RULES WHEN THE OWNER OF THE LAND IS THE BUILDER/PLANTER/SOWER AND HE

USES MATERIALS BELONGING TO ANOTHER [ART. 447, CIVIL CODE]

LANDOWNER (LO) - OWNER OF MATERIALS(OM)

BUILDER/PLANTER/SOWER (BPS)
A. Good Faith Good Faith

Can acquire the materials by paying their Entitled to payment for the value of the
value [Art. 447] materials OR he may remove the
materials if he can do so without injury to
the work constructed
B. Bad Faith Good Faith

Can acquire the materials by paying their Entitled to payment for the value of the
value plus damages materials plus damages OR he may
remove the materials even if there is
injury to the work constructed plus
damages
C. Good Faith Bad Faith

Can acquire the materials without paying Loses the materials completely without
for their value and is entitled to receiving any indemnity
consequential damages due to the defects
in the materials
D. Bad Faith Bad Faith

As if they are both in good faith (Apply A)

ATTY. RHETT EMMANUEL C. SERFINO

RULE WHEN THE BUILDER/PLANTER/SOWER BUILD, PLANTS, OR SOWS ON THE LAND
OF ANOTHER [ART. 448-454, CIVIL CODE]

LANDOWNER (LO) BUILDER/PLANTER/SOWER (BPS)

A. Good Faith Good Faith

Option #1

to appropriate as his own the works, To receive the indemnity provided for in
sowing or planting, after payment of the articles 546 and 548 and he has a right to
indemnity provided for in articles 546 and retain the land (without having to pay
548 (the indemnity includes the value of rent) until the Landowner pays
what has been built, planted, or sowed
and the value of the materials): Can remove the useful improvements
provided it does not cause any injury
▪ necessary expenses
▪ useful expenses If the LO does not choose to appropriate
▪ luxurious expenses (if the LO the luxurious improvements, he can
wishes to appropriate the same) remove the luxurious improvements
provided it does not cause any injury to
the principal thing
Option # 2

to oblige the one who built or planted to
pay the price of the land (except when its
value is considerably more than that of the
building or trees), and the one who sowed,
the proper rent
To buy the land (at fair market value
when the value is not considerably more
than the value of the buildings or trees)
or, in case of sowing, the proper rent
If the value of the land is considerably
more than the value of the building or
trees, he cannot be compelled to buy the
land, but shall pay reasonable rent if the
LO does not choose Option # 1

If he cannot pay the purchase price of the

land, the LO can require him to remove
what has been built or planted

If he cannot pay the rent, the LO can eject

him from the land

ATTY. RHETT EMMANUEL C. SERFINO

 LANDOWNER (LO) BUILDER/PLANTER/SOWER (BPS)
B. Good Faith Bad Faith

Option #1

To acquire whatever has been built,
planted, or sown without paying
indemnity
(except for necessary expenses) [Art.
449]. He must also pay for the value of
expenses for pure luxury if he wants to
appropriate these.
Loses what has been built, planted or sown
but he is entitled to indemnity for
necessary expenses (without any right of
retention); and expenses for pure luxury
should the LO appropriate these items
Has no right of reimbursement for useful
expenses and cannot remove useful
expenses even if no injury will be caused
thereby

Not entitled to reimbursement for

luxurious expenses except when LO
acquires these improvements by paying
their value, which is the one at the time the
LO enters possession

Can remove luxurious improvements if it

will not cause injury and LO does not want
to acquire these.
Option # 2

To oblige the BP to pay the price of the To pay the price of the land
land and the S to pay proper rent [Art. (even if the value of the land is
450] considerably higher) plus damages

He is entitled to damages [Art. 451]

Option # 3

Demand the demolition of the work, or Has to demolish or remove plus pay
that the planting or sowing be removed, damages
in order to replace things in their former
condition at the expense of the person
who built, planted or sowed [Art. 450]

He is entitled to damages

ATTY. RHETT EMMANUEL C. SERFINO

 LANDOWNER (LO) BUILDER/PLANTER/SOWER (BPS)
C. Bad Faith Good Faith

To acquire what has been built, planted To receive indemnity from the LO and
or sown by paying the indemnity and damages
damages to BPS [Art. 454 in relation to
Art. 457] If LO does not acquire, he can remove
whatever has been built or planted
whether or not it will cause injury plus
damages

Cannot insist that BPS purchase the land

D. Bad Faith Bad Faith

Same as if both are in good faith Same as A

ATTY. RHETT EMMANUEL C. SERFINO

 RULES WHEN THE OWNER OF THE LAND, THE BUILDER/PLANTER/SOWER, AND THE
OWNER OF THE MATERIALS ARE DIFFERENT PERSONS [ARTICLES 447, 455,456, CIVIL
CODE]

LANDOWNER (LO) BUILDER/PLANTER/SOWER OWNER OF THE

(BPS) MATERIALS (OM)
A. Good Faith Good Faith Good Faith

Option #1

to appropriate as his own To receive the indemnity To receive indemnity from

the works, sowing or
planting, after payment of
the indemnity provided for
in articles 546 and 548 (the
indemnity includes the
value of what has been
built, planted, or sowed
and the value of the
materials) [Arts. 447 and
448]
provided for in articles 546
and 548 and he has a right
to retain the land until the
Landowner pays
the BPS who is primarily
liable. If BPS has no
property with which to pay,
he can demand indemnity
from LO who is subsidiarily
liable [Art. 455], but he has
no right of retention
against BPS, and against LO

Option # 2

to oblige the one who built To buy the land or, in case To receive indemnity only
or planted to pay the price of sowing, the proper rent from the BPS (LO no longer
of the land (except when its subsidiarily liable having
value is considerably more sold the property)
than that of the building or
trees), and the one who ~ or ~
sowed, the proper rent
to remove the materials if
he can do so without injury
to the work constructed, or
without the plantings,
constructions or works
being destroyed
B. Good Faith Good Faith Bad Faith

Same as A Same as A Whatever option the LO

exercises, OM:
1. Loses the materials in
favor of BPS, and
2. He has no right to
indemnity from the BPS nor
the LO
ATTY. RHETT EMMANUEL C. SERFINO
 LANDOWNER (LO) BUILDER/PLANTER/SOWER OWNER OF THE
(BPS) MATERIALS (OM)
C. Good Faith Bad Faith Bad Faith

Option #1

To acquire whatever has Loses what has been built, (Since both the BPS and
been built, planted, or planted or sown but he is OM are in bad faith, they
sown without paying entitled to indemnity for are treated as being both in
indemnity necessary expenses; and good faith)
(except for necessary expenses for pure luxury
expenses) [Art. 449]. He should the LO appropriate Whatever is the choice of
must also pay for the value these items the LO, he has a right to
of expenses for pure luxury receive indemnity for the
if he wants to appropriate Has no right of removal value of the materials from
these. even if no injury will be the BPS (LO has no liability
caused whatsoever)

He has no right of removal

even if no injury will be
caused
Option # 2

To oblige the BP to pay the To pay the price of the land He has a right to receive
price of the land and the S (even if the value of the indemnity for the value of
to pay proper rent [Art. land is considerably higher) the materials from the BPS
450] (LO has no liability)

He is entitled to damages He has a right of removal

[Art. 451] provided no injury is caused
Option # 3

Demand the demolition of Has to demolish or remove Liable for damages to

the work, or that the whoever ends up owning
planting or sowing be the materials for their
removed, in order to inferior quality
replace things in their
former condition at the
expense of the person who
built, planted or sowed
[Art. 450]. He is entitled to
damages
ATTY. RHETT EMMANUEL C. SERFINO
 LANDOWNER (LO)
D. Bad Faith
To acquire what has been
built, planted or sown by
paying the indemnity and
damages to BPS [Art. 454 in
relation to Art. 447]
E. Bad Faith
Same as D
ATTY. RHETT EMMANUEL C. SERFINO
BUILDER/PLANTER/SOWER OWNER OF THE
(BPS) MATERIALS (OM)
Good Faith Good Faith
To receive indemnity from To receive indemnity for
the LO and damages the value of the materials
primarily from BPS; if the
Cannot insist that he BPS is insolvent, LO would
purchase the land be subsidiarily liable
Can remove the materials
even if injury is caused
thereby
Good Faith Bad Faith
Same as D No right to receive
indemnity for value of
materials from BPS nor
from LO who ends up
owning the building or
trees
 RULES IN ACCESSION CONTINUA AS TO MOVABLES

ADJUNCTION/CONJUNCTION

IF THE THINGS UNITED CAN BE SEPARATED WITHOUT INJURY

OWNER OF PRINCIPAL THING OWNER OF ACCESSORY

Regardless of Good or Bad Faith Regardless of Good or Bad Faith

Can demand for separation of the things Can demand for separation of the things
[Art. 469]

Owner who caused union shoulders the

expenses of separation

IF THE THINGS UNITED CANNOT BE SEPARATED WITHOUT INJURY

OWNER OF PRINCIPAL THING OWNER OF ACCESSORY
Good Faith Good Faith

Acquires the accessory, indemnifying the Entitled to indemnity

owner of the accessory for its value
He can demand that he be paid by:

1. Delivery of thing equal in kind and

value, and in all other respects to
the accessory acquired by owner
of principal thing; or

2. The price of the accessory thing

Exception:

If the accessory is much more precious Can demand separation of the accessory
than the principal thing thing, even though principal may suffer
some damage
Good Faith Bad Faith

Acquires the accessory and can demand Loses the thing incorporated plus
damages obligation to pay damages

ATTY. RHETT EMMANUEL C. SERFINO

Bad Faith Good Faith

Has the option of:

Can acquire the accessory by paying 1. Demand that owner of principal

indemnity plus damages thing pay him value of accessory
plus damages

2. Demand the separation of the

accessory from the principal (even
if principal thing should be
destroyed thereby) plus damages
Bad Faith Bad Faith

(As if both in good faith, apply rules in 1st

situation)

Tests to determine which is the principal thing (apply consecutively)

1. Intent – that which the other is attached to as the ornament, or for its use, or
perfection (regardless of value or volume) is the principal;
2. Value – the thing of greater value is the principal
3. Volume - the thing of greater volume is the principal
4. Comparative merits, utility and volume

Mixture (commixtion – solids; confusion – liquids)

Intentionally allows mixture Intentionally allows mixture

By chance By chance

Good Faith

Becomes a co-owner of the resultant Becomes a co-owner of the resultant

mixture in proportion to the part mixture in proportion to the part
belonging to him, based on volume and belonging to him, based on volume and
value value
Good Faith Bad Faith

Acquires the thing belonging to owner in Loses the thing belonging to him plus has
bad faith plus can demand damages the obligation to pay damages

ATTY. RHETT EMMANUEL C. SERFINO

SPECIFICATION
USER OF MATERIALS OWNER OF MATERIALS
Good Faith Good Faith

Acquires the thing transformed, Entitled to indemnity

indemnifying the owner of the materials
for its value

Exception: At his option:

If the accessory is much more precious 1. Appropriate the new thing by

than the principal thing paying for the value of the work

2. Demand that the user pay for the

materials
Bad Faith Good Faith

Loses his work plus has the obligation to At his option:

pay damages
1. Appropriate the work plus can
Exception: If value of the work, for demand for damages
scientific or artistic reasons, is considerably
more than that of the material (Option to appropriate cannot be
availed of if value of the work, for
scientific or artistic reasons, is
considerably more than that of
the material)

2. Demand that user pay for the

materials plus damages
Good Faith (not covered by the rules) Bad Faith

Acquires the work plus may demand for Loses the materials plus obligation to pay
damages for damages (due to defective materials)
Bad Faith Bad Faith

As if both in good faith, apply rules in first

situation

ATTY. RHETT EMMANUEL C. SERFINO

 PROPERTY

RIGHT OF A POSSESSOR TO THE FRUITS

KIND OF FRUITS POSSESSOR IN GOOD POSSESSOR IN BAD FAITH
FAITH
Natural/Industrial
a) Gathered (at the Has a right to retain the Must reimburse the
time possession is fruits [Art. 544] legitimate possessor the
legally interrupted) value of:
a) the fruits received
b) those which could have
been received with the
exercise of due care
and diligence [Art. 549]

Must pay damages

amounting to a reasonable
rent for the term of the
possession

Less: Expenses for

production, gathering, and
preservation [Art. 443]

b) Pending (at the time Owner’s Option: No right whatsoever (see

possession is legally a) Pro-rata sharing in the Art. 449)
interrupted) i. expenses
ii. net harvest, and Must pay damages
iii. charges amounting to a reasonable
(in proportion to the rent for the term of the
time of possession) possession
b) allow the possessor in
good faith the right to
finish the cultivation and
gathering of the growing
fruits as indemnity for
his expenses (should the
possessor in good faith
refuse, for whatever
reason, he loses the
right to indemnity) [Art.
545]

ATTY. RHETT EMMANUEL C. SERFINO

Civil Fruits Entitled to fruits pertaining Not entitled to the fruits
to the period from the start
of the possession until it is Must pay damages
legally interrupted (accrues amounting to a reasonable
daily) [Art. 544] rent for the term of the
possession

ATTY. RHETT EMMANUEL C. SERFINO

RIGHT OF A POSSESSOR TO EXPENSES (NECESSARY, USEFUL, LUXURIOUS) AND TO THE
DETERIORATION AND LOSS

KIND OF FRUITS POSSESSOR IN GOOD POSSESSOR IN BAD FAITH

FAITH
1. Necessary Expenses 1. Reimbursement 1. Reimbursement

2. Right of retention until 2. No right of retention; he

he has been reimbursed has to vacate the
therefor [Art. 546] (set property immediately
forth as a counterclaim (his remedy is to file an
in an action filed against action to collect the
him by the owner for the amount of necessary
recovery of the expenses)
property)

2. Useful Expenses At the option of person No right whatsoever [see

who recovers possession: 2nd par., Art. 546]

1. Reimbursement by:

a. refunding the amount

of expenses, or
b. paying the increase in
value which the thing
may have acquired
c. right of retention until
he has been
reimbursed therefor
[Art. 546] (set forth as
a counterclaim in an
action filed against him
by the owner for the
recovery of the
property)

2. Allow the possessor to

remove them, if they
can be removed without
damage to the principal
thing [Art. 547]

3. Luxurious Expenses At the option of person At the option of person

who recovers possession: who recovers possession:

1. Refunding the amount 1. Retain them by paying

ATTY. RHETT EMMANUEL C. SERFINO

 expended, or the value they may have
at the time he enters
2. Allow the possessor to into possession
remove them, if they
can be removed without 2. Allow the possessor to
injury to the principal remove them, if they
thing [Art. 548] can be removed without
injury to the principal
thing [Art. 549]

4. Deterioration/Loss No liability except in cases Always liable, even if

in which it is proved that he caused by fortuitous event
has acted with fraudulent [Art. 552]
intent or negligence, after
the judicial summons [Art.
552]

ATTY. RHETT EMMANUEL C. SERFINO

 RECOVERY OF POSSESSION OF A MOVABLE

GENERAL RULE: Theory of Irrevindicability – the possession of movable property

acquired in good faith is equivalent to title
(Note: the possessor’s title is merely a
presumptive title sufficient to serve as basis
for acquisitive prescription)

A. Owner may recover WITHOUT REIMBURSEMENT:

1. If possessor is in bad faith;

2. Even if possessor is in good faith, if he LOST the property or has been
UNLAWFULLY DEPRIVED thereof. (Art. 559)

B. Owner may recover but MUST REIMBURSE:

1. If possessor has acquired it in good faith at a public sale

C. Owner cannot recover, even if HE OFFERS TO REIMBURSE (whether or not he LOST

the property or has been UNLAWFULLY DEPRIVED thereof):

1. If possessor purchased the property in good faith in a merchant’s store, or in

fairs, or markets (see Art. 1505, Civil Code; Art. 85 & 86, Code of Commerce)
2. If owner is, by his conduct, precluded from denying the seller’s authority to sell
(Art. 1505)
3. If possessor, through negotiation, has obtained a negotiable document of title to
goods by paying its value in good faith without notice of the breach of duty, or
loss, theft, fraud, accident, mistake, duress or conversion (see Art. 1518)

ATTY. RHETT EMMANUEL C. SERFINO

 USUFRUCT DISTINGUISHED FROM OTHER CONTRACTS

While ownership has for its attributes the right to enjoy (jus utendi, jus fruendi, jus
abutendi), the right to dispose (jus disponendi), and the right to vindicate or recover the
property (jus vindicandi), usufruct is limited merely to the enjoyment of the property
(jus utendi and jus fruendi)

USUFRUCT DISTINGUISHED FROM LEASE

BASIS USUFRUCT LEASE
1. Extent As a rule covers all fruits and uses Generally covers only a particular
or specific use

2. Nature of Always a real right Is a real only if, in case of real

the right property, the lease is registered,
or is for more than one year,
otherwise it is only a personal
right
3. Creator of Created only by the owner, or by a Lessor may or may not be the
the right duly authorized agent, acting on owner, as in the case of a
behalf of the owner sublease or when the lessor is
only a usufructuary

4. Origin May be created by law, by contract, As a rule, may be created only by

by last will and testament, or contract, and, by way of
prescription exception, by law, as in case of an
implied new lease (Art. 1670) or
when a builder in good faith
builds a building on land which is
considerably more in value than
the building (see Art. 448)
5. Cause The owner is more or less passive in The owner or lessor is more or
allowing the usufructuary to enjoy less active and he makes the
the thing given in usufruct (deja lessee enjoy the property (hace
gozar) gozar)
6. Repairs The usufructuary has the duty to Generally the lessee has no duty
make ordinary repairs to pay for repairs
7. Taxes The usufructuary pays for the annual Generally, the lessee pays no
charges and taxes on the fruits taxes, unless contractually agreed
upon
8. Other A usufructuary may lease the The lessee cannot constitute a
matters property itself to another usufruct on the property leased

ATTY. RHETT EMMANUEL C. SERFINO

USUFRUCT DISTINGUISHED FROM EASEMENT
Usufruct Easement
Covers both real and personal property Applies only to real property
All uses and fruits can be enjoyed Limited to a particular use
Cannot be constituted on an easement, Can be constituted on a land held in
but it can be constituted on a land usufruct
burdened by an easement
Usually extinguished by the death of the Not extinguished by death of the owner of
usufructuary the dominant estate

USUFRUCT DISTINGUISHED FROM COMMODATUM

USUFRUCT COMMODATUM
Covers both real and personal property Applies only to personal property
Usufructuary has rights to the fruits Bailee has no rights to the fruits (see Art.
1935)
May be gratuitous or onerous Always gratuitous (Art. 1935)
Must always be constituted by the owner Bailor need not be the owner as long as he
has a legal right to possess the object (Art.
1938)
Can be constituted on consumables and Can be constituted only on non-
non-consumables consumables, except when it is only for
exhibition (Art. 1936)

ATTY. RHETT EMMANUEL C. SERFINO