G.R. No.
L-19614 March 27, 1971 usufruct of the property in the following
JESUS M. GABOYA, as Administrator of the Estate of
DON MARIANO CUI, plaintiff-appellant,
vs.
ANTONIO MA. CUI, MERCEDES CUI-RAMAS and GIL
RAMAS, defendants-appellees, JESUS MA. CUI, JOSE
MA. CUI, SERAFIN MA. CUI, JORGE MA. CUI,
ROSARIO CUI DE ENCARNACION, PRECILLA C.
VELEZ, and LOURDES C. VELEZ, intervenors-
appellants, VICTORINO REYNES, defendant-in-
counterclaim-appellee.
Vicente Jayme for plaintiff-appellant.
Hector L. Hofileña Candido Vasqueza and Jaime R.
Nuevas for defendants-appellees.
Jose W. Diokno for intervenors-appellants.
REYES, J.B.L., J.:
Direct appeal (before Republic Act 5440) from a decision
of the Court of First Instance of Cebu (in its Civil Case No.
R-1720) denying resolution of a contract of sale of lots
2312, 2313 and 2319 executed on 20 March 1946 by the
late Don Mariano Cui in favor of three of his children
Antonio Ma. Cui, Mercedes Cui de Ramas and Rosario
Cui de Encarnacion, but sentencing the first two, Antonio
Cui and Mercedes; Cui, to pay, jointly and severally (in
solidum), to the Judicial Administrator of the Estate of
Mariano Cui (appellant Jesus M. Gaboya the amount of
P100,088.80, with legal interest from the interposition of
the complaint (5 November 1951), plus P5,000.00
attorney's fees and the costs.
The antecedents of the case are stated in the previous
decision of this Supreme Court rendered on 31 July 1952,
in the case of Antonio and Mercedes Cui vs. Judge Piccio,
et al., 91 Phil. 712.
Don Mariano Cui, widower, as owner of
lots Nos. 2312, 2313 and 2319 situated in
the City of Cebu, with an area of 152
square meters, 144 square meters and
2,362 square meters, respectively, or a
total extension of 2,658 square meters, on
March 8, 1946, sold said three lots to
three of his children named Rosario C. de
Encarnacion, Mercedes C. de Ramas and
Antonio Ma. Cui, pro indiviso for the sum
of P64,000. Because Rosario C. de
Encarnacion for lack of funds was unable
to pay her corresponding share of the
purchase price, the sale to her was
cancelled and the one-third of the property
corresponding to her was returned to the
vendor. These three lots are commercial.
The improvements thereon were
destroyed during the last Pacific War so
that at the time of the sale in 1946, there
were no buildings or any other
improvements on them. Because of the
sale of these lots pro indiviso and because
of the cancellation of the sale to one of the
three original vendees, Don Mariano and
his children Mercedes and Antonio
became co-owners of the whole mass in
equal portions. In the deed of sale vendor
Don Mariano retained for himself the
words:
"...do hereby sell, transfer,
and convey to Messrs.
Rosario C. de
Encarnacion, Mercedes
C. de Ramas and Antonio
Ma. Cui, the above-
mentioned parcel of land
in equal parts, ... and the
further consideration, that
I, shall enjoy the fruits and
rents of the same, as long
as my natural life shall
last. Granting and
conveying unto the said
buyers the full rights as
owners to enjoy the
constructive possession
of the same, improve,
construct and erect a
building in the lot, or do
whatever they believe to
be proper and wise, ..."
Subsequently, a building was erected on a
portion of this mass facing Calderon street
and was occupied by a Chinese
businessman for which he paid Don
Mariano P600 a month as rental. The date
when the building, was constructed and by
whom do not appear in the record.
Sometime after the sale to Mercedes and
Antonio the two applied to the
Rehabilitation Finance Corporation (RFC)
for a loan of P130,000 with which to
construct a 12-door commercial building
presumably on a portion of the entire
parcel corresponding to their share. In
order to facilitate the granting of the loan
and inasmuch as only two of the three co-
owners applied for the loan, Don Mariano
on January 7, 1947, executed an authority
to mortgage (Annex U) authorizing his two
children co-owners to mortgage his share,
the pertinent portion of said authority
reading thus:
"That by virtue of these presents, I hereby
agree, consent permit and authorize my
said co-owners to mortgage, pledge my
share so that they may be able to
construct a house or building in the said
property, provided however, that the rents
of the said land shall not be impaired and
will always be received by me."
The loan was eventually granted and was
secured by a mortgage on the three lots in
question, Don Mariano being included as
one of the three mortgagors and signing
the corresponding promissory note with
his two co-owners. He did not however,
join in the construction of the 12-door
commercial building as may be gathered
from the "Convenio de Asignacion de
Parte' (Annex V) wherein it was agreed
among the three co-owners to assign to
Don Mariano that one-third of the whole
mass facing Calderon street and on which
was erected the building already referred
to as being occupied by a Chinese
businessman and for which he was paying
Don Mariano P600 a month rental. The
area of this one-third portion was fixed at
900 square meters approximately one-
third of the total area of the three lots. The
pertinent Portion of this Annex V reads as
follows:
"Que como quiera que, la propiedad arriba
descrita esta actualmente hipotecada a la
Rehabilitation Finance Corporation para
garantizar la construccion que mis
condueños cnotruyeron en la parte que
les correponde;
"Y que como quiera que, el Sr. Don
Mariano Cui, uno de los condueños, no ha
querido unirse a la construccion de dicho
edificio, y desea que la parte que le
corresponda sea la 1/3 que este dando
frente a la Calle Calderon."
The 12-door commercial building was
eventually constructed and the builder-
owners thereof Mercedes and Antonio
received and continued to receive the
rents thereof amounting to P4,800 a
month and paying therefrom the
installments due for payment on the loan
to the Rehabilitation Finance Corporation.
On March 25, 1948, two other children of
Don Mariano named Jesus and Jorge
brought an action (Civil case No. 599R) in
the Court of First Instance of Cebu for the
purpose of annulling the deed of sale of
the three lots in question on the ground
that they belonged to the conjugal
partnership of Don Mariano and his
deceased wife Antonia Perales.
Thereafter, plaintiffs Jesus and Jorge
applied for the appointment of a receiver
to take charge of the lots and of the
rentals of the building. This petition was
denied on November 8, 1948.
On March 19, 1949, Rosario C.
Encarnacion, that daughter of Don
Mariano who was one of the original
vendees, filed a petition to declare her
father incompetent and to have a guardian
appointed for his property, in Special
Proceeding No. 481-R of the Court of First
Instance of Cebu. In May 1949 the petition
was granted and Don Mariano was
declared incompetent and Victorino
Reynes was appointed guardian of his
property.lâwphî1.ñèt Thereafter, the
complaint in civil case No. 599-R seeking
to annul the deed of sale of the three lots
in favor of Mercedes and Antonio was
amended so as to include as plaintiffs not
only the guardian Victorino Reynes but
also all the other children of Don Mariano.
On June 15, 1949, guardian Victorino
Reynes filed a motion in the guardianship
proceedings seeking authority to collect
the rentals from the three lots in question
and asking the Court to order Antonio and
Mercedes to deliver to him as guardian all
the rentals they had previously collected
from the 12-door commercial building,
together with all the papers belonging to
his ward. This motion was denied by
Judge Piccio in his order of July 12, 1949.
The guardian did not appeal from this
order.
On May 22, 1951, Judge Saguin rendered
a decision in civil case No. 599-R and
found that the three lots in question were
not conjugal property but belonged
exclusively to Don Mariano and so upheld
the sale of two-thirds of said lots to
Antonio and Mercedes. The plaintiffs
appealed to the Court of Appeals where
the case is now pending.
From the Court of Appeals the case was brought to the
Supreme Court, and the decision of Judge Saguin
upholding the validity of the sale in favor of Antonio and
Mercedes Cui was finally affirmed on 21 February 1957,
in Cui vs. Cui, 100 Phil, 914.
This third case now before Us was started by the erstwhile
guardian of Don Mariano Cui (while the latter was still
alive) in order to recover P126,344.91 plus legal interest
from Antonio Cui and Mercedes Cui (Record on Appeal,
pages 2-3) apparently as fruits due to his ward by virtue of
his usufruct. The guardian's complaint was supplemented
and amplified by a 1957 complaint in intervention (duly
admitted) filed by the other compulsory heirs of Mariano
Cui, who had died on 29 July 1952, some nine months
after the present case was instituted in the court below
(Record on Appeal, pages 67-68).
In essence, the complaint alleges that the usufructuary
right reserved in favor of Don Mariano Cui extends to and
includes the rentals of the building constructed by Antonio
Cui and Mercedes Cui on the land sold to them by their
father; that the defendants retained those rentals for
themselves; that the usufructuary rights of the vendor were
of the essence of the sale, and their violation entitled him
to rescind (or resolve) the sale. It prayed either for
rescission with accounting, or for delivery of the rentals of
the building with interests, attorneys' fees and costs
(Record on Appeal, pages 12-38).
The amended answer, while admitting the reserved
usufruct and the collection of rentals of the building by the
defendants, denied that the usufructuary rights included or
extended to the said rentals, or that such usufruct was of
the essence of the sale; that the vendor (Don Mariano
Cui ) had waived and renounced the usufruct and that the
defendants vendees gave the vendor P400.00 a month by
way of aid; that the original complaint having sought
fulfillment of the contract, plaintiff can not thereafter seek
rescission; that such action is barred by res judicata (on
account of the two previous decisions of the Supreme
Court and by extinctive prescription. Defendants
counterclaimed for actual and moral damages and
attorney's fees.
Plaintiffs denied the allegations in the counterclaim. .
From a consideration of the pleadings, the basic and
pivotal issue appears to be whether the usufruct reserved
by the vendor in the deed of sale, over the lots in question
that were at the time vacant and unoccupied, gave the
usufructuary the right to receive the rentals of the
commercial building constructed by the vendees with
funds borrowed from the Rehabilitation and Finance
Corporation, the loan being secured by a mortgage over
the lots sold. Similarly, if the usufruct extended to the
building, whether the failure of the vendees to pay over its
rentals to the usufructuary entitled the latter to rescind, or
more properly, resolve the contract of sale. In the third
place, should the two preceding issues be resolved
affirmatively, whether the action for rescission due to
breach of the contract could still be enforced and was not
yet barred.
The court below declared that the reserved right of
usufruct in favor of the vendor did not include, nor was it
intended to include, nor was it intended to include, the
rentals of the building subsequently constructed on the
vacant lots, but that it did entitle the usufructuary to receive
a reasonable rental for the portion of the land occupied by
the building, which the Court a quo fixed at Pl,858.00 per
month; and that the rentals for the land from November,
1947, when the building was rented, to 29 July 1952, when
Don Mariano died, amounted to P100,088.80. It also found
no preponderant evidence that the seller, Don Mariano
Cui, had ever waived his right of usufruct, as contended by
the defendants; and that the Supreme Court, in denying
reconsideration of its second (1957) decision (100 Phil.
914), had, like the court of origin, refused to pass upon the
extent of the usufructuary rights of the seller, specially
because the present case, was already pending in the
Court of First Instance, hence no res judicata existed. No
attorney's fees were awarded to the defendants, but they
were sentenced to pay counsel fees to plaintiffs.
Both parties appealed in the decision of the court a quo.
We find no the decision appealed from. As therein pointed
out, the terms of the 1946 deed of sale of the vacant lots in
question made by the late Don Mariano Cui in favor of his
three children, Rosario, Mercedes and Antonio Cui, in
consideration of the sum of P64,000.00 and the reserved
usufruct of the said lot in favor of the vendor, as amplified
by the deed of 7 January 1947, authorizing Mercedes, and
Antonio Cui to borrow money, with the security of a
mortgage over the entirety of the lots, in order to enable
them to construct a house or building thereon —
provided, however, that the rents of said
land shall not be impaired and will always
received by me.
clearly prove that the reserved usufruct in favor of the
vendor, Mariano Cui, was limited to the rentals of the land
alone. Had it been designed to include also the rents of the
buildings intended to be raised on the land, an express
provision would have been included to the effect, since in
both documents (heretofore quoted) the possibility of such
construction was clearly envisaged and mentioned.
Appellants, however, argue that the terms of the deed
constituting the usufruct are not determinative of the extent
of the right conferred; and that by law, the enjoyment of the
rents of the building subsequently erected passed to the
usufructuary, by virtue of Article 571 of the Civil Code of
the Philippines (Article 479 of the Spanish Civil Code of
1889) prescribing that:
Art. 571. The usufructuary shall have the
right to enjoy any increase which the thing
in usufruct may acquire through
accession, the servitudes established in its
favor, and, in general, all the benefits
inherent therein,
inasmuch as (in the appellants' view) the building
constructed by appellees was an accession to the land.
This argument is not convincing. Under the articles of the
Civil Code on industrial accession by modification on the
principal land (Articles 445 to 456 of the Civil Code) 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.
Thus, Article 445, establishing the basic rule of industrial
accession, prescribes that —
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.
while Article 449 states:
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.
(Emphasis supplied)
Articles 447 and 445, in turn, treat of accession produced
by the landowner's building, planting and sowing "with the
materials of another" and when "the materials, plants or
seeds belong to a third person other than the landowner or
the builder, planter or sower.
Nowhere in these articles on industrial accession is there
any mention of the case of landowner building on his own
land with materials owned by himself (which is the case of
appellees Mercedes and Antonio Cui). The reason for the
omission is readily apparent: recourse to the rules of
accession are totally unnecessary and inappropriate where
the ownership of land and of the, materials used to build
thereon are concentrated on one and the same person.
Even if the law did not provide for accession the land-
owner would necessarily own the building, because he has
paid for the materials and labor used in constructing it. We
deem it unnecessary to belabor this obvious point. .
There is nothing in the authorities (Manresa, Venezian,
Santamaria, and Borrell cited by appellants that
specifically deals with constructions made by a party on
his own land with his own materials, and at his own
expense. The authorities cited merely indicate the
application in general of the rules of accession. But as
already stated above, the Civil Code itself limits the cases
of industrial accession to those involving land and
materials belonging to different owners. Anyway,
commentators' opinions are not binding where not in
harmony with the law itself.
The author that specifically analyses the situation of the
usufructuary vis-a-vis constructions made by the
landowner with his own materials is Scaevola (Codigo
Civil, 2d Edition, pages 288 to 297) ; and his conclusion
after elaborate discussion is that, at the most —
(b) El nudo propietario no podra, sin el
consentimiento del usufructuario, hacer
construcciones, plantaciones y siembras
en el predio objecto del usufructo; y en el
caso de que aquel lascosintiese, la
utilizacion sera comun en los frutos y
productosde lo sembrado y plantado, y
con respecto a las construcciones,el
usufructuario tendra derecho a la renta
que de mutuo acuerdo se fije a las
mismas; en su defecto, por la autoridad
judicial (Author cit., Emphasis supplied).
Scaevola's opinion is entirely in harmony with Article 595
of the Civil Code of the Philippines, prescribing that —
The owner may construct any works and
make any improvements of which the
immovable usufruct is susceptible, or
make new plantings thereon if it be rural,
provided that such acts do not cause a
diminuition in the value of the usufruct or
prejudice the right of the usufructuary.
Note that if the income from constructions made by the
owner during the existence of the usufruct should be held
to accrue automatically to the usufructuary under Article
571, such improvements could not diminish the value of
the usufruct nor prejudice the right of the usufructuary; and
the qualifications by Article 595 on the owner's right to
build would be redundant. The limitations set by Article 595
to the construction rights of the naked owner of the land
are evidently premised upon the fact that such
constructions would necessarily reduce the area of the
land under usufruct, for which the latter should be
indemnified. This is precisely what the court a quo has
done in sentencing the appellee owners of the building to
pay to the usufructuary a monthly rent of P1,758.00 for the
area occupied by their building, after mature consideration
of the rental values of lands in the neighborhood.
Additional considerations against the thesis sustained by
appellants are (1) that the amount invested in the building
represents additional capital of the landowners not
foresee" when the usufruct was created; and (2) that no
land-owner would be willing to build upon vacant lots
under usufruct if the gain therefrom were to go to the
usufructuary while the depreciation of the value of the
building (as distinguished from the necessary repairs) and
the amortization of its cost would burden exclusively the
owner of the land. The unproductive situation of barren lots
would thus be prolonged for an indefinite time, to the
detriment of society. In other words, the rule that
appellants advocate would contradict the general interest
and be against public policy.
Appellants urge, in support of their stand, that the loan .for
the construction of the building was obtained upon the
security of a mortgage not only upon the share of
appellees but also upon the undivided interest of Don
Mariano Cui in the lots in question. That factor is irrelevant
to the ownership of the building, because the money used
for the building was loaned exclusively to the appellees,
and they were the ones primarily responsible for its
repayment. Since the proceeds of the loan was exclusively
their property,1 the building constructed with the funds
loaned is likewise their own. A mortgagor does not become
directly liable for the payment of the loan secured by the
mortgage, in the absence of stipulation to that effect; and
his subsidiary role as guarantor does not entitle him to the
ownership of the money borrowed, for which the mortgage
is mere security.
We agree with the trial court that there was no adequate
proof that the vendor, Don Mariano Cui, ever renounced
his usufruct. The alleged waiver was purely verbal, and is
supported solely by the testimony of Antonio Cui, one of
the alleged beneficiaries thereof. As a gratuitous
renunciation of a real right over immovable property that
as created by public document, the least to be expected in
the regular course of business is that the waiver should
also appear in writing. Moreover, as pointed out in the
appealed decision (Record on Appeal, page 184, et seq.),
in previous pleadings sworn to by Antonio Cui himself, in
Civil Case No. 599 and Special Proceeding 481-R of the
Cebu Court of First Instance (Exhibits "I", "J", and "20-A"),
he and his sister Mercedes had contended that Don
Mariano Cui had been receiving from them P400.00 per
month as the value of his usufruct, and never claimed that
the real right had been renounced or
waived.lâwphî1.ñèt The testimony of Antonio Cui on the
alleged waiver, given after the usufructuary had been
declared incompetent and could no longer contradict him,
is obviously of negligible probative value.
Turning now to the second issue tendered by herein
appellants, that the non-compliance with the provisions
concerning the usufruct constituted sufficient ground for
the rescission (or resolution) of the sale under the tacit
resolutory condition established by Article 1191 of the Civil
Code. What has been stated previously in discussing the
import of Don Mariano's usufruct shows that the alleged
breach of contract by the appellees Antonio and Mercedes
Cui could only consist in their failure to pay to the
usufructuary the rental value of the area occupied by the
building constructed by them. But as the rental value in
question had not been ascertained or fixed either by the
parties or the court, prior to the decision of 31 October
1961, now under appeal, nor had Don Mariano Cui, or
anyone else in his behalf, made any previous demand for
its payment, the default, if any, can not be exclusively
blamed upon the defendants-appellees. Hence, the breach
is not it "so substantial and fundamental as to defeat the
object of the parties in making the agreement" 2 as to justify
the radical remedy of rescission. This Court, in Banahaw,
Inc. vs. Dejarme 55 Phil. 338, ruled that —
...Under the third paragraph of article
11243 of the Civil Code, the court is given
a discretionary power to allow a period
within which a person in default may be
permitted to perform the stipulation upon
which the claim for resolution of the
contract is based. The right to resolve or
rescind a contract for non-performance of
one of its stipulations is, therefore, not
absolute.
We have stated "the default, if any," for the reason that
without previous ascertainment of the exact amount that
the, defendants-appellees were obligated to turn over to
the usufructuary by way of reasonable rental value of the
land occupied by their building, said parties can not be
considered as having been in default (mora) for failure to
turn over such monies to the usufructuary. "Ab illiquido
non fit mora": this principle has been repeatedly declared
by the jurisprudence of Spanish Supreme Court (v.
Manresa, Commentaries to the Spanish Civil Code [5th
Ed.], Vol. 8, No. 1, page 134) that is of high persuasive
value in the absence of local adjudications on the point .
No puede estimarse que incurre en mora
el obligado al pago de cantidad mientras
esta no sea liquida, y tenga aquel
conocimiento por virtud de requirimiento o
reclamacion judicial de lo que debe
abonar (Sent. TS of Spain, 13 July 1904) .
Seguin tiene declarado esta sala con
repeticion, no se puede establecer que
hay morosidad, ni condenar por tal razon
al abono de intereses cuando no se
conoce la cantidad liquida reclamable"
(Sent. TS of Spain, 29 November 1912)
... es visto que no existiendo obligacion de
entregar cantidad hasta tanto que se
liquide no puede estimarse segun
jurisprudencia, que los recurridos ineurran
en mora, por tanto que hayan de pagar
 intereses legales de la cantidad que en su
caso resulte (Sent, TS of Spain, 29 April
1914)
In the absence of default on the part of the defendants-
vendees, Article 1592 of the Civil Code of the Philippines
that is invoked by appellants in, support of their all right to
rescind the sale, is not applicable: for said article (which is
a mere variant of the general principle embodied in Article
1191, of the same Code) presupposes default of the
purchasers in the fulfilment of their obligations. As already
noted, no such default or breach could occur before
liquidation of the usufructuary's credit; and the time for
paying such unliquidated claim can not be said to have
accrued until the decisions under appeal was rendered,
fixing the rental value of the land occupied by the building.
The filing of the initial complaint by Victoriano Reynes,
then guardian of the late Don Mariano in 1951, seeking to
recover P126,344.91 plus interest, did not place appellees
in default, for that complaint proceeded on the theory that
the usufructuary was entitled to all the rentals of the
building constructed by the appellees on the lot under
usufruct; and as We have ruled, that theory was not legally
tenable. And the 1957 complaint in intervention, seeking
rescission of the sale as alternative remedy, was only
interposed after the death of the usufructuary in 1952, and
the consequent extinction of the usufruct, conformably to
Article 603, paragraph (1), of the Civil Code.
Mercedes Cui were not in default prior thereto, and the
deed of sale was therefore, not subject to rescission.
(4) That as found by the court below, the reasonable rental
value of the land occupied by the defendants' building
totalled P100,088.80 up to the time the usufructuary died
and the usufruct terminated.
(5) That pursuant to Articles 2208 (No. 11), 2210 and 2213
of the Civil Code,5 the trial court had discretion to equitably
award legal interest upon said sum of P100,088.80, as
well as P5,000.00 attorney's fees, considering that
defendants Cui have enjoyed the said rental value of the
land during all those years.
WHEREFORE, finding no reversible error in the appealed
decision, the same is hereby affirmed. Costs against
appellant-intervenors, Jesus Ma. Cui, Jose Ma. Cui,
Serafin Ma. Cui, Jorge Ma. Cui, Rosario Cui de
Encarnacion, Precilla C. Velez, and Lourdes C. Velez.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Teehankee,
Barredo, Villamor and Makasiar, JJ., concur. Castro and
Fernando, JJ., took no part .

It is also urged by the appellants that the usufruct was a

condition precedent to the conveyance of ownership over
the land in question to herein appellees, and their failure to
comply with their obligations under the usufruct prevented
the vesting of title to the property in said appellees. We
need not consider this argument, since We have found that
the usufruct over the land did not entitle the usufructuary to
either the gross or the net income of the building erected
by the vendees, but only to the rental value of the portion
of the land occupied by the structure (in so far as the
usufructuary was prevented from utilizing said portion),
and that rental value was not liquidated when the
complaints were filed in the court below, hence, there was
no default in its payment. Actually, this theory of appellants
fails to take into account that Don Mariano could not retain
ownership of the land and, at the same time, be the
usufructuary thereof. His intention of the usufructuary
rights in itself imports that he was no longer its owner. For
usufruct is essentially jus in re aliena; and to be a
usufructuary of one's own property is in law a contradiction
in terms, and a conceptual absurdity.

The decision (Exhibit "30") as well as the resolution of this

Court upon the motion to reconsider filed in the previous
case (100 Phil 914) refusing to adjudicate the usufructuary
rights of Don Mariano in view of the pendency of the
present litigation (Exhibit "22") amply support the trial
court's overruling of the defense of res judicata.

Summing up, We find and hold:

(1) That the usufructuary rights of the late Don Mariano

Cui, reserved in the deed of sale (Exhibit "A" herein), was
over the land alone and did not entitle him to the rents of
the building later constructed thereon by defendants
Mercedes and Antonio Cui at their own expense.

(2) That said usufructuary was entitled only to the

reasonable rental value of the land occupied by the
building aforementioned.

(3) That such rental value not having been liquidated until
the judgment under appeal was rendered, Antonio and

G.R. No. L-13361 December 29, 1959
ROSARIO GREY VDA. DE ALBAR and JOSE M.
GREY, petitioner,
vs.
JOSEFA FABIE DE CARANGDANG, respondent.
Jose W. Diokno for petitioners.
Ambrosio Padilla, Ciriaco Lopez, Jr., and Santiago P.
Blanco for respondent.
BAUTISTA ANGELO, J.:
Doña Rosario Fabie y Grey was the owner of the lot in the
City of Manila with a building and improvements thereon
erected at 950-956 Ongpin as evidenced by Original
Certificate of Title No. 5030, and by a will left by her upon
her death which was duly probated she devised the naked
ownership of the whole property to Rosario Grey Vda. de
Albar, et al. but its usufruct to Josefa Fabie for life.
The pertinent provision of the will reads as follows: "Lego a
mi a ahijada menor de edad, Maria Josefa de la Paz
Fabie, en usufructo vitalicio las rentas de las fincas . . . en
calle Ongpin, Numeros 950 al 956 del Distrito de Santa
Cruz, Manila, . . . y prohibio enjane, hipoteque, permuta o
transfiera de algun modo mientras que ella sea menor de
edad." Said property was registered in the name of
Rosario Grey Vda. De Albar, et al. as naked owners of the
right of Josefa Fabie as life usufructuary was expressly
noted on the new title. Pursuant to the 9th clause of the
claim of the will, an encumbrance was likewise noted on
the title prohibiting the usufructuary from selling,
mortgaging or transferring her right to usufruct during her
minority.
During liberation, as a consequence of the fire that gutted
the building in many portions of Manila, the building on the
Ongpin lot was burned, leaving only the walls and other
improvements that were not destroyed by the fire.
One Au Pit, a Chinaman, offered to lease the property for a
period of five years a monthly rental of P500.00, at the
same time agreeing to construct on the lot a new building
worth P30,000 provided the naked owners as well as the
usufructuary sign the agreement of the lease. As the
usufructuary maintains that she has the exclusive right to
cede the property by lease and to receive the full rental
value by virtue of her right to usufruct while on the other
hand the naked owners maintain that the right of usufruct
was extinguished when the building was destroyed, the
right of the usufructory being limited to the legal interest on
the value of the lot and the materials, in order that the
agreement of lease may be affected, the parties agreed on
a temporary compromise whereby the naked owners
would receive P100.00, or 20% of the monthly rental of
P500.00 and the usufructuary the balance of 80% or
P400.00 of said monthly rental. It was likewise stipulated in
the agreement that the title to the building to be
constructed would accrue to the land upon it completion as
an integral part of the lot covered by the transfer certificate
of title issued in the name of the naked owners but subject
to the right of usufruct of Josefa Fabie. The parties
expressly reserved the right to litigate their respective
claims after the termination of the contract of lease to
determine which of said claims was legally correct.
By reason of the destruction of the building on the Ongpin
property, the United States War Damage Commission
approved the claim that was presented for the damage
caused to the property the amount in the amount of
P8,574.00 which was paid to and received by the naked
owners. In the meantime, the usufructuary paid the real
estate taxes due on the property at Ongpin for the years
1945 to 1952 in the total amount of P1,989.27, as well as
the real estate taxes for the years 1953 and 1954 in the
annual sum of P295.80.
On October 2, 1952, Rosario Grey Vda. de Albar, et al.
commenced the present action to settle the dispute and
conflicting views entertained by the parties in line with their
agreement and prayed that judgment be rendered
declaring that the usufruct in favor of Josefa Fabie is now
only limited to receiving the legal interest on the value of
the land, and that her right to receive any rental under the
contract entered into between the parties has already
ceased.
On August 10, 1953, the trial court rendered judgment the
dispositive part of which reads:
EN VIRTUD DE TODO LO CUAL, el Juzgaso
promulga decision a favor de la demandada
usufructuaria, declarando;
(a) Que su usufructo vitalico continua sobre a la
finca en Ongpin con derecho exclusivo de percibir
durante su vida la totalidad de sus rentas, sin que
los demandantes tengan derecho de in miscuirse
en la administracion de dicha finca;
(b) Con derecho de percibir el 6% de la cantidad
de P8,574.00 percibidos como indemnizacion de
guerra desde Enero 11, 1959;lawphi1.net
(c) Al reembolso de la suma de P1,989.27
pagados o abanados por la demandada como
pagos del amillaramiento desde la fecha de la
Contestacion, Octubre 22, 1953;
(d) Mas la suma de P2,000.00 como daños y
perjuicios en forma de honorarios de abogado y
gastos de litigio.
(e) Con las costas a cargo de los demandantes.
On appeal by plaintiffs, the Court of Appeals modified the
decision as follows:
Wherefore, we hereby affirm the decision
appealed from in so far it holds that appellee's
right of life usufruct subsists and is in full force and
effect upon the Ongpin lot and the building now
existing thereon, and that she is entitled to receive
from
appellants the legal interest of 6% interest per
annum of the amount of P3,272.00 from the time it
was actually received from the Philippine War
Damage Commission for the whole period of the
usufruct and appellants are hereby required to
give sufficient security for the payment of such
interest, and we hereby reverse said decision,
declaring that reimbursement to appellee of the
sum of P1,987.27 paid by her for real estate taxes
is deferred until the termination of the usufruct,
and that she is not entitled to any amount for
attorney's fees. Without pronouncement regarding
costs.
Plaintiffs interposed the present petition for review.
The main issue to be determined hinges on the
interpretation of that portion of the will which devices to
Josefa Fabie all the rentals of the property situated in
Ongpin and Sto. Cristo Streets, City of Manila. The
pertinent provision of the will reads: "Lego a mi ahijada
menor de edad Maria Josefa de la Paz Fabie, en usufructo
vitalico las rentas de las fincas situadas en la calle Santo
Cristo . . . y en la Calle Ongpin, Numeros 950 al 956 del
Distrito de Santa Cruz Manila." Petitioner contend that this
provision of the will should be interpreted as constituting
only a life usufruct on the rentals of the buildings erected
on the lands and that once these buildings are destroyed
the usufruct is extinguished. Respondent, on the other
hand, contends that the provision should be interpreted as
constituting a life usufruct both on the buildings and the
lands because the former cannot be separated from the
latter.
In Lopez vs. Constantino, 74 Phil., 160, we said:
It may indeed seem at first blush that the rents out
of which the pension was payable were earned by
or paid for the building only, independently of the
lot on which it was erected; but further reflection
will show that such impression is wrong. When
both land and building belong to the same owner,
as in this case, the rents on the building constitute
an earning of the capital invested in the acquisition
of both land and building. There can be a land
without a building, but there can be no building
without land. The land, being an indispensable
part of the rented premises cannot be considered
as having no rental value whatsoever. (Emphasis
supplied)
In another part of the decision, this Court said: "Since
appellant's participation in the rents of the leased premises
by way of life pension was part of the consideration of the
sale, it cannot be deemed extinguished so long as she
lives and so long as the land exists, because that land
may be rented to anyone who may desire to erect a
building thereon." (Emphasis supplied).
From the above, it is clear that when the deceased
constituted the life usufruct on the rentals "fincas situadas"
in Ongpin and Sto. Cristo streets, she meant to impose the
encumbrance both the building and the land on which it is
erected for indeed the building cannot exist without the
land. And as this Court well said, "The land, being an
indispensable part of the rented premises cannot be
considered as having no rental value whatsoever."
Moreover, in the Spanish language, the term "fincas" has a
broad scope; it includes not only building but land as well.
(Diccionario Ingles-Español, por Martines Amador) Since
only the building was destroyed and the usufruct is
constituted not only on the building but on the land as well,
then the usufruct is not deemed extinguished by the
destruction of the building for under the law usufruct is
extinguished only by the total loss of the thing subject of
the encumbrance (Article 603, old Civil Code).
In our opinion, this case comes under Article 517 of the
same Code which provides: "if the usufruct is constituted
on immovable property of which a building forms part, and
the latter should be destroyed in any manner whatsoever,
the usufractuary shall have a right to make use of the land
and materials." This is a temporary measure calculated to
maintain the usufruct alive until the very thing that has
been destroyed be reconstructed or replaced. The reason
is obvious: since the usufruct has not been extinguished
by the destruction of the building and the usufruct is for life
as in this case, it is but fair that the usufructuary continue
to enjoy the use of the land and the materials that they
may be constructed on the land. To hold otherwise would
be to affirm that the usufruct has been extinguished.
The question that now arises is: Who is called upon to
undertake the new construction, and at whose cost? Of
course, this is addressed to the wisdom and discretion of
the usufructuary who, to all intents and purposes is
deemed as the administrator of the property. This has
been clarified in the case of Fabie vs. Gutierrez David, 75
Phil., 536, which was litigated between the same parties
and wherein the scope of the same provision of the will
has been the subject of interpretation. The following is
what this Court said:
Construing said judgment in the light of the ninth
clause of the will of the deceased Rosario Fabie
Grey, which was quoted in the decision and by
which Josefa Fabie was made the usufructuary
during her lifetime of the income of the property in
question, we find that the said usufructuary has
the right to administer the property in question. All
the facts of administration — to collect the rents
for herself, and to conserve the property by
making all necessary repair and praying all the
taxes, special assessments, and insurance
premiums thereon — where by said judgment
vested in the usufructuary. The pretension of the
respondent Juan Grey that he is the administrator
of the property with the right to choose the tenants
and to dictate the conditions of the lease is
contrary to both the letter and spirit of the said
clause of the will the stipulation of the parties, and
the judgment of the court. He cannot manage or
administer the property after all the acts of
management or administration have been vested
by the court, with his consent, in the usufructuary.
In the instant case, however, a happy comprehensive was
reached by the parties in view of the offer of one
Chinaman to lease the land for five years and to construct
thereon a building worth P30,000.00 upon the condition
that upon its completion the building would become an
integral part of the land in which it is erected. This means
that its naked ownership should belong to petitioners and
its beneficial ownership to respondent. This is a happy
medium which fits into the purpose contemplated in Article
517 above referred to: that the usufruct should continue on
the land and the new improvement that may be
constructed thereon.
We therefore hold that the Court of Appeals did not err in
finding that appellee's right of usufruct subsists and is in
full force and effect upon the Ongpin lot and the building
existing thereon, affirming the decision of the trial court.
Petitioners' contention that the Court of Appeals erred in
ruling that the damages paid by the War Damage
Commission to said petitioners was intended to be an
indemnity for the destruction of the building in question
and in ordering them to pay respondent 6% interest per
annum on the amount of damage paid is also untenable,
for it cannot be denied that a war damage payment is
intended to replace part of the capital invested in the
building destroyed or to assuage somewhat the material
loss of its owner. It cannot be maintained that the war
damage payments are intended to be a mere gesture of
appreciation of the People of the United States of America
towards our people for its a well-known fact that countless
of our countrymen who suffered in the last war of whose
kin-folks lost their lives did not receive any war damage
payment because they have no damaged property that
could be indemnified. The ruling that 6% interest per
annum of such war damage payment should be paid to
respondent from the time it was actually received to the
end of the life of the usufruct should, in my opinion, be
modified in the sense that the obligation should only be
valid up to the date the new building was constructed by
the Chinaman who leased the property upon the theory
that the amount of damage paid by the War Damage
Commission which was intended to replace the old
building has in turn been replaced by the new. However,
the majority as of the opinion that same should also be
subject to usufruct for life because it has not been used in
the construction that the naked owners may turn over the
money to the usufractuary so that she may use it during
her lifetime subject to its return to them after her death if
they desire to be relived of this encumbrance.
We find, however, merit in the contention that the real
estate taxes paid by respondent in her capacity as
usufractuary for several years previous to the present
litigation should be paid by her, as she did, instead of by
petitioners not only because she bound herself to pay such
taxes in a formal agreement approved by the court in Civil
Case No. 1569 of the Court of First Instance of Manila
(Fabie vs. Gutierrez David, supra). In the case, which
involved the same parties and the same properties subject
to usufruct, the parties submitted an amicable agreement
which was approved by the court wherein the usufructuary,
herein respondent, bound herself to pay all the real estate
taxes, special assessment and insurance premiums, and
make all the necessary repairs on each of the properties
covered by the usufruct and in accordance with said
agreement, respondent paid all the taxes for the years
1945 to 1954. In said agreement, it was also stipulated
that the same "shall be in effect during the term of the
usufruct of each of the parties." There is therefore no valid
reason why petitioners should now be ordered to
reimburse respondent for all the real taxes she had paid
on the property. In this respect, the decision of the Court of
Appeals should be modified.
Wherefore, with the modification that petitioners should not
be made to reimburse the real estate taxes paid by the
respondent for the years abovementioned, the decision
appealed from is affirmed in all others respects, without
pronouncement as to costs.
Labrador, Endencia, Barrera and Gutierrez David, JJ.,
concur.
Separate Opinions
MONTEMAYOR, J., concurring and dissenting:
I concur in the learned opinion of the majority, penned by
Mr. Justice Bautista Angelo, with the exception of that
portion thereof on page 10, which holds that the payment
to the usufructuary of the 6% interest per annum of the war
damage payment should end on the date of the
construction of the new building by the Chinaman who
leased the property, from which ruling I dissent.
It will be noticed that both the trial court and the Court of
Appeals were of the opinion that said payment of interest
should continue during the lifetime of the usufruct. I agree
to said opinion. The reason is obvious. The war damage
payment is the equivalent of the building destroyed. Since
the usufractuary had a right to the use or the fruits of the
building, she therefore had the right to the interest on the
war damage payment during her lifetime. In my opinion,
the construction of the new building does not relieve the
owners of the land who received the war damage payment
of containing the payment of interest. He said owners of
the land used the war damage payment to construct the
building, then they would be free from paying interest
because the rent of the new building would correspond to
the interest on the war damage payment. But the fact is
the new building was not constructed by the owners of the
land, but by the Chinese lessee.
The majority opinion states that the usufractuary would
then be receiving the interest on the war damage payment
and also the rent of the new building — a sort of double
benefit, which is said to be unfair. That is one view. The
other view is that the end of the usufruct, the owners of the
land or their heirs shall have received not only equivalent
or value of the land building destroyed, in the form of the
war damage payment but also the new building
constructed absolutely at no cost or expense to them —
also a double benefit, which might also be regarded as
unfair following the point of view of the majority opinion. So
in this respect of double benefit, both parties stand on the
same footing. Viewed thus, there is nothing unfair in the
arrangement.
Furthermore, we should not lose sight of the fact that
usufructuary, as the majority opinion well states has a right
to the use and the fruits not only of the improvements,
such as buildings on the land, but the land itself.
Consequently, anything built on the land would be subject
to the usufruct, and the fruits thereof, such as rents, would
go to the usufructuary. This naturally includes the interest
on the war damage payment for the old building destroyed
during the war, which payment is the equivalent of said
building. Had the owners of the land used the sum to add
another story or extension of the building constructed
thereon by the Chinese lessee, there would surely be no
question that any rent therefrom would belong the
usufractuary, because then it could be regarded as
improvement on the land, which, as already said, is the
equivalent or a reproduction of said war damage payment
of their own use did not relieve them of the obligation of
paying the interest on the same to the usufractuary,
because otherwise, they would be having not only the
naked ownership of the equivalent of said building, but
also its fruits.
The foregoing are some of the reasons for my dissent.

G.R. No. L-123 December 12, 1945
JOSEFA FABIE, petitioner,
vs.
JOSE GUTIERREZ DAVID, Judge of First Instance of
Manila, NGO BOO SOO and JUAN GREY, respondents.
Sancho Onocencio for petitioner.
Serverino B. Orlina for respondent Ngo Soo.
No appearance for other respondents.
OZAETA, J.:
The petitioner Josefa Fabie is the usufructuary of the
income of certain houses located at 372-376 Santo Cristo,
Binondo, and 950-956 Ongpin, Santa Cruz, Manila, under
the ninth clause of the will of the deceased Rosario Fabie
y Grey, which textually reads as follows:
NOVENO. — Lego a mi ahijada menor de edad,
Maria Josefa de la Paz Fabie, en usufructo
vitalicio las rentas de las fincas situadas en la
Calle Santo Cristo Numeros 372 al 376 del Disrito
de Binondo, de esta Ciudad de Manila, descrita en
el Certificado Original de Titulo No. 3824; y en la
Calle Ongpin, Numeros 950 al 956 del Distrito de
Santa Cruz, Manila descrita en el Certificado
Original de Titulo No. 5030, expedidos por el
Registrador de Titulos de Manila, y prohibo
enajene, hipoteque, permute o transfiera de algun
modo mientras que ella sea menor de edad.
Nombro a Serafin Fabie Macario, mi primo por
linea paterna tutor de la persona y bienes de mi
ahijada menor, Maria Josefa de la Paz Fabie.
The owner of Santo Cristo property abovementioned is the
respondent Juan Grey, while those of the Ongpin property
are other person not concern herein. Previous to
September 1944 litigation arose between Josefa Fabie as
plaintiff and Juan Grey as defendant and the owner of the
Ongpin property as intervenors, involving the
administration of the houses mentioned in clause 9 of the
will above quoted (civil case No. 1659 of the Court of First
Instance of Manila). That suit was decided by the court on
September 2, 1944, upon a stipulation in writing submitted
by the parties to and approved by the court. The pertinent
portions of said stipulation read as follows:
(4) Heretofore, the rent of said properties have
been collected at times by the respective owners
of the properties, at other times by the
usufructuary, and lastly by the defendant Juan
Grey as agent under a written agreement dated
March 31, 1942, between the owners of both
properties and the usufructuary.
(5) When the rents were collected by the owners,
the net amounts thereof were duly paid to the
usufructuary after the expenses for real estate
taxes, repairs and insurance premiums, including
the documentary stamps, on the properties and
the expenses of collecting the rents had been
deducted, and certain amount set aside as a
reserve for contingent liabilities. When the rents
were collected by the usufructuary, she herself
paid the expenses aforesaid. When the rents are
collected by the defendant Juan Grey under the
agreement of March 31, 1942, the net amounts
thereof were duly paid to the usufructuary, after
deducting and setting aside the items aforesaid,
monthly, until the month of October 1943, when
the usufructuary refused to continue with the
agreement of March 31, 1942.
xxx xxx xxx
II. The parties hereto jointly petition the Court to
render judgment adopting the foregoing as finding
of facts and disposing that:
(8) Beginning with the month of September 1944,
the usufructuary shall collect all the rents of the
both the Sto. Cristo and the Ongpin properties.
(9) The usufructuary shall, at her own cost and
expense, pay all the real estate taxes, special
assessments, and insurance premiums, including
the documentary stamps, and make all the
necessary repairs on each of the properties,
promptly when due or, in the case of repairs, when
the necessary, giving immediate, written notice to
the owner or owners of the property concerned
after making such payment or repairs. In case of
default on the part of the usufructuary, the
respective owners of the properties shall have the
right to make the necessary payment, including
penalties and interest, if any, on the taxes and
special assessments, and the repairs and in that
event the owner or owners shall entitled to collect
all subsequent rents of the property concerned
until the amount paid by him or them and the
expenses of collection are fully covered thereby,
after which the usufructuary shall again collect the
rents in accordance herewith.
(10) The foregoing shall be in effect during the
term of the usufruct and shall be binding on the
successors and assigns of each of the parties.
(11) Nothing herein shall be understood as
affecting any right which the respective owners of
the properties have or may have as such and
which is not specifically the subject of this
stipulation.
In June 1945 Josefa Fabie commenced an action of
unlawful detainer against the herein respondent Ngo Boo
Soo (who says that his correct name is Ngo Soo), alleging
in her amended complaint that the defendant is occupying
the premises located at 372-376 Santo Cristo on a month-
to month rental payable in advance not latter than the 5th
of each month; that she is the administratrix and
usufructuary of said premises; "that the defendant offered
to pay P300 monthly rent payable in advance not later
than the 5th of every month, beginning the month of April
1945, for the said of premises including the one door
which said defendant, without plaintiff's consent and
contrary to their agreement, had subleased to another
Chinese, but plaintiff refused, based on the fact that the
herein plaintiff very badly needs the said house to live in,
as her house was burned by the Japanese on the
occasion of the entry of the American liberators in the City
and which was located then at No. 38 Flores, Dominga,
Pasay; that defendant was duly notified on March 24 and
April 14, 1945, to leave the said premises, but he refused";
and she prayed for judgment of eviction and for unpaid
rentals.
The defendant answered alleging that he was and since
1908 had been a tenant of the premises in question, which
he was using and had always used principally as a store
and secondarily for living quarters; that he was renting it
from its owner and administrator Juan Grey; "that plaintiff
is merely the usufructuary of the income therefrom, and by
agreement between her and said owner, which is
embodied in a final judgment of the Court of First Instance
of Manila, her only right as usufructuary of the income is to
receive the whole of such income; that she has no right or
authority to eject tenants, such right being in the owner
and administrator of the house, the aforesaid Juan Grey,
who has heretofore petitioned this Court for permission to
intervene in this action; that plaintiff herein has never had
possession of said property; that defendant's lease
contract with the owner of the house is for 5-year period,
with renewal option at the end of each period, and that his
present lease due to expire on December 31, 1945 . . .;
that on June 1, 1945, defendant made a written offer to
plaintiff to compromise and settle the question of the
amount of rent to be paid by defendant . . . but said plaintiff
rejected the same for no valid reason whatever and
instituted the present action; that the reason plaintiff
desires to eject defendant from the property is that she
wishes to lease the same to other persons for a higher
rent, ignoring the fact that as usufructuary of the income of
the property she has no right to lease the property; that the
defendant has subleased no part of the house to any
person whomsoever.
Juan Grey intervened in the unlawful detainer suit, alleging
in his complaint in intervention that he is the sole and
absolute owner of the premises in question; that the
plaintiff Josefa Fabie is the usufructuary of the income of
said premises; by virtue of a contract between him and the
intervenor which will expire on December 31, 1945, with
the option to renew it for another period of five years from
and after said date; that under the agreement between the
intervenor and plaintiff Josefa Fabie in civil case No. 1659
of the Court of First Instance of Manila, which was
approved by the court and incorporated in its decision of
September 2, 1944, the only right recognized in favor of
Josefa Fabie as usufructuary of the income of said
premises is to receive the rents therefrom when due; and
that as usufructuary she has no right nor authority to
administer the said premises nor to lease them nor to evict
tenants, which right and authority are vested in the
intervenor as owner of the premises.
The municipal court (Judge Mariano Nable presiding)
found that under paragraph 9 of the stipulation
incorporated in the decision of the Court First Instance of
Manila in civil; case No. 1659, the plaintiff usufructuary is
the administratrix of the premises in question, and that the
plaintiff had proved her cause. Judgment was accordingly
rendered ordering the defendant Ngo Soo to vacate the
premises and to pay the rents at the rate of P137.50 a
month beginning April 1, 1945. The complaint in
intervention was dismissed.
Upon appeal to the Court of First Instance of Manila the
latter (thru Judge Arsenio P. Dizon) dismissed the case for
the following reason: "The main issue *** is not a mere
question of possession but precisely who is entitled to
administer the property subject matter of this case and
who should be the tenant, and the conditions of the lease.
These issues were beyond the jurisdiction of the municipal
court. This being case, this Court, as appellate court, is
likewise without jurisdiction to take cognizance of the
present case." A motion for reconsideration filed by the
plaintiff was denied by Judge Jose Gutierrez David, who
sustained the opinion of Judge Dizon.lawphi1.net
The present original action was instituted in this Court by
Josefa Fabie to annul the order of the dismissal and to
require to the Court of First Instance to try and decide the
case on the merits. The petitioner further prays that the
appeal of the intervenor Juan Grey be declared out of time
on the ground that he receive copy of the decision on
August 3 but did not file his notice of appeal until August
25, 1945.
1. The first question to determine is whether the action
instituted by the petitioner Josefa Fabie in the municipal
court is a purely possessory action and as such within the
jurisdiction of said court, or an action founded on property
right and therefore beyond the jurisdiction of the municipal
court. In other words, is it an action of unlawful detainer
within the purview of section 1 of Rule 72, or an action
involving the title to or the respective interests of the
parties in the property subject of the litigation?
Said section 1 of Rule 72 provides that "a landlord, vendor,
vendee, or other person against whom the possession of
any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession, by
virtue of any contract, express or implied, or the legal
representatives or assigns of any such landlord, vendor
vendee, or other person, may, at any time within one year
after such unlawful deprivation of withholding of
possession, bring an action in the proper inferior court
against the person or persons unlawfully withholding or
depriving of possession, or any person or persons claiming
under them, for the restitution of such possession, together
with the damages and costs."
It is admitted by the parties that the petitioner Josefa Fabie
is the usufructuary of the income of the property in
question and that the respondent Juan Grey is the owner
thereof. It is likewise admitted that by virtue of a final
judgment entered in civil case No. 1659 of the Court of
First Instance of Manila between the usufructuary and the
owner, the former has the right to collect all the rents of
said property for herself with the obligation on her part to
pay all the real estate taxes, special assessments, and
insurance premiums, and make all necessary repairs
thereon, and in case default on her part the owner shall
have the right to do all those things, in which event he
shall be entitled to collect all subsequent rents of the
property concerned until the amount paid by him and the
expenses of collection are fully satisfied, after which the
usufructuary shall again collect the rents. There is
therefore no dispute as to the title to or the respective
interests of the parties in the property in question. The
naked title to the property is to admittedly in the
respondent Juan Grey, but the right to all the rents thereof,
with the obligation to pay the taxes and insurance
premiums and make the necessary repairs, is, also
admittedly, vested in the usufructuary, the petitioner Josefa
Fabie, during her lifetime. The only question between the
plaintiff and the intervenor is: Who has the right to manage
or administer the property — to select the tenant and to fix
the amount of the rent? Whoever has that right has the
right to the control and possession of the property in
question, regardless of the title thereto. Therefore, the
action is purely possessory and not one in any way
involving the title to the property. Indeed, the averments
and the prayer of the complaint filed in the municipal court
so indicate, and as a matter of fact the defendant Ngo Soo
does not pretend to be the owner of the property, but on
the contrary admits to be a mere tenant thereof. We have
repeatedly held that in determining whether an action of
this kind is within the original jurisdiction of the municipal
court or of the Court of First Instance, the averments of the
complaint and the character of the relief sought are
primarily to be consulted; that the defendant in such an
action cannot defeat the jurisdiction of the justice of the
peace or municipal court by setting up title in himself; and
that the factor which defeats the jurisdiction of said court is
the necessity to adjudicate the question of title.
(Mediran vs. Villanueva, 37 Phil., 752, 759;
Medel vs.Militante, 41 Phil., 526, 529; Sevilla vs. Tolentino,
51 Phil., 333; Supia and Batioco vs. Quintero and Ayala,
59 Phil., 312; Lizo vs. Carandang, G.R. No. 47833, 2 Off.
Gaz., 302; Aguilar vs. Cabrera and Flameño, G.R. No.
49129.)
The Court of First Instance was evidently confused and led
to misconstrue the real issue by the complaint in
intervention of Juan Grey, who, allying himself with the
defendant Ngo Soo, claimed that he is the administrator of
the property with the right to select the tenant and dictate
the conditions of the lease, thereby implying that it was he
and not the plaintiff Josefa Fabie who had the right to bring
the action and oust the tenant if necessary. For the
guidance of that court and to obviate such confusion in its
disposal of the case on the merits, we deem it necessary
and proper to construe the judgment entered by the Court
of First Instance of Manila in civil case No. 1659, entitled
"Josefa Fabie and Jose Carandang, plaintiffs, vs. Juan
Grey, defendant, and Nieves G. Vda. de Grey, et al.,
intervenors-defendants" which judgment was pleaded by
the herein respondents Juan Grey and Ngo Soo in the
municipal court. According the decision, copy of which was
submitted to this Court as Appendix F of the petition and
as Annex 1 of the answer, there was an agreement, dated
March 31, 1942, between the usufructuary Josefa Fabie
and the owner Juan Grey whereby the latter as
agent collected the rents of the property in question and
delivered the same to the usufructuary after deducting the
expenses for taxes, repairs, insurance premiums and the
expenses of collection; that in the month of October 1943
the usufructuary refused to continue with the said
agreement of March 31, 1942, and thereafter the said case
arose between the parties, which by stipulation approved
by the court was settled among them in the following
manner: Beginning with the month of September 1944 the
usufructuary shall collect all the rents of the property in
question; shall, at her own cost and expense, pay all the
real estate taxes, special assessments, and insurance
premiums, including the documentary stamps, and make
all the necessary repairs on the property; and in case of
default on her part the owner shall the right to do any or all
of those things, in which event he shall be entitled to
collect all subsequent rents until the amounts paid by him
are fully satisfied, after which the usufructuary shall again
collect the rents. It was further stipulated by the parties
and decreed by the court that "the foregoing shall be in
effect during the term of the usufruct and shall be binding
on the successors and assigns of each of the parties."
Construing said judgment in the light of the ninth clause of
the will of the deceased Rosario Fabie y Grey, which was
quoted in the decision and by which Josefa Fabie was
made by the usufructuary during her lifetime of the income
of the property in question, we find that the said
usufructuary has the right to administer the property in
question. All the acts of administration — to collect the
rents for herself, and to conserve the property by making
all necessary repairs and paying all the taxes, special
assessments, and insurance premiums thereon — were by
said judgment vested in the usufructuary. The pretension
of the respondent Juan Grey that he is the administrator of
the property with the right to choose the tenants and to
dictate the conditions of the lease is contrary to both the
letter and the spirit of the said clause of the will, the
stipulation of the parties, and the judgment of the court. He
cannot manage or administer the property after all the acts
of management and administration have been vested by
the court, with his consent, in the usufructuary. He
admitted that before said judgment he had been collecting
the rents as agent of the usufructuary under an agreement
with the latter. What legal justification or valid excuse could
he have to claim the right to choose the tenant and fix the
amount of the rent when under the will, the stipulation of
the parties, and the final judgment of the court it is not he
but the usufructuary who is entitled to said rents? As long
as the property is properly conserved and insured he can
have no cause for complaint, and his right in that regard is
fully protected by the terms of the stipulation and the
judgment of the court above mentioned. To permit him to
arrogate to himself the privilege to choose the tenant, to
dictate the conditions of the lease, and to sue when the
lessee fails to comply therewith, would be to place the
usufructuary entirely at his mercy. It would place her in the
absurd situation of having a certain indisputable right
without the power to protect, enforce, and fully enjoy it.
One more detail needs clarification. In her complaint
for desahucio Josefa Fabie alleges that she needs the
premises in question to live in, as her former residence
was burned. Has she the right under the will and the
judgment in question to occupy said premises herself? We
think that, as a corollary to her right to all the rent, to
choose the tenant, and to fix the amount of the rent, she
necessarily has the right to choose herself as the tenant
thereof, if she wishes to; and, as she fulfills her obligation
to pay the taxes and insure and conserve the property
properly, the owner has no legitimate cause to complain.
As Judge Nable of the municipal court said in his decision,
"the pretension that the plaintiff, being a mere usufructuary
of the rents, cannot occupy the property, is illogical if it be
taken into account that that could not have been the
intention of the testatrix."
We find that upon the pleadings, the undisputed facts, and
the law the action instituted in the municipal court by the
petitioner Josefa Fabie against the respondent Ngo Soo is
one of unlawful detainer, within the original jurisdiction of
said court, and that therefore Judges Dizon and Gutierrez
David of the Court of First Instance erred in holding
otherwise and in quashing the case upon appeal.
2. The next question to determine is the propriety of the
remedy availed of by the petitioner in this Court. Judging
from the allegations and the prayer of the petition, it is in
the nature of certiorari and mandamus, to annul the order
of dismissal and to require the Court of First Instance to try
and decide the appeal on the merits. Under section 3 of
Rule 67, when any tribunal unlawfully neglects the
performance of an act which the law specifically enjoins as
a duty resulting from an office, and there is no other plain,
speedy, and adequate remedy in the ordinary course of
law, it may be compelled by mandamus to do the act
required to be done to protect the rights of the petitioner. If,
as we find, the case before the respondent judge is one of
unlawful detainer, the law specifically requires him to hear
and decide that case on the merits, and his refusal to do
so would constitute an unlawful neglect in the performance
of that duty within section 3 of Rule 67. Taking into
consideration that the law requires that an unlawful
detainer case be promptly decided (sections 5 and 8, Rule
72),it is evident that an appeal from the order of dismissal
would not be a speedy and adequate remedy; and under
the authority of Cecilio vs. Belmonte (48 Phil., 243, 255),
and Aguilar vs. Cabrera and Flameño (G.R. No. 49129),
we hold that mandamus lies in this case.
3. The contention of the petitioner that the appeal of the
intervenor Juan Grey was filed out of time is not well
founded. Although said respondent received copy of the
decision of the municipal court on August 3, 1945,
according to the petitioner (on August 6, 1945, according
to the said respondent), it appears from the sworn answer
of the respondent Ngo Soo in this case that on August 8
he filed a motion for reconsideration, which was granted in
part on August 18. Thus, if the judgment was modified on
August 18, the time for the intervenor Juan Grey to appeal
therefrom did not run until he was notified of said judgment
as modified, and since he filed his notice of appeal on
August 23, it would appear that his appeal was filed on
time. However, we observe in this connection that said
appeal of the intervenor Juan Grey, who chose not to
answer the petition herein, would be academic in view of
the conclusions we have reached above that the rights
between him as owner and Josefa Fabie as usufructuary
of the property in question have been definitely settled by
final judgment in civil case No. 1659 of the Court of First
Instance of Manila in the sense that the usufructuary has
the right to administer and possess the property in
question, subject to certain specified obligations on her
part.

The orders of dismissal of the respondent Court of First

Instance, dated September 22 and October 31, 1945, in
the desahucio case (No. 71149) are set aside that court is
directed to try and decide the said case on the merits; with
the costs hereof against the respondent Ngo Soo.
 Village Subdivision, Bajada, Davao City, 9501, … and
G.R. No. 152809 August 3, 2006 hereby declare:

MERCEDES MORALIDAD, Petitioner, 1. That it is my desire that Mr. and Mrs. Diosdado M.
vs. Pernes may build their house therein and stay as long as
SPS. DIOSDADO PERNES and ARLENE they like;
PERNES, Respondents.
2. That anybody of my kins who wishes to stay on the
DECISION aforementioned real property should maintain an
atmosphere of cooperation, live in harmony and must
avoid bickering with one another;
GARCIA, J.:

3. That anyone of my kins may enjoy the privilege to stay

Under consideration is this petition for review on certiorari
therein and may avail the use thereof. Provided, however,
under Rule 45 of the Rules of Court to nullify and set aside
that the same is not inimical to the purpose thereof;
the following issuances of the Court of Appeals (CA) in
CA-G.R. SP No. 61610, to wit:
4. That anyone of my kins who cannot conform with the
wishes of the undersigned may exercise the freedom to
1. Decision dated September 27, 2001, 1 affirming an
look for his own;
earlier decision of the Regional Trial Court (RTC) of Davao
City which reversed that of the Municipal Trial Court in
Cities (MTCC), Davao City, Branch 1, in an action for 5. That any proceeds or income derived from the
unlawful detainer thereat commenced by the petitioner aforementioned properties shall be allotted to my nearest
against the herein respondents; and kins who have less in life in greater percentage and lesser
percentage to those who are better of in standing.
2. Resolution dated February 28, 2002, 2 denying
petitioner’s motion for reconsideration. xxx xxx xxx

At the heart of this controversy is a parcel of land located Following her retirement in 1993, petitioner came back to
in Davao City and registered in the name of petitioner the Philippines to stay with the respondents’ on the house
Mercedes Moralidad under Transfer Certificate of Title they build on the subject property. In the course of time,
(TCT) No. T-123125 of the Registry of Deeds of Davao their relations turned sour because members of the Pernes
City. family were impervious to her suggestions and attempts to
change certain practices concerning matters of health and
sanitation within their compound. For instance, Arlene’s
In her younger days, petitioner taught in Davao City,
eldest son, Myco Pernes, then a fourth year veterinary
Quezon City and Manila. While teaching in Manila, she
medicine student, would answer petitioner back with
had the good fortune of furthering her studies at the
clenched fist and at one time hurled profanities when she
University of Pennsylvania, U.S.A. While schooling, she
corrected him. Later, Arlene herself followed suit. Petitioner
was offered to teach at the Philadelphia Catholic
brought the matter to the local barangay lupon where she
Archdiocese, which she did for seven (7) years. Thereafter,
lodged a complaint for slander, harassment, threat and
she worked at the Mental Health Department of said
defamation against the Pernes Family. Deciding for
University for the next seventeen (17) years.
petitioner, the lupon apparently ordered the Pernes family
to vacate petitioner’s property but not after they are
During those years, she would come home to the reimbursed for the value of the house they built thereon.
Philippines to spend her two-month summer vacation in Unfortunately, the parties could not agree on the amount,
her hometown in Davao City. Being single, she would thus prolonging the impasse between them.
usually stay in Mandug, Davao City, in the house of her
niece, respondent Arlene Pernes, a daughter of her
Other ugly incidents interspersed with violent
younger sister, Rosario.
confrontations meanwhile transpired, with the petitioner
narrating that, at one occasion in July 1998, she sustained
Back in the U.S.A. sometime in 1986, she received news cuts and wounds when Arlene pulled her hair, hit her on
from Arlene that Mandug at the outskirts of Davao City was the face, neck and back, while her husband Diosdado held
infested by NPA rebels and many women and children her, twisting her arms in the process.
were victims of crossfire between government troops and
the insurgents. Shocked and saddened about this
Relations having deteriorated from worse to worst,
development, she immediately sent money to Araceli,
petitioner, on July 29, 1998, lodged a formal complaint
Arlene’s older sister, with instructions to look for a lot in
before the Regional Office of the Ombudsman for
Davao City where Arlene and her family could transfer and
Mindanao, charging the respondent spouses, who were
settle down. This was why she bought the parcel of land
both government employees, with conduct unbecoming of
covered by TCT No. T-123125.
public servants. This administrative case, however, did not
prosper.
Petitioner acquired the lot property initially for the purpose
of letting Arlene move from Mandug to Davao City proper
Then, on August 3, 1998, petitioner filed with the MTCC of
but later she wanted the property to be also available to
Davao City an unlawful detainer suit against the
any of her kins wishing to live and settle in Davao City.
respondent spouses. Petitioner alleged that she is the
Petitioner made known this intention in a document she
registered owner of the land on which the respondents
executed on July 21, 1986. 3 The document reads:
built their house; that through her counsel, she sent the
respondent spouses a letter demanding them to vacate the
I, MERCEDES VIÑA MORALIDAD, of legal age, single, premises and to pay rentals therefor, which the
having been born on the 29th day of January, 1923, now respondents refused to heed.
actually residing at 8021 Lindbergh Boulevard,
Philadelphia, Pennsylvania, U.S.A., wishes to convey my
honest intention regarding my properties situated at Palm
In their defense, the respondents alleged having entered
the property in question, building their house thereon and
maintaining the same as their residence with petitioner’s
full knowledge and express consent. To prove their point,
they invited attention to her written declaration of July 21,
1986, supra, wherein she expressly signified her desire for
the spouses to build their house on her property and stay
thereat for as long as they like.
The MTCC, resolving the ejectment suit in petitioner’s
favor, declared that the respondent spouses, although
builders in good faith vis-à-vis the house they built on her
property, cannot invoke their bona fides as a valid excuse
for not complying with the demand to vacate. To the
MTCC, respondents’ continued possession of the
premises turned unlawful upon their receipt of the demand
to vacate, such possession being merely at petitioner’s
tolerance, and sans any rental. Accordingly, in its decision
dated November 17, 1999, 4 the MTCC rendered judgment
for the petitioner, as plaintiff therein, to wit:
WHEREFORE, judgment is hereby rendered in favor of
herein plaintiff and against the defendants, as follows:
a) Directing the defendants, their agents and other
persons acting on their behalf to vacate the premises and
to yield peaceful possession thereof to plaintiff;
b) Ordering defendants to pay P2,000.00 a month from the
filing of this complaint until they vacate premises;
c) Sentencing defendants to pay the sum
of P120,000.00 5 as attorney’s fees and to pay the cost of
suit.
Defendants counterclaim are hereby dismissed except
with respect to the claim for reimbursement of necessary
and useful expenses which should be litigated in an
ordinary civil actions. (sic)
Dissatisfied, the respondent spouses appealed to the RTC
of Davao City.
In the meantime, petitioner filed a Motion for Execution
Pending Appeal. The motion was initially granted by the
RTC in its Order of February 29, 2000, but the Order was
later withdrawn and vacated by its subsequent Order
dated May 9, 2000 6 on the ground that immediate
execution of the appealed decision was not the prudent
course of action to take, considering that the house the
respondents constructed on the subject property might
even be more valuable than the land site.
Eventually, in a decision 7 dated September 30, 2000, the
RTC reversed that of the MTCC, holding that respondents’
possession of the property in question was not, as ruled by
the latter court, by mere tolerance of the petitioner but
rather by her express consent. It further ruled that Article
1678 of the Civil Code on reimbursement of improvements
introduced is inapplicable since said provision
contemplates of a lessor-lessee arrangement, which was
not the factual milieu obtaining in the case. Instead, the
RTC ruled that what governed the parties’ relationship are
Articles 448 and 546 of the Civil Code, explaining thus:
Since the defendants-appellees [respondents] are
admittedly possessors of the property by permission from
plaintiff [petitioner], and builders in good faith, they have
the right to retain possession of the property subject of this
case until they have been reimbursed the cost of the
improvements they have introduced on the property.
Indeed, this is a substantive right given to the defendants
by law, and this right is superior to the procedural right to
[sic] plaintiff to immediately ask for their removal by a writ
of execution by virtue of a decision which as we have
shown is erroneous, and therefore invalid. (Words in
brackets supplied),
and accordingly dismissed petitioner’s appeal, as follows:
WHEREFORE, in view of the foregoing, the Decision
appealed from is REVERSED and declared invalid.
Consequently, the motion for execution pending appeal is
likewise denied.
Counter-claims of moral and exemplary damages claimed
by defendants are likewise dismissed. However, attorney’s
fees in the amount of fifteen thousand pesos is hereby
awarded in favor of defendants-appellants, and against
plaintiffs.
SO ORDERED. 8
Therefrom, petitioner went to the CA in CA-G.R. SP No.
61610.
On September 27, 2001, the CA, while conceding the
applicability of Articles 448 and 546 of the Civil Code to the
case, ruled that it is still premature to apply the same
considering that the issue of whether respondents’ right to
possess a portion of petitioner’s land had already expired
or was already terminated was not yet resolved. To the CA,
the unlawful detainer suit presupposes the cessation of
respondents’ right to possess. The CA further ruled that
what governs the rights of the parties is the law on usufruct
but petitioner failed to establish that respondents’ right to
possess had already ceased. On this premise, the CA
concluded that the ejectment suit instituted by the
petitioner was premature. The appellate court thus
affirmed the appealed RTC decision, disposing:
WHEREFORE, premises considered, the instant petition
for review is hereby denied for lack of merit. Accordingly,
the petitioner’s complaint for Unlawful Detainer is
DISMISSED.
SO ORDERED.
With the CA’s denial of her motion for reconsideration in its
Resolution of February 28, 2002, petitioner is now before
this Court raising the following issues:
I. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN DISMISSING THE UNLAWFUL DETAINER
CASE FOR BEING PREMATURE WHICH DECISION IS
NOT IN ACCORDANCE WITH LAW AND
JURISPRUDENCE.
II. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN APPLYING ARTICLES 448 AND 546 AND THE
PROVISIONS OF THE CODE ON USUFRUCT INSTEAD
OF ARTICLE 1678 OF THE CIVIL CODE.
The Court rules for the petitioner.
The Court is inclined to agree with the CA that what was
constituted between the parties herein is one of usufruct
over a piece of land, with the petitioner being the owner of
the property upon whom the naked title thereto remained
and the respondents being two (2) among other unnamed
usufructuaries who were simply referred to as petitioner’s
kin. The Court, however, cannot go along with the CA’s
holding that the action for unlawful detainer must be
dismissed on ground of prematurity.
Usufruct is defined under Article 562 of the Civil Code in
the following wise:
ART. 562. Usufruct gives a right to enjoy the property of
another with the obligation of preserving its form and
substance, unless the title constituting it or the law
otherwise provides.
Usufruct, in essence, is nothing else but simply allowing
one to enjoy another’s property. 9 It is also defined as the
right to enjoy the property of another temporarily, including
both the jus utendi and the jus fruendi, 10 with the owner
retaining the jus disponendi or the power to alienate the
same. 11
It is undisputed that petitioner, in a document dated July
21, 1986, supra, made known her intention to give
respondents and her other kins the right to use and to
enjoy the fruits of her property. There can also be no
quibbling about the respondents being given the right "to
build their own house" on the property and to stay thereat
"as long as they like." Paragraph #5 of the same document
earmarks "proceeds or income derived from the
aforementioned properties" for the petitioner’s "nearest
kins who have less in life in greater percentage and lesser
percentage to those who are better of (sic) in standing."
The established facts undoubtedly gave respondents not
only the right to use the property but also granted them,
among the petitioner’s other kins, the right to enjoy the
fruits thereof. We have no quarrel, therefore, with the CA’s
ruling that usufruct was constituted between petitioner and
respondents. It is thus pointless to discuss why there was
no lease contract between the parties.
However, determinative of the outcome of the ejectment
case is the resolution of the next issue, i.e., whether the
existing usufruct may be deemed to have been
extinguished or terminated. If the question is resolved in
the affirmative, then the respondents’ right to possession,
proceeding as it did from their right of usufruct, likewise
ceased. In that case, petitioner’s action for ejectment in the
unlawful detainer case could proceed and should prosper.
The CA disposed of this issue in this wise:
xxx Section 1, Rule 70 of the 1997 Rules of Civil
Procedure, as amended, provides xxx
xxx xxx xxx
From the foregoing provision, it becomes apparent that for
an action for unlawful detainer to prosper, the plaintiff
[petitioner] needs to prove that defendants’ [respondents’]
right to possess already expired and terminated. Now, has
respondents’ right to possess the subject portion of
petitioner’s property expired or terminated? Let us
therefore examine respondents’ basis for occupying the
same.
It is undisputed that petitioner expressly authorized
respondents o occupy portion of her property on which
their house may be built. Thus – "it is my desire that Mr.
and Mrs. Diosdado M. Pernes may build their house
therein and stay as long as they like." From this statement,
it seems that petitioner had given the respondents the
usufructuary rights over the portion that may be occupied
by the house that the latter would build, the duration of
which being dependent on how long respondents would
like to occupy the property. While petitioner had already
demanded from the respondents the surrender of the
premises, this Court is of the opinion that the usufructuary
rights of respondents had not been terminated by the said
demand considering the clear statement of petitioner that
she is allowing respondents to occupy portion of her land
as long as the latter want to. Considering that respondents
still want to occupy the premises, petitioner clearly cannot
eject respondents. 12
We disagree with the CA’s conclusion of law on the matter.
The term or period of the usufruct originally specified
provides only one of the bases for the right of a
usufructuary to hold and retain possession of the thing
given in usufruct. There are other modes or instances
whereby the usufruct shall be considered terminated or
extinguished. For sure, the Civil Code enumerates such
other modes of extinguishment:
ART. 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless a contrary
intention clearly appears;
(2) By expiration of the period for which it was constituted,
or by the fulfillment of any resolutory condition provided in
the title creating the usufruct;
(3) By merger of the usufruct and ownership in the same
person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting
the usufruct;
(7) By prescription. (Emphasis supplied.)
The document executed by the petitioner dated July 21,
1986 constitutes the title creating, and sets forth the
conditions of, the usufruct. Paragraph #3 thereof states
"[T]hat anyone of my kins may enjoy the privilege to stay
therein and may avail the use thereof. Provided, however,
that the same is not inimical to the purpose thereof"
(Emphasis supplied). What may be inimical to the purpose
constituting the usufruct may be gleaned from the
preceding paragraph wherein petitioner made it
abundantly clear "that anybody of my kins who wishes to
stay on the aforementioned property should maintain an
atmosphere of cooperation, live in harmony and must
avoid bickering with one another." That the maintenance of
a peaceful and harmonious relations between and among
kin constitutes an indispensable condition for the
continuance of the usufruct is clearly deduced from the
succeeding Paragraph #4 where petitioner stated "[T]hat
anyone of my kins who cannot conform with the wishes of
the undersigned may exercise the freedom to look for his
own." In fine, the occurrence of any of the following: the
loss of the atmosphere of cooperation, the bickering or the
cessation of harmonious relationship between/among kin
constitutes a resolutory condition which, by express wish
of the petitioner, extinguishes the usufruct.
From the pleadings submitted by the parties, it is
indubitable that there were indeed facts and circumstances
whereby the subject usufruct may be deemed terminated
or extinguished by the occurrence of the resolutory
conditions provided for in the title creating the usufruct,
namely, the document adverted to which the petitioner
executed on July 21, 1986.
As aptly pointed out by the petitioner in her Memorandum, No pronouncement as to costs.
respondents’ own evidence before the MTCC indicated
that the relations between the parties "have deteriorated to SO ORDERED.
almost an irretrievable level." 13 There is no doubt then that
what impelled petitioner to file complaints before the local
barangay lupon, the Office of the Ombudsman for
Mindanao, and this instant complaint for unlawful detainer
before the MTCC is that she could not live peacefully and
harmoniously with the Pernes family and vice versa.

Thus, the Court rules that the continuing animosity

between the petitioner and the Pernes family and the
violence and humiliation she was made to endure, despite
her advanced age and frail condition, are enough factual
bases to consider the usufruct as having been terminated.

To reiterate, the relationship between the petitioner and

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

If the builder is a usufructuary, his rights will be governed

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

By express provision of law, respondents, as usufructuary,

do not have the right to reimbursement for the
improvements they may have introduced on the property.
We quote Articles 579 and 580 of the Civil Code:

Art. 579. The usufructuary may make on the property held

in usufruct such useful improvements or expenses for
mere pleasure as he may deem proper, provided he does
not alter its form or substance; but he shall have no right to
be indemnified therefor. He may, however, remove such
improvements, should it be possible to do so without
damage to the property. (Emphasis supplied.)

Art. 580. The usufructuary may set off the improvements

he may have made on the property against any damage to
the same.

Given the foregoing perspective, respondents will have to

be ordered to vacate the premises without any right of
reimbursement. If the rule on reimbursement or indemnity
were otherwise, then the usufructuary might, as an author
pointed out, improve the owner out of his property. 15 The
respondents may, however, remove or destroy the
improvements they may have introduced thereon without
damaging the petitioner’s property.

Out of the generosity of her heart, the petitioner has

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

WHEREFORE, the petition is GRANTED. The assailed

Decision and Resolution of the CA are REVERSED and
SET ASIDE. Accordingly, the decision of the MTCC is
REINSTATED with MODIFICATION that all of respondents’
counterclaims are dismissed, including their claims for
reimbursement of useful and necessary expenses.