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Property Notes A.Y.


Atty. Lopez-Rosario Lectures

Movable (Personal Property) - which can be transferred from one place to another Immovable (Real Property) - which cannot be transferred from place to place without destruction to itself *ART. 415 - enumeration of immovable properties.
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

Property Thing
Property - any physical or real, juridical, and legal entity of being capable of becoming the subject matter or objective terminus of a juridical relation (Sanchez Roman) Object for a validity of a contract. Can be appropriated Thing - any object that exists and is capable of satisfying human needs. -includes both objects that are already possessed or owned and those that are susceptible of appropriation REQUISITES OF PROPERTY (U-S-A) 1. Utility 2. Substantivity - has a separate or autonomous existence 3. Appropriability *not all kinds of things are property, all kinds of property are things Examples: 1. Kidney of a human being, thing or property?!? We must determine first W/N it can be sold. If it is a property, no problem because it can be appropriated. If it is a thing, the validity of the sale can be attacked because the object of the sale is outside the commerce of men. * outside the commerce of man , illegal * health and sanitation purpose *can only be donated to Filipinos 2. Corpse (usually found in med school) - thing, not susceptible of appropriation - in reality there might be illegal transactions, legally speaking it is not subject to sale (connect to OBLICON, elements of a valid contract: consent, object- within commerce of man, cause)

Movable Immovable

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

Property Notes A.Y. 2011-2012

Juridical Classification of Real Properties (N-I-D-A) 1. by Nature - by itself cannot be moved from one place to another *if you are reading the book of Justice Paras, you may cite par.1 and par.8 of Art. 415, but according to Mam LR, land is the only real property by nature. Literal meaning of nature *Buildings - incorporated to the soil, by its nature it is a personal property, but the moment the removal of the building causes injury to the soil, it will be a real property by incorporation 2. by Incorporation - must be substantial and not provisional. - separation from the immovable may cause damage or deterioration. *trees and plants are real property by incorporation. 3. by Destination - should be placed by the owner 4. by Analogy - contracts for public works and servitudes and other real rights over immovable property. *explanation* By nature - no problem, very easy, only needs common sense By Analogy - no problem also By Incorporation - REMEMBER: 1. W/N it will cause damage when removed? 2. Is the person who introduced it important? - NO! What is important is the moment it is detached, it will cause damage or injury. Examples: a. fertilizer - already applied to the soil, difficult to remove it without damage or injury to the soil, hence it is a real property by incorporation. If still in bags, personal property! b. plants - still in plastic bag = personal property, if it is planted, you cannot remove it without causing damage to soil, regardless of who planted the damned plant! c. tiles - it depends, real by incorporation those fixed in the bathroom or flooring, if still in

Atty. Lopez-Rosario Lectures

hardware or those removed by Mayor Lim in Avenida = personal property. d. in a contract of lease - as a G.R., properties placed by the tenant/lessee are personal property, XPN if the tenant is the agent of the owner. If informal settler (squatter for the politically incorrect), does not have the authority. Properties will never be personal, it will remain real properties. By Destination - 2 KINDS: 1. machineries/ equipments important who placed the property, if it is necessary

Example: a. chair in classroom - Is it the owner who placed it there? How relevant is a chair to the industry (education)? Have you been to a classroom without a chair? b. trash can - Can we still conduct classes eve if we do not have trash can? c. Vendo Machine - Is it relevant to our education? 2. ornaments - the person who introduced it is important, must be the owner. The intention to attach the property permanently is also important. Example: a. Statue of St. Raymond and Mother Perpetual - Is it important? OPKORS! It is an ornament, UST is a catholic school, intention of attaching it permanently without being transferred. Elements of Real Property by Destination 1. owner introduced it 2. necessary to the trade or industry, or even if not necessary there is the intention of attaching the property permanently

Property Notes A.Y. 2011-2012

Ladera vs. Hodges (buildings are immovable) buildings and constructions are regarded as mere accesories to the land (following the Roman maxim omne quod solo inaedificatur solo credit) it is logical that said accessories should partake of the nature of the principal thing, which is the land forming, as they do, but a single object (res) with it in contemplation of law. - Justice JBL Reyes Manalang vs. Ofilada a building of mixed materials may be the subject of a chattel mortgage, in which case it is considered as between the parties as personal property The SC hols that the mere fact that a house was the subject of a chattel mortgage and was considered as personal property by the parties does not make said house personal property for purposes of the notice to be given for its sale at public auction. The house of mixed materials levied upon on execution, although subject of a contract of chattel mortgage between the owner and a third person, is real property within the purview of Rule 39, section 16, of the Rules of Court as it has become a permanent fixture on the land, which is real property. Valdez vs. Altagracia machinery placed on property by a tenant does not become immobilized; when, however, a tenant places it there pursuant to contract that it shall belong to the owner, it becomes immobilized as to that tenant and his assigns with notice, although it does not become so as to creditors not having legal notice of the lease Davao Saw Mills vs. Castillo It is machinery which is involved; moreover, machinery not intended by the owner of any building or land for use in connection therewith, but intended by a lessee for use in a building erected on the land by the latter to be returned to the lessee on the expiration or abandonment of the lease. it was held that machinery which is movable in its nature only becomes

Atty. Lopez-Rosario Lectures

immobilized when placed in a plant by the owner of the property or plant, but not when so placed by a tenant, a usufructuary, or any person having only a temporary right, unless such person acted as the agent of the owner. McMicking vs. Banco Espanol A ship is a personal property. It was the subject of a CHATTEL mortgage in this case Manese vs. Velasco Foreshore Lands - strip of land that lies between the high and low water marks and is alternatively wet and dry according to the flow of the tides. It is that part of the land adjacent to the sea, which is alternately covered and left dry by the ordinary flow of tides. It is part of the alienable land of the public domain and may be disposed of only by lease and not otherwise. Foreshore land remains part of the public domain and is outside the commerce of man. It is not capable of private appropriation In all actions for the reversion to the Government of lands of the public domain or improvements thereon, the Republic of the Philippines is the real party in interest. The action shall be instituted by the Solicitor General or the officer acting in his stead, in behalf of the Republic of the Philippines. Moreover, such action does not prescribe. Prescription and laches will not bar actions filed by the State to recover its property acquired through fraud by private individuals. Laurel vs. Abrogar in making the international phone calls, the human voice is converted into electrical impulses or electric current which are transmitted to the party called. A telephone call, therefore, is electrical energy. It was also held in the assailed Decision that intangible property such as electrical energy is capable of appropriation because it may be taken and carried away. Electricity is personal property under Article 416 (3) of the Civil Code, which enumerates forces of nature which are brought under control by science.

Property Notes A.Y. 2011-2012 Movables = Personal Property

* If the property is not enumerated under Art. 415, it is personal property 1. BY NATURE Art. 416. The following things are deemed to be personal property: (1) Those movables susceptible of appropriation which are not included in the preceding article; (2) Real property which by any special provision of law is considered as personal property; (3) Forces of nature which are brought under control by science; and (4) In general, all things which can be transported from place to place without impairment of the real property to which they are fixed.

Atty. Lopez-Rosario Lectures

CASES Bicerra vs. Teneza A demolished or dismantled house ceases to be real property, it becomes a personal property. Mindanao Bus. Co. Vs. City Assessor The SC held in this case that for tax purposes especially real estate tax, property which are only INCIDENTAL to the business that are in the building need not be included in the tax assessment. (told you!!!) These personal properties which are NOT necessary to the course of the business, meaning they can still conduct the business without them, should be considered as immobilized by destination. Involuntary insolvency of Strochecker vs. Ramirez A persons !/2 interest in a business is personal property. They may be the subject of a mortgage, capable of appropriation and most of all, it is not included in the enumeration. Sibal vs. Valdez For purposes of attachment, execution and the Chattel Mortgage Law, growing crops or ungathered products or fruits have the nature of personal property.

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.

Fungible Consummable
Q: Why do we need to classify property as real or personal? Why is it important? A: Because different provisions of law deals with different kinds of property. You dont believe me? Here are some examples: a) Credit Transactions If you want to obtain loan and you give your house to creditor as collateral, that is a REAL ESTATE mortgage. If you give your car as collateral, that is CHATTEL mortgage. b) Criminal Law The RPC defines theft as the unlawful taking of personal property with intent to gain. If its real property, it can be unlawful detainer or usurpation. (still not convinced?!? Eto pa isa) c) Taxation Tax on your land is REAL ESTATE tax, AMILYAR.
Art. 418. Movable property is either consumable or nonconsumable. To the first class belong those movables which cannot be used in a manner appropriate to their nature without their being consumed; to the second class belong all the others.

Consummable - cannot be used in a manner appropriate to their nature without being consumed. Mam LR: What do you mean without being consumed? In Philosophy, it is a number one rule that you do not use the rootword in the definition. Clearly, our legislators are not philosophers (very bright talaga si Mam! So in light of this BS definition given by the law, she formulated a formula (haha!) to determine consummability.)

Property Notes A.Y. 2011-2012

Atty. Lopez-Rosario Lectures

*title - notice to the whole world, protects the rd owner of the property, binds 3 persons, ownership must be respected 2. Public Properties *public dominion - inalienable, owned by the government, regalia doctrine, outside the commerce of men. *patrimonial porperties - owned by the state in its private capacity, proprietary, may be alienated

In order to determine consummability: 1. Is there a reduction or decrease in the the quantity? - if you borrow the sign pen of your classmate because you are very burara you dont even have a pen, look at the ink, there is a decrease in the quantity! Unjust enrichment took place! Pay your classmate because you used the ink! UNJUST ENRICHMNET! 2. Is there a physical destruction of the property? - Example talaga ni Mam yun kandila at posporo, but I have another example YOSI! 3. Is there deterioration of the thing? - If you are washing your clothes, look at the water, not as clear as before? Well, that is the deterioration we are talking about. You cannot use the same water to drink or to take a bath unless you have a non-functioning mind

Property for Public Use Property for Public Service

Distinction: PUBLIC USE - used indiscriminately by anyone, regardless of age, sex or race because even foreigners may use them. EXAMPLES: Luneta Park Streets Bridges Roads PUBLIC SERVICE - intended for authorized persons only. EXAMPLES Libingan ng mga Bayani PGH Camp Crame

Fungible- property that can be replaced by another property of the same kind or quality. replaceable by equal quantity either by agreement or by nature Q: What kind of contract will require fungible goods? A: Contract of Loan! In credit transactions (mutuum), obligation of the debtor to return the value of the money he borrowed, but not the same money. Q. What kind of goods in a commodatum? A. Non-consumable. In a commodatum, the bailor delivers to the bailee the exact thing that the bailee left in his possession.

CASES Harty vs. Mun. of Victoria Plaza of the Church is property of public Dominion, therefore it cannot be alienated, sold, in short, it is outside the commerce of men. Ocsio vs. CA The Supreme Court held that Patrimonial Property may be acquired through prescription. A religious corporation is a juridical person, it can also acquire property Heirs of Sps. Palanca vs. Republic The subject parcel of land in this case is forest land, being a property of public dominion cannot be owned by private individuals.

Property of Public Dominion Patrimonial Property

Property Based on Ownership: 1. Private Ownership - owned by private persons, whether juridical or natural. Can be acquired by acquisitive prescription. *registered land - not subject to prescription.

Property Notes A.Y. 2011-2012

Province of Camarines Sur vs. CA As regards properties for public use, the principle is the same: property for public use can be used by everybody, even by strangers or aliens, in accordance with its nature; but nobody can exercise over it the rights of a private owner.

Atty. Lopez-Rosario Lectures

*Bad Faith: - characterized by malice, dishonesty and unlawful intent Builder in Bad Faith - a person who constructs improvements upon a parcel of land which he believes as not his or that he is aware that there exists in his title or mode of acquisition a flaw which invalidates it or that knowing that he is not the owner of said land he undertook construction thereon without the knowledge and consent of the owner thereof.

CLASSIFICATION OF THINGS *RES - latin word for property Res Nullius- belongs to no one, not yet appropriated but susceptible to appropriation. - Look in the Botanical Garden of UST, you will see butterflies, salagubang, spiders etc If you want to get these poor insects and then a Dominican Father will reprimand you, Tell him Father, these are res nullius, nobody owns them. Res Communesbelonging everyone air, sun moon to

CASES Premier Bank vs. CA A purchaser of a property cannot be in good faith where the title thereof shows that it was reconstituted Banks, being in the business of extending loans secured by real estate mortgage, is familiar with rules on land registration , and as such, it is expected to exercise more care and prudence than private individuals in their dealing with registered land that Premiere Bank accepted in mortgage the property in question notwithstanding the existence of structures on the property and which were in actual, visible and public possession of a person other that the mortgagor, constitutes gross negligence amounting to bad faith. Cua vs. Vargas

Res Derelicta - abandoned property with the intention of no longer owning them garbage Res Alicujus - tangible or intangible things which are owned privately, either in a collective or individual capacity, belonging to someone Builder/Possessor in Good Faith Builder/Possessor in Bad Faith *Good Faith: In the Family Code - Authority of Solemnizing Officer must be mistake in fact not mistake in law. In Property - the belief that the person from whom he received the thing was its owner and could transfer valid title thereto. Builder in Good Faith - builder is considered in good faith if he thought that the land was his. Builder is also considered in good faith if he constructed on the land of another with the consent of that landowner.

Petitioner derived his title from the Extra-Judicial Settlement Among Heirs and he was very much aware that not all of the heirs participated therein as it was evident on the face of the document itself. Because the property had not yet been partitioned in accordance with the Rules of Court, no particular portion of the property could have been identified as yet and delineated as the object of the sale. This is because alienation made by respondents coheirs was limited to the portion which may be allotted to them in the division, upon termination of the co-ownership. Despite this glaring fact, and over the protests orf respondents, petitioner still constructed improvements on the property. For this reason, his claim of good faith lacks credence.

Property Notes A.Y. 2011-2012 Real Right Personal Right

Real Right - one that confers upon its holder an autonomous power to derive directly from an appropriate thing certain economic advantages, independently of whoever should be the possessor of the thing. Personal Right - power belonging in one person in demand of another as a definite passive subject the fulfillment of a prestation to give, to do or not to do. Q: When you say that a Real Right is enforceable against the whole world, does it mean that you have to file an action against everybody? Why enforceable against the whole world? A: No. A real right is the right of pursuit, it follows you wherever you go, because regardless of who is the owner, the right must be respected. Q: Does it follow that when we say real right it pertains to real property and if it is a personal right it pertains to personal property? A: NO! ABSOLUTELY WRONG! Q: What is Succession? A: it is a mode of acquiring ownership over property, rights and obligations. Q: If a Creditor dies, may the heirs collect from the debtor? A: Yes, rights are transmissible. Q. Give an example of a real right in connection with succession. A. Right of ownership. Q. Is the right to collect rentals a real right? Why? A: Because the rentals emanates from the property. Q. If for example a certain person was given a scholarship by the university and was given a grant (money), then afterwards this person dies, can the university get back the grant? Is the right to the scholarship grant transmissible to the heirs? A. YES! The university can get back the grant. The grant given is a PERSONAL RIGHT. The heirs do not acquire any right over the scholarship money. It is personal to the deceased.

Atty. Lopez-Rosario Lectures

REMEMBER: Real Right = Action in REM it is attached to the property whoever the owner may be. The court will proceed to try the case even without defendant. E.G. In judicial foreclosure, the court will continue the proceedings even without the presence of the owner. You do not need the owner to foreclose the property. Personal Right = Action in PERSONAM The right is attached to the person. If person dies, no more right. It ceases upon the death of the person The court will not acquire jurisdiction unless the person submits himself before it. GEN. RULE. Right to Lease & Right to Usufruct are REAL RIGHTS. XPN: it may be stipulated in the contract that when the lessee or the usufruactuary dies before the end of the lease or usufruct period, the owner of the property may pre-terminate the contract, hence the heirs of the lessee or usufruactury must evacuate the property.

Necessary Expenses Useful Expenses Ornamental/Luxury Expenses

Necessary Expenses - refer to those expenses which without it the thing will physically deteriorate or perish. REMEMBER: In all contracts the owner has the obligation to shoulder the NECESSARY expense because he is the one who will benefit from it. Even though a temporary holder of the property will provide this without the owners consent, still need to reimburse. Examples: 1. services to clean the air-con 2. for wooden floors - solignum, floorwax 3. bread and canned goods - preservatives

Useful Expenses - refer to those which increase the productivity or raise the value of the thing. REMEMBER: In all contracts, CONSENT from the owner is necessary for the owner to be

Property Notes A.Y. 2011-2012

responsible for the necessary expense, otherwise the one who introduced the useful expense will shoulder the expenses incurred. Example: In Hotel Rooms, the greater number amenities, the more expensive it is.

Atty. Lopez-Rosario Lectures

-Kinds of Ownership1. Full ownership - includes all the rights of an owner 2. Naked ownership - right to use, fruits have been denied 3. Sole ownership - vested in only one person 4. Co-ownership - 2 or more owners -6 Rights of an Owner1.Jus possidendi - to possess Q: What kind of contract gives the right to possess but not all the other rights? A: Contract of Deposit - safekeeping of the property, baggage counter 2. Jus fruendi - to enjoy the fruits Kinds of Fruits: Natural fruits - young of animals, plants which grew without the intervention of man Industrial Fruits - produced by lands of any kind through cultivation or labor Civil fruits - rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income Q: What if the animal was from artificial insemination? What about cloned animals? What kind of fruit? Is it still a natural fruit, or does it become an industrial fruit? A: 2 Answers: 1. In StatCon - if the law is clear (unambiguous), there is no need for interpretation, meaning hayop pa rin naman yun so it will remain hayop forevermore, meaning still a natural fruit. 2. Consider the time when our civil code was drafted, 1950! At that time our legislators probably did not imagine that artificial insemination or cloning would be possible, so if there is intervention of man already, may be considered an industrial fruit. (Mam LR said that this is just something to think about, it is not yet asked in the Bar Exam, kapag naging examiner daw siya itatanong niya daw so be ready with a very good argument! :P )


Ornamental/Luxury Expenses - refer to those which add to the value of the thing but is neither essential to the preservation nor useful to anybody in general. REMEMBER: In all contracts, the luxury expense is ALWAYS shouldered by the one who introduced it. No right to demand reimbursement from the owner. *In contracts you usually see: 1. Ordinary expense - due to the ordinary wear and tear, shouldered by the person enjoying the possession of the property. e.g. light bulbs, gasket in faucet 2. Extraordinary expense - equivalent to necessary expense, owner will be responsible e.g. leaking roof TAKE NOTE: WHO SHOULD BE RESPONSIBLE FOR DIFFERENT KINDS OF EXPENSES IN CONTRACTS THAT INVOLVES TEMPORARY TRANSFER OF OWNERSHIP?!?

Ownership Possession
OWNERSHIP - may be exercised over things or right (Art. 427) The independent and general right of a person to control a thing particularly in his possession, enjoyment, disposition and recovery subject to those established by law no restrictions except those imposed by law or private persons right to dispose, enjoy, recover the thing without further limitations

POSSESSION - simply a right of an owner

Property Notes A.Y. 2011-2012

3. jus utendi - to use Q: What kind of contract gives the right to use even if you are not the owner of the property? A: Contract of Commodatum 4. jus abutendi - to abuse, use the property not in accordance with its proper purpose, only the owner is given the right. 5. jus disponendi - to dispose (consume, Encumber, Alienate), transfer ownership 6. jus vindicandi - to recover, there must be actual usurpation Possession - only a right of the owner Ownership - all encompassing Contract of Lease 1. Right to possess 2. Right to use 3. If stipulated, right to enjoy - lessee can act as lessor to a rd 3 person (sublease), but the right to dispose still remains with the original owner - new Rent Control Law, there must be a written consent from the owner that the lessee may sub-lease the property. Mutuum (simple load) - Transfer of ownership upon delivery of the thing All Rights = Money / Fungible Returned bills no longer the original bills Contract of Usufruct 1. Right to possess 2. Right to use 3. Right to enjoy the fruits Q: What is the difference between a Contract of Lease and a Contract of Usufruct? A: A contract of lease is always onerous, while a contract of usufruct may be gratuitous or onerous. There is nothing in the provisions on usufruct that provides for rentals

Atty. Lopez-Rosario Lectures

Q: In the Revised Penal Code, what is the equivalent of the Doctrine of Self Help? A: Art. 11 of the RPC - Self Defense. Requisites: 1. lack of provocation on the part of the offender 2. there must be an imminent danger 3. the offender used reasonable means to repel the danger, threat or unlawful act 4. defense of ones self, relatives, stranger and PROPERTY Q: What is the connection between self-help and self-defense? A: Both uses force as may be reasonably necessary to repel or prevent any actual or threatened unlawful act. *The usurpation must be actual or threatened. Cannot be when the usurpation already took place.

Doctrine of Incomplete Privilege

Q: Why is it called incomplete privilege? A: Because the owner does not have the absolute right, interference is necessary to prevent greater damage to adjoining properties. State of necessity - in criminal law considered as a justifying circumstance. - to prevent greater evil Basis of Benefit:
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.

Art. 23 (Civil Code) - even when an act or event causing damage to anothers property was not due to fault / negligence of defendant, the one who was benefited will be liable.

Doctrine of 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.

Property Notes A.Y. 2011-2012

Examples: 1. House on Fire. To prevent it from spreading, the house next to it will be destroyed

Atty. Lopez-Rosario Lectures

Eminent Domain - taking of private property for public use upon just compensation, more of a forced acquisition. Forced sale, compelled by the government, whether or not you want to sell your property. Requisites: 1. Exercised by competent authority 2. Expropriation for public use 3. Payment of just compensation 4. Observance of due process - Rule 67 *property is preserved * devoted to public use. Reasonable necessity is required not absolute necessity to expropriate a property. Example: C-3 Many houses were removed by power of eminent domain There was an act of preservation Just compensation - fair and full equivalent of the loss sustained, determined by the court. If the government does not pay a suit may be brought against the auditor general. Police Power - destruction of property for the benefit of the public in general. -No just compensation Example: Act of MMDA - Generally, does not have police power, administrative in nature -it has the power to enforce laws in accordance with a valid law implementing it - If public expediency calls for it and clear & present danger rule Limitations imposed by 3 persons
Art. 431. The owner of a thing cannot make use thereof in such manner as to injure the rights of a third person.

Liable - pro-rata proportionately 2. Remember Ondoy? The authorities released water to prevent damage to dam. 2. People inside elevator then there was a blackout. The elevator will be destroyed.

Limitations to Ones Ownership

Q: From Criminal Law, lets now go to Constitutional Law, what are the 3 inherent powers of the State? A: Police Power, Eminent Domain, Taxation Gen.Rule: 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 XPNs: 1. without detriment to servitudes 2. subject to special laws and ordinances 3. aerial navigation Owner cannot use his property in a manner rd that will injure the rights of 3 persons. Q: In taxation, how can you say that it limits ones property? A: Example: 1. salary - withholding taxes Doctors and LAWYERS are being run after by BIR because they are self-employed. 2. real property - failure to pay real estate tax can give government the privilege to foreclose your property. foreclose - sell your property at auction 3. when you eat burger - you are being charged value-added tax 4. Family Home - Art. 155 Fc G.R. exempt from execution, forced sale or attachment XPN 1) non-payment of taxes 2) Etc.

*enjoyment of property is limited if it will rd prejudice the rights of 3 persons. *even if you are the owner, you do not have absolute enjoyment, think of others Restrictions by the State: Q: Can you bury a corpse in your backyard? A:No, this is not allowed because of sanitation purposes.


Property Notes A.Y. 2011-2012

Q. Can you dig a very deep hole for swimming pool in your backyard w/out permit from Eng. Dept.? A. No. if you do that again & again, it could affect adjacent land - Art. 431 (rights of 3rd Person) Q. Can you make a CR with a big window? A. No. Even though according to the law you are the owner above & underneath, take note that there are restrictions. Restrictions made by private persons: Example: In subdivisions - there are restrictions imposed by developer like in the style or design of the house, there are also restrictions in the disposability of the property.

Atty. Lopez-Rosario Lectures

3. not trespasser or agent of owner * The state may in the interest of science or the arts, acquire such hidden treasure at a just price to be as allocated as G.R. * XPNS. * trespasser - not entitled to get any share because he cannot be allowed to benefit from hi unlawful act. * Right of Finder employed to look for treasure: no share in the treasure unless agreed upon. He can only ask for his wage. *If finder is married, his share in the treasure belongs to the absolute community property. (Art. 117 par. 4 FC) ELEMENTS OF HIDDEN TREASURE 1) hidden/unknown deposit of money, jewelry / other precious objects -> same class as money or jewelry 2) Lawful owner is unknown 3) Discovered by chance 4) Discovered / finder must not be trespasser Q. Maria (labandera) of Juan (owner) , after laundry, clean backyard, discovered an object, turned out to be jewelry. Hidden Treasure? Right of Maria? A. Yes. Look at elements, Maria not a trespasser, 50%. Q. Owner hired services of a group of men to find hidden treasure. If there is hidden treasure, who owns? A. It depends. If there is a stipulation, finder is entitled to 50%, if no agreement not entitled. Finder is only entitled to be paid for services. Q. Bills coming from bank, buried, subsequently found. Hidden Treasure? A: Bills - has serial number. Can be traced, identity known. Not HT Q. Usufructuary (lessee) finds Hidden Treasure. Who owns? A. Although the usufructuary is in actual possession of property, still he is NOT the owner, only entitled to 50% other 50% to owner.

II. Hidden Treasure

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. 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.

-any hidden & unknown deposit of money, jewelry or other precious objects, the lawful owner of which does not appear -discovered by chance By chance - good luck Doesnt preclude a finder who purposely hunt for hidden treasure

Gen.Rule. - If owner finder, totally belongs to the owner of land, bldg. / property XPNs. Finder different from owner, entitled to 1. discovered in property of another 2. discovery by chance


Property Notes A.Y. 2011-2012

Q. Yamashita Treasure? A. P.D. 172 - 25% granted to finder - 75% - govt In relation to ART. 719 - finders keeper Whoever finds a property not a treasure has the obligation to surrender it to proper authority. After posting of found object and 6 months will pass and no owner appears, the finder of the object will be entitled to it. If owner appears, finder is entitled to 1/10 of the value of the object. (Some unanswered questions) 1. How do you reconcile Art. 719 with hidden treasure? 2. What does the law mean when it provides that the lawful owner must be unknown? 3. When will you apply Art.719 and when will you apply the provision on Hidden Treasure?

Atty. Lopez-Rosario Lectures

- things joined to, or included with the principal for the latters embellishment, better use or completion. Note: While accessions are not necessary to the principal thing, the accessory and the principal MUST go together. Kinds of Accession 1. Accession Discreta - right to the fruits

Art. 441. To the owner belongs: (1) The natural fruits; (2) The industrial fruits; (3) The civil fruits. 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.

Accession Accessory Accession - not a mode of acquiring ownership (book 3 of NCC enumerates the modes of acquiring ownership, accession not include) -simply an extension of ownership over a thing to whatever is incorporated thereto naturally or artificially (with or without human labor) - Can happen both in real and personal property - fruits of or additions to improvements upon the principal Remember ( API ) Attached, Produced, Incorporated Note: Accession exists if the incorporation is such that separation would seriously damage either thing or diminish its value

Accessories - ornaments to add beauty and may be removed without causing injury Example : Ladies - those attached from head to foot are accessories - lahat ng pwedeng mapagsabitan / matusukan Reason: before you sleep, you can simply remove them.

Q: To whom will the fruits belong? A: Gen.Rule: 1. If you are the Owner of the property, you are entitled to the fruits of the property 2. Possessor in good faith, entitled to the fruits 3. Others who are still entitled to fruits: a. usufructuary Right to possess Right to use Right to enjoy b. antichresis creditor Antichresis - kind of security where in what is used in the security is fruits of the property to answer for the interest in the loan of a thing. - If no interest agreed upon, the fruits will be used to answer for the principal obligation c. lessee - if there is no express prohibition against sublease, is entitled to the fruits. 2. Accession Continua - by external forces (building, alluvium, etc.)


Property Notes A.Y. 2011-2012

Atty. Lopez-Rosario Lectures

*whatever has been acquired, it is the obligation of the owner of the real property to pay the proper indemnity. * It is the right of the owner of the land to: -acquire whatever is planted -acquire whatever is build E.G. Juan b,p,s in good faith. He planted / constructed his house on a real property he thought was his. Good Faith : (1) b,p,s believes that real property belongs to him (2) believes that title over the property does not have any defect/flaw. st * XPN to the 1 principle. *depending on the owner of the property, B,P,S has the right to acquire the land *PROVIDED, that the value of the land is not higher than the value of improvement of what has been built, planted or sowed. Reason: (a) If owner does not like the property he can sell to b,p,s provided that the value of the real property is not higher than the improvements (b) If the value of the land is higher than the improvements, the agreement would be a contract of lease. 5) Bad Faith - landowner; b,p,s; owner of materials whoever it is always liable for damages a. Owner of real property in bad faith He will acquire whatever is built/sown applying principle that accessory follows the principal BUT he has to pay the proper indemnity for the value of what has been built, planted or sown but in addition to that being in Bad faith, he is liable for damages. b. B,P,S (bad faith) liable for damages In relation to necessary expenses -the B,P,S (whether in good faith or bad faith) , has the right to demand for reimbursement of whatever necessary expenses he incurred from the owner of the real property. -B,P,S is given the right of retention in relation to accession industrial

With Respect to REAL PROPERTY 2.1 Accession Industrial - by the work of man (building, planting, sowing) - Involves a person who through building, planting or sowing, introduces an improvement on the property. 3 Categories of Builder/Planter/Sower 1. Landowner is the B/P/S, who is different from the owner of the material. (2 Personalities) Land owner B/P/S OM (owner of the material) 2. Landowner is different from the B/P/S who is the owner of the material. (2 Personalities) Land owner B/P/S OM 3. Landowner different from BPS, different from owner of the material. (3 personalities) landowner B/P/S OM Guidelines: 1) Is there really accession? - Remember the definition of Accession, whatever is Attached, Produced or Incorporated (A-P-I) 2) Accessory follows the principal - How will you apply? G.R. - owner of the real property w/n good faith or bad faith has the right to own whatever he planted, built or sowed in the property. Reason: Because of the principle that accessory follows the principal Example: a) between Land vs. building/planted/sowed land = principal Whatever is built, planted or sown = accessory Reason: because the land can exist by itself w/o any building or plant bldg. /plant cannot exist w/out being attached to the land b) hanging plant (on air)? *does not apply Gen. Rule - In BPS, whatever is planted on the soil should be attached to the land *Tignan ang definition!!! wag tamad 3) Whoever is the owner of the principal is the owner of the accessory.

4) Application of the principle of unjust enrichment


Property Notes A.Y. 2011-2012

*right of security / right of retention -given to the B,P,S for purposes of serving as a guarantee that he can retain the property as long as the owner of that property (real) has not given the amount that he (b,p,s) has incurred for the necessary & useful expense Reason: so that the B,P,S can get an assurance that the owner will reimburse him for whatever necessary expenses he has incurred.

Atty. Lopez-Rosario Lectures

who have the right to retain possession of the property until reimbursement by respondent. We affirm the ruling of the CA that introduction of valuable improvements on the leased premises does not give the petitioners the right of retention and reimbursement which rightfully belongs to a builder in good faith . Otherwise, such a situation would allow the lessee to easily "improve" the lessor out of its property. We reiterate the doctrine that a lessee 12 is neither a builder in good faith nor in bad faith that would call for the application of Articles 448 and 546 of the Civil Code. Under Article 1678, the lessor has the option of paying one-half of the value of the improvements which the lessee made in good faith, which are suitable for the use for which the lease is intended, and which have not altered the form and substance of the land. On the other hand, the lessee may remove the improvements should the lessor refuse to reimburse. Arangote vs. Sps. Maglunob Petitioner cannot be entitled to the rights under Articles 448 and 546 of the Civil Code, because the rights mentioned therein are applicable only to builders in good faith and not to possessors in good faith. Moreover, the petitioner cannot be considered a builder in good faith of the house on the subject property. In the context that such term is used in particular reference to Article 448 of the Civil Code, a builder in good faith is one who, not being the owner of the land, builds on that land, believing himself to be its owner and unaware of any defect in his title or mode of acquisition. the builder in good faith can compel the landowner to make a choice between appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land. The choice belongs to the owner of the land, a rule that accords with the principle of accession, i.e., that the accessory follows the principal and not the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. He must choose one. He cannot, for instance, compel the owner of the building to instead remove it

In relation to useful expense *good faith = can demand reimbursement from owner of property *bad faith = not demandable CASES Ballatan vs. CA The right to choose between appropriating the improvement or selling the land on which the improvement of the builder, planter or sower stands, is given to the owner of the land. In the event that the owner elects to sell to the builder, planter or sower the land which the improvement stands, the price must be fixed at the prevailing market value at the time of payment This case is not for expropriation. This is a case of an owner who has been paying real estate taxes on his land but has been deprived of the use of a portion of this land for years. It is but fair and just to fix compensation at the time of payment. Sulo Sa Nayon Inc. vs. Nayong Pilipino Foundation This article [Article 448] is manifestly intended to apply only to a case where one builds, plants, or sows on land in which he believes himself to have a claim of title, and not to lands where the only interest of the builder, planter or sower is that of a holder, such as a tenant. In the case at bar, petitioners have no adverse claim or title to the land. In fact, as lessees, they recognize that the respondent is the owner of the land. What petitioners insist is that because of the improvements, which are of substantial value, that they have introduced on the leased premises with the permission of respondent, they should be considered builders in good faith


Property Notes A.Y. 2011-2012

from the land. In order, however, that the builder can invoke that accruing benefit and enjoy his corresponding right to demand that a choice be made by the landowner, he should be able to prove good faith on his part.

Atty. Lopez-Rosario Lectures

property that is detached from a neighboring property. *it will only apply if you were near a river/body of water applies in the province, if you want to increase your land, buy a land near a body of water (this is what the law says) Remember: Alluvium = not identifiable refers to small particles of soil accumulated into a greater mass. not painful on the part of the original owner who lost a part of land Avulsion - with force refers to an identifiable portion of a real property that was detached from? Neighboring property by the force of H2O, is now moved to your real property delayed accession
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.

2.2. Accession Natural - by nature Involves: Alluvium -A Avulsion - A Uprooted trees - U Abandoned river beds - A Q. How come they are called accession natural? A. Because w/o human intervention something is added/attached to the property. Example: beach - seashore -watch the movement of water, the sediments upon the movement of H2O it will either be washed away or it will stick to the sand. Q. How did the alluvium / avulsion take place? A. Those sediments that accumulated on the seashore due to the force of the water. Q. Who now owns the sediment? A. Owner of the property where the sediments accumulated. Under the provisions of property, specifically alluvium: Alluvium- small particles of soil are being washed away by the movement of H2O w/out the owner of the real property knowing it. -real property must be located near the river -There is an increase in the area of owners property, that increase is due to alluvium - not identifiable w/ that of real property In relation to Land Registration Act Even if the civil code says that the owner of the real property, where all those particles are gradually deposited & attached can make owners ship through it, LR Act says that a resurvey must be done to include it in the technical description *intention of the law: not only 1 grain of sediment, those accumulated sediments *it is different if what is attached to the real property is an identifiable portion of a real

Reason: the owner of the real property where that identifiable portion has been separated has the right to claim it within 2 years. Once 2 years has lapsed, the owner of the neighboring property where the identifiable portion is now attached, can fully claim ownership, it can now be a notice to the world subject to resurvey to include it in the technical description in your title. ALLUVIUM deposit of soil is gradual unidentifiable belongs to owner of property to which it is attached malumay = gradual AVULSION sudden or abrupt process identifiable belongs to owner from whose property it was detached maragsa = with force


Property Notes A.Y. 2011-2012

Formation of Islands Uprooted Trees
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.

Atty. Lopez-Rosario Lectures

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 nonfloatable 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.

-owner of real property where the uprooted tree can now be found cannot claim ownership -original owner of the uprooted tree is given 6 months from the time it is uprooted -in the province, they convert it into furniture Delayed accession because of 6 month period given to owner to redeem the tree natural

River beds abandoned through change in course of the water

Q: Juan has property near a body of water, 2 years after an island was formed near property of Juan. Can Juan claim ownership over the island? A: It depends if the body of water is: Navigable - Absolutely No!!! Remember the regalian doctrine?!? Right of way of boats and ferries. Non-navigable - depends again if: a. Nearer to Juans property, he is the SOLE owner b. If equidistant or the island is located at the center - by operation of law, CO-OWNERSHIP will apply. 1. Formed by the sea: a) within territorial waters - STATE b) outside territorial waters - FIRST OCCUPANT 2. Formed in lakes or navigable or floatable rivers - STATE 3. Formed in non-navigable or non-floatable rivers: a) equidistant from both banks (measured from the islands margins) - to the riparian owners by half (co-ownership) b) nearer one margin or bank - to the nearer riparian owner. Riparian Owner - owner of land located on the bank of a river or stream (or occasionally another body of water, such as a lake) Littoral - relating to the coast or shore of an ocean, sea or lake

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.

-applies in the province -not applicable in Manila (canal is not a river bed) -natural change in course biglang liko due to it, the abandoned river bed is now the subtitle of the area affected by the natural change in course EXCHANGE DEAL

Reason: For being fair, even if it is very far, abandoned part will be an exchange of the area affected. PRINCIPLE OF UNJUST ENRICHMENT!


Property Notes A.Y. 2011-2012

CASES Government of P.I. vs. Cabangis As the lots in question (near Manila Bay) disappeared by natural erosion due to the ebb and flow of the tide, and as they remained in that condition until reclaimed from the sea by the filling in done by the Government, they belong to the public domain for public use. Siain Enterprises Inc. vs. F.F. Cruz and Co. The DENR Secretary found that the disputed area is a natural foreshore, hence, it concluded that SIAIN, being a littoral owner (owner of land bordering the sea or lake or other tidal waters), has preferential right to lease it as provided in paragraph 32 of Lands Administrative Order No. 7-1 dated April 30, 1936 which reads: 32. Preference of Riparian Owner. The owner of the property adjoining foreshore lands or lands covered with water bordering upon shores or banks of navigable lakes or rivers, shall be given preference to apply for such lands adjoining his property as may not be needed for the public service, subject to the laws and regulations governing lands of this nature, provided that he applies therefore within sixty (60) days from the date he receives a communication from the Director of Lands advising him of his preferential right That rule in paragraph 32 is in consonance with article 4 of the Spanish Law of Waters of 1866 which provides that, while lands added to the shores by accretions and alluvial deposits caused by the action of the sea form part of the public domain, such lands, when they are no longer washed by the waters of the sea are not necessary for purposes of public utility, or for the establishment of special industries, or for the coast guard service, shall be declared by the Government to be the property of the owners of the estates adjacent thereto and as increment thereof. In other words, article 4 recognizes the preferential right of the littoral (riparian according to paragraph 32) to the foreshore land formed by accretions or alluvial deposits due to the action of the sea.

Atty. Lopez-Rosario Lectures

foreshore area subject to the preferential right to lease of the littoral owner. It bears noting that it was not the reclamation that brought the disputed foreshore area into existence. Such foreshore area existed even before F.F. Cruz undertook its reclamation. It was formed by accretions or alluvial deposits due to the action of the sea. Following Santulan, the littoral owner has preferential right to lease the same.

With Respect to PERSONAL PROPERTY There is Accession if it will cause injury to property, if no injury it is only accessory. Example: pair of glasses - it is composed of several properties merged together Frame, glass/lens, nose pad, rubber Q: If one is removed from the other, what will happen? A: In accession, personal properties are put together, once there is an attempt to remove another, it will cause injury or destruction to the thing. In the example, if the glass/lens are removed from the frame, it will cause injury to the frame/glasses then there is accession. Kinds of Accession In Personal Property 1. conjunction/ adjunction 2. conmixtion 3. specification CONJUNCTION/ADJUNCTION The union of materials belonging to different owners making up a new thing. Separation being impossible without injury. Elements of Adjunction/Conjunction: 1. Two personal properties put together 2. removal of which will cause injury or destruction 3. retains the identity of the separate personal properties. In the example given, the identity of the frame remains separate and distinct from the identity of the lens.

That the foreshore area had been reclaimed does not remove it from its classification of


Property Notes A.Y. 2011-2012

Q: If the owner of the frame is different from the owner of the lens, who owns the eyeglass? A: To answer this question, you have to be very intelligent Determine always what is the principal and what is the accessory remember our principle, ACCESSORY FOLLOWS THE PRINCIPAL. If you cannot determine which is the principal and which is the accessory, then apply: 4 RULES (apply chronologically!) 1. Rule of Importance 2. Rule of Greater Value 3. Rule of Greater Volume 4. Rule of Greater Merit Rule of Importance Gen. Rule: The owner of the more important personal property is the owner of the whole thing. XPN: 1. Both in Good Faith In the example, if the value of the frame is higher than the lens, the owner of the frame has the right to demand separation (if slight injury, no problem) 2. Owner of Principal in Bad Faith always liable for damages Owner of accessory in good faith can demand separation even if it will cause destruction, not just simple injury. 3. Owner of Accessory in Bad Faith Liable for damges Losses property and will go to owner of principal as adjunction 4. Good faith/ Bad Faith not mentioned Qualify Other examples in adjunction (importance): 1. jewelries 2. watch 3. button in polos 4. zipper 5. car engine and car key Rule of Greater Value Examples: 1. wristwatch - watch is more valuable than leather band 2. diamond ring - diamond more valuable than gold band

Atty. Lopez-Rosario Lectures

Rule of Greater Volume - Apply if the two properties have the same value Rule of Merit or Sentimental Value that of greater merits, taking into consideration all the pertinent legal provisions

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.

Gen. Rule is ACCESSORY FOLLOWS THE PRINCIPAL (GOOD FAITH ON BOTH OWNERS) XPN: When accessory is much more precious than the principal, in which case the owner of the accessory may demand the separation even if the principal suffers some injury NOT destruction. OWNER OF PRINCIPAL IN BAD FAITH: Owner of the accessory has the option: a) to recover damages OR b) to demand separation even to the extent of destroying the principal + damges
Art. 470. (par.2) 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.


Property Notes A.Y. 2011-2012

OWNER OF ACCESSORY IN BAD FAITH: Losses accessory and liable for damages
Art. 470. (par.1) 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.

Atty. Lopez-Rosario Lectures

originally from cotton, cotton originally from a tree. Pants/Jacket = accessory Labor (man) = principal, without it such property cannot change into another

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.

MIXTURE (conmixtion or confusion) Union of materials were the components lose their identity Results to CO-OWNERSHIP Separation of property is NOT possible, no principal/ accessory 1. conmixtion - mixture of two solids Example: cement + sand 2. confusion - mixture of two liquids Example: water + chlorine Vinegar + soy sauce Solid + Liquid = water + coffee

Adjunction - the identity of the 2 properties is separate and distinct Mixture - the identity of the 2 properties will disappear Q: Who will own the water mixed with the coffee? A: It DEPENDS! If by accident (good faith) coownership will apply. If intentional (bad faith), owner in bad faith will lose right to his own material + liable for damages. SPECIFICATION: It is the transformation of anothers material by the application of labor. The material becomes a thing of a different kind. HUMAN LABOR is deemed to be the principal Identity of the personal property is transferred to another due to human intervention Example: pants and jacket Cannot be immediately produced. These were transformed originally from a piece of cloth, the cloth

RULES: 1. Owner of Principal in Good Faith: Gen. Rule: Maker acquires the new thing and indemnify owner of material (unjust enrichment) XPN: if the value of the material is greater than value of labor, owner of material has option: a) to acquire the property + indemnify for labor OR b) demand indemnity for material 2. Owner of Principal in Bad Faith Owner of material has option: a) acquire the result without indemnity (due to impossibility of separation) OR b) indemnity for the material + damages 3. Owner of Material in Bad Faith - loses material and must pay damages.


Property Notes A.Y. 2011-2012

IV. Quieting of Title Purpose: Restoration Accion que teinet An equitable action in rem to determine the condition of the ownership or the rights to immovable property and remove doubts thereon A cloud on title is a semblance of title A cloud on title exists when there is an instrument, record, claim, encumbrance or proceeding which is apparently valid or effective, such instrument is in truth and in fact invalid, ineffective, voidable or unenforceable or has been extinguished by prescription. Action does not prescribe Plaintiff must have legal or equitable title but need not be in possession of the property (Art. 477) Procedural remedy There should be an instrument or document involved No rule in civil procedure and special proceedings, therefore, sabi ni Mam LR, it is a DECLARATORY RELIEF

Atty. Lopez-Rosario Lectures

Direct attack main action/central issue In the Family Code: Nullity of Marriage can be attacked directly/collaterally. Collaterally possible for settlement. Annulment of marriage cannot be attacked collaterally, must be direct.You need to file a petition for annulment. Leyson vs. Bontuyan SC: Action for reconveyance prescribes in 10 years if claimants are not in possession. If in possession = It does not prescribe. Q: Who can file? A: The plaintiff must have a legal or equitable title to, or interest in the property subject of the action. He need not be in possession of the property.

V. Co-ownership Created by law or by agreement Plurality of parties, like in a Corporation except corporation sole Not a juridical person The law says spiritual share meaning you cannot identify where is your exact share. If the specific share is identifiable then the coownership is extinguished.

Q: What if there is doubt on title? A: Proper remedy is to quiet title Q: Is there a prescriptive period for action of quieting? A: It depends If plaintiff in possession, action does not prescribe If plaintiff not in possession prescribes a) Good faith = 10 years b) Bad faith = 30 years Indispensable requisite which must be present so that you can file an action to quiet: Possessor has legal/equitable title Not necessary that he is in possession Legal registered owner Equitable Beneficiary Deed/ Instrument must be shown to be invalid and operative There must be evidence to prove

Art. 484. the right of common dominion which 2 or more persons have in a spiritual part of a thing which is not physically divided. a) Hidden treasure (chance) no problem if the property can be divided physically. - If it cannot be divided physically, automatically there is co-ownership. b) By Succession - only 1 property left and several compulsory heirs Upon death of decedent compulsory heirs automatically become co-owners. c) Property Relationship between common law spouses 147 and 148 of the FC.


Property Notes A.Y. 2011-2012 Co-ownership

Co-Ownership Created by other sources besides contract No juridical personality Purpose: Common enjoyment May not stipulate indivision for more than 10 years but 20 years if imposed by testator/donor Not dissolved by death of co-owner Example: 1. Law office through partnership Can enter into transaction with any person 2. Co-owner of property Cannot enter into transaction No juridical capacity Remedy: Co-owner will have to enter rd into particular transaction with 3 person 3. Partnership: 1 dies = partnership is terminated Co-ownership: 1 dies, will not dissolved the co-ownership. Q: Is there perpetual co-ownership? A: No. Any co-owner can demand partition of ownership at any time. Basis: Patricio vs Dario III No co-owner ought to be compelled to stay in a co-ownership indefinitely. Co-owner may insist on partition of the property at any time. An action to demand partition does not prescribe If there is agreement on co-ownership, can continue for a maximum of 10 years. If a co-owner wants to sell the property it must be with a unanimous consent.

Atty. Lopez-Rosario Lectures Partnership

Partnership Created by contract except conjugal partnership Has juridical personality Purpose: Profit May be for more than 10 years Lopez vs. Ilustre A co-owner has the right to freely sell and dispose of his undivided interest, but no right to sell a divided/definite part of the real estate. Cruz vs. CA Co-ownership is terminated if there is judicial or extra-judicial partition of property. Avila vs. Sps. Arabat Any act intended to put an end to division is deemed to be PARTITION. Heirs took possession of respective share and constructed respective houses. Co-ownership is legally dissolved and right of redemption cannot anymore be exercised. Q: Can a co-owner file an action for ejectment against another co-owner? A: Yes, ejectment is only about physical or material possession. If it is beneficial to the other co-owners, action for ejectment will prosper. (De Guia vs CA) De Guia vs. CA SC: Co-owner may file an action for ejectment under Art. 487. Not only as against a third person but also against a co-owner who takes exclusive possession and asserts exclusive ownership of the property (no consent necessary). Q: Is it possible to acquire undivided interest of co-owner by prescription? A: Yes, SC in Sta. Ana Vs. Panlasigue GR: Co-owner cannot acquire by acquisitive prescription the undivided share. XPN: Unless there is an explicit repudiation of that share coming from a co-owner. But if that co-owner did not repudiate his share, there can be NO acquisitive prescription. Heirs of Cabal vs Cabal Co-ownership will not exist if a portion owned is completely determined or specified by its very nature. Every co-owner owns an undivided interest and you cannot pinpoint where that property co-owned is an undivided interest.

Dissolved by death of partner


Property Notes A.Y. 2011-2012

Sources of Co-ownership: 1. Law a. common law spouses (Art. 147-148 FC) b. commixtion/confusion - generally will result to co-ownership, subject to the xpns c. Hidden Treasure d. Formation of islands if equidistant = coownership (in all the above circumstances, coownership is created by operation of law) 2. Contract 3. Succession 4. Chance 5. Occupation - hunting/fishing Consent of Majority of interest in a coonwership E - Enjoyment M Management I Improvement (Art. 489) Unanimous Consent: E - Emcumbrance (Mortgage) D Disposition of entire property (Sale/Donation) A Alteration of thing owned in common (Art. 491) In relation to expenses: Necessary Expenses: Art. 488 Q: Does co-owner have the right for reimbursement? A: Yes, because it is beneficial to all co-owners. But the law says it would be better to notify in advance .No consent needed Q: What if the other co-owners still does not pay? A: Co-owner may compel the other co-owner to pay. If the other co-owner renounced his undivided share, that share will be considered as payment for the necessary expenses incurred. Dacion en Pago. Useful and Luxury Expenses If no consent, that co-owner who introduced wil be solely responsible for it.

Atty. Lopez-Rosario Lectures

Causes for extinction of co-ownership: 1. Total destruction of the thing 2. Merger of all interest into one person 3. Prescription (adverse possession) rd - By a 3 person or one co-owner (open and adverse) 4. Partition judicial/extrajudicial GR: Maybe asked at anytime XPN: When there is stipulation against it. Condition imposed by transferor; legal nature prevents partition; prohibited by law; partition would render the thing unserviceable. Basis: Figuracion Gerilla vs Vda. De Figuracion Premature to partition a property that is co-owned if ownership of property is still in dispute/remains in issue as to expenses. Condominium Act: RA 4726 June 19, 1966 Reason for the law : the proliferation of condos in the Philippines Sec. 2 Condominium An interest in real property consisting of separate interest in a unit in a residential, industrial or commercial building and an undivided interest in common, directly or indirectly, in the land on which it is located and in other common areas of the building. *Indispensable requirement: All incorporators of condo corp. Must be shareholders thereof. Shareholders - owner of condo unit. *There are areas in the condo that are coowned, example: - stairs, elevator, gym etc *Your unit is yours exclusively but you have no right to make changes outside your unit. *the higher the unit, the more expensive it is. Why? Because dear reader, there is less disturbance. *the lower the unit, the cheaper it is. Why? Because dear reader, there is more disturbance. You have to endure the fact that people from the higher unit will pass by your unit (corridor) every day to get out of the condo. Your location is more prone to being used because of the COMMON AREAS! Gets?!? (very good! Now we proceed to the next topic.)


Property Notes A.Y. 2011-2012

VI. Possession Material holding or control of a thing (Possession proper) Exercise of a right (quasi-possession) Holding of a thing or of a right whether by material occupation or by the fact that the thing or right is subjected to the action of our will. Possession in Property does not automatically refer to actual physical possession, because there is such a thing as: a) Possession in the concept of holder b) Possession in the concept of owner Example: Lessee possession in the concept of holder. Lessor although not in the actual possession, in the concept of holder of a right. Possession in concept of owner. Jus Possidendi The right to possess Right exercised by the owner of the property. Different Types of Credit Transactions Commodatum Usufruct Antichresis Lease Lessee holder Lessor owner rd *Right of possession is transferred to a 3 person but not the other rights of an owner. Q: What can be objects of possession? A: Only things and rights susceptible of appropriation Res Nullius Nobody owns them so you cannot be charged of robbery. Res Alicujus unless in relation to different kinds of transactions, owner delvers rd possession to a 3 person which shows that the object is not res nullius, subject that there is consent in the transfer of the possession. Q: What are excluded? A: Res Communes Property of Public Dominion Discontinuous Servitudes Non-apparent- servitudes.

Atty. Lopez-Rosario Lectures

Ways of Acquiring Possession: 1. Material Occupancy includes constructive delivery. Traditio Brevi Manu (TBM) transferee already had the property in his possession for any other reason. Ex. Juan, lessee of property of Maria, decides to buy the property upon hearing that Maria intends to sell it. After buying the property, Juan continues/ remains to be in possession of the property - from lessee to owner. Constitutum Possessorium (CP) take place when the owner of the property alienates it but continues to be in possession in the concept of a tenant or other subordinate right = lessee/usufruct. Ex. Owner sells property to another person subject to the condition that he is allowed to continue to possess the property. 2. By the subjection to the action of our will according to law even without physical seizure Tradicion Symbolica (TS) delivery of the keys of the place or depository where the thing is stored or kept. OBLICON contract of sale Stages: 1. Preparation 2. Perfection 3. Consummation - Real property by nature that cannot be actually transferred or delivered. - The only way to deliver it is through symbols. Ex. Delivery of a title or key no actual transfer of object. Traditio Longa Manu (TLM) thing cannot be manually transferred to the transferee at the time of agreement but there is no legal obstacle to the transfer of possession. Q: Is tradition longa manu applicable in REAL property or is it limited to personal property only? A: It is limited to personal property only because if you are just pointing to a parcel of land, how will you be able to identify the lot area? In the sale of land, there must be a survey to properly identify the meets and bounds of the lot, therefore TLM not applicable.

1. 2. 3. 4.


Property Notes A.Y. 2011-2012

3. By proper acts and legal formalities Clandestine possession hidden or disguised, as distinguished from open or public possession. Possession by tolerance does not give rise to ownership. Ex. Squatter (Informal Settlers) living in Rizal Park. Acts merely tolerated, and those executed clandestinely and without knowledge of the possessor of a thing or by violence, do not affect possession. (Art. 537) Ex. Public Dominion cannot be acquired by acquisitive prescription. It cannot ripen into ownership. Right of Possession Right to Possession Jus Possessionis Right of possession is independent and apart from ownership Who enjoys? : - Usufructuary -Bailiee in Commodatum -Pledgee -Lessee Jus Possidendi Right to possession is a mere incident of ownership Who Enjoys? :

Atty. Lopez-Rosario Lectures

Q: What if there is a dispute between 2 persons regarding possession of property? A: Rules: 1) Preference, shall be given to one in actual possession the law presumes that if you are in possession you are the owner. 2) If 2 or more possessors Oldest or Longer possessor 3) If the same, the one who can show title *If all conditions are equal, determined in proper proceedings (Art. 538). *Rule #1-3 must first be resorted to before going to Rule # 4. Different kinds of action to recover possession of real property: 1) Summary (Accion Interdictal) Forcible Entry MTC Sampayan vs. CA SC: In an action for forcible entry, plaintiff must prove that he was in previous possession of the land/building and he was deprived thereof by means of fraud, intimidation, threat, strategy or stealth (FISTS). Absence of prior physical/actual possession by plaintiff warrants the dismissal of his complaint. Complainant must prove that: 1. he is in ACTUAL possession 2. he is deprived of possession through FISTS 2) Unlawful detainer originally defendant was in lawful possession of property, however, because of expiration of the period that has been leased/violation/breach of conditions stipulated, possession of that defendant becomes unlawful. Steps: 1) Demand for defendant to vacate premises (15-30 days) 2) Letter must be given which was made by a lawyer for an action of unlawful detainer. Ocampo vs. Tiroma SC: Elements to be proved in unlawful detainer: 1. There was lawful possession first - this may be in a lease or usufruct 2. The contract is expired already or there was a violation of the contract.

Possession with juridical title Possession with just title

Possession with Juridical Title Predicated on a juridical relation existing between the possessor and the owner of the thing but not in the concept of owner, such as that of lease, usufructuary, depositary etc. Connect with right of possession Ex.Usufructuary, Depositary, pledge, lessee in possession but not in the concept of an owner. Possession with Just Title Possession of an adverse claimant whose title is sufficient to transfer ownership but is defective as when the seller is not the true owner. Connect with right to possession Refers to owner of property


Property Notes A.Y. 2011-2012

Remedies: Recovery of possession Accion Publiciana Issue: Possession Accion Reinvidicatoria Issue: Ownership RTC Oblicon: For a person to be in default, you must make a demand. Within 1 year from the date of? Answer: Demand to vacate the premises Injunction, against continuation of trespass Q: What is the proper remedy to get rid of informal settlers? A: Demand first that they should vacate the property. Then 1 year from date of demand to vacate if still stubborn, file accion publiciana in the RTC. Q: What if property is not real but personal? A: File an action for REPLEVIN. Replevin : Go back to Art. 415 real/personal property. Proper action for recovery of personal property Rule 60 ROC -

Atty. Lopez-Rosario Lectures

Art. 1678 allows reimbursement of lessees up to of the value of their improvements if the lessor elects. Possessor in Good Faith Art. 546 entitled necessary expenses.



Right of Retention Sps. Nuguid vs. CA Under Art. 448, the owner is given the option: a) To appropriate the improvement as his own upon payment of the proper amount of indemnity; or b) To sell the land to the possessor in good faith Relatedly, Art. 546 provides: that a builder in good faith is entitled to full reimbursement for all necessary and useful expenses incurred. Also gives builder/possessor in good faith the right of retention until full reimbursement is made. Kinds of Action to Recover Possession of Real Property 1) Summons (Accion Interdictal) forcible entry/unlawful detainer. MTC 2) Accion Publiciana action for the recovery of possession. Based on superior right of plaintiff to possession (in concept of holder) RTC Issue: On possession NOT ownership 3) Accion Reinvindicatoria Issue: Based on ownership RTC 4) Injunction against continuation of trespass. 5) Interpleader a suit to determine a right to rd property held by a disinterested 3 party, who is in doubt about the ownership and who therefore deposits the property with the Court to permit interested parties to litigate ownership. Purpose: 1) Who should receive property; 2) avoid multiple liabilities.

Q: What is the principle of Irrevindicability? Art. 559 A: General Rule Under acquisitive prescription; if you are in possession of property in good faith, you can acquire it after 10 years. If you are in possession of a movable/personal property and you acquired it in good faith, acquisition of which is equivalent to a just title. Ex. 1) If owner of that property lost it No finders keepers under the civil code. It should be surrendered to proper authorities. Connect with modes of acquiring. 2) If owner has been illegally deprived of it Under Criminal Law Antifencing Act. Jimenez vs. Patricia Lessees, much less sub-lessees are not possessors or builders in good faith over rented land because they know that their occupancy of the premises continues only during the life of the lease or sublease as the case may be. They cannot as a matter of right recover the value of their improvements from the lessor, much less retain the premises until they are reimbursed.


Property Notes A.Y. 2011-2012

VII. Usufruct 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. uso use fructo fruits/enjoy A real right (of a temporary nature) May involve real or personal property. -

Atty. Lopez-Rosario Lectures

There can be considerationMay be gratuitous/onerous

Characteristics/Elements: A. Essential without which it is not a usufruct. 1) Real right 2) Temporary in nature 3) Purpose: To enjoy the benefits B. Natural ordinarily is absent GR: to preserve it XPN: when the title/law provides that it is OK not to preserve. C. Accidental Difference between Usufruct Lease Lease consideration is regular, weekly, monthly Usufruct consideration is only ONCE, not a regular basis Reason: a) To prevent exploitation b) To prevent abuse w/c is frequent c) To prevent impairment Q: May a usufructuary lease the object? A: NHA vs CA Art. 565, 572 Usufructuary may lease the object, has the right to enjoy the fruits Has the right to choose tenants Usufructuary allowed to administer and manage the property Q: What happens to the contract of lease entered into by the usufructuary in relation to the stipulated period agreed upon by the naked owner and usufructuary? A: The lease contract entered into by the rd usufructuary with a 3 person will be terminated upon the termination of the contract of usufruct. Upon termination of usufruct, it is also termination of contract of lease. Usufructuary/heirs/succession Similar analogy shall only recover proportionate share of the rent. If lessee sublease the property under lease, original contract of lease is terminated, the sublease contract automatically terminated.

Usufruct Lease Commodatum

Distinction: right to enjoy fruits Lease: Rights: 1. Possess 2. Use 3. Enjoy it depends, if there is express prohibition against a sublease, then no right to enjoy the fruits. If allowed, lessee can sublease property, hence can enjoy the fruits. Parties: Lessor and Lessee Usufruct: Rights: 1. Possess 2. Use 3. Enjoy Parties: Naker owner and Usufructuary. Commodatum: Rights: 1. Possess 2. Use 3. No transfer of right to enjoy Parties: Bailor and Bailee Object: real/personal; sterile/productive; may be rented as a right. Q: Is there consideration involved in Usufruct? Lease? Commodatum? A: 1. Lease there is consideration. - rentals Lessee cannot sublease without the consent of lessor Rental Law 2. Commodatum essentially gratuitious 3. Usufruct civil code is silent. Accdg. To Castan - 1890 Spanish Civil Code Provision of property was retained unlike in FC (marriage)


Property Notes A.Y. 2011-2012

Q: Can money be an object of usufruct? A: Yes. Alunan vs. Veloso Money is a consumable because you will not be able to return the same money bearing the same serial number that was given by the naked owner, but there can still be a usufruct, this is called abnormal usufruct. Quasi-usufruct Because it refers to a usufruct wherein the object is a consumable property. More of an exception, because the nature of the usufruct, it is the obligation of the usufructuary upon the termnation of the usufruct that he will deliver back the same property that he received in the same condition. Q: What will be returned/delivered back? A: The appraised value so the usufructuary will now have to pay the appraised value of that consumable property that was used and enjoyed by the usufructuary. The appraised value could be the current value from the time the usufruct ceases. Connect with Art. 547. In relation to hidden treasure: HT discovered by the a usufructuary on the property under usufruct, it is by chance, to the owner of that object considered as a stranger therefore he is entitled to of the hidden treasure, other half belongs to the owner. In relation to expenses: Necessary usufructuary may demand reimbursement because it will redound to the benefit of the owner. Ordinary usufructuary will shoulder Extraordinary souldered by the naked owner. Q: What are the obligations of a usufructuary before entering upon the enjoyment of property? A: 1. To make an inventory of all the property; 2. To give a security Reason: the law wants to protect the interest of the naked owner considering that the possession, right to use and enjoy the fruits are entrusted to the usufructuary. Growing crops goes to the naked owner, reimburse the usufructuary.

Atty. Lopez-Rosario Lectures

If naked owner is insolvent, usufructuary may recover fruits from naked owner dation. The abovementioned obligations are connected with the obligation of the usufructuary to return the object under the same condition when it was delivered to him. That is why before he enters the property he has to give an inventory of the property at the same time a security. Q: Is it possible that a usufructuary can still take possession of the property without giving a security? A: Yes, in lien of that, what he can give is a caucion juratoria. Caucion Juratoria an undertaking, an oath, palabra de onor. Bond by oath if usufructuary cannot give a security. Q: What if there is refusal of giving security/ caucion juratoria? What are the remedies of the naked owner? A: Remedies: Ask for the administration of the property, instead of giving it to the usufructuary, in which case it would defeat the purpose of the usufruct. It is one way to pressure the usufructuary to either give the security/ if not a caucion juratoria. Death of usufructuary may create doubt as to who is the owner, put a provision in the contract. OBLIGATION OF A USUFRUCTUARY DURING THE EXISTENCE OF A USUFRUCT To make an inventory of the property to protect the naked owner Take care of the thing as a good father of a family Give a bond/security cash/surety Make ordinary repairs at his expense. Extraordinary expense owner. Pay taxes and charges Notify owner of urgent need for extraordinary repairs (Art. 593) and acts detrimental to ownership (Art. 601) Bear cost of litigation over the usufruct (Art. 602) Answer for fault of lessee/agent


Property Notes A.Y. 2011-2012

Ordinary diligence - in OBLICON Art. 1163 ordinary diligence of a good father of a family is required in ordinary contracts. In usufruct (contract of Usufruct) same diligence is required because it is incumbent upon the usufructuary to preserve the property in its condition when it was delivered to him. To shoulder all ordinary expenses Under the provisions in usufruct, the law uses the terms ordinary expenses and extraordinary expenses Q: Why not useful and necessary? A: The definition of extraordinary expenses pertains to the repairs needed to restore the property in its original condition, more or less it is similar to that of a necessary expense. It is the same sole responsibility of the usufructuary to shoulder the ordinary expenses because he is the one in possession of the property. Ordinary expenses = expenses incurred through the ordinary wear and tear of the property. Q: Who will shoulder the extraordinary expenses? A: The naked owner because he will be the one who will be benefited. If the usufruct would advance the extraordinary expenses, he has the right to demand for reimbursement from the naked owner.

Atty. Lopez-Rosario Lectures

Obligations of a usufructuary at the expiration of the usufruct 1. To return the property unless there is right of retention = extraordinary expenses 2. To pay interest or the amount spent by the owner of extraordinary repairs (Art. 594) or taxes on the capital (Art. 597). 3. To indemnify owner for loss due to negligence of usufructuary or transferee. XPN: Right of Retention given to a BPS in good faith (Necessary Expenses) In this kind of contract it does not involve necessary expenses but extraordinary which should be shouldered by the naked owner. The same right is given to a usufructuary, he has the right of retention which will serve as security that the naked owner will reimburse him of the extraordinary expenses that he incurred. Although he has the obligation to return the property of the same kind, that obligation will not be immediately complied with if he exercises the right of retention in relation to the extraordinary expenses he incurred. To pay interest in the amount spent by the owner for the extraordinary repairs and to indemnify owner for losses due to negligence of usufructuary. Q: What is the reckoning point where the usufructuary is entitled to the fruits of the property? (Art. 567) A: growing fruits at the time the usufruct begins = belongs to usufructuary At the moment of the commencement of the usufruct. Q: What about if usufruct terminated? A: Will go to the naked owner already

Causes for Extinguishment of Usufruct: Waiver Expiration/loss of property Resolution/termination of the right to constitute usufruct Expropriation Prescription Merger Expiration of period/fulfilment of the resolutory condition Death Q: Can a usufructuary alienate his rights to the usufruct? A: Yes. He can alienate his right to the usufructuary. In accordance with Art. 577.


Property Notes A.Y. 2011-2012

Q: What are the obligations of the naked owner? A: Naked owner must return to usufructuary all the ordinary expenses incurred for the seeds, the preparation of those fruit bearing trees. Refund/reimbursement of the naked owner only at the time of expiration Reason: because at the time the usufruct ceases, if trees do not bear fruit but only flowers, the one who is benefited is naked owner. Principle of unjust enrichment The naked owner is the one who eats the fruits, he needs to pay whatever expenses incurred by the usufructuary. That is the only time when usufructuary can demand reimbursement for the ordinary expense. But generally, ordinary expenses should be shouldered by the usufructuary.

Atty. Lopez-Rosario Lectures

Q: What will happen to the contract of lease if the contract of usufruct is already terminated? A: The contract of lease will terminate upon the termination of the contract of usufruct. Q: We said that a usufruct is extinguished upon the death of the usufructuary, is it automatic extinguishment? A: As a Gen. Rule - Death of the usufructuary will not terminate the usufruct because as we all know, is it a REAL RIGHT. It attaches to property, therefore death of the usufructuary will no automatically extinguish the usufruct. XPN: if there is a contrary stipulation in the contract.

Moralidad vs. Pernez SC: Usufructuary is nothing else but simply allowing one to enjoy anothers property temporarily Right to use Right to enjoy Right to possess With the owner retaining the right to dispose/power to alienate. Art. 579-580-BPS-usufructuary Do not have the right for reimbursement for the improvement he had introduced in the property usufructuary might depose owner of his property. e.g. usufructuary, builds a building in the first place he knows that it is not his, according to SC, he is not entitled to reimbursement. Q: What can the usufructuary do? A: He may remove them without damage to property Q: Is usufructuary builder in Good faith? A: No. He knows from the start that he does not own the property. He cannot be considered a builder in Good faith. Q: If the usufructuary wants to have the property leased, is consent from the Naked Owner necessary? A: NO CONSENT needed. One of the rights of a usufruactuary is to enjoy the fruits.