THE GENERAL LAW ON PROPERTY A.

Constitutional Fram ework

RIGHTS
Art. II, Sec. 5 The maintenance of peace and order, the
protection of life, liberty, and property, and promotion of the
- PROPERTY – all things that are or may be the object of
general welfare are essential for the enjoyment by all the
appropriation
people of the blessings of democracy.
o Has the character of exclusivity; one may exclude the
whole world from exercising the same right that he does
- The provision states an order of preference, or hierarchy,
over the property
among rights: life, liberty, then property
o Exercise exclusive power to exclude everyone else =
- Property is “essential to democracy” as it provides stability; a
basic concept of property
lack of concept of property in democracies will lead to chaos
o The definition from the Civil Code lacks this quality of
as citizens will continue to fight over the ownership of things
exclusivity, that which gives the appropriated object the
and there will be no respect for property rights
character of property.
o Political justification for it is because it is an “essential
o This definition/concept can be traced back to Roman
right”
Times, which was then appropriated by the Spanish Civil
Code, and eventually, our own Civil Code.
o Property is important for survival as it is through property Art. II, Sec. 10 The State shall promote social justice in all
that we mostly procure our needs phases of national development.
o The primitive concept of property can be seen in the
principle of TERRITORIALITY – as seen in dogs, insects, Art. III, Sec. 1 No person shall be deprived of life, liberty, or
other mammals property without due process of law, nor shall any person be
! Its purpose is for SUSTENANCE, the basic need for denied the equal protection of the laws.
SURVIVAL
! Basic purpose, even of humans, for territory, was - EPC, in relation to property: similarly situated to other
sustenance fundamental rights (?)
- Appropriation – actions that are exclusive in nature and
exercised over property Art. III, Sec. 9 Private property shall not be taken for public
o Appropriation turns thing into property use without just compensation.
o Simple definition: intent to own, possess, or use
o With a qualifier (to make it property): intention/action - The provision is a protection for the citizen from the possible
must be EXCLUSIVE to that person abuse of the State of its power of eminent domain by
! Exclusivity makes it property requiring the payment of just compensation
! Ability of person to exclude other persons from that - Bill of rights provision directly related to property
property and prevent others from exercising that right - Abuse of state jeopardizes the very essence of life because
- Lockean Theory of Property – property becomes such of the importance of property as a source of livelihood and
only when human labor is applied to things coming from survival
nature; it is only labor that which truly belongs to an - Eminent domain clause
individual. So when it mixes with things from nature, the
latter acquires the nature of the former, turning that thing
Art. III, Sec. 10 No law impairing the obligation of contracts
into that individual’s property.
shall be passed.
o Property is something in nature to which human labor has
been applied
- Even obligations and contracts may be considered as
o Why an object in common becomes unique when you
property of an individual. This provision provides protection
add labor:
against their impairment
! Things in the natural world are owned by everyone
- Obligations are also considered as rights
! Labor is the only thing that belongs to the individual
- Non-impairment clause
! Labor mixed with the natural thing makes the thing
exclusively his
Art. V, Sec. 1 Suffrage may be exercised by all citizens of the
Philippines, not otherwise disqualified by law, who are at least
eighteen years of age, and who shall have resided in the
Philippines for at least one year and in the place wherein they
propose to vote, for at least six months immediately preceding
the election. No literacy, property, or other substantive
requirement shall be imposed on the exercise of suffrage.

PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO 1

Art. XII, Sec. 6 The use of property bears a social function,
and all economic agents shall contribute to the common good.
Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have
the right to own, establish, and operate economic enterprises,
subject to the duty of the State to promote distributive justice
and to intervene when the common good so demands.
- Why property has a social function: use of property has
EFFECTS
- This is the justification for the regulation of property rights
ART. XIII – SOCIAL JUSTICE AND HUMAN RIGHTS
Sec. 1 The Congress shall give highest priority to the
enactment of measures that protect and enhance the right of
all the people to human dignity, reduce social, economic, and
political inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for the common
good.
To this end, the State shall regulate the acquisition, ownership,
use, and disposition of property and its increments.
Sec. 2 The promotion of social justice shall include the
commitment to create economic opportunities based on
freedom of initiative and self-reliance.
ART. XIII – LABOR
Sec. 3 The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful
concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting
their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility
between workers and employers and the preferential use of
voluntary modes in settling disputes, including conciliation,
and shall enforce their mutual compliance therewith to foster
industrial peace.
The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in the
fruits of production and the right of enterprises to reasonable
returns to investments, and to expansion and growth.
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ART. XIII – AGRARIAN AND NATURAL RESOURCES
REFORM
Sec 4 The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular
farmworkers who are landless, to own directly or collectively
the lands they till or, in the case of other farmworkers, to
receive a just share of the fruits thereof. To this end, the State
shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations,
and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of
small landowners. The State shall further provide incentives for
voluntary land-sharing.
Sec. 5 The State shall recognize the right of farmers,
farmworkers, and landowners, as well as cooperatives, and
other independent farmers' organizations to participate in the
planning, organization, and management of the program, and
shall provide support to agriculture through appropriate
technology and research, and adequate financial, production,
marketing, and other support services.
Sec. 6 The State shall apply the principles of agrarian reform
or stewardship, whenever applicable in accordance with law, in
the disposition or utilization of other natural resources,
including lands of the public domain under lease or concession
suitable to agriculture, subject to prior rights, homestead rights
of small settlers, and the rights of indigenous communities to
their ancestral lands.
The State may resettle landless farmers and farmworkers in its
own agricultural estates which shall be distributed to them in
the manner provided by law.
Sec. 7 The State shall protect the rights of subsistence
fishermen, especially of local communities, to the preferential
use of the communal marine and fishing resources, both inland
and offshore. It shall provide support to such fishermen
through appropriate technology and research, adequate
financial, production, and marketing assistance, and other
services. The State shall also protect, develop, and conserve
such resources. The protection shall extend to offshore fishing
grounds of subsistence fishermen against foreign intrusion.
Fishworkers shall receive a just share from their labor in the
utilization of marine and fishing resources.
Sec. 8 The State shall provide incentives to landowners to
invest the proceeds of the agrarian reform program to
promote industrialization, employment creation, and
privatization of public sector enterprises. Financial instruments
used as payment for their lands shall be honored as equity in
enterprises of their choice.
ART. XIII – URBAN LAND REFORM AND HOUSING
Sec. 9 The State shall, by law, and for the common good,
undertake, in cooperation with the private sector, a continuing
program of urban land reform and housing which will make
available at affordable cost, decent housing and basic services
to under-privileged and homeless citizens in urban centers and
resettlement areas. It shall also promote adequate
employment opportunities to such citizens. In the
implementation of such program the State shall respect the
rights of small property owners.
Sec. 10 Urban or rural poor dwellers shall not be evicted nor
their dwelling demolished, except in accordance with law and
in a just and humane manner.
No resettlement of urban or rural dwellers shall be undertaken
without adequate consultation with them and the communities
where they are to be relocated.
ART. XIII – HEALTH
Sec. 11 The State shall adopt an integrated and
comprehensive approach to health development which shall
endeavor to make essential goods, health and other social
services available to all the people at affordable cost. There
shall be priority for the needs of the under-privileged, sick,
elderly, disabled, women, and children. The State shall
endeavor to provide free medical care to paupers.
Sec. 12 The State shall establish and maintain an effective
food and drug regulatory system and undertake appropriate
health, manpower development, and research, responsive to
the country's health needs and problems.
Sec. 13 The State shall establish a special agency for disabled
person for their rehabilitation, self-development, and self-
reliance, and their integration into the mainstream of society.
ART. XIII – WOMEN
Sec. 14 The State shall protect working women by providing
safe and healthful working conditions, taking into account their
maternal functions, and such facilities and opportunities that
will enhance their welfare and enable them to realize their full
potential in the service of the nation.
ART. XIII – ROLE AND RIGHTS OF PEOPLE'S
ORGANIZATIONS
Sec. 15 The State shall respect the role of independent
people's organizations to enable the people to pursue and
protect, within the democratic framework, their legitimate and
collective interests and aspirations through peaceful and lawful
means.
People's organizations are bona fide associations of citizens
with demonstrated capacity to promote the public interest and
with identifiable leadership, membership, and structure.
PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
Sec. 16 The right of the people and their organizations to
effective and reasonable participation at all levels of social,
political, and economic decision-making shall not be abridged.
The State shall, by law, facilitate the establishment of adequate
consultation mechanisms.
ART. XIII – HUMAN RIGHTS
Sec. 17
(1) There is hereby created an independent office called the
Commission on Human Rights.
(2) The Commission shall be composed of a Chairman and
four Members who must be natural-born citizens of the
Philippines and a majority of whom shall be members of the
Bar. The term of office and other qualifications and
disabilities of the Members of the Commission shall be
provided by law.
(3) Until this Commission is constituted, the existing
Presidential Committee on Human Rights shall continue to
exercise its present functions and powers.
(4) The approved annual appropriations of the Commission
shall be automatically and regularly released.
Sec. 18 The Commission on Human Rights shall have the
following powers and functions:
(1) Investigate, on its own or on complaint by any party, all
forms of human rights violations involving civil and political
rights;
(2) Adopt its operational guidelines and rules of procedure,
and cite for contempt for violations thereof in accordance
with the Rules of Court;
(3) Provide appropriate legal measures for the protection of
human rights of all persons within the Philippines, as well
as Filipinos residing abroad, and provide for preventive
measures and legal aid services to the under-privileged
whose human rights have been violated or need
protection;
(4) Exercise visitorial powers over jails, prisons, or detention
facilities;
(5) Establish a continuing program of research, education,
and information to enhance respect for the primacy of
human rights;
(6) Recommend to Congress effective measures to promote
human rights and to provide for compensation to victims
of violations of human rights, or their families;
(7) Monitor the Philippine Government's compliance with
international treaty obligations on human rights;
(8) Grant immunity from prosecution to any person whose
testimony or whose possession of documents or other
evidence is necessary or convenient to determine the truth
in any investigation conducted by it or under its authority;
(9) Request the assistance of any department, bureau, office,
or agency in the performance of its functions;
(10) Appoint its officers and employees in accordance with law;
and
(11) Perform such other duties and functions as may be
provided by law.
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Sec. 19 The Congress may provide for other cases of
violations of human rights that should fall within the authority
of the Commission, taking into account its recommendations.
- Art. XIII, Sec. 1 is a directive to Congress to enact laws that
promote social justice; laws that regulate acquisition,
ownership, use and disposition of property
- Art. XIII seeks to protect those deemed to be marginalized
sectors
- Congress is allowed a wide latitude because of the social
function effects of property
- Social Justice is the ultimate regulation of property rights
UDHR Art. 2 Everyone is entitled to all the rights and
freedoms set forth in this Declaration, without distinction of
any kind, such as race, colour, sex, language, religion, political,
or other opinion, national or social origin, property, birth or
other status. Furthermore, no distinction shall be made on the
basis of the political, jurisdictional or international status of the
country or territory to which a person belongs, whether it be
independent, trust, non-self-governing or under any other
limitation of sovereignty.
- The right to have property is an inherent human right and
may not be used as a basis of discrimination
- Non-discrimination on the basis of, among other things,
property
- Entitlement of rights based on non-discrimination
- Property as a criteria of non-discrimination
- Concerned with the EPC
UDHR Art. 17
(1) Everyone has the right to own property alone as well as in
association with others.
(2) No one shall be arbitrarily deprived of his property.
o As the use of property is a social function, which has
effects on society, the State must regulate its acquisition,
use and disposition.
o The provision allows Congress a wide latitude in enacting
laws that intervene with the exercise of property rights.
Phil. Blooming Mills Employees Org. v. Phil. Blooming Mills
- Freedom of expression: to preserve the vitality and
exercise of those other rights, so you maintain all civil and
political rights
o To preserve democracy, pursuant to Art. II, Sec. 5
- Why Freedom > Property
o Test used (vs. Gov’t): stricter for freedom
o Prescriptibility: only for property, none for freedom
o Preserves ideals of democracy > preserves property (lol
imbento)
4 Arguments for the Primacy of Human Rights over Property
Rights (Phil. Blooming Mills)
1. As to tests employed – only the Rational Basis Test is
employed with regard to State action that impedes on
property rights while the more stringent Grave Danger Test is
employed for those that impede on human rights
2. As to prescription – property and property rights may be lost
through prescription, as may be set by law but human rights
are imprescriptible
3. As to the protection of rights – human rights are essential to
preserve the vitality of all other civil (under which property
rights are included) and political rights
4. As to preferential treatment – human rights are recognized to
be “delicate and vulnerable” and that the “threat of
sanctions may deter their exercise almost as potently as the
actual application of sanctions,” hence, the preferential
treatment/protection afforded to it; meanwhile, property
rights are not as vulnerable to its exercise being impaired

- Right of all individuals to own, when criteria are satisfied

- Right to OWN property, not right TO property
- No one should be arbitrarily deprived of property
- Concerned with DPC (non-arbitrariness)

Social Justice as the limit on Property Rights

- It serves as the limit on the exercise of property rights. As
embodied in Article XIII of the 1987 Constitution, it limits
property rights in the following manner:
o It is a directive to Congress to enact laws that regulate
the acquisition, use and disposition of property rights.
o It prioritizes the welfare of certain sectors and directs the
State to focus its effort and resources (property) towards
these sectors. They include labor, urban and rural land
reform, health, women and children, and human rights.
- It finds its justification in Art. XII, Sec. 6 of the 1987
Constitution

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B. Property Rights in Philippine Civil Law
- These property rights are subject to limitations seen in the
Constitution
- Social Justice is a limitation
1. Natural Persons
- It is birth that determines their legal personality/capacity
- They can be dealt with as individuals or collectively

Art. 414 All things which are or may be the object of
appropriation are considered either:
(1) Immovable or real property; or
(2) Movable or personal property.
- Using “appropriation” is flawed because it doesn’t account
for EXCLUSIVITY, which gives a thing the characteristic of
property
o Exclusivity gives it the characteristic of property
o The appropriation, exclusive of all other people
Art. 427 Ownership may be exercised over things or rights.
Art. 428 The owner has the right to enjoy and dispose of a
thing, without other limitations than those established by law.
Art. 523 Possession is the holding of a thing or the enjoyment
of a right.
On Individuals
Art. 37 Juridical capacity, which is the fitness to be the
subject of legal relations, is inherent in every natural person
and is lost only through death. Capacity to act, which is the
power to do acts with legal effect, is acquired and may be lost.
Art. 38 Minority, insanity or imbecility, the state of being a
deaf-mute, prodigality and civil interdiction are mere
restrictions on capacity to act, and do not exempt the
incapacitated person from certain obligations, as when the
latter arise from his acts or from property relations, such as
easements.
Art. II, Sec. 5 The maintenance of peace and order, the
protection of life, liberty, and property, and promotion of the
general welfare are essential for the enjoyment by all the
people of the blessings of democracy.

Art. 562 Usufruct gives a right to enjoy the property of UDHR Art. 2 Everyone is entitled to all the rights and
another with the obligation of preserving its form and freedoms set forth in this Declaration, without distinction of
substance, unless the title constituting it or the law otherwise any kind, such as race, colour, sex, language, religion, political,
provides. or other opinion, national or social origin, property, birth or
other status. Furthermore, no distinction shall be made on the
basis of the political, jurisdictional or international status of the
Real Rights Personal Rights
country or territory to which a person belongs, whether it be
Person(s) upon Active subject may Active subject
independent, trust, non-self-governing or under any other
whom right will be exercise the right (creditor) has a
limitation of sovereignty.
exercised against ALL definite passive
persons/the whole subject (debtor)
world UDHR Art. 17
Subject matter Almost always a Subject matter is (1) Everyone has the right to own property alone as well as in
corporeal thing always incorporeal association with others.
(e.g., property) (2) No one shall be arbitrarily deprived of his property.
Extinguishment of Real Rights are The Personal Right
the right with generally survives the loss or
respect to subject extinguished when destruction of the
matter the thing, upon subject matter
which it is exercised,
is lost or destroyed.
Cause of Action It may be directed Is binding only
against the whole against a particular
world, and real person and only
actions (in rem) may personal actions (in
be taken against 3rd personam) may be
persons taken against them.

C. Rights Holders

PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO 5

On Marital Partners
FC Art. 88. The absolute community of property between
spouses shall commence at the precise moment that the
marriage is celebrated. Any stipulation, express or implied, for
the commencement of the community regime at any other
time shall be void
FC Art. 90. The provisions on co-ownership shall apply to the
absolute community of property between the spouses in all
matters not provided for in this Chapter
FC Art. 91. Unless otherwise provided in this Chapter or in
the marriage settlements, the community property shall consist
of all the property owned by the spouses at the time of the
celebration of the marriage or acquired thereafter
FC Art. 92. The following shall be excluded from the
community property:
(3) Property acquired during the marriage by gratuitous title by
either spouse, and the fruits as well as the income thereof,
if any, unless it is expressly provided by the donor, testator
or grantor that they shall form part of the community
property;
(4) Property for personal and exclusive use of either spouse.
However, jewelry shall form part of the community
property;
(5) Property acquired before the marriage by either spouse
who has legitimate descendants by a former marriage, and
the fruits as well as the income, if any, of such property.
FC Art. 93 Property acquired during the marriage is
presumed to belong to the community, unless it is proved that
it is one of those excluded therefrom.
FC Art. 105 In case the future spouses agree in the marriage
settlements that the regime of conjugal partnership gains shall
govern their property relations during marriage, the provisions
in this Chapter shall be of supplementary application.
The provisions of this Chapter shall also apply to conjugal
partnerships of gains already established between spouses
before the effectivity of this Code, without prejudice to vested
rights already acquired in accordance with the Civil Code or
other laws, as provided in Article 256
FC Art. 106 Under the regime of conjugal partnership of
gains, 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, and, upon dissolution of the
marriage or of the partnership, the net gains or benefits
obtained by either or both spouses shall be divided equally
between them, unless otherwise agreed in the marriage
settlements
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FC Art. 108 The conjugal partnership shall be governed by
the rules on the contract of partnership in all that is not in
conflict with what is expressly determined in this Chapter or by
the spouses in their marriage settlements.
FC Art. 116 All property acquired during the marriage,
whether the acquisition appears to have been made,
contracted or registered in the name of one or both spouses, is
presumed to be conjugal unless the contrary is proved.
- The disposition of conjugal property, when the property
regime is ACP or CPG, is limited by the requirement of
marital consent, or the consent of BOTH spouses
On Indigenous Peoples Communities
IPRA, Sec. 3 Definition of Terms – For purposes of this Act,
the following terms shall mean:
a) Ancestral Domains - Subject to Section 56 hereof, refer to
all areas generally belonging to ICCs/IPs comprising lands,
inland waters, coastal areas, and natural resources therein,
held under a claim of ownership, occupied or possessed by
ICCs/IPs, by themselves or through their ancestors,
communally or individually since time immemorial,
continuously to the present except when interrupted by
war, force majeure or displacement by force, deceit, stealth
or as a consequence of government projects or any other
voluntary dealings entered into by government and private
individuals/corporations, and which are necessary to ensure
their economic, social and cultural welfare. It shall include
ancestral lands, forests, pasture, residential, agricultural,
and other lands individually owned whether alienable and
disposable or otherwise, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other natural
resources, and lands which may no longer be exclusively
occupied by ICCs/IPs but from which they traditionally had
access to for their subsistence and traditional activities,
particularly the home ranges of ICCs/IPs who are still
nomadic and/or shifting cultivators;
b) Ancestral Lands - Subject to Section 56 hereof, refers to
land occupied, possessed and utilized by individuals,
families and clans who are members of the ICCs/IPs since
time immemorial, by themselves or through their
predecessorsininterest, under claims of individual or
traditional group ownership, continuously, to the present
except when interrupted by war, force majeure or
displacement by force, deceit, stealth, or as a consequence
of government projects and other voluntary dealings
entered into by government and private
individuals/corporations including, but not limited to,
residential lots, rice terraces or paddies, private forests,
swidden farms and tree lots;
c) Certificate of Ancestral Domain Title - refers to a title
formally recognizing the rights of possession and ownership
of ICCs/IPs over their ancestral domains identified and
delineated in accordance with this law;
d) Certificate of Ancestral Lands Title - refers to a title formally
recognizing the rights of ICCs/IPs over their ancestral lands;
e) Communal Claims - refer to claims on land, resources and
rights thereon; belonging to the whole community within a
defined territory;
f) Customary Laws - refer to a body of written and/or
unwritten rules, usages, customs and practices traditionally
and continually recognized, accepted and observed by
respective ICCs/IPs;
g) Free and Prior Informed Consent - as used in this Act shall
mean the consensus of all members of the ICCs/IPs to be
determined in accordance with their respective customary
laws and practices, free from any external manipulation,
interference coercion, and obtained after fully disclosing
the intent and scope of the activity, in a language and
process understandable to the community;
h) Indigenous Cultural Communities/Indigenous Peoples –
refer to a group of people or homogenous societies
identified by selfascription and ascription by others, who
have continuously lived as organized community on
communally bounded and defined territory, and who have,
under claims of ownership since time immemorial,
occupied, possessed and utilized such territories, sharing
common bonds of language, customs, traditions and other
distinctive cultural traits, or who have, through resistance to
political, social and cultural inroads of colonization,
nonindigenous religions and cultures, became historically
differentiated from the majority of Filipinos. ICCs/IPs shall
likewise include peoples who are regarded as indigenous
on account of their descent from the populations which
inhabited the country, at the time of conquest or
colonization, or at the time of inroads of nonindigenous
religions and cultures, or the establishment of present state
boundaries, who retain some or all of their own social,
economic, cultural and political institutions, but who may
have been displaced from their traditional domains or who
may have resettled outside their ancestral domains;
i) Indigenous Political Structures - refer to organizational and
cultural leadership systems, institutions, relationships,
patterns and processes for decisionmaking and
participation, identified by ICCs/IPs such as, but not limited
to, Council of Elders, Council of Timuays, Bodong Holders,
or any other tribunal or body of similar nature;
PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
j) Individual Claims - refer to claims on land and rights
thereon which have been devolved to individuals, families
and clans including, but not limited to, residential lots, rice
terraces or paddies and tree lots;
k) National Commission on Indigenous Peoples (NCIP) - refers
to the office created under his Act, which shall be under the
Office of the President, and which shall be the primary
government agency responsible for the formulation and
implementation of policies, plans and programs to
recognize, protect and promote the rights of ICCs/IPs;
l) Native Title - refers to preconquest rights to lands and
domains which, as far back as memory reaches, have been
held under a claim of private ownership by ICCs/IPs, have
never been public lands and are thus indisputably
presumed to have been held that way since before the
Spanish Conquest;
m) Nongovernment Organization - refers to a private,
nonprofit voluntary organization that has been organized
primarily for the delivery of various services to the ICCs/IPs
and has an established track record for effectiveness and
acceptability in the community where it serves;
n) People's Organization - refers to a private, nonprofit
voluntary organization of members of an ICC/IP which is
accepted as representative of such ICCs/IPs;
o) Sustainable Traditional Resource Rights - refer to the rights
of ICCs/IPs to sustainably use, manage, protect and
conserve a) land, air, water, and minerals; b) plants, animals
and other organisms; c) collecting, fishing and hunting
grounds; d) sacred sites; and e) other areas of economic,
ceremonial and aesthetic value in accordance with their
indigenous knowledge, beliefs, systems and practices; and
p) Time Immemorial - refers to a period of time when as far
back as memory can go, certain ICCs/IPs are known to have
occupied, possessed in the concept of owner, and utilized a
defined territory devolved to them, by operation of
customary law or inherited from their ancestors, in
accordance with their customs and traditions.
IPRA, Sec. 5 Indigenous Concept of Ownership – Indigenous
concept of ownership sustains the view that ancestral domains
and all resources found therein shall serve as the material
bases of their cultural integrity. The indigenous concept of
ownership generally holds that ancestral domains are the
ICC's/IP's private but community property which belongs to all
generations and therefore cannot be sold, disposed or
destroyed. It likewise covers sustainable traditional resource
rights.
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IPRA, Sec. 7 Rights to Ancestral Domains – The rights of
ownership and possession of ICCs/IPs to their ancestral
domains shall be recognized and protected. Such rights shall
include:
a) Right of Ownership - The right to claim ownership over
lands, bodies of water traditionally and actually occupied by
ICCs/IPs, sacred places, traditional hunting and fishing
grounds, and all improvements made by them at any time
within the domains;
b) Right to Develop Lands and Natural Resources. - Subject to
Section 56 hereof, right to develop, control and use lands
and territories traditionally occupied, owned, or used; to
manage and conserve natural resources within the
territories and uphold the responsibilities for future
generations; to benefit and share the profits from allocation
and utilization of the natural resources found therein; the
right to negotiate the terms and conditions for the
exploration of natural resources in the areas for the
purpose of ensuring ecological, environmental protection
and the conservation measures, pursuant to national and
customary laws; the right to an informed and intelligent
participation in the formulation and implementation of any
project, government or private, that will affect or impact
upon the ancestral domains and to receive just and fair
compensation for any damages which they may sustain as a
result of the project; and the right to effective measures by
the government to prevent any interference with, alienation
and encroachment upon these rights;
c) Right to Stay in the Territories. - The right to stay in the
territory and not to be removed therefrom. No ICCs/IPs will
be relocated without their free and prior informed consent,
nor through any means other than eminent domain. Where
relocation is considered necessary as an exceptional
measure, such relocation shall take place only with the free
and prior informed consent of the ICCs/IPs concerned and
whenever possible, they shall be guaranteed the right to
return to their ancestral domains, as soon as the grounds
for relocation cease to exist. When such return is not
possible, as determined by agreement or through
appropriate procedures, ICCs/IPs shall be provided in all
possible cases with lands of quality and legal status at least
equal to that of the land previously occupied by them,
suitable to provide for their present needs and future
development. Persons thus relocated shall likewise be fully
compensated for any resulting loss or injury;
d) Right in Case of Displacement. - In case displacement
occurs as a result of natural catastrophes, the State shall
endeavor to resettle the displaced ICCs/IPs in suitable
areas where they can have temporary life support systems:
Provided, That the displaced ICCs/IPs shall have the right
to return to their abandoned lands until such time that the
normalcy and safety of such lands shall be determined:
8 PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
Provided, further, That should their ancestral domain cease
to exist and normalcy and safety of the previous
settlements are not possible, displaced ICCs/IPs shall enjoy
security of tenure over lands to which they have been
resettled: Provided furthermore, That basic services and
livelihood shall be provided to them to ensure that their
needs are adequately addressed;
e) Right to Regulate Entry of Migrants. - Right to regulate the
entry of migrant settlers and organizations into the
domains;
f) Right to Safe and Clean Air and Water. - For this purpose,
the ICCs/IPs shall have access to integrated systems for the
management of their inland waters and air space;
g) Right to Claim Parts of Reservations - The right to claim
parts of the ancestral domains which have been reserved
for various purposes, except those reserved and intended
for common and public welfare and service; and
h) Right to Resolve Conflict. - Right to resolve land conflicts in
accordance with customary laws of the area where the land
is located, and only in default thereof shall the complaints
be submitted to amicable settlement and to the Courts of
Justice whenever necessary.
IPRA, Sec. 8 Rights to Ancestral Lands - The right of
ownership and possession of the ICCs /IPs to their ancestral
lands shall be recognized and protected.
a) Right to transfer land/property. - Such right shall include the
right to transfer land or property rights to/among members of
the same ICCs/IPs, subject to customary laws and traditions of
the community concerned.
b) Right to Redemption. - In cases where it is shown that the
transfer of land/property rights by virtue of any agreement or
devise, to a nonmember of the concerned ICCs/IPs is tainted
by the vitiated consent of the ICCs/IPs, or is transferred for an
unconscionable consideration or price, the transferor ICC/IP
shall have the right to redeem the same within a period not
exceeding fifteen (15) years from the date of transfer.
- Under the IPRA (RA 8371), regulations on the acquisition, use
and disposition of ancestral domains are imposed
Categories/Determinants of Indigenous Peoples/Indigenous
Cultural Communities
1. Ascription
2. Self-ascription
3. Occupation of Communally Owned and Bounded Territory
4. By Descent
5. Displaced but retained Social, Economic, Political and
Cultural Institutions
6. Are historically differentiated from the majority
- What makes IPs and ICCs different from all other natural
persons who are rights holders is that, collectively, they have
no legal personality.
o This poses a difficulty in making transactions with them,
as it is difficult to find someone who can act legally in
their behalf or bind them to an agreement.
Cruz v. Secretary of Environment and Natural Resources
- Cruz questions IPRA because it grants the IPs/ICCs rights but
they don’t have legal personality
2. Juridical Persons
- Most telling way to determine if it is/the existence of a
juridical person: whether they have the capacity to sue and
be sued
Art. 44 The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public
interest or purpose, created by law; their personality begins
as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations for private
interest or purpose to which the law grants a juridical
personality, separate and distinct from that of each
shareholder, partner or member.
Art. 45 Juridical persons mentioned in Nos. 1 and 2 of the
preceding article are governed by the laws creating or
recognizing them.
Private corporations are regulated by laws of general
application on the subject.
Partnerships and associations for private interest or purpose
are governed by the provisions of this Code concerning
partnerships.
Art. 46 Juridical persons may acquire and possess property of
all kinds, as well as incur obligations and bring civil or criminal
actions, in conformity with the laws and regulations of their
organization.
Art. 47 Upon the dissolution of corporations, institutions and
other entities for public interest or purpose mentioned in No. 2
of Article 44, their property and other assets shall be disposed
of in pursuance of law or the charter creating them. If nothing
has been specified on this point, the property and other assets
shall be applied to similar purposes for the benefit of the
region, province, city or municipality which during the
existence of the institution derived the principal benefits from
the same.
- They are artificial persons created by the law, which also
grants them legal personality.
PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
a. Partnerships
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 profits
among themselves.
Two or more persons may also form a partnership for the
exercise of a profession.
Art. 1768 The partnership has a judicial personality separate
and distinct from that of each of the partners, even in case of
failure to comply with the requirements of Article 1772, first
paragraph.
b. Private Corporations
Corp. Code, Sec. 2 Corporation defined – A corporation is
an artificial being created by operation of law, having the right
of succession and the powers, attributes and properties
expressly authorized by law or incident to its existence.
Corp. Code, Sec. 3 Classes of corporations – Corporations
formed or organized under this Code may be stock or non-
stock corporations. Corporations which have capital stock
divided into shares and are authorized to distribute to the
holders of such shares dividends or allotments of the surplus
profits on the basis of the shares held are stock corporations.
All other corporations are non-stock corporations.
Corp. Code, Sec. 36 Corporate powers and capacity –
Every corporation incorporated under this Code has the power
and capacity:
1. To sue and be sued in its corporate name;
2. Of succession by its corporate name for the period of time
stated in the articles of incorporation and the certificate of
incorporation;
3. To adopt and use a corporate seal;
4. To amend its articles of incorporation in accordance with
the provisions of this Code;
5. To adopt by-laws, not contrary to law, morals, or public
policy, and to amend or repeal the same in accordance with
this Code;
6. In case of stock corporations, to issue or sell stocks to
subscribers and to sell stocks to subscribers and to sell
treasury stocks in accordance with the provisions of this
Code; and to admit members to the corporation if it be a
non-stock corporation;
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7. To purchase, receive, take or grant, hold, convey, sell,
lease, pledge, mortgage and otherwise deal with such real
and personal property, including securities and bonds of
other corporations, as the transaction of the lawful business
of the corporation may reasonably and necessarily require,
subject to the limitations prescribed by law and the
Constitution;
8. To enter into merger or consolidation with other
corporations as provided in this Code;
9. To make reasonable donations, including those for the
public welfare or for hospital, charitable, cultural, scientific,
civic, or similar purposes: Provided, That no corporation,
domestic or foreign, shall give donations in aid of any
political party or candidate or for purposes of partisan
political activity;
10. To establish pension, retirement, and other plans for the
benefit of its directors, trustees, officers and employees;
and
11. To exercise such other powers as may be essential or
necessary to carry out its purpose or purposes as stated in
the articles of incorporation.
Corp. Code, Sec. 109 Classes of religious corporations –
Religious corporations may be incorporated by one or more
persons. Such corporations may be classified into corporations
sole and religious societies.
Religious corporations shall be governed by this Chapter and
by the general provisions on non-stock corporations insofar as
they may be applicable.
Classifications of Corporations
1. Stock Corporations – comprised of ‘stockholders’ who buy
stock, which is the share in the equity of the corporation;
profits go to the stockholders; stock is CAPITAL
2. Non-stock Corporations – does not mean they do not earn,
but the profits do not go to them; instead, the profits are for
civic purposes that redound to society, for charitable
purposes, or religious purposes
a. Religious Corporations
i. Corporation Sole – refers to an organization with only
one head (e.g., Jesus is Lord Movement, El Shaddai,
etc)
ii. Religious Society – refers to religious orders (e.g.,
Jesuits, Dominicans, etc.)
b. Charitable Organizations – makes donations/provides
assistance to charitable causes; nothing in return
c. Civic Organizations – helps in personal sustainability of
others (livelihood programs)
10 PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
c. Other Private Juridical Entities
Coop. Code, Sec. 3 General Concepts - A cooperative is a
duly registered association of persons, with a common bond of
interest, who have voluntarily joined together to achieve a
lawful common social or economic end, making equitable
contributions to the capital required and accepting a fair share
of the risks and benefits of the undertaking in accordance with
universally accepted cooperative principles.
Coop. Code, Sec. 6 Organization of Cooperatives – A
Cooperative may be organized and registered by at least
fifteen (15) persons for any or all of the following purposes:
(1) To encourage thrift and savings mobilization among the
members;
(2) To generate funds and extend credit to the members for
productive and provident purposes;
(3) To encourage among members systematic production and
marketing;
(4) To provide goods and services and other requirements to
the members;
(5) To develop expertise and skills among its members;
(6) To acquire lands and provide housing benefits for the
members;
(7) To insure against losses of the members;
(8) To promote and advance the economic, social and
educational status of the members;
(9) To establish, own, lease or operate cooperative banks,
cooperative wholesale and retail complexes, insurance and
agricultural/industrial processing enterprises, and public
markets;
(10) To coordinate and facilitate the activities of cooperatives;
and
(11) To undertake any and all other activities for the effective
and efficient implementation of the provisions of this Code.
Sec. 9 Cooperative Powers and Capacities - A cooperative
registered under this Code shall have the following powers and
capacities:
(1) To sue and be sued in its cooperative name;
(2) Of succession;
(3) To amend its articles of cooperation in accordance with the
provisions of this code;
(4) To adopt by-laws not contrary to law, morals or public
policy, and to amend and repeal the same in accordance
with this Code;
(5) To purchase, receive, take or grant, hold, convey, sell,
lease, pledge, mortgage, and otherwise deal with such real
and personal property as the transaction of the lawful affairs
of the cooperative may reasonably and necessarily require,
subject to the limitations prescribed by law and the
Constitution;
(6) To enter into division, merger or consolidation, as provided
in this Code;
(7) To join federations or unions, as provided in this Code;
(8) To accept and receive grants, donations and assistance
from foreign and domestic sources; and
(9) To exercise such other powers granted in this Code or
necessary to carry out its purpose or purposes as stated in
its articles of cooperation.
- Cooperative - a duly registered association of persons,
with a common bond of interest, who have voluntarily joined
together to achieve a lawful common social or economic
end, making equitable contributions to the capital required
and accepting a fair share of the risks and benefits of the
undertaking in accordance with universally accepted
cooperative principles. (Sec. 3, Cooperative Code of the
Phils., RA 6938)
o “Poor man’s corporation” according to Sir
PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
d. Public Corporations
On the State
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 belong to the State, without being for public
use, and are intended for some public service or for the
development of the national wealth.
Art. 421 All other property of the State, which is not of the
character stated in the preceding article, is patrimonial
property.
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.
Art. XII, Sec. 1 The goals of the national economy are a
more equitable distribution of opportunities, income, and
wealth; a sustained increase in the amount of goods and
services produced by the nation for the benefit of the people;
and an expanding productivity as the key to raising the quality
of life for all, especially the under-privileged.
The State shall promote industrialization and full employment
based on sound agricultural development and agrarian reform,
through industries that make full and efficient use of human
and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect
Filipino enterprises against unfair foreign competition and
trade practices.
In the pursuit of these goals, all sectors of the economy and all
regions of the country shall be given optimum opportunity to
develop. Private enterprises, including corporations,
cooperatives, and similar collective organizations, shall be
encouraged to broaden the base of their ownership.
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Art. XII, Sec. 2 All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora 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 co-
production, 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 twenty-
five years, renewable for not more than twenty-five years, and
under such terms and conditions as may be provided by law. In
cases of water rights for irrigation, water supply fisheries, or
industrial uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
The State shall protect the nation's marine wealth in its
archipelagic waters, territorial sea, and exclusive economic
zone, and reserve its use and enjoyment exclusively to Filipino
citizens.
The Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens, as well as cooperative fish
farming, with priority to subsistence fishermen and fish-
workers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance
for large-scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the
general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of
the country. In such agreements, the State shall promote the
development and use of local scientific and technical
resources.
The President shall notify the Congress of every contract
entered into in accordance with this provision, within thirty
days from its execution.
12 PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
On the Subdivisions of the State
Art. 423 The property of provinces, cities, and municipalities
is divided into property for public use and patrimonial
property.
Art. 424 Property for public use, in the provinces, cities, and
municipalities, consist 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.
LGC, Sec. 17.b.2.ii Basic Services and Facilities – For a
Municipality – Pursuant to national policies and subject to
supervision, control and review of the DENR, implementation
of community-based forestry projects which include integrated
social forestry programs and similar projects; management and
control of communal forests with an area not exceeding fifty
(50) square kilometers; establishment of tree parks, greenbelts,
and similar forest development projects;
LGC, Sec. 18 Power to Generate and Apply Resources. -
Local government units shall have the power and authority to
establish an organization that shall be responsible for the
efficient and effective implementation of their development
plans, program objectives and priorities; to create their own
sources of revenue and to levy taxes, fees, and charges which
shall accrue exclusively for their use and disposition and which
shall be retained by them; to have a just share in national taxes
which shall be automatically and directly released to them
without need of any further action; to have an equitable share
in the proceeds from the utilization and development of the
national wealth and resources within their respective territorial
jurisdictions including sharing the same with the inhabitants by
way of direct benefits; to acquire, develop, lease, encumber,
alienate, or otherwise dispose of real or personal property held
by them in their proprietary capacity and to apply their
resources and assets for productive, developmental, or welfare
purposes, in the exercise or furtherance of their governmental
or proprietary powers and functions and thereby ensure their
development into self-reliant communities and active
participants in the attainment of national goals.
LGC, Sec. 19 Eminent Domain. - A local government unit
may, through its chief executive and acting pursuant to an
ordinance, exercise the power of eminent domain for public
use, or purpose, or welfare for the benefit of the poor and the
landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent laws: Provided,
however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously
made to the owner, and such offer was not accepted:
Provided, further, That the local government unit may
immediately take possession of the property upon the filing of
the expropriation proceedings and upon making a deposit
with the proper court of at least fifteen percent (15%) of the fair
market value of the property based on the current tax
declaration of the property to be expropriated: Provided,
finally, That, the amount to be paid for the expropriated
property shall be determined by the proper court, based on
the fair market value at the time of the taking of the property.
LGC, Sec. 21 Closure and Opening of Roads.
(a) A local government unit may, pursuant to an ordinance,
permanently or temporarily close or open any local road,
alley, park, or square falling within its jurisdiction: Provided,
however, That in case of permanent closure, such
ordinance must be approved by at least two-thirds (2/3) of
all the members of the Sanggunian, and when necessary,
an adequate substitute for the public facility that is subject
to closure is provided.
(b) No such way or place or any part thereof shall be
permanently closed without making provisions for the
maintenance of public safety therein. A property thus
permanently withdrawn from public use may be used or
conveyed for any purpose for which other real property
belonging to the local government unit concerned may be
lawfully used or conveyed: Provided, however, That no
freedom park shall be closed permanently without
provision for its transfer or relocation to a new site.
(c) Any national or local road, alley, park, or square may be
temporarily closed during an actual emergency, or fiesta
celebrations, public rallies, agricultural or industrial fairs, or
an undertaking of public works and highways,
telecommunications, and waterworks projects, the duration
of which shall be specified by the local chief executive
concerned in a written order: Provided, however, That no
national or local road, alley, park, or square shall set
temporarily closed for athletic, cultural, or civic activities not
officially sponsored, recognized, or approved by the local
government unit concerned.
PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
(d) Any city, municipality, or Barangay may, by a duly enacted
close and regulate the use of any local ordinance,
temporarily street, road, thoroughfare, or any other public
place where shopping malls, Sunday, flea or night markets,
or shopping areas may be established and where goods,
merchandise, foodstuffs, commodities, or articles of
commerce may be sold and dispensed to the general
public.
LGC, Sec. 22 Corporate Powers.
(a) Every local government unit, as a corporation, shall have
the following powers:
(1) To have continuous succession in its corporate name;
(2) To sue and be sued;
(3) To have and use a corporate seal;
(4) To acquire and convey real or personal property;
(5) To enter into contracts; and
(6) To exercise such other powers as are granted to
corporations, subject to the limitations provided in
this Code and other laws.
(b) Local government units may continue using, modify, or
change their existing corporate seals: Provided, That newly
established local government units or those without
corporate seals may create their own corporate seals which
shall be registered with the Department of the Interior and
Local Government: Provided, further, That any change of
corporate seal shall also be registered as provided herein.
(c) Unless otherwise provided in this Code, contract may be
entered into by the local chief executive in behalf of the
local government unit without prior authorization by the
Sanggunian concerned. A legible copy of such contract
shall be posted at a conspicuous place in the provincial
capitol or the city, municipal or Barangay hall.
(d) Local government units shall enjoy full autonomy in the
exercise of their proprietary functions and in the
management of their economic enterprises, subject to the
limitations provided in this Code and other applicable laws.
LGC, Sec. 89 Prohibited Business and Pecuniary Interest. –
(a) It shall be unlawful for any local government official or
employee, directly or indirectly, to:
(1) Engage in any business transaction with the local
government unit in which he is an official or employee
or over which he has the power of supervision, or with
any of its authorized boards, officials, agents, or
attorneys, whereby money is to be paid, or property or
any other thing of value is to be transferred, directly or
indirectly, out of the resources of the local government
unit to such person or firm;
(2) Hold such interests in any cockpit or other games
licensed by a local government unit.
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3
 (3) Purchase any real estate or other property forfeited in
favor of such local government unit for unpaid taxes or
assessment, or by virtue of a legal process at the
instance of the said local government unit.
(4) Be a surety for any person contracting or doing business
with the local government unit for which a surety is
required; and
(5) Possess or use any public property of the local
government unit for private purposes.
(b) All other prohibitions governing the conduct of national
public officers relating to prohibited business and
pecuniary interest so provided for under Republic Act
Numbered Sixty-seven thirteen (R. A. No. 6713) otherwise
known as the "Code of Conduct and Ethical Standards for
Public Officials and Employees" and other laws shall also
be applicable to local government officials and employees.
LGC, Sec. 447.a.5.i Powers, Duties, Functions and
Compensation – The Sangguniang Bayan – (5) Approve
ordinances which shall ensure the efficient and effective
delivery of the basic services and facilities as provided for
under Section 17 of this Code, and in addition to said services
and facilities, shall:
(i) Provide for the establishment, maintenance, protection, and
conservation of communal forests and water sheds, tree parks,
greenbelts, mangroves, and other similar forest development
projects;
LGC, Sec. 458.a.5.i Powers, Duties, Functions and
Compensation – The Sangguniang Panlungsod – (5) Approve
ordinances which shall ensure the efficient and effective
delivery of the basic services and facilities as provided for
under Section 17 of this Code, and in addition to said services
and facilities, shall:
(i) Provide for the establishment, maintenance, protection, and
conservation of communal forests and watersheds, tree parks,
greenbelts, mangroves, and other similar forest development
projects;
14 PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
On GOCCs
Corp. Code, Sec. 4 Corporations created by special laws or
charters. – Corporations created by special laws or charters
shall be governed primarily by the provisions of the special law
or charter creating them or applicable to them, supplemented
by the provisions of this Code, insofar as they are applicable.
Corp. Code, Sec. 36 Corporate powers and capacity –
Every corporation incorporated under this Code has the power
and capacity:
1. To sue and be sued in its corporate name;
2. Of succession by its corporate name for the period of time
stated in the articles of incorporation and the certificate of
incorporation;
3. To adopt and use a corporate seal;
4. To amend its articles of incorporation in accordance with
the provisions of this Code;
5. To adopt by-laws, not contrary to law, morals, or public
policy, and to amend or repeal the same in accordance with
this Code;
6. In case of stock corporations, to issue or sell stocks to
subscribers and to sell stocks to subscribers and to sell
treasury stocks in accordance with the provisions of this
Code; and to admit members to the corporation if it be a
non-stock corporation;
7. To purchase, receive, take or grant, hold, convey, sell,
lease, pledge, mortgage and otherwise deal with such real
and personal property, including securities and bonds of
other corporations, as the transaction of the lawful business
of the corporation may reasonably and necessarily require,
subject to the limitations prescribed by law and the
Constitution;
8. To enter into merger or consolidation with other
corporations as provided in this Code;
9. To make reasonable donations, including those for the
public welfare or for hospital, charitable, cultural, scientific,
civic, or similar purposes: Provided, That no corporation,
domestic or foreign, shall give donations in aid of any
political party or candidate or for purposes of partisan
political activity;
10. To establish pension, retirement, and other plans for the
benefit of its directors, trustees, officers and employees;
and
11. To exercise such other powers as may be essential or
necessary to carry out its purpose or purposes as stated in
the articles of incorporation.
Classification of GOCCs D. Form al Classifications of Property
1. Chartered – incorporated by a special law passed by
Congress
1. W ith Reference to the Holder of Rights
2. Non-chartered – incorporated under the Corporation
Code
- At quick glance, the way to know if it is public, not private
property – is to check if it is demarcated by boundaries "
private properties are usually demarcated by fences, gates,
Comparing Chartered vs. Non-chartered GOCCs
etc.
1. As to immunity from suit – Chartered GOCCs enjoy the
State’s immunity from suit while Non-chartered GOCCs have
a. Public
the capacity to sue and be sued in its name.
2. As to employees – Civil service laws apply to employees of
Chartered GOCCs while it is the Labor Code that applies to a Art. 419 Property is either of public dominion or of private
Non-chartered GOCC’s employees. ownership.
3. As to amending articles of incorporation – With the special
laws serving as the articles of incorporation of a Chartered Art. 420 The following things are property of public dominion:
GOCC, it can only be amended by a subsequent act from
Congress amending the said special law; on the other hand, (1) Those intended for public use, such as roads, canals, rivers,
Non-chartered GOCCs may amend their articles of torrents, ports and bridges constructed by the State, banks,
incorporation in the manner provided by the Corporation shores, roadsteads, and others of similar character;
Code.
- NOTE: Non-chartered GOCCs, while still government owned (2) Those which belong to the State, without being for public
or controlled, are treated as private entities use, and are intended for some public service or for the
development of the national wealth.
Chartered GOCCs Non-chartered
GOCCs Art. 421 All other property of the State, which is not of the
How they are By express provision Incorporated according character stated in the preceding article, is patrimonial
incorporated of law (Congress to the Corporation property.
passes their Charter) Code
Immunity Enjoy the State’s Have the capacity to Art. 422 Property of public dominion, when no longer
from suit immunity from suit sue and be sued in its intended for public use or for public service, shall form part of
name the patrimonial property of the State.
Laws Civil Service Law Labor Code (can form
applicable to (cannot form unions) unions)
Art. 423 The property of provinces, cities, and municipalities
its
is divided into property for public use and patrimonial
employees
property.
On By a subsequent act In the manner provided
amending its of Congress by the Corporation
articles of amending the special Code Art. 424 Property for public use, in the provinces, cities, and
incorporation law (their Charter) municipalities, consist of the provincial roads, city streets,
Treatment As a public entity As a private entity municipal streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by
Capacity to Same as natural persons
said provinces, cities, or municipalities.
act and legal
personality
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.

PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO 1

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LGC, Sec. 18 Power to Generate and Apply Resources. -
Local government units shall have the power and authority to
establish an organization that shall be responsible for the
efficient and effective implementation of their development
plans, program objectives and priorities; to create their own
sources of revenue and to levy taxes, fees, and charges which
shall accrue exclusively for their use and disposition and which
shall be retained by them; to have a just share in national taxes
which shall be automatically and directly released to them
without need of any further action; to have an equitable share
in the proceeds from the utilization and development of the
national wealth and resources within their respective territorial
jurisdictions including sharing the same with the inhabitants by
way of direct benefits; to acquire, develop, lease, encumber,
alienate, or otherwise dispose of real or personal property held
by them in their proprietary capacity and to apply their
resources and assets for productive, developmental, or welfare
purposes, in the exercise or furtherance of their governmental
or proprietary powers and functions and thereby ensure their
development into self-reliant communities and active
participants in the attainment of national goals.
LGC, Sec. 21 Closure and Opening of Roads.
(a) A local government unit may, pursuant to an ordinance,
permanently or temporarily close or open any local road,
alley, park, or square falling within its jurisdiction: Provided,
however, That in case of permanent closure, such
ordinance must be approved by at least two-thirds (2/3) of
all the members of the Sanggunian, and when necessary,
an adequate substitute for the public facility that is subject
to closure is provided.
(b) No such way or place or any part thereof shall be
permanently closed without making provisions for the
maintenance of public safety therein. A property thus
permanently withdrawn from public use may be used or
conveyed for any purpose for which other real property
belonging to the local government unit concerned may be
lawfully used or conveyed: Provided, however, That no
freedom park shall be closed permanently without
provision for its transfer or relocation to a new site.
(c) Any national or local road, alley, park, or square may be
temporarily closed during an actual emergency, or fiesta
celebrations, public rallies, agricultural or industrial fairs, or
an undertaking of public works and highways,
telecommunications, and waterworks projects, the duration
of which shall be specified by the local chief executive
concerned in a written order: Provided, however, That no
national or local road, alley, park, or square shall set
temporarily closed for athletic, cultural, or civic activities not
officially sponsored, recognized, or approved by the local
government unit concerned.
16 PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
(d) Any city, municipality, or Barangay may, by a duly enacted
close and regulate the use of any local ordinance,
temporarily street, road, thoroughfare, or any other public
place where shopping malls, Sunday, flea or night markets,
or shopping areas may be established and where goods,
merchandise, foodstuffs, commodities, or articles of
commerce may be sold and dispensed to the general
public.
LGC, Sec. 22 Corporate Powers.
(a) Every local government unit, as a corporation, shall have
the following powers:
(1) To have continuous succession in its corporate name;
(2) To sue and be sued;
(3) To have and use a corporate seal;
(4) To acquire and convey real or personal property;
(5) To enter into contracts; and
(6) To exercise such other powers as are granted to
corporations, subject to the limitations provided in this
Code and other laws.
(b) Local government units may continue using, modify, or
change their existing corporate seals: Provided, That newly
established local government units or those without
corporate seals may create their own corporate seals which
shall be registered with the Department of the Interior and
Local Government: Provided, further, That any change of
corporate seal shall also be registered as provided herein.
(c) Unless otherwise provided in this Code, contract may be
entered into by the local chief executive in behalf of the
local government unit without prior authorization by the
Sanggunian concerned. A legible copy of such contract
shall be posted at a conspicuous place in the provincial
capitol or the city, municipal or Barangay hall.
(d) Local government units shall enjoy full autonomy in the
exercise of their proprietary functions and in the
management of their economic enterprises, subject to the
limitations provided in this Code and other applicable laws.
LGC, Sec. 89 Prohibited Business and Pecuniary Interest. –
(a) It shall be unlawful for any local government official or
employee, directly or indirectly, to:
(1) Engage in any business transaction with the local
government unit in which he is an official or employee
or over which he has the power of supervision, or with
any of its authorized boards, officials, agents, or
attorneys, whereby money is to be paid, or property or
any other thing of value is to be transferred, directly or
indirectly, out of the resources of the local government
unit to such person or firm;
(2) Hold such interests in any cockpit or other games
licensed by a local government unit.
 (3) Purchase any real estate or other property forfeited in
favor of such local government unit for unpaid taxes or
assessment, or by virtue of a legal process at the
instance of the said local government unit.
(4) Be a surety for any person contracting or doing business
with the local government unit for which a surety is
required; and
(5) Possess or use any public property of the local
government unit for private purposes.
(b) All other prohibitions governing the conduct of national
public officers relating to prohibited business and
pecuniary interest so provided for under Republic Act
Numbered Sixty-seven thirteen (R. A. No. 6713) otherwise
known as the "Code of Conduct and Ethical Standards for
Public Officials and Employees" and other laws shall also
be applicable to local government officials and employees.
Patrimonial Property
- These are owned by public entities but held in private
capacity " still considered PUBLIC property with resect to
the holder of the rights (the State)
- The concept further delineates the properties held by the
State
- On the State, through pronouncements by Legislature or the
Executive, may declare whether property has acquired
patrimonial status or not.
- These are properties NOT intended for public use or public
services and those NOT owned by private persons
- These are properties not under Art. 420 but belong to the
state
Criteria for Determining Patrimonial Property in LGUs (taken
from Province v. City of Zamboanga)
1. If it is owned by the LGU in its proprietary function
o Note that with respect to the acquisition, it should not
have been acquired by the LGU from the State (or else it
would just be held in trust for the State)
2. If the provincial funds were used
o Note that in exercise of eminent domain/expropriation,
even if provincial funds were used/disbursed, the
acquired property is NOT patrimonial " remains public
as a result of the delegated power of eminent domain
o Expropriation is the act of disbursing funds without
turning it into patrimonial propery (an exception to the
disbursement of funds to determine if it is patrimonial
property)
3. LGU has a title to the property under its name
Province of Zamboanga v. City of Zamboanga
- This case outlined the criteria to determine whether property
is public or patrimonial
- In our discussion, Sir focused on the criteria used to
determine what are patrimonial properties
PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
Salas v. Jarencio
- The Court mentioned that the President has the
classification power – the power to classify lands as
alienable
- Sir asked about “lengua communal,” which provides that
land is COMMON, not community property – a principle
recognizing public property as provided in the Spanish Laws
(from the Recopilacion)
- The concept of communal lands was originated in the
Spanish era where the usufruct of a portion of public domain
might be granted by the government for communal
purposes, but until granted, no rights passed to the
municipalities
Chavez v. Public Estates Authority
- The reclaimed lands form part of the public dominion.
- There is a constitutional prohibition on foreign
individuals/corporations owning lands in our jurisdiction.
Cebu Oxygen v. Bercilles
- Court provided that LGUs can declare roads (of the public
domain) as abandoned for the purpose of turning it into
patrimonial property, capable of being disposed of to private
parties
b. Private
Art. 419 Property is either of public dominion or of private
ownership.
Art. 424 Property for public use, in the provinces, cities, and
municipalities, consist 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.
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
IPRA, Sec. 5 Indigenous Concept of Ownership – Indigenous
concept of ownership sustains the view that ancestral domains
and all resources found therein shall serve as the material
bases of their cultural integrity. The indigenous concept of
ownership generally holds that ancestral domains are the
ICC's/IP's private but community property which belongs to all
generations and therefore cannot be sold, disposed or
destroyed. It likewise covers sustainable traditional resource
rights.
1
7

- This provision expressly identifies ancestral domains as
private property
- It satisfies the definition under Art. 425 on private ownership,
which are properties belonging to private persons, either
individually or collectively (IPs/ICCs own the property in a
private capacity collectively)
- and safety of the previous settlements are not possible,
IPRA, Sec. 7 Rights to Ancestral Domains – The rights of
ownership and possession of ICCs/IPs to their ancestral
domains shall be recognized and protected. Such rights shall
include:
a) Right of Ownership - The right to claim ownership over
lands, bodies of water traditionally and actually occupied by
ICCs/IPs, sacred places, traditional hunting and fishing
grounds, and all improvements made by them at any time
within the domains;
b) Right to Develop Lands and Natural Resources. - Subject to
Section 56 hereof, right to develop, control and use lands and
territories traditionally occupied, owned, or used; to manage
and conserve natural resources within the territories and
uphold the responsibilities for future generations; to benefit
and share the profits from allocation and utilization of the
natural resources found therein; the right to negotiate the
terms and conditions for the exploration of natural resources in
the areas for the purpose of ensuring ecological,
environmental protection and the conservation measures,
pursuant to national and customary laws; the right to an
informed and intelligent participation in the formulation and
implementation of any project, government or private, that will
affect or impact upon the ancestral domains and to receive just
and fair compensation for any damages which they may sustain
as a result of the project; and the right to effective measures by
the government to prevent any interference with, alienation
and encroachment upon these rights;
c) Right to Stay in the Territories. - The right to stay in the
territory and not to be removed therefrom. No ICCs/IPs will be
relocated without their free and prior informed consent, nor
through any means other than eminent domain. Where
relocation is considered necessary as an exceptional measure,
such relocation shall take place only with the free and prior
informed consent of the ICCs/IPs concerned and whenever
possible, they shall be guaranteed the right to return to their
ancestral domains, as soon as the grounds for relocation cease
to exist. When such return is not possible, as determined by
agreement or through appropriate procedures, ICCs/IPs shall
be provided in all possible cases with lands of quality and legal
status at least equal to that of the land previously occupied by
them, suitable to provide for their present needs and future
development. Persons thus relocated shall likewise be fully
compensated for any resulting loss or injury;
d) Right in Case of Displacement. - In case displacement
18 PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
occurs as a result of natural catastrophes, the State shall
endeavor to resettle the displaced ICCs/IPs in suitable areas
where they can have temporary life support systems: Provided,
That the displaced ICCs/IPs shall have the right to return to
their abandoned lands until such time that the normalcy and
safety of such lands shall be determined: Provided, further,
That should their ancestral domain cease to exist and normalcy
displaced ICCs/IPs shall enjoy security of tenure over lands to
which they have been resettled: Provided furthermore, That
basic services and livelihood shall be provided to them to
ensure that their needs are adequately addressed;
e) Right to Regulate Entry of Migrants. - Right to regulate the
entry of migrant settlers and organizations into the domains;
f) Right to Safe and Clean Air and Water. - For this purpose,
the ICCs/IPs shall have access to integrated systems for the
management of their inland waters and air space;
g) Right to Claim Parts of Reservations - The right to claim
parts of the ancestral domains which have been reserved for
various purposes, except those reserved and intended for
common and public welfare and service; and
h) Right to Resolve Conflict. - Right to resolve land conflicts in
accordance with customary laws of the area where the land is
located, and only in default thereof shall the complaints be
submitted to amicable settlement and to the Courts of Justice
whenever necessary.
-
IPRA, Sec. 8 Rights to Ancestral Lands - The right of
ownership and possession of the ICCs /IPs to their ancestral
lands shall be recognized and protected.
a) Right to transfer land/property. - Such right shall include the
right to transfer land or property rights to/among members of
the same ICCs/IPs, subject to customary laws and traditions of
the community concerned.
b) Right to Redemption. - In cases where it is shown that the
transfer of land/property rights by virtue of any agreement or
devise, to a nonmember of the concerned ICCs/IPs is tainted
by the vitiated consent of the ICCs/IPs, or is transferred for an
unconscionable consideration or price, the transferor ICC/IP
shall have the right to redeem the same within a period not
exceeding fifteen (15) years from the date of transfer.
LGC, Sec. 17.b.2.ii Basic Services and Facilities – For a
Municipality – Pursuant to national policies and subject to
supervision, control and review of the DENR, implementation
of community-based forestry projects which include integrated
social forestry programs and similar projects; management and
control of communal forests with an area not exceeding fifty
(50) square kilometers; establishment of tree parks, greenbelts,
and similar forest development projects;
LGC, Sec. 447.a.5.i Powers, Duties, Functions and
Compensation – The Sangguniang Bayan – (5) Approve
ordinances which shall ensure the efficient and effective
delivery of the basic services and facilities as provided for
under Section 17 of this Code, and in addition to said services
and facilities, shall:
(i) Provide for the establishment, maintenance, protection, and
conservation of communal forests and water sheds, tree parks,
greenbelts, mangroves, and other similar forest development
projects;
LGC, Sec. 458.a.5.i Powers, Duties, Functions and
Compensation – The Sangguniang Panlungsod – (5) Approve
ordinances which shall ensure the efficient and effective
delivery of the basic services and facilities as provided for
under Section 17 of this Code, and in addition to said services
and facilities, shall:
(i) Provide for the establishment, maintenance, protection, and
conservation of communal forests and watersheds, tree parks,
greenbelts, mangroves, and other similar forest development
projects;
c. Res Nullius
- The concept originally referred to property with NO previous
owners
- However, with the passage of time and advancement of laws,
it became much more difficult to subscribe to this concept
because, at some point, some property will have an owner
o Hence, the concept was reformed to refer to abandoned
property.
o Proof of absolute abandonment of such property must be
produced
! However, since the intent to abandon is a state of
mind, it is hard to prove and hence the concept is not
practically utilized.
o Its function is to bridge the gaps in the law so that no one
may simply claim something from nature to be theirs.
ART. XII – NATIONAL ECONOMY AND PATRIMONY
Sec. 1 The goals of the national economy are a more
equitable distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services
produced by the nation for the benefit of the people; and an
expanding productivity as the key to raising the quality of life
for all, especially the under-privileged.
The State shall promote industrialization and full employment
based on sound agricultural development and agrarian reform,
through industries that make full and efficient use of human
and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect
Filipino enterprises against unfair foreign competition and
trade practices.
PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
In the pursuit of these goals, all sectors of the economy and all
regions of the country shall be given optimum opportunity to
develop. Private enterprises, including corporations,
cooperatives, and similar collective organizations, shall be
encouraged to broaden the base of their ownership.
Sec. 2 All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora 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 co-production, 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 twenty-five years, renewable for not
more than twenty-five years, and under such terms and
conditions as may be provided by law. In cases of water rights
for irrigation, water supply fisheries, or industrial uses other
than the development of water power, beneficial use may be
the measure and limit of the grant.
The State shall protect the nation's marine wealth in its
archipelagic waters, territorial sea, and exclusive economic
zone, and reserve its use and enjoyment exclusively to Filipino
citizens.
The Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens, as well as cooperative fish
farming, with priority to subsistence fishermen and fish-
workers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance
for large-scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the
general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of
the country. In such agreements, the State shall promote the
development and use of local scientific and technical
resources.
The President shall notify the Congress of every contract
entered into in accordance with this provision, within thirty
days from its execution.
Sec. 3 Lands of the public domain are classified into
agricultural, forest or timber, mineral lands and national parks.
Agricultural lands of the public domain may be further
classified by law according to the uses to which they may be
devoted. Alienable lands of the public domain shall be limited
to agricultural lands. Private corporations or associations may
1
9
not hold such alienable lands of the public domain except by
lease, for a period not exceeding twenty-five years, renewable
for not more than twenty-five years, and not to exceed one
thousand hectares in area. Citizens of the Philippines may lease
not more than five hundred hectares, or acquire not more than
twelve hectares thereof, by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology,
and development, and subject to the requirements of agrarian
reform, the Congress shall determine, by law, the size of lands
of the public domain which may be acquired, developed, held,
or leased and the conditions therefor.
Sec. 4 The Congress shall, as soon as possible, determine, by
law, the specific limits of forest lands and national parks,
marking clearly their boundaries on the ground. Thereafter,
such forest lands and national parks shall be conserved and
may not be increased nor diminished, except by law. The
Congress shall provide for such period as it may determine,
measures to prohibit logging in endangered forests and
watershed areas.
Sec. 5 The State, subject to the provisions of this Constitution
and national development policies and programs, shall protect
the rights of indigenous cultural communities to their ancestral
lands to ensure their economic, social, and cultural well-being.
The Congress may provide for the applicability of customary
laws governing property rights or relations in determining the
ownership and extent of ancestral domain.
Sec. 6 The use of property bears a social function, and all
economic agents shall contribute to the common good.
Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have
the right to own, establish, and operate economic enterprises,
subject to the duty of the State to promote distributive justice
and to intervene when the common good so demands.
Sec. 7 Save in cases of hereditary succession, no private lands
shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands
of the public domain.
Sec. 8 Notwithstanding the provisions of Section 7 of this
Article, a natural-born citizen of the Philippines who has lost his
Philippine citizenship may be a transferee of private lands,
subject to limitations provided by law.
Sec. 9 The Congress may establish an independent economic
and planning agency headed by the President, which shall,
after consultations with the appropriate public agencies,
various private sectors, and local government units,
recommend to Congress, and implement continuing
integrated and coordinated programs and policies for national
development.
20 PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
Until the Congress provides otherwise, the National Economic
and Development Authority shall function as the independent
planning agency of the government.
Sec. 10 The Congress shall, upon recommendation of the
economic and planning agency, when the national interest
dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of whose
capital is owned by such citizens, or such higher percentage as
Congress may prescribe, certain areas of investments. The
Congress shall enact measures that will encourage the
formation and operation of enterprises whose capital is wholly
owned by Filipinos.
In the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give
preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign
investments within its national jurisdiction and in accordance
with its national goals and priorities.
Sec. 11 No franchise, certificate, or any other form of
authorization for the operation of a public utility shall be
granted except to citizens of the Philippines or to corporations
or associations organized under the laws of the Philippines, at
least sixty per centum of whose capital is owned by such
citizens; nor shall such franchise, certificate, or authorization be
exclusive in character or for a longer period than fifty years.
Neither shall any such franchise or right be granted except
under the condition that it shall be subject to amendment,
alteration, or repeal by the Congress when the common good
so requires. The State shall encourage equity participation in
public utilities by the general public. The participation of
foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its
capital, and all the executive and managing officers of such
corporation or association must be citizens of the Philippines.
Sec. 12 The State shall promote the preferential use of
Filipino labor, domestic materials and locally produced goods,
and adopt measures that help make them competitive.
Sec. 13 The State shall pursue a trade policy that serves the
general welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity.
Sec. 14 The sustained development of a reservoir of national
talents consisting of Filipino scientists, entrepreneurs,
professionals, managers, high-level technical manpower and
skilled workers and craftsmen in all fields shall be promoted by
the State. The State shall encourage appropriate technology
and regulate its transfer for the national benefit.
The practice of all professions in the Philippines shall be
limited to Filipino citizens, save in cases prescribed by law.
Sec. 15 The Congress shall create an agency to promote the
viability and growth of cooperatives as instruments for social
justice and economic development.
Sec. 16 The Congress shall not, except by general law,
provide for the formation, organization, or regulation of private
corporations. Government-owned or controlled corporations
may be created or established by special charters in the
interest of the common good and subject to the test of
economic viability.
Sec. 17 In times of national emergency, when the public
interest so requires, the State may, during the emergency and
under reasonable terms prescribed by it, temporarily take over
or direct the operation of any privately-owned public utility or
business affected with public interest.
Sec. 18 The State may, in the interest of national welfare or
defense, establish and operate vital industries and, upon
payment of just compensation, transfer to public ownership
utilities and other private enterprises to be operated by the
Government.
Sec. 19 The State shall regulate or prohibit monopolies when
the public interest so requires. No combinations in restraint of
trade or unfair competition shall be allowed.
Sec. 20 The Congress shall establish an independent central
monetary authority, the members of whose governing board
must be natural-born Filipino citizens, of known probity,
integrity, and patriotism, the majority of whom shall come from
the private sector. They shall also be subject to such other
qualifications and disabilities as may be prescribed by law. The
authority shall provide policy direction in the areas of money,
banking, and credit. It shall have supervision over the
operations of banks and exercise such regulatory powers as
may be provided by law over the operations of finance
companies and other institutions performing similar functions.
Until the Congress otherwise provides, the Central Bank of the
Philippines operating under existing laws, shall function as the
central monetary authority.
Sec. 21 Foreign loans may only be incurred in accordance
with law and the regulation of the monetary authority.
Information on foreign loans obtained or guaranteed by the
Government shall be made available to the public.
Sec. 22 Acts which circumvent or negate any of the provisions
of this Article shall be considered inimical to the national
interest and subject to criminal and civil sanctions, as may be
provided by law.
2. W ith Reference to the O bject
PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
a. Corporeal
a. i. Immovables
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 fixed 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, fish 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;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the matter thereof
forms part of the bed, and waters either running or stagnant;
(9) Docks and structures which, though floating, are intended
by their nature and object to remain at a fixed place on a river,
lake, or coast;
(10) Contracts for public works, and servitudes and other real
rights over immovable property.
- Of all these, par. 10 is the odd one out because it pertains to
obligations, which are personal property
o Although it refers to personal property (obligations), it
becomes immovable by law
o The object of the obligations are immovable property "
it follows the nature of the object
o Real rights mean they are enforceable against the
world/ANYONE
! What are real rights over MOVABLE property? Chattel
(personal property which can be used as security)
2
1

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, scientific or artistic
collections, books, medals, arms, 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.
Classes of Immovables
1. By Nature – refers to property that, by their nature, cannot be
transported (e.g., lands, buildings). Includes Pars. 1, 2, and 8
of Art. 415.
2. By Incorporation – refers to an object attached to an
immovable by human action, with the intention by the owner
for it to be attached to the immovable. Includes Pars. 4, 5, 6,
and 9 of Art. 415..
3. By Destination – refers to an object immobilized in a manner
that removal is impossible with out causing damage to the
immovable attached to it. It does not require intent on the
part of the owner. Includes Pars. 3 and 7 of Art. 415.
4. By Analogy or by Law – peculiar class of immovable in that
they are the only incorporeal one in the enumeration of
immovable, but they have the nature of an immovable
because they pertain to an immovable property. Refers to
Par. 10 of Art. 415.
Immobilization: Destination vs. Incorporation
- Both classes of immobilized property are attached to an
immovable in some way
- What differentiates the two is INTENT:
o In INCORPORATION, there must be intent on part of the
owner to have the property be attached to the
immovable. Which is why this is also known as
“immobilization by intention.”
o In DESTINATION, the intent is immaterial.
Rules on Immobilization
1. Machines – machines may be immobilized when they meet
the ff. requisites:
o Permanently attached
o Tends to directly meet the need of the industry or work
o Attached by the owner
o Owner must have intended the machine to be attached
permanently
o EXCEPTION: When the machine is placed by a tenant, it
is not immobilized and remains as personal property
22 PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
2. Taxation – for purposes of taxation, a personal property may
be regarded as taxable real/immovable property
3. Estoppel – once a party has acted to give an impression that
the property is question is to be treated as personal property
(even if it is an immovable), and the other party relies on such
impression, the former cannot repudiate it. For estoppel to
apply, these two elements must concur:
o A positive act or representation by the first party
o Reliance by the second/other parties on the said positive
act or representation
Berkenkotter v. Cu Unjieng
- Court identified 3 rules on the immobilization of machines:
o Permanently attached
o Essential/tends to directly meet the needs of the industry
o Attached by the owner
Philippine Refining Co. v. Jarque
- M/V = motorized vessel
- M/B = motorized banca
- M/T = motorized tanker
- Chattel mortgage, as a peculiar type of personalty,
Mindanao Bus Co. v. City Assessor
- Machineries were not considered ESSENTIAL, therefore, not
immovable and not taxable
Davao Sawmill v. Castro
- Added a 4th rule to the 3 outlined in Berkenkotter: that the
owner must have INTENDED the machine to be attached
permanently
Prudential Bank v. Panis
Caltex v. Central Board of Assessment Appeals
- Despite being movable, for purposes of taxation, are
considered as real property
- The tax law does not need to follow the classifications in the
Civil Code because the purpose of the tax law is to generate
revenue for the gov’t
- The Civil Code provides the general principles of
classification of property
Benguet Corp. v. CBAA
- SC shouldn’t have discussed anymore that:
o The tailings dam was an integral part of the mining
operations " IT IS INTEGRAL TO THE MINING (as
discussed in class on the chemical processes, etc.)
o It was a pollution-controlling device " IT IS ONLY
CONTAINING POLLUTION, NOT CONTROLLING IT
o It is useful as an irrigation system " WOULD YOU LIKE
TO GET WATER FROM IT?
o It will benefit the community " TOTAL BULLSHIT
- If the Court took the time to learn what tailings dam meant, it
would discover that another term for it would be slag
 dumps, which are part of the enumeration under Art. 415, entities, although they may have real estate.
par. 8 (OMG so it just wasted its time)
Art. 418 Movable property is either consumable or
Tumalad v. Vicencio nonconsumable. To the first class belong those movables
- Application of estoppel as an exception to the
which cannot be used in a manner appropriate to their nature
classifications found in the NCC
without their being consumed; to the second class belong all
- Since they treated the house as movable (subjected it to
the others.
chattel mortgage rather than real estate mortgage), they are
estopped from alleging otherwise

Art. 426 Whenever by provision of the law, or an individual

Serg’s Products v. PCI Leasing
declaration, the expression "immovable things or property," or
- Application of estoppel as an exception to the classifications
"movable things or property," is used, it shall be deemed to
found in the NCC
include, respectively, the things enumerated in Chapter 1 and
- The machineries were essential and principal elements of the
Chapter 2.
industry (should be immovable by destination), but since they
were stipulated in their Agreement to be considered as
Whenever the word "muebles," or "furniture," is used alone, it
PERSONAL property, they are estopped from alleging
shall not be deemed to include money, credits, commercial
otherwise
securities, stocks and bonds, jewelry, scientific or artistic
collections, books, medals, arms, clothing, horses or carriages
a. ii. Movables
and their accessories, grains, liquids and merchandise, or other
things which do not have as their principal object the
Art. 416 The following things are deemed to be personal
furnishing or ornamenting of a building, except where from the
property:
context of the law, or the individual declaration, the contrary
clearly appears.
(1) Those movables susceptible of appropriation which are not
included in the preceding article;
U.S. v. Tambunting
- Gas is a type of movable property, which falls under the
(2) Real property which by any special provision of law is
classification of par. 3, Art. 416 NCC – forces of nature
considered as personal property;
brought under control by science
- Court here held that gas is capable of being taken from
(3) Forces of nature which are brought under control by
common property and is capable of being appropriated to
science; and
be sold and used accordingly
- NOTE: According to Sir, the Court should have classified gas
(4) In general, all things which can be transported from place to
under Par. 4 of Art. 416, instead of Par. 3 as gas is not a force
place without impairment of the real property to which they are
of nature.
fixed.

b. Non-corporeal
- Apart from the provision in the Chattel Mortgage Law (which
provides that growing crops may be the subject of a chattel
b. i. Intellectual Property
mortgage), there are no other special provisions of law that
treat real property as personal property.
o This provision was lifted from the Old/Spanish Civil Code Art. 721 By intellectual creation, the following persons
which signifies that Spanish civil law may have had acquire ownership:
provisions treating real property as personal property
- Forces of nature do NOT refer to the “forces” per se (ex. (1) The author with regard to his literary, dramatic, historical,
solar power, wind power, etc.) but to the energy harnessed legal, philosophical, scientific or other work;
from them (ex. the electricity itself produced by the sunlight
through a solar panel or by the wind through a windmill). (2) The composer; as to his musical composition;

(3) The painter, sculptor, or other artist, with respect to the

Art. 417 The following are also considered as personal
product of his art;
property:

(4) The scientist or technologist or any other person with

(1) Obligations and actions which have for their object
regard to his discovery or invention.
movables or demandable sums; and

(2) Shares of stock of agricultural, commercial and industrial

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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.
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.
RA 8293 (Intellectual Property Code)
RA 8293, Sec. 4.1 Definitions – 4.1 The term "intellectual
property rights" consists of:
a. Copyright and Related Rights;
b. Trademarks and Service Marks;
c. Geographic Indications;
d. Industrial Designs;
e. Patents;
f. Layout-Designs (Topographies) of Integrated Circuits; and
g. Protection of Undisclosed Information (n, TRIPS).
RA 8293, Sec. 22 Non-Patentable Inventions. - The following
shall be excluded from patent protection:
22.1. Discoveries, scientific theories and mathematical
methods;
22.2. Schemes, rules and methods of performing mental acts,
playing games or doing business, and programs for
computers;
22.3 Methods for treatment of the human or animal body by
surgery or therapy and diagnostic methods practiced on the
human or animal body. This provision shall not apply to
products and composition for use in any of these methods;
22.4. Plant varieties or animal breeds or essentially biological
process for the production of plants or animals. This provision
shall not apply to micro-organisms and non-biological and
microbiological processes.
Provisions under this subsection shall not preclude Congress to
consider the enactment of a law providing sui generis
protection of plant varieties and animal breeds and a system of
community intellectual rights protection:
22.5. Aesthetic creations; and
22.6. Anything which is contrary to public order or morality.
24 PROPERTY EXAM # 1 REVIEWER | HERRERA-LIM, HUSMILLO
RA 8293, Sec. 112 Definition of Terms:
1. An Industrial Design is any composition of lines or colors or
any three-dimensional form, whether or not associated with
lines or colors: Provided, That such composition or form
gives a special appearance to and can serve as pattern for an
industrial product or handicraft;
2. Integrated Circuit means a product, in its final form, or an
intermediate form, in which the elements, at least one of
which is an active element and some or all of the
interconnections are integrally formed in and/or on a piece
of material, and which is intended to perform an electronic
function; and
3. Layout-Design is synonymous with 'Topography' and means
the three-dimensional disposition, however expressed, of
the elements, at least one of which is an active element, and
of some or all of the interconnections of an integrated
circuit, or such a three-dimensional disposition prepared for
an integrated circuit intended for manufacture.
RA 8293, Sec. 172 Literary and Artistic Works. -
172.1 Literary and artistic works, hereinafter referred to as
"works", are original intellectual creations in the literary and
artistic domain protected from the moment of their creation
and shall include in particular:
(a) Books, pamphlets, articles and other writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared for
oral delivery, whether or not reduced in writing or other
material form;
(d) Letters;
(e) Dramatic or dramatico-musical compositions;
choreographic works or entertainment in dumb shows;
(f) Musical compositions, with or without words;
(g) Works of drawing, painting, architecture, sculpture,
engraving, lithography or other works of art; models or
designs for works of art;
(h) Original ornamental designs or models for articles of
manufacture, whether or not registrable as an industrial
design, and other works of applied art;
(i) Illustrations, maps, plans, sketches, charts and three-
dimensional works relative to geography, topography,
architecture or science;
(j) Drawings or plastic works of a scientific or technical
character;
(k) Photographic works including works produced by a process
analogous to photography; lantern slides;
(l) Audiovisual works and cinematographic works and works
produced by a process analogous to cinematography or
any process for making audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and artistic works.
172.2. Works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as of
their content, quality and purpose.

RA 8293, Sec. 173 Derivative Works. -
173.1. The following derivative works shall also be protected by
copyright:
(a) Dramatizations, translations, adaptations, abridgments,
arrangements, and other alterations of literary or artistic
works; and
(b) Collections of literary, scholarly or artistic works, and
compilations of data and other materials which are original
by reason of the selection or coordination or arrangement
of their contents. (Sec. 2, [P] and [Q], P. D. No. 49)
173.2. The works referred to in paragraphs (a) and (b) of
Subsection 173.1 shall be protected as a new works: Provided
however, That such new work shall not affect the force of any
subsisting copyright upon the original works employed or any
part thereof, or be construed to imply any right to such use of
the original works, or to secure or extend copyright in such
original works.
book vs. actual book) " it is the right to its first
publication/subsequent distribution, and also includes
the right to exclude others from its enjoyment, as well as
the right not to be mandated to reproduce it
- It has the character of an immovable (in that it’s incorporeal,
and it’s an obligation which is by nature, personal) but also of
an immovable (it’s a real right; recognized and capable of
being exercised against the whole world).
b. ii. Rights and Choses in Actions
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.

RA 8293, Sec. 177 Copy or Economic Rights. - Subject to

the provisions of Chapter VIII, copyright or economic rights
shall consist of the exclusive right to carry out, authorize or
prevent the following acts:

177.1. Reproduction of the work or substantial portion of the

work;

177.2 Dramatization, translation, adaptation, abridgment,

arrangement or other transformation of the work;

177.3. The first public distribution of the original and each copy
of the work by sale or other forms of transfer of ownership;

177.4. Rental of the original or a copy of an audiovisual or

cinematographic work, a work embodied in a sound recording,
a computer program, a compilation of data and other materials
or a musical work in graphic form, irrespective of the ownership
of the original or the copy which is the subject of the rental;

177.5. Public display of the original or a copy of the work;

177.6. Public performance of the work; and

177.7. Other communication to the public of the work

- It is distinct from the classifications under Arts. 416-418

because it cannot be defined using those existing definitions
" it is provided for in Art. 724:
o It is not provided for under Art. 416 (does not satisfy any
of those conditions)
o It cannot be considered under Art. 417, par. 1, because
the object there refers specifically to movables or
demandable sums " intellectual property is neither
o Intellectual property refers to incorporeal concepts
distinct from their corporeal manifestations (character in a

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POSSESSION
A. In General
- How Exercised
o Material Possession of the Thing
! Utilization
! Constructive Possession (as held in Ramos v. Dir. of
Lands)
o Enjoyment of the Right
o Thing Subjected to One’s Will
o Execution of the Proper Acts and Legal Formalities
Established by Law for Acquiring such Right
- Characteristics/Qualities of Possession
o Exclusive – only the possessor can exercise the right of
possession.
o Indivisible – the right of possession cannot be
recognized in another personality. There are however
exceptions to the indivisibility of possession:
! Married Persons
! Partnerships
! Co-ownership
! Intestate Heirs
o With Intent/Animus Possidendi
o Sir: If any of these are absent, then possession is not de
jure at the very least; it may only be de facto.
- Characters of Exercise
o As to Name
! Self – the right of possession is exercised in one’s
own name
! In Name of Another – the right of possession is
vested in another and the one in actual possession is
exercising it in his name
o As to Knowledge of Status of Title/Acquisition
! Good Faith – when possessor is NOT aware of the
existing flaw in his title that may invalidate his
acquisition
! Bad Faith – when possessor IS aware of the flaw in
the title which may invalidate his acquisition
o As to Concept
! Owner – (note: look/remember how sir discussed this
-Ron) possessor believes himself to be the owner
and does not recognize a superior right in anyone
else
! Holder – actual (and may even be legal) possessor
who recognizes in another a superior right, which is
usually ownership
o As to Status
! De Jure – possession is one recognized by law
! De Facto – possession, which is actual, only gives
rise to a presumption that the possession is one
recognized by law; said presumption is rebuttable
and can be defeated by the possessor de jure
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PROPERTY EXAM # 2 REVIEWER | HERRERA-LIM, HUSMILLO
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! Sir: It is important to distinguish between the two
since some rights are only available to one as
compared to the other.
! Note: They are NOT mutually exclusive; both status
may reside in the same person (ex. actual possessor
is also the possessor recognized by law)
- Rights Arising From Possession
1. Right to be Respected Possession
o Entitles the possessor to take preventive actions and
protect himself against deprivation
o Actions available from this right:
! Fencing the property (Art. 430)
! Doctrine of Self-Help (Art. 429) – the possessor is
entitled to use reasonably necessary force to repel
an actual or threatened unlawful physical invasion of
the property. The exercise of such force must be
immediate; otherwise he will need to course his
action through the courts
2. Right to be Restored in Possession
o Derived from the right to be respected in one’s
possession
o Remedial in nature; actions based on this right are
instituted after the unlawful deprivation
! There are however cases of lawful deprivations:
- Expropriation, after proceedings have been
instituted and the provisional
- Cases of necessary interferences as provided in
NCC Art. 432
! In these cases of lawful deprivation, the possessor is
not entitled to the actions for recovery.
o Actions for recovery:
! Accion interdictal – may only be filed within one
year from the time of the deprivation. The issue
resolved is possession; plaintiff only needs to
proved that he had prior possession and was
forcibly deprived of his property or that property
was unlawfully detained from him. Divided further
into:
- Forcible Entry – when current possessor
(defendant) took possession by violence,
intimidation, force, stealth or strategy.
- Unlawful Detainer – when current possessor
initially possessed the property validly but is now
refusing to return possession of the same when
his right to possess it has abated.
! Accion publiciana – available when deprivation of
possession does not fall under the grounds covered
by interdictal or when 1 year has passed since the
time of the deprivation. It may however be filed
within the 1 year period as well. The action
prescribes in 10 years. The issue resolved is the real
right of possession; to garner favorable judgment,
the party must show that he has a better right of
possession as against the adverse party.
1
 ! Accion reinvindicatoria - the action to recover value of the property due to
ownership. It prescribes in 10 years when ordinary the useful improvement
acquisitive prescription is applicable or in 30 years Necessary Expenses
when it is extraordinary. The issue resolved is Entitled to reimbursement Entitled to reimbursement
ownership (and hence is not barred by res judicata with right to retain property but has NO right to retain the
from the two abovementioned actions); plaintiff will until fully reimbursed property
have to prove his title and the identity of the Luxurious Expenses
property Both GF and BF possessors are NOT entitled to
o Replevin – the action to recover movable property reimbursement but both have the limited right of removal (see
above).
3. Right to Accession Note: The right of retention acts as a security for the possessor
o Entitles possessor to everything produced by the in good faith so that reimbursement to him is assured by the
property AND everything attached or incorporated fact that the rightful owner may not recover property until he
thereto. has fully reimbursed him.
o Accessions include: *Note: The repayment of useful expenses is based on the
! Fruits – produced by the property; may be natural, principle against unjust enrichment; since it would be unfair if
industrial, and civil rightful owner will benefit from the useful improvement but will
! Accessories – those attached to the property which not be required to pay for it. However, only the good faith
may (a) increase the value or utility of the property, possessor is entitled to it since a person is not allowed to profit
(b) preserve the property, or (c) embellish the from his wrongdoing.
property.
6. Right to Dispose
4. Right to Enjoy o Entitles possessor a limited right to dispose; it is limited
o Entitles possessor to use the property according to its in the sense that he may only dispose of his right of
purpose possession (ex. a lessee sublets the property to a
sublessee).
5. Right to Reimbursement
o Should the rightful owner recover the property from the 7. Right to Exclude
actual possessor, the actual possessor is entitled to o Possession is a real right, which may be enforced
reimbursements for certain expenses, depending on against the whole world.
the presence of good faith or bad faith, o Actions are available to enforce this real right (see
discussion on Right to Be Respected + Right to Be
Good Faith Bad Faith Restored in Possession)
Useful Expenses
Entitled to reimbursement Not entitled to - Loss of Possession
with right to retain property reimbursement o Under NCC Art. 555, there are 4 ways that a possessor
until fully reimbursed and also may lose his right of possession:
a limited right of removal ! Abandonment
! Assignment to another – may be done through an
Limited Right of Removal: onerous or gratuitous title
Possessor may also choose to ! Loss or Total Destruction of the Property or Thing
remove the useful Goes Out of the Commerce of Man
improvement provided that ! Possession of Another – possession by another must
such removal will not cause not be under the tolerance of the rightful possessor
any damage. (otherwise it will not affect the right of possession). If
the possession of another has lasted for more than a
*However, should the rightful year, the rightful possessor shall lose the right to file
owner choose to keep the an accion interdictal. But he shall not lose the real
useful improvement, right of possession until after the lapse of 10 years.
possessor cannot remove it
but is entitled to
compensation for it,
computed as (a) the expenses
made to make the useful
improvement OR (b) the
amount of the increase in

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 o With regard to possession by another, there are
however, recognized exceptions to the rule. Under
these circumstances, possession is not lost even if
property is possessed by another:
! Presumption of Continuity – a present possessor
who can prove his possession at a prior point in time
is presumed to also have had possession of the
property during the intermediate period. Such
presumption, however, is rebuttable.
! Tolerance – when the rightful possessor does not
give his express consent but allows actual possessor
to continue with his actions
! License – when the rightful possessor gives his
express consent to actual possessor’s actions
! Acts done clandestinely, or with violence, force or
intimidation – Under NCC Art. 537, these acts do not
affect possession
B. Definition
Art. 523 Possession is the holding of a thing or the enjoyment
of a right. (430a)
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)
- Owner – possessor believes himself to be the owner and
does not recognize a superior right in anyone else
- Holder – actual (and may even be legal) possessor who
recognizes in another a superior right, which is usually
ownership
- Sir: Someone who possesses the property in the concept of
a holder is necessarily a possessor in bad faith, as he knows
that someone has a superior right (existence of which then
constitutes a flaw in his title).
Art. 530 Only things and rights which are susceptible of being
appropriated may be the object of possession. (437)
- Possession – is defined by NCC Art. 523 to be “the
holding of a thing or enjoyment of a right.”
- Sir: It is essentially subjecting the object under one’s
exclusive control.
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)
- Possession from the POV of an actual possessor (possessor
de facto)
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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)
- Possession from the POV of the one who lost possession
(possessor de jure)
- Loss of Possession
o Under NCC Art. 555, there are 4 ways that a possessor
may lose his right of possession:
! Abandonment
! Assignment to another – may be done through an
onerous or gratuitous title
! Loss or Total Destruction of the Property or Thing
Goes Out of the Commerce of Man
! Possession of Another – possession by another must
not be under the tolerance of the rightful possessor
(otherwise it will not affect the right of possession). If
the possession of another has lasted for more than a
year, the rightful possessor shall lose the right to file
an accion interdictal. But he shall not lose the real
right of possession until after the lapse of 10 years.
o With regard to possession by another, there are
however, recognized exceptions to the rule. Under
these circumstances, possession is not lost even if
property is possessed by another:
! Presumption of Continuity – a present possessor
who can prove his possession at a prior point in time
is presumed to also have had possession of the
property during the intermediate period. Such
presumption, however, is rebuttable.
! Tolerance – when the rightful possessor does not
give his express consent but passively allows actual
possessor to continue with his actions
! License – when the rightful possessor gives his
express consent to actual possessor’s actions
! Acts done clandestinely, or with violence, force or
intimidation – Under NCC Art. 537, these acts do not
affect possession
- When violence, force, or intimidation is used to take
possession, there is a natural objection on the part of the
dispossessed person by the very fact that violence, force, or
intimidation had to be used.
- The law does not allow violence as a means to acquire to
acquire property; to do so would promote lex tallones (law
of retaliation) wherein everyone would continue the use of
violence to claim and/or reclaim property.
3
Who Exercises – animus possidendi
Art. 524 Possession may be exercised in one’s own name or in
that of another.
- Self – the right of possession is exercised in one’s own
name
- In Name of Another – the right of possession is vested in
another and the one in actual possession is exercising it in
his name
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 on the same character in which it was acquired, until
the contrary is proved. (436)

Art. 532 Possession may be acquired by the same person who C. Character and Effects
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 1. Right to be Respected in Possession
possession shall not be considered as acquired until the - Includes the right to recover/be restored in his possession
person in whose name the act of possession was executed has
ratified the same, without prejudice to the juridical
Art. 428 The owner has the right to enjoy and dispose of a
consequences of negotiorum gestio in a proper case. (439a)
thing, without other limitations than those established by law.

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. 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)
The owner has also a right of action against the holder and
possessor of the thing in order to recover it. (348a)
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 filing of the complaint present a
motion to secure from the competent court, in the action for
forcible entry, a writ of preliminary mandatory injunction to
restore him in his possession. The court shall decide the
motion within thirty (30) days from filing thereof. (446a)

Status Art. 537 Acts merely tolerated, and those executed

clandestinely and without the knowledge of the possessor of a
Art. 526 He is deemed a possessor in good faith who is not thing, or by violence, do not affect possession. (444)
aware that there exists in his title or mode of acquisition any
flaw which invalidates it.
2. Right to Accessories
He is deemed a possessor in bad faith who possesses in any
case contrary to the foregoing.
Art. 542 The possession of real property presumes that of the
movables therein, so long as it is not shown or proved that
Mistake upon a doubtful or difficult question of law may be the
they should be exlcluded. (449)
basis of good faith. (433a)

Art. 544 A possessor in good faith is entitled to the fruits

- Good Faith – when possessor is NOT aware of the existing
received before the possession is legally interrupted.
flaw in his title that may invalidate his acquisition
- Bad Faith – when possessor IS aware of the flaw in the title
Natural and industrial fruits are considered received from the
which may invalidate his acquisition
time they are gathered or severed.

Art. 527 Good faith is always presumed, and upon him who
Civil fruits are deemed to accrue daily and belong to the
alleges bad faith on the part of a possessor rests the burden of
possessor in good faith on that proportion. (451)
proof. (434)

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4 PROPERTY EXAM # 2 REVIEWER | HERRERA-LIM, HUSMILLO
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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. 551 Improvements caused by Nature or time shall always
inure to the benefit of the person who has succeeded in
recovering possession. (456)
Art. 560 Wild animals are possessed only while they are under
one’s 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. 438 Hidden treasure belongs to the owner of the land,
building, or other property on which it is found.
Nevertheless, when the discovery is made on the property of
another, or of the State or any of its subdivisions, and by
chance, one-half thereof shall be allowed to the finder. If the
finder is a trespasser, he shall not be entitled to any share of
the treasure.
If the things found be of interest to science or the arts, the
State may acquire them at their just price, which shall be
divided in conformity with the rule stated. (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)
Right to Accession
o Entitles possessor to everything produced by the property
AND everything attached or incorporated thereto.
o Accessions include:
! Fruits – produced by the property; may be natural,
industrial, and civil
! Accessories – those attached to the property which may
(a) increase the value or utility of the property, (b)
preserve the property, or (c) embellish the property.
3. Continuity of Possession – corpus possessionis
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)
- Presumption of Continuity – a present possessor who can
prove his possession at a prior point in time is presumed to
also have had possession of the property during the
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intermediate period. Such presumption, however, is
rebuttable.
Art. 561 One who recovers, according to law, possession
unjustly lost, shall be deemed for all purposes, which may
redound to his benefit, to have enjoyed it without interruption.
(466)
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)
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. 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 flaws affecting it; but
the effects of possession in good faith shall not benefit him
except from the date of the death of the decedent. (442)
4. Right to Reimbursement
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. 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)
5
Art. 549 The possessor in bad faith shall reimburse the fruits
received and those which the legitimate possessor could have Limited Right of Removal:
received, and shall have a right only to the expenses Possessor may also choose to
mentioned in paragraph 1 of Article 546 and in Article 443. The remove the useful
expenses incurred in improvements for pure luxury or mere improvement provided that
pleasure shall not be refunded to the possessor in bad faith; such removal will not cause
but he may remove the objects for which such expenses have any damage.
been incurred, provided that the thing suffers no injury
thereby, and that the lawful possessor does not prefer to retain *However, should the rightful
them by paying the value they may have at the time he enters owner choose to keep the
into possession. (455a) useful improvement,
possessor cannot remove it
Art. 545 If at the time the good faith ceases, there should be but is entitled to
any natural or industrial fruits, the possessor shall have a right compensation for it,
to a part of the expenses of cultivation, and to a part of the net computed as (a) the expenses
harvest, both in proportion to the time of the possession. made to make the useful
improvement OR (b) the
The charges shall be divided on the same basis by the two amount of the increase in
possessors. value of the property due to
the useful improvement
The owner of the thing may, should he so desire, give the Necessary Expenses
possessor in good faith the right to finish the cultivation and Entitled to reimbursement Entitled to reimbursement
gathering of the growing fruits, as an indemnity for his part of with right to retain property but has NO right to retain the
the expenses of cultivation and the net proceeds; the until fully reimbursed property
possessor in good faith who for any reason whatever should Luxurious Expenses
refuse to accept this concession, shall lose the right to be Both GF and BF possessors are NOT entitled to
indemnified in any other manner. (452a) reimbursement but both have the limited right of removal (see
above).
Note: The right of retention acts as a security for the possessor
Art. 550 The costs of litigation over the property shall be
in good faith so that reimbursement to him is assured by the
borne by every possessor. (n)
fact that the rightful owner may not recover property until he
has fully reimbursed him.
Art. 552 A possessor in good faith shall not be liable for the
*Note: The repayment of useful expenses is based on the
deterioration or loss of the thing possessed, except in cases in
principle against unjust enrichment; since it would be unfair if
which it is proved that he has acted with fraudulent intent or
rightful owner will benefit from the useful improvement but will
negligence, after the judicial summons.
not be required to pay for it. However, only the good faith
possessor is entitled to it since a person is not allowed to profit
A possessor in bad faith shall be liable for deterioration or loss
from his wrongdoing.
in every case, even if caused by a fortuitous event. (457a)

5. Possession in Common
Art. 553 One who recovers possession shall not be obliged to
pay for improvements which have ceased to exist at the time Art. 543 Each one of the participants of a thing possessed in
he takes possession of the thing. (458) common shall be deemed to have exclusively possessed the
part which may be allotted to him upon the division thereof, for
- Should the rightful owner recover the property from the the entire period during which the co-possession lasted.
actual possessor, the actual possessor is entitled to Interruption in the possession of the whole or a part of a thing
reimbursements for certain expenses, depending on the possessed in common shall be to the prejudice of all the
presence of good faith or bad faith, possessors. However, in case of civil interruption, the Rules of
Court shall apply. (450a)
Good Faith Bad Faith
Useful Expenses
Entitled to reimbursement Not entitled to
with right to retain property reimbursement
until fully reimbursed and also
a limited right of removal
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6. Basis of Title
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. 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)
Art. 540 Only the possession acquired and enjoyed in the
concept of owner can serve as a title for acquiring dominion.
(447)
7. Effect on True Owner
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 ratifies them subsequently. (463)
D. Lease of Urban Lands
- Lease of rural lands are governed by agricultural or agrarian
laws
- Lease of work covered by labor laws
1. Definition
Art. 1642 The contract of lease may be of things, or of work
and service. (1542)
Art. 1643 In the lease of things, one of the parties binds
himself to give to another the enjoyment or use of a thing for a
price certain, and for a period which may be definite or
indefinite. However, no lease for more than ninety-nine years
shall be valid. (1543a)
Art. 1644 In the lease of work or service, one of the parties
binds himself to execute a piece of work or to render to the
other some service for a price certain, but the relation of
principal and agent does not exist between them. (1544a)
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Art. 1645 Consumable goods cannot be the subject matter of
a contract of lease, except when they are merely to be
exhibited or when they are accessory to an industrial
establishment. (1545a)
2. Who is Qualified/Disqualified
Art. 1646 The persons disqualified to buy referred to in
Articles 1490 and 1491, are also disqualified to become lessees
of the things mentioned therein. (n)
Art. 1490 The husband and the wife cannot sell property to
each other, except:
(1) When a separation of property was agreed upon in the
marriage settlements; or
(2) When there has been a judicial separation or property
under Article 191. (1458a)
Art. 1491 The following persons cannot acquire by purchase,
even at a public or judicial auction, either in person or through
the mediation of another:
(1) The guardian, the property of the person or persons who
may be under his guardianship;
(2) Agents, the property whose administration or sale may have
been entrusted to them, unless the consent of the principal has
been given;
(3) Executors and administrators, the property of the estate
under administration;
(4) Public officers and employees, the property of the State or
of any subdivision thereof, or of any government-owned or
controlled corporation, or institution, the administration of
which has been intrusted to them; this provision shall apply to
judges and government experts who, in any manner
whatsoever, take part in the sale;
(5) Justices, judges, prosecuting attorneys, clerks of superior
and inferior courts, and other officers and employees
connected with the administration of justice, the property and
rights in litigation or levied upon an execution before the court
within whose jurisdiction or territory they exercise their
respective functions; this prohibition includes the act of
acquiring by assignment and shall apply to lawyers, with
respect to the property and rights which may be the object of
any litigation in which they may take part by virtue of their
profession.
(6) Any others specially disqualified by law. (1459a)
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3. Obligations of Parties
a. Lessor
Art. 1654 The lessor is obliged:
(1) To deliver the thing which is the object of the contract in
such a condition as to render it fit for the use intended;
(2) To make on the same during the lease all the necessary
repairs in order to keep it suitable for the use to which it has
been devoted, unless there is a stipulation to the contrary;
(3) To maintain the lessee in the peaceful and adequate
enjoyment of the lease for the entire duration of the contract.
(1554a)
Art. 1655 If the thing leased is totally destroyed by a
fortuitous event, the lease is extinguished. If the destruction is
partial, the lessee may choose between a proportional
reduction of the rent and a rescission of the lease. (n)
Art. 1656 The lessor of a business or industrial establishment
may continue engaging in the same business or industry to
which the lessee devotes the thing leased, unless there is a
stipulation to the contrary. (n)
Art. 1661 The lessor cannot alter the form of the thing leased
in such a way as to impair the use to which the thing is devoted
under the terms of the lease. (1557a)
Art. 1664 The lessor is not obliged to answer for a mere act of
trespass which a third person may cause on the use of the
thing leased; but the lessee shall have a direct action against
the intruder.
There is a mere act of trespass when the third person claims no
right whatever. (1560a)
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 caused to the
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principal thing, and the lessor does not choose to retain them
by paying their value at the time the lease is extinguished. (n)
b. Lessee
Art. 1657 The lessee is obliged:
(1) To pay the price of the lease according to the terms
stipulated;
(2) To use the thing leased as a diligent father of a family,
devoting it to the use stipulated; and in the absence of
stipulation, to that which may be inferred from the nature of
the thing leased, according to the custom of the place;
(3) To pay expenses for the deed of lease. (1555)
Art. 1658 The lessee may suspend the payment of the rent in
case the lessor fails to make the necessary repairs or to
maintain the lessee in peaceful and adequate enjoyment of the
property leased. (n)
Art. 1662 If during the lease it should become necessary to
make some urgent repairs upon the thing leased, which cannot
be deferred until the termination of the lease, the lessee is
obliged to tolerate the work, although it may be very annoying
to him, and although during the same, he may be deprived of
a part of the premises.
If the repairs last more than forty days the rent shall be
reduced in proportion to the time - including the first forty
days - and the part of the property of which the lessee has
been deprived.
When the work is of such a nature that the portion which the
lessee and his family need for their dwelling becomes
uninhabitable, he may rescind the contract if the main purpose
of the lease is to provide a dwelling place for the lessee.
(1558a)
Art. 1663 The lessee is obliged to bring to the knowledge of
the proprietor, within the shortest possible time, every
usurpation or untoward act which any third person may have
committed or may be openly preparing to carry out upon the
thing leased.
He is also obliged to advise the owner, with the same urgency,
of the need of all repairs included in No. 2 of Article 1654.
In both cases the lessee shall be liable for the damages which,
through his negligence, may be suffered by the proprietor.
If the lessor fails to make urgent repairs, the lessee, in order to
avoid an imminent danger, may order the repairs at the lessor's
cost. (1559a)
Art. 1665 The lessee shall return the thing leased, upon the
termination of the lease, as he received it, save what has been
lost or impaired by the lapse of time, or by ordinary wear and
tear, or from an inevitable cause. (1561a)
Art. 1666 In the absence of a statement concerning the
condition of the thing at the time the lease was constituted,
the law presumes that the lessee received it in good condition,
unless there is proof to the contrary. (1562)
Art. 1667 The lessee is responsible for the deterioration or
loss of the thing leased, unless he proves that it took place
without his fault. This burden of proof on the lessee does not
apply when the destruction is due to earthquake, flood, storm
or other natural calamity. (1563a)
Art. 1668 The lessee is liable for any deterioration caused by
members of his household and by guests and visitors. (1564a)
acquiescence of the lessor, and unless a notice to the contrary
by either party has previously been given, it is understood that
there is an implied new lease, not for the period of the original
contract, but for the time established in Articles 1682 and 1687.
The other terms of the original contract shall be revived.
(1566a)
Art. 1672 In case of an implied new lease, the obligations
contracted by a third person for the security of the principal
contract shall cease with respect to the new lease. (1567)
7. Unlawful Detainer
Art. 1671 If the lessee continues enjoying the thing after the
expiration of the contract, over the lessor's objection, the
former shall be subject to the responsibilities of a possessor in
bad faith. (n)

Art. 1673 The lessor may judicially eject the lessee for any of
4. Payment the following causes:

Art. 1679 If nothing has been stipulated concerning the place (1) When the period agreed upon, or that which is fixed for the
and the time for the payment of the lease, the provisions or duration of leases under Articles 1682 and 1687, has expired;
Article 1251 shall be observed as regards the place; and with
respect to the time, the custom of the place shall be followed. (2) Lack of payment of the price stipulated;
(1574)
(3) Violation of any of the conditions agreed upon in the
contract;
5. Termination
(4) When the lessee devotes the thing leased to any use or
service not stipulated which causes the deterioration thereof;
Art. 1659 If the lessor or the lessee should not comply with
or if he does not observe the requirement in No. 2 of Article
the obligations set forth in Articles 1654 and 1657, the
1657, as regards the use thereof.
aggrieved party may ask for the rescission of the contract and
indemnification for damages, or only the latter, allowing the
The ejectment of tenants of agricultural lands is governed by
contract to remain in force. (1556)
special laws. (1569a)

Art. 1660 If a dwelling place or any other building intended

Art. 1674 In ejectment cases where an appeal is taken the
for human habitation is in such a condition that its use brings
remedy granted in Article 539, second paragraph, shall also
imminent and serious danger to life or health, the lessee may
apply, if the higher court is satisfied that the lessee's appeal is
terminate the lease at once by notifying the lessor, even if at
frivolous or dilatory, or that the lessor's appeal is prima facie
the time the contract was perfected the former knew of the
meritorious. The period of ten days referred to in said article
dangerous condition or waived the right to rescind the lease
shall be counted from the time the appeal is perfected. (n)
on account of this condition. (n)

Art. 1675 Except in cases stated in Article 1673, the lessee

Art. 1669 If the lease was made for a determinate time, it
shall have a right to make use of the periods established in
ceases upon the day fixed, without the need of a demand.
Articles 1682 and 1687. (1570)
(1565)

Art. 1677 The purchaser in a sale with the right of redemption

cannot make use of the power to eject the lessee until the end
6. Renewal
of the period for the redemption. (1572)

Art. 1670 If at the end of the contract the lessee should

continue enjoying the thing leased for fifteen days with the

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8. Transfer of Lease
Art. 1649 The lessee cannot assign the lease without the
consent of the lessor, unless there is a stipulation to the
contrary. (n)
Art. 1676 The purchaser of a piece of land which is under a
lease that is not recorded in the Registry of Property may
terminate the lease, save when there is a stipulation to the
contrary in the contract of sale, or when the purchaser knows of
the existence of the lease.
If the buyer makes use of this right, the lessee may demand
that he be allowed to gather the fruits of the harvest which
corresponds to the current agricultural year and that the
vendor indemnify him for damages suffered.
If the sale is fictitious, for the purpose of extinguishing the
lease, the supposed vendee cannot make use of the right
granted in the first paragraph of this article. The sale is
presumed to be fictitious if at the time the supposed vendee
demands the termination of the lease, the sale is not recorded
in the Registry of Property. (1571a)
9. Sub-lease
Art. 1650 When in the contract of lease of things there is no
express prohibition, the lessee may sublet the thing leased, in
whole or in part, without prejudice to his responsibility for the
performance of the contract toward the lessor. (1550)
Art. 1651 Without prejudice to his obligation toward the
sublessor, the sublessee is bound to the lessor for all acts
which refer to the use and preservation of the thing leased in
the manner stipulated between the lessor and the lessee.
(1551)
Art. 1652 The sublessee is subsidiarily liable to the lessor for
any rent due from the lessee. However, the sublessee shall not
be responsible beyond the amount of rent due from him, in
accordance with the terms of the sublease, at the time of the
extrajudicial demand by the lessor.
Payments of rent in advance by the sublessee shall be deemed
not to have been made, so far as the lessor's claim is
concerned, unless said payments were effected in virtue of the
custom of the place. (1552a)
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10. Warranties
Art. 1547 In a contract of sale, unless a contrary intention
appears, there is:
(1) An implied warranty on the part of the seller that he has a
right to sell the thing at the time when the ownership is to
pass, and that the buyer shall from that time have and enjoy
the legal and peaceful possession of the thing;
(2) An implied warranty that the thing shall be free from any
hidden faults or defects, or any charge or encumbrance not
declared or known to the buyer.
This Article shall not, however, be held to render liable a
sheriff, auctioneer, mortgagee, pledgee, or other person
professing to sell by virtue of authority in fact or law, for the
sale of a thing in which a third person has a legal or equitable
interest. (n)
Art. 1548 Eviction shall take place whenever by a final
judgment based on a right prior to the sale or an act imputable
to the vendor, the vendee is deprived of the whole or of a part
of the thing purchased.
The vendor shall answer for the eviction even though nothing
has been said in the contract on the subject.
The contracting parties, however, may increase, diminish, or
suppress this legal obligation of the vendor. (1475a)
Art. 1561 The vendor shall be responsible for warranty
against the hidden defects which the thing sold may have,
should they render it unfit for the use for which it is intended,
or should they diminish its fitness for such use to such an
extent that, had the vendee been aware thereof, he would not
have acquired it or would have given a lower price for it; but
said vendor shall not be answerable for patent defects or those
which may be visible, or for those which are not visible if the
vendee is an expert who, by reason of his trade or profession,
should have known them. (1484a)
Art. 1653 The provisions governing warranty, contained in the
Title on Sales, shall be applicable to the contract of lease.
In the cases where the return of the price is required, reduction
shall be made in proportion to the time during which the
lessee enjoyed the thing. (1553)
Art. 1666 In the absence of a statement concerning the
condition of the thing at the time the lease was constituted,
the law presumes that the lessee received it in good condition,
unless there is proof to the contrary. (1562)
OWNERSHIP
A. Sole Ownership
In General
- Ownership
o No specific legal definition provided in our jurisdiction.
o A real right of the highest form
o Sir: While not defined, a big bundle of rights are
accorded to those who hold this real right.
o A possessor’s right is subject to a limitation: the right of
the owner (in case the possessor is not the owner).
- Rights Arising from Ownership
1. Rights Arising From Possession
o Since the right of possession is deemed implied in
ownership, the rights arising from possession can be
exercised by one who has the ownership of property.
o However, the rights arising from possession when
exercised by the owner are superior compared to when
only a mere possessor is exercising them (i.e., an
owner’s right to dispose is superior to that of a
possessor’s right to dispose).
o (See discussion on Rights Arising from Possession)
2. Right to Enjoy
o Entitles the owner to enjoy the property without limits
other than those set by law (NCC Art. 428)
3. Right to Dispose
o Entitles to the owner to dispose of his property without
limits other than those set by law (NCC Art. 428)
o An owner may fully dispose of the property; a possessor
may only dispose of the right of possession.
4. Right to Accession
o Entitles the owner to everything produced by the
property (fruits) AND everything attached or
incorporated (accessories) thereto.
o An owner’s right to accession is absolute while a
possessor’s right to accession may be subjected to an
obligation to reimburse the rightful owner of the
property if he (possessor) is not the owner.
5. Right to Actions
o Already includes the actions for recovery available to a
possessor
o However, an owner is also entitled to exercise/make use
of certain actions that are unique to ownership.
o Actions:
! Accion reinvindicatoria – the action to recover
ownership
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! Action to Quiet Title – an action to protect the
ownership by removal of clouds (any instrument,
record, claim encumbrance or proceeding that
undermines one’s ownership or casts it in doubt) to
the title.
- It may be remedial (removal of an existing cloud)
or preventive (stop clouds to title from forming).
- The cloud may be formed by others or by the
owner himself (ex. owner mortgages the
property).
- Sir: In case the owner himself creates the cloud,
the action is said to “terminate” it.
- Generally, the action prescribes but when the
plaintiff is in actual possession, the action
becomes imprescriptible.
! Conveyance – the action to transfer the ownership
to another
! Damages – the owner is entitled to recover
damages for any injuries done to his property and
against his right of ownership over it.
6. Right to Exclude
o Similar to possession, ownership is a real right and may
be exercised against to the whole world.
o An owner of a property may exclude all others by
extinguishing all other property rights to his property.
7. Right to Just Compensation (Eminent Domain Cases)
o As provided in the Constitution, an owner is entitled to
the payment of just compensation when the State
expropriates his property for public use.
Q: If Rights Arising from Possession form nine-tenths
of Rights Arising from Ownership, what is the
remaining one-tenth?
A: The right to dispose. Only an owner may make a valid
disposition of property. A person NOT the owner may only
dispose of the right that may pertain to him (ex. usufruct or
possession) and his transferee shall only have the same right as
he had.
a. Definition
Art. 427 Ownership may be exercised over things or rights. (n)
Art. 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 estate and intestate
succession, and in consequence of certain contracts, by
tradition.
They may also be acquired by means of prescription. (609a)
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b. Rights of Owners
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)
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)
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)
Art. 435 No person shall be deprived of his property except
by competent authority and for public use and always upon
payment of just compensation.
Should this requirement be not first complied with, the courts
shall protect and, in a proper case, restore the owner in his
possession. (349a)
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 finder. If the
finder is a trespasser, he shall not be entitled to any share of
the treasure.
If the things found be of interest to science of 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)
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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 artificially.
(353)
1. Rights of Action in rem/in personam/quasi in rem
Sandejas v. Robles
- The action to enforce a contract of sale of land (real
property) is in the nature of an action in personam since it
aims to establish a claim against some particular person
through judgment
Ching v. CA
- You can’t serve summons upon a dead man
- Legal personality ceases upon death
Hernandez v. DBP
- Relationship between the two arises out of a contract
between Hernandez and DBP (that DBP would grant
Hernandez land)
- The action does NOT AFFECT the title; title and ownership
are not even in issue because there was no title yet
(Hernandez hasn’t paid because DBP rejected payment)
Q: How do we distinguish between the 3 kinds of
actions: in rem, in personam, and quasi in rem?
2. Specific Rights to Protection & Enforcement
Self-Help
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)
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)
Legal Action
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)
Art. 433 Actual possession under claim of ownership raises
disputable presumption of ownership. The true owner must
resort to judicial process for the recovery of the property. (n)

Art. 434 In an action to recover, the property must be
identified, and the plaintiff must rely on the strength of his title
and not on the weakness of the defendant's claim. (n)
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)
Quieting of Title
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 benefits
he may have received from the latter, or reimburse him for
expenses that may have redounded to the plaintiff's benefit.
Art. 480 The principles of the general law on the quieting of
title are hereby adopted insofar as they are not in conflict 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.
Art. 1147 The following actions must be filed within one year:
(1) For forcible entry and detainer;
(2) For defamation. (n)
- Action to Quiet Title – an action to protect the ownership
by removal of clouds (any instrument, record, claim
encumbrance or proceeding that undermines one’s
ownership or casts it in doubt) to the title.
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PROPERTY EXAM # 2 REVIEWER | HERRERA-LIM, HUSMILLO
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o It may be remedial (removal of an existing cloud) or
preventive (stop clouds to title from forming).
o The cloud may be formed by others or by the owner
himself (ex. owner mortgages the property).
o Sir: In case the owner himself creates the cloud, the
action is said to “terminate” it.
o Generally, the action prescribes but when the plaintiff is
in actual possession, the action becomes
imprescriptible.
Heirs of Olviga v. CA
- There was an implied trust because the application was
done in fraud of Pureza
- Action to quiet title is imprescriptible only if the person
claiming to quiet title is in possession
Titong v. CA
- The cloud in an action to quiet title MUST be in the form of
an “instrument, record, claim, encumbrance or
proceeding”
- Boundary disputes are improper issues in an action to quiet
title; an action for forcible entry would have been the
proper remedy
Q: What are the distinctions between the cases that
involve the Action to Quiet Title?
Recovery of Possession
Art. 434 In an action to recover, the property must be
identified, and the plaintiff must rely on the strength of his title
and not on the weakness of the defendant's claim. (n)
Reconveyance
Replevin
Damages
Bishop of Cebu v. Mangaron
- If possession was validly lost, recovery of possession can be
had through judicial action
- Those who believe that they have a better claim to a certain
property MUST course their claim through the courts and
NOT by taking the law into their own hands
- Because the action was brought more than a year after, the
Court had to determine whether the remedy of accion
publiciana still existed despite its being absent in the
provisions of the Civil Code
Chacon v. CA
- There was application in fraud of the occupants – in the
application, stated that there were no occupants/adverse
claimants
- Action to quiet title does not prescribe when the one
bringing the action is in possession
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German Management v. CA
- Regardless of the manner of acquisition, possessor is
protected
- Possessor is granted the right to be respected in his
possession pursuant to the presumption granted by the law
that he possesses just title and is not required to show or
prove it (Art. 541)
- The power of ADMINISTRATION was granted by the Sps.
to German, which supposedly entitled them to act in their
behalf
o Although granted this power, they couldn’t just
forcefully oust the farmers in their possession
o Believing they have a right to the possession of the
property pursuant to the ownership, they should have
sought relief with the Courts
3. Right to Accesstion
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, scientific or artistic
collections, books, medals, arms, 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)
Immovable Property
a. Discreta
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
artificially. (353)
Art. 441 To the owner belongs:
(1) The natural fruits;
(2) The industrial fruits;
(3) The civil fruits. (354)
i. natural
Art. 442 Natural fruits are the spontaneous products of the
soil, and the young and other products of animals.
Industrial fruits are those produced by lands of any kind
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14 PROPERTY EXAM # 2 REVIEWER | HERRERA-LIM, HUSMILLO
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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 sufficient that they are in the
womb of the mother, although unborn. (357)
ii. industrial
Art. 442 Natural fruits are the spontaneous products of the
soil, and the young and other products of animals.
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)
iii. civil
Art. 442 Natural fruits are the spontaneous products of the
soil, and the young and other products of animals.
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)
b. Continua
i. naturally incorporated (accession natural)
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. (336)
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
floods. (367)
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)
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)
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
floatable rivers belong to the State. (371a)
Art. 465 Islands which through successive accumulation of
alluvial deposits are formed in non-navigable and non-
floatable 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)
- Summary of Rules on Natural Accession
1. Alluvion
o Accretion of sediments must be gradually and
imperceptibly deposited.
o Body of water involved must be rivers or similar bodies
of water (e.g., streams, brooks, etc.)
o There must be an absence of human intervention so
that accretion may successfully pertain to the riparian
owner
2. Avulsion
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o Same bodies of water involved in alluvion.
o Unlike alluvion, however, avulsion is the abrupt transfer
of a portion of land by the water’s current.
o If the land abruptly transferred remains identifiable, the
original riparian owner has up to two years to recover
such land. Otherwise, he shall lose ownership over it.
3. Uprooted Trees
o They are subject to recovery for 6 months, lapse of
which will cause loss of ownership over it.
4. Rivers Which Changed Course
o The riparian owner who lost land to the new bed shall
have ownership of the old bed in proportion to the land
he has lost
5. Formation of Islands (Rivers)
o River involved must be non-floatable and non-navigable
! Non-navigable – cannot be used by boats for
being too narrow.
! Non-floatable – cannot be used by boats because
depth of river is too shallow.
o Ownership of the island belongs to the riparian owner
who is closer to it.
o Ownership is shared if the island is equidistant from the
property of both riparian owners.
6. Formation of Islands (Sea)
o The State owns the island forming in the middle of the
sea
o It may later be classified as alienable and disposable.
o Sir: We have a law that prohibits acquisition of islands
but it is ignored
7. Branching Out of Rivers
o If the river branches out and isolates a part of the land,
the owner shall retain ownership over such isolated
part.
Zapata v. Dir. Of Lands
- The fish traps here were vertical and were “hooked” onto
the land; fish would swim up, get stuck
- The argument that the fish traps were the reason why there
was accretion was unfounded; the fish traps, which were set
up in 1894, were discontinued in 1926 " shows that the
alluvial accretion was NOT entirely due to the fish traps
Cortes v. CA
- Incorrect rule on natural accession was applied. The
provision on change of river’s course should have been
applied and not alluvion
- No gradual deposit of sediments in this case; a creek just
appeared (where are the sediments?)
Hilario v. CA
- Riverbanks form part of the river and hence also forms part
of the public dominion
Grande v. CA
- Riparian owners still have to register the land formed by
accretion; while ownership of such lands is theirs ipso jure,
15
 registration of such lands under their names is not
automatic.
- Riparian owners, to be able to register such land formed by
accretion in their name, must show possession.
- A Torrens title is indefeasible " why Grande is pointing this
out, thinking it’s an assertion of ownership of the accreted
area
Ignacio v. Dir. Of Lands
- The article on alluvion in the civil code is specific as to the
bodies of water covered; hence, accretion from the current
of the sea.
- Sir: Seas are not subject to disposal; under CA 141 (Public
Land Act), only lands (specifically, agricultural lands) may be
disposed of by the State.
Republic v. CA
- Reiterates the rule in alluvion that accretion must be
gradual and imperceptible
- Land still submerged, even under 1-2 meters of water only
is not part of accreted land but forms part of the river bed;
hence it is of public dominion
ii. artificially incorporated
- It is similar to industrial fruits in that it also requires labor.
- But it cannot be considered as fruits since the land does
not directly produce it.
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)
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 indemnified for damages. (360a)
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,
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16 PROPERTY EXAM # 2 REVIEWER | HERRERA-LIM, HUSMILLO
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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 fix 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. (354a)
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)
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
right 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)
Equatorial v. Mayfair
- This is a case with a bad application of law
Liwanag v. Yu Sonquian
- Ownership of the materials will not translate into ownership
of part of the building created with the material
- At best, he only has limited right of removal
JM Tuason v. Vda. de Lumanlan
- Respondent, having a presumptive knowledge of
petitioner’s Torrens Title, cannot be considered as a
builder in good faith
Gaboya v. Cui
- Rules of BPS do not apply in a situation where the owner of
both land and materials uses such materials to build
improvements on such land. He already owns the
improvement by the right of accession. The rules on BPS
only contemplate two situations: (a) where the owner uses
the materials of another to build/plant/sow OR (b) a person
builds/plants/sows on the land of another.
- BPS only applies when SOMEONE ELSE is in possession of
the property (here, the owners are in possession of the
property)
- (Usufruct issue) He is only entitled to the rents and fruits of
the land and the first building—stipulations in both written
documents only contemplate these benefits
Floresca v. Evangelista
- This is a case of dacion en pago
- Floresca was a possessor in bad faith because he built the
land even before the pacto de retro sale. After the sale,
although he became the owner by purchasing the property,
he remained a possessor in bad faith since he was aware of
a defect in his title (the right to repurchase of the
Evangelistas)
- A right to repurchase of the vendor a retro is, in effect, a
defect in the title since it may be exercised during the
stipulated period and will wrest away ownership from the
vendee a retro. It is cured when the period for redemption
lapses and the vendor a retro did not exercise such right.
- Good faith or bad faith depends on the knowledge of a
defect on the one’s title; defect is anything that may wrest
away the title from its holder.
Manotok Realty v. Tecson
- Involves land reform program
- Because the property was razed by fire, the only solution
would be to deliver the house
- Once a case is filed, that’s when a party ceases to be in GF
– there exists facts which show that there is a defect in the
title
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Q: What are the rules on artificial/industrial
accessions? (2 general rules + 3 subsidiary rules)
Movable Property
a. Conjunction/Adjunction
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)
17

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)
Art. 475 In the preceding articles, sentimental value shall be
duly appreciated. (n)
- Adjunction – when a thing is attached to another (two
different things)
- Conjunction – when two things are combined together
(same thing)
- The owner is the owner of the principal thing
- The principal thing is the one capable of independent
existence, while the accessory is the one that can be
replaced and embellishes the principal thing (ex. in a gold
ring with a diamond, the gold ring is the principal thing
while the diamond is the accessory; the diamond can be
replaced, say with a pearl, and only embellishes the ring)
- If it cannot be determined which is the principal and which
is the accessory, the one in higher value shall be the
principal. In case of equal value, the one with the larger
volume shall be the principal.
b. Commixtion/Confusion
Art. 472 If by the will of their 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)
Art. 475 In the preceding articles, sentimental value shall be
duly appreciated. (n)
- Commixtion - refers to solids
- Confusion – refers to liquids
- The resulting mix is owned by the owners in proportion to
the part belonging to him, with the value of the things
mixed in reference.
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- If one of the owners of the things mixed is in bad faith, he
shall lose the thing belonging to him and also becomes
liable to indemnify the other owner.
c. Specification
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 first 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 scientific reasons, is considerably more
than that of the material. (383a)
Art. 475 In the preceding articles, sentimental value shall be
duly appreciated. (n)
Exceptions: FC 119-120
Art. 119, FC Whenever an amount or credit payable within a
period of time belongs to one of the spouses, the sums which
may be collected during the marriage in partial payments or by
installments on the principal shall be the exclusive property of
the spouse. However, interests falling due during the marriage
on the principal shall belong to the conjugal partnership. (156a,
157a)
Art. 120, FC The ownership of improvements, whether for
utility or adornment, made on the separate property of the
spouses at the expense of the partnership or through the acts
or efforts of either or both spouses shall pertain to the conjugal
partnership, or to the original owner-spouse, subject to the
following rules:
When the cost of the improvement made by the conjugal
partnership and any resulting increase in value are more than
the value of the property at the time of the improvement, the
entire property of one of the spouses shall belong to the
conjugal partnership, subject to reimbursement of the value of
the property of the owner-spouse at the time of the
improvement; otherwise, said property shall be retained in
ownership by the owner-spouse, likewise subject to
reimbursement of the cost of the improvement.
In either case, the ownership of the entire property shall be
vested upon the reimbursement, which shall be made at the - General Rule: May be made any time
time of the liquidation of the conjugal partnership. (158a) - Exceptions:
o Agreement of co-owners not to partition the
property; valid for 10 years and renewable after
lapse of such period
B. Co-Ownership
o Stipulation in a donation/last will not to partition;
valid for 20 years only and NOT subject to renewal
Rights Pertaining to Co-Ownership
o When partition is prohibited by law
1. Right Arising Out of Ownership
o When partition renders thing unserviceable
- Rights arising out of ownership also apply to co-owners
o Property is naturally indivisible
- However, compared to ownership, exercise is not just
- How Done
by one sole person
o Judicially – co-owners institute an action in court
2. Right to Alienate Pro-Indiviso Share*
o Extrajudicial – co-owners come to an agreement
- Each co-owner has a right to dispose of his pro-indiviso
- Effects
share in the co-ownership
o Property is divided in proportion to co-owners’
- Does not require consent of other co-owners for its
shares
exercise
o Each co-owner becomes sole owner of his
- Modifies the right to dispose arising from ownership;
corresponding portion
co-owner may only alienate HIS/HER pro-indiviso share
o A computing and accounting of benefits and
and cannot dispose of the whole property unlike a sole
reimbursements are made, and are credited and
co-owner
charged to the former co-owners
3. Right of Enjoyment (Use)*
o Each co-owner shall be deemed the possessor of
- For the purpose for which it is intended because every
their respective portions from the time the co-
co-ownership has a particular purpose in mind
ownership was created until the present
- Must be in a manner not prejudicial to the use of other
o Each of the co-owners will be held liable to the
co-owners
particular co-owner for a) defects on the title and
4. Right of Redemption*
b) defects on the quality of the portion
- Applies when share is sold to a 3rd party/STRANGER to
2. Loss and Destruction of the Co-Owned Property
the co-ownership
3. Consolidation of Ownership in One Co-Owner
- Must be exercised within 30 days
4. Co-Owned Property Lost Through Acquisitive Prescription
- Must be in writing
in Favor of a Third Person
5. Right of Administration*
- General Rule: A co-owner may not acquire the co-
- Conduct repairs
owned property as long as he recognizes the co-
- Compel contributions for such repairs
ownership
- Introduce Improvements
- Exception: Co-owner adversely possesses co-owned
- Participate in decision-making
property and exercises rights of ownership in such a
o Requires Majority - Alterations, Disposition of the
manner that is incompatible to the co-ownership
Co-Owned Property
o Requires Consensus - Lease (not exceeding 6
years)
1. Definition
o NOTE: What constitutes a majority is to be
determined with respect to the shares of the co-
owners and NOT the number of co-owners. Art. 484 There is co-ownership whenever the ownership of an
! Ex. If 2 out of 6 co-owners form 60% of the co- undivided thing or right belongs to different persons.
ownership, they form the majority when it
comes to decision-making. Votes from the In default of contracts, or of special provisions, co-ownership
other 4 co-owners cannot overturn what these shall be governed by the provisions of this Title. (392)
two will decide.
Art. 485 The share of the co-owners, in the benefits as well as
*NOTE: Numbers 2-5 are the unique and special rights arising in the charges, shall be proportional to their respective
from co-ownership; as stated in number 1, rights of owners interests. Any stipulation in a contract to the contrary shall be
may also be exercised by each of the co-owners (e.g., right to void.
bring action, right to exclude, etc.)
The portions belonging to the co-owners in the co-ownership
Termination of Co-Ownership shall be presumed equal, unless the contrary is proved. (393a)
1. Partition

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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 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)
Art. 493 Each co-owner shall have the full ownership of his
part and of the fruits and benefits 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)
Art. 1620 A co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-owners or of
any of them, are sold to a third person. If the price of the
alienation is grossly excessive, the redemptioner shall pay only
a reasonable one.
Should two or more co-owners desire to exercise the right of
redemption, they may only do so in proportion to the share
they may respectively have in the thing owned in common.
(1522a)
Pardell v. Bartolome
- The property in Calle Escolta is commercial property
- Enjoyment of property – a co-owner is entitled to use
property in common 1) in accordance with the purpose for
which it is intended, so long as it is not prejudicial to the
interests of the co-owners; and 2) without injuring other co-
owners and without preventing them from enjoying their
own rights
- Matilde is within her rights as a co-owner in occupying the
upper story as a residence because only the lower story was
used for commercial purposes; the upper story was used to
store personal property owned in common (non-
commercial use)
- Her husband, Gaspar de Bartolome, was occupying a
portion of the lower story as an office for his profession—as
justice of the peace (equivalent of a municipal court judge)
- Gaspar, being a stranger to the co-ownership, is required
to pay to Vicenta one-half of the rent for use of that lower
story portion; TOTAL RENT = ½ (Vicenta) + ½ (Matilde)
o The ½ to Vicenta must be paid
o The ½ to Matilde does not need to be paid because:
! ½ of the ½ (1/4) is considered a fruit that belongs
to the CPG; it is paraphernal property of Matilde
that pertains to the CPG (which Gaspar co-owns,
so it is like paying to himself also)
! ½ of the ½ (1/4) which pertains solely to Matilde as
a co-owner with her sister " she is not entitled to
this anymore because, by allowing her husband to
use it, she is, in effect, enjoying it as well (since she
is already enjoying it, not entitled to the rents
anymore)
Basa v. Aguilar
- This case discusses who is a 3rd party with respect to the co-
ownership
- Parties are successors-in-interest to the parcel of land in
question:
o 50% pertains to the 7 petitioners; 50% to the spouses
- The son-in-law of the spouses was a third party, relative to
the co-ownership
- The heir here, Macaria, would have inherited her parents’
share in the co-ownership, but her husband would not; no
portion of the co-ownership would ever pertain to him by
succession
o Macaria’s inchoate right is still inchoate because the
conveyance occurred during the lifetime of the
spouses " she still has no right to their share while
they are alive
- The sale to him is considered a sale to a stranger; therefore,
the co-owners are entitled to exercise the right of
redemption in order to minimize co-ownership
Del Ocampo v. Abesia
- Art. 448 does not apply to a co-ownership prior to the
partition " said provision does not apply when it is the
owner making the improvement on his land using his
materials (see Gaboya v. Cui)
o At the time said house was built, parties were still co-
owners of the land, and improvements made were
considered to be made by owners of the land in GF
- Once partitioned, co-ownership ceased to exist; once it
did, Abesia ceased to be a builder-owner of the house in
GF (knew that there existed a defect in the title because
the house was encroaching on the land of Sps. Del
Ocampo
- SIR: So how come 448 applies? Does the nature of the
property change from GF to BF (upon partition)?
2. Special Rights of Co-Owners
Art. 487 Any one of the co-owners may bring an action in
ejectment. (n)
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 co-
ownership. (395a)
Art. 489 Repairs for preservation may be made at the will of

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one of the co-owners, but he must, if practicable, first 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)
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 floor of
his story; the floor 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 first story shall be
maintained at the expense of all the owners pro rata, with the
exception of the owner of the ground floor; the stairs from the
first to the second story shall be preserved at the expense of
all, except the owner of the ground floor and the owner of the
first story; and so on successively. (396)
Art. 491 None of the co-owners shall, without the consent of
the others, make alterations in the thing owned in common,
even though benefits 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 co-ownership.
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
co-owners, and the remainder is owned in common, the
preceding provision shall apply only to the part owned in
common. (398)
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.
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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)
Art. 1088 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 one month from the time they were notified in writing of the
sale by the vendor. (1067a)
Art. 1620 A co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-owners or of
any of them, are sold to a third person. If the price of the
alienation is grossly excessive, the redemptioner shall pay only
a reasonable one.
Should two or more co-owners desire to exercise the right of
redemption, they may only do so in proportion to the share
they may respectively have in the thing owned in common.
(1522a)
Art. 1623 The right of legal pre-emption or redemption shall
not be exercised except within thirty days from the notice in
writing by the prospective vendor, or by the vendor, as the
case may be. The deed of sale shall not be recorded in the
Registry of Property, unless accompanied by an affidavit of the
vendor that he has given written notice thereof to all possible
redemptioners.
The right of redemption of co-owners excludes that of
adjoining owners. (1524a)
Melencio v. Dy Tiao Lay
- A lease exceeding 60 years approved only by a small
portion of the co-owners is invalidly constituted
NOTE: A lease exceeding 6 years amounts to an act of
ownership and will require a majority.
Lavadia v. Cosme
- Even if the depositary of the property is a co-owner, he is
still held to be liable to the same standards as would a
regular depositary.
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Tuason v. Tuason
- The Court found that plaintiff was not being compelled to
stay in the co-ownership as such co-ownership was already
extinguished when they entered into a partnership to sell
the lands. Hence, the provision of the NCC, which allows
partition to be made at any time does not apply here
Q: What are the distinctions between the Rights
Arising from Ownership compared to Rights Arising
from Co-Ownership?
3. Special Rule on Marital Properties
Art. 90, FC The provisions on co-ownership shall apply to the
absolute community of property between the spouses in all
matters not provided for in this Chapter. (n)
USUFRUCT
A. In General
How Created
1. Law
2. Will of the Parties
o Acts inter vivos/Donations
o Last Will or Testamentary Succession
3. Prescription
Termination of the Usufruct
1. Death of the Usufructuary
2. Expiration of the Period of the Usufruct OR Occurrence of
the Resolutory Condition
3. Merger of the Rights of Usufruct and Naked Ownership in
One Person
4. Renunciation of the Right of Usufruct
5. Total Loss of the Property
6. Termination of the Right of Naked Owner to Constitute
Usufruct
7. Property Lost Through Acquisitive Prescription
1. Definition
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)
Alunan v. Veloso
- A usufruct over money, a fungible thing, is possible;
relevant rules shall apply
Belonio v. Novella
- Plaintiff claiming that the transaction was only an equitable
mortgage and not a pacto de retro sale, raised the
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22 PROPERTY EXAM # 2 REVIEWER | HERRERA-LIM, HUSMILLO
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argument that the right of usufruct was only granted to the
respondent
- Court noted however that this argument is beneficial to
respondent since usufruct is a right arising from ownership,
which is necessarily involved in a contract of sale
2. Rights of Owner
a. Alienate
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)
b. Improvement
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)
c. Taxes
Art. 597 The taxes which, during the usufruct, may be
imposed directly on the capital, shall be at the expense of the
owner.
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)
B. The Usufructuary
1. Obligations of the Usufructuary
a. In General
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;
(2) To give security, binding himself to fulfill 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 children's 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)
b. Administration
Exercise Diligence
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. 589 The usufructuary shall take care of the things given in
usufruct as a good father of a family. (497)
Vicarious Liability
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)
Replace/Repair
Art. 591 If the usufruct be constituted on a flock or herd of
livestock, the usufructuary shall be obliged to replace with the
young thereof 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 fulfill his obligation by delivering to the
owner the remains which may have been saved from the
misfortune.
Should the herd or flock 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)
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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)
Notify Owner of Certain Acts
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)
c. Give Security
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;
(2) To give security, binding himself to fulfill 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 children's 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
certificates 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.
23

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 benefits from the
day on which, in accordance with the title constituting the
usufruct, he should have commenced to receive them.(496)
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 been able to give it, or if that given is not sufficient, 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 sufficient to preserve the integrity of the capital in
usufruct. (507)
d. Expenses
Pay Charges and Taxes
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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.
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)
Pay Debts
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. 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)
Collect Credits
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 been able to give it, or if that given is not sufficient, 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 sufficient to preserve the integrity of the capital in
usufruct. (507)
Shoulder Legal Expenses
Art. 602 The expenses, costs and liabilities in suits brought
with regard to the usufruct shall be borne by the
usufructuary. (512)
e. Return
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)
Mercado v. Rizal
- A usufructuary may not be compelled to advance amounts
that he/she is not required to pay as usufructuary
- If he does volunteer to pay, he may claim reimbursement at
the termination of the usufruct
Vda. de Albar v. Carandang
- When the usufruct was constituted over a building, it also
includes the land where it is built upon
- For loss to extinguish the usufruct, it must be a total loss.
- Hence when the building is destroyed, the usufruct is still
not extinguished as there is still the land which has
capability of producing rent
2. Rights of the Usufructuary
a. In General
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 deficient, the provisions
contained in the two following Chapters shall be
observed. (470)
b. Administration
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)
Alienate, Lease
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)
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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. 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)
Enjoy and Use
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. 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 at 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
25
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. (484a)
Art. 577 The usufructuary of woodland may enjoy all the
benefits 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.
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. 602 The expense, costs and liabilities in suits brought
with regard to the usufruct shall be borne by the usufructuary.
(512)
Pichay v. Querol
- A partition of a co-owned property, part of which is the
subject of a usufruct, affects the said usufruct in that the
fruits of such part awarded to one of the co-owners will now
pertain to the usufructuary
Reyes v. Grey
- Right of Usufruct, being an interest in real property, may be
a proper subject of execution sales

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 shall first inform the owner of the necessity for the
work. (485)
Tufexis v. Municipal Council of Guinobatan
- The concession of usufruct granted by the municipal
authorities was personal and instranmissible in nature
- Owner remains to be the State in such case, and hence, the
property may not be the subject of execution sales.

Municipality of Paoay v. Manaois

- Municipal waters are only enjoyed by municipalities/cities
Art. 578 The usufructuary of an action to recover real property by usufruct; the State remains as its owner
or a real right, or any movable property, has the right to bring - Hence, these waters are not subject to execution
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)

Make Improvements

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. (487)

Art. 580 The usufructuary may set off the improvements he

may have made on the property against any damage to the
same. (488)

Suit

Art. 578 The usufructuary of an action to recover real property

or a real right, or movable property, has the right to bring the

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26 PROPERTY EXAM # 2 REVIEWER | HERRERA-LIM, HUSMILLO
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LIMITATIONS ON PROPERTY RIGHTS City Gov’t. of Quezon City v. Ericta
- Involved expropriation of land’s USE and not its ownership
1. EMINENT DOMAIN - Taking/expropriation of the mere use of the property
without the property being transferred

Republic v. PLDT
Art. III, Sec.1, CON87 No person shall be deprived of life,
- Use is continuous
liberty, or property without due process of law, nor shall any
- How do you determine just compensation? – this is a
person be denied the equal protection of the laws.
difficulty of eminent domain
- Sir: Case shows how some property are incapable of the
Art. III, Sec. 9, CON87 Private property shall not be taken
traditional definition of expropriation
for public use without just compensation.

Art. 435 No person shall be deprived of his property except 2. POLICE POWER
by competent authority and for public use and always upon
payment of just compensation.
Art. 436 When any property is condemned or seized by
competent authority in the interest of health, safety or security,
Should this requirement be not first complied with, the courts
the owner thereof shall not be entitled to compensation,
shall protect and, in a proper case, restore the owner in his
unless he can show that such condemnation or seizure is
possession.
unjustified.

LGC, Sec 19 Eminent Domain - A local government unit may,

LGC, Sec 20 Reclassification of Lands -
through its chief executive and acting pursuant to an
ordinance, exercise the power of eminent domain for public
(a) A city or municipality may, through an ordinance passed by
use, or purpose or welfare for the benefit of the poor and the
the sanggunian after conducting public hearings for the
landless, upon payment of just compensation, pursuant to the
purpose, authorize the reclassification of agricultural lands and
provisions of the Constitution and pertinent laws: Provided,
provide for the manner of their utilization or disposition in the
however, That the power of eminent domain may not be
following cases: (1) when the land ceases to be economically
exercised unless a valid and definite offer has been previously
feasible and sound for agricultural purposes as determined by
made to the owner, and such offer was not accepted:
the Department of Agriculture or (2) where the land shall have
Provided, further, That the local government unit may
substantially greater economic value for residential,
immediately take possession of the property upon the filing of
commercial, or industrial purposes, as determined by the
the expropriation proceedings and upon making a deposit
sanggunian concerned: Provided, That such reclassification
with the proper court of at least fifteen percent (15%) of the fair
shall be limited to the following percentage of the total
market value of the property based on the current tax
agricultural land area at the time of the passage of the
declaration of the property to be expropriated: Provided,
ordinance:
finally, That, the amount to be paid for the expropriated
property shall be determined by the proper court, based on
(1) For highly urbanized and independent component
the fair market value at the time of the taking of the property.
cities, fifteen percent (15%);

- Taking will only be authorized once:
o Proceedings have been instituted
o Provisional value has been deposited with the court.
Republic v. Castellvi
- Taking of property under eminent domain requires certain
elements:
o State must enter private property
o Occupation by State must be for more than a
momentary or limited period
o Entry should be under color of legal authority
o Property must be devoted to public use
o Utilization of such property must be in such a way as to
deprive the owner of all beneficial enjoyment of the
property
(2) For component cities and first to the third class
municipalities, ten percent (10%); and
(3) For fourth to sixth class municipalities, five percent (5%):
Provided, further, That agricultural lands distributed to
agrarian reform beneficiaries pursuant to Republic Act
Numbered Sixty-six hundred fifty-seven (R.A. No. 6657).
otherwise known as "The Comprehensive Agrarian Reform
Law", shall not be affected by the said reclassification and
the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.
(b) The President may, when public interest so requires and
upon recommendation of the National Economic and
Development Authority, authorize a city or municipality to

PROPERTY'EXAM'#3'REVIEWER'|'HERRERA2LIM,'HUSMILLO' 1!
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reclassify lands in excess of the limits set in the next preceding
paragraph.
(c) The local government units shall, in conformity with existing
laws, continue to prepare their respective comprehensive land
use plans enacted through zoning ordinances which shall be
the primary and dominant bases for the future use of land
resources: Provided. That the requirements for food
production, human settlements, and industrial expansion shall
be taken into consideration in the preparation of such plans.
(d) Where approval by a national agency is required for
reclassification, such approval shall not be unreasonably
withheld. Failure to act on a proper and complete application
for reclassification within three (3) months from receipt of the
same shall be deemed as approval thereof.
(e) Nothing in this Section shall be construed as repealing,
amending, or modifying in any manner the provisions of R.A.
No. 6657.
LGC, Sec 447 Powers, Duties, Functions and Compensation
(Sangguniang Bayan) -
(a) The sangguniang bayan, as the legislative body of the
municipality, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the municipality
and its inhabitants pursuant to Section 16 of this Code and in
the proper exercise of the corporate powers of the municipality
as provided for under Section 22 of this Code, and shall:
(4) Regulate activities relative to the use of land, buildings
and structures within the municipality in order to promote
the general welfare and for said purpose shall:
(i) Declare, prevent or abate any nuisance;
(ii) Require that buildings and the premises thereof and
any land within the municipality be kept and maintained
in a sanitary condition; impose penalties for any
violation thereof, or upon failure to comply with said
requirement, have the work done and require the
owner, administrator or tenant concerned to pay the
expenses of the same; or require the filling up of any
land or premises to a grade necessary for proper
sanitation;
(iii) Regulate the disposal of clinical and other wastes
from hospitals, clinics and other similar establishments;
(iv) Regulate the establishment, operation and
maintenance of cafes, restaurants, beerhouses, hotels,
motels, inns, pension houses, lodging houses, and
other similar establishments, including tourist guides
and transports;
2' PROPERTY'EXAM'#3'REVIEWER'|'HERRERA2LIM,'HUSMILLO!
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(v) Regulate the sale, giving away or dispensing of any
intoxicating malt, vino, mixed or fermented liquors at
any retail outlet;
(vi) Regulate the establishment and provide for the
inspection of steam boilers or any heating device in
buildings and the storage of inflammable and highly
combustible materials within the municipality;
(vii) Regulate the establishment, operation, and
maintenance of entertainment or amusement facilities,
including theatrical performances, circuses, billiards
pools, public dancing schools, public dance halls, sauna
baths, massage parlors, and other places of
entertainment or amusement; regulate such other
events or activities for amusement or entertainment,
particularly those which tend to disturb the community
or annoy the inhabitants, or require the suspension or
suppression of the same; or, prohibit certain forms of
amusement or entertainment in order to protect the
social and moral welfare of the community;
(viii) Provide for the impounding of stray animals;
regulate the keeping of animals in homes or as part of a
business, and the slaughter, sale or disposition of the
same; and adopt measures to prevent and penalize
cruelty to animals; and
(ix) Regulate the establishment, operation, and
maintenance of funeral parlors and the burial or
cremation of the dead, subject to existing laws, rules
and regulations.
LGC, Sec 458 Powers, Duties, Functions and Compensation
(Sangguniang Panlungsod).
(a) The sangguniang panlungsod, as the legislative body of the
city, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the
proper exercise of the corporate powers of the city as provided
for under Section 22 of this Code, and shall:
(Note Same as Sangguniang Bayan -ed)
LGC, Sec. 468 Powers, Duties, Functions and Compensation
(Sangguniang Panlalawigan)
(a) The sangguniang panlalawigan, as the legislative body of
the province, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the province and
its inhabitants pursuant to Section 16 of this Code in the
proper exercise of the corporate powers of the province as
provided for under Section 22 of this Code, and shall:
(2) Generate and maximize the use of resources and
 revenues for the development plans, program objectives
and priorities of the province as provided for under Section
18 of this Code, with particular attention to agro-industrial
development and country-wide growth and progress and
relative thereto, shall:
(vi) Prescribe reasonable limits and restraints on the use
of property within the jurisdiction of the province;
- Condemnation – destruction of the property
- Seizure – taking or impoundment of the property
Eminent Domain Police Power
Just compensation None
Taking for public use Not only taking (seizure) but
also condemnation
For public use For public health, safety, and
security
Taxicab Operators v. Board of Transportation
- State may regulate property rights in the interest of public
health, safety and security
3. NECESSITY
Art. 432 The owner of a thing has no right to prohibit the
interference of another with the same, if the interference is
necessary to avert an imminent danger and the threatened
damage, compared to the damage arising to the owner from
the interference, is much greater. The owner may demand
from the person benefited indemnity for the damage to him.
- Imminent danger is necessary for the provision to apply
- Damage to owner must be less than the imminent
damage
4. SIC UTERE TUO AT ALIENUM NON LAEDAS
Art. 431 The owner of a thing cannot make use thereof in
such manner as to injure the rights of a third person.
- A catch-all provision when instances are not covered under
Nuisances
- Taken from Roman Law
- Cannot injure rights of third persons
5. NUISANCE
a. Definition
Art. 694 A nuisance is any act, omission, establishment,
PROPERTY'EXAM'#3'REVIEWER'|'HERRERA2LIM,'HUSMILLO' 3!
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business, condition of property, or anything else which:
(1) Injures or endangers the health or safety of others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies 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.
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.
- Definition varies as it is very subjective, except for the 4th
paragraph
- Some people are more sensitive; others manhid
b. Classification
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 definition.
- According to Nature
o Per Se – is inherently a nuisance; a nuisance under any
circumstance
o Per Accidens – its being a nuisance is only brought
about by certain circumstances; may be a nuisance to
some, given certain circumstances, but not to all
c. Remedies
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) A prosecution under the Penal Code or any local ordinance:
or
(2) A civil action; or
(3) Abatement, without judicial proceedings.
Art. 700 The district health officer 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.
Art. 702 The district health officer shall determine whether or
not abatement, without judicial proceedings, is the best
remedy against a public nuisance.
Art. 703 A private person may file 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 first 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
officer and executed with the assistance of the local police;
and
(4) That the value of the destruction does not exceed three
thousand pesos.
Art. 705 The remedies against a private nuisance are:
(1) A civil action; or
(2) 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 official 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.
Iloilo Cold Storage v. Municipal Council
- Not a nuisance since by putting a body of water, it merely
imitates nature
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Monteverde v. Generoso
- SC: Dangerous power
o JBats: Do you agree?
- SC: Waters have to be stagnant to be declared a nuisance
o JBats: What about to consider it a nuisance,
obstruction of water under Art. 613(4)
Hidalgo v. Balandan
- Should have based it on negligence
Sitchon v. Aquino
- Those houses standing on public streets may be
demolished for falling under the 4th kind of nuisance
enumerated under Art. 694
- City charters supersede the Civil Code on the matter of
who may effect the abatement of nuisances as it is a
specific law (as opposed to a general law, like the Civil
Code; only applies supplementarily)
Velasco v. Manila Electric Co.
- Sound exceeded ambient sounds
- Tried to show that it is not merely a matter of preference
! tried to be very scientific about it
- But Velasco tolerated the substation
o Did not complain
o Was present in his house
o Removing substation was NOT a solution
- SC: Construct a wall replacing the chain link fence
- “Sawali” is a better insulation of sound; it is a plant, like a
banig
Farrales v. City Mayor of Baguio
- Rice is location, location, location!
o Near where the main thoroughfare is ! people can
just get down, no need to park or navigate
o Most convenient place for locals & foreigners
- Example of an obstruction of a public passage way
- Even if she was granted a permit, she is NOT permitted to
construct along a passageway
6. EASEMENTS
a. Definition
Art. 613 An easement or servitude is an encumbrance
imposed upon an immovable for the benefit 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.
b. Characteristics
Art. 617 Easements are inseparable from the estate to which
they actively or passively belong.
Art. 618 Easements are indivisible. If the servient estate is
divided between two or more persons, the easement is not
modified, 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.
c. Classification
Art. 614 Servitudes may also be established for the benefit of
a community, or of one or more persons to whom the
encumbered estate does not belong.
Art. 615 Easements may be continuous or discontinuous,
apparent or nonapparent.
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.
Nonapparent easements are those which show no external
indication of their existence. (532)
Art. 616 Easements are also positive or negative.
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.
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.
Art. 634 Easements imposed by law have for their object
either public use or the interest of private persons.
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.
PROPERTY'EXAM'#3'REVIEWER'|'HERRERA2LIM,'HUSMILLO' 5!
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d. Rights and Obligations
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.
Art. 625 Upon the establishment of an easement, all the
rights necessary for its use are considered granted.
Art. 626 The owner of the dominant estate cannot use the
easement except for the benefit of the immovable originally
contemplated. Neither can he exercise the easement in any
other manner than that previously established.
Art. 627 The owner of the dominant estate may make, at his
own expense, on the servient state any works necessary for the
use and preservation of the servitude, but without altering it or
rendering it more burdensome.
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.
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 benefits which each may derive from the work. Any one
who does not wish to contribute may exempt himself by
renouncing the easement for the benefit 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.
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)
 renounce
Art. 630. The owner of the servient estate retains the - Restore property if
ownership of the portion on which the easement is established, burdened
and may use the same in such a manner as not to affect the
exercise of the easement. e. Creation

Art. 631 Easements are extinguished: By Title

(1) By merger in the same person of the ownership of the Art. 622 Continuous nonapparent easements, and
dominant and servient estates; discontinuous ones, whether apparent or not, may be acquired
(2) By nonuser for ten years; with respect to discontinuous only by virtue of a title.
easements, this period shall be computed from the day on
which they ceased to be used; and, with respect to continuous Art. 624 The existence of an apparent sign of easement
easements, from the day on which an act contrary to the same between two estates, established or maintained by the owner
took place; of both, shall be considered, should either of them be
(3) When either or both of the estates fall into such condition alienated, as a title in order that the easement may continue
that the easement cannot be used; but it shall revive if the actively and passively, unless, at the time the ownership of the
subsequent condition of the estates or either of them should two estates is divided, the contrary should be provided in the
again permit its use, unless when the use becomes possible, title of conveyance of either of them, or the sign aforesaid
sufficient time for prescription has elapsed, in accordance with should be removed before the execution of the deed. This
the provisions of the preceding number; provision shall also apply in case of the division of a thing
(4) By the expiration of the term or the fulfillment of the owned in common by two or more persons.
condition, if the easement is temporary or conditional;
(5) By the renunciation of the owner of the dominant estate;
By Prescription
(6) By the redemption agreed upon between the owners of the
dominant and servient estates.
Art. 620 Continuous and apparent easements are acquired
either by virtue of a title or by prescription of ten years.
Art. 632 The form or manner of using the easement may
prescribe as the easement itself, and in the same way.
Art. 621 In order to acquire by prescription the easements
referred to in the preceding article, the time of possession shall
Art. 633 If the dominant estate belongs to several persons in
be computed thus: in positive easements, from the day on
common, the use of the easement by any one of them
which the owner of the dominant estate, or the person who
prevents prescription with respect to the others.
may have made use of the easement, commenced to exercise
it upon the servient estate; and in negative easements, from
DOMINANT RIGHTS SERVIENT OBLIS
the day on which the owner of the dominant estate forbade, by
- Make works necessary for - Not to impair use of the
an instrument acknowledged before a notary public, the owner
use & preservation servitudes
of the servient estate, from executing an act which would be
- Choose time & manner - Offer equally convenient
lawful without the easement.
of work most convenient alternative with no injury
- Right to demand if caused
Art. 622 Continuous nonapparent easements, and
servient refuses to - If he uses the easement,
discontinuous ones, whether apparent or not, may be acquired
contribute contribute to expenses
only by virtue of a title.
- To prevent impairment - Respect
injunction/decision in
court
f. Extinguishment
DOMINANT OBLIS SERVIENT RIGHTS
- Cannot use it for the - Retain ownership of
Art. 631 Easements are extinguished:
benefit of immovable portion for which it is
originally contemplated established
(1) By merger in the same person of the ownership of the
- Not alter/make more - To be notified of works to
dominant and servient estates;
burdensome be done
(2) By nonuser for ten years; with respect to discontinuous
- Notify servient of work - To demand damages if it
easements, this period shall be computed from the day on
necessary has become more
which they ceased to be used; and, with respect to continuous
- Contribute to necessary burdensome
easements, from the day on which an act contrary to the same
expenses; if not,
took place;

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(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,
sufficient time for prescription has elapsed, in accordance with
the provisions of the preceding number;
(4) By the expiration of the term or the fulfillment of the
condition, if the easement is temporary or conditional;
(5) By the renunciation of the owner of the dominant estate;
(6) By the redemption agreed upon between the owners of the
dominant and servient estates.
Cid v. Javier
- If easement is negative, prescription shall only start to
count once there is a formal act from the DE owner that
forbids SE owner from doing anything which he would be
allowed to do if not for that easement
- Ruled here that since there was no formal act yet,
prescription has not yet run
Francisco v. Paez
- Extinguishment of a servitude by non-user requires that
property has already been used; one cannot discontinue
using what has not yet been used
- Easement in this not having been used yet, it has not been
extinguished by non-user
g. Legal Easements
g.1. In Favor of Adjacent Properties
- Right of Way – most common easement granted; grants
enclosed property an easement to have access to a public
highway
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.
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This easement is not compulsory if the isolation of the
immovable is due to the proprietor's own acts.
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.
Art. 651 The width of the easement of right of way shall be
that which is sufficient 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 co-owner, he shall be obliged to grant a right of
way without indemnity.
In case of a simple donation, the donor shall be indemnified by
the donee for the establishment of the right of way.
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 a 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.
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.
Art. 656 If it be indispensable for the construction, repair,
improvement, alteration or beautification 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.
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 Section and those of Articles 640 and 641
shall be observed. In this case the width shall not exceed 10
meters.
Archbishop of Manila v. Roxas
- Out of convenience
- No easement
- Right of way is apparent & discontinuous
Cuaycong v. Benedicto
- Mere permissive use of the right of way will not ripen into
prescription
Valderrama v. North Negros
- Neither the nature nor the use changed the nature of the
railway
- Increase in the cargo is the same
- Volume of traffic has no bearing on the servitude
North Negros v. Hidalgo
- Voluntary easements for the community
- Tuba saloon
- Party Wall – applicable when there is a shared wall by two
buildings; its purpose is to protect the structural integrity of
both buildings sharing the wall by prohibiting actions
against the party wall that will undermine the other building
- and the maintenance of fences, live hedges, ditches, and
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 conflict with the same, and by the rules
of co-ownership.
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:
(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.
Art. 660 It is understood that there is an exterior sign,
contrary to the easement of party wall:
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(1) Whenever in the dividing wall of buildings there is a window
or opening;
(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, floors 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.
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
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.
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.
Art. 664 Every owner may increase the height of the party
wall, doing 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.
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.
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
- Light and View – may be applicable in real estate; however,
this is difficult to establish
Art. 667 No part-owner may, without the consent of
the others, open through the party wall any window or
aperture of any kind.
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 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 joints 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.
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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 centimeters.
The nonobservance of these distances does not give rise to
prescription.
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 view from the
dividing line between the two properties.
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.
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.
- Intermediate Distances
Art. 677 No constructions can be built or plantings made near
fortified places or fortresses without compliance with the
conditions required in special laws, ordinances, and
regulations relating thereto.
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.
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 fifty 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.
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 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.
Art. 681 Fruits naturally falling upon adjacent land belong to
the owner of said land.
- Lateral Support and Subjacent Support – may be invoked
when neighboring tenement engages in excavations which
will undermine lateral and subjacent support
o Sir: Example is lot in Ortigas-EDSA area. However, this
is rarely invoked.
-
Sec. 684 No proprietor shall make such excavations upon his
land as to deprive any adjacent land or building of sufficient
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.
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.
g.2. Pertaining to Waters
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Natural Drainage
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.
WC, Art. 50 Lower estates are obliged to receive the waters
which naturally and without the intervention of man flow from
the higher estate, as well as the stone or earth which they carry
with them.
The owner of the lower estate can not construct works which
will impede this natural flow, unless he provides an alternative
method of drainage; neither can the owner of the higher estate
make works which will increase this natural flow.
Riparian Banks
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, floatage, fishing and salvage.
Estates adjoining the banks of navigable or floatable rivers are,
furthermore, subject to the easement of towpath for the
exclusive service of river navigation and floatage.
If it be necessary for such purpose to occupy lands of private
ownership, the proper indemnity shall first be paid.
WC, 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, floatage, fishing and salvage.
No person shall be allowed to stay in this zone longer than
what is necessary for recreation, navigation, floatage, fishing or
salvage or to build structures of any kind.
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.

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.
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.
Dam
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.
WC, Art. 38 Authority for the construction of dams, bridges
and other structures across of which may interfere with the flow
of navigable or flotable waterways shall first be secured from
the Department of Public Works, Transportation and
Communications.
WC, 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 specifications therefor,
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.
Drawing Water
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.
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
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place where such easements are to be used, and the indemnity
shall include this service.
Mining Code, Sec. 73 Water Rights - A contractor shall
have water rights for mining operations upon approval of
application with the appropriate government agency in
accordance with existing water laws, rules and regulations
promulgated thereunder: Provided, That water rights already
granted or vested through long use, recognized and
acknowledged by local customs, laws, and decisions of courts
shall not thereby be impaired: Provided, further, That the
Government reserves the right to regulate water rights and the
reasonable and equitable distribution of water supply so as to
prevent the monopoly of the use thereof.
Aqueduct
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 flow 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 filter or descend.
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
sufficient 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.
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.
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.
Art. 646 For legal purposes, the easement of aqueduct shall
be considered as continuous and apparent, even though the
flow 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.
WC, 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.
WC, Art. 25 A holder of water permit may demand the
establishment of easements necessary for the construction and
maintenance of the works and facilities needed for the
beneficial 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, mortgagee 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.
Easements relating to the appropriation and use of waters may
be modified by agreement of the contracting parties provided
the same is not contrary to law or prejudicial to third persons.
WC, Art. 46 When artificial means are employed to drain
water from higher to lower land, the owner of the higher land
shall select the routes and methods of drainage that will cause
the minimum damage to the lower lands, subject to the
requirements of just compensation.
WC, Art. 47 When the use, conveyance or storage of waters
results in damage to another, the person responsible for the
damage shall pay compensation.
WC, 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, flumes and other
structures necessary for maintaining access, irrigation, or
drainage, in addition to paying compensation for land and
incidental damages.
WC, Art. 67 Any watershed or any area of land adjacent to
any surface water or overlying any ground water may declared
by the Department of Natural Resources as protected area
Rules and regulations may be promulgated by such
Department 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.
Sluice Gate
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.
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g.3. Easement Against Nuisance (See Nuisance -ed)
g.4. Special Easements
Mining Code, Sec. 75 Easement Rights - When mining
areas are so situated that for purposes of more convenient
mining operations it is necessary to build, construct or install
on the mining areas or lands owned, occupied or leased by
other persons, such infrastructure as roads, railroads, mills,
waste dump sites, tailings ponds, warehouses, staging or
storage areas and port facilities, tramways, runways, airports,
electric transmission, telephone or telegraph lines, dams and
their normal flood and catchment areas, sites for water wells,
ditches, canals, new river beds, pipelines, flumes, cuts, shafts,
tunnels, or mills, the contractor, upon payment of just
compensation, shall be entitled to enter and occupy said
mining areas or lands.
7. WATERS
- PD 1067 (Water Code) – subject matter of the law is fresh
waters (since they are the readily usable waters); focuses on
classification of waters and imposes limitations on their use
o Sir: Another example of an ignored law.
- Water Right – a permit/certification required by PD 1067
that allows use of water resources
o Issued by the Water Resources Council of the DENR
(national level) and its counterpart in the
cities/municipalities (local level).
- Types of Waters
o Subterranean – underground water
o Atmospheric – rainwater yet to come down
o Surface – bodies of water found aboveground
Tanedo v. Bernad
- Cardenas mortgaged house to Sims
- Right of first refusal to Tañedo
Ayala de Roxas v. City of Manila
- City of Manila wants to keep it as a road
Lunod v. Meneses
- Dma that Meneses built impeded on easement that was
enjoyed by the higher estate owned by Lunod et al
- Cannot impede easement which was a statutory
easement
Salazar v. Gutierrez
- Case shows that distance is not only consideration in
creation of easement of waters but what is most
convenient and least onerous

Relova v. Lavarez
- While owner is allowed to construct defensive works on his
property, he is not allowed to stop the flow of water
altogether, to the detriment of dominant estate owners
8. CONTRACTUAL LIMITATIONS
CREATION, TRANSMISSION AND
TERMINATION OF PROPERTY RIGHTS
A. MODES IN GENERAL
Art. 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 estate and intestate
succession, and in consequence of certain contracts, by
tradition.
They may also be acquired by means of prescription.
1. VOLUNTARY MODES
a. Occupation
Art. 713 Things appropriable by nature which are without an
owner, such as animals that are the object of hunting and
fishing, hidden treasure and abandoned movables, are
acquired by occupation.
- A thing appropriable by nature and without an owner may
be acquired by exercise of actual possession over it.
- Essentially a form of possession
- Sir: Real right of possession is superior to occupation
Cariño v. Insular Government
- Case upheld that there were properties exempt from the
jura regalia doctrine
Gold Creek Mining v. Rodriguez
- Decided in the Post-American period
- Ruled that a mining claim is almost similar to ownership
with respect to the rights that can be exercised over lands
covered by the claim
- Parity rights ! interest in preserving the right
Atok Big Wedge Mining v. IAC
- Differed because of the time, law and policy concerning
natural resources at the time compared to
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- Now, there are no longer American companies
NPC v. Ibrahim
- Use of land beneath the soil can be enjoyed as much as
the owner benefits from it
b. Tradition/Delivery
Art. 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 estate and intestate
succession, and in consequence of certain contracts, by
tradition.
They may also be acquired by means of prescription.
Art. 1495 The vendor is bound to transfer the ownership of
and deliver, as well as warrant the thing which is the object of
the sale.
Art. 1496 The ownership of the thing sold is acquired by the
vendee from the moment it is delivered to him in any of the
ways specified in Articles 1497 to 1501, or in any other manner
signifying an agreement that the possession is transferred from
the vendor to the vendee.
Art. 1498 When the sale is made through a public instrument,
the execution thereof shall be equivalent to the delivery of the
thing which is the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred.
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.
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.
Art. 1500 There may also be tradition constitutum
possessorium.
Art. 1501 With respect to incorporeal property, the provisions
of the first paragraph of article 1498 shall govern. In any other
case wherein said provisions are not applicable, the placing of
the titles of ownership in the possession of the vendee or the
use by the vendee of his rights, with the vendor's consent, shall
be understood as a delivery.
Art. 1502 When goods are delivered to the buyer "on sale or
return" to give the buyer an option to return the goods instead
of paying the price, the ownership passes to the buyer of
delivery, but he may revest the ownership in the seller by
returning or tendering the goods within the time fixed in the
contract, or, if no time has been fixed, within a reasonable
time.
When goods are delivered to the buyer on approval or on trial
or on satisfaction, or other similar terms, the ownership therein
passes to the buyer:
(1) When he signifies his approval or acceptance to the seller or
does any other act adopting the transaction;
(2) If he does not signify his approval or acceptance to the
seller, but retains the goods without giving notice of rejection,
then if a time has been fixed for the return of the goods, on the
expiration of such time, and, if no time has been fixed, on the
expiration of a reasonable time. What is a reasonable time is a
question of fact.
Art. 1503 When there is a contract of sale of specific goods,
the seller may, by the terms of the contract, reserve the right of
possession or ownership in the goods until certain conditions
have been fulfilled. The right of possession or ownership may
be thus reserved notwithstanding the delivery of the goods to
the buyer or to a carrier or other bailee for the purpose of
transmission to the buyer.
Where goods are shipped, and by the bill of lading the goods
are deliverable to the seller or his agent, or to the order of the
seller or of his agent, the seller thereby reserves the ownership
in the goods. But, if except for the form of the bill of lading,
the ownership would have passed to the buyer on shipment of
the goods, the seller's property in the goods shall be deemed
to be only for the purpose of securing performance by the
buyer of his obligations under the contract.
Where goods are shipped, and by the bill of lading the goods
are deliverable to order of the buyer or of his agent, but
possession of the bill of lading is retained by the seller or his
agent, the seller thereby reserves a right to the possession of
the goods as against the buyer.
Where the seller of goods draws on the buyer for the price and
transmits the bill of exchange and bill of lading together to the
buyer to secure acceptance or payment of the bill of exchange,
the buyer is bound to return the bill of lading if he does not
honor the bill of exchange, and if he wrongfully retains the bill
of lading he acquires no added right thereby. If, however, the
bill of lading provides that the goods are deliverable to the
buyer or to the order of the buyer, or is indorsed in blank, or to
the buyer by the consignee named therein, one who purchases
in good faith, for value, the bill of lading, or goods from the
buyer will obtain the ownership in the goods, although the bill
of exchange has not been honored, provided that such
purchaser has received delivery of the bill of lading indorsed
by the consignee named therein, or of the goods, without
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notice of the facts making the transfer wrongful.
Art. 1504 Unless otherwise agreed, the goods remain at the
seller's risk until the ownership therein is transferred to the
buyer, but when the ownership therein is transferred to the
buyer the goods are at the buyer's risk whether actual delivery
has been made or not, except that:
(1) Where delivery of the goods has been made to the buyer or
to a bailee for the buyer, in pursuance of the contract and the
ownership in the goods has been retained by the seller merely
to secure performance by the buyer of his obligations under
the contract, the goods are at the buyer's risk from the time of
such delivery;
(2) Where actual delivery has been delayed through the fault of
either the buyer or seller the goods are at the risk of the party
in fault.
Art. 1505 Subject to the provisions of this Title, where goods
are sold by a person who is not the owner thereof, and who
does not sell them under authority or with the consent of the
owner, the buyer acquires no better title to the goods than the
seller had, unless the owner of the goods is by his conduct
precluded from denying the seller's authority to sell.
Nothing in this Title, however, shall affect:
(1) The provisions of any factors' act, recording laws, or any
other provision of law enabling the apparent owner of goods
to dispose of them as if he were the true owner thereof;
(2) The validity of any contract of sale under statutory power of
sale or under the order of a court of competent jurisdiction;
(3) Purchases made in a merchant's store, or in fairs, or
markets, in accordance with the Code of Commerce and
special laws.
- Tradition is the transfer of possession of property
- Kinds of Tradition
o Quasi-Tradition – involves a transfer of rights; it is an
“imaginary transfer” of rights wherein the owner
recognizes that such rights have already been
transferred to the new owner
o Traditio Longa Manu – literally ‘long arm’; applies when
actual delivery is not possible (ex. delivery of land sold)
o Traditio Brevi Manu – literally ‘short arm’; applies when
the person already had the property in his possession
but not as an owner (possession becomes ownership)
o Traditio Symbolica – transfer by the use of symbols;
context is important (ex. keys given for car)
o Constitutum Possessorium – contemplates possession
by an owner whose rights to the property becomes
anything less than ownership

San Lorenzo v. CA
- Sale is only a title; it is tradition/delivery that is the mode
that transfers ownership
Equatorial Realty v. Mayfair
- Constructive delivery is only valid if circumstances would
allow for actual delivery to occur; that is, there is no
impediment
Union Motor v. CA
- Intent to transfer ownership is material in delivery; without
it, delivery does not serve to transfer ownership
c. Donation
c.1. Definition
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.
Art. 726 When a person gives to another a thing or right on
account of the latter's 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.
- According to our laws, a mode of acquiring and disposing
property
- An act of liberality
- As a Contract
o Consent – when donor gives and done accepts, there is
meeting of the minds
o Cause – the liberality or beneficence of the donor
o Object – the property being donated
- Requisites
o Capacity of the Donor
o Intent to Donate on the part of the Donor
o Delivery
o Acceptance by the Donee
" Except in donations mortis causa; acceptance is not
required
OBJECT
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, sufficient 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 the
donor. Without such reservation, the donation shall be
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reduced in 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.
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 inofficious in all that it may exceed this
limitation.
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.
- Object of Donation
o All present property, subject to the limitation of
legitimes for forced heirs
" Present Property – capable of disposition at the time
that the donation was made
o Future Property – not yet subject to disposition;
CANNOT be donated
EFFECTS
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, sufficient 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 the
donor. Without such reservation, the donation shall be
reduced in petition of any person affected.
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.
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 inofficious in all that it may exceed this
limitation.
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.
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.
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.
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.
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.
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 declaration 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 the debts exceeding the value of the property
donated, unless a contrary intention clearly appears.
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 sufficient
property to pay his debts prior to the donation.
Osorio v. Osorio
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- Inheritance is no longer considered future property if the
decedent has already passed away (sorry for stating the
obvious haha –ed)
Central Philippine University v. CA
- Conditions that require first the validity of the donation
before they can be complied are resolutory in nature.
De Luna v. Abrigo
- Since onerous donations follow contracts, the right to
rescind is implied and stipulations for automatic reversion
are valid.
Vda. de Tupas v. RTC
- Steps in Determining whether Donation is Inofficious:
1. Assets – Liabilities = Net Estate
2. Net Estate + Value of Properties Subject to Collation
= Hereditary Estate
3. Hereditary Estate – Amount of Legitimes = Freely
Disposable Estate (FDE)
4. Compare Value of Donation (VD) to FDE:
" VD > FDE = Inofficious
" VD < FDE = Valid
De Roma v. CA
- To be exempt from collation, the prohibition should be
express
c.2. Classification
ONEROUS
Art. 726 When a person gives to another a thing or right on
account of the latter's 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.
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.
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 declaration 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 the debts exceeding the value of the property
donated, unless a contrary intention clearly appears.
SIMPLE
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.
Art. 726 When a person gives to another a thing or right on
account of the latter's 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.
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.
MODAL
Art. 726 When a person gives to another a thing or right on
account of the latter's 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.
CONDITIONAL
Art. 727 Illegal or impossible conditions in simple and
remuneratory donations shall be considered as not imposed.
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.
Mortis Causa
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.
- Similar to succession
- Similar controversies as succession
Propter Nuptias
FC, Art. 82 Donations by reason of marriage are those which
are made before its celebration, in consideration of the same,
and in favor of one or both of the future spouses.
FC, Art. 83 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 modified by the following articles.
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FC, 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-fifth
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.
FC, Art. 85 Donations by reason of marriage of property
subject to encumbrances shall be valid. In case of foreclosure
of the encumbrance and the property is sold for less than the
total amount of the obligation secured, the donee shall not be
liable for the deficiency. If the property is sold for more than
the total amount of said obligation, the donee shall be entitled
to the excess.
FC, Art. 86 A donation by reason of marriage may be
revoked by the donor in the following cases:
(1) If the marriage is not celebrated or judicially declared void
ab initio except donations made in the marriage settlements,
which shall be governed by Article 81;
(2) When the marriage takes place without the consent of the
parents or guardian, as required by law;
(3) When the marriage is annulled, and the donee acted in bad
faith;
(4) Upon legal separation, the donee being the guilty spouse;
(5) If it is with a resolutory condition and the condition is
complied with;
(6) When the donee has committed an act of ingratitude as
specified by the provisions of the Civil Code on donations in
general.
- Made in consideration of marriage
Inter Vivos
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 donor's 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.
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.
 Inter Vivos Mortis Causa may become donees but acceptance shall be done through
Irrevocable, with respect to Revocable at will their parents or legal representatives.
donor’s will
Art. 742 Donations made to conceived and unborn children
(Note: But subject to may be accepted by those persons who would legally
revocation, reduction on represent them if they were already born.
reversion on proper grounds)
Must comply with requisites Must comply with requisites Art. 743 Donations made to incapacitated persons shall be
of a valid donation of a valid wil void, though simulated under the guise of another contract or
Acquisition of right occurs Acquisition of right occurs through a person who is interposed.
during lifetime of donor upon death of the donor
Cause is the Cause is the death of the Art. 744 Donations of the same thing to two or more different
liberality/beneficence of the donor donees shall be governed by the provisions concerning the
donor sale of the same thing to two or more different persons.
Death may just be a period Death is the suspensive
before delivery occurs condition Art. 753 When a donation is made to several persons jointly,
it is understood to be in equal shares, and there shall be no
c.3. Formalities right of accretion among them, unless the donor has otherwise
provided.
a) Donor’s qualifications
The preceding paragraph shall not be applicable to donations
Art. 735 All persons who may contract and dispose of their made to the husband and wife jointly, between whom there
property may make a donation. (624) shall be a right of accretion, if the contrary has not been
provided by the donor.
Art. 736 Guardians and trustees cannot donate the property
entrusted to them. (n) Art. 1027 The following are incapable of succeeding:

Art. 737 The donor's capacity shall be determined as of the
time of the making of the donation.
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 officer or his wife, descedants and
ascendants, by reason of his office.
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.
b) Donee’s qualifications
(1) The priest who heard the confession of the testator 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;
(3) A guardian with respect to testamentary dispositions given
by a ward in his favor before the final accounts of the
guardianship have been approved, even if the testator should
die after the approval thereof; nevertheless, any provision
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 attesting witness to the execution of a will, the spouse,
parents, or children, or any one claiming under such witness,
spouse, parents, or children;

Art. 738 All those who are not specially disqualified by law (5) Any physician, surgeon, nurse, health officer or druggist
therefor may accept donations. who took care of the testator during his last illness;

(6) Individuals, associations and corporations not permitted by

Art. 740 Incapacity to succeed by will shall be applicable to
law to inherit.
donations inter vivos.

Art. 741 Minors and others who cannot enter into a contract FC, Art. 87 Every donation or grant of gratuitous advantage,

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direct or indirect, between the spouses during the marriage Lagazo v. CA
shall be void, except moderate gifts which the spouses may - Failure to accept donation means there is no perfection
give each other on the occasion of any family rejoicing. The
prohibition shall also apply to persons living together as Genato v. De Lorenzo
husband and wife without a valid marriage. - Indorsement = the act of transferring stocks from one
shareholder to anothr
c) How made
Araneta v. Perez
- No redeeming value in maintaining the street
Art. 748 The donation of a movable may be made orally or in
- It is for the benefit of the Republic of the Philippines
writing.
- Benefit to the beneficiaries:
o Value of property increased actually
An oral donation requires the simultaneous delivery of the
thing or of the document representing the right donated. - Spirit of the law is for the benefit of the beneficiaries ! so
SC let him make the donation
If the value of the personal property donated exceeds five
c.4. Revocation
thousand pesos, the donation and the acceptance shall be
made in writing, otherwise, the donation shall be void.
Revocation Reversion Reduction
Art. 749 In order that the donation of an immovable may be Due to ingratitude Due to stipulated Due to
valid, it must be made in a public document, specifying therein conditions inofficiousness
the property donated and the value of the charges which the Property donated May return not Amount of
donee must satisfy. returns to donor or only to donor but donation which
his estate may also revert to exceeds the freely
The acceptance may be made in the same deed of donation or third persons disposable amount
in a separate public document, but it shall not take effect named by donor in is returned to the
unless it is done during the lifetime of the donor. the deed; may be estate
done for any
If the acceptance is made in a separate instrument, the donor reason or grounds
shall be notified thereof in an authentic form, and this step as long as not
shall be noted in both instruments. contrary to law,
morals, good
customs & public
Movables:
policy
- Oral or in writing
- ORAL: movable, but value below P5000
- WRITTEN: value above P5000 d. Intellectual Creation
- P5000 is now small ! approx.. P100,000 now (this is
because the Civil Code is an old law) (See discussion on Intellectual Property in Reviewer #
1)
d) How accepted
e. Testamentary Succession
Art. 734 The donation is perfected from the moment the
donor knows of the acceptance by the donee. Art. 779 Testamentary succession is that which results from
the designation of an heir, made in a will executed in the form
prescribed by law.
Art. 745 The donee must accept the donation personally, or
through an authorized person with a special power for the
- Applies when decedent leaves behind a will, which may be
purpose, or with a general and sufficient power; otherwise, the
written or holographic
donation shall be void

Art. 746 Acceptance must be made during the lifetime of the
donor and of the donee.
Art. 747 Persons who accept donations in representation of
others who may not do so by themselves, shall be obliged to
make the notification and notation of which Article 749 speaks.
f. Sales
Art. 1458 By the contract of sale one of the contracting
parties obligates himself to transfer the ownership and to
deliver a determinate thing, and the other to pay therefor a
price certain in money or its equivalent.

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A contract of sale may be absolute or conditional.
g. Abandonment
Art. 713 Things appropriable by nature which are without an
owner, such as animals that are the object of hunting and
fishing, hidden treasure and abandoned movables, are
acquired by occupation.
Art. 1112 Persons with capacity to alienate property may
renounce prescription already obtained, but not the right to
prescribe in the future.
Prescription is deemed to have been tacitly renounced when
the renunciation results from acts which imply the
abandonment of the right acquired.
- Escheat – appropriation of property, which has no owner or
whose owner has passed away and has no heirs, by the
State
- Res Nullius – abandoned property; may only be considered
properly abandoned when spes recuperandi (hope of
recovery) has been lost and the animus revertendi
(intention to return) has been given up.
2. INVOLUNTARY MODES
- Parties involved don’t have to do anything
a. Prescription and Laches
Art. 1106 By prescription, one acquires ownership and other
real rights through the lapse of time in the manner and under
the conditions laid down by law.
In the same way, rights and conditions are lost by prescription.
(1930a)
Art. 1107 Persons who are capable of acquiring property or
rights by the other legal modes may acquire the same by
means of prescription.
Minors and other incapacitated persons may acquire property
or rights by prescription, either personally or through their
parents, guardians or legal representatives.
a.1. Acquisitive
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.
Art. 719 Whoever finds a movable, which is not treasure, must
return it to its previous possessor. If the latter is unknown, the
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finder shall immediately deposit it with the mayor of the city or
municipality where the finding has taken place.
The finding 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 finder. The finder and the owner shall be
obliged, as the case may be, to reimburse the expenses.
(See Arts 1106-1138)
Art. 1505 Subject to the provisions of this Title, where goods
are sold by a person who is not the owner thereof, and who
does not sell them under authority or with the consent of the
owner, the buyer acquires no better title to the goods than the
seller had, unless the owner of the goods is by his conduct
precluded from denying the seller's authority to sell.
Nothing in this Title, however, shall affect:
(1) The provisions of any factors' act, recording laws, or any
other provision of law enabling the apparent owner of goods
to dispose of them as if he were the true owner thereof;
(2) The validity of any contract of sale under statutory power of
sale or under the order of a court of competent jurisdiction;
(3) Purchases made in a merchant's store, or in fairs, or
markets, in accordance with the Code of Commerce and
special laws.
a.2. Extinctive
(See 1139-1155)
b. Intestate Succession
Art. 774 Succession is a mode of acquisition by virtue of which
the property, rights and obligations to the extent of the value
of the inheritance, of a person are transmitted through his
death to another or others either by his will or by operation of
law.
Art. 775 In this Title, "decedent" is the general term applied
to the person whose property is transmitted through
succession, whether or not he left a will. If he left a will, he is
also called the testator.
Art. 776 The inheritance includes all the property, rights and
obligations of a person which are not extinguished by his
death.
Art. 777 The rights to the succession are transmitted from the
moment of the death of the decedent.
Art. 960 Legal or intestate succession takes place:
(1) If a person dies without a will, or with a void will, or one
which has subsequently lost its validity;
(2) When the will does not institute an heir to, or dispose of all
the property belonging to the testator. In such case, legal
succession shall take place only with respect to the property of
which the testator has not disposed;
(3) If the suspensive condition attached to the institution of heir
does not happen or is not fulfilled, or if the heir dies before the
testator, or repudiates the inheritance, there being no
substitution, and no right of accretion takes place;
(4) When the heir instituted is incapable of succeeding, except
in cases provided in this Code.
Art. 961 In default of testamentary heirs, the law vests the
inheritance, in accordance with the rules hereinafter set forth,
in the legitimate and illegitimate relatives of the deceased, in
the surviving spouse, and in the State.
- Refers to inheritance
- Applies when the decedent dies without a will
- Involuntary because the heirs need not do anything
c. Forced Sales
- The property is taken away by the court and sold to
someone else; involuntary on the part of the original owner
- Sir: The courts cannot retain the property
d. Accession
(See section on accession on Reviewer # 2)
e. Marriage
Art. 74 The property relationship between husband and wife
shall be governed in the following order:
(1) By marriage settlements executed before the marriage;
(2) By the provisions of this Code; and
(3) By the local custom.
Art. 88 The absolute community of property between spouses
shall commence at the precise moment that the marriage is
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celebrated. Any stipulation, express or implied, for the
commencement of the community regime at any other time
shall be void.
Art. 89 No waiver of rights, shares and effects of the absolute
community of property during the marriage can be made
except in case of judicial separation of property.
When the waiver takes place upon a judicial separation of
property, or after the marriage has been dissolved or annulled,
the same shall appear in a public instrument and shall be
recorded as provided in Article 77. The creditors of the spouse
who made such waiver may petition the court to rescind the
waiver to the extent of the amount sufficient to cover the
amount of their credits.
Art. 90 The provisions on co-ownership shall apply to the
absolute community of property between the spouses in all
matters not provided for in this Chapter.
SPECIAL APPLICATIONS
1. POSSESSION
a. Acquisition
Occupation
Succession
Exceptions
b. Termination
Ramos v. Director of Lands
- The landmark case for constructive possession
- Portion possessed must be proportional to the land one is
claiming to possess constructively; in this case, the
proportion of ¼ was established
- Sir: “SIZE MATTERS”
Vaño v. Government
- Added a requirement to the Ramos doctrine in that a valid
claim to the property is required to be able to possess it
constructively
Lasam v. Director of Lands
- Reiterates previous cases by stressing that proportionality
is important
- Property cannot be gained through possession with a
nominal claim and it should not be mere fiction
People v. Estoista
- Intent to possess (animus possidendi) is an important
element of possession
2. CO-OWNERSHIP

a. Acquisition

1) Marriage

2) Cohabitation

3) Joint Purchase

4) Succession

5) Donation

6) Chance

7) Hidden Treasure

8) Easement of Party Wall

9) Contract

10) Occupation

11) Condominium

b. Termination

1) Partition

2) Effect of partition

3) Right against individual co-owners

4) Disagreement between co-owners

3. USUFRUCT

a. Acquisition

b. Termination

Lopez v. Constantino
- Usufuct is not extinguished when there is partial loss

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