merely superimposed on the soil. In the language of Justice J.B.L. Reyes in Ladera v. CN Hodges,26 the building referred to under the law is a true building or not one merely superimposed on the soil. Since a house or a building is classied as immovable property by reason of its adherence to the soil on which it is built, once the house is demolished it ceases to exist as such and hence its character as an immovable likewise ceases.27
Bicerra v. Teneza 6 SCRA 649 (1962) In this case, the plaintiff led an action before the Court of First Instance (now RTC) of Abra alleging that the defendant forcibly demolished his house and that the materials of the house, after it was dismantled, were placed in the custody of the barrio lieutenant. Plaintiff prayed that he be declared the owner of the house and/or materials and that defendant be ordered to pay him damages in the total sum of P800. The CFI dismissed the action on the ground that the same was within the exclusive original jurisdiction of the Justice of the Peace of Court (now MTC), the action not being a real action. In sustaining the dismissal of the complaint, the Supreme Court explained: A house is classied as immovable property by reason of its adherence to the soil on which it is built (Art. 415, par. 1, Civil Code). This classication holds true regardless of the fact that the house may be situated on land belonging to a different owner. But once the house is demolished, as in this case, it ceases to exist as such and hence its character as an immovable likewise ceases. It should be noted that the complaint here is for recovery of damages. [4.3] Buildings Are Always Immovable
Buildings are always immovable under the Code.28 While there is a holding to the effect that a building which is merely superimposed on the soil or is sold for immediate demolition may be considered as a movable or personal property,29 Justice J.B.L. Reyes claried that the rule that a building is immovable or real property has reference only to a true building or one which is not merely superimposed on the soil.30
Supra, 5380. Bicerra v. Teneza, supra, 651. 28 Punzalan, Jr. v. Vda. de Lacsamana, 121 SCRA 331, 335 (1983). 29 Bautista, et al. v. Supnad, (CA), 59 O.G. 1575, 1578 (1962). 30 Ladera v. C.N. Hodges, et al., (CA), 48 Off. Gaz., 5374, 5380 (1952); cited in Evangelista v. Alto Surety & Ins. Co., Inc., 103 Phil. 401, 404 (1958).
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Punzalan, Jr. v. Vda. De Lacsamana 121 SCRA 331 (1983) In this case, Punzalan mortgaged with PNB a parcel of land situated in Tarlac which was eventually foreclosed by PNB in 1970. However, the bank secured title thereto only in 1977. In the meantime, while the property was still in the possession of Punzalan, he constructed thereon in 1974 a warehouse allegedly with the permission of PNB. In 1978, PNB sold the land, including the building thereon, to Vda. de Lacsamana. Thus, Punzalan led an action to annul the sale with respect to the building. He led the action in Quezon City. The court dismissed the action on the ground of improper venue because the action is for recovery of a real property. The court ruled that the venue should have been Tarlac. In sustaining the decision of the lower court, the Supreme Court ruled that the warehouse claimed to be owned by (Punzalan) is an immovable or real property as provided in Article 415(1) of the Civil Code and that buildings are always immovable under the Code. The Court further ruled that the prevalent doctrine is that an action for the annulment or rescission of a sale of real property does not operate to efface the fundamental and prime objective and nature of the case, which is to recover said real property. It is a real action. [4.3.1] Rule is not affected by the fact that the building is treated separately from the land
A building treated separately from the land on which it stood is immovable property and the mere fact that the parties to a contract seem to have dealt with it separate and apart from the land on which it stood in no wise changed its character as immovable property.31 It is obvious that the inclusion of the building, separate and distinct from the land, in the enumeration of what may constitute real properties (in Article 415 of the New Civil Code) could only mean one thing that a building is by itself an immovable property, a doctrine already pronounced by the Supreme Court as early as the case of Leung Yee v. Strong Machinery Co.32 Thus, while it is true that a mortgage of land necessarily includes, in the absence of stipulation, the improvements thereon, still a building by itself may be mortgaged apart from the land on which it has been built.33 Such a mortgage would still be a real estate mortgage for the
Punzalan, Jr. v. Vda. de Lacsamana, supra, 335-336; citing Leung Yee v. Strong Machinery Co., 37 Phil. 644 (1918). 32 Lopez v. Orosa, Jr. and Plaza Theatre, Inc., 103 Phil. 98, 105 (1958); cited in Prudential Bank v. Panis, 153 SCRA 390, 396 (1987). 33 Prudential Bank v. Panis, supra, 396, citing Leung Yee v. Strong Machinery Co., supra.
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building would still be considered immovable property even if dealt with separately and apart from the land.34
Prudential Bank v. Panis 153 SCRA 390 (1987) In this case, the pivotal issue is whether or not a valid real estate mortgage can be constituted on the building erected on the land belonging to another. Answering in the afrmative, the Supreme Court explained In the enumeration of properties under Article 415 of the Civil Code of the Philippines, this Court ruled that, it is obvious that the inclusion of building separate and distinct from the land, in said provision of law can only mean that a building is by itself an immovable property. (Lopez v. Orosa, Jr., et al., L-10817-18, Feb. 28, 1958; Associated Ins. and Surety Co., Inc. v. Iya, et al., L-10837-38, May 30, 1958) Thus, while it is true that a mortgage of land necessarily includes, in the absence of stipulation of the improvements thereon, buildings, still a building by itself may be mortgaged apart from the land on which it has been built. Such a mortgage would still be a real estate mortgage for the building would still be considered immovable property even if dealt with separately and apart from the land (Leung Yee v. Strong Machinery Co., 37 Phil. 644). In the same manner, this Court has also established that possessory rights over said property before title is vested on the grantee, may be validly transmitted or conveyed as in a deed of mortgage (Vda. de Bautista v. Marcos, 3 SCRA 438 [1961]). [4.3.2] Rule is not affected by the fact that the building is erected on a land owned by another person
The law makes no distinction as to whether or not the owner of the land is or is not the owner of the building.35 Hence, a building is an immovable property regardless of whether or not said structure and the land on which it is adhered to belong to the same owner36 or whether it is erected by the owner of the land or by a usufructuary or lessee.37
Id. Ladera v. CN Hodges, 48 Off. Gaz., 5374, 5379; Makati Leasing and Finance Corp. v. Wearever Textile Mills, 122 SCRA 296, 301 (1983). 36 Lopez v. Orosa, Jr. and Plaza Theater, Inc., supra, 105. 37 Ladera v. CN Hodges (CA), supra, 5380.
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A building certainly cannot be divested of its character of a realty by the fact that the land on which it is constructed belongs to another.38 To hold it the other way, the possibility is not remote that it would result in confusion, for to cloak the building with an uncertain status made dependent on the ownership of the land, would create a situation where a permanent xture changes its nature or character as the ownership of the land changes hands.39
Ladera v. C.N. Hodges, et al. (CA) 48 Off. Gaz. 5374 (1952) In this case, Ladera purchased from CN Hodges a parcel of land payable in installments. After the execution of the contract, Ladera built on the lot a house of mixed materials. When Ladera failed to pay the agreed instalments, CN Hodges rescinded the contract and led an action for ejectment. The court thereupon rendered a decision upon agreement of the parties requiring Ladera to vacate and surrender possession of the lot and to pay P10 a month until delivery of the premises. Thereafter, the court issued an alias writ of execution and the sheriff levied upon the house. The sheriff subsequently posted notices of sale at auction but did not publish the same in a newspaper of general circulation. The sale pushed through. Thereupon, Ladera led an action to set aside the sale. The trial court set aside the sale for non-compliance with the requirement of publication (of the notice of sale) in judicial sales of real property under the Rules of Court. CN Hodges appealed from the said decision contending that the house, being built on land owned by another person, should be regarded in law as movable or personal property. The Court of Appeals, speaking thru Justice J.B.L. Reyes held that a true building (not one merely superimposed on the soil) is immovable or real property, whether it is erected by the owner of the land or by a usufructuary or lessee. Thus, the Court of Appeals ruled that the lower court was right in concluding that, as the object of the levy and sale was real property, the publication in a newspaper of general circulation was indispensable and it being admitted that no such publication was ever made, the execution sale was void. Evangelista v. Alto Surety & Ins. Co., Inc. 103 Phil. 401 (1958) In this case, Evangelista sued Rivera for collection of sum of money on June 4, 1949. On the same date, he obtained a writ of preliminary attachment, which was levied upon a house built by Rivera on a land owned by Alto Surety.
38 39
Associated Ins. & Surety Co., Inc. v. Iya, et al., 103 Phil. 972, 979 (1958). Id.
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The levy was made pursuant to the rules governing the levy of real properties. In due course, judgment was rendered in favor of Evangelista, who, on October 8, 1951, bought the house at the public auction made to satisfy the judgment. The corresponding deed of sale was issued to him on October 22, 1952. When Evangelista sought to take possession of the house, he was told that Alto Surety was now the owner of the house because the latter allegedly bought the house at an auction sale on September 29, 1950. It turned out that Alto Surety likewise led an action against Rivera and likewise obtained a favorable judgment. The corresponding deed was issued to Alto Surety on May 10, 1952. Subsequently, Evangelista instituted an action against Alto Surety and Rivera for the purpose of establishing his title over said house. The trial court ruled in favor of Evangelista. On appeal, however, the Court of Appeals reversed the decision of the trial court on the ground that Evangelista did not acquire a preferential lien through the preliminary writ of attachment because the house was levied as if it were an immovable property. The Court of Appeals was of the opinion that the house should have been levied pursuant to the rules governing the levy of personal property (apparently for the reason that the house was constructed on a land belonging to another). In reversing the decision of the CA, the Supreme Court reiterated the ruling in Ladera v. Hodges (48 Off. Gaz., 5374) that a true building (not one merely superimposed on the soil) is immovable or real property, whether it is erected by the owner of the land or by a usufructuary or lessee. [4.4] Instances Where Building Is Treated As Personal Property By the Parties
Although the dicta in some decisions of the Supreme Court to the effect that the parties to a contract may by agreement treat as personal property that which by nature would be a real property40 may have tended to erode the doctrine pronounced in Leung Yee v. Strong Machinery41 that a building is by itself an immovable property the fact remains that the nature of a building does not depend on the way the parties deal with it. The classication of property into real or personal is provided for by law and may not, therefore, be changed by the agreement of the parties. As such, even if the parties may treat as personal property that which under the law is a real property, that agreement does not in any way alter the character of the property as an immovable or real property.
40 Standard Oil Co. of New York v. Jaramillo, 44 Phil. 630, 632-633 (1923); see also De Jesus v. Guan Bee Co., 72 Phil. 446 and Luna v. Encarnacion, 91 Phil. 531 (1952). 41 Supra.
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[4.5]
Doctrine of Estoppel; Navarro and Tumalad Cases
In Ladera v. CN Hodges,42 Justice J.B.L. Reyes explained that the ruling in Standard Oil,43 De Jesus v. Guan Bee Co.,44 Evangelista v. Abad,45 and Tomines v. San Juan,46 to the effect that the parties to a contract may by agreement treat as personal property that which by nature would be a real property is predicated on statements by the owner declaring his house to be a chattel, a conduct that may conceivably estop him from subsequently claiming otherwise. This doctrine of estoppel was eventually applied by the Court in Navarro47 and Tumalad48 cases. In these two cases, a chattel mortgage contract was executed by the parties involving a house. Thereafter, the mortgagors questioned the validity of the chattel mortgage so executed on the ground that the subject matter thereof was not chattel but real property. While it is true that only personal properties can be the subject of a chattel mortgage49 and that the execution of a chattel mortgage covering a real property (a building, for example) is invalid and a nullity,50 the court need not resolve the issue of the validity of the chattel mortgage in the cases of Navarro and Tumalad. As a consequence, there is no need on the part of the court to rule on the character of the house (or building) in these cases. Note that the cases of Navarro and Tumalad can be resolved by simply applying the doctrine of estoppel which, in fact, was what the Court did. As applied in the above cases, the doctrine of estoppel not only prohibits a party from assuming inconsistent positions but also precludes him from repudiating an obligation voluntarily assumed after having accepted benets therefrom. To countenance such repudiation would be contrary to equity and would put a premium on fraud or misrepresentation. In other words, the Court did not rule in Navarro and Tumalad that the subject chattel mortgage was valid and that the
Supra. Supra. 44 Supra. 45 (CA) 36 O.G. 2913. 46 (CA) 45 O.G. 2935. 47 Navarro v. Pineda, 9 SCRA 631 (1963). 48 Tumalad v. Vicencio, 41 SCRA 143 (1971). 49 See Sec. 1, Act No. 3952. 50 Associated Ins. & Surety Co. v. Iya, 103 Phil. 972, 979 (1958).
42 43
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house (or building) subject matter of the cases was a personal property. Rather, the Court simply applied the doctrine of estoppel, in that, since the parties so agreed that the building (or house) is a personal property and a proper subject of the contract of chattel mortgage, they are estopped from denying the existence of the chattel mortgage which, as between them, must be upheld.
Navarro v. Pineda 9 SCRA 631 (1963) In this case, Runo Pineda and his mother, Juana Gonzales, executed a deed of real estate and chattel mortgages in favor of Conrado Navarro, whereby Gonzales, by way of real estate mortgage hypothecated a parcel of land belonging to her, and Pineda, by way of chattel mortgage, mortgaged his house erected on a lot belonging to another person and one motor truck. Both mortgages were contained in one instrument, which was registered both in the Ofce of the Register of Deeds and the Motor Vehicle Ofce. When Navarro led a complaint for foreclosure of the mortgage, Pineda questioned the validity of the chattel mortgage over his house on the ground that the house, being an immovable property, could not be the subject of a chattel mortgage, citing the cases of Lopez v. Orosa, Jr., 103 Phil. 98; Associated Ins. & Surety Co., Inc. v. Iya, 103 Phil. 972; and Leung Yee v. Strong Machinery Co., 37 Phil. 644. The trial court upheld the validity of the chattel mortgage. The decision of the trial court was directly appealed to the Supreme Court. In sustaining the decision of the trial court, the Supreme Court applied the principle of estoppel because the house in question was treated as personal or movable property by the parties to the contract themselves. In the deed of chattel mortgage, Pineda conveyed by way of chattel mortgage (his) personal properties, a residential house and a truck. The mortgagor himself grouped the house with the truck, which is, inherently a movable property. The Court explained further that the cases cited by Pineda were not applicable because in these cases, third persons assailed the validity of the deed of chattel mortgages; whereas in this case, it was one of the parties to the contract of mortgage who assailed its validity. Tumalad v. Vicencio 41 SCRA 143 (1971) In this case, Vicencio and Simeon executed a chattel mortgage in favor of Tumalad over their house of strong materials built on a lot rented from Madrigal & Company, Inc. When Vicencio and Simeon defaulted in the payment of their obligation, the mortgage was extrajudicially foreclosed and the house was sold at public auction. Tumalad emerged as the highest bidder during the auction. Subsequently, Tumalad led an action for ejectment against
17
Vicencio and Simeon. In their answer, the defendants impugned the legality of the chattel mortgage and its subsequent foreclosure on the ground that the house, being an immovable, could only be the subject of a real estate mortgage and not a chattel mortgage. When the case nally reached the Supreme Court, the said Court again applied the principle of estoppel since the parties treated the subject house as personalty. The Court explained that although there is no specic statement referring to the subject house as personal property, yet by ceding, selling or transferring a property by way of chattel mortgage (Vicencio and Simeon) could only have meant to convey the house as chattel, or at least, intended to treat the same as such, so that they should not now be allowed to make an inconsistent stand by claiming otherwise. This case was likewise compared with Associated Ins. & Surety Co., Inc. v. Iya, Lopez v. Orosa, Jr. and Plaza Theatre, Inc. and Leung Yee v. Strong Machinery Co. Unlike in these three cases, wherein third persons assailed the validity of the chattel mortgage, it is the debtors-mortgagors who are attacking the validity of the chattel mortgage in this case. Hence, the doctrine of estoppel applies. [4.6] Compared with the cases of Associated Ins. & Surety Co. v. Iya, Evangelista v. Alto Surety & Ins. Co., Inc., Manarang v. Olada and Piansay v. David
In the cases of Associated Ins. & Surety Co. v. Iya, Evangelista v. Alto Surety & Ins. Co., Inc., Manarang v. Olada and Piansay v. David, the question on the character of the house or building concerned was of primordial consideration. In other words, there was no other way of resolving these cases except with a precise ruling on the character of the house (or building) subject thereof. In Evangelista v. Alto Surety & Ins. Co., Inc.,51 for example, the main question was who between the contending parties had a preferential right over the house? If the levy made on the house pursuant to a writ of preliminary attachment in 1949 was valid, then Evangelista had a preferential right over the same, otherwise, it would be Alto Surety. The validity of the levy, in turn, would depend upon the character of the house. If the house was a real property, then the levy would be valid. If the house was a personal property, then the levy would not be valid. Since the resolution of the case calls for the application of the law (Article 415[1], NCC), there is no other conclusion except that the house is a real property it is so whether it is erected on a land belonging to another.
51
103 Phil. 401.
18
PROPERTY
In Associated Ins. & Surety Co. Inc. v. Iya,52 the principal question was this: May Associated Insurance rightfully demand for the exclusion of the house from the foreclosure of the real estate mortgage by Iya? In this case, if the chattel mortgage over the house is to be preferred over the real estate mortgage over the same house, then Associated Insurance may rightfully demand for the exclusion of the house in the foreclosure of the real estate mortgage since it was executed prior to the latter mortgage. In the said case, the debtor-mortgagor executed two mortgages in favor of different mortgagees. The rst was a chattel mortgage in favor of Associated Insurance covering the house. The second was a real estate mortgage over the same house and the lot on which the house was situated in favor of Iya. Both mortgage obligations were not paid. Hence, Associated Insurance foreclosed the chattel mortgage over the house and eventually purchased the house during the auction. When the real estate mortgage was about to be foreclosed, Associated Insurance sought for the exclusion of the house claiming a preferential right over it by virtue of the chattel mortgage and its subsequent foreclosure. Iya, in turn, questioned the validity of the chattel mortgage contract contending that since the subject matter thereof was real property, the same was not valid. In this case, the court is required to meet squarely the issue of the validity of the chattel mortgage contract. And in resolving said issue, the court must pass upon the character of the house whether it is real property or personal property. If the house is a real property, then the chattel mortgage is not valid and Associated Insurance does not acquire a preferential right over the house subject matter of the mortgage. But if the house is a personal property, then the chattel mortgage is valid and Associated Insurance has a preferential right over the house. Since the court is called upon to apply the law (Article 415[1], NCC), there is no other conclusion except that the house is a real property it is so whether it is erected on a land belonging to another. In Manarang v. Olada,53 a house was made the subject matter of a chattel mortgage contract. When the mortgage obligation was
52 53
Supra. 99 Phil. 108 (1956).
19
not paid, the creditor opted to le an action for collection (instead of foreclosing the mortgage) and after obtaining favorable judgment, the creditor caused the levy upon execution of the same house subject matter of the chattel mortgage contract. Before the property could be sold at the public auction, the debtor offered to pay her indebtedness. The sheriff, however, told her to likewise pay the expenses incurred in the publication of the notice of sale. The debtor, however, refused to pay the publication expenses contending that such publication was not necessary since the house was not a real property. Note that under the Rules of Court, if what is to be sold at a public auction is a real property, publication of the notice of sale is indispensable. Without such publication, the sale is a nullity. On the other hand, if what is to be sold is a personal property, there is no need for publication. Hence, the issue in this case is the character of the house, whether it is a real property or personal property for purposes of sale on execution. Since the character of the house is the precise issue in this case, the court is once again called upon to apply the law (Article 415[1], NCC). Since the court is called upon to apply the law (Article 415[1], NCC), there is no other conclusion except that the house is a real property. In Piansay v. David,54 a house was again made the subject matter of a chattel mortgage which was foreclosed. The mortgagee bought the house during the auction and later sold the same to Piansay. Another unsecured creditor of the debtor led an action for collection against him. After obtaining judgment, said creditor (Mangubat) caused the levy upon execution of the house earlier foreclosed and sold to Piansay. Thus, Piansay questioned the validity of the levy upon execution. The main question in this case is this: who between Piansay and Mangubat has a better right over the house? In order to answer this question, there is a need on the part of the court to pass upon the issue of the validity of the chattel mortgage contract. If the same is valid, then Piansay acquires a preferential right over the house subject matter of the chattel mortgage; otherwise, Mangubat shall acquire a preferential right over it. The validity of the chattel mortgage, in turn, is dependent upon the character of the house. If the house is a personal property, then the
54
12 SCRA 227.
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chattel mortgage is valid; otherwise, it is not. Since the court is again called upon to apply the law (Article 415[1], NCC), there is no other conclusion except that the house is a real property.
Manarang v. Olada 99 Phil. 108 (1956) In this case, Manarang executed a chattel mortgage over a house of mixed materials in favor of Esteban. Upon default, Esteban led an action to recover the loan. Judgment having been entered in plaintiffs favor, execution was issued against the same property mortgaged. Before the property could be sold at the auction, Manarang offered to pay the sum of P277. The sheriff, however, refused the tender unless the additional amount of P260 representing the expenses incurred for the publication of the notice of sale be also paid. Manarang refused to pay the additional amount contending that the house in question was considered as personal property by the parties, hence, publication of its sale at public auction was not necessary. In upholding the action of the sheriff, the Supreme Court explained that the rules on execution do not allow the parties to a contract to treat a real property as personal because sale on execution affect the public and third persons. The regulation governing sales on execution are for public ofcials to follow and were never intended to suit the consideration that parties, may have privately given to the property levied upon. Hence, the mere fact that a house was the subject of a chattel mortgage and was considered as personal property by the parties does not make said house personal property for purposes of the notice to be given for its sale at public auction. In ne, the Supreme Court declare that the house of mixed materials levied upon on execution, although subject of a contract of chattel mortgage between the owner and a third person, is real property within the purview of Rule 39, Section 16 of the Rules of Court as it has become a permanent xture on the land, which is real property. Evangelista v. Alto Surety & Ins. Co., Inc. 103 Phil. 401 (1958) In this case, Evangelista sued Rivera for collection of sum of money on June 4, 1949. On the same date, he obtained a writ of preliminary attachment, which was levied upon a house built by Rivera on a land owned by Alto Surety. The levy was made pursuant to the rules governing the levy of real properties. In due course, judgment was rendered in favor of Evangelista, who, on October 8, 1951, bought the house at the public auction made to satisfy the judgment. The corresponding deed of sale was issued to him on October 22, 1952. When Evangelista sought to take possession of the house, he was told that Alto Surety was now the owner of the house because the latter allegedly bought the house at an auction sale on September 29, 1950. It turned out that Alto Surety likewise
21
led an action against Rivera and likewise obtained a favorable judgment. The corresponding deed was issued to Alto Surety on May 10, 1952. Subsequently, Evangelista instituted an action against Alto Surety and Rivera for the purpose of establishing his title over said house. The trial court ruled in favor of Evangelista. On appeal, however, the Court of Appeals reversed the decision of the trial court on the ground that Evangelista did not acquire a preferential lien through the preliminary writ of attachment because the house was levied as if it were an immovable property. The CA was of the opinion that the house should have been levied pursuant to the rules governing the levy of personal property. In reversing the decision of the CA, the Supreme Court explained that a house is immovable or real property, whether it is erected by the owner of the land or by a usufructuary or lessee. Hence, the levy that was made was proper and Evangelista acquired a preferential right over the house by virtue of the writ of preliminary attachment which was secured long before the sale of the house in favor of Alto Surety. Associated Ins. & Surety Co., Inc. v. Iya, et al. 103 Phil. 972 (1958) In this case, the spouses Valino purchased a lot on installment basis from Philippine Realty Corporation. Prior to the full payment of the purchase price, ownership remained with PRC. In the meantime, the spouses Valino constructed a house on the lot and subsequently mortgaged the same in favor of Associated Insurance by way of a chattel mortgage. After completing payment of the purchase price on the lot and after the issuance of the title to the lot in their names, the spouses Valino subsequently mortgaged the lot and the house (earlier mortgaged to Associated Insurance) in favor of Iya by way of a real estate mortgage. Soon, the spouses Valino defaulted in the payment of their obligation secured by the chattel mortgage. Thus, Associated Insurance foreclosed the chattel mortgage over the house and subsequently caused the said house to be declared in its name for tax purposes. When the surety company learned of the existence of the real estate mortgage, it led an action for the purpose of excluding the house from the real estate mortgage. In the meantime, the spouses likewise defaulted in the payment of their obligation secured by the real estate mortgage. Thus, Iya led an action against the spouses Valino and Associated Insurance for the payment of the mortgage obligation with an alternative prayer for the foreclosure of the real estate mortgage. The two cases were jointly heard. After trial, the lower court ruled that the chattel mortgage in favor of Associated Insurance was preferred and superior over the real estate mortgage in favor of Iya, with respect to the house. The lower court thus ordered the exclusion of the house in the foreclosure of the real estate mortgage. On appeal to the Supreme Court, the portion of the decision of the lower court excluding the house in the foreclosure of the real
22
PROPERTY
estate mortgage was reversed. In reversing the said portion of the decision, the Supreme Court explained that the house in question was a real property and the chattel mortgage in favor of Associated Insurance was not valid since its subject matter was not a personal property. The chattel mortgage being void, Associated Insurance did not acquire any right over the house. Piansay v. David 12 SCRA 227 (1964) In this case, Conrado David obtained a loan from Uy Kim upon the security of a chattel mortgage on a house situated at Tondo, Manila. When David defaulted, Uy Kim foreclosed the mortgage and the house was sold to Uy Kim. Thereafter, Uy Kim sold the house to Salvador Piansay. In the meantime, Marcos Mangubat led an action for collection of loan against David. After obtaining a judgment against David, the house was levied upon at the instance of Mangubat. Piansay assailed the right of Mangubat to levy upon execution the house in question alleging that the same belongs to him, he having bought it from Uy Kim, who, in turn, acquired it at the auction sale held in connection with the extrajudicial foreclosure of the chattel mortgage constituted in her favor by David. In ruling in favor of Mangubat, the Court held regardless of the validity of a contract constituting a chattel mortgage on a house, as between the parties to said contract, the same cannot and does not bind third persons, who are not privies to the aforementioned contract or their privies. As a consequence, the sale of the house in the proceedings for the extrajudicial foreclosure of said chattel mortgage, is null and void insofar as defendant Mangubat is concerned, and did not confer upon Mrs. Uy Kim, as buyer in said sale, any dominical right in and to said house, so that she could not have transmitted to her assignee, plaintiff Piansay, any such right as against defendant Mangubat. [4.7] Classication of property into real or personal property, a question of law the Standard Oil case
In the case of Standard Oil Co. of New York v. Jaramillo,55 the Supreme Court ruled that the Register of Deed may not refuse the registration of a chattel mortgage on the pretext that the subject matter thereof is not a personal property. The Court claries that the duties of the register of deeds in respect to the registration of chattel mortgages are of purely ministerial in character. As earlier discussed, the classication of property into real or personal is provided for by law. In refusing the registration of a chattel mortgage on the ground that the subject matter
55
Supra.
23
thereof is not a personal property, the register of deeds is engaging itself in the interpretation of the law which is the exclusive province of the courts. For that reason, the Supreme Court claried that the duty of the register of deeds in respect to the registration of chattel mortgages is of a purely ministerial character. The Standard Oil case is telling us that the registration of a chattel mortgage covering a real property before the chattel mortgage registry may not be prevented by the register of deeds. What then is the effect of such registration? In Associated Ins. & Surety Co., Inc. v. Iya,56 the Supreme Court held that the registration of a chattel mortgage covering a building in the Chattel Mortgage Registry produces no effect whatsoever, for where the interest conveyed is in the nature of a real property, the registration of the document in the registry of chattels is merely a futile act. Thus, the registration of the chattel mortgage of a building of strong materials produces no effect as far as the building is concerned.57 But then again, as between the parties to said chattel mortgage, they are not allowed to assail the validity of said agreement under the principle of estoppel.
Standard Oil Co. of New York v. Jaramillo 44 Phil. 630 (1923) In this case, Gervasia de la Rosa, a lessee of a parcel of land situated in the City of Manila and owner of the house of strong materials built thereon, executed a deed of chattel mortgage, conveying to plaintiff by way of mortgage both the leasehold interest in said lot and the building which stands thereon. After said document was duly acknowledged and delivered, the petitioner caused the same to be presented to defendant, as register of deeds of the City of Manila, for the purpose of having the same recorded in the book of record of chattel mortgages. Upon examination of the instrument, defendant was of the opinion that it was not a chattel mortgage, for the reason that the interest therein mortgaged did not appear to be personal property, within the meaning of the Chattel Mortgage Law, and registration was refused on this ground. A petition for mandamus was led against the register of deeds. The Supreme Court ruled that the position taken by the register of deeds is untenable. It is his duty to accept the proper fee and place the instrument on record. The Court explained that the duties of a register of deeds in respect to the registration
Supra. Associated Ins. & Surety Co., Inc. v. Iya, 103 Phil. 972, 979, citing Leung Yee v. Strong Machinery Co., 37 Phil. 644.
56 57
24
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of chattel mortgages are of a purely ministerial character, and no provision of law can be cited which confers upon him any judicial or quasi-judicial power to determine the nature of any document of which registration is sought as a chattel mortgage.
(C) Construction Adhered To the Soil

[4.8] Constructions of All Kinds Adhered To the Soil
To be immovable, the construction must be attached permanently to the land.58 It becomes immovable by incorporation. The adherence to the soil must not be of provisional or temporary character but xed or integral. Thus, in a case,59 the steel towers constructed by the Manila Electric Company were not considered as real properties because they were removable and merely attached to a square metal frame by means of bolts, which when unscrewed could easily be dismantled and moved from place to place. In Meralco Securities Industrial Corporation v. CBAA,60 however, the Court held that the pipeline system in question is indubitably a construction adhering to the soil. It is attached to the land in such a way that it cannot be separated therefrom without dismantling the steel pipes which were welded to form the pipeline.
Board of Assessment Appeals v. Manila Electric Co. 10 SCRA 68 (1964) In this case, the City Assessor of Quezon City classied the 40 steel towers constructed by Meralco within Quezon City as real properties for purposes of taxation. Thus, the Board of Assessment Appeals of Quezon City required Meralco to pay the amount of P11,651.86 as real property tax on the said steel towers for the years 1952 to 1956. Meralco paid the amount under protest and questioned the imposition of the tax before the Court of Tax Appeals. The CTA ordered the cancellation of the tax declarations on the aforesaid steel towers and directed the City Treasurer of Quezon City to refund the payments made by Meralco. The CTA ruled that the steel towers were personal properties and were not, therefore, subject to real property tax. On appeal, the Supreme Court sustained the decision of the CTA holding that Granting for the purpose of argument that the steel supports or towers in question are not embraced within the term poles, the
3 Manresa 18-19, cited in II Tolentino, Civil Code, p. 17. Board of Assessment Appeals v. Manila Electric Company, 10 SCRA 68 (1964). 60 114 SCRA 261 (1982).
58 59
25
logical question posited is whether they constitute real properties, so that they can be subject to a real property tax. The tax law does not provide for a denition of real property; but Article 415 of the Civil Code does, by stating the following are immovable property: (1) Land, building, roads and constructions of all kinds adhered to the soil; xxx xxx xxx (3) Everything attached to an immovable in a xed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object; xxx xxx xxx (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works; xxx xxx xxx. The steel towers or supports in question, do not come within the objects mentioned in paragraph 1, because they do not constitute buildings or constructions adhered to the soil. They are not constructions analogous to buildings nor adhering to the soil. As per description, given by the lower court, they are removable and merely attached to a square metal frame by means of bolts, which when unscrewed could easily be dismantled and moved from place to place. They cannot be included under paragraph 3, as they are not attached to an immovable in a xed manner, and they can be separated without breaking the material or causing deterioration upon the object to which they are attached. Each of these steel towers or supports consists of steel bars or metal strips, joined together by means of bolts, which can be disassembled by unscrewing the bolts and reassembled by screwing the same. These steel towers or supports do not also fall under paragraph 5, for they are not machineries, receptacles, instruments or implements, and even if they were, they are not intended for industry or works on the land. Petitioner is not engaged in an industry or works on the land in which the steel supports or towers are constructed.
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5. Real Property under Article 415(2) Trees, plants and growing fruits (A)
[5.1]
Trees and Plants

Trees and Plants
Trees, plants and growing fruits, while they are attached to the land, are immovable property.61 They are immovable by reason of their incorporation to the soil or because they form an integral part of the immovable. If, therefore, the trees or plants are cut or uprooted for purposes of making them rewood or timber they become movable property except when the timber constitutes the natural product of the tenement and, therefore, forms an integral part of the immovable.62 (B)
[5.2]
Growing Fruits
Growing Fruits
With regard to growing fruits, they are considered as real property so long as they are still attached to the soil. But for certain purposes and while still attached to the soil, growing fruits may exceptionally be treated as personal property pursuant to the provisions of Article 416(2) of the New Civil Code. By way of example, ungathered fruits are considered personal property for the purpose of sale of the whole or part of the crops.63 In addition, ungathered fruits have the nature of personal property for purposes of attachment and execution and in applying the provisions of the Chattel Mortgage Law.64
Sibal v. Valdez 50 SCRA 512 (1927) In this case, the deputy sheriff of the Province of Tarlac attached several properties of Leon Sibal, among which was included the sugar cane in seven parcels of land. Thereafter, the said deputy sheriff sold at public auction said properties, including the sugar cane, to Valdez. Sibal offered to redeem said sugar came and tendered to Valdez the amount sufcient to cover the price paid by the latter. Valdez, however refused to accept the money and to return the sugar cane on the ground that the sugar cane in question had the nature of
Inter-Regional Development Corp. v. CA, 65 SCRA 265, 268 (1975). 3 Manresa, 6th ed., 20. 63 3 Manresa, 6th ed., 21. 64 Sibal v. Valdez, 50 Phil. 512, 524 (1927).
61 62
27
personal property and was not, therefore, subject to redemption. On the issue of whether the sugar in question is personal or real property, the Supreme Court held that for purposes of attachment and execution, and for the purposes of the Chattel Mortgage Law, ungathered products have the nature of personal property.
6. Real Property under Article 415(3) Everything attached to an immovable in a xed manner
[6.1] Attachment Must Be In A Fixed Manner
These properties are immovable by incorporation. Their attachment to an immovable must be in a xed manner and in such a way that they cannot be separated therefrom without breaking the material or deterioration of the object.65 In the Board of Assessment Appeals case,66 for example, the Supreme Court ruled that the steel towers of Meralco could not be included under paragraph 3 because they are not attached to an immovable in a xed manner since they could be separated without breaking the material or causing deterioration upon the object to which they were attached. Each of the steel towers consists of steel bars or metal strips, joined together by means of bolts, which could be disassembled by unscrewing the bolts and reassembled by screwing the same.
[6.2] Need Not Be Attached By the Owner
The Civil Code nowhere requires that the attachment or incorporation be made by the owner of the land or immovable himself. For the property to be immobilized under paragraph 3, the only criterion is its union or incorporation with the immovable in the manner required by law.
[6.3] However, Intent of the Parties May Govern
The principle of estoppel may likewise apply with respect to properties mentioned in paragraph 3 of Article 415. The fact that the machineries are heavy, bolted or cemented on the real property, for example, does not make them ipso facto immovable under Article
65 66
Art. 415, par. 3. Board of Assessment Appeals v. Manila Electric Company, supra.
28
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415(3), as between the parties since their intent has to be looked into. Thus, if the parties treat the machinery as chattels, they are bound by their agreement under the principle of estoppel67 notwithstanding the fact that the machinery may have been attached to an immovable in a xed manner and may not be separated therefrom without breaking the material or deterioration of the object to which it is attached.
Tsai v. Court of Appeals 366 SCRA 324 (2001) In this case, Ever Textile Mills, Inc. obtained in 1975 a three million loan from PBCom. As security for the loan, Evertex executed in favor of PBCom a deed of real and chattel mortgage over the lot where its factory stands, and the chattels located therein as enumerated in a schedule attached to the mortgage contract. In 1979, PBCom granted a second loan of P3,356,000 to Evertex. The loan was secured by a chattel mortgage over personal properties enumerated in a list attached thereto. In 1982, PBCom foreclosed the real and chattel mortgages. In 1982, Evertex was declared insolvent. In the meantime, PBCOm sold the factory, lock and stock and barrel to Ruby Tsai in 1984. In 1989, Evertex led an action for annulment of the sale, reconveyance and damages. Evertex alleges, inter alia, that PBCom appropriated some chattels not included in the real and chattel mortgage in 1975 nor in the chattel mortgage of 1979. Evertex further alleged that these properties were acquired only in 1981. Tsai and PBCom contended, on the other hand, that the disputed 1981 machineries were real properties because they were heavy, bolted or cemented on the real property. In nding the contention to be unmeritorious, the SC held Petitioners contend that the nature of the disputed machineries, i.e., that they were heavy, bolted or cemented on the real property mortgaged by EVERTEX to PBCom, make them ipso facto immovable under Article 415(3) and (5) of the New Civil Code. This assertion, however, does not settle the issue. Mere nuts and bolts do not foreclose the controversy. We have to look at the parties intent. While it is true that the controverted properties appear to be immobile, a perusal of the contract of Real and Chattel Mortgage executed by the parties herein give us a contrary indication. In the case at bar, both the trial and the appellate courts reached the same nding that the true intention of PBCom and the owner, EVERTEX, is to treat machinery and equipment as chattels. The
67
Tsai v. CA, 366 SCRA 324 (2001).
29
pertinent portion of respondent appellate courts ruling is quoted below: xxx xxx xxx In the absence of any showing that this conclusion is baseless, erroneous or uncorroborated by the evidence on record, we nd no compelling reason to depart therefrom. Too, assuming arguendo that the properties in question are immovable by nature, nothing detracts the parties from treating it as chattels to secure an obligation under the principle of estoppel. As far back as Navarro v. Pineda, 9 SCRA 631 (1963), an immovable may be considered a personal property if there is a stipulation as when it is used as a security in the payment of an obligation where a chattel mortgage is executed over it, as in the case at bar. In the instant case, the parties herein: (1) executed a contract styled as Real Estate and Chattel Mortgage, instead of just Real Estate Mortgage if indeed their intention is to treat all properties included therein as immovable, and (2) attached to the said contract a separate LIST OF MACHINERIES & EQUIPMENT. These facts, taken together, evince the conclusion that the parties intention is to treat these units of machinery as chattels. A fortiori, the contested after-acquired properties, which are of the same description as the units enumerated under the title LIST OF MACHINERIES & EQUIPMENT, must also be treated as chattels.
7. Real property under Article 415(4) Statues, reliefs, paintings or other objects for use or ornamentation
[7.1] Requisites
These are real properties by destination. In order that the properties mentioned in this paragraph may be considered as real property, the following requisites must concur: (1) they must be placed in buildings or on lands by the owner of the immovable or by his agent; and (2) the attachment must be intended to be permanent.
[7.2] Distinguish From Paragraph 3
The real properties in this paragraph are to be distinguished from those mentioned in paragraph 3, as follows: (1) here the incorporation
30
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must be made by the owner of the immovable either personally or through an agent; while it is immaterial as to who makes the incorporation in paragraph 3; (2) the incorporation in paragraph 3 must be such that separation is impossible; whereas, in paragraph 4 separation is possible without deterioration of the immovable or destruction of the material. 8. Real Property under Article 415(5) Machineries, receptacles, instruments or implements
[8.1] Immovable By Destination in Par. (5); Requisites
The properties mentioned in paragraph 5 are essentially movables but by reason of their purpose they being destined for use in the industry or work in the tenement they are converted into real properties. In order to be immobilized under paragraph 5, however, the following requisites must be satised: (1) (2) (3) (4)
[8.2]
They must be machinery, receptacles, instruments or implements; They must be placed by the owner of the tenement or by his agent; There must be an industry or work carried in such building or on the piece of land; and They must tend directly to meet the needs of said industry or work.
Properties Contemplated Under Paragraph 5
The properties contemplated in this paragraph are machineries, receptacles, instruments or implements. Thus, in the Board of Assessment Appeals case,68 the Supreme Court did not consider the steel towers constructed by Meralco as falling under paragraph 5 for they are not machineries, receptacles, instruments or implements.
[8.3] They Must Be Placed By the Owner or By His Agent
In Davao Sawmill Co. v. Castillo,69 the Supreme Court held that machinery which is movable by nature becomes immobilized when
68 69
Supra. 61 Phil. 709 (1935).
31
placed by the owner of the tenement, property or plant, but not so when placed by tenant, usufructuary, or any other person having only a temporary right, unless such person acted as the agent of the owner.70 Hence, if the machinery, receptacles, instrument or implements are not placed by the owner of the tenement or by his agent, these properties remain as movables and are not converted into real properties. As further explained by Justice J.B.L. Reyes in Ladera v. CN Hodges,71 in the case of immovables by destination (such as statutes, paintings and reliefs, machinery and implements, and animal houses), the Code requires that they be placed by the owner of the tenement, in order to acquire the same nature or consideration of real property.
[8.3.1] Exception to the Rule in supra 8.3
Should the machinery, receptacles, instruments or implements be placed in the land or tenement by the lessee thereof, the same remains personal because they are not placed by the owner of the tenement. An exception will arise, however, if in the contract of lease it is stipulated that such machinery, receptacles, instruments or implements placed there by the lessee will become, at the termination of the lease, the property of the lessor for in that case they will be considered as immovable property since in placing them the lessee will just be merely acting as an agent of the lessor.72 In the Davao Sawmill case, the Supreme Court quoted with approval the case of Valdez v. Central Altagracia, Inc.,73 where it was held that while under the general law of Puerto Rico machinery placed on property by a tenant does not become immobilized, yet, when the tenant places it there pursuant to a contract that it shall belong to the owner, it then becomes immobilized as to that tenant and even as against his assignees and creditors who had sufcient notice of such stipulation.74
See also Burgos, Sr. v. Chief of Staff, AFP, 133 SCRA 800, 812 (1984). Supra, 5379. 72 See Davao Sawmill v. Castillo, supra. 73 225 U.S. 58. 74 Cited in Peoples Bank and Trust Co. v. Dahican Lumber Company, 20 SCRA 84, 95
70 71
(1967).
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Davao Sawmill Co. v. Castillo 61 Phil. 709 Plaintiff operated a sawmill. The land upon which the business was conducted was leased from another person. On the land, the sawmill company erected a building which housed the machinery used by it. Some of the machines were mounted and placed on foundations of cement. In the contract of lease, plaintiff agreed to turn over free of charge all improvements and buildings erected by it on the premises with the exception of machineries, which shall remain with the plaintiff. In an action brought by the defendant herein, judgment was rendered against plaintiff. A writ of execution was issued and the machineries placed on the sawmill were levied upon as personalty by the sheriff. The question raised in this case involves the determination of the nature of the machineries, for plaintiff claimed that they were immobilized and they belonged to the owner of the land. In holding that the machinery is not immobilized, the Court explained that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant, but not when so placed by a tenant, usufructuary, or any person having only a temporary right, unless such person acted as the agent of the owner. Burgos, Sr. v. Chief of Staff, AFP 133 SCRA 800 (1984) In this case, the search warrants issued were questioned on grounds, inter alia, that real properties were seized under the disputed warrants. In debunking this particular argument, the Supreme Court declared xxx Under Article 415(5) of the Civil Code of the Philippines, machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land and which tend directly to meet the needs of the said industry or works are considered immovable property. In Davao Sawmill Co. v. Castillo where this legal provision was invoked, this Court ruled that machinery which is movable by nature becomes immobilized when placed by the owner of the tenement, property or plant, but not so when placed by tenant, usufructuary, or any other person having only a temporary right, unless such person acted as the agent of the owner. In the case at bar, petitioners do not claim to be the owners of the land and/or building on which the machineries were placed. This being the case, the machineries in question, while in fact bolted to the ground remain movable property susceptible to seizure under a search warrant.
33
Peoples Bank and Trust Co. v. Dahican Lumber Company 20 SCRA 84 (1967) In this case, Atlantic Gulf & Pacic Company (AG & P) sold and assigned all its rights in a lumber concession to Dahican Lumber Company (DALCO) for a total sum of $500,000, of which only $50,000 was paid. To develop the concession, DALCO obtained various loans from Peoples Bank & Trust Company. The loan was secured by a real estate mortgage over ve parcels of land, including the buildings and improvements thereon. The mortgage was executed on July 13, 1950. On the same date, DALCO executed a second mortgage on the same properties in favor of AG & P to secure payment of the unpaid balance of the purchase price. Both deeds contained an identical provision extending the mortgage lien to properties to be subsequently acquired by DALCO including but not limited to machinery, xtures, tools and equipments which the mortgagor may install, use in connection with the premises. After July 13, 1950, DALCO purchased various machineries, equipment, spare parts and supplies (collectively referred to as after-acquired properties). Pursuant to the provisions of the mortgage deeds, the Bank requested DALCO to submit compete lists of said properties but the latter failed to do so. Thereafter, the board of directors of DALCO passed a resolution to rescind the alleged sales of after-acquired properties by Connel Bros. Company Philippines (CONNEL). After which, DALCO and CONNEL executed the corresponding agreements of rescission of sale. The Bank demanded for the cancellation of such agreements. When DALCO refused to do so, the Bank and AG & P commenced foreclosure proceedings of the mortgage deeds, including the after-acquired properties. DALCO and CONNEL contended that the mortgages were null and void as regards the after acquired properties because they were not registered in accordance with the Chattel Mortgage Law. In upholding the validity of the mortgage and the foreclosure, the Court held that the after-acquired properties came within the operation of Article 415, paragraph 5 and Article 2127 of the New Civil Code. The Court explained that since the after acquired properties were purchased by DALCO in connection with, and for the use in the development of its lumber concession and that they were purchased in addition to, or in replacement of those already existing in the premises on July 13, 1950 they must be deemed, in law, to have been immobilized, with the result that the real estate mortgages involved herein which were registered as such did not have to be registered a second time as chattel mortgages in order to bind the after acquired properties and affect third persons. The Court likewise held that CONNEL is also barred from denying that the properties in question had become immobilized. The Court explained: Moreover, quoted in the Davao Sawmill case was that of Valdez v. Central Altagracia, Inc. (225 U.S. 58), where it was held that while under the general law of Puerto Rico, machinery placed on property by a tenant does not
34
PROPERTY
become immobilized, yet, when the tenant places it there pursuant to a contract that it shall belong to the owner, it then becomes immobilized as to that tenant and even as against his assignees and creditors who had sufcient notice of such stipulation. In the case at bar it is not disputed that DALCO purchased the after acquired properties to be placed on, and be used in the development of its lumber concession, and agreed further that the same shall become immediately subject to the lien constituted by the questioned mortgages. There is also abundant evidence in the record that DAMCO and CONNEL had full notice of such stipulation and had never thought of disputed validity until the present case was led. Consequently, all of them must be deemed barred from denying that the properties in question had become immobilized. [8.4] They Must Tend Directly To Meet the Needs of Said Industry or Work
The properties mentioned in paragraph 5 are immovable by destination and they are converted into real properties by reason of their purpose, not by reason of their attachment to an immovable. In Berkenkotter v. Cu Unjieng e Hijos,75 it was held that the installation of the machinery and equipment in the central of the Mabalacat Sugar Co., Inc. for use in connection with the industry carried by that company, converted the said machinery and equipment into real property by reason of their purpose. The Court explained in the said case that it cannot be said that their incorporation therewith was not permanent in character because, as essential and principal elements of a sugar central, without them the sugar central would be unable to function or carry on the industrial purpose for which it was established. The Court adds, inasmuch as the central is permanent in character, the necessary machinery and equipment installed for carrying on the sugar industry for which it has been established must necessarily be permanent. The same ruling was made in the case of Ago v. Court of Appeals,76 where the Court held that by the installation of the sawmill machineries in the building of the Golden Pacic Sawmill, Inc., for use in the sawing of logs carried on in said building, the same became a necessary and permanent part of the building or real estate on which the same was constructed, converting the said machineries and equipments into real estate within the meaning of Article 415(5) of the Civil Code of the Philippines.
75 76
61 Phil. 663. 6 SCRA 530, 537.
35
Berkenkotter v. Cu Unjieng 61 Phil. 663 The Mabalacat Sugar Co., Inc., owner of a sugar central, obtained from defendant a loan secured by a real estate mortgage constituted on two parcels of land with all the buildings, improvements, sugarcane mill thereon, and whatever forms part or was a necessary complement of said sugar-cane mill. Shortly thereafter, the company decided to increase the capacity of its sugar central by buying additional machinery and equipment, which it installed in the central, so that instead of milling 150 tons daily it could produce 250. The company obtained a loan from plaintiff to pay for the machinery. The issue in the present action is whether the additional machinery was subject to the mortgage deed executed in favor of defendant. In holding the machinery to be real property, the Court explained that the installation of the machinery and equipment in question in the central converted them into real property by reason of their purpose and constitutes a permanent improvement on said sugar central and subjects said machinery and equipment to the real estate mortgage constituted on the sugar central. Ago v. Court of Appeals 6 SCRA 360 (1962) In this case, Ago bought sawmill machineries and equipments from Grace Park Engineering, Inc., executing a chattel mortgage over said machineries and equipments to secure the balance of the purchase price, which Ago agreed to pay on installments. When Ago defaulted, Grace Park instituted foreclosure proceedings of the mortgage. To enjoin the foreclosure, Ago instituted a special civil action. The parties, however, arrived at a compromise agreement. Ago sold the machineries to Golden Pacic Sawmill, Inc., which installed the same in a building and permanently attached the same to the ground. In the meantime, as Ago continued to default in his payments as provided in the judgment by compromise, Grace Park led with the trial court a motion for execution, which was granted. Thereafter, the sheriff levied upon and sold the sawmill machineries and equipments in question without prior publication of the notice of sale. Ago questioned the legality of the sale contending that the machineries were real properties. When the case eventually reached the Supreme Court, the Court declared the sale to be void for lack of the necessary advertisement of sale by publication in a newspaper as required by the rules on the execution sale of a real property. The Court explained that the installation of the sawmill machineries in the building of the Golden Pacic Sawmill, Inc., for use in the sawing of logs carried on in said building, the same became a necessary and permanent part of the building or real estate on which the same was constructed, converting the said machineries and equipments into real estate within the meaning of Article 415(5) of the Civil Code of the Philippines.
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GSIS v. Calsons, Inc. 23 SCRA 891 (1968) In this case, Calsons, Inc. borrowed from GSIS upon the security of a real estate mortgage over ve parcels of land together with all the buildings and improvements now existing thereon or which may hereafter be constructed on the mortgaged properties. GSIS thereafter applied for foreclosure of the mortgage on grounds, inter alia, that Calsons without prior consent of GSIS removed and disposed of the complete band sawmill and lling machine which formed part of the properties mortgaged. Calsons did not deny this allegation but contended that said machines were not included in the mortgage. The Supreme Court ruled that the machineries were part of the immovable since they were permanently attached to the property and installed there by the former owner to meet the needs of certain works or industry therein. Hence, the machineries need not be the subject of a separate chattel mortgage in order to be deemed duly encumbered in favor of GSIS. [8.5] They Must Be Essential and Principal Elements of the Industry or Works
Before movables may be deemed immobilized in contemplation of paragraph 5 of Article 415, it is necessary that they must be essential and principal elements of the industry or works without which such industry or works would be unable to function or carry on the industrial purpose for which it was established.77 We must distinguish, therefore, those movables which become immobilized by destination because they are essential and principal elements in the industry from those which may not be so considered immobilized because they are merely incidental, not essential and principal.78 Thus, cash registers, typewriters, etc., usually found and used in hotels, restaurants, theaters, etc. are merely incidentals and are not and should not be considered immobilized by destination, for these businesses can continue or carry on their functions without these equipments.79 Airline companies use forklifts, jeep-wagons, pressure pumps, IBM machines, etc., which are incidentals, not essentials, and thus retain their movable nature.80 On the other hand, machineries of breweries used in the manufacture of liquor and soft drinks, though movable in nature, are immobilized because
Mindanao Bus Co. v. City Assessor and Treasurer, 6 SCRA 197, 200 (1962). Id. 79 Id. 80 Id.
77 78
37
they are essential to said industries; but the delivery trucks and adding machines which they usually own and use and are found within their industrial compounds are merely incidentals and retain their movable nature.81
Mindanao Bus Co. v. City Assessor and Treasurer 6 SCRA 197 (1962) In this case, the City Assessor of Cagayan de Oro City assessed a realty tax on several equipment and machineries of Mindanao Bus Co., a company engaged in the transportation business. These equipment were placed on wooden or cement platforms and can be moved around in the bus companys repair shop. The bus company appealed the assessment to the Board of Tax Appeals on the ground that the same are not realty. The Board of Tax Appeals of the City, however, sustained the city assessor. Thus, the bus company appealed to the Court of Tax Appeals, which likewise sustained the city assessor. In reversing the decision of the Court of Tax Appeals, thereby holding that the equipment in question are not real property, the Supreme Court distinguished between principal and essential elements of the industry from those that are merely incidental. According to the Court, in order that movable equipments to be immobilized in contemplation of the law they must rst be essential and principal elements of an industry or works without which such industry or works would be unable to function or carry on the industrial purpose for which it was established. In this case, the tools and equipment in question are by their nature, not essential and principal elements of Mindanao Bus Co.s business of transporting passengers and cargoes by motor trucks. They are merely incidentals acquired as movables and used only for expediency to facilitate and/or improve its service. Even without such stools and equipments, its business may be carried on. As explained by the Court, the transportation business could be carried on without the repair or service shop if its rolling equipment is repaired or serviced in another shop belonging to another. [8.6] The Industry or Works Must Be Carried On In A Building or On A Piece of Land
Aside from the element of essentiality, paragraph 5 of Article 415 also requires that the industry or works be carried on in a building or on a piece of land.82 In the Mindanao Bus case, for example, the equipments in question were not deemed real property because the transportation
81 82
Id. Id., 201.
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business, according to the Court, is not carried on in a building or permanently on a piece of land, as demanded by law. Likewise, in the Board of Assessment Appeals case,83 the Court held that the steel towers do not fall under paragraph 5 of Article 415 for they are not machineries, receptacles, instruments or implements, and even if they were, the Court declared that they are not intended for industry or works on the land since the Manila Electric Company is not engaged in an industry or works on the land in which the steel supports or towers are constructed.
[8.7] Application of the Doctrine of Estoppel in Article 415(5)
The doctrine of estoppel was likewise applied by the Supreme Court with respect to properties which are considered immobilized by reason of its destination or purpose under paragraph 5 of Article 415. In Sergs Products, Inc. v. PCI Leasing and Finance, Inc.,84 the Court held that the machines therein are proper subjects of a writ of replevin,85 although they are essential and principal elements of the industry because the parties have treated the same as personal property. In the Sergs Products case, Sergs Products Inc. (SPI) and PCI Leasing and Finance, Inc. (PCI) entered into a lease agreement providing that the machines in question were to be considered as personal property, although the same were essential and principal elements in the chocolate-making business of SPI. Subsequently, PCI led a complaint against SPI for sum of money, with an application for a writ of replevin. The sheriff then proceeded to seize the machines in question. SPI contended that the subject machines used in their factory were not proper subjects of the writ of replevin because they were in fact real property having become immobilized by destination. SPI went to the Court of Appeals via an original action for certiorari. The Court of Appeals, however, sustained the writ and held that the machines were personal property. Thus, SPI appealed to the Supreme Court. In holding that the machines are proper subjects of the writ of replevin even if they are considered immobilized under paragraph 5 of Article 415, the Court explained that the lease agreement, of which SPI is a party, clearly
Supra, 74. 338 SCRA 499 (2000). 85 Note: Under the Rules of Court, writs of replevin are issued for the recovery of personal property only.
83 84
39
provides that the machines in question are personal property, hence, SPI is estopped from denying the characterization of the subject machines as personal property. The Court cautioned, however, that its holding that the machines should be deemed personal property pursuant to the Lease Agreement is good only insofar as the contracting parties are concerned. The Sergs Products case must be distinguished from Ago v. Court of Appeals.86 In the latter case, Ago executed a chattel mortgage contract in favor of Grace Park Engineering over certain machineries and equipment which the former purchased from the latter to secure the payment of the balance of the price remaining unpaid. When Ago defaulted in his payments, Grace Park instituted extrajudicial foreclosure proceedings of the mortgage. To enjoin said foreclosure, Ago instituted an action against Grace Park. In the said case, Ago and Grace Park arrived at a compromise agreement. When Ago violated the compromise agreement, Grace Park obtained from the court a writ of execution. Pursuant to said writ, the sheriff levied upon and ordered the sale of the sawmill machineries and equipments in question. The sheriff sold the machineries and equipments without prior publication of the notice of sale. It turned out, however, that after purchasing the machineries and equipments from Grace Park, the same had already been assigned by Ago to Golden Pacic Sawmill Inc. in payment of its subscription to the shares of stocks of said corporation. Thereafter, the sawmill machineries and equipments were installed in a building and permanently attached to the ground for use in the sawing of logs carried on in said building by Golden Pacic. In declaring the sale made by the sheriff as null and void because of the absence of publication of the notice of sale, the Supreme Court explained that by the installation of the sawmill machineries in the building of the Golden Pacic Sawmill, Inc., for use in the sawing of logs carried on in said building, the same became a necessary and permanent part of the building or real estate on which the same was constructed, converting the said machineries and equipments into real estate within the meaning of Article 415(5) of the Civil Code of the Philippines. Note that in the Ago case, even if the machineries in question were made the subject matter of a chattel mortgage contract, the doctrine of
86
Supra.
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estoppel was not applied because the interest of a third party (Golden Pacic Sawmill, Inc.) would be prejudiced. And besides, the holding in the Sergs Products case that the machines should be deemed personal property is good only insofar as the contracting parties to the Lease Agreement are concerned. In the Ago case, Golden Pacic was not a party to the chattel contract, hence, it was not bound by the agreement of the parties therein treating the machines as personal property.
Makati Leasing and Finance Corp. v. Wearever Textile Mills, Inc. 122 SCRA 294 (1983) In this case, Wearever Textile Mills, Inc. executed a chattel mortgage contract in favor of Makati Leasing and Finance Corporation covering certain raw materials and machinery. Upon default, Makati Leasing led a petition for judicial foreclosure of the properties mortgaged. Acting on Makati Leasings application for replevin, the lower court issued a writ of seizure. Pursuant thereto, the sheriff enforcing the seizure order seized the machinery subject matter of the mortgage. In a petition for certiorari and prohibition, the Court of Appeals ordered the return of the machinery on the ground that the same cannot be the subject of replevin because it is a real property pursuant to Article 415 of the new Civil Code, the same being attached to the ground by means of bolts and the only way to remove it from Wearever textiles plant would be to drill out or destroy the concrete oor. When the motion for reconsideration of Makati Leasing was denied by the Court of Appeals, Makati Leasing elevated the matter to the Supreme Court. In reversing the decision of the Court of Appeals and reinstating the decision of the lower court, the Court explained Examining the records of the instant case, We nd no logical justication to exclude the rule out, as the appellate court did, the present case from the application of the above-quoted pronouncement. If a house of strong materials, like what was involved in the above Tumalad case, may be considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby, there is absolutely no reason why a machinery, which is movable in its nature and becomes immobilized only by destination or purpose, may not be likewise treated as such. This is really because one who has so agreed is estopped from the denying the existence of the chattel mortgage. In rejecting petitioners assertion on the applicability of the Tumalad doctrine, the Court lays stress on the fact that the house involved therein was built on a land that did not belong to the owner
41
of such house. But the law makes no distinction with respect to the ownership of the land on which the house is built and We should not lay down distinctions not contemplated by law. It must be pointed out that the characterization by the private respondent is indicative of the intention and impresses upon the property the character determined by the parties. As stated in Standard Oil Co. of New York v. Jaramillo, 44 Phil. 630, it is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be a real property, as long as no interest of third parties would be prejudiced thereby.
9. Real property under Article 415(6) Animal houses, pigeon-houses, etc.

[9.1] Animal Houses and Pigeon Houses, Etc.
The structures mentioned in paragraph 6 are immovable by destination and the Code requires that they be placed by the owner of the land in order to acquire the same nature or consideration of real property. Even if not placed by the owner, however, such structures may still qualify as real property under paragraph 1 of Article 415, being a construction attached to the soil, provided that such attachment must be of a permanent character.
[9.2] Animals Included
It is worthy to note that animals in the pigeon-houses, beehives, shponds and breeding places mentioned in paragraph 6 of Article 415 are likewise considered as real property. However, these animals will be considered as personal property under laws which so provide for them pursuant to the second paragraph of Article 416 referring to real property which by any special provision of law is considered as personal property. Thus, the sh in shponds will be considered as personal property for purposes of theft under the Revised Penal Code. 10. Real Property under Article 415(7): Fertilizers These are immovables by destination. The fertilizers must actually be used on the land because it is only then that the intention of the
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owner to use them on the tenement is beyond doubt.87 Hence, fertilizers kept in the farmhouse are not immovable.88 11. Real Property under Article 415(8) Mines, quarries, slag dumps, waters ...
[11.1] Mines, Quarries and Slag Dumps
They are considered immovable property while the matter thereof forms part of the bed, that is, the matter thereof remains unsevered from the soil. Once separated they are no longer mines but minerals and are considered as personal property.
[11.2] Waters
The waters, either running or stagnant, referred to here are those which are found in their natural beds such as owing streams, rivers or canals. 12. Real Property under Article 415(9): Docks and Structures They are considered as immovables, though oating, as long as they are intended by their nature and object to remain at a xed place on a river, lake, or coast. In one case,89 the Provincial Assessor of Batangas City assessed a real estate tax on the power barges operated by FELS Energy, Inc., which power barges were moored at Balayan Bay in Calaca, Batangas. On the question of whether the power barges are real property, the Court held that they are so and are categorized as immovable property by destination pursuant to the provisions of Article 415(9) of the Civil Code. 13. Real Property under Article 415(10)
[13.1] Rights as Property
As discussed in supra 1.2, the concept of property extends to rights provided that the same is patrimonial in nature. Patrimonial
II Tolentino, Civil Code, 1982 ed., p. 20. 3 Manresa 32. 89 FELS Energy, Inc. v. The Province of Batangas, et al., G.R. No. 168557, Feb. 16, 2007.
87 88
43
rights, in turn, are either (1) real the power belonging to a person over a specic thing, without a passive subject individually determined against whom such right may be personally exercised; it is enforceable against the whole world; or (2) personal the power belonging to one person to demand of another, as a denite passive subject, the fulllment of a prestation to give, to do or not to do.
[13.2] How Rights Classied
Whether a right is personal or real property shall depend on: (1) whether it is a personal or real right, and (2) whether the subject matter thereof is a personal or real property. Except for rights arising from contracts for public works which are classied as real property under paragraph 10 of Article 415, all personal rights will fall under personal property regardless of the subject matter thereof. With respect to real rights, however, the classication thereof will depend on its subject matter. If the subject matter of the real right is a real property, then such real right is a real property. This is clear from paragraph 10 of Article 415 which classies as real property real rights over immovable property. Thus, a real estate mortgage is a real right and a real property by itself.90 On the other hand, if the subject matter of the real right is a personal property, as in the case of chattel mortgage, such real right is classied as personal property. 14. Denition of Real Property in Real Estate Taxation
[14.1] Concept of Real Property in Realty Taxation
The area of real property taxation presents difculty to the courts on the matter of the classication of property for taxation purposes because there are highly controversial and borderline cases which do not fall squarely within the provisions of Article 415 of the New Civil Code and yet, the property involved therein may rightfully be classied as realty pursuant to existing tax laws. Hence, in the area of real property taxation, there is a nagging question as to which law shall govern the classication of property for taxation purposes is it the provisions of the Civil Code or the provisions of tax laws?
90 MBTC v. Alejo, 364 SCRA 812, 819 (2001); see also Hongkong & Shanghai Bank v. Aldecoa & Co., 30 Phil. 255, 273.
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The various decisions of the Supreme Court on the above question are not source of enlightenment but even add to the confusion because there were cases decided solely on the basis of Article 415 of the New Civil Code91 but there were also cases decided on the basis of the provisions of the Assessment Law (Commonwealth Act No. 470) and the Real Property Tax Code (Presidential Decree No. 464).92 In Benguet Corporation v. Central Board of Assessment Appeals,93 the Supreme Court even recognized the fact that the Real Property Tax Code does not dene real property but simply says that the realty tax is imposed on real property, such as lands, buildings, machinery and other improvements afxed or attached to real property. The same observation was arrived at by the Court in the Board of Assessment Appeals v. Manila Electric Co.,94 where it was held that the tax law did not provide for a denition of real property. In the Board of Assessment case, it was held that that the steel supports or towers in question were not subject to realty tax because they were not real property under either paragraphs (1), (3) or (5) of Article 415 of the New Civil Code. In the Mindanao Bus case, the Court likewise held that the imposition of realty tax on the maintenance and repair equipment in question was not proper because the properties involved were not real property under paragraph (5) of Article 415. In Meralco Securities Industrial Corp. v. CBAA,95 the Court, on the other hand, afrmed the propriety of the imposition of realty tax on the pipeline system of Meralco Securities on the ground that the same was considered a construction adhering to the soil, hence, real property under paragraph (1) of Article 415. In Manila Electric Co. v. CBAA,96 a case involving two storage tanks, the Court held that the imposition of real tax was proper even if the storage tanks were not embedded in the land. The Court recognized
91 Mindanao Bus Co. v. City Assessor and Treasurer, 6 SCRA 197 (1962); Board of Assessment Appeals v. Manila Electric Co., 10 SCRA 68 (1964) and Manila Securities Industrial Corp. v. Central Board of Assessment Appeals, 114 SCRA 261 (1982). 92 Caltex (Phils.), Inc. v. CBAA, 114 SCRA 296 (1982) and Manila Electric Co. v. CBAA, 114 SCRA 273 (1982). 93 G.R. No. 106041, Jan. 29, 1993. 94 Supra. 95 Supra. 96 Supra.
45
that this was a borderline case which could not be decided solely on the basis of Article 415 but by the pertinent provisions of the Assessment Law (Commonwealth Act No. 470) and the Real Property Tax Code (Presidential Decree No. 464).97 In Caltex (Phils.), Inc. v. CBAA, involving equipment and machinery permanently afxed by Caltex to its gas station rented from a certain lessor, the Court held that the issue of whether the said equipment and machinery are subject to realty tax should be resolved primarily under the provisions of the Assessment Law and the Real Property Tax Code. In these two cases, had the Court applied the provisions of Article 415, the properties therein involved would not be classied as real property. In applying the provisions of the tax laws in lieu of Article 415, the Court justied the same on the basis of its dictum in Standard Oil Co. of New York v. Jaramillo98 it is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property. In the light of the foregoing cases, it appears that in real property taxation, the classication of property for taxation purposes is not the exclusive domain of the Civil Code, especially in borderline cases such as that of Manila Electric Co. v. CBAA and Caltex (Phils.), Inc. v. CBAA, where the provisions of existing tax laws were primarily applied. In these borderline cases, the property involve is usually either machinery or improvements. It is usually with respect to these two kinds of property that a problem may arise in the matter of their classication for taxation purposes because existing tax laws may provide for specic denitions of what may be considered as machinery or improvement.
[14.2] Machinery and Improvements Subject to Realty Tax [14.2.1] Machinery
The old Real Property Tax Code and the present provisions on Real Property Taxation under the Local Government Code of 1991 (R.A. No. 7160), both imposed realty tax on land, building, machinery, and other improvements which are not specically exempted therein. However, both tax laws dene the terms machinery and improvement in a
97 The precursor of the present Real Property Taxation under Title 2, Book II of the Local Government Code of 1991 (R.A. No. 7160). 98 44 Phil. 630, 633.
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manner which drastically departs from the provisions of Article 415 of the Civil Code. For example, Section 3 of the Real Property Tax Code denes machinery, as follows: m) Machinery shall embrace machines, mechanical contrivances, instruments, appliances and apparatus attached to the real estate. It includes the physical facilities available for production, as well as the installations and appurtenant service facilities, together with all other equipment designed for or essential to its manufacturing, industrial or agricultural purposes. Under the Title on Real Property Taxation in the Local Government Code of 1991, the term machinery is dened, thus: (o) Machinery embraces machines, equipment, mechanical contrivances, instruments, appliances or apparatus which may or may not be attached, permanently or temporarily, to the real property. It includes the physical facilities for production, the installations and appurtenant service, facilities, those which are mobile, self-powered or self-propelled, and those not permanently attached to the real property which are actually, directly and exclusively used to meet the needs of the particular industry, business or activity and which by their very nature and purpose are designed for, or necessary to its manufacturing, mining, logging, commercial, industrial or agricultural purposes; Note that both under the old Real Property Tax Code and the present law on Real Property Taxation, in order to classify machinery as realty for taxation purposes, what is important is that the same must be essential or necessary to the operation of the business or industry. If so, it is classied as realty subject to real property tax, even if the other requirements of paragraph (5) of Article 415 of the New Civil Code may not be present. Thus, in Caltex (Phils.), Inc. v. CBAA, the equipment and machinery therein involved were held to be subject to realty tax because they are necessary to the operation of the gas station, for without them the gas station would be useless.
47
[14.2.2]
Improvements
The old Real Property Tax Code99 dened a taxable improvement, as follows: k) Improvement is a valuable addition made to property or an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital and intended to enhance its value, beauty or utility or to adapt it for new or further purposes. A similar denition is to be found in the present law on Real Property Taxation:100 (m) Improvement is a valuable addition made to a property or an amelioration in its condition, amounting to more than a mere repair or replacement of parts involving capital expenditures and labor, which is intended to enhance its value, beauty or utility or to adapt it for new or further purposes. As to whether a structure constitutes an improvement so as to partake of the status of realty, according to the Supreme Court, would depend upon the degree of permanence intended in its construction and use.101 The expression permanent as applied to an improvement does not imply that the improvement must be used perpetually but only until the purpose to which the principal realty is devoted has been accomplished.102 It is sufcient that the improvement is intended to remain as long as the land to which it is annexed is still used for the said purpose.103 In addition, the tax laws require that the structure must be such that it enhances the value and utility of the property to which it is annexed. In the case of Benguet Corp. v. CBAA, et al.,104 the petitioner questioned the imposition of real estate taxes on the tailings dam it
See Sec. 3(k), Real Property Tax Code. See Sec. 199(m), R.A. No. 7160. 101 Benguet Corp. v. CBAA, et al., G.R. No. 106041, Jan. 29, 1993. 102 Id. 103 Id. 104 Supra.
99 100
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constructed, arguing that the dam cannot be subjected to realty tax as a separate and independent property because it does not constitute an assessable improvement on the mine. In sustaining the imposition of a realty tax over the tailings dam, the Court held that the dam falls within the denition of an improvement because it is permanent in character and it enhances both the value and utility of petitioners mine. The same ruling was made by the Supreme Court in the case of Manila Electric Co. v. CBAA,105 involving two storage tanks, which while not embedded in the land were nonetheless considered as improvements on the land because (1) they enhanced its utility and rendered it useful to the oil industry and (2) they have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by MERALCO for its operations. Chapter 2 MOVABLE PROPERTY
Art. 416. The following things are deemed to be personal property: (1) Those movables susceptible of appropriation which are not included in the preceding article; (2) Real property which by any special provision of law is considered as personalty; (3) and (4) In general, all things which can be transported from place to place without impairment of the real property to which they are xed. (335a) Art. 417. The following are also considered as personal property: (1) Obligations and actions which have for their object movables or demandable sums; and (2) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate. (336a) Forces of nature which are brought under control by science;
105
Supra.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Movable Property
49
15. Movable Property

[15.1] No Precise Denition of the Term
The Civil Code does not likewise dene the term personal or movable property. As in the case of real or immovable property, the Code simply enumerates in Articles 416 and 417 thereof what are to be considered as personal property. Note that under our law, the meaning and application of the term personal property depends upon the meaning and application which our law gives to the term real property. Thus, under our law, all properties which are not real are personal. Hence, while certain property may, by its nature, be moved from one place to another, it will not be considered as movable property if it is classied as immovable property under the provisions of Article 415 because of the purpose for which it has been placed in an immovable, in which case, it shall partake of the nature of the latter and shall be classied as an immovable property by destination.
[15.2] What May Be Considered Movable Property, In General
In general, all things susceptible of appropriation which can be transported from place to place without impairment of the real property to which they are xed106 and not included in the enumeration in Article 415107 are classied as personal or movable property. By way of example: if certain machineries for use in an industry or works are placed on the tenement not by the owner of the tenement and they are not attached to the tenement in a xed manner but can, in fact, be separated therefrom without causing substantial injury, they are considered as movable property. Note that by their nature, these machineries can be transported from place to place and they do not become immobilized, either by reason of incorporation (under Article 415[3]) because they can be separated from the tenement without causing substantial injury or by reason of destination (under Article 415[5]) because they are not placed on the tenement by its owner, which is a requirement under this paragraph for the movable to be immobilized.
106 107
Art. 416(4), NCC. Art. 416(1), NCC.
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PROPERTY
[15.3] Realty Considered as Personalty By Special Provisions of Law
As discussed in supra 5.2 and 9.2, there are certain properties classied under Article 415 of the Code as real property which may, by special provision of law, be considered as personal property for purposes of the application of the said special provision of law. In applying the provisions of the Revised Penal Code for the commission of the crime of theft, for example, the animals in the animal houses referred to in paragraph 6 of Article 416 will be considered as personal property. Also, for purposes of attachment, execution and the Chattel Mortgage Law, ungathered fruits referred to in the second paragraph of Article 415 shall be treated as personal property. To a certain extent, therefore, the provision of the second paragraph of Article 416 is an attempt to qualify the rules outlined in Article 415 of the Code.
[15.4] Forces of Nature
Paragraph (3) of Article 416 is an attempt to clarify the rule outlined in Article 414 that only things susceptible of appropriation are considered as property. The forces of nature in their original state are not, ordinarily, subject to appropriation because of the degree of difculty in appropriating them. However, paragraph (3) of Article 416 claries that if these forces of nature are brought under the control of man through the help of science, thereby becoming appropriable, they are now considered as property and classied as personal property. Hence, gas108 and electricity109 are considered personal property under this provision.
[15.5] Chose in Action
A chose in action is personal property110 and it is an intangible or incorporeal right.111 A chose in action means, literally, a thing in action,112 and is the right of bringing an action,113 or a right to recover a
US v. Tambunting, 41 Phil. 364. US v. Carlos, 21 Phil. 553. 110 Art. 417(1), NCC; Ark. Gregory v. Colvin, 363 S.W. 2d 539, 540, 235 Ark. 1007. 111 Tex. Browne v. King, Civ. App., 196 S.W. 884, afrmed 235 S.W. 522, 111 Tex. 330. 112 Gregory v. Colvin, supra. 113 Id.
108 109
PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Movable Property
51
debt or money,114 or a right or proceeding in a court of law to procure the payment of a sum of money,115 or a right to recover a personal chattel or a sum of money by action.116 As discussed in supra 13.2, since a chose in action is merely a personal right, it is to be classied as a personal property.
[15.6] Obligations In General
Every obligation creates a personal right on the part of the creditor to demand for its fulllment or performance. The right to demand for the performance of the obligation is, by itself, a property. Since the right to demand the performance of the obligation is simply a personal right on the part of the creditor, such right is classied as personal property pursuant to the discussion in supra 13.2.
Art. 418. Movable property is either consumable or non-consumable. To the rst class belong those movables which cannot be used in a manner appropriate to their without their being consumed; to the second class belong all the others. (337)
16. Consumable and Non-consumable

[16.1] Consumable and Non-Consumable
The classication of property into consumable or non-consumable applies only to movable property and does not nd application to immovable property. In addition, such classication does not nd application to all kinds of movable property but only to those which are corporeal in nature. As dened, a consumable is a movable which cannot be used in a manner appropriate to its nature without itself being consumed. For example, a cigarette cannot be used in a manner appropriate to its nature, i.e., for smoking, without itself being consumed. A non-consumable, on the other hand, is a movable which can be used in a manner appropriate to its nature without itself being consumed. An example of a non-consumable is table which can be used in the manner appropriate to its nature and, yet, it will not be consumed.
114 115
Ill. People, for Use of Vancil Motor Co. v. Weaver, 40 N.E. 2d 83, 313 Ill. App. 317. N.Y. Niles v. Mathusa, 47 N.Y.S. 38, 20 App. Div. 483, afrmed 57 N.Y. 184, 162 Ala. Peavy Lumber Co. v. Murchison, 130 So. 2d. 338, 272 Ala. 251.
N.Y. 546.
116
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PROPERTY
[16.2] Distinguished From Fungible and Non-Fungible
Aside from the classication provided in Article 418 of the Civil Code, movables may likewise be classied into fungibles or nonfungibles. In classifying movables into consumable or non-consumable, the basis of the classication is the very nature of the corporeal object itself. On the other hand, the basis of the classication of movables into fungible or non-fungible is simply the intention of the parties. The movable is classied as fungible if, by the intention of the parties, it can be replaced by another of the same kind; otherwise, it is a nonfungible. Chapter 3 PROPERTY IN RELATION TO THE PERSON TO WHOM IT BELONGS
Art. 419. Property is either of public dominion or of private ownership. (338)
17. Public Dominion and Private Ownership

[17.1] Public Dominion and Private Ownership
From the point of view of ownership, property is classied either as that of public dominion or that of private ownership.117 However, this classication is not complete and accurate since the Civil Code fails to consider the basic difference between patrimonial property and ordinary private property. The Code seems to suggest that those properties of the State which are called patrimonial are in equal footing with properties of private ownership. But this should not be the case. As will be explained in infra 23.3, patrimonial properties of the State are not exactly in the same category as ordinary private properties. The latter can be acquired thru adverse possession while the adverse possession of the former cannot ipso facto ripen into ownership as it is an iron-clad dictum that prescription can never lie against the State.118
117 118
Art. 419, NCC. Alonso v. Cebu Country Club, Inc., 417 SCRA 115, 127.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Property in Relation to the Person to Whom it belongs
53
[17.2] Classication of Property From the Point of View of Ownership
From the viewpoint of ownership, the Civil Code classies properties, as follows: (1) in relation to the State, its properties are either of public dominion or patrimonial properties;119 (2) in relation to the political subdivisions (provinces, cities and municipalities), their properties are either of public dominion (for public use) or patrimonial properties;120 (3) in relation to persons and entities other than the State and its political subdivisions (or private persons, either individually or collectively), their properties are denominated as that of private ownership.121
Art. 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belongs to the State, without being for public use, and are intended for some public service or for the development of the national wealth. (339a)
18. Property of State: Public Dominion

[18.1] Kinds of Property of Public Dominion Pertaining to the State
In relation to the State, there are three kinds of property of public dominion: (1) those that are intended for public use; (2) those that are intended for some public service; and (3) those that are intended for the development of national wealth.122
[18.2] Public Dominion, as Referring To Public Ownership
In a sense, the term public dominion means ownership by the public in general123 or public ownership. As used in this sense, the ownership referred to is a special collective ownership for the general use and enjoyment, an application to the satisfaction of collective
See Arts. 420 and 421, NCC. See Arts. 423 and 424, NCC. 121 See Art. 425, NCC. 122 Art. 420, NCC. 123 Note that the old Civil Code used the term public ownership instead of public dominion.
119 120
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PROPERTY
needs, and resides in the social group.124 Viewed in this light, the State holds these properties not in the concept of an owner125 but only in consequence of its territorial integrity.126 Hence, the relation of the State to these properties arises from the fact that the State is the juridical representative of the social group, and as such it takes care of them, preserves them and regulates their use for the general welfare.127 The term public dominion is to be viewed as referring to public ownership in relation to the properties of the State intended for public use or for some public service mentioned in paragraph numbers (1) and (2) of Article 420. Since the ownership of these properties belong to the public in general and not to the State, the latter may not make them the object of commerce unless they are properly converted into patrimonial properties pursuant to the provisions of Article 422 of the New Civil Code.
[18.3] Public Dominion, as Referring To State Ownership
In another sense, the term public dominion may also mean properties or things held by the State by regalian right.128 Under Section 2 of Article XII of the 1987 Philippine Constitution, which reafrms the regalian doctrine or jura regalia earlier enshrined in the 1935 Philippine Constitution, all lands of the public domain as well as all natural resources are owned by the State.129 While these properties are owned by the State, they remain to be part of the public dominion. Hence, in Chavez v. Public Estates Authority,130 for example, the Supreme Court held that submerged lands are part of the States inalienable natural resources and classied as property of public dominion.
124 Laurel v. Garcia, 187 SCRA 797, 808 (1990), citing 3 Manresa, 66-69; Tolentino, Commentaries on the Civil Code of the Philippines, 1963 Edition, Vol. II, p. 26. 125 See II Tolentino, Civil Code of the Philippines, 1992 ed., p. 30. 126 Caguioa, Civil Code of the Philippines, Vol. II, 1966 ed., p. 30. (Note: According to Justice Fernando in Lee Hong Hok v. David, 48 SCRA 372, 377 [1972], the government authority possessed by the state which is appropriately embraced in the concept of sovereignty comes under the heading of imperium.) 127 See II Tolentino, Civil Code of the Philippines, 1992 ed., p. 30. 128 Republic v. Alagad, 169 SCRA 455, 461 (1989). 129 The capacity of the State to own or acquire property is the states power of dominium. (Separate Opinion of J. Puno in Cruz v. Secretary of Environment and Natural Resources, 347 SCRA 128, 165). 130 415 SCRA 403 (2003).
55
[18.4] Public Ownership Distinguished From State Ownership
Property of public dominion falling under the concept of State ownership by virtue of regalian right must be distinguished from property of public dominion in the concept of public ownership. In the latter, not even the State may make them the object of commerce. Hence, they cannot be leased, donated, sold or be the object of any contract.131 With respect to natural resources, they are not, however, totally outside the commerce of man as the Constitution allows the State to enter into co-production, joint venture or production-sharing agreements with private individuals or corporations for their exploration, development and utilization.132 With respect to shponds, for example, which are likewise owned by the State,133 they may be leased although they may not be alienated. Under Section 45 of R.A. No. 8550, otherwise known as The Philippine Fisheries Code of 1998, public lands such as tidal swamps, mangroves, marshes, foreshore lands and ponds suitable for shery operations shall not be disposed or alienated but they may be the subject matter of a shpond lease agreement.
[18.5] Intent to Devote, Sufcient
For a property of the State to fall under public dominion, it is not necessary that the same be actually used for some public use or for some public service. In the case of Manila Lodge No. 761 v. Court of Appeals,134 the Supreme Court claried that in order to be property of public dominion an intention to devote it to public use is sufcient and it is not necessary that it must actually be used as such. Hence, it matters not that the property is not actually devoted for public use or for some public service.135 If the property has been intended for such use or service, and it has not been devoted to other uses and no measures have been adopted which amount to a withdrawal thereof from public use or service, the same remains property of public dominion, the fact that it is not actually devoted for public use or service notwithstanding.136
Municipality of Cavite v. Rojas, 30 Phil. 602. See Sec. 2, Article XII of the 1987 Constitution. 133 Menchavez v. Teves, Jr., 449 SCRA 380, 391 (2005). 134 73 SCRA 162, 182-183 (1976). 135 Agripino Capitulo, et al. v. Alejo Aquino, No. 15488-R, (CA) 53 O.G. 1477, November 19, 1956. 136 Ibid.
131 132
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PROPERTY
Manila Lodge No. 761 v. Court of Appeals 73 SCRA 162 (1976) In 1905, the Philippine Commission enacted Act No. 1360 authorizing the City of Manila to reclaim a portion of the Manila Bay and the reclaimed area was to form part of the Luneta extension. The Act likewise provided that the reclaimed area shall be the property of the City of Manila. The City of Manila was likewise authorized to lease the northern side of the reclaimed area for a hotel site. Subsequently, the Philippine Commission passed Act No. 1657, amending Act No. 1360, to authorized the City of Manila to lease or sell the portion set aside as a hotel site. After the reclamation, the City of Manila sold a portion of the reclaimed land (located on the southern end) to Manila Lodge which, in turn, sold the same to Tarlac Development Corp. After such purchase, the City of Manila led a petition in court for the re-annotation of its right to repurchase the property sold to Manila Lodge, which petition was granted by the court. Thereafter, the TDC led an action to be declared the purchaser of the property in good faith. After trial, the trial court found the subject land to be part of the public park or plaza and, therefore, part of the public dominion. Consequently, the court declared the sale of the subject land by the City of Manila to Manila Lodge void. Both Manila Lodge and TDC appealed from the said decision. One of the issues raised by the appellants was that in order that the character of property for public use may be so attached to a plaza, the latter must be actually constructed or at least laid out as such. They contended that the subject property was not yet constructed as a plaza or at least laid out as a plaza when it was sold by the City of Manila. On this particular issue, the Supreme Court held that in order to be property of public dominion an intention to devote it to public use is sufcient. The Court explained: It is not necessary, therefore, that a plaza be already constructed or laid out as a plaza in order that it be considered property for public use. It is sufcient that it be intended to be such. In the case at bar, it has been shown that the intention of the lawmaking body in giving to the City of Manila the extension to the Luneta was not a grant to it of patrimonial property but a grant for public use as a plaza. [18.6] Public Use and Public Service, Distinguished
In Villarico v. Sarmiento,137 the Supreme Court dened the term public use as that use which is not conned to privileged individuals, but is open to the indenite public. Hence, properties for public use may be distinguished from properties intended for public service in that the former may be used indiscriminately by the public while
137
442 SCRA 110, 115 (2004), citing US v. Tan Piaco, 40 Phil. 853, 856 (1920).
57
the latter, although used for the benet of the public, cannot be used indiscriminately by anyone but only by those that are authorized by proper authority.138 19. Property of Public Dominion: For Public Use
[19.1] Enumeration of Properties of the State for Public Use
The rst paragraph of Article 420 enumerates the properties of public dominion which are intended for public use, as follows: roads, canals, rivers, torrents, ports and bridges constructed by the State; banks, shores, roadsteads, and others of similar character. Articles 5 and 6 of P.D. No. 1067, as amended, otherwise known as The Water Code of the Philippines, add to the above enumeration, the following: Art. 5. The following belong to the State: a.G b.G c.G d.G Rivers and their natural beds; Continuous or intermittent waters of springs and brooks running in their natural beds and the bed themselves; Natural lakes and lagoons; All other categories of surface waters such as water owing over lands, water from rainfall whether natural or articial, and water from agriculture runoff, seepage and drainage; Atmospheric water; Subterranean or ground waters; and Seawater.
e.G f.G g.G
Art. 6. The following waters found on private lands also belong to the State: a. b. c. d. e.
138
Continuous or intermittent waters rising on such lands. Lakes and lagoons naturally occurring on such lands; Rain water falling on such lands; Subterranean or ground waters; and Waters in swamps and marshes.
II Caguioa, Civil Code of the Philippines, 1966 ed., p. 31.
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PROPERTY
(A)
Roads
[19.2] Roads
The roads referred to under Article 420(1) of the New Civil Code are the national highways and roads constructed and maintained by the national government through the Department of Public Works and Highways. Provincial, city and municipal roads and streets, on the other hand, are properties of public dominion of the local government unit concerned and are governed by Article 424 of the Civil Code and the provisions of the Local Government Code. (B) Canals
[19.3] Canals
A canal is usually an articial waterway, drainage, irrigation or navigation.139 In the case of Santos v. Moreno,140 the Supreme Court, quoting Article 339(1) of the Spanish Civil Code of 1889,141 held that canals constructed by the State and devoted to public use are of public ownership (or of public dominion). Conversely, said the Court, canals constructed by private persons within their private lands and devoted exclusively for private use must be of private ownership. In the Santos case, the canals involved were declared to be of private ownership since they were constructed by the owners of hacienda San Esteban for their exclusive use and prohibited the public from using them. In the case, however, of Mercado v. Municipal President of Macabebe,142 while the canal involved (Batasan-Limasan) was originally dug by the estates owner, the Supreme Court held that he had lost any right over it by prescription since he allowed said canal to be used by the public for navigation and shing purposes for a period of twenty-two (22) years. In this case, the canal could have been of private ownership had not its builder lost it by prescription. In Bautista v. Alarcon,143 the plaintiff therein sought the injunction against the defendants who allegedly constructed a dam across a public
Magno v. Vargas, 54331-R, August 27, 1979. 21 SCRA 1141, 1166 (1967). 141 Which provisions were substantially reproduced in Article 420(1) of the new Civil
139 140
Code.
142 143
59 Phil. 592 (1934). 23 Phil. 631.
59
canal which conveyed water from the Obando River to shponds belonging to several persons. The canal was situated within a public land. In sustaining the injunction granted by the lower court, the Supreme Court said: No private person has a right to usurp possession of a watercourse, branch of a river, or lake of the public domain and use, unless it shall have been proved that he constructed the same within property of his exclusive ownership, and such usurpation constitutes a violation of the legal provisions which explicitly exclude such waterways from the exclusive use or possession of a private party. (Italics supplied) In view of the foregoing cases, the rule appears to be that if a canal is constructed by private person within his private land and devoted it exclusively for private use, the same is of private ownership. However, if the canal is situated within a public property or the same is constructed by the State and devoted to public use, such canal is property of public dominion.
Mercado v. Municipal President of Macabebe 59 Phil. 592 (1934) The predecessor-in-interest of the plaintiff was the owner of an hacienda in which owed a river and a creek near each other. The owner of the hacienda made an excavation connecting these two bodies of water, constructing a sort of canal known as Batasan-Limasan. This canal was then used not only by residents of the hacienda, but also by people of nearby barrios and municipalities as a means of communication in attending to their needs. This continued from 1906 to 1928, when the owner of the hacienda closed the two openings of the Batasan-Limasan and converted it into a sh pond. The government ordered the removal of the dikes closing both ends of the Batasan-Limasan, and this case was brought as an appeal from that order. In holding that the builder of the canal lost it by prescription, the Supreme Court explained And even granting that the Batasan-Limasan creek acquired the proportions which it had, before it was closed, as a result of excavations made by laborers of the appellants predecessor-ininterest, it being a fact that, since the time it was opened as a water route between the Nasi River and Limasan creek, the owners thereof as well as strangers, that is, both the residents of the hacienda and those of other nearby barrios and municipalities, had been using it not only for their bancas to pass through but also for shing
60
PROPERTY
purposes, and it being also a fact that such was the condition of the creek at least since 1906 until it was closed in 1928, if the appellant and her predecessors-in-interest had acquired any right to the creek in question by virtue of excavations which they had made thereon, they had lost such right through prescription, inasmuch as they failed to obtain, and in fact they have not obtained, the necessary authorization to devote it to their own use to the exclusion of all others. The use and enjoyment of a creek, as any other property susceptible of appropriation, may be acquired or lost through prescription, and the appellant and her predecessors in interest certainly lost such right through the said cause, and they cannot now claim it exclusively for themselves after the general public had been openly using the same from 1906 to 1928. xxx
(C)
Rivers
[19.4] River is a Composite Term
Although Article 420 of the New Civil Code speaks only of rivers and banks, rivers is a composite term which includes: (1) the running waters, (2) the bed, and (3) the banks.144 All these constitute the river.145 Since a river is but one compound concept, it should have only one nature, i.e., it should either be totally public or completely private. And since rivers are of public ownership, it is implicit that all the three component elements be of the same nature also.146 However, to dispel all possible doubts, Article 420, paragraph 1 of the New Civil Code and Article 5, paragraph (a) of the Water Code of the Philippines, expressly make all three elements properties of public dominion.
[19.5] Natural Bed of a River
The bed of the river is also classied as property of the public dominion.147 In the case of Binalay v. Manalo,148 it was held that the buyer did not acquire private ownership of the bed of the eastern branch of the Cagayan River even if it was included in the deeds of absolute
144 Binalay v. Manalo, 195 SCRA 374, 384 (1991), citing Hilario v. City of Manila, 19 SCRA 931 (1967). 145 Hilario v. City of Manila, supra, p. 939. 146 Id. 147 Art. 502(1), NCC; Art. 5(a), Water Code of the Philippines; see also Binalay v. Manalo, supra, 384; Republic v. CA, 132 SCRA 514 (1984). 148 Supra.
61
sale executed by the sellers since the sellers could not have validly sold land that constituted property of public dominion. In Republic v. Court of Appeals,149 the Court ruled that the lower court cannot validly order the registration of two lots in the names of private respondents since these lots were portions of the bed of the Meycauayan river and are therefore classied as property of the public domain under Article 420, paragraph 1 and Article 502, paragraph 1 of the Civil Code of the Philippines.
[19.6] Extent of River Bed
What is the extent of the river bed? Article 70 of the Law of Waters of August 3, 1866 denes the natural bed or channel of a creek or river as the ground covered by its waters during the highest oods.150 The Supreme Court had the occasion to apply this provision in the case of Binalay.151 In the above-mentioned case, Manalo purchased two parcels of land: (1) the rst parcel, consisting of 8.65 hectares, was purchased from Faustina Taccad; and (2) the second parcel, consisting of 1.80 hectares, was purchased from Gregorio Taguba. During the cadastral survey conducted in Balug, Tumauini, Isabela on October 21, 1969, the two parcels of land purchased by Manalo were surveyed and consolidated into one lot, designated as Lot No. 307, which contains a total area of 4.6849 hectares, broken down as follows: (1) the whole of 1.80 hectares acquired from Taguba; and (2) 2.8489 hectares acquired from Taccad. As the survey was taken during the rainy season, a portion of the land bought from Taccad then under water was left unsurveyed and was not included in Lot 307. In this case, it appears that the Cagayan River forks at a certain point to form two branches the western and the eastern and then unites at the other end to form a narrow strip of land. The eastern branch of the river cuts through the land of Manalo and is inundated with water only during the rainy season. It likewise appear that the submerged or the unsurveyed portion of the land of Manalo is the bed of the eastern branch of Cagayan River. For about eight months of the year (from January to August) when the level of the water at the
Supra. cited in Binalay v. Manalo, supra, 382. 151 Supra.
149 150
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PROPERTY
point of where the Cagayan River forks is at its ordinary depth, river water does not ow into the eastern branch. And while this condition persists, the eastern bed is dry and is susceptible to cultivation. During the rainy season (September to December), however, the water level in the Cagayan River increases. As the river becomes swollen due to heavy rains, the unsurveyed area of Manalos property would be inundated with water, causing the eastern bed to be covered with owing river waters. On the question of whether the unsurveyed area of Manalos alleged property is part of the natural bed of the eastern branch of the Cagayan River, the Supreme Court applied the provisions of Article 70 of the Law of Waters of August 3, 1866 which denes the natural bed or channel of a creek or river as the ground covered by its waters during the highest oods. According to the Court, the highest oods in the eastern branch of the Cagayan River occur with the annual coming of the rains as the river waters in their onward course cover the entire depressed portion in Manalos property. As a consequence, the Supreme Court declared the regularly submerged portion or the eastern bed of the Cagayan River to be property of public dominion.
[19.7] Banks of Rivers
Riverbanks are expressly declared to be property of public dominion in paragraph 1 of Article 420 of the New Civil Code. The phrase banks of a river is understood to be those lateral strips or zones of its beds which are washed by the stream only during such high oods as do not cause inundations.152 In other words, the banks refer to the lateral lines or strips reached by the waters when the river is at high tide.153 Applying the foregoing denition, the Supreme Court absolved the defendants in the case of Hilario v. City of Manila,154 from any liability to Hilario since according to the Court they were extracting gravel and sand only from the banks of the San Mateo River which constitute part of the public domain and not from the property of Hilario. In
152
Hilario v. City of Manila, supra, 938, citing Art. 73 of the Law of Waters of August 3, Ibid., at 946. Supra.
1866.
153 154
63
this case, Hilario sued the City of Manila and other defendants for indemnity for the sand and gravel extracted from the San Mateo River banks of the Hilario Estate. The Supreme Court held, however, that the defendants were extracting materials not from the property of Hilario but only from the river banks which is property of public dominion.
[19.8] Accretion on Riverbanks
Accretions on river banks, however, belong to the owner of lands adjoining the banks,155 provided that the deposit is due to the effects of the current of the river.156 Where the deposit of land was not formed solely by the natural effect of the water current of the river bordering said land but is also the consequence of the direct and deliberate intervention of man, it is deemed a man-made accretion and, as such, part of the public domain.157 (D) Ports
[19.9] Ports
The term ports in Article 420(1) of the New Civil Code includes seaports and airports.158 The MIAA Airport Lands and Buildings constitute a port constructed by the State.159 Hence, they are properties of public dominion and thus owned by the State or the Republic of the Philippines.160 In Manila International Airport Authority v. CA,161 the Court explained: No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code, like roads, canals, rivers, torrents, ports and bridges constructed by the State, are owned by the State. The term ports includes seaports and airports. The MIAA Airport Lands and Buildings constitute a port constructed by the State. Under Article 420 of the Civil Code, the MIAA Airport Lands and
Art. 457, NCC. Republic v. CA, 132 SCRA 514 (1984). 157 Tiongco v. Director of Lands, 16 C.A. Rep. 211, cited in Vda. de Nazareno v. CA, 257 SCRA 589 (1996). 158 Manila International Airport Authority v. CA, 495 SCRA 591, 622. 159 Id. 160 Id. 161 Supra.
155 156
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Buildings are properties of public dominion and thus owned by the State or the Republic of the Philippines. The Airport Lands and Buildings are devoted to public use because they are used by the public for international and domestic travel and transportation. The fact that the MIAA collects terminal fees and other charges from the public does not remove the character of the Airport Lands and Buildings as properties for public use. The operation by the government of a tollway does not change the character of the road as one for public use. Someone must pay for the maintenance of the road, either the public indirectly through the taxes they pay the government, or only those among the public who actually use the road through the toll fees they pay upon using the road. The tollway system is even a more efcient and equitable manner of taxing the public for the maintenance of public roads. The charging of fees to the public does not determine the character of the property whether it is of public dominion or not. Article 420 of the Civil Code denes property of public dominion as one intended for public use. Even if the government collects toll fees, the road is still intended for public use if anyone can use the road under the same terms and conditions as the rest of the public. The charging of fees, the limitation on the kind of vehicles that can use the road, the speed restrictions and other conditions for the use of the road do not affect the public character of the road. (E) Shores
[19.10] Shore, Dened
Shore is understood to be that space which is alternately covered and uncovered by water with the movements of the tides.162 Its interior or terrestrial limit is the line reached by the highest equinoctial tides.163 Where the tides are not appreciable, the shore begins on the land-side at
162 Art. 1, The Law of Waters of August 3, 1866, cited in Francisco v. Government of the P.I., 28 Phil. 505, 507 (1914) and Government of the Philippine Islands v. Cabagis, 53 Phil. 112, 115 (1929). 163 Id.
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the line reached by the sea during ordinary storms or tempests.164 Thus, in Cagampang v. Morano,165 the Supreme Court held that the subject property is part of the shore and public property as the same is covered by the highest tides from May to July and there is no showing that these tides are due to abnormal conditions.
[19.11] Shore, Property of Public Dominion
Shores are properties of public dominion.166 Thus, when the sea advances and private properties are permanently invaded by the waves, the properties so invaded become part of the shore or beach and they then pass to the public domain.167 The owner thus dispossessed does not retain any right to the natural products resulting from their new nature; it is a de facto case of eminent domain, and not subject to indemnity.168 This process whereby private property is converted into property for public use through the natural action of the sea and the abandonment by the owner has been called natural expropriation.169
[19.12] Accretions on Seashore
Accretions and alluvial deposits caused by the action of the sea are governed by Article 4 of the Spanish Law of Waters of 1866, an old but still valid law.170 Under said law, lands added to the shores by accretions and alluvial deposits caused by the action of the sea, form part of the public domain. Since alluvial formation along the seashore is part of the public domain, it is not open to acquisition by adverse possession by private persons.171 It is outside the commerce of man, unless otherwise declared by either the executive or legislative branch of the government.172 The accretion on the foreshore of the Manila Bay, the latter being an inlet or an arm of the sea, for example, is part of the public domain.173 On the other hand, the Laguna de Bay is a lake the
Id. 22 SCRA 1040 (1968). 166 Art. 420(1), NCC. 167 Government of the Philippine Islands v. Cabangis, supra, 115-116, cited in Republic v. Court of Appeals, 281 SCRA 639, 655-656 (1997). 168 Id. 169 Caguioa, Civil Code of the Philippines, Vol. II, 1966 ed., p. 33. 170 Heirs of Emiliano Navarro v. Intermediate Appellate Court, 268 SCRA 74 (1997). 171 De Buyser v. Director of Lands, 121 SCRA 13, 16 (1983). 172 Id., citing Ignacio v. Director of Lands, 108 Phil. 335. 173 Heirs of Emiliano Navarro v. IAC, supra., citing Ignacio v. Director of Lands and Valeriano, 108 Phil. 335 (1960).
164 165
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accretion on which, by the mandate of Article 84 of the Spanish law of Waters of 1866, belongs to the owner of the land contiguous thereto.174 (F) Foreshore Lands
[19.13] Part of Public Dominion
Foreshore lands are part of the public dominion.175 The term foreshore land was dened by the Court of Appeals in the case of Hacut v. Director of Lands176 which involved a parcel of land along Basilan Island. The appellate court, quoting from Bouviers Law Dictionary, dened foreshore lands as: that part of the land immediately in front of the shore; the part which is between high and low water marks, and alternately covered with water and left dry by the ux and reux of the tides. It is indicated by a middle line between the highest and lowest tides.177 In the two resolutions issued by the Supreme Court in 1965 involving the Ponce cases,178 the Supreme Court had the occasion to dene the term foreshore lands in relation to Republic Act No. 1899. The said Act, which was passed by Congress on June 22, 1957, authorizes municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, lling or other means, of any foreshore lands bordering their respective territories. The law, however, did not dene the term foreshore lands. In these cases, the Supreme Court upheld the dictionary meaning of the term foreshore lands that the Court of Appeals adopted in the Hacut case. In these cases, the City of Cebu entered into a reclamation contract with the Cebu Development Corporation to reclaim foreshore land along the coast of Cebu City pursuant to R.A. No. 1899. The Supreme Court declared that the authority to reclaim granted to chartered cities and municipalities under R.A. No. 1899 is limited to foreshore lands only
174 Heirs of Emiliano Navarro v. IAC, supra, 90; citing Government of the P.I. v. Colegio de San Jose, 53 Phil. 423 (1929); Republic v. Court of Appeals, 131 SCRA 532 (1984); Republic v. Alagad, 169 SCRA 455 (1989); and Meneses v. CA, 246 SCRA 162 (1995). 175 Republic v. CA, 281 SCRA 639 (1997). 176 49 O.G. No. 5, p. 1863 (1953). 177 At p. 1865. 178 Ponce v. Gomez, L-21870, February 3, 1965, and Ponce v. City of Cebu, L-22669, June 24, 1966.
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which, quoting Corpus Juris, is that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary ow of the tides. Thus, in the Ponce cases, the Supreme Court upheld the Cebu City ordinance but only with respect to the reclamation of the foreshore areas, and nullied the same with respect to the submerged areas. In Republic v. Court of Appeals,179 the Supreme Court declared as invalid the ordinances passed by the Pasay City and the reclamation agreements it entered into with Republic Real Estate Corporation on the ground that the subject matter thereof were submerged lands and not foreshore lands. The Court held that the term foreshore lands cannot be unduly stretched to include the submerged areas. The Court reiterated what was said in the Ponce cases that the term foreshore refers to that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary ow of the tides. In Chavez v. Public Estates Authority,180 the Court declared as invalid the joint venture agreement between Public Estates Authority (PEA) and Amari Coastal Bay Development Corporation (Amari). In said case, PEA entered into a joint venture agreement with Amari obligating itself to convey title and possession over 750 hectares of land, 592.15 hectares or 78% of the total area are still submerged and permanently under the waters of Manila Bay. Under the said agreement, the PEA conveyed to Amari the submerged lands even before their actual reclamation, although the documentation of the deed of transfer and issuance of the certicates of title would be made only after actual reclamation. A question arose with respect to the validity of this transaction. In declaring the contract to be invalid the Supreme Court held: Submerged lands, like the waters (sea or bay) above them, are part of the States inalienable natural resources. Submerged lands are property of public dominion, absolutely inalienable and outside the commerce of man. This is also true with respect to foreshore lands. Any sale of submerged or foreshore lands is void being contrary to the Constitution.
179 180
299 SCRA 199 (1998). 415 SCRA 403 (2003).
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(G)
Lakes
[19.14] Ownership of Lakes
Natural lakes and lagoons and their beds belong to the State181 and are part of public dominion.182 Lakes and lagoons naturally occurring on private lands also belong to the State.183 Hence, lakes and lagoons developed by a private person on private lands are of private ownership. The Water Code of the Philippines, however, prohibits any person from developing a lake, stream or spring for recreational purposes without rst obtaining a permit from the National Water Resources Council.184 The Laguna de Bay has long been recognized as a lake.185 As such, the accretion occurring therein, by mandate of Article 84 of the Spanish Law of Waters of 1866, belongs to the owner of the land contiguous thereto.186
[19.15] Natural Bed of Lakes, Dened
What is the natural bed or basin of lakes? In the case of Republic v. Court of Appeals,187 the Supreme Court dened the extent of a lake bed, as follows: The natural bed or basin of lakes, ponds, or pools, is the ground covered by their waters when at their highest ordinary depth.188 In Republic v. Court of Appeals, the Republic, thru the Director of Lands, opposed the registration of a parcel of land with an area of 17,311 square meters and situated near the shore of Laguna de Bay,
Art. 5(c), Water Code of the Philippines. Art. 502(4), NCC. 183 Art. 6(b), Water Code of the Philippines. (Note: To this extent, the provision of Art. 503[2] of the NCC is deemed repealed. The repealing clause of the Water Code provides, in part: Art. 100. The following laws, parts and/or provisions of laws are hereby repealed: a. The provisions of the Spanish Law on Waters of August 3, 1886, the Civil Code of the Philippines [RA 386] on ownership of waters, easements relating to waters, use of public waters and acquisitive prescription on the use of waters, which are inconsistent with the provisions of this Code. xxx) 184 Art. 41, Water Code of the Philippines. 185 Government of P.I. v. Colegio de San Jose, 53 Phil. 423 (1929); Republic v. Court of Appeals, 131 SCRA 532 (1984); Republic v. Alagad, 169 SCRA 455 (1989). 186 Heirs of Emiliano Navarro v. IAC, supra, 90, citing Government of the P.I. v. Colegio de San Jose, 53 Phil. 423 (1929); Republic v. Court of Appeals, 131 SCRA 532 (1984); Republic v. Alagad, 169 SCRA 455 (1989); and Meneses v. CA, 246 SCRA 162 (1995). 187 131 SCRA 532 (1984). 188 Citing Art. 74 of the Law of Waters of 1866.
181 182
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about twenty (20) meters therefrom, on the ground that such is part of the public domain and therefore not registrable. The Director of Lands contends that since the land sought to be registered is covered with water four to ve months a year, the same is part of the lake bed of Laguna de Bay, or is at least, a foreshore land. The rise in the water level of the Laguna de Bay, as observed four to ve months a year during the rainy season, is caused by the rains. It is the rains which bring about the inundation of a portion of the land in question. Applying the provisions of Article 74 of the Law of Waters of 1866, the Supreme Court held that since the rise in the water level which causes the submersion of the land occurs during a shorter period (four to ve months a year) than the level of the water at which the land is completely dry, the latter should be considered as the highest ordinary depth of Laguna de Bay. Therefore, the Court concludes, the land sought to be registered is not part of the bed or basin of Laguna de Bay, and therefore capable of registration as private property. In Republic v. Alagad,189 the Supreme Court dened the highest ordinary depth of the waters of the Laguna de Bay as the highest depth of the waters during the dry season or such depth being the regular, common, natural, which occurs always or most of the time during the year. Otherwise stated, where the rise in water level is due to the extraordinary action of nature, rainfall for instance, the portions inundated thereby are not considered part of the bed or basin of the body of water in question.190 It cannot therefore be said to be foreshore land but land outside of the public dominion, and land capable of registration as private property.191 (H) Others of Similar Character
[19.16] Creeks
A creek is dened as a recess or arm extending from a river and participating in the ebb and ow of the sea.192 It is a property belonging to the public domain which is not susceptible to private appropriation and
169 SCRA 455, 463-464, citing Republic v. CA, supra. Id., at 464. 191 Id. 192 Maneclang v. Intermediate Appellate Court, 161 SCRA 469, 471 (1988), citing Mercado v. Municipal President of Macabebe, 59 Phil. 592 (1934); see also Maneclang v. IAC, 144 SCRA 553, 556 (1986); Usero v. Court of Appeals, 449 SCRA 352, 359 (2005).
189 190
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acquisitive prescription,193 and, as public water, it cannot be registered under the Torrens System in the name of any individual.194 It is included in the phrase others of similar character in paragraph 1 of Article 420 of the New Civil Code.195 20. Property of Public Dominion: For Public Service All properties of the State that are devoted or intended for some public service are likewise part of the public dominion.196 As earlier explained, these properties cannot be used indiscriminately by anyone but only by those that are authorized by proper authority. A good example of a property falling under this category is the Roppongi property.197 The Roppongi property is one of the four (4) properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan in 1956. Under the said agreement, the Roppongi property was specically designated to house the Philippine Embassy. As such, the nature of the Roppongi lot as property for public service is expressly spelled out.198 It is dictated by the terms of the Reparations Agreement and the corresponding contract of procurement which bind the Philippine government and the Japanese government.199 As property of public dominion, the Roppongi lot is outside the commerce of men and cannot be alienated.200 21. Property of Public Dominion: For the Development of National Wealth Property of public dominion pertaining and/or belonging to the State refers not only to property devoted to public use or to some public service, but also to property devoted to the development of the national wealth. This class of property constituted property of public dominion although employed for some economic or commercial activity to increase the national wealth.201
Id., 471; see also Celestial v. Cachopero, 413 SCRA 469 and Usero v. CA, supra, 359. Id., 471; see also Usero v. CA, supra, 359. 195 Usero v. CA, supra, 359. 196 Art. 420(2), NCC. 197 Laurel v. Garcia, 187 SCRA 797, 808 (1990). 198 Id., 807. 199 Id., 807. 200 Id., 808. 201 See Chavez v. Public Estates Authority, 384 SCRA 152, 192 (2002).
193 194
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[21.1] The Regalian Doctrine and State Ownership of Natural Resources
Under the Regalian Doctrine, all lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State.202 The Spaniards rst introduced the doctrine to the Philippines through the Laws of the Indies and the Royal Cedulas, specically, Law 14, Title 12, Book 4 of the Novisima Recopilacion de Leyes de las Indias which laid the foundation that all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain.203 Upon the Spanish conquest of the Philippines, ownership of all lands, territories and possessions in the Philippines passed to the Spanish Crown.204 The Laws of the Indies were followed by the Ley Hipotecaria or the Mortgage Law of 1893. The Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as possessory claims. The Royal Decree of 1894 or the Maura Law partly amended the Mortgage Law as well as the Law of the Indies. The Maura Law was the last Spanish land law promulgated in the Philippines. It required the adjustment or registration of all agricultural lands, otherwise the lands would revert to the State.205 The 1935, 1973 and 1987 Constitutions adapted the Regalian doctrine substituting, however, the State, in lieu of the King, as the owner of all lands and waters of the public domain.206 Justice Reynato S. Puno, in his separate opinion in Cruz v. Secretary of Environment and Natural Resources,207 explained thus: One of the xed and dominating objectives of the 1935 Constitutional Convention was the nationalization and conservation of the natural resources of the country. There
202 Collado v. Court of Appeals, 390 SCRA 343, 354 (2002), citing Republic v. Sayo, 191 SCRA 71 (1990). 203 Id., 354-355, citing the Separate Opinion of J. Puno in Cruz v. Secretary of Environment and Natural Resources, 347 SCRA 128 (2000). 204 Id., 355. 205 Id., 355. 206 Id., 357, citing the Separate Opinion of J. Puno in Cruz v. Secretary of Environment and Natural Resources, supra. 207 Supra, at pp. 171-172.
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was an overwhelming sentiment in the Convention in favor of the principle of state ownership of natural resources and the adoption of the Regalian doctrine. State ownership of natural resources was seen as a necessary starting point to secure recognition of the states power to control their disposition, exploitation, development, or utilization. The delegates to the Constitutional Convention very well knew that the concept of State ownership of land and natural resources was introduced by the Spaniards, however, they were not certain whether it was continued and applied by the Americans. To remove all doubts, the Convention approved the provision in the Constitution afrming the Regalian doctrine. The 1987 Constitution reafrmed the Regalian doctrine in Section 2 of Article XII on National Economy and Patrimony,208 to wit: Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, sheries, forests or timber, wildlife, ora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities or it may enter into coproduction, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twentyve years, renewable for not more than twenty-ve years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply, sheries, or industrial uses other than the development of water power, benecial use may be the measure and limit of the grant.
208 Separate Opinion of J. Puno in Cruz v. Secretary of Environment and Natural Resources, supra, 173.
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xxx. Under the Regalian Doctrine embodied in the present Constitution, all lands of the public domain as well as all natural resources enumerated in the above-quoted provision, whether on public or private land, belong to the State.209 (A) Natural Resources
[21.2] Fishponds
Fishponds are owned by the State.210 The 1987 Constitution specically declares that all lands of the public domain, waters, sheries, and other natural resources belong to the State. Included here are the shponds, which may not be alienated but only leased.211 Possession thereof, no matter how long, cannot ripen into ownership.212 Under Section 45 of R.A. No. 8550, otherwise known as The Philippine Fisheries Code of 1998, public lands such as tidal swamps, mangroves, marshes, foreshore lands and ponds suitable for shery operations shall not be disposed or alienated. They may, however, be the subject matter of a shpond lease agreement.213
[21.3] Watershed Reservation
A watershed reservation is also a natural resource214 and cannot therefore be alienated.215 A positive act (e.g., an ofcial proclamation) of the Executive Department is needed to declassify land which had been earlier classied as a watershed reservation and to convert it into alienable or disposable land for agricultural or other purposes.216 Unless and until the land classied as such is released in an ofcial proclamation so that it may form part of the disposable agricultural lands of the public domain, the rules on conrmation of imperfect title do not apply.217
Id., 173. Menchavez v. Teves, Jr., 449 SCRA 380, 391 (2005). 211 Id. 212 Id. 213 Id. 214 Collado v. CA, supra. 215 Id. 216 Id., 369. 217 Id.
209 210
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[21.4] Submerged Lands
Submerged lands, like the waters (sea or bay) above them, are part of the States inalienable natural resources.218 Submerged lands are property of public dominion, absolutely inalienable and outside the commerce of man.219 This is also true with respect to foreshore lands. Any sale of submerged or foreshore lands is void being contrary to the Constitution.220 (B) Lands of the Public Domain
[21.5] Classication
Under Section 3 of Article XII of the 1987 Philippine Constitution, lands of the public domain are classied into agricultural, forest or timber, mineral lands and national parks. Only agricultural lands are allowed, however, to be alienated.221 On the other hand, mineral and timber or forest lands are not subject to private ownership unless they are rst reclassied as agricultural lands and so released for alienation.222 Hence, it is already a settled rule that forest lands or forest reserves are not capable of private appropriation, and possession thereof, however long, cannot convert them into private property, unless such lands are reclassied and considered disposable and alienable by the Director of Forestry.223
[21.6] Classication of Public Lands, Prerogative of the Executive
Agricultural public lands may be dened as those alienable portions of the lands of the public domain which are not forest or timber, mineral,224 or national parks.225 Their disposition is provided for under Commonwealth Act No. 141 (Sections 6-7), which states that it is only the President, upon the recommendation of the proper department head, who has the authority to classify the lands of the public domain into alienable or disposable, timber and mineral lands.
Chavez v. Public Estates Authority, supra. Id. 220 Id. 221 Sec. 3, Art. XII, 1987 Philippine Constitution. 222 Director of Forestry v. Villareal, 170 SCRA 598, 601 (1989). 223 Republic v. IAC, 186 SCRA 88, 93 (1990). 224 See Republic v. De Porkan, 151 SCRA 88; Krivenko v. Register of Deeds, 79 SCRA 461; Mapa v. Insular Government, 10 Phil. 175. 225 See Sec. 3, Art. XII, 1987 Constitution.
218 219
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The classication of public lands, therefore, is an exclusive prerogative of the Executive Department of the Government and not of the courts.226 In the absence of such classication, the land remains as unclassied land until it is released therefrom and rendered open to disposition.227 This is in consonance with the Regalian doctrine that all lands of the public domain belong to the State, and that the State is the source of any asserted right to ownership in land and charged with the conservation of such patrimony.228 As such, all lands not appearing to be clearly within private ownership are presumed to belong to the State. Unless public land is shown to have been reclassied or alienated to a private person by the State, it remains part of the inalienable public domain. To overcome this presumption, incontrovertible evidence must be established that the land subject of the application is alienable or disposable.229
[21.7] When Public Lands Classied As Patrimonial Property
Since property of public dominion is outside the commerce of man and not susceptible to private appropriation and acquisitive prescription, the adverse possession which may be the basis of a grant of title in the conrmation of an imperfect title under the Public Land Act refers only to alienable or disposable portions of the public domain.230 It is only after the Government has declared the land to be alienable and disposable agricultural lands that the year of entry, cultivation and exclusive and adverse possession can be counted for purposes of an imperfect title.231 From the foregoing, it appears that agricultural public lands are classied as patrimonial property of the State as soon as they are made available for alienation or disposition. Prior to the reclassication of public lands into agricultural lands and prior to their being made available for alienation and disposition, they form part of the property of public dominion, under Article 420, paragraph 2, for the development of the national wealth and under Section 2 of Article XII of the 1987 Constitution.232
Director of Lands v. Court of Appeals, 129 SCRA 689, 692. Id. 228 Id. 229 Republic v. Lao, 405 SCRA 291, 298. 230 Celestial v. Cachopero, 413 SCRA 469, 485. 231 Id. 232 II Tolentino, Civil Code of the Phil., 1992 ed., 38.
226 227
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22. Characteristics of Properties of Public Dominion The following are the characteristics of properties of public dominion:
[22.1] They Are Outside the Commerce of Man
Properties of public dominion are outside the commerce of man.233 Being outside the commerce of man, it cannot be alienated or leased or otherwise be the subject matter of contracts.234 Hence, the right of the public to use public property may not be bargained away through contract.235 In Dacanay v. Asistio,236 for example, when certain public streets in Caloocan City were converted into ea markets and leased to several vendors, the Supreme Court held that such leases were null and void since a public street is property for public use hence outside the commerce of man. Being outside the commerce of man, it may not be the subject of lease or other contract. In this case, the Court directed the City Mayor to demolish the market stalls occupying said city streets. In Maneclang v. Intermediate Appellant Court,237 the Supreme Court declared as null and void the compromise agreement between the parties since the stipulations contained therein partake of the nature of an adjudication of ownership in favor of one of the parties of the shpond in dispute which was found to be originally a creek forming a tributary of the Agno River. Being outside the commerce of man, these properties may not be alienated. In Laurel v. Garcia,238 for example, the Supreme Court held that since the Roppongi Property is a property of public dominion it cannot be alienated. In Chavez v. Public Estates Authority,239 the Court voided the joint venture agreement between PEA and Amari since the former conveyed to the latter submerged lands, which are declared to
Dacanay v. Asistio, Jr., 208 SCRA 404, 411 (1992). Id., citing Villanueva v. Castaeda and Macalino, 15 SCRA 142; Municipality of Cavite v. Rojas, 30 Phil. 602; Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot v. De la Fuente, 48 O.G. 4860. 235 Id. 236 Supra. 237 114 SCRA 553 (1986). 238 187 SCRA 797, 808 (1990). 239 Supra.
233 234
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be part of the States inalienable natural resources, hence, absolutely inalienable. In Binalay v. Manalo,240 it was held that the buyer did not acquire private ownership of the bed of the eastern branch of the Cagayan River even if it was included in the deeds of absolute sale executed by the sellers since the sellers could not have validly sold land that constituted property of public dominion. With respect to natural resources, however, the Constitution allows the State to enter into co-production, joint venture or productionsharing agreements with private individuals or corporations for their exploration, development and utilization.241 With respect to shponds which are likewise owned by the State,242 they may be leased although they may not be alienated. Under Section 45 of R.A. No. 8550, otherwise known as The Philippine Fisheries Code of 1998, public lands such as tidal swamps, mangroves, marshes, foreshore lands and ponds suitable for shery operations shall not be disposed or alienated but they may be the subject matter of a shpond lease agreement.
[22.2] They Are Not Susceptible To Private Appropriation and Acquisitive Prescription
Properties of public dominion are not susceptible to private appropriation and acquisitive prescription.243 Thus, in Celestial v. Cachopero,244 the Court held that the petitioners claim of ownership over a parcel of land which is a dried-up bed of the Salunayan Creek based on her alleged long term adverse possession must necessarily fail since the same is a property of public dominion. In Palomo v. Court of Appeals,245 the Court held that the adverse possession which may be the basis of a grant of title in conrmation of imperfect title cases applies only to alienable lands of the public domain. In this case, since the subject property is part of the reservation for provincial park purposes and, thus, part of the forest zone, it is not registrable and its possession, no matter how lengthy, cannot convert it into private property.
Supra. See Sec. 2, Article XII of the 1987 Constitution. 242 Menchavez v. Teves, Jr., 449 SCRA 380, 391 (2005). 243 Celestial v. Cachopero, supra, 485. 244 Supra. 245 266 SCRA 392, 401 (1997).
240 241
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Since properties of public dominion are not subject to private appropriation, they cannot be registered under the Land Registration Law and be the subject of a Torrens Title. In Republic v. Court of Appeals,246 the Court ruled that the lower court cannot validly order the registration of two lots in the names of private respondents since these lots were portions of the bed of the Meycauayan river and are therefore classied as property of the public domain under Article 420, paragraph 1 and Article 502, paragraph 1 of the Civil Code of the Philippines. In Republic v. Intermediate Appellate Court,247 the Court likewise held that the subject parcel of land, being part of a forest reserve, cannot be registered.
[22.3] They Are Not Subject To Attachment and Execution
Properties of public dominion, being for public use, are not subject to levy, encumbrance or disposition through public or private sale.248 Any encumbrance, levy on execution or auction sale of any property of public dominion is void for being contrary to public policy.249 Essential public services will stop if properties of public dominion are subject to encumbrances, foreclosures and auction sale.250 Hence, it was held in one case251 that the City of Paraaque cannot foreclose and compel the auction sale of the 600-hectare runway of the MIAA for non-payment of real estate tax since the Airport Lands and Buildings of MIAA are properties of public dominion.252 In Vda. de Tan Toco v. Municipal Council of Iloilo,253 the Supreme Court held that the property of a municipality, whether real or personal, necessary for governmental purposes cannot be attached and sold at public auction to satisfy a judgment against the municipality. According to the Court, the necessity for government service justies that the property for public use of the municipality be exempt from execution. In this case, by virtue of a writ of execution obtained by the plaintiff against the Municipality of Iloilo, the sheriff attached two auto trucks
132 SCRA 514 (1984). 186 SCRA 88 (1990). 248 Manila International Airport Authority v. CA, supra. 249 Id. 250 Id. 251 Id. 252 See supra 18.9. 253 49 Phil. 52.
246 247
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used for street sprinkling, a police patrol automobile, police station and market together with the lots which they occupy. The Court declared the attachment as invalid. In Tufexis v. Olaguera,254 the Court likewise held that the usufruct of the public market was not subject to attachment on account of its being of a public character.
[22.4] They Cannot Be Burdened With Voluntary Easements
In Villarico v. Sarmiento,255 for example, the petitioner claimed a right of way on a lot owned by the DPWH and on which stairways were built for the use of the people as a passageway to the Ninoy Aquino Avenue. The Supreme Court held that since the lot is a property of public dominion devoted to public use, it cannot be burdened by a voluntary easement or right of way in favor of Villarico.
Villarico v. Sarmiento 442 SCRA 110 (2004) Villarico is the owner of a lot in La Huerta, Paraaque City. His lot is separated from the Ninoy Aquino Avenue (highway) by a strip of land belonging to the government. As this highway was elevated by four meters and therefore higher than adjoining areas, the DPWH constructed stairways at several portions of this strip of public land to enable the people to have access to the highway. Sometime in 1991, Villarico had a building constructed on a portion of said government land. In November of that same year, a part thereof was occupied by Andoks Litson and Marites Carinderia. In 1993, by means of a Deed of Exchange of Real Property, Villarico acquired a portion of the area owned by the government and registered in his name under TCT No. 74430. In 1995, Villarico led with the RTC of Paraaque City a complaint for accion publiciana against several respondents, including Sarmiento, alleging that respondents structures on the government land closed his right of way to the Ninoy Aquino Avenue and encroached on a portion of his lot covered by TCT No. 74430. Respondents deny the allegations claiming that they have been issued licenses and permits by Paraaque City to construct their buildings on the area and that Villarico has no right over the subject property as it belongs to the government. In holding that neither Villarico nor respondents have a right of possession
254 255
32 Phil. 654. 442 SCRA 110 (2004).
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over the disputed lot where the stairways were built as it is a property of public dominion, the Supreme Court explained that the lot on which the stairways were built is for the use of the people as passageway to the highway belongs to the State. Consequently, it is a property of public dominion. And considering that the said lot is a property of public dominion, it cannot be burdened by a voluntary easement or right of way in favor of Villarico. In fact, its use by the public is by mere tolerance of the government through the DPWH. Hence, Villarico cannot appropriate it for himself and he cannot claim any right of possession over it.
Art. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property. (340a)
23. Patrimonial Property of the State All other property of the State, which is not of the character stated in Article 420 of the New Civil Code, is patrimonial property.256 It is considered as a property of the State in what may be called the private sense.257 It is said that over this kind of property the State has the same rights and has the same power of disposition as private individuals subject, of course, to existing rules and regulations.258 Thus, in Chavez v. Public Estates Authority,259 the Court held that government owned lands, as long they are patrimonial property, can be sold to private parties, whether Filipino citizens or qualied private corporations.
[23.1] Examples of Patrimonial Property [23.1.1] Friar Lands
From the beginnings of Spanish colonization up to the establishment of American sovereignty, religious corporations had acquired large tracts of land in the Philippines, breeding feelings of unrest and agitation among Filipino tenants occupying those lands.260 In order to avert any outbreak of violence, the Philippine Bill of 1902 authorized the Insular Government to exercise the power of eminent domain over lands which, on August 13, 1898, were owned or held by religious
Art. 421, NCC. Hinunangan v. Director of Lands, 24 Phil. 124, 127 (1913). 258 II Caguioa, Civil Code of the Phil., 1966 ed., 36. 259 403 SCRA 1, 31, G.R. No. 133250, May 6, 2003. 260 Dissenting Opinion of J. Tinga in Alonso v. Cebu Country Club, Inc., 417 SCRA 115, citing A. Maalac and R. Maalac, Land Registration, 3rd ed., 95.
256 257
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orders in such tracts or parcels or in such manner as in the opinion of the Philippine Commission injuriously affected the peace and welfare of the people. Hence, the Friar Lands Act (Act No. 1120) was passed to appease the restless Filipinos and to curtail and diminish the inuence of the Catholic Church. Thus, lands acquired by the government from religious corporations or orders (during the Taft administration in 1903) are referred to as friar lands. Friar lands over which the Government holds title are not public lands but private or patrimonial property of the State.261 However, they can be alienated only upon proper compliance with the requirements of Act No. 1120 or the Friar Lands Act.262
[23.1.2] Alienable and Disposable Lands of the Public Domain
Alienable lands of the public domain, or those available for alienation or disposition, are part of the patrimonial properties of the State.263 They are State properties available for private ownership except that their appropriation is qualied by Sections 2 and 3 of Article XII of the Constitution and the public land laws.264 Before lands of the public domain are declared available for private acquisition, or while they remain intended for public use or for public service or for the development of national wealth, they would partake of properties of public dominion just like mines before their concessions are granted, in which case, they cannot be alienated or leased or otherwise be the object of contracts.265 In contrast, patrimonial properties may be bought or sold or in any manner utilized with the same effects as properties owned by private persons.266
[23.1.3] Lands Covered by Republic Act No. 7227
Well-settled is the doctrine that public land granted to an enduser government agency for a specic public use may subsequently
Jacinto v. Director of Lands, 49 Phil. 853 (1926). Alonso v. Cebu Country Club, Inc., supra. 263 Separate Opinion of J. Bellosillo in Chavez v. PEA, 403 SCRA 1, 37, citing II Tolentino, Civil Code of the Philippines 38 (1992). 264 Id. 265 Id., at p. 38, citing Montano v. Insular Government, 22 Phil. 572 (1909). 266 Id.; citing Manila Lodge No. 761 v. CA, 73 SCRA 162.
261 262
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be withdrawn by Congress from public use and declared patrimonial property to be sold to private parties.267 R.A. No. 7227 creating the BCDA is a law that declares specic military reservations no longer needed for defense or military purposes and reclassies such lands as patrimonial property for sale to private parties.268
[23.2] Disposition of Patrimonial Property
It was held in Laurel v. Garcia,269 that any conveyance of a real property falling under the patrimonial property of the State must be authorized and approved by a law enacted by the Congress. The Court cited Section 48, Book I of the Administrative Code of 1987 (Executive Order No. 292), which reads: SEC. 48. Ofcial Authorized to Convey Real Property. Whenever real property of the Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following: (1) For property belonging to and titled in the name of the Republic of the Philippines, by the President, unless the authority therefore is expressly vested by law in another ofcer. (2) For property belonging to the Republic of the Philippines but titled in the name of any political subdivision or of any corporate agency or instrumentality by the executive head of the agency or instrumentality. Hence, in the case of Laurel, the Court held that even if the Roppongi property is patrimonial property of the State, then President Corazon Aquino could not sell it since there was no law authorizing her to do so.
[23.3] Not Susceptible To Acquisitive Prescription
There is a view to the effect that patrimonial properties of the State are subject to acquisitive prescription on the basis of Article 1113 of the New Civil Code, which reads:
Chavez v. Public Estates Authority, 403 SCRA 1, 31 (2003). Id. 269 187 SCRA 797, 812.
267 268
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Art. 1113. All things which are within the commerce of men are susceptible of prescription, unless otherwise provided. Property of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription. It has been argued that the afore-quoted provision impliedly authorizes the acquisition of patrimonial properties of the State by way of acquisitive prescription. However, it is an ironclad dictum that prescription can never lie against the Government.270 Thus, it is expressly provided in paragraph (4) of Article 1108 that prescription, both acquisitive and extinctive, does not run against the State and its subdivisions. The provisions of Article 1113 quoted above are not even in conict with paragraph (4) of Article 1108. Far from being in conict with the latter, the former in fact reiterates the rule in the latter that property of the State or any of its subdivision shall not be the object of prescription. The rule that Statutes of Limitation do not run against the State, unless therein expressly provided, is founded on the great principle of public policy, applicable to all governments alike, which forbids that the public interests should be prejudiced by the negligence of the ofcers or agents to whose care they are conded.271 Hence, the rule stated in paragraph (4) of Article 1108 cannot be modied, altered or changed by mere implication. Had Congress really intended to subject patrimonial properties of the State to acquisitive prescription it could have expressly provided the same in Article 1113. In Alonso v. Cebu Country Club, Inc.,272 the Supreme Court held in unequivocal language: Neither may the rewards of prescription be successfully invoked by respondent, as it is an iron-clad dictum that prescription can never lie against the Government. Since respondent failed to present the paper trail of the propertys conversion to private property, the lengthy possession and occupation of the disputed land by respondent cannot be
Alonso v. Cebu Country Club, Inc., supra, 127. Id. 272 Id.
270 271
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counted in its favor, as the subject property being a friar land, remained part of the patrimonial property of the Government. Possession of patrimonial property of the Government, whether spanning decades or centuries, can not ipso facto ripen into ownership. Moreover, the rule that statutes of limitation do not run against the State, unless therein expressly provided, is founded on the great principle of public policy, applicable to all governments alike, which forbids that the public interests should be prejudiced by the negligence of the ofcers or agents to whose care they are conded. (Italics supplied) Consequently, unless the law expressly provides, a patrimonial property of the State is not subject to acquisitive prescription. An example of a law that allows the acquisition of patrimonial properties of the State by way of acquisitive prescription is Commonwealth Act No. 141 which authorizes conrmation of imperfect title. The adverse possession which may be the basis of a grant of title in conrmation of imperfect title cases, however, applies only to alienable lands of the public domain273 which fall under the patrimonial properties of the State.
Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State. (341a)
24. Conversion: From Public Dominion to Patrimonial Property Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State.274 It should be noted that Article 422 of the New Civil Code does not address the question of who has the authority to effect such conversion and neither does it set out or refer to any procedure for such conversion.275 In other words, no specic formula or procedure of conversion is provided in Article 422. Our case law, however, contains some fairly explicit pronouncements on this point.276
Palomo v. Court of Appeals, supra. Art. 422, NCC. 275 See Dissenting Opinion of J. Feliciano in Laurel v. Garcia, supra, 821. 276 Id.
273 274
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When land of the public domain ceases to be one, or when the change takes place, is a question our courts have debated early.277 In Municipality of Oas v. Roa,278 it was held that property of the public dominion, a public plaza in this instance, becomes patrimonial property upon use thereof for purposes other than a plaza. In Municipality of Hinunangan v. Director of Lands,279 it was held that when a fortress ceases to be used for the purpose for which it was constructed, it becomes a patrimonial property of the state. In these two cases, the character of the property, and any change occurring therein, depends on the actual use to which it is dedicated. In Ignacio v. Director of Lands280 case, however, the Supreme Court ruled that a property continues to be part of the public domain, not available for private appropriation or ownership until there is a formal declaration on the part of the government, either through the Executive department or the Legislative, to the effect that the property is no longer needed for public service, for public use or for special industries. Thus, under Ignacio, either the Executive Department or the Legislative Department may convert property of the State of public dominion into patrimonial property of the State. In Cebu Oxygen Acetylene v. Bercilles,281 the City Council of Cebu by resolution declared a certain portion of an existing street as an abandoned road, the same not being included in the city development plan. Subsequently, by another resolution, the City Council of Cebu authorized the acting City Mayor to sell the land through public bidding. Although there was no formal and explicit declaration of conversion of property for public use into patrimonial property, the Supreme Court declared the withdrawal of the property in question from public use and its subsequent sale as valid. Then came the case of Laurel v. Garcia.282 In this case, the property involved (Roponggi property) was acquired from the Japanese
See Concurring Opinion of J. Sarmiento in Laurel v. Garcia, supra, 818. 7 Phil. 20 (1906), cited in the Concurring Opinion of J. Sarmiento in Laurel v. Garcia, supra, 818. 279 24 Phil. 124 (1913), cited in the Concurring Opinion of J. Sarmiento in Laurel v. Garcia, supra, 818. 280 108 Phil. 335 (1960). 281 66 SCRA 481 (1975). 282 187 SCRA 797 (1990).
277 278
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government as indemnication to the Filipino people for their losses and suffering during World War II. As intended, it became the site of the Philippine Embassy in Japan for sometime until the embassy was transferred to another site. Since then, the Philippine Government has failed to develop the Roponggi property. In 1985, the Executive Department passed an administrative order creating a committee to study the disposition or utilization of some properties, including the Roponggi property. In 1987, the President issued Executive Order No. 296 providing that some properties, including the Roponggi property, be made available for sale or lease to non-Filipinos. Answering the question as to whether the Roponggi property has been converted into patrimonial property, the Supreme Court held that abandonment of the intention to use the Roponggi property for public service and to make it a patrimonial property cannot be inferred from the non-use alone specially if the non-use was attributable not to the governments own deliberate and indubitable will but to a lack of nancial support to repair and improve the property. The Court likewise ruled that E.O. No. 296 does not declare that the property has lost its public character since the executive order merely intends to make the properties available to foreigners and not to Filipinos. It was based on the wrong premise or assumption that the Roponggi was earlier converted into alienable real property. The case of Laurel v. Garcia has cleared the uncertainties brought about by earlier interpretations that the nature of property whether public or patrimonial is predicated on the manner it is actually used, or not used. In ne, it is now clear that there must be an afrmative act, either on the part of executive or the legislative, to reclassify property of the public dominion into patrimonial. The intention to reclassify must be clear, denite and must be based on correct legal premises. Hence, the conversion can no longer be inferred from the non-use alone of the property for the purpose to which it is intended.
Art. 423. The property of provinces, cities, and municipalities is divided into property for public use and patrimonial property. (343)
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25. Property of Provinces, Cities and Municipalities

[25.1] Classication of Properties of Political Subdivisions
The property of provinces, cities and municipalities is divided into property for public use and patrimonial property.283 The rst consists of the provincial roads, city streets, municipal streets, squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities or municipalities.284 All other property possessed by said provinces, cities or municipalities is patrimonial.285 The nature of properties owned by cities (municipalities and provinces) in this country is determined by the character of the use or service for which they are intended or devoted.286 Properties which are intended for public use or for some public service are properties for public use.287 All others are patrimonial properties.288 It matters not that the property is not actually devoted for public use or for some public service.289 If it has been intended for such use or service, and the city (municipality or province) has not devoted it to other uses, or adopted any measure which amounted to a withdrawal of the property from public use and service, the same remains property for public use, the fact that it is not actually devoted for public use or service notwithstanding.290
Agripino Capitulo, et al. v. Alejo Aquino No. 15488-R, 53 O.G. 1477 (1956) This case involves a lot owned by the City of Manila and situated around the intersections of Andalucia, Governor Forbes and Aragon Streets, City of Manila. This lot was donated to the City of Manila by the Sulucan Development Company exclusively for street purposes. Since its acquisition, the City of Manila formed the project to construct thereon a trafc circle. For reasons, however, not disclosed by the records, this project had not been carried out. Hence, it remained vacant. In ruling that the lot in question is property for
Art. 423, Civil Code; Macasiano v. Diokno, 212 SCRA 464, 469 (1992); Pilapil v. CA, 216 SCRA 33, 46 (1992). 284 Art. 424, 1st par., Civil Code; cited in Pilapil v. CA, supra, at p. 46. 285 Art. 424, 2nd par., Civil Code. 286 Agripino Capitulo, et al. v. Alejo Aquino, No. 15488-R, 53 O.G. 1477, November 19, 1956. 287 Ibid. 288 Ibid. 289 Ibid. 290 Ibid.
283
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public use of the City of Manila and not its patrimonial property, the Court of Appeals held xxx. The nature of properties owned by cities in this country is determined by the character of the use or service for which they are intended or devoted. Properties which are intended for public use or for some public service are properties for public use. All others are patrimonial properties. Art. 424, new Civil Code. It matters not that the property is not actually devoted for public use or for some public service. If it has been intended for such use or service, and the city has not devoted it to other uses, or adopted any measure which amounted to a withdrawal of the property from public use and service, the same remains property for public use, the fact that it is not actually devoted for public use or service notwithstanding.
Art. 424. Property for public use, in the provinces, cities, and municipalities, consists of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities. All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws. (344a)
26. Property for Public Use of Provinces, Cities and Municipalities

[26.1] Governed By Same Principles as Property of Public Dominion
The property of provinces, cities and municipalities for public use is governed by the same principles as property of public dominion of the same character.291 Hence, the following jurisprudence or principles are applicable to properties of the political subdivisions (provinces, cities and municipalities) for public use: a. They are outside the commerce of man.292 Being outside the commerce of man, it cannot be alienated or leased or otherwise be the subject matter of contracts.293
Pilapil v. CA, supra, at p. 46, citing Tolentino, Civil Code, Vol. II, 1983 ed., 38. Dacanay v. Asistio, Jr., 208 SCRA 404, 411 (1992). 293 Ibid., citing Villanueva v. Castaeda and Macalino, 15 SCRA 142; Municipality of Cavite v. Rojas, 30 Phil. 602; Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot v. De la Fuente, 48 O.G. 4860.
291 292
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b. c. d.
They cannot be acquired by prescription.294 They are not subject to attachment and execution.295 They cannot be burdened by any voluntary easement.296
Harty v. Municipality of Victoria 13 Phil. 152
When the town of Victoria was formed, a large public plaza was left in the center. This land formerly belonged to one Taedo, who donated part of the land for religious purposes, which portion was later occupied by the church. The remaining portion was kept an open space as a plaza. It is later claimed that the entire plaza was later on donated by the municipality to the church. The Supreme Court ruled that the property could not have been validly donated by the town to the church because the same was property for public use. Even assuming that the property was originally private property of Taedo, it must be assumed that he waived his right thereto for the benet of the townspeople since they have continuously enjoyed the use of the land as a public plaza. The property thus became property for public use. As such, it could not have been the validly donated by the town to the church. The same could not likewise be acquired by prescription. Municipality of Antipolo v. Zapanta 133 SCRA 820 (1984) In this case, the disputed property has been considered to be public land by the Municipality of Antipolo subject to its use and permission to use. It has been the site of the public market as far back as 1908, or at the latest, since 1920. Gradually, additional public structures were built thereon, like the Puericulture and Family Planning Center, the Integrated National Police Building, the Ofce of the Municipal Treasurer, and the public abattoir. Those public structures occupy almost the entire area of the land. Sometime in 1977, an application for the registration of the disputed property was led by two distinct applicants before the Court of First Instance of Rizal alleging that the disputed property was declared for taxation purposes in their names or of their predecessors-in-interest as early as 1918. The applicants claimed that they merely tolerated occupants by the Municipality of Antipolo. The CFI of Rizal approved the application. Thus, the Municipality of Antipolo questioned the approval made by the said court.
Insular Government v. Aldecoa, 19 Phil. 505. Tan Toco v. Municipal Council of Iloilo, 49 Phil. 52. 296 2-II Colin & Capitant 520, cited in Tolentino, Civil Code, Vol. II, 1983 ed., 29-30.
294 295
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In ruling in favor of the Municipality of Antipolo, the Supreme Court explained that at the time the application for registration was led, the disputed property was already devoted to public use and public service. Therefore, it was outside the commerce of man and could no longer be subject to private registration. [26.2] Provincial Roads, City Streets and Municipal Streets
A public street is property for public use and hence outside the commerce of man.297 Being outside the commerce of man, it may not be the subject of lease or other contract.298 Local governments have no authority whatsoever to control or regulate the use of public properties, like roads and streets, unless specic authority is vested upon them by Congress.299 In the case of Cebu Oxygen & Acetylene Co., Inc. v. Bercilles,300 the City Council of Cebu was expressly authorized under its Revised Charter to close any city road, street or alley, boulevard, avenue, park or square. The same Charter likewise expressly states that property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed. Thus, in that case the Supreme Court held that the withdrawal of an existing road from public use was valid thereby converting the withdrawn property into patrimonial property which can be the object of an ordinary contract. In the case of Favis v. City of Baguio,301 the power of the City Council of Baguio City to close city streets and withdraw them from public use was also assailed. The Supreme Court said: 5. So it is, that appellant may not challenge the city councils act of withdrawing a strip of Lapu-Lapu Street at its dead end from public use and converting the remainder thereof into an alley. These are acts well within the ambit of the power to close a city street. The city council, it would
Dacanay v. Asistio, supra. Ibid. 299 Macasiano v. Diokno, supra, at p. 469. 300 66 SCRA 481 (1975). 301 27 SCRA 1060.
297 298
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seem to us, is the authority competent to determine whether or not a certain property is still necessary for public use. Such power to vacate a street or alley is discretionary. And the discretion will not ordinarily be controlled or interfered with by the courts, absent a plain case of abuse or fraud or collusion. Faithfulness to the public trust will be presumed. So the fact that some private interests may be served incidentally will not invalidate the vacation ordinance. In Macasiano v. Diokno,302 the Court claried the authority of the local governments to close roads, streets and other similar public places. According to the Court, the closure should be for the sole purpose of withdrawing the road or other public property from public use when circumstances show that such property is no longer intended or necessary for public use or public service.303 When it is already withdrawn from public use, the property then becomes patrimonial property of the local government unit concerned.304 It is only then that the property can be the object of an ordinary contract.305 In Macasiano, the Court nullied the ordinance closing several streets in Paraaque for the purpose of establishing ea markets thereon. The Court reasoned that those roads and streets which are available to the public in general and ordinarily used for vehicular trafc are still considered public property devoted to public use. In such case, the local government has no power to use it for another purpose or to dispose of or lease it to private persons.306 In another case,307 the Metropolitan Manila Commission simply designated certain streets as sites for ea markets and pursuant thereto the Caloocan City mayor opened several ea markets in some city streets without withdrawing the same from public use. When the matter was elevated to the Supreme Court, it ruled that the subject streets were properties for public use hence outside of the commerce of man and may not therefore be subjected to lease or other contract. The Court
Supra. At p. 470. 304 Article 422, Civil Code; Cebu Oxygen, etc., et al. v. Bercilles, et al., supra. 305 Macasiano v. Diokno, supra. 306 Ibid., p. 471. 307 Dacanay v. Asistio, supra.
302 303
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further held that the right of the public to use the city streets may not be bargained away through contract.
Dacanay v. Asistio, Jr. 208 SCRA 404 (1992) May public streets or thoroughfares be leased or licensed to market stallholders by virtue of a city ordinance or resolution of the Metro Manila Commission? This is the issue posed in this case. The Supreme Court ruled that a public street is property for public use and hence outside the commerce of man. Being outside the commerce of man, it may not be the subject of lease or other contract. The Court adds: As the stallholders pay fees to the City Government for the right to occupy portions of the public street, the City Government, contrary to law, has been leasing portions of the streets to them. Such leases or licenses are null and void for being contrary to law. The right of the public to use the city streets may not be bargained away through contract. The interests of a few should not prevail over the good of the greater number in the community whose health, peace, safety, good order and general welfare, the respondent city ofcials are under legal obligation to protect. Macasiano v. Diokno 212 SCRA 464 (1992) In this case, the then municipality of Paraaque passed an ordinance authorizing the closure of several municipal streets for purposes of converting them as sites for ea market and/or vending areas. The municipality then entered into an agreement with Palanyag for the operation of ea market in the said streets. Subsequently, Brig. Gen. Macasiano of the PNP ordered the destruction and conscation of the stalls. Palanyag went to court. The trial court upheld the validity of the ordinance passed by the Municipality of Paraaque. Macasiano questioned the ruling of the trial court before the Supreme Court. In sustaining Macasiano, the Court explained We nd the petition meritorious. In resolving the question of whether the disputed municipal ordinance authorizing the ea market on the public streets is valid, it is necessary to examine the laws in force during the time the said ordinance was enacted, namely, Batas Pambansa Blg. 337, otherwise known as Local Government Code, in connection with established principles embodied in the Civil Code on property and settled jurisprudence on the matter. The property of provinces, cities and municipalities is divided into property for public use and patrimonial property (Art.
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423, Civil Code). As to what consists of property for public use, Article 424 of Civil Code states: ART. 424. Property for public use, in the provinces, cities and municipalities, consists of the provincial roads, city streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities or municipalities. All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws. Based on the foregoing, J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets are local roads used for public service and are therefore considered public properties of respondent municipality. Properties of the local government which are devoted to public service are deemed public and are under the absolute control of Congress (Province of Zamboanga del Norte v. City of Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence, local governments have no authority whatsoever to control or regulate the use of public properties unless specic authority is vested upon them by Congress. One such example of this authority given by Congress to the local governments is the power to close roads as provided in Section 10, Chapter II of the Local Government Code, which states: SEC. 10. Closure of roads. A local government unit may likewise, through its head acting pursuant to a resolution of its sangguniang and in accordance with existing law and the provisions of this Code, close any barangay, municipal, city or provincial road, street, alley, park or square. No such way or place or any part thereof shall be closed without indemnifying any person prejudiced thereby. A property thus withdrawn from public use may be used or conveyed for any purpose for which other real property belonging to the local unit concerned might be lawfully used or conveyed. (Emphasis ours). However, the aforestated legal provision which gives authority to local government units to close roads and other similar public places should be read and interpreted in accordance with basic principles already established by law. These basic principles have the effect of limiting such authority of the province, city or municipality to close a public street or thoroughfare. Article 424 of the Civil Code lays down the basic principle that properties of public dominion devoted to public use and made available to the
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public in general are outside the commerce of man and cannot be disposed of or leased by the local government unit to private persons. Aside from the requirement of due process which should be complied with before closing a road, street or park, the closure should be for the sole purpose of withdrawing the road or other public property from public use when circumstances show that such property is no longer intended or necessary for public use or public service. When it is already withdrawn from public use, the property then becomes patrimonial property of the local government unit concerned (Article 422, Civil Code; Cebu Oxygen, etc., et al. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975, 66 SCRA 481). It is only then that the respondent municipality can use or convey them for any purpose for which other real property belonging to the local unit concerned might be lawfully used or conveyed in accordance with the last sentence of Section 10, Chapter II of Blg. 337, known as Local Government Code. In one case, the City Council of Cebu, through a resolution, declared the terminal road of M. Boreas Street, Mabolo, Cebu City as an abandoned road, the same not being included in the City Development Plan. Thereafter, the City Council passed another resolution authorizing the sale of the said abandoned road through public bidding. We held therein that the City of Cebu is empowered to close a city street and to vacate or withdraw the same from public use. Such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract (Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975, 66 SCRA 481). However, those roads and streets which are available to the public in general and ordinarily used for vehicular trafc are still considered public property devoted to public use. In such case, the local government has no power to use it for another purpose or to dispose of or lease it to private persons. xxx [26.3] Squares, Fountains, Public Waters, Promenades, Etc.
Town or public plazas are properties of public dominion, to be devoted to public use and to be made available to the public in general.308 They are beyond the commerce of man and so cannot be the subject of lease or any other contractual undertaking.309 Indeed, this point was
Espiritu v. Municipal Council of Pozorrubio, 101 Phil. 869-870. Villanueva v. Castaeda, 154 SCRA 142, 148 (1987), citing Municipality of Cavite v. Rojas, 30 Phil. 602 and Espiritu v. Municipal Council of Pozorrubio, 101 Phil. 869-870.
308 309
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settled as early as 1915 in the case of Municipality of Cavite v. Rojas,310 where the Supreme Court declared as null and void the lease of a public plaza of the said municipality in favor of a private person. Mr. Justice Torres said in that case: According to Article 344 of the Civil Code: Property for public use in provinces and in towns comprises the provincial and town roads, the squares, streets, fountains, and public waters, the promenades, and public works of general service supported by said towns or provinces. The said Plaza Soledad being a promenade for public use, the municipal council of Cavite could not in 1907 withdraw or exclude from public use a portion thereof in order to lease it for the sole benet of the defendant Hilaria Rojas. In leasing a portion of said plaza or public place to the defendant for private use the plaintiff municipality exceeded its authority in the exercise of its powers by executing a contract over a thing of which it could not dispose, nor is it empowered so to do. The Civil Code, Article 1271, prescribes that everything which is not outside the commerce of man may be the object of a contract, and plazas and streets are outside of this commerce, as was decided by the supreme court of Spain in its decision of February 12, 1895, which says: Communal things that cannot be sold because they are by their very nature outside of commerce are those for public use, such as the plazas, streets, common lands, rivers, fountains, etc. Therefore, it must be concluded that the contract, Exhibit C, whereby the municipality of Cavite leased to Hilaria Rojas a portion of the Plaza Soledad is null and void and of no force or effect, because it is contrary to the law and the thing leased cannot be the object of a contract. In Espiritu v. Municipal Council of Pozorrubio,311 the Supreme Court held that town plaza cannot be used for the construction of
310 311
Supra. 102 Phil. 869-870.
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market stalls, specially of residences, and that such structures constitute a nuisance subject to abatement according to law. In Muyot v. de la Fuente,312 it was held that the City of Manila could not lease a portion of a public sidewalk on Plaza Sta. Cruz, being likewise beyond the commerce of man. Echoing Rojas, the decision said: Appellants claim that they had obtained permit from the government of the City of Manila, to construct booths Nos. 1 and 2, along the premises in question, and for the use of spaces where the booths were constructed, they had paid and continued paying the corresponding rentals. Granting this claim to be true, one should not entertain any doubt that such permit was not legal, because the City of Manila does not have any power or authority at all to lease a portion of a public sidewalk. The sidewalk in question, forming part of the public plaza of Sta. Cruz, could not be a proper subject matter of the contract, as it was not within the commerce of man (Article 1347, new Civil Code, and Article 1271, old Civil Code). Any contract entered into by the City of Manila in connection with the sidewalk, is ipso facto null and ultra vires. (Municipality of Cavite v. Roxas, et al., 30 Phil. 603.) The sidewalk in question was intended for and was used by the public, in going from one place to another. The streets and public places of the city shall be kept free and clear for the use of the public, and the sidewalks and crossings for the pedestrians, and the same shall only be used or occupied for other purposes as provided by ordinance or regulation; x x x. (Sec. 1119, Revised Ordinances of the City of Manila.) The booths in question served as fruit stands for their owners and often, if not always, blocked the free passage of pedestrians who had to take the plaza itself which used to be clogged with vehicular trafc. 27. Patrimonial Property of Political Subdivisions All other property possessed by provinces, cities or municipalities, which is not intended for public use, is patrimonial.313
312 313
G.R. No. L-6534, 48 O.G. 4860. Art. 424, 2nd par., Civil Code.
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Unlike in the classication regarding State properties, properties for public service in the provinces, cities and municipalities are not classied as public.314 However, the Supreme Court expressed the view that it is not inclined to hold that municipal property held and devoted to public service is in the same category as ordinary private property because of dire consequences detrimental to the local community, i.e., ordinary properties can be levied and attached and they can even be acquired thru adverse possession.315 In Agripino Capitulo, et al. v. Alejo Aquino,316 it was held that properties which are intended for public use or for some public service are properties for public use. All others are patrimonial properties.
[27.1] Reclaimed Lands Belonging To Political Subdivisions
The right to reclaim is a function of the sovereign who owns title to all the lands and waters of the public domain.317 The authority to reclaim is not a right or privilege accorded any person and the land reclaimed does not belong to whosoever undertakes its reclamation.318 Even private owners of lands adjoining bodies of water, especially the sea and navigable waters, cannot motu proprio undertake reclamation of shores and submerged lands and claim title thereto.319 Unless the State, through Congress, grants this right, it is only the National Government that can undertake reclamation work and assert title to reclaimed land.320 In several instances, however, the State delegated to specic municipalities the right to reclaim land. For example, the Philippine Legislature passed laws granting municipalities the right to reclaim foreshore or marshy lands within their respective territories.321 The rule remained, nonetheless, that no person, public or private, could undertake reclamation work and own the land they reclaimed without a specic grant from Congress.322 It was only with the passage of R.A. No. 1899
Province of Zamboanga del Norte v. City of Zamboanga, 22 SCRA 1334, 1342 (1968). Ibid., at p. 1346. 316 No. 15488-R, (CA) 53 O.G. 1477, November 19, 1956. 317 Concurring Opinion of J. Puno in Republic v. CA, 299 SCRA 199, 301 (1998). 318 Id. 319 Id. 320 Id. 321 Id., citing R.A. No. 161, Bacolod City; R.A. No. 287, Catbalogan, Samar; R.A. No. 1099, Romblon. 322 Id., 301-302.
314 315
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in 1957 that Congress granted to chartered cities and municipalities a general authority to reclaim foreshore lands bordering their respective territories.323 R.A. No. 7160, otherwise known as the Local Government Code of 1991, likewise empowers local government units to undertake reclamation projects by themselves or through contractors. Whether reclaimed lands transferred to a public or municipal corporation are public in nature or patrimonial depends upon the legislative intent. In Manila Lodge No. 761 v. Court of Appeals,324 for example, where in 1905, the Philippine Commission enacted Act No. 1360 authorizing the City of Manila to reclaim of a portion of the Luneta to form part of the Luneta extension. The Act provided that the reclaimed area shall be the property of the City of Manila. In this case, the Supreme Court held that the legislative intent was to make the reclaimed land part of the property of public dominion of the City of Manila. The Court held that if the reclaimed area is an extension of the Luneta, then it is of the same nature or character as the old Luneta. Since the city or municipality may alienate the land it reclaimed pursuant to R.A. No. 1899325 or it may pay a portion of the reclaimed lands pursuant to Section 302 of the Local Government Code, it appears that the lands reclaimed by the local government pursuant to the aforesaid laws are patrimonial in character unless said local government reserves certain portions of the reclaimed area for public use such as for plazas, schools or hospitals, in which case, the reclaimed land is characterized as land of the public domain. In Chavez v. Public Estates Authority,326 the Supreme Court likewise held that reclaimed alienable lands of the public domain if sold or transferred to a public or municipal corporation for a monetary consideration become patrimonial property in the hands of the public or municipal corporation and once converted to patrimonial property, the land may be sold by the public or municipal corporation to private parties, whether Filipino citizens or qualied private corporations.
Id., 302. Supra. 325 See Ponce cases, supra. 326 Chavez v. PEA, 403 SCRA 1, 32.
323 324
99
28. Other Classication The classication of properties other than those for public use in the provinces, cities and municipalities as patrimonial under Article 424 of the New Civil Code is without prejudice to the provisions of special laws. For purposes of this article, the principles obtaining under the Law of Municipal Corporation can be considered as special laws.327 Hence, in the case of Province of Zamboanga del Norte v. City of Zamboanga,328 the Supreme Court held that the classication of municipal property devoted for distinctly governmental purposes as public should prevail over the Civil Code classication. The same principle was applied in the case of Vda. de Tantoco v. Municipal Council of Iloilo.329 In this case, the Court held that municipal properties necessary for governmental purposes are public in nature. Thus, the auto trucks used by the municipality for street sprinkling, the police patrol automobile, police stations and concrete structures with the corresponding lots used as markets were declared exempt from execution and attachment since they were not patrimonial properties. Taking into consideration the cases of Province of Zamboanga del Norte and Vda. de Tantoco, it appears that the properties of the political subdivisions (provinces, cities and municipalities) are classied in accordance with the use to which they are intended or devoted. In effect, what was said by the Court of Appeals in Capitulo v. Aquino330 had been reiterated and adopted by the Supreme Court. In Capitulo, the Court of Appeals held that the nature of properties owned by cities in this country is determined by the character of the use or service for which they are intended or devoted and that properties which are intended for public use or for some public service are properties for public use. All other properties are patrimonial.
Province of Zamboanga del Norte v. City of Zamboanga 22 SCRA 1334 (1968) In this case, Congress passed Commonwealth Act 39 converting the Municipality of Zamboanga into Zamboanga City. Prior to the conversion, the Municipality of Zamboanga used to be the provincial capital of the then
Province of Zamboanga del Norte v. City of Zamboanga, 22 SCRA 1334 (1968). Supra. 329 Supra. 330 Supra.
327 328
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Zamboanga Province. Thereafter Congress approved R.A. No. 3039 amending C.A. No. 39 by providing that all buildings, properties and assets belonging to the former province of Zamboanga and located within the City of Zamboanga are hereby transferred, free of charge, in favor of the said City of Zamboanga. The Province of Zamboanga del Norte questioned the constitutionality of R.A. No. 3039 on the ground that it deprived the province of its property without due process and just compensation. In resolving the constitutionality of the law, the Supreme Court laid down this test: If the property is owned by the municipality (meaning municipal corporation) in its public and governmental capacity, the property is public and Congress has absolute control over it. But if the property is owned in its private or proprietary capacity, then it is patrimonial and Congress has no absolute control over it. In applying the test, the Court has to resolve another question: Which norm to use in classifying the properties in question the Civil Code or that obtaining under the law of Municipal Corporations. If the Civil Code is to be applied, all the properties in question, except the two lots used as High School playgrounds, would be considered as patrimonial properties of the former Zamboanga province. On the other hand, applying the norm obtaining under the principles constituting the law of Municipal Corporations, all of the 50 properties in question which are devoted to public service are deemed public. In upholding the latter view, the Court explained We are more inclined to uphold the latter view. The controversy here is more along the domains of the Law of Municipal Corporations the State v. Province than along that of Civil Law. Moreover, this Court is not inclined to hold that municipal property held and devoted to public service is in the same category as ordinary private property. The consequences are dire. As ordinary private properties, they can be levied upon and attached. They can even be acquired thru adverse possession all these to the detriment of the local community. Lastly, the classication of properties other than those for public use in the municipalities as patrimonial under Art. 424 of the Civil Code is x x x without prejudice to the provisions of special laws. For purposes of this article, the principles obtaining under the Law of Municipal Corporations can be considered as special laws. Hence, the classication of municipal property devoted for distinctly governmental purposes as public should prevail over the Civil Code classication in this particular case.
Art. 425. Property of private ownership, besides the patrimonial property of the State, provinces, cities and municipalities, consists of all property belonging to private persons, either individually or collectively. (345a)
101
29. Private Property Private properties may belong to the State, to provinces, cities and municipalities or may belong to the private individuals either individually or collectively. Such properties when they belong to the State, provinces, cities and municipalities are called patrimonial property; and when they belong to private entities or individuals, they are called properties of private ownership. All lands are presumed, however, to be public lands until the contrary is established.331 Under Sec. 7, Art. XII of the 1987 Constitution, no private lands shall be transferred or conveyed except to individuals, corporations or associations qualied to acquire or hold lands of the public domain, save in cases of hereditary succession. However, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands subject to limitations as may be provided by law.332 The law that provides for such limitations is B.P. Blg. 185. In J.G. Summit Holdings, Inc. v. Court of Appeals,333 the Court claried that the prohibition in the Constitution applies only to ownership of lands and it does not extend to other real property as dened in Article 415 of the Civil Code. Otherwise, the Court added, we would have a strange situation where the ownership of immovable property such as trees, plants and growing fruit attached to the land would be limited to Filipinos and Filipino corporations only.
PROVISIONS COMMON TO THE THREE PRECEDING CHAPTERS Art. 426. Whenever by provision of the law, or an individual declaration, the expression immovable things or property, or movable things or property, is used, it shall be deemed to include, respectively, the things enumerated in Chapter 1 and Chapter 2. Whenever the word muebles, or furniture, is used alone, it shall not be deemed to include money, credits, commercial securities, stocks and bonds, jewelry, scientic or artistic collections, books, medals, arms,
331 Municipality of Antipolo v. Zapanta, supra., citing Oh Cho v. Director of Lands, 75 Phil. (1946); Director of Lands v. CA, 38 SCRA 635 (1971). 332 Sec. 8, Art. XII, 1987 Constitution. 333 G.R. No. 124293, Jan. 31, 2005.
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clothing, horses or carriages and their accessories, grains, liquids and merchandise, or other things which do not have as their principal object the furnishing or ornamenting of a building, except where from the context of the law, or the individual declaration, the contrary clearly appears. (346a)
oOo
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Title II. OWNERSHIP

Chapter 1 OWNERSHIP IN GENERAL
Art. 427. Ownership may be exercised over things or rights. (n)
30. Concept of Ownership

[30.1] Property and Ownership, Distinguished
As discussed in supra 1.1, the word property is derived from the Roman word proprius, meaning ones own which, in essence, is the concept of ownership. In fact, the Roman word proprietas1 means ownership in Roman Law, although the more usual word is dominium, which means the mastery or the absolute control over a thing except as may be restrained by law.2 Dominion or ownership, on the other hand, comes from domus or house for in Roman Law the master of the house is called dominus and his domestic power over the household is called dominium.3 Thus, in Roman Law, there appears to be no difference between the concepts of property and ownership. Castan is likewise of the view that between property and ownership, there is really no difference in extent or contents but simply a difference of viewpoint.4 According to him, while ownership implies the power over a thing which belongs to the owner (which concept, therefore, has a predominantly objective meaning); property, on the other hand, accentuates the relation between the thing and the owner
Derived from proprius. The Principles of Roman Law and Their relation to modern law by William L. Burdick, 2004 ed., 325-326. 3 II Caguioa, Civil Code of the Philippines, 1966 ed., 48. 4 2 Castan, 8th ed., 49, 52, 53, cited in II Caguioa, Civil Code of the Philippines, 1966 ed., 48.
1 2
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to whom it belongs (which concept, therefore, has a predominantly objective meaning).5 Our Civil Code, however, clearly differentiates between property and ownership. The concept of property under the Civil Code refers to those things which are susceptible of appropriation while the concept of ownership refers to the mass or bundle of rights that may be exercised over a property. In other words, ownership refers to the bundle of rights that may be exercised over a property while the latter is the object of the exercise of such rights.
[30.2] Ownership, Dened
The Civil Code does not dene ownership. Instead, the Code simply enumerates the rights which are included therein, as follows: (1) (2) (3) (4) (5) (6) the right to enjoy the property (Art. 428, par. 1, NCC); the right to dispose the property (Art. 428, par. 1, NCC); the right to recover the property from any holder or possessor (Art. 428, par. 2, NCC); the right to exclude any person from enjoyment and disposal of the property (Art. 429, NCC); the right to enclose or fence the land or tenement (Art. 430, NCC); the right to demand indemnity for damages suffered due to lawful interference by a third person to avert an imminent danger (Art. 432, NCC); the right to just compensation in case of eminent domain (Art. 435, NCC); the right to construct any works or make any plantations and excavations on the surface or subsurface of the land (Art. 437, NCC); the right to hidden treasure found in the owners property (Art. 438, NCC); and
(7) (8)
(9)
(10) the right to accessions. (Art. 440, NCC)

5
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION OWNERSHIP Ownership in General
105
At least, in our jurisdiction, the more acceptable denition of ownership is that given by Justice J.B.L. Reyes. He denes ownership as an independent right of exclusive enjoyment and control of the thing for the purpose of deriving therefrom all advantages required by the reasonable needs of the owner (holder of the right) and the promotion of the general welfare but subject to the restrictions imposed by law and the right of others.6
[30.3] Ownership Is A Real Right [30.3.1] Jus In Re and Jus In Personam
Personal right or jus in personam is one which imposes an obligation on a denite person.7 Stated otherwise, personal right or more properly called the right of obligation is the power belonging to one person to demand from another, as a denite passive subject, the fulllment of a prestation to give, to do or not to do.8 A real right or jus in re, on the other hand, has been dened as the power belonging to a person over a specic thing without a denite passive subject against whom such right may be personally enforced.9 A right in rem, therefore, is one which imposes an obligation on persons generally, i.e., either on all the world or on all the world except certain determinate persons. Thus, if I am entitled to exclude all persons from a given piece of land, I have a right in rem in respect of that land; and, if there are one or more persons, A, B and C, whom I am not entitled to exclude from it, my right is still a right in rem.10
[30.3.2] Ownership as Real Right
As can be seen from the discussion above, a real right creates a direct relation between the specic thing and its holder in such a way that it permits the holder to exclude others from the enjoyment of the thing. Correspondingly, it creates an obligation on the part of third persons not to interfere in such enjoyment. These elements are clearly present in ownership. Hence, the owner of a thing has the right
Outline of Civil Law by Reyes and Puno, Vol. II, 20. Blacks Law Dictionary, 5th ed., 1189. 8 3 Sanchez Roman 8. 9 3 Sanchez Roman 6. 10 Blacks Law Dictionary, 5th ed., 1189.
6 7
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to exclude any person from its enjoyment and disposal11 save for the exception mentioned in Article 432 of the Civil Code which will be discussed in subsequent sections of this Book.
[30.4] Other Real Rights Aside From Ownership
Apart from ownership, the Civil Code recognizes the existence of other real rights that may be exercised in relation to property, i.e., possession, usufruct, easement, pledge and mortgage, etc. Of all these rights, however, ownership is considered as the most complete because it provides the owner the most ample power of dominion over the property.12 In contrast, however, the other real rights are necessarily limited since they merely serve as restrictions on ones exercise of ownership. For this purpose, we should classify real rights into two general categories: (1) real rights over ones own property (jus in re propria); and (2) real rights over the property of another (jus in re aliena). These latter rights are lesser rights than the right of ownership yet they make inroads upon and curtail the rights of the owner.13 Examples of jus in re aliena are usufruct, easement, possession and mortgage. In these examples, the owner of the property has for the time being parted with some of his rights, thereby restricting and abridging the right of ownership. Compared to ownership, the other real rights cannot exist independently of ownership. In other words, the other real rights are dependent because they presuppose the existence of ownership. On the other hand, and based from the denition cited in supra 30. 2, ownership is an independent real right since it can exist without the necessity of other rights.
[30.5] Objects of Ownership
As discussed in supra 30.1, the relationship that exists between ownership and property is that the latter is the object of the former. In accordance with Article 427 of the Code, the subject matter of ownership may either be things or rights. But as discussed in supra 1.2, the concept of things under the Civil Code, specically Article
Art. 429, NCC. See Castan, 8th Ed., 90-91. 13 The Principles of Roman Law and Their Relation to Modern Law by William L. Burdick, 2004 ed., 354.
11 12
107
414, embraces both material objects and rights. In other words, the term things in Article 414 is used, not in its ordinary meaning, but in the juridical sense. In Article 427, however, it is quite obvious that the word things has reference only to material objects as contra distinguished from rights. Then again, Article 428 the Code mentions things only but this time the concept embraces both material objects and rights. Hence, it would have been better if Article 427 simply stated that ownership is exercised over property. After all, the concept of property under the Civil Code embraces both material objects and rights.
Art. 428. The owner has the right to enjoy and dispose of a thing, without other limitations than those established by law. The owner has also a right of action against the holder and possessor of the thing in order to recover it. (348a)
31. Attributes of Ownership In Roman Law, the attributes of ownership are the following: (1) jus utendi or the right to use property without destroying its substance; (2) jus fruendi or the right to the fruits; (3) jus disponendi or the right to dispose or alienate; (4) jus abutendi or the right to abuse or to consume the thing by its use; (5) jus possidendi or the right to possess; and (6) jus vindicandi or the right to recover. It is noticeable, however, that the present article mentions only three rights the rights to enjoy, dispose and recover. While this may be the case, it is not the intention of the Code to do away with the other rights which are traditionally included in ownership. This is because the right to enjoy already includes in it the right to use (jus utendi), the right to the fruits (jus fruendi), the right to possess (jus possidendi) and the right to abuse or consume (jus abutendi). Another attribute of ownership which is not included in the present article but treated in a separate chapter is the right of accession. The Code deems it t to devote an entirely separate chapter solely for this right because of the importance of the subject. 32. Right to Enjoy The essence of ownership is the right of the owner to freely enjoy either the property itself or the benets derived therefrom, which
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enjoyment may consist simply of its possession (jus possidendi), or its consumption (jus abutendi), or its use (jus utendi), enjoyments of its products or fruits (jus fruendi) or the enjoyment of anything attached or incorporated to it, either naturally or articially (the right of accession).
[32.1] Right To Use and Abuse
To use a thing consists in employing it for the purpose for which it is t, without destroying it, and which employment can therefore be repeated. Hence, the phrase jus utendi is used in contradistinction to the jus abutendi. The latter right involves consumption of the thing by its use. As explained by the late Senator Tolentino, citing Sanchez Roman and Valverde, the jus abutendi should not be understood as the right of the owner to exercise absolute and unlimited power over the thing to the point of destroying it by any means, however inconvenient and prejudicial to the public interest or to the right of others. According to him, jus abutendi properly meant the use that extinguishes, that consumes, by acts of the owner, things which are consumable.14 As a consequence, for example, of the owners right to use his property, it has been held that the purchaser of a house which is leased is entitled to terminate the lease, there being no stipulation to the contrary and the lease not being recorded. This is so because the right to the use of the said house is one of the rights transferred to him by virtue of his ownership.15 Also, the owner may not be prevented from enjoying his property on the mere pretext that the present occupant badly needs the same in view of an acute housing shortage brought about by the destruction of the City of Manila during the Second World War.16 33. Right to Dispose Jus disponendi or the power of the owner to dispose of his property includes the power to alienate, to encumber, to limit, to transform, to destroy and to merge.17
See Footnote No. 2, II Tolentino, Civil Code, 1992 ed., p. 46. Saul v. Hawkins, 1 Phil. 275. 16 Roque v. Cavestani, G.R. No. L-218, Aug. 18, 1946; Villanueva v. Carlos, G.R. No. L329, Sep. 16, 1946. 17 2 Castan, 8th ed., 106.
14 15
109
The right to alienate is the right of the owner to transmit either by onerous or gratuitous title his right to another by any act inter vivos or mortis causa. Such right is exclusively vested upon the owner based upon the principle that no one can give what he does not have. Examples of alienation are sale and donation. The right to limit or encumber is the power of the owner to deprive himself of several of the rights included in ownership and transfer them to another. Thus, the owner may deprive himself of the use and possession of his property by entering into contracts of lease and commodatum, for example. He may also deprive himself of the right to enjoy his property, including the right to receive the fruits, by constituting a usufruct in favor of a third person. The right to transform, on the other hand, is the power to change the nature of the thing, or its form or destination and the power to destroy is the power to render useless or to abandon or annihilate the thing. 34. Right to Recover
[34.1] Right to Possession
Possession is essential to both free enjoyment and disposal. Possession, as an incident of ownership or a right included in ownership, must be distinguished from possession, as a right independent and apart from ownership. The former is jus possidendi and the latter is jus possessionis. Some authors refer to jus possidendi as the right to possession and to jus possessionis as the right of possession. The latter concept of possession (jus possessionis) is discussed separately in Title V of Book II. The owner is entitled to the exclusive possession of his property. For this purpose, he may exclude any person from the enjoyment and disposal thereof by force if necessary18 and he may also enclose or fence his property by any means.19 In the event, however, that the possessor is unlawfully deprived of possession he is not justied to take the law into his own hands. Instead, he is required to resort to the proper legal processes for the purpose of obtaining recovery of possession. This principle is embodied in Article 433 of the New Civil Code which
18 19
See Art. 429, NCC. See Art. 430, NCC.
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directs the true owner to resort to judicial process for the recovery of the property and Article 536 of the same Code which states: Art. 536. In no case may possession be acquired through force or intimidation as long as there is a possessor who objects thereto. He who believes that he has an action or a right to deprive another of the holding of a thing, must invoke the aid of the competent court, if the holder should refuse to deliver the thing. (441a) (Italics supplied) Thus, in one case,20 the Supreme Court held that the owners of a property have no authority to use force and violence to eject alleged usurpers who were in prior physical possession of it. The Court held further that the owners must le the appropriate action in court and should not take the law into their own hands.
[34.2] Actions for Recovery of Possession
Under existing laws and jurisprudence, there are three kinds of actions available to recover possession of real property: (a) accion interdictal; (b) accion publiciana; and (c) accion reivindicatoria.21 For the recovery of possession of a personal property, on the other hand, the available remedy is called replevin.22
[34.2.1] Accion Interdictal
Accion interdictal comprises two distinct causes of action, namely, forcible entry (detentacion) and unlawful detainer (desahuico).23 Forcible entry is a summary action to recover material or physical possession of real property when the person who originally held it was deprived of possession by force, intimidation, threat, strategy, or stealth.24 An action for unlawful detainer, on the other hand, may be led when possession by a lessor, vendor, vendee, or other person against whom
Heirs of Pedro Laurora, et al. v. Sterling Technopark III, G.R. No. 148615, April 9,
20
2003.
21 Valdez v. CA, G.R. No. 132424, May 2, 2006, citing Javier v. Veridiano II, 237 SCRA 565, 572-573 (1994). 22 Rule 60, 1997 Rules of Civil Procedure. 23 Valdez v. CA, G.R. No. 132424, May 2, 2006, citing Javier v. Veridiano II, 237 SCRA 565, 572-573 (1994). 24 See Sec. 1, Rule 70, 1997 Rules of Civil Procedure; Dela Cruz v. Panis, 245 SCRA 242 (1995).
111
the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied.25 Both actions are within the exclusive and original jurisdiction of the Metropolitan or Municipal Trial Courts26 and which are required to be brought within one year from the date of actual entry, in case of forcible entry, and from the date of the last demand, in case of unlawful detainer.27 The one-year prescriptive period for the ling of an ejectment case is pursuant to the provisions of Article 555(4) of the New Civil Code which states that possession de facto is lost if the possession by another person has lasted for more than one year. Forcible entry and unlawful detainer are quieting processes and the one-year time bar to the suit is in pursuance of the summary nature of the action.28 The use of summary procedure in ejectment cases is intended to provide an expeditious means of protecting actual possession or right to possession of the property.29 They are not processes to determine the actual title to an estate.30 In ejectment cases, the sole question for resolution is the physical or material possession (possession de facto) of the property in question and neither a claim of juridical possession (possession de jure) nor an averment of ownership by the defendant can outrightly deprive the court from taking due cognizance of the case. So that, even if the question of ownership is raised in the pleadings the court may pass upon such issue but only to determine the question of possession especially if the former is inseparably linked with the latter. Thus, all that the trial court may do is to make an initial determination of who is the owner of the property so that it can resolve who is entitled to its possession absent other evidence to resolve the latter. But such determination of ownership is not clothed with nality. Neither will it affect ownership of the property nor constitute a binding and conclusive adjudication on the merits with respect to the issue of ownership. Such judgment shall not bar an action between the same parties respecting title to the land
Id. Sec. 33(2), B.P. Blg. 129, as amended by R.A. No. 7691. 27 Javier v. Veridiano II, 237 SCRA 565 (1994). 28 De Leon v. CA, 245 SCRA 166, 173 (1995). 29 Id. 30 Id.
25 26
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or building nor shall it be held conclusive of the facts therein found in the case between the same parties upon a different cause of action not involving possession.31 Forcible entry and unlawful detainer, which deal with physical or de facto possession, may be distinguished as follows: (1) Their main difference lies in the time when possession became unlawful: in forcible entry, the possession by the defendant is unlawful ab initio because he acquires possession by force, intimidation, threat, strategy, or stealth; while in unlawful detainer, possession is originally lawful but becomes illegal by reason of the termination of his right of possession under his contract with the plaintiff.32 (2) In an action for forcible entry, the plaintiff must allege and prove that he was in prior physical possession of the premises until deprived thereof, while in illegal detainer, the plaintiff need not have been in prior physical possession.33 A complaint for unlawful detainer should be distinguished from that of forcible entry. In forcible entry, the plaintiff has prior possession of the property and he is deprived thereof by the defendant through force, intimidation, threat, strategy or stealth. In an unlawful detainer, the defendant unlawfully withholds possession of the property after the expiration or termination of his right thereto under any contract, express or implied; hence, prior physical possession is not required. This is especially so where a vendee seeks to obtain possession of the thing sold.34 (3) The one year period within which to bring an action for forcible entry is generally counted from the date of actual entry on the land, except that when entry was made through stealth, the one year period is counted from the time the plaintiff learned thereof.35 In unlawful detainer, however, the one year prescriptive period is counted from the date of the last demand.36 Hence, in the latter type of action, the plaintiff must rst make such demand, which is jurisdictional in nature.37
Pengson v. Ocampo, 360 SCRA 420, 425-426. Heirs of Demetrio Melchor v. Melchor, 415 SCRA 726. 33 Id. 34 Barba v. CA, 376 SCRA 210, 218-219. 35 Ong v. Parrel, 355 SCRA 691, 696. 36 Valdez v. CA, G.R. No. 132424, May 2, 2006. 37 See Sec. 2, Rule 70, 1997 Rules of Civil Procedure; Medel v. Militante, 41 Phil. 44.
31 32
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[34.2.2]
Accion Publiciana
An accion publiciana is an action for recovery of the right to possess and is a plenary action38 in an ordinary civil proceeding to determine the better right of possession of realty independent of the title39 or ownership of the property. Accion publiciana or plenaria de posesion is also used to refer to an ejectment suit led after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty.40 In other words, if at the time of the ling of the complaint more than one year had elapsed since defendant had turned plaintiff out of possession or defendants possession had become illegal, the action will be, not one of the forcible entry or illegal detainer, but an accion publiciana.41 Unlike ejectment cases which are always within the exclusive jurisdiction of the Metropolitan or Municipal Trial Courts,42 jurisdiction over an accion publiciana shall depend on the location of the realty and its assessed value. If the property is located in Metro Manila and its assessed value does not exceed P50,000.00, jurisdiction is with the Metropolitan Trial Courts. But if the assessed value of the realty exceeds P50,000.00, it is the Regional Trial Court which exercises jurisdiction over an accion publiciana.43 If the realty is, on the other hand, situated outside of Metro Manila, it is the Municipal Trial Courts which has jurisdiction if the assessed value thereof does not exceed P20,000.00, otherwise, it is the Regional Trial Court which has jurisdiction.44
[i] Distinguished From Accion Interdictal
What really distinguishes the summary action of ejectment (accion inderdictal) from the plenary action for recovery of possession (accion publiciana) is that the issue in the former is limited to the question of possession de facto while the issue in the latter is the determination of the better right of possession or possession de jure.
As distinguished from the summary nature of ejectment cases. Cruz v. Torres, 316 SCRA 193, citing Aguilon v. Bohol, 79 SCRA 482 (1977) and Desbarats v. De Laureano, 18 SCRA 116 (1966). 40 Id., citing Bernabe v. Dayrit, 125 SCRA 423, 425 (1983). 41 Valdez v. CA, G.R. No. 132424, May 2, 2006. 42 Sec. 33(2), B.P. Blg. 129, as amended by R.A. No. 7691. 43 Sec. 33(3), B.P. Blg. 129, as amended by R.A. No. 7691. 44 Id.
38 39
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[ii] Distinguished From Accion Reivindicatoria
In accion publiciana, the basis of the recovery of possession is the plaintiffs real right of possession or jus possessionis which is the right to the possession of the real estate independent of ownership. In accion reivindicatoria, however, the basis of the action for recovery of possession is ownership itself. Hence, an accion reivindicatoria involves recovery of possession as an incident or attribute of ownership, or what is known as jus possidendi.
[34.2.3] Accion Reivindicatoria
An accion reinvindicatoria is a suit which has for its object the recovery of possession over the real property as owner.45 Also known as accion de reivindicacion, it is thus an action whereby plaintiff alleges ownership over a parcel of land and seeks recovery of its full possession.46 It is different from accion publiciana where plaintiff merely alleges proof of a better right to possess without claim of title.47 In some decisions of the Court, accion reinvindicatoria is often referred as an action to recover ownership.48 Such description is, however, misleading and inaccurate. One of the characteristics of ownership is that it is an exclusive right, meaning, there can be only one ownership although there may be two or more owners.49 As such, it is not correct to say that an accion reivindicatoria involves recovery of ownership which suggests that ownership had already been lost by the plaintiff to another when in fact, it is ownership which is the basis of an accion reivindicatoria. What happens in an accion reivindicatoria is that the plaintiff has been deprived of the exercise of all the rights included in ownership and what he seeks to recover by ling such an action is, in reality, only the exercise of the rights included in ownership. Since possession is essential to the exercise of the other rights included in ownership and it is the most visible expression of the exercise of such rights, an accion reivindicatoria has been associated with the recovery of possession over the real property as owner.
Hilario v. Salvador, 457 SCRA 815, 825 (2005). Javier v. Veridiano II, supra. 47 Id. 48 See De Leon v. CA, 245 SCRA 166, 173 (1995); Valdez v. CA, supra; Custodio v. Corrado, 435 SCRA 500 (2004). 49 See II Caguioa, Civil Code of the Philippines, 1966 ed., 50.
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As in the case of accion publiciana, jurisdiction over an accion reivindicatoria shall depend on the location of the realty and its assessed value. If the property is located in Metro Manila and its assessed value does not exceed P50,000.00, jurisdiction is with the Metropolitan Trial Courts. But if the assessed value of the realty exceeds P50,000.00, it is the Regional Trial Court which exercises jurisdiction over an accion reivindicatoria.50 If the realty is, on the other hand, situated outside of Metro Manila, it is the Municipal Trial Courts which has jurisdiction if the assessed value thereof does not exceed P20,000.00, otherwise, it is the Regional Trial Court which has jurisdiction.51 The requisites of an accion reivindicatoria are discussed in infra 38 in relation to Articles 433 and 434.
Art. 429. The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property. (n)
35. Doctrine of Self-help

[35.1] Statement of the Doctrine
As a necessary consequence of ownership, the owner has the right of exclusive enjoyment and control over his property, as well as to its exclusive possession. He may, therefore, exclude any person from its enjoyment and disposal.52 This right of the owner is so important that the law deems it appropriate to allow him to use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.53 The employment of such reasonable force in defense of his property is what is known in juridical science as the doctrine of self-help.54
[35.2] Who May Invoke the Doctrine
While Chapter 1, Title II, Book II of the New Civil Code, inclusive of Article 429 thereof, speaks of ownership, the doctrine of self-help
Sec. 33(3), B.P. Blg. 129, as amended by R.A. No. 7691. Id. 52 Art. 429, NCC. 53 Id. 54 People v. Depante (CA), 58 O.G. 926.
50 51
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is available not only to owners of the property but also to any of its lawful possessor.55
[35.3] When May the Doctrine Be Invoked
The use of reasonable force in defense of property under the doctrine of self-help is authorized only if the purpose is to repel or prevent an actual or threatened unlawful physical invasion or usurpation of the said property.56 In Article 429 of the Code, the word repel is, of course, referring to an actual unlawful physical invasion or usurpation of the property; while the word prevent is referring to a threatened unlawful physical invasion or usurpation of the property. It is clear, therefore, that the doctrine of self-help can only be exercised at the time of actual or threatened dispossession, and not when possession has already been lost.57 In the latter case, the owner must resort to judicial process for the recovery of property as required in Article 536 of the Civil Code.58 In other words, the doctrine of selfhelp cannot be invoked for the purpose of recovering property.
German Management & Services, Inc. v. CA 177 SCRA 495 (1989) In this case, the registered owners of a parcel of land situated in Antipolo, Rizal, who were based in the United States of America, authorized the petitioner German Management & Services, Inc. to develop their property into a residential subdivision. Finding that part of the property was occupied by private respondents and twenty other persons, petitioner advised the occupants to vacate the premises but the latter refused. Nevertheless, petitioner proceeded with the development of the subject property which included the portions occupied and cultivated by private respondents. In so doing, the petitioner forcibly removed and destroyed the barbed wire fence enclosing private respondents farmholdings. Petitioner likewise bulldozed the rice, corn, fruit bearing trees and other crops of private respondents. Private respondents, thereafter, sued the petitioner for ejectment (forcible entry). The Municipal Trial Court dismissed the action, which dismissal was sustained by the Regional Trial Court on appeal. Both courts have rationalized the petitioners drastic action of bulldozing and destroying the crops of private respondents on the basis of the doctrine of self-help enunciated in Article 429 of the New Civil
See Art. 429, NCC. Id. 57 German Management & Services, Inc. v. CA, 177 SCRA 495 (1989). 58 Id.
55 56
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Code. When the case reached the Supreme Court, the High Court held that what the petitioner did could not be justied under the doctrine of self-help. The Court explained Both the Municipal Trial Court and the Regional Trial Court have rationalized petitioners drastic action of bulldozing and destroying the crops of private respondents on the basis of the doctrine of self-help enunciated in Article 429 of the New Civil Code. Such justication is unavailing because the doctrine of self-help can only be exercised at the time of actual or threatened dispossession which is absent in the case at bar. When possession has already been lost, the owner must resort to judicial process for the recovery of property. This is clear from Article 536 of the Civil Code which states, (I)n no case may possession be acquired through force or intimidation as long as there is a possessor who objects thereto. He who believes that he has an action or right to deprive another of the holding of a thing, must invoke the aid of the competent court, if the holder should refuse to deliver the thing. [35.4] Defense of Property as Justifying Circumstance
In the language of Viada, aside from the right to life on which rests the legitimate defense of our own person we have the right to property acquired by us, and the right to honor which is not the least prized of our patrimony.59 Hence, defense of property is deemed included in selfdefense under the provisions of Article 11, paragraph 1, of the Revised Penal Code. In two cases decided by the Court of Appeals,60 it was held that defense of property whether complete or incomplete, to be available, must be coupled with an attack on the person of the owner or lawful possessor. Thus, in People v. Goya, supra, the Court of Appeals did not appreciate the mitigating circumstance of incomplete defense of property because when the appellant (a security guard in the bodega of Cagayan Valley Agricultural Corporation) red a shot at the victim, who was caught in the act of stealing a sack of palay belonging to the appellants employer, the victim did not lay hands on the appellant or made any attempt to attack the latter.
1 Viada, Codigo Penal, 5th ed., pp. 172-173, cited in People v. Jaurigue, 76 Phil. 174. People v. Apolinar, (CA) 38 O.G. 2870 and People v. Goya, CA-GR. No. 16373-R, Sep. 29, 1965.
59 60
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In the case of People v. Narvaez,61 however, the Supreme Court, citing the provisions of Article 429 of the New Civil Code, credited the accused with the special mitigating circumstance of incomplete defense of property even if such defense is not coupled with an attack upon the person of the accused. It thus appears that Article 429 of the New Civil Code plugs the loophole in the Revised Penal Code where it is doubtful whether the defense of property is possible if the unlawful physical invasion of ones property is not accompanied by unlawful aggression against the person of the owner.62 Under this article, defense of property without any aggression against the person of the owner is authorized.63 Thus, in People v. Narvaez, supra, even if the aggression was directed not on the person of the accused-appellant but only on his property, the Court nonetheless considered such unlawful aggression for the purpose of crediting him with the special mitigating circumstance of incomplete self-defense. In order for defense of property to be appreciated as a justifying circumstance, it is necessary that the means employed to prevent or repel the aggression must also be reasonable.64 Note that under the doctrine of self-help in Article 429 of the Civil Code, what is authorized is the use of force as may be reasonably necessary for the purpose of repelling or preventing any actual or threatened unlawful physical invasion or usurpation of ones property. In determining the reasonableness of the means employed, the absence of an attack against the person of the owner or lawful possessor of the property must be considered since defense of property is not of such importance as the right to life and limb. In People v. Narvaez, for example, the Court held that when the appellant red his shotgun from his window, killing his two victims, his resistance was disproportionate to the attack. Hence, he was credited only with special mitigating circumstance of incomplete defense of property.
121 SCRA 389 (1983). II Caguioa, Civil Code of the Philippines, 1966 ed., 58. 63 Id. 64 Art. 11(1), RPC.
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People v. Goya, CA-GR. No. 16373 Sept. 29, 1965 In this case, the accused was a guard in the bodega of the Cagayan Valley Agricultural Corporation. On the night in question, he surprised the private complainant in the act of going out through the door of the warehouse with a sack of palay. To prevent the latter from taking away the sack of palay, the accused-appellant red a shot at complainant. The shot hit complainant on the back for which he was hospitalized for 18 days. The guard was prosecuted and adjudged by the trial court guilty of frustrated homicide. The defense, however, claimed that the mitigating circumstance of incomplete defense of property was present in the commission of the crime. The Court of Appeals, however, found that the accused-appellant was guilty only of less serious physical injuries. The appellate court refused, however, to credit the accused-appellant with the mitigating circumstance of incomplete defense of property since, according to the Court of Appeals, defense of property whether complete or incomplete, to be available, must be coupled with an attack on the person defending the property. People v. Narvaez 121 SCRA 389 (1983) Appellants house was situated on a land awarded to Fleischer and Company by virtue of a sales patent. The validity of the award was, however, questioned before the court by a group of settlers, including the Appellant (Narvaez). On August 22, 1968 or while the case was still pending, a group of men headed by the son (Davis Fleischer) of the landowner (George Fleischer) were fencing the land of the latter. At that time, Appellant was taking his rest but when he heard that the walls of his house were being chiseled, he arose and there he saw the fencing going on. If the fencing would go on, Appellant would be prevented from getting into his house and the bodega of his rice mill. So the Appellant addressed the group, Pare, if possible you stop destroying my house and if possible we will talk it over what is good. Davis Fleischer, however, answered: No, gademit, proceed, go ahead. Appellant apparently lost his equilibrium and he got his gun and shot dead Fleischer and the latters companion, Rubia. On appeal to the Supreme Court, the Court appreciated in favor of the Appellant the special mitigating circumstance of incomplete defense of property, citing the provisions of Article 429 of the Civil Code in relation to paragraph 6, Article 13 of the Revised Penal Code. The Court considered the unlawful physical invasion of Appellants property as unlawful aggression but held that his resistance was disproportionate to the attack.
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Art. 430. Every owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon. (388)
36. Right to Enclose or Fence Corollary to the right to exclude others from the enjoyment of his property, the owner of a parcel of land or tenement has the right to enclose or fence the same by whatever means.65 In so doing, the owner is effectively giving notice to everybody that they are not welcome in his property without his consent and he may, therefore, validly consider any unauthorized intrusion into his property as an act of unlawful aggression which will authorize him to resort to self-help. However, it is required that the right to enclose or fence must be legitimately exercised and must not be attended with bad faith. Thus, if the lot owner fenced his property for the purpose of evicting its occupant whose lease contract had already expired, the lot owner is liable to said occupant for damages.66 In such a case, what the lot owner should do is to resort to the proper legal processes for the purpose of obtaining recovery of possession pursuant to the provisions of Article 536 of the Civil Code.67 The right to enclose or fence in Article 430 is also subject to the limitation that it should not work detriment to the servitudes constituted therein. The concept of servitude or easement is discussed in Title VII of this Book. Easement or servitude is dened as a real right constituted in another persons property, corporeal and immovable, by virtue of which the owner of the same has to abstain from doing or to allow somebody else to do something in his property for the benet of another thing or person.68 An example of this is easement of drainage of waters embodied in Article 637 of the New Civil Code, which reads: Art. 637. Lower estates are obliged to receive the waters which naturally and without the intervention of man descend from the higher estates, as well as the stones or earth which they carry with them.
Art. 430, NCC. See Villafuerte v. CA, G.R. No. 134239, May 26, 2005. 67 Id. 68 2 Sanchez Roman 572.
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The owner of the lower estate cannot construct works which will impede this easement; neither can the owner of the higher estate make works which will increase the burden. (552) Pursuant to such kind of easement or servitude, the owner of the lower tenement cannot block or impede the servitude and the owner of the higher tenement cannot construct works to increase the burden of the servitude. Clearly, the existence of this kind of servitude works as a limitation upon the right of the owner of the lower tenement to enclose his property with walls or other means if the same will prevent the passage of the water which naturally falls from the higher tenement.
Villafuerte v. Court of Appeals G.R. No. 134239, May 26, 2005 In this case, the petitioners (Spouses Villafuerte) operated a gasoline station on the premises of three adjoining lots, two of which were owned by private respondents De Mesa and Daleon. Private respondents De Mesa and Daleon acquired their respective lots subject to the lease by Petrophil Corporation which had built thereon the gasoline station being managed by the Villafuerte couple. When the lease of Petrophil Corporation expired on December 31, 1988, the petitioners Villafuertes obtained a new lease on the lot owned by private respondent De Mesa for a period expiring on December 31, 1989. Daleon, on the other hand, refused to enter into a lease contract with the Villafuertes and demanded that they vacate the lot owned by him. Upon the expiration of the lease contract with De Mesa, the latter likewise refused to renew the same. Instead, De Mesa and Daleon, with the aid of several persons and without the knowledge of the Villafuertes, caused the closure of the latters gasoline station by constructing fences around it. Since then, the Villafuertes were unable to operate the gasoline station. Hence, they sued for damages. On appeal to the Supreme Court, the High Court sustained the award of exemplary damages in favor of the Villafuertes. The Court held that Article 536 of the Civil Code explicitly provides for the proper recourse of one who claims to be entitled to the possession of a thing. When private respondents personally took it upon themselves to evict petitioners from their properties, which act was in clear contravention of the law, they became liable for all the necessary and natural consequences of their illegal act. The Court further observed that private respondents arbitrary conduct of fencing their properties under the claim that they own the same brazenly violates the law and circumvents the proper procedure which should be obtained before the court.
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Art. 431. The owner of a thing cannot make use thereof in such manner as to injure the rights of a third person. (n) Art. 432. The owner of a thing has no right to prohibit the interference of another with the same, if the interference is necessary to avert an imminent danger and the threatened damage, compared to the damage arising to the owner from the interference, is much greater. The owner may demand from the person beneted indemnity for the damage to him. (n)
37. Limitations on Ownership Ownership is not an absolute right. Like all other social and conventional rights, rights arising from ownership are subject to such reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restraints and regulations, established by law, as the legislature, under the governing and controlling power vested in them by the constitution, may think necessary and expedient. As such, the exercise of rights arising from ownership is always subject to the restrictions imposed by law, the exercise of the inherent powers of the State and the rights of others. Aside from the foregoing restrictions, the owner himself may impose limitations upon his own right.
[37.1] General Limitations Pursuant to the Exercise of the Inherent Powers of the State
There are three inherent powers of government by which the State interferes with the property rights, namely: (1) police power, (2) eminent domain, and (3) taxation.69 These powers are said to exist independently of the Constitution as necessary attributes of sovereignty.70 In other words, these powers need not be clothed with any constitutional gear to exist; instead, the provisions in our Constitution on the subject are meant more to regulate, rather than to grant, the exercise of these powers.71
[37.1.1] Police Power
The police power is a governmental function, an inherent attribute of sovereignty, which was born with civilized government. It is founded
City Government of Quezon City v. Ericta, G.R. No. L-34915, June 24, 1983. Id. 71 Manosca v. CA, G.R. No. 106440, Jan. 29, 1996.
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largely on the maxims, Sic utere tuo et alienum non laedas72 and Salus populi est suprema lex.73 Its fundamental purpose is securing the general welfare, comfort and convenience of the people.74 Freund dened police power as the power of promoting the public welfare by restraining and regulating the use of liberty and property.75 Police power is usually exercised in the form of mere regulation or restriction in the use of liberty or property for the promotion of the general welfare.76 It does not involve the taking or conscation of property with the exception of a few cases where there is a necessity to conscate private property in order to destroy it for the purpose of protecting the peace and order and of promoting the general welfare as for instance, the conscation of an illegally possessed article, such as opium and rearms.77 Thus, in police power, the owner does not recover from the government for injury sustained in consequence thereof.78 The foregoing principles are conrmed in Article 436 of the New Civil Code, which states: Art. 436. When any property is condemned or seized by competent authority in the interest of health, safety or security, the owner thereof shall not be entitled to compensation, unless he can show that such condemnation or seizure is unjustied. There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application of both powers at the same time on the same subject. In the case of City of Baguio v. NAWASA,79 for example, where a law required the transfer of all municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the power being exercised was eminent domain because the property involved was wholesome and intended for a public use. Property condemned under the police power
So use your own as not to injure anothers property. The welfare of the people is the supreme law. 74 Binay v. Domingo, G.R. No. 92389, Sep. 11, 1991. 75 Taada and Carreon, Political Law, Vol. 11, p. 50, cited in City Government of Quezon City v. Ericta, supra. 76 City Government of Quezon City v. Ericta, supra. 77 Id. 78 Id. 79 106 Phil. 144.
72 73
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is noxious or intended for a noxious purpose, such as a building on the verge of collapse, which should be demolished for the public safety, or obscene materials, which should be destroyed in the interest of public morals. The conscation of such property is not compensable, unlike the taking of property under the power of expropriation, which requires the payment of just compensation to the owner.
City Government of Quezon City v. Ericta G.R. No. L-34915, June 24, 1983 This case involves Ordinance No. 6118, Series of 1964, passed by the City Council of Quezon City which required, in Section 9 thereof, private cemeteries in Quezon City to set aside at least six percent (6%) of their total area for charity burial grounds of the citys deceased paupers. Pursuant thereto, the Quezon City Engineer notied Himlayang Pilipino, Inc. that such ordinance would be enforced by the City Government. Himlayang Pilipino, Inc. assailed the validity of the ordinance on the ground that the same involved conscation of private property. The City Government, on the other hand, argued that the taking of the Himlayang Pilipinos property is a valid and reasonable exercise of police power and that the land is taken for a public use as it is intended for the burial ground of paupers. The Supreme Court declared Section 9 of the said ordinance invalid. The Court held that the same is not a mere police power regulation but an outright conscation and deprives a person of his private property without due process of law and without compensation. The Court observed that there is no reasonable relation between the setting aside of at least six percent (6%) of the total area of a private cemeteries for charity burial grounds of deceased paupers and the promotion of health, morals, good order, safety, or the general welfare of the people. In effect, the ordinance is actually a taking without compensation of a certain area from a private cemetery to benet paupers who are charges of the municipal corporation. Instead of building or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries. [37.1.2] Power of Eminent Domain
Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon payment of just compensation to the owner.80 Obviously, there is no
80 Association of Small Landowners in the Phil. v. Sec. of Agrarian Reform, G.R. No. 78742, July 14, 1989.
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need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the parties.81 It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner. Private rights must then yield to the irresistible demands of the public interest on the time-honored justication, as in the case of the police power, that the welfare of the people is the supreme law.82 The exercise of the power of eminent domain is constrained by two constitutional provisions: (1) that private property shall not be taken for public use without just compensation under Article III (Bill of Rights), Section 9; and (2) that no person shall be deprived of his/her life, liberty, or property without due process of law under Art. III, Sec. 1. The foregoing requirement is echoed in Article 435 of the New Civil Code, which states: Art. 435. No person shall be deprived of his property except by competent authority and for public use and always upon payment of just compensation. Should this requirement be not rst complied with, the courts shall protect and, in a proper case, restore the owner in his possession. (349a) In view of the foregoing proscription, the power of eminent domain can only be exercised for public use and with just compensation. This proscription is intended to provide a safeguard against possible abuse and so to protect as well the individual against whose property the power is sought to be enforced.83 Taking an individuals private property is a deprivation which can only be justied by a higher good which is public use and can only be counterbalanced by just compensation.84 Without these safeguards, the taking of property would not only be unlawful, immoral, and null and void, but would also constitute a gross
Noble v. City of Manila, 67 Phil. 1, cited in Association of Small Landowners in the Phil. v. Sec. of Agrarian Reform, supra. 82 Association of Small Landowners in the Phil. v. Sec. of Agrarian Reform, supra. 83 Manosca v. CA, supra. 84 Barangay Sindalan, San Fernando, Pampanga v. CA, G.R. No. 150640, March 22, 2007.
81
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and condemnable transgression of an individuals basic right to property as well.85

[37.1.3] Power of Taxation
Taxation focuses on the power of government to raise revenue in order to support its existence and carry out its legitimate objectives.86 As a general rule, the power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in its very nature no limits, so that security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency who are to pay it. Nevertheless, effective limitations thereon may be imposed by the people through their Constitutions.87 Our Constitution, for instance, provides that the rule of taxation shall be uniform and equitable and Congress shall evolve a progressive system of taxation.88 So potent indeed is the power that it was once opined that the power to tax involves the power to destroy.89 Verily, taxation is a destructive power which interferes with the personal and property rights of the people and takes from them a portion of their property for the support of the government.90 Accordingly, tax statutes must be construed strictly against the government and liberally in favor of the taxpayer.91
[37.2] Specic Limitations Imposed By Law
Examples of limitations on ownership which are specically provided by law are the following: (1)
85 86
Legal easements which can be enforced by law and, therefore,
Id. LTO v. City of Butuan, G.R. No. 131512, Jan. 20, 2000. 87 Mactan Cebu International Airport v. Hon. Marcos, G.R. No. 120082, Sep. 11, 1996; citing Cooley on Constitutional Law, 4th ed. (1931), 62. 88 Sec. 28(1), Article VI, 1987 Constitution. 89 Chief Justice Marshall in McCulloch v. Maryland, 4 Wheat, 316, 4 L ed. 579, 607. Later Justice Holmes brushed this aside by declaring in Panhandle Oil Co. v. Mississippi (277 U.S. 218) that the power to tax is not the power to destroy while this Court sits. Justice Frankfurter in Graves v. New York (306 U.S. 466) also remarked that Justice Marshalls statement was a mere ourish or rhetoric and a product of the intellectual fashion of the times to indulge in a free case of absolutes. (See Note 15 in Mactan Cebu International Airport v. Hon. Marcos, supra.). 90 Mactan Cebu International Airport v. Hon. Marcos, supra. 91 Id., citing Agpalo, Ruben E., Statutory Construction [1990 ed.], 216.
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may be established even against the will of the owner of the servient estate.92 (2) During a period of acute public want or emergency, thoughtless extravagance in expenses for pleasure or display may be stopped by order of the courts at the instance of any government or private charitable institution.93 (3) Lands acquired under free patent or homestead cannot be subject to encumbrance or alienation within ve years from the issuance of the patent.94
[37.3] Inherent Limitations Arising From Conicts With Other Similar Rights
It is a well-settled principle, growing out of the nature of wellordered civil society, that every holder of property, however absolute and unqualied may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community.95
[37.3.1] Limitations on Owners Right To Use
The classical theory is that he who uses a right injures no one. Traditionally, therefore, it has been held that no person can be held liable for damages occasioned to another by the exercise of a right. The modern tendency, however, is to depart from the classical and traditional theory, and to grant indemnity for damages in cases where there is an abuse of right, even when the act is not illicit. The reason for this is that law cannot be given an anti-social effect. If mere fault or negligence in ones act can make him liable for damages for injury caused thereby, with more reason should abuse or bad faith make him liable.96 Our Civil Code, noticeably, has departed from the classical and traditional theory and adopted the view that a person will be protected
See Chapter 2, Title VII, Book II of the New Civil Code. Art. 25, NCC. 94 Sec. 118, C.A. No. 141, as amended. 95 Case v. Board of Health, 24 Phil. 250. 96 See Footnote No. 32, National Power Corp. v. Philipp Brothers Oceanic, Inc., 369 SCRA 629, 642.
92 93
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only when he acts in the legitimate exercise of his right, that is, when he acts with prudence and in good faith; but not when he acts with negligence or abuse. The principle is outlined in Article 19 of the Code which provides that every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. In relation to the exercise of the right to use property, Article 431 of the Code specically mandates that the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person. Not only that, our Constitution even went farther by declaring that the use of property bears a social function, and all economic agents shall contribute to the common good.97 The absence of good faith is essential in determining whether the owner can be held liable for any consequential damage arising from the exercise of his right to use the property. When the owner acts in the legitimate exercise of his right, that is, when he acts with prudence and in good faith, he does no actionable injury and cannot be held liable for damages.98 The damage resulting from the legitimate exercise of a persons right is a loss without injury damnum absque injuria. If the right is exercise in bad faith, however, and for the sole intent of prejudicing or injuring another, there is liability under the principle of abuse of right99 for the exercise of a right ends when the right disappears, and it disappears when it is abused especially to the prejudice of others.100 The foregoing principles are best illustrated when we compare the case of Villafuerte v. Court of Appeals, cited in supra., 36, with the case of Sps. Custodio and Sps. Santos v. Court of Appeals,101 both involving the exercise of the owners right to enclose or fence his property. In Villafuerte, the lot owners were held liable to pay damages because the exercise of the right was attended with bad faith it was resorted to for the purpose of evicting the occupants whose lease contract had already expired. In Sps. Santos, however, the Court held that the petitioners were not liable to the private respondents for their act of constructing
Sec. 6, Art. XII, 1987 Phil. Constitution. Amonoy v. Gutierrez, 351 SCRA 731. 99 Albenson Enterprises Corp. v. CA, 217 SCRA 18. 100 MBTC v. Wong, 359 SCRA 608, 618. 101 G.R. No. 116100, Feb. 9, 1996.
97 98
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a fence within their property since at the time of such construction, the lot of the petitioners was not subjected yet to any servitude and there was no easement of way existing in favor of the private respondents, either by law or contract. The private respondents were granted by the court a right of way to petitioners lot only when the former went to court to pray for such access. But prior to the decision of the court, the petitioners were declared to have an absolute right over their property and their act of fencing and enclosing the same was an act which they may lawfully perform in the enjoyment and exercise of said right.
Sps. Custodio and Sps. Santos v. Court of Appeals G.R. No. 116100, Feb. 9, 1996 The private respondents own a parcel of land with a two-door apartment erected thereon situated at Interior P. Burgos St., Palingon, Tipas, Taguig, Metro Manila. They were able to acquire said property through a contract of sale with spouses Mamerto Rayos and Teodora Quintero as vendors. Said property may be described to be surrounded by other immovables pertaining to petitioners. Taking P. Burgos Street as the point of reference, on the left side, going to private respondents, the row of houses will be as follows: That of petitioners Spouses Custodio, then that of petitioner Spouses Santos and then that of the private respondents. As an access to P. Burgos Street from private respondents property, there are two possible passageways. The rst passageway is approximately one meter wide and is about 20 meters distant from the private respondents residence to P. Burgos Street. Such path is passing in between the previously mentioned row of houses. The second passageway is about 3 meters in width and length from the private respondents residence to P. Burgos Street; it is about 26 meters. Thereafter, the petitioners constructed an adobe fence in their respective properties such that the entire rst passageway was enclosed. Subsequently, the private respondents led a complaint against the petitioners for the grant of an easement of right of way with prayer for damages. After trial, the trial court ordered the petitioners to grant the private respondents access to the passageway upon payment of just compensation. Not satised with the judgment, the private respondents faulted the trial court for not awarding them damages. On the sole issue of whether the trial court erred in not awarding damages in their favor, the matter reached the High Court. In ruling that the private respondents were not entitled to damages, the Court explained The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners, hence not contrary to morals, good customs or public policy. The law recognizes in
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the owner the right to enjoy and dispose of a thing, without other limitations than those established by law. It is within the right of petitioners, as owners, to enclose and fence their property. Article 430 of the Civil Code provides that (e)very owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon. At the time of the construction of the fence, the lot was not subject to any servitudes. There was no easement of way existing in favor of private respondents, either by law or by contract. The fact that private respondents had no existing right over the said passageway is conrmed by the very decision of the trial court granting a compulsory right of way in their favor after payment of just compensation. It was only that decision which gave private respondents the right to use the said passageway after payment of the compensation and imposed a corresponding duty on petitioners not to interfere in the exercise of said right. Hence, prior to said decision, petitioners had an absolute right over their property and their act of fencing and enclosing the same was an act which they may lawfully perform in the employment and exercise of said right. To repeat, whatever injury or damage may have been sustained by private respondents by reason of the rightful use of the said land by petitioners is damnum absque injuria. A person has a right to the natural use and enjoyment of his own property, according to his pleasure, for all the purposes to which such property is usually applied. As a general rule, therefore, there is no cause of action for acts done by one person upon his own property in a lawful and proper manner, although such acts incidentally cause damage or an unavoidable loss to another, as such damage or loss is damnum absque injuria. When the owner of property makes use thereof in the general and ordinary manner in which the property is used, such as fencing or enclosing the same as in this case, nobody can complain of having been injured, because the inconvenience arising from said use can be considered as a mere consequence of community life. The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie, although the act may result in damage to another, for no legal right has been invaded. One may use any lawful means to accomplish a lawful purpose and though the means adopted may cause damage to another, no cause of
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action arises in the latters favor. Any injury or damage occasioned thereby is damnum absque injuria. The courts can give no redress for hardship to an individual resulting from action reasonably calculated to achieve a lawful end by lawful means. [37.3.2] Limitations on the Right of Excluding Others
While an owner is entitled to exclusive and undisturbed possession of his property and has the right to exclude other persons from its enjoyment and disposal, such right is unavailing if the interference by a third person is borne out of a state of necessity. This is provided for in Article 432 of the New Civil Code, which states: Art. 432. The owner of a thing has no right to prohibit the interference of another with the same, if the interference is necessary to avert an imminent danger and the threatened damage, compared to the damage arising to the owner from the interference, is much greater. The owner may demand from the person beneted indemnity for the damage to him. (n)
[i] State of Necessity, Explained
The phrase state of necessity is of German origin.102 Articles 228 and 904 of the German Civil Code provide, as follows: Art. 228. He who injures or destroys anothers property in order to avoid an imminent danger to himself or a third person, which danger comes from such property, shall not be acting unlawfully, if the injury or destruction is necessary to avoid the danger, and the damage is not disproportionate to the latter. If the author has caused the danger, he shall be liable to indemnify for losses and damages. Art. 904. The owner of a thing cannot prohibit the interference therein by another, if such interference is necessary to avoid an actual danger, and the injury with which the latter is threatened is much greater than that to be suffered by the owner. The owner can recover indemnity for the damage suffered.
102
People v. Rebutado, G.R. No. 124058, Dec. 10, 2003.
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Under the provisions of Article 432 of the New Civil Code of the Philippines, the interference by a third person with anothers property is justied and cannot be prevented by the latter if such interference is necessary to avert an imminent danger and the threatened damage, compared to the damage arising to the owner from the interference, is much greater. An example of the application of the principle of state of necessity is when a re is threatening to spread and destroy other houses and properties and the destruction of some houses will avert the spread of the re, such destruction is justied and will not be considered as unlawful physical invasion upon anothers property. In order for the interference to be justied under the state of necessity, the following requisites must be present: (1) there must be a situation of grave peril, an actual or imminent danger, either upon the person of the actor or a third person or their property;103 (2) the interference is necessary to avert such danger;104 (3) the threatened damaged, compared to the damage arising to the owner from the interference, is much greater;105 and (4) the state of necessity must not be brought about by the intentional provocation of the party invoking the same.106
[ii] State of Necessity as Justifying Circumstance
The defense of a state of necessity is a justifying circumstance under Article 11, paragraph 4 of the Revised Penal Code, which reads: Art. 11. Justifying circumstances. The following do not incur any criminal liability: xxx xxx xxx 4. Any person who, in order to avoid an evil or injury, does an act which causes damage to another provided that the following requisites are present:
Art. 432, NCC. Id. 105 Id. 106 People v. Rebutado, supra.
103 104
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First. That the evil sought to be avoided actually exists; Second. That the injury feared be greater than that done to avoid it; Third. That there be no other practical and less harmful means of preventing it. Since state of necessity is a justifying circumstance, the accused does not commit a crime in legal contemplation; hence, is not criminally and civilly liable. Civil liability is borne by the person/persons beneted by the act of the accused.107 This is the only case among the justifying circumstances where there is civil liability, but the civil liability is borne by the persons for whose benet the harm has been prevented in proportion to the benet which they may have received.108
[iii] Indemnity For Damages
While interference to ones property pursuant to a state of necessity is justied and does not constitute unlawful aggression, the persons beneted by such interference are duty bound to indemnify the owner for the damage suffered by the latter.109 On this respect, the distinction made by the Senator Tolentino between acts in a state of necessity and defense against unlawful aggression or defense against dangerous objects must be taken into consideration. If the danger comes from anothers property, the case is one of defense against danger,110 in which case, there is no obligation to indemnify the owner for the damage caused if the latter himself was responsible for such damage.111 But if anothers property is used to avert danger not arising from it, the act is essentially one in a state of necessity112 which will entitle the owner to the indemnity provided in Article 432 of the Civil Code.
Id. See Art. 101, 2nd par., RPC. 109 Art. 432, NCC. 110 II Tolentino, Civil Code of the Philippines, 1992 ed., 68. 111 Id., 70. 112 Id., 68.
107 108
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[iv]
Doctrine of Self-help vs. State of Necessity
The doctrine of self-help is invoked by the owner or lawful possessor in protection of his right to prevent other persons from interfering with the property. The state of necessity, on the other hand, is availed of by another person against someone elses property for the purpose of averting an imminent danger to himself or to another person or to their property. Note that it is not possible for the application of both doctrines to result in conict of rights. If the application of one doctrine is proper, it necessarily follows that the application of the other doctrine is not proper. If, for example, all the requisites for the application of the doctrine of state of necessity are present, the owner cannot rightfully invoke the doctrine of self-help to defeat the application of the former. If the application of the doctrine of state of necessity is proper, the same is justied under the provisions of Article 432 of the New Civil Code and it is, in fact, considered a justifying circumstance under Article 11, fourth paragraph, of the Revised Penal Code. Such being the case, the interference made is not considered as an unlawful physical invasion or usurpation of anothers property, which is a requisite for the proper application of the doctrine of self-help under Article 429 of the New Civil Code.
[37.4] Limitations Imposed By the Owner Himself
The owner of the property may impose restrictions or limitations on ownership in two situations: (1) at the time that he transmits the property to another person; or (2) at the time that he continues to be the owner of the property. The owner of the property may, by reason of his right to dispose (jus disponendi) as discussed in supra 33, for the time being part with some of the attributes of ownership, thereby restricting and abridging his right. He may for example, enter into a contract of commodatum wherein he grants to another person the jus utendi over the property during the effectivity of the contract. Or he may constitute a usufruct over his property in favor of another person, in which case, he parts with the right of free enjoyment of his property (jus utendi) and the right to receive the fruits (jus fruendi) thereof. In a contract of lease, the owner parts with the right to the possession of the property. These rights
135
which may be exercised by another person against the property of the owner, if they are in the nature of real rights, are referred to in Roman Law as jus in re aliena. The right of the owner to impose reasonable restrictions or limitations on the right of ownership may even affect the property even after it has ceased to belong to the person imposing the limitation113 subject to the qualication that such limitation must not be contrary to the nature of ownership and not prohibited by law. A donor or testator, for example, may prohibit partition of the subject property but such prohibition cannot exceed twenty years.114
[37.4.1] Prohibition to Alienate
Prohibitions to alienate imposed by the will of the transmitting owner are generally valid except when they are forbidden by law or contrary to public policy. A testator, for example, may prohibit alienation of the property given by will but such prohibition cannot exceed twenty years.115 By analogy, therefore, a prohibition to alienate should not exceed at most a period of twenty years whether the transmission of ownership is done gratuitously or onerously, otherwise there would be subversion of public policy, which naturally frowns on unwarranted restrictions on the right of ownership. A perpetual prohibition against alienation is, however, void for being contrary to public policy. When, for example, the vendee of a parcel of land was prohibited from selling the subject property except to the vendor or to the latters heirs or successors, the Court held that such prohibition to sell to third parties is contrary to public policy because the same virtually amounts to a perpetual restriction to the right of ownership, specically the owners right to freely dispose of his properties.116 According to the Court, any such prohibition, indenite and stated as to time, so much so that it shall continue to be applicable even beyond the lifetime of the original parties to the contract, is, without doubt, a nullity.117
II Tolentino, Civil Code, 1992 ed., 61. Art. 494, 3rd par., NCC. 115 Art. 870, NCC. 116 Leal v. CA, G.R. No. L-65425, Nov. 5, 1987. 117 Id.
113 114
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[37.4.2]
Validity of Stipulations In The Deed of Restrictions
The provision in the deed of restrictions which required a purchaser of a parcel of land to pay association fees is a valid stipulation.118 A case in point is Bel Air Village Association, Inc. v. Dionisio119 where the village association led a complaint for collection of the association dues and also claimed for penalty and other charges. The Court afrmed the rule that an annotation to the effect that the lot owner becomes an automatic member of the village association and must abide by such rules and regulations laid down by said association was a valid restraint on ones ownership over the property as the same was for the interest of the sanitation, security and the general welfare of the community. In South Pachem Development, Inc. v. Court of Appeals,120 one of the real estate owners (SPDI) in the Makati commercial area and a member of the Makati Commercial Estate Association, Inc. (MACEA) questioned the validity of the stipulation in the deed of restrictions requiring purchasers of land from Ayala Corporation to pay association dues to MACEA for a period of 47 years from date of purchase. SPDI maintains that the period of 47 years constitutes a restriction on its right to enjoy and dispose of the property under Article 428 of the Civil Code as the non-payment of the association dues would constitute a lien on the subject property. The Court upheld the validity of the deed of restrictions because a contract becomes the law between the parties and each one is bound to comply therewith. In Cariday Investment Corporation v. Court of Appeals,121 it was recognized that residents and lot owners in the subdivision automatically become members of the Forbes Park Association and are bound by its rules and regulations stipulated in the deed of restrictions. A provision in the deed of restrictions annotated at the back of the certicate of title of a lot owner in the Forbes Park Subdivision required the owner to use his lot for residential purposes and stated that not more than one single family residential building will be constructed thereon; that the property would be subject to an easement of two meters within the lot
South Pacem Development, Inc. v. CA, G.R. No. 126260, Dec. 16, 2004. 174 SCRA 589 (1989). 120 Supra. 121 176 SCRA 31 (1989).
118 119
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and adjacent to the rear and two sides thereof for the purpose of drainage, sewerage water and other public facilities as may be necessary and desirable; and that additional restrictions, reservations, or servitudes as the association may, from time to time, adopt and prescribe would be for a period of fty (50) years from January 1, 1949. Therein petitioner allowed the occupancy by two families, thereby violating the singlefamily residential building restriction. The Supreme Court declared that the purpose of the restriction is valid as it avoids overcrowding both in the houses and in the subdivision which would result in pressure upon the common facilities such as water, power and telephone connections; accelerate the deterioration of the roads; and create problems of sanitation and security in the subdivision. Likewise, the restrictions were for aesthetic consideration and for the preservation of the peace, beauty, tranquility, and serenity of living at Forbes Park.
Art. 433. Actual possession under claim of ownership raises a disputable presumption of ownership. The true owner must resort to judicial process for the recovery of the property. (n) Art. 434. In an action to recover, the property must be identied, and the plaintiff must rely on the strength of his title and not on the weakness of the defendants claim. (n) Art. 435. No person shall be deprived of his property except by competent authority and for public use and always upon payment of just compensation. Should this requirement be not rst complied with, the courts shall protect and, in a proper case, restore the owner in his possession. (349a) Art. 436. When any property is condemned or seized by competent authority in the interest of health, safety or security, the owner thereof shall not be entitled to compensation, unless he can show that such condemnation or seizure is unjustied. (n)
38. Recovery of Property

[38.1] Presumption of Ownership
Possession is viewed by the Civil Code as presumed ownership.122 Hence, if a person is in actual possession of a property and claiming to be its owner, the law presumes that he is the owner thereof. This
122
II Caguioa, Civil Code, 1966 ed., 165.
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presumption of ownership arising from actual possession is expressly recognized in Article 433 of the Civil Code which states that actual possession under claim of ownership raises a disputable presumption of ownership. This presumption is a necessary consequence of the existence of presumptions in favor of the innocence of a person from any wrongdoing123 and of his good faith.124 Hence, when a person has actual possession of property under claim of ownership, the law presumes him innocent of any wrongdoing and, therefore, he must be the owner since possession is one of the rights included in ownership.125 The presumption, however, is merely disputable126 and may be overthrown by proof to the contrary. Since actual possession under claim of ownership raises a disputable presumption of ownership, such possession must be respected until it is shown that another person has a better right over the property. This principle is expressly recognized in Article 539 which provides: Art. 539. Every possessor has a right to be respected in his possession; and should he be disturbed therein he shall be protected in or restored to said possession by the means established by the laws and the Rules of Court. A possessor deprived of his possession through forcible entry may within ten days from the ling of the complaint present a motion to secure from the competent court in the action for forcible entry, a writ of preliminary mandatory injunction to restore him in his possession. The court shall decide the motion within thirty (30) days from ling thereof. (446a) Consequently, if another person claims to be the true owner of the property, he cannot recover the property by force if the actual possessor objects thereto.127 Even the true owner is required by law to resort to judicial process in order to recover his property.128 If he resorts to force
See Rule 131, Sec. 3(a), Rules of Court. See Art. 527, NCC. 125 II Caguioa, Civil Code, 1966 ed., 61. 126 Art. 433, NCC. 127 Art. 536, NCC. 128 Art. 433, NCC.
123 124
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or violence in recovering the property, such recovery of possession is not recognized by law as valid.129
[38.2] Requisites of Accion Reivindicatoria
In civil cases, the law requires that the party who alleges a fact and substantially asserts the afrmative of the issue has the burden of proving it.130 This evidentiary rule is based on the principle that the suitor who relies upon the existence of a fact should be called upon to prove it.131 In relation to accion reivindicatoria, Article 434 of the New Civil Code provides that to successfully maintain an action to recover the ownership of a real property, the person who claims a better right to it must prove two (2) things: rst, the identity of the land claimed; and second, his title thereto.132 If the plaintiff is unable to prove any of the foregoing requisites, his action will fail even if the defendant cannot prove his title to the property. In an action to recover real property, the settled rule is that the plaintiff must rely on the strength of his title, not on the weakness of the defendants title.133 This requirement is based on two (2) reasons: rst, it is possible that neither the plaintiff nor the defendant is the true owner of the property in dispute;134 and second, the burden of proof lies on the party who substantially asserts the afrmative of an issue for he who relies upon the existence of a fact should be called upon to prove that fact.135 Failure on the part of the plaintiff to prove his right of ownership will bar an action to recover the property; his right to recover must be founded on positive title or right, and not merely on negative ones, such as the lack or insufciency of title on the part of the defendant.136 The possessor has a presumption of title, and unless the plaintiff proves he has a better right, he cannot recover the property from the defendant.137
Art. 536, NCC. Alonzo v. San Juan, G.R. No. 137549, February 11, 2005. 131 Ramcar, Inc. v. Garcia, 114 Phil. 1026 (1962). 132 Navalle-Hutchison v. Buscas, G.R. No. 158554, May 26, 2005. 133 Art. 434, NCC; see also Turquesa v. Valera, 322 SCRA 573 (2000). 134 Navalle-Hutchison v. Buscas, supra, citing Civil Code of the Philippines, Annotated, Justice Edgardo L. Paras, vol. two, 14th ed. at 130. 135 Navalle-Hutchison v. Buscas, supra, citing Ramcar, Inc. v. Garcia, 114 Phil. 1026 (1962). 136 Heirs of Anastacio Fabela v. Court of Appeals, 362 SCRA 531 (2001). 137 Id., see also Art. 433, NCC.
129 130
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[38.2.1]
Proof of Identity
In an accion reinvindicatoria, the person who claims that he has a better right to the property must rst x the identity of the land he is claiming by describing the location, area and boundaries thereof.138 The rule is that he who claims to have a better right to the property must clearly show that the land possessed by the other party is the very land that belongs to him.139 So that when the record does not show that the land subject matter of the action has been exactly determined, the action cannot prosper, inasmuch as the plaintiffs ownership rights in the land claimed do not appear satisfactorily and conclusively proven at the trial.140 What really denes a piece of land is the boundaries therein laid down,141 which boundaries may either be natural or articial.142 The boundaries are considered natural if they are permanent landmarks established by nature such as for example a river, a lake, a stream, etc.143 It is articial if it is through concrete monuments established by the Bureau of Lands or it consists in the property of neighbors.144 However, in order that natural boundaries of land may be accepted for the purpose of varying the extent of the land included in a deed of conveyance, the evidence as to such natural boundaries must be clear and convincing.145 Such natural boundaries must be of such a character as to denitely and accurately segregate the land in question from the adjoining property146 and there must be no doubt left that the land included within the natural boundaries is the same land which was intended to be recovered by the plaintiff. The rule is that when there is a conict between the area and the boundaries of a land, the latter prevails for what really denes a piece of land is not the area mentioned in its description, but the boundaries
Navalle-Hutchison v. Buscas, supra, citing Heirs of Anastacio Fabela v. Court of Appeals, 362 SCRA 531 (2001). 139 Beo v. CA, 200 SCRA 575. 140 Bordalba v. CA, G.R. No. 112443, Jan. 25, 2002, citing Beo v. CA, 200 SCRA 575. 141 Intestate of Fausto Bayot v. Director of Lands, G.R. No. L-8536, April 28, 1956. 142 II Caguioa, Civil Code, 1966 ed., 62, citing Rosado v. Director of Lands, 58 Phil. 83. 143 Id. 144 Id., citing Government v. Abad, 47 Phil. 573. 145 Waldroop v. Castaxda, G.R. No. G.R. No. L-6852, 25 Phil. 30, August 9, 1913. 146 Id.
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therein laid down, as enclosing the land and indicating its limits.147 However, it is only when the boundaries given are sufciently certain and the identity of the land clearly proved by the boundaries thus indicated that an erroneous statement concerning the area can be disregarded or ignored.148 Otherwise, the area stated should be followed.149 This is the exception to the rule.150
[38.2.2] Proof of Title
As previously stated, the lack or insufciency of title on the part of the defendant does not entitle the plaintiff in an accion reivindicatoria to a favorable decision unless he himself is able to support his claim of ownership by evidence of title. In our jurisdiction, a certicate of title is considered as conclusive evidence of ownership of the land described therein, the validity of which is not subject to collateral attack.151 Hence, as against an array of proofs consisting of tax declarations and/or tax receipts which are not conclusive evidence of ownership nor proof of the area covered therein, an original certicate of title indicates true and legal ownership by the registered owners over the disputed premises.152 However, it has been held that if a person or entity obtains a title which includes by mistake or oversight land which cannot be registered under the Torrens System or over which the buyer has no legal right, said buyer does not, by virtue of said certicate alone, become the owner of the land illegally or erroneously included153 and where there is such an error, the courts may decree that the certicate of title be cancelled and a correct one issued to the buyer.154
147 Heirs of Anastacio Fabela v. Court of Appeals, 362 SCRA 531 (2001), citing Vda. de Tan v. IAC, 213 SCRA 95, citing Dichoso v. CA, 192 SCRA 169; Erico v. Chigas, 98 SCRA 575. 148 Intestate of Fausto Bayot v. Director of Lands, supra. 149 Id., citing Sanchez v. Director of Lands, 63 Phil., 378, 386. 150 Id., see also Pamintuan v. Insular Government (1907), 8 Phil., 512; Paras v. Insular Government (1908), 11 Phil. 378; and Waldroop v. Castaxda, 25 Phil. 30. 151 Tubo-Rodriguez v. Rodriguez, G.R. No. 175720, Sept. 11, 2007. 152 Cureg v. IAC, G.R. No. 73465 Sept. 7, 1989; citing Ferrer-Lopez v. Court of Appeals, G.R. No. 50420, May 29, 1987, 150 SCRA 393,401-402 153 Ledesma v. Mun. of Iloilo, 49 Phil. 773 (1926), citing Legarda and Prieto v. Saleeby, 31 Phil. 590. 154 Veterans Federation of the Philippines v. Court of Appeals, 345 SCRA 348 (2000), citing Consul v. Buhay, 64 O.G. 29, July 15, 1968, CA.
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Regarding tax declarations and receipts, they are not conclusive evidence of ownership.155 At most, they constitute mere prima facie proof of ownership or possession of the property for which taxes have been paid.156 In the absence of actual public and adverse possession, the declaration of the land for tax purposes does not prove ownership.157 Yet, when coupled with proof of actual possession, they are strong evidence of ownership.158 Thus, where it was shown that plaintiff has never paid the land tax, while the defendant has faithfully done so for many years, there being no explanation offered, it was held that such payment of taxes should be taken into consideration in favor of defendant.159
Art. 437. The owner of a parcel of land is the owner of its surface and of everything under it, and he can construct thereon any works or make any plantations and excavations which he may deem proper, without detriment to servitudes and subject to special laws and ordinances. He cannot complain of the reasonable requirements of aerial navigation. (350a) Art. 438. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-half thereof shall be allowed to the nder. If the nder is a trespasser, he shall not be entitled to any share of the treasure. If the things found be of interest to science or the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. (351a) Art. 439. By treasure is understood, for legal purposes, any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear. (352)
39. Right to Sub-surface and Airspace It is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height.160 This principle has its origin
Director of Lands v. IAC, 195 SCRA 38. Heirs of Vencilao v. CA, 288 SCRA 574, 581-582; Deiparine v. CA, 299 SCRA 668, 675; Tiong v. CA, 287 SCRA 102, 115. 157 Cequea v. Bolante, G.R. No. 137944, April 6, 2000. 158 Heirs of Anastacio Fabela v. Court of Appeals, 362 SCRA 531 (2001). 159 Id. 160 Republic of the Philippines v. Court of Appeals, 160 SCRA 228 (1988), citing Art. 437, NCC.
155 156
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in the ad coelum rule of the Roman Law Cujus est solum, ejus est usque ad coelum ad infernos (to whomsoever the soil belongs, he owns also to the sky and to the depths). However, the literal construction of the ad coelum doctrine has already been rejected by the courts.161 This formula from the center of the earth to the sky was invented at some remote time in the past when the use of space above land actual or conceivable was conned to narrow limits, and simply meant that the owner of the land could use the overlying space to such an extent as he was able, and that no one could ever interfere with that use.162 This formula was never taken literally, but was a gurative phrase to express the full and complete ownership of land and the right to whatever superjacent airspace was necessary or convenient to the enjoyment of the land.163 Our Civil Code, even as it adopted the ad coelum rule in Article 437, has subjected the same to certain limitations: (1) that it cannot work detriment to servitudes; (2) that it is subject to special laws and ordinances; and (3) that it is subject to reasonable requirements of aerial navigation. As a consequence of the foregoing principle, the owner of the land can make any construction thereon or make any plantation or excavation which he may deem proper provided it does not impair servitudes and, of course, subject to special laws and ordinances and reasonable requirements of aerial navigation.164
[39.1] Right To the Sub-Surface or Subsoil [39.1.1] Rights Over Land Are Indivisible
The ownership of land extends to the surface as well as to the subsoil underneath. In Republic of the Philippines v. Court of Appeals,165 this principle was applied to show that rights over lands are indivisible and, consequently, require a denitive and categorical classication. In the above mentioned case, Jose Dela Rosa led an application for registration of a parcel of land situated in Itogon, Benguet claiming
161 See US v. Causby, 328 U.S. 256, 66 S. Ct. 1062, 90 L.Ed. 1206 (1946); Hinman v. Pacic Air Transport, US Court of Appeals, 9th Circuit, 84 F.2d 755 (1936). 162 Hinman v. Pacic Air Transport, supra. 163 Id. 164 Art. 437, NCC. 165 Id.
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that the same was agricultural land and that he acquired ownership over it by virtue of acquisitive prescription, the same being in possession of his predecessors-in-interest for a period long enough to meet the requirements of the law. Such application was opposed by Benguet Consolidated, Inc., Atok Big Wedge Corporation and the Republic of the Philippines, through the Bureau of Forestry Development. Benguet and Atok each claimed that they acquired minerals claims over certain portions of the land. The Republic, on the other hand, claimed that the land was covered by the Central Cordillera Forest Reserve and, thus, part of public dominion. With respect to the claim of the Republic of the Philippines, the Supreme Court held that while the subject property was considered forest land and included in the Central Cordillera Forest Reserve, the same did not impair the rights already vested in Benguet and Atok at that time. The Court reasoned that under the law then in force, the perfection of the mining claim converted the property to mineral land and removed it from the public domain. By such act, the locators of the mining claims from whom Benguet and Atok acquired their respective claims, already acquired exclusive rights over the land, against even the government, without need of any further act such as the purchase of the land or the obtention of a patent over it. As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok. With respect to the claim of ownership by Dela Rosa, the Court held that even if it be assumed that his predecessors-in-interest had really been in possession of the subject property, their possession was not in the concept of owner of the mining claim but of the property as agricultural land, which it was not. The property was mineral land, and they were claiming it as agricultural land. The Court noted that said predecessors-in-interest did not dispute the rights of the mining locators nor did they seek to oust them as such and to replace them in the mining land. In fact, one of the predecessors-in-interest testied that she was aware of the diggings being undertaken down below but she did not mind and did not protest the same although she claimed to be the owner of the said land. When the case was decided by the Court of Appeals, the appellate court held that there was no conict of interest between the owners
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of the surface rights (referring to the predecessors-in-interest of Dela Rosa) and the owners of the sub-surface rights (referring to the mining locators). When the case was elevated to the Supreme Court, the High Court found the Court of Appeals ruling to be a strange doctrine for the land would be classied as mineral underneath and agricultural on the surface, subject to separate claims of title. The Supreme Court then held that rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. According to the Court, the classication must be categorical; the land must be either completely mineral or completely agricultural. In this case, the Court categorically classied the land as mineral land. The Court explained, thus The Court of Appeals justied this by saying there is no conict of interest between the owners of the surface rights and the owners of the sub-surface rights. This is rather strange doctrine, for it is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height. Under the aforesaid ruling, the land is classied as mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difcult to understand, especially in its practical application. Under the theory of the respondent court, the surface owner will be planting on the land while the mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may interfere with the operations below and the miner cannot blast a tunnel lest he destroy the crops above. How deep can the farmer, and how high can the miner, go without encroaching on each others rights? Where is the dividing line between the surface and the subsurface rights? The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classication must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally classied as forest land ceased to be so and became mineral and completely mineral once the
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mining claims were perfected. As long as mining operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the surface.166
[39.1.2] Extent of Rights Over The Sub-Surface
With respect to the land owners right to the subsoil, the question that comes to mind is this: up to what extent will the land owners right be with respect to the sub-surface? This is the question that confronts the Supreme Court in the case of National Power Corporation v. Ibrahim.167 In the above-mentioned case, the National Power Corporation constructed underground tunnels on several parcels of land owned in common by Ibrahim and his co-owners situated in Lanao Del Sur. NAPOCOR constructed the tunnels in 1978 but its existence was discovered by the land owners only in 1992. The tunnels were apparently being used by NAPOCOR in siphoning the water of Lake Lanao and in the operation of NAPOCORs other projects located in other parts of Mindanao. The existence of the tunnels came to the attention of the co-owners only when one of them applied for a permit with the Marawi City Water District to construct and/or install a motorized deep well. The application was denied on the ground that the construction of the deep well would cause danger to lives and property because Marawi City lies in an area of local volcanic and tectonic activity and because of the existence of tunnels underneath the surface of their property. He was then informed that underneath the land are underground tunnels of the NAPOCOR. Upon such discovery, the co-owners led an action against NAPOCOR for recovery of land and damages. The trial court denied the prayer of the co-owners for the dismantling of the tunnels but ordered NAPOCOR to pay them just compensation since there was taking of their property. The Court of Appeals sustained the decision of the trial Court. Hence, NAPOCOR elevated the matter to the Supreme Court.
166 167
At pp. 237-238. 526 SCRA 149 (2007).
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NAPOCOR maintains that the sub-terrain portion where the underground tunnels were constructed does not belong to the private respondents (the co-owners) even if they owned the property because their right to the subsoil does not extend beyond what is necessary to enable them to obtain all the utility and convenience that such property can normally give. NAPOCOR also asserts that respondents were still able to use the subject property even with the existence of the tunnels. In nding the arguments of NAPOCOR to be without merit, the Supreme Court held that pursuant to Article 437 of the Civil Code, the ownership of land extends to the surface as well as to the subsoil under it. The Court explained that the argument by the petitioner that the landowners right extends to the sub-soil insofar as necessary for their practical interests serves only to further weaken its case because the theory would limit the right to the sub-soil upon the economic utility which such area offers to the surface owners. Presumably, according to the Court, the landowners right extends to such height or depth where it is possible for them to obtain some benet or enjoyment, and it is extinguished beyond such limit as there would be no more interest protected by law. In this case, the landowners could have dug upon their property motorized deep wells but were prevented from doing so by the authorities precisely because of the construction and existence of the tunnels underneath the surface of their property. Hence, the land owners still had a legal interest in the sub-terrain portion insofar as they could have excavated the same for the construction of the deep well. There was, therefore, in this case, taking of private respondents property which entitled the latter to the payment of just compensation. The Court explained In disregarding this procedure and failing to recognize respondents ownership of the sub-terrain portion, petitioner took a risk and exposed itself to greater liability with the passage of time. It must be emphasized that the acquisition of the easement is not without expense. The underground tunnels impose limitations on respondents use of the property for an indenite period and deprive them of its ordinary use. Based upon the foregoing, respondents are clearly entitled to the payment of just compensation. Notwithstanding the fact that petitioner only occupies the sub-terrain portion, it
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is liable to pay not merely an easement fee but rather the full compensation for land. This is so because in this case, the nature of the easement practically deprives the owners of its normal benecial use. Respondents, as the owners of the property thus expropriated, are entitled to a just compensation which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property.168
[39.2] Right to Hidden Treasure
Since the owner of the land is likewise the owner of its sub-surface or sub-soil, any hidden treasure on the sub-surface also belongs to him.169 The same rule applies if the hidden treasure is located on a building or other property the same belong to the owner of the building or other property on which it is found.170 However, when the discovery is made by a stranger who is not a trespasser and the discovery is by chance, the nder is entitled to one-half of the treasure.171 If the nder is a trespasser, he shall not be entitled to any share of the treasure.172
[39.2.1] Concept of Hidden Treasure
For legal purposes, hidden treasure is understood to be any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear.173 Hence, for a property to be considered as hidden treasure the following requisites must be satised: (1) the deposit of money, jewelry or other precious objects must be hidden or unknown; and (2) the lawful ownership of which must not appear. Under the ejusdem generis rule, the term other precious objects should be understood as being similar to money or jewelry.174 Hence, the concept does not include natural wealth, i.e., minerals and petroleum. The Regalian doctrine reserves to the State all natural wealth that may
At pp. 163-164. Art. 438, 1st par., NCC. 170 Id. 171 Art. 438, 2nd par., NCC. 172 Id. 173 Art. 439, NCC. 174 Vitug, Civil Law, Vol. 1, 2003 ed., p. 15.
168 169
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be found in the bowels of the earth even if the land where the discovery is made be private.175 As such, the right of the owner of the land with respect to the sub-surface or subsoil is subject to the application of the Regalian doctrine.
EDWARDS v. SIMS Court of Appeals of Kentucky, 1929. 232 Ky. 791, 24 S.W.2d 619. STANLEY, C. This case presents a novel question. In the recent case of Edwards v. Lee, 230 Ky. 375, 19 S.W.2d 992, an appeal was dismissed which sought a review and reversal of an order of the Edmonson circuit court directing surveyors to enter upon and under the lands of Edwards and others and survey the Great Onyx Cave for the purpose of securing evidence on an issue as to whether or not a part of the cave being exploited and shown by the appellants runs under the ground of Lee. The nature of the litigation is stated in the opinion and the order set forth in full. It was held that the order was interlocutory and consequently one from which no appeal would lie. Following that decision, this original proceeding was led in this court by the appellants in that case (who were defendants below) against Hon. N.P. Sims, judge of the Edmonson circuit court, seeking a writ of prohibition to prevent him enforcing the order and punishing the petitioners for contempt for any disobedience of it. It is alleged by the petitioners that the lower court was without jurisdiction or authority to make the order, and that their cave property and their right of possession and privacy will be wrongfully and illegally invaded, and that they will be greatly and irreparably injured and damaged without having an adequate remedy, since the damage will have been suffered before there can be an adjudication of their rights on a nal appeal. It will thus be seen that there are submitted the two grounds upon which this court will prohibit inferior courts from proceeding, under the provisions of Section 110 of the Constitution, namely: (1) Where it is a matter in which it has no jurisdiction and there is no remedy through appeal, and (2) where the court possesses jurisdiction but is exercising or about to exercise its power erroneously, and which would result in great injustice and irreparable injury to the applicant, and there is no adequate remedy by appeal or otherwise. Dufn v. Field, Judge, 208 Ky. 543, 271 S.W. 596; Potter v. Gardner, 222 Ky. 487, 1 S.W.2d 537; Litteral v. Woods, 223 Ky. 582, 4 S.W.2d 395.
175
Republic v. CA, 160 SCRA 228.
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1. There is no question as to the jurisdiction of the parties and the subject matter. It is only whether the court is proceeding erroneously within its jurisdiction in entering and enforcing the order directing the survey of the subterranean premises of the petitioners. There is but little authority of particular and special application to caves and cave rights. In few places, if any, can be found similar works of nature of such grandeur and of such unique and marvelous character as to give to caves a commercial value sufcient to cause litigation as those peculiar to Edmonson and other countries in Kentucky. The reader will nd of interest the address on The Legal Story of Mammoth Cave by Hon. John B. Rodes, of Bowling Green, before the 1929 Session of the Kentucky State Bar Assocation, published in its proceedings. In Cox v. Colossal Cavern Co., 210 Ky. 612, 276 S.W. 540, the subject of cave rights was considered, and this court held there may be a severance of the estate in the property, that is, that one may own the surface and another the cave rights, the conditions being quite similar to but not exactly like those of mineral lands. But there is no such severance involved in this case, as it appears that the defendants are the owners of the land and have in it an absolute right. Cujus est solum, ejus est usque ad coelum ad infernos (to whomsoever the soil belongs, he owns also to the sky and to the depths), is an old maxim and rule. It is that the owner of realty, unless there has been a division of the estate, is entitled to the free and unfettered control of his own land above, upon, and beneath the surface. So whatever is in a direct line between the surface of the land and the center of the earth belongs to the owner of the surface. Ordinarily that ownership cannot be interfered with or infringed by third persons. 17 C.J. 391; 22 R.C.L. 56; Langhorne v. Turman, 141 Ky. 809, 133 S.W. 1008, 34 L.R.A., N.S., 211. There are, however, certain limitations on the right of enjoyment of possession of all property, such as its use to the detriment or interference with a neighbor and burdens which it must bear in common with property of a like kind. 22 R.C.L. 77. With this doctrine of ownership in mind, we approach the question as to whether a court of equity has a transcendent power to invade that right through its agents for the purpose of ascertaining the truth of a matter before it, which fact thus disclosed will determine certainly whether or not the owner is trespassing upon his neighbors property. Our attention has not been called to any domestic case, nor have we found one, in which the question was determined either directly or by analogy. It seems to the court, however, that there can be little differentiation, so far as the matter now before us is concerned, between caves and mines. And as declared in 40 C.J. 947: A court of equity, however, has the inherent power, independent of statute, to compel a mine owner to permit an inspection of his works at the suit of a party who can show reasonable ground for suspicion that his lands are being trespassed upon though them, and may issue an injunction to permit such inspection.
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There is some limitation upon this inherent power, such as that the person applying for such an inspection must show a bona de claim and allege facts showing a necessity for the inspection and examination of the adverse partys property; and, of course, the party whose property is to be inspected must have had an opportunity to be hear in relation thereto. In the instant case it appears that these conditions were met. * * * We can see no difference in principle between the invasion of a mine on adjoining property to ascertain whether or not the minerals are being extracted from under the applicants property and an inspection of this respondents property through his cave to ascertain whether or not he is trespassing under this applicants property. It appears that before making this order the court had before him surveys of the surface of both properties and the conicting opinions of witnesses as to whether or not the Great Onyx Cave extended under the surface of the plaintiffs land. This opinion evidence was of comparatively little value, and as the chancellor (now respondent) suggested, the controversy can be quickly and accurately settled by surveying the cave; and if defendants are correct in their contention this survey will establish it beyond all doubt and their title to this cave will be forever quieted. If the survey shows the Great Onyx Cave extends under the lands of plaintiffs, defendants should be glad to know this fact and should be just as glad to cease trespassing upon plaintiffs lands, if they are in fact doing so. The peculiar nature of these conditions, it seems to us, makes it imperative and necessary in the administration of justice that the survey should have been ordered and should be made. It appearing that the circuit court is not exceeding its jurisdiction or proceeding erroneously, the claim of irreparable injury need not be given consideration. It is only when the inferior court is acting erroneously, and great or irreparable damage will result, and there is no adequate remedy by appeal, that a writ of prohibition will issue restraining the other tribunal, as held by authorities cited above. The writ of prohibition is therefore denied. Whole court sitting.
If the case of Edwards v. Sims, however, will transpire in the Philippines, the ad coelum rule will not apply because caves in this country are considered part of the national wealth, hence, owned by the State by virtue of its regalian right,176 whether the entrance thereof
176
See Sec. 2, Art. XII, 1987 Phil. Constitution.
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is located either in a private or public land and whether such entrance is naturally formed or man made.177 The conservation, protection and management of caves and cave resources in the Philippines is governed by R.A. No. 9072, otherwise known as the National Caves and Caves Resources Management and Protection Act, which directs and empowers the DENR, in coordination with the Department of Tourism (DOT), the National Museum, the National Historical Institute and concerned local government units (LGUs) for specic caves, to implement the provisions of the aforesaid law.
REPUBLIC ACT NO. 9072 (National Caves and Cave Resources Management and Protection Act) AN ACT TO MANAGE AND PROTECT CAVES AND CAVE RESOURCES AND FOR OTHER PURPOSES. Sec. 1. Title. This Act shall be known as the National Caves and Cave Resources Management and Protection Act. Sec. 2. Declaration of Policy. It is hereby declared the policy of the State to conserve, protect and manage caves and cave resources as part of the countrys natural wealth. Towards this end, the State shall strengthen cooperation and exchange of information between governmental authorities and people who utilize caves and cave resources for scientic, educational, recreational, tourism and other purposes. Sec. 3. Denition of Terms. For purposes of this Act, the following terms shall be dened as follows: (a) Cave means any naturally occurring void, cavity, recess or system of interconnected passages beneath the surface of the earth or within a cliff or ledge and which is large enough to permit an individual to enter, whether or not the entrance, located either in private or public land, is naturally formed or man made. It shall include any natural pit, sinkhole or other feature which is an extension of the entrance. The term also includes cave resources therein, but not any vug, mine tunnel, aqueduct or other manmade excavation. (b) Cave resources includes any material or substance occurring naturally in caves, such as animal life, plant life, including paleontological
177 See Sec. 3(a), R.A. No. 9072, otherwise known as the National Caves and Caves Resources Management and Protection Act.
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and archaeological deposits, cultural artifacts or products of human activities, sediments, minerals, speleogems and speleothems. (c) Secretary means the Secretary of the Department of Environment and Natural Resources (DENR). (d) Speleogem means relief features on the walls, ceilings and oor of any cave or lava tube which are part of the surrounding bedrock, including but not limited to anastomoses, scallops, meander niches, petromorphs and rock pendants in solution caves and similar features unique to volcanic caves. (e) Speleothem means any natural mineral formation or deposit occurring in a cave or lava tube, including but not limited to any stalactite, stalagmite, helictite, cave ower, owstone, concretion, drapery, rimstone or formation of clay or mud. (f) Signicant Cave refers to a cave which contains materials or possesses features that have archaeological, cultural, ecological, historical or scientic value as determined by the DENR in coordination with the scientic community and the academe. Sec. 4. Implementing Agency. The DENR shall be the lead agency tasked to implement the provisions of this Act in coordination with the Department of Tourism (DOT), the National Museum, the National Historical Institute and concerned local government units (LGUs) for specic caves, except that in the Province of Palawan, the Palawan Council for Sustainable Development shall be the lead implementing agency pursuant to Republic Act No. 7611 or the Strategic Environmental Plan for Palawan Act. Sec. 5. Powers and Functions of the Department of Environment and Natural Resources (DENR). In the implementation of this Act, the DENR shall exercise the following powers and functions: (a) Formulate, develop and implement a national program for the management, protection and conservation of caves and cave resources; (b) Disseminate information and conduct educational campaign on the need to conserve, protect and manage our caves and cave resources; (c) Issue permits for the collection and removal of guano and other cave resources which shall be determined in coordination with the DOT, National Museum, concerned LGUs, the scientic community and the academe, with regard to specic caves taking into consideration biodiversity as well as the aesthetic and archaeological value of the cave: Provided, That the permittee shall be required to post a bond to ensure compliance with the provisions of any permit: Provided, further, That any permit issued under this Section shall be revoked by the Secretary when the permittee violates any provision of this Act
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or fails to comply with any other condition upon which the permit was issued: Provided, furthermore, That the Secretary cannot issue permits for the removal of stalactites and stalagmites, and when it is established that the removal of the resources will adversely affect the value of a signicant cave: Provided, nally, That caves located within a protected area shall be subjected to the provisions of Republic Act No. 7586 or the National Integrated Protected Area System Act of 1992; (d) Call on any local government unit, bureau, agency, state university or college and other instrumentalities of the government for assistance as the need arises in the discharge of its functions; (e) Enter into a memorandum of agreement with any local government unit (LGU) for the preservation, development and management of cave or caves located in their respective territorial jurisdiction; (f) Tap the cooperation of peoples and non-governmental organizations as active partners in the conservations and protection of our caves and cave resources; and (g) Exercise other powers and perform other functions as may be necessary to implement the provisions of this Act. Sec. 6. Information Concerning the Nature and Location of Signicant Caves. Information concerning the nature and specic location of a potentially signicant cave shall not be made available to the public within one (1) year after its discovery by the DENR, during which time the DENR in coordination with the DOT, the National Museum, the National Historical Institute, concerned LGUs the scientic community and the academe shall assess its archaeological, cultural, ecological, historical and scientic value, unless a written request is made and the Secretary determines that disclosure of such information will further the purpose of this Act and will not create a substantial risk of harm, theft or destruction on such cave. The written request shall contain, among others, the following: (a) sought; (b) sought; a description of the geographic site for which the information is an explanation of the purpose for which the information is
(c) an assurance or undertaking satisfactory to the Secretary that adequate measures are to be taken to protect the condentiality of such information and to ensure the protection of the cave from destruction by vandalism and unauthorized use.
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Sec. 7. Prohibited Acts. The following shall be considered Prohibited Acts: (a) Knowingly destroying, disturbing, defacing, marring, altering, removing, or harming the speleogem or speleothem of any cave or altering the free movement of any animal or plant life into or out of any cave; (b) Gathering, collecting, possessing, consuming, selling, bartering or exchanging or offering for sale without authority any, cave resource; and (c) Counselling, procuring, soliciting or employing any other person to violate any provisions of this Section. Sec. 8. Penalties. Any person found guilty of any of the offenses enumerated under Section 7 hereof shall be punished by imprisonment from two (2) years to six (6) years or a ne ranging from Twenty thousand pesos (P20,000) to ve hundred thousand pesos (P500,000.00) or both at the discretion of the Court: Provided, That the person furnishing the capital to accomplish the acts punishable herein shall be punished by imprisonment from six (6) years and one (1) day to eight (8) years or by a ne ranging from Five hundred thousand pesos (P500,000.00) to One million pesos (P1,000,000.00) or both at the discretion of the Court: Provided, further, That if the area requires rehabilitation or restoration as determined by the Court, the offender shall also be required to restore the same, whenever practicable or compensate for the damage: Provided, nally, That if the offender is a government employee, he or she shall likewise be removed from ofce. Sec. 9. Administrative Conscation and Conveyance. The Secretary shall order the conscation, in favor of the Government of the cave resources gathered, collected, removed, possessed or sold including the conveyance and equipment used in violation of Section 7 hereof. Sec. 10. Fees. Any money collected by the DENR as permit fees for collection and removal of cave resources, as a result of the forfeiture of a bond or other security by a permittee who does not comply with the requirements of such permit issued under this Act or by way of nes for violations of this Act shall be remitted to the National Treasury. Sec. 11. Implementing Rules and Regulations. The DENR shall, within six (6) months from the effectivity of this Act, issue rules and regulations necessary to implement the provisions hereof. Sec. 12. Appropriations. The amount necessary to carry out the provisions of this Act shall be included in the General Appropriations Act of the year following its enactment into law and thereafter.
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Sec. 13. Separability Clause. If any provisions of this Act is subsequently declared unconstitutional, the remaining provisions shall remain in full force and effect. Sec. 14. Repealing Clause. Presidential Decree No. 1726-A is hereby modied. Treasure hunting in caves shall be governed by the provisions of this Act. Except Presidential Decree No. 412 and Republic Act No. 4846, all other laws, decrees, orders and regulations or parts thereof which are inconsistent with any of the provisions of this Act are hereby repealed or amended accordingly. Sec. 15. Effectivity. This Act shall take effect fteen (15) days following its publication in two (2) national newspapers of general circulation. [39.2.2] Rule on Ownership of Hidden Treasure under Article 438
If the nder of the hidden treasure is the owner of the land, building or property on which it is found, the treasure shall belong to him.178 If the nder is a third person, he is entitled to one-half of the treasure if he is not a trespasser and the discovery of the treasure is only by chance; otherwise, he shall not be entitled.179 The same rule shall apply even if the land belongs to the State.180 However, if the thing found be of interest to science or the Arts, the State may acquire them by paying just price, whether the nder of the treasure is the owner of the property on which it is found or a third person.181
[39.2.3] Rule on Treasure Hunting
The provisions of Article 438 of the New Civil Code on hidden treasure shall apply only if the discovery of the treasure is by chance. If the search for the hidden treasure is deliberate, otherwise known as treasure hunting, such activity is governed by the following: (1) Republic Act No. 8492, otherwise known as the National Museum Act of 1998, for issuance of permits for the discovery/recovery of hidden treasures, shipwrecks/sunken vessels recovery exclusively for materials of cultural and historical values, such as objects of arts,
Art. 438, 1st par., NCC. Art. 438, 2nd par., NCC. 180 Id. 181 Art. 438, 3rd par., NCC.
178 179
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archaeological artifacts, ecofacts, relics and other materials embodying the cultural and natural heritage of the Filipino nation, as well as those of foreign origin; (2) As to issuance of permits not covered by R.A. No. 8492, the same shall be governed by DENR Administrative Order No. 200204, as amended by DENR AO No. 2004-2003, in relation to Executive Order No. 35, dated September 15, 2001. Pursuant to EO No. 35, the function to issue licenses and permits for treasure hunting and shipwreck recovery has been transferred from the Ofce of the President to the Department of Environment and Natural Resources. In case of treasure hunting for treasures which are not of cultural and historical values, the same shall require the issuance of a permit for treasure hunting or shipwreck/sunken vessel recovery to be issued by the Department of Environment and Natural Resources, whether the treasure hunting is to be undertaken on private lands or government lands182 and subject to the consent of the private landowners or government agencies concerned.183 Upon discovery of valuable items such as monies, things and articles of value, resulting from treasure hunting and shipwreck/ sunken vessel recovery activities, the National Museum shall be called upon to determine whether or not they are considered to have cultural and/or historical value.184 In the event that the items are considered to have historical and cultural value, it shall be turned over to the National Museum for appropriate action. Otherwise, the same shall be turned to an oversight committee created pursuant to DENR AO No. 2002-04 for valuation and disposition.185 All treasures found shall be allowed for export only upon the approval of the National Heritage Commission and other concerned government agencies.186 After an audited report of expenses has been evaluated and approved by the oversight committee, the sharing of the net proceeds shall be as follows: (1) for treasure hunting within public lands 75% to the Government and 25% to the permit holder;
Sec. 2, DENR AO No. 2002-04, as amended. Sec. 7, DENR AO No. 2002-04, as amended. 184 Sec. 12, DENR AO No. 2002-04, as amended. 185 Id. 186 Id.
182 183
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(2)
for treasure hunting in private lands 30% to the Government and 70% to be shared by the permit holder and the landowner; and for shipwreck/sunken vessel recovery 50% to the Government and 50% to the permit holder.
(3)
[39.3] Right to the Airspace [39.3.1] Extent of Landowners Right to Airspace
The air, like the sea, is by its nature incapable of private ownership, except insofar as one may actually use it.187 While the airspace is a public highway, it is obvious that if the landowner is to have full enjoyment of the land, he must have exclusive control of the immediate reaches of the enveloping atmosphere.188 Otherwise buildings could not be erected, trees could not be planted, and even fences could not be run.189 However, when it is said that man owns, or may own, to the heavens, that merely means that no one can acquire a right to the space above him that will limit him in whatever use he can make of it as a part of his enjoyment of the land.190 In other words, the landowner owns at least as much of the space above the ground as he can occupy or use in connection with the land.191 To this extent his title to the air is paramount.192 No other person can acquire any title or exclusive right to any space above him.193 To the extent that ones land includes air space above the land, any unauthorized physical entry into that space is to be considered a trespass, if done by a private person, or a case of taking of private property, if done under governmental authority. Thus, in the case of United States v. Causby,194 it was held that repeated ights at low levels directly over private land may amount to a taking for which just compensation must be paid to the landowner.
Hinman v. Pacic Air Transport, supra. US v. Causby, 328 U.S. 256 (1946). 189 Id. 190 Hinman v. Pacic Air Transport, supra. 191 US v. Causby, supra. 192 Hinman v. Pacic Air Transport, supra. 193 Id. 194 Supra.
187 188
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Hinman v. Pacic Air Transport United States Court of Appeals, Ninth Circuit, 1936 84 F.2d 755 HANEY, Circuit Judge. From decrees sustaining motions to dismiss led by defendants in two suits, appellants appeal and bring for review by this court the rights of a landowner in connection with the ight of aircraft above his land. Appellant led one bill against Pacic Air Transport, an Oregon corporation, and another bill against United Air Lines Transport Corporation, a Delaware corporation, in each of which the allegations are nearly identical. Although two appeals are before the court, briefs led discuss both cases, and therefore we will consider them together. * * * It is * * * alleged that defendants are engaged in the business of operating a commercial airline, and that at all times after the month of May, 1929, defendants daily, repeatedly and upon numerous occasions have disturbed, invaded and trespassed upon the ownership and possession of plaintiffs tract; that at said times defendants have operated aircraft in, across, and through said airspace at altitudes less than 100 feet above the surface; that plaintiffs notied defendants to desist from trespassing on said airspace; and that defendants have disregarded said notice, unlawfully and against the will of plaintiffs, and continue and threaten to continue such trespasses. * * * The prayer asks an injunction restraining the operation of the aircraft through the airspace over plaintiffs property and for $90,000 damages in each of the cases. Appellees contend that it is settled law in California that the owner of land has no property rights in superjacent airspace, either by code enactments or by judicial decrees and that the ad coelum doctrine * * * does not apply in California. We have examined the statutes of California, particularly California Civil Code, 659 and 829, as well as Grandona v. Lovdal, 21 P. 366; Wood v. Moulton, 80 P. 92; and Kafka v. Bozio, 218 P. 753, but we nd nothing therein to negative the ad coelum formula. Furthermore, if we should adopt this formula as being the law, there might be serious doubt as to whether a state statute could change it without running counter to the Fourteenth amendment to the Constitution of the United States. If we could accept and literally construe the ad coelum doctrine, it would simplify the solution of this case; however, we reject that doctrine. We think it is not the law, and that it never was the law. This formula from the center of the earth to the sky was invented at some remote time in the past when the use of space above land actual or conceivable was conned to narrow limits, and simply meant that the owner of the land could use the overlying space to such an extent as he was able, and that no one could ever interfere with that use.
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This formula was never taken literally, but was a gurative phrase to express the full and complete ownership of land and the right to whatever superjacent airspace was necessary or convenient to the enjoyment of the land. In applying a rule of law, or construing a statute or constitutional provision, we cannot shut our eyes to common knowledge, the progress of civilization, or the experience of mankind. A literal construction of this formula will bring about an absurdity. The sky has no denite location. It is that which presents itself to the eye when looking upward; as we approach it, it recedes. There can be no ownership of innity, nor can equity prevent a supposed violation of an abstract conception. The appellants case, then, rests upon the assumption that as owners of the soil they have an absolute and present title to all the space above the earths surface, owned by them, to such a height as is, or may become, useful to the enjoyment of their land. This height, the appellants assert in the bill, is of indenite distance, but not less than 150 feet. * * * This, then, is appellants premise, and upon this proposition they rest their case. Such an inquiry was never pursued in the history of jurisprudence until the occasion is furnished by the common use of vehicles of the air. We believe, and hold, that appellants premise is unsound. The question presented is applied to a new status and little aid can be found in actual precedent. The solution is found in the application of elementary legal principles. The rst and foremost of these principles is that the very essence and origin of the legal right of property is dominion over it. Property must have been reclaimed from the general mass of the earth, and it must be capable by its nature of exclusive possession. Without possession, no right in it can be maintained. The air, like the sea, is by its nature incapable of private ownership, except insofar as one may actually use it. This principle was announced long ago by Justinian. It is in fact the basis upon which practically all of our socalled water codes are based. We own so much of the space above the ground as we can occupy or make use of, in connection with the enjoyment of our land. This right is not xed. It varies with our varying needs and is co-extensive with them. The owner of land owns as much of the space above him as he uses, but only so long as he uses it. All that lies beyond belongs to the world. When it is said that man owns, or may own, to the heavens, that merely means that no one can acquire a right to the space above him that will limit him in whatever use he can make of it as a part of his enjoyment of the land. To this extent his title to the air is paramount. No other person can acquire any title or exclusive right to any space above him.
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Any use of such air or space by others which is injurious to his land, or which constitutes an actual interference with his possession or his benecial use thereof, would be a trespass for which he would have remedy. But any claim of the landowner beyond this cannot nd a precedent in law, nor support in reason. It would be, and is, utterly impracticable and would lead to endless confusion, if the law should uphold attempts of landowners to stake out, or assert claims to denite, unused spaces in the air in order to protect some contemplated future use of it. Such a rule, if adopted, would constitute a departure never before attempted by mankind, and utterly at variance with the reason of the law. If such a rule were conceivable, how will courts protect the various landowners in their varying claims of portions of the sky? How enforce a right of ejectment or restitution? Such a rule is not necessary for the protection of the landowner in any right guaranteed him by the Constitution in the enjoyment of his property. If a right like this were recognized and upheld by the courts, it would cause confusion worse confounded. It is opposed to common sense and to all human experience. We cannot shut our eyes to the practical result of legal recognition of the asserted claims of appellants herein, for it leads to a legal implication to the effect that any use of airspace above the surface owner of land, without his consent would be a trespass either by the operator of an airplane or a radio operator. We will not foist any such chimerical concept of property rights upon the jurisprudence of this country. We now consider the allegation of the bill that appellees airplanes, in landing, glide through the air, within a distance of less than 100 feet to the surface of appellants land, or possibly to a distance within ve feet thereof, at one end of his tract. This presents another question for discussion. Whether such close proximity to appellants land may constitute an impairment of his full enjoyment of the same is a question of fact. If it does, he may be entitled to relief in a proper case. Appellants are not entitled to injunctive relief upon the bill led here, because no facts are alleged with respect to circumstances of appellants use of the premises which will enable this court to infer that any actual or substantial damage will accrue from the acts of the appellees complained of. The case differs from the usual case of enjoining a trespass. Ordinarily, if a trespass is committed upon land, the plaintiff is entitled to at least nominal damages without proving or alleging any actual damage. In the instant case, traversing the airspace above appellants land is not, of itself, a trespass at all, but it is a lawful act unless it is done under circumstances which will cause injury to appellants possession.
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Appellants do not, therefore, in their bill state a case of trespass, unless they allege a case of actual and substantial damage. The bill fails to do this. It merely draws a naked conclusion as to damages without facts or circumstances to support it. It follows that the complaint does not state a case for injunctive relief. * * * The decree of the District Court is afrmed. MATHEWS, Circuit Judge, dissents. UNITED STATES v. CAUSBY Supreme Court of the United States, 1946. 328 U.S. 256, 66 S. Ct. 1062, 90 L. Ed. 1206 Mr. Justice DOUGLAS delivered the opinion of the Court. This is a case of rst impression. The problem presented is whether respondents property was taken within the meaning of the Fifth Amendment by frequent and regular ights of army and navy aircraft over respondents land at low altitudes. The Court of Claims held that there was a taking and entered judgment for respondent, one judge dissenting. 60 F. Supp. 751. The case is here on a petition for a writ of certiorari which we granted because of the importance of the question presented. Respondents own 2.8 acres near an airport outside of Greensboro, North Carolina. It has on it a dwelling house, and also various outbuildings which were mainly used for raising chickens. The end of the airports northwestsoutheast runway is 2,220 feet from respondents barn and 2,275 feet from their house. The path of glide to this runway passes directly over the property which is 100 feet wide and 1,200 feet long. The 30 to 1 safe glide angle1 approved by the Civil Aeronautics Authority passes over this property at 83 feet, which is 67 feet above the house, 63 feet above the barn and 18 feet above the highest tree. The use by the United States of this airport is pursuant to a lease executed in May, 1942, for a term commencing June 1, 1942 and ending June 30, 1942, with a provision for renewals until June 30, 1967, or six months after the end of the national emergency, whichever is the earlier. Various aircraft of the United States use this airport bombers, transports and ghters. The direction of the prevailing wind determines when a particular runway is used. The north-west-southeast runway in question is used about four per cent of the time in taking off and about seven per cent of the time in landing. Since the United States began operations in May, 1942, its four-motored heavy bombers, other planes of the heavier type, and its ghter planes have frequently passed over respondents land buildings in considerable numbers and rather close together. They come close enough at times to appear
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barely to miss the tops of the trees and at times so close to the tops of the trees as to blow the old leaves off. The noise is startling. And at night the glare from the planes brightly lights up the place. As a result of the noise, respondents had to give up their chicken business. As many as six to ten of their chickens were killed in one day by ying into the walls from fright. The total chickens lost in that manner was about 150. Production also fell off. The result was the destruction of the use of the property as a commercial chicken farm. Respondents are frequently deprived of their sleep and the family has become nervous and frightened. Although there have been no airplane accidents on respondents property, there have been several accidents near the airport and close to respondents place. These are the essential facts found by the Court of Claims. On the basis of these facts, it found that respondents property had depreciated in value. It held that the United States had taken an easement over the property on June 1, 1942, and that the value of the property destroyed and the easement taken was $2,000. The United States relies on the Air Commerce Act of 1926, 44 Stat. 568, 49 U.S.C. 171 et seq., 49 U.S.C.A. 171 et seq., as amended by the Civil Aeronautics Act of 1938, 52 Stat. 973, 49 U.S.C. 401 et seq., 49 U. S.C.A. 401 et seq. * * * It is, therefore, argued that since these ights were within the minimum safe altitudes of ight which had been prescribed, they were an exercise of the declared right of travel through the airspace. The United States concludes that when ights are made within the navigable airspace without any physical invasion of the property of the landowners, there has been no taking of property. It says that at most there was merely incidental damage occurring as a consequence of authorized air navigation. It also argues that the landowner does not own super-adjacent airspace which he has not subjected to possession by the erection of structures or other occupancy. Moreover, it is argued that even if the United States took airspace owned by respondents, no compensable damage was shown. Any damages are said to be merely consequential for which no compensation may be obtained under the Fifth Amendment. It is ancient doctrine that at common law ownership of the land extended to the periphery of the universe Cujus est solum ejus est usque ad coelum. But that doctrine has no place in the modern world. The air is a public highway, as Congress has declared. Were that not true, every transcontinental ight would subject the operator to countless trespass suits. Common sense revolts at the idea. To recognize such private claims to the airspace would clog these highways, seriously interfere with their control and development in the public interest, and transfer into private ownership that to which only the public has a just claim. But that general principle does not control the present case. For the United States conceded on oral argument that if the ights over respondents
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property rendered it uninhabitable, there would be a taking compensable under the Fifth Amendment. * * * If, by reason of the frequency and altitude of the ights, respondents could not use this land for any purpose, their loss would be complete. It would be as complete as if the United States had entered upon the surface of the land and taken exclusive possession of it. We agree that in those circumstances there would be a taking. Though it would be only an easement of ight which was taken, that easement, if permanent and not merely temporary, normally would be the equivalent of a fee interest. It would be a denite exercise of complete dominion and control over the surface of the land. The fact that the planes never touched the surface would be as irrelevant as the absence in this day of the feudal livery of seisin on the transfer of real estate. The owners right to possess and exploit the land that is to say, his benecial ownership of it would be destroyed. It would not be a case of incidental damages arising from a legalized nuisance such as was involved in Richards v. Washington Terminal Co., 233 U.S. 546, 34 S. Ct. 654, L.R.A.1915A, 887. In that case property owners whose lands adjoined a railroad line were denied recovery for damages resulting from the noise, vibrations, smoke and the like, incidental to the operations of the trains. In the supposed case the line of ight is over the land. And the land is appropriated as directly and completely as if it were used for the runways themselves. There is no material difference between the supposed case and the present one, except that here enjoyment and use of the land are not completely destroyed. But that does not seem to us to be controlling. The path of glide for airplanes might reduce a valuable factory site to grazing land, an orchard to a vegetable patch, a residential section to a wheat eld. Some value would remain. But the use of the airspace immediately above the land would limit the utility of the land and cause a diminution in its value. * * * The fact that the path of glide taken by the planes was that approved by the Civil Aeronautics Authority does not change the result. The navigable airspace which Congress has placed in the public domain is airspace above the minimum safe altitudes of ight prescribed by the Civil Aeronautics Authority. 49 U.S.C. 180, 49 U.S.C.A. 180. If that agency prescribed 83 feet as the minimum safe altitude, then we would have presented the question of the validity of the regulation. But nothing of the sort has been done. The path of glide governs the method of operating of landing or taking off. The altitude required for that operation is not the minimum safe altitude of ight which is the downward reach of the navigable airspace. The minimum prescribed by the authority is 500 feet during the day and 1000 feet at night for air carriers (Civil Air Regulations, Pt. 61, 61.7400, 61.7401, Code Fed. Reg. Cum. Supp., Tit. 14, ch. 1) and from 300 to 1000 feet for other aircraft depending on the type of plane and the character of the terrain. Id., Pt. 60, 60.350-60.3505, Fed.
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Reg. Cum. Supp., supra. Hence, the ights in question were not within the navigable airspace which Congress placed within the public domain. If any airspace needed for landing or taking off were included, ights which were so close to the land as to render it uninhabitable would be immune. But the United States concedes, as we have said, that in that event there would be a taking. Thus, it is apparent that the path of glide is not the minimum safe altitude of ight within the meaning of the statute. The Civil Aeronautics Authority has, of course, the power to prescribe air trafc rules. But Congress has dened navigable airspace only in terms of one of them the minimum safe altitudes of ight. We have said that the airspace is a public highway. Yet it is obvious that if the landowner is to have full enjoyment of the land, he must have exclusive control of the immediate reaches of the enveloping atmosphere. Otherwise buildings could not be erected, trees could not be planted, and even fences could not be run. The principle is recognized when the law gives a remedy in case overhanging structures are erected on adjoining land. The landowner owns at least as much of the space above the ground as the can occupy or use in connection with the land. See Hinman v. Pacic Air Transport, 9 Cir., 84 F.2d 755. The fact that he does not occupy it in a physical sense by the erection of buildings and the like is not material. As we have said, the ight of airplanes, which skim the surface but do not touch it, is as much an appropriation of the use of the land as a more conventional entry upon it. We would not doubt that if the United States erected an elevated railway over respondents land at the precise altitude where its planes now y, there would be a partial taking, even though none of the supports of the structure rested on the land. The reason is that there would be an intrusion so immediate and direct as to subtract from the owners full enjoyment of the property and to limit his exploitation of it. While the owner does not in any physical manner occupy that stratum of airspace or make use of it in the conventional sense, he does use it in somewhat the same sense that space left between buildings for the purpose of light and air is used. The super-adjacent airspace at this low altitude is so close to the land that continuous invasions of it affect the use of the surface of the land itself. We think that the landowner, as an incident to his ownership, has a claim to it and that invasions of it are in the same category as invasions of the surface. * * * The airplane is part of the modern environment of life, and the inconveniences which it causes are normally not compensable under the Fifth Amendment. The airspace, apart from the immediate reaches above the land, is part of the public domain. We need not determine at this time what those precise limits are. Flights over private land are not a taking, unless they are so low and so frequent as to be a direct and immediate interference with the enjoyment and use of the land. We need not speculate on that phase of the present case. For the ndings of the Court of Claims plainly establish that
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there was a diminution in value of the property and that the frequent, low-level ights were the direct and immediate cause. We agree with the Court of Claims that a servitude has been imposed upon the land. * * * The Court of Claims held, as we have noted, that an easement was taken. But the ndings of fact contain no precise description as to its nature. It is not described in terms of frequency of ight, permissible altitude, or type of airplane. Nor is there a nding as to whether the easement taken was temporary or permanent. Yet an accurate description of the property taken is essential, since that interest vests in the United States. United States v. Cress, supra., 243 U.S. 328, 329, 37 S.Ct. 385, 386, and cases cited. * * * Since on this record it is not clear whether the easement taken is a permanent or a temporary one, it would be premature for us to consider whether the amount of the award made by the Court of Claims was proper. The judgment is reversed and the cause is remanded to the Court of Claims so that it may make the necessary ndings in conformity with this opinion. Reversed. Mr. Justice JACKSON took no part in the consideration or decision of this case. Mr. Justice BLACK, dissenting. The Fifth Amendment provides that private property shall not be taken for public use, without just compensation. The Court holds today that the Government has taken respondents property by repeatedly ying Army bombers directly above respondents land at a height of eighty-three feet where the light and noise from these planes caused respondents to lose sleep and their chickens to be killed. Since the effect of the Courts decision is to limit, by the imposition of relatively absolute Constitutional barriers, possible future adjustments through legislation and regulation which might become necessary with the growth of air transportation, and since in my view the Constitution does not contain such barriers, I dissent. * * * It is inconceivable to me that the Constitution guarantees that the airspace of this Nation needed for air navigation, is owned by the particular persons who happen to own the land beneath to the same degree as they own the surface below. 3 No rigid Constitutional rule, in my judgment, commands that the air must be considered as marked off into separate compartments by imaginary metes and bounds in order to synchronize air ownership with land ownership. * * * Old concepts of private ownership of land should not be introduced into the eld of air regulation. I have no doubt that Congress will, if not handicapped by judicial interpretations of the Constitution, preserve the
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freedom of the air, and at the same time, satisfy the just claims of aggrieved persons. The noise of newer, larger, and more powerful planes may grow louder and louder and disturb people more and more. But the solution of the problems precipitated by these technological advances and new ways of living cannot come about through the application of rigid Constitutional restraints formulated and enforced by the courts. What adjustments may have to be made, only the future can reveal. It seems certain, however, the courts do not possess the techniques or the personnel to consider and act upon the complex combinations of factors entering into the problems. The contribution of courts must be made through the awarding of damages for injuries suffered from the ying of planes, or by the granting of injunctions to prohibit their ying. When these two simple remedial devices are elevated to a Constitutional level under the Fifth Amendment, as the Court today seems to have done, they can stand as obstacles to better adapted techniques that might be offered by experienced experts and accepted by Congress. Todays opinion is, I fear, an opening wedge for an unwarranted judicial interference with the power of Congress to develop solutions for new and vital and national problems. In my opinion this case should be reversed on the ground that there has been no taking in the Constitutional sense.
Mr. Justice BURTON joins in this dissent.

[39.3.2] Limitations Upon Landowners Right to Airspace
The landowners right over the airspace is limited by the following: (1) He is bound by height restrictions annotated on the certicate of title if he acquired the property subject to such restrictions following the principle that contractual obligations between parties have the force of law between them.195 (2) For properties situated near the airport, their owners cannot complain of the reasonable requirements of aerial navigation. They are required to secure a height clearance permit from the Air Transportation Ofce (ATO), which permit is a pre-requisite for the issuance of a building permit. This permit allows the owner to construct the proposed structure height approved by ATO. In addition, building ofcials of local municipalities/provinces implement their own zoning ordinance,
195 Ayala Corporation v. Ray Burton Dev. Corp., G.R. No. 126699, Aug. 7, 1998; see also Ayala Corporation v. Rosa Diana Realty and Development Corp., G.R. No. 134284, Dec. 1, 2000.
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and therefore, may require the property owners to apply for a Height Clearance Permit if the proposed site of the building/structure is covered by any restrictions. (3) For properties far from the airport, they are subject to the provisions of the National Building Code196 and local ordinances. Chapter 2 RIGHT OF ACCESSION GENERAL PROVISIONS
Art. 440. The ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or articially. (353)
40. Accession
[40.1] Denition and Concept
The ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or articially.197 Accession, therefore, is the right of an owner of a thing to the products of said thing as well as to whatever is inseparably attached thereto as an accessory.198 From the provisions of Article 440, it is clear that accession presupposes a previously existing ownership by the owner over the principal, such that it is considered merely as an incident or an attribute of ownership. It is not, therefore, a mode of acquiring ownership but a right included in ownership. At any rate, Article 712 of the New Civil Code which enumerates the seven modes of acquiring ownership (occupation, intellectual creation, law, donation, succession, tradition and prescription) does not consider accession as one of such modes. In addition, the concept of accession is discussed by the Code only in relation to the right of ownership.
R.A. No. 6541. Art. 440, NCC. 198 Sanchez Roman, Vol. II, p. 89.
196 197
PROPERTY, OWNERSHIP, AND ITS MODIFICATION OWNERSHIP Right of Accession General Provisions
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[40.2] Kinds of Accession
Based from the provisions of Article 440, accession is classied into two: (1) accesion discreta; and (2) accesion continua. The rst part of the article denes the concept of accesion discreta or the right of the owner to anything which is produced by his property. The second part of the article, on the other hand, denes the concept of accesion continua or the right of the owner to anything which is incorporated or attached to his property, whether such attachment is through natural or articial causes. Accesion discreta is subdivided into: (1) natural fruits, (2) industrial fruits, and (3) civil fruits. Accesion continua, in turn, may refer to either immovable property or movable property. With regard to immovable property, accesion continua is classied into either industrial accession or natural accession depending on the manner by which the attachment or incorporation takes place. In industrial accession, the incorporation takes place articially; while natural accession takes place through natural means. Industrial accession, in turn, may take the form of either building, planting or sowing. Natural accession, on the other hand, has four forms: (1) alluvion, (2) avulsion; (3) change of course of river; and (4) formation of islands. With respect to movable property, accesion continua may either be: (1) adjunction or conjunction, (2) commixtion or confusion, and (3) specication. Adjunction or conjunction, in turn, may take place by: (1) inclusion (engraftment), (2) soldadura (attachment); (3) tejido (weaving); (4) pintura (painting); or (5) escritura (writing). Section 1. Right of Accession with Respect to What is Produced by Property
Art. 441. To the owner belongs: (1) (2) (3) The natural fruits; The industrial fruits; The civil fruits. (354)
Art. 442. Natural fruits are the spontaneous products of the soil, and the young and other products of animals.
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Industrial fruits are those produced by lands of any kind through cultivation or labor. Civil fruits are the rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income. (355a) Art. 443. He who receives the fruits has the obligation to pay the expenses made by a third person in their production, gathering, and preservation. (356) Art. 444. Only such as are manifest or born are considered as natural or industrial fruits. With respect to animals, it is sufcient that they are in the womb of the mother, although unborn. (357)
41. Accesion Discreta

[41.1] Basic Rule
As dened, accesion discreta is the right of the owner to the products of his property or to the fruits of the same. In our Civil Code, the basic rule on accesion discreta is stated in Article 441, which provides that to the owner belongs: (1) the natural fruits, (2) the industrial fruits, and (3) the civil fruits.
[41.2] Exceptions to the Rule
The rule in Article 441 is not absolute inasmuch as there are cases where the owner is not entitled to the fruits of his property. The exceptions to the rule are the following: (a) in usufruct
It is the essence of usufruct that the usufructuary199 is entitled not only to the enjoyment of the property subject matter thereof but also to its fruits. Thus, Article 566 of the New Civil Code provides: Art. 566. The usufructuary shall be entitled to all the natural, industrial and civil fruits of the property in usufruct. With respect to hidden treasure which may be found on the land or tenement, he shall be considered a stranger.
199
He is the person in whose favor the usufruct was constituted.
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(b) in lease of rural lands In lease of rural land, the lessee is entitled to the natural and industrial fruits of the thing leased while the lessor is entitled to civil fruits in the form of the rent paid by the lessee.200 (c) in antichresis
By the contract of antichresis the creditor acquires the right to receive the fruits of an immovable of his debtor, with the obligation to apply them to the payment of the interest, if owing, and thereafter to the principal of his credit.201 (d) in possession in good faith According to Article 544 of the New Civil Code, a possessor in good faith is entitled to the fruits received by him before his possession is legally interrupted. (e) fruits naturally falling
According to Article 681 of the New Civil Code, fruits naturally falling upon adjacent land belong to the owner of the said land and not to the owner of the tree.
[41.3] Kinds of Fruits
In our Civil Code, fruits are classied into: (1) natural; (2) industrial, and (3) civil. It has been held that the term natural, industrial and civil fruits are highly technical, and are authoritatively dened in Article 442 of the Civil Code so that, therefore, there can be no question as to the meaning which should be given them when they occur in a decree entered by the court.202
[41.3.1] Natural Fruits
There are two kinds of natural fruits,203 namely: (a) the spontaneous products of the soil those that appear without the intervention of human labor, such as the wild fruits in the forest, herbs, and common
Arts. 1654, 1676, par. 2, NCC. Art. 2123, Civil Code. 202 Pamintuan v. Garcia, 39 Phil. 746. 203 Art. 442, par. 1, NCC.
200 201
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grass; and (b) the young and other products of animals, such as milk, hair, wool, horn, hide, eggs, and animals dung or manure. With respect to the natural fruit of the rst kind, it is required that the same must be spontaneous product of the soil. In other words, it is necessary that there must be no human labor which has intervened in its generation. If human labor intervenes in the production of the fruit, the same is classied as an industrial fruit. Trees which grew spontaneously on the soil and adhering thereto are not considered as natural fruits in contemplation of the rst paragraph of Article 442 because they are themselves immovables. Trees may, however, be exceptionally considered as fruits if they are being exploited for an industry.204 In such a case, they are classied as industrial fruits because human labor intervenes. With regard to the natural fruit of the second kind, there may be a situation where the young or offspring is a product of animals belonging to different owners. Note that our Civil Code is silent with respect to the ownership of the young if the male and female parents belonged to different owners. There is no problem if the mating of the parentanimals is agreed upon by their respective owners and they provided for the ownership of the offspring. In the absence of any agreement to settle the ownership of the offspring, the rule is that the young belongs to the owner of the female parent. This is the rule enunciated by the Supreme Court in the early case of US v. Caballero205 in consonance with the express provisions of the Partidas based on the maxim partus sequitur ventrem the offspring follows the condition of the mother.206
[41.3.2] Industrial Fruits
Industrial fruits are those produced by lands of any kind through cultivation or labor.207 Hence, for a fruit to be classied as an industrial fruit, it must satisfy two requirements: (1) it is produced by the land; and (2) it is produced through cultivation or labor. Both the natural fruits of the rst kind and industrial fruits are products of the land. They differ, however, in the manner of their coming into existence. The former is
3 Manresa, 6th ed., p. 191. 25 Phil. 356 (1913). 206 Bouviers Law Dict., 1934 ed., p. 784. 207 Art. 442, par. 2, NCC.
204 205
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produced naturally and spontaneously by the soil; while the latter is produced through cultivation or through human labor. Examples of industrial fruits are the coffee beans in a coffee plantation; mango fruits in a mango plantation; palay, corn or sugar cane produced by farmers. By express provisions of the law, it is required that industrial fruits, like natural fruits of the rst kind, must come from the soil. Therefore, manufactured products such as clothes, jeans, watches and cell phones, although produced through human labor, are not considered industrial fruits.208
[41.3.3] Civil Fruits
Civil fruits, under the Civil Code, refers to rents of building, the price of leases of lands and other property and the amount of perpetual or life annuity or other similar income.209 Civil fruits, therefore, are the income or revenues derived from the property itself. Hence, a dividend, whether in the form of cash or stock, is considered as civil fruit because it is declared out of the prots of a corporation and not out of the capital stock.210 But a bonus which is paid to the owner of a piece of land for undertaking the risk of securing with his property a loan given to a sugar central is not civil fruits of the mortgaged property since it is not income derived from the property itself but a compensation for the risk assumed by the owner.211
[41.4] Existence of Fruits, When Recognized
When does the law recognize the existence of fruits? This question is answered by the provisions of Article 444 of the New Civil Code. With respect to natural and industrial fruits, only those manifest or born are considered as such.212 In relation to the offspring or young of animals, they are deemed existing at the beginning of the maximum period of gestation, this being the surest criterion of their existence in the mothers womb.213 Hence, the offspring is already considered as a natural fruit even during the time that it is inside the womb of its mother
3 Manresa, 6th ed., 191-192. Art. 442, par. 3, NCC. 210 Bachrach v. Seifert, 87 Phil. 483; Orozco v. Araneta, 90 Phil. 399. 211 Bachrach Motor Co. v. Talisay-Silay Milling Co., 56 Phil. 117. 212 Art. 444, par. 1, NCC. 213 3 Manresa, 6th ed., 199, cited in II Caguioa, Civil Code, 1966 ed., 78.
208 209
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so long as the latters pregnancy is already manifest or evident. In the case of plants which produce only a single crop and then perish, they are deemed manifest or existing from the time the seedlings appear on the ground, without waiting for the grains to appear.214 As to plants and trees that live for years and yield periodic fruits, the latter are not deemed existing until they actually appear on the plants and trees.215 42. Production Expenses
[42.1] Situation Contemplated in Article 443
Article 443 of the New Civil Code contemplates a situation where the recipient of the fruits was not the same person who incurred the expenses in connection with its production, gathering and preservation. This may happen, for example, if the property was previously in the possession of a possessor in bad faith and the latter incurred expenses in connection with the production, gathering and preservation of the fruits but subsequently the owner recovered possession of the property and the possessor turned over to the owner such fruits he already gathered. In such a situation, Article 443 provides that the recipient of the fruits has the obligation to pay the expenses made by a third person in their production, gathering and preservation. This rule is but proper in order that no one may unjustly enrich himself at the expense of another.216
[42.2] Applicability of Article 443
Article 443 applies only when the fruits are already harvested and gathered since the article refers to persons who receives the fruits. Hence, the article does not apply to a situation where the fruits are still pending. At the same time, the article refers to a recipient who did not incur the expenses for the production, gathering and preservation of the fruits. This may happen only if the property was previously in the possession of a possessor bad in faith but not if the possessor was in good faith. Under the Civil Code, a possessor in good faith is entitled to the fruits received by him before his possession is legally interrupted.217 Hence, he cannot be compelled by the owner to return whatever fruits
Ibid. Ibid. 216 3 Manresa, 6th ed., 196. 217 Art. 544, par. 1, NCC.
214 215
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he received prior to the interruption of his good faith. On the other hand, the possessor in bad faith is required to reimburse to the legitimate possessor the fruits received by him and those which the legitimate possessor could have received.218 Such being the case, the provisions of Article 443 nds application in a case where the true owner recovers possession of the property from a possessor in bad faith who is required by law to return to the owner not only the fruits he already received but also the fruits which the owner could have received. This is conrmed by the provisions of Article 549 of the New Civil Code which states that while the possessor in bad faith is obligated to reimburse the fruits received by him and those which the legitimate possessor could have received, he is, at the same time, entitled to recover the expenses mentioned in Article 443.
[42.3] Article 443 Does Not Apply To Pending Fruits
As discussed above, Article 443 does not apply to a situation where the fruits are still pending. In a situation where the fruits are still pending (or ungathered) at the time the owner recovers possession from a possessor in bad faith, it is the provisions of Article 449 of the New Civil Code that will apply. Under the provisions of Article 449, the planter or sower in bad faith on the land of another loses what is planted or sown. Except for the necessary expenses incurred for the preservation of the land,219 the planter or sower in bad faith is not entitled to recover any indemnity, including the expenses mentioned in Article 443.
[42.4] When Refundable
In order for the production expenses to be refundable, such expenses must have the following characteristics: (1) that they are dedicated to the annual production and not merely for purposes of improvement; (2) that they be not superuous, excessive or for luxury but rather that they be commensurate with that required by the products.220 If the foregoing requisites are complied with, the same must be refunded by the recipient of the fruits to the one who incurred it irrespective of whether the amount of the expenses far exceed the value of the fruits. This must be the rule because Article 443 does not make any distinction
Art. 549, NCC. Art. 452, NCC. 220 3 Manresa, 6th ed., 196-197, cited in II Caguioa, Civil Code, 1966 ed., 76.
218 219
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and because if the owner himself had made the expenses he would have spent the same amount.221 Section 2. Right of Accession with Respect to Immovable Property
Art. 445. Whatever is built, planted or sown on the land of another and the improvements or repairs made thereon, belong to the owner of the land, subject to the provisions of the following articles. (358) Art. 446. All works, sowing, and planting are presumed made by the owner and at his expense, unless the contrary is proved. (359)
43. Accesion Continua As dened, accesion continua is the right of the owner to anything which is incorporated or attached to his property, whether the attachment is by reason of natural or articial causes.222 As discussed in supra 40.2, with respect to immovable property, accesion continua is classied into either industrial accession or natural accession. In industrial accession, the incorporation is caused by the act of man while natural accession takes place independently of the act of man.
[43.1] Presupposes Absence of Agreement
Accesion continua involves the union of two or more things belonging to different owners in such a manner that they cannot be separated from each other or from one another without causing a substantial injury to any of the things involved. The application of the law on accesion continua presupposes, however, the absence of any agreement, whether express or implied, between or among the owners of the different things involved. If there is such agreement before the attachment or incorporation, the situation shall be governed primarily by the agreement of the parties and secondarily by the pertinent law on the matter not by the law on accesion continua. In other words, the law on accesion continua applies only to situations where there is a controversy as to who shall be entitled to the resulting union of two or
221 222
II Caguioa, Civil Code, 1966 ed., 76. Art. 440, NCC.
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more things belonging to different owners. It is not so applicable where there is no such controversy.
[43.2] Basic Principles Governing Accesion Continua
Accesion continua is based on the following basic principles: (1) That the union or attachment or the incorporation of two or more things belonging to different owners to each other or to one another must be such that they cannot be separated from each other or from one another without causing a substantial physical or juridical injury to any one, to some, or to all of the things involved. If such separation is possible without injury, their respective owners retain their ownership without effects on the others. This principle is shown, for example, in Article 447 of the New Civil Code where the owner of the materials is allowed to demand for the removal of his materials in case the same can be done without injury to the work constructed or without the plantings, constructions or works being destroyed. If separation is indeed possible without injury, there is no accesion continua. Hence, the owner of the materials retains ownership over his property. (2) That the accessory follows the principal (accessio cedit principali). This means that the owner of the principal thing has the right to claim ownership of the accessory thing and not vice versa. This principle is shown, for example, in the provisions of Article 466 the New Civil Code which states that the owner of the principal thing acquires the accessory whenever two movable things belonging to different owners are, without bad faith, united in such a way that they form a single object. (3) That no one shall unjustly enrich himself at the expense of another. In Article 466, for example, even if the owner of the principal thing can appropriate the accessory thing that has been attached or incorporated to his property, he must, nonetheless, pay for its value if no bad faith intervenes on the part of the owner of the accessory thing. (4) That good faith exonerates a person from punitive liability and damages. He who acts in good faith may be held responsible for his act, but he should not be penalized. In Article 447 of the New Civil Code, for example, if the owner of the land made use of the materials of
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another in good faith, he can appropriate the materials upon payment of its value but he is not liable to pay damages. (5) That bad faith subjects a person to damages and other unfavorable consequences. In Articles 449 and 451 of the New Civil Code, for example, the builder in bad faith not only loses what he has built without right to indemnity but is likewise liable to the owner of the land for damages. (6) That bad faith of one party neutralizes the bad faith of the other and, therefore, both should be considered as having acted in good faith. This principle is recognized for example in Article 453 of the New Civil Code which states that if there was bad faith not only on the part of the person who built, planted or sowed on the land of another but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith. A. INDUSTRIAL ACCESSION 44. Industrial Accession
[44.1] Three Forms
Industrial accession may take the form of building, planting or sowing. (1) Building
The term building is a generic term for all architectural work with roof, built for the purpose of being used as mans dwelling, or for ofces, clubs, theaters, etc.223 The term, however, does not refer to partitions, railings, counters, shelves and other xtures made in a building belonging to the owner of the land.224 This is because the Spanish text of the provision uses the word edicar which means to undertake the construction of an edice such as a house, stable or similar structure.225 While one may build a partition, door, window or
223 II Tolentino, Civil Code, 107, cited in Songcuya v. Mr. & Mrs. Lim, CA-G.R. No. 57357, Aug. 31, 2006. 224 II Caguioa, Civil Code, 1966 ed., 83. 225 Id.
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even a chair or desk, it is improper to use the verb edicar to describe the making of such partition, door, window, etc.226 (2) Planting and Sowing
Planting refers to trees, big or small, while sowing refers to crops and plants caused by the scattering or strewing of seeds upon the soil. The distinction between planting and sowing is material in applying the second option available to the landowner in good faith under the provisions of Article 448 of the New Civil Code. In Article 448, the option of compelling the builder or the planter to pay the price of the land is not available against the sower.
[44.2] Building, Planting or Sowing on Ones Own Land
Under the articles of the Civil Code on industrial accession by edication on the principal land (Articles 445 to 456), such accession is limited either to buildings erected on the land of another, or buildings constructed by the owner of the land with materials owned by someone else.227 Nowhere in these articles on industrial accession is there any mention of the case of a landowner building on his own land with materials owned by him.228 The reason for the omission is readily apparent: recourse to the rules on accession is totally unnecessary and inappropriate where the ownership of the land and of the materials used to build thereon are concentrated on one and the same person.229 Even if the law did not provide for accession, the landowner would necessarily own the building, because he has paid for the materials and labor used in constructing it.230 Thus, the Civil Code limits the cases of industrial accession to those involving land and materials belonging to different owners231 for in these cases a controversy arises as to the rights and obligations of the parties to each other or to one another. At any rate, in the absence of proof to the contrary, the law presumes that all works, sowing and planting are made by the owner and
Id., citing Lao Chit v. Security Bank & Trust Co., L-11028, April 17, 1959. Gaboya v. Cui, 38 SCRA 85, 92 (1971). 228 Id. 229 Id. 230 Id. 231 Id.
226 227
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at his expense.232 Hence, the burden of proving that the works, sowing and planting are not made by the landowner at his expense is incumbent upon those who are alleging such fact. Hence, as a rule, whatever is built, planted or sown on the land of another and the improvements or repairs made thereon, belonged to the owner of the land.233 This rule, however, is subject to the provisions of Articles 448 up to 456 upon presentation of proof that the works, sowing or planting is not made by the owner of the land nor made at his expense.
[44.3] Controversial Cases
In general, there are three possible persons involved in industrial accession: (1) the landowner; (2) the builder, planter or sower; and (3) the owner of the materials. As discussed in supra 44.2, if these three persons are merged into one, such that the landowner is at the same time the builder, planter or sower with materials belonging to him, there is no controversy since it is clear that whatever has been built, planted or sown belonged to him. A controversy will arise only if the landowner is not the builder, planter or sower nor the owner of the materials. Hence, there are three possible controversial situations in industrial accession: (1) When the landowner builds, plants or sows on his land but using materials belonging to another; (2) When a person builds, plants or sows on anothers land but he made use of materials belonging to him; and (3) When a person builds, plants or sows on anothers land but he made use of materials belonging to another.
Art. 447. The owner of the land who makes thereon, personally or through another, plantings, constructions or works with the materials of another, shall pay their value; and, if he acted in bad faith, he shall also be obliged to the reparation of damages. The owner of the materials shall have the right to remove them only in case he can do so without injury to the work constructed, or without the plantings, constructions or works being destroyed. However, if the landowner acted in bad faith, the owner of the materials may remove them in any event, with a right to be indemnied for damages. (360a)
232 233
Art. 446, NCC. Art. 445, NCC.
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45. Using Materials Belonging To Another

[45.1] Situation Contemplated in Article 447
Article 447 of the New Civil Code contemplates a situation where the landowner, either personally or through the instrumentality of an agent, makes plantings, constructions or works on his own land but he made use of materials belonging to another person. In such a situation, the following questions may arise: (1) Who can claim the ownership of what has been built, planted or sown? (2) What are the rights and obligations of the landowner and the owner of the materials as against each other? These and other questions are addressed by the provisions of Article 447.
[45.2] Determining the Legal Consequences
The legal effects of the situation contemplated in Article 447 shall depend on the good faith or bad faith of the landowner in making use of the materials belonging to a third person. Note that in this article, the law presumes that the owner of the materials is in good faith because the rights of the parties when the owner of the materials is in bad faith are determined by the provisions of Article 455 of the Civil Code. While Article 455 refers to a situation of building, planting or sowing on anothers land with the materials belonging to another person, there is no reason why the effects of the presence of good faith or bad faith on the part of the owner of the materials should not be applied to the situation contemplated in Article 447. Hence, if Article 447 is interpreted in conjunction with the provisions of Article 455, we will have the following possible scenarios: (1) (2) (3) (4) Both the landowner and the owner of the materials acted in good faith; Both of them acted in bad faith; The owner of the materials acted in good faith while the landowner acted in bad faith; and The owner of the materials acted in bad faith while the landowner acted in good faith.
[45.2.1] Both Acted In Good Faith
As stated earlier, Article 447 presumes that the owner of the materials is in good faith. Hence, where both the landowner and the
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owner of the materials acted in good faith, the legal effects of such a situation are determined by the provisions of Article 447. Applying the provisions of Article 447 and the principles governing accesion continua, the following are the legal effects of a situation where both parties acted in good faith: [i] Since the one responsible for the attachment or incorporation (the landowner) acted in good faith, he is exonerated from punitive liability and damages. [ii] Being the owner of the principal (the land) and following the principle of accesio cedit principali, the land owner is given the right to appropriate what has been built, planted or sown but with the obligation to indemnify the owner for the value of the materials234 following the principle that no person should unjustly enrich himself at the expense of another. Instead of appropriating the materials, can the landowner choose to return the same to its owner? Article 447 grants the right to demand for the removal and return of the materials only to the owner of the materials if such removal can be done without injury to the work constructed or without the plantings, constructions or works being destroyed. Notwithstanding the fact that the same right is not expressly granted to the landowner, it is believed, however, that the landowner may likewise choose to return the materials to its owner if removal is possible without causing injury to the work constructed or without the plantings, constructions or works being destroyed. In such a situation, there is really no accesion continua. As discussed in supra 43.2, there is accesion continua only if the union or attachment or the incorporation of two or more things belonging to different owners to each other or to one another is in such a way that they cannot be separated from each other or from one another without causing substantial physical or juridical injury to any one, to some, or to all of the things involved. There being no accession, the provision of Article 447 limiting the option of the landowner to the payment of the value of the materials does not apply. On the contrary, there being no accession, the owners of the things attached or joined retain ownership over their respective properties.
234
Art. 447, NCC.
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[45.2.2]
Both Acted In Bad Faith
Following the principle that the bad faith of one party is neutralized by the bad faith of the other and, therefore, both should be considered as having acted in good faith, the legal effects discussed in supra 45.2.1 shall likewise apply in the present situation. But what constitutes good faith or bad faith on the part of the landowner and the owner of the materials in the situation contemplated in Article 447? The landowner is considered to have acted in good faith if he honestly believed that the materials were his at the time that he made use of them. If he was aware that he had no right to make use of the materials at the time that he made use of them, he is considered to have acted in bad faith. On the part of the owner of the materials, he is considered to have acted in good faith if he was not aware that his materials were being used by the landowner at the time of the construction, planting or work. He came to know of it only after the materials have already been used by the landowner. If he knew at the time of the construction, planting or work that his materials were being used by another but he did not object thereto, he is considered to have acted in bad faith.
[45.2.3] Landowner In Bad Faith; Owner of the Materials In Good Faith
Again, this situation is governed by the provisions of Article 447. Applying the provisions of Article 447 and the principles governing accesion continua, the following are the legal effects of a situation where the landowner acted in bad faith while the owner of the materials was in good faith: [i] Being in bad faith, the landowner is liable to the owner of the materials for damages.235 [ii] Having acted in bad faith, the landowner shall also suffer the other unfavorable consequences of his act, such that the law grants the owner of the materials the options of either: (1) demanding for the value of the materials, with a right to be indemnied for damages; or (2) demanding for the removal of the materials in any event even
235
Art. 447, NCC.
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if it will cause injury to the land or to the materials with a right to be indemnied for damages.236 [iii] The foregoing is without prejudice to the criminal liability of the landowner for the unlawful taking and use of the materials of another without the latters knowledge and consent.
[45.2.4] Landowner In Good Faith; Owner of the Materials In Bad Faith
This situation is not governed by Article 447 since the latter article presumes that the owner of the materials is in good faith. Instead, what applies, by analogy, are the provisions of Articles 455 and 449 to the effect that the owner of the materials who acted in bad faith loses his materials without any right whatsoever and is furthermore liable to the landowner for damages.
Pacic Farms, Inc. v. Esguerra 30 SCRA 684 (1969) From 1956 to 1957, Carried Lumber Company sold and delivered lumber and construction materials to the Insular Farms, Inc. which the latter used in the construction of six buildings at its compound in Bolinao, Pangasinan. For failure of Insular Farms to pay the full purchase price, Carried Lumber instituted in October 1958 a civil case against Insular Farms for the recovery of the unpaid balance. In 1961, the trial court rendered judgment in favor of Carried Lumber. Insular Farms did not appeal. In 1962, Carried Lumber levied upon six buildings in Bolinao, Pangasinan. At this point, Pacic Farms, Inc. led a third-party claim, asserting ownership over the levied buildings which it had allegedly acquired from Insular Farms by virtue of a deed of absolute sale executed sometime in March 1958. The sheriff proceeded, however, with the public auction and eventually sold the buildings to Carried Lumber as the highest bidder. Thereafter, Pacic Farms led a complaint against Carried Lumber and the sheriff for the nullication of the auction and for damages. The trial court, after trial, rendered judgment annulling the levy and the certicate of sale. Carried Lumber appealed from said judgment alleging, inter alia, that there exists a materialmans lien over the six buildings in its favor. In resolving the controversy, the Supreme Court opted not to rule on the issue of the materialmans lien but applied by analogy the rules of accession, thus
236
Art. 447, NCC.
185
Article 447 of the Civil Code provides: The owner of the land who makes thereon personally or through another, plantings, constructions or works with the materials of another, shall pay their value; and, if he acted in bad faith, he shall also be obliged to the reparation of damages. The owner of the materials shall have the right to remove them only in case he can do so without injury to the work constructed, or without the plantings, constructions or works being destroyed. However, if the landowner acted in bad faith, the owner of the materials may remove them in any event with a right to be indemnied for damages. The above-quoted legal provision contemplates a principal and an accessory, the land being considered the principal, and the plantings, constructions or works, the accessory. The owner of the land who in good faith whether personally or through another makes constructions or works thereon, using materials belonging to somebody else, becomes the owner of the said materials with the obligation however of paying for their value. The owner of the materials, on the other hand, is entitled to remove them, provided no substantial injury is caused to the landowner. Otherwise, he has the right to reimbursement for the value of his materials. Although it does not appear from the records of this case that the land upon which the six buildings were built is owned by the appellee, nevertheless, that the appellee claims that it owns the six buildings constructed out of the lumber and construction materials furnished by the appellant, is indubitable. Therefore, applying Article 447 by analogy, we perforce consider the buildings as the principal and the lumber and construction materials that went into their construction as the accessory. Thus the appellee, if it does own the six buildings, must bear the obligation to pay for the value of the said materials; the appellant which apparently has no desire to remove the materials, and, even if it were minded to do so, cannot remove them without necessarily damaging the bui1dings has the corresponding right to recover the value of the unpaid lumber and construction materials. Well-established in jurisprudence is the rule that compensation should be borne by the person who has been beneted by the accession. No doubt, the appellee beneted from the accession, i.e., from the lumber and materials that went into the construction of the six buildings. It should therefore shoulder the compensation due to the appellant as unpaid furnisher of materials.
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Of course, the character of a buyer in good faith and for value, if really possessed by the appellee, could possibly exonerate it from making compensation. But the appellees stance that it is an innocent purchaser for value and in good faith is open to grave doubt because of certain facts of substantial import (evident from the records) that cannot escape notice.
Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall x the terms thereof. (361a) Art. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity. (362) Art. 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay the price of the land, and the sower the proper rent. (363a) Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder, planter or sower. (n) Art. 452. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses of preservation of the land. (n) Art. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the land of another, but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith. It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part. (364a) Art. 454. When the landowner acted in bad faith and the builder, planter or sower proceeded in good faith, the provisions of Article 447 shall apply. (n)
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46. Building With Ones Own Materials on the Land of Another Articles 448 up to 454 of the New Civil Code contemplate a situation where a person built, planted or sown on the land of another but he made use of materials belonging to him. This is the second of the controversial cases mentioned in supra 44.3. In this situation, there are actually two persons involved: (1) the landowner; and (2) the builder, planter or sower (who is at the same time the owner of the materials). In determining the legal effects of this situation, it is necessary to take into consideration the good faith or bad faith of both parties. Such being the case, there are four possible scenarios: (1) Both the landowner and the builder, planter or sower (who is at the same time the owner of the materials) acted in good faith; Both of them acted in bad faith; The landowner acted in good faith while the builder, planter or sower (who is at the same time the owner of the materials) acted in bad faith; and The landowner acted in bad faith while the builder, planter or sower (who is at the same time the owner of the materials) acted in good faith.
(2) (3)
(4)
47. Both Acted In Good Faith

[47.1] Concept of Good Faith [47.1.1] Good Faith of the Builder, Planter or Sower
Article 448 of the New Civil Code governs the situation where both the landowner and the builder, planter or sower (who is at the same time the owner of the materials) acted in good faith. However, this article applies only when the builder, planter or sower believes he had the right so to build, plant or sow because he thinks he owns the land or believes himself to have a claim of title.237 To be deemed a builder in good faith, it is essential that a person asserts title to the land on which he builds, i.e., it is essential that he be a possessor in concept of
237 Floreza v. Evangelista, 96 SCRA 130, 136 (1980); citing Alburo v. Villanueva, 7 Phil. 277 (1907); Quemuel v. Olaes, 1 SCRA 1159 (1961); Racaza v. Susana Realty, Inc., 18 SCRA 1172 (1966).
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owner and that he be unaware that there exists in his title or mode of acquisition any aw which invalidates it.238 However, as already previously intimated, the concept of builder in good faith or bad faith presupposes ownership in another.239 If a person builds on his own land with his own materials, he is not merely a builder in good faith he is a builder-owner.
Pershing Tan Queto v. CA 148 SCRA 54 (1987) In this case, a parcel of land was acquired by the spouses Juan and Restituta Pombuena from the latters mother through onerous title (sale). Thereafter, Juan led for himself and his co-owner Restituta an application for a Torrens title over the land. Subsequently, a decision was promulgated in the cadastral proceedings pronouncing Juan (married to Restituta) as the owner of the land. Some years after, a contract of lease over the land was entered into between Pershing Tan Queto and Restituta (with the consent of Juan) for a period of ten years. After the expiration of the lease, Juan and Restituta sued Pershing for unlawful detainer. In the meantime, an Original Certicate of Title was issued in the name of Juan (married to Restituta) as a consequence of the cadastral case. During the pendency of the ejectment case, Juan entered into a barter agreement with Pershing whereby the latter became the owner of the leased premises, and the spouses Juan and Restituta in turn became the owners of a parcel of land with improvements previously owned by Pershing. Subsequently, Pershing constructed a concrete building on the property previously owned by Juan and Restituta. The construction of the building was without any objection on the part of Restituta. Later, however, Restituta sued both Juan and Pershing for reconveyance of title over the disputed land, for the annulment of the barter, and for recovery of the land with damages. One of the issues that crop up in the case was whether Pershing is a builder in good faith or in bad faith. The Supreme Court ruled that he is neither a builder in good faith nor a builder in bad faith. The Court explained (2) Was Tan Queto a possessor and builder in good faith or in bad faith? Even assuming that despite registration of the lot as conjugal, Tan Queto nursed the belief that the lot was actually RESTlTUTAs (making him in bad faith), still RESTITUTAs failure to prohibit
238 Mercado v. CA, 162 SCRA 75, 85 (1988); cited in Manotok Realty, Inc. v. Tecson, 164 SCRA 587, 592 (1988). 239 Pershing Tan Queto v. CA, 148 SCRA 54 (1987).
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him from building despite her knowledge that construction was actually being done, makes her also in bad faith. The net resultant of mutual bad faith would entitle TAN QUETO to the rights of a builder in good faith (Art. 448, Civil Code), ergo, reimbursement should be given him if RESTITUTA decides to appropriate the building for herself (Art. 448, Civil Code). However, as already previously intimated, TAN QUETO having bartered his own lot and small house with the questioned lot with JUAN (who has been adverted to by a court decision and by the OCT a conjugal owner) may be said to be the OWNERPOSSESSOR of the lot. Certainly he is not merely a possessor or builder in good faith (this phrase presupposes ownership in another); much less is he a builder in bad faith. He is a builderpossessor (jus possidendi) because he is the OWNER himself. Please note that the Chapter on Possession (jus possessionis, not jus possidendi) in the Civil Code refers to a possessor other than the owner. Please note further that the difference between a builder (or possessor) in good faith and one in bad faith is that the former is NOT AWARE of the defect or aw in his title or mode of acquisition while the latter is AWARE of such defect or aw (Art. 526, Civil Code). But in either case there is a aw or defect. In the case of TAN QUETO there is no such aw or defect because it is he himself (not somebody else) who is the owner of the property. Pleasantville Development Corporation v. CA 253 SCRA 10 (1996) In this case, Edith Robillo purchased from Pleasantville Development Corp. (PDC) a parcel of land designated as Lot 9, Phase II in Pleasantville Subdivision, Bacolod City. In 1975, Eldred Jardinico bought the rights to the lot from Robillo. At that time, lot 9 was vacant. Upon completing payments, Jardinico secured from the Register of Deeds in 1978 title in his name. It was then that he discovered that improvements had been introduced on lot 9 by Wilson Kee, who had taken possession thereof. It appears that in 1974, Kee bought on installment lot 8 of the same subdivision from C.T. Toress Enterprises, Inc. (CTTEI), the exclusive real estate agent of PDC. CCTEI through its employee, accompanied Kees wife to inspect lot 8. Unfortunately, the parcel of land pointed by CCTEIs employee was lot 9. Thereafter, Kee proceeded to construct his residence, a store, an auto repair shop and other improvements on the lot. Is Kee a builder in good faith? The Supreme Court answered in the afrmative. The Court held
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Good faith consists in the belief of the builder that the land he is building on is his and his ignorance of any defect or aw in his title. And as good faith is presumed, petitioner has the burden of proving bad faith on the part of Kee. At that time he built improvements on lot 8, Kee believed that said lot was what he bought from petitioner. He was not aware that the lot delivered to him was not lot 8. Thus, Kees good faith. Petitioner failed to prove otherwise. Baltazar v. Caridad 17 SCRA 460 (1966) In this case, the trial court rendered a decision in a cadastral proceeding awarding Lot No. 8864 to spouses Julio Baltazar and Constancia Valencia as their conjugal partnership property. Said decision having become nal, the corresponding decree was issued on July 12, 1941, and pursuant thereto, said lot was registered in the names of the applicant spouses under Original Certicate of Title No. O-1445. In the meanwhile, Julio Baltazar died. In 1961, his surviving wife and children led a motion in the cadastral case for writ of possession against Silvina Caridad and her daughter, Eduarda Caridad, who had been in possession of the southern portion of Lot No. 8864 since 1939, while the cadastral case involving the lot was pending before the trial court, and before the decision and the corresponding decree issued in 1941. The Caridads refused to remove their houses from the southern portion of Lot No. 8864 insisting that they are builders in good faith and, as such, they are accorded rights under article 448 of the new Civil Code. The houses were built in 1958 and 1959. In debunking the contention of the Caridads, the Court explained Appellants can not be regarded as builders in good faith because they are bound by the 1941 decree of registration that obligated their parents and predecessors-in-interest. Good faith must rest on a colorable right in the builder, beyond a mere stubborn belief in ones title despite judicial adjudication. The fact that in 1959 appellants demolished and replaced their old house with new and bigger ones cannot enervate the rights of the registered owners. Otherwise, the rights of the latter to enjoy full possession of their registered property could be indenitely defeated by an unsuccessful opponent through the simple subterfuge of replacing his old house with a new one from time to time.
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[47.1.2]
A Lessee Is Not A Builder In Good Faith
Article 448 applies only to a case where one builds on land in the belief that he is the owner thereof and it does not apply where ones only interest in the land is that of a lessee under a rental contract.240 As ruled by the Court in Lopez, Inc. v. Phil. and Eastern Trading Co.,241 the principle of possessor in good faith refers only to a party who occupies or possess property in the belief that he is the owner thereof and said good faith ends only when he discovers a aw in his title so as to reasonably advise or inform him that after all he may not be the legal owner of said property. It cannot apply to a lessee because as such lessee he knows that he is not the owner of the leased premises. Neither can he deny the ownership or title of his lessor. A lessee who introduces improvements in the leased premises, does so at his own risk in the sense that he cannot recover their value from the lessor, much less retain the premises until such reimbursement.242 In a plethora of cases,243 the Supreme Court has held that Article 448 of the New Civil Code, in relation to Article 546 of the same Code, which allows full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. It does not apply where ones only interest is that of a lessee under a rental contract; otherwise, it would always be in the power of the tenant to improve his landlord out of his property.244 The law applicable to the lessee who introduced improvement on the leased premises is Article 1678 of the New Civil Code, which provides: Art. 1678. If the lessee makes, in good faith, useful improvements which are suitable to the use for which the lease is intended, without altering the form or substance
Bulacanag v. Francisco, 122 SCRA 498, 502 (1983). 98 Phil. 348. 242 Bulacanag v. Francisco, supra. 243 Alburo v. Villanueva, 7 Phil. 277, 280 (1907) (referring to the provisions of the Old Civil Code); Racaza v. Susana Realty, Inc., supra note 17, at 1177-1178; Bulacanag v. Francisco, Ibid.; Gabrito v. Court of Appeals, 167 SCRA 771, 778-779 (1988); Cabangis v. Court of Appeals, 200 SCRA 414, 419-421 (1991); Heirs of the late Jaime Binuya v. Court of Appeals, 211 SCRA 761, 766 (1992). 244 Geminiano v. CA, 259 SCRA 344 (1996).
240 241
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of the property leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby. He shall not, however, cause any more impairment upon the property leased than is necessary. With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the ornamental objects, provided no damage is caused to the principal thing, and the lessor does not choose to retain them by paying their value at the time the lease is extinguished. This article gives the lessor the option to appropriate the useful improvements by paying one-half of their value, and the lessee cannot compel the lessor to appropriate the improvements and make reimbursement, for the lessees right under the law is to remove the improvements even if the leased premises may suffer damage thereby. But he shall not cause any more damage upon the property than is necessary.245 A lessee, in order to be entitled to one half the value of the improvements introduced by him in the leased premises, or to remove them should the lessor refuse to reimburse the half value thereof, must show that the same were introduced in good faith; are useful; suitable to the use for which the lease is intended without altering the form and substance of the premises.246
Geminiano v. Court of Appeals 259 SCRA 344 (1996) In this case, Lot No. 3765-B-1 was originally owned by the petitioners mother, Paulina Geminiano. On a portion of the said lot stood the petitioners unnished bungalow which they sold in 1978 to Dominador and May Nicolas. Subsequently, the petitioners mother subsequently executed a contract of lease over a 126 square meter portion of the lot, including that portion on which the house stood, in favor of Dominador and Mary Nicolas (private respondents) for a period of seven years commencing on November 15, 1978. The Nicolases then introduced additional improvements and registered the house in their
245 246
Ibid. Imperial Insurance, Inc. v. Simon, 14 SCRA 855.
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names. After the expiration of the lease in 1985, the petitioners mother refused to accept the monthly rentals. It turned out that the lot in question was the subject of a suit, which resulted in its acquisition by one Maria Lee in 1972. In 1982, Lee sold the lot to Lily Salcedo, who in turn sold it in 1984 to the spouses Agustin and Ester Dionisio. In 1992, the Dionisio spouses executed a Deed of Quitclaim over the said property in favor of the petitioners. As such, the lot was registered in the latters names. In 1993, the petitioners led an ejectment case against Mary Nicolas. The issue in this case is whether the lessees were builders in good faith and entitled to reimbursement of the value of the houses and improvements. The Supreme Court ruled in the negative. The Court explained Being mere lessees, the private respondents knew that their occupation of the premises would continue only for the life of the lease. Plainly, they cannot be considered as possessors nor builders in good faith. In a plethora of cases (Alburo v. Villanueva, 7 Phil. 277, 280 [1907] referring to the provisions of the Old Civil Code; Racaza v. Susana Realty, Inc., supra., note 17, at 1177-1178; Bulacanag v. Francisco, 122 SCRA 498, 502 [1983]; Gabrito v. Court of Appeals, 167 SCRA 771, 778 779 [1988]; Cabangis v. Court of Appeals, 200 SCRA 414, 419-421 [1991]; Heirs of the late Jaime Binuya v. Court of Appeals, 211 SCRA 761, 766 [1992]), this Court has held that Article 448 of the Civil Code, in relation to Article 546 of the same Code, which allows full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. It does not apply where ones only interest is that of a lessee under a rental contract; otherwise, it would always be in the power of the tenant to improve his landlord out of his property. Anent the alleged promise of the petitioners to sell the lot occupied by the private respondents house, the same was not substantiated by convincing evidence. Neither the deed of sale over the house nor the contract of lease contained an option in favor of the respondent spouses to purchase the said lot. And even if the petitioners indeed promised to sell, it would not make the private respondents possessors or builders in good faith so as to be covered by the provisions of Article 448 of the Civil Code. The latter cannot raise the mere expectancy of ownership of the aforementioned lot because the alleged promise to sell was not fullled nor its existence even proven. The rst thing that the private respondents
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should have done was to reduce the alleged promise into writing, because under Article 1403 of the Civil Code, an agreement for the sale of real property or an interest therein is unenforceable, unless some note or memorandum thereof be produced. Not having taken any steps in order that the alleged promise to sell may be enforced, the private respondents cannot bank on that promise and profess any claim nor color of title over the lot in question. There is no need to apply by analogy the provisions of Article 448 on indemnity as was done in Pecson v. Court of Appeals (244 SCRA 407 [1995]), because the situation sought to be avoided and which would justify the application of that provision, is not present in this case. Sufce it to say, a state of forced co-ownership would not be created between the petitioners and the private respondents. For, as correctly pointed out by the petitioners, the rights of the private respondents as lessees are governed by Article 1678 of the Civil Code which allows reimbursement to the extent of one-half of the value of the useful improvements. It must be stressed, however, that the right to indemnity under Article 1678 of the Civil Code arises only if the lessor opts to appropriate the improvements. Since the petitioners refused to exercise that option, the private respondents cannot compel them to reimburse the one-half value of the house and improvements. Neither can they retain the premises until reimbursement is made. The private respondents sole right then is to remove the improvements without causing any more impairment upon the property leased than is necessary. Sps. Lacap v. Ong Lee G.R. No. 142131, December 11, 2002 In this case, a certain Facundo mortgaged two parcels of land to Monte de Piedad Savings Bank. In 1981, the spouses Lacap assumed to pay Facundos mortgage obligation to the bank. Due to their failure to pay their obligation to the bank, the latter foreclosed on the mortgage. During the auction sale, the bank emerged as the highest bidder and title passed on to it. The bank, however, allowed the spouses to stay in the premises as lessees paying a monthly rental. The spouses thereafter introduced improvements thereon after relying on the banks assurance that the property would be sold back to them. In 1996, when the spouses tried to pay their monthly rental, the bank refused to accept the payment inasmuch as the property had already been sold to another person. When the spouses offered to buy the property, the bank turned down their offer. Sometime thereafter, the spouses received a letter demanding that they vacate
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the premises because it was already owned by Ong Lee. The spouses instituted a civil case against Ong Lee for cancellation of sale and damages. Ong Lee, on the other hand, led a complaint for unlawful detainer. May the spouses be considered as a builder in good faith pursuant to Article 448 of the Civil Code? The Supreme Court said no. The Court explained In the event that their rst assigned error is not resolved in their favor, the petitioner spouses assert that their right to be indemnied for the improvements they introduced should be based on Article 448 of the Civil Code which provides that: Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreements the courts shall x the terms thereof. Article 546 of the Civil Code provides that builders in good faith are entitled to reimbursement for necessary and useful expenses, with right of retention in both cases. The petitioners insist that they should be treated as builders in good faith inasmuch as they stepped into the shoes of Victor Facundo, the former ownermortgagor, when the latter assigned to them the obligation to pay the bank the balance due on the mortgage. Since then, they occupied the subject property and introduced improvements thereon. They contend that they were not lessees and paid no rentals thereon. We do not think so. Article 528 of the Civil Code provides that possession in good faith continues to subsist until facts exist which show that the possessor is already aware that he wrongfully possesses the thing. Although, in the beginning, the petitioners were made to believe that they had a claim of title over the said property by assuming the mortgage and possessing the subject property, all this changed
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when they started paying monthly rentals to the mortgagee bank after the foreclosure of the said property. We nd this nding of the courts a quo conclusive on us in this petition for review. A conclusive presumption arises from the fact that, during the tenancy relationship, the petitioner spouses admitted the validity of the title of their landlord. This negated their previous claim of title. If, indeed, they believed in good faith they had at least an imperfect title of dominion over the subject premises, they should have tried to prevent the foreclosure and objected to the acquisition of title by the bank. In other words, their supposed belief in good faith of their right of dominion ended when the bank foreclosed and acquired title over the subject premises. Hence, the applicable provision in the instant case is Article 1678 of the Civil Code which provides that: Art. 1678. If the lessee makes, in good faith, useful improvements which are suitable to the use for which the lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby. He shall not, however, cause any more impairment upon the property leased than is necessary. With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the ornamental objects, provided no damage is cause to the principal thing, and the lessor does not choose to retain them by paying their value at the time the lease is extinguished. The petitioner spouses are therefore entitled to be paid only one-half of the value of the useful improvements at the time of the termination of the lease or to have the said improvements removed if the respondent refuses to reimburse them. [47.1.3] As A Rule, Art. 448 Cannot Apply To A Co-Owner
Article 448 of the New Civil Code cannot apply where a co-owner builds, plants or sows on the land owned in common for then he did
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not build, plant or sow upon land that exclusively belongs to another but of which he is a co-owner. The co-owner is not a third person under the circumstances, and the situation is governed by the rules of co-ownership.247 However, when the co-ownership is terminated by a partition and it appears that the house of an erstwhile co-owner has encroached upon a portion pertaining to another co-owner which was however made in good faith, then the provisions of Article 448 should apply to determine the respective rights of the parties.248
Spouses Del Campo v. Abesia 160 SCRA 379 (1988) This case involves a parcel of land co-owned by the plaintiffs and defendants in the proportion of 2/3 and 1/3 each, respectively. An action for partition was led by plaintiffs in the CFI of Cebu. The trial court appointed a commissioner in accordance with the agreement of the parties. The said commissioner conducted a survey, prepared a sketch plan and submitted a report to the court, recommending that the property be divided into two lots: lot 1161-A with an area of 30 square meters for plaintiffs and lot no-1161-B for the defendants with an area of 15 square meters. The houses of plaintiffs and defendants were surveyed and shown on the sketch plan. The house of defendants occupied the portion of lot 1161-A of plaintiffs. The parties manifested their conformity to the report and asked the trial court to nally settle and adjudicate who among the parties should take possession of the 5 square meters of the land in question. The trial court thereafter rendered a decision which states that since Article 448 cannot be applied to a case where one has built, planted or sown on the land owned in common, the defendants should remove and demolish, at their expense, the part of their house which encroached upon the land of the plaintiffs. The defendants appealed from said decision. On appeal, the Supreme Court held that Article 448 of the Civil Code is applicable. The Court explained The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-owner builds, plants or sows on the land owned in common for then he did not build, plant or sow upon land that exclusively belongs to another but of which he is a coowner. The co-owner is not a third person under the circumstances, and the situation is governed by the rules of co-ownership.
247 248
Spouses Del Campo v. Abesia, 160 SCRA 379, 382 (1988). Ignao v. IAC, 193 SCRA 17, 23 (1991); Sps. Del Campo v. Abesia, supra.
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However, when, as in this case, the co-ownership is terminated by the partition and it appears that the house of defendants overlaps or occupies a portion of 5 square meters of the land pertaining to plaintiffs which the defendants obviously built in good faith, then the provisions of Article 448 of the New Civil Code should apply. Manresa and Navarro Amandi agree that the said provision of the Civil Code may apply even when there was co-ownership if good faith has been established. Applying the aforesaid provision of the Civil Code, the plaintiffs have the right to appropriate said portion of the house of defendants upon payment of indemnity to defendants as provided for in Article 546 of the Civil Code. Otherwise, the plaintiffs may oblige the defendants to pay the price of the land occupied by their house. However, if the price asked for is considerably much more than the value of the portion of the house of defendants built thereon, then the latter cannot be obliged to buy the land. The defendants shall then pay the reasonable rent to the plaintiffs upon such terms and conditions that they may agree. In case of disagreement, the trial court shall x the terms thereof. Of course, defendants may demolish or remove the said portion of their house, at their own expense, if they so decide. WHEREFORE, the decision appealed from is hereby MODIFIED by ordering plaintiffs to indemnify defendants for the value of the said portion of the house of defendants in accordance with Article 546 of the Civil Code, if plaintiffs elect to appropriate the same. Otherwise, the defendants shall pay the value of the 5 square meters of land occupied by their house at such price as may be agreed upon with plaintiffs and if its value exceeds the portion of the house that defendants built thereon, the defendants may choose not to buy the land but defendants must pay a reasonable rental for the use of the portion of the land of plaintiffs as may be agreed upon between the parties. In case of disagreement, the rate of rental shall be determined by the trial court. Otherwise, defendants may remove or demolish at their own expense the said portion of their house. Ignao v. IAC 193 SCRA 17 (1991) In this case, Florencio Ignao and his uncles, Juan Ignao and Isidro Ignao, were co-owners of a parcel of land with an area of 534 square meters. Pursuant to an action for partition, the CFI of Cavite in 1975 directed the partition of the
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aforesaid land, allotting 133.5 square meters or 2/8 thereof to Juan and Isidro, and giving the remaining portion with a total area of 266.5 square meters to Florencio. However, no actual partition was effected. In 1978, Florencio instituted a complaint for recovery of possession of real property against Juan and Isidro alleging that the area occupied by the two houses built by Juan and Isidro exceeded the 133.5 square meters previously allotted to them by the trial court. When the property was surveyed upon the agreement of the parties, it was disclosed that the house of Juan occupied 42 square meters while that of Isidro occupied 59 square meters of Florencios land or a total of 101 square meters. The trial court applied article 448 of the Civil Code in resolving the conicting rights of the parties, which decision was afrmed by the Court of Appeals. Florencio appealed to the Supreme Court contending that the CA erred in applying Article 448 of the Civil Code since this article contemplates a situation wherein the land belongs to one person and the thing built, sown or planted belongs to another. In holding that Article 448 applies in this particular case, the Supreme Court explained Whether or not the provisions of Article 448 should apply to a builder in good faith on a property held in common has been resolved in the afrmative in the case of Spouses del Campo v. Abesia (160 SCRA 379 [1988]) wherein the Court ruled that: The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-owner builds, plants or sows on the land owned in common for then he did not build, plant or sow upon land that exclusively belongs to another but of which he is a co-owner. The co-owner is not a third person under the circumstances, and the situation is governed by the rules of co-ownership. However, when, as in this case, the ownership is terminated by the partition and it appears that the home of defendants overlaps or occupies a portion of 5 square meters of the land pertaining to plaintiffs which the defendants obviously built in good faith, then the provisions of Article 448 of the New Civil Code should apply. Manresa and Navarro Amandi agree that the said provision of the Civil Code may apply even when there is a co-ownership if good faith has been established. In other words, when the co-ownership is terminated by a partition and it appears that the house of an erstwhile co-owner has encroached upon a portion pertaining to another co-owner which
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was however made in good faith, then the provisions of Article 448 should apply to determine the respective rights of the parties. Petitioners second assigned error is however well taken. Both the trial court and the Appellate Court erred when they peremptorily adopted the workable solution in the case of Grana v. Court of Appeals (109 Phil. 260), and ordered the owner of the land, petitioner Florencio, to sell to private respondents, Juan and Isidro, the part of the land they intruded upon, thereby depriving petitioner of his right to choose. Such ruling contravened the explicit provisions of Article 448 to the effect that (t)he owner of the land xxx shall have the right to appropriate xxx or to oblige the one who built xxx to pay the price of the land xxx. The law is clear and unambiguous when it confers the right of choice upon the landowner and not upon the builder and the courts. Thus, in Quemuel v. Olaes (1 SCRA 1159 [1961]), the Court categorically ruled that the right to appropriate the works or improvements or to oblige the builder to pay the price of the land belongs to the landowner. As to the third assignment of error, the question on the price to be paid on the land need not be discussed as this would be premature inasmuch as petitioner Florencio has yet to exercise his option as the owner of the land. WHEREFORE, the decision appealed from is hereby MODIFIED as follows: Petitioner Florencio Ignao is directed within thirty (30) days from entry of judgment to exercise his option to either appropriate as his own the portions of the houses of Juan and Isidro Ignao occupying his land upon payment of indemnity in accordance with Articles 546 and 548 of the Civil Code, or sell to private respondents the 101 square meters occupied by them at such price as may be agreed upon. Should the value of the land exceed the value of the portions of the houses that private respondents have erected thereon, private respondents may choose not to buy the land but they must pay reasonable rent for the use of the portion of petitioners land as may be agreed upon by the parties. In case of disagreement, the rate of rental and other terms of the lease shall be determined by the trial court. Otherwise, private respondents may remove or demolish at their own expense the said portions of their houses encroaching upon petitioners land.
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[47.1.4]
Art. 448 Made Applicable Under Peculiar Circumstances
In Sarmiento v. Agana,249 the Supreme Court, deviating from the general rule that Article 448 applies only when a builder builds in the concept of an owner, ruled that the Valentino spouses were builders in good faith in view of the peculiar circumstances under which they constructed their residential house. As far as the couple knew, the land was owned by the husbands mother-in-law who, having stated they could build on the property, could reasonably be expected to later on give them the land. It turned out that the land had been titled in the name of another person. The Supreme Court, however, applied in this case the provisions of Article 448. In Macasaet v. Macasaet,250 the Court also held that the children have the right to be indemnied for the useful improvements constructed in good faith on a lot owned by the parents, applying the provisions of Article 448. In this case, the parents invited their children to occupy the formers lots, out of parental love and desire to foster family solidarity. Because of that invitation, the children constructed their residential house on the property. Unfortunately, an unresolved conict terminated this situation and out of pique, the parents asked the children to vacate the premises. Deviating again from the general rule that Article 448 applies only when a builder builds in the concept of an owner, the Court held that the children were builders in good faith. The Macasaet case is factually similar to Javier v. Javier.251 In that case, the Court deemed the son to be in good faith for building the improvement (the house) with the knowledge and consent of his father, to whom belonged the land upon which it was built. Thus, Article 448 (then Article 361 of the Old Civil Code) was applied. Ordinarily, Article 448 does not apply to a case where the owner of the land is the builder, sower or planter who then later loses ownership of the land by sale or donation,252 for then there can be no question as to good or bad faith on the part of the builder.253 In the case of Pecson v.
129 SCRA 122 (1984). 439 SCRA 625. 251 7 Phil. 261 (1907). 252 Pecson v. CA, 244 SCRA 407 (1995). 253 Colengco v. Regalado, 92 Phil. 387, 395 (1952).
249 250
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Court of Appeals,254 however, the Court applied by analogy the provision of Article 448 on indemnity to a builder who loses ownership of his land when the same was auctioned off by a local government unit for failure of the landowner to pay the real estate taxes.
Pecson v. Court of Appeals 244 SCRA 407 (1995) In this case, Pedro Pecson was the owner of a commercial lot located in Kamias Street, Quezon City, on which he built a four-door two-storey apartment building. For his failure to pay realty taxes, the lot was sold at public auction by the City Treasurer of Quezon City to Mamerto Nepomuceno whoin turn sold it in 1983 to the spouses Juan and Erlinda Nuguid. Pecson challenged the validity of the auction sale. The trial court dismissed the complaint but held that the apartment building was not included in the auction sale. Both parties appealed. The Court of Appeals, on the other hand, afrmed in toto the decision of the trial court. When the decision became nal, the spouses Nuguid led with the trial court a motion for the delivery of possession of the lot and the apartment building citing Article 546 of the Civil Code. The trial court granted the motion. Pecson elevated the matter to the CA in a special civil action for certiorari. The Court of Appeals afrmed in part the order of the trial court citing Article 448 of the Civil Code. Aggrieved by the decision of the CA, Pecson went to the Supreme Court on appeal. The parties agree that Pecson was a builder in good faith of the apartment building on the theory that he constructed it at the time when he was still the owner of the lot. The key issue in this case is the application of Articles 448 and 546 of the Civil Code. The Court held By its clear language, Article 448 refers to a land whose ownership is claimed by two or more parties, one of whom has built some works, or sown or planted something. The building, sowing or planting may have been made in good faith or in bad faith. The rule on good faith laid down in Article 526 of the Civil Code shall be applied in determining whether a builder, sower or planter had acted in good faith. Article 448 does not apply to a case where the owner of the land is the builder, sower, or planter who then later loses ownership of the land by sale or donation. This Court said so in Coleongco v. Regalado (92 Phil. 387, 395 [1952]):
254
Supra.
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Article 361 of the old Civil Code is not applicable in this case, for Regalado constructed the house on his own land before he sold said land to Coleongco. Article 361 applies only in cases where a person constructs a building on the land of another in good or in bad faith, as the may be. It does not apply to a case where a person constructs a building on his own land, for then there can be no question as to good or bad faith on the part of the builder. Elsewise stated, where the true owner himself is the builder of works on his own land, the issue of good faith or bad faith is entirely irrelevant. Thus in strict point of law, Article 448 is not apposite to the case at bar. Nevertheless, we believe that the provision therein on indemnity may be applied by analogy considering that the primary intent of Article 448 is to avoid a state of forced co-ownership and that the parties, including the two courts below, in the main agree that Articles 448 and 546 of the Civil Code are applicable and indemnity for the improvements may be paid although they differ as to the basis of the indemnity. Article 546 does not specically state how the value of the useful improvements should be determined. The respondent court and the private respondents espouse the belief that the cost of construction of the apartment building in 1965, and not its current market value, is sufcient reimbursement for necessary and useful improvements made by the petitioner. This position is, however, not in consonance with previous rulings of this Court in similar cases. In Javier v. Concepcion, Jr. (94 SCRA 212 [1979]), this Court pegged the value of the useful improvements consisting of various fruits, bamboos, a house and camarin made of strong material based on the market value of the said improvements. In Sarmiento v. Agana (129 SCRA 122 [1984]), despite the nding that the useful improvement, a residential house, was built in 1967 at a cost of between Eight thousand pesos (P8,000.00) to Ten thousand pesos (P10,000.00), the landowner was ordered to reimburse the builder in the amount of Forty thousand pesos (P40,000.00), the value of the house at the time of the trial. In the same way, the landowner was required to pay the present value of the house, a useful improvement, in the case of De Guzman v. De la Fuente (55 Phil. 501 [1930]), cited by the petitioner. The objective of Article 546 of the Civil Code is to administer justice between the parties involved. In this regard, this Court had long ago stated in Rivera v. Roman Catholic Archbishop of
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Manila (40 Phil. 717 [1920]) that the said provision was formulated in trying to adjust the rights of the owner and possessor in good faith of a piece of land, to administer complete justice to both of them in such a way as neither one nor the other may enrich himself of that which does not belong to him. Guided by this precept, it is therefore the current market value of the improvements which should be made the basis of reimbursement. A contrary ruling would unjustly enrich the private respondents who would otherwise be allowed to acquire a highly valued income-yielding four unit apartment building for a measly amount. Consequently, the parties should therefore be allowed to adduce evidence on the present market value of the apartment building upon which the trial court should base its nding as to the amount of reimbursement to be paid by the landowner. The trial court also erred in ordering the petitioner to pay monthly rentals equal to the aggregate rentals paid by the lessees of the apartment building. Since the private respondents have opted to appropriate the apartment building, the petitioner is thus entitled to the possession and enjoyment of the apartment building, until he is paid the proper indemnity, as well as of the portion of the lot where the building has been constructed. This is so because the right to retain the improvements while the corresponding indemnity is not paid implies the tenancy or possession in fact of the land on which it is built, planted or sown. The petitioner not having been so paid, he was entitled to retain ownership of the building and, necessarily, the income therefrom. It follows, too, that the Court of Appeals erred not only in upholding the trial courts determination of the indemnity, but also in ordering the petitioner to account for the rentals of the apartment building from 23 June 1993 to 23 September 1993. WHEREFORE, the decision of the Court of Appeals in CAG.R. SP No. 32679 and the Order of 15 November 1993 of the Regional Trial Court, Branch 101, Quezon City in Civil Case No. Q-41470 are hereby SET ASIDE. The case is hereby remanded to the trial court for it to determine the current market value of the apartment building on the lot. For this purpose, the parties shall be allowed to adduce evidence on the current market value of the apartment building. The value so determined shall be forthwith paid by the private respondents to the petitioner otherwise the petitioner shall be restored to the
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possession of the apartment building until payment of the required indemnity. Sarmiento v. Agana 129 SCRA 122 (1984) While Ernesto Valentino was still courting his wife, Rebecca, the latters mother had told him the couple could build a residential house on a certain lot of a subdivision in Paraaque. Assuming that the wifes mother was the owner of the land, Ernesto did construct a house on the said land in 1967 at a cost of P8,000 to P10,000. It turned out that the land had been titled in the name of Mr. & Mrs. Jose Santos, Jr., who in 1974, sold the same to Leonila Sarmiento. In 1975, Sarmiento asked the spouses Valentino to vacate the land. Thereafter, Sarmiento led an ejectment case against the spouses. The Municipal Court found that the spouses Valentino had built the house in good faith and that it had a value of P20,000.00. It then ordered the spouses to vacate after Sarmiento has paid them the mentioned sum of P20,000.00. On appeal, the CFI of Pasay modied the decision pursuant to Article 448 of the Civil Code. Sarmiento was required, within 60 days, to exercise the option to reimburse the spouses Valentino the sum of P40,000.00 as the value of the residential house, or the option to allow them to purchase the land for P25,000.00. Sarmiento did not exercise any of the two options within the indicated period, and Ernesto was then allowed to deposit the sum of P25,000.00 with the court as the purchase price for the land. Subsequently, Sarmiento questioned the action of the court. (1) Are the spouses Valentino builders in good faith? The Supreme Court ruled in the afrmative. The Court said We agree that ERNESTO and wife are builders in good faith in view of the peculiar circumstances under which they had constructed the RESIDENTIAL HOUSE. As far as they knew, the LAND was owned by ERNESTOs mother-in-law who, having stated they could build on the property, could reasonably expected to later on give them the LAND. (2) Can Sarmiento refuse either to pay for the building or to sell the land and insist on the removal of the building? NO. The owner of the building erected in good faith on a land owned by another, is entitled to retain the possession of the land until he is paid the value of his building, under Article 453 (now Article 546). The owner of the land, upon the other hand, has the option, under Article 361 (now Article 448), either to pay for the building or to sell his land to the owner of the building. But he cannot, as respondents did here, refuse both to pay for the building and to sell the land and compel the owner of the building to remove it from the land where it is erected. He is entitled to such remotion only when, after having chosen to sell his land, the other party fails to pay for the same.
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[47.1.5] Art. 448 Can Be Invoked By Successor-In-Interest
In the case of Technogas Philippines Manufacturing Corp. v. Court of Appeals,255 Technogas was allowed to invoke the benets of Article 448 of the New Civil Code, i.e., to compel the landowner to make a choice between two options: (1) to appropriate the building by paying the indemnity required by law, or (2) sell the land to the builder, although it is not the builder of the buildings and/or improvements but merely acquired the same, by sale, from the builder in good faith.
Technogas Philippines Manufacturing Corp. v. CA 268 SCRA 5 (1997) In 1970, Technogas purchased a parcel of land, with all the buildings and improvements including the wall existing thereon, from Pariz Industries, Inc. Eduardo Uy, on the other hand, owns the adjoining parcel of land which he acquired from a certain Enrile Antonio in 1970. In 1971, Uy purchased another lot also adjoining Technogas land from a certain Miguel Rodriguez. It turned out that portions of the buildings and wall bought by Technogas are occupying portions of Uys adjoining land. Upon learning of the encroachment, Technogas offered to buy from Uy that particular portion of Uys land occupied by portions of its buildings and wall. Uy, however, refused the offer. Technogas led an action in court to compel Uy to sell the portions of Uys land occupied by its buildings and wall. (1) Can the benet of Article 448 of the Civil Code be invoked by Technogas even if it is not the builder of the offending structures but merely possessors of the same as buyers? The Supreme Court ruled in the afrmative. Said the Court The question, however, is whether the same benet can be invoked by petitioner who, as earlier stated, is not the builder of the offending structures but possesses them as buyer. We answer such question in the afrmative. In the rst place, there is no sufcient showing that petitioner was aware of the encroachment at the time it acquired the property from Pariz Industries. We agree with the trial court that various factors in evidence adequately show petitioners lack of awareness thereof. In any case, contrary proof has not overthrown the
255
268 SCRA 5 (1997).
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presumption of good faith under Article 527 of the Civil Code, as already stated, taken together with the disputable presumptions of the law on evidence. These presumptions state, under Section 3(a) of Rule 131 of the Rules of Court, that the person is innocent of a crime or wrong; and under Section 3(ff) of Rule 131, that the law has been obeyed. In fact, private respondent Eduardo Uy himself was unaware of such intrusion into his property until after 1971 when he hired a surveyor, following his purchase of another adjoining lot, to survey all his newly acquired lots. Upon being apprised of the encroachment, petitioner immediately offered to buy the area occupied by its building a species of conduct consistent with good faith. In the second place, upon delivery of the property by Pariz Industries, as seller, to the petitioner, as buyer, the latter acquired ownership of the property. Consequently and as earlier discussed, petitioner is deemed to have stepped into the shoes of the seller in regard to all rights of ownership over the immovable sold, including the right to compel the private respondent to exercise either of the two options provided under Article 448 of the Civil Code.256 (2) Uy contends that Technogas cannot be considered in good faith because as landowner, it is presumed to know the metes and bounds of its own property? Is the contention correct? The Supreme Court said no. Bad faith cannot be imputed to a registered owner of land when a part of his building encroaches upon a neighbors land simply because he is supposedly presumed to know the boundaries of his land as prescribed in his certicate of title. Unless one is versed in the science of surveying, no one can determine the precise extent or location of his property by merely examining his paper title.257 (3) May Technogas lose its rights under Article 448 on the basis merely of the fact that some years after acquiring the property in good faith, it learned about and recognized the right of Uy to a portion of the land occupied by its buildings? NO. The supervening awareness of the encroachment by (Technogas) does not militate against its right to claim the status of a builder in good faith. In fact, a judicious reading of said Article 448 will readily show that the landowners exercise of his option can only take place after the builder shall
256 257
At p. 17. At pp. 14-15.
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have come to know of the intrusion in short, when both parties shall have become aware of it. Only then will the occasion for exercising the option arise, for it is only then that both parties will have been aware that a problem exists in regard to their property rights. [47.2] Good Faith of the Landowner
The landowner, on the other hand, is said to have acted in good faith if he did not know or was not aware that something was being built, planted or sown on his land; he learned of it only after the act was done. This is clear from the provisions of the second paragraph of Article 453 of the New Civil Code which states it is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part.
[47.3] Legal Effects Where Both Parties Are In Good Faith
What then are the legal effects of a situation where both the landowner and the builder, planter or sower (who is at the same time the owner of the materials) acted in good faith? Article 448 governs such a situation. Under Article 448, the landowner, as owner of the principal thing, is given two alternative rights: (1) to appropriate as his own the works, sowing or planting after payment to the builder, planter or sower of the necessary and useful expenses, and in the proper cases, expenses for pure luxury or mere pleasure, incurred by the latter; or (2) to oblige the one who built or planted to pay the price of the land, if the value of the land is not considerably more than that of the building or trees, and the one who sowed, the proper rent. The essential fairness of this codal provision has been pointed out by Mme. Justice Ameurna MelencioHerrera, citing Manresa and applicable precedents, in the case of Depra v. Dumlao,258 to wit: Where the builder, planter or sower has acted in good faith, a conict of rights arises between the owners, and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. In view of the impracticality of creating a state of forced co-ownership, the law has provided a just solution by giving the owner of the land the option to acquire the improvements after
258
136 SCRA 475, 483 (1985).
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payment of the proper indemnity, or to oblige the builder or planter to pay for the land and the sower to pay the proper rent. It is the owner of the land who is authorized to exercise the option, because his right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory thing. (3 Manresa 213; Bernardo v. Bataclan, 37 Off. Gaz. 1382; Co Tao v. Chan Chico, G.R. No. 49167, April 30, 1949; Article applied; see Cabral, et al. v. Ibaez [S.C.] 52 Off. Gaz. 217; Marfori v. Velasco, [CA] 52 Off. Gaz. 2050).
[47.3.1] Option Is Given To the Landowner
Under Article 448, the right to choose between appropriating the improvement or selling the land on which the improvement of the builder, planter or sower stands, is given to the owner of the land,259 a rule that accords with the principle of accession, i.e., that the accessory follows the principal.260 The only right given to the builder in good faith is the right to reimbursement for the improvements; the builder cannot compel the owner of the land to sell such land to the former.261 It is the owner of the land who is authorized to exercise the option, because his right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory thing.262
Quemel v. Olaes 1 SCRA 1159 (1961) The Olaes spouses (Angel and Juliana) sued the Quemuel spouses (Alejandro and Ruperta) for recovery of possession of a parcel of land. In their answer, the Quemel spouses admitted plaintiffs ownership but contended that their occupation was gratuitous. In 1954, the trial court ordered the Quemel spouses to return the possession of the land to the Olaes spouses and to pay the latter P20.00 a month from January 1954, until they shall have vacated the premises. The Quemel spouses did not appeal. To forestall the execution of
259 Ballatan v. CA, 304 SCRA 34, 46 (1999), citing Grana and Torralba v. CA, 109 Phil. 260, 263 (1960); Acuna v. Furukawa Plantation Co., 93 Phil. 957, 961 (1953); Aringo v. Arena, 14 Phil. 263, 269 (1909); also in Quemuel v. Olaes, 1 SCRA 1159 (1961). 260 Rosales v. Castelltort, 472 SCRA SCRA 144, 155 (2005). 261 Quemuel v. Olaes, supra., at p. 1163 262 Depra v. Dumlao, 136 SCRA 475, 483 (1985).
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the judgment, the Quemel spouses led a complaint against the Olaes spouses seeking to reduce the monthly rental and to compel the Olaes spouses to sell to them the portion of the lot where their house is erected. The Olaes spouses led a motion to dismiss the complaint on the ground of lack of cause of action and res judicata. The trial court dismissed the complaint. The Quemel spouses appealed to the Court of Appeals. The appeal, however, was certied to the Supreme Court. The plaintiffs (Quemel spouses) claim that their cause of action to compel the Olaes spouses to sell to them the land is based on Article 448 in connection with Article 546 of the New Civil Code. On this issue, the Supreme Court held On the assumption that the allegations of the second cause of action are true, what would be the rights of the parties? The plaintiffs claim that their second cause of action is based on Article 448 in connection with Article 546, of the New Civil Code. A cursory reading of these provisions, however, will show that they are not applicable to plaintiffs case. Under Article 448, the right to appropriate the works or improvements or to oblige the one who built or planted to pay the price of the land belongs to the owner of the land. The only right given to the builder in good faith is the right to reimbursement for the improvements; the builder, cannot compel the owner of the land to sell such land to the former. This is assuming that the plaintiffs are builders in good faith. But the plaintiffs are not builders in good faith. xxx San Diego v. Montesa 6 SCRA 207 (1962) After trial in Civil Case No. 770 for recovery of a parcel of land led by Jose, Maria and Urbano, all surnamed de la Cruz, against Gil San Diego and Runo San Diego, the trial court rendered a decision. Under the dipositive portion of said decision, the defendants and third-party plaintiffs were ordered to vacate the land in question upon payment to them by the plaintiffs and third-party defendants, within thirty days after the decision has become nal, of the sum of P3,500.00. The judgment became nal and executory. The defendants and third-party plaintiffs, who were in possession of the land in litigation, moved to execute the portion of the decision which required the payment of P3,500.00. The plaintiffs opposed the motion on the ground that, as owners, they have the right to exercise the option to either pay the value of improvements or demand reasonable rent if they do not choose to appropriate the building. We nd the petition meritorious. The judgment afrmed by the Court of Appeals, and now nal, explicitly ordains the payment
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by the respondents dela Cruz of the amount of P3,500.00 within 30 days after this decision becomes nal to petitioners San Diego. If it also orders petitioners to vacate only upon the payment, it did so in recognition of the right of retention granted to possessors in good faith by Article 546 of the Civil Code of the Philippines. This provision is expressly made applicable to builders in good faith (Article 448). The right of retention thus granted is merely a security for the enforcement of the possessors right to indemnity for the improvements made by him. As a result, the possessor in good faith, in retaining the land and its improvements pending reimbursement of his useful expenditures, is not bound to pay any rental during the period of retention; otherwise, the value of his security would be impaired (cf. Tufexis v. Chunaco [C.A.], 36 O.G. 2455). Normally, of course, the landowner has the option to either appropriate the improvement or to sell the land to the possessor. This option is no longer open to the respondent landowners because the decision in the former suit limits them to the rst alternative by requiring the petitioners to vacate the land (and surrender the improvements) upon payment of P3,500.00. Evidently, the Courts of First Instance and of Appeals opined that the respondents suit to recover the property was an exercise of their right to choose to appropriate the improvements and pay the indemnity xed by law. The respondents acquiesced in this view, since they did not ask for a modication of the judgment, and allowed it to become nal. Consequently, they can no longer insist on selecting another alternative; nor can they be heard now to urge that the value of the indemnity, set at P3,500.00, is exorbitant, for the same reason that the judgment xing that amount is no longer subject to alteration. [47.3.2] Landowner Cannot Refuse To Exercise Either Option
Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive.263 He must choose one.264 Hence, the landowner cannot refuse to exercise either option and compel instead the owner of the building or improvement to remove it from the land.265 The remedy
263
Rosales v. Castelltort, 472 SCRA 144 citing PNB v. De Jesus, 411 SCRA 557, 560
(2003). PNB v. De Jesus, supra. Id., Technogas Philippines Manufacturing Corp. v. CA, 268 SCRA 5, 17 (1997), citing Ignacio v. Hilario, 76 Phil. 605 (1946) and Sarmiento v. Agana, 129 SCRA 122 (1984).
264 265
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of remotion is available only if and when the owner of the land chooses to compel the builder to buy the land at a reasonable price but the latter fails to pay such price.266 In a situation where the landowner is refusing to exercise any of the options granted him under Article 448, the builder in good faith can, under the same Article, compel the landowner to make a choice between appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land.267
Technogas Philippines Manufacturing Corp. v. CA 268 SCRA 5 (1997) In 1970, Technogas purchased a parcel of land, with all the buildings and improvements including the wall existing thereon, from Pariz Industries, Inc. Eduardo Uy, on the other hand, owns the adjoining parcel of land which he acquired from a certain Enrile Antonio in 1970. In 1971, Uy purchased another lot also adjoining Technogas land from a certain Miguel Rodriguez. It turned out that portions of the buildings and wall bought by Technogas are occupying portions of Uys adjoining land. Upon learning of the encroachment, Technogas offered to buy from Uy that particular portion of Uys land occupied by portions of its buildings and wall. Uy, however, refused the offer. Technogas led an action in court to compel Uy to sell the portions of Uys land occupied by its buildings and wall. In resolving the respective rights and obligations of the parties, the Supreme Court held What then is the applicable provision in this case which private respondent may invoke as his remedy: Article 448 or Article 450 of the Civil Code? In view of the good faith of both petitioner (Technogas) and private respondent (Uy), their rights and obligations are to be governed by Art. 448. The essential fairness of this codal provision has been pointed out by Mme. Justice Ameurna MelencioHerrera, citing Manresa and applicable precedents, in the case of Depra v. Dumlao (136 SCRA 475, 483 [1985]) to wit: Where the builder, planter or sower has acted in good faith, a conict of rights arises between the owners, and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. In view of the impracticality of creating a state of forced co-ownership, the law has provided a just
266 267
Technogas Philippines Manufacturing Corp. v. CA, supra. PNB v. De Jesus, supra.
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solution by giving the owner of the land the option to acquire the improvements after payment of the proper indemnity, or to oblige the builder or planter to pay for the land and the sower to pay the proper rent. It is the owner of the land who is authorized to exercise the option, because his right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory thing. (3 Manresa 213; Bernardo v. Bataclan, 37 Off. Gaz. 1382; Co Tao v. Chan Chico, G.R. No. 49167, April 30, 1949; Article applied; see Cabral, et al. v. Ibaez [S.C.] 52 Off. Gaz. 217; Marfori v. Velasco, [CA] 52 Off. Gaz. 2050). The private respondents insistence on the removal of the encroaching structures as the proper remedy, which respondent Court sustained in its assailed Decisions, is thus legally awed. This is not one of the remedies bestowed upon him by law. It would be available only if and when he chooses to compel the petitioner to buy the land at a reasonable price but the latter fails to pay such price. (Ignacio v. Hilario, supra.) This has not taken place. Hence, his options are limited to: (1) appropriating the encroaching portion of petitioners building after payment of proper indemnity, or (2) obliging the latter to buy the lot occupied by the structure. He cannot exercise a remedy of his own liking. Neither is petitioners prayer that private respondent be ordered to sell the land the proper remedy. While that was dubbed as the more workable solution in Grana and Torralba v. The Court of Appeals, et al. (109 Phil. 260, 264 [1960]), it was not the relief granted in that case as the landowners were directed to exercise within 30 days from this decision their option to either buy the portion of the petitioners house on their land or sell to said petitioners the portion of their land on which it stand. Moreover, in Grana and Torralba, the area involved was only 87 square meters while this case involves 520 square meters. In line with the case of Depra v. Dumlao, this case will have to be remanded to the trial court for further proceedings to fully implement the mandate of Art. 448. It is a rule of procedure for the Supreme Court to strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of future litigation. Petitioner, however, must also pay the rent for the property occupied by its building as prescribed by respondent Court from October 4, 1979, but only up to the date private respondent serves notice of its option upon petitioner and the trial court; that is, if such option is for private respondent to appropriate the encroaching
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structure. In such event, petitioner would have a right of retention which negates the obligation to pay rent. The rent should however continue if the option chosen is compulsory sale, but only up to the actual transfer of ownership. The award of attorneys fees by respondent Court against petitioner is unwarranted since the action appears to have been led in good faith. Besides, there should be no penalty on the right to litigate. WHEREFORE, premises considered, the petition is hereby GRANTED and the assailed Decision and the Amended Decision are REVERSED and SET ASIDE. In accordance with the case of Depra v. Dumlao, this case is REMANDED to the Regional Trial Court of Pasay City, Branch 117, for further proceedings consistent with Articles 448 and 546 of the Civil Code, as follows: The trial court shall determine: a) the present fair price of private respondents 520 square meter area of land; b) the increase in value (plus value) which the said area of 520 square meters may have acquired by reason of the existence of the portion of the building on the area; c) the fair market value of the encroaching portion of the building; and d) whether the value of said area of land is considerably more than the fair market value of the portion of the building thereon. 2. After said amounts shall have been determined by competent evidence, the regional trial court shall render judgment as follows: a) The private respondent shall be granted a period of fteen (15) days within which to exercise his option under the law (Article 448, Civil Code), whether to appropriate the portion of the building as his own by paying to petitioner its fair market value, or to oblige petitioner to pay the price of said area. The amounts to be respectively paid by petitioner and private respondent, in accordance with the option thus exercised by written notice of the other party and to the court, shall be paid by the obligor within fteen (15) days from such notice of the option by tendering the amount to the trial court in favor of the party entitled to receive it;
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b) If private respondent exercises the option to oblige petitioner to pay the price of the land but the latter rejects such purchase because, as found by the trial court, the value of the land is considerably more than that of the portion of the building, petitioner shall give written notice of such rejection to private respondent and to the trial court within fteen (15) days from notice of private respondents option to sell the land. In that event, the parties shall be given a period of fteen (15) days from such notice of rejection within which to agree upon the terms of the lease, and give the trial court formal written notice of the agreement and its provisos. If no agreement is reached by the parties, the trial court, within fteen (15) days from and after the termination of the said period xed for negotiation, shall then x the terms of the lease provided that the monthly rental to be xed by the Court shall not be less than Two thousand pesos (P2,000.00) per month, payable within the rst ve (5) days of each calendar month. The period for the forced lease shall not be more than two (2) years, counted from the nality of the judgment, considering the long period of time since 1970 that petitioner has occupied the subject area. The rental thus xed shall be increased by ten percent (10%) for the second year of the forced lease. Petitioner shall not make any further constructions or improvements on the building. Upon expiration of the two-year period, or upon default by petitioner in the payment of rentals for two (2) consecutive months, private respondent shall be entitled to terminate the forced lease, to recover his land, and to have the portion of the building removed by petitioner or at latters expense. The rentals herein provided shall be tendered by petitioner to the trial court for payment to private respondent, and such tender shall constitute evidence of whether or not compliance was made within the period xed by the said court. c) In any event, petitioner shall pay private respondent an amount computed at Two thousand pesos (P2,000.00) per month as reasonable compensation for the occupancy of private respondents land for the period counted from October 4, 1979, up to the date private respondent serves notice of its option to appropriate the encroaching structures; otherwise up to the actual transfer of ownership to petitioner or, in case a forced lease has to be imposed, up to the commencement date of the forced lease referred to in the preceding paragraph;
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d) The periods to be xed by the trial court in its decision shall be non-extendible, and upon failure of the party obliged to tender to the trial court the amount due to the obligee, the party entitled to such payment shall be entitled to an order of execution for the enforcement of payment of the amount due and for compliance with such other acts as maybe required by the prestation due the obligee. PNB v. De Jesus 411 SCRA 557 (2003) Petitioner Philippine National Bank disputes the decision handed down by the Court of Appeals promulgated on 23 March 2001 in CA-G.R. CV No. 56001, entitled Generoso De Jesus, represented by his Attorney-in-Fact, Christian De Jesus, versus Philippine National Bank. The assailed decision has afrmed the judgment rendered by the Regional Trial Court, Branch 44, of Mamburao, Occidental Mindoro, declaring respondent Generoso de Jesus as being the true and lawful owner of the 124-square-meter portion of the land covered by Transfer Certicate of Title (TCT) No. T-17197 and ordering petitioner bank to vacate the premises, to deliver possession thereof to respondent, and to remove the improvement thereon. It would appear that on 10 June 1995, respondent led a complaint against petitioner before the Regional Trial Court of Occidental Mindoro for recovery of ownership and possession, with damages, over the questioned property. In his complaint, respondent stated that he had acquired a parcel of land situated in Mamburao, Occidental Mindoro, with an area of 1,144 square meters covered by TCT No. T-17197, and that on 26 March 1993, he had caused a verication survey of the property and discovered that the northern portion of the lot was being encroached upon by a building of petitioner to the extent of 124 square meters. Despite two letters of demand sent by respondent, petitioner failed and refused to vacate the area. Petitioner, in its answer, asserted that when it acquired the lot and the building sometime in 1981 from then Mayor Bienvenido Ignacio, the encroachment already was in existence and to remedy the situation, Mayor Ignacio offered to sell the area in question (which then also belonged to Ignacio) to petitioner at P100.00 per square meter which offer the latter claimed to have accepted. The sale, however, did not materialize when, without the knowledge and consent of petitioner, Mayor Ignacio later mortgaged the lot to the Development Bank of the Philippines. The trial court decided the case in favor of respondent declaring him to be the rightful owner of the disputed 124-square-meter portion of the lot and
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ordering petitioner to surrender possession of the property to respondent and to cause, at its expense, the removal of any improvement thereon. The Court of Appeals, on appeal, sustained the trial court but it ordered to be deleted the award to respondent of attorneys fees, as well as moral and exemplary damages, and litigation expenses. Petitioner went to this Court, via a petition for review, after the appellate court had denied the banks motion for reconsideration, here now contending that 1. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN ADJUDGING PNB A BUILDER IN BAD FAITH OVER THE ENCROACHED PROPERTY IN QUESTION; 2. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN NOT APPLYING IN FAVOR OF PNB THE PROVISION OF ARTICLE 448 OF THE CIVIL CODE AND THE RULING IN TECNOGAS PHILIPPINES MANUFACTURING CORP. V. COURT OF APPEALS, G.R. No. 108894, February 10, 1997, 268 SCRA 7. The Regional Trial Court and the Court of Appeals have both rejected the idea that petitioner can be considered a builder in good faith. In the context that such term is used in particular reference to Article 448, et seq., of the Civil Code, a builder in good faith is one who, not being the owner of the land, builds on that land believing himself to be its owner and unaware of any defect in his title or mode of acquisition. The various provisions of the Civil Code, pertinent to the subject, read: Article 448. The owner of the land on which anything has been built, sown, or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such a case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall x the terms thereof. Article 449. He who builds, plants, or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity.
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Article 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay the price of the land, and the sower the proper rent. A builder in good faith can, under the foregoing provisions, compel the landowner to make a choice between appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land. The choice belongs to the owner of the land, a rule that accords with the principle of accession, i.e., that the accessory follows the principal and not the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. He much choose one. He cannot, for instance, compel the owner of the building to instead remove it from the land. In order, however, that the builder can invoke that accruing benet and enjoy his corresponding right to demand that a choice be made by the landowner, he should be able to prove good faith on his part. Good faith, here understood, is an intangible and abstract quality with no technical meaning or statutory denition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage. An individuals personal good faith is a concept of his own mind and, therefore, may not conclusively be determined by his protestations alone. It implies honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry. The essence of good faith lies in an honest belief in the validity of ones right, ignorance of a superior claim, and absence of intention to overreach another. Applied to possession, one is considered in good faith if he is not aware that there exists in his title or mode of acquisition any aw which invalidates it. Given the ndings of both the trial court and the appellate court, it should be evident enough that petitioner would fall much too short from its claim of good faith. Evidently, petitioner was quite aware, and indeed advised, prior to its acquisition of the land and building from Ignacio that a part of the building sold to it stood on the land not covered by the land conveyed to it. Equally signicant is the fact that the building, constructed on the land by Ignacio, has in actuality been part of the property transferred to petitioner. Article 448, of the Civil Code refers to a piece of land whose ownership is claimed by two or more parties, one of whom has built some works (or sown or planted something) and not to a case where the owner of the land is the builder, sower, or planter who then later loses ownership of the land by sale or otherwise
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for, elsewise stated, where the true owner himself is the builder of works on his own land, the issue of good faith or bad faith is entirely irrelevant. In ne, petitioner is not in a valid position to invoke the provisions of Article 448 of the Civil Code. The Court commiserates with petitioner in its present predicament; upon the other hand, respondent, too, is entitled to his rights under the law, particularly after having long been deprived of the enjoyment of his property. Nevertheless, the Court expresses hope that the parties will still be able to come up with an arrangement that can be mutually suitable and acceptable to them. WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 56001 is AFFIRMED. No costs. SO ORDERED. [47.4] Option to Appropriate [47.4.1] What Indemnity Consists Of
If the landowner chooses to acquire the building, he must pay the builder the indemnities provided for in Articles 546 and 548 of the New Civil Code.268 In short, the landowner must pay the necessary and useful expenses, and in the proper case, expenses for pure luxury or mere pleasure.269
[47.4.2] Basis of Indemnity
What shall be the basis of the indemnity to be paid by the landowner? In Javier v. Concepcion, Jr.,270 the Supreme Court pegged the value of the useful improvements consisting of various fruits, bamboos, a house and camarin made of strong materials based on the market value of the said improvements. In Sarmiento v. Agana,271 despite the nding that the useful improvement, a residential house, was built in 1967 at a cost of between Eight thousand pesos (P8,000.00) to Ten thousand pesos (P10,000.00), the landowner was ordered to reimburse the builder in the amount of Forty thousand pesos (P40,000.00), the value of the house at the time of the trial. In the same way, the landowner was required to
Art. 448, Civil Code. Ballatan v. CA, supra, at p. 46. 270 94 SCRA 212 (1979). 271 Supra.
268 269
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pay the present value of the house, a useful improvement, in the case of De Guzman v. Dela Fuente.272 In Pecson v. Court of Appeals,273 the Supreme Court categorically held that it is the current market value of the improvements which should be made the basis of reimbursement. The Court explained The objective of Article 546 of the Civil Code is to administer justice between the parties involved. In this regard, this Court had long ago stated in Rivera v. Roman Catholic Archbishop of Manila (40 Phil. 717 [1920]) that the said provision was formulated in trying to adjust the rights of the owner and possessor in good faith of a piece of land, to administer complete justice to both of them in such a way as neither one nor the other may enrich himself of that which does not belong to him. Guided by this precept, it is therefore the current market value of the improvements which should be made the basis of reimbursement. A contrary ruling would unjustly enrich the private respondents who would otherwise be allowed to acquire a highly valued income-yielding four unit apartment building for a measly amount. Consequently, the parties should therefore be allowed to adduce evidence on the present market value of the apartment building upon which the trial court should base its nding as to the amount of reimbursement to be paid by the landowner.274
[47.4.3] Pending Reimbursement, Builder Has Right of Retention
In addition to the right of the builder in good faith to be paid the value of his improvement, Article 546 of the New Civil Code gives him the corollary right of retention of the property until he is indemnied by the owner of the land.275 The builder in good faith may not, therefore, be required to pay rentals.276 This is so because the right to retain the improvements while the corresponding indemnity is not
55 Phil. 501 (1930). Supra, at p. 416. 274 At p. 416. 275 Filipinas Colleges, Inc. v. Garcia Timbang, et al., 106 Phil. 247, 253 (1959). 276 Miranda v. Fadullon, 97 Phil. 801, 806 (1955).
272 273
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paid implies the tenancy or possession in fact of the land on which it is built, planted or sown.277 However, Article 448 of the New Civil Code, in relation to Article 546, which provides for full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on a land in the belief that he is the owner thereof. It does not apply to a mere lessee, otherwise, it would always be in his power to improve his landlord out of the latters property.278 While the law aims to concentrate in one person the ownership of the land and the improvements thereon in view of the impracticability of creating a state of forced co-ownership, it guards against unjust enrichment insofar as the good faith builders improvements are concerned.279 The right of retention is considered as one of the measures devised by the law for the protection of builders in good faith.280 Its object is to guarantee full and prompt reimbursement as it permits the actual possessor to remain in possession while he has not been reimbursed (by the person who defeated him in the case for possession of the property) for those necessary expenses and useful improvements made by him on the things possessed.281 Accordingly, a builder in good faith cannot be compelled to pay rentals during the period of retention282 nor be disturbed in his possession by ordering him to vacate. In addition, the owner of the land is prohibited from offsetting or compensating the necessary and useful expenses with the fruits received by the builderpossessor in good faith.283 Otherwise, the security provided by law would be impaired. This is so because the right to the expenses and the right to the fruits both pertain to the possessor, making compensation juridically impossible; and one cannot be used to reduce the other.284
Pecson v. CA, supra, at p. 416. Chua v. CA, 301 SCRA 356, 364 (1999). 279 Nuguid v. CA, 452 SCRA 243, 252 (2005), citing Ortiz v. Kayanan, 92 SCRA 146, 159
277 278
(1979). Id. Id. 282 Id., citing San Diego v. Hon. Montesa, 6 SCRA 208, 210 (1962). 283 Id. 284 Id.
280 281
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[47.4.4]
Time of Transfer of Ownership
In Bataclan v. CFI,285 the Supreme Court ruled that the ownership of the building does not pass to the landowner until after the payments mentioned under Articles 546 and 548 has been given to the builder.
[47.5] Option To Sell the Land [47.5.1] Option To Compel Builder or Planter To Buy the Land
If the landowner elected to compel the builder or planter to pay the price of the land, then said builder or planter must do so, unless the value of land is considerably more than that of the building or trees, in which case, the builder or planter must pay reasonable rent if the landowner does not choose to appropriate the building or trees.286 If the parties cannot come to terms over the conditions of the lease, the courts must x the terms thereof.287 Note that this option is available only against the builder or planter because with respect to the sower, the landowner can only compel him to pay the proper rent,288 in case the landowner does not choose to appropriate the crops.
[47.5.2] Remedy If Builder or Planter Refuses To Pay
In the event the builder or the planter refuses to pay the price of the land (on the assumption that said price is not considerably more than the value of the building or trees), will the landowner automatically become the owner of the improvements without paying any indemnity? This question was answered in the negative by the Supreme Court in the case of Filipinas Colleges, Inc. v. Garcia Timbang, et al.,289 where the Court held x x x. There is nothing in the language of these two articles, 448 and 546, which would justify the conclusion of appellants that, upon the failure of the builder to pay the value of the land, when such is demanded by the landowner, the latter becomes automatically the owner of the improvement
61 Phil. 428. Art. 448, Civil Code. 287 Ibid. 288 Art. 448, Civil Code. 289 106 Phil. 247 (1959).
285 286
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under Article 445. The case of Bernardo v. Bataclan, 66 Phil. 590 cited by appellants is no authority for this conclusion. Although it is true it was declared therein that in the event of the failure of the builder to pay the land, after the owner thereof has chosen this alternative, the builders right of retention provided in Article 546 is lost, nevertheless there was nothing said that as a consequence thereof, the builder loses entirely all rights over his own building. x x x290 What then is the recourse or remedy left to the parties in such eventuality where the builder fails to pay the value of the land? While the Code is silent on this point, guidance may be derived from the decisions of the Supreme Court in the cases of Miranda v. Fadullon,291 Ignacio v. Hilario,292 and Bernardo v. Bataclan.293 In Miranda v. Fadullon, supra, the Court suggested xxx A builder in good faith may not be required to pay rentals. He has a right to retain the land on which he has built in good faith until he is reimbursed the expenses incurred by him. Possibly he might be required to pay rental only when the owner of the land chooses not to appropriate the improvement and requires the builder in good faith to pay for the land, but that the builder is unwilling or unable to buy the land, and then they decide to leave things as they are and assume the relation of lessor and lessee, and should they disagree as to the amount of the rental then they can go to the court to x that amount. xxx.294 Note, however, that in this situation a forced lease may not be resorted to since such remedy is available only in situations where the landowner cannot oblige the builder or planter to pay the price of the land because its value is considerably more than that of the building or trees. But if the landowner can compel the builder or planter to pay the price of the land because its value is not considerably more than that of
At p. 253. 97 Phil. 801 (1955). 292 76 Phil. 605 (1946). 293 66 Phil. 590. 294 At p. 806, cited in Filipinas Colleges, Inc. v. Garcia Timbang, et al., at pp. 253-254.
290 291
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the building or trees and the builder or planter fails to pay such price, the parties may agree to assume the relation of lessor and lessee but they must do so voluntarily. Should the parties do not agree to leave things as they are and to assume the relation of lessor and lessee, another remedy is suggested in the case of Ignacio v. Hilario, supra, wherein the Court held that the owner of the land is entitled to have the improvement removed when after having chosen to sell his land to the other party, i.e., the builder in good faith, fails to pay for the same.295 In this situation, the builders right of retention provided in Article 546 is lost.296 A further remedy is indicated in the case of Bernardo v. Bataclan, supra, where the Court approved the sale of the land and improvement in a public auction applying the proceeds thereof rst to the payment of the value of the land and the excess, if any, was ordered to be delivered to the owner of the house in payment thereof.297
[47.5.3] Basis in Determining Price of the Land
In Ballatan v. Court of Appeals,298 it was ruled that in the event the landowner elects to sell the land to the builder in good faith, the price must be xed at the prevailing market value at the time of payment. In the event of the failure of the builder to pay the land, after the owner thereof has chosen this alternative, the builders right of retention provided in Article 546 is also lost.299
Ballatan v. CA 304 SCRA 37 (1999) In this case, the parties are owners of adjacent lots lots 24, 25, 26 and 27. Lot 24 is co-owned by Eden Ballatan and spouses Betty Martinez and Chong Chy Ling. Lots 25 and 26 are owned by Gonzalo Go, Sr. while lot 27 is owned by Li Ching Yao. Li Ching Yao built his house on his lot before any of the parties did. He constructed his house in 1982. Li Ching Yao was not aware that when he built his house a portion thereof encroached on Gos adjoining
See Filipinas Colleges, Inc. v. Garcia Timbang, et al., at p. 254. See Bernardo v. Bataclan, supra. 297 See Filipinas Colleges, Inc. v. Garcia Timbang, et al., at p. 254. 298 304 SCRA 37 (1999). 299 Bernardo v. Bataclan, supra.
295 296
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land. In 1983, the son of Gonzalo Go, Winston, constructed his house on lot no. 25. At the time of construction, Winston was not aware that he encroached on a portion of land owned by Ballatan and the spouses Betty Martinez and Chong Chy Ling. In 1985, Ballatan constructed her house on lot 24. During the construction, she noticed that Go encroached on her property. Since then, the parties had been aware of the encroachments on each others properties. Apparently, it was the erroneous survey of the geodetic engineer commissioned by the subdivision developer that caused these discrepancies. In determining the rights of the parties, the Supreme Court applied Article 448 of the Civil Code since all the parties had acted in good faith. The Court ruled xxx petitioners (Ballatan and the spouses Betty Martinez and Chong Chy Ling), as owners of Lot No. 24, may choose to purchase the improvement made by respondents Go on their land, or sell to respondents Go the subject portion. If buying the improvement is impractical as it may render the Gos house useless, then petitioners may sell to respondents Go that portion of Lot No. 24 on which their improvement stands. If the Gos are unwilling or unable to buy the lot, then they must vacate the land and, until they vacate, they must pay rent to petitioners. Petitioners, however, cannot compel respondents Go to buy the land if its value is considerably more than the portion of their house constructed thereon. If the value of the land is much more than the Gos improvement, then respondents Go must pay reasonable rent. If they do not agree on the terms of the lease, then they must go to court to x the same. In the event that petitioners elect to sell to respondents Go the subject portion of their lot, the price must be xed at the prevailing market value at the time of payment. The Court of Appeals erred in xing the price at the time of taking, which is the time the improvements were built on the land. The time of taking is determinative of just compensation in expropriation proceedings. The instant case is not for expropriation. It is not a taking by the State of private property for a public purpose upon payment of just compensation. This is a case of an owner who has been paying real estate taxes on his land but has been deprived of the use of a portion of this land for years. It is but fair and just to x compensation at the time of payment. Article 448 and the same conditions above-stated also apply to respondents Go as owners and possessors of their land and respondent Li Ching Yao as builder of the improvement that encroached on thirty-seven (37) square meters of respondents Gos land.
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[47.5.4]
Rule If Only a Portion of the Land Has Been Encroached
Article 448 has been applied to improvements or portions of improvements built by mistaken belief on land belonging to the adjoining owner.300 48. Landowner In Good Faith; Builder In Bad Faith
[48.1] Concept of Bad Faith
If good faith consists in the belief of the builder that the land he is building on is his and his ignorance of any defect or aw in his title,301 a fortiori, the builder, planter or sower (who is at the same time the owner of the materials) is deemed to have acted in bad faith if he knows that the land is not his, or if he has knowledge of any aw or defect in his title or mode of acquisition of the land.
[48.2] Legal Consequences; Alternative Rights of the Landowner
If the landowner has acted in good faith, i.e., he was not aware that something was being built, planted or sown on his land and he learned about only after it was done, and the builder, planter or sower (who is at the same time the owner of the materials) has acted in bad faith, the landowner can exercise any of the following three rights and/ or remedies under Articles 449, 450 and 451:
[48.2.1] Right to Appropriate
He can appropriate what has been built, planted or sown on his land in bad faith without any obligation to pay indemnity because Article 449 of the New Civil Code provides that he who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity. And in addition to this right of conscation of the improvements, he can also demand damages from the builder, planter or sower in bad faith pursuant to Article 451. With respect to the fruits, it must be understood that the landowner can appropriate them without paying indemnity if said fruits are still
300 Ballatan v. CA, supra; Technogas Philippines Manufacturing Corp. v. CA, supra; Depra v. Dumlao, supra; and Grana and Torralba v. CA, 109 Phil. 260 (1960). 301 Pleasantville Development Corp. v. CA, supra., at p. 18.
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ungathered (pending) at the time of recovery of possession of the land, for if said fruits have already been separated from the land, the principle of accesion continua no longer applies. Instead, Article 443 of the New Civil Code will apply, in which case, the planter or sower (in bad faith) can be compelled to deliver to the landowner in good faith the fruits he has gathered, or their value, minus the expenses incurred by the former in their production, gathering and preservation.
[48.2.2] Right of Remotion
The second right or remedy of the landowner is to exercise the right of remotion pursuant to Article 450, i.e., he can demand that what has been built, planted or sown in bad faith on his land be removed or demolished and that the land be restored to its original condition all at the expense of the builder, planter or sower plus damages suffered by the landowner pursuant to Article 451.
Santos v. Mojica 26 SCRA 703 (1969) In this case, eleven brothers and sisters, all surnamed Allanigue, brought an action against their sister, Lorenzana Allanigue, her husband, Simeon Santos, Maria San Agustin and Felicidad San Agustin for partition of a 360square meter lot and for the annulment of certain conveyances involving the same. After the spouses Simeon and Lorenzana Santos were summons, their son (Leonardo Santos) built and reconstructed his house into a bigger one. The plaintiffs eventually won the case. When the judgment became nal and executory, a writ of execution was issued ordering the defendants to vacate the lot and deliver the same to the plaintiffs. Leonardo refused to vacate. May his house be demolished? The Supreme Court ruled 1. Petitioner Leonardo Santos is bound by the judgment in Civil Case No. 217-R because he is a successor-in-interest of his parents, Simeon Santos and Lorenzana Allanigue, defendants in Civil Case No. 217-R, and his right, if any, is claimed under them. Hence, the judgment in said civil case binds not only Simeon Santos and Lorenzana Allanigue but also their son, Leonardo Santos, who is their successor-in-interest and who claims under them. The fact that the sale to Leonardo Santos from his parents was registered, is of no moment because, as pointed out, he is bound by the judgment against them.
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Leonardo Santos house having been built and reconstructed (after March, 1962) into a bigger one after his predecessors-ininterests, his parents, had been summoned in 1959 in Civil Case No. 217-R, he must be deemed a builder in bad faith. As builder in bad faith he lost the improvement made by him consisting of the reconstructed house to the owners of the land without right to indemnity, pursuant to Article 449 of the Civil Code, which provides: xxx xxx xxx The Allanigue brothers and sisters therefore became owners of the improvements consisting of the house built in bad faith by Leonardo Santos if they choose to appropriate the accession. (Articles 445 and 449, Civil Code) However, said owners could choose instead the demolition of the improvement or building at the expense of the builder, pursuant to Article 450 of the Civil Code which in part, provides: xxx xxx xxx It is of record in Civil Case No. 217-R that the owners of the land chose to have the house or improvement demolished pursuant to their motion for demolition which was granted by respondent Judge Mojica on December 9, 1965. [48.2.3] Right To Compel Payment of the Price of the Land
The third possible right of the landowner is to compel the builder or planter to pay the price of the land, and the sower the proper rent, pursuant to Article 450, plus damages under Article 451. There being no exception provided in the law, it is submitted that the landowner can exercise this right even if the value of the land is considerably more than that of the building or trees. But then again, this remedy is available against the builder and planter only. With respect to the sower, the landowner may only compel him to pay the proper rent.
[48.3] Limited Rights of Builder, Planter or Sower in Bad Faith
The foregoing rights of the landowner are alternative, i.e., he can exercise only one of them as his option. But in all cases, the builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses of preservation of the land,302 otherwise the
302
Art. 452, Civil Code.
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landowner would be enriching himself at the expense of the former. A builder in bad faith has no right, however, to be indemnied for useful improvements.303 Neither has he any right to remove them.304 The right given a possessor in bad faith to remove improvements applies only to improvements for pure luxury or mere pleasure, provided the thing suffers no injury thereby and the lawful possessor does not prefer to retain them by paying the value they have at the time he enters into possession.305 In Lumungo v. Usman,306 it was ruled that a planter in bad faith is not entitled to be reimbursed for the value of the coconut trees planted by him as said coconut trees are improvements, not necessary expenses of preservation. 49. Both Acted In Bad Faith
[49.1] Rules That Will Govern If Both Parties Acted In Bad Faith
One basic principle of accesion continua is that the bad faith of one person neutralizes the bad faith of another and both should be considered as having acted in good faith. This principle is embodied in the rst paragraph of Article 453 of the New Civil Code, which provides: Art. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the land of another, but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith. Therefore, Article 448 of the New Civil Code governs this situation such that whatever has been discussed therein shall likewise apply in this situation.
[49.2] Bad Faith of the Landowner
It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition
Sabido v. CA, 165 SCRA 498 (1988). MWSS v. CA, 143 SCRA 623 (1986). 305 Ibid., citing Art. 549, Civil Code. 306 25 SCRA 255, 261 (1968).
303 304
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on his part.307 Thus, when one in possession of property of another erects buildings and makes other improvements thereon in bad faith, but with knowledge of the owner who does not object, the case must be treated as if both parties had acted in good faith.308 50. Landowner In Bad Faith; Builder In Good Faith Article 454 of the New Civil Code provides: When the landowner acted in bad faith and the builder, planter or sower proceeded in good faith, the provisions of Art. 447 shall apply. As a consequence, whatever has been discussed under Article 447 shall likewise apply in this situation. Article 447 governs the case of building, planting or sowing on ones own land with materials of another either in good faith or in bad faith. The reason why said article applies may be explained as follows: that if the landowner knew that something was being built, planted or sown on his land by another and he did not interpose any objection thereto, it is as if he was the one building, planting or sowing in bad faith on his own land with materials belonging to another, using the owner of the materials as his worker. As a consequence, and pursuant to the provisions of Article 447, the owner of the materials (who is at the same time the builder, planter or sower in this case) acquires two alternative rights, namely: (1) to demand the value of his materials, plus damages; or (2) to demand the return of his materials in any event, plus damages.
Art. 455. If the materials, plants or seeds belong to a third person who has not acted in bad faith, the owner of the land shall answer subsidiarily for their value and only in the event that the one who made use of them has no property with which to pay. This provision shall not apply if the owner makes use of the rights granted by Article 450. If the owner of the materials, plants or seeds has been paid by the builder, planter or sower, the latter may demand from the landowner the value of the materials and labor. (365a) Art. 456. In the cases regulated in the preceding articles, good faith does not necessarily exclude negligence, which gives right to damages under Article 2176. (n)
307 308
Art. 453, 2nd par., Civil Code. Municipality of Oas v. Roa, 7 Phil. 20.
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51. Building on Anothers Land Using Anothers Materials

[51.1] Situation Contemplated in Art. 455
Article 455 of the New Civil Code contemplates of a situation where the builder, planter or sower has built, planted or sown on anothers land using materials belonging to another person. In such a situation, there are actually three persons whose good faith or bad faith must all be taken into account, namely: (1) the landowner; (2) the builder, planter or sower; and (3) the owner of the materials. To simplify the resolution of this controversial situation, Article 455 offers to settle rst the right of the owner of the materials whose only interest, of course, is the recovery of the value of his materials. Such recovery, however, shall depend on whether he acted in good faith or in bad faith.
[51.2] If the Owner of the Materials Acted In Bad Faith [51.2.1] He Loses His Materials Without Indemnity
If the owner of the materials acted in bad faith, he loses his materials without any right whatsoever. This is so because if he knew that his materials were being used by another but did not object thereto, it is as if he was the one who built, planted or sowed with his materials in bad faith on the land of another. The builder, planter or sower would be considered merely an agent of the owner of the materials. Therefore, the provisions of Article 449 of the Civil Code will apply by analogy, in which case, he loses what he has built, planted or sown without right to indemnity. He is even liable for damages.309 The only exception to this rule is if all the parties acted in bad faith because then their rights would be governed as if they were in good faith.
[51.2.2] Rights of the Landowner
If the owner of the materials acted in bad faith, the landowner can claim what has been built, planted or sown on his land without any obligation to indemnify the owner of the materials. This is in pursuance to the principles stated in Articles 449 and 445 of the Civil Code.
309
Art. 451, NCC.
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[51.2.3] Rights of the Builder, Planter or Sower
The rights of the builder, planter or sower shall be determined depending on his good faith or bad faith. (a) If he acted in good faith. If he acted in good faith in that he thought honestly that both the land and the materials belonged to him, he may claim from the landowner a reasonable compensation for his labor. This is based on the principle that no person should be unjustly enriched at the expense of another. (b) If he acted in bad faith. If he acted in bad faith in that he knew that the materials he was using belonged to somebody else or that he had no right to the land, then he is not entitled to anything. He may instead be made to pay damages to the landowner.
[51.3] If the Owner of the Materials Acted In Good Faith [51.3.1] He Must Be Reimbursed For the Value of His Materials
If the owner of the materials acted in good faith, in that he did not know that his materials were used by another, the law says that he is entitled to recover the value of his materials. This is expressly recognized in Article 455 of the New Civil Code.
[51.3.2] Builder, Planter or Sower Is Primarily Liable
The builder, planter or sower is primarily liable to make such payment to the owner of the materials310 without damages if he (builder, planter or sower) acted in good faith and with damages if he acted in bad faith. If such payment is made by the builder, planter or sower, he becomes the owner of the materials and the case would be the same as the second controversial case discussed in supra 46-50 that of building, planting or sowing with ones own materials on the land of another. Hence, to determine the rights and obligations of the builder, planter or sower and the landowner against each other, we will again apply the rules in the following four situations: (1) if both the landowner and the builder, planter or sower acted in good faith (Art. 448); (2) if the landowner acted in good faith and the builder, planter or sower acted in bad faith (Arts. 449, 450 and 451); (3) if both
310
Art. 455, NCC.
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parties acted in bad faith (Art. 448, in relation to Art. 453); and (4) if the landowner acted in bad faith and the builder, planter or sower acted in good faith (Art. 447, in relation to Art. 454).
[51.3.3] Subsidiary Liability of the Landowner
The landowner is subsidiarily liable for the payment of the value of the materials.311 This subsidiary liability, however, of the owner of the land is only available if the following conditions are met: (1) in case of insolvency of the builder, planter or sower; and (2) the owner of the land appropriates the building, planting or sowing.312 A fortiori, the owner of the land is not liable to the owner of the materials if the former chooses to order the demolition of the construction or the removal of the building, planting or sowing which he has the right to do in case the builder, planter or sower acted in bad faith.313 If the landowner pays for the value of the materials, he becomes the owner thereof. In such a situation, he may demand damages from the builder, planter or sower if the latter acted in bad faith, or pay the builder, planter or sower a reasonable compensation for his labor if the latter acted in good faith. B. NATURAL ACCESSION 52. Natural Accession
[52.1] Four Forms
As discussed in supra 40.2, there are four forms of natural accession: (1) (2) (3) (4) Alluvion; Avulsion; Natural change of course of river; and Formation of island.
Art. 457. To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters. (366)
Art. 455, NCC. Id. 313 Id.
311 312
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Art. 458. The owners of estates adjoining ponds or lagoons do not acquire the land left dry by the natural decrease of the waters, or lose that inundated by them in extraordinary oods. (367)
53. Alluvion
[53.1] Denition
Alluvium or alluvion has been dened as the gradual and imperceptible addition to the banks of rivers314 or as the increment which lands abutting rivers gradually receive as a result of the current of the waters.315 Alluvium is the soil deposited on the estate fronting the river bank, while accretion is the process whereby the soil is deposited.316
[53.2] Riparian Owners Distinguished From Littoral Owners
The owner of the estate fronting the river bank is called the riparian owner. Riparian owners are, strictly speaking, distinct from littoral owners, the latter being owners of lands bordering the shore of the sea or lakes or other tidal waters.317
[53.3] Rule on Alluvion
The rule on alluvion is embodied in Article 457 of the New Civil Code which states that to the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters. The riparian land, or the land adjoining the bank of the river is the principal and the alluvial deposits accumulated gradually along such riparian land constitute the accessory. The alluvium, by mandate of Article 457 of the New Civil Code, is automatically owned by the riparian owner from the moment the soil deposit can be seen.318 The same rule applies even if the riparian land was bought under installment plan, in which case, the benets of accretion belong to the purchaser even when said accretion took place before the last installment was paid.319
3 Manresa, 6th ed., 235. 2 Castan, 8th ed., 218. 316 Heirs of Emiliano Navarro v. IAC, 268 SCRA 74, 85 (1997). 317 Id., at p. 85, citing Santulan v. The Executive Secretary, 80 SCRA 548, 556 (1977). 318 Id., at pp. 85-86. 319 Assistant Executive Secretary for Legal Affairs of the Ofce of the President v. CA, 169 SCRA 27 (1989).
314 315
235
The reason behind the law giving the riparian owner the right to any land or alluvion deposited by a river is to compensate him for the danger of loss that he suffers because of the location of his land.320 If estates bordering on rivers are exposed to oods and other evils produced by the destructive force of the waters and if by virtue of lawful provisions, said estates are subject to encumbrances and various kinds of easements, it is proper that the risk or danger which may prejudice the owners thereof should be compensated by the right of accretion.321
[53.4] Requisites of Alluvion
Accretion as a mode of acquiring property under Article 457 requires the concurrence of the following requisites: (1) that the accumulation of soil or sediment be gradual and imperceptible; (2) that it be the result of the action of the waters of the river; and (3) that the land where the accretion takes place is adjacent to the banks of the river.322 These are called the rules on alluvion which if present in a case, give to the owners of lands adjoining the banks of rivers or streams any accretion gradually received from the effects of the currents of waters.323
[53.4.1] First Requisite
A sudden and forceful action like that of ooding is hardly the alluvial process contemplated under Article 457 of the New Civil Code. It is the slow and hardly perceptible accumulation of soil deposits that the law grants to the riparian owner.324 This is what distinguishes alluvion from avulsion. In alluvion, the deposit of soil is gradual and imperceptible; whereas in avulsion, it is sudden and abrupt.
[53.4.2] Second Requisite
The requirement that the deposit should be due to the effect of the current of the river is indispensable. This excludes from Article 457 of the New Civil Code all deposits caused by human intervention. Alluvion
Republic v. CA, 132 SCRA 514 (1984). Id. 322 Heirs of Emiliano Navarro v. IAC, supra., at p. 85; Vda. De Nazareno v. CA, 257 SCRA 589 (1996); Meneses v. CA, 246 SCRA 374 (1995); Reynante v. CA, 207 SCRA 794 (1992); Binalay v. Manalo, 195 SCRA 374 (1991). 323 Vda. De Nazareno v. CA, supra., at p. 597. 324 Binalay v. Manalo, supra., at p. 386.
320 321
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must be the exclusive work of nature.325 Hence, the riparian owner does not acquire the additions to his land caused by special works expressly intended or designed to bring about accretion.326 Thus, in Tiongco v. Director of Lands, et al.,327 where the land was not formed solely by the natural effect of the water current of the river bordering said land but is also the consequence of the direct and deliberate intervention of man, it was deemed a man-made accretion and, as such, part of the public domain.328
Vda. de Nazareno v. CA 257 SCRA 598 (1996) In this case, Antonio Nazareno, the predecessor-in-interest of Desamparado Vda. De Nazareno, caused the approval by the Bureau of Lands of the survey plan designated as Plan Csd-106-00571 with a view to perfecting his title over the accretion area being claimed by him. The accretion was formed by the dumping of boulders, soil and other lling materials on portions of the Balacanas Creek and the Cagayan River bounding Nazarenos land. Before the approved survey plan could be released to Nazareno, it was protested by his lessees. Acting upon such protest, the Regional Director of the Bureau of Lands ordered the amendment of the survey plan by segregating therefrom the areas occupied by the lessees. Thereafter, the Director of Lands ordered Nazareno to vacate the portions adjudicated to the lessees. Upon the death of Antonio, Vda. De Nazareno went to court to question the action taken by the Bureau of Lands. The resolution of this case hinges on the question of whether or not the subject land is public land. Vda. De Nazareno claims that the subject land is private land being an accretion on Antonio Nazarenos titled property, applying Article 457 of the Civil Code. The Supreme Court HELD: Since the subject land was the direct result of the dumping of sawdust by the Sun Valley Lumber Co., the accretion was man-made, hence, Art. 457 does not apply. Ergo, the subject land is part of the public domain. Republic v. CA 132 SCRA 514 (1984) In this case, the Tancincos were the registered owners of a parcel of land bordering on the Meycauayan and Bocaue rivers. In 1973, they led an application for the registration of three lots adjacent to their shpond property.
Republic v. CA, 132 SCRA 514, 520 (1984). Id. 327 16 C.A. Rep. 211. 328 Cited in Vda. De Nazareno v. CA, supra., at pp. 598-599.
325 326
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The Assistant Provincial Fiscal opposed the application. Upon the advise of the Commissioner appointed by the court, the applicants withdrew their application with respect to one of the lots. Thereafter, the lower court rendered a decision granting the application. The Republic appealed to the Court of Appeals which afrmed the decision of the lower court in toto. The Republic appealed to the Supreme Court. The Republic claimed that there was no accretion to speak of under Article 457 of the New Civil Code because what actually happened was that the Tancincos simply transferred their dikes further down the river bed of the Meycauayan River, and thus, if there was any accretion to speak of, it was man-made and articial and not the result of the gradual and imperceptible sedimentation by the waters of the river. In ruling for the Republic, the Supreme Court held Article 457 of the New Civil Code provides: To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters. The above-quoted article requires the concurrence of three requisites before an accretion covered by this particular provision is said to have taken place. They are: (1) that the deposit be gradual and imperceptible; (2) that it be made through the effects of the current of the water; and (3) that the land where accretion takes place is adjacent to the banks of rivers. The requirement that the deposit should be due to the effect of the current of the river is indispensable. This excludes from Art. 457 of the New Civil Code all deposits caused by human intervention. Alluvion must be the exclusive work of nature. In the instant case, there is no evidence whatsoever to prove that the addition to the said property was made gradually through the effects of the current of the Meycauayan and Bocaue rivers. We agree with the observation of the Solicitor General that it is preposterous to believe that almost four (4) hectares of land came into being because of the effects of the Meycauayan and Bocaue rivers. The lone witness of the private respondents who happens to be their overseer and whose husband was rst cousin of their father noticed the four hectare accretion to the twelve hectare shpond only in 1939. The respondents claim that at this point in time, accretion had already taken place. If so, their witness was incompetent to testify to a gradual and imperceptible increase to their land in the years before 1939. However, the witness testied that in that year, she observed an increase in the area of the original shpond which is now the land in question. If she was telling the
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truth, the accretion was sudden. However, there is evidence that the alleged alluvial deposits were articial and man-made and not the exclusive result of the current of the Meycauayan and Bocaue rivers. The alleged alluvial deposits came into being not because of the sole effect of the current of the rivers but as a result of the transfer of the dike towards the river and encroaching upon it. The land sought to be registered is not even dry land cast imperceptibly and gradually by the rivers current on the shpond adjoining it. It is under two meters of water. The private respondents own evidence shows that the water in the shpond is two meters deep on the side of that pilapil facing the shpond and only one meter deep on the side of the pilapil facing the river. The reason behind the law giving the riparian owner the right to any land or alluvion deposited by a river is to compensate him for the danger of loss that he suffers because of the location of his land. If estates bordering on rivers are exposed to oods and other evils produced by the destructive force of the waters and if by virtue of lawful provisions, said estates are subject to encumbrances and various kinds of easements, it is proper that the risk or danger which may prejudice the owners thereof should be compensated by the right of accretion. (Cortes v. City of Manila, 10 Phil. 567). Hence, the riparian owner does not acquire the additions to his land caused by special works expressly intended or designed to bring about accretion. When the private respondents transferred their dikes towards the river bed, the dikes were meant for reclamation purposes and not to protect their property from the destructive force of the waters of the river. We agree with the submission of the Solicitor General that the testimony of the private respondents lone witness to the effect that as early as 1939 there already existed such alleged alluvial deposits, deserves no merit. It should be noted that the lots in question were not included in the survey of their adjacent property conducted on May 10, 1940 and in the Cadastral Survey of the entire Municipality of Meycauayan conducted between the years 1958 to 1960. The alleged accretion was declared for taxation purposes only in 1972 or 33 years after it had supposedly permanently formed. The only valid conclusion therefore is that the said areas could not have been there in 1939. They existed only after the private respondents transferred their dikes towards the bed of the Meycauayan river in 1951. What private respondents claim as accretion is really an encroachment of a portion of the Meycauayan river by reclamation.
239
The lower court cannot validly order the registration of Lots 1 and 2 in the names of the private respondents. These lots were portions of the bed of the Meycauayan river and are therefore classied as property of the public domain under Article 420, paragraph 1 and Article 502, paragraph 1 of the Civil Code of the Philippines. They are not open to registration under the Land Registration Act. The adjudication of the lands in question as private property in the names of the private respondents is null and void. [53.4.3] Third Requisite
Under Article 457, the accretion must take place on a land adjacent to the banks of the river. Note, however, that while Article 457 mentions only of accretions on the banks of rivers, this must be interpreted in conjunction with Article 84 of the Spanish Law of Waters which provides: Accretions deposited gradually upon land contiguous to creeks, streams, rivers and lakes, by accessions or sediments from the water thereof, belong to the owners of such lands. But with respect to a creek, it must have regular and continuous current. The rule does not apply to canals or esteros which are not creeks and have no current but are simply drainage system.329 In the case of Ignacio v. Director of Lands and Valeriano,330 the Supreme Court considered the Manila Bay as a sea for purposes of determining which law on accretion is to be applied. Hence, an accretion that takes place on the shore of the Manila Bay, it being an inlet or an arm of the sea, is part of the public domain pursuant to Article 4 of the Spanish Law of Waters of 1866, which provides as follows: Lands added to the shores by accretions and alluvial deposits caused by the action of the sea, form part of the public domain. When they are no longer washed by the water of the sea and are not necessary for purposes of public utility,
329
Guison v. City of Manila, (CA) 40 O.G. 3835; Ronquillo v. CA, 195 SCRA 433, 443 108 Phil. 335 (1960).
(1991).
330
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or for the establishment of special industries, or for the coast guard service, the Government shall declare them to be the property of the owner of the estates adjacent thereto and as increment thereof. The Laguna de Bay, on the other hand, is a lake, the accretion on which, by the express mandate of Article 84 of the Spanish Law of Waters cited above, belongs to the owners of the land contiguous thereto.331
Heirs of Emiliano Navarro v. IAC 268 SCRA 74 (1997) Sometime in 1960, Sinfroso Pascual, the predecessor-in-interest of the heirs of Emiliano Navarro, led an application to register and conrm his title to a parcel of land situated in Sibocan, Balanga, Bataan, described in Plan Psu175181 and said to have an area of 146,611 square meters. Pascual claimed that this land is an accretion to his property situated in Barrio Perto Rivas, Balanga, Bataan. It is bounded on the eastern side by the Talisay River, on the western side by the Bulacan River, on the northern side by the Manila Bay. The Director of Lands opposed the application contending that the subject land is part of the public domain. The evidence, however, shows that the accretion took place on the northern portion of Pascuals land which is adjacent to the Manila Bay. It was HELD: The third requisite of accretion, which is, that the alluvion is deposited on the portion of claimants land which is adjacent to the river bank, is lacking. The claimants own tract of land where the accretion has taken place adjoins the Manila Bay, which is not a river but a sea. The disputed land, thus, is not an accretion on a river bank but on a sea bank, or on what used to be the foreshore of Manila Bay. As such, the applicable law is not Art. 457 of the Civil Code but Art. 4 of the Spanish Law of Waters of 1866 which provides that lands added to the shores by accretions and alluvial deposits caused by the action of the sea, form part of the public domain. Government of the P.I. v. Colegio de San Jose 53 Phil. 423 (1929) The plaintiff opposed the registration by defendant of a parcel of land which borders the Laguna de Bay. The plaintiff claimed that the parcel of land belonged to the public domain. According to the evidence, the waters of the
331 Government of the P.I. v. Colegio de San Jose, 53 Phil. 423 (1929); Republic v. CA, 131 SCRA 532 (1984).
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Laguna de Bay receded from the land in question but during rainy season the land was ooded by its water. Inasmuch as under the Civil Code, the owners of tenements bordering on ponds or lagoons do not acquire the land left dry by the natural decrease of the waters, then it is of primary importance to determine whether the body of water called the Laguna de Bay is naturally and legally a lake or a lagoon. It was HELD: Laguna de Bay is a body of fresh water formed in depressions of the earth; it contains fresh water coming from rivers and brooks or springs, and is connected with Manila Bay by the Pasig River. It is a lake. Lakes and their beds belong to the public domain. The bed of a lake is the ground covered by its waters at their highest ordinary depth. The waters of Laguna de Bay at their highest depth reach no further than the north eastern boundary of the land in question and therefore said land is outside the bed, and belongs to the defendant, who continues to be the owner of same, even if accidentally inundated by the waters of the lake. Even if the land in question had been formed by alluvion, it still belongs to the defendant as owner of the land which borders on the lake. [53.5] Right of Riparian Owner to Alluvium Is Ipso Jure
The right of the owners of the bank adjacent to rivers to the accretion which they receive by virtue of the action of the waters of the river is ipso jure and there is no need of an action of the owner of the bank to possess the new addition since it belongs to him by the very fact of the addition.332 However, such accretion does not automatically become registered land just because the lot which receives the same is covered by Torrens title.333 Thus, the accretion to registered land does not preclude acquisition of the additional area by another person through prescription.334 In Grande, et al. v. Court of Appeals,335 the Supreme Court explained Ownership of a piece of land is one thing; registration under the Torrens system of that ownership is another. Ownership over the accretion received by the land adjoining a river is governed by the Civil Code. Imprescriptibility of registered land is provided in the registration law. Registration under the Land Registration and Cadastral Act does not vest
Roxas v. Tuason, 9 Phil. 408. Cureg v. IAC, 177 SCRA 313 (1989). 334 Reynante v. CA, 207 SCRA 794, 799-800 (1992). 335 5 SCRA 524, 530 (1962).
332 333
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or give title to the land, but merely conrms and, thereafter, protects the title already possessed by the owner, making it imprescriptible by occupation of third parties. But to obtain this protection, the land must be placed under the operation of the registration laws, wherein certain judicial procedures have been provided. In the same vein, the registration under the Torrens system does not protect the riparian owner against the diminution of the area of his registered land through gradual changes in the course of an adjoining stream.336
[53.6] Exception to the Rule on Alluvion
Article 458 of the New Civil Code serves as an exception to the general rule on alluvion.337 It is noteworthy that this article refers only to ponds and lagoons but is not applicable to a lake since with regard to a lake the rule of alluvion is applicable in accordance with the Spanish Law of Waters.338 A lake has been dened as body of water formed in depressions of the Earth, ordinarily fresh water, coming from rivers, brooks or springs and connected to the sea by them. A pond or lagoon on the other hand is a small body of water, ordinarily of fresh water, and not very deep, fed by oods, the hollow bed of which is bounded by elevations of land.339
Art. 459. Whenever the current of a river, creek or torrent segregates from an estate on its bank a known portion of land and transfers it to another estate, the owner of the land to which the segregated portion belonged retains the ownership of it, provided that he removes the same within two years. (368a) Art. 460. Trees uprooted and carried away by the current of the waters belong to the owner of the land upon which they may be cast, if the owners do not claim them within six months. If such owners claim them, they shall pay the expenses incurred in gathering them or putting them in a safe place. (369a)
Viajar v. CA, 168 SCRA 405, 413 (1988), citing Payatas Estate Improvement Co. v. Tuazon, 53 Phil. 55 and C.N. Hodges v. Garcia, 109 Phil. 132. 337 3 Manresa, 6th ed., 239-240. 338 Government of the P.I. v. Colegio de San Jose, 53 Phil. 423. 339 Ibid.
336
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54. Avulsion
[54.1] Denition
Avulsion has been dened as the accretion which takes place when the current of a river, creek or torrent segregates a known portion of land from an estate on its banks and transfers it to another estate.340 Or, the accretion taking place in the estate on the bank of a river caused not by the slow and constant action of the waters but by the violent and sudden action of a torrent.341
[54.2] Comparison With Alluvion
Alluvion and avulsion share the following similarities: (1) that they both take place only along the banks of rivers, creeks, streams and lakes; and (2) that they are caused only by the force of the current of the waters independently of the act of man. But they differ, as follows: (1) In alluvion the deposit of soil is gradual; whereas, in avulsion it is sudden and abrupt; (2) In alluvion the deposit of soil belongs to the owner of the property where the same was deposited but in avulsion the owner of the property from which a part was detached retains the ownership thereof; (3) In alluvion, accession takes place immediately upon the deposit of the soil; whereas, in avulsion the right of accession takes place only after two years from the attachment or incorporation of the segregated portion of land to the riparian land and only if its owner fails to remove the same within said period; and (4) In alluvion, the soil cannot be identied; in avulsion, the detached portion can be identied. In the absence, however, of evidence that the change in the course of river was sudden or that it occurred through avulsion, the presumption is that the change was gradual and caused by accretion and erosion.342
3 Manresa, 6th ed., 243. 2 Castan, 8th ed., 218-219, citing Sanchez Roman. 342 C.N. Hodges v. Garcia, 109 Phil. 133.
340 341
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[54.3] Rule on Avulsion
According to Article 459 of the New Civil Code, avulsion takes place whenever the current of a river, creek or torrent segregates from an estate on its bank a known portion of land and transfers it to another estate. In such a case, the owner of the land from where the portion is detached retains the ownership of the segregated portion but he is required to remove the same within two years.343 Note that the article requires the owner to physically remove the portion detached from his land, a mere claim being insufcient.344 Should the owner fail to remove the detached portion within two years, the same shall belong to the owner of the land to which it is attached following the principle of accession. In the case of avulsion, therefore, accession does not as yet take place at the time the segregated portion is transferred to another estate since the owner of the land from where the portion is detached retains ownership of the same. In avulsion, accession takes place only after two years from the attachment or incorporation of the segregated portion of land to the riparian land upon failure of its owner to remove the same within said period.
[54.4] Avulsion With Respect To Uprooted Trees
If trees are uprooted and carried away by the current of the waters to another estate, the owner of the tree retains ownership of the same but he is required to claim them within a period of six months.345 Note that while avulsion with respect to a segregated portion of land requires actual physical removal of the portion detached within two years, the avulsion with respect to uprooted trees merely require the owner of the tree to make a claim for the same within a period of six months. If the uprooted trees have been transplanted by the owner of the land upon which the trees may have been cast and said trees have taken root in said land, then the owner of the trees, upon making the claim, is required to refund the expenses incurred in gathering them or in putting them in a safe place, including the expenses incurred by the owner of the land for the preservation of the trees.346
Art. 459, NCC. II Caguioa, Civil Code, 1966 ed., 103-14. 345 Art. 460, NCC. 346 Id.
343 344
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Art. 461. River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are occupied by the new course in proportion to the area lost. However, the owners of the lands adjoining the old bed shall have the right to acquire the same by paying the value thereof, which value shall not exceed the value of the area occupied by the new bed. (370a) Art. 462. Whenever a river, changing its course by natural causes, opens a new bed through a private estate, this bed shall become of public dominion. (372a)
55. Change of Course of River

[55.1] Effect of Change of Course of River
If there is a natural change in the course of the waters of the river, the abandoned riverbeds shall ipso facto belong to the owners whose lands are occupied by the new course in proportion to the area lost.347 For example, if a river passing through the property of A changed its course due to natural causes and opened a new bed on the adjoining land belonging to X, the abandoned river bed (which is inside the property of A) automatically or ipso facto belongs to X in proportion to the area lost by the latter. This is an innovation of the old rule under Article 370 of the Spanish Civil Code of 1889 where the abandoned river beds shall belong to the owners of the riparian lands throughout the respective length of each.348 According to the Code Commission,349 the new solution is by way of compensation for the loss of the land occupied by the new bed and that it is more equitable to compensate the actual losers than to add land to those who have lost nothing. Note, however, that at this point, no accession has yet taken place because the owner of the land occupied by the new course is merely compensated for the area that he lost. Since nothing has been added to his property, there is no accession yet since this concept connotes an addition to ones property. Accesion continua takes place only if the owner of the land adjoining the old bed will exercise his option to acquire the abandoned bed by paying the value thereof, which value shall not exceed the value of the area occupied by the new bed.350 In
Art. 461, NCC. Art. 370, Spanish Civil Code of 1889. 349 Report of the Code of Commission, 96. 350 Art. 461, NCC.
347 348
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the above example, while X automatically becomes the owner of the abandoned river bed, A, however, can compel X to sell to him the abandoned bed at a price not exceeding the value of the area occupied by the new bed. Note that under Article 461, the owners of the land adjoining the old bed have the right to compel the owners of the land occupied by the new bed to sell to them the old bed at a price not greater than the value of the land occupied by the new bed. Such option is granted to them by law and not to the owners of the land onto which the river changed its course. In other words, the owners of the land onto which the river changed its course cannot compel the riparian owners (the owners of the land adjoining the old bed) to buy the old bed. The reason for the law in giving the riparian owner the right to buy the abandoned river bed is because the latter is in a better position to make use of the land for agricultural purposes.
The present article (Article 461), as well as Article 370 of the Spanish Civil Code of 1889, speaks of a natural change in the course of the waters. Hence, in the case of Ronquillo v. Court of Appeals,351 a case applying the provisions of Article 370 of the Spanish Civil Code of 1889, it was held that Article 370 applies only if there is a natural change in the course of the waters and since the drying up of the Estero Calubcub was actually caused by the active intervention of man due to the dumping of garbage therein by the people of the surrounding neighbourhood the said law was not applied and the dried-up portion of Estero Calubcub was instead declared as forming part of the land of the public domain. In the subsequent case of Baes v. Court of Appeals,352 however, the Court applied the provisions of Article 461 of the Civil Code even if the change in the course of the waters was effected through articial means. The Court explained that if the riparian owner is entitled to compensation for the damage to or loss of his property due to natural causes, there is all the more reason to compensate him when the change in the course of the river is effected though articial means.
351 352
195 SCRA 433 (1991). 224 SCRA 562 (1993).
247
Note, however, that the factual milieu in Ronquillo and Baes are not the same. In Baes, the change in the course of the waters of the creek was the result of a deliberate act on the part of the government resulting in a prejudice to the interest of Baes because the man-made canal totally occupied his property. In Ronquillo, however, there is no showing that the change in the course of Estero Calubcub prejudiced the Del Rosarios. Moreover, the change in Ronquillo was without the intervention of the government. It was, in fact, due to the dumping of garbage therein by the people of the surrounding neighborhood. Hence, if the change in the course of the waters is due to a deliberate act of the government resulting in prejudice to a private individual, the latter is entitled to avail himself of the benets under Article 461 of the Civil Code.
Baes v. CA 224 SCRA 562 (1993) In this case, a portion of the Tripa de Gallina creek was diverted to a manmade canal which totally occupied Lot 2958-B (with an area of 3,588 sq.m.) belonging to Felix Baes. The diversion was resorted to by the government to improve the ow of the Tripa de Gallina creek. Baes and his wife claim that they became the owners of the old bed (which was eventually lled up by soil excavated from Lot 2958-B) by virtue of Article 461. In agreeing to the contention of the Baes spouses, the Supreme Court explained If the riparian owner is entitled to compensation for the damage to or loss of his property due to natural causes, there is all the more reason to compensate him when the change in the course of the river is effected though articial means. The loss to the petitioners of the land covered by the canal was the result of a deliberate act on the part of the government when it sought to improve the ow of the Tripa de Gallina creek. It was therefore obligated to compensate the Baeses for their loss. Ronquillo v. CA 195 SCRA 433 (1991) In this case, Rosendo del Rosario was a registered owner of a parcel of land at Sampaloc, Manila. Adjoining said lot is a dried-up portion of the old Estero Calubcub occupied by Mario Ronquillo. The Del Rosarios claim that long before the year 1930, Rosendo had been in possession of his parcel of land including the adjoining dried-up portion of the old Estero Calubcub. Because Ronquillo refused to vacate, the Del Rosarios led an action in court to be
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declared the rightful owners of the dried-up portion. Ronquillo, on the other hand, argued that the dried-up portion is part of the land of the public domain. After trial, the lower court rendered a judgment in favor of the Del Rosarios, which judgment was afrmed by the Court of Appeals. Hence, Ronquillo appealed to the Supreme Court. The Supreme Court required the Solicitor General to comment on behalf of the Director of Lands. In his comment, the Solicitor General contends that the subject land is part of the public domain. It was HELD: The change in the course of Estero Calubcub was caused, not by natural courses, but due to the dumping of garbage therein by the people surrounding the neighborhood. Hence, Art. 370 of the Old Civil Code (now Art. 461) does not apply. It applies only if there is a natural change in the course of the waters. Consequently, the dried-up portion of Estero Calubcub should be considered as forming part of the land of the public domain. [55.3] Extension of Ownership Ipso Jure
Once the river bed has been abandoned through the natural change of the course of the waters, the owners of the land through which the new river bed passes become the owners of the abandoned bed to the extent provided by Article 461. There need be no act on their part to subject the old river bed to their ownership, as it is subject thereto ipso jure from the moment the mode of acquisition becomes evident, without need of any formal act of acquisition.353 Such abandoned river bed had fallen to the private ownership of the owner of the land through which the new river bed passes even without any formal act of his will and any unauthorized occupant thereof will be considered as a trespasser.354 The right in re to the principal is likewise a right in re to the accessory, as it is a mode of acquisition provided by law, as the result of the right of accretion.355 Since the accessory follows the nature of the principal, there need not be any tendency to the thing or manifestation of the purpose to subject it to our ownership, as it is subject thereto ipso jure from the moment the mode of acquisition becomes evident.356 And the failure of the owners of the land through which the new river bed passes to register the accretion in their names and declare it for purposes of taxation does not divest it of its character as a private property.357
353 Agne v. Director of Lands, 181 SCRA 793, 805 (1990), citing Sanchez v. Pascual, 11 Phil. 395 (1908); Pascual v. Sarmiento, et al., 37 Phil. 170 (1917). 354 Ibid. 355 Ibid. 356 Ibid., citing Villanueva v. Castro, 23 Phil. 54. 357 Ibid., at p. 806.
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[55.4] Restoration of the River to Its Former Course
In interpreting the provisions of Article 370 of the Spanish Civil Code of 1889, our Supreme Court held in Panlilio v. Mercado358 that in the event of the change of the course of the stream, its former bed cannot be regarded as denitely abandoned and the public divested of its ownership therein until there is some indication of an intention of the government to acquiesce to the change of the stream. Hence, it was held that there was no abandonment of the old bed if the government took practicable steps to return the stream back to its old course. According to Dean Capistrano,359 a member of the Code Commission, the word ipso facto was introduced in Article 461 in order to precisely repudiate the ruling of the Court in the Panlilio case because the Commission considered it unsound. Hence, after the enactment of the New Civil Code, there was doubt as to whether the government can return the river bed back to its old course since in so doing, the government would be invading private property because the owner of the land through which the new river bed passes ipso facto owns the old river bed. The foregoing uncertainty was settled with the enactment of Presidential Decree 1067, otherwise known as The Water Code of the Philippines, which modied the provisions of Article 461 of the Civil Code.360 Under Article 58 of the Water Code of the Philippines, the owners of the affected lands (referring to the owners of the land where the new river bed passes) cannot restrain the government from taking steps to revert the river or stream to its former course but they may not compel the government to restore the river to its former bed. And if the government decides to revert back the river or stream to its former course, the owners of the lands thus affected are not entitled to compensation for any damage sustained thereby. In fact, under the provisions of Article 58361 of the Water Code of the Philippines, the
44 Phil. 695. Capistrano, Civil Code of the Philippines, Annotated, Vol. 1, 430. 360 See Footnote No. 56 in Celestial v. Cachopero, 413 SCRA 469, 487. 361 Art. 58. When a river or stream suddenly changes its course to traverse private lands, the owners or the affected lands may not compel the government to restore the river to its former bed; nor can they restrain the government from taking steps to revert the river or stream to its former course. The owners of the lands thus affected are not entitled to compensation for any damage sustained thereby. However, the former owners of the new bed shall be the owners of the abandoned bed in proportion to the area lost by each.
358 359
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affected landowners may themselves undertake the return of the river to its old bed subject to the following conditions: (1) they shall secure a permit from the Department of Public Works and Highways; (2) the undertaking shall be at their expenses; and (3) the work pertaining thereto must be commenced within two years from the change in the course of the river or stream.
[55.5] When River Dries Up
If the river simply dries up and did not change its course or without opening a new bed, it is clear that the provisions of Article 461 will not apply. To whom will the dried up river bed belong? According to Senator Tolentino, the dry bed will continue to remain property of public dominion.362 Since rivers and their natural beds are property of public dominion, in the absence of any provision vesting the ownership of the dried up river bed in some other person, it must continue to belong to the State.363 The foregoing opinion of Senator Tolentino was quoted with approval by the Supreme Court in the case of Celestial v. Cachopero,364 where the Court held Furthermore, both provisions pertain to situations where there has been a change in the course of a river, not where the river simply dries up. In the instant Petition, it is not even alleged that the Salunayan Creek changed its course. In such a situation, commentators are of the opinion that the dry river bed remains property of public dominion.365
[55.6] Status of New Bed
In event of a natural change in the course of the waters of the river, Article 462 of the New Civil Code expressly declares that the
The owners of the affected lands may undertake to return the river or stream to its old bed at their own expense; Provided, That a permit therefore is secured from the Minister of Public Works, Transportation and Communication and work pertaining thereto are commenced within two years from the change in the course of the river or stream. 362 II Tolentino, Civil Code, 1992 ed., 137-138. 363 Id. 364 413 SCRA 469, 489 (2003). 365 Id., citing II Tolentino,Civil Code, 1992 ed., 137-138; II Paras, Civil Code, 2002 ed., 275.
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new bed passing through a private estate shall become property of public dominion. This rule is consistent with the provisions of Article 502(1) of the New Civil Code and Article 5(a) of the Water Code of the Philippines.
Art. 463. Whenever the current of a river divides itself into branches, leaving a piece of land or part thereof isolated, the owner of the land retains his ownership. He also retains it if a portion of land is separated from the estate by the current. (374) Art. 464. Islands which may be formed on the seas within the jurisdiction of the Philippines, on lakes, and on navigable or oatable rivers belong to the State. (371a) Art. 465. Islands which through successive accumulation of alluvial deposits are formed in non-navigable and non-oatable rivers, belong to the owners of the margins or banks nearest to each of them, or to the owners of both margins if the island is in the middle of the river, in which case it shall be divided longitudinally in halves. If a single island thus formed be more distant from one margin than from the other, the owner of the nearer margin shall be the sole owner thereof. (373a)
56. Formation of Island

[56.1] Three Kinds of Islands
In connection with accesion continua, there are three kinds of islands that may be formed pursuant to the provisions of the Civil Code:
[56.1.1] Island Formed Under Article 463
In Article 463, the current of a river simply divides itself into branches, leaving a piece of land or part thereof isolated, thereby forming an island. Since the land has not been permanently invaded by the waters of the river, no natural expropriation will occur. The island thus formed remains to be the property of the owner of the land where such island has been formed. This is expressly recognized in Article 463. Under the provisions of the same article, he also retains ownership of the portion of his land separated from the estate by the current. This rule is an extension of the rule on avulsion since the process takes place abruptly and the segregated portion is required to be identiable. Hence, if known portions of land are segregated from a tenement and deposited
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in the middle of a river, thus forming an island, the provisions of Article 463 and not Article 465 will apply.366 Note that the rule in this article applies whether the river is navigable or oatable or not since the article does not make any distinction. Strictly speaking, however, no accession has taken place in the situation contemplated in Article 463 because no new property has been added or attached to the property of any person. As stated earlier, the owner of the property simply retains ownership of his land, with the difference that it has just been converted into an island.
Article 464 provides for a real case of accession compared to the previous article (Article 463). In Article 464, an island is formed on a sea, lake or navigable or oatable river through whatever cause. Thus, the article clearly speaks of an addition to the property of the State since the island thus formed is expressly declared to be property of the latter. It has been said that the island formed pursuant to the provisions of Article 464 forms part of the patrimonial property of the State and, therefore, may be sold by the State.367 Article 464 speaks of an island formed on a navigable or oatable river. A river is considered to be navigable or oatable if it is able to carry the produce of the land along its banks to the market.368
Article 465, in turn, speaks of an island formed in non-navigable or non-oatable rivers through successive accumulation of deposit in the same manner as alluvion. Hence, if the island is formed in navigable or oatable rivers, it is Article 464 that will apply and not this article. If the island is formed through a sudden and abrupt process due to segregation of identiable portions of land from an estate, it is Article 463 that will likewise apply and not this article, whether the river is navigable or oatable or not.
II Caguioa, Civil Code, 1966 ed., 110. 3 Manresa, 6th ed., 256. 368 Commonwealth v. Meneses, (CA) 38 O.G. No. 23, 2839.
366 367
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If the requisites of Article 465 are complied with, the ownership of the island thus formed shall be governed by the following rules: (1) (2) It shall belong to the owner of the margins or banks nearest to the island; If the island is in the middle of the river, the same shall be owned by the owners of both margins, in which case it shall be divided longitudinally in halves; or If the island be more distant from one margin than from the other, the owner of the nearer margin shall be the sole owner thereof.
(3)
The reason for this article is the same as in alluvion in that the owners of the bank nearer the islands are in the best position to cultivate and attend to the exploitation of the same.369 In fact, no specic act of possession over the accretion is required. If, however, the riparian owner fails to assert his claim thereof, the same may yield to the adverse possession of third parties, as indeed even accretion to land titled under the Torrens system must itself be registered.370
Jagualing v. CA 194 SCRA 607 (1991) Between the one who has actual possession of an island that forms in a non-navigable and non-oatable river (who has been in possession of the same for 15 years) and the owner of the land along the margins nearest to the island, who has the better right thereto? Under Art. 465 of the Civil Code, the island belongs to the owner of the land along the nearer margin as sole owner thereof. His ownership, however, may yield to the adverse possession of third parties. But in this case, the third parties were presumed to have notice of the status of the owner of the land along the nearer margin as riparian owners, hence, they did not qualify as possessors in good faith. They may acquire ownership of the island only through uninterrupted adverse possession for a period of thirty (30) years. By their own admission, they have been in possession of the property for only about fteen years. Hence, the island can properly be adjudicated to the owner of the land along the nearer margin.
369 370
Jagualing v. CA, 194 SCRA 608, 614-615 (1991). Ibid.
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Section 3. Right of Accession with Respect to Movable Property

Art. 466. Whenever two movable things belonging to different owners are, without bad faith, united in such a way that they form a single object, the owner of the principal thing acquires the accessory, indemnifying the former owner thereof for its value. (375) Art. 467. The principal thing, as between two things incorporated, is deemed to be that to which the other has been united as an ornament, or for its use or perfection. (376) Art. 468. If it cannot be determined by the rule given in the preceding article which of the two things incorporated is the principal one, the thing of the greater value shall be so considered, and as between two things of equal value, that of the greater volume. In painting and sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone, canvas, paper or parchment shall be deemed the accessory thing. (377) Art. 469. Whenever the things united can be separated without injury, their respective owners may demand their separation. Nevertheless, in case the thing united for the use, embellishment or perfection of the other, is much more precious than the principal thing, the owner of the former may demand its separation, even though the thing to which it has been incorporated may suffer some injury. (378) Art. 470. Whenever the owner of the accessory thing has made the incorporation in bad faith, he shall lose the thing incorporated and shall have the obligation to indemnify the owner of the principal thing for the damages he may have suffered. If the one who has acted in bad faith is the owner of the principal thing, the owner of the accessory thing shall have a right to choose between the former paying him its value or that the thing belonging to him be separated, even though for this purpose it be necessary to destroy the principal thing; and in both cases, furthermore, there shall be indemnity for damages. If either one of the owners has made the incorporation with the knowledge and without the objection of the other, their respective rights shall be determined as though both acted in good faith. (379a) Art. 471. Whenever the owner of the material employed without his consent has a right to an indemnity, he may demand that this consist in the delivery of a thing equal in kind and value, and in all other respects, to that employed, or else in the price thereof, according to expert appraisal. (380)
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57. Adjunction or Conjunction

[57.1] Forms of Accesion Continua With Respect To Movables
As discussed in supra 40.2, there are three forms of accesion continua with respect to movable property: (1) (2) (3) adjunction or conjunction; commixtion or confusion; or specication
[57.2] Adjunction or Conjunction, Explained
Adjunction (or conjunction) takes place when two or more movable things belonging to different owners are so united that they cannot be separated without causing injury to one or both them, thereby giving rise to a new thing.371 If separation is possible without causing a substantial physical or juridical injury to any of the movables, then there is no accession. Hence, in the rst paragraph of Article 469 which contemplates of adjunction through inclusion and soldering,372 the respective owners may demand separation whenever the things united can be separated without injury. The distinguishing features of adjunction are the following: (1) that the two or more movables form a distinctive new thing; and (2) that each one of the things making up the new one preserves its own nature.373 The latter characteristic serves to distinguish it from confusion which implies a greater degree of identication and in certain cases even a decomposition of the things which have been confused.374
[57.3] How It Takes Place
Adjunction may take place in either of the following ways: (1) (2) (3)
371 372
inclusion or engraftment; soldadura or attachment; tejido or weaving;
3 Sanchez Roman, 98. 3 Manresa, 6th ed., 284-285. 373 3 Manresa 272. 374 II Caguioa, Civil Code, 1966 ed., 111, citing 3 Manresa, 6th ed., 275.
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(4) (5)
pintura or painting; and escritura or writing.375
[57.4] Legal Effects of Adjunction
The legal effects of adjunction will depend on how the union or attachment was effected whether in good faith or in bad faith.
[57.4.1] If Effected In Good Faith
This situation is governed by Article 466 of the New Civil Code, which reads: Art. 466. Whenever two movable things belonging to different owners are, without bad faith, united in such a way that they form a single object, the owner of the principal thing acquires the accessory, indemnifying the former owner thereof for its value. (375) Thus, if the union or attachment was effected in good faith whether by the owner of the principal or by the owner of the accessory the rule is that the owner of the principal thing acquires the accessory376 following the principle in accesion continua that the accessory follows the principal (accession cedit principali), but he must indemnify the owner of the accessory for its value following the principle that no one shall unjustly enrich himself at the expense of another. The union or attachment is deemed to be effected in good faith if the person responsible therefore honestly thought that the movables involved really belonged to him. However, if the accessory is much more precious than the principal thing, its owner may demand its separation, even though the principal may suffer injury.377
[57.4.2.] If Effected In Bad Faith
If the union or attachment was effected in good faith, it is immaterial as to who was responsible for it. The rule shall be the same as stated above in supra 57.4.1 regardless of who was responsible for such
3 Manresa, 6th ed., 275-276. See Art. 466, NCC. 377 Art. 469, 2nd par., NCC.
375 376
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union or attachment. But if the union or attachment was effected in bad faith, the legal effects shall vary depending as to who was responsible for it, as follows:
[i] If Effected In Bad Faith By the Owner of the Principal
This situation is governed by the second paragraph of Article 470 of the New Civil Code, which reads: Art. 470. xxx If the one who has acted in bad faith is the owner of the principal thing, the owner of the accessory thing shall have a right to choose between the former paying him its value or that the thing belonging to him be separated, even though for this purpose it be necessary to destroy the principal thing; and in both cases, furthermore, there shall be indemnity for damages. Following the principle of accesion continua that bad faith subjects a person to damages and other unfavorable consequences, the options in this situation are given to the owner of the accessory and not to the owner of the principal as a way of penalizing the latter. Hence, the owner of the accessory may choose between the following options: (1) to demand payment for the value of the accessory, with a right to be indemnied for damages; or (2) to demand for the separation of the accessory, even though for this purpose it be necessary to destroy the principal thing, with a right to be indemnied for damages. The second option, however, does not apply if the same is not practicable as in the case of painting (which cannot be separated from the canvass) or writing (which cannot be separated from the paper). In such a situation, the owner of the accessory is limited only to the rst option mentioned above.378
[ii] If Effected In Bad Faith By the Owner of the Accessory
This situation is governed by the rst paragraph of Article 470, which reads:
378
3 Manresa, 6th ed., 289.
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Art. 470. Whenever the owner of the accessory thing has made the incorporation in bad faith, he shall lose the thing incorporated and shall have the obligation to indemnify the owner of the principal thing for the damages he may have suffered. x x x. Following the principle of accesion continua that bad faith subjects a person to damages and other unfavorable consequences, if the union or attachment was effected by the owner of the accessory in bad faith, he shall lose the thing incorporated (the accessory) and shall be liable to pay damages to the owner of the principal.
[iii] If Both Acted In Bad Faith
The third paragraph of Article 470 provides that if either one of the owners has made the incorporation with the knowledge and without the objection of the other, their respective rights shall be determined as though both acted in good faith. In such a case, the provisions of Article 466 will apply. Hence, whatever has been discussed in supra 57.4.1 shall also apply to this situation. In the foregoing situations, whenever the owner of the material employed without his consent has a right to an indemnity, he may demand that the same consist either: (1) in the delivery of a thing equal in kind and value, and in all other respects, to that employed; or (2) in the payment of the price thereof according to expert appraisal.379
[57.5] Tests In Determining The Principal
In determining which of the movables so united is the principal (and which is the accessory), the following tests shall be applied: (1) First test that to which the other has been united as ornament or for its use or perfection is the principal, the thing added is the accessory;380 (2) Second test if the rst test cannot be applied, then the thing of greater value is the principal and the other the accessory;381
Art. 471, NCC. Art. 467, NCC. 381 Art. 468, NCC.
379 380
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(3) Third test if both things are of equal value, then the one of greater volume is the principal and the other the accessory.382 However, in the case of painting, sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone, canvas, paper or parchment shall be deemed the accessory thing.383
Art. 472. If by the will of the owners two things of the same or different kinds are mixed, or if the mixture occurs by chance, and in the latter case the things are not separable without injury, each owner shall acquire a right proportional to the part belonging to him, bearing in mind the value of the things mixed or confused. (381) Art. 473. If by the will of only one owner, but in good faith, two things of the same or different kinds are mixed or confused, the rights of the owners shall be determined by the provisions of the preceding article. If the one who caused the mixture or confusion acted in bad faith, he shall lose the thing belonging to him thus mixed or confused, besides being obliged to pay indemnity for the damages caused to the owner of the other thing with which his own was mixed. (382)
58. Commixtion or Confusion

[58.1] Commixtion or Confusion, Explained
Commixtion or confusion refers to mixture of two or more things belonging to different owners. If the things mixed are solid, it is called commixtion; if the things are liquid, it is called confusion.
[58.2] Legal Effects of Commixtion or Confusion
The legal effects of commixtion or confusion are provided in Articles 472 and 473 of the New Civil Code. Based from these two Articles, the effects of commixtion or confusion shall depend on the manner by which the mixture occurs:
[58.2.1] Co-ownership
If the mixture takes place by reason of the following: (1) by will of both or all owners of the things mixed;384 (2) by will of only one owner
Art. 468, NCC. Art. 468, 2nd par., NCC. 384 Art. 472, NCC.
382 383
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acting in good faith;385 or (3) by chance or fortuitous event,386 a state of co-ownership with respect to the mixture shall arise and each owner shall acquire a right proportional to the part belonging to him, bearing in mind the value of the thing mixed or confused.387 Strictly speaking, the situations contemplated are not really cases of accession since the persons involved did not gain anything. Instead, these situations will give rise to a state of co-ownership.
[58.2.2] If Caused By Only One Owner Acting In Bad Faith
This situation, on the other hand, is a true case of accession. Pursuant to the provisions of the second paragraph of Article 473 of the New Civil Code, if the mixture is caused by only one owner acting in bad faith, he loses the thing belonging to him thus mixed or confused, besides being obliged to pay indemnity for the damages caused to the owner of the thing with which his own was mixed or confused.388
Art. 474. One who in good faith employs the material of another in whole or in part in order to make a thing of a different kind, shall appropriate the thing thus transformed as his own, indemnifying the owner of the material for its value. If the material is more precious than the transformed thing or is of more value, its owner may, at his option, appropriate the new thing to himself, after rst paying indemnity for the value of the work, or demand indemnity for the material. If in the making of the thing bad faith intervened, the owner of the material shall have the right to appropriate the work to himself without paying anything to the maker, or to demand of the latter that he indemnify him for the value of the material and the damages he may have suffered. However, the owner of the material cannot appropriate the work in case the value of the latter, for artistic or scientic reasons, is considerably more than that of the material. (383a) Art. 475. In the preceding articles, sentimental value shall be duly appreciated. (n)
Art. 473, 1st par., NCC. Art. 472, 1st par., NCC. 387 Arts. 472 and 473, 1st par., NCC. 388 Art. 473, 2nd par., NCC.
385 386
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59. Specication
[59.1] Specication, Explained
Specication takes place whenever the work of a person is done on the material of another, such material, in consequence of the work itself, undergoing a transformation.389 It is the imparting of a new form to the material of another person.390 Hence, specication involves: (1) the labor of the worker, and (2) the materials of another.
[59.2] Legal Effects
The legal effects of specication shall depend on the good faith or bad faith of the worker. Of course, the worker is in good faith if he honestly believed that the materials were his at the time that he made use of them; otherwise, he shall be considered in bad faith.
[59.2.1] If the Worker Acted In Good Faith
One who in good faith employs the material of another in whole or in part in order to make a thing of a different kind, shall appropriate the thing thus transformed as his own, indemnifying the owner of the material for its value.391 The exception to the foregoing rule is when the material is more precious than the transformed thing or more valuable, in which case, its owner may, at his option: (1) appropriate the new thing to himself after paying indemnity for the value of the work; or (2) demand indemnity for the material.392
[59.2.2] If the Worker Acted In Bad Faith
If in the making of the thing bad faith intervened, the owner of the material has two options: (1) to appropriate the work for himself without paying anything to the maker; or (2) to demand of the latter (worker) that he indemnify him for the value of the material and the damages he may have suffered.393
3 Manresa, 6th ed., 297. 3 Sanchez Roman 100. 391 Art. 474, 1st par., NCC. 392 Art. 474, 2nd par., NCC. 393 Art. 474, 3rd par., NCC.
389 390
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However, if the value of the work, for artistic or scientic reasons, is considerably more than that of the material, the owner of the material cannot appropriate the work.394 In such a case, the owner of the material can only demand from the worker the value of his materials and the damages he may have suffered. Chapter 3 QUIETING OF TITLE (n)
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein. Art. 477. The plaintiff must have legal or equitable title to, or interest in the real property which is the subject matter of the action. He need not be in possession of said property. Art. 478. There may also be an action to quiet title or remove a cloud therefrom when the contract, instrument or other obligation has been extinguished or has terminated, or has been barred by extinctive prescription. Art. 479. The plaintiff must return to the defendant all benets he may have received from the latter, or reimburse him for expenses that may have redounded to the plaintiffs benet. Art. 480. The principles of the general law on the quieting of title are hereby adopted insofar as they are not in conict with this Code. Art. 481. The procedure for the quieting of title or the removal of a cloud therefrom shall be governed by such rules of court as the Supreme Court shall promulgate.
60. Quieting of Title

[60.1] Action to Quiet Title
Quieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real
394
Art. 474, last par., Civil Code.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION OWNERSHIP Quieting of Title (n)
263
property.395 Originating in equity jurisprudence, its purpose is to secure an adjudication that a claim of title to or an interest in property, adverse to that of the complainant, is invalid, so that the complainant and those claiming under him may be forever afterward free from any danger of hostile claim.396 In an action for quieting of title, the competent court is tasked to determine the respective rights of the complainant and other claimants, not only to place things in their proper place, to make the one who has no rights to said immovable respect and not disturb the other, but also for the benet of both, so that he who has the right would see every cloud of doubt over the property dissipated, and he could afterwards without fear introduce the improvements he may desire, to use, and even to abuse the property as he deems best.397 Such remedy may be availed of under the circumstances enumerated in Article 476 of the New Civil Code, as follows: Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein. In Realty Sales Enterprises v. IAC,398 the Supreme Court held that suits to quiet title are not technically suits in rem, nor are they, strictly speaking, in personam, but being against the person in respect of the res, these proceedings are characterized as quasi in rem and the judgment in such proceedings is conclusive only between the parties.399
395 Baricuatro v. CA, 325 SCRA 137 (2000), citing Vda. de Aviles v. Court of Appeals, 264 SCRA 473, 478 (1996); see also Divinagracia v. Cometa, 482 SCRA 648, 654 (2006) and Calacala, et al. v. Republic of the Philippines, G.R. No. 154415, July 28, 2005. 396 Id., citing II Tolentino, Civil Code, 137. 397 Id., citing II Paras, Civil Code, 13th ed., 270. 398 154 SCRA 328, 348 (1987). 399 See also Seville v. National Development Company, 351 SCRA 112.
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[60.2] Requisites of Action to Quiet Title
For an action to quiet title to prosper, the following indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action;400 (2) there is a cloud on title to real property or any interest therein;401 and (3) the deed, claim, encumbrance or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efcacy.402
[60.2.1] Legal or Equitable Title
For an action for quieting of title to prosper, it is essential for the plaintiff or complainant to have a legal title or an equitable title to or interest in the real property which is the subject matter of the action.403 On this score, the Civil Code of the Philippines provides: Art. 477. The plaintiff must have legal or equitable title to, or interest in the real property which is the subjectmatter of the action. He need not be in possession of said property. It is not necessary, therefore, that the person seeking to quiet his title be the registered owner of the property in question.404 When Article 477 speaks of title to property, it does not necessarily denote a certicate of title issued in favor of the person ling the suit.405 It can connote acquisitive prescription by possession in the concept of an owner thereof.406 Hence, in Chacon Enterprises v. Court of Appeals,407 the Court considered the action to be one for quieting of title where the plaintiffs alleged ownership and actual possession since time immemorial of the property in question by themselves and through their predecessors-ininterest, while defendants secured a certicate of title over said property through fraud, misrepresentation and deceit. Indeed, under Article 477,
Calacala, et al. v. Republic of the Philippines, supra. MBTC v. Alejo, 364 SCRA 812. 402 Calacala, et al. v. Republic of the Philippines, supra. 403 Id., See also Robles v. CA, 328 SCRA 97, 108-109. 404 Mamadsual v. Moson, 190 SCRA 82. 405 Maestrado v. CA, 327 SCRA 678, 689; also in Mamadsual v. Moson, supra. 406 Mamadsual v. Moson, supra. 407 124 SCRA 784 (1983).
400 401
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one who has an equitable right or interest in the property may also le an action to quiet title.408
[60.2.2] Cloud on Title
Equally important, an action for quieting of title is led only when there is a cloud on title to real property or any interest therein.409 As dened, a cloud on title is a semblance of title which appears in some legal form but which is in fact unfounded.410 In the case of Metropolitan Bank and Trust Company v. Alejo,411 the Supreme Court held that an action to quiet title is not an appropriate remedy there being no cloud on Metrobanks title. In this case, the Spouses Acampado were borrowers of Metrobank, for which reason they executed a real estate mortgage in favor of the bank as security for their mortgage indebtedness. The said mortgage was registered and annotated on the title of the property subject matter thereof. Subsequently thereafter, a third person led an action against the Spouses Acampado for declaration of the latters title, for which a favorable judgment was obtained by said third person. Despite being the registered mortgagee of the subject property, Metrobank was not notied of the existence of the said proceedings. Because of the failure of the Spouses Acampado to pay their mortgage obligation, Metrobank foreclosed the mortgage and when it was about to consolidate its ownership over the foreclosed property, it learned of the existence of the decision annulling the title of the Spouses Acampado. Upon such discovery, Metrobank led a petition for annulment of judgment before the Court of Appeals to declare the judgment of the Regional Trial Court null and void. However, the Court of Appeals dismissed the petition of Metrobank on the ground, among others, that the bank should have led a petition for relief from judgment or an action for quieting of title before the Regional Trial Court instead of the petition for annulment of judgment. On appeal, the Supreme Court held that an action to quite title is not an appropriate remedy in this situation. The Court explained Equally important, an action for quieting of title is led only when there is a cloud on title to real property or any
Mamadsual v. Moson, supra. MBTC v. Alejo, supra. 410 Id., citing II Tolentino, Civil Code, 1992 ed., 150. 411 Supra.
408 409
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interest therein. As dened, a cloud on title is a semblance of title which appears in some legal form but which is in fact unfounded. In this case, the subject judgment cannot be considered as a cloud on petitioners title or interest over the real property covered by TCT No. V-41319, which does not even have a semblance of being a title. It would not be proper to consider the subject judgment as a cloud that would warrant the ling of an action for quieting of title, because to do so would require the court hearing the action to modify or interfere with the judgment or order of another co-equal court. Well-entrenched in our jurisdiction is the doctrine that a court has no power to do so, as that action may lead to confusion and seriously hinder the administration of justice. Clearly, an action for quieting of title is not an appropriate remedy in this case. In ne, to avail of the remedy of quieting of title, a plaintiff must show that there is an instrument, record, claim, encumbrance or proceeding which constitutes or casts a cloud, doubt, question or shadow upon the owners title to or interest in real property.412 The ground or reason for ling a complaint for quieting of title must therefore be an instrument, record, claim, encumbrance or proceeding.413 Under the maxim expresio unius est exclusio alterius, these grounds are exclusive so that other reasons outside of the purview of these reasons may not be considered valid for the same action. Consequently, in the cases of Vda. de Aviles v. Court of Appeals, supra, and Titong v. Court of Appeals, supra, the Court held that an action for quieting of title may not be brought for the purpose of settling a boundary dispute. In Vda. de Aviles, the Court explained further From another perspective, we hold that the trial court (and likewise the respondent Court) cannot, in an action for quieting of title, order the determination of the boundaries of the claimed property, as that would be tantamount to awarding to one or some of the parties the disputed property in an
412 413
Vda. de Aviles v. CA, 264 SCRA 473; also in Titong v. CA, 278 SCRA 102. Titong v. CA, supra., citing Vda. de Aviles v. CA, supra.
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action where the sole issue is limited to whether the instrument, record, claim, encumbrance or proceeding involved constitutes a cloud upon the petitioners interest or title in and to said property. Such determination of boundaries is appropriate in adversarial proceedings where possession or ownership may properly be considered and where evidence aliunde, other than the instrument, record, claim, encumbrance or proceeding itself, may be introduced. An action for forcible entry, whenever warranted by the period prescribed in Rule 70, or for recovery of possession de facto, also within the prescribed period, may be availed of by the petitioners, in which proceeding the boundary dispute may be fully threshed out. The foregoing rule, however, is subject to qualication. As a general rule, a cloud which may be removed by suit to quiet title is not created by mere verbal or parol assertion of ownership of or an interest in property.414 Where there is a written or factual basis for the asserted right, the same will be sufcient.415 Thus, a claim of right based on acquisitive prescription or adverse possession has been held to constitute a removable cloud on title.416
[60.2.3] Deed, Claim, Etc. Must Be Invalid or Inoperative
Also, for an action for quieting of title to prosper the deed, claim, encumbrance or proceeding that is being alleged as a cloud on plaintiffs title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efcacy.417 This requirement is clear from the provision of Article 476.
[60.3] Prescription
In an action to quiet title, the plaintiff need not be in possession of the property.418 If the plaintiff in an action for quieting of title,
414 Tandog, et al. v. Macapagal, et al., G.R. No. 144208, Sep. 11, 2007; citing II Tolentino, Civil Code, 152. 415 Id. 416 Id. 417 Calacala, et al. v. Republic of the Philippines, supra. 418 Art. 477, NCC.
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however, is in possession of the property being litigated, the action is imprescriptible.419 The rationale for this rule has been aptly stated thus: The owner of real property who is in possession thereof may wait until his possession is invaded or his title is attacked before taking steps to vindicate his right. A person claiming title to real property, but not in possession thereof, must act afrmatively and within the time provided by the statute. Possession is a continuing right as is the right to defend such possession. So it has been determined that an owner of real property in possession has a continuing right to invoke a court of equity to remove a cloud that is a continuing menace to his title. Such a menace is compared to a continuing nuisance or trespass which is treated as successive nuisances or trespasses, not barred by statute until continued without interruption for a length of time sufcient to affect a change of title as a matter of law.420 The rule that the Statute of Limitations is not available as a defense to an action to remove a cloud from title can only be invoked by a complainant when he is in possession. One who claims property which is in the possession of another must, it seems, invoke his remedy within the statutory period.421 Even if the complaint of the plaintiff is captioned or denominated as one for Annulment of Title and/or Reconveyance422 or one to compel the defendant to execute a deed of conveyance423 but the averments therein show that plaintiff is claiming lawful ownership of the property, is in actual possession and seeks to remove a cloud over his title, the action is to be considered as an action for quieting of title or removal of a cloud over such title and as plaintiff is in possession of the land, the action is imprescriptible.424 It is a settled rule that it is not the caption of the pleading, but the allegations thereof that determines the nature of
419 Sapto v. Fabiana, 103 Phil. 683; Faja v. CA, 75 SCRA 441, 446 (1977); David v. Malay, 318 SCRA 711. 420 Pingol v. CA, 226 SCRA 118, 129-130; See also Faja v. CA, supra. 421 Mamadsual v. Moson, supra, 88. 422 See Chacon Enterprises v. CA, G.R. No. L-46418-19, Sept. 29, 1983. 423 See Gallar v. Husain, 20 SCRA 186. 424 Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION OWNERSHIP Ruinous Buildings and Trees in Danger of Falling
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the action; that even without the prayer for a specic remedy, proper relief may nevertheless be granted by the court if the facts alleged in the complaint and the evidence introduced so warrant.425 Chapter 4 RUINOUS BUILDINGS AND TREES IN DANGER OF FALLING
Art. 482. If a building, wall, column, or any other construction is in danger of falling, the owner shall be obliged to demolish it or to execute the necessary work in order to prevent it from falling. If the proprietor does not comply with this obligation, the administrative authorities may order the demolition of the structure at the expense of the owner, or take measures to insure public safety. (389a) Art. 483. Whenever a large tree threatens to fall in such a way as to cause damage to the land or tenement of another or to travellers over a public or private road, the owner of the tree shall be obliged to fell and remove it; and should he not do so, it shall be done at his expense by order of the administrative authorities. (390a)
61. Ruinous Buildings and Falling Trees

[61.1] Exercise of Police Power
The provisions of Articles 482 and 483 are necessary consequences of the limitations inherent in the exercise of the right of ownership. As discussed in supra 37.3, every holder of property holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community.426 As a consequence, if the property of a person poses danger to other people or their property, such as in the situations contemplated in Articles 482 and 483, the State may validly exercise its police power to prevent the occurrence of such injury.
Chacon Enterprises v. CA, supra, citing Ras v. Sua, L-23302, Sept. 25, 1968, 25 SCRA 153, 158-159, citing People v. Matondo, February 24, 1961; Cajefe v. Fernandez, Oct. 19, 1960; Rosales v. Reyes, 25 Phil. 495; Ibaez de Baranueva v. Fuster, 29 Phil. 606; Cabigao v. Lim, 50 Phil. 844. 426 Case v. Board of Health, 24 Phil. 250.
425
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[61.2] Obligations of Owners of Ruinous Buildings
Owners of buildings, walls, columns or other constructions in danger of falling are obliged to either demolish it or to execute the necessary work in order to prevent it from falling.427 If he does not comply with this obligation, the administrative authorities may order the demolition of the structure at his expense, or to take measures to insure public safety.428 Since this is an exercise of the police power of the State intended to secure public safety, the condemnation of the property is not compensable. As stated in supra 37.1.1, in police power, if property is condemned for the purpose of promoting the general welfare, the owner does not recover from the government for injury sustained in consequence thereof. Further, if by reason of lack of necessary repairs, a building or structure causes damage resulting from its total or partial collapse, the proprietor thereof shall be responsible for the damages.429 However, if the reason for the collapse should be any defect in the construction mentioned in Article 1723,430 the liability shall fall upon the engineer or architect or contractor in accordance with the said article, within the period therein xed.431
[61.3] Obligations of Owners of Falling Trees
Whenever a large tree threatens to fall in such a way as to cause damage to the land or tenement of another or to travellers over a public or private road, the owner of the tree shall be obliged to fell and remove it; and should he not do so, it should be done at his expense by order of the administrative authorities.432
Art. 482, par. 1, NCC. Art. 482, par. 2, NCC. 429 Art. 2190, NCC. 430 Art. 1723. The engineer or architect who drew up the plans and specications for a building is liable for damages if within fteen years from the completion of the structure, the same should collapse by reason of a defect in those plans and specications, or due to the defects in the ground. The contractor is likewise responsible for the damages if the edice falls, within the same period, on account of defects in the construction or the use of materials of inferior quality furnished by him, or due to any violation of the terms of the contract. If the engineer or architect supervises the construction, he shall be solidarily liable with the contractor. Acceptance of the building, after completion, does not imply waiver of any of the cause of action by reason of any defect mentioned in the preceding paragraph. The action must be brought within ten years following the collapse of the building. (n) 431 Art. 2192, NCC. 432 Art. 483, NCC.
427 428
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In paragraph 3 of Article 2191 of the New Civil Code, proprietors are liable for the falling of trees situated at or near highways or lanes, if the same is not caused by force majeure. Note, however, that if it is the tree contemplated under Article 483 which falls and causes damage to another, the owner thereof shall be deemed liable even if the reason for the fall be fortuitous event, such as typhoon or earthquake, because in this case the owner is already negligent for failing to take the necessary measures to insure public safety.
Capili v. Sps. Cardaa G.R. No. 157906, Nov. 2, 2006 On February 1, 1993, Jasmin Cardaa was walking along the perimeter fence of the San Roque Elementary School when a branch of a caimito tree located within the school premises fell on her, causing her instantaneous death. Her parents sued the principal of the school for damages. It turned out that as early as December 15, 1992, a resident of the barangay already reported to the said principal on the possible danger the tree posed to passersby but the latter did nothing. The Court, in this case, held the principal liable for damages because of her negligence. The Court explained: The probability that the branches of a dead and rotting tree could fall and harm someone is clearly a danger that is foreseeable. As the school principal, petitioner was tasked to see to the maintenance of the school grounds and safety of the children within the school and its premises. That she was unaware of the rotten state of a tree whose falling branch had caused the death of a child speaks ill of her discharge of the responsibility of her position.
oOo
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Title III. CO-OWNERSHIP

Art. 484. There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. In default of contracts, or of special provisions, co-ownership shall be governed by the provisions of this Title. (392)
62. In General
[62.1] Denition
Sanchez Roman denes co-ownership as the right of common dominion which two or more persons have in a spiritual part of a thing, not materially or physically divided.1 Manresa, on the other hand, denes it as the manifestation of the private right of ownership, which instead of being exercised by the owner in an exclusive manner over the thing subject to it, it is exercised by two or more owners and the undivided thing or right to which it refers is one and the same.2
[62.2] Requisites of Co-ownership
There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons.3 Hence, in order that a coownership may exist the following requisites must concur:
[62.2.1] Plurality of Subjects
There must be plurality of subjects, who are the co-owners.4 The regime of co-ownership exists when ownership of an undivided thing or right belongs to different persons.5 Thus, co-ownership is a
1 3 Sanchez Roman 162, cited in Sanchez v. Court of Appeals, 404 SCRA 540, 547 (June 20, 2003). 2 3 Manresa 401, cited in Sanchez v. CA, supra, 547. 3 Art. 484, 1st par., NCC. 4 Sanchez v. Court of Appeals, supra, 547. 5 Vda. de Ape v. Court of Appeals, 456 SCRA 193, 2007 (2005), citing Felices v. Colegado, 35 SCRA 173.
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manifestation of the private right of dominion, where in lieu of its being exercised by the owner in an inclusive manner over things or rights, there are two or more owners.6
[62.2.2] Unity of the Object
There must be unity of the object (or material indivision), which means that there is a single object which is not materially divided, and which is the element which binds the subjects.7 The juridical concept of co-ownership is unity of the object or property and plurality of subjects.8 As a consequence, a co-owner of an undivided parcel of land is an owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract.9 Hence, each co-owner of property which is held pro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his co-owners.10 The underlying rationale is that until a division is made, the respective share of each cannot be determined and every co-owner exercises, together with his co-participants, joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same.11 The foregoing being the case, there is no coownership when the different portions owned by different people are already concretely determined and separately identiable, even if not yet technically described.12
[62.2.3] Recognition of Ideal Share
There must be recognition of ideal shares, which determines the rights and obligations of the co-owners.13 It is a basic principle in civil law that before a property owned in common is actually partitioned, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire property.14
3 Manresa, 6th ed., 386. Sanchez v. Court of Appeals, supra, p. 547. 8 Gapacan v. Omipet, 387 SCRA 383. 9 De Guia v. Court of Appeals, 413 SCRA 114, 124, Oct. 8, 2003. 10 Alejandrino v. Court of Appeals, 295 SCRA 536, 548, Sept. 17, 1998. 11 Id., citing Aguilar v. Court of Appeals, 227 SCRA 472, 480, Oct. 29, 1993. 12 Si v. Court of Appeals, 342 SCRA 653, 661, Oct. 12, 2000, citing Dela Cruz v. Cruz, 32 SCRA 307, 311 (1970). 13 Sanchez v. Court of Appeals, supra, p. 547. 14 Engreso v. Court of Appeals, 401 SCRA 217, 220, April 9, 2003.
6 7
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[62.3] Dual Nature of Ownership in Co-Ownership
There are two kinds of ownership that exists in any co-ownership, as follows:
[62.3.1] Ownership Over the Ideal Share
There exists in favor of each co-owner a portion which is denite in amount but not physically and actually identied, the same being merely ideal.15 With respect to this ideal or abstract share, a co-owner exercises absolute ownership and he may, therefore, dispose of it in any manner he pleases.16 This is recognized in Article 493 of the Code which says that each co-owner shall have the full ownership of his part and of the fruits and benets pertaining thereto and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. x x x
[62.3.2] Joint Ownership Over the Whole
At the same time, each co-owner is also considered as the owner of the whole and over the whole he exercises the right of dominion.17 The underlying reason for this is that until a division is made, the respective share of each cannot be determined.18 However, with respect to the whole or the pro indiviso property, every co-owner exercises joint ownership together with his co-participants.19 For this reason, mutual respect is observed by the co-owners in regard to the use, enjoyment and preservation of the thing as a whole.20 This principle is recognized in Article 486 of the Code which says that each co-owner may use the thing owned in common, provided he does so in accordance with the purpose for which it is intended and in such a way as not to injure the interest of the co-ownership or prevent the other co-owners from using it according to their rights. xxx
[62.4] Effect of Division or Partition
The co-ownership exists so long as the property remains undivided. Once partition is effected or once the property is subdivided
3 Manresa, 6th ed., 344. Id. 17 De Guia v. Court of Appeals, supra, 124. 18 Alejandrino v. Court of Appeals, supra, 548. 19 Id. 20 3 Manresa, 6th ed., 344.
15 16
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and distributed among the co-owners, the co-ownership is terminated.21 Thus, there is no co-ownership when the different portions owned by different people are already concretely determined and separately identiable, even if not yet technically described.22 By way of illustration, the exercise of the right of legal redemption granted under Article 1620 of the Civil Code presupposes the existence of co-ownership at the time the conveyance is made by a co-owner and when it is demanded by the other co-owner or co-owners.23 Hence, where the property had already been partitioned judicially or extrajudicially24 or where the portion belonging to the parties has been identied and localized,25 the right of legal redemption cannot be invoked. [62.5] A Co-Owner Cannot Claim A Denite Portion
By the nature of co-ownership, a co-owner cannot point to specic portion of the property owned in common as his own because his share therein remains intangible.26 During the existence of the co-ownership, therefore, no co-owner can claim title to any denite portion of the community property until the partition thereof, and prior to the partition, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire land or thing.27 In Vda. de Cabrera v. Court of Appeals,28 however, the Supreme Court had the occasion to hold that where the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a denite portion thereof, the possessor is in a better condition or right than said transferees. (Potior est condition possidentis). Such undisturbed possession, according to the Court, had the effect of a partial partition of the co-owned property which entitles the possessor to the denite portion which he occupies.
21 See Dela Cruz v. Cruz, 32 SCRA 307 (April 17, 1970); Umengan v. Butacan, 7 SCRA 311 (Feb. 28, 1963); Salatandol v. Retes, G.R. No. L-38120, June 28, 1988; Hernandez v. Quitain, 168 SCRA 92 (Nov. 29, 1988). 22 De Guia v. Court of Appeals, 413 SCRA 114, 124-125, Oct. 8, 2003, citing Si v. CA, 342 SCRA 653, Oct. 12, 2000. 23 Uy v. CA, 246 SCRA 703, 711, July 20, 1995. 24 Umengan v. Butacan, 7 SCRA 311, Feb. 28, 1963. 25 Salatandol v. Retes, 162 SCRA 568, June 28, 1988. 26 Vda. de Ape v. Court of Appeals, supra, 207. 27 City of Mandaluyong v. Aguilar, supra, p. 499. 28 267 SCRA 339, February 3, 1997; see also Del Campo v. Court of Appeals, 351 SCRA 1, February 1, 2001.
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Vda. de Cabrera v. Court of Appeals 267 SCRA 339, Feb. 3, 1997 The siblings Daniel, Albertana and Felicidad, all surnamed Teokemian, owned in common a parcel of land which they inherited from their father. On January 16, 1950, Daniel and Albertana, without the participation of Felicidad, executed a deed of sale in favor of Andres Orais, over a parcel of unregistered land with an area described as 7.3720 hectares. On January 26, 1950, the land was surveyed in the name of Virgilia Orais, daughter of Andres, and denominated as Lot No. 2239, PLS-287, Cateel Cadastre. As surveyed, it had an area of 11.1000 hectares. On June 24, 1957, Virgilia Orais was issued a free patent over the land. Thereafter, she was likewise issued an original certicate of title. Notwithstanding such sale and issuance of title in the name of Virgilia Orais, Felicidad Teokemian remained in possession of the one-third possession of the inherited property. She had been in possession of that portion since it was left to her by her father in 1941. On July 27, 1972, the one-third portion occupied by Felicidad Teokemian was sold to Elano Cabrera, husband of Felicidad Cabrera, who immediately took possession of the same. When Virgilia Orais learned that the Cabreras were occupying a portion of the subject property, the former led an action for quieting of title against Felicidad Cabrera, who was already a widow at that time. The Supreme Court held that the action led, which is actually for reconveyance, was already barred by laches considering that it was led only after thirty years from the time that the certicate of title was obtained in 1950. Responding to the contention raised by Virgilia Orais that laches does not apply since what was sold to the Cabreras was a denite portion of the community property, and, therefore, void, the Court held The argument that laches does not apply because what was sold to the Cabreras was a denite portion of the community property, and, therefore, void, is likewise untenable. Under Article 493 of the Civil Code: Each co-owner shall have the full ownership of his part and of the fruits and benets pertaining thereto, and even he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the coownership.
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In Go Ong v. Court of Appeals, this Court ruled that the heirs, as co-owners, shall each have the full ownership of his part and the fruits and benets pertaining to it. An heir may, therefore, alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Undisputed is the fact that since the sale of the two-third portion of the subject property to the plaintiff, the latter had allowed Felicidad Teokemian to occupy that one-third portion allotted to her. There has, therefore, been a partial partition, where the transferees of an undivided portion of the land allowed a coowner of the property to occupy a denite portion thereof and has not disturbed the same, for a period too long to be ignored the possessor is in a better condition or right (Potior est conditio possidentis). Clearly, the plaintiff in this instance is barred from asserting her alleged right over the portion subject matter in the instant case on the ground that their right has been lost by laches. In BailonCasilao v. Court of Appeals, we ruled that: As early as 1923, this Court has ruled that even if a coowner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale (Punzalan v. Boon Liat, 44 Phil. 320 [1923]). This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the things owned in common (Ramirez v. Bautista, 14 Phil. 528 [1909]). xxx For Article 494 of the Civil Code explicitly declares: No prescription shall lie in favor of a co-owner or co-heir so long as he expressly or impliedly recognizes the co-ownership. [62.6] Distinguished From Partnership
Co-ownership does not of itself establish a partnership, whether such co-owners do or do not share any prots made by the use of the property.29 These two concepts are not identical and they may be distinguished from each other, as follows:
29
Art. 1769(2), NCC.
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(1) As to creation: Co-ownership may exist without the necessity of a contract. As will be discussed in infra 62.7, a co-ownership is created not only by reason of contracts. A partnership, on the other hand, requires the existence of a contract in order to arise. The denition by the Civil Code of a partnership refers to it as a contract.30 (2) As to personality: A co-ownership does not possess a juridical personality distinct from the co-owners. On the other hand, the partnership has a juridical personality separate and distinct from that of each of the partners.31 (3) As to purpose: In order to constitute a partnership, it is important that there must be an agreement to divide the prots among the partners.32 Hence, the idea of common prot that may be derived from the things or services contributed to the partnership is an essential feature thereof. This is absent, however, in co-ownership, which is only for the purpose of common enjoyment of the thing owned in common. (4) As to duration: In co-ownership, an agreement not to divide the property for more than ten (10) years is not valid with respect to the excess;33 whereas, in partnership there is no limit as to the time of its existence. (5) As to the effect of death: In co-ownership, the death of a coowner does not dissolve the co-ownership, but in partnership the death of a partner brings about the dissolution of the partnership.34 (6) As to the disposal of share: In co-ownership, a co-owner may freely dispose of his share35 but a partner has no power of disposal so as to make the buyer a partner unless agreed upon by all the other partners.36
30 Art. 1767. By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the prots among themselves. Two or more persons may also form a partnership for the exercise of a profession. (1665a) 31 Art. 1768, NCC. 32 Art. 1767, NCC. 33 Art. 494, 2nd par., NCC. 34 Art. 1830(5), NCC. 35 Art. 493, NCC. 36 Art. 1813, NCC.
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(7) As to the power to act with third persons: In co-ownership, a co-owner does not represent the co-ownership but a partner usually represents the partnership and may bind the partnership.
[62.7] Sources of Co-ownership
Co-ownership may be created by any of the following causes: (1) By law: Examples: (a) Co-ownership will arise if by the will of their owners two things of the same kind or different kinds are mixed.37 Co-ownership will likewise arise if by the will of only one owner, but in good faith, two things of the same or different kinds are mixed or confused.38 When a man and woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benet of marriage or under a void marriage, the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership.39 In cases of cohabitation not falling under Article 147 of the Family Code, only the properties acquired by both of the parties though their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions.40
(b)
(2) By contract: An agreement to keep the thing undivided for a certain period, not exceeding ten years, shall be valid. This term may be extended by a new agreement.41 (3) By succession: Where there are two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs, subject to the payment of debts of the deceased.42 The testator may
Art. 472, NCC. Art. 473, NCC. 39 Art. 147, Family Code of the Philippines. 40 Art. 148, Family Code of the Philippines. 41 Art. 494, 2nd par., NCC. 42 Art. 1078, NCC.
37 38
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likewise prohibit the partition of the estate among the heirs for a period not to exceed twenty (20) years.43 (4) By fortuitous event or chance: Co-ownership will arise if two things of the same kind or different kinds are mixed by chance and the things are not separable without injury.44 (5) By occupancy: As when two or more persons catch a wild pig or get forest products45 or when a hidden treasure is accidentally discovered by a stranger, who is not a trespasser, on the land of another.46
[62.8] Rules Governing Co-Ownership
The rules that shall govern a particular co-ownership will depend on the source thereof, as follows:
[62.8.1] Contract
If the source of co-ownership is a contract, such co-ownership is to be governed primarily by the contract between the parties and, in default thereof, by the provisions of Articles 484 to 501 of the New Civil Code.47
[62.8.2] Special Provisions of Law
If the co-ownership is governed by special provisions of law, such provisions shall primarily govern the co-ownership while the provisions of Articles 484 to 501 shall be applied only in a suppletory character.48 In the property regime known as the absolute community, for example, the spouses are considered co-owners of all property brought into and acquired during the marriage which are not otherwise excluded from the community property either by the provisions of the Family Code or by the marriage settlement.49 If the regime of absolute community applies to the spouses by default pursuant to the provisions of Article 75 of the Family Code, then the provisions of the Family Code on absolute
Art. 1083, NCC. Art. 472, NCC. 45 Punzalan v. Boon Liat, 44 Phil. 320. 46 Art. 438, 2nd par., NCC. 47 See Art. 484, 2nd par., NCC. 48 Art. 484, 2nd par., NCC. 49 See Rabuya, The Law on Persons and Family Relations, 2006 ed., 421.
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community shall primarily govern50 and the provisions of the Civil Code on co-ownership shall apply in a suppletory manner.51 The applicability of the provisions of the Civil Code on co-ownership to the regime of absolute community is recognition that this regime is a special kind of co-ownership.52 Under the provisions of the Civil Code on co-ownership, it is provided that if the co-ownership is created by law, such kind of coownership shall be governed primarily by the special provisions of law creating it and the provisions of the Civil Code on co-ownership shall only apply in a suppletory manner.53
Art. 485. The share of the co-owners, in the benets as well as in the charges, shall be proportional to their respective interests. Any stipulation in a contract to the contrary shall be void. The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved. (393a)
63. Share in Benets and Charges

[63.1] Determining the Ideal Share of Each Co-Owner
The share of each co-owner in the co-ownership is that provided for in the law governing such kind of co-ownership. For example, in confusion or commixtion that occurs through chance or through the will of one of the parties acting in good faith, the share of each co-owner is in proportion to the part belonging to him, bearing in mind the value of the things mixed or confused.54 Also, the share of the nder, who is not a trespasser, and the owner of the property where the hidden treasure is found by chance, is provided for by law, in that, each shall be entitled to one-half of such treasure.55 If the source of co-ownership, however, is contract, the share of the co-owner in the thing itself may depend on their agreement and, in default thereof, it is presumed to be equal in the absence of proof to the contrary.56 To illustrate: Pedro, Juan and Jose decide to buy a house
Id., 422, citing Art. 74(2), Family Code. Id., 422, citing Art. 90, Family Code. 52 Id., 422. 53 Id., 422, citing Art. 484, 2nd par., NCC. 54 Arts. 472 and 473, NCC. 55 Art. 438, 2nd par., NCC. 56 Art. 485, 2nd par., NCC; see also Lavadia v. Cosme, 72 Phil. 196.
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and lot in the amount of P900,000.00. They may agree in any manner as to how much each shall contribute. They may agree, for example, that Pedro shall contribute P450,000 (50%), Juan P225,000 (25%) and Jose P225,000 (25%). Notwithstanding such manner of contribution, the parties may nonetheless agree that their respective share in the coownership shall be equal. In the absent of such contrary agreement, it is understood that the share of each co-owner shall be in proportion to their respective contributions. The presumption of equal sharing does not apply in this case since there is proof to the contrary.
[63.2] Determining the Share In Benets and Charges
The Civil Code declares that the share of the co-owners, in the benets as well as in the charges, shall be proportional to their respective interests in the co-ownership.57 In the above example, if the co-owners have agreed that their share in the co-ownership shall be in proportion to their respective contributions, then all benets and charges shall likewise be divided among them in proportion to their share in the capital. Thus, if they will earn monthly rental income in the amount of P30,000 from the co-owned property, Pedro shall be entitled to P15,000 (50%), Juan P7,500 (25%) and Jose P75,000 (25%). In the same way, if they will incur real estate tax obligation in the sum of P9,000, Pedro will have to shoulder P4,500 (50%), Juan P2,250 (25%) and Jose P2,250 (25%).
[63.3] Any Stipulation To The Contrary Is Void
As discussed earlier, the share of each co-owner in the benets as well as in the charges should be proportional to their respective interests in the co-ownership. The Civil Code further declares that any stipulation to the contrary shall be void.58 Thus, in the above example, Pedro, Juan and Jose may not agree that they shall share equally in the rental income and in the payment of the real estate tax. Such agreement is void.
Art. 486. Each co-owner may use the thing owned in common, provided he does so in accordance with the purpose for which it is intended
57 58
Art. 485, 1st par., NCC. Id.
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and in such a way as not to injure the interest of the co-ownership or prevent the other co-owners from using it according to their rights. The purpose of the co-ownership may be changed by agreement, express or implied. (394a)
64. Right Over the Entire Property

[64.1] Nature of Co-Owners Right Over the Entire Thing or Right
A co-owner of an undivided thing or right is an owner of the whole and over the whole he exercises the right of dominion.59 However, with respect to the whole, a co-owner exercises, together with his coparticipants (or co-owners) joint ownership over the co-owned property, the reason being that until a division is made, the respective share of each cannot as yet be determined.60 As a consequence, each co-owner has the right to make use of the entire thing owned in common61 subject to the limitations provided for in Article 486 of the Civil Code. Thus, the right of enjoyment by each co-owner is limited by a similar right of the other co-owners.62
[64.2] Use of the Thing Owned in Common
A co-owner may use the entire thing so long as the use is in accordance with the purpose for which it is intended and in a manner not injurious to the interest of the other co-owners.63 Each co-owner of property held pro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his co-owners, the reason being that until a division is made, the respective share of each cannot be determined and every co-owner exercises, together with his co-participants joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same.64
De Guia v. CA, 413 SCRA 114, 124 (2003). Aguilar v. CA, 227 SCRA 473, 480 (1993). 61 Art. 486, NCC. 62 De Guia v. CA, supra, p. 127. 63 Art. 486, NCC. 64 Aguilar v. CA, 227 SCRA 473, 480, Oct. 29, 1993, citing Pardell v. Matilde, 23 Phil. 450
59 60
(1912).
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Pardell v. Bartolome 23 Phil. 450 (1912) In this case, the sisters Matilde and Vicenta Ortiz (plaintiff) were coowners of a two-storey house designed as a dwelling. Matilde (defendant) and her husband occupied the upper oor as their dwelling. The husband also occupied the upper oor on the ground oor as an ofce while the other rooms were rented as stores. Meanwhile, plaintiff and her husband were living abroad and upon their return an accounting of rents was made to them. The question arose as to whether or not defendants should pay rent for the upper oor occupied by them as well as that portion occupied by the husband. Ruling: With regard to that part occupied by Matilde as dwelling, no rental can be collected inasmuch as she, being the co-owner, is entitled to use the same. With respect, however, to that portion occupied by the husband, Bartolome, the latter must pay one-half of the rentals which said quarters could and should have produced had they have been rented to strangers, inasmuch as he is not a co-owner of the property. [64.3] Limitations on the Right to Use
Although each co-owner is the owner of the whole thing prior to partition and may make use of the entire thing, such use is, however, subject to the following limitations: (1) such use must be in accordance with the purpose for which the thing is intended; (2) such use must be without prejudice to the rights of the other co-owners; and (3) such use must not be in a manner as to prevent the other co-owners from using the thing according to their own right.65 The right of enjoyment by each co-owner is limited by a similar right of the other co-owners. Thus, a co-owner cannot devote common property to his exclusive use to the prejudice of the co-ownership.66 Hence, if the subject is a residential house, all the co-owners may live there with their respective families to the extent possible. However, if one co-owner alone occupies the entire house without opposition from the other co-owners, and there is no lease agreement, the other coowners cannot demand the payment of rent.67 Conversely, if there is an
Art. 486, NCC. De Guia v. Court of Appeals, 413 SCRA 114, 127, Oct. 8, 2003, citing Tolentino, Civil Code of the Philippines, Vol. II, 1992 ed. 67 Id.
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agreement to lease the house, the co-owners can demand rent from the co-owner who dwells in the house.68 The co-owners can either exercise an equal right to live in the house, or agree to lease it. If they fail to exercise any of these options, they must bear the consequences. It would be unjust to require the coowner to pay rent after the co-owners by their silence have allowed him to use the property.69 In case the co-owners agree to lease a building owned in common, a co-owner cannot retain it for his use without paying the proper rent.70 Moreover, where part of the property is occupied exclusively by some co-owners for the exploitation of an industry, the other co-owners become co-participants in the accessions of the property and should share in its net prots.71
Aguilar v. Court of Appeals 227 SCRA 473 (1993) In this case, the brothers Virgilio and Senen Aguilar purchased a house and lot in 1968 for the use of their father. The brothers agreed that Senen (respondent) shall assume the remaining obligation of the original owners with the Social Security System in exchange for his possession and enjoyment of the house together with their father. Since Virgilio (petitioner) was then disqualied from obtaining a loan from SSS, the brothers agreed that the deed of sale would be executed and the title registered in the meantime in the name of Senen. After their father died in 1974, Virgilio demanded from Senen that the latter vacate the house and that the property be sold and the proceeds thereof divided among them. Because of the refusal of Senen to give in to Virgilios demands, the latter led in 1979 an action to compel the sale of the co-owned property so that they could divide the proceeds between them. A question arose as to whether or not Senen should pay rent from the time their father died in 1975. The Supreme Court held We uphold the trial court in ruling in favor of petitioner, except as to the effectivity of the payment of monthly rentals by respondent as co-owner which we here declare to commence only after the trial court ordered respondent to vacate in accordance with its order of 26 July 1979.
Id. Id., p. 128, citing Tolentino, Civil Code of the Philippines, Vol. II, 1992 ed. 70 Id. 71 Id.
68 69
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Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the co-ownership, and that each co-owner may demand at any time partition of the thing owned in common insofar as his share is concerned. Corollary to this rule, Art. 498 of the Code states that whenever the thing is essentially, indivisible and the co-owners cannot agree that it be, allotted to one of them who shall indemnify the others, it shall be sold and its proceeds accordingly distributed. This is resorted to (a) when the right to partition the property is invoked by any of the co-owners but because of the nature of the property it cannot be subdivided or its subdivision would prejudice the interests of the co-owners, and (b) the co-owners are not in agreement as to who among them shall be allotted or assigned the entire property upon proper reimbursement of the co-owners. In one case, this Court upheld the order of the trial court directing the holding of a public sale of the properties owned in common pursuant to Art. 498 of the Civil Code. However, being a co-owner respondent has the right to use the house and lot without paying any compensation to petitioner, as he may use the property owned in common so long as it is in accordance with the purpose for which it is intended and in a manner not injurious to the interest of the other co-owners. Each co-owner of property held pro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his co-owners, the reason being that until a division is made, the respective share of each cannot be determined and every co-owner exercises, together with his co-participants joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same. Since petitioner has decided to enforce his right in court to end the co-ownership of the house and lot and respondent has not refuted the allegation that he has been preventing the sale of the property by his continued occupancy of the premises, justice and equity demand that respondent and his family vacate the property so that the sale can be effected immediately. In fairness to petitioner, respondent should pay a rental of P1,200.00 per month, with legal interest; from the time the trial court ordered him to vacate, for the use and enjoyment of the other half of the property appertaining to petitioner. When petitioner led an action to compel the sale of the property and the trial court granted the petition and ordered the ejectment of respondent, the co-ownership was deemed terminated
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and the right to enjoy the possession jointly also ceased. Thereafter, the continued stay of respondent and his family in the house prejudiced the interest of petitioner as the property should have been sold and the proceeds divided equally between them. To this extent and from then on, respondent should be held liable for monthly rentals until he and his family vacate. De Guia v. Court of Appeals 413 SCRA 114 (2003) The subject of the dispute in this case are two undivided parcels of land used as a shpond situated in Meycauayan, Bulacan. The property is registered under the names of Primitiva Lejano and Lorenza Araniego under TCT No. 6358 of the Bulacan Register of Deeds, as follows: Primitiva Lejano (1/2 share) and Lorenza Araniego (1/2 share). The 1/2 undivided share of Lorenza Araniego Abejo was acquired by her sole heir, Teolo Abejo, through intestate succession. Teolo Abejo, in turn, sold this 1/2 undivided share to his son, Jose Abejo, on November 22, 1983. The 1/2 undivided share of Primitiva Lejano, on the other hand, was passed on to her heirs. Prior to the sale in favor of Jose Abejo, the heirs of Primitiva Lejano entered into a lease contract with Manuel De Guia in 1974 over the entire shpond, with the knowledge and consent of Teolo Abejo. The lease contract was effective from 1974 to November 30, 1979. Subsequently, De Guia acquired the 1/2 undivided share of the heirs of Primitiva Lejano. Thus, after the expiration of the lease contract in 1979, De Guia remained in possession of the entire shpond. On November 27, 1983, Jose Abejo demanded from De Guia that the latter vacate the shpond and pay the back rentals. When De Guia refused, Abejo instituted on May 12, 1986 an action for recovery of possession with damages against De Guia. After trial, the trial court ruled that Abejo has the right to demand that De Guia vacate and surrender an area equivalent to Abejos undivided share in the shpond. The trial court likewise ruled that pending partition, De Guia should pay a reasonable amount as rental for the use of Abejos share in the shpond. Not satised with the decision of the trial court, De Guia led an appeal before the Court of Appeals. The Court of Appeals, however, sustained the decision of the trial court. Thus, De Guia led his appeal before the Supreme Court. In his appeal, De Guia contends, among others, that the trial and appellate courts erred when they ordered the recovery of rent when the exact identity of the portion in question had not yet been clearly dened and delineated. He contends that an order to pay damages in the form of rent is premature before partition. In denying his contention, the Supreme Court explained
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The right of enjoyment by each co-owner is limited by a similar right of the other co-owners. A co-owner cannot devote common property to his exclusive use to the prejudice of the coownership. Hence, if the subject is a residential house, all the coowners may live there with their respective families to the extent possible. However, if one co-owner alone occupies the entire house without opposition from the other co-owners, and there is no lease agreement, the other co-owners cannot demand the payment of rent. Conversely, if there is an agreement to lease the house, the co-owners can demand rent from the co-owner who dwells in the house. The co-owners can either exercise an equal right to live in the house, or agree to lease it. If they fail to exercise any of these options, they must bear the consequences. It would be unjust to require the co-owner to pay rent after the co-owners by their silence have allowed him to use the property. In case the co-owners agree to lease a building owned in common, a co-owner cannot retain it for his use without paying the proper rent. Moreover, where part of the property is occupied exclusively by some co-owners for the exploitation of an industry, the other co-owners become co-participants in the accessions of the property and should share in its net prots. The Lejano Heirs and Teolo Abejo agreed to lease the entire FISHPOND to DE GUIA. After DE GUIAs lease expired in 1979, he could no longer use the entire FISHPOND without paying rent. To allow DE GUIA to continue using the entire FISHPOND without paying rent would prejudice ABEJOs right to receive rent, which would have accrued to his 1/2 share in the FISHPOND had it been leased to others. Since ABEJO acquired his 1/2 undivided share in the FISHPOND on 22 November 1983, DE GUIA should pay ABEJO reasonable rent for his possession and use of ABEJOs portion beginning from that date. The compensatory damages of P25,000 per year awarded to ABEJO is the fair rental value or the reasonable compensation for the use and occupation of the leased property, considering the circumstances at that time. DE GUIA shall continue to pay ABEJO a yearly rent of P25,000 corresponding to ABEJOs 1/2 undivided share in the FISHPOND. However, ABEJO has the option either to exercise an equal right to occupy the FISHPOND, or to le a new petition before the trial court to x a new rental rate in view of changed circumstances in the last 20 years.
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ABEJO made an extrajudicial demand on DE GUIA by sending the 27 November 1983 demand letter. Thus, the rent in arrears should earn interest at 6% per annum from 27 November 1983 until nality of this decision pursuant to Article 2209 of the Civil Code. Thereafter, the interest rate is 12% per annum from nality of this decision until full payment. [64.4] Determining the Purpose
To determine the purpose for which the property held in common is intended the agreement, express or implied, of the parties will rst govern. In default of such an agreement, it is understood that the thing is intended for that use for which it is ordinarily adapted according to its nature.72 Thus, if the co-owners of a residential house agree that it shall be used as a warehouse then each co-owner must use it only for that purpose but, if there is no purpose agreed upon, then such house may be used according to its nature and that is for dwelling purposes.
Art. 487. Any one of the co-owners may bring an action in ejectment. (n)
65. Action in Ejectment

[65.1] Scope of Term Ejectment
Article 487 of the New Civil Code provides that anyone of the co-owners of an immovable may bring an action in ejectment. A coowner may thus bring an ejectment action without joining the other co-owners, the suit being deemed instituted for the benet of all.73 And the term, action in ejectment, not only includes a suit of forcible entry (detentacion) or unlawful detainer (desahucio),74 but all kinds of actions for the recovery of possession, including an accion publiciana and a reinvindicatory action.75
3 Manresa, 6th ed., 424. Sering v. Plazo, 166 SCRA 84, 85 (1988), citing Tolentino, Civil Code, 1983 ed., Vol. II, p. 157. 74 Id. 75 See De Guia v. Court of Appeals, 413 SCRA 114, 125 (2003); Baloloy v. Hular, 438 SCRA 80, Sep. 9, 2004; and Adlawan v. Adlawan, 479 SCRA 275, Jan. 20, 2006.
72 73
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[65.2] Action Must Be Instituted For All
However, if the action is for the benet of the plaintiff alone who claims to be the sole owner and entitled to the possession thereof, the action will not prosper unless he impleads the other co-owners who are indispensable parties.76 As noted by Former Supreme Court Associate Justice Edgrado L. Paras [i]t is understood, of course, that the action [under Article 487 of the Civil Code] is being instituted for all. Hence, if the co-owner expressly states that he is bringing the case only for himself, the action should not be allowed to prosper.77 In Baloloy v. Hular,78 for example, the respondent therein led a complaint for quieting of title claiming exclusive ownership of the property, but the evidence showed that respondent has co-owners over the property. In dismissing the complaint for want of respondents authority to le the case, the Supreme Court held that Under Article 487 of the New Civil Code, any of the co-owners may bring an action in ejectment. This article covers all kinds of actions for the recovery of possession, including an accion publiciana and a reinvidicatory action. A co-owner may bring such an action without the necessity of joining all the other co-owners as co-plaintiffs because the suit is deemed to be instituted for the benet of all. Any judgment of the court in favor of the co-owner will benet the others but if such judgment is adverse, the same cannot prejudice the rights of the unimpleaded co-owners. If the action is for the benet of the plaintiff alone who claims to be the sole owner and entitled to the possession thereof, the action will not prosper unless he impleads the other coowners who are indispensable parties. In this case, the respondent alone led the complaint, claiming sole ownership over the subject property and praying that he be declared the sole owner thereof. There is no proof that the other co-owners had waived their rights over the subject property or conveyed the same to the respondent or
Baloloy v. Hular, supra, 91; also in Adlawan v. Adlawan, supra. Paras, Civil Code of the Philippines Annotated, Vol. II, 1999 ed., p. 294, cited in Adlawan v. Adlawan, supra, 286. 78 Supra.
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such co-owners were aware of the case in the trial court. The trial court rendered judgment declaring the respondent as the sole owner of the property and entitled to its possession, to the prejudice of the latters siblings. Patently then, the decision of the trial court is erroneous. Under Section 7, Rule 3 of the Rules of Court, the respondent was mandated to implead his siblings, being coowners of the property, as parties. The respondent failed to comply with the rule. It must, likewise, be stressed that the Republic of the Philippines is also an indispensable party as defendant because the respondent sought the nullication of OCT No. P-16540 which was issued based on Free Patent No. 384019. Unless the State is impleaded as partydefendant, any decision of the Court would not be binding on it. It has been held that the absence of an indispensable party in a case renders ineffective all the proceedings subsequent to the ling of the complaint including the judgment. The absence of the respondents siblings, as parties, rendered all proceedings subsequent to the ling thereof, including the judgment of the court, ineffective for want of authority to act, not only as to the absent parties but even as to those present.79 In Adlawan v. Adlawan,80 the Court likewise sustained the dismissal of the complaint for ejectment on the ground that the suit was brought in the name of the plaintiff alone and for his own benet to the exclusion of the other co-owners. In fact, the plaintiff therein did not recognize the co-ownership and, in fact, vigorously asserted absolute and sole ownership of the questioned lot. The Adlawan and Baloloy cases must therefore be distinguished from other cases where the Court upheld the right of a co-owner to le a suit pursuant to Article 487 of the Civil Code. In Resuena v. Court of Appeals,81 and Sering v. Plazo,82 for example, the co-owners who led the ejectment case did not represent themselves as the exclusive owner
At pp. 90-92. Supra. 81 454 SCRA 42 (2005). 82 Supra.
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of the property. In Celino v. Heirs of Alejo and Teresa Santiago,83 the complaint for quieting of title was brought in behalf of the co-owners precisely to recover lots owned in common. Similarly in Vencilao v. Camarenta,84 the amended complaint specied that the plaintiff is one of the heirs who co-owns the controverted properties. In all these cases, the plaintiff never disputed the existence of a co-ownership nor claimed to be the sole or exclusive owner of the litigated lot. Thus, a favorable decision therein would of course inure to the benet not only of the plaintiff but to his co-owners as well.
[65.3] Action Available Even Against A Co-Owner
Any co-owner may le an action under Article 487 not only against a third person, but also against another co-owner who takes exclusive possession and asserts exclusive ownership of the property.85 In the latter case, however, the only purpose of the action is to obtain recognition of the co-ownership.86 The plaintiff cannot seek exclusion of the defendant from the property because as co-owner he has a right of possession.87 In other words, the plaintiff cannot recover any material or determinate part of the property.88 This is based on the principle that a co-owner has no right to demand a concrete, specic or determinate part of the thing owned in common because until division is effected his right over the thing is represented only by an ideal portion.89 Such being the case, the court cannot, in the action led by a co-owner against another co-owner under Article 487, proceed with the actual partitioning of the co-owned property.90 Judicial or extra-judicial partition is still necessary to effect such physical division.91
435 SCRA 690 (2004). 140 Phil. 99. 85 De Guia v. Court of Appeals, supra, 125, citing Arturo M. Tolentino, Civil Code of the Philippines, Vol. II, 1992 Ed. See also Engreso v. Dela Cruz, 401 SCRA 217 (2003). 86 Id. 87 Id. 88 Id. 89 Engreso v. Dela Cruz, 401 SCRA 217 (2003). 90 De Guia v. Court of Appeals, supra. 91 Id.
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De Guia v. Court of Appeals 413 SCRA 114 (Oct. 8, 2003) The subject of the dispute in this case are two undivided parcels of land used as a shpond situated in Meycauayan, Bulacan. The property is registered under the names of Primitiva Lejano and Lorenza Araniego under TCT No. 6358 of the Bulacan Register of Deeds, as follows: Primitiva Lejano (1/2 share) and Lorenza Araniego (1/2 share). The 1/2 undivided share of Lorenza Araniego Abejo was acquired by her sole heir, Teolo Abejo, through intestate succession. Teolo Abejo, in turn, sold this 1/2 undivided share to his son, Jose Abejo, on November 22, 1983. The 1/2 undivided share of Primitiva Lejano, on the other hand, was passed on to her heirs. Prior to the sale in favor of Jose Abejo, the heirs of Primitiva Lejano entered into a lease contract with Manuel De Guia in 1974 over the entire shpond, with the knowledge and consent of Teolo Abejo. The lease contract was effective from 1974 to November 30, 1979. Subsequently, De Guia acquired the 1/2 undivided share of the heirs of Primitiva Lejano. Thus, after the expiration of the lease contract in 1979, De Guia remained in possession of the entire shpond. On November 27, 1983, Jose Abejo demanded from De Guia that the latter vacate the shpond and pay the back rentals. When De Guia refused, Abejo instituted on May 12, 1986 an action for recovery of possession with damages against De Guia. After trial, the trial court ruled that Abejo has the right to demand that De Guia vacate and surrender an area equivalent to Abejos 1/2 undivided share in the shpond. The trial court likewise ruled that pending partition, De Guia should pay a reasonable amount as rental for the use of Abejos share in the shpond. Not satised with the decision of the trial court, De Guia led an appeal before the Court of Appeals. The Court of Appeals, however, sustained the decision of the trial court. Thus, De Guia led his appeal before the Supreme Court. In his appeal, De Guia contends, among others, that a co-owner cannot claim a denite portion from the property owned in common until there is a partition. De Guia argues that Abejo should have led an action for partition instead of recovery of possession since the court cannot implement any decision in the latter case without rst a partition. Finding merit in this argument, the Supreme Court ruled, as follows: Article 487 of the Civil Code provides, [a]ny one of the co-owners may bring an action in ejectment. This article covers all kinds of actions for the recovery of possession. Article 487 includes forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de reivindicacion). The summary actions of forcible entry and unlawful detainer seek the recovery of physical
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possession only. These actions are brought before municipal trial courts within one year from dispossession. However, accion publiciana, which is a plenary action for recovery of the right to possess, falls under the jurisdiction of the proper regional trial court when the dispossession has lasted for more than one year. Accion de reivindicacion, which seeks the recovery of ownership, also falls under the jurisdiction of the proper regional trial court. Any co-owner may le an action under Article 487 not only against a third person, but also against another co-owner who takes exclusive possession and asserts exclusive ownership of the property. In the latter case, however, the only purpose of the action is to obtain recognition of the co-ownership. The plaintiff cannot seek exclusion of the defendant from the property because as coowner he has a right of possession. The plaintiff cannot recover any material or determinate part of the property. In Hermogena G. Engreso with Spouse Jose Engreso v. Nestoria De la Cruz and Herminio De La Cruz (401 SCRA 217), we reiterated the rule that a co-owner cannot recover a material or determinate part of a common property prior to partition as follows: It is a basic principle in civil law that before a property owned in common is actually partitioned, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire property. A coowner has no right to demand a concrete, specic or determinate part of the thing owned in common because until division is effected his right over the thing is represented only by an ideal portion. As such, the only effect of an action brought by a co-owner against a co-owner will be to obtain recognition of the co-ownership; the defendant cannot be excluded from a specic portion of the property because as a co-owner he has a right to possess and the plaintiff cannot recover any material or determinate part of the property. Thus, the courts a quo erred when they ordered the delivery of one-half (1/2) of the building in favor of private respondent. Indisputably, DE GUIA has been in exclusive possession of the entire FISHPOND since July 1974. Initially, DE GUIA disputed ABEJOs claim of ownership over the 1/2 undivided portion of the FISHPOND. Subsequently, he implicitly recognized ABEJOs 1/2
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undivided share by offering to settle the case for P300,000 and to vacate the property. During the trial proper, neither DE GUIA nor ABEJO asserted or manifested a claim of absolute and exclusive ownership over the entire FISHPOND. Before this Court, DE GUIA limits the issues to the propriety of bringing an action for recovery of possession and the recovery of compensatory damages. Following the inherent and peculiar features of co-ownership, while ABEJO and DE GUIA have equal shares in the FISHPOND quantitatively speaking, they have the same right in a qualitative sense as co-owners. Simply stated, ABEJO and DE GUIA are owners of the whole and over the whole, they exercise the right of dominion. However, they are at the same time individual owners of a 1/2 portion, which is truly abstract because until there is partition, such portion remains indeterminate or unidentied. As co-owners, ABEJO and DE GUIA may jointly exercise the right of dominion over the entire FISHPOND until they partition the FISHPOND by identifying or segregating their respective portions. Since a co-ownership subsists between ABEJO and DE GUIA, judicial or extra-judicial partition is the proper recourse. An action to demand partition is imprescriptible and not subject to laches. Each co-owner may demand at any time the partition of the common property unless a co-owner has repudiated the coownership under certain conditions. Neither ABEJO nor DE GUIA has repudiated the co-ownership under the conditions set by law. To recapitulate, we rule that a co-owner may le an action for recovery of possession against a co-owner who takes exclusive possession of the entire co-owned property. However, the only effect of such action is a recognition of the co-ownership. The courts cannot proceed with the actual partitioning of the co-owned property. Thus, judicial or extra-judicial partition is necessary to effect physical division of the FISHPOND between ABEJO and DE GUIA. An action for partition is also the proper forum for accounting the prots received by DE GUIA from the FISHPOND. However, as a necessary consequence of such recognition, ABEJO shall exercise an equal right to possess, use and enjoy the entire FISHPOND. [65.4] Effect of Judgment Upon the Other Co-Owners
While a co-owner may bring an action in ejectment under Article 487 without the necessity of joining all the other co-owners as co-
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plaintiffs because the suit is deemed to be instituted for the benet of all, any adverse judgment cannot prejudice the rights of the unimpleaded co-owners.92 However, any judgment of the court in favor of the coowner will benet the others.93
Art. 488. Each co-owner shall have a right to compel the other coowners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-ownership. (395a) Art. 489. Repairs for preservation may be made at the will of one of the co-owners, but he must, if practicable, rst notify his co-owners of the necessity for such repairs. Expenses to improve or embellish the thing shall be decided upon by a majority as determined in Article 492. (n)
66. Expenses for Preservation

[66.1] Right To Demand Contribution
The law grants each co-owner the right to demand contribution from the other co-owners for any and all expenses he incurred for the purpose of preserving the thing or right owned in common,94 even if the repairs for preservation were made without the consent of the other coowners. Note that under Article 489, a co-owner who desires to make the necessary repairs is not required to secure the consent of all the coowners. What the law requires is that he must, if practicable, notify the other co-owners of the necessity of such repair prior to undertaking the same. Consequently, any opposition on the part of the other co-owners for the making of such necessary repairs does not deprive the co-owner who made the advances from demanding contributions from the other co-owners. Note that under the law,95 repairs for preservation may be made at the will of only one of the co-owners.
[66.2] When Notice Required
As stated earlier, what the law requires prior to the undertaking of any repair on the property owned in common for the purpose of
Baloloy v. Hular, supra; see also Resuena v. Court of Appeals, supra. Id. 94 Art. 488, NCC. 95 Art. 489, NCC.
92 93
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preserving it is mere notice to the other co-owners of the necessity of such repair. In other words, a co-owner who desires to undertake such repair is not required to secure the consent of the other co-owners. The giving of notice, however, is required only if the same is practicable given the circumstances by which the repair is to be undertaken. Hence, if the repairs are urgent and any delay will be detrimental to the interest of the co-ownership, prior notication is no longer necessary and a coowner may already undertake such repairs without need of giving prior notice to the other co-owners.
[66.3] Effect of Failure to Comply With the Notice Requirement
If the giving of notice is practicable and the co-owner who undertook the repair for preservation failed to previously notify the other co-owners of the necessity of such repair, will the absence of such notice deprive him of the right to demand contribution from the other co-owners for the expenses he incurred? According to Senator Tolentino,96 such failure does not deprive the co-owner who incurred the expenses of the right to recover the proportionate shares of the other co-owners in the expenses. The only effect of such failure is to place upon the co-owner who incurred the expenses the burden of proving the necessity of the repairs and the reasonableness of the expenses.
[66.4] Renunciation By A Co-Owner
While the other co-owners can be compelled to contribute proportionately to the expenses incurred for the purpose of preserving the thing or right owned in common, they are given by law97 an option of renouncing so much of (their) undivided interest as may be equivalent to (their) share of the expenses and taxes, in lieu of paying their proportionate contribution to such expenses. For example, A, B and C are co-owners of a car valued at P300,000.00. Assuming that A had the car repaired for the purpose of preserving it and incurred the sum of P30,000.00 in the process. Assuming that the interest of the three in the co-ownership is equal (or P100,000.00 each), B and C is required to contribute P10,000.00 each to the expenses so incurred. If B, for example, does not want to shell
96 97
II Tolentino, Civil Code, 1992 ed., 178-179. Art. 488, NCC.
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out P10,000.00 and opts, instead, to renounce so much of his undivided interest as may be equivalent to his share of the expenses, he is required to renounce 1/10 of his share in favor of the co-owner who incurred the expenses.
[66.5] Requirement of Consent in Renunciation
Under Article 488, renunciation is an option that belongs to a coowner who may be compelled to contribute to the expenses incurred for the purpose of preserving the property owned in common. Hence, such option may not be compelled by the co-owner who made the advances if another co-owner refuses to pay his share in the expenses. In such a situation, the remedy of the co-owner who made the advances is an ordinary action for collection of sum of money. If the non-paying coowner, however, chooses to exercise the option of renunciation, can he compel the co-owner who made the advances to accept the same? Stated otherwise, is the consent of the co-owner who made the advances necessary for the renunciation to be considered effective? From the language of Article 488, it appears that the consent of the co-owner who made the advances is not required when a co-owner opts to renounce, in lieu of paying his share in the expenses. Note that the law gives such option only to the co-owner who may be compelled to contribute to such expenses without requiring the consent of the coowner who made the advances. Senator Tolentino98 and Justice J.B.L. Reyes99 consider this, however, as a juridical error. According to these two eminent civilists, since the renunciation is intended as payment for expenses already made, it is in the nature of dation in payment and should, therefore, require the consent of the creditor, i.e., the co-owner who made the advances.
[66.6] Limitation on the Exercise of the Option of Renunciation
Article 488 prohibits the exercise of the option of renunciation if it is prejudicial to the interest of the co-ownership. For example, if A, B and C are co-owners of a property which is in need of immediate repairs for preservation but the amount thereof is more than A and B, together,
98 99
II Tolentino, Civil Code, 1992 ed., 173-176. Lawyers Journal, October 31, 1950, pp. 499-500.
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can sustain, the law will not allow C to opt for renunciation, in lieu of his contribution to the expenses.100 Such waiver is not allowed because it will be prejudicial to the interest of the co-ownership.101
[66.7] Includes Payment of Taxes
Under Article 488, the expenses for the preservation of the thing include payment of taxes due on the property owned in common, i.e., real estate tax on the land owned in common. Ordinarily, however, a real estate tax is not considered as a necessary expense, as the term is used in Article 546 of the New Civil Code. The concept of necessary expenses under Article 546 refers to those incurred for the purpose of preserving the thing or those expenses which seek to prevent the waste, deterioration or loss of the thing.102 A real estate tax is not a necessary expense under the provisions of Article 546 because if the same is not paid, the property will not be destroyed nor impaired, although its possession may be lost by the possessor. Under Article 488, however, the expenses for the preservation of the thing also include taxes.
Art. 490. Whenever the different stories of a house belong to different owners, if the titles of ownership do not specify the terms under which they should contribute to the necessary expenses and there exists no agreement on the subject, the following rules shall be observed: (1) The main and party walls, the roof and the other things used in common, shall be preserved at the expense of all the owners in proportion to the value of the story belonging to each; (2) Each owner shall bear the cost of maintaining the oor of his story; the oor of the entrance, front door, common yard and sanitary works common to all, shall be maintained at the expense of all the owners pro rata; (3) The stairs from the entrance to the rst story shall be maintained at the expense of all the owners pro rata, with the exception of the owner of the ground oor; the stairs from the rst to the second story shall be preserved at the expense of all, except the owner of the ground oor and the owner of the rst story; and so on successively. (396)
II Caguioa, Civil Code, 1966 ed., 136. Id. 102 Id., 199.
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67. Different Stories Belonging to Different Owners

Article 490 of the New Civil Code applies to a situation where the house consists of several stories and the different stories belong to different owners. This article nds no application to a condominium project, the latter being governed by Republic Act No. 4276, otherwise known as The Condominium Act.
[67.2] Rules Governing Necessary Expenses
In a situation where the different stories of a house belong to different owners, the payment of necessary expenses shall be governed by the following rules: (1) if the manner of contribution is specied in the title of ownership, the same shall govern; (2) in the absence of such provision in the title of ownership, the agreement of the parties shall control; or (3) in the absence of such agreement, the following rules shall be observed: (a) The main and party walls, the roof and the other things used in common, shall be preserved at the expense of all the owners in proportion to the value of the story belonging to each.103 (b) The oor of the entrance, front door, common yard and sanitary works common to all, shall be maintained at the expense of all the owners pro rata.104 (c) story.105 Each owner shall bear the cost of maintaining the oor of his
(d) The stairs from the entrance to the rst story shall be maintained at the expense of all the owners pro rata, with the exception of the owners of the ground oor, the stairs from the rst to the second story shall be preserved at the expense of all, except the owner of the ground oor and the owner of the rst story; and so on successively.106
Art. 490(1), NCC. Art. 490(2), NCC. 105 Id. 106 Art. 490(3), NCC.
103 104
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[67.3] Condominium, Dened
A condominium is an interest in real property consisting of a separate interest in a unit in a residential, industrial or commercial building and an undivided interest in common directly or indirectly, in the land on which it is located and in other common areas of the building.107 Common areas in a condominium project refer to the entire project excepting all units separately granted or held or reserved;108 while unit means a part of the condominium project intended for any type of independent use or ownership, including one or more rooms or spaces located in one or more oors (or part or parts of oors) in a building or buildings and such accessories as may be appended thereto.109
[67.4] Nature of Ownership in Condominium Projects
With respect to the condominium unit, the same is owned separately and individually by the unit owner. With respect, however, to the land and to the common areas in the condominium project, there are two situations contemplated in Sections 2 and 5 of the Condominium Act. The rst contemplates of a situation where the land and other common areas in the condominium project are held by the owners of separate units as co-owners thereof.110 In such a situation, there is co-ownership among the unit owners, with respect to the undivided interest in the land and common areas. The second contemplates of a situation where the land and other common areas are to be held by the condominium corporation, in which case, the owners of the individual units are automatically considered members or shareholders of the corporation.111 Under the provisions of the Condominium Act, the undivided interest in the common areas or the shareholding in the common areas is inseparable from the unit to which it is only an appurtenant.112
[67.5] Rules Governing Expenses on the Common Areas
The owner of the project is required by law, prior to the conveyance of any condominium therein, to register a declaration of restrictions
Sec. 2, R.A. No. 4726. Sec. 3(d), R.A. No. 4726. 109 Sec. 3(b), R.A. No. 4726. 110 Sec. 5, R.A. No. 4726. 111 Sec. 2, R.A. No. 4726. 112 Sec. 5, R.A. No. 4726.
107 108
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relating to such project, which restrictions shall constitute a lien upon each condominium in the project, and shall inure to and bind all condominium owners in the projects.113 Such declaration of restrictions may, among other things, provide for the following: (a) For maintenance of insurance policies insuring condominium owners against loss by re, casualty, liability, workmens compensation and other insurable risks, and for bonding of the members of any management body;114 (b) Provisions for maintenance, utility, gardening and other services beneting the common areas, for the employment of personnel necessary for the operation of the building, and legal, accounting and other professional and technical services;115 (c) For purchase of materials, supplies and the like needed by the common areas;116 (d) For payment of taxes and special assessments which would be a lien upon the entire project or common areas, and for the discharge of any encumbrance levied against the entire project or the common areas;117 (e) For reconstruction of any portion or portions of any damage to or destruction of the project;118
[67.6] Assessment as Lien Upon Unit
An assessment upon any condominium made in accordance with a duly registered declaration of restrictions shall be an obligation of the owner thereof at the time the assessment is made.119 The amount of any such assessment plus any other charges thereon, such as interests, cost (including attorneys fees) and penalties, as such as may be provided for in the declaration of restrictions, shall be and become a lien upon the condominium assessed when the management body causes a notice of assessment to be registered with the Registered of Deeds of the city or
Sec. 9, R.A. No. 4726. Sec. 9(a)(2), R.A. No. 4726. 115 Sec. 9(a)(3), R.A. No. 4726. 116 Sec. 9(a)(4), R.A. No. 4726. 117 Sec. 9(a)(5), R.A. No. 4726. 118 Sec. 9(a)(6), R.A. No. 4726. 119 Sec. 20, R.A. No. 4726.
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province where such condominium project is located.120 Such lien shall be superior to all other liens registered subsequent to the registration of said notice of assessment except real property tax liens121 and may be enforced in the same manner provided for by law for the judicial or extra-judicial foreclosure of mortgages of real property.122
Art. 491. None of the co-owners shall, without the consent of the others, make alterations in the thing owned in common, even though benets for all would result therefrom. However, if the withholding of the consent by one or more of the co-owners is clearly prejudicial to the common interest, the courts may afford adequate relief. (397a) Art. 492. For the administration and better enjoyment of the thing owned in common, the resolutions of the majority of the co-owners shall be binding. There shall be no majority unless the resolution is approved by the co-owners who represent the controlling interest in the object of the coownership. Should there be no majority, or should the resolution of the majority be seriously prejudicial to those interested in the property owned in common, the court, at the instance of an interested party, shall order such measures as it may deem proper, including the appointment of an administrator. Whenever a part of the thing belongs exclusively to one of the coowners, and the remainder is owned in common, the preceding provisions shall apply only to the part owned in common. (398)
68. Acts of Alteration

[68.1] Rule as to Acts of Alterations
The law123 prohibits the making of alterations in the thing owned in common without the consent of the other co-owners. In other words, the law requires the consent of all co-owners to the making of the alteration on the thing owned in common. This rule shall apply even though benets for all would result from such act of alteration.124 In case, however, any of the co-owners should unreasonably withholds his
Id. Id. 122 Id. 123 Art. 491, NCC. 124 Id.
120 121
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consent and the same is clearly prejudicial to the common interest, the other co-owners may go to court for appropriate relief.125
[68.2] Meaning of Act of Alteration
An act of alteration has been dened as the act by virtue of which a co-owner, in opposition to the express agreement, if there is any, or, in default thereof, to the tacit agreement of all the co-owners, and violating their will, changes the thing from that state in which the others believe it should remain or withdraws it from the use to which they wish it to be intended.126 An act of alteration, therefore, is one that affects the substance of the thing127 and changes its essence and nature.128
[68.3] Form of Consent
The law does not clarify the kind of consent necessary for the making of alterations. What is clearly required, however, is that the act of alteration must be authorized by all the co-owners, whether such authorization be given prior to or after the commission of the act. In other words, the consent of all co-owners may be given expressly or tacitly, previous to the act or even after its commission.
[68.4] Effect of Unauthorized Alterations
If the alteration is made without the consent of all the co-owners, the act is illegal and invalid, being an act executed against the provision of a mandatory law.129 The other co-owners can compel the erring coowner to undo what has been done, at the latters expense. This remedy is explicitly authorized by the provisions of Article 1168 of the New Civil Code which provides that when the obligation consists in not doing, and the obligor does what has been forbidden him, it shall also be undone at his expense. In addition, the erring co-owner shall likewise be liable for any losses or damages which the co-ownership may have suffered.
Id. 3 Manresa, 6th ed., 447; cited in II Caguioa, 1966 ed., 137. 127 Id. 128 II Tolentino, Civil Code, 1992 ed., 192. 129 Art. 5, NCC, in relation to Art. 491, NCC.
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69. Acts of Administration

[69.1] Rule as to Acts of Administration
With respect to acts of administration and better enjoyment of the thing owned in common, the resolution of the majority of the coowners shall be sufcient.130 Under the law on co-ownership, the terms majority of the co-owners do not refer to numerical majority but to majority of interest. The law provides that there shall be no majority unless the resolution is approved by the co-owners who represent the controlling interest in the object of the co-ownership.131 For example, if A, B and C are co-owners of a parcel of land where the share of A is 3/5 while the share of B and C is 1/5 each, the consent of A alone will be sufcient for the making of an act of administration. In this example, A represents the controlling interest in the co-ownership, thus, A alone shall be considered as the majority of the co-owners for the purpose of approving an act of alteration.
[69.2] Meaning of Acts of Administration
Repairs for preservation of the thing owned in common may be made at the will of only one of the co-owners.132 Hence, the resolution of the majority of the co-owners is not necessary. The act of repairing the thing owned in common for the purpose of preserving it is not considered, therefore, as an act of administration. On the other hand, expenses to improve or embellish the thing shall be decided upon by a majority as determined in Article 492.133 Hence, an act of administration refers to the improvement or embellishment of the thing owned in common134 for the purpose of better enjoyment.135 As distinguished from acts of alteration, which have a more permanent result and relate to the substance or form of the thing, acts of simple administration refer to the enjoyment of the thing and are of a transitory character.136 In determining whether an act is that of administration or alteration, the nature of the thing itself must be considered. When the enjoyment of the thing does not require its modication, whatever modication or
Art. 492, 1st par., NCC. See Art. 492, 2nd par., NCC. 132 Art. 489, NCC. 133 Id. 134 Art. 489, NCC. 135 Art. 492, 1st par., NCC. 136 II Tolentino, Civil Code, 1992 ed., 195.
130 131
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change that is done will be considered an alteration within the terms of Article 491.137 However, when the thing in its nature requires changes in its exploitation, such modications and variations should be considered as falling under the acts of simple administration.138
[69.3] No Majority or Act Of Majority Is Seriously Prejudicial
Should there be no majority, or should the resolution of the majority be seriously prejudicial to those interested in the property owned in common, the court, at the instance of an interested party, shall order such measures as it may deem proper, including the appointment of an administrator.139 According to Manresa,140 the following acts of the majority are considered prejudicial to the co-ownership: (1) when the resolution calls for a substantial change or alteration of the common property or of the use to which it has been dedicated by agreement or by its nature; (2) when the resolution goes beyond the limit of mere administration or invades proprietary rights of the co-owners in violation of Article 491; (3) when the majority authorizes lease, loans or other contracts without security, exposing the thing to serious danger to the prejudice of the other co-owners; and (4) when the majority refuses to dismiss an administrator who is guilty of fraud or negligence in his management, or he does not have the respectability, aptitude, and solvency required of persons holding such positions.
Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benets pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. (399)
70. Right Over the Ideal Share

[70.1] Nature of Co-Owners Right Over His Pro Indiviso Share
A co-owner has absolute ownership of his undivided share in the common property.141 Article 493 of the New Civil Code spells out
3 Manresa, 6th ed., 457, cited in II Caguioa, Civil Code, 1966 ed., 140. 3 Manresa 476-477; cited in II Tolentino, Civil Code, 1992 ed., 195. 139 Art. 492, 3rd par., NCC. 140 3 Manresa, 6th ed., 461-462. 141 City of Mandaluyong v. Aguilar, 350 SCRA 499, Jan. 29, 2001.
137 138
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his rights over his pro indiviso share. Pursuant to said article, a coowner shall have full ownership of his part and of the fruits and benets pertaining thereto.142 He has the right to alienate, assign or mortgage it, and even to substitute another person in its enjoyment, except when personal rights143 are involved.144 As a consequence, a co-owner has the right to alienate his pro indiviso share in the co-owned property even without the consent of the other co-owners145 and his co-owners cannot enjoin him if he intends to alienate his share to a third party.146 He may also validly lease his undivided interest to a third party independently of the other co-owners.147
[70.2] Effect of Alienation or Mortgage of Undivided Share
While a co-owner has the right to alienate or mortgage his undivided share, the effect of such alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.148 In other words, what the transferee obtains by virtue of such alienation or mortgage are the same rights as the transferor had as a co-owner, in an ideal share equivalent to the consideration given under their transaction.149 In essence, the transferee merely steps into the shoes of the transferor as co-owner and acquires a proportionate share in the property held in common, thereby making the transferee a co-owner of the property.150
[70.3] Alienation of Denite or Concrete Portion
In a long line of decisions, the Supreme Court has held that before the partition of a land or thing held in common, no individual or coowner can claim title to any denite portion. All that the co-owner has
Nufable v. Nufable, 309 SCRA 692, 700, July 2, 1999. The term personal rights refers to the personal relations of one co-owner to the others, as when the family residence is used by the children as co-owners. see Padilla, Civil Code, Vol. II, pp. 300-301 (1972); Tolentino, Civil Code, Bk. II, p. 203 (1992). 144 Nufable v. Nufable, supra, 700. 145 Mercado v. CA, 240 SCRA 616, 621, Jan. 26, 1995. 146 Reyes v. Concepcion, 190 SCRA 171, 179, Oct. 1, 1990. 147 Vda. de Castro v. Atienza, 53 SCRA 264, Oct. 17, 1973, cited in Sanchez v. CA, supra, and City of Mandaluyong v. Aguilar, supra. 148 Art. 493, NCC. 149 Del Campo v. CA, 351 SCRA 1, 7-8, Feb. 1, 2001. 150 Id.
142 143
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is an ideal or abstract quota or proportionate share in the entire land or thing.151 As such, a co-owner has no right to sell or alienate a concrete, specic or determinate part of the thing owned in common.152 If the coowner sells a concrete portion, this, nonetheless, does not render the sale void.153 Such a sale affects only his own share, subject to the results of the partition but not those of the other co-owners who did not consent to the sale.154 In the words of the Supreme Court in Del Campo v. Court of Appeals155 We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a coowned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him. Since the co-owner/ vendors undivided interest could properly be the object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common. As discussed above, a co-owner has no right to sell a divided part, by metes and bounds, of the real estate owned in common.156 Hence, the buyer cannot claim title to that denite portion of the land owned in common.157 What the vendee obtains by virtue of such sale are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction.158 In other words, such
151 Oliveras v. Lopez, 168 SCRA 431, 437, Dec. 14, 1988, citing Diversied Credit Corporation v. Rosado, L-27983, December 24, 1968, 26 SCRA 470. 152 City of Mandaluyong v. Aguilar, supra, at p. 500, citing Abad v. CA, 179 SCRA 826 (1989); Bailon-Casilao v. CA, 160 SCRA 738 (1988); Santos v. Buenconsejo, 14 SCRA 407 (1965); Ramirez v. Batutaista, 14 Phil. 528 (1909). 153 Id., also in Del Campo v. Court of Appeals, 351 SCRA 1 (2001). 154 Id. 155 351 SCRA 1, 7-8, Feb. 1, 2001. 156 See Abad v. Court of Appeals, 179 SCRA 817, December 4, 1989. 157 Id. 158 Id.
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sale will only transfer the rights of said co-owner to the buyer, thereby making the buyer a co-owner of the property.159 As a consequence, the effect of such alienation, with respect to the other co-owners, shall be limited to the portion which may be allotted to the vendee, as successorin-interest of the selling co-owner, in the division of the property upon the termination of the co-ownership.160 In one case,161 however, the buyer of a concrete or specic portion sold by one of the co-owners was held to be entitled to the specic portion which she purchased because the said buyer was allowed by the other co-owner to occupy said denite portion without disturbance for a period too long to be ignored. According to the Court in said case, such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the buyerpossessor to the denite portion which she occupies.162
Del Campo v. Court of Appeals 351 SCRA 1, Feb. 1, 2001 Salome Bornales, together with her siblings, were the original coowners of a certain parcel of land, known as Lot 162 of the Cadastral Survey of Ponteverda, Capiz under OCT No. 18407. On July 14, 1940, Salome sold part of her share in favor of Soledad Daynolo. The portion sold to Soledad was, however, concrete and specic. Immediately, thereafter, Soledad took possession of the land described in the sale. In 1948, Salome, together with the other co-owners, sold 24,933 of Lot 162 to Jose Regalado, Sr. In 1951, the heirs of Soledad sold the land to the spouses Manuel Del Campo and Salvacion Quiachon, who succeeded in the possession of said land. Meanwhile, Jose Regalado, Sr. caused the reconstitution of OCT No. 180407, which initially reected the shares of the original co-owners in Lot 162, but the title was eventually transferred in the name of Jose Regalado, Sr.. The latter, thereafter, subdivided the entire property into smaller lots, each covered by a respective title in his name. One of these small lots included the portion occupied by the spouses Del Campo. Thus, the spouses Del Campo led a complaint for repartition, resurvey and reconveyance against the heirs of Regalado claiming that their land was erroneously included in the title of Regalado. After addressing the issue of the validity of the sale in 1940 between Salome and Soledad, from where the right of the Spouses Del Campo was derived, the
Id. Art. 493, NCC. 161 Del Campo v. Court of Appeals, supra. 162 Id., 9.
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Court further held that the Del Campos are entitled to the possession of the specic portion sold to them. The Court explained On the rst issue, it seems plain to us that the trial court concluded that petitioners could not have acquired ownership of the subject land which originally formed part of Lot 162, on the ground that their alleged right springs from a void sale transaction between Salome and Soledad. The mere fact that Salome purportedly transferred a denite portion of the co-owned lot by metes and bounds to Soledad, however, does not per se render the sale a nullity. This much is evident under Article 493 of the Civil Code and pertinent jurisprudence on the matter. More particularly in Lopez v. Vda. De Cuaycong, et al. which we nd relevant, the Court, speaking through Mr. Justice Bocobo, held that: The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for it is a well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so. Quando res non valet ut ago, valeat quantum valere potest. (When a thing is of no force as I do it, it shall have as much force as it can have.) Applying this principle to the instant case, there can be no doubt that the transaction entered into by Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the coownership. As a matter of fact, the deed of sale executed between the parties expressly stipulated that the portion of Lot 162 sold to Soledad would be taken from Salomes 4/16 undivided interest in said lot, which the latter could validly transfer in whole or in part even without the consent of the other co-owners. Salomes right to sell part of her undivided interest in the co-owned property is absolute in accordance with the well-settled doctrine that a coowner has full ownership of his pro-indiviso share and has the right to alienate, assign or mortgage it, and substitute another person in its enjoyment. Since Salomes clear intention was to sell merely part of her aliquot share in Lot 162, in our view no valid objection can be made against it and the sale can be given effect to the full extent. We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case
311
a physically segregated area of the co-owned lot is in fact sold to him. Since the co-owner/vendors undivided interest could properly be the object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common. Resultantly, Soledad became a co-owner of Lot 162 as of the year 1940 when the sale was made in her favor. It follows that Salome, Consorcia and Alfredo could not have sold the entire Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by the three co-owners/vendors were equivalent to only 10/16 of the undivided property less the aliquot share previously sold by Salome to Soledad. Based on the principle that no one can give what he does not have, Salome, Consorcia and Alfredo could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate more than his share in the coownership. We have ruled many times that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale. Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner will only transfer the rights of said co-owner to the buyer, thereby making the buyer a co-owner of the property. In this case, Regalado merely became a new co-owner of Lot 162 to the extent of the shares which Salome, Consorcia and Alfredo could validly convey. Soledad retained her rights as co-owner and could validly transfer her share to petitioners in 1951. The logical effect of the second disposition is to substitute petitioners in the rights of Soledad as co-owner of the land. Needless to say, these rights are preserved notwithstanding the issuance of TCT No. 14566 in Regalados name in 1977. Be that as it may, we nd that the area subject matter of this petition had already been effectively segregated from the mother lot even before title was issued in favor of Regalado. It must be noted that 26 years had lapsed from the time petitioners bought and took possession of the property in 1951 until Regalado procured the issuance of TCT No. 14566. Additionally, the intervening years between the date of petitioners purchase of the property and 1987 when petitioners led the instant complaint, comprise all of 36
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years. However, at no instance during this time did respondents or Regalado, for that matter, question petitioners right over the land in dispute. In the case of Vda. de Cabrera v. Court of Appeals, we had occasion to hold that where the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a denite portion thereof and had not disturbed the same for a period too long to be ignored, the possessor is in a better condition or right than said transferees. (Potior est condition possidentis.) Such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the possessor to the denite portion which he occupies. Conformably, petitioners are entitled to the disputed land, having enjoyed uninterrupted possession thereof for a total of 49 years up to the present. [70.4] Alienation of Entire Co-owned Property
As a mere part owner, a co-owner cannot alienate the shares of the other co-owners. The prohibition is premised on the elementary rule that no one can give what he does not have nemo dat quod non habet.163 As a person can sell only what he owns or is authorized to sell, the buyer can as a consequence acquire no more than what the seller can legally transfer.164 Based from this principle, no co-owner has the right to alienate the entire property owned in common. However, even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale,165 following the well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so quando res non valet ut ago, valeat quantum valere potest (when a thing is of no effect as I do it, it shall have effect as far as [or in whatever way] it can).166 Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void. However, only
163 Mercado v. CA, 240 SCRA 616, 620, Jan. 26, 1995; also in Nufable v. Nufable, 309 SCRA 692, July 2, 1999. 164 Segura v. Segura, 165 SCRA 368, 374, Sept. 19, 1988. 165 Del Campo v. CA, 351 SCRA 1, 8, Feb. 1, 2001, citing Tomas Claudio Memorial College, Inc. v. CA, 316 SCRA 501 (1999). See also Aguirre v. CA, 421 SCRA 310, 323-324 (2004); Corinthian Realty, Inc. v. CA, 394 SCRA 260, 268 (2002); Tomas Claudio Memorial College, Inc. v. CA, 316 SCRA 502, 509 (1999); Paulmitan v. CA, 215 SCRA 866, 872-873 (1992); BailonCasilao v. CA, 160 SCRA 738, 745 (1988). 166 Acabal v. Acabal, 454 SCRA 555, 582.
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the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.167 Since the sale is not null and void, the proper action in cases like this is not for the nullication of the sale.168 And since such sale had the effect of making the buyer a co-owner of the property, an action for the recovery of possession of the thing owned in common from the buyer who substituted the co-owner or co-owners who alienated their shares is likewise not proper169 since the possession by the buyer, being a new co-owner, will not be regarded as adverse to the other coowners but is, in fact, benecial to all of them.170 It is now settled that the appropriate recourse of co-owners in cases where their consent were not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the co-owners is an action for partition under Rule 69 of the Revised Rules of Court.171 Such partition should result in segregating the portion belonging to the seller and its delivery to the buyer.172 Neither recovery of possession nor restitution can be granted since the buyer is a legitimate proprietor and possessor in joint ownership of the common property claimed.173
[70.5] Applicability of Doctrine of Buyer in Good Faith
Will the rule mentioned in supra 70.4 applies if the co-owned property alienated is registered under the Torrens system solely in the name of the selling co-owner? In Cruz v. Leis,174 the Court had the occasion to rule that where a parcel of land, forming past of the undistributed properties of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who merely relied on the face of the certicate of title thereto, issued solely in the name of the widow, the purchaser acquires a valid title to the land even as against the heirs of the deceased spouse. In this case, Gertrudes Isidro, during her marriage with Adriano Isidro, acquired a parcel of land in 1955. In the deed
Bailon-Casilao v. CA, 160 SCRA 738, 745, April 15, 1988. Id. 169 Id. 170 Pangan v. Court of Appeals, 166 SCRA 375, 381. 171 Bailon-Casilao v. Court of Appeals, supra; see also Aguirre v. Court of Appeals, 421 SCRA 310. 172 Tomas Claudio Memorial College, Inc. v. Court of Appeals, Oct. 12, 1999. 173 Id., citing Ramirez v. Batutaista, 14 Phil. 528 (1909). 174 327 SCRA 97.
167 168
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of sale and in the title (TCT No. 43100) that was issued in the name of Gertrudes Isidro, she was described as a widow. Her husband, however, died only on December 2, 1973. In 1985, Gertrudes obtained a loan from the spouses Alexander and Adelaida Cruz, secured by the property covered by TCT No. 43100. When Gertrudes failed to pay the loan, she executed a pacto de retro sale in favor of the spouses Cruz. When Gertrudes failed to repurchase the property within the period agreed upon, ownership thereof was consolidated in the name of Alexander Cruz in whose name TCT No. 130584 was issued. On 9 June 1987, Gertrudes died. Thereafter, her heirs, received demands to vacate the premises from the spouses Cruz, the new owners of the property. The heirs of Gertrudez responded by ling a complaint for the nullication of the sale and the title of Alexander Cruz. The Supreme Court held that while, as a rule, Gertrudes could only dispose of her share in the property owned in common pursuant to Article 493, the purchaser acquires a valid title to the entire property even as against the heirs of the spouses Isidro based on the principle that a person dealing with registered land is not required to go behind the register to determine the condition of the property. The Court explained that (the purchaser) is only charged with notice of the burdens on the property which are noted on the face of the register or the certicate of title and to require him to do more is to defeat one of the primary objects of the Torrens system. In Segura v. Segura,175 however, the Supreme Court followed the general rule that no one can give what he does not have nemo dat quod non habet. The Court further declared, albeit in obiter, that even if it is to be assumed that the purchaser bought the land in good faith from the selling co-owners (who were the registered owners of the property as appearing on the title), only so much of the share of the selling coowners could be validly acquired by the purchaser, with the rest of the property remaining under the ownership of the excluded co-heirs or co-owners. In other words, the purchaser became merely a pro indiviso co-owner of the land with the other excluded co-owners, who retained title to their respective shares although the purchaser had possession of the entire property. It was further held that the portion pertaining to the excluded co-owners should be deemed held by the purchaser under an implied trust for their benet.
175
165 SCRA 368.
315
[COMMENTS: Note, however, that the buyer of the property in the case of Segura v. Segura, supra, may not really be considered a purchaser in good faith since when the land was registered in his name following the sale of the same in his favor by the parties to the extra-judicial partition, the same still carried an express reservation of whatever rights that may pertain to other excluded heirs. The existence of this annotation on his title should thus make him aware of the possibility that a portion of the property may not truly belong to him. Such annotation is in the nature of a commitment on his part to hold any such portion as impliedly convey to him in trust by and for its true owner.] It is clear, however, that when the purchaser knew of, could have known, the existence of the co-ownership and yet did not seek the consent or authorization of the other co-owners in the sale of the entire property, he may not be considered a purchaser in good faith. Hence, the rule stated in supra 68.4 applies, in which case, he only acquires what the selling co-owner could validly transfer following the rule that no one can give what he does not have nemo dat quod non habet. In Bailon-Casilao v. Court of Appeals,176 for example, the purchaser of the entire property was held to be guilty of bad faith in purchasing the property as he knew that the property was co-owned by six persons and yet, there were only two signatories to the deeds of sale and no special authorization to self was granted to the two sellers by the other co-owners. Likewise, in Robles v. Court of Appeals,177 the mortgage of the entire co-owned property was declared to be valid only with respect to the share of the mortgaging co-owner, but not with respect to the share of the other co-owners who had no knowledge thereof. The Court held that the bank should not have relied solely on the Deed of Sale purportedly showing that the ownership of the disputed property had been transferred from Exequiel Ballena to the Robles spouses, or that it had subsequently been declared in the name of Hilario. Because it was dealing with unregistered land, and the circumstances surrounding the transaction between Hilario and his father-in-law Exequiel were suspicious, the bank should have exerted more effort to fully determine the title of the Robleses. In addition, the rule that persons dealing with
176 177
Supra. 328 SCRA 97.
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registered lands can rely solely on the certicate of title does not apply to banks.
[70.6] Sale of Conjugal Property Without the Consent of the Other Spouse
Any alienation or encumbrance of the conjugal partnership property made after the effectivity of the Family Code on August 3, 1988 without the consent of the other spouse is null and void.178 In such a situation, may the transaction be considered as valid, at least insofar as the share of the consenting spouse in the conjugal partnership property is concerned? This is the issue in Homeowners Savings & Loan Bank v. Dailo.179 In this case, the trial and appellate courts declared as void the mortgage in favor of the bank on the subject property, which is conjugal in nature, because it was constituted without the knowledge and consent of the wife, in accordance with Article 124 of the Family Code. On appeal, the bank contended that the mortgage constituted by the husband on the subject property as co-owner thereof is valid as to his undivided share. The bank contends that Article 124 of the Family Code should be construed in relation to Article 493 of the Civil Code. The bank argued that although Article 124 of the Family Code requires the consent of the other spouse to the mortgage of conjugal properties, the framers of the law could not have intended to curtail the right of a spouse from exercising full ownership over the portion of the conjugal property pertaining to him under the concept of co-ownership. In upholding the nullity of the mortgage in its entirety, the Court held The rules on co-ownership do not even apply to the property relations of respondent and the late Marcelino Dailo, Jr. even in a suppletory manner. The regime of conjugal partnership of gains is a special type of partnership, where the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance. Unlike the absolute community of property wherein the rules on co-ownership apply in a suppletory
178 Art. 124, FC; Sps. Guiang v. Court of Appeals, 353 Phil. 578 (1998); see also Rabuya, Law on Persons and Family Relations, 2006 ed., 485-486. 179 453 SCRA 283 (2005).
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manner, the conjugal partnership shall be governed by the rules on contract of partnership in all that is not in conict with what is expressly determined in the chapter (on conjugal partnership of gains) or by the spouses in their marriage settlements. Thus, the property relations of respondent and her late husband shall be governed, foremost, by Chapter 4 on Conjugal Partnership of Gains of the Family Code and, suppletorily, by the rules on partnership under the Civil Code. In case of conict, the former prevails because the Civil Code provisions on partnership apply only when the Family Code is silent on the matter. The basic and established fact is that during his lifetime, without the knowledge and consent of his wife, Marcelino Dailo, Jr. constituted a real estate mortgage on the subject property, which formed part of their conjugal partnership. By express provision of Article 124 of the Family Code, in the absence of (court) authority or written consent of the other spouse, any disposition or encumbrance of the conjugal property shall be void. The afore-quoted provision does not qualify with respect to the share of the spouse who makes the disposition or encumbrance in the same manner that the rule on coownership under Article 493 of the Civil Code does. Where the law does not distinguish, courts should not distinguish. Thus, both the trial court and the appellate court are correct in declaring the nullity of the real estate mortgage on the subject property for lack of respondents consent.
[70.7] Sale of Community Property Without the Consent of Other Spouse
While the absolute community is a form of co-ownership between the spouses, neither spouse can dispose of their respective interest in the community property by way of disposition inter vivos. In this respect, the rules on co-ownership embodied in Article 493 of the Civil Code do not nd application in the case of the co-ownership that exists in absolute community. The reason for this is because prior to liquidation of the absolute community, the interest of each spouse in the community assets is inchoate, a mere expectancy, which constitutes neither a legal
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nor an equitable estate, and does not ripen into title until it appears that there are assets in the community as a result of the liquidation and settlement. Hence, any disposition of the spouses respective shares or interest in the absolute community shall be void since such right to onehalf of the community assets does not vest until the liquidation of the absolute community. Nemo dat qui non habet. No one can give what he has not.180 This is also the reason why dispositions of community property made by one spouse without the consent of the other or without court authorization may not likewise be deemed valid even insofar as the share of the consenting spouse in the community property is concerned. Such alienation or disposition must be regarded as invalid in its entirety and not only with respect to the share of the non-consenting spouse in the property.181
[70.8] Co-ownership in Article 147 of the Family Code
As discussed in supra 62.7, when a man and a woman who are capacitated to marry each other live exclusively with each other as husband and wife without the benet of marriage or under a void marriage, the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership.182 In this kind of co-ownership, however, the rule stated in Article 493 that a co-owner has the right to alienate or encumber his ideal share without the consent of the other co-owners does not apply. Article 147 of the Family Code expressly prohibits any of the parties to encumber or dispose by acts inter vivos of his or her share in the co-owned property without the consent of the other prior to the termination of the cohabitation. 71. Right of Legal Redemption
[71.1] Legal Redemption in Co-Ownership
A co-owner of a thing may exercise the right of legal redemption in case the shares of all the other co-owners or of any of them, are sold to a third person.183 Should two or more co-owners desire to exercise the right
See Rabuya, Law on Persons and Family Relations, 2006 ed., 440-441. Id., 441. 182 See Art. 147, Family Code. 183 Art. 1620, 1st par., NCC.
180 181
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of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common.184 Legal redemption is in the nature of a privilege created by law partly for reasons of public policy and partly for the benet and convenience of the redemptioner, to afford him a way out of what might be a disagreeable or inconvenient association into which he has been trust.185 It is intended to minimize co-ownership186 by reducing the number of the participants until the community is done away with.187
[71.2] Requisites For the Exercise of Legal Redemption
From the provisions of Articles 1620 and 1623 of the New Civil Code, the following are the requisites for the exercise of legal redemption: (1) There must be a co-ownership; (2) one of the co-owners sold his right to a stranger; (3) the sale was made before the partition of the co-owned property; (4) the right of redemption must be exercised by one or more co-owners within a period of thirty days to be counted from the time that he or they were notied in writing by the vendee or by the co-owner vendor; and (5) the vendee must be reimbursed for the price of the sale.188
[71.3] Presupposes Existence of Co-Ownership
The basis and origin of the right of legal redemption granted under Article 1620 of the New Civil Code is the existence of a coownership.189 Thus, the exercise of a right of legal redemption thereunder presupposes the existence of co-ownership at the time the conveyance is made by a co-owner and when it is demanded by the other co-owner or co-owners.190 Inasmuch as the purpose of the law in establishing the right of legal redemption between co-owners is to reduce the number of the participants until the community is done away with,191 once the property is subdivided and distributed among the co-owners, the
Art. 1620, 2nd par., NCC. Basa v. Aguilar, 117 SCRA 128, 130, Sept. 30, 1982. 186 Id. 187 Viola v. Tecson, 49 Phil. 808. 188 Aguilar v. Aguilar, 478 SCRA 187, Dec. 16, 2005. 189 Hernandez v. Quitain, 168 SCRA 92, 95, Nov. 29, 1988; also in Mendoza I v. CA, 199 SCRA 778, 787, July 31, 1991. 190 Uy v. CA, 246 SCRA 703, 711, July 20, 1995. 191 Viola v. Tecson, 49 Phil. 808.
184 185
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community has terminated and there is no reason to sustain any right of legal redemption.192 This doctrine has been applied in a host of cases.193
[71.4] Share Must Be Sold To A Third Party
The law grants a co-owner the exercise of the said right of redemption when the shares of the other co-owners are sold to a third person. A third person, within the meaning of this Article, is anyone who is not a co-owner.194 When the portion is sold to a co-owner, the right does not arise because a new participant is not added to the coownership.195 However, the right to redeem is granted not only to the original co-owners, but also to all those who subsequently acquire their respective shares while the community subsists.196
[71.5] A Co-Owner Has Right of Redemption, Not Pre-Emption
In this jurisdiction, the legal provisions on co-ownership do not grant to any of the owners of a property held in common a pre-emptive right to purchase the pro indiviso shares of his co-owners.197 Article 1620 of the New Civil Code contemplates a situation where a co-owner has alienated his pro indiviso shares to a stranger.198 By the very nature of the right of legal redemption, a co-owners right to redeem is invoked only after the shares of the other co-owners are sold to a third party or stranger to the co-ownership, not before.199
[71.6] Period of Redemption
The right of legal redemption shall not be exercised except within thirty (30) days from the notice in writing by the vendor.200 Thus, for the
Caram v. CA, 101 Phil. 315, 319 (1957), cited in Hernandez v. Quitain, supra, at p. 96; also in Caro v. CA, 113 SCRA 10, March 25, 1982. 193 Saturnino v. Paulino, 97 Phil. 50 (1955); Umengan v. Butacan, 7 SCRA 311 (1963); Estoque v. Pajimula, 24 SCRA 59 (1968); Dela Cruz v. Cruz, 32 SCRA 307 (1970); Seechung Federis v. Sunga, 134 SCRA 16 (1985); Salatandol v. Retes, G.R. No. L-38120, June 28, 1988; Hernandez v. Quitain, supra, and Mendoza I v. CA, supra. 194 Basa v. Aguilar, 117 SCRA 128, 130-131, Sep. 30, 1982, cited in Pilapil v. CA, 250 SCRA 566, 576, Dec. 4, 1995 and Fernandez v. Tarun, 391 SCRA 653, 659, Nov. 14, 2002. 195 Fernandez v. Tarun, G.R. No. 143868, Nov. 14, 2002. 196 Viola v. Tecson, 49 Phil. 808, 810, Dec. 24, 1926, cited in Fernandez v. Tarun, supra, 659 197 Reyes v. Concepcion, 190 SCRA 171, 178. Oct. 1, 1990. 198 Id. 199 Id. 200 Art. 1623, 1st par., NCC.
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legal and effective exercise of the right of legal redemption one must make the offer within the period set down in Article 1623. In other words, if no claim or offer is made within said period, no action will be allowed to enforce the right of redemption. It is necessary however to determine rst if and when the written notice of sale was duly served by the vendors to their co-owner.201
[71.7] Written Notice Not Necessary If There Is Actual Notice
The old rule is that a written notice of the sale by the vendor to his co-owners is indispensable for the latter to exercise their retracto legal de comuneros.202 More recently, however, the Supreme Court has relaxed the written notice requirement. Thus, in Si v. Court of Appeals,203 the Court ruled that a co-owner with actual notice of the sale is not entitled to a written notice for such would be superuous.204 The law does not demand what is unnecessary205 since the only purpose of such written notice is to insure that all the co-owners shall be actually notied of the sale and to remove all doubt as to the perfection of the sale.206 Hence, in a case where the co-owner was actually present and was even an active intermediary in the consummation of the sale of the property, he is considered to have had actual notice of the sale and a written notice is no longer necessary.207
[71.8] Article 1620 Distinguished From Article 1088
Article 1088 of the New Civil Code provides that should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of the month from the time they were notied in writing of the sale by the vendor. According to Tolentino,208 the ne distinction between Article 1088 and Article 1620 is that when the sale consists of
Cabrera v. Villanueva, 160 SCRA 672, 677, April 15, 1988. Aguilar v. Aguilar, 478 SCRA 187, 193 (2005), citing Butte v. Manuel Uy & Sons, Inc., 4 SCRA 526. 203 342 SCRA 463. 204 Aguilar v. Aguilar, supra, 193. 205 Id. 206 Distrito v. Court of Appeals, 197 SCRA 606. 207 Id. 208 Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. III, pp. 607-608, cited in Mariano v. Court of Appeals, May 28, 1993.
201 202
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an interest in some particular property or properties of the inheritance, the right of redemption that arises in favor of the other co-heirs is that recognized in Article 1620. On the other hand, if the sale is the hereditary right itself, fully or in part, in the abstract sense, without specifying any particular object, the right recognized in Article 1088 exists.209
Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement. A donor or testator may prohibit partition for a period which shall not exceed twenty years. Neither shall there be any partition when it is prohibited by law. No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. (400a)
72. Extinguishment of Co-ownership

[72.1] Causes of Extinguishment of Co-ownership
Co-ownership may be extinguished or terminated by any of the following causes: (1) By the merger in one person of all the interest of the coownership; (2) By prescription of the thing or right in favor of third persons or a co-owner; (3) By destruction of the thing or loss of the right which is owned in common; and (4) By partition of the property owned in common.210
[72.2] Merger
Merger, as a mode of terminating the co-ownership, takes place when all the interests in a co-ownership are consolidated in one person.
209 210
Mariano v. Court of Appeals, 222 SCRA 736, May 28, 1993. 3 Manresa, 6th ed., 486; 2 Castan, 8th ed., 318.
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This may happen, for example, when the shares of the other co-owners are acquired by one co-owner either by way of purchase or through the exercise of the right of legal redemption.
[72.3] Destruction of Thing or Lost of Right
A state of co-ownership exists only because there is unity of the object or property and plurality of subjects.211 Note that a co-ownership is only a state of fact which exists so long as the property remains materially undivided. Hence, the moment that the state of fact no longer exists because the object of the co-ownership is either destroyed or lost, the co-ownership also ceases.
[72.4] Redemption By One Co-Owner of the Entire Property
The rule in this jurisdiction is that the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it since redemption is not a mode of terminating a co-ownership.212 A redemption by a co-owner within the period prescribed by law inures to the benet of all the other co-owners.213 In such a situation, therefore, the redemption made by one co-owner will simply entitle him to collect reimbursement from the remaining co-owners pursuant to the provisions of Article 488 considering that redemption entails a necessary expense.214 This is exemplied in the case of Adille v. Court of Appeals.215 In this case, the land in question originally belonged to one Feliza Alzul as her own private property. Sometime in 1939, Feliza sold the property in pacto de retro to certain third persons, the period of repurchase being three years. During the period of redemption, her son in the rst marriage repurchased the subject property, who thereafter was able to secure title to the property only in his name. Subsequently, however, the other children of Felisa in her second marriage led an action for partition and accounting claiming that they were co-owners of the subject property, being heirs. The son of Felisa in the rst marriage contends that the subject property devolved upon him upon the failure of his co-heirs to join him in its redemption
Gapacan v. Omipet, 387 SCRA 383. Adille v. Court of Appeals, 157 SCRA 455, Jan. 29, 1988. See also Paulmitan v. Court of Appeals, 215 SCRA 866, Nov. 25, 1992; Mariano v. Court of Appeals, 222 SCRA 736, May 28, 1993; Cruz v. Leis, 327 SCRA 570, March 9, 2000. 213 Mariano v. Court of Appeals, supra, 740. 214 Adille v. Court of Appeals, supra. 215 Supra.
211 212
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within the period required by law. Answering this particular contention, the Supreme Court held The right of repurchase may be exercised by a coowner with aspect to his share alone. While the records show that the petitioner redeemed the property in its entirety, shouldering the expenses therefor, that did not make him the owner of all of it. In other words, it did not put to end the existing state of co-ownership. Necessary expenses may be incurred by one co-owner, subject to his right to collect reimbursement from the remaining co-owners. There is no doubt that redemption of property entails a necessary expense. Under the Civil Code: ART. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the coownership. The result is that the property remains to be in a condition of co-ownership. While a vendee a retro, under Article 1613 of the Code, may not be compelled to consent to a partial redemption, the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name. But the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a co-ownership. Neither does the fact that the petitioner had succeeded in securing title over the parcel in his name terminate the existing co-ownership. While his half-brothers and sisters are, as we said, liable to him for reimbursement as and for their shares in redemption expenses, he cannot claim exclusive right to the property owned in common. Registration of
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property is not a means of acquiring ownership. It operates as a mere notice of existing title, that is, if there is one. The petitioner must then be said to be a trustee of the property on behalf of the private respondents. The Civil Code states: ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benet of the person from whom the property comes. We agree with the respondent Court of Appeals that fraud attended the registration of the property. The petitioners pretension that he was the sole heir to the land in the afdavit of extrajudicial settlement he executed preliminary to the registration thereof betrays a clear effort on his part to defraud his brothers and sisters and to exercise sole dominion over the property. The afore-quoted provision therefore applies. It is the view of the respondent Court that the petitioner, in taking over the property, did so either on behalf of his co-heirs, in which event, he had constituted himself a negotiorum gestor under Article 2144 of the Civil Code, or for his exclusive benet, in which case, he is guilty of fraud, and must act as trustee, the private respondents being the beneciaries, under the Article 1456. The evidence, of course, points to the second alternative the petitioner having asserted claims of exclusive ownership over the property and having acted in fraud of his co-heirs. He cannot therefore be said to have assume the mere management of the property abandoned by his co-heirs, the situation Article 2144 of the Code contemplates. In any case, as the respondent Court itself afrms, the result would be the same whether it is one or the other. The petitioner would remain liable to the Private respondents, his co-heirs.216
216
At pp. 459-461.
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The Adille case must be distinguished from the case of Tan v. Court of Appeals.217 In Tan, the heirs (i.e., the co-owners) allowed the one year redemption period to expire without redeeming their parents former property and permitted the consolidation of ownership and the issuance of a new title in favor of the bank. By their knowing acts of omission, the heirs in the Tan case allowed the extinction of their coownership. In Tan, the disputed property was mortgaged by spouses Tan Tiong Tick and Tan Ong Hun to China Bank in 1963. In 1969, Tan Tiong Tick died without having paid the mortgage obligation. He was survived by his widow and six children, including D. Annie Tan. Meanwhile, China Bank foreclosed the mortgage in 1972. It was the highest bidder at the public auction. Thereafter, the heirs of Tan Tiong Tick sought to nullify the real estate mortgage and the foreclosure sale before the defunct CFI of Manila. The widow, Tan Ong Hun, also died, thus the children were left to redeem the foreclosed property. The one-year redemption period lapsed on July 6, 1973, but the heirs of the spouses Tan failed to redeem the property. China Bank then consolidated its ownership over the disputed property and a new title was issued in its name. In the meantime, a compromise agreement was forged between China Bank and the Tan heirs. The Bank allowed the heirs to repurchase the property on or before August 31, 1974, otherwise, it would dispose of the property to another party. Within the agreed period, or on August 30, 1974, only D. Annie Tan repurchased the entire property using her own funds. The bank, however, insisted that the repurchase be made for or in behalf of the other heirs as well. Left without any choice, D. Annie Tan led an action in court, asserting her exclusive ownership over the property on the ground that the co-ownership between her and her brothers and sisters had already been extinguished. In sustaining her contention, the Supreme Court ruled The rst question which arises is the correctness of the assumption that there was a co-ownership among the children of Tan Tiong Tick and Tan Ong Hun when the petitioner purchased the property.
217
172 SCRA 660, April 24, 1989.
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Since the lot and its improvement were mortgaged by the deceased parents, there can be no question that a coownership existed among the heirs during the period given by law to redeem the foreclosed property. Redemption by one during this period would have inured to the benet of all (Adille v. Court of Appeals, G.R. No. 44546, 157 SCRA 455 [1988]; and De Guzman v. Court of Appeals, G.R. No. 47378, 148 SCRA 75 [1987]). The records show, however, that when the petitioner purchased the disputed property on August 30, 1974, any coownership among the brothers and sisters no longer existed. The period to redeem had expired more than one year earlier, on July 6, 1973. The respondent China Bank consolidated its ownership and a new title was issued in the banks name. When the heirs allowed the one year redemption period to expire without redeeming their parents former property and permitted the consolidation of ownership and the issuance of a new title, the co-ownership was extinguished. The challenged ruling of the respondent court is, therefore, based on erroneous premises. Under Section 63-B of Presidential Decree No. 1529, the Property Registration Decree, in case of non-redemption, the purchaser at the foreclosure sale, meaning the respondent Bank in this case, is entitled to a new certicate of title in its name after ling the necessary papers with the Register of Deeds (Spouses Teosto and Eulalia Verceles v. Court of First Instance of Rizal, et al., G.R. No. 62219, February 28, 1989). It becomes a ministerial duty to place the buyer in possession of the property he now owns (Banco Filipino v. Intermediate Appellate Court, G.R. No. 68878,142 SCRA 44 [1986]). Ownership, therefore, passed to China Bank and there was no more co-ownership among the heirs.218
218
At pp. 668-669.
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73. Prescription
[73.1] General Rule: Prescription Does Not Lie
Co-ownership is a form of trust and every co-owner is a trustee for the others,219 hence, the relationship of such co-owner to the other co-owners is duciary in character and attribute.220 Whether established by law or agreement of the co-owners, the property or thing held pro indiviso is impressed with a ducial nature so that each co-owner becomes a trustee for the benet of his co-owners and he may not do any act prejudicial to the interest of his co-owners.221 Thus, the Supreme Court has held that the possession by a co-owner is like that of a trustee222 and shall not be regarded as adverse to the other co-owners but in fact benecial to all of them.223 Following this principle, it is the rule in this jurisdiction that no prescription shall lie in favor of a coowner or co-heirs as long as he expressly or impliedly recognizes the co-ownership.224
[73.2] Exception: When Co-Ownership Is Repudiated
In a co-ownership, the act of one benets all the other co-owners, unless the former repudiates the co-ownership.225 If the co-owner actually holding the property asserts exclusive dominion over it against the other co-owners, the corollary of the rule is that he can acquire sole title to it after the lapse of the prescribed prescriptive period.226 Thus, prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation of the co-ownership227 and absent a clear repudiation of the co-ownership a co-owner cannot acquire by prescription the share of the other co-owners.228
Sanchez v. Court of Appeals, 404 SCRA 541, 548, June 20, 2003. Id. 221 Id. 222 Delima v. CA, 201 SCRA 641, 646, Sept. 24, 1991; Salvador v. CA, 243 SCRA 239, 251, April 5, 1995. 223 Salvador v. CA, 243 SCRA 239, 251, April 5, 1995. 224 Art. 494, last par., NCC. 225 Trinidad v. Court of Appeals, 289 SCRA 188, 211, April 20, 1988. 226 Pangan v. Court of Appeals, 166 SCRA 375, 382, Oct. 17, 1988. 227 Adille v. Court of Appeals, supra, 461. 228 Heirs of Segunda Maningding v. Court of Appeals, supra, 608.
219 220
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[73.3] Requisites
In order that the title may prescribe in favor of a co-owner229 or in order that a co-owners possession may be deemed adverse to the other co-owners,230 the following elements must concur:
[73.3.1] The co-owner has performed unequivocal acts of repudiation amounting to an ouster of the other coowners.231
Since the relationship of a co-owner to the other co-owners is duciary in character and attribute,232 acts which are adverse to strangers may not be sufciently adverse to the co-owners.233 Consequently, a mere silent possession by a co-owner, his receipt of rents, fruits or prots from the property, the erection of buildings and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne out by clear, complete and conclusive evidence that he exercised acts of possession which unequivocally constituted an ouster or deprivation of the rights of the other co-owners.234 Thus, the mere fact that the tax declaration is in the name of one of the co-owners alone does not constitute sufcient repudiation of the co-ownership as the same is not an act adverse to the interests of the other co-owners,235 especially if the payment of land taxes in the name of such co-owner has been agreed upon by all the co-owners.236 While prescription among co-owners cannot take place when the acts of ownership exercised are vague and uncertain, such prescription arises and produces all its effects when the acts of ownership do not evince any doubt as to the ouster of the rights of the other co-owners.237 For example, when a co-owner of the property executed a deed of partition and on the strength thereof obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein
Robles v. Court of Appeals, 328 SCRA 97, 110, March 14, 2000. Salvador v. Court of Appeals, 243 SCRA 239, 251, April 5, 1995. 231 Robles v. CA, supra; see also Salvador v. CA, supra, 251. 232 Sanchez v. Court of Appeals, supra, 548. 233 Salvador v. CA, supra, 251. 234 Id., citing Bicarme v. Court of Appeals, 186 SCRA 294, 301, June 6, 1990. 235 See Bicarme v. Court of Appeals, supra. 236 See Robles v. Court of Appeals, supra. 237 Heirs of Segunda Maningding v. Court of Appeals, 276 SCRA 601, 609, July 31, 1997.
229 230
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he appears as the new owner of the property, he thereby in effect denies or repudiates the ownership of the other co-owners over their shares.238 Also the ling by a trustee of an action in court against the trustor to quiet title to the property, or for recovery of ownership thereof, held in possession by the former, may constitute an act of repudiation of the trust reposed on him by the latter.239
[73.3.2] Such positive acts of repudiation have been made known to the other co-owners.240
For title to prescribe in favor of the co-owner, there must be a clear showing that he has repudiated the claims of the other co-owners and that they have been categorically advised of the exclusive claim he is making to the property in question. It is only when such unequivocal notice has been given that the period of prescription will begin to run against the other co-owners and ultimately divest them of their own title if they do not seasonably defend it.241
[73.3.3] The evidence thereof is clear and convincing.242
Mere refusal to accede to a partition, without specifying the grounds for such refusal, cannot be considered as notice to the other coowners of the occupants claim of title in himself in repudiation of the co-ownership. The evidence relative to the possession, as a fact upon which the alleged prescription is based, must be clear, complete and conclusive in order to establish said prescription without any shadow of doubt; and when upon trial it is not shown that the possession of the claimant has been adverse and exclusive and opposed to the rights of the others, the case is not one of ownership, and partition will lie.243 Therefore, while prescription among co-owners cannot take place when the acts of ownership exercised are vague and uncertain, such prescription arises and produces all its effects when the acts of ownership do not evince any doubt as to the ouster of the rights of the other co-owners.244
Delima v. Court of Appeals, supra, citing Castillo v. Court of Appeals, 10 SCRA 549. Alzona v. Capunitan, February 28,1962, G.R. No. L-10220, cited in Pangan v. Court of Appeals, supra. 240 Id. 241 Pangan v. CA, 166 SCRA 375, 382, Oct. 17, 1988. 242 Id. 243 Heirs of Segunda Maningding v. CA, 276 SCRA 601, 608-609, July 31, 1997. 244 Id., at p. 609.
238 239
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Art. 495. Notwithstanding the provisions of the preceding article, the co-owners cannot demand a physical division of the thing owned in common, when to do so would render it unserviceable for the use for which it is intended. But the co-ownership may be terminated in accordance with Article 498. (401a) Art. 496. Partition may be made by agreement between the parties or by judicial proceedings. Partition shall be governed by the Rules of Court insofar as they are consistent with this Code. (402) Art. 497. The creditors or assignees of the co-owners may take part in the division of the thing owned in common and object to its being effected without their concurrence. But 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 prejudice to the right of the debtor or assignor to maintain its validity. (403) Art. 498. Whenever the thing is essentially indivisible and the coowners cannot agree that it be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds distributed. (404) Art. 499. The partition of a thing owned in common shall not prejudice third persons, who shall retain the rights of mortgage, servitude, or any other real rights belonging to them before the division was made. Personal rights pertaining to third persons against the co-ownership shall also remain in force, notwithstanding the partition. (405) Art. 500. Upon partition, there shall be a mutual accounting for benets received and reimbursements for expenses made. Likewise, each co-owner shall pay for damages caused by reason of his negligence or fraud. (n) Art. 501. Every co-owner shall, after partition, be liable for defects of title and quality of the portion assigned to each of the other co-owners. (n)
74. Partition
[74.1] Denition
Partition, in general, is the separation, division and assignment of a thing held in common among those to whom it may belong. The thing itself may be divided, or its value.245
[74.2] Right of Co-Owner to Demand Partition
Article 494 of the New Civil Code states that no co-owner shall be obliged to remain in the co-ownership and, thus, each co-owner may
245
Art. 1079, NCC.
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demand at any time the partition of the thing owned in common, insofar as his share is concerned. In Budlong v. Bondoc,246 Article 494 has been interpreted to mean that the action for partition is imprescriptible247 or cannot be barred by laches.248 Note, however, that an action for partition implies that the thing is still owned in common.249 Hence, as long as the co-ownership is recognized, an action to compel partition will not prescribe and may be led at any time against the actual possessor by any of the other co-owners.250 If a co-owner or co-heir, however, holds the property in exclusive adverse possession as owner, asserting sole and exclusive dominion for the required period, he can acquire sole title to it as against the co-heirs or co-owners.251 The imprescriptibility of the action cannot thus be invoked when one of the co-owners has possessed the property as exclusive owner and for a period sufcient to acquire it by prescription.252 From the moment one of the co-owners claims that he is the absolute and exclusive owner of the properties and denies the others any share therein, the question involved is no longer one of partition, but of ownership.253 In such case, the imprescriptibility of the action for partition can no longer be invoked or applied when one of the coowners has adversely possessed the property as exclusive owner for a period sufcient to vest ownership by prescription.254
[74.3] Period of Prescription
When a co-owner has effectively repudiated the co-ownership, two possibilities may arise: (1) such co-owner may acquire the entire property by virtue of acquisitive prescription if his possession meets all the requirements of the law, and after the expiration of the prescriptive period; or (2) the other co-owners who were deprived of their share may lose their right to seek a declaration of the existence of the co-ownership
79 SCRA 24. Cited in Tomas Claudio Memorial College, Inc. v. Court of Appeals, 316 SCRA 502. 248 Salvador v. Court of Appeals, 243 SCRA 239, 250-251. 249 Bicarme v. Court of Appeals, supra. 250 Pangan v. Court of Appeals, supra. 251 Id. 252 Id. 253 Id. 254 Delima v. Court of Appeals, supra.
246 247
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and of their rights thereunder because the same may already be barred under the statute of limitations (or extinctive prescription).
[74.3.1] Acquisitive Prescription
While the action to demand partition of a co-owned property does not prescribe, a co-owner may acquire ownership thereof by prescription where there exists a clear repudiation of the co-ownership, and the coowners are apprised of the claim of adverse and exclusive ownership.255 Acquisitive prescription of dominion and other real rights may be ordinary or extraordinary.256 Ordinary acquisitive prescription requires possession of things in good faith and with just title for a period of ten years.257 Without good faith and just title, acquisitive prescription can only be extraordinary in character which requires uninterrupted adverse possession for thirty years.258 The case of Heirs of Flores Restar v. Heirs of Dolores R. Cichon259 is an example of a case where a co-owner has acquired the co-owned property by acquisitive prescription.
Heirs of Flores Restar v. Heirs of Dolores R. Cichon 475 SCRA 731, Nov. 22, 2005 In 1935, Emilio Restar (Restar) died intestate, leaving eight (8) childrencompulsory heirs, namely: Flores Restar, Dolores Restar-Cichon, Perpetua Restar-Sta. Maria, Paciencia Restar-Manares, Dominica Restar-Relojero, Policarpio Restar, Maria Restar-Rose and Adolfo Restar. In 1960, Restars eldest child, Flores, on the basis of a July 12, 1959 Joint Afdavit he executed with one Helen Restar, caused the cancellation of Tax Declaration No. 6696 in Restars name covering a 5,918 square meter parcel of land, Lot 3177 (the lot), located at Barangay Carugdog, Lezo, Aklan which was among the properties left by Restar, and the issuance of Tax Declaration No. 11134 in his name. Flores died on June 10, 1989. On November 5, 1998, the co-heirs of Flores discovered the cancellation of Restars Tax Declaration No. 6696 and the issuance in lieu thereof of Tax Declaration No. 11134 in the name of Flores. On January 21, 1999, the heirs of Flores sisters Dolores R. Cichon, Perpetua Sta. Maria, and Maria Rose who had in the meantime died, together with Flores surviving sisters Dominica Restar-Relojero and Paciencia Restar-Manares, led a Complaint against Flores heirs for partition of the lot, declaration of nullity
Heirs of Flores Restar v. Heirs of Dolores R. Cichon, 475 SCRA 731, Nov. 22, 2005. Id. 257 Id. 258 Id. 259 Supra.
255 256
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of documents, ownership with damages and preliminary injunction before the Regional Trial Court (RTC) of Aklan. Flores brothers Policarpio and Adolfo were impleaded also as defendants, they being unwilling co-plaintiffs. It has been shown during the trial that the complainants (respondents) never possessed the lot since the death of Restar and asserted their claim thereto only on January 21, 1999 when they led the complaint for partition. In contrast, Flores took possession of the lot after Restars death and exercised acts of dominion thereon tilling and cultivating the land, introducing improvements, and enjoying the produce thereof and in 1960 was able to secure a tax declaration in his name. In addition, the heirs of Restar had a verbal partition of one parcel of land in Carugdog, Lezo, Aklan in 1945 and an amicable partition of the lands of Restar in Banga, Aklan in 1973 without demanding for the partition of the subject lot. In holding that Flores possession ripened into ownership through acquisitive prescription, the Supreme Court explained Contrary to the ndings of the appellate court, the records of the case amply support petitioners claim that the requirements for extraordinary prescription had been duly met. When Restar died in 1935, his eight children became pro indiviso co-owners of the lot by intestate succession. Respondents never possessed the lot, however, much less asserted their claim thereto until January 21, 1999 when they led the complaint for partition subject of the present petition. In contrast, Flores took possession of the lot after Restars death and exercised acts of dominion thereon tilling and cultivating the land, introducing improvements, and enjoying the produce thereof. The statutory period of prescription, however, commenced not in 1935 but in 1960 when Flores, who had neither title nor good faith, secured a tax declaration in his name and may, therefore, be said to have adversely claimed ownership of the lot. And respondents were also deemed to have been on said date become aware of the adverse claim. Flores possession thus ripened into ownership through acquisitive prescription after the lapse of thirty years in accordance with the earlier quoted Article 1137 of the New Civil Code. The following observations of the trial court thus merit this Courts approval. The evidence proved that as far back as 1959, Flores Restar adjudicated unto himself the whole land in question as his share
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from his father by means of a joint afdavit which he executed with one Helen Restar, and he requested the Provincial Treasurer/ Assessor to have the land declared in his name. It was admitted by the parties during the pre-trial that this afdavit was the basis of the transfer of Tax Declaration No. 6686 from Emilio Restar to Flores Restar. So that from 1960 the land was declared in the name of Flores Restar (Exhibit 10). This was the rst concrete act of repudiation made by Flores of the co-ownership over the land in question. x x x Plaintiffs did not deny that aside from the verbal partition of one parcel of land in Carugdog, Lezo, Aklan way back in 1945, they also had an amicable partition of the lands of Emilio Restar in Cerrudo and Palale, Banga Aklan on September 28, 1973 (Exhibit 20). If they were able to demand the partition, why then did they not demand the inclusion of the land in question in order to settle once and for all the inheritance from their father Emilio Restar, considering that at that time all of the brothers and sisters, the eight heirs of Emilio Restar, were still alive and participated in the signing of the extra-judicial partition? Also it was admitted that Flores died only in 1989. Plaintiffs had all the chances (sic) to le a case against him from 1960, or a period of 29 years when he was still alive, yet they failed to do so. They led the instant case only on January 22, 1999, almost ten (10) years after Flores death. From the foregoing evidence, it can be seen that the adverse possession of Flores started in 1960, the time when the tax declaration was transferred in his name. The period of acquisitive prescription started to run from this date. Hence, the adverse possession of Flores Restar from 1960 vested in him exclusive ownership of the land considering the lapse of more than 38 years. Acquisitive prescription of ownership, laches and prescription of the action for partition should be considered in favor of Flores Restar and his heirs. While tax declarations and receipts are not conclusive evidence of ownership and do not prove title to the land, nevertheless, when coupled with actual possession, they constitute evidence of great weight and can be the basis of a claim of ownership through prescription. As for respondents claim that they have been receiving shares from the produce of the land, it was correctly discredited by the trial court. [P]laintiffs claim that Flores Restar gave them ve to eight gantas each as their shares in the produce cannot be sustained. A few gantas cannot be considered one-eight share of sixty (60)
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cavans of palay produced per cropping. One eight of sixty cavans would be at least six cavans, not merely gantas after excluding expenses for cultivation and production. If plaintiffs were to be believed, their whole 7/8 share of the produce would total two cavans, six gantas only at the usual rate of 25 gantas per cavan. Unless there are strong and impelling reasons to disturb the trial courts ndings of facts which must, as a matter of judicial policy, be accorded with the highest respect, they must remain. Respondents have not, however, proffered any reason warranting the disturbance of the trial courts ndings of facts. Indeed, the following acts of Flores show possession adverse to his coheirs: the cancellation of the tax declaration certicate in the name of Restar and securing another in his name; the execution of a Joint Afdavit stating that he is the owner and possessor thereof to the exclusion of respondents; payment of real estate tax and irrigation fees without respondents having ever contributed any share therein; and continued enjoyment of the property and its produce to the exclusion of respondents. And Flores adverse possession was continued by his heirs. [74.3.2] Extinctive Prescription
While the action for the partition of the thing owned in common (actio communi dividendo or actio familiae erciscundae) does not prescribe, the co-ownership does not last forever since it may be repudiated by a co-owner.260 In such a case, the action for partition does not lie.261 Hence, if the defendants show that they had previously asserted title in themselves adversely to the plaintiff and for the requisite period of time, the plaintiffs right to require recognition of his status as a co-owner will have been lost by prescription and the court cannot issue an order granting partition.262 Hence, from the moment one of the co-owners claims that he is the absolute and exclusive owner of the properties and denies the others any share therein, the question involved is no longer one of partition but of ownership263 and the prescriptive period will begin to run and may eventually operate to divest the real owners of their right to the property after the lapse of the applicable statutory period.264
Jardin v. Hallasgo, 117 SCRA 532, 536, Sept. 30, 1982. Id. 262 Roque v. Intermediate Appellate Court, 165 SCRA 118, 126, Aug. 30, 1988. 263 Delima v. Court of Appeals, 201 SCRA 641, Sept. 24, 1991. 264 165 SCRA 368, 376, Sept. 19, 1988.
260 261
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As discussed in supra 73.1, a co-ownership is a form of trust and every co-owner is a trustee for the others. In Article 1451, when land passes by succession to any person and he causes the legal title to be put in the name of another, a trust is established by implication of law for the benet of the true owner. Likewise, under Article 1456 of the same Code, if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benet of the person from whom the property comes. Thus, in a situation where there is a repudiation of the co-ownership over a real property, it has been held that the action for reconveyance by a coowner of his share prescribes in ten (10) years, the action being based on an implied or constructive trust.265 When does the ten-year period commence to run? In a registered property, the point of reference is ordinarily the date of registration of the deed or the date of the issuance of the certicate of title over the property.266 The Supreme Court has held that when a co-owner of the property in question executed a deed of partition and on the strength thereof obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein he appears as the new owner of the property, thereby in effect denying or repudiating the ownership of the other co-owners over their shares, the statute of limitations started to run for the purposes of the action instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights thereunder.267 In Delima v. Court of Appeals,268 it was held that the issuance of the new title in the name of one of the coowners constituted an open and clear repudiation of the trust or coownership and as the certicate of title was notice to the whole world of his exclusive title to the land, such rejection was binding on the other co-owners and started as against them the period of prescription. In Delima, three brothers and a sister inherited a parcel of land from their father, Lino Delima, in 1921. In 1953, the inherited property was transferred in the name of the Legal Heirs of Lino Delima, represented by Galileo Delima under TCT No. 2744. In the same year, Galileo Delima executed an afdavit of Extra-judicial Declaration of Heirs
Delima v. CA, supra; Segura v. Segura, 165 SCRA 368; Heirs of Jose Olviga v. Court of Appeals, 227 SCRA 330. 266 Vda. de Cabrera v. CA, 267 SCRA 339. 267 Delima v. CA, supra; Castillo v. Court of Appeals, 10 SCRA 549. 268 Supra.
265
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and based on this afdavit, TCT No. 2744 was cancelled and TCT No. 3009 was issued on February 4, 1954 in the name of Galileo Delima alone to the exclusion of the other heirs. Thereafter, Galileo Delima declared the lot in his name for taxation purposes and paid the taxes thereon from 1954 to 1965. On February 28, 1968, the surviving heirs of the siblings of Galileo led an action for reconveyance and/or partition of the property. In holding that the action led had already prescribed, the Court explained We have held that when a co-owner of the property in question executed a deed of partition and on the strength thereof obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein he appears as the new owner of the property, thereby in effect denying or repudiating the ownership of the other co-owners over their shares, the statute of limitations started to run for the purposes of the action instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights thereunder (Castillo v. Court of Appeals, No. L-18046, March 31, 1964, 10 SCRA 549). Since an action for reconveyance of land based on implied or constructive trust prescribes after ten (10) years, it is from the date of the issuance of such title that the effective assertion of adverse title for purposes of the statute of limitations is counted (Jaramil v. Court of Appeals, No. L-31858, August 31, 1977, 78 SCRA 420). Evidence shows that TCT No. 2744 in the name of the legal heirs of Lino Delima, represented by Galileo Delima, was cancelled by virtue of an afdavit executed by Galileo Delima and that on February 4, 1954, Galileo Delima obtained the issuance of a new title in his name numbered TCT No. 3009 to the exclusion of his co-heirs. The issuance of this new title constituted an open and clear repudiation of the trust or co-ownership, and the lapse of ten (10) years of adverse possession by Galileo Delima from February 4, 1954 was sufcient to vest title in him by prescription. As the certicate of title was notice to the whole world of his exclusive title to the land, such rejection was binding on the other heirs and started as against them the period of prescription. Hence,
339
when petitioners led their action for reconveyance and/or to compel partition on February 29, 1968, such action was already barred by prescription. Whatever claims the other co-heirs could have validly asserted before can no longer be invoked by them at this time. In Maritegui v. Court of Appeals,269 however, the Supreme Court held that when a co-owner or co-heir registered the properties in his name in fraud of other co-owners or co-heirs, prescription can only be deemed to have commenced from the time the latter discovered the formers act of defraudation. In Adille v. Court of Appeals,270 the Court held that while it is true that registration under the Torrens system is constructive notice of title, the Torrens title does not furnish a shield for fraud. In Adille, one of the co-owners redeemed a foreclosed property belonging to the co-ownership and was able to secure a title only in his name. In holding that the action led by the other co-owners has not yet prescribed, the Court explained This Court is not unaware of the well-established principle that prescription bars any demand on property (owned in common) held by another (co-owner) following the required number of years. In that event, the party in possession acquires title to the property and the state of co-ownership is ended. In the case at bar, the property was registered in 1955 by the petitioner, solely in his name, while the claim of the private respondents was presented in 1974. Has prescription then, set in? We hold in the negative. Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). The act of repudiation, in turn is subject to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in possession through open, continuous, exclusive; and notorious possession of the property for the period required by law.
269 270
205 SCRA 337, citing Adille v. Court of Appeals, 157 SCRA 455. Supra.
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The instant case shows that the petitioner had not complied with these requisites. We are not convinced that he had repudiated the co-ownership; on the contrary, he had deliberately kept the private respondents in the dark by feigning sole heirship over the estate under dispute. He cannot therefore be said to have made known his efforts to deny the co-ownership. Moreover, one of the private respondents, Emeteria Asejo, is occupying a portion of the land up to the present, yet, the petitioner has not taken pains to eject her therefrom. As a matter of fact, he sought to recover possession of that portion Emeteria is occupying only as a counterclaim, and only after the private respondents had rst sought judicial relief. It is true that registration under the Torrens system is constructive notice of title, but it has likewise been our holding that the Torrens title does not furnish a shield for fraud. It is therefore no argument to say that the act of registration is equivalent to notice of repudiation, assuming there was one, notwithstanding the long-standing rule that registration operates as a universal notice of title. For the same reason, we cannot dismiss the private respondents claims commenced in 1974 over the estate registered in 1955. While actions to enforce a constructive trust prescribes in ten years, reckoned from the date of the registration of the property, we, as we said, are not prepared to count the period from such a date in this case. We note the petitioners sub rosa efforts to get hold of the property exclusively for himself beginning with his fraudulent misrepresentation in his unilateral afdavit of extrajudicial settlement that he is the only heir and child of his mother Feliza with the consequence that he was able to secure title in his name also. Accordingly, we hold that the right of the private respondents commenced from the time they actually discovered the petitioners act of defraudation. According to the respondent Court of Appeals, they came to know [of it] apparently only during the progress of the litigation. Hence, prescription is not a bar.
341
Between the two contrasting views in the Delima and Mariategui cases, the ruling in the latter case is more in keeping with justice and equity and should thus be followed after all, our courts are not only courts of law but also, and more importantly, courts of justice. The foregoing discussions, however, apply only when the plaintiff or the person enforcing the trust is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe.271 The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession.272
[74.4] Action For Partition, Explained
An action for partition which is typically brought by a person claiming to be co-owner of a specied property against a defendant or defendants whom the plaintiff recognizes to be co-owners may be seen to present simultaneously two principal issues. First, there is the issue of whether the plaintiff is indeed a co-owner of the property sought to be partitioned. Second, assuming that the plaintiff successfully hurdles the rst issue, there is the secondary issue of how the property is to be divided between plaintiff and defendant(s) i.e., what portion should go to which co-owner.273 Should the trial court nd that the defendants do not dispute the status of the plaintiff as co-owner, the court can forthwith proceed to the actual partitioning of the property involved. In case the defendants assert in their Answer exclusive title in themselves adversely to the plaintiff, the court should not dismiss the plaintiffs action for partition but, on the contrary and in the exercise of its general jurisdiction, resolve the question of whether the plaintiff is co-owner or not. Should the trial
Vda. de Cabrera v. CA, supra. Id. 273 Roque v. Intermediate Appellate Court, 165 SCRA 118, 125.
271 272
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court nd that the plaintiff was unable to sustain his claimed status as co-owner, or that the defendants are or have become the sole and exclusive owners of the property involved, the court will necessarily have to dismiss the action for partition. This result would be reached, not because the wrong action was commenced by the plaintiff, but rather because the plaintiff having been unable to show co-ownership rights in himself, no basis exists for requiring the defendants to submit to partition the property at stake. If, upon the other hand, the court after trial should nd the existence of co-ownership among the parties litigant, the court may and should order the partition of the property in the same action. Judgment for one or the other party being on the merits, the losing party (respondents in this case) may then appeal the same. In either case, however, it is quite unnecessary to require the plaintiff to le another action, separate and independent from that for partition originally instituted. Functionally, an action for partition may be seen to be at once an action for declaration of co-ownership and for segregation and conveyance of a determinate portion of the property involved. This is the import of our jurisprudence on the matter and is sustained by the public policy which abhors multiplicity of actions.274
[74.5] When Partition Not Available
The action for partition will not be available in the following instances: (1) When there is an agreement among the owners to keep the thing undivided.275 However, such agreement must not exceed ten years.276 Where the parties stipulate a denite period of indivision which exceeds the maximum allowed by law, said stipulation shall be void only as to the period beyond such maximum.277 However, the period of ten years may be extended by a new agreement.278 (2) When the donor or testator prohibits partition for a period which shall not exceed twenty (20) years.279 Although the Civil Code is silent as to the effect of the indivision of a property for more than twenty years, it would be contrary to public policy to sanction coId. Art. 494, 2nd par., NCC. 276 Id. 277 Oliveras v. Lopez, 168 SCRA 431. 278 Art. 494, 2nd par., NCC; see also Art. 1083, NCC. 279 Art. 494, 3rd par., NCC.
274 275
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ownership beyond the period set by the law. Otherwise, the 20-year limitation expressly mandated by the Civil Code would be rendered meaningless.280 (3) When the law prohibits partition281 such as when the origin or juridical nature of co-ownership prevents partition: Examples: (a) The spouses, who are governed by a regime of absolute community, cannot agree to partition the community property without a judicial order.282 The heirs cannot partition the family home upon the death of the person or persons who constituted the same unless the court nds compelling reasons therefore.283 Upon the death of the person or persons who constituted the family home and there are two or more heirs, the whole estate of the decedent (including the family home) is, before its partition, owned in common by such heirs, subject to the payment of the debts of the deceased.284 As a rule, any one of the co-owners may demand partition at any time.285 However, so long as the family home continues as such pursuant to the provisions of Article 159 of the Family Code, the heirs are prohibited from partitioning the family home unless the court nds compelling reason therefore.286
(b)
(4) When partition would render the thing unserviceable for the use for which it is intended.287
[74.6] When thing is essentially indivisible
Whenever the thing is essentially indivisible and the co-owners cannot agree that it be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds distributed.288 This is resorted to
Oliveras v. Lopez, supra. Art. 494, 3rd par., NCC. 282 Art. 134, FC. 283 Art. 159, FC. 284 Art. 1078, NCC. 285 Art. 494, NCC. 286 Art. 159, FC. 287 Art. 495, NCC. 288 Art. 498, NCC.
280 281
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when: (1) the right to partition the property is invoked by any of the coowners but because of the nature of the property it cannot be subdivided or its subdivision would prejudice the interests of the co-owners, and (2) the co-owners are not in agreement as to who among them shall be allotted or assigned the entire property upon proper reimbursement of the co-owners.289 In Reyes v. Concepcion,290 the Court upheld the order of the trial court directing the holding of a public sale of the properties owned in common pursuant to Article 498 of the Civil Code. The Court therein held Moreover, there is no legal inrmity tainting respondent trial judges order for the holding of a public sale of the subject properties pursuant to the provisions of Article 498 of the New Civil Code. After a careful examination of the proceedings before respondent trial judge, the Court nds that respondent trial judges order was issued in accordance with the laws pertaining to the legal or juridical dissolution of co-ownerships. It must be noted that private respondents, in their answer with counterclaim prayed for, inter alia, the partition of the subject properties in the event that the petitioners refused to purchase their pro-indiviso shares at the rate of P12.50 per square meter. Unlike petitioners claim of a pre-emptive right to purchase the other co-owners pro-indiviso shares, private respondents counterclaim for the partition of the subject properties is recognized by law, specically Article 494 of the New Civil Code which lays down the general rule that no co-owner is obliged to remain in the co-ownership. Article 494 reads as follows: No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time partition of the thing owned in common, insofar as his share is concerned. Nevertheless, an agreement to keep the thing undivided for a certain period of time, not
289 290
Aguilar v. Court of Appeals, 227 SCRA 473. 190 SCRA 171.
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exceeding ten years, shall be valid. This term may be extended by a new agreement. A donor or testator may prohibit partition for a period which shall not exceed twenty years. Neither shall there be partition when it is prohibited by law. No prescription shall run in favor of a coowner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. None of the legal exceptions under Article 494 applies to the case at bar. Private respondents counterclaim for the partition of the subject properties was therefore entirely proper. However, during the pre-trial proceedings, petitioners adopted the position that the subject properties were incapable of physical partition. Initially, private respondents disputed this position. But after petitioners inexplicably refused to abide by the pre-trial order issued by respondent trial judge, and stubbornly insisted on exercising an alleged pre-emptive right to purchase private respondents shares at a reasonable price, private respondents relented and adopted petitioners position that the partition of the subject properties was not economically feasible, and, consequently, invoked the provisions of Article 498 of the New Civil Code[Private respondents Motion To Allot Properties To Defendants Or To Sell the Same Pursuant To Article 498 Of The Civil Code, Annex D of the Petition; Rollo, pp. 46-49]. Inasmuch as the parties were in agreement as regards the fact that the subject properties should not be partitioned, and private respondents continued to manifest their desire to terminate the co-ownership arrangement between petitioners and themselves, respondent trial judge acted within his jurisdiction when he issued his order dated February 4, 1981 requiring the parties to answer certain questions for the purpose of determining whether or not the legal conditions for the applicability of Article 498 of the New Civil Code were present in the case.
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Art. 498 provides that: Whenever the thing is essentially indivisible and the co-owners cannot agree that it be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds distributed. The sale of the property held in common referred to in the above article is resorted to when (1) the right to partition the property among the co-owners is invoked by any of them but because of the nature of the property, it cannot be subdivided or its subdivision [See Article 495 of the New Civil Code] would prejudice the interests of the co-owners (See Section 5 of Rule 69 of the Revised Rules of Court) and (2) the co-owners are not in agreement as to who among them shall be allotted or assigned the entire property upon reimbursement of the shares of the other coowners. Petitioners herein did not have justiable grounds to ignore the queries posed by respondent trial judge and to insist that hearings be conducted in order to ascertain the reasonable price at which they could purchase private respondents pro-indiviso shares [Petitioners Compliance and Motion dated February 27, 1981, Annex H of the Petition; Rollo, pp. 57-60]. Since at this point in the case it became reasonably evident to respondent trial judge that the parties could not agree on who among them would be allotted the subject properties, the Court nds that respondent trial judge committed no grave abuse of discretion in ordering the holding of a public sale for the subject properties (with the opening bid pegged at P12.50 per square meter), and the distribution of the proceeds thereof amongst the co-owners, as provided under Article 498 of the New Civil Code. In Aguilar v. Court of Appeals, cited in supra 64.3, the Court also sustained the sale of the community property under the provisions of Article 498 of the Civil Code.
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Article 498 of the Civil Code is complemented by Article 1086 of the Civil Code which provides, as follows: Art. 1086. Should a thing be indivisible, or would be much impaired by its being divided, it may be adjudicated to one of the heirs, provided he shall pay the others the excess in cash. Nevertheless, if any of the heirs should demand that the thing be sold at public auction and that strangers be allowed to bid, this must be done. (1062)
[74.7] Legal Effects of Partition
Once a partition has been made, whether by agreement among the co-owners or by judicial proceedings,291 the following are the legal effects thereof: (1) The co-ownership is terminated292 and each co-owner becomes the absolute and exclusive owner of the share allotted to him.293 And he shall be deemed to be in exclusive possession of that portion which has been allotted to him even during the entire period that the co-ownership lasted.294 (2) It shall not prejudice the rights of third persons, who shall retain the rights of mortgage, servitude, or any other real rights belonging to them before the division was made.295 (3) Personal rights pertaining to third persons against the ownership shall also remain in force.296 (4) Mutual accounting shall be rendered by the co-owners to each other with regard to benets and expenses and each co-owner shall pay for damages caused by reason of his negligence or fraud.297 In the partition among co-heirs, they shall reimburse one another for the
Art. 496, NCC. See discussion under supra 72.1. 293 Art. 1091, NCC. 294 Art. 543, NCC. 295 Art. 499, NCC. 296 Id. 297 Art. 500, NCC.
291 292
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income and fruits which each one of them may have received from any property of the estate, for any useful and necessary expenses made upon such property, and for any damage thereto through malice or neglect.298 (5) Every co-owner shall be liable for defects of title and quality of the portion assigned to each of the other co-owners.299 oOo
298 299
Art. 1087, NCC. Art. 501, NCC; see also Arts. 1092-1096, NCC.
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Title IV. SOME SPECIAL PROPERTIES

Chapter 1 WATERS Section 1. Ownership of Waters
Art. 502. The following are of public dominion: (1) Rivers and their natural beds; (2) Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves; (3) Waters rising continuously or intermittently on lands of public dominion; (4) Lakes and lagoons formed by Nature on public lands, and their beds; (5) Rain waters running through ravines or sand beds, which are also of public dominion; (6) Subterranean waters on public lands; (7) Waters found within the zone of operation of public works, even if constructed by a contractor; (8) Waters rising continuously or intermittently on lands belonging to private persons, to the State, to a province, or to a city or a municipality from the moment they leave such lands; (9) The waste waters of fountains, sewers and public establishments. (407) Art. 503. The following are of private ownership: (1) Continuous or intermittent waters rising on lands of private ownership, while running through the same; (2) lands; (3) Lakes and lagoons, and their beds, formed by Nature on such Subterranean waters found on the same;
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(4) Rain waters falling on said lands, as long as they remain within the boundaries; (5) The beds of owing waters, continuous or intermittent, formed by rain water, and those of brooks, crossing lands which are not of public dominion. In every drain or aqueduct, the water, bed, banks and oodgates shall be considered as an integral part of the land or building for which the waters are intended. The owners of lands, through which or along the boundaries of which the aqueduct passes, cannot claim ownership over it, or any right to the use of its bed or banks, unless the claim is based on titles of ownership specifying the right or ownership claimed. (408)
Section 2. The Use of Public Waters

Art. 504. The use of public waters is acquired: (1) (2) By administrative concession; By prescription for ten years.
The extent of the rights and obligations of the use shall be that established, in the rst case, by the terms of the concession, and, in the second case, by the manner and form in which the waters have been used. (409a) Art. 505. Every concession for the use of waters is understood to be without prejudice to third persons. (410) Art. 506. The right to make use of public waters is extinguished by the lapse of the concession and by non-user for ve years. (411a)
75. Governing Laws on Waters Prior to the enactment of the New Civil Code, matters relating to waters or water resources were governed by the following laws: (1) the Civil Code of Spain of 1889 (the Old Civil Code), which was extended to the Philippines by Royal Decree of July 31, 1889; (2) the Spanish Law on Waters of 1866, which was extended to the Philippines by the Royal Decree of August 3, 1866; and (3) the Irrigation Act (Act No. 2152), which was passed by the Philippine Legislature in 1912. While the New Civil Code (R.A. No. 386, as amended), which took effect on August 30, 1950, repealed expressly those parts and provisions of the Civil Code of 1889 which were then in force at that time, there was no express repeal of the provisions of the Spanish Law on Waters of 1866 and the Irrigation Act of 1912.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION SOME SPECIAL PROPERTIES Waters
351
In 1976, the Water Code of the Philippines (P.D. No. 1067) was promulgated expressly repealing the provisions of the Irrigation Act. However, the provisions of the Spanish Law on Waters of 1866 and the New Civil Code on ownership of waters, easements relating to waters, use of public waters and acquisitive prescription on the use of waters, were considered repealed only to the extent that they were inconsistent with the provisions of the Water Code of the Philippines. Hence, under present laws, matters relating to waters or water resources are governed primarily by the Water Code of the Philippines. The provisions of the New Civil Code on waters and that of the Spanish Law on Waters of 1866, which are not in conict with the Water Code of the Philippines, still apply. 76. Ownership of Waters The basic provision governing the ownership of waters within the territorial jurisdiction of the Philippines is Section 2, Article XII of the 1987 Philippine Constitution which provides, part, as follows Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, sheries, forests or timber, wildlife, ora and fauna, and other natural resources are owned by the State. x x x1 With the foregoing provision of the Constitution, it seems that all waters in their natural beds must be considered of public dominion.2 Indeed, the basic State principles underlying the enactment of the Water Code of the Philippines are stated, as follows: 1. All waters belong to the State. 2. All waters that belong to the state can not be the subject of acquisitive prescription.
1 This is a substantial reproduction of Section 8, Article XIV of the 1973 Constitution which provides, as follows: Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, sheries, wildlife, and other natural resources of the Philippines belong to the State. x x x 2 See II Tolentino, Civil Code of the Philippines, 1992 ed., 219.
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3. The State may allow the use or development of waters by administration concession. 4. The utilization, exploitation, development, conservation and protection of water resources shall be subject to the control and regulation of the government through the National Water Resources Council, hereinafter referred to as the Council. 5. Preference in the use and development of waters shall consider current usages and be responsive to the changing needs of the country.3
[76.1] State Ownership of Waters
The Water Code of the Philippines, in implementing the mandate of Section 8, Article XIV of the 1973 Constitution4 which declared waters as belonging to the State, appears to have nationalized the ownership of waters found in their natural beds by declaring all of them as State-owned, whether the waters are found on public property or on private lands. Articles 5 and 6 of the Water Code of the Philippines provide, as follows Art. 5. The following belong to the state: a. Rivers and their natural beds; b. Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves; c. Natural lakes and lagoons; d. All other categories of surface waters such as water owing over lands, water form rainfall whether natural or articial, and water from agriculture run-off, seepage and drainage; e. f. g. Atmospheric water; Subterranean or ground water; and Seawater.
3 4
See Art. 3, Water Code of the Philippines. The precursor of Sec. 2, Article XII of the 1987 Phil. Constitution.
353
Art. 6. The following waters found on private lands also belong to the States: a. lands; b. c. d. e. Continuous or intermittent waters rising on such Lakes and lagoons naturally occurring on such lands; Rain water and falling on such lands; Subterranean or ground waters; and Waters in swamps and marshes.
The owner of the land where the water is found may use the same for domestic purposes without securing a permit, provided that such use shall be registered, when required by the Council. The Council, however, may regulate such use when there is wastage, or in times of emergency. In declaring the waters enumerated in Article 6 of the Water Code of the Philippines as belonging to the State, the said law has the effect of repealing the provisions of Article 503 of the New Civil Code because the provisions of the latter law are totally inconsistent with the former. Under existing laws, therefore, there are no more waters of private ownership to speak of. However, for those waters found on private lands mentioned in Article 6 of the Water Code of the Philippines, the owner of the land may use the waters for domestic without securing a permit from the National Water Resources Council, although the Council may regulate such use in two occasions: (1) when there is wastage; or (2) in times of emergency.
[76.2] Subterranean or Ground Waters
While it is the rule in Article 437 of the New Civil Code that the ownership of lands extends to the surface as well as to the subsoil under it, such rule does not extend to the waters under the ground, known as subterranean or ground waters. Pursuant to paragraph (d) of Article 6 of the Water Code of the Philippines, subterranean or ground waters belong to the State even if they are found on private lands. As such, any construction of installations for the utilization of subterranean or
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ground waters may not be undertaken unless the plans and specications thereof are approved by the proper government agency.5 Section 3. The Use of Waters of Private Ownership
Art. 507. The owner of a piece of land on which a spring or brook rises, be it continuous or intermittent, may use its waters while they run through the same, but after the waters leave the land they shall become public, and their use shall be governed by the Special Law of Waters of August 3, 1866, and by the Irrigation Law. (412a) Art. 508. The private ownership of the beds of rain waters does not give a right to make works or constructions which may change their course to the damage of third persons, or whose destruction, by the force of oods, may cause such damage. (413) Art. 509. No one may enter private property to search waters or make use of them without permission from the owners, except as provided by the Mining Law. (414a) Art. 510. The ownership which the proprietor of a piece of land has over the waters rising thereon does not prejudice the rights which the owners of lower estates may have legally acquired to the use thereof. (415) Art. 511. Every owner of a piece of land has the right to construct within his property, reservoirs for rain waters, provided he causes no damage to the public or to third persons. (416)
Section 4. Subterranean Waters

Art. 512. Only the owner of a piece of land, or another person with his permission, may make explorations thereon for subterranean waters, except as provided by the Mining Law. Explorations for subterranean waters on lands of public dominion may be made only with the permission of the administrative authorities. (417a) Art. 513. Waters articially brought forth in accordance with the Special Law of Waters of August 3, 1866, belong to the person who brought them up. (418) Art. 514. When the owner of waters articially brought to the surface abandons them to their natural course, they shall become of public dominion. (419)
See Art. 39, Water Code of the Philippines.
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Section 5. General Provisions

Art. 515. The owner of a piece of land on which there are defensive works to check waters, or on which, due to a change of their course, it may be necessary to reconstruct such works, shall be obliged, at his election, either to make the necessary repairs or construction himself, or to permit them to be done, without damage to him, by the owners of the lands which suffer or are clearly exposed to suffer injury. (420) Art. 516. The provisions of the preceding article are applicable to the case in which it may be necessary to clear a piece of land of matter, whose accumulation or fall may obstruct the course of the waters, to the damage or peril of third persons. (421) Art. 517. All the owners who participate in the benets arising from the works referred to in the two preceding articles, shall be obliged to contribute to the expenses of construction in proportion to their respective interests. Those who by their fault may have caused the damage shall be liable for the expenses. (422) Art. 518. All matters not expressly determined by the provisions of this Chapter shall be governed by the special Law of Waters of August 3, 1866, and by the Irrigation Law. (425a)
77. Appropriation of Waters All waters that belong to the State, according to Article 3 of the Water Code of the Philippines, cannot be the subject of acquisitive prescription. Hence, to this extent, paragraph 2 of Article 504 of the New Civil Code, which authorizes acquisition of use of public waters by prescription, is deemed to have been repealed. Ordinarily, appropriation of water is not authorized without a water permit, which is the privilege granted by the government to appropriate and use water and evidenced by a document known as water permit.6 A water permit, however, need not be secured in the following instances: 1. For use of waters found on private lands by the owner thereof but only for domestic purposes.7 Use of water for domestic purpose is the utilization of water for drinking, washing, bathing, cooking or other
6 7
See Art. 13, Water Code of the Philippines. See Art. 6, Water Code of the Philippines.
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household needs, home gardens, and watering of lawns or domestic animals.8 2. For appropriation or use of natural bodies of water for any of the following: (a) Appropriation of water by means of hand-carried receptacles; and (b) Bathing or washing, watering or dipping of domestic or farm animals, and navigation of watercrafts or transportation of logs and other objects by oatation.9 Water which are legally appropriated pursuant to the provisions of the Water Code of the Philippines shall be subject to the control of the appropriator from the moment it reaches the appropriators canal or aqueduct leading to the place where the waters will be used or stored and, thereafter, so long as it is being benecially used for the purposes for which it was appropriated.10
PRESIDENTIAL DECREE NO. 1067 December 31, 1976 THE WATER CODE OF THE PHILIPPINES (A DECREE INSTITUTING A WATER CODE, THEREBY REVISING AND CONSOLIDATING THE LAWS GOVERNING THE OWNERSHIP, APPROPRIATION, UTILIZATION, EXPLOITATION, DEVELOPMENT, CONSERVATION AND PROTECTION OF WATER RESOURCES) WHEREAS, Article XIV, Section 8 of the New Constitution of the Philippines provides, inter alia, that all waters of the Philippines belong to the State; WHEREAS, existing water legislations are piece-meal inadequate to cope with increasing scarcity of water and changing patterns of water use; WHEREAS, there is a need for a Water Code based on rational concepts of integrated and multi-purpose management of water resources and sufciently exible to adequately meet future developments:
See Art. 10, Water Code of the Philippines. See Art. 14, Water Code of the Philippines. 10 See Art. 8, Water Code of the Philippines.
8 9
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WHEREAS, water is vital national development and it has become increasingly necessary for government to intervene actively in improving the management of water resources; NOW, THEREFORE, I, FERDINAND, E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, do hereby orders and decree the enactment of the Water Code of the Philippines of 1976, as follows: CHAPTER I DECLARATION OF OBJECTIVES AND PRINCIPLES Article 1. This Code shall be known as The Water Code of the Philippines. Article 2. The objectives of this Code are: a. To establish the basic principles and framework relating to the appropriation, control and conservation of water resources to achieve the optimum development and rational utilization of these resources; b. To dene the extent of the rights and obligation of water users and owners including the protection and regulation of such rights; c. To adopt a basic law governing the ownership, appropriation, utilization, exploitation, development, conservation and protection of water resources and rights to land related thereto; and d. Code. Art. 3. The underlying principles of this code are: a. All waters belong to the State. b. All waters that belong to the state can not be the subject of acquisitive prescription. c. The State may allow the use or development of waters by administration concession. d. The utilization, exploitation, development, conservation and protection of water resources shall be subject to the control and regulation of the government through the National Water Resources Council, hereinafter referred to as the Council. e. Preference in the use and development of waters shall consider current usages and be responsive to the changing needs of the country. To identify the administrative agencies which will enforce this
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Art. 4. Waters, as used in this Code, refers to water under the grounds, water above the ground, water in the atmosphere and the waters of the sea within the territorial jurisdiction of the Philippines. CHAPTER II OWNERSHIP OF WATERS Art. 5. The following belong to the state: a. Rivers and their natural beds; b. Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves; c. Natural lakes and lagoons; d. All other categories of surface waters such as water owing over lands, water form rainfall whether natural or articial, and water from agriculture run-off, seepage and drainage; e. f. g. Atmospheric water; Subterranean or ground water; and Seawater.
Art. 6. The following waters found on private lands also belong to the States: a. b. c. d. e. Continuous or intermittent waters rising on such lands; Lakes and lagoons naturally occurring on such lands; Rain water and falling on such lands; Subterranean or ground waters; and Waters in swamps and marshes.
The owner of the land where the water is found may use the same for domestic purposes without securing a permit, provided that such use shall be registered, when required by the Council. The Council, however, may regulate such use when there is wastage, or in times of emergency. Art. 7. Subject to the provisions of this Code, any person who captures or collects water by means of cisterns, tanks, or pools shall have exclusive control over such water and the right to dispose of the same. Art. 8. Water legally appropriated shall be subject to the control of the appropriator from the moment it reaches the appropriators canal or aqueduct
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leading to the place where the water will be used or stored and, thereafter, so long as it is being benecially used for the purposes for which it was appropriated. CHAPTER III APPROPRIATION OF WATERS Art. 9. Waters may be appropriated and used in accordance with the provisions of this Code. Appropriation of water, as used in this Code, is the acquisition of rights over the use of waters or the taking or diverting of waters from a natural source in the manner and for any purpose allowed by law. Art. 10. Water may be appropriated for the following purposes: a. b. c. d. e. f. g. h. i. Domestic; Municipal; Irrigation; Power generation; Fisheries; Livestock raising; Industrial; Recreational; and Other purposes;
Use of water for domestic purposes is the utilization of water for drinking, washing, bathing, cooking or other household needs, home gardens, and watering of lawns or domestic animals. Use of water for municipal purposes is the utilization of water for supplying the water requirements of the community. Use of water for irrigation is the utilization of water for producing agricultural crops. Use of water for power generation is the utilization of water for producing electrical or mechanical power. Use of water for power sheries is the utilization of water for the propagation and culture of sh as a commercial enterprise. Use of water for livestock raising is the utilization of water for large herds or ocks of animals raised as a commercial enterprise.
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Use of water for industrial purposes is the utilization of water in factories, industrial plants and mines, including the use of water as an ingredient of a nished product. Use of water for recreational purposes is the utilization of water for swimming pools, bath houses, boating, water skiing, golf courses and other similar facilities in resorts and other places of recreation. Art. 11. The state, for reasons of public policy, may declare waters not previously appropriated, in whole or in part, exempt from appropriation for any or all purposes and, thereupon, such waters may not be appropriated for those purposes. Art. 12. Waters appropriated for a particular purpose may be applied for another purpose only upon prior approval of the Council and on condition that the new use does not unduly prejudice the rights of other permittees, or require an increase in the volume of water. Art. 13. Except as otherwise herein provided, no person, including government instrumentalities or government-owned or controlled corporations, shall appropriate water without a water right, which shall be evidenced by a document known as a water permit. Water right is the privilege granted by the government to appropriate and use water. Art. 14. Subject to the provisions of this Code concerning the control, protection, conservation, and regulation of the appropriation and use of waters, any person may appropriate or use natural bodies of water without securing a water permit for any of the following. a. Appropriation of water by means of hand carried receptacles; and b. Bathing or washing, watering or dipping of domestic or farm animals, and navigation of watercrafts or transportation of logs and other objects by otation. Art. 15. Only citizens of the Philippines, of legal age, as well as juridical persons, who are duly qualied by law to exploit and develop water resources, may apply for water permits. Art. 16. Any person who desires to obtain a water permit shall le an application with the Council who shall make known said application to the public for any protests. In determining whether to grant or deny an application, the Council shall consider the following: protests led, if any; prior permits granted; the availability of water; the water supply need for benecial use; possible adverse effects; land-use economics; and other relevant factors.
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Upon approval of an application, a water permit shall be issued and recorded. Art. 17. The right to the use of water is deemed acquired as of the date of ling of the application for a water permit in case of approved permits, or as of the date of actual use in a case where no permit is required. Art. 18. All water permits granted shall be subject to conditions of benecial use, adequate standards of design and construction, and such other terms and conditions as may be imposed by the Council. Such permits shall specify the maximum amount of water which may be diverted or withdrawn, the maximum rate diversion or withdrawal, the time or times during the year when water may be diverted or withdrawn, the points or points of diversion or location of wells, the place of use, the purpose for which water may be used and such other requirements the Council deems desirable. Art. 19. Water rights may be lent or transferred in whole or in part to another person with prior approval of the Council, after due notice and hearing. Art. 20. The measure and limit of appropriation of water shall be benecial use. Benecial use of water is the utilization of water in the right amount during the period that the water is needed for producing the benets for which the water is appropriated. Art. 21. Standards of benecial use shall be prescribed by the Council for the appropriator of water for different purposes and conditions, and the use of waters which are appropriated shall be measured and controlled in accordance therewith. Excepting those for domestic use, every appropriator of water shall maintain water control and measuring devices, and keep records or water withdrawal. When required by the Council, all appropriators of water shall furnish information on water use. Art. 22. Between two or more appropriation of water from the same sources of supply, priority in time of appropriation shall give the better right, except that in times of emergency, the use of water for domestic and municipal purposes shall have a better right over all other uses; Provided, That where water shortage is recurrent and the appropriator for municipal use has a lower priority in time of appropriation, then it shall be his duty to nd an alternative source of supply in accordance with conditions prescribed by the Council. Art. 23. Priorities may be altered on grounds of greater benecial use, multi-purpose use, and other similar grounds after due notice and hearing, subject to payment of compensation in proper cases.
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Art. 24. A water right shall be exercised in such a manner that rights of third persons or of other appropriators are not prejudiced thereby. Art. 25. A holder of a water permit may demand the establishment of easements necessary for the construction and maintenance of the works and facilities needed for the benecial use of the waters to be appropriated subject to the requirements of just compensation and to the following conditions: a. That he is the owner, lessee, mortgage or one having real right over the land upon which he proposes to use water; and b. That the proposed easement is the most convenient and the least onerous to the servient estate. Easement relating to the appropriation and use of waters may be modied by agreement of the contracting parties provided the same is not contrary to law or prejudicial to third persons. Art. 26. Where water shortage is recurrent, the use of the water pursuant to a permit may, in the interest of equitable distribution of benets among legal appropriators, be reduced after due notice and hearing. Art. 27. Water users shall bear the diminution of any water supply due to natural causes or force majeure. Art. 28. Water permits shall continue to be valid as long as water is benecially used; however, it maybe suspended on the grounds of noncompliance with approved plans and specications or schedules of water distribution; use of water for a purpose other than that for which it was granted; non-payment of water charges, wastage; failure to keep records of water diversion, when required; and violation of any term or condition of any permit or of rules and regulations promulgated by the Council. Temporary permits may be issued for the appropriation and use of water for short periods under special circumstances. Art. 29. Water permits may be revoked after due notice and hearing on grounds of non-use; gross violation of the conditions imposed in the permit; unauthorized sale of water; willful failure or refusal to comply with rules and regulations or any lawful order; pollution, public nuisance or acts detrimental to public health and safety; when the appropriator is found to be disqualied under the law to exploit and develop natural resources of the Philippines; when, in the case of irrigation, the land is converted to non-agricultural purposes; and other similar grounds. Art. 30. All water permits are subject to modication or cancellation by the Council, after due notice and hearing, in favor of a project of greater benecial use or for multi-purpose development, and a water permittee who
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suffers thereby shall be duly compensated by the entity or person in whose favor the cancellation was made. CHAPTER IV UTILIZATION OF WATERS Art. 31. Preference in the development of water resources shall consider security of the State, multiple use, benecial effects, adverse effects and cost of development. Art. 32. The utilization of subterranean or ground water shall be coordinated with that of surface waters such as rivers, streams, springs and lakes, so that a superior right in one is not adversely affected by an inferior right in the other. For this purpose, the Council shall promulgate rules and regulations and declare the existence of control areas for the coordinated development, protection, and utilization of subterranean or ground water and surface waters. Control area is an area of land where subterranean or ground water and surface water are so interrelated that withdrawal and use in one similarly affects the other. The boundary of a control area may be altered from time to time, as circumstances warrant. Art. 33. Water contained in open canals, aqueducts or reservoirs of private persons may be used by any person for domestic purpose or for watering plants as long as the water withdrawn by manual methods without checking the stream or damaging the canal, aqueduct or reservoir; Provided, That this right may be restricted by the owner should it result in loss or injury to him. Art. 34. A water permittee or appropriator may use any watercourse to convey water to another point in the watercourse for the purpose stated in a permit and such water may be diverted or recaptured at that point by said permittee in the same amount less allowance for normal losses in transit Art. 35. Works for the storage, diversion, distribution and utilization of water resources shall contain adequate provision for the prevention and control of diseases that may be induced or spread by such works when required by the Council. Art. 36. When the reuse of waste water is feasible, it shall limited as much as possible to such uses other than direct human consumption. No person or agency shall distribute such water for public consumption until it is demonstrated that such consumption will not adversely affect the health and safety of the public.
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Art. 37. In the construction and operation of hydraulic works, due consideration shall be given to the preservation of scenic places and historical relics and in addition to the provisions of existing laws, no works that would require the destruction or removal of such places or relics shall be undertaken without showing that the destruction or removal is necessary and unavoidable. Art. 38. Authority for the construction of dams, bridges and other structures across of which may interfere with the ow of navigable or oatable waterways shall rst be secured from the Ministry of Public Works, Transportation and Communications [now Department of Public Works and Highways]. Art. 39. Except in cases of emergency to save life or property, the construction or repair of the following works shall be undertaken only after the plans and specications therefore, as may be required by the Council, are approved by the proper government agency; dams for the diversion or storage of water; structures for the use of water power; installations for the utilization of subterranean or ground water and other structures for utilization of water resources. Art. 40. No excavation for the purpose of emission of a hot spring or for the enlargement of the existing opening thereof shall be made without prior permit. Any person or agency who intends to develop a hot spring for human consumption must rst obtain a permit from the Department of Health. Art. 41. No person shall develop a stream, lake, or spring for recreational purposes without rst securing a permit from the council. Art. 42. Unless otherwise ordered by the President of the Philippines and only in times of national calamity or emergency, no person shall induce or restrain rainfall by any method such as cloud seeding without a permit from the proper government agency. Art. 43. No person shall raise or lower the water level of a river, stream, lake, lagoon or marsh nor drain the same without a permit. Art. 44. Drainage systems shall be so constructed that their outlets are rivers, lakes, the sea, natural bodies of water, such other water course as may be approved by the proper government agency. Art. 45. When a drainage channel is constructed by a number of persons for their common benet, cost of construction and maintenance of the channel shall be borne by each in proportion to the benets derived. Art. 46. When articial means are employed to drain water from higher to lower land, the owner of the higher land shall select the routes and methods
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of drainage that will cause the minimum damage to the lower lands, subject to the requirements of just compensation. Art. 47. When the use, conveyance or storage of water results in damage to another, the person responsible for the damage shall pay compensation. Art. 48. When a water resources project interferes with the access of landowner to a portion of his property or with the conveyance of irrigation or drainage water, the person or agency constructing the project shall bear the cost of construction and maintenance of the bridges, umes and other structures necessary for maintaining access, irrigation, or drainage in addition to paying compensation for land and incidental damages. Art. 49. Any person having an easement for an aqueduct may enter upon the servient land for the purpose of cleaning, repairing or replacing the aqueduct or the removal of obstructions therefrom. Art. 50. Lower estates are obliged to receive the waters which naturally and without the intervention of man ow from the higher estates, as well as the stones or earth which they carry with them. The owner of the lower estate can not construct works which will impede this natural ow, unless he provides an alternative method of drainage; neither can the owner of the higher estate make works which will increase this natural ow. Art. 51. The banks of rivers and streams and the shores of the seas and lakes throughout their entire length and within a zone of three (3) meters in urban areas, twenty (20) meters in agricultural areas and forty (40) meters in forest areas, along their margins, are subject to the easement of public use in the interest of recreation, navigation, oatage, shing and salvage. No person shall be allowed to stay in this zone longer than what is necessary for recreation, navigation, oatage, shing or salvage or to build structures of any kind. Art. 52. The establishment, extent, from, and conditions of easement of water not expressly determined by the provisions of this Code shall be governed by the provisions of the Civil Code. CHAPTER V CONTROL OF WATERS Art. 53. To promote the best interest and the coordinated protection of ood plain lands, the Secretary of Public Works, Transportation and Communications may declare ood control areas and promulgate guidelines for governing ood plain management plans in these areas.
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Art. 54. In declared ood control areas, rules and regulations may be promulgated to prohibit or control activities that may damage or cause deterioration of lakes and dikes, obstruct the ow of water, change the natural ow of the river, increase ood losses or aggravate ood problems. Art. 55. The government may construct necessary ood control structures in declared ood control areas, and for this purpose it shall have a legal easement as wide as may be needed along and adjacent to the river bank and outside the bed or channel of the river. Art. 56. River beds, sand bars and tidal ats may not be cultivated except upon prior permission from the Minister of Public Works, Transportation and Communication and such permission shall not be granted where such cultivation obstructs the ow of water or increase ood levels so as to cause damage to other areas. Art. 57. Any person may erect levees or revetments to protect his property from ood, encroachment by the river or change in the course of the river, provided that such constructions does not cause damage to the property of another. Art. 58. When a river or stream suddenly changes its course to traverse private lands, the owners of the affected lands may not compel the government to restore the river to its former bed; nor can they restrain the government from taking steps to revert the river or stream to its former course. The owners of the lands thus affected are not entitled to compensation for any damage sustained thereby. However, the former owners of the new bed shall be the owners of the abandoned bed proportion to the area lost by each. The owners of the affected lands may undertake to return the river or stream to its old bed at their own expense; Provided, That a permit therefore is secured from the Minister of Public Works, Transportation and Communication and work pertaining thereto are commenced within two years from the changes in the course of the river or stream. Art. 59. Rivers, lakes and lagoons may, upon the recommendation of the Philippines Coast Guard, be declared navigable either in whole or in part. Art. 60. The rafting of logs and other objects on rivers and lakes which are oatable may be controlled or prohibited during designated season of the year with due regard to the needs of irrigation and domestic water supply and other uses of water. Art. 61. The impounding of water in ponds or reservoirs may be prohibited by the Council upon consultation with the Department of Health if it is dangerous to public health, or it may order that such pond or reservoirs be drained if such is necessary for the protection of public health.
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Art. 62. Waters of a stream may be stored in a reservoir by a permittee in such amount as will not prejudice the right of any permittee downstream. Whoever operates the reservoir shall, when required, release water for minimum stream ow. All reservoir operations shall be subject to rules and regulations issued by the Council or any proper government agency. Art. 63. The operator of a dam for the storage of water may be required to employ an engineer possessing qualications prescribed for the proper operations, maintenance and administration of the dam. Art. 64. The Council shall approve the manner, location, depth, and spacing in which borings for subterranean or ground water may be made, determine the requirements for the registration of every boring or alteration to existing borings as well as other control measures for the exploitation of subterranean or ground water resources, and in coordination with the Professional Regulation Commission prescribe the qualications of those who would drill such borings. No person shall drill a well without prior permission from the Council. Art. 65. Water from one river basin may be transferred to another river basin only with approval of the Council. In considering any request for such transfer, the Council shall take into account the full costs of the transfer, the benets that would accrue to the basin of origin without the transfer, the benets that would accrue to the receiving basin on account of the transfer, alternative schemes for supplying water to the receiving basin, and other relevant favors. CHAPTER VI CONSERVATION AND PROTECTION OF WATERS AND WATERSHEDS AND RELATED LAND RESOURCES Art. 66. After due notice and hearing when warranted by circumstances, minimum stream ows for rivers and streams and minimum water levels for lakes may be established by the Council under such conditions as may be necessary for the protection of the environment, control of pollution, navigation, prevention of salt damage, and general public use. Art. 67. Any watershed or any area of land adjacent to any surface water or overlying any ground water may be declared by the Ministry of Natural Resources as a protected area. Rules and regulations may be promulgated by such Ministry to prohibit or control such activities by the owners or occupants thereof within the protected area which may damage or cause the deterioration of the surface water or ground water or interfere with the investigation, use, control, protection, management or administration of such waters.
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Art. 68. It shall be the duty of any person in control of a well to prevent the water from owing on the surface of the land, or into any surface water, or any porous stratum underneath the surface without being benecially used. Art. 69. It shall be the duty of any person in control of a well containing water with minerals or other substances injurious to man, animals, agriculture, and vegetation to prevent such waters from owing on the surface of the land or into any surface water or into any other aquifer or porous stratum. Art. 70. No person shall utilize an existing well or pond or spread waters for recharging subterranean or ground water supplies without prior permission of the Council. Art. 71. To promote better water conservation and usage for irrigation purposes, the merger of irrigation associations and the appropriation of waters by associations instead of by individuals shall be encouraged. No water permit shall be granted to an individual when his water requirement can be supplied through an irrigation association. Art. 72. In the consideration of a proposed water resource project, due regard shall be given to ecological changes resulting from the construction of the project in order to balance the needs of development and the protection of the environment. Art. 73. The conservation of sh and wild life shall receive proper consideration and shall be coordinated with other features of water resources development programs to insure that sh and wildlife values receive equal attention with other project purposes. Art. 74. Swamps and marshes which are owned by the State and which have a primary value for waterfowl propagation or other wildlife purposes may be reserved and protected from drainage operations and development. Art. 75. No person shall, without prior permission from the National Pollution Control Commission, build any works that may produce dangerous or noxious substance or perform any act which may result in the introduction of sewage, industrial waste, or any pollutant into any source of water supply. Water pollution is the impairment of the quality of water beyond a certain standard. This standard may vary according to the use of the water and shall be set by the National Pollution Control Commission. Art. 76. The establishment of cemeteries and waste disposal areas that may affect the source of a water supply or a reservoir for domestic or municipal use shall be subject to the rules and regulations promulgated by the Department of Health.
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Art. 77. Tailings from mining operations and sediments from placer mining shall not be dumped into rivers and waterways without prior permission from the Council upon recommendation by the National Pollution Control Commission. Art. 78. The application of agriculture fertilizers and pesticides may be prohibited or regulated by the National Pollution Control Commission in areas where such application may cause pollution of a source of water supply. CHAPTER VII ADMINISTRATION OF WATERS AND ENFORCEMENT OF THE PROVISIONS OF THIS CODE Art. 79. The Administration and enforcement of the provisions of this Code, including the granting of permits and the imposition of penalties for administrative violations hereof, are hereby vested in the council, and except in regard to those functions which under this Code are specically conferred upon other agencies of the government, the Council is hereby empowered to make all decisions and determinations provided for in this Code. Art. 80. The Council may deputize any ofcial or agency of the government to perform any of its specic functions or activities. Art. 81. The Council shall provide a continuing program for data collection, research and manpower development need for the appropriation, utilization, exploitation, conservation, and protection of the water resources of the country. Art. 82. In the implementation of the provisions of this Code, the Council shall promulgate the necessary rules and regulations which may provide for penalties consisting of a ne not exceeding One thousand Pesos (P1,000.00) and/or suspension or revocation of the water permit or other right to the use of water. Violations of such rules and regulations may be administratively dealt with by the Council. Such rules and regulations shall take effect fteen (15) days after publication in newspapers of general circulation. Rules and regulations prescribed by any government agency that pertain to the utilization, exploitation, development, control, conservation, or protection of water resources shall, if the council so requires, be subject to its approval. Art. 83. The Council is hereby authorized to impose and collect reasonable fees or charges for water resources development from water appropriators, except when it is for purely domestic purpose.
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Art. 84. The Council and other agencies authorized to enforce this Code are empowered to enter upon private lands, with previous notice to the owner, for the purpose of conducting surveys and hydrologic investigations, and to perform such other acts as are necessary in carrying out their functions including the power to exercise the right of eminent domain. Art. 85. No program or project involving the appropriation, utilization, exploitation, development, control, conservation, or protection of water resources may be undertaken without prior approval of the Council, except those which the council may, in its discretion, exempt. The Council may require consultation with the public prior to the implementation of certain water resources development projects. Art. 86. When plans and specications of a hydraulic structure are submitted for approval, the government agency whose functions embrace the type of project for which the structure is intended, shall review the plans and specications and recommend to the Council proper action thereon and the latter shall approve the same only when they are in conformity with the requirements of this Code and the rules and regulations promulgated by the Council. Notwithstanding such approval, neither the engineer who drew up the plans and specications of the hydraulic structure, nor the constructor who built it, shall be relieved of his liability for damages in case of failure thereof by reason of defect in plans and specications, or failure due to defect in plan construction, within ten (10) years from the completion of the structure. Any action to recover such damages must be brought within ve (5) years following such failure. Art. 87. The Council or its duly authorized representatives, in the exercise of its power to investigate and decide cases brought to its cognizance, shall have the power to administer oaths, compel the attendance of witnesses by subpoena duces tecum. Non-compliance or violation of such orders or subpoena and subpoena duces tecum shall be punished in the same manner as indirect contempt of an inferior court upon application by the aggrieved party with the proper Court of First Instance in accordance with the provisions of Rule 71 of the Rules of Court. Art. 88. The Council shall have original jurisdiction over all disputes relating to appropriation, utilization, exploitation, development, control, conservation and protection of waters within the meaning and context of the provisions of this Code. The decisions of the Council on water rights controversies shall be immediately executory and the enforcement thereof may be suspended only
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when a bond, in an amount xed by the Council to answer for damages occasioned by the suspension or stay of execution, shall have been led by the appealing party, unless the suspension is by virtue of an order of a competent court. All disputes shall be decided within sixty (60) days after the parties submit the same for decision or resolution. The Council shall have the power to issue writs of execution and enforce its decisions with the assistance of local or national police agencies. Art. 89. The decisions of the Council on water rights controversies may be appealed to the Court of First Instance of the province where the subject matter of the controversy is situated within fteen (15) days from the date the party appealing receives a copy of the decision, on any of the following grounds: (1) grave abuse of discretion; (2) question of law; (3) questions of fact and law. CHAPTER VIII PENAL PROVISIONS Art. 90. The following acts shall be penalized by suspension or revocation of the violators water permit or other right to the use of water and/or a ne of not exceeding One thousand Pesos (P1,000.00), in the discretion of the Council: a. Appropriation of subterranean or ground water for domestic use by an overlying landowner without registration required by the Council. b. Non-observance of any standard of benecial use of water. c. Failure of the appropriator to keep a record of water withdrawal when required. d. Failure to comply with any of the terms or conditions in a water permit or a water rights grant. e. Unauthorized use of water for a purpose other than that for which a right or permit was granted. f. Construction or repair of any hydraulic work or structure without duly approved plans and specications, when required. g. Failure to install a regulating and measuring device for the control of the volume of water appropriated, when required. h. i. Unauthorized sale, lease, or transfer of water and/or water rights. Failure to provide adequate facilities to prevent or control diseases
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when required by the Council in the construction of any work for the storage, diversion, distribution and utilization of water. j. Drilling of a well without permission of the Council. k. Utilization of an existing well or ponding or spreading of water for recharging subterranean or ground water supplies without permission of the Council. l. Violation of or non-compliance with any order, rules and regulation of the Council. m. reservoir. Illegal taking or diversion of water in an open canal, aqueduct or
n. Malicious destruction of hydraulic works or structures valued at not exceeding P5,000.00. Art. 91. A. A ne of not exceeding Three Thousand Pesos (P3,000.00) or imprisonment for not more that three (3) years, or both such ne and imprisonment, in the discretion of the Court, shall be imposed upon any person who commits any of the following acts: 1. Appropriation of water without a water permit, unless such person is expressly exempted from securing a permit by the provisions of this code; 2. 3. mission. Unauthorized obstruction of an irrigation canal. Cultivation of river bed, sand bar or tidal at without per-
4. Malicious destruction of hydraulic works or structure valued at not exceeding Twenty-Five Thousand Pesos (P25,000.00). B. A ne exceeding Three Thousand Pesos (P3,000.00) but not more than Six Thousand Pesos (P6,000.00) or imprisonment exceeding three (3) years but not more than six (6) years or both such ne and imprisonment in the discretion of the Court, shall be imposed on any person who commits any of the following acts: 1. Distribution for public consumption of water which adversely affects the health and safety of the public. 2. Excavation or enlargement of the opening of a hot spring without permission. 3. Unauthorized obstruction of a river or waterway, or occupancy of a river bank or seashore without permission.
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4. Establishment of a cemetery or a waste disposal area near a source of water supply or reservoir for domestic or municipal use without permission. 5. Constructing, without prior permission of the government agency concerned, works that produce dangerous or noxious substances, or performing acts that result in the introduction of sewage, industrial waste, or any substance that pollutes a source of water supply. 6. Dumping mine tailings and sediments into rivers or waterways without permission. 7. Malicious destruction of hydraulic works or structure valued more than Twenty-ve Thousand (P25,000.00) but not exceeding One Hundred Thousand Pesos (P100,000.00). C. A ne exceeding Six Thousand Pesos (P6,000.00) but not more than ten Thousand Pesos (P10,000.00) or imprisonment exceeding six (6) years but not more than twelve (12) years, or both such ne and imprisonment, in the discretion of the Court, shall be imposed upon any person who commits any of the following acts: 1. permit. Misrepresentation of citizenship in order to qualify for water
2. Malicious destruction of a hydraulic works or structure, valued at more than One Hundred Thousand Pesos (P100,000.00). Art. 92. If the offense is committed by a corporation, trust, rm, partnership, association or any other juridical person, the penalty shall be imposed upon the President, General Manager, and other guilty ofcer or ofcers of such corporation, trust, rm, partnership, association or entity, without prejudice to the ling of a civil action against said juridical person. If the offender is an alien, he shall be deported after serving his sentence, without further proceedings. After nal judgment of conviction, the Court upon petition of the prosecution attorney in the same proceedings, and after due hearing, may when the public interest so requires, order the suspension of or dissolution of such corporation, trust, rm, partnership association or juridical person. Art. 93. All actions for offenses punishable under Article 91 of this code shall be brought before the proper court. Art. 94. Actions for offenses punishable under this Code by a ne of not more than Three Thousand pesos (P3,000.00) or by an imprisonment of not more than three (3) years, or both such ne and imprisonment, shall prescribed in ve (5) years; those punishable by a ne exceeding Three Thousand Pesos
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(P3,000.00) but not more than six thousand Pesos (P6,000.00) or imprisonment exceeding three (3) years but not more than six years (6) years or both such ne and imprisonment, shall prescribe in seven (7) years; and those punishable by a ne exceeding Six Thousand Pesos (P6,000.00) but not more than Ten Thousand Pesos (P10,000.00) or an imprisonment exceeding six (6) years but not more than Twelve (12) years, or both such ne and imprisonment, shall prescribe in ten (10) years. CHAPTER IX TRANSITORY AND FINAL PROVISIONS Art. 95. Within two (2) years from the promulgation of this code, all claims for a right to use water existing on or before December 31, 1974 shall be registered with the Council which shall conrm said rights in accordance with the provisions of this Code, and shall set their respective priorities. When priority in time of appropriation from a certain source of supply cannot be determined, the order of preference in the use of the waters shall be as follows: a. b. c. d. e. f. g. Domestic and municipal use; Irrigation; Power generation; Fisheries; Livestock raising; Industrial use; and Other uses.
Any claim not registered within said period shall be considered waived and the use of the water deemed abandoned, and the water shall thereupon be available for disposition as unappropriated waters in accordance with the provisions of this code. Art. 96. No vested or acquired right to the use of water can arise from acts or omissions which are against the law or which infringe upon the rights of others. Art. 97. Acts and contracts under the regime of old laws, if they are valid in accordance therewith, shall be respected, subject to the limitations established in this Code. Any modication or extension of these acts and contracts after the promulgation of this code, shall be subject to the provisions hereof.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION SOME SPECIAL PROPERTIES Minerals
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Art. 98. Interim rules and regulations promulgated by the Council shall continue to have binding force and effect, when not in conict with the provisions of this Code. Art. 99. If any provision or part of this Code, or the application thereof to any person or circumstance, is declared unconstitutional or invalid for any reason, the other provisions of parts therein shall not be affected. Art. 100. The following laws, parts and/or provisions of laws are hereby repealed: a. The provisions of the Spanish Law of Waters of August 3, 1866, the Civil Code of Spain of 1889 and the Civil Code of the Philippines (R.A. No. 386) on ownership of waters, easement relating to waters, use of public waters which are inconsistent with the provision of the Code; b. The provisions of R.A. No. 6395, otherwise known as the Revised Charter of the National Power Corporation, particularly section 3, paragraph (f), and section 12, so far as they relate to the appropriation of waters and the grant thereof; c. The provisions of Act. No. 2152 as amended, otherwise know as the Irrigation Act, section 3, paragraphs (k) and (m) of P.D. No. 813, R.A. No. 2056; Section 90, C.A. No. 137; and d. All Decrees, Laws, Acts, parts of Acts, Rules of Court, executive orders, and administrative regulations which are contrary to or inconsistent with the provisions of this Code. Art. 101. This Code shall take effect upon its promulgation. Done in the City of Manila, this 31st day of December, Nineteen Hundred and Seventy-Six.
Chapter 2 MINERALS
Art. 519. Mining claims and rights and other matters concerning minerals and mineral lands are governed by special laws. (427a)
78. Governing Laws Republic Act No. 7942 or the Philippine Mining Act of 1995 is the governing law that regulates mineral resources development in the country. Section 2 of the said Act provides that all mineral resources
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in public and private lands within the territory and exclusive economic zone of the Republic of the Philippines are owned by the State. Small-scale mining activities, however, are governed by Republic Act No. 7076, otherwise known as the Peoples Small-Scale Mining Act of 1991. Chapter 3 TRADEMARKS AND TRADE NAMES
Art. 520. A trademark or trade name duly registered in the proper government bureau or ofce is owned by and pertains to the person, corporation, or rm registering the same, subject to the provisions of special laws. (n) Art. 521. The goodwill of a business is property, and may be transferred together with the right to use the name under which the business is conducted. (n) Art. 522. Trademarks and trade names are governed by special laws. (n)
79. Governing Laws The law on trademarks, service marks and trade names are governed by Sections 121 up to 170 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines, which took effect on January 1, 1998. oOo
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Title V. POSSESSION
Chapter 1 POSSESSION AND THE KINDS THEREOF
Art. 523. Possession is the holding of a thing or the enjoyment of a right. (430a)
80. Concept of Possession

[80.1] Denition
Etymologically, the word possession is derived from the Latin terms pos and sedere which mean to settle or to be settled.1 In the grammatical sense, to possess means to have, to actually and physically occupy a thing, with or without right.2 In our Civil Code, however, possession is dened as the holding of a thing or the enjoyment of a right.3 From this denition, it is clear that the concept of possession extends to both corporeal and incorporeal things the former being represented by the term thing and the latter by the term right in Article 523 of the New Civil Code. This is further conrmed by Article 530 of the New Civil Code which includes as object of possession not only things but also rights which are susceptible of appropriation. But note that in Articles 523 and 530, the term thing is used in its restrictive sense referring only to corporeal or material objects but not to rights. Pursuant to Article 523, therefore, possession is dened as the holding of a thing in relation to corporeal objects. With respect to rights, however, possession refers to its enjoyment or exercise since the idea of occupation or detention does not apply with respect to rights. The term holding in Article 523, however, must be viewed in relation
1 2
2 Castan, 9th ed., 401. Yu v. Pacleb, G.R. No. 130316, Jan. 24, 2007, citing II Tolentino, Civil Code, 1992 ed., Art. 523, NCC. 377
238.
3
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to Article 531, such that the concept does not refer only to material occupation but likewise to the fact that the thing is subjected to the action of our will. Such being the case, it is apparent that the concept of possession implies a relation of power or control over the object of possession and its possessor, whether said object be things or rights. Hence, according to Castan,4 the concept of possession connotes the following: (1) it implies a relation between a person and things; (2) such relation is one of power or control; and (3) such control is one of fact which is effective but without resolving whether it carries with it or not a title of ownership.
[80.2] Elements of Possession
In order that there be possession two things are paramount: (1) there must be occupancy, apprehension or taking; and (2) there must be intent to possess (animus possidendi).5 Animus possidendi, it has been held, is a state of mind, the presence and determination of which is largely dependent on the circumstances obtaining in each case.6 What the courts must take into consideration are the prior and coetaneous acts of the alleged possessor.7 Its existence may and usually must be inferred from the attendant events in each particular case.8 According to Manresa,9 this intention to possess is usually inferred from the fact that the thing in question is under the apparent control and power of the possessor. Such being the case, the animus possidendi may be contradicted and rebutted by evidence which tends to prove that the person under whose power or control the thing in question appears to be, does not in fact exercise the power or control and does not intend to do so.10 In the crime of possession of regulated drugs, for example, the essential elements are the following: (a) the accused is found in possession of a regulated drug; (b) the person is not authorized by law or by duly constituted authorities; and, (c) the accused has knowledge
2 Castan, 9th ed., 401-402. Yu v. Pacleb, supra, citing II Tolentino, Civil Code, 1992 ed., 239. 6 People v. Lian, G.R. No. 115988, March 29, 1996. 7 Id. 8 People v. Burton, G.R. No. 114396, February 19, 1997. 9 4 Manresa, 5th ed., 64. 10 US v. Tan Tayco, 12 Phil. 739; see also Footnote 17 in Yu v. Pacleb, supra, citing II Tolentino, Civil Code, 1992 ed., 239.
4 5
PROPERTY, OWNERSHIP, AND ITS MODIFICATION POSSESSION Possession and the Kinds Thereof
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that the said drug is a regulated drug.11 This crime is mala prohibita, and, as such, criminal intent is not an essential element. However, the prosecution must prove that the accused had the intent to possess (animus possidendi) the drugs.12 Possession, under the law, includes not only actual possession, but also constructive possession. Actual possession exists when the drug is in the immediate physical possession or control of the accused.13 On the other hand, constructive possession exists when the drug is under the dominion and control of the accused or when he has the right to exercise dominion and control over the place where it is found.14 Hence, the prosecution must prove that the accused had knowledge of the existence and presence of the drug in the place under his control and dominion and the character of the drug.15 Since knowledge by the accused of the existence and character of the drugs in the place where he exercises dominion and control is an internal act, the same may be presumed from the fact that the dangerous drug is in the house or place over which the accused has control or dominion, or within such premises in the absence of any satisfactory explanation.16 The burden of evidence is then shifted to the accused to explain the absence of knowledge or animus possidendi.17 In the case of People v. Tira,18 the conviction of the appellant Connie Tira for the crime of possession of regulated drugs was sustained by the Supreme Court because the appellant failed to prove the absence of animus possidendi. The Court, in the said case, explained In this case, the prohibited and regulated drugs were found under the bed in the inner room of the house of the appellants where they also resided. The appellants had actual and exclusive possession and control and dominion over the house, including the room where the drugs were found by the policemen. The appellant Connie Tira cannot escape criminal liability for the crime charged simply and merely on
People v. Tira, 430 SCRA 134 (2004). Id. 13 Id. 14 Id. 15 Id. 16 Id. 17 People of the Phil. v. Jinsir Jhur, CA-GR. No. 22842, Nov. 23, 2005, citing People v. Tira, 430 SCRA 134. 18 Supra.
11 12
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her barefaced testimony that she was a plain housewife, had no involvement in the criminal actuations of her husband, and had no knowledge of the existence of the drugs in the inner room of the house. She had full access to the room, including the space under the bed. She failed to adduce any credible evidence that she was prohibited by her husband, the appellant Amadeo Tira, from entering the room, cleaning it, or even sleeping on the bed. x x x In the case of US v. Tan Tayco,19 however, the defendants were able to prove the absence of animus possidendi with respect to various utensils used for smoking opium which were found in their store. They claimed that said utensils were the property of one of the co-proprietors of the store. Said co-proprietor admitted that he was the real owner of the utensils and said that the defendants had no interest whatever in the ownership or control of the smoking utensils.
[80.3] Possession as Fact and Right
The subject of possession has become more difcult owing to the various senses in which the term has been interpreted. Thus, it has been said to be either a right or a fact conferring a right, or both together. The latter is the view of Freidrich Carl Von Savigny,20 the leading authority upon the subject. According to Savigny, in its inception, possession is considered as a fact which gives rise to certain juridical consequences attached to it by law, that confers upon it the character of a right.21 And inasmuch as possession implies an immediate and direct relation between the person and the thing, it is considered as a real right but of a particular nature since the law renders its protection temporarily only as long as the true owner does not appear.22 As discussed in supra 34.1, possession is either a mere incident of ownership (a right included therein), to which commentators referred to as the right to possession or jus possidendi, or a right independent and apart from ownership, referred to as the right of possession or
12 Phil. 739. See Von Savignys Treatise on Possession; or the Jus Possessionis of the Civil Law, Sixth Edition. Translated from the German by Sir Erskine Perry. 21 See also II Reyes and Puno, Outline of Phil. Civil Law, 90-91. 22 II Caguioa, Civil Code, 1966 ed., 163-164.
19 20
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jus possessionis. Since the possession discussed in Title V of Book II is independent from ownership and not necessarily based therefrom, this part of the Civil Code is dealing with jus possessionis. It is this kind of possession which is to be considered as a real right by itself and independent from ownership.
[80.4] Degrees of Possession
According to Sanchez Roman, the degrees of possession may be classied as follows: (1) (2) (3) Possession without any title or right whatsoever, as that of a thief; Possession with a juridical title or right but not in the concept of owner, as that of a lessee or depositary; Possession with a just title, or a title sufcient to transfer ownership, but not from the true owner, as that of a buyer in good faith; and Possession derived from the right of ownership or possession with a just title from the true owner. This is the possession that springs from ownership.23
(4)
[80.5] Classication of Possession under the Civil Code
The Civil Code classies possession, as follows: (1) (2) (3) Possession in ones own name and possession in the name of another;24 Possession in the concept of an owner and possession in the concept of a holder;25 and Possession in good faith and possession in bad faith.26
Art. 524. Possession may be exercised in ones own name or in that of another. (413a)
3 Sanchez Roman, 405-406. Art. 524, NCC. 25 Art. 525, NCC. 26 Art. 526, NCC.
23 24
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81. Possession in Ones Own Name or In the Name of Another The extent and meaning of the phrase possession in ones own name depend largely upon the meaning of the phrase possession in the name of another for there is variance of views with respect to the extent and meaning of the latter. There are commentators27 who are of the view that the possession in anothers name referred to in this article contemplates of a situation where the possessor is bound by some obligation or legal tie to another, such as an agent, an administrator, a lessee or a borrower in commodatum.28 Under this view, the article is not limited to cases which are strictly of direct representation, or in which the representative does not have a possession in his own right but merely that of the person represented.29 Following this view, the concept of possession in anothers name will embrace both of these two situations: (1) possession strictly as an agent of the one entitled to the possession there being no right whatsoever in the one exercising it, he being merely the instrument for the exercise of the possession; and (2) possession with a right belonging to the person exercising the possession in the name of another of which right that person is in possession thereby implying a juridical relation between them, e.g., possession by a lessee or a mere usufructuary. Our Supreme Court, in the case of Reyes v. Court of Appeals,30 appears to have adopted the foregoing view.
Reyes v. Court of Appeals G.R. No. 127608, September 30, 1999 In this case, the petitioner (Guadalupe Reyes) was the owner of a parcel of land located in Project 4, Quezon City. In 1967, petitioner executed a deed of sale over one-half of the parcel land in favor of the respondent (Juanita Raymundo). Consequently, a new title was issued in the names of both the petitioner and the respondent as co-owners. Thereafter respondent was granted a P17,000.00 loan by the GSIS, where she was employed, with her one-half (1/2) share of the property as collateral. In 1969, petitioner executed another deed of sale in favor of the respondent over her remaining interest
Valverde and De Diego, for example. II Tolentino, Civil Code, 1992 ed., 244. 29 Id. 30 Reyes v. Court of Appeals, G.R. No. 127608, Sept. 30, 1999.
27 28
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in the property, for which reason, a new title was issued in the name of the respondent for the entire property. It turned out that petitioner was prevailed upon by the respondent to transfer the title to the whole property in favor of the latter in order to obtain a loan from the GSIS pursuant to an agreement with respondent that they would construct an apartment on the property through the proceeds of an additional loan that respondent would secure from the GSIS with the entire 300-square meter property as collateral, which additional loan, however, did not materialize. In the meantime, the house situated on the lot subject matter of the second sale was being leased out by the petitioner to the Spouses Palacios since 1967. In 1984, petitioner allegedly refused to receive the rentals thus prompting the Palacios spouses to le in 1985 a petition for consignation, which resulted in a compromise agreement between the parties within two months after its ling. It appears however that the Palacios spouses were subsequently ejected from the premises but managed somehow to return. When a contempt case was led by petitioner against her lessees, respondent intervened and claimed ownership of the property. Respondent likewise claimed of the existence of a lease contract between her and the Palacios spouses supposedly dated 17 March 1987 but retroactive to 1 January 1987. In 1987, the trial court dismissed the case and from then on, the Palacioses paid rentals to respondent, prompting the petitioner to le in 1987 a case against the respondent for the cancellation of the latters title to the property on the ground that the deed of sale between them were merely simulated. The trial court ruled in favor of the petitioner on the ground that the deeds of sale between the parties were merely simulated, hence, void. On appeal, the Court of Appeals reversed the decision and ruled in favor of the respondent based on the grounds, among others, that: (1) petitioners cause of action had prescribed since the complaint should have been led either within ten (10) years from 1969 as an action to recover title to real property, or within ten (10) years from 1970 as an action based on a written contract; and (2) petitioners cause of action was barred by laches having allowed respondent to stay in possession of the lot in question for eighteen (18) years after the execution of the second deed of sale. Petitioner elevated the case to the Supreme Court, which ruled in her favor, thus Petitioner posits that it was only in 1987 when respondent intervened in the contempt case alleging to be the owner and lessor did her cause of action accrue; hence, her complaint led on 23 August 1987 has not yet prescribed. Petitioner asserts that the 10 January 1970 agreement is more credible and probable than the second deed of sale because such document contains their real intention. In Heirs of Jose Olviga v. Court of Appeals, we restated the rule that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten (10) years, the point
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of reference being the date of registration of the deed or the date of the issuance of the certicate of title over the property. However, we emphasized that this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property since if a person claiming to be the owner thereof is in actual possession of the property the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason is that the one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. His undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. Actual possession of land consists in the manifestation of acts of dominion over it of such a nature as those a party would naturally exercise over his own property. It is not necessary that the owner of a parcel of land should himself occupy the property as someone in his name may perform the act. In other words, the owner of real estate has possession, either when he himself is physically in occupation of the property, or when another person who recognizes his rights as owner is in such occupancy. This declaration is conformably with Art. 524 of the Civil Code providing that possession may be exercised in ones own name or in the name of another. An example of actual possession of real property by an owner through another is a lease agreement whereby the lessor transfers merely the temporary use and enjoyment of the thing leased. The Palacios spouses have been the lessees of petitioner since 1967 occupying the house erected on the property subject of the second sale. Petitioner was in actual possession of the property through the Palacioses and remained so even after the execution of the second deed of sale. It was only in 1987 when respondent asserted ownership over the property and showed a lease contract between her and the Palacioses dated 17 March 1987 but effective 1 January 1987 that petitioners possession was disturbed. Consequently, the action for reconveyance led on 23 August 1987 based on circumstances obtaining herein and contrary to the nding of respondent court has not prescribed. To be accurate, the action does not prescribe. Under Art. 1144, par. (1), of the Civil Code, an action upon a written contract must be brought within ten (10) years from the time the right of action accrues. And so respondent
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court also relied on this provision in ruling that petitioners cause of action had prescribed. This is error. What is applicable is Art. 1410 of the same Code which explicitly states that the action or defense for the declaration of the inexistence of a contract, such as the second deed of sale, does not prescribe. Respondent court declared petitioner guilty of laches anchored on the nding that for eighteen (18) years after the execution of the contract, respondent was in possession of the lot in question. But this nding is utterly unsupported by the evidence. On the contrary, the Palacioses alleged in their petition for consignation led 13 March 1985 that they were renting the apartment of the respondent (petitioner herein) located at No. 4-F Calderon Street, Project 4, Quezon City, since 1967 up to the present. Even respondent herself admitted in her lease contract of 17 March 1987 with the Palacios spouses that the LESSEES have been staying in the premises since 1967 under a previous lease contract with Guadalupe S. Reyes which, however, already expired. Having thus corrected the nding of respondent court, our concern now is to determine whether laches should be appreciated against petitioner. The essence of laches is the failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier; it is the negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.
Note, however, that it in the above case it is no longer necessary for the Court to dwell on the provisions of Article 524 of the New Civil Code in order to resolve the question of prescription of the action led by the petitioner. The Courts ruling that such action was imprescriptible pursuant to Article 1410 of the New Civil Code would have been sufcient since there was a nding that the deeds of sale executed by the petitioner in favor of the respondent were merely simulated. Since there was a nding that the sale of the entire property in favor of the respondent was a nullity, the action led by the petitioner may only be defeated if the latter was guilty of laches. But as the Court has shown, the petitioner was not guilty of laches because even the respondent herself admitted the existence of the contract of lease between the Palacio spouses and the petitioner from 1967 up to 1987. It was only in 1987 that the petitioner was apprised of the fact that respondent was asserting an interest adverse to the petitioner. All told, this case could
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be resolved without need of relying on the provisions of Article 524 of the New Civil Code and the case of Heirs of Jose Olviga v. Court of Appeals.31 If the concept of possession in anothers name is to be understood in the light of the foregoing view, then the possession in ones own name being referred to in Article 524 shall now be limited only to the kind of possession being exercised by the owner himself personally. If such will be the case, then there will no difference at all between possession in the concept of owner under Article 525 and possession in ones own name in the present article. Hence, in order to avoid duplication it is more logical to view possession in anothers name in Article 524 as referring only to the possession by a person without any right of his own and one which is strictly of an agent or merely an instrument in the exercise of such possession, e.g., possession by a caretaker. On the other hand, possession in ones own name embraces all kinds of possession anchored on a juridical title or right, e.g., possession by the owner himself, possession by a lessee or a mere usufructuary. If both the fact of possession and the right to such possession are found in the same person, such possession is said to be exercised in ones own name. If, on the other hand, the right to the possession is in one person while the fact of possession is in another person and the latter merely acts in representation of the former, the latters possession is said to be exercised in anothers name. In this case, the actual possessor (the agent) is not considered in law as legal possessor because the possession is not by virtue of his own right. As it is, possession may be exercised in ones own name or in that of another. It is not necessary that the owner or holder of the thing exercise personally the rights of possession. Rights of possession may be exercised through agents.32
Santos v. Manalili 475 SCRA 679 (2005) The subject matter of this case is a parcel of land which originally formed part of the Furukawa Plantation owned by a Japanese national and situated in the District of Toril, Davao City. After the war, the land was turned over to the
31 32
227 SCRA 330. Santos v. Manalili, 475 SCRA 679 (2005).
387
Philippine government and administered by the National Abaca and Other Fibers Corporation, and thereafter by the respondent Board of Liquidators (BOL). In 1970, Reynaldo Manalili, predecessor-in-interest of respondent Ronald C. Manalili, led with the BOL an application to purchase the subject property, attaching therewith his Occupants Afdavit. The application was favorably acted upon and in 1972 Manalili paid the down payment. Thereafter, Manalili declared the land for taxation purposes. The Manalilis administered the land before they left for Manila in 1972. After they moved to Manila, they appointed an administrator to oversee the land and the improvements and crops they have planted thereon, such as bananas and coconut trees. 1981, after the lapse of nine (9) years and even as the BOL had already issued a Certication of Full Payment endorsing the approval of the sale of the land in question to applicant Reynaldo Manalili, petitioner Rodolfo Santos led a protest before the BOL and requested for an investigation. He claimed to be the actual occupant of the property and that he introduced considerable improvements thereon, as against respondent Manalili who was never in possession, occupation and cultivation of the same. In ruling for the respondent Manalili, the Court explained The two (2) courts below, in unanimously upholding the validity of the sale of the land in question to the Manalilis, likewise afrmed the BOLs nding that the Manalilis had a better right of possession thereto. Preponderant evidence of respondent have sufciently established that as early as 1970, Reynaldo Manalili, respondents predecessor-in-interest, had already led an Afdavit of Occupancy with the BOL, the government agency tasked to administer it; that the Manalilis administered the land before they left for Manila in 1972; that after they moved to Manila they appointed an administrator to oversee the land and the improvements and crops they have planted thereon, such as bananas and coconut trees; and that the Manalilis have been paying the real estate taxes for the subject land even before the sale thereof to them. The circumstance that after the sale, the Manalilis resided in Manila and Pangasinan is of no moment. As it is, possession may be exercised in ones own name or in that of another. It is not necessary that the owner or holder of the thing exercise personally the rights of possession. Rights of possession may be exercised through agents. In contrast, petitioners claim of having bought the land from a certain Ernesto Abalahin who, in turn, bought it from one Col. Agsalud, allegedly a guerrilla veteran who occupied the lot from 1956 to 1959, is without basis. For one, no proof has been presented by petitioner as to the alleged title of Col. Agsalud or the transfer
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of any rights from the latter to Ernesto Abalahin, petitioners alleged immediate transferor. For another, the supposed Deed of Absolute Sale between petitioner and Ernesto Abalahin does not even sufciently identify the lot which was the subject of the sale. Worse, that same deed is not notarized and is unregistered. A sale of a piece of land appearing in a private deed cannot be considered binding on third persons if it is not embodied in a public instrument and recorded in the Registry of Deeds. Verily, it was only in 1981 that Abalahin entered the subject land without permission, and that in 1982, petitioner, together with Abalahin and one Lumaad, illegally cut trees on the land, thereby prompting the Manalilis to report their unlawful entry to the local barrio captain.
Art. 525. The possession of things or rights may be had in one of two concepts: either in the concept of owner, or in that of the holder of the thing or right to keep or enjoy it, the ownership pertaining to another person. (432)
82. Possession in the Concept of Owner or Holder Possession may be had in one of two ways: possession in the concept of an owner and possession of a holder.33 A possessor in the concept of an owner may be the owner himself or one who claims to be so.34 On the other hand, one who possesses as a mere holder acknowledges in another a superior right which he believes to be ownership, whether his belief be right or wrong.35 Note, however, that possession in the concept of owner does not refer to the belief of the possessor or his intention but such a concept is independent of the belief or intention of the possessor.36 Concept is opinion not of the possessor but that of others. The concept of owner, therefore, refers to the opinion or belief of the neighbors and the rest of the world and not that of the possessor.37 Consequently, even if the possessor is aware that that there is a aw in his title resulting in its invalidation (in which case he becomes a
Art. 525, NCC. Carlos v. Republic of the Phil., 468 SCRA 709 (2005). 35 Id. 36 II Caguioa, Civil Code, 1966 ed., 167. 37 4 Manresa, 5th ed., 82-83, cited in II Caguioa, Civil Code, 1966 ed., 169.
33 34
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possessor in bad faith), so long as he claims ownership of the property and does not acknowledge in another a superior right, he is nonetheless considered a possessor in the concept of owner. Indeed, possession in the concept of owner is distinguished from possession in good faith. Under the law on acquisitive prescription, for example, which requires as an essential element possession in the concept of owner,38 even a possessor in bad faith is entitled to acquire ownership of a property by virtue of extraordinary prescription.39 In the case of possessors in the concept of holder who are as such by virtue of a juridical title or right, e.g., lessee, usufructuary, etc., they are considered as possessors in the concept of holder with respect to the thing itself, but considered as possessors in the concept of owner with respect to their right.
Bukidnon Doctors Hospital, Inc. v. MBTC G.R. No. 161882, July 8, 2005 In this case, petitioner (Bukidnon Doctors Hospital, Inc.) was a mortgagor of respondent (MBTC). Upon petitioners failure to pay the mortgage obligation, respondent foreclosed the mortgage and acquired the property during the public auction. Petitioner likewise failed to redeem the foreclosed property from the respondent within the redemption period. Subsequently, however, the parties entered into a lease agreement to enable the petitioner to continue its operation. After almost two years after said agreement, respondent demanded that the petitioner vacate the leased premises. When the petitioner refused, respondent initiated an ex parte proceeding for the issuance of a writ of possession. The issue in this case is the propriety of the issuance of a writ of possession for the purpose of evicting a mortgagor who became a lessee of the mortgaged properties after the mortgagee acquired ownership thereof. The Court held The law and jurisprudence are clear that in extrajudicial foreclosure proceedings, an order for a writ of possession issues as a matter of course, upon proper motion, after the expiration of the redemption period without the mortgagor exercising the right of redemption, or even during the redemption period provided a bond is posted to indemnify the debtor in case the foreclosure sale is shown to have been conducted without complying with
38 39
See Arts. 540 and 1118, NCC. See Arts. 1132, 2nd par. and 1137, NCC.
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the requirements of the law or without the debtor violating the mortgage contract. The rationale for the ministerial issuance of a writ of possession is to put the foreclosure buyer in possession of the property sold without delay, since the right to possession is founded on ownership of the property. However, in the instant case, a writ of possession was not the correct remedy for the purpose of ousting the petitioner from the subject premises. It must be noted that possession is the holding of a thing or the enjoyment of a right. It is acquired by the material occupation of a thing or the exercise of a right, or by the fact that a thing or right is subject to the action of ones will, or by the proper acts and legal formalities established for acquiring such right. By material occupation of a thing, it is not necessary that the person in possession should be the occupant of the property; the occupancy can be held by another in his name. Thus Articles 524 and 525 of the Civil Code provide: Art. 524. Possession may be exercised in ones own name or in that of another. Art. 525. The possession of things or rights may be had in one of two concepts: either in the concept of owner, or in that of the holder of the thing or right to keep or enjoy it, the ownership pertaining to another person. In other words, an owner of a real estate has possession, either when he himself is physically occupying the property, or when another person who recognizes his rights as owner is occupying it. In the case at bar, it is not disputed that after the foreclosure of the property in question and the issuance of new certicates of title in favor of the respondent, the petitioner and the respondent entered into a contract of lease of the subject properties. This new contractual relation presupposed that the petitioner recognized that possession of the properties had been legally placed in the hands of the respondent, and that the latter had taken such possession but delivered it to the former as lessee of the property. By paying the monthly rentals, the petitioner also recognized the superior right of the respondent to the possession of the property as owner thereof. And by accepting the monthly rentals, the respondent enjoyed the fruits of its possession over the subject property. Clearly, the respondent is in material possession of the subject premises. Thus, the trial courts issuance of a writ of possession is not only superuous, but improper under the law. Moreover, as a lessee,
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the petitioner was a legitimate possessor of the subject properties under Article 525 of the Civil Code. Thus, it could not be deprived of its lawful possession by a mere ex parte motion for a writ of possession. xxx In a nutshell, where a lease agreement, whether express or implied, is subsequently entered into by the mortgagor and the mortgagee after the expiration of the redemption period and the consolidation of title in the name of the latter, a case for ejectment or unlawful detainer, not a motion for a writ of possession, is the proper remedy in order to evict from the questioned premises a mortgagor-turned-lessee. The rationale for this rule is that a new relationship between the parties has been created. What applies is no longer the law on extrajudicial foreclosure, but the law on lease. And when an issue arises, as in the case at bar, regarding the right of the lessee to continue occupying the leased premises, the rights of the parties must be heard and resolved in a case for ejectment or unlawful detainer under Rule 70 of the Rules of Court. Carlos v. Republic of the Philippines 468 SCRA 709 (2005) In this case, petitioner (Maria Carlos) led an application for registration and conrmation of title over a parcel of land with an area of 3,975 square meters located at Pusawan, Ususan, Taguig, Metro Manila. She claimed that she is the owner of said parcel of land which she openly, exclusively and notoriously possessed and occupied since July 12, 1945 or earlier under a bona de claim of ownership and that by tacking her possession with that of her predecessors-in-interest, she has been in possession of the land for more than 50 years. The trial court granted her application. On appeal by the Republic of the Philippines to the Court of Appeals, the appellate court reversed the decision on the ground that the applicant at the time she led her application for registration of title was no longer in possession and occupation of the land in question, the same already being sold by the applicants mother to Ususan Development Corporation. Hence, the Court of Appeals concluded that the requirements for conrmation of imperfect title, one of which is that the applicant must be in possession in the concept of owner, have not been complied with. In sustaining the decision of the Court of Appeals, the Supreme Court held Nonetheless, even if it were true that it was petitioner who had actual possession of the land at that time, such possession was no longer in the concept of an owner. Possession may be had in one
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of two ways: possession in the concept of an owner and possession of a holder. A possessor in the concept of an owner may be the owner himself or one who claims to be so. On the other hand, one who possesses as a mere holder acknowledges in another a superior right which he believes to be ownership, whether his belief be right or wrong. Petitioner herein acknowledges the sale of the property to Ususan Development Corporation in 1996 and in fact promised to deliver the certicate of title to the corporation upon its obtention. Hence, it cannot be said that her possession since 1996 was under a bona de claim of ownership. Under the law, only he who possesses the property under a bona de claim of ownership is entitled to conrmation of title.
Art. 526. He is deemed a possessor in good faith who is not aware that there exists in his title or mode of acquisition any aw which invalidates it. He is deemed a possessor in bad faith who possesses in any case contrary to the foregoing. Mistake upon a doubtful or difcult question of law may be the basis of good faith. (433a) Art. 527. Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. (434) Art. 528. Possession acquired in good faith does not lose this character except in the case and from the moment facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongfully. (435a) Art. 529. It is presumed that possession continues to be enjoyed in the same character in which it was acquired, until the contrary is proved. (436)
83. Possession in Good Faith or in Bad Faith

[83.1] Concept of Possessor In Good Faith; In Bad Faith
Note that the discussions in supra 47.1 in relation to the concept of builder in good faith likewise apply to the concept of possessor in good faith because the former is simply a possessor in good faith who made plantings, constructions or works on the property of another. Good faith, here understood, is an intangible and abstract quality with no technical meaning or statutory denition, and it encompasses, among other things, an honest belief, the absence of malice and the
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absence of design to defraud or to seek an unconscionable advantage. An individuals personal good faith is a concept of his own mind and, therefore, may not conclusively be determined by his protestations alone. It implies honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry. The essence of good faith lies in an honest belief in the validity of ones right, ignorance of a superior claim, and absence of intention to overreach another. Applied to possession, one is considered in good faith if he is not aware that there exists in his title or mode of acquisition any aw which invalidates it.40 Under Article 526 of the New Civil Code, the following are the requisites for possession in good faith: (1) the possessor has a title or mode of acquisition; (2) there is a aw or defect in said title or mode which invalidates it; and (3) the possessor is unaware of the aw or defect, or believes that the thing belongs to him.
[83.1.1] He Must Have a Title or Mode of Acquisition
The belief of the possessor that he is the legal owner of the thing must be based upon some title or mode of acquisition, such as a sale, donation, inheritance, or other means of transmitting ownership; for without this, there can be no real well-grounded belief of ones ownership.41 Hence, a person who has no title or mode of acquisition but whose occupation of the land of another is by reason of the latters tolerance or permission cannot be considered a possessor or builder in good faith.42 At the same time, the good faith of the possessor must rest on a colorable right and must be beyond a mere stubborn belief in ones title despite judicial adjudication.43 In relation to builder in good faith, good faith is ordinarily identied by the belief that the land is owned; or that by some title one has the right to build, plant, or sow thereon.44 As discussed, however, in supra 47.1.4, there were some special cases where the Supreme
40 PNB v. De Jesus, G.R. No. 149295, September 23, 2003; see also Cabal v. Cabal, G.R. No. 153625, July 31, 2006; Ochoa v. Apeta, G.R. No. 146259, Sept. 13, 2007. 41 II Tolentino, Civil Code, 1992 ed., 248-249. 42 Resuena v. CA, 454 SCRA 42, 53 (2005); Pada-Kilario v. CA, 322 SCRA 481 (2000); Refugia v. CA, 258 SCRA 347 (1996). 43 Baltazar v. Caridad, 17 SCRA 460. See this case in supra 46.1.1. 44 Macasaet v. Macasaet, 439 SCRA 625 (2004).
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Court recognized the good faith of the possessor or builder beyond this limited denition. Let us consider the cases of Macasaet v. Macasaet45 and Sarmiento v. Agana,46 for example. In Macasaet v. Macasaet, the spouses Ismael and Teresita Macasaet were invited by the parents of Ismael (spouses Vicente and Rosario Macasaet) to occupy the latters two lots, out of parental love and a desire to foster family solidarity. Pursuant to such invitation, Ismael and Teresita constructed their conjugal house on the said property. Unfortunately, an unresolved conict terminated this situation. Out of pique, the parents of Ismael asked them to vacate the premises, for which reason, the children lost their right to remain on the property. The children, however, claimed that they were builders in good faith and therefore entitled to exercise the rights granted under Article 448 of the New Civil Code. In resolving this question, the Supreme Court recognized that the children were bereft of any title or mode of acquisition upon which to base their claim of being possessor-builders in good faith, nevertheless, because of the uniqueness of the situation and since the parents fully consented to the improvements therein introduced, the Court considered them possessor-builders in good faith entitled to exercise the rights granted under Article 448 of the New Civil Code. The Court explained On the other hand, when a person builds in good faith on the land of another, the applicable provision is Article 448, which reads: xxx xxx This Court has ruled that this provision covers only cases in which the builders, sowers or planters believe themselves to be owners of the land or, at least, to have a claim of title thereto. It does not apply when the interest is merely that of a holder, such as a mere tenant, agent or usufructuary. From these pronouncements, good faith is identied by the belief that the land is owned; or that by some title one has the right to build, plant, or sow thereon.
45 46
Supra. 129 SCRA 122 (1984). See digest of this case in supra 46.3.2.
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However, in some special cases, this Court has used Article 448 by recognizing good faith beyond this limited denition. Thus, in Del Campo v. Abesia, this provision was applied to one whose house despite having been built at the time he was still co-owner overlapped with the land of another. This article was also applied to cases wherein a builder had constructed improvements with the consent of the owner. The Court ruled that the law deemed the builder to be in good faith. In Sarmiento v. Agana, the builders were found to be in good faith despite their reliance on the consent of another, whom they had mistakenly believed to be the owner of the land. Based on the aforecited special cases, Article 448 applies to the present factual milieu. The established facts of this case show that respondents fully consented to the improvements introduced by petitioners. In fact, because the children occupied the lots upon their invitation, the parents certainly knew and approved of the construction of the improvements introduced thereon. Thus, petitioners may be deemed to have been in good faith when they built the structures on those lots. The above case is factually similar to Javier v. Javier.47 In that case, the Court deemed the son to be in good faith for building the improvement (the house) with the knowledge and consent of his father, to whom belonged the land upon which it was built. In Sarmiento v. Agana,48 on the other hand, the respondent Ernesto Valentino was still courting his wife when the latters mother had told him that the couple could build a residential house on a land that was assumed to be owned by the said mother. It subsequently turned out that the land had been titled in the name of another person who subsequently sold the same to petitioner. After purchasing the land, the petitioner demanded that the spouses Valentino vacate the premises. On the question of whether the spouses Valentino were builders in good faith, the Court held
47 48
7 Phil. 261, 267, January 2, 1907. Supra.
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We agree that ERNESTO and wife were builders in good faith in view of the peculiar circumstances under which they had constructed the RESIDENTIAL HOUSE. As far as they knew, the LAND was owned by ERNESTOs mother-in-law who, having stated they could build on the property, could reasonably be expected to later on give them the LAND.
[i] Possessors in the Concept of Holder, Not Possessors in Good Faith
One whose interest is merely that of a holder, such as a mere tenant, agent or usufructuary, is not qualied to become a possessorbuilder in good faith.49 A lessee cannot be said to be a possessor-builder in good faith as he has no pretension to be owner.50 Being a mere lessee, he knows that his occupation of the premises will continue only for the life of the lease.51 Hence, he cannot claim that he is unaware of any aw in his title or that he is under the belief that he is the owner of the subject premises.52
[83.1.2] Existence of Flaw or Defect in the Title
For one to be considered a possessor in good faith, it is not sufcient that there be aw or defect in his title. In addition, it is essential that such aw or defect in the title must be such that it will have the effect of invalidating the title. If the aw or defect does not result in the invalidation of the title, he is not merely a possessor in good faith but the owner. Indeed, the phrase possessor in good faith presupposes ownership in another.53
[83.1.3] Ignorance of the Existence of Such Flaw or Defect
A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any aw which invalidates it.54 On
Parilla v. Pilar, G.R. No. 167680, Nov. 30, 2006; Macasaet v. Macasaet, supra; Id. 51 Geminiano v. CA, 259 SCRA 344 (1996). 52 Florentino v. CA, G.R. No. 172384, Sept. 12, 2007. 53 Pershing Tan Cueto v. CA, 148 SCRA 54 (1987). 54 Caram v. Laureta, 103 SCRA 7; Manotok Realty, Inc. v. CA, 134 SCRA 325; PNB v. De Jesus, G.R. No. 149295, Sept. 23, 2003; see also Cabal v. Cabal, G.R. No. 153625, July 31, 2006; Ochoa v. Apeta, G.R. No. 146259, Sept. 13, 2007.
49 50
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the other hand, a possessor in bad faith is one in possession of property knowing that his title thereto is defective.55 The difference, therefore, between a possessor in good faith and one in bad faith is that the former is NOT AWARE of the defect or aw in his title or mode of acquisition while the latter is AWARE of such defect or aw.56 But in either case there is a aw or defect.57 Hence, one who acquires real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or of an interest therein; and the same rule must be applied to one who has knowledge of facts which should put a reasonable man upon his guard, and then claims that he acted in good faith under the belief that there was no defect in the title of the vendor.58 In the following situations, the possessor is considered in bad faith: (1) Where the possessor of the land acquired the same from a person other than the registered owner because he was charged with notice of the existence of the owners certicate of title.59 (2) Where the possessor of the land knows that she has no title thereto, because she bought the house erected thereon from one whom she knew was merely a tenant on the land;60
[83.2] Mistake of Law
Ordinarily, it is only ignorance or mistake of fact which serves as basis of good faith but not mistake of law in view of the principle enshrined in Article 3 of the New Civil Code that ignorance of the law excuses no one from compliance therewith. However, the possessors mistake upon a doubtful or difcult question of law may serve as basis of his good faith,61 in which case such mistake will not render him a
Escritor, Jr. v. IAC, 155 SCRA 577. Pershing Tan Cueto v. CA, supra. 57 Id. 58 Manotok Realty, Inc. v. CA, 134 SCRA 325; see also Leung Yee v. FL Strong Machinery Co., 37 Phil. 644. 59 J.M. Tuason & Co. v. Lecardo, et al., CA-G.R. No. 25477-R, July 24, 1962; J.M. Tuason & Co., Inc. v. Manuel Abundo, CA-G.R. No. 29701-R, November 18, 1968; Leabres v. CA, 146 SCRA 158 (1986). 60 De Guzman v. Rivera, 4 Phil. 620. 61 Art. 526, 3rd par., NCC.
55 56
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possessor in bad faith. According to Manresa, gross and inexcusable ignorance of the law may not be the basis of good faith, but excusable error arising from complex legal principles and from the interpretation of conicting or doubtful doctrines may be such basis.62
Kasilag v. Roque 69 Phil. 217 In this case, Ambrosio mortgaged in favor of the petitioner the improvements she made on her land acquired by a homestead patent. When Ambrosio was not able to pay the interest on the loan, she and the petitioner verbally agreed that she would convey to the latter the possession of the land subject to the condition that the petitioner would not collect the interest, would introduce improvements thereon and would be entitled to the fruits. Pursuant to such verbal agreement, the petitioner did all three conditions. After the death of Ambrosio, her heirs sought to annul the contracts which she entered into with the petitioner on the ground that the same were in violation of Section 116 of the Public Land Act prohibiting any alienation or encumbrance of lands acquired under the free patent for a period of ve years from the date of the issuance of the patent. This law, however, allows the pledge or mortgage of the improvements thereon. When the case reached the appellate court, the Court of Appeals modied the judgment of the lower court by declaring the petitioner possessor in bad faith for taking the land in violation of Section 116 of the Public Land Act. In resolving the issue of whether petitioner was a possessor in good faith or not, the Court held xxx It is a fact that the petitioner is not conversant with the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-grounded belief that he was not violating the prohibition regarding the alienation of the land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that the latter, as a lien, was prohibited by Section 116. These considerations again bring us to the conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may, therefore, be the basis of his good faith. The petitioner is deemed a possessor in good faith.
62
4 Manresa, 100-102, cited in Kasilag v. Roque, 69 Phil. 217.
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[83.3] Presumption of Good Faith
Good faith is always presumed, and upon him who alleges bad faith on the part of the possessor rests the burden of proof.63 There is a parallel presumption under the Rules of Evidence in favor of the innocence of a person from any wrongdoing.64 This rule is but a necessary consequence of the treatment that the law accords to possession which under the Civil Code is viewed as an outward appearance of ownership. Note that under Article 433 of the New Civil Code, actual possession under claim of ownership is viewed as that of presumed ownership. The presumption in favor of the good faith of the possessor, however, is only juris tantum65 and may be overcome by proof to the contrary. If no evidence is presented proving bad faith, the presumption of good faith therefore remains66 for it is likewise presumed that possession continues to be enjoyed on the same character in which it was acquired, until the contrary is proved.67 This presumption in favor of good faith continues to subsist until facts exist which show that the possessor is already aware that he wrongfully or improperly possesses the thing.68 In other words, every possessor in good faith becomes a possessor in bad faith from the moment he becomes aware that what he believed to be true is not so.69 Consequently, possession in good faith ceases from the moment defects in the title are made known to the possessors, by extraneous evidence or by suit for recovery of the property by the true owner.70 Whatever may be the cause or the fact from which it can be deduced that the possessor has knowledge of the defects of his title or mode of acquisition, it must be considered sufcient to show bad faith.71 In Tacas v. Tobon,72 the Supreme Court held that if there are no other facts from
Art. 527, NCC. See Rule 131, Sec. 3(a), Rules of Court. 65 See Pacic Banking Corp. v. CA, 173 SCRA 102. 66 Escritor, Jr. v. IAC, 155 SCRA 577. 67 Art. 529, NCC. 68 Art. 528, NCC; Lacap v. Lee, G.R. No. 142131, December 11, 2002. 69 Ballesteros v. Abion, G.R. No. 143361, February 09, 2006, citing Tacas v. Tobon, 53 Phil. 356 (1929). 70 Ortiz v. Kayanan, 92 SCRA 146 (1979). 71 Wong v. Carpio, 203 SCRA 118 (1991). 72 53 Phil. 356 (1929); see also Mindanao Academy, Inc. v. Yap, 13 SCRA 190 (1965); Ortiz v. Cayanan, 92 SCRA 146 (1979); Wong v. Carpio, 203 SCRA 118 (1991); Maneclang v. Baun,
63 64
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which the interruption of good faith may be determined, and an action is led to recover possession, good faith ceases from the date of receipt of the summons to appear at the trial and if such date does not appear in the record, that of the ling of the answer would control.73 The Supreme Court explained in Tacas Evidence being lacking to show that when he entered upon the possession of the lands in question, he was aware of any aw in his title or mode of acquiring it, he is deemed a possessor in good faith (Article 433, Civil Code), and in accordance with article 451 of the Civil Code, the fruits of said lands were his, until he was summoned upon the complaint, or until he has led his answer thereto. (Saul v. Hawkins, 1 Phil., 275; Javier v. Javier, 6 Phil., 493; Cleto v. Salvador, 11 Phil., 416; Valencia v. Jimenez and Fuster, 11 Phil., 492; Araujo v. Celis, 16 Phil., 329; Alcala and Alviedo v. Hernandez and Pacleb, 32 Phil., 628; Tolentino v. Vitug, 39 Phil., 126; Aquino v. Tan, 39 Phil., 517; Rivera v. Roman Catholic Archbishop of Manila, 40 Phil., 717; and Velasquez v. Teodoro, 46 Phil., 757.) Art. 451 of the same Code provides: Art. 451. Fruits received by one in possession in good faith before possession is legally interrupted become his own. Natural and industrial fruits are deemed to have been received as soon as they are gathered and harvested. Civil fruits are deemed to accrue from day to day, and belong to the possessor in good faith in this proportion. In his comments upon this article of the Civil Code, Manresa, among other things, says: But to every possessor in good faith there comes a time when he is considered a possessor in bad faith. When the owner or possessor with a better right comes along, where he
208 SCRA 179 (1992); Suobiron v. CA, 250 SCRA 184 (1995); and Ballesteros v. Abion, G.R. No. 143361, February 9, 2006. 73 Maneclang v. Baun, 208 SCRA 179 (1992).
401
becomes aware that what he had taken for granted is at least doubtful, and when he learns the grounds in support of the adverse contention, good faith ceases. The possessor may still believe that his right is more secure, because we resign ourselves with difculty to the sight of our vanishing hopes; but when the nal judgment of the court deprives him of the possession, all illusion necessarily disappears. Although he may not have been convinced of it before, the possessor becomes aware that his possession is unlawful from the time he learns of the complaint, from the time he is summoned to the trial. It is at this time that his possession is interrupted, according to Article 1945, and that he ceases to receive the fruits, according to the rst paragraph of Article 451. The ruling of the court retroacts to that time; but shall good faith be deemed to cease then? Although there is a great difference between requiring the possessor in good faith to return the fruits he received from the time when his possession was legally interrupted, and considering him a possessor in bad faith for all legal purposes from that time, the law had to establish a denite rule in the matter, which is none other than that deducible from a combination of Articles 452, 1945 and 435. Whether or not the defendant be a possessor in bad faith, for there is no doubt that he can be, and the law makes no attempt to deny it, from the service of judicial summons, there exists an act that this possessor knows that his right is not secure, that someone disputes it, and that he may yet lose it; and if the court holds that restitution be made, that time determines all the legal consequences of the interruption, the time when the possession in good faith ceased to be so before the law. The decisions of April 27, 1877, April 22, May 10 and June 13, 1878, February 11, and October 5, 1885, March 17, 1891, March 4, and May 17, 1893, held that good faith ceased when the answer to the complaint was led, taking this doctrine from the Partidas. By analogy, the service of the summons, doubtless more certain and more difcult to evade, is now admitted, according to articles 451 and 1945 of the Code, and it is in this sense that the decisions of the Supreme Court of January 28, 1896, December 7, 1899, November
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23, 1900, and July 11, 1903, must be understood, all of them holding that even the possessor in good faith must return the fruits received from the time the answer to the complaint was led, that is, from the time he became aware that he was in undue possession. (Manresa, Commentaries on the Spanish Civil Code, vol. 4, pp. 270, 271.) The interruption of good faith on the part of the possessor need not occur by reason of initiation of legal proceedings. As earlier stated, whatever may be the cause or the fact from which it can be deduced that the possessor has knowledge of the defects of his title or mode of acquisition, it must be considered sufcient to show bad faith.74 In one case,75 for example, the receipt of a letter from the daughter of the plaintiff advising defendant to desist from planting coconuts on a land in the possession of defendant, and which letter the defendant answered by saying that she did not intend to plant coconuts on the land belonging to plaintiff, was considered as the reckoning point for the interruption of good faith. In this case, it was held that the possession in bad faith of the defendant began from the receipt of such letter. It is only in case of absence of facts from which the interruption of good faith may be determined that such interruption shall be reckoned from the date of receipt of the summons or from the ling of the answer, as the case may be.
Art. 530. Only things and rights which are susceptible of being appropriated may be the object of possession. (437)
[83.4] Object of Possession
Only things and rights which are susceptible of being appropriated may be the object of possession.76 Note that the phrase susceptible of being appropriated in this article is used in a different manner compared to the phrase may be the object of appropriation in Article 414. As discussed in supra 1.4, the concept of susceptibility to appropriation in Article 414 is not equivalent to the concept of things which are
Wong v. Carpio, 203 SCRA 118 (1991). Ortiz v. Fuentebella, 27 Phil. 537. 76 Art. 530, NCC.
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within the commerce of man as the latter term is understood in law. As discussed in said section, while things which are outside the commerce of man may not be the object of a contract,77 they are not necessarily disqualied from being considered as property pursuant to the criterion mentioned in Article 414 of the Code. A good illustration is the property of public dominion pertaining to the State. While they are outside the commerce of man and cannot be the object of contracts, nonetheless, they are considered property under the Code.78 On the other hand, the term susceptibility to appropriation in the present article is broader in scope for it also refers to things which are within the commerce of man, aside from embracing the meaning accorded to it under Article 414 as discussed in supra 1.4. Stated otherwise, all things which are outside the commerce of man and those which, by reason of physical impossibility cannot be subjected to human control, may not be the object of possession. With respect to rights, it must be noted that servitudes which are not continuous (discontinuous easements) or apparent (non-apparent easements) are not susceptible of possession since they are not susceptible of continuous exercise.79 In view of the foregoing discussion, the following are examples of things and rights which may not be the object of possession: (1) Things which, because of their distance, their depth or their immensity are not capable of human control (res communes beyond human control) such as the sun, the stars and the ocean; Forces of nature in their diffused state unless they are brought under human control through the help of science; Property of public dominion; Discontinuous servitudes; Non-apparent servitudes.
(2) (3) (4) (5)
See Art. 1347, NCC. See Arts. 419 to 425, NCC. 79 4 Castan, 9th ed., 4430-445; see also II Caguioa, Civil Code, 1966 ed., 174 and II Reyes and Puno, Outline of Phil. Civil Law, 95.
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Chapter 2 ACQUISITION OF POSSESSION

Art. 531. Possession is acquired by the material occupation of a thing or the exercise of a right, or by the fact that it is subject to the action of our will, or by the proper acts and legal formalities established for acquiring such right. (438a) Art. 532. Possession may be acquired by the same person who is to enjoy it, by his legal representative, by his agent, or by any person without any power whatever; but in the last case, the possession shall not be considered as acquired until the person in whose name the act of possession was executed has ratied the same, without prejudice to the juridical consequences of negotiorum gestio in a proper case. (439a)
84. Acquisition of Possession

[84.1] Modes of Acquiring Possession
Possession is acquired in any of the following ways: (1) (2) (3) By material occupation of a thing or the exercise of a right; By subjecting the thing or right to the action of our will; and By the proper acts and legal formalities established for the acquisition of such right.80
The rst appears to be an original mode of acquisition while the others refer to derivative modes.
[84.2] Requisites for acquisition of possession
As discussed in supra 80.2, the acquisition of possession presupposes the existence of two essential elements: (1) the corpus; and (2) the animus possidendi. The rst refers refer to the material holding of the thing or the exercise of the right which may be acquired through any of the modes mentioned in this article. The second, on the other hand, refers to the intent to possess the thing or right. In other words, possession is not acquired in law in the absence of intent to possess it although there is physical holding of the thing. For example, if stolen
80
Art. 531, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION POSSESSION Acquisition of Possession
405
goods are placed in the bag of a person by another without the formers knowledge and consent, the former is not considered a possessor in law because of the absence of intent to possess the goods.
[84.3] Material Occupation
The term material occupation in Article 531 of the New Civil Code is used in its ordinary grammatical meaning, to mean actual physical possession or material apprehension. Obviously, this mode applies only to corporeal objects and does not nd application to acquisition of possession over a right. In this sense, the term material occupation in Article 531 is synonymous to occupation as a mode of acquiring ownership under Article 712 of the New Civil Code because both involve the material apprehension of things corporeal. They differ, however, in the following respects: (1) the term occupation in Article 531 is used in its ordinary grammatical meaning whereas the term occupation in Article 712 is used in a juridical and technical meaning; in Article 531, occupation is a mode of acquiring possession; whereas, in Article 712, occupation is a mode of acquiring ownership; in Article 531, the occupation must be coupled with intent to possess; whereas, in Article 712, what is required is intent to own or appropriate; in Article 531, occupation as a mode of acquiring possession applies whether the property is with an owner or not; in Article 712, however, occupation can take place only with respect to property without an owner; in Article 531, occupation as a mode of acquiring possession can have as its object a parcel of land; in occupation as a mode of acquiring ownership under Article 712, it cannot have as its object a parcel of land.81
(2)
(3)
(4)
(5)
The term material occupation in Article 531 includes two forms of constructive delivery: (1) tradicion brevi manu and (2) tradicion constitutum possessorium. Note that in these kinds of constructive
81
See Art. 714, NCC.
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delivery, material occupation is involved.82 But for those kinds of constructive delivery where material occupation is not involved, such as tradicion symbolica and tradicion longa manu, the mode of acquisition of possession is by subjecting the thing to the action of our will and not material occupation.
[84.4] Doctrine of Constructive Possession
The doctrine of constructive possession applies when the possession is under title calling for the whole.83 As a rule, the possession and cultivation of a portion of a tract under claim of ownership of all is a constructive possession of all, if the remainder is not in the adverse possession of another.84 Stated otherwise, the actual possession of part of the property is deemed to extend to the whole because possession in the eyes of the law does not mean that a man has to have his feet on every square meter of ground before it can be said that he is in possession.85 For this doctrine to apply the following requisites must be present: (1) the alleged possessor must be in actual possession of a portion or part of the property; (2) he is claiming ownership of the whole area; (3) the remainder of the area must not be in the adverse possession of another person; and (4) the area claimed must be reasonable. The doctrine of constructive possession was applied in the following cases: Ramos v. Director of Lands,86 Roales v. Director of Lands,87 Somodio v. CA,88 Dela Rosa v. Carlos,89 and Yu v. Pacleb.90 In Lasam v. Director of Lands,91 while there was evidence showing that the claimant might have possessed a portion of the parcel claimed by him and the registration of which he sought, such evidence, however, was insufcient to establish with certainly the particular portion occupied and the extent of such occupation. In refusing to apply the
4 Manresa, 5th ed., 123-124. Resolution of the Supreme Court in Gonzalez v. CA, G.R. No. 145914, June 20, 2001. 84 Ramos v. Director of Lands, 39 Phil. 175 (1918). 85 Resolution of the Supreme Court in Gonzalez v. CA, G.R. No. 145914, June 20, 2001, citing Ramos v. Director of Lands, supra. 86 Supra. 87 51 Phil. 302 (1927). 88 236 SCRA 307 (1994). 89 414 SCRA 226 (2003). 90 Supra. 91 65 Phil. 367 (1938).
82 83
407
doctrine in Ramos v. Director of Lands, supra, the Court claried that while possession in the eyes of the law does not mean that a man has to have his feet on every square meter of ground before it can be said that he is in possession, the same is not gained by mere nominal claim. Hence, the mere planting of a sign or symbol of possession cannot justify a Magellan like claim of dominion over an immense tract of territory. In reiteration of the ruling in Ramos, the Court claried that the application of the doctrine of constructive possession shall depend, among others, to the size of the tract in controversy with reference to the portion actually in possession of the claimant. In Ramirez v. Director of Lands,92 the Court also noted that the mere fact of declaring uncultivated land for taxation purposes and visiting it every once in a while, as was done by the alleged possessor, does not constitute acts of possession. In Director of Lands v. Reyes,93 the Court further held that a mere casual cultivation of portions of the land by the claimant, and the raising thereon of cattle, do not constitute possession under claim of ownership.
[84.5] Subjection to Action of Will
This particular mode does not involve any material apprehension to distinguish it from the rst mode (material occupation). It connotes, however, a degree of control over the thing sufcient to subject the same to the action of ones will. What is important in this mode is the intention to possess manifested by certain facts which are present.94 Included in this mode are the two forms of constructive delivery known as tradicion simbolica and tradicion longa manu. Tradicion simbolica takes place through delivery of symbols or some object which represent those to be delivered thus placing the thing under the control of the transferee. Through this mode, the delivery of the keys to a warehouse is sufcient to transfer possession. In the case of Banco Espaol Filipino v. Peterson, et al.,95 involving the question of whether transfer of possession took place with respect to goods remaining in the warehouse, the Supreme Court declared that the symbolical transfer of the goods by means of the keys to the warehouse
60 Phil. 114, 133 (1934). 68 SCRA 177, 193 (1975). 94 4 Manresa, 5th ed., 133. 95 7 Phil. 409.
92 93
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where the goods were stored was sufcient to show that the depositary was legally placed in possession of the goods. Tradicion longa manu, on the other hand, is effected by the transferor pointing out to the transferee the things which are being transferred.
[84.6] Proper Acts and Legal Formalities
This third mode of acquiring possession refers to any juridical act by which possession is acquired or to which the law gives the force of acts of possession.96 Examples of these juridical acts are donations, intestate and testate succession, writs of possession, judicial or administrative possession and execution of public instruments. In the case of Muyco v. Montilla, et al.,97 the possession given by the sheriff to the assignees of the original purchasers of the hacienda, in compliance with the order of the court in an action brought against the former owners of said hacienda was viewed by the Supreme Court as constituting the proper acts and legal formalities referred to in Article 531 of the New Civil Code.
[84.7] Acquisition of Possession Over Rights
As discussed in supra 84.3, material occupation is not available as a mode of acquiring possession over rights since the same requires actual physical possession and applies only to corporeal objects. With respect to rights, possession over it is acquired through any of the following means: (1) by exercise of such right; (2) by subjecting it to the action of our will; and (3) by proper acts and legal formalities.
[84.8] By Whom Possession Acquired
In the same way that possession may be exercised by the owner or holder either personally or through an agent,98 its acquisition may likewise be made personally by the person who is to enjoy it or through his agent or legal representative.99 It may even be acquired by any person, for and on behalf of the person who is to enjoy it, even in the absence of any authority from the latter.100
4 Manresa, 5th ed., 134-136. 7 Phil. 498. 98 Art. 524, NCC. 99 Art. 532, NCC. 100 Id.
96 97
409
Of course, the agent referred to in Article 532 of the New Civil Code is someone who has been authorized to acquire possession by the person who is to enjoy it. In other words, he is acquiring possession not for himself but for his principal. In such a situation, possession is considered acquired by the principal from the time that the same is acquired by the agent. If a person has not been authorized by the intended principal but possession is nonetheless acquired by the former only in representation of the latter, the intended principal may or may not ratify the act of possession in his name. In the event that the intended principal raties the act of possession done in his name, the possession shall be considered acquired by him only upon such ratication.101 The rule above, however, is without prejudice to the juridical consequences of negotiorum gestio in a proper case. According to Senator Tolentino, when a person voluntarily manages the affairs of another (negotiorum gestio), the ratication by the person for whom the thing was acquired will retroact to the time of apprehension by the gestor, and the possession of the former must be deemed to have been acquired from that moment.102
[84.9] Capacity to Acquire Possession
The rule with respect to the requirement of capacity to act in relation to acquisition of possession is embodied in Article 535 of the New Civil Code which reads: Art. 535. Minors and incapacitated persons may acquire the possession of things; but they need the assistance of their legal representatives in order to exercise the rights which from the possession arise in their favor. (443) It is clear from this article that it is applicable only to acquisition of possession by minors and incapacitated person over things but not over rights. As explained in supra 84.7, possession over rights may only be acquired through any of the modes therein discussed. Note that in any of said modes, capacity to act is necessary for the acquisition of possession.
101 102
Art. 532, NCC. II Tolentino, Civil Code, 1992 ed., 263-264.
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With respect to acquisition of possession over things, Article 535 contemplates principally of acquisition through material occupation since this mode does not require capacity to act. However, the law likewise contemplates of other means of acquisition for which the minor or other incapacitated persons has the necessary capacity, such as pure or simple donations and succession, whether testate or intestate.
Art. 533. The possession of hereditary property is deemed transmitted to the heir without interruption and from the moment of the death of the decedent, in case the inheritance is accepted. One who validly renounces an inheritance is deemed never to have possessed the same. (440) Art. 534. On who succeeds by hereditary title shall not suffer the consequences of the wrongful possession of the decedent, if it is not shown that he was aware of the aws affecting it; but the effects of possession in good faith shall not benet him except from the date of death of the decedent. (442)
85. Transfer of Possession Through Succession

[85.1] Effect of Succession
As discussed in supra 84.6, succession is one of the juridical acts sufcient to transfer possession without need of physical or material holding of the property subject mater thereof. If possession of property is effected by way of succession, whether testate or intestate, such possession is deemed transmitted to the heir without interruption from the moment of the death of the decedent but only if the heir accepts the inheritance.103 This rule will apply even if such heir is not in actual physical possession of the property. If the heir, on the other hand, validly renounces the inheritance he will be deemed never to have possessed the same104 even if he is in actual physical possession of the property. The foregoing rule especially nds application in the acquisition of property through prescription. Let us take this example: A had been in open, peaceful and adverse possession of a parcel of land formed through accretion on the land owned of X for an uninterrupted period of twenty eight years under claim of ownership. Upon his death, this property
103 104
Art. 533, NCC. Id.
411
was included in the proceedings for the settlement of the estate of A and placed under the administration of B, one of As two heirs who continued to cultivate the subject property. Assuming that the settlement proceedings lasted four years, during which B validly renounced his inheritance while C (the other heir) accepted the inheritance, the former shall be deemed never to have possessed the property while the latter shall be deemed its possessor from the moment of the death of A, even if he was not in actual physical possession of the property from the time of As death up to his acceptance of the inheritance. Further, such transfer of possession from A to C is deemed continuous and uninterrupted. Hence, C will acquire ownership over the property through prescription upon his acceptance of the inheritance since the period required for extraordinary prescription is thirty years.105
[85.2] Consequences of Wrongful Possession By Decedent
As dened in the law, a possessor in bad faith is one in possession of property knowing that his title thereto is defective.106 The existence of bad faith on the part of one possessor does not, however, prejudice his successors-in-interest. The rule in this jurisdiction is that only personal knowledge of the aw in ones title or mode of acquisition can make him a possessor in bad faith, for bad faith is not transmissible from one person to another, not even to an heir.107 This rule is expressly stated in Article 534 of the New Civil Code: Art. 534. On who succeeds by hereditary title shall not suffer the consequences of the wrongful possession of the decedent, if it is not shown that he was aware of the aws affecting it; but the effects of possession in good faith shall not benet him except from the date of the death of the decedent. (442) The reason for the above-quoted article is that bad faith is personal and intransmissible. Its effects must, therefore, be suffered only by the person who acted in bad faith; his heir should not be saddled with such consequences.108 Consequently, if the heir is not aware of the aws
See Art. 1137, NCC. Art. 526, 2nd par., NCC. 107 Escritor, Jr. v. IAC, 155 SCRA 577 (1987). 108 Id., citing II Tolentino, Civil Code, 1983 ed., 234.
105 106
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affecting the title or mode of acquisition of the decedent, the heir shall be considered a possessor in good faith because good faith is always presumed.109 However, the effects of possession in good faith shall not benet the heir except from the date of death of the decedent.110
Escritor, Jr. v. IAC 155 SCRA 577 (1987) In this case, Miguel Escritor led an application for the titling of a parcel of land located at Atimonan, Quezon. There being no opposition to his application, the cadastral court rendered a decision on May 15, 1958 adjudicating the lot with its improvements in favor of claimant Escritor and conrming his title thereto. Immediately thereafter, Escritor took possession of the property. On August 2, 1958, Simeon Acua, led a petition for review of the above-mentioned decision contending that it was obtained by claimant Escritor through fraud and misrepresentation. While the proceedings in this case were going on, Escritor died. His heirs subsequently took possession of the property. On February 16, 1971 or thirteen years after the disputed decision was rendered, the court adjudicated in favor of Acuna, ordering the heirs of Escritor to vacate the land. A writ of possession was later issued and the heirs of Escritor voluntarily gave up their possession. In 1975, Acuna led another case against the heirs of Escritor for recovery of damages for the fruits of the land which was allegedly possessed by the defendants unlawfully for thirteen years. Acua alleged that the registration of the lot was effectuated by the deceased Escritor through fraud, malice, and misrepresentation. Hence, according to him, Escritor and his heirs were possessors in bad faith. The lower court rendered a decision dismissing Acuas complaint nding that that the heirs of Escritor were in good faith possessing under a just title. On appeal, the Intermediate Appellate Court held that the heirs of Escritor were possessors in bad faith from 1958 up to 1971 and should be held accountable for damages. The Supreme Court, on appeal, reversed the judgment of the IAC. The Court explained Nevertheless, assuming that claimant Escritor was a possessor in bad faith, this should not prejudice his successors-in-interest, petitioners herein, as the rule is that only personal knowledge of the aw in ones title or mode of acquisition can make him a possessor in bad faith, for bad faith is not transmissible from one person to another, not even to an heir. As Article 534 of the Civil
109 110
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Code explicitly provides, one who succeeds by hereditary title shall not suffer the consequences of the wrongful possession of the decedent, if it is not shown that he was aware of the aws affecting it; ... The reason for this article is that bad faith is personal and intransmissible. Its effects must, therefore, be suffered only by the person who acted in bad faith; his heir should not be saddled with such consequences. Under Article 527 of the Civil Code, good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. If no evidence is presented proving bad faith, like in this case, the presumption of good faith remains. Respondent Acuna, on the other hand, bases his complaint for damages on the alleged fraud on the part of the petitioners predecessor in having the land registered under his (the predecessors) name. A review of the record, however, does not indicate the existence of any such fraud. It was not proven in the cadastral court nor was it shown in the trial court. Lot No. 2749 was not awarded to Escritor on the basis of his machinations. What is clear is that in the hearing of January 22, 1958, the Court permitted Escritor to adduce his evidence of ownership without opposing evidence as the lot had become uncontested. Respondent Acuna himself failed to appear in this hearing because of a misunderstanding with a lawyer. There is no nding that such failure to appear was caused by petitioners in this case. On the contrary, all the requirements of publication were followed. Notice of hearing was duly published. Clearly then, the allegation of fraud is without basis. Respondent having failed to prove fraud and bad faith on the part of petitioners, We sustain the trial courts nding that petitioners were possessors in good faith and should, therefore, not be held liable for damages.
Art. 535. Minors and incapacitated persons may acquire the possession of things; but they need the assistance of their legal representatives in order to exercise the rights which from the possession arise in their favor. (443) Art. 536. In no case may possession be acquired through force or intimidation as long as there is a possessor who objects thereto. He who believes that he has an action or a right to deprive another of the holding
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of a thing, must invoke the aid of the competent court, if the holder should refuse to deliver the thing. (441a) Art. 537. Acts merely tolerated, and those executed clandestinely and without the knowledge of the possessor of a thing, or by violence, do not affect possession. (444)
86. Instances Where Possession Is Not Acquired

[86.1] Use of Force or Intimidation
The law does not countenance the commission of unlawful acts for the purpose of acquiring possession. Hence, while material occupation is a recognized mode of acquiring possession, the law does not recognize the acquisition of possession through force, violence or intimidation.111 As such, even if a possessor is physically ousted from the property through the use of force or violence, he is still deemed the legal possessor in the eyes of the law.112 His possession is not considered interrupted because the law does not recognize the acquisition of possession effected in said manner. The rule that possession may not be acquired through force or intimidation as long as there is a possessor who objects thereto applies even if the one seeking recovery of possession is the owner of the property himself. This is clear from the language of Article 536 of the New Civil Code: Art. 536. In no case may possession be acquired through force or intimidation as long as there is a possessor who objects thereto. He who believes that he has an action or a right to deprive another of the holding of a thing, must invoke the aid of the competent court, if the holder should refuse to deliver the thing. (441a) (Italics supplied) Accordingly, a person in possession cannot be ejected by force, violence or terror, not even by the owners, and notwithstanding the actual condition of the title to the property.113 If such illegal manner
Art. 536, NCC. Cequea v. Bolante, G.R. No. 137944, April 6, 2000, citing Ayala de Roxas v. Maglonso, 8 Phil. 745 (1906). 113 Heirs of Pedro Laurora, et al. v. Sterling Technopark III, et al., G.R. No. 146815, April 9, 2003, citing Muoz v. Court of Appeals, 214 SCRA 216, September 23, 1992; Joven v. Court of Appeals, 212 SCRA 700, August 20, 1992; German Management and Services, Inc. v. Court of Appeals, supra.; Supia and Batioco v. Quintero and Ayala, 59 Phil. 312, December 23, 1933.
111 112
415
of ejectment is employed, the party who proves prior possession can recover possession even from the owners themselves.114 The availment of legal remedy is for the purpose of preventing breaches of peace and criminal disorder resulting from the use of force by claimants out to gain possession.115 The rule of law does not allow the mighty and the privileged to take the law into their own hands to enforce their alleged rights. They should go to court and seek judicial vindication.116
Heirs of Pedro Laurora, et al. v. Sterling Technopark III, et al. G.R. No. 146815, April 9, 2003 In 1969, the application of Pedro Laurora to buy the subject lot was approved by the government. In 1974, Pedro requested the DAR for the transfer of the lot to Juan Manaig, which request was acted upon favorably by the DAR. In 1976, the Spouses Laurora executed a Deed of Sale over the lot in favor of Juan Manaig, which sale was approved by the DAR. Subsequently, Manaig sold the land to Mile Resources Development Corporation which, in turn, sold it to S. P. Properties, Inc. Since 1969 up to the time of the sale of the property to S. P. Properties, Inc., the Spouses Laurora were in possession of the same where they planted trees. In 1997, Sterling Technopark III and S.P. Properties, Inc., through its employees, bulldozed and uprooted the trees and plants, and with the use of armed men and by means of threats and intimidation, succeeded in forcibly ejecting the spouses Laurora. The spouses thereafter led an ejectment case against Sterling Technopark III and S.P. Properties, Inc. In their defense, the defendants alleged that the complainants were not the owners of the land because they already disposed of it in 1976 as shown by legal documents. In upholding the claim of the Spouses Laurora, the Court explained that the only issue in forcible entry cases is the physical or material possession of real property. Stated otherwise, said the Court, only prior physical possession, not title, is the issue in forcible entry case. The issue of ownership in ejectment cases is to be resolved only when it is intimately intertwined with the issue of possession, to such an extent that the question of who had prior possession cannot be determined without ruling on the question of who the owner of the land is. Since in this case, no such intertwinement has been shown since the
114
Id., citing Gener v. De Leon, 367 SCRA 631 (2001) and Ceremonia v. CA, 314 SCRA Villaor v. Reyes, 22 SCRA 392, January 30, 1968; Pitargue v. Sorilla, 92 Phil. 5, Sept. Heirs of Pedro Laurora, et al. v. Sterling Technopark III, et al., supra.
731.
115
17, 1952.
116
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claim of ownership is not being made in order to prove prior possession, the ejectment court cannot intrude or dwell upon the issue of ownership. The Court added Notwithstanding the actual condition of the title to the property, a person in possession cannot be ejected by force, violence or terror not even by the owners. If such illegal manner of ejectment is employed, as it was in the present case, the party who proves prior possession in this case, petitioners can recover possession even from the owners themselves. Granting arguendo that petitioners illegally entered into and occupied the property in question, respondents had no right to take the law into their own hands and summarily or forcibly eject the occupants therefrom. Verily, even if petitioners were mere usurpers of the land owned by respondents, still they are entitled to remain on it until they are lawfully ejected therefrom. Under appropriate circumstances, respondents may le, other than an ejectment suit, an accion publiciana a plenary action intended to recover the better right to possess; or an accion reivindicatoria an action to recover ownership of real property. The availment of the aforementioned remedies is the legal alternative to prevent breaches of peace and criminal disorder resulting from the use of force by claimants out to gain possession. The rule of law does not allow the mighty and the privileged to take the law into their own hands to enforce their alleged rights. They should go to court and seek judicial vindication. [86.2] Acts Merely Tolerated
The rule is that acts which are merely tolerated do not affect possession.117 In other words, persons whose occupation of a property is by sheer tolerance of its owners are not considered as possessors in law. In the language of the Court, tolerance in itself does not bear any legal fruit, and it can easily be supplanted by a sudden change of heart on the part of the owner.118 Hence, the mere permissive use, constituting acts which are merely tolerated by the possessor, or due to his license,
117 118
Art. 537, NCC. Resuena v. CA, 454 SCRA 42, 51.
417
cannot be made the basis of acquisitive prescription119 no matter how long the possession may be.120 Possession, to constitute the foundation of a prescriptive right, must be a possession under claim of title (en concepto de dueo), or to use the common law equivalent of the term, it must be adverse. Acts of a possessory character performed by one who holds by mere tolerance by the owner are clearly not en concepto de dueo, and such possessory acts, no matter how long so continued, do not start the running of the period of prescription.121 The Court has also ruled that persons who occupy the land of another at the latters tolerance or permission, without any contract between them, are necessarily bound by an implied promise that they will vacate the same upon demand, failing in which a summary action for ejectment is the proper remedy against them.122 He becomes a deforciant illegally occupying the land the moment he is required to leave123 and the cause of action for the ling of the ejectment case is counted from the date of the demand to vacate.124 But what constitute acts of toleration? In the case of Macasaet v. Macasaet,125 the Court explained the concept, as follows: Toleration is dened as the act or practice of permitting or enduring something not wholly approved of. Sarona v. Villegas126 described what tolerated acts means, in this language: Professor Arturo M. Tolentino states that acts merely tolerated are those which by reason of neighborliness or familiarity, the owner of property allows his neighbor or another person to do on the property; they are generally those particular services or benets which ones property can give to another without material injury or prejudice to the owner, who permits them
Cuaycong v. Benedicto, 37 Phil. 781. Larena v. Mapili, 408 SCRA 484, 492. 121 Cuaycong v. Benedicto, supra. 122 Id. 123 Go, Jr. v. CA, 362 SCRA 755, 767. 124 Lopez v. David, supra; Arcal v. Court of Appeals, supra, p. 825; Villaluz v. Court of Appeals, 344 Phil. 77, 89, Sept. 5, 1997. 125 439 SCRA 625 (2004). 126 131 Phil. 365, March 27, 1968.
119 120
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out of friendship or courtesy. x x x. And, Tolentino continues, even though this is continued for a long time, no right will be acquired by prescription. x x x. Further expounding on the concept, Tolentino writes: There is tacit consent of the possessor to the acts which are merely tolerated. Thus, not every case of knowledge and silence on the part of the possessor can be considered mere tolerance. By virtue of tolerance that is considered as an authorization, permission or license, acts of possession are realized or performed. The question reduces itself to the existence or non-existence of the permission. In the Macasaet case,127 the children were invited by the parents to occupy the latters lots, out of parental love and a desire to foster family solidarity. Subsequently, however, and out of pique, the parents asked them to vacate the premises. The Court ruled that owing to the circumstances of the case, a nding of possession by mere tolerance is to be ruled out. In this case, the Court explained We hold that the facts of the present case rule out the nding of possession by mere tolerance. Petitioners were able to establish that respondents had invited them to occupy the subject lots in order that they could all live near one other and help in resolving family problems. By occupying those lots, petitioners demonstrated their acceptance of the invitation. Hence, there was a meeting of minds, and an agreement regarding possession of the lots impliedly arose between the parties. The occupancy of the subject lots by petitioners was not merely something not wholly approved of by respondents. Neither did it arise from what Tolentino refers to as neighborliness or familiarity. In point of fact, their possession was upon the invitation of and with the complete approval of respondents, who desired that their children would occupy the premises. It arose from familial love and a desire for family solidarity, which are basic Filipino traits.
127
See further discussion of this case in supra 83.1.1.
419
[86.3] Clandestine and Unknown Acts
Acts which are executed clandestinely and without the knowledge of the possessor do not affect possession.128 In order for possession to remain unaffected, it is necessary that the acts executed must be both clandestine and unknown to the possessor. An act is considered done clandestinely if the same is done in secret, hidden or concealed.129 In other words, the term clandestine is used in contradistinction to the term public under Article 1118 of the New Civil Code as a requisite for acquisition of real property through acquisitive prescription. If the act is done clandestinely but the same is known to the possessor, his possession will be affected. In the same way, if the act is done publicly even without the knowledge of the possessor, the same will affect the latters possession. If both requisites are satised, meaning, the act executed is both clandestine and unknown to the possessor, the same does not affect the true possession of the legal possessor. As a consequence, the legal possessors possession is not deemed interrupted for all legal intents and purposes, e.g., it will not interrupt the running of the period of acquisitive prescription in favor of the legal possessor nor it will affect his right to receive the fruits. On the part of the actual possessor, his possession acquired through clandestine acts not known to the legal possessor will not ripen into ownership through prescription because one of the requirements thereof that the possession be public in character will not be present.
Art. 538. Possession as a fact cannot be recognized at the same time in two different personalities except in the cases of co-possession. Should a question arise regarding the fact of possession, the present possessor shall be preferred; if there are two possessors, the one longer in possession; if the dates of the possession are the same, the one who presents a title; and if all these conditions are equal, the thing shall be placed in judicial deposit pending determination of its possession or ownership through proper proceedings. (445)
128 129
Art. 537, NCC. Blacks Law Dictionary, 5th ed., 225.
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87. Conict Over Possession de Facto The law recognizes a situation where the fact of possession (possession de facto) and the right to such possession (possession de jure) are in the hands of two different persons, as in the case of possession exercised in anothers name discussed in supra 81. Here, the possession of the agent is for the benet of the principal. It is the latter who is therefore deemed as the possessor. The law likewise recognizes a situation where the owner may temporarily deprive himself of his right to possess the property as when he constitutes a usufruct over the same in favor of another person or when he enters into a contract of lease with a lessee. Here, both the right of possession and the fact of possession are exercised by the usufructuary or by the lessee, as the case may be. During the duration of the usufruct or lease, the usufructuary and the lessee are considered as the legal possessors of the property. The law does not, however, recognize the possibility that possession de facto may reside at the same time in two different personalities unless they are co-possessors.130 In case of conict involving the question of possession as a fact, the following rules of preference shall govern: (1) (2) (3) The present possessor shall be preferred; If there are two possessors, the one longer in possession is preferred; If the dates of possession are the same, the one who presents a title.
If all the foregoing conditions are equal, the thing shall be placed in judicial deposit pending determination of its possession or ownership through proper proceedings.131 In determining who the present possessor is, the precepts earlier discussed in this Chapter shall be taken into consideration. Hence, if the controversy is between a previous possessor and the actual possessor who acquires possession through force, violence, intimidation, clandestine
130 131
Art. 538, NCC. Id.
421
acts not known to the previous possessor, the previous possessor shall be deemed as the present possessor because his possession was not affected. The same is true in case of possession by mere tolerance of the owner, in which case, the actual possessor is not deemed as the present possessor because his possession does not affect the owners possession. In applying the foregoing rule of preference, the case of Cequea v. Bolante132 is instructive. The facts of this case are presented below:
Cequea v. Bolante G.R. No. 137944, April 6, 2000 This case involves a parcel of land situated in Binangonan, Rizal and covered by a tax declaration. Prior to 1954, the land was originally declared for taxation purposes in the name of Sinforoso Mendoza, father of respondent Honorata Mendoza Bolante. Sinforoso was the occupant of the said property until his death in 1930. When Sinforoso died, his brother (Margarito) took possession of the land and cultivated the same with his son, Miguel. At the same time, respondent and her mother continued residing on the land. When respondent came of age in 1948, she paid the realty taxes on the land for the years 1932 up to 1948. In 1953, Margarito declared the land for taxation purposes in his name and paid the realty taxes beginning 1952. When Margarito died, Miguel continued cultivating the land. During the time that Margarito and Miguel were cultivating the land, respondent and her mother were living on the same land. In 1985, Miguel was physically ousted from the property by the respondent. Litigations thereafter ensued between the respondent and the petitioners (daughters of Margarito and sisters of Miguel) on the question of who shall be considered as the preferred possessor.
The lower court in the said case ruled in favor of the petitioners on the strength of the tax declaration of their father (Margarito). On appeal, the appellate court reversed the ruling of the trial court and ruled that the respondent was the preferred possessor under Article 538 of the Civil Code because she was in notorious, actual, exclusive and continuous possession of the land since 1985. Petitioners disputed this ruling. They contended that she came into possession through force and violence, contrary to Article 536 of the Civil Code. On this particular issue, the Supreme Court made the following pronouncements
132
G.R. No. 137944, April 6, 2000.
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We concede that despite their dispossession in 1985, the petitioners did not lose legal possession because possession cannot be acquired through force or violence. To all intents and purposes, a possessor, even if physically ousted, is still deemed the legal possessor. Indeed, anyone who can prove prior possession, regardless of its character, may recover such possession. After making the said ruling, the Court did not, however, consider the petitioners as the preferred possessors. Neither did the Court consider the petitioners as the present possessors. This is due to the fact that the possession by the petitioners and/or their predecessors-in-interest was not exclusive. The Court explained However, possession by the petitioners does not prevail over that of the respondent. Possession by the former before 1985 was not exclusive, as the latter also acquired it before 1985. The records show that the petitioners father and brother, as well as the respondent and her mother were simultaneously in adverse possession of the land. Before 1985, the subject land was occupied and cultivated by the respondents father (Sinforoso), who was the brother of petitioners father (Margarito), as evidenced by Tax Declaration No. 26425. When Sinforoso died in 1930, Margarito took possession of the land and cultivated it with his son Miguel. At the same time, respondent and her mother continued residing on the lot. When respondent came of age in 1948, she paid realty taxes for the years 1932-1948. Margarito declared the lot for taxation in his name in 1953 and paid its realty taxes beginning 1952. When he died, Miguel continued cultivating the land. As found by the CA, the respondent and her mother were living on the land, which was being tilled by Miguel until 1985 when he was physically ousted by the respondent. In resolving the issue of possession, the Court eventually ruled in favor of the respondent because she has been in possession for a longer period. The Court thus held Based on Article 538 of the Civil Code, the respondent is the preferred possessor because, beneting from her
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fathers tax declaration of the subject lot since 1926, she has been in possession thereof for a longer period. On the other hand, petitioners father acquired joint possession only in 1952. The Court emphasized, however, that Article 538 of the New Civil Code settles only the question of possession and that possession is different from ownership. With respect to the question on ownership, the same should be established in one of the ways provided by law. In this case, according to the Court, the question of ownership could be settled by determining who between the claimants has proven acquisitive prescription. The Court ruled again in favor of the respondent Ownership of immovable property is acquired by ordinary prescription through possession for ten years. Being the sole heir of her father, respondent showed through his tax receipt that she had been in possession of the land for more than ten years since 1932. When her father died in 1930, she continued to reside there with her mother. When she got married, she and her husband engaged in kaingin inside the disputed lot for their livelihood. Respondents possession was not disturbed until 1953 when the petitioners father claimed the land. But by then, her possession, which was in the concept of owner, public, peaceful, and uninterrupted had already ripened into ownership. Furthermore she herself, after her fathers demise, declared and paid realty taxes for the disputed land. Tax receipts and declarations of ownership for taxation, when coupled with proof of actual possession of the property, can be the basis of a claim for ownership through prescription. In contrast, the petitioners, despite thirty-two years of farming the subject land, did not acquire ownership. It is settled that ownership cannot be acquired by mere occupation. Unless coupled with the element of hostility toward the true owner, occupation and use, however long, will not confer title by prescription or adverse possession. Moreover, the petitioners cannot claim that their possession was public, peaceful and uninterrupted. Although their father and brother arguably acquired ownership through extraordinary
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prescription because of their adverse possession for thirtytwo years (1953-1985), this supposed ownership cannot extend to the entire disputed lot, but must be limited to the portion that they actually farmed. Chapter 3 EFFECTS OF POSSESSION
Art. 539. Every possessor has a right to be respected in his possession; and should he be disturbed therein he shall be protected in or restored to said possession by the means established by the laws and the Rules of Court. A possessor deprived of his possession through forcible entry may within ten days from the ling of the complaint present a motion to secure from the competent court, in the action for forcible entry, a writ of preliminary mandatory injunction to restore him in his possession. The court shall decide the motion within thirty (30) days from the ling thereof. (446a)
88. Right to Protection of Possessors

[88.1] Protects Every Kinds of Possessors
The Civil Code considers possession as an outward sign of ownership,133 it having all the appearances of ownership. For this reason, the law renders protection to every possessors134 whether owners or not. According to the Supreme Court, the phrase every possessor in the article indicates that all kinds of possession, from that of the owner to that of a mere holder, except that which constitutes a crime, should be respected and protected by the means established and the laws of procedure.135 The protection is given because the Civil Code assumes that the possessor of a thing is the owner136 and also because even if the possessor is not the owner, his situation should be protected until it
U.S. v. Rapinan, 1 Phil. 294. Art. 539, NCC. 135 Phil. Trust Co. v. CA, 320 SCRA 719 (1999), citing II Tolentino, Civil Code, 241 (1987), citing 3 Sanchez-Roman 438-439, 2 Navarro Amandi 170 and 4 Manresa 214. 136 See Art. 433, NCC.
133 134
PROPERTY, OWNERSHIP, AND ITS MODIFICATION POSSESSION Effects of Possession
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is shown that there is another person with a better right.137 The fact of possession in itself, therefore, has a positive value and is endowed with a distinct standing of its own in the law of property.138 True, by this principle of respect for the possessory status, a wrongful possessor may at times be upheld by the courts, but this is only temporary and for one sole and special purpose, namely, the maintenance of public order.139 The protection is only temporary because it is intended that as soon as the lawless act of dispossession has been suppressed, the question of ownership or of possession de jure is to be settled in the proper court and in a proper action.140 The larger and permanent interests of property require that such rare and exceptional instance of preference in the courts of the actual but wrongful possessor be permitted.141
[88.2] Actions to Recover Possession
As discussed in supra 35, any lawful possessor, not only the owner, may resort to reasonable force to repel or prevent an actual or threatened unlawful physical invasion or usurpation of the property in his possession. But this doctrine can only be invoked at the time of actual or threatened dispossession, and not when possession has already been lost.142 In the latter case, the owner must resort to judicial process for the recovery of the property as required in Article 536 of the New Civil Code.143 Pursuant to this article, he who believes that he has an action or a right to deprive another of the holding of a thing must invoke the aid of the competent court, if the holder should refuse to deliver the thing. This article is complemented by the present article (Article 539) which grants to possessors the right not only to be protected in his possession, but likewise the right to be restored to said possession in case of disturbance by the means established by the laws and the Rules of Court. The available actions for the purpose of implementing the provisions of the present article are already discussed in supra 34.2. In addition,
II Caguioa, Civil Code, 1966 ed., 165. Manuel v. CA, G.R. No. 95469, July 25, 1991. 139 Id. 140 Id. 141 Id. 142 German Management & Services, Inc. v. CA, 177 SCRA 495 (1989). 143 Id.
137 138
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the law also allows as an auxiliary remedy the writ of preliminary mandatory injunction to prevent further acts of dispossession.
[88.3] Writ of Preliminary Mandatory Injunction
A writ of preliminary mandatory injunction is a judicial writ, a form of provisional remedy, granted at any stage of an action prior to judgment or nal order therein commanding or requiring the performance of a particular act. Prior to the promulgation of the New Civil Code, it was deemed improper to issue a writ of preliminary injunction where the party to be enjoined had already taken complete material possession of the property involved.144 Said remedy was allowed then only for the purpose of preventing further acts of dispossession.145 However, with the enactment of Article 539 of the New Civil Code, the plaintiff in forcible entry case has since been allowed to avail of a writ of preliminary mandatory injunction to restore him in his possession during the pendency of his action to recover possession. The second paragraph of Article 539 provides: Art. 539. xxx A possessor deprived of his possession through forcible entry may within ten days from the ling of the complaint present a motion to secure from the competent court, in the action for forcible entry, a writ of preliminary mandatory injunction to restore him in his possession. The court shall decide the motion within thirty (30) days from the ling thereof. (446a) The Code Commission justies the shift in the rule in the following words: The writ of preliminary injunction is called for by the fact that there are at present prolonged litigations between the owner and the usurper, and the former is frequently deprived of his possession even when he has an immediate right thereto.146 Pursuant to the afore-quoted provisions, the remedy of writ of preliminary injunction can be availed of at the start of the action only in cases of forcible entry for the purpose of restoring the plaintiff in
Torre, et al. v. Hon. J. Querubin, et al., 101 Phil. 53 (1957). Devesa v. Arbes, 13 Phil. 273; Delgado v. Carael, 37 Phil. 161. 146 Report of the Code Commission, 98.
144 145
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possession but not in unlawful detainer. However, in cases of unlawful detainer, the issuance of a preliminary writ of mandatory action can be availed of on appeal to the higher court in case the appeal of the lessee is frivolous or dilatory or the appeal of the lessor is prima facie meritorious.147 According to retired Justice Florenz Regalado, with the enactment of B.P. Blg. 129, specically Section 33(1) thereof, an inferior court has jurisdiction to issue a writ of preliminary injunction in either forcible entry or unlawful detainer cases.148 Under the 1997 Rules of Civil Procedure, it has now been made clear that the provisional remedy of writ of preliminary mandatory injunction is available at the start of the action in both forcible entry and unlawful detainer cases. Under the new rules, the said remedy is also available on appeal to the Regional Trial Court whether the action is for forcible entry or unlawful detainer. Sections 15 and 20 of the 1997 Rules of Civil Procedure now provide: Sec. 15. Preliminary injunction. The court may grant preliminary injunction, in accordance with the provisions of Rule 58 hereof, to prevent the defendant from committing further acts of dispossession against the plaintiff. A possessor deprived of his possession through forcible entry or unlawful detainer may, within ve (5) days from the ling of the complaint, present a motion in the action for forcible entry or unlawful detainer for the issuance of a writ of preliminary mandatory injunction to restore him in his possession. The court shall decide the motion within thirty (30) days from the ling thereof. (3a) Sec. 20. Preliminary mandatory injunction in case of appeal. Upon motion of the plaintiff, within ten (10) days from the perfection of the appeal to the Regional Trial Court, the latter may issue a writ of preliminary mandatory injunction to restore the plaintiff in possession if the court is satised that the defendants appeal is frivolous or dilatory or that the appeal of the plaintiff is prima facie meritorious. (9a)
147 148
Art. 1674, NCC. I Regalado, Remedial Law Compendium, 6th ed., 46, 786.
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Comparing the provisions of the present rules above-quoted with the provisions of the second paragraph of Article 539 and Article 1674 of the New Civil Code, the following are the notable changes: (1) the remedy of writ of preliminary mandatory injunctions is now available at the start of the action in both forcible entry and unlawful detainer cases; (2) the period for the ling of the motion for issuance of the writ at the start of the action has been reduced to ve (5) days from ten (10) days counted from the time of the ling of the complaint; (3) the same remedy is now available on appeal to the RTC whether the action is for forcible entry or unlawful detainer; and (4) the remedy is no longer limited, on appeal, to causes of action which arise from the contract of lease. Hence, the rules stated in Articles 539 and 1674 in connection with the issuance of a writ of preliminary mandatory injunction now appear to have been modied.
Art. 540. Only the possession acquired and enjoyed in the concept of owner can serve as a title for acquiring dominion. (447) Art. 541. A possessor in the concept of owner has in his favor the legal presumption that he possesses with a just title and he cannot be obliged to show or prove it. (448a) Art. 542. The possession of real property presumes that of the movables therein, so long as it is not shown or proved that they should be excluded. (449)
89. Possession in the Concept of Owner The following are the effects of possession in the concept of owner: (1) (2) (3) It raises a disputable presumption of ownership (Art. 433, NCC). It creates a disputable presumption that the possessor has just title and he cannot be obliged to show it. (Art. 541, NCC) It can ripen into ownership through acquisitive prescription (Art. 540, NCC), subject to the additional requirements under Article 1118 of the Civil Code.
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[89.1] Presumption of Just Title
Actual possession under claim of ownership raises a disputable presumption of ownership.149 In addition, the possessor in the concept of owner (en concepto de dueo) has in his favor the legal presumption that he possesses with a just title and he cannot be obliged to show it.150 This presumption can be availed of by the possessor in cases where another person claims a better right over the property. In action reivindicatoria, for example, the person who claims that he has a better right to the property has the burden of proving his title, in addition to proving the identity of the land claimed.151 In other words, the plaintiff must rely on the strength of his own title, not on the weakness of the defendants title152 because the latter enjoys the presumption of just title which he cannot be obliged to show. The presumption, however, is disputable and may be rebutted by proof to the contrary. So long as the person claiming a better right is unable to prove his own title, the presumption prevails in favor of the possessor en concepto de dueo. Hence, the latter is not even required to prove his title. If such other person, however, prevails in overthrowing the presumption by proving the existence of his title upon which the claim is based, the possessor is now obliged to show and prove his title. The presumption of the existence of a just title in favor of the possessor en concepto de dueo may not be availed by him for the purpose of acquiring ownership through acquisitive prescription. For the latter purpose, the law requires that the just title of the possessor must be proved: Art. 1131. For the purposes of prescription, just title must be proved; it is never presumed. (New Civil Code)
[89.2] Meaning of Just Title
Although the wordings of Article 541 seem to suggest that the term just title refers to written documents, it must not be interpreted in such restricted sense. The term just title should be construed as
Art. 433, NCC. Art. 541, NCC. 151 Art. 434, NCC. 152 Huchison v. Buscas, G.R. No. 158554, May 26, 2005.
149 150
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referring to that which is legally sufcient to transfer ownership of the thing or the real right to which it relates.153 Consequently, it may be proved orally by witnesses as well as through written documents or evidences.
[89.3] In Relation to Acquisitive Prescription
Acquisitive prescription is a mode of acquiring ownership by a possessor through the requisite lapse of time.154 In order to ripen into ownership, possession must be in the concept of an owner, public, peaceful and uninterrupted.155 Only possession acquired and enjoyed in the concept of owner, therefore, can serve as a title for acquiring dominion.156 Thus, mere possession with a juridical title, such as by a usufructuary, a trustee, a lessee, an agent or a pledgee, not being in the concept of an owner, cannot ripen into ownership by acquisitive prescription, unless the juridical relation is rst expressly repudiated and such repudiation has been communicated to the other party.157 Acts of possessory character executed due to license or by mere tolerance of the owner would likewise be inadequate.158 Possession, to constitute the foundation of a prescriptive right, must be en concepto de dueo, or, to use the common law equivalent of the term, that possession should be adverse, if not, such possessory acts, no matter how long, do not start the running of the period of prescription.159
Marcelo v. Court of Appeals 305 SCRA 800 (1999) The heirs of the deceased Jose Marcelo led with the RTC an action to recover a portion of an unregistered land in Sta. Lucia, Angat, Bulacan. They alleged that two parcels of land, owned by the late Jose Marcelo and his spouse, had been encroached by Fernando Cruz and Servando Flores. After
4 Manresa 245-246; 248, cited in II Tolentino, Civil Code, 1992 ed., 283-284. Esguerra v. Manantan, G.R. No. 158328, February 23, 2007; see also Marcelo v. Court of Appeals, 305 SCRA 800, 807-808 (1999). 155 Art. 1118, NCC. 156 Art. 540, NCC. 157 Esguerra v. Manantan, supra; also in Marcelo v. Court of Appeals, supra, citing Mariategui v. CA, 205 SCRA 337; Adille v. CA, 157 SCRA 455; Bargayo v. Camumot, 40 Phil. 857; Laguna v. Levantino, 71 Phil. 566. 158 Art. 1119, NCC. 159 Esguerra v. Manantan, supra; also in Marcelo v. Court of Appeals, supra.
153 154
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trial, a decision was rendered in favor of the heirs of Jose Marcelo; however, on appeal to the Court of Appeals, the same was reversed. Hence, this petition assailing the decision of the Court of Appeals which ruled that the action initiated by Marcelos heirs would not prosper on the theory that Flores already has acquired ownership of the disputed land by ordinary acquisitive prescription. According to Marcelos heirs, the parcel of land subject of litigation was originally owned by Jose Marcelo and they had been in continuous possession thereof since 1939. In 1967, they discovered that a portion of said property had been encroached upon by Cruz, but Cruz still sold his property, including the encroached parcel of land to Flores. Cruz, however, alleged that the disputed land is part of the land he acquired in 1960 from the heirs of Jorge Sarmiento, which he (Cruz) had surveyed and declared for taxation purposes. Then, in 1968, he sold the whole lot to Flores who then occupied and cultivated the same. The contract executed by Cruz and the heirs of Sarmiento includes the encroached property, as found by the trial court and the appellate court. And when Cruz sold the land to Flores, the latter immediately took possession of the same to the exclusion of all others and promptly paid the realty taxes thereon. From that time on, Flores had been in possession of the entire area in the concept of an owner and holding it in that capacity for almost 14 years before the heirs of Marcelo initiated their complaint in 1982. The records of the case supported the holding of the appellate court that the requirements for ordinary prescription have been duly met Flores took possession of the controverted property in good faith and with just title because the said portion was an integral part of the bigger tract of land which he bought from Cruz. Further, Flores possession was not only in the concept of an owner but also public, peaceful and uninterrupted. Hence, the Court found no cogent reasons to reverse the ndings of the appellate court and thus gave its afrmance to the assailed decision.
Art. 543. Each one of the participants of a thing possessed in common shall be deemed to have exclusively possessed the part which may be allotted to him upon the division thereof, for the entire period during which the co-possession lasted. Interruption in the possession of the whole or a part of a thing possessed in common shall be to the prejudice of all the possessors. However, in case of civil interruption, the Rules of Court shall apply. (450a)
90. Co-possession As discussed in supra 87 in relation to Article 538, the law does not recognize the possibility of possession de facto residing at the
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same time in two different personalities unless they are co-possessors.160 Of course, the concept of co-possession implies that the thing subject matter thereof is undivided and there are two or more possessors. If the co-possession is under claim of ownership, each of the co-possessors is considered as the possessor of the whole and over the whole each may exercise the right of possession, subject to the similar right of the other co-possessors. This state of affairs will last until the partition of the property. In the event of partition, however, each of the co-possessors shall be deemed to have exclusively possessed the part which may be allotted to him for the entire period that the state of co-possession lasted.161 However, any interruption in the possession of the whole or part of a thing possessed in common shall be to the prejudice of all the co-possessors.162 The foregoing principles may be illustrated as follows: A, B and C are co-possessors of a parcel of land under claim of ownership and in good faith for a period of eleven years, the possession being exercised through C. On the eleventh year, the co-possessors divided the property in three equal parts, each taking exclusive possession of their part after the division. Two years after the partition, C died. During his lifetime, C disposed of the property allotted to him. After his death, however, his heirs led an action against A and B claiming ownership of a portion of said property on the ground that their predecessor-in-interest was the actual possessor of the same and became the exclusive owner thereof through ordinary acquisitive prescription. In this case, the claim of the heirs will not prosper since A and B will be deemed as the exclusive possessors of the part allotted to them during the eleven years that the co-possession lasted. Under the law, C is deemed as never to have possessed at all the parts allotted to A and B. In case of interruption, the law says that the same shall affect the interest of all. This may be illustrated as follows: A, B and C are co-possessors of a parcel of land under claim of ownership, the possession being exercised through C for a period of six years. On the seventh year, X took possession of one-third of the area of
Art. 538, NCC. Art. 543, NCC. 162 Id.
160 161
433
the land in the concept of owner and adverse to the interest of the copossessors and continued to possess the same until the co-possessors decided to divide the property possessed in common on the eleventh year. In this situation, the interruption of possession in connection with one third of the area of the land will prejudice not only C but all the co-possessors. Hence, the co-possessors can claim ownership only of two-third of the area through acquisitive prescription and only this area can be the subject of partition among the co-possessors.
Art. 544. A possessor in good faith is entitled to the fruits received before the possession is legally interrupted. Natural and industrial fruits are considered received from the time they are gathered or severed. Civil fruits are deemed to accrue daily and belong to the possessor in good faith in that proportion. (451) Art. 545. If at the time the good faith ceases, there should be any natural or industrial fruits, the possessor shall have a right to a part of the expenses of cultivation, and to a part of the net harvest, both in proportion to the time of the possession. The charges shall be divided on the same basis by the two possessors. The owner of the thing may, should he so desire, give the possessor in good faith the right to nish the cultivation and gathering of the growing fruits, as an indemnity for his part of the expenses of cultivation and the net proceeds; the possessor in good faith who for any reason whatever should refuse to accept this concession, shall lose the right to be indemnied in any other manner. (452a)
91. Right of Possessors to Fruits As discussed in supra 41.1, the general rule with respect to the ownership of the fruits is that the same belong to the owner pursuant to the law on accesion discreta embodied in Article 441 of the New Civil Code. Now, whether the possessor is in good faith or in bad faith, he is not the true owner of the property in his possession because there is a aw or defect in his title or mode of acquisition which has the effect of invalidating it the only difference between these two kinds of possessors is that the former is not aware of the existence of such aw or defect while the latter is aware of the same. Since the possessor (whether in good faith or in bad faith) is not the true owner, a question
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will arise with respect to his rights over the fruits. This question is answered by the provisions of Articles 544, 545 and 549 of the New Civil Code. Pursuant to these articles, the rights of possessors in relation to the fruits shall depend on his good faith or bad faith and on whether such fruits have already been received by him or are still pending: I. Possessor in Good Faith A. Fruits Already Received
[91.1] Rule
The rights of a possessor in good faith in relation to fruits already gathered or severed by him are governed by the provision of Article 544 of the New Civil Code. It is clear that this article applies to situations where the fruits have already been gathered since the provision speaks of fruits received. Pursuant to this article, the possessor in good faith is entitled to the fruits received by him before his possession is legally interrupted. This is one of the exceptions to the rule embodied in Article 441 of the New Civil Code. In other words, this is one of the instances where the owner is not entitled to the fruits.
[91.2] Interruption of Good Faith
From the wordings of Article 544, it may appear that the interruption of good faith is required to be legal in nature in order for the possessor in good faith to lose his entitlement over the fruits. But this is not necessarily so. The provision of this article must be read in conjunction with the provisions of Articles 549 and 528 of the New Civil Code. In Article 549, it is clear that a possessor in bad faith has no right over the fruits received by him. In Article 528, on the other hand, it is stated that the possession in good faith loses its character as such, and therefore turns into bad faith, in the case and from the moment that facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongly. In other words, every possessor in good faith becomes a possessor in bad faith from the moment he becomes aware that what he believed to be true is not so.163
163 Ballesteros v. Abion, G.R. No. 143361, February 9, 2006, citing Tacas v. Tobon, 53 Phil. 356 (1929).
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Consequently, possession in good faith ceases from the moment defects in the title are made known to the possessors, by extraneous evidence or by suit for recovery of the property by the true owner.164 Whatever may be the cause or the fact from which it can be deduced that the possessor has knowledge of the defects of his title or mode of acquisition, it must be considered sufcient to show bad faith.165 Hence, the interruption of good faith on the part of the possessor need not occur by reason of initiation of legal proceedings. This is also discussed in supra 83.3. In Tacas v. Tobon,166 the Supreme Court held that if there are no other facts from which the interruption of good faith may be determined, and an action is led to recover possession, good faith ceases from the date of receipt of the summons to appear at the trial and if such date does not appear in the record, that of the ling of the answer would control.167 In other words, it is only in case of absence of facts from which the interruption of good faith may be determined that Article 544 shall apply, in the sense that such interruption shall be by way of legal interruption, and which is reckoned from the date of receipt of the summons or from the ling of the answer, as the case may be.
[91.3] When Fruits Considered Received
As to when fruits are considered received shall, of course, depend on the kind of fruits involved. With respect to natural and industrial fruits, they are considered received from the time that they are gathered or severed. With regard to civil fruits, they are deemed to accrue daily. Hence, the possessor in good faith shall be entitled only to those which have accrued prior to the interruption of his good faith. To illustrate: The property is being rented out by the possessor in good faith and the rent is being paid on a monthly basis in the amount of P30,000.00. Let us say, for example, that the possessor in good faith received the summons on the 11th day of the month of October, he will nonetheless be entitled to get his share of the rental payment for that month in the
Ortiz v. Kayanan, 92 SCRA 146 (1979). Wong v. Carpio, 203 SCRA 118 (1991). 166 53 Phil. 356 (1929); see also Mindanao Academy, Inc. v. Yap, 13 SCRA 190 (1965); Ortiz v. Cayanan, 92 SCRA 146 (1979); Wong v. Carpio, 203 SCRA 118 (1991); Maneclang v. Baun, 208 SCRA 179 (1992); Suobiron v. CA, 250 SCRA 184 (1995) and Ballesteros v. Abion, G.R. No. 143361, February 9, 2006. 167 Maneclang v. Baun, 208 SCRA 179 (1992).
164 165
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amount of P10,000.00, representing the rent which accrued prior to the interruption of his good faith. B. Pending Fruits
[91.4] Rule
The rights of a possessor in good faith in relation to natural and industrial fruits which are still pending or those that have not yet been gathered or severed are governed by the provisions of Article 545 of the New Civil Code. Note that the concept of pending fruits can only apply to natural and industrial fruits but not to civil fruits since the latter accrue on a daily basis. According to Article 545, if at the time the good faith ceases, there should be pending natural or industrial fruits, the possessor and the owner shall have a right to a part of the net harvest and each shall divide the expenses of cultivation, both in proportion to the time of their respective possessions. If the owner does not want to pay his share of the expenses incurred in connection with the cultivation, he may, at his option, allow the possessor to nish the cultivation and gathering of the growing fruits (in lieu of his part of such expenses), in which case, the owner will not have any share in the harvest. If the owner chooses this option and the possessor refuses to accept the concession for any reason whatever, the latter shall lose the right to be indemnied in any other manner. In other words, the possessor must accept the owners choice otherwise he will lose the right to be indemnied and this rule will apply even if the value of the fruits are less than the amount of the expenses incurred. With respect to charges, the same shall also be divided by the possessor and the owner, in proportion to the time of their respective possessions. According to Manresa,168 the term charges in Article 545 is understood to be those expenses incurred not on the thing itself, but because of it or on account of it. An example of charges are the taxes incurred, whether on the capital or on the fruits.
168
4 Manresa, 5th ed., 243.
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[91.5] Rules Do Not Apply to Trees
The rules discussed above (supra 91.1 up to 91.4) are applicable only to fruits as these terms are dened in Article 442 of the New Civil Code. Said rules do not ordinarily apply to trees because the latter are not considered as fruits unless they are being exploited for an industry, in which case, they are classied as industrial fruits.169 Hence, with respect to trees that are not being exploited for an industry which may have been planted by the possessor in good faith, the rules on accesion industrial shall apply, taking also into considerations the good faith or bad faith of the landowner. II. Possessor in Bad Faith A. Fruits Already Received
[91.6] Rule
The possessor is entitled to the fruits so long as he is in good faith.170 Ergo, if the possessor is in bad faith he is not entitled to the same whether the fruits have already been received by him or are still pending. With respect to fruits that have been gathered and received by a possessor in bad faith, the provision of Article 549 applies: Art. 549. The possessor in bad faith shall reimburse the fruits received and those which the legitimate possessor could have received, and shall have a right only to the expenses mentioned in paragraph 1 of Article 546 and in Article 443. The expenses incurred in improvements for pure luxury or mere pleasure shall not be refunded to the possessor in bad faith, but he may remove the objects for which such expenses have been incurred, provided that the thing suffers no injury thereby, and that the lawful possessor does not prefer to retain them by paying the value they may have at the time he enters into possession. (445a) Under this article, the possessor in bad faith shall have the obligation to reimburse not only the fruits actually received by him but also
3 Manresa, 6th ed., p. 191. Aquino v. Taedo, 39 Phil. 517; Alcala v. Hernandez, 32 Phil. 628; Tolentino v. Vitug, 39 Phil. 126; Calma v. Calma, 56 Phil. 102.
169 170
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those which the legitimate possessor could have received. By fruits which the legitimate possessor could have received is meant all natural, industrial or civil fruits which the owner could have received had he been in possession and which were not so received by the possessor because of his fraud, abandonment or negligence.171 In connection with the fruits received by the possessor in bad faith of which he is required to reimburse to the legitimate possessor, Article 549 of the New Civil Code nonetheless grants the possessor in bad faith the right to recover from the legitimate possessor the expenses mentioned in Article 443 of the New Civil Code expenses for production, gathering and preservation of the fruits upon the latters receipt of the reimbursement. As intimated in supra 42.2, Article 443 will apply regardless of the good faith or bad faith of the possessor. In addition, the said article will apply irrespective of whether the amount of the expenses incurred far exceeds the value of the fruits.172 Aside from the expenses mentioned in Article 443, the possessor in bad faith is likewise entitled to reimbursement for the necessary expenses incurred by him for the preservation of the land173 or the thing174 which bore the fruit. B. Pending Fruits
[91.7] Rule
Note that the application of Article 549 is limited only to cases where the fruits have already been gathered or severed since the article speaks of fruits received. Hence, if the legitimate possessor is able to recover the property from a possessor in bad faith at a time when the fruits are still pending, it is not Article 549 that will apply but Article 449 of the New Civil Code. As a consequence, the possessor in bad faith will not be entitled to any reimbursement of the expenses he incurred in relation to the fruits, including the expenses he incurred for its production and preservation because these expenses are reimbursable to
See II Caguioa, Civil Code, 1966 ed., 205, citing 4 Manresa, 5th ed., 252-253; Director of Lands v. Abagat, 53 Phil. 147. 172 See supra 42.4. 173 See Art. 452, NCC. 174 See Art. 546, 1st par., NCC, in relation to Art. 549, NCC.
171
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the possessor in bad faith if the fruits have already been received by the latter. However, the possessor in bad faith is still entitled to recover the necessary expenses incurred by him for the preservation of the land175 or the thing176 which bore the fruit.
[91.8] Rule With Respect to Trees
For trees that were planted by the builder in bad faith, the rules on accesion industrial will apply. Hence, in connection with these trees, the landowner may exercise the options discussed in supra 48.2.
Art. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has been reimbursed therefor. Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have acquired by reason thereof. (453a) Art. 547. If the useful improvements can be removed without damage to the principal thing, the possessor in good faith may remove them, unless the person who recovers the possession exercises the option under paragraph 2 of the preceding article. (n) Art. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the possessor in good faith; but he may remove the ornaments with which he has embellished the principal thing if it suffers no injury thereby, and if his successor in the possession does not prefer to refund the amount expended. (454) Art. 549. The possessor in bad faith shall reimburse the fruits received and those which the legitimate possessor could have received, and shall have a right only to the expenses mentioned in paragraph 1 of Article 546 and in Article 443. The expenses incurred in improvements for pure luxury or mere pleasure shall not be refunded to the possessor in bad faith, but he may remove the objects for which such expenses have been incurred, provided that the thing suffers no injury thereby, and that the lawful possessor does not prefer to retain them by paying the value they may have at the time he enters into possession. (455a)
175 176
See Art. 452, NCC. See Art. 546, 1st par., NCC, in relation to Art. 549, NCC.
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92. Right to Necessary, Useful and Ornamental Expenses

[92.1] Kinds of Expenses
The law recognizes three kinds of expenses that possessors of property may have incurred in connection with his possession thereof, namely: (1) necessary expenses;177 (2) useful expenses;178 and (3) expenses for pure luxury or mere pleasure (or ornamental expenses).179 Note that the Civil Code did not dene the concept of these three kinds of expenses but only provide for their effects upon the right of the possessors. The Spanish Commentators, however, described necessary expenses as those made for the preservation of the thing180 or those without which the thing would deteriorate or be lost.181 Our Supreme Court, on the other hand, dened necessary expenses as those incurred not for improvement but for the preservation of the thing and are intended not to increase the value thereof but to prevent it from becoming useless.182 Following this concept, our Court held that expenses incurred in the repair of a house which is almost in ruins in order to preserve it are considered necessary expenses183 while expenses for lling a lot and building a house thereon cannot be considered necessary expenses because they do not in any manner tend to preserve the property.184 The concept of necessary expenses under the Civil Code must have reference to those which are necessary for the preservation of the existence of the thing itself and not to those which are merely for the preservation of the possession of the thing.185 As such, land taxes (real estate taxes) are not considered necessary expenses under the provisions of Article 546 of the New Civil Code because they are not for the preservation of the thing itself but only for the preservation of its possession. Instead, they are regarded as charges which the possessor and owner must bear in proportion to their respective possessions pursuant to the provision of the second paragraph of Article 545.
Art. 546, 1st par., NCC. Arts. 546, 2nd par. and 547, NCC. 179 Arts. 548 and 549, NCC. 180 4 Manresa 258. 181 Scaevola, Comentarios al Codigo Civil, 408. 182 Rivera v. Roman Catholic Archbishop of Manila, 40 Phil. 717. 183 Angeles v. Lozada, 54 Phil. 185. 184 Alburo v. Villanueva, 7 Phil. 277. 185 4 Manresa 271-272.
177 178
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Useful expenses, on the other hand, are those incurred to give greater utility or productivity to the property.186 These expenses increase the value of the thing and result in improvements, called useful improvements.187 Thus, expenses incurred for the construction of a wall surrounding the estate, the construction of an irrigation system and the introduction of improvements in an uncultivated land were classied as useful expenses by our Court.188 Those incurred for a chapel,189 an electric system or an elevator in a building,190 a shpond,191 dining room, kitchen, closets or bathrooms,192 are also considered useful expenses. Ornamental expenses or expenses for pure luxury, as distinguished from useful expenses, are those which do not increase the productiveness of the thing but merely embellish the same. Although expenses for pure luxury also result in improvements (ornament), such improvements, however, are for the convenience of denite possessors only. In other words, the resulting benet or advantage is merely accidental or for the benet only of particular persons. In useful expenses, on the other hand, the resulting benet is essential and absolute which is available to all who may have the thing.
[92.2] Right of Possessors to Necessary Expenses
Whether in good faith or in bad faith, a possessor is entitled to the refund of necessary expenses incurred by him.193 In addition, a possessor in good faith is also entitled to retain the thing until he has been reimbursed therefor.194 Note that this right of retention in relation to necessary expenses is available only to a possessor in good faith.195 A possessor in bad faith has no right of retention.
[92.3] Right of Possessors to Useful Expenses
Only the possessor in good faith is entitled to the refund of useful

II Tolentino, Civil Code, 1992 ed., 294. See Art. 547, NCC. 188 Valenzuela v. Lopez, 51 Phil. 279. 189 Gongon v. Tiangco, (CA) 36 O.G. 822. 190 4 Manresa 242. 191 Rivera v. Roman Catholic Church, supra. 192 Robles v. Lizarraga, 42 Phil. 584. 193 Art. 546, 1st par., NCC. 194 Id. 195 Id.
186 187
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expenses.196 Stated otherwise, a possessor in bad faith is not entitled to the refund of useful expenses. In making the refund, the owner (or the person who has defeated the possessor in good faith in the possession) has the option: (1) to refund the amount of the expenses; or (2) to pay the increase in value which the thing may have acquired by reason of the useful expenses.197 Until the possessor in good faith is reimbursed the useful expenses in the manner mentioned above, he also enjoys the right to retain the property.198 This right of retention will be discussed extensively in infra 92.3.1. The possessor in good faith may, in lieu of reimbursement for the useful expenses, remove the useful improvement but subject to compliance with the following requisites: (1) The removal can be done without damage to the principal thing.199 By damage, it means that which reduces the value of the thing and not simply natural damage resulting from the separation of the accessory and the principal.200 Hence, if only ordinary repairs will be needed by the separation, the separation will be permissible.201 (2) The owner does not choose to appropriate the improvements by refunding to the possessor in good faith the useful expenses in the manner discussed above.202 Stated otherwise, the owner can prevent the possessor in good faith from removing the useful improvements either by paying the possessor in good faith the actual amount of the expenses or the increase in value which the thing may have acquired by reason of the useful expenses. Does a possessor in bad faith have the right to remove useful improvements? The answer is clearly in the negative. Recognized authorities on the subject are agreed on this point.203 Under Article 547
Art. 546, 2nd par., NCC. Id. 198 Id. 199 Art. 547, NCC. 200 II Caguioa, Civil Code, 1966 ed., 202. 201 Id., citing 4 Manresa 260. 202 Art. 547, NCC. 203 MWSS v. CA, 143 SCRA 623, citing Paras (1984) Vol. II, pp. 436-437; Padilla (1972), Vol. II, pp. 457-458; Caguioa (1966), Vol. II, p. 201; Jurado (1981), Civil Law Reviewer, p. 250; Tolentino (1972), Vol. II, p. 547.
196 197
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of the New Civil Code, only a possessor in good faith may remove useful improvements if this can be done without damage to the principal thing and if the person who recovers the possession does not exercise the option of reimbursing the useful expenses.204
MWSS v. Court of Appeals 143 SCRA 623 (1986) The City of Dagupan (hereinafter referred to as the CITY) led a complaint against the former National Waterworks and Sewerage Authority (hereinafter referred to as the NAWASA), now the Metropolitan Waterworks and Sewerage System (hereinafter referred to as MWSS), for recovery of the ownership and possession of the Dagupan Waterworks System. NAWASA interposed as one of its special defenses R.A. No. 1383 which vested upon it the ownership, possession and control of all waterworks systems throughout the Philippines and as one of its counterclaims the reimbursement of the expenses it had incurred for necessary and useful improvements amounting to P255,000.00. Judgment was rendered by the trial court in favor of the CITY on the basis of a stipulation of facts. The trial court found NAWASA to be a possessor in bad faith and hence, not entitled to the reimbursement claimed by it. NAWASA appealed to the then Court of Appeals and argued in its lone assignment of error that the CITY should have been held liable for the amortization of the balance of the loan secured by NAWASA for the improvement of the Dagupan Waterworks System. The appellate court afrmed the judgment of the trial court. MWSS, successor-in-interest of the NAWASA, appealed to this Court raising the sole issue of whether or not it has the right to remove all the useful improvements introduced by NAWASA to the Dagupan Waterworks System, notwithstanding the fact that NAWASA was found to be a possessor in bad faith. In support of its claim for removal of said useful improvements, MWSS argues that the pertinent laws on the subject, particularly Articles 546, 547 and 549 of the Civil Code of the Philippines, do not denitely settle the question of whether a possessor in bad faith has the right to remove useful improvements. The Supreme Court held xxx Does a possessor in bad faith have the right to remove useful improvements? The answer is clearly in the negative. Recognized authorities on the subject are agreed on this point. 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, loses what is built, planted or sown without right to indemnity. As
204
Id.
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a builder in bad faith, NAWASA lost whatever useful improvements it had made without right to indemnity (Santos v. Mojica, Jan. 31, 1969, 26 SCRA 703). Moreover, under Article 546 of said code, only a possessor in good faith shall be refunded for useful expenses with the right of retention until reimbursed; and under Article 547 thereof, only a possessor in good faith may remove useful improvements if this can be done without damage to the principal thing and if the person who recovers the possession does not exercise the option of reimbursing the useful expenses. The right given a possessor in bad faith is to remove improvements applies only to improvements for pure luxury or mere pleasure, provided the thing suffers no injury thereby and the lawful possessor does not prefer to retain them by paying the value they have at the time he enters into possession (Article 549, Id.). [92.3.1] Right of Retention
As discussed in supra 92.2 and 92.3, a possessor in good faith is entitled to retain the thing until he has been reimbursed of the necessary or useful expenses he incurred. This right of retention has been considered as one of the conglomerate of measures devised by the law for the protection of the possessor in good faith.205 Its object is to guarantee the reimbursement of the expenses, such as those for the preservation of the property, or for the enhancement of its utility or productivity.206 It permits the actual possessor to remain in possession while he has not been reimbursed by the person who defeated him in the possession for those necessary expenses and useful improvements made by him on the thing possessed.207 Accordingly, a possessor (or builder) in good faith cannot be compelled to pay rentals during the period of retention208 nor be disturbed in his possession by ordering him to vacate.209 In addition, the owner of the land is prohibited from offsetting or compensating the necessary and useful expenses with the fruits received by the builder-possessor in good faith. Otherwise, the security provided by law would be impaired. This is so because
Ortiz v. Cayanan, 92 SCRA 146 (1979); Nuguid v. CA, 452 SCRA 243 (2005). Id. 207 Id. 208 Nuguid v. CA, supra., citing San Diego v. Hon. Montesa, 6 SCRA 208, 210 (1962). 209 Id.
205 206
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the right to the expenses and the right to the fruits both pertain to the possessor, making compensation juridically impossible; and one cannot be used to reduce the other.210 Pending reimbursement of the amount due him, the possessor in good faith is likewise entitled to have his right recorded in the certicate of title as an encumbrance on the property so that whoever may get the property will be forewarned of his right to such retention and refund.211
[92.3.2] How to Determine Value of Useful Improvements
Article 546 does not specically state how the value of the useful improvements should be determined. However, this problem was categorically resolved by the Supreme Court in the case of Pecson v. Court of Appeals212 where it was held that the current market value of the improvements should be made the basis of reimbursement. In arriving at this ruling, the Court took notice of the objective of the article which is to administer justice between the parties involved. Otherwise stated, the said provision was formulated in trying to adjust the rights of the owner and possessor in good faith of a piece of land, to administer complete justice to both of them in such a way as neither one nor the other may enrich himself of that which does not belong to him.213
[92.4] Right of Possessors to Expenses For Pure Luxury
Whether in good faith or in bad faith, a possessor is not entitled to a refund of the expenses incurred by him for pure luxury or mere pleasure, called ornamental expenses.214 Both kinds of possessors are entitled, however, to a right of removal of the ornaments with which they embellished the principal thing provided that such principal will suffer no injury.215 If the owner, however, exercises his option to retain possession of the ornaments by reimbursing the value thereof to the possessor, the latters right of removal may not be exercised. In determining the extent of the value of the reimbursement, the good faith or bad faith of the
Id. Atkins Kroll & Co. v. Domingo, 46 Phil. 362. 212 244 SCRA 407 (1995). 213 Rivera v. Roman Catholic Archbishop of Manila, 40 Phil. 717 (1920), cited in Pecson v. CA, supra. 214 Arts. 548 and 549, NCC. 215 Id.
210 211
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possessor shall be taken into consideration since the amount of such reimbursement shall vary depending on the possessors good faith or bad faith. If the possessor is in good faith, the extent of the refund shall be the actual amount expended.216 If the possessor is in bad faith, on the other hand, the extent of the refund shall be limited to the value of the ornament at the time the owner enters into the possession of the property217 irrespective of the amount actually spent by the possessor in bad faith.
[92.5] Rule on Improvement Caused by Nature
The foregoing discussion in connection with the rights of possessors to improvements has reference to improvements caused by the will of the possessor, such as trees planted by them or buildings constructed by them. If the improvements, however, are caused by nature or by time, the same shall inure to the owner following the law on accession, without need of indemnifying the possessor in good faith. This is conrmed by Article 551 of the New Civil Code, which states: Art. 551. Improvements caused by nature or time shall always insure to the benet of the person who has succeeded in recovering possession. (456)
[92.6] Improvements Which Ceased To Exist
In connection with the discussion in supra 92.3, a possessor in good faith is entitled to a refund of the useful expenses incurred by him only if the useful improvement is still existing at the time of the recovery of the property by the legitimate possessor. If the improvements made by the possessor in good faith have already ceased to exist at the time the legitimate possessor recovers possession, the latter is in no way beneted. Hence, he cannot be obliged to refund the expenses incurred by the possessor. This rule is embodied in Article 553 of the New Civil Code: Art. 553. One who recovers possession shall not be obliged to pay for improvements which have ceased to exist at the time he takes possession of the thing. (458)
216 217
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Art. 550. The costs of litigation over the property shall be borne by every possessor. (n) Art. 551. Improvements caused by nature or time shall always insure to the benet of the person who has succeeded in recovering possession. (456) Art. 552. A possessor in good faith shall not be liable for the deterioration or loss of the thing possessed, except in cases in which it is proved that he has acted with fraudulent intent or negligence, after the judicial summons. A possessor in bad faith shall be liable for deterioration or loss in every case, even if caused by a fortuitous event. (457a) Art. 553. One who recovers possession shall not be obliged to pay for improvements which have ceased to exist at the time he takes possession of the thing. (458)
97. Liability of Possessors for Loss or Deterioration Will a possessor be liable to the owner for any deterioration or loss suffered by the thing? This question is answered by Article 552 of the New Civil Code. Pursuant to this article, the possessors liability for loss or deterioration shall depend on his good faith or bad faith. If the possessor is in good faith, he is not liable at all for the deterioration or loss of the thing possessed. A possessor in bad faith, on the other hand, is liable for any deterioration or loss of the thing in every case even when the same is caused by fortuitous event. As discussed in supra 91.2, every possessor in good faith, however, becomes a possessor in bad faith from the moment he becomes aware that what he believed to be true is not so. If the good faith of the possessor turns into bad faith upon his becoming aware of the existence of defects in his title, will he likewise be liable for any deterioration or loss of the thing possessed by reason of fortuitous event? Article 552 answers this question in the negative. We should distinguish therefore between a situation where the possessor is originally in bad faith (or in bad faith from the beginning of his possession) from a situation where the possessor is originally in good faith but becomes in bad faith upon learning of the defects in his title. In the rst situation, the possessor is liable even for deterioration or losses caused by fortuitous event. In the second, the possessor is not so liable. The possessor who is originally in good faith but becomes in bad faith upon the service of the judicial summons on him shall be liable for any deterioration or loss of the thing
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possessed only if the same is caused by his negligence or fraudulent acts.

Art. 554. A present possessor who shows his possession at some previous time, is presumed to have held possession also during the intermediate period, in the absence of proof to the contrary. (459)
98. Presumption of Continuity of Possession If the present possessor can show proof that he was also in possession of the property at some previous time, his possession will be presumed to be continuous covering even the intermediate period.218 This presumption, however, is merely disputable and may be rebutted by proof to the contrary.219 If the present possessor, however, succeeds the previous possessor by hereditary title, his possession is also deemed continuous and without any interruption from the moment of the death of the decedent.220 Upon acceptance of the inheritance, the possessor shall be deemed to have possessed the property continuously and this rule will apply even if he was not in actual possession of the property at the time of the death of the decedent and prior to his acceptance. In other words, if the possession is transmitted by hereditary title, the presumption of continuity of possession is one which is conclusive and may not be overthrown by proof to the contrary.
Art. 555. A possessor may lose his possession: (1) By the abandonment of the thing;
(2) By an assignment made to another either by onerous or gratuitous title; (3) By the destruction or total loss of the thing, or because it goes out of commerce; (4) By the possession of another, subject to the provisions of Article 537, if the new possession has lasted longer than one year. But the real right of possession is not lost till after the lapse of ten years. (460a)
Art. 554, NCC. Id. 220 Art. 553, NCC.

218 219
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99. Modes of Losing Possession Article 555 of the New Civil Code enumerates the causes or modes by which possession may be lost. From the article, it can be inferred that possession may be lost either voluntarily or by reason of the will of the possessor or involuntarily or by reason independent of the will of the possessor. Paragraphs 1 and 2 of Article 555 provides for voluntary modes of losing possession while paragraphs 3 and 4 speak of involuntary modes.
[99.1] Abandonment
He who has a right may renounce it. This act by which thing is voluntary renounced constitutes an abandonment.221 However, for a property to be considered abandoned under the law, it is necessary that the spes recuperandi (hope of recovery or recapture) is gone and the animus revertendi (intent to recover) is nally given up.222 Certainly, the possessor of a thing cannot be held to have abandoned the same until at least he has some knowledge of the loss of its possession or of the loss of the thing.223 Hence, there is no real intention to abandon a property when, as in the case of a shipwreck or a re, things are thrown into the sea or on the highway.224 To be effective, it is necessary that the abandonment be made by a possessor in the concept of an owner.225
US v. Laurente Rey 8 Phil. 500 (1907) In this case, three boxes containing money, amounting to at least 25,000 pesos, were on board the steamer Cantabria. The ship, however, was totally wrecked off the small Island of Mababuy. Defendant Laurente Rey and several others discovered the existence and location of the wrecked steamer and took from the boxes the sum of 15,000 pesos. Defendant Rey was later on charged with the crime of robbery. For his defense, defendant Rey contended that the property was abandoned property and therefore, granting that he had taken possession of the same, he was not guilty of the crime of robbery when he appropriated it to his own use. When the case reached the Supreme Court, it
4 Manresa 291, cited in US v. Rey, 8 Phil. 500 (1907). US v. Rey, supra. 223 Id. 224 4 Manresa 291, cited in US v. Rey, supra. 225 4 Manresa, 5th ed., 277.
221 222
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was held that there was no abandonment of the property and that defendant Rey was guilty of the crime of robbery. The Court explained The evidence shows, if it can be believed, that the defendant and his companions entered the wrecked ship and removed therefrom the said money and appropriated the same to his own use in about twenty-four hours after the time of sinking of the said ship. Can one be charged with the abandonment of his property without even knowing that the same has passed out of his possession or has been lost? We are of the opinion, and so hold, that this question must be answered in the negative. Manresa, in his Commentaries upon the provisions of the Civil Code, says (vol. 4, p. 291): He who has a right may renounce it. This act by which thing is voluntary renounced constitutes an abandonment. There is no real intention to abandon a property when, as in the case of a shipwreck or a re, things are thrown into the sea upon the highway. Certainly the owner of the property cannot be held to have abandoned the same until at least he has some knowledge of the loss of its possession or of the loss of the thing. Property cannot be considered abandoned under the law and the possession left vacant for the nder until the spes recuperandi is gone and the animus revertendi is nally given up. (The Ann L. Lockwood, 37 Fed. Rep., 233.) The theory of abandonment on the part of the owners of the money stolen is fully refuted by the fact that some weeks after the wreck of the said ship they sent men to the place of the wreck for the purpose of recovering the property which belonged to them, which was on board the ship at the time of her sinking. The mere fact that cargo is sunk with a ship wrecked at sea by no means deprives the owner of said cargo of his property therein. The owner certainly still had the right to reclaim such property and to recover the same if possible. If it should be recovered by others, the real owner would be entitled to recover its value less the necessary expense of recovering the same and carrying it shore by the most approved appliances for that purpose by others. (Murphy v. Dunham, 38 Fed. Rep., 503.) If the defendant and his companions had recovered the cargo from the sunken ship for the benet of the owners of the same, he might have been entitled to compensation of his labor, but
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when he entered the sunken ship and took therefrom, by force, the property of another before actual abandonment by the owner and appropriated the same to his own use, he was, under the provisions of the Penal Code in force in the Philippine Islands, guilty of the crime of robbery. [99.2] Assignment
Whereas abandonment involves the giving up of possession of a thing absolutely, without reference to any particular person or purpose so that the same may now be appropriated by the next comer or nder, assignment, on the other hand, involves relinquishment of possession in favor of a denite or specied transferee. It therefore involves the transfer of all the rights of the possessor to another person. For assignment to be validly made, it is necessary that the assignor be in the concept of owner and that he has the capacity to alienate.226
[99.3] Destruction or Loss of the Thing
As a mode of losing possession, destruction or loss may either be physical or juridical. Hence, it is understood that a thing is lost when it perishes, or goes out of commerce, or disappears in such a manner that its existence is unknown or cannot be recovered.227 Since the term is also used in a juridical sense, a thing is also considered lost when it is expropriated by the government.228
[99.4] Possession By Another
Under this mode, distinction must be made between possession as a fact (de facto) and possession as a right (de jure). If the possession of another lasts for more than one year, only possession de facto is lost but not the real right of possession (possession de jure).229 Possession de jure, on the other hand, is not lost until after the lapse of ten (10) years.230 Based on the foregoing, the material element that determines the proper action to be led for the recovery of the possession of a real
See 4 Manresa, 5th ed., 277. Art. 1189, par. (2), NCC. 228 4 Manresa, 5th ed., 273. 229 Art. 555(4), NCC. 230 Id.
226 227
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property is the length of time of dispossession. Under the Rules of Court, the remedies of forcible entry and unlawful detainer are granted to a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person.231 These remedies afford the person deprived of the possession to le at any time within one year after such unlawful deprivation or withholding of possession, an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs.232 The basis of that one year period of prescription under the Rules of Court is the fourth paragraph of Article 555 of the New Civil Code which states that possession de facto is lost through anothers possession for a period longer than one year. Thus, if the dispossession has not lasted for more than one year, an ejectment proceeding is proper and the inferior court has jurisdiction.233 On the other hand, if the dispossession lasted for more than one year, the proper action to be led is an accion publiciana234 since the real right of possession (possession de jure) is not lost until after the lapse of ten (10) years. In other words, the right acquired by the person who has been in possession for one year and one day is only the right that the former possessor lost by allowing the year and one day to expire that is the right to maintain an interdictory action (accion interdictal).235 The present possessor, as a consequence, can not be made to answer in an interdictory action. But he can still be made to answer in a plenary action for the recovery of the real right of possession which can be brought within a period of ten (10) years. In relation to the loss of the real right of possession, take note of the discussions under supra 86.1 to 86.3. It has been discussed under said sections of this Book that the legal possession is not affected by
Sec. 1, Rule 70, 1997 Rules of Civil Procedure. Id. 233 Encarnacion v. Amigo, G.R. No. 169793, Sept. 15, 2006. 234 Id. 235 Bishop of Cebu v. Mangaron, G.R. No. L-1748, June 1, 1906.
231 232
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acts which are merely tolerated and those executed clandestinely and without the knowledge of the possessor or through violence as long as there is a possessor who objects thereto. In the aforesaid circumstances, only possession as a fact (possession de facto) is affected but not the real right of possession. As a consequence, the real right of possession may not be lost through any of said means. In paragraph 4 of Article 555, what is lost after the lapse of ten (10) years is possession de jure, not necessarily the ownership of the property. Ownership and possession are distinct concepts. For ownership to be lost through possession by another, it must be in the concept of an owner, public, peaceful and uninterrupted.236 If the possession is in this nature, the same shall ripen into ownership over a real property after the lapse of ten years if coupled with a just title or good faith on the part of the possessor.237 If the possession of this nature last for thirty (30) years, ownership over a real property is also acquired without need of just title or of good faith.238
Art. 556. The possession of movables is not deemed lost so long as they remain under the control of the possessor, even though for the time being he may not know their whereabouts. (461)
100. Rule With Respect to Misplaced (Mislaid) Movables Distinction must be made between movables which have been abandoned and movables which have been misplaced (or mislaid). In the former, the hope of recovery (spes recuperandi) is already gone and the intent to recover (animus revertendi) is already given up, but not so in the latter. When a movable is simply misplaced or mislaid, the possessor does not automatically lose possession because the movable is still deemed remaining under his control even though for the time being he may not know its whereabouts. The rule with respect to possession of movables is that the same is not lost so long as the movables remain under the control of the possessor239 and they will be deemed remaining under his control so long as they are not under the control of another possessor. Hence, if the misplaced movable is already in the possession
Art. 1118, NCC. Art. 1134, NCC. 238 Art. 1137, NCC. 239 Art. 556, NCC.
236 237
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of another its possession is already deemed lost because it is no longer under the control of the possessor.
Art. 557. The possession of immovables and of real rights is not deemed lost, or transferred for purposes of prescription to the prejudice of third persons, except in accordance with the provisions of the Mortgage Law and the Land Registration laws. (462a) Art. 558. Acts relating to possession, executed or agreed to by one who possesses a thing belonging to another as a mere holder to enjoy or keep it, in any character, do not bind or prejudice the owner, unless he gave said holder express authority to do such acts, or raties them subsequently. (463) Art. 559. The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may recover it from the person in possession of the same. If the possessor of a movable lost or of which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor. (464a)
101. Possession of Movables

[101.1] Equivalent to Title
Possession of movables acquired in good faith does not only create a presumption of ownership but it is already equivalent to title. Unlike in the case of immovable property where actual possession under claim of ownership will only create a disputable presumption of ownership240 and that the possessor has a just title,241 the possession of movable property acquired in good faith is already equivalent to a title,242 thus dispensing with further proof.243 In the words of the Court of Appeals, for the purpose of facilitating transactions on movable property, which are usually done without special formalities, Article 559 of the New Civil Code establishes not only a mere presumption in favor of the possessor of the chattel, but an actual right, valid even against the true
See Art. 433, NCC. Art. 541, NCC. 242 Art. 559, 1st par., NCC. 243 EDCA Publishing & Distributing Corp. v. Santos, 184 SCRA 614 (1990).
240 241
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owner except upon proof of loss or illegal deprivation.244 Of course, when Article 559 speaks of title it is not referring to a document but to any juridical act which gives a means to the acquisition of real right. For possession of movables to be considered equivalent to title, the following requisites must be present: (1) the movable property must be acquired in good faith;245 and (2) the possession must be in the concept of owner. As a consequence of this principle, when a movable property is in the possession of one who has acquired it and holds it in good faith, the true owner cannot recover it as a general rule for the title is valid even against him. This is the general rule of irrevindicability.
[101.2] Exceptions to Irrevindicability
Pursuant to Article 559, if the owner has lost a thing, or if he has been unlawfully deprived of it, he has a right to recover it, not only from the nder, thief or robber, but also from third persons who may have acquired it in good faith from such nder, thief or robber.246 The said article establishes two exceptions to the general rule of irrevindicability, to wit, when the owner: (1) has lost the thing, or (2) has been unlawfully deprived thereof. In these cases, the possessor cannot retain the thing as against the owner, who may recover it without paying any indemnity, except when the possessor acquired it in a public sale.247 Otherwise stated, the owner can always recover the movable from the possessor in cases where the same was lost or the owner has been unlawfully deprived thereof. The only difference is that if the movable has been acquired by the possessor in good faith at a public sale, the owner can recover it only upon reimbursement of the price paid by the possessor;248 otherwise, the owner can recover it without paying any indemnity. According to Senator Tolentino, the public sale referred to in Article 559 which entitles the possessor in good faith to reimbursement, is one where the has been public notice of the sale and in which anybody has a right to bid and offer to buy.249
Sotto v. Enage (CA), 43 O.G. 5075. Art. 559, 1st par., NCC. 246 Aznar v. Yapdiangco, 13 SCRA 486 (1965). 247 Id., citing Del Rosario v. Lucena, 8 Phil. 535; Varela v. Finnick, 9 Phil. 482; Varela v. Matute, 9 Phil. 479; Arenas v. Raymundo, 19 Phil. 46. Tolentino, id., Vol. II, p. 261. 248 Art. 559, par. 2, NCC. 249 II Tolentino, Civil Code, 1992 ed., 310.
244 245
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[101.2.1] In Case of Loss
Pursuant to Article 719 of the New Civil Code, if a movable has been lost (not abandoned), the nder does not immediately become its owner because there are rules which are required to be followed. If the nder knows the previous possessor, the movable must be returned to the latter. If the previous possessor is unknown, the nder is required to immediately deposit the movable with the mayor of the city or municipality where the nding has taken place. The mayor is then required to make a public announcement of such nding for two consecutive weeks in a manner he deems t. If after six months, the owner does not appear, the thing found, or its value, shall be awarded to the nder. But if the owner appears on time, he shall be obliged to pay, as a reward to the nder, one-tenth of the sum or of the price of the thing found.250 If the nder does not comply with these procedural requirements and appropriate for himself the movable he found, he shall be guilty of the crime of theft,251 in which case, the owner shall the right to recover the lost movable from him without need of paying any indemnity.252 The same rule shall apply even if the movable is already in the possession of third persons who may have acquired it in good faith from such nder or thief.253
[101.2.2] In Case of Unlawful Deprivation
The phrase unlawfully deprived in Article 559 is susceptible of two meanings. It may be interpreted in a restrictive sense as referring only to cases of theft or robbery. This is the view followed by the French Code254 and adopted by Castan.255 Manresa, on the other hand, is of the view that the phrase comprehends all acts which constitute a crime or an offense and which take away from the owner what belongs to him; all acts of occupation against the will of the possessor and all acts of disposition of the thing made by a person who is not the owner or
Art. 719, NCC. Art. 308, par. (1), RPC. 252 Art. 559, par. 2, NCC. 253 Aznar v. Yapdiangco, 13 SCRA 486 (1965). 254 1 Bonet 234; 2-II Colin & Capitant 947-948. 255 See II Caguioa, Civil Code, 1966 ed., 216.
250 251
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accomplished by his authority.256 In our jurisprudence, it appears that the latter view of Manresa is the one being followed.257 Hence, the phrase unlawfully withheld in Article 559 is not limited to cases of unlawful taking but extends to cases where there has been abuse of condence.
Aznar v. Yapdiangco 13 SCRA 486 (1965) In May, 1959, Teodoro Santos advertised in two metropolitan papers the sale of his Ford Fairlane 500. In the afternoon of May 28, 1959, a certain L. De Dios, claiming to be a nephew of Vicente Marella, went to the Santos residence to answer the ad. However, Teodoro Santos was out during this call and only his son, Ireneo Santos, received and talked with De Dios. The latter told the young Santos that he had come in behalf of his uncle, Vicente Marella, who was interested to buy the advertised car. On being informed of this, Teodoro Santos instructed his son Ireneo to see the said Vicente Marella the following day at his given address. The following day, Ireneo Santos went to the said address. At this meeting, Marella agreed to buy the car for P14,700.00 on the understanding that the price would be paid only after the car had been registered in his name. Pursuant to such condition, Ireneo Santos transferred the registration of the car in the name of Marella even without the payment of the purchased price. When Ireneo Santos turned over to Marella the registration papers and a copy of the deed of sale and demanded for the payment of the purchase price, Marella begged off to be allowed to secure the money from a sister supposedly living in another place. Thereafter, Marella ordered L. De Dios to go to the said sister and suggested that Ireneo Santos go with him. At the same time, Marella requested the registration papers and the deed of sale from Ireneo Santos on the pretext that he would like to show them to his lawyer. Trusting the good faith of Marella, Ireneo handed over the same to the latter and thereupon, in the company of L. De Dios and another unidentied person, proceeded to the alleged house of Marellas sister. At a certain place on Azcarraga Street, Ireneo Santos and L. De Dios alighted from the car and entered a house while their unidentied companion remained in the car. Once inside, L. De Dios asked Ireneo Santos to wait at the sala while he went inside a room. That was the last that Ireneo saw of him. For, after a considerable length of time waiting in vain for De Dios to return, Ireneo went down to discover that neither the car nor their unidentied companion was there anymore. Going back to the house, he inquired from a woman he saw for L. De Dios and he was told that no such name lived or was even known therein. Whereupon, Ireneo
256 257
4 Manresa, 301-302, cited in II Caguioa, Civil Code, 1966 ed., 216. See Cruz v. Pahati, 52 O.G. 3253; Aznar v. Yapdiangco, 13 SCRA 486 (1965).
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Santos rushed to the alleged house of Marella to see the latter. He found the house closed and Marella gone. Finally, he reported the matter to his father who promptly advised the police authorities. On that same day, Marella was able to sell the car in question to Jose B. Aznar for P15,000.00, the latter acting in good and without notice of the defect appertaining to the vendors title. While the car in question was in the possession of Jose B. Aznar and while he was attending to its registration in his name, agents of the Philippine Constabulary seized and conscated the same in consequence of the report to them by Teodoro Santos that the said car was unlawfully taken from him. On the question of whether Teodoro Santos can recover the car from Jose Aznar without need of indemnifying the latter, the Court ruled in the afrmative applying the provisions of Article 559 of the New Civil Code. The Court explained The lower court was correct in applying Article 559 of the Civil Code to the case at bar, for under it, the rule is to the effect that if the owner has lost a thing, or if he has been unlawfully deprived of it, he has a right to recover it, not only from the nder, thief or robber, but also from third persons who may have acquired it in good faith from such nder, thief or robber. The said article establishes two exceptions to the general rule of irrevindicability, to wit, when the owner: (1) has lost the thing, or (2) has been unlawfully deprived thereof. In these cases, the possessor cannot retain the thing as against the owner, who may recover it without paying any indemnity, except when the possessor acquired it in a public sale. (Del Rosario v. Lucena, 8 Phil. 535; Varela v. Finnick, 9 Phil. 482; Varela v. Matute, 9 Phil. 479; Arenas v. Raymundo, 19 Phil. 46. Tolentino, id., Vol. II, p. 261.) In the case of Cruz v. Pahati, et al., 52 O.G. 3053, this Court has already ruled that: Under Article 559 of the new Civil Code, a person illegally deprived of any movable may recover it from the person in possession of the same and the only defense the latter may have is if he has acquired it in good faith at a public sale, in which case, the owner cannot obtain its return without reimbursing the price paid therefor. In the present case, plaintiff has been illegally deprived of his car through the ingenious scheme of defendant B to enable the latter to dispose of it as if he were the owner thereof. Plaintiff, therefore, can still recover possession of the car even if it is in the possession of a third party who had acquired it in good faith from defendant B. The maxim that no man can transfer to another a better title than he had himself obtains in the civil as well as in the common law. (U.S. v. Sotelo, 28 Phil. 147)
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Finally, the plaintiff-appellant here contends that inasmuch as it was the intervenor-appellee who had caused the fraud to be perpetrated by his misplaced condence on Vicente Marella, he, the intervenor-appellee, should be made to suffer the consequences arising therefrom, following the equitable principle to that effect. Sufce it to say in this regard that the right of the owner to recover personal property acquired in good faith by another, is based on his being dispossessed without his consent. The common law principle that where one of two innocent persons must suffer by a fraud perpetrated by another, the law imposes the loss upon the party who, by his misplaced condence, has enabled the fraud to be committed, cannot be applied in a case which is covered by an express provision of the new Civil Code, specically Article 559. Between a common law principle and a statutory provision, the latter must prevail in this jurisdiction. (Cruz v. Pahati, supra) Cruz v. Pahati 52 O.G. 3253 Belizo sold the car in question to plaintiff. Belizo was then a dealer in second hand cars. One year thereafter, Belizo offered the plaintiff to sell the automobile for him claiming to have a buyer for it. Plaintiff agreed. At that time plaintiffs certicate of registration was missing and, upon the suggestion of Belizo, plaintiff wrote a letter addressed to the Motor Section of the Bureau of Public Works for the issuance of a new registration certicate alleging as reason the loss of the one previously issued to him and stating that he was intending to sell his car. This letter was delivered to Belizo on March 3, 1952. He also turned over to Belizo the automobile on the latters pretext that he was going to show it to a prospective buyer. On March 7, 1952, the letter was falsied and converted into an authorized deed of sale in favor of Belizo. Armed with this deed of sale, Belizo succeeded in obtaining a certicate of registration in his name on the same date of March 7, 1952, and also on the same date Belizo sold the car to Felixberto Bulahan who in turn sold it to Renlado Pahati, a second hand dealer. These facts show that the letter was falsied to enable him to sell the car to Bulahan for a valuable consideration. Applying the pertinent legal provisions to the facts of this case, one is inevitably led to the conclusion that plaintiff has a better right to the car in question than defendant Bulahan for it cannot be disputed that plaintiff had been illegally deprived thereof because of the ingenious scheme utilized by Belizo to enable him to dispose of it as if he were the owner thereof. Nor can it be pretended that the conduct of plaintiff in giving Belizo a letter to secure the issuance of a new certicate of registration constitutes a sufcient defense that could preclude recovery because of the undisputed fact that the
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letter was falsied and this fact can be clearly seen by a cursory examination of the document. Counsel for appellee places much reliance on the common law principle that where one of two innocent parties must suffer by a fraud perpetrated by another, the law imposes the loss upon the party who, by his misplaced condence, has enabled the fraud to be committed, and contends that as between plaintiff and Bulahan, the former should bear the loss because of the condence he reposed in Belizo which enabled the latter to commit the falsication. But this principle cannot be applied to this case which is covered by an express provision of our new Civil Code. Between a common law principle and a statutory provision, the latter must undoubtedly prevail in this jurisdiction. [101.2.3] In Case There Is Transfer of Ownership
The meaning of the term unlawful deprivation in Article 559 may not de unduly stretched to cover situations where there is a contract of purchase and sale between two persons and the buyer therein fails to pay the purchase price but nonetheless alienates the thing sold in favor of the present possessor who acted in good faith.258 As a rule, the buyer in a contact of sale acquires ownership of the thing sold upon actual or constructive delivery even if the purchase price has not yet been paid. Since ownership is already transferred to the buyer, he can validly transfer the thing sold to another person. In this case, the original seller cannot be said to have been unlawfully deprived of the thing sold. Hence, Article 559 does not apply. The remedy of the unpaid seller, in this situation, is an ordinary action for collection of sum of money against the buyer, with recovery of damages.
EDCA Publishing & Distributing Corp. v. Santos 184 SCRA 614 (1990) On 5 October 1981, a person identifying himself as Professor Jose Cruz placed an order by telephone with EDCAPublishing and Distributing Corporation for 406 books, payable on delivery. EDCA prepared the corresponding invoice and delivered the books as ordered, for which Cruz issued a personal check covering the purchase price of P8,995.65. On 7 October 1981, Cruz sold 120 of the books to Leonor Santos who, after verifying the sellers ownership from
258 EDCA Publishing & Distributing Corp. v. Santos, 184 SCRA 614 (1990); Asiatic Commercial Corp. v. Ang, Vol. 40, O.G. S. No. 15, p. 102; Tagatac v. Jimenez, Vol. 53, O.G. No. 12, p. 3792.
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the invoice he showed her, paid him P1,700.00. Meanwhile, EDCA having become suspicious over a second order placed by Cruz even before clearing of his rst check, made inquiries with the De la Salle College where he had claimed to be a dean and was informed that there was no such person in its employ. Further verication revealed that Cruz had no more account or deposit with the Philippine Amanah Bank, against which he had drawn the payment check. EDCA then went to the police, which set a trap and arrested Cruz on 7 October 1981. Investigation disclosed his real name as Tomas de la Pea and his sale of 120 of the books he had ordered from EDCA to Leonor Santos (and Gerardo Santos, doing business as Santos Bookstore). On the night of said date 7 October 1981, EDCA sought the assistance of the police in Precinct 5 at the UN Avenue, which forced their way into Santos Bookstore and threatened Leonor Santos with prosecution for buying stolen property. They seized the 120 books without warrant, loading them in a van belonging to EDCA, and thereafter turned them over to EDCA. Protesting this high-handed action, the Santos spouses sued for recovery of the books after demand for their return was rejected by EDCA. A writ of preliminary attachment was issued and EDCA, after initial refusal, nally surrendered the books to the Santos spouses. On the question of whether EDCA was unlawfully deprived of the books sold to the Santos couple, the Supreme Court held The petitioner argues that it was, because the impostor acquired no title to the books that he could have validly transferred to the private respondents. Its reason is that as the payment check bounced for lack of funds, there was a failure of consideration that nullied the contract of sale between it and Cruz. The contract of sale is consensual and is perfected once agreement is reached between the parties on the subject matter and the consideration. According to the Civil Code: Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. xxx xxx xxx Art. 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. Art. 1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price.
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It is clear from the above provisions, particularly the last one quoted, that ownership in the thing sold shall not pass to the buyer until full payment of the purchase only if there is a stipulation to that effect. Otherwise, the rule is that such ownership shall pass from the vendor to the vendee upon the actual or constructive delivery of the thing sold even if the purchase price has not yet been paid. Non-payment only creates a right to demand payment or to rescind the contract, or to criminal prosecution in the case of bouncing checks. But absent the stipulation above noted, delivery of the thing sold will effectively transfer ownership to the buyer who can in turn transfer it to another. In Asiatic Commercial Corporation v. Ang, the plaintiff sold some cosmetics to Francisco Ang, who in turn sold them to Tan Sit Bin. Asiatic not having been paid by Ang, it sued for the recovery of the articles from Tan, who claimed he had validly bought them from Ang, paying for the same in cash. Finding that there was no conspiracy between Tan and Ang to deceive Asiatic the Court of Appeals declared: Yet the defendant invoked Article 464 of the Civil Code providing, among other things that one who has been unlawfully deprived of personal property may recover it from any person possessing it. We do not believe that the plaintiff has been unlawfully deprived of the cartons of Gloco Tonic within the scope of this legal provision. It has voluntarily parted with them pursuant to a contract of purchase and sale. The circumstance that the price was not subsequently paid did not render illegal a transaction which was valid and legal at the beginning. In Tagatac v. Jimenez, the plaintiff sold her car to Feist, who sold it to Sanchez, who sold it to Jimenez. When the payment check issued to Tagatac by Feist was dishonored, the plaintiff sued to recover the vehicle from Jimenez on the ground that she had been unlawfully deprived of it by reason of Feists deception. In ruling for Jimenez, the Court of Appeals held: The point of inquiry is whether plaintiff-appellant Trinidad C. Tagatac has been unlawfully deprived of her car. At rst blush, it would seem that she was unlawfully deprived thereof, considering that she
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was induced to part with it by reason of the chicanery practiced on her by Warner L. Feist. Certainly, swindling, like robbery, is an illegal method of deprivation of property. In a manner of speaking, plaintiff-appellant was illegally deprived of her car, for the way by which Warner L. Feist induced her to part with it is illegal and is punished by law. But does this unlawful deprivation come within the scope of Article 559 of the New Civil Code? xxx xxx xxx . . . The fraud and deceit practiced by Warner L. Feist earmarks this sale as a voidable contract (Article 1390 N.C.C.). Being a voidable contract, it is susceptible of either ratication or annulment. If the contract is ratied, the action to annul it is extinguished (Article 1392, N.C.C.) and the contract is cleansed from all its defects (Article 1396, N.C.C.); if the contract is annulled, the contracting parties are restored to their respective situations before the contract and mutual restitution follows as a consequence (Article 1398, N.C.C.). However, as long as no action is taken by the party entitled, either that of annulment or of ratication, the contract of sale remains valid and binding. When plaintiff-appellant Trinidad C. Tagatac delivered the car to Feist by virtue of said voidable contract of sale, the title to the car passed to Feist. Of course, the title that Feist acquired was defective and voidable. Nevertheless, at the time he sold the car to Felix Sanchez, his title thereto had not been avoided and he therefore conferred a good title on the latter, provided he bought the car in good faith, for value and without notice of the defect in Feists title (Article 1506, N.C.C.). There being no proof on record that Felix Sanchez acted in bad faith, it is safe to assume that he acted in good faith. The above rulings are sound doctrine and reect our own interpretation of Article 559 as applied to the case before us. Actual delivery of the books having been made, Cruz acquired ownership over the books which he could then validly transfer to the private respondents. The fact that he had not yet
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paid for them to EDCA was a matter between him and EDCA and did not impair the title acquired by the private respondents to the books. One may well imagine the adverse consequences if the phrase unlawfully deprived were to be interpreted in the manner suggested by the petitioner. A person relying on the sellers title who buys a movable property from him would have to surrender it to another person claiming to be the original owner who had not yet been paid the purchase price therefor. The buyer in the second sale would be left holding the bag, so to speak, and would be compelled to return the thing bought by him in good faith without even the right to reimbursement of the amount he had paid for it. It bears repeating that in the case before us, Leonor Santos took care to ascertain rst that the books belonged to Cruz before she agreed to purchase them. The EDCA invoice Cruz showed her assured her that the books had been paid for on delivery. By contrast, EDCA was less than cautious in fact, too trusting in dealing with the impostor. Although it had never transacted with him before, it readily delivered the books he had ordered (by telephone) and as readily accepted his personal check in payment. It did not verify his identity although it was easy enough to do this. It did not wait to clear the check of this unknown drawer. Worse, it indicated in the sales invoice issued to him, by the printed terms thereon, that the books had been paid for on delivery, thereby vesting ownership in the buyer. Surely, the private respondent did not have to go beyond that invoice to satisfy herself that the books being offered for sale by Cruz belonged to him; yet she did. Although the title of Cruz was presumed under Article 559 by his mere possession of the books, these being movable property, Leonor Santos nevertheless demanded more proof before deciding to buy them. [101.3] Cases Where There Is No Recovery
There are cases where the owner may no longer recover the movable property even if he has lost the same or he has been unlawfully deprived thereof. In the following cases, the owner of a movable property who has lost it or has been unlawfully deprived of it may no longer recover the thing from the possessor: (1) If the possessor acquired the thing at a merchants store, or
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in fairs, or in markets in accordance with the Code of Commerce and special laws;259 (2) Where the possessor acquired the thing by sale under statutory power of sale or under the order of a court of competent jurisdiction;260 (3) When the possessor is a holder in due course of a negotiable document of title to goods261 or where the owner is barred by the principle of negotiable instruments;262 (4) Where the owner is barred by reason of his own acts or neglect from denying the sellers title;263 and (5) Where the owner can no longer recover the thing from the possessor by reason of prescription.264
Art. 560. Wild animals are possessed only while they are under ones control; domesticated or tamed animals are considered domestic or tame, if they retain the habit of returning to the premises of the possessor. (465) Art. 561. One who recovers, according to law, possession unjustly lost, shall be deemed for all purposes which may redound to his benet, to have enjoyed it without interruption. (466)
102. Possession of Animals

[102.1] Kinds of Animals Under the Code
From the provisions of Articles 560 of the New Civil Code, in relation to Article 716, it may be inferred that there are three kinds of animals: (1) wild, (2) domesticated or tamed, and (3) domestic or tame. Wild animals are those which are found in their natural freedom, such as wild boars and horses roaming the forest. Domesticated or tamed animals, on the other hand, are those which were formerly wild but which have been subdued and retained the habit of returning to the premises of the possessor or owner.265 Domestic or tame animals are those which are born or reared under the control and care of man.
Art. 1505, No. 3, NCC; Art. 1132, par. 3, NCC. Art. 1505, No. 2, NCC. 261 Art. 1518, NCC. 262 Sec. 57, N.I.L, Act No. 2031. 263 Art. 1505, NCC. 264 Art. 1132, NCC. 265 Art. 560, NCC.
259 260
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[102.2] When Possession Is Considered Lost
Pursuant to the rule declared in Article 560, wild animals are considered possessed only while they are under ones control. Once they recover their natural freedom or once they are restored to their original state of being free, they ceased to be under ones possession. As a consequence, they immediately regain their status of being res nullius and may thus be acquired by occupation. In the case of domesticated animals, it will be regarded as such so long as they retain the habit of returning to the premises of the possessor. Once they lose that habit, they cease to be domesticated and revert back to their original status of being wild. As a consequence, such animals re-acquire its original status of being res nullius and may thus be acquired by occupation. However, so long as the animals retain the habit of returning to the premises of the possessor, the possession thereof is not immediately lost by the simple fact that the animals are no longer under the control of the possessor. Pursuant to the provision of Article 716, the possessor or owner of domesticated animals has a period of twenty (20) days counted from the occupation by another person within which to reclaim them. After the expiration of this period, the animals can no longer be recovered from its present possessor. The rule stated in Article 716 nds application only to domesticated or tamed animals or those which were formerly wild but retained the habit of returning to the premises of the possessor or owner. The article does not apply to domestic or tame animals. In the case of the latter, they are considered as personal property and are, therefore, subject to the rules governing any personal property. Hence, the discussions in relation to possession of movables are applicable to domestic or tame animals. If they are lost, the owners, as a rule, can recover them from the present possessors without need of indemnifying the latter. They are not subject to occupation unless there has been abandonment but they can be acquired by another person through acquisitive prescription the period of prescription being four years if the possessor is in good faith or eight years if the possessor is in bad faith. oOo
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Title VI. USUFRUCT

Chapter 1 USUFRUCT IN GENERAL
Art. 562. Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides. (467)
103. Usufruct in General

[103.1] Concept
Usufruct is a real right, of a temporary character, which authorizes the holder to enjoy all the utilities which result from the normal exploitation of the property of another in accordance with its destination and which imposes the obligation of restoring at the time specied either the thing itself or in special cases its equivalent.1 The holder of the usufruct is known as the usufructuary.
[103.1.1] Usufruct Is A Real Right
De Buen denes the concept of a real right as one which authorizes the holder to derive from a thing certain economic advantages, within the limits of its possibilities, and which can be enforced against all.2 As dened in Article 562 of the New Civil Code, usufruct gives a right to the enjoyment of the property of another and it includes both the jus utendi and the jus fruendi.3 It is, therefore, a real right and in the nature of an encumbrance upon anothers property which does not suppose a disintegration of ownership.
De Buen, Derecho Comun, 3rd ed., Vol. 1, 255. Id., at 139. 3 See Eleizegui v. Manila Lawn Tennis Club, 2 Phil. 309.
1 2
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[103.1.2] Temporary Character
Unlike ownership which is generally perpetual in that it is not usually limited by time and may last as long as the thing exists,4 usufruct is of a temporary character5 since the right is extinguished upon expiration of the period for which it was constituted6 or upon the death of the usufructuary,7 as a rule.
[103.1.3] Entitles Holder to Jus Utendi and Jus Fruendi
The holder of the right of usufruct, called the usufructuary, is entitled to exercise the right to enjoy the property (jus utendi)8 and the right to receive the fruits thereof (jus fruendi).9 In usufruct, the usufructuary becomes entitled to all the natural, industrial and civil fruits of the property in usufruct10 even in the absence of an agreement to that effect, except when there is a different agreement between the parties.11 On this score, usufruct differs from commodatum. In commodatum, while the bailee (borrower) acquires the right to use the property,12 he does not ordinarily acquire the right to make use of the fruits of the thing loaned,13 unless the same is expressly stipulated or agreed upon.14
[103.1.4] Property of Another
Usufruct is a real right over anothers property. Hence, it is a jus in re aliena. As such, usufruct serves as a limitation upon the owners right of ownership.
[103.1.5] Obligation to Preserve Form and Substance
While the usufructuary is entitled to enjoy and use the property in usufruct, he is, ordinarily, obliged to preserve its form and substance.15
2 Castan, 8th ed., 93-95. De Buen, Derecho Comun, 3rd ed., Vol. 1, 255. 6 Art. 603(2), NCC. 7 Art. 603(1), NCC. 8 Art. 562, NCC. 9 Art. 566, NCC. 10 Id. 11 See 4 Manresa, 5th ed., 340. 12 Art. 1935, NCC. 13 Id. 14 Art. 1940, NCC. 15 Art. 562, NCC.
4 5
PROPERTY, OWNERSHIP, AND ITS MODIFICATION USUFRUCT Usufruct in General
469
This obligation is not, however, an indispensable requirement for the constitution of usufruct since the law or the title constituting the usufruct may provide otherwise.16 In the following instances, which constitute as deviations from the rule, the usufructuary is not obliged to preserve the form and substance of the thing in usufruct: (1) (2) When the law or the title creating the usufruct provides that the usufructuary is not so obliged;17 When the usufruct includes things which, without being consumed, gradually deteriorate through wear and tear;18 and When the usufruct includes things which cannot be used without being consumed.19
(3)
What is meant by form and substance? Substance, according to some commentators, refers to the matter of the thing, the integral elements that compose it; and form refers to the extrinsic characteristics of the same, those that make it apt and adequate for the use, destination and particular purpose to which the owner intends it.20 According to Castan, the absolute prohibition against destroying or consuming the thing extends to those acts which destroy or alter certain conditions of the thing, which though not substantial have been taken into consideration as essential when the usufruct was constituted. And with respect to form, the usufructuary is prohibited from altering the thing to its prejudice.21 However, the following alterations are not within the purview of the prohibition: (1) (2) When the improvement can be removed without damage to the property at the end of the usufruct; When although the improvement cannot be removed it will not cause the successor in the use of the thing to spend
Id. Id. 18 Art. 573, NCC. 19 Art. 574, NCC. 20 See 4 Manresa, 6th ed., 403. 21 2 Castan, 9th ed., 486-487.
16 17
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considerable expenses or attention in its preservation or exploitation considering the circumstances of the case; and (3) When although the alteration may be burdensome to the successor in the use of the property, the usufructuary guarantess that he will restore thing to its original state.22
Art. 563. Usufruct is constituted by law, by the will of private persons expressed in acts inter vivos or in a last will and testament, and by prescription. (468) Art. 564. Usufruct may be constituted on the whole or a part of the fruits of the thing, in favor of one more persons, simultaneously or successively, and in every case from or to a certain day, purely or conditionally. It may also be constituted on a right, provided it is not strictly personal or intransmissible. (469) Art. 565. The rights and obligations of the usufructuary shall be those provided in the title constituting the usufruct; in default of such title, or in case it is decient, the provisions contained in the two following Chapters shall be observed. (470)
104. Constitution of Usufruct

[104.1] Manner of Creation
Contract is only one of the ways of creating a usufruct. Pursuant to Article 563 of the New Civil Code, a usufruct may be created through any of the following modes: (1) By law. A usufruct that is constituted by law is called legal usufruct. An example of this is the usufruct of the parents over the property of their minor children living in their custody and under their parental authority under the provisions of Article 226 of the Family Code. (2) By the will of private persons expressed in acts inter vivos, such as contracts and donations, or expressed in a last will and testament. A usufruct which is created through this manner is called voluntary usufruct. In this kind of usufruct, it is necessary that the usufruct be constituted by the owner of the property.
22
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION USUFRUCT Usufruct in General
471
(3) By prescription. In this case, the usufruct is called a mixed usufruct.

[104.2] Other Classications of Usufruct
(1) Total and partial A usufruct may be constituted on the whole (total) or part (partial) of a thing.23 (2) Simple and multiple A usufruct may be constituted in favor of one person, in which case, it is called a simple usufruct; or it may be constituted in favor of two or more persons, in which case, it is called a multiple usufruct. A multiple usufruct, in turn, may either be simultaneous or successive. In the former (simultaneous), all the persons in whose favor the usufruct is constituted are to enjoy the usufruct at the same time. In the latter (successive), they will enjoy the usufruct one after another.24 (3) Pure, with a condition or with a period A usufruct may be constituted from or to a certain day (with a period), purely or conditionally.25 (4) Proper (normal) and improper (abnormal) A usufruct is proper or normal when it is constituted over a non-consumable thing; it is improper or abnormal (quasi-usufruct in Roman Law) when it is constituted over a consumable thing.26 The usufruct mentioned in Article 574 of the New Civil Code Art. 574. Whenever the usufruct includes things which cannot be used without being consumed, the usufructuary shall have the right to make use of them under the obligation of paying their appraised value at the termination of the usufruct, if they were appraised when delivered. In case they were not appraised, he shall have the right to return the same quantity and quality, or pay their current price at the time the usufruct ceases. (482)
See Art. 564, NCC. Id. 25 Id. 26 2 Castan, 9th ed., 492-494.
23 24
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PROPERTY
which involves consumable things, is an example of an abnormal usufruct. This kind of usufruct deviates from the normal in that: (1) the usufructuary is not obliged to preserve the form and substance of the thing subject matter of the usufruct since the thing cannot be used in a manner appropriate to its nature without it being consumed; and consequently, (2) the usufructuary does not have the obligation to return the very same thing upon the termination of the usufruct. In this case, the obligation of the usufructuary is to deliver, at the termination of the usufruct, the appraised value of the thing, if the same has been appraised, and, if there has been no appraisal, he may return the same quantity and quality as the thing given him or pay their current price at the termination of the usufruct. The usufruct mentioned in Article 573 of the New Civil Code Art. 573. Whenever the usufruct includes things which, without being consumed, gradually deteriorate through wear and tear, the usufructuary shall have the right to make use thereof in accordance with the purpose for which they are intended, and shall not be obliged to return them at the termination of the usufruct except in their condition at that time; but he shall be obliged to indemnify the owner for any deterioration they may have suffered by reason of his fraud or negligence. (481) which involves things which are non-consumable but gradually deteriorates through wear and tear, is another example of an abnormal usufruct. This kind of usufruct deviates from the normal in that the usufructuary is not obliged to preserve the form and substance of the thing since he may return it, at the expiration of the usufruct, in the condition which it may be found without any obligation to reimburse the owner for the deterioration of the object. However, if the thing suffers deterioration by reason of the usufructuarys fraud or negligence, he shall be liable to the owner.
[104.3] Object of Usufruct
When Article 562 of the New Civil Code declares that the usufructuary is entitled to enjoy the property of another, the property being referred to may either be a real property or a personal one. In addition, Article 564 of the New Civil Code claries that a usufruct may
PROPERTY, OWNERSHIP, AND ITS MODIFICATION USUFRUCT Rights of the Usufructuary
473
likewise be constituted upon a right. Hence, a usufruct may fall upon a corporeal thing or a right, whether real or personal. With respect to rights, however, it is necessary that the following requisites be satised: (1) (2) It must not be strictly personal;27 It must not be intransmissible;28 and
(3) It must have its own independent existence.29 Hence, a servitude cannot be the object of usufruct because it has no existence independent of the tenements.30 Chapter 2 RIGHTS OF THE USUFRUCTUARY
Art. 566. The usufructuary shall be entitled to all the natural, industrial and civil fruits of the property in usufruct. With respect to hidden treasure which may be found on the land or tenement, he shall be considered a stranger. (471) Art. 567. Natural or industrial fruits growing at the time the usufruct begins, belong to the usufructuary. Those growing at the time the usufruct terminates, belong to the owner. In the preceding cases, the usufructuary, at the beginning of the usufruct, has no obligation to refund to the owner any expenses incurred; but the owner shall be obliged to reimburse at the termination of the usufruct, from the proceeds of the growing fruits, the ordinary expenses of cultivation, for seed, and other similar expenses incurred by the usufructuary. The provisions of this article shall not prejudice the rights of third persons, acquired either at the beginning or at the termination of the usufruct. (472) Art. 568. If the usufructuary has leased the lands or tenements given in usufruct, and the usufruct should expire before the termination of the lease, he or his heirs and successors shall receive only the proportionate share of the rent that must be paid by the lessee. (473)
Art. 564, NCC. Id. 29 II Tolentino, Civil Code, 1992 ed., 318. 30 Id., citing 2 Valverde 412.
27 28
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PROPERTY
Art. 569. Civil fruits are deemed to accrue daily, and belong to the usufructuary in proportion to the time the usufruct may last. (474) Art. 570. Whenever a usufruct is constituted on the right to receive a rent or periodical pension, whether in money or in fruits, or in the interest on bonds or securities payable to bearer, each payment due shall be considered as the proceeds or fruits of such right. Whenever it consists in the enjoyment of benets accruing from a participation in any industrial or commercial enterprise, the date of the distribution of which is not xed, such benets shall have the same character. In either case they shall be distributed as civil fruits, and shall be applied in the manner prescribed in the preceding article. (475) Art. 571. The usufructuary shall have the right to enjoy any increase which the thing in usufruct may acquire through accession, the servitudes established in its favor, and, in general, all the benets inherent therein. (479) Art. 572. The usufructuary may personally enjoy the thing in usufruct, lease it to another, or alienate his right of usufruct, even by a gratuitous title; but all the contracts he may enter into as such usufructuary shall terminate upon the expiration of the usufruct, saving leases of rural lands, which shall be considered as subsisting during the agricultural year. (480) Art. 573. Whenever the usufruct includes things which, without being consumed, gradually deteriorate through wear and tear, the usufructuary shall have the right to make use thereof in accordance with the purpose for which they are intended, and shall not be obliged to return them at the termination of the usufruct except in their condition at that time, but he shall be obliged to indemnify the owner for any deterioration they may have suffered by reason of his fraud or negligence. (481) Art. 574. Whenever the usufruct includes things which cannot be used without being consumed, the usufructuary shall have the right to make use of them under the obligation of paying their appraised value at the termination of the usufruct, if they were appraised when delivered. In case they were not appraised, he shall have the right to return the same quantity and quality, or pay their current price at the time the usufruct ceases. (482) Art. 575. The usufructuary of fruit-bearing trees and shrubs may make use of the dead trunks, and even of those cut off or uprooted by accident, under the obligation to replace them with new plants. (483a) Art. 576. If in consequence of a calamity or extraordinary event, the trees or shrubs shall have disappeared in such considerable number that it would not be possible or it would be too burdensome to replace them,
475
the usufructuary may leave the dead, fallen or uprooted trunks at the disposal of the owner, and demand that the latter remove them and clear the land. (484a) Art. 577. The usufructuary of woodland may enjoy all the benets which it may produce according to its nature. If the woodland is a copse or consists of timber for building, the usufructuary may do such ordinary cutting or felling as the owner was in the habit of doing, and in default of this, he may do so in accordance with the custom of the place, as to the manner, amount and season. In any case the felling or cutting of trees shall be made in such manner as not to prejudice the preservation of the land. In nurseries, the usufructuary may make the necessary thinnings in order that the remaining trees may properly grow. With the exception of the provisions of the preceding paragraphs, the usufructuary cannot cut down trees unless it be to restore or improve some of the things in usufruct, and in such case he shall rst inform the owner of the necessity for the work. (485) Art. 578. The usufructuary of an action to recover real property or a real right, or any movable property, has the right to bring the action and to oblige the owner thereof to give him the authority for this purpose and to furnish him whatever proof he may have. If in consequence of the enforcement of the action he acquires the thing claimed, the usufruct shall be limited to the fruits, the dominion remaining with the owner. (486) Art. 579. The usufructuary may make on the property held in usufruct such useful improvements or expenses for mere pleasure as he may deem proper, provided he does not alter its form or substance; but he shall have no right to be indemnied therefor. He may, however, remove such improvements, should it be possible to do so without damage to the property. (487) Art. 580. The usufructuary may set off the improvements he may have made on the property against any damage to the same. (488) Art. 581. The owner of property the usufruct of which is held by another, may alienate it, but he cannot alter its form or substance or do anything thereon which may be prejudicial to the usufructuary. (489) Art. 582. The usufructuary of a part of a thing held in common shall exercise all the rights pertaining to the owner thereof with respect to the administration and the collection of fruits or interest. Should the co-ownership cease by reason of the division of the thing held in common, the usufruct of the part allotted to the co-owner shall belong to the usufructuary. (490)
476
PROPERTY
105. Rights of Usufructuary

[105.1] Rights Included In Usufruct
Usufruct, in essence, is nothing else but simply allowing one to enjoy anothers property.31 It is also dened as the right to enjoy the property of another temporarily, including both the jus utendi and the jus fruendi.32 Since possession is essential to free enjoyment of the property,33 the right to the possession of the property held in usufruct also belongs to the usufructuary, at least during the effectivity of the usufruct. Hence, while the usufruct lasts, the owner of the property held in usufruct is sometimes referred to as the naked or bare owner since he is deprived of some of the more important attributes of ownership. All the foregoing rights can be exercised by the usufructuary even to the exclusion of the underlying real or naked owner. In other words, the usufructuary has the right to enjoy the property, to the same extent as the owner, but only with respect to its use and the receipt of fruits.34
[105.1.1] Extent of Such Rights
The usufructuary has the right to draw from the property all the prots, utilities and advantages which it may produce, provided it be without altering the form and substance of the thing. With respect to the use of the property, the usufructuary is entitled to enjoy the utilities derived from the property provided that it be the result of the normal exploitation of the property in accordance with its purpose or destination. As a consequence (1) The right of enjoyment of the usufructuary extends to all the accessions which the property held in usufruct may acquire, to the servitudes or easements established in favor of such property, as well as to all the benets inherent in the property.35 In these cases, had the owner himself been in the enjoyment of the property, he would be entitled to all such benets. Since such right of enjoyment is transferred to the usufructuary, it follows that the latter is also entitled to enjoy the foregoing benets.
31 Moralidad v. Sps. Pernes, G.R. No. 152809, August 3, 2006, citing Hemedes v. Court of Appeals, 316 SCRA 309 (1999). 32 Id., citing Eleizegui v. Manila Lawn Tennis Club, 2 Phil. 309 (1909). 33 See supra 34.1. 34 See II Tolentino, Civil Code of the Phil., 1992 ed., 321. 35 See Art. 571, NCC.
477
(2) If the usufruct is over a woodland, the usufructuary may cut trees on the land as the owner was in the habit of doing or in accordance with the custom of the place, as to the manner, amount and season.36 He must exercise such right, however, in such manner as not to prejudice the preservation of the land.37 Other than the foregoing, the usufructuary cannot cut down trees unless it be for the purpose of restoring or improving some of the things in usufruct, and in such case he shall rst inform the owner of the necessity for the work.38 (3) In case of usufruct over fruit-bearing trees and shrubs, the usufructuary has the full and unfettered right to gather the fruits from the tree but he does not have the right to cut trees. However, he may make use of the dead trunks, as well as those uprooted by accident, but with the corresponding obligation to replace them with new plants.39 And if in consequence of a calamity or extraordinary event, the trees or shrubs shall have disappeared in such considerable number that it would not be possible or it would be too burdensome to replace them, the usufructuary may leave the dead, fallen or uprooted trunks at the disposal of the owner, and demand that the latter remove them and clear the land.40 (4) If the usufruct is over an action to recover property, be it real or personal, the usufructuary has the right to bring the action and to oblige the owner thereof to give him the authority for such purpose and to furnish him whatever proof the owner may have.41 If the usufructuary succeeds in recovering the property, his right over the property remains that of a usufructuary since the naked ownership over the same is retained by the naked owner.42
[105.1.2] Consequence of Usufructuarys Right of Possession
Since the right of possession (jus possessionis) is one of the rights being enjoyed by the usufructuary, he has the right to lease the property
Art. 577, 2nd par., NCC. Art. 577, 3rd par., NCC. 38 Art. 577, last par., NCC. 39 Art. 575, NCC. 40 Art. 576, NCC. 41 Art. 578, NCC. 42 Id.
36 37
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PROPERTY
held in usufruct to another. After all, in lease, the lessor is not required to be the owner of the property leased since only the use or enjoyment of the thing is transferred. However, such lease is co-terminus with the life of the usufruct and shall terminate upon the expiration of the usufruct, the only exception being the lease of rural lands which shall subsist during the agricultural year despite the termination of the usufruct.43 By virtue of the usufructuarys right of possession over the property held by him in usufruct, he is deemed as a lawful possessor for purposes of applying the provisions of Article 429 of the New Civil Code. As such, he has the right to exclude any person from the enjoyment of the property, including the naked owner himself, and, for such purpose, he may even use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of the property. However, the naked owner of an immovable held in usufruct may, during the existence of the usufruct, enter the property for the purpose of constructing any works, making any improvements or new plantings thereon if the land is rural, provided that such acts must not cause a diminution in the value of the usufruct or prejudice the right of the usufructuary. This right of the owner is expressly recognized in Article 595 of the New Civil Code Art. 595. The owner may construct any works and make any improvements of which the immovable in usufruct is susceptible, or make new plantings thereon if it be rural, provided that such acts do not cause a diminution in the value of the usufruct or prejudice the right of the usufructuary. (503)
[105.1.3] Usufruct Does Not Include Jus Disponendi
The jus utendi and jus fruendi over the property, including the jus possessidendi, are transferred to the usufructuary.44 However, the owner of the property maintains the jus disponendi or the power to alienate, encumber, transform and even destroy the same.45 This principle is embodied in Article 581 of the New Civil Code, which provides that
See Art. 572, NCC. Hemedes v. CA, supra. 45 Id.

43 44
479
the owner of property the usufruct of which is held by another may alienate it Art. 581. The owner of property the usufruct of which is held by another, may alienate it, but he cannot alter its form or substance, or do anything thereon which may be prejudicial to the usufructuary. (489) Hence, there is no doubt that the owner may validly mortgage the property in favor of a third person.46 In such a case, the usufructuary shall not be obliged to pay the debt of the mortgagor, and should the immovable be attached or sold judicially for the payment of the debt, the owner shall be liable to the usufructuary for whatever the latter may lose by reason thereof.47 Since the naked owner retains the right to alienate or encumber the property held in usufruct, the fact that the usufructuary right is annotated on the title of the owner-mortgagor prior to the mortgage does not make the mortgagee a mortgagee-in-bad-faith. Such annotation does not impose upon the mortgagee the obligation to investigate the validity of the mortgagors title because the existence of the usufruct does not curtail the right of the owner to alienate or encumber his property.48 While the owner of the property retains the right to alienate or encumber the property held in usufruct by another, he may not exercise such right in a manner that will have an adverse effect upon the usufructuary. In other words, the naked owner may not in any way interfere with the rights of the usufructuary. This principle is conrmed in the above-quoted article, which provides that while the owner may alienate the property held in usufruct he cannot, however, alter its form or substance, or do anything thereon which may be prejudicial to the usufructuary. However, there may be a case where the alienation made by the owner will affect the right of the usufructuary and, that is where the right of usufruct is not registered and a third party acquired the property in good faith without the knowledge of the usufruct and registered his right.49
Id. Art. 600, NCC. 48 See Hemedes v. CA, supra. 49 II Caguioa, Civil Code of the Phil., 1966 ed., 240, citing 4 Manresa, 5th ed., 396.
46 47
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[105.1.4] Rights That May Be Exercised By The Owner
During the existence of the usufruct, the naked owner may still exercise some of his rights as owner with respect to the property held in usufruct subject to the following limitations: (1) that there shall be no alteration of the form or substance of the thing;50 (2) that it shall not be prejudicial nor injurious to the right of the usufructuary;51 and (3) that there shall be no diminution in the value of the usufruct.52 Subject to these limitations, the owner may exercise the following rights: (1) As discussed above, the owner may alienate the property held in usufruct since the owner retains the jus disponendi;53 (2) As discussed above, the owner may mortgage the property held in usufruct since he retains the jus disponendi;54 (3) The owner may construct any works and make any improvements of which the immovable in usufruct is susceptible, or make new plantings thereof if it be rural;55 (4) The owner may, without the consent of the usufructuary, impose a voluntary easement upon the tenement or piece of land held in usufruct56 since easement consists only of a limited use and enjoyment of the thing without possession. However, no perpetual voluntary easement may be established on the property without the consent of both the naked owner and the usufructuary.57 However, the naked owner may not constitute a lease over the property held in usufruct because possession is one of the rights which is transferred to the usufructuary.58 Note that it is the usufructuary who has the right to constitute a lease over the property held in usufruct.59
See Art. 581, NCC. See Arts. 581, 595 and 689. 52 See Art. 595, NCC. 53 See Art. 581, NCC. 54 See Arts. 581 and 600, NCC; see also Hemedes v. CA, supra. 55 Art. 595, NCC. 56 See Art. 689, NCC. 57 See Art. 690, NCC. 58 See discussions in supra 105.1. 59 See Art. 572, NCC.
50 51
481
[105.2] Right to the Fruits [105.2.1] Extent of Right
By way of exception to the rule stated in Article 441 of the New Civil Code that the fruits ordinarily belong to the owner, the usufructuary, as a rule, is entitled to all the natural, industrial and civil fruits of the property in usufruct.60 This right of the usufructuary to receive the entirety of the fruits presupposes that: (1) the usufruct is constituted upon the whole property, otherwise, the usufructuary shall only be entitled to the fruits of that portion over which he has a usufruct; and (2) the parties do not have an agreement to the contrary.61 Following the foregoing rule, the usufructuary is ordinarily entitled to the products and income from the property subject to the usufruct. These income and products are generally considered as fruits under the law. However, when the products of a thing have the tendency to diminish its substance, such as minerals from mines and stones from quarries, they are not regarded as fruits but part of the capital.62 Hence, they do not pertain to the usufructuary. However, if the property has been devoted to the exploitation of such products even before the constitution of the usufruct, such products may be treated as fruits that shall pertain to the usufructuary.63 As it relates to corporate stocks, our Supreme Court has held that a dividend, whether cash or stock, represents surplus prots, and therefore considered as fruits which shall pertain to the usufructuary.64
[105.2.2] Rule as to Pending Natural and Industrial Fruits
Natural or industrial fruits which are still pending or ungathered at the time that the usufruct begins, belong to the usufructuary, and he has no obligation to refund to the owner any expenses incurred by the latter in connection with the cultivation and production of such fruits.65 With respect to natural or industrial fruits which are still pending or ungathered at the time the usufruct terminates, the same shall belong to
Art. 566, NCC. See 4 Manresa, 5th ed., 340. 62 II Tolentino, Civil Code of the Phil., 1992 ed., 322, citing 2-II Colin & Capitant 727. 63 Id. 64 M.M. Barchrach v. Skifert, 87 Phil. 483 (1950). 65 See Art. 567, NCC.
60 61
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the owner of the property but the latter shall be obliged to reimburse the usufructuary the ordinary expenses of cultivation, for seeds and other similar expenses incurred by the usufructuary.66 These rules are without prejudice to any right that a third person may have acquired over the fruits at the beginning or at the termination of the usufruct.67
[105.2.3] Rule as to Civil Fruits
With respect to civil fruits, they are deemed to accrue daily.68 Hence, they shall belong to the usufructuary in proportion to the time the usufruct may last.69 For example, if the usufructuary has leased the property given in usufruct and the usufruct expired before the termination of the lease, the usufructuary or his heirs are entitled to receive the rents for such period which coincides with his usufruct.70 Upon the termination of the usufruct, the lease entered into by the usufructuary also terminates71 unless the owner decides to continue with the same, in which case, the rents accruing upon the termination of the usufruct shall now belong to the owner. With respect to periodic pensions or interest on bonds or securities payable to bearer, they shall be distributed as civil fruits.72 Hence, they shall accrue daily and, therefore, shall be distributed accordingly.73
[105.3] Alienation of the Usufructuary Right
While the usufructuary does not have the right to dispose of the property held in usufruct since that right remains with the naked owner,74 he has absolute control and dominion over his usufructuary right. Hence, he may alienate or encumber his right of usufruct without the consent of the owner of the property whether by onerous or gratuitous title.75 In other words, the law does not require the usufructuary to personally enjoy the property in usufruct. He may transfer such right of enjoyment,
Id. Id. 68 Art. 569, NCC. 69 Id. 70 Art. 568, NCC. 71 Art. 572, NCC. 72 Art. 570, NCC. 73 Id. 74 See discussions in supra., 105.1.3. 75 Art. 572, NCC.
66 67
483
either by leasing the property held in usufruct or by alienating the right of usufruct itself. All such contracts, however, shall terminate upon the expiration of the usufruct.76
[105.3.1] Effect of Such Transfer or Alienation
The transfer or alienation of the right of usufruct does not result in the termination of the relation between the usufructuary and the naked owner.77 The same rule applies in the case of a mere lease by the usufructuary of the property subject to the usufruct. Since the relation between the usufructuary and the owner continues despite the lease or alienation of the right of usufruct, the former shall be personally liable to the latter for any damage to the thing in usufruct caused by the fault or negligence of the transferee or lessee.78
[105.3.2] Usufructuary Rights Which May Not Be Alienated
In the following instances, the right of usufruct may not be allowed: (1) The legal usufruct of the parents over the fruits and income of the property of unemancipated children pursuant to Article 226 of the Family Code, since the same is to be devoted primarily to the childs support and secondarily to the collective needs of the family; (2) The usufruct that is granted to a usufructuary in consideration of his person to last during his lifetime since the usufruct is a matter of personal quality;79 (3) When the enjoyment of the property held in usufruct is acquired through caucion juratoria inasmuch as the basis is the need of the usufructuary.80
[105.4] Right to Useful and Ornamental Improvements
Under the law, the usufructuary has the right to introduce improvements on the property held in usufruct, whether the same be a useful improvement or for mere pleasure, provided that he does not alter
Id. II Tolentino, Civil Code of the Phil., 1992 ed., 325. 78 Art. 590, NCC. 79 II Caguioa, Civil Code of the Phil., 1966 ed., 234-235. 80 Id.
76 77
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its form or substance.81 Upon the termination of the usufruct, however, he is not entitled to seek reimbursement for the expenses he incurred in connection with the aforesaid improvements82 because if the rule were otherwise, then the usufructuary might improve the owner out of his property.83 In other words, if the builder is a usufructuary, his rights will be governed by Articles 579 and 580 of the New Civil Code.84 The rules on industrial accession (Articles 448 to 452) and the rules on possession (Articles 546 to 549) do not apply. In relation to such improvements, the only rights that may be exercised by the usufructuary are the following: (1) he may, at his option, remove the improvements if such removal is possible without damage to the property;85 and (2) he may set-off the improvements against any damage he has caused to the property held in usufruct.86 Note that the right of the usufructuary to remove the improvements is something that is potestative with him. He may choose not exercise it, in which case, he may not be compelled to do so by the owner. In the event, however, that he decides to exercise such right, he may not be prevented by the owner from doing so, even if the latter offers to pay for the value of such improvements. The option given to the owner who recovers possession of preventing the possessor from removing the useful or ornamental improvements by paying the indemnity (see Articles 546 to 549 of the New Civil Code) has not been extended to the naked owner in connection with the improvements introduced by the usufructuary. Chapter 3 OBLIGATIONS OF THE USUFRUCTUARY
Art. 583. The usufructuary, before entering upon the enjoyment of the property, is obliged: (1) To make, after notice to the owner or his legitimate representative, an inventory of all the property, which shall contain an appraisal of the movables and a description of the condition of the immovables;
Art. 579, NCC. Id. 83 Moralidad v. Sps. Pernes, supra. 84 II Paras, Civil Code of the Phil., 1994 ed., 211, cited in Moralidad v. Sps. Pernes, supra. 85 Art. 579, NCC. 86 Art. 580, NCC.
81 82
PROPERTY, OWNERSHIP, AND ITS MODIFICATION USUFRUCT Obligations of the Usufructuary
485
(2) To give security, binding himself to fulll the obligations imposed upon him in accordance with this Chapter. (491) Art. 584. The provisions of No. 2 of the preceding article shall not apply to the donor who has reserved the usufruct of the property donated, or to the parents who are usufructuaries of their childrens property, except when the parents contract a second marriage. (492a) Art. 585. The usufructuary, whatever may be the title of the usufruct, may be excused from the obligation of making an inventory or of giving security, when no one will be injured thereby. (493) Art. 586. Should the usufructuary fail to give security in the cases in which he is bound to give it, the owner may demand that the immovables be placed under administration, that the movables be sold, that the public bonds, instruments of credit payable to order or to bearer be converted into registered certicates or deposited in a bank or public institution, and that the capital or sums in cash and the proceeds of the sale of the movable property be invested in safe securities. The interest on the proceeds of the sale of the movables and that on public securities and bonds, and the proceeds of the property placed under administration, shall belong to the usufructuary. Furthermore, the owner may, if he so prefers, until the usufructuary gives security or is excused from so doing, retain in his possession the property in usufruct as administrator, subject to the obligation to deliver to the usufructuary the net proceeds thereof, after deducting the sums which may be agreed upon or judicially allowed him for such administration. (494) Art. 587. If the usufructuary who has not given security claims, by virtue of a promise under oath, the delivery of the furniture necessary for his use, and that he and his family be allowed to live in a house included in the usufruct, the court may grant this petition, after due consideration of the facts of the case. The same rule shall be observed with respect to implements, tools and other movable property necessary for an industry or vocation in which he is engaged. If the owner does not wish that certain articles be sold because of their artistic worth or because they have a sentimental value, he may demand their delivery to him upon his giving security for the payment of the legal interest on their appraised value. (495) Art. 588. After the security has been given by the usufructuary, he shall have a right to all the proceeds and benets from the day on which, in accordance with the title constituting the usufruct, he should have commenced to receive them. (496)
486
PROPERTY
106. Obligations of Usufructuary In general, the obligations of the usufructuary may be grouped into three (3) different stages: (1) those required at the commencement of the usufruct; (2) those required during the life of the usufruct; and (3) those required at the termination of the usufruct. 107. Obligations at the Commencement of Usufruct
[107.1] In General
Before entering upon the enjoyment of the property, the usufructuary is obliged: (1) to make an inventory of all the property covered by the right of usufruct; and (2) to give security or bond.87 Note, however, that these obligations are not conditions sine qua non for the effectivity of the usufruct or for its commencement. In other words, whether or not the usufructuary complies with both obligations, the usufruct will nonetheless become effective and the term or period of the usufruct will already commence to run. However, the usufructuary may not, as a rule, possess and enjoy the property subject matter of the usufruct unless and until these obligations are complied with. Stated otherwise, compliance with these obligations is a condition sine qua non for the usufructuarys entry upon the possession and enjoyment of the property.
[107.2] Consequences of Failure to Comply with the Foregoing Obligations
It must be noted that while Article 586 of the New Civil Code provides for the effects of failure to give the security required in the second paragraph of Article 583, the law is silent as to the effects of the failure to make the inventory required in the rst paragraph of Article 583. According to Sanchez Roman, the effect of the failure to make an inventory is the same as that of the failure to give security.88 This view is shared by two of our eminent civilists, Eduardo P. Caguioa89 and Justice J.B.L. Reyes.90 Following their view, the provisions of Article 586 of the New Civil Code shall also apply to the failure of the usufructuary to make the inventory.
Art. 583. 3 Sanchez Roman 575-576. 89 See II Caguioa, Civil Code of the Phil., 1966 ed., 242. 90 See II Reyes and Puno, Outline of Civil Law, p. 137.
87 88
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As discussed above, the failure of the usufructuary to make the inventory or to give the security required at the commencement of the usufruct will only prevent him from exercising his right of usufruct but it will not result in the termination of the usufruct. Since the usufructuary cannot, as yet, take possession of the property prior to his compliance with the foregoing obligations, the owner may, if he so desires, retain in his possession the property in usufruct as its administrator.91 If he prefers not to retain possession of the property, he may demand instead: (1) that the immovables be placed under administration; (2) that the movables be sold and its proceeds be invested in safe securities; (3) that the public bonds, instruments of credit payable to order or bearer be converted into registered certicates or deposited in a bank or public institution; or (4) that the capital or sums in cash be invested in safe securities.92 In these cases, the interest on the proceeds of the sale of the movables and that on public securities and bonds, and the proceeds of the property placed under administration, shall belong to the usufructuary.93 Prior to the making of the inventory or the giving of the security, the usufruct may not also claim any matured credits which form part of the usufruct or make investment of the capital even at interest, unless he is authorized by the owner or by the court.94 After compliance with the foregoing requisites, the effects thereof shall retroact, however, to the day of the constitution of the usufruct. This principle is embodied in Article 588 of the New Civil Code which states Art. 588. After the security has been given by the usufructuary, he shall have a right to all the proceeds and benets from the day on which, in accordance with the title constituting the usufruct, he should have commenced to receive them. (496)
[107.3] Exemptions From The Obligation To Give Security
In the following instances, the usufructuary is exempt from the requirement of giving a security or putting up a bond:
Art. 586, last par., NCC. Art. 586, 1st par., NCC. 93 Art. 586, 2nd par., NCC. 94 See Art. 599, NCC.
91 92
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PROPERTY
(1) When the donor has reserved the usufruct of the property donated;95 and (2) In case of legal usufruct of the parents over the property of their minor children living in their custody and under their parental authority, except when the parents contract a second marriage96 or when the market value of the property or the annual income of the child exceeds P50,000.97
[107.4] Instances Where Usufructuary May Be Relieved of the Foregoing Obligations
(1) The usufructuary may be excused from the obligation of making an inventory or of giving security when no one will be injured thereby.98 (2) When the enjoyment of the property subject of the usufruct is to be acquired through caucion juratoria.99 Caucion juratoria refers to the promise under oath made in court by the usufructuary who has not given security for the purpose of acquiring the use of the following: (1) furniture necessary for his use; (2) dwelling house; or (3) implements, tools and other movable property necessary for an industry or vocation in which he is engaged.100 In this kind of usufruct, the usufructuary has no right to alienate his usufuctuary right or lease the same for that would mean that he does not need the house or the furniture or the implements.101
Art. 589. The usufructuary shall take care of the things given in usufruct as a good father of a family. (497) Art. 590. A usufructuary who alienates or leases his right of usufruct shall answer for any damage which the things in usufruct may suffer through the fault or negligence of the person who substitutes him. (498) Art. 591. If the usufruct be constituted on a ock or herd of livestock, the usufructuary shall be obliged to replace with the young thereof
Art. 584, NCC. Id. 97 Art. 225, Family Code. 98 Art. 584, NCC. 99 Art. 587, NCC. 100 Art. 587, NCC. 101 II Tolentino, Civil Code of the Phil., 1992 ed., 337, citing 4 Manresa 473-474, 479.
95 96
489
the animals that die each year from natural causes, or are lost due to the rapacity of beasts of prey. If the animals on which the usufruct is constituted should all perish, without the fault of the usufructuary, on account of some contagious disease or any other uncommon event, the usufructuary shall fulll his obligation by delivering to the owner the remains which may have been saved from the misfortune. Should the herd or ock perish in part, also by accident and without the fault of the usufructuary, the usufruct shall continue on the part saved. Should the usufruct be on sterile animals, it shall be considered, with respect to its effects, as though constituted on fungible things. (499a) Art. 592. The usufructuary is obliged to make the ordinary repairs needed by the thing given in usufruct. By ordinary repairs are understood such as are required by the wear and tear due to the natural use of the thing and are indispensable for its preservation. Should the usufructuary fail to make them after demand by the owner, the latter may make them at the expense of the usufructuary. (500) Art. 593. Extraordinary repairs shall be at the expense of the owner. The usufructuary is obliged to notify the owner when the need for such repairs is urgent. (501) Art. 594. If the owner should make the extraordinary repairs, he shall have a right to demand of the usufructuary the legal interest on the amount expended for the time that the usufruct lasts. Should he not make them when they are indispensable for the preservation of the thing, the usufructuary may make them; but he shall have a right to demand of the owner, at the termination of the usufruct, the increase in value which the immovable may have acquired by reason of the repairs. (502a) Art. 595. The owner may construct any works and make any improvements of which the immovable in usufruct is susceptible, or make new plantings thereon if it be rural, provided that such acts do not cause a diminution in the value of the usufruct or prejudice the right of the usufructuary. (503) Art. 596. The payment of annual charges and taxes and of those considered as a lien on the fruits, shall be at the expense of the usufructuary for all the time that the usufruct lasts. (504) Art. 597. The taxes which, during the usufruct, may be imposed directly on the capital, shall be at the expense of the owner.
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PROPERTY
If the latter has paid them, the usufructuary shall pay him the proper interest on the sums which may have been paid in that character; and, if the said sums have been advanced by the usufructuary, he shall recover the amount thereof at the termination of the usufruct. (505) Art. 598. If the usufruct be constituted on the whole of a patrimony, and if at the time of its constitution the owner has debts, the provisions of Articles 758 and 759 relating to donations shall be applied, both with respect to the maintenance of the usufruct and to the obligation of the usufructuary to pay such debts. The same rule shall be applied in case the owner is obliged, at the time the usufruct is constituted, to make periodical payments, even if there should be no known capital. (506) Art. 599. The usufructuary may claim any matured credits which form a part of the usufruct if he has given or gives the proper security. If he has been excused from giving security or has not been able to give it, or if that given is not sufcient, he shall need the authorization of the owner, or of the court in default thereof, to collect such credits. The usufructuary who has given security may use the capital he has collected in any manner he may deem proper. The usufructuary who has not given security shall invest the said capital at interest upon agreement with the owner; in default of such agreement, with judicial authorization; and, in every case, with security sufcient to preserve the integrity of the capital in usufruct. (507) Art. 600. The usufructuary of a mortgaged immovable shall not be obliged to pay the debt for the security of which the mortgage was constituted. Should the immovable be attached or sold judicially for the payment of the debt, the owner shall be liable to the usufructuary for whatever the latter may lose by reason thereof. (509) Art. 601. The usufructuary shall be obliged to notify the owner of any act of a third person, of which he may have knowledge, that may be prejudicial to the rights of ownership, and he shall be liable should he not do so, for damages, as if they had been caused through his own fault. (511) Art. 602. The expenses, costs and liabilities in suits brought with regard to the usufruct shall be borne by the usufructuary. (512)
108. Obligations During the Life of Usufruct Once the usufructuary has entered into the possession and enjoyment of the property subject matter of a proper or normal usufruct, he
491
has the obligation to preserve its form and substance102 and in the performance of this obligation, he is required to observe the diligence of a good father of a family.103 To further carry out this obligation, the law specically tasks the usufructuary to: (1) make the ordinary repairs on the property held in usufruct;104 (2) pay the annual charges and taxes which are imposed on the fruits of the property held in usufruct;105 (3) notify the owner of the need of urgent extraordinary repairs;106 (4) pay the expenses, costs and liabilities for suits involving the usufruct;107 and (5) notify the owner of any act of a third person that may be prejudicial to the rights of the owner.108
[108.1] Ordinary and Extraordinary Repairs
The law imposes upon the usufructuary the obligation to make the ordinary repairs needed by the thing given in usufruct,109 and should he fail to make them after demand by the owner, the latter may make them at his expense.110 Clearly, therefore, the expenses incurred for the making of the ordinary repairs are to be borne by the usufructuary. Extraordinary repairs, on the other hand, shall be made at the expense of the owner.111 If the owner makes the extraordinary repairs, he has the right to demand of the usufructuary payment of the legal interest on the amount expended from the time they were made until the usufruct lasts.112 But unlike in the case of the ordinary repairs, the law does not oblige the owner to make the extraordinary repairs even when the same are indispensable for the preservation of the thing. As a consequence, the usufructuary may not compel the owner to make the repairs in the event that the latter fails to do the same.113 If the needed extraordinary repairs are indispensable for the preservation of the thing, the usufructuary, on the other hand, has an option, but not an obligation, to
Art. 562, NCC. Art. 589, NCC. 104 Art. 592, NCC. 105 Art. 596, NCC. 106 Art. 593, NCC. 107 Art. 602, NCC. 108 Art. 601, NCC. 109 Art. 592 1st par., NCC. 110 Art. 592, 2nd par., NCC. 111 Art. 593, NCC. 112 Art. 594, 1st par., NCC. 113 See II Tolentino, Civil Code of the Phil., 1992 ed., 340.
102 103
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PROPERTY
make the repairs himself114 but he has the obligation to notify the owner of the need of such repairs in view of the urgency of the matter.115 If the need for the extraordinary repairs is urgent, such that they are indispensable for the preservation of the thing, the law imposes an obligation upon the usufructuary to notify the owner of the need of such repairs.116 If after such notice, the owner still fails to make the extraordinary repairs, the usufructuary is then authorized to make them, in which case, he acquires the following rights in connection therewith: (1) the right to demand of the owner, at the termination of the usufruct, the increase in value which the immovable may have acquired by reason of the repair;117 and the right to retain the property held in usufruct pending the reimbursement by the owner of such expenses.118 If the extraordinary expenses are indispensable for the preservation of the thing and the same were made by the usufructuary but without prior notice to the owner, it is not clear whether the usufructuary is entitled to the indemnity and right of retention. It is submitted, however, that these rights may not be availed by the usufructuary in the absence of a prior notice to the owner of the urgent need for extraordinary repairs. Note that the law does not impose upon the usufructuary the obligation to make such repairs even if the same are needed for the preservation of the thing held in usufruct. He is only granted an option to make the repairs himself in situations where the owner fails to do so upon notice. As a consequence, the obligation of the owner to indemnify the usufructuary for any expenses incurred by the latter in connection with the making of extraordinary repairs is conditioned upon the owners failure to make the repairs when notied by the usufructuary. Absent such notice, any expenses incurred by the usufructuary for such expenses shall be borne by him. After all, he is also beneted by such repairs since the thing is restored to its condition of usefulness. But what constitutes ordinary or extraordinary repairs? Pursuant to the provision of the second paragraph of Article 592, the repair is considered ordinary if the following requisites concur: (1) it is reSee Art. 594, NCC. See Art. 593, NCC. 116 Id. 117 Art. 594, 2nd par., NCC. 118 See Art. 612, NCC.
114 115
493
quired by the wear and tear due to the natural use of the thing; and (2) it is indispensable for the preservation of the thing. If both requisites are not satised, then the repair is considered extraordinary. Hence, repairs which are caused by exceptional circumstances, whether or not they are necessary for the preservation of the thing, are considered extraordinary. Likewise, those which are caused by the natural use of the thing but are not necessary for its preservation are considered extraordinary repairs.
[108.2] Payment of Annual Charges and Taxes
The payment of annual charges and taxes and of those considered as a lien on the fruits, shall be at the expense of the usufructuary for all the time that the usufruct lasts.119 On the other hand, the taxes which, during the usufruct, may be imposed directly on the capital, shall be at the expense of the owner.120 If the taxes directly imposed on the capital are paid by the owner, the usufructuary is obliged to pay him the proper interest on the sums which may have been paid in that character.121 If the said sums, however, have been advanced by the usufructuary, he is entitled to recover the same from the owner at the termination of the usufruct,122 with the right to retain the property held in usufruct until he is reimbursed.123
[108.2.1] Real Estate Taxes on Land
There is variance of opinion on the issue of whether the payment of land taxes is at the expense of the usufructuary or of the owner. According to Manresa, land taxes, being payable annually, are chargeable against the usufructuary.124 This is also the view of the Code Commission125 and of Justice J.B.L. Reyes.126 In a case decided by the Court of Appeals,127 it was likewise held that the payment of land taxes by a usufructuary is not proof of adverse possession against the owner because such payment is an obligation of the usufructuary.
Art. 596, NCC. Art. 597, NCC. 121 Id. 122 Id. 123 See Art. 612, NCC. 124 4 Manresa 493. 125 See I Capistrano, Civil Code of the Phil., 541. 126 See II Outline in Civil Law, 140. 127 Quirante v. Quirante (C.A.), O.G., 4th Supp., No. 8, 242.
119 120
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Our Supreme Court, however, adopts a contrary view.128 According to the Supreme Court, land tax directly burdens the capital, that is, the real value of the property and should be paid by the owner.129 This is also the view of Senator Tolentino130 despite the fact that such kind of taxes are paid annually. Citing Sanchez Roman,131 Tolentino explains that annual charges and taxes in Article 596 of the New Civil Code are chargeable against the usufructuary only when they may be considered as a lien upon the fruits.
[108.3] Obligation to Notify Owner of Prejudicial Acts
The usufructuary is obliged to notify the owner of any act of a third person, of which he may have knowledge, which may be prejudicial to the rights of ownership.132 If he fails in this obligation, he shall be liable to the owner for damages, as if such act had been cause through his own fault.133 Note that the intention Article 601 of the New Civil Code is to protect the right of ownership itself and not simply the right of the naked owner. As a consequence, the usufructuary is obliged to notify the owner of any act of dispossession or any such attempt made by a third person even if it is the usufructuary who is entitled to the possession of the property during the usufruct and not the naked owner. This is because the usufrucuary has the obligation to return the possession of the property to the naked owner upon the termination of the usufruct. Hence, any fact or issue affecting the usufructuarys possession of the property may also eventually affect the right of ownership itself. The usufructuary is not, however, obliged to give notice of any act of a third person which does not affect the right of ownership, such as when the act of a third person affects only the rights of the usufructuary with respect to the fruits of the property.
128 See Mercado v. Rizal, 67 Phil. 608 (1941); Bislig Bay Lumber Co., Inc. v. Provincial Government of Surigao, 100 Phil. 303 (1956); Board of Assessment Appeals of Zamboanga del Sur v. Samar Mining Company, Inc., 37 SCRA 734 (1971). 129 Mercado v. Rizal, supra. 130 II Tolentino, Civil Code of the Phil., 1992 ed., 343. 131 See 3 Sanchez Roman 587. 132 Art. 601, NCC. 133 Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION USUFRUCT Extinguishment of Usufruct
495
Chapter 4 EXTINGUISHMENT OF USUFRUCT

Art. 603. Usufruct is extinguished: (1) By the death of the usufructuary, unless a contrary intention clearly appears; (2) By the expiration of the period for which it was constituted or by the fulllment of any resolutory condition provided in the title creating the usufruct; (3) (4) (5) (6) usufruct; (7) By merger of the usufruct and ownership in the same person; By renunciation of the usufructuary; By the total loss of the thing in usufruct; By the termination of the right of the person constituting the By prescription. (513a)
Art. 604. If the thing given in usufruct should be lost only in part, the right shall continue on the remaining part. (514) Art. 605. Usufruct cannot be constituted in favor of a town, corporation, or association for more than fty years. If it has been constituted, and before the expiration of such period the town is abandoned, or the corporation or association is dissolved, the usufruct shall be extinguished by reason thereof. (515a) Art. 606. A usufruct granted for the time that may elapse before a third person attains a certain age, shall subsist for the number of years specied, even if the third person should die before the period expires, unless such usufruct has been expressly granted only in consideration of the existence of such person. (516) Art. 607. If the usufruct is constituted on immovable property of which a building forms part, and the latter should be destroyed in any manner whatsoever, the usufructuary shall have a right to make use of the land and the materials. The same rule shall be applied if the usufruct is constituted on a building only and the same should be destroyed. But in such a case, if the owner should wish to construct another building, he shall have a right to occupy the land and to make use of the materials, being obliged to pay to the usufructuary, during the continuance of the usufruct, the interest upon the sum equivalent to the value of the land and of the materials. (517)
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Art. 608. If the usufructuary shares with the owner the insurance of the tenement given in usufruct, the former shall, in case of loss, continue in the enjoyment of the new building, should one be constructed, or shall receive the interest on the insurance indemnity if the owner does not wish to rebuild. Should the usufructuary have refused to contribute to the insurance, the owner insuring the tenement alone, the latter shall receive the full amount of the insurance indemnity in case of loss, saving always the right granted to the usufructuary in the preceding article. (518a) Art. 609. Should the thing in usufruct be expropriated for public use, the owner shall be obliged either to replace it with another thing of the same value and of similar conditions, or to pay the usufructuary the legal interest on the amount of the indemnity for the whole period of the usufruct. If the owner chooses the latter alternative, he shall give security for the payment of the interest. (519) Art. 610. A usufruct is not extinguished by bad use of the thing in usufruct; but if the abuse should cause considerable injury to the owner, the latter may demand that the thing be delivered to him, binding himself to pay annually to the usufructuary the net proceeds of the same, after deducting the expenses and the compensation which may be allowed him for its administration. (520) Art. 611. A usufruct constituted in favor of several persons living at the time of its constitution shall not be extinguished until the death of the last survivor. (521) Art. 612. Upon the termination of the usufruct, the thing in usufruct shall be delivered to the owner, without prejudice to the right of retention pertaining to the usufructuary or his heirs for taxes and extraordinary expenses which should be reimbursed. After the delivery has been made, the security or mortgage shall be cancelled. (522a)
109. Extinguishment of Usufruct The Civil Code enumerates the following causes for extinguishment of usufruct: (1) (2) By the death of the usufructuary, unless a contrary intention clearly appears; By the expiration of the period for which it was constituted, or by the fulllment of any resolutory condition provided in the title creating the usufruct; By merger of the usufruct and ownership in the same person;
(3)
497
(4) (5) (6) (7)
By renunciation of the usufructuary; By the total loss of the thing in usufruct; By the termination of the right of the person constituting the usufruct; and By prescription.134
Aside from the foregoing causes, usufruct is also extinguished: (1) by the non-compliance with any condition agreed upon by the parties as grounds for terminating the usufruct; (2) by the rescission or annulment of the contract which is the source of the right of usufruct; and (3) by any causes which extinguish legal usufruct.
[109.1] Death of Usufructuary
A usufruct is meant only as a lifetime grant.135 Ordinarily, therefore, the usufruct is extinguished upon the death of the usufructuary.136 Unlike a natural person, the lifetime of a corporation or association may be extended indenitely.137 For this reason, the law limits the life of the usufruct to fty (50) years if the same is constituted in favor of a town, corporation, or association.138 The purpose of this limitation is to avoid a situation where the usufruct would become a perpetual one. Of course, if the town is abandoned or the corporation or association is dissolved prior to the period agreed upon, the usufruct is also extinguished by reason thereof.139 Note, however, that it is the death of the usufructuary which generally results in the termination of the usufruct. Hence, the death of the naked owner will not extinguish the usufruct unless the parties expressly so stipulate.
[109.1.1] Exceptions to the Foregoing Rule
By way of exceptions, the death of the usufructuary shall not result in the extinguishment of the usufruct in the following situations:
Art. 603, NCC. NHA v. Court of Appeals, G.R. No. 148830, April 13, 2005. 136 Art. 603(1), NCC. 137 NHA v. Court of Appeals, supra. 138 Art. 605, NCC. 139 Id.
134 135
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(1) When the contrary intention clearly appears.140 Hence, when the parties stipulate that the death of the usufructuary will not extinguish the usufruct then it shall continue. It is essential, however, that there must be an express agreement that the usufruct shall continue even after the death of the usufructuary; otherwise, the death of the usufructuary will extinguish the usufruct.141 In other words, even if a period or condition is stipulated, the usufruct is extinguished upon the death of the usufructuary unless there is an express agreement that it shall continue even after such death.142 (2) In multiple usufructs, the usufruct is extinguished only upon the death of the last survivor.143
[109.2] Expiration of Period or Fulllment of Resolutory Condition
The expiration of the period for which the usufruct was constituted or the fulllment of the resolutory condition imposed on the usufruct by the person constituting it shall likewise result in the extinguishment of the usufruct. However, even prior to the arrival of the period or prior to the fulllment of the resolutory condition, the usufruct is already extinguished upon the death of the usufructuary unless there is an express agreement that the usufruct shall continue even after such death. As discussed in supra 109.1, the period of the usufruct must not exceed fty (50) years if it is constituted in favor of a town, corporation or association. In cases where the usufruct is granted for the time that may elapse before a third person attains a certain age, the usufruct shall subsist for the number of years specied, even if the third person should die before the period expires.144 For example, if O creates a usufruct over his property in favor of U to last until the child of U (C), who is ve years old, reaches the age of eighteen years old, the usufruct will continue for another eight years even if C dies at the age of ten. However,
Art. 603(1), NCC. 2 Castan, 9th ed., 526; Decisions of the Supreme Court of Spain of October 1, 1919 and July 2, 1952; 2 Valverde 449. 142 See II Tolentino, Civil Code of the Phil., 1992 ed., 347; II Caguioa, Civil Code of the Phil., 1966 ed., 253. 143 Art. 611, NCC. 144 Art. 606, NCC.
140 141
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when such usufruct has been expressly granted only in consideration of the existence of the third person the usufruct is extinguished upon the latters death. In the same example, if the usufruct was constituted by O to help U pay for the support of C, the usufruct is extinguished upon the death of the latter.
[109.3] Loss of the Thing
A thing is lost when it perishes, or goes out of commerce, or disappears in such a manner that its existence is unknown or it cannot be recovered.145 Hence, loss may either be physical or juridical.
[109.3.1] Exceptions
(1) If the usufruct is constituted on a building and the latter is destroyed without the fault of the usufructuary, the usufruct is not extinguished. In such a situation, the usufructuary has the right to make use of the land and the materials.146 If the owner, however, wishes to construct another building, he has the right to occupy the land and to make use of the materials, in which case, he shall be obliged to pay to the usufructuary, during the continuance of the usufruct, the interest upon the sum equivalent to the value of the land and of the materials.147 If the building which was destroyed had been insured and the usufructuary shared in the payment of the insurance, together with the owner, the usufructuary shall continue in the enjoyment of the new building, should one be constructed, or shall receive the interest on the insurance indemnity if the owner does not wish to rebuild.148 Should the usufructuary have refused to contribute to the insurance and the same was paid by the owner alone, the owner is entitled to the full amount of the insurance indemnity, but the usufruct continues over the land and the materials of the building or in case the owner chooses to rebuild the building, the usufructuary is only entitled to the legal interest in the value of the land and the materials but has no right to the new building.149
Art. 1189(1), NCC. Art. 607, 2nd par., NCC. 147 Id. 148 Art. 608, 1st., NCC. 149 Art. 608, 2nd par., NCC.
145 146
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(2) If the property held in usufruct was expropriated for public use, the usufruct is not extinguished. In such a case, the owner has the options of either: (a) replacing it with another thing of the same value and of similar conditions; or (b) paying the usufructuary the legal interest on the amount of the indemnity for the whole period of the usufruct, giving security for such payment.150
[109.4] Effect of Bad Use
A usufruct is not extinguished by bad use of the thing held in usufruct.151 If the bad use or abuse of the thing in usufruct should cause considerable injury to the owner, the latter may demand that the thing be delivered to him, binding himself to pay annually to the usufructuary the net proceeds of the same, after deducting the expenses and the compensation which may be allowed him for its administration.152 110. Obligations of Usufructuary Upon Termination of Usufruct Upon the termination of the usufruct, the usufructuary loses the right to the possession of the property and he is obliged to deliver the same to the owner unless the usufructuary is entitled to exercise the right to retain the property.153 As previously discussed, the usufructuary enjoys a right of retention until payment of the following: (1) sums that may have been advanced by the usufructuary for payment of taxes which are imposed directly on the capital;154 and (2) the increase in the value which the immovable acquired by reason of the extraordinary repairs paid for by the usufructuary.155 oOo
Art. 609, NCC. Art. 610, NCC. 152 Id. 153 Art. 612, NCC. 154 Arts. 597 and 612, NCC. 155 Arts. 594 and 612, NCC.
150 151
501
Title VII. EASEMENTS OR SERVITUDES

Chapter 1 EASEMENTS IN GENERAL Section 1. Different Kinds of Easements
Art. 613. An easement or servitude is an encumbrance imposed upon an immovable for the benet of another immovable belonging to a different owner. The immovable in favor of which the easement is established is called the dominant estate; that which is subject thereto, the servient estate. (530) Art. 614. Servitudes may also be established for the benet of a community, or of one or more persons to whom the encumbered estate does not belong. (531)
111. Concept
[111.1] Denition
The New Civil Code denes easement or servitude (servitus) from its passive aspect of being an encumbrance. As dened, easement or servitude is an encumbrance imposed upon an immovable for the benet of another immovable belonging to a different owner.1 However, it may also be established for the benet of a community, or of one or more persons to whom the encumbered estate does not belong.2 The foregoing denition, however, represents only one of the two aspects of easement or servitude. The other aspect of easement or servitude refers to the right of servitude (jus servitutes), or the right which corresponds to the burden imposed. From this viewpoint, an
1 2
Art. 613, 1st par., NCC. Art. 614, NCC. 501
502
PROPERTY
easement or servitude may thus be dened as a real right, constituted on the corporeal immovable property of another, by virtue of which the owner has to refrain from doing, or must allow someone to do, something on his property, for the benet of another thing or person.3
[111.1.1] Easement and Servitude, Distinguished
Although the Civil Code uses the terms easement and servitude interchangeably, they are not, strictly speaking, synonymous. As can be seen from supra 111.1, the concept may be dened either from the point of view of the right enjoyed or from the viewpoint of the burden imposed. Properly speaking, easement refers to the right enjoyed by one4 while servitude refers to the burden imposed upon the other.5 Put a little differently, easement and servitude are but the two aspects of the same concept. The passive aspect of being an encumbrance is what should properly be referred to as the servitude; whereas the active aspect of being a right is what should properly be referred to as an easement.
[111.1.2] Easement Is A Real Right
Easement is a real right since the right is constituted on the thing itself and not upon its owner or its occupant. As a consequence, the right avails against every person whomsoever, who may happen, for the time being, to have any interest in the thing, or, as adverse possessor, to exercise a right of dominion over it. The right consists of a limited use and enjoyment of the thing without possession and gives rise to an action in rem in favor of the owner of the tenement of the easement and against any possessor of the servient estate.6 Unlike a lease, an easement does not give its holder a right of possession over the property, but only a right of use for a special and limited purpose. It gives the holder of the easement an incorporeal interest on the land, which is non-possessory in character, but grants no title thereto.
3 Bogo-Medellin Milling Co., Inc. v. CA, 407 SCRA 518 (2003); Sps. Dela Cruz v. Ramiscal, G.R. No. 137882, Feb. 4, 2005; see also Quimen v. CA, 257 SCRA 163 (1996), citing 3 Sanchez Roman 472. 4 Bouviers Law Dictionary, 3rd revision, Vol. 1, p. 967. 5 Bouviers Law Dictionary, 3rd revision, Vol. 1, p. 967. 6 II Caguioa, Civil Code of the Phil., 1966 ed., 262.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION EASEMENTS OR SERVITUDES Easements in General
503
[111.1.3] It Is Constituted Over An Immovable
Whatever may be the kind of easement, the right is always enjoyed over an immovable property. Or, from the point of view of the encumbrance, the same is always imposed upon an immovable property.7 The term immovable in Article 613 should be understood in its ordinary or vulgar connotation as referring to those which are, by their nature, cannot be moved from one place to another such as lands, buildings and roads.8 Hence, it is legally impossible to impose an easement over another easement.9
[111.1.4] It Is Constituted Over Anothers Property
Easement is a right which is enjoyed over anothers property, or jura in re aliena.10 As such, it operates as a limitation on the title of the owner of the servient estate, specically, his right to use (jus utendi).11 Inasmuch as every easement or servitude is a limitation upon ones ownership, it follows that no man has a right of servitude in a thing of which he is the owner: Nulli res sua servit. For if he had, he would have a right in the thing against himself: which is, of course, absurd.12 Hence, it is impossible to have an easement over ones own property in ones own favor because things serve their owner by reason of ownership and not because of any servitude.13 Consequently, if there is a merger in the same person of the ownership of the dominant and servient estates, the easement is extinguished.14 Since easement is constituted on the corporeal immovable property of another person, an acknowledgment of the easement is an admission that the property belongs to another.15
See Art. 613, 1st par., NCC. II Caguioa, Civil Code of the Phil., 1966 ed., 263. 9 Id., 262, citing the Decision of the Supreme Court of Spain of February 4, 1920. 10 Amor v. Florentino, G.R. No. L-48384, Oct. 11, 1943. 11 Solid Manila Corp. v. Bio Hong Trading Co., Inc., 195 SCRA 748 (1991). 12 Lectures on Jurisprudence, John Austin and Sarah Austin, 1863 ed., p. 27. 13 II Caguioa, Civil Code of the Phil., 1966 ed., 263. 14 Art. 631(1), NCC. 15 Bogo-Medellin Milling Co., Inc. v. CA, supra.
7 8
504
PROPERTY
Bogo-Medellin Milling Co., Inc. v. Court of Appeals 407 SCRA 518 (2003) Bogo-Medelllin Milling Co., Inc. declared the property it was occupying to be a central railroad right of way or sugar central railroad right of way from 1930 to 1963. It was only in 1965 that Bogo-Medellin Milling Co. led a claim over the property during the cadastral survey of Medellin. In 1989, a complaint for recovery of the land was led by the alleged owner. Bogo-Medellin Milling Co. interposes, as defense, ownership of the land thru extraordinary acquisitive prescription. In ruling against Bogo-Medellin Milling Co., the Court explained An easement or servitude is a real right, constituted on the corporeal immovable property of another, by virtue of which the owner has to refrain from doing, or must allow someone to do, something on his property, for the benet of another thing or person. It exists only when the servient and dominant estates belong to two different owners. It gives the holder of the easement an incorporeal interest on the land but grants no title thereto. Therefore, an acknowledgment of the easement is an admission that the property belongs to another. Having held the property by virtue of an easement, petitioner cannot now assert that its occupancy since 1929 was in the concept of an owner. Neither can it declare that the 30-year period of extraordinary acquisitive prescription started from that year. Petitioner, however, maintains that even if a servitude was merely imposed on the property in its favor, its possession immediately became adverse to the owner in the late 1950s when the grant was alleged by respondent heirs to have expired. It stresses that, counting from the late 1950s (1959 as found by the trial court), the 30-year extraordinary acquisitive prescription had already set in by the time respondent heirs made a claim against it in their letters dated March 1 and April 6, 1989. We do not think so. The mere expiration of the period of easement in 1959 did not convert petitioners possession into an adverse one. Mere material possession of land is not adverse possession as against the owner and is insufcient to vest title, unless such possession is accompanied by the intent to possess as an owner. There should be a hostile use of such a nature and exercised under such circumstances as to manifest and give notice that the possession is under a claim of right.
505
In the absence of an express grant by the owner, or conduct by petitioner sugar mill from which an adverse claim can be implied, its possession of the lot can only be presumed to have continued in the same character as when it was acquired (that is, it possessed the land only by virtue of the original grant of the easement of right of way), or was by mere license or tolerance of the owners (respondent heirs). It is a fundamental principle of law in this jurisdiction that acts of possessory character executed by virtue of license or tolerance of the owner, no matter how long, do not start the running of the period of prescription. After the grant of easement expired in 1959, petitioner never performed any act incompatible with the ownership of respondent heirs over Cadastral Lot No. 954. On the contrary, until 1963, petitioner continued to declare the sugar central railroad right of way in its realty tax receipts, thereby doubtlessly conceding the ownership of respondent heirs. Respondents themselves were emphatic that they simply tolerated petitioners continued use of Cadastral Lot No. 954 so as not to jeopardize the employment of one of their co-heirs in the sugar mill of petitioner. The only time petitioner assumed a legal position adverse to respondents was when it led a claim over the property in 1965 during the cadastral survey of Medellin. Since then (1965) and until the ling of the complaint for the recovery of the subject land before the RTC of Cebu in 1989, only 24 years had lapsed. Since the required 30-year extraordinary prescriptive period had not yet been complied with in 1989, petitioner never acquired ownership of the subject land.
Art. 615. Easements may be continuous or discontinuous, apparent or non-apparent. Continuous easements are those the use of which is or may be incessant, without the intervention of any act of man. Discontinuous easements are those which are used at intervals and depend upon the acts of man. Apparent easements are those which are made known and are continually kept in view by external signs that reveal the use and enjoyment of the same. Non-apparent easements are those which show no external indication of their existence. (532) Art. 616. Easements are also positive or negative.
506
PROPERTY
A positive easement is one which imposes upon the owner of the servient estate the obligation of allowing something to be done or of doing it himself, and a negative easement, that which prohibits the owner of the servient estate from doing something which he could lawfully do if the easement did not exist. (533)
112. Kinds of Easements Easements are classied, as follows: (1) As to the recipient of the benet, it is either real or personal; (2) As to its source, it is either legal or voluntary. In case of legal easements, it is either: (a) (b) public legal easement; or private legal easement.
(3) As to its exercise, it is either: continuous or discontinuous, apparent or non-apparent, and positive or negative.
[112.1] Real and Personal (Easement) Servitudes
The concept of real servitude, also known as praedial servitude, is dened in the rst paragraph of Article 613 of the New Civil Code. In real or praedial servitude, the encumbrance is imposed upon an immovable for the benet of another immovable belonging to a different owner.16 A real servitude, therefore, requires the existence of two distinct immovables belonging to different owners to each of which it relates. The immovable in favor of which the easement is established is called dominant estate; that which is subject thereto, the servient estate.17 Without these two estates or tenements, there can be no real or praedial servitude. The concept of personal servitude, on the other hand, is dened in Article 614 as an encumbrance imposed upon an immovable for the benet of a community, or of one or more persons to whom the encumbered estate does not belong. In personal servitude, there is therefore no owner of a dominant tenement to speak of, and the
16 17
Art. 613, 1st par., NCC. Art. 613, 2nd par., NCC.
507
easement pertains to persons without a dominant estate.18 In personal servitude or easement, the person in whose favor the easement is constituted need not be the owner of any certain estate and does not require a dominant estate because the person in whose favor the easement is constituted need not be a property owner.19
[112.1.1] Distinction
A real or praedial servitude is said to be imposed upon one of the two estates, called the servient estate or praedium serviens, for the use or advantage of the other, called the dominant estate or praedium dominans. While it may appear that the right of servitude (jus servitutes) is enjoyed by the owner or occupant of the dominant estate, he does so only by reason of such occupancy. In other words, the right of servitude (jus servitutes) that is being enjoyed by the occupant of the dominant estate is inseparable from the occupation of the tenement or estate. Hence, in the ultimate analysis, the right of servitude resides in the estate (praedium) itself and not in the physical person who successively occupies or enjoys it. A personal servitude, on the other hand, is due, not to a thing, but to a person, independently of the latters ownership of any immovable or estate. If the servitude is established for the advantage of a given person, the same is inseparable from his person, and necessarily ceases at his death, unless there is a stipulation to the contrary. In addition, the right to personal servitude does not extend to the successors-in-interest of the person to whom the right is granted.20
Jabonete v. Monteverde 16 SCRA 462 (1966) In a civil case between the plaintiffs and the defendant Antonio Legaspi, a compromise agreement was entered into whereby the said defendant granted the plaintiffs and their family, friends, drivers, servants and jeeps a right of way. Subsequently, however, the plaintiffs, unable to continue with their repair shop, transferred to another place whereupon the defendant reconstructed his fence and its footing, closing thereby the opening previously made by the
Solid Manila Corp. v. Bio Hong Trading Co., Inc., supra. II Caguioa, Civil Code of the Phil., 1966 ed., 264. 20 Jabonete v. Monteverde, 16 SCRA 462 (1966).
18 19
508
PROPERTY
plaintiffs. Thereafter, the plaintiffs lot was foreclosed by the Development Bank of the Philippines (DBP) which, later still, conveyed it under a conditional sale to Mrs. Luz Arcilla. Upon her acquisition of the lot, she demanded of the defendant the re-opening of the fence in question as it was her plan to construct her house in the said lot. When the defendant refused, the Development Bank led with the court a petition to hold the said defendant in contempt. To this petition, Arcilla later intervened and was so allowed by the court. The DBP and Arcilla contended that the refusal of the defendant to cause or allow the making of an opening in his fence was a deance of the said courts decision approving the compromise agreement. Pursuant to DBPs petition, the court declared the defendant in contempt. Defendant appealed the order holding him in contempt. When the case reached the Supreme Court, it was held that the defendant was not guilty of contempt. The Court explained Under the aforesaid order of May 24, 1954, the easement awarded or secured by the lower court to the plaintiffs was strictly a personal one. The right of way granted was expressly limited to the latter and their family, friends, drivers, servants and jeeps. In the very language of the agreement the following appears: El demandado Antonio Legaspi, permitira el uso y paso en la calle privada construida por el en su terreno a lo largo del terreno de los demandantes, a estos, su familia, sus amigos, chofers, servidumbre y de sus jeeps. The servitude established was clearly for the benet alone of the plaintiffs and the persons above enumerated and it is clear that the lower court, as well as the parties addressed by the said order, did not intend the same to pass on to the plaintiffs successors-ininterest. In other words, the right acquired by the original plaintiffs was a personal servitude under Article 614 of the Civil Code, and not a praedial servitude that inures to the benet of whoever owns the dominant estate. In resisting the extension of the aforementioned easement to the latter, the plaintiffs successors-in-interest, the respondentappellant, therefore, was not defying the decision of March 11, 1954 which was then no longer subsisting, nor the order of May 24, 1954 since the said successors-in-interest had no right thereunder. Another evidence that the servitude in question was personal to the plaintiffs is the fact that the same was granted to the latter without any compensation to the respondent-appellant.
509
[112.2] Legal and Voluntary Easement
Easements are established either by law or by the will of the owners. The former are called legal and the latter voluntary easements.21 Legal easements are those which can be enforced by force of law and, therefore, may be established even against the will of the owner of the servient estate.22 Legal easements may have for their objects either public use, in which case the easement is called public legal easement, or the interest of private persons, in which case the easement is called private legal easement. Examples of legal easements are the following: (1) (2) (3) (4) (5) (6) (7) (8) Easement relating to waters (Arts. 637-648, NCC); Easement of right of way (Arts. 649-657, NCC); Easement of party wall (Arts. 658-666, NCC); Easement of light and view (Arts. 667-673, NCC); Easement of drainage of buildings (Arts. 674-676, NCC); Easement of distances (Arts. 677-681, NCC); Easement of nuisance (Arts. 682-683, NCC); and Easement of lateral and subjacent support (Arts. 684-687, NCC).
A voluntary easement is that which is created by reason of the will of the owner of the servient estate.23 Note that only the owner can constitute a servitude over his property since it operates as a limitation upon his title or ownership. Or, to be more accurate, it is only the owner who can create a servitude that will bind the servient estate (praedium serviens). All other servitudes which are imposed by non-owners (such usufructuary, possessors-in-good faith, lessee, etc.) do not bind the servient estate but only the person establishing the same. Necessarily, such servitudes shall terminate upon the termination of the right of the person establishing the same.
Art. 619, NCC. II Caguioa, Civil Code of the Phil., 1966 ed., 290, citing 2 Castan, 9th ed., 576. 23 Art. 619, NCC.
21 22
510
PROPERTY
[112.3] Continuous and Discontinuous Easements
Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements.24 Thus, an easement is continuous if its use is, or may be, incessant without the intervention of any act of man, like the easement of drainage;25 and it is discontinuous if it is used at intervals and depends on the act of man, like the easement of right of way.26 Stated otherwise, continuous easements are those of which the enjoyment is, or may be, continual, without the necessity of any actual interference by man; while discontinuous easements are those, the enjoyment of which can be had only by the interference of man.27 A good example of a continuous easement is the easement of light and view. On the other hand, easement of right of way is an example of a discontinuous easement because its use is at intervals and depends upon the acts of man; it can be exercised only if a man passes or puts his feet over somebody elses land.28
[112.4] Apparent and Non-Apparent Easements
Apparent easements are those which are made known and are continually kept in view by external signs that reveal the use and enjoyment of the same.29 Non-apparent easements, on the other hand, are those which show no external indication of their existence.30 Thus, it is the presence of physical or visual signs that classies an easement into apparent or non-apparent. Thus, a road (which reveals a right of way) and a window (which evidences a right to light and view) are apparent easements, while an easement of not building beyond a certain height is non-apparent.31
Bogo-Medellin Milling Co. v. CA, supra. Arts. 615, 646, NCC. 26 Id. 27 Bouviers Law Dictionary, 3rd revision, p. 968. 28 Abellana, Sr. v. CA, 208 SCRA 316 (1992), citing 4 Manresa 597; Haffman v. Shoemaker, 71 SE 198, both cited on p. 454, Vol. 2, 6th Ed., Paras, Civil Code of the Philippines. 29 Art. 615, 4th par., NCC. 30 Art. 615, 5th par., NCC. 31 Bogo-Medellin Milling Co. v. CA, supra.
24 25
511
[112.5] Positive and Negative Easement
A positive easement is one which imposes upon the owner of the servient estate the obligation of allowing something to be done on his property (servitutes in patendo); it is negative when it prohibits the owner of the servient estate from doing something which he could lawfully do if the easement did not exist (servitutes in non faciendo).32 In positive easement, the right of the owner to exclude any person from the enjoyment of his property, which right is guaranteed in Article 429 of the New Civil Code, is restricted, in the sense that he is obliged to allow something to be done on his property.33 An example of a positive easement is the easement of right of way. A negative easement, on the other hand, does not involve any restriction on the owners right to exclude. Instead, the owner is simply prohibited from doing something on his property which he could lawfully do if the easement did not exist.34 An example of a negative easement is an easement not to build higher (altius non tollendi).35 An easement may not consist, however, in the right to demand that the servient owner do something (servitutes in faciendo). For if it consists in the right to an act to be done by the owner of the servient estate, such right is merely in the nature of a jus in personam against that determinate person. Hence, the true reason why a servitude cannot consist in faciendo is that, if it did, the right created could not be jus in rem since the same will not fall over the thing but on the person. While Article 616 of the New Civil Code may seem to allow a servitutes in faciendo when it says that positive easement may consist in the servient owner doing something himself, the easements in faciendo here are only those which are considered as accessory obligations to a praedial servitude.36 As aptly observed by Senator Tolentino, citing Ruggiero, an easement can never consist in a personal prestation to do on the part of the owner of the servient estate; the obligation imposed upon him is always negative.37 In other words, whether the easement is
Art. 616, NCC. Art. 616, NCC. 34 Id. 35 See Amor v. Tolentino, G.R. No. L-48384, Oct. 11, 1943. 36 See 2 Castan, 9th ed., 548. 37 II Tolentino, Civil Code of the Phil., 1992 ed., 355, citing 1 Ruggiero 716-726.
32 33
512
PROPERTY
a positive or a negative one, the obligation imposed upon the servient owner is always a negative one. In positive easement, for example, the obligation of the servient owner is not to interfere in the use of his property by the holder of the easement. In negative easement, on the other hand, the obligation of the servient owner is to refrain from doing something on his property.
Art. 617. Easements are inseparable from the estate to which they actively or passively belong. (534) Art. 618. Easements are indivisible. If the servient estate is divided between two or more persons, the easement is not modied, and each of them must bear it on the part which corresponds to him. If it is the dominant estate that is divided between two or more persons, each of them may use the easement in its entirety, without changing the place of its use, or making it more burdensome in any other way. (535) Art. 619. Easements are established either by law or by the will of the owners. The former are called legal and the latter voluntary easements. (536)
113. Characteristics of Easements Articles 617 and 618 provides for the characteristics of an easement in that: (1) it is inseparable from the estate to which it actively or passively belongs; and (2) it is indivisible.
[113.1] Inherence or Intransmissibility
As discussed in supra 111.1.2, an easement is a real right which falls over the property itself. Or, from the viewpoint of the obligation imposed, the servitude is imposed upon the property itself and not upon its owner. Hence, it is said that the easement or servitude is but an accessory to the tenement of which it forms part.38 In the words of Article 617 of the New Civil Code, the easement is inseparable from the estate to which it actively or passively belongs. It cannot, therefore, be alienated or mortgaged separately from the estate to which it forms part.39 In addition, the servitude can be availed of against every person
38 39
Solid Manila Corp. v. Bio Hong Trading Co., 195 SCRA 748 (1991). Id.
513
who may subsequently acquire ownership of the estate subject to such encumbrance.
Solid Manila Corp. v. Bio Hong Trading Co. 195 SCRA 748 (1991) When Bio Hong Trading Co. (BHTC) acquired a parcel of land from its prior owner, the same has already been subject to an easement of right of way in favor of the public. Subsequently, the buyer BHTC constructed steel gates across the alley (to which the encumbrance was imposed) thereby precluding unhampered use thereof. Because of such closure, Solid Manila Corp. (SMC) led an injunction case against BHTC claiming that ever since, it had (as well as other residents of neighboring estates) made use of the above private alley and maintained and contributed to its upkeep. When the case reached the Court of Appeals, the appellate court held that since the buyer BHTC acquired title to the property and the alley, there was a merger which resulted in the extinguishment of the easement. SMC, however, claimed that the sale in favor of BHTC excluded the alley. The Supreme Court ruled in favor of SMC. The Court explained It is true that the sale did include the alley. On this score, the Court rejects the petitioners contention that the deed of sale excluded it, because as a mere right-of-way, it can not be separated from the tenement and maintain an independent existence. Thus: Art. 617. Easements are inseparable from the estate to which they actively or passively belong. Servitudes are merely accessories to the tenements of which they form part. Although they are possessed of a separate juridical existence, as mere accessories, they can not, however, be alienated from the tenement, or mortgaged separately. The fact, however, that the alley in question, as an easement, is inseparable from the main lot is no argument to defeat the petitioners claims, because as an easement precisely, it operates as a limitation on the title of the owner of the servient estate, specically, his right to use (jus utendi). xxx xxx xxx Hence, and so we reiterate, albeit the private respondent did acquire ownership over the property including the disputed alley as a result of the conveyance, it did not acquire the right to close that alley or otherwise put up obstructions thereon and thus
514
PROPERTY
prevent the public from using it, because as a servitude, the alley is supposed to be open to the public. The Court is furthermore of the opinion, contrary to that of the Court of Appeals, that no genuine merger took place as a consequence of the sale in favor of the private respondent corporation. According to the Civil Code, a merger exists when ownership of the dominant and servient estates is consolidated in the same person. Merger then, as can be seen, requires full ownership of both estates. One thing ought to be noted here, however. The servitude in question is a personal servitude, that is to say, one constituted not in favor of a particular tenement (a real servitude) but rather, for the benet of the general public. Personal servitudes are referred to in the following article of the Civil Code: Art. 614. Servitudes may also be established for the benet of a community, or of one or more persons to whom the encumbered estate does not belong. In a personal servitude, there is therefore no owner of a dominant tenement to speak of, and the easement pertains to persons without a dominant estate, in this case, the public at large. Merger, as we said, presupposes the existence of a prior servient-dominant owner relationship, and the termination of that relation leaves the easement of no use. Unless the owner conveys the property in favor of the public if that is possible no genuine merger can take place that would terminate a personal easement. For this reason, the trial court was not in error in rendering summary judgment, and insofar as the respondent Court of Appeals held that it (the trial court) was in error, the Court of Appeals is in error. [113.2] Indivisibility
Easements or servitudes are indivisible.40 This is but a necessary consequence of the principle of inseparability of the easement or servi-
40
Art. 618, NCC.
515
tude from the estates to which it relates. As a consequence, even if the servient and dominant estates are divided between two or more persons, the easement or the servitude continues to attach to the estates originally affected. In case of division of the servient estate into several parts, for example, all such parts, though divided, shall continue to bear the encumbrance.41 In case of division of the dominant estate into several parts, each and every part shall continue to enjoy the easement in its entirety and without any modication.42 Section 2. Modes of Acquiring Easements
Art. 620. Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years. (537a) Art. 621. In order to acquire by prescription the easements referred to in the preceding article, the time of possession shall be computed thus: in positive easements, from the day on which the owner of the dominant estate, or the person who may have made use of the easement, commenced to exercise it upon the servient estate; and in negative easements, from the day on which the owner of the dominant estate forbade, by an instrument acknowledged before a notary public, the owner of the servient estate, from executing an act which would be lawful without the easement. (538a) Art. 622. Continuous non-apparent easements, and discontinuous ones, whether apparent or not, may be acquired only by virtue of a title. (539) Art. 623. The absence of a document or proof showing the origin of an easement which cannot be acquired by prescription may be cured by a deed of recognition by the owner of the servient estate or by a nal judgment. (540a) Art. 624. The existence of an apparent sign of easement between two estates, established or maintained by the owner of both, shall be considered, should either of them be alienated, as a title in order that the easement may continue actively and passively, unless, at the time the ownership of the two estates is divided, the contrary should be provided in the title of conveyance of either of them, or the sign aforesaid should be removed before the execution of the deed. This provision shall also apply in case of the division of a thing owned in common by two or more persons. (541a)
41 42
Id. Id.
516
PROPERTY
Art. 625. Upon the establishment of an easement, all the rights necessary for its use are considered granted. (542) Art. 626. The owner of the dominant estate cannot use the easement except for the benet of the immovable originally contemplated. Neither can he exercise the easement in any other manner than that previously established. (n)
114. Acquisition of Easements

[114.1] Modes of Acquiring Easements
There are two (2) modes of acquiring easements: (1) by title and (2) by prescription. All kinds of easements whether continuous or discontinuous, apparent or non-apparent, positive or negative, may be acquired by title.43 But only continuous and apparent easements may be acquired by virtue of prescription.44 In other words, in order for an easement to be acquired by virtue of prescription it must be both continuous and apparent. By title as a mode of acquiring servitude, the Civil Code refers to the juridical act which gives birth to the servitude,45 such as the law, donations, contracts and wills. Hence, the act may either be inter vivos or mortis causa, may be onerous or gratuitous.46 An easement of right of way may be apparent but it is not a continuous easement because its use is at intervals and depends upon the acts of man.47 It can be exercised only if a man passes or puts his feet over somebody elses land.48 Hence, a right of way is not acquirable by prescription.49 In his concurring opinion in the case of Ronquillo v. Roco,50 Justice J.B.L. Reyes explained the reason why right of way may not be acquired by virtue of prescription The essence of this easement (servidumbre de paso) lies in the power of the dominant owner to cross or traverse the servient tenement without being prevented or
Arts. 620, 622, NCC. Art. 620, NCC. 45 See Concurring and Dissenting Opinion of Justice Laurel in North Negros Sugar Co. v. Hidalgo, 63 Phil. 664 (1936). 46 4 Manresa, 5th ed., 552. 47 Abella, Sr. v. CA, 208 SCRA 316 (1992); Costabella Corp. v. CA, 193 SCRA 333 (1991). 48 Id. 49 Id., see also Bogo-Medellin Milling Co., Inc. v. CA, 407 SCRA 518 (2003). 50 G.R. No. L-10619, Feb. 28, 1958.
43 44
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disturbed by its owner. As a servitude, it is a limitation on the servient owners rights of ownership, because it restricts his right to exclude others from his property. But such limitation exists only when the dominant owner actually crosses, or passes over the servient estate; because when he does not, the servient owners right of exclusion is perfect and undisturbed. Since the dominant owner can not be continually and uninterruptedly crossing the servient estate, but can do so only at intervals, the easement is necessarily of an intermittent or discontinuous nature. Because possession of a right consists in the enjoyment of that right (old Civil Code, Art. 430; Art. 423, new Civil Code) and to enjoy a right is to exercise it, it follows that the possession (enjoyment or exercise) of a right of way is intermittent and discontinuous. From this premise, it is inevitable to conclude, with Manresa and Sanchez Roman, that such easement can not be acquired by acquisitive prescription (adverse possession) because the latter requires that the possession be continuous or uninterrupted (old Civil Code, Art. 1941; new Civil Code, Art. 1118).
Bogo-Medellin Milling Co., Inc. v. Court of Appeals 407 SCRA 518 (2003) Bogo-Medellin Milling Co., Inc. declared the property it was occupying to be a central railroad right of way or sugar central railroad right of way from 1930 to 1963. It was only in 1965 that Bogo-Medellin Milling Co. led a claim over the property during the cadastral survey of Medellin. In 1989, a complaint for recovery of the land was led by the alleged owner. Bogo-Medellin Milling Co. interposes, as defense, ownership of the land thru extraordinary acquisitive prescription. As an alternative defense, Bogo-Medellin Milling Co. contended that it became legally entitled to the easement of right of way over said land by virtue of prescription under Article 620 of the Civil Code. On the issue of the acquisition of easement of right of way, the Court held Petitioner contends that, even if it failed to acquire ownership of the subject land, it nevertheless became legally entitled to the easement of right of way over said land by virtue of prescription under Article 620 of the Civil Code:
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Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years. The trial court and the Court of Appeals both upheld this view for the reason that the railroad right of way was, according to them, continuous and apparent in nature. The more or less permanent railroad tracks were visually apparent and they continuously occupied the subject strip of land from 1959 (the year the easement granted by Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-year prescriptive period in 1969, petitioner supposedly acquired the easement of right of way over the subject land. Following the logic of the courts a quo, if a road for the use of vehicles or the passage of persons is permanently cemented or asphalted, then the right of way over it becomes continuous in nature. The reasoning is erroneous. Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements. Thus, an easement is continuous if its use is, or may be, incessant without the intervention of any act of man, like the easement of drainage; and it is discontinuous if it is used at intervals and depends on the act of man, like the easement of right of way. The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets foot on somebody elses land. Like a road for the passage of vehicles or persons, an easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes over anothers property. In other words, the very exercise of the servitude depends upon the act or intervention of man which is the very essence of discontinuous easements. The presence of more or less permanent railroad tracks does not in any way convert the nature of an easement of right of way to one that is continuous. It is not the presence of apparent signs or physical indications showing the existence of an easement, but rather the manner of exercise thereof, that categorizes such easement into continuous or discontinuous. The presence of physical or visual signs only classies an easement into apparent or non-apparent. Thus, a road (which reveals a right of way) and a window (which evidences a right to light and view) are apparent
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easements, while an easement of not building beyond a certain height is non-apparent. In Cuba, it has been held that the existence of a permanent railway does not make the right of way a continuous one; it is only apparent. Therefore, it cannot be acquired by prescription. In Louisiana, it has also been held that a right of passage over anothers land cannot be claimed by prescription because this easement is discontinuous and can be established only by title. In this case, the presence of railroad tracks for the passage of petitioners trains denotes the existence of an apparent but discontinuous easement of right of way. And under Article 622 of the Civil Code, discontinuous easements, whether apparent or not, may be acquired only by title. Unfortunately, petitioner Bomedco never acquired any title over the use of the railroad right of way whether by law, donation, testamentary succession or contract. Its use of the right of way, however long, never resulted in its acquisition of the easement because, under Article 622, the discontinuous easement of a railroad right of way can only be acquired by title and not by prescription. To be sure, beginning 1959 when the original 30-year grant of right of way given to petitioner Bomedco expired, its occupation and use of Cadastral Lot No. 954 came to be by mere tolerance of the respondent heirs. Thus, upon demand by said heirs in 1989 for the return of the subject land and the removal of the railroad tracks, or, in the alternative, payment of compensation for the use thereof, petitioner Bomedco which had no title to the land should have returned the possession thereof or should have begun paying compensation for its use. But when is a party deemed to acquire title over the use of such land (that is, title over the easement of right of way)? In at least two cases, we held that if: (a) it had subsequently entered into a contractual right of way with the heirs for the continued use of the land under the principles of voluntary easements or (b) it had led a case against the heirs for conferment on it of a legal easement of right of way under Article 629 of the Civil Code, then title over the use of the land is deemed to exist. The conferment of a legal easement of right of way under Article 629 is subject to proof of the following: (1) it is surrounded by other immovables and has no adequate outlet to a public highway;
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(2) (3) (4)
payment of proper indemnity; the isolation is not the result of its own acts; and the right of way claimed is at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, the distance from the dominant estate to the highway is the shortest.
None of the above options to acquire title over the railroad right of way was ever pursued by petitioner despite the fact that simple resourcefulness demanded such initiative, considering the importance of the railway tracks to its business. No doubt, it is unlawfully occupying and using the subject strip of land as a railroad right of way without valid title yet it refuses to vacate it even after demand of the heirs. Furthermore, it tenaciously insists on ownership thereof despite a clear showing to the contrary. [114.2] Acquisition Thru Prescription
If the easement is both continuous and apparent, it may be acquired by virtue of prescription within a period of ten (10) years.51 The commencement of the ten-year period of prescription will depend on whether the easement is positive or negative, as follows: (a) If the easement is positive, the 10-year period is counted from the day on which the owner of the dominant estate, or the person who may have made use of the easement, commenced to exercise it upon the servient estate;52 or If the easement is negative, the 10-year period is counted from the day on which the owner of the dominant estate forbade, by an instrument acknowledged before a notary public, the owner of the servient estate, from executing an act which would be lawful without the easement.53
(b)
The foregoing principles are best explained if we are going to consider the acquisition of easement of light and view through prescription. At the outset, it must be pointed out that a building may receive light in various manners in the enjoyment of an easement of
Art. 620, NCC. Art. 621, NCC. 53 Id.
51 52
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light, because the openings through which the light penetrates may be made in ones own wall, in the wall of ones neighbor, or in a party wall. The legal doctrine applicable in either one of these cases is different, owing to the fact that, although anyone may open windows in his own wall, no one has a right to do so in the wall of another without the consent of the owner, and it is also necessary, in accordance with Article 667 of the New Civil Code, to obtain the consent of the other co-owner when the opening is to be made in a party wall.54 When a person opens windows in his own building he does nothing more than exercise an act of ownership inherent in the right of property, which, under Article 428 of the New Civil Code, empowers him to deal with his property as he may see t, with no limitations other than those established by law. By reason of the fact that such an act is performed wholly on a thing which is wholly the property of the one opening the window, it does not in itself establish any easement, because the property is used by its owner in the exercise of dominion, and not as the exercise of an easement: For a man should not use that which belongs to him as if it were a service only, but as his own property. Coexistent with this right is the right of the owner of the adjacent property to cover up such windows by building on his own land or raising a wall contiguously to the wall in which the windows are opened, by virtue of the reciprocity of rights which should exist between abutting owners, and which would cease to exist if one could do what he pleased on his property and the other could not do the same on his. Hence, it is that the use of the windows opened in a wall of ones own property, in the absence of some covenant or express agreement to the contrary, is regarded as an act of mere tolerance on the part of the owner of the abutting property, and does not create any right to maintain the windows to the prejudice of the latter. The mere toleration of such an act does not imply on the part of the abutting owner a waiver of his right to freely build upon his land as high as he may see t, nor does it avail the owner of the windows for the effects of possession, because it is a mere possession at will.55 From the foregoing, it follows that the easement of light with respect to the openings made in ones own edice does not consist
54 55
See Cortes v. Yu-Tibo, 2 Phil. 24 (1903). Id.
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precisely in the fact of opening them or using them, inasmuch as they may be covered up at any time by the owner of the abutting property, and, as Manresa says in his commentaries on the Civil Code, there is no true easement as long as the right to impede its use exists. The easement really consists of in prohibiting or restraining the adjacent owner from doing anything which may tend to cut off or interrupt the light; in short, it is limited to the obligation of not impeding the light (ne luminibus ofciatur). The latter coincides in its effects, from this point of view, with the obligation of refraining from increasing the height of a building (altius non tollendi), which, although it constitutes a special easement, has for its object, at times, the prevention of any interruption of the light enjoyed by the adjacent owner.56 In this sense, it has been commented that an easement of light and view necessarily includes an easement not to build higher (altius non tollendi). These two easements necessarily go together because an easement of light and view requires that the owner of the servient estate shall not build to a height that will obstruct the window. They are, as it were, the two sides of the same coin. While an easement of light and view is positive, that of altius non tollendi is negative.57 It will thus be observed that the owner of the servient estate subject to such easement is under no obligation whatsoever to allow anything to be done on his tenement, nor to do anything there himself, but is simply restrained from doing anything thereon which may tend to cut off the light from the dominant estate, which he would undoubtedly be entitled to do were it not for the existence of the easement. If, then, the rst condition is that which is peculiar to positive easements, and the second condition that which is peculiar to negative easements. Consequently, the easement of lights in the case of windows opened in ones own wall is of a negative character, and, as such, can not be acquired by prescription under Article 621 of the New Civil Code, except by counting the time of possession from the date on which the owner of the dominant estate may, by an instrument acknowledged before a notary public, have prohibited the owner of the servient estate from doing something which it would be lawful for him to do were it not for the easement.58
Id. See Amor v. Florentino, G.R. No. L-48384, Oct. 11, 1943. 58 See Cortes v. Yu-Tibo, supra.
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If the window, on the other hand, is opened in a party wall, and not in a wall the sole and exclusive property of the owner of the dominant tenement, the easement of lights is positive and the 10-year period of prescription commences from the time of the opening of the window. The reason for this is because no part owner can, without the consent of the other, make in a party wall a window or opening of any kind, as provided in Article 667 of the New Civil Code. Hence, the very fact of making such openings in such a wall might, therefore, be the basis for the acquisition of a prescriptive title without the necessity of any active opposition, because it always presupposes the express or implied consent of the other part owner of the wall, which consent, in turn, implies the voluntary waiver of the right of such part owner to oppose the making of such openings or windows in such a wall.59 The same rule will apply if the window is opened on the wall belonging to ones neighbor. The 10-year prescriptive period commences from the time of the opening of the window. Stated otherwise, if anyone shall open a window in the wall of his neighbor, through which the light enters his house, by this sole fact he shall acquire a prescriptive title to the easement of light, if the time xed by law (ten years) expires without opposition on the part of the owner of the wall.60
[114.3] Proof of Easement
The presumption is always against the existence of an easement for property is always presumed free from any and all encumbrances.61 Hence, the law requires that the easement must be acquired either by a title or by prescription.62 If the easement is acquired through prescription, necessarily there is no document evidencing its existence and the same may only be established in a judicial proceeding through preponderance of evidence. If the easement, however, is one which cannot be acquired through prescription and there is no document evidencing the same, or such document is no longer available for whatever reason, the absence of such proof may be cured by a deed of recognition by the owner of the
Id. Id. 61 See Concurring and Dissenting Opinion of Justice Laurel in North Negros Sugar Co. v. Hidalgo, 63 Phil. 664. 62 Arts. 620 and 622, NCC.
59 60
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servient estate.63 If the owner of the servient estate denies the existence of the easement or refuses to execute the deed of recognition, the existence of the easement may nonetheless be established in a judicial proceeding through preponderance of evidence. Note that the existence of a title which serves as the basis for the easement may be proven through oral testimonies of witnesses as the same is not covered by the Statute of Frauds. Even if the servitude is imposed upon a parcel of land and the obligation arises from an oral contract, such agreement is not covered by the Statute of Frauds considering that not all agreements affecting land must be put in writing to attain enforceability.64 Under paragraph 2(e) of Article 1403 of the New Civil Code, such formality is required only of contracts involving leases for longer than one year, or for the sale of real property or of an interest therein.
[114.4] Easement By Apparent Sign or Legal Presumption
As discussed in supra 114.1, an easement may be acquired in two ways: (1) by title or (2) by prescription.65 Article 624 of the New Civil Code provides for acquisition of easements by title through the operation of law. This article contemplates of a situation where the two estates belonged previously to only one person but due to alienation or partition, the ownership of the two estates is divided. Prior, however, to the division of ownership there exists between the two estates an apparent sign of easement. In other words, an easement would have existed between the two estates had the ownership of said estates resided in two different persons. In such a situation, an easement is created by way of title upon the division of ownership of the two estates unless, at the time of the division of ownership of the two estates, the contrary should be provided in the title of conveyance of either of them or the apparent sign should be removed before the execution of the deed.66 It should be noted that while Article 624 declares that the easement is to continue the easement actually arises for the rst time only upon alienation of either estate, inasmuch as before that time there is no
Art. 623, NCC. Hernandez v. CA, 160 SCRA 821, 826 (1988). 65 Arts. 620 and 622, NCC. 66 Art. 624, NCC.
63 64
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easement to speak of, there being but one owner of both estates.67 As discussed in supra 111.1.4 and 112.1, a praedial or real easement is one of the rights in anothers property, or jura in re aliena and nobody can have an easement over his own property, nimini sua res servit. Hence, the easement is not created till the division of the property. At this point, the requisite that there must be two proprietors one of the dominant estate and another of the servient estate is fullled.68 The foregoing principles are illustrated in the case of Gargantos v. Tan Yanon, as follows:
Gargantos v. Tan Yanon G.R. No. L-14652, June 30, 1952 Francisco Sanz was the former owner of a parcel of land, with the buildings and improvements thereon. He subdivided the lot into three and then sold each portion to different persons. One portion was purchased by Guillermo Tengtio who subsequently sold it to Vicente Uy Veza. Another portion, with the house of strong materials thereon, was sold to Tan Yanon (respondent). This house has on its northeastern side, doors and windows over-looking the third portion, which, together with the camarin and small building thereon, after passing through several hands, was nally acquired by Juan Gargantos (petitioner). Subsequently, Gargantos applied for a permit to construct a combined residential house and warehouse on his lot. Tan Yanon opposed approval of this application on the ground that the construction of the building would prevent him from receiving light and enjoying the view through the window of his house. Gargantos argued that Tan Yanon never acquired any easement either by title or by prescription since there is no deed establishing an easement. He further argued that neither he nor his predecessors-in-interest have ever executed any deed whereby they recognized the existence of the easement. In addition, Gargantos claimed that Tan Yanon did not acquire easement by prescription because the latter never formally forbidden the former from performing any act which would be lawful without the easement. The Supreme Court held that Tan Yanon acquired the right of easement, not by prescription, but by title pursuant to Article 624 of the New Civil Code. The easement, according to the Court, was created after the sale of the estate to Tan Yanon. The Court explained It is obvious, however, that Article 538, O.C.C. (now Article 621, N.C.C.) and the doctrine in the Yu-Tibo case are not
67 68
Gargantos v. Tan Yanon, G.R. No. L-14652, June 30, 1952. See Amor v. Tolentino, 74 Phil. 404 (1943).
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applicable herein because the two estates, that now owned by petitioner, and that owner by respondent, were formerly owned by just one person, Francisco Sanz. It was Sanz who introduced improvements on both properties. On that portion presently belonging to respondent, he constructed a house in such a way that the northeastern side thereof extends to the wall of the camarin on the portion now belonging to petitioner. On said northeastern side of the house, there are windows and doors which serve as passages for light and view. These windows and doors were in existence when respondent purchased the house and lot from Sanz. The deed sale did not provide that the easement of light and view would not be established. This then is precisely the case covered by Article 541, O.C.C. (now Article 624, N.C.C.) which provides that the existence of an apparent sign of easement between two estates, established by the proprietor of both, shall be considered, if one of them is alienated, as a title so that the easement will continue actively and passively, unless at the time the ownership of the two estate is divided, the contrary is stated in the deed of alienation of either of them, or the sign is made to disappear before the instrument is executed. The existence of the doors and windows on the northeastern side of the aforementioned house, is equivalent to a title, for the visible and permanent sign of an easement is the title that characterizes its existence (Amor v. Florentino, 74 Phil. 403). It should be noted, however, that while the law declares that the easement is to continue the easement actually arises for the rst time only upon alienation of either estate, inasmuch as before that time there is no easement to speak of, there being but one owner of both estates (Articles 530, O.C.C., now Articles 613, N.C.C). We nd that respondent Tan Yanons property has an easement of light and view against petitioners property. By reason of his easement petitioner cannot construct on his land any building unless he erects it at a distance of not less than three meters from the boundary line separating the two estates. (Emphasis supplied)
For the acquisition of easement by title under Article 624 to apply, the following requisites must concur: (1) that there exist an apparent sign of servitude between two estates; (2) that at the time of the establishment of such sign, the ownership of the two estates resides in one person; (3) that the sign of the easement be established by the owner of both estates because the article will not apply when the easement is established by
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a person different from the owner;69 (4) that the ownership over the two estates is later on divided, either by alienation or partition; and (5) that at the time of division of ownership, nothing is stated in the document of alienation or partition contrary to the easement nor is the sign of the easement removed before the execution of the document. It will thus be seen that under Article 624 the existence of the apparent sign has for all legal purposes the same character and effect as a title of acquisition of the easement.70 Article 624 also applies to a situation where the two estates were previously under a state of co-ownership but prior to partition there exist an apparent sign of easement in one of the estates. For example, A and B used to be co-owners of a parcel of land. A, during the existence of the co-ownership constructed a house on one-half portion of the co-owned property. On the northeastern side of the house, there are windows and doors which serve as passages for light and view. Subsequently, A and B executed a deed of partition whereby the portion where the house stands was allotted to A while the other half was allotted to B. The existence of the doors and windows on the northeastern side of the aforementioned house, is equivalent to a title, for the visible and permanent sign of an easement is the title that characterizes its existence. If nothing has been stated in the deed of partition contrary to the easement and A did not renounce the use of the windows and doors, either by stipulation or by actually closing them permanently, the easement is created by title pursuant to Article 624 upon the actual partition of the co-owned property. According to the Supreme Court in the case of Amor v. Tolentino,71 Article 624 also applies to a division of property by succession. Section 3. Rights and Obligations of the Owners of the Dominant and Servient Estates
Art. 627. The owner of the dominant estate may make, at his own expense, on the servient estate any works necessary for the use and preservation of the servitude, but without altering it or rendering it more burdensome.
69 II Caguioa, Civil Code of the Phil., 1966 ed., 276, citing the Decision of the Supreme Court of Spain of May 27, 1899. 70 Amor v. Tolentino, supra. 71 Supra.
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For this purpose he shall notify the owner of the servient estate, and shall choose the most convenient time and manner so as to cause the least inconvenience to the owner of the servient estate. (543a) Art. 628. Should there be several dominant estates, the owners of all of them shall be obliged to contribute to the expenses referred to in the preceding article, in proportion to the benets which each may derive from the work. Any one who does not wish to contribute may exempt himself by renouncing the easement for the benet of the others. If the owner of the servient estate should make use of the easement in any manner whatsoever, he shall also be obliged to contribute to the expenses in the proportion stated, saving an agreement to the contrary. (544) Art. 629. The owner of the servient estate cannot impair, in any manner whatsoever, the use of the servitude. Nevertheless, if by reason of the place originally assigned, or of the manner established for the use of the easement, the same should become very inconvenient to the owner of the servient estate, or should prevent him from making any important works, repairs or improvements thereon, it may be changed at his expense, provided he offers another place or manner equally convenient and in such a way that no injury is caused thereby to the owner of the dominant estate or to those who may have a right to the use of the easement. (545) Art. 630. The owner of the servient estate retains the ownership of the portion on which the easement is established, and may use the same in such a manner as not to affect the exercise of the easement. (n)
115. Rights and Obligations of the Owner of Dominant Estate

[115.1] Effect of Easement Upon The Rights of Servient Owner
As discussed in supra 111.1.2, an easement consists in the limited use and enjoyment of the property subjected to such encumbrance but without possession. In other words, it gives the holder of the easement an incorporeal interest on the property but grants no title thereto.72 Hence, the owner of the servient estate retains the ownership of the portion on which the easement is established, and may use the same in such a manner as not to affect the exercise of the easement.73 For example, if an easement of right of way is established, the owner of the servient estate may do anything on his property as he pleases, in the exercise of his
72 73
Bogo-Medellin Milling Co. v. CA, supra. Art. 630, NCC.
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right of enjoyment, but he may not enclose the property because such act will affect the exercise of the easement. In this example, the owner of the servient estate has an obligation not to obstruct or hinder the free passage over the servient estate of any person entitled to make use of it. As such, the holder of the easement may demand for the removal of such obstruction. While the owner of the servient estate is prohibited from impairing, in any manner whatsoever, the use of the servitude,74 he may, however, change the place of the easement or the manner of its use provided the following requisites are satised: (1) the place originally assigned or the manner established for the use of the easement has become very inconvenient to the owner of the servient estate or it has prevent him from making any important works, repairs or improvements thereon; the servient owner offers another place or another manner of use equally convenient; no injury is caused thereby to the owner of the dominant estate or to those who may have a right to the use of the easement; and the expenses that will be incurred in the process shall be borne by the owner of the servient estate.75
(2) (3)
(4)
[115.2] Extent of Rights Granted to the Holder of Easement
Upon the establishment of an easement, all the rights necessary for its use are considered granted.76 Hence, the establishment of a principal easement carries with it the grant of accessory ones. For example, an easement for drawing waters carries with it the easement of right of way. This is expressly recognized in Article 641 of the New Civil Code, to wit: Art. 641. Easements for drawing water and for watering animals carry with them the obligation of the owners of the
Art. 629, 1st par., NCC. Art. 629, 2nd par., NCC. 76 Art. 625, NCC.
74 75
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servient estates to allow passage to persons and animals to the place where such easements are to be used, and the indemnity shall include this service. (556) As a consequence of the foregoing rule, the owner of the dominant estate shall have the right to make any works on the servient estate if the same be necessary for the use and preservation of the servitude. This right, however, is subject to compliance with the following requirements: (1) (2) (3) (4) (5) The work must be necessary for the use and preservation of the servitude; The work is done at the expense of the owner of the dominant estate; The work can be done without altering the servitude or rendering it more burdensome; The owner of the servient estate is rst notied of the intended work; and The time and manner of making the work should be the most convenient to the owner of the servient estate or it is done in such a manner that it causes the least inconvenience to the owner of the servient estate.77
If there be several owners of the dominant estate, the expenses that will be incurred in making the work shall be borne by all, in proportion to the benets which each may derive therefrom.78 Any one who does not wish to contribute may exempt himself by renouncing the easement for the benet of the others.79
[115.3] Limitations Upon The Rights of Owner of Dominant Estate
As discussed in supra 112.1.1., while it may appear that the right of servitude (jus servitutes) is enjoyed by the owner or occupant of the dominant estate, he does so only by reason of such occupancy. In other words, the right of servitude (jus servitutes) that is being enjoyed by the owner or occupant of the dominant estate is inseparable from the
Art. 627, NCC. Art. 628, 1st par., NCC. 79 Id.
77 78
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occupation of the tenement or estate. Hence, in the ultimate analysis, the right of servitude (jus servitutes) resides in the estate (praedium) itself and not in the physical person who successively occupies or enjoys it. For this reason, the owner of the dominant estate cannot use the easement (or the right of servitude) except for the benet of the immovable originally contemplated,80 for such right, to repeat, attaches to the immovable itself and not to its owner. Neither may the owner of the dominant estate exercise the easement in any other manner than that previously established.81 When the easement has been established in a general way, without any specic purpose, it can be used for all the needs of the dominant estate, and may be adopted to any new modication in the tenement itself.82 However, when a particular purpose has been specied, the rule is that the easement cannot be used for a different purpose except when the change of use does not make the easement more burdensome, in which case it may be allowed.83 Section 4. Modes of Extinguishment of Easements
Art. 631. Easements are extinguished: (1) By merger in the same person of the ownership of the dominant and servient estates; (2) By non-user for ten years; with respect to discontinuous easements, this period shall be computed from the day on which they ceased to be used; and, with respect to continuous easements, from the day on which an act contrary to the same took place; (3) When either or both of the estates fall into such condition that the easement cannot be used; but it shall revive if the subsequent condition of the estates or either of them should again permit its use, unless when the use becomes possible, sufcient time for prescription has elapsed, in accordance with the provisions of the preceding number; (4) By the expiration of the term or the fulllment of the condition, if the easement is temporary or conditional; (5) By the renunciation of the owner of the dominant estate;
Art. 626, NCC. Id. 82 II Tolentino, Civil Code of the Phil., 1992 ed., 369. 83 Id.
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(6) By the redemption agreed upon between the owners of the dominant and servient estates. (546a) Art. 632. The form or manner of using the easement may prescribe as the easement itself, and in the same way. (547a) Art. 633. If the dominant estate belongs to several persons in common, the use of the easement by any one of them prevents prescription with respect to the others. (548)
116. Extinguishment of Easements An easement may be extinguished through any of the following modes: (1) merger; (2) non-user; (3) impossibility of use; (4) expiration of term; (5) fulllment of condition; (6) renunciation; and (7) redemption.84 In addition to the foregoing causes enumerated in Article 631 of the New Civil Code, the following may be added: (1) annulment or rescission of title constituting the easement; (2) termination of the right of the grantor; and (3) abandonment of the servient estate; and (4) eminent domain.85
[116.1] Merger
As discussed in supra 111.1.4, an easement is a right enjoyed by anothers property, or jure in re aliena. Therefore, nobody can have an easement over his own property, nimini sua res servit,86 for a man should not use that which belongs to him as if it were a service only, but as his own property.87 For this reason, a real or praedial easement requires the existence of two distinct immovables belonging to different owners (see discussions in supra 112.1). As a consequence, if there is a merger in the same person of the ownership of the dominant and servient estates, the easement is extinguished.88 For the same reason, a personal easement established for the benet of a particular person is also extinguished if the said holder of the easement acquires ownership of the servient estate. But if the personal easement is established for the benet of a community, the fact that one of the members of the
Art. 631, NCC. 4 Manresa, 5th ed., 590. 86 Amor v. Tolentino, supra. 87 Cortes v. Yu-Tibo, supra. 88 Art. 631(1), NCC.
84 85
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community acquires ownership of the servient estate will not result in a genuine merger that will terminate the personal easement.89 For a real or praedial easement to be extinguished by way of merger, the merger must involve full ownership of both the dominant and servient estates.90 Thus, it has been held that when a person acquires only a part interest in the servient estate it cannot be said that ownership of the dominant and servient estates has been merged in the same person.91 It is not necessary, however, that the merger takes place to the full extent of the property, it being sufcient that the merger takes place with regard to that part affected by the servitude or that part for the benet of which the servitude was established.92
[116.2] Non-User
Non-user, as a mode of extinguishment of easement, presupposes that the easement was used but later abandoned. For easement to be extinguished under this mode, it is necessary that the non-user must have lasted for a period of ten (10) years.93 The computation of the 10-year period of extinctive prescription shall depend on whether the easement is continuous or discontinuous, as follows: (a) If the easement is discontinuous, the 10-year period is computed from the day on which the easement was not used.94 Since the use of the easement depends upon the acts of man, if no such act has been executed for a period of ten (10) years the easement is extinguished. If the easement is continuous, in which case the use of the easement does not depend upon the acts of man, the 10-year period is counted from the day on which an act contrary to the easement took place.95 For example, if the owner of the lower estate constructed a series of dikes to prevent the ow of excess waters coming from the higher estates, the legal
(b)
See Solid Manila Corp. v. Bio Hong Trading Co., Inc., supra. Id. 91 Cabacungan v. Corrales, 95 Phil. 919. 92 II Caguioa, Civil Code of the Phil., 1966 ed., 285, citing 4 Manresa, 5th ed., 581-582. 93 Art. 631(2), NCC. 94 Id. 95 Id.
89 90
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easement of drainage is extinguished ten (10) years after the construction of the dikes.96 If the dominant estate is under a state of co-ownership, the use of the easement by any of the co-owners will prevent the running of the 10-year period of extinctive prescription by non-user.97 This must be the rule since each co-owner of property which is held pro indiviso has the right to exercise his rights over the whole property and may use and enjoy the same with no other limitations other than that he shall not injure the interests of his co-owners [see discussions in supra 62.2.2]. In addition, since co-ownership is a form of trust, the possession by a co-owner of the entire dominant estate is considered for the benet of all [see discussions in supra 73.1].
[116.3] Impossibility of Use
If there are circumstances which rendered impossible the use of the easement, the same is merely suspended until subsequent conditions shall again permit the use of the easement.98 In the following situations, however, the easement is not merely suspended but extinguished: (a) If the circumstances which cause the impossibility of use shall be irreparable, in which case, the easement is absolutely extinguished. If the circumstances which cause the impossibility of use are reparable, the easement is likewise extinguished if the period of extinctive prescription by non-user has already lapsed.99
(b)
In the latter case, the circumstance which renders the use of the easement impossible must not be in the nature of a fortuitous event; otherwise, the easement may not be extinguished by non-user, in which case, the easement is merely suspended. According to Senator Tolentino, the non-user must be due to voluntary abstention by the dominant owner, and not to fortuitous event, because the basis of this cause of extinguishment is presumptive renunciation.100
Ongsiako v. Ongsiako, G.R. No. L-7510, March 30, 1957. See Art. 633, NCC. 98 Art. 631(3), NCC. 99 Id. 100 II Tolentino, Civil Code of the Phil., 1992 ed., 376, citing 2-II Colin & Capitant 1157.
96 97
PROPERTY, OWNERSHIP, AND ITS MODIFICATION EASEMENTS OR SERVITUDES Legal Easements
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[116.4] Renunciation
The renunciation of the easement by the owner of the dominant estate must be specic, clear and express.101 Hence, a tacit renunciation will not be sufcient.
[116.5] Redemption
The redemption being referred to in paragraph 6 of Article 631 of the New Civil Code is the release of the servient estate from the servitude upon agreement of the owners of both estates and upon payment by the owner of the servient estate of the corresponding consideration to the owner of the dominant estate. Chapter 2 LEGAL EASEMENTS Section 1. General Provisions
Art. 634. Easements imposed by law have for their object either public use or the interest of private persons. (549) Art. 635. All matters concerning easements established for public or communal use shall be governed by the special laws and regulations relating thereto, and, in the absence thereof, by the provisions of this Title. (550) Art. 636. Easements established by law in the interest of private persons or for private use shall be governed by the provisions of this Title, without prejudice to the provisions of general or local laws and ordinances for the general welfare. These easements may be modied by agreement of the interested parties, whenever the law does not prohibit it or no injury is suffered by a third person. (551a)
117. Legal Easement, In General The concept of legal easement and its classications are discussed previously in supra 112.2. As therein discussed, the Civil Code provides for the following classes of private legal easements: (a)
101
Easement relating to waters (Arts. 637-648, NCC);
Fuentes v. Rivera (CA), 40 O.G. (Sup. 12) 106.
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(b) (c) (d) (e) (f) (g) (h)
Easement of right of way (Arts. 649-657, NCC); Easement of party wall (Arts. 658-666, NCC); Easement of light and view (Arts. 667-673, NCC); Easement of drainage of buildings (Arts. 674-676, NCC); Easement of distances (Arts. 677-681, NCC); Easement of nuisance (Arts. 682-683, NCC); and Easement of lateral and subjacent support. (Arts. 684-687, NCC) Section 2. Easements Relating to Waters
Art. 637. Lower estates are obliged to receive the waters which naturally and without the intervention of man descend from the higher estates, as well as the stones or earth which they carry with them. The owner of the lower estate cannot construct works which will impede this easement; neither can the owner of the higher estate make works which will increase the burden. (552) Art. 638. The banks of rivers and streams, even in case they are of private ownership, are subject throughout their entire length and within a zone of three meters along their margins, to the easement of public use in the general interest of navigation, oatage, shing and salvage. Estates adjoining the banks of navigable or oatable rivers are, furthermore, subject to the easement of towpath for the exclusive service of river navigation and oatage. If it be necessary for such purpose to occupy lands of private ownership, the proper indemnity shall rst be paid. (553a) Art. 639. Whenever for the diversion or taking of water from a river or brook, or for the use of any other continuous or discontinuous stream, it should be necessary to build a dam, and the person who is to construct it is not the owner of the banks, or lands which must support it, he may establish the easement of abutment of a dam, after payment of the proper indemnity. (554) Art. 640. Compulsory easements for drawing water or for watering animals can be imposed only for reasons of public use in favor of a town or village, after payment of the proper indemnity. (555) Art. 641. Easements for drawing water and for watering animals carry with them the obligation of the owners of the servient estates to allow passage to persons and animals to the place where such easements are to be used, and the indemnity shall include this service. (556)
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Art. 642. Any person who may wish to use upon his own estate any water of which he can dispose shall have the right to make it ow through the intervening estates, with the obligation to indemnify their owners, as well as the owners of the lower estates upon which the waters may lter or descend. (557) Art. 643. One desiring to make use of the right granted in the preceding article is obliged: (1) To prove that he can dispose of the water and that it is sufcient for the use for which it is intended; (2) To show that the proposed right of way is the most convenient and the least onerous to third persons; (3) To indemnify the owner of the servient estate in the manner determined by the laws and regulations. (558) Art. 644. The easement of aqueduct for private interest cannot be imposed on buildings, courtyards, annexes, or outhouses, or on orchards or gardens already existing. (559) Art. 645. The easement of aqueduct does not prevent the owner of the servient estate from closing or fencing it, or from building over the aqueduct in such manner as not to cause the latter any damage, or render necessary repairs and cleanings impossible. (560) Art. 646. For legal purposes, the easement of aqueduct shall be considered as continuous and apparent, even though the ow of the water may not be continuous, or its use depends upon the needs of the dominant estate, or upon a schedule of alternate days or hours. (561) Art. 647. One who for the purpose of irrigating or improving his estate, has to construct a stop lock or sluice gate in the bed of the stream from which the water is to be taken, may demand that the owners of the banks permit its construction, after payment of damages, including those caused by the new easement to such owners and to the other irrigators. (562) Art. 648. The establishment, extent, form and conditions of the servitudes of waters, to which this section refers, shall be governed by the special laws relating thereto insofar as no provision therefor is made in this Code. (563a)
118. Easement Relating to Waters The following are the easements relating to waters: (1) Easement of drainage of waters (Art. 637, NCC; Art. 50, Water Code)
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(2) (3) (4) (5)
Easement for public use (Art. 638, NCC; Art. 51, Water Code); Easement for drawing waters (Arts. 640-641, NCC); Easement of abutment of dam (Art. 639, NCC); Easement of aqueduct (Arts. 642-646, NCC).
[118.1] Easement of Drainage of Waters
An easement exists when, based on the physical condition of two estates, waters descend naturally and without the intervention of man from a higher estate (the dominant estate) to a lower estate (the servient estate). This is called easement of drainage of waters.102 In this kind of easement, the lower estate is obliged to receive the waters which naturally and without the intervention of man ow from the higher estates, as well as the stones or earth which they carry with them.103 Such being the case, the owner of the lower estate may not construct works, such as dikes, walls or hedges, which will block or impede the ow of waters,104 unless he provides an alternative method of drainage.105 The owner of the higher estate, in turn, may not construct works which will increase the burden or increase the natural ow.106 The owner of the higher estate shall also have the right to resort to articial means for the purpose of draining waters from higher to lower estates but in the exercise of such right, he is obliged: (1) to select the routes and methods of drainage that will cause the minimum damage to the lower lands; and (2) to pay just compensation to the owner of the lower estate.107 Since the enjoyment of this servitude does not depend upon acts of man because the descent of water from the higher to the lower estates is due to the force of gravity, this easement must be classed among the continuous ones108 and it is subject to extinction by non-user for a period
Ongsiako v. Ongsiako, supra. Art. 637, 1st par., NCC; Art. 50, Water Code of the Phils. 104 Art. 637, 2nd par., NCC; Art. 50, Water Code of the Phils. 105 Art. 50, Water Code of the Phils. 106 Art. 637, 2nd par., NCC; Art. 50, Water Code of the Phils. 107 Art. 46, Water Code of the Phils. 108 Ongsiako v. Ongsiako, supra.
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of ten years computed from the day on which an act contrary to the easement took place, such as building of dikes.109
[118.2] Easement of Public Use
The banks or rivers and streams and the shores of the seas and lakes throughout their entire length and within a zone of three (3) meters in urban areas, twenty (20) meters in agricultural areas and forty (40) meters in forest areas, along their margins, are subject to the easement of public use in the interest of recreation, navigation, oatage, shing and salvage.110 However, no person shall be allowed to stay in this zone longer than what is necessary for recreation, navigation, oatage, shing or salvage or to build structures of any kind.111 Note that in connection with this kind of easement, the provision of the rst paragraph of Article 638 of the New Civil Code was modied by Article 51 of the Water Code of the Philippines (P.D. No. 1067).
[118.3] Easement For Drawing Waters
The compulsory easement for drawing waters or for watering animals can be imposed only for reasons of public use in favor of a town or village, after payment of the proper indemnity.112 This kind of easement, upon its establishment, carries with it the easement of right of way. In other words, the owner of the servient estate shall also have the obligation to allow passage to persons and animals to the place where the easement is to be used.113 As such, the indemnity to be paid for the easement for drawing waters or for watering animals must include indemnity for the easement of right of way.114
[118.4] Easement of Abutment of Dam
Whenever it is necessary to build a dam for the purpose of diverting or taking waters from a river or brook, or for the use of any other continuous or discontinuous stream, and the person who is to construct it is not the owner of the banks or of the land on which must
Art. 631(2), NCC; Ongsiako v. Ongsiako, supra. Art. 51, Water Code of the Phils. 111 Id. 112 Art. 640, NCC. 113 Art. 641, NCC. 114 Id.
109 110
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support it, he may establish an easement of abutment of dam only upon payment of the proper indemnity to the owner of the affected estates.115
[118.5] Easement of Aqueduct [118.5.1] Requisites
If a person wishes to use upon his estate any water of which he can dispose, he shall have the right to make it ow through intervening estates.116 This is called easement of aqueduct. In order for this easement to be established, the following requisites must concur: (1) (2) (3) (4) That he who wants to establish the easement of aqueduct must be able to prove that he can dispose of the water; He must also prove that it is sufcient for the use for which it is intended; The proposed right of way is the most convenient and the least onerous to third persons affected; and He must indemnify the owners of the servient estates (intervening estates), as well as the owners of the lower estates upon which the waters may lter or descend.117
Article 47 of the Water Code of the Philippines likewise provides that when the use, conveyance or storage of water results in damage to another, the person responsible for the damage shall pay compensation. This kind of easement, if established for private interest, may not be imposed on buildings, courtyards, annexes, or outhouse, or on orchards or gardens already existing.118
[118.5.2] Right of Owners of Servient Estate
The existence of an easement of aqueduct does not, however, curtail the right of the owner of the servient estate to close or fence his estate119 but he may not refuse the entry of the holder of the easement on his
Art. 639, NCC. Art. 642, NCC. 117 Arts. 642 and 643, NCC. 118 Art. 644, NCC. 119 Art. 645, NCC.
115 116
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estate if the purpose of such entry is the cleaning, repair or replacement of the aqueduct or removal of any obstruction therefrom.120 The existence of such easement does not likewise prevent the owner of the servient estate from building over these aqueduct provided that the same does not cause damage to the aqueduct or render the necessary repairs and cleanings thereon impossible.121
[118.5.3] Nature of Easement
For legal purposes, the easement of aqueduct shall be considered as continuous and apparent, even though the ow of the water may not be continuous, or its use depends upon the needs of the dominant estate, or upon a schedule of alternate days or hours.122 Hence, an easement of aqueduct may be acquired either by title or by prescription.123 Section 3. Easement of Right of Way
Art. 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the proper indemnity. Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied and the amount of the damage caused to the servient estate. In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by others and for the gathering of its crops through the servient estate without a permanent way, the indemnity shall consist in the payment of the damage caused by such encumbrance. This easement is not compulsory if the isolation of the immovable is due to the proprietors own acts. (564a) Art. 650. The easement of right of way shall be established at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. (565)
Art. 49, Water Code of the Phils. Art. 645, NCC. 122 Art. 646, NCC. 123 Art. 620, NCC.
120 121
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Art. 651. The width of the easement of right of way shall be that which is sufcient for the needs of the dominant estate, and may accordingly be changed from time to time. (566a) Art. 652. Whenever a piece of land acquired by sale, exchange or partition, is surrounded by other estates of the vendor, exchanger, or coowner, he shall be obliged to grant a right of way without indemnity. In case of a simple donation, the donor shall be indemnied by the donee for the establishment of the right of way. (567a) Art. 653. In the case of the preceding article, if it is the land of the grantor that becomes isolated, he may demand a right of way after paying an indemnity. However, the donor shall not be liable for indemnity. (n) Art. 654. If the right of way is permanent, the necessary repairs shall be made by the owner of the dominant estate. A proportionate share of the taxes shall be reimbursed by said owner to the proprietor of the servient estate. (n) Art. 655. If the right of way granted to a surrounded estate ceases to be necessary because its owner has joined it to another abutting on a public road, the owner of the servient estate may demand that the easement be extinguished, returning what he may have received by way of indemnity. The interest on the indemnity shall be deemed to be in payment of rent for the use of the easement. The same rule shall be applied in case a new road is opened giving access to the isolated estate. In both cases, the public highway must substantially meet the needs of the dominant estate in order that the easement may be extinguished. (568a) Art. 656. If it be indispensable for the construction, repair, improvement, alteration or beautication of a building, to carry materials through the estate of another, or to raise therein scaffolding or other objects necessary for the work, the owner of such estate shall be obliged to permit the act, after receiving payment of the proper indemnity for the damage caused him. (569a) Art. 657. Easements of the right of way for the passage of livestock known as animal path, animal trail or any other, and those for watering places, resting places and animal folds, shall be governed by the ordinances and regulations relating thereto, and, in the absence thereof, by the usages and customs of the place. Without prejudice to rights legally acquired, the animal path shall not exceed in any case the width of 75 meters, and the animal trail that of 37 meters and 50 centimeters. Whenever it is necessary to establish a compulsory easement of the right of way or for a watering place for animals, the provisions of this
543
Section and those of Articles 640 and 641 shall be observed. In this case the width shall not exceed 10 meters. (570a)
119. Easement of Right of Way

[119.1] Concept
Servitudes of right of way are an ancient concept, which date back to the iter, actus, and via of the Romans.124 They are demanded by necessity, that is, to enable owners of isolated estates to make full use of their properties, which lack of access to public roads has denied them.125 The essence of this easement (servidumbre de paso) lies in the power of the dominant owner to cross or traverse the servient tenement without being prevented or disturbed by its owner. As a servitude, it is a limitation on the servient owners rights of ownership, because it restricts his right to exclude others from his property. But such limitation exists only when the dominant owner actually crosses, or passes over the servient estate; because when he does not, the servient owners right of exclusion is perfect and undisturbed. Since the dominant owner can not be continually and uninterruptedly crossing the servient estate, but can do so only at intervals, the easement is necessarily of an intermittent or discontinuous nature. Because possession of a right consists in the enjoyment of that right and to enjoy a right is to exercise it, it follows that the possession (enjoyment or exercise) of a right of way is intermittent and discontinuous. From this premise, it is inevitable to conclude, with Manresa and Sanchez Roman, that such easement can not be acquired by acquisitive prescription (adverse possession) because the latter requires that the possession be continuous or uninterrupted.126
[119.2] Manner of Acquisition; Requisites of Compulsory Right of Way
As discussed in supra 114.1, an easement of right of way may only be acquired by virtue of a title, either voluntarily (Arts. 688-693) or compulsorily (Arts. 649-657). A voluntary easement of right of way is constituted by covenant and does not, therefore, require that the dominant estate be isolated and without an adequate outlet to a public
Costabella Corp. v. CA, 193 SCRA 333 (1991). Id. 126 See Concurring Opinion of Justice JBL Reyes in Ronquillo v. Roco, G.R. No. L-10619, Feb. 28, 1958.
124 125
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highway. If an estate, however, is so isolated and without an adequate outlet to a public highway, the grant of easement of right of way is compulsory and hence, legally demandable, subject to indemnity and the concurrence of other conditions enumerated under Articles 649 and 650 of the New Civil Code. In Bacolod-Murcia Milling Co., Inc. v. Capital Subdivision, Inc.,127 the Supreme Court held that a compulsory easement of right of way cannot be obtained without the presence of four (4) requisites provided for in Articles 649 and 650 of the Civil Code, which the owner of the dominant tenement must establish, to wit: (1) That the dominant estate is surrounded by other immovables and has no adequate outlet to a public highway (Art. 649, par. 1); (2) After payment of proper indemnity (Art. 649, par. 1, end); (3) That the isolation was not due to acts of the proprietor of the dominant estate (Art. 649, par. 4); and (4) That the right of way claimed is at the point least prejudicial to the servient estate; and insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. (Art. 650)128 By its very nature, and when considered with reference to the obligations imposed on the servient estate, an easement involves an abnormal restriction on the property rights of the servient owner and is regarded as a charge or encumbrance on the servient estate. Thus, it is incumbent upon the owner of the dominant estate to establish by clear and convincing evidence the presence of all the preconditions before his claim for easement of right of way be granted.129 Stated otherwise, the burden of proving the existence of the prerequisites to validly claim a compulsory right of way lies on the owner of the dominant estate.130
[119.3] Isolation of the Dominant Estate
In order to entitle the owner of the dominant estate to demand for a compulsory right of way, it is required that his estate must be
17 SCRA 731, 735-736. Cited in Francisco v. IAC, 177 SCRA 527 (1989). 129 Cristobal v. Court of Appeals, G.R. No. 125339, June 22, 1998. 130 Florendo v. Llenado, 244 SCRA 713 (1995).
127 128
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surrounded by other immovables pertaining to other persons.131 The estate, however, need not be totally landlocked as the isolation of the dominant estate is also dependent on the particular need of the dominant owner. What is important to consider is whether or not a right of way is necessary to ll a reasonable need therefor by the owner.132 Thus, as Manresa had pointed out, if the passageway consists of an inaccessible slope or precipice, it is as if there is no passageway, that is, one that can sufciently fulll the dominant owners necessities, although by the existence of that passageway the property can not be truly said that the property is isolated.133 So also, while an existing right of way may have proved adequate at the start, the dominant owners need may have changed since then, for which Article 651 of the Code allows adjustments as to width.134 But the law makes it amply clear that an owner cannot, by his own act, isolate his property from a public highway and then claim an easement of way through an adjacent estate.135 In short, the claimant of a right of way must not himself procured the isolation of his property.136 According to the last paragraph of Article 649, the easement is not compulsory if the isolation of the immovable is due to the proprietors own acts. Thus, when the claimant of a right of way had already been granted an adequate access to the public highway through another estate but the same was no longer in use because he himself had closed it off by erecting a stonewall on his lot at the point where such passageway began, he cannot demand for a compulsory right of way in an alternative location.137
[119.4] Inadequacy of the Outlet to Public Highway
To be entitled to a compulsory right of way, it is necessary that the estate of the claimant of a right of way must be isolated and without adequate outlet to a public highway.138 The true standard for the grant of the legal right is adequacy. Hence, when there is already an existing
Art. 649, par. 1, NCC. Costabella Corp. v. CA, supra, citing II Francisco, Civil Code of the Philippines, 787. 133 Id. 134 Id. 135 Francisco v. IAC, 177 SCRA 527 (1989). 136 Id. 137 See Francisco v. IAC, supra; see also Dionsio v. Ortiz, 204 SCRA 746 (1991). 138 Art. 649, par. 1, NCC.
131 132
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adequate outlet from the dominant estate to a public highway, even if the said outlet, for one reason or another, be inconvenient, the need to open up another servitude is entirely unjustied.139 Of course, the question of when a particular passage may be said to be adequate depends on the circumstances of each case. Manresa, however, says: In truth, not only the estate which absolutely does not possess it should be considered in this condition, but also that which does not have one sufciently safe or serviceable; an estate bordering a public road through an inaccessible slope or precipice, is in fact isolated for all the effects of the easement requested by its owner. On the other hand, an estate which for any reason has necessarily lost its access to a public road during certain periods of the year is in the same condition There are some who propound the query as to whether the fact that a river ows between the estate and the public road should be considered as having the effect of isolating the estate... If the river may be crossed conveniently at all times without the least danger, it cannot be said that the estate is isolated; in any other case, the answer is in the afrmative.140 In order to justify the imposition of the servitude of right of way, there must be a real, not a ctitious or articial necessity for it. Mere convenience for the dominant estate is not what is required by law as the basis for setting up a compulsory easement. Even in the face of a necessity, if it can be satised without imposing the servitude, the same should not be imposed. This easement can also be established for the benet of a tenement with an inadequate outlet, but not when the outlet is merely inconvenient. Thus, when a person has already established an easement of this nature in favor of his tenement, he cannot demand another, even if the rst passage has defects which make passage impossible, if those defects can be eliminated by proper repairs. 141 In the case of Ramos v. Gatchalian,142 the Court denied access to Sucat Road through Gatchalian Avenue in view of the fact that petitioner had a road right of way provided by the Sobrina Rodriguez Lombos Subdivision indicated as Lot 4133-G-12 in its subdivision
Costabella Corp. v. CA, supra. Id. 141 Floro v. Llenado, 244 SCRA 713 (1995). 142 154 SCRA 703 (1987).
139 140
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plan for the buyers of its lots, notwithstanding that said lot was still undeveloped and inconvenient to petitioner. Even if Ramos, the petitioner therein, had to pass through other lots belonging to other owners, which are grassy and cogonal, as temporary ingress/egress with great inconvenience particularly due to ood and mud, the Court did not allow the easement because it would run counter to existing jurisprudence that mere convenience for the dominant estate does not sufce to serve as basis for the servitude. In the case of Floro v. Llenado,143 the Supreme Court likewise refused to impose an easement of right of way over petitioners property, although private respondents alternative routes was admittedly inconvenient because he had to traverse several rice lands and rice paddies belonging to different persons, not to mention that said passage, as found by the trial court, was impassable during rainy season.
[119.5] At the Point Least Prejudicial
Article 650 of the New Civil Code explicitly states that the easement of right of way shall be established at the point least prejudicial to the servient estate and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance although this is a matter of judicial appreciation.144 While shortest distance may ordinarily imply least prejudice, it is not always so as when there are permanent structures obstructing the shortest distance; while on the other hand, the longest distance may be free of obstructions and the easiest or most convenient to pass through. In other words, where the easement may be established on any of several tenements surrounding the dominant estate, the one where the way is shortest and will cause the least damage should be chosen. However, if these two (2) circumstances do not concur in a single tenement, the way which will cause the least damage should be used, even if it will not be the shortest. This is the test.145 Hence, as between a right of way that would demolish a store of strong materials to provide egress to a public highway, and another right of way which
Supra. Quimen v. CA, 257 SCRA 163 (1996). 145 Id.

143 144
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although longer will only require an avocado tree to be cut down, the second alternative should be preferred.146
[119.6] Payment of Indemnity
In Talisay-Silay Milling Co. v. Court of First Instance of Negros Occidental,147 the Supreme Court explained what is meant by payment or prepayment of the required indemnity under Article 649 of the Civil Code, as follows: . . . Prepayment, as we used the term means the delivery of the proper indemnity required by law for the damage that might be incurred by the servient estate in the event the legal easement is constituted. The fact that a voluntary agreement upon the extent of compensation cannot be reached by the parties involved, is not an impediment to the establishment of such easement. Precisely, the action of the dominant estate against the servient estate should include a prayer for the xing of the amount which may be due from the former to the latter. The extent of the indemnity, should the easement be established in such a manner that its use may be continuous for all the needs of the dominant estate, thereby establishing a permanent passage, shall consist of the value of the land occupied and the amount of the damage caused to the servient estate.148 And in case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by others and for the gathering of its crops through the servient estate without a permanent way, the indemnity shall consist in the payment of the damage caused by such encumbrance.149 However, whenever a piece of land which is acquired by sale, exchange or partition is surrounded by other states of the vendor, exchanger or co-owner, the owner is entitled to a grant of right of way without indemnity.150 Such grant of right of way is deemed a tacit condition of the contract and essentially voluntary in character inasmuch
Id. 42 SCRA 577 (1971). 148 Art. 649, par. 2, NCC. 149 Art. 649, par. 3, NCC. 150 Art. 652, 1st par., NCC.
146 147
549
as the estate is surrounded by the estate of others through the will of the parties.151 But if the owner acquires his land by way of a simple donation, there is no such tacit condition because the donor receives nothing from the donee. In this latter case, therefore, the donee can only demand for a right of way after payment of the proper indemnity.152
[119.7] Width of the Easement
Article 651 of the New Civil Code provides that (t)he width of the easement of right of way shall be that which is sufcient for the needs of the dominant estate, and may accordingly be changed from time to time. This is taken to mean that under the law, it is the needs of the dominant property which ultimately determine the width of the passage. And these needs may vary from time to time.153 In the case of Encarnacion v. Court of Appeals,154 the Court had the occasion to explain When petitioner started out as a plant nursery operator, he and his family could easily make do with a few pushcarts to tow the plants to the national highway. But the business grew and with it the need for the use of modern means of conveyance or transport. Manual hauling of plants and garden soil and use of pushcarts have become extremely cumbersome and physically taxing. To force petitioner to leave his jeepney in the highway, exposed to the elements and to the risk of theft simply because it could not pass through the improvised pathway, is sheer pigheadedness on the part of the servient estate and can only be counter-productive for all the people concerned. Petitioner should not be denied a passageway wide enough to accommodate his jeepney since that is a reasonable and necessary aspect of the plant nursery business.
[119.8] Who May Demand For Compulsory Right of Way
Under Article 649 of the New Civil Code, it is the owner, or any person who by virtue of a real right may cultivate or use any immovable
2 Castan, 9th ed., 586. Art. 652, 2nd par., NCC. 153 Encarnacion v. CA, 195 SCRA 74 (1991). 154 Supra.
151 152
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PROPERTY
surrounded by other immovable pertaining to other persons, who is entitled to demand a right of way through the neighboring estates. Thus, in the case of Spouses Dela Cruz v. Ramiscal,155 the Court held that the petitioners therein are not entitled to demand for a compulsory right of way because they are not the owners of the supposed dominant estate and neither do they possess a real right to use such property. While a usufructuary is entitled to demand a right of way pursuant to Article 649, a mere lessee does not enjoy the same right. With respect to the latter, his action is against the lessor who is bound to maintain him in the enjoyment of the property.156
[119.9] Extinguishment of Right of Way
If the right of way is no longer necessary because the owner of the dominant estate has joined it to another abutting on a public highway and such public highway substantially meets the needs of the dominant estate, the owner of the servient estate may demand for the release of his estate from the servitude by returning what he may have received by way of indemnity without interest. The interest on the indemnity shall, instead, be considered as payment for the use of the easement.157 The same rule shall be applied in cases where a new road is opened thereby giving access to the isolated estate.158 Note, however, that the extinguishment of the right of way in the foregoing manner does not take place ipso jure. The owner of the servient estate must ask for the release of his estate from the servitude upon the return of the indemnity he received. Section 4. Easement of Party Wall
Art. 658. The easement of party wall shall be governed by the provisions of this Title, by the local ordinances and customs insofar as they do not conict with the same, and by the rules of co-ownership. (571a) Art. 659. The existence of an easement of party wall is presumed, unless there is a title, or exterior sign, or proof to the contrary:
G.R. No. 137882, Feb. 4, 2005. II Tolentino, Civil Code of the Phil., 1992 ed., 387. 157 Art. 655, 1st par., NCC. 158 Art. 655, 2nd par., NCC.
155 156
551
(1) In dividing walls of adjoining buildings up to the point of common elevation; (2) In dividing walls of gardens or yards situated in cities, towns, or in rural communities; (3) In fences, walls and live hedges dividing rural lands. (572)
Art. 660. It is understood that there is an exterior sign, contrary to the easement of party wall: (1) opening; Whenever in the dividing wall of buildings there is a window or
(2) Whenever the dividing wall is, on one side, straight and plumb on all its facement, and on the other, it has similar conditions on the upper part, but the lower part slants or projects outward; (3) Whenever the entire wall is built within the boundaries of one of the estates; (4) Whenever the dividing wall bears the burden of the binding beams, oors and roof frame of one of the buildings, but not those of the others; (5) Whenever the dividing wall between courtyards, gardens, and tenements is constructed in such a way that the coping sheds the water upon only one of the estates; (6) Whenever the dividing wall, being built of masonry, has stepping stones, which at certain intervals project from the surface on one side only, but not on the other; (7) Whenever lands inclosed by fences or live hedges adjoin others which are not inclosed. In all these cases, the ownership of the walls, fences or hedges shall be deemed to belong exclusively to the owner of the property or tenement which has in its favor the presumption based on any one of these signs. (573) Art. 661. Ditches or drains opened between two estates are also presumed as common to both, if there is no title or sign showing the contrary. There is a sign contrary to the part-ownership whenever the earth or dirt removed to open the ditch or to clean it is only on one side thereof, in which case the ownership of the ditch shall belong exclusively to the owner of the land having this exterior sign in its favor. (574) Art. 662. The cost of repairs and construction of party walls and the maintenance of fences, live hedges, ditches, and drains owned in common, shall be borne by all the owners of the lands or tenements having the party wall in their favor, in proportion to the right of each.
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Nevertheless, any owner may exempt himself from contributing to this charge by renouncing his part-ownership, except when the party wall supports a building belonging to him. (575) Art. 663. If the owner of a building, supported by a party wall desires to demolish the building, he may also renounce his part-ownership of the wall, but the cost of all repairs and work necessary to prevent any damage which the demolition may cause to the party wall, on this occasion only, shall be borne by him. (576) Art. 664. Every owner may increase the height of the party wall, doing so at his own expense and paying for any damage which may be caused by the work, even though such damage be temporary. The expenses of maintaining the wall in the part newly raised or deepened at its foundation shall also be paid for by him; and, in addition, the indemnity for the increased expenses which may be necessary for the preservation of the party wall by reason of the greater height or depth which has been given it. If the party wall cannot bear the increased height, the owner desiring to raise it shall be obliged to reconstruct it at his own expense and, if for this purpose it be necessary to make it thicker, he shall give the space required from his own land. (577) Art. 665. The other owners who have not contributed in giving increased height, depth or thickness to the wall may, nevertheless, acquire the right of part-ownership therein, by paying proportionally the value of the work at the time of the acquisition and of the land used for its increased thickness. (578a) Art. 666. Every part-owner of a party wall may use it in proportion to the right he may have in the co-ownership, without interfering with the common and respective uses by the other co-owners. (579a)
120. Easement of Party Wall

[120.1] Nature of Party Wall
While our Civil Code recognizes the existence of co-ownership in a party wall,159 it is considered more of a servitude. This is to be seen in the way the concept is treated under the Civil Code it is discussed under the title on easement or servitude and not under the title on coownership. In ordinary co-ownership, none of the co-owners may do anything on the co-owed property for his own exclusive benet because he would be impairing the rights of others. But in a party wall, there
159
See Arts. 666 and 667, NCC.
553
is no such juridical limitation upon the action of the owner.160 And as explained by Senator Tolentino, when the law grants to the owners of a party wall the right to make in it works for the exclusive benet of the person making them, and not in the interest of the others, such grant cannot be by mere title of co-ownership, but by virtue of a right of servitude.161
[120.2] Presumption of Existence of Easement of Party Wall
The law presumes the existence of an easement of party wall in the following cases: (1) (2) (3) In dividing walls of adjoining buildings up to the point of common elevation; In dividing walls of gardens or yards situated in cities, towns or rural communities; and In fences, walls and live hedges dividing rural lands.162
This presumption will not, however, apply if: (1) there is title to the contrary; (2) there is an exterior sign to the contrary; and (3) there is proof to the contrary.163 It is understood, however, that there exists an exterior sign contrary to the easement of party wall in the following instances: (1) (2) Whenever in the dividing wall of buildings there is a window or opening; Whenever the dividing wall is, on one side, straight and plumb on all its facement, and on the other, it has similar conditions on the upper part, but the lower part slants or projects outward; Whenever the entire wall is built within the boundaries of one of the estates; Whenever the dividing wall bears the burden of the binding beams, oors and roof frame of one of the buildings, but not those of the others;
(3) (4)
2 Castan, 9th ed., 589, cited in II Caguioa, Civil Code of the Phil., 1966 ed., 305. II Tolentino, Civil Code of the Phil., 1992 ed., 396, citing 4 Manresa 762-763. 162 Art. 659, NCC. 163 Id.
160 161
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(5)
Whenever the dividing wall between courtyards, gardens, and tenements is constructed in such a way that the coping sheds the water upon only one of the estates; Whenever the dividing wall, being built of masonry, has stepping stones, which at certain intervals project from the surface on one side only, but not on the other; Whenever lands inclosed by fences or live hedges adjoin others which are not inclosed.164
(6)
(7)
In all the foregoing cases, the ownership of the walls, fences or hedges shall be deemed to belong exclusively to the owner of the property or tenement which has in its favor the presumption based on any one of the these signs.165 With respect to ditches or drains opened between two estates, there is also a presumption that they are common to both estates unless there is a sign or title to the contrary. There is a sign contrary to the part-ownership whenever the earth or dirt removed to open the ditch or to clean it is only on one side thereof, in which case the ownership of the ditch shall belong exclusively to the owner of the land having this exterior sign in its favor.166
[120.3] Rights and Obligations of Each Co-Owner of Party Wall [120.3.1] Right to Use
Every part-owner of a party wall may use it in proportion to the right he may have in the co-ownership even without the consent of the other owners so long as he does not interfere with the common and respective uses by the other co-owners.167
[120.3.2] Right to Increase Height of Party Wall
Every part-owner of a party has the right to increase the height of the party wall subject to the following conditions: (1) the same shall be done at his expense; (2) he shall pay for any damage which may be caused by his work, even though such damage may be temporary; and
Art. 660, NCC. Id. 166 Art. 661, NCC. 167 See Art. 666, NCC.
164 165
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(3) if the party wall cannot bear the increased height, the owner desiring to raise it shall be obliged to reconstruct it at his own expense, and, if for this purpose it be necessary to make it thicker, he shall give the space required from his own land.168 The co-ownership is maintained up to the point where the original wall extended. But with respect to the additional height, the same shall be exclusively owned by the part-owner at whose instance the party wall was raised. As a consequence, the expenses in maintaining the additional height, as well as the increase in expenses which may be necessary for the preservation of the party wall by reason of the greater height, shall be borne by him.169 The other owners may, however, acquire a proportionate share in the raised party wall by paying proportionately the value of the work at the time of the acquisition and of the land used for its increased thickness,170 in which case, all shall bear the expenses of maintaining the additional height in proportion to their respective interest in it.
[120.3.3] Repairs and Maintenance of Party Wall
The cost of repairs and construction of party walls and the maintenance of fences, live hedges, ditches, and drains owned in common, shall be borne by all the owners of the lands or tenements having the party wall in their favor, in proportion to the right of each. Nevertheless, any owner may exempt himself from contributing to this charge by renouncing his part-ownership, except when the party wall supports a building belonging to him.171 In case where the party wall supports a building, the owner of such building may renounce his part ownership of the party wall if he will demolish the building. But the cost of all repairs and work necessary to prevent any damage which the demolition may cause to the party wall on this occasion shall be borne by him.172
Art. 664, NCC. See Art. 694, 2nd par., NCC. 170 Art. 665, NCC. 171 Art. 662, NCC. 172 Art. 663, NCC.
168 169
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Section 5. Easement of Light and View

Art. 667. No part-owner may, without the consent of the others, open through the party wall any window or aperture of any kind. (580) Art. 668. The period of prescription for the acquisition of an easement of light and view shall be counted: (1) From the time of the opening of the window, if it is through a party wall; or (2) From the time of the formal prohibition upon the proprietor of the adjoining land or tenement, if the window is through a wall on the dominant estate. (n) Art. 669. When the distances in Article 670 are not observed, the owner of a wall which is not a party wall, adjoining a tenement or piece of land belonging to another, can make in it openings to admit light at the height of the ceiling joists or immediately under the ceiling, and of the size of thirty centimeters square, and, in every case, with an iron grating imbedded in the wall and with a wire screen. Nevertheless, the owner of the tenement or property adjoining the wall in which the openings are made can close them should he acquire part-ownership thereof, if there be no stipulation to the contrary. He can also obstruct them by constructing a building on his land or by raising a wall thereon contiguous to that having such openings, unless an easement of light has been acquired. (581a) Art. 670. No windows, apertures, balconies, or other similar projections which afford a direct view upon or towards an adjoining land or tenement can be made, without leaving a distance of two meters between the wall in which they are made and such contiguous property. Neither can side or oblique views upon or towards such conterminous property be had, unless there be a distance of sixty (60) centimeters. The nonobservance of these distances does not give rise to prescription. (582a) Art. 671. The distance referred to in the preceding article shall be measured in cases of direct views from the outer line of the wall when the openings do not project, from the outer line of the latter when they do, and in cases of oblique views from the dividing line between the two properties. (583) Art. 672. The provisions of Article 670 are not applicable to buildings separated by a public way or alley, which is not less than three meters wide, subject to special regulations and local ordinances. (584a)
557
Art. 673. Whenever by any title a right has been acquired to have direct views, balconies or belvederes overlooking an adjoining property, the owner of the servient estate cannot build thereon at less than a distance of three meters to be measured in the manner provided in Article 671. Any stipulation permitting distances less than those prescribed in Article 670 is void. (585a)
121. Easement of Light and View

[121.1] Concept
See the discussions in supra 114.2.

[121.2] Making an Opening in Party Wall
As discussed in supra 120.3.1, a part-owner of a party wall may use it even without the consent the consent of the other owners so long as he does not interfere in the common and respective uses by the other co-owners.173 No part-owner may, however, make an opening in a party wall without the consent of the other co-owners.174 If the same is done without the consent of the other co-owners, the latter may demand that what has been done be undone at the expense of the co-owner who made such opening.175 But if the same is done with the consent of the other co-owners, the 10-year period of prescription for the acquisition of an easement of light and view shall commence to run from the time of the making of such opening.176
[121.3] Acquisition of Easement of Light and View Through Prescription
See the discussions in supra 114.2.

[121.4] Observance of Certain Distances
The law prohibits the making of windows, apertures, balconies, or other similar projections which afford a direct view upon or towards an adjoining land or tenement without leaving a distance of two meters between the wall in which they are made and such contiguous property. With respect to the side or oblique views upon or towards such
See Art. 666, NCC. Art. 667, NCC. 175 See Art. 1168, NCC. 176 See Art. 668(1), NCC.
173 174
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conterminous property, the law requires that the distance be sixty (60) centimeters.177 Such distance shall be measured in cases of direct views from the outer line of the wall when the openings do not project, from the outer line of the latter when they do, and in cases of oblique view from the dividing line between the two properties.178 The foregoing requirement does not apply, however, to buildings separated by a public way or alley, which is not less than three meters wide, unless there is a special regulation and local ordinance which provides to the contrary.179 Now, what is the effect of violation of the foregoing distance requirement? When windows or balconies are opened in violation of the distance requirement in Article 670 of the Civil Code, the same may be ordered closed because they constitute unlawful openings.180 And as discussed in supra 114.2, the mere making of such opening does not result in the running of the 10-year prescriptive period for the acquisition of an easement of light and view. Since the easement is a negative one, the 10-year period begins to run only from the time of the formal prohibition mentioned in Articles 621 and 668 of the New Civil Code.
[121.5] Opening Where Distances Not Observed
If a building is right on the boundary line or the distances required in Article 670 are not observed, the owner of a wall adjoining a tenement or piece of land belonging to another, which is not a party wall, may not make an opening in the said wall except if the following conditions are present: (1) the opening must not be more than 30 centimeters square and made at the height of the ceiling joists or immediately under the ceiling, and with an iron grating imbedded in the wall and with a wire screen; and (2) it must be for the purpose of admitting light only and not for the purpose of view.181 If these conditions are violated, the owner of the tenement or property adjoining the wall may demand for its closure or he may compel that the foregoing requirements be complied
Art. 670, NCC. Art. 671, NCC. 179 Art. 672, NCC. 180 See Saenz v. Figueras Hermanos, 13 Phil. 328 and Choco v. Santamaria, 21 Phil. 132. 181 Art. 669, 1st par., NCC.
177 178
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with. Even in the absence of any violation, the owner of the adjacent property may close the opening should he acquire part ownership of the wall where the opening has been made, if there be no stipulation to the contrary.182 If the owner of the adjacent property is not entitled to demand for the closure of the said opening because there is no violation of the conditions outlined in the rst paragraph of Article 669 and he does not acquire part-ownership of the wall, he may, nonetheless, obstruct the opening by constructing a building on his land or by raising a wall thereon contiguous to that having such opening.183 This he can do because it is simply an exercise of his right of ownership over his property. He may not, however, resort to this remedy if the owner of the wall with the opening has already acquired an easement of light pursuant to the manner outlined in Articles 621 and 668 of the Civil Code. Section 6. Drainage of Buildings
Art. 674. The owner of a building shall be obliged to construct its roof or covering in such manner that the rain water shall fall on his own land or on a street or public place, and not on the land of his neighbor, even though the adjacent land may belong to two or more persons, one of whom is the owner of the roof. Even if it should fall on his own land, the owner shall be obliged to collect the water in such a way as not to cause damage to the adjacent land or tenement. (586a) Art. 675. The owner of a tenement or a piece of land, subject to the easement of receiving water falling from roofs, may build in such manner as to receive the water upon his own roof or give it another outlet in accordance with local ordinances or customs, and in such a way as not to cause any nuisance or damage whatever to the dominant estate. (587) Art. 676. Whenever the yard or court of a house is surrounded by other houses, and it is not possible to give an outlet through the house itself to the rain water collected thereon, the establishment of an easement of drainage can be demanded, giving an outlet to the water at the point of the contiguous lands or tenements where its egress may be easiest, and establishing a conduit for the drainage in such manner as to cause the least damage to the servient estate, after payment of the property indemnity. (583)
182 183
Art. 669, 2nd par., NCC. Art. 669, 3rd par., NCC.
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122. Easement of Drainage of Buildings

[122.1] Concept
The easement of drainage of buildings is the right to divert or empty the rain waters from ones own roof or shed to the neighbors estate either drop by drop or through conduits.184
[122.2] Ownership of Rain Waters
Pursuant to the provisions of the Water Code of the Philippines, rain waters falling on private lands shall belong to the State.185 However, any person who captures or collects water by means of cisterns, tanks or pools shall have exclusive control over such water and he shall also have the right to dispose of the same.186 The owner of the land where the rain waters fall may use the same even without securing a permit from the National Water Resources Council but only for domestic purposes.187 In cases where the owner of a building does not intend to collect the rain waters falling on the roof or covering of his building, he has the obligation to construct the roof or covering of his building in such manner that the rain waters shall fall on his own land or on street or public place, and not on the land of his neighbor, even though the adjacent land may belong to two or more persons, one of whom is the owner of the roof.188 And even if it should fall on his own land, he is also obligated to collect the water in such a way that it will not cause damage to the adjacent land or tenement.189
[122.3] Legal Easement of Drainage
An easement of drainage may be demanded subject to compliance with the following requisites: (1) The yard or court of a house must be surrounded by other houses (the dominant estate) and it is not possible to give an outlet through the house itself to the rain collected therefrom;
2 Castan, 9th ed., 594. Art. 6(c), Water Code of the Phils. 186 Art. 7, Water Code of the Phils. 187 Art. 6, last par., Water Code of the Phils. 188 Art. 674, NCC. 189 Id.
184 185
561
(2)
The outlet to the water must be at the point of the contiguous lands or tenements (the servient estate) where its egress may be easiest; The conduit for the drainage must be established in such manner as to cause the least damage to the servient estate; and Proper indemnity must be paid to the owner of the servient estate.190 Section 7. Intermediate Distances and Works for Certain Constructions and Plantings
(3)
(4)
Art. 677. No constructions can be built or plantings made near fortied places or fortresses without compliance with the conditions required in special laws, ordinances, and regulations relating thereto. (589) Art. 678. No person shall build any aqueduct, well, sewer, furnace, forge, chimney, stable, depository of corrosive substances, machinery, or factory which by reason of its nature or products is dangerous or noxious, without observing the distances prescribed by the regulations and customs of the place, and without making the necessary protective works, subject, in regard to the manner thereof, to the conditions prescribed by such regulations. These prohibitions cannot be altered or renounced by stipulation on the part of the adjoining proprietors. In the absence of regulations, such precautions shall be taken as may be considered necessary, in order to avoid any damage to the neighboring lands or tenements. (590a) Art. 679. No trees shall be planted near a tenement or piece of land belonging to another except at the distance authorized by the ordinances or customs of the place, and, in the absence thereof, at a distance of at least two meters from the dividing line of the estates if tall trees are planted and at a distance of at least fty centimeters if shrubs or small trees are planted. Every landowner shall have the right to demand that trees hereafter planted at a shorter distance from his land or tenement be uprooted. The provisions of this article also apply to trees which have grown spontaneously. (591a) Art. 680. If the branches of any tree should extend over a neighboring estate, tenement, garden or yard, the owner of the latter shall have the
190
Art. 676, NCC.
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right to demand that they be cut off insofar as they may spread over his property, and, if it be the roots of a neighboring tree which should penetrate into the land of another, the latter may cut them off himself within his property. (592) Art. 681. Fruits naturally falling upon adjacent land belong to the owner of said land. (n)
123. Intermediate Distances for Planting

[123.1] Distance to Be Observed in Case of Planting Trees
Article 679 of the New Civil Code prohibits the planting of trees near a tenement or piece of land belonging to another person unless the following distance requirement is observed: (a) (b) the distance authorized by local ordinances or customs of the place, if any; or in default of the foregoing, at a distance of at least two (2) meters from the dividing line of the estate in case of tall trees and at a distance of at least 50 centimeters in case of shrubs or small trees.
If the foregoing distance requirement is not followed, the owner of the adjacent land has the right to demand for the uprooting of the trees which were planted in violation of the rule.191 This remedy is also available to the owner of the adjacent land even with respect to trees which have grown spontaneously at distances shorter than that mentioned in the immediately preceding paragraph.192
[123.2] Right To Cut Branches and Roots
If the branches of any tree should extend over a neighboring estate, tenement, garden or yard, the owner of the latter does not have the right to take the matter into his own hand by cutting of the branches extending on his property. Instead, he may demand that the protruding branches be cut-off by its owner. If his demand is not acted upon, he has to go to court to seek authority for the cutting of the protruding branches.193
See Art. 679, 2nd par., NCC. See Art. 679, 3rd par., NCC. 193 Art. 680, NCC.
191 192
563
But with respect to the roots of a neighboring tree which penetrated into the land of another, the owner of the latter may himself cut off the roots found within his property. The reason for the difference is that with respect to the roots, the same belong to the owner of the land where it is found by reason of incorporation.194 This right of the adjacent owner does not prescribe unless he has been, by a formal act, prohibited by the owner of the tree from cutting off the roots of the tree, in which case, the ten-year prescriptive period for the establishment of a negative easement will commence to run.195
[123.3] Fruits Naturally Falling
By way of exception to the rule in Article 441 that the fruits belong to the owner of the trees, fruits which are naturally falling upon adjacent land belong to the owner of the said land.196 This rule has a practical purpose which is to discourage the act of allowing branches to protrude over anothers land.197 This rule, however, does not apply to cases where the fruits naturally fall on a public property in which case, the owner of the tree retains ownership. Section 8. Easement Against Nuisance (n)
Art. 682. Every building or piece of land is subject to the easement which prohibits the proprietor or possessor from committing nuisance through noise, jarring, offensive odor, smoke, heat, dust, water, glare and other causes. Art. 683. Subject to zoning, health, police and other laws and regulations, factories and shops may be maintained provided the least possible annoyance is caused to the neighborhood.
Section 9. Lateral and Subjacent Support (n)

Art. 684. No proprietor shall make such excavations upon his land as to deprive any adjacent land or building of sufcient lateral or subjacent support. Art. 685. Any stipulation or testamentary provision allowing excavations that cause danger to an adjacent land or building shall be void.
2 Castan, 9th ed., 596-597. See Art. 621, NCC. 196 Art. 681, NCC. 197 Report of the Code Commission, p. 8.
194 195
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Art. 686. The legal easement of lateral and subjacent support is not only for buildings standing at the time the excavations are made but also for constructions that may be erected. Art. 687. Any proprietor intending to make any excavation contemplated in the three preceding articles shall notify all owners of adjacent lands.
124. Legal Easement of Lateral and Subjacent Support

[124.1] Concept
The right of lateral and subjacent support is the right to have land supported by the adjoining land or the soil beneath.198 Each of two adjoining landowners is entitled to the support of the others land.199 Support is lateral when the supported and the supporting lands are divided by a vertical plane. Support is subjacent when the supported land is above and the supporting land is beneath it.200
[124.2] Easement of Lateral and Subjacent Support
The right of lateral support ordinarily exists only with respect to the soil in its natural condition,201 but our Civil Code expressly includes buildings in the protection of this easement. In the words of the Code Commission, this kind of easement or servitude is so essential to the stability of buildings.202 With this purpose in mind, the law prohibits any excavation upon ones land if the same will deprive any adjacent land or building of sufcient lateral or subjacent support.203 In addition, the law prohibits any stipulation or testamentary provision allowing such kind of excavation.204 Any such stipulation or testamentary provision is expressly declared to be void.205 Note that the easement of lateral and subjacent support is a negative one it is in the form of prohibition on the part of a landowner from making any excavation that will deprive the adjacent land or building of sufcient lateral or subjacent support. If the right of lateral and
Blacks Law Dictionary, 5th ed., 795. Bouviers Law Dictionary, Vol. 2, 3rd revision, 1871. 200 Restatement of the Law of Torts, Vol. IV, p. 184. 201 Northern Transportation Co. v. Chicago, 99 U.S. 635, 25 L. Ed. 336. 202 Report of the Code Commission, p. 51. 203 Art. 684, NCC. 204 Art. 685, NCC. 205 Id.
198 199
PROPERTY, OWNERSHIP, AND ITS MODIFICATION EASEMENTS OR SERVITUDES Voluntary Easements
565
subjacent support is violated, the adjoining landowner is entitled to seek injunctive relief, in addition to the right to recover damages. Chapter 3 VOLUNTARY EASEMENTS
Art. 688. Every owner of a tenement or piece of land may establish thereon the easements which he may deem suitable, and in the manner and form which he may deem best, provided he does not contravene the laws, public policy or public order. (594) Art. 689. The owner of a tenement or piece of land, the usufruct of which belongs to another, may impose thereon, without the consent of the usufructuary, any servitudes which will not injure the right of usufruct. (595) Art. 690. Whenever the naked ownership of a tenement or piece of land belongs to one person and the benecial ownership to another, no perpetual voluntary easement may be established thereon without the consent of both owners. (596) Art. 691. In order to impose an easement on an undivided tenement, or piece of land, the consent of all the co-owners shall be required. The consent given by some only, must be held in abeyance until the last one of all the co-owners shall have expressed his conformity. But the consent given by one of the co-owners separately from the others shall bind the grantor and his successors not to prevent the exercise of the right granted. (597a) Art. 692. The title and, in a proper case, the possession of an easement acquired by prescription shall determine the rights of the dominant estate and the obligations of the servient estate. In default thereof, the easement shall be governed by such provisions of this Title as are applicable thereto. (598) Art. 693. If the owner of the servient estate should have bound himself, upon the establishment of the easement, to bear the cost of the work required for the use and preservation thereof, he may free himself from this obligation by renouncing his property to the owner of the dominant estate. (599)
125. Voluntary Easement

[125.1] Concept
As discussed in supra 112.2, an easement may either be compulsory or voluntary. It is compulsory if it can be demanded by the claim-
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ant as a matter of right upon payment of the proper indemnity. If the claimant is not entitled to demand for an easement as a matter of right because the requisites for legal easement are not present, the easement may only be constituted upon the will of the owner of the servient estate in which case, the easement is classied as voluntary. Note that only the owner of the property may constitute an easement over a tenement because the creation of a servitude is a disposition of a part of the right of ownership and only an owner can do that.
[125.2] Establishment of Easement on Property Held in Usufruct
Since easement consists of a limited use and enjoyment of the thing without possession, the establishment of a voluntary easement on a tenement or piece of land is not inconsistent with the existence of a usufruct over the same property. Hence, the owner of such tenement or piece of land may impose any servitude thereon and he may do so even without the consent of the usufructuary.206 As discussed in supra 125.1, it is only the owner of the tenement or piece of land who may constitute an easement over his property. If it is the usufructuary who will impose the same servitude upon the property held in usufruct, it is not, in reality, an easement or servitude because it will not bind the owner or the property itself. In short, the right created is not a real one but a mere personal right which is binding against the usufructuary only. Hence, upon the termination of the usufruct the burden so imposed by the usufructuary likewise ceases.
[125.3] Easement Over A Co-Owned Property
If the tenement or piece of land is in a state of co-ownership, the unanimous consent of all co-owners is required in order to constitute a voluntary easement upon the same.207 Consent by the co-owners may be given by them either simultaneously or successively. In the latter case, the consent given by one of the co-owners separately from the others shall already bind him and his successors. In other words, he cannot later on change his mind and withdraw his consent if the other co-owners subsequently decide to give their consent.208
Art. 689, NCC. Art. 691, 1st par., NCC. 208 Art. 691, par. 3, NCC.
206 207
PROPERTY, OWNERSHIP, AND ITS MODIFICATION EASEMENTS OR SERVITUDES Voluntary Easements
567
[125.4] Abandonment of Property
If upon the establishment of a voluntary easement, the owner of the servient estate bound himself to bear the cost of the work required for the use and preservation of the easement he may free himself from this obligation by renouncing his property to the owner of the dominant estate.209 The owner of the servient estate need not renounce his ownership over the entire property if the servitude affects only a part thereof in which case, he may abandon only that part which is burdened with the servitude. Needless to say, if the servitude affects the entire servient tenement, the abandonment must be total.210 Must the abandonment be reduced in some form? Since the abandonment contemplated in Article 693 of the New Civil Code produces the transmission of ownership over a real property, the law (Article 1358, par. 1 of the New Civil Code) requires that the same must appear in a public document. However, the provision of Article 1358 of the Civil Code on the necessity of a public document is only for convenience, not for validity or enforceability.211 oOo
Art. 693, NCC. 4 Manresa, 5th ed., 744-746. 211 Dalion v. Court of Appeals, 182 SCRA 872, 877 (1990).
209 210
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Title VIII. NUISANCE (n)

Art. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything else which: (1) (2) (3) Injures or endangers the health or safety of others; or Annoys or offends the senses; or Shocks, dees or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or (5) Hinders or impairs the use of property.
126
Concept
[126.1] Denition
The law of nuisance is neither simple nor rigorous. In fact, commentators have described nuisance doctrine as so complex and uncertain that it amounts to an impenetrable jungle.1 Indeed, nuisance is a exible area of the law that is adaptable to a wide variety of factual situations2 because the term nuisance itself is incapable of an exact and exhaustive denition which will t all cases, because the controlling facts are seldom alike, and each case stands on its own footing.3 The word nuisance is derived from the French word nuire which means to injure, hurt or harm. Literally, therefore, it means annoyance, anything that works hurt or injury.4 The concept of nuisance is so broad that it covers anything that unlawfully works hurt, inconvenience or damage.5 Hence, our Civil Code denes it in Article 694 as any act,
See William L. Prosser, Torts 571, 4th ed. (1971). Sharon Steel Corp. v. City of Fairmont, 175 W.Va. 479, 483, 334 S.E.2d 616, 621 (1985). 3 Harless v. Workman, 145 W.Va. 266, 273-274, 114 S.E.2d 548, 552 (1960). 4 Lebayen v. A.S. Diaz Electrical Service, Inc., 1 CA Rep. 178. 5 3 Bla. Com. 5, 216, cited in Bouviers Law Dictionary, 3rd revised ed., Vol. II, p. 2379.
1 2
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PROPERTY, OWNERSHIP, AND ITS MODIFICATION NUISANCE (N)
569
omission, establishment, business, condition of property or anything else which injures or endangers the health or safety of others; annoys or offends the senses, shocks, dees or disregards decency or morality, obstructs or interferes with the free passage of any public highway or street, or any body of water or hinders or impairs the use of property. It has also been dened as that class of wrongs that arise from the unreasonable, unwarrantable, or unlawful use by a person of his own property, either real or personal, or from his own improper, indecent, or unlawful personal conduct, working an obstruction of or injury to the right of another or of the public, and producing such material annoyance, inconvenience, discomfort, or hurt, that the law will presume resulting damage.6 From the foregoing denitions, a nuisance could be anything it could be an act or omission of a person or simply an establishment, business or condition of a property or anything else which interferes with the rights of a citizen, either in person, property, the enjoyment of his property, or his comfort.
[126.2] Nuisance and Tort
In supra 36.3, it was explained that that every holder of property, however absolute and unqualied may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community. As a consequence, Article 431 of the New Civil Code specically mandates that the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person. The law on nuisance further claries the rule stated in Article 431. Clearly therefore, the law on nuisance is a restriction or limitation upon ownership and a manifestation of the principle that every person should so use his property as not to cause damage or injury to others sic utere tuo ut alienum non laedas.7
6 City of Phoenix v. Johnson, 51 Ariz. 115, 75 P. 2d 30, cited in Blacks Law Dictionary, 5th ed., 961. 7 Lebayen v. A.S. Diaz Electric Service, Inc., 1 CA Rep. 178.
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If a nuisance will result in injury to another person, the provisions of Articles 696, 697, 699, 703 and 705 allow recovery of damages. But in such cases, the source of obligation of the person responsible to pay damages is quasi delict or tort. As explained by Judge Sangco,8 a nuisance is a tort, governed by the rules on tort generally, so that, as in the case of other torts, legal liability for a nuisance is predicated on an invasion of the plaintiffs legal rights by an act not warranted by law, or from a neglect of duty imposed by law, that results in damage to another.
[126.3] Distinguished From Negligence
While nuisance is a tort, it differs, however, from negligence. It has been held that the legal basis of liability for nuisance is not negligence but the resulting injury to others regardless of the degree of care or skill exercised to avoid such injury.9 Stated otherwise, liability for negligence is based on want of a proper care, while, ordinarily, a person who creates or maintains a nuisance is liable for the resulting injury to others regardless of the degree of care or skill exercised to avoid such injury.10 However, a nuisance may be and frequently is the consequence of negligence, or the same acts or omissions which constitute negligence may give rise to a nuisance.11
Art. 695. Nuisance is either public or private. A public nuisance affects a community or neighborhood or any considerable number of persons, although the extent of the annoyance, danger or damage upon individuals may be unequal. A private nuisance is one that is not included in the foregoing denition.
127. Classications of Nuisance

[127.1] Public and Private Nuisance
A nuisance is either public or private. A public nuisance affects a community or neighborhood or any considerable number of persons, although the extent of the annoyance, danger or damage upon individuals
Judge Sangco, Phil. Law on Torts and Damages, Vol. 2, 1994 ed., pp. 885-886. 39 Am Jur. 282, cited in Lebayen v. A.S. Diaz Electric Service, Inc., 1 CA Rep. 178. 10 Id. 11 Lebayen v. A.S. Diaz Electric Service, Inc., 1 CA Rep. 178.
8 9
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may be unequal.12 A private nuisance, on the other hand, affects only an individual or a limited number of individuals.13 As distinguished from a public nuisance, a private nuisance includes any wrongful act which destroys or deteriorates the property of an individual or of a few persons or interferes with their lawful use or enjoyment thereof, or any act which unlawfully hinders them in the enjoyment of a common or public right and causes them a special injury different from that sustained by the general public.14 Therefore, although the ground of distinction between public and private nuisances is still the injury to the community at large or, on the other hand, to a single individual, it is evident that the same thing or act may constitute a public nuisance and at the same time a private nuisance.15 A mixed nuisance is of the kind last described; that is, it is one which is both public and private in its effects, public because it injures many persons or all the community, and private in that it also produces special injuries to private rights.16
[127.1.1] Private Nuisance Distinguished From Trespass to Land
Claims of trespass and nuisance are difcult to distinguish and include overlapping concepts. The essential difference however, between the two is that trespass is an invasion of the plaintiffs interest in the exclusive possession of his land, while nuisance is an interference with his use and enjoyment of it.17 Stated otherwise, a nuisance consists of a use of ones own property in such a manner as to cause injury to the property or other right or interest of another and generally results from the commission of an act beyond the limits of the property affected, while trespass is a direct infringement of anothers right of property.18 Thus, where there is no actual physical invasion of the plaintiffs property, the cause of action is for nuisance rather than trespass.19 Given that trespass is typically clear and strict, and nuisance is typically not clear or strict, the boundary between interferences governed
Art. 695, NCC. Art. 695, NCC; see also 39 Am. Jr., Sec. 7, 284-2856. 14 Blacks Law Dictionary, 5th ed., 961. 15 Id. 16 Id., 961-962, citing Kelley v. New York, 6 Misc. 516, 27 N.Y.S. 164. 17 Adams v. Cleveland-Cliffs Iron Co., 237 Mich. App. 51, 602 N.W.2d 215 (1999); Hadeld v. Oakland County Drain Commissioner, 430 Mich. 139, 151, 422 N.W.2d 205 (1988). 18 39 Am. Jur. 282, cited in II Caguioa, Civil Code of the Philippines, 1966 ed., 332. 19 Id.
12 13
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by trespass and those governed by nuisance would seem to be a matter of some importance. In principle, the boundary between trespass and nuisance is xed by the nature of the interests these actions are said to protect: Trespass is said to protect the interest in possession of land, while nuisance is said to protect the use and enjoyment of land. Unlike nuisance, the law of intentional trespass is exceptionally simple and exceptionally rigorous.20 Any intentional intrusion that deprives another of possession of land, even if only temporarily, is considered a trespass,21 and one who commits an intentional trespass is subject to liability irrespective of whether he thereby causes any harm to any legally protected interest of the other.22 There is no inquiry therefore into the balance of interests between the plaintiff and defendant or whether the intrusion was reasonable. This is so because the private landowners right to exclude others from his or her land is one of the most essential sticks in the bundle of rights that are commonly characterized as property.23 The case of Jacque v. Steenberg Homes, Inc.,24 a case decided by the Supreme Court of Wisconsin in the United States of America, is a good example of a case showing trespass to land.
Jacque v. Steenberg Homes, Inc. Supreme Court of Wisconsin, 1997 563 N.W.2d 154 WILLIAM A. BABLITCH, Justice. Steenberg Homes had a mobile home to deliver. Unfortunately for Harvey and Lois Jacque (the Jacques), the easiest route of delivery was across their land. Despite adamant protests by the Jacques, Steenberg plowed a path through the Jacques snow-covered eld and via that path, delivered the mobile home. Consequently, the Jacques sued Steenberg Homes for intentional trespass. At trial, Steenberg Homes conceded the intentional trespass, but argued that no compensatory damages had been proved, and that punitive damages could not be awarded without compensatory damages. Although the jury awarded the Jacques $1 in nominal damages and $100,000 in punitive damages, the circuit
William L. Prosser, Torts 63 (4th ed., 1971). Restatement (Second) of Torts 158. 22 Id. 23 Jacque v. Steenberg Homes, Inc., 563 N.W.2d 154. 24 563 N.W.2d 154 (1997).
20 21
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court set aside the jurys award of $100,000. The court of appeals afrmed, reluctantly concluding that it could not reinstate the punitive damages because it was bound by precedent establishing that an award of nominal damages will not sustain a punitive damage award. * * * I. The relevant facts follow. Plaintiffs, Lois and Harvey Jacques, are an elderly couple, now retired from farming, who own roughly 170 acres near Wilkes Lake in the town of Schleswig. The defendant, Steenberg Homes, Inc. (Steenberg), is in the business of selling mobile homes. In the fall of 1993, a neighbor of the Jacques purchased a mobile home from Steenberg. Delivery of the mobile home was included in the sales price. Steenberg determined that the easiest route to deliver the mobile home was across the Jacques land. Steenberg preferred transporting the home across the Jacques land because the only alternative was a private road which was covered in up to seven feet of snow and contained a sharp curve which would require sets of rollers to be used when maneuvering the home around the curve. Steenberg asked the Jacques on several separate occasions whether it could move the home across the Jacques farm eld. The Jacques refused. The Jacques were sensitive about allowing others on their land because they had lost property valued at over $10,000 to other neighbors in an adverse possession action in the mid-1980s. Despite repeated refusals from the Jacques, Steenberg decided to sell the mobile home, which was to be used as a summer cottage, and delivered it on February 15, 1994. On the morning of delivery, Mr. Jacque observed the mobile home parked on the corner of the town road adjacent to his property. He decided to nd out where the movers planned to take the home. The movers, who were Steenberg employees, showed Mr. Jacque the path they planned to take with the mobile home to reach the neighbors lot. The path cut across the Jacques land. Mr. Jacque informed the movers that it was the Jacques land they were planning to cross and that Steenberg did not have permission to cross their land. He told them that Steenberg had been refused permission to cross the Jacques land. One of Steenbergs employees called the assistant manager, who then came out to the Jacques home. In the meantime, the Jacques called and asked some of their neighbors and the town chairman to come over immediately. Once everyone was present, the Jacques showed the assistant manager an aerial map and plat book of the township to prove their ownership of the land, and reiterated their demand that the home not be moved across their land. At that point, the assistant manager asked Mr. Jacque how much money it would take to get permission. Mr. Jacque responded that it was not a question
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of money; the Jacques just did not want Steenberg to cross their land. Mr. Jacque testied that he told Steenberg to [F]ollow the road, that is what the road is for. Steenberg employees left the meeting without permission to cross the land. At trial, one of Steenbergs employees testied that, upon coming out of the Jacques home, the assistant manager stated: I dont give a what [Mr. Jacque] said, just get the home in there any way you can. The other Steenberg employee conrmed this testimony and further testied that the assistant manager told him to park the company truck in such a way that no one could get down the town road to see the route the employees were taking with the home. The assistant manager denied giving these instructions, and Steenberg argued that the road was blocked for safety reasons. The employees, after beginning down the private road, ultimately used a bobcat to cut a path through the Jacques snow-covered eld and hauled the home across the Jacques land to the neighbors lot. One employee testied that upon returning to the ofce and informing the assistant manager that they had gone across the eld, the assistant manager reacted by giggling and laughing. The other employee conrmed this testimony. The assistant manager disputed this testimony. When a neighbor informed the Jacques that Steenberg had, in fact, moved the mobile home across the Jacques land, Mr. Jacque called the Manitowoc County Sheriffs Department. After interviewing the parties and observing the scene, an ofcer from the sheriffs department issued a $30 citation to Steenbergs assistant manager. * * * This case presents three issues: (1) whether an award of nominal damages for intentional trespass to land may support a punitive damage award and, if so; (2) whether the law should apply to Steenberg or should only be applied prospectively and, if we apply the law to Steenberg; (3) whether the $100,000 in punitive damages awarded by the jury is excessive. * * * II. * * * Steenberg argues that, as a matter of law, punitive damages could not be compensatory damages and here the jury awarded only nominal and punitive damages. The Jacques contend that the rationale supporting the compensatory damage award requirement is inapposite when the wrongful act is an intentional trespass to land. We agree with the Jacques. * * * The general rule was stated in Barnard v. Cohen, 162 N.W. 480 (Wis. 1917), where the question presented was: In an action for libel, can there be a recovery of punitory damages if only nominal compensatory damages are found? With the bare assertion that authority and better reason supported its
575
conclusion, the Barnard court said no. Barnard continues to state the general rule of punitive damages in Wisconsin. See Tucker v. Marcus, 418 N.W.2d 818, 823-24 (Wis. 1988). The rationale for the compensatory damage requirement is that if the individual cannot show actual harm, he or she has but a nominal interest, hence, society has little interest in having the unlawful, but otherwise harmless, conduct deterred, therefore, punitive damages are inappropriate. Jacque v. Steenberg Homes, Inc., 548 N.W.2d 80 (Wis. Ct. App. 1996); Maxwell v. Kennedy, 7 N.W. 657, 658-59 (Wis. 1880). However, whether nominal damages can support a punitive damage award in the case of an intentional trespass to land has never been squarely addressed by this court. Nonetheless, Wisconsin law is not without reference to this situation. In 1854 the court established punitive damages, allowing the assessment of damages as a punishment to the defendant for the purpose of making an example. McWilliams v. Bragg, 3 Wis. 424, 425 (1854). The McWilliams court related the facts and an illustrative tale from the English case of Merest v. Harvey, 128 Eng. Rep. 761 (C.P. 1814), to explain the rationale underlying punitive damages. In Merest, a landowner was shooting birds in his eld when he was approached by the local magistrate who wanted to hunt with him. Although the landowner refused, the magistrate proceeded to hunt. When the landowner continued to object, the magistrate threatened to have him jailed and dared him to le suit. Although little actual harm had been caused, the English court upheld damages of 500 pounds, explaining in a case where a man disregards every principle which actuates the conduct of gentlemen, what is to restrain him except large damages? McWilliams, 3 Wis. 424 at 428. To explain the need for punitive damages, even where actual harm is slight, McWilliams related the hypothetical tale from Merest of an intentional trespasser: Suppose a gentleman has a paved walk in his paddock, before his window, and that a man intrudes and walks up and down before the window of his house, and looks in while the owner is at dinner, is the trespasser permitted to say here is a halfpenny for you which is the full extent of the mischief I have done. Would that be a compensation? I cannot say that it would be. . . . McWilliams, 3 Wis. at 428. Thus, in the case establishing punitive damages in this state, this court recognized that in certain situations of trespass, the actual harm is not in the damage done to the land, which may be minimal, but in the loss of the individuals right to exclude others from his or her property and, the court implied that this right may be punished by a large damage award despite the lack of measurable harm.
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* * * The Jacques argue that both the individual and society have signicant interests in deterring intentional trespass to land, regardless of the lack of measurable harm that results. We agree with the Jacques. An examination of the individual interests invaded by an intentional trespass to land, and societys interests in preventing intentional trespass to land, leads us to the conclusion that the Barnard rule should not apply when the tort supporting the award is intentional trespass to land. We turn rst to the individual landowners interest in protecting his or her land from trespass. The United States Supreme Court has recognized that the private landowners right to exclude others from his or her land is one of the most essential sticks in the bundle of rights that are commonly characterized as property. Dolan v. City of Tigard, 512 U.S. 374, 384 (1994). This court has long recognized [e]very persons] constitutional right to the exclusive enjoyment of his own property for any purpose which does not invade the rights of another person. Diana Shooting Club v. Lamoreaux, 89 N.W. 880, 886 (Wis. 1902) (holding that the victim of an intentional trespass should have been allowed to take judgment for nominal damages and costs). Thus, both this court and the Supreme Court recognize the individuals legal right to exclude others from private property. Yet a right is hollow if the legal system provides insufcient means to protect it. Felix Cohen offers the following analysis summarizing the relationship between the individual and the state regarding property rights: [T]hat is property to which the following label can be attached: To the world: Keep off X unless you have my permission, which I may grant or withhold. Signed: Private Citizen Endorsed: The state Felix S. Cohen, Dialogue on Private Property, 9 Rutgers Law Review 357, 374 (1954). Harvey and Lois Jacque have the right to tell Steenberg Homes and any other trespasser, No, you cannot cross our land. But that right has no practical meaning unless protected by the State. And, as this court recognized as early as 1854, a halfpenny award does not constitute state protection. The nature of the nominal damage award in an intentional trespass to land case further supports an exception to Barnard. Because a legal right is involved, the law recognizes that actual harm occurs in every trespass. The action for intentional trespass to land is directed at vindication of the legal
577
right. W. Page Keeton, Prosser and Keeton on Torts, 13 (5th ed. 1984). The law infers some damage from every direct entry upon the land of another. Id. The law recognizes actual harm in every trespass to land whether or not compensatory damages are awarded. Id. Thus, in the case of intentional trespass to land, the nominal damage award represents the recognition that, although immeasurable in mere dollars, actual harm has occurred. The potential for harm resulting from intentional trespass also supports an exception to Barnard. A series of intentional trespasses, as the Jacques had the misfortune to discover in an unrelated action, can threaten the individuals very ownership of the land. The conduct of an intentional trespasser, if repeated, might ripen into prescription or adverse possession and, as a consequence, the individual landowner can lose his or her property rights to the trespasser. See Wis. Stat. 893.28. In sum, the individual has a strong interest in excluding trespassers from his or her land. Although only nominal damages were awarded to the Jacques, Steenbergs intentional trespass caused actual harm. We turn next to societys interest in protecting private property from the intentional trespasser. Society has an interest in punishing and deterring intentional trespassers beyond that of protecting the interests of the individual landowner. Society has an interest in preserving the integrity of the legal system. Private landowners should feel condent that wrongdoers who trespass upon their land will be appropriately punished. When landowners have condence in the legal system, they are less likely to resort to selfhelp remedies. In McWilliams, the court recognized the importance of prevent[ing] the practice of dueling, [by permitting] juries to punish insult by exemplary damages. McWilliams, 3 Wis. at 428. Although dueling is rarely a modern form of self-help, one can easily imagine a frustrated landowner taking the law into his or her own hands when faced with a brazen trespasser, like Steenberg, who refuses to heed no trespass warnings. People expect wrongdoers to be appropriately punished. Punitive damages have the effect of bringing to punishment types of conduct that, though oppressive and hurtful to the individual, almost invariably go unpunished by the public prosecutor. Kink v. Combs, 135 N.W.2d 789 (Wis. 1965). The $30 forfeiture was certainly not an appropriate punishment for Steenbergs egregious trespass in the eyes of the Jacques. It was more akin to Merests halfpenny. If punitive damages are not allowed in a situation like this, what punishment will prohibit the intentional trespass to land? Moreover, what is to stop Steenberg Homes from concluding, in the future, that delivering its mobile homes via an intentional trespass and paying the resulting Class B forfeiture, is not more protable than obeying the law? Steenberg Homes plowed a path across the Jacques land and dragged the mobile home across that path, in the face of the
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Jacques adamant refusal. A $30 forfeiture and a $1 nominal damage award are unlikely to restrain Steenberg Homes from similar conduct in the future. An appropriate punitive damage award probably will. In sum, as the court of appeals noted, the Barnard rule sends the wrong message to Steenberg Homes and any others who contemplate trespassing on the land of another. It implicitly tells them that they are free to go where they please, regardless of the landowners wishes. As long as they cause no compensable harm, the only deterrent intentional trespassers face is the nominal damage award of $1, the modern equivalent of Merests halfpenny, and the possibility of a Class B forfeiture under Wis. Stat. 943.13. We conclude that both the private landowner and society have much more than a nominal interest in excluding others from private land. Intentional trespass to land causes actual harm to the individual, regardless of whether that harm can be measured in mere dollars. Consequently, the Barnard rationale will not support a refusal to allow punitive damages when the tort involved is an intentional trespass to land. Accordingly, assuming that the other requirements for punitive damages have been met, we hold that nominal damages may support a punitive damage award in an action for intentional trespass to land. * * * In conclusion, we hold that when nominal damages are awarded for an intentional trespass to land, punitive damages may, in the discretion of the jury, be awarded. Our decision today shall apply to Steenberg Homes. Finally, we hold that the $100,000 punitive damages awarded by the jury is not excessive. Accordingly, we reverse and remand to the circuit court for reinstatement of the punitive damage award. [127.1.2] Requisites for Recovery Under Private Nuisance
The concept of private nuisance is not so well-developed in Philippine jurisprudence unlike in other jurisdictions. Most of the cases decided by the Philippine Supreme Court applying the law of nuisance involved mainly the concept of abatement of nuisances and distinctions between nuisance per se and nuisance per accidens. As distinguished from trespass to land, a private nuisance has been dened as a substantial and unreasonable interference with the private use and enjoyment of anothers land.25 Hence, the essence of a private nuisance claim is the protection of a property owners interest in the private use and enjoyment of his land.26 In order for a private nuisance
25 26
Hendricks v. Stalnaker, 380 S.E.2d 198, 200-202 (W.Va. 1989). Adkins v. Thomas Solvent Co, 440 Mich 293, 302; 487 NW2d 715 (1992).
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suit to prosper, the plaintiff must be able to prove two things: (1) that there was damage to the property;27 and (2) the interference is either: (a) intentional and unreasonable; or (b) or unintentional and otherwise negligent or reckless conduct; or (c) resulting in abnormally dangerous activities in an inappropriate place.28
(i) There Must Be Damage
Unlike in trespass to land which does not require damage to the property in order for the plaintiff to recover damages,29 it is necessary in private nuisance that the plaintiff must suffer some form of damage. Damage may be proved in one of two ways: (1) by proving physical damage to the property (otherwise known as tangible nuisance); or (2) by proving personal discomfort (loss of amenity) in the claimants use of the premises (otherwise known as intangible nuisance). To succeed in private nuisance, the claimant must ordinarily show damage to the property. If there were physical harm to property (for example, damage to trees and shrubs) then it would be necessary only to show that the harm had been caused by the defendants action and that some kind of harm was a foreseeable consequence of the defendants action. For example, in St. Helens Smelting v. Tipping,30 a case decided by the English court in 1865, damage was caused to the claimants trees by fumes from an industrial plant, which is a clear case of a nuisance. If the land is physically affected, damage may be presumed by the court, even if the claimant cannot show that his land has diminished in value. In Hunter v. Canary Wharf, Ltd. and Hunter v. London Docklands Development Corp.,31 it was held that the deposit of dust on the claimants land was held to be capable of amounting to damage, even though the claimant had not shown that the value of his land had been adversely affected. If the damage relates to the amenity of the land, rather than its physical state or condition, a claim for private nuisance may likewise prosper if the defendants actions cause the land to become less valuable. For example, noise from a go-kart track was held in other jurisdictions
St. Helens Smelting Co. v. Tipping, II ER 1483 (1865). Hendricks v. Stalnaker, supra; Restatement (Second) Torts 822. 29 See Jacque v. Steenberg Homes, Inc., supra. 30 II ER 1483 (1865). 31 (1997) AC 655.
27 28
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PROPERTY
to be an actionable nuisance,32 as was the bad smell emanating form a pig farm.33 In the case, however, of Hunter v. Canary Wharf, Ltd., and Hunter v. London Docklands Development Corp., supra, it was held that interference with television reception due to the construction of a tall tower was not actionable in either public or private nuisance as an interference with the use or enjoyment of land.
(ii) Substantial, Intentional and Unreasonable Interference
After proving that there is damage to the property, the plaintiff is likewise required to prove that the interference with the private use and enjoyment of anothers land is either: (a) intentional and unreasonable; or (b) or unintentional and otherwise negligent or reckless conduct; or (c) resulting in abnormally dangerous activities in an inappropriate place.34 Interference is intentional when the actor knows or should know that the conduct is causing a substantial and unreasonable interference.35 The unreasonableness of an intentional interference must be determined by a balancing of the landowners interests.36 Interference is unreasonable when the gravity of the harm outweighs the social value of the activity alleged to cause the harm.37 In other words, there is only a nuisance if the annoyance outweighs the utility to the actor and to society as a whole. This is known as the doctrine of comparative utility or balancing of utilities doctrine.
Hendricks v. Stalnaker Supreme Court of Appeals of West Virginia, 1989 380 S.E.2d 198 NEELY, Justice: Walter S. Stalnaker, defendant below, appeals from a decision by the Circuit Court of Lewis County declaring a water well drilled on his property to be a private nuisance to Harry L. Hendricks and Mary Hendricks, plaintiffs
Tetley v. Chitty (1986). Bone v. Seal (1975). 34 Hendricks v. Stalnaker, supra; Restatement (Second) Torts 822. 35 Id., citing Restatement (Second) Torts 825 (1979). 36 Id. 37 Id., citing W. Prosser, supra 87, at 581, 89 at 596; Restatement (Second) of Torts 826 (1979); W. Keeton, supra 88, at 629. Restatement (Second) of Torts 827 and 828 (1979).
32 33
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below. The Hendrickses, owners of the property adjacent to that of Mr. Stalnaker, were refused a Health Department permit for a septic system located within 100 feet of Mr. Stalnakers water well. The Circuit Court of Lewis County, based on a jury verdict, found the water well to be a private nuisance and ordered its abatement. On appeal, Mr. Stalnaker argues that because his water well was not an unreasonable use of his land, he is not liable for the effects on the Hendrickses property. We agree and, therefore, reverse the decision of the circuit court. Mr. Stalnaker owns approximately 10 acres of land situated on Glady Fork Road, Lewis County. In 1985, Mr. Stalnaker constructed his home on a 2.493 acre portion of the tract, and had two water wells dowsed. One well was located behind his house and the other, near the Hendrickses property. The rear well was near land disturbed by a former strip mine and, therefore, the well produced poor quality water. Except for a small section of land near the Hendrickses property the location of the second dowsed well most of Mr. Stalnakers home tract had been disturbed by a strip mine. In August 1985, Mr. Stalnaker spent approximately $3,000 in an unsuccessful attempt to treat the water from the rear well. In 1984, the Hendrickses purchased approximately 2.95 acres adjacent to Mr. Stalnakers property for a home site or a trailer development. On 31 December 1985, Mr. Hendricks met with the Lewis County sanitarian to determine locations for a water well and a septic system. The Health Department requires a distance of 100 feet between water wells and septic systems before it will issue permits. Because the Hendrickses land was too hilly or had been disturbed in order to build a pond, the only location for a septic system on the tract was near Mr. Stalnakers property. On 13 January 1986, the Hendrickses contacted the county sanitarian to visit their property to complete the septic system permit application. The county sanitarian said because of snowy weather he would come out later in the week. On 13 January 1986, Mr. Stalnaker called the sanitarian and was told about the Hendrickses proposed septic system. Mr. Stalnaker was also told that the county sanitarian would be unavailable on 14 January 1986 but could meet with him on 15 January 1986. On 14 January 1986, Mr. Stalnaker contacted a well driller, who applied for and received a well drilling permit for the second well from the assistant sanitarian. The well was completed on 25 January 1986 but was not connected to Mr. Stalnakers home until January 1987. On 15 January 1986, the county sanitarian informed Mr. Hendricks that no permit for his proposed septic system could be issued because the absorption eld for his septic system was within one hundred feet of Mr. Stalnakers water well. Mr. Hendricks did install a septic system without a permit in Janu-
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PROPERTY
ary 1987; however, the system was left inoperative pending the outcome of this suit. The Hendrickses led suit in the Circuit Court of Lewis County on 29 January 1987 requesting: (1) the water well be declared a private nuisance, (2) the nuisance be abated, and (3) damages. In a bifurcated trial, the jury found that the water well was a private nuisance and the trial judge ordered it to be abated. On the issue of damages the jury found for the defendant and awarded no damages. I In the past we have broadly described what constitutes a nuisance: A nuisance is anything which annoys or disturbs the free use of ones property, or which renders its ordinary use or physical occupation uncomfortable. . . A nuisance is anything which interferes with the rights of a citizen, either in person, property, the enjoyment of his property, or his comfort. . . A condition is a nuisance when it clearly appears that enjoyment of property is materially lessened, and physical comfort of persons in their homes is materially interfered with thereby. (Citations omitted). Martin v. Williams, 93 S.E.2d 835, 844 (W. Va. 1956). * * * This denition of nuisance includes acts or conditions that affect either the general public or a limited number of persons. In Hark v. Mountain Fork Lumber Co., 34 S.E.2d 348, 354 (W. Va. 1945) we dened a public nuisance as that which affects the general public as public, and [a private nuisance as that which] injures one person or a limited number of persons only. In order clearly to delineate between a public nuisance and a private nuisance, we dene a private nuisance as a substantial and unreasonable interference with the private use and enjoyment of anothers land. The denition of private nuisance includes conduct that is intentional and unreasonable, negligent or reckless, or that results in an abnormally dangerous conditions or activities in an inappropriate place. See W. Prosser, Handbook of the Law of Torts 87 at 580, 89 at 593 (4th ed. 1971); Restatement (Second) of Torts 821D, 821F, 822 (1979); W. Keeton, Prosser and Keeton on the Law of Torts 87 (5th ed. 1984). Recovery for a private nuisance is limited to plaintiffs who have suffered a signicant harm to their property rights or privileges caused by the interference. Restatement (Second) of Torts 821E, 821F (1979). Early West Virginia cases indicate that the existence of a private nuisance was determined primarily by the harm caused. Medford v. Levy, 8 S.E. 302 (W. Va. 1888) (cooking odors); Flanagan v. Gregory and Poole, Inc., 67 S.E.2d 865 (W. Va. 1951) (inadequate culvert). Gradually, the focus included
583
an examination of the reasonableness of the propertys use. See McGregor v. Camden, 34 S.E. 936 (W. Va. 1899) (required an examination of the location, capacity and management of oil and gas well); Pope v. Edward M. Rude Carrier Corp., 75 S.E.2d 584 (W. Va. 1953) (transportation of explosives); Martin, supra (used automobile lot); State ex rel. Ammerman v. City of Philippi, 65 S.E.2d 713 (W. Va. 1951) (tire recapping business); Ritz v. Womans Club of Charleston, 173 S.E. 564 (W. Va. 1934) (noise); Harless v. Workman, 114 S.E.2d 548 (W. Va. 1960) (coal dust). In the area of public nuisance, we have made explicit that an examination of the reasonableness or unreasonableness of the use of property in relation to the particular locality is a fair test to determine the existence of a public nuisance. Similarly, any determination of liability for a private nuisance must include an examination of the private use and enjoyment of the land seeking protection and the nature of the interference. Because the present case concerns conduct that is not a negligent, reckless, or abnormally dangerous activity, our discussion of private nuisance is limited to conduct that is intentional and unreasonable. An interference is intentional when the actor knows or should know that the conduct is causing a substantial and unreasonable interference. Restatement (Second) of Torts 825 (1979). The unreasonableness of an intentional interference must be determined by a balancing of the landowners interests. An interference is unreasonable when the gravity of the harm outweighs the social value of the activity alleged to cause the harm. See W. Prosser, supra 87, at 581, 89 at 596; Restatement (Second) of Torts 826 (1979); W. Keeton, supra 88, at 629. Restatement (Second) of Torts 827 and 828 (1979) list some of the factors to be considered in determining the gravity of the harm and the social value of the activity alleged to cause the harm. However, this balancing to determine unreasonableness is not absolute. Additional consideration might include the malicious or indecent conduct of the actor. Restatement (Second) of Torts 829. * * * In the case before us, the Hendrickses inability to operate a septic system on their property is clearly a substantial interference with the use and enjoyment of their land. The record indicates that the installation of the water well was intentional, but there was no evidence that the installation was done so as maliciously to deprive the Hendrickses of a septic system. Mr. Stalnaker wanted to insure himself of an adequate water supply and found no alternative to the well he dug. The critical question is whether the interference, the installation of a water well, was unreasonable. Unreasonableness is determined by balancing the competing landholders interests. We note that either use, well or septic system, burdens the adjacent property. Under Health Department regulations,
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a water well merely requires non-interference within 100 feet of its location. In the case of a septic system, however, the 100 foot safety zone, extending from the edge of the absorption eld, may intrude on adjacent property. Thus, the septic system, with its potential for drainage, places a more invasive burden on adjacent property. Clearly both uses present similar considerations of gravity of harm and social value of the activity alleged to cause the harm. Both a water well and a septic system are necessary to use this land for housing; together they constitute the in and out of many water systems. Neither party has an inexpensive and practical alternative. The site of the water well means quality water for Mr. Stalnaker, and the Hendrickses have only one location available for their septic system. In the case before us, we are asked to determine if the water well is a private nuisance. But if the septic system were operational, the same question could be asked about the septic system. Because of the similar competing interests, the balancing of these landowners interests is at least equal or, perhaps, slightly in favor of the water well. Thus, the Hendrickses have not shown that the balancing of interests favors their septic system. We nd that the evidence presented clearly does not demonstrate that the water well is an unreasonable use of land and, therefore, does not constitute a private nuisance. *** We nd that because the evidence is not disputed and only one interference is reasonable, the trial court should have held as a matter of law that the water well was not a private nuisance. * * * Reversed.
In deciding the issue of unreasonableness, courts are therefore called upon to maintain a balance between the interests and rights of the defendant to use his land and the claimants interests. In determining what is reasonable interference, the following factors are generally considered: (1) the locality of the plaintiff because inhabitants of industrial areas must expect more interference;38 (2) the extent of the interference (even in industrial areas, there are limits);39 (3) and the time of day (a continuous loud noise made during the middle of the night, for example, is considered less acceptable than the same during the day.
38 See Bliss v. Hale (1838), 7 L.J.R. 122 (1838); Sturges v. Bridgeman, 11 Eng. Rep. 852 (Ch. D. 1879). 39 R. v. Neville, 170 Eng. Rep. 102 (1791); Colls v. Home and Colonial Stores, (1865) A.C. 179.
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[127.2] Nuisance Per Se and Per Accidens
As to their nature or character, nuisances are classied into either nuisance per se (or nuisance at law) and nuisance per accidens (or nuisance in fact). The rst is recognized as a nuisance under any and all circumstances,40 regardless of location or surroundings,41 because it constitutes a direct menace to public health or safety.42 The second is not a nuisance per se but may become a nuisance by reason of the circumstances of the location and surroundings or manner in which it is performed or operated,43 and its existence being a question of fact, it cannot be abated without due hearing thereon in a tribunal authorized to decide whether such a thing does in law constitute a nuisance.44 The difference between a nuisance per se and a nuisance per accidens is that in the former, injury in some form is certain to be inicted, while in the latter, the injury is uncertain or contingent until it actually occurs.45 The traditional test for determining the existence of a nuisance per se is whether the nuisance has become dangerous at all times and under all circumstances to life, health, or property.46 Good examples of nuisances per se are those which are prohibited by law, such as houses of ill fame (or prostitution)47 and gambling houses.48 These activities are nuisances per se regardless of their location or surroundings.
[127.3] Doctrine of Attractive Nuisance
The doctrine of attractive nuisance is of American origin and recognized in this jurisdiction in the case of Taylor v. Manila Electric.49 The doctrine may be stated, in short, as follows: one who maintains on
Salao v. Santos, G.R. No. L-45519, April 26, 1939, citing Iloilo Ice and Cold Storage Co. v. Municipal Council of Iloilo, 24 Phil. 471; Monteverde v. Generoso, 52 Phil. 123, 127. 41 Blacks Law Dictionary, 5th ed., 962, citing Bluemer v. Saginaw Central Oil & Gas Service, Inc., 356 Mich. 399, 97 N.W.2d 90, 96; Koeber v. Apex-Albuq Phoenix Exp., 72 N.M.4, 380 P.2d 14, 15, 16. 42 Salao v. Santos, supra. 43 Blacks Law Dictionary, 5th ed., 962, citing Robichaux v. Happunbauer, 258 La. 44 Salao v. Santos, supra. 45 State ex rel. Cunningham v. Feezell, 218 Tenn. 17, 400 S.W. 2d 716, 719, cited in Blacks Law Dictionary, 5th ed., 962. 46 Suddeth v. Knight, 280 S.C. 540, 545, 314 S.E.2d 11, 14 (Ct. App. 1984); Blacks Law Dictionary 1094 (7th ed., 1999). 47 Iloilo Ice and Cold Storage Co. v. Municipal Council of Iloilo, supra. 48 Id. 49 16 Phil. 8.
40
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his premises dangerous instrumentalities or appliances of a character likely to attract children in play, and who fails to exercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a child of tender years who is injured thereby, even if the child is technically a trespasser in the premises.50 The principal reason for the doctrine is that the condition or appliance in question although its danger is apparent to those of age, is so enticing or alluring to children of tender years as to induce them to approach, get on or use it, and this attractiveness is an implied invitation to such children.51 Is a swimming pool or water tank an instrumentality or appliance likely to attract the little children in play? In other words, is the body of water an attractive nuisance? In Hidalgo Enterprises, Inc. v. Balandan, supra, it was held that the attractive nuisance doctrine generally is not applicable to bodies of water, articial as well as natural, in the absence of some unusual condition or articial feature other than the mere water and its location.
Art. 696. Every successive owner or possessor of property who fails or refuses to abate a nuisance in that property started by a former owner or possessor is liable therefor in the same manner as the one who created it. Art. 697. The abatement of a nuisance does not preclude the right of any person injured to recover damages for its past existence. Art. 698. Lapse of time cannot legalize any nuisance, whether public or private. Art. 699. The remedies against a public nuisance are: (1) or (2) (3) A civil action; or Abatement, without judicial proceedings. A prosecution under the Penal Code or any local ordinance;
Art. 700. The district health ofcer shall take care that one or all of the remedies against a public nuisance are availed of. Art. 701. If a civil action is brought by reason of the maintenance of a public nuisance, such action shall be commenced by the city or municipal mayor.
50 51
Hidalgo Enterprises, Inc. v. Balandan, 48 O.G. 2641 (1932). Id.
587
Art. 702. The district health ofcer shall determine whether or not abatement, without judicial proceedings, is the best remedy against a public nuisance. Art. 703. A private person may le an action on account of a public nuisance, if it is specially injurious to himself. Art. 704. Any private person may abate a public nuisance which is specially injurious to him by removing, or if necessary, by destroying the thing which constitutes the same, without committing a breach of the peace, or doing unnecessary injury. But it is necessary: (1) That demand be rst made upon the owner or possessor of the property to abate the nuisance; (2) That such demand has been rejected;
(3) That the abatement be approved by the district health ofcer and executed with the assistance of the local police; and (4) That the value of the destruction does not exceed Three thousand pesos (P3,000). Art. 705. The remedies against a private nuisance are: (1) (2) A civil action; or Abatement, without judicial proceedings.
Art. 706. Any person injured by a private nuisance may abate it by removing, or if necessary by destroying the thing which constitutes the nuisance, without committing a breach of the peace or doing unnecessary injury. However, it is indispensable that the procedure for extrajudicial abatement of a public nuisance by a private person be followed. Art. 707. A private person or a public ofcial extrajudicially abating a nuisance shall be liable for damages: (1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by the courts to be not a real nuisance.
128. Remedies Whether the nuisance is public or private, the following remedies are available: (1) a civil action; or (2) abatement, without judicial proceedings.52 With regard to a public nuisance, the additional remedy
52
Arts. 699(2) and (3) and 705(1) and (2), NCC.
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of criminal prosecution under the provisions of the Revised Penal Code or any applicable local ordinance is also available.53
[128.1] Criminal Prosecution
As distinguished from private nuisance, a public nuisance may also be the subject of a criminal prosecution under the Revised Penal Code or any local ordinance. For example, the conduct of an illegal gambling is a form of public nuisance which shall subject any person who shall knowingly permit the commission of the same in any inhabited or uninhabited place or any building, vessel or other means of transportation owned or controlled by him.54
[128.2] Abatement of Nuisance
Whether a nuisance is a public or a private one, it may be abated,55 and the abatement may either be without the necessity of judicial proceedings or only upon due hearing thereon. In a number of cases,56 the Supreme Court claried, however, that the abatement of a nuisance without judicial proceedings is possible only if it is a nuisance per se. In Salao v. Santos,57 the Court explained Moreover, nuisances are of two kinds: nuisance per se and nuisance per accidens. The rst is recognized as a nuisance under any and all circumstances, because it constitutes a direct menace to public health or safety, and, for that reason, may be abated summarily under the undened law of necessity. The second is that which depends upon certain conditions and circumstances, and its existence being a question of fact, it cannot be abated without due hearing thereon in a tribunal authorized to decide whether such a thing does in law constitute a nuisance. (Iloilo Ice and Cold Storage Co. v. Municipal Council of Iloilo, 24 Phil., 471; Monteverde v. Generoso, 52 Phil., 123, 127.) Appellants
Art. 699(1), NCC. See Art. 195(2), RPC. 55 See Arts. 699 and 705. NCC. 56 Parayno v. Jovellanos, G.R. No. 148408, July 14, 2006; City of Manila v. Judge Laguio, Jr., G.R. No. 118127, April 25, 2005; Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc., G.R. No. 148339, Feb. 23, 2005; Santos v. Santos, G.R. No. L-45519, April 26, 1939. 57 Supra.
53 54
589
smoked sh factory is not a nuisance per se. It is a legitimate industry. If it be, in fact, a nuisance due to the manner of its operation, then it would be merely a nuisance per accidens. (Iloilo Ice and Cold Storage Co. v. Municipal Council of Iloilo, supra; Monteverde v. Generoso, supra.) Consequently, the order of the municipal president and those of the health authorities issued with a view to the summary abatement of what they have concluded, by their own ndings, as a nuisance, are null and void there having been no hearing in court to the effect. Thus, a nuisance per accidens cannot be abated without due hearing thereon in a tribunal authorized to decide whether such a thing does in law constitute a nuisance.58 And the local government unit concerned does not have the power to summarily abate a nuisance per accidens in the guise of exercising its police power through an ordinance. If it does, such ordinance is null and void because it violates the guarantee of due process under the Constitution.59 In Parayno v. Jovellanos,60 the Supreme Court struck down the resolution passed by the Sangguniang Bayan of Calasiao, Pangasinan authorizing the closure or transfer of location of a gasoline station upon the authority of its Ofcial Zoning Code. The Court held that the business of gasoline station could not be considered a nuisance per se which the municipality could summarily abate in the guise of exercising its police power. Hence, it cannot be closed down or transferred summarily to another location. In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,61 the Sangguniang Panlungsod of Lucena City, with the aim of localizing the source of trafc congestion in the city to a single location passed an ordinance prohibiting the operation of all bus and jeepney terminals within Lucena, including those already existing, and allowing the operation of only one common terminal located outside the city proper, the franchise for which was granted to Lucena Grand Terminal, Inc. The common carriers plying routes to and from Lucena City were thus
Id. Id. 60 Supra. 61 Supra.
58 59
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compelled to close down their existing terminals and use the facilities of Lucena Grand Central. Hence, they questioned the validity of the ordinance. The Court held that the bus and jeepney terminals are not nuisances per se. Hence, they may not be abated via an ordinance, without judicial proceedings, as was done in this case. In City of Manila v. Judge Laguio, Jr.,62 the Court likewise struck down the ordinance passed by the City Council of Manila prohibiting the operation of sauna parlors, massage parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns within the Ermita-Malate area. The Court held, among others, that the City of Manila could not seek cover under the general welfare clause to authorize the abatement of nuisances without judicial proceedings because motels are not nuisances per se. In Santos v. Salao,63 the Court also declared null and void the order of the municipal president of Malabon, Rizal and those of its health authorities issued with a view to the summary abatement of the appellants smoked sh factory. The Court reasoned that the smoked sh factory is a legitimate industry and not a nuisance per se which could be abated summarily.
[128.2.1] Who May Abate
Under Article 700 of the New Civil Code, it is the City and/or the Municipal Health Ofcer, or in cases of illegal construction, the City and/or Municipal Engineer, who is charged with the responsibility of abating public nuisances. A private person may likewise abate a public nuisance which is specially injurious to him by removing, or if necessary, by destroying the thing which constitutes the same, without committing a breach of the peace, or doing unnecessary injury.64 This rule, however, applies only to nuisances per se and prior to the abatement, it is necessary: (1) That demand be rst made upon the owner or possessor of the property to abate the nuisance;
Supra. Supra. 64 Art. 704, NCC.

62 63
591
(2)
That such demand has been rejected;
(3) That the abatement be approved by the district health ofcer and executed with the assistance of the local police; and (4) That the value of the destruction does not exceed three thousand pesos (P3,000).65 The same procedure shall be applied in case of extrajudicial abatement of a private nuisance by any person injured by the same.66 A private person or a public ofcial who extra-judicially abates a nuisance shall be liable for damages in the following situations: (1) if he causes unnecessary injury; or (2) if an alleged nuisance is later declared by the courts to be not a real nuisance.67
[128.3] Civil Action for Damages
Whether a nuisance is a public or a private one, a civil action for its abatement or for injunction may be led. In case of a public nuisance which is not nuisance per se, in which case the remedy of summary abatement is not available, the action for its abatement or injunction should be commenced by the city or municipal mayor.68 If the nuisance is a private one, any person injured by the same may le the action for abatement or for injunction.69 Aside from the action for abatement or injunction, a claim for damages may likewise be maintained by any person who is injured by a private nuisance. In case of a public nuisance, generally, no action for damages may be maintained by a private individual unless it is specially injurious to himself.70 In the said action for damages, not only the person who caused the nuisance but every successive owner or possessor of the property who fails or refuses to abate the same in that property shall be liable for damages in the same manner as the one who created the nuisance.71
Id. Art. 706, NCC. 67 Art. 707, NCC. 68 See Art. 701, NCC. 69 See Art. 705(1), NCC. 70 See Art. 703. 71 See Art. 696, NCC.
65 66
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Title IX. REGISTRY OF PROPERTY

Art. 708. The Registry of Property has for its object the inscription or annotation of acts and contracts relating to the ownership and other rights over immovable property. (605) Art. 709. The titles of ownership, or of other rights over immovable property, which are not duly inscribed or annotated in the Registry of Property shall not prejudice third persons. (606) Art. 710. The books in the Registry of Property shall be public for those who have a known interest in ascertaining the status of the immovables or real rights annotated or inscribed therein. (607) Art. 711. For determining what titles are subject to inscription or annotation, as well as the form, effects, and cancellation of inscriptions and annotations, the manner of keeping the books in the Registry, and the value of the entries contained in said books, the provisions of the Mortgage Law, the Land Registration Act, and other special laws shall govern. (608a)
oOo
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593
BOOK III DIFFERENT MODES OF ACQUIRING OWNERSHIP

PRELIMINARY PROVISION
ARTICLE 712. Ownership is acquired by occupation and by intellectual creation. Ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition. They may also be acquired by means of prescription. (609a)
129. Modes of Acquisition of Ownership and Real Rights

[129.1] In General
Mode of acquiring ownership and other real rights is the specic cause which produces them as a result of the co-existence of special status of things, capacity and intention of person and fulllment of the requisites of law.1 Ownership, under the Civil Code, is acquired through any of these modes: (1) occupation; (2) intellectual creation; (3) law; (4) donation; (5) succession; (6) tradition; and (7) prescription. Other real rights, on the other hand, are acquired through any of the following modes: (1) law; (2) donation; (3) succession; (4) tradition and (5) prescription.2 Note that Article 712 distinguishes between modes which are merely for acquisition (e.g., occupation, intellectual creation and prescription) and modes which are for both acquisition and transmission of ownership (e.g., law, donation, succession and tradition).
1 2
3 Sanchez Roman 199-200. See Art. 712, NCC. 593
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[129.2] Original and Derivative Modes
Under Article 712 of the Civil Code, the modes of acquiring ownership are generally classied into two (2) classes, namely, the original mode and the derivative mode.3 Modes of acquiring ownership are called original when they result in the independent creation of a new right of ownership, when their effect, therefore, is independent of the ownership of a denite third person. A person who acquires by an original mode has no auctor or a person who has ownership and who transmits the same to a successor. Examples of original modes are occupation, law, intellectual creation and acquisitive prescription. A derivative mode, on the other hand, is an acquisition which depends on the existence of the right of a certain other person, called the auctor. Examples of derivative modes are tradition, succession and donation.
[129.3] Loss of Ownership
The Civil Code does not contain any systematic doctrine regarding the loss of ownership. Generally, however, the various modes of losing ownership and other real rights are classied either as voluntary that which depends upon the will of the owner or involuntary or that which is independent of the will of the owner. The voluntary modes are abandonment and alienation. The involuntary modes, on the other hand, are the following: (1) the destruction of the thing, which may either be physical or juridical as when the thing goes out of commerce; (2) revocatory acts, which may include the nullity, rescission, revocation or resolution of that which gave rise to the acquisition; (3) extinguishment by legal precept and in virtue of certain acts, by the owner or third persons (e.g., accession and acquisitive prescription); (4) extinguishment by judicial decree, such as conrmation of a judicial sale as a result of levy on execution; and (5) extinguishment by act of the State, such as conscation of the effects and instruments of a crime and expropriation for public use.4
[129.3.1] Abandonment and Alienation
According to Article 6 of the New Civil Code, rights may be waived or renounced, so long as the waiver is not contrary to law, public order, public policy, morals or good customs or it is not prejudicial to a
3 4
Acap v. CA, G.R. No. 118114, Dec. 7, 1995. II Caguioa, Civil Code of the Phil., 1966 ed., 351-352.
DIFFERENT MODES OF ACQUIRING OWNERSHIP PRELIMINARY PROVISION
595
third person with a right recognized by law. Hence, ownership, as in all other rights, may also be renounced or abandoned. Abandonment is a unilateral act of the holder of the right which does not, therefore, require its acceptance. But it requires, for its validity, that the one renouncing it must have the legal capacity to do so and the same is coupled with the intention to renounce the right. Alienation, on the other hand, involves the voluntary transfer of the right to another person, which may either be by acts mortis causa or by acts inter vivos. It may either be onerous or gratuitous. 130. Law as Mode Law, as a mode of acquiring ownership, refers to those special legal provisions which directly vest ownership or real rights in favor of certain persons, independently of the other modes of acquiring and transmitting ownership or other real rights. The following are the examples: Art. 624. The existence of an apparent sign of easement between two estates, established or maintained by the owner of both, shall be considered, should either of them be alienated, as a title in order that the easement may continue actively and passively, unless, at the time the ownership of the two estates is divided, the contrary should be provided in the title of conveyance of either of them, or the sign aforesaid should be removed before the execution of the deed. This provision shall also apply in case of the division of a thing owned in common by two or more persons. (541a) Art. 681. Fruits naturally falling upon adjacent land belong to the owner of said land. (n) Art. 1434. When a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee. 131. Tradition or Delivery
[131.1] Mode and Title, Distinguished
In matters of contracts, distinction must be made between title and mode of acquiring ownership. A mode is the legal means by which
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PROPERTY
dominion or ownership is created, transferred or destroyed, but title is only the legal basis by which to affect dominion or ownership.5 In this jurisdiction, the term title is used in contradistinction with the term mode, the former being understood as referring to every juridical act, right or condition which gives a means to the acquisition of ownership and other real rights but which in itself is insufcient to produce them.6 Mode and title may be distinguished, as follows: (1) A mode requires not only the intention to acquire but also either a right previously vested over the thing on the part of the person who makes the transmission or the special condition or state of the thing to be transferred as the fact that they are res nullius; whereas, title requires mere intention. (2) A mode directly and immediately produces a real right; whereas, title merely serves as a means and a pretext to that acquisition. (3) (4) right.7 Mode is the cause, while title is the means. Mode creates a real right, while title creates merely a personal
[131.2] Contract Only Constitutes Title
Contracts, under our laws, only constitute titles or rights to the transfer or acquisition of ownership, while delivery or tradition is the mode of accomplishing the same.8 Stated otherwise, ownership is transferred, not by contract alone, but by tradition or delivery. Non nudis pactis, sed traditione dominia rerum transferentur.9 This much is clear from Article 712 of the New Civil Code when it provides that ownership and other real rights over property are acquired and transmitted in consequence of certain contracts, by tradition. The delivery of a thing, therefore, constitutes a necessary and indispensable requisite for the purpose of acquiring the ownership of the same by virtue of a contract.10
5 San Lorenzo Development Corp. v. CA, G.R. No. 124242, Jan. 21, 2005, citing Villanueva, Philippine Law on Sales, 1995 ed., 5. 6 3 Sanchez Roman 200. 7 3 Sanchez Roman 200. 8 San Lorenzo Development Corp. v. CA, supra. 9 Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., 370 SCRA 56 (2001). 10 Fidelity and Deposit Co. v. Wilson, 8 Phil. 51.
597
In relation to the acquisition and transfer of ownership, it should be noted therefore, that sale is not a mode, but merely a title.11 Sale by itself does not transfer or affect ownership; the most that sale does is to create the obligation to transfer ownership. It is tradition or delivery, as a consequence of sale, that actually transfers ownership.12
[131.3] Concept of Tradition; Requisites
Tradition (traditio) or delivery, as a mode of acquiring and transmitting ownership and other real rights, refers to the transfer of possession accompanied by an intention to transfer ownership or other real rights. In order that there be tradition, the following requisites must be present: (1) pre-existence of the right to be transmitted in the estate of the grantor, the same being a derivative mode of acquiring ownership; (2) just cause or title (causa traditionis) for the transmission, such as sale; (3) intention on the part of the grantor to grant and on the part of the grantee to acquire; (4) capacity to transmit (on the part of the grantor) and capacity to acquire (on the part of the grantee); and (5) an act which gives it outward form, physically, symbolically or legally.13 It is therefore a rule that ownership can never pass by the bare delivery of a thing (e.g., for safe keeping, or by way of loan for use), a bare delivery being, legally speaking, no tradition at all. No delivery can be tradition in the legal sense, unless it is accompanied by an intention to transfer ownership, an intention which is expressed, as a rule, by some juristic act (causa traditionis) which precedes the tradition.14 Hence, in all forms of delivery, it is necessary that the act of delivery, whether constructive or actual, should be coupled with the intention of delivering the thing. The act, without the intention, is insufcient.15 The critical factor in the different modes of effecting delivery which gives legal effect to the act, is the actual intention of the vendor to deliver, and its acceptance by the vendee. Without that intention, there is no tradition.16
San Lorenzo Development Corp. v. CA, supra. Id. 13 3 Sanchez Roman, 234-235. 14 Rudolph Sohm, The Institutes of Roman Law, 2002 ed., 235. 15 Union Motor Corporation v. CA, G.R. No. 117817, July 20, 2001, citing Norkis Distributors, Inc. v. CA, 193 SCRA 694, 698 (1991). 16 Id.
11 12
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PROPERTY
Norkis Distributors, Inc. v. Court of Appeals 193 SCRA 694 (1991) Norkis Distributors, Inc. (Norkis for brevity), is the distributor of Yamaha motorcycles in Negros Occidental with ofce in Bacolod. On September 20, 1979, Alberto Nepales bought from the Norkis-Bacolod branch a brand new Yamaha Wonderbike then displayed in the Norkis showroom. The price of P7,500.00 was payable by means of a Letter of Guaranty from the Development Bank of the Philippines (DBP), which Norkis agreed to accept. Hence, credit was extended to Nepales for the price of the motorcycle payable by DBP upon release of his motorcycle loan. As security for the loan, Nepales would execute a chattel mortgage on the motorcycle in favor of DBP. Norkis issued a sales invoice showing that the contract of sale of the motorcycle had been perfected. Nepales signed the sales invoice to signify his conformity with the terms of the sale. In the meantime, however, the motorcycle remained in Norkis possession. On November 6, 1979, the motorcycle was registered in the LTO in the name of Alberto Nepales and a registration certicate in his name was issued. On January 22, 1980, the motorcycle was delivered to a certain Julian Nepales who was allegedly the agent of Alberto Nepales but the latter subsequently denies it. Thereafter, the motorcycle met an accident on February 3, 1980 while it was being driven by a certain Zacarias Payba. The unit was a total wreck, was returned, and stored inside Norkis warehouse. On March 20, 1980, DBP released the proceeds of Nepales motorcycle loan to Norkis in the total sum of P7,500. As the price of the motorcycle later increased to P7,828 in March, 1980, Nepales paid the difference of P328 and demanded the delivery of the motorcycle. When Norkis could not deliver, Nepales led an action for specic performance with damages against Norkis. Nepales alleged that Norkis failed to deliver the motorcycle which he purchased, thereby causing him damages. Norkis answered that the motorcycle had already been delivered to him before the accident, hence, the risk of loss or damage had to be borne by him as owner of the unit. Norkis concedes that there was no actual delivery of the vehicle. However, it insists that there was constructive delivery of the unit upon: (1) the issuance of the sales invoice in the name of Nepales and the afxing of his signature thereon; (2) the registration of the vehicle with the LTO in Nepales name; and (3) the issuance of ofcial receipt for payment of registration fees. The Supreme Court held that Norkis should bear the risk of loss because the ownership has not yet been transferred to the buyer at the time of the loss. The Court explained In all forms of delivery, it is necessary that the act of delivery whether constructive or actual, be coupled with the intention of delivering the thing. The act, without the intention, is insufcient (De Leon, Comments and Cases on Sales, 1978 Ed., citing Manresa, p. 94).
599
When the motorcycle was registered by Norkis in the name of private respondent, Norkis did not intend yet to transfer the title or ownership to Nepales, but only to facilitate the execution of a chattel mortgage in favor of the DBP for the release of the buyers motorcycle loan. The Letter of Guarantee (Exh. 5) issued by the DBP, reveals that the execution in its favor of a chattel mortgage over the purchased vehicle is a pre-requisite for the approval of the buyers loan. If Norkis would not accede to that arrangement, DBP would not approve private respondents loan application and, consequently, there would be no sale. In other words, the critical factor in the different modes of effecting delivery, which gives legal effect to the act, is the actual intention of the vendor to deliver, and its acceptance by the vendee. Without that intention, there is no tradition (Abuan v. Garcia, 14 SCRA 759). xxx xxx xxx The Court of Appeals correctly ruled that the purpose of the execution of the sales invoice dated September 20, 1979 (Exh. B) and the registration of the vehicle in the name of plaintiff-appellee (private respondent) with the Land Registration Commission (Exhibit C) was not to transfer to Nepales the ownership and dominion over the motorcycle, but only to comply with the requirements of the Development Bank of the Philippines for processing private respondents motorcycle loan. On March 20, 1980, before private respondents loan was released and before he even paid Norkis, the motorcycle had already gured in an accident while driven by one Zacarias Payba. Payba was not shown by Norkis to be a representative or relative of private respondent. The latters supposed relative, who allegedly took possession of the vehicle from Norkis did not explain how Payba got hold of the vehicle on February 3, 1980. Norkis claim that Julian Nepales was acting as Albertos agent when he allegedly took delivery of the motorcycle (p. 20, Appellants Brief), is controverted by the latter. Alberto denied having authorized Julian Nepales to get the motorcycle from Norkis Distributors or to enter into any transaction with Norkis relative to said motorcycle. (p. 5, t.s.n., February 6, 1985). This circumstances more than amply rebut the disputable presumption of delivery upon which Norkis anchors its defense to Nepales action (pp. 33-34, Rollo). Article 1496 of the Civil Code which provides that in the absence of an express assumption of risk by the buyer, the things
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sold remain at sellers risk until the ownership thereof is transferred to the buyer, is applicable to this case, for there was neither an actual nor constructive delivery of the thing sold, hence, the risk of loss should be borne by the seller, Norkis, which was still the owner and possessor of the motorcycle when it was wrecked. This is in accordance with the well-known doctrine of res perit domino. Aznar v. Yapdiangco 13 SCRA 486 (1965) In May, 1959, Teodoro Santos advertised in two metropolitan papers the sale of his Ford Fairlane 500. In the afternoon of May 28, 1959, a certain L. De Dios, claiming to be a nephew of Vicente Marella, went to the Santos residence to answer the ad. However, Teodoro Santos was out during this call and only his son, Irineo Santos, received and talked with De Dios. The latter told the young Santos that he had come in behalf of his uncle, Vicente Marella, who was interested to buy the advertised car. On being informed of this, Teodoro Santos instructed his son Ireneo to see the said Vicente Marella the following day at his given address.The following day, Irineo Santos went to the said address. At this meeting, Marella agreed to buy the car for P14,700.00 on the understanding that the price would be paid only after the car had been registered in his name. Pursuant to such condition, Vicente Santos transferred the registration of the car in the name of Marella even without the payment of the purchased price. When Ireneo Santos turned over to Marella the registration papers and a copy of the deed of sale and demanded for the payment of the purchase price, Marella begged off to be allowed to secure the money from a sister supposedly living in another place. Thereafter, Marella ordered L. De Dios to go to the said sister and suggested that Irineo Santos go with him. At the same time, Marella requested the registration papers and the deed of sale from Irineo Santos on the pretext that he would like to show them to his lawyer. Trusting the good faith of Marella, Irineo handed over the same to the latter and thereupon, in the company of L. De Dios and another unidentied person, proceeded to the alleged house of Marellas sister. At a certain place on Azcarraga Street, Irineo Santos and L. De Dios alighted from the car and entered a house while their unidentied companion remained in the car. Once inside, L. De Dios asked Irineo Santos to wait at the sala while he went inside a room. That was the last that Irineo saw of him. For, after a considerable length of time waiting in vain for De Dios to return, Irineo went down to discover that neither the car nor their unidentied companion was there anymore. Going back to the house, he inquired from a woman he saw for L. De Dios and he was told that no such name lived or was even known therein. Whereupon, Irineo Santos rushed to the alleged house of Marella to see the latter. He found the house closed and Marella gone. Finally, he reported the matter to his father who promptly
601
advised the police authorities. On that same day, Marella was able to sell the car in question to Jose B. Aznar for P15,000.00, the latter acting in good and without notice of the defect appertaining to the vendors title. While the car in question was in the possession of Jose B. Aznar and while he was attending to its registration in his name, agents of the Philippine Constabulary seized and conscated the same in consequence of the report to them by Teodoro Santos that the said car was unlawfully taken from him. On the question of whether Marella acquired ownership over the car with the delivery of the key of the car to him, the Court ruled in the negative. The Court explained Vicente Marella did not have any title to the property under litigation because the same was never delivered to him. He sought ownership or acquisition of it by virtue of the contract. Vicente Marella could have acquired ownership or title to the subject matter thereof only by the delivery or tradition of the car to him. Under Article 712 of the Civil Code, ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition. As interpreted by this Court in a host of cases, by this provision, ownership is not transferred by contract merely but by tradition or delivery. Contracts only constitute titles or rights to the transfer or acquisition of ownership, while delivery or tradition is the mode of accomplishing the same (Gonzales v. Rojas, 16 Phil. 51; Ocejo, Perez and Co. v. International Bank, 37 Phil. 631, Fidelity and Deposit Co. v. Wilson, 8 Phil. 51; Kuenzle & Streiff v. Wacke & Chandler, 14 Phil. 610; Easton v. Diaz Co., 32 Phil. 180). For the legal acquisition and transfer of ownership and other property rights, the thing transferred must be delivered, inasmuch as, according to settled jurisprudence, the tradition of the thing is a necessary and indispensable requisite in the acquisition of said ownership by virtue of contract. (Walter Laston v. E. Diaz & Co. & the Provincial Sheriff of Albay, supra.) So long as property is not delivered, the ownership over it is not transferred by contract merely but by delivery. Contracts only constitute titles or rights to the transfer or acquisition of ownership, while delivery or tradition is the method of accomplishing the same, the title and the method of acquiring it being different in our law. (Gonzales v. Roxas, 16 Phil. 51) In the case on hand, the car in question was never delivered to the vendee by the vendor as to complete or consummate the
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transfer of ownership by virtue of the contract. It should be recalled that while there was indeed a contract of sale between Vicente Marella and Teodoro Santos, the former, as vendee, took possession of the subject matter thereof by stealing the same while it was in the custody of the latters son. There is no adequate evidence on record as to whether Irineo Santos voluntarily delivered the key to the car to the unidentied person who went with him and L. De Dios to the place on Azcarraga where a sister of Marella allegedly lived. But even if Irineo Santos did, it was not the delivery contemplated by Article 712 of the Civil Code. For then, it would be indisputable that he turned it over to the unidentied companion only so that he may drive Irineo Santos and De Dios to the said place on Azcarraga and not to vest the title to the said vehicle to him as agent of Vicente Marella. Article 712 above contemplates that the act be coupled with the intent of delivering the thing. (10 Manresa 132) [131.4] Kinds of Tradition
Tradition is classied into: (1) (2) (3) (4) Real tradition; Constructive or feigned tradition; Quasi-tradition; and Tradition by operation of law
[131.4.1] Real Tradition
Real tradition (or physical or actual delivery) takes place when the thing is placed in the control and possession of the grantee, which if it is movable, is when the thing is transferred from hand to hand and, if immovable, by certain material and possessory acts by the grantee in the presence and with the consent of the grantor, such as gathering fruits or entering upon the property which are generally called taking possession.17 In the Law on Sales, the thing sold is understood as delivered, when it is placed in the control and possession of the vendee.18
17 18
2 Castan, 9th ed., 227-228. Art. 1497, NCC.
603
[131.4.2] Constructive Tradition
The change of possession or delivery need not, however, be materially visible. Hence, delivery may likewise exists even when the change of possession is not actual or material but represented by other signs or acts indicative thereof, in which case the tradition is classied as a constructive one. Constructive delivery may take place through any of the following ways: (1) traditio simbolica (symbolical tradition); (2) traditio longa manu; (3) traditio brevi manu; (4) traditio constitutum possessorium; and (5) execution of public instrument.
(i) Traditio Simbolica
In traditio simbolica, the transfer of ownership is effected by the delivery of symbols or things which represent those to be delivered. Thus in the second paragraph of Article 1498 of the Civil Code, it is provided that with regard to movable property, its delivery may also be made by the delivery of the keys of the place or depository where it is stored or kept.
(ii) Traditio Longa Manu
In traditio longa manu, the transfer of ownership is effected by the grantor by simply pointing out to the grantee the things which are being transferred and which at the time must be within their sight.
(iii) Traditio Brevi Manu
In traditio brevi manu, the grantee has already acquired actual control or possession of the thing, as when the thing is leased to him. In this case, a mere declaration on the part of the grantor that the grantee shall now hold the thing which is already in his control and possession, as owner, operates as a form of delivery. The traditio longa manu and the traditio brevi manu is recognized in Article 1499 of the Civil Code, to wit: ART. 1499. The delivery of movable property may likewise be made by the mere consent or agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale, or if the latter already had it in his possession for any other reason. (1463a)
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(iv) Traditio Constitutum Possessorium
Traditio constitutum possessorium is the reverse of traditio brevi manu. In the former, delivery is effected by a mere declaration on the part of the transferor that he will hold the thing for the transferee. This, of course, may take place when the owner of the thing alienates it but continues possessing it under another contract or capacity, as lessee for example. Traditio constitutum possessorium is recognized in Article 1500 of the Civil Code. While it may appear in traditio longa manu, traditio brevi manu and traditio constitutum possessorium that the transfer of ownership is brought about by a mere declaration of consent, this declaration, however, does not merely state that the other shall henceforth be the owner, but also, at the same time, effects a change in the physical control, a change, that is to say, in the actual possession of the thing; and it is only through the medium of this change that the transfer of ownership is accomplished. In traditio brevi manu, for example, the grantee, by purchasing the thing leased acquires a different power over the thing from that which he had before.19
(v) Execution of Public Instrument
The execution of a public instrument is recognized by law as equivalent to the delivery of the thing which is the object of the contract.20 Under the Law on Sales, the execution of a public instrument of sale is recognized as equivalent to the delivery of the thing sold.21 It has been held, however, that the execution of a contract of sale as a form of constructive delivery is but a legal ction. It holds true only when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee.22 When there is such impediment, ction yields to reality the delivery has not been effected.23 Stated otherwise, the execution of a public instrument gives
Rudolph Sohm, The Institutes of Roman Law, 2002 ed., 234-235. Addison v. Felix and Tioco, 38 Phil. 404, 408 (1918). 21 Art. 1498, NCC. 22 Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., supra, citing Vda. De Sarmiento v. Lesaca, 108 Phil. 900, 903 (1960). 23 Id.
19 20
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rise only to a prima facie presumption of delivery. Such presumption is destroyed when the instrument itself expresses or implies that delivery was not intended; or when by other means it is shown that such delivery was not effected, because a third person was actually in possession of the thing.24 As early as the case of Addison v. Felix and Tioco,25 decided in 1918, the Supreme Court already held The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is placed in the hands and possession of the vendee. (Civil Code, Art. 1462). It is true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufcient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then ction yields to reality the delivery has not been effected.
Equatorial Realty Development, Inc. v. Mayfair Theater, Inc. 370 SCRA 56 (2001) Carmelo & Bauermann, Inc. (Carmelo) used to own a parcel of land with improvements. It entered into a contract of lease with Mayfair Theater, Inc. (Mayfair). The lease contained a right of rst refusal. Within the term of the lease, Carmelo sold the property to Equatorial Realty Development,
24 25
Id. Supra.
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Inc. (Equatorial), in violation of Mayfairs right of refusal. Mayfair led a complaint for rescission of the contract of sale between Carmelo and Equatorial on the ground that its right of rst refusal was violated. Mayfair obtained a favorable judgment and the decree of rescission became nal. When Mayfair tendered the payment of the purchase price with Carmelo, Equatorial, on the other hand, demanded rentals from Mayfair alleging itself as the owner by reason of the contract of sale from the time of the execution of the contract of sale up to nality of the decision in the case led by Mayfair. On this issue, the Supreme Court held that Equatorial Realty did not become the owner of the contested property because there was no tradition or delivery of the property sold to Equatorial. The Court explained By a contract of sale, one of the contracting parties obligates himself to transfer ownership of and to deliver a determinate thing and the other to pay therefor a price certain in money or its equivalent. Ownership of the thing sold is a real right, which the buyer acquires only upon delivery of the thing to him in any of the ways specied in Articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee. This right is transferred, not by contract alone, but by tradition or delivery. Non nudis pactis sed traditione dominia rerum transferantur. And there is said to be delivery if and when the thing sold is placed in the control and possession of the vendee. Thus, it has been held that while the execution of a public instrument of sale is recognized by law as equivalent to the delivery of the thing sold, such constructive or symbolic delivery, being merely presumptive, is deemed negated by the failure of the vendee to take actual possession of the land sold. Delivery has been described as a composite act, a thing in which both parties must join and the minds of both parties concur. It is an act by which one party parts with the title to and the possession of the property, and the other acquires the right to and the possession of the same. In its natural sense, delivery means something in addition to the delivery of property or title; it means transfer of possession. In the Law on Sales, delivery may be either actual or constructive, but both forms of delivery contemplate the absolute giving up of the control and custody of the property on the part of the vendor, and the assumption of the same by the vendee. xxx xxx xxx
607
Let us now apply the foregoing discussion to the present issue. From the peculiar facts of this case, it is clear that petitioner never took actual control and possession of the property sold, in view of respondents timely objection to the sale and the continued actual possession of the property. The objection took the form of a court action impugning the sale which, as we know, was rescinded by a judgment rendered by this Court in the mother case. It has been held that the execution of a contract of sale as a form of constructive delivery is a legal ction. It holds true only when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee. When there is such impediment, ction yields to reality the delivery has not been effected. Hence, respondents opposition to the transfer of the property by way of sale to Equatorial was a legally sufcient impediment that effectively prevented the passing of the property into the latters hands. This was the same impediment contemplated in Vda. de Sarmiento v. Lesaca, in which the Court held as follows: The question that now arises is: Is there any stipulation in the sale in question from which we can infer that the vendor did not intend to deliver outright the possession of the lands to the vendee? We nd none. On the contrary, it can be clearly seen therein that the vendor intended to place the vendee in actual possession of the lands immediately as can be inferred from the stipulation that the vendee takes actual possession thereof x x x with full rights to dispose, enjoy and make use thereof in such manner and form as would be most advantageous to herself. The possession referred to in the contract evidently refers to actual possession and not merely symbolical inferable from the mere execution of the document. Has the vendor complied with this express commitment? she did not. As provided in Article 1462, the thing sold shall be deemed delivered when the vendee is placed in the control and possession thereof, which situation does not here obtain because from the execution of the sale up to the present the vendee was never able to take possession of the lands due to the insistent refusal of Martin Deloso to surrender them claiming ownership thereof. And although it is postulated in the same article that the execution of a public document is equivalent to delivery, this legal ction only holds true when there is no impediment that may prevent the
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passing of the property from the hands of the vendor into those of the vendee. x x x. The execution of a public instrument gives rise, therefore, only to a prima facie presumption of delivery. Such presumption is destroyed when the instrument itself expresses or implies that delivery was not intended; or when by other means it is shown that such delivery was not effected, because a third person was actually in possession of the thing. In the latter case, the sale cannot be considered consummated. [131.4.3] Quasi-tradition and Tradition By Operation of Law
Quasi-tradition is used to indicate the transfer of rights or incorporeal things through the exercise of the rights by the grantee with the acquiescence of the grantor.26 Tradition by operation of law, on the other hand, comprises all those cases not covered by the previous modes of delivery and by which tradition is effected solely by virtue of a legal precept.27 132. Acquisitive Prescription
[132.1] Concept and Requisites
Prescription, in general, is a mode of acquiring (or losing) ownership and other real rights through the lapse of time in the manner and under conditions laid down by law, namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted and adverse.28 Possession is open when it is patent, visible, apparent, notorious and not clandestine.29 It is continuous when uninterrupted, unbroken and not intermittent or occasional;30 exclusive when the adverse possessor can show exclusive dominion over the land and an appropriation of it to his own use and benet;31 and notorious when it is so conspicuous that it is generally known and talked of by the public or
3 Sanchez Roman 209-210. 2 Castan, 9th ed., 227-228. 28 Sps. Aguirre v. Heirs of Lucas Villanueva, G.R. No. 169898, Oct. 27, 2006; see also Arts. 1106 and 1118, NCC. 29 Director of Lands v. Intermediate Appellate Court, 209 SCRA 214, 224 (1992). 30 Id. 31 Id.
26 27
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the people in the neighborhood.32 The party who asserts ownership by adverse possession must prove the presence of the essential elements of acquisitive prescription.
[132.2] Two Kinds: Ordinary and Extraordinary
Article 1117 of the Civil Code is instructive: ART. 1117. Acquisitive prescription of dominion and other real rights may be ordinary or extraordinary. Ordinary acquisitive prescription requires possession of things in good faith and with just title for the time xed by law. Articles 1132, 1134 and 1137 of the Civil Code, on the other hand, x the periods of possession, which provide: ART. 1132. The ownership of movables prescribes through uninterrupted possession for four years in good faith. The ownership of personal property also prescribes through uninterrupted possession for eight years, without need of any other condition. ART. 1134. Ownership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years. ART. 1137. Ownership and other real rights over immovables also prescribe through uninterrupted adverse possession thereof for thirty years, without need of title or of good faith. From the foregoing, it can be gleaned that acquisitive prescription of ownership and other real rights may be ordinary or extraordinary.33 Ordinary acquisitive prescription requires possession of things in good faith and with just title for the time xed by law;34 without good faith
Id. Art. 1117, NCC. 34 Id.

32 33
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and just title, acquisitive prescription can only be extraordinary in character.35 Possession is in good faith when there is a reasonable belief that the person from whom the thing is received has been the owner thereof and could thereby transmit his ownership.36 For purposes of prescription, there is just title when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right.37 Further, the law requires that the just title must be proved for purposes of prescription; it is never presumed.38
[132.3] Period of Prescription
For movable property, the period of ordinary prescription is four (4) years, while the period of extraordinary prescription is eight (8) years.39 For real property, the period of ordinary prescription is ten (10) years,40 while the period of extraordinary prescription is thirty (30) years.41 In the computation of time necessary for prescription the following rules shall be observed: (1) The present possessor may complete the period necessary for prescription by tacking his possession to that of his grantor or predecessor-in-interest; (2) It is presumed that the present possessor who was also the possessor at a previous time, has continued to be in possession during the intervening time, unless there is proof to the contrary; (3) The rst day shall be excluded and the last day included.42
Arzadon-Crisologo v. Raon, G.R. No. 171068, Sept. 5, 2007. Sps. Aguirre v. Heirs of Lucas Villanueva, supra, citing Heirs of Segunda Maningding v. CA, 342 Phil. 567, 574 (1997); see Art. 1127, NCC. 37 Art. 1129, NCC. 38 Art. 1131, NCC. 39 Art. 1132, NCC. 40 Art. 1134, NCC. 41 Art. 1137, NCC. 42 Art. 1138, NCC.
35 36
611
[132.4] When Prescription Does Not Lie
Prescription, as a mode of acquiring ownership or other real rights, does not apply in the following cases: (1) The rule is well-settled that prescription does not run against registered land. Thus, under Sec. 47 of PD No. 1529, otherwise known as the Property Registration Decree, it is specically provided that no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession. A title, once registered, cannot be defeated even by adverse, open and notorious possession.43 In J.M. Tuason & Co. v. Aguirre,44 the Court ruled that an action to recover possession of a registered land never prescribes in view of the provision of Section 44 of Act No. 496 to the effect that no title to registered land in derogation to that of a registered owner shall be acquired by prescription or adverse possession. In fact, there is a host of jurisprudence that hold that prescription and laches could not apply to registered land covered by the Torrens system.45 With more reason are these principles applicable to laches, which is merely an equitable principle. Laches may not prevail against a specic provision of law, since equity, which has been dened as justice outside legality is applied in the absence of and not against statutory law or rules of procedure.46 (2) Prescription, both acquisitive and extinctive does not run against the State.47 Hence, property of the State or any of its subdivisions which are classied as belonging to public dominion shall not be the object of prescription.48 Neither may acquisitive prescription be invoked against the patrimonial property of the State. As held in Alonso v. Cebu Country Club, Inc.,49 possession of patrimonial property of the
Heirs of Leopoldo Vencilao, Sr. v. CA, 288 SCRA 574 (1998). 7 SCRA 109 (1963). 45 Umbay v. Alecha, 220 Phil. 103 (1985); Quevada v. Glorioso, 356 Phil. 105 (1998); Bishop v. Court of Appeals, 208 SCRA 636 (1992); St. Peter Memorial Park, Inc. v. Cleofas, 92 SCRA 389 (1979). 46 Mateo v. Diaz, G.R. No. 137305, Jan. 17, 2002; Velez, Sr. v. Demetrio, G.R. No. 128576, Aug. 13, 2002. 47 Art. 1108(4), NCC. 48 Art. 1113, NCC. 49 G.R. No. 130876, Dec. 5, 2003.
43 44
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PROPERTY
Government, whether spanning decades or centuries, can not ipso facto ripen into ownership. This is based on the great principle of public policy. [See further discussion in supra 23.3] (3) There is a rule that a trustee cannot acquire by prescription the ownership of property entrusted to him, or that an action to compel a trustee to convey property registered in his name in trust for the benet of the cestui que trust does not prescribe, or that the defense of prescription cannot be set up in an action to recover property held by a person in trust for the benet of another, or that property held in trust can be recovered by the beneciary regardless of the lapse of time.50 That rule applies squarely to express trusts. The basis of the rule is that the possession of a trustee is not adverse. Not being adverse, he does not acquire by prescription the property held in trust.51 The rule of imprescriptibility of the action to recover property held in trust may possibly apply to resulting trusts as long as the trustee has not repudiated the trust.52 Acquisitive prescription may bar the action of the beneciary against the trustee in an express trust for the recovery of the property held in trust where: (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) such positive acts of repudiation have been made known to the cestui que trust; and (c) the evidence thereon is clear and conclusive.53 (4) The foregoing rule likewise applies to co-owners and co-heirs with respect to the property owned in common since co-ownership is a form of trust and every co-owner is a trustee for the others.54 Hence, the rule is that no prescription shall lie in favor of a co-owner or co-heirs as long as he expressly or impliedly recognizes the co-ownership.55 (5) In order to ripen into ownership, possession must be in the concept of an owner (en concepto de dueo).56 Thus, mere possession with a juridical title, such as by a usufructuary, a trustee, a lessee, an
Buan v. Vda. De Esconde v. CA, 323 Phil. 81, 89 (1996). Id. 52 Id. 53 Id. 54 Sanchez v. CA, 404 SCRA 541 (2003). 55 Art. 494, last par., NCC. 56 Arts. 540 and 1118, NCC.
50 51
613
agent or a pledgee, not being in the concept of an owner, cannot ripen into ownership by acquisitive prescription, unless the juridical relation is rst expressly repudiated and such repudiation has been communicated to the other party.57 (6) Acts of possessory character executed due to license or by mere tolerance of the owner would likewise be inadequate58 because possession, to constitute the foundation of a prescriptive right, must be en concepto de dueo, or, to use the common law equivalent of the term, that possession should be adverse, if not, such possessory acts, no matter how long, do not start the running of the period of prescription.59 (7) Possession obtained through force or intimidation does not also ripen into ownership because the law on acquisitive prescription requires that the possession be peaceful.60 (8) Possessory acts which are executed clandestinely and without the knowledge of the possessor does not likewise ripen into ownership because the law on acquisitive prescription requires that the possession be public.61 (9) Prescription does not run between husband and wife, even though there be a separation of property agreed upon in the marriage settlements or by judicial decree.62 Neither does prescription run between parents and children, during the minority or insanity of the latter, and between guardian and ward during the continuance of the guardianship.63
[132.5] Capacity to Acquire Ownership By Acquisitive Prescription
As a rule, persons who are capable of acquiring property or rights by other legal modes may acquire the same by means of prescription.64 As a consequence if just title is required (as the case of ordinary acquisitive
Esguerra v. Manantan, G.R. No. 158328, Feb. 23, 2007. Id. 59 Id. 60 Arts. 536 and 1118, NCC. 61 Arts. 537 and 1118, NCC. 62 Art. 1109, 1st par., NCC. 63 Art. 1109, 2nd par., NCC. 64 Art. 1107, NCC.
57 58
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prescription), the capacity to acquire property by prescription shall be the same capacity required for the particular title in question.65 Hence, if the just title is pursuant to a donation, the capacity required is that of the donee; if it is by succession, the capacity to succeed; and if it is by contract, the capacity to enter into contracts.66 But if just title is not required (as in the case of extraordinary prescription), the capacity for possession is required.67 The capacity for possession is discussed in supra 84.9. The foregoing rule shall apply also to minors and other incapacitated persons. Hence, for purposes of ordinary prescription where just title is required, the capacity to acquire property by prescription shall be the same capacity required for the particular title in question. For example, minors and other incapacitated persons are qualied to become donees but acceptance shall be done through their parents or legal representatives.68 For purposes of extraordinary prescription where just title is not required, the capacity for possession is required. For example, even a minor is qualied to acquire possession of a corporeal object through material occupation but he may not acquire possession of a right because the latter requires that he be possessed with full civil capacity. In case of the latter, however, the minor may acquire ownership by prescription through his parents, guardians or legal representatives. oOo
IV Tolentino, Civil Code of the Phil., 1992 ed., 4. Id. 67 Id. 68 Art. 741, NCC.
65 66
615
Title I. OCCUPATION
Art. 713. Things appropriable by nature which are without an owner, such as animals that are the object of hunting and shing, hidden treasure and abandoned movables, are acquired by occupation. (610) Art. 714. The ownership of a piece of land cannot be acquired by occupation. (n) Art. 715. The right to hunt and to sh is regulated by special laws. (611) Art. 716. The owner of a swarm of bees shall have a right to pursue them to anothers land, indemnifying the possessor of the latter for the damage. If the owner has not pursued the swarm, or ceases to do so within two consecutive days, the possessor of the land may occupy or retain the same. The owner of domesticated animals may also claim them within twenty days to be counted from their occupation by another person. This period having expired, they shall pertain to him who has caught and kept them. (612a) Art. 717. Pigeons and sh which from their respective breeding places pass to another pertaining to a different owner shall belong to the latter, provided they have not been enticed by some artice or fraud. (613a) Art. 718. He who by chance discovers hidden treasure in anothers property shall have the right granted him in Article 438 of this Code. (614) Art. 719. Whoever nds a movable, which is not treasure, must return it to its previous possessor. If the latter is unknown, the nder shall immediately deposit it with the mayor of the city or municipality where the nding has taken place. The nding shall be publicly announced by the mayor for two consecutive weeks in the way he deems best. If the movable cannot be kept without deterioration, or without expenses which considerably diminish its value, it shall be sold at public auction eight days after the publication. Six months from the publication having elapsed without the owner having appeared, the thing found, or its value, shall be awarded to the
615
616
PROPERTY
nder. The nder and the owner shall be obliged, as the case may be, to reimburse the expenses. (615a) Art. 720. If the owner should appear in time, he shall be obliged to pay, as a reward to the nder, one-tenth of the sum or of the price of the thing found. (616a)
133. Occupation
[133.1] Concept and Requisites
Occupation is a mode of acquiring ownership by the seizure or apprehension of things corporeal which have no owner with the intention of acquiring them and according to the rules laid down by law.1 It consists in taking possession of a thing over which no one has a proprietary right. The rule of the law is res nullius cedit occupanti. There are four (4) essential conditions or requisites which must co-exist in order to give to occupation its full legal signicance as a mode of acquiring ownership. First, the thing must be a res nullius that is, a thing which either never had an owner, or which, by virtue of a previous abandonment (dereliction), has not an owner at the time of its occupation. Secondly, it must be appropriable by nature or one that can be seized or apprehended. In other words, it must be corporeal. Thirdly, it must be brought into the actual possession or control of the one professing to acquire it. Fourthly, the person must acquire it with the intention of acquiring ownership. He must therefore have the necessary capacity to consent.2
[133.2] Animals as Object of Appropriation
Wild beasts, birds, shes, and in fact all animals which are still in their natural state of freedom become the property of the captor by virtue of occupation. This rule, of course, applies especially to hunting and shing. And this rule applies even though the capture be made on anothers land, without prejudice, however, to the liability of the captor for any damage resulting from his trespass. However, the right to hunt and to sh is regulated by special laws.3 Under Philippine laws (specically R.A. No. 9147, otherwise known as
3 Sanchez Roman 209. 3 Sanchez 210; 2 Castan 140. 3 Art. 715, NCC.
1 2
DIFFERENT MODES OF ACQUIRING OWNERSHIP OCCUPATION
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the Wildlife Resources Conservation and Protection Act; R.A. No. 8550, otherwise known as the Philippine Fisheries Code of 1998; and Fisheries Administrative Order Nos. 202 and 208) and international treaty (the Convention on International Trade in Endangered Species of Wild Fauna and Flora or CITES), the buying, using, gathering, killing, processing and/or transporting of rare, threatened and endangered species are prohibited. Hence, the rule on acquisition of ownership by virtue of occupation stated in Article 713 of the New Civil Code does not apply to animals which are classied as rare, threatened or endangered species.
[133.2.1] Swarm of Bees
There is a special rule in case of acquisition of ownership of swarm of bees through occupation. The rule says that the owner of a swarm of bees has a right to purse them to anothers land, with the obligation of indemnifying the possessor of the latter for the damage.4 The law does not, however, authorize the owner of the swarm of bees to enter an enclosed estate. In the case of the latter, it is necessary to obtain the permission of the owner of the estate before entering the same.5 In case the owner of the swarm of bees fails to purse the swarm, or if he initially makes a pursuit but he ceases to do so within two (2) consecutive days, the law considers him as to have abandoned ownership of the swarm of bees6 in which case, the swarm becomes res nullius and ownership thereof may now be acquired by the owner of the estate by way of occupation.7 If the owner of the estate fails to seize or capture the swarm of bees, the same shall remain to be res nullius.
[133.2.2] Wild Animals
The concept of wild animals has already been discussed in supra 102.1 and 102.2. As therein discussed, wild animals are those which are found in their state of natural freedom. They are without an owner or res nullius. Hence, ownership thereof may be acquired by occupation. Pursuant to Article 560, they are, however, considered
Art. 716, NCC. 2 Castan, 9th ed., 212. 6 Art. 716, NCC. 7 Id.
4 5
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possessed only while they are under ones control. As a consequence, once they recover their natural freedom or once they are restored to their original state of being free, they ceased to be under ones possession. As a consequence, they will immediately regain their status of being res nullius and their ownership may thus be acquired by another person through occupation.
[133.2.3] Domesticated or Tamed Animals
The concept of domesticated or tamed animals is also discussed in supra 102.1 and 102.2. As therein discussed, these are the animals which were formerly wild but which have been subdued and retained the habit of returning to the premises of the possessor.8 They will be regarded as domesticated animals as long as they retain such habit of returning to the premises of the possessor but once they lose said habit, they will immediately revert back to their original status of being wild. As a consequence, they will re-acquire their original status of being res nullius and may thus be acquired by another person by occupation. However, so long as they retain the habit of returning to the premises of the possessor, the ownership over these animals is not affected by the simple fact that they are no longer under the control of the present possessor-owner. Pursuant to Article 716 of the New Civil Code, the possessor-owner of domesticated animals has a period of twenty (20) days counted from their occupation by another person within which to reclaim them. If after the expiration of this period the possessor-owner fails to reclaim them, the ownership over these animals is considered to have been abandoned. Hence, they will now again be considered as res nullius and they shall pertain to him who has caught and kept them.9 In other words, the captor shall acquire ownership of the animals by occupation.
[133.2.4] Domestic Animals
The foregoing rule does not apply to domestic or tame animals, or those which are born and reared under the control and care of man. In the case of the domestic animals, they are considered as movable property. Hence, they are subject to the same rules governing the
8 9
See Art. 560, NCC. Art. 716, NCC.
619
acquisition of ownership over other movables. If they are lost, their owner, as a rule, can recover them from the present possessor without need of indemnifying the latter subject to the qualications stated in supra 101.2.1 to 101.3. The ownership thereof may not be acquired by occupation unless these animals are abandoned by their owner. The ownership over them can be acquired, however, by another person through acquisitive prescription the period of prescription being four years if the possessor is in good faith or eight years, in any event.
[133.3] Hidden Treasure
A treasure, in the legal sense, is any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear.10 It is considered, in law, as res nullius and may thus be acquired by occupation. The right of the nder is regulated, however, by the provisions of Article 438 of the New Civil Code, in relation to Article 718 of the same Code. Hence pursuant to these articles, the treasure belongs wholly to the nder if found upon owns ground; but if found or discovered by chance in anothers property and the nder not being a trespasser, the treasure is equally divided between the nder and the owner of the ground. A different rule applies, however, if the nding of the treasure is pursuant to a deliberate treasure-hunting activity [see the discussions in supra 39.2.3].
[133.4] Abandoned, Mislaid and Lost Property
Things the ownership of which has been abandoned are capable of occupation. But the abandonment must be absolute and must further comply with the requirements stated in supra 129.3.1. Note that abandonment of things is the opposite of occupation. It takes place when the owner abandons the possession of a thing with the intention of renouncing his ownership thereof. The effect of such abandonment is to make the thing a res nullius the moment the abandonment is complete. Anyone may therefore acquire ownership of the same by occupation. But distinction must be made between abandoned property, on the one hand, and lost and mislaid property, on the other hand. In the case of the former, it is necessary that the spes recuperandi (hope of recovery
10
Art. 439, NCC.
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or recapture) is gone and the animus revertendi (intent to recover) is given up.11 Thus, it has been held there is no real intention to abandon a property when, as in the case of a shipwreck or a re, things are thrown into the sea or on the highway.12 The mere fact that the cargo is sunk with a shipwrecked at sea by no means deprives the owner of said cargo of his property therein. He still has the right to reclaim such property and to recover the same if possible.13 In the case of lost and mislaid (or misplaced) property, however, the spes recuperandi and the animus revertendi are still alive. Hence, its ownership is not lost yet by its owner. So long as the property is not under the control of another person, the present owner does not lose both the ownership and possession of the same.14 However, if the misplaced property is already in the control of another person, its possession is already deemed lost. This is the difference between mislaid (misplaced property) and lost property. But in the case of a lost property, note that it is only the possession which is considered lost by the owner, not his ownership thereof. The lost property is not, therefore, considered a res nullius but a res alicujus. Hence, its ownership may not be acquired by the nder through occupation. The nder, far from becoming owner of the thing found, is bound to return it to its previous owner, if known, or to immediately deposit the same with the mayor of the city or municipality where the nding has taken place, if the owner is unknown.15 If the nder fails to comply with these procedural requirements and appropriates for himself the movable property he found, he shall be liable for the crime of theft.16 If the lost property is turned over to the mayor, the latter is then required to make a public announcement of such nding for two consecutive weeks in a manner he deems best.17 If after six months, the owner does not appear, the thing found, or its value, shall be awarded to the nder, with the obligation to reimburse the expenses incurred in the publication.18 It is only after compliance with the foregoing rules that
U.S. v. Rey, 8 Phil. 500 (1907). Id. 13 Id. 14 See Art. 556, NCC. 15 Art. 719, 1st par., NCC. 16 Art. 308(1), RPC. 17 Art. 719, 2nd par., NCC. 18 Art. 719, 4th par., NCC.
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the nder shall acquire ownership of the thing found by occupation. If the owner appears on time, he shall be obliged, however, to pay, as a reward to the nder, one-tenth of the sum or of the price of the thing found.19 oOo
19
Art. 720, NCC.
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Title II. INTELLECTUAL CREATION

Art. 721. By intellectual creation, the following persons acquire ownership: (1) The author with regard to his literary, dramatic, historical, legal, philosophical, scientic or other work; (2) The composer, as to his musical composition; (3) The painter, sculptor, or other artist, with respect to the product of his art; (4) The scientist or technologist or any other person with regard to his discovery or invention. (n) ART. 722. The author and the composer, mentioned in Nos. 1 and 2 of the preceding article, shall have the ownership of their creations even before the publication of the same. Once their works are published, their rights are governed by the Copyright laws. The painter, sculptor or other artist shall have dominion over the product of his art even before it is copyrighted. The scientist or technologist has the ownership of his discovery or invention even before it is patented. (n) ART. 723. Letters and other private communications in writing are owned by the person to whom they are addressed and delivered, but they cannot be published or disseminated without the consent of the writer or his heirs. However, the court may authorize their publication or dissemination if the public good or the interest of justice so requires. ART. 724. Special laws govern copyright and patent. (429a)
134. Intellectual Creation

[134.1] Denition of Intellectual Property
Intellectual property refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.1 Section 4.1 of R.A. No. 8293, otherwise known as
1
Http://www.wipo.int. 622
DIFFERENT MODES OF ACQUIRING OWNERSHIP INTELLECTUAL CREATION
623
the Intellectual Property Code of the Philippines, denes the scope of the term intellectual property rights, as follows: a) b) c) d) e) f) and g) Protection of undisclosed information (n) [TRIPS]. Copyright and related rights; Trademarks and service marks; Geographic indications; Industrial designs; Patents; Layout-designs (topographies) of integrated circuits;
[134.2] When Ownership Is Acquired
The author, the composer, the painter, the sculptor or other artists, the scientists and the inventors acquire ownership over their works from the moment of their creation2 even before the same are published, copyrighted or patented.3 Being the owner thereof, the creator has absolute control over his work and he may do anything with it as he pleases, including the right to share it with others. He also enjoys the exclusive right to its publication but this exclusive right is limited only to the rst publication.4 Unless placed under the protection of the Copyright Law, once published, the work is dedicated to the public, and the author loses the exclusive right to control subsequent publications by others.5 The special law governing patents and copyrights is Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines.
[134.3] Ownership of Letters
With respect to the ownership of letters and other private communications in writing, a distinction must be made between the
Art. 721, NCC. Art. 722, NCC. 4 Santos v. McCullough Printing Co., 12 SCRA 321; Filipino Society of Composers, Authors and Publishers, Inc. v. Tan, 148 SCRA 461. 5 Id.
2 3
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material or physical object (the letter itself) and the ideas or thoughts contained in the letter (its contents). The former is owned by the person to whom it is addressed and delivered (the recipient) but the latter is owned by the author or writer (the sender). As a consequence, while the recipient may have the control and possession of the physical letter itself by virtue of his ownership of the same, the authors consent is required in cases of publication or dissemination of the letter.6 In addition, the copyright also belongs to the author or writer (the sender).7 If the authors consent is not obtained in the publication and dissemination of the contents of the letter, the latter may seek injunctive relief from the courts, in addition to his right to recover damages. However, if the public good or the interest of justice so requires, the court may authorize the publication or dissemination of a letter or other private communications.8 oOo
Art. 723, NCC. Sec. 178.6, R.A. No. 8293. 8 Art. 723, NCC.
6 7
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Title III. DONATION

Chapter 1 NATURE OF DONATIONS
Art. 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. (618a)
135. Denition and Concept

[135.1] Denition
The Civil Code denes donation as an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it.1 It may also be dened as a gratuitous contract whereby the donor divests himself, at present and irrevocably, of the thing given in favor of the donee.2 The one who donates is called the donor and the one who receives the donation is called the donee.
[135.2] Essential Elements of Donation
Not every form of liberality, however, is considered as donation.3 The essential elements of donation are as follows: (a) the essential reduction of the patrimony of the donor; (b) the increase in the patrimony of the donee; and (c) the intent to do an act of liberality or animus donandi.4 Hence, to constitute donation the liberality should be strictly construed, and as such, donation may be dened as the act of liberality by which a person impoverishes himself by a fraction of his patrimony in favor of another person who is thereby enriched.5 Thus, while there
Art. 725, NCC. Concurring opinion of J. Antonio in Alejandro v. Geraldez, 78 SCRA 245, 266. 3 II Caguioa, Civil Code, 1966 ed., p. 363. 4 Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla de Leon, 425 SCRA 447, 458-459 (2004), citing Republic v. Guzman, 326 SCRA 90, 95 (2000). See also Abello v. Commissioner of Internal Revenue, 452 SCRA 162, 168 (2005). 5 4 Castan, 7th ed., 163, cited in II Caguioa, Civil Code, 1966 ed., 363.
1 2
625
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is liberality in commodatum, gratuitous deposit and mutuum without interest, these are not considered donations by the Civil Code as these contracts do not satisfy the elements just mentioned. In Abello v. Commissioner of Internal Revenue,6 the partners in the ACCRA law rm contributed P882,661.31 each to the campaign funds of Senator Edgardo Angara, then running for the Senate during the 1987 national elections. In the year following the elections, the Bureau of Internal Revenue (BIR) assessed each of the partners P263,032.66 for their contributions, representing unpaid donors taxes. Angaras partners questioned the propriety of the imposition of donors tax on the ground that political or electoral contributions are not considered gifts under the National Internal Revenue Code. In discrediting the contention of the partners, the Court explained: The NIRC does not dene transfer of property by gift. However, Article 18 of the Civil Code, states: In matters which are governed by the Code of Commerce and special laws, their deciency shall be supplied by the provisions of this Code. Thus, reference may be made to the denition of a donation in the Civil Code. Article 725 of said Code denes donation as: an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. Donation has the following elements: (a) the reduction of the patrimony of the donor; (b) the increase in the patrimony of the donee; and (c) the intent to do an act of liberality or animus donandi. The present case falls squarely within the denition of a donation. Petitioners, the late Manuel G. Abello, Jose C. Concepcion, Teodoro D. Regala and Avelino V. Cruz, each gave P882,661.31 to the campaign funds of Senator Edgardo Angara, without any material consideration. All three
6
452 SCRA 162, Feb. 23, 2005.
DIFFERENT MODES OF ACQUIRING OWNERSHIP DONATION Nature of Donations
627
elements of a donation are present. The patrimony of the four petitioners were reduced by P882,661.31 each. Senator Edgardo Angaras patrimony correspondingly increased by P3,530,645.24. There was intent to do an act of liberality or animus donandi was present since each of the petitioners gave their contributions without any consideration.7
[135.3] Donative Intent or Animus Donandi
Donative intent is a creature of the mind. It cannot be perceived except by the material and tangible acts which manifest its presence. This being the case, donative intent is presumed present when one gives a part of ones patrimony to another without consideration.8 It is not negated when the person donating has other intentions, motives or purposes which do not contradict donative intent.9 Thus, in Abello v. CIR,10 the Supreme Court held that the fact that the donors would somehow in the future benet from the election of the candidate to whom they made campaign contributions, in no way amounts to a valuable consideration so as to remove political contributions from the purview of a donation as their candidate was under no obligation to benet them. The Court explained: Since the purpose of an electoral contribution is to inuence the results of the election, petitioners again claim that donative intent is not present. Petitioners attempt to place the barrier of mutual exclusivity between donative intent and the purpose of political contributions. This Court reiterates that donative intent is not negated by the presence of other intentions, motives or purposes which do not contradict donative intent. Petitioners would distinguish a gift from a political contribution by saying that the consideration for a gift is the liberality of the donor, while the consideration for a political contribution is the desire of the giver to inuence the result of an election by supporting candidates who, in
At pp. 168-169. Id., at p. 170. 9 Id. 10 Supra.
7 8
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the perception of the giver, would inuence the shaping of government policies that would promote the general welfare and economic well-being of the electorate, including the giver himself. Petitioners attempt is strained. The fact that petitioners will somehow benet in the future from the election of the candidate to whom they contribute, in no way amounts to a valuable consideration so as to remove political contributions from the purview of a donation. Senator Angara was under no obligation to benet the petitioners. The proper performance of his duties as a legislator is his obligation as an elected public servant of the Filipino people and not a consideration for the political contributions he received. In fact, as a public servant, he may even be called to enact laws that are contrary to the interests of his benefactors, for the benet of the greater good. In ne, the purpose for which the sums of money were given, which was to fund the campaign of Senator Angara in his bid for a senatorial seat, cannot be considered as a material consideration so as to negate a donation.11 For a donation to exist, however, the intent to donate must be effectively carried out. Hence, a mere declaration of an intention or desire to donate is not a donation.12 In the Jutic case,13 for example, Arsenio Seville executed an afdavit expressing his intention or desire to give to his brother Melquiades Seville his properties in the event of his death at some future time. The Court concluded that there was no donation, be it inter vivos or mortis causa, as such intention or desire was not effectively carried out after the execution of the afdavit.
Republic v. Guzman 326 SCRA 90 (Feb. 18, 2000) David Rey Guzman, a natural-born American citizen, is the son of the spouses Simeon Guzman, a naturalized American citizen but formerly a citizen
At pp. 170-171. See Justice v. Court of Appeals, 153 SCRA 269 (1987) and Aldaba v. Court of Appeals, 27 SCRA 263. 13 Supra.
11 12
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of the Philippines, and Helen Meyers Guzman, an American citizen. In 1968 Simeon died leaving to his sole heirs Helen and David an estate consisting of several parcels of land located in Bulacan. In 1970, Helen and David executed a Deed of Extrajudicial Settlement of the Estate of Simeon Guzman dividing and adjudicating to themselves all the property belonging to the estate of Simeon. In 1981, Helen executed a Quitclaim Deed assigning, transferring, and conveying to her son David her undivided one-half interest on all the parcels of land subject matter of the Deed of Extrajudicial Settlement of the Estate of Simeon Guzman. Since the document appeared not to have been registered, upon the advice of her lawyer, Helen executed another document, a Deed of Quitclaim in August 1989 conrming the earlier deed of quitclaim as well as modifying the document to encompass all her other property in the Philippines. In October 1989, David executed a Special Power of Attorney where he acknowledged that he became the owner of the parcels of land subject of the Deed of Quitclaim executed by Helen and empowering Atty. Abela to sell or otherwise dispose of the lots. A certain lawyer wrote the Ofce of the Solicitor General and furnished it with documents showing that Davids ownership of the one-half (1/2) of the estate of Simeon Guzman was defective. Thus, the OSG led a petition for escheat praying that 1/2 of Davids interest in each of the subject parcels of land be forfeited in favor of the estate. The State anchors its argument on Sections 7 and 8 of Article XII of the Constitution. The State contends that the acquisition of the parcels of land by David does not fall under any of these exceptions. It asserts that David being an American citizen could not validly acquire one-half (1/2) interest in each of the subject parcels of land by way of the two deeds of quitclaim as they are in reality donations inter vivos and that the elements of donation are present in the conveyance made by Helen in favor of David. David, maintains, on the other hand, that he acquired the property by right of accretion and not by way of donation, with the deeds of quitclaim merely declaring Helens intention to renounce her share in the property and not an intention to donate. The intention of Helen, in fact, was to preserve the Bulacan properties within the bloodline of Simeon from where they originated, over and above the benet that would accrue to David by reason of her renunciation. In holding that the subject quitclaims are not in the nature of donation, the Court explained There are three (3) essential elements of a donation: (a) the reduction of the patrimony of the donor; (b) the increase in the patrimony of the donee; and, (c) the intent to do an act of liberality or animus donandi. When applied to a donation of an immovable property, the law further requires that the donation be
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made in a public document and that there should be an acceptance thereof made in the same deed of donation or in a separate public document. In cases where the acceptance is made in a separate instrument, it is mandated that the donor should be notied thereof in an authentic form, to be noted in both instruments. Not all the elements of a donation of an immovable property are present in the instant case. The transfer of the property by virtue of the Deed of Quitclaim executed by Helen resulted in the reduction of her patrimony as donor and the consequent increase in the patrimony of David as donee. However, Helens intention to perform an act of liberality in favor of David was not sufciently established. A perusal of the two (2) deeds of quitclaim reveals that Helen intended to convey to her son David certain parcels of land located in the Philippines, and to re-afrm the quitclaim she executed in 1981 which likewise declared a waiver and renunciation of her rights over the parcels of land. The language of the deed of quitclaim is clear that Helen merely contemplated a waiver of her rights, title and interest over the lands in favor of David, and not a donation. That a donation was far from Helens mind is further supported by her deposition which indicated that she was aware that a donation of the parcels of land was not possible since Philippine law does not allow such an arrangement. She reasoned that if she really intended to donate something to David it would have been more convenient if she sold the property and gave him the proceeds therefrom. It appears that foremost in Helens mind was the preservation of the Bulacan realty within the bloodline of Simeon from where they originated, over and above the benet that would accrue to David by reason of her renunciation. The element of animus donandi therefore was missing. [135.4] Donation as Contract
There is no doubt that donation is a contract. The Civil Code denes contract as a meeting of the minds between two persons whereby one binds himself, with respect to the other to give something or to render some service.14 Under Article 1318 of the New Civil Code, there is no contract unless the following requisites concur: (1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which is established. All three
14
Art. 1305, NCC.
631
requisites are likewise present in donation. Like any contract, donation also requires the concurrence of the reciprocal consent of the parties and it does not become perfect until it is accepted by the donee.15 In other words, there is a concurrence of offer (coming from the donor) and acceptance (coming from the donee), consequently, a contract. It is for this reason that donations inter vivos are likewise governed by the general provisions on contracts and obligations in all that is not determined under the title of the New Civil Code on donations.16 The fact that the New Civil Code in Article 725 uses the term act instead of contract does not militate against the view presented above because this is merely a consequence of Emperor Napoleons error who could not conceive of a contract without reciprocal obligations.17 Donation is a bilateral act, and, as such, is a contract, but it is a unilateral contract which imposes obligations only on the donor.18 Thus, Justice J.B.L. Reyes commented, as follows: The Code has failed to recognize that modern civilists declare it unjustied to separate donations from contracts even as a mode of acquiring and transmitting ownership. It is now conceded that historically such separation was due to Napoleons refusal to view donation as a contract because it did not create reciprocal obligations (thereby confusing bilaterality of consent and bilaterality of obligations). (See French authors and XI Scaevola, 526-527). The text says that donation is an act. The project submitted to the Council of State said it is a contract. The First Consul demanded the alteration on the pretext that a contract imposes reciprocal obligations on the contracting parties and thus the appellation could not be given to donations, wherein the donor is the only one bound to alienate, receiving nothing in return. He forgot the existence of unilateral contracts, but the Councilors of State had the
15 See Art. 734, NCC. See also Concurring opinion of J. Antonio in Alejandro v. Geraldez, 78 SCRA 245, 266-267 and Lagazo v. CA, 287 SCRA 18, 27. 16 See Art. 732, NCC. 17 II Caguioa, Civil Code, 1966 ed., 364-365. 18 4 Castan, 7th ed., 169, cited in II Tolentino, Civil Code, 1992 ed., 530 and II Caguioa, Civil Code, 1966 ed., 365.
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weakness to submit to his objection. (Plianol-Ripert, Droit Civil, Traite Pratique, Vol. 5, p. 13). Donation has all the requisites of contracts (consent of both parties, subject matter and cause), and like them requires tradition (delivery) to vest title in the donee. (See Castan, Der. Civil, 6th ed., Vol. 3, pp. 95-96). Note that the Partidas (Part V, Title IV) coincided with the modern doctrine, and include donations among contracts that transfer ownership. The error of the Spanish Civil Code, which arose from slavish copying of the French Code, should have been corrected, and not perpetuated. It is no answer that donations are essentially gratuitous; so is commodatum, which is included by this Code in the Book (IV) on contracts. The new Italian Civil Code has corrected the French and Spanish Codes in this matter, and it is regrettable that ours persists in the erroneous Napoleonic concept.19
[135.5] Donation as Mode of Acquisition of Ownership
Under the New Civil Code, donation is one of the modes of acquiring ownership.20 Hence, it is not simply a title which requires tradition (delivery) in order that ownership may be effectively transmitted to the donee. The preceding discussions in supra 135.4 classifying donation as a contract is not in conict with the present view that donation is also a mode of acquiring ownership. Pursuant to the language of the second paragraph of Article 712 of the New Civil Code, not all contracts require delivery in order to transfer ownership since the law requires tradition in consequence of certain contracts only and not in all contracts, thus admitting the fact that there are contracts which do not require tradition (delivery) in order to transfer ownership. A good example of such contract which does not require tradition (delivery) in order to transfer ownership is the gratuitous contract of donation. Hence, it may be viewed that our Civil Code treats donation as a contract that transfers ownership. As explained by the Court in Liguez
See Lawyers Journal, Nov. 30, 1950, p. 555. Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla De Leon, 425 SCRA 447, 458, citing Art. 712, NCC.
19 20
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v. Lopez,21 donation does not need to be completed by tradition since Article 712 prescribes that ownership and rights therein are acquired and transmitted by donation, succession and in consequence of certain contracts by tradition, thereby implying that donation is not one of the contracts requiring tradition. As a mode of acquiring ownership, donation results in an effective transfer of title over the property from the donor to the donee and the donation is perfected from the moment the donor knows of the acceptance by the donee.22 And once a donation is accepted, the donee becomes the absolute owner of the property donated.23
Art. 726. When a person gives to another a thing or right on account of the latters merits or of the services rendered by him to the donor, provided they do not constitute a demandable debt, or when the gift imposes upon the donee a burden which is less than the value of the thing given, there is also a donation. (619) Art. 727. Illegal or impossible conditions in simple and remuneratory donations shall be considered as not imposed. (n) Art. 728. Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions, and shall be governed by the rules established in the Title on Succession. (620) Art. 729. When the donor intends that the donation shall take effect during the lifetime of the donor, though the property shall not be delivered till after the donors death, this shall be a donation inter vivos. The fruits of the property from the time of the acceptance of the donation, shall pertain to the donee, unless the donor provides otherwise. (n) Art. 730. The xing of an event or the imposition of a suspensive condition, which may take place beyond the natural expectation of life of the donor, does not destroy the nature of the act as a donation inter vivos, unless a contrary intention appears. (n) Art. 731. When a person donates something, subject to the resolutory condition of the donors survival, there is a donation inter vivos. (n) Art. 732. Donations which are to take effect inter vivos shall be governed by the general provisions on contracts and obligations in all that is not determined in this Title. (621)
L-11240, Feb. 13, 1958. Heirs of Cesario Velasquez v. CA, 324 SCRA 552; see also Vda. De Arceo v. CA, 185 SCRA 489 (1990). 23 Id.
21 22
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Art. 733. Donations with an onerous cause shall be governed by the rules on contracts, and remuneratory donations by the provisions of the present Title as regards that portion which exceeds the value of the burden imposed. (622)
136. Classications of Donation

[136.1] In General
Donations may be classied as to their taking effect in to donations mortis causa and donations inter vivos. If the donation is made in contemplation of the donors death, meaning that the full or naked ownership of the donated properties will pass to the donee only because of the donors death, then it is at that time that the donation takes effect, and it is a donation mortis causa which should be embodied in a last will and testament.24 But if the donation takes effect during the donors lifetime or independently of the donors death, meaning that the full or naked ownership (nuda proprietas) of the donated properties passes to the donee during the donors lifetime, not by reason of his death but because of the deed of donation, then the donation is inter vivos.25 Donations inter vivos, on the other hand, may be classied according to purpose or cause into: (1) pure or simple; (2) remuneratory or compensatory; (3) conditional or modal; and (4) onerous.26 A pure or simple donation is one where the underlying cause is plain gratuity27 or pure liberality (no strings attached).28 This is donation in its truest form.29 On the other hand, a remuneratory or compensatory donation is one made for the purpose of rewarding the donee for past services, which services do not amount to a demandable debt.30 A conditional or modal donation is one where the donation is made in consideration of future services or where the donor imposes certain conditions, limitations or charges upon the donee, the value of which is inferior than that of the donation given.31 Finally, an onerous donation is that which imposes
24
Alejandro v. Geraldez, 78 SCRA 245, 253, citing Bonsato v. Court of Appeals, 95 Phil.
481. Id., citing Castro v. Court of Appeals, 27 SCRA 1076. Republic v. Silim, 356 SCRA 1, 8. 27 Id., citing Art. 725, NCC. 28 Lagazo v. Court of Appeals, 287 SCRA 18, 24. Also in De Luna v. Abrigo, 181 SCRA 150, 155. 29 Republic v. Silim, supra, p. 8. 30 Id., citing Art. 726, NCC. 31 Id., citing Arts. 726 and 733, NCC.
25 26
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upon the donee a reciprocal obligation or, to be more precise, this is the kind of donation made for a valuable consideration, the cost of which is equal to or more than the thing donated.32 Of all the foregoing classications, donations of the onerous type are the most distinct. This is because, unlike the other forms of donation, the validity of and the rights and obligations of the parties involved in an onerous donation is completely governed not by the law on donations but by the law on contracts.33
[136.2] Donations Mortis Causa [136.2.1] Concept
There used to be a prevailing notion, spawned by a study of Roman Law, that the Civil Code recognizes a donation mortis causa as a juridical act in contraposition to a donation inter vivos.34 That impression persisted because the implications of article 620 of the Spanish Civil Code, now Article 728 of the Civil Code, had not been fully expounded in the law schools.35 The concept of donation mortis causa of the Roman Law and the Spanish pre-codal legislation has been eliminated as a juridical entity from and after the enactment of the Spanish Civil Code of 1889 (Art. 620) as well as the New Civil Code of the Philippines (Art. 728), which admit only gratuitous transfers of title or real rights to property either by way of donations inter vivos or else by way of last will and testament, executed with the requisite legal formalities.36 Otherwise put, Article 620 of the Spanish Civil Code (now Article 728 of the New Civil Code) merged donations mortis causa with testamentary dispositions and thus suppressed the said donations as an independent legal concept.37 Article 728 of the Civil Code, provides, as follows: Art. 728. Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions, and shall be governed by the rules established in the Title on Succession. (620)
Id., citing Art. 733, NCC. See also De Luna v. Abrigo, supra, p. 156. Id. See also Art. 733, NCC. 34 Alejandro v. Geraldez, 78 SCRA 245, 253 (1977). 35 Id. 36 Bonsato v. Court of Appeals, 95 Phil. 481, cited in Puig v. Peaorida, 15 SCRA 276, 282 (1965). 37 Alejandro v. Geraldez, supra, p. 254.
32 33
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Note that the New Civil Code does not use the term donation mortis causa.38 According to Manresa, a transfer mortis causa, which should be embodied in a last will and testament, should not be called donation mortis causa since it is in reality a legacy.39 The term donation mortis causa as commonly employed is merely a convenient name to designate those dispositions of property that are void when made in the form of donations.40
[136.2.2] Distinguished From Donations Inter Vivos
It is the time of effectivity (aside from the form) which distinguishes a donation inter vivos from a donation mortis causa. And the effectivity is determined by the time when the full or naked ownership (dominium plenum or dominium directum) of the donated properties is transmitted to the donees.41 If the donation is made in contemplation of the donors death, meaning that the full or naked ownership of the donated properties will pass to the donee only because of the donors death, then it is at that time that the donation takes effect, and it is a donation mortis causa which should be embodied in a last will and testament.42 But if the donation takes effect during the donors lifetime or independently of the donors death, meaning that the full or naked ownership (nuda proprietas) of the donated properties passes to the donee during the donors lifetime, not by reason of his death but because of the deed of donation, then the donation is inter vivos.43
[136.2.3] How to Determine One from the Other
Crucial in determining whether the donation is inter vivos or mortis causa is the determination of whether the donor intended to transfer ownership over the properties upon the execution of the deed.44 Otherwise stated, whether a donation is inter vivos or mortis causa depends upon the nature of the disposition made. Did the donor intend to transfer the ownership of the property donated upon the execution of
Id. 5 Manresa, Codigo Civil, 6th ed., p. 107, cited in Alejandro v. Geraldez, supra, p. 252. 40 Bonsato v. CA, supra, p. 487. 41 Alejandro v. Geraldez, supra, p. 253. 42 Id., p. 253, citing Bonsato v. Court of Appeals, 95 Phil. 481. 43 Id., citing Castro v. Court of Appeals, 27 SCRA 1076. 44 Reyes v. Mosqueda, 187 SCRA 661, 671 (1990). See also Austria-Magat v. Court of Appeals, 375 SCRA 556, citing Gestopa v. Court of Appeals, 342 SCRA 105, 110.
38 39
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the donation? If this is so, as reected from the provisions contained in the donation, then it is inter vivos; otherwise, it is merely mortis causa, or made to take effect after death.45 Sometimes the nature of the donation becomes controversial when the donees enjoyment of the property donated is postponed until after the donors death.46 However, Articles 729 and 730 of the Civil Code provide, as follows: Art. 729. When the donor intends that the donation shall take effect during the lifetime of the donor, though the property shall not be delivered till after the donors death, this shall be a donation inter vivos. The fruits of the property from the time of the acceptance of the donation shall pertain to the donee, unless the donor provides otherwise. (n) Art. 730. The xing of an event or the imposition of a suspensive condition, which may take place beyond the natural expectation of life of the donor, does not destroy the nature of the act as a donation inter vivos, unless a contrary intention appears. (n) When the time xed for the commencement of the enjoyment of the property donated be at the death of the donor, or when the suspensive condition is related to his death, confusion might arise. To avoid it we must distinguish between the actual donation and the execution thereof. That the donation is to have effect during the lifetime of the donor or at his death does not mean the delivery of the property must be made during his life or after his death. From the moment that the donor disposes freely of his property and such disposal is accepted by the donee, the donation exists, perfectly and irrevocably. Until the day arrives or until the condition is fullled, the donation, although valid when made, cannot be realized. Thus, he who makes the donation effective upon a certain date, even though to take place at his death, disposes of that which he donated and he cannot afterwards revoke the donation nor dispose of the said property in favor of another.47
45 Castro v. Court of Appeals, 27 SCRA 1076, 1082 (1969), cited in National Treasurer of the Phil. v. Vda. De Meimban, 131 SCRA 264, 269 (1984). 46 Castro v. CA, supra, pp. 1082-1083. 47 5 Manresa, Codigo Civil, 6th ed., p. 108, cited in Castro v. CA, supra, p. 1083.
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And in ascertaining the intention of the donor, all of the deeds provisions must be read together.48 Apart from its language, the real nature of a deed may likewise be ascertained from the intention of the parties as demonstrated by the circumstances attendant upon its execution.49 Hence, it is not sufcient to make a donation one mortis causa, requiring execution of the instrument of gift in the form and manner required for a will, that the instrument of donation states that it is mortis causa, if it can be gathered from the body of the instrument that the main consideration is not death of the donor but rather services rendered to him by the donee, or his affection for the latter, and title is transferred immediately to the donee, even though the gift is conditioned to take effect after death of the donor insofar as possession and enjoyment of the property is concerned.50 In other words, the designation of the donation as mortis causa, or a provision in the deed to the effect that the donation is to take effect at the death of the donor are not controlling criteria;51 such statements are to be construed together with the rest of the instrument, in order to give effect to the real intent of the transferor.52 It is now a settled rule that the title given to a deed of donation is not the determinative factor which makes the donation inter vivos or mortis causa.53 As early as the case of Laureta v. Mata, et al.,54 the Supreme Court ruled that the dispositions in a deed of donation whether inter vivos or mortis causa do not depend on the title or term used in the deed of donation but on the provisions stated in such deed.55 The Court explained in Concepcion v. Concepcion56 x x x But, it is a rule consistently followed by the courts that it is the body of the document of donation and the statements contained therein, and not the title that should be
48 Gestopa v. Court of Appeals, 342 SCRA 105, 111 (2000), citing Alejandro v. Geraldez, supra, p. 261. 49 Sicad v. Court of Appeals, 294 SCRA 183, 191. See also Gestopa v. CA, supra, p. 112 (2000). 50 Concepcion v. Concepcion, 91 Phil. 823. 51 Puig v. Peaorida, 15 SCRA 276, 283, citing Laureta v. Mata, 44 Phil. 668; Concepcion v. Concepcion, supra; Cuevas v. Cuevas, 68 Phil. 68 52 Id., citing Concepcion v. Concepcion, supra; Bonsato v. Court of Appeals, supra. 53 Reyes v. Mosqueda, 187 SCRA 661, 669 (1990). 54 44 Phil. 668 (1928). 55 Cited in Reyes v. Mosqueda, supra, p. 669. 56 Supra.
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considered in ascertaining the intention of the donor. Here, the donation is entitled and called donacion onerosa mortis causa. From the body, however, we nd that the donation was of a nature remunerative rather than onerous. It was for past services rendered, services which may not be considered as a debt to be paid by the donee but services rendered to her freely and in goodwill. The donation instead of being onerous or for a valuable consideration, as in payment of a legal obligation, was more of remuneratory or compensatory nature, besides being partly motivated by affection. We should not give too much importance or signicance to or be guided by the use of the phrase mortis causa in a donation and thereby to conclude that the donation is not one of inter vivos. In the case of De Guzman, et al. v. Ibea, et al. (67 Phil. 633), this Court through Mr. Chief Justice Avancena said that if a donation by its terms is inter vivos, this character is not altered by the fact that the donor styles it mortis causa. In case of doubt the conveyance should be deemed a donation inter vivos rather than mortis causa, in order to avoid uncertainty as to the ownership of the property subject of the deed.57 In Laureta v. Mata,58 the deed of donation provided that the donor was donating mortis causa certain properties as a reward for the donees services to the donor and as a token of the donors affection for him. The donation was made under the condition that the donee cannot take possession of the properties donated before the death of the donor; that the donee should cause to be held annually masses for the repose of the donors soul, and that he should defray the expenses for the donors funeral. It was held that said donation was inter vivos despite the statement in the deed that it was mortis causa. The donation was construed as a conveyance in praesenti (a present grant of a future interest) because it conveyed to the donee the title to the properties donated subject only to the life estate of the donor and because the conveyance took effect upon the making and delivery of the deed. The
57 58
Puig v. Peaorida, 15 SCRA 276, 283. 44 Phil. 668.
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acceptance of the donation was a circumstance which was taken into account in characterizing the donation as inter vivos.59 In Balaqui v. Dongso,60 the deed of donation involved was more confusing than that found in the Laureta case. In the Balaqui case, it was provided in the deed that the donation was made in consideration of the services rendered to the donor by the donee; that title to the donated properties would not pass to the donee during the donors lifetime, and that it would be only upon the donors death that the donee would become the true owner of the donated properties. However, there was the stipulation that the donor bound herself to answer to the donee for the property donated and that she warranted that nobody would disturb or question the donees right. Notwithstanding the provision in the deed that it was only after the donors death when the title to the donated properties would pass to the donee and when the donee would become the owner thereof, it was held in the Balaqui case that the donation was inter vivos. It was noted in that case that the donor, in making a warranty, implied that the title had already been conveyed to the donee upon the execution of the deed and that the donor merely reserved to herself the possession and usufruct of the donated properties.61 In Concepcion v. Concepcion,62 it was provided in the deed of donation, which was also styled as mortis causa, that the donation was made in consideration of the services rendered by the donee to the donor and of the donors affection for the donee; that the donor had reserved what was necessary for his maintenance, and that the donation ha de producir efectos solamente por muerte de la donante. It was ruled that the donation was inter vivos because the stipulation that the donation would take effect only after the donors death simply meant that the possession and enjoyment, of the fruits of the properties donated should take effect only after the donors death and not before.
[136.2.4] Importance of Distinctions
The distinction between a transfer inter vivos and mortis causa is important as the validity or revocation of the donation depends upon its
Cited in Alejandro v. Geraldez, supra, 258. 53 Phil. 673. 61 Cited in Alejandro v. Geraldez, supra, 258. 62 91 Phil. 823.
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nature.63 If the donation is inter vivos, it must be executed and accepted with the formalities prescribed by Articles 748 and 749 of the Civil Code, except when it is onerous in which case the rules on contracts will apply.64 If it is mortis causa, the donation must be in the form of a will, with all the formalities for the validity of wills, otherwise it is void and cannot transfer ownership.65 In the following cases, the conveyance was considered a void mortis causa transfer because it was not cast in the form of a last will and testament as required in Article 728 of the Civil Code: [a] Where it was stated in the deed of donation that the donor wanted to give the donee something to take effect after his death and that this donation shall produce effect only by and because of the death of the donor, the property herein donated to pass title after the donors death.66 In the Padilla case, the donation was regarded as mortis causa although the donated property was delivered to the donee upon the execution of the deed and although the donation was accepted in the same deed.67 [b] Where it was provided that the donated properties would be given to the donees after the expiration of thirty (30) days from the donors death, the grant was made in the future tense, and the word inherit was used.68 The Court explained that the verb to inherit clearly implies the acquisition of property only from and after the death of the alleged donors. [c] Where the alleged donation expressly reserved the right to dispose of the properties conveyed at any time before his death, and limited the donation to whatever property or properties left undisposed by (the donor) during (his) lifetime.69 The Court explained that the alleged donor clearly retained his ownership until his death and the reservation is tantamount to a reservation of the right to revoke the donation.
Ganuelas v. Cawed, 401 SCRA 447, 455 (2003). Id. 65 Id.; See also Art. 728, NCC. 66 Howard v. Padilla, 96 Phil. 983. 67 Cited in Alejandro v. Geraldez, supra, 256-257. 68 Cario v. Abaya, 70 Phil. 182, cited in Alejandro v. Geraldez, supra, 257. 69 Bautista v. Sabiniano, 92 Phil. 244, cited in Alejandro v. Geraldez, supra, 257 and Bonsato v. CA, 95 Phil. 481.
63 64
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[d] Where the circumstances surrounding the execution of the deed of donation reveal that the donation could not have taken effect before the donors death and the rights to dispose of the donated properties and to enjoy the fruits remained with the donor during her lifetime.70 [e] Where it was stated in the deeds of donation that the donations shall become effective upon the death of the donor and that in the event that the donee should die before the donor, the donation shall be deemed automatically rescinded and of no further force and effect.71 The phrase to become effective upon the death of the donor admits of no other interpretation but that the donor did not intend to transfer the ownership of the properties to the donee during her lifetime.72 In addition, the deeds expressly provide that the donation shall be rescinded in case the donee predecease the donor, which is one of the decisive characteristics of a donation mortis causa.73 An essential characteristic of dispositions mortis causa is that the conveyance or alienation should be (expressly or by necessary implication) revocable ad nutum, i.e., at the discretion of the grantor or so-called donor, simply because the latter has changed his mind.74 Donation inter vivos, on the other hand, once accepted, becomes irrevocable.75 As observed by Manresa,76 upon acceptance by the donee, the donor can no longer withdraw, and he can be compelled to comply with his offering or to deliver the things he wanted to donate.77 Consequently, it may not be revoked unilaterally or by the sole and arbitrary will of the donor. The donation, however, may be made revocable upon the fulllment of resolutory conditions, or may be revoked only for the reasons provided in Articles 760, 764 and 765 of
David v. Sison, 76 Phil. 418, cited in Alejandro v. Geraldez, supra, 257. Maglasang v. Heirs of Cabatingan, 383 SCRA 6 (2002). See also Ganuelas v. Cawed, 401 SCRA 447 (2003). 72 Id. 73 Id. 74 Puig v. Peaorida, supra, 283, citing Bautista v. Sabiniano, 92 Phil. 244 and Bonsato v. Court of Appeals, 95 Phil. 481 75 Gestopa v. CA, 342 SCRA 105, 113 (2000). 76 5 Manresa 88. 77 Cited in the concurring opinion of J. Antonio in Alejandro v. Geraldez, supra, pp. 266267.
70 71
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the Civil Code.78 As explained in Bautista, et al. v. Sabiniano,79 except in the instances expressly provided by law, such as the subsequent birth of children of the donor, failure by the donee to comply with the conditions imposed, ingratitude of the donee and reduction of the donation in the event of inofciousness thereof, a donation is irrevocable. If the donor reserves the right to revoke it or if he reserves the right to dispose of all the properties purportedly donated, there is no donation.80 If the disposition or conveyance or transfer takes effect upon the donors death and becomes irrevocable only upon his death, it is not inter vivos but a mortis causa donation.81 In the following cases, on the other hand, the conveyance was considered a valid donation inter vivos, hence, essentially irrevocable: [a] When the attending circumstances in the execution of the subject deed demonstrated the intent of the donor to transfer the ownership over the properties upon its execution since prior to the execution of the donation inter vivos, the donor spouses already executed three donations mortis causa.82 Such fact, according to the Court, shows that the donor spouses were aware of the difference between donations inter vivos and mortis causa. In addition, the donor made reservation of lifetime usufruct and sufcient properties for their maintenance which indicated that the donor intended to transfer the naked ownership over the properties.83 Lastly, the fact that the donee accepted the donation is an indication that the donation is inter vivos because donations mortis causa are not required to be accepted by the donees during their lifetime.84 [b] Where the donation expressly provides that it is irrevocable although there are provisions in the deed which state that the same will only take effect upon the death of the donor and that there is prohibition to alienate, encumber, dispose, or sell the same.85 Citing the earlier
Id. 92 Phil. 245, cited in the concurring opinion of J. Antonio in Alejandro v. Geraldez, supra, pp. 266-267. 80 Concurring opinion of J. Antonio in Alejandro v. Geraldez, supra, pp. 266-267. 81 Id. 82 Gestopa v. Court of Appeals, 342 SCRA 105 (2000). 83 Id. 84 Id. 85 Austria-Magat v. Court of Appeals, 375 SCRA 556 (2002).
78 79
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case of Bonsato v. Court of Appeals,86 the Court explained that where the donation per the deed of donation would also take effect upon the death of the donor with reservation for the donor to enjoy the fruits of the land, said statements only mean that after the donors death, the donation will take effect so as to make the donees the absolute owners of the donated property, free from all liens and encumbrances; for it must be remembered that the donor reserved for himself a share of the fruits of the land donated. On the issue of prohibition to alienate, the Court, citing the case of Gestopa v. Court of Appeals,87 held that the prohibition to alienate does not necessarily defeat the inter vivos character of the donation. It even highlights the fact that what remains with the donor is the right of usufruct and not anymore the naked title of ownership over the property donated. In the Austria-Magat case, the provision in the deed of donation that the donated property will remain in the possession of the donor just goes to show that the donor has given up his naked title of ownership thereto and has maintained only the right to use (jus utendi) and possess (jus possidendi) the subject donated property. The Court also noted the existence of an acceptance clause which is a mark that the donation is inter vivos. [c] Where the donation expressly declares that it is irrevocable and the owner makes reservation for himself, during his lifetime, of the owners share of the fruits or produce, the deed is a donation inter vivos although it provides that the donation shall become effective after the death of the donor.88 The Court explained that the express irrevocability of the donation is a quality absolutely incompatible with the idea of conveyances mortis causa where revocability is of the essence of the act. In the Bonsato case, the Court further adds that the reservation made by the donor would be unnecessary if the ownership of the donated property remained with him and that the phrase that after death of the donor the aforesaid donation shall become effective only means that after the donors death, the donation will take effect so as to make the donees absolute owners of the donated property. [d] When the deed of donation provides that the donor will not dispose or take away the property donated (thus making the donation
95 Phil. 481 (1954). Supra. 88 Bonsato v. Court of Appeals, 95 Phil. 481 (1954).
86 87
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irrevocable), he is in effect making a donation inter vivos. He parts away with his naked title but maintains benecial ownership while he lives.89 It remains to be a donation inter vivos despite an express provision that the donor continues to be in possession and enjoyment of the donated property while he is alive. However, a donation which purports to be one inter vivos but withholds from the donee the right to dispose of the donated property during the donors lifetime is in truth one mortis causa. In a donation mortis causa the right of disposition is not transferred to the donee while the donor is still alive.90 In David v. Sison,91 the Court construed a deed purporting to be a donation inter vivos to be in truth one mortis causa because it stipulated that all rents, proceeds, fruits, of the donated properties shall remain for the exclusive benet and disposal of the donor, Margarita David, during her lifetime; and that, without the knowledge and consent of the donor, the donated properties could not be disposed of in any way, whether by sale, mortgage, barter, or in any other way possible. On these essential premises, the Court said, such a donation must be deemed one mortis causa, because the combined effect of the circumstances surrounding the execution of the deed of donation and of the abovequoted clauses thereof was that the most essential elements of ownership the right to dispose of the donated properties and the right to enjoy the products, prots, possession remained with Margarita David (the alleged donor) during her lifetime, and would accrue to the donees only after Margarita Davids death. In Bonsato v. Court of Appeals,92 the Court emphasized that the decisive characteristics of a donation mortis causa, which it had taken into account in David v. Sison, were that the donor not only reserved for herself all the fruits of the property allegedly conveyed, but what is even more important, specially provided that without the knowledge and consent of the donor, the donated properties could not be disposed of in any way; thereby denying to the transferees the most essential attribute of ownership, the power to dispose of the properties.
Cuevas v. Cuevas, 98 Phil. 68 (1955). Sicad v. Court of Appeals, 294 SCRA 183 (1998). 91 76 Phil. 418 (1946), cited in Sicad v. CA, supra. 92 Supra. See also Sicad v. CA, supra.
89 90
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Note, however, that a prohibition to alienate may not necessarily defeat the inter vivos character of the donation.93 As explained earlier, in ascertaining the intention of the donor, all of the deeds provisions must be read together.94 Thus, in Austria-Magat v. Court of Appeals,95 while there is a prohibition to alienate the donated property, the deed, on the other hand, expressly declares that the donation is irrevocable. According to the Court in the Austria-Magat case, the prohibition to alienate does not go against the irrevocable character of the donation. Such provision, adds the Court, is only necessary assurance that during the donors lifetime, the latter would still enjoy the right of possession over the property; but, his naked title of ownership has been passed on to the donees. In Gestopa v. Court of Appeals,96 the Court explained that the provision in the deed prohibiting the alienation of the donated property even highlights the fact that what remains with the donor is the right of usufruct and not anymore the naked title of ownership over the property donated. But what about a provision empowering or authorizing the donor to alienate the property conveyed? What is its effect upon the conveyance? According to the Court,97 if the are no signs contradicting or limiting the unqualied and unrestricted right of the donor to alienate the conveyed property in favor of other persons of her choice at anytime that she should wish to do so, the same is a true conveyance mortis causa since it indirectly recognizes the donors power to nullify the conveyance to the alleged donee whatever the donor wished to do so, for any reason or for no particular reason at all. This faculty, according to the Court, is characteristic of conveyances post mortem or mortis causa: for the right of the transferor to alienate the donated property to someone else necessarily imports that the conveyance to the donee will not become nal and denite in favor of the latter until the death of the donor should exclude every possibility that the property may be alienated to some other person.98 However, where the power to indirectly revoke is hedged in by the specication that the donor could dispose of the property only to
Gestopa v. Court of Appeals, 342 SCRA 105. See discussion in supra ________. 95 Supra. 96 Supra. 97 Puig v. Peaorida, supra, 286. 98 Id., 286.
93 94
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satisfy her needs, the donation must be held to partake of the nature of a conveyance inter vivos. In Puig case, while there is a clause that the donor reserved her right to mortgage or even sell the donated property, when and if she should need funds to meet her own needs, the Court held that such donation is inter vivos. According to the Court, the last sentence of the stipulation appears incompatible with the grantors freedom to revoke a true conveyance mortis causa, a faculty that is essentially absolute and discretionary, whether its purpose should be to supply her needs or to make a prot, or have no other reason than a change of volition on the part of the grantor-testator. If the donor, says the Court, wished or intended to retain the right to change the destination of her property at her sole will and discretion, there was no reason for her to specify the causes for which she could sell or encumber the property covered by her bounty.
[136.2.5] Distinguishing Characteristics of Donation Mortis Causa
The distinguishing characteristics of a donation mortis causa are the following: (1) It conveys no title or ownership to the transferee before the death of the transferor or what amounts to the same thing, that the transferor should retain the ownership (full or naked) and control of the property while alive; That before his death, the transfer should also be revocable by the transferor at will, ad nutum; but revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed; That the transfer should be void if the transferor should survive the transferee.99
(2)
(3)
[136.3] Donation Inter Vivos
If the donation takes effect during the donors lifetime or independently of the donors death, meaning that the full or naked ownership (nuda proprietas) of the donated properties passes to the
99 Ganuelas v. Cawed, 401 SCRA 447, 455-456 (2003), citing Austria-Magat v. CA, 375 SCRA 556. See also Bonsato v. CA, supra, and Alejandro v. Geraldez, supra, pp. 254-255.
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donee during the donors lifetime, not by reason of his death but because of the deed of donation, then the donation is inter vivos.100 As explained earlier, donation inter vivos, in turn, may be classied into: (1) pure or simple;101 (2) remuneratory,102 (3) modal,103 and (4) onerous.104
[136.3.1] Pure or Simple and Remuneratory Donations
A pure or simple donation is one where the underlying cause is plain gratuity105 or pure liberality (no strings attached).106 This is donation in its truest form.107 On the other hand, a remuneratory donation is one made for the purpose of rewarding the donee for past services, which services do not amount to a demandable debt.108 In remuneratory donation, it is necessary that the services to be repaid be not demandable obligations, otherwise, the so-called donation is in reality payment.109 It is likewise necessary that the services must have already been performed for if the services are still to be performed in the future, the donation is onerous.110 In the case of simple and remuneratory donations, the rules on donations in this Title (Arts. 725-773) shall primarily govern111 and the provisions of the Civil Code on obligations and contracts shall apply in a suppletory manner.112
Carlos v. Ramil 20 Phil. 183 FACTS: The couple Agustin Carlos and his wife, Juliana Carlos, brought into their company a young girl from their neighborhood. The couple supported the girl and the latter served them in return. When the girl grew up and about
100
Castro v. Court of Appeals, 27 SCRA 1076, cited in Alejandro v. Geraldez, supra,
p. 253. Art. 725, NCC. Art. 726, NCC. 103 Arts. 726 and 733, NCC. 104 Art. 733. 105 Republic v. Silim, supra, 8. 106 Lagazo v. Court of Appeals, 287 SCRA 18, 24. Also in De Luna v. Abrigo, 181 SCRA 150, 155. 107 Republic v. Silim, supra, p. 8. 108 Id., citing Art. 726, NCC. 109 5 Manresa 72. 110 Carlos v. Ramil, 20 Phil. 183. 111 See Arts. 725, 726 and 732, NCC. 112 Art. 732, NCC.
101 102
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to be married, the spouses Carlos feared that there would be no one who would take care of them in their twilight years. After the marriage, the couple entered into an arrangement with the girl and her husband, that if the latter would remain living in their house and take care of them, the real estate which they owned would be given to the girl and her husband. There arose a question of whether or not the agreement constituted a remunerative donation. RULING: The agreement is not a remunerative donation but a contract by which Carlos and his wife transferred to the defendant and his wife the lands described in the complaint upon the consideration that the latter should give to the former the care therein mentioned and prescribed. That contract was fully executed upon the part of the defendant and his wife. If the transaction between Carlos and the defendant was a donation it was una donacion con causa onerosa and not una donacion remuneratoria. One of the leading differences between these two classes of donations or gifts is that in the one con causa onerosa the services which form the consideration for the gift have not yet been performed while in the other they have. At the time of the transaction hereafter referred to, none of the services which formed the consideration for the agreement in question had as yet been performed. They were all to be performed in the future. Under the provisions of the Civil Code una donacion con causa onerosa is governed by the provisions of said code relative to contracts. That being so, the arguments of the appellant relative to the validity of the instrument in question are entirely inapplicable and beside the point for the reason that they relate solely to a remunerative gift. [136.3.2] Modal and Onerous Donations
A conditional or modal donation is one where the donation is made in consideration of future services or where the donor imposes certain conditions, limitations or charges upon the donee, the value of which is inferior than that of the donation given.113 An onerous donation, on the other hand, is that which imposes upon the donee a reciprocal obligation or, to be more precise, this is the kind of donation made for a valuable consideration, the cost of which is equal to or more than the thing donated.114 When the donation is onerous, it is completely governed not by the law on donations but by the law on contracts.115 A modal donation, on the other hand, shall be governed by the law on contracts up to extent
Republic v. Silim, supra, p. 8. Id. 115 Art. 733, NCC.
113 114
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of the burden and by the law on donations under the present Title as regards that portion which exceeds the value of the burden imposed.116 Note that while Article 733 uses the term remuneratory donations, the law is actually referring to modal donations. The use of the term remuneratory in said article is improper.
Lagazo v. Court of Appeals 287 SCRA 18 (1998) Tito Lagazo led an action against Alfredo Cabanlit for the recovery of a parcel of land in Sta. Mesa, Manila which used to be owned by plaintiffs grandmother, Catalina Jacob Vda. De Reyes. Plaintiffs claim was anchored on an alleged donation made by his grandmother in his favor. Defendant, on the other hand, claimed that he bought the property from Eduardo Espaol, to whom Catalina allegedly sold the lot. After trial, the trial court ruled in favor of plaintiff. On appeal, the Court of Appeals reversed the decision of the trial court mainly because of the absence of any evidence that plaintiff accepted the donation in the manner required by Article 749 of the Civil Code. Plaintiff contended, however, that the formalities for a donation of real property should not apply to his case since it was an onerous donation for he allegedly paid for the amortizations due on the land before and after the execution of the deed of donation. In upholding the decision of the Court of Appeals that the subject donation was simple, the Supreme Court ruled We rule that the donation was simple, not onerous. Even conceding that petitioners full payment of the purchase price of the lot might have been a burden to him, such payment was not however imposed by the donor as a condition for the donation. Rather, the deed explicitly stated: That for and in consideration of the love and affection which the DONEE inspires in the DONOR, and as an act of liberality and generosity and considering further that the DONEE is a grandson of the DONOR, the DONOR hereby voluntarily and freely gives, transfer[s] and conveys, by way of donation unto said DONEE, his heirs, executors, administrators and assigns, all the right, title and interest which the said DONOR has in the above described real property, together with all the buildings and improvements found
116
Id.
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therein, free from all lines [sic] and encumbrances and charges whatsoever; [emphasis supplied] It is clear that the donor did not have any intention to burden or charge petitioner as the donee. The words in the deed are in fact typical of a pure donation. We agree with Respondent Court that the payments made by petitioner were merely his voluntary acts. This much can be gathered from his testimony in court, in which he never even claimed that a burden or charge had been imposed by his grandmother. [136.3.3] Importance of Distinctions
The classication of donations into simple, remuneratory or onerous is important for the purpose of determining: (1) the rules that shall govern a particular donation; (2) the formalities to be followed; and (3) the effect of imposition of illegal or impossible conditions. As stated earlier, simple and remuneratory donations are governed, primarily, by Title III of Book III (the law on donations) and, suppletorily, by the law on obligations and contracts. Such being the case, the formalities required for a valid donation under Articles 748 and 749 of the New Civil Code apply to these kinds of donations. In addition, Article 727 of the New Civil Code expressly provides that illegal or impossible conditions in simple and remuneratory donations shall be considered as not imposed. In other words, if illegal or impossible conditions are imposed in simple or remuneratory donations, then the donation is valid because the illegal or impossible conditions are simply considered as not imposed and will, thus, be disregarded. Donations with an onerous cause, on the other hand, are governed not by the law on donations but by the rules on contracts.117 Hence, the formalities required for a valid donation under Articles 748 and 749 of the Code do not apply.118 And since an onerous donation is governed by the law on obligations and contracts, if an impossible or illegal condition is imposed in such kind of donation, the obligation thus created shall be annulled pursuant to the provisions of Article 1183 of the Civil Code, which states:
117 118
Art. 733, NCC. See Danguilan v. Intermediate Appellate Court, 168 SCRA 22 (1988).
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Art. 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be valid. The condition not to do an impossible thing shall be considered as not having been agreed upon. (1116a)
Danguilan v. IAC 168 SCRA 22 (1988) Domingo Melad owned a farm lot and a residential lot. He and his wife, having no children of their own, had taken into their home as their ward the spouses Felix Danguilan and Isidra Melad. The latter was Domingos niece. The spouses Felix Danguilan and Isidra Melad lived with Domingo Melad and his wife and helped Domingo with the cultivation of the farm. Thereafter, Domingo executed a private instrument giving to the spouses Felix Danguilan and Isidra Melad his two lots on the understanding that the latter would take care of the grantor and would bury him upon his death, which obligation the spouses fullled. On the question of whether the donations of the two lots were valid considering that the same were not embodied in a public instrument, the Court ruled It is our view, considering the language of the two instruments, that Domingo Melad did intend to donate the properties to the petitioner, as the private respondent contends. We do not think, however, that the donee was moved by pure liberality. While truly donations, the conveyances were onerous donations as the properties were given to the petitioner in exchange for his obligation to take care of the donee for the rest of his life and provide for his burial. Hence, it was not covered by the rule in Article 749 of the Civil Code requiring donations of real properties to be effected through a public instrument. The case at bar comes squarely under the doctrine laid down in Manalo v. De Mesa (29 Phil. 495), where the Court held: There can be no doubt that the donation in question was made for a valuable consideration, since the donors made it conditional upon the donees bearing the expenses that might be occasioned by the death and burial of the donor Placida Manalo, a condition and obligation which the donee Gregorio de Mesa carried out in his own behalf and for his wife Leoncia Manalo; therefore, in order to determine whether or not said
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donation is valid and effective it should be sufcient to demonstrate that, as a contract, it embraces the conditions the law requires and is valid and effective, although not recorded in a public instrument. Roman Catholic Archbishop of Manila v. Court of Appeals 198 SCRA 300 (1991) In 1930, the spouses Eusebio de Castro and Martina Rieta, executed a deed of donation in favor of the Roman Catholic Archbishop of Manila covering a parcel of land located at Kawit, Cavite. The deed of donation provides that the donee shall not dispose or sell the property within a period of 100 years from the execution of the deed of donation, otherwise a violation of such condition would render ipso facto null and void the deed of donation and the property would revert to the estate of the donors. In 1980, and while still within the prohibited period, the Roman Catholic Bishop of Imus, sold the property to spouses Florencio and Soledad Ignao. When the heirs of Eusebio Castro and Martina Rieta learned about the sale, they led an action for the nullication of the deed of donation, rescission of the sale in favor of the spouses Ignao and reconveyance of the property. When the case was elevated to the Supreme Court, the Court declared the prohibition imposed on the donation as contrary to public policy. Applying the provisions of Article 727 of the Code, the Court further held that such condition shall be considered as not imposed. The Court explained The cause of action of private respondents is based on the alleged breach by petitioners of the resolutory condition in the deed of donation that the property donated should not be sold within a period of one hundred (100) years from the date of execution of the deed of donation. Said condition, in our opinion, constitutes an undue restriction on the rights arising from ownership of petitioners and is, therefore, contrary to public policy. Donation, as a mode of acquiring ownership, results in an effective transfer of title over the property from the donor to the donee. Once a donation is accepted, the donee becomes the absolute owner of the property donated. Although the donor may impose certain conditions in the deed of donation, the same must not be contrary to law, morals, good customs, public order and public policy. The condition imposed in the deed of donation in the case before us constitutes a patently unreasonable and undue restriction on the right of the donee to dispose of the property donated, which right is an indispensable attribute of ownership. Such a prohibition against alienation, in order to be valid, must not be perpetual or for an unreasonable period of time.
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Certain provisions of the Civil Code illustrative of the aforesaid policy may be considered applicable by analogy. Under the third paragraph of Article 494, a donor or testator may prohibit partition for a period which shall not exceed twenty (20) years. Article 870, on its part, declares that the dispositions of the testator declaring all or part of the estate inalienable for more than twenty (20) years are void. It is signicant that the provisions therein regarding a testator also necessarily involve, in the main, the devolution of property by gratuitous title hence, as is generally the case of donations, being an act of liberality, the imposition of an unreasonable period of prohibition to alienate the property should be deemed anathema to the basic and actual intent of either the donor or testator. For that reason, the regulatory arm of the law is or must be interposed to prevent an unreasonable departure from the normative policy expressed in the aforesaid Articles 494 and 870 of the Code. In the case at bar, we hold that the prohibition in the deed of donation against the alienation of the property for an entire century, being an unreasonable emasculation and denial of an integral attribute of ownership, should be declared as an illegal or impossible condition within the contemplation of Article 727 of the Civil Code. Consequently, as specically stated in said statutory provision, such condition shall be considered as not imposed. No reliance may accordingly be placed on said prohibitory paragraph in the deed of donation. The net result is that, absent said proscription, the deed of sale supposedly constitutive of the cause of action for the nullication of the deed of donation is not in truth violative of the latter hence, for lack of cause of action, the case for private respondents must fail.
Art. 734. The donation is perfected from the moment the donor knows of the acceptance by the donee. (623)
137. Perfection of Donation

[137.1] When Perfected
Like any other contract, donation also follows the theory of cognition.119 Thus, Article 734 of the New Civil Code provides that the donation is perfected from the moment the donor knows of the accep119
Lagazo v. CA, 287 SCRA 18, 27.
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tance by the donee. Before notice of the acceptance, therefore, the offerer (donor) is not bound and may withdraw the offer of donation. Such revocation will have the effect of preventing the perfection of the donation, although it may not be known to the offeree (donee). The power to revoke is implied in the criterion that no donation exists until the acceptance is known. As the tie or bond springs from the meeting or concurrence of the minds, since up to that moment, there exists only a unilateral act, it is evident that he who takes it must have the power to revoke it by withdrawing his proposition.120 In the same manner, the acceptance made by the offeree (donee) may be revoked before it comes to the knowledge of the offeror (donor).121 Since donation is also a contract, the pronouncement by the Court in Jardine Davies, Inc. v. Court of Appeals,122 may also be applied: For a contract to arise, the acceptance must be made known to the offeror. Accordingly, the acceptance can be withdrawn or revoked before it is made known to the offeror.
[137.2] Acceptance is Indispensable
It is explicit in Article 725 of the New Civil Code that acceptance is necessary in a donation.123 Without acceptance, the donation is not perfected.124 The rationale behind the requirement of acceptance is that nobody is obliged to receive a benet against his will.125
[137.3] Effects of Acceptance
A donation, as a mode of acquiring ownership, results in an effective transfer of title over the property from the donor to the donee and once a donation is accepted, the donee becomes the absolute owner of the property donated,126 notwithstanding the condition imposed by the donee.127 Once the donation is accepted, it is generally considered
Applying by analogy Laudico v. Arias, 43 Phil. 270. Applying by analogy IV Tolentino, Civil Code, 1991 ed., 458. 122 333 SCRA 684, 693. 123 Vita v. Montanano, 194 SCRA 180, 190 (1991); Lagazo v. CA, 287 SCRA 18, 27. 124 See Art. 734, NCC. 125 Vito v. Montanano, supra, 190, citing II Tolentino, Civil Code, 1972 ed., 521. 126 Tanpingco . IAC, 207 SCRA 652, 657, citing Roman Catholic Archbishop of Manila v. CA, 198 SCRA 300. See also Heirs of Cesario Velasquez v. CA, 324 SCRA 552; Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla de Leon, 425 SCRA 447 (2003). 127 Quijada v. Court of Appeals, 299 SCRA 695 (1998).
120 121
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irrevocable.128 As observed by Manresa,129 upon acceptance by the donee, the donor can no longer withdraw, and he can be compelled to comply with his offering or to deliver the things he wanted to donate.130 Consequently, it may not be revoked unilaterally or by the sole and arbitrary will of the donor. The donation, however, may be made revocable upon the fulllment of resolutory conditions, or may be revoked only for the reasons provided in Articles 760, 764 and 765 of the Civil Code.131 As explained in Bautista, et al. v. Sabiniano,132 except in the instances expressly provided by law, such as the subsequent birth of children of the donor, failure by the donee to comply with the conditions imposed, ingratitude of the donee and reduction of the donation in the event of inofciousness thereof, a donation is irrevocable.
Quijada v. Court of Appeals 299 SCRA 695 In 1956, Trinidad Vda. de Quijada, together with her sisters and a brother executed a deed of conditional donation over a two-hectare parcel of land in favor of the Municipality of Talacogon, the condition being that the parcel of land shall be used solely and exclusively as part of the campus of the proposed provincial high school in Talacogon. Apparently, Trinidad remained in possession of the parcel of land despite the donation. In 1962, Trinidad sold one hectare of the subject land to Regalado Mondejar. Subsequently, Trinidad verbally sold the remaining one hectare to Regalado Mondejar without the benet of a written deed of sale and evidenced solely by receipts of payment. In 1987, the proposed provincial high school having failed to materialize, the Sangguniang Bayan of the Municipality of Talacogon enacted a resolution reverting the two parcels of land back to the donors. In the meantime, Regalado Mondejar sold portions of the land to several buyers. In 1988, the children of the late Trinidad Vda. de Quijada led an action for the recovery of the two parcels of land against Regalado Mondejar and the other transferees of the subject property. In ruling for the defendants, the Court explained The donation made on April 5, 1956 by Trinidad Quijada and her brother and sisters was subject to the condition that the donated property shall be used solely and exclusively as a part of
128
Vda. de Arceo v. Court of Appeals, 185 SCRA 489, cited in Quilala v. CA, 371 SCRA
311. 5 Manresa 88. Concurring opinion of J. Antonio, 78 SCRA 245, 266-267. 131 Id. 132 92 Phil. 245, 249.
129 130
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the campus of the proposed Provincial High School in Talacogon. The donation further provides that should the proposed Provincial High School be discontinued or if the same shall be opened but for some reason or another, the same may in the future be closed the donated property shall automatically revert to the donor. Such condition, not being contrary to law, morals, good customs, public order or public policy was validly imposed in the donation. When the Municipalitys acceptance of the donation was made known to the donor, the former became the new owner of the donated property donation being a mode of acquiring and transmitting ownership notwithstanding the condition imposed by the donee. The donation is perfected once the acceptance by the donee is made known to the donor. Accordingly, ownership is immediately transferred to the latter and that ownership will only revert to the donor if the resolutory condition is not fullled. In this case, that resolutory condition is the construction of the school. It has been ruled that when a person donates land to another on the condition that the latter would build upon the land a school, the condition imposed is not a condition precedent or a suspensive condition but a resolutory one. Thus, at the time of the sales made in 1962 towards 1968, the alleged seller (Trinidad) could not have sold the lots since she had earlier transferred ownership thereof by virtue of the deed of donation. So long as the resolutory condition subsists and is capable of fulllment, the donation remains effective and the donee continues to be the owner subject only to the rights of the donor or his successors-ininterest under the deed of donation. Since no period was imposed by the donor on when must the donee comply with the condition, the latter remains the owner so long as he has tried to comply with the condition within a reasonable period. Such period, however, became irrelevant herein when the donee-Municipality manifested through a resolution that it cannot comply with the condition of building a school and the same was made known to the donor. Only then when the non-fulllment of the resolutory condition was brought to the donors knowledge that ownership of the donated property reverted to the donor as provided in the automatic reversion clause of the deed of donation. The donor may have an inchoate interest in the donated property during the time that ownership of the land has not reverted to her. Such inchoate interest may be the subject of contracts including a contract of sale. In this case, however, what the donor sold was the land itself which she no longer owns. It would have
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been different if the donor-seller sold her interests over the property under the deed of donation which is subject to the possibility of reversion of ownership arising from the non-fulllment of the resolutory condition. xxx xxx xxx Be that at it may, there is one thing which militates against the claim of petitioners. Sale, being a consensual contract, is perfected by mere consent, which is manifested the moment there is a meeting of the minds as to the offer and acceptance thereof on three (3) elements: subject matter, price and terms of payment of the price. Ownership by the seller on the thing sold at the time of the perfection of the contract of sale is not an element for its perfection. What the law requires is that the seller has the right to transfer ownership at the time the thing sold is delivered. Perfection per se does not transfer ownership which occurs upon the actual or constructive delivery of the thing sold. A perfected contract of sale cannot be challenged on the ground of non-ownership on the part of the seller at the time of its perfection; hence, the sale is still valid. The consummation, however, of the perfected contract is another matter. It occurs upon the constructive or actual delivery of the subject matter to the buyer when the seller or her successorsin-interest subsequently acquires ownership thereof. Such circumstance happened in this case when petitioners who are Trinidad Quijadas heirs and successors-in-interest became the owners of the subject property upon the reversion of the ownership of the land to them. Consequently, ownership is transferred to respondent Mondejar and those who claim their right from him. Article 1434 of the New Civil Code supports the ruling that the sellers title passes by operation of law to the buyer. This rule applies not only when the subject matter of the contract of sale is goods, but also to other kinds of property, including real property. There is also no merit in petitioners contention that since the lots were owned by the municipality at the time of the sale, they were outside the commerce of men under Article 1409(4) of the NCC; thus, the contract involving the same is inexistent and void from the beginning. However, nowhere in Article 1409(4) is it provided that the properties of a municipality, whether it be those for public use or its patrimonial property are outside the commerce of men. Besides, the lots in this case were conditionally owned by the municipality. To rule that the donated properties are outside the commerce of men would render nugatory the unchallenged
DIFFERENT MODES OF ACQUIRING OWNERSHIP DONATION Persons Who May Give or Receive a Donation
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reasonableness and justness of the condition which the donor has the right to impose as owner thereof. Moreover, the objects referred to as outside the commerce of man are those which cannot be appropriated, such as the open seas and the heavenly bodies. xxx xxx xxx
[137.4] Manner and Form of Acceptance
The manner and form of acceptance, together with the formalities required of the donation, are discussed in infra 139.2 and 140.
[137.5] Time For Making Acceptance
Article 746 of the New Civil Code requires that the acceptance must be made during the lifetime of the donor and of the donee. This article, however, must be read in conjunction with the provisions of Articles 734 and 1323 of the New Civil Code. As discussed in supra 137.1, the Civil Code follows the theory of cognition even insofar as donations are concerned pursuant to Article 734 which provides that the donation is perfected from the moment the donor knows of the acceptance by the donee. Upon the death of either the donor or the donee prior to the perfection of the donation, the offer of donation, however, becomes ineffective. This is clear from the provision of Article 1323 of the New Civil Code which states that an offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed. Note that the provisions of Article 1323 likewise applies to donations in view of Article 732 which makes applicable the provisions on obligations and contracts to donations in a suppletory manner. Such being the case, an acceptance made by the donee during the lifetime of both the donor and the donee will not result in a perfected donation if prior to the donor gaining knowledge of such acceptance, either him (the donor) or the donee dies. Chapter 2 PERSONS WHO MAY GIVE OR RECEIVE A DONATION
Art. 735. All persons who may contract and dispose of their property may make a donation. (624)
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Art. 736. Guardians and trustees cannot donate the property entrusted to them. (n) Art. 737. The donors capacity shall be determined as of the time of the making of the donation. (n) Art. 738. All those who are not specially disqualied by law therefor may accept donations. (625) Art. 739. The following donations shall be void: (1) Those made between persons who were guilty of adultery or concubinage at the time of the donation; (2) Those made between persons found guilty of the same criminal offense, in consideration thereof; (3) Those made to a public ofcer or his wife, descendants and ascendants, by reason of his ofce. In the case referred to in No. 1, the action for declaration of nullity may be brought by the spouse of the donor or donee; and the guilt of the donor and donee may be proved by preponderance of evidence in the same action. (n) Art. 740. Incapacity to succeed by will shall be applicable to donations inter vivos. (n) Art. 741. Minors and others who cannot enter into a contract may become donees but acceptance shall be done through their parents or legal representatives. (626a) Art. 742. Donations made to conceived and unborn children may be accepted by those persons who would legally represent them if they were already born. (627) Art. 743. Donations made to incapacitated persons shall be void, though simulated under the guise of another contract or through a person who is interposed. (628) Art. 744. Donations of the same thing to two or more different donees shall be governed by the provisions concerning the sale of the same thing to two or more different persons. (n) Art. 745. The donee must accept the donation personally, or through an authorized person with a special power for the purpose, or with a general and sufcient power; otherwise, the donation shall be void. (630) Art. 746. Acceptance must be made during the lifetime of the donor and of the donee. (n)
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138. Capacity to Make Donations

[138.1] Who May Donate
To be a donor, the law requires that a person must be in possession of the capacity to contract and the capacity to dispose of his property133 and is not specically prohibited to make a donation.134 The provisions of Article 735 on capacity to donate must be interpreted, however, in conjunction with the provisions of Article 751 of the Civil Code which provides, as follows: Art. 751. Donations cannot comprehend future property. By future property is understood anything which the donor cannot dispose of at the time of the donation. (635) Future property includes all property that belongs to others at the time the donation is made, although it may or may not later belong to the donor. It cannot be donated, because it is not at present his property, and he cannot dispose of it at the moment of making the donation.135 In other words, the law requires that the donor be the owner of the property donated at the time of the donation, otherwise, such donation is void, even if accepted, following the rule that no one can give what he does not have nemo dat quod non habet. Donation, as a contract, must be distinguished from the contract of sale. Article 1459 of the Civil Code, on the contract of sale, provides that the thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. In other words, ownership by the seller of the thing sold at the time of the perfection of the contract of sale is not an element for its perfection.136 What the law requires is that the seller has the right to transfer ownership at the time the thing sold is delivered.137 Perfection per se does not transfer ownership which occurs upon the actual or constructive delivery of the thing sold.138 A perfected contract of sale cannot be challenged on the ground of non-ownership on the part of the seller at the time of its perfection; hence, the sale is
Art. 735, NCC. See Art. 739, NCC and Art. 87, FC. 135 See II Tolentino, Civil Code, 1992 ed., 561. 136 Quijada v. Court of Appeals, 299 SCRA 695, 704. 137 Id. 138 Id.
133 134
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still valid.139 In donation, however, the law requires that the donor must be the owner of the thing donated at the time of the donation since the latter cannot comprehend anything which the donor cannot dispose of at the time of the donation.140 This must be the rule because donation, under the Civil Code, is a mode of acquiring ownership.141 As a mode of acquiring ownership, it results in an effective transfer of title over the property from the donor to the donee and once a donation is accepted, the donee becomes the absolute owner of the property donated.142
[138.2] Determination of Donors Capacity
In the original draft of the New Civil Code, the capacity of the donor was to be determined at the time of acceptance of the donation; but the Congress amended the original draft by providing in the present Article 737 of the Civil Code that such determination is to be made at the time of the making of the donation. But what exactly is the meaning of the phrase as of the time of the making of the donation? Literally, the donation is made when the donor executes the instrument of donation or tells the donee that he is giving the property by way of donation.143 Thus, there is a view to the effect that the donors capacity is to be determined only at this point regardless of his capacity at the time the acceptance is made known to him.144 Under this view, if the donor is capacitated at the time he makes the donation his subsequent incapacity does not affect the validity of the donation and, it will be perfected even though he is incapacitated at the time of acceptance.145 This view, however, runs in conict with Article 734, which provides that the donation is perfected from the moment the donor knows of the acceptance by the donee. For this reason, the late Senator Tolentino suggested that the term making of the donation must be held to mean perfection of the donation. He explained When the Code Commission originally drafted the present article, it provided that that the donors capacity was
Id. See Art. 751, NCC. 141 See Art. 712, NCC. 142 Roman Catholic Archbishop of Manila v. CA, 198 SCRA 300, 309. 143 II Tolentino, Civil Code, 1992 ed., 545. 144 II Caguioa, Civil Code, 1966 ed., 387. 145 Id., 388.
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to be determined at the time of acceptance of the donation; but the Congress amended the draft by providing that such determination is to be made at the time of making the donation. The Commission draft was not accurate, juridically speaking, because it is not the acceptance that perfects the donation; it is the donors knowledge of such acceptance which makes the donation effective. The Congress may be considered as having made the amendment in order to correct the juridical error in the Commission draft. The phrase making of the donation, used by the Congress in the present article, should therefore be intended to express the view of Manresa that capacity must exist at the time of the concurrence of the wills of the donor and the donee. Considered in this light, making of the donation must be held to mean perfection of the donation, for it is really upon perfection that the donation is legally made. The phrase making of the donation should thus be construed, not literally, but in a legal or juridical sense. In other words, the capacity of the donor must be determined as of the perfection of the donation. Indeed, the literal interpretation of the term making of the donation embodied under the rst view expressed above cannot be sustained. Under Article 1332 of the New Civil Code, an offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed. As explained earlier, this article likewise applies to donations in view of Article 732 which makes applicable the provisions on obligations and contracts to donations in a suppletory manner. Applying the provisions of Article 1332, if the donor is capacitated at the time he makes the donation his subsequent incapacity by reason of civil interdiction, insanity or insolvency before acceptance is conveyed will render the offer ineffective, thus preventing the perfection of the donation. Following the provisions of Article 734 of the New Civil Code, the donation is not yet perfected at any time before acceptance is conveyed. Hence, if the offer becomes ineffective before acceptance is conveyed, such supervening event will prevent the meeting of the offer and the acceptance thus preventing the perfection of the donation.
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[138.3] Legal Impossibility of Double Donations
Article 744 of the Civil Code provides, as follows: Art. 744. Donations of the same thing to two or more different donees shall be governed by the provisions concerning the sale of the same thing to two or more different persons. (n) The above-quoted provision seem to suggest that there can be a case of double donations to different donees with opposing interest. This is not, however, legally possible in this jurisdiction. The Separate (Concurring) Opinion of Justice Vitug in Hemedes v. Court of Appeals146 is illuminating a donation would not be legally feasible if the donor has neither ownership nor real right that he can transmit to the donee. Unlike an ordinary contract, a donation, under Article 712, in relation to Article 725 of the Civil Code is also a mode of acquiring and transmitting ownership and other real rights by an act of liberality whereby a person disposes gratuitously that ownership or real right in favor of another who accepts it. It would be an inefcacious process if the donor would have nothing to convey at the time it is made. Article 744 of the Civil Code states that the donation of the same thing to two or more different donees shall be governed by the provisions concerning the sale of the same thing to two or more persons, i.e., by Article 1544 of the same Code, as if so saying that there can be a case of double donations to different donees with opposing interest. Article 744 is a new provision, having no counterpart in the old Civil Code, that must have been added unguardedly. Being a mode of acquiring and transmitting ownership or other real rights, a donation once perfected would deny the valid execution of a subsequent inconsistent donation (unless perhaps if the prior donation has provided a suspensive condition which still pends when the later donation is made).
146
316 SCRA 347, 376-377 (1999).
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In sales, Article 1544, providing for the rules to resolve the conicting rights of two or more buyers, is appropriate since the law does not prohibit but, in fact, sanctions the perfection of a sale by a non-owner, such as the sale of future things or a short sale, for it is only at the consummation stage of the sale, i.e., delivery of the thing sold, that ownership would be deemed transmitted to the buyer. In the meanwhile, a subsequent sale to another of the same thing by the same seller can still be a legal possibility. This rule on double sales nds no relevance in an ordinary donation where the law requires the donor to have ownership of the thing or the real right he donates at the time of its perfection (see Article 750, New Civil Code) since a donation constitutes a mode, not just a title in an acquisition and transmission of ownership. 139. Capacity of the Donee
[139.1] Juridical Capacity, Sufcient
The law does not require that the donee must possess capacity to act, which is dened as the power to do acts with legal effect,147 it being sufcient that he must possesses juridical capacity or the tness to be the subject of legal relations. So long as the donee possesses juridical capacity and not specially disqualied by law, he may accept donations.148 Stated otherwise, all persons, whether natural or juridical, who are not specially disqualied by law may become donees. Hence, minors,149 persons who cannot enter into a contract150 and even conceived and unborn children151 may become donees. A conceived child, although as yet unborn, is given by law a provisional personality of its own for all purposes favorable to it.152 Since donation is favorable to the foetus, provided it be pure or simple in nature, the foetus has the juridical personality to become a donee. Its personality, however, is provisional or conditional in character153 such
See Art. 37, NCC. Art. 738, NCC. 149 Art. 741, NCC. 150 Id. 151 Art. 742, NCC. See also Quimiguing v. Icao, 34 SCRA 132, 134. 152 Art. 40, NCC; Quimiguing v. Icao, supra. 153 Quimiguing v. Icao, supra.
147 148
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that it is required to be born later with the conditions specied in Article 41 of the New Civil Code.154 If the foetus had an intra-uterine life of at least seven (7) months, it is sufcient that it is alive after the cutting of the umbilical cord.155 The foetus will then be considered a person even if it eventually dies. In such situation, the donation will remain valid. But if the foetus is already dead at the time of compete delivery, its personality disappears which will render the donation invalid for lack of a donee. If the foetus, on the other hand, had an intra-uterine life of less than seven months, it is not deemed born if it dies within twentyfour hours after its complete delivery.156 In such a case, the donation will become invalid for lack of a donee. But if the foetus survives for at least twenty-four hours, the foetus will then be considered a person even if it eventually dies. In such situation, the donation will remain valid.
[139.2] Manner of Acceptance
The offeror (donor) has a right to prescribe in his offer (donation) any conditions as to time, place, quantity, mode of acceptance, or other matters which it may please him to insert in and make a part thereof, and the acceptance, to conclude the agreement, must in every respect meet and correspond with the offer, neither falling short of, nor going beyond, the terms proposed, but exactly meeting them at all points and closing with them just as they stand,157 and, in the absence of such an acceptance, subsequent words or acts of the parties cannot create a contract.158 This is clearly stated in Article 1321 of the Code: Art. 1321. The person making the offer may x the time, place, and manner of acceptance, all of which must be complied. However, with respect to the forms of acceptance of donations, the provisions of Articles 748 and 749 of the New Civil Code are mandatory in character; hence, the offeror (donor) may not prescribe different formalities in accepting a donation other than those provided in said articles.
Art. 40, NCC. Art. 41, NCC. 156 Id. 157 Peerless Cas. Co. v. Housing Authority of Hazelhurst, Ga., C.A. Ga., 228 F. 2d 376. 158 N.Y. Poel v. Brunswick-Balke-Collender Co., 110 N.E. 619, 216 N.Y. 310.
154 155
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The law further requires that the the donee must accept the donation personally, or through an authorized person with a special power for the purpose, or with a general and sufcient power;159 otherwise, the donation shall be void.160 In other words, a donation may not be accepted by a person who is not authorized to do so, either by the donee or by law. Such unauthorized acceptance may not even give rise to an unenforceable contract. This is the necessary consequence of the provision of article 745 of the New Civil Code. Note that unenforceable contracts are subject to ratication,161 the effects of which retroact to the time that the contract was entered without authority and not merely from the time of its ratication.162 In a donation which is not accepted in the manner provided for in Article 745, however, the unauthorized acceptance will not result in a perfected contract of donation, be it unenforceable or otherwise. In such a situation, there remains an offer of donation which may be accepted by the donee personally or through an authorized person with a special power for the purpose, or with a general and sufcient power, unless the offer (donation) was withdrawn or revoked prior to such acceptance. But in such a situation, the effects of the perfection of the donation, i.e., transfer of ownership from the donor to the donee, will be produced only from the time that the donation is accepted in the manner provided for in Article 745. While minors, other incapacitated persons and conceived and unborn children may become donees, the law requires that the acceptance of the donation must be made through their parents or legal representatives.163 Notwithstanding the language of Article 741 of the New Civil Code, however, it is still believed that if what is donated is a personal property the value of which does not exceed ve thousand pesos (P5,000) and the donation is pure, a minor or incapacitated person referred to in said article may validly receive such donation when made orally and simultaneously delivered.164 However when the donation requires a written acceptance, whether in a private or public instrument, the provisions of Article 741 should strictly apply.165
Art. 745, NCC. Id. 161 See Arts. 1317 and 1403, NCC. 162 See IV Tolentino, Civil Code, 1991 ed., 444. 163 Arts. 741 and 742, NCC. 164 See 5 Manresa, 5th ed., 99; II Tolentino, Civil Code, 1992 ed., 550. 165 Id.
159 160
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[139.3] Persons Disqualied to Become Donees
Persons who are disqualied to become donees are those to whom donations cannot be made by express provisions of law. Hence, the following persons are disqualied to become donees: (1) (2) (3) (4) (5) Those who were guilty of adultery or concubinage at the time of the donation;166 Those who were found guilty of the same criminal offense, if the donation is made in consideration thereof;167 Public ofcers or their spouses, descendants and ascendants, if the donation is made by reason of their ofce;168 Those who are incapacitated to succeed by will;169 The spouses, if the donation is between them and made during the marriage, except moderate ones given on the occasion of any family rejoicing;170 Those who are living together as husband and wife without a valid marriage, if the donation is between them and made during their cohabitation.171
[139.3.1] Persons Guilty of Adultery or Concubinage
(6)
Donations made between persons who were guilty of adultery or concubinage at the time of the donation shall be void.172 In this connection, no previous criminal conviction is necessary since the guilt of the donor and the donee may be proved by preponderance of evidence in a civil action for declaration of nullity of the donation.173 The crimes of adultery and concubinage are punished under Articles 333 and 334, respectively, of the Revised Penal Code. Under these provisions, a single act of sexual intercourse on the part of the
Art. 739(1), NCC. Art. 739(2), NCC. 168 Art. 739(4), NCC. 169 Art. 1027(1), (2), (3), (5) and (6), NCC, in relation to Art. 740, NCC. 170 Art. 87, FC. 171 Art. 87, FC. 172 Art. 739(1), NCC. 173 Last paragraph, Art. 739, NCC.
166 167
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wife with a man other than her husband always constitutes adultery174 while a single act of sexual intercourse on the part of the husband with a woman other than his spouse will not necessarily constitute the crime concubinage.175 For the crime of concubinage to be committed, it is required that the husband must either: (1) keep a mistress in the conjugal dwelling; (2) have sexual intercourse, under scandalous circumstances, with a woman who is not his wife; or (3) cohabit with her in any other place.176 While the husband may not be guilty of concubinage for a single act of sexual intercourse, a donation in favor of the paramour may still be considered invalid if the same is made in consideration of the sexual intercourse since contracts whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy are void from the very beginning.177 Article 739 of the New Civil Code, however, does not apply to cases where the alleged concubine did not know that the man was married.178 To be guilty of concubinage, the woman must know the man to be married.179 The same principle will likewise apply to the man accused of committing the crime of adultery.180
[139.3.2] Persons Guilty of Same Criminal Offense
Paragraph 2 of Article 739 contemplates of a principal by inducement and a principal by direct participation. If a donation is made between these two persons in consideration of the commission of a crime, such donation shall be void. In paragraph 2 of Article 739, unlike in paragraph 1, a previous criminal conviction is necessary since the law uses the phrase those x x x found guilty of the same criminal offense. In addition, the last paragraph of Article 739 refers only to paragraph 1 when it authorizes the proving of the guilt of the donor and donee by mere preponderance of evidence.
Art. 333, RPC. Art. 334, RPC. 176 Id. 177 Art. 1409(1), NCC. 178 Social Security System v. Davao, et al., 17 SCRA 863 (1966). 179 Id., Note No. (1), citing Viada y Vilaseca, Vol. 5, p. 217. 180 Del Prado v. Dela Fuente, 28 Phil. 23. See also Reyes, Revised Penal Code, 13th ed., pp. 767-768.
174 175
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[139.3.3] Public Ofcers, His Spouse, Ascendants and Descendants
When the donation is made to a public ofcer or his or her spouse, descendants or ascendants, the donation is likewise void.181 While paragraph 3 of Article 739 refers only to the wife, this should be construed as referring to the spouse so as to include the husband.
[139.3.4] Spouses Inter Se During Marriage
Article 87 of the Family Code prohibits the spouses from donating to each other during the marriage. Any such donation between the spouses during the marriage, whether direct or indirect, is considered void, and the prohibition applies whatever may be the property regime governing the spouses. The rule, however, is not absolute, as moderate gifts between the spouses given on the occasion of any family rejoicing are considered valid.
[139.3.5] Persons Cohabiting as Husband and Wife
The prohibition in Article 87 of the Family Code also applies to persons living together as husband and wife without a valid marriage. In other words, donations between persons who are living together as husband and wife are also void. For such prohibition to apply, it is necessary, however, to prove that the donor and the donee are living together as husband and wife. In Bitangcor v. Tan,182 the Court held that the term cohabitation or living together as husband and wife means not only residing under one roof, but also having repeated sexual intercourse. Cohabitation, of course, means more than sexual intercourse, especially when one of the parties is already old and may no longer be interested in sex.183 At the very least, cohabitation is the public assumption by a man and a woman of the marital relation, and dwelling together as man and wife, thereby holding themselves out to the public as such. Secret meetings or nights clandestinely spent together, even if often repeated, do not constitute such kind of cohabitation; they are merely meretricious.184 In this jurisdiction, the Supreme Court has considered as sufcient proof of common-law relationship the
Art. 739(3), NCC. 112 SCRA 113 (1982), cited in Arcaba v. Vda. de Batocael, 370 SCRA 414 (2001). 183 Arcaba v. Vda. de Batocael, supra. 184 Id.
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stipulations between the parties,185 a conviction of concubinage,186 or the existence of illegitimate children.187
[139.3.6] Persons Disqualied to Succeed by Will
By express provision of Article 740 of the New Civil Code, those who are incapacitated to succeed by will are likewise disqualied to become donees in donation inter vivos. Articles 1027 and 1032 of the New Civil Code enumerate those persons who are incapacitated to succeed by will. However, the disqualications contemplated in Article 740 extend only to those persons who are incapable of succeeding by virtue of Article 1027 of the Civil Code and do not extend to those persons disqualied under Article 1032 of the same Code. As explained by the late Senator Tolentino, a donation made to a person who falls under the provisions of Article 1032 would be valid, because a testamentary provision made in favor of such a person after the testator has knowledge of the act of unworthiness would constitute a pardon under Article 1033.188 On the other hand, if the donation has already been made when the cause of unworthiness occurs, the donation is not revoked, because donations inter vivos are revoked only by the causes mentioned in Articles 760, 764 and 765.189 With respect to Article 1027, it is quite obvious that paragraph no. (4), which speaks of attesting witnesses, is not applicable to donations because no attesting witnesses are required in donation inter vivos. Hence, in relation to Article 1027, the following persons are disqualied to become donees under the provisions of Article 740 of the Civil Code: (1) The priest who heard the confession of the (donor) during his last illness, or the minister of the gospel who extended spiritual aid to him during the same period; (2) The relatives of such priest or minister of the gospel within the fourth degree, the church, order, chapter, community, organization, or institution to which such priest or minister may belong;
185 The Insular Life Company, Ltd. v. Ebrado, 80 SCRA 181 (1977); Matabuena v. Cervantes, 38 SCRA 284 (1971). 186 Calimlim-Canullas v. Fortun, 129 SCRA 675 (1984). 187 People v. Villagonzalo, 238 SCRA 215 (1994); Bienvenido v. Court of Appeals, 237 SCRA 676 (1994). 188 See II Tolentino, Civil Code, 1992 ed., 550. 189 Id.
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(3) A guardian with respect to (donations) made by a ward in his favor before the nal accounts of the guardianship have been approved, even if the (donor) should die after the approval thereof; nevertheless, any (donations) made by the ward in favor of the guardian when the latter is his ascendant, descendant, brother, sister, or spouse, shall be valid; (4) Any physician, surgeon, nurse, health ofcer or druggist who took care of the (donor) during his last illness; and (5) Individuals, associations and corporations not permitted by law to (receive donations).
Art. 747. Persons who accept donations in representation of others who may not do so by themselves, shall be obliged to make the notication and notation of which Article 749 speaks. (631) Art. 748. The donation of a movable may be made orally or in writing. An oral donation requires the simultaneous delivery of the thing or of the document representing the right donated. If the value of the personal property donated exceeds Five thousand pesos, the donation and the acceptance shall be made in writing. Otherwise, the donation shall be void. (632a) Art. 749. In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy. The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor. If the acceptance is made in a separate instrument, the donor shall be notied thereof in an authentic form, and this step shall be noted in both instruments. (633)
140. Formalities in Donation

[140.1] In General
While donation is considered as a contract190 and, as a rule, contracts are obligatory in whatever form they may have been entered
190
See discussions in supra 1.4.
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into,191 donation, however, is a solemn contract which requires form for purposes of validity. In other words, if the formalities required in Articles 748 and 749 are not followed the donation shall be void.
[140.2] Applicability of Articles 748 and 749, NCC
As explained in supra 136.2.4, the formalities provided for in Articles 748 and 749 are applicable only to donations inter vivos and not to transfer mortis causa, the latter being governed by the formalities for the validity of wills. In supra 136.3.3, however, it is further claried that the formalities required in Articles 748 and 749 apply only to simple and remuneratory donations and nd no application to onerous ones, the latter being governed by the rules on contracts. Following the provisions of Article 83 of the Family Code,192 the formalities of donations propter nuptias are likewise governed by Articles 748 and 749 of the Civil Code. The concept of donation propter nuptias is limited to donations made before the celebration of the marriage, in consideration of the same, and in favor of one or both of the future spouses.193 Thus, for a donation to be considered as donation propter nuptias, the following requisites must be present: (1) it must be made before the celebration of the marriage; (2) it must be made in consideration of the marriage; and (3) it must be made in favor of one or both of the future spouses. In this kind of donation, it is essential that the donee or donees be either of the future spouses or both of them, although the donor may either be one of the future spouses or a third person. Therefore, the following donations are not donations propter nuptias: (1) those made in favor of the spouses after the celebration of marriage; (2) those executed in favor of the future spouses but not in consideration of the marriage; and (3) those granted to persons other than the spouses even though they may be founded on the marriage.194
[140.3] Form of Donations of Personal Property
The formalities of donations involving personal properties are governed by Article 748 of the New Civil Code. Depending on its
Art. 1356, NCC. Art. 83 of the Family Code provides: These donations are governed by the rules on ordinary donations established in Title III of Book III of the Civil Code, insofar as they are not modied by the following articles. 193 Art. 82, FC. 194 Serrano v. Solomon, G.R. No. L-12093, June 29, 1959, citing 6 Manresa 232.
191 192
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value, the donation of a personal property may be made either orally or in writing. If the value of the personal property does not exceed ve thousand pesos (P5,000.00), the donation may be made orally subject, however, to the requirement that there must be simultaneous delivery of the thing or of the document representing the right donated.195 If there is no simultaneous delivery, the donation is void. There is nothing in the law, however, which prevents the donation from being reduced in writing. If the donation is in writing, note that there is no requirement of simultaneous delivery and the law does not require that the acceptance must also be in writing. As such, if the value of the personal property to be donated does not exceed P5,000 and the donation is made in writing, the acceptance may be made either orally or in writing, expressly or tacitly, and without need of simultaneous delivery. If the value of the personal property to be donated exceeds P5,000.00, the law mandates that both the donation and the acceptance must be in writing, otherwise, the donation shall be void.196 Note that the law simply requires the donation and the acceptance to be in written form and such requirement is complied with if both the donation and the acceptance are embodied either in a private instrument or a public instrument. Further, the law does not require that both the donation and the acceptance be embodied in a single instrument. Hence, the acceptance may be made in a separate instrument and such fact is not required to be noted in both instruments of donations and acceptance. In one case,197 where the alleged subject of donation was the purchase money in a contract of sale in the amount of P3,297,800, the Court held that the donation must comply with the mandatory requirements of Article 748. The Court held Petitioners could not brush aside the fact that a donation must comply with the mandatory formal requirements set forth by law for its validity. Since the subject donation is the purchase money, Art. 748 of the New Civil Code is applicable. Accordingly, the donation of money equivalent
Art. 748, 2nd par., NCC. Art. 748, 3rd par., NCC. 197 Moreo-Lentfer v. Wolf, 441 SCRA 584 (2004).
195 196
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to P3,297,800 as well as its acceptance should have been in writing. It was not. Hence, the donation is invalid for noncompliance with the formal requisites prescribed by law.198
[140.4] Form of Donations of Real Property
If what is to be donated is a real property, the law mandates that: (1) both the donation and the acceptance must be embodied in a public instrument, although not necessarily embodied in a single document;199 (2) the real property donated and the value of the charges which the donee is required to satisfy must be specied in the deed of donation;200 (3) if the acceptance is embodied in a separate public document, the donor shall be notied thereof in an authentic form and such step shall be noted in both instruments of donation and acceptance.201 All the foregoing requisites must be complied with, otherwise, the donation shall be void.202
[140.4.1] Donation and Acceptance Must Be in Public Document
In order that the donation of an immovable property may be valid, it must be made in a public document203 regardless of the value of the property. It is clear from Article 749 that a transfer of real property from one person to another cannot take effect as a donation unless embodied in a public document.204 And since donation is perfected only from the moment the donor knows of the acceptance by the donee,205 acceptance of the donation by the donee is, therefore, indispensable; its absence makes the donation null and void.206 When applied to a donation of an immovable property, the law further requires that the acceptance must be made in the same deed of donation or in a separate public document.207
Id., at pp. 590-591. Art. 749, 1st and 2nd pars., NCC. 200 Art. 749, 2nd par., NCC. 201 Art. 749, 3rd par., NCC. 202 Art. 749, NCC. 203 Heirs of Rosendo Sevilla Florencio v. Heirs of Teresita Sevilla de Leon, 425 SCRA 447
198 199
(2003). Heirs of Salud Dizon Salamat v. Tamayo, 298 SCRA 313, 317 (1998). Art. 734, NCC. 206 Lagazo v. Court of Appeals, 287 SCRA 18, 27. 207 Art. 749, FC.
204 205
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If the acceptance is not embodied in a public document, the donation shall be void.208
Heirs of Salud Dizon Salamat v. Tamayo 298 SCRA 313 (1998) Agustin Dizon died intestate on May 15, 1942 leaving behind his ve children Eduardo, Gaudencio, Salud, Valenta and Natividad as surviving heirs. Among the properties left by the decedent was a parcel of land in Barrio San Nicolas, Hagonoy, Bulacan, with an area of 2,188 square meters covered by Original Certicate of Title No. 10384. On January 8, 1944, Eduardo sold his hereditary rights in the sum of P3,000 to his sister Salud Dizon Salamat. The sale was evidenced by a private document bearing the signatures of his sisters Valenta and Natividad as witnesses. On June 2, 1949, Gaudencio likewise sold his hereditary rights for the sum of P4,000 to his sister Salud. The sale was evidenced by a notarized document which bore the signature of Eduardo Dizon and a certain Angela Ramos as witnesses. Gaudencio died on May 30, 1951 leaving his daughters Priscila D. Rivera and Maria D. Jocson as heirs. Sometime in 1987, the heirs of Salud Dizon Salamat and the heirs of Anselma Reyes Dizon led an action for compulsory judicial partition of real properties registered in the name of Agustin Dizon with the Regional Trial Court, Branch 18 of Malolos, Bulacan. The action was prompted by the refusal of Natividad Dizon Tamayo to agree to the formal distribution of the properties of deceased Agustin Dizon among his heirs. Her refusal stemmed from her desire to keep for herself the parcel of land covered by OCT 10384 where she presently resides, claiming that her father donated it to her sometime in 1936 with the conformity of the other heirs. The subject property is also declared for taxation purposes under Tax Declaration No. 10376 in the name of Natividad Dizon Tamayo. Natividad claims that her father donated the subject property to her sometime in 1936 with the consent of her co-heirs. In support of her claim, Natividad presented a private document of conformity which was allegedly signed and executed by her elder brother, Eduardo, in 1936. The heirs of Salud and Anselma, however, question the authenticity of the document inasmuch as it is marred by unexplained erasures and alterations. Notwithstanding the unexplained erasures and alterations, the Court of Appeals, in afrming the decision of the RTC favoring Natividad, stated that a cursory reading of the signed statement of Eduardo Dizon, which execution is undisputed, showed that there was an oral donation of the litigated land from Agustin Dizon to Natividad Dizon Tamayo in 1936. In reversing the decision
208
Id.
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of the Court of Appeals, the Supreme Court held that such oral donation was void. The Court explained It is clear from Article 749 that a transfer of real property from one person to another cannot take effect as a donation unless embodied in a public document. The alleged donation in the case at bar was done orally and not executed in a public document. Moreover, the document which was presented by respondent in support of her claim that her father donated the subject parcel of land to her was a mere private document of conformity which was executed by her elder brother, Eduardo in 1956. It may not be amiss to point out that the brothers Eduardo and Gaudencio had already ceded their hereditary interests to petitioner Salud Dizon Salamat even before 1950. [140.4.2] Property Donated and Value of Charges Must Be Specied
Article 749 further requires that the real property donated and the value of the charges which the donee is required to satisfy must be specied in the deed of donation. The charges referred to in this article are the burdens mentioned in Article 726 inferior in value to the property donated. These charges are required to be specied in the deed of donation for the purpose of determining the true amount of the donation. As explained in supra 136.3.2, if the value of the burdens or charges is at least equal or superior than that of the value of the property donated, the donation is in reality a contract and governed by the law on contracts.
[140.4.3] Requirement of Notication and Notation
Title to immovable property does not pass from the donor to the donee by virtue of a deed of donation until and unless it has been accepted in a public instrument and the donor duly notied thereof. The acceptance may be made in the very same instrument of donation. If the acceptance does not appear in the same document, it must be made in another. Solemn words are not necessary; it is sufcient if it shows the intention to accept. But in this case it is necessary that formal notice thereof be given to the donor, and the fact that due notice has been given must be noted in both instruments (that containing the offer to donate and that showing the acceptance).209 Where the deed of donation fails
209 Lagazo v. CA, 287 SCRA 18, 27-28, citing Tolentino, Civil Code of the Philippines, 1992 ed., Vol. II, pp. 557-558.
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to show the acceptance, or where the formal notice of the acceptance, made in a separate instrument, is either not given to the donor or else not noted in the deed of donation and in the separate acceptance, the donation is null and void.210 It is well-settled that if the notication and notation are not complied with, the donation is void.211
Republic v. Guzman 326 SCRA 90 (Feb. 18, 2000) David Rey Guzman, a natural-born American citizen, is the son of the spouses Simeon Guzman, a naturalized American citizen but formerly a citizen of the Philippines, and Helen Meyers Guzman, an American citizen. In 1968 Simeon died leaving to his sole heirs Helen and David an estate consisting of several parcels of land located in Bulacan. In 1970, Helen and David executed a Deed of Extrajudicial Settlement of the Estate of Simeon Guzman dividing and adjudicating to themselves all the property belonging to the estate of Simeon. In 1981, Helen executed a Quitclaim Deed assigning, transferring, and conveying to her son David her undivided one-half interest on all the parcels of land subject matter of the Deed of Extrajudicial Settlement of the Estate of Simeon Guzman. Since the document appeared not to have been registered, upon the advice of her lawyer, Helen executed another document, a Deed of Quitclaim in August 1989 conrming the earlier deed of quitclaim as well as modifying the document to encompass all her other property in the Philippines. In October 1989, David executed a Special Power of Attorney where he acknowledged that he became the owner of the parcels of land subject of the Deed of Quitclaim executed by Helen and empowering Atty. Abela to sell or otherwise dispose of the lots. A certain lawyer wrote the Ofce of the Solicitor General and furnished it with documents showing that Davids ownership of the one-half (1/2) of the estate of Simeon Guzman was defective. Thus, the OSG led a petition for escheat praying that 1/2 of Davids interest in each of the subject parcels of land be forfeited in favor of the estate. The State anchors its argument on Sections 7 and 8 of Article XII of the Constitution. The State contends that the acquisition of the parcels of land by David does not fall under any of these exceptions. It asserts that David being an American citizen could not validly acquire one-half (1/2) interest in each of the subject parcels of land by way of the two deeds of quitclaim as they are in reality donations inter vivos and that the elements of donation are present in the conveyance made by Helen in favor of David.
210 Sumpita v. Banga, 436 SCRA 521, 528-529 (2004), citing Tolentino, Civil Code of the Philippines, 1992 ed., Vol. II, pp. 557-558. 211 Republic v. Guzman, 326 SCRA 90, 98 (2000).
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David, maintains, on the other hand, that he acquired the property by right of accretion and not by way of donation, with the deeds of quitclaim merely declaring Helens intention to renounce her share in the property and not an intention to donate. The intention of Helen, in fact, was to preserve the Bulacan properties within the bloodline of Simeon from where they originated, over and above the benet that would accrue to David by reason of her renunciation. The Republic, however, maintains that the Special Power of Attorney executed by David in favor of his lawyer manifests his implied acceptance of his mothers alleged donation. In ruling that there was no effective conveyance of the parcels of land by way of donation inter vivos, the Supreme Court explained Likewise, the two (2) deeds of quitclaim executed by Helen may have been in the nature of a public document but they lack the essential element of acceptance in the proper form required by law to make the donation valid. We nd no merit in petitioners argument that the Special Power of Attorney executed by David in favor of Atty. Lolita G. Abela manifests his implied acceptance of his mothers alleged donation as a scrutiny of the document clearly evinces the absence thereof. The Special Power of Attorney merely acknowledges that David owns the property referred to and that he authorizes Atty. Abela to sell the same in his name. There is no intimation, expressly or impliedly, that Davids acquisition of the parcels of land is by virtue of Helens possible donation to him and we cannot look beyond the language of the document to make a contrary construction as this would be inconsistent with the parol evidence rule. Moreover, it is mandated that if an acceptance is made in a separate public writing the notice of the acceptance must be noted not only in the document containing the acceptance but also in the deed of donation. Commenting on Art. 633 of the Civil Code from whence Art. 749 came Manresa said: If the acceptance does not appear in the same document, it must be made in another. Solemn words are not necessary; it is sufcient if it shows the intention to accept x x x it is necessary that formal notice thereof be given to the donor, and the fact that due notice has been given must be noted in both instruments. Then and only then is the donation perfected. Thus, in Santos v. Robledo we emphasized that when the deed of donation is recorded in the registry of property the document that evidences the acceptance if this has not been made in the deed of gift should also be recorded. And in one or both documents, as the case may be, the notication of the acceptance as formally
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made to the donor or donors should be duly set forth. Where the deed of donation fails to show the acceptance, or where the formal notice of the acceptance made in a separate instrument is either not given to the donor or else noted in the deed of donation, and in the separate acceptance, the donation is null and void. These requisites, denitely prescribed by law, have not been complied with, and no proof of compliance appears in the record. The two (2) quitclaim deeds set out the conveyance of the parcels of land by Helen in favor of David but its acceptance by David does not appear in the deeds, nor in the Special Power of Attorney. Further, the records reveal no other instrument that evidences such acceptance and notice thereof to the donor in an authentic manner. It is well-settled that if the notication and notation are not complied with, the donation is void. Therefore, the provisions of the law not having been complied with, there was no effective conveyance of the parcels of land by way of donation inter vivos.
However, a strict and literal adherence to the requirement of notation in Article 749 of the Civil Code should be avoided if such will result not in justice to the parties but conversely a distortion of their intentions.212 Thus, if the donor was not unaware of the acceptance for she in fact conrmed it later and requested that the donated land be not registered during her lifetime, the Court held that it cannot in conscience declare the donation ineffective simply because there is no notation for that would be placing too much stress on mere form over substance.213 In another case214 where the acceptance was not noted in the Deed of Donation, the Court held that the actual knowledge by the donor of the construction and existence of the school building pursuant to the condition of the donation already fullls the legal requirement that the acceptance of the donation by the donee be communicated to the donor. In Pajarillo215 and Silim,216 the Court explained that the purpose of the formal requirement for acceptance of a donation is to ensure that such acceptance is duly communicated to the donor.
212 See Pajarillo v. Intermediate Appellate Court, 176 SCRA 340 (1989) and Republic v. Silim, 356 SCRA 1 (2001). 213 Pajarillo v. IAC, supra, at p. 349. 214 Republic v. Silim, supra. 215 Supra, at p. 349. 216 Supra, at p. 11.
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The cases of Pajarillo and Silim must be distinguished from the cases of Legasto v. Verzosa217 and Santos v. Robledo218 where the Court applied strictly the requirement of notation. In Legasto, there was no evidence whtsoever that the claimed donations had been accepted, as stressed by Justice Villa-Real. The same observation is made in Santos, where Justice Torres noted that the acceptance of the donation did not appear in the deed of donation or in any other instrument.
Republic v. Silim 356 SCRA 1 (2001) In 1971, the spouses Silim donated a 5,600 square meter parcel of land in favor of the Bureau of Public Schools, Municipality of Malangas, Zamboanga de Sur. In the Deed of Donation, the donors imposed the condition that the said property should be used exclusively and forever for school purposes only. This donation was accepted by the District Supervisor of BPS, through an Afdavit of Acceptance and/or Conrmation of Donation. Through a fund raising campaign by the Parents-Teachers Association of Barangay Kauswagan, a school building was constructed on the donated land. However, the Bagong Lipunan school building that was supposed to be allocated for the donated parcel of land in Barangay Kauswagan could not be released since the government required that it be built upon a one (1) hectare parcel of land. To remedy this predicament, the Assistant School Superintendent of the Province of Zamboanga del Sur authorized the District Supervisor of the BPS to ofcially transact for the exchange of the one-half (1/2) hectare old school site of Kauswagan Elementary School to a new and suitable location which would t the specications of the government. Pursuant to this, the District Supervisor entered into a Deed of Exchange whereby the donated land was exchanged with a bigger lot. Consequently, the Bagong Lipunan school buildings were constructed on the new school site and the school building previously erected on the donated lot was dismantled and transferred to the new location. When the spouses Silim saw that a house was being constructed on the donated land, they led an action for the cancellation and revocation of the donation. One of the arguments raised by the spouses Silim was that the donation was void since the acceptance was not noted in the Deed of Donation. In holding that the legal requirement in Article 749 was complied with, the Supreme Court explained Respondents further argue that assuming there was a valid acceptance of the donation, the acceptance was not noted in the
217 218
54 Phil. 766. 28 Phil. 245.
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Deed of Donation as required in Article 749 of the Civil Code, hence, the donation is void. The purpose of the formal requirement for acceptance of a donation is to ensure that such acceptance is duly communicated to the donor. Thus, in Pajarillo v. Intermediate Appellate Court, the Court held: There is no question that the donation was accepted in a separate public instrument and that it was duly communicated to the donors. Even the petitioners cannot deny this. But what they do contend is that such acceptance was not noted in both instruments, meaning the extrajudicial partition itself and the instrument of acceptance, as required by the Civil Code. That is perfectly true. There is nothing in either of the two instruments showing that authentic notice of the acceptance was made by Salud to Juana and Felipe. And while the rst instrument contains the statement that the donee does hereby accept this donation and does hereby express her gratitude for the kindness and liberality of the donor, the only signatories thereof were Felipe Balane and Juana Balane de Suterio. That was in fact the reason for the separate instrument of acceptance signed by Salud a month later. A strict interpretation of Article 633 can lead to no other conclusion that the annulment of the donation for being defective in form as urged by the petitioners. This would be in keeping with the unmistakable language of the above-quoted provision. However, we nd that under the circumstances of the present case, a literal adherence to the requirement of the law might result not in justice to the parties but conversely a distortion of their intentions. It is also a policy of the Court to avoid such an interpretation. The purpose of the formal requirement is to insure that the acceptance of the donation is duly communicated to the donor. In the case at bar, it is not even suggested that Juana was unaware of the acceptance for she in fact conrmed it later and requested that the donated land be not registered during her lifetime by Salud. Given this signicant evidence, the Court cannot in conscience declare the
DIFFERENT MODES OF ACQUIRING OWNERSHIP DONATION Effect of Donations and Limitations Thereon
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donation ineffective because there is no notation in the extrajudicial settlement of the donees acceptance. That would be placing too much stress on mere form over substance. It would also disregard the clear reality of the acceptance of the donation as manifested in the separate instrument dated June 20, 1946, and as later acknowledged by Juan. In the case at bar, a school building was immediately constructed after the donation was executed. Respondents had knowledge of the existence of the school building put up on the donated lot through the efforts of the Parents-Teachers Association of Barangay Kauswagan. It was when the school building was being dismantled and transferred to the new site and when ViceMayor Wilfredo Palma was constructing a house on the donated property that respondents came to know of the Deed of Exchange. The actual knowledge by respondents of the construction and existence of the school building fullled the legal requirement that the acceptance of the donation by the donee be communicated to the donor. [140.4.4] Registration Not Necessary For Validity of Donation
It is enough, between the parties to a donation of an immovable property, that the donation be made in a public instrument but, in order to bind third persons, the donation must be registered in the Registry of Property.219 Such registration in the Ofce of the Register of Deeds or in the Assessors Ofce is not necessary for the donation to be considered valid and ofcial.220 Chapter 3 EFFECT OF DONATIONS AND LIMITATIONS THEREON
Art. 750. The donations may comprehend all the present property of the donor, or part thereof, provided he reserves, in full ownership or in usufruct, sufcient means for the support of himself, and of all relatives
Shoppers Paradise Realty & Development Corp. v. Roque, 419 SCRA 93, 98 (2004). Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla de Leon, 425 SCRA 447, 459 (2004).
219 220
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who, at the time of the acceptance of the donations, are by law entitled to be supported by the donor. Without such reservation, the donation shall be reduced on petition of any person affected. (634a) Art. 751. Donations cannot comprehend future property. By future property is understood anything which the donor cannot dispose of at the time of the donation. (635) Art. 752. The provisions of Article 750 notwithstanding, no person may give or receive, by way of donation, more than he may give or receive by will. The donation shall be inofcious in all that it may exceed this limitation. (636)
141. Extent of Donation

[141.1] In General
A donor may donate all his property or part thereof221 subject only to the following limitations: (1) He cannot donate future property;222 (2) He must reserve, in full ownership or in usufruct, sufcient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by him;223 and (3) will.224 He cannot give by donation more than he can give by
[141.2] Future Property Cannot Be Donated
Donations cannot comprehend future property.225 This is pretty obvious. As being itself a mode of acquiring ownership, donation results in an effective transfer of title over the property from the donor to the donee226 once the donation is perfected. For this reason, the law requires that the donor must be the owner of the thing donated at the time of the
Art. 750, NCC. Art. 751, NCC. 223 Id. 224 Art. 752, NCC. 225 Art. 751, 1st par., NCC. 226 Shoppers Paradise Realty & Development Corp. v. Roque, supra, p. 98.
221 222
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donation.227 This, in essence, is the meaning of the rule in Article 751 that donations cannot comprehend future property. If the rule were otherwise, it will be an inefcacious process since the donor will have nothing to convey at the time that the donation is made following the rule that no one can give what he does not have nemo dat quod non habet. By future property is understood anything which the donor cannot dispose of at the time of the donation.228 Stated otherwise, future property includes all property that belongs to others at the time the donation is made, although it may or may not later belong to the donor.229 It cannot be donated, because it is not at present his property, and he cannot dispose of it at the moment of making the donation.230 The meaning of the phrase at the time of the donation in the second paragraph of Article 751 must be held to mean perfection of the donation. In other words, the phrase at the time of the donation in this article must not be given its literal meaning since the requirement that the donor must be the owner of the property donated attaches only at the time of the perfection of the donation and not prior thereto.231 Hence, it is possible that, at the time of the execution of the deed of donation or even up to the time of acceptance, the donor may not be the owner of the property donated, so long as at the time the acceptance is conveyed at which point the donation is considered perfected the requirement of the law (that the donor must be the owner of the property donated) is already complied with.
[141.2.1] Donation of Future Property Between Future Spouses
In donation propter nuptias, however, the Family Code allows a donation of future property between the spouses.232 Under said provision of the Family Code, however, the donation of future property partakes
See discussions in supra 4.1. Art. 751, 2nd par., NCC. 229 See II Tolentino, Civil Code, 1992 ed., 561. 230 Id. 231 See discussion in supra 4.2. 232 Art. 84 of the Family Code provides: Art. 84. If the future spouses agree upon a regime other than the absolute community of property, they cannot donate to each other in their marriage settlements more than one-fth of their present property. Any excess shall be considered void. Donations of future property shall be governed by the provisions on testamentary succession and the formalities of wills. (130a)
227 228
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of the nature of a testamentary provision and, as such, it is governed by the provisions on testamentary succession and the formalities of wills.233 As explained in supra 140.2, in donation propter nuptias, it is essential that the donee or donees be either of the future spouses or both of them, although the donor may either be one of the future spouses or a third person. In the second paragraph of Article 84 of the Family Code, it is clear that the donation of future property referred to is a donation propter nuptias between the future spouses. Consequently, if the donation of future property is made by a third person, Article 84 of the Family Code does not apply but Article 751 of the New Civil Code, even if the donation is one of propter nuptias. In which case, such donation of future property is prohibited.
[141.2.2] Neither Spouse May Donate His or Her Share in the Absolute Community or Conjugal Partnership of Gains
Under the Family Code, either spouse may dispose of his or her interest in the community property or conjugal partnership of gains only by will234 and not by acts inter vivos. Hence, neither the husband nor the wife may donate his or her interest in the community property or conjugal partnership of gains. The reason for this is because prior to the liquidation of the absolute community or conjugal partnership, the interest of each spouse in the community property or conjugal assets is inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate, and does not ripen into title until it appears that there are assets in the community as a result of the liquidation and settlement.235 The interest of each spouse is limited to the net remainder or remanente liquido (haber ganancial) resulting from the liquidation of the affairs of the partnership after its dissolution.236 Thus, the right of the husband or wife to one-half of the conjugal assets or community property does not vest until the dissolution and liquidation of the conjugal partnership or the absolute community, or after dissolution of the marriage, when it is nally determined that, after settlement of conjugal or absolute community obligations, there are net assets left which can be divided
Id. Art. 97, FC. 235 Abalos v. Macatangay, Jr., 439 SCRA 649 (2004). 236 Abalos v. Macatangay, Jr., supra, citing Nable Jose v. Nable Jose, 41 Phil. 713 (1916); Manuel v. Losano, 41 Phil. 855 (1918).
233 234
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between the spouses or their respective heirs.237 Hence, any disposition of the spouses respective shares or interest in the conjugal partnership or absolute community shall be void since such right to one-half of the conjugal assets does not vest until the liquidation of the conjugal partnership. Nemo dat qui non habet. No one can give what he has not.238 In other words, prior to the liquidation of the absolute community or conjugal partnership, the interest of each spouse in the community property or conjugal assets is considered as a future property which cannot be the subject matter of donation inter vivos.
[142.3] Donor Must Reserve For Himself and Relatives
While a donor may donate all his present properties, he must not neglect himself and his family. Thus, one of the basic limitations to the donors right to donate is that he must reserve, either in full ownership or in usufruct, sufcient means for the support of himself and all relatives who, at the time of the acceptance, are by law entitled to be supported by the donor.239 However, if the donor fails to make such reservation, the donation is not void but subject only to a corresponding reduction at the instance of any person affected and only to the extent necessary for the support of the donor and his relatives referred to in Article 750 of the Civil Code. The provision of Article 750 must be read in conjunction with Articles 195 and 196 of the Family Code which provide, as follows: Art. 195. Subject to the provisions of the succeeding articles, the following are obliged to support each other to the whole extent set forth in the preceding article: (1) (2) The spouses; Legitimate ascendants and descendants;
(3) Parents and their legitimate children and the legitimate and illegitimate children of the latter; (4) Parents and their illegitimate children and the legitimate and illegitimate children of the latter; and
Id., citing Quintos de Ansaldo v. Sheriff of Manila, 64 Phil. 115 (1937). Id. 239 See Art. 750, NCC.
237 238
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(5) Legitimate brothers and sisters, whether of full or half-blood. Art. 196. Brothers and sisters not legitimately related, whether of the full or half-blood, are likewise bound to support each other to the full extent set forth in Article 194, except only when the need for support of the brother or sister, being of age, is due to a cause imputable to the claimants fault or negligence. Thus, any of the persons enumerated in the above-quoted provisions may be deemed as a party in interest in any petition for reduction of the donation by reason of Article 750 of the Civil Code.
[142.4] Donation Must Not Be Inofcious
A donors prerogative to make donations is further subject to the limitation that he cannot give by donation more than he can give by will.240 If he does, so much of what is donated as exceeds what he can give by will is deemed inofcious and the donation is reducible to the extent of such excess, though without prejudice to its taking effect in the donors lifetime or the donees appropriating the fruits of the thing donated.241 Under the law on succession,242 there are three kinds of heirs: (1) voluntary, those who become as such only by the express will of the testator in the latters will and testament (present only in testamentary succession); (2) legal or intestate, those who are called by the law to the succession in the absence of voluntary heirs designated by the testator (present only in intestate succession); and (3) compulsory, those who are entitled to the legitime and cannot be deprived thereof by the testator unless properly disinherited by the testator. Now, there is a part of a persons property which he cannot dispose of either by way of donation inter vivos243 or by testamentary provision in a will244 because the law has reserved it for his compulsory heirs.245 This portion is called the
Art. 752, NCC. Vda. de Tupas v. Br. XLIII, RTC of Negros Occidental, 144 SCRA 622, 624-625, citing Art. 771, NCC. 242 Arts. 774 to 1105, NCC. 243 Art. 751, NCC. 244 Art. 886, NCC. 245 Id.
240 241
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legitime.246 Inofcious donations are, therefore, those which prejudice the legitime of the compulsory heirs. Inofcious donations are not void although they may be subjected to a corresponding reduction or revocation, as the case may be, if there is impairment of the legitime of the compulsory heirs of the donor. And whether or not there is impairment of such legitime is a matter that can be determined only upon the death of the donor after considering the estimated net value of his property at the time of his death.247
Art. 753. When a donation is made to several persons jointly, it is understood to be in equal shares, and there shall be no right of accretion among them, unless the donor has otherwise provided. The preceding paragraph shall not be applicable to donations made to the husband and wife jointly, between whom there shall be a right of accretion, if the contrary has not been provided by the donor. (637) Art. 754. The donee is subrogated to all the rights and actions which in case of eviction would pertain to the donor. The latter, on the other hand, is not obliged to warrant the things donated, save when the donation is onerous, in which case the donor shall be liable for eviction to the concurrence of the burden. The donor shall also be liable for eviction or hidden defects in case of bad faith on his part. (638a) Art. 755. The right to dispose of some of the things donated, or of some amount which shall be a charge thereon, may be reserved by the donor; but if he should die without having made use of this right, the property or amount reserved shall belong to the donee. (639) Art. 756. The ownership of property may also be donated to one person and the usufruct to another or others, provided all the donees are living at the time of the donation. (640a) Art. 757. Reversion may be validly established in favor of only the donor for any case and circumstances, but not in favor of other persons unless they are all living at the time of the donation. Any reversion stipulated by the donor in favor of a third person in violation of what is provided in the preceding paragraph shall be void, but shall not nullify the donation. (641a) Art. 758. When the donation imposes upon the donee the obligation to pay the debts of the donor, if the clause does not contain any declara246 247
Id. See Art. 771, NCC.
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tion to the contrary, the former is understood to be liable to pay only the debts which appear to have been previously contracted. In no case shall the donee be responsible for debts exceeding the value of the property donated, unless a contrary intention clearly appears. (642a) Art. 759. There being no stipulation regarding the payment of debts, the donee shall be responsible therefor only when the donation has been made in fraud of creditors. The donation is always presumed to be in fraud of creditors, when at the time thereof the donor did not reserve sufcient property to pay his debts prior to the donation. (643)
143. Effect of Donations

[143.1] Donations Made to Several Donees Jointly
When a donation is made to several persons jointly, the following rules shall apply: (1) The donees are entitled to equal portions;248 (2) If the donees are not husband and wife, there is no right of accretion among them, accretion taking place only when expressly provided for by the donor.249 If the donation, however, is made to husband and wife jointly the rule is that there is a right of accretion among them unless the donor provides for the contrary.250 When there is a right of accretion among several donees, the share of the one who did not accept or could not accept or who died before he had accepted shall go the other donees in proportion to the interest of each in the donation. In such a situation, the acceptance by any of the donees of the donation shall result in its perfection thereby preventing the donor from revoking that part of the donation corresponding to the share of the one who did not accept or who died prior to his acceptance. (3) If the donation is made to the spouses jointly in a regime of conjugal partnership of gains, and with designation of determinate shares, their respective shares shall pertain to them as his or her own
Art. 753, NCC. Id. 250 Id.

248 249
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exclusive property.251 In the absence of designation, they shall share and share alike, without prejudice to the right of accretion.252
[143.2] No Warranty Against Eviction
As a rule, the donor does not warrant the thing donated against eviction.253 Hence, the donor has no liability to the donee in case of eviction except: (1) when there is bad faith on the part of the donor, in which case he is also liable for hidden defects;254 or (2) when the donation is onerous, in which case the donor shall be liable up to the amount equal to the burden.255
[143.3] Reservation of Power to Dispose
As discussed in supra 136.2.4, if there is a reservation by the donor of the power to dispose or alienate the property donated and such right is unqualied or unrestricted, meaning, the donor can alienate the conveyed property in favor of other persons of his choice at anytime that he should wish to do so, the donation is mortis causa. The discussion in supra 136.2.4 must be distinguished, however, from the provision of Article 755 of the Civil Code, which contemplates of a situation where there are several properties donated by the donor and he reserved for himself the power to dispose of some of the things donated, or of some amount. Such reservation is valid and will not affect the character of the conveyance as donation inter vivos. If the donor should die, however, without having made use of this right, the property or amount reserved shall belong to the donee.256 On the other hand, if there are several properties donated and the donor has reserved the power to dispose of all of them, which right is neither qualied nor restricted, meaning he can alienate all the conveyed properties in favor of other persons of his choice at anytime that he should wish to do so, the donation is mortis causa, therefore, subject to the rules governing testamentary provisions and formalities of wills.
Art. 113, FC. Id. 253 Art. 754, 1st par., NCC. 254 Art. 754, 2nd par., NCC. 255 Art. 754, 1st par., NCC. 256 Art. 755, NCC.
251 252
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[143.4] Separate Donation of Ownership and Usufruct
The donor may donate separately the ownership of the property to one person and the usufruct to another or others subject only to the condition that all the donees must be living at the time of the donation.257
[143.5] Donor May Provide for Reversion
The donor may validly provide for the reversion or return of the property donated to him for any case and circumstances.258 He may likewise establish a reversion in favor of a third person provided that such person is living at the time of the donation.259 If the latter condition is violated, only the provision for reversion is considered void without affecting the validity of the donation.260
[143.6] Payment of Donors Debts
When the donation imposes upon the donee the obligation to pay the debts of the donor, the following rules shall apply unless a contrary intention clearly appears: (1) the donee is understood to be liable to pay only the debts which appear to have been previously contracted; and (2) the liability of the donee is limited only to the value of the property donated.261 On the other hand, in the absence of any stipulation regarding the payment of the debts of the donor, the donee shall be responsible therefore only when the donation has been made in fraud of creditors.262 And such donation is presumed to be in fraud of creditors when at the time of the donation the donor did not reserve sufcient property to pay his debts prior to the donation.263 The liability, however, of the donee should be limited only to the value of the property donated.
Art. 756, NCC. Art. 757, NCC. 259 Id. 260 Id. 261 Art. 758, NCC. 262 Art. 759, NCC. 263 Id.
257 258
DIFFERENT MODES OF ACQUIRING OWNERSHIP DONATION Revocation and Reduction of Donations
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Chapter 4 REVOCATION AND REDUCTION OF DONATIONS

Art. 760. Every donation inter vivos, made by a person having no children or descendants, legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or reduced as provided in the next article, by the happening of any of these events: (1) If the donor, after the donation, should have legitimate or legitimated or illegitimate children, even though they be posthumous; (2) If the child of the donor, whom the latter believed to be dead when he made the donation, should turn out to be living; (3) If the donor should subsequently adopt a minor child. (644a)
Art. 761. In the cases referred to in the preceding article, the donation shall be revoked or reduced insofar as it exceeds the portion that may be freely disposed of by will, taking into account the whole estate of the donor at the time of the birth, appearance or adoption of a child. (n) Art. 762. Upon the revocation or reduction of the donation by the birth, appearance or adoption of a child, the property affected shall be returned, or its value if the donee has sold the same. If the property is mortgaged, the donor may redeem the mortgage, by paying the amount guaranteed, with a right to recover the same from the donee. When the property cannot be returned, it shall be estimated at what it was worth at the time of the donation. (645a) Art. 763. The action for revocation or reduction on the grounds set forth in Article 760 shall prescribe after four years from the birth of the rst child, or from his legitimation, recognition or adoption, or from the judicial declaration of liation, or from the time information was received regarding the existence of the child believed dead. This action cannot be renounced, and is transmitted, upon the death of the donor, to his legitimate and illegitimate children and descendants. (646a) Art. 764. The donation shall be revoked at the instance of the donor, when the donee fails to comply with any of the conditions which the former imposed upon the latter. In this case, the property donated shall be returned to the donor, the alienations made by the donee and the mortgages imposed thereon by him being void, with the limitations established, with regard to third persons, by the Mortgage Law and the Land Registration Laws.
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This action shall prescribe after four years from the noncompliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donees heirs. (647a) Art. 765. The donation may also be revoked at the instance of the donor, by reason of ingratitude in the following cases: (1) If the donee should commit some offense against the person, the honor or the property of the donor, or of his wife or children under his parental authority; (2) If the donee imputes to the donor any criminal offense, or any act involving moral turpitude, even though he should prove it, unless the crime or the act has been committed against the donee himself, his wife or children under his authority; (3) If he unduly refuses him support when the donee is legally or morally bound to give support to the donor. (648a) Art. 766. Although the donation is revoked on account of ingratitude, nevertheless, the alienations and mortgages effected before the notation of the complaint for revocation in the Registry of Property shall subsist. Later ones shall be void. (649) Art. 767. In the case referred to in the rst paragraph of the preceding article, the donor shall have a right to demand from the donee the value of property alienated which he cannot recover from third persons, or the sum for which the same has been mortgaged. The value of said property shall be xed as of the time of the donation. (650) Art. 768. When the donation is revoked for any of the causes stated in Article 760, or by reason of ingratitude, or when it is reduced because it is inofcious, the donee shall not return the fruits except from the ling of the complaint. If the revocation is based upon noncompliance with any of the conditions imposed in the donation, the donee shall return not only the property but also the fruits thereof which he may have received after having failed to fulll the condition. (651) Art. 769. The action granted to the donor by reason of ingratitude cannot be renounced in advance. This action prescribes within one year, to be counted from the time the donor had knowledge of the fact and it was possible for him to bring the action. (652) Art. 770. This action shall not be transmitted to the heirs of the donor, if the latter did not institute the same, although he could have done so, and even if he should die before the expiration of one year. Neither can this action be brought against the heir of the donee, unless upon the latters death the complaint has been led. (653)
695
Art. 771. Donations which in accordance with the provisions of Article 752, are inofcious, bearing in mind the estimated net value of the donors property at the time of his death, shall be reduced with regard to the excess; but this reduction shall not prevent the donations from taking effect during the life of the donor, nor shall it bar the donee from appropriating the fruits. For the reduction of donations the provisions of this Chapter and of Articles 911 and 912 of this Code shall govern. (654) Art. 772. Only those who at the time of the donors death have a right to the legitime and their heirs and successors in interest may ask for the reduction of inofcious donations. Those referred to in the preceding paragraph cannot renounce their right during the lifetime of the donor, either by express declaration, or by consenting to the donation. The donees, devisees and legatees, who are not entitled to the legitime and the creditors of the deceased can neither ask for the reduction nor avail themselves thereof. (655a) Art. 773. If, there being two or more donations, the disposable portion is not sufcient to cover all of them, those of the more recent dates shall be suppressed or reduced with regard to the excess. (656)
144. Reduction or Revocation of Donations

[144.1] In General
As previously explained, a donation, as a mode of acquiring ownership, results in an effective transfer of title over the property from the donor to the donee and once a donation is accepted, the donee becomes the absolute owner of the property donated.264 Hence, as a rule, once the donation is accepted, it is generally considered irrevocable.265 The exceptions to irrevocability are the following grounds expressly provided in Articles 752, 760, 764 and 765 of the New Civil Code: (1) the subsequent appearance of children;266 (2) the non-fulllment of charges imposed in the donation;267 (3) the ingratitude of the donee;268 and (4) the fact that the donation is inofcious.269 The donation may likewise
264 Tanpingco v. IAC, 207 SCRA 652, 657, citing Roman Catholic Archbishop of Manila v. CA, 198 SCRA 300. See also discussion in supra 3.3. 265 Gestopa v. CA, 342 SCRA 105, 114. 266 Art. 760, NCC. 267 Art. 764, NCC. 268 Art. 765, NCC. 269 Art. 752, NCC.
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be reduced based on the following grounds: (1) that the donor did not reserve sufcient property for his own and his familys support;270 (2) by the subsequent appearance of children;271 and (3) that the donation is inofcious.272
[144.2] Subsequent Appearance of Children
Every donation inter vivos, made by a person having no children or descendants, legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or reduced as provided in the next article, by the happening of any of these events: (1) if the donor, after the donation, should have legitimate or legitimated or illegitimate children, even though they be posthumous; (2) if the child of the donor, whom the latter believed to be dead when he made the donation, should turn out to be living; or (3) if the donor subsequently adopt a minor child.273 Note that the happening of any of these events shall only give rise to a cause or ground to revoke the donation. Hence, if the proper action for revocation is not instituted, or if it is instituted but after the lapse of the statutory period of prescription, the donation will forever be considered valid. For any of these events to be considered as grounds for the revocation of a donation it is necessary, however, that the donor, at the time of the donation, did not have, or at least he believed that he did not have, any children or descendants, whether legitimate, legitimated, illegitimate or adopted.
[144.2.1] Adoption of Minor Child
In order to be a ground for revocation of the donation under Article 760, the person adopted must be a minor child. Stated otherwise, if the adopted child is a person of legal age, the donation may not be reduced or revoked pursuant to Article 760 although it may be subjected to either reduction or revocation pursuant to Article 752.
[144.2.2] Effect of Subsequent Appearance of Children
Upon the happening of any of the events mentioned in Article 760, the donor shall be entitled to demand either for the reduction or revocation
Art. 750, NCC. Art. 760, NCC. 272 Art. 752, NCC. 273 Art. 760, NCC.
270 271
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of the donation, as the case may be.274 Revocation, as distinguished from reduction, affects the entire donation while the latter affects only a part or a portion thereof. When the ground invoked is the subsequent appearance of children under Article 760, the donation shall be revoked or reduced insofar as it exceeds the portion that may be freely disposed of by will.275 In other words, there shall be a corresponding reduction or revocation of the donation in so far as it impairs the legitime of the child who subsequently appeared after the making of the donation. Note, however, that in the determination of the childs legitime, it is the whole estate of the donor at the time of the appearance of the child (be it by subsequent birth, re-appearance or adoption) that shall be taken into consideration. In other words, there shall be a provisional liquidation of the estate of the donor at the time of the birth, appearance or adoption of a minor child for the purpose of determining the donors estate and the childs legitime. But if there is no impairment of the childs legitime or when the donation does not exceed the free portion then the donation shall not be reduced nor revoked. As distinguished from Article 752, in relation to Article 771, in Article 760 the inofciousness of the donation is to be determined during the lifetime of the donor, i.e., at the time of the birth, appearance or adoption of a minor child. In Article 752, in relation to Article 771, however, the inofciousness of the donation is determined only at the time of death of the donor. It may then be asked, is the determination of the inofciousness of the donation under Article 760 a nal one? If, at the time of the subsequent appearance of a child under Article 760, the entire donation is found to be within the free portion of the donors estate, in which case, the donation is neither reduced nor revoked, and later on the donor died after suffering nancial reverses, may such donation be revoked if found to be inofcious at the time of the donors death? The answer is clearly in the afrmative. In this situation, the ground for the revocation of the donation is Article 752 of the New Civil Code. Let us consider, however, a donation which is either reduced or revoked because it is found to be inofcious at the time of the subsequent
274 275
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appearance of a child under Article 760, but later on the donor dies a richer man and, at the time of his death, the previous donation could have been accommodated in the free portion, may the donee be entitled to the return of the thing donated or its value? The answer must be in the negative. In this second situation, the ground for the revocation of the donation is Article 760, which is an altogether different ground from that provided in Article 752.
[144.2.3] Effects of Reduction or Revocation of Donation
Upon the revocation or reduction of the donation based on Article 760, the following effects are produced: (1) The property affected shall be returned, or if it cannot be returned, at least its value;276 (2) If the property is mortgaged, the donor may redeem the mortgage, by paying the amount guaranteed, with a right to recover his payment from the donee.277 When the property cannot be returned, it shall be estimated at what it was worth at the time of the donation.278 (3) The donee shall return the fruits of property affected only from the ling of the complaint.279
[144.2.4] Prescriptive Period of Action Based on Article 760
The prescriptive period of an action for revocation or reduction of the donation under Article 760 is four (4) years reckoned from the birth of the rst child, or from his legitimation, recognition or adoption, or from judicial declaration of liation, or from the time information was received regarding the existence of the child believed dead.280 If, however, the child dies prior to the ling of the action, it is believed that the action can no longer be brought.281 This action is not subject to waiver or renunciation and is transmitted, upon the death of the donor, to his legitimate or illegitimate
Art. 762, 1st par., NCC. Art. 762, 2nd par., NCC. 278 Art. 762, 3rd par., NCC. 279 Art. 768, 1st par., NCC. 280 Art. 763, 1st par., NCC. 281 3 Navarro Amandi 59, cited in II Tolentino, Civil Code, 1992 ed., 568.
276 277
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children and descendants,282 if the donor dies within the four-year prescriptive period.
[144.3] Failure to Comply With Charges
Article 764 of the New Civil Code provides, as follows: Art. 764. The donation shall be revoked at the instance of the donor, when the donee fails to comply with any of the conditions which the former imposed upon the latter. In this case, the property donated shall be returned to the donor, the alienations made by the donee and the mortgages imposed thereon by him being void, with the limitations established, with regard to third persons, by the Mortgage Law and the Land Registration Laws. This action shall prescribe after four years from the non-compliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donees heirs.
[144.3.1] Applicability of Article 764
While Article 764 uses the term conditions, what are actually being referred to in said article are the obligations or charges imposed by the donor on the donee. In his annotation of Article 764 of the Civil Code on donations, Arturo M. Tolentino, citing the well-known civilists such as Castan, Perez Gonzalez and Alguer, and Colin & Capitant, states clearly the context within which the term conditions is used in the law of donations, to wit: The word conditions in this article does not refer to uncertain events on which the birth or extinguishment of a juridical relation depends, but is used in the vulgar sense of obligations or charges imposed by the donor on the donee. It is used, not in its technical or strict legal sense, but in its broadest sense.283
Art. 763, 2nd par., NCC. Dissenting Opinion of J. Davide in Central Philippine University v. Court of Appeals, 246 SCRA 511, 520, citing II Tolentino, Civil Code, 1983 ed., 535.
282 283
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Clearly then, when the law and the deed of donation speaks of conditions of a donation, what are referred to are actually the obligations, charges or burdens imposed by the donor upon the donee and which would characterize the donation as onerous.284 Thus, an eminent civilist285 opines that the manner of revocation in Article 764 is applicable to onerous donation. In De Luna v. Abrigo,286 however, our Supreme Court made a ruling to the effect that Article 764 of the New Civil Code does not apply to onerous donations in view of the specic provision of Article 733 providing that onerous donations are governed by the rules on contracts. Invoking the provisions of Article 733, the Court further held that in determining the prescriptive period of an action to revoke an onerous donation the rules on contracts and the general rules on prescription and not the rules on donations are applicable to onerous donations.287 Applying the rule of the Supreme Court in De Luna v. Abrigo, which cited Article 1144(1) of the New Civil Code as legal basis, the prescriptive period of an action for revocation of an onerous donation by reason of non-compliance with the condition/obligation imposed is ten (10) years counted from the time within which the donee must comply with the conditions/obligations of the donation.
De Luna v. Abrigo 181 SCRA 150 (1990) In 1965, Prudencio de Luna donated a portion of his lot to the Luzonian Colleges, Inc. The donation was subject to certain terms and conditions and provided for the automatic reversion to the donor of the donated property in case of non-compliance. The donee failed to comply with the conditions of the donation. On April 9, 1971, however, the donor revived the donation in favor of the donee. As in the original deed of donation, the revived deed of donation also provided for the automatic reversion to the donor of the donated area in case of violation of the conditions thereof. In the revived deed, the donor imposed upon the donee the obligations to construct a chapel, a nursery and a kindergarten school in the donated property within ve years from the execution of the deed of donation. Claiming that the terms and conditions of the donation were not complied with by the donee, the heirs of the donor (who
Id., 521. See II Caguioa, Civil Code, 1966 ed., 421. 286 181 SCRA 150, 156 (1990). See also Secretary of Education v. Heirs of Runo Dulay, Sr., 480 SCRA 452. 287 Id.
284 285
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died on August 18, 1980) led an action for the cancellation of the donation on September 23, 1980. The trial court, however, dismissed the action on the ground that more than four (4) years had already lapsed from April 9, 1976 when the action was led. The trial court based its decision on Article 764 of the New Civil Code. The heirs of de Luna elevated the matter to the Supreme Court. In reversing the decision of the trial court, the Court explained It is the nding of the trial court, which is not disputed by the parties, that the donation subject of this case is one with an onerous cause. It was made subject to the burden requiring the donee to construct a chapel, a nursery and a kindergarten school in the donated property within ve years from execution of the deed of donation. Under the old Civil Code, it is a settled rule that donations with an onerous cause are governed not by the law on donations but by the rules on contracts, as held in the cases of Carlos v. Ramil, L-6736, September 5, 1911, 20 Phil. 183; Manalo v. de Mesa, L-9449, February 12, 1915, 29 Phil. 495. On the matter of prescription of actions for the revocation of onerous donation, it was held that the general rules on prescription applies. (Parks v. Province of Tarlac, supra.). The same rules apply under the New Civil Code as provided in Article 733 thereof which provides: Art. 733. Donations with an onerous cause shall be governed by the rules on contracts, and remuneratory donations by the provisions of the present Title as regards that portion which exceeds the value of the burden imposed. It is true that under Article 764 of the New Civil Code, actions for the revocation of a donation must be brought within four (4) years from the non-compliance of the conditions of the donation. However, it is Our opinion that said article does not apply to onerous donations in view of the specic provision of Article 733 providing that onerous donations are governed by the rules on contracts. In the light of the above, the rules on contracts and the general rules on prescription and not the rules on donations are applicable in the case at bar. xxx xxx xxx The trial court was therefore not correct in holding that the complaint in the case at bar is barred by prescription under Article 764 of the New Civil Code because Article 764 does not apply to onerous donations.
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As provided in the donation executed on April 9, 1971, compliance with the terms and conditions of the contract of donation, shall be made within ve (5) years from its execution. The complaint which was led on September 23, 1980 was then well within the ten (10) year prescriptive period to enforce a written contract (Article 1144[1], New Civil Code), counted from April 9, 1976. xxx xxx xxx
[COMMENT: The problem with the ruling in De Luna is that it renders inoperative the provision of Article 764 of the New Civil Code. If Article 764 indeed speaks not of conditions as the Civil Code denes it but rather of charges or burdens imposed by the donor upon the donee, in which case the donation being referred to in Article 764 is an onerous one, the provision of Article 764 must be considered an exception to the rule in Article 733 providing that onerous donations are governed by the rules on contracts. After all, it is a basic rule in statutory construction that when there is a conict between a general law and a special statute, the special statute should prevail since it evinces the legislative intent more clearly than the general statute and that the special law is to be taken as an exception to the general law in the absence of special circumstances forcing a contrary conclusion.288 It is obvious that the four-year prescriptive period specically provided for in Article 764 is to be considered as a special law compared to the general rules on prescription resorted in the De Luna case.]
[144.3.2] Effects of Revocation under Article 764
When the donation is revoked for failure to comply with the charges imposed on the donation, the property donated shall be returned to the donor.289 Any alienation or encumbrance made by the donee with respect to the donated property shall be considered void, subject, however, to the rights of a buyer or mortgagee in good faith.290 If the revocation is based upon noncompliance with any of the conditions imposed in the donation, the donee shall return not only the
Laguna Lake Authority v. Court of Appeals, 251 SCRA 42, 56. Art. 764, 2nd par., NCC. 290 Id.
288 289
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property but also the fruits thereof which he may have received after having failed to fulll the condition.291
[144.3.3] Prescriptive Period of Action Based under Article 764
The action for revocation based on Article 764 shall prescribe after four (4) years from the non-compliance with the condition.292 Such action is transmissible to the heirs of the donor and may be exercised against the heirs of the donee.
[144.3.4] Article 764 Does Not Apply When Donation Expressly Provides For Automatic Reversion
The prescriptive period in Article 764 does not apply when the deed of donation expressly provides for automatic reversion of the property donated in case of violation of the condition therein because in such a case a judicial declaration revoking the donation is not necessary.293 In other words, Article 764 of the New Civil Code is intended to provide a judicial remedy in case of non-fulllment or contravention of conditions specied in the deed of donation if and when the parties have not agreed on the automatic revocation of such donation upon the concurrence of the contingency contemplated therein.294 Instead, the applicable prescriptive period is ten (10) years as provided for in Article 1144(1), since the action is for the enforcement of a written contract.295
Roman Catholic Archbishop of Manila v. Court of Appeals 198 SCRA 300 (1991) In 1930, the spouses Eusebio de Castro and Martina Rieta, executed a deed of donation in favor of the Roman Catholic Archbishop of Manila covering a parcel of land located at Kawit, Cavite. The deed of donation provides that the donee shall not dispose or sell the property within a period of 100 years from the execution of the deed of donation, otherwise a violation of such condition would render ipso facto null and void the deed of donation and the property
Art. 768, 2nd par., NCC. Art. 764, 3rd par., NCC. 293 Roman Catholic Archbishop of Manila v. Court of Appeals, 198 SCRA 300. 294 Id., at p. 309. 295 Id.
291 292
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would revert to the estate of the donors. In 1980, and while still within the prohibited period, the Roman Catholic Bishop of Imus, sold the property to spouses Florencio and Soledad Ignao. As a consequence, the spouses were issued a new title to the property in their names on November 15, 1980. When the heirs of Eusebio Castro and Martina Rieta learned about the sale, they led an action for the nullication of the deed of donation, rescission of the sale in favor of the spouses Ignao and reconveyance of the property on November 29, 1984. The Roman Catholic Bishops of Manila and Imus, together with the spouses Ignao, contended that the cause of action had already prescribed based on Article 764 of the New Civil Code. The Court, however, ruled that the prescriptive period in Article 764 does not apply in the given case since the donation expressly provides for automatic reversion in case of violation of the conditions therein. The Court explained Although it is true that under Article 764 of the Civil Code an action for the revocation of a donation must be brought within four (4) years from the non-compliance of the conditions of the donation, the same is not applicable in the case at bar. The deed of donation involved herein expressly provides for automatic reversion of the property donated in case of violation of the condition therein, hence a judicial declaration revoking the same is not necessary, as aptly stated by the Court of Appeals: By the very express provision in the deed of donation itself that the violation of the condition thereof would render ipso facto null and void the deed of donation, WE are of the opinion that there would be no legal necessity anymore to have the donation judicially declared null and void for the reason that the very deed of donation itself declares it so. For where (sic) it otherwise and that the donors and the donee contemplated a court action during the execution of the deed of donation to have the donation judicially rescinded or declared null and void should the condition be violated, then the phrase reading would render ipso facto null and void would not appear in the deed of donation. In support of its aforesaid position, respondent court relied on the rule that a judicial action for rescission of a contract is not necessary where the contract provides that it may be revoked and cancelled for violation of any of its terms and conditions. It called attention to the holding that there is nothing in the law that prohibits the parties from entering into an agreement that a violation of the terms of the contract would cause its cancellation even without court intervention, and that it is not always necessary for the injured party to resort to court for rescission of the contract.
705
It reiterated the doctrine that a judicial action is proper only when there is absence of a special provision granting the power of cancellation. It is true that the aforesaid rules were applied to the contracts involved therein, but we see no reason why the same should not apply to the donation in the present case. Article 732 of the Civil Code provides that donations inter vivos shall be governed by the general provisions on contracts and obligations in all that is not determined in Title III, Book III on donations. Now, said Title III does not have an explicit provision on the matter of a donation with a resolutory condition and which is subject to an express provision that the same shall be considered ipso facto revoked upon the breach of said resolutory condition imposed in the deed therefor, as is the case of the deed presently in question. The suppletory application of the foregoing doctrinal rulings to the present controversy is consequently justied. The validity of such a stipulation in the deed of donation providing for the automatic reversion of the donated property to the donor upon non-compliance of the condition was upheld in the recent case of De Luna, et al. v. Abrigo, et al. It was held therein that said stipulation is in the nature of an agreement granting a party the right to rescind a contract unilaterally in case of breach, without need of going to court, and that, upon the happening of the resolutory condition or non-compliance with the conditions of the contract, the donation is automatically revoked without need of a judicial declaration to that effect. While what was the subject of that case was an onerous donation which, under Article 733 of the Civil Code is governed by the rules on contracts, since the donation in the case at bar is also subject to the same rules because of its provision on automatic revocation upon the violation of a resolutory condition, from parity of reasons said pronouncements in De Luna pertinently apply. The rationale for the foregoing is that in contracts providing for automatic revocation, judicial intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract already deemed rescinded by virtue of an agreement providing for rescission even without judicial intervention, but in order to determine whether or not the rescission was proper. When a deed of donation, as in this case, expressly provides for automatic revocation and reversion of the property donated, the rules on contract and the general rules on prescription should
706
PROPERTY
apply, and not Article 764 of the Civil Code. Since Article 1306 of said Code authorizes the parties to a contract to establish such stipulations, clauses, terms and conditions not contrary to law, morals, good customs, public order or public policy, we are of the opinion that, at the very least, that stipulation of the parties providing for automatic revocation of the deed of donation, without prior judicial action for that purpose, is valid subject to the determination of the propriety of the rescission sought. Where such propriety is sustained, the decision of the court will be merely declaratory of the revocation, but it is not in itself the revocatory act. On the foregoing ratiocinations, the Court of Appeals committed no error in holding that the cause of action of herein private respondents has not yet prescribed since an action to enforce a written contract prescribes in ten (10) years. It is our view that Article 764 was intended to provide a judicial remedy in case of non-fulllment or contravention of conditions specied in the deed of donation if and when the parties have not agreed on the automatic revocation of such donation upon the occurrence of the contingency contemplated therein. That is not the situation in the case at bar. [144.4] Revocation By Reason of Ingratitude
The donation may also be revoked at the instance of the donor, by reason of ingratitude in the following cases: (1) If the donee should commit some offense against the person, the honor or the property of the donor, or of his wife or children under his parental authority; (2) If the donee imputes to the donor any criminal offense, or any act involving moral turpitude, even though he should prove it, unless the crime or the act has been committed against the donee himself, his wife or children under his authority; (3) If he unduly refuses him support when the donee is legally or morally bound to give support to the donor.296 The action for revocation of the donation by reason of ingratitude may not be renounced in advance and the same prescribes within a period of one year counted from the time that the donor had knowledge of the fact and it was possible for him to bring the action.297 If it was
296 297
707
possible for the donor to bring the action but he did not institute the same, the right to le the same is not transmitted to his heirs even if he dies before the expiration of the one-year period.298 A fortiori, if upon the death of the donor the one-year period has not yet commenced to run because it was not possible for the donor to bring the action during his lifetime, the right to bring the same is transmitted to the heirs upon the donors death. Neither may the action be led against the heir of the donee upon the death of the latter,299 even if the latter should die before the expiration of the one-year period.
[144.5] Revocation By Reason Inofciousness
The concept of inofcious donations is discussed in supra 142.4.

[144.5.1] How to Determine Inofciousness of Donations
As discussed in supra 142.4, donations which exceeds the freely disposable portion of the donors estate and thus impairs the legitime of the compulsory heirs are inofcious and subject to reduction with regard to the excess.300 In determining whether the donation is inofcious or not, recourse must be had to the rules established by the Civil Code for the determination of the legitime and, by extension, of the disposable portion,301 taking into consideration the estimated net value of the donors property at the time of his death.302 These rules are set forth in Articles 908, 909 and 910 of the Code, on the basis of which the following stepby-step procedure has been outlined: (1) determination of the value of the property which remains at the time of the testators death; (2) determination of the obligations, debts, and charges which have to be paid out or deducted from the value of the property thus left; (3) the determination of the difference between the assets and the liabilities, giving rise to the hereditary estate;
Art. 770, NCC. Id. 300 Art. 771, NCC. 301 Vda. de Tupas v. br. XLIII, RTC of Negros Occidental, 144 SCRA 622, 626. 302 Id.
298 299
708
PROPERTY
(4) the addition to the net value thus found, of the value, at the time they were made, of donations subject to collation; and (5) the determination of the amount of the legitimes by getting from the total thus found the portion that the law provides as the legitime of each respective compulsory heir.303 Deducting the legitimes from the net value of the hereditary estate leaves the freely disposable portion by which the donation in question must be measured. If the value of the donation at the time it was made does not exceed that difference, then it must be allowed to stand. But if it does, the donation is inofcious as to the excess and must be reduced by the amount of said excess.304
[144.5.2] Status of Such Donation During Donors Lifetime
While a donation may be found to be inofcious at the time of the donors death, it takes effect nonetheless during the donors lifetime.305 And the mere fact that the donation turns out to be inofcious at the time of the donors death does not result in the automatic revocation of the donation. The provision of Article 752, in relation to Article 771, is not self-executory. In other words, if no action for revocation is led, or if it is led after the lapse of the prescriptive period, the donation is forever considered as valid.
[144.5.3] Who May Question Inofciousness of Donations
Only those who at the time of the donors death have a right to the legitime and their heirs and successors in interest may ask for the reduction or revocation of inofcious donations.306 In other words, persons who are not entitled to the legitime (therefore not considered as compulsory heirs), such as donees, devisees, legatees and creditors of the deceased donor, cannot ask for the reduction or revocation of inofcious donations.307 During the lifetime of the donor, the compulsory heirs who are entitled to ask for the reduction or revocation of inofcious
Id., 626. Id. 305 Art. 771, NCC. 306 Art. 772, 1st par., NCC. 307 Art. 772, 3rd par., NCC.
303 304
709
donations cannot renounce their right, whether the renunciation be done expressly or impliedly.308
[144.5.4] Prescriptive Period on the Ground of Inofciousness
The Civil Code species the following prescriptive periods of actions for the reduction or revocation of donations inter vivos: (1) four years, in cases of subsequent birth, appearance, recognition or adoption of a child;309 (2) four years, for non-compliance with conditions of the donation;310 (3) one year, for reason of ingratitude;311 and (4) at any time during the lifetime of the donor and his relatives entitled to support, for failure of the donor to reserve property for his or their support.312 Interestingly, donations the reduction of which hinges upon the allegation of impairment of legitime are not controlled by a particular prescriptive period. What, then, is the prescriptive period for an action for reduction or revocation of an inofcious donation? In Imperial v. Court of Appeals,313 the Supreme Court held that an action for reduction or revocation of an inofcious donation prescribes in ten (10) years following Article 1144 of the New Civil Code.314 From when shall the ten-year period be reckoned? Since the cause of action to enforce a legitime accrues only upon the death of the donor-decedent for it is only then that the net estate may be ascertained and on which basis, the legitimes may be determined, the ten year period commences to run only upon the death of the donor-decedent.315
[144.5.5] Effect of Reduction or Revocation of Inofcious Donations
When a donation is found to be inofcious, the same will be reduced to the extent necessary to satisfy the legitimes of compulsory
Art. 772, 2nd par., NCC. Art. 763, NCC. 310 Art. 764, NCC. 311 Art. 769, NCC. 312 Art. 750, NCC. 313 316 SCRA 393 (1999). 314 Also in Santos v. Alana, 467 SCRA 176, 182-183. 315 Imperial v. CA, supra, p. 403, citing Mateo v. Lagua, 29 SCRA 864. See also Santos v. Alana, supra.
308 309
710
PROPERTY
heirs who were prejudiced by such donation.316 If there are two or more donations and the disposable portion is not sufcient to cover all of them, those of the more recent date shall be suppressed or reduced with regard to the excess.317 If they are of the same date, they shall be reduced proportionately. As in the case of revocation of donations for any of the causes stated in Article 760 and by reason of ingratitude, when the donation is reduced because it is inofcious, the donee shall not return the fruits except from the ling of the complaint.318 oOo
Art. 771, NCC. Art. 773, NCC. 318 Art. 768, 1st par., NCC.
316 317
PROPERTY
By ELMER T. RABUYA
Professor of Civil Laws and Bar Reviewer, Arellano University School of Law, San Sebastian College, Jose Rizal University and Jurists Bar Review Center Author: The Law on Persons and Family Relations LLB., AUSL, Class Valedictorian A.B. Management Economics, Ateneo de Manila University
Published & Distributed by
856 Nicanor Reyes, Sr. St. Tel. Nos. 736-05-67 735-13-64 1977 C.M. Recto Avenue Tel. Nos. 735-55-27 735-55-34 Manila, Philippines www.rexpublishing.com.ph i
Philippine Copyright, 2008 by ELMER T. RABUYA
ISBN 978-971-23-5222-5
No portion of this book may be copied or reproduced in books, pamphlets, outlines or notes, whether printed, mimeographed, typewritten, copied in different electronic devices or in any other form, for distribution or sale, without the written permission of the author except brief passages in books, articles, reviews, legal papers, and judicial or other ofcial proceedings with proper citation. Any copy of this book without the corresponding number and the signature of the author on this page either proceeds from an illegitimate source or is in possession of one who has no authority to dispose of the same. ALL RIGHTS RESERVED BY THE AUTHOR
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PREFACE
This work is a product of the authors more than ten years experience in teaching the subject. It started as an outline, then turned into lecture notes and nally, into this book. It is designed for use primarily by law students and bar reviewees but law practitioners may likewise nd it as a useful guide in the area of Philippine Property Law. In discussing the subject, the author relied heavily on decisions promulgated by the Philippine Supreme Court. However, the illuminating opinions of recognized authorities in the subject matter, both local and foreign, have likewise been availed of. Some foreign decisions have likewise been cited in this work to throw light on areas where there is dearth of materials in the local sources. It is earnestly hoped that this book will be of help to all disciples of law. THE AUTHOR Manila, Philippines 10 March 2008
iii
iv
This book is lovingly dedicated To my wife, Atty. Melva P. Cobarrubias-Rabuya, To my son, John Darrel C. Rabuya, and To my parents, Martin, Sr. and Azucena.
vi
CONTENTS BOOK II PROPERTY, OWNERSHIP, AND ITS MODIFICATION

Title I. CLASSIFICATION OF PROPERTY PRELIMINARY PROVISIONS
Page 1. Introductory Concepts................................................................ [1.1] [1.2] [1.3] [1.4] [1.5] 2. [2.1] [2.2] Origin of the Word Property .................................... Concept of Things .................................................... Concept of Property under the Civil Code ............... Susceptibility to Appropriation.................................... Additional Requisites .................................................. Classication under Book II of the Civil Code ........... Importance of Classication ........................................ Chapter 1 IMMOVABLE PROPERTY 3. Immovable Property................................................................... [3.1] [3.2] 4. (A) [4.1] (B) [4.2] [4.3] No Denition under the Code...................................... Kinds of Immovable (Real) Property .......................... Lands and Roads.......................................................... Lands and roads ........................................................... Buildings...................................................................... Building Is Immovable By Incorporation.................... Buildings Are Always Immovable...............................
vii
1 1 2 3 3 4 5 5 5
Classication of Property...........................................................
8 8 8 9 9 9 9 9 10
Real Property under Article 415(1) ............................................
[4.4] [4.5] [4.6]
[4.7] (C) [4.8] 5. (A) [5.1] (B) [5.2] 6.
Instances Where Building Is Treated As Personal Property By the Parties ................................................ Doctrine of Estoppel; Navarro and Tumalad Cases .... Compared with the cases of Associated Ins. & Surety Co. v. Iya, Evangelista v. Alto Surety & Ins. Co., Inc., Manarang v. Olada and Piansay v. David .......................................................... Classication of property into real or personal property, a question of law the Standard Oil case .. Construction Adhered To the Soil ............................... Constructions of All Kinds Adhered To the Soil ......... Trees and Plants ........................................................... Trees and Plants ........................................................... Growing Fruits............................................................. Growing Fruits.............................................................
14 15
17 22 24 24 26 26 26 26 26 27 27 27 27 27 29 29 29 29 30 30 30 30 30 34 36 37 38
Real Property under Article 415(2) ............................................
Real Property under Article 415(3) ............................................ Everything attached to an immovable in a xed manner ....... [6.1] [6.2] [6.3] Attachment Must Be In A Fixed Manner .................... Need Not Be Attached By the Owner.......................... However, Intent of the Parties May Govern ................
7.
Real property under Article 415(4) ............................................ Statues, reliefs, paintings or other objects for use or ornamentation ........................................................................... [7.1] [7.2] Requisites .................................................................... Distinguish From Paragraph 3 .....................................
8.
Real Property under Article 415(5) ............................................ Machineries, receptacles, instruments or implements ............ [8.1] [8.2] [8.3] [8.4] [8.5] [8.6] [8.7] Immovable By Destination in Par. (5); Requisites ...... Properties Contemplated Under Paragraph 5 .............. They Must Be Placed By the Owner or By His Agent ............................................................... They Must Tend Directly To Meet the Needs of Said Industry or Work ............................................. They Must Be Essential And Principal Elements of the Industry or Works .............................. The Industry or Works Must Be Carried On In A Building or On A Piece of Land .................................. Application of the Doctrine of Estoppel In Article 415(5) ..........................................................
viii
9.
Real property under Article 415(6) ............................................ Animal houses, pigeon-houses, etc. .................................. [9.1] Animal Houses and Pigeon Houses, Etc. .................... [9.2] Animals Included......................................................... Real Property under Article 415(7): Fertilizers ...................... Real Property under Article 415(8) ............................................ Mines, quarries, slag dumps, waters ..................................... [11.1] [11.2] Mines, Quarries and Slag Dumps ................................ Waters ..........................................................................
41 41 41 41 41 42 42 42 42 42 42 42 43 43 43 45
10. 11.
12. 13.
Real Property under Article 415(9): Docks and Structures ........................................................................... Real Property under Article 415(10) .......................................... [13.1] [13.2] Rights as Property........................................................ How Rights Classied .................................................
14.
Denition of Real Property in Real Estate Taxation .................. [14.1] Concept of Real Property in Realty Taxation .............. [14.2] Machinery and Improvements Subject to Realty Tax ................................................................ Chapter 2 MOVABLE PROPERTY
15.
Movable Property....................................................................... [15.1] [15.2] [15.3] [15.4] [15.5] [15.6] No Precise Denition of the Term ............................... What May Be Considered Movable Property, In General .................................................................... Realty Considered as Personalty By Special Provisions of Law ........................................................ Forces of Nature .......................................................... Chose In Action ........................................................... Obligations In General ................................................ Consumable and Non-Consumable ............................. Distinguished From Fungible and Non-Fungible ........ Chapter 3 PROPERTY IN RELATION TO THE PERSON TO WHOM IT BELONGS
49 49 49 50 50 50 51 51 51 52
16.
Consumable and Non-consumable ............................................ [16.1] [16.2]
17.
Public Dominion and Private Ownership ..................................

ix
52
[17.1] [17.2] 18.
Public Dominion and Private Ownership .................... Classication of Property From the Point of View of Ownership.................................................. Kinds of Property of Public Dominion Pertaining To the State .................................................................. Public Dominion, as Referring To Public Ownership .................................................................. Public Dominion, as Referring To State Ownership .................................................................. Public Ownership Distinguished From State Ownership ....................................................... Intent to Devote, Sufcient.......................................... Public Use and Public Service, Distinguished ............ Enumeration of Properties of the State for Public Use .......................................................... Roads ........................................................................... Roads ........................................................................... Canals .......................................................................... Canals .......................................................................... Rivers ........................................................................... River Is A Composite Term ...................................... Natural Bed of A River ................................................ Extent of River Bed ..................................................... Banks of Rivers ........................................................... Accretion on Riverbanks ............................................. Ports ............................................................................. Ports ............................................................................. Shores .......................................................................... Shore, Dened ............................................................. Shore, Property of Public Dominion ........................... Accretions on Seashore ............................................... Foreshore Lands .......................................................... Part of Public Dominion .............................................. Lakes............................................................................ Ownership of Lakes ..................................................... Natural Bed of Lakes, Dened .................................... Others of Similar Character ..................................... Creeks ..........................................................................
52 53 53 53 53 54 55 55 56 57 57 58 58 58 58 60 60 60 61 62 63 63 63 64 64 65 65 66 66 68 68 68 69 69 70
Property of State: Public Dominion ........................................... [18.1] [18.2] [18.3] [18.4] [18.5] [18.6]
19.
Property of Public Dominion: For Public Use ........................... [19.1] (A) [19.2] (B) [19.3] (C) [19.4] [19.5] [19.6] [19.7] [19.8] (D) [19.9] (E) [19.10] [19.11] [19.12] (F) [19.13] (G) [19.14] [19.15] (H) [19.16]
20.
Property of Public Dominion: For Public Service .....................
21.
Property of Public Dominion: For the Development of National Wealth ..................................................................... [21.1] (A) [21.2] [21.3] [21.4] (B) [21.5] [21.6] [21.7] The Regalian Doctrine and State Ownership of Natural Resources ................................................... Natural Resources ........................................................ Fishponds ..................................................................... Watershed Reservation ................................................ Submerged Lands ........................................................ Lands of the Public Domain ........................................ Classication ............................................................... Classication of Public Lands, Prerogative of the Executive ........................................................... When Public Lands Classied As Patrimonial Property ....................................................................... They Are Outside the Commerce of Man.................... They Are Not Susceptible To Private Appropriation and Acquisitive Prescription ................ They Are Not Subject To Attachment and Execution .............................................................. They Cannot Be Burdened With Voluntary Easements .................................................................... Examples of Patrimonial Property............................... Disposition of Patrimonial Property ............................ Not Susceptible To Acquisitive Prescription ...............
70 71 73 73 73 74 74 74 74 75 76 76 77 78 79 80 80 82 82 84 87 87 88 88 90 94
22.
Characteristics of Properties of Public Dominion ..................... [22.1] [22.2] [22.3] [22.4]
23.
Patrimonial Property of the State ............................................... [23.1] [23.2] [23.3]
24. 25.
Conversion: From Public Dominion to Patrimonial Property ...................................................................................... Property of Provinces, Cities and Municipalities ...................... [25.1] Classication of Properties of Political Subdivisions ................................................................
26.
Property for Public Use of Provinces, Cities and Municipalities...................................................................... [26.1] [26.2] [26.3] Governed By Same Principles as Property of Public Dominion ..................................................... Provincial Roads, City Streets and Municipal Streets ......................................................... Squares, Fountains, Public Waters, Promenades, Etc. .........................................................
xi
27.
Patrimonial Property of Political Subdivisions .......................... [27.1] Reclaimed Lands Belonging to Political Subdivisions ...
96 97 99 101
28. Other Classication.................................................................... 29. Private Property .........................................................................
Title II. OWNERSHIP

Chapter 1 OWNERSHIP IN GENERAL 30. Concept of Ownership ............................................................... [30.1] [30.2] [30.3] [30.4] [30.5] 31. 32. 33. 34. Property and Ownership, Distinguished ...................... Ownership, Dened ..................................................... Ownership Is A Real Right .......................................... Other Real Rights Aside From Ownership .................. Objects of Ownership .................................................. 103 103 104 105 106 106 107 107 108 108 109 109 110 115 115 115 116 117 120 122 122 126 127 134 137 137 139
Attributes of Ownership............................................................. Right to Enjoy ............................................................................ [32.1] Right To Use and Abuse .............................................. Right to Dispose......................................................................... Right to Recover ........................................................................ [34.1] [34.2] Right to Possession ...................................................... Actions for Recovery of Possession ............................ Statement of the Doctrine ............................................ Who May Invoke the Doctrine .................................... When May the Doctrine Be Invoked ........................... Defense of Property as Justifying Circumstance ........
35.
Doctrine of Self-help.................................................................. [35.1] [35.2] [35.3] [35.4]
36. 37.
Right to Enclose or Fence .......................................................... Limitations on Ownership.......................................................... [37.1] [37.2] [37.3] [37.4] General Limitations Pursuant To the Exercise of the Inherent Powers of the State.............................. Specic Limitations Imposed By Law ........................ Inherent Limitations Arising From Conicts With Other Similar Rights ........................................... Limitations Imposed By the Owner Himself............... Presumption of Ownership .......................................... Requisites of Accion Reivindicatoria ..........................
xii
38.
Recovery of Property ................................................................. [38.1] [38.2]
39.
Right to Sub-surface and Airspace ............................................. [39.1] [39.2] [39.3] Right To the Sub-Surface or Subsoil .......................... Right to Hidden Treasure............................................. Right to the Airspace ................................................... Chapter 2 RIGHT OF ACCESSION GENERAL PROVISIONS
142 143 148 158
40.
Accession ................................................................................... [40.1] [40.2] Denition and Concept ................................................ Kinds of Accession ...................................................... Section 1. Right of Accession with Respect to What is Produced by Property
168 168 169
41.
Accesion Discreta ...................................................................... [41.1] [41.2] [41.3] [41.4] Basic Rule .................................................................... Exceptions to the Rule ................................................. Kinds of Fruits ............................................................. Existence of Fruits, When Recognized........................
170 170 170 171 173 174 174 174 175 175
42.
Production Expenses .................................................................. [42.1] [42.2] [42.3] [42.4] Situation Contemplated in Article 443 ........................ Applicability of Article 443 ......................................... Article 443 Does Not Apply To Pending Fruits .......... When Refundable ........................................................ Section 2. Right of Accession with Respect to Immovable Property
43.
Accesion Continua ..................................................................... [43.1] [43.2] A. Presupposes Absence of Agreement ............................ Basic Principles Governing Accesion Continua ..........
176 176 177
INDUSTRIAL ACCESSION 178 178 179 180 181 Three Forms................................................................. Building, Planting or Sowing on Ones Own Land ..... Controversial Cases .....................................................
44.
Industrial Accession ................................................................... [44.1] [44.2] [44.3]
45.
Using Materials Belonging To Another .....................................

xiii
[45.1] [45.2] 46. 47.
Situation Contemplated in Article 447 ........................ Determining the Legal Consequences .........................
181 181 187 187 187 208 208 219 222 226 226 226 228 229 229 229 230 231 231 231 232
Building With Ones Own Materials on the Land of Another .................................................................................. Both Acted In Good Faith .......................................................... [47.1] [47.2] [47.3] [47.4] [47.5] Concept of Good Faith ................................................ Good Faith of the Landowner...................................... Legal Effects Where Both Parties Are In Good Faith ............................................................... Option to Appropriate .................................................. Option To Sell the Land............................................... Concept of Bad Faith ................................................... Legal Consequences; Alternative Rights of the Landowner ......................................................... Limited Rights of Builder, Planter or Sower in Bad Faith ................................................................. Rules That Will Govern If Both Parties Acted In Bad Faith ................................................................. Bad Faith of the Landowner ........................................
48.
Landowner In Good Faith; Builder In Bad Faith ....................... [48.1] [48.2] [48.3]
49.
Both Acted In Bad Faith ............................................................ [49.1] [49.2]
50. 51.
Landowner In Bad Faith; Builder In Good Faith ....................... Building on Anothers Land Using Anothers Materials ........... [51.1] [51.2] [51.3] Situation Contemplated in Art. 455 ............................. If the Owner of the Materials Acted in Bad Faith ................................................................. If the Owner of the Material Acted in Good Faith ...................................................................
B. 52. 53.
NATURAL ACCESSION 233 233 234 234 234 234 235 241 Four Forms .................................................................. Denition ..................................................................... Riparian Owners Distinguished From Littoral Owners ............................................................ Rule on Alluvion.......................................................... Requisites of Alluvion ................................................. Right of Riparian Owner to Alluvium Is Ipso Jure .....
xiv
Natural Accession ...................................................................... [52.1] [53.1] [53.2] [53.3] [53.4] [53.5] Alluvion .....................................................................................
[53.6] 54. [54.1] [54.2] [54.3] [54.4] 55. [55.1] [55.2] [55.3] [55.4] [55.5] [55.6] 56. [56.1]
Exception to the Rule on Alluvion .............................. Denition ..................................................................... Comparison With Alluvion .......................................... Rule on Avulsion ......................................................... Avulsion With Respect To Uprooted Trees ................. Effect of Change of Course of River ........................... Applicability of Article 461 ......................................... Extension of Ownership Ipso Jure .............................. Restoration of the River to Its Former Course ............ When River Dries Up .................................................. Status of New Bed ....................................................... Three Kinds of Islands................................................. Section 3. Right of Accession with Respect to Movable Property
242 243 243 243 244 244 245 245 246 248 249 250 250 251 251
Avulsion .....................................................................................
Change of Course of River ........................................................
Formation of Island ....................................................................
57.
Adjunction or Conjunction ........................................................ [57.1] [57.2] [57.3] [57.4] [57.5] Forms of Accesion Continua With Respect To Movables ................................................................ Adjunction or Conjunction, Explained ........................ How It Takes Place ...................................................... Legal Effects of Adjunction ......................................... Tests In Determining The Principal ............................. Commixtion or Confusion, Explained ......................... Legal Effects of Commixtion or Confusion ................ Specication, Explained .............................................. Legal Effects ................................................................ Chapter 3 QUIETING OF TITLE
255 255 255 255 256 258 259 259 259 261 261 261
58.
Commixtion or Confusion ......................................................... [58.1] [58.2]
59.
Specication............................................................................... [59.1] [59.2]
60.
Quieting of Title ......................................................................... [60.1] [60.2] [60.3] Action to Quiet Title .................................................... Requisites of Action to Quiet Title .............................. Prescription ..................................................................
xv
262 262 264 267
Chapter 4 RUINOUS BUILDINGS AND TREES IN DANGER OF FALLING 61. Ruinous Buildings and Falling Trees ......................................... [61.1] [61.2] [61.3] Exercise of Police Power ............................................. Obligations of Owners of Ruinous Buildings ............. Obligations of Owners of Falling Trees ...................... 269 269 270 270
Title III. CO-OWNERSHIP

62. In General................................................................................... [62.1] [62.2] [62.3] [62.4] [62.5] [62.6] [62.7] [62.8] 63. [63.1] [63.2] [63.3] 64. [64.1] [64.2] [64.3] [64.4] 65. [65.1] [65.2] [65.3] [65.4] 66. [66.1] [66.2] [66.3] Denition ..................................................................... Requisites of Co-ownership ........................................ Dual Nature of Ownership in Co-Ownership .............. Effect of Division or Partition ..................................... A Co-Owner Cannot Claim A Denite Portion ........... Distinguished From Partnership .................................. Sources of Co-ownership ............................................ Rules Governing Co-Ownership ................................. Determining the Ideal Share of Each Co-Owner ......... Determining the Share In Benets and Charges .......... Any Stipulation To The Contrary Is Void .................... Nature of Co-Owners Right Over the Entire Thing or Right ............................................................. Use of the Thing Owned in Common .......................... Limitations on the Right to Use................................... Determining the Purpose ............................................. Scope of Term Ejectment ......................................... Action Must Be Instituted For All ............................... Action Available Even Against A Co-Owner .............. Effect of Judgment Upon the Other Co-Owners ......... Right To Demand Contribution ................................... When Notice Required ................................................ Effect of Failure to Comply With the Notice Requirement ................................................................
xvi
272 272 272 274 274 275 277 279 280 281 281 282 282 283 283 283 284 289 289 289 290 292 295 296 296 296 297
Share in Benets and Charges ...................................................
Right Over the Entire Property ..................................................
Action in Ejectment ...................................................................
Expenses for Preservation ..........................................................
[66.4] [66.5] [66.6] [66.7] 67. [67.1] [67.2] [67.3] [67.4] [67.5] [67.6] 68. [68.1] [68.2] [68.3] [68.4] 69. [69.1] [69.2] [69.3] 70.
Renunciation By A Co-Owner ..................................... Requirement of Consent in Renunciation.................... Limitation on the Exercise of the Option of Renunciation ........................................................... Includes Payment of Taxes .......................................... Applicability of Article 490 ......................................... Rules Governing Necessary Expenses ........................ Condominium, Dened ............................................... Nature of Ownership in Condominium Projects ......... Rules Governing Expenses on the Common Areas .......................................................................... Assessment as Lien Upon Unit.................................... Rule as to Acts of Alterations .................................. Meaning of Act of Alteration ................................... Form of Consent .......................................................... Effect of Unauthorized Alterations .............................. Rule as to Acts of Administration ............................ Meaning of Acts of Administration ......................... No Majority or Act Of Majority Is Seriously Prejudicial .................................................................... Nature of Co-Owners Right Over His Pro Indiviso Share .............................................................. Effect of Alienation or Mortgage of Undivided Share ...................................................... Alienation of Denite or Concrete Portion ................. Alienation of Entire Co-owned Property ..................... Applicability of Doctrine of Buyer in Good Faith ................................................................. Sale of Conjugal Property Without the Consent of the Other Spouse ..................................................... Sale of Community Property Without the Consent of Other Spouse ............................................. Co-ownership in Article 147 of the Family Code ....... Legal Redemption in Co-Ownership ........................... Requisites For the Exercise of Legal Redemption ......
xvii
297 298 298 299 300 300 300 301 301 301 302 303 303 304 304 304 305 305 305 306 306 306 307 307 312 313 316 317 318 318 318 319
Different Stories Belonging to Different Owners ......................
Acts of Alteration .......................................................................
Acts of Administration ...............................................................
Right Over the Ideal Share ......................................................... [70.1] [70.2] [70.3] [70.4] [70.5] [70.6] [70.7] [70.8]
71.
Right of Legal Redemption........................................................ [71.1] [71.2]
[71.3] [71.4] [71.5] [71.6] [71.7] [71.8] 72. [72.1] [72.2] [72.3] [72.4] 73.
Presupposes Existence of Co-Ownership .................... Share Must Be Sold To A Third Party ......................... A Co-Owner Has Right of Redemption, Not Pre-Emption .......................................................... Period of Redemption .................................................. Written Notice Not Necessary If There Is Actual Notice ........................................................... Article 1620 Distinguished From Article 1088 ........... Causes of Extinguishment of Co-ownership ............... Merger ......................................................................... Destruction of Thing or Lost of Right ......................... Redemption By One Co-Owner of the Entire Property............................................................. General Rule: Prescription Does Not Lie .................... Exception: When Co-Ownership Is Repudiated .......... Requisites .................................................................... Denition ..................................................................... Right of Co-Owner to Demand Partition..................... Period of Prescription .................................................. Action For Partition, Explained ................................... When Partition Not Available ...................................... When thing is essentially indivisible ........................... Legal Effects of Partition .............................................
319 320 320 320 321 321 322 322 322 323 323 328 328 328 329 331 331 331 332 341 342 343 347
Extinguishment of Co-ownership ..............................................
Prescription ................................................................................ [73.1] [73.2] [73.3]
74.
Partition ...................................................................................... [74.1] [74.2] [74.3] [74.4] [74.5] [74.6] [74.7]
Title IV. SOME SPECIAL PROPERTIES

Chapter 1 WATERS 75. 76. Governing Laws on Waters ........................................................ Ownership of Waters .................................................................. [76.1] [76.2] 77. State Ownership of Waters .......................................... Subterranean or Ground Waters................................... 350 351 352 353 355
Appropriation of Waters............................................................. Chapter 2 MINERALS
78.
Governing Laws .........................................................................

xviii
375
Chapter 3 TRADEMARKS AND TRADE NAMES 79. Governing Laws ......................................................................... 376
Title V. POSSESSION
Chapter 1 POSSESSION AND THE KINDS THEREOF 80. Concept of Possession................................................................ [80.1] [80.2] [80.3] [80.4] [80.5] 81. 82. 83. Denition ..................................................................... Elements of Possession................................................ Possession as Fact and Right ....................................... Degrees of Possession ................................................. Classication of Possession under the Civil Code ...... 377 377 378 380 381 381 382 388 392 392 397 399 402
Possession in Ones Own Name or In the Name of Another ..... Possession in the Concept of Owner or Holder ......................... Possession in Good Faith or in Bad Faith .................................. [83.1] [83.2] [83.3] [83.4] Concept of Possessor In Good Faith; In Bad Faith ..... Mistake of Law ............................................................ Presumption of Good Faith ......................................... Object of Possession .................................................... Chapter 2 ACQUISITION OF POSSESSION
84.
Acquisition of Possession .......................................................... [84.1] [84.2] [84.3] [84.4] [84.5] [84.6] [84.7] [84.8] [84.9] Modes of Acquiring Possession................................... Requisites for acquisition of possession ...................... Material Occupation .................................................... Doctrine of Constructive Possession ........................... Subjection to Action of Will ........................................ Proper Acts and Legal Formalities .............................. Acquisition of Possession Over Rights ....................... By Whom Possession Acquired................................... Capacity to Acquire Possession ................................... Effect of Succession .................................................... Consequences of Wrongful Possession By Decedent ................................................................
xix
404 404 404 405 406 407 408 408 408 409 410 410 411
85.
Transfer of Possession Through Succession .............................. [85.1] [85.2]
86.
Instances Where Possession Is Not Acquired ............................ [86.1] [86.2] [86.3] Use of Force or Intimidation ....................................... Acts Merely Tolerated ................................................. Clandestine and Unknown Acts...................................
414 414 416 419 420
87.
Conict Over Possession de Facto ............................................ Chapter 3 EFFECTS OF POSSESSION
88.
Right to Protection of Possessors............................................... [88.1] [88.2] [88.3] Protects Every Kinds of Possessors ............................. Actions to Recover Possession .................................... Writ of Preliminary Mandatory Injunction .................. Presumption of Just Title ............................................. Meaning of Just Title ............................................... In Relation to Acquisitive Prescription........................
424 424 425 426 428 429 429 430 431 433 434 434 434 435 436 436 437 437 437 438 438 439 440 440 441 441
89.
Possession in the Concept of Owner.......................................... [89.1] [89.2] [89.3]
90. 91.
Co-possession ............................................................................ Right of Possessors to Fruits ...................................................... I. A. Possessor in Good Faith Fruits Already Received ................................................... Rule.............................................................................. Interruption of Good Faith........................................... When Fruits Considered Received........................... Pending Fruits .............................................................. Rule.............................................................................. Rules Do Not Apply to Trees.......................................
[91.1] [91.2] [91.3] B. [91.4] [91.5] II. A. B. [91.7] [91.8] 92. [92.1] [92.2] [92.3]
Possessor in Bad Faith Fruits Already Received ................................................... Rule.............................................................................. Pending Fruits .............................................................. Rule.............................................................................. Rule With Respect to Trees ......................................... Kinds of Expenses ....................................................... Right of Possessors to Necessary Expenses ................ Right of Possessors to Useful Expenses ......................
xx
[91.6]
Right to Necessary, Useful and Ornamental Expenses ..............
[92.4] [92.5] [92.6] 97. 98. 99.
Right of Possessors to Expenses For Pure Luxury ..... Rule on Improvement Caused by Nature .................... Improvements Which Ceased To Exist........................
445 446 446 447 448 449 449 451 451 451 453 454 454 455 464 465 465 466
Liability of Possessors for Loss or Deterioration ...................... Presumption of Continuity of Possession .................................. Modes of Losing Possession ...................................................... [99.1] [99.2] [99.3] [99.4] Abandonment .............................................................. Assignment .................................................................. Destruction or Loss of the Thing ................................. Possession By Another ................................................
100. Rule With Respect to Misplaced (Mislaid) Movables ............... 101. Possession of Movables ............................................................. [101.1] Equivalent to Title ....................................................... [101.2] Exceptions to Irrevindicability .................................... [101.3] Cases Where There Is No Recovery ............................ 102. Possession of Animals................................................................ [102.1] Kinds of Animals Under the Code............................... [102.2] When Possession Is Considered Lost ..........................
Title VI. USUFRUCT

Chapter 1 USUFRUCT IN GENERAL 103. Usufruct in General .................................................................... [103.1] Concept ........................................................................ 104. Constitution of Usufruct ............................................................ [104.1] Manner of Creation...................................................... [104.2] Other Classications of Usufruct ................................ [104.3] Object of Usufruct ....................................................... Chapter 2 RIGHTS OF THE USUFRUCTUARY 105. Rights of Usufructuary............................................................... [105.1] [105.2] [105.3] [105.4] Rights Included In Usufruct ........................................ Right to the Fruits ........................................................ Alienation of the Usufructuary Right .......................... Right to Useful and Ornamental Improvements ......... 476 476 481 482 483 467 467 470 470 471 472
xxi
Chapter 3 OBLIGATIONS OF THE USUFRUCTUARY 106. Obligations of Usufructuary ...................................................... 107. Obligations at the Commencement of Usufruct......................... [107.1] In General .................................................................... [107.2] Consequences of Failure to Comply with the Foregoing Obligations ........................................... [107.3] Exemptions From The Obligation To Give Security ... [107.4] Instances Where Usufructuary May Be Relieved of the Foregoing Obligations........................ 108. Obligations During the Life of Usufruct .................................... [108.1] Ordinary and Extraordinary Repairs ........................... [108.2] Payment of Annual Charges and Taxes ....................... [108.3] Obligation to Notify Owner of Prejudicial Acts .......... Chapter 4 EXTINGUISHMENT OF USUFRUCT 109. Extinguishment of Usufruct ....................................................... [109.1] Death of Usufructuary ................................................. [109.2] Expiration of Period or Fulllment of Resolutory Condition ..................................................................... [109.3] Loss of the Thing ......................................................... [109.4] Effect of Bad Use ........................................................ 110. Obligations of Usufructuary Upon Termination of Usufruct ..... 496 497 498 499 500 500 486 486 486 486 487 488 490 491 493 494
Title VII. EASEMENTS OR SERVITUDES

Chapter 1 EASEMENTS IN GENERAL 111. Concept ...................................................................................... [111.1] Denition ..................................................................... 112. Kinds of Easements.................................................................... [112.1] [112.2] [112.3] [112.4] [112.5] Real and Personal (Easement) Servitudes ................... Legal and Voluntary Easement .................................... Continuous and Discontinuous Easements .................. Apparent and Non-Apparent Easements ..................... Positive and Negative Easement ................................. 501 501 506 506 509 510 510 511 512
113. Characteristics of Easements .....................................................

xxii
[113.1] Inherence or Intransmissibility .................................... [113.2] Indivisibility ................................................................ 114. Acquisition of Easements .......................................................... [114.1] [114.2] [114.3] [114.4] Modes of Acquiring Easements ................................... Acquisition Thru Prescription ..................................... Proof of Easement ....................................................... Easement By Apparent Sign or Legal Presumption ....
512 514 516 516 520 523 524 528 528 529 530 532 532 533 534 535 535
115. Rights and Obligations of the Owner of Dominant Estate ........ [115.1] Effect of Easement Upon The Rights of Servient Owner........................................................ [115.2] Extent of Rights Granted to the Holder of Easement ................................................................. [115.3] Limitations Upon The Rights of Owner of Dominant Estate ...................................................... 116. Extinguishment of Easements .................................................... [116.1] [116.2] [116.3] [116.4] [116.5] Merger ......................................................................... Non-User ..................................................................... Impossibility of Use .................................................... Renunciation ................................................................ Redemption.................................................................. Chapter 2 LEGAL EASEMENTS 117. Legal Easement, In General ....................................................... 118. Easement Relating to Waters ..................................................... [118.1] [118.2] [118.3] [118.4] [118.5] Easement of Drainage of Waters ................................. Easement of Public Use ............................................... Easement For Drawing Waters .................................... Easement of Abutment of Dam ................................... Easement of Aqueduct .................................................
535 537 538 539 539 539 540 543 543 543 544 545 547 548 549
119. Easement of Right of Way ......................................................... [119.1] Concept ........................................................................ [119.2] Manner of Acquisition; Requisites of Compulsory Right of Way ................................................................ [119.3] Isolation of the Dominant Estate ................................. [119.4] Inadequacy of the Outlet to Public Highway .............. [119.5] At the Point Least Prejudicial .............................. [119.6] Payment of Indemnity ................................................. [119.7] Width of the Easement.................................................
xxiii
[119.8] Who May Demand For Compulsory Right of Way ..... [119.9] Extinguishment of Right of Way ................................. 120. Easement of Party Wall .............................................................. [120.1] Nature of Party Wall .................................................... [120.2] Presumption of Existence of Easement of Party Wall ................................................................ [120.3] Rights and Obligations of Each Co-Owner of Party Wall ................................................................ 121. Easement of Light and View ...................................................... [121.1] Concept ........................................................................ [121.2] Making an Opening in Party Wall ............................... [121.3.] Acquisition of Easement of Light and View Through Prescription ................................... [121.4] Observance of Certain Distances................................. [121.5] Opening Where Distances Not Observed .................... 122. Easement of Drainage of Buildings ........................................... [122.1] Concept ........................................................................ [122.2] Ownership of Rain Waters ........................................... [122.3] Legal Easement of Drainage ....................................... 123. Intermediate Distances for Planting ........................................... [123.1] Distance to Be Observed in Case of Planting Trees .......................................................... [123.2] Right To Cut Branches and Roots ............................... [123.3] Fruits Naturally Falling ............................................... 124. Legal Easement of Lateral and Subjacent Support .................... [124.1] Concept ....................................................................... [124.2] Easement of Lateral and Subjacent Support ................ 125. Voluntary Easement ................................................................... [125.1] Concept ........................................................................ [125.2] Establishment of Easement on Property Held in Usufruct .......................................................... [125.3] Easement Over A Co-Owned Property ........................ [125.4] Abandonment of Property ...........................................
549 550 552 552 553 554 557 557 557 557 557 558 560 560 560 560 562 562 562 563 564 564 564 565 565 566 566 567
Title VIII. NUISANCE

126. Concept ...................................................................................... [126.1] Denition ..................................................................... [126.2] Nuisance and Tort ........................................................ [126.3] Distinguished From Negligence ..................................
xxiv
568 568 569 570
127. Classications of Nuisance ........................................................ [127.1] Public and Private Nuisance ........................................ [127.2] Nuisance Per Se and Per Accidens .............................. [127.3] Doctrine of Attractive Nuisance .................................. 128. Remedies .................................................................................... [128.1] Criminal Prosecution ................................................... [128.2] Abatement of Nuisance ............................................... [128.3] Civil Action for Damages ............................................
570 570 585 585 587 588 588 591
Title IX. REGISTRY OF PROPERTY
BOOK III DIFFERENT MODES OF ACQUIRING OWNERSHIP

PRELIMINARY PROVISION
129. Modes of Acquisition of Ownership and Real Rights ............... [129.1] In General .................................................................... [129.2] Original and Derivative Modes ................................... [129.3] Loss of Ownership ....................................................... 130. Law as Mode .............................................................................. 131. Tradition or Delivery ................................................................. [131.1] [131.2] [131.3] [131.4] [132.1] [132.2] [132.3] [132.4] [132.5] Mode and Title, Distinguished .................................... Contract Only Constitutes Title ................................... Concept of Tradition; Requisites ................................. Kinds of Tradition........................................................ Concept and Requisites ............................................... Two Kinds: Ordinary and Extraordinary ..................... Period of Prescription .................................................. When Prescription Does Not Lie ................................. Capacity to Acquire Ownership By Acquisitive Prescription .............................................. 593 593 594 594 595 595 595 596 597 602 608 608 609 610 611 613
132. Acquisitive Prescription .............................................................
Title I. OCCUPATION
133. Occupation ................................................................................. [133.1] Concept and Requisites ............................................... [133.2] Animals as Object of Appropriation ............................
xxv
616 616 616
[133.3] Hidden Treasure........................................................... [133.4] Abandoned, Mislaid and Lost Property .......................
619 619
Title II. INTELLECTUAL CREATION

134. Intellectual Creation ................................................................... [134.1] Denition of Intellectual Property ............................... [134.2] When Ownership Is Acquired ..................................... [134.3] Ownership of Letters ................................................... 622 622 623 623
Title III. DONATION

Chapter 1 NATURE OF DONATIONS 135. Denition and Concept .............................................................. [135.1] [135.2] [135.3] [135.4] [135.5] Denition ..................................................................... Essential Elements of Donation................................... Donative Intent or Animus Donandi ............................ Donation as Contract................................................ Donation as Mode of Acquisition of Ownership ..... 625 625 625 627 630 632 634 634 635 647 654 654 655 655 659 659
136. Classications of Donation ........................................................ [136.1] In General .................................................................... [136.2] Donations Mortis Causa .............................................. [136.3] Donation Inter Vivos .................................................... 137. Perfection of Donation ............................................................... [137.1] [137.2] [137.3] [137.4] [137.5] When Perfected ........................................................... Acceptance is Indispensable ........................................ Effects of Acceptance .................................................. Manner and Form of Acceptance ................................ Time For Making Acceptance ..................................... Chapter 2 PERSONS WHO MAY GIVE OR RECEIVE A DONATION 138. Capacity to Make Donations ...................................................... [138.1] Who May Donate ........................................................ [138.2] Determination of Donors Capacity ............................ [138.3] Legal Impossibility of Double Donations ...................
xxvi
661 661 662 664
139. Capacity of the Donee ................................................................ [139.1] Juridical Capacity, Sufcient ....................................... [139.2] Manner of Acceptance ................................................. [139.3] Persons Disqualied to Become Donees ..................... 140. Formalities in Donation ............................................................. [140.1] [140.2] [140.3] [140.4] In General .................................................................... Applicability of Articles 748 and 749, NCC ............... Form of Donations of Personal Property ..................... Form of Donations of Real Property ........................... Chapter 3 EFFECT OF DONATIONS AND LIMITATIONS THEREON 141. Extent of Donation ..................................................................... [141.1] [141.2] [142.3] [142.4] [143.1] [143.2] [143.3] [143.4] [143.5] [143.6] In General .................................................................... Future Property Cannot Be Donated ........................... Donor Must Reserve For Himself and Relatives ......... Donation Must Not Be Inofcious .............................. Donations Made to Several Donees Jointly................. No Warranty Against Eviction ..................................... Reservation of Power to Dispose ................................ Separate Donation of Ownership and Usufruct ........... Donor May Provide for Reversion .............................. Payment of Donors Debts .......................................... Chapter 4 REVOCATION AND REDUCTION OF DONATIONS 144. Reduction or Revocation of Donations ...................................... [144.1] [144.2] [144.3] [144.4] [144.5] In General .................................................................... Subsequent Appearance of Children ........................... Failure to Comply With Charges ................................. Revocation By Reason of Ingratitude.......................... Revocation By Reason Inofciousness .......................
665 665 666 668 672 672 673 673 675
684 684 684 687 688 690 690 691 691 692 692 692
143. Effect of Donations ....................................................................
695 695 696 699 706 707
xxvii

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1

BOOK II PROPERTY, OWNERSHIP, AND ITS MODIFICATION

See Art. 414, NCC.

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Preliminary Provisions

Concept of Property under the Civil Code

See Art. 1347, NCC. See Arts. 419 to 425, NCC.

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Preliminary Provisions

Art. 1132, NCC.

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

Fertilizer actually used on a piece of land;

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

Doctrine of Estoppel; Navarro and Tumalad Cases

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

103 Phil. 401.

Supra. 99 Phil. 108 (1956).

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

(C) Construction Adhered To the Soil

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

Trees and Plants

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

Tsai v. CA, 366 SCRA 324 (2001).

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

Supra. 61 Phil. 709 (1935).

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

61 Phil. 663. 6 SCRA 530, 537.

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

Id. Id., 201.

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

9. Real property under Article 415(6) Animal houses, pigeon-houses, etc.

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Immovable Property

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Movable Property

15. Movable Property

Art. 416(4), NCC. Art. 416(1), NCC.

[15.3] Realty Considered as Personalty By Special Provisions of Law

PROPERTY, OWNERSHIP, AND ITS MODIFICATION CLASSIFICATION OF PROPERTY Movable Property

16. Consumable and Non-consumable

[16.2] Distinguished From Fungible and Non-Fungible

17. Public Dominion and Private Ownership

[17.2] Classication of Property From the Point of View of Ownership

18. Property of State: Public Dominion

[18.4] Public Ownership Distinguished From State Ownership

e.G f.G g.G

II Caguioa, Civil Code of the Philippines, 1966 ed., p. 31.

59 Phil. 592 (1934). 23 Phil. 631.

[19.4] River is a Composite Term

[19.10] Shore, Dened

[19.13] Part of Public Dominion

299 SCRA 199 (1998). 415 SCRA 403 (2003).

[19.14] Ownership of Lakes

[21.1] The Regalian Doctrine and State Ownership of Natural Resources

[21.4] Submerged Lands

32 Phil. 654. 442 SCRA 110 (2004).

25. Property of Provinces, Cities and Municipalities

26. Property for Public Use of Provinces, Cities and Municipalities