G.R. No. 152809 August 3, 2006 MERCEDES MORALIDAD, Petitioner,vs.SPS. DIOSDADO PERNES and ARLENE PERNES, Respondents.

Facts:In her younger days, petitioner taught in Davao City, Quezon City and Manila. While teaching in Manila, she had the good fortune of furthering her studies at the University of Pennsylvania, U.S.A. While schooling, she was offered to teach at the Philadelphia Catholic Archdiocese, which she did for seven (7) years. Thereafter, she worked at the Mental Health Department of said University for the next seventeen (17) years.During those years, she would come home to the Philippines to spend her two-month summer vacation in her hometown in Davao City. Being single, she would usually stay in Mandug, Davao City, in the house of her niece, respondent Arlene Pernes, a daughter of her younger sister, Rosario.Back in the U.S.A. sometime in 1986, she received news from Arlene that Mandug at the outskirts of Davao City was infested by NPA rebels and many women and children were victims of crossfire between government troops and the insurgents. Shocked and saddened about this development, she immediately sent money to Araceli, Arlenes older sister, with instructions to look for a lot in Davao City where Arlene and her family could transfer and settle down. This was why she bought the parcel of land covered by TCT No. T-123125.Petitioner acquired the lot property initially for the purpose of letting Arlene move from Mandug to Davao City proper but later she wanted the property to be also available to any of her kins wishing to live and settle in Davao City. Petitioner made known this intention in a document she executed on July 21, 1986. Issue:I. WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISMISSING THE UNLAWFUL DETAINER CASE FOR BEING PREMATURE WHICH DECISION IS NOT IN ACCORDANCE WITH LAW AND JURISPRUDENCE. II. WHETHER OR NOT THE COURT OF APPEALS ERRED IN APPLYING ARTICLES 448 AND 546 AND THE PROVISIONS OF THE CODE ON USUFRUCT INSTEAD OF ARTICLE 1678 OF THE CIVIL CODE. Ruling:The Court rules for the petitioner.Usufruct, in essence, is nothing else but simply allowing one to enjoy anothers property. 9 It is also defined as the right to enjoy the property of another temporarily, including both the jus utendi and the jus fruendi, 10 with the owner retaining the jus disponendi or the power to alienate the same. It is undisputed that petitioner, in a document dated July 21, 1986, supra, made known her intention to give respondents and her other kins the right to use and to enjoy the fruits of her property. There can also be no quibbling about the respondents being given the right "to build their own house" on the property and to stay thereat "as long as they like." Paragraph #5 of the same document earmarks "proceeds or income derived from the aforementioned properties" for the petitioners "nearest kins who have less in life in greater percentage and lesser percentage to those who are better of (sic) in standing." The established facts undoubtedly gave respondents not only the right to use the property but also granted them, among the petitioners other kins, the right to enjoy the fruits thereof. We have no quarrel, therefore, with the CAs ruling that usufruct was constituted between petitioner and respondents. It is thus pointless to discuss why there was no lease contract between the parties.There are other modes or instances whereby the usufruct shall be considered terminated or extinguished. For sure, the CivilCode enumerates such other modes of extinguishment: ART. 603. Usufruct is extinguished: (1) By the death of the usufructuary, unless a contrary intention clearly appears;(2) By expiration of the period for which it was constituted, or by the fulfillment of any resolutory condition provided in the title creating the usufruct;(3) By merger of the usufruct and ownership in the same person;(4) By renunciation of the usufructuary;(5) By the total loss of the thing in usufruct;(6) By the termination of the right of the person constituting the usufruct;(7) By prescription. (Emphasis supplied.) The document executed by the petitioner dated July 21, 1986 constitutes the title creating, and sets forth the conditions of, the usufruct. Paragraph #3 thereof states "[T]hat anyone of my kins may enjoy the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not inimical to the purpose thereof" (Emphasis supplied). What may be inimical to the purpose constituting the usufruct may be gleaned from the preceding paragraph wherein petitioner made it abundantly clear "that anybody of my kins who wishes to stay on the aforementioned property should maintain an atmosphere of cooperation, live in harmony and must avoid bickering with one another." That the maintenance of a peaceful and harmonious relations between and among kin constitutes an indispensable condition for the continuance of the usufruct is clearly deduced from the

succeeding Paragraph #4 where petitioner stated "[T]hat anyone of my kins who cannot conform with the wishes of the undersigned may exercise the freedom to look for his own." In fine, the occurrence of any of the following: the loss of the atmosphere of cooperation, the bickering or the cessation of harmonious relationship between/among kin constitutes a resolutory condition which, by express wish of the petitioner, extinguishes the usufruct. From the pleadings submitted by the parties, it is indubitable that there were indeed facts and circumstances whereby the subject usufruct may be deemed terminated or extinguished by the occurrence of the resolutory conditions provided for in the title creating the usufruct, namely, the document adverted to which the petitioner executed on July 21, 1986. Thus, the Court rules that the continuing animosity between the petitioner and the Pernes family and the violence and humiliation she was made to endure, despite her advanced age and frail condition, are enough factual bases to consider the usufruct as having been terminated.By express provision of law, respondents, as usufructuary, do not have the right to reimbursement for the improvements they may have introduced on the property. We quote Articles 579 and 580 of the Civil Code:Art. 579. The usufructuary may make on the property held in usufruct such useful improvements or expenses for mere pleasure as he may deem proper, provided he does not alter its form or substance; but he shall have no right to be indemnified therefor. He may, however, remove such improvements, should it be possible to do so without damage to the property. (Emphasis supplied.)Art. 580. The usufructuary may set off the improvements he may have made on the property against any damage to the same.Given the foregoing perspective, respondents will have to be ordered to vacate the premises without any right of reimbursement. If the rule on reimbursement or indemnity were otherwise, then the usufructuary might, as an author pointed out, improve the owner out of his property. 15 The respondents may, however, remove or destroy the improvements they may have introduced thereon without damaging the petitioners property. G.R. No. L-2659 October 12, 1950

In the matter of the testate estate of Emil Maurice Bachrach, deceased. MARY McDONALD BACHRACH,petitioner-appellee, vs. SOPHIE SEIFERT and ELISA ELIANOFF, oppositors-appellants. Is a stock dividend fruit or income, which belongs to the usufructuary, or is it capital or part of the corpus of the estate, which pertains to the remainderman? That is the question raised in the appeal. The deceased E. M. Bachrach, who left no forced heir except his widow Mary McDonald Bachrach, in his last will and testament made various legacies in cash and willed the remainder of his estate as follows: Sixth: It is my will and do herewith bequeath and devise to my beloved wife Mary McDonald Bachrach for life all the fruits and usufruct of the remainder of all my estate after payment of the legacies, bequests, and gifts provided for above; and she may enjoy said usufruct and use or spend such fruits as she may in any manner wish. The will further provided that upon the death of Mary McDonald Bachrach, one-half of the all his estate "shall be divided share and share alike by and between my legal heirs, to the exclusion of my brothers." The estate of E. M. Bachrach, as owner of 108,000 shares of stock of the Atok-Big Wedge Mining Co., Inc., received from the latter 54,000 shares representing 50 per cent stock dividend on the said 108,000 shares. On June 10, 1948, Mary McDonald Bachrach, as usufructuary or life tenant of the estate, petitioned the lower court to authorize the Peoples Bank and Trust Company as administrator of the estate of E. M. Bachrach, to her the said 54,000 share of stock dividend by endorsing and delivering to her the corresponding certificate of stock, claiming that said dividend, although paid out in the form of stock, is fruit or income and therefore belonged to her as usufructuary or life tenant. Sophie Siefert and Elisa Elianoff, legal heirs of the deceased, opposed said petition on the ground that the stock dividend in question was not income but formed part of the capital and therefore belonged not to the usufructuary but to the remainderman. And they have appealed from the order granting the petition and overruling their objection. While appellants admits that a cash dividend is an income, they contend that a stock dividend is not, but merely represents an addition to the invested capital. The so-called Massachusetts rule, which prevails in certain jurisdictions in the United States, supports appellants' contention . It regards cash dividends, however large, as income, and stock dividends, however made, as capital. (Minot vs. Paine, 99 Mass., 101; 96 Am. Dec., 705.) It holds that a stock dividend

is not in any true sense any true sense any dividend at all since it involves no division or severance from the corporate assets of the dividend; that it does not distribute property but simply dilutes the shares as they existed before; and that it takes nothing from the property of the corporation, and nothing to the interests of the shareholders. On the other hand, so called Pennsylvania rule, which prevails in various other jurisdictions in the United States, supports appellee's contention. This rule declares that all earnings of the corporation made prior to the death of the testator stockholder belong to the corpus of the estate, and that all earnings, when declared as dividends in whatever form, made during the lifetime of the usufructuary or life tenant. (Earp's Appeal, 28 Pa., 368.) . . . It is clear that testator intent the remaindermen should have only the corpus of the estate he left in trust, and that all dividends should go the life tenants. It is true that profits realized are not dividends until declared by the proper officials of the corporation, but distribution of profits, however made, in dividends, and the form of the distribution is immaterial. (In re Thompson's Estate, 262 Pa., 278; 105 Atl. 273, 274.) In Hite vs. Hite (93 Ky., 257; 20 S. W., 778, 780), the Court of Appeals of Kentucky, speaking thru its Chief Justice, said: . . . Where a dividend, although declared in stock, is based upon the earnings of the company, it is in reality, whether called by one name or another, the income of the capital invested in it. It is but a mode of distributing the profit. If it be not income, what is it? If it is, then it is rightfully and equitably the property of the life tenant. If it be really profit, then he should have it, whether paid in stock or money. A stock dividend proper is the issue of new shares paid for by the transfer of a sum equal to their par value from the profits and loss account to that representing capital stock; and really a corporation has no right to a dividend, either in cash or stock, except from its earnings; and a singular state of case it seems to us, an unreasonable one is presented if the company, although it rests with it whether it will declare a dividend, can bind the courts as to the proper ownership of it, and by the mode of payment substitute its will for that of that of the testator, and favor the life tenants or the remainder-men, as it may desire. It cannot, in reason, be considered that the testator contemplated such a result. The law regards substance, and not form, and such a rule might result not only in a violation of the testator's intention, but it would give the power to the corporation to beggar the life tenants, who, in this case, are the wife and children of the testator, for the benefit of the remainder-men, who may perhaps be unknown to the testator, being unborn when the will was executed. We are unwilling to adopt a rule which to us seems so arbitrary, and devoid of reason and justice. If the dividend be in fact a profit, although declared in stock, it should be held to be income. It has been so held in Pennsylvania and many other states, and we think it the correct rule. Earp's Appeal, 28 Pa. St. 368; Cook, Stocks & S. sec. 554. . . . We think the Pennsylvania rule is more in accord with our statutory laws than the Massachusetts rule. Under section 16 of our Corporation Law, no corporation may make or declare any dividend except from the surplus profits arising from its business. Any dividend, therefore, whether cash or stock, represents surplus profits. Article 471 of the Civil Code provides that the usufructuary shall be entitled to receive all the natural, industrial, and civil fruits of the property in usufruct. And articles 474 and 475 provide as follows: ART. 474. Civil fruits are deemed to accrue day by day, and belong to the usufructuary in proportion to the time the usufruct may last. ART. 475. When a usufruct is created on the right to receive an income or periodical revenue, either in money or fruits, or the interest on bonds or securities payable to bearer, each matured payment shall be considered as the proceeds or fruits such right. When it consists of the enjoyment of the benefits arising from an interest in an industrial or commercial enterprise, the profits of which are not distributed at fixed periods, such profits shall have the same consideration.lawphil.net In either case they shall be distributed as civil fruits, and shall be applied in accordance with the rules prescribed by the next preceding article.

The 108,000 shares of stock are part of the property in usufruct. The 54,000 shares of stock dividend are civil fruits of the original investment. They represent profits, and the delivery of the certificate of stock covering said dividend is equivalent to the payment of said profits. Said shares may be sold independently of the original shares, just as the offspring of a domestic animal may be sold independently of its mother. The order appealed from, being in accordance with the abovequoted provisions of the Civil Code, his hereby affirmed, with costs against the appellants. There are two (2) petitions for review before us: (1) G.R. No. 51333 which asks for review of the decision of the then Court of First Instance CFI of Negros Occidental, Branch 3, in Civil Case No. 13823; and (2) G.R. No. 52289 which seeks review of the decision of the then Court of Agrarian Relations ("CAR"), 11th Judicial District, in CAR Case No. 76. Both the CFI of Negros Occidental and the CAR dismissed petitioners' complaint for lack of jurisdiction. The Supreme Court, in a Resolution dated 16 June 1982, consolidated G.R. Nos. 51333 and 52289. In a Resolution 1 dated 18 May 1989, the Court partly resolved the consolidated petitions by declaring that the appropriate Regional Trial Court had jurisdiction over the two (2) cases. The facts relevant for resolution of the remaining substantive aspects of the CFI case and the CAR case, may be summarized from the Court's Resolution of 18 May 1989 Petitioner Ramona R. Locsin, Teresita Guanzon, Celia R. Sibug, Maria Rosa R. Perez, Editha Ylanan and Ana Marie R. Benedicto were coowners of a large tract of agricultural land known as "Hacienda Villa Regalado" located in Barrio Panubigan Canlaon City, Negros Occidental. The tract of land was covered by Transfer Certificate of Title No. T-494 and there more particularly described in the following terms: TRANSFER CERTIFICATE OF TITLE NO. T-494 A parcel of land . . . containing an area of THREE MILLION THIRTY-THREE THOUSAND AND FORTY-EIGHT (3,033,048) square meters, more or less. (Rollo, of G.R. No. 52289, p. 31.) A portion of this land, known as Lot No. 2-C-A-3 and consisting of an area of 60.07464 hectares, was subject to the lifetime usufructuary rights of respondent Helen Schon. The bulk of this lot was cultivated by the following lessees-tenants who customarily delivered the rentals to Helen Schon: (Rollo, of G.R. No. 51333, p. 4.) On 22 October 1972, after the onset of the martial law administration of former President Marcos, Presidential Decree No. 27 was promulgated, decreeing the "Emancipation of Tenants." The tract of land owned in common by petitioners, including the portion thereof subject to Helen Schon's usufructuary rights, fell within the scope of the "Operation Land Transfer". In consequence, staff members of the Department of Agrarian Relations advised the tenants-tillers of said land, and the necessary parcellary map sketch was made and submitted to the Bureau of Land Office in Dumaguete City. (Rollo, of G.R. No. 51333, Annex "A" of Petition, pp. 19-20) Petitioners through counsel sought the opinion of the DAR as to who (petitioners or respondent Helen Schon) should be entitled to receive the rental payments which continued to be made by the respondent tenants to Helen Schon. The DAR District Officer rendered an opinion on 13 May 1977 that the rental payments as of October 1972 were properly considered as amortization payments for the land and as such should pertain to the landowners and not to the usufructuary. (Id., p. 5) 1. Civil Case No. 13828, Court of First Instance, Negros Occidental.

On 22 May 1978, petitioners filed against spouses Joseph and Helen Schon Civil Case No. 13828 . . ., for collection of rentals plus damages with prayer for preliminary injunction. There petitioners claimed that since the land subject to Helen Schon's usufructuary rights was among the parcels of land which collectively had been declared by the DAR as a land reform area pursuant to Presidential Decree No. 27, the rental payments which the respondent spouses had been collecting from the tenants really pertained and should be delivered to the petitioners, beginning from 21 October 1972, as constituting or forming part of the amortization payments for the land to be made by the tenants. Petitioners sought in that case to recover from the Schons all such rentals or the money value thereof, and prayed for injunction to prevent respondents from collecting any further rental payments from the tenants of the land involved. Upon the other hand, in the Answer filed on 12 July 1978, the respondents Schon contended that . . ., upon the assumption arguendo that the Court of First Instance did have jurisdiction, Article 609 of the Civil Code must in any case be applied by that court in resolving the case. 2. CAR Case No. 76, Court of agrarian Relations Approximately five (5) months after filing their complaint before the Negros Occidental Court of First Instance, petitioners filed a second complaint on 13 October 1978, this time with the Court of Agrarian Relations, 11th Judicial District, San Carlos City. In this complaint before the Agrarian Court, petitioners impleaded as corespondents of the spouses Schon the tenants who were cultivating the land burdened with the usufruct of Helen Schon. Petitioners prayed that the respondent tenants be required to pay to petitioners (rather than to the spouses Schon) all future rentals beginning with the crop year of 1978 and every year thereafter, until full payment of the amortization payment computed by the DAR. In their Answer, the respondents Schon once again asserted lack of jurisdiction over the subject matter of the case, this time on the part of the Court of Agrarian Relations. . . . The respondent tenants, for their part, agreed with the Schons that there was no tenancy relationship existing in respect of the land cultivated by them, since such land had already been brought within the ambit of "Operation Land Transfer", and prayed that the petitioners and the usufructuary be required to litigate among themselves their respective rights before the proper court. 2 As noted earlier, the Agrarian Court rendered a decision dismissing petitioners' complaint in CAR Case No. 76, declaring itself as bereft of jurisdiction to decide that case. On appeal by petitioners, the Court of Appeals ruled that since the only issue presented in the appeal was whether or not the CAR had subject matter jurisdiction over the case, the appeal raised "a pure question of law" and certified the case to this Court for disposition. On 16 March 1979, the CFI of Negros Occidental dismissed petitioners' complaint upon the ground that jurisdiction to hear and decide that case was vested in the CAR. This order was brought directly to this Court by petitioners. In our Resolution dated 18 May 1989, the Court, after declaring that jurisdiction over the two (2) cases was lodged in the appropriate Regional Trial Court by virtue of the provisions of Section 19 (7) of Batas Pambansa Blg. 129, required the petitioners and private respondents in G.R. Nos. 51333 and 52289 to file simultaneous memoranda on the remaining non-jurisdiction issues. At the same time, the Court directed the Solicitor General to file a motion for intervention on behalf of the Government and to submit a memorandum on the same issues. Both parties and the Solicitor-General complied. The substantive issues to be resolved here are the following: (1) As between the naked owners and the usufructuary, who should be entitled to the amounts paid by the tenants beginning 21 October 1972? and (2) What is the legal character of the payments made by the tenants beginning 21 October 1972 payments on the price of the land itself or civil fruits of the land?

The two (2) above issues are obviously interrelated and the Court will discuss them together. Petitioners insist that the payments made by private respondent tenants to private respondent Helen Schon beginning on 21 October 1972 should be considered as amortization payments for the price of the land and as such should belong to the landowners and not to the usufructuary. Upon the other hand, private respondent Helen Schon urges that those amounts should pertain to her considering that her rights as usufructuary persist during her lifetime and have not been extinguished by operation of the Land Reform Law. the further argues that assuming her usufructuary rights had been extinguished, the provisions of Article 609 of the Civil Code should be applied, and that thereunder she would be entitled either to replacement of the land burdened with her usufruct (the fruits of which would then be payable to her) or payment of legal interest on the amount of the purchase price of the land. Presidential Decree No. 27, issued on 21 October 1972, declared the "emancipation of tenants" tilling agricultural lands primarily devoted to rice and corn. It stated that: NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution as Commander-in-Chief of the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1 dated September 22, 1972 as amended do hereby decree and order the emancipation of all tenant farmers as of this day, October 21, 1972; This shall apply to tenant farmers of private agricultural lands primarily devoted to rice and corn under a system of sharecrop or leasetenancy, whether classified as landed estate or not; The tenant-farmer, whether in land classified, as landed estate or not, shall be deemed owner of a portion constituting a family size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated; In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now cultivate it; For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value of the land shall be equivalent to two and one-half (2 1/2) times the average harvest of three normal crop years immediately preceding the promulgation of this Decree; The total cost of the land, including interest at the rate of six (6) percentum per annum, shall be paid by the tenant in fifteen (15) years [in] fifteen equal annual amortizations; Presidential Decree No. 57, dated 19 November 1972, amended Presidential Decree No. 27 and prescribed in part as follows: P.D. No. 57.SECTION 1. To further accelerate the attainment of objectives set forth in Presidential Decree No. 27, the following provisions are hereby corporated, to wit: 1. Landowner shall be exempt from the capital gains tax on the proceeds of the amortization paid him by the tenant-purchaser and likewise from income tax due on the accruing interests paid as an addition to the total cost of the land. It is also important to adduce Department Circular No. 8, dated 1 April 1975, issued by the Department of Agrarian Reform pursuant to Presidential Decree No. 27 and which constitutes contemporaneous administrative construction of Presidential Decrees Nos. 27 and 57. Department Circular No. 8 stated that: 3. Tenant-farmers are deemed owners of the land they till as of October 21, 1972, subject to the rules and regulations to be hereafter promulgated. On lands already covered by Operation Land Transfer,the leasehold system shall be provisionally maintained and the lease rentals paid by the tenant-farmers to the landowner [shall] be credited as amortization payments . Payment of rentals shall be stopped when the Land Bank shall have paid the cost

of land. On lands not yet covered by Operation Land Transfer, leasehold shall continue to govern the relationship between the landowner and his tenant-tillers. (Emphasis supplied) Finally, after the effective date of the 1987 Constitution, Executive Order No. 228 dated 17 July 1987 was promulgated and provided in part as follows: SECTION 1. All qualified farmer beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by virtue of Presidential Decree No. 27 (hereinafter referred to as P.D. No. 27). SECTION 2. Henceforth, the valuation of rice and corn lands covered by P.D. No. 27 shall be based on the average gross production determined by the Barangay Committee on Land Production in accordance with Department Memorandum Circular No. 26, series of 1973, and related issuances and regulations of the Department of Agrarian Reform. The average gross production per hectare shall be multiplied by two and a half (2.5), the product of which shall be multiplied by Thirty Five Pesos (P35.00), the government support price for one cavan of 50 Kilos of palay on October 21, 1972, or Thirty One Pesos (P31.00), the government support price for one cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall be the value of the rice and corn land, as the case may be, for the purpose of determining its cost to the farmer and compensation to the landowner, pursuant to Department of Agrarian Reform Memorandum Circular No. 26, series of 1973, and other pertinent issuances. In the event a party questions in court the resolution of the dispute, the landowner's compensation claim shall still be processed for payment and the proceeds shall be held in trust by the Trust Department of the Land Bank in accordance with the provisions of Section 5 hereof, pending the resolution of the dispute before the court. (Emphasis supplied) Reading the foregoing provisions together, we observe that under Presidential Decree No. 2, the basic statute, the tenant-farmer became owner of a family-size farm of five (5) hectares or, if the land was irrigated, three (3) hectares, and that the tenant-owner had to pay for the cost of the land within fifteen (15) years by paying fifteen (15) equal annual amortization payments. Thus, it appears clear that ownership over lands (like Lot No. 2-C-A-3) subjected to Operation Land Transfer moved from the registered owner (the old landowner) to the tenants (the new landowners). The fifteen (15) annual amortizations to be paid by the tenants-owners were intended to replace the landholdings which the old landowners gave up in favor of the new landowners, the tenants-owners. 3 It follows that in respect of land subjected to Operation Land Transfer, the tenants-farmers became owners of the land they tilled as of the effective date of Presidential Decree No . 27, i.e., 21 October 1972. Pending full payment of the cost of the land to the old landowner by the Land Bank of the Philippines, the leasehold system was "provisionally maintained" but the "lease rentals" paid by the tenants-farmers prior to such full payment by the Land Bank to the old landowner, would be credited no longer as rentals but rather as "amortization payments" of the price of the land, the un-amortized portion being payable by the Land Bank. In respect of lands brought within the coverage of Operation Land Transfer, the leasehold system was legally and effectively terminated immediately on 21 October 1972 (notwithstanding the curious statement in Department Circular No. 8 that it was "provisionally maintained"). It was in respect of lands not yet subjected to the terms and effects of Operation Land Transfer that the leasehold system did continue to govern the relationship between the "landowner and his tenant-tillers". The exemption of the old landowner from the capital gains tax on the amortization payments made to him by the tenants-purchasers, under Presidential Decree No. 57 (supra), underscores the fact, referred to above, that ownership or dominion over the land moved immediately from landowner to tenantfarmer, rather than upon completion of payment of the price of the land. In general, capital gains are realized only when the owner disposes of his property. We believe and so hold that Lot No. 2-C-A-3 having been declared part of the land reform area and subjected to Operation Land Transfer, the payments made on and after 21 October 1972 by the private respondent tenants-farmers constituted amortization payments on the cost of the land that they were required to pay under Presidential Decree No. 27. These payments, therefore, legally pertain to petitioners, the former landowners as part of the compensation for the dominion over land of which they were deprived by operation of Presidential Decree No. 27. Those payments can not be characterized as rentals like those which had been paid to Helen Schon as usufructuary prior to the promulgation of Presidential Decree No. 27 and prior to the effectivity of Operation Land Transfer.

We turn to the question of what rights, if any, were retained by Helen Schon as a usufructuary, after the effectivity of Presidential Decree No. 27. We believe that the usufruct which had therefore existed as a jus in re aliena in favor of Helen Schon was effectively extinguished by Presidential Decree No. 27. To hold, as private respondent Helen Schon apparently urges, that her usufruct was not extinguished but rather remained impressed upon the land passing on to the new owners, would obviously defeat the very purpose of the land reform statute. Presidential Decree No. 27 was enacted to "emancipate" the tenants from the "bondage of the soil" by giving to tenants-farmers ownership of the land which they were cultivating upon the assumption that they would work harder to improve their lot in life if they became landowners rather than mere tillers of somebody else's land. To hold Helen Schon as entitled to continue enjoying, as usufructuary, the natural or civil fruits of Lot No. 2-C-A-3, would be to set at naught the major purpose projected by Presidential Decree No. 27 and maintained by Executive Order No. 228. This is not to say that respondent Helen Schon lost any and all rights upon the promulgation of Presidential Decree No. 27. In a legal, technical sense, it may be difficult to hold that Presidential Decree No. 27 resulted in the lands brought within the scope of Operation Land Transfer being "expropriated for public use", as this term is used in Article 609 of the Civil Code, which reads thus: Art. 609. Should the thing in usufruct be expropriated for public use, the owner shall be obliged either to replace it with another thing of the same value and of similar conditions, or to pay the usufructuary the legal interest on the amount of the indemnity for the whole period of the usufruct. If the owner chooses the latter alternative, he shall give security for the payment of the interest. For it was not the Government or any of its agencies which took over ownership of the land nor was such land devoted subsequently to "public use", since ownership was transferred directly from former landowner to the tenant-tiller as new landowner, for the use and benefit exclusively of the new landowner. While, however, Article 609 of the Civil Code may not be strictly applicable, we believe that the situation contemplated in Article 609 is sufficiently close to that which resulted from application of Presidential Decree No. 27 to the land here involved. Bearing in mind that refusal to decide an otherwise unavoidable issue upon the ground of non liquet ("it is not clear") is not a permissible response by a court where there is no provision of law clearly and specifically applicable to the facts at hand, 4 we believe that Article 609 should be applied to the present set of facts by analogy. It follows that respondent Helen Schon, so long as her rights as usufructuary persist under the instrument which gave birth to such rights, would be entitled to a replacement reasonably equivalent to the land previously burdened with her usufructuary right, or to legal interest on the amount of the indemnity or cost of the land paid by private respondent tenants-farmers and the Land Bank. While the option or choice belongs to petitioners, considering that Helen Schon had already received part of the purchase price of the land previously owned by petitioners from private respondent tenants-farmers, and in the interest of expeditious justice, we consider it the second alternative that should be given effect. Thus, from the monies that she actually received from private respondent tenants-farmers on and after 21 October 1972, respondent Helen Schon is entitled to retain an amount equivalent to the legal interest on said amounts for every year that the usufruct would by its own terms have continued to exist had it not been extinguished by operation of Presidential Decree No. 27; the balance of such amounts received by her shall be turned over to petitioners. She is also entitled to the same right in respect of the balance of the price of the land petitioners presumably received from the Land Bank. WHEREFORE, for all the foregoing, private respondent spouses Joseph and Helen Schon are hereby DIRECTED to deliver to petitioners the amounts paid to them by private respondent tenantsfarmers beginning on 21 October 1972, after deducting therefrom an amount equivalent to simple legal interest thereon computed at six (6%) percent per annum on the amount received each year. No pronouncement as to costs.