1 2 PROPERTY
[1.2] Concept of “Things”
BOOK II
PROPERTY, OWNERSHIP, AND ITS
MODIFICATION
Title I. CLASSIFICATION OF PROPERTY
PRELIMINARY PROVISIONS
ARTICLE 414. All things which are or may be the object of appro-
priation are considered either:
(1) Immovable or real property; or
(2) Movable or personal property. (333)
§ 1. Introductory Concepts
[1.1] Origin of the Word “Property”
The word “property” is derived from the Latin word proprius,
meaning belonging to one or one’s own.1 Traditionally, therefore, the
concept of property extends only to those things which are already
possessed and found in the possession of man.2 Hence, in the traditional
notion, the concept of property is inseparable from the relation which
the object has with the person exercising dominion or right over it. It is
in this sense that the concept of property is said to be limited compared
to the concept of things, which extends to all objects that exist,3 whether
it is already in the possession of man or not.
1
Miss. — Thompson v. Kreutzer, 72 So. 891, 112 Miss. 165.
2
2 Falcon 6, 3 Manresa 10, cited in II Tolentino, Civil Code of the Philippines, 1992 ed.,
2.
3
II Tolentino, Civil Code of the Philippines, 1992 ed., 2.
1 4
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Preliminary Provisions
[1.3] Concept of “Property” under the Civil Code
As discussed in supra § 1.1, the traditional notion is that property
are those things which are already possessed and found in the possession
of man. However, in our Civil Code, the concept of property is not
confined to things which are already appropriated or possessed by man
but also extends to those susceptible of such appropriation, although
not yet appropriated. This is clear from the provisions of Article 414
which classifies as property “all things which are or may be the object
of appropriation.” From the viewpoint of the Code, therefore, the terms
“property” and “things” are identical to each other and may be used
interchangeably.5
[1.4] Susceptibility to Appropriation
As mentioned in supra § 1.2, the term “property” under the Civil
Code refers to things which are susceptible of appropriation. Hence,
even in the juridical sense, not all things may be considered as property.
This much is clear from the very provision of Article 414 of the New
Civil Code. Pursuant to said article, it is essential that a thing must be
susceptible of appropriation before it can be considered as property.
Things which cannot, therefore, be subjected to human control by
reason of sheer physical impossibility are not considered as property.
Examples are the following:
(1) Things which, because of their distance, their depth or their
immensity are not capable of human control such as the sun, the stars
and the ocean, are not properties;
(2) Ordinarily, forces of nature such as lightning and rain are not
properties because of impossibility of appropriation in their diffused
state. However, when they are brought under human control through the
help of science, i.e., electricity, they may now be regarded as property.6
For the purpose of classifying things as property, the criterion of
susceptibility to appropriation should be distinguished from the concept
of things or objects which are “outside the commerce of man.” While
things which are outside the commerce of man may not be the object of
5 7
See II Caguioa, Civil Code of the Philippines, 1966 ed., 3.
6 8
See Art. 416(3), NCC.
The concept of “property” (bienes) is intimately related with the
concept of “things” (cosa). It must be noticed that the Civil Code does
not define the term property but simply implies that the concept refers
to things which are susceptible of appropriation.4 With the foregoing
in mind, it is but proper to begin the discussion of property with the
concept of “things.”
There was a time in history when certain persons, called “slaves,”
were considered merely as chattels or things that could be the subject
of appropriation. But as human civilization progressed, the practice of
slavery has been condemned and eventually eradicated. In the modern
world, therefore, distinction is made between persons and things. The
former is regarded as the subject or the holder of rights while the latter
is its object, although the actions of the former may likewise be the
object of rights. Thus, while the human person may not be considered
as property, his conduct or acts, to a certain extent, may give rise to
enforceable rights in favor of other persons if such act or conduct is
considered by law as a source of obligation.
Things, therefore, are objects external to man. But the concept
of things under the Civil Code is not limited to corporeal objects —
or to objects that can be perceived by the senses. The concept also
extends to those which have only an intellectual or juridical existence
(incorporeal objects). Otherwise stated, the concept of things in our
Civil Code embraces both material objects and rights. This is clear from
the provisions of Articles 414, 415 and 416 of the New Civil Code.
To illustrate, in Article 414, the law considers all things susceptible
of appropriation as property, which may either be real or personal. In
Articles 415 and 416, on the other hand, rights are likewise considered as
property. This is exemplified in the provision of paragraph 10 of Article
415 which classifies as real property those “real rights over immovable
property” and in the provision of paragraph 1 of Article 417 of the
New Civil Code which classifies as personal property “obligations and
actions which have for their object movables or demandable sums.”
See Art. 414, NCC.
3 4 PROPERTY
a contract,7 they are not necessarily disqualified from being considered
as property pursuant to the criterion mentioned in Article 414 of the
Code. For example, properties of public dominion pertaining to the
State, being outside the commerce of man, cannot be the object of
contracts. However, they are considered property under the Code.8
[1.5] Additional Requisites
Aside from the criterion of susceptibility to appropriation
mentioned in Article 414, most authors in the subject provide for two
additional requisites before considering a thing as property: (1) utility, or
that it can serve as a means to satisfy human needs; and (2) substantivity
or individuality, or that the thing must have an autonomous and separate
existence.
With respect to the requisite of utility, it is inconceivable at this
age to think of a thing which is incapable of satisfying any human need
or want. As such, this requirement is of little use in law because almost
all things are capable of giving utility to man.
The requisite of individuality, on the other hand, need not be
spelled out separately for the same is implicitly required in Article 414
of the Code. Thus, to be considered a separate property, a thing must
have an autonomous and separate existence and not simply a part of a
whole. But if a part is separated from the whole and, while in that state, is
capable of satisfying any human need or want, it can then be considered
as a separate property. This is the basis, for example, of the rule stated
in Article 466 of the New Civil Code which states that “whenever two
movable things belonging to different owners are, without bad faith,
united in such a way that they form a single object, the owner of the
principal thing acquires the accessory, indemnifying the former owner
thereof for its value.” Hence, when a diamond stone is attached to a
ring, the ring and the stone constitute a single property since they now
form a single object. However, when the stone is removed from the ring
it will be regarded as a separate property from the ring to which it has
once been attached.
See Art. 1347, NCC.
See Arts. 419 to 425, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Preliminary Provisions
The same can be said of the different parts of the living human
body. While these parts remain attached to the person, they are not
considered as property because they are integral parts of the person and
the latter is not, in law, considered as thing. However, when a part of
the human body, such as hair and teeth, is separated from the person, it
may now be considered as property for it now has an autonomous and
independent existence.
§ 2. Classification of Property
[2.1] Classification under Book II of the Civil Code
Although there are many classifications of property, Book II of
the New Civil Code enumerates the more important classifications, as
follows:
(1) Immovable or movable (Arts. 415 to 417);
(2) Movables, in turn, are classified into consumable or non-
consumable (Art. 418);
(3) From the viewpoint of ownership, property is classified
either as property of public dominion or of private ownership (Arts. 419
to 425).
It is obvious from Article 414 that the term “immovable” is used
synonymously with the term “real” property and the term “movable” is
used synonymously with the term “personal” property.
[2.2] Importance of Classification
The classification of property in Article 414 into immovable
(real) and movable (personal) is based on the nature of the thing itself
and is the most important in point of law because of the various legal
consequences flowing therefrom, as follows:
[2.2.1] For purposes of applying the rules of acquisitive
prescription: The ownership of movables prescribes
through uninterrupted possession for four years in good
faith or through uninterrupted possession for eight years,
without need of any other condition.9 Ownership and other
9 18
Art. 1132, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Immovable Property
[2.2.6] For purposes of determining the venue in remedial
law: In the law of procedure, it is important to know the
classification of property for purposes of venue. If the
action affects title to or possession of real property, or
interest therein, the action (referred to as “real action”)
must be filed in the proper court wherein the real property
involved, or a portion thereof, is situated.19 All other actions
(referred to as “personal action”) may be commenced and
tried where the plaintiff or the defendant resides, at the
election of the plaintiff.20
*****
Chapter 1
IMMOVABLE PROPERTY
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 ornamen-
tation, 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 car-
ried 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 breed-
ing places of similar nature, in case their owner has placed them or pre-
serves 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;
19
Rule 4, Section 1, 1997 Rules of Civil Procedure.
20
Rule 4, Section 2, 1997 Rules of Civil Procedure.
5 6 PROPERTY
real rights over immovable property, on the other hand,
are acquired by ordinary prescription through possession
of ten years10 or thirty years, without need of title or of
good faith.11
[2.2.2] In determining the propriety of the object of the
contracts of pledge, chattel mortgage and real estate
mortgage: Only movables can be the object of the
contracts of pledge and chattel mortgage.12 On the other
hand, only immovables can be the object of a real estate
mortgage contract.13 As a consequence, should the parties
execute a chattel mortgage over a real property, the same
is null and void and registration of the instrument in the
Registry of Property does not validate it insofar as third
parties are concerned.14
[2.2.3] For purposes of determining the formalities of a
donation: If the value of the personal property donated
exceeds P5,000.00, the donation and the acceptance are
required to be in writing; otherwise, the donation is void.15
In order that the donation of an immovable property may
be valid, it must be made in a public document, as well as
the acceptance thereof.16
[2.2.4] In extrajudicial deposit: Only movable things may be
the object of extrajudicial deposit.17
[2.2.5] In crimes of theft, robbery and usurpation: Only
personal property can be the object of the crimes of theft
and robbery.18 However, the crime of usurpation defined in
Article 312 of the Revised Penal Code can be committed
only with respect to a real property.
10
Art. 1134, NCC.
11
12
Art. 1137, NCC.
Arts. 2094 and 2140, NCC.
13
Art. 2124, NCC.
14
Associated Insurance & Surety Co., Inc. v. Iya, 103 Phil. 972 (1958).
15
Art. 748, NCC.
16
Art. 749, NCC.
17
Art. 1966, NCC.
Art. 308, RPC.
7 8 PROPERTY
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries and slug 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. (334a)
§ 3. Immovable Property
[3.1] No Definition under the Code
Article 415 of the New Civil Code does not define immovable or
real property but enumerates what are considered as such.21 This is so
because of the difficulty of drawing precisely a definition of this term
simply because the word is not used in its etymological or grammatical
meaning but in its juridical meaning, i.e., the term is applied to many
things which, although by nature are personal, are considered by law as
real. Consequently, to avoid difficulty the law simply goes by way of
enumeration.22
[3.2] Kinds of Immovable (Real) Property
Immovable or real property may be reduced to four general classes
or kinds, notwithstanding the enumerations in Article 415, to wit:
[3.2.1] Immovable by nature — those which by their
essence and nature are immovable or cannot be
moved from one place to another, such as lands
and roads in paragraph 1 of Article 415 and mines,
quarries and slug dumps in paragraph 8 of Article
415;
[3.2.2] Immovable by incorporation — those which are
treated as immovable by reason of their attachment
or incorporation to an immovable in such manner
as to be an integral part thereof, such as buildings
and constructions of all kinds adhered to the soil
21
People’s Bank and Trust Co. v. Dahican Lumber Company, 20 SCRA 84, 93 (1967).
22
3 Manresa, 6th Ed., 16, cited in II Caguioa, Civil Code, 1966 ed., 11.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Immovable Property
mentioned in paragraph 1 of Article 415; trees,
plants and growing fruits mentioned in paragraph
2 of Article 415 while they are still attached to the
land or form an integral part of an immovable;
and those that are attached to an immovable in
the manner provided for in paragraph 3 of Article
415;
[3.2.3] Immovable by destination — those which are
essentially movable, but by the purpose for which
they have been placed in an immovable, partake
of the nature of the latter because of the added
utility derived therefrom, such as those mentioned
in paragraphs 4, 5, 6, 7 and 9 of Article 415; and
[3.2.4] Immovable by analogy or by law — those that
are mentioned in paragraph 10 of Article 415.
§ 4. Real Property under Article 415(1)
“Lands, buildings, roads and constructions of all kinds adhered
to the soil …”
(A) Lands and Roads
[4.1] Lands and roads
There is no question that lands and roads are always immovable.
By their nature, they are considered as immovable or real property.
(B) Buildings
[4.2] Building Is Immovable By Incorporation
A house (or a building) is immovable by incorporation.23 As
explained in Bicerra v. Teneza,24 a house (or a building) is classified as
immovable property by reason of its adherence to the soil on which it
is built. Thus, a building which is merely superimposed on the soil is
not a real property.25 When paragraph No. (1) of Article 415 of the New
Civil Code classifies buildings as immovables, the building referred
23
Ladera v. CN Hodges, (CA), 48 O.G. 5374, 5379 (1952).
24
6 SCRA 649, 651 (1962).
25
Bautista v. Supnad, (CA), 59 O.G. 1575 (1962).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Immovable Property
Punzalan, Jr. v. Vda. De Lacsamana
121 SCRA 331 (1983)
In this case, Punzalan mortgaged with PNB a parcel of land situated in
Tarlac which was eventually foreclosed by PNB in 1970. However, the bank
secured title thereto only in 1977. In the meantime, while the property was still
in the possession of Punzalan, he constructed thereon in 1974 a warehouse
allegedly with the permission of PNB. In 1978, PNB sold the land, including
the building thereon, to Vda. de Lacsamana. Thus, Punzalan filed an action
to annul the sale with respect to the building. He filed the action in Quezon
City. The court dismissed the action on the ground of improper venue because
the action is for recovery of a real property. The court ruled that the venue
should have been Tarlac. In sustaining the decision of the lower court, the
Supreme Court ruled that “the warehouse claimed to be owned by (Punzalan)
is an immovable or real property as provided in Article 415(1) of the Civil
Code” and that “buildings are always immovable under the Code.” The Court
further ruled that “the prevalent doctrine is that an action for the annulment or
rescission of a sale of real property does not operate to efface the fundamental
and prime objective and nature of the case, which is to recover said real
property. It is a real action.”
[4.3.1] Rule is not affected by the fact that the building is treated
separately from the land
A building treated separately from the land on which it stood is
immovable property and the mere fact that the parties to a contract seem
to have dealt with it separate and apart from the land on which it stood
in no wise changed its character as immovable property.31 It is obvious
that the inclusion of the building, separate and distinct from the land, in
the enumeration of what may constitute real properties (in Article 415
of the New Civil Code) could only mean one thing — that a building is
by itself an immovable property, a doctrine already pronounced by the
Supreme Court as early as the case of Leung Yee v. Strong Machinery
Co.32 Thus, while it is true that a mortgage of land necessarily includes,
in the absence of stipulation, the improvements thereon, still a building
by itself may be mortgaged apart from the land on which it has been
built.33 Such a mortgage would still be a real estate mortgage for the
31
Punzalan, Jr. v. Vda. de Lacsamana, supra, 335-336; citing Leung Yee v. Strong Machin-
ery Co., 37 Phil. 644 (1918).
32
Lopez v. Orosa, Jr. and Plaza Theatre, Inc., 103 Phil. 98, 105 (1958); cited in Prudential
Bank v. Panis, 153 SCRA 390, 396 (1987).
33
Prudential Bank v. Panis, supra, 396, citing Leung Yee v. Strong Machinery Co., supra.
9 10 PROPERTY
to is that which substantially adheres to the land and not one which
is merely superimposed on the soil. In the language of Justice J.B.L.
Reyes in Ladera v. CN Hodges,26 the building referred to under the law
is a “true building” or not one merely superimposed on the soil. Since a
house or a building is classified as immovable property by reason of its
adherence to the soil on which it is built, once the house is demolished it
ceases to exist as such and hence its character as an immovable likewise
ceases.27
Bicerra v. Teneza
6 SCRA 649 (1962)
In this case, the plaintiff filed an action before the Court of First Instance
(now RTC) of Abra alleging that the defendant forcibly demolished his house
and that the materials of the house, after it was dismantled, were placed in
the custody of the barrio lieutenant. Plaintiff prayed that he be declared the
owner of the house and/or materials and that defendant be ordered to pay him
damages in the total sum of P800. The CFI dismissed the action on the ground
that the same was within the exclusive original jurisdiction of the Justice of the
Peace of Court (now MTC), the action not being a real action. In sustaining the
dismissal of the complaint, the Supreme Court explained: “A house is classified
as immovable property by reason of its adherence to the soil on which it is built
(Art. 415, par. 1, Civil Code). This classification holds true regardless of the
fact that the house may be situated on land belonging to a different owner. But
once the house is demolished, as in this case, it ceases to exist as such and
hence its character as an immovable likewise ceases. It should be noted that the
complaint here is for recovery of damages.”
[4.3] Buildings Are Always Immovable
Buildings are always immovable under the Code.28 While there
is a holding to the effect that a building which is merely superimposed
on the soil or is sold for immediate demolition may be considered as
a movable or personal property,29 Justice J.B.L. Reyes clarified that the
rule that a building is immovable or real property has reference only to a
“true building” or one which is not merely superimposed on the soil.30
26
Supra, 5380.
27
Bicerra v. Teneza, supra, 651.
28
Punzalan, Jr. v. Vda. de Lacsamana, 121 SCRA 331, 335 (1983).
29
Bautista, et al. v. Supnad, (CA), 59 O.G. 1575, 1578 (1962).
30
Ladera v. C.N. Hodges, et al., (CA), 48 Off. Gaz., 5374, 5380 (1952); cited in Evangelista
v. Alto Surety & Ins. Co., Inc., 103 Phil. 401, 404 (1958).
11 12 PROPERTY
building would still be considered immovable property even if dealt
with separately and apart from the land.34
Prudential Bank v. Panis
153 SCRA 390 (1987)
In this case, the pivotal issue is whether or not a valid real estate mortgage
can be constituted on the building erected on the land belonging to another.
Answering in the affirmative, the Supreme Court explained —
“In the enumeration of properties under Article 415 of the
Civil Code of the Philippines, this Court ruled that, ‘it is obvious
that the inclusion of building separate and distinct from the land,
in said provision of law can only mean that a building is by itself
an immovable property.’ (Lopez v. Orosa, Jr., et al., L-10817-18,
Feb. 28, 1958; Associated Ins. and Surety Co., Inc. v. Iya, et al.,
L-10837-38, May 30, 1958)
Thus, while it is true that a mortgage of land necessarily
includes, in the absence of stipulation of the improvements thereon,
buildings, still a building by itself may be mortgaged apart from
the land on which it has been built. Such a mortgage would still
be a real estate mortgage for the building would still be considered
immovable property even if dealt with separately and apart from
the land (Leung Yee v. Strong Machinery Co., 37 Phil. 644). In
the same manner, this Court has also established that possessory
rights over said property before title is vested on the grantee, may
be validly transmitted or conveyed as in a deed of mortgage (Vda.
de Bautista v. Marcos, 3 SCRA 438 [1961]).”
[4.3.2] Rule is not affected by the fact that the building is erected on
a land owned by another person
The law makes no distinction as to whether or not the owner of
the land is or is not the owner of the building.35 Hence, a building is an
immovable property regardless of whether or not said structure and the
land on which it is adhered to belong to the same owner36 or whether
it is erected by the owner of the land or by a usufructuary or lessee.37
34
Id.
35
Ladera v. CN Hodges, 48 Off. Gaz., 5374, 5379; Makati Leasing and Finance Corp. v.
Wearever Textile Mills, 122 SCRA 296, 301 (1983).
36
Lopez v. Orosa, Jr. and Plaza Theater, Inc., supra, 105.
37
Ladera v. CN Hodges (CA), supra, 5380.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Immovable Property
A building certainly cannot be divested of its character of a realty by
the fact that the land on which it is constructed belongs to another.38 To
hold it the other way, the possibility is not remote that it would result
in confusion, for to cloak the building with an uncertain status made
dependent on the ownership of the land, would create a situation where
a permanent fixture changes its nature or character as the ownership of
the land changes hands.39
Ladera v. C.N. Hodges, et al. (CA)
48 Off. Gaz. 5374 (1952)
In this case, Ladera purchased from CN Hodges a parcel of land payable
in installments. After the execution of the contract, Ladera built on the lot a
house of mixed materials. When Ladera failed to pay the agreed instalments,
CN Hodges rescinded the contract and filed an action for ejectment. The court
thereupon rendered a decision upon agreement of the parties requiring Ladera
to vacate and surrender possession of the lot and to pay P10 a month until
delivery of the premises. Thereafter, the court issued an alias writ of execution
and the sheriff levied upon the house. The sheriff subsequently posted notices
of sale at auction but did not publish the same in a newspaper of general
circulation. The sale pushed through. Thereupon, Ladera filed an action to
set aside the sale. The trial court set aside the sale for non-compliance with
the requirement of publication (of the notice of sale) in judicial sales of real
property under the Rules of Court. CN Hodges appealed from the said decision
contending that the house, being built on land owned by another person, should
be regarded in law as movable or personal property. The Court of Appeals,
speaking thru Justice J.B.L. Reyes held that “a true building (not one merely
superimposed on the soil) is immovable or real property, whether it is erected
by the owner of the land or by a usufructuary or lessee.” Thus, the Court of
Appeals ruled that the lower court was right in concluding that, as the object of
the levy and sale was real property, the publication in a newspaper of general
circulation was indispensable and it being admitted that no such publication
was ever made, the execution sale was void.
Evangelista v. Alto Surety & Ins. Co., Inc.
103 Phil. 401 (1958)
In this case, Evangelista sued Rivera for collection of sum of money on
June 4, 1949. On the same date, he obtained a writ of preliminary attachment,
which was levied upon a house built by Rivera on a land owned by Alto Surety.
38
Associated Ins. & Surety Co., Inc. v. Iya, et al., 103 Phil. 972, 979 (1958).
39
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Immovable Property
[4.5] Doctrine of Estoppel; Navarro and Tumalad Cases
In Ladera v. CN Hodges,42 Justice J.B.L. Reyes explained that
the ruling in Standard Oil,43 De Jesus v. Guan Bee Co.,44 Evangelista
v. Abad,45 and Tomines v. San Juan,46 to the effect that “the parties to
a contract may by agreement treat as personal property that which by
nature would be a real property” is predicated on statements by the
owner declaring his house to be a chattel, a conduct that may conceivably
estop him from subsequently claiming otherwise.
This doctrine of estoppel was eventually applied by the Court in
Navarro47 and Tumalad48 cases. In these two cases, a chattel mortgage
contract was executed by the parties involving a house. Thereafter, the
mortgagors questioned the validity of the chattel mortgage so executed
on the ground that the subject matter thereof was not chattel but real
property. While it is true that only personal properties can be the subject
of a chattel mortgage49 and that the execution of a chattel mortgage
covering a real property (a building, for example) is invalid and a
nullity,50 the court need not resolve the issue of the validity of the chattel
mortgage in the cases of Navarro and Tumalad. As a consequence, there
is no need on the part of the court to rule on the character of the house
(or building) in these cases. Note that the cases of Navarro and Tumalad
can be resolved by simply applying the doctrine of estoppel which, in
fact, was what the Court did.
As applied in the above cases, the doctrine of estoppel not
only prohibits a party from assuming inconsistent positions but also
precludes him from repudiating an obligation voluntarily assumed after
having accepted benefits therefrom. To countenance such repudiation
would be contrary to equity and would put a premium on fraud or
misrepresentation. In other words, the Court did not rule in Navarro
and Tumalad that the subject chattel mortgage was valid and that the
42
Supra.
43
Supra.
44
Supra.
45
(CA) 36 O.G. 2913.
46
(CA) 45 O.G. 2935.
47
Navarro v. Pineda, 9 SCRA 631 (1963).
48
Tumalad v. Vicencio, 41 SCRA 143 (1971).
49
See Sec. 1, Act No. 3952.
50
Associated Ins. & Surety Co. v. Iya, 103 Phil. 972, 979 (1958).
13 14 PROPERTY
The levy was made pursuant to the rules governing the levy of real properties.
In due course, judgment was rendered in favor of Evangelista, who, on October
8, 1951, bought the house at the public auction made to satisfy the judgment.
The corresponding deed of sale was issued to him on October 22, 1952. When
Evangelista sought to take possession of the house, he was told that Alto Surety
was now the owner of the house because the latter allegedly bought the house at
an auction sale on September 29, 1950. It turned out that Alto Surety likewise
filed an action against Rivera and likewise obtained a favorable judgment. The
corresponding deed was issued to Alto Surety on May 10, 1952. Subsequently,
Evangelista instituted an action against Alto Surety and Rivera for the purpose
of establishing his title over said house. The trial court ruled in favor of
Evangelista. On appeal, however, the Court of Appeals reversed the decision of
the trial court on the ground that Evangelista did not acquire a preferential lien
through the preliminary writ of attachment because the house was levied as if
it were an immovable property. The Court of Appeals was of the opinion that
the house should have been levied pursuant to the rules governing the levy of
personal property (apparently for the reason that the house was constructed on
a land belonging to another). In reversing the decision of the CA, the Supreme
Court reiterated the ruling in Ladera v. Hodges (48 Off. Gaz., 5374) that “a
true building (not one merely superimposed on the soil) is immovable or real
property, whether it is erected by the owner of the land or by a usufructuary
or lessee.”
[4.4] Instances Where Building Is Treated As Personal Property
By the Parties
Although the dicta in some decisions of the Supreme Court to
the effect that “the parties to a contract may by agreement treat as
personal property that which by nature would be a real property”40 may
have tended to erode the doctrine pronounced in Leung Yee v. Strong
Machinery41 — that a building is by itself an immovable property —
the fact remains that the nature of a building does not depend on the
way the parties deal with it. The classification of property into real or
personal is provided for by law and may not, therefore, be changed
by the agreement of the parties. As such, even if the parties may treat
as personal property that which under the law is a real property, that
agreement does not in any way alter the character of the property as an
immovable or real property.
40
Standard Oil Co. of New York v. Jaramillo, 44 Phil. 630, 632-633 (1923); see also De
Jesus v. Guan Bee Co., 72 Phil. 446 and Luna v. Encarnacion, 91 Phil. 531 (1952).
41
Supra.
15 16 PROPERTY
house (or building) subject matter of the cases was a personal property.
Rather, the Court simply applied the doctrine of estoppel, in that, since
the parties so agreed that the building (or house) is a personal property
and a proper subject of the contract of chattel mortgage, they are
estopped from denying the existence of the chattel mortgage which, as
between them, must be upheld.
Navarro v. Pineda
9 SCRA 631 (1963)
In this case, Rufino Pineda and his mother, Juana Gonzales, executed
a deed of real estate and chattel mortgages in favor of Conrado Navarro,
whereby Gonzales, by way of real estate mortgage hypothecated a parcel of
land belonging to her, and Pineda, by way of chattel mortgage, mortgaged
his house erected on a lot belonging to another person and one motor truck.
Both mortgages were contained in one instrument, which was registered both
in the Office of the Register of Deeds and the Motor Vehicle Office. When
Navarro filed a complaint for foreclosure of the mortgage, Pineda questioned
the validity of the chattel mortgage over his house on the ground that the house,
being an immovable property, could not be the subject of a chattel mortgage,
citing the cases of Lopez v. Orosa, Jr., 103 Phil. 98; Associated Ins. & Surety
Co., Inc. v. Iya, 103 Phil. 972; and Leung Yee v. Strong Machinery Co., 37 Phil.
644. The trial court upheld the validity of the chattel mortgage. The decision
of the trial court was directly appealed to the Supreme Court. In sustaining the
decision of the trial court, the Supreme Court applied the principle of estoppel
because the house in question was treated as personal or movable property by
the parties to the contract themselves. In the deed of chattel mortgage, Pineda
conveyed by way of chattel mortgage “(his) personal properties,” a residential
house and a truck. The mortgagor himself grouped the house with the truck,
which is, inherently a movable property. The Court explained further that the
cases cited by Pineda were not applicable because in these cases, third persons
assailed the validity of the deed of chattel mortgages; whereas in this case, it
was one of the parties to the contract of mortgage who assailed its validity.
Tumalad v. Vicencio
41 SCRA 143 (1971)
In this case, Vicencio and Simeon executed a chattel mortgage in favor
of Tumalad over their house of strong materials built on a lot rented from
Madrigal & Company, Inc. When Vicencio and Simeon defaulted in the
payment of their obligation, the mortgage was extrajudicially foreclosed and
the house was sold at public auction. Tumalad emerged as the highest bidder
during the auction. Subsequently, Tumalad filed an action for ejectment against
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 17
CLASSIFICATION OF PROPERTY
Immovable Property
Vicencio and Simeon. In their answer, the defendants impugned the legality
of the chattel mortgage and its subsequent foreclosure on the ground that the
house, being an immovable, could only be the subject of a real estate mortgage
and not a chattel mortgage. When the case finally reached the Supreme Court,
the said Court again applied the principle of estoppel since the parties treated
the subject house as personalty. The Court explained that “although there is no
specific statement referring to the subject house as personal property, yet by
ceding, selling or transferring a property by way of chattel mortgage (Vicencio
and Simeon) could only have meant to convey the house as chattel, or at least,
intended to treat the same as such, so that they should not now be allowed to
make an inconsistent stand by claiming otherwise.” This case was likewise
compared with Associated Ins. & Surety Co., Inc. v. Iya, Lopez v. Orosa, Jr.
and Plaza Theatre, Inc. and Leung Yee v. Strong Machinery Co. Unlike in
these three cases, wherein third persons assailed the validity of the chattel
mortgage, it is the debtors-mortgagors who are attacking the validity of the
chattel mortgage in this case. Hence, the doctrine of estoppel applies.
[4.6] Compared with the cases of Associated Ins. & Surety Co. v.
Iya, Evangelista v. Alto Surety & Ins. Co., Inc., Manarang v.
Ofilada and Piansay v. David
In the cases of Associated Ins. & Surety Co. v. Iya, Evangelista v.
Alto Surety & Ins. Co., Inc., Manarang v. Ofilada and Piansay v. David,
the question on the character of the house or building concerned was
of primordial consideration. In other words, there was no other way of
resolving these cases except with a precise ruling on the character of the
house (or building) subject thereof.
In Evangelista v. Alto Surety & Ins. Co., Inc.,51 for example, the main
question was — who between the contending parties had a preferential
right over the house? If the levy made on the house pursuant to a writ
of preliminary attachment in 1949 was valid, then Evangelista had a
preferential right over the same, otherwise, it would be Alto Surety.
The validity of the levy, in turn, would depend upon the character of
the house. If the house was a real property, then the levy would be
valid. If the house was a personal property, then the levy would not
be valid. Since the resolution of the case calls for the application of
the law (Article 415[1], NCC), there is no other conclusion except that
the house is a real property — it is so whether it is erected on a land
belonging to another.
51
103 Phil. 401.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 19
CLASSIFICATION OF PROPERTY
Immovable Property
not paid, the creditor opted to file an action for collection (instead of
foreclosing the mortgage) and after obtaining favorable judgment, the
creditor caused the levy upon execution of the same house subject
matter of the chattel mortgage contract. Before the property could be
sold at the public auction, the debtor offered to pay her indebtedness.
The sheriff, however, told her to likewise pay the expenses incurred in
the publication of the notice of sale. The debtor, however, refused to
pay the publication expenses contending that such publication was not
necessary since the house was not a real property.
Note that under the Rules of Court, if what is to be sold at a
public auction is a real property, publication of the notice of sale is
indispensable. Without such publication, the sale is a nullity. On the
other hand, if what is to be sold is a personal property, there is no need
for publication.
Hence, the issue in this case is the character of the house, whether it
is a real property or personal property for purposes of sale on execution.
Since the character of the house is the precise issue in this case, the
court is once again called upon to apply the law (Article 415[1], NCC).
Since the court is called upon to apply the law (Article 415[1], NCC),
there is no other conclusion except that the house is a real property.
In Piansay v. David,54 a house was again made the subject matter
of a chattel mortgage which was foreclosed. The mortgagee bought the
house during the auction and later sold the same to Piansay. Another
unsecured creditor of the debtor filed an action for collection against
him. After obtaining judgment, said creditor (Mangubat) caused the
levy upon execution of the house earlier foreclosed and sold to Piansay.
Thus, Piansay questioned the validity of the levy upon execution. The
main question in this case is this: who between Piansay and Mangubat
has a better right over the house? In order to answer this question, there
is a need on the part of the court to pass upon the issue of the validity
of the chattel mortgage contract. If the same is valid, then Piansay
acquires a preferential right over the house subject matter of the chattel
mortgage; otherwise, Mangubat shall acquire a preferential right over
it. The validity of the chattel mortgage, in turn, is dependent upon the
character of the house. If the house is a personal property, then the
54
12 SCRA 227.
18 PROPERTY
In Associated Ins. & Surety Co. Inc. v. Iya,52 the principal question
was this: May Associated Insurance rightfully demand for the exclusion
of the house from the foreclosure of the real estate mortgage by Iya?
In this case, if the chattel mortgage over the house is to be preferred
over the real estate mortgage over the same house, then Associated
Insurance may rightfully demand for the exclusion of the house in the
foreclosure of the real estate mortgage since it was executed prior to the
latter mortgage.
In the said case, the debtor-mortgagor executed two mortgages
in favor of different mortgagees. The first was a chattel mortgage in
favor of Associated Insurance covering the house. The second was a
real estate mortgage over the same house and the lot on which the house
was situated in favor of Iya. Both mortgage obligations were not paid.
Hence, Associated Insurance foreclosed the chattel mortgage over the
house and eventually purchased the house during the auction. When the
real estate mortgage was about to be foreclosed, Associated Insurance
sought for the exclusion of the house claiming a preferential right over
it by virtue of the chattel mortgage and its subsequent foreclosure.
Iya, in turn, questioned the validity of the chattel mortgage contract
contending that since the subject matter thereof was real property, the
same was not valid.
In this case, the court is required to meet squarely the issue of the
validity of the chattel mortgage contract. And in resolving said issue,
the court must pass upon the character of the house — whether it is real
property or personal property. If the house is a real property, then the
chattel mortgage is not valid and Associated Insurance does not acquire
a preferential right over the house subject matter of the mortgage. But
if the house is a personal property, then the chattel mortgage is valid
and Associated Insurance has a preferential right over the house. Since
the court is called upon to apply the law (Article 415[1], NCC), there is
no other conclusion except that the house is a real property — it is so
whether it is erected on a land belonging to another.
In Manarang v. Ofilada,53 a house was made the subject matter
of a chattel mortgage contract. When the mortgage obligation was
52
Supra.
53
99 Phil. 108 (1956).
20 PROPERTY
chattel mortgage is valid; otherwise, it is not. Since the court is again
called upon to apply the law (Article 415[1], NCC), there is no other
conclusion except that the house is a real property.
Manarang v. Ofilada
99 Phil. 108 (1956)
In this case, Manarang executed a chattel mortgage over a house of
mixed materials in favor of Esteban. Upon default, Esteban filed an action to
recover the loan. Judgment having been entered in plaintiff’s favor, execution
was issued against the same property mortgaged. Before the property could
be sold at the auction, Manarang offered to pay the sum of P277. The sheriff,
however, refused the tender unless the additional amount of P260 representing
the expenses incurred for the publication of the notice of sale be also paid.
Manarang refused to pay the additional amount contending that the house in
question was considered as personal property by the parties, hence, publication
of its sale at public auction was not necessary. In upholding the action of the
sheriff, the Supreme Court explained that the rules on execution do not allow
the parties to a contract to treat a real property as personal because “sale on
execution affect the public and third persons.” “The regulation governing
sales on execution are for public officials to follow” and “were never intended
to suit the consideration that parties, may have privately given to the property
levied upon.” Hence, “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.” In fine, the Supreme Court declare that “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.”
Evangelista v. Alto Surety & Ins. Co., Inc.
103 Phil. 401 (1958)
In this case, Evangelista sued Rivera for collection of sum of money on
June 4, 1949. On the same date, he obtained a writ of preliminary attachment,
which was levied upon a house built by Rivera on a land owned by Alto Surety.
The levy was made pursuant to the rules governing the levy of real properties.
In due course, judgment was rendered in favor of Evangelista, who, on October
8, 1951, bought the house at the public auction made to satisfy the judgment.
The corresponding deed of sale was issued to him on October 22, 1952. When
Evangelista sought to take possession of the house, he was told that Alto Surety
was now the owner of the house because the latter allegedly bought the house at
an auction sale on September 29, 1950. It turned out that Alto Surety likewise
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 21
CLASSIFICATION OF PROPERTY
Immovable Property
filed an action against Rivera and likewise obtained a favorable judgment. The
corresponding deed was issued to Alto Surety on May 10, 1952. Subsequently,
Evangelista instituted an action against Alto Surety and Rivera for the purpose
of establishing his title over said house. The trial court ruled in favor of
Evangelista. On appeal, however, the Court of Appeals reversed the decision
of the trial court on the ground that Evangelista did not acquire a preferential
lien through the preliminary writ of attachment because the house was levied
as if it were an immovable property. The CA was of the opinion that the house
should have been levied pursuant to the rules governing the levy of personal
property. In reversing the decision of the CA, the Supreme Court explained
that a house is “immovable or real property, whether it is erected by the owner
of the land or by a usufructuary or lessee.” Hence, the levy that was made was
proper and Evangelista acquired a preferential right over the house by virtue of
the writ of preliminary attachment which was secured long before the sale of
the house in favor of Alto Surety.
Associated Ins. & Surety Co., Inc. v. Iya, et al.
103 Phil. 972 (1958)
In this case, the spouses Valino purchased a lot on installment basis
from Philippine Realty Corporation. Prior to the full payment of the purchase
price, ownership remained with PRC. In the meantime, the spouses Valino
constructed a house on the lot and subsequently mortgaged the same in favor
of Associated Insurance by way of a chattel mortgage. After completing
payment of the purchase price on the lot and after the issuance of the title
to the lot in their names, the spouses Valino subsequently mortgaged the lot
and the house (earlier mortgaged to Associated Insurance) in favor of Iya
by way of a real estate mortgage. Soon, the spouses Valino defaulted in the
payment of their obligation secured by the chattel mortgage. Thus, Associated
Insurance foreclosed the chattel mortgage over the house and subsequently
caused the said house to be declared in its name for tax purposes. When the
surety company learned of the existence of the real estate mortgage, it filed an
action for the purpose of excluding the house from the real estate mortgage.
In the meantime, the spouses likewise defaulted in the payment of their
obligation secured by the real estate mortgage. Thus, Iya filed an action against
the spouses Valino and Associated Insurance for the payment of the mortgage
obligation with an alternative prayer for the foreclosure of the real estate
mortgage. The two cases were jointly heard. After trial, the lower court ruled
that the chattel mortgage in favor of Associated Insurance was preferred and
superior over the real estate mortgage in favor of Iya, with respect to the house.
The lower court thus ordered the exclusion of the house in the foreclosure of
the real estate mortgage. On appeal to the Supreme Court, the portion of the
decision of the lower court excluding the house in the foreclosure of the real
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 23
CLASSIFICATION OF PROPERTY
Immovable Property
thereof is not a personal property, the register of deeds is engaging itself
in the interpretation of the law — which is the exclusive province of the
courts. For that reason, the Supreme Court clarified that the duty of the
register of deeds in respect to the registration of chattel mortgages is of
a purely ministerial character.
The Standard Oil case is telling us that the registration of a
chattel mortgage covering a real property before the chattel mortgage
registry may not be prevented by the register of deeds. What then is
the effect of such registration? In Associated Ins. & Surety Co., Inc. v.
Iya,56 the Supreme Court held that the registration of a chattel mortgage
covering a building in the Chattel Mortgage Registry produces no effect
whatsoever, for where the interest conveyed is in the nature of a real
property, the registration of the document in the registry of chattels is
merely a futile act. Thus, the registration of the chattel mortgage of a
building of strong materials produces no effect as far as the building
is concerned.57 But then again, as between the parties to said chattel
mortgage, they are not allowed to assail the validity of said agreement
under the principle of estoppel.
Standard Oil Co. of New York v. Jaramillo
44 Phil. 630 (1923)
In this case, Gervasia de la Rosa, a lessee of a parcel of land situated in
the City of Manila and owner of the house of strong materials built thereon,
executed a deed of chattel mortgage, conveying to plaintiff by way of mortgage
both the leasehold interest in said lot and the building which stands thereon.
After said document was duly acknowledged and delivered, the petitioner
caused the same to be presented to defendant, as register of deeds of the City
of Manila, for the purpose of having the same recorded in the book of record
of chattel mortgages. Upon examination of the instrument, defendant was of
the opinion that it was not a chattel mortgage, for the reason that the interest
therein mortgaged did not appear to be personal property, within the meaning
of the Chattel Mortgage Law, and registration was refused on this ground. A
petition for mandamus was filed against the register of deeds. The Supreme
Court ruled that the position taken by the register of deeds is untenable. It is
his duty to accept the proper fee and place the instrument on record. The Court
explained that “the duties of a register of deeds in respect to the registration
56
Supra.
57
Associated Ins. & Surety Co., Inc. v. Iya, 103 Phil. 972, 979, citing Leung Yee v. Strong
Machinery Co., 37 Phil. 644.
22 PROPERTY
estate mortgage was reversed. In reversing the said portion of the decision, the
Supreme Court explained that the house in question was a real property and
the chattel mortgage in favor of Associated Insurance was not valid since its
subject matter was not a personal property. The chattel mortgage being void,
Associated Insurance did not acquire any right over the house.
Piansay v. David
12 SCRA 227 (1964)
In this case, Conrado David obtained a loan from Uy Kim upon the
security of a chattel mortgage on a house situated at Tondo, Manila. When
David defaulted, Uy Kim foreclosed the mortgage and the house was sold
to Uy Kim. Thereafter, Uy Kim sold the house to Salvador Piansay. In the
meantime, Marcos Mangubat filed an action for collection of loan against
David. After obtaining a judgment against David, the house was levied upon
at the instance of Mangubat. Piansay assailed the right of Mangubat to levy
upon execution the house in question alleging that the same belongs to him,
he having bought it from Uy Kim, who, in turn, acquired it at the auction sale
held in connection with the extrajudicial foreclosure of the chattel mortgage
constituted in her favor by David. In ruling in favor of Mangubat, the Court
held “regardless of the validity of a contract constituting a chattel mortgage
on a house, as between the parties to said contract, the same cannot and does
not bind third persons, who are not privies to the aforementioned contract or
their privies. As a consequence, the sale of the house in the proceedings for
the extrajudicial foreclosure of said chattel mortgage, is null and void insofar
as defendant Mangubat is concerned, and did not confer upon Mrs. Uy Kim,
as buyer in said sale, any dominical right in and to said house, so that she
could not have transmitted to her assignee, plaintiff Piansay, any such right as
against defendant Mangubat.”
[4.7] Classification of property into real or personal property, a
question of law — the Standard Oil case
In the case of Standard Oil Co. of New York v. Jaramillo,55 the
Supreme Court ruled that the Register of Deed may not refuse the
registration of a chattel mortgage on the pretext that the subject matter
thereof is not a personal property. The Court clarifies that the duties of
the register of deeds in respect to the registration of chattel mortgages are
of purely ministerial in character. As earlier discussed, the classification
of property into real or personal is provided for by law. In refusing the
registration of a chattel mortgage on the ground that the subject matter
55
Supra.
24 PROPERTY
of chattel mortgages are of a purely ministerial character, and no provision of
law can be cited which confers upon him any judicial or quasi-judicial power
to determine the nature of any document of which registration is sought as a
chattel mortgage.”
(C) Construction Adhered To the Soil
[4.8] Constructions of All Kinds Adhered To the Soil
To be immovable, the construction must be attached permanently
to the land.58 It becomes immovable by incorporation. The adherence
to the soil must not be of provisional or temporary character but fixed
or integral. Thus, in a case,59 the steel towers constructed by the Manila
Electric Company were not considered as real properties because they
were “removable and merely attached to a square metal frame by means
of bolts, which when unscrewed could easily be dismantled and moved
from place to place.” In Meralco Securities Industrial Corporation v.
CBAA,60 however, the Court held that the pipeline system in question is
indubitably a construction adhering to the soil. It is attached to the land
in such a way that it cannot be separated therefrom without dismantling
the steel pipes which were welded to form the pipeline.
Board of Assessment Appeals v. Manila Electric Co.
10 SCRA 68 (1964)
In this case, the City Assessor of Quezon City classified the 40 steel towers
constructed by Meralco within Quezon City as real properties for purposes
of taxation. Thus, the Board of Assessment Appeals of Quezon City required
Meralco to pay the amount of P11,651.86 as real property tax on the said steel
towers for the years 1952 to 1956. Meralco paid the amount under protest and
questioned the imposition of the tax before the Court of Tax Appeals. The CTA
ordered the cancellation of the tax declarations on the aforesaid steel towers
and directed the City Treasurer of Quezon City to refund the payments made
by Meralco. The CTA ruled that the steel towers were personal properties and
were not, therefore, subject to real property tax. On appeal, the Supreme Court
sustained the decision of the CTA holding that —
Granting for the purpose of argument that the steel supports
or towers in question are not embraced within the term poles, the
58
3 Manresa 18-19, cited in II Tolentino, Civil Code, p. 17.
59
Board of Assessment Appeals v. Manila Electric Company, 10 SCRA 68 (1964).
60
114 SCRA 261 (1982).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 25
CLASSIFICATION OF PROPERTY
Immovable Property
logical question posited is whether they constitute real properties,
so that they can be subject to a real property tax. The tax law
does not provide for a definition of real property; but Article 415
of the Civil Code does, by stating the following are immovable
property:
“(1) Land, building, roads and constructions of all kinds
adhered to the soil;
xxx xxx xxx
(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;
xxx xxx xxx
(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;
xxx xxx xxx.”
The steel towers or supports in question, do not come
within the objects mentioned in paragraph 1, because they do not
constitute buildings or constructions adhered to the soil. They are
not constructions analogous to buildings nor adhering to the soil.
As per description, given by the lower court, they are removable
and merely attached to a square metal frame by means of bolts,
which when unscrewed could easily be dismantled and moved
from place to place. They cannot be included under paragraph 3,
as they are not attached to an immovable in a fixed manner, and
they can be separated without breaking the material or causing
deterioration upon the object to which they are attached. Each of
these steel towers or supports consists of steel bars or metal strips,
joined together by means of bolts, which can be disassembled by
unscrewing the bolts and reassembled by screwing the same. These
steel towers or supports do not also fall under paragraph 5, for they
are not machineries, receptacles, instruments or implements, and
even if they were, they are not intended for industry or works on
the land. Petitioner is not engaged in an industry or works on the
land in which the steel supports or towers are constructed.”
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 27
CLASSIFICATION OF PROPERTY
Immovable Property
personal property and was not, therefore, subject to redemption. On the issue
of whether the sugar in question is personal or real property, the Supreme Court
held that “for purposes of attachment and execution, and for the purposes of
the Chattel Mortgage Law, ungathered products have the nature of personal
property.”
§ 6. Real Property under Article 415(3)
“Everything attached to an immovable in a fixed manner …”
[6.1] Attachment Must Be In A Fixed Manner
These properties are immovable by incorporation. Their attachment
to an immovable must be in a fixed manner and in such a way that
they cannot be separated therefrom without breaking the material or
deterioration of the object.65 In the Board of Assessment Appeals case,66
for example, the Supreme Court ruled that the steel towers of Meralco
could not be included under paragraph 3 because they are not attached
to an immovable in a fixed manner since they could be separated
without breaking the material or causing deterioration upon the object
to which they were attached. Each of the steel towers consists of steel
bars or metal strips, joined together by means of bolts, which could be
disassembled by unscrewing the bolts and reassembled by screwing the
same.
[6.2] Need Not Be Attached By the Owner
The Civil Code nowhere requires that the attachment or
incorporation be made by the owner of the land or immovable himself.
For the property to be immobilized under paragraph 3, the only criterion
is its union or incorporation with the immovable in the manner required
by law.
[6.3] However, Intent of the Parties May Govern
The principle of estoppel may likewise apply with respect to
properties mentioned in paragraph 3 of Article 415. The fact that the
machineries are heavy, bolted or cemented on the real property, for
example, does not make them ipso facto immovable under Article
65
Art. 415, par. 3.
66
Board of Assessment Appeals v. Manila Electric Company, supra.
26 PROPERTY
§ 5. Real Property under Article 415(2)
“Trees, plants and growing fruits …”
(A) Trees and Plants
[5.1] Trees and Plants
Trees, plants and growing fruits, while they are attached to the
land, are immovable property.61 They are immovable by reason of their
incorporation to the soil or because they form an integral part of the
immovable. If, therefore, the trees or plants are cut or uprooted for
purposes of making them firewood or timber they become movable
property except when the timber constitutes the natural product of the
tenement and, therefore, forms an integral part of the immovable.62
(B) Growing Fruits
[5.2] Growing Fruits
With regard to growing fruits, they are considered as real property
so long as they are still attached to the soil. But for certain purposes
and while still attached to the soil, growing fruits may exceptionally
be treated as personal property pursuant to the provisions of Article
416(2) of the New Civil Code. By way of example, ungathered fruits are
considered personal property for the purpose of sale of the whole or part
of the crops.63 In addition, ungathered fruits have the nature of personal
property for purposes of attachment and execution and in applying the
provisions of the Chattel Mortgage Law.64
Sibal v. Valdez
50 SCRA 512 (1927)
In this case, the deputy sheriff of the Province of Tarlac attached several
properties of Leon Sibal, among which was included the sugar cane in seven
parcels of land. Thereafter, the said deputy sheriff sold at public auction said
properties, including the sugar cane, to Valdez. Sibal offered to redeem said
sugar came and tendered to Valdez the amount sufficient to cover the price
paid by the latter. Valdez, however refused to accept the money and to return
the sugar cane on the ground that the sugar cane in question had the nature of
61
Inter-Regional Development Corp. v. CA, 65 SCRA 265, 268 (1975).
62
3 Manresa, 6th ed., 20.
63
3 Manresa, 6th ed., 21.
64
Sibal v. Valdez, 50 Phil. 512, 524 (1927).
28 PROPERTY
415(3), as between the parties since their intent has to be looked into.
Thus, if the parties treat the machinery as chattels, they are bound by
their agreement under the principle of estoppel67 notwithstanding the
fact that the machinery may have been attached to an immovable in a
fixed manner and may not be separated therefrom without breaking the
material or deterioration of the object to which it is attached.
Tsai v. Court of Appeals
366 SCRA 324 (2001)
In this case, Ever Textile Mills, Inc. obtained in 1975 a three million loan
from PBCom. As security for the loan, Evertex executed in favor of PBCom a
deed of real and chattel mortgage over the lot where its factory stands, and the
chattels located therein as enumerated in a schedule attached to the mortgage
contract. In 1979, PBCom granted a second loan of P3,356,000 to Evertex. The
loan was secured by a chattel mortgage over personal properties enumerated
in a list attached thereto. In 1982, PBCom foreclosed the real and chattel
mortgages. In 1982, Evertex was declared insolvent. In the meantime, PBCOm
sold the factory, lock and stock and barrel to Ruby Tsai in 1984. In 1989,
Evertex filed an action for annulment of the sale, reconveyance and damages.
Evertex alleges, inter alia, that PBCom appropriated some chattels not included
in the real and chattel mortgage in 1975 nor in the chattel mortgage of 1979.
Evertex further alleged that these properties were acquired only in 1981. Tsai
and PBCom contended, on the other hand, that the disputed 1981 machineries
were real properties because they were heavy, bolted or cemented on the real
property. In finding the contention to be unmeritorious, the SC held —
Petitioners contend that the nature of the disputed
machineries, i.e., that they were heavy, bolted or cemented on the
real property mortgaged by EVERTEX to PBCom, make them ipso
facto immovable under Article 415(3) and (5) of the New Civil
Code. This assertion, however, does not settle the issue. Mere nuts
and bolts do not foreclose the controversy. We have to look at the
parties’ intent.
While it is true that the controverted properties appear to be
immobile, a perusal of the contract of Real and Chattel Mortgage
executed by the parties herein give us a contrary indication. In
the case at bar, both the trial and the appellate courts reached the
same finding that the true intention of PBCom and the owner,
EVERTEX, is to treat machinery and equipment as chattels. The
67
Tsai v. CA, 366 SCRA 324 (2001).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Immovable Property
pertinent portion of respondent appellate court’s ruling is quoted
below:
xxx xxx xxx
In the absence of any showing that this conclusion is baseless,
erroneous or uncorroborated by the evidence on record, we find no
compelling reason to depart therefrom.
Too, assuming arguendo that the properties in question are
immovable by nature, nothing detracts the parties from treating it as
chattels to secure an obligation under the principle of estoppel. As
far back as Navarro v. Pineda, 9 SCRA 631 (1963), an immovable
may be considered a personal property if there is a stipulation as
when it is used as a security in the payment of an obligation where
a chattel mortgage is executed over it, as in the case at bar.
In the instant case, the parties herein: (1) executed a contract
styled as “Real Estate and Chattel Mortgage,” instead of just “Real
Estate Mortgage” if indeed their intention is to treat all properties
included therein as immovable, and (2) attached to the said
contract a separate “LIST OF MACHINERIES & EQUIPMENT.”
These facts, taken together, evince the conclusion that the parties’
intention is to treat these units of machinery as chattels. A
fortiori, the contested after-acquired properties, which are of the
same description as the units enumerated under the title “LIST
OF MACHINERIES & EQUIPMENT,” must also be treated as
chattels.
§ 7. Real property under Article 415(4)
“Statues, reliefs, paintings or other objects for use or orna-
mentation …”
[7.1] Requisites
These are real properties by destination. In order that the properties
mentioned in this paragraph may be considered as real property, the
following requisites must concur: (1) they must be placed in buildings
or on lands by the owner of the immovable or by his agent; and (2) the
attachment must be intended to be permanent.
[7.2] Distinguish From Paragraph 3
The real properties in this paragraph are to be distinguished from
those mentioned in paragraph 3, as follows: (1) here the incorporation
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Immovable Property
placed by the owner of the tenement, property or plant, but not so
when placed by tenant, usufructuary, or any other person having only
a temporary right, unless such person acted as the agent of the owner.70
Hence, if the machinery, receptacles, instrument or implements are not
placed by the owner of the tenement or by his agent, these properties
remain as movables and are not converted into real properties. As further
explained by Justice J.B.L. Reyes in Ladera v. CN Hodges,71 in the case
of immovables by destination (such as statutes, paintings and reliefs,
machinery and implements, and animal houses), the Code requires that
they be placed by the owner of the tenement, in order to acquire the
same nature or consideration of real property.
[8.3.1] Exception to the Rule in supra § 8.3
Should the machinery, receptacles, instruments or implements be
placed in the land or tenement by the lessee thereof, the same remains
personal because they are not placed by the owner of the tenement. An
exception will arise, however, if in the contract of lease it is stipulated that
such machinery, receptacles, instruments or implements placed there by
the lessee will become, at the termination of the lease, the property of
the lessor for in that case they will be considered as immovable property
since in placing them the lessee will just be merely acting as an agent
of the lessor.72 In the Davao Sawmill case, the Supreme Court quoted
with approval the case of Valdez v. Central Altagracia, Inc.,73 where it
was held that while under the general law of Puerto Rico machinery
placed on property by a tenant does not become immobilized, yet, when
the tenant places it there pursuant to a contract that it shall belong to
the owner, it then becomes immobilized as to that tenant and even as
against his assignees and creditors who had sufficient notice of such
stipulation.74
70
See also Burgos, Sr. v. Chief of Staff, AFP, 133 SCRA 800, 812 (1984).
71
Supra, 5379.
72
See Davao Sawmill v. Castillo, supra.
73
225 U.S. 58.
74
Cited in People’s Bank and Trust Co. v. Dahican Lumber Company, 20 SCRA 84, 95
(1967).
29 30 PROPERTY
must be made by the owner of the immovable either personally or through
an agent; while it is immaterial as to who makes the incorporation in
paragraph 3; (2) the incorporation in paragraph 3 must be such that
separation is impossible; whereas, in paragraph 4 separation is possible
without deterioration of the immovable or destruction of the material.
§ 8. Real Property under Article 415(5)
“Machineries, receptacles, instruments or implements …”
[8.1] Immovable By Destination in Par. (5); Requisites
The properties mentioned in paragraph 5 are essentially movables
but by reason of their purpose — they being destined for use in the
industry or work in the tenement — they are converted into real
properties. In order to be immobilized under paragraph 5, however, the
following requisites must be satisfied:
(1) They must be machinery, receptacles, instruments or im-
plements;
(2) They must be placed by the owner of the tenement or by his
agent;
(3) There must be an industry or work carried in such building
or on the piece of land; and
(4) They must tend directly to meet the needs of said industry
or work.
[8.2] Properties Contemplated Under Paragraph 5
The properties contemplated in this paragraph are machineries,
receptacles, instruments or implements. Thus, in the Board of Assessment
Appeals case,68 the Supreme Court did not consider the steel towers
constructed by Meralco as falling under paragraph 5 for they are not
machineries, receptacles, instruments or implements.
[8.3] They Must Be Placed By the Owner or By His Agent
In Davao Sawmill Co. v. Castillo,69 the Supreme Court held that
machinery which is movable by nature becomes immobilized when
68
Supra.
69
61 Phil. 709 (1935).
31 32 PROPERTY
Davao Sawmill Co. v. Castillo
61 Phil. 709
Plaintiff operated a sawmill. The land upon which the business was con-
ducted was leased from another person. On the land, the sawmill company
erected a building which housed the machinery used by it. Some of the ma-
chines were mounted and placed on foundations of cement. In the contract of
lease, plaintiff agreed to turn over free of charge all improvements and build-
ings erected by it on the premises with the exception of machineries, which
shall remain with the plaintiff. In an action brought by the defendant herein,
judgment was rendered against plaintiff. A writ of execution was issued and the
machineries placed on the sawmill were levied upon as personalty by the sher-
iff. The question raised in this case involves the determination of the nature of
the machineries, for plaintiff claimed that they were immobilized and they be-
longed to the owner of the land. In holding that the machinery is not immobi-
lized, the Court explained that “machinery which is movable in its nature only
becomes immobilized when placed in a plant by the owner of the property or
plant, but not when so placed by a tenant, usufructuary, or any person having
only a temporary right, unless such person acted as the agent of the owner.”
Burgos, Sr. v. Chief of Staff, AFP
133 SCRA 800 (1984)
In this case, the search warrants issued were questioned on grounds, inter
alia, that real properties were seized under the disputed warrants. In debunking
this particular argument, the Supreme Court declared —
xxx Under Article 415(5) of the Civil Code of the Philippines,
“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” are considered
immovable property. In Davao Sawmill Co. v. Castillo where
this legal provision was invoked, this Court ruled that machinery
which is movable by nature becomes immobilized when placed
by the owner of the tenement, property or plant, but not so when
placed by tenant, usufructuary, or any other person having only
a temporary right, unless such person acted as the agent of the
owner.
In the case at bar, petitioners do not claim to be the owners
of the land and/or building on which the machineries were placed.
This being the case, the machineries in question, while in fact bolt-
ed to the ground remain movable property susceptible to seizure
under a search warrant.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 33
CLASSIFICATION OF PROPERTY
Immovable Property
People’s Bank and Trust Co. v. Dahican Lumber Company
20 SCRA 84 (1967)
In this case, Atlantic Gulf & Pacific Company (AG & P) sold and assigned
all its rights in a lumber concession to Dahican Lumber Company (DALCO)
for a total sum of $500,000, of which only $50,000 was paid. To develop the
concession, DALCO obtained various loans from People’s Bank & Trust
Company. The loan was secured by a real estate mortgage over five parcels
of land, including the buildings and improvements thereon. The mortgage
was executed on July 13, 1950. On the same date, DALCO executed a second
mortgage on the same properties in favor of AG & P to secure payment of the
unpaid balance of the purchase price. Both deeds contained an identical provision
extending the mortgage lien to properties to be subsequently acquired by
DALCO including but not limited to machinery, fixtures, tools and equipments
which the mortgagor may install, use in connection with the premises. After
July 13, 1950, DALCO purchased various machineries, equipment, spare parts
and supplies (collectively referred to as “after-acquired properties”). Pursuant
to the provisions of the mortgage deeds, the Bank requested DALCO to submit
compete lists of said properties but the latter failed to do so. Thereafter, the
board of directors of DALCO passed a resolution to rescind the alleged sales of
after-acquired properties by Connel Bros. Company Philippines (CONNEL).
After which, DALCO and CONNEL executed the corresponding agreements of
rescission of sale. The Bank demanded for the cancellation of such agreements.
When DALCO refused to do so, the Bank and AG & P commenced foreclosure
proceedings of the mortgage deeds, including the after-acquired properties.
DALCO and CONNEL contended that the mortgages were null and void as
regards the “after acquired properties” because they were not registered in
accordance with the Chattel Mortgage Law. In upholding the validity of the
mortgage and the foreclosure, the Court held that the after-acquired properties
came within the operation of Article 415, paragraph 5 and Article 2127
of the New Civil Code. The Court explained that since the “after acquired
properties” were purchased by DALCO in connection with, and for the use
in the development of its lumber concession and that they were purchased in
addition to, or in replacement of those already existing in the premises on July
13, 1950 they must be deemed, in law, “to have been immobilized, with the
result that the real estate mortgages involved herein — which were registered
as such — did not have to be registered a second time as chattel mortgages in
order to bind the after acquired properties and affect third persons.” The Court
likewise held that CONNEL is also barred from denying that the properties in
question had become immobilized. The Court explained:
Moreover, quoted in the Davao Sawmill case was that of Valdez v.
Central Altagracia, Inc. (225 U.S. 58), where it was held that while under the
general law of Puerto Rico, machinery placed on property by a tenant does not
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 35
CLASSIFICATION OF PROPERTY
Immovable Property
Berkenkotter v. Cu Unjieng
61 Phil. 663
The Mabalacat Sugar Co., Inc., owner of a sugar central, obtained from
defendant a loan secured by a real estate mortgage constituted on two parcels
of land with all the buildings, improvements, sugarcane mill thereon, and
whatever forms part or was a necessary complement of said sugar-cane mill.
Shortly thereafter, the company decided to increase the capacity of its sugar
central by buying additional machinery and equipment, which it installed in
the central, so that instead of milling 150 tons daily it could produce 250. The
company obtained a loan from plaintiff to pay for the machinery. The issue
in the present action is whether the additional machinery was subject to the
mortgage deed executed in favor of defendant. In holding the machinery to
be real property, the Court explained that the installation of the machinery
and equipment in question in the central converted them into real property by
reason of their purpose and constitutes a permanent improvement on said sugar
central and subjects said machinery and equipment to the real estate mortgage
constituted on the sugar central.
Ago v. Court of Appeals
6 SCRA 360 (1962)
In this case, Ago bought sawmill machineries and equipments from Grace
Park Engineering, Inc., executing a chattel mortgage over said machineries and
equipments to secure the balance of the purchase price, which Ago agreed to
pay on installments. When Ago defaulted, Grace Park instituted foreclosure
proceedings of the mortgage. To enjoin the foreclosure, Ago instituted a special
civil action. The parties, however, arrived at a compromise agreement. Ago sold
the machineries to Golden Pacific Sawmill, Inc., which installed the same in
a building and permanently attached the same to the ground. In the meantime,
as Ago continued to default in his payments as provided in the judgment by
compromise, Grace Park filed with the trial court a motion for execution,
which was granted. Thereafter, the sheriff levied upon and sold the sawmill
machineries and equipments in question without prior publication of the notice
of sale. Ago questioned the legality of the sale contending that the machineries
were real properties. When the case eventually reached the Supreme Court, the
Court declared the sale to be void for lack of the necessary advertisement of
sale by publication in a newspaper as required by the rules on the execution
sale of a real property. The Court explained that “the installation of the sawmill
machineries in the building of the Golden Pacific Sawmill, Inc., for use in
the sawing of logs carried on in said building, the same became a necessary
and permanent part of the building or real estate on which the same was
constructed, converting the said machineries and equipments into real estate
within the meaning of Article 415(5) of the Civil Code of the Philippines.”
34 PROPERTY
become immobilized, yet, when the tenant places it there pursuant to a contract
that it shall belong to the owner, it then becomes immobilized as to that tenant
and even as against his assignees and creditors who had sufficient notice of
such stipulation. In the case at bar it is not disputed that DALCO purchased
the ‘after acquired properties’ to be placed on, and be used in the development
of its lumber concession, and agreed further that the same shall become
immediately subject to the lien constituted by the questioned mortgages. There
is also abundant evidence in the record that DAMCO and CONNEL had full
notice of such stipulation and had never thought of disputed validity until the
present case was filed. Consequently, all of them must be deemed barred from
denying that the properties in question had become immobilized.
[8.4] They Must Tend Directly To Meet the Needs of Said Industry
or Work
The properties mentioned in paragraph 5 are immovable by
destination and they are converted into real properties by reason of
their purpose, not by reason of their attachment to an immovable. In
Berkenkotter v. Cu Unjieng e Hijos,75 it was held that the installation of
the machinery and equipment in the central of the Mabalacat Sugar Co.,
Inc. for use in connection with the industry carried by that company,
converted the said machinery and equipment into real property by
reason of their purpose. The Court explained in the said case that “it
cannot be said that their incorporation therewith was not permanent
in character because, as essential and principal elements of a sugar
central, without them the sugar central would be unable to function or
carry on the industrial purpose for which it was established.” The Court
adds, “inasmuch as the central is permanent in character, the necessary
machinery and equipment installed for carrying on the sugar industry
for which it has been established must necessarily be permanent.”
The same ruling was made in the case of Ago v. Court of Appeals,76
where the Court held that “by the installation of the sawmill machineries
in the building of the Golden Pacific Sawmill, Inc., for use in the sawing
of logs carried on in said building, the same became a necessary and
permanent part of the building or real estate on which the same was
constructed, converting the said machineries and equipments into real
estate within the meaning of Article 415(5) of the Civil Code of the
Philippines.”
75
61 Phil. 663.
76
6 SCRA 530, 537.
36 PROPERTY
GSIS v. Calsons, Inc.
23 SCRA 891 (1968)
In this case, Calsons, Inc. borrowed from GSIS upon the security of a
real estate mortgage over five parcels of land “together with all the buildings
and improvements now existing thereon or which may hereafter be constructed
on the mortgaged properties.” GSIS thereafter applied for foreclosure of the
mortgage on grounds, inter alia, that Calsons without prior consent of GSIS
removed and disposed of the complete band sawmill and filling machine which
formed part of the properties mortgaged. Calsons did not deny this allegation
but contended that said machines were not included in the mortgage. The
Supreme Court ruled that the machineries were part of the immovable since
they were permanently attached to the property and installed there by the
former owner to meet the needs of certain works or industry therein. Hence,
the machineries need not be the subject of a separate chattel mortgage in order
to be deemed duly encumbered in favor of GSIS.
[8.5] They Must Be “Essential” and “Principal” Elements of the
Industry or Works
Before movables may be deemed immobilized in contemplation of
paragraph 5 of Article 415, it is necessary that they must be “essential”
and “principal” elements of the industry or works without which
such industry or works would be unable to function or carry on the
industrial purpose for which it was established.77 We must distinguish,
therefore, those movables which become immobilized by destination
because they are essential and principal elements in the industry from
those which may not be so considered immobilized because they are
merely incidental, not essential and principal.78 Thus, cash registers,
typewriters, etc., usually found and used in hotels, restaurants, theaters,
etc. are merely incidentals and are not and should not be considered
immobilized by destination, for these businesses can continue or carry
on their functions without these equipments.79 Airline companies use
forklifts, jeep-wagons, pressure pumps, IBM machines, etc., which are
incidentals, not essentials, and thus retain their movable nature.80 On the
other hand, machineries of breweries used in the manufacture of liquor
and soft drinks, though movable in nature, are immobilized because
77
Mindanao Bus Co. v. City Assessor and Treasurer, 6 SCRA 197, 200 (1962).
78
Id.
79
Id.
80
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 37
CLASSIFICATION OF PROPERTY
Immovable Property
they are essential to said industries; but the delivery trucks and adding
machines which they usually own and use and are found within their
industrial compounds are merely incidentals and retain their movable
nature.81
Mindanao Bus Co. v. City Assessor and Treasurer
6 SCRA 197 (1962)
In this case, the City Assessor of Cagayan de Oro City assessed a realty
tax on several equipment and machineries of Mindanao Bus Co., a company
engaged in the transportation business. These equipment were placed on
wooden or cement platforms and can be moved around in the bus company’s
repair shop. The bus company appealed the assessment to the Board of Tax
Appeals on the ground that the same are not realty. The Board of Tax Appeals of
the City, however, sustained the city assessor. Thus, the bus company appealed
to the Court of Tax Appeals, which likewise sustained the city assessor. In
reversing the decision of the Court of Tax Appeals, thereby holding that the
equipment in question are not real property, the Supreme Court distinguished
between principal and essential elements of the industry from those that are
merely incidental. According to the Court, in order that movable equipments
to be immobilized in contemplation of the law they must first be “essential
and principal elements of an industry or works without which such industry
or works would be unable to function or carry on the industrial purpose for
which it was established.” In this case, the tools and equipment in question are
by their nature, not essential and principal elements of Mindanao Bus Co.’s
business of transporting passengers and cargoes by motor trucks. They are
merely incidentals — acquired as movables and used only for expediency to
facilitate and/or improve its service. Even without such stools and equipments,
its business may be carried on. As explained by the Court, “the transportation
business could be carried on without the repair or service shop if its rolling
equipment is repaired or serviced in another shop belonging to another.”
[8.6] The Industry or Works Must Be Carried On In A Building or
On A Piece of Land
Aside from the element of essentiality, paragraph 5 of Article 415
also requires that the industry or works be carried on in a building or on
a piece of land.82 In the Mindanao Bus case, for example, the equipments
in question were not deemed real property because the transportation
81
Id.
82
Id., 201.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 39
CLASSIFICATION OF PROPERTY
Immovable Property
provides that the machines in question are personal property, hence, SPI
is estopped from denying the characterization of the subject machines
as personal property. The Court cautioned, however, that its holding
— that the machines should be deemed personal property pursuant to
the Lease Agreement — is good only insofar as the contracting parties
are concerned.
The Serg’s Products case must be distinguished from Ago v.
Court of Appeals.86 In the latter case, Ago executed a chattel mortgage
contract in favor of Grace Park Engineering over certain machineries
and equipment which the former purchased from the latter to secure
the payment of the balance of the price remaining unpaid. When
Ago defaulted in his payments, Grace Park instituted extrajudicial
foreclosure proceedings of the mortgage. To enjoin said foreclosure,
Ago instituted an action against Grace Park. In the said case, Ago and
Grace Park arrived at a compromise agreement. When Ago violated
the compromise agreement, Grace Park obtained from the court a writ
of execution. Pursuant to said writ, the sheriff levied upon and ordered
the sale of the sawmill machineries and equipments in question. The
sheriff sold the machineries and equipments without prior publication
of the notice of sale. It turned out, however, that after purchasing the
machineries and equipments from Grace Park, the same had already
been assigned by Ago to Golden Pacific Sawmill Inc. in payment of its
subscription to the shares of stocks of said corporation. Thereafter, the
sawmill machineries and equipments were installed in a building and
permanently attached to the ground for use in the sawing of logs carried
on in said building by Golden Pacific. In declaring the sale made by
the sheriff as null and void because of the absence of publication of the
notice of sale, the Supreme Court explained that “by the installation of
the sawmill machineries in the building of the Golden Pacific Sawmill,
Inc., for use in the sawing of logs carried on in said building, the same
became a necessary and permanent part of the building or real estate
on which the same was constructed, converting the said machineries
and equipments into real estate within the meaning of Article 415(5) of
the Civil Code of the Philippines.”
Note that in the Ago case, even if the machineries in question were
made the subject matter of a chattel mortgage contract, the doctrine of
86
Supra.
38 PROPERTY
business, according to the Court, “is not carried on in a building or
permanently on a piece of land,” as demanded by law. Likewise, in
the Board of Assessment Appeals case,83 the Court held that the steel
towers do not fall under paragraph 5 of Article 415 for they are not
machineries, receptacles, instruments or implements, and even if they
were, the Court declared that “they are not intended for industry or
works on the land” since the Manila Electric Company “is not engaged
in an industry or works on the land in which the steel supports or towers
are constructed.”
[8.7] Application of the Doctrine of Estoppel in Article 415(5)
The doctrine of estoppel was likewise applied by the Supreme
Court with respect to properties which are considered immobilized by
reason of its destination or purpose under paragraph 5 of Article 415.
In Serg’s Products, Inc. v. PCI Leasing and Finance, Inc.,84 the Court
held that the machines therein are proper subjects of a writ of replevin,85
although they are essential and principal elements of the industry
because the parties have treated the same as personal property.
In the Serg’s Products case, Serg’s Products Inc. (SPI) and
PCI Leasing and Finance, Inc. (PCI) entered into a lease agreement
providing that the machines in question were to be considered as
personal property, although the same were essential and principal
elements in the chocolate-making business of SPI. Subsequently, PCI
filed a complaint against SPI for sum of money, with an application for
a writ of replevin. The sheriff then proceeded to seize the machines in
question. SPI contended that the subject machines used in their factory
were not proper subjects of the writ of replevin because they were in
fact real property having become immobilized by destination. SPI went
to the Court of Appeals via an original action for certiorari. The Court
of Appeals, however, sustained the writ and held that the machines were
personal property. Thus, SPI appealed to the Supreme Court. In holding
that the machines are proper subjects of the writ of replevin even if they
are considered immobilized under paragraph 5 of Article 415, the Court
explained that the lease agreement, of which SPI is a party, clearly
83
Supra, 74.
84
338 SCRA 499 (2000).
85
Note: Under the Rules of Court, writs of replevin are issued for the recovery of personal
property only.
40 PROPERTY
estoppel was not applied because the interest of a third party (Golden
Pacific Sawmill, Inc.) would be prejudiced. And besides, the holding in
the Serg’s Products case that the machines should be deemed personal
property is good only insofar as the contracting parties to the Lease
Agreement are concerned. In the Ago case, Golden Pacific was not a
party to the chattel contract, hence, it was not bound by the agreement
of the parties therein treating the machines as personal property.
Makati Leasing and Finance Corp. v. Wearever Textile Mills, Inc.
122 SCRA 294 (1983)
In this case, Wearever Textile Mills, Inc. executed a chattel mortgage
contract in favor of Makati Leasing and Finance Corporation covering certain
raw materials and machinery. Upon default, Makati Leasing filed a petition for
judicial foreclosure of the properties mortgaged. Acting on Makati Leasing’s
application for replevin, the lower court issued a writ of seizure. Pursuant
thereto, the sheriff enforcing the seizure order seized the machinery subject
matter of the mortgage. In a petition for certiorari and prohibition, the Court of
Appeals ordered the return of the machinery on the ground that the same can-
not be the subject of replevin because it is a real property pursuant to Article
415 of the new Civil Code, the same being attached to the ground by means of
bolts and the only way to remove it from Wearever textile’s plant would be to
drill out or destroy the concrete floor. When the motion for reconsideration of
Makati Leasing was denied by the Court of Appeals, Makati Leasing elevated
the matter to the Supreme Court. In reversing the decision of the Court of Ap-
peals and reinstating the decision of the lower court, the Court explained —
Examining the records of the instant case, We find no
logical justification to exclude the rule out, as the appellate court
did, the present case from the application of the above-quoted
pronouncement. If a house of strong materials, like what was
involved in the above Tumalad case, may be considered as personal
property for purposes of executing a chattel mortgage thereon as
long as the parties to the contract so agree and no innocent third
party will be prejudiced thereby, there is absolutely no reason
why a machinery, which is movable in its nature and becomes
immobilized only by destination or purpose, may not be likewise
treated as such. This is really because one who has so agreed is
estopped from the denying the existence of the chattel mortgage.
In rejecting petitioner’s assertion on the applicability of the
Tumalad doctrine, the Court lays stress on the fact that the house
involved therein was built on a land that did not belong to the owner
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 41
CLASSIFICATION OF PROPERTY
Immovable Property
of such house. But the law makes no distinction with respect to the
ownership of the land on which the house is built and We should
not lay down distinctions not contemplated by law.
It must be pointed out that the characterization by the private
respondent is indicative of the intention and impresses upon the
property the character determined by the parties. As stated in
Standard Oil Co. of New York v. Jaramillo, 44 Phil. 630, it is
undeniable that the parties to a contract may by agreement treat as
personal property that which by nature would be a real property, as
long as no interest of third parties would be prejudiced thereby.
§ 9. Real property under Article 415(6)
“Animal houses, pigeon-houses, etc. …”
[9.1] Animal Houses and Pigeon Houses, Etc.
The structures mentioned in paragraph 6 are immovable by
destination and the Code requires that they be placed by the owner of
the land in order to acquire the same nature or consideration of real
property. Even if not placed by the owner, however, such structures may
still qualify as real property under paragraph 1 of Article 415, being a
construction attached to the soil, provided that such attachment must be
of a permanent character.
[9.2] Animals Included
It is worthy to note that animals in the pigeon-houses, beehives,
fishponds and breeding places mentioned in paragraph 6 of Article 415
are likewise considered as real property. However, these animals will
be considered as personal property under laws which so provide for
them pursuant to the second paragraph of Article 416 — referring to
“real property which by any special provision of law is considered as
personal property.” Thus, the fish in fishponds will be considered as
personal property for purposes of theft under the Revised Penal Code.
§ 10. Real Property under Article 415(7): “Fertilizers”
These are immovables by destination. The fertilizers must actually
be used on the land because it is only then that the intention of the
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 43
CLASSIFICATION OF PROPERTY
Immovable Property
rights, in turn, are either (1) real — the power belonging to a person
over a specific thing, without a passive subject individually determined
against whom such right may be personally exercised; it is enforceable
against the whole world; or (2) personal — the power belonging to one
person to demand of another, as a definite passive subject, the fulfillment
of a prestation to give, to do or not to do.
[13.2] How Rights Classified
Whether a right is personal or real property shall depend on: (1)
whether it is a personal or real right, and (2) whether the subject matter
thereof is a personal or real property. Except for rights arising from
contracts for public works which are classified as real property under
paragraph 10 of Article 415, all personal rights will fall under personal
property regardless of the subject matter thereof. With respect to real
rights, however, the classification thereof will depend on its subject
matter. If the subject matter of the real right is a real property, then such
real right is a real property. This is clear from paragraph 10 of Article 415
which classifies as real property “real rights over immovable property.”
Thus, a real estate mortgage is a real right and a real property by itself.90
On the other hand, if the subject matter of the real right is a personal
property, as in the case of chattel mortgage, such real right is classified
as personal property.
§ 14. Definition of Real Property in Real Estate Taxation
[14.1] Concept of Real Property in Realty Taxation
The area of real property taxation presents difficulty to the courts
on the matter of the classification of property for taxation purposes
because there are highly controversial and borderline cases which do
not fall squarely within the provisions of Article 415 of the New Civil
Code and yet, the property involved therein may rightfully be classified
as realty pursuant to existing tax laws. Hence, in the area of real property
taxation, there is a nagging question as to which law shall govern the
classification of property for taxation purposes — is it the provisions of
the Civil Code or the provisions of tax laws?
90
MBTC v. Alejo, 364 SCRA 812, 819 (2001); see also Hongkong & Shanghai Bank v.
Aldecoa & Co., 30 Phil. 255, 273.
42 PROPERTY
owner to use them on the tenement is beyond doubt.87 Hence, fertilizers
kept in the farmhouse are not immovable.88
§ 11. Real Property under Article 415(8)
“Mines, quarries, slag dumps, waters ...”
[11.1] Mines, Quarries and Slag Dumps
They are considered immovable property “while the matter thereof
forms part of the bed,” that is, the matter thereof remains unsevered
from the soil. Once separated they are no longer mines but minerals and
are considered as personal property.
[11.2] Waters
The waters, either running or stagnant, referred to here are those
which are found in their natural beds such as flowing streams, rivers or
canals.
§ 12. Real Property under Article 415(9): “Docks and Structures”
They are considered as immovables, though floating, as long as
they are intended by their nature and object to remain at a fixed place
on a river, lake, or coast.
In one case,89 the Provincial Assessor of Batangas City assessed
a real estate tax on the power barges operated by FELS Energy, Inc.,
which power barges were moored at Balayan Bay in Calaca, Batangas.
On the question of whether the power barges are real property, the
Court held that they are so and are categorized as immovable property
by destination pursuant to the provisions of Article 415(9) of the Civil
Code.
§ 13. Real Property under Article 415(10)
[13.1] Rights as Property
As discussed in supra § 1.2, the concept of property extends to
rights provided that the same is patrimonial in nature. Patrimonial
87
II Tolentino, Civil Code, 1982 ed., p. 20.
88
3 Manresa 32.
89
FELS Energy, Inc. v. The Province of Batangas, et al., G.R. No. 168557, Feb. 16, 2007.
44 PROPERTY
The various decisions of the Supreme Court on the above question
are not source of enlightenment but even add to the confusion because
there were cases decided solely on the basis of Article 415 of the New
Civil Code91 but there were also cases decided on the basis of the
provisions of the Assessment Law (Commonwealth Act No. 470) and
the Real Property Tax Code (Presidential Decree No. 464).92
In Benguet Corporation v. Central Board of Assessment Appeals,93
the Supreme Court even recognized the fact that the Real Property Tax
Code does not define “real property” but simply says that the realty
tax is imposed on “real property, such as lands, buildings, machinery
and other improvements affixed or attached to real property.” The same
observation was arrived at by the Court in the Board of Assessment
Appeals v. Manila Electric Co.,94 where it was held that the tax law did
not provide for a definition of real property.
In the Board of Assessment case, it was held that that the steel
supports or towers in question were not subject to realty tax because
they were not real property under either paragraphs (1), (3) or (5) of
Article 415 of the New Civil Code. In the Mindanao Bus case, the Court
likewise held that the imposition of realty tax on the maintenance and
repair equipment in question was not proper because the properties
involved were not real property under paragraph (5) of Article 415.
In Meralco Securities Industrial Corp. v. CBAA,95 the Court, on the
other hand, affirmed the propriety of the imposition of realty tax on
the pipeline system of Meralco Securities on the ground that the same
was considered a construction adhering to the soil, hence, real property
under paragraph (1) of Article 415.
In Manila Electric Co. v. CBAA,96 a case involving two storage
tanks, the Court held that the imposition of real tax was proper even if
the storage tanks were not embedded in the land. The Court recognized
91
Mindanao Bus Co. v. City Assessor and Treasurer, 6 SCRA 197 (1962); Board of Assess-
ment Appeals v. Manila Electric Co., 10 SCRA 68 (1964) and Manila Securities Industrial Corp.
v. Central Board of Assessment Appeals, 114 SCRA 261 (1982).
92
Caltex (Phils.), Inc. v. CBAA, 114 SCRA 296 (1982) and Manila Electric Co. v. CBAA,
114 SCRA 273 (1982).
93
G.R. No. 106041, Jan. 29, 1993.
94
Supra.
95
Supra.
96
Supra.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 45
CLASSIFICATION OF PROPERTY
Immovable Property
that this was a borderline case which could not be decided solely on the
basis of Article 415 but by the pertinent provisions of the Assessment
Law (Commonwealth Act No. 470) and the Real Property Tax Code
(Presidential Decree No. 464).97 In Caltex (Phils.), Inc. v. CBAA,
involving equipment and machinery permanently affixed by Caltex to
its gas station rented from a certain lessor, the Court held that the issue
of whether the said equipment and machinery are subject to realty tax
should be resolved primarily under the provisions of the Assessment
Law and the Real Property Tax Code. In these two cases, had the Court
applied the provisions of Article 415, the properties therein involved
would not be classified as real property. In applying the provisions of
the tax laws in lieu of Article 415, the Court justified the same on the
basis of its dictum in Standard Oil Co. of New York v. Jaramillo98 —
“it is a familiar phenomenon to see things classed as real property for
purposes of taxation which on general principle might be considered
personal property.”
In the light of the foregoing cases, it appears that in real property
taxation, the classification of property for taxation purposes is not the
exclusive domain of the Civil Code, especially in borderline cases such
as that of Manila Electric Co. v. CBAA and Caltex (Phils.), Inc. v. CBAA,
where the provisions of existing tax laws were primarily applied. In
these borderline cases, the property involve is usually either machinery
or improvements. It is usually with respect to these two kinds of property
that a problem may arise in the matter of their classification for taxation
purposes because existing tax laws may provide for specific definitions
of what may be considered as “machinery” or “improvement.”
[14.2] Machinery and Improvements Subject to Realty Tax
[14.2.1] Machinery
The old Real Property Tax Code and the present provisions on Real
Property Taxation under the Local Government Code of 1991 (R.A. No.
7160), both imposed realty tax on “land, building, machinery, and other
improvements” which are not specifically exempted therein. However,
both tax laws define the terms “machinery” and “improvement” in a
97
The precursor of the present Real Property Taxation under Title 2, Book II of the Local
Government Code of 1991 (R.A. No. 7160).
98
44 Phil. 630, 633.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 47
CLASSIFICATION OF PROPERTY
Immovable Property
[14.2.2] “Improvements”
The old Real Property Tax Code99 defined a taxable improvement,
as follows:
“k) Improvement is a valuable addition made to
property or an amelioration in its condition, amounting to
more than mere repairs or replacement of waste, costing
labor or capital and intended to enhance its value, beauty or
utility or to adapt it for new or further purposes.”
A similar definition is to be found in the present law on Real
Property Taxation:100
“(m) Improvement is a valuable addition made to a
property or an amelioration in its condition, amounting to
more than a mere repair or replacement of parts involving
capital expenditures and labor, which is intended to enhance
its value, beauty or utility or to adapt it for new or further
purposes.”
As to whether a structure constitutes an improvement so as to
partake of the status of realty, according to the Supreme Court, would
depend upon the degree of permanence intended in its construction
and use.101 The expression “permanent” as applied to an improvement
does not imply that the improvement must be used perpetually but
only until the purpose to which the principal realty is devoted has been
accomplished.102 It is sufficient that the improvement is intended to
remain as long as the land to which it is annexed is still used for the
said purpose.103
In addition, the tax laws require that the structure must be such that
it enhances the value and utility of the property to which it is annexed.
In the case of Benguet Corp. v. CBAA, et al.,104 the petitioner
questioned the imposition of real estate taxes on the tailings dam it
99
See Sec. 3(k), Real Property Tax Code.
100
See Sec. 199(m), R.A. No. 7160.
101
Benguet Corp. v. CBAA, et al., G.R. No. 106041, Jan. 29, 1993.
102
Id.
103
Id.
104
Supra.
46 PROPERTY
manner which drastically departs from the provisions of Article 415 of
the Civil Code.
For example, Section 3 of the Real Property Tax Code defines
“machinery,” as follows:
m) “Machinery” shall embrace machines, mechanical
contrivances, instruments, appliances and apparatus attached
to the real estate. It includes the physical facilities available
for production, as well as the installations and appurtenant
service facilities, together with all other equipment designed
for or essential to its manufacturing, industrial or agricultural
purposes.
Under the Title on Real Property Taxation in the Local Government
Code of 1991, the term “machinery” is defined, thus:
(o) “Machinery” embraces machines, equipment,
mechanical contrivances, instruments, appliances or appara-
tus which may or may not be attached, permanently or tem-
porarily, to the real property. It includes the physical facili-
ties for production, the installations and appurtenant service,
facilities, those which are mobile, self-powered or self-pro-
pelled, and those not permanently attached to the real prop-
erty which are actually, directly and exclusively used to meet
the needs of the particular industry, business or activity and
which by their very nature and purpose are designed for, or
necessary to its manufacturing, mining, logging, commer-
cial, industrial or agricultural purposes;
Note that both under the old Real Property Tax Code and the
present law on Real Property Taxation, in order to classify “machinery”
as realty for taxation purposes, what is important is that the same
must be “essential” or “necessary” to the operation of the business or
industry. If so, it is classified as realty subject to real property tax, even
if the other requirements of paragraph (5) of Article 415 of the New
Civil Code may not be present. Thus, in Caltex (Phils.), Inc. v. CBAA,
the equipment and machinery therein involved were held to be subject
to realty tax because they “are necessary to the operation of the gas
station, for without them the gas station would be useless.”
48 PROPERTY
constructed, arguing that the dam cannot be subjected to realty tax as
a separate and independent property because it does not constitute an
“assessable improvement” on the mine. In sustaining the imposition of a
realty tax over the tailings dam, the Court held that the dam falls within
the definition of an “improvement” because it is permanent in character
and it enhances both the value and utility of petitioner’s mine.
The same ruling was made by the Supreme Court in the case of
Manila Electric Co. v. CBAA,105 involving two storage tanks, which while
not embedded in the land were nonetheless considered as improvements
on the land because (1) they enhanced its utility and rendered it useful
to the oil industry and (2) they have been installed with some degree of
permanence as receptacles for the considerable quantities of oil needed
by MERALCO for its operations.
Chapter 2
MOVABLE PROPERTY
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 consid-
ered as personalty;
(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.
(335a)
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 enti-
ties, although they may have real estate. (336a)
105
Supra.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Movable Property
§ 15. Movable Property
[15.1] No Precise Definition of the Term
The Civil Code does not likewise define the term “personal” or
“movable” property. As in the case of “real” or “immovable” property,
the Code simply enumerates in Articles 416 and 417 thereof what are
to be considered as “personal” property. Note that under our law, the
meaning and application of the term “personal” property depends
upon the meaning and application which our law gives to the term
“real” property. Thus, under our law, all properties which are not real
are personal. Hence, while certain property may, by its nature, be
moved from one place to another, it will not be considered as movable
property if it is classified as immovable property under the provisions
of Article 415 because of the purpose for which it has been placed in an
immovable, in which case, it shall partake of the nature of the latter and
shall be classified as an immovable property by destination.
[15.2] What May Be Considered “Movable” Property, In General
In general, all things susceptible of appropriation which can be
transported from place to place without impairment of the real property
to which they are fixed106 and not included in the enumeration in Article
415107 are classified as “personal” or “movable” property. By way of
example: if certain machineries for use in an industry or works are
placed on the tenement not by the owner of the tenement and they are not
attached to the tenement in a fixed manner but can, in fact, be separated
therefrom without causing substantial injury, they are considered as
movable property. Note that by their nature, these machineries can be
transported from place to place and they do not become immobilized,
either by reason of incorporation (under Article 415[3]) because they
can be separated from the tenement without causing substantial injury
or by reason of destination (under Article 415[5]) because they are not
placed on the tenement by its owner, which is a requirement under this
paragraph for the movable to be immobilized.
106
Art. 416(4), NCC.
107
Art. 416(1), NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Movable Property
debt or money,114 or a right or proceeding in a court of law to procure the
payment of a sum of money,115 or a right to recover a personal chattel or
a sum of money by action.116 As discussed in supra § 13.2, since a chose
in action is merely a personal right, it is to be classified as a personal
property.
[15.6] Obligations In General
Every obligation creates a personal right on the part of the credi-
tor to demand for its fulfillment or performance. The right to demand
for the performance of the obligation is, by itself, a property. Since the
right to demand the performance of the obligation is simply a personal
right on the part of the creditor, such right is classified as personal prop-
erty pursuant to the discussion in supra § 13.2.
Art. 418. Movable property is either consumable or non-consum-
able. To the first class belong those movables which cannot be used in a
manner appropriate to their without their being consumed; to the second
class belong all the others. (337)
§ 16. Consumable and Non-consumable
[16.1] Consumable and Non-Consumable
The classification of property into consumable or non-consumable
applies only to movable property and does not find application to
immovable property. In addition, such classification does not find
application to all kinds of movable property but only to those which
are corporeal in nature. As defined, a consumable is a movable which
cannot be used in a manner appropriate to its nature without itself
being consumed. For example, a cigarette cannot be used in a manner
appropriate to its nature, i.e., for smoking, without itself being consumed.
A non-consumable, on the other hand, is a movable which can be used
in a manner appropriate to its nature without itself being consumed. An
example of a non-consumable is table which can be used in the manner
appropriate to its nature and, yet, it will not be consumed.
114
Ill. –– People, for Use of Vancil Motor Co. v. Weaver, 40 N.E. 2d 83, 313 Ill. App. 317.
115
N.Y. –– Niles v. Mathusa, 47 N.Y.S. 38, 20 App. Div. 483, affirmed 57 N.Y. 184, 162
N.Y. 546.
116
Ala. –– Peavy Lumber Co. v. Murchison, 130 So. 2d. 338, 272 Ala. 251.
49 50 PROPERTY
[15.3] Realty Considered as Personalty By Special Provisions of
Law
As discussed in supra §§ 5.2 and 9.2, there are certain properties
classified under Article 415 of the Code as real property which may, by
special provision of law, be considered as personal property for purposes
of the application of the said special provision of law. In applying the
provisions of the Revised Penal Code for the commission of the crime
of theft, for example, the animals in the animal houses referred to in
paragraph 6 of Article 416 will be considered as personal property.
Also, for purposes of attachment, execution and the Chattel Mortgage
Law, ungathered fruits referred to in the second paragraph of Article
415 shall be treated as personal property. To a certain extent, therefore,
the provision of the second paragraph of Article 416 is an attempt to
qualify the rules outlined in Article 415 of the Code.
[15.4] Forces of Nature
Paragraph (3) of Article 416 is an attempt to clarify the rule
outlined in Article 414 that only things susceptible of appropriation
are considered as property. The forces of nature in their original state
are not, ordinarily, subject to appropriation because of the degree of
difficulty in appropriating them. However, paragraph (3) of Article 416
clarifies that if these forces of nature are brought under the control of
man through the help of science, thereby becoming appropriable, they
are now considered as property and classified as personal property.
Hence, gas108 and electricity109 are considered personal property under
this provision.
[15.5] Chose in Action
A chose in action is personal property110 and it is an intangible
or incorporeal right.111 A “chose in action” means, literally, a thing in
action,112 and is the right of bringing an action,113 or a right to recover a
108
US v. Tambunting, 41 Phil. 364.
109
US v. Carlos, 21 Phil. 553.
110
Art. 417(1), NCC; Ark. – Gregory v. Colvin, 363 S.W. 2d 539, 540, 235 Ark. 1007.
111
Tex. – Browne v. King, Civ. App., 196 S.W. 884, affirmed 235 S.W. 522, 111 Tex. 330.
112
Gregory v. Colvin, supra.
113
Id.
51 52 PROPERTY
[16.2] Distinguished From Fungible and Non-Fungible
Aside from the classification provided in Article 418 of the Civil
Code, movables may likewise be classified into fungibles or non-
fungibles. In classifying movables into consumable or non-consumable,
the basis of the classification is the very nature of the corporeal object
itself. On the other hand, the basis of the classification of movables
into fungible or non-fungible is simply the intention of the parties. The
movable is classified as fungible if, by the intention of the parties, it
can be replaced by another of the same kind; otherwise, it is a non-
fungible.
Chapter 3
PROPERTY IN RELATION TO THE PERSON
TO WHOM IT BELONGS
Art. 419. Property is either of public dominion or of private owner-
ship. (338)
§ 17. Public Dominion and Private Ownership
[17.1] Public Dominion and Private Ownership
From the point of view of ownership, property is classified either
as that of public dominion or that of private ownership.117 However, this
classification is not complete and accurate since the Civil Code fails to
consider the basic difference between patrimonial property and ordinary
private property. The Code seems to suggest that those properties of
the State which are called “patrimonial” are in equal footing with
properties of private ownership. But this should not be the case. As will
be explained in infra § 23.3, patrimonial properties of the State are not
exactly in the same category as ordinary private properties. The latter
can be acquired thru adverse possession while the adverse possession
of the former cannot ipso facto ripen into ownership as it is an iron-clad
dictum that prescription can never lie against the State.118
117
Art. 419, NCC.
118
Alonso v. Cebu Country Club, Inc., 417 SCRA 115, 127.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
[17.2] Classification of Property From the Point of View of Owner-
ship
From the viewpoint of ownership, the Civil Code classifies prop-
erties, as follows: (1) in relation to the State, its properties are either of
public dominion or patrimonial properties;119 (2) in relation to the politi-
cal subdivisions (provinces, cities and municipalities), their properties
are either of public dominion (for public use) or patrimonial proper-
ties;120 (3) in relation to persons and entities other than the State and its
political subdivisions (or private persons, either individually or collec-
tively), their properties are denominated as that of private ownership.121
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores, road-
steads, and others of similar character;
(2) Those which belongs to the State, without being for public
use, and are intended for some public service or for the development of
the national wealth. (339a)
§ 18. Property of State: Public Dominion
[18.1] Kinds of Property of Public Dominion Pertaining to the
State
In relation to the State, there are three kinds of property of public
dominion: (1) those that are intended for public use; (2) those that are
intended for some public service; and (3) those that are intended for the
development of national wealth.122
[18.2] “Public Dominion,” as Referring To “Public Ownership”
In a sense, the term “public dominion” means ownership by the
public in general123 or “public ownership.” As used in this sense, the
ownership referred to is a “special collective ownership for the general
use and enjoyment, an application to the satisfaction of collective
119
See Arts. 420 and 421, NCC.
120
See Arts. 423 and 424, NCC.
121
See Art. 425, NCC.
122
Art. 420, NCC.
123
Note that the old Civil Code used the term “public ownership” instead of public
dominion.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
[18.4] “Public Ownership” Distinguished From “State Ownership”
Property of public dominion falling under the concept of State
ownership by virtue of regalian right must be distinguished from
property of public dominion in the concept of public ownership. In the
latter, not even the State may make them the object of commerce. Hence,
they cannot be leased, donated, sold or be the object of any contract.131
With respect to natural resources, they are not, however, totally outside
the commerce of man as the Constitution allows the State to enter into
co-production, joint venture or production-sharing agreements with
private individuals or corporations for their exploration, development
and utilization.132 With respect to fishponds, for example, which are
likewise owned by the State,133 they may be leased although they may
not be alienated. Under Section 45 of R.A. No. 8550, otherwise known
as “The Philippine Fisheries Code of 1998,” public lands such as tidal
swamps, mangroves, marshes, foreshore lands and ponds suitable for
fishery operations shall not be disposed or alienated but they may be the
subject matter of a fishpond lease agreement.
[18.5] Intent to Devote, Sufficient
For a property of the State to fall under public dominion, it is
not necessary that the same be actually used for some public use or
for some public service. In the case of Manila Lodge No. 761 v. Court
of Appeals,134 the Supreme Court clarified that in order to be property
of public dominion an intention to devote it to public use is sufficient
and it is not necessary that it must actually be used as such. Hence, it
matters not that the property is not actually devoted for public use or for
some public service.135 If the property has been intended for such use or
service, and it has not been devoted to other uses and no measures have
been adopted which amount to a withdrawal thereof from public use or
service, the same remains property of public dominion, the fact that it is
not actually devoted for public use or service notwithstanding.136
131
Municipality of Cavite v. Rojas, 30 Phil. 602.
132
See Sec. 2, Article XII of the 1987 Constitution.
133
Menchavez v. Teves, Jr., 449 SCRA 380, 391 (2005).
134
73 SCRA 162, 182-183 (1976).
135
Agripino Capitulo, et al. v. Alejo Aquino, No. 15488-R, (CA) 53 O.G. 1477, November
19, 1956.
136
Ibid.
53 54 PROPERTY
needs, and resides in the social group.”124 Viewed in this light, the State
holds these properties not in the concept of an owner125 but only in
consequence of its territorial integrity.126 Hence, the relation of the State
to these properties arises from the fact that the State is the juridical
representative of the social group, and as such it takes care of them,
preserves them and regulates their use for the general welfare.127
The term public dominion is to be viewed as referring to public
ownership in relation to the properties of the State intended for public
use or for some public service mentioned in paragraph numbers (1) and
(2) of Article 420. Since the ownership of these properties belong to the
public in general and not to the State, the latter may not make them the
object of commerce unless they are properly converted into patrimonial
properties pursuant to the provisions of Article 422 of the New Civil
Code.
[18.3] “Public Dominion,” as Referring To “State Ownership”
In another sense, the term “public dominion” may also mean
properties or things held by the State by regalian right.128 Under Section
2 of Article XII of the 1987 Philippine Constitution, which reaffirms the
regalian doctrine or jura regalia earlier enshrined in the 1935 Philippine
Constitution, all lands of the public domain as well as all natural
resources are owned by the State.129 While these properties are owned
by the State, they remain to be part of the public dominion. Hence, in
Chavez v. Public Estates Authority,130 for example, the Supreme Court
held that submerged lands are part of the State’s inalienable natural
resources and classified as property of public dominion.
124
Laurel v. Garcia, 187 SCRA 797, 808 (1990), citing 3 Manresa, 66-69; Tolentino, Com-
mentaries on the Civil Code of the Philippines, 1963 Edition, Vol. II, p. 26.
125
See II Tolentino, Civil Code of the Philippines, 1992 ed., p. 30.
126
Caguioa, Civil Code of the Philippines, Vol. II, 1966 ed., p. 30. (Note: According to
Justice Fernando in Lee Hong Hok v. David, 48 SCRA 372, 377 [1972], the government authority
possessed by the state which is appropriately embraced in the concept of sovereignty comes under
the heading of imperium.)
127
See II Tolentino, Civil Code of the Philippines, 1992 ed., p. 30.
128
Republic v. Alagad, 169 SCRA 455, 461 (1989).
129
The capacity of the State to own or acquire property is the state’s power of dominium.
(Separate Opinion of J. Puno in Cruz v. Secretary of Environment and Natural Resources, 347
SCRA 128, 165).
130
415 SCRA 403 (2003).
55 56 PROPERTY
Manila Lodge No. 761 v. Court of Appeals
73 SCRA 162 (1976)
In 1905, the Philippine Commission enacted Act No. 1360 authorizing
the City of Manila to reclaim a portion of the Manila Bay and the reclaimed
area was to form part of the Luneta extension. The Act likewise provided that
the reclaimed area “shall be the property of the City of Manila.” The City of
Manila was likewise authorized to lease the northern side of the reclaimed
area for a hotel site. Subsequently, the Philippine Commission passed Act No.
1657, amending Act No. 1360, to authorized the City of Manila to lease or sell
the portion set aside as a hotel site. After the reclamation, the City of Manila
sold a portion of the reclaimed land (located on the southern end) to Manila
Lodge which, in turn, sold the same to Tarlac Development Corp. After such
purchase, the City of Manila filed a petition in court for the re-annotation of
its right to repurchase the property sold to Manila Lodge, which petition was
granted by the court. Thereafter, the TDC filed an action to be declared the
purchaser of the property in good faith. After trial, the trial court found the
subject land to be part of the “public park or plaza” and, therefore, part of the
public dominion. Consequently, the court declared the sale of the subject land
by the City of Manila to Manila Lodge void. Both Manila Lodge and TDC
appealed from the said decision. One of the issues raised by the appellants was
that in order that the character of property for public use may be so attached
to a plaza, the latter must be actually constructed or at least laid out as such.
They contended that the subject property was not yet constructed as a plaza
or at least laid out as a plaza when it was sold by the City of Manila. On
this particular issue, the Supreme Court held that in order to be property of
public dominion an intention to devote it to public use is sufficient. The Court
explained: “It is not necessary, therefore, that a plaza be already constructed
or laid out as a plaza in order that it be considered property for public use. It
is sufficient that it be intended to be such. In the case at bar, it has been shown
that the intention of the lawmaking body in giving to the City of Manila the
extension to the Luneta was not a grant to it of patrimonial property but a
grant for public use as a plaza.”
[18.6] Public Use and Public Service, Distinguished
In Villarico v. Sarmiento,137 the Supreme Court defined the term
“public use” as that “use which is not confined to privileged individuals,
but is open to the indefinite public.” Hence, properties for public use
may be distinguished from properties intended for public service
in that the former may be used indiscriminately by the public while
137
442 SCRA 110, 115 (2004), citing US v. Tan Piaco, 40 Phil. 853, 856 (1920).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
the latter, although used for the benefit of the public, cannot be used
indiscriminately by anyone but only by those that are authorized by
proper authority.138
§19. Property of Public Dominion: For Public Use
[19.1] Enumeration of Properties of the State for “Public Use”
The first paragraph of Article 420 enumerates the properties of
public dominion which are intended for public use, as follows: “roads,
canals, rivers, torrents, ports and bridges constructed by the State;
banks, shores, roadsteads, and others of similar character.” Articles 5
and 6 of P.D. No. 1067, as amended, otherwise known as “The Water
Code of the Philippines,” add to the above enumeration, the following:
“Art. 5. The following belong to the State:
a.G Rivers and their natural beds;
b.G Continuous or intermittent waters of springs and brooks
running in their natural beds and the bed themselves;
c.G Natural lakes and lagoons;
d.G All other categories of surface waters such as water flowing
over lands, water from rainfall whether natural or artificial,
and water from agriculture runoff, seepage and drainage;
e.G Atmospheric water;
f.G Subterranean or ground waters; and
g.G Seawater.”
“Art. 6. The following waters found on private lands also belong
to the State:
a. Continuous or intermittent waters rising on such lands.
b. Lakes and lagoons naturally occurring on such lands;
c. Rain water falling on such lands;
d. Subterranean or ground waters; and
e. Waters in swamps and marshes.’’
138
II Caguioa, Civil Code of the Philippines, 1966 ed., p. 31.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
canal which conveyed water from the Obando River to fishponds
belonging to several persons. The canal was situated within a public
land. In sustaining the injunction granted by the lower court, the
Supreme Court said:
“No private person has a right to usurp possession of a
watercourse, branch of a river, or lake of the public domain
and use, unless it shall have been proved that he constructed
the same within property of his exclusive ownership, and
such usurpation constitutes a violation of the legal provisions
which explicitly exclude such waterways from the exclusive
use or possession of a private party.” (Italics supplied)
In view of the foregoing cases, the rule appears to be that if a canal
is constructed by private person within his private land and devoted it
exclusively for private use, the same is of private ownership. However,
if the canal is situated within a public property or the same is constructed
by the State and devoted to public use, such canal is property of public
dominion.
Mercado v. Municipal President of Macabebe
59 Phil. 592 (1934)
The predecessor-in-interest of the plaintiff was the owner of an hacienda
in which flowed a river and a creek near each other. The owner of the hacienda
made an excavation connecting these two bodies of water, constructing a sort of
canal known as Batasan-Limasan. This canal was then used not only by residents
of the hacienda, but also by people of nearby barrios and municipalities as
a means of communication in attending to their needs. This continued from
1906 to 1928, when the owner of the hacienda closed the two openings of the
Batasan-Limasan and converted it into a fish pond. The government ordered
the removal of the dikes closing both ends of the Batasan-Limasan, and this
case was brought as an appeal from that order. In holding that the builder of the
canal lost it by prescription, the Supreme Court explained —
“And even granting that the Batasan-Limasan creek acquired
the proportions which it had, before it was closed, as a result of
excavations made by laborers of the appellant’s predecessor-in-
interest, it being a fact that, since the time it was opened as a water
route between the Nasi River and Limasan creek, the owners thereof
as well as strangers, that is, both the residents of the hacienda and
those of other nearby barrios and municipalities, had been using
it not only for their bancas to pass through but also for fishing
57 58 PROPERTY
(A) Roads
[19.2] Roads
The “roads” referred to under Article 420(1) of the New Civil
Code are the national highways and roads constructed and maintained
by the national government through the Department of Public Works
and Highways. Provincial, city and municipal roads and streets, on the
other hand, are properties of public dominion of the local government
unit concerned and are governed by Article 424 of the Civil Code and
the provisions of the Local Government Code.
(B) Canals
[19.3] Canals
A “canal” is usually an artificial waterway, drainage, irrigation
or navigation.139 In the case of Santos v. Moreno,140 the Supreme Court,
quoting Article 339(1) of the Spanish Civil Code of 1889,141 held that
“canals constructed by the State and devoted to public use are of public
ownership” (or of public dominion). Conversely, said the Court, “canals
constructed by private persons within their private lands and devoted
exclusively for private use must be of private ownership.” In the Santos
case, the canals involved were declared to be of private ownership since
they were constructed by the owners of hacienda San Esteban for their
exclusive use and prohibited the public from using them.
In the case, however, of Mercado v. Municipal President of
Macabebe,142 while the canal involved (Batasan-Limasan) was originally
dug by the estate’s owner, the Supreme Court held that he had lost any
right over it by prescription since he allowed said canal to be used by the
public for navigation and fishing purposes for a period of twenty-two
(22) years. In this case, the canal could have been of private ownership
had not its builder lost it by prescription.
In Bautista v. Alarcon,143 the plaintiff therein sought the injunction
against the defendants who allegedly constructed a dam across a public
139
Magno v. Vargas, 54331-R, August 27, 1979.
140
21 SCRA 1141, 1166 (1967).
141
Which provisions were substantially reproduced in Article 420(1) of the new Civil
Code.
142
59 Phil. 592 (1934).
143
23 Phil. 631.
59 60 PROPERTY
purposes, and it being also a fact that such was the condition of the
creek at least since 1906 until it was closed in 1928, if the appellant
and her predecessors-in-interest had acquired any right to the creek
in question by virtue of excavations which they had made thereon,
they had lost such right through prescription, inasmuch as they
failed to obtain, and in fact they have not obtained, the necessary
authorization to devote it to their own use to the exclusion of all
others. The use and enjoyment of a creek, as any other property
susceptible of appropriation, may be acquired or lost through
prescription, and the appellant and her predecessors in interest
certainly lost such right through the said cause, and they cannot
now claim it exclusively for themselves after the general public
had been openly using the same from 1906 to 1928. xxx”
(C) Rivers
[19.4] “River” is a Composite Term
Although Article 420 of the New Civil Code speaks only of rivers
and banks, “rivers” is a composite term which includes: (1) the running
waters, (2) the bed, and (3) the banks.144 All these constitute the river.145
Since a river is but one compound concept, it should have only one
nature, i.e., it should either be totally public or completely private.
And since rivers are of public ownership, it is implicit that all the three
component elements be of the same nature also.146 However, to dispel
all possible doubts, Article 420, paragraph 1 of the New Civil Code and
Article 5, paragraph (a) of the Water Code of the Philippines, expressly
make all three elements properties of public dominion.
[19.5] Natural Bed of a River
The bed of the river is also classified as property of the public
dominion.147 In the case of Binalay v. Manalo,148 it was held that the
buyer did not acquire private ownership of the bed of the eastern branch
of the Cagayan River even if it was included in the deeds of absolute
144
Binalay v. Manalo, 195 SCRA 374, 384 (1991), citing Hilario v. City of Manila, 19
SCRA 931 (1967).
145
Hilario v. City of Manila, supra, p. 939.
146
Id.
147
Art. 502(1), NCC; Art. 5(a), Water Code of the Philippines; see also Binalay v. Manalo,
supra, 384; Republic v. CA, 132 SCRA 514 (1984).
148
Supra.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
sale executed by the sellers since the sellers “could not have validly
sold land that constituted property of public dominion.”
In Republic v. Court of Appeals,149 the Court ruled that the lower
court cannot validly order the registration of two lots in the names of
private respondents since these lots “were portions of the bed of the
Meycauayan river and are therefore classified as property of the public
domain under Article 420, paragraph 1 and Article 502, paragraph 1
of the Civil Code of the Philippines.”
[19.6] Extent of River Bed
What is the extent of the river bed? Article 70 of the Law of Waters
of August 3, 1866 defines the “natural bed” or “channel” of a creek or
river as “the ground covered by its waters during the highest floods.”150
The Supreme Court had the occasion to apply this provision in the case
of Binalay.151
In the above-mentioned case, Manalo purchased two parcels of
land: (1) the first parcel, consisting of 8.65 hectares, was purchased from
Faustina Taccad; and (2) the second parcel, consisting of 1.80 hectares,
was purchased from Gregorio Taguba. During the cadastral survey
conducted in Balug, Tumauini, Isabela on October 21, 1969, the two
parcels of land purchased by Manalo were surveyed and consolidated
into one lot, designated as Lot No. 307, which contains a total area of
4.6849 hectares, broken down as follows: (1) the whole of 1.80 hectares
acquired from Taguba; and (2) 2.8489 hectares acquired from Taccad.
As the survey was taken during the rainy season, a portion of the land
bought from Taccad then under water was left unsurveyed and was not
included in Lot 307. In this case, it appears that the Cagayan River forks
at a certain point to form two branches — the western and the eastern
— and then unites at the other end to form a narrow strip of land. The
eastern branch of the river cuts through the land of Manalo and is
inundated with water only during the rainy season. It likewise appear
that the submerged or the unsurveyed portion of the land of Manalo is
the bed of the eastern branch of Cagayan River. For about eight months
of the year (from January to August) when the level of the water at the
149
Supra.
150
cited in Binalay v. Manalo, supra, 382.
151
Supra.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
this case, Hilario sued the City of Manila and other defendants for
indemnity for the sand and gravel extracted from the San Mateo River
banks of the Hilario Estate. The Supreme Court held, however, that the
defendants were extracting materials not from the property of Hilario
but only from the river banks which is property of public dominion.
[19.8] Accretion on Riverbanks
Accretions on river banks, however, belong to the owner of lands
adjoining the banks,155 provided that the deposit is due to the effects of the
current of the river.156 Where the deposit of land was not formed solely
by the natural effect of the water current of the river bordering said land
but is also the consequence of the direct and deliberate intervention of
man, it is deemed a man-made accretion and, as such, part of the public
domain.157
(D) Ports
[19.9] Ports
The term “ports” in Article 420(1) of the New Civil Code includes
seaports and airports.158 The MIAA Airport Lands and Buildings
constitute a “port” constructed by the State.159 Hence, they are properties
of public dominion and thus owned by the State or the Republic of
the Philippines.160 In Manila International Airport Authority v. CA,161 the
Court explained:
“No one can dispute that properties of public dominion
mentioned in Article 420 of the Civil Code, like ‘roads,
canals, rivers, torrents, ports and bridges constructed by the
State,’ are owned by the State. The term ‘ports’ includes
seaports and airports. The MIAA Airport Lands and
Buildings constitute a ‘port’ constructed by the State. Under
Article 420 of the Civil Code, the MIAA Airport Lands and
155
Art. 457, NCC.
156
Republic v. CA, 132 SCRA 514 (1984).
157
Tiongco v. Director of Lands, 16 C.A. Rep. 211, cited in Vda. de Nazareno v. CA, 257
SCRA 589 (1996).
158
Manila International Airport Authority v. CA, 495 SCRA 591, 622.
159
Id.
160
Id.
161
Supra.
61 62 PROPERTY
point of where the Cagayan River forks is at its ordinary depth, river
water does not flow into the eastern branch. And while this condition
persists, the eastern bed is dry and is susceptible to cultivation. During
the rainy season (September to December), however, the water level in
the Cagayan River increases. As the river becomes swollen due to heavy
rains, the unsurveyed area of Manalo’s property would be inundated
with water, causing the eastern bed to be covered with flowing river
waters.
On the question of whether the unsurveyed area of Manalo’s
alleged property is part of the natural bed of the eastern branch of the
Cagayan River, the Supreme Court applied the provisions of Article
70 of the Law of Waters of August 3, 1866 which defines the natural
bed or channel of a creek or river as the ground covered by its waters
during the highest floods. According to the Court, the highest floods in
the eastern branch of the Cagayan River occur with the annual coming
of the rains as the river waters in their onward course cover the entire
depressed portion in Manalo’s property. As a consequence, the Supreme
Court declared the regularly submerged portion or the eastern bed of the
Cagayan River to be property of public dominion.
[19.7] Banks of Rivers
Riverbanks are expressly declared to be property of public
dominion in paragraph 1 of Article 420 of the New Civil Code. The
phrase “banks of a river” is understood to be those “lateral strips or
zones of its beds which are washed by the stream only during such high
floods as do not cause inundations.”152 In other words, the banks refer
to the lateral lines or strips reached by the waters when the river is at
high tide.153
Applying the foregoing definition, the Supreme Court absolved the
defendants in the case of Hilario v. City of Manila,154 from any liability
to Hilario since according to the Court they were extracting gravel and
sand only from the banks of the San Mateo River — which constitute
part of the public domain — and not from the property of Hilario. In
152
Hilario v. City of Manila, supra, 938, citing Art. 73 of the Law of Waters of August 3,
1866.
153
Ibid., at 946.
154
Supra.
63 64 PROPERTY
Buildings are properties of public dominion and thus owned
by the State or the Republic of the Philippines.
The Airport Lands and Buildings are devoted to public
use because they are used by the public for international and
domestic travel and transportation. The fact that the MIAA
collects terminal fees and other charges from the public
does not remove the character of the Airport Lands and
Buildings as properties for public use. The operation by the
government of a tollway does not change the character of
the road as one for public use. Someone must pay for the
maintenance of the road, either the public indirectly through
the taxes they pay the government, or only those among the
public who actually use the road through the toll fees they
pay upon using the road. The tollway system is even a more
efficient and equitable manner of taxing the public for the
maintenance of public roads.
The charging of fees to the public does not determine
the character of the property whether it is of public dominion
or not. Article 420 of the Civil Code defines property of
public dominion as one ‘intended for public use.’ Even if the
government collects toll fees, the road is still ‘intended for
public use’ if anyone can use the road under the same terms
and conditions as the rest of the public. The charging of fees,
the limitation on the kind of vehicles that can use the road,
the speed restrictions and other conditions for the use of the
road do not affect the public character of the road.”
(E) Shores
[19.10] Shore, Defined
“Shore” is understood to be that space which is alternately covered
and uncovered by water with the movements of the tides.162 Its interior
or terrestrial limit is the line reached by the highest equinoctial tides.163
Where the tides are not appreciable, the shore begins on the land-side at
162
Art. 1, The Law of Waters of August 3, 1866, cited in Francisco v. Government of the
P.I., 28 Phil. 505, 507 (1914) and Government of the Philippine Islands v. Cabañgis, 53 Phil. 112,
115 (1929).
163
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 65
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
the line reached by the sea during ordinary storms or tempests.164 Thus,
in Cagampang v. Morano,165 the Supreme Court held that the subject
property is part of the shore and public property as the same is covered
by the highest tides from May to July and there is no showing that these
tides are due to abnormal conditions.
[19.11] Shore, Property of Public Dominion
Shores are properties of public dominion. Thus, when the sea166
advances and private properties are permanently invaded by the waves,
the properties so invaded become part of the shore or beach and they
then pass to the public domain.167 The owner thus dispossessed does not
retain any right to the natural products resulting from their new nature;
it is a de facto case of eminent domain, and not subject to indemnity.168
This process whereby private property is converted into property for
public use through the natural action of the sea and the abandonment by
the owner has been called “natural expropriation.”169
[19.12] Accretions on Seashore
Accretions and alluvial deposits caused by the action of the sea
are governed by Article 4 of the Spanish Law of Waters of 1866, an
old but still valid law.170 Under said law, “lands added to the shores by
accretions and alluvial deposits caused by the action of the sea, form
part of the public domain.” Since alluvial formation along the seashore
is part of the public domain, it is not open to acquisition by adverse
possession by private persons.171 It is outside the commerce of man,
unless otherwise declared by either the executive or legislative branch
of the government.172 The accretion on the foreshore of the Manila Bay,
the latter being an inlet or an arm of the sea, for example, is part of the
public domain.173 On the other hand, the Laguna de Bay is a lake the
164
Id.
165
22 SCRA 1040 (1968).
166
Art. 420(1), NCC.
167
Government of the Philippine Islands v. Cabangis, supra, 115-116, cited in Republic v.
Court of Appeals, 281 SCRA 639, 655-656 (1997).
168
Id.
169
Caguioa, Civil Code of the Philippines, Vol. II, 1966 ed., p. 33.
170
Heirs of Emiliano Navarro v. Intermediate Appellate Court, 268 SCRA 74 (1997).
171
De Buyser v. Director of Lands, 121 SCRA 13, 16 (1983).
172
Id., citing Ignacio v. Director of Lands, 108 Phil. 335.
173
Heirs of Emiliano Navarro v. IAC, supra., citing Ignacio v. Director of Lands and Vale-
riano, 108 Phil. 335 (1960).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 67
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
which, quoting Corpus Juris, is “that part of the land adjacent to the
sea which is alternately covered and left dry by the ordinary flow of the
tides.” Thus, in the Ponce cases, the Supreme Court upheld the Cebu
City ordinance but only with respect to the reclamation of the foreshore
areas, and nullified the same with respect to the submerged areas.
In Republic v. Court of Appeals,179 the Supreme Court declared as
invalid the ordinances passed by the Pasay City and the reclamation
agreements it entered into with Republic Real Estate Corporation on
the ground that the subject matter thereof were submerged lands and not
foreshore lands. The Court held that the term foreshore lands cannot be
unduly stretched to include the submerged areas. The Court reiterated
what was said in the Ponce cases that the term “foreshore” refers to
“that part of the land adjacent to the sea which is alternately covered
and left dry by the ordinary flow of the tides.”
In Chavez v. Public Estates Authority,180 the Court declared as
invalid the joint venture agreement between Public Estates Authority
(PEA) and Amari Coastal Bay Development Corporation (Amari).
In said case, PEA entered into a joint venture agreement with Amari
obligating itself to convey title and possession over 750 hectares of
land, 592.15 hectares or 78% of the total area are still submerged and
permanently under the waters of Manila Bay. Under the said agreement,
the PEA conveyed to Amari the submerged lands even before their
actual reclamation, although the documentation of the deed of transfer
and issuance of the certificates of title would be made only after
actual reclamation. A question arose with respect to the validity of this
transaction. In declaring the contract to be invalid the Supreme Court
held: “Submerged lands, like the waters (sea or bay) above them, are
part of the State’s inalienable natural resources. Submerged lands are
property of public dominion, absolutely inalienable and outside the
commerce of man. This is also true with respect to foreshore lands.
Any sale of submerged or foreshore lands is void being contrary to the
Constitution.”
179
299 SCRA 199 (1998).
180
415 SCRA 403 (2003).
66 PROPERTY
accretion on which, by the mandate of Article 84 of the Spanish law of
Waters of 1866, belongs to the owner of the land contiguous thereto.174
(F) Foreshore Lands
[19.13] Part of Public Dominion
Foreshore lands are part of the public dominion.175 The term
“foreshore land” was defined by the Court of Appeals in the case of
Hacut v. Director of Lands176 which involved a parcel of land along
Basilan Island. The appellate court, quoting from Bouvier’s Law
Dictionary, defined “foreshore lands” as:
“that part of the land immediately in front of the shore;
the part which is between high and low water marks, and
alternately covered with water and left dry by the flux and
reflux of the tides. It is indicated by a middle line between
the highest and lowest tides.”177
In the two resolutions issued by the Supreme Court in 1965
involving the Ponce cases,178 the Supreme Court had the occasion
to define the term “foreshore lands” in relation to Republic Act No.
1899. The said Act, which was passed by Congress on June 22, 1957,
authorizes municipalities and chartered cities to undertake and carry
out at their own expense the reclamation by dredging, filling or other
means, of any “foreshore lands” bordering their respective territories.
The law, however, did not define the term foreshore lands. In these
cases, the Supreme Court upheld the dictionary meaning of the term
“foreshore lands” that the Court of Appeals adopted in the Hacut case.
In these cases, the City of Cebu entered into a reclamation contract with
the Cebu Development Corporation to reclaim foreshore land along
the coast of Cebu City pursuant to R.A. No. 1899. The Supreme Court
declared that the authority to reclaim granted to chartered cities and
municipalities under R.A. No. 1899 is limited to foreshore lands only
174
Heirs of Emiliano Navarro v. IAC, supra, 90; citing Government of the P.I. v. Colegio de
San Jose, 53 Phil. 423 (1929); Republic v. Court of Appeals, 131 SCRA 532 (1984); Republic v.
Alagad, 169 SCRA 455 (1989); and Meneses v. CA, 246 SCRA 162 (1995).
175
Republic v. CA, 281 SCRA 639 (1997).
176
49 O.G. No. 5, p. 1863 (1953).
177
At p. 1865.
178
Ponce v. Gomez, L-21870, February 3, 1965, and Ponce v. City of Cebu, L-22669, June
24, 1966.
68 PROPERTY
(G) Lakes
[19.14] Ownership of Lakes
Natural lakes and lagoons and their beds belong to the State181 and
are part of public dominion.182 Lakes and lagoons naturally occurring
on private lands also belong to the State.183 Hence, lakes and lagoons
developed by a private person on private lands are of private ownership.
The Water Code of the Philippines, however, prohibits any person from
developing a lake, stream or spring for recreational purposes without
first obtaining a permit from the National Water Resources Council.184
The Laguna de Bay has long been recognized as a lake.185 As such,
the accretion occurring therein, by mandate of Article 84 of the Spanish
Law of Waters of 1866, belongs to the owner of the land contiguous
thereto.186
[19.15] Natural Bed of Lakes, Defined
What is the natural bed or basin of lakes? In the case of Republic
v. Court of Appeals,187 the Supreme Court defined the extent of a lake
bed, as follows:
“The natural bed or basin of lakes, ponds, or pools,
is the ground covered by their waters when at their highest
ordinary depth.”188
In Republic v. Court of Appeals, the Republic, thru the Director
of Lands, opposed the registration of a parcel of land with an area of
17,311 square meters and situated near the shore of Laguna de Bay,
181
Art. 5(c), Water Code of the Philippines.
182
Art. 502(4), NCC.
183
Art. 6(b), Water Code of the Philippines. (Note: To this extent, the provision of Art.
503[2] of the NCC is deemed repealed. The repealing clause of the Water Code provides, in part:
“Art. 100. The following laws, parts and/or provisions of laws are hereby repealed: a. The provi-
sions of the Spanish Law on Waters of August 3, 1886, the Civil Code of the Philippines [RA
386] on ownership of waters, easements relating to waters, use of public waters and acquisitive
prescription on the use of waters, which are inconsistent with the provisions of this Code. xxx”)
184
Art. 41, Water Code of the Philippines.
185
Government of P.I. v. Colegio de San Jose, 53 Phil. 423 (1929); Republic v. Court of
Appeals, 131 SCRA 532 (1984); Republic v. Alagad, 169 SCRA 455 (1989).
186
Heirs of Emiliano Navarro v. IAC, supra, 90, citing Government of the P.I. v. Colegio de
San Jose, 53 Phil. 423 (1929); Republic v. Court of Appeals, 131 SCRA 532 (1984); Republic v.
Alagad, 169 SCRA 455 (1989); and Meneses v. CA, 246 SCRA 162 (1995).
187
131 SCRA 532 (1984).
188
Citing Art. 74 of the Law of Waters of 1866.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 69
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
about twenty (20) meters therefrom, on the ground that such is part of
the public domain and therefore not registrable. The Director of Lands
contends that since the land sought to be registered is covered with
water four to five months a year, the same is part of the lake bed of
Laguna de Bay, or is at least, a foreshore land. The rise in the water level
of the Laguna de Bay, as observed four to five months a year during the
rainy season, is caused by the rains. It is the rains which bring about the
inundation of a portion of the land in question. Applying the provisions
of Article 74 of the Law of Waters of 1866, the Supreme Court held
that since the rise in the water level which causes the submersion of the
land occurs during a shorter period (four to five months a year) than
the level of the water at which the land is completely dry, the latter
should be considered as the “highest ordinary depth” of Laguna de Bay.
Therefore, the Court concludes, the land sought to be registered is not
part of the bed or basin of Laguna de Bay, and therefore capable of
registration as private property.
In Republic v. Alagad,189 the Supreme Court defined the highest
ordinary depth of the waters of the Laguna de Bay as the highest depth
of the waters during the dry season or such depth being the regular,
common, natural, which occurs always or most of the time during
the year. Otherwise stated, where the rise in water level is due to the
“extraordinary” action of nature, rainfall for instance, the portions
inundated thereby are not considered part of the bed or basin of the body
of water in question.190 It cannot therefore be said to be foreshore land
but land outside of the public dominion, and land capable of registration
as private property.191
(H) “Others of Similar Character”
[19.16] Creeks
A creek is defined as a recess or arm extending from a river and
participating in the ebb and flow of the sea.192 It is a property belonging to
the public domain which is not susceptible to private appropriation and
189
169 SCRA 455, 463-464, citing Republic v. CA, supra.
190
Id., at 464.
191
Id.
192
Maneclang v. Intermediate Appellate Court, 161 SCRA 469, 471 (1988), citing Mercado
v. Municipal President of Macabebe, 59 Phil. 592 (1934); see also Maneclang v. IAC, 144 SCRA
553, 556 (1986); Usero v. Court of Appeals, 449 SCRA 352, 359 (2005).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 71
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
[21.1] The Regalian Doctrine and State Ownership of Natural
Resources
Under the Regalian Doctrine, all lands not otherwise appearing
to be clearly within private ownership are presumed to belong to the
State.202
The Spaniards first introduced the doctrine to the Philippines
through the Laws of the Indies and the Royal Cedulas, specifically, Law
14, Title 12, Book 4 of the Novisima Recopilacion de Leyes de las Indias
which laid the foundation that “all lands that were not acquired from
the Government, either by purchase or by grant, belong to the public
domain.”203 Upon the Spanish conquest of the Philippines, ownership of
all “lands, territories and possessions” in the Philippines passed to the
Spanish Crown.204
The Laws of the Indies were followed by the Ley Hipotecaria
or the Mortgage Law of 1893. The Spanish Mortgage Law provided
for the systematic registration of titles and deeds as well as possessory
claims. The Royal Decree of 1894 or the “Maura Law” partly amended
the Mortgage Law as well as the Law of the Indies. The Maura Law was
the last Spanish land law promulgated in the Philippines. It required
the “adjustment” or registration of all agricultural lands, otherwise the
lands would revert to the State.205
The 1935, 1973 and 1987 Constitutions adapted the Regalian
doctrine substituting, however, the State, in lieu of the King, as the
owner of all lands and waters of the public domain.206 Justice Reynato S.
Puno, in his separate opinion in Cruz v. Secretary of Environment and
Natural Resources,207 explained thus:
“One of the fixed and dominating objectives of the
1935 Constitutional Convention was the nationalization and
conservation of the natural resources of the country. There
202
Collado v. Court of Appeals, 390 SCRA 343, 354 (2002), citing Republic v. Sayo, 191
SCRA 71 (1990).
203
Id., 354-355, citing the Separate Opinion of J. Puno in Cruz v. Secretary of Environment
and Natural Resources, 347 SCRA 128 (2000).
204
Id., 355.
205
Id., 355.
206
Id., 357, citing the Separate Opinion of J. Puno in Cruz v. Secretary of Environment and
Natural Resources, supra.
207
Supra, at pp. 171-172.
70 PROPERTY
acquisitive prescription,193 and, as public water, it cannot be registered
under the Torrens System in the name of any individual.194 It is included
in the phrase “others of similar character” in paragraph 1 of Article 420
of the New Civil Code.195
§ 20. Property of Public Dominion: For Public Service
All properties of the State that are devoted or intended for some
public service are likewise part of the public dominion.196 As earlier
explained, these properties cannot be used indiscriminately by anyone
but only by those that are authorized by proper authority. A good example
of a property falling under this category is the Roppongi property.197 The
Roppongi property is one of the four (4) properties in Japan acquired
by the Philippine government under the Reparations Agreement entered
into with Japan in 1956. Under the said agreement, the Roppongi
property was specifically designated to house the Philippine Embassy.
As such, the nature of the Roppongi lot as property for public service
is expressly spelled out.198 It is dictated by the terms of the Reparations
Agreement and the corresponding contract of procurement which bind
the Philippine government and the Japanese government.199 As property
of public dominion, the Roppongi lot is outside the commerce of men
and cannot be alienated.200
§ 21. Property of Public Dominion: For the Development of National
Wealth
Property of public dominion pertaining and/or belonging to the
State refers not only to property devoted to public use or to some public
service, but also to property devoted to the development of the national
wealth. This class of property constituted property of public dominion
although employed for some economic or commercial activity to
increase the national wealth.201
193
Id., 471; see also Celestial v. Cachopero, 413 SCRA 469 and Usero v. CA, supra, 359.
194
Id., 471; see also Usero v. CA, supra, 359.
195
Usero v. CA, supra, 359.
196
Art. 420(2), NCC.
197
Laurel v. Garcia, 187 SCRA 797, 808 (1990).
198
Id., 807.
199
Id., 807.
200
Id., 808.
201
See Chavez v. Public Estates Authority, 384 SCRA 152, 192 (2002).
72 PROPERTY
was an overwhelming sentiment in the Convention in favor
of the principle of state ownership of natural resources and
the adoption of the Regalian doctrine. State ownership of
natural resources was seen as a necessary starting point
to secure recognition of the state’s power to control their
disposition, exploitation, development, or utilization. The
delegates to the Constitutional Convention very well knew
that the concept of State ownership of land and natural
resources was introduced by the Spaniards, however, they
were not certain whether it was continued and applied by the
Americans. To remove all doubts, the Convention approved
the provision in the Constitution affirming the Regalian
doctrine.”
The 1987 Constitution reaffirmed the Regalian doctrine in Section
2 of Article XII on “National Economy and Patrimony,”208 to wit:
“Sec. 2. All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces
of potential energy, fisheries, forests or timber, wildlife,
flora and fauna, and other natural resources are owned by
the State. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration,
development and utilization of natural resources shall be
under the full control and supervision of the State. The State
may directly undertake such activities or it may enter into co-
production, joint venture, or production-sharing agreements
with Filipino citizens, or corporations or associations at least
sixty per centum of whose capital is owned by such citizens.
Such agreements may be for a period not exceeding twenty-
five years, renewable for not more than twenty-five years,
and under such terms and conditions as may be provided
by law. In cases of water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of
water power, beneficial use may be the measure and limit of
the grant.
208
Separate Opinion of J. Puno in Cruz v. Secretary of Environment and Natural Resources,
supra, 173.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 73
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
xxx.”
Under the Regalian Doctrine embodied in the present Constitution,
all lands of the public domain as well as all natural resources enumerated
in the above-quoted provision, whether on public or private land, belong
to the State.209
(A) Natural Resources
[21.2] Fishponds
Fishponds are owned by the State.210 The 1987 Constitution spe-
cifically declares that all lands of the public domain, waters, fisheries,
and other natural resources belong to the State. Included here are the
fishponds, which may not be alienated but only leased.211 Possession
thereof, no matter how long, cannot ripen into ownership.212 Under Sec-
tion 45 of R.A. No. 8550, otherwise known as “The Philippine Fisheries
Code of 1998,” public lands such as tidal swamps, mangroves, marshes,
foreshore lands and ponds suitable for fishery operations shall not be
disposed or alienated. They may, however, be the subject matter of a
fishpond lease agreement.213
[21.3] Watershed Reservation
A watershed reservation is also a natural resource214 and cannot
therefore be alienated.215 A positive act (e.g., an official proclamation)
of the Executive Department is needed to declassify land which had
been earlier classified as a watershed reservation and to convert it into
alienable or disposable land for agricultural or other purposes.216 Unless
and until the land classified as such is released in an official proclamation
so that it may form part of the disposable agricultural lands of the public
domain, the rules on confirmation of imperfect title do not apply.217
209
Id., 173.
210
Menchavez v. Teves, Jr., 449 SCRA 380, 391 (2005).
211
Id.
212
Id.
213
Id.
214
Collado v. CA, supra.
215
Id.
216
Id., 369.
217
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 75
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
The classification of public lands, therefore, is an exclusive prerogative
of the Executive Department of the Government and not of the courts.226
In the absence of such classification, the land remains as unclassified
land until it is released therefrom and rendered open to disposition.227
This is in consonance with the Regalian doctrine that all lands of the
public domain belong to the State, and that the State is the source of any
asserted right to ownership in land and charged with the conservation of
such patrimony.228 As such, all lands not appearing to be clearly within
private ownership are presumed to belong to the State. Unless public
land is shown to have been reclassified or alienated to a private person by
the State, it remains part of the inalienable public domain. To overcome
this presumption, incontrovertible evidence must be established that the
land subject of the application is alienable or disposable.229
[21.7] When Public Lands Classified As Patrimonial Property
Since property of public dominion is outside the commerce of man
and not susceptible to private appropriation and acquisitive prescription,
the adverse possession which may be the basis of a grant of title in the
confirmation of an imperfect title under the Public Land Act refers only
to alienable or disposable portions of the public domain.230 It is only after
the Government has declared the land to be alienable and disposable
agricultural lands that the year of entry, cultivation and exclusive and
adverse possession can be counted for purposes of an imperfect title.231
From the foregoing, it appears that agricultural public lands are
classified as patrimonial property of the State as soon as they are made
available for alienation or disposition. Prior to the reclassification
of public lands into agricultural lands and prior to their being made
available for alienation and disposition, they form part of the property of
public dominion, under Article 420, paragraph 2, “for the development
of the national wealth” and under Section 2 of Article XII of the 1987
Constitution.232
226
Director of Lands v. Court of Appeals, 129 SCRA 689, 692.
227
Id.
228
Id.
229
Republic v. Lao, 405 SCRA 291, 298.
230
Celestial v. Cachopero, 413 SCRA 469, 485.
231
Id.
232
II Tolentino, Civil Code of the Phil., 1992 ed., 38.
74 PROPERTY
[21.4] Submerged Lands
Submerged lands, like the waters (sea or bay) above them, are
part of the State’s inalienable natural resources.218 Submerged lands are
property of public dominion, absolutely inalienable and outside the
commerce of man.219 This is also true with respect to foreshore lands.
Any sale of submerged or foreshore lands is void being contrary to the
Constitution.220
(B) Lands of the Public Domain
[21.5] Classification
Under Section 3 of Article XII of the 1987 Philippine Constitution,
lands of the public domain are classified into agricultural, forest or
timber, mineral lands and national parks. Only agricultural lands are
allowed, however, to be alienated.221 On the other hand, mineral and
timber or forest lands are not subject to private ownership unless they
are first reclassified as agricultural lands and so released for alienation.222
Hence, it is already a settled rule that forest lands or forest reserves are
not capable of private appropriation, and possession thereof, however
long, cannot convert them into private property, unless such lands are
reclassified and considered disposable and alienable by the Director of
Forestry.223
[21.6] Classification of Public Lands, Prerogative of the Executive
Agricultural public lands may be defined as those alienable
portions of the lands of the public domain which are not forest or
timber, mineral,224 or national parks.225 Their disposition is provided
for under Commonwealth Act No. 141 (Sections 6-7), which states
that it is only the President, upon the recommendation of the proper
department head, who has the authority to classify the lands of the
public domain into alienable or disposable, timber and mineral lands.
218
Chavez v. Public Estates Authority, supra.
219
Id.
220
Id.
221
Sec. 3, Art. XII, 1987 Philippine Constitution.
222
Director of Forestry v. Villareal, 170 SCRA 598, 601 (1989).
223
Republic v. IAC, 186 SCRA 88, 93 (1990).
224
See Republic v. De Porkan, 151 SCRA 88; Krivenko v. Register of Deeds, 79 SCRA 461;
Mapa v. Insular Government, 10 Phil. 175.
225
See Sec. 3, Art. XII, 1987 Constitution.
76 PROPERTY
§ 22. Characteristics of Properties of Public Dominion
The following are the characteristics of properties of public
dominion:
[22.1] They Are Outside the Commerce of Man
Properties of public dominion are outside the commerce of man.233
Being outside the commerce of man, it cannot be alienated or leased
or otherwise be the subject matter of contracts.234 Hence, the right of
the public to use public property may not be bargained away through
contract.235
In Dacanay v. Asistio,236 for example, when certain public streets
in Caloocan City were converted into flea markets and leased to
several vendors, the Supreme Court held that such leases were null and
void since a public street is property for public use hence outside the
commerce of man. Being outside the commerce of man, it may not be
the subject of lease or other contract. In this case, the Court directed
the City Mayor to demolish the market stalls occupying said city
streets. In Maneclang v. Intermediate Appellant Court,237 the Supreme
Court declared as null and void the compromise agreement between
the parties since the stipulations contained therein partake of the nature
of an adjudication of ownership in favor of one of the parties of the
fishpond in dispute which was found to be originally a creek forming a
tributary of the Agno River.
Being outside the commerce of man, these properties may not be
alienated. In Laurel v. Garcia,238 for example, the Supreme Court held
that since the Roppongi Property is a property of public dominion it
cannot be alienated. In Chavez v. Public Estates Authority,239 the Court
voided the joint venture agreement between PEA and Amari since the
former conveyed to the latter submerged lands, which are declared to
233
Dacanay v. Asistio, Jr., 208 SCRA 404, 411 (1992).
234
Id., citing Villanueva v. Castañeda and Macalino, 15 SCRA 142; Municipality of Cavite
v. Rojas, 30 Phil. 602; Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot v.
De la Fuente, 48 O.G. 4860.
235
Id.
236
Supra.
237
114 SCRA 553 (1986).
238
187 SCRA 797, 808 (1990).
239
Supra.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 77
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
be part of the State’s inalienable natural resources, hence, absolutely
inalienable. In Binalay v. Manalo,240 it was held that the buyer did
not acquire private ownership of the bed of the eastern branch of the
Cagayan River even if it was included in the deeds of absolute sale
executed by the sellers since the sellers “could not have validly sold
land that constituted property of public dominion.”
With respect to natural resources, however, the Constitution
allows the State to enter into co-production, joint venture or production-
sharing agreements with private individuals or corporations for their
exploration, development and utilization.241 With respect to fishponds
which are likewise owned by the State,242 they may be leased although
they may not be alienated. Under Section 45 of R.A. No. 8550, otherwise
known as “The Philippine Fisheries Code of 1998,” public lands such as
tidal swamps, mangroves, marshes, foreshore lands and ponds suitable
for fishery operations shall not be disposed or alienated but they may be
the subject matter of a fishpond lease agreement.
[22.2] They Are Not Susceptible To Private Appropriation and
Acquisitive Prescription
Properties of public dominion are not susceptible to private ap-
propriation and acquisitive prescription.243 Thus, in Celestial v. Cacho-
pero,244 the Court held that the petitioner’s claim of ownership over a
parcel of land which is a dried-up bed of the Salunayan Creek based
on her alleged long term adverse possession must necessarily fail since
the same is a property of public dominion. In Palomo v. Court of Ap-
peals,245 the Court held that the adverse possession which may be the
basis of a grant of title in confirmation of imperfect title cases applies
only to alienable lands of the public domain. In this case, since the sub-
ject property is part of the reservation for provincial park purposes and,
thus, part of the forest zone, it is not registrable and its possession, no
matter how lengthy, cannot convert it into private property.
240
Supra.
241
See Sec. 2, Article XII of the 1987 Constitution.
242
Menchavez v. Teves, Jr., 449 SCRA 380, 391 (2005).
243
Celestial v. Cachopero, supra, 485.
244
Supra.
245
266 SCRA 392, 401 (1997).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 79
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
used for street sprinkling, a police patrol automobile, police station and
market together with the lots which they occupy. The Court declared the
attachment as invalid.
In Tufexis v. Olaguera,254 the Court likewise held that the usufruct
of the public market was not subject to attachment on account of its
being of a public character.
[22.4] They Cannot Be Burdened With Voluntary Easements
In Villarico v. Sarmiento,255 for example, the petitioner claimed a
right of way on a lot owned by the DPWH and on which stairways were
built for the use of the people as a passageway to the Ninoy Aquino
Avenue. The Supreme Court held that since the lot is a property of public
dominion devoted to public use, it cannot be burdened by a voluntary
easement or right of way in favor of Villarico.
Villarico v. Sarmiento
442 SCRA 110 (2004)
Villarico is the owner of a lot in La Huerta, Parañaque City. His lot
is separated from the Ninoy Aquino Avenue (highway) by a strip of land
belonging to the government. As this highway was elevated by four meters
and therefore higher than adjoining areas, the DPWH constructed stairways at
several portions of this strip of public land to enable the people to have access
to the highway. Sometime in 1991, Villarico had a building constructed on a
portion of said government land. In November of that same year, a part thereof
was occupied by Andok’s Litson and Marites’ Carinderia. In 1993, by means of
a Deed of Exchange of Real Property, Villarico acquired a portion of the area
owned by the government and registered in his name under TCT No. 74430.
In 1995, Villarico filed with the RTC of Parañaque City a complaint for accion
publiciana against several respondents, including Sarmiento, alleging that
respondents’ structures on the government land closed his “right of way” to the
Ninoy Aquino Avenue and encroached on a portion of his lot covered by TCT
No. 74430. Respondents deny the allegations claiming that they have been
issued licenses and permits by Parañaque City to construct their buildings on
the area and that Villarico has no right over the subject property as it belongs
to the government.
In holding that neither Villarico nor respondents have a right of possession
254
32 Phil. 654.
255
442 SCRA 110 (2004).
78 PROPERTY
Since properties of public dominion are not subject to private
appropriation, they cannot be registered under the Land Registration
Law and be the subject of a Torrens Title. In Republic v. Court of
Appeals,246 the Court ruled that the lower court cannot validly order the
registration of two lots in the names of private respondents since these
lots “were portions of the bed of the Meycauayan river and are therefore
classified as property of the public domain under Article 420, paragraph
1 and Article 502, paragraph 1 of the Civil Code of the Philippines.”
In Republic v. Intermediate Appellate Court,247 the Court likewise held
that the subject parcel of land, being part of a forest reserve, cannot be
registered.
[22.3] They Are Not Subject To Attachment and Execution
Properties of public dominion, being for public use, are not subject
to levy, encumbrance or disposition through public or private sale.248
Any encumbrance, levy on execution or auction sale of any property of
public dominion is void for being contrary to public policy.249 Essential
public services will stop if properties of public dominion are subject to
encumbrances, foreclosures and auction sale.250 Hence, it was held in
one case251 that the City of Parañaque cannot foreclose and compel the
auction sale of the 600-hectare runway of the MIAA for non-payment
of real estate tax since the Airport Lands and Buildings of MIAA are
properties of public dominion.252
In Vda. de Tan Toco v. Municipal Council of Iloilo,253 the Supreme
Court held that the property of a municipality, whether real or personal,
necessary for governmental purposes cannot be attached and sold at
public auction to satisfy a judgment against the municipality. According
to the Court, the necessity for government service justifies that the
property for public use of the municipality be exempt from execution.
In this case, by virtue of a writ of execution obtained by the plaintiff
against the Municipality of Iloilo, the sheriff attached two auto trucks
246
132 SCRA 514 (1984).
247
186 SCRA 88 (1990).
248
Manila International Airport Authority v. CA, supra.
249
Id.
250
Id.
251
Id.
252
See supra § 18.9.
253
49 Phil. 52.
80 PROPERTY
over the disputed lot where the stairways were built as it is a property of public
dominion, the Supreme Court explained that “the lot on which the stairways
were built is for the use of the people as passageway to the highway” belongs
to the State. Consequently, it is a property of public dominion. And considering
that the said lot is a property of public dominion, it cannot be burdened by a
voluntary easement or right of way in favor of Villarico. In fact, its use by the
public is by mere tolerance of the government through the DPWH. Hence,
Villarico cannot appropriate it for himself and he cannot claim any right of
possession over it.
Art. 421. All other property of the State, which is not of the character
stated in the preceding article, is patrimonial property. (340a)
§ 23. Patrimonial Property of the State
All other property of the State, which is not of the character stated
in Article 420 of the New Civil Code, is patrimonial property.256 It is
considered as a property of the State in what may be called the private
sense.257 It is said that over this kind of property the State has the same
rights and has the same power of disposition as private individuals
subject, of course, to existing rules and regulations.258 Thus, in Chavez
v. Public Estates Authority,259 the Court held that “government owned
lands, as long they are patrimonial property, can be sold to private
parties, whether Filipino citizens or qualified private corporations.”
[23.1] Examples of Patrimonial Property
[23.1.1] Friar Lands
From the beginnings of Spanish colonization up to the establish-
ment of American sovereignty, religious corporations had acquired
large tracts of land in the Philippines, breeding feelings of unrest and
agitation among Filipino tenants occupying those lands.260 In order to
avert any outbreak of violence, the Philippine Bill of 1902 authorized
the Insular Government to exercise the power of eminent domain over
lands which, on August 13, 1898, were owned or held by religious
256
Art. 421, NCC.
257
Hinunangan v. Director of Lands, 24 Phil. 124, 127 (1913).
258
II Caguioa, Civil Code of the Phil., 1966 ed., 36.
259
403 SCRA 1, 31, G.R. No. 133250, May 6, 2003.
260
Dissenting Opinion of J. Tinga in Alonso v. Cebu Country Club, Inc., 417 SCRA 115,
citing A. Mañalac and R. Mañalac, Land Registration, 3rd ed., 95.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
orders in such tracts or parcels or in such manner as in the opinion of
the Philippine Commission injuriously affected the peace and welfare
of the people. Hence, the Friar Lands Act (Act No. 1120) was passed to
appease the restless Filipinos and to curtail and diminish the influence
of the Catholic Church. Thus, lands acquired by the government from
religious corporations or orders (during the Taft administration in 1903)
are referred to as “friar lands.”
Friar lands over which the Government holds title are not public
lands but private or patrimonial property of the State.261 However, they
can be alienated only upon proper compliance with the requirements of
Act No. 1120 or the Friar Lands Act.262
[23.1.2] Alienable and Disposable Lands of the Public Do-
main
Alienable lands of the public domain, or those available for alien-
ation or disposition, are part of the patrimonial properties of the State.263
They are State properties available for private ownership except that
their appropriation is qualified by Sections 2 and 3 of Article XII of the
Constitution and the public land laws.264
Before lands of the public domain are declared available for
private acquisition, or while they remain intended for public use or for
public service or for the development of national wealth, they would
partake of properties of public dominion just like mines before their
concessions are granted, in which case, they cannot be alienated or
leased or otherwise be the object of contracts.265 In contrast, patrimonial
properties may be bought or sold or in any manner utilized with the
same effects as properties owned by private persons.266
[23.1.3] Lands Covered by Republic Act No. 7227
Well-settled is the doctrine that public land granted to an end-
user government agency for a specific public use may subsequently
261
Jacinto v. Director of Lands, 49 Phil. 853 (1926).
262
Alonso v. Cebu Country Club, Inc., supra.
263
Separate Opinion of J. Bellosillo in Chavez v. PEA, 403 SCRA 1, 37, citing II Tolentino,
Civil Code of the Philippines 38 (1992).
264
Id.
265
Id., at p. 38, citing Montano v. Insular Government, 22 Phil. 572 (1909).
266
Id.; citing Manila Lodge No. 761 v. CA, 73 SCRA 162.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
“Art. 1113. All things which are within the commerce
of men are susceptible of prescription, unless otherwise pro-
vided. Property of the State or any of its subdivisions not
patrimonial in character shall not be the object of prescrip-
tion.”
It has been argued that the afore-quoted provision impliedly
authorizes the acquisition of patrimonial properties of the State by way
of acquisitive prescription.
However, it is an ironclad dictum that prescription can never lie
against the Government.270 Thus, it is expressly provided in paragraph
(4) of Article 1108 that prescription, both acquisitive and extinctive,
does not run against the State and its subdivisions. The provisions of
Article 1113 quoted above are not even in conflict with paragraph (4)
of Article 1108. Far from being in conflict with the latter, the former in
fact reiterates the rule in the latter that property of the State or any of its
subdivision shall not be the object of prescription.
The rule that Statutes of Limitation do not run against the State,
unless therein expressly provided, is founded on “the great principle
of public policy, applicable to all governments alike, which forbids
that the public interests should be prejudiced by the negligence of the
officers or agents to whose care they are confided.”271 Hence, the rule
stated in paragraph (4) of Article 1108 cannot be modified, altered or
changed by mere implication. Had Congress really intended to subject
patrimonial properties of the State to acquisitive prescription it could
have expressly provided the same in Article 1113.
In Alonso v. Cebu Country Club, Inc.,272 the Supreme Court held in
unequivocal language:
Neither may the rewards of prescription be success-
fully invoked by respondent, as it is an iron-clad dictum that
prescription can never lie against the Government. Since re-
spondent failed to present the paper trail of the property’s
conversion to private property, the lengthy possession and
occupation of the disputed land by respondent cannot be
270
Alonso v. Cebu Country Club, Inc., supra, 127.
271
Id.
272
Id.
81 82 PROPERTY
be withdrawn by Congress from public use and declared patrimonial
property to be sold to private parties.267 R.A. No. 7227 creating the
BCDA is a law that declares specific military reservations no longer
needed for defense or military purposes and reclassifies such lands as
patrimonial property for sale to private parties.268
[23.2] Disposition of Patrimonial Property
It was held in Laurel v. Garcia,269 that any conveyance of a real
property falling under the patrimonial property of the State must be
authorized and approved by a law enacted by the Congress. The Court
cited Section 48, Book I of the Administrative Code of 1987 (Executive
Order No. 292), which reads:
“SEC. 48. Official Authorized to Convey Real Property.
— Whenever real property of the Government is authorized
by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following:
(1) For property belonging to and titled in the name
of the Republic of the Philippines, by the President, unless
the authority therefore is expressly vested by law in another
officer.
(2) For property belonging to the Republic of the
Philippines but titled in the name of any political subdivision
or of any corporate agency or instrumentality by the executive
head of the agency or instrumentality.”
Hence, in the case of Laurel, the Court held that even if the
Roppongi property is patrimonial property of the State, then President
Corazon Aquino could not sell it since there was no law authorizing her
to do so.
[23.3] Not Susceptible To Acquisitive Prescription
There is a view to the effect that patrimonial properties of the
State are subject to acquisitive prescription on the basis of Article 1113
of the New Civil Code, which reads:
267
Chavez v. Public Estates Authority, 403 SCRA 1, 31 (2003).
268
Id.
269
187 SCRA 797, 812.
83 84 PROPERTY
counted in its favor, as the subject property being a friar
land, remained part of the patrimonial property of the Gov-
ernment. Possession of patrimonial property of the Govern-
ment, whether spanning decades or centuries, can not ipso
facto ripen into ownership. Moreover, the rule that statutes
of limitation do not run against the State, unless therein ex-
pressly provided, is founded on “the great principle of public
policy, applicable to all governments alike, which forbids
that the public interests should be prejudiced by the negli-
gence of the officers or agents to whose care they are con-
fided.” (Italics supplied)
Consequently, unless the law expressly provides, a patrimonial
property of the State is not subject to acquisitive prescription. An ex-
ample of a law that allows the acquisition of patrimonial properties of
the State by way of acquisitive prescription is Commonwealth Act No.
141 which authorizes confirmation of imperfect title. The adverse pos-
session which may be the basis of a grant of title in confirmation of im-
perfect title cases, however, applies only to alienable lands of the public
domain273 — which fall under the patrimonial properties of the State.
Art. 422. Property of public dominion, when no longer intended for
public use or for public service, shall form part of the patrimonial property
of the State. (341a)
§ 24. Conversion: From Public Dominion to Patrimonial Property
Property of public dominion, when no longer intended for public
use or for public service, shall form part of the patrimonial property of
the State.274 It should be noted that Article 422 of the New Civil Code
does not address the question of who has the authority to effect such
conversion and neither does it set out or refer to any procedure for
such conversion.275 In other words, no specific formula or procedure of
conversion is provided in Article 422. Our case law, however, contains
some fairly explicit pronouncements on this point.276
273
Palomo v. Court of Appeals, supra.
274
Art. 422, NCC.
275
See Dissenting Opinion of J. Feliciano in Laurel v. Garcia, supra, 821.
276
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
When land of the public domain ceases to be one, or when the
change takes place, is a question our courts have debated early.277 In
Municipality of Oas v. Roa,278 it was held that property of the public
dominion, a public plaza in this instance, becomes patrimonial property
upon use thereof for purposes other than a plaza. In Municipality of
Hinunangan v. Director of Lands,279 it was held that when a fortress
ceases to be used for the purpose for which it was constructed, it
becomes a patrimonial property of the state. In these two cases, the
character of the property, and any change occurring therein, depends on
the actual use to which it is dedicated.
In Ignacio v. Director of Lands280 case, however, the Supreme
Court ruled that a property continues to be part of the public domain,
not available for private appropriation or ownership until there is a
formal declaration on the part of the government, either through the
Executive department or the Legislative, to the effect that the property
is no longer needed for public service, for public use or for special
industries. Thus, under Ignacio, either the Executive Department or
the Legislative Department may convert property of the State of public
dominion into patrimonial property of the State.
In Cebu Oxygen Acetylene v. Bercilles,281 the City Council of
Cebu by resolution declared a certain portion of an existing street as an
abandoned road, “the same not being included in the city development
plan.” Subsequently, by another resolution, the City Council of Cebu
authorized the acting City Mayor to sell the land through public bidding.
Although there was no formal and explicit declaration of conversion of
property for public use into patrimonial property, the Supreme Court
declared the withdrawal of the property in question from public use and
its subsequent sale as valid.
Then came the case of Laurel v. Garcia.282 In this case, the prop-
erty involved (“Roponggi property”) was acquired from the Japanese
277
See Concurring Opinion of J. Sarmiento in Laurel v. Garcia, supra, 818.
278
7 Phil. 20 (1906), cited in the Concurring Opinion of J. Sarmiento in Laurel v. Garcia,
supra, 818.
279
24 Phil. 124 (1913), cited in the Concurring Opinion of J. Sarmiento in Laurel v. Garcia,
supra, 818.
280
108 Phil. 335 (1960).
281
66 SCRA 481 (1975).
282
187 SCRA 797 (1990).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
§ 25. Property of Provinces, Cities and Municipalities
[25.1] Classification of Properties of Political Subdivisions
The property of provinces, cities and municipalities is divided into
property for public use and patrimonial property.283 The first consists of
the provincial roads, city streets, municipal streets, squares, fountains,
public waters, promenades, and public works for public service paid for
by said provinces, cities or municipalities.284 All other property possessed
by said provinces, cities or municipalities is patrimonial.285
The nature of properties owned by cities (municipalities and
provinces) in this country is determined by the character of the use or
service for which they are intended or devoted.286 Properties which are
intended for public use or for some public service are properties for
public use.287 All others are patrimonial properties.288 It matters not that
the property is not actually devoted for public use or for some public
service.289 If it has been intended for such use or service, and the city
(municipality or province) has not devoted it to other uses, or adopted
any measure which amounted to a withdrawal of the property from public
use and service, the same remains property for public use, the fact that it
is not actually devoted for public use or service notwithstanding.290
Agripino Capitulo, et al. v. Alejo Aquino
No. 15488-R, 53 O.G. 1477 (1956)
This case involves a lot owned by the City of Manila and situated around
the intersections of Andalucia, Governor Forbes and Aragon Streets, City of
Manila. This lot was donated to the City of Manila by the Sulucan Development
Company exclusively for street purposes. Since its acquisition, the City of
Manila formed the project to construct thereon a traffic circle. For reasons,
however, not disclosed by the records, this project had not been carried out.
Hence, it remained vacant. In ruling that the lot in question is property for
283
Art. 423, Civil Code; Macasiano v. Diokno, 212 SCRA 464, 469 (1992); Pilapil v. CA,
216 SCRA 33, 46 (1992).
284
Art. 424, 1st par., Civil Code; cited in Pilapil v. CA, supra, at p. 46.
285
Art. 424, 2nd par., Civil Code.
286
Agripino Capitulo, et al. v. Alejo Aquino, No. 15488-R, 53 O.G. 1477, November 19,
1956.
287
Ibid.
288
Ibid.
289
Ibid.
290
Ibid.
85 86 PROPERTY
government as indemnification to the Filipino people for their losses
and suffering during World War II. As intended, it became the site of
the Philippine Embassy in Japan for sometime until the embassy was
transferred to another site. Since then, the Philippine Government has
failed to develop the Roponggi property. In 1985, the Executive Depart-
ment passed an administrative order creating a committee to study the
disposition or utilization of some properties, including the Roponggi
property. In 1987, the President issued Executive Order No. 296 pro-
viding that some properties, including the Roponggi property, be made
available for sale or lease to non-Filipinos. Answering the question as
to whether the Roponggi property has been converted into patrimonial
property, the Supreme Court held that abandonment of the intention to
use the Roponggi property for public service and to make it a patrimo-
nial property “cannot be inferred from the non-use alone specially if the
non-use was attributable not to the government’s own deliberate and
indubitable will but to a lack of financial support to repair and improve
the property.” The Court likewise ruled that E.O. No. 296 does not de-
clare that the property has lost its public character since the executive
order merely intends to make the properties available to foreigners and
not to Filipinos. It was based on the wrong premise or assumption that
the Roponggi was earlier converted into alienable real property.
The case of Laurel v. Garcia has cleared the uncertainties brought
about by earlier interpretations that the nature of property — whether
public or patrimonial — is predicated on the manner it is actually used,
or not used. In fine, it is now clear that there must be an affirmative act,
either on the part of executive or the legislative, to reclassify property of
the public dominion into patrimonial. The intention to reclassify must
be clear, definite and must be based on correct legal premises. Hence,
the conversion can no longer be inferred from the non-use alone of the
property for the purpose to which it is intended.
Art. 423. The property of provinces, cities, and municipalities is
divided into property for public use and patrimonial property. (343)
87 88 PROPERTY
public use of the City of Manila and not its patrimonial property, the Court of
Appeals held —
“xxx. The nature of properties owned by cities in this country
is determined by the character of the use or service for which they
are intended or devoted. Properties which are intended for public
use or for some public service are properties for public use. All
others are patrimonial properties. Art. 424, new Civil Code. It
matters not that the property is not actually devoted for public use
or for some public service. If it has been intended for such use or
service, and the city has not devoted it to other uses, or adopted
any measure which amounted to a withdrawal of the property from
public use and service, the same remains property for public use,
the fact that it is not actually devoted for public use or service
notwithstanding.”
Art. 424. Property for public use, in the provinces, cities, and munic-
ipalities, consists of the provincial roads, city streets, municipal streets,
the squares, fountains, public waters, promenades, and public works for
public service paid for by said provinces, cities, or municipalities.
All other property possessed by any of them is patrimonial and shall
be governed by this Code, without prejudice to the provisions of special
laws. (344a)
§ 26. Property for Public Use of Provinces, Cities and Municipali-
ties
[26.1] Governed By Same Principles as Property of Public Domin-
ion
The property of provinces, cities and municipalities for public use
is governed by the same principles as property of public dominion of
the same character.291 Hence, the following jurisprudence or principles
are applicable to properties of the political subdivisions (provinces,
cities and municipalities) for public use:
a. They are outside the commerce of man.292 Being outside
the commerce of man, it cannot be alienated or leased or
otherwise be the subject matter of contracts.293
291
Pilapil v. CA, supra, at p. 46, citing Tolentino, Civil Code, Vol. II, 1983 ed., 38.
292
Dacanay v. Asistio, Jr., 208 SCRA 404, 411 (1992).
293
Ibid., citing Villanueva v. Castañeda and Macalino, 15 SCRA 142; Municipality of Cav-
ite v. Rojas, 30 Phil. 602; Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot
v. De la Fuente, 48 O.G. 4860.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
b. They cannot be acquired by prescription.294
c. They are not subject to attachment and execution. 295
d. They cannot be burdened by any voluntary easement.296
Harty v. Municipality of Victoria
13 Phil. 152
When the town of Victoria was formed, a large public plaza was left in
the center. This land formerly belonged to one Tañedo, who donated part of the
land for religious purposes, which portion was later occupied by the church.
The remaining portion was kept an open space as a plaza. It is later claimed
that the entire plaza was later on donated by the municipality to the church.
The Supreme Court ruled that the property could not have been validly
donated by the town to the church because the same was property for public
use. Even assuming that the property was originally private property of
Tañedo, it must be assumed that he waived his right thereto for the benefit of
the townspeople since they have continuously enjoyed the use of the land as
a public plaza. The property thus became property for public use. As such, it
could not have been the validly donated by the town to the church. The same
could not likewise be acquired by prescription.
Municipality of Antipolo v. Zapanta
133 SCRA 820 (1984)
In this case, the disputed property has been considered to be public land
by the Municipality of Antipolo subject to its use and permission to use. It
has been the site of the public market as far back as 1908, or at the latest,
since 1920. Gradually, additional public structures were built thereon, like
the Puericulture and Family Planning Center, the Integrated National Police
Building, the Office of the Municipal Treasurer, and the public abattoir. Those
public structures occupy almost the entire area of the land. Sometime in 1977,
an application for the registration of the disputed property was filed by two
distinct applicants before the Court of First Instance of Rizal alleging that the
disputed property was declared for taxation purposes in their names or of their
predecessors-in-interest as early as 1918. The applicants claimed that they
merely tolerated occupants by the Municipality of Antipolo. The CFI of Rizal
approved the application. Thus, the Municipality of Antipolo questioned the
approval made by the said court.
294
Insular Government v. Aldecoa, 19 Phil. 505.
295
Tan Toco v. Municipal Council of Iloilo, 49 Phil. 52.
296
2-II Colin & Capitant 520, cited in Tolentino, Civil Code, Vol. II, 1983 ed., 29-30.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
seem to us, is the authority competent to determine whether
or not a certain property is still necessary for public use.
Such power to vacate a street or alley is discretionary.
And the discretion will not ordinarily be controlled or
interfered with by the courts, absent a plain case of abuse
or fraud or collusion. Faithfulness to the public trust will
be presumed. So the fact that some private interests may
be served incidentally will not invalidate the vacation
ordinance.”
In Macasiano v. Diokno,302 the Court clarified the authority of the
local governments to close roads, streets and other similar public places.
According to the Court, “the closure should be for the sole purpose of
withdrawing the road or other public property from public use when
circumstances show that such property is no longer intended or necessary
for public use or public service.”303 When it is already withdrawn from
public use, the property then becomes patrimonial property of the local
government unit concerned.304 It is only then that the property can be
the object of an ordinary contract.305 In Macasiano, the Court nullified
the ordinance closing several streets in Parañaque for the purpose of
establishing flea markets thereon. The Court reasoned that “those roads
and streets which are available to the public in general and ordinarily
used for vehicular traffic are still considered public property devoted to
public use. In such case, the local government has no power to use it for
another purpose or to dispose of or lease it to private persons.”306
In another case,307 the Metropolitan Manila Commission simply
designated certain streets as sites for flea markets and pursuant thereto
the Caloocan City mayor opened several flea markets in some city
streets without withdrawing the same from public use. When the matter
was elevated to the Supreme Court, it ruled that the subject streets were
properties for public use hence outside of the commerce of man and
may not therefore be subjected to lease or other contract. The Court
302
Supra.
303
At p. 470.
304
Article 422, Civil Code; Cebu Oxygen, etc., et al. v. Bercilles, et al., supra.
305
Macasiano v. Diokno, supra.
306
Ibid., p. 471.
307
Dacanay v. Asistio, supra.
89 90 PROPERTY
In ruling in favor of the Municipality of Antipolo, the Supreme Court
explained that at the time the application for registration was filed, the disputed
property was already devoted to public use and public service. Therefore, it
was outside the commerce of man and could no longer be subject to private
registration.
[26.2] Provincial Roads, City Streets and Municipal Streets
A public street is property for public use and hence outside the
commerce of man.297 Being outside the commerce of man, it may not be
the subject of lease or other contract.298
Local governments have no authority whatsoever to control or
regulate the use of public properties, like roads and streets, unless
specific authority is vested upon them by Congress.299 In the case of
Cebu Oxygen & Acetylene Co., Inc. v. Bercilles,300 the City Council of
Cebu was expressly authorized under its Revised Charter to “close
any city road, street or alley, boulevard, avenue, park or square.” The
same Charter likewise expressly states that “property thus withdrawn
from public servitude may be used or conveyed for any purpose for
which other real property belonging to the City may be lawfully used or
conveyed.” Thus, in that case the Supreme Court held that the withdrawal
of an existing road from public use was valid thereby converting the
withdrawn property into patrimonial property which can be the object
of an ordinary contract.
In the case of Favis v. City of Baguio,301 the power of the City
Council of Baguio City to close city streets and withdraw them from
public use was also assailed. The Supreme Court said:
“5. So it is, that appellant may not challenge the city
council’s act of withdrawing a strip of Lapu-Lapu Street at
its dead end from public use and converting the remainder
thereof into an alley. These are acts well within the ambit of
the power to close a city street. The city council, it would
297
Dacanay v. Asistio, supra.
298
Ibid.
299
Macasiano v. Diokno, supra, at p. 469.
300
66 SCRA 481 (1975).
301
27 SCRA 1060.
91 92 PROPERTY
further held that the right of the public to use the city streets may not be
bargained away through contract.
Dacanay v. Asistio, Jr.
208 SCRA 404 (1992)
May public streets or thoroughfares be leased or licensed to market
stallholders by virtue of a city ordinance or resolution of the Metro Manila
Commission? This is the issue posed in this case. The Supreme Court ruled
that “a public street is property for public use and hence outside the commerce
of man. Being outside the commerce of man, it may not be the subject of
lease or other contract.” The Court adds: “As the stallholders pay fees to the
City Government for the right to occupy portions of the public street, the City
Government, contrary to law, has been leasing portions of the streets to them.
Such leases or licenses are null and void for being contrary to law. The right of
the public to use the city streets may not be bargained away through contract.
The interests of a few should not prevail over the good of the greater number
in the community whose health, peace, safety, good order and general welfare,
the respondent city officials are under legal obligation to protect.”
Macasiano v. Diokno
212 SCRA 464 (1992)
In this case, the then municipality of Parañaque passed an ordinance
authorizing the closure of several municipal streets for purposes of converting
them as sites for flea market and/or vending areas. The municipality then
entered into an agreement with Palanyag for the operation of flea market in
the said streets. Subsequently, Brig. Gen. Macasiano of the PNP ordered the
destruction and confiscation of the stalls. Palanyag went to court. The trial court
upheld the validity of the ordinance passed by the Municipality of Parañaque.
Macasiano questioned the ruling of the trial court before the Supreme Court.
In sustaining Macasiano, the Court explained —
“We find the petition meritorious. In resolving the question
of whether the disputed municipal ordinance authorizing the flea
market on the public streets is valid, it is necessary to examine
the laws in force during the time the said ordinance was enacted,
namely, Batas Pambansa Blg. 337, otherwise known as Local
Government Code, in connection with established principles
embodied in the Civil Code on property and settled jurisprudence
on the matter.
The property of provinces, cities and municipalities is di-
vided into property for public use and patrimonial property (Art.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
423, Civil Code). As to what consists of property for public use,
Article 424 of Civil Code states:
ART. 424. Property for public use, in the provinces, cities
and municipalities, consists of the provincial roads, city streets, the
squares, fountains, public waters, promenades, and public works for
public service paid for by said provinces, cities or municipalities.
All other property possessed by any of them is patrimonial
and shall be governed by this Code, without prejudice to the
provisions of special laws.
Based on the foregoing, J. Gabriel, G.G. Cruz, Bayanihan,
Lt. Garcia Extension and Opena streets are local roads used for
public service and are therefore considered public properties of
respondent municipality. Properties of the local government which
are devoted to public service are deemed public and are under the
absolute control of Congress (Province of Zamboanga del Norte v.
City of Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334).
Hence, local governments have no authority whatsoever to control
or regulate the use of public properties unless specific authority
is vested upon them by Congress. One such example of this
authority given by Congress to the local governments is the power
to close roads as provided in Section 10, Chapter II of the Local
Government Code, which states:
SEC. 10. Closure of roads. — A local government unit
may likewise, through its head acting pursuant to a resolution
of its sangguniang and in accordance with existing law and the
provisions of this Code, close any barangay, municipal, city
or provincial road, street, alley, park or square. No such way or
place or any part thereof shall be closed without indemnifying any
person prejudiced thereby. A property thus withdrawn from public
use may be used or conveyed for any purpose for which other real
property belonging to the local unit concerned might be lawfully
used or conveyed. (Emphasis ours).
However, the aforestated legal provision which gives au-
thority to local government units to close roads and other similar
public places should be read and interpreted in accordance with
basic principles already established by law. These basic principles
have the effect of limiting such authority of the province, city or
municipality to close a public street or thoroughfare. Article 424
of the Civil Code lays down the basic principle that properties of
public dominion devoted to public use and made available to the
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
settled as early as 1915 in the case of Municipality of Cavite v. Rojas,310
where the Supreme Court declared as null and void the lease of a public
plaza of the said municipality in favor of a private person. Mr. Justice
Torres said in that case:
According to Article 344 of the Civil Code: “Property
for public use in provinces and in towns comprises the
provincial and town roads, the squares, streets, fountains,
and public waters, the promenades, and public works of
general service supported by said towns or provinces.”
The said Plaza Soledad being a promenade for public
use, the municipal council of Cavite could not in 1907
withdraw or exclude from public use a portion thereof in
order to lease it for the sole benefit of the defendant Hilaria
Rojas. In leasing a portion of said plaza or public place to the
defendant for private use the plaintiff municipality exceeded
its authority in the exercise of its powers by executing a
contract over a thing of which it could not dispose, nor is it
empowered so to do.
The Civil Code, Article 1271, prescribes that everything
which is not outside the commerce of man may be the object
of a contract, and plazas and streets are outside of this
commerce, as was decided by the supreme court of Spain in
its decision of February 12, 1895, which says: “Communal
things that cannot be sold because they are by their very
nature outside of commerce are those for public use, such as
the plazas, streets, common lands, rivers, fountains, etc.”
Therefore, it must be concluded that the contract,
Exhibit C, whereby the municipality of Cavite leased to
Hilaria Rojas a portion of the Plaza Soledad is null and void
and of no force or effect, because it is contrary to the law and
the thing leased cannot be the object of a contract.
In Espiritu v. Municipal Council of Pozorrubio,311 the Supreme
Court held that town plaza cannot be used for the construction of
310
Supra.
311
102 Phil. 869-870.
93 94 PROPERTY
public in general are outside the commerce of man and cannot be
disposed of or leased by the local government unit to private per-
sons. Aside from the requirement of due process which should be
complied with before closing a road, street or park, the closure
should be for the sole purpose of withdrawing the road or other
public property from public use when circumstances show that
such property is no longer intended or necessary for public use or
public service. When it is already withdrawn from public use, the
property then becomes patrimonial property of the local govern-
ment unit concerned (Article 422, Civil Code; Cebu Oxygen, etc.,
et al. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975, 66
SCRA 481). It is only then that the respondent municipality can
use or convey them for any purpose for which other real prop-
erty belonging to the local unit concerned might be lawfully used
or conveyed in accordance with the last sentence of Section 10,
Chapter II of Blg. 337, known as Local Government Code. In one
case, the City Council of Cebu, through a resolution, declared the
terminal road of M. Boreas Street, Mabolo, Cebu City as an aban-
doned road, the same not being included in the City Development
Plan. Thereafter, the City Council passed another resolution autho-
rizing the sale of the said abandoned road through public bidding.
We held therein that the City of Cebu is empowered to close a city
street and to vacate or withdraw the same from public use. Such
withdrawn portion becomes patrimonial property which can be the
object of an ordinary contract (Cebu Oxygen and Acetylene Co.,
Inc. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975, 66
SCRA 481). However, those roads and streets which are available
to the public in general and ordinarily used for vehicular traffic are
still considered public property devoted to public use. In such case,
the local government has no power to use it for another purpose or
to dispose of or lease it to private persons. xxx”
[26.3] Squares, Fountains, Public Waters, Promenades, Etc.
Town or public plazas are properties of public dominion, to be
devoted to public use and to be made available to the public in general.308
They are beyond the commerce of man and so cannot be the subject
of lease or any other contractual undertaking.309 Indeed, this point was
308
Espiritu v. Municipal Council of Pozorrubio, 101 Phil. 869-870.
309
Villanueva v. Castañeda, 154 SCRA 142, 148 (1987), citing Municipality of Cavite v.
Rojas, 30 Phil. 602 and Espiritu v. Municipal Council of Pozorrubio, 101 Phil. 869-870.
95 96 PROPERTY
market stalls, specially of residences, and that such structures constitute
a nuisance subject to abatement according to law.
In Muyot v. de la Fuente,312 it was held that the City of Manila could
not lease a portion of a public sidewalk on Plaza Sta. Cruz, being likewise
beyond the commerce of man. Echoing Rojas, the decision said:
Appellants claim that they had obtained permit from
the government of the City of Manila, to construct booths
Nos. 1 and 2, along the premises in question, and for the use
of spaces where the booths were constructed, they had paid
and continued paying the corresponding rentals. Granting
this claim to be true, one should not entertain any doubt that
such permit was not legal, because the City of Manila does
not have any power or authority at all to lease a portion of a
public sidewalk. The sidewalk in question, forming part of
the public plaza of Sta. Cruz, could not be a proper subject
matter of the contract, as it was not within the commerce of
man (Article 1347, new Civil Code, and Article 1271, old
Civil Code). Any contract entered into by the City of Manila
in connection with the sidewalk, is ipso facto null and ultra
vires. (Municipality of Cavite v. Roxas, et al., 30 Phil. 603.)
The sidewalk in question was intended for and was used by
the public, in going from one place to another. “The streets
and public places of the city shall be kept free and clear for
the use of the public, and the sidewalks and crossings for the
pedestrians, and the same shall only be used or occupied for
other purposes as provided by ordinance or regulation; x x x.”
(Sec. 1119, Revised Ordinances of the City of Manila.) The
booths in question served as fruit stands for their owners and
often, if not always, blocked the free passage of pedestrians
who had to take the plaza itself which used to be clogged
with vehicular traffic.
§ 27. Patrimonial Property of Political Subdivisions
All other property possessed by provinces, cities or municipalities,
which is not intended for public use, is patrimonial.313
312
G.R. No. L-6534, 48 O.G. 4860.
313
Art. 424, 2nd par., Civil Code.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 97
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
Unlike in the classification regarding State properties, properties
for public service in the provinces, cities and municipalities are not
classified as public.314 However, the Supreme Court expressed the view
that it is not inclined to hold that municipal property held and devoted
to public service is in the same category as ordinary private property
because of dire consequences detrimental to the local community, i.e.,
ordinary properties can be levied and attached and they can even be
acquired thru adverse possession.315
In Agripino Capitulo, et al. v. Alejo Aquino,316 it was held that
properties which are intended for public use or for some public service
are properties for public use. All others are patrimonial properties.
[27.1] Reclaimed Lands Belonging To Political Subdivisions
The right to reclaim is a function of the sovereign who owns title to
all the lands and waters of the public domain.317 The authority to reclaim
is not a right or privilege accorded any person and the land reclaimed
does not belong to whosoever undertakes its reclamation.318 Even
private owners of lands adjoining bodies of water, especially the sea and
navigable waters, cannot motu proprio undertake reclamation of shores
and submerged lands and claim title thereto.319 Unless the State, through
Congress, grants this right, it is only the National Government that can
undertake reclamation work and assert title to reclaimed land.320
In several instances, however, the State delegated to specific
municipalities the right to reclaim land. For example, the Philippine
Legislature passed laws granting municipalities the right to reclaim
foreshore or marshy lands within their respective territories.321 The rule
remained, nonetheless, that no person, public or private, could undertake
reclamation work and own the land they reclaimed without a specific
grant from Congress.322 It was only with the passage of R.A. No. 1899
314
Province of Zamboanga del Norte v. City of Zamboanga, 22 SCRA 1334, 1342 (1968).
315
Ibid., at p. 1346.
316
No. 15488-R, (CA) 53 O.G. 1477, November 19, 1956.
317
Concurring Opinion of J. Puno in Republic v. CA, 299 SCRA 199, 301 (1998).
318
Id.
319
Id.
320
Id.
321
Id., citing R.A. No. 161, Bacolod City; R.A. No. 287, Catbalogan, Samar; R.A. No.
1099, Romblon.
322
Id., 301-302.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 99
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs
§ 28. Other Classification
The classification of properties other than those for public use in
the provinces, cities and municipalities as patrimonial under Article 424
of the New Civil Code is “without prejudice to the provisions of special
laws.” For purposes of this article, the principles obtaining under the Law
of Municipal Corporation can be considered as “special laws.”327 Hence,
in the case of Province of Zamboanga del Norte v. City of Zamboanga,328
the Supreme Court held that the classification of municipal property
devoted for distinctly governmental purposes as public should prevail
over the Civil Code classification. The same principle was applied in
the case of Vda. de Tantoco v. Municipal Council of Iloilo.329 In this case,
the Court held that municipal properties necessary for governmental
purposes are public in nature. Thus, the auto trucks used by the
municipality for street sprinkling, the police patrol automobile, police
stations and concrete structures with the corresponding lots used as
markets were declared exempt from execution and attachment since
they were not patrimonial properties.
Taking into consideration the cases of Province of Zamboanga del
Norte and Vda. de Tantoco, it appears that the properties of the political
subdivisions (provinces, cities and municipalities) are classified in
accordance with the use to which they are intended or devoted. In effect,
what was said by the Court of Appeals in Capitulo v. Aquino330 had been
reiterated and adopted by the Supreme Court. In Capitulo, the Court
of Appeals held that “the nature of properties owned by cities in this
country is determined by the character of the use or service for which
they are intended or devoted” and that “properties which are intended
for public use or for some public service are properties for public use.”
All other properties are patrimonial.
Province of Zamboanga del Norte v. City of Zamboanga
22 SCRA 1334 (1968)
In this case, Congress passed Commonwealth Act 39 converting the
Municipality of Zamboanga into Zamboanga City. Prior to the conversion,
the Municipality of Zamboanga used to be the provincial capital of the then
327
Province of Zamboanga del Norte v. City of Zamboanga, 22 SCRA 1334 (1968).
328
Supra.
329
Supra.
330
Supra.
98 PROPERTY
in 1957 that Congress granted to chartered cities and municipalities a
general authority to reclaim foreshore lands bordering their respective
territories.323 R.A. No. 7160, otherwise known as the Local Government
Code of 1991, likewise empowers local government units to undertake
reclamation projects by themselves or through contractors.
Whether reclaimed lands transferred to a public or municipal
corporation are public in nature or patrimonial depends upon the
legislative intent.
In Manila Lodge No. 761 v. Court of Appeals,324 for example, where
in 1905, the Philippine Commission enacted Act No. 1360 authorizing
the City of Manila to reclaim of a portion of the Luneta to form part of
the Luneta extension. The Act provided that the reclaimed area “shall
be the property of the City of Manila.” In this case, the Supreme Court
held that the legislative intent was to make the reclaimed land part of
the property of public dominion of the City of Manila. The Court held
that “if the reclaimed area is an extension of the Luneta, then it is of the
same nature or character as the old Luneta.”
Since the city or municipality may alienate the land it reclaimed
pursuant to R.A. No. 1899325 or it may pay a portion of the reclaimed lands
pursuant to Section 302 of the Local Government Code, it appears that
the lands reclaimed by the local government pursuant to the aforesaid
laws are patrimonial in character unless said local government reserves
certain portions of the reclaimed area for public use such as for plazas,
schools or hospitals, in which case, the reclaimed land is characterized
as land of the public domain.
In Chavez v. Public Estates Authority,326 the Supreme Court like-
wise held that “reclaimed alienable lands of the public domain if sold
or transferred to a public or municipal corporation for a monetary con-
sideration become patrimonial property in the hands of the public or
municipal corporation” and “once converted to patrimonial property,
the land may be sold by the public or municipal corporation to private
parties, whether Filipino citizens or qualified private corporations.”
323
Id., 302.
324
Supra.
325
See Ponce cases, supra.
326
Chavez v. PEA, 403 SCRA 1, 32.
100 PROPERTY
Zamboanga Province. Thereafter Congress approved R.A. No. 3039 amending
C.A. No. 39 by providing that “all buildings, properties and assets belonging to
the former province of Zamboanga and located within the City of Zamboanga
are hereby transferred, free of charge, in favor of the said City of Zamboanga.”
The Province of Zamboanga del Norte questioned the constitutionality of R.A.
No. 3039 on the ground that it deprived the province of its property without
due process and just compensation. In resolving the constitutionality of the
law, the Supreme Court laid down this test: If the property is owned by the
municipality (meaning municipal corporation) in its public and governmental
capacity, the property is public and Congress has absolute control over it.
But if the property is owned in its private or proprietary capacity, then it is
patrimonial and Congress has no absolute control over it. In applying the test,
the Court has to resolve another question: Which norm to use in classifying
the properties in question — the Civil Code or that obtaining under the law of
Municipal Corporations. If the Civil Code is to be applied, all the properties
in question, except the two lots used as High School playgrounds, would be
considered as patrimonial properties of the former Zamboanga province. On
the other hand, applying the norm obtaining under the principles constituting
the law of Municipal Corporations, all of the 50 properties in question which
are devoted to public service are deemed public. In upholding the latter view,
the Court explained —
We are more inclined to uphold the latter view. The
controversy here is more along the domains of the Law of
Municipal Corporations — the State v. Province — than along
that of Civil Law. Moreover, this Court is not inclined to hold that
municipal property held and devoted to public service is in the
same category as ordinary private property. The consequences
are dire. As ordinary private properties, they can be levied upon
and attached. They can even be acquired thru adverse possession
— all these to the detriment of the local community. Lastly, the
classification of properties other than those for public use in the
municipalities as patrimonial under Art. 424 of the Civil Code is
“x x x without prejudice to the provisions of special laws.” For
purposes of this article, the principles obtaining under the Law
of Municipal Corporations can be considered as “special laws.”
Hence, the classification of municipal property devoted for
distinctly governmental purposes as public should prevail over the
Civil Code classification in this particular case.
Art. 425. Property of private ownership, besides the patrimonial
property of the State, provinces, cities and municipalities, consists of all
property belonging to private persons, either individually or collectively.
(345a)
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 101 102 PROPERTY
CLASSIFICATION OF PROPERTY
Property in Relation to the Person to Whom it belongs

§ 29. Private Property clothing, horses or carriages and their accessories, grains, liquids and
merchandise, or other things which do not have as their principal object
Private properties may belong to the State, to provinces, cities the furnishing or ornamenting of a building, except where from the con-
and municipalities or may belong to the private individuals either text of the law, or the individual declaration, the contrary clearly appears.
individually or collectively. Such properties when they belong to the (346a)
State, provinces, cities and municipalities are called “patrimonial
property;” and when they belong to private entities or individuals, they — oOo —
are called “properties of private ownership.”
All lands are presumed, however, to be public lands until the
contrary is established.331
Under Sec. 7, Art. XII of the 1987 Constitution, no private lands
shall be transferred or conveyed except to individuals, corporations or
associations qualified to acquire or hold lands of the public domain, save
in cases of hereditary succession. However, a natural-born citizen of the
Philippines who has lost his Philippine citizenship may be a transferee
of private lands subject to limitations as may be provided by law.332 The
law that provides for such limitations is B.P. Blg. 185.
In J.G. Summit Holdings, Inc. v. Court of Appeals,333 the Court
clarified that the prohibition in the Constitution applies only to ownership
of lands and it does not extend to other real property as defined in Article
415 of the Civil Code. Otherwise, the Court added, we would have a
strange situation where the ownership of immovable property such as
trees, plants and growing fruit attached to the land would be limited to
Filipinos and Filipino corporations only.

PROVISIONS COMMON TO THE

THREE PRECEDING CHAPTERS

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

laration, the expression “immovable things or property,” or “movable
things or property,” is used, it shall be deemed to include, respectively,
the things enumerated in Chapter 1 and Chapter 2.
Whenever the word “muebles,” or “furniture,” is used alone, it shall
not be deemed to include money, credits, commercial securities, stocks
and bonds, jewelry, scientific or artistic collections, books, medals, arms,

331
Municipality of Antipolo v. Zapanta, supra., citing Oh Cho v. Director of Lands, 75 Phil.
(1946); Director of Lands v. CA, 38 SCRA 635 (1971).
332
Sec. 8, Art. XII, 1987 Constitution.
333
G.R. No. 124293, Jan. 31, 2005.

103 104 PROPERTY

to whom it belongs (which concept, therefore, has a predominantly

objective meaning).5
Our Civil Code, however, clearly differentiates between property
Title II. – OWNERSHIP
and ownership. The concept of “property” under the Civil Code refers to
those things which are susceptible of appropriation while the concept of
“ownership” refers to the mass or bundle of rights that may be exercised
Chapter 1
over a property. In other words, ownership refers to the bundle of rights
OWNERSHIP IN GENERAL that may be exercised over a property while the latter is the object of the
exercise of such rights.
Art. 427. Ownership may be exercised over things or rights. (n)
[30.2] Ownership, Defined
§ 30. Concept of Ownership
The Civil Code does not define ownership. Instead, the Code
[30.1] Property and Ownership, Distinguished simply enumerates the rights which are included therein, as follows:
As discussed in supra § 1.1, the word “property” is derived from (1) the right to enjoy the property (Art. 428, par. 1, NCC);
the Roman word proprius, meaning one’s own which, in essence, is
(2) the right to dispose the property (Art. 428, par. 1, NCC);
the concept of ownership. In fact, the Roman word proprietas1 means
ownership in Roman Law, although the more usual word is dominium, (3) the right to recover the property from any holder or possessor
which means the mastery or the absolute control over a thing except as (Art. 428, par. 2, NCC);
may be restrained by law.2 Dominion or ownership, on the other hand, (4) the right to exclude any person from enjoyment and disposal
comes from domus or house for in Roman Law the master of the house of the property (Art. 429, NCC);
is called dominus and his domestic power over the household is called
(5) the right to enclose or fence the land or tenement (Art. 430,
dominium.3 Thus, in Roman Law, there appears to be no difference
NCC);
between the concepts of property and ownership.
(6) the right to demand indemnity for damages suffered due to
Castan is likewise of the view that between property and
lawful interference by a third person to avert an imminent
ownership, there is really no difference in extent or contents but simply
danger (Art. 432, NCC);
a difference of viewpoint.4 According to him, while ownership implies
the power over a thing which belongs to the owner (which concept, (7) the right to just compensation in case of eminent domain
therefore, has a predominantly objective meaning); property, on the (Art. 435, NCC);
other hand, accentuates the relation between the thing and the owner (8) the right to construct any works or make any plantations and
excavations on the surface or subsurface of the land (Art.
437, NCC);
1
Derived from proprius.
2
The Principles of Roman Law and Their relation to modern law by William L. Burdick, (9) the right to hidden treasure found in the owner’s property
2004 ed., 325-326. (Art. 438, NCC); and
3
II Caguioa, Civil Code of the Philippines, 1966 ed., 48.
4
2 Castan, 8th ed., 49, 52, 53, cited in II Caguioa, Civil Code of the Philippines, 1966 ed., (10) the right to accessions. (Art. 440, NCC)
48.

103 5
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 105
OWNERSHIP
Ownership in General
At least, in our jurisdiction, the more acceptable definition of
ownership is that given by Justice J.B.L. Reyes. He defines ownership
as “an independent right of exclusive enjoyment and control of the thing
for the purpose of deriving therefrom all advantages required by the
reasonable needs of the owner (holder of the right) and the promotion
of the general welfare but subject to the restrictions imposed by law and
the right of others.”6
[30.3] Ownership Is A Real Right
[30.3.1] Jus In Re and Jus In Personam
Personal right or jus in personam is one which imposes an
obligation on a definite person.7 Stated otherwise, personal right or
more properly called the right of obligation is the power belonging to
one person to demand from another, as a definite passive subject, the
fulfillment of a prestation to give, to do or not to do.8
A real right or jus in re, on the other hand, has been defined as
the power belonging to a person over a specific thing without a definite
passive subject against whom such right may be personally enforced.9 A
right in rem, therefore, is one which imposes an obligation on persons
generally, i.e., either on all the world or on all the world except certain
determinate persons. Thus, if I am entitled to exclude all persons from
a given piece of land, I have a right in rem in respect of that land; and,
if there are one or more persons, A, B and C, whom I am not entitled to
exclude from it, my right is still a right in rem.10
[30.3.2] Ownership as Real Right
As can be seen from the discussion above, a real right creates
a direct relation between the specific thing and its holder in such a
way that it permits the holder to exclude others from the enjoyment
of the thing. Correspondingly, it creates an obligation on the part of
third persons not to interfere in such enjoyment. These elements are
clearly present in ownership. Hence, the owner of a thing has the right
6
Outline of Civil Law by Reyes and Puno, Vol. II, 20.
7 11
Black’s Law Dictionary, 5th ed., 1189.
8 12
3 Sanchez Roman 8.
9 13
3 Sanchez Roman 6.
10
Black’s Law Dictionary, 5th ed., 1189.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 107
OWNERSHIP
Ownership in General
414, embraces both material objects and rights. In other words, the term
“things” in Article 414 is used, not in its ordinary meaning, but in the
juridical sense. In Article 427, however, it is quite obvious that the word
“things” has reference only to material objects as contra distinguished
from rights. Then again, Article 428 the Code mentions “things” only but
this time the concept embraces both material objects and rights. Hence,
it would have been better if Article 427 simply stated that “ownership
is exercised over property.” After all, the concept of property under the
Civil Code embraces both material objects and rights.
Art. 428. The owner has the right to enjoy and dispose of a thing,
without other limitations than those established by law.
The owner has also a right of action against the holder and pos-
sessor of the thing in order to recover it. (348a)
§ 31. Attributes of Ownership
In Roman Law, the attributes of ownership are the following: (1)
jus utendi or the right to use property without destroying its substance;
(2) jus fruendi or the right to the fruits; (3) jus disponendi or the right to
dispose or alienate; (4) jus abutendi or the right to abuse or to consume
the thing by its use; (5) jus possidendi or the right to possess; and (6) jus
vindicandi or the right to recover.
It is noticeable, however, that the present article mentions only
three rights — the rights to enjoy, dispose and recover. While this may
be the case, it is not the intention of the Code to do away with the other
rights which are traditionally included in ownership. This is because the
right to enjoy already includes in it the right to use (jus utendi), the right
to the fruits (jus fruendi), the right to possess (jus possidendi) and the
right to abuse or consume (jus abutendi).
Another attribute of ownership which is not included in the present
article but treated in a separate chapter is the right of accession. The
Code deems it fit to devote an entirely separate chapter solely for this
right because of the importance of the subject.
§ 32. Right to Enjoy
The essence of ownership is the right of the owner to freely
enjoy either the property itself or the benefits derived therefrom, which
106 PROPERTY
to exclude any person from its enjoyment and disposal11 save for the
exception mentioned in Article 432 of the Civil Code which will be
discussed in subsequent sections of this Book.
[30.4] Other Real Rights Aside From Ownership
Apart from ownership, the Civil Code recognizes the existence
of other real rights that may be exercised in relation to property, i.e.,
possession, usufruct, easement, pledge and mortgage, etc. Of all these
rights, however, ownership is considered as the most complete because
it provides the owner the most ample power of dominion over the prop-
erty.12 In contrast, however, the other real rights are necessarily limited
since they merely serve as restrictions on one’s exercise of ownership.
For this purpose, we should classify real rights into two general
categories: (1) real rights over one’s own property (jus in re propria); and
(2) real rights over the property of another (jus in re aliena). These latter
rights are lesser rights than the right of ownership yet they make inroads
upon and curtail the rights of the owner.13 Examples of jus in re aliena
are usufruct, easement, possession and mortgage. In these examples,
the owner of the property has for the time being parted with some of his
rights, thereby restricting and abridging the right of ownership.
Compared to ownership, the other real rights cannot exist inde-
pendently of ownership. In other words, the other real rights are depen-
dent because they presuppose the existence of ownership. On the other
hand, and based from the definition cited in supra § 30. 2, ownership
is an independent real right since it can exist without the necessity of
other rights.
[30.5] Objects of Ownership
As discussed in supra § 30.1, the relationship that exists between
ownership and property is that the latter is the object of the former.
In accordance with Article 427 of the Code, the subject matter
of ownership may either be things or rights. But as discussed in supra
§ 1.2, the concept of things under the Civil Code, specifically Article
Art. 429, NCC.
See Castan, 8th Ed., 90-91.
The Principles of Roman Law and Their Relation to Modern Law by William L. Burdick,
2004 ed., 354.
108 PROPERTY
enjoyment may consist simply of its possession (jus possidendi), or
its consumption (jus abutendi), or its use (jus utendi), enjoyments
of its products or fruits (jus fruendi) or the enjoyment of anything
attached or incorporated to it, either naturally or artificially (the right
of accession).
[32.1] Right To Use and Abuse
To use a thing consists in employing it for the purpose for which
it is fit, without destroying it, and which employment can therefore be
repeated. Hence, the phrase jus utendi is used in contradistinction to the
jus abutendi. The latter right involves consumption of the thing by its
use. As explained by the late Senator Tolentino, citing Sanchez Roman
and Valverde, the jus abutendi should not be understood as the right
of the owner to exercise absolute and unlimited power over the thing
to the point of destroying it by any means, however inconvenient and
prejudicial to the public interest or to the right of others. According
to him, jus abutendi properly meant the use that extinguishes, that
consumes, by acts of the owner, things which are consumable.14
As a consequence, for example, of the owner’s right to use his
property, it has been held that the purchaser of a house which is leased is
entitled to terminate the lease, there being no stipulation to the contrary
and the lease not being recorded. This is so because the right to the use
of the said house is one of the rights transferred to him by virtue of
his ownership.15 Also, the owner may not be prevented from enjoying
his property on the mere pretext that the present occupant badly needs
the same in view of an acute housing shortage brought about by the
destruction of the City of Manila during the Second World War.16
§ 33. Right to Dispose
Jus disponendi or the power of the owner to dispose of his property
includes the power to alienate, to encumber, to limit, to transform, to
destroy and to merge.17
14
See Footnote No. 2, II Tolentino, Civil Code, 1992 ed., p. 46.
15
Saul v. Hawkins, 1 Phil. 275.
16
Roque v. Cavestani, G.R. No. L-218, Aug. 18, 1946; Villanueva v. Carlos, G.R. No. L-
329, Sep. 16, 1946.
17
2 Castan, 8th ed., 106.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 109
OWNERSHIP
Ownership in General
The right to alienate is the right of the owner to transmit either by
onerous or gratuitous title his right to another by any act inter vivos or
mortis causa. Such right is exclusively vested upon the owner based
upon the principle that “no one can give what he does not have.”
Examples of alienation are sale and donation.
The right to limit or encumber is the power of the owner to
deprive himself of several of the rights included in ownership and
transfer them to another. Thus, the owner may deprive himself of the
use and possession of his property by entering into contracts of lease
and commodatum, for example. He may also deprive himself of the
right to enjoy his property, including the right to receive the fruits, by
constituting a usufruct in favor of a third person.
The right to transform, on the other hand, is the power to change
the nature of the thing, or its form or destination and the power to destroy
is the power to render useless or to abandon or annihilate the thing.
§ 34. Right to Recover
[34.1] Right to Possession
Possession is essential to both free enjoyment and disposal.
Possession, as an incident of ownership or a right included in ownership,
must be distinguished from possession, as a right independent and
apart from ownership. The former is jus possidendi and the latter is
jus possessionis. Some authors refer to jus possidendi as the right to
possession and to jus possessionis as the right of possession. The latter
concept of possession (jus possessionis) is discussed separately in Title
V of Book II.
The owner is entitled to the exclusive possession of his property.
For this purpose, he may exclude any person from the enjoyment and
disposal thereof by force if necessary18 and he may also enclose or fence
his property by any means.19 In the event, however, that the possessor
is unlawfully deprived of possession he is not justified to take the law
into his own hands. Instead, he is required to resort to the proper legal
processes for the purpose of obtaining recovery of possession. This
principle is embodied in Article 433 of the New Civil Code which
18
See Art. 429, NCC.
19
See Art. 430, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 111
OWNERSHIP
Ownership in General
the possession of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession, by virtue of
any contract, express or implied.”25
Both actions are within the exclusive and original jurisdiction of
the Metropolitan or Municipal Trial Courts26 and which are required
to be brought within one year from the date of actual entry, in case of
forcible entry, and from the date of the last demand, in case of unlawful
detainer.27 The one-year prescriptive period for the filing of an ejectment
case is pursuant to the provisions of Article 555(4) of the New Civil
Code which states that possession de facto is lost if the possession by
another person has lasted for more than one year. Forcible entry and
unlawful detainer are quieting processes and the one-year time bar to
the suit is in pursuance of the summary nature of the action.28 The use
of summary procedure in ejectment cases is intended to provide an
expeditious means of protecting actual possession or right to possession
of the property.29 They are not processes to determine the actual title to
an estate.30
In ejectment cases, the sole question for resolution is the physical
or material possession (possession de facto) of the property in question
and neither a claim of juridical possession (possession de jure) nor an
averment of ownership by the defendant can outrightly deprive the court
from taking due cognizance of the case. So that, even if the question
of ownership is raised in the pleadings the court may pass upon such
issue but only to determine the question of possession especially if
the former is inseparably linked with the latter. Thus, all that the trial
court may do is to make an initial determination of who is the owner
of the property so that it can resolve who is entitled to its possession
absent other evidence to resolve the latter. But such determination of
ownership is not clothed with finality. Neither will it affect ownership
of the property nor constitute a binding and conclusive adjudication on
the merits with respect to the issue of ownership. Such judgment shall
not bar an action between the same parties respecting title to the land
25
Id.
26
Sec. 33(2), B.P. Blg. 129, as amended by R.A. No. 7691.
27
Javier v. Veridiano II, 237 SCRA 565 (1994).
28
De Leon v. CA, 245 SCRA 166, 173 (1995).
29
Id.
30
Id.
110 PROPERTY
directs the true owner to “resort to judicial process for the recovery of
the property” and Article 536 of the same Code which states:
“Art. 536. In no case may possession be acquired
through force or intimidation as long as there is a possessor
who objects thereto. He who believes that he has an action
or a right to deprive another of the holding of a thing, must
invoke the aid of the competent court, if the holder should
refuse to deliver the thing. (441a)” (Italics supplied)
Thus, in one case,20 the Supreme Court held that the owners of a
property have no authority to use force and violence to eject alleged
usurpers who were in prior physical possession of it. The Court held
further that the owners must file the appropriate action in court and
should not take the law into their own hands.
[34.2] Actions for Recovery of Possession
Under existing laws and jurisprudence, there are three kinds of
actions available to recover possession of real property: (a) accion
interdictal; (b) accion publiciana; and (c) accion reivindicatoria.21 For
the recovery of possession of a personal property, on the other hand, the
available remedy is called replevin.22
[34.2.1] Accion Interdictal
Accion interdictal comprises two distinct causes of action, namely,
forcible entry (detentacion) and unlawful detainer (desahuico).23 Forcible
entry is a summary action to recover material or physical possession
of real property when the person who originally held it was deprived
of possession by “force, intimidation, threat, strategy, or stealth.”24
An action for unlawful detainer, on the other hand, may be filed when
possession by “a lessor, vendor, vendee, or other person against whom
20
Heirs of Pedro Laurora, et al. v. Sterling Technopark III, G.R. No. 148615, April 9,
2003.
21
Valdez v. CA, G.R. No. 132424, May 2, 2006, citing Javier v. Veridiano II, 237 SCRA
565, 572-573 (1994).
22
Rule 60, 1997 Rules of Civil Procedure.
23
Valdez v. CA, G.R. No. 132424, May 2, 2006, citing Javier v. Veridiano II, 237 SCRA
565, 572-573 (1994).
24
See Sec. 1, Rule 70, 1997 Rules of Civil Procedure; Dela Cruz v. Panis, 245 SCRA 242
(1995).
112 PROPERTY
or building nor shall it be held conclusive of the facts therein found in
the case between the same parties upon a different cause of action not
involving possession.31
Forcible entry and unlawful detainer, which deal with physical or
de facto possession, may be distinguished as follows:
(1) Their main difference lies in the time when possession became
unlawful: in forcible entry, the possession by the defendant is unlawful
ab initio because he acquires possession by force, intimidation, threat,
strategy, or stealth; while in unlawful detainer, possession is originally
lawful but becomes illegal by reason of the termination of his right of
possession under his contract with the plaintiff.32
(2) In an action for forcible entry, the plaintiff must allege and
prove that he was in prior physical possession of the premises until
deprived thereof, while in illegal detainer, the plaintiff need not have
been in prior physical possession.33 A complaint for unlawful detainer
should be distinguished from that of forcible entry. In forcible entry, the
plaintiff has prior possession of the property and he is deprived thereof
by the defendant through force, intimidation, threat, strategy or stealth.
In an unlawful detainer, the defendant unlawfully withholds possession
of the property after the expiration or termination of his right thereto
under any contract, express or implied; hence, prior physical possession
is not required. This is especially so where a vendee seeks to obtain
possession of the thing sold.34
(3) The one year period within which to bring an action for
forcible entry is generally counted from the date of actual entry on
the land, except that when entry was made through stealth, the one
year period is counted from the time the plaintiff learned thereof.35 In
unlawful detainer, however, the one year prescriptive period is counted
from the date of the last demand.36 Hence, in the latter type of action,
the plaintiff must first make such demand, which is jurisdictional in
nature.37
31
Pengson v. Ocampo, 360 SCRA 420, 425-426.
32
Heirs of Demetrio Melchor v. Melchor, 415 SCRA 726.
33
Id.
34
Barba v. CA, 376 SCRA 210, 218-219.
35
Ong v. Parrel, 355 SCRA 691, 696.
36
Valdez v. CA, G.R. No. 132424, May 2, 2006.
37
See Sec. 2, Rule 70, 1997 Rules of Civil Procedure; Medel v. Militante, 41 Phil. 44.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
OWNERSHIP
Ownership in General
[34.2.2] Accion Publiciana
An accion publiciana is an action for recovery of the right to
possess and is a plenary action38 in an ordinary civil proceeding to
determine the better right of possession of realty independent of the
title39 or ownership of the property. Accion publiciana or plenaria
de posesion is also used to refer to an ejectment suit filed after the
expiration of one year from the accrual of the cause of action or from
the unlawful withholding of possession of the realty.40 In other words, if
at the time of the filing of the complaint more than one year had elapsed
since defendant had turned plaintiff out of possession or defendant’s
possession had become illegal, the action will be, not one of the forcible
entry or illegal detainer, but an accion publiciana.41
Unlike ejectment cases which are always within the exclusive
jurisdiction of the Metropolitan or Municipal Trial Courts,42 jurisdiction
over an accion publiciana shall depend on the location of the realty
and its assessed value. If the property is located in Metro Manila and
its assessed value does not exceed P50,000.00, jurisdiction is with the
Metropolitan Trial Courts. But if the assessed value of the realty exceeds
P50,000.00, it is the Regional Trial Court which exercises jurisdiction
over an accion publiciana.43 If the realty is, on the other hand, situated
outside of Metro Manila, it is the Municipal Trial Courts which has
jurisdiction if the assessed value thereof does not exceed P20,000.00,
otherwise, it is the Regional Trial Court which has jurisdiction.44
[i] Distinguished From Accion Interdictal
What really distinguishes the summary action of ejectment (accion
inderdictal) from the plenary action for recovery of possession (accion
publiciana) is that the issue in the former is limited to the question of
possession de facto while the issue in the latter is the determination of
the better right of possession or possession de jure.
38
As distinguished from the summary nature of ejectment cases.
39
Cruz v. Torres, 316 SCRA 193, citing Aguilon v. Bohol, 79 SCRA 482 (1977) and Des-
barats v. De Laureano, 18 SCRA 116 (1966).
40
Id., citing Bernabe v. Dayrit, 125 SCRA 423, 425 (1983).
41
Valdez v. CA, G.R. No. 132424, May 2, 2006.
42
Sec. 33(2), B.P. Blg. 129, as amended by R.A. No. 7691.
43
Sec. 33(3), B.P. Blg. 129, as amended by R.A. No. 7691.
44
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
OWNERSHIP
Ownership in General
As in the case of accion publiciana, jurisdiction over an accion
reivindicatoria shall depend on the location of the realty and its assessed
value. If the property is located in Metro Manila and its assessed value
does not exceed P50,000.00, jurisdiction is with the Metropolitan Trial
Courts. But if the assessed value of the realty exceeds P50,000.00, it is
the Regional Trial Court which exercises jurisdiction over an accion
reivindicatoria.50 If the realty is, on the other hand, situated outside of
Metro Manila, it is the Municipal Trial Courts which has jurisdiction if
the assessed value thereof does not exceed P20,000.00, otherwise, it is
the Regional Trial Court which has jurisdiction.51
The requisites of an accion reivindicatoria are discussed in infra
§ 38 in relation to Articles 433 and 434.
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 usurpa-
tion of his property. (n)
§ 35. Doctrine of Self-help
[35.1] Statement of the Doctrine
As a necessary consequence of ownership, the owner has the right
of exclusive enjoyment and control over his property, as well as to its
exclusive possession. He may, therefore, exclude any person from its
enjoyment and disposal.52 This right of the owner is so important that
the law deems it appropriate to allow him to “use such force as may
be reasonably necessary to repel or prevent an actual or threatened
unlawful physical invasion or usurpation of his property.”53 The
employment of such reasonable force in defense of his property is what
is known in juridical science as the doctrine of self-help.54
[35.2] Who May Invoke the Doctrine
While Chapter 1, Title II, Book II of the New Civil Code, inclusive
of Article 429 thereof, speaks of “ownership,” the doctrine of self-help
50
Sec. 33(3), B.P. Blg. 129, as amended by R.A. No. 7691.
51
Id.
52
Art. 429, NCC.
53
Id.
54
People v. Depante (CA), 58 O.G. 926.
113 114 PROPERTY
[ii] Distinguished From Accion Reivindicatoria
In accion publiciana, the basis of the recovery of possession is the
plaintiff’s real right of possession or jus possessionis — which is the
right to the possession of the real estate independent of ownership. In
accion reivindicatoria, however, the basis of the action for recovery of
possession is ownership itself. Hence, an accion reivindicatoria involves
recovery of possession as an incident or attribute of ownership, or what
is known as jus possidendi.
[34.2.3] Accion Reivindicatoria
An accion reinvindicatoria is a suit which has for its object the
recovery of possession over the real property as owner.45 Also known as
accion de reivindicacion, it is thus an action whereby plaintiff alleges
ownership over a parcel of land and seeks recovery of its full possession.46
It is different from accion publiciana where plaintiff merely alleges
proof of a better right to possess without claim of title.47
In some decisions of the Court, accion reinvindicatoria is often
referred as an action to recover ownership.48 Such description is, however,
misleading and inaccurate. One of the characteristics of ownership is
that it is an exclusive right, meaning, there can be only one ownership
although there may be two or more owners.49 As such, it is not correct
to say that an accion reivindicatoria involves recovery of ownership —
which suggests that ownership had already been lost by the plaintiff to
another — when in fact, it is ownership which is the basis of an accion
reivindicatoria. What happens in an accion reivindicatoria is that the
plaintiff has been deprived of the exercise of all the rights included
in ownership and what he seeks to recover by filing such an action is,
in reality, only the exercise of the rights included in ownership. Since
possession is essential to the exercise of the other rights included in
ownership and it is the most visible expression of the exercise of such
rights, an accion reivindicatoria has been associated with the recovery
of possession over the real property as owner.
45
Hilario v. Salvador, 457 SCRA 815, 825 (2005).
46
Javier v. Veridiano II, supra.
47
Id.
48
See De Leon v. CA, 245 SCRA 166, 173 (1995); Valdez v. CA, supra; Custodio v. Cor-
rado, 435 SCRA 500 (2004).
49
See II Caguioa, Civil Code of the Philippines, 1966 ed., 50.
115 116 PROPERTY
is available not only to owners of the property but also to any of its
“lawful possessor.”55
[35.3] When May the Doctrine Be Invoked
The use of reasonable force in defense of property under the
doctrine of self-help is authorized only if the purpose is to “repel”
or “prevent” an actual or threatened unlawful physical invasion or
usurpation of the said property.56 In Article 429 of the Code, the word
“repel” is, of course, referring to an “actual” unlawful physical
invasion or usurpation of the property; while the word “prevent” is
referring to a “threatened” unlawful physical invasion or usurpation
of the property. It is clear, therefore, that the doctrine of self-help can
only be exercised at the time of actual or threatened dispossession, and
not when possession has already been lost.57 In the latter case, the owner
must resort to judicial process for the recovery of property as required
in Article 536 of the Civil Code.58 In other words, the doctrine of self-
help cannot be invoked for the purpose of recovering property.
German Management & Services, Inc. v. CA
177 SCRA 495 (1989)
In this case, the registered owners of a parcel of land situated in
Antipolo, Rizal, who were based in the United States of America, authorized
the petitioner German Management & Services, Inc. to develop their property
into a residential subdivision. Finding that part of the property was occupied
by private respondents and twenty other persons, petitioner advised the
occupants to vacate the premises but the latter refused. Nevertheless, petitioner
proceeded with the development of the subject property which included the
portions occupied and cultivated by private respondents. In so doing, the
petitioner forcibly removed and destroyed the barbed wire fence enclosing
private respondents’ farmholdings. Petitioner likewise bulldozed the rice, corn,
fruit bearing trees and other crops of private respondents. Private respondents,
thereafter, sued the petitioner for ejectment (forcible entry). The Municipal
Trial Court dismissed the action, which dismissal was sustained by the
Regional Trial Court on appeal. Both courts have rationalized the petitioner’s
drastic action of bulldozing and destroying the crops of private respondents on
the basis of the doctrine of self-help enunciated in Article 429 of the New Civil
55
See Art. 429, NCC.
56
Id.
57
German Management & Services, Inc. v. CA, 177 SCRA 495 (1989).
58
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 117
OWNERSHIP
Ownership in General
Code. When the case reached the Supreme Court, the High Court held that
what the petitioner did could not be justified under the doctrine of self-help.
The Court explained —
Both the Municipal Trial Court and the Regional Trial Court
have rationalized petitioner’s drastic action of bulldozing and
destroying the crops of private respondents on the basis of the
doctrine of self-help enunciated in Article 429 of the New Civil
Code. Such justification is unavailing because the doctrine of
self-help can only be exercised at the time of actual or threatened
dispossession which is absent in the case at bar. When possession
has already been lost, the owner must resort to judicial process
for the recovery of property. This is clear from Article 536 of the
Civil Code which states, “(I)n no case may possession be acquired
through force or intimidation as long as there is a possessor who
objects thereto. He who believes that he has an action or right to
deprive another of the holding of a thing, must invoke the aid of the
competent court, if the holder should refuse to deliver the thing.’’
[35.4] Defense of Property as Justifying Circumstance
In the language of Viada, aside from the right to life on which rests
the legitimate defense of our own person we have the right to property
acquired by us, and the right to honor which is not the least prized of
our patrimony.59 Hence, defense of property is deemed included in self-
defense under the provisions of Article 11, paragraph 1, of the Revised
Penal Code.
In two cases decided by the Court of Appeals,60 it was held that
defense of property whether complete or incomplete, to be available,
must be coupled with an attack on the person of the owner or lawful
possessor. Thus, in People v. Goya, supra, the Court of Appeals did
not appreciate the mitigating circumstance of incomplete defense of
property because when the appellant (a security guard in the bodega
of Cagayan Valley Agricultural Corporation) fired a shot at the victim,
who was caught in the act of stealing a sack of palay belonging to the
appellant’s employer, the victim did not lay hands on the appellant or
made any attempt to attack the latter.
59
1 Viada, Codigo Penal, 5th ed., pp. 172-173, cited in People v. Jaurigue, 76 Phil. 174.
60
People v. Apolinar, (CA) 38 O.G. 2870 and People v. Goya, CA-GR. No. 16373-R, Sep.
29, 1965.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 119
OWNERSHIP
Ownership in General
People v. Goya, CA-GR. No. 16373
Sept. 29, 1965
In this case, the accused was a guard in the bodega of the Cagayan Valley
Agricultural Corporation. On the night in question, he surprised the private
complainant in the act of going out through the door of the warehouse with
a sack of palay. To prevent the latter from taking away the sack of palay, the
accused-appellant fired a shot at complainant. The shot hit complainant on the
back for which he was hospitalized for 18 days. The guard was prosecuted and
adjudged by the trial court guilty of frustrated homicide. The defense, however,
claimed that the mitigating circumstance of incomplete defense of property was
present in the commission of the crime. The Court of Appeals, however, found
that the accused-appellant was guilty only of less serious physical injuries.
The appellate court refused, however, to credit the accused-appellant with the
mitigating circumstance of incomplete defense of property since, according
to the Court of Appeals, defense of property whether complete or incomplete,
to be available, must be coupled with an attack on the person defending the
property.
People v. Narvaez
121 SCRA 389 (1983)
Appellant’s house was situated on a land awarded to Fleischer and
Company by virtue of a sales patent. The validity of the award was, however,
questioned before the court by a group of settlers, including the Appellant
(Narvaez). On August 22, 1968 or while the case was still pending, a group of
men headed by the son (Davis Fleischer) of the landowner (George Fleischer)
were fencing the land of the latter. At that time, Appellant was taking his rest
but when he heard that the walls of his house were being chiseled, he arose
and there he saw the fencing going on. If the fencing would go on, Appellant
would be prevented from getting into his house and the bodega of his rice mill.
So the Appellant addressed the group, “Pare, if possible you stop destroying
my house and if possible we will talk it over what is good.” Davis Fleischer,
however, answered: “No, gademit, proceed, go ahead.” Appellant apparently
lost his equilibrium and he got his gun and shot dead Fleischer and the latter’s
companion, Rubia. On appeal to the Supreme Court, the Court appreciated
in favor of the Appellant the special mitigating circumstance of incomplete
defense of property, citing the provisions of Article 429 of the Civil Code
in relation to paragraph 6, Article 13 of the Revised Penal Code. The Court
considered the unlawful physical invasion of Appellant’s property as unlawful
aggression but held that his resistance was disproportionate to the attack.
118 PROPERTY
In the case of People v. Narvaez,61 however, the Supreme Court,
citing the provisions of Article 429 of the New Civil Code, credited the
accused with the special mitigating circumstance of incomplete defense
of property even if such defense is not coupled with an attack upon the
person of the accused.
It thus appears that Article 429 of the New Civil Code plugs the
loophole in the Revised Penal Code where it is doubtful whether the
defense of property is possible if the unlawful physical invasion of
one’s property is not accompanied by unlawful aggression against the
person of the owner.62 Under this article, defense of property without
any aggression against the person of the owner is authorized.63 Thus,
in People v. Narvaez, supra, even if the aggression was directed not
on the person of the accused-appellant but only on his property, the
Court nonetheless considered such unlawful aggression for the purpose
of crediting him with the special mitigating circumstance of incomplete
self-defense.
In order for defense of property to be appreciated as a justifying
circumstance, it is necessary that the means employed to prevent or repel
the aggression must also be reasonable.64 Note that under the doctrine of
self-help in Article 429 of the Civil Code, what is authorized is the use
of force “as may be reasonably necessary” for the purpose of repelling
or preventing any actual or threatened unlawful physical invasion or
usurpation of one’s property. In determining the reasonableness of the
means employed, the absence of an attack against the person of the
owner or lawful possessor of the property must be considered since
defense of property is not of such importance as the right to life and
limb. In People v. Narvaez, for example, the Court held that when the
appellant fired his shotgun from his window, killing his two victims, his
resistance was disproportionate to the attack. Hence, he was credited
only with special mitigating circumstance of incomplete defense of
property.
61
121 SCRA 389 (1983).
62
II Caguioa, Civil Code of the Philippines, 1966 ed., 58.
63
Id.
64
Art. 11(1), RPC.
120 PROPERTY
Art. 430. Every owner may enclose or fence his land or tenements
by means of walls, ditches, live or dead hedges, or by any other means
without detriment to servitudes constituted thereon. (388)
§ 36. Right to Enclose or Fence
Corollary to the right to exclude others from the enjoyment of
his property, the owner of a parcel of land or tenement has the right to
enclose or fence the same by whatever means.65 In so doing, the owner
is effectively giving notice to everybody that they are not welcome in
his property without his consent and he may, therefore, validly consider
any unauthorized intrusion into his property as an act of unlawful
aggression which will authorize him to resort to self-help.
However, it is required that the right to enclose or fence must be
legitimately exercised and must not be attended with bad faith. Thus, if
the lot owner fenced his property for the purpose of evicting its occupant
whose lease contract had already expired, the lot owner is liable to said
occupant for damages.66 In such a case, what the lot owner should do
is to resort to the proper legal processes for the purpose of obtaining
recovery of possession pursuant to the provisions of Article 536 of the
Civil Code.67
The right to enclose or fence in Article 430 is also subject to the
limitation that it should not work detriment to the servitudes constituted
therein. The concept of servitude or easement is discussed in Title VII
of this Book. Easement or servitude is defined as a real right constituted
in another person’s property, corporeal and immovable, by virtue of
which the owner of the same has to abstain from doing or to allow
somebody else to do something in his property for the benefit of another
thing or person.68 An example of this is easement of drainage of waters
embodied in Article 637 of the New Civil Code, which reads:
“Art. 637. Lower estates are obliged to receive the
waters which naturally and without the intervention of man
descend from the higher estates, as well as the stones or earth
which they carry with them.
65
Art. 430, NCC.
66
See Villafuerte v. CA, G.R. No. 134239, May 26, 2005.
67
Id.
68
2 Sanchez Roman 572.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 121
OWNERSHIP
Ownership in General
The owner of the lower estate cannot construct works
which will impede this easement; neither can the owner of
the higher estate make works which will increase the burden.
(552)”
Pursuant to such kind of easement or servitude, the owner of the
lower tenement cannot block or impede the servitude and the owner of
the higher tenement cannot construct works to increase the burden of
the servitude. Clearly, the existence of this kind of servitude works as a
limitation upon the right of the owner of the lower tenement to enclose
his property with walls or other means if the same will prevent the
passage of the water which naturally falls from the higher tenement.
Villafuerte v. Court of Appeals
G.R. No. 134239, May 26, 2005
In this case, the petitioners (Spouses Villafuerte) operated a gasoline
station on the premises of three adjoining lots, two of which were owned
by private respondents De Mesa and Daleon. Private respondents De Mesa
and Daleon acquired their respective lots subject to the lease by Petrophil
Corporation which had built thereon the gasoline station being managed by
the Villafuerte couple. When the lease of Petrophil Corporation expired on
December 31, 1988, the petitioners Villafuertes obtained a new lease on the
lot owned by private respondent De Mesa for a period expiring on December
31, 1989. Daleon, on the other hand, refused to enter into a lease contract with
the Villafuertes and demanded that they vacate the lot owned by him. Upon
the expiration of the lease contract with De Mesa, the latter likewise refused to
renew the same. Instead, De Mesa and Daleon, with the aid of several persons
and without the knowledge of the Villafuertes, caused the closure of the latter’s
gasoline station by constructing fences around it. Since then, the Villafuertes
were unable to operate the gasoline station. Hence, they sued for damages. On
appeal to the Supreme Court, the High Court sustained the award of exemplary
damages in favor of the Villafuertes. The Court held that Article 536 of the
Civil Code explicitly provides for the proper recourse of one who claims to
be entitled to the possession of a thing. When private respondents personally
took it upon themselves to evict petitioners from their properties, which act
was in clear contravention of the law, they became liable for all the necessary
and natural consequences of their illegal act. The Court further observed that
private respondents’ arbitrary conduct of fencing their properties under the
claim that they own the same brazenly violates the law and circumvents the
proper procedure which should be obtained before the court.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 123
OWNERSHIP
Ownership in General
largely on the maxims, “Sic utere tuo et alienum non laedas”72 and
“Salus populi est suprema lex.”73 Its fundamental purpose is securing
the general welfare, comfort and convenience of the people.74
Freund defined police power as “the power of promoting the public
welfare by restraining and regulating the use of liberty and property.”75
Police power is usually exercised in the form of mere regulation or
restriction in the use of liberty or property for the promotion of the
general welfare.76 It does not involve the taking or confiscation of
property with the exception of a few cases where there is a necessity
to confiscate private property in order to destroy it for the purpose of
protecting the peace and order and of promoting the general welfare as
for instance, the confiscation of an illegally possessed article, such as
opium and firearms.77 Thus, in police power, the owner does not recover
from the government for injury sustained in consequence thereof.78
The foregoing principles are confirmed in Article 436 of the New
Civil Code, which states:
“Art. 436. When any property is condemned or seized
by competent authority in the interest of health, safety or
security, the owner thereof shall not be entitled to compensa-
tion, unless he can show that such condemnation or seizure
is unjustified.”
There are traditional distinctions between the police power and
the power of eminent domain that logically preclude the application of
both powers at the same time on the same subject. In the case of City of
Baguio v. NAWASA,79 for example, where a law required the transfer of
all municipal waterworks systems to the NAWASA in exchange for its
assets of equivalent value, the Court held that the power being exercised
was eminent domain because the property involved was wholesome and
intended for a public use. Property condemned under the police power
72
So use your own as not to injure another’s property.
73
The welfare of the people is the supreme law.
74
Binay v. Domingo, G.R. No. 92389, Sep. 11, 1991.
75
Tañada and Carreon, Political Law, Vol. 11, p. 50, cited in City Government of Quezon
City v. Ericta, supra.
76
City Government of Quezon City v. Ericta, supra.
77
Id.
78
Id.
79
106 Phil. 144.
122 PROPERTY
Art. 431. The owner of a thing cannot make use thereof in such man-
ner as to injure the rights of a third person. (n)
Art. 432. The owner of a thing has no right to prohibit the interfer-
ence 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.
(n)
§ 37. Limitations on Ownership
Ownership is not an absolute right. Like all other social and con-
ventional rights, rights arising from ownership are subject to such rea-
sonable limitations in their enjoyment as shall prevent them from being
injurious, and to such reasonable restraints and regulations, established
by law, as the legislature, under the governing and controlling power
vested in them by the constitution, may think necessary and expedient.
As such, the exercise of rights arising from ownership is always
subject to the restrictions imposed by law, the exercise of the inherent
powers of the State and the rights of others. Aside from the foregoing
restrictions, the owner himself may impose limitations upon his own
right.
[37.1] General Limitations Pursuant to the Exercise of the Inherent
Powers of the State
There are three inherent powers of government by which the State
interferes with the property rights, namely: (1) police power, (2) eminent
domain, and (3) taxation.69 These powers are said to exist independently
of the Constitution as necessary attributes of sovereignty.70 In other
words, these powers need not be clothed with any constitutional gear to
exist; instead, the provisions in our Constitution on the subject are meant
more to regulate, rather than to grant, the exercise of these powers.71
[37.1.1] Police Power
The police power is a governmental function, an inherent attribute
of sovereignty, which was born with civilized government. It is founded
69
City Government of Quezon City v. Ericta, G.R. No. L-34915, June 24, 1983.
70
Id.
71
Manosca v. CA, G.R. No. 106440, Jan. 29, 1996.
124 PROPERTY
is noxious or intended for a noxious purpose, such as a building on the
verge of collapse, which should be demolished for the public safety, or
obscene materials, which should be destroyed in the interest of public
morals. The confiscation of such property is not compensable, unlike
the taking of property under the power of expropriation, which requires
the payment of just compensation to the owner.
City Government of Quezon City v. Ericta
G.R. No. L-34915, June 24, 1983
This case involves Ordinance No. 6118, Series of 1964, passed by the
City Council of Quezon City which required, in Section 9 thereof, private
cemeteries in Quezon City to set aside at least six percent (6%) of their total
area for charity burial grounds of the city’s deceased paupers. Pursuant thereto,
the Quezon City Engineer notified Himlayang Pilipino, Inc. that such ordinance
would be enforced by the City Government. Himlayang Pilipino, Inc. assailed
the validity of the ordinance on the ground that the same involved confiscation
of private property. The City Government, on the other hand, argued that the
taking of the Himlayang Pilipino’s property is a valid and reasonable exercise
of police power and that the land is taken for a public use as it is intended for
the burial ground of paupers. The Supreme Court declared Section 9 of the
said ordinance invalid. The Court held that the same is not a mere police power
regulation but an outright confiscation and deprives a person of his private
property without due process of law and without compensation. The Court
observed that there is no reasonable relation between the setting aside of at
least six percent (6%) of the total area of a private cemeteries for charity burial
grounds of deceased paupers and the promotion of health, morals, good order,
safety, or the general welfare of the people. In effect, the ordinance is actually
a taking without compensation of a certain area from a private cemetery to
benefit paupers who are charges of the municipal corporation. Instead of
building or maintaining a public cemetery for this purpose, the city passes the
burden to private cemeteries.
[37.1.2] Power of Eminent Domain
Eminent domain is an inherent power of the State that enables
it to forcibly acquire private lands intended for public use upon
payment of just compensation to the owner.80 Obviously, there is no
80
Association of Small Landowners in the Phil. v. Sec. of Agrarian Reform, G.R. No.
78742, July 14, 1989.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 125
OWNERSHIP
Ownership in General
need to expropriate where the owner is willing to sell under terms also
acceptable to the purchaser, in which case an ordinary deed of sale may
be agreed upon by the parties.81 It is only where the owner is unwilling
to sell, or cannot accept the price or other conditions offered by the
vendee, that the power of eminent domain will come into play to assert
the paramount authority of the State over the interests of the property
owner. Private rights must then yield to the irresistible demands of the
public interest on the time-honored justification, as in the case of the
police power, that the welfare of the people is the supreme law.82
The exercise of the power of eminent domain is constrained by
two constitutional provisions: (1) that private property shall not be
taken for public use without just compensation under Article III (Bill
of Rights), Section 9; and (2) that no person shall be deprived of his/her
life, liberty, or property without due process of law under Art. III, Sec.
1. The foregoing requirement is echoed in Article 435 of the New Civil
Code, which states:
“Art. 435. No person shall be deprived of his property
except by competent authority and for public use and always
upon payment of just compensation.
Should this requirement be not first complied with, the
courts shall protect and, in a proper case, restore the owner
in his possession. (349a)”
In view of the foregoing proscription, the power of eminent domain
can only be exercised for public use and with just compensation. This
proscription is intended to provide a safeguard against possible abuse
and so to protect as well the individual against whose property the
power is sought to be enforced.83 Taking an individual’s private property
is a deprivation which can only be justified by a higher good — which is
public use — and can only be counterbalanced by just compensation.84
Without these safeguards, the taking of property would not only be
unlawful, immoral, and null and void, but would also constitute a gross
81
Noble v. City of Manila, 67 Phil. 1, cited in Association of Small Landowners in the Phil.
v. Sec. of Agrarian Reform, supra.
82
Association of Small Landowners in the Phil. v. Sec. of Agrarian Reform, supra.
83
Manosca v. CA, supra.
84
Barangay Sindalan, San Fernando, Pampanga v. CA, G.R. No. 150640, March 22, 2007.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 127
OWNERSHIP
Ownership in General
may be established even against the will of the owner of the servient
estate.92
(2) During a period of acute public want or emergency, thought-
less extravagance in expenses for pleasure or display may be stopped by
order of the courts at the instance of any government or private chari-
table institution.93
(3) Lands acquired under free patent or homestead cannot be
subject to encumbrance or alienation within five years from the issuance
of the patent.94
[37.3] Inherent Limitations Arising From Conflicts With Other
Similar Rights
It is a well-settled principle, growing out of the nature of well-
ordered civil society, that every holder of property, however absolute
and unqualified may be his title, holds it under the implied liability
that his use of it shall not be injurious to the equal enjoyment of others
having an equal right to the enjoyment of their property, nor injurious
to the rights of the community.95
[37.3.1] Limitations on Owner’s Right To Use
The classical theory is that “he who uses a right injures no one.”
Traditionally, therefore, it has been held that no person can be held
liable for damages occasioned to another by the exercise of a right. The
modern tendency, however, is to depart from the classical and traditional
theory, and to grant indemnity for damages in cases where there is an
abuse of right, even when the act is not illicit. The reason for this is that
law cannot be given an anti-social effect. If mere fault or negligence in
one’s act can make him liable for damages for injury caused thereby,
with more reason should abuse or bad faith make him liable.96
Our Civil Code, noticeably, has departed from the classical and
traditional theory and adopted the view that a person will be protected
92
See Chapter 2, Title VII, Book II of the New Civil Code.
93
Art. 25, NCC.
94
Sec. 118, C.A. No. 141, as amended.
95
Case v. Board of Health, 24 Phil. 250.
96
See Footnote No. 32, National Power Corp. v. Philipp Brothers Oceanic, Inc., 369 SCRA
629, 642.
126 PROPERTY
and condemnable transgression of an individual’s basic right to property
as well.85
[37.1.3] Power of Taxation
Taxation focuses on the power of government to raise revenue in
order to support its existence and carry out its legitimate objectives.86
As a general rule, the power to tax is an incident of sovereignty
and is unlimited in its range, acknowledging in its very nature no limits,
so that security against its abuse is to be found only in the responsibility
of the legislature which imposes the tax on the constituency who are to
pay it. Nevertheless, effective limitations thereon may be imposed by
the people through their Constitutions.87 Our Constitution, for instance,
provides that the rule of taxation shall be uniform and equitable and
Congress shall evolve a progressive system of taxation.88
So potent indeed is the power that it was once opined that “the
power to tax involves the power to destroy.”89 Verily, taxation is a
destructive power which interferes with the personal and property
rights of the people and takes from them a portion of their property
for the support of the government.90 Accordingly, tax statutes must be
construed strictly against the government and liberally in favor of the
taxpayer.91
[37.2] Specific Limitations Imposed By Law
Examples of limitations on ownership which are specifically
provided by law are the following:
(1) Legal easements which can be enforced by law and, therefore,
85
Id.
86
87
LTO v. City of Butuan, G.R. No. 131512, Jan. 20, 2000.
Mactan Cebu International Airport v. Hon. Marcos, G.R. No. 120082, Sep. 11, 1996; cit-
ing Cooley on Constitutional Law, 4th ed. (1931), 62.
88
Sec. 28(1), Article VI, 1987 Constitution.
89
Chief Justice Marshall in McCulloch v. Maryland, 4 Wheat, 316, 4 L ed. 579, 607. Later
Justice Holmes brushed this aside by declaring in Panhandle Oil Co. v. Mississippi (277 U.S. 218)
that “the power to tax is not the power to destroy while this Court sits.” Justice Frankfurter in
Graves v. New York (306 U.S. 466) also remarked that Justice Marshall’s statement was a “mere
flourish or rhetoric” and a product of the “intellectual fashion of the times” to indulge in “a free
case of absolutes.” (See Note 15 in Mactan Cebu International Airport v. Hon. Marcos, supra.).
90
Mactan Cebu International Airport v. Hon. Marcos, supra.
91
Id., citing Agpalo, Ruben E., Statutory Construction [1990 ed.], 216.
128 PROPERTY
only when he acts in the legitimate exercise of his right, that is, when
he acts with prudence and in good faith; but not when he acts with
negligence or abuse. The principle is outlined in Article 19 of the Code
which provides that “every person must, in the exercise of his rights
and in the performance of his duties, act with justice, give everyone his
due, and observe honesty and good faith.” In relation to the exercise of
the right to use property, Article 431 of the Code specifically mandates
that “the owner of a thing cannot make use thereof in such a manner as
to injure the rights of a third person.” Not only that, our Constitution
even went farther by declaring that “the use of property bears a social
function, and all economic agents shall contribute to the common
good.”97
The absence of good faith is essential in determining whether the
owner can be held liable for any consequential damage arising from
the exercise of his right to use the property. When the owner acts in the
legitimate exercise of his right, that is, when he acts with prudence and
in good faith, he does no actionable injury and cannot be held liable
for damages.98 The damage resulting from the legitimate exercise of a
person’s right is a loss without injury — damnum absque injuria. If
the right is exercise in bad faith, however, and for the sole intent of
prejudicing or injuring another, there is liability under the principle of
abuse of right99 for the exercise of a right ends when the right disappears,
and it disappears when it is abused especially to the prejudice of
others.100
The foregoing principles are best illustrated when we compare the
case of Villafuerte v. Court of Appeals, cited in supra., §36, with the case
of Sps. Custodio and Sps. Santos v. Court of Appeals,101 both involving
the exercise of the owner’s right to enclose or fence his property. In
Villafuerte, the lot owners were held liable to pay damages because the
exercise of the right was attended with bad faith — it was resorted to for
the purpose of evicting the occupants whose lease contract had already
expired. In Sps. Santos, however, the Court held that the petitioners
were not liable to the private respondents for their act of constructing
97
Sec. 6, Art. XII, 1987 Phil. Constitution.
98
Amonoy v. Gutierrez, 351 SCRA 731.
99
Albenson Enterprises Corp. v. CA, 217 SCRA 18.
100
MBTC v. Wong, 359 SCRA 608, 618.
101
G.R. No. 116100, Feb. 9, 1996.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 129
OWNERSHIP
Ownership in General
a fence within their property since at the time of such construction, the
lot of the petitioners was not subjected yet to any servitude and there
was no easement of way existing in favor of the private respondents,
either by law or contract. The private respondents were granted by the
court a right of way to petitioners’ lot only when the former went to
court to pray for such access. But prior to the decision of the court, the
petitioners were declared to have an absolute right over their property
and their act of fencing and enclosing the same was an act which they
may lawfully perform in the enjoyment and exercise of said right.
Sps. Custodio and Sps. Santos v. Court of Appeals
G.R. No. 116100, Feb. 9, 1996
The private respondents own a parcel of land with a two-door apartment
erected thereon situated at Interior P. Burgos St., Palingon, Tipas, Taguig,
Metro Manila. They were able to acquire said property through a contract
of sale with spouses Mamerto Rayos and Teodora Quintero as vendors. Said
property may be described to be surrounded by other immovables pertaining
to petitioners. Taking P. Burgos Street as the point of reference, on the left
side, going to private respondents’, the row of houses will be as follows: That
of petitioners Spouses Custodio, then that of petitioner Spouses Santos and
then that of the private respondents. As an access to P. Burgos Street from
private respondents’ property, there are two possible passageways. The first
passageway is approximately one meter wide and is about 20 meters distant
from the private respondents’ residence to P. Burgos Street. Such path is passing
in between the previously mentioned row of houses. The second passageway is
about 3 meters in width and length from the private respondents’ residence to P.
Burgos Street; it is about 26 meters. Thereafter, the petitioners constructed an
adobe fence in their respective properties such that the entire first passageway
was enclosed. Subsequently, the private respondents filed a complaint against
the petitioners for the grant of an easement of right of way with prayer for
damages. After trial, the trial court ordered the petitioners to grant the private
respondents access to the passageway upon payment of just compensation. Not
satisfied with the judgment, the private respondents faulted the trial court for
not awarding them damages. On the sole issue of whether the trial court erred
in not awarding damages in their favor, the matter reached the High Court.
In ruling that the private respondents were not entitled to damages, the Court
explained —
The act of petitioners in constructing a fence within their
lot is a valid exercise of their right as owners, hence not contrary
to morals, good customs or public policy. The law recognizes in
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 131
OWNERSHIP
Ownership in General
action arises in the latter’s favor. Any injury or damage occasioned
thereby is damnum absque injuria. The courts can give no redress
for hardship to an individual resulting from action reasonably
calculated to achieve a lawful end by lawful means.”
[37.3.2] Limitations on the Right of Excluding Others
While an owner is entitled to exclusive and undisturbed possession
of his property and has the right to exclude other persons from its
enjoyment and disposal, such right is unavailing if the interference by a
third person is borne out of a state of necessity. This is provided for in
Article 432 of the New Civil Code, which states:
“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.
(n)”
[i] State of Necessity, Explained
The phrase “state of necessity” is of German origin.102 Articles
228 and 904 of the German Civil Code provide, as follows:
“Art. 228. He who injures or destroys another’s property
in order to avoid an imminent danger to himself or a third
person, which danger comes from such property, shall not
be acting unlawfully, if the injury or destruction is necessary
to avoid the danger, and the damage is not disproportionate
to the latter. If the author has caused the danger, he shall be
liable to indemnify for losses and damages.”
“Art. 904. The owner of a thing cannot prohibit the
interference therein by another, if such interference is
necessary to avoid an actual danger, and the injury with
which the latter is threatened is much greater than that to be
suffered by the owner. The owner can recover indemnity for
the damage suffered.”
102
People v. Rebutado, G.R. No. 124058, Dec. 10, 2003.
130 PROPERTY
the owner the right to enjoy and dispose of a thing, without other
limitations than those established by law. It is within the right of
petitioners, as owners, to enclose and fence their property. Article
430 of the Civil Code provides that ‘(e)very owner may enclose or
fence his land or tenements by means of walls, ditches, live or dead
hedges, or by any other means without detriment to servitudes
constituted thereon.’
At the time of the construction of the fence, the lot was not
subject to any servitudes. There was no easement of way existing
in favor of private respondents, either by law or by contract. The
fact that private respondents had no existing right over the said
passageway is confirmed by the very decision of the trial court
granting a compulsory right of way in their favor after payment
of just compensation. It was only that decision which gave private
respondents the right to use the said passageway after payment of
the compensation and imposed a corresponding duty on petitioners
not to interfere in the exercise of said right.
Hence, prior to said decision, petitioners had an absolute
right over their property and their act of fencing and enclosing
the same was an act which they may lawfully perform in the
employment and exercise of said right. To repeat, whatever injury
or damage may have been sustained by private respondents by
reason of the rightful use of the said land by petitioners is damnum
absque injuria.
A person has a right to the natural use and enjoyment of his
own property, according to his pleasure, for all the purposes to
which such property is usually applied. As a general rule, therefore,
there is no cause of action for acts done by one person upon his
own property in a lawful and proper manner, although such acts
incidentally cause damage or an unavoidable loss to another, as
such damage or loss is damnum absque injuria. When the owner
of property makes use thereof in the general and ordinary manner
in which the property is used, such as fencing or enclosing the
same as in this case, nobody can complain of having been injured,
because the inconvenience arising from said use can be considered
as a mere consequence of community life.
The proper exercise of a lawful right cannot constitute a legal
wrong for which an action will lie, although the act may result in
damage to another, for no legal right has been invaded. One may
use any lawful means to accomplish a lawful purpose and though
the means adopted may cause damage to another, no cause of
132 PROPERTY
Under the provisions of Article 432 of the New Civil Code of the
Philippines, the interference by a third person with another’s property
is justified and cannot be prevented by the latter if such 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. An example of the application of the principle of state of
necessity is when a fire is threatening to spread and destroy other houses
and properties and the destruction of some houses will avert the spread
of the fire, such destruction is justified and will not be considered as
unlawful physical invasion upon another’s property.
In order for the interference to be justified under the state of
necessity, the following requisites must be present:
(1) there must be a situation of grave peril, an actual or imminent
danger, either upon the person of the actor or a third person or their
property;103
(2) the interference is necessary to avert such danger;104
(3) the threatened damaged, compared to the damage arising to
the owner from the interference, is much greater;105 and
(4) the state of necessity must not be brought about by the
intentional provocation of the party invoking the same.106
[ii] State of Necessity as Justifying Circumstance
The defense of a state of necessity is a justifying circumstance
under Article 11, paragraph 4 of the Revised Penal Code, which reads:
“Art. 11. Justifying circumstances. — The following
do not incur any criminal liability:
xxx xxx xxx
4. Any person who, in order to avoid an evil or
injury, does an act which causes damage to another provided
that the following requisites are present:
103
Art. 432, NCC.
104
Id.
105
Id.
106
People v. Rebutado, supra.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 133
OWNERSHIP
Ownership in General
First. That the evil sought to be avoided actually
exists;
Second. That the injury feared be greater than that done
to avoid it;
Third. That there be no other practical and less harmful
means of preventing it.”
Since “state of necessity” is a justifying circumstance, the accused
does not commit a crime in legal contemplation; hence, is not criminally
and civilly liable. Civil liability is borne by the person/persons benefited
by the act of the accused.107 This is the only case among the justifying
circumstances where there is civil liability, but the civil liability is
borne by the persons for whose benefit the harm has been prevented in
proportion to the benefit which they may have received.108
[iii] Indemnity For Damages
While interference to one’s property pursuant to a state of necessity
is justified and does not constitute unlawful aggression, the persons
benefited by such interference are duty bound to indemnify the owner
for the damage suffered by the latter.109
On this respect, the distinction made by the Senator Tolentino
between acts in a state of necessity and defense against unlawful ag-
gression or defense against dangerous objects must be taken into con-
sideration. If the danger comes from another’s property, the case is one
of defense against danger,110 in which case, there is no obligation to
indemnify the owner for the damage caused if the latter himself was
responsible for such damage.111 But if another’s property is used to avert
danger not arising from it, the act is essentially one in a state of neces-
sity112 which will entitle the owner to the indemnity provided in Article
432 of the Civil Code.
107
Id.
108
See Art. 101, 2nd par., RPC.
109
Art. 432, NCC.
110
II Tolentino, Civil Code of the Philippines, 1992 ed., 68.
111
Id., 70.
112
Id., 68.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 135
OWNERSHIP
Ownership in General
which may be exercised by another person against the property of the
owner, if they are in the nature of real rights, are referred to in Roman
Law as jus in re aliena.
The right of the owner to impose reasonable restrictions or
limitations on the right of ownership may even affect the property even
after it has ceased to belong to the person imposing the limitation113
subject to the qualification that such limitation must not be contrary to
the nature of ownership and not prohibited by law. A donor or testator,
for example, may prohibit partition of the subject property but such
prohibition cannot exceed twenty years.114
[37.4.1] Prohibition to Alienate
Prohibitions to alienate imposed by the will of the transmitting
owner are generally valid except when they are forbidden by law or
contrary to public policy. A testator, for example, may prohibit alienation
of the property given by will but such prohibition cannot exceed twenty
years.115 By analogy, therefore, a prohibition to alienate should not
exceed at most a period of twenty years whether the transmission of
ownership is done gratuitously or onerously, otherwise there would be
subversion of public policy, which naturally frowns on unwarranted
restrictions on the right of ownership.
A perpetual prohibition against alienation is, however, void for
being contrary to public policy. When, for example, the vendee of a
parcel of land was prohibited from selling the subject property except
to the vendor or to the latter’s heirs or successors, the Court held that
such prohibition to sell to third parties is contrary to public policy
because the same virtually amounts to a perpetual restriction to the
right of ownership, specifically the owner’s right to freely dispose of
his properties.116 According to the Court, any such prohibition, indefinite
and stated as to time, so much so that it shall continue to be applicable
even beyond the lifetime of the original parties to the contract, is,
without doubt, a nullity.117
113
II Tolentino, Civil Code, 1992 ed., 61.
114
Art. 494, 3rd par., NCC.
115
Art. 870, NCC.
116
Leal v. CA, G.R. No. L-65425, Nov. 5, 1987.
117
Id.
134 PROPERTY
[iv] Doctrine of Self-help vs. State of Necessity
The doctrine of self-help is invoked by the owner or lawful
possessor in protection of his right to prevent other persons from
interfering with the property. The state of necessity, on the other hand,
is availed of by another person against someone else’s property for the
purpose of averting an imminent danger to himself or to another person
or to their property.
Note that it is not possible for the application of both doctrines to
result in conflict of rights. If the application of one doctrine is proper,
it necessarily follows that the application of the other doctrine is not
proper. If, for example, all the requisites for the application of the
doctrine of state of necessity are present, the owner cannot rightfully
invoke the doctrine of self-help to defeat the application of the former.
If the application of the doctrine of state of necessity is proper, the same
is justified under the provisions of Article 432 of the New Civil Code
and it is, in fact, considered a justifying circumstance under Article 11,
fourth paragraph, of the Revised Penal Code. Such being the case, the
interference made is not considered as an “unlawful physical invasion
or usurpation” of another’s property, which is a requisite for the proper
application of the doctrine of self-help under Article 429 of the New
Civil Code.
[37.4] Limitations Imposed By the Owner Himself
The owner of the property may impose restrictions or limitations
on ownership in two situations: (1) at the time that he transmits the
property to another person; or (2) at the time that he continues to be the
owner of the property.
The owner of the property may, by reason of his right to dispose
(jus disponendi) as discussed in supra § 33, for the time being part with
some of the attributes of ownership, thereby restricting and abridging
his right. He may for example, enter into a contract of commodatum
wherein he grants to another person the jus utendi over the property
during the effectivity of the contract. Or he may constitute a usufruct
over his property in favor of another person, in which case, he parts
with the right of free enjoyment of his property (jus utendi) and the
right to receive the fruits (jus fruendi) thereof. In a contract of lease, the
owner parts with the right to the possession of the property. These rights
136 PROPERTY
[37.4.2] Validity of Stipulations In The Deed of Restric-
tions
The provision in the deed of restrictions which required a purchaser
of a parcel of land to pay association fees is a valid stipulation.118 A case in
point is Bel Air Village Association, Inc. v. Dionisio119 where the village
association filed a complaint for collection of the association dues and
also claimed for penalty and other charges. The Court affirmed the rule
that an annotation to the effect that the lot owner becomes an automatic
member of the village association and must abide by such rules and
regulations laid down by said association was a valid restraint on one’s
ownership over the property as the same was for the interest of the
sanitation, security and the general welfare of the community. In South
Pachem Development, Inc. v. Court of Appeals,120 one of the real estate
owners (SPDI) in the Makati commercial area and a member of the
Makati Commercial Estate Association, Inc. (MACEA) questioned the
validity of the stipulation in the deed of restrictions requiring purchasers
of land from Ayala Corporation to pay association dues to MACEA for a
period of 47 years from date of purchase. SPDI maintains that the period
of 47 years constitutes a restriction on its right to enjoy and dispose of
the property under Article 428 of the Civil Code as the non-payment of
the association dues would constitute a lien on the subject property. The
Court upheld the validity of the deed of restrictions because a contract
becomes the law between the parties and each one is bound to comply
therewith.
In Cariday Investment Corporation v. Court of Appeals,121 it was
recognized that residents and lot owners in the subdivision automatically
become members of the Forbes Park Association and are bound by its
rules and regulations stipulated in the “deed of restrictions.” A provision
in the “deed of restrictions” annotated at the back of the certificate of
title of a lot owner in the Forbes Park Subdivision required the owner
to use his lot for residential purposes and stated that not more than one
single family residential building will be constructed thereon; that the
property would be subject to an easement of two meters within the lot
118
South Pacem Development, Inc. v. CA, G.R. No. 126260, Dec. 16, 2004.
119
174 SCRA 589 (1989).
120
Supra.
121
176 SCRA 31 (1989).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 137
OWNERSHIP
Ownership in General
and adjacent to the rear and two sides thereof for the purpose of drainage,
sewerage water and other public facilities as may be necessary and
desirable; and that additional restrictions, reservations, or servitudes as
the association may, from time to time, adopt and prescribe would be
for a period of fifty (50) years from January 1, 1949. Therein petitioner
allowed the occupancy by two families, thereby violating the “single-
family residential building restriction.” The Supreme Court declared
that the purpose of the restriction is valid as it avoids overcrowding both
in the houses and in the subdivision which would result in pressure upon
the common facilities such as water, power and telephone connections;
accelerate the deterioration of the roads; and create problems of
sanitation and security in the subdivision. Likewise, the restrictions
were for aesthetic consideration and for the preservation of the peace,
beauty, tranquility, and serenity of living at Forbes Park.
Art. 433. Actual possession under claim of ownership raises a dis-
putable presumption of ownership. The true owner must resort to judicial
process for the recovery of the property. (n)
Art. 434. In an action to recover, the property must be identified, and
the plaintiff must rely on the strength of his title and not on the weakness
of the defendant’s claim. (n)
Art. 435. No person shall be deprived of his property except by com-
petent authority and for public use and always upon payment of just com-
pensation.
Should this requirement be not first complied with, the courts
shall protect and, in a proper case, restore the owner in his possession.
(349a)
Art. 436. When any property is condemned or seized by competent
authority in the interest of health, safety or security, the owner thereof
shall not be entitled to compensation, unless he can show that such con-
demnation or seizure is unjustified. (n)
§ 38. Recovery of Property
[38.1] Presumption of Ownership
Possession is viewed by the Civil Code as presumed ownership.122
Hence, if a person is in actual possession of a property and claiming
to be its owner, the law presumes that he is the owner thereof. This
122
II Caguioa, Civil Code, 1966 ed., 165.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 139
OWNERSHIP
Ownership in General
or violence in recovering the property, such recovery of possession is
not recognized by law as valid.129
[38.2] Requisites of Accion Reivindicatoria
In civil cases, the law requires that the party who alleges a fact
and substantially asserts the affirmative of the issue has the burden
of proving it.130 This evidentiary rule is based on the principle that the
suitor who relies upon the existence of a fact should be called upon to
prove it.131 In relation to accion reivindicatoria, Article 434 of the New
Civil Code provides that to successfully maintain an action to recover
the ownership of a real property, the person who claims a better right to
it must prove two (2) things: first, the identity of the land claimed; and
second, his title thereto.132
If the plaintiff is unable to prove any of the foregoing requisites,
his action will fail even if the defendant cannot prove his title to the
property. In an action to recover real property, the settled rule is that the
plaintiff must rely on the strength of his title, not on the weakness of the
defendant’s title.133 This requirement is based on two (2) reasons: first, it
is possible that neither the plaintiff nor the defendant is the true owner
of the property in dispute;134 and second, the burden of proof lies on the
party who substantially asserts the affirmative of an issue for he who
relies upon the existence of a fact should be called upon to prove that
fact.135 Failure on the part of the plaintiff to prove his right of ownership
will bar an action to recover the property; his right to recover must be
founded on positive title or right, and not merely on negative ones, such
as the lack or insufficiency of title on the part of the defendant.136 The
possessor has a presumption of title, and unless the plaintiff proves he
has a better right, he cannot recover the property from the defendant.137
129
Art. 536, NCC.
130
Alonzo v. San Juan, G.R. No. 137549, February 11, 2005.
131
Ramcar, Inc. v. Garcia, 114 Phil. 1026 (1962).
132
Navalle-Hutchison v. Buscas, G.R. No. 158554, May 26, 2005.
133
Art. 434, NCC; see also Turquesa v. Valera, 322 SCRA 573 (2000).
134
Navalle-Hutchison v. Buscas, supra, citing Civil Code of the Philippines, Annotated,
Justice Edgardo L. Paras, vol. two, 14th ed. at 130.
135
Navalle-Hutchison v. Buscas, supra, citing Ramcar, Inc. v. Garcia, 114 Phil. 1026
(1962).
136
Heirs of Anastacio Fabela v. Court of Appeals, 362 SCRA 531 (2001).
137
Id., see also Art. 433, NCC.
138 PROPERTY
presumption of ownership arising from actual possession is expressly
recognized in Article 433 of the Civil Code which states that “actual
possession under claim of ownership raises a disputable presumption
of ownership.” This presumption is a necessary consequence of the
existence of presumptions in favor of the innocence of a person from any
wrongdoing123 and of his good faith.124 Hence, when a person has actual
possession of property under claim of ownership, the law presumes
him innocent of any wrongdoing and, therefore, he must be the owner
since possession is one of the rights included in ownership.125 The
presumption, however, is merely disputable126 and may be overthrown
by proof to the contrary.
Since actual possession under claim of ownership raises a disputable
presumption of ownership, such possession must be respected until it
is shown that another person has a better right over the property. This
principle is expressly recognized in Article 539 which provides:
“Art. 539. Every possessor has a right to be respected
in his possession; and should he be disturbed therein he shall
be protected in or restored to said possession by the means
established by the laws and the Rules of Court.
A possessor deprived of his possession through forcible
entry may within ten days from the filing of the complaint
present a motion to secure from the competent court in the
action for forcible entry, a writ of preliminary mandatory
injunction to restore him in his possession. The court shall
decide the motion within thirty (30) days from filing thereof.
(446a)”
Consequently, if another person claims to be the true owner of the
property, he cannot recover the property by force if the actual possessor
objects thereto.127 Even the true owner is required by law to resort to
judicial process in order to recover his property.128 If he resorts to force
123
See Rule 131, Sec. 3(a), Rules of Court.
124
See Art. 527, NCC.
125
II Caguioa, Civil Code, 1966 ed., 61.
126
Art. 433, NCC.
127
Art. 536, NCC.
128
Art. 433, NCC.
140 PROPERTY
[38.2.1] Proof of Identity
In an accion reinvindicatoria, the person who claims that he has
a better right to the property must first fix the identity of the land he
is claiming by describing the location, area and boundaries thereof.138
The rule is that he who claims to have a better right to the property
must clearly show that the land possessed by the other party is the very
land that belongs to him.139 So that when the record does not show that
the land subject matter of the action has been exactly determined, the
action cannot prosper, inasmuch as the plaintiff’s ownership rights in
the land claimed do not appear satisfactorily and conclusively proven
at the trial.140
What really defines a piece of land is the boundaries therein laid
down,141 which boundaries may either be natural or artificial.142 The
boundaries are considered natural if they are permanent landmarks
established by nature such as for example a river, a lake, a stream, etc.143
It is artificial if it is through concrete monuments established by the
Bureau of Lands or it consists in the property of neighbors.144 However,
in order that natural boundaries of land may be accepted for the purpose
of varying the extent of the land included in a deed of conveyance, the
evidence as to such natural boundaries must be clear and convincing.145
Such natural boundaries must be of such a character as to definitely and
accurately segregate the land in question from the adjoining property146
and there must be no doubt left that the land included within the natural
boundaries is the same land which was intended to be recovered by the
plaintiff.
The rule is that when there is a conflict between the area and the
boundaries of a land, the latter prevails for what really defines a piece
of land is not the area mentioned in its description, but the boundaries
138
Navalle-Hutchison v. Buscas, supra, citing Heirs of Anastacio Fabela v. Court of
Appeals, 362 SCRA 531 (2001).
139
Beo v. CA, 200 SCRA 575.
140
Bordalba v. CA, G.R. No. 112443, Jan. 25, 2002, citing Beo v. CA, 200 SCRA 575.
141
Intestate of Fausto Bayot v. Director of Lands, G.R. No. L-8536, April 28, 1956.
142
II Caguioa, Civil Code, 1966 ed., 62, citing Rosado v. Director of Lands, 58 Phil. 83.
143
Id.
144
Id., citing Government v. Abad, 47 Phil. 573.
145
Waldroop v. Castaxda, G.R. No. G.R. No. L-6852, 25 Phil. 30, August 9, 1913.
146
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 141
OWNERSHIP
Ownership in General
therein laid down, as enclosing the land and indicating its limits.147
However, it is only when the boundaries given are sufficiently certain and
the identity of the land clearly proved by the boundaries thus indicated
that an erroneous statement concerning the area can be disregarded or
ignored.148 Otherwise, the area stated should be followed.149 This is the
exception to the rule.150
[38.2.2] Proof of Title
As previously stated, the lack or insufficiency of title on the part of
the defendant does not entitle the plaintiff in an accion reivindicatoria
to a favorable decision unless he himself is able to support his claim of
ownership by evidence of title. In our jurisdiction, a certificate of title is
considered as conclusive evidence of ownership of the land described
therein, the validity of which is not subject to collateral attack.151 Hence,
as against an array of proofs consisting of tax declarations and/or tax
receipts which are not conclusive evidence of ownership nor proof of
the area covered therein, an original certificate of title indicates true and
legal ownership by the registered owners over the disputed premises.152
However, it has been held that if a person or entity obtains a title which
includes by mistake or oversight land which cannot be registered under
the Torrens System or over which the buyer has no legal right, said
buyer does not, by virtue of said certificate alone, become the owner of
the land illegally or erroneously included153 and where there is such an
error, the courts may decree that the certificate of title be cancelled and
a correct one issued to the buyer.154
147
Heirs of Anastacio Fabela v. Court of Appeals, 362 SCRA 531 (2001), citing Vda. de Tan
v. IAC, 213 SCRA 95, citing Dichoso v. CA, 192 SCRA 169; Erico v. Chigas, 98 SCRA 575.
148
Intestate of Fausto Bayot v. Director of Lands, supra.
149
Id., citing Sanchez v. Director of Lands, 63 Phil., 378, 386.
150
Id., see also Pamintuan v. Insular Government (1907), 8 Phil., 512; Paras v. Insular Gov-
ernment (1908), 11 Phil. 378; and Waldroop v. Castaxda, 25 Phil. 30.
151
Tubo-Rodriguez v. Rodriguez, G.R. No. 175720, Sept. 11, 2007.
152
Cureg v. IAC, G.R. No. 73465 Sept. 7, 1989; citing Ferrer-Lopez v. Court of Appeals,
G.R. No. 50420, May 29, 1987, 150 SCRA 393,401-402
153
Ledesma v. Mun. of Iloilo, 49 Phil. 773 (1926), citing Legarda and Prieto v. Saleeby, 31
Phil. 590.
154
Veterans Federation of the Philippines v. Court of Appeals, 345 SCRA 348 (2000), citing
Consul v. Buhay, 64 O.G. 29, July 15, 1968, CA.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 143
OWNERSHIP
Ownership in General
in the ad coelum rule of the Roman Law — Cujus est solum, ejus est
usque ad coelum ad infernos (to whomsoever the soil belongs, he owns
also to the sky and to the depths). However, the literal construction of
the ad coelum doctrine has already been rejected by the courts.161 This
formula “from the center of the earth to the sky” was invented at some
remote time in the past when the use of space above land actual or
conceivable was confined to narrow limits, and simply meant that the
owner of the land could use the overlying space to such an extent as
he was able, and that no one could ever interfere with that use.162 This
formula was never taken literally, but was a figurative phrase to express
the full and complete ownership of land and the right to whatever
superjacent airspace was necessary or convenient to the enjoyment of
the land.163 Our Civil Code, even as it adopted the ad coelum rule in
Article 437, has subjected the same to certain limitations: (1) that it
cannot work detriment to servitudes; (2) that it is subject to special laws
and ordinances; and (3) that it is subject to reasonable requirements of
aerial navigation.
As a consequence of the foregoing principle, the owner of the
land can make any construction thereon or make any plantation or
excavation which he may deem proper provided it does not impair
servitudes and, of course, subject to special laws and ordinances and
reasonable requirements of aerial navigation.164
[39.1] Right To the Sub-Surface or Subsoil
[39.1.1] Rights Over Land Are Indivisible
The ownership of land extends to the surface as well as to the
subsoil underneath. In Republic of the Philippines v. Court of Appeals,165
this principle was applied to show that rights over lands are indivisible
and, consequently, require a definitive and categorical classification.
In the above mentioned case, Jose Dela Rosa filed an application
for registration of a parcel of land situated in Itogon, Benguet claiming
161
See US v. Causby, 328 U.S. 256, 66 S. Ct. 1062, 90 L.Ed. 1206 (1946); Hinman v. Pacific
Air Transport, US Court of Appeals, 9th Circuit, 84 F.2d 755 (1936).
162
Hinman v. Pacific Air Transport, supra.
163
Id.
164
Art. 437, NCC.
165
Id.
142 PROPERTY
Regarding tax declarations and receipts, they are not conclusive
evidence of ownership.155 At most, they constitute mere prima facie
proof of ownership or possession of the property for which taxes have
been paid.156 In the absence of actual public and adverse possession, the
declaration of the land for tax purposes does not prove ownership.157 Yet,
when coupled with proof of actual possession, they are strong evidence
of ownership.158 Thus, where it was shown that plaintiff has never paid
the land tax, while the defendant has faithfully done so for many years,
there being no explanation offered, it was held that such payment of
taxes should be taken into consideration in favor of defendant.159
Art. 437. The owner of a parcel of land is the owner of its surface and
of everything under it, and he can construct thereon any works or make
any plantations and excavations which he may deem proper, without det-
riment to servitudes and subject to special laws and ordinances. He can-
not complain of the reasonable requirements of aerial navigation. (350a)
Art. 438. Hidden treasure belongs to the owner of the land, building,
or other property on which it is found.
Nevertheless, when the discovery is made on the property of an-
other, or of the State or any of its subdivisions, and by chance, one-half
thereof shall be allowed to the finder. If the finder is a trespasser, he shall
not be entitled to any share of the treasure.
If the things found be of interest to science or the arts, the State may
acquire them at their just price, which shall be divided in conformity with
the rule stated. (351a)
Art. 439. By treasure is understood, for legal purposes, any hidden
and unknown deposit of money, jewelry, or other precious objects, the
lawful ownership of which does not appear. (352)
§ 39. Right to Sub-surface and Airspace
It is a well-known principle that the owner of piece of land has
rights not only to its surface but also to everything underneath and the
airspace above it up to a reasonable height.160 This principle has its origin
155
Director of Lands v. IAC, 195 SCRA 38.
156
Heirs of Vencilao v. CA, 288 SCRA 574, 581-582; Deiparine v. CA, 299 SCRA 668, 675;
Tiong v. CA, 287 SCRA 102, 115.
157
Cequeña v. Bolante, G.R. No. 137944, April 6, 2000.
158
Heirs of Anastacio Fabela v. Court of Appeals, 362 SCRA 531 (2001).
159
Id.
160
Republic of the Philippines v. Court of Appeals, 160 SCRA 228 (1988), citing Art. 437,
NCC.
144 PROPERTY
that the same was agricultural land and that he acquired ownership over
it by virtue of acquisitive prescription, the same being in possession
of his predecessors-in-interest for a period long enough to meet the
requirements of the law. Such application was opposed by Benguet
Consolidated, Inc., Atok Big Wedge Corporation and the Republic of
the Philippines, through the Bureau of Forestry Development. Benguet
and Atok each claimed that they acquired minerals claims over certain
portions of the land. The Republic, on the other hand, claimed that the
land was covered by the Central Cordillera Forest Reserve and, thus,
part of public dominion.
With respect to the claim of the Republic of the Philippines, the
Supreme Court held that while the subject property was considered
forest land and included in the Central Cordillera Forest Reserve, the
same did not impair the rights already vested in Benguet and Atok
at that time. The Court reasoned that under the law then in force, the
perfection of the mining claim converted the property to mineral land
and removed it from the public domain. By such act, the locators of the
mining claims from whom Benguet and Atok acquired their respective
claims, already acquired exclusive rights over the land, against even
the government, without need of any further act such as the purchase of
the land or the obtention of a patent over it. As the land had become the
private property of the locators, they had the right to transfer the same,
as they did, to Benguet and Atok.
With respect to the claim of ownership by Dela Rosa, the Court
held that even if it be assumed that his predecessors-in-interest had
really been in possession of the subject property, their possession was
not in the concept of owner of the mining claim but of the property as
agricultural land, which it was not. The property was mineral land, and
they were claiming it as agricultural land. The Court noted that said
predecessors-in-interest did not dispute the rights of the mining locators
nor did they seek to oust them as such and to replace them in the mining
land. In fact, one of the predecessors-in-interest testified that she was
aware of the diggings being undertaken “down below” but she did not
mind and did not protest the same although she claimed to be the owner
of the said land.
When the case was decided by the Court of Appeals, the appellate
court held that there was no conflict of interest between the owners
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 145
OWNERSHIP
Ownership in General
of the surface rights (referring to the predecessors-in-interest of Dela
Rosa) and the owners of the sub-surface rights (referring to the mining
locators). When the case was elevated to the Supreme Court, the High
Court found the Court of Appeal’s ruling to be a strange doctrine for
the land would be classified as mineral underneath and agricultural
on the surface, subject to separate claims of title. The Supreme Court
then held that rights over the land are indivisible and that the land itself
cannot be half agricultural and half mineral. According to the Court, the
classification must be categorical; the land must be either completely
mineral or completely agricultural. In this case, the Court categorically
classified the land as mineral land. The Court explained, thus —
The Court of Appeals justified this by saying there is
“no conflict of interest” between the owners of the surface
rights and the owners of the sub-surface rights. This is rather
strange doctrine, for it is a well-known principle that the
owner of piece of land has rights not only to its surface but
also to everything underneath and the airspace above it up
to a reasonable height. Under the aforesaid ruling, the land
is classified as mineral underneath and agricultural on the
surface, subject to separate claims of title. This is also difficult
to understand, especially in its practical application.
Under the theory of the respondent court, the surface
owner will be planting on the land while the mining locator
will be boring tunnels underneath. The farmer cannot dig
a well because he may interfere with the operations below
and the miner cannot blast a tunnel lest he destroy the
crops above. How deep can the farmer, and how high can
the miner, go without encroaching on each other’s rights?
Where is the dividing line between the surface and the sub-
surface rights?
The Court feels that the rights over the land are
indivisible and that the land itself cannot be half agricultural
and half mineral. The classification must be categorical;
the land must be either completely mineral or completely
agricultural. In the instant case, as already observed, the land
which was originally classified as forest land ceased to be so
and became mineral — and completely mineral — once the
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 147
OWNERSHIP
Ownership in General
NAPOCOR maintains that the sub-terrain portion where the
underground tunnels were constructed does not belong to the private
respondents (the co-owners) even if they owned the property because
their right to the subsoil does not extend beyond what is necessary to
enable them to obtain all the utility and convenience that such property
can normally give. NAPOCOR also asserts that respondents were still
able to use the subject property even with the existence of the tunnels.
In finding the arguments of NAPOCOR to be without merit, the
Supreme Court held that pursuant to Article 437 of the Civil Code,
the ownership of land extends to the surface as well as to the subsoil
under it. The Court explained that the argument by the petitioner that
the landowners’ right extends to the sub-soil insofar as necessary for
their practical interests serves only to further weaken its case because
the theory would limit the right to the sub-soil upon the economic utility
which such area offers to the surface owners. Presumably, according to
the Court, the landowners’ right extends to such height or depth where
it is possible for them to obtain some benefit or enjoyment, and it is
extinguished beyond such limit as there would be no more interest
protected by law. In this case, the landowners could have dug upon
their property motorized deep wells but were prevented from doing so
by the authorities precisely because of the construction and existence
of the tunnels underneath the surface of their property. Hence, the land
owners still had a legal interest in the sub-terrain portion insofar as they
could have excavated the same for the construction of the deep well.
There was, therefore, in this case, “taking” of private respondents’
property which entitled the latter to the payment of just compensation.
The Court explained —
In disregarding this procedure and failing to recognize
respondents’ ownership of the sub-terrain portion, petitioner
took a risk and exposed itself to greater liability with the
passage of time. It must be emphasized that the acquisition
of the easement is not without expense. The underground
tunnels impose limitations on respondents’ use of the property
for an indefinite period and deprive them of its ordinary use.
Based upon the foregoing, respondents are clearly entitled
to the payment of just compensation. Notwithstanding the
fact that petitioner only occupies the sub-terrain portion, it
146 PROPERTY
mining claims were perfected. As long as mining operations
were being undertaken thereon, or underneath, it did not
cease to be so and become agricultural, even if only partly
so, because it was enclosed with a fence and was cultivated
by those who were unlawfully occupying the surface.166
[39.1.2] Extent of Rights Over The Sub-Surface
With respect to the land owner’s right to the subsoil, the question
that comes to mind is this: up to what extent will the land owner’s right
be with respect to the sub-surface? This is the question that confronts
the Supreme Court in the case of National Power Corporation v.
Ibrahim.167
In the above-mentioned case, the National Power Corporation
constructed underground tunnels on several parcels of land owned
in common by Ibrahim and his co-owners situated in Lanao Del Sur.
NAPOCOR constructed the tunnels in 1978 but its existence was
discovered by the land owners only in 1992. The tunnels were apparently
being used by NAPOCOR in siphoning the water of Lake Lanao and
in the operation of NAPOCOR’s other projects located in other parts
of Mindanao. The existence of the tunnels came to the attention of the
co-owners only when one of them applied for a permit with the Marawi
City Water District to construct and/or install a motorized deep well.
The application was denied on the ground that the construction of the
deep well would cause danger to lives and property because Marawi
City lies in an area of local volcanic and tectonic activity and because
of the existence of tunnels underneath the surface of their property. He
was then informed that underneath the land are underground tunnels
of the NAPOCOR. Upon such discovery, the co-owners filed an action
against NAPOCOR for recovery of land and damages.
The trial court denied the prayer of the co-owners for the
dismantling of the tunnels but ordered NAPOCOR to pay them just
compensation since there was “taking” of their property. The Court of
Appeals sustained the decision of the trial Court. Hence, NAPOCOR
elevated the matter to the Supreme Court.
166
At pp. 237-238.
167
526 SCRA 149 (2007).
148 PROPERTY
is liable to pay not merely an easement fee but rather the full
compensation for land. This is so because in this case, the
nature of the easement practically deprives the owners of
its normal beneficial use. Respondents, as the owners of the
property thus expropriated, are entitled to a just compensation
which should be neither more nor less, whenever it is possible
to make the assessment, than the money equivalent of said
property.168
[39.2] Right to Hidden Treasure
Since the owner of the land is likewise the owner of its sub-surface
or sub-soil, any “hidden treasure” on the sub-surface also belongs to
him.169 The same rule applies if the “hidden treasure” is located on a
building or other property — the same belong to the owner of the building
or other property on which it is found.170 However, when the discovery
is made by a stranger who is not a trespasser and the discovery is by
chance, the finder is entitled to one-half of the treasure.171 If the finder is
a trespasser, he shall not be entitled to any share of the treasure.172
[39.2.1] Concept of “Hidden Treasure”
For legal purposes, “hidden treasure” is understood to be any
hidden and unknown deposit of money, jewelry, or other precious
objects, the lawful ownership of which does not appear.173 Hence, for a
property to be considered as “hidden treasure” the following requisites
must be satisfied: (1) the deposit of money, jewelry or other precious
objects must be hidden or unknown; and (2) the lawful ownership of
which must not appear.
Under the ejusdem generis rule, the term “other precious objects”
should be understood as being similar to money or jewelry.174 Hence, the
concept does not include natural wealth, i.e., minerals and petroleum.
The Regalian doctrine reserves to the State all natural wealth that may
168
At pp. 163-164.
169
Art. 438, 1st par., NCC.
170
Id.
171
Art. 438, 2nd par., NCC.
172
Id.
173
Art. 439, NCC.
174
Vitug, Civil Law, Vol. 1, 2003 ed., p. 15.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 149
OWNERSHIP
Ownership in General
be found in the bowels of the earth even if the land where the discovery
is made be private.175 As such, the right of the owner of the land with
respect to the sub-surface or subsoil is subject to the application of the
Regalian doctrine.
EDWARDS v. SIMS
Court of Appeals of Kentucky, 1929.
232 Ky. 791, 24 S.W.2d 619.
STANLEY, C. This case presents a novel question.
In the recent case of Edwards v. Lee, 230 Ky. 375, 19 S.W.2d 992, an
appeal was dismissed which sought a review and reversal of an order of the
Edmonson circuit court directing surveyors to enter upon and under the lands
of Edwards and others and survey the Great Onyx Cave for the purpose of
securing evidence on an issue as to whether or not a part of the cave being
exploited and shown by the appellants runs under the ground of Lee. The
nature of the litigation is stated in the opinion and the order set forth in full. It
was held that the order was interlocutory and consequently one from which no
appeal would lie.
Following that decision, this original proceeding was filed in this court
by the appellants in that case (who were defendants below) against Hon. N.P.
Sims, judge of the Edmonson circuit court, seeking a writ of prohibition to
prevent him enforcing the order and punishing the petitioners for contempt
for any disobedience of it. It is alleged by the petitioners that the lower court
was without jurisdiction or authority to make the order, and that their cave
property and their right of possession and privacy will be wrongfully and
illegally invaded, and that they will be greatly and irreparably injured and
damaged without having an adequate remedy, since the damage will have been
suffered before there can be an adjudication of their rights on a final appeal.
It will thus be seen that there are submitted the two grounds upon which this
court will prohibit inferior courts from proceeding, under the provisions of
Section 110 of the Constitution, namely: (1) Where it is a matter in which it
has no jurisdiction and there is no remedy through appeal, and (2) where the
court possesses jurisdiction but is exercising or about to exercise its power
erroneously, and which would result in great injustice and irreparable injury to
the applicant, and there is no adequate remedy by appeal or otherwise. Duffin
v. Field, Judge, 208 Ky. 543, 271 S.W. 596; Potter v. Gardner, 222 Ky. 487, 1
S.W.2d 537; Litteral v. Woods, 223 Ky. 582, 4 S.W.2d 395.
175
Republic v. CA, 160 SCRA 228.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 151
OWNERSHIP
Ownership in General
There is some limitation upon this inherent power, such as that the person
applying for such an inspection must show a bona fide claim and allege facts
showing a necessity for the inspection and examination of the adverse party’s
property; and, of course, the party whose property is to be inspected must have
had an opportunity to be hear in relation thereto. In the instant case it appears
that these conditions were met. * * *
We can see no difference in principle between the invasion of a mine on
adjoining property to ascertain whether or not the minerals are being extracted
from under the applicant’s property and an inspection of this respondent’s
property through his cave to ascertain whether or not he is trespassing under
this applicant’s property.
It appears that before making this order the court had before him surveys
of the surface of both properties and the conflicting opinions of witnesses
as to whether or not the Great Onyx Cave extended under the surface of the
plaintiff’s land. This opinion evidence was of comparatively little value, and as
the chancellor (now respondent) suggested, the controversy can be quickly and
accurately settled by surveying the cave; and “if defendants are correct in their
contention this survey will establish it beyond all doubt and their title to this
cave will be forever quieted. If the survey shows the Great Onyx Cave extends
under the lands of plaintiffs, defendants should be glad to know this fact and
should be just as glad to cease trespassing upon plaintiff’s lands, if they are in
fact doing so.” The peculiar nature of these conditions, it seems to us, makes it
imperative and necessary in the administration of justice that the survey should
have been ordered and should be made.
It appearing that the circuit court is not exceeding its jurisdiction or
proceeding erroneously, the claim of irreparable injury need not be given
consideration. It is only when the inferior court is acting erroneously, and great
or irreparable damage will result, and there is no adequate remedy by appeal,
that a writ of prohibition will issue restraining the other tribunal, as held by
authorities cited above.
The writ of prohibition is therefore denied.
Whole court sitting.
If the case of Edwards v. Sims, however, will transpire in the
Philippines, the ad coelum rule will not apply because caves in this
country are considered part of the national wealth, hence, owned by
the State by virtue of its regalian right,176 whether the entrance thereof
176
See Sec. 2, Art. XII, 1987 Phil. Constitution.
150 PROPERTY
1. There is no question as to the jurisdiction of the parties and the
subject matter. It is only whether the court is proceeding erroneously within
its jurisdiction in entering and enforcing the order directing the survey of
the subterranean premises of the petitioners. There is but little authority of
particular and special application to caves and cave rights. In few places, if
any, can be found similar works of nature of such grandeur and of such unique
and marvelous character as to give to caves a commercial value sufficient to
cause litigation as those peculiar to Edmonson and other countries in Kentucky.
The reader will find of interest the address on “The Legal Story of Mammoth
Cave” by Hon. John B. Rodes, of Bowling Green, before the 1929 Session
of the Kentucky State Bar Assocation, published in its proceedings. In Cox v.
Colossal Cavern Co., 210 Ky. 612, 276 S.W. 540, the subject of cave rights
was considered, and this court held there may be a severance of the estate in
the property, that is, that one may own the surface and another the cave rights,
the conditions being quite similar to but not exactly like those of mineral lands.
But there is no such severance involved in this case, as it appears that the
defendants are the owners of the land and have in it an absolute right.
Cujus est solum, ejus est usque ad coelum ad infernos (to whomsoever
the soil belongs, he owns also to the sky and to the depths), is an old maxim
and rule. It is that the owner of realty, unless there has been a division of the
estate, is entitled to the free and unfettered control of his own land above,
upon, and beneath the surface. So whatever is in a direct line between the
surface of the land and the center of the earth belongs to the owner of the
surface. Ordinarily that ownership cannot be interfered with or infringed by
third persons. 17 C.J. 391; 22 R.C.L. 56; Langhorne v. Turman, 141 Ky. 809,
133 S.W. 1008, 34 L.R.A., N.S., 211. There are, however, certain limitations
on the right of enjoyment of possession of all property, such as its use to the
detriment or interference with a neighbor and burdens which it must bear in
common with property of a like kind. 22 R.C.L. 77.
With this doctrine of ownership in mind, we approach the question as to
whether a court of equity has a transcendent power to invade that right through
its agents for the purpose of ascertaining the truth of a matter before it, which fact
thus disclosed will determine certainly whether or not the owner is trespassing
upon his neighbor’s property. Our attention has not been called to any domestic
case, nor have we found one, in which the question was determined either
directly or by analogy. It seems to the court, however, that there can be little
differentiation, so far as the matter now before us is concerned, between caves
and mines. And as declared in 40 C.J. 947: “A court of equity, however, has the
inherent power, independent of statute, to compel a mine owner to permit an
inspection of his works at the suit of a party who can show reasonable ground
for suspicion that his lands are being trespassed upon though them, and may
issue an injunction to permit such inspection.”
152 PROPERTY
is located either in a private or public land and whether such entrance is
naturally formed or man made.177
The conservation, protection and management of caves and cave
resources in the Philippines is governed by R.A. No. 9072, otherwise
known as the “National Caves and Caves Resources Management and
Protection Act,” which directs and empowers the DENR, in coordination
with the Department of Tourism (DOT), the National Museum, the
National Historical Institute and concerned local government units
(LGUs) for specific caves, to implement the provisions of the aforesaid
law.
REPUBLIC ACT NO. 9072
(National Caves and Cave Resources Management and Protection Act)
AN ACT TO MANAGE AND PROTECT CAVES AND CAVE
RESOURCES AND FOR OTHER PURPOSES.
Sec. 1. Title. — This Act shall be known as the “National Caves and
Cave Resources Management and Protection Act.”
Sec. 2. Declaration of Policy. — It is hereby declared the policy of
the State to conserve, protect and manage caves and cave resources as part
of the country’s natural wealth. Towards this end, the State shall strengthen
cooperation and exchange of information between governmental authorities
and people who utilize caves and cave resources for scientific, educational,
recreational, tourism and other purposes.
Sec. 3. Definition of Terms. — For purposes of this Act, the following
terms shall be defined as follows:
(a) “Cave” means any naturally occurring void, cavity, recess or
system of interconnected passages beneath the surface of the earth or within a
cliff or ledge and which is large enough to permit an individual to enter, whether
or not the entrance, located either in private or public land, is naturally formed
or man made. It shall include any natural pit, sinkhole or other feature which
is an extension of the entrance. The term also includes cave resources therein,
but not any vug, mine tunnel, aqueduct or other manmade excavation.
(b) “Cave resources” includes any material or substance occurring
naturally in caves, such as animal life, plant life, including paleontological
177
See Sec. 3(a), R.A. No. 9072, otherwise known as the “National Caves and Caves Re-
sources Management and Protection Act.”
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 153
OWNERSHIP
Ownership in General
and archaeological deposits, cultural artifacts or products of human activities,
sediments, minerals, speleogems and speleothems.
(c) “Secretary” means the Secretary of the Department of Environment
and Natural Resources (DENR).
(d) “Speleogem” means relief features on the walls, ceilings and floor
of any cave or lava tube which are part of the surrounding bedrock, including
but not limited to anastomoses, scallops, meander niches, petromorphs and
rock pendants in solution caves and similar features unique to volcanic caves.
(e) “Speleothem” means any natural mineral formation or deposit
occurring in a cave or lava tube, including but not limited to any stalactite,
stalagmite, helictite, cave flower, flowstone, concretion, drapery, rimstone or
formation of clay or mud.
(f) “Significant Cave” refers to a cave which contains materials or
possesses features that have archaeological, cultural, ecological, historical or
scientific value as determined by the DENR in coordination with the scientific
community and the academe.
Sec. 4. Implementing Agency. — The DENR shall be the lead agency
tasked to implement the provisions of this Act in coordination with the
Department of Tourism (DOT), the National Museum, the National Historical
Institute and concerned local government units (LGUs) for specific caves,
except that in the Province of Palawan, the Palawan Council for Sustainable
Development shall be the lead implementing agency pursuant to Republic Act
No. 7611 or the Strategic Environmental Plan for Palawan Act.
Sec. 5. Powers and Functions of the Department of Environment and
Natural Resources (DENR). — In the implementation of this Act, the DENR
shall exercise the following powers and functions:
(a) Formulate, develop and implement a national program for the
management, protection and conservation of caves and cave resources;
(b) Disseminate information and conduct educational campaign on the
need to conserve, protect and manage our caves and cave resources;
(c) Issue permits for the collection and removal of guano and other cave
resources which shall be determined in coordination with the DOT, National
Museum, concerned LGUs, the scientific community and the academe, with
regard to specific caves taking into consideration biodiversity as well as the
aesthetic and archaeological value of the cave: Provided, That the permittee
shall be required to post a bond to ensure compliance with the provisions of any
permit: Provided, further, That any permit issued under this Section shall be
revoked by the Secretary when the permittee violates any provision of this Act
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 155
OWNERSHIP
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Sec. 7. Prohibited Acts. — The following shall be considered Prohibited
Acts:
(a) Knowingly destroying, disturbing, defacing, marring, altering,
removing, or harming the speleogem or speleothem of any cave or altering the
free movement of any animal or plant life into or out of any cave;
(b) Gathering, collecting, possessing, consuming, selling, bartering or
exchanging or offering for sale without authority any, cave resource; and
(c) Counselling, procuring, soliciting or employing any other person
to violate any provisions of this Section.
Sec. 8. Penalties. — Any person found guilty of any of the offenses
enumerated under Section 7 hereof shall be punished by imprisonment
from two (2) years to six (6) years or a fine ranging from Twenty thousand
pesos (P20,000) to five hundred thousand pesos (P500,000.00) or both at the
discretion of the Court: Provided, That the person furnishing the capital to
accomplish the acts punishable herein shall be punished by imprisonment from
six (6) years and one (1) day to eight (8) years or by a fine ranging from Five
hundred thousand pesos (P500,000.00) to One million pesos (P1,000,000.00)
or both at the discretion of the Court: Provided, further, That if the area requires
rehabilitation or restoration as determined by the Court, the offender shall also
be required to restore the same, whenever practicable or compensate for the
damage: Provided, finally, That if the offender is a government employee, he
or she shall likewise be removed from office.
Sec. 9. Administrative Confiscation and Conveyance. — The Secretary
shall order the confiscation, in favor of the Government of the cave resources
gathered, collected, removed, possessed or sold including the conveyance and
equipment used in violation of Section 7 hereof.
Sec. 10. Fees. — Any money collected by the DENR as permit fees for
collection and removal of cave resources, as a result of the forfeiture of a bond
or other security by a permittee who does not comply with the requirements of
such permit issued under this Act or by way of fines for violations of this Act
shall be remitted to the National Treasury.
Sec. 11. Implementing Rules and Regulations. — The DENR shall,
within six (6) months from the effectivity of this Act, issue rules and regulations
necessary to implement the provisions hereof.
Sec. 12. Appropriations. — The amount necessary to carry out the
provisions of this Act shall be included in the General Appropriations Act of
the year following its enactment into law and thereafter.
154 PROPERTY
or fails to comply with any other condition upon which the permit was issued:
Provided, furthermore, That the Secretary cannot issue permits for the removal
of stalactites and stalagmites, and when it is established that the removal of the
resources will adversely affect the value of a significant cave: Provided, finally,
That caves located within a protected area shall be subjected to the provisions
of Republic Act No. 7586 or the National Integrated Protected Area System
Act of 1992;
(d) Call on any local government unit, bureau, agency, state university
or college and other instrumentalities of the government for assistance as the
need arises in the discharge of its functions;
(e) Enter into a memorandum of agreement with any local government
unit (LGU) for the preservation, development and management of cave or
caves located in their respective territorial jurisdiction;
(f) Tap the cooperation of people’s and non-governmental organiza-
tions as active partners in the conservations and protection of our caves and
cave resources; and
(g) Exercise other powers and perform other functions as may be
necessary to implement the provisions of this Act.
Sec. 6. Information Concerning the Nature and Location of Significant
Caves. — Information concerning the nature and specific location of a
potentially significant cave shall not be made available to the public within
one (1) year after its discovery by the DENR, during which time the DENR
in coordination with the DOT, the National Museum, the National Historical
Institute, concerned LGUs the scientific community and the academe shall
assess its archaeological, cultural, ecological, historical and scientific value,
unless a written request is made and the Secretary determines that disclosure
of such information will further the purpose of this Act and will not create a
substantial risk of harm, theft or destruction on such cave.
The written request shall contain, among others, the following:
(a) a description of the geographic site for which the information is
sought;
(b) an explanation of the purpose for which the information is
sought;
(c) an assurance or undertaking satisfactory to the Secretary that
adequate measures are to be taken to protect the confidentiality of such
information and to ensure the protection of the cave from destruction by
vandalism and unauthorized use.
156 PROPERTY
Sec. 13. Separability Clause. — If any provisions of this Act is subse-
quently declared unconstitutional, the remaining provisions shall remain in full
force and effect.
Sec. 14. Repealing Clause. — Presidential Decree No. 1726-A is hereby
modified. Treasure hunting in caves shall be governed by the provisions of this
Act.
Except Presidential Decree No. 412 and Republic Act No. 4846, all other
laws, decrees, orders and regulations or parts thereof which are inconsistent with
any of the provisions of this Act are hereby repealed or amended accordingly.
Sec. 15. Effectivity. — This Act shall take effect fifteen (15) days following
its publication in two (2) national newspapers of general circulation.
[39.2.2] Rule on Ownership of “Hidden Treasure” under
Article 438
If the finder of the hidden treasure is the owner of the land, building
or property on which it is found, the treasure shall belong to him.178 If
the finder is a third person, he is entitled to one-half of the treasure if he
is not a trespasser and the discovery of the treasure is only by chance;
otherwise, he shall not be entitled.179 The same rule shall apply even if
the land belongs to the State.180 However, if the thing found be of interest
to science or the Arts, the State may acquire them by paying just price,
whether the finder of the treasure is the owner of the property on which
it is found or a third person.181
[39.2.3] Rule on “Treasure Hunting”
The provisions of Article 438 of the New Civil Code on “hidden
treasure” shall apply only if the discovery of the treasure is by chance.
If the search for the hidden treasure is deliberate, otherwise known as
“treasure hunting,” such activity is governed by the following:
(1) Republic Act No. 8492, otherwise known as the National
Museum Act of 1998, for issuance of permits for the discovery/recovery
of hidden treasures, shipwrecks/sunken vessels recovery exclusively
for materials of cultural and historical values, such as objects of arts,
178
Art. 438, 1st par., NCC.
179
Art. 438, 2nd par., NCC.
180
Id.
181
Art. 438, 3rd par., NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 157
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archaeological artifacts, ecofacts, relics and other materials embodying
the cultural and natural heritage of the Filipino nation, as well as those
of foreign origin;
(2) As to issuance of permits not covered by R.A. No. 8492,
the same shall be governed by DENR Administrative Order No. 2002-
04, as amended by DENR AO No. 2004-2003, in relation to Executive
Order No. 35, dated September 15, 2001. Pursuant to EO No. 35, the
function to issue licenses and permits for treasure hunting and shipwreck
recovery has been transferred from the Office of the President to the
Department of Environment and Natural Resources.
In case of treasure hunting for treasures which are not of cultural
and historical values, the same shall require the issuance of a permit for
treasure hunting or shipwreck/sunken vessel recovery to be issued by the
Department of Environment and Natural Resources, whether the treasure
hunting is to be undertaken on private lands or government lands182 and
subject to the consent of the private landowners or government agencies
concerned.183 Upon discovery of valuable items such as monies, things
and articles of value, resulting from treasure hunting and shipwreck/
sunken vessel recovery activities, the National Museum shall be called
upon to determine whether or not they are considered to have cultural
and/or historical value.184 In the event that the items are considered to
have historical and cultural value, it shall be turned over to the National
Museum for appropriate action. Otherwise, the same shall be turned to
an oversight committee created pursuant to DENR AO No. 2002-04
for valuation and disposition.185 All treasures found shall be allowed for
export only upon the approval of the National Heritage Commission
and other concerned government agencies.186 After an audited report of
expenses has been evaluated and approved by the oversight committee,
the sharing of the net proceeds shall be as follows:
(1) for treasure hunting within public lands – 75% to the
Government and 25% to the permit holder;
182
Sec. 2, DENR AO No. 2002-04, as amended.
183
Sec. 7, DENR AO No. 2002-04, as amended.
184
Sec. 12, DENR AO No. 2002-04, as amended.
185
Id.
186
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 159
OWNERSHIP
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Hinman v. Pacific Air Transport
United States Court of Appeals, Ninth Circuit, 1936
84 F.2d 755
HANEY, Circuit Judge. From decrees sustaining motions to dismiss filed
by defendants in two suits, appellants appeal and bring for review by this court
the rights of a landowner in connection with the flight of aircraft above his land.
Appellant filed one bill against Pacific Air Transport, an Oregon corporation,
and another bill against United Air Lines Transport Corporation, a Delaware
corporation, in each of which the allegations are nearly identical. Although two
appeals are before the court, briefs filed discuss both cases, and therefore we
will consider them together. * * *
It is * * * alleged that defendants are engaged in the business of operating
a commercial airline, and that at all times “after the month of May, 1929,
defendants daily, repeatedly and upon numerous occasions have disturbed,
invaded and trespassed upon the ownership and possession of plaintiffs’ tract;”
that at said times defendants have operated aircraft in, across, and through said
airspace at altitudes less than 100 feet above the surface; that plaintiffs notified
defendants to desist from trespassing on said airspace; and that defendants
have disregarded said notice, unlawfully and against the will of plaintiffs, and
continue and threaten to continue such trespasses. * * *
The prayer asks an injunction restraining the operation of the aircraft
through the airspace over plaintiffs’ property and for $90,000 damages in each
of the cases.
Appellees contend that it is settled law in California that the owner of
land has no property rights in superjacent airspace, either by code enactments
or by judicial decrees and that the ad coelum doctrine * * * does not apply in
California. We have examined the statutes of California, particularly California
Civil Code, § 659 and § 829, as well as Grandona v. Lovdal, 21 P. 366; Wood v.
Moulton, 80 P. 92; and Kafka v. Bozio, 218 P. 753, but we find nothing therein to
negative the ad coelum formula. Furthermore, if we should adopt this formula
as being the law, there might be serious doubt as to whether a state statute
could change it without running counter to the Fourteenth amendment to the
Constitution of the United States. If we could accept and literally construe the
ad coelum doctrine, it would simplify the solution of this case; however, we
reject that doctrine. We think it is not the law, and that it never was the law.
This formula “from the center of the earth to the sky” was invented
at some remote time in the past when the use of space above land actual or
conceivable was confined to narrow limits, and simply meant that the owner
of the land could use the overlying space to such an extent as he was able, and
that no one could ever interfere with that use.
158 PROPERTY
(2) for treasure hunting in private lands – 30% to the Govern-
ment and 70% to be shared by the permit holder and the
landowner; and
(3) for shipwreck/sunken vessel recovery – 50% to the Govern-
ment and 50% to the permit holder.
[39.3] Right to the Airspace
[39.3.1] Extent of Landowner’s Right to Airspace
The air, like the sea, is by its nature incapable of private ownership,
except insofar as one may actually use it.187 While the airspace is a public
highway, it is obvious that if the landowner is to have full enjoyment of
the land, he must have exclusive control of the “immediate reaches of
the enveloping atmosphere.”188 Otherwise buildings could not be erected,
trees could not be planted, and even fences could not be run.189 However,
when it is said that man owns, or may own, to the heavens, that merely
means that no one can acquire a right to the space above him that will
limit him in whatever use he can make of it as a part of his enjoyment
of the land.190 In other words, the landowner owns at least as much of the
space above the ground as he can occupy or use in connection with the
land.191 To this extent his title to the air is paramount.192 No other person
can acquire any title or exclusive right to any space above him.193
To the extent that one’s land includes air space above the land, any
unauthorized physical entry into that space is to be considered a trespass,
if done by a private person, or a case of “taking” of private property, if
done under governmental authority. Thus, in the case of United States
v. Causby,194 it was held that repeated flights at low levels directly over
private land may amount to a taking for which just compensation must
be paid to the landowner.
187
Hinman v. Pacific Air Transport, supra.
188
US v. Causby, 328 U.S. 256 (1946).
189
Id.
190
Hinman v. Pacific Air Transport, supra.
191
US v. Causby, supra.
192
Hinman v. Pacific Air Transport, supra.
193
Id.
194
Supra.
160 PROPERTY
This formula was never taken literally, but was a figurative phrase to
express the full and complete ownership of land and the right to whatever
superjacent airspace was necessary or convenient to the enjoyment of the
land.
In applying a rule of law, or construing a statute or constitutional provision,
we cannot shut our eyes to common knowledge, the progress of civilization,
or the experience of mankind. A literal construction of this formula will bring
about an absurdity. The sky has no definite location. It is that which presents
itself to the eye when looking upward; as we approach it, it recedes. There can
be no ownership of infinity, nor can equity prevent a supposed violation of an
abstract conception.
The appellants’ case, then, rests upon the assumption that as owners
of the soil they have an absolute and present title to all the space above the
earth’s surface, owned by them, to such a height as is, or may become, useful
to the enjoyment of their land. This height, the appellants assert in the bill, is
of indefinite distance, but not less than 150 feet. * * * This, then, is appellants’
premise, and upon this proposition they rest their case. Such an inquiry was
never pursued in the history of jurisprudence until the occasion is furnished by
the common use of vehicles of the air.
We believe, and hold, that appellants’ premise is unsound. The question
presented is applied to a new status and little aid can be found in actual precedent.
The solution is found in the application of elementary legal principles. The first
and foremost of these principles is that the very essence and origin of the legal
right of property is dominion over it. Property must have been reclaimed from
the general mass of the earth, and it must be capable by its nature of exclusive
possession. Without possession, no right in it can be maintained.
The air, like the sea, is by its nature incapable of private ownership,
except insofar as one may actually use it. This principle was announced long
ago by Justinian. It is in fact the basis upon which practically all of our so-
called water codes are based.
We own so much of the space above the ground as we can occupy or
make use of, in connection with the enjoyment of our land. This right is not
fixed. It varies with our varying needs and is co-extensive with them. The
owner of land owns as much of the space above him as he uses, but only so
long as he uses it. All that lies beyond belongs to the world.
When it is said that man owns, or may own, to the heavens, that merely
means that no one can acquire a right to the space above him that will limit him
in whatever use he can make of it as a part of his enjoyment of the land. To this
extent his title to the air is paramount. No other person can acquire any title or
exclusive right to any space above him.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 161
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Any use of such air or space by others which is injurious to his land, or
which constitutes an actual interference with his possession or his beneficial
use thereof, would be a trespass for which he would have remedy. But any
claim of the landowner beyond this cannot find a precedent in law, nor support
in reason.
It would be, and is, utterly impracticable and would lead to endless
confusion, if the law should uphold attempts of landowners to stake out, or
assert claims to definite, unused spaces in the air in order to protect some
contemplated future use of it. Such a rule, if adopted, would constitute a
departure never before attempted by mankind, and utterly at variance with the
reason of the law. If such a rule were conceivable, how will courts protect
the various landowners in their varying claims of portions of the sky? How
enforce a right of ejectment or restitution? Such a rule is not necessary for the
protection of the landowner in any right guaranteed him by the Constitution in
the enjoyment of his property. If a right like this were recognized and upheld
by the courts, it would cause confusion worse confounded. It is opposed to
common sense and to all human experience.
We cannot shut our eyes to the practical result of legal recognition of
the asserted claims of appellants herein, for it leads to a legal implication to
the effect that any use of airspace above the surface owner of land, without
his consent would be a trespass either by the operator of an airplane or a radio
operator. We will not foist any such chimerical concept of property rights upon
the jurisprudence of this country.
We now consider the allegation of the bill that appellees’ airplanes, in
landing, glide through the air, within a distance of less than 100 feet to the
surface of appellants’ land, or possibly to a distance within five feet thereof,
at one end of his tract. This presents another question for discussion. Whether
such close proximity to appellants’ land may constitute an impairment of his
full enjoyment of the same is a question of fact. If it does, he may be entitled
to relief in a proper case.
Appellants are not entitled to injunctive relief upon the bill filed here,
because no facts are alleged with respect to circumstances of appellants’ use of
the premises which will enable this court to infer that any actual or substantial
damage will accrue from the acts of the appellees complained of.
The case differs from the usual case of enjoining a trespass. Ordinarily,
if a trespass is committed upon land, the plaintiff is entitled to at least nominal
damages without proving or alleging any actual damage. In the instant case,
traversing the airspace above appellants’ land is not, of itself, a trespass at all,
but it is a lawful act unless it is done under circumstances which will cause
injury to appellants’ possession.
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barely to miss the tops of the trees and at times so close to the tops of the trees
as to blow the old leaves off. The noise is startling. And at night the glare from
the planes brightly lights up the place. As a result of the noise, respondents
had to give up their chicken business. As many as six to ten of their chickens
were killed in one day by flying into the walls from fright. The total chickens
lost in that manner was about 150. Production also fell off. The result was
the destruction of the use of the property as a commercial chicken farm.
Respondents are frequently deprived of their sleep and the family has become
nervous and frightened. Although there have been no airplane accidents on
respondents’ property, there have been several accidents near the airport and
close to respondents’ place. These are the essential facts found by the Court
of Claims. On the basis of these facts, it found that respondents’ property had
depreciated in value. It held that the United States had taken an easement over
the property on June 1, 1942, and that the value of the property destroyed and
the easement taken was $2,000.
The United States relies on the Air Commerce Act of 1926, 44 Stat.
568, 49 U.S.C. 171 et seq., 49 U.S.C.A. 171 et seq., as amended by the Civil
Aeronautics Act of 1938, 52 Stat. 973, 49 U.S.C. 401 et seq., 49 U. S.C.A.
401 et seq. * * * It is, therefore, argued that since these flights were within
the minimum safe altitudes of flight which had been prescribed, they were an
exercise of the declared right of travel through the airspace. The United States
concludes that when flights are made within the navigable airspace without any
physical invasion of the property of the landowners, there has been no taking
of property. It says that at most there was merely incidental damage occurring
as a consequence of authorized air navigation. It also argues that the landowner
does not own super-adjacent airspace which he has not subjected to possession
by the erection of structures or other occupancy. Moreover, it is argued that
even if the United States took airspace owned by respondents, no compensable
damage was shown. Any damages are said to be merely consequential for
which no compensation may be obtained under the Fifth Amendment.
It is ancient doctrine that at common law ownership of the land extended
to the periphery of the universe — Cujus est solum ejus est usque ad coelum.
But that doctrine has no place in the modern world. The air is a public highway,
as Congress has declared. Were that not true, every transcontinental flight
would subject the operator to countless trespass suits. Common sense revolts
at the idea. To recognize such private claims to the airspace would clog these
highways, seriously interfere with their control and development in the public
interest, and transfer into private ownership that to which only the public has
a just claim.
But that general principle does not control the present case. For the
United States conceded on oral argument that if the flights over respondents’
162 PROPERTY
Appellants do not, therefore, in their bill state a case of trespass, unless
they allege a case of actual and substantial damage. The bill fails to do this. It
merely draws a naked conclusion as to damages without facts or circumstances
to support it. It follows that the complaint does not state a case for injunctive
relief. * * *
The decree of the District Court is affirmed.
MATHEWS, Circuit Judge, dissents.
UNITED STATES v. CAUSBY
Supreme Court of the United States, 1946.
328 U.S. 256, 66 S. Ct. 1062, 90 L. Ed. 1206
Mr. Justice DOUGLAS delivered the opinion of the Court.
This is a case of first impression. The problem presented is whether
respondents’ property was taken within the meaning of the Fifth Amendment
by frequent and regular flights of army and navy aircraft over respondents’
land at low altitudes. The Court of Claims held that there was a taking and
entered judgment for respondent, one judge dissenting. 60 F. Supp. 751. The
case is here on a petition for a writ of certiorari which we granted because of
the importance of the question presented.
Respondents own 2.8 acres near an airport outside of Greensboro, North
Carolina. It has on it a dwelling house, and also various outbuildings which
were mainly used for raising chickens. The end of the airport’s northwest-
southeast runway is 2,220 feet from respondents’ barn and 2,275 feet from
their house. The path of glide to this runway passes directly over the property
— which is 100 feet wide and 1,200 feet long. The 30 to 1 safe glide angle1
approved by the Civil Aeronautics Authority passes over this property at 83
feet, which is 67 feet above the house, 63 feet above the barn and 18 feet above
the highest tree. The use by the United States of this airport is pursuant to a
lease executed in May, 1942, for a term commencing June 1, 1942 and ending
June 30, 1942, with a provision for renewals until June 30, 1967, or six months
after the end of the national emergency, whichever is the earlier.
Various aircraft of the United States use this airport — bombers,
transports and fighters. The direction of the prevailing wind determines when
a particular runway is used. The north-west-southeast runway in question is
used about four per cent of the time in taking off and about seven per cent of
the time in landing. Since the United States began operations in May, 1942, its
four-motored heavy bombers, other planes of the heavier type, and its fighter
planes have frequently passed over respondents’ land buildings in considerable
numbers and rather close together. They come close enough at times to appear
164 PROPERTY
property rendered it uninhabitable, there would be a taking compensable under
the Fifth Amendment. * * * If, by reason of the frequency and altitude of the
flights, respondents could not use this land for any purpose, their loss would be
complete. It would be as complete as if the United States had entered upon the
surface of the land and taken exclusive possession of it.
We agree that in those circumstances there would be a taking. Though
it would be only an easement of flight which was taken, that easement, if
permanent and not merely temporary, normally would be the equivalent of a
fee interest. It would be a definite exercise of complete dominion and control
over the surface of the land. The fact that the planes never touched the surface
would be as irrelevant as the absence in this day of the feudal livery of seisin
on the transfer of real estate. The owner’s right to possess and exploit the land
— that is to say, his beneficial ownership of it — would be destroyed. It would
not be a case of incidental damages arising from a legalized nuisance such as
was involved in Richards v. Washington Terminal Co., 233 U.S. 546, 34 S. Ct.
654, L.R.A.1915A, 887. In that case property owners whose lands adjoined
a railroad line were denied recovery for damages resulting from the noise,
vibrations, smoke and the like, incidental to the operations of the trains. In the
supposed case the line of flight is over the land. And the land is appropriated as
directly and completely as if it were used for the runways themselves.
There is no material difference between the supposed case and the
present one, except that here enjoyment and use of the land are not completely
destroyed. But that does not seem to us to be controlling. The path of glide
for airplanes might reduce a valuable factory site to grazing land, an orchard
to a vegetable patch, a residential section to a wheat field. Some value would
remain. But the use of the airspace immediately above the land would limit the
utility of the land and cause a diminution in its value. * * *
The fact that the path of glide taken by the planes was that approved
by the Civil Aeronautics Authority does not change the result. The navigable
airspace which Congress has placed in the public domain is ‘airspace above
the minimum safe altitudes of flight prescribed by the Civil Aeronautics
Authority.’ 49 U.S.C. 180, 49 U.S.C.A. 180. If that agency prescribed 83 feet
as the minimum safe altitude, then we would have presented the question of
the validity of the regulation. But nothing of the sort has been done. The path
of glide governs the method of operating of landing or taking off. The altitude
required for that operation is not the minimum safe altitude of flight which is
the downward reach of the navigable airspace. The minimum prescribed by
the authority is 500 feet during the day and 1000 feet at night for air carriers
(Civil Air Regulations, Pt. 61, 61.7400, 61.7401, Code Fed. Reg. Cum. Supp.,
Tit. 14, ch. 1) and from 300 to 1000 feet for other aircraft depending on the
type of plane and the character of the terrain. Id., Pt. 60, 60.350-60.3505, Fed.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 165
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Reg. Cum. Supp., supra. Hence, the flights in question were not within the
navigable airspace which Congress placed within the public domain. If any
airspace needed for landing or taking off were included, flights which were so
close to the land as to render it uninhabitable would be immune. But the United
States concedes, as we have said, that in that event there would be a taking.
Thus, it is apparent that the path of glide is not the minimum safe altitude of
flight within the meaning of the statute. The Civil Aeronautics Authority has,
of course, the power to prescribe air traffic rules. But Congress has defined
navigable airspace only in terms of one of them — the minimum safe altitudes
of flight.
We have said that the airspace is a public highway. Yet it is obvious that
if the landowner is to have full enjoyment of the land, he must have exclusive
control of the immediate reaches of the enveloping atmosphere. Otherwise
buildings could not be erected, trees could not be planted, and even fences
could not be run. The principle is recognized when the law gives a remedy
in case overhanging structures are erected on adjoining land. The landowner
owns at least as much of the space above the ground as the can occupy or use in
connection with the land. See Hinman v. Pacific Air Transport, 9 Cir., 84 F.2d
755. The fact that he does not occupy it in a physical sense – by the erection of
buildings and the like — is not material. As we have said, the flight of airplanes,
which skim the surface but do not touch it, is as much an appropriation of the
use of the land as a more conventional entry upon it. We would not doubt that
if the United States erected an elevated railway over respondents’ land at the
precise altitude where its planes now fly, there would be a partial taking, even
though none of the supports of the structure rested on the land. The reason is
that there would be an intrusion so immediate and direct as to subtract from the
owner’s full enjoyment of the property and to limit his exploitation of it. While
the owner does not in any physical manner occupy that stratum of airspace or
make use of it in the conventional sense, he does use it in somewhat the same
sense that space left between buildings for the purpose of light and air is used.
The super-adjacent airspace at this low altitude is so close to the land that
continuous invasions of it affect the use of the surface of the land itself. We
think that the landowner, as an incident to his ownership, has a claim to it and
that invasions of it are in the same category as invasions of the surface. * * *
The airplane is part of the modern environment of life, and the
inconveniences which it causes are normally not compensable under the Fifth
Amendment. The airspace, apart from the immediate reaches above the land,
is part of the public domain. We need not determine at this time what those
precise limits are. Flights over private land are not a taking, unless they are
so low and so frequent as to be a direct and immediate interference with the
enjoyment and use of the land. We need not speculate on that phase of the
present case. For the findings of the Court of Claims plainly establish that
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Ownership in General
freedom of the air, and at the same time, satisfy the just claims of aggrieved
persons. The noise of newer, larger, and more powerful planes may grow
louder and louder and disturb people more and more. But the solution of the
problems precipitated by these technological advances and new ways of living
cannot come about through the application of rigid Constitutional restraints
formulated and enforced by the courts. What adjustments may have to be
made, only the future can reveal. It seems certain, however, the courts do not
possess the techniques or the personnel to consider and act upon the complex
combinations of factors entering into the problems. The contribution of courts
must be made through the awarding of damages for injuries suffered from the
flying of planes, or by the granting of injunctions to prohibit their flying. When
these two simple remedial devices are elevated to a Constitutional level under
the Fifth Amendment, as the Court today seems to have done, they can stand
as obstacles to better adapted techniques that might be offered by experienced
experts and accepted by Congress. Today’s opinion is, I fear, an opening
wedge for an unwarranted judicial interference with the power of Congress to
develop solutions for new and vital and national problems. In my opinion this
case should be reversed on the ground that there has been no ‘taking’ in the
Constitutional sense.
Mr. Justice BURTON joins in this dissent.
[39.3.2] Limitations Upon Landowner’s Right to Airspace
The landowner’s right over the airspace is limited by the follow-
ing:
(1) He is bound by height restrictions annotated on the certificate
of title if he acquired the property subject to such restrictions following
the principle that “contractual obligations between parties have the
force of law between them.”195
(2) For properties situated near the airport, their owners cannot
complain of the reasonable requirements of aerial navigation. They are
required to secure a height clearance permit from the Air Transportation
Office (ATO), which permit is a pre-requisite for the issuance of a
building permit. This permit allows the owner to construct the proposed
structure height approved by ATO. In addition, building officials of
local municipalities/provinces implement their own zoning ordinance,
195
Ayala Corporation v. Ray Burton Dev. Corp., G.R. No. 126699, Aug. 7, 1998; see also
Ayala Corporation v. Rosa Diana Realty and Development Corp., G.R. No. 134284, Dec. 1,
2000.
166 PROPERTY
there was a diminution in value of the property and that the frequent, low-level
flights were the direct and immediate cause. We agree with the Court of Claims
that a servitude has been imposed upon the land. * * *
The Court of Claims held, as we have noted, that an easement was taken.
But the findings of fact contain no precise description as to its nature. It is
not described in terms of frequency of flight, permissible altitude, or type of
airplane. Nor is there a finding as to whether the easement taken was temporary
or permanent. Yet an accurate description of the property taken is essential,
since that interest vests in the United States. United States v. Cress, supra., 243
U.S. 328, 329, 37 S.Ct. 385, 386, and cases cited. * * *
Since on this record it is not clear whether the easement taken is a
permanent or a temporary one, it would be premature for us to consider whether
the amount of the award made by the Court of Claims was proper.
The judgment is reversed and the cause is remanded to the Court of
Claims so that it may make the necessary findings in conformity with this
opinion.
Reversed.
Mr. Justice JACKSON took no part in the consideration or decision of
this case.
Mr. Justice BLACK, dissenting.
The Fifth Amendment provides that ‘private property’ shall not ‘be
taken for public use, without just compensation.’ The Court holds today that
the Government has ‘taken’ respondents’ property by repeatedly flying Army
bombers directly above respondents’ land at a height of eighty-three feet where
the light and noise from these planes caused respondents to lose sleep and their
chickens to be killed. Since the effect of the Court’s decision is to limit, by
the imposition of relatively absolute Constitutional barriers, possible future
adjustments through legislation and regulation which might become necessary
with the growth of air transportation, and since in my view the Constitution
does not contain such barriers, I dissent.
* * * It is inconceivable to me that the Constitution guarantees that the
airspace of this Nation needed for air navigation, is owned by the particular
persons who happen to own the land beneath to the same degree as they own
the surface below. 3 No rigid Constitutional rule, in my judgment, commands
that the air must be considered as marked off into separate compartments by
imaginary metes and bounds in order to synchronize air ownership with land
ownership. * * * Old concepts of private ownership of land should not be
introduced into the field of air regulation. I have no doubt that Congress will,
if not handicapped by judicial interpretations of the Constitution, preserve the
168 PROPERTY
and therefore, may require the property owners to apply for a Height
Clearance Permit if the proposed site of the building/structure is covered
by any restrictions.
(3) For properties far from the airport, they are subject to the
provisions of the National Building Code196 and local ordinances.
Chapter 2
RIGHT OF ACCESSION
GENERAL PROVISIONS
Art. 440. The ownership of property gives the right by accession
to everything which is produced thereby, or which is incorporated or at-
tached thereto, either naturally or artificially. (353)
§ 40. Accession
[40.1] Definition and Concept
The ownership of property gives the right by accession to
everything which is produced thereby, or which is incorporated or
attached thereto, either naturally or artificially.197 Accession, therefore,
is the right of an owner of a thing to the products of said thing as well as
to whatever is inseparably attached thereto as an accessory.198
From the provisions of Article 440, it is clear that “accession”
presupposes a previously existing ownership by the owner over the
principal, such that it is considered merely as an incident or an attribute
of ownership. It is not, therefore, a mode of acquiring ownership but
a right included in ownership. At any rate, Article 712 of the New
Civil Code which enumerates the seven modes of acquiring ownership
(occupation, intellectual creation, law, donation, succession, tradition
and prescription) does not consider “accession” as one of such modes.
In addition, the concept of accession is discussed by the Code only in
relation to the right of ownership.
196
R.A. No. 6541.
197
Art. 440, NCC.
198
Sanchez Roman, Vol. II, p. 89.
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Right of Accession General Provisions
[40.2] Kinds of Accession
Based from the provisions of Article 440, accession is classified
into two: (1) accesion discreta; and (2) accesion continua. The first part
of the article defines the concept of accesion discreta or the right of
the owner to anything which is produced by his property. The second
part of the article, on the other hand, defines the concept of accesion
continua or the right of the owner to anything which is incorporated or
attached to his property, whether such attachment is through natural or
artificial causes.
Accesion discreta is subdivided into: (1) natural fruits, (2)
industrial fruits, and (3) civil fruits. Accesion continua, in turn, may
refer to either immovable property or movable property.
With regard to immovable property, accesion continua is classified
into either industrial accession or natural accession depending on
the manner by which the attachment or incorporation takes place.
In industrial accession, the incorporation takes place artificially;
while natural accession takes place through natural means. Industrial
accession, in turn, may take the form of either building, planting
or sowing. Natural accession, on the other hand, has four forms: (1)
alluvion, (2) avulsion; (3) change of course of river; and (4) formation
of islands.
With respect to movable property, accesion continua may either
be: (1) adjunction or conjunction, (2) commixtion or confusion, and
(3) specification. Adjunction or conjunction, in turn, may take place
by: (1) inclusion (engraftment), (2) soldadura (attachment); (3) tejido
(weaving); (4) pintura (painting); or (5) escritura (writing).
Section 1. — Right of Accession with Respect to
What is Produced by Property
Art. 441. To the owner belongs:
(1) The natural fruits;
(2) The industrial fruits;
(3) The civil fruits. (354)
Art. 442. Natural fruits are the spontaneous products of the soil, and
the young and other products of animals.
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Right of Accession General Provisions
(b) in lease of rural lands
In lease of rural land, the lessee is entitled to the natural and
industrial fruits of the thing leased while the lessor is entitled to civil
fruits in the form of the rent paid by the lessee.200
(c) in antichresis
By the contract of antichresis the creditor acquires the right to
receive the fruits of an immovable of his debtor, with the obligation to
apply them to the payment of the interest, if owing, and thereafter to the
principal of his credit.201
(d) in possession in good faith
According to Article 544 of the New Civil Code, a possessor in
good faith is entitled to the fruits received by him before his possession
is legally interrupted.
(e) fruits naturally falling
According to Article 681 of the New Civil Code, fruits naturally
falling upon adjacent land belong to the owner of the said land and not
to the owner of the tree.
[41.3] Kinds of Fruits
In our Civil Code, fruits are classified into: (1) natural; (2)
industrial, and (3) civil. It has been held that the term natural, industrial
and civil fruits are highly technical, and are authoritatively defined in
Article 442 of the Civil Code so that, therefore, there can be no question
as to the meaning which should be given them when they occur in a
decree entered by the court.202
[41.3.1] Natural Fruits
There are two kinds of natural fruits,203 namely: (a) the spontaneous
products of the soil — those that appear without the intervention of
human labor, such as the wild fruits in the forest, herbs, and common
200
Arts. 1654, 1676, par. 2, NCC.
201
Art. 2123, Civil Code.
202
Pamintuan v. Garcia, 39 Phil. 746.
203
Art. 442, par. 1, NCC.
170 PROPERTY
Industrial fruits are those produced by lands of any kind through
cultivation or labor.
Civil fruits are the rents of buildings, the price of leases of lands
and other property and the amount of perpetual or life annuities or other
similar income. (355a)
Art. 443. He who receives the fruits has the obligation to pay the
expenses made by a third person in their production, gathering, and pres-
ervation. (356)
Art. 444. Only such as are manifest or born are considered as natu-
ral or industrial fruits.
With respect to animals, it is sufficient that they are in the womb of
the mother, although unborn. (357)
§ 41. Accesion Discreta
[41.1] Basic Rule
As defined, accesion discreta is the right of the owner to the
products of his property or to the fruits of the same. In our Civil Code, the
basic rule on accesion discreta is stated in Article 441, which provides
that “to the owner belongs: (1) the natural fruits, (2) the industrial fruits,
and (3) the civil fruits.”
[41.2] Exceptions to the Rule
The rule in Article 441 is not absolute inasmuch as there are
cases where the owner is not entitled to the fruits of his property. The
exceptions to the rule are the following:
(a) in usufruct
It is the essence of usufruct that the usufructuary199 is entitled not
only to the enjoyment of the property subject matter thereof but also to
its fruits. Thus, Article 566 of the New Civil Code provides:
“Art. 566. The usufructuary shall be entitled to all the
natural, industrial and civil fruits of the property in usufruct.
With respect to hidden treasure which may be found on the
land or tenement, he shall be considered a stranger.”
199
He is the person in whose favor the usufruct was constituted.
172 PROPERTY
grass; and (b) the young and other products of animals, such as milk,
hair, wool, horn, hide, eggs, and animals dung or manure.
With respect to the natural fruit of the first kind, it is required that
the same must be spontaneous product of the soil. In other words, it is
necessary that there must be no human labor which has intervened in its
generation. If human labor intervenes in the production of the fruit, the
same is classified as an industrial fruit.
Trees which grew spontaneously on the soil and adhering thereto
are not considered as natural fruits in contemplation of the first
paragraph of Article 442 because they are themselves immovables.
Trees may, however, be exceptionally considered as fruits if they are
being exploited for an industry.204 In such a case, they are classified as
industrial fruits because human labor intervenes.
With regard to the natural fruit of the second kind, there may be a
situation where the young or offspring is a product of animals belonging
to different owners. Note that our Civil Code is silent with respect to
the ownership of the young if the male and female parents belonged
to different owners. There is no problem if the mating of the parent-
animals is agreed upon by their respective owners and they provided for
the ownership of the offspring. In the absence of any agreement to settle
the ownership of the offspring, the rule is that “the young belongs to the
owner of the female parent.” This is the rule enunciated by the Supreme
Court in the early case of US v. Caballero205 in consonance with the
express provisions of the Partidas based on the maxim partus sequitur
ventrem — the offspring follows the condition of the mother.206
[41.3.2] Industrial Fruits
Industrial fruits are those produced by lands of any kind through
cultivation or labor.207 Hence, for a fruit to be classified as an industrial
fruit, it must satisfy two requirements: (1) it is produced by the land; and
(2) it is produced through cultivation or labor. Both the natural fruits of
the first kind and industrial fruits are products of the land. They differ,
however, in the manner of their coming into existence. The former is
204
3 Manresa, 6th ed., p. 191.
205
25 Phil. 356 (1913).
206
Bouvier’s Law Dict., 1934 ed., p. 784.
207
Art. 442, par. 2, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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produced naturally and spontaneously by the soil; while the latter is
produced through cultivation or through human labor. Examples of
industrial fruits are the coffee beans in a coffee plantation; mango fruits
in a mango plantation; palay, corn or sugar cane produced by farmers.
By express provisions of the law, it is required that industrial fruits,
like natural fruits of the first kind, must come from the soil. Therefore,
manufactured products such as clothes, jeans, watches and cell phones,
although produced through human labor, are not considered industrial
fruits.208
[41.3.3] Civil Fruits
Civil fruits, under the Civil Code, refers to “rents of building, the
price of leases of lands and other property and the amount of perpetual
or life annuity or other similar income.”209 Civil fruits, therefore, are the
income or revenues derived from the property itself. Hence, a dividend,
whether in the form of cash or stock, is considered as civil fruit because
it is declared out of the profits of a corporation and not out of the capital
stock.210 But a bonus which is paid to the owner of a piece of land for
undertaking the risk of securing with his property a loan given to a
sugar central is not civil fruits of the mortgaged property since it is not
income derived from the property itself but a compensation for the risk
assumed by the owner.211
[41.4] Existence of Fruits, When Recognized
When does the law recognize the existence of fruits? This question
is answered by the provisions of Article 444 of the New Civil Code.
With respect to natural and industrial fruits, only those “manifest”
or “born” are considered as such.212 In relation to the offspring or young
of animals, they are deemed existing at the beginning of the maximum
period of gestation, this being the surest criterion of their existence in
the mother’s womb.213 Hence, the offspring is already considered as a
natural fruit even during the time that it is inside the womb of its mother
208
3 Manresa, 6th ed., 191-192.
209
Art. 442, par. 3, NCC.
210
Bachrach v. Seifert, 87 Phil. 483; Orozco v. Araneta, 90 Phil. 399.
211
Bachrach Motor Co. v. Talisay-Silay Milling Co., 56 Phil. 117.
212
Art. 444, par. 1, NCC.
213
3 Manresa, 6th ed., 199, cited in II Caguioa, Civil Code, 1966 ed., 78.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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he received prior to the interruption of his good faith. On the other
hand, the possessor in bad faith is required to reimburse to the legitimate
possessor the fruits received by him and those which the legitimate
possessor could have received.218 Such being the case, the provisions of
Article 443 finds application in a case where the true owner recovers
possession of the property from a possessor in bad faith who is required
by law to return to the owner not only the fruits he already received but
also the fruits which the owner could have received. This is confirmed
by the provisions of Article 549 of the New Civil Code which states
that while the possessor in bad faith is obligated to reimburse the
fruits received by him and those which the legitimate possessor could
have received, he is, at the same time, entitled to recover the expenses
mentioned in Article 443.
[42.3] Article 443 Does Not Apply To Pending Fruits
As discussed above, Article 443 does not apply to a situation
where the fruits are still pending. In a situation where the fruits are
still pending (or ungathered) at the time the owner recovers possession
from a possessor in bad faith, it is the provisions of Article 449 of the
New Civil Code that will apply. Under the provisions of Article 449, the
planter or sower in bad faith on the land of another loses what is planted
or sown. Except for the necessary expenses incurred for the preservation
of the land,219 the planter or sower in bad faith is not entitled to recover
any indemnity, including the expenses mentioned in Article 443.
[42.4] When Refundable
In order for the production expenses to be refundable, such expenses
must have the following characteristics: (1) that they are dedicated to
the annual production and not merely for purposes of improvement;
(2) that they be not superfluous, excessive or for luxury but rather
that they be commensurate with that required by the products.220 If the
foregoing requisites are complied with, the same must be refunded
by the recipient of the fruits to the one who incurred it irrespective of
whether the amount of the expenses far exceed the value of the fruits.
This must be the rule because Article 443 does not make any distinction
218
Art. 549, NCC.
219
Art. 452, NCC.
220
3 Manresa, 6th ed., 196-197, cited in II Caguioa, Civil Code, 1966 ed., 76.
173 174 PROPERTY
so long as the latter’s pregnancy is already manifest or evident. In the
case of plants which produce only a single crop and then perish, they are
deemed manifest or existing from the time the seedlings appear on the
ground, without waiting for the grains to appear.214 As to plants and trees
that live for years and yield periodic fruits, the latter are not deemed
existing until they actually appear on the plants and trees.215
§ 42. Production Expenses
[42.1] Situation Contemplated in Article 443
Article 443 of the New Civil Code contemplates a situation where
the recipient of the fruits was not the same person who incurred the
expenses in connection with its production, gathering and preservation.
This may happen, for example, if the property was previously in the
possession of a possessor in bad faith and the latter incurred expenses in
connection with the production, gathering and preservation of the fruits
but subsequently the owner recovered possession of the property and
the possessor turned over to the owner such fruits he already gathered.
In such a situation, Article 443 provides that the recipient of the fruits
“has the obligation to pay the expenses made by a third person in their
production, gathering and preservation.” This rule is but proper in order
that no one may unjustly enrich himself at the expense of another.216
[42.2] Applicability of Article 443
Article 443 applies only when the fruits are already harvested and
gathered since the article refers to persons “who receives the fruits.”
Hence, the article does not apply to a situation where the fruits are still
pending. At the same time, the article refers to a recipient who did not
incur the expenses for the production, gathering and preservation of
the fruits. This may happen only if the property was previously in the
possession of a possessor bad in faith but not if the possessor was in
good faith. Under the Civil Code, a possessor in good faith is entitled to
the fruits received by him before his possession is legally interrupted.217
Hence, he cannot be compelled by the owner to return whatever fruits
214
Ibid.
215
Ibid.
216
3 Manresa, 6th ed., 196.
217
Art. 544, par. 1, NCC.
175 176 PROPERTY
and because if the owner himself had made the expenses he would have
spent the same amount.221
Section 2. — Right of Accession with Respect to
Immovable Property
Art. 445. Whatever is built, planted or sown on the land of another
and the improvements or repairs made thereon, belong to the owner of
the land, subject to the provisions of the following articles. (358)
Art. 446. All works, sowing, and planting are presumed made by the
owner and at his expense, unless the contrary is proved. (359)
§ 43. Accesion Continua
As defined, accesion continua is the right of the owner to anything
which is incorporated or attached to his property, whether the attachment
is by reason of natural or artificial causes.222
As discussed in supra § 40.2, with respect to immovable property,
accesion continua is classified into either industrial accession or
natural accession. In industrial accession, the incorporation is caused
by the act of man while natural accession takes place independently of
the act of man.
[43.1] Presupposes Absence of Agreement
Accesion continua involves the union of two or more things
belonging to different owners in such a manner that they cannot be
separated from each other or from one another without causing a
substantial injury to any of the things involved. The application of the
law on accesion continua presupposes, however, the absence of any
agreement, whether express or implied, between or among the owners
of the different things involved. If there is such agreement before the
attachment or incorporation, the situation shall be governed primarily
by the agreement of the parties and secondarily by the pertinent law
on the matter — not by the law on accesion continua. In other words,
the law on accesion continua applies only to situations where there is a
controversy as to who shall be entitled to the resulting union of two or
221
II Caguioa, Civil Code, 1966 ed., 76.
222
Art. 440, NCC.
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more things belonging to different owners. It is not so applicable where
there is no such controversy.
[43.2] Basic Principles Governing Accesion Continua
Accesion continua is based on the following basic principles:
(1) That the union or attachment or the incorporation of two or
more things belonging to different owners to each other or to one another
must be such that they cannot be separated from each other or from
one another without causing a substantial physical or juridical injury to
any one, to some, or to all of the things involved. If such separation is
possible without injury, their respective owners retain their ownership
without effects on the others.
This principle is shown, for example, in Article 447 of the New
Civil Code where the owner of the materials is allowed to demand
for the removal of his materials in case the same can be done without
injury to the work constructed or without the plantings, constructions or
works being destroyed. If separation is indeed possible without injury,
there is no accesion continua. Hence, the owner of the materials retains
ownership over his property.
(2) That the accessory follows the principal (“accessio cedit
principali”). This means that the owner of the principal thing has the
right to claim ownership of the accessory thing and not vice versa.
This principle is shown, for example, in the provisions of Article 466
the New Civil Code which states that the owner of the principal thing
acquires the accessory whenever two movable things belonging to
different owners are, without bad faith, united in such a way that they
form a single object.
(3) That no one shall unjustly enrich himself at the expense of
another. In Article 466, for example, even if the owner of the principal
thing can appropriate the accessory thing that has been attached or
incorporated to his property, he must, nonetheless, pay for its value if
no bad faith intervenes on the part of the owner of the accessory thing.
(4) That good faith exonerates a person from punitive liability
and damages. He who acts in good faith may be held responsible for
his act, but he should not be penalized. In Article 447 of the New Civil
Code, for example, if the owner of the land made use of the materials of
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Right of Accession General Provisions
even a chair or desk, it is improper to use the verb “edificar” to describe
the making of such partition, door, window, etc.226
(2) Planting and Sowing
Planting refers to trees, big or small, while sowing refers to crops
and plants caused by the scattering or strewing of seeds upon the soil.
The distinction between planting and sowing is material in applying
the second option available to the landowner in good faith under the
provisions of Article 448 of the New Civil Code. In Article 448, the
option of compelling the builder or the planter to pay the price of the
land is not available against the sower.
[44.2] Building, Planting or Sowing on One’s Own Land
Under the articles of the Civil Code on industrial accession by
edification on the principal land (Articles 445 to 456), such accession is
limited either to buildings erected on the land of another, or buildings
constructed by the owner of the land with materials owned by someone
else.227 Nowhere in these articles on industrial accession is there any
mention of the case of a landowner building on his own land with
materials owned by him.228 The reason for the omission is readily
apparent: recourse to the rules on accession is totally unnecessary and
inappropriate where the ownership of the land and of the materials used
to build thereon are concentrated on one and the same person.229 Even if
the law did not provide for accession, the landowner would necessarily
own the building, because he has paid for the materials and labor used
in constructing it.230 Thus, the Civil Code limits the cases of industrial
accession to those involving land and materials belonging to different
owners231 for in these cases a controversy arises as to the rights and
obligations of the parties to each other or to one another.
At any rate, in the absence of proof to the contrary, the law pre-
sumes that all works, sowing and planting are made by the owner and
226
Id., citing Lao Chit v. Security Bank & Trust Co., L-11028, April 17, 1959.
227
Gaboya v. Cui, 38 SCRA 85, 92 (1971).
228
Id.
229
Id.
230
Id.
231
Id.
177 178 PROPERTY
another in good faith, he can appropriate the materials upon payment of
its value but he is not liable to pay damages.
(5) That bad faith subjects a person to damages and other
unfavorable consequences. In Articles 449 and 451 of the New Civil
Code, for example, the builder in bad faith not only loses what he has
built without right to indemnity but is likewise liable to the owner of the
land for damages.
(6) That bad faith of one party neutralizes the bad faith of the
other and, therefore, both should be considered as having acted in good
faith. This principle is recognized for example in Article 453 of the
New Civil Code which states that “if there was bad faith not only on the
part of the person who built, planted or sowed on the land of another
but also on the part of the owner of such land, the rights of one and the
other shall be the same as though both had acted in good faith.”
A. INDUSTRIAL ACCESSION
§ 44. Industrial Accession
[44.1] Three Forms
Industrial accession may take the form of building, planting or
sowing.
(1) Building
The term building is a generic term for all architectural work
with roof, built for the purpose of being used as man’s dwelling, or
for offices, clubs, theaters, etc.223 The term, however, does not refer
to partitions, railings, counters, shelves and other fixtures made in
a building belonging to the owner of the land.224 This is because the
Spanish text of the provision uses the word “edificar” which means
to undertake the construction of an edifice such as a house, stable or
similar structure.225 While one may build a partition, door, window or
223
II Tolentino, Civil Code, 107, cited in Songcuya v. Mr. & Mrs. Lim, CA-G.R. No. 57357,
Aug. 31, 2006.
224
225
II Caguioa, Civil Code, 1966 ed., 83.
Id.
179 180 PROPERTY
at his expense.232 Hence, the burden of proving that the works, sowing
and planting are not made by the landowner at his expense is incumbent
upon those who are alleging such fact. Hence, as a rule, “whatever is
built, planted or sown on the land of another and the improvements or
repairs made thereon, belonged to the owner of the land.”233 This rule,
however, is subject to the provisions of Articles 448 up to 456 upon
presentation of proof that the works, sowing or planting is not made by
the owner of the land nor made at his expense.
[44.3] Controversial Cases
In general, there are three possible persons involved in industrial
accession: (1) the landowner; (2) the builder, planter or sower; and (3)
the owner of the materials. As discussed in supra § 44.2, if these three
persons are merged into one, such that the landowner is at the same time
the builder, planter or sower with materials belonging to him, there is
no controversy since it is clear that whatever has been built, planted or
sown belonged to him. A controversy will arise only if the landowner is
not the builder, planter or sower nor the owner of the materials. Hence,
there are three possible controversial situations in industrial accession:
(1) When the landowner builds, plants or sows on his land but
using materials belonging to another;
(2) When a person builds, plants or sows on another’s land but
he made use of materials belonging to him; and
(3) When a person builds, plants or sows on another’s land but
he made use of materials belonging to another.
Art. 447. The owner of the land who makes thereon, personally or
through another, plantings, constructions or works with the materials of
another, shall pay their value; and, if he acted in bad faith, he shall also
be obliged to the reparation of damages. The owner of the materials shall
have the right to remove them only in case he can do so without injury to
the work constructed, or without the plantings, constructions or works
being destroyed. However, if the landowner acted in bad faith, the owner
of the materials may remove them in any event, with a right to be indemni-
fied for damages. (360a)
232
Art. 446, NCC.
233
Art. 445, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 181
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Right of Accession General Provisions
§ 45. Using Materials Belonging To Another
[45.1] Situation Contemplated in Article 447
Article 447 of the New Civil Code contemplates a situation where
the landowner, either personally or through the instrumentality of an
agent, makes plantings, constructions or works on his own land but he
made use of materials belonging to another person. In such a situation,
the following questions may arise: (1) Who can claim the ownership
of what has been built, planted or sown? (2) What are the rights and
obligations of the landowner and the owner of the materials as against
each other? These and other questions are addressed by the provisions
of Article 447.
[45.2] Determining the Legal Consequences
The legal effects of the situation contemplated in Article 447 shall
depend on the good faith or bad faith of the landowner in making use
of the materials belonging to a third person. Note that in this article, the
law presumes that the owner of the materials is in good faith because
the rights of the parties when the owner of the materials is in bad faith
are determined by the provisions of Article 455 of the Civil Code.
While Article 455 refers to a situation of building, planting or sowing
on another’s land with the materials belonging to another person,
there is no reason why the effects of the presence of good faith or bad
faith on the part of the owner of the materials should not be applied
to the situation contemplated in Article 447. Hence, if Article 447 is
interpreted in conjunction with the provisions of Article 455, we will
have the following possible scenarios:
(1) Both the landowner and the owner of the materials acted in
good faith;
(2) Both of them acted in bad faith;
(3) The owner of the materials acted in good faith while the
landowner acted in bad faith; and
(4) The owner of the materials acted in bad faith while the
landowner acted in good faith.
[45.2.1] Both Acted In Good Faith
As stated earlier, Article 447 presumes that the owner of the
materials is in good faith. Hence, where both the landowner and the
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 183
OWNERSHIP
Right of Accession General Provisions
[45.2.2] Both Acted In Bad Faith
Following the principle that the bad faith of one party is neutralized
by the bad faith of the other and, therefore, both should be considered as
having acted in good faith, the legal effects discussed in supra § 45.2.1
shall likewise apply in the present situation.
But what constitutes good faith or bad faith on the part of the
landowner and the owner of the materials in the situation contemplated
in Article 447? The landowner is considered to have acted in good faith
if he honestly believed that the materials were his at the time that he
made use of them. If he was aware that he had no right to make use
of the materials at the time that he made use of them, he is considered
to have acted in bad faith. On the part of the owner of the materials,
he is considered to have acted in good faith if he was not aware that
his materials were being used by the landowner at the time of the
construction, planting or work. He came to know of it only after the
materials have already been used by the landowner. If he knew at the
time of the construction, planting or work that his materials were being
used by another but he did not object thereto, he is considered to have
acted in bad faith.
[45.2.3] Landowner In Bad Faith; Owner of the Materials
In Good Faith
Again, this situation is governed by the provisions of Article 447.
Applying the provisions of Article 447 and the principles governing
accesion continua, the following are the legal effects of a situation
where the landowner acted in bad faith while the owner of the materials
was in good faith:
[i] Being in bad faith, the landowner is liable to the owner of the
materials for damages.235
[ii] Having acted in bad faith, the landowner shall also suffer
the other unfavorable consequences of his act, such that the law grants
the owner of the materials the options of either: (1) demanding for the
value of the materials, with a right to be indemnified for damages; or
(2) demanding for the removal of the materials “in any event” — even
235
Art. 447, NCC.
182 PROPERTY
owner of the materials acted in good faith, the legal effects of such
a situation are determined by the provisions of Article 447. Applying
the provisions of Article 447 and the principles governing accesion
continua, the following are the legal effects of a situation where both
parties acted in good faith:
[i] Since the one responsible for the attachment or incorporation
(the landowner) acted in good faith, he is exonerated from punitive
liability and damages.
[ii] Being the owner of the principal (the land) and following the
principle of accesio cedit principali, the land owner is given the right to
appropriate what has been built, planted or sown but with the obligation
to indemnify the owner for the value of the materials234 following the
principle that no person should unjustly enrich himself at the expense
of another.
Instead of appropriating the materials, can the landowner choose
to return the same to its owner? Article 447 grants the right to demand
for the removal and return of the materials only to the owner of the
materials if such removal can be done without injury to the work
constructed or without the plantings, constructions or works being
destroyed. Notwithstanding the fact that the same right is not expressly
granted to the landowner, it is believed, however, that the landowner
may likewise choose to return the materials to its owner if removal is
possible without causing injury to the work constructed or without the
plantings, constructions or works being destroyed. In such a situation,
there is really no accesion continua. As discussed in supra § 43.2, there
is accesion continua only if the union or attachment or the incorporation
of two or more things belonging to different owners to each other or
to one another is in such a way that they cannot be separated from
each other or from one another without causing substantial physical
or juridical injury to any one, to some, or to all of the things involved.
There being no accession, the provision of Article 447 limiting the
option of the landowner to the payment of the value of the materials
does not apply. On the contrary, there being no accession, the owners
of the things attached or joined retain ownership over their respective
properties.
234
Art. 447, NCC.
184 PROPERTY
if it will cause injury to the land or to the materials — with a right to be
indemnified for damages.236
[iii] The foregoing is without prejudice to the criminal liability
of the landowner for the unlawful taking and use of the materials of
another without the latter’s knowledge and consent.
[45.2.4] Landowner In Good Faith; Owner of the Materials
In Bad Faith
This situation is not governed by Article 447 since the latter article
presumes that the owner of the materials is in good faith. Instead, what
applies, by analogy, are the provisions of Articles 455 and 449 to the
effect that the owner of the materials who acted in bad faith loses his
materials without any right whatsoever and is furthermore liable to the
landowner for damages.
Pacific Farms, Inc. v. Esguerra
30 SCRA 684 (1969)
From 1956 to 1957, Carried Lumber Company sold and delivered lumber
and construction materials to the Insular Farms, Inc. which the latter used in
the construction of six buildings at its compound in Bolinao, Pangasinan.
For failure of Insular Farms to pay the full purchase price, Carried Lumber
instituted in October 1958 a civil case against Insular Farms for the recovery
of the unpaid balance. In 1961, the trial court rendered judgment in favor of
Carried Lumber. Insular Farms did not appeal. In 1962, Carried Lumber levied
upon six buildings in Bolinao, Pangasinan. At this point, Pacific Farms, Inc.
filed a third-party claim, asserting ownership over the levied buildings which
it had allegedly acquired from Insular Farms by virtue of a deed of absolute
sale executed sometime in March 1958. The sheriff proceeded, however, with
the public auction and eventually sold the buildings to Carried Lumber as the
highest bidder. Thereafter, Pacific Farms filed a complaint against Carried
Lumber and the sheriff for the nullification of the auction and for damages. The
trial court, after trial, rendered judgment annulling the levy and the certificate
of sale. Carried Lumber appealed from said judgment alleging, inter alia,
that there exists a materialman’s lien over the six buildings in its favor. In
resolving the controversy, the Supreme Court opted not to rule on the issue of
the materialman’s lien but applied by analogy the rules of accession, thus —
236
Art. 447, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 185
OWNERSHIP
Right of Accession General Provisions
Article 447 of the Civil Code provides:
“The owner of the land who makes thereon personally or
through another, plantings, constructions or works with the materi-
als of another, shall pay their value; and, if he acted in bad faith,
he shall also be obliged to the reparation of damages. The owner
of the materials shall have the right to remove them only in case
he can do so without injury to the work constructed, or without
the plantings, constructions or works being destroyed. However, if
the landowner acted in bad faith, the owner of the materials may
remove them in any event with a right to be indemnified for dam-
ages.”
The above-quoted legal provision contemplates a principal
and an accessory, the land being considered the principal, and the
plantings, constructions or works, the accessory. The owner of the
land who in good faith whether personally or through another —
makes constructions or works thereon, using materials belonging
to somebody else, becomes the owner of the said materials with
the obligation however of paying for their value. The owner of the
materials, on the other hand, is entitled to remove them, provided
no substantial injury is caused to the landowner. Otherwise, he has
the right to reimbursement for the value of his materials.
Although it does not appear from the records of this case that
the land upon which the six buildings were built is owned by the
appellee, nevertheless, that the appellee claims that it owns the six
buildings constructed out of the lumber and construction materials
furnished by the appellant, is indubitable. Therefore, applying
Article 447 by analogy, we perforce consider the buildings as the
principal and the lumber and construction materials that went into
their construction as the accessory. Thus the appellee, if it does
own the six buildings, must bear the obligation to pay for the value
of the said materials; the appellant — which apparently has no
desire to remove the materials, and, even if it were minded to do so,
cannot remove them without necessarily damaging the bui1dings
— has the corresponding right to recover the value of the unpaid
lumber and construction materials.
Well-established in jurisprudence is the rule that compensation
should be borne by the person who has been benefited by the
accession. No doubt, the appellee benefited from the accession,
i.e., from the lumber and materials that went into the construction
of the six buildings. It should therefore shoulder the compensation
due to the appellant as unpaid furnisher of materials.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 187
OWNERSHIP
Right of Accession General Provisions
§ 46. Building With One’s Own Materials on the Land of Another
Articles 448 up to 454 of the New Civil Code contemplate a
situation where a person built, planted or sown on the land of another
but he made use of materials belonging to him. This is the second of the
controversial cases mentioned in supra § 44.3. In this situation, there are
actually two persons involved: (1) the landowner; and (2) the builder,
planter or sower (who is at the same time the owner of the materials). In
determining the legal effects of this situation, it is necessary to take into
consideration the good faith or bad faith of both parties. Such being the
case, there are four possible scenarios:
(1) Both the landowner and the builder, planter or sower (who
is at the same time the owner of the materials) acted in good
faith;
(2) Both of them acted in bad faith;
(3) The landowner acted in good faith while the builder, planter
or sower (who is at the same time the owner of the materials)
acted in bad faith; and
(4) The landowner acted in bad faith while the builder, planter
or sower (who is at the same time the owner of the materials)
acted in good faith.
§ 47. Both Acted In Good Faith
[47.1] Concept of Good Faith
[47.1.1] Good Faith of the Builder, Planter or Sower
Article 448 of the New Civil Code governs the situation where
both the landowner and the builder, planter or sower (who is at the
same time the owner of the materials) acted in good faith. However, this
article applies only when the builder, planter or sower believes he had
the right so to build, plant or sow because he thinks he owns the land
or believes himself to have a claim of title.237 To be deemed a builder
in good faith, it is essential that a person asserts title to the land on
which he builds, i.e., it is essential that he be a possessor in concept of
237
Floreza v. Evangelista, 96 SCRA 130, 136 (1980); citing Alburo v. Villanueva, 7 Phil.
277 (1907); Quemuel v. Olaes, 1 SCRA 1159 (1961); Racaza v. Susana Realty, Inc., 18 SCRA
1172 (1966).
186 PROPERTY
Of course, the character of a buyer in good faith and for
value, if really possessed by the appellee, could possibly exonerate
it from making compensation.
But the appellee’s stance that it is an innocent purchaser for
value and in good faith is open to grave doubt because of certain
facts of substantial import (evident from the records) that cannot
escape notice.
Art. 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate as his
own the works, sowing or planting, after payment of the indemnity pro-
vided for in Articles 546 and 548, or to oblige the one who built or planted
to pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its
value is considerably more than that of the building or trees. In such case,
he shall pay reasonable rent, if the owner of the land does not choose to
appropriate the building or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof. (361a)
Art. 449. He who builds, plants or sows in bad faith on the land of
another, loses what is built, planted or sown without right to indemnity.
(362)
Art. 450. The owner of the land on which anything has been built,
planted or sown in bad faith may demand the demolition of the work,
or that the planting or sowing be removed, in order to replace things in
their former condition at the expense of the person who built, planted or
sowed; or he may compel the builder or planter to pay the price of the
land, and the sower the proper rent. (363a)
Art. 451. In the cases of the two preceding articles, the landowner is
entitled to damages from the builder, planter or sower. (n)
Art. 452. The builder, planter or sower in bad faith is entitled to reim-
bursement for the necessary expenses of preservation of the land. (n)
Art. 453. If there was bad faith, not only on the part of the person
who built, planted or sowed on the land of another, but also on the part of
the owner of such land, the rights of one and the other shall be the same
as though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner
whenever the act was done with his knowledge and without opposition
on his part. (364a)
Art. 454. When the landowner acted in bad faith and the builder,
planter or sower proceeded in good faith, the provisions of Article 447
shall apply. (n)
188 PROPERTY
owner and that he be unaware that there exists in his title or mode of
acquisition any flaw which invalidates it.238
However, as already previously intimated, the concept of builder
in good faith or bad faith presupposes ownership in another.239 If a
person builds on his own land with his own materials, he is not merely
a builder in good faith — he is a builder-owner.
Pershing Tan Queto v. CA
148 SCRA 54 (1987)
In this case, a parcel of land was acquired by the spouses Juan and
Restituta Pombuena from the latter’s mother through onerous title (sale).
Thereafter, Juan filed for himself and his co-owner Restituta an application for
a Torrens title over the land. Subsequently, a decision was promulgated in the
cadastral proceedings pronouncing Juan (married to Restituta) as the owner of
the land. Some years after, a contract of lease over the land was entered into
between Pershing Tan Queto and Restituta (with the consent of Juan) for a
period of ten years. After the expiration of the lease, Juan and Restituta sued
Pershing for unlawful detainer. In the meantime, an Original Certificate of
Title was issued in the name of Juan (married to Restituta) as a consequence
of the cadastral case. During the pendency of the ejectment case, Juan entered
into a barter agreement with Pershing whereby the latter became the owner
of the leased premises, and the spouses Juan and Restituta in turn became the
owners of a parcel of land with improvements previously owned by Pershing.
Subsequently, Pershing constructed a concrete building on the property
previously owned by Juan and Restituta. The construction of the building was
without any objection on the part of Restituta. Later, however, Restituta sued
both Juan and Pershing for reconveyance of title over the disputed land, for the
annulment of the barter, and for recovery of the land with damages. One of the
issues that crop up in the case was whether Pershing is a builder in good faith
or in bad faith. The Supreme Court ruled that he is neither a builder in good
faith nor a builder in bad faith. The Court explained —
“(2) Was Tan Queto a possessor and builder in good faith or
in bad faith?
Even assuming that despite registration of the lot as conjugal,
Tan Queto nursed the belief that the lot was actually RESTlTUTA’s
(making him in bad faith), still RESTITUTA’s failure to prohibit
238
Mercado v. CA, 162 SCRA 75, 85 (1988); cited in Manotok Realty, Inc. v. Tecson, 164
SCRA 587, 592 (1988).
239
Pershing Tan Queto v. CA, 148 SCRA 54 (1987).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 189
OWNERSHIP
Right of Accession General Provisions
him from building despite her knowledge that construction was
actually being done, makes her also in bad faith. The net resultant
of mutual bad faith would entitle TAN QUETO to the rights of a
builder in good faith (Art. 448, Civil Code), ergo, reimbursement
should be given him if RESTITUTA decides to appropriate the
building for herself (Art. 448, Civil Code).
However, as already previously intimated, TAN QUETO
having bartered his own lot and small house with the questioned
lot with JUAN (who has been adverted to by a court decision and
by the OCT a conjugal owner) may be said to be the OWNER-
POSSESSOR of the lot. Certainly he is not merely a possessor
or builder in good faith (this phrase presupposes ownership in
another); much less is he a builder in bad faith. He is a builder-
possessor (jus possidendi) because he is the OWNER himself.
Please note that the Chapter on Possession (jus possessionis,
not jus possidendi) in the Civil Code refers to a possessor other
than the owner. Please note further that the difference between a
builder (or possessor) in good faith and one in bad faith is that
the former is NOT AWARE of the defect or flaw in his title or
mode of acquisition while the latter is AWARE of such defect or
flaw (Art. 526, Civil Code). But in either case there is a flaw or
defect. In the case of TAN QUETO there is no such flaw or defect
because it is he himself (not somebody else) who is the owner of
the property.”
Pleasantville Development Corporation v. CA
253 SCRA 10 (1996)
In this case, Edith Robillo purchased from Pleasantville Development
Corp. (PDC) a parcel of land designated as Lot 9, Phase II in Pleasantville
Subdivision, Bacolod City. In 1975, Eldred Jardinico bought the rights to the
lot from Robillo. At that time, lot 9 was vacant. Upon completing payments,
Jardinico secured from the Register of Deeds in 1978 title in his name. It
was then that he discovered that improvements had been introduced on lot
9 by Wilson Kee, who had taken possession thereof. It appears that in 1974,
Kee bought on installment lot 8 of the same subdivision from C.T. Toress
Enterprises, Inc. (CTTEI), the exclusive real estate agent of PDC. CCTEI
through its employee, accompanied Kee’s wife to inspect lot 8. Unfortunately,
the parcel of land pointed by CCTEI’s employee was lot 9. Thereafter, Kee
proceeded to construct his residence, a store, an auto repair shop and other
improvements on the lot. Is Kee a builder in good faith? The Supreme Court
answered in the affirmative. The Court held —
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 191
OWNERSHIP
Right of Accession General Provisions
[47.1.2] A Lessee Is Not A Builder In Good Faith
Article 448 applies only to a case where one builds on land in the
belief that he is the owner thereof and it does not apply where one’s
only interest in the land is that of a lessee under a rental contract.240 As
ruled by the Court in Lopez, Inc. v. Phil. and Eastern Trading Co.,241
the principle of possessor in good faith refers only to a party who
occupies or possess property in the belief that he is the owner thereof
and said good faith ends only when he discovers a flaw in his title so
as to reasonably advise or inform him that after all he may not be the
legal owner of said property. It cannot apply to a lessee because as
such lessee he knows that he is not the owner of the leased premises.
Neither can he deny the ownership or title of his lessor. A lessee who
introduces improvements in the leased premises, does so at his own risk
in the sense that he cannot recover their value from the lessor, much less
retain the premises until such reimbursement.242
In a plethora of cases,243 the Supreme Court has held that Article
448 of the New Civil Code, in relation to Article 546 of the same Code,
which allows full reimbursement of useful improvements and retention
of the premises until reimbursement is made, applies only to a possessor
in good faith, i.e., one who builds on land with the belief that he is the
owner thereof. It does not apply where one’s only interest is that of
a lessee under a rental contract; otherwise, it would always be in the
power of the tenant to “improve” his landlord out of his property.244
The law applicable to the lessee who introduced improvement
on the leased premises is Article 1678 of the New Civil Code, which
provides:
“Art. 1678. If the lessee makes, in good faith, useful
improvements which are suitable to the use for which the
lease is intended, without altering the form or substance
240
Bulacanag v. Francisco, 122 SCRA 498, 502 (1983).
241
98 Phil. 348.
242
Bulacanag v. Francisco, supra.
243
Alburo v. Villanueva, 7 Phil. 277, 280 (1907) (referring to the provisions of the Old Civil
Code); Racaza v. Susana Realty, Inc., supra note 17, at 1177-1178; Bulacanag v. Francisco, Ibid.;
Gabrito v. Court of Appeals, 167 SCRA 771, 778-779 (1988); Cabangis v. Court of Appeals, 200
SCRA 414, 419-421 (1991); Heirs of the late Jaime Binuya v. Court of Appeals, 211 SCRA 761,
766 (1992).
244
Geminiano v. CA, 259 SCRA 344 (1996).
190 PROPERTY
“Good faith consists in the belief of the builder that the land
he is building on is his and his ignorance of any defect or flaw in
his title. And as good faith is presumed, petitioner has the burden
of proving bad faith on the part of Kee.
At that time he built improvements on lot 8, Kee believed
that said lot was what he bought from petitioner. He was not aware
that the lot delivered to him was not lot 8. Thus, Kee’s good faith.
Petitioner failed to prove otherwise.”
Baltazar v. Caridad
17 SCRA 460 (1966)
In this case, the trial court rendered a decision in a cadastral proceeding
awarding Lot No. 8864 to spouses Julio Baltazar and Constancia Valencia
as their conjugal partnership property. Said decision having become final,
the corresponding decree was issued on July 12, 1941, and pursuant thereto,
said lot was registered in the names of the applicant spouses under Original
Certificate of Title No. O-1445. In the meanwhile, Julio Baltazar died. In 1961,
his surviving wife and children filed a motion in the cadastral case for writ
of possession against Silvina Caridad and her daughter, Eduarda Caridad,
who had been in possession of the southern portion of Lot No. 8864 since
1939, while the cadastral case involving the lot was pending before the trial
court, and before the decision and the corresponding decree issued in 1941.
The Caridads refused to remove their houses from the southern portion of Lot
No. 8864 insisting that they are builders in good faith and, as such, they are
accorded rights under article 448 of the new Civil Code. The houses were built
in 1958 and 1959. In debunking the contention of the Caridads’, the Court
explained —
“Appellants can not be regarded as builders in good faith
because they are bound by the 1941 decree of registration that
obligated their parents and predecessors-in-interest. Good faith
must rest on a colorable right in the builder, beyond a mere
stubborn belief in one’s title despite judicial adjudication. The
fact that in 1959 appellants demolished and replaced their old house
with new and bigger ones cannot enervate the rights of the registered
owners. Otherwise, the rights of the latter to enjoy full possession
of their registered property could be indefinitely defeated by an
unsuccessful opponent through the simple subterfuge of replacing
his old house with a new one from time to time.”
192 PROPERTY
of the property leased, the lessor upon the termination
of the lease shall pay the lessee one-half of the value of
the improvements at that time. Should the lessor refuse
to reimburse said amount, the lessee may remove the
improvements, even though the principal thing may suffer
damage thereby. He shall not, however, cause any more
impairment upon the property leased than is necessary.
With regard to ornamental expenses, the lessee shall
not be entitled to any reimbursement, but he may remove
the ornamental objects, provided no damage is caused to the
principal thing, and the lessor does not choose to retain them
by paying their value at the time the lease is extinguished.”
This article gives the lessor the option to appropriate the useful
improvements by paying one-half of their value, and the lessee
cannot compel the lessor to appropriate the improvements and make
reimbursement, for the lessee’s right under the law is to remove the
improvements even if the leased premises may suffer damage thereby.
But he shall not cause any more damage upon the property than is
necessary.245 A lessee, in order to be entitled to one half the value of the
improvements introduced by him in the leased premises, or to remove
them should the lessor refuse to reimburse the half value thereof, must
show that the same were introduced in good faith; are useful; suitable
to the use for which the lease is intended without altering the form and
substance of the premises.246
Geminiano v. Court of Appeals
259 SCRA 344 (1996)
In this case, Lot No. 3765-B-1 was originally owned by the petitioners’
mother, Paulina Geminiano. On a portion of the said lot stood the petitioners’
unfinished bungalow which they sold in 1978 to Dominador and May Nicolas.
Subsequently, the petitioners’ mother subsequently executed a contract of lease
over a 126 square meter portion of the lot, including that portion on which the
house stood, in favor of Dominador and Mary Nicolas (private respondents)
for a period of seven years commencing on November 15, 1978. The Nicolases
then introduced additional improvements and registered the house in their
245
Ibid.
246
Imperial Insurance, Inc. v. Simon, 14 SCRA 855.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 193
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Right of Accession General Provisions
names. After the expiration of the lease in 1985, the petitioners’ mother refused
to accept the monthly rentals. It turned out that the lot in question was the
subject of a suit, which resulted in its acquisition by one Maria Lee in 1972.
In 1982, Lee sold the lot to Lily Salcedo, who in turn sold it in 1984 to the
spouses Agustin and Ester Dionisio. In 1992, the Dionisio spouses executed a
Deed of Quitclaim over the said property in favor of the petitioners. As such,
the lot was registered in the latter’s names. In 1993, the petitioners filed an
ejectment case against Mary Nicolas. The issue in this case is whether the
lessees were builders in good faith and entitled to reimbursement of the value
of the houses and improvements. The Supreme Court ruled in the negative. The
Court explained —
Being mere lessees, the private respondents knew that their
occupation of the premises would continue only for the life of the
lease. Plainly, they cannot be considered as possessors nor builders
in good faith.
In a plethora of cases (Alburo v. Villanueva, 7 Phil. 277, 280
[1907] referring to the provisions of the Old Civil Code; Racaza
v. Susana Realty, Inc., supra., note 17, at 1177-1178; Bulacanag
v. Francisco, 122 SCRA 498, 502 [1983]; Gabrito v. Court of
Appeals, 167 SCRA 771, 778 779 [1988]; Cabangis v. Court of
Appeals, 200 SCRA 414, 419-421 [1991]; Heirs of the late Jaime
Binuya v. Court of Appeals, 211 SCRA 761, 766 [1992]), this Court
has held that Article 448 of the Civil Code, in relation to Article
546 of the same Code, which allows full reimbursement of useful
improvements and retention of the premises until reimbursement
is made, applies only to a possessor in good faith, i.e., one who
builds on land with the belief that he is the owner thereof. It does
not apply where one’s only interest is that of a lessee under a rental
contract; otherwise, it would always be in the power of the tenant
to “improve” his landlord out of his property.
Anent the alleged promise of the petitioners to sell the lot
occupied by the private respondents’ house, the same was not
substantiated by convincing evidence. Neither the deed of sale over
the house nor the contract of lease contained an option in favor of
the respondent spouses to purchase the said lot. And even if the
petitioners indeed promised to sell, it would not make the private
respondents possessors or builders in good faith so as to be covered
by the provisions of Article 448 of the Civil Code. The latter cannot
raise the mere expectancy of ownership of the aforementioned
lot because the alleged promise to sell was not fulfilled nor its
existence even proven. The first thing that the private respondents
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 195
OWNERSHIP
Right of Accession General Provisions
the premises because it was already owned by Ong Lee. The spouses instituted
a civil case against Ong Lee for cancellation of sale and damages. Ong Lee,
on the other hand, filed a complaint for unlawful detainer. May the spouses be
considered as a builder in good faith pursuant to Article 448 of the Civil Code?
The Supreme Court said no. The Court explained —
In the event that their first assigned error is not resolved
in their favor, the petitioner spouses assert that their right to be
indemnified for the improvements they introduced should be based
on Article 448 of the Civil Code which provides that:
“Art. 448. The owner of the land on which
anything has been built, sown or planted in good
faith, shall have the right to appropriate as his own
the works, sowing or planting, after payment of the
indemnity provided for in Articles 546 and 548, or to
oblige the one who built or planted to pay the price
of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to
buy the land if its value is considerably more than
that of the building or trees. In such case, he shall
pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of
the lease and in case of disagreements the courts shall
fix the terms thereof.”
Article 546 of the Civil Code provides that builders in
good faith are entitled to reimbursement for necessary and useful
expenses, with right of retention in both cases. The petitioners insist
that they should be treated as builders in good faith inasmuch as
they stepped into the shoes of Victor Facundo, the former owner-
mortgagor, when the latter assigned to them the obligation to pay
the bank the balance due on the mortgage. Since then, they occupied
the subject property and introduced improvements thereon. They
contend that they were not lessees and paid no rentals thereon.
We do not think so.
Article 528 of the Civil Code provides that possession in
good faith continues to subsist until facts exist which show that the
possessor is already aware that he wrongfully possesses the thing.
Although, in the beginning, the petitioners were made to believe
that they had a claim of title over the said property by assuming
the mortgage and possessing the subject property, all this changed
194 PROPERTY
should have done was to reduce the alleged promise into writing,
because under Article 1403 of the Civil Code, an agreement for the
sale of real property or an interest therein is unenforceable, unless
some note or memorandum thereof be produced. Not having taken
any steps in order that the alleged promise to sell may be enforced,
the private respondents cannot bank on that promise and profess
any claim nor color of title over the lot in question.
There is no need to apply by analogy the provisions of Article
448 on indemnity as was done in Pecson v. Court of Appeals (244
SCRA 407 [1995]), because the situation sought to be avoided and
which would justify the application of that provision, is not present
in this case. Suffice it to say, “a state of forced co-ownership” would
not be created between the petitioners and the private respondents.
For, as correctly pointed out by the petitioners, the rights of the
private respondents as lessees are governed by Article 1678 of the
Civil Code which allows reimbursement to the extent of one-half
of the value of the useful improvements.
It must be stressed, however, that the right to indemnity
under Article 1678 of the Civil Code arises only if the lessor opts
to appropriate the improvements. Since the petitioners refused to
exercise that option, the private respondents cannot compel them
to reimburse the one-half value of the house and improvements.
Neither can they retain the premises until reimbursement is
made. The private respondents’ sole right then is to remove the
improvements without causing any more impairment upon the
property leased than is necessary.
Sps. Lacap v. Ong Lee
G.R. No. 142131, December 11, 2002
In this case, a certain Facundo mortgaged two parcels of land to Monte
de Piedad Savings Bank. In 1981, the spouses Lacap assumed to pay Facundo’s
mortgage obligation to the bank. Due to their failure to pay their obligation to
the bank, the latter foreclosed on the mortgage. During the auction sale, the
bank emerged as the highest bidder and title passed on to it. The bank, however,
allowed the spouses to stay in the premises as lessees paying a monthly rental.
The spouses thereafter introduced improvements thereon after relying on the
bank’s assurance that the property would be sold back to them. In 1996, when
the spouses tried to pay their monthly rental, the bank refused to accept the
payment inasmuch as the property had already been sold to another person.
When the spouses offered to buy the property, the bank turned down their offer.
Sometime thereafter, the spouses received a letter demanding that they vacate
196 PROPERTY
when they started paying monthly rentals to the mortgagee bank
after the foreclosure of the said property. We find this finding of the
courts a quo conclusive on us in this petition for review.
A conclusive presumption arises from the fact that, during
the tenancy relationship, the petitioner spouses admitted the
validity of the title of their landlord. This negated their previous
claim of title. If, indeed, they believed in good faith they had at
least an imperfect title of dominion over the subject premises, they
should have tried to prevent the foreclosure and objected to the
acquisition of title by the bank. In other words, their supposed
belief in good faith of their right of dominion ended when the bank
foreclosed and acquired title over the subject premises.
Hence, the applicable provision in the instant case is Article
1678 of the Civil Code which provides that:
“Art. 1678. If the lessee makes, in good faith,
useful improvements which are suitable to the use
for which the lease is intended, without altering the
form or substance of the property leased, the lessor
upon the termination of the lease shall pay the lessee
one-half of the value of the improvements at that time.
Should the lessor refuse to reimburse said amount, the
lessee may remove the improvements, even though the
principal thing may suffer damage thereby. He shall
not, however, cause any more impairment upon the
property leased than is necessary.
With regard to ornamental expenses, the lessee
shall not be entitled to any reimbursement, but he may
remove the ornamental objects, provided no damage
is cause to the principal thing, and the lessor does not
choose to retain them by paying their value at the time
the lease is extinguished.’’
The petitioner spouses are therefore entitled to be paid only one-half
of the value of the useful improvements at the time of the termination of the
lease or to have the said improvements removed if the respondent refuses to
reimburse them.
[47.1.3] As A Rule, Art. 448 Cannot Apply To A Co-Owner
Article 448 of the New Civil Code cannot apply where a co-owner
builds, plants or sows on the land owned in common for then he did
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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not build, plant or sow upon land that exclusively belongs to another
but of which he is a co-owner. The co-owner is not a third person
under the circumstances, and the situation is governed by the rules of
co-ownership.247 However, when the co-ownership is terminated by a
partition and it appears that the house of an erstwhile co-owner has
encroached upon a portion pertaining to another co-owner which was
however made in good faith, then the provisions of Article 448 should
apply to determine the respective rights of the parties.248
Spouses Del Campo v. Abesia
160 SCRA 379 (1988)
This case involves a parcel of land co-owned by the plaintiffs and
defendants in the proportion of 2/3 and 1/3 each, respectively. An action for
partition was filed by plaintiffs in the CFI of Cebu. The trial court appointed
a commissioner in accordance with the agreement of the parties. The said
commissioner conducted a survey, prepared a sketch plan and submitted a
report to the court, recommending that the property be divided into two lots:
lot 1161-A with an area of 30 square meters for plaintiffs and lot no-1161-B
for the defendants with an area of 15 square meters. The houses of plaintiffs
and defendants were surveyed and shown on the sketch plan. The house of
defendants occupied the portion of lot 1161-A of plaintiffs. The parties
manifested their conformity to the report and asked the trial court to finally
settle and adjudicate who among the parties should take possession of the 5
square meters of the land in question. The trial court thereafter rendered a
decision which states that since Article 448 cannot be applied to a case where
one has built, planted or sown on the land owned in common, the defendants
should remove and demolish, at their expense, the part of their house which
encroached upon the land of the plaintiffs. The defendants appealed from said
decision. On appeal, the Supreme Court held that Article 448 of the Civil Code
is applicable. The Court explained —
The court a quo correctly held that Article 448 of the Civil
Code cannot apply where a co-owner builds, plants or sows on the
land owned in common for then he did not build, plant or sow upon
land that exclusively belongs to another but of which he is a co-
owner. The co-owner is not a third person under the circumstances,
and the situation is governed by the rules of co-ownership.
247
Spouses Del Campo v. Abesia, 160 SCRA 379, 382 (1988).
248
Ignao v. IAC, 193 SCRA 17, 23 (1991); Sps. Del Campo v. Abesia, supra.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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aforesaid land, allotting 133.5 square meters or 2/8 thereof to Juan and Isidro,
and giving the remaining portion with a total area of 266.5 square meters
to Florencio. However, no actual partition was effected. In 1978, Florencio
instituted a complaint for recovery of possession of real property against Juan
and Isidro alleging that the area occupied by the two houses built by Juan and
Isidro exceeded the 133.5 square meters previously allotted to them by the trial
court. When the property was surveyed upon the agreement of the parties, it
was disclosed that the house of Juan occupied 42 square meters while that of
Isidro occupied 59 square meters of Florencio’s land or a total of 101 square
meters. The trial court applied article 448 of the Civil Code in resolving the
conflicting rights of the parties, which decision was affirmed by the Court of
Appeals. Florencio appealed to the Supreme Court contending that the CA
erred in applying Article 448 of the Civil Code since this article contemplates
a situation wherein the land belongs to one person and the thing built, sown or
planted belongs to another. In holding that Article 448 applies in this particular
case, the Supreme Court explained —
Whether or not the provisions of Article 448 should apply
to a builder in good faith on a property held in common has been
resolved in the affirmative in the case of Spouses del Campo v.
Abesia (160 SCRA 379 [1988]) wherein the Court ruled that:
“The court a quo correctly held that Article 448
of the Civil Code cannot apply where a co-owner
builds, plants or sows on the land owned in common
for then he did not build, plant or sow upon land that
exclusively belongs to another but of which he is a
co-owner. The co-owner is not a third person under
the circumstances, and the situation is governed by the
rules of co-ownership.
“However, when, as in this case, the ownership
is terminated by the partition and it appears that the
home of defendants overlaps or occupies a portion
of 5 square meters of the land pertaining to plaintiffs
which the defendants obviously built in good faith,
then the provisions of Article 448 of the New Civil
Code should apply. Manresa and Navarro Amandi
agree that the said provision of the Civil Code may
apply even when there is a co-ownership if good faith
has been established.’’
In other words, when the co-ownership is terminated by a
partition and it appears that the house of an erstwhile co-owner has
encroached upon a portion pertaining to another co-owner which
197 198 PROPERTY
However, when, as in this case, the co-ownership is terminated
by the partition and it appears that the house of defendants overlaps
or occupies a portion of 5 square meters of the land pertaining to
plaintiffs which the defendants obviously built in good faith, then
the provisions of Article 448 of the New Civil Code should apply.
Manresa and Navarro Amandi agree that the said provision of the
Civil Code may apply even when there was co-ownership if good
faith has been established.
Applying the aforesaid provision of the Civil Code, the
plaintiffs have the right to appropriate said portion of the house of
defendants upon payment of indemnity to defendants as provided
for in Article 546 of the Civil Code. Otherwise, the plaintiffs may
oblige the defendants to pay the price of the land occupied by their
house. However, if the price asked for is considerably much more
than the value of the portion of the house of defendants built thereon,
then the latter cannot be obliged to buy the land. The defendants
shall then pay the reasonable rent to the plaintiffs upon such terms
and conditions that they may agree. In case of disagreement, the
trial court shall fix the terms thereof. Of course, defendants may
demolish or remove the said portion of their house, at their own
expense, if they so decide.
WHEREFORE, the decision appealed from is hereby
MODIFIED by ordering plaintiffs to indemnify defendants for the
value of the said portion of the house of defendants in accordance
with Article 546 of the Civil Code, if plaintiffs elect to appropriate
the same. Otherwise, the defendants shall pay the value of the 5
square meters of land occupied by their house at such price as may
be agreed upon with plaintiffs and if its value exceeds the portion
of the house that defendants built thereon, the defendants may
choose not to buy the land but defendants must pay a reasonable
rental for the use of the portion of the land of plaintiffs as may
be agreed upon between the parties. In case of disagreement, the
rate of rental shall be determined by the trial court. Otherwise,
defendants may remove or demolish at their own expense the said
portion of their house.
Ignao v. IAC
193 SCRA 17 (1991)
In this case, Florencio Ignao and his uncles, Juan Ignao and Isidro Ignao,
were co-owners of a parcel of land with an area of 534 square meters. Pursuant
to an action for partition, the CFI of Cavite in 1975 directed the partition of the
199 200 PROPERTY
was however made in good faith, then the provisions of Article 448
should apply to determine the respective rights of the parties.
Petitioner’s second assigned error is however well taken.
Both the trial court and the Appellate Court erred when they
peremptorily adopted the “workable solution” in the case of Grana
v. Court of Appeals (109 Phil. 260), and ordered the owner of the
land, petitioner Florencio, to sell to private respondents, Juan and
Isidro, the part of the land they intruded upon, thereby depriving
petitioner of his right to choose. Such ruling contravened the
explicit provisions of Article 448 to the effect that “(t)he owner
of the land xxx shall have the right to appropriate xxx or to oblige
the one who built xxx to pay the price of the land xxx.” The law
is clear and unambiguous when it confers the right of choice upon
the landowner and not upon the builder and the courts.
Thus, in Quemuel v. Olaes (1 SCRA 1159 [1961]), the
Court categorically ruled that the right to appropriate the works or
improvements or to oblige the builder to pay the price of the land
belongs to the landowner.
As to the third assignment of error, the question on the price
to be paid on the land need not be discussed as this would be
premature inasmuch as petitioner Florencio has yet to exercise his
option as the owner of the land.
WHEREFORE, the decision appealed from is hereby
MODIFIED as follows: Petitioner Florencio Ignao is directed
within thirty (30) days from entry of judgment to exercise his
option to either appropriate as his own the portions of the houses
of Juan and Isidro Ignao occupying his land upon payment of
indemnity in accordance with Articles 546 and 548 of the Civil
Code, or sell to private respondents the 101 square meters occupied
by them at such price as may be agreed upon. Should the value of
the land exceed the value of the portions of the houses that private
respondents have erected thereon, private respondents may choose
not to buy the land but they must pay reasonable rent for the use
of the portion of petitioner’s land as may be agreed upon by the
parties. In case of disagreement, the rate of rental and other terms of
the lease shall be determined by the trial court. Otherwise, private
respondents may remove or demolish at their own expense the said
portions of their houses encroaching upon petitioner’s land.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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[47.1.4] Art. 448 Made Applicable Under Peculiar Circum-
stances
In Sarmiento v. Agana,249 the Supreme Court, deviating from the
general rule that Article 448 applies only when a builder builds in the
concept of an owner, ruled that the Valentino spouses were builders
in good faith in view of the peculiar circumstances under which they
constructed their residential house. As far as the couple knew, the land
was owned by the husband’s mother-in-law who, having stated they
could build on the property, could reasonably be expected to later on
give them the land. It turned out that the land had been titled in the name
of another person. The Supreme Court, however, applied in this case the
provisions of Article 448.
In Macasaet v. Macasaet,250 the Court also held that the children
have the right to be indemnified for the useful improvements constructed
in good faith on a lot owned by the parents, applying the provisions of
Article 448. In this case, the parents invited their children to occupy the
formers’ lots, out of parental love and desire to foster family solidarity.
Because of that invitation, the children constructed their residential
house on the property. Unfortunately, an unresolved conflict terminated
this situation and out of pique, the parents asked the children to vacate
the premises. Deviating again from the general rule that Article 448
applies only when a builder builds in the concept of an owner, the Court
held that the children were builders in good faith.
The Macasaet case is factually similar to Javier v. Javier.251 In
that case, the Court deemed the son to be in good faith for building the
improvement (the house) with the knowledge and consent of his father,
to whom belonged the land upon which it was built. Thus, Article 448
(then Article 361 of the Old Civil Code) was applied.
Ordinarily, Article 448 does not apply to a case where the owner of
the land is the builder, sower or planter who then later loses ownership
of the land by sale or donation,252 for then there can be no question as
to good or bad faith on the part of the builder.253 In the case of Pecson v.
249
129 SCRA 122 (1984).
250
439 SCRA 625.
251
7 Phil. 261 (1907).
252
Pecson v. CA, 244 SCRA 407 (1995).
253
Colengco v. Regalado, 92 Phil. 387, 395 (1952).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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Right of Accession General Provisions
Article 361 of the old Civil Code is not applicable in this
case, for Regalado constructed the house on his own land before
he sold said land to Coleongco. Article 361 applies only in cases
where a person constructs a building on the land of another in good
or in bad faith, as the may be. It does not apply to a case where a
person constructs a building on his own land, for then there can be
no question as to good or bad faith on the part of the builder.
Elsewise stated, where the true owner himself is the builder
of works on his own land, the issue of good faith or bad faith is
entirely irrelevant.
Thus in strict point of law, Article 448 is not apposite to the
case at bar. Nevertheless, we believe that the provision therein on
indemnity may be applied by analogy considering that the primary
intent of Article 448 is to avoid a state of forced co-ownership
and that the parties, including the two courts below, in the main
agree that Articles 448 and 546 of the Civil Code are applicable
and indemnity for the improvements may be paid although they
differ as to the basis of the indemnity.
Article 546 does not specifically state how the value of the
useful improvements should be determined. The respondent court
and the private respondents espouse the belief that the cost of
construction of the apartment building in 1965, and not its current
market value, is sufficient reimbursement for necessary and useful
improvements made by the petitioner. This position is, however,
not in consonance with previous rulings of this Court in similar
cases. In Javier v. Concepcion, Jr. (94 SCRA 212 [1979]), this
Court pegged the value of the useful improvements consisting
of various fruits, bamboos, a house and camarin made of strong
material based on the market value of the said improvements. In
Sarmiento v. Agana (129 SCRA 122 [1984]), despite the finding
that the useful improvement, a residential house, was built in
1967 at a cost of between Eight thousand pesos (P8,000.00) to
Ten thousand pesos (P10,000.00), the landowner was ordered
to reimburse the builder in the amount of Forty thousand pesos
(P40,000.00), the value of the house at the time of the trial. In the
same way, the landowner was required to pay the “present value”
of the house, a useful improvement, in the case of De Guzman v.
De la Fuente (55 Phil. 501 [1930]), cited by the petitioner.
The objective of Article 546 of the Civil Code is to adminis-
ter justice between the parties involved. In this regard, this Court
had long ago stated in Rivera v. Roman Catholic Archbishop of
201 202 PROPERTY
Court of Appeals,254 however, the Court applied by analogy the provision
of Article 448 on indemnity to a builder who loses ownership of his
land when the same was auctioned off by a local government unit for
failure of the landowner to pay the real estate taxes.
Pecson v. Court of Appeals
244 SCRA 407 (1995)
In this case, Pedro Pecson was the owner of a commercial lot located
in Kamias Street, Quezon City, on which he built a four-door two-storey
apartment building. For his failure to pay realty taxes, the lot was sold at public
auction by the City Treasurer of Quezon City to Mamerto Nepomuceno whoin
turn sold it in 1983 to the spouses Juan and Erlinda Nuguid. Pecson challenged
the validity of the auction sale. The trial court dismissed the complaint but
held that the apartment building was not included in the auction sale. Both
parties appealed. The Court of Appeals, on the other hand, affirmed in toto
the decision of the trial court. When the decision became final, the spouses
Nuguid filed with the trial court a motion for the delivery of possession of the
lot and the apartment building citing Article 546 of the Civil Code. The trial
court granted the motion. Pecson elevated the matter to the CA in a special
civil action for certiorari. The Court of Appeals affirmed in part the order of
the trial court citing Article 448 of the Civil Code. Aggrieved by the decision
of the CA, Pecson went to the Supreme Court on appeal. The parties agree that
Pecson was a builder in good faith of the apartment building on the theory that
he constructed it at the time when he was still the owner of the lot. The key
issue in this case is the application of Articles 448 and 546 of the Civil Code.
The Court held —
By its clear language, Article 448 refers to a land whose
ownership is claimed by two or more parties, one of whom has
built some works, or sown or planted something. The building,
sowing or planting may have been made in good faith or in bad
faith. The rule on good faith laid down in Article 526 of the Civil
Code shall be applied in determining whether a builder, sower or
planter had acted in good faith.
Article 448 does not apply to a case where the owner of the
land is the builder, sower, or planter who then later loses ownership
of the land by sale or donation. This Court said so in Coleongco v.
Regalado (92 Phil. 387, 395 [1952]):
254
Supra.
203 204 PROPERTY
Manila (40 Phil. 717 [1920]) that the said provision was formu-
lated in trying to adjust the rights of the owner and possessor in
good faith of a piece of land, to administer complete justice to
both of them in such a way as neither one nor the other may enrich
himself of that which does not belong to him. Guided by this pre-
cept, it is therefore the current market value of the improvements
which should be made the basis of reimbursement. A contrary
ruling would unjustly enrich the private respondents who would
otherwise be allowed to acquire a highly valued income-yielding
four unit apartment building for a measly amount. Consequently,
the parties should therefore be allowed to adduce evidence on the
present market value of the apartment building upon which the
trial court should base its finding as to the amount of reimburse-
ment to be paid by the landowner.
The trial court also erred in ordering the petitioner to pay
monthly rentals equal to the aggregate rentals paid by the lessees of
the apartment building. Since the private respondents have opted to
appropriate the apartment building, the petitioner is thus entitled to
the possession and enjoyment of the apartment building, until he is
paid the proper indemnity, as well as of the portion of the lot where
the building has been constructed. This is so because the right to
retain the improvements while the corresponding indemnity is not
paid implies the tenancy or possession in fact of the land on which
it is built, planted or sown. The petitioner not having been so paid,
he was entitled to retain ownership of the building and, necessarily,
the income therefrom.
It follows, too, that the Court of Appeals erred not only in
upholding the trial court’s determination of the indemnity, but also
in ordering the petitioner to account for the rentals of the apartment
building from 23 June 1993 to 23 September 1993.
WHEREFORE, the decision of the Court of Appeals in CA-
G.R. SP No. 32679 and the Order of 15 November 1993 of the
Regional Trial Court, Branch 101, Quezon City in Civil Case No.
Q-41470 are hereby SET ASIDE.
The case is hereby remanded to the trial court for it to deter-
mine the current market value of the apartment building on the lot.
For this purpose, the parties shall be allowed to adduce evidence
on the current market value of the apartment building. The value
so determined shall be forthwith paid by the private respondents
to the petitioner otherwise the petitioner shall be restored to the
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 205
OWNERSHIP
Right of Accession General Provisions
possession of the apartment building until payment of the required
indemnity.
Sarmiento v. Agana
129 SCRA 122 (1984)
While Ernesto Valentino was still courting his wife, Rebecca, the latter’s
mother had told him the couple could build a residential house on a certain lot
of a subdivision in Parañaque. Assuming that the wife’s mother was the owner
of the land, Ernesto did construct a house on the said land in 1967 at a cost of
P8,000 to P10,000. It turned out that the land had been titled in the name of
Mr. & Mrs. Jose Santos, Jr., who in 1974, sold the same to Leonila Sarmiento.
In 1975, Sarmiento asked the spouses Valentino to vacate the land. Thereafter,
Sarmiento filed an ejectment case against the spouses. The Municipal Court
found that the spouses Valentino had built the house in good faith and that it
had a value of P20,000.00. It then ordered the spouses to vacate after Sarmiento
has paid them the mentioned sum of P20,000.00. On appeal, the CFI of Pasay
modified the decision pursuant to Article 448 of the Civil Code. Sarmiento
was required, within 60 days, to exercise the option to reimburse the spouses
Valentino the sum of P40,000.00 as the value of the residential house, or the
option to allow them to purchase the land for P25,000.00. Sarmiento did not
exercise any of the two options within the indicated period, and Ernesto was
then allowed to deposit the sum of P25,000.00 with the court as the purchase
price for the land. Subsequently, Sarmiento questioned the action of the court.
(1) Are the spouses Valentino builders in good faith?
The Supreme Court ruled in the affirmative. The Court said — “We agree
that ERNESTO and wife are builders in good faith in view of the peculiar
circumstances under which they had constructed the RESIDENTIAL HOUSE.
As far as they knew, the LAND was owned by ERNESTO’s mother-in-law
who, having stated they could build on the property, could reasonably expected
to later on give them the LAND.”
(2) Can Sarmiento refuse either to pay for the building or to sell the
land and insist on the removal of the building?
NO. “The owner of the building erected in good faith on a land owned by
another, is entitled to retain the possession of the land until he is paid the value
of his building, under Article 453 (now Article 546). The owner of the land,
upon the other hand, has the option, under Article 361 (now Article 448), either
to pay for the building or to sell his land to the owner of the building. But he
cannot, as respondents did here, refuse both to pay for the building and to sell
the land and compel the owner of the building to remove it from the land where
it is erected. He is entitled to such remotion only when, after having chosen to
sell his land, the other party fails to pay for the same.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 207
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Right of Accession General Provisions
presumption of good faith under Article 527 of the Civil Code,
as already stated, taken together with the disputable presumptions
of the law on evidence. These presumptions state, under Section
3(a) of Rule 131 of the Rules of Court, that the person is innocent
of a crime or wrong; and under Section 3(ff) of Rule 131, that
the law has been obeyed. In fact, private respondent Eduardo Uy
himself was unaware of such intrusion into his property until after
1971 when he hired a surveyor, following his purchase of another
adjoining lot, to survey all his newly acquired lots. Upon being
apprised of the encroachment, petitioner immediately offered
to buy the area occupied by its building — a species of conduct
consistent with good faith.
In the second place, upon delivery of the property by Pariz
Industries, as seller, to the petitioner, as buyer, the latter acquired
ownership of the property. Consequently and as earlier discussed,
petitioner is deemed to have stepped into the shoes of the seller
in regard to all rights of ownership over the immovable sold,
including the right to compel the private respondent to exercise
either of the two options provided under Article 448 of the Civil
Code.”256
(2) Uy contends that Technogas cannot be considered in good faith
because as landowner, it is presumed to know the metes and bounds of its own
property? Is the contention correct?
The Supreme Court said no. Bad faith cannot be imputed to a registered
owner of land when a part of his building encroaches upon a neighbor’s land
simply because he is supposedly presumed to know the boundaries of his land
as prescribed in his certificate of title. Unless one is versed in the science of
surveying, “no one can determine the precise extent or location of his property
by merely examining his paper title.”257
(3) May Technogas lose its rights under Article 448 on the basis merely
of the fact that some years after acquiring the property in good faith, it learned
about and recognized the right of Uy to a portion of the land occupied by its
buildings?
NO. “The supervening awareness of the encroachment by (Technogas)
does not militate against its right to claim the status of a builder in good faith.
In fact, a judicious reading of said Article 448 will readily show that the
landowner’s exercise of his option can only take place after the builder shall
256
At p. 17.
257
At pp. 14-15.
206 PROPERTY
[47.1.5] Art. 448 Can Be Invoked By Successor-In-Interest
In the case of Technogas Philippines Manufacturing Corp. v.
Court of Appeals,255 Technogas was allowed to invoke the benefits of
Article 448 of the New Civil Code, i.e., to compel the landowner to
make a choice between two options: (1) to appropriate the building by
paying the indemnity required by law, or (2) sell the land to the builder,
although it is not the builder of the buildings and/or improvements but
merely acquired the same, by sale, from the builder in good faith.
Technogas Philippines Manufacturing Corp. v. CA
268 SCRA 5 (1997)
In 1970, Technogas purchased a parcel of land, with all the buildings
and improvements including the wall existing thereon, from Pariz Industries,
Inc. Eduardo Uy, on the other hand, owns the adjoining parcel of land which
he acquired from a certain Enrile Antonio in 1970. In 1971, Uy purchased
another lot also adjoining Technogas’ land from a certain Miguel Rodriguez.
It turned out that portions of the buildings and wall bought by Technogas are
occupying portions of Uy’s adjoining land. Upon learning of the encroachment,
Technogas offered to buy from Uy that particular portion of Uy’s land occupied
by portions of its buildings and wall. Uy, however, refused the offer. Technogas
filed an action in court to compel Uy to sell the portions of Uy’s land occupied
by its buildings and wall.
(1) Can the benefit of Article 448 of the Civil Code be invoked by
Technogas even if it is not the builder of the offending structures but merely
possessors of the same as buyers?
The Supreme Court ruled in the affirmative. Said the Court —
The question, however, is whether the same benefit can be
invoked by petitioner who, as earlier stated, is not the builder of
the offending structures but possesses them as buyer.
We answer such question in the affirmative.
In the first place, there is no sufficient showing that petitioner
was aware of the encroachment at the time it acquired the property
from Pariz Industries. We agree with the trial court that various
factors in evidence adequately show petitioner’s lack of awareness
thereof. In any case, contrary proof has not overthrown the
255
268 SCRA 5 (1997).
208 PROPERTY
have come to know of the intrusion — in short, when both parties shall have
become aware of it. Only then will the occasion for exercising the option arise,
for it is only then that both parties will have been aware that a problem exists
in regard to their property rights.”
[47.2] Good Faith of the Landowner
The landowner, on the other hand, is said to have acted in good
faith if he did not know or was not aware that something was being
built, planted or sown on his land; he learned of it only after the act
was done. This is clear from the provisions of the second paragraph of
Article 453 of the New Civil Code which states “it is understood that
there is bad faith on the part of the landowner whenever the act was
done with his knowledge and without opposition on his part.”
[47.3] Legal Effects Where Both Parties Are In Good Faith
What then are the legal effects of a situation where both the
landowner and the builder, planter or sower (who is at the same time the
owner of the materials) acted in good faith? Article 448 governs such a
situation. Under Article 448, the landowner, as owner of the principal
thing, is given two alternative rights: (1) to appropriate as his own the
works, sowing or planting after payment to the builder, planter or sower
of the necessary and useful expenses, and in the proper cases, expenses
for pure luxury or mere pleasure, incurred by the latter; or (2) to oblige
the one who built or planted to pay the price of the land, if the value of
the land is not considerably more than that of the building or trees, and
the one who sowed, the proper rent. The essential fairness of this codal
provision has been pointed out by Mme. Justice Ameurfina Melencio-
Herrera, citing Manresa and applicable precedents, in the case of Depra
v. Dumlao,258 to wit:
Where the builder, planter or sower has acted in good
faith, a conflict of rights arises between the owners, and it
becomes necessary to protect the owner of the improvements
without causing injustice to the owner of the land. In view of
the impracticality of creating a state of forced co-ownership,
the law has provided a just solution by giving the owner
of the land the option to acquire the improvements after
258
136 SCRA 475, 483 (1985).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 209
OWNERSHIP
Right of Accession General Provisions
payment of the proper indemnity, or to oblige the builder or
planter to pay for the land and the sower to pay the proper
rent. It is the owner of the land who is authorized to exercise
the option, because his right is older, and because, by the
principle of accession, he is entitled to the ownership of the
accessory thing. (3 Manresa 213; Bernardo v. Bataclan, 37
Off. Gaz. 1382; Co Tao v. Chan Chico, G.R. No. 49167,
April 30, 1949; Article applied; see Cabral, et al. v. Ibañez
[S.C.] 52 Off. Gaz. 217; Marfori v. Velasco, [CA] 52 Off.
Gaz. 2050).
[47.3.1] Option Is Given To the Landowner
Under Article 448, 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,259 a
rule that accords with the principle of accession, i.e., that the accessory
follows the principal.260 The only right given to the builder in good faith
is the right to reimbursement for the improvements; the builder cannot
compel the owner of the land to sell such land to the former.261 It is the
owner of the land who is authorized to exercise the option, because his
right is older, and because, by the principle of accession, he is entitled
to the ownership of the accessory thing.262
Quemel v. Olaes
1 SCRA 1159 (1961)
The Olaes spouses (Angel and Juliana) sued the Quemuel spouses
(Alejandro and Ruperta) for recovery of possession of a parcel of land. In their
answer, the Quemel spouses admitted plaintiffs’ ownership but contended that
their occupation was gratuitous. In 1954, the trial court ordered the Quemel
spouses to return the possession of the land to the Olaes spouses and to pay
the latter P20.00 a month from January 1954, until they shall have vacated the
premises. The Quemel spouses did not appeal. To forestall the execution of
259
Ballatan v. CA, 304 SCRA 34, 46 (1999), citing Grana and Torralba v. CA, 109 Phil. 260,
263 (1960); Acuna v. Furukawa Plantation Co., 93 Phil. 957, 961 (1953); Aringo v. Arena, 14 Phil.
263, 269 (1909); also in Quemuel v. Olaes, 1 SCRA 1159 (1961).
260
Rosales v. Castelltort, 472 SCRA SCRA 144, 155 (2005).
261
Quemuel v. Olaes, supra., at p. 1163
262
Depra v. Dumlao, 136 SCRA 475, 483 (1985).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 211
OWNERSHIP
Right of Accession General Provisions
by the respondents dela Cruz of the amount of P3,500.00 “within
30 days after this decision becomes final” to petitioners San Diego.
If it also orders petitioners to vacate only upon the payment, it did
so in recognition of the right of retention granted to possessors
in good faith by Article 546 of the Civil Code of the Philippines.
This provision is expressly made applicable to builders in good
faith (Article 448). The right of retention thus granted is merely a
security for the enforcement of the possessor’s right to indemnity
for the improvements made by him. As a result, the possessor in
good faith, in retaining the land and its improvements pending
reimbursement of his useful expenditures, is not bound to pay
any rental during the period of retention; otherwise, the value of
his security would be impaired (cf. Tufexis v. Chunaco [C.A.], 36
O.G. 2455).
Normally, of course, the landowner has the option to either
appropriate the improvement or to sell the land to the possessor.
This option is no longer open to the respondent landowners because
the decision in the former suit limits them to the first alternative
by requiring the petitioners to vacate the land (and surrender the
improvements) upon payment of P3,500.00. Evidently, the Courts
of First Instance and of Appeals opined that the respondents’ suit
to recover the property was an exercise of their right to choose
to appropriate the improvements and pay the indemnity fixed by
law. The respondents acquiesced in this view, since they did not
ask for a modification of the judgment, and allowed it to become
final. Consequently, they can no longer insist on selecting another
alternative; nor can they be heard now to urge that the value of the
indemnity, set at P3,500.00, is exorbitant, for the same reason that
the judgment fixing that amount is no longer subject to alteration.
[47.3.2] Landowner Cannot Refuse To Exercise Either
Option
Even as the option lies with the landowner, the grant to him, nev-
ertheless, is preclusive.263 He must choose one.264 Hence, the landowner
cannot refuse to exercise either option and compel instead the owner of
the building or improvement to remove it from the land.265 The remedy
263
Rosales v. Castelltort, 472 SCRA 144 citing PNB v. De Jesus, 411 SCRA 557, 560
(2003).
264
PNB v. De Jesus, supra.
265
Id., Technogas Philippines Manufacturing Corp. v. CA, 268 SCRA 5, 17 (1997), citing
Ignacio v. Hilario, 76 Phil. 605 (1946) and Sarmiento v. Agana, 129 SCRA 122 (1984).
210 PROPERTY
the judgment, the Quemel spouses filed a complaint against the Olaes spouses
seeking to reduce the monthly rental and to compel the Olaes spouses to sell
to them the portion of the lot where their house is erected. The Olaes spouses
filed a motion to dismiss the complaint on the ground of lack of cause of action
and res judicata. The trial court dismissed the complaint. The Quemel spouses
appealed to the Court of Appeals. The appeal, however, was certified to the
Supreme Court. The plaintiffs (Quemel spouses) claim that their cause of
action to compel the Olaes spouses to sell to them the land is based on Article
448 in connection with Article 546 of the New Civil Code. On this issue, the
Supreme Court held —
On the assumption that the allegations of the second cause
of action are true, what would be the rights of the parties? The
plaintiffs claim that their second cause of action is based on Article
448 in connection with Article 546, of the New Civil Code. A
cursory reading of these provisions, however, will show that they
are not applicable to plaintiffs’ case. Under Article 448, the right to
appropriate the works or improvements or “to oblige the one who
built or planted to pay the price of the land” belongs to the owner
of the land. The only right given to the builder in good faith is the
right to reimbursement for the improvements; the builder, cannot
compel the owner of the land to sell such land to the former. This
is assuming that the plaintiffs are builders in good faith. But the
plaintiffs are not builders in good faith. xxx
San Diego v. Montesa
6 SCRA 207 (1962)
After trial in Civil Case No. 770 for recovery of a parcel of land filed
by Jose, Maria and Urbano, all surnamed “de la Cruz,” against Gil San Diego
and Rufino San Diego, the trial court rendered a decision. Under the dipositive
portion of said decision, the defendants and third-party plaintiffs were ordered
to vacate the land in question upon payment to them by the plaintiffs and
third-party defendants, within thirty days after the decision has become final,
of the sum of P3,500.00. The judgment became final and executory. The
defendants and third-party plaintiffs, who were in possession of the land in
litigation, moved to execute the portion of the decision which required the
payment of P3,500.00. The plaintiffs opposed the motion on the ground that,
as owners, they have the right to exercise the option to either pay the value of
improvements or demand reasonable rent if they do not choose to appropriate
the building.
We find the petition meritorious. The judgment affirmed by
the Court of Appeals, and now final, explicitly ordains the payment
212 PROPERTY
of remotion is available only if and when the owner of the land chooses
to compel the builder to buy the land at a reasonable price but the latter
fails to pay such price.266 In a situation where the landowner is refusing
to exercise any of the options granted him under Article 448, the build-
er in good faith can, under the same Article, 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.267
Technogas Philippines Manufacturing Corp. v. CA
268 SCRA 5 (1997)
In 1970, Technogas purchased a parcel of land, with all the buildings
and improvements including the wall existing thereon, from Pariz Industries,
Inc. Eduardo Uy, on the other hand, owns the adjoining parcel of land which
he acquired from a certain Enrile Antonio in 1970. In 1971, Uy purchased
another lot also adjoining Technogas’ land from a certain Miguel Rodriguez.
It turned out that portions of the buildings and wall bought by Technogas are
occupying portions of Uy’s adjoining land. Upon learning of the encroachment,
Technogas offered to buy from Uy that particular portion of Uy’s land occupied
by portions of its buildings and wall. Uy, however, refused the offer. Technogas
filed an action in court to compel Uy to sell the portions of Uy’s land occupied
by its buildings and wall. In resolving the respective rights and obligations of
the parties, the Supreme Court held —
What then is the applicable provision in this case which
private respondent may invoke as his remedy: Article 448 or
Article 450 of the Civil Code?
In view of the good faith of both petitioner (Technogas)
and private respondent (Uy), their rights and obligations are to be
governed by Art. 448. The essential fairness of this codal provision
has been pointed out by Mme. Justice Ameurfina Melencio-
Herrera, citing Manresa and applicable precedents, in the case of
Depra v. Dumlao (136 SCRA 475, 483 [1985]) to wit:
“Where the builder, planter or sower has acted in good faith,
a conflict of rights arises between the owners, and it becomes
necessary to protect the owner of the improvements without causing
injustice to the owner of the land. In view of the impracticality of
creating a state of forced co-ownership, the law has provided a just
266
Technogas Philippines Manufacturing Corp. v. CA, supra.
267
PNB v. De Jesus, supra.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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Right of Accession General Provisions
solution by giving the owner of the land the option to acquire the
improvements after payment of the proper indemnity, or to oblige
the builder or planter to pay for the land and the sower to pay the
proper rent. It is the owner of the land who is authorized to exercise
the option, because his right is older, and because, by the principle
of accession, he is entitled to the ownership of the accessory thing.
(3 Manresa 213; Bernardo v. Bataclan, 37 Off. Gaz. 1382; Co Tao
v. Chan Chico, G.R. No. 49167, April 30, 1949; Article applied;
see Cabral, et al. v. Ibañez [S.C.] 52 Off. Gaz. 217; Marfori v.
Velasco, [CA] 52 Off. Gaz. 2050).”
The private respondent’s insistence on the removal of the
encroaching structures as the proper remedy, which respondent
Court sustained in its assailed Decisions, is thus legally flawed.
This is not one of the remedies bestowed upon him by law. It would
be available only if and when he chooses to compel the petitioner
to buy the land at a reasonable price but the latter fails to pay such
price. (Ignacio v. Hilario, supra.) This has not taken place. Hence,
his options are limited to: (1) appropriating the encroaching
portion of petitioner’s building after payment of proper indemnity,
or (2) obliging the latter to buy the lot occupied by the structure.
He cannot exercise a remedy of his own liking.
Neither is petitioner’s prayer that private respondent be
ordered to sell the land the proper remedy. While that was dubbed
as the “more workable solution” in Grana and Torralba v. The
Court of Appeals, et al. (109 Phil. 260, 264 [1960]), it was not
the relief granted in that case as the landowners were directed to
exercise “within 30 days from this decision their option to either
buy the portion of the petitioners’ house on their land or sell to said
petitioners the portion of their land on which it stand.” Moreover,
in Grana and Torralba, the area involved was only 87 square
meters while this case involves 520 square meters. In line with the
case of Depra v. Dumlao, this case will have to be remanded to the
trial court for further proceedings to fully implement the mandate
of Art. 448. It is a rule of procedure for the Supreme Court to strive
to settle the entire controversy in a single proceeding leaving no
root or branch to bear the seeds of future litigation.
Petitioner, however, must also pay the rent for the property
occupied by its building as prescribed by respondent Court from
October 4, 1979, but only up to the date private respondent serves
notice of its option upon petitioner and the trial court; that is, if
such option is for private respondent to appropriate the encroaching
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
OWNERSHIP
Right of Accession General Provisions
b) If private respondent exercises the option to
oblige petitioner to pay the price of the land but the latter
rejects such purchase because, as found by the trial court,
the value of the land is considerably more than that of the
portion of the building, petitioner shall give written notice
of such rejection to private respondent and to the trial court
within fifteen (15) days from notice of private respondent’s
option to sell the land. In that event, the parties shall be given
a period of fifteen (15) days from such notice of rejection
within which to agree upon the terms of the lease, and give
the trial court formal written notice of the agreement and its
provisos. If no agreement is reached by the parties, the trial
court, within fifteen (15) days from and after the termination
of the said period fixed for negotiation, shall then fix the
terms of the lease provided that the monthly rental to be
fixed by the Court shall not be less than Two thousand pesos
(P2,000.00) per month, payable within the first five (5) days
of each calendar month. The period for the forced lease shall
not be more than two (2) years, counted from the finality
of the judgment, considering the long period of time since
1970 that petitioner has occupied the subject area. The rental
thus fixed shall be increased by ten percent (10%) for the
second year of the forced lease. Petitioner shall not make
any further constructions or improvements on the building.
Upon expiration of the two-year period, or upon default by
petitioner in the payment of rentals for two (2) consecutive
months, private respondent shall be entitled to terminate the
forced lease, to recover his land, and to have the portion of
the building removed by petitioner or at latter’s expense. The
rentals herein provided shall be tendered by petitioner to the
trial court for payment to private respondent, and such tender
shall constitute evidence of whether or not compliance was
made within the period fixed by the said court.
c) In any event, petitioner shall pay private respon-
dent an amount computed at Two thousand pesos (P2,000.00)
per month as reasonable compensation for the occupancy of
private respondent’s land for the period counted from Octo-
ber 4, 1979, up to the date private respondent serves notice
of its option to appropriate the encroaching structures; other-
wise up to the actual transfer of ownership to petitioner or, in
case a forced lease has to be imposed, up to the commence-
ment date of the forced lease referred to in the preceding
paragraph;
213 214 PROPERTY
structure. In such event, petitioner would have a right of retention
which negates the obligation to pay rent. The rent should however
continue if the option chosen is compulsory sale, but only up to the
actual transfer of ownership.
The award of attorney’s fees by respondent Court against
petitioner is unwarranted since the action appears to have been
filed in good faith. Besides, there should be no penalty on the right
to litigate.
WHEREFORE, premises considered, the petition is hereby
GRANTED and the assailed Decision and the Amended Decision
are REVERSED and SET ASIDE. In accordance with the case of
Depra v. Dumlao, this case is REMANDED to the Regional Trial
Court of Pasay City, Branch 117, for further proceedings consistent
with Articles 448 and 546 of the Civil Code, as follows:
The trial court shall determine:
a) the present fair price of private respondent’s 520
square meter area of land;
b) the increase in value (“plus value”) which the
said area of 520 square meters may have acquired by reason
of the existence of the portion of the building on the area;
c) the fair market value of the encroaching portion
of the building; and
d) whether the value of said area of land is
considerably more than the fair market value of the portion
of the building thereon.
2. After said amounts shall have been determined by
competent evidence, the regional trial court shall render judgment
as follows:
a) The private respondent shall be granted a period
of fifteen (15) days within which to exercise his option under
the law (Article 448, Civil Code), whether to appropriate the
portion of the building as his own by paying to petitioner its
fair market value, or to oblige petitioner to pay the price of
said area. The amounts to be respectively paid by petitioner
and private respondent, in accordance with the option thus
exercised by written notice of the other party and to the
court, shall be paid by the obligor within fifteen (15) days
from such notice of the option by tendering the amount to
the trial court in favor of the party entitled to receive it;
215 216 PROPERTY
d) The periods to be fixed by the trial court in its
decision shall be non-extendible, and upon failure of the
party obliged to tender to the trial court the amount due to the
obligee, the party entitled to such payment shall be entitled
to an order of execution for the enforcement of payment of
the amount due and for compliance with such other acts as
maybe required by the prestation due the obligee.”
PNB v. De Jesus
411 SCRA 557 (2003)
Petitioner Philippine National Bank disputes the decision handed down
by the Court of Appeals promulgated on 23 March 2001 in CA-G.R. CV No.
56001, entitled “Generoso De Jesus, represented by his Attorney-in-Fact,
Christian De Jesus, versus Philippine National Bank.” The assailed decision
has affirmed the judgment rendered by the Regional Trial Court, Branch
44, of Mamburao, Occidental Mindoro, declaring respondent Generoso de
Jesus as being the true and lawful owner of the 124-square-meter portion
of the land covered by Transfer Certificate of Title (TCT) No. T-17197 and
ordering petitioner bank to vacate the premises, to deliver possession thereof
to respondent, and to remove the improvement thereon.
It would appear that on 10 June 1995, respondent filed a complaint against
petitioner before the Regional Trial Court of Occidental Mindoro for recovery
of ownership and possession, with damages, over the questioned property. In
his complaint, respondent stated that he had acquired a parcel of land situated in
Mamburao, Occidental Mindoro, with an area of 1,144 square meters covered
by TCT No. T-17197, and that on 26 March 1993, he had caused a verification
survey of the property and discovered that the northern portion of the lot was
being encroached upon by a building of petitioner to the extent of 124 square
meters. Despite two letters of demand sent by respondent, petitioner failed and
refused to vacate the area.
Petitioner, in its answer, asserted that when it acquired the lot and
the building sometime in 1981 from then Mayor Bienvenido Ignacio, the
encroachment already was in existence and to remedy the situation, Mayor
Ignacio offered to sell the area in question (which then also belonged to
Ignacio) to petitioner at P100.00 per square meter which offer the latter claimed
to have accepted. The sale, however, did not materialize when, without the
knowledge and consent of petitioner, Mayor Ignacio later mortgaged the lot to
the Development Bank of the Philippines.
The trial court decided the case in favor of respondent declaring him to
be the rightful owner of the disputed 124-square-meter portion of the lot and
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 217
OWNERSHIP
Right of Accession General Provisions
ordering petitioner to surrender possession of the property to respondent and to
cause, at its expense, the removal of any improvement thereon.
The Court of Appeals, on appeal, sustained the trial court but it ordered
to be deleted the award to respondent of attorney’s fees, as well as moral and
exemplary damages, and litigation expenses.
Petitioner went to this Court, via a petition for review, after the appellate
court had denied the bank’s motion for reconsideration, here now contending
that —
“1. THE COURT OF APPEALS GRAVELY ERRED IN
LAW IN ADJUDGING PNB A BUILDER IN BAD FAITH OVER
THE ENCROACHED PROPERTY IN QUESTION;
“2. THE COURT OF APPEALS GRAVELY ERRED IN
LAW IN NOT APPLYING IN FAVOR OF PNB THE PROVISION
OF ARTICLE 448 OF THE CIVIL CODE AND THE RULING
IN TECNOGAS PHILIPPINES MANUFACTURING CORP. V.
COURT OF APPEALS, G.R. No. 108894, February 10, 1997, 268
SCRA 7.”
The Regional Trial Court and the Court of Appeals have both rejected
the idea that petitioner can be considered a builder in good faith. In the context
that such term is used in particular reference to Article 448, et seq., 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 various provisions of the Civil Code, pertinent to the subject, read:
“Article 448. The owner of the land on which anything has
been built, sown, or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after payment
of the indemnity provided for in Articles 546 and 548, or to oblige
the one who built or planted to pay the price of the land, and the one
who sowed, the proper rent. However, the builder or planter cannot
be obliged to buy the land if its value is considerably more than
that of the building or trees. In such a case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree
upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.”
“Article 449. He who builds, plants, or sows in bad faith on
the land of another, loses what is built, planted or sown without
right to indemnity.”
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 219
OWNERSHIP
Right of Accession General Provisions
for, elsewise stated, “where the true owner himself is the builder of works on
his own land, the issue of good faith or bad faith is entirely irrelevant.”
In fine, petitioner is not in a valid position to invoke the provisions of
Article 448 of the Civil Code. The Court commiserates with petitioner in
its present predicament; upon the other hand, respondent, too, is entitled to
his rights under the law, particularly after having long been deprived of the
enjoyment of his property. Nevertheless, the Court expresses hope that the
parties will still be able to come up with an arrangement that can be mutually
suitable and acceptable to them.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No.
56001 is AFFIRMED. No costs.
SO ORDERED.
[47.4] Option to Appropriate
[47.4.1] What Indemnity Consists Of
If the landowner chooses to acquire the building, he must pay
the builder the indemnities provided for in Articles 546 and 548 of the
New Civil Code.268 In short, the landowner must pay the necessary and
useful expenses, and in the proper case, expenses for pure luxury or
mere pleasure.269
[47.4.2] Basis of Indemnity
What shall be the basis of the indemnity to be paid by the landowner?
In Javier v. Concepcion, Jr.,270 the Supreme Court pegged the value of
the useful improvements consisting of various fruits, bamboos, a house
and camarin made of strong materials based on the market value of the
said improvements. In Sarmiento v. Agana,271 despite the finding that
the useful improvement, a residential house, was built in 1967 at a cost
of between Eight thousand pesos (P8,000.00) to Ten thousand pesos
(P10,000.00), the landowner was ordered to reimburse the builder in the
amount of Forty thousand pesos (P40,000.00), the value of the house
at the time of the trial. In the same way, the landowner was required to
268
Art. 448, Civil Code.
269
Ballatan v. CA, supra, at p. 46.
270
94 SCRA 212 (1979).
271
Supra.
218 PROPERTY
“Article 450. The owner of the land on which anything has
been built, planted or sown in bad faith may demand the demolition
of the work, or that the planting or sowing be removed, in order
to replace things in their former condition at the expense of the
person who built, planted or sowed; or he may compel the builder
or planter to pay the price of the land, and the sower the proper
rent.”
A builder in good faith can, under the foregoing provisions, 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 much choose one. He cannot, for instance,
compel the owner of the building to instead remove it 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.
Good faith, here understood, is an intangible and abstract quality with
no technical meaning or statutory definition, and it encompasses, among other
things, an honest belief, the absence of malice and the absence of design to
defraud or to seek an unconscionable advantage. An individual’s personal
good faith is a concept of his own mind and, therefore, may not conclusively
be determined by his protestations alone. It implies honesty of intention, and
freedom from knowledge of circumstances which ought to put the holder
upon inquiry. The essence of good faith lies in an honest belief in the validity
of one’s right, ignorance of a superior claim, and absence of intention to
overreach another. Applied to possession, one is considered in good faith if he
is not aware that there exists in his title or mode of acquisition any flaw which
invalidates it.
Given the findings of both the trial court and the appellate court, it should
be evident enough that petitioner would fall much too short from its claim of
good faith. Evidently, petitioner was quite aware, and indeed advised, prior to
its acquisition of the land and building from Ignacio that a part of the building
sold to it stood on the land not covered by the land conveyed to it.
Equally significant is the fact that the building, constructed on the land
by Ignacio, has in actuality been part of the property transferred to petitioner.
Article 448, of the Civil Code refers to a piece of land whose ownership is
claimed by two or more parties, one of whom has built some works (or sown or
planted something) and not to a case where the owner of the land is the builder,
sower, or planter who then later loses ownership of the land by sale or otherwise
220 PROPERTY
pay the “present value” of the house, a useful improvement, in the case
of De Guzman v. Dela Fuente.272
In Pecson v. Court of Appeals,273 the Supreme Court categorically
held that “it is the current market value of the improvements which
should be made the basis of reimbursement.” The Court explained —
The objective of Article 546 of the Civil Code is to
administer justice between the parties involved. In this
regard, this Court had long ago stated in Rivera v. Roman
Catholic Archbishop of Manila (40 Phil. 717 [1920]) that the
said provision was formulated in trying to adjust the rights
of the owner and possessor in good faith of a piece of land,
to administer complete justice to both of them in such a way
as neither one nor the other may enrich himself of that which
does not belong to him. Guided by this precept, it is therefore
the current market value of the improvements which should
be made the basis of reimbursement. A contrary ruling would
unjustly enrich the private respondents who would otherwise
be allowed to acquire a highly valued income-yielding four
unit apartment building for a measly amount. Consequently,
the parties should therefore be allowed to adduce evidence
on the present market value of the apartment building upon
which the trial court should base its finding as to the amount
of reimbursement to be paid by the landowner.274
[47.4.3] Pending Reimbursement, Builder Has Right of
Retention
In addition to the right of the builder in good faith to be paid
the value of his improvement, Article 546 of the New Civil Code
gives him the corollary right of retention of the property until he is
indemnified by the owner of the land.275 The builder in good faith may
not, therefore, be required to pay rentals.276 This is so because the right
to retain the improvements while the corresponding indemnity is not
272
55 Phil. 501 (1930).
273
Supra, at p. 416.
274
At p. 416.
275
Filipinas Colleges, Inc. v. Garcia Timbang, et al., 106 Phil. 247, 253 (1959).
276
Miranda v. Fadullon, 97 Phil. 801, 806 (1955).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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paid implies the tenancy or possession in fact of the land on which it is
built, planted or sown.277 However, Article 448 of the New Civil Code,
in relation to Article 546, which provides for full reimbursement of
useful improvements and retention of the premises until reimbursement
is made, applies only to a possessor in good faith, i.e., one who builds
on a land in the belief that he is the owner thereof. It does not apply to
a mere lessee, otherwise, it would always be in his power to “improve”
his landlord out of the latter’s property.278
While the law aims to concentrate in one person the ownership of
the land and the improvements thereon in view of the impracticability
of creating a state of forced co-ownership, it guards against unjust
enrichment insofar as the good faith builder’s improvements are
concerned.279 The right of retention is considered as one of the measures
devised by the law for the protection of builders in good faith.280 Its object
is to guarantee full and prompt reimbursement as it permits the actual
possessor to remain in possession while he has not been reimbursed (by
the person who defeated him in the case for possession of the property)
for those necessary expenses and useful improvements made by him
on the things possessed.281 Accordingly, a builder in good faith cannot
be compelled to pay rentals during the period of retention282 nor be
disturbed in his possession by ordering him to vacate. In addition, the
owner of the land is prohibited from offsetting or compensating the
necessary and useful expenses with the fruits received by the builder-
possessor in good faith.283 Otherwise, the security provided by law
would be impaired. This is so because the right to the expenses and the
right to the fruits both pertain to the possessor, making compensation
juridically impossible; and one cannot be used to reduce the other.284
277
Pecson v. CA, supra, at p. 416.
278
Chua v. CA, 301 SCRA 356, 364 (1999).
279
Nuguid v. CA, 452 SCRA 243, 252 (2005), citing Ortiz v. Kayanan, 92 SCRA 146, 159
(1979).
280
Id.
281
Id.
282
Id., citing San Diego v. Hon. Montesa, 6 SCRA 208, 210 (1962).
283
Id.
284
Id.
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Right of Accession General Provisions
under Article 445. The case of Bernardo v. Bataclan, 66 Phil.
590 cited by appellants is no authority for this conclusion.
Although it is true it was declared therein that in the event
of the failure of the builder to pay the land, after the owner
thereof has chosen this alternative, the builder’s right of
retention provided in Article 546 is lost, nevertheless there
was nothing said that as a consequence thereof, the builder
loses entirely all rights over his own building. x x x”290
What then is the recourse or remedy left to the parties in such
eventuality where the builder fails to pay the value of the land? While
the Code is silent on this point, guidance may be derived from the
decisions of the Supreme Court in the cases of Miranda v. Fadullon,291
Ignacio v. Hilario,292 and Bernardo v. Bataclan.293
In Miranda v. Fadullon, supra, the Court suggested —
“xxx A builder in good faith may not be required to
pay rentals. He has a right to retain the land on which he
has built in good faith until he is reimbursed the expenses
incurred by him. Possibly he might be required to pay rental
only when the owner of the land chooses not to appropriate
the improvement and requires the builder in good faith to
pay for the land, but that the builder is unwilling or unable
to buy the land, and then they decide to leave things as they
are and assume the relation of lessor and lessee, and should
they disagree as to the amount of the rental then they can go
to the court to fix that amount. xxx.”294
Note, however, that in this situation a “forced lease” may not be
resorted to since such remedy is available only in situations where the
landowner cannot oblige the builder or planter to pay the price of the
land because its value is considerably more than that of the building or
trees. But if the landowner can compel the builder or planter to pay the
price of the land because its value is not considerably more than that of
290
At p. 253.
291
97 Phil. 801 (1955).
292
76 Phil. 605 (1946).
293
66 Phil. 590.
294
At p. 806, cited in Filipinas Colleges, Inc. v. Garcia Timbang, et al., at pp. 253-254.
221 222 PROPERTY
[47.4.4] Time of Transfer of Ownership
In Bataclan v. CFI,285 the Supreme Court ruled that the ownership
of the building does not pass to the landowner until after the payments
mentioned under Articles 546 and 548 has been given to the builder.
[47.5] Option To Sell the Land
[47.5.1] Option To Compel Builder or Planter To Buy the
Land
If the landowner elected to compel the builder or planter to pay
the price of the land, then said builder or planter must do so, unless the
value of land is considerably more than that of the building or trees,
in which case, the builder or planter must pay reasonable rent if the
landowner does not choose to appropriate the building or trees.286 If
the parties cannot come to terms over the conditions of the lease, the
courts must fix the terms thereof.287 Note that this option is available
only against the builder or planter because with respect to the sower,
the landowner can only compel him to pay the proper rent,288 in case the
landowner does not choose to appropriate the crops.
[47.5.2] Remedy If Builder or Planter Refuses To Pay
In the event the builder or the planter refuses to pay the price of
the land (on the assumption that said price is not considerably more than
the value of the building or trees), will the landowner automatically
become the owner of the improvements without paying any indemnity?
This question was answered in the negative by the Supreme Court in
the case of Filipinas Colleges, Inc. v. Garcia Timbang, et al.,289 where
the Court held —
“x x x. There is nothing in the language of these two
articles, 448 and 546, which would justify the conclusion of
appellants that, upon the failure of the builder to pay the value
of the land, when such is demanded by the landowner, the
latter becomes automatically the owner of the improvement
285
61 Phil. 428.
286
Art. 448, Civil Code.
287
Ibid.
288
Art. 448, Civil Code.
289
106 Phil. 247 (1959).
223 224 PROPERTY
the building or trees and the builder or planter fails to pay such price,
the parties may agree to assume the relation of lessor and lessee — but
they must do so voluntarily.
Should the parties do not agree to leave things as they are and to
assume the relation of lessor and lessee, another remedy is suggested
in the case of Ignacio v. Hilario, supra, wherein the Court held that the
owner of the land is entitled to have the improvement removed when
after having chosen to sell his land to the other party, i.e., the builder
in good faith, fails to pay for the same.295 In this situation, the builder’s
right of retention provided in Article 546 is lost.296
A further remedy is indicated in the case of Bernardo v. Bataclan,
supra, where the Court approved the sale of the land and improvement
in a public auction applying the proceeds thereof first to the payment of
the value of the land and the excess, if any, was ordered to be delivered
to the owner of the house in payment thereof.297
[47.5.3] Basis in Determining Price of the Land
In Ballatan v. Court of Appeals,298 it was ruled that in the event the
landowner elects to sell the land to the builder in good faith, the price
must be fixed at the prevailing market value at the time of payment. In
the event of the failure of the builder to pay the land, after the owner
thereof has chosen this alternative, the builder’s right of retention
provided in Article 546 is also lost.299
Ballatan v. CA
304 SCRA 37 (1999)
In this case, the parties are owners of adjacent lots — lots 24, 25, 26
and 27. Lot 24 is co-owned by Eden Ballatan and spouses Betty Martinez and
Chong Chy Ling. Lots 25 and 26 are owned by Gonzalo Go, Sr. while lot 27 is
owned by Li Ching Yao. Li Ching Yao built his house on his lot before any of
the parties did. He constructed his house in 1982. Li Ching Yao was not aware
that when he built his house a portion thereof encroached on Go’s adjoining
295
See Filipinas Colleges, Inc. v. Garcia Timbang, et al., at p. 254.
296
See Bernardo v. Bataclan, supra.
297
See Filipinas Colleges, Inc. v. Garcia Timbang, et al., at p. 254.
298
304 SCRA 37 (1999).
299
Bernardo v. Bataclan, supra.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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land. In 1983, the son of Gonzalo Go, Winston, constructed his house on lot
no. 25. At the time of construction, Winston was not aware that he encroached
on a portion of land owned by Ballatan and the spouses Betty Martinez and
Chong Chy Ling. In 1985, Ballatan constructed her house on lot 24. During
the construction, she noticed that Go encroached on her property. Since then,
the parties had been aware of the encroachments on each other’s properties.
Apparently, it was the erroneous survey of the geodetic engineer commissioned
by the subdivision developer that caused these discrepancies. In determining
the rights of the parties, the Supreme Court applied Article 448 of the Civil
Code since all the parties had acted in good faith. The Court ruled —
“xxx petitioners (Ballatan and the spouses Betty Martinez and
Chong Chy Ling), as owners of Lot No. 24, may choose to purchase
the improvement made by respondents Go on their land, or sell to
respondents Go the subject portion. If buying the improvement is
impractical as it may render the Go’s house useless, then petitioners
may sell to respondents Go that portion of Lot No. 24 on which
their improvement stands. If the Go’s are unwilling or unable to
buy the lot, then they must vacate the land and, until they vacate,
they must pay rent to petitioners. Petitioners, however, cannot
compel respondents Go to buy the land if its value is considerably
more than the portion of their house constructed thereon. If the
value of the land is much more than the Go’s improvement, then
respondents Go must pay reasonable rent. If they do not agree on
the terms of the lease, then they must go to court to fix the same.
In the event that petitioners elect to sell to respondents
Go the subject portion of their lot, the price must be fixed at the
prevailing market value at the time of payment. The Court of
Appeals erred in fixing the price at the time of taking, which is
the time the improvements were built on the land. The time of
taking is determinative of just compensation in expropriation
proceedings. The instant case is not for expropriation. It is not a
taking by the State of private property for a public purpose upon
payment of just compensation. 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.
Article 448 and the same conditions above-stated also
apply to respondents Go as owners and possessors of their land
and respondent Li Ching Yao as builder of the improvement that
encroached on thirty-seven (37) square meters of respondents Go’s
land.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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Right of Accession General Provisions
ungathered (pending) at the time of recovery of possession of the land,
for if said fruits have already been separated from the land, the principle
of accesion continua no longer applies. Instead, Article 443 of the New
Civil Code will apply, in which case, the planter or sower (in bad faith)
can be compelled to deliver to the landowner in good faith the fruits he
has gathered, or their value, minus the expenses incurred by the former
in their production, gathering and preservation.
[48.2.2] Right of Remotion
The second right or remedy of the landowner is to exercise the
right of remotion pursuant to Article 450, i.e., he can demand that what
has been built, planted or sown in bad faith on his land be removed or
demolished and that the land be restored to its original condition — all
at the expense of the builder, planter or sower — plus damages suffered
by the landowner pursuant to Article 451.
Santos v. Mojica
26 SCRA 703 (1969)
In this case, eleven brothers and sisters, all surnamed Allanigue, brought
an action against their sister, Lorenzana Allanigue, her husband, Simeon
Santos, Maria San Agustin and Felicidad San Agustin for partition of a 360-
square meter lot and for the annulment of certain conveyances involving the
same. After the spouses Simeon and Lorenzana Santos were summons, their
son (Leonardo Santos) built and reconstructed his house into a bigger one.
The plaintiffs eventually won the case. When the judgment became final and
executory, a writ of execution was issued ordering the defendants to vacate the
lot and deliver the same to the plaintiffs. Leonardo refused to vacate. May his
house be demolished? The Supreme Court ruled —
“1. Petitioner Leonardo Santos is bound by the judgment
in Civil Case No. 217-R because he is a successor-in-interest of his
parents, Simeon Santos and Lorenzana Allanigue, defendants in
Civil Case No. 217-R, and his right, if any, is claimed under them.
Hence, the judgment in said civil case binds not only Simeon Santos
and Lorenzana Allanigue but also their son, Leonardo Santos, who
is their successor-in-interest and who claims under them. The fact
that the sale to Leonardo Santos from his parents was registered, is
of no moment because, as pointed out, he is bound by the judgment
against them.
225 226 PROPERTY
[47.5.4] Rule If Only a Portion of the Land Has Been
Encroached
Article 448 has been applied to improvements or portions of
improvements built by mistaken belief on land belonging to the
adjoining owner.300
§ 48. Landowner In Good Faith; Builder In Bad Faith
[48.1] Concept of Bad Faith
If good faith consists in the belief of the builder that the land he is
building on is his and his ignorance of any defect or flaw in his title,301 a
fortiori, the builder, planter or sower (who is at the same time the owner
of the materials) is deemed to have acted in bad faith if he knows that
the land is not his, or if he has knowledge of any flaw or defect in his
title or mode of acquisition of the land.
[48.2] Legal Consequences; Alternative Rights of the Landowner
If the landowner has acted in good faith, i.e., he was not aware
that something was being built, planted or sown on his land and he
learned about only after it was done, and the builder, planter or sower
(who is at the same time the owner of the materials) has acted in bad
faith, the landowner can exercise any of the following three rights and/
or remedies under Articles 449, 450 and 451:
[48.2.1] Right to Appropriate
He can appropriate what has been built, planted or sown on his
land in bad faith without any obligation to pay indemnity because
Article 449 of the New Civil Code provides that “he who builds, plants
or sows in bad faith on the land of another, loses what is built, planted
or sown without right to indemnity.” And in addition to this right of
“confiscation” of the improvements, he can also demand damages from
the builder, planter or sower in bad faith pursuant to Article 451.
With respect to the fruits, it must be understood that the landowner
can appropriate them without paying indemnity if said fruits are still
300
Ballatan v. CA, supra; Technogas Philippines Manufacturing Corp. v. CA, supra; Depra
v. Dumlao, supra; and Grana and Torralba v. CA, 109 Phil. 260 (1960).
301
Pleasantville Development Corp. v. CA, supra., at p. 18.
227 228 PROPERTY
Leonardo Santos’ house having been built and reconstructed
(after March, 1962) into a bigger one after his predecessors-in-
interests, his parents, had been summoned in 1959 in Civil Case
No. 217-R, he must be deemed a builder in bad faith. As builder
in bad faith he lost the improvement made by him consisting of
the reconstructed house to the owners of the land without right
to indemnity, pursuant to Article 449 of the Civil Code, which
provides:
xxx xxx xxx
The Allanigue brothers and sisters therefore became owners
of the improvements consisting of the house built in bad faith
by Leonardo Santos if they choose to appropriate the accession.
(Articles 445 and 449, Civil Code) However, said owners could
choose instead the demolition of the improvement or building at
the expense of the builder, pursuant to Article 450 of the Civil
Code which in part, provides:
xxx xxx xxx
It is of record in Civil Case No. 217-R that the owners of the
land chose to have the house or improvement demolished pursuant
to their motion for demolition which was granted by respondent
Judge Mojica on December 9, 1965.”
[48.2.3] Right To Compel Payment of the Price of the Land
The third possible right of the landowner is to compel the builder
or planter to pay the price of the land, and the sower the proper rent,
pursuant to Article 450, plus damages under Article 451. There being
no exception provided in the law, it is submitted that the landowner
can exercise this right even if the value of the land is considerably
more than that of the building or trees. But then again, this remedy is
available against the builder and planter only. With respect to the sower,
the landowner may only compel him to pay the proper rent.
[48.3] Limited Rights of Builder, Planter or Sower in Bad Faith
The foregoing rights of the landowner are alternative, i.e., he
can exercise only one of them as his option. But in all cases, “the
builder, planter or sower in bad faith is entitled to reimbursement for
the necessary expenses of preservation of the land,”302 otherwise the
302
Art. 452, Civil Code.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 229
OWNERSHIP
Right of Accession General Provisions
landowner would be enriching himself at the expense of the former. A
builder in bad faith has no right, however, to be indemnified for useful
improvements.303 Neither has he any right to remove them.304 The right
given a possessor in bad faith to remove improvements applies only
to improvements for pure luxury or mere pleasure, provided the thing
suffers no injury thereby and the lawful possessor does not prefer to
retain them by paying the value they have at the time he enters into
possession.305
In Lumungo v. Usman,306 it was ruled that a planter in bad faith is
not entitled to be reimbursed for the value of the coconut trees planted
by him as said coconut trees are improvements, not “necessary expenses
of preservation.”
§ 49. Both Acted In Bad Faith
[49.1] Rules That Will Govern If Both Parties Acted In Bad Faith
One basic principle of accesion continua is that the bad faith
of one person neutralizes the bad faith of another and both should be
considered as having acted in good faith. This principle is embodied
in the first paragraph of Article 453 of the New Civil Code, which
provides:
“Art. 453. If there was bad faith, not only on the part
of the person who built, planted or sowed on the land of
another, but also on the part of the owner of such land, the
rights of one and the other shall be the same as though both
had acted in good faith.”
Therefore, Article 448 of the New Civil Code governs this situation
such that whatever has been discussed therein shall likewise apply in
this situation.
[49.2] Bad Faith of the Landowner
It is understood that there is bad faith on the part of the landowner
whenever the act was done with his knowledge and without opposition
303
Sabido v. CA, 165 SCRA 498 (1988).
304
MWSS v. CA, 143 SCRA 623 (1986).
305
Ibid., citing Art. 549, Civil Code.
306
25 SCRA 255, 261 (1968).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 231
OWNERSHIP
Right of Accession General Provisions
§ 51. Building on Another’s Land Using Another’s Materials
[51.1] Situation Contemplated in Art. 455
Article 455 of the New Civil Code contemplates of a situation
where the builder, planter or sower has built, planted or sown on
another’s land using materials belonging to another person. In such
a situation, there are actually three persons whose good faith or bad
faith must all be taken into account, namely: (1) the landowner; (2) the
builder, planter or sower; and (3) the owner of the materials.
To simplify the resolution of this “controversial” situation, Article
455 offers to settle first the right of the owner of the materials whose
only interest, of course, is the recovery of the value of his materials.
Such recovery, however, shall depend on whether he acted in good faith
or in bad faith.
[51.2] If the Owner of the Materials Acted In Bad Faith
[51.2.1] He Loses His Materials Without Indemnity
If the owner of the materials acted in bad faith, he loses his
materials without any right whatsoever. This is so because if he knew
that his materials were being used by another but did not object thereto,
it is as if he was the one who built, planted or sowed with his materials
in bad faith on the land of another. The builder, planter or sower would
be considered merely an agent of the owner of the materials. Therefore,
the provisions of Article 449 of the Civil Code will apply by analogy, in
which case, he loses what he has built, planted or sown without right to
indemnity. He is even liable for damages.309 The only exception to this
rule is if all the parties acted in bad faith because then their rights would
be governed as if they were in good faith.
[51.2.2] Rights of the Landowner
If the owner of the materials acted in bad faith, the landowner
can claim what has been built, planted or sown on his land without any
obligation to indemnify the owner of the materials. This is in pursuance
to the principles stated in Articles 449 and 445 of the Civil Code.
309
Art. 451, NCC.
230 PROPERTY
on his part.307 Thus, when one in possession of property of another erects
buildings and makes other improvements thereon in bad faith, but with
knowledge of the owner who does not object, the case must be treated
as if both parties had acted in good faith.308
§ 50. Landowner In Bad Faith; Builder In Good Faith
Article 454 of the New Civil Code provides: “When the landowner
acted in bad faith and the builder, planter or sower proceeded in
good faith, the provisions of Art. 447 shall apply.” As a consequence,
whatever has been discussed under Article 447 shall likewise apply in
this situation.
Article 447 governs the case of building, planting or sowing on
one’s own land with materials of another either in good faith or in bad
faith. The reason why said article applies may be explained as follows:
that if the landowner knew that something was being built, planted or
sown on his land by another and he did not interpose any objection
thereto, it is as if he was the one building, planting or sowing in bad
faith on his own land with materials belonging to another, using the
owner of the materials as his worker. As a consequence, and pursuant
to the provisions of Article 447, the owner of the materials (who is at
the same time the builder, planter or sower in this case) acquires two
alternative rights, namely: (1) to demand the value of his materials, plus
damages; or (2) to demand the return of his materials in any event, plus
damages.
Art. 455. If the materials, plants or seeds belong to a third person
who has not acted in bad faith, the owner of the land shall answer sub-
sidiarily for their value and only in the event that the one who made use of
them has no property with which to pay.
This provision shall not apply if the owner makes use of the rights
granted by Article 450. If the owner of the materials, plants or seeds has
been paid by the builder, planter or sower, the latter may demand from the
landowner the value of the materials and labor. (365a)
Art. 456. In the cases regulated in the preceding articles, good faith
does not necessarily exclude negligence, which gives right to damages
under Article 2176. (n)
307
Art. 453, 2nd par., Civil Code.
308
Municipality of Oas v. Roa, 7 Phil. 20.
232 PROPERTY
[51.2.3] Rights of the Builder, Planter or Sower
The rights of the builder, planter or sower shall be determined
depending on his good faith or bad faith.
(a) If he acted in good faith. — If he acted in good faith in that he
thought honestly that both the land and the materials belonged to him,
he may claim from the landowner a reasonable compensation for his
labor. This is based on the principle that no person should be unjustly
enriched at the expense of another.
(b) If he acted in bad faith. — If he acted in bad faith in that he
knew that the materials he was using belonged to somebody else or that
he had no right to the land, then he is not entitled to anything. He may
instead be made to pay damages to the landowner.
[51.3] If the Owner of the Materials Acted In Good Faith
[51.3.1] He Must Be Reimbursed For the Value of His
Materials
If the owner of the materials acted in good faith, in that he did
not know that his materials were used by another, the law says that
he is entitled to recover the value of his materials. This is expressly
recognized in Article 455 of the New Civil Code.
[51.3.2] Builder, Planter or Sower Is Primarily Liable
The builder, planter or sower is primarily liable to make such
payment to the owner of the materials310 — without damages if he
(builder, planter or sower) acted in good faith — and with damages if
he acted in bad faith. If such payment is made by the builder, planter
or sower, he becomes the owner of the materials and the case would
be the same as the second “controversial case” discussed in supra §§
46-50 — that of building, planting or sowing with one’s own materials
on the land of another. Hence, to determine the rights and obligations
of the builder, planter or sower and the landowner against each other,
we will again apply the rules in the following four situations: (1) if
both the landowner and the builder, planter or sower acted in good faith
(Art. 448); (2) if the landowner acted in good faith and the builder,
planter or sower acted in bad faith (Arts. 449, 450 and 451); (3) if both
310
Art. 455, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
OWNERSHIP
Right of Accession General Provisions
parties acted in bad faith (Art. 448, in relation to Art. 453); and (4) if the
landowner acted in bad faith and the builder, planter or sower acted in
good faith (Art. 447, in relation to Art. 454).
[51.3.3] Subsidiary Liability of the Landowner
The landowner is subsidiarily liable for the payment of the value
of the materials.311 This subsidiary liability, however, of the owner of
the land is only available if the following conditions are met: (1) in
case of insolvency of the builder, planter or sower; and (2) the owner of
the land appropriates the building, planting or sowing.312 A fortiori, the
owner of the land is not liable to the owner of the materials if the former
chooses to order the demolition of the construction or the removal of
the building, planting or sowing which he has the right to do in case
the builder, planter or sower acted in bad faith.313 If the landowner pays
for the value of the materials, he becomes the owner thereof. In such a
situation, he may demand damages from the builder, planter or sower
if the latter acted in bad faith, or pay the builder, planter or sower a
reasonable compensation for his labor if the latter acted in good faith.
B. NATURAL ACCESSION
§ 52. Natural Accession
[52.1] Four Forms
As discussed in supra §40.2, there are four forms of natural
accession:
(1) Alluvion;
(2) Avulsion;
(3) Natural change of course of river; and
(4) Formation of island.
Art. 457. To the owners of lands adjoining the banks of rivers belong
the accretion which they gradually receive from the effects of the current
of the waters. (366)
311
Art. 455, NCC.
312
Id.
313
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
OWNERSHIP
Right of Accession General Provisions
The reason behind the law giving the riparian owner the right
to any land or alluvion deposited by a river is to compensate him for
the danger of loss that he suffers because of the location of his land.320
If estates bordering on rivers are exposed to floods and other evils
produced by the destructive force of the waters and if by virtue of lawful
provisions, said estates are subject to encumbrances and various kinds
of easements, it is proper that the risk or danger which may prejudice
the owners thereof should be compensated by the right of accretion.321
[53.4] Requisites of Alluvion
Accretion as a mode of acquiring property under Article 457
requires the concurrence of the following requisites: (1) that the
accumulation of soil or sediment be gradual and imperceptible; (2) that
it be the result of the action of the waters of the river; and (3) that the
land where the accretion takes place is adjacent to the banks of the
river.322 These are called the rules on alluvion which if present in a case,
give to the owners of lands adjoining the banks of rivers or streams
any accretion gradually received from the effects of the currents of
waters.323
[53.4.1] First Requisite
A sudden and forceful action like that of flooding is hardly the
alluvial process contemplated under Article 457 of the New Civil Code.
It is the slow and hardly perceptible accumulation of soil deposits
that the law grants to the riparian owner.324 This is what distinguishes
alluvion from avulsion. In alluvion, the deposit of soil is gradual and
imperceptible; whereas in avulsion, it is sudden and abrupt.
[53.4.2] Second Requisite
The requirement that the deposit should be due to the effect of the
current of the river is indispensable. This excludes from Article 457 of
the New Civil Code all deposits caused by human intervention. Alluvion
320
Republic v. CA, 132 SCRA 514 (1984).
321
Id.
322
Heirs of Emiliano Navarro v. IAC, supra., at p. 85; Vda. De Nazareno v. CA, 257 SCRA
589 (1996); Meneses v. CA, 246 SCRA 374 (1995); Reynante v. CA, 207 SCRA 794 (1992); Bina-
lay v. Manalo, 195 SCRA 374 (1991).
323
Vda. De Nazareno v. CA, supra., at p. 597.
324
Binalay v. Manalo, supra., at p. 386.
233 234 PROPERTY
Art. 458. The owners of estates adjoining ponds or lagoons do not
acquire the land left dry by the natural decrease of the waters, or lose that
inundated by them in extraordinary floods. (367)
§53. Alluvion
[53.1] Definition
Alluvium or alluvion has been defined as the gradual and imper-
ceptible addition to the banks of rivers314 or as the increment which
lands abutting rivers gradually receive as a result of the current of the
waters.315 Alluvium is the soil deposited on the estate fronting the river
bank, while accretion is the process whereby the soil is deposited.316
[53.2] Riparian Owners Distinguished From Littoral Owners
The owner of the estate fronting the river bank is called the
riparian owner. Riparian owners are, strictly speaking, distinct from
littoral owners, the latter being owners of lands bordering the shore of
the sea or lakes or other tidal waters.317
[53.3] Rule on Alluvion
The rule on alluvion is embodied in Article 457 of the New Civil
Code which states that “to the owners of lands adjoining the banks
of rivers belong the accretion which they gradually receive from the
effects of the current of the waters.”
The riparian land, or the land adjoining the bank of the river is the
principal and the alluvial deposits accumulated gradually along such
riparian land constitute the accessory. The alluvium, by mandate of
Article 457 of the New Civil Code, is automatically owned by the ripar-
ian owner from the moment the soil deposit can be seen.318 The same
rule applies even if the riparian land was bought under installment plan,
in which case, the benefits of accretion belong to the purchaser even
when said accretion took place before the last installment was paid.319
314
3 Manresa, 6th ed., 235.
315
2 Castan, 8th ed., 218.
316
Heirs of Emiliano Navarro v. IAC, 268 SCRA 74, 85 (1997).
317
Id., at p. 85, citing Santulan v. The Executive Secretary, 80 SCRA 548, 556 (1977).
318
Id., at pp. 85-86.
319
Assistant Executive Secretary for Legal Affairs of the Office of the President v. CA, 169
SCRA 27 (1989).
235 236 PROPERTY
must be the exclusive work of nature.325 Hence, the riparian owner does
not acquire the additions to his land caused by special works expressly
intended or designed to bring about accretion.326 Thus, in Tiongco v.
Director of Lands, et al.,327 where the land was not formed solely by the
natural effect of the water current of the river bordering said land but is
also the consequence of the direct and deliberate intervention of man,
it was deemed a man-made accretion and, as such, part of the public
domain.328
Vda. de Nazareno v. CA
257 SCRA 598 (1996)
In this case, Antonio Nazareno, the predecessor-in-interest of
Desamparado Vda. De Nazareno, caused the approval by the Bureau of Lands
of the survey plan designated as Plan Csd-106-00571 with a view to perfecting
his title over the accretion area being claimed by him. The accretion was formed
by the dumping of boulders, soil and other filling materials on portions of the
Balacanas Creek and the Cagayan River bounding Nazareno’s land. Before
the approved survey plan could be released to Nazareno, it was protested by
his lessees. Acting upon such protest, the Regional Director of the Bureau of
Lands ordered the amendment of the survey plan by segregating therefrom
the areas occupied by the lessees. Thereafter, the Director of Lands ordered
Nazareno to vacate the portions adjudicated to the lessees. Upon the death of
Antonio, Vda. De Nazareno went to court to question the action taken by the
Bureau of Lands. The resolution of this case hinges on the question of whether
or not the subject land is public land. Vda. De Nazareno claims that the subject
land is private land being an accretion on Antonio Nazareno’s titled property,
applying Article 457 of the Civil Code. The Supreme Court HELD: Since the
subject land was the direct result of the dumping of sawdust by the Sun Valley
Lumber Co., the accretion was man-made, hence, Art. 457 does not apply.
Ergo, the subject land is part of the public domain.
Republic v. CA
132 SCRA 514 (1984)
In this case, the Tancincos were the registered owners of a parcel of
land bordering on the Meycauayan and Bocaue rivers. In 1973, they filed an
application for the registration of three lots adjacent to their fishpond property.
325
Republic v. CA, 132 SCRA 514, 520 (1984).
326
Id.
327
16 C.A. Rep. 211.
328
Cited in Vda. De Nazareno v. CA, supra., at pp. 598-599.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
OWNERSHIP
Right of Accession General Provisions
The Assistant Provincial Fiscal opposed the application. Upon the advise of the
Commissioner appointed by the court, the applicants withdrew their application
with respect to one of the lots. Thereafter, the lower court rendered a decision
granting the application. The Republic appealed to the Court of Appeals which
affirmed the decision of the lower court in toto. The Republic appealed to the
Supreme Court. The Republic claimed that there was no accretion to speak of
under Article 457 of the New Civil Code because what actually happened was
that the Tancincos simply transferred their dikes further down the river bed of
the Meycauayan River, and thus, if there was any accretion to speak of, it was
man-made and artificial and not the result of the gradual and imperceptible
sedimentation by the waters of the river. In ruling for the Republic, the Supreme
Court held —
Article 457 of the New Civil Code provides:
“To the owners of lands adjoining the banks of rivers belong
the accretion which they gradually receive from the effects of the
current of the waters.”
The above-quoted article requires the concurrence of three
requisites before an accretion covered by this particular provision
is said to have taken place. They are: (1) that the deposit be gradual
and imperceptible; (2) that it be made through the effects of the
current of the water; and (3) that the land where accretion takes
place is adjacent to the banks of rivers.
The requirement that the deposit should be due to the effect
of the current of the river is indispensable. This excludes from
Art. 457 of the New Civil Code all deposits caused by human
intervention. Alluvion must be the exclusive work of nature. In
the instant case, there is no evidence whatsoever to prove that
the addition to the said property was made gradually through
the effects of the current of the Meycauayan and Bocaue rivers.
We agree with the observation of the Solicitor General that it is
preposterous to believe that almost four (4) hectares of land came
into being because of the effects of the Meycauayan and Bocaue
rivers. The lone witness of the private respondents who happens
to be their overseer and whose husband was first cousin of their
father noticed the four hectare accretion to the twelve hectare
fishpond only in 1939. The respondents claim that at this point in
time, accretion had already taken place. If so, their witness was
incompetent to testify to a gradual and imperceptible increase to
their land in the years before 1939. However, the witness testified
that in that year, she observed an increase in the area of the original
fishpond which is now the land in question. If she was telling the
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
OWNERSHIP
Right of Accession General Provisions
The lower court cannot validly order the registration of Lots
1 and 2 in the names of the private respondents. These lots were
portions of the bed of the Meycauayan river and are therefore
classified as property of the public domain under Article 420,
paragraph 1 and Article 502, paragraph 1 of the Civil Code of
the Philippines. They are not open to registration under the Land
Registration Act. The adjudication of the lands in question as
private property in the names of the private respondents is null
and void.
[53.4.3] Third Requisite
Under Article 457, the accretion must take place on a land
adjacent to the banks of the river. Note, however, that while Article
457 mentions only of accretions on the banks of rivers, this must be
interpreted in conjunction with Article 84 of the Spanish Law of Waters
which provides:
“Accretions deposited gradually upon land contiguous
to creeks, streams, rivers and lakes, by accessions or
sediments from the water thereof, belong to the owners of
such lands.”
But with respect to a creek, it must have regular and continuous
current. The rule does not apply to canals or esteros which are not creeks
and have no current but are simply drainage system.329
In the case of Ignacio v. Director of Lands and Valeriano,330 the
Supreme Court considered the Manila Bay as a sea for purposes of
determining which law on accretion is to be applied. Hence, an accretion
that takes place on the shore of the Manila Bay, it being an inlet or an
arm of the sea, is part of the public domain pursuant to Article 4 of the
Spanish Law of Waters of 1866, which provides as follows:
“Lands added to the shores by accretions and alluvial
deposits caused by the action of the sea, form part of the
public domain. When they are no longer washed by the water
of the sea and are not necessary for purposes of public utility,
329
Guison v. City of Manila, (CA) 40 O.G. 3835; Ronquillo v. CA, 195 SCRA 433, 443
(1991).
330
108 Phil. 335 (1960).
237 238 PROPERTY
truth, the accretion was sudden. However, there is evidence that
the alleged alluvial deposits were artificial and man-made and not
the exclusive result of the current of the Meycauayan and Bocaue
rivers. The alleged alluvial deposits came into being not because
of the sole effect of the current of the rivers but as a result of the
transfer of the dike towards the river and encroaching upon it. The
land sought to be registered is not even dry land cast imperceptibly
and gradually by the river’s current on the fishpond adjoining it.
It is under two meters of water. The private respondents’ own
evidence shows that the water in the fishpond is two meters deep
on the side of that pilapil facing the fishpond and only one meter
deep on the side of the pilapil facing the river.
The reason behind the law giving the riparian owner the
right to any land or alluvion deposited by a river is to compensate
him for the danger of loss that he suffers because of the location
of his land. If estates bordering on rivers are exposed to floods
and other evils produced by the destructive force of the waters
and if by virtue of lawful provisions, said estates are subject to
encumbrances and various kinds of easements, it is proper that the
risk or danger which may prejudice the owners thereof should be
compensated by the right of accretion. (Cortes v. City of Manila,
10 Phil. 567). Hence, the riparian owner does not acquire the
additions to his land caused by special works expressly intended
or designed to bring about accretion. When the private respondents
transferred their dikes towards the river bed, the dikes were meant
for reclamation purposes and not to protect their property from the
destructive force of the waters of the river.
We agree with the submission of the Solicitor General
that the testimony of the private respondents’ lone witness to the
effect that as early as 1939 there already existed such alleged
alluvial deposits, deserves no merit. It should be noted that the
lots in question were not included in the survey of their adjacent
property conducted on May 10, 1940 and in the Cadastral Survey
of the entire Municipality of Meycauayan conducted between
the years 1958 to 1960. The alleged accretion was declared for
taxation purposes only in 1972 or 33 years after it had supposedly
permanently formed. The only valid conclusion therefore is that
the said areas could not have been there in 1939. They existed only
after the private respondents transferred their dikes towards the
bed of the Meycauayan river in 1951. What private respondents
claim as accretion is really an encroachment of a portion of the
Meycauayan river by reclamation.
239 240 PROPERTY
or for the establishment of special industries, or for the coast
guard service, the Government shall declare them to be the
property of the owner of the estates adjacent thereto and as
increment thereof.”
The Laguna de Bay, on the other hand, is a lake, the accretion
on which, by the express mandate of Article 84 of the Spanish Law
of Waters cited above, belongs to the owners of the land contiguous
thereto.331
Heirs of Emiliano Navarro v. IAC
268 SCRA 74 (1997)
Sometime in 1960, Sinfroso Pascual, the predecessor-in-interest of the
heirs of Emiliano Navarro, filed an application to register and confirm his title
to a parcel of land situated in Sibocan, Balanga, Bataan, described in Plan Psu-
175181 and said to have an area of 146,611 square meters. Pascual claimed
that this land is an accretion to his property situated in Barrio Perto Rivas,
Balanga, Bataan. It is bounded on the eastern side by the Talisay River, on the
western side by the Bulacan River, on the northern side by the Manila Bay. The
Director of Lands opposed the application contending that the subject land is
part of the public domain. The evidence, however, shows that the accretion
took place on the northern portion of Pascual’s land which is adjacent to the
Manila Bay. It was — HELD: The third requisite of accretion, which is, that the
alluvion is deposited on the portion of claimant’s land which is adjacent to the
river bank, is lacking. The claimant’s own tract of land where the accretion has
taken place adjoins the Manila Bay, which is not a river but a sea. The disputed
land, thus, is not an accretion on a river bank but on a sea bank, or on what used
to be the foreshore of Manila Bay. As such, the applicable law is not Art. 457 of
the Civil Code but Art. 4 of the Spanish Law of Waters of 1866 which provides
that “lands added to the shores by accretions and alluvial deposits caused by
the action of the sea, form part of the public domain.”
Government of the P.I. v. Colegio de San Jose
53 Phil. 423 (1929)
The plaintiff opposed the registration by defendant of a parcel of land
which borders the Laguna de Bay. The plaintiff claimed that the parcel of land
belonged to the public domain. According to the evidence, the waters of the
331
Government of the P.I. v. Colegio de San Jose, 53 Phil. 423 (1929); Republic v. CA, 131
SCRA 532 (1984).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 241
OWNERSHIP
Right of Accession General Provisions
Laguna de Bay receded from the land in question but during rainy season the
land was flooded by its water. Inasmuch as under the Civil Code, the owners
of tenements bordering on ponds or lagoons do not acquire the land left dry by
the natural decrease of the waters, then it is of primary importance to determine
whether the body of water called the Laguna de Bay is naturally and legally
a lake or a lagoon. It was — HELD: Laguna de Bay is a body of fresh water
formed in depressions of the earth; it contains fresh water coming from rivers
and brooks or springs, and is connected with Manila Bay by the Pasig River. It
is a lake. Lakes and their beds belong to the public domain. The bed of a lake
is the ground covered by its waters at their highest ordinary depth. The waters
of Laguna de Bay at their highest depth reach no further than the north eastern
boundary of the land in question and therefore said land is outside the bed,
and belongs to the defendant, who continues to be the owner of same, even if
accidentally inundated by the waters of the lake. Even if the land in question
had been formed by alluvion, it still belongs to the defendant as owner of the
land which borders on the lake.
[53.5] Right of Riparian Owner to Alluvium Is Ipso Jure
The right of the owners of the bank adjacent to rivers to the
accretion which they receive by virtue of the action of the waters of the
river is ipso jure and there is no need of an action of the owner of the
bank to possess the new addition since it belongs to him by the very fact
of the addition.332
However, such accretion does not automatically become registered
land just because the lot which receives the same is covered by Torrens
title.333 Thus, the accretion to registered land does not preclude acquisition
of the additional area by another person through prescription.334 In
Grande, et al. v. Court of Appeals,335 the Supreme Court explained —
Ownership of a piece of land is one thing; registration
under the Torrens system of that ownership is another.
Ownership over the accretion received by the land adjoining
a river is governed by the Civil Code. Imprescriptibility of
registered land is provided in the registration law. Registration
under the Land Registration and Cadastral Act does not vest
332
Roxas v. Tuason, 9 Phil. 408.
333
Cureg v. IAC, 177 SCRA 313 (1989).
334
Reynante v. CA, 207 SCRA 794, 799-800 (1992).
335
5 SCRA 524, 530 (1962).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 243
OWNERSHIP
Right of Accession General Provisions
§ 54. Avulsion
[54.1] Definition
Avulsion has been defined as the accretion which takes place when
the current of a river, creek or torrent segregates a known portion of
land from an estate on its banks and transfers it to another estate.340 Or,
the accretion taking place in the estate on the bank of a river caused
not by the slow and constant action of the waters but by the violent and
sudden action of a torrent.341
[54.2] Comparison With Alluvion
Alluvion and avulsion share the following similarities: (1) that
they both take place only along the banks of rivers, creeks, streams and
lakes; and (2) that they are caused only by the force of the current of the
waters independently of the act of man. But they differ, as follows:
(1) In alluvion the deposit of soil is gradual; whereas, in avulsion
it is sudden and abrupt;
(2) In alluvion the deposit of soil belongs to the owner of the
property where the same was deposited but in avulsion the owner of
the property from which a part was detached retains the ownership
thereof;
(3) In alluvion, accession takes place immediately upon the
deposit of the soil; whereas, in avulsion the right of accession takes
place only after two years from the attachment or incorporation of the
segregated portion of land to the riparian land and only if its owner fails
to remove the same within said period; and
(4) In alluvion, the soil cannot be identified; in avulsion, the
detached portion can be identified.
In the absence, however, of evidence that the change in the course
of river was sudden or that it occurred through avulsion, the presumption
is that the change was gradual and caused by accretion and erosion.342
340
3 Manresa, 6th ed., 243.
341
2 Castan, 8th ed., 218-219, citing Sanchez Roman.
342
C.N. Hodges v. Garcia, 109 Phil. 133.
242 PROPERTY
or give title to the land, but merely confirms and, thereafter,
protects the title already possessed by the owner, making it
imprescriptible by occupation of third parties. But to obtain
this protection, the land must be placed under the operation
of the registration laws, wherein certain judicial procedures
have been provided.
In the same vein, the registration under the Torrens system does
not protect the riparian owner against the diminution of the area of his
registered land through gradual changes in the course of an adjoining
stream.336
[53.6] Exception to the Rule on Alluvion
Article 458 of the New Civil Code serves as an exception to the
general rule on alluvion.337 It is noteworthy that this article refers only
to ponds and lagoons but is not applicable to a lake since with regard to
a lake the rule of alluvion is applicable in accordance with the Spanish
Law of Waters.338 A lake has been defined as body of water formed in
depressions of the Earth, ordinarily fresh water, coming from rivers,
brooks or springs and connected to the sea by them. A pond or lagoon
on the other hand is a small body of water, ordinarily of fresh water,
and not very deep, fed by floods, the hollow bed of which is bounded
by elevations of land.339
Art. 459. Whenever the current of a river, creek or torrent segre-
gates from an estate on its bank a known portion of land and transfers it
to another estate, the owner of the land to which the segregated portion
belonged retains the ownership of it, provided that he removes the same
within two years. (368a)
Art. 460. Trees uprooted and carried away by the current of the wa-
ters belong to the owner of the land upon which they may be cast, if the
owners do not claim them within six months. If such owners claim them,
they shall pay the expenses incurred in gathering them or putting them in
a safe place. (369a)
336
Viajar v. CA, 168 SCRA 405, 413 (1988), citing Payatas Estate Improvement Co. v.
Tuazon, 53 Phil. 55 and C.N. Hodges v. Garcia, 109 Phil. 132.
337
3 Manresa, 6th ed., 239-240.
338
Government of the P.I. v. Colegio de San Jose, 53 Phil. 423.
339
Ibid.
244 PROPERTY
[54.3] Rule on Avulsion
According to Article 459 of the New Civil Code, avulsion takes
place “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.” In such a case, the owner of the land from where the portion
is detached retains the ownership of the segregated portion but he is
required to remove the same within two years.343 Note that the article
requires the owner to physically remove the portion detached from his
land, a mere claim being insufficient.344 Should the owner fail to remove
the detached portion within two years, the same shall belong to the
owner of the land to which it is attached following the principle of ac-
cession.
In the case of avulsion, therefore, accession does not as yet take
place at the time the segregated portion is transferred to another estate
since the owner of the land from where the portion is detached retains
ownership of the same. In avulsion, accession takes place only after two
years from the attachment or incorporation of the segregated portion of
land to the riparian land upon failure of its owner to remove the same
within said period.
[54.4] Avulsion With Respect To Uprooted Trees
If trees are uprooted and carried away by the current of the waters
to another estate, the owner of the tree retains ownership of the same
but he is required to claim them within a period of six months.345 Note
that while avulsion with respect to a segregated portion of land requires
actual physical removal of the portion detached within two years, the
avulsion with respect to uprooted trees merely require the owner of the
tree to make a claim for the same within a period of six months.
If the uprooted trees have been transplanted by the owner of the
land upon which the trees may have been cast and said trees have taken
root in said land, then the owner of the trees, upon making the claim, is
required to refund the expenses incurred in gathering them or in putting
them in a safe place, including the expenses incurred by the owner of
the land for the preservation of the trees.346
343
Art. 459, NCC.
344
II Caguioa, Civil Code, 1966 ed., 103-14.
345
Art. 460, NCC.
346
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 245
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Right of Accession General Provisions
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. How-
ever, the owners of the lands adjoining the old bed shall have the right
to acquire the same by paying the value thereof, which value shall not
exceed the value of the area occupied by the new bed. (370a)
Art. 462. Whenever a river, changing its course by natural causes,
opens a new bed through a private estate, this bed shall become of public
dominion. (372a)
§ 55. Change of Course of River
[55.1] Effect of Change of Course of River
If there is a natural change in the course of the waters of the river,
the abandoned riverbeds shall ipso facto belong to the owners whose
lands are occupied by the new course in proportion to the area lost.347
For example, if a river passing through the property of “A” changed its
course due to natural causes and opened a new bed on the adjoining land
belonging to “X,” the abandoned river bed (which is inside the property
of “A”) automatically or ipso facto belongs to “X” in proportion to
the area lost by the latter. This is an innovation of the old rule under
Article 370 of the Spanish Civil Code of 1889 where the abandoned
river beds shall “belong to the owners of the riparian lands throughout
the respective length of each.”348 According to the Code Commission,349
the new solution is by way of compensation for the loss of the land
occupied by the new bed and that it is more equitable to compensate the
actual losers than to add land to those who have lost nothing.
Note, however, that at this point, no accession has yet taken place
because the owner of the land occupied by the new course is merely
compensated for the area that he lost. Since nothing has been added to
his property, there is no accession yet since this concept connotes an
addition to one’s property. Accesion continua takes place only if the
owner of the land adjoining the old bed will exercise his option “to
acquire the abandoned bed by paying the value thereof, which value
shall not exceed the value of the area occupied by the new bed.”350 In
347
Art. 461, NCC.
348
Art. 370, Spanish Civil Code of 1889.
349
Report of the Code of Commission, 96.
350
Art. 461, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 247
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Right of Accession General Provisions
Note, however, that the factual milieu in Ronquillo and Baes are
not the same. In Baes, the change in the course of the waters of the
creek was the result of a deliberate act on the part of the government
resulting in a prejudice to the interest of Baes because the man-made
canal totally occupied his property. In Ronquillo, however, there is no
showing that the change in the course of Estero Calubcub prejudiced
the Del Rosarios. Moreover, the change in Ronquillo was without the
intervention of the government. It was, in fact, due to the dumping of
garbage therein by the people of the surrounding neighborhood. Hence,
if the change in the course of the waters is due to a deliberate act of the
government resulting in prejudice to a private individual, the latter is
entitled to avail himself of the benefits under Article 461 of the Civil
Code.
Baes v. CA
224 SCRA 562 (1993)
In this case, a portion of the Tripa de Gallina creek was diverted to a man-
made canal which totally occupied Lot 2958-B (with an area of 3,588 sq.m.)
belonging to Felix Baes. The diversion was resorted to by the government to
improve the flow of the Tripa de Gallina creek. Baes and his wife claim that
they became the owners of the old bed (which was eventually filled up by
soil excavated from Lot 2958-B) by virtue of Article 461. In agreeing to the
contention of the Baes spouses, the Supreme Court explained —
If the riparian owner is entitled to compensation for the
damage to or loss of his property due to natural causes, there is
all the more reason to compensate him when the change in the
course of the river is effected though artificial means. The loss to
the petitioners of the land covered by the canal was the result of
a deliberate act on the part of the government when it sought to
improve the flow of the Tripa de Gallina creek. It was therefore
obligated to compensate the Baeses for their loss.
Ronquillo v. CA
195 SCRA 433 (1991)
In this case, Rosendo del Rosario was a registered owner of a parcel of
land at Sampaloc, Manila. Adjoining said lot is a dried-up portion of the old
Estero Calubcub occupied by Mario Ronquillo. The Del Rosarios claim that
long before the year 1930, Rosendo had been in possession of his parcel of land
including the adjoining dried-up portion of the old Estero Calubcub. Because
Ronquillo refused to vacate, the Del Rosarios filed an action in court to be
246 PROPERTY
the above example, while “X” automatically becomes the owner of the
abandoned river bed, “A,” however, can compel X to sell to him the
abandoned bed at a price not exceeding the value of the area occupied
by the new bed.
Note that under Article 461, the owners of the land adjoining the
old bed have the right to compel the owners of the land occupied by the
new bed to sell to them the old bed at a price not greater than the value
of the land occupied by the new bed. Such option is granted to them
by law and not to the owners of the land onto which the river changed
its course. In other words, the owners of the land onto which the river
changed its course cannot compel the riparian owners (the owners of
the land adjoining the old bed) to buy the old bed. The reason for the
law in giving the riparian owner the right to buy the abandoned river
bed is because the latter is in a better position to make use of the land
for agricultural purposes.
[55.2] Applicability of Article 461
The present article (Article 461), as well as Article 370 of the
Spanish Civil Code of 1889, speaks of a “natural change” in the course
of the waters. Hence, in the case of Ronquillo v. Court of Appeals,351 a
case applying the provisions of Article 370 of the Spanish Civil Code
of 1889, it was held that Article 370 applies only if there is a natural
change in the course of the waters and since the drying up of the Estero
Calubcub was actually caused by the active intervention of man — due
to the dumping of garbage therein by the people of the surrounding
neighbourhood — the said law was not applied and the dried-up portion
of Estero Calubcub was instead declared as forming part of the land of
the public domain.
In the subsequent case of Baes v. Court of Appeals,352 however,
the Court applied the provisions of Article 461 of the Civil Code even
if the change in the course of the waters was effected through artificial
means. The Court explained that “if the riparian owner is entitled to
compensation for the damage to or loss of his property due to natural
causes, there is all the more reason to compensate him when the change
in the course of the river is effected though artificial means.”
351
195 SCRA 433 (1991).
352
224 SCRA 562 (1993).
248 PROPERTY
declared the rightful owners of the dried-up portion. Ronquillo, on the other
hand, argued that the dried-up portion is part of the land of the public domain.
After trial, the lower court rendered a judgment in favor of the Del Rosarios,
which judgment was affirmed by the Court of Appeals. Hence, Ronquillo
appealed to the Supreme Court. The Supreme Court required the Solicitor
General to comment on behalf of the Director of Lands. In his comment, the
Solicitor General contends that the subject land is part of the public domain. It
was — HELD: The change in the course of Estero Calubcub was caused, not
by natural courses, but due to the dumping of garbage therein by the people
surrounding the neighborhood. Hence, Art. 370 of the Old Civil Code (now
Art. 461) does not apply. It applies only if there is a natural change in the
course of the waters. Consequently, the dried-up portion of Estero Calubcub
should be considered as forming part of the land of the public domain.
[55.3] Extension of Ownership Ipso Jure
Once the river bed has been abandoned through the natural change
of the course of the waters, the owners of the land through which the
new river bed passes become the owners of the abandoned bed to the
extent provided by Article 461. There need be no act on their part to
subject the old river bed to their ownership, as it is subject thereto ipso
jure from the moment the mode of acquisition becomes evident, without
need of any formal act of acquisition.353 Such abandoned river bed had
fallen to the private ownership of the owner of the land through which
the new river bed passes even without any formal act of his will and
any unauthorized occupant thereof will be considered as a trespasser.354
The right in re to the principal is likewise a right in re to the accessory,
as it is a mode of acquisition provided by law, as the result of the right
of accretion.355 Since the accessory follows the nature of the principal,
there need not be any tendency to the thing or manifestation of the
purpose to subject it to our ownership, as it is subject thereto ipso jure
from the moment the mode of acquisition becomes evident.356 And the
failure of the owners of the land through which the new river bed passes
to register the accretion in their names and declare it for purposes of
taxation does not divest it of its character as a private property.357
353
Agne v. Director of Lands, 181 SCRA 793, 805 (1990), citing Sanchez v. Pascual, 11
Phil. 395 (1908); Pascual v. Sarmiento, et al., 37 Phil. 170 (1917).
354
Ibid.
355
Ibid.
356
Ibid., citing Villanueva v. Castro, 23 Phil. 54.
357
Ibid., at p. 806.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 249
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Right of Accession General Provisions
[55.4] Restoration of the River to Its Former Course
In interpreting the provisions of Article 370 of the Spanish Civil
Code of 1889, our Supreme Court held in Panlilio v. Mercado358 that
in the event of the change of the course of the stream, its former bed
cannot be regarded as definitely “abandoned” and the public divested of
its ownership therein until there is some indication of an intention of the
government to acquiesce to the change of the stream. Hence, it was held
that there was no abandonment of the old bed if the government took
practicable steps to return the stream back to its old course.
According to Dean Capistrano,359 a member of the Code Commis-
sion, the word “ipso facto” was introduced in Article 461 in order to
precisely repudiate the ruling of the Court in the Panlilio case because
the Commission considered it unsound. Hence, after the enactment of
the New Civil Code, there was doubt as to whether the government can
return the river bed back to its old course since in so doing, the govern-
ment would be invading private property because the owner of the land
through which the new river bed passes ipso facto owns the old river
bed.
The foregoing uncertainty was settled with the enactment of
Presidential Decree 1067, otherwise known as “The Water Code of
the Philippines,” which modified the provisions of Article 461 of the
Civil Code.360 Under Article 58 of the Water Code of the Philippines,
the owners of the affected lands (referring to the owners of the land
where the new river bed passes) cannot “restrain the government from
taking steps to revert the river or stream to its former course” but they
“may not compel the government to restore the river to its former bed.”
And if the government decides to revert back the river or stream to its
former course, “the owners of the lands thus affected are not entitled
to compensation for any damage sustained thereby.” In fact, under the
provisions of Article 58361 of the Water Code of the Philippines, the
358
44 Phil. 695.
359
Capistrano, Civil Code of the Philippines, Annotated, Vol. 1, 430.
360
See Footnote No. 56 in Celestial v. Cachopero, 413 SCRA 469, 487.
361
“Art. 58. When a river or stream suddenly changes its course to traverse private lands,
the owners or the affected lands may not compel the government to restore the river to its former
bed; nor can they restrain the government from taking steps to revert the river or stream to its
former course. The owners of the lands thus affected are not entitled to compensation for any
damage sustained thereby. However, the former owners of the new bed shall be the owners of the
abandoned bed in proportion to the area lost by each.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 251
OWNERSHIP
Right of Accession General Provisions
new bed passing through a private estate shall become property of
public dominion. This rule is consistent with the provisions of Article
502(1) of the New Civil Code and Article 5(a) of the Water Code of the
Philippines.
Art. 463. Whenever the current of a river divides itself into branches,
leaving a piece of land or part thereof isolated, the owner of the land re-
tains his ownership. He also retains it if a portion of land is separated
from the estate by the current. (374)
Art. 464. Islands which may be formed on the seas within the juris-
diction of the Philippines, on lakes, and on navigable or floatable rivers
belong to the State. (371a)
Art. 465. Islands which through successive accumulation of alluvial
deposits are formed in non-navigable and non-floatable rivers, belong to
the owners of the margins or banks nearest to each of them, or to the
owners of both margins if the island is in the middle of the river, in which
case it shall be divided longitudinally in halves. If a single island thus
formed be more distant from one margin than from the other, the owner of
the nearer margin shall be the sole owner thereof. (373a)
§ 56. Formation of Island
[56.1] Three Kinds of Islands
In connection with accesion continua, there are three kinds of
islands that may be formed pursuant to the provisions of the Civil
Code:
[56.1.1] Island Formed Under Article 463
In Article 463, the current of a river simply divides itself into
branches, leaving a piece of land or part thereof isolated, thereby
forming an island. Since the land has not been permanently invaded by
the waters of the river, no natural expropriation will occur. The island
thus formed remains to be the property of the owner of the land where
such island has been formed. This is expressly recognized in Article
463.
Under the provisions of the same article, he also retains ownership
of the portion of his land separated from the estate by the current. This
rule is an extension of the rule on avulsion since the process takes place
abruptly and the segregated portion is required to be identifiable. Hence,
if known portions of land are segregated from a tenement and deposited
250 PROPERTY
affected landowners may themselves undertake the return of the river
to its old bed subject to the following conditions: (1) they shall secure
a permit from the Department of Public Works and Highways; (2) the
undertaking shall be at their expenses; and (3) the work pertaining
thereto must be commenced within two years from the change in the
course of the river or stream.
[55.5] When River Dries Up
If the river simply dries up and did not change its course or without
opening a new bed, it is clear that the provisions of Article 461 will
not apply. To whom will the dried up river bed belong? According to
Senator Tolentino, the dry bed will continue to remain property of public
dominion.362 Since rivers and their natural beds are property of public
dominion, in the absence of any provision vesting the ownership of the
dried up river bed in some other person, it must continue to belong to
the State.363
The foregoing opinion of Senator Tolentino was quoted with
approval by the Supreme Court in the case of Celestial v. Cachopero,364
where the Court held —
Furthermore, both provisions pertain to situations
where there has been a change in the course of a river, not
where the river simply dries up. In the instant Petition, it is
not even alleged that the Salunayan Creek changed its course.
In such a situation, commentators are of the opinion that the
dry river bed remains property of public dominion.365
[55.6] Status of New Bed
In event of a natural change in the course of the waters of the
river, Article 462 of the New Civil Code expressly declares that the
The owners of the affected lands may undertake to return the river or stream to its old bed
at their own expense; Provided, That a permit therefore is secured from the Minister of Public
Works, Transportation and Communication and work pertaining thereto are commenced within
two years from the change in the course of the river or stream.”
362
II Tolentino, Civil Code, 1992 ed., 137-138.
363
Id.
364
413 SCRA 469, 489 (2003).
365
Id., citing II Tolentino,Civil Code, 1992 ed., 137-138; II Paras, Civil Code, 2002 ed.,
275.
252 PROPERTY
in the middle of a river, thus forming an island, the provisions of Article
463 and not Article 465 will apply.366 Note that the rule in this article
applies whether the river is navigable or floatable or not since the article
does not make any distinction.
Strictly speaking, however, no accession has taken place in the
situation contemplated in Article 463 because no new property has been
added or attached to the property of any person. As stated earlier, the
owner of the property simply retains ownership of his land, with the
difference that it has just been converted into an island.
[56.1.2] Island Formed Under Article 464
Article 464 provides for a real case of accession compared to the
previous article (Article 463). In Article 464, an island is formed on a
sea, lake or navigable or floatable river through whatever cause. Thus,
the article clearly speaks of an addition to the property of the State
since the island thus formed is expressly declared to be property of the
latter. It has been said that the island formed pursuant to the provisions
of Article 464 forms part of the patrimonial property of the State and,
therefore, may be sold by the State.367
Article 464 speaks of an island formed on a navigable or floatable
river. A river is considered to be navigable or floatable if it is able to
carry the produce of the land along its banks to the market.368
[56.1.3] Island Formed Under Article 465
Article 465, in turn, speaks of an island formed in non-navigable
or non-floatable rivers through successive accumulation of deposit in
the same manner as alluvion. Hence, if the island is formed in navigable
or floatable rivers, it is Article 464 that will apply and not this article.
If the island is formed through a sudden and abrupt process due to
segregation of identifiable portions of land from an estate, it is Article
463 that will likewise apply and not this article, whether the river is
navigable or floatable or not.
366
367
II Caguioa, Civil Code, 1966 ed., 110.
3 Manresa, 6th ed., 256.
368
Commonwealth v. Meneses, (CA) 38 O.G. No. 23, 2839.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
OWNERSHIP
Right of Accession General Provisions
If the requisites of Article 465 are complied with, the ownership of
the island thus formed shall be governed by the following rules:
(1) It shall belong to the owner of the margins or banks nearest
to the island;
(2) If the island is in the middle of the river, the same shall be
owned by the owners of both margins, in which case it shall
be divided longitudinally in halves; or
(3) If the island be more distant from one margin than from the
other, the owner of the nearer margin shall be the sole owner
thereof.
The reason for this article is the same as in alluvion in that the
owners of the bank nearer the islands are in the best position to cultivate
and attend to the exploitation of the same.369 In fact, no specific act of
possession over the accretion is required. If, however, the riparian
owner fails to assert his claim thereof, the same may yield to the adverse
possession of third parties, as indeed even accretion to land titled under
the Torrens system must itself be registered.370
Jagualing v. CA
194 SCRA 607 (1991)
Between the one who has actual possession of an island that forms in a
non-navigable and non-floatable river (who has been in possession of the same
for 15 years) and the owner of the land along the margins nearest to the island,
who has the better right thereto? Under Art. 465 of the Civil Code, the island
belongs to the owner of the land along the nearer margin as sole owner thereof.
His ownership, however, may yield to the adverse possession of third parties.
But in this case, the third parties were presumed to have notice of the status of
the owner of the land along the nearer margin as riparian owners, hence, they
did not qualify as possessors in good faith. They may acquire ownership of the
island only through uninterrupted adverse possession for a period of thirty (30)
years. By their own admission, they have been in possession of the property for
only about fifteen years. Hence, the island can properly be adjudicated to the
owner of the land along the nearer margin.
369
Jagualing v. CA, 194 SCRA 608, 614-615 (1991).
370
Ibid.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
OWNERSHIP
Right of Accession General Provisions
§ 57. Adjunction or Conjunction
[57.1] Forms of Accesion Continua With Respect To Movables
As discussed in supra § 40.2, there are three forms of accesion
continua with respect to movable property:
(1) adjunction or conjunction;
(2) commixtion or confusion; or
(3) specification
[57.2] Adjunction or Conjunction, Explained
Adjunction (or conjunction) takes place when two or more
movable things belonging to different owners are so united that they
cannot be separated without causing injury to one or both them, thereby
giving rise to a new thing.371 If separation is possible without causing
a substantial physical or juridical injury to any of the movables, then
there is no accession. Hence, in the first paragraph of Article 469 which
contemplates of adjunction through inclusion and soldering,372 the
respective owners may demand separation whenever the things united
can be separated without injury.
The distinguishing features of adjunction are the following: (1)
that the two or more movables form a distinctive new thing; and (2)
that each one of the things making up the new one preserves its own
nature.373 The latter characteristic serves to distinguish it from confusion
which implies a greater degree of identification and in certain cases
even a decomposition of the things which have been confused.374
[57.3] How It Takes Place
Adjunction may take place in either of the following ways:
(1) inclusion or engraftment;
(2) soldadura or attachment;
(3) tejido or weaving;
371
3 Sanchez Roman, 98.
372
3 Manresa, 6th ed., 284-285.
373
3 Manresa 272.
374
II Caguioa, Civil Code, 1966 ed., 111, citing 3 Manresa, 6th ed., 275.
253 254 PROPERTY
Section 3. — Right of Accession with
Respect to Movable Property
Art. 466. Whenever two movable things belonging to different own-
ers are, without bad faith, united in such a way that they form a single ob-
ject, the owner of the principal thing acquires the accessory, indemnifying
the former owner thereof for its value. (375)
Art. 467. The principal thing, as between two things incorporated, is
deemed to be that to which the other has been united as an ornament, or
for its use or perfection. (376)
Art. 468. If it cannot be determined by the rule given in the preceding
article which of the two things incorporated is the principal one, the thing
of the greater value shall be so considered, and as between two things of
equal value, that of the greater volume.
In painting and sculpture, writings, printed matter, engraving and
lithographs, the board, metal, stone, canvas, paper or parchment shall be
deemed the accessory thing. (377)
Art. 469. Whenever the things united can be separated without in-
jury, their respective owners may demand their separation.
Nevertheless, in case the thing united for the use, embellishment or
perfection of the other, is much more precious than the principal thing,
the owner of the former may demand its separation, even though the thing
to which it has been incorporated may suffer some injury. (378)
Art. 470. Whenever the owner of the accessory thing has made the
incorporation in bad faith, he shall lose the thing incorporated and shall
have the obligation to indemnify the owner of the principal thing for the
damages he may have suffered.
If the one who has acted in bad faith is the owner of the principal
thing, the owner of the accessory thing shall have a right to choose be-
tween the former paying him its value or that the thing belonging to him
be separated, even though for this purpose it be necessary to destroy the
principal thing; and in both cases, furthermore, there shall be indemnity
for damages.
If either one of the owners has made the incorporation with the
knowledge and without the objection of the other, their respective rights
shall be determined as though both acted in good faith. (379a)
Art. 471. Whenever the owner of the material employed without his
consent has a right to an indemnity, he may demand that this consist in
the delivery of a thing equal in kind and value, and in all other respects, to
that employed, or else in the price thereof, according to expert appraisal.
(380)
255 256 PROPERTY
(4) pintura or painting; and
(5) escritura or writing.375
[57.4] Legal Effects of Adjunction
The legal effects of adjunction will depend on how the union or
attachment was effected — whether in good faith or in bad faith.
[57.4.1] If Effected In Good Faith
This situation is governed by Article 466 of the New Civil Code,
which reads:
“Art. 466. Whenever two movable things belonging to
different owners are, without bad faith, united in such a way
that they form a single object, the owner of the principal
thing acquires the accessory, indemnifying the former owner
thereof for its value. (375)”
Thus, if the union or attachment was effected in good faith
— whether by the owner of the principal or by the owner of the
accessory — the rule is that the owner of the principal thing acquires
the accessory376 following the principle in accesion continua that the
accessory follows the principal (“accession cedit principali”), but he
must indemnify the owner of the accessory for its value following the
principle that no one shall unjustly enrich himself at the expense of
another. The union or attachment is deemed to be effected in good faith
if the person responsible therefore honestly thought that the movables
involved really belonged to him.
However, if the accessory is much more precious than the principal
thing, its owner may demand its separation, even though the principal
may suffer injury.377
[57.4.2.] If Effected In Bad Faith
If the union or attachment was effected in good faith, it is immaterial
as to who was responsible for it. The rule shall be the same as stated
above in supra § 57.4.1 regardless of who was responsible for such
375
3 Manresa, 6th ed., 275-276.
376
See Art. 466, NCC.
377
Art. 469, 2nd par., NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 257
OWNERSHIP
Right of Accession General Provisions
union or attachment. But if the union or attachment was effected in bad
faith, the legal effects shall vary depending as to who was responsible
for it, as follows:
[i] If Effected In Bad Faith By the Owner of the Principal
This situation is governed by the second paragraph of Article 470
of the New Civil Code, which reads:
“Art. 470. xxx
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.”
Following the principle of accesion continua that bad faith
subjects a person to damages and other unfavorable consequences, the
options in this situation are given to the owner of the accessory and not
to the owner of the principal as a way of penalizing the latter. Hence,
the owner of the accessory may choose between the following options:
(1) to demand payment for the value of the accessory, with a right to
be indemnified for damages; or (2) to demand for the separation of the
accessory, even though for this purpose it be necessary to destroy the
principal thing, with a right to be indemnified for damages.
The second option, however, does not apply if the same is not
practicable as in the case of painting (which cannot be separated from
the canvass) or writing (which cannot be separated from the paper). In
such a situation, the owner of the accessory is limited only to the first
option mentioned above.378
[ii] If Effected In Bad Faith By the Owner of the Accessory
This situation is governed by the first paragraph of Article 470,
which reads:
378
3 Manresa, 6th ed., 289.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 259
OWNERSHIP
Right of Accession General Provisions
(3) Third test — if both things are of equal value, then the one
of greater volume is the principal and the other the accessory.382
However, in the case of painting, sculpture, writings, printed
matter, engraving and lithographs, the board, metal, stone, canvas,
paper or parchment shall be deemed the accessory thing.383
Art. 472. If by the will of the owners two things of the same or differ-
ent kinds are mixed, or if the mixture occurs by chance, and in the latter
case the things are not separable without injury, each owner shall acquire
a right proportional to the part belonging to him, bearing in mind the value
of the things mixed or confused. (381)
Art. 473. If by the will of only one owner, but in good faith, two things
of the same or different kinds are mixed or confused, the rights of the
owners shall be determined by the provisions of the preceding article.
If the one who caused the mixture or confusion acted in bad faith,
he shall lose the thing belonging to him thus mixed or confused, besides
being obliged to pay indemnity for the damages caused to the owner of
the other thing with which his own was mixed. (382)
§ 58. Commixtion or Confusion
[58.1] Commixtion or Confusion, Explained
Commixtion or confusion refers to mixture of two or more things
belonging to different owners. If the things mixed are solid, it is called
commixtion; if the things are liquid, it is called confusion.
[58.2] Legal Effects of Commixtion or Confusion
The legal effects of commixtion or confusion are provided in
Articles 472 and 473 of the New Civil Code. Based from these two
Articles, the effects of commixtion or confusion shall depend on the
manner by which the mixture occurs:
[58.2.1] Co-ownership
If the mixture takes place by reason of the following: (1) by will of
both or all owners of the things mixed;384 (2) by will of only one owner
382
Art. 468, NCC.
383
Art. 468, 2nd par., NCC.
384
Art. 472, NCC.
258 PROPERTY
“Art. 470. Whenever the owner of the accessory thing
has made the incorporation in bad faith, he shall lose the thing
incorporated and shall have the obligation to indemnify the
owner of the principal thing for the damages he may have
suffered.
x x x.”
Following the principle of accesion continua that bad faith subjects
a person to damages and other unfavorable consequences, if the union
or attachment was effected by the owner of the accessory in bad faith,
he shall lose the thing incorporated (the accessory) and shall be liable
to pay damages to the owner of the principal.
[iii] If Both Acted In Bad Faith
The third paragraph of Article 470 provides that “if either one of
the owners has made the incorporation with the knowledge and without
the objection of the other, their respective rights shall be determined
as though both acted in good faith.” In such a case, the provisions of
Article 466 will apply. Hence, whatever has been discussed in supra §
57.4.1 shall also apply to this situation.
In the foregoing situations, whenever the owner of the material
employed without his consent has a right to an indemnity, he may
demand that the same consist either: (1) in the delivery of a thing equal
in kind and value, and in all other respects, to that employed; or (2) in
the payment of the price thereof according to expert appraisal.379
[57.5] Tests In Determining The Principal
In determining which of the movables so united is the principal
(and which is the accessory), the following tests shall be applied:
(1) First test — that to which the other has been united as
ornament or for its use or perfection is the principal, the thing added is
the accessory;380
(2) Second test — if the first test cannot be applied, then the
thing of greater value is the principal and the other the accessory;381
379
Art. 471, NCC.
380
Art. 467, NCC.
381
Art. 468, NCC.
260 PROPERTY
acting in good faith;385 or (3) by chance or fortuitous event,386 a state of
co-ownership with respect to the mixture shall arise and each owner
“shall acquire a right proportional to the part belonging to him, bearing
in mind the value of the thing mixed or confused.”387 Strictly speaking,
the situations contemplated are not really cases of accession since the
persons involved did not gain anything. Instead, these situations will
give rise to a state of co-ownership.
[58.2.2] If Caused By Only One Owner Acting In Bad
Faith
This situation, on the other hand, is a true case of accession.
Pursuant to the provisions of the second paragraph of Article 473 of the
New Civil Code, if the mixture is caused by only one owner acting in
bad faith, he loses the thing belonging to him thus mixed or confused,
besides being obliged to pay indemnity for the damages caused to the
owner of the thing with which his own was mixed or confused.388
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 appropri-
ate the thing thus transformed as his own, indemnifying the owner of the
material for its value.
If the material is more precious than the transformed thing or is of
more value, its owner may, at his option, appropriate the new thing to
himself, after first paying indemnity for the value of the work, or demand
indemnity for the material.
If in the making of the thing bad faith intervened, the owner of the
material shall have the right to appropriate the work to himself without
paying anything to the maker, or to demand of the latter that he indemnify
him for the value of the material and the damages he may have suffered.
However, the owner of the material cannot appropriate the work in case
the value of the latter, for artistic or scientific reasons, is considerably
more than that of the material. (383a)
Art. 475. In the preceding articles, sentimental value shall be duly
appreciated. (n)
385
Art. 473, 1st par., NCC.
386
Art. 472, 1st par., NCC.
387
Arts. 472 and 473, 1st par., NCC.
388
Art. 473, 2nd par., NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 261
OWNERSHIP
Right of Accession General Provisions
§ 59. Specification
[59.1] Specification, Explained
Specification takes place whenever the work of a person is done
on the material of another, such material, in consequence of the work
itself, undergoing a transformation.389 It is the imparting of a new form
to the material of another person.390 Hence, specification involves: (1)
the labor of the worker, and (2) the materials of another.
[59.2] Legal Effects
The legal effects of specification shall depend on the good faith
or bad faith of the worker. Of course, the worker is in good faith if he
honestly believed that the materials were his at the time that he made
use of them; otherwise, he shall be considered in bad faith.
[59.2.1] If the Worker Acted In Good Faith
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.391
The exception to the foregoing rule is when the material is more
precious than the transformed thing or more valuable, in which case, its
owner may, at his option: (1) appropriate the new thing to himself after
paying indemnity for the value of the work; or (2) demand indemnity
for the material.392
[59.2.2] If the Worker Acted In Bad Faith
If in the making of the thing bad faith intervened, the owner of
the material has two options: (1) to appropriate the work for himself
without paying anything to the maker; or (2) to demand of the latter
(worker) that he indemnify him for the value of the material and the
damages he may have suffered.393
389
3 Manresa, 6th ed., 297.
390
3 Sanchez Roman 100.
391
Art. 474, 1st par., NCC.
392
Art. 474, 2nd par., NCC.
393
Art. 474, 3rd par., NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 263
OWNERSHIP
Quieting of Title (n)
property.395 Originating in equity jurisprudence, its purpose is to secure
an adjudication that a claim of title to or an interest in property, adverse
to that of the complainant, is invalid, so that the complainant and those
claiming under him may be forever afterward free from any danger of
hostile claim.396 In an action for quieting of title, the competent court is
tasked to determine the respective rights of the complainant and other
claimants, not only to place things in their proper place, to make the
one who has no rights to said immovable respect and not disturb the
other, but also for the benefit of both, so that he who has the right would
see every cloud of doubt over the property dissipated, and he could
afterwards without fear introduce the improvements he may desire, to
use, and even to abuse the property as he deems best.397 Such remedy
may be availed of under the circumstances enumerated in Article 476 of
the New Civil Code, as follows:
“Art. 476. Whenever there is a cloud on title to real
property or any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is appar-
ently valid or effective but is in truth and in fact invalid, inef-
fective, voidable, or unenforceable, and may be prejudicial
to said title, an action may be brought to remove such cloud
or to quiet the title.
An action may also be brought to prevent a cloud
from being cast upon title to real property or any interest
therein.”
In Realty Sales Enterprises v. IAC,398 the Supreme Court held that
suits to quiet title are not technically suits in rem, nor are they, strictly
speaking, in personam, but being against the person in respect of the res,
these proceedings are characterized as quasi in rem and the judgment in
such proceedings is conclusive only between the parties.399
395
Baricuatro v. CA, 325 SCRA 137 (2000), citing Vda. de Aviles v. Court of Appeals, 264
SCRA 473, 478 (1996); see also Divinagracia v. Cometa, 482 SCRA 648, 654 (2006) and Calacala,
et al. v. Republic of the Philippines, G.R. No. 154415, July 28, 2005.
396
Id., citing II Tolentino, Civil Code, 137.
397
Id., citing II Paras, Civil Code, 13th ed., 270.
398
154 SCRA 328, 348 (1987).
399
See also Seville v. National Development Company, 351 SCRA 112.
262 PROPERTY
However, if the value of the work, for artistic or scientific reasons,
is considerably more than that of the material, the owner of the material
cannot appropriate the work.394 In such a case, the owner of the material
can only demand from the worker the value of his materials and the
damages he may have suffered.
Chapter 3
QUIETING OF TITLE (n)
Art. 476. Whenever there is a cloud on title to real property or any
interest therein, by reason of any instrument, record, claim, encumbrance
or proceeding which is apparently valid or effective but is in truth and in
fact invalid, ineffective, voidable, or unenforceable, and may be prejudi-
cial to said title, an action may be brought to remove such cloud or to
quiet the title.
An action may also be brought to prevent a cloud from being cast
upon title to real property or any interest therein.
Art. 477. The plaintiff must have legal or equitable title to, or interest
in the real property which is the subject matter of the action. He need not
be in possession of said property.
Art. 478. There may also be an action to quiet title or remove a cloud
therefrom when the contract, instrument or other obligation has been ex-
tinguished or has terminated, or has been barred by extinctive prescrip-
tion.
Art. 479. The plaintiff must return to the defendant all benefits he
may have received from the latter, or reimburse him for expenses that
may have redounded to the plaintiff’s benefit.
Art. 480. The principles of the general law on the quieting of title are
hereby adopted insofar as they are not in conflict with this Code.
Art. 481. The procedure for the quieting of title or the removal of a
cloud therefrom shall be governed by such rules of court as the Supreme
Court shall promulgate.
§ 60. Quieting of Title
[60.1] Action to Quiet Title
Quieting of title is a common law remedy for the removal of
any cloud upon or doubt or uncertainty with respect to title to real
394
Art. 474, last par., Civil Code.
264 PROPERTY
[60.2] Requisites of Action to Quiet Title
For an action to quiet title to prosper, the following indispensable
requisites must concur, namely: (1) the plaintiff or complainant has a
legal or an equitable title to or interest in the real property subject of
the action;400 (2) there is a cloud on title to real property or any interest
therein;401 and (3) the deed, claim, encumbrance or proceeding claimed
to be casting cloud on his title must be shown to be in fact invalid
or inoperative despite its prima facie appearance of validity or legal
efficacy.402
[60.2.1] Legal or Equitable Title
For an action for quieting of title to prosper, it is essential for the
plaintiff or complainant to have a legal title or an equitable title to or
interest in the real property which is the subject matter of the action.403
On this score, the Civil Code of the Philippines provides:
“Art. 477. The plaintiff must have legal or equitable
title to, or interest in the real property which is the subject-
matter of the action. He need not be in possession of said
property.”
It is not necessary, therefore, that the person seeking to quiet
his title be the registered owner of the property in question.404 When
Article 477 speaks of “title” to property, it does not necessarily denote
a certificate of title issued in favor of the person filing the suit.405 It can
connote acquisitive prescription by possession in the concept of an owner
thereof.406 Hence, in Chacon Enterprises v. Court of Appeals,407 the Court
considered the action to be one for quieting of title where the plaintiffs
alleged ownership and actual possession since time immemorial of the
property in question by themselves and through their predecessors-in-
interest, while defendants secured a certificate of title over said property
through fraud, misrepresentation and deceit. Indeed, under Article 477,
400
Calacala, et al. v. Republic of the Philippines, supra.
401
MBTC v. Alejo, 364 SCRA 812.
402
Calacala, et al. v. Republic of the Philippines, supra.
403
Id., See also Robles v. CA, 328 SCRA 97, 108-109.
404
Mamadsual v. Moson, 190 SCRA 82.
405
Maestrado v. CA, 327 SCRA 678, 689; also in Mamadsual v. Moson, supra.
406
Mamadsual v. Moson, supra.
407
124 SCRA 784 (1983).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 265
OWNERSHIP
Quieting of Title (n)
one who has an equitable right or interest in the property may also file
an action to quiet title.408
[60.2.2] “Cloud” on Title
Equally important, an action for quieting of title is filed only when
there is a cloud on title to real property or any interest therein.409 As
defined, a “cloud on title is a semblance of title which appears in some
legal form but which is in fact unfounded.”410
In the case of Metropolitan Bank and Trust Company v. Alejo,411
the Supreme Court held that an action to quiet title is not an appropriate
remedy there being no cloud on Metrobank’s title. In this case, the
Spouses Acampado were borrowers of Metrobank, for which reason
they executed a real estate mortgage in favor of the bank as security
for their mortgage indebtedness. The said mortgage was registered and
annotated on the title of the property subject matter thereof. Subsequently
thereafter, a third person filed an action against the Spouses Acampado
for declaration of the latter’s title, for which a favorable judgment was
obtained by said third person. Despite being the registered mortgagee
of the subject property, Metrobank was not notified of the existence of
the said proceedings. Because of the failure of the Spouses Acampado
to pay their mortgage obligation, Metrobank foreclosed the mortgage
and when it was about to consolidate its ownership over the foreclosed
property, it learned of the existence of the decision annulling the title of
the Spouses Acampado. Upon such discovery, Metrobank filed a petition
for annulment of judgment before the Court of Appeals to declare the
judgment of the Regional Trial Court null and void. However, the
Court of Appeals dismissed the petition of Metrobank on the ground,
among others, that the bank should have filed a petition for relief from
judgment or an action for quieting of title before the Regional Trial
Court instead of the petition for annulment of judgment. On appeal, the
Supreme Court held that an action to quite title is not an appropriate
remedy in this situation. The Court explained —
Equally important, an action for quieting of title is filed
only when there is a cloud on title to real property or any
408
Mamadsual v. Moson, supra.
409
MBTC v. Alejo, supra.
410
Id., citing II Tolentino, Civil Code, 1992 ed., 150.
411
Supra.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 267
OWNERSHIP
Quieting of Title (n)
action where the sole issue is limited to whether the instru-
ment, record, claim, encumbrance or proceeding involved
constitutes a cloud upon the petitioners’ interest or title in
and to said property. Such determination of boundaries is
appropriate in adversarial proceedings where possession or
ownership may properly be considered and where evidence
aliunde, other than the “instrument, record, claim, encum-
brance or proceeding” itself, may be introduced. An action
for forcible entry, whenever warranted by the period pre-
scribed in Rule 70, or for recovery of possession de facto,
also within the prescribed period, may be availed of by the
petitioners, in which proceeding the boundary dispute may
be fully threshed out.
The foregoing rule, however, is subject to qualification. As a
general rule, a cloud which may be removed by suit to quiet title is
not created by mere verbal or parol assertion of ownership of or an
interest in property.414 Where there is a written or factual basis for the
asserted right, the same will be sufficient.415 Thus, a claim of right based
on acquisitive prescription or adverse possession has been held to
constitute a removable cloud on title.416
[60.2.3] Deed, Claim, Etc. Must Be Invalid or Inoperative
Also, for an action for quieting of title to prosper the deed, claim,
encumbrance or proceeding that is being alleged as a cloud on plaintiff’s
title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.417 This requirement is clear
from the provision of Article 476.
[60.3] Prescription
In an action to quiet title, the plaintiff need not be in possession
of the property.418 If the plaintiff in an action for quieting of title,
414
Tandog, et al. v. Macapagal, et al., G.R. No. 144208, Sep. 11, 2007; citing II Tolentino,
Civil Code, 152.
415
Id.
416
Id.
417
Calacala, et al. v. Republic of the Philippines, supra.
418
Art. 477, NCC.
266 PROPERTY
interest therein. As defined, a “cloud on title is a semblance
of title which appears in some legal form but which is in
fact unfounded.” In this case, the subject judgment cannot
be considered as a cloud on petitioner’s title or interest over
the real property covered by TCT No. V-41319, which does
not even have a semblance of being a title.
It would not be proper to consider the subject judgment
as a cloud that would warrant the filing of an action for
quieting of title, because to do so would require the court
hearing the action to modify or interfere with the judgment
or order of another co-equal court. Well-entrenched in our
jurisdiction is the doctrine that a court has no power to do
so, as that action may lead to confusion and seriously hinder
the administration of justice. Clearly, an action for quieting
of title is not an appropriate remedy in this case.
In fine, to avail of the remedy of quieting of title, a plaintiff
must show that there is an instrument, record, claim, encumbrance or
proceeding which constitutes or casts a cloud, doubt, question or shadow
upon the owner’s title to or interest in real property.412 The ground or
reason for filing a complaint for quieting of title must therefore be “an
instrument, record, claim, encumbrance or proceeding.”413 Under the
maxim expresio unius est exclusio alterius, these grounds are exclusive
so that other reasons outside of the purview of these reasons may not
be considered valid for the same action. Consequently, in the cases
of Vda. de Aviles v. Court of Appeals, supra, and Titong v. Court of
Appeals, supra, the Court held that an action for quieting of title may
not be brought for the purpose of settling a boundary dispute. In Vda.
de Aviles, the Court explained further —
From another perspective, we hold that the trial court
(and likewise the respondent Court) cannot, in an action for
quieting of title, order the determination of the boundaries of
the claimed property, as that would be tantamount to award-
ing to one or some of the parties the disputed property in an
412
Vda. de Aviles v. CA, 264 SCRA 473; also in Titong v. CA, 278 SCRA 102.
413
Titong v. CA, supra., citing Vda. de Aviles v. CA, supra.
268 PROPERTY
however, is in possession of the property being litigated, the action is
imprescriptible.419 The rationale for this rule has been aptly stated thus:
The owner of real property who is in possession there-
of may wait until his possession is invaded or his title is
attacked before taking steps to vindicate his right. A person
claiming title to real property, but not in possession thereof,
must act affirmatively and within the time provided by the
statute. Possession is a continuing right as is the right to
defend such possession. So it has been determined that an
owner of real property in possession has a continuing right to
invoke a court of equity to remove a cloud that is a continu-
ing menace to his title. Such a menace is compared to a con-
tinuing nuisance or trespass which is treated as successive
nuisances or trespasses, not barred by statute until continued
without interruption for a length of time sufficient to affect a
change of title as a matter of law.420
The rule that the Statute of Limitations is not available as a defense
to an action to remove a cloud from title can only be invoked by a
complainant when he is in possession. One who claims property which
is in the possession of another must, it seems, invoke his remedy within
the statutory period.421
Even if the complaint of the plaintiff is captioned or denominated
as one for “Annulment of Title and/or Reconveyance”422 or one to compel
the defendant to execute a deed of conveyance423 but the averments
therein show that plaintiff is claiming lawful ownership of the property,
is in actual possession and seeks to remove a cloud over his title, the
action is to be considered as an action for quieting of title or removal of
a cloud over such title and as plaintiff is in possession of the land, the
action is imprescriptible.424 It is a settled rule that it is not the caption of
the pleading, but the allegations thereof that determines the nature of
419
Sapto v. Fabiana, 103 Phil. 683; Faja v. CA, 75 SCRA 441, 446 (1977); David v. Malay,
318 SCRA 711.
420
Pingol v. CA, 226 SCRA 118, 129-130; See also Faja v. CA, supra.
421
Mamadsual v. Moson, supra, 88.
422
See Chacon Enterprises v. CA, G.R. No. L-46418-19, Sept. 29, 1983.
423
See Gallar v. Husain, 20 SCRA 186.
424
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 269
OWNERSHIP
Ruinous Buildings and Trees in Danger of Falling
the action; that even without the prayer for a specific remedy, proper
relief may nevertheless be granted by the court if the facts alleged in the
complaint and the evidence introduced so warrant.425
Chapter 4
RUINOUS BUILDINGS AND TREES
IN DANGER OF FALLING
Art. 482. If a building, wall, column, or any other construction is in
danger of falling, the owner shall be obliged to demolish it or to execute
the necessary work in order to prevent it from falling.
If the proprietor does not comply with this obligation, the admin-
istrative authorities may order the demolition of the structure at the ex-
pense of the owner, or take measures to insure public safety. (389a)
Art. 483. Whenever a large tree threatens to fall in such a way as to
cause damage to the land or tenement of another or to travellers over a
public or private road, the owner of the tree shall be obliged to fell and re-
move it; and should he not do so, it shall be done at his expense by order
of the administrative authorities. (390a)
§ 61. Ruinous Buildings and Falling Trees
[61.1] Exercise of Police Power
The provisions of Articles 482 and 483 are necessary consequences
of the limitations inherent in the exercise of the right of ownership.
As discussed in supra § 37.3, every holder of property holds it under
the implied liability that his use of it shall not be injurious to the
equal enjoyment of others having an equal right to the enjoyment of
their property, nor injurious to the rights of the community.426 As a
consequence, if the property of a person poses danger to other people
or their property, such as in the situations contemplated in Articles 482
and 483, the State may validly exercise its police power to prevent the
occurrence of such injury.
425
Chacon Enterprises v. CA, supra, citing Ras v. Sua, L-23302, Sept. 25, 1968, 25 SCRA
153, 158-159, citing People v. Matondo, February 24, 1961; Cajefe v. Fernandez, Oct. 19, 1960;
Rosales v. Reyes, 25 Phil. 495; Ibañez de Baranueva v. Fuster, 29 Phil. 606; Cabigao v. Lim, 50
Phil. 844.
426
Case v. Board of Health, 24 Phil. 250.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 271
OWNERSHIP
Ruinous Buildings and Trees in Danger of Falling
In paragraph 3 of Article 2191 of the New Civil Code, proprietors
are liable for the falling of trees situated at or near highways or lanes, if
the same is not caused by force majeure. Note, however, that if it is the
tree contemplated under Article 483 which falls and causes damage to
another, the owner thereof shall be deemed liable even if the reason for
the fall be fortuitous event, such as typhoon or earthquake, because in
this case the owner is already negligent for failing to take the necessary
measures to insure public safety.
Capili v. Sps. Cardaña
G.R. No. 157906, Nov. 2, 2006
On February 1, 1993, Jasmin Cardaña was walking along the perimeter
fence of the San Roque Elementary School when a branch of a caimito tree
located within the school premises fell on her, causing her instantaneous death.
Her parents sued the principal of the school for damages. It turned out that as
early as December 15, 1992, a resident of the barangay already reported to
the said principal on the possible danger the tree posed to passersby but the
latter did nothing. The Court, in this case, held the principal liable for damages
because of her negligence. The Court explained: “The probability that the
branches of a dead and rotting tree could fall and harm someone is clearly a
danger that is foreseeable. As the school principal, petitioner was tasked to
see to the maintenance of the school grounds and safety of the children within
the school and its premises. That she was unaware of the rotten state of a tree
whose falling branch had caused the death of a child speaks ill of her discharge
of the responsibility of her position.”
— oOo —
270 PROPERTY
[61.2] Obligations of Owners of Ruinous Buildings
Owners of buildings, walls, columns or other constructions in
danger of falling are obliged to either demolish it or to execute the
necessary work in order to prevent it from falling.427 If he does not
comply with this obligation, the administrative authorities may order the
demolition of the structure at his expense, or to take measures to insure
public safety.428 Since this is an exercise of the police power of the State
intended to secure public safety, the condemnation of the property is not
compensable. As stated in supra § 37.1.1, in police power, if property
is condemned for the purpose of promoting the general welfare, the
owner does not recover from the government for injury sustained in
consequence thereof.
Further, if by reason of lack of necessary repairs, a building or
structure causes damage resulting from its total or partial collapse, the
proprietor thereof shall be responsible for the damages.429 However,
if the reason for the collapse should be any defect in the construction
mentioned in Article 1723,430 the liability shall fall upon the engineer
or architect or contractor in accordance with the said article, within the
period therein fixed.431
[61.3] Obligations of Owners of Falling Trees
Whenever a large tree threatens to fall in such a way as to cause
damage to the land or tenement of another or to travellers over a public
or private road, the owner of the tree shall be obliged to fell and remove
it; and should he not do so, it should be done at his expense by order of
the administrative authorities.432
427
Art. 482, par. 1, NCC.
428
Art. 482, par. 2, NCC.
429
Art. 2190, NCC.
430
“Art. 1723. The engineer or architect who drew up the plans and specifications for a
building is liable for damages if within fifteen years from the completion of the structure, the same
should collapse by reason of a defect in those plans and specifications, or due to the defects in the
ground. The contractor is likewise responsible for the damages if the edifice falls, within the same
period, on account of defects in the construction or the use of materials of inferior quality furnished
by him, or due to any violation of the terms of the contract. If the engineer or architect supervises
the construction, he shall be solidarily liable with the contractor.
Acceptance of the building, after completion, does not imply waiver of any of the cause of
action by reason of any defect mentioned in the preceding paragraph.
The action must be brought within ten years following the collapse of the building. (n)”
431
Art. 2192, NCC.
432
Art. 483, NCC.
272 PROPERTY
Title III. CO-OWNERSHIP
Art. 484. There is co-ownership whenever the ownership of an undi-
vided thing or right belongs to different persons.
In default of contracts, or of special provisions, co-ownership shall
be governed by the provisions of this Title. (392)
§ 62. In General
[62.1] Definition
Sanchez Roman defines co-ownership as the right of common
dominion which two or more persons have in a spiritual part of a thing,
not materially or physically divided.1 Manresa, on the other hand, defines
it as the manifestation of the private right of ownership, which instead
of being exercised by the owner in an exclusive manner over the thing
subject to it, it is exercised by two or more owners and the undivided
thing or right to which it refers is one and the same.2
[62.2] Requisites of Co-ownership
There is co-ownership whenever the ownership of an undivided
thing or right belongs to different persons.3 Hence, in order that a co-
ownership may exist the following requisites must concur:
[62.2.1] Plurality of Subjects
There must be plurality of subjects, who are the co-owners.4
The regime of co-ownership exists when ownership of an undivided
thing or right belongs to different persons.5 Thus, co-ownership is a
1
3 Sanchez Roman 162, cited in Sanchez v. Court of Appeals, 404 SCRA 540, 547 (June
20, 2003).
2
3 Manresa 401, cited in Sanchez v. CA, supra, 547.
3
Art. 484, 1st par., NCC.
4
Sanchez v. Court of Appeals, supra, 547.
5
Vda. de Ape v. Court of Appeals, 456 SCRA 193, 2007 (2005), citing Felices v. Colegado,
35 SCRA 173.
272
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 273
CO-OWNERSHIP
manifestation of the private right of dominion, where in lieu of its being
exercised by the owner in an inclusive manner over things or rights,
there are two or more owners.6
[62.2.2] Unity of the Object
There must be unity of the object (or material indivision), which
means that there is a single object which is not materially divided, and
which is the element which binds the subjects.7 The juridical concept
of co-ownership is unity of the object or property and plurality of
subjects.8 As a consequence, a co-owner of an undivided parcel of land
is an “owner of the whole, and over the whole he exercises the right of
dominion, but he is at the same time the owner of a portion which is
truly abstract.”9 Hence, each co-owner of property which is held pro
indiviso exercises his rights over the whole property and may use and
enjoy the same with no other limitation than that he shall not injure
the interests of his co-owners.10 The underlying rationale is that until
a division is made, the respective share of each cannot be determined
and every co-owner exercises, together with his co-participants, joint
ownership over the pro indiviso property, in addition to his use and
enjoyment of the same.11 The foregoing being the case, there is no co-
ownership when the different portions owned by different people are
already concretely determined and separately identifiable, even if not
yet technically described.12
[62.2.3] Recognition of Ideal Share
There must be recognition of ideal shares, which determines the
rights and obligations of the co-owners.13 It is a basic principle in civil
law that before a property owned in common is actually partitioned, all
that the co-owner has is an ideal or abstract quota or proportionate share
in the entire property.14
6
3 Manresa, 6th ed., 386.
7
Sanchez v. Court of Appeals, supra, p. 547.
8
Gapacan v. Omipet, 387 SCRA 383.
9
De Guia v. Court of Appeals, 413 SCRA 114, 124, Oct. 8, 2003.
10
Alejandrino v. Court of Appeals, 295 SCRA 536, 548, Sept. 17, 1998.
11
Id., citing Aguilar v. Court of Appeals, 227 SCRA 472, 480, Oct. 29, 1993.
12
Si v. Court of Appeals, 342 SCRA 653, 661, Oct. 12, 2000, citing Dela Cruz v. Cruz, 32
SCRA 307, 311 (1970).
13
Sanchez v. Court of Appeals, supra, p. 547.
14
Engreso v. Court of Appeals, 401 SCRA 217, 220, April 9, 2003.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 275
CO-OWNERSHIP
and distributed among the co-owners, the co-ownership is terminated.21
Thus, there is no co-ownership when the different portions owned
by different people are already concretely determined and separately
identifiable, even if not yet technically described.22 By way of illustration,
the exercise of the right of legal redemption granted under Article 1620
of the Civil Code presupposes the existence of co-ownership at the time
the conveyance is made by a co-owner and when it is demanded by the
other co-owner or co-owners.23 Hence, where the property had already
been partitioned judicially or extrajudicially24 or where the portion
belonging to the parties has been identified and localized,25 the right of
legal redemption cannot be invoked.
[62.5] A Co-Owner Cannot Claim A Definite Portion
By the nature of co-ownership, a co-owner cannot point to specific
portion of the property owned in common as his own because his share
therein remains intangible.26 During the existence of the co-ownership,
therefore, no co-owner can claim title to any definite portion of the
community property until the partition thereof, and prior to the partition,
all that the co-owner has is an ideal or abstract quota or proportionate
share in the entire land or thing.27 In Vda. de Cabrera v. Court of Appeals,28
however, the Supreme Court had the occasion to hold that where the
transferees of an undivided portion of the land allowed a co-owner of
the property to occupy a definite portion thereof, the possessor is in
a better condition or right than said transferees. (Potior est condition
possidentis). Such undisturbed possession, according to the Court, had
the effect of a partial partition of the co-owned property which entitles
the possessor to the definite portion which he occupies.
21
See Dela Cruz v. Cruz, 32 SCRA 307 (April 17, 1970); Umengan v. Butacan, 7 SCRA
311 (Feb. 28, 1963); Salatandol v. Retes, G.R. No. L-38120, June 28, 1988; Hernandez v. Quitain,
168 SCRA 92 (Nov. 29, 1988).
22
De Guia v. Court of Appeals, 413 SCRA 114, 124-125, Oct. 8, 2003, citing Si v. CA, 342
SCRA 653, Oct. 12, 2000.
23
Uy v. CA, 246 SCRA 703, 711, July 20, 1995.
24
Umengan v. Butacan, 7 SCRA 311, Feb. 28, 1963.
25
Salatandol v. Retes, 162 SCRA 568, June 28, 1988.
26
Vda. de Ape v. Court of Appeals, supra, 207.
27
City of Mandaluyong v. Aguilar, supra, p. 499.
28
267 SCRA 339, February 3, 1997; see also Del Campo v. Court of Appeals, 351 SCRA
1, February 1, 2001.
274 PROPERTY
[62.3] Dual Nature of Ownership in Co-Ownership
There are two kinds of ownership that exists in any co-ownership,
as follows:
[62.3.1] Ownership Over the Ideal Share
There exists in favor of each co-owner a portion which is definite
in amount but not physically and actually identified, the same being
merely ideal.15 With respect to this ideal or abstract share, a co-owner
exercises absolute ownership and he may, therefore, dispose of it in
any manner he pleases.16 This is recognized in Article 493 of the Code
which says that “each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto and he may therefore
alienate, assign or mortgage it, and even substitute another person in
its enjoyment, except when personal rights are involved. x x x”
[62.3.2] Joint Ownership Over the Whole
At the same time, each co-owner is also considered as the owner
of the whole and over the whole he exercises the right of dominion.17
The underlying reason for this is that until a division is made, the
respective share of each cannot be determined.18 However, with respect
to the whole or the pro indiviso property, every co-owner exercises joint
ownership together with his co-participants.19 For this reason, mutual
respect is observed by the co-owners in regard to the use, enjoyment
and preservation of the thing as a whole.20 This principle is recognized
in Article 486 of the Code which says that “each co-owner may use the
thing owned in common, provided he does so in accordance with the
purpose for which it is intended and in such a way as not to injure the
interest of the co-ownership or prevent the other co-owners from using
it according to their rights. xxx”
[62.4] Effect of Division or Partition
The co-ownership exists so long as the property remains
undivided. Once partition is effected or once the property is subdivided
15
3 Manresa, 6th ed., 344.
16
Id.
17
De Guia v. Court of Appeals, supra, 124.
18
Alejandrino v. Court of Appeals, supra, 548.
19
Id.
20
3 Manresa, 6th ed., 344.
276 PROPERTY
Vda. de Cabrera v. Court of Appeals
267 SCRA 339, Feb. 3, 1997
The siblings Daniel, Albertana and Felicidad, all surnamed Teokemian,
owned in common a parcel of land which they inherited from their father.
On January 16, 1950, Daniel and Albertana, without the participation of
Felicidad, executed a deed of sale in favor of Andres Orais, over a parcel of
unregistered land with an area described as 7.3720 hectares. On January 26,
1950, the land was surveyed in the name of Virgilia Orais, daughter of Andres,
and denominated as Lot No. 2239, PLS-287, Cateel Cadastre. As surveyed, it
had an area of 11.1000 hectares. On June 24, 1957, Virgilia Orais was issued
a free patent over the land. Thereafter, she was likewise issued an original
certificate of title.
Notwithstanding such sale and issuance of title in the name of Virgilia
Orais, Felicidad Teokemian remained in possession of the one-third possession
of the inherited property. She had been in possession of that portion since it
was left to her by her father in 1941.
On July 27, 1972, the one-third portion occupied by Felicidad Teokemi-
an was sold to Elano Cabrera, husband of Felicidad Cabrera, who immediately
took possession of the same. When Virgilia Orais learned that the Cabreras
were occupying a portion of the subject property, the former filed an action for
quieting of title against Felicidad Cabrera, who was already a widow at that
time.
The Supreme Court held that the action filed, which is actually for
reconveyance, was already barred by laches considering that it was filed only
after thirty years from the time that the certificate of title was obtained in 1950.
Responding to the contention raised by Virgilia Orais that laches does not apply
since what was sold to the Cabreras was a definite portion of the community
property, and, therefore, void, the Court held —
The argument that laches does not apply because what was
sold to the Cabreras was a definite portion of the community
property, and, therefore, void, is likewise untenable.
Under Article 493 of the Civil Code:
“Each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto, and even he
may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co-
ownership.”
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 277
CO-OWNERSHIP
In Go Ong v. Court of Appeals, this Court ruled that the
heirs, as co-owners, shall each have the full ownership of his part
and the fruits and benefits pertaining to it. An heir may, therefore,
alienate, assign or mortgage it, and even substitute another person
in its enjoyment, except when personal rights are involved. But the
effect of the alienation or mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.
Undisputed is the fact that since the sale of the two-third
portion of the subject property to the plaintiff, the latter had
allowed Felicidad Teokemian to occupy that one-third portion
allotted to her. There has, therefore, been a partial partition, where
the transferees of an undivided portion of the land allowed a co-
owner of the property to occupy a definite portion thereof and
has not disturbed the same, for a period too long to be ignored
— the possessor is in a better condition or right (Potior est conditio
possidentis).
Clearly, the plaintiff in this instance is barred from asserting
her alleged right over the portion subject matter in the instant case
on the ground that their right has been lost by laches. In Bailon-
Casilao v. Court of Appeals, we ruled that:
“As early as 1923, this Court has ruled that even if a co-
owner sells the whole property as his, the sale will affect only his
own share but not those of the other co-owners who did not con-
sent to the sale (Punzalan v. Boon Liat, 44 Phil. 320 [1923]). This
is because under the aforementioned codal provision, the sale or
other disposition affects only his undivided share and the transfer-
ee gets only what would correspond to his grantor in the partition
of the things owned in common (Ramirez v. Bautista, 14 Phil. 528
[1909]). xxx For Article 494 of the Civil Code explicitly declares:
“No prescription shall lie in favor of a co-owner or co-heir so long
as he expressly or impliedly recognizes the co-ownership.”
[62.6] Distinguished From Partnership
Co-ownership does not of itself establish a partnership, whether
such co-owners do or do not share any profits made by the use of
the property.29 These two concepts are not identical and they may be
distinguished from each other, as follows:
29
Art. 1769(2), NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 279
CO-OWNERSHIP
(7) As to the power to act with third persons: In co-ownership,
a co-owner does not represent the co-ownership but a partner usually
represents the partnership and may bind the partnership.
[62.7] Sources of Co-ownership
Co-ownership may be created by any of the following causes:
(1) By law: Examples:
(a) Co-ownership will arise if by the will of their owners
two things of the same kind or different kinds are
mixed.37 Co-ownership will likewise arise if by the will
of only one owner, but in good faith, two things of the
same or different kinds are mixed or confused.38
(b) When a man and woman who are capacitated to marry
each other, live exclusively with each other as husband
and wife without the benefit of marriage or under a
void marriage, the property acquired by both of them
through their work or industry shall be governed by the
rules on co-ownership.39 In cases of cohabitation not
falling under Article 147 of the Family Code, only the
properties acquired by both of the parties though their
actual joint contribution of money, property, or industry
shall be owned by them in common in proportion to
their respective contributions.40
(2) By contract: An agreement to keep the thing undivided for a
certain period, not exceeding ten years, shall be valid. This term may be
extended by a new agreement.41
(3) By succession: Where there are two or more heirs, the whole
estate of the decedent is, before its partition, owned in common by such
heirs, subject to the payment of debts of the deceased.42 The testator may
37
Art. 472, NCC.
38
Art. 473, NCC.
39
Art. 147, Family Code of the Philippines.
40
Art. 148, Family Code of the Philippines.
41
Art. 494, 2nd par., NCC.
42
Art. 1078, NCC.
278 PROPERTY
(1) As to creation: Co-ownership may exist without the necessity
of a contract. As will be discussed in infra § 62.7, a co-ownership is
created not only by reason of contracts. A partnership, on the other hand,
requires the existence of a contract in order to arise. The definition by
the Civil Code of a partnership refers to it as a contract.30
(2) As to personality: A co-ownership does not possess a
juridical personality distinct from the co-owners. On the other hand, the
partnership has a juridical personality separate and distinct from that of
each of the partners.31
(3) As to purpose: In order to constitute a partnership, it is
important that there must be an agreement to divide the profits among
the partners.32 Hence, the idea of common profit that may be derived
from the things or services contributed to the partnership is an essential
feature thereof. This is absent, however, in co-ownership, which is only
for the purpose of common enjoyment of the thing owned in common.
(4) As to duration: In co-ownership, an agreement not to divide
the property for more than ten (10) years is not valid with respect to the
excess;33 whereas, in partnership there is no limit as to the time of its
existence.
(5) As to the effect of death: In co-ownership, the death of a co-
owner does not dissolve the co-ownership, but in partnership the death
of a partner brings about the dissolution of the partnership.34
(6) As to the disposal of share: In co-ownership, a co-owner
may freely dispose of his share35 but a partner has no power of disposal
so as to make the buyer a partner unless agreed upon by all the other
partners.36
30
“Art. 1767. By the contract of partnership two or more persons bind themselves to con-
tribute money, property, or industry to a common fund, with the intention of dividing the profits
among themselves.
Two or more persons may also form a partnership for the exercise of a profession.
(1665a)”
31
Art. 1768, NCC.
32
Art. 1767, NCC.
33
Art. 494, 2nd par., NCC.
34
Art. 1830(5), NCC.
35
Art. 493, NCC.
36
Art. 1813, NCC.
280 PROPERTY
likewise prohibit the partition of the estate among the heirs for a period
not to exceed twenty (20) years.43
(4) By fortuitous event or chance: Co-ownership will arise if
two things of the same kind or different kinds are mixed by chance and
the things are not separable without injury.44
(5) By occupancy: As when two or more persons catch a wild
pig or get forest products45 or when a hidden treasure is accidentally
discovered by a stranger, who is not a trespasser, on the land of
another.46
[62.8] Rules Governing Co-Ownership
The rules that shall govern a particular co-ownership will depend
on the source thereof, as follows:
[62.8.1] Contract
If the source of co-ownership is a contract, such co-ownership
is to be governed primarily by the contract between the parties and,
in default thereof, by the provisions of Articles 484 to 501 of the New
Civil Code.47
[62.8.2] Special Provisions of Law
If the co-ownership is governed by special provisions of law, such
provisions shall primarily govern the co-ownership while the provisions
of Articles 484 to 501 shall be applied only in a suppletory character.48 In
the property regime known as the “absolute community,” for example,
the spouses are considered co-owners of all property brought into and
acquired during the marriage which are not otherwise excluded from
the community property either by the provisions of the Family Code
or by the marriage settlement.49 If the regime of absolute community
applies to the spouses by default pursuant to the provisions of Article 75
of the Family Code, then the provisions of the Family Code on absolute
43
Art. 1083, NCC.
44
Art. 472, NCC.
45
Punzalan v. Boon Liat, 44 Phil. 320.
46
Art. 438, 2nd par., NCC.
47
See Art. 484, 2nd par., NCC.
48
Art. 484, 2nd par., NCC.
49
See Rabuya, “The Law on Persons and Family Relations,” 2006 ed., 421.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 281
CO-OWNERSHIP
community shall primarily govern50 and the provisions of the Civil Code
on co-ownership shall apply in a suppletory manner.51 The applicability
of the provisions of the Civil Code on co-ownership to the regime of
absolute community is recognition that this regime is a special kind of
co-ownership.52 Under the provisions of the Civil Code on co-ownership,
it is provided that if the co-ownership is created by law, such kind of co-
ownership shall be governed primarily by the special provisions of law
creating it and the provisions of the Civil Code on co-ownership shall
only apply in a suppletory manner.53
Art. 485. The share of the co-owners, in the benefits as well as in the
charges, shall be proportional to their respective interests. Any stipula-
tion in a contract to the contrary shall be void.
The portions belonging to the co-owners in the co-ownership shall
be presumed equal, unless the contrary is proved. (393a)
§ 63. Share in Benefits and Charges
[63.1] Determining the Ideal Share of Each Co-Owner
The share of each co-owner in the co-ownership is that provided
for in the law governing such kind of co-ownership. For example, in
confusion or commixtion that occurs through chance or through the will
of one of the parties acting in good faith, the share of each co-owner is
in proportion to the part belonging to him, bearing in mind the value of
the things mixed or confused.54 Also, the share of the finder, who is not
a trespasser, and the owner of the property where the hidden treasure is
found by chance, is provided for by law, in that, each shall be entitled to
one-half of such treasure.55
If the source of co-ownership, however, is contract, the share of
the co-owner in the thing itself may depend on their agreement and, in
default thereof, it is presumed to be equal in the absence of proof to
the contrary.56 To illustrate: Pedro, Juan and Jose decide to buy a house
50
Id., 422, citing Art. 74(2), Family Code.
51
Id., 422, citing Art. 90, Family Code.
52
Id., 422.
53
Id., 422, citing Art. 484, 2nd par., NCC.
54
Arts. 472 and 473, NCC.
55
Art. 438, 2nd par., NCC.
56
Art. 485, 2nd par., NCC; see also Lavadia v. Cosme, 72 Phil. 196.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 283
CO-OWNERSHIP
and in such a way as not to injure the interest of the co-ownership or
prevent the other co-owners from using it according to their rights. The
purpose of the co-ownership may be changed by agreement, express or
implied. (394a)
§ 64. Right Over the Entire Property
[64.1] Nature of Co-Owner’s Right Over the Entire Thing or Right
A co-owner of an undivided thing or right is an owner of the whole
and over the whole he exercises the right of dominion.59 However,
with respect to the whole, a co-owner exercises, together with his co-
participants (or co-owners) joint ownership over the co-owned property,
the reason being that until a division is made, the respective share of
each cannot as yet be determined.60 As a consequence, each co-owner
has the right to make use of the entire thing owned in common61 subject
to the limitations provided for in Article 486 of the Civil Code. Thus,
the right of enjoyment by each co-owner is limited by a similar right of
the other co-owners.62
[64.2] Use of the Thing Owned in Common
A co-owner may use the entire thing so long as the use is in
accordance with the purpose for which it is intended and in a manner
not injurious to the interest of the other co-owners.63 Each co-owner of
property held pro indiviso exercises his rights over the whole property
and may use and enjoy the same with no other limitation than that he
shall not injure the interests of his co-owners, the reason being that until
a division is made, the respective share of each cannot be determined
and every co-owner exercises, together with his co-participants joint
ownership over the pro indiviso property, in addition to his use and
enjoyment of the same.64
59
De Guia v. CA, 413 SCRA 114, 124 (2003).
60
Aguilar v. CA, 227 SCRA 473, 480 (1993).
61
Art. 486, NCC.
62
De Guia v. CA, supra, p. 127.
63
Art. 486, NCC.
64
Aguilar v. CA, 227 SCRA 473, 480, Oct. 29, 1993, citing Pardell v. Matilde, 23 Phil. 450
(1912).
282 PROPERTY
and lot in the amount of P900,000.00. They may agree in any manner
as to how much each shall contribute. They may agree, for example,
that Pedro shall contribute P450,000 (50%), Juan P225,000 (25%) and
Jose P225,000 (25%). Notwithstanding such manner of contribution,
the parties may nonetheless agree that their respective share in the co-
ownership shall be equal. In the absent of such contrary agreement, it
is understood that the share of each co-owner shall be in proportion to
their respective contributions. The presumption of equal sharing does
not apply in this case since there is proof to the contrary.
[63.2] Determining the Share In Benefits and Charges
The Civil Code declares that “the share of the co-owners, in
the benefits as well as in the charges, shall be proportional to their
respective interests” in the co-ownership.57 In the above example, if
the co-owners have agreed that their share in the co-ownership shall
be in proportion to their respective contributions, then all benefits and
charges shall likewise be divided among them in proportion to their
share in the capital. Thus, if they will earn monthly rental income in the
amount of P30,000 from the co-owned property, Pedro shall be entitled
to P15,000 (50%), Juan P7,500 (25%) and Jose P75,000 (25%). In the
same way, if they will incur real estate tax obligation in the sum of
P9,000, Pedro will have to shoulder P4,500 (50%), Juan P2,250 (25%)
and Jose P2,250 (25%).
[63.3] Any Stipulation To The Contrary Is Void
As discussed earlier, the share of each co-owner in the benefits
as well as in the charges should be proportional to their respective
interests in the co-ownership. The Civil Code further declares that “any
stipulation to the contrary shall be void.”58 Thus, in the above example,
Pedro, Juan and Jose may not agree that they shall share equally in the
rental income and in the payment of the real estate tax. Such agreement
is void.
Art. 486. Each co-owner may use the thing owned in common, pro-
vided he does so in accordance with the purpose for which it is intended
57
Art. 485, 1st par., NCC.
58
Id.
284 PROPERTY
Pardell v. Bartolome
23 Phil. 450 (1912)
In this case, the sisters Matilde and Vicenta Ortiz (plaintiff) were co-
owners of a two-storey house designed as a dwelling. Matilde (defendant)
and her husband occupied the upper floor as their dwelling. The husband also
occupied the upper floor on the ground floor as an office while the other rooms
were rented as stores. Meanwhile, plaintiff and her husband were living abroad
and upon their return an accounting of rents was made to them. The question
arose as to whether or not defendants should pay rent for the upper floor
occupied by them as well as that portion occupied by the husband.
Ruling: With regard to that part occupied by Matilde as dwelling, no
rental can be collected inasmuch as she, being the co-owner, is entitled to use
the same. With respect, however, to that portion occupied by the husband,
Bartolome, the latter must pay one-half of the rentals which said quarters could
and should have produced had they have been rented to strangers, inasmuch as
he is not a co-owner of the property.
[64.3] Limitations on the Right to Use
Although each co-owner is the owner of the whole thing prior to
partition and may make use of the entire thing, such use is, however,
subject to the following limitations: (1) such use must be in accordance
with the purpose for which the thing is intended; (2) such use must be
without prejudice to the rights of the other co-owners; and (3) such use
must not be in a manner as to prevent the other co-owners from using
the thing according to their own right.65
The right of enjoyment by each co-owner is limited by a similar
right of the other co-owners. Thus, a co-owner cannot devote common
property to his exclusive use to the prejudice of the co-ownership.66
Hence, if the subject is a residential house, all the co-owners may live
there with their respective families to the extent possible. However, if
one co-owner alone occupies the entire house without opposition from
the other co-owners, and there is no lease agreement, the other co-
owners cannot demand the payment of rent.67 Conversely, if there is an
65
Art. 486, NCC.
66
De Guia v. Court of Appeals, 413 SCRA 114, 127, Oct. 8, 2003, citing Tolentino, Civil
Code of the Philippines, Vol. II, 1992 ed.
67
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CO-OWNERSHIP
agreement to lease the house, the co-owners can demand rent from the
co-owner who dwells in the house.68
The co-owners can either exercise an equal right to live in the
house, or agree to lease it. If they fail to exercise any of these options,
they must bear the consequences. It would be unjust to require the co-
owner to pay rent after the co-owners by their silence have allowed him
to use the property.69
In case the co-owners agree to lease a building owned in common,
a co-owner cannot retain it for his use without paying the proper rent.70
Moreover, where part of the property is occupied exclusively by some
co-owners for the exploitation of an industry, the other co-owners
become co-participants in the accessions of the property and should
share in its net profits.71
Aguilar v. Court of Appeals
227 SCRA 473 (1993)
In this case, the brothers Virgilio and Senen Aguilar purchased a house
and lot in 1968 for the use of their father. The brothers agreed that Senen
(respondent) shall assume the remaining obligation of the original owners
with the Social Security System in exchange for his possession and enjoyment
of the house together with their father. Since Virgilio (petitioner) was then
disqualified from obtaining a loan from SSS, the brothers agreed that the deed
of sale would be executed and the title registered in the meantime in the name
of Senen. After their father died in 1974, Virgilio demanded from Senen that
the latter vacate the house and that the property be sold and the proceeds thereof
divided among them. Because of the refusal of Senen to give in to Virgilio’s
demands, the latter filed in 1979 an action to compel the sale of the co-owned
property so that they could divide the proceeds between them. A question arose
as to whether or not Senen should pay rent from the time their father died in
1975. The Supreme Court held —
We uphold the trial court in ruling in favor of petitioner,
except as to the effectivity of the payment of monthly rentals by
respondent as co-owner which we here declare to commence only
after the trial court ordered respondent to vacate in accordance
with its order of 26 July 1979.
68
Id.
69
Id., p. 128, citing Tolentino, Civil Code of the Philippines, Vol. II, 1992 ed.
70
Id.
71
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CO-OWNERSHIP
and the right to enjoy the possession jointly also ceased. Thereafter,
the continued stay of respondent and his family in the house
prejudiced the interest of petitioner as the property should have
been sold and the proceeds divided equally between them. To
this extent and from then on, respondent should be held liable for
monthly rentals until he and his family vacate.
De Guia v. Court of Appeals
413 SCRA 114 (2003)
The subject of the dispute in this case are two undivided parcels of land
used as a fishpond situated in Meycauayan, Bulacan. The property is registered
under the names of Primitiva Lejano and Lorenza Araniego under TCT No.
6358 of the Bulacan Register of Deeds, as follows: Primitiva Lejano (1/2
share) and Lorenza Araniego (1/2 share). The 1/2 undivided share of Lorenza
Araniego Abejo was acquired by her sole heir, Teofilo Abejo, through intestate
succession. Teofilo Abejo, in turn, sold this 1/2 undivided share to his son, Jose
Abejo, on November 22, 1983. The 1/2 undivided share of Primitiva Lejano,
on the other hand, was passed on to her heirs. Prior to the sale in favor of Jose
Abejo, the heirs of Primitiva Lejano entered into a lease contract with Manuel
De Guia in 1974 over the entire fishpond, with the knowledge and consent of
Teofilo Abejo. The lease contract was effective from 1974 to November 30,
1979. Subsequently, De Guia acquired the 1/2 undivided share of the heirs of
Primitiva Lejano. Thus, after the expiration of the lease contract in 1979, De
Guia remained in possession of the entire fishpond. On November 27, 1983,
Jose Abejo demanded from De Guia that the latter vacate the fishpond and pay
the back rentals. When De Guia refused, Abejo instituted on May 12, 1986 an
action for recovery of possession with damages against De Guia.
After trial, the trial court ruled that Abejo has the right to demand that
De Guia vacate and surrender an area equivalent to Abejo’s ½ undivided share
in the fishpond. The trial court likewise ruled that pending partition, De Guia
should pay a reasonable amount as rental for the use of Abejo’s share in the
fishpond. Not satisfied with the decision of the trial court, De Guia filed an
appeal before the Court of Appeals. The Court of Appeals, however, sustained
the decision of the trial court. Thus, De Guia filed his appeal before the Supreme
Court.
In his appeal, De Guia contends, among others, that the trial and appellate
courts erred when they ordered the recovery of rent when the exact identity of
the portion in question had not yet been clearly defined and delineated. He
contends that an order to pay damages in the form of rent is premature before
partition. In denying his contention, the Supreme Court explained —
285 286 PROPERTY
Article 494 of the Civil Code provides that no co-owner shall
be obliged to remain in the co-ownership, and that each co-owner
may demand at any time partition of the thing owned in common
insofar as his share is concerned. Corollary to this rule, Art. 498 of
the Code states that whenever the thing is essentially, indivisible
and the co-owners cannot agree that it be, allotted to one of them
who shall indemnify the others, it shall be sold and its proceeds
accordingly distributed. This is resorted to (a) when the right to
partition the property is invoked by any of the co-owners but
because of the nature of the property it cannot be subdivided or its
subdivision would prejudice the interests of the co-owners, and (b)
the co-owners are not in agreement as to who among them shall be
allotted or assigned the entire property upon proper reimbursement
of the co-owners. In one case, this Court upheld the order of the
trial court directing the holding of a public sale of the properties
owned in common pursuant to Art. 498 of the Civil Code.
However, being a co-owner respondent has the right to use
the house and lot without paying any compensation to petitioner,
as he may use the property owned in common so long as it is
in accordance with the purpose for which it is intended and in
a manner not injurious to the interest of the other co-owners.
Each co-owner of property held pro indiviso exercises his rights
over the whole property and may use and enjoy the same with
no other limitation than that he shall not injure the interests of
his co-owners, the reason being that until a division is made, the
respective share of each cannot be determined and every co-owner
exercises, together with his co-participants joint ownership over
the pro indiviso property, in addition to his use and enjoyment of
the same.
Since petitioner has decided to enforce his right in court
to end the co-ownership of the house and lot and respondent has
not refuted the allegation that he has been preventing the sale of
the property by his continued occupancy of the premises, justice
and equity demand that respondent and his family vacate the
property so that the sale can be effected immediately. In fairness to
petitioner, respondent should pay a rental of P1,200.00 per month,
with legal interest; from the time the trial court ordered him to
vacate, for the use and enjoyment of the other half of the property
appertaining to petitioner.
When petitioner filed an action to compel the sale of the
property and the trial court granted the petition and ordered the
ejectment of respondent, the co-ownership was deemed terminated
287 288 PROPERTY
“The right of enjoyment by each co-owner is limited by a
similar right of the other co-owners. A co-owner cannot devote
common property to his exclusive use to the prejudice of the co-
ownership. Hence, if the subject is a residential house, all the co-
owners may live there with their respective families to the extent
possible. However, if one co-owner alone occupies the entire
house without opposition from the other co-owners, and there is no
lease agreement, the other co-owners cannot demand the payment
of rent. Conversely, if there is an agreement to lease the house, the
co-owners can demand rent from the co-owner who dwells in the
house.
The co-owners can either exercise an equal right to live
in the house, or agree to lease it. If they fail to exercise any of
these options, they must bear the consequences. It would be unjust
to require the co-owner to pay rent after the co-owners by their
silence have allowed him to use the property.
In case the co-owners agree to lease a building owned in
common, a co-owner cannot retain it for his use without paying
the proper rent. Moreover, where part of the property is occupied
exclusively by some co-owners for the exploitation of an industry,
the other co-owners become co-participants in the accessions of
the property and should share in its net profits.
The Lejano Heirs and Teofilo Abejo agreed to lease the
entire FISHPOND to DE GUIA. After DE GUIA’s lease expired in
1979, he could no longer use the entire FISHPOND without paying
rent. To allow DE GUIA to continue using the entire FISHPOND
without paying rent would prejudice ABEJO’s right to receive rent,
which would have accrued to his 1/2 share in the FISHPOND had
it been leased to others. Since ABEJO acquired his 1/2 undivided
share in the FISHPOND on 22 November 1983, DE GUIA should
pay ABEJO reasonable rent for his possession and use of ABEJO’s
portion beginning from that date. The compensatory damages of
P25,000 per year awarded to ABEJO is the fair rental value or
the reasonable compensation for the use and occupation of the
leased property, considering the circumstances at that time. DE
GUIA shall continue to pay ABEJO a yearly rent of P25,000
corresponding to ABEJO’s 1/2 undivided share in the FISHPOND.
However, ABEJO has the option either to exercise an equal right
to occupy the FISHPOND, or to file a new petition before the trial
court to fix a new rental rate in view of changed circumstances in
the last 20 years.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CO-OWNERSHIP
ABEJO made an extrajudicial demand on DE GUIA by
sending the 27 November 1983 demand letter. Thus, the rent in
arrears should earn interest at 6% per annum from 27 November
1983 until finality of this decision pursuant to Article 2209 of the
Civil Code. Thereafter, the interest rate is 12% per annum from
finality of this decision until full payment.”
[64.4] Determining the Purpose
To determine the purpose for which the property held in common
is intended the agreement, express or implied, of the parties will first
govern. In default of such an agreement, it is understood that the thing
is intended for that use for which it is ordinarily adapted according to its
nature.72 Thus, if the co-owners of a residential house agree that it shall
be used as a warehouse then each co-owner must use it only for that
purpose but, if there is no purpose agreed upon, then such house may be
used according to its nature and that is for dwelling purposes.
Art. 487. Any one of the co-owners may bring an action in ejectment.
(n)
§ 65. Action in Ejectment
[65.1] Scope of Term “Ejectment”
Article 487 of the New Civil Code provides that anyone of the
co-owners of an immovable may bring an action in ejectment. A co-
owner may thus bring an ejectment action without joining the other
co-owners, the suit being deemed instituted for the benefit of all.73 And
the term, “action in ejectment,” not only includes a suit of forcible entry
(detentacion) or unlawful detainer (desahucio),74 but all kinds of actions
for the recovery of possession, including an accion publiciana and a
reinvindicatory action.75
72
3 Manresa, 6th ed., 424.
73
Sering v. Plazo, 166 SCRA 84, 85 (1988), citing Tolentino, Civil Code, 1983 ed., Vol.
II, p. 157.
74
Id.
75
See De Guia v. Court of Appeals, 413 SCRA 114, 125 (2003); Baloloy v. Hular, 438
SCRA 80, Sep. 9, 2004; and Adlawan v. Adlawan, 479 SCRA 275, Jan. 20, 2006.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CO-OWNERSHIP
such co-owners were aware of the case in the trial court. The
trial court rendered judgment declaring the respondent as
the sole owner of the property and entitled to its possession,
to the prejudice of the latter’s siblings. Patently then, the
decision of the trial court is erroneous.
Under Section 7, Rule 3 of the Rules of Court, the
respondent was mandated to implead his siblings, being co-
owners of the property, as parties. The respondent failed to
comply with the rule. It must, likewise, be stressed that the
Republic of the Philippines is also an indispensable party
as defendant because the respondent sought the nullification
of OCT No. P-16540 which was issued based on Free
Patent No. 384019. Unless the State is impleaded as party-
defendant, any decision of the Court would not be binding on
it. It has been held that the absence of an indispensable party
in a case renders ineffective all the proceedings subsequent
to the filing of the complaint including the judgment. The
absence of the respondent’s siblings, as parties, rendered all
proceedings subsequent to the filing thereof, including the
judgment of the court, ineffective for want of authority to
act, not only as to the absent parties but even as to those
present.79
In Adlawan v. Adlawan,80 the Court likewise sustained the dismissal
of the complaint for ejectment on the ground that the suit was brought in
the name of the plaintiff alone and for his own benefit to the exclusion
of the other co-owners. In fact, the plaintiff therein did not recognize
the co-ownership and, in fact, vigorously asserted absolute and sole
ownership of the questioned lot.
The Adlawan and Baloloy cases must therefore be distinguished
from other cases where the Court upheld the right of a co-owner to file
a suit pursuant to Article 487 of the Civil Code. In Resuena v. Court of
Appeals,81 and Sering v. Plazo,82 for example, the co-owners who filed
the ejectment case did not represent themselves as the exclusive owner
79
At pp. 90-92.
80
Supra.
81
454 SCRA 42 (2005).
82
Supra.
289 290 PROPERTY
[65.2] Action Must Be Instituted For All
However, if the action is for the benefit of the plaintiff alone who
claims to be the sole owner and entitled to the possession thereof, the
action will not prosper unless he impleads the other co-owners who are
indispensable parties.76 As noted by Former Supreme Court Associate
Justice Edgrado L. Paras “[i]t is understood, of course, that the action
[under Article 487 of the Civil Code] is being instituted for all. Hence,
if the co-owner expressly states that he is bringing the case only for
himself, the action should not be allowed to prosper.”77
In Baloloy v. Hular,78 for example, the respondent therein filed
a complaint for quieting of title claiming exclusive ownership of the
property, but the evidence showed that respondent has co-owners over
the property. In dismissing the complaint for want of respondent’s
authority to file the case, the Supreme Court held that —
Under Article 487 of the New Civil Code, any of the
co-owners may bring an action in ejectment. This article
covers all kinds of actions for the recovery of possession,
including an accion publiciana and a reinvidicatory action.
A co-owner may bring such an action without the necessity
of joining all the other co-owners as co-plaintiffs because
the suit is deemed to be instituted for the benefit of all. Any
judgment of the court in favor of the co-owner will benefit
the others but if such judgment is adverse, the same cannot
prejudice the rights of the unimpleaded co-owners. If the
action is for the benefit of the plaintiff alone who claims
to be the sole owner and entitled to the possession thereof,
the action will not prosper unless he impleads the other co-
owners who are indispensable parties.
In this case, the respondent alone filed the complaint,
claiming sole ownership over the subject property and praying
that he be declared the sole owner thereof. There is no proof
that the other co-owners had waived their rights over the
subject property or conveyed the same to the respondent or
76
Baloloy v. Hular, supra, 91; also in Adlawan v. Adlawan, supra.
77
Paras, Civil Code of the Philippines Annotated, Vol. II, 1999 ed., p. 294, cited in Adlawan
v. Adlawan, supra, 286.
78
Supra.
291 292 PROPERTY
of the property. In Celino v. Heirs of Alejo and Teresa Santiago,83 the
complaint for quieting of title was brought in behalf of the co-owners
precisely to recover lots owned in common. Similarly in Vencilao v.
Camarenta,84 the amended complaint specified that the plaintiff is one
of the heirs who co-owns the controverted properties. In all these cases,
the plaintiff never disputed the existence of a co-ownership nor claimed
to be the sole or exclusive owner of the litigated lot. Thus, a favorable
decision therein would of course inure to the benefit not only of the
plaintiff but to his co-owners as well.
[65.3] Action Available Even Against A Co-Owner
Any co-owner may file an action under Article 487 not only against
a third person, but also against another co-owner who takes exclusive
possession and asserts exclusive ownership of the property.85 In the latter
case, however, the only purpose of the action is to obtain recognition of
the co-ownership.86 The plaintiff cannot seek exclusion of the defendant
from the property because as co-owner he has a right of possession.87
In other words, the plaintiff cannot recover any material or determinate
part of the property.88 This is based on the principle that a co-owner has
no right to demand a concrete, specific or determinate part of the thing
owned in common because until division is effected his right over the
thing is represented only by an ideal portion.89 Such being the case, the
court cannot, in the action filed by a co-owner against another co-owner
under Article 487, proceed with the actual partitioning of the co-owned
property.90 Judicial or extra-judicial partition is still necessary to effect
such physical division.91
83
435 SCRA 690 (2004).
84
85
140 Phil. 99.
De Guia v. Court of Appeals, supra, 125, citing Arturo M. Tolentino, Civil Code of the
Philippines, Vol. II, 1992 Ed. See also Engreso v. Dela Cruz, 401 SCRA 217 (2003).
86
Id.
87
Id.
88
Id.
89
Engreso v. Dela Cruz, 401 SCRA 217 (2003).
90
De Guia v. Court of Appeals, supra.
91
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 293
CO-OWNERSHIP
De Guia v. Court of Appeals
413 SCRA 114 (Oct. 8, 2003)
The subject of the dispute in this case are two undivided parcels of land
used as a fishpond situated in Meycauayan, Bulacan. The property is registered
under the names of Primitiva Lejano and Lorenza Araniego under TCT No.
6358 of the Bulacan Register of Deeds, as follows: Primitiva Lejano (1/2
share) and Lorenza Araniego (1/2 share). The 1/2 undivided share of Lorenza
Araniego Abejo was acquired by her sole heir, Teofilo Abejo, through intestate
succession. Teofilo Abejo, in turn, sold this 1/2 undivided share to his son, Jose
Abejo, on November 22, 1983. The 1/2 undivided share of Primitiva Lejano,
on the other hand, was passed on to her heirs. Prior to the sale in favor of Jose
Abejo, the heirs of Primitiva Lejano entered into a lease contract with Manuel
De Guia in 1974 over the entire fishpond, with the knowledge and consent of
Teofilo Abejo. The lease contract was effective from 1974 to November 30,
1979. Subsequently, De Guia acquired the 1/2 undivided share of the heirs of
Primitiva Lejano. Thus, after the expiration of the lease contract in 1979, De
Guia remained in possession of the entire fishpond. On November 27, 1983,
Jose Abejo demanded from De Guia that the latter vacate the fishpond and pay
the back rentals. When De Guia refused, Abejo instituted on May 12, 1986 an
action for recovery of possession with damages against De Guia.
After trial, the trial court ruled that Abejo has the right to demand that
De Guia vacate and surrender an area equivalent to Abejo’s 1/2 undivided
share in the fishpond. The trial court likewise ruled that pending partition, De
Guia should pay a reasonable amount as rental for the use of Abejo’s share
in the fishpond. Not satisfied with the decision of the trial court, De Guia
filed an appeal before the Court of Appeals. The Court of Appeals, however,
sustained the decision of the trial court. Thus, De Guia filed his appeal before
the Supreme Court.
In his appeal, De Guia contends, among others, that a co-owner cannot
claim a definite portion from the property owned in common until there is a
partition. De Guia argues that Abejo should have filed an action for partition
instead of recovery of possession since the court cannot implement any decision
in the latter case without first a partition. Finding merit in this argument, the
Supreme Court ruled, as follows:
“Article 487 of the Civil Code provides, ‘[a]ny one of the
co-owners may bring an action in ejectment.’ This article covers
all kinds of actions for the recovery of possession. Article 487
includes forcible entry and unlawful detainer (accion interdictal),
recovery of possession (accion publiciana), and recovery of
ownership (accion de reivindicacion). The summary actions of
forcible entry and unlawful detainer seek the recovery of physical
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 295
CO-OWNERSHIP
undivided share by offering to settle the case for P300,000 and to
vacate the property. During the trial proper, neither DE GUIA nor
ABEJO asserted or manifested a claim of absolute and exclusive
ownership over the entire FISHPOND. Before this Court, DE GUIA
limits the issues to the propriety of bringing an action for recovery
of possession and the recovery of compensatory damages.
Following the inherent and peculiar features of co-ownership,
while ABEJO and DE GUIA have equal shares in the FISHPOND
quantitatively speaking, they have the same right in a qualitative
sense as co-owners. Simply stated, ABEJO and DE GUIA are
owners of the whole and over the whole, they exercise the right of
dominion. However, they are at the same time individual owners of
a 1/2 portion, which is truly abstract because until there is partition,
such portion remains indeterminate or unidentified. As co-owners,
ABEJO and DE GUIA may jointly exercise the right of dominion
over the entire FISHPOND until they partition the FISHPOND by
identifying or segregating their respective portions.
Since a co-ownership subsists between ABEJO and DE
GUIA, judicial or extra-judicial partition is the proper recourse.
An action to demand partition is imprescriptible and not subject
to laches. Each co-owner may demand at any time the partition
of the common property unless a co-owner has repudiated the co-
ownership under certain conditions. Neither ABEJO nor DE GUIA
has repudiated the co-ownership under the conditions set by law.
To recapitulate, we rule that a co-owner may file an action
for recovery of possession against a co-owner who takes exclusive
possession of the entire co-owned property. However, the only
effect of such action is a recognition of the co-ownership. The
courts cannot proceed with the actual partitioning of the co-owned
property. Thus, judicial or extra-judicial partition is necessary to
effect physical division of the FISHPOND between ABEJO and
DE GUIA. An action for partition is also the proper forum for
accounting the profits received by DE GUIA from the FISHPOND.
However, as a necessary consequence of such recognition, ABEJO
shall exercise an equal right to possess, use and enjoy the entire
FISHPOND.”
[65.4] Effect of Judgment Upon the Other Co-Owners
While a co-owner may bring an action in ejectment under Article
487 without the necessity of joining all the other co-owners as co-
294 PROPERTY
possession only. These actions are brought before municipal trial
courts within one year from dispossession. However, accion
publiciana, which is a plenary action for recovery of the right to
possess, falls under the jurisdiction of the proper regional trial
court when the dispossession has lasted for more than one year.
Accion de reivindicacion, which seeks the recovery of ownership,
also falls under the jurisdiction of the proper regional trial court.
Any co-owner may file an action under Article 487 not only
against a third person, but also against another co-owner who
takes exclusive possession and asserts exclusive ownership of the
property. In the latter case, however, the only purpose of the action
is to obtain recognition of the co-ownership. The plaintiff cannot
seek exclusion of the defendant from the property because as co-
owner he has a right of possession. The plaintiff cannot recover
any material or determinate part of the property.
In Hermogena G. Engreso with Spouse Jose Engreso v.
Nestoria De la Cruz and Herminio De La Cruz (401 SCRA 217),
we reiterated the rule that a co-owner cannot recover a material
or determinate part of a common property prior to partition as
follows:
It is a basic principle in civil law that before a
property owned in common is actually partitioned,
all that the co-owner has is an ideal or abstract quota
or proportionate share in the entire property. A co-
owner has no right to demand a concrete, specific
or determinate part of the thing owned in common
because until division is effected his right over the
thing is represented only by an ideal portion.
As such, the only effect of an action brought
by a co-owner against a co-owner will be to obtain
recognition of the co-ownership; the defendant cannot
be excluded from a specific portion of the property
because as a co-owner he has a right to possess and the
plaintiff cannot recover any material or determinate
part of the property. Thus, the courts a quo erred
when they ordered the delivery of one-half (1/2) of the
building in favor of private respondent.
Indisputably, DE GUIA has been in exclusive possession of
the entire FISHPOND since July 1974. Initially, DE GUIA disputed
ABEJO’s claim of ownership over the 1/2 undivided portion of the
FISHPOND. Subsequently, he implicitly recognized ABEJO’s 1/2
296 PROPERTY
plaintiffs because the suit is deemed to be instituted for the benefit of all,
any adverse judgment cannot prejudice the rights of the unimpleaded
co-owners.92 However, any judgment of the court in favor of the co-
owner will benefit the others.93
Art. 488. Each co-owner shall have a right to compel the other co-
owners to contribute to the expenses of preservation of the thing or right
owned in common and to the taxes. Any one of the latter may exempt him-
self from this obligation by renouncing so much of his undivided interest
as may be equivalent to his share of the expenses and taxes. No such
waiver shall be made if it is prejudicial to the co-ownership. (395a)
Art. 489. Repairs for preservation may be made at the will of one of
the co-owners, but he must, if practicable, first notify his co-owners of the
necessity for such repairs. Expenses to improve or embellish the thing
shall be decided upon by a majority as determined in Article 492. (n)
§ 66. Expenses for Preservation
[66.1] Right To Demand Contribution
The law grants each co-owner the right to demand contribution
from the other co-owners for any and all expenses he incurred for the
purpose of preserving the thing or right owned in common,94 even if the
repairs for preservation were made without the consent of the other co-
owners. Note that under Article 489, a co-owner who desires to make
the necessary repairs is not required to secure the consent of all the co-
owners. What the law requires is that he must, if practicable, notify the
other co-owners of the necessity of such repair prior to undertaking the
same. Consequently, any opposition on the part of the other co-owners
for the making of such necessary repairs does not deprive the co-owner
who made the advances from demanding contributions from the other
co-owners. Note that under the law,95 repairs for preservation may be
made at the will of only one of the co-owners.
[66.2] When Notice Required
As stated earlier, what the law requires prior to the undertaking
of any repair on the property owned in common for the purpose of
92
Baloloy v. Hular, supra; see also Resuena v. Court of Appeals, supra.
93
Id.
94
Art. 488, NCC.
95
Art. 489, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 297
CO-OWNERSHIP
preserving it is mere notice to the other co-owners of the necessity of
such repair. In other words, a co-owner who desires to undertake such
repair is not required to secure the consent of the other co-owners. The
giving of notice, however, is required only if the same is “practicable”
given the circumstances by which the repair is to be undertaken. Hence,
if the repairs are urgent and any delay will be detrimental to the interest
of the co-ownership, prior notification is no longer necessary and a co-
owner may already undertake such repairs without need of giving prior
notice to the other co-owners.
[66.3] Effect of Failure to Comply With the Notice Requirement
If the giving of notice is practicable and the co-owner who
undertook the repair for preservation failed to previously notify the
other co-owners of the necessity of such repair, will the absence of
such notice deprive him of the right to demand contribution from the
other co-owners for the expenses he incurred? According to Senator
Tolentino,96 such failure does not deprive the co-owner who incurred
the expenses of the right to recover the proportionate shares of the other
co-owners in the expenses. The only effect of such failure is to place
upon the co-owner who incurred the expenses the burden of proving the
necessity of the repairs and the reasonableness of the expenses.
[66.4] Renunciation By A Co-Owner
While the other co-owners can be compelled to contribute
proportionately to the expenses incurred for the purpose of preserving
the thing or right owned in common, they are given by law97 an option of
“renouncing so much of (their) undivided interest as may be equivalent
to (their) share of the expenses and taxes,” in lieu of paying their
proportionate contribution to such expenses.
For example, A, B and C are co-owners of a car valued at
P300,000.00. Assuming that “A” had the car repaired for the purpose
of preserving it and incurred the sum of P30,000.00 in the process.
Assuming that the interest of the three in the co-ownership is equal (or
P100,000.00 each), B and C is required to contribute P10,000.00 each
to the expenses so incurred. If “B,” for example, does not want to shell
96
II Tolentino, Civil Code, 1992 ed., 178-179.
97
Art. 488, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 299
CO-OWNERSHIP
can sustain, the law will not allow C to opt for renunciation, in lieu of
his contribution to the expenses.100 Such waiver is not allowed because
it will be prejudicial to the interest of the co-ownership.101
[66.7] Includes Payment of Taxes
Under Article 488, the expenses for the preservation of the thing
include payment of taxes due on the property owned in common, i.e.,
real estate tax on the land owned in common. Ordinarily, however, a
real estate tax is not considered as a necessary expense, as the term is
used in Article 546 of the New Civil Code. The concept of “necessary
expenses” under Article 546 refers to those incurred for the purpose of
preserving the thing or those expenses which seek to prevent the waste,
deterioration or loss of the thing.102 A real estate tax is not a necessary
expense under the provisions of Article 546 because if the same is
not paid, the property will not be destroyed nor impaired, although its
possession may be lost by the possessor. Under Article 488, however,
the expenses for the preservation of the thing also include taxes.
Art. 490. Whenever the different stories of a house belong to differ-
ent owners, if the titles of ownership do not specify the terms under which
they should contribute to the necessary expenses and there exists no
agreement on the subject, the following rules shall be observed:
(1) The main and party walls, the roof and the other things used
in common, shall be preserved at the expense of all the owners in propor-
tion to the value of the story belonging to each;
(2) Each owner shall bear the cost of maintaining the floor of his
story; the floor of the entrance, front door, common yard and sanitary
works common to all, shall be maintained at the expense of all the owners
pro rata;
(3) The stairs from the entrance to the first story shall be main-
tained at the expense of all the owners pro rata, with the exception of the
owner of the ground floor; the stairs from the first to the second story
shall be preserved at the expense of all, except the owner of the ground
floor and the owner of the first story; and so on successively. (396)
100
II Caguioa, Civil Code, 1966 ed., 136.
101
Id.
102
Id., 199.
298 PROPERTY
out P10,000.00 and opts, instead, to renounce so much of his undivided
interest as may be equivalent to his share of the expenses, he is required
to renounce 1/10 of his share in favor of the co-owner who incurred the
expenses.
[66.5] Requirement of Consent in Renunciation
Under Article 488, renunciation is an option that belongs to a co-
owner who may be compelled to contribute to the expenses incurred for
the purpose of preserving the property owned in common. Hence, such
option may not be compelled by the co-owner who made the advances
if another co-owner refuses to pay his share in the expenses. In such
a situation, the remedy of the co-owner who made the advances is an
ordinary action for collection of sum of money. If the non-paying co-
owner, however, chooses to exercise the option of renunciation, can
he compel the co-owner who made the advances to accept the same?
Stated otherwise, is the consent of the co-owner who made the advances
necessary for the renunciation to be considered effective?
From the language of Article 488, it appears that the consent of
the co-owner who made the advances is not required when a co-owner
opts to renounce, in lieu of paying his share in the expenses. Note that
the law gives such option only to the co-owner who may be compelled
to contribute to such expenses without requiring the consent of the co-
owner who made the advances. Senator Tolentino98 and Justice J.B.L.
Reyes99 consider this, however, as a juridical error. According to these
two eminent civilists, since the renunciation is intended as payment for
expenses already made, it is in the nature of dation in payment and
should, therefore, require the consent of the creditor, i.e., the co-owner
who made the advances.
[66.6] Limitation on the Exercise of the Option of Renunciation
Article 488 prohibits the exercise of the option of renunciation if
it is prejudicial to the interest of the co-ownership. For example, if A, B
and C are co-owners of a property which is in need of immediate repairs
for preservation but the amount thereof is more than A and B, together,
98
II Tolentino, Civil Code, 1992 ed., 173-176.
99
Lawyer’s Journal, October 31, 1950, pp. 499-500.
300 PROPERTY
§ 67. Different Stories Belonging to Different Owners
[67.1] Applicability of Article 490
Article 490 of the New Civil Code applies to a situation where
the house consists of several stories and the different stories belong to
different owners. This article finds no application to a condominium
project, the latter being governed by Republic Act No. 4276, otherwise
known as “The Condominium Act.”
[67.2] Rules Governing Necessary Expenses
In a situation where the different stories of a house belong to
different owners, the payment of necessary expenses shall be governed
by the following rules: (1) if the manner of contribution is specified in
the title of ownership, the same shall govern; (2) in the absence of such
provision in the title of ownership, the agreement of the parties shall
control; or (3) in the absence of such agreement, the following rules
shall be observed:
(a) The main and party walls, the roof and the other things
used in common, shall be preserved at the expense of all the owners in
proportion to the value of the story belonging to each.103
(b) The floor of the entrance, front door, common yard and
sanitary works common to all, shall be maintained at the expense of all
the owners pro rata.104
(c) Each owner shall bear the cost of maintaining the floor of his
story.105
(d) The stairs from the entrance to the first story shall be
maintained at the expense of all the owners pro rata, with the exception
of the owners of the ground floor, the stairs from the first to the second
story shall be preserved at the expense of all, except the owner of the
ground floor and the owner of the first story; and so on successively.106
103
Art. 490(1), NCC.
104
Art. 490(2), NCC.
105
Id.
106
Art. 490(3), NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 301
CO-OWNERSHIP
[67.3] Condominium, Defined
A “condominium” is an interest in real property consisting of
a 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.107 “Common areas” in a condominium project refer to the entire
project excepting all units separately granted or held or reserved;108 while
“unit” means a part of the condominium project intended for any type of
independent use or ownership, including one or more rooms or spaces
located in one or more floors (or part or parts of floors) in a building or
buildings and such accessories as may be appended thereto.109
[67.4] Nature of Ownership in Condominium Projects
With respect to the condominium unit, the same is owned separately
and individually by the unit owner. With respect, however, to the land
and to the common areas in the condominium project, there are two
situations contemplated in Sections 2 and 5 of the Condominium Act.
The first contemplates of a situation where the land and other common
areas in the condominium project are held by the owners of separate
units as co-owners thereof.110 In such a situation, there is co-ownership
among the unit owners, with respect to the undivided interest in the
land and common areas. The second contemplates of a situation where
the land and other common areas are to be held by the condominium
corporation, in which case, the owners of the individual units are
automatically considered members or shareholders of the corporation.111
Under the provisions of the Condominium Act, the undivided interest
in the common areas or the shareholding in the common areas is
inseparable from the unit to which it is only an appurtenant.112
[67.5] Rules Governing Expenses on the “Common Areas”
The owner of the project is required by law, prior to the conveyance
of any condominium therein, to register a declaration of restrictions
107
Sec. 2, R.A. No. 4726.
108
Sec. 3(d), R.A. No. 4726.
109
Sec. 3(b), R.A. No. 4726.
110
Sec. 5, R.A. No. 4726.
111
Sec. 2, R.A. No. 4726.
112
Sec. 5, R.A. No. 4726.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 303
CO-OWNERSHIP
province where such condominium project is located.120 Such lien shall
be superior to all other liens registered subsequent to the registration
of said notice of assessment except real property tax liens121 and may
be enforced in the same manner provided for by law for the judicial or
extra-judicial foreclosure of mortgages of real property.122
Art. 491. None of the co-owners shall, without the consent of the
others, make alterations in the thing owned in common, even though ben-
efits for all would result therefrom. However, if the withholding of the con-
sent by one or more of the co-owners is clearly prejudicial to the common
interest, the courts may afford adequate relief. (397a)
Art. 492. For the administration and better enjoyment of the thing
owned in common, the resolutions of the majority of the co-owners shall
be binding.
There shall be no majority unless the resolution is approved by the
co-owners who represent the controlling interest in the object of the co-
ownership.
Should there be no majority, or should the resolution of the ma-
jority be seriously prejudicial to those interested in the property owned
in common, the court, at the instance of an interested party, shall order
such measures as it may deem proper, including the appointment of an
administrator.
Whenever a part of the thing belongs exclusively to one of the co-
owners, and the remainder is owned in common, the preceding provi-
sions shall apply only to the part owned in common. (398)
§ 68. Acts of Alteration
[68.1] Rule as to “Acts of Alterations”
The law123 prohibits the making of alterations in the thing owned
in common without the consent of the other co-owners. In other words,
the law requires the consent of all co-owners to the making of the
alteration on the thing owned in common. This rule shall apply even
though benefits for all would result from such act of alteration.124 In
case, however, any of the co-owners should unreasonably withholds his
120
Id.
121
Id.
122
Id.
123
Art. 491, NCC.
124
Id.
302 PROPERTY
relating to such project, which restrictions shall constitute a lien
upon each condominium in the project, and shall inure to and bind all
condominium owners in the projects.113 Such declaration of restrictions
may, among other things, provide for the following:
(a) For maintenance of insurance policies insuring condominium
owners against loss by fire, casualty, liability, workmen’s compensation
and other insurable risks, and for bonding of the members of any
management body;114
(b) Provisions for maintenance, utility, gardening and other
services benefiting the common areas, for the employment of personnel
necessary for the operation of the building, and legal, accounting and
other professional and technical services;115
(c) For purchase of materials, supplies and the like needed by
the common areas;116
(d) For payment of taxes and special assessments which would
be a lien upon the entire project or common areas, and for the discharge
of any encumbrance levied against the entire project or the common
areas;117
(e) For reconstruction of any portion or portions of any damage
to or destruction of the project;118
[67.6] Assessment as Lien Upon Unit
An assessment upon any condominium made in accordance with
a duly registered declaration of restrictions shall be an obligation of the
owner thereof at the time the assessment is made.119 The amount of any
such assessment plus any other charges thereon, such as interests, cost
(including attorney’s fees) and penalties, as such as may be provided for
in the declaration of restrictions, shall be and become a lien upon the
condominium assessed when the management body causes a notice of
assessment to be registered with the Registered of Deeds of the city or
113
Sec. 9, R.A. No. 4726.
114
Sec. 9(a)(2), R.A. No. 4726.
115
Sec. 9(a)(3), R.A. No. 4726.
116
Sec. 9(a)(4), R.A. No. 4726.
117
Sec. 9(a)(5), R.A. No. 4726.
118
Sec. 9(a)(6), R.A. No. 4726.
119
Sec. 20, R.A. No. 4726.
304 PROPERTY
consent and the same is clearly prejudicial to the common interest, the
other co-owners may go to court for appropriate relief.125
[68.2] Meaning of “Act of Alteration”
An act of alteration has been defined as the act by virtue of which
a co-owner, in opposition to the express agreement, if there is any, or, in
default thereof, to the tacit agreement of all the co-owners, and violating
their will, changes the thing from that state in which the others believe
it should remain or withdraws it from the use to which they wish it
to be intended.126 An act of alteration, therefore, is one that affects the
substance of the thing127 and changes its essence and nature.128
[68.3] Form of Consent
The law does not clarify the kind of consent necessary for the
making of alterations. What is clearly required, however, is that the
act of alteration must be authorized by all the co-owners, whether such
authorization be given prior to or after the commission of the act. In
other words, the consent of all co-owners may be given expressly or
tacitly, previous to the act or even after its commission.
[68.4] Effect of Unauthorized Alterations
If the alteration is made without the consent of all the co-owners,
the act is illegal and invalid, being an act executed against the provision
of a mandatory law.129 The other co-owners can compel the erring co-
owner to undo what has been done, at the latter’s expense. This remedy
is explicitly authorized by the provisions of Article 1168 of the New
Civil Code which provides that “when the obligation consists in not
doing, and the obligor does what has been forbidden him, it shall
also be undone at his expense.” In addition, the erring co-owner shall
likewise be liable for any losses or damages which the co-ownership
may have suffered.
125
Id.
126
3 Manresa, 6th ed., 447; cited in II Caguioa, 1966 ed., 137.
127
Id.
128
II Tolentino, Civil Code, 1992 ed., 192.
129
Art. 5, NCC, in relation to Art. 491, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 305
CO-OWNERSHIP
§ 69. Acts of Administration
[69.1] Rule as to “Acts of Administration”
With respect to acts of administration and better enjoyment of
the thing owned in common, the resolution of the majority of the co-
owners shall be sufficient.130 Under the law on co-ownership, the terms
“majority of the co-owners” do not refer to numerical majority but to
majority of interest. The law provides that “there shall be no majority
unless the resolution is approved by the co-owners who represent the
controlling interest in the object of the co-ownership.”131 For example,
if A, B and C are co-owners of a parcel of land where the share of A is
3/5 while the share of B and C is 1/5 each, the consent of “A” alone will
be sufficient for the making of an act of administration. In this example,
“A” represents the controlling interest in the co-ownership, thus, “A”
alone shall be considered as the “majority of the co-owners” for the
purpose of approving an act of alteration.
[69.2] Meaning of “Acts of Administration”
Repairs for preservation of the thing owned in common may be
made at the will of only one of the co-owners.132 Hence, the resolution
of the majority of the co-owners is not necessary. The act of repairing
the thing owned in common for the purpose of preserving it is not
considered, therefore, as an act of administration. On the other hand,
expenses to improve or embellish the thing shall be decided upon by a
majority as determined in Article 492.133 Hence, an act of administration
refers to the improvement or embellishment of the thing owned in
common134 for the purpose of better enjoyment.135 As distinguished from
acts of alteration, which have a more permanent result and relate to
the substance or form of the thing, acts of simple administration refer
to the enjoyment of the thing and are of a transitory character.136 In
determining whether an act is that of administration or alteration, the
nature of the thing itself must be considered. When the enjoyment of
the thing does not require its modification, whatever modification or
130
Art. 492, 1st par., NCC.
131
See Art. 492, 2nd par., NCC.
132
Art. 489, NCC.
133
Id.
134
Art. 489, NCC.
135
Art. 492, 1st par., NCC.
136
II Tolentino, Civil Code, 1992 ed., 195.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 307
CO-OWNERSHIP
his rights over his pro indiviso share. Pursuant to said article, a co-
owner shall have full ownership of his part and of the fruits and benefits
pertaining thereto.142 He has the right to alienate, assign or mortgage it,
and even to substitute another person in its enjoyment, except when
personal rights143 are involved.144 As a consequence, a co-owner has the
right to alienate his pro indiviso share in the co-owned property even
without the consent of the other co-owners145 and his co-owners cannot
enjoin him if he intends to alienate his share to a third party.146 He may
also validly lease his undivided interest to a third party independently
of the other co-owners.147
[70.2] Effect of Alienation or Mortgage of Undivided Share
While a co-owner has the right to alienate or mortgage his
undivided share, the effect of such alienation or mortgage, with respect
to the co-owners, shall be limited to the portion which may be allotted
to him in the division upon the termination of the co-ownership.148 In
other words, what the transferee obtains by virtue of such alienation
or mortgage are the same rights as the transferor had as a co-owner,
in an ideal share equivalent to the consideration given under their
transaction.149 In essence, the transferee merely steps into the shoes of
the transferor as co-owner and acquires a proportionate share in the
property held in common, thereby making the transferee a co-owner of
the property.150
[70.3] Alienation of Definite or Concrete Portion
In a long line of decisions, the Supreme Court has held that before
the partition of a land or thing held in common, no individual or co-
owner can claim title to any definite portion. All that the co-owner has
142
Nufable v. Nufable, 309 SCRA 692, 700, July 2, 1999.
143
The term “personal rights” refers to the personal relations of one co-owner to the others,
as when the family residence is used by the children as co-owners. see Padilla, Civil Code, Vol. II,
pp. 300-301 (1972); Tolentino, Civil Code, Bk. II, p. 203 (1992).
144
Nufable v. Nufable, supra, 700.
145
Mercado v. CA, 240 SCRA 616, 621, Jan. 26, 1995.
146
Reyes v. Concepcion, 190 SCRA 171, 179, Oct. 1, 1990.
147
Vda. de Castro v. Atienza, 53 SCRA 264, Oct. 17, 1973, cited in Sanchez v. CA, supra,
and City of Mandaluyong v. Aguilar, supra.
148
Art. 493, NCC.
149
Del Campo v. CA, 351 SCRA 1, 7-8, Feb. 1, 2001.
150
Id.
306 PROPERTY
change that is done will be considered an alteration within the terms of
Article 491.137 However, when the thing in its nature requires changes in
its exploitation, such modifications and variations should be considered
as falling under the acts of simple administration.138
[69.3] No Majority or Act Of Majority Is Seriously Prejudicial
Should there be no majority, or should the resolution of the
majority be seriously prejudicial to those interested in the property
owned in common, the court, at the instance of an interested party, shall
order such measures as it may deem proper, including the appointment
of an administrator.139 According to Manresa,140 the following acts of the
majority are considered prejudicial to the co-ownership: (1) when the
resolution calls for a substantial change or alteration of the common
property or of the use to which it has been dedicated by agreement
or by its nature; (2) when the resolution goes beyond the limit of
mere administration or invades proprietary rights of the co-owners in
violation of Article 491; (3) when the majority authorizes lease, loans
or other contracts without security, exposing the thing to serious danger
to the prejudice of the other co-owners; and (4) when the majority
refuses to dismiss an administrator who is guilty of fraud or negligence
in his management, or he does not have the respectability, aptitude, and
solvency required of persons holding such positions.
Art. 493. Each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto, and he may therefore
alienate, assign or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners, shall be limited
to the portion which may be allotted to him in the division upon the termi-
nation of the co-ownership. (399)
§ 70. Right Over the Ideal Share
[70.1] Nature of Co-Owner’s Right Over His Pro Indiviso Share
A co-owner has absolute ownership of his undivided share in
the common property.141 Article 493 of the New Civil Code spells out
137
3 Manresa, 6th ed., 457, cited in II Caguioa, Civil Code, 1966 ed., 140.
138
3 Manresa 476-477; cited in II Tolentino, Civil Code, 1992 ed., 195.
139
Art. 492, 3rd par., NCC.
140
3 Manresa, 6th ed., 461-462.
141
City of Mandaluyong v. Aguilar, 350 SCRA 499, Jan. 29, 2001.
308 PROPERTY
is an ideal or abstract quota or proportionate share in the entire land or
thing.151 As such, a co-owner has no right to sell or alienate a concrete,
specific or determinate part of the thing owned in common.152 If the co-
owner sells a concrete portion, this, nonetheless, does not render the
sale void.153 Such a sale affects only his own share, subject to the results
of the partition but not those of the other co-owners who did not consent
to the sale.154 In the words of the Supreme Court in Del Campo v. Court
of Appeals155 —
“We are not unaware of the principle that a co-owner
cannot rightfully dispose of a particular portion of a co-
owned property prior to partition among all the co-owners.
However, this should not signify that the vendee does not
acquire anything at all in case a physically segregated area of
the co-owned lot is in fact sold to him. Since the co-owner/
vendor’s undivided interest could properly be the object of
the contract of sale between the parties, what the vendee
obtains by virtue of such a sale are the same rights as the
vendor had as co-owner, in an ideal share equivalent to the
consideration given under their transaction. In other words,
the vendee steps into the shoes of the vendor as co-owner
and acquires a proportionate abstract share in the property
held in common.”
As discussed above, a co-owner has no right to sell a divided part,
by metes and bounds, of the real estate owned in common.156 Hence, the
buyer cannot claim title to that definite portion of the land owned in
common.157 What the vendee obtains by virtue of such sale are the same
rights as the vendor had as co-owner, in an ideal share equivalent to
the consideration given under their transaction.158 In other words, such
151
Oliveras v. Lopez, 168 SCRA 431, 437, Dec. 14, 1988, citing Diversified Credit Corpo-
ration v. Rosado, L-27983, December 24, 1968, 26 SCRA 470.
152
City of Mandaluyong v. Aguilar, supra, at p. 500, citing Abad v. CA, 179 SCRA 826
(1989); Bailon-Casilao v. CA, 160 SCRA 738 (1988); Santos v. Buenconsejo, 14 SCRA 407
(1965); Ramirez v. Batutaista, 14 Phil. 528 (1909).
153
Id., also in Del Campo v. Court of Appeals, 351 SCRA 1 (2001).
154
Id.
155
351 SCRA 1, 7-8, Feb. 1, 2001.
156
See Abad v. Court of Appeals, 179 SCRA 817, December 4, 1989.
157
Id.
158
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 309
CO-OWNERSHIP
sale will only transfer the rights of said co-owner to the buyer, thereby
making the buyer a co-owner of the property.159 As a consequence, the
effect of such alienation, with respect to the other co-owners, shall be
limited to the portion which may be allotted to the vendee, as successor-
in-interest of the selling co-owner, in the division of the property upon
the termination of the co-ownership.160 In one case,161 however, the buyer
of a concrete or specific portion sold by one of the co-owners was held to
be entitled to the specific portion which she purchased because the said
buyer was allowed by the other co-owner to occupy said definite portion
without disturbance for a period too long to be ignored. According to
the Court in said case, such undisturbed possession had the effect of
a partial partition of the co-owned property which entitles the buyer-
possessor to the definite portion which she occupies.162
Del Campo v. Court of Appeals
351 SCRA 1, Feb. 1, 2001
Salome Bornales, together with her siblings, were the original co-
owners of a certain parcel of land, known as Lot 162 of the Cadastral Survey
of Ponteverda, Capiz under OCT No. 18407. On July 14, 1940, Salome sold
part of her share in favor of Soledad Daynolo. The portion sold to Soledad
was, however, concrete and specific. Immediately, thereafter, Soledad took
possession of the land described in the sale. In 1948, Salome, together with
the other co-owners, sold 24,933 of Lot 162 to Jose Regalado, Sr. In 1951, the
heirs of Soledad sold the land to the spouses Manuel Del Campo and Salvacion
Quiachon, who succeeded in the possession of said land. Meanwhile, Jose
Regalado, Sr. caused the reconstitution of OCT No. 180407, which initially
reflected the shares of the original co-owners in Lot 162, but the title was
eventually transferred in the name of Jose Regalado, Sr.. The latter, thereafter,
subdivided the entire property into smaller lots, each covered by a respective
title in his name. One of these small lots included the portion occupied by
the spouses Del Campo. Thus, the spouses Del Campo filed a complaint
for “repartition, resurvey and reconveyance” against the heirs of Regalado
claiming that their land was erroneously included in the title of Regalado. After
addressing the issue of the validity of the sale in 1940 between Salome and
Soledad, from where the right of the Spouses Del Campo was derived, the
159
Id.
160
Art. 493, NCC.
161
Del Campo v. Court of Appeals, supra.
162
Id., 9.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 311
CO-OWNERSHIP
a physically segregated area of the co-owned lot is in fact sold
to him. Since the co-owner/vendor’s undivided interest could
properly be the object of the contract of sale between the parties,
what the vendee obtains by virtue of such a sale are the same rights
as the vendor had as co-owner, in an ideal share equivalent to the
consideration given under their transaction. In other words, the
vendee steps into the shoes of the vendor as co-owner and acquires
a proportionate abstract share in the property held in common.
Resultantly, Soledad became a co-owner of Lot 162 as of
the year 1940 when the sale was made in her favor. It follows that
Salome, Consorcia and Alfredo could not have sold the entire
Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that
time, the ideal shares held by the three co-owners/vendors were
equivalent to only 10/16 of the undivided property less the aliquot
share previously sold by Salome to Soledad. Based on the principle
that “no one can give what he does not have,” Salome, Consorcia
and Alfredo could not legally sell the shares pertaining to Soledad
since a co-owner cannot alienate more than his share in the co-
ownership. We have ruled many times that even if a co-owner sells
the whole property as his, the sale will affect only his own share
but not those of the other co-owners who did not consent to the
sale. Since a co-owner is entitled to sell his undivided share, a
sale of the entire property by one co-owner will only transfer the
rights of said co-owner to the buyer, thereby making the buyer a
co-owner of the property.
In this case, Regalado merely became a new co-owner of Lot
162 to the extent of the shares which Salome, Consorcia and Alfredo
could validly convey. Soledad retained her rights as co-owner and
could validly transfer her share to petitioners in 1951. The logical
effect of the second disposition is to substitute petitioners in the
rights of Soledad as co-owner of the land. Needless to say, these
rights are preserved notwithstanding the issuance of TCT No.
14566 in Regalado’s name in 1977.
Be that as it may, we find that the area subject matter of this
petition had already been effectively segregated from the ‘mother
lot’ even before title was issued in favor of Regalado. It must be
noted that 26 years had lapsed from the time petitioners bought and
took possession of the property in 1951 until Regalado procured
the issuance of TCT No. 14566. Additionally, the intervening years
between the date of petitioners’ purchase of the property and 1987
when petitioners filed the instant complaint, comprise all of 36
310 PROPERTY
Court further held that the Del Campos are entitled to the possession of the
specific portion sold to them. The Court explained —
On the first issue, it seems plain to us that the trial court
concluded that petitioners could not have acquired ownership of
the subject land which originally formed part of Lot 162, on the
ground that their alleged right springs from a void sale transaction
between Salome and Soledad. The mere fact that Salome
purportedly transferred a definite portion of the co-owned lot by
metes and bounds to Soledad, however, does not per se render the
sale a nullity. This much is evident under Article 493 of the Civil
Code and pertinent jurisprudence on the matter. More particularly
in Lopez v. Vda. De Cuaycong, et al. which we find relevant, the
Court, speaking through Mr. Justice Bocobo, held that:
… The fact that the agreement in question purported to sell
a concrete portion of the hacienda does not render the sale void,
for it is a well-established principle that the binding force of a
contract must be recognized as far as it is legally possible to do
so. “Quando res non valet ut ago, valeat quantum valere potest.”
(When a thing is of no force as I do it, it shall have as much force
as it can have.)
Applying this principle to the instant case, there can be no
doubt that the transaction entered into by Salome and Soledad could
be legally recognized in its entirety since the object of the sale
did not even exceed the ideal shares held by the former in the co-
ownership. As a matter of fact, the deed of sale executed between
the parties expressly stipulated that the portion of Lot 162 sold
to Soledad would be taken from Salome’s 4/16 undivided interest
in said lot, which the latter could validly transfer in whole or in
part even without the consent of the other co-owners. Salome’s
right to sell part of her undivided interest in the co-owned property
is absolute in accordance with the well-settled doctrine that a co-
owner has full ownership of his pro-indiviso share and has the right
to alienate, assign or mortgage it, and substitute another person in
its enjoyment. Since Salome’s clear intention was to sell merely
part of her aliquot share in Lot 162, in our view no valid objection
can be made against it and the sale can be given effect to the full
extent.
We are not unaware of the principle that a co-owner cannot
rightfully dispose of a particular portion of a co-owned property
prior to partition among all the co-owners. However, this should
not signify that the vendee does not acquire anything at all in case
312 PROPERTY
years. However, at no instance during this time did respondents or
Regalado, for that matter, question petitioners’ right over the land
in dispute. In the case of Vda. de Cabrera v. Court of Appeals, we
had occasion to hold that where the transferees of an undivided
portion of the land allowed a co-owner of the property to occupy
a definite portion thereof and had not disturbed the same for a
period too long to be ignored, the possessor is in a better condition
or right than said transferees. (Potior est condition possidentis.)
Such undisturbed possession had the effect of a partial partition of
the co-owned property which entitles the possessor to the definite
portion which he occupies. Conformably, petitioners are entitled to
the disputed land, having enjoyed uninterrupted possession thereof
for a total of 49 years up to the present.
[70.4] Alienation of Entire Co-owned Property
As a mere part owner, a co-owner cannot alienate the shares of
the other co-owners. The prohibition is premised on the elementary rule
that “no one can give what he does not have” — nemo dat quod non
habet.163 As a person can sell only what he owns or is authorized to sell,
the buyer can as a consequence acquire no more than what the seller
can legally transfer.164 Based from this principle, no co-owner has the
right to alienate the entire property owned in common. However, even
if a co-owner sells the whole property as his, the sale will affect only
his own share but not those of the other co-owners who did not consent
to the sale,165 following the well-established principle that the binding
force of a contract must be recognized as far as it is legally possible
to do so — quando res non valet ut ago, valeat quantum valere potest
(when a thing is of no effect as I do it, it shall have effect as far as
[or in whatever way] it can).166 Since a co-owner is entitled to sell his
undivided share, a sale of the entire property by one co-owner without
the consent of the other co-owners is not null and void. However, only
163
Mercado v. CA, 240 SCRA 616, 620, Jan. 26, 1995; also in Nufable v. Nufable, 309
SCRA 692, July 2, 1999.
164
Segura v. Segura, 165 SCRA 368, 374, Sept. 19, 1988.
165
Del Campo v. CA, 351 SCRA 1, 8, Feb. 1, 2001, citing Tomas Claudio Memorial Col-
lege, Inc. v. CA, 316 SCRA 501 (1999). See also Aguirre v. CA, 421 SCRA 310, 323-324 (2004);
Corinthian Realty, Inc. v. CA, 394 SCRA 260, 268 (2002); Tomas Claudio Memorial College, Inc.
v. CA, 316 SCRA 502, 509 (1999); Paulmitan v. CA, 215 SCRA 866, 872-873 (1992); Bailon-
Casilao v. CA, 160 SCRA 738, 745 (1988).
166
Acabal v. Acabal, 454 SCRA 555, 582.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 313
CO-OWNERSHIP
the rights of the co-owner-seller are transferred, thereby making the
buyer a co-owner of the property.167
Since the sale is not null and void, the proper action in cases like
this is not for the nullification of the sale.168 And since such sale had
the effect of making the buyer a co-owner of the property, an action
for the recovery of possession of the thing owned in common from
the buyer who substituted the co-owner or co-owners who alienated
their shares is likewise not proper169 since the possession by the buyer,
being a new co-owner, will not be regarded as adverse to the other co-
owners but is, in fact, beneficial to all of them.170 It is now settled that
the appropriate recourse of co-owners in cases where their consent were
not secured in a sale of the entire property as well as in a sale merely of
the undivided shares of some of the co-owners is an action for partition
under Rule 69 of the Revised Rules of Court.171 Such partition should
result in segregating the portion belonging to the seller and its delivery
to the buyer.172 Neither recovery of possession nor restitution can be
granted since the buyer is a legitimate proprietor and possessor in joint
ownership of the common property claimed.173
[70.5] Applicability of Doctrine of “Buyer in Good Faith”
Will the rule mentioned in supra § 70.4 applies if the co-owned
property alienated is registered under the Torrens system solely in
the name of the selling co-owner? In Cruz v. Leis,174 the Court had
the occasion to rule that where a parcel of land, forming past of the
undistributed properties of the dissolved conjugal partnership of gains,
is sold by a widow to a purchaser who merely relied on the face of the
certificate of title thereto, issued solely in the name of the widow, the
purchaser acquires a valid title to the land even as against the heirs of
the deceased spouse. In this case, Gertrudes Isidro, during her marriage
with Adriano Isidro, acquired a parcel of land in 1955. In the deed
167
Bailon-Casilao v. CA, 160 SCRA 738, 745, April 15, 1988.
168
Id.
169
Id.
170
Pangan v. Court of Appeals, 166 SCRA 375, 381.
171
Bailon-Casilao v. Court of Appeals, supra; see also Aguirre v. Court of Appeals, 421
SCRA 310.
172
Tomas Claudio Memorial College, Inc. v. Court of Appeals, Oct. 12, 1999.
173
Id., citing Ramirez v. Batutaista, 14 Phil. 528 (1909).
174
327 SCRA 97.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 315
CO-OWNERSHIP
[COMMENTS: Note, however, that the buyer of the property
in the case of Segura v. Segura, supra, may not really be considered
a purchaser in good faith since when the land was registered in his
name following the sale of the same in his favor by the parties to the
extra-judicial partition, the same still carried an express reservation of
whatever rights that may pertain to other excluded heirs. The existence
of this annotation on his title should thus make him aware of the
possibility that a portion of the property may not truly belong to him.
Such annotation is in the nature of a commitment on his part to hold
any such portion as impliedly convey to him in trust by and for its true
owner.]
It is clear, however, that when the purchaser knew of, could have
known, the existence of the co-ownership and yet did not seek the
consent or authorization of the other co-owners in the sale of the entire
property, he may not be considered a purchaser in good faith. Hence,
the rule stated in supra § 68.4 applies, in which case, he only acquires
what the selling co-owner could validly transfer following the rule that
“no one can give what he does not have — nemo dat quod non habet.”
In Bailon-Casilao v. Court of Appeals,176 for example, the purchaser of
the entire property was held to be guilty of bad faith in purchasing the
property as he knew that the property was co-owned by six persons
and yet, there were only two signatories to the deeds of sale and no
special authorization to self was granted to the two sellers by the other
co-owners. Likewise, in Robles v. Court of Appeals,177 the mortgage of
the entire co-owned property was declared to be valid only with respect
to the share of the mortgaging co-owner, but not with respect to the
share of the other co-owners who had no knowledge thereof. The Court
held that “the bank should not have relied solely on the Deed of Sale
purportedly showing that the ownership of the disputed property had
been transferred from Exequiel Ballena to the Robles spouses, or that
it had subsequently been declared in the name of Hilario. Because it
was dealing with unregistered land, and the circumstances surrounding
the transaction between Hilario and his father-in-law Exequiel were
suspicious, the bank should have exerted more effort to fully determine
the title of the Robleses.” In addition, the rule that persons dealing with
176
Supra.
177
328 SCRA 97.
314 PROPERTY
of sale and in the title (TCT No. 43100) that was issued in the name
of Gertrudes Isidro, she was described as a “widow.” Her husband,
however, died only on December 2, 1973. In 1985, Gertrudes obtained
a loan from the spouses Alexander and Adelaida Cruz, secured by the
property covered by TCT No. 43100. When Gertrudes failed to pay
the loan, she executed a pacto de retro sale in favor of the spouses
Cruz. When Gertrudes failed to repurchase the property within the
period agreed upon, ownership thereof was consolidated in the name
of Alexander Cruz in whose name TCT No. 130584 was issued. On
9 June 1987, Gertrudes died. Thereafter, her heirs, received demands
to vacate the premises from the spouses Cruz, the new owners of the
property. The heirs of Gertrudez responded by filing a complaint for the
nullification of the sale and the title of Alexander Cruz. The Supreme
Court held that while, as a rule, Gertrudes could only dispose of her
share in the property owned in common pursuant to Article 493, the
purchaser acquires a valid title to the entire property even as against
the heirs of the spouses Isidro based on the principle that “a person
dealing with registered land is not required to go behind the register to
determine the condition of the property.” The Court explained that “(the
purchaser) is only charged with notice of the burdens on the property
which are noted on the face of the register or the certificate of title” and
“to require him to do more is to defeat one of the primary objects of the
Torrens system.”
In Segura v. Segura,175 however, the Supreme Court followed the
general rule that “no one can give what he does not have — nemo dat
quod non habet.” The Court further declared, albeit in obiter, that even if
it is to be assumed that the purchaser bought the land in good faith from
the selling co-owners (who were the registered owners of the property
as appearing on the title), only so much of the share of the selling co-
owners could be validly acquired by the purchaser, with the rest of the
property remaining under the ownership of the excluded co-heirs or
co-owners. In other words, the purchaser became merely a pro indiviso
co-owner of the land with the other excluded co-owners, who retained
title to their respective shares although the purchaser had possession of
the entire property. It was further held that the portion pertaining to the
excluded co-owners should be deemed held by the purchaser under an
implied trust for their benefit.
175
165 SCRA 368.
316 PROPERTY
registered lands can rely solely on the certificate of title does not apply
to banks.
[70.6] Sale of Conjugal Property Without the Consent of the Other
Spouse
Any alienation or encumbrance of the conjugal partnership
property made after the effectivity of the Family Code on August 3,
1988 without the consent of the other spouse is null and void.178 In such
a situation, may the transaction be considered as valid, at least insofar as
the share of the consenting spouse in the conjugal partnership property
is concerned? This is the issue in Homeowners Savings & Loan Bank
v. Dailo.179 In this case, the trial and appellate courts declared as void
the mortgage in favor of the bank on the subject property, which is
conjugal in nature, because it was constituted without the knowledge
and consent of the wife, in accordance with Article 124 of the Family
Code. On appeal, the bank contended that the mortgage constituted by
the husband on the subject property as co-owner thereof is valid as to
his undivided share. The bank contends that Article 124 of the Family
Code should be construed in relation to Article 493 of the Civil Code.
The bank argued that although Article 124 of the Family Code requires
the consent of the other spouse to the mortgage of conjugal properties,
the framers of the law could not have intended to curtail the right of a
spouse from exercising full ownership over the portion of the conjugal
property pertaining to him under the concept of co-ownership. In
upholding the nullity of the mortgage in its entirety, the Court held —
The rules on co-ownership do not even apply to the
property relations of respondent and the late Marcelino Dailo,
Jr. even in a suppletory manner. The regime of conjugal
partnership of gains is a special type of partnership, where
the husband and wife place in a common fund the proceeds,
products, fruits and income from their separate properties and
those acquired by either or both spouses through their efforts
or by chance. Unlike the absolute community of property
wherein the rules on co-ownership apply in a suppletory
178
Art. 124, FC; Sps. Guiang v. Court of Appeals, 353 Phil. 578 (1998); see also Rabuya,
Law on Persons and Family Relations, 2006 ed., 485-486.
179
453 SCRA 283 (2005).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 317
CO-OWNERSHIP
manner, the conjugal partnership shall be governed by the
rules on contract of partnership in all that is not in conflict
with what is expressly determined in the chapter (on conjugal
partnership of gains) or by the spouses in their marriage
settlements. Thus, the property relations of respondent and
her late husband shall be governed, foremost, by Chapter
4 on Conjugal Partnership of Gains of the Family Code
and, suppletorily, by the rules on partnership under the Civil
Code. In case of conflict, the former prevails because the
Civil Code provisions on partnership apply only when the
Family Code is silent on the matter.
The basic and established fact is that during his lifetime,
without the knowledge and consent of his wife, Marcelino
Dailo, Jr. constituted a real estate mortgage on the subject
property, which formed part of their conjugal partnership.
By express provision of Article 124 of the Family Code, in
the absence of (court) authority or written consent of the
other spouse, any disposition or encumbrance of the conjugal
property shall be void.”
The afore-quoted provision does not qualify with
respect to the share of the spouse who makes the disposition
or encumbrance in the same manner that the rule on co-
ownership under Article 493 of the Civil Code does. Where
the law does not distinguish, courts should not distinguish.
Thus, both the trial court and the appellate court are correct
in declaring the nullity of the real estate mortgage on the
subject property for lack of respondent’s consent.
[70.7] Sale of Community Property Without the Consent of Other
Spouse
While the absolute community is a form of co-ownership between
the spouses, neither spouse can dispose of their respective interest in the
community property by way of disposition inter vivos. In this respect,
the rules on co-ownership embodied in Article 493 of the Civil Code
do not find application in the case of the co-ownership that exists in
absolute community. The reason for this is because prior to liquidation
of the absolute community, the interest of each spouse in the community
assets is inchoate, a mere expectancy, which constitutes neither a legal
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 319
CO-OWNERSHIP
of redemption, they may only do so in proportion to the share they may
respectively have in the thing owned in common.184 Legal redemption is
in the nature of a privilege created by law partly for reasons of public
policy and partly for the benefit and convenience of the redemptioner,
to afford him a way out of what might be a disagreeable or inconvenient
association into which he has been trust.185 It is intended to minimize
co-ownership186 by reducing the number of the participants until the
community is done away with.187
[71.2] Requisites For the Exercise of Legal Redemption
From the provisions of Articles 1620 and 1623 of the New
Civil Code, the following are the requisites for the exercise of legal
redemption: (1) There must be a co-ownership; (2) one of the co-owners
sold his right to a stranger; (3) the sale was made before the partition of
the co-owned property; (4) the right of redemption must be exercised
by one or more co-owners within a period of thirty days to be counted
from the time that he or they were notified in writing by the vendee or
by the co-owner vendor; and (5) the vendee must be reimbursed for the
price of the sale.188
[71.3] Presupposes Existence of Co-Ownership
The basis and origin of the right of legal redemption granted
under Article 1620 of the New Civil Code is the existence of a co-
ownership.189 Thus, the exercise of a right of legal redemption thereunder
presupposes the existence of co-ownership at the time the conveyance
is made by a co-owner and when it is demanded by the other co-owner
or co-owners.190 Inasmuch as the purpose of the law in establishing the
right of legal redemption between co-owners is to reduce the number
of the participants until the community is done away with,191 once
the property is subdivided and distributed among the co-owners, the
184
Art. 1620, 2nd par., NCC.
185
Basa v. Aguilar, 117 SCRA 128, 130, Sept. 30, 1982.
186
Id.
187
Viola v. Tecson, 49 Phil. 808.
188
Aguilar v. Aguilar, 478 SCRA 187, Dec. 16, 2005.
189
Hernandez v. Quitain, 168 SCRA 92, 95, Nov. 29, 1988; also in Mendoza I v. CA, 199
SCRA 778, 787, July 31, 1991.
190
Uy v. CA, 246 SCRA 703, 711, July 20, 1995.
191
Viola v. Tecson, 49 Phil. 808.
318 PROPERTY
nor an equitable estate, and does not ripen into title until it appears
that there are assets in the community as a result of the liquidation and
settlement. Hence, any disposition of the spouse’s respective shares or
interest in the absolute community shall be void since such right to one-
half of the community assets does not vest until the liquidation of the
absolute community. Nemo dat qui non habet. No one can give what he
has not.180 This is also the reason why dispositions of community property
made by one spouse without the consent of the other or without court
authorization may not likewise be deemed valid even insofar as the
share of the consenting spouse in the community property is concerned.
Such alienation or disposition must be regarded as invalid in its entirety
and not only with respect to the share of the non-consenting spouse in
the property.181
[70.8] Co-ownership in Article 147 of the Family Code
As discussed in supra § 62.7, when a man and a woman who
are capacitated to marry each other live exclusively with each other
as husband and wife without the benefit of marriage or under a void
marriage, the property acquired by both of them through their work or
industry shall be governed by the rules on co-ownership.182
In this kind of co-ownership, however, the rule stated in Article
493 that a co-owner has the right to alienate or encumber his ideal share
without the consent of the other co-owners does not apply. Article 147
of the Family Code expressly prohibits any of the parties to encumber
or dispose by acts inter vivos of his or her share in the co-owned
property without the consent of the other prior to the termination of the
cohabitation.
§ 71. Right of Legal Redemption
[71.1] Legal Redemption in Co-Ownership
A co-owner of a thing may exercise the right of legal redemption in
case the shares of all the other co-owners or of any of them, are sold to a
third person.183 Should two or more co-owners desire to exercise the right
180
See Rabuya, Law on Persons and Family Relations, 2006 ed., 440-441.
181
Id., 441.
182
See Art. 147, Family Code.
183
Art. 1620, 1st par., NCC.
320 PROPERTY
community has terminated and there is no reason to sustain any right of
legal redemption.192 This doctrine has been applied in a host of cases.193
[71.4] Share Must Be Sold To A Third Party
The law grants a co-owner the exercise of the said right of
redemption when the shares of the other co-owners are sold to a “third
person.” A third person, within the meaning of this Article, is anyone
who is not a co-owner.194 When the portion is sold to a co-owner, the
right does not arise because a new participant is not added to the co-
ownership.195 However, the right to redeem is granted not only to the
original co-owners, but also to all those who subsequently acquire their
respective shares while the community subsists.196
[71.5] A Co-Owner Has Right of Redemption, Not Pre-Emption
In this jurisdiction, the legal provisions on co-ownership do not
grant to any of the owners of a property held in common a pre-emptive
right to purchase the pro indiviso shares of his co-owners.197 Article 1620
of the New Civil Code contemplates a situation where a co-owner has
alienated his pro indiviso shares to a stranger.198 By the very nature of
the right of “legal redemption,” a co-owner’s right to redeem is invoked
only after the shares of the other co-owners are sold to a third party or
stranger to the co-ownership, not before.199
[71.6] Period of Redemption
The right of legal redemption shall not be exercised except within
thirty (30) days from the notice in writing by the vendor.200 Thus, for the
192
Caram v. CA, 101 Phil. 315, 319 (1957), cited in Hernandez v. Quitain, supra, at p. 96;
also in Caro v. CA, 113 SCRA 10, March 25, 1982.
193
Saturnino v. Paulino, 97 Phil. 50 (1955); Umengan v. Butacan, 7 SCRA 311 (1963); Es-
toque v. Pajimula, 24 SCRA 59 (1968); Dela Cruz v. Cruz, 32 SCRA 307 (1970); Seechung Federis
v. Sunga, 134 SCRA 16 (1985); Salatandol v. Retes, G.R. No. L-38120, June 28, 1988; Hernandez
v. Quitain, supra, and Mendoza I v. CA, supra.
194
Basa v. Aguilar, 117 SCRA 128, 130-131, Sep. 30, 1982, cited in Pilapil v. CA, 250
SCRA 566, 576, Dec. 4, 1995 and Fernandez v. Tarun, 391 SCRA 653, 659, Nov. 14, 2002.
195
Fernandez v. Tarun, G.R. No. 143868, Nov. 14, 2002.
196
Viola v. Tecson, 49 Phil. 808, 810, Dec. 24, 1926, cited in Fernandez v. Tarun, supra,
659
197
Reyes v. Concepcion, 190 SCRA 171, 178. Oct. 1, 1990.
198
Id.
199
Id.
200
Art. 1623, 1st par., NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 321
CO-OWNERSHIP
legal and effective exercise of the right of legal redemption one must
make the offer within the period set down in Article 1623. In other
words, if no claim or offer is made within said period, no action will be
allowed to enforce the right of redemption. It is necessary however to
determine first if and when the written notice of sale was duly served by
the vendors to their co-owner.201
[71.7] Written Notice Not Necessary If There Is Actual Notice
The old rule is that a written notice of the sale by the vendor to his
co-owners is indispensable for the latter to exercise their retracto legal
de comuneros.202 More recently, however, the Supreme Court has relaxed
the written notice requirement. Thus, in Si v. Court of Appeals,203 the
Court ruled that a co-owner with actual notice of the sale is not entitled
to a written notice for such would be superfluous.204 The law does not
demand what is unnecessary205 since the only purpose of such written
notice is to insure that all the co-owners shall be actually notified of the
sale and to remove all doubt as to the perfection of the sale.206 Hence,
in a case where the co-owner was actually present and was even an
active intermediary in the consummation of the sale of the property, he
is considered to have had actual notice of the sale and a written notice
is no longer necessary.207
[71.8] Article 1620 Distinguished From Article 1088
Article 1088 of the New Civil Code provides that “should any of
the heirs sell his hereditary rights to a stranger before the partition, any
or all of the co-heirs may be subrogated to the rights of the purchaser
by reimbursing him for the price of the sale, provided they do so within
the period of the month from the time they were notified in writing of
the sale by the vendor.” According to Tolentino,208 the fine distinction
between Article 1088 and Article 1620 is that when the sale consists of
201
Cabrera v. Villanueva, 160 SCRA 672, 677, April 15, 1988.
202
Aguilar v. Aguilar, 478 SCRA 187, 193 (2005), citing Butte v. Manuel Uy & Sons, Inc.,
4 SCRA 526.
203
342 SCRA 463.
204
Aguilar v. Aguilar, supra, 193.
205
Id.
206
Distrito v. Court of Appeals, 197 SCRA 606.
207
Id.
208
Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of the Philip-
pines, Vol. III, pp. 607-608, cited in Mariano v. Court of Appeals, May 28, 1993.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 323
CO-OWNERSHIP
This may happen, for example, when the shares of the other co-owners
are acquired by one co-owner either by way of purchase or through the
exercise of the right of legal redemption.
[72.3] Destruction of Thing or Lost of Right
A state of co-ownership exists only because there is unity of the
object or property and plurality of subjects.211 Note that a co-ownership
is only a state of fact which exists so long as the property remains
materially undivided. Hence, the moment that the state of fact no longer
exists because the object of the co-ownership is either destroyed or lost,
the co-ownership also ceases.
[72.4] Redemption By One Co-Owner of the Entire Property
The rule in this jurisdiction is that the redemption by one co-heir
or co-owner of the property in its totality does not vest in him ownership
over it since redemption is not a mode of terminating a co-ownership.212
A redemption by a co-owner within the period prescribed by law inures
to the benefit of all the other co-owners.213 In such a situation, therefore,
the redemption made by one co-owner will simply entitle him to collect
reimbursement from the remaining co-owners pursuant to the provisions
of Article 488 considering that redemption entails a necessary expense.214
This is exemplified in the case of Adille v. Court of Appeals.215 In this case,
the land in question originally belonged to one Feliza Alzul as her own
private property. Sometime in 1939, Feliza sold the property in pacto de
retro to certain third persons, the period of repurchase being three years.
During the period of redemption, her son in the first marriage repurchased
the subject property, who thereafter was able to secure title to the property
only in his name. Subsequently, however, the other children of Felisa in
her second marriage filed an action for partition and accounting claiming
that they were co-owners of the subject property, being heirs. The son of
Felisa in the first marriage contends that the subject property devolved
upon him upon the failure of his co-heirs to join him in its redemption
211
Gapacan v. Omipet, 387 SCRA 383.
212
Adille v. Court of Appeals, 157 SCRA 455, Jan. 29, 1988. See also Paulmitan v. Court
of Appeals, 215 SCRA 866, Nov. 25, 1992; Mariano v. Court of Appeals, 222 SCRA 736, May 28,
1993; Cruz v. Leis, 327 SCRA 570, March 9, 2000.
213
Mariano v. Court of Appeals, supra, 740.
214
Adille v. Court of Appeals, supra.
215
Supra.
322 PROPERTY
an interest in some particular property or properties of the inheritance,
the right of redemption that arises in favor of the other co-heirs is that
recognized in Article 1620. On the other hand, if the sale is the hereditary
right itself, fully or in part, in the abstract sense, without specifying any
particular object, the right recognized in Article 1088 exists.209
Art. 494. No co-owner shall be obliged to remain in the co-owner-
ship. Each co-owner may demand at any time the partition of the thing
owned in common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a cer-
tain period of time, not exceeding ten years, shall be valid. This term may
be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall
not exceed twenty years.
Neither shall there be any partition when it is prohibited by law.
No prescription shall run in favor of a co-owner or co-heir against
his co-owners or co-heirs so long as he expressly or impliedly recognizes
the co-ownership. (400a)
§ 72. Extinguishment of Co-ownership
[72.1] Causes of Extinguishment of Co-ownership
Co-ownership may be extinguished or terminated by any of the
following causes:
(1) By the merger in one person of all the interest of the co-
ownership;
(2) By prescription of the thing or right in favor of third persons
or a co-owner;
(3) By destruction of the thing or loss of the right which is owned
in common; and
(4) By partition of the property owned in common.210
[72.2] Merger
Merger, as a mode of terminating the co-ownership, takes place
when all the interests in a co-ownership are consolidated in one person.
209
Mariano v. Court of Appeals, 222 SCRA 736, May 28, 1993.
210
3 Manresa, 6th ed., 486; 2 Castan, 8th ed., 318.
324 PROPERTY
within the period required by law. Answering this particular contention,
the Supreme Court held —
The right of repurchase may be exercised by a co-
owner with aspect to his share alone. While the records
show that the petitioner redeemed the property in its entirety,
shouldering the expenses therefor, that did not make him the
owner of all of it. In other words, it did not put to end the
existing state of co-ownership.
Necessary expenses may be incurred by one co-owner,
subject to his right to collect reimbursement from the
remaining co-owners. There is no doubt that redemption of
property entails a necessary expense. Under the Civil Code:
ART. 488. Each co-owner shall have a right to compel
the other co-owners to contribute to the expenses of
preservation of the thing or right owned in common and to
the taxes. Any one of the latter may exempt himself from this
obligation by renouncing so much of his undivided interest
as may be equivalent to his share of the expenses and taxes.
No such waiver shall be made if it is prejudicial to the co-
ownership.
The result is that the property remains to be in a
condition of co-ownership. While a vendee a retro, under
Article 1613 of the Code, “may not be compelled to consent
to a partial redemption,” the redemption by one co-heir or
co-owner of the property in its totality does not vest in him
ownership over it. Failure on the part of all the co-owners to
redeem it entitles the vendee a retro to retain the property
and consolidate title thereto in his name. But the provision
does not give to the redeeming co-owner the right to the
entire property. It does not provide for a mode of terminating
a co-ownership.
Neither does the fact that the petitioner had succeeded
in securing title over the parcel in his name terminate the
existing co-ownership. While his half-brothers and sisters are,
as we said, liable to him for reimbursement as and for their
shares in redemption expenses, he cannot claim exclusive
right to the property owned in common. Registration of
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CO-OWNERSHIP
property is not a means of acquiring ownership. It operates
as a mere notice of existing title, that is, if there is one.
The petitioner must then be said to be a trustee of the
property on behalf of the private respondents. The Civil
Code states:
ART. 1456. If property is acquired through mistake or
fraud, the person obtaining it is, by force of law, considered
a trustee of an implied trust for the benefit of the person from
whom the property comes.
We agree with the respondent Court of Appeals
that fraud attended the registration of the property. The
petitioner’s pretension that he was the sole heir to the land
in the affidavit of extrajudicial settlement he executed
preliminary to the registration thereof betrays a clear effort
on his part to defraud his brothers and sisters and to exercise
sole dominion over the property. The afore-quoted provision
therefore applies.
It is the view of the respondent Court that the petitioner,
in taking over the property, did so either on behalf of his
co-heirs, in which event, he had constituted himself a
negotiorum gestor under Article 2144 of the Civil Code,
or for his exclusive benefit, in which case, he is guilty of
fraud, and must act as trustee, the private respondents being
the beneficiaries, under the Article 1456. The evidence, of
course, points to the second alternative the petitioner having
asserted claims of exclusive ownership over the property and
having acted in fraud of his co-heirs. He cannot therefore be
said to have assume the mere management of the property
abandoned by his co-heirs, the situation Article 2144 of the
Code contemplates. In any case, as the respondent Court
itself affirms, the result would be the same whether it is one
or the other. The petitioner would remain liable to the Private
respondents, his co-heirs.”216
216
At pp. 459-461.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CO-OWNERSHIP
Since the lot and its improvement were mortgaged by
the deceased parents, there can be no question that a co-
ownership existed among the heirs during the period given
by law to redeem the foreclosed property. Redemption by
one during this period would have inured to the benefit of
all (Adille v. Court of Appeals, G.R. No. 44546, 157 SCRA
455 [1988]; and De Guzman v. Court of Appeals, G.R. No.
47378, 148 SCRA 75 [1987]).
The records show, however, that when the petitioner
purchased the disputed property on August 30, 1974, any co-
ownership among the brothers and sisters no longer existed.
The period to redeem had expired more than one year earlier,
on July 6, 1973. The respondent China Bank consolidated
its ownership and a new title was issued in the bank’s name.
When the heirs allowed the one year redemption period to
expire without redeeming their parents’ former property and
permitted the consolidation of ownership and the issuance
of a new title, the co-ownership was extinguished. The
challenged ruling of the respondent court is, therefore, based
on erroneous premises.
Under Section 63-B of Presidential Decree No. 1529,
the Property Registration Decree, in case of non-redemption,
the purchaser at the foreclosure sale, meaning the respondent
Bank in this case, is entitled to a new certificate of title in
its name after filing the necessary papers with the Register
of Deeds (Spouses Teofisto and Eulalia Verceles v. Court of
First Instance of Rizal, et al., G.R. No. 62219, February 28,
1989). It becomes a ministerial duty to place the buyer in
possession of the property he now owns (Banco Filipino v.
Intermediate Appellate Court, G.R. No. 68878,142 SCRA 44
[1986]). Ownership, therefore, passed to China Bank and
there was no more co-ownership among the heirs.218
218
At pp. 668-669.
325 326 PROPERTY
The Adille case must be distinguished from the case of Tan v.
Court of Appeals.217 In Tan, the heirs (i.e., the co-owners) allowed the
one year redemption period to expire without redeeming their parents’
former property and permitted the consolidation of ownership and the
issuance of a new title in favor of the bank. By their knowing acts of
omission, the heirs in the Tan case allowed the extinction of their co-
ownership.
In Tan, the disputed property was mortgaged by spouses Tan Tiong
Tick and Tan Ong Hun to China Bank in 1963. In 1969, Tan Tiong Tick
died without having paid the mortgage obligation. He was survived by
his widow and six children, including D. Annie Tan. Meanwhile, China
Bank foreclosed the mortgage in 1972. It was the highest bidder at the
public auction. Thereafter, the heirs of Tan Tiong Tick sought to nullify
the real estate mortgage and the foreclosure sale before the defunct
CFI of Manila. The widow, Tan Ong Hun, also died, thus the children
were left to redeem the foreclosed property. The one-year redemption
period lapsed on July 6, 1973, but the heirs of the spouses Tan failed
to redeem the property. China Bank then consolidated its ownership
over the disputed property and a new title was issued in its name. In
the meantime, a compromise agreement was forged between China
Bank and the Tan heirs. The Bank allowed the heirs to repurchase the
property on or before August 31, 1974, otherwise, it would dispose of
the property to another party. Within the agreed period, or on August
30, 1974, only D. Annie Tan repurchased the entire property using her
own funds. The bank, however, insisted that the repurchase be made
for or in behalf of the other heirs as well. Left without any choice, D.
Annie Tan filed an action in court, asserting her exclusive ownership
over the property on the ground that the co-ownership between her and
her brothers and sisters had already been extinguished. In sustaining her
contention, the Supreme Court ruled —
The first question which arises is the correctness of
the assumption that there was a co-ownership among the
children of Tan Tiong Tick and Tan Ong Hun when the
petitioner purchased the property.
217
172 SCRA 660, April 24, 1989.
327 328 PROPERTY
§ 73. Prescription
[73.1] General Rule: Prescription Does Not Lie
Co-ownership is a form of trust and every co-owner is a trustee
for the others,219 hence, the relationship of such co-owner to the other
co-owners is fiduciary in character and attribute.220 Whether established
by law or agreement of the co-owners, the property or thing held pro
indiviso is impressed with a fiducial nature so that each co-owner
becomes a trustee for the benefit of his co-owners and he may not do
any act prejudicial to the interest of his co-owners.221 Thus, the Supreme
Court has held that the possession by a co-owner is like that of a
trustee222 and shall not be regarded as adverse to the other co-owners
but in fact beneficial to all of them.223 Following this principle, it is the
rule in this jurisdiction that “no prescription shall lie in favor of a co-
owner or co-heirs as long as he expressly or impliedly recognizes the
co-ownership.”224
[73.2] Exception: When Co-Ownership Is Repudiated
In a co-ownership, the act of one benefits all the other co-owners,
unless the former repudiates the co-ownership.225 If the co-owner
actually holding the property asserts exclusive dominion over it against
the other co-owners, the corollary of the rule is that he can acquire sole
title to it after the lapse of the prescribed prescriptive period.226 Thus,
prescription, as a mode of terminating a relation of co-ownership, must
have been preceded by repudiation of the co-ownership227 and absent
a clear repudiation of the co-ownership a co-owner cannot acquire by
prescription the share of the other co-owners.228
219
Sanchez v. Court of Appeals, 404 SCRA 541, 548, June 20, 2003.
220
Id.
221
Id.
222
Delima v. CA, 201 SCRA 641, 646, Sept. 24, 1991; Salvador v. CA, 243 SCRA 239,
251, April 5, 1995.
223
Salvador v. CA, 243 SCRA 239, 251, April 5, 1995.
224
Art. 494, last par., NCC.
225
Trinidad v. Court of Appeals, 289 SCRA 188, 211, April 20, 1988.
226
Pangan v. Court of Appeals, 166 SCRA 375, 382, Oct. 17, 1988.
227
Adille v. Court of Appeals, supra, 461.
228
Heirs of Segunda Maningding v. Court of Appeals, supra, 608.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 329
CO-OWNERSHIP
[73.3] Requisites
In order that the title may prescribe in favor of a co-owner or in 229
order that a co-owner’s possession may be deemed adverse to the other
co-owners,230 the following elements must concur:
[73.3.1] The co-owner has performed unequivocal acts of
repudiation amounting to an ouster of the other co-
owners.231
Since the relationship of a co-owner to the other co-owners is
fiduciary in character and attribute,232 acts which are adverse to strangers
may not be sufficiently adverse to the co-owners.233 Consequently,
a mere silent possession by a co-owner, his receipt of rents, fruits or
profits from the property, the erection of buildings and fences and
the planting of trees thereon, and the payment of land taxes, cannot
serve as proof of exclusive ownership, if it is not borne out by clear,
complete and conclusive evidence that he exercised acts of possession
which unequivocally constituted an ouster or deprivation of the rights
of the other co-owners.234 Thus, the mere fact that the tax declaration is
in the name of one of the co-owners alone does not constitute sufficient
repudiation of the co-ownership as the same is not an act adverse to
the interests of the other co-owners,235 especially if the payment of land
taxes in the name of such co-owner has been agreed upon by all the
co-owners.236
While prescription among co-owners cannot take place when the
acts of ownership exercised are vague and uncertain, such prescription
arises and produces all its effects when the acts of ownership do not
evince any doubt as to the ouster of the rights of the other co-owners.237
For example, when a co-owner of the property executed a deed of
partition and on the strength thereof obtained the cancellation of the title
in the name of their predecessor and the issuance of a new one wherein
229
Robles v. Court of Appeals, 328 SCRA 97, 110, March 14, 2000.
230
Salvador v. Court of Appeals, 243 SCRA 239, 251, April 5, 1995.
231
Robles v. CA, supra; see also Salvador v. CA, supra, 251.
232
Sanchez v. Court of Appeals, supra, 548.
233
Salvador v. CA, supra, 251.
234
Id., citing Bicarme v. Court of Appeals, 186 SCRA 294, 301, June 6, 1990.
235
See Bicarme v. Court of Appeals, supra.
236
See Robles v. Court of Appeals, supra.
237
Heirs of Segunda Maningding v. Court of Appeals, 276 SCRA 601, 609, July 31, 1997.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 331
CO-OWNERSHIP
Art. 495. Notwithstanding the provisions of the preceding article, the
co-owners cannot demand a physical division of the thing owned in com-
mon, when to do so would render it unserviceable for the use for which it
is intended. But the co-ownership may be terminated in accordance with
Article 498. (401a)
Art. 496. Partition may be made by agreement between the parties or
by judicial proceedings. Partition shall be governed by the Rules of Court
insofar as they are consistent with this Code. (402)
Art. 497. The creditors or assignees of the co-owners may take part
in the division of the thing owned in common and object to its being ef-
fected without their concurrence. But they cannot impugn any partition
already executed, unless there has been fraud, or in case it was made
notwithstanding a formal opposition presented to prevent it, without prej-
udice to the right of the debtor or assignor to maintain its validity. (403)
Art. 498. Whenever the thing is essentially indivisible and the co-
owners cannot agree that it be allotted to one of them who shall indemnify
the others, it shall be sold and its proceeds distributed. (404)
Art. 499. The partition of a thing owned in common shall not preju-
dice third persons, who shall retain the rights of mortgage, servitude, or
any other real rights belonging to them before the division was made. Per-
sonal rights pertaining to third persons against the co-ownership shall
also remain in force, notwithstanding the partition. (405)
Art. 500. Upon partition, there shall be a mutual accounting for ben-
efits received and reimbursements for expenses made. Likewise, each
co-owner shall pay for damages caused by reason of his negligence or
fraud. (n)
Art. 501. Every co-owner shall, after partition, be liable for defects
of title and quality of the portion assigned to each of the other co-owners.
(n)
§ 74. Partition
[74.1] Definition
Partition, in general, is the separation, division and assignment of
a thing held in common among those to whom it may belong. The thing
itself may be divided, or its value.245
[74.2] Right of Co-Owner to Demand Partition
Article 494 of the New Civil Code states that “no co-owner shall be
obliged to remain in the co-ownership” and, thus, “each co-owner may
245
Art. 1079, NCC.
330 PROPERTY
he appears as the new owner of the property, he thereby in effect denies
or repudiates the ownership of the other co-owners over their shares.238
Also the filing by a trustee of an action in court against the trustor to
quiet title to the property, or for recovery of ownership thereof, held in
possession by the former, may constitute an act of repudiation of the
trust reposed on him by the latter.239
[73.3.2] Such positive acts of repudiation have been made
known to the other co-owners.240
For title to prescribe in favor of the co-owner, there must be a
clear showing that he has repudiated the claims of the other co-owners
and that they have been categorically advised of the exclusive claim he
is making to the property in question. It is only when such unequivocal
notice has been given that the period of prescription will begin to run
against the other co-owners and ultimately divest them of their own title
if they do not seasonably defend it.241
[73.3.3] The evidence thereof is clear and convincing.242
Mere refusal to accede to a partition, without specifying the
grounds for such refusal, cannot be considered as notice to the other co-
owners of the occupant’s claim of title in himself in repudiation of the
co-ownership. The evidence relative to the possession, as a fact upon
which the alleged prescription is based, must be clear, complete and
conclusive in order to establish said prescription without any shadow
of doubt; and when upon trial it is not shown that the possession of the
claimant has been adverse and exclusive and opposed to the rights of the
others, the case is not one of ownership, and partition will lie.243 Therefore,
while prescription among co-owners cannot take place when the acts of
ownership exercised are vague and uncertain, such prescription arises
and produces all its effects when the acts of ownership do not evince
any doubt as to the ouster of the rights of the other co-owners.244
238
Delima v. Court of Appeals, supra, citing Castillo v. Court of Appeals, 10 SCRA 549.
239
Alzona v. Capunitan, February 28,1962, G.R. No. L-10220, cited in Pangan v. Court of
Appeals, supra.
240
Id.
241
Pangan v. CA, 166 SCRA 375, 382, Oct. 17, 1988.
242
Id.
243
Heirs of Segunda Maningding v. CA, 276 SCRA 601, 608-609, July 31, 1997.
244
Id., at p. 609.
332 PROPERTY
demand at any time the partition of the thing owned in common, insofar
as his share is concerned.” In Budlong v. Bondoc,246 Article 494 has
been interpreted to mean that the action for partition is imprescriptible247
or cannot be barred by laches.248
Note, however, that an action for partition implies that the thing
is still owned in common.249 Hence, as long as the co-ownership is
recognized, an action to compel partition will not prescribe and may
be filed at any time against the actual possessor by any of the other
co-owners.250 If a co-owner or co-heir, however, holds the property in
exclusive adverse possession as owner, asserting sole and exclusive
dominion for the required period, he can acquire sole title to it as
against the co-heirs or co-owners.251 The imprescriptibility of the action
cannot thus be invoked when one of the co-owners has possessed the
property as exclusive owner and for a period sufficient to acquire it by
prescription.252 From the moment one of the co-owners claims that he is
the absolute and exclusive owner of the properties and denies the others
any share therein, the question involved is no longer one of partition,
but of ownership.253 In such case, the imprescriptibility of the action
for partition can no longer be invoked or applied when one of the co-
owners has adversely possessed the property as exclusive owner for a
period sufficient to vest ownership by prescription.254
[74.3] Period of Prescription
When a co-owner has effectively repudiated the co-ownership,
two possibilities may arise: (1) such co-owner may acquire the entire
property by virtue of acquisitive prescription if his possession meets all
the requirements of the law, and after the expiration of the prescriptive
period; or (2) the other co-owners who were deprived of their share may
lose their right to seek a declaration of the existence of the co-ownership
246
79 SCRA 24.
247
Cited in Tomas Claudio Memorial College, Inc. v. Court of Appeals, 316 SCRA 502.
248
Salvador v. Court of Appeals, 243 SCRA 239, 250-251.
249
Bicarme v. Court of Appeals, supra.
250
Pangan v. Court of Appeals, supra.
251
Id.
252
Id.
253
Id.
254
Delima v. Court of Appeals, supra.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CO-OWNERSHIP
and of their rights thereunder because the same may already be barred
under the statute of limitations (or extinctive prescription).
[74.3.1] Acquisitive Prescription
While the action to demand partition of a co-owned property does
not prescribe, a co-owner may acquire ownership thereof by prescription
where there exists a clear repudiation of the co-ownership, and the co-
owners are apprised of the claim of adverse and exclusive ownership.255
Acquisitive prescription of dominion and other real rights may be
ordinary or extraordinary.256 Ordinary acquisitive prescription requires
possession of things in good faith and with just title for a period of ten
years.257 Without good faith and just title, acquisitive prescription can
only be extraordinary in character which requires uninterrupted adverse
possession for thirty years.258 The case of Heirs of Flores Restar v. Heirs
of Dolores R. Cichon259 is an example of a case where a co-owner has
acquired the co-owned property by acquisitive prescription.
Heirs of Flores Restar v. Heirs of Dolores R. Cichon
475 SCRA 731, Nov. 22, 2005
In 1935, Emilio Restar (Restar) died intestate, leaving eight (8) children-
compulsory heirs, namely: Flores Restar, Dolores Restar-Cichon, Perpetua
Restar-Sta. Maria, Paciencia Restar-Manares, Dominica Restar-Relojero,
Policarpio Restar, Maria Restar-Rose and Adolfo Restar. In 1960, Restar’s
eldest child, Flores, on the basis of a July 12, 1959 Joint Affidavit he executed
with one Helen Restar, caused the cancellation of Tax Declaration No. 6696 in
Restar’s name covering a 5,918 square meter parcel of land, Lot 3177 (the lot),
located at Barangay Carugdog, Lezo, Aklan which was among the properties
left by Restar, and the issuance of Tax Declaration No. 11134 in his name.
Flores died on June 10, 1989. On November 5, 1998, the co-heirs of Flores
discovered the cancellation of Restar’s Tax Declaration No. 6696 and the
issuance in lieu thereof of Tax Declaration No. 11134 in the name of Flores. On
January 21, 1999, the heirs of Flores’ sisters Dolores R. Cichon, Perpetua Sta.
Maria, and Maria Rose who had in the meantime died, together with Flores’
surviving sisters Dominica Restar-Relojero and Paciencia Restar-Manares, filed
a Complaint against Flores’ heirs for “partition of the lot, declaration of nullity
255
Heirs of Flores Restar v. Heirs of Dolores R. Cichon, 475 SCRA 731, Nov. 22, 2005.
256
Id.
257
Id.
258
Id.
259
Supra.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
CO-OWNERSHIP
from his father by means of a joint affidavit which he executed
with one Helen Restar, and he requested the Provincial Treasurer/
Assessor to have the land declared in his name. It was admitted
by the parties during the pre-trial that this affidavit was the basis
of the transfer of Tax Declaration No. 6686 from Emilio Restar
to Flores Restar. So that from 1960 the land was declared in the
name of Flores Restar (Exhibit 10). This was the first concrete act
of repudiation made by Flores of the co-ownership over the land
in question. x x x
Plaintiffs did not deny that aside from the verbal partition
of one parcel of land in Carugdog, Lezo, Aklan way back in 1945,
they also had an amicable partition of the lands of Emilio Restar in
Cerrudo and Palale, Banga Aklan on September 28, 1973 (Exhibit
“20”). If they were able to demand the partition, why then did they
not demand the inclusion of the land in question in order to settle
once and for all the inheritance from their father Emilio Restar,
considering that at that time all of the brothers and sisters, the
eight heirs of Emilio Restar, were still alive and participated in the
signing of the extra-judicial partition?
Also it was admitted that Flores died only in 1989. Plaintiffs
had all the chances (sic) to file a case against him from 1960, or a
period of 29 years when he was still alive, yet they failed to do so.
They filed the instant case only on January 22, 1999, almost ten
(10) years after Flores’ death.
From the foregoing evidence, it can be seen that the adverse possession
of Flores started in 1960, the time when the tax declaration was transferred
in his name. The period of acquisitive prescription started to run from this
date. Hence, the adverse possession of Flores Restar from 1960 vested in him
exclusive ownership of the land considering the lapse of more than 38 years.
Acquisitive prescription of ownership, laches and prescription of the action for
partition should be considered in favor of Flores Restar and his heirs.
While tax declarations and receipts are not conclusive evidence of
ownership and do not prove title to the land, nevertheless, when coupled with
actual possession, they constitute evidence of great weight and can be the basis
of a claim of ownership through prescription.
As for respondents’ claim that they have been receiving shares from the
produce of the land, it was correctly discredited by the trial court.
[P]laintiffs’ claim that Flores Restar gave them five to eight
gantas each as their shares in the produce cannot be sustained.
A few gantas cannot be considered one-eight share of sixty (60)
333 334 PROPERTY
of documents, ownership with damages and preliminary injunction” before the
Regional Trial Court (RTC) of Aklan. Flores’ brothers Policarpio and Adolfo
were impleaded also as defendants, they being unwilling co-plaintiffs.
It has been shown during the trial that the complainants (respondents)
never possessed the lot since the death of Restar and asserted their claim
thereto only on January 21, 1999 when they filed the complaint for partition.
In contrast, Flores took possession of the lot after Restar’s death and exercised
acts of dominion thereon — tilling and cultivating the land, introducing
improvements, and enjoying the produce thereof — and in 1960 was able to
secure a tax declaration in his name. In addition, the heirs of Restar had a
verbal partition of one parcel of land in Carugdog, Lezo, Aklan in 1945 and
an amicable partition of the lands of Restar in Banga, Aklan in 1973 without
demanding for the partition of the subject lot. In holding that Flores’ possession
ripened into ownership through acquisitive prescription, the Supreme Court
explained —
Contrary to the findings of the appellate court, the records of
the case amply support petitioners’ claim that the requirements for
extraordinary prescription had been duly met.
When Restar died in 1935, his eight children became pro
indiviso co-owners of the lot by intestate succession. Respondents
never possessed the lot, however, much less asserted their claim
thereto until January 21, 1999 when they filed the complaint for
partition subject of the present petition.
In contrast, Flores took possession of the lot after Restar’s
death and exercised acts of dominion thereon — tilling and
cultivating the land, introducing improvements, and enjoying the
produce thereof.
The statutory period of prescription, however, commenced
not in 1935 but in 1960 when Flores, who had neither title nor good
faith, secured a tax declaration in his name and may, therefore,
be said to have adversely claimed ownership of the lot. And
respondents were also deemed to have been on said date become
aware of the adverse claim.
Flores’ possession thus ripened into ownership through
acquisitive prescription after the lapse of thirty years in accordance
with the earlier quoted Article 1137 of the New Civil Code.
The following observations of the trial court thus merit this
Court’s approval.
The evidence proved that as far back as 1959, Flores Restar
adjudicated unto himself the whole land in question as his share
335 336 PROPERTY
cavans of palay produced per cropping. One eight of sixty cavans
would be at least six cavans, not merely gantas after excluding
expenses for cultivation and production. If plaintiffs were to be
believed, their whole 7/8 share of the produce would total two
cavans, six gantas only at the usual rate of 25 gantas per cavan.
Unless there are strong and impelling reasons to disturb the trial court’s
findings of facts which must, as a matter of judicial policy, be accorded with the
highest respect, they must remain. Respondents have not, however, proffered
any reason warranting the disturbance of the trial court’s findings of facts.
Indeed, the following acts of Flores show possession adverse to his co-
heirs: the cancellation of the tax declaration certificate in the name of Restar
and securing another in his name; the execution of a Joint Affidavit stating
that he is the owner and possessor thereof to the exclusion of respondents;
payment of real estate tax and irrigation fees without respondents having ever
contributed any share therein; and continued enjoyment of the property and its
produce to the exclusion of respondents. And Flores’ adverse possession was
continued by his heirs.
[74.3.2] Extinctive Prescription
While the action for the partition of the thing owned in common
(actio communi dividendo or actio familiae erciscundae) does not
prescribe, the co-ownership does not last forever since it may be
repudiated by a co-owner.260 In such a case, the action for partition
does not lie.261 Hence, if the defendants show that they had previously
asserted title in themselves adversely to the plaintiff and for the requisite
period of time, the plaintiff’s right to require recognition of his status
as a co-owner will have been lost by prescription and the court cannot
issue an order granting partition.262 Hence, from the moment one of the
co-owners claims that he is the absolute and exclusive owner of the
properties and denies the others any share therein, the question involved
is no longer one of partition but of ownership263 and the prescriptive
period will begin to run and may eventually operate to divest the real
owners of their right to the property after the lapse of the applicable
statutory period.264
260
Jardin v. Hallasgo, 117 SCRA 532, 536, Sept. 30, 1982.
261
Id.
262
Roque v. Intermediate Appellate Court, 165 SCRA 118, 126, Aug. 30, 1988.
263
Delima v. Court of Appeals, 201 SCRA 641, Sept. 24, 1991.
264
165 SCRA 368, 376, Sept. 19, 1988.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 337
CO-OWNERSHIP
As discussed in supra § 73.1, a co-ownership is a form of trust
and every co-owner is a trustee for the others. In Article 1451, when
land passes by succession to any person and he causes the legal title
to be put in the name of another, a trust is established by implication
of law for the benefit of the true owner. Likewise, under Article 1456
of the same Code, if property is acquired through mistake or fraud, the
person obtaining it is, by force of law, considered a trustee of an implied
trust for the benefit of the person from whom the property comes. Thus,
in a situation where there is a repudiation of the co-ownership over a
real property, it has been held that the action for reconveyance by a co-
owner of his share prescribes in ten (10) years, the action being based
on an implied or constructive trust.265
When does the ten-year period commence to run? In a registered
property, the point of reference is ordinarily the date of registration of
the deed or the date of the issuance of the certificate of title over the
property.266 The Supreme Court has held that when a co-owner of the
property in question executed a deed of partition and on the strength
thereof obtained the cancellation of the title in the name of their
predecessor and the issuance of a new one wherein he appears as the
new owner of the property, thereby in effect denying or repudiating
the ownership of the other co-owners over their shares, the statute of
limitations started to run for the purposes of the action instituted by
the latter seeking a declaration of the existence of the co-ownership
and of their rights thereunder.267 In Delima v. Court of Appeals,268 it was
held that the issuance of the new title in the name of one of the co-
owners constituted an open and clear repudiation of the trust or co-
ownership and as the certificate of title was notice to the whole world
of his exclusive title to the land, such rejection was binding on the
other co-owners and started as against them the period of prescription.
In Delima, three brothers and a sister inherited a parcel of land from
their father, Lino Delima, in 1921. In 1953, the inherited property was
transferred in the name of the “Legal Heirs of Lino Delima, represented
by Galileo Delima” under TCT No. 2744. In the same year, Galileo
Delima executed an affidavit of “Extra-judicial Declaration of Heirs”
265
Delima v. CA, supra; Segura v. Segura, 165 SCRA 368; Heirs of Jose Olviga v. Court of
Appeals, 227 SCRA 330.
266
Vda. de Cabrera v. CA, 267 SCRA 339.
267
Delima v. CA, supra; Castillo v. Court of Appeals, 10 SCRA 549.
268
Supra.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 339
CO-OWNERSHIP
when petitioners filed their action for reconveyance and/or
to compel partition on February 29, 1968, such action was
already barred by prescription. Whatever claims the other
co-heirs could have validly asserted before can no longer be
invoked by them at this time.
In Maritegui v. Court of Appeals,269 however, the Supreme Court
held that when a co-owner or co-heir registered the properties in his
name in fraud of other co-owners or co-heirs, prescription can only be
deemed to have commenced from the time the latter discovered the
former’s act of defraudation. In Adille v. Court of Appeals,270 the Court
held that while it is true that registration under the Torrens system is
constructive notice of title, the Torrens title does not furnish a shield for
fraud. In Adille, one of the co-owners redeemed a foreclosed property
belonging to the co-ownership and was able to secure a title only in his
name. In holding that the action filed by the other co-owners has not yet
prescribed, the Court explained —
This Court is not unaware of the well-established
principle that prescription bars any demand on property
(owned in common) held by another (co-owner) following
the required number of years. In that event, the party in
possession acquires title to the property and the state of
co-ownership is ended. In the case at bar, the property was
registered in 1955 by the petitioner, solely in his name, while
the claim of the private respondents was presented in 1974.
Has prescription then, set in?
We hold in the negative. Prescription, as a mode of
terminating a relation of co-ownership, must have been
preceded by repudiation (of the co-ownership). The act of
repudiation, in turn is subject to certain conditions: (1) a
co-owner repudiates the co-ownership; (2) such an act of
repudiation is clearly made known to the other co-owners;
(3) the evidence thereon is clear and conclusive; and (4) he
has been in possession through open, continuous, exclusive;
and notorious possession of the property for the period
required by law.
269
205 SCRA 337, citing Adille v. Court of Appeals, 157 SCRA 455.
270
Supra.
338 PROPERTY
and based on this affidavit, TCT No. 2744 was cancelled and TCT No.
3009 was issued on February 4, 1954 in the name of Galileo Delima
alone to the exclusion of the other heirs. Thereafter, Galileo Delima
declared the lot in his name for taxation purposes and paid the taxes
thereon from 1954 to 1965. On February 28, 1968, the surviving heirs of
the siblings of Galileo filed an action for reconveyance and/or partition
of the property. In holding that the action filed had already prescribed,
the Court explained —
We have held that when a co-owner of the property
in question executed a deed of partition and on the strength
thereof obtained the cancellation of the title in the name of
their predecessor and the issuance of a new one wherein he
appears as the new owner of the property, thereby in effect
denying or repudiating the ownership of the other co-owners
over their shares, the statute of limitations started to run for
the purposes of the action instituted by the latter seeking
a declaration of the existence of the co-ownership and of
their rights thereunder (Castillo v. Court of Appeals, No.
L-18046, March 31, 1964, 10 SCRA 549). Since an action
for reconveyance of land based on implied or constructive
trust prescribes after ten (10) years, it is from the date of the
issuance of such title that the effective assertion of adverse
title for purposes of the statute of limitations is counted
(Jaramil v. Court of Appeals, No. L-31858, August 31, 1977,
78 SCRA 420).
Evidence shows that TCT No. 2744 in the name of the
legal heirs of Lino Delima, represented by Galileo Delima,
was cancelled by virtue of an affidavit executed by Galileo
Delima and that on February 4, 1954, Galileo Delima obtained
the issuance of a new title in his name numbered TCT No.
3009 to the exclusion of his co-heirs. The issuance of this
new title constituted an open and clear repudiation of the trust
or co-ownership, and the lapse of ten (10) years of adverse
possession by Galileo Delima from February 4, 1954 was
sufficient to vest title in him by prescription. As the certificate
of title was notice to the whole world of his exclusive title to
the land, such rejection was binding on the other heirs and
started as against them the period of prescription. Hence,
340 PROPERTY
The instant case shows that the petitioner had not
complied with these requisites. We are not convinced that
he had repudiated the co-ownership; on the contrary, he
had deliberately kept the private respondents in the dark
by feigning sole heirship over the estate under dispute. He
cannot therefore be said to have “made known” his efforts
to deny the co-ownership. Moreover, one of the private
respondents, Emeteria Asejo, is occupying a portion of the
land up to the present, yet, the petitioner has not taken pains to
eject her therefrom. As a matter of fact, he sought to recover
possession of that portion Emeteria is occupying only as a
counterclaim, and only after the private respondents had first
sought judicial relief.
It is true that registration under the Torrens system
is constructive notice of title, but it has likewise been our
holding that the Torrens title does not furnish a shield for
fraud. It is therefore no argument to say that the act of
registration is equivalent to notice of repudiation, assuming
there was one, notwithstanding the long-standing rule that
registration operates as a universal notice of title.
For the same reason, we cannot dismiss the private
respondents’ claims commenced in 1974 over the estate
registered in 1955. While actions to enforce a constructive
trust prescribes in ten years, reckoned from the date of the
registration of the property, we, as we said, are not prepared
to count the period from such a date in this case. We note
the petitioner’s sub rosa efforts to get hold of the property
exclusively for himself beginning with his fraudulent
misrepresentation in his unilateral affidavit of extrajudicial
settlement that he is “the only heir and child of his mother
Feliza with the consequence that he was able to secure title
in his name also.’’ Accordingly, we hold that the right of the
private respondents commenced from the time they actually
discovered the petitioner’s act of defraudation. According to
the respondent Court of Appeals, they “came to know [of it]
apparently only during the progress of the litigation.” Hence,
“prescription is not a bar.”
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 341
CO-OWNERSHIP
Between the two contrasting views in the Delima and Mariategui
cases, the ruling in the latter case is more in keeping with justice and
equity and should thus be followed — after all, our courts are not only
courts of law but also, and more importantly, courts of justice.
The foregoing discussions, however, apply only when the plaintiff
or the person enforcing the trust is not in possession of the property,
since if a person claiming to be the owner thereof is in actual possession
of the property the right to seek reconveyance, which in effect seeks to
quiet title to the property, does not prescribe.271 The reason for this is
that one who is in actual possession of a piece of land claiming to be
the owner thereof may wait until his possession is disturbed or his title
is attacked before taking steps to vindicate his right, the reason for the
rule being, that his undisturbed possession gives him a continuing right
to seek the aid of a court of equity to ascertain and determine the nature
of the adverse claim of a third party and its effect on his own title, which
right can be claimed only by one who is in possession.272
[74.4] Action For Partition, Explained
An action for partition — which is typically brought by a person
claiming to be co-owner of a specified property against a defendant
or defendants whom the plaintiff recognizes to be co-owners — may
be seen to present simultaneously two principal issues. First, there is
the issue of whether the plaintiff is indeed a co-owner of the property
sought to be partitioned. Second, assuming that the plaintiff successfully
hurdles the first issue, there is the secondary issue of how the property
is to be divided between plaintiff and defendant(s) — i.e., what portion
should go to which co-owner.273
Should the trial court find that the defendants do not dispute the
status of the plaintiff as co-owner, the court can forthwith proceed to the
actual partitioning of the property involved. In case the defendants assert
in their Answer exclusive title in themselves adversely to the plaintiff,
the court should not dismiss the plaintiffs action for partition but, on
the contrary and in the exercise of its general jurisdiction, resolve the
question of whether the plaintiff is co-owner or not. Should the trial
271
Vda. de Cabrera v. CA, supra.
272
Id.
273
Roque v. Intermediate Appellate Court, 165 SCRA 118, 125.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 343
CO-OWNERSHIP
ownership beyond the period set by the law. Otherwise, the 20-year
limitation expressly mandated by the Civil Code would be rendered
meaningless.280
(3) When the law prohibits partition281 such as when the origin or
juridical nature of co-ownership prevents partition:
Examples:
(a) The spouses, who are governed by a regime of absolute
community, cannot agree to partition the community property
without a judicial order.282
(b) The heirs cannot partition the family home upon the death
of the person or persons who constituted the same unless the
court finds compelling reasons therefore.283 Upon the death of
the person or persons who constituted the family home and
there are two or more heirs, the whole estate of the decedent
(including the family home) is, before its partition, owned in
common by such heirs, subject to the payment of the debts
of the deceased.284 As a rule, any one of the co-owners may
demand partition at any time.285 However, so long as the
family home continues as such pursuant to the provisions
of Article 159 of the Family Code, the heirs are prohibited
from partitioning the family home unless the court finds
compelling reason therefore.286
(4) When partition would render the thing unserviceable for the
use for which it is intended.287
[74.6] When thing is essentially indivisible
Whenever the thing is essentially indivisible and the co-owners
cannot agree that it be allotted to one of them who shall indemnify the
others, it shall be sold and its proceeds distributed.288 This is resorted to
280
281
Oliveras v. Lopez, supra.
Art. 494, 3rd par., NCC.
282
283
Art. 134, FC.
Art. 159, FC.
284
Art. 1078, NCC.
285
Art. 494, NCC.
286
Art. 159, FC.
287
Art. 495, NCC.
288
Art. 498, NCC.
342 PROPERTY
court find that the plaintiff was unable to sustain his claimed status
as co-owner, or that the defendants are or have become the sole and
exclusive owners of the property involved, the court will necessarily
have to dismiss the action for partition. This result would be reached,
not because the wrong action was commenced by the plaintiff, but
rather because the plaintiff having been unable to show co-ownership
rights in himself, no basis exists for requiring the defendants to submit
to partition the property at stake. If, upon the other hand, the court
after trial should find the existence of co-ownership among the parties
litigant, the court may and should order the partition of the property
in the same action. Judgment for one or the other party being on the
merits, the losing party (respondents in this case) may then appeal the
same. In either case, however, it is quite unnecessary to require the
plaintiff to file another action, separate and independent from that for
partition originally instituted. Functionally, an action for partition may
be seen to be at once an action for declaration of co-ownership and for
segregation and conveyance of a determinate portion of the property
involved. This is the import of our jurisprudence on the matter and is
sustained by the public policy which abhors multiplicity of actions.274
[74.5] When Partition Not Available
The action for partition will not be available in the following
instances:
(1) When there is an agreement among the owners to keep
the thing undivided.275 However, such agreement must not exceed ten
years.276 Where the parties stipulate a definite period of indivision which
exceeds the maximum allowed by law, said stipulation shall be void
only as to the period beyond such maximum.277 However, the period of
ten years may be extended by a new agreement.278
(2) When the donor or testator prohibits partition for a period
which shall not exceed twenty (20) years.279 Although the Civil Code
is silent as to the effect of the indivision of a property for more than
twenty years, it would be contrary to public policy to sanction co-
274
Id.
275
Art. 494, 2nd par., NCC.
276
Id.
277
Oliveras v. Lopez, 168 SCRA 431.
278
Art. 494, 2nd par., NCC; see also Art. 1083, NCC.
279
Art. 494, 3rd par., NCC.
344 PROPERTY
when: (1) the right to partition the property is invoked by any of the co-
owners but because of the nature of the property it cannot be subdivided
or its subdivision would prejudice the interests of the co-owners, and
(2) the co-owners are not in agreement as to who among them shall be
allotted or assigned the entire property upon proper reimbursement of
the co-owners.289 In Reyes v. Concepcion,290 the Court upheld the order
of the trial court directing the holding of a public sale of the properties
owned in common pursuant to Article 498 of the Civil Code. The Court
therein held —
Moreover, there is no legal infirmity tainting respondent
trial judge’s order for the holding of a public sale of the
subject properties pursuant to the provisions of Article 498
of the New Civil Code. After a careful examination of the
proceedings before respondent trial judge, the Court finds
that respondent trial judge’s order was issued in accordance
with the laws pertaining to the legal or juridical dissolution
of co-ownerships.
It must be noted that private respondents, in their answer
with counterclaim prayed for, inter alia, the partition of the
subject properties in the event that the petitioners refused
to purchase their pro-indiviso shares at the rate of P12.50
per square meter. Unlike petitioners’ claim of a pre-emptive
right to purchase the other co-owners’ pro-indiviso shares,
private respondents’ counterclaim for the partition of the
subject properties is recognized by law, specifically Article
494 of the New Civil Code which lays down the general rule
that no co-owner is obliged to remain in the co-ownership.
Article 494 reads as follows:
No co-owner shall be obliged to remain in
the co-ownership. Each co-owner may demand at
any time partition of the thing owned in common,
insofar as his share is concerned.
Nevertheless, an agreement to keep the
thing undivided for a certain period of time, not
289
Aguilar v. Court of Appeals, 227 SCRA 473.
290
190 SCRA 171.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 345 346 PROPERTY
CO-OWNERSHIP

exceeding ten years, shall be valid. This term may
be extended by a new agreement.
A donor or testator may prohibit partition
for a period which shall not exceed twenty years.
Neither shall there be partition when it is
prohibited by law.
No prescription shall run in favor of a co-
owner or co-heir against his co-owners or co-heirs
so long as he expressly or impliedly recognizes
the co-ownership.
None of the legal exceptions under Article 494 applies
to the case at bar. Private respondents’ counterclaim for the
partition of the subject properties was therefore entirely
proper. However, during the pre-trial proceedings, petitioners
adopted the position that the subject properties were incapable
of physical partition. Initially, private respondents disputed
this position. But after petitioners inexplicably refused to
abide by the pre-trial order issued by respondent trial judge,
and stubbornly insisted on exercising an alleged pre-emptive
right to purchase private respondents’ shares at a “reasonable
price,” private respondents relented and adopted petitioner’s
position that the partition of the subject properties was
not economically feasible, and, consequently, invoked the
provisions of Article 498 of the New Civil Code[Private
respondents’ “Motion To Allot Properties To Defendants
Or To Sell the Same Pursuant To Article 498 Of The Civil
Code,” Annex “D” of the Petition; Rollo, pp. 46-49].
Inasmuch as the parties were in agreement as regards
the fact that the subject properties should not be partitioned,
and private respondents continued to manifest their desire to
terminate the co-ownership arrangement between petitioners
and themselves, respondent trial judge acted within his
jurisdiction when he issued his order dated February 4, 1981
requiring the parties to answer certain questions for the
purpose of determining whether or not the legal conditions
for the applicability of Article 498 of the New Civil Code
were present in the case.
Art. 498 provides that:
Whenever the thing is essentially indivisible
and the co-owners cannot agree that it be allotted
to one of them who shall indemnify the others, it
shall be sold and its proceeds distributed.
The sale of the property held in common
referred to in the above article is resorted to when
(1) the right to partition the property among
the co-owners is invoked by any of them but
because of the nature of the property, it cannot be
subdivided or its subdivision [See Article 495 of
the New Civil Code] would prejudice the interests
of the co-owners (See Section 5 of Rule 69 of the
Revised Rules of Court) and (2) the co-owners
are not in agreement as to who among them shall
be allotted or assigned the entire property upon
reimbursement of the shares of the other co-
owners.
Petitioners herein did not have justifiable grounds
to ignore the queries posed by respondent trial judge and
to insist that hearings be conducted in order to ascertain
the reasonable price at which they could purchase private
respondents’ pro-indiviso shares [Petitioners’ “Compliance
and Motion” dated February 27, 1981, Annex “H” of the
Petition; Rollo, pp. 57-60].
Since at this point in the case it became reasonably
evident to respondent trial judge that the parties could not
agree on who among them would be allotted the subject
properties, the Court finds that respondent trial judge
committed no grave abuse of discretion in ordering the
holding of a public sale for the subject properties (with the
opening bid pegged at P12.50 per square meter), and the
distribution of the proceeds thereof amongst the co-owners,
as provided under Article 498 of the New Civil Code.
In Aguilar v. Court of Appeals, cited in supra § 64.3, the Court
also sustained the sale of the community property under the provisions
of Article 498 of the Civil Code.

PROPERTY, OWNERSHIP, AND ITS MODIFICATION 347 348 PROPERTY

CO-OWNERSHIP

Article 498 of the Civil Code is complemented by Article 1086 of
the Civil Code which provides, as follows:
“Art. 1086. Should a thing be indivisible, or would be
much impaired by its being divided, it may be adjudicated to
one of the heirs, provided he shall pay the others the excess
in cash.
Nevertheless, if any of the heirs should demand that the
thing be sold at public auction and that strangers be allowed
to bid, this must be done. (1062)”
income and fruits which each one of them may have received from any
property of the estate, for any useful and necessary expenses made upon
such property, and for any damage thereto through malice or neglect.298
(5) Every co-owner shall be liable for defects of title and quality
of the portion assigned to each of the other co-owners.299
— oOo —

[74.7] Legal Effects of Partition

Once a partition has been made, whether by agreement among
the co-owners or by judicial proceedings,291 the following are the legal
effects thereof:
(1) The co-ownership is terminated292 and each co-owner
becomes the absolute and exclusive owner of the share allotted to him.293
And he shall be deemed to be in exclusive possession of that portion
which has been allotted to him even during the entire period that the
co-ownership lasted.294
(2) It shall not prejudice the rights of third persons, who shall
retain the rights of mortgage, servitude, or any other real rights belonging
to them before the division was made.295
(3) Personal rights pertaining to third persons against the
ownership shall also remain in force.296
(4) Mutual accounting shall be rendered by the co-owners to
each other with regard to benefits and expenses and each co-owner
shall pay for damages caused by reason of his negligence or fraud.297 In
the partition among co-heirs, they shall reimburse one another for the

291
Art. 496, NCC.
292
See discussion under supra § 72.1.
293
Art. 1091, NCC.
294
Art. 543, NCC.
295
Art. 499, NCC.
296 298
Id. Art. 1087, NCC.
297 299
Art. 500, NCC. Art. 501, NCC; see also Arts. 1092-1096, NCC.
 349 350 PROPERTY

(4) Rain waters falling on said lands, as long as they remain with-
in the boundaries;
(5) The beds of flowing waters, continuous or intermittent, formed
Title IV. SOME SPECIAL PROPERTIES by rain water, and those of brooks, crossing lands which are not of public
dominion.
In every drain or aqueduct, the water, bed, banks and floodgates
Chapter 1 shall be considered as an integral part of the land or building for which
the waters are intended. The owners of lands, through which or along the
WATERS boundaries of which the aqueduct passes, cannot claim ownership over
it, or any right to the use of its bed or banks, unless the claim is based on
Section 1. Ownership of Waters titles of ownership specifying the right or ownership claimed. (408)

Art. 502. The following are of public dominion: Section 2. The Use of Public Waters
(1) Rivers and their natural beds; Art. 504. The use of public waters is acquired:
(2) Continuous or intermittent waters of springs and brooks run- (1) By administrative concession;
ning in their natural beds and the beds themselves;
(2) By prescription for ten years.
(3) Waters rising continuously or intermittently on lands of public
dominion; The extent of the rights and obligations of the use shall be that es-
tablished, in the first case, by the terms of the concession, and, in the sec-
(4) Lakes and lagoons formed by Nature on public lands, and ond case, by the manner and form in which the waters have been used.
their beds; (409a)
(5) Rain waters running through ravines or sand beds, which are Art. 505. Every concession for the use of waters is understood to be
also of public dominion; without prejudice to third persons. (410)
(6) Subterranean waters on public lands; Art. 506. The right to make use of public waters is extinguished by
(7) Waters found within the zone of operation of public works, the lapse of the concession and by non-user for five years. (411a)
even if constructed by a contractor;
(8) Waters rising continuously or intermittently on lands belong-
§ 75. Governing Laws on Waters
ing to private persons, to the State, to a province, or to a city or a munici-
pality from the moment they leave such lands; Prior to the enactment of the New Civil Code, matters relating to
(9) The waste waters of fountains, sewers and public establish- waters or water resources were governed by the following laws: (1) the
ments. (407) Civil Code of Spain of 1889 (the Old Civil Code), which was extended
Art. 503. The following are of private ownership: to the Philippines by Royal Decree of July 31, 1889; (2) the Spanish
(1) Continuous or intermittent waters rising on lands of private Law on Waters of 1866, which was extended to the Philippines by the
ownership, while running through the same; Royal Decree of August 3, 1866; and (3) the Irrigation Act (Act No.
(2) Lakes and lagoons, and their beds, formed by Nature on such
2152), which was passed by the Philippine Legislature in 1912.
lands; While the New Civil Code (R.A. No. 386, as amended), which
(3) Subterranean waters found on the same; took effect on August 30, 1950, repealed expressly those parts and
provisions of the Civil Code of 1889 which were then in force at that
time, there was no express repeal of the provisions of the Spanish Law
349 on Waters of 1866 and the Irrigation Act of 1912.

PROPERTY, OWNERSHIP, AND ITS MODIFICATION 351 352 PROPERTY

SOME SPECIAL PROPERTIES
Waters

In 1976, the Water Code of the Philippines (P.D. No. 1067) was 3. The State may allow the use or development of waters by
promulgated expressly repealing the provisions of the Irrigation Act. administration concession.
However, the provisions of the Spanish Law on Waters of 1866 and the 4. The utilization, exploitation, development, conservation
New Civil Code on ownership of waters, easements relating to waters, and protection of water resources shall be subject to the control and
use of public waters and acquisitive prescription on the use of waters, regulation of the government through the National Water Resources
were considered repealed only to the extent that they were inconsistent Council, hereinafter referred to as the Council.
with the provisions of the Water Code of the Philippines. Hence, under
present laws, matters relating to waters or water resources are governed 5. Preference in the use and development of waters shall
primarily by the Water Code of the Philippines. The provisions of the consider current usages and be responsive to the changing needs of the
New Civil Code on waters and that of the Spanish Law on Waters of country.3
1866, which are not in conflict with the Water Code of the Philippines,
[76.1] State Ownership of Waters
still apply.
The Water Code of the Philippines, in implementing the mandate
§ 76. Ownership of Waters of Section 8, Article XIV of the 1973 Constitution4 which declared
The basic provision governing the ownership of waters within the “waters” as belonging to the State, appears to have nationalized the
ownership of waters found in their natural beds by declaring all of them
territorial jurisdiction of the Philippines is Section 2, Article XII of the
as State-owned, whether the waters are found on public property or
1987 Philippine Constitution which provides, part, as follows —
on private lands. Articles 5 and 6 of the Water Code of the Philippines
“Sec. 2. All lands of the public domain, waters, provide, as follows —
minerals, coal, petroleum, and other mineral oils, all forces “Art. 5. The following belong to the state:
of potential energy, fisheries, forests or timber, wildlife,
flora and fauna, and other natural resources are owned by a. Rivers and their natural beds;
the State. x x x”1 b. Continuous or intermittent waters of springs and brooks
With the foregoing provision of the Constitution, it seems that all running in their natural beds and the beds themselves;
waters in their natural beds must be considered of public dominion.2 c. Natural lakes and lagoons;
Indeed, the basic State principles underlying the enactment of the Water
d. All other categories of surface waters such as water
Code of the Philippines are stated, as follows:
flowing over lands, water form rainfall whether natural or artificial,
1. All waters belong to the State. and water from agriculture run-off, seepage and drainage;
2. All waters that belong to the state can not be the subject of e. Atmospheric water;
acquisitive prescription.
f. Subterranean or ground water; and
g. Seawater.
1
This is a substantial reproduction of Section 8, Article XIV of the 1973 Constitution which
provides, as follows:
“Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum, and other min-
eral oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the Philip-
3
pines belong to the State. x x x” See Art. 3, Water Code of the Philippines.
2 4
See II Tolentino, Civil Code of the Philippines, 1992 ed., 219. The precursor of Sec. 2, Article XII of the 1987 Phil. Constitution.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 353
SOME SPECIAL PROPERTIES
Waters
Art. 6. The following waters found on private lands also belong
to the States:
a. Continuous or intermittent waters rising on such
lands;
b. Lakes and lagoons naturally occurring on such lands;
c. Rain water and falling on such lands;
d. Subterranean or ground waters; and
e. Waters in swamps and marshes.
The owner of the land where the water is found may use the same
for domestic purposes without securing a permit, provided that such
use shall be registered, when required by the Council. The Council,
however, may regulate such use when there is wastage, or in times of
emergency.”
In declaring the waters enumerated in Article 6 of the Water Code
of the Philippines as belonging to the State, the said law has the effect of
repealing the provisions of Article 503 of the New Civil Code because
the provisions of the latter law are totally inconsistent with the former.
Under existing laws, therefore, there are no more waters of private
ownership to speak of.
However, for those waters found on private lands mentioned in
Article 6 of the Water Code of the Philippines, the owner of the land
may use the waters for domestic without securing a permit from the
National Water Resources Council, although the Council may regulate
such use in two occasions: (1) when there is wastage; or (2) in times of
emergency.
[76.2] Subterranean or Ground Waters
While it is the rule in Article 437 of the New Civil Code that the
ownership of lands extends to the surface as well as to the subsoil under
it, such rule does not extend to the waters under the ground, known as
“subterranean or ground waters.” Pursuant to paragraph (d) of Article
6 of the Water Code of the Philippines, subterranean or ground waters
belong to the State even if they are found on private lands. As such,
any construction of installations for the utilization of subterranean or
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 355
SOME SPECIAL PROPERTIES
Waters
Section 5. General Provisions
Art. 515. The owner of a piece of land on which there are defensive
works to check waters, or on which, due to a change of their course,
it may be necessary to reconstruct such works, shall be obliged, at his
election, either to make the necessary repairs or construction himself, or
to permit them to be done, without damage to him, by the owners of the
lands which suffer or are clearly exposed to suffer injury. (420)
Art. 516. The provisions of the preceding article are applicable to
the case in which it may be necessary to clear a piece of land of matter,
whose accumulation or fall may obstruct the course of the waters, to the
damage or peril of third persons. (421)
Art. 517. All the owners who participate in the benefits arising from
the works referred to in the two preceding articles, shall be obliged to
contribute to the expenses of construction in proportion to their respec-
tive interests. Those who by their fault may have caused the damage shall
be liable for the expenses. (422)
Art. 518. All matters not expressly determined by the provisions of
this Chapter shall be governed by the special Law of Waters of August 3,
1866, and by the Irrigation Law. (425a)
§ 77. Appropriation of Waters
All waters that belong to the State, according to Article 3 of the
Water Code of the Philippines, cannot be the subject of acquisitive
prescription. Hence, to this extent, paragraph 2 of Article 504 of the
New Civil Code, which authorizes acquisition of use of public waters
by prescription, is deemed to have been repealed.
Ordinarily, appropriation of water is not authorized without a
“water permit,” which is the privilege granted by the government to
appropriate and use water and evidenced by a document known as
“water permit.”6 A water permit, however, need not be secured in the
following instances:
1. For use of waters found on private lands by the owner thereof
but only for domestic purposes.7 Use of water for “domestic purpose” is
the utilization of water for drinking, washing, bathing, cooking or other
6 9
See Art. 13, Water Code of the Philippines.
7 10
See Art. 6, Water Code of the Philippines.
354 PROPERTY
ground waters may not be undertaken unless the plans and specifications
thereof are approved by the proper government agency.5
Section 3. The Use of Waters of Private Ownership
Art. 507. The owner of a piece of land on which a spring or brook
rises, be it continuous or intermittent, may use its waters while they run
through the same, but after the waters leave the land they shall become
public, and their use shall be governed by the Special Law of Waters of
August 3, 1866, and by the Irrigation Law. (412a)
Art. 508. The private ownership of the beds of rain waters does
not give a right to make works or constructions which may change their
course to the damage of third persons, or whose destruction, by the force
of floods, may cause such damage. (413)
Art. 509. No one may enter private property to search waters or make
use of them without permission from the owners, except as provided by
the Mining Law. (414a)
Art. 510. The ownership which the proprietor of a piece of land has
over the waters rising thereon does not prejudice the rights which the
owners of lower estates may have legally acquired to the use thereof.
(415)
Art. 511. Every owner of a piece of land has the right to construct
within his property, reservoirs for rain waters, provided he causes no
damage to the public or to third persons. (416)
Section 4. Subterranean Waters
Art. 512. Only the owner of a piece of land, or another person with
his permission, may make explorations thereon for subterranean waters,
except as provided by the Mining Law.
Explorations for subterranean waters on lands of public dominion
may be made only with the permission of the administrative authorities.
(417a)
Art. 513. Waters artificially brought forth in accordance with the Spe-
cial Law of Waters of August 3, 1866, belong to the person who brought
them up. (418)
Art. 514. When the owner of waters artificially brought to the sur-
face abandons them to their natural course, they shall become of public
dominion. (419)
5
See Art. 39, Water Code of the Philippines.
356 PROPERTY
household needs, home gardens, and watering of lawns or domestic
animals.8
2. For appropriation or use of natural bodies of water for any of
the following:
(a) Appropriation of water by means of hand-carried
receptacles; and
(b) Bathing or washing, watering or dipping of domestic
or farm animals, and navigation of watercrafts or transportation of
logs and other objects by floatation.9
Water which are legally appropriated pursuant to the provisions
of the Water Code of the Philippines shall be subject to the control of
the appropriator from the moment it reaches the appropriator’s canal or
aqueduct leading to the place where the waters will be used or stored
and, thereafter, so long as it is being beneficially used for the purposes
for which it was appropriated.10
PRESIDENTIAL DECREE NO. 1067
December 31, 1976
THE WATER CODE OF THE PHILIPPINES
(A DECREE INSTITUTING A WATER CODE, THEREBY
REVISING AND CONSOLIDATING THE LAWS GOVERNING THE
OWNERSHIP, APPROPRIATION, UTILIZATION, EXPLOITATION,
DEVELOPMENT, CONSERVATION AND PROTECTION OF WATER
RESOURCES)
WHEREAS, Article XIV, Section 8 of the New Constitution of the
Philippines provides, inter alia, that all waters of the Philippines belong to the
State;
WHEREAS, existing water legislations are piece-meal inadequate to cope
with increasing scarcity of water and changing patterns of water use;
WHEREAS, there is a need for a Water Code based on rational concepts of
integrated and multi-purpose management of water resources and sufficiently
flexible to adequately meet future developments:
8
See Art. 10, Water Code of the Philippines.
See Art. 14, Water Code of the Philippines.
See Art. 8, Water Code of the Philippines.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 357 358 PROPERTY
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WHEREAS, water is vital national development and it has become Art. 4. Waters, as used in this Code, refers to water under the grounds,
increasingly necessary for government to intervene actively in improving the water above the ground, water in the atmosphere and the waters of the sea
management of water resources; within the territorial jurisdiction of the Philippines.
NOW, THEREFORE, I, FERDINAND, E. MARCOS, President of
the Philippines, by virtue of the powers in me vested by the Constitution, do CHAPTER II
hereby orders and decree the enactment of the Water Code of the Philippines
OWNERSHIP OF WATERS
of 1976, as follows:
Art. 5. The following belong to the state:
CHAPTER I a. Rivers and their natural beds;
DECLARATION OF OBJECTIVES AND PRINCIPLES b. Continuous or intermittent waters of springs and brooks running in
Article 1. This Code shall be known as “The Water Code of the their natural beds and the beds themselves;
Philippines.” c. Natural lakes and lagoons;
Article 2. The objectives of this Code are: d. All other categories of surface waters such as water flowing
a. To establish the basic principles and framework relating to the over lands, water form rainfall whether natural or artificial, and water from
appropriation, control and conservation of water resources to achieve the agriculture run-off, seepage and drainage;
optimum development and rational utilization of these resources; e. Atmospheric water;
b. To define the extent of the rights and obligation of water users and f. Subterranean or ground water; and
owners including the protection and regulation of such rights;
g. Seawater.
c. To adopt a basic law governing the ownership, appropriation,
utilization, exploitation, development, conservation and protection of water Art. 6. The following waters found on private lands also belong to the
resources and rights to land related thereto; and States:

d. To identify the administrative agencies which will enforce this a. Continuous or intermittent waters rising on such lands;
Code. b. Lakes and lagoons naturally occurring on such lands;
Art. 3. The underlying principles of this code are: c. Rain water and falling on such lands;
a. All waters belong to the State. d. Subterranean or ground waters; and
b. All waters that belong to the state can not be the subject of e. Waters in swamps and marshes.
acquisitive prescription.
The owner of the land where the water is found may use the same for
c. The State may allow the use or development of waters by domestic purposes without securing a permit, provided that such use shall be
administration concession. registered, when required by the Council. The Council, however, may regulate
such use when there is wastage, or in times of emergency.
d. The utilization, exploitation, development, conservation and
protection of water resources shall be subject to the control and regulation Art. 7. Subject to the provisions of this Code, any person who captures or
of the government through the National Water Resources Council, hereinafter collects water by means of cisterns, tanks, or pools shall have exclusive control
referred to as the Council. over such water and the right to dispose of the same.
e. Preference in the use and development of waters shall consider Art. 8. Water legally appropriated shall be subject to the control of the
current usages and be responsive to the changing needs of the country. appropriator from the moment it reaches the appropriator’s canal or aqueduct

PROPERTY, OWNERSHIP, AND ITS MODIFICATION 359 360 PROPERTY

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leading to the place where the water will be used or stored and, thereafter, Use of water for industrial purposes is the utilization of water in factories,
so long as it is being beneficially used for the purposes for which it was industrial plants and mines, including the use of water as an ingredient of a
appropriated. finished product.
Use of water for recreational purposes is the utilization of water for
CHAPTER III
swimming pools, bath houses, boating, water skiing, golf courses and other
APPROPRIATION OF WATERS similar facilities in resorts and other places of recreation.

Art. 9. Waters may be appropriated and used in accordance with the
provisions of this Code.
Appropriation of water, as used in this Code, is the acquisition of rights
over the use of waters or the taking or diverting of waters from a natural source
in the manner and for any purpose allowed by law.
Art. 10. Water may be appropriated for the following purposes:
a. Domestic;
Art. 11. The state, for reasons of public policy, may declare waters not
previously appropriated, in whole or in part, exempt from appropriation for
any or all purposes and, thereupon, such waters may not be appropriated for
those purposes.
Art. 12. Waters appropriated for a particular purpose may be applied for
another purpose only upon prior approval of the Council and on condition that
the new use does not unduly prejudice the rights of other permittees, or require
an increase in the volume of water.

b. Municipal; Art. 13. Except as otherwise herein provided, no person, including

government instrumentalities or government-owned or controlled corporations,
c. Irrigation; shall appropriate water without a water right, which shall be evidenced by a
d. Power generation; document known as a water permit.
e. Fisheries; Water right is the privilege granted by the government to appropriate and
use water.
f. Livestock raising;
Art. 14. Subject to the provisions of this Code concerning the control,
g. Industrial;
protection, conservation, and regulation of the appropriation and use of waters,
h. Recreational; and any person may appropriate or use natural bodies of water without securing a
i. Other purposes; water permit for any of the following.

Use of water for domestic purposes is the utilization of water for
drinking, washing, bathing, cooking or other household needs, home gardens,
and watering of lawns or domestic animals.
Use of water for municipal purposes is the utilization of water for
supplying the water requirements of the community.
Use of water for irrigation is the utilization of water for producing
agricultural crops.
a. Appropriation of water by means of hand carried receptacles; and
b. Bathing or washing, watering or dipping of domestic or farm
animals, and navigation of watercrafts or transportation of logs and other
objects by flotation.
Art. 15. Only citizens of the Philippines, of legal age, as well as juridical
persons, who are duly qualified by law to exploit and develop water resources,
may apply for water permits.

Use of water for power generation is the utilization of water for producing
electrical or mechanical power.
Use of water for power fisheries is the utilization of water for the
propagation and culture of fish as a commercial enterprise.
Use of water for livestock raising is the utilization of water for large
herds or flocks of animals raised as a commercial enterprise.
Art. 16. Any person who desires to obtain a water permit shall file an
application with the Council who shall make known said application to the
public for any protests.
In determining whether to grant or deny an application, the Council
shall consider the following: protests filed, if any; prior permits granted; the
availability of water; the water supply need for beneficial use; possible adverse
effects; land-use economics; and other relevant factors.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 361
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Upon approval of an application, a water permit shall be issued and
recorded.
Art. 17. The right to the use of water is deemed acquired as of the date of
filing of the application for a water permit in case of approved permits, or as of
the date of actual use in a case where no permit is required.
Art. 18. All water permits granted shall be subject to conditions of
beneficial use, adequate standards of design and construction, and such other
terms and conditions as may be imposed by the Council.
Such permits shall specify the maximum amount of water which may be
diverted or withdrawn, the maximum rate diversion or withdrawal, the time or
times during the year when water may be diverted or withdrawn, the points or
points of diversion or location of wells, the place of use, the purpose for which
water may be used and such other requirements the Council deems desirable.
Art. 19. Water rights may be lent or transferred in whole or in part to an-
other person with prior approval of the Council, after due notice and hearing.
Art. 20. The measure and limit of appropriation of water shall be
beneficial use.
Beneficial use of water is the utilization of water in the right amount
during the period that the water is needed for producing the benefits for which
the water is appropriated.
Art. 21. Standards of beneficial use shall be prescribed by the Council for
the appropriator of water for different purposes and conditions, and the use of
waters which are appropriated shall be measured and controlled in accordance
therewith.
Excepting those for domestic use, every appropriator of water shall
maintain water control and measuring devices, and keep records or water
withdrawal. When required by the Council, all appropriators of water shall
furnish information on water use.
Art. 22. Between two or more appropriation of water from the same
sources of supply, priority in time of appropriation shall give the better right,
except that in times of emergency, the use of water for domestic and municipal
purposes shall have a better right over all other uses; Provided, That where
water shortage is recurrent and the appropriator for municipal use has a lower
priority in time of appropriation, then it shall be his duty to find an alternative
source of supply in accordance with conditions prescribed by the Council.
Art. 23. Priorities may be altered on grounds of greater beneficial use,
multi-purpose use, and other similar grounds after due notice and hearing,
subject to payment of compensation in proper cases.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 363
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suffers thereby shall be duly compensated by the entity or person in whose
favor the cancellation was made.
CHAPTER IV
UTILIZATION OF WATERS
Art. 31. Preference in the development of water resources shall consider
security of the State, multiple use, beneficial effects, adverse effects and cost
of development.
Art. 32. The utilization of subterranean or ground water shall be
coordinated with that of surface waters such as rivers, streams, springs and
lakes, so that a superior right in one is not adversely affected by an inferior
right in the other.
For this purpose, the Council shall promulgate rules and regulations
and declare the existence of control areas for the coordinated development,
protection, and utilization of subterranean or ground water and surface
waters.
Control area is an area of land where subterranean or ground water
and surface water are so interrelated that withdrawal and use in one similarly
affects the other. The boundary of a control area may be altered from time to
time, as circumstances warrant.
Art. 33. Water contained in open canals, aqueducts or reservoirs of private
persons may be used by any person for domestic purpose or for watering plants
as long as the water withdrawn by manual methods without checking the stream
or damaging the canal, aqueduct or reservoir; Provided, That this right may be
restricted by the owner should it result in loss or injury to him.
Art. 34. A water permittee or appropriator may use any watercourse to
convey water to another point in the watercourse for the purpose stated in
a permit and such water may be diverted or recaptured at that point by said
permittee in the same amount less allowance for normal losses in transit
Art. 35. Works for the storage, diversion, distribution and utilization of
water resources shall contain adequate provision for the prevention and control
of diseases that may be induced or spread by such works when required by the
Council.
Art. 36. When the reuse of waste water is feasible, it shall limited as
much as possible to such uses other than direct human consumption. No
person or agency shall distribute such water for public consumption until it is
demonstrated that such consumption will not adversely affect the health and
safety of the public.
362 PROPERTY
Art. 24. A water right shall be exercised in such a manner that rights of
third persons or of other appropriators are not prejudiced thereby.
Art. 25. A holder of a water permit may demand the establishment of
easements necessary for the construction and maintenance of the works and
facilities needed for the beneficial use of the waters to be appropriated subject
to the requirements of just compensation and to the following conditions:
a. That he is the owner, lessee, mortgage or one having real right over
the land upon which he proposes to use water; and
b. That the proposed easement is the most convenient and the least
onerous to the servient estate.
Easement relating to the appropriation and use of waters may be modified
by agreement of the contracting parties provided the same is not contrary to
law or prejudicial to third persons.
Art. 26. Where water shortage is recurrent, the use of the water pursuant
to a permit may, in the interest of equitable distribution of benefits among legal
appropriators, be reduced after due notice and hearing.
Art. 27. Water users shall bear the diminution of any water supply due to
natural causes or force majeure.
Art. 28. Water permits shall continue to be valid as long as water is
beneficially used; however, it maybe suspended on the grounds of non-
compliance with approved plans and specifications or schedules of water
distribution; use of water for a purpose other than that for which it was granted;
non-payment of water charges, wastage; failure to keep records of water
diversion, when required; and violation of any term or condition of any permit
or of rules and regulations promulgated by the Council.
Temporary permits may be issued for the appropriation and use of water
for short periods under special circumstances.
Art. 29. Water permits may be revoked after due notice and hearing on
grounds of non-use; gross violation of the conditions imposed in the permit;
unauthorized sale of water; willful failure or refusal to comply with rules and
regulations or any lawful order; pollution, public nuisance or acts detrimental
to public health and safety; when the appropriator is found to be disqualified
under the law to exploit and develop natural resources of the Philippines; when,
in the case of irrigation, the land is converted to non-agricultural purposes; and
other similar grounds.
Art. 30. All water permits are subject to modification or cancellation
by the Council, after due notice and hearing, in favor of a project of greater
beneficial use or for multi-purpose development, and a water permittee who
364 PROPERTY
Art. 37. In the construction and operation of hydraulic works, due consid-
eration shall be given to the preservation of scenic places and historical relics
and in addition to the provisions of existing laws, no works that would require
the destruction or removal of such places or relics shall be undertaken without
showing that the destruction or removal is necessary and unavoidable.
Art. 38. Authority for the construction of dams, bridges and other
structures across of which may interfere with the flow of navigable or
floatable waterways shall first be secured from the Ministry of Public Works,
Transportation and Communications [now Department of Public Works and
Highways].
Art. 39. Except in cases of emergency to save life or property, the
construction or repair of the following works shall be undertaken only after
the plans and specifications therefore, as may be required by the Council, are
approved by the proper government agency; dams for the diversion or storage
of water; structures for the use of water power; installations for the utilization
of subterranean or ground water and other structures for utilization of water
resources.
Art. 40. No excavation for the purpose of emission of a hot spring or for
the enlargement of the existing opening thereof shall be made without prior
permit.
Any person or agency who intends to develop a hot spring for human
consumption must first obtain a permit from the Department of Health.
Art. 41. No person shall develop a stream, lake, or spring for recreational
purposes without first securing a permit from the council.
Art. 42. Unless otherwise ordered by the President of the Philippines
and only in times of national calamity or emergency, no person shall induce or
restrain rainfall by any method such as cloud seeding without a permit from the
proper government agency.
Art. 43. No person shall raise or lower the water level of a river, stream,
lake, lagoon or marsh nor drain the same without a permit.
Art. 44. Drainage systems shall be so constructed that their outlets are
rivers, lakes, the sea, natural bodies of water, such other water course as may
be approved by the proper government agency.
Art. 45. When a drainage channel is constructed by a number of persons
for their common benefit, cost of construction and maintenance of the channel
shall be borne by each in proportion to the benefits derived.
Art. 46. When artificial means are employed to drain water from higher
to lower land, the owner of the higher land shall select the routes and methods
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 365
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of drainage that will cause the minimum damage to the lower lands, subject to
the requirements of just compensation.
Art. 47. When the use, conveyance or storage of water results in damage
to another, the person responsible for the damage shall pay compensation.
Art. 48. When a water resources project interferes with the access of
landowner to a portion of his property or with the conveyance of irrigation or
drainage water, the person or agency constructing the project shall bear the cost
of construction and maintenance of the bridges, flumes and other structures
necessary for maintaining access, irrigation, or drainage in addition to paying
compensation for land and incidental damages.
Art. 49. Any person having an easement for an aqueduct may enter
upon the servient land for the purpose of cleaning, repairing or replacing the
aqueduct or the removal of obstructions therefrom.
Art. 50. Lower estates are obliged to receive the waters which naturally
and without the intervention of man flow from the higher estates, as well as the
stones or earth which they carry with them.
The owner of the lower estate can not construct works which will impede
this natural flow, unless he provides an alternative method of drainage; neither
can the owner of the higher estate make works which will increase this natural
flow.
Art. 51. The banks of rivers and streams and the shores of the seas and
lakes throughout their entire length and within a zone of three (3) meters in
urban areas, twenty (20) meters in agricultural areas and forty (40) meters in
forest areas, along their margins, are subject to the easement of public use in the
interest of recreation, navigation, floatage, fishing and salvage. No person shall
be allowed to stay in this zone longer than what is necessary for recreation,
navigation, floatage, fishing or salvage or to build structures of any kind.
Art. 52. The establishment, extent, from, and conditions of easement of
water not expressly determined by the provisions of this Code shall be governed
by the provisions of the Civil Code.
CHAPTER V
CONTROL OF WATERS
Art. 53. To promote the best interest and the coordinated protection
of flood plain lands, the Secretary of Public Works, Transportation and
Communications may declare flood control areas and promulgate guidelines
for governing flood plain management plans in these areas.
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Art. 62. Waters of a stream may be stored in a reservoir by a permittee
in such amount as will not prejudice the right of any permittee downstream.
Whoever operates the reservoir shall, when required, release water for mini-
mum stream flow.
All reservoir operations shall be subject to rules and regulations issued
by the Council or any proper government agency.
Art. 63. The operator of a dam for the storage of water may be required
to employ an engineer possessing qualifications prescribed for the proper
operations, maintenance and administration of the dam.
Art. 64. The Council shall approve the manner, location, depth, and spac-
ing in which borings for subterranean or ground water may be made, determine
the requirements for the registration of every boring or alteration to existing
borings as well as other control measures for the exploitation of subterranean
or ground water resources, and in coordination with the Professional Regula-
tion Commission prescribe the qualifications of those who would drill such
borings.
No person shall drill a well without prior permission from the Council.
Art. 65. Water from one river basin may be transferred to another river
basin only with approval of the Council. In considering any request for such
transfer, the Council shall take into account the full costs of the transfer, the
benefits that would accrue to the basin of origin without the transfer, the benefits
that would accrue to the receiving basin on account of the transfer, alternative
schemes for supplying water to the receiving basin, and other relevant favors.
CHAPTER VI
CONSERVATION AND PROTECTION OF WATERS AND
WATERSHEDS AND RELATED LAND RESOURCES
Art. 66. After due notice and hearing when warranted by circumstances,
minimum stream flows for rivers and streams and minimum water levels
for lakes may be established by the Council under such conditions as may
be necessary for the protection of the environment, control of pollution,
navigation, prevention of salt damage, and general public use.
Art. 67. Any watershed or any area of land adjacent to any surface water
or overlying any ground water may be declared by the Ministry of Natural
Resources as a protected area. Rules and regulations may be promulgated by
such Ministry to prohibit or control such activities by the owners or occupants
thereof within the protected area which may damage or cause the deterioration
of the surface water or ground water or interfere with the investigation, use,
control, protection, management or administration of such waters.
366 PROPERTY
Art. 54. In declared flood control areas, rules and regulations may
be promulgated to prohibit or control activities that may damage or cause
deterioration of lakes and dikes, obstruct the flow of water, change the natural
flow of the river, increase flood losses or aggravate flood problems.
Art. 55. The government may construct necessary flood control
structures in declared flood control areas, and for this purpose it shall have a
legal easement as wide as may be needed along and adjacent to the river bank
and outside the bed or channel of the river.
Art. 56. River beds, sand bars and tidal flats may not be cultivated except
upon prior permission from the Minister of Public Works, Transportation
and Communication and such permission shall not be granted where such
cultivation obstructs the flow of water or increase flood levels so as to cause
damage to other areas.
Art. 57. Any person may erect levees or revetments to protect his
property from flood, encroachment by the river or change in the course of the
river, provided that such constructions does not cause damage to the property
of another.
Art. 58. When a river or stream suddenly changes its course to traverse
private lands, the owners of the affected lands may not compel the government
to restore the river to its former bed; nor can they restrain the government from
taking steps to revert the river or stream to its former course. The owners of the
lands thus affected are not entitled to compensation for any damage sustained
thereby. However, the former owners of the new bed shall be the owners of the
abandoned bed proportion to the area lost by each.
The owners of the affected lands may undertake to return the river or
stream to its old bed at their own expense; Provided, That a permit therefore is
secured from the Minister of Public Works, Transportation and Communication
and work pertaining thereto are commenced within two years from the changes
in the course of the river or stream.
Art. 59. Rivers, lakes and lagoons may, upon the recommendation of the
Philippines Coast Guard, be declared navigable either in whole or in part.
Art. 60. The rafting of logs and other objects on rivers and lakes which
are floatable may be controlled or prohibited during designated season of the
year with due regard to the needs of irrigation and domestic water supply and
other uses of water.
Art. 61. The impounding of water in ponds or reservoirs may be
prohibited by the Council upon consultation with the Department of Health if
it is dangerous to public health, or it may order that such pond or reservoirs be
drained if such is necessary for the protection of public health.
368 PROPERTY
Art. 68. It shall be the duty of any person in control of a well to prevent
the water from flowing on the surface of the land, or into any surface water, or
any porous stratum underneath the surface without being beneficially used.
Art. 69. It shall be the duty of any person in control of a well containing
water with minerals or other substances injurious to man, animals, agriculture,
and vegetation to prevent such waters from flowing on the surface of the land
or into any surface water or into any other aquifer or porous stratum.
Art. 70. No person shall utilize an existing well or pond or spread waters
for recharging subterranean or ground water supplies without prior permission
of the Council.
Art. 71. To promote better water conservation and usage for irrigation
purposes, the merger of irrigation associations and the appropriation of waters
by associations instead of by individuals shall be encouraged.
No water permit shall be granted to an individual when his water
requirement can be supplied through an irrigation association.
Art. 72. In the consideration of a proposed water resource project, due
regard shall be given to ecological changes resulting from the construction of
the project in order to balance the needs of development and the protection of
the environment.
Art. 73. The conservation of fish and wild life shall receive proper
consideration and shall be coordinated with other features of water resources
development programs to insure that fish and wildlife values receive equal
attention with other project purposes.
Art. 74. Swamps and marshes which are owned by the State and which
have a primary value for waterfowl propagation or other wildlife purposes may
be reserved and protected from drainage operations and development.
Art. 75. No person shall, without prior permission from the National
Pollution Control Commission, build any works that may produce dangerous
or noxious substance or perform any act which may result in the introduction
of sewage, industrial waste, or any pollutant into any source of water supply.
Water pollution is the impairment of the quality of water beyond a certain
standard. This standard may vary according to the use of the water and shall be
set by the National Pollution Control Commission.
Art. 76. The establishment of cemeteries and waste disposal areas that
may affect the source of a water supply or a reservoir for domestic or municipal
use shall be subject to the rules and regulations promulgated by the Department
of Health.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 369
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Art. 77. Tailings from mining operations and sediments from placer
mining shall not be dumped into rivers and waterways without prior permission
from the Council upon recommendation by the National Pollution Control
Commission.
Art. 78. The application of agriculture fertilizers and pesticides may be
prohibited or regulated by the National Pollution Control Commission in areas
where such application may cause pollution of a source of water supply.
CHAPTER VII
ADMINISTRATION OF WATERS AND ENFORCEMENT
OF THE PROVISIONS OF THIS CODE
Art. 79. The Administration and enforcement of the provisions of this
Code, including the granting of permits and the imposition of penalties for
administrative violations hereof, are hereby vested in the council, and except
in regard to those functions which under this Code are specifically conferred
upon other agencies of the government, the Council is hereby empowered to
make all decisions and determinations provided for in this Code.
Art. 80. The Council may deputize any official or agency of the
government to perform any of its specific functions or activities.
Art. 81. The Council shall provide a continuing program for data
collection, research and manpower development need for the appropriation,
utilization, exploitation, conservation, and protection of the water resources
of the country.
Art. 82. In the implementation of the provisions of this Code, the Council
shall promulgate the necessary rules and regulations which may provide for
penalties consisting of a fine not exceeding One thousand Pesos (P1,000.00)
and/or suspension or revocation of the water permit or other right to the use of
water. Violations of such rules and regulations may be administratively dealt
with by the Council.
Such rules and regulations shall take effect fifteen (15) days after
publication in newspapers of general circulation.
Rules and regulations prescribed by any government agency that
pertain to the utilization, exploitation, development, control, conservation, or
protection of water resources shall, if the council so requires, be subject to its
approval.
Art. 83. The Council is hereby authorized to impose and collect reasonable
fees or charges for water resources development from water appropriators,
except when it is for purely domestic purpose.
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Waters
when a bond, in an amount fixed by the Council to answer for damages
occasioned by the suspension or stay of execution, shall have been filed by the
appealing party, unless the suspension is by virtue of an order of a competent
court.
All disputes shall be decided within sixty (60) days after the parties
submit the same for decision or resolution.
The Council shall have the power to issue writs of execution and enforce
its decisions with the assistance of local or national police agencies.
Art. 89. The decisions of the Council on water rights controversies may
be appealed to the Court of First Instance of the province where the subject
matter of the controversy is situated within fifteen (15) days from the date
the party appealing receives a copy of the decision, on any of the following
grounds: (1) grave abuse of discretion; (2) question of law; (3) questions of
fact and law.
CHAPTER VIII
PENAL PROVISIONS
Art. 90. The following acts shall be penalized by suspension or revocation
of the violator’s water permit or other right to the use of water and/or a fine
of not exceeding One thousand Pesos (P1,000.00), in the discretion of the
Council:
a. Appropriation of subterranean or ground water for domestic use
by an overlying landowner without registration required by the Council.
b. Non-observance of any standard of beneficial use of water.
c. Failure of the appropriator to keep a record of water withdrawal
when required.
d. Failure to comply with any of the terms or conditions in a water
permit or a water rights grant.
e. Unauthorized use of water for a purpose other than that for which
a right or permit was granted.
f. Construction or repair of any hydraulic work or structure without
duly approved plans and specifications, when required.
g. Failure to install a regulating and measuring device for the control
of the volume of water appropriated, when required.
h. Unauthorized sale, lease, or transfer of water and/or water rights.
i. Failure to provide adequate facilities to prevent or control diseases
370 PROPERTY
Art. 84. The Council and other agencies authorized to enforce this
Code are empowered to enter upon private lands, with previous notice to the
owner, for the purpose of conducting surveys and hydrologic investigations,
and to perform such other acts as are necessary in carrying out their functions
including the power to exercise the right of eminent domain.
Art. 85. No program or project involving the appropriation, utilization,
exploitation, development, control, conservation, or protection of water
resources may be undertaken without prior approval of the Council, except
those which the council may, in its discretion, exempt.
The Council may require consultation with the public prior to the
implementation of certain water resources development projects.
Art. 86. When plans and specifications of a hydraulic structure are
submitted for approval, the government agency whose functions embrace
the type of project for which the structure is intended, shall review the plans
and specifications and recommend to the Council proper action thereon and
the latter shall approve the same only when they are in conformity with the
requirements of this Code and the rules and regulations promulgated by the
Council. Notwithstanding such approval, neither the engineer who drew up
the plans and specifications of the hydraulic structure, nor the constructor who
built it, shall be relieved of his liability for damages in case of failure thereof
by reason of defect in plans and specifications, or failure due to defect in plan
construction, within ten (10) years from the completion of the structure.
Any action to recover such damages must be brought within five (5)
years following such failure.
Art. 87. The Council or its duly authorized representatives, in the exercise
of its power to investigate and decide cases brought to its cognizance, shall
have the power to administer oaths, compel the attendance of witnesses by
subpoena duces tecum.
Non-compliance or violation of such orders or subpoena and subpoena
duces tecum shall be punished in the same manner as indirect contempt of an
inferior court upon application by the aggrieved party with the proper Court
of First Instance in accordance with the provisions of Rule 71 of the Rules of
Court.
Art. 88. The Council shall have original jurisdiction over all disputes
relating to appropriation, utilization, exploitation, development, control, con-
servation and protection of waters within the meaning and context of the provi-
sions of this Code.
The decisions of the Council on water rights controversies shall be
immediately executory and the enforcement thereof may be suspended only
372 PROPERTY
when required by the Council in the construction of any work for the storage,
diversion, distribution and utilization of water.
j. Drilling of a well without permission of the Council.
k. Utilization of an existing well or ponding or spreading of water for
recharging subterranean or ground water supplies without permission of the
Council.
l. Violation of or non-compliance with any order, rules and regulation
of the Council.
m. Illegal taking or diversion of water in an open canal, aqueduct or
reservoir.
n. Malicious destruction of hydraulic works or structures valued at
not exceeding P5,000.00.
Art. 91. A. A fine of not exceeding Three Thousand Pesos (P3,000.00)
or imprisonment for not more that three (3) years, or both such fine and
imprisonment, in the discretion of the Court, shall be imposed upon any person
who commits any of the following acts:
1. Appropriation of water without a water permit, unless such
person is expressly exempted from securing a permit by the provisions
of this code;
2. Unauthorized obstruction of an irrigation canal.
3. Cultivation of river bed, sand bar or tidal flat without per-
mission.
4. Malicious destruction of hydraulic works or structure valued
at not exceeding Twenty-Five Thousand Pesos (P25,000.00).
B. A fine exceeding Three Thousand Pesos (P3,000.00) but not more
than Six Thousand Pesos (P6,000.00) or imprisonment exceeding three (3)
years but not more than six (6) years or both such fine and imprisonment in the
discretion of the Court, shall be imposed on any person who commits any of
the following acts:
1. Distribution for public consumption of water which adversely
affects the health and safety of the public.
2. Excavation or enlargement of the opening of a hot spring
without permission.
3. Unauthorized obstruction of a river or waterway, or occu-
pancy of a river bank or seashore without permission.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 373
SOME SPECIAL PROPERTIES
Waters
4. Establishment of a cemetery or a waste disposal area near a
source of water supply or reservoir for domestic or municipal use without
permission.
5. Constructing, without prior permission of the government
agency concerned, works that produce dangerous or noxious substances,
or performing acts that result in the introduction of sewage, industrial
waste, or any substance that pollutes a source of water supply.
6. Dumping mine tailings and sediments into rivers or water-
ways without permission.
7. Malicious destruction of hydraulic works or structure valued
more than Twenty-five Thousand (P25,000.00) but not exceeding One
Hundred Thousand Pesos (P100,000.00).
C. A fine exceeding Six Thousand Pesos (P6,000.00) but not more
than ten Thousand Pesos (P10,000.00) or imprisonment exceeding six (6)
years but not more than twelve (12) years, or both such fine and imprisonment,
in the discretion of the Court, shall be imposed upon any person who commits
any of the following acts:
1. Misrepresentation of citizenship in order to qualify for water
permit.
2. Malicious destruction of a hydraulic works or structure,
valued at more than One Hundred Thousand Pesos (P100,000.00).
Art. 92. If the offense is committed by a corporation, trust, firm,
partnership, association or any other juridical person, the penalty shall be
imposed upon the President, General Manager, and other guilty officer or
officers of such corporation, trust, firm, partnership, association or entity,
without prejudice to the filing of a civil action against said juridical person. If
the offender is an alien, he shall be deported after serving his sentence, without
further proceedings.
After final judgment of conviction, the Court upon petition of the
prosecution attorney in the same proceedings, and after due hearing, may when
the public interest so requires, order the suspension of or dissolution of such
corporation, trust, firm, partnership association or juridical person.
Art. 93. All actions for offenses punishable under Article 91 of this code
shall be brought before the proper court.
Art. 94. Actions for offenses punishable under this Code by a fine of not
more than Three Thousand pesos (P3,000.00) or by an imprisonment of not
more than three (3) years, or both such fine and imprisonment, shall prescribed
in five (5) years; those punishable by a fine exceeding Three Thousand Pesos
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 375
SOME SPECIAL PROPERTIES
Minerals
Art. 98. Interim rules and regulations promulgated by the Council
shall continue to have binding force and effect, when not in conflict with the
provisions of this Code.
Art. 99. If any provision or part of this Code, or the application thereof
to any person or circumstance, is declared unconstitutional or invalid for any
reason, the other provisions of parts therein shall not be affected.
Art. 100. The following laws, parts and/or provisions of laws are hereby
repealed:
a. The provisions of the Spanish Law of Waters of August 3, 1866,
the Civil Code of Spain of 1889 and the Civil Code of the Philippines (R.A.
No. 386) on ownership of waters, easement relating to waters, use of public
waters which are inconsistent with the provision of the Code;
b. The provisions of R.A. No. 6395, otherwise known as the Revised
Charter of the National Power Corporation, particularly section 3, paragraph
(f), and section 12, so far as they relate to the appropriation of waters and the
grant thereof;
c. The provisions of Act. No. 2152 as amended, otherwise know as
the Irrigation Act, section 3, paragraphs (k) and (m) of P.D. No. 813, R.A. No.
2056; Section 90, C.A. No. 137; and
d. All Decrees, Laws, Acts, parts of Acts, Rules of Court, executive
orders, and administrative regulations which are contrary to or inconsistent
with the provisions of this Code.
Art. 101. This Code shall take effect upon its promulgation.
Done in the City of Manila, this 31st day of December, Nineteen Hundred
and Seventy-Six.
Chapter 2
MINERALS
Art. 519. Mining claims and rights and other matters concerning
minerals and mineral lands are governed by special laws. (427a)
§ 78. Governing Laws
Republic Act No. 7942 or the “Philippine Mining Act of 1995” is
the governing law that regulates mineral resources development in the
country. Section 2 of the said Act provides that “all mineral resources
374 PROPERTY
(P3,000.00) but not more than six thousand Pesos (P6,000.00) or imprisonment
exceeding three (3) years but not more than six years (6) years or both such
fine and imprisonment, shall prescribe in seven (7) years; and those punishable
by a fine exceeding Six Thousand Pesos (P6,000.00) but not more than Ten
Thousand Pesos (P10,000.00) or an imprisonment exceeding six (6) years but
not more than Twelve (12) years, or both such fine and imprisonment, shall
prescribe in ten (10) years.
CHAPTER IX
TRANSITORY AND FINAL PROVISIONS
Art. 95. Within two (2) years from the promulgation of this code, all
claims for a right to use water existing on or before December 31, 1974 shall be
registered with the Council which shall confirm said rights in accordance with
the provisions of this Code, and shall set their respective priorities.
When priority in time of appropriation from a certain source of supply
cannot be determined, the order of preference in the use of the waters shall be
as follows:
a. Domestic and municipal use;
b. Irrigation;
c. Power generation;
d. Fisheries;
e. Livestock raising;
f. Industrial use; and
g. Other uses.
Any claim not registered within said period shall be considered waived
and the use of the water deemed abandoned, and the water shall thereupon
be available for disposition as unappropriated waters in accordance with the
provisions of this code.
Art. 96. No vested or acquired right to the use of water can arise from
acts or omissions which are against the law or which infringe upon the rights
of others.
Art. 97. Acts and contracts under the regime of old laws, if they are
valid in accordance therewith, shall be respected, subject to the limitations
established in this Code. Any modification or extension of these acts and
contracts after the promulgation of this code, shall be subject to the provisions
hereof.
376 PROPERTY
in public and private lands within the territory and exclusive economic
zone of the Republic of the Philippines are owned by the State.”
Small-scale mining activities, however, are governed by Republic
Act No. 7076, otherwise known as the “People’s Small-Scale Mining
Act of 1991.”
Chapter 3
TRADEMARKS AND TRADE NAMES
Art. 520. A trademark or trade name duly registered in the proper
government bureau or office is owned by and pertains to the person, cor-
poration, or firm registering the same, subject to the provisions of special
laws. (n)
Art. 521. The goodwill of a business is property, and may be trans-
ferred together with the right to use the name under which the business
is conducted. (n)
Art. 522. Trademarks and trade names are governed by special laws.
(n)
§ 79. Governing Laws
The law on trademarks, service marks and trade names are governed
by Sections 121 up to 170 of Republic Act No. 8293, otherwise known
as the “Intellectual Property Code of the Philippines,” which took
effect on January 1, 1998.
— oOo —
 377
Title V. POSSESSION
Chapter 1
POSSESSION AND THE KINDS THEREOF
Art. 523. Possession is the holding of a thing or the enjoyment of a
right. (430a)
§ 80. Concept of Possession
[80.1] Definition
Etymologically, the word possession is derived from the Latin
terms pos and sedere which mean “to settle or to be settled.”1 In the
grammatical sense, to possess means to have, to actually and physically
occupy a thing, with or without right.2 In our Civil Code, however,
possession is defined as “the holding of a thing or the enjoyment of a
right.”3 From this definition, it is clear that the concept of possession
extends to both corporeal and incorporeal things — the former being
represented by the term “thing” and the latter by the term “right” in
Article 523 of the New Civil Code. This is further confirmed by Article
530 of the New Civil Code which includes as object of possession
not only things but also rights which are susceptible of appropriation.
But note that in Articles 523 and 530, the term “thing” is used in its
restrictive sense — referring only to corporeal or material objects but
not to rights. Pursuant to Article 523, therefore, possession is defined as
“the holding of a thing” in relation to corporeal objects. With respect
to rights, however, possession refers to its enjoyment or exercise since
the idea of occupation or detention does not apply with respect to rights.
The term “holding” in Article 523, however, must be viewed in relation
1 Yu v. Pacleb, supra, citing II Tolentino, Civil Code, 1992 ed., 239.
2 Castan, 9th ed., 401.
2 People v. Lian, G.R. No. 115988, March 29, 1996.
Yu v. Pacleb, G.R. No. 130316, Jan. 24, 2007, citing II Tolentino, Civil Code, 1992 ed.,
238.
3 People v. Burton, G.R. No. 114396, February 19, 1997.
Art. 523, NCC.
377
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 379
POSSESSION
Possession and the Kinds Thereof
that the said drug is a regulated drug.11 This crime is mala prohibita,
and, as such, criminal intent is not an essential element. However,
the prosecution must prove that the accused had the intent to possess
(animus possidendi) the drugs.12 Possession, under the law, includes
not only actual possession, but also constructive possession. Actual
possession exists when the drug is in the immediate physical possession
or control of the accused.13 On the other hand, constructive possession
exists when the drug is under the dominion and control of the accused
or when he has the right to exercise dominion and control over the place
where it is found.14 Hence, the prosecution must prove that the accused
had knowledge of the existence and presence of the drug in the place
under his control and dominion and the character of the drug.15 Since
knowledge by the accused of the existence and character of the drugs
in the place where he exercises dominion and control is an internal act,
the same may be presumed from the fact that the dangerous drug is in
the house or place over which the accused has control or dominion, or
within such premises in the absence of any satisfactory explanation.16
The burden of evidence is then shifted to the accused to explain the
absence of knowledge or animus possidendi.17 In the case of People
v. Tira,18 the conviction of the appellant Connie Tira for the crime of
possession of regulated drugs was sustained by the Supreme Court
because the appellant failed to prove the absence of animus possidendi.
The Court, in the said case, explained —
“In this case, the prohibited and regulated drugs were
found under the bed in the inner room of the house of the
appellants where they also resided. The appellants had actual
and exclusive possession and control and dominion over the
house, including the room where the drugs were found by
the policemen. The appellant Connie Tira cannot escape
criminal liability for the crime charged simply and merely on
11
People v. Tira, 430 SCRA 134 (2004).
12
Id.
13
Id.
14
Id.
15
Id.
16
Id.
17
People of the Phil. v. Jinsir Jhur, CA-GR. No. 22842, Nov. 23, 2005, citing People v. Tira,
430 SCRA 134.
18
Supra.
378 PROPERTY
to Article 531, such that the concept does not refer only to material
occupation but likewise to the fact that the thing is subjected to the
action of our will. Such being the case, it is apparent that the concept
of possession implies a relation of power or control over the object of
possession and its possessor, whether said object be things or rights.
Hence, according to Castan,4 the concept of possession connotes the
following: (1) it implies a relation between a person and things; (2) such
relation is one of power or control; and (3) such control is one of fact
which is effective but without resolving whether it carries with it or not
a title of ownership.
[80.2] Elements of Possession
In order that there be possession two things are paramount: (1)
there must be occupancy, apprehension or taking; and (2) there must be
intent to possess (animus possidendi).5 Animus possidendi, it has been
held, is a state of mind, the presence and determination of which is
largely dependent on the circumstances obtaining in each case.6 What
the courts must take into consideration are the prior and coetaneous acts
of the alleged possessor.7 Its existence may and usually must be inferred
from the attendant events in each particular case.8 According to Manresa,9
this intention to possess is usually inferred from the fact that the thing in
question is under the apparent control and power of the possessor. Such
being the case, the animus possidendi may be contradicted and rebutted
by evidence which tends to prove that the person under whose power or
control the thing in question appears to be, does not in fact exercise the
power or control and does not intend to do so.10
In the crime of possession of regulated drugs, for example,
the essential elements are the following: (a) the accused is found in
possession of a regulated drug; (b) the person is not authorized by law
or by duly constituted authorities; and, (c) the accused has knowledge
4
2 Castan, 9th ed., 401-402.
5
6
7
Id.
8
9
4 Manresa, 5th ed., 64.
10
US v. Tan Tayco, 12 Phil. 739; see also Footnote 17 in Yu v. Pacleb, supra, citing II To-
lentino, Civil Code, 1992 ed., 239.
380 PROPERTY
her barefaced testimony that she was a plain housewife, had
no involvement in the criminal actuations of her husband,
and had no knowledge of the existence of the drugs in the
inner room of the house. She had full access to the room,
including the space under the bed. She failed to adduce any
credible evidence that she was prohibited by her husband,
the appellant Amadeo Tira, from entering the room, cleaning
it, or even sleeping on the bed. x x x”
In the case of US v. Tan Tayco,19 however, the defendants were
able to prove the absence of animus possidendi with respect to various
utensils used for smoking opium which were found in their store. They
claimed that said utensils were the property of one of the co-proprietors
of the store. Said co-proprietor admitted that he was the real owner of
the utensils and said that the defendants had no interest whatever in the
ownership or control of the smoking utensils.
[80.3] Possession as Fact and Right
The subject of possession has become more difficult owing to the
various senses in which the term has been interpreted. Thus, it has been
said to be either a right or a fact conferring a right, or both together. The
latter is the view of Freidrich Carl Von Savigny,20 the leading authority
upon the subject. According to Savigny, in its inception, possession is
considered as a fact which gives rise to certain juridical consequences
attached to it by law, that confers upon it the character of a right.21
And inasmuch as possession implies an immediate and direct relation
between the person and the thing, it is considered as a real right but of
a particular nature since the law renders its protection temporarily only
as long as the true owner does not appear.22
As discussed in supra § 34.1, possession is either a mere incident
of ownership (a right included therein), to which commentators referred
to as the “right to possession” or jus possidendi, or a right independent
and apart from ownership, referred to as the “right of possession” or
19
12 Phil. 739.
20
See Von Savigny’s Treatise on Possession; or the Jus Possessionis of the Civil Law, Sixth
Edition. Translated from the German by Sir Erskine Perry.
21
See also II Reyes and Puno, Outline of Phil. Civil Law, 90-91.
22
II Caguioa, Civil Code, 1966 ed., 163-164.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 381
POSSESSION
Possession and the Kinds Thereof
jus possessionis. Since the possession discussed in Title V of Book II
is independent from ownership and not necessarily based therefrom,
this part of the Civil Code is dealing with jus possessionis. It is this
kind of possession which is to be considered as a real right by itself and
independent from ownership.
[80.4] Degrees of Possession
According to Sanchez Roman, the degrees of possession may be
classified as follows:
(1) Possession without any title or right whatsoever, as that of a
thief;
(2) Possession with a juridical title or right but not in the concept
of owner, as that of a lessee or depositary;
(3) Possession with a just title, or a title sufficient to transfer
ownership, but not from the true owner, as that of a buyer in
good faith; and
(4) Possession derived from the right of ownership or possession
with a just title from the true owner. This is the possession
that springs from ownership.23
[80.5] Classification of Possession under the Civil Code
The Civil Code classifies possession, as follows:
(1) Possession in one’s own name and possession in the name of
another;24
(2) Possession in the concept of an owner and possession in the
concept of a holder;25 and
(3) Possession in good faith and possession in bad faith.26
Art. 524. Possession may be exercised in one’s own name or in that
of another. (413a)
23
3 Sanchez Roman, 405-406.
24
Art. 524, NCC.
25
Art. 525, NCC.
26
Art. 526, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 383
POSSESSION
Possession and the Kinds Thereof
in the property, for which reason, a new title was issued in the name of the
respondent for the entire property. It turned out that petitioner was prevailed
upon by the respondent to transfer the title to the whole property in favor of the
latter in order to obtain a loan from the GSIS pursuant to an agreement with
respondent that they would construct an apartment on the property through the
proceeds of an additional loan that respondent would secure from the GSIS
with the entire 300-square meter property as collateral, which additional loan,
however, did not materialize. In the meantime, the house situated on the lot
subject matter of the second sale was being leased out by the petitioner to the
Spouses Palacios since 1967. In 1984, petitioner allegedly refused to receive
the rentals thus prompting the Palacios spouses to file in 1985 a petition for
consignation, which resulted in a compromise agreement between the parties
within two months after its filing. It appears however that the Palacios spouses
were subsequently ejected from the premises but managed somehow to return.
When a contempt case was filed by petitioner against her lessees, respondent
intervened and claimed ownership of the property. Respondent likewise
claimed of the existence of a lease contract between her and the Palacios
spouses supposedly dated 17 March 1987 but retroactive to 1 January 1987. In
1987, the trial court dismissed the case and from then on, the Palacioses paid
rentals to respondent, prompting the petitioner to file in 1987 a case against the
respondent for the cancellation of the latter’s title to the property on the ground
that the deed of sale between them were merely simulated. The trial court ruled
in favor of the petitioner on the ground that the deeds of sale between the parties
were merely simulated, hence, void. On appeal, the Court of Appeals reversed
the decision and ruled in favor of the respondent based on the grounds, among
others, that: (1) petitioner’s cause of action had prescribed since the complaint
should have been filed either within ten (10) years from 1969 as an action to
recover title to real property, or within ten (10) years from 1970 as an action
based on a written contract; and (2) petitioner’s cause of action was barred by
laches having allowed respondent to stay in possession of the lot in question
for eighteen (18) years after the execution of the second deed of sale. Petitioner
elevated the case to the Supreme Court, which ruled in her favor, thus —
“Petitioner posits that it was only in 1987 — when respondent
intervened in the contempt case alleging to be the owner and lessor
— did her cause of action accrue; hence, her complaint filed on
23 August 1987 has not yet prescribed. Petitioner asserts that the
10 January 1970 agreement is more credible and probable than
the second deed of sale because such document contains their real
intention.
In Heirs of Jose Olviga v. Court of Appeals, we restated the
rule that an action for reconveyance of a parcel of land based on
implied or constructive trust prescribes in ten (10) years, the point
382 PROPERTY
§ 81. Possession in One’s Own Name or In the Name of Another
The extent and meaning of the phrase “possession in one’s own
name” depend largely upon the meaning of the phrase “possession in
the name of another” for there is variance of views with respect to the
extent and meaning of the latter. There are commentators27 who are of
the view that the possession in another’s name referred to in this article
contemplates of a situation where the possessor is bound by some
obligation or legal tie to another, such as an agent, an administrator,
a lessee or a borrower in commodatum.28 Under this view, the article
is not limited to cases which are strictly of direct representation, or in
which the representative does not have a possession in his own right
but merely that of the person represented.29 Following this view, the
concept of “possession in another’s name” will embrace both of these
two situations: (1) possession strictly as an agent of the one entitled to
the possession there being no right whatsoever in the one exercising
it, he being merely the instrument for the exercise of the possession;
and (2) possession with a right belonging to the person exercising
the possession in the name of another of which right that person is in
possession thereby implying a juridical relation between them, e.g.,
possession by a lessee or a mere usufructuary.
Our Supreme Court, in the case of Reyes v. Court of Appeals,30
appears to have adopted the foregoing view.
Reyes v. Court of Appeals
G.R. No. 127608, September 30, 1999
In this case, the petitioner (Guadalupe Reyes) was the owner of a parcel
of land located in Project 4, Quezon City. In 1967, petitioner executed a deed
of sale over one-half of the parcel land in favor of the respondent (Juanita
Raymundo). Consequently, a new title was issued in the names of both the
petitioner and the respondent as co-owners. Thereafter respondent was
granted a P17,000.00 loan by the GSIS, where she was employed, with her
one-half (1/2) share of the property as collateral. In 1969, petitioner executed
another deed of sale in favor of the respondent over her remaining interest
27
Valverde and De Diego, for example.
28
II Tolentino, Civil Code, 1992 ed., 244.
29
Id.
30
Reyes v. Court of Appeals, G.R. No. 127608, Sept. 30, 1999.
384 PROPERTY
of reference being the date of registration of the deed or the date of
the issuance of the certificate of title over the property. However,
we emphasized that this rule applies only when the plaintiff or the
person enforcing the trust is not in possession of the property since
if a person claiming to be the owner thereof is in actual possession
of the property the right to seek reconveyance, which in effect
seeks to quiet title to the property, does not prescribe. The reason is
that the one who is in actual possession of a piece of land claiming
to be the owner thereof may wait until his possession is disturbed
or his title is attacked before taking steps to vindicate his right. His
undisturbed possession gives him a continuing right to seek the
aid of a court of equity to ascertain and determine the nature of the
adverse claim of a third party and its effect on his own title, which
right can be claimed only by one who is in possession.
Actual possession of land consists in the manifestation of
acts of dominion over it of such a nature as those a party would
naturally exercise over his own property. It is not necessary that
the owner of a parcel of land should himself occupy the property
as someone in his name may perform the act. In other words,
the owner of real estate has possession, either when he himself
is physically in occupation of the property, or when another
person who recognizes his rights as owner is in such occupancy.
This declaration is conformably with Art. 524 of the Civil Code
providing that possession may be exercised in one’s own name or
in the name of another.
An example of actual possession of real property by an
owner through another is a lease agreement whereby the lessor
transfers merely the temporary use and enjoyment of the thing
leased. The Palacios spouses have been the lessees of petitioner
since 1967 occupying the house erected on the property subject of
the second sale. Petitioner was in actual possession of the property
through the Palacioses and remained so even after the execution of
the second deed of sale. It was only in 1987 — when respondent
asserted ownership over the property and showed a lease contract
between her and the Palacioses dated 17 March 1987 but effective
1 January 1987 — that petitioner’s possession was disturbed.
Consequently, the action for reconveyance filed on 23 August 1987
based on circumstances obtaining herein and contrary to the finding
of respondent court has not prescribed. To be accurate, the action
does not prescribe. Under Art. 1144, par. (1), of the Civil Code,
an action upon a written contract must be brought within ten (10)
years from the time the right of action accrues. And so respondent
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
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Possession and the Kinds Thereof
court also relied on this provision in ruling that petitioner’s cause
of action had prescribed. This is error. What is applicable is Art.
1410 of the same Code which explicitly states that the action or
defense for the declaration of the inexistence of a contract, such as
the second deed of sale, does not prescribe.
Respondent court declared petitioner guilty of laches an-
chored on the finding that for eighteen (18) years after the exe-
cution of the contract, respondent was in possession of the lot in
question. But this finding is utterly unsupported by the evidence.
On the contrary, the Palacioses alleged in their petition for consig-
nation filed 13 March 1985 that they were ‘renting the apartment
of the respondent (petitioner herein) located at No. 4-F Calderon
Street, Project 4, Quezon City, since 1967 up to the present.’ Even
respondent herself admitted in her lease contract of 17 March 1987
with the Palacios spouses that ‘the LESSEES have been staying in
the premises since 1967 under a previous lease contract with Gua-
dalupe S. Reyes which, however, already expired.’ Having thus
corrected the finding of respondent court, our concern now is to
determine whether laches should be appreciated against petitioner.
The essence of laches is the failure or neglect for an unreasonable
and unexplained length of time to do that which, by exercising
due diligence, could or should have been done earlier; it is the
negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it either
has abandoned it or declined to assert it.”
Note, however, that it in the above case it is no longer necessary
for the Court to dwell on the provisions of Article 524 of the New Civil
Code in order to resolve the question of prescription of the action filed
by the petitioner. The Court’s ruling that such action was imprescriptible
pursuant to Article 1410 of the New Civil Code would have been
sufficient since there was a finding that the deeds of sale executed by
the petitioner in favor of the respondent were merely simulated. Since
there was a finding that the sale of the entire property in favor of the
respondent was a nullity, the action filed by the petitioner may only be
defeated if the latter was guilty of laches. But as the Court has shown,
the petitioner was not guilty of laches because even the respondent
herself admitted the existence of the contract of lease between the
Palacio spouses and the petitioner from 1967 up to 1987. It was only
in 1987 that the petitioner was apprised of the fact that respondent was
asserting an interest adverse to the petitioner. All told, this case could
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Possession and the Kinds Thereof
Philippine government and administered by the National Abaca and Other Fibers
Corporation, and thereafter by the respondent Board of Liquidators (BOL).
In 1970, Reynaldo Manalili, predecessor-in-interest of respondent Ronald C.
Manalili, filed with the BOL an application to purchase the subject property,
attaching therewith his Occupant’s Affidavit. The application was favorably
acted upon and in 1972 Manalili paid the down payment. Thereafter, Manalili
declared the land for taxation purposes. The Manalilis administered the land
before they left for Manila in 1972. After they moved to Manila, they appointed
an administrator to oversee the land and the improvements and crops they have
planted thereon, such as bananas and coconut trees. 1981, after the lapse of
nine (9) years and even as the BOL had already issued a Certification of Full
Payment endorsing the approval of the sale of the land in question to applicant
Reynaldo Manalili, petitioner Rodolfo Santos filed a protest before the BOL
and requested for an investigation. He claimed to be the actual occupant of the
property and that he introduced considerable improvements thereon, as against
respondent Manalili who was never in possession, occupation and cultivation
of the same. In ruling for the respondent Manalili, the Court explained —
“The two (2) courts below, in unanimously upholding the
validity of the sale of the land in question to the Manalilis, likewise
affirmed the BOL’s finding that the Manalilis had a better right
of possession thereto. Preponderant evidence of respondent have
sufficiently established that as early as 1970, Reynaldo Manalili,
respondents’ predecessor-in-interest, had already filed an Affidavit
of Occupancy with the BOL, the government agency tasked
to administer it; that the Manalilis administered the land before
they left for Manila in 1972; that after they moved to Manila they
appointed an administrator to oversee the land and the improvements
and crops they have planted thereon, such as bananas and coconut
trees; and that the Manalilis have been paying the real estate taxes
for the subject land even before the sale thereof to them.
The circumstance that after the sale, the Manalilis resided
in Manila and Pangasinan is of no moment. As it is, possession
may be exercised in one’s own name or in that of another. It is not
necessary that the owner or holder of the thing exercise personally
the rights of possession. Rights of possession may be exercised
through agents.
In contrast, petitioner’s claim of having bought the land from
a certain Ernesto Abalahin who, in turn, bought it from one Col.
Agsalud, allegedly a guerrilla veteran who occupied the lot from
1956 to 1959, is without basis. For one, no proof has been presented
by petitioner as to the alleged title of Col. Agsalud or the transfer
385 386 PROPERTY
be resolved without need of relying on the provisions of Article 524 of
the New Civil Code and the case of Heirs of Jose Olviga v. Court of
Appeals.31
If the concept of “possession in another’s name” is to be under-
stood in the light of the foregoing view, then the possession in one’s
own name being referred to in Article 524 shall now be limited only to
the kind of possession being exercised by the owner himself personally.
If such will be the case, then there will no difference at all between
“possession in the concept of owner” under Article 525 and possession
in one’s own name” in the present article. Hence, in order to avoid du-
plication it is more logical to view “possession in another’s name” in
Article 524 as referring only to the possession by a person without any
right of his own and one which is strictly of an agent or merely an instru-
ment in the exercise of such possession, e.g., possession by a caretaker.
On the other hand, possession in one’s own name embraces all kinds of
possession anchored on a juridical title or right, e.g., possession by the
owner himself, possession by a lessee or a mere usufructuary. If both
the fact of possession and the right to such possession are found in the
same person, such possession is said to be exercised in one’s own name.
If, on the other hand, the right to the possession is in one person while
the fact of possession is in another person and the latter merely acts in
representation of the former, the latter’s possession is said to be exer-
cised in another’s name. In this case, the actual possessor (the agent) is
not considered in law as legal possessor because the possession is not
by virtue of his own right.
As it is, possession may be exercised in one’s own name or in
that of another. It is not necessary that the owner or holder of the thing
exercise personally the rights of possession. Rights of possession may
be exercised through agents.32
Santos v. Manalili
475 SCRA 679 (2005)
The subject matter of this case is a parcel of land which originally formed
part of the “Furukawa Plantation” owned by a Japanese national and situated in
the District of Toril, Davao City. After the war, the land was turned over to the
31
227 SCRA 330.
32
Santos v. Manalili, 475 SCRA 679 (2005).
387 388 PROPERTY
of any rights from the latter to Ernesto Abalahin, petitioner’s
alleged immediate transferor. For another, the supposed Deed of
Absolute Sale between petitioner and Ernesto Abalahin does not
even sufficiently identify the lot which was the subject of the sale.
Worse, that same deed is not notarized and is unregistered. A sale
of a piece of land appearing in a private deed cannot be considered
binding on third persons if it is not embodied in a public instrument
and recorded in the Registry of Deeds. Verily, it was only in 1981
that Abalahin entered the subject land without permission, and
that in 1982, petitioner, together with Abalahin and one Lumaad,
illegally cut trees on the land, thereby prompting the Manalilis to
report their unlawful entry to the local barrio captain.”
Art. 525. The possession of things or rights may be had in one of
two concepts: either in the concept of owner, or in that of the holder of
the thing or right to keep or enjoy it, the ownership pertaining to another
person. (432)
§ 82. Possession in the Concept of Owner or Holder
Possession may be had in one of two ways: possession in the concept
of an owner and possession of a holder.33 A possessor in the concept of
an owner may be the owner himself or one who claims to be so.34 On
the other hand, one who possesses as a mere holder acknowledges in
another a superior right which he believes to be ownership, whether his
belief be right or wrong.35
Note, however, that possession in the concept of owner does not
refer to the belief of the possessor or his intention but such a concept
is independent of the belief or intention of the possessor.36 Concept is
opinion — not of the possessor but that of others. The concept of owner,
therefore, refers to the opinion or belief of the neighbors and the rest of
the world and not that of the possessor.37
Consequently, even if the possessor is aware that that there is a
flaw in his title resulting in its invalidation (in which case he becomes a
33
Art. 525, NCC.
34
Carlos v. Republic of the Phil., 468 SCRA 709 (2005).
35
Id.
36
II Caguioa, Civil Code, 1966 ed., 167.
37
4 Manresa, 5th ed., 82-83, cited in II Caguioa, Civil Code, 1966 ed., 169.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 389
POSSESSION
Possession and the Kinds Thereof
possessor in bad faith), so long as he claims ownership of the property
and does not acknowledge in another a superior right, he is nonetheless
considered a possessor in the concept of owner. Indeed, “possession in
the concept of owner” is distinguished from “possession in good faith.”
Under the law on acquisitive prescription, for example, which requires
as an essential element possession in the concept of owner,38 even a
possessor in bad faith is entitled to acquire ownership of a property by
virtue of extraordinary prescription.39
In the case of possessors in the concept of holder who are as such
by virtue of a juridical title or right, e.g., lessee, usufructuary, etc., they
are considered as possessors in the concept of holder with respect to the
thing itself, but considered as possessors in the concept of owner with
respect to their right.
Bukidnon Doctors’ Hospital, Inc. v. MBTC
G.R. No. 161882, July 8, 2005
In this case, petitioner (Bukidnon Doctors’ Hospital, Inc.) was a
mortgagor of respondent (MBTC). Upon petitioner’s failure to pay the mortgage
obligation, respondent foreclosed the mortgage and acquired the property
during the public auction. Petitioner likewise failed to redeem the foreclosed
property from the respondent within the redemption period. Subsequently,
however, the parties entered into a lease agreement to enable the petitioner to
continue its operation. After almost two years after said agreement, respondent
demanded that the petitioner vacate the leased premises. When the petitioner
refused, respondent initiated an ex parte proceeding for the issuance of a writ
of possession. The issue in this case is the propriety of the issuance of a writ
of possession for the purpose of evicting a mortgagor who became a lessee of
the mortgaged properties after the mortgagee acquired ownership thereof. The
Court held —
“The law and jurisprudence are clear that in extrajudicial
foreclosure proceedings, an order for a writ of possession issues
as a matter of course, upon proper motion, after the expiration of
the redemption period without the mortgagor exercising the right
of redemption, or even during the redemption period provided
a bond is posted to indemnify the debtor in case the foreclosure
sale is shown to have been conducted without complying with
38
See Arts. 540 and 1118, NCC.
39
See Arts. 1132, 2nd par. and 1137, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 391
POSSESSION
Possession and the Kinds Thereof
the petitioner was a legitimate possessor of the subject properties
under Article 525 of the Civil Code. Thus, it could not be deprived
of its lawful possession by a mere ex parte motion for a writ of
possession.
xxx
In a nutshell, where a lease agreement, whether express or
implied, is subsequently entered into by the mortgagor and the
mortgagee after the expiration of the redemption period and the
consolidation of title in the name of the latter, a case for ejectment
or unlawful detainer, not a motion for a writ of possession, is the
proper remedy in order to evict from the questioned premises a
mortgagor-turned-lessee. The rationale for this rule is that a new
relationship between the parties has been created. What applies is
no longer the law on extrajudicial foreclosure, but the law on lease.
And when an issue arises, as in the case at bar, regarding the right
of the lessee to continue occupying the leased premises, the rights
of the parties must be heard and resolved in a case for ejectment or
unlawful detainer under Rule 70 of the Rules of Court.”
Carlos v. Republic of the Philippines
468 SCRA 709 (2005)
In this case, petitioner (Maria Carlos) filed an application for registration
and confirmation of title over a parcel of land with an area of 3,975 square
meters located at Pusawan, Ususan, Taguig, Metro Manila. She claimed that
she is the owner of said parcel of land which she openly, exclusively and
notoriously possessed and occupied since July 12, 1945 or earlier under a bona
fide claim of ownership and that by tacking her possession with that of her
predecessors-in-interest, she has been in possession of the land for more than
50 years. The trial court granted her application. On appeal by the Republic
of the Philippines to the Court of Appeals, the appellate court reversed the
decision on the ground that the applicant at the time she filed her application
for registration of title was no longer in possession and occupation of the
land in question, the same already being sold by the applicant’s mother to
Ususan Development Corporation. Hence, the Court of Appeals concluded
that the requirements for confirmation of imperfect title, one of which is that
the applicant must be in possession in the concept of owner, have not been
complied with. In sustaining the decision of the Court of Appeals, the Supreme
Court held —
“Nonetheless, even if it were true that it was petitioner who
had actual possession of the land at that time, such possession was
no longer in the concept of an owner. Possession may be had in one
390 PROPERTY
the requirements of the law or without the debtor violating the
mortgage contract. The rationale for the ministerial issuance of a
writ of possession is to put the foreclosure buyer in possession of
the property sold without delay, since the right to possession is
founded on ownership of the property.
However, in the instant case, a writ of possession was not the
correct remedy for the purpose of ousting the petitioner from the
subject premises. It must be noted that possession is the holding of
a thing or the enjoyment of a right. It is acquired by the material
occupation of a thing or the exercise of a right, or by the fact that a
thing or right is subject to the action of one’s will, or by the proper
acts and legal formalities established for acquiring such right. ‘By
material occupation of a thing,’ it is not necessary that the person in
possession should be the occupant of the property; the occupancy
can be held by another in his name. Thus Articles 524 and 525 of
the Civil Code provide:
Art. 524. Possession may be exercised in one’s own name or
in that of another.
Art. 525. The possession of things or rights may be had in
one of two concepts: either in the concept of owner, or in that of
the holder of the thing or right to keep or enjoy it, the ownership
pertaining to another person.
In other words, an owner of a real estate has possession,
either when he himself is physically occupying the property,
or when another person who recognizes his rights as owner is
occupying it.
In the case at bar, it is not disputed that after the foreclosure
of the property in question and the issuance of new certificates of
title in favor of the respondent, the petitioner and the respondent
entered into a contract of lease of the subject properties. This new
contractual relation presupposed that the petitioner recognized that
possession of the properties had been legally placed in the hands
of the respondent, and that the latter had taken such possession but
delivered it to the former as lessee of the property. By paying the
monthly rentals, the petitioner also recognized the superior right of
the respondent to the possession of the property as owner thereof.
And by accepting the monthly rentals, the respondent enjoyed
the fruits of its possession over the subject property. Clearly,
the respondent is in material possession of the subject premises.
Thus, the trial court’s issuance of a writ of possession is not only
superfluous, but improper under the law. Moreover, as a lessee,
392 PROPERTY
of two ways: possession in the concept of an owner and possession
of a holder. A possessor in the concept of an owner may be the
owner himself or one who claims to be so. On the other hand,
one who possesses as a mere holder acknowledges in another a
superior right which he believes to be ownership, whether his
belief be right or wrong. Petitioner herein acknowledges the sale
of the property to Ususan Development Corporation in 1996 and
in fact promised to deliver the certificate of title to the corporation
upon its obtention. Hence, it cannot be said that her possession
since 1996 was under a bona fide claim of ownership. Under the
law, only he who possesses the property under a bona fide claim of
ownership is entitled to confirmation of title.”
Art. 526. He is deemed a possessor in good faith who is not aware
that there exists in his title or mode of acquisition any flaw which invali-
dates it.
He is deemed a possessor in bad faith who possesses in any case
contrary to the foregoing.
Mistake upon a doubtful or difficult question of law may be the basis
of good faith. (433a)
Art. 527. Good faith is always presumed, and upon him who alleges
bad faith on the part of a possessor rests the burden of proof. (434)
Art. 528. Possession acquired in good faith does not lose this char-
acter except in the case and from the moment facts exist which show that
the possessor is not unaware that he possesses the thing improperly or
wrongfully. (435a)
Art. 529. It is presumed that possession continues to be enjoyed in
the same character in which it was acquired, until the contrary is proved.
(436)
§ 83. Possession in Good Faith or in Bad Faith
[83.1] Concept of Possessor In Good Faith; In Bad Faith
Note that the discussions in supra § 47.1 in relation to the concept
of builder in good faith likewise apply to the concept of possessor in
good faith because the former is simply a possessor in good faith who
made plantings, constructions or works on the property of another.
Good faith, here understood, is an intangible and abstract quality
with no technical meaning or statutory definition, and it encompasses,
among other things, an honest belief, the absence of malice and the
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 393
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Possession and the Kinds Thereof
absence of design to defraud or to seek an unconscionable advantage.
An individual’s personal good faith is a concept of his own mind and,
therefore, may not conclusively be determined by his protestations
alone. It implies honesty of intention, and freedom from knowledge of
circumstances which ought to put the holder upon inquiry. The essence
of good faith lies in an honest belief in the validity of one’s right,
ignorance of a superior claim, and absence of intention to overreach
another. Applied to possession, one is considered in good faith if he is
not aware that there exists in his title or mode of acquisition any flaw
which invalidates it.40
Under Article 526 of the New Civil Code, the following are the
requisites for possession in good faith: (1) the possessor has a title or
mode of acquisition; (2) there is a flaw or defect in said title or mode
which invalidates it; and (3) the possessor is unaware of the flaw or
defect, or believes that the thing belongs to him.
[83.1.1] He Must Have a Title or Mode of Acquisition
The belief of the possessor that he is the legal owner of the thing
must be based upon some title or mode of acquisition, such as a sale,
donation, inheritance, or other means of transmitting ownership;
for without this, there can be no real well-grounded belief of one’s
ownership.41 Hence, a person who has no title or mode of acquisition
but whose occupation of the land of another is by reason of the latter’s
tolerance or permission cannot be considered a possessor or builder in
good faith.42 At the same time, the good faith of the possessor must rest
on a colorable right and must be beyond a mere stubborn belief in one’s
title despite judicial adjudication.43
In relation to builder in good faith, good faith is ordinarily identified
by the belief that the land is owned; or that — by some title — one
has the right to build, plant, or sow thereon.44 As discussed, however,
in supra § 47.1.4, there were some special cases where the Supreme
40
PNB v. De Jesus, G.R. No. 149295, September 23, 2003; see also Cabal v. Cabal, G.R.
No. 153625, July 31, 2006; Ochoa v. Apeta, G.R. No. 146259, Sept. 13, 2007.
41
II Tolentino, Civil Code, 1992 ed., 248-249.
42
Resuena v. CA, 454 SCRA 42, 53 (2005); Pada-Kilario v. CA, 322 SCRA 481 (2000);
Refugia v. CA, 258 SCRA 347 (1996).
43
Baltazar v. Caridad, 17 SCRA 460. See this case in supra § 46.1.1.
44
Macasaet v. Macasaet, 439 SCRA 625 (2004).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 395
POSSESSION
Possession and the Kinds Thereof
However, in some special cases, this Court has used
Article 448 by recognizing good faith beyond this limited
definition. Thus, in Del Campo v. Abesia, this provision was
applied to one whose house — despite having been built at
the time he was still co-owner — overlapped with the land
of another. This article was also applied to cases wherein a
builder had constructed improvements with the consent of
the owner. The Court ruled that the law deemed the builder
to be in good faith. In Sarmiento v. Agana, the builders were
found to be in good faith despite their reliance on the consent
of another, whom they had mistakenly believed to be the
owner of the land.
Based on the aforecited special cases, Article 448
applies to the present factual milieu. The established facts
of this case show that respondents fully consented to the
improvements introduced by petitioners. In fact, because
the children occupied the lots upon their invitation, the
parents certainly knew and approved of the construction of
the improvements introduced thereon. Thus, petitioners may
be deemed to have been in good faith when they built the
structures on those lots.”
The above case is factually similar to Javier v. Javier.47 In that
case, the Court deemed the son to be in good faith for building the
improvement (the house) with the knowledge and consent of his father,
to whom belonged the land upon which it was built.
In Sarmiento v. Agana,48 on the other hand, the respondent Ernesto
Valentino was still courting his wife when the latter’s mother had told
him that the couple could build a residential house on a land that was
assumed to be owned by the said mother. It subsequently turned out that
the land had been titled in the name of another person who subsequently
sold the same to petitioner. After purchasing the land, the petitioner
demanded that the spouses Valentino vacate the premises. On the
question of whether the spouses Valentino were builders in good faith,
the Court held —
47
7 Phil. 261, 267, January 2, 1907.
48
Supra.
394 PROPERTY
Court recognized the good faith of the possessor or builder beyond this
limited definition. Let us consider the cases of Macasaet v. Macasaet45
and Sarmiento v. Agana,46 for example.
In Macasaet v. Macasaet, the spouses Ismael and Teresita Macasaet
were invited by the parents of Ismael (spouses Vicente and Rosario
Macasaet) to occupy the latters’ two lots, out of parental love and a
desire to foster family solidarity. Pursuant to such invitation, Ismael
and Teresita constructed their conjugal house on the said property.
Unfortunately, an unresolved conflict terminated this situation. Out
of pique, the parents of Ismael asked them to vacate the premises, for
which reason, the children lost their right to remain on the property.
The children, however, claimed that they were builders in good faith
and therefore entitled to exercise the rights granted under Article
448 of the New Civil Code. In resolving this question, the Supreme
Court recognized that the children were bereft of any title or mode of
acquisition upon which to base their claim of being possessor-builders
in good faith, nevertheless, because of the uniqueness of the situation
and since the parents fully consented to the improvements therein
introduced, the Court considered them possessor-builders in good faith
entitled to exercise the rights granted under Article 448 of the New Civil
Code. The Court explained —
“On the other hand, when a person builds in good faith
on the land of another, the applicable provision is Article
448, which reads:
xxx xxx
This Court has ruled that this provision covers only cases
in which the builders, sowers or planters believe themselves
to be owners of the land or, at least, to have a claim of title
thereto. It does not apply when the interest is merely that of
a holder, such as a mere tenant, agent or usufructuary. From
these pronouncements, good faith is identified by the belief
that the land is owned; or that — by some title — one has the
right to build, plant, or sow thereon.
45
Supra.
46
129 SCRA 122 (1984). See digest of this case in supra § 46.3.2.
396 PROPERTY
“We agree that ERNESTO and wife were builders
in good faith in view of the peculiar circumstances under
which they had constructed the RESIDENTIAL HOUSE.
As far as they knew, the LAND was owned by ERNESTO’s
mother-in-law who, having stated they could build on the
property, could reasonably be expected to later on give them
the LAND.”
[i] Possessors in the Concept of Holder, Not Possessors in Good
Faith
One whose interest is merely that of a holder, such as a mere
tenant, agent or usufructuary, is not qualified to become a possessor-
builder in good faith.49 A lessee cannot be said to be a possessor-builder
in good faith as he has no pretension to be owner.50 Being a mere lessee,
he knows that his occupation of the premises will continue only for
the life of the lease.51 Hence, he cannot claim that he is unaware of any
flaw in his title or that he is under the belief that he is the owner of the
subject premises.52
[83.1.2] Existence of Flaw or Defect in the Title
For one to be considered a possessor in good faith, it is not sufficient
that there be flaw or defect in his title. In addition, it is essential that
such flaw or defect in the title must be such that it will have the effect
of invalidating the title. If the flaw or defect does not result in the
invalidation of the title, he is not merely a possessor in good faith but
the owner. Indeed, the phrase “possessor in good faith” presupposes
ownership in another.53
[83.1.3] Ignorance of the Existence of Such Flaw or Defect
A possessor in good faith is one who is not aware that there exists
in his title or mode of acquisition any flaw which invalidates it.54 On
49
Parilla v. Pilar, G.R. No. 167680, Nov. 30, 2006; Macasaet v. Macasaet, supra;
50
Id.
51
Geminiano v. CA, 259 SCRA 344 (1996).
52
Florentino v. CA, G.R. No. 172384, Sept. 12, 2007.
53
Pershing Tan Cueto v. CA, 148 SCRA 54 (1987).
54
Caram v. Laureta, 103 SCRA 7; Manotok Realty, Inc. v. CA, 134 SCRA 325; PNB v. De
Jesus, G.R. No. 149295, Sept. 23, 2003; see also Cabal v. Cabal, G.R. No. 153625, July 31, 2006;
Ochoa v. Apeta, G.R. No. 146259, Sept. 13, 2007.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 397
POSSESSION
Possession and the Kinds Thereof
the other hand, a possessor in bad faith is one in possession of property
knowing that his title thereto is defective.55 The difference, therefore,
between a possessor in good faith and one in bad faith is that the former
is NOT AWARE of the defect or flaw in his title or mode of acquisition
while the latter is AWARE of such defect or flaw.56 But in either case
there is a flaw or defect.57
Hence, one who acquires real estate with knowledge of a defect or
lack of title in his vendor cannot claim that he has acquired title thereto
in good faith as against the true owner of the land or of an interest
therein; and the same rule must be applied to one who has knowledge of
facts which should put a reasonable man upon his guard, and then claims
that he acted in good faith under the belief that there was no defect in
the title of the vendor.58 In the following situations, the possessor is
considered in bad faith:
(1) Where the possessor of the land acquired the same from a
person other than the registered owner because he was charged with
notice of the existence of the owner’s certificate of title.59
(2) Where the possessor of the land knows that she has no title
thereto, because she bought the house erected thereon from one whom
she knew was merely a tenant on the land;60
[83.2] Mistake of Law
Ordinarily, it is only ignorance or mistake of fact which serves
as basis of good faith but not mistake of law in view of the principle
enshrined in Article 3 of the New Civil Code that “ignorance of the law
excuses no one from compliance therewith.” However, the possessor’s
mistake upon a doubtful or difficult question of law may serve as basis
of his good faith,61 in which case such mistake will not render him a
55
Escritor, Jr. v. IAC, 155 SCRA 577.
56
Pershing Tan Cueto v. CA, supra.
57
Id.
58
Manotok Realty, Inc. v. CA, 134 SCRA 325; see also Leung Yee v. FL Strong Machinery
Co., 37 Phil. 644.
59
J.M. Tuason & Co. v. Lecardo, et al., CA-G.R. No. 25477-R, July 24, 1962; J.M. Tuason
& Co., Inc. v. Manuel Abundo, CA-G.R. No. 29701-R, November 18, 1968; Leabres v. CA, 146
SCRA 158 (1986).
60
De Guzman v. Rivera, 4 Phil. 620.
61
Art. 526, 3rd par., NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 399
POSSESSION
Possession and the Kinds Thereof
[83.3] Presumption of Good Faith
Good faith is always presumed, and upon him who alleges bad faith
on the part of the possessor rests the burden of proof.63 There is a parallel
presumption under the Rules of Evidence in favor of the innocence of a
person from any wrongdoing.64 This rule is but a necessary consequence
of the treatment that the law accords to possession which under the
Civil Code is viewed as an outward appearance of ownership. Note that
under Article 433 of the New Civil Code, actual possession under claim
of ownership is viewed as that of presumed ownership.
The presumption in favor of the good faith of the possessor,
however, is only juris tantum65 and may be overcome by proof to the
contrary. If no evidence is presented proving bad faith, the presumption
of good faith therefore remains66 for it is likewise presumed that
possession continues to be enjoyed on the same character in which it
was acquired, until the contrary is proved.67
This presumption in favor of good faith continues to subsist
until facts exist which show that the possessor is already aware that
he wrongfully or improperly possesses the thing.68 In other words,
every possessor in good faith becomes a possessor in bad faith from
the moment he becomes aware that what he believed to be true is not
so.69 Consequently, possession in good faith ceases from the moment
defects in the title are made known to the possessors, by extraneous
evidence or by suit for recovery of the property by the true owner.70
Whatever may be the cause or the fact from which it can be deduced
that the possessor has knowledge of the defects of his title or mode of
acquisition, it must be considered sufficient to show bad faith.71 In Tacas
v. Tobon,72 the Supreme Court held that if there are no other facts from
63
Art. 527, NCC.
64
See Rule 131, Sec. 3(a), Rules of Court.
65
See Pacific Banking Corp. v. CA, 173 SCRA 102.
66
Escritor, Jr. v. IAC, 155 SCRA 577.
67
Art. 529, NCC.
68
Art. 528, NCC; Lacap v. Lee, G.R. No. 142131, December 11, 2002.
69
Ballesteros v. Abion, G.R. No. 143361, February 09, 2006, citing Tacas v. Tobon, 53 Phil.
356 (1929).
70
Ortiz v. Kayanan, 92 SCRA 146 (1979).
71
Wong v. Carpio, 203 SCRA 118 (1991).
72
53 Phil. 356 (1929); see also Mindanao Academy, Inc. v. Yap, 13 SCRA 190 (1965); Ortiz
v. Cayanan, 92 SCRA 146 (1979); Wong v. Carpio, 203 SCRA 118 (1991); Maneclang v. Baun,
398 PROPERTY
possessor in bad faith. According to Manresa, gross and inexcusable
ignorance of the law may not be the basis of good faith, but excusable
error arising from complex legal principles and from the interpretation
of conflicting or doubtful doctrines may be such basis.62
Kasilag v. Roque
69 Phil. 217
In this case, Ambrosio mortgaged in favor of the petitioner the
improvements she made on her land acquired by a homestead patent. When
Ambrosio was not able to pay the interest on the loan, she and the petitioner
verbally agreed that she would convey to the latter the possession of the land
subject to the condition that the petitioner would not collect the interest, would
introduce improvements thereon and would be entitled to the fruits. Pursuant
to such verbal agreement, the petitioner did all three conditions. After the death
of Ambrosio, her heirs sought to annul the contracts which she entered into
with the petitioner on the ground that the same were in violation of Section
116 of the Public Land Act prohibiting any alienation or encumbrance of lands
acquired under the free patent for a period of five years from the date of the
issuance of the patent. This law, however, allows the pledge or mortgage of the
improvements thereon. When the case reached the appellate court, the Court of
Appeals modified the judgment of the lower court by declaring the petitioner
possessor in bad faith for taking the land in violation of Section 116 of the
Public Land Act. In resolving the issue of whether petitioner was a possessor
in good faith or not, the Court held —
“xxx It is a fact that the petitioner is not conversant with
the laws because he is not a lawyer. In accepting the mortgage of
the improvements he proceeded on the well-grounded belief that
he was not violating the prohibition regarding the alienation of
the land. In taking possession thereof and in consenting to receive
its fruits, he did not know, as clearly as a jurist does, that the
possession and enjoyment of the fruits are attributes of the contract
of antichresis and that the latter, as a lien, was prohibited by Section
116. These considerations again bring us to the conclusion that, as
to the petitioner, his ignorance of the provisions of section 116 is
excusable and may, therefore, be the basis of his good faith. The
petitioner is deemed a possessor in good faith.
62
4 Manresa, 100-102, cited in Kasilag v. Roque, 69 Phil. 217.
400 PROPERTY
which the interruption of good faith may be determined, and an action
is filed to recover possession, good faith ceases from the date of receipt
of the summons to appear at the trial and if such date does not appear in
the record, that of the filing of the answer would control.73 The Supreme
Court explained in Tacas —
“Evidence being lacking to show that when he entered
upon the possession of the lands in question, he was aware
of any flaw in his title or mode of acquiring it, he is deemed
a possessor in good faith (Article 433, Civil Code), and in
accordance with article 451 of the Civil Code, the fruits
of said lands were his, until he was summoned upon the
complaint, or until he has filed his answer thereto. (Saul v.
Hawkins, 1 Phil., 275; Javier v. Javier, 6 Phil., 493; Cleto v.
Salvador, 11 Phil., 416; Valencia v. Jimenez and Fuster, 11
Phil., 492; Araujo v. Celis, 16 Phil., 329; Alcala and Alviedo
v. Hernandez and Pacleb, 32 Phil., 628; Tolentino v. Vitug,
39 Phil., 126; Aquino v. Tan, 39 Phil., 517; Rivera v. Roman
Catholic Archbishop of Manila, 40 Phil., 717; and Velasquez
v. Teodoro, 46 Phil., 757.)
Art. 451 of the same Code provides:
Art. 451. Fruits received by one in possession in good
faith before possession is legally interrupted become his
own.
Natural and industrial fruits are deemed to have been
received as soon as they are gathered and harvested.
Civil fruits are deemed to accrue from day to day, and
belong to the possessor in good faith in this proportion.
In his comments upon this article of the Civil Code, Manresa,
among other things, says:
But to every possessor in good faith there comes a time
when he is considered a possessor in bad faith. When the
owner or possessor with a better right comes along, where he
208 SCRA 179 (1992); Suobiron v. CA, 250 SCRA 184 (1995); and Ballesteros v. Abion, G.R.
No. 143361, February 9, 2006.
73
Maneclang v. Baun, 208 SCRA 179 (1992).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Possession and the Kinds Thereof
becomes aware that what he had taken for granted is at least
doubtful, and when he learns the grounds in support of the
adverse contention, good faith ceases. The possessor may
still believe that his right is more secure, because we resign
ourselves with difficulty to the sight of our vanishing hopes;
but when the final judgment of the court deprives him of
the possession, all illusion necessarily disappears. Although
he may not have been convinced of it before, the possessor
becomes aware that his possession is unlawful from the time
he learns of the complaint, from the time he is summoned to
the trial. It is at this time that his possession is interrupted,
according to Article 1945, and that he ceases to receive the
fruits, according to the first paragraph of Article 451. The
ruling of the court retroacts to that time; but shall good faith
be deemed to cease then? Although there is a great difference
between requiring the possessor in good faith to return the
fruits he received from the time when his possession was
legally interrupted, and considering him a possessor in bad
faith for all legal purposes from that time, the law had to
establish a definite rule in the matter, which is none other
than that deducible from a combination of Articles 452, 1945
and 435. Whether or not the defendant be a possessor in bad
faith, for there is no doubt that he can be, and the law makes
no attempt to deny it, from the service of judicial summons,
there exists an act that this possessor knows that his right is
not secure, that someone disputes it, and that he may yet lose
it; and if the court holds that restitution be made, that time
determines all the legal consequences of the interruption,
the time when the possession in good faith ceased to be so
before the law.
The decisions of April 27, 1877, April 22, May 10 and
June 13, 1878, February 11, and October 5, 1885, March
17, 1891, March 4, and May 17, 1893, held that good faith
ceased when the answer to the complaint was filed, taking
this doctrine from the Partidas. By analogy, the service of the
summons, doubtless more certain and more difficult to evade,
is now admitted, according to articles 451 and 1945 of the
Code, and it is in this sense that the decisions of the Supreme
Court of January 28, 1896, December 7, 1899, November
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Possession and the Kinds Thereof
within the commerce of man as the latter term is understood in law. As
discussed in said section, while things which are outside the commerce
of man may not be the object of a contract,77 they are not necessarily
disqualified from being considered as property pursuant to the criterion
mentioned in Article 414 of the Code. A good illustration is the property
of public dominion pertaining to the State. While they are outside the
commerce of man and cannot be the object of contracts, nonetheless,
they are considered property under the Code.78 On the other hand, the
term “susceptibility to appropriation” in the present article is broader
in scope for it also refers to things which are within the commerce of
man, aside from embracing the meaning accorded to it under Article
414 as discussed in supra § 1.4. Stated otherwise, all things which are
outside the commerce of man and those which, by reason of physical
impossibility cannot be subjected to human control, may not be the
object of possession.
With respect to rights, it must be noted that servitudes which are
not continuous (discontinuous easements) or apparent (non-apparent
easements) are not susceptible of possession since they are not
susceptible of continuous exercise.79
In view of the foregoing discussion, the following are examples of
things and rights which may not be the object of possession:
(1) Things which, because of their distance, their depth or their
immensity are not capable of human control (res communes
beyond human control) such as the sun, the stars and the
ocean;
(2) Forces of nature in their diffused state unless they are brought
under human control through the help of science;
(3) Property of public dominion;
(4) Discontinuous servitudes;
(5) Non-apparent servitudes.
77
See Art. 1347, NCC.
78
See Arts. 419 to 425, NCC.
79
4 Castan, 9th ed., 4430-445; see also II Caguioa, Civil Code, 1966 ed., 174 and II Reyes
and Puno, Outline of Phil. Civil Law, 95.
401 402 PROPERTY
23, 1900, and July 11, 1903, must be understood, all of them
holding that even the possessor in good faith must return the
fruits received from the time the answer to the complaint
was filed, that is, from the time he became aware that he
was in undue possession. (Manresa, Commentaries on the
Spanish Civil Code, vol. 4, pp. 270, 271.)
The interruption of good faith on the part of the possessor need
not occur by reason of initiation of legal proceedings. As earlier stated,
whatever may be the cause or the fact from which it can be deduced
that the possessor has knowledge of the defects of his title or mode
of acquisition, it must be considered sufficient to show bad faith.74 In
one case,75 for example, the receipt of a letter from the daughter of the
plaintiff advising defendant to desist from planting coconuts on a land
in the possession of defendant, and which letter the defendant answered
by saying that she did not intend to plant coconuts on the land belonging
to plaintiff, was considered as the reckoning point for the interruption
of good faith. In this case, it was held that the possession in bad faith of
the defendant began from the receipt of such letter.
It is only in case of absence of facts from which the interruption of
good faith may be determined that such interruption shall be reckoned
from the date of receipt of the summons or from the filing of the answer,
as the case may be.
Art. 530. Only things and rights which are susceptible of being ap-
propriated may be the object of possession. (437)
[83.4] Object of Possession
Only things and rights which are susceptible of being appropriated
may be the object of possession.76 Note that the phrase “susceptible of
being appropriated” in this article is used in a different manner compared
to the phrase “may be the object of appropriation” in Article 414. As
discussed in supra § 1.4, the concept of susceptibility to appropriation
in Article 414 is not equivalent to the concept of things which are
74
Wong v. Carpio, 203 SCRA 118 (1991).
75
Ortiz v. Fuentebella, 27 Phil. 537.
76
Art. 530, NCC.
403 404 PROPERTY
Chapter 2
ACQUISITION OF POSSESSION
Art. 531. Possession is acquired by the material occupation of a
thing or the exercise of a right, or by the fact that it is subject to the ac-
tion of our will, or by the proper acts and legal formalities established for
acquiring such right. (438a)
Art. 532. Possession may be acquired by the same person who is to
enjoy it, by his legal representative, by his agent, or by any person with-
out any power whatever; but in the last case, the possession shall not be
considered as acquired until the person in whose name the act of posses-
sion was executed has ratified the same, without prejudice to the juridical
consequences of negotiorum gestio in a proper case. (439a)
§ 84. Acquisition of Possession
[84.1] Modes of Acquiring Possession
Possession is acquired in any of the following ways:
(1) By material occupation of a thing or the exercise of a
right;
(2) By subjecting the thing or right to the action of our
will; and
(3) By the proper acts and legal formalities established for
the acquisition of such right.80
The first appears to be an original mode of acquisition while the
others refer to derivative modes.
[84.2] Requisites for acquisition of possession
As discussed in supra § 80.2, the acquisition of possession
presupposes the existence of two essential elements: (1) the corpus; and
(2) the animus possidendi. The first refers refer to the material holding
of the thing or the exercise of the right which may be acquired through
any of the modes mentioned in this article. The second, on the other
hand, refers to the intent to possess the thing or right. In other words,
possession is not acquired in law in the absence of intent to possess it
although there is physical holding of the thing. For example, if stolen
80
Art. 531, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 405
POSSESSION
Acquisition of Possession
goods are placed in the bag of a person by another without the former’s
knowledge and consent, the former is not considered a possessor in law
because of the absence of intent to possess the goods.
[84.3] Material Occupation
The term “material occupation” in Article 531 of the New Civ-
il Code is used in its ordinary grammatical meaning, to mean “actual
physical possession” or “material apprehension.” Obviously, this mode
applies only to corporeal objects and does not find application to ac-
quisition of possession over a right. In this sense, the term “material
occupation” in Article 531 is synonymous to “occupation” as a mode of
acquiring ownership under Article 712 of the New Civil Code because
both involve the material apprehension of things corporeal. They differ,
however, in the following respects:
(1) the term “occupation” in Article 531 is used in its ordinary
grammatical meaning whereas the term “occupation” in
Article 712 is used in a juridical and technical meaning;
(2) in Article 531, occupation is a mode of acquiring possession;
whereas, in Article 712, occupation is a mode of acquiring
ownership;
(3) in Article 531, the occupation must be coupled with intent to
possess; whereas, in Article 712, what is required is intent to
own or appropriate;
(4) in Article 531, occupation as a mode of acquiring possession
applies whether the property is with an owner or not; in
Article 712, however, occupation can take place only with
respect to property without an owner;
(5) in Article 531, occupation as a mode of acquiring possession
can have as its object a parcel of land; in occupation as a
mode of acquiring ownership under Article 712, it cannot
have as its object a parcel of land.81
The term “material occupation” in Article 531 includes two forms
of constructive delivery: (1) tradicion brevi manu and (2) tradicion
constitutum possessorium. Note that in these kinds of constructive
81
See Art. 714, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 407
POSSESSION
Acquisition of Possession
doctrine in Ramos v. Director of Lands, supra, the Court clarified that
while possession in the eyes of the law does not mean that a man has
to have his feet on every square meter of ground before it can be said
that he is in possession, the same is not gained by mere nominal claim.
Hence, the mere planting of a sign or symbol of possession cannot
justify a Magellan like claim of dominion over an immense tract of
territory. In reiteration of the ruling in Ramos, the Court clarified that
the application of the doctrine of constructive possession shall depend,
among others, to the size of the tract in controversy with reference to
the portion actually in possession of the claimant.
In Ramirez v. Director of Lands,92 the Court also noted that the
mere fact of declaring uncultivated land for taxation purposes and
visiting it every once in a while, as was done by the alleged possessor,
does not constitute acts of possession. In Director of Lands v. Reyes,93
the Court further held that a mere casual cultivation of portions of the
land by the claimant, and the raising thereon of cattle, do not constitute
possession under claim of ownership.
[84.5] Subjection to Action of Will
This particular mode does not involve any material apprehension
to distinguish it from the first mode (material occupation). It connotes,
however, a degree of control over the thing sufficient to subject the
same to the action of one’s will. What is important in this mode is the
intention to possess manifested by certain facts which are present.94
Included in this mode are the two forms of constructive delivery known
as tradicion simbolica and tradicion longa manu.
Tradicion simbolica takes place through delivery of symbols or
some object which represent those to be delivered thus placing the thing
under the control of the transferee. Through this mode, the delivery
of the keys to a warehouse is sufficient to transfer possession. In the
case of Banco Español Filipino v. Peterson, et al.,95 involving the
question of whether transfer of possession took place with respect to
goods remaining in the warehouse, the Supreme Court declared that the
symbolical transfer of the goods by means of the keys to the warehouse
92
60 Phil. 114, 133 (1934).
93
68 SCRA 177, 193 (1975).
94
4 Manresa, 5th ed., 133.
95
7 Phil. 409.
406 PROPERTY
delivery, material occupation is involved.82 But for those kinds of
constructive delivery where material occupation is not involved, such as
tradicion symbolica and tradicion longa manu, the mode of acquisition
of possession is by subjecting the thing to the action of our will and not
material occupation.
[84.4] Doctrine of Constructive Possession
The doctrine of constructive possession applies when the
possession is under title calling for the whole.83 As a rule, the possession
and cultivation of a portion of a tract under claim of ownership of all is
a constructive possession of all, if the remainder is not in the adverse
possession of another.84 Stated otherwise, the actual possession of part of
the property is deemed to extend to the whole because possession in the
eyes of the law does not mean that a man has to have his feet on every
square meter of ground before it can be said that he is in possession.85
For this doctrine to apply the following requisites must be present: (1)
the alleged possessor must be in actual possession of a portion or part
of the property; (2) he is claiming ownership of the whole area; (3) the
remainder of the area must not be in the adverse possession of another
person; and (4) the area claimed must be reasonable.
The doctrine of constructive possession was applied in the follow-
ing cases: Ramos v. Director of Lands,86 Roales v. Director of Lands,87
Somodio v. CA,88 Dela Rosa v. Carlos,89 and Yu v. Pacleb.90
In Lasam v. Director of Lands,91 while there was evidence showing
that the claimant might have possessed a portion of the parcel claimed
by him and the registration of which he sought, such evidence, however,
was insufficient to establish with certainly the particular portion
occupied and the extent of such occupation. In refusing to apply the
82
4 Manresa, 5th ed., 123-124.
83
Resolution of the Supreme Court in Gonzalez v. CA, G.R. No. 145914, June 20, 2001.
84
Ramos v. Director of Lands, 39 Phil. 175 (1918).
85
Resolution of the Supreme Court in Gonzalez v. CA, G.R. No. 145914, June 20, 2001,
citing Ramos v. Director of Lands, supra.
86
Supra.
87
51 Phil. 302 (1927).
88
236 SCRA 307 (1994).
89
414 SCRA 226 (2003).
90
Supra.
91
65 Phil. 367 (1938).
408 PROPERTY
where the goods were stored was sufficient to show that the depositary
was legally placed in possession of the goods.
Tradicion longa manu, on the other hand, is effected by the trans-
feror pointing out to the transferee the things which are being trans-
ferred.
[84.6] Proper Acts and Legal Formalities
This third mode of acquiring possession refers to any juridical act
by which possession is acquired or to which the law gives the force of acts
of possession.96 Examples of these juridical acts are donations, intestate
and testate succession, writs of possession, judicial or administrative
possession and execution of public instruments. In the case of Muyco v.
Montilla, et al.,97 the possession given by the sheriff to the assignees of
the original purchasers of the hacienda, in compliance with the order of
the court in an action brought against the former owners of said hacienda
was viewed by the Supreme Court as constituting the proper acts and
legal formalities referred to in Article 531 of the New Civil Code.
[84.7] Acquisition of Possession Over Rights
As discussed in supra § 84.3, material occupation is not available
as a mode of acquiring possession over rights since the same requires
actual physical possession and applies only to corporeal objects. With
respect to rights, possession over it is acquired through any of the
following means: (1) by exercise of such right; (2) by subjecting it to
the action of our will; and (3) by proper acts and legal formalities.
[84.8] By Whom Possession Acquired
In the same way that possession may be exercised by the owner
or holder either personally or through an agent,98 its acquisition may
likewise be made personally by the person who is to enjoy it or through
his agent or legal representative.99 It may even be acquired by any
person, for and on behalf of the person who is to enjoy it, even in the
absence of any authority from the latter.100
96
4 Manresa, 5th ed., 134-136.
97
7 Phil. 498.
98
Art. 524, NCC.
99
Art. 532, NCC.
100
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 409
POSSESSION
Acquisition of Possession
Of course, the “agent” referred to in Article 532 of the New Civil
Code is someone who has been authorized to acquire possession by the
person who is to enjoy it. In other words, he is acquiring possession
not for himself but for his principal. In such a situation, possession
is considered acquired by the principal from the time that the same is
acquired by the agent.
If a person has not been authorized by the intended principal but
possession is nonetheless acquired by the former only in representation
of the latter, the intended principal may or may not ratify the act of
possession in his name. In the event that the intended principal ratifies
the act of possession done in his name, the possession shall be considered
acquired by him only upon such ratification.101
The rule above, however, is without prejudice to the juridical
consequences of negotiorum gestio in a proper case. According to
Senator Tolentino, when a person voluntarily manages the affairs of
another (negotiorum gestio), the ratification by the person for whom
the thing was acquired will retroact to the time of apprehension by the
gestor, and the possession of the former must be deemed to have been
acquired from that moment.102
[84.9] Capacity to Acquire Possession
The rule with respect to the requirement of capacity to act in
relation to acquisition of possession is embodied in Article 535 of the
New Civil Code which reads:
“Art. 535. Minors and incapacitated persons may
acquire the possession of things; but they need the assistance
of their legal representatives in order to exercise the rights
which from the possession arise in their favor. (443)”
It is clear from this article that it is applicable only to acquisition
of possession by minors and incapacitated person over things but not
over rights. As explained in supra § 84.7, possession over rights may
only be acquired through any of the modes therein discussed. Note that
in any of said modes, capacity to act is necessary for the acquisition of
possession.
101
Art. 532, NCC.
102
II Tolentino, Civil Code, 1992 ed., 263-264.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 411
POSSESSION
Acquisition of Possession
was included in the proceedings for the settlement of the estate of “A”
and placed under the administration of “B,” one of A’s two heirs who
continued to cultivate the subject property. Assuming that the settlement
proceedings lasted four years, during which “B” validly renounced his
inheritance while “C” (the other heir) accepted the inheritance, the
former shall be deemed never to have possessed the property while the
latter shall be deemed its possessor from the moment of the death of A,
even if he was not in actual physical possession of the property from
the time of “A’s” death up to his acceptance of the inheritance. Further,
such transfer of possession from “A” to “C” is deemed continuous and
uninterrupted. Hence, “C” will acquire ownership over the property
through prescription upon his acceptance of the inheritance since the
period required for extraordinary prescription is thirty years.105
[85.2] Consequences of Wrongful Possession By Decedent
As defined in the law, a possessor in bad faith is one in possession
of property knowing that his title thereto is defective.106 The existence of
bad faith on the part of one possessor does not, however, prejudice his
successors-in-interest. The rule in this jurisdiction is that only personal
knowledge of the flaw in one’s title or mode of acquisition can make
him a possessor in bad faith, for bad faith is not transmissible from one
person to another, not even to an heir.107 This rule is expressly stated in
Article 534 of the New Civil Code:
“Art. 534. On who succeeds by hereditary title shall
not suffer the consequences of the wrongful possession of
the decedent, if it is not shown that he was aware of the
flaws affecting it; but the effects of possession in good faith
shall not benefit him except from the date of the death of the
decedent. (442)”
The reason for the above-quoted article is that bad faith is personal
and intransmissible. Its effects must, therefore, be suffered only by the
person who acted in bad faith; his heir should not be saddled with such
consequences.108 Consequently, if the heir is not aware of the flaws
105
See Art. 1137, NCC.
106
Art. 526, 2nd par., NCC.
107
Escritor, Jr. v. IAC, 155 SCRA 577 (1987).
108
Id., citing II Tolentino, Civil Code, 1983 ed., 234.
410 PROPERTY
With respect to acquisition of possession over things, Article 535
contemplates principally of acquisition through “material occupation”
since this mode does not require capacity to act. However, the law
likewise contemplates of other means of acquisition for which the minor
or other incapacitated persons has the necessary capacity, such as pure
or simple donations and succession, whether testate or intestate.
Art. 533. The possession of hereditary property is deemed transmit-
ted to the heir without interruption and from the moment of the death of
the decedent, in case the inheritance is accepted.
One who validly renounces an inheritance is deemed never to have
possessed the same. (440)
Art. 534. On who succeeds by hereditary title shall not suffer the
consequences of the wrongful possession of the decedent, if it is not
shown that he was aware of the flaws affecting it; but the effects of pos-
session in good faith shall not benefit him except from the date of death
of the decedent. (442)
§ 85. Transfer of Possession Through Succession
[85.1] Effect of Succession
As discussed in supra § 84.6, succession is one of the juridical acts
sufficient to transfer possession without need of physical or material
holding of the property subject mater thereof. If possession of property
is effected by way of succession, whether testate or intestate, such
possession is deemed transmitted to the heir without interruption from
the moment of the death of the decedent but only if the heir accepts
the inheritance.103 This rule will apply even if such heir is not in actual
physical possession of the property. If the heir, on the other hand, validly
renounces the inheritance he will be deemed never to have possessed
the same104 even if he is in actual physical possession of the property.
The foregoing rule especially finds application in the acquisition of
property through prescription. Let us take this example: “A” had been in
open, peaceful and adverse possession of a parcel of land formed through
accretion on the land owned of “X” for an uninterrupted period of twenty
eight years under claim of ownership. Upon his death, this property
103
Art. 533, NCC.
104
Id.
412 PROPERTY
affecting the title or mode of acquisition of the decedent, the heir shall
be considered a possessor in good faith because good faith is always
presumed.109 However, the effects of possession in good faith shall not
benefit the heir except from the date of death of the decedent.110
Escritor, Jr. v. IAC
155 SCRA 577 (1987)
In this case, Miguel Escritor filed an application for the titling of a
parcel of land located at Atimonan, Quezon. There being no opposition
to his application, the cadastral court rendered a decision on May 15, 1958
adjudicating the lot with its improvements in favor of claimant Escritor and
confirming his title thereto. Immediately thereafter, Escritor took possession
of the property. On August 2, 1958, Simeon Acuña, filed a petition for review
of the above-mentioned decision contending that it was obtained by claimant
Escritor through fraud and misrepresentation. While the proceedings in this
case were going on, Escritor died. His heirs subsequently took possession of
the property. On February 16, 1971 or thirteen years after the disputed decision
was rendered, the court adjudicated in favor of Acuna, ordering the heirs of
Escritor to vacate the land. A writ of possession was later issued and the heirs
of Escritor voluntarily gave up their possession. In 1975, Acuna filed another
case against the heirs of Escritor for recovery of damages for the fruits of
the land which was allegedly possessed by the defendants unlawfully for
thirteen years. Acuña alleged that the registration of the lot was effectuated
by the deceased Escritor through fraud, malice, and misrepresentation. Hence,
according to him, Escritor and his heirs were possessors in bad faith. The lower
court rendered a decision dismissing Acuña’s complaint finding that that the
heirs of Escritor were in good faith possessing under a just title. On appeal, the
Intermediate Appellate Court held that the heirs of Escritor were possessors in
bad faith from 1958 up to 1971 and should be held accountable for damages.
The Supreme Court, on appeal, reversed the judgment of the IAC. The Court
explained —
“Nevertheless, assuming that claimant Escritor was a pos-
sessor in bad faith, this should not prejudice his successors-in-in-
terest, petitioners herein, as the rule is that only personal knowl-
edge of the flaw in one’s title or mode of acquisition can make him
a possessor in bad faith, for bad faith is not transmissible from one
person to another, not even to an heir. As Article 534 of the Civil
109
Art. 527, NCC.
110
Art. 534, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Acquisition of Possession
Code explicitly provides, ‘one who succeeds by hereditary title
shall not suffer the consequences of the wrongful possession of the
decedent, if it is not shown that he was aware of the flaws affecting
it; ...’ The reason for this article is that bad faith is personal and
intransmissible. Its effects must, therefore, be suffered only by the
person who acted in bad faith; his heir should not be saddled with
such consequences.
Under Article 527 of the Civil Code, good faith is always
presumed, and upon him who alleges bad faith on the part of a
possessor rests the burden of proof. If no evidence is presented
proving bad faith, like in this case, the presumption of good faith
remains.
Respondent Acuna, on the other hand, bases his complaint
for damages on the alleged fraud on the part of the petitioners’
predecessor in having the land registered under his (the
predecessor’s) name. A review of the record, however, does not
indicate the existence of any such fraud. It was not proven in the
cadastral court nor was it shown in the trial court.
Lot No. 2749 was not awarded to Escritor on the basis of
his machinations. What is clear is that in the hearing of January
22, 1958, the Court permitted Escritor to adduce his evidence
of ownership without opposing evidence as the lot had become
uncontested. Respondent Acuna himself failed to appear in this
hearing because of a misunderstanding with a lawyer. There is no
finding that such failure to appear was caused by petitioners in
this case. On the contrary, all the requirements of publication were
followed. Notice of hearing was duly published. Clearly then, the
allegation of fraud is without basis.
Respondent having failed to prove fraud and bad faith on
the part of petitioners, We sustain the trial court’s finding that
petitioners were possessors in good faith and should, therefore,
not be held liable for damages.
Art. 535. Minors and incapacitated persons may acquire the posses-
sion of things; but they need the assistance of their legal representatives
in order to exercise the rights which from the possession arise in their
favor. (443)
Art. 536. In no case may possession be acquired through force or
intimidation as long as there is a possessor who objects thereto. He who
believes that he has an action or a right to deprive another of the holding
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Acquisition of Possession
of ejectment is employed, the party who proves prior possession can
recover possession even from the owners themselves.114
The availment of legal remedy is for the purpose of preventing
breaches of peace and criminal disorder resulting from the use of force
by claimants out to gain possession.115 The rule of law does not allow
the mighty and the privileged to take the law into their own hands to
enforce their alleged rights. They should go to court and seek judicial
vindication.116
Heirs of Pedro Laurora, et al. v. Sterling Technopark III, et al.
G.R. No. 146815, April 9, 2003
In 1969, the application of Pedro Laurora to buy the subject lot was
approved by the government. In 1974, Pedro requested the DAR for the transfer
of the lot to Juan Manaig, which request was acted upon favorably by the DAR.
In 1976, the Spouses Laurora executed a Deed of Sale over the lot in favor of
Juan Manaig, which sale was approved by the DAR. Subsequently, Manaig
sold the land to Mile Resources Development Corporation which, in turn, sold
it to S. P. Properties, Inc. Since 1969 up to the time of the sale of the property to
S. P. Properties, Inc., the Spouses Laurora were in possession of the same where
they planted trees. In 1997, Sterling Technopark III and S.P. Properties, Inc.,
through its employees, bulldozed and uprooted the trees and plants, and with
the use of armed men and by means of threats and intimidation, succeeded in
forcibly ejecting the spouses Laurora. The spouses thereafter filed an ejectment
case against Sterling Technopark III and S.P. Properties, Inc. In their defense,
the defendants alleged that the complainants were not the owners of the land
because they already disposed of it in 1976 as shown by legal documents.
In upholding the claim of the Spouses Laurora, the Court explained that the
only issue in forcible entry cases is the physical or material possession of real
property. Stated otherwise, said the Court, only prior physical possession, not
title, is the issue in forcible entry case. The issue of ownership in ejectment
cases is to be resolved only when it is intimately intertwined with the issue
of possession, to such an extent that the question of who had prior possession
cannot be determined without ruling on the question of who the owner of the
land is. Since in this case, no such intertwinement has been shown since the
114
Id., citing Gener v. De Leon, 367 SCRA 631 (2001) and Ceremonia v. CA, 314 SCRA
731.
115
Villaflor v. Reyes, 22 SCRA 392, January 30, 1968; Pitargue v. Sorilla, 92 Phil. 5, Sept.
17, 1952.
116
Heirs of Pedro Laurora, et al. v. Sterling Technopark III, et al., supra.
413 414 PROPERTY
of a thing, must invoke the aid of the competent court, if the holder should
refuse to deliver the thing. (441a)
Art. 537. Acts merely tolerated, and those executed clandestinely
and without the knowledge of the possessor of a thing, or by violence, do
not affect possession. (444)
§ 86. Instances Where Possession Is Not Acquired
[86.1] Use of Force or Intimidation
The law does not countenance the commission of unlawful
acts for the purpose of acquiring possession. Hence, while “material
occupation” is a recognized mode of acquiring possession, the law does
not recognize the acquisition of possession through force, violence or
intimidation.111 As such, even if a possessor is physically ousted from
the property through the use of force or violence, he is still deemed the
legal possessor in the eyes of the law.112 His possession is not considered
interrupted because the law does not recognize the acquisition of
possession effected in said manner.
The rule that possession may not be acquired through force or
intimidation as long as there is a possessor who objects thereto applies
even if the one seeking recovery of possession is the owner of the
property himself. This is clear from the language of Article 536 of the
New Civil Code:
“Art. 536. In no case may possession be acquired
through force or intimidation as long as there is a possessor
who objects thereto. He who believes that he has an action
or a right to deprive another of the holding of a thing, must
invoke the aid of the competent court, if the holder should
refuse to deliver the thing. (441a)” (Italics supplied)
Accordingly, a person in possession cannot be ejected by force,
violence or terror, not even by the owners, and notwithstanding the
actual condition of the title to the property.113 If such illegal manner
111
Art. 536, NCC.
112
Cequeña v. Bolante, G.R. No. 137944, April 6, 2000, citing Ayala de Roxas v. Maglonso,
8 Phil. 745 (1906).
113
Heirs of Pedro Laurora, et al. v. Sterling Technopark III, et al., G.R. No. 146815, April
9, 2003, citing Muñoz v. Court of Appeals, 214 SCRA 216, September 23, 1992; Joven v. Court
of Appeals, 212 SCRA 700, August 20, 1992; German Management and Services, Inc. v. Court of
Appeals, supra.; Supia and Batioco v. Quintero and Ayala, 59 Phil. 312, December 23, 1933.
415 416 PROPERTY
claim of ownership is not being made in order to prove prior possession, the
ejectment court cannot intrude or dwell upon the issue of ownership. The Court
added —
Notwithstanding the actual condition of the title to the
property, a person in possession cannot be ejected by force,
violence or terror — not even by the owners. If such illegal manner
of ejectment is employed, as it was in the present case, the party
who proves prior possession — in this case, petitioners — can
recover possession even from the owners themselves.
Granting arguendo that petitioners illegally entered into and
occupied the property in question, respondents had no right to take
the law into their own hands and summarily or forcibly eject the
occupants therefrom.
Verily, even if petitioners were mere usurpers of the land
owned by respondents, still they are entitled to remain on it
until they are lawfully ejected therefrom. Under appropriate
circumstances, respondents may file, other than an ejectment suit,
an accion publiciana — a plenary action intended to recover the
better right to possess; or an accion reivindicatoria — an action to
recover ownership of real property.
The availment of the aforementioned remedies is the legal
alternative to prevent breaches of peace and criminal disorder
resulting from the use of force by claimants out to gain possession.
The rule of law does not allow the mighty and the privileged to
take the law into their own hands to enforce their alleged rights.
They should go to court and seek judicial vindication.
[86.2] Acts Merely Tolerated
The rule is that acts which are merely tolerated do not affect
possession.117 In other words, persons whose occupation of a property is
by sheer tolerance of its owners are not considered as possessors in law.
In the language of the Court, “tolerance in itself does not bear any legal
fruit, and it can easily be supplanted by a sudden change of heart on
the part of the owner.”118 Hence, the mere permissive use, constituting
acts which are merely tolerated by the possessor, or due to his license,
117
Art. 537, NCC.
118
Resuena v. CA, 454 SCRA 42, 51.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Acquisition of Possession
cannot be made the basis of acquisitive prescription119 no matter how
long the possession may be.120 Possession, to constitute the foundation
of a prescriptive right, must be a possession under claim of title (en
concepto de dueño), or to use the common law equivalent of the term, it
must be adverse. Acts of a possessory character performed by one who
holds by mere tolerance by the owner are clearly not en concepto de
dueño, and such possessory acts, no matter how long so continued, do
not start the running of the period of prescription.121
The Court has also ruled that persons who occupy the land of
another at the latter’s tolerance or permission, without any contract
between them, are necessarily bound by an implied promise that they
will vacate the same upon demand, failing in which a summary action for
ejectment is the proper remedy against them.122 He becomes a deforciant
illegally occupying the land the moment he is required to leave123 and
the cause of action for the filing of the ejectment case is counted from
the date of the demand to vacate.124
But what constitute acts of toleration? In the case of Macasaet v.
Macasaet,125 the Court explained the concept, as follows:
“Toleration is defined as ‘the act or practice of
permitting or enduring something not wholly approved of.’
Sarona v. Villegas126 described what tolerated acts means, in
this language:
“Professor Arturo M. Tolentino states that acts
merely tolerated are those which by reason of neigh-
borliness or familiarity, the owner of property allows
his neighbor or another person to do on the property;
they are generally those particular services or benefits
which one’s property can give to another without mate-
rial injury or prejudice to the owner, who permits them
119
Cuaycong v. Benedicto, 37 Phil. 781.
120
Larena v. Mapili, 408 SCRA 484, 492.
121
Cuaycong v. Benedicto, supra.
122
Id.
123
Go, Jr. v. CA, 362 SCRA 755, 767.
124
Lopez v. David, supra; Arcal v. Court of Appeals, supra, p. 825; Villaluz v. Court of Ap-
peals, 344 Phil. 77, 89, Sept. 5, 1997.
125
439 SCRA 625 (2004).
126
131 Phil. 365, March 27, 1968.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Acquisition of Possession
[86.3] Clandestine and Unknown Acts
Acts which are executed clandestinely and without the knowledge
of the possessor do not affect possession.128 In order for possession to
remain unaffected, it is necessary that the acts executed must be both
clandestine and unknown to the possessor. An act is considered done
clandestinely if the same is done in secret, hidden or concealed.129 In
other words, the term “clandestine” is used in contradistinction to the
term “public” under Article 1118 of the New Civil Code — as a requisite
for acquisition of real property through acquisitive prescription. If the
act is done clandestinely but the same is known to the possessor, his
possession will be affected. In the same way, if the act is done publicly
even without the knowledge of the possessor, the same will affect the
latter’s possession.
If both requisites are satisfied, meaning, the act executed is both
clandestine and unknown to the possessor, the same does not affect
the true possession of the legal possessor. As a consequence, the legal
possessor’s possession is not deemed interrupted for all legal intents
and purposes, e.g., it will not interrupt the running of the period of
acquisitive prescription in favor of the legal possessor nor it will affect
his right to receive the fruits. On the part of the actual possessor, his
possession acquired through clandestine acts not known to the legal
possessor will not ripen into ownership through prescription because
one of the requirements thereof — that the possession be “public” in
character — will not be present.
Art. 538. Possession as a fact cannot be recognized at the same
time in two different personalities except in the cases of co-possession.
Should a question arise regarding the fact of possession, the present
possessor shall be preferred; if there are two possessors, the one lon-
ger in possession; if the dates of the possession are the same, the one
who presents a title; and if all these conditions are equal, the thing shall
be placed in judicial deposit pending determination of its possession or
ownership through proper proceedings. (445)
128
Art. 537, NCC.
129
Black’s Law Dictionary, 5th ed., 225.
417 418 PROPERTY
out of friendship or courtesy. x x x. And, Tolentino con-
tinues, even though this is continued for a long time, no
right will be acquired by prescription.” x x x. Further
expounding on the concept, Tolentino writes: There
is tacit consent of the possessor to the acts which are
merely tolerated. Thus, not every case of knowledge
and silence on the part of the possessor can be con-
sidered mere tolerance. By virtue of tolerance that is
considered as an authorization, permission or license,
acts of possession are realized or performed. The ques-
tion reduces itself to the existence or non-existence of
the permission.”
In the Macasaet case,127 the children were invited by the parents
to occupy the latters’ lots, out of parental love and a desire to foster
family solidarity. Subsequently, however, and out of pique, the parents
asked them to vacate the premises. The Court ruled that owing to the
circumstances of the case, a finding of possession by mere tolerance is
to be ruled out. In this case, the Court explained —
“We hold that the facts of the present case rule out the
finding of possession by mere tolerance. Petitioners were
able to establish that respondents had invited them to occupy
the subject lots in order that they could all live near one
other and help in resolving family problems. By occupying
those lots, petitioners demonstrated their acceptance of the
invitation. Hence, there was a meeting of minds, and an
agreement regarding possession of the lots impliedly arose
between the parties.
The occupancy of the subject lots by petitioners was
not merely ‘something not wholly approved of’ by respon-
dents. Neither did it arise from what Tolentino refers to as
‘neighborliness or familiarity.’ In point of fact, their posses-
sion was upon the invitation of and with the complete ap-
proval of respondents, who desired that their children would
occupy the premises. It arose from familial love and a desire
for family solidarity, which are basic Filipino traits.”
127
See further discussion of this case in supra § 83.1.1.
419 420 PROPERTY
§ 87. Conflict Over Possession de Facto
The law recognizes a situation where the fact of possession
(possession de facto) and the right to such possession (possession
de jure) are in the hands of two different persons, as in the case of
possession exercised in another’s name discussed in supra § 81. Here,
the possession of the agent is for the benefit of the principal. It is the
latter who is therefore deemed as the possessor.
The law likewise recognizes a situation where the owner may
temporarily deprive himself of his right to possess the property as when
he constitutes a usufruct over the same in favor of another person or
when he enters into a contract of lease with a lessee. Here, both the
right of possession and the fact of possession are exercised by the
usufructuary or by the lessee, as the case may be. During the duration
of the usufruct or lease, the usufructuary and the lessee are considered
as the legal possessors of the property.
The law does not, however, recognize the possibility that posses-
sion de facto may reside at the same time in two different personalities
unless they are co-possessors.130 In case of conflict involving the ques-
tion of possession as a fact, the following rules of preference shall gov-
ern:
(1) The present possessor shall be preferred;
(2) If there are two possessors, the one longer in possession is
preferred;
(3) If the dates of possession are the same, the one who presents
a title.
If all the foregoing conditions are equal, the thing shall be placed
in judicial deposit pending determination of its possession or ownership
through proper proceedings.131
In determining who the “present possessor” is, the precepts earlier
discussed in this Chapter shall be taken into consideration. Hence, if the
controversy is between a previous possessor and the actual possessor who
acquires possession through force, violence, intimidation, clandestine
130
Art. 538, NCC.
131
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 421
POSSESSION
Acquisition of Possession
acts not known to the previous possessor, the previous possessor shall
be deemed as the present possessor because his possession was not
affected. The same is true in case of possession by mere tolerance of
the owner, in which case, the actual possessor is not deemed as the
“present possessor” because his possession does not affect the owner’s
possession.
In applying the foregoing rule of preference, the case of Cequeña
v. Bolante132 is instructive. The facts of this case are presented below:
Cequeña v. Bolante
G.R. No. 137944, April 6, 2000
This case involves a parcel of land situated in Binangonan, Rizal and
covered by a tax declaration. Prior to 1954, the land was originally declared
for taxation purposes in the name of Sinforoso Mendoza, father of respondent
Honorata Mendoza Bolante. Sinforoso was the occupant of the said property
until his death in 1930. When Sinforoso died, his brother (Margarito) took
possession of the land and cultivated the same with his son, Miguel. At the
same time, respondent and her mother continued residing on the land. When
respondent came of age in 1948, she paid the realty taxes on the land for the
years 1932 up to 1948. In 1953, Margarito declared the land for taxation
purposes in his name and paid the realty taxes beginning 1952. When Margarito
died, Miguel continued cultivating the land. During the time that Margarito
and Miguel were cultivating the land, respondent and her mother were living
on the same land. In 1985, Miguel was physically ousted from the property by
the respondent. Litigations thereafter ensued between the respondent and the
petitioners (daughters of Margarito and sisters of Miguel) on the question of
who shall be considered as the preferred possessor.
The lower court in the said case ruled in favor of the petitioners on
the strength of the tax declaration of their father (Margarito). On appeal,
the appellate court reversed the ruling of the trial court and ruled that the
respondent was the preferred possessor under Article 538 of the Civil
Code because she was in notorious, actual, exclusive and continuous
possession of the land since 1985. Petitioners disputed this ruling. They
contended that she came into possession through force and violence,
contrary to Article 536 of the Civil Code. On this particular issue, the
Supreme Court made the following pronouncements —
132
G.R. No. 137944, April 6, 2000.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 423
POSSESSION
Acquisition of Possession
father’s tax declaration of the subject lot since 1926, she has
been in possession thereof for a longer period. On the other
hand, petitioners’ father acquired joint possession only in
1952.”
The Court emphasized, however, that Article 538 of the New
Civil Code settles only the question of possession and that possession is
different from ownership. With respect to the question on ownership, the
same should be established in one of the ways provided by law. In this
case, according to the Court, the question of ownership could be settled
by determining who between the claimants has proven acquisitive
prescription. The Court ruled again in favor of the respondent —
“Ownership of immovable property is acquired by
ordinary prescription through possession for ten years. Being
the sole heir of her father, respondent showed through his tax
receipt that she had been in possession of the land for more
than ten years since 1932. When her father died in 1930,
she continued to reside there with her mother. When she got
married, she and her husband engaged in kaingin inside the
disputed lot for their livelihood.
Respondent’s possession was not disturbed until
1953 when the petitioners’ father claimed the land. But by
then, her possession, which was in the concept of owner,
public, peaceful, and uninterrupted had already ripened
into ownership. Furthermore she herself, after her father’s
demise, declared and paid realty taxes for the disputed land.
Tax receipts and declarations of ownership for taxation, when
coupled with proof of actual possession of the property, can
be the basis of a claim for ownership through prescription.
In contrast, the petitioners, despite thirty-two years of
farming the subject land, did not acquire ownership. It is
settled that ownership cannot be acquired by mere occupation.
Unless coupled with the element of hostility toward the true
owner, occupation and use, however long, will not confer
title by prescription or adverse possession. Moreover, the
petitioners cannot claim that their possession was public,
peaceful and uninterrupted. Although their father and
brother arguably acquired ownership through extraordinary
422 PROPERTY
“We concede that despite their dispossession in 1985,
the petitioners did not lose legal possession because posses-
sion cannot be acquired through force or violence. To all in-
tents and purposes, a possessor, even if physically ousted,
is still deemed the legal possessor. Indeed, anyone who can
prove prior possession, regardless of its character, may re-
cover such possession.”
After making the said ruling, the Court did not, however, consider
the petitioners as the preferred possessors. Neither did the Court consider
the petitioners as the present possessors. This is due to the fact that the
possession by the petitioners and/or their predecessors-in-interest was
not exclusive. The Court explained —
However, possession by the petitioners does not
prevail over that of the respondent. Possession by the former
before 1985 was not exclusive, as the latter also acquired it
before 1985. The records show that the petitioners’ father
and brother, as well as the respondent and her mother were
simultaneously in adverse possession of the land.
Before 1985, the subject land was occupied and
cultivated by the respondent’s father (Sinforoso), who was
the brother of petitioners’ father (Margarito), as evidenced
by Tax Declaration No. 26425. When Sinforoso died in
1930, Margarito took possession of the land and cultivated
it with his son Miguel. At the same time, respondent and her
mother continued residing on the lot.
When respondent came of age in 1948, she paid realty
taxes for the years 1932-1948. Margarito declared the lot for
taxation in his name in 1953 and paid its realty taxes beginning
1952. When he died, Miguel continued cultivating the land.
As found by the CA, the respondent and her mother were
living on the land, which was being tilled by Miguel until
1985 when he was physically ousted by the respondent.
In resolving the issue of possession, the Court eventually ruled in
favor of the respondent because she has been in possession for a longer
period. The Court thus held —
“Based on Article 538 of the Civil Code, the respon-
dent is the preferred possessor because, benefiting from her
424 PROPERTY
prescription because of their adverse possession for thirty-
two years (1953-1985), this supposed ownership cannot
extend to the entire disputed lot, but must be limited to the
portion that they actually farmed.”
Chapter 3
EFFECTS OF POSSESSION
Art. 539. Every possessor has a right to be respected in his pos-
session; and should he be disturbed therein he shall be protected in or
restored to said possession by the means established by the laws and the
Rules of Court.
A possessor deprived of his possession through forcible entry may
within ten days from the filing of the complaint present a motion to se-
cure from the competent court, in the action for forcible entry, a writ of
preliminary mandatory injunction to restore him in his possession. The
court shall decide the motion within thirty (30) days from the filing there-
of. (446a)
§ 88. Right to Protection of Possessors
[88.1] Protects Every Kinds of Possessors
The Civil Code considers possession as an outward sign of
ownership,133 it having all the appearances of ownership. For this reason,
the law renders protection to every possessors134 whether owners or not.
According to the Supreme Court, the phrase “every possessor” in the
article indicates that all kinds of possession, from that of the owner to
that of a mere holder, except that which constitutes a crime, should
be respected and protected by the means established and the laws of
procedure.135
The protection is given because the Civil Code assumes that
the possessor of a thing is the owner136 and also because even if the
possessor is not the owner, his situation should be protected until it
133
U.S. v. Rapinan, 1 Phil. 294.
134
Art. 539, NCC.
135
Phil. Trust Co. v. CA, 320 SCRA 719 (1999), citing II Tolentino, Civil Code, 241 (1987),
citing 3 Sanchez-Roman 438-439, 2 Navarro Amandi 170 and 4 Manresa 214.
136
See Art. 433, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 425
POSSESSION
Effects of Possession
is shown that there is another person with a better right.137 The fact of
possession in itself, therefore, has a positive value and is endowed with
a distinct standing of its own in the law of property.138 True, by this
principle of respect for the possessory status, a wrongful possessor may
at times be upheld by the courts, but this is only temporary and for one
sole and special purpose, namely, the maintenance of public order.139
The protection is only temporary because it is intended that as soon as
the lawless act of dispossession has been suppressed, the question of
ownership or of possession de jure is to be settled in the proper court
and in a proper action.140 The larger and permanent interests of property
require that such rare and exceptional instance of preference in the
courts of the actual but wrongful possessor be permitted.141
[88.2] Actions to Recover Possession
As discussed in supra § 35, any lawful possessor, not only the
owner, may resort to reasonable force to repel or prevent an actual or
threatened unlawful physical invasion or usurpation of the property in
his possession. But this doctrine can only be invoked at the time of
actual or threatened dispossession, and not when possession has already
been lost.142 In the latter case, the owner must resort to judicial process
for the recovery of the property as required in Article 536 of the New
Civil Code.143 Pursuant to this article, he who believes that he has an
action or a right to deprive another of the holding of a thing must invoke
the aid of the competent court, if the holder should refuse to deliver
the thing. This article is complemented by the present article (Article
539) which grants to possessors the right not only to be protected in his
possession, but likewise the right to be restored to said possession in
case of disturbance by the means established by the laws and the Rules
of Court.
The available actions for the purpose of implementing the provisions
of the present article are already discussed in supra § 34.2. In addition,
137
II Caguioa, Civil Code, 1966 ed., 165.
138
Manuel v. CA, G.R. No. 95469, July 25, 1991.
139
Id.
140
Id.
141
Id.
142
German Management & Services, Inc. v. CA, 177 SCRA 495 (1989).
143
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 427
POSSESSION
Effects of Possession
possession but not in unlawful detainer. However, in cases of unlawful
detainer, the issuance of a preliminary writ of mandatory action can
be availed of on appeal to the higher court in case the appeal of the
lessee is frivolous or dilatory or the appeal of the lessor is prima facie
meritorious.147
According to retired Justice Florenz Regalado, with the enactment
of B.P. Blg. 129, specifically Section 33(1) thereof, an inferior court has
jurisdiction to issue a writ of preliminary injunction in either forcible
entry or unlawful detainer cases.148 Under the 1997 Rules of Civil
Procedure, it has now been made clear that the provisional remedy of
writ of preliminary mandatory injunction is available at the start of the
action in both forcible entry and unlawful detainer cases. Under the
new rules, the said remedy is also available on appeal to the Regional
Trial Court whether the action is for forcible entry or unlawful detainer.
Sections 15 and 20 of the 1997 Rules of Civil Procedure now provide:
“Sec. 15. Preliminary injunction. — The court may grant
preliminary injunction, in accordance with the provisions of
Rule 58 hereof, to prevent the defendant from committing
further acts of dispossession against the plaintiff.
A possessor deprived of his possession through forcible
entry or unlawful detainer may, within five (5) days from the
filing of the complaint, present a motion in the action for
forcible entry or unlawful detainer for the issuance of a writ
of preliminary mandatory injunction to restore him in his
possession. The court shall decide the motion within thirty
(30) days from the filing thereof. (3a)
Sec. 20. Preliminary mandatory injunction in case
of appeal. — Upon motion of the plaintiff, within ten (10)
days from the perfection of the appeal to the Regional Trial
Court, the latter may issue a writ of preliminary mandatory
injunction to restore the plaintiff in possession if the court is
satisfied that the defendant’s appeal is frivolous or dilatory
or that the appeal of the plaintiff is prima facie meritorious.
(9a)”
147
Art. 1674, NCC.
148
I Regalado, Remedial Law Compendium, 6th ed., 46, 786.
426 PROPERTY
the law also allows as an auxiliary remedy the writ of preliminary
mandatory injunction to prevent further acts of dispossession.
[88.3] Writ of Preliminary Mandatory Injunction
A writ of preliminary mandatory injunction is a judicial writ, a
form of provisional remedy, granted at any stage of an action prior
to judgment or final order therein commanding or requiring the
performance of a particular act. Prior to the promulgation of the New
Civil Code, it was deemed improper to issue a writ of preliminary
injunction where the party to be enjoined had already taken complete
material possession of the property involved.144 Said remedy was allowed
then only for the purpose of preventing further acts of dispossession.145
However, with the enactment of Article 539 of the New Civil Code, the
plaintiff in forcible entry case has since been allowed to avail of a writ
of preliminary mandatory injunction to restore him in his possession
during the pendency of his action to recover possession. The second
paragraph of Article 539 provides:
“Art. 539. xxx
A possessor deprived of his possession through forcible
entry may within ten days from the filing of the complaint
present a motion to secure from the competent court, in the
action for forcible entry, a writ of preliminary mandatory
injunction to restore him in his possession. The court shall
decide the motion within thirty (30) days from the filing
thereof. (446a)”
The Code Commission justifies the shift in the rule in the following
words: “The writ of preliminary injunction is called for by the fact that
there are at present prolonged litigations between the owner and the
usurper, and the former is frequently deprived of his possession even
when he has an immediate right thereto.”146
Pursuant to the afore-quoted provisions, the remedy of writ of
preliminary injunction can be availed of at the start of the action only
in cases of forcible entry for the purpose of restoring the plaintiff in
144
Torre, et al. v. Hon. J. Querubin, et al., 101 Phil. 53 (1957).
145
Devesa v. Arbes, 13 Phil. 273; Delgado v. Carael, 37 Phil. 161.
146
Report of the Code Commission, 98.
428 PROPERTY
Comparing the provisions of the present rules above-quoted with
the provisions of the second paragraph of Article 539 and Article 1674
of the New Civil Code, the following are the notable changes: (1) the
remedy of writ of preliminary mandatory injunctions is now available
at the start of the action in both forcible entry and unlawful detainer
cases; (2) the period for the filing of the motion for issuance of the writ
at the start of the action has been reduced to five (5) days from ten (10)
days counted from the time of the filing of the complaint; (3) the same
remedy is now available on appeal to the RTC whether the action is
for forcible entry or unlawful detainer; and (4) the remedy is no longer
limited, on appeal, to causes of action which arise from the contract of
lease. Hence, the rules stated in Articles 539 and 1674 in connection
with the issuance of a writ of preliminary mandatory injunction now
appear to have been modified.
Art. 540. Only the possession acquired and enjoyed in the concept
of owner can serve as a title for acquiring dominion. (447)
Art. 541. A possessor in the concept of owner has in his favor the
legal presumption that he possesses with a just title and he cannot be
obliged to show or prove it. (448a)
Art. 542. The possession of real property presumes that of the mov-
ables therein, so long as it is not shown or proved that they should be
excluded. (449)
§ 89. Possession in the Concept of Owner
The following are the effects of possession in the concept of
owner:
(1) It raises a disputable presumption of ownership (Art. 433,
NCC).
(2) It creates a disputable presumption that the possessor has just
title and he cannot be obliged to show it. (Art. 541, NCC)
(3) It can ripen into ownership through acquisitive prescription
(Art. 540, NCC), subject to the additional requirements under
Article 1118 of the Civil Code.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 429
POSSESSION
Effects of Possession
[89.1] Presumption of Just Title
Actual possession under claim of ownership raises a disputable
presumption of ownership.149 In addition, the possessor in the concept
of owner (en concepto de dueño) has in his favor the legal presumption
that he possesses with a just title and he cannot be obliged to show it.150
This presumption can be availed of by the possessor in cases where
another person claims a better right over the property. In action reivin-
dicatoria, for example, the person who claims that he has a better right
to the property has the burden of proving his title, in addition to proving
the identity of the land claimed.151 In other words, the plaintiff must rely
on the strength of his own title, not on the weakness of the defendant’s
title152 because the latter enjoys the presumption of just title which he
cannot be obliged to show.
The presumption, however, is disputable and may be rebutted by
proof to the contrary. So long as the person claiming a better right is
unable to prove his own title, the presumption prevails in favor of the
possessor en concepto de dueño. Hence, the latter is not even required
to prove his title. If such other person, however, prevails in overthrow-
ing the presumption by proving the existence of his title upon which
the claim is based, the possessor is now obliged to show and prove his
title.
The presumption of the existence of a just title in favor of the
possessor en concepto de dueño may not be availed by him for the
purpose of acquiring ownership through acquisitive prescription. For
the latter purpose, the law requires that the just title of the possessor
must be proved:
“Art. 1131. For the purposes of prescription, just title
must be proved; it is never presumed.” (New Civil Code)
[89.2] Meaning of “Just Title”
Although the wordings of Article 541 seem to suggest that the
term “just title” refers to written documents, it must not be interpreted
in such restricted sense. The term “just title” should be construed as
149
Art. 433, NCC.
150
Art. 541, NCC.
151
Art. 434, NCC.
152
Huchison v. Buscas, G.R. No. 158554, May 26, 2005.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 431
POSSESSION
Effects of Possession
trial, a decision was rendered in favor of the heirs of Jose Marcelo; however,
on appeal to the Court of Appeals, the same was reversed. Hence, this petition
assailing the decision of the Court of Appeals which ruled that the action initi-
ated by Marcelo’s heirs would not prosper on the theory that Flores already has
acquired ownership of the disputed land by ordinary acquisitive prescription.
According to Marcelo’s heirs, the parcel of land subject of litigation was
originally owned by Jose Marcelo and they had been in continuous possession
thereof since 1939. In 1967, they discovered that a portion of said property had
been encroached upon by Cruz, but Cruz still sold his property, including the
encroached parcel of land to Flores. Cruz, however, alleged that the disputed
land is part of the land he acquired in 1960 from the heirs of Jorge Sarmiento,
which he (Cruz) had surveyed and declared for taxation purposes. Then, in
1968, he sold the whole lot to Flores who then occupied and cultivated the
same.
The contract executed by Cruz and the heirs of Sarmiento includes the
encroached property, as found by the trial court and the appellate court. And
when Cruz sold the land to Flores, the latter immediately took possession
of the same to the exclusion of all others and promptly paid the realty taxes
thereon. From that time on, Flores had been in possession of the entire area
in the concept of an owner and holding it in that capacity for almost 14 years
before the heirs of Marcelo initiated their complaint in 1982. The records of
the case supported the holding of the appellate court that the requirements
for ordinary prescription have been duly met Flores took possession of the
controverted property in good faith and with just title because the said portion
was an integral part of the bigger tract of land which he bought from Cruz.
Further, Flores’ possession was not only in the concept of an owner but also
public, peaceful and uninterrupted. Hence, the Court found no cogent reasons
to reverse the findings of the appellate court and thus gave its affirmance to the
assailed decision.
Art. 543. Each one of the participants of a thing possessed in com-
mon shall be deemed to have exclusively possessed the part which may
be allotted to him upon the division thereof, for the entire period dur-
ing which the co-possession lasted. Interruption in the possession of the
whole or a part of a thing possessed in common shall be to the prejudice
of all the possessors. However, in case of civil interruption, the Rules of
Court shall apply. (450a)
§ 90. Co-possession
As discussed in supra § 87 in relation to Article 538, the law
does not recognize the possibility of possession de facto residing at the
430 PROPERTY
referring to that which is legally sufficient to transfer ownership of the
thing or the real right to which it relates.153 Consequently, it may be
proved orally by witnesses as well as through written documents or
evidences.
[89.3] In Relation to Acquisitive Prescription
Acquisitive prescription is a mode of acquiring ownership by a
possessor through the requisite lapse of time.154 In order to ripen into
ownership, possession must be in the concept of an owner, public,
peaceful and uninterrupted.155 Only possession acquired and enjoyed
in the concept of owner, therefore, can serve as a title for acquiring
dominion.156 Thus, mere possession with a juridical title, such as by a
usufructuary, a trustee, a lessee, an agent or a pledgee, not being in
the concept of an owner, cannot ripen into ownership by acquisitive
prescription, unless the juridical relation is first expressly repudiated
and such repudiation has been communicated to the other party.157 Acts
of possessory character executed due to license or by mere tolerance of
the owner would likewise be inadequate.158 Possession, to constitute the
foundation of a prescriptive right, must be en concepto de dueño, or, to
use the common law equivalent of the term, that possession should be
adverse, if not, such possessory acts, no matter how long, do not start
the running of the period of prescription.159
Marcelo v. Court of Appeals
305 SCRA 800 (1999)
The heirs of the deceased Jose Marcelo filed with the RTC an action
to recover a portion of an unregistered land in Sta. Lucia, Angat, Bulacan.
They alleged that two parcels of land, owned by the late Jose Marcelo and his
spouse, had been encroached by Fernando Cruz and Servando Flores. After
153
154
4 Manresa 245-246; 248, cited in II Tolentino, Civil Code, 1992 ed., 283-284.
Esguerra v. Manantan, G.R. No. 158328, February 23, 2007; see also Marcelo v. Court
of Appeals, 305 SCRA 800, 807-808 (1999).
155
Art. 1118, NCC.
156
Art. 540, NCC.
157
Esguerra v. Manantan, supra; also in Marcelo v. Court of Appeals, supra, citing Mari-
ategui v. CA, 205 SCRA 337; Adille v. CA, 157 SCRA 455; Bargayo v. Camumot, 40 Phil. 857;
Laguna v. Levantino, 71 Phil. 566.
158
Art. 1119, NCC.
159
Esguerra v. Manantan, supra; also in Marcelo v. Court of Appeals, supra.
432 PROPERTY
same time in two different personalities unless they are co-possessors.160
Of course, the concept of co-possession implies that the thing subject
matter thereof is undivided and there are two or more possessors. If the
co-possession is under claim of ownership, each of the co-possessors is
considered as the possessor of the whole and over the whole each may
exercise the right of possession, subject to the similar right of the other
co-possessors. This state of affairs will last until the partition of the
property. In the event of partition, however, each of the co-possessors
shall be deemed to have exclusively possessed the part which may
be allotted to him for the entire period that the state of co-possession
lasted.161 However, any interruption in the possession of the whole or
part of a thing possessed in common shall be to the prejudice of all the
co-possessors.162
The foregoing principles may be illustrated as follows: “A,” “B”
and “C” are co-possessors of a parcel of land under claim of ownership
and in good faith for a period of eleven years, the possession being
exercised through “C.” On the eleventh year, the co-possessors divided
the property in three equal parts, each taking exclusive possession of
their part after the division. Two years after the partition, “C” died.
During his lifetime, “C” disposed of the property allotted to him.
After his death, however, his heirs filed an action against “A” and
“B” claiming ownership of a portion of said property on the ground
that their predecessor-in-interest was the actual possessor of the same
and became the exclusive owner thereof through ordinary acquisitive
prescription. In this case, the claim of the heirs will not prosper since
“A” and “B” will be deemed as the exclusive possessors of the part
allotted to them during the eleven years that the co-possession lasted.
Under the law, “C” is deemed as never to have possessed at all the parts
allotted to “A” and “B.”
In case of interruption, the law says that the same shall affect
the interest of all. This may be illustrated as follows: “A,” “B” and
“C” are co-possessors of a parcel of land under claim of ownership,
the possession being exercised through “C” for a period of six years.
On the seventh year, “X” took possession of one-third of the area of
160
Art. 538, NCC.
161
Art. 543, NCC.
162
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Effects of Possession
the land in the concept of owner and adverse to the interest of the co-
possessors and continued to possess the same until the co-possessors
decided to divide the property possessed in common on the eleventh
year. In this situation, the interruption of possession in connection with
one third of the area of the land will prejudice not only “C” but all the
co-possessors. Hence, the co-possessors can claim ownership only of
two-third of the area through acquisitive prescription and only this area
can be the subject of partition among the co-possessors.
Art. 544. A possessor in good faith is entitled to the fruits received
before the possession is legally interrupted.
Natural and industrial fruits are considered received from the time
they are gathered or severed.
Civil fruits are deemed to accrue daily and belong to the possessor
in good faith in that proportion. (451)
Art. 545. If at the time the good faith ceases, there should be any
natural or industrial fruits, the possessor shall have a right to a part of the
expenses of cultivation, and to a part of the net harvest, both in propor-
tion to the time of the possession.
The charges shall be divided on the same basis by the two pos-
sessors.
The owner of the thing may, should he so desire, give the possessor
in good faith the right to finish the cultivation and gathering of the grow-
ing fruits, as an indemnity for his part of the expenses of cultivation and
the net proceeds; the possessor in good faith who for any reason what-
ever should refuse to accept this concession, shall lose the right to be
indemnified in any other manner. (452a)
§ 91. Right of Possessors to Fruits
As discussed in supra § 41.1, the general rule with respect to the
ownership of the fruits is that the same belong to the owner pursuant to
the law on accesion discreta embodied in Article 441 of the New Civil
Code. Now, whether the possessor is in good faith or in bad faith, he
is not the true owner of the property in his possession because there
is a flaw or defect in his title or mode of acquisition which has the
effect of invalidating it — the only difference between these two kinds
of possessors is that the former is not aware of the existence of such
flaw or defect while the latter is aware of the same. Since the possessor
(whether in good faith or in bad faith) is not the true owner, a question
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Effects of Possession
Consequently, possession in good faith ceases from the moment defects
in the title are made known to the possessors, by extraneous evidence or
by suit for recovery of the property by the true owner.164 Whatever may
be the cause or the fact from which it can be deduced that the possessor
has knowledge of the defects of his title or mode of acquisition, it must
be considered sufficient to show bad faith.165 Hence, the interruption
of good faith on the part of the possessor need not occur by reason of
initiation of legal proceedings. This is also discussed in supra § 83.3.
In Tacas v. Tobon,166 the Supreme Court held that if there are no
other facts from which the interruption of good faith may be determined,
and an action is filed to recover possession, good faith ceases from the
date of receipt of the summons to appear at the trial and if such date
does not appear in the record, that of the filing of the answer would
control.167 In other words, it is only in case of absence of facts from
which the interruption of good faith may be determined that Article 544
shall apply, in the sense that such interruption shall be by way of “legal
interruption,” and which is reckoned from the date of receipt of the
summons or from the filing of the answer, as the case may be.
[91.3] When Fruits Considered “Received”
As to when fruits are considered “received” shall, of course, depend
on the kind of fruits involved. With respect to natural and industrial
fruits, they are considered received from the time that they are gathered
or severed. With regard to civil fruits, they are deemed to accrue daily.
Hence, the possessor in good faith shall be entitled only to those which
have accrued prior to the interruption of his good faith. To illustrate:
The property is being rented out by the possessor in good faith and
the rent is being paid on a monthly basis in the amount of P30,000.00.
Let us say, for example, that the possessor in good faith received the
summons on the 11th day of the month of October, he will nonetheless
be entitled to get his share of the rental payment for that month in the
164
Ortiz v. Kayanan, 92 SCRA 146 (1979).
165
Wong v. Carpio, 203 SCRA 118 (1991).
166
53 Phil. 356 (1929); see also Mindanao Academy, Inc. v. Yap, 13 SCRA 190 (1965);
Ortiz v. Cayanan, 92 SCRA 146 (1979); Wong v. Carpio, 203 SCRA 118 (1991); Maneclang v.
Baun, 208 SCRA 179 (1992); Suobiron v. CA, 250 SCRA 184 (1995) and Ballesteros v. Abion,
G.R. No. 143361, February 9, 2006.
167
Maneclang v. Baun, 208 SCRA 179 (1992).
433 434 PROPERTY
will arise with respect to his rights over the fruits. This question is
answered by the provisions of Articles 544, 545 and 549 of the New
Civil Code. Pursuant to these articles, the rights of possessors in relation
to the fruits shall depend on his good faith or bad faith and on whether
such fruits have already been received by him or are still pending:
I. Possessor in Good Faith
A. Fruits Already Received
[91.1] Rule
The rights of a possessor in good faith in relation to fruits already
gathered or severed by him are governed by the provision of Article 544
of the New Civil Code. It is clear that this article applies to situations
where the fruits have already been gathered since the provision speaks
of “fruits received.” Pursuant to this article, the possessor in good faith
is entitled to the fruits received by him before his possession is legally
interrupted. This is one of the exceptions to the rule embodied in Article
441 of the New Civil Code. In other words, this is one of the instances
where the owner is not entitled to the fruits.
[91.2] Interruption of Good Faith
From the wordings of Article 544, it may appear that the
interruption of good faith is required to be “legal” in nature in order
for the possessor in good faith to lose his entitlement over the fruits.
But this is not necessarily so. The provision of this article must be read
in conjunction with the provisions of Articles 549 and 528 of the New
Civil Code. In Article 549, it is clear that a possessor in bad faith has
no right over the fruits received by him. In Article 528, on the other
hand, it is stated that the possession in good faith loses its character
as such, and therefore turns into bad faith, “in the case and from the
moment that facts exist which show that the possessor is not unaware
that he possesses the thing improperly or wrongly.” In other words,
every possessor in good faith becomes a possessor in bad faith from the
moment he becomes aware that what he believed to be true is not so.163
163
Ballesteros v. Abion, G.R. No. 143361, February 9, 2006, citing Tacas v. Tobon, 53 Phil.
356 (1929).
435 436 PROPERTY
amount of P10,000.00, representing the rent which accrued prior to the
interruption of his good faith.
B. Pending Fruits
[91.4] Rule
The rights of a possessor in good faith in relation to natural and
industrial fruits which are still pending — or those that have not yet
been gathered or severed — are governed by the provisions of Article
545 of the New Civil Code. Note that the concept of pending fruits can
only apply to natural and industrial fruits but not to civil fruits since the
latter accrue on a daily basis.
According to Article 545, if at the time the good faith ceases,
there should be pending natural or industrial fruits, the possessor and
the owner shall have a right to a part of the net harvest and each shall
divide the expenses of cultivation, both in proportion to the time of their
respective possessions. If the owner does not want to pay his share of
the expenses incurred in connection with the cultivation, he may, at his
option, allow the possessor to finish the cultivation and gathering of
the growing fruits (in lieu of his part of such expenses), in which case,
the owner will not have any share in the harvest. If the owner chooses
this option and the possessor refuses to accept the concession “for any
reason whatever,” the latter shall lose the right to be indemnified in any
other manner. In other words, the possessor must accept the owner’s
choice otherwise he will lose the right to be indemnified and this rule
will apply even if the value of the fruits are less than the amount of the
expenses incurred.
With respect to charges, the same shall also be divided by the
possessor and the owner, in proportion to the time of their respective
possessions. According to Manresa,168 the term “charges” in Article 545
is understood to be those expenses incurred not on the thing itself, but
because of it or on account of it. An example of charges are the taxes
incurred, whether on the capital or on the fruits.
168
4 Manresa, 5th ed., 243.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 437
POSSESSION
Effects of Possession
[91.5] Rules Do Not Apply to Trees
The rules discussed above (supra §§ 91.1 up to 91.4) are applicable
only to fruits as these terms are defined in Article 442 of the New Civil
Code. Said rules do not ordinarily apply to trees because the latter are
not considered as fruits unless they are being exploited for an industry,
in which case, they are classified as industrial fruits.169 Hence, with
respect to trees that are not being exploited for an industry which may
have been planted by the possessor in good faith, the rules on accesion
industrial shall apply, taking also into considerations the good faith or
bad faith of the landowner.
II. Possessor in Bad Faith
A. Fruits Already Received
[91.6] Rule
The possessor is entitled to the fruits so long as he is in good
faith.170 Ergo, if the possessor is in bad faith he is not entitled to the
same whether the fruits have already been received by him or are still
pending. With respect to fruits that have been gathered and received by
a possessor in bad faith, the provision of Article 549 applies:
“Art. 549. The possessor in bad faith shall reimburse
the fruits received and those which the legitimate possessor
could have received, and shall have a right only to the
expenses mentioned in paragraph 1 of Article 546 and in
Article 443. The expenses incurred in improvements for
pure luxury or mere pleasure shall not be refunded to the
possessor in bad faith, but he may remove the objects for
which such expenses have been incurred, provided that the
thing suffers no injury thereby, and that the lawful possessor
does not prefer to retain them by paying the value they may
have at the time he enters into possession. (445a)”
Under this article, the possessor in bad faith shall have the obliga-
tion to reimburse not only the fruits actually received by him but also
169
3 Manresa, 6th ed., p. 191.
170
Aquino v. Tañedo, 39 Phil. 517; Alcala v. Hernandez, 32 Phil. 628; Tolentino v. Vitug, 39
Phil. 126; Calma v. Calma, 56 Phil. 102.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 439
POSSESSION
Effects of Possession
the possessor in bad faith if the fruits have already been received by the
latter. However, the possessor in bad faith is still entitled to recover the
necessary expenses incurred by him for the preservation of the land175 or
the thing176 which bore the fruit.
[91.8] Rule With Respect to Trees
For trees that were planted by the builder in bad faith, the rules on
accesion industrial will apply. Hence, in connection with these trees,
the landowner may exercise the options discussed in supra § 48.2.
Art. 546. Necessary expenses shall be refunded to every possessor;
but only the possessor in good faith may retain the thing until he has
been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good
faith with the same right of retention, the person who has defeated him in
the possession having the option of refunding the amount of the expens-
es or of paying the increase in value which the thing may have acquired
by reason thereof. (453a)
Art. 547. If the useful improvements can be removed without dam-
age to the principal thing, the possessor in good faith may remove them,
unless the person who recovers the possession exercises the option un-
der paragraph 2 of the preceding article. (n)
Art. 548. Expenses for pure luxury or mere pleasure shall not be re-
funded to the possessor in good faith; but he may remove the ornaments
with which he has embellished the principal thing if it suffers no injury
thereby, and if his successor in the possession does not prefer to refund
the amount expended. (454)
Art. 549. The possessor in bad faith shall reimburse the fruits re-
ceived and those which the legitimate possessor could have received,
and shall have a right only to the expenses mentioned in paragraph 1 of
Article 546 and in Article 443. The expenses incurred in improvements for
pure luxury or mere pleasure shall not be refunded to the possessor in
bad faith, but he may remove the objects for which such expenses have
been incurred, provided that the thing suffers no injury thereby, and that
the lawful possessor does not prefer to retain them by paying the value
they may have at the time he enters into possession. (455a)
175
See Art. 452, NCC.
176
See Art. 546, 1st par., NCC, in relation to Art. 549, NCC.
438 PROPERTY
those “which the legitimate possessor could have received.” By fruits
which the legitimate possessor could have received is meant all natural,
industrial or civil fruits which the owner could have received had he
been in possession and which were not so received by the possessor
because of his fraud, abandonment or negligence.171
In connection with the fruits received by the possessor in bad
faith of which he is required to reimburse to the legitimate possessor,
Article 549 of the New Civil Code nonetheless grants the possessor in
bad faith the right to recover from the legitimate possessor the expenses
mentioned in Article 443 of the New Civil Code — expenses for
production, gathering and preservation of the fruits — upon the latter’s
receipt of the reimbursement. As intimated in supra § 42.2, Article 443
will apply regardless of the good faith or bad faith of the possessor. In
addition, the said article will apply irrespective of whether the amount
of the expenses incurred far exceeds the value of the fruits.172
Aside from the expenses mentioned in Article 443, the possessor
in bad faith is likewise entitled to reimbursement for the necessary
expenses incurred by him for the preservation of the land173 or the thing174
which bore the fruit.
B. Pending Fruits
[91.7] Rule
Note that the application of Article 549 is limited only to cases
where the fruits have already been gathered or severed since the article
speaks of “fruits received.” Hence, if the legitimate possessor is able to
recover the property from a possessor in bad faith at a time when the
fruits are still pending, it is not Article 549 that will apply but Article
449 of the New Civil Code. As a consequence, the possessor in bad faith
will not be entitled to any reimbursement of the expenses he incurred
in relation to the fruits, including the expenses he incurred for its
production and preservation because these expenses are reimbursable to
171
See II Caguioa, Civil Code, 1966 ed., 205, citing 4 Manresa, 5th ed., 252-253; Director
of Lands v. Abagat, 53 Phil. 147.
172
See supra § 42.4.
173
See Art. 452, NCC.
174
See Art. 546, 1st par., NCC, in relation to Art. 549, NCC.
440 PROPERTY
§ 92. Right to Necessary, Useful and Ornamental Expenses
[92.1] Kinds of Expenses
The law recognizes three kinds of expenses that possessors of
property may have incurred in connection with his possession thereof,
namely: (1) necessary expenses;177 (2) useful expenses;178 and (3)
expenses for pure luxury or mere pleasure (or ornamental expenses).179
Note that the Civil Code did not define the concept of these three
kinds of expenses but only provide for their effects upon the right of the
possessors. The Spanish Commentators, however, described necessary
expenses as those made for the preservation of the thing180 or those
without which the thing would deteriorate or be lost.181 Our Supreme
Court, on the other hand, defined necessary expenses as those incurred
not for improvement but for the preservation of the thing and are
intended not to increase the value thereof but to prevent it from becoming
useless.182 Following this concept, our Court held that expenses incurred
in the repair of a house which is almost in ruins in order to preserve
it are considered necessary expenses183 while expenses for filling a lot
and building a house thereon cannot be considered necessary expenses
because they do not in any manner tend to preserve the property.184
The concept of necessary expenses under the Civil Code must
have reference to those which are necessary for the preservation of
the existence of the thing itself and not to those which are merely for
the preservation of the possession of the thing.185 As such, land taxes
(real estate taxes) are not considered necessary expenses under the
provisions of Article 546 of the New Civil Code because they are not
for the preservation of the thing itself but only for the preservation of its
possession. Instead, they are regarded as “charges” which the possessor
and owner must bear in proportion to their respective possessions
pursuant to the provision of the second paragraph of Article 545.
177
Art. 546, 1st par., NCC.
178
Arts. 546, 2nd par. and 547, NCC.
179
Arts. 548 and 549, NCC.
180
4 Manresa 258.
181
Scaevola, Comentarios al Codigo Civil, 408.
182
Rivera v. Roman Catholic Archbishop of Manila, 40 Phil. 717.
183
Angeles v. Lozada, 54 Phil. 185.
184
Alburo v. Villanueva, 7 Phil. 277.
185
4 Manresa 271-272.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 441
POSSESSION
Effects of Possession
Useful expenses, on the other hand, are those incurred to give
greater utility or productivity to the property.186 These expenses increase
the value of the thing and result in improvements, called useful
improvements.187 Thus, expenses incurred for the construction of a wall
surrounding the estate, the construction of an irrigation system and the
introduction of improvements in an uncultivated land were classified
as useful expenses by our Court.188 Those incurred for a chapel,189 an
electric system or an elevator in a building,190 a fishpond,191 dining room,
kitchen, closets or bathrooms,192 are also considered useful expenses.
Ornamental expenses or expenses for pure luxury, as distin-
guished from useful expenses, are those which do not increase the pro-
ductiveness of the thing but merely embellish the same. Although ex-
penses for pure luxury also result in improvements (“ornament”), such
improvements, however, are for the convenience of definite possessors
only. In other words, the resulting benefit or advantage is merely acci-
dental or for the benefit only of particular persons. In useful expenses,
on the other hand, the resulting benefit is essential and absolute which
is available to all who may have the thing.
[92.2] Right of Possessors to Necessary Expenses
Whether in good faith or in bad faith, a possessor is entitled to
the refund of necessary expenses incurred by him.193 In addition, a
possessor in good faith is also entitled to retain the thing until he has
been reimbursed therefor.194 Note that this right of retention in relation
to necessary expenses is available only to a possessor in good faith.195 A
possessor in bad faith has no right of retention.
[92.3] Right of Possessors to Useful Expenses
Only the possessor in good faith is entitled to the refund of useful
186
II Tolentino, Civil Code, 1992 ed., 294.
187
See Art. 547, NCC.
188
Valenzuela v. Lopez, 51 Phil. 279.
189
Gongon v. Tiangco, (CA) 36 O.G. 822.
190
4 Manresa 242.
191
Rivera v. Roman Catholic Church, supra.
192
Robles v. Lizarraga, 42 Phil. 584.
193
Art. 546, 1st par., NCC.
194
Id.
195
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 443
POSSESSION
Effects of Possession
of the New Civil Code, only a possessor in good faith may remove
useful improvements if this can be done without damage to the principal
thing and if the person who recovers the possession does not exercise
the option of reimbursing the useful expenses.204
MWSS v. Court of Appeals
143 SCRA 623 (1986)
The City of Dagupan (hereinafter referred to as the CITY) filed a complaint
against the former National Waterworks and Sewerage Authority (hereinafter
referred to as the NAWASA), now the Metropolitan Waterworks and Sewerage
System (hereinafter referred to as MWSS), for recovery of the ownership and
possession of the Dagupan Waterworks System. NAWASA interposed as one
of its special defenses R.A. No. 1383 which vested upon it the ownership,
possession and control of all waterworks systems throughout the Philippines
and as one of its counterclaims the reimbursement of the expenses it had
incurred for necessary and useful improvements amounting to P255,000.00.
Judgment was rendered by the trial court in favor of the CITY on the basis of
a stipulation of facts. The trial court found NAWASA to be a possessor in bad
faith and hence, not entitled to the reimbursement claimed by it. NAWASA
appealed to the then Court of Appeals and argued in its lone assignment of
error that the CITY should have been held liable for the amortization of the
balance of the loan secured by NAWASA for the improvement of the Dagupan
Waterworks System. The appellate court affirmed the judgment of the trial
court. MWSS, successor-in-interest of the NAWASA, appealed to this Court
raising the sole issue of whether or not it has the right to remove all the useful
improvements introduced by NAWASA to the Dagupan Waterworks System,
notwithstanding the fact that NAWASA was found to be a possessor in bad
faith. In support of its claim for removal of said useful improvements, MWSS
argues that the pertinent laws on the subject, particularly Articles 546, 547 and
549 of the Civil Code of the Philippines, do not definitely settle the question of
whether a possessor in bad faith has the right to remove useful improvements.
The Supreme Court held —
“xxx Does a possessor in bad faith have the right to remove
useful improvements? The answer is clearly in the negative.
Recognized authorities on the subject are agreed on this point.
Article 449 of the Civil Code of the Philippines provides that
“he who builds, plants or sows in bad faith on the land of another,
loses what is built, planted or sown without right to indemnity.” As
204
Id.
442 PROPERTY
expenses.196 Stated otherwise, a possessor in bad faith is not entitled to
the refund of useful expenses. In making the refund, the owner (or the
person who has defeated the possessor in good faith in the possession)
has the option: (1) to refund the amount of the expenses; or (2) to pay
the increase in value which the thing may have acquired by reason of
the useful expenses.197
Until the possessor in good faith is reimbursed the useful expenses
in the manner mentioned above, he also enjoys the right to retain the
property.198 This right of retention will be discussed extensively in infra
§ 92.3.1.
The possessor in good faith may, in lieu of reimbursement for
the useful expenses, remove the useful improvement but subject to
compliance with the following requisites:
(1) The removal can be done without damage to the principal
thing.199 By damage, it means that which reduces the value of the thing
and not simply natural damage resulting from the separation of the
accessory and the principal.200 Hence, if only ordinary repairs will be
needed by the separation, the separation will be permissible.201
(2) The owner does not choose to appropriate the improvements
by refunding to the possessor in good faith the useful expenses in the
manner discussed above.202 Stated otherwise, the owner can prevent the
possessor in good faith from removing the useful improvements either
by paying the possessor in good faith the actual amount of the expenses
or the increase in value which the thing may have acquired by reason of
the useful expenses.
Does a possessor in bad faith have the right to remove useful
improvements? The answer is clearly in the negative. Recognized
authorities on the subject are agreed on this point.203 Under Article 547
196
Art. 546, 2nd par., NCC.
197
Id.
198
Id.
199
Art. 547, NCC.
200
II Caguioa, Civil Code, 1966 ed., 202.
201
Id., citing 4 Manresa 260.
202
Art. 547, NCC.
203
MWSS v. CA, 143 SCRA 623, citing Paras (1984) Vol. II, pp. 436-437; Padilla (1972),
Vol. II, pp. 457-458; Caguioa (1966), Vol. II, p. 201; Jurado (1981), Civil Law Reviewer, p. 250;
Tolentino (1972), Vol. II, p. 547.
444 PROPERTY
a builder in bad faith, NAWASA lost whatever useful improvements
it had made without right to indemnity (Santos v. Mojica, Jan. 31,
1969, 26 SCRA 703).
Moreover, under Article 546 of said code, only a possessor
in good faith shall be refunded for useful expenses with the right
of retention until reimbursed; and under Article 547 thereof, only
a possessor in good faith may remove useful improvements if
this can be done without damage to the principal thing and if the
person who recovers the possession does not exercise the option of
reimbursing the useful expenses. The right given a possessor in bad
faith is to remove improvements applies only to improvements for
pure luxury or mere pleasure, provided the thing suffers no injury
thereby and the lawful possessor does not prefer to retain them by
paying the value they have at the time he enters into possession
(Article 549, Id.).”
[92.3.1] Right of Retention
As discussed in supra §§ 92.2 and 92.3, a possessor in good
faith is entitled to retain the thing until he has been reimbursed of the
necessary or useful expenses he incurred. This right of retention has
been considered as one of the conglomerate of measures devised by
the law for the protection of the possessor in good faith.205 Its object
is to guarantee the reimbursement of the expenses, such as those for
the preservation of the property, or for the enhancement of its utility or
productivity.206 It permits the actual possessor to remain in possession
while he has not been reimbursed by the person who defeated him in
the possession for those necessary expenses and useful improvements
made by him on the thing possessed.207 Accordingly, a possessor (or
builder) in good faith cannot be compelled to pay rentals during the
period of retention208 nor be disturbed in his possession by ordering
him to vacate.209 In addition, the owner of the land is prohibited from
offsetting or compensating the necessary and useful expenses with
the fruits received by the builder-possessor in good faith. Otherwise,
the security provided by law would be impaired. This is so because
205
Ortiz v. Cayanan, 92 SCRA 146 (1979); Nuguid v. CA, 452 SCRA 243 (2005).
206
Id.
207
Id.
208
Nuguid v. CA, supra., citing San Diego v. Hon. Montesa, 6 SCRA 208, 210 (1962).
209
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Effects of Possession
the right to the expenses and the right to the fruits both pertain to the
possessor, making compensation juridically impossible; and one cannot
be used to reduce the other.210 Pending reimbursement of the amount due
him, the possessor in good faith is likewise entitled to have his right
recorded in the certificate of title as an encumbrance on the property
so that whoever may get the property will be forewarned of his right to
such retention and refund.211
[92.3.2] How to Determine Value of Useful Improvements
Article 546 does not specifically state how the value of the useful
improvements should be determined. However, this problem was
categorically resolved by the Supreme Court in the case of Pecson v.
Court of Appeals212 where it was held that the “current market value”
of the improvements should be made the basis of reimbursement. In
arriving at this ruling, the Court took notice of the objective of the article
which is to administer justice between the parties involved. Otherwise
stated, the said provision was formulated in trying to adjust the rights of
the owner and possessor in good faith of a piece of land, to administer
complete justice to both of them in such a way as neither one nor the
other may enrich himself of that which does not belong to him.213
[92.4] Right of Possessors to Expenses For Pure Luxury
Whether in good faith or in bad faith, a possessor is not entitled
to a refund of the expenses incurred by him for pure luxury or mere
pleasure, called “ornamental expenses.”214 Both kinds of possessors are
entitled, however, to a right of removal of the ornaments with which
they embellished the principal thing provided that such principal will
suffer no injury.215
If the owner, however, exercises his option to retain possession
of the ornaments by reimbursing the value thereof to the possessor, the
latter’s right of removal may not be exercised. In determining the extent
of the value of the reimbursement, the good faith or bad faith of the
210
Id.
211
Atkins Kroll & Co. v. Domingo, 46 Phil. 362.
212
244 SCRA 407 (1995).
213
Rivera v. Roman Catholic Archbishop of Manila, 40 Phil. 717 (1920), cited in Pecson
v. CA, supra.
214
Arts. 548 and 549, NCC.
215
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Effects of Possession
Art. 550. The costs of litigation over the property shall be borne by
every possessor. (n)
Art. 551. Improvements caused by nature or time shall always in-
sure to the benefit of the person who has succeeded in recovering pos-
session. (456)
Art. 552. A possessor in good faith shall not be liable for the dete-
rioration or loss of the thing possessed, except in cases in which it is
proved that he has acted with fraudulent intent or negligence, after the
judicial summons.
A possessor in bad faith shall be liable for deterioration or loss in
every case, even if caused by a fortuitous event. (457a)
Art. 553. One who recovers possession shall not be obliged to pay
for improvements which have ceased to exist at the time he takes posses-
sion of the thing. (458)
§ 97. Liability of Possessors for Loss or Deterioration
Will a possessor be liable to the owner for any deterioration or
loss suffered by the thing? This question is answered by Article 552 of
the New Civil Code. Pursuant to this article, the possessor’s liability for
loss or deterioration shall depend on his good faith or bad faith. If the
possessor is in good faith, he is not liable at all for the deterioration or
loss of the thing possessed. A possessor in bad faith, on the other hand,
is liable for any deterioration or loss of the thing “in every case” even
when the same is caused by fortuitous event.
As discussed in supra § 91.2, every possessor in good faith,
however, becomes a possessor in bad faith from the moment he becomes
aware that what he believed to be true is not so. If the good faith of the
possessor turns into bad faith upon his becoming aware of the existence
of defects in his title, will he likewise be liable for any deterioration or
loss of the thing possessed by reason of fortuitous event? Article 552
answers this question in the negative. We should distinguish therefore
between a situation where the possessor is originally in bad faith (or in
bad faith from the beginning of his possession) from a situation where
the possessor is originally in good faith but becomes in bad faith upon
learning of the defects in his title. In the first situation, the possessor is
liable even for deterioration or losses caused by fortuitous event. In the
second, the possessor is not so liable. The possessor who is originally
in good faith but becomes in bad faith upon the service of the judicial
summons on him shall be liable for any deterioration or loss of the thing
445 446 PROPERTY
possessor shall be taken into consideration since the amount of such
reimbursement shall vary depending on the possessor’s good faith or
bad faith. If the possessor is in good faith, the extent of the refund shall
be the actual amount expended.216 If the possessor is in bad faith, on
the other hand, the extent of the refund shall be limited to the value
of the ornament at the time the owner enters into the possession of the
property217 irrespective of the amount actually spent by the possessor in
bad faith.
[92.5] Rule on Improvement Caused by Nature
The foregoing discussion in connection with the rights of possess-
ors to “improvements” has reference to improvements caused by the
will of the possessor, such as trees planted by them or buildings con-
structed by them. If the improvements, however, are caused by nature
or by time, the same shall inure to the owner following the law on ac-
cession, without need of indemnifying the possessor in good faith. This
is confirmed by Article 551 of the New Civil Code, which states:
“Art. 551. Improvements caused by nature or time shall
always insure to the benefit of the person who has succeeded
in recovering possession. (456)”
[92.6] Improvements Which Ceased To Exist
In connection with the discussion in supra § 92.3, a possessor in
good faith is entitled to a refund of the useful expenses incurred by him
only if the useful improvement is still existing at the time of the recovery
of the property by the legitimate possessor. If the improvements made
by the possessor in good faith have already ceased to exist at the time
the legitimate possessor recovers possession, the latter is in no way
benefited. Hence, he cannot be obliged to refund the expenses incurred
by the possessor. This rule is embodied in Article 553 of the New Civil
Code:
Art. 553. One who recovers possession shall not be
obliged to pay for improvements which have ceased to exist
at the time he takes possession of the thing. (458)
216
Art. 548, NCC.
217
Art. 549, NCC.
447 448 PROPERTY
possessed only if the same is caused by his negligence or fraudulent
acts.
Art. 554. A present possessor who shows his possession at some
previous time, is presumed to have held possession also during the inter-
mediate period, in the absence of proof to the contrary. (459)
§ 98. Presumption of Continuity of Possession
If the present possessor can show proof that he was also in
possession of the property at some previous time, his possession will
be presumed to be continuous covering even the intermediate period.218
This presumption, however, is merely disputable and may be rebutted
by proof to the contrary.219
If the present possessor, however, succeeds the previous possessor
by hereditary title, his possession is also deemed continuous and without
any interruption from the moment of the death of the decedent.220 Upon
acceptance of the inheritance, the possessor shall be deemed to have
possessed the property continuously and this rule will apply even if he
was not in actual possession of the property at the time of the death of the
decedent and prior to his acceptance. In other words, if the possession
is transmitted by hereditary title, the presumption of continuity of
possession is one which is conclusive and may not be overthrown by
proof to the contrary.
Art. 555. A possessor may lose his possession:
(1) By the abandonment of the thing;
(2) By an assignment made to another either by onerous or gratu-
itous title;
(3) By the destruction or total loss of the thing, or because it goes
out of commerce;
(4) By the possession of another, subject to the provisions of Ar-
ticle 537, if the new possession has lasted longer than one year. But the
real right of possession is not lost till after the lapse of ten years. (460a)
218
Art. 554, NCC.
219
Id.
220
Art. 553, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 449
POSSESSION
Effects of Possession
§ 99. Modes of Losing Possession
Article 555 of the New Civil Code enumerates the causes or modes
by which possession may be lost. From the article, it can be inferred
that possession may be lost either voluntarily — or by reason of the
will of the possessor — or involuntarily — or by reason independent of
the will of the possessor. Paragraphs 1 and 2 of Article 555 provides for
voluntary modes of losing possession while paragraphs 3 and 4 speak
of involuntary modes.
[99.1] Abandonment
He who has a right may renounce it. This act by which thing is
voluntary renounced constitutes an abandonment.221 However, for a
property to be considered abandoned under the law, it is necessary that
the spes recuperandi (hope of recovery or recapture) is gone and the
animus revertendi (intent to recover) is finally given up.222 Certainly,
the possessor of a thing cannot be held to have abandoned the same
until at least he has some knowledge of the loss of its possession or of
the loss of the thing.223 Hence, there is no real intention to abandon a
property when, as in the case of a shipwreck or a fire, things are thrown
into the sea or on the highway.224 To be effective, it is necessary that the
abandonment be made by a possessor in the concept of an owner.225
US v. Laurente Rey
8 Phil. 500 (1907)
In this case, three boxes containing money, amounting to at least 25,000
pesos, were on board the steamer Cantabria. The ship, however, was totally
wrecked off the small Island of Mababuy. Defendant Laurente Rey and several
others discovered the existence and location of the wrecked steamer and took
from the boxes the sum of 15,000 pesos. Defendant Rey was later on charged
with the crime of robbery. For his defense, defendant Rey contended that the
property was abandoned property and therefore, granting that he had taken
possession of the same, he was not guilty of the crime of robbery when he
appropriated it to his own use. When the case reached the Supreme Court, it
221
4 Manresa 291, cited in US v. Rey, 8 Phil. 500 (1907).
222
US v. Rey, supra.
223
Id.
224
4 Manresa 291, cited in US v. Rey, supra.
225
4 Manresa, 5th ed., 277.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 451
POSSESSION
Effects of Possession
when he entered the sunken ship and took therefrom, by force, the
property of another before actual abandonment by the owner and
appropriated the same to his own use, he was, under the provisions
of the Penal Code in force in the Philippine Islands, guilty of the
crime of robbery.”
[99.2] Assignment
Whereas abandonment involves the giving up of possession of a
thing absolutely, without reference to any particular person or purpose
so that the same may now be appropriated by the next comer or finder,
assignment, on the other hand, involves relinquishment of possession
in favor of a definite or specified transferee. It therefore involves
the transfer of all the rights of the possessor to another person. For
assignment to be validly made, it is necessary that the assignor be in the
concept of owner and that he has the capacity to alienate.226
[99.3] Destruction or Loss of the Thing
As a mode of losing possession, destruction or loss may either be
physical or juridical. Hence, it is understood that a thing is lost when
it perishes, or goes out of commerce, or disappears in such a manner
that its existence is unknown or cannot be recovered.227 Since the term is
also used in a juridical sense, a thing is also considered lost when it is
expropriated by the government.228
[99.4] Possession By Another
Under this mode, distinction must be made between possession
as a fact (de facto) and possession as a right (de jure). If the possession
of another lasts for more than one year, only possession de facto is lost
but not the real right of possession (possession de jure).229 Possession
de jure, on the other hand, is not lost until after the lapse of ten (10)
years.230
Based on the foregoing, the material element that determines the
proper action to be filed for the recovery of the possession of a real
226
See 4 Manresa, 5th ed., 277.
227
Art. 1189, par. (2), NCC.
228
4 Manresa, 5th ed., 273.
229
Art. 555(4), NCC.
230
Id.
450 PROPERTY
was held that there was no abandonment of the property and that defendant
Rey was guilty of the crime of robbery. The Court explained —
The evidence shows, if it can be believed, that the defendant
and his companions entered the wrecked ship and removed
therefrom the said money and appropriated the same to his own use
in about twenty-four hours after the time of sinking of the said ship.
Can one be charged with the abandonment of his property without
even knowing that the same has passed out of his possession or has
been lost? We are of the opinion, and so hold, that this question
must be answered in the negative.
Manresa, in his Commentaries upon the provisions of the
Civil Code, says (vol. 4, p. 291):
He who has a right may renounce it. This act by which thing
is voluntary renounced constitutes an abandonment. There is no
real intention to abandon a property when, as in the case of a ship-
wreck or a fire, things are thrown into the sea upon the highway.
Certainly the owner of the property cannot be held to have
abandoned the same until at least he has some knowledge of the
loss of its possession or of the loss of the thing.
Property cannot be considered abandoned under the law and
the possession left vacant for the finder until the spes recuperandi
is gone and the animus revertendi is finally given up. (The Ann L.
Lockwood, 37 Fed. Rep., 233.)
The theory of abandonment on the part of the owners of
the money stolen is fully refuted by the fact that some weeks
after the wreck of the said ship they sent men to the place of the
wreck for the purpose of recovering the property which belonged
to them, which was on board the ship at the time of her sinking.
The mere fact that cargo is sunk with a ship wrecked at sea by no
means deprives the owner of said cargo of his property therein.
The owner certainly still had the right to reclaim such property
and to recover the same if possible. If it should be recovered by
others, the real owner would be entitled to recover its value less the
necessary expense of recovering the same and carrying it shore by
the most approved appliances for that purpose by others. (Murphy
v. Dunham, 38 Fed. Rep., 503.)
If the defendant and his companions had recovered the cargo
from the sunken ship for the benefit of the owners of the same,
he might have been entitled to compensation of his labor, but
452 PROPERTY
property is the length of time of dispossession. Under the Rules of
Court, the remedies of forcible entry and unlawful detainer are granted
to a person deprived of the possession of any land or building by force,
intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or
other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of the right to
hold possession by virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee, or other
person.231 These remedies afford the person deprived of the possession
to file at any time within one year after such unlawful deprivation or
withholding of possession, an action in the proper Municipal Trial
Court against the person or persons unlawfully withholding or depriving
of possession, or any person or persons claiming under them, for the
restitution of such possession, together with damages and costs.232 The
basis of that one year period of prescription under the Rules of Court is
the fourth paragraph of Article 555 of the New Civil Code which states
that possession de facto is lost through another’s possession for a period
longer than one year. Thus, if the dispossession has not lasted for more
than one year, an ejectment proceeding is proper and the inferior court
has jurisdiction.233 On the other hand, if the dispossession lasted for more
than one year, the proper action to be filed is an accion publiciana234
since the real right of possession (possession de jure) is not lost until
after the lapse of ten (10) years. In other words, the right acquired by
the person who has been in possession for one year and one day is only
the right that the former possessor lost by allowing the year and one day
to expire — that is the right to maintain an interdictory action (accion
interdictal).235 The present possessor, as a consequence, can not be made
to answer in an interdictory action. But he can still be made to answer
in a plenary action for the recovery of the real right of possession which
can be brought within a period of ten (10) years.
In relation to the loss of the real right of possession, take note of
the discussions under supra §§ 86.1 to 86.3. It has been discussed under
said sections of this Book that the legal possession is not affected by
231
Sec. 1, Rule 70, 1997 Rules of Civil Procedure.
232
Id.
233
Encarnacion v. Amigo, G.R. No. 169793, Sept. 15, 2006.
234
Id.
235
Bishop of Cebu v. Mangaron, G.R. No. L-1748, June 1, 1906.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 453
POSSESSION
Effects of Possession
acts which are merely tolerated and those executed clandestinely and
without the knowledge of the possessor or through violence as long as
there is a possessor who objects thereto. In the aforesaid circumstances,
only possession as a fact (possession de facto) is affected but not the
real right of possession. As a consequence, the real right of possession
may not be lost through any of said means.
In paragraph 4 of Article 555, what is lost after the lapse of ten
(10) years is possession de jure, not necessarily the ownership of the
property. Ownership and possession are distinct concepts. For ownership
to be lost through possession by another, it must be in the concept of an
owner, public, peaceful and uninterrupted.236 If the possession is in this
nature, the same shall ripen into ownership over a real property after the
lapse of ten years if coupled with a just title or good faith on the part of
the possessor.237 If the possession of this nature last for thirty (30) years,
ownership over a real property is also acquired without need of just title
or of good faith.238
Art. 556. The possession of movables is not deemed lost so long as
they remain under the control of the possessor, even though for the time
being he may not know their whereabouts. (461)
§ 100. Rule With Respect to Misplaced (Mislaid) Movables
Distinction must be made between movables which have been
abandoned and movables which have been misplaced (or mislaid). In
the former, the hope of recovery (spes recuperandi) is already gone and
the intent to recover (animus revertendi) is already given up, but not
so in the latter. When a movable is simply misplaced or mislaid, the
possessor does not automatically lose possession because the movable is
still deemed remaining under his control even though for the time being
he may not know its whereabouts. The rule with respect to possession
of movables is that the same is not lost so long as the movables remain
under the control of the possessor239 and they will be deemed remaining
under his control so long as they are not under the control of another
possessor. Hence, if the misplaced movable is already in the possession
236
Art. 1118, NCC.
237
Art. 1134, NCC.
238
Art. 1137, NCC.
239
Art. 556, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 455
POSSESSION
Effects of Possession
owner except upon proof of loss or illegal deprivation.244 Of course,
when Article 559 speaks of “title” it is not referring to a document but
to any juridical act which gives a means to the acquisition of real right.
For possession of movables to be considered equivalent to title, the
following requisites must be present: (1) the movable property must be
acquired in good faith;245 and (2) the possession must be in the concept
of owner. As a consequence of this principle, when a movable property
is in the possession of one who has acquired it and holds it in good faith,
the true owner cannot recover it as a general rule for the title is valid
even against him. This is the general rule of irrevindicability.
[101.2] Exceptions to Irrevindicability
Pursuant to Article 559, if the owner has lost a thing, or if he has
been unlawfully deprived of it, he has a right to recover it, not only from
the finder, thief or robber, but also from third persons who may have
acquired it in good faith from such finder, thief or robber.246 The said
article establishes two exceptions to the general rule of irrevindicability,
to wit, when the owner: (1) has lost the thing, or (2) has been unlawfully
deprived thereof. In these cases, the possessor cannot retain the thing as
against the owner, who may recover it without paying any indemnity,
except when the possessor acquired it in a public sale.247 Otherwise
stated, the owner can always recover the movable from the possessor
in cases where the same was lost or the owner has been unlawfully
deprived thereof. The only difference is that if the movable has been
acquired by the possessor in good faith at a public sale, the owner can
recover it only upon reimbursement of the price paid by the possessor;248
otherwise, the owner can recover it without paying any indemnity.
According to Senator Tolentino, the “public sale” referred to in
Article 559 which entitles the possessor in good faith to reimbursement,
is one where the has been public notice of the sale and in which anybody
has a right to bid and offer to buy.249
244
Sotto v. Enage (CA), 43 O.G. 5075.
245
Art. 559, 1st par., NCC.
246
Aznar v. Yapdiangco, 13 SCRA 486 (1965).
247
Id., citing Del Rosario v. Lucena, 8 Phil. 535; Varela v. Finnick, 9 Phil. 482; Varela v.
Matute, 9 Phil. 479; Arenas v. Raymundo, 19 Phil. 46. Tolentino, id., Vol. II, p. 261.
248
Art. 559, par. 2, NCC.
249
II Tolentino, Civil Code, 1992 ed., 310.
454 PROPERTY
of another its possession is already deemed lost because it is no longer
under the control of the possessor.
Art. 557. The possession of immovables and of real rights is not
deemed lost, or transferred for purposes of prescription to the prejudice
of third persons, except in accordance with the provisions of the Mort-
gage Law and the Land Registration laws. (462a)
Art. 558. Acts relating to possession, executed or agreed to by one
who possesses a thing belonging to another as a mere holder to enjoy
or keep it, in any character, do not bind or prejudice the owner, unless
he gave said holder express authority to do such acts, or ratifies them
subsequently. (463)
Art. 559. The possession of movable property acquired in good faith
is equivalent to a title. Nevertheless, one who has lost any movable or
has been unlawfully deprived thereof, may recover it from the person in
possession of the same.
If the possessor of a movable lost or of which the owner has been
unlawfully deprived, has acquired it in good faith at a public sale, the
owner cannot obtain its return without reimbursing the price paid there-
for. (464a)
§ 101. Possession of Movables
[101.1] Equivalent to Title
Possession of movables acquired in good faith does not only create
a presumption of ownership but it is already equivalent to title. Unlike
in the case of immovable property where actual possession under claim
of ownership will only create a disputable presumption of ownership240
and that the possessor has a just title,241 the possession of movable
property acquired in good faith is already equivalent to a title,242 thus
dispensing with further proof.243 In the words of the Court of Appeals,
for the purpose of facilitating transactions on movable property, which
are usually done without special formalities, Article 559 of the New
Civil Code establishes not only a mere presumption in favor of the
possessor of the chattel, but an actual right, valid even against the true
240
See Art. 433, NCC.
241
Art. 541, NCC.
242
Art. 559, 1st par., NCC.
243
EDCA Publishing & Distributing Corp. v. Santos, 184 SCRA 614 (1990).
456 PROPERTY
[101.2.1] In Case of Loss
Pursuant to Article 719 of the New Civil Code, if a movable has
been lost (not abandoned), the finder does not immediately become
its owner because there are rules which are required to be followed.
If the finder knows the previous possessor, the movable must be
returned to the latter. If the previous possessor is unknown, the finder
is required to immediately deposit the movable with the mayor of the
city or municipality where the finding has taken place. The mayor is
then required to make a public announcement of such finding for two
consecutive weeks in a manner he deems fit. If after six months, the
owner does not appear, the thing found, or its value, shall be awarded
to the finder. But if the owner appears on time, he shall be obliged to
pay, as a reward to the finder, one-tenth of the sum or of the price of the
thing found.250
If the finder does not comply with these procedural requirements
and appropriate for himself the movable he found, he shall be guilty of
the crime of theft,251 in which case, the owner shall the right to recover
the lost movable from him without need of paying any indemnity.252 The
same rule shall apply even if the movable is already in the possession of
third persons who may have acquired it in good faith from such finder
or thief.253
[101.2.2] In Case of Unlawful Deprivation
The phrase “unlawfully deprived” in Article 559 is susceptible of
two meanings. It may be interpreted in a restrictive sense as referring
only to cases of theft or robbery. This is the view followed by the French
Code254 and adopted by Castan.255 Manresa, on the other hand, is of the
view that the phrase comprehends all acts which constitute a crime
or an offense and which take away from the owner what belongs to
him; all acts of occupation against the will of the possessor and all acts
of disposition of the thing made by a person who is not the owner or
250
Art. 719, NCC.
251
Art. 308, par. (1), RPC.
252
Art. 559, par. 2, NCC.
253
Aznar v. Yapdiangco, 13 SCRA 486 (1965).
254
1 Bonet 234; 2-II Colin & Capitant 947-948.
255
See II Caguioa, Civil Code, 1966 ed., 216.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Effects of Possession
accomplished by his authority.256 In our jurisprudence, it appears that the
latter view of Manresa is the one being followed.257 Hence, the phrase
“unlawfully withheld” in Article 559 is not limited to cases of unlawful
taking but extends to cases where there has been abuse of confidence.
Aznar v. Yapdiangco
13 SCRA 486 (1965)
In May, 1959, Teodoro Santos advertised in two metropolitan papers the
sale of his Ford Fairlane 500. In the afternoon of May 28, 1959, a certain L. De
Dios, claiming to be a nephew of Vicente Marella, went to the Santos residence
to answer the ad. However, Teodoro Santos was out during this call and only
his son, Ireneo Santos, received and talked with De Dios. The latter told the
young Santos that he had come in behalf of his uncle, Vicente Marella, who
was interested to buy the advertised car. On being informed of this, Teodoro
Santos instructed his son Ireneo to see the said Vicente Marella the following
day at his given address. The following day, Ireneo Santos went to the said
address. At this meeting, Marella agreed to buy the car for P14,700.00 on
the understanding that the price would be paid only after the car had been
registered in his name. Pursuant to such condition, Ireneo Santos transferred
the registration of the car in the name of Marella even without the payment of
the purchased price. When Ireneo Santos turned over to Marella the registration
papers and a copy of the deed of sale and demanded for the payment of the
purchase price, Marella begged off to be allowed to secure the money from
a sister supposedly living in another place. Thereafter, Marella ordered L. De
Dios to go to the said sister and suggested that Ireneo Santos go with him.
At the same time, Marella requested the registration papers and the deed of
sale from Ireneo Santos on the pretext that he would like to show them to his
lawyer. Trusting the good faith of Marella, Ireneo handed over the same to the
latter and thereupon, in the company of L. De Dios and another unidentified
person, proceeded to the alleged house of Marella’s sister. At a certain place
on Azcarraga Street, Ireneo Santos and L. De Dios alighted from the car and
entered a house while their unidentified companion remained in the car. Once
inside, L. De Dios asked Ireneo Santos to wait at the sala while he went inside a
room. That was the last that Ireneo saw of him. For, after a considerable length
of time waiting in vain for De Dios to return, Ireneo went down to discover
that neither the car nor their unidentified companion was there anymore. Going
back to the house, he inquired from a woman he saw for L. De Dios and he was
told that no such name lived or was even known therein. Whereupon, Ireneo
256
4 Manresa, 301-302, cited in II Caguioa, Civil Code, 1966 ed., 216.
257
See Cruz v. Pahati, 52 O.G. 3253; Aznar v. Yapdiangco, 13 SCRA 486 (1965).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
POSSESSION
Effects of Possession
Finally, the plaintiff-appellant here contends that inasmuch
as it was the intervenor-appellee who had caused the fraud to be
perpetrated by his misplaced confidence on Vicente Marella, he,
the intervenor-appellee, should be made to suffer the consequences
arising therefrom, following the equitable principle to that effect.
Suffice it to say in this regard that the right of the owner to recover
personal property acquired in good faith by another, is based on
his being dispossessed without his consent. The common law
principle that where one of two innocent persons must suffer by
a fraud perpetrated by another, the law imposes the loss upon the
party who, by his misplaced confidence, has enabled the fraud to
be committed, cannot be applied in a case which is covered by an
express provision of the new Civil Code, specifically Article 559.
Between a common law principle and a statutory provision, the
latter must prevail in this jurisdiction. (Cruz v. Pahati, supra)
Cruz v. Pahati
52 O.G. 3253
Belizo sold the car in question to plaintiff. Belizo was then a dealer in
second hand cars. One year thereafter, Belizo offered the plaintiff to sell the
automobile for him claiming to have a buyer for it. Plaintiff agreed. At that time
plaintiff’s certificate of registration was missing and, upon the suggestion of
Belizo, plaintiff wrote a letter addressed to the Motor Section of the Bureau of
Public Works for the issuance of a new registration certificate alleging as reason
the loss of the one previously issued to him and stating that he was intending
to sell his car. This letter was delivered to Belizo on March 3, 1952. He also
turned over to Belizo the automobile on the latter’s pretext that he was going
to show it to a prospective buyer. On March 7, 1952, the letter was falsified and
converted into an authorized deed of sale in favor of Belizo. Armed with this
deed of sale, Belizo succeeded in obtaining a certificate of registration in his
name on the same date of March 7, 1952, and also on the same date Belizo sold
the car to Felixberto Bulahan who in turn sold it to Renlado Pahati, a second
hand dealer. These facts show that the letter was falsified to enable him to sell
the car to Bulahan for a valuable consideration.
Applying the pertinent legal provisions to the facts of this case, one is
inevitably led to the conclusion that plaintiff has a better right to the car in
question than defendant Bulahan for it cannot be disputed that plaintiff had
been illegally deprived thereof because of the ingenious scheme utilized by
Belizo to enable him to dispose of it as if he were the owner thereof. Nor
can it be pretended that the conduct of plaintiff in giving Belizo a letter to
secure the issuance of a new certificate of registration constitutes a sufficient
defense that could preclude recovery because of the undisputed fact that the
457 458 PROPERTY
Santos rushed to the alleged house of Marella to see the latter. He found the
house closed and Marella gone. Finally, he reported the matter to his father who
promptly advised the police authorities. On that same day, Marella was able to
sell the car in question to Jose B. Aznar for P15,000.00, the latter acting in good
and without notice of the defect appertaining to the vendor’s title. While the car
in question was in the possession of Jose B. Aznar and while he was attending
to its registration in his name, agents of the Philippine Constabulary seized
and confiscated the same in consequence of the report to them by Teodoro
Santos that the said car was unlawfully taken from him. On the question of
whether Teodoro Santos can recover the car from Jose Aznar without need
of indemnifying the latter, the Court ruled in the affirmative applying the
provisions of Article 559 of the New Civil Code. The Court explained —
The lower court was correct in applying Article 559 of the
Civil Code to the case at bar, for under it, the rule is to the effect
that if the owner has lost a thing, or if he has been unlawfully
deprived of it, he has a right to recover it, not only from the finder,
thief or robber, but also from third persons who may have acquired
it in good faith from such finder, thief or robber. The said article
establishes two exceptions to the general rule of irrevindicability,
to wit, when the owner: (1) has lost the thing, or (2) has been
unlawfully deprived thereof. In these cases, the possessor cannot
retain the thing as against the owner, who may recover it without
paying any indemnity, except when the possessor acquired it in a
public sale. (Del Rosario v. Lucena, 8 Phil. 535; Varela v. Finnick,
9 Phil. 482; Varela v. Matute, 9 Phil. 479; Arenas v. Raymundo, 19
Phil. 46. Tolentino, id., Vol. II, p. 261.)
In the case of Cruz v. Pahati, et al., 52 O.G. 3053, this Court
has already ruled that:
Under Article 559 of the new Civil Code, a person illegally
deprived of any movable may recover it from the person in
possession of the same and the only defense the latter may have is
if he has acquired it in good faith at a public sale, in which case, the
owner cannot obtain its return without reimbursing the price paid
therefor. In the present case, plaintiff has been illegally deprived
of his car through the ingenious scheme of defendant B to enable
the latter to dispose of it as if he were the owner thereof. Plaintiff,
therefore, can still recover possession of the car even if it is in the
possession of a third party who had acquired it in good faith from
defendant B. The maxim that “no man can transfer to another a
better title than he had himself” obtains in the civil as well as in
the common law. (U.S. v. Sotelo, 28 Phil. 147)
459 460 PROPERTY
letter was falsified and this fact can be clearly seen by a cursory examination
of the document.
Counsel for appellee places much reliance on the common law principle
that “where one of two innocent parties must suffer by a fraud perpetrated
by another, the law imposes the loss upon the party who, by his misplaced
confidence, has enabled the fraud to be committed,” and contends that as
between plaintiff and Bulahan, the former should bear the loss because of
the confidence he reposed in Belizo which enabled the latter to commit the
falsification. But this principle cannot be applied to this case which is covered
by an express provision of our new Civil Code. Between a common law
principle and a statutory provision, the latter must undoubtedly prevail in this
jurisdiction.
[101.2.3] In Case There Is Transfer of Ownership
The meaning of the term “unlawful deprivation” in Article 559
may not de unduly stretched to cover situations where there is a contract
of purchase and sale between two persons and the buyer therein fails to
pay the purchase price but nonetheless alienates the thing sold in favor
of the present possessor who acted in good faith.258 As a rule, the buyer
in a contact of sale acquires ownership of the thing sold upon actual
or constructive delivery even if the purchase price has not yet been
paid. Since ownership is already transferred to the buyer, he can validly
transfer the thing sold to another person. In this case, the original seller
cannot be said to have been “unlawfully deprived” of the thing sold.
Hence, Article 559 does not apply. The remedy of the unpaid seller,
in this situation, is an ordinary action for collection of sum of money
against the buyer, with recovery of damages.
EDCA Publishing & Distributing Corp. v. Santos
184 SCRA 614 (1990)
On 5 October 1981, a person identifying himself as Professor Jose Cruz
placed an order by telephone with EDCAPublishing and Distributing Corporation
for 406 books, payable on delivery. EDCA prepared the corresponding invoice
and delivered the books as ordered, for which Cruz issued a personal check
covering the purchase price of P8,995.65. On 7 October 1981, Cruz sold 120
of the books to Leonor Santos who, after verifying the seller’s ownership from
258
EDCA Publishing & Distributing Corp. v. Santos, 184 SCRA 614 (1990); Asiatic Com-
mercial Corp. v. Ang, Vol. 40, O.G. S. No. 15, p. 102; Tagatac v. Jimenez, Vol. 53, O.G. No. 12,
p. 3792.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 461
POSSESSION
Effects of Possession
the invoice he showed her, paid him P1,700.00. Meanwhile, EDCA having
become suspicious over a second order placed by Cruz even before clearing
of his first check, made inquiries with the De la Salle College where he had
claimed to be a dean and was informed that there was no such person in its
employ. Further verification revealed that Cruz had no more account or deposit
with the Philippine Amanah Bank, against which he had drawn the payment
check. EDCA then went to the police, which set a trap and arrested Cruz on 7
October 1981. Investigation disclosed his real name as Tomas de la Peña and
his sale of 120 of the books he had ordered from EDCA to Leonor Santos (and
Gerardo Santos, doing business as Santos Bookstore). On the night of said
date 7 October 1981, EDCA sought the assistance of the police in Precinct 5 at
the UN Avenue, which forced their way into Santos Bookstore and threatened
Leonor Santos with prosecution for buying stolen property. They seized the
120 books without warrant, loading them in a van belonging to EDCA, and
thereafter turned them over to EDCA. Protesting this high-handed action, the
Santos spouses sued for recovery of the books after demand for their return was
rejected by EDCA. A writ of preliminary attachment was issued and EDCA,
after initial refusal, finally surrendered the books to the Santos spouses. On the
question of whether EDCA was unlawfully deprived of the books sold to the
Santos couple, the Supreme Court held —
The petitioner argues that it was, because the impostor
acquired no title to the books that he could have validly transferred
to the private respondents. Its reason is that as the payment check
bounced for lack of funds, there was a failure of consideration that
nullified the contract of sale between it and Cruz.
The contract of sale is consensual and is perfected once
agreement is reached between the parties on the subject matter and
the consideration. According to the Civil Code:
Art. 1475. The contract of sale is perfected at the moment
there is a meeting of minds upon the thing which is the object of
the contract and upon the price.
From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the
form of contracts.
xxx xxx xxx
Art. 1477. The ownership of the thing sold shall be transferred
to the vendee upon the actual or constructive delivery thereof.
Art. 1478. The parties may stipulate that ownership in the
thing shall not pass to the purchaser until he has fully paid the
price.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 463
POSSESSION
Effects of Possession
was induced to part with it by reason of the chicanery
practiced on her by Warner L. Feist. Certainly, swin-
dling, like robbery, is an illegal method of deprivation
of property. In a manner of speaking, plaintiff-appel-
lant was “illegally deprived” of her car, for the way
by which Warner L. Feist induced her to part with it is
illegal and is punished by law. But does this “unlawful
deprivation” come within the scope of Article 559 of
the New Civil Code?
xxx xxx xxx
. . . The fraud and deceit practiced by Warner
L. Feist earmarks this sale as a voidable contract
(Article 1390 N.C.C.). Being a voidable contract, it is
susceptible of either ratification or annulment. If the
contract is ratified, the action to annul it is extinguished
(Article 1392, N.C.C.) and the contract is cleansed from
all its defects (Article 1396, N.C.C.); if the contract is
annulled, the contracting parties are restored to their
respective situations before the contract and mutual
restitution follows as a consequence (Article 1398,
N.C.C.).
However, as long as no action is taken by the
party entitled, either that of annulment or of ratifica-
tion, the contract of sale remains valid and binding.
When plaintiff-appellant Trinidad C. Tagatac deliv-
ered the car to Feist by virtue of said voidable contract
of sale, the title to the car passed to Feist. Of course,
the title that Feist acquired was defective and void-
able. Nevertheless, at the time he sold the car to Felix
Sanchez, his title thereto had not been avoided and he
therefore conferred a good title on the latter, provided
he bought the car in good faith, for value and with-
out notice of the defect in Feist’s title (Article 1506,
N.C.C.). There being no proof on record that Felix
Sanchez acted in bad faith, it is safe to assume that he
acted in good faith.
The above rulings are sound doctrine and reflect our own
interpretation of Article 559 as applied to the case before us.
Actual delivery of the books having been made, Cruz ac-
quired ownership over the books which he could then validly
transfer to the private respondents. The fact that he had not yet
462 PROPERTY
It is clear from the above provisions, particularly the last
one quoted, that ownership in the thing sold shall not pass to the
buyer until full payment of the purchase only if there is a stipula-
tion to that effect. Otherwise, the rule is that such ownership shall
pass from the vendor to the vendee upon the actual or constructive
delivery of the thing sold even if the purchase price has not yet
been paid.
Non-payment only creates a right to demand payment or
to rescind the contract, or to criminal prosecution in the case of
bouncing checks. But absent the stipulation above noted, delivery
of the thing sold will effectively transfer ownership to the buyer
who can in turn transfer it to another.
In Asiatic Commercial Corporation v. Ang, the plaintiff sold
some cosmetics to Francisco Ang, who in turn sold them to Tan Sit
Bin. Asiatic not having been paid by Ang, it sued for the recovery
of the articles from Tan, who claimed he had validly bought them
from Ang, paying for the same in cash. Finding that there was no
conspiracy between Tan and Ang to deceive Asiatic the Court of
Appeals declared:
Yet the defendant invoked Article 464 of the
Civil Code providing, among other things that “one
who has been unlawfully deprived of personal property
may recover it from any person possessing it.” We
do not believe that the plaintiff has been unlawfully
deprived of the cartons of Gloco Tonic within the
scope of this legal provision. It has voluntarily parted
with them pursuant to a contract of purchase and sale.
The circumstance that the price was not subsequently
paid did not render illegal a transaction which was
valid and legal at the beginning.
In Tagatac v. Jimenez, the plaintiff sold her car to Feist, who
sold it to Sanchez, who sold it to Jimenez. When the payment
check issued to Tagatac by Feist was dishonored, the plaintiff sued
to recover the vehicle from Jimenez on the ground that she had
been unlawfully deprived of it by reason of Feist’s deception. In
ruling for Jimenez, the Court of Appeals held:
The point of inquiry is whether plaintiff-appel-
lant Trinidad C. Tagatac has been unlawfully deprived
of her car. At first blush, it would seem that she was
unlawfully deprived thereof, considering that she
464 PROPERTY
paid for them to EDCA was a matter between him and EDCA and
did not impair the title acquired by the private respondents to the
books.
One may well imagine the adverse consequences if the
phrase “unlawfully deprived” were to be interpreted in the manner
suggested by the petitioner. A person relying on the seller’s title
who buys a movable property from him would have to surrender it
to another person claiming to be the original owner who had not yet
been paid the purchase price therefor. The buyer in the second sale
would be left holding the bag, so to speak, and would be compelled
to return the thing bought by him in good faith without even the
right to reimbursement of the amount he had paid for it.
It bears repeating that in the case before us, Leonor Santos
took care to ascertain first that the books belonged to Cruz before
she agreed to purchase them. The EDCA invoice Cruz showed
her assured her that the books had been paid for on delivery. By
contrast, EDCA was less than cautious — in fact, too trusting in
dealing with the impostor. Although it had never transacted with
him before, it readily delivered the books he had ordered (by
telephone) and as readily accepted his personal check in payment.
It did not verify his identity although it was easy enough to do this.
It did not wait to clear the check of this unknown drawer. Worse,
it indicated in the sales invoice issued to him, by the printed terms
thereon, that the books had been paid for on delivery, thereby
vesting ownership in the buyer.
Surely, the private respondent did not have to go beyond
that invoice to satisfy herself that the books being offered for sale
by Cruz belonged to him; yet she did. Although the title of Cruz
was presumed under Article 559 by his mere possession of the
books, these being movable property, Leonor Santos nevertheless
demanded more proof before deciding to buy them.
[101.3] Cases Where There Is No Recovery
There are cases where the owner may no longer recover the movable
property even if he has lost the same or he has been unlawfully deprived
thereof. In the following cases, the owner of a movable property who
has lost it or has been unlawfully deprived of it may no longer recover
the thing from the possessor:
(1) If the possessor acquired the thing at a merchant’s store, or
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 465
POSSESSION
Effects of Possession
in fairs, or in markets in accordance with the Code of Commerce and
special laws;259
(2) Where the possessor acquired the thing by sale under statutory
power of sale or under the order of a court of competent jurisdiction;260
(3) When the possessor is a holder in due course of a negotiable
document of title to goods261 or where the owner is barred by the principle
of negotiable instruments;262
(4) Where the owner is barred by reason of his own acts or
neglect from denying the seller’s title;263 and
(5) Where the owner can no longer recover the thing from the
possessor by reason of prescription.264
Art. 560. Wild animals are possessed only while they are under
one’s control; domesticated or tamed animals are considered domestic
or tame, if they retain the habit of returning to the premises of the pos-
sessor. (465)
Art. 561. One who recovers, according to law, possession unjustly
lost, shall be deemed for all purposes which may redound to his benefit,
to have enjoyed it without interruption. (466)
§ 102. Possession of Animals
[102.1] Kinds of Animals Under the Code
From the provisions of Articles 560 of the New Civil Code, in
relation to Article 716, it may be inferred that there are three kinds of
animals: (1) wild, (2) domesticated or tamed, and (3) domestic or tame.
Wild animals are those which are found in their natural freedom, such
as wild boars and horses roaming the forest. Domesticated or tamed an-
imals, on the other hand, are those which were formerly wild but which
have been subdued and retained the habit of returning to the premises
of the possessor or owner.265 Domestic or tame animals are those which
are born or reared under the control and care of man.
259
Art. 1505, No. 3, NCC; Art. 1132, par. 3, NCC.
260
Art. 1505, No. 2, NCC.
261
Art. 1518, NCC.
262
Sec. 57, N.I.L, Act No. 2031.
263
Art. 1505, NCC.
264
Art. 1132, NCC.
265
Art. 560, NCC.
467
Title VI. USUFRUCT
Chapter 1
USUFRUCT IN GENERAL
Art. 562. Usufruct gives a right to enjoy the property of another with
the obligation of preserving its form and substance, unless the title con-
stituting it or the law otherwise provides. (467)
§ 103. Usufruct in General
[103.1] Concept
Usufruct is a real right, of a temporary character, which authorizes
the holder to enjoy all the utilities which result from the normal
exploitation of the property of another in accordance with its destination
and which imposes the obligation of restoring at the time specified either
the thing itself or in special cases its equivalent.1
The holder of the usufruct is known as the “usufructuary.”
[103.1.1] Usufruct Is A Real Right
De Buen defines the concept of a real right as one which authorizes
the holder to derive from a thing certain economic advantages, within
the limits of its possibilities, and which can be enforced against all.2 As
defined in Article 562 of the New Civil Code, usufruct gives a right to
the enjoyment of the property of another and it includes both the jus
utendi and the jus fruendi.3 It is, therefore, a real right and in the nature
of an encumbrance upon another’s property which does not suppose a
disintegration of ownership.
1 Id.
De Buen, Derecho Comun, 3rd ed., Vol. 1, 255.
2 See 4 Manresa, 5th ed., 340.
Id., at 139.
3 Art. 1935, NCC.
See Eleizegui v. Manila Lawn Tennis Club, 2 Phil. 309.
467
466 PROPERTY
[102.2] When Possession Is Considered Lost
Pursuant to the rule declared in Article 560, wild animals are
considered possessed only while they are under one’s control. Once
they recover their natural freedom or once they are restored to their
original state of being free, they ceased to be under one’s possession. As
a consequence, they immediately regain their status of being res nullius
and may thus be acquired by occupation.
In the case of domesticated animals, it will be regarded as such
so long as they retain the habit of returning to the premises of the
possessor. Once they lose that habit, they cease to be domesticated and
revert back to their original status of being wild. As a consequence,
such animals re-acquire its original status of being res nullius and may
thus be acquired by occupation. However, so long as the animals retain
the habit of returning to the premises of the possessor, the possession
thereof is not immediately lost by the simple fact that the animals are
no longer under the control of the possessor. Pursuant to the provision
of Article 716, the possessor or owner of domesticated animals has a
period of twenty (20) days counted from the occupation by another
person within which to reclaim them. After the expiration of this period,
the animals can no longer be recovered from its present possessor.
The rule stated in Article 716 finds application only to domesticated
or tamed animals or those which were formerly wild but retained the
habit of returning to the premises of the possessor or owner. The article
does not apply to domestic or tame animals. In the case of the latter,
they are considered as personal property and are, therefore, subject to
the rules governing any personal property. Hence, the discussions in
relation to possession of movables are applicable to domestic or tame
animals. If they are lost, the owners, as a rule, can recover them from
the present possessors without need of indemnifying the latter. They
are not subject to occupation unless there has been abandonment but
they can be acquired by another person through acquisitive prescription
— the period of prescription being four years if the possessor is in good
faith or eight years if the possessor is in bad faith.
— oOo —
468 PROPERTY
[103.1.2] Temporary Character
Unlike ownership which is generally perpetual in that it is not
usually limited by time and may last as long as the thing exists,4
usufruct is of a temporary character5 since the right is extinguished upon
expiration of the period for which it was constituted6 or upon the death
of the usufructuary,7 as a rule.
[103.1.3] Entitles Holder to Jus Utendi and Jus Fruendi
The holder of the right of usufruct, called the “usufructuary,”
is entitled to exercise the right to enjoy the property (jus utendi)8 and
the right to receive the fruits thereof (jus fruendi).9 In usufruct, the
usufructuary becomes entitled to all the natural, industrial and civil fruits
of the property in usufruct10 even in the absence of an agreement to that
effect, except when there is a different agreement between the parties.11
On this score, usufruct differs from commodatum. In commodatum,
while the bailee (borrower) acquires the right to use the property,12 he
does not ordinarily acquire the right to make use of the fruits of the
thing loaned,13 unless the same is expressly stipulated or agreed upon.14
[103.1.4] “Property of Another…”
Usufruct is a real right over another’s property. Hence, it is a jus
in re aliena. As such, usufruct serves as a limitation upon the owner’s
right of ownership.
[103.1.5] Obligation to Preserve “Form and Substance”
While the usufructuary is entitled to enjoy and use the property in
usufruct, he is, ordinarily, obliged to preserve its form and substance.15
4
5
2 Castan, 8th ed., 93-95.
De Buen, Derecho Comun, 3rd ed., Vol. 1, 255.
6
Art. 603(2), NCC.
7
Art. 603(1), NCC.
8
Art. 562, NCC.
9
Art. 566, NCC.
10
11
12
13
Id.
14
Art. 1940, NCC.
15
Art. 562, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 469
USUFRUCT
Usufruct in General
This obligation is not, however, an indispensable requirement for the
constitution of usufruct since the law or the title constituting the usufruct
may provide otherwise.16 In the following instances, which constitute as
deviations from the rule, the usufructuary is not obliged to preserve the
form and substance of the thing in usufruct:
(1) When the law or the title creating the usufruct provides that
the usufructuary is not so obliged;17
(2) When the usufruct includes things which, without being
consumed, gradually deteriorate through wear and tear;18
and
(3) When the usufruct includes things which cannot be used
without being consumed.19
What is meant by “form and substance?”
“Substance,” according to some commentators, refers to the
matter of the thing, the integral elements that compose it; and “form”
refers to the extrinsic characteristics of the same, those that make it apt
and adequate for the use, destination and particular purpose to which
the owner intends it.20
According to Castan, the absolute prohibition against destroying
or consuming the thing extends to those acts which destroy or alter
certain conditions of the thing, which though not substantial have been
taken into consideration as essential when the usufruct was constituted.
And with respect to form, the usufructuary is prohibited from altering
the thing to its prejudice.21 However, the following alterations are not
within the purview of the prohibition:
(1) When the improvement can be removed without damage to
the property at the end of the usufruct;
(2) When although the improvement cannot be removed it will
not cause the successor in the use of the thing to spend
16
17
Id.
Id.
18
Art. 573, NCC.
19
Art. 574, NCC.
20
See 4 Manresa, 6th ed., 403.
21
2 Castan, 9th ed., 486-487.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 471
USUFRUCT
Usufruct in General
(3) By prescription. In this case, the usufruct is called a “mixed
usufruct.”
[104.2] Other Classifications of Usufruct
(1) Total and partial — A usufruct may be constituted on the
whole (“total”) or part (“partial”) of a thing.23
(2) Simple and multiple — A usufruct may be constituted in
favor of one person, in which case, it is called a “simple usufruct;” or
it may be constituted in favor of two or more persons, in which case, it
is called a “multiple usufruct.” A multiple usufruct, in turn, may either
be “simultaneous” or “successive.” In the former (simultaneous), all
the persons in whose favor the usufruct is constituted are to enjoy the
usufruct at the same time. In the latter (successive), they will enjoy the
usufruct one after another.24
(3) Pure, with a condition or with a period — A usufruct may
be constituted from or to a certain day (with a period), purely or
conditionally.25
(4) Proper (normal) and improper (abnormal) — A usufruct is
proper or normal when it is constituted over a non-consumable thing;
it is improper or abnormal (quasi-usufruct in Roman Law) when it is
constituted over a consumable thing.26
The usufruct mentioned in Article 574 of the New Civil Code —
“Art. 574. Whenever the usufruct includes things which
cannot be used without being consumed, the usufructuary
shall have the right to make use of them under the obligation
of paying their appraised value at the termination of the
usufruct, if they were appraised when delivered. In case they
were not appraised, he shall have the right to return the same
quantity and quality, or pay their current price at the time the
usufruct ceases. (482)”
23
See Art. 564, NCC.
24
Id.
25
Id.
26
2 Castan, 9th ed., 492-494.
470 PROPERTY
considerable expenses or attention in its preservation or
exploitation considering the circumstances of the case; and
(3) When although the alteration may be burdensome to the suc-
cessor in the use of the property, the usufructuary guarantess
that he will restore thing to its original state.22
Art. 563. Usufruct is constituted by law, by the will of private per-
sons expressed in acts inter vivos or in a last will and testament, and by
prescription. (468)
Art. 564. Usufruct may be constituted on the whole or a part of the
fruits of the thing, in favor of one more persons, simultaneously or suc-
cessively, and in every case from or to a certain day, purely or conditional-
ly. It may also be constituted on a right, provided it is not strictly personal
or intransmissible. (469)
Art. 565. The rights and obligations of the usufructuary shall be
those provided in the title constituting the usufruct; in default of such
title, or in case it is deficient, the provisions contained in the two follow-
ing Chapters shall be observed. (470)
§ 104. Constitution of Usufruct
[104.1] Manner of Creation
Contract is only one of the ways of creating a usufruct. Pursuant to
Article 563 of the New Civil Code, a usufruct may be created through
any of the following modes:
(1) By law. A usufruct that is constituted by law is called “legal
usufruct.” An example of this is the usufruct of the parents over the
property of their minor children living in their custody and under their
parental authority under the provisions of Article 226 of the Family
Code.
(2) By the will of private persons expressed in acts inter vivos,
such as contracts and donations, or expressed in a last will and testament.
A usufruct which is created through this manner is called “voluntary
usufruct.” In this kind of usufruct, it is necessary that the usufruct be
constituted by the owner of the property.
22
Id.
472 PROPERTY
which involves consumable things, is an example of an abnormal
usufruct. This kind of usufruct deviates from the normal in that: (1)
the usufructuary is not obliged to preserve the form and substance
of the thing subject matter of the usufruct since the thing cannot be
used in a manner appropriate to its nature without it being consumed;
and consequently, (2) the usufructuary does not have the obligation to
return the very same thing upon the termination of the usufruct. In this
case, the obligation of the usufructuary is to deliver, at the termination
of the usufruct, the appraised value of the thing, if the same has been
appraised, and, if there has been no appraisal, he may return the same
quantity and quality as the thing given him or pay their current price at
the termination of the usufruct.
The usufruct mentioned in Article 573 of the New Civil Code —
“Art. 573. Whenever the usufruct includes things which,
without being consumed, gradually deteriorate through wear
and tear, the usufructuary shall have the right to make use
thereof in accordance with the purpose for which they are
intended, and shall not be obliged to return them at the
termination of the usufruct except in their condition at that
time; but he shall be obliged to indemnify the owner for any
deterioration they may have suffered by reason of his fraud
or negligence. (481)”
which involves things which are non-consumable but gradually
deteriorates through wear and tear, is another example of an abnormal
usufruct. This kind of usufruct deviates from the normal in that the
usufructuary is not obliged to preserve the form and substance of the
thing since he may return it, at the expiration of the usufruct, in the
condition which it may be found without any obligation to reimburse the
owner for the deterioration of the object. However, if the thing suffers
deterioration by reason of the usufructuary’s fraud or negligence, he
shall be liable to the owner.
[104.3] Object of Usufruct
When Article 562 of the New Civil Code declares that the
usufructuary is entitled “to enjoy the property of another,” the property
being referred to may either be a real property or a personal one. In
addition, Article 564 of the New Civil Code clarifies that a usufruct may
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 473
USUFRUCT
Rights of the Usufructuary
likewise be constituted upon a right. Hence, a usufruct may fall upon a
corporeal thing or a right, whether real or personal. With respect to rights,
however, it is necessary that the following requisites be satisfied:
(1) It must not be strictly personal; 27
(2) It must not be intransmissible;28 and
(3) It must have its own independent existence.29 Hence, a servitude
cannot be the object of usufruct because it has no existence independent
of the tenements.30
Chapter 2
RIGHTS OF THE USUFRUCTUARY
Art. 566. The usufructuary shall be entitled to all the natural, indus-
trial and civil fruits of the property in usufruct. With respect to hidden
treasure which may be found on the land or tenement, he shall be consid-
ered a stranger. (471)
Art. 567. Natural or industrial fruits growing at the time the usufruct
begins, belong to the usufructuary.
Those growing at the time the usufruct terminates, belong to the
owner.
In the preceding cases, the usufructuary, at the beginning of the
usufruct, has no obligation to refund to the owner any expenses incurred;
but the owner shall be obliged to reimburse at the termination of the usu-
fruct, from the proceeds of the growing fruits, the ordinary expenses of
cultivation, for seed, and other similar expenses incurred by the usufruc-
tuary.
The provisions of this article shall not prejudice the rights of third
persons, acquired either at the beginning or at the termination of the usu-
fruct. (472)
Art. 568. If the usufructuary has leased the lands or tenements given
in usufruct, and the usufruct should expire before the termination of the
lease, he or his heirs and successors shall receive only the proportionate
share of the rent that must be paid by the lessee. (473)
27
Art. 564, NCC.
28
Id.
29
II Tolentino, Civil Code, 1992 ed., 318.
30
Id., citing 2 Valverde 412.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 475
USUFRUCT
Rights of the Usufructuary
the usufructuary may leave the dead, fallen or uprooted trunks at the dis-
posal of the owner, and demand that the latter remove them and clear the
land. (484a)
Art. 577. The usufructuary of woodland may enjoy all the benefits
which it may produce according to its nature.
If the woodland is a copse or consists of timber for building, the
usufructuary may do such ordinary cutting or felling as the owner was in
the habit of doing, and in default of this, he may do so in accordance with
the custom of the place, as to the manner, amount and season.
In any case the felling or cutting of trees shall be made in such man-
ner as not to prejudice the preservation of the land.
In nurseries, the usufructuary may make the necessary thinnings in
order that the remaining trees may properly grow.
With the exception of the provisions of the preceding paragraphs,
the usufructuary cannot cut down trees unless it be to restore or improve
some of the things in usufruct, and in such case he shall first inform the
owner of the necessity for the work. (485)
Art. 578. The usufructuary of an action to recover real property or a
real right, or any movable property, has the right to bring the action and
to oblige the owner thereof to give him the authority for this purpose and
to furnish him whatever proof he may have. If in consequence of the en-
forcement of the action he acquires the thing claimed, the usufruct shall
be limited to the fruits, the dominion remaining with the owner. (486)
Art. 579. The usufructuary may make on the property held in usu-
fruct such useful improvements or expenses for mere pleasure as he may
deem proper, provided he does not alter its form or substance; but he
shall have no right to be indemnified therefor. He may, however, remove
such improvements, should it be possible to do so without damage to the
property. (487)
Art. 580. The usufructuary may set off the improvements he may
have made on the property against any damage to the same. (488)
Art. 581. The owner of property the usufruct of which is held by
another, may alienate it, but he cannot alter its form or substance or do
anything thereon which may be prejudicial to the usufructuary. (489)
Art. 582. The usufructuary of a part of a thing held in common shall
exercise all the rights pertaining to the owner thereof with respect to the
administration and the collection of fruits or interest. Should the co-own-
ership cease by reason of the division of the thing held in common, the
usufruct of the part allotted to the co-owner shall belong to the usufructu-
ary. (490)
474 PROPERTY
Art. 569. Civil fruits are deemed to accrue daily, and belong to the
usufructuary in proportion to the time the usufruct may last. (474)
Art. 570. Whenever a usufruct is constituted on the right to receive
a rent or periodical pension, whether in money or in fruits, or in the inter-
est on bonds or securities payable to bearer, each payment due shall be
considered as the proceeds or fruits of such right.
Whenever it consists in the enjoyment of benefits accruing from a
participation in any industrial or commercial enterprise, the date of the
distribution of which is not fixed, such benefits shall have the same char-
acter.
In either case they shall be distributed as civil fruits, and shall be
applied in the manner prescribed in the preceding article. (475)
Art. 571. The usufructuary shall have the right to enjoy any increase
which the thing in usufruct may acquire through accession, the servi-
tudes established in its favor, and, in general, all the benefits inherent
therein. (479)
Art. 572. The usufructuary may personally enjoy the thing in usu-
fruct, lease it to another, or alienate his right of usufruct, even by a gra-
tuitous title; but all the contracts he may enter into as such usufructuary
shall terminate upon the expiration of the usufruct, saving leases of rural
lands, which shall be considered as subsisting during the agricultural
year. (480)
Art. 573. Whenever the usufruct includes things which, without be-
ing consumed, gradually deteriorate through wear and tear, the usufruc-
tuary shall have the right to make use thereof in accordance with the pur-
pose for which they are intended, and shall not be obliged to return them
at the termination of the usufruct except in their condition at that time, but
he shall be obliged to indemnify the owner for any deterioration they may
have suffered by reason of his fraud or negligence. (481)
Art. 574. Whenever the usufruct includes things which cannot be
used without being consumed, the usufructuary shall have the right to
make use of them under the obligation of paying their appraised value at
the termination of the usufruct, if they were appraised when delivered. In
case they were not appraised, he shall have the right to return the same
quantity and quality, or pay their current price at the time the usufruct
ceases. (482)
Art. 575. The usufructuary of fruit-bearing trees and shrubs may
make use of the dead trunks, and even of those cut off or uprooted by ac-
cident, under the obligation to replace them with new plants. (483a)
Art. 576. If in consequence of a calamity or extraordinary event, the
trees or shrubs shall have disappeared in such considerable number that
it would not be possible or it would be too burdensome to replace them,
476 PROPERTY
§ 105. Rights of Usufructuary
[105.1] Rights Included In Usufruct
Usufruct, in essence, is nothing else but simply allowing one to
enjoy another’s property.31 It is also defined as the right to enjoy the
property of another temporarily, including both the jus utendi and the
jus fruendi.32 Since possession is essential to free enjoyment of the
property,33 the right to the possession of the property held in usufruct
also belongs to the usufructuary, at least during the effectivity of the
usufruct. Hence, while the usufruct lasts, the owner of the property held
in usufruct is sometimes referred to as the “naked” or “bare” owner since
he is deprived of some of the more important attributes of ownership.
All the foregoing rights can be exercised by the usufructuary even to
the exclusion of the underlying real or naked owner. In other words, the
usufructuary has the right to enjoy the property, to the same extent as
the owner, but only with respect to its use and the receipt of fruits.34
[105.1.1] Extent of Such Rights
The usufructuary has the right to draw from the property all the
profits, utilities and advantages which it may produce, provided it be
without altering the form and substance of the thing. With respect to
the use of the property, the usufructuary is entitled to enjoy the utilities
derived from the property provided that it be the result of the normal
exploitation of the property in accordance with its purpose or destination.
As a consequence —
(1) The right of enjoyment of the usufructuary extends to all
the accessions which the property held in usufruct may acquire, to
the servitudes or easements established in favor of such property, as
well as to all the benefits inherent in the property.35 In these cases, had
the owner himself been in the enjoyment of the property, he would be
entitled to all such benefits. Since such right of enjoyment is transferred
to the usufructuary, it follows that the latter is also entitled to enjoy the
foregoing benefits.
31
Moralidad v. Sps. Pernes, G.R. No. 152809, August 3, 2006, citing Hemedes v. Court of
Appeals, 316 SCRA 309 (1999).
32
Id., citing Eleizegui v. Manila Lawn Tennis Club, 2 Phil. 309 (1909).
33
See supra § 34.1.
34
See II Tolentino, Civil Code of the Phil., 1992 ed., 321.
35
See Art. 571, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
USUFRUCT
Rights of the Usufructuary
(2) If the usufruct is over a woodland, the usufructuary may cut
trees on the land as the owner was in the habit of doing or in accordance
with the custom of the place, as to the manner, amount and season.36 He
must exercise such right, however, in such manner as not to prejudice
the preservation of the land.37 Other than the foregoing, the usufructuary
cannot cut down trees unless it be for the purpose of restoring or
improving some of the things in usufruct, and in such case he shall first
inform the owner of the necessity for the work.38
(3) In case of usufruct over fruit-bearing trees and shrubs, the
usufructuary has the full and unfettered right to gather the fruits from
the tree but he does not have the right to cut trees. However, he may
make use of the dead trunks, as well as those uprooted by accident, but
with the corresponding obligation to replace them with new plants.39
And if in consequence of a calamity or extraordinary event, the trees
or shrubs shall have disappeared in such considerable number that it
would not be possible or it would be too burdensome to replace them,
the usufructuary may leave the dead, fallen or uprooted trunks at the
disposal of the owner, and demand that the latter remove them and clear
the land.40
(4) If the usufruct is over an action to recover property, be it real
or personal, the usufructuary has the right to bring the action and to
oblige the owner thereof to give him the authority for such purpose and
to furnish him whatever proof the owner may have.41 If the usufructuary
succeeds in recovering the property, his right over the property remains
that of a usufructuary since the naked ownership over the same is
retained by the naked owner.42
[105.1.2] Consequence of Usufructuary’s Right of Pos-
session
Since the right of possession (jus possessionis) is one of the rights
being enjoyed by the usufructuary, he has the right to lease the property
36
Art. 577, 2nd par., NCC.
37
Art. 577, 3rd par., NCC.
38
Art. 577, last par., NCC.
39
Art. 575, NCC.
40
Art. 576, NCC.
41
Art. 578, NCC.
42
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
USUFRUCT
Rights of the Usufructuary
the owner of property the usufruct of which is held by another may
alienate it —
“Art. 581. The owner of property the usufruct of which
is held by another, may alienate it, but he cannot alter its
form or substance, or do anything thereon which may be
prejudicial to the usufructuary. (489)”
Hence, there is no doubt that the owner may validly mortgage the
property in favor of a third person.46 In such a case, the usufructuary
shall not be obliged to pay the debt of the mortgagor, and should the
immovable be attached or sold judicially for the payment of the debt,
the owner shall be liable to the usufructuary for whatever the latter
may lose by reason thereof.47 Since the naked owner retains the right
to alienate or encumber the property held in usufruct, the fact that the
usufructuary right is annotated on the title of the owner-mortgagor prior
to the mortgage does not make the mortgagee a mortgagee-in-bad-faith.
Such annotation does not impose upon the mortgagee the obligation to
investigate the validity of the mortgagor’s title because the existence
of the usufruct does not curtail the right of the owner to alienate or
encumber his property.48
While the owner of the property retains the right to alienate
or encumber the property held in usufruct by another, he may not
exercise such right in a manner that will have an adverse effect upon
the usufructuary. In other words, the naked owner may not in any way
interfere with the rights of the usufructuary. This principle is confirmed
in the above-quoted article, which provides that while the owner may
alienate the property held in usufruct he cannot, however, alter its form
or substance, or do anything thereon which may be prejudicial to the
usufructuary.
However, there may be a case where the alienation made by the
owner will affect the right of the usufructuary and, that is where the
right of usufruct is not registered and a third party acquired the property
in good faith without the knowledge of the usufruct and registered his
right.49
46
Id.
47
Art. 600, NCC.
48
See Hemedes v. CA, supra.
49
II Caguioa, Civil Code of the Phil., 1966 ed., 240, citing 4 Manresa, 5th ed., 396.
477 478 PROPERTY
held in usufruct to another. After all, in lease, the lessor is not required
to be the owner of the property leased since only the use or enjoyment of
the thing is transferred. However, such lease is co-terminus with the life
of the usufruct and shall terminate upon the expiration of the usufruct,
the only exception being the lease of rural lands which shall subsist
during the agricultural year despite the termination of the usufruct.43
By virtue of the usufructuary’s right of possession over the
property held by him in usufruct, he is deemed as a “lawful possessor”
for purposes of applying the provisions of Article 429 of the New
Civil Code. As such, he has the right to exclude any person from the
enjoyment of the property, including the naked owner himself, and,
for such purpose, he may even use such force as may be reasonably
necessary to repel or prevent an actual or threatened unlawful physical
invasion or usurpation of the property. However, the naked owner of an
immovable held in usufruct may, during the existence of the usufruct,
enter the property for the purpose of constructing any works, making
any improvements or new plantings thereon if the land is rural, provided
that such acts must not cause a diminution in the value of the usufruct
or prejudice the right of the usufructuary. This right of the owner is
expressly recognized in Article 595 of the New Civil Code —
“Art. 595. The owner may construct any works and
make any improvements of which the immovable in usufruct
is susceptible, or make new plantings thereon if it be rural,
provided that such acts do not cause a diminution in the value
of the usufruct or prejudice the right of the usufructuary.
(503)”
[105.1.3] Usufruct Does Not Include Jus Disponendi
The jus utendi and jus fruendi over the property, including the jus
possessidendi, are transferred to the usufructuary.44 However, the owner
of the property maintains the jus disponendi or the power to alienate,
encumber, transform and even destroy the same.45 This principle is
embodied in Article 581 of the New Civil Code, which provides that
43
See Art. 572, NCC.
44
Hemedes v. CA, supra.
45
Id.
479 480 PROPERTY
[105.1.4] Rights That May Be Exercised By The Owner
During the existence of the usufruct, the naked owner may still
exercise some of his rights as owner with respect to the property held in
usufruct subject to the following limitations: (1) that there shall be no
alteration of the form or substance of the thing;50 (2) that it shall not be
prejudicial nor injurious to the right of the usufructuary;51 and (3) that
there shall be no diminution in the value of the usufruct.52 Subject to
these limitations, the owner may exercise the following rights:
(1) As discussed above, the owner may alienate the property
held in usufruct since the owner retains the jus disponendi;53
(2) As discussed above, the owner may mortgage the property
held in usufruct since he retains the jus disponendi;54
(3) The owner may construct any works and make any
improvements of which the immovable in usufruct is susceptible, or
make new plantings thereof if it be rural;55
(4) The owner may, without the consent of the usufructuary,
impose a voluntary easement upon the tenement or piece of land held in
usufruct56 since easement consists only of a limited use and enjoyment
of the thing without possession. However, no perpetual voluntary
easement may be established on the property without the consent of
both the naked owner and the usufructuary.57
However, the naked owner may not constitute a lease over the
property held in usufruct because possession is one of the rights which
is transferred to the usufructuary.58 Note that it is the usufructuary who
has the right to constitute a lease over the property held in usufruct.59
50
See Art. 581, NCC.
51
See Arts. 581, 595 and 689.
52
See Art. 595, NCC.
53
See Art. 581, NCC.
54
See Arts. 581 and 600, NCC; see also Hemedes v. CA, supra.
55
Art. 595, NCC.
56
See Art. 689, NCC.
57
See Art. 690, NCC.
58
See discussions in supra § 105.1.
59
See Art. 572, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
USUFRUCT
Rights of the Usufructuary
[105.2] Right to the Fruits
[105.2.1] Extent of Right
By way of exception to the rule stated in Article 441 of the
New Civil Code that the fruits ordinarily belong to the owner, the
usufructuary, as a rule, is entitled to all the natural, industrial and civil
fruits of the property in usufruct.60 This right of the usufructuary to
receive the entirety of the fruits presupposes that: (1) the usufruct is
constituted upon the whole property, otherwise, the usufructuary shall
only be entitled to the fruits of that portion over which he has a usufruct;
and (2) the parties do not have an agreement to the contrary.61
Following the foregoing rule, the usufructuary is ordinarily
entitled to the products and income from the property subject to the
usufruct. These income and products are generally considered as fruits
under the law. However, when the products of a thing have the tendency
to diminish its substance, such as minerals from mines and stones from
quarries, they are not regarded as fruits but part of the capital.62 Hence,
they do not pertain to the usufructuary. However, if the property has
been devoted to the exploitation of such products even before the
constitution of the usufruct, such products may be treated as fruits that
shall pertain to the usufructuary.63
As it relates to corporate stocks, our Supreme Court has held that a
dividend, whether cash or stock, represents surplus profits, and therefore
considered as fruits which shall pertain to the usufructuary.64
[105.2.2] Rule as to Pending Natural and Industrial Fruits
Natural or industrial fruits which are still pending or ungathered
at the time that the usufruct begins, belong to the usufructuary, and he
has no obligation to refund to the owner any expenses incurred by the
latter in connection with the cultivation and production of such fruits.65
With respect to natural or industrial fruits which are still pending or
ungathered at the time the usufruct terminates, the same shall belong to
60
Art. 566, NCC.
61
See 4 Manresa, 5th ed., 340.
62
II Tolentino, Civil Code of the Phil., 1992 ed., 322, citing 2-II Colin & Capitant 727.
63
Id.
64
M.M. Barchrach v. Skifert, 87 Phil. 483 (1950).
65
See Art. 567, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
USUFRUCT
Rights of the Usufructuary
either by leasing the property held in usufruct or by alienating the right
of usufruct itself. All such contracts, however, shall terminate upon the
expiration of the usufruct.76
[105.3.1] Effect of Such Transfer or Alienation
The transfer or alienation of the right of usufruct does not result
in the termination of the relation between the usufructuary and the
naked owner.77 The same rule applies in the case of a mere lease by the
usufructuary of the property subject to the usufruct. Since the relation
between the usufructuary and the owner continues despite the lease or
alienation of the right of usufruct, the former shall be personally liable
to the latter for any damage to the thing in usufruct caused by the fault
or negligence of the transferee or lessee.78
[105.3.2] Usufructuary Rights Which May Not Be Alienated
In the following instances, the right of usufruct may not be
allowed:
(1) The legal usufruct of the parents over the fruits and income
of the property of unemancipated children pursuant to Article 226 of the
Family Code, since the same is to be devoted primarily to the child’s
support and secondarily to the collective needs of the family;
(2) The usufruct that is granted to a usufructuary in consideration
of his person to last during his lifetime since the usufruct is a matter of
personal quality;79
(3) When the enjoyment of the property held in usufruct is
acquired through caucion juratoria inasmuch as the basis is the need of
the usufructuary.80
[105.4] Right to Useful and Ornamental Improvements
Under the law, the usufructuary has the right to introduce
improvements on the property held in usufruct, whether the same be a
useful improvement or for mere pleasure, provided that he does not alter
76
Id.
77
II Tolentino, Civil Code of the Phil., 1992 ed., 325.
78
Art. 590, NCC.
79
II Caguioa, Civil Code of the Phil., 1966 ed., 234-235.
80
Id.
481 482 PROPERTY
the owner of the property but the latter shall be obliged to reimburse the
usufructuary the ordinary expenses of cultivation, for seeds and other
similar expenses incurred by the usufructuary.66 These rules are without
prejudice to any right that a third person may have acquired over the
fruits at the beginning or at the termination of the usufruct.67
[105.2.3] Rule as to Civil Fruits
With respect to civil fruits, they are deemed to accrue daily.68
Hence, they shall belong to the usufructuary in proportion to the time
the usufruct may last.69 For example, if the usufructuary has leased
the property given in usufruct and the usufruct expired before the
termination of the lease, the usufructuary or his heirs are entitled to
receive the rents for such period which coincides with his usufruct.70
Upon the termination of the usufruct, the lease entered into by the
usufructuary also terminates71 unless the owner decides to continue with
the same, in which case, the rents accruing upon the termination of the
usufruct shall now belong to the owner.
With respect to periodic pensions or interest on bonds or securities
payable to bearer, they shall be distributed as civil fruits.72 Hence, they
shall accrue daily and, therefore, shall be distributed accordingly.73
[105.3] Alienation of the Usufructuary Right
While the usufructuary does not have the right to dispose of the
property held in usufruct since that right remains with the naked owner,74
he has absolute control and dominion over his usufructuary right. Hence,
he may alienate or encumber his right of usufruct without the consent
of the owner of the property whether by onerous or gratuitous title.75
In other words, the law does not require the usufructuary to personally
enjoy the property in usufruct. He may transfer such right of enjoyment,
66
Id.
67
Id.
68
Art. 569, NCC.
69
Id.
70
Art. 568, NCC.
71
Art. 572, NCC.
72
Art. 570, NCC.
73
Id.
74
See discussions in supra., § 105.1.3.
75
Art. 572, NCC.
483 484 PROPERTY
its form or substance.81 Upon the termination of the usufruct, however,
he is not entitled to seek reimbursement for the expenses he incurred in
connection with the aforesaid improvements82 because if the rule were
otherwise, then the usufructuary might improve the owner out of his
property.83 In other words, if the builder is a usufructuary, his rights will
be governed by Articles 579 and 580 of the New Civil Code.84 The rules
on industrial accession (Articles 448 to 452) and the rules on possession
(Articles 546 to 549) do not apply.
In relation to such improvements, the only rights that may be
exercised by the usufructuary are the following: (1) he may, at his option,
remove the improvements if such removal is possible without damage
to the property;85 and (2) he may set-off the improvements against any
damage he has caused to the property held in usufruct.86
Note that the right of the usufructuary to remove the improve-
ments is something that is potestative with him. He may choose not ex-
ercise it, in which case, he may not be compelled to do so by the owner.
In the event, however, that he decides to exercise such right, he may not
be prevented by the owner from doing so, even if the latter offers to pay
for the value of such improvements. The option given to the owner who
recovers possession of preventing the possessor from removing the use-
ful or ornamental improvements by paying the indemnity (see Articles
546 to 549 of the New Civil Code) has not been extended to the naked
owner in connection with the improvements introduced by the usufruc-
tuary.
Chapter 3
OBLIGATIONS OF THE USUFRUCTUARY
Art. 583. The usufructuary, before entering upon the enjoyment of
the property, is obliged:
(1) To make, after notice to the owner or his legitimate representa-
tive, an inventory of all the property, which shall contain an appraisal of
the movables and a description of the condition of the immovables;
81
Art. 579, NCC.
82
Id.
83
Moralidad v. Sps. Pernes, supra.
84
II Paras, Civil Code of the Phil., 1994 ed., 211, cited in Moralidad v. Sps. Pernes, supra.
85
Art. 579, NCC.
86
Art. 580, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 485
USUFRUCT
Obligations of the Usufructuary
(2) To give security, binding himself to fulfill the obligations im-
posed upon him in accordance with this Chapter. (491)
Art. 584. The provisions of No. 2 of the preceding article shall not
apply to the donor who has reserved the usufruct of the property donated,
or to the parents who are usufructuaries of their children’s property, ex-
cept when the parents contract a second marriage. (492a)
Art. 585. The usufructuary, whatever may be the title of the usufruct,
may be excused from the obligation of making an inventory or of giving
security, when no one will be injured thereby. (493)
Art. 586. Should the usufructuary fail to give security in the cases in
which he is bound to give it, the owner may demand that the immovables
be placed under administration, that the movables be sold, that the public
bonds, instruments of credit payable to order or to bearer be converted
into registered certificates or deposited in a bank or public institution,
and that the capital or sums in cash and the proceeds of the sale of the
movable property be invested in safe securities.
The interest on the proceeds of the sale of the movables and that
on public securities and bonds, and the proceeds of the property placed
under administration, shall belong to the usufructuary.
Furthermore, the owner may, if he so prefers, until the usufructuary
gives security or is excused from so doing, retain in his possession the
property in usufruct as administrator, subject to the obligation to deliver
to the usufructuary the net proceeds thereof, after deducting the sums
which may be agreed upon or judicially allowed him for such administra-
tion. (494)
Art. 587. If the usufructuary who has not given security claims, by
virtue of a promise under oath, the delivery of the furniture necessary for
his use, and that he and his family be allowed to live in a house included
in the usufruct, the court may grant this petition, after due consideration
of the facts of the case.
The same rule shall be observed with respect to implements, tools
and other movable property necessary for an industry or vocation in
which he is engaged.
If the owner does not wish that certain articles be sold because of
their artistic worth or because they have a sentimental value, he may de-
mand their delivery to him upon his giving security for the payment of the
legal interest on their appraised value. (495)
Art. 588. After the security has been given by the usufructuary, he
shall have a right to all the proceeds and benefits from the day on which,
in accordance with the title constituting the usufruct, he should have
commenced to receive them. (496)
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 487
USUFRUCT
Obligations of the Usufructuary
As discussed above, the failure of the usufructuary to make the
inventory or to give the security required at the commencement of the
usufruct will only prevent him from exercising his right of usufruct but it
will not result in the termination of the usufruct. Since the usufructuary
cannot, as yet, take possession of the property prior to his compliance
with the foregoing obligations, the owner may, if he so desires, retain in
his possession the property in usufruct as its administrator.91 If he prefers
not to retain possession of the property, he may demand instead: (1) that
the immovables be placed under administration; (2) that the movables
be sold and its proceeds be invested in safe securities; (3) that the public
bonds, instruments of credit payable to order or bearer be converted
into registered certificates or deposited in a bank or public institution;
or (4) that the capital or sums in cash be invested in safe securities.92 In
these cases, the interest on the proceeds of the sale of the movables and
that on public securities and bonds, and the proceeds of the property
placed under administration, shall belong to the usufructuary.93
Prior to the making of the inventory or the giving of the security,
the usufruct may not also claim any matured credits which form part of
the usufruct or make investment of the capital even at interest, unless he
is authorized by the owner or by the court.94
After compliance with the foregoing requisites, the effects thereof
shall retroact, however, to the day of the constitution of the usufruct.
This principle is embodied in Article 588 of the New Civil Code which
states —
“Art. 588. After the security has been given by the
usufructuary, he shall have a right to all the proceeds and
benefits from the day on which, in accordance with the title
constituting the usufruct, he should have commenced to
receive them. (496)”
[107.3] Exemptions From The Obligation To Give Security
In the following instances, the usufructuary is exempt from the
requirement of giving a security or putting up a bond:
91
Art. 586, last par., NCC.
92
Art. 586, 1st par., NCC.
93
Art. 586, 2nd par., NCC.
94
See Art. 599, NCC.
486 PROPERTY
§ 106. Obligations of Usufructuary
In general, the obligations of the usufructuary may be grouped
into three (3) different stages: (1) those required at the commencement
of the usufruct; (2) those required during the life of the usufruct; and (3)
those required at the termination of the usufruct.
§ 107. Obligations at the Commencement of Usufruct
[107.1] In General
Before entering upon the enjoyment of the property, the usufruc-
tuary is obliged: (1) to make an inventory of all the property covered by
the right of usufruct; and (2) to give security or bond.87 Note, however,
that these obligations are not conditions sine qua non for the effectivity
of the usufruct or for its commencement. In other words, whether or
not the usufructuary complies with both obligations, the usufruct will
nonetheless become effective and the term or period of the usufruct will
already commence to run. However, the usufructuary may not, as a rule,
possess and enjoy the property subject matter of the usufruct unless and
until these obligations are complied with. Stated otherwise, compliance
with these obligations is a condition sine qua non for the usufructuary’s
entry upon the possession and enjoyment of the property.
[107.2] Consequences of Failure to Comply with the Foregoing
Obligations
It must be noted that while Article 586 of the New Civil Code
provides for the effects of failure to give the security required in the
second paragraph of Article 583, the law is silent as to the effects of the
failure to make the inventory required in the first paragraph of Article
583. According to Sanchez Roman, the effect of the failure to make an
inventory is the same as that of the failure to give security.88 This view is
shared by two of our eminent civilists, Eduardo P. Caguioa89 and Justice
J.B.L. Reyes.90 Following their view, the provisions of Article 586 of
the New Civil Code shall also apply to the failure of the usufructuary to
make the inventory.
87
Art. 583.
88
3 Sanchez Roman 575-576.
89
See II Caguioa, Civil Code of the Phil., 1966 ed., 242.
90
See II Reyes and Puno, Outline of Civil Law, p. 137.
488 PROPERTY
(1) When the donor has reserved the usufruct of the property
donated;95 and
(2) In case of legal usufruct of the parents over the property of
their minor children living in their custody and under their parental
authority, except when the parents contract a second marriage96 or when
the market value of the property or the annual income of the child
exceeds P50,000.97
[107.4] Instances Where Usufructuary May Be Relieved of the
Foregoing Obligations
(1) The usufructuary may be excused from the obligation of
making an inventory or of giving security when no one will be injured
thereby.98
(2) When the enjoyment of the property subject of the usufruct
is to be acquired through caucion juratoria.99
Caucion juratoria refers to the promise under oath made in court by
the usufructuary who has not given security for the purpose of acquiring
the use of the following: (1) furniture necessary for his use; (2) dwelling
house; or (3) implements, tools and other movable property necessary
for an industry or vocation in which he is engaged.100 In this kind of
usufruct, the usufructuary has no right to alienate his usufuctuary right
or lease the same for that would mean that he does not need the house
or the furniture or the implements.101
Art. 589. The usufructuary shall take care of the things given in usu-
fruct as a good father of a family. (497)
Art. 590. A usufructuary who alienates or leases his right of usu-
fruct shall answer for any damage which the things in usufruct may suffer
through the fault or negligence of the person who substitutes him. (498)
Art. 591. If the usufruct be constituted on a flock or herd of live-
stock, the usufructuary shall be obliged to replace with the young thereof
95
Art. 584, NCC.
96
Id.
97
Art. 225, Family Code.
98
Art. 584, NCC.
99
Art. 587, NCC.
100
Art. 587, NCC.
101
II Tolentino, Civil Code of the Phil., 1992 ed., 337, citing 4 Manresa 473-474, 479.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 489
USUFRUCT
Obligations of the Usufructuary
the animals that die each year from natural causes, or are lost due to the
rapacity of beasts of prey.
If the animals on which the usufruct is constituted should all per-
ish, without the fault of the usufructuary, on account of some contagious
disease or any other uncommon event, the usufructuary shall fulfill his
obligation by delivering to the owner the remains which may have been
saved from the misfortune.
Should the herd or flock perish in part, also by accident and with-
out the fault of the usufructuary, the usufruct shall continue on the part
saved.
Should the usufruct be on sterile animals, it shall be considered, with
respect to its effects, as though constituted on fungible things. (499a)
Art. 592. The usufructuary is obliged to make the ordinary repairs
needed by the thing given in usufruct.
By ordinary repairs are understood such as are required by the wear
and tear due to the natural use of the thing and are indispensable for its
preservation. Should the usufructuary fail to make them after demand by
the owner, the latter may make them at the expense of the usufructuary.
(500)
Art. 593. Extraordinary repairs shall be at the expense of the owner.
The usufructuary is obliged to notify the owner when the need for such
repairs is urgent. (501)
Art. 594. If the owner should make the extraordinary repairs, he
shall have a right to demand of the usufructuary the legal interest on the
amount expended for the time that the usufruct lasts.
Should he not make them when they are indispensable for the pres-
ervation of the thing, the usufructuary may make them; but he shall have
a right to demand of the owner, at the termination of the usufruct, the
increase in value which the immovable may have acquired by reason of
the repairs. (502a)
Art. 595. The owner may construct any works and make any im-
provements of which the immovable in usufruct is susceptible, or make
new plantings thereon if it be rural, provided that such acts do not cause
a diminution in the value of the usufruct or prejudice the right of the usu-
fructuary. (503)
Art. 596. The payment of annual charges and taxes and of those
considered as a lien on the fruits, shall be at the expense of the usufructu-
ary for all the time that the usufruct lasts. (504)
Art. 597. The taxes which, during the usufruct, may be imposed
directly on the capital, shall be at the expense of the owner.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 491
USUFRUCT
Obligations of the Usufructuary
has the obligation to preserve its form and substance102 and in the per-
formance of this obligation, he is required to observe the diligence of
a good father of a family.103 To further carry out this obligation, the law
specifically tasks the usufructuary to: (1) make the ordinary repairs on
the property held in usufruct;104 (2) pay the annual charges and taxes
which are imposed on the fruits of the property held in usufruct;105 (3)
notify the owner of the need of urgent extraordinary repairs;106 (4) pay
the expenses, costs and liabilities for suits involving the usufruct;107 and
(5) notify the owner of any act of a third person that may be prejudicial
to the rights of the owner.108
[108.1] Ordinary and Extraordinary Repairs
The law imposes upon the usufructuary the obligation to make
the ordinary repairs needed by the thing given in usufruct,109 and should
he fail to make them after demand by the owner, the latter may make
them at his expense.110 Clearly, therefore, the expenses incurred for the
making of the ordinary repairs are to be borne by the usufructuary.
Extraordinary repairs, on the other hand, shall be made at the ex-
pense of the owner.111 If the owner makes the extraordinary repairs, he
has the right to demand of the usufructuary payment of the legal inter-
est on the amount expended from the time they were made until the
usufruct lasts.112 But unlike in the case of the ordinary repairs, the law
does not oblige the owner to make the extraordinary repairs even when
the same are indispensable for the preservation of the thing. As a conse-
quence, the usufructuary may not compel the owner to make the repairs
in the event that the latter fails to do the same.113 If the needed extraor-
dinary repairs are indispensable for the preservation of the thing, the
usufructuary, on the other hand, has an option, but not an obligation, to
102
Art. 562, NCC.
103
Art. 589, NCC.
104
Art. 592, NCC.
105
106
Art. 596, NCC.
Art. 593, NCC.
107
Art. 602, NCC.
108
Art. 601, NCC.
109
Art. 592 1st par., NCC.
110
Art. 592, 2nd par., NCC.
111
Art. 593, NCC.
112
Art. 594, 1st par., NCC.
113
See II Tolentino, Civil Code of the Phil., 1992 ed., 340.
490 PROPERTY
If the latter has paid them, the usufructuary shall pay him the proper
interest on the sums which may have been paid in that character; and, if
the said sums have been advanced by the usufructuary, he shall recover
the amount thereof at the termination of the usufruct. (505)
Art. 598. If the usufruct be constituted on the whole of a patrimony,
and if at the time of its constitution the owner has debts, the provisions
of Articles 758 and 759 relating to donations shall be applied, both with
respect to the maintenance of the usufruct and to the obligation of the
usufructuary to pay such debts.
The same rule shall be applied in case the owner is obliged, at the
time the usufruct is constituted, to make periodical payments, even if
there should be no known capital. (506)
Art. 599. The usufructuary may claim any matured credits which
form a part of the usufruct if he has given or gives the proper security.
If he has been excused from giving security or has not been able to give
it, or if that given is not sufficient, he shall need the authorization of the
owner, or of the court in default thereof, to collect such credits.
The usufructuary who has given security may use the capital he has
collected in any manner he may deem proper. The usufructuary who has
not given security shall invest the said capital at interest upon agreement
with the owner; in default of such agreement, with judicial authorization;
and, in every case, with security sufficient to preserve the integrity of the
capital in usufruct. (507)
Art. 600. The usufructuary of a mortgaged immovable shall not be
obliged to pay the debt for the security of which the mortgage was con-
stituted.
Should the immovable be attached or sold judicially for the payment
of the debt, the owner shall be liable to the usufructuary for whatever the
latter may lose by reason thereof. (509)
Art. 601. The usufructuary shall be obliged to notify the owner of
any act of a third person, of which he may have knowledge, that may be
prejudicial to the rights of ownership, and he shall be liable should he not
do so, for damages, as if they had been caused through his own fault.
(511)
Art. 602. The expenses, costs and liabilities in suits brought with
regard to the usufruct shall be borne by the usufructuary. (512)
§ 108. Obligations During the Life of Usufruct
Once the usufructuary has entered into the possession and enjoy-
ment of the property subject matter of a proper or normal usufruct, he
492 PROPERTY
make the repairs himself114 but he has the obligation to notify the owner
of the need of such repairs in view of the urgency of the matter.115
If the need for the extraordinary repairs is urgent, such that they
are indispensable for the preservation of the thing, the law imposes an
obligation upon the usufructuary to notify the owner of the need of
such repairs.116 If after such notice, the owner still fails to make the
extraordinary repairs, the usufructuary is then authorized to make them,
in which case, he acquires the following rights in connection therewith:
(1) the right to demand of the owner, at the termination of the usufruct,
the increase in value which the immovable may have acquired by reason
of the repair;117 and the right to retain the property held in usufruct
pending the reimbursement by the owner of such expenses.118
If the extraordinary expenses are indispensable for the preser-
vation of the thing and the same were made by the usufructuary but
without prior notice to the owner, it is not clear whether the usufructu-
ary is entitled to the indemnity and right of retention. It is submitted,
however, that these rights may not be availed by the usufructuary in the
absence of a prior notice to the owner of the urgent need for extraordi-
nary repairs. Note that the law does not impose upon the usufructuary
the obligation to make such repairs even if the same are needed for the
preservation of the thing held in usufruct. He is only granted an option
to make the repairs himself in situations where the owner fails to do so
upon notice. As a consequence, the obligation of the owner to indem-
nify the usufructuary for any expenses incurred by the latter in connec-
tion with the making of extraordinary repairs is conditioned upon the
owner’s failure to make the repairs when notified by the usufructuary.
Absent such notice, any expenses incurred by the usufructuary for such
expenses shall be borne by him. After all, he is also benefited by such
repairs since the thing is restored to its condition of usefulness.
But what constitutes “ordinary” or “extraordinary” repairs? Pur-
suant to the provision of the second paragraph of Article 592, the repair
is considered “ordinary” if the following requisites concur: (1) it is re-
114
See Art. 594, NCC.
115
See Art. 593, NCC.
116
Id.
117
Art. 594, 2nd par., NCC.
118
See Art. 612, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 493
USUFRUCT
Obligations of the Usufructuary
quired by the wear and tear due to the natural use of the thing; and (2)
it is indispensable for the preservation of the thing. If both requisites
are not satisfied, then the repair is considered “extraordinary.” Hence,
repairs which are caused by exceptional circumstances, whether or not
they are necessary for the preservation of the thing, are considered ex-
traordinary. Likewise, those which are caused by the natural use of the
thing but are not necessary for its preservation are considered extraor-
dinary repairs.
[108.2] Payment of Annual Charges and Taxes
The payment of annual charges and taxes and of those considered
as a lien on the fruits, shall be at the expense of the usufructuary for all
the time that the usufruct lasts.119 On the other hand, the taxes which,
during the usufruct, may be imposed directly on the capital, shall be at
the expense of the owner.120 If the taxes directly imposed on the capital
are paid by the owner, the usufructuary is obliged to pay him the proper
interest on the sums which may have been paid in that character.121 If
the said sums, however, have been advanced by the usufructuary, he
is entitled to recover the same from the owner at the termination of the
usufruct,122 with the right to retain the property held in usufruct until he
is reimbursed.123
[108.2.1] Real Estate Taxes on Land
There is variance of opinion on the issue of whether the payment
of land taxes is at the expense of the usufructuary or of the owner.
According to Manresa, land taxes, being payable annually, are
chargeable against the usufructuary.124 This is also the view of the Code
Commission125 and of Justice J.B.L. Reyes.126 In a case decided by the
Court of Appeals,127 it was likewise held that the payment of land taxes
by a usufructuary is not proof of adverse possession against the owner
because such payment is an obligation of the usufructuary.
119
Art. 596, NCC.
120
Art. 597, NCC.
121
Id.
122
Id.
123
See Art. 612, NCC.
124
4 Manresa 493.
125
See I Capistrano, Civil Code of the Phil., 541.
126
See II Outline in Civil Law, 140.
127
Quirante v. Quirante (C.A.), O.G., 4th Supp., No. 8, 242.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 495
USUFRUCT
Extinguishment of Usufruct
Chapter 4
EXTINGUISHMENT OF USUFRUCT
Art. 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless a contrary intention
clearly appears;
(2) By the expiration of the period for which it was constituted or
by the fulfillment of any resolutory condition provided in the title creating
the usufruct;
(3) By merger of the usufruct and ownership in the same person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting the
usufruct;
(7) By prescription. (513a)
Art. 604. If the thing given in usufruct should be lost only in part, the
right shall continue on the remaining part. (514)
Art. 605. Usufruct cannot be constituted in favor of a town, corpora-
tion, or association for more than fifty years. If it has been constituted, and
before the expiration of such period the town is abandoned, or the corpo-
ration or association is dissolved, the usufruct shall be extinguished by
reason thereof. (515a)
Art. 606. A usufruct granted for the time that may elapse before a
third person attains a certain age, shall subsist for the number of years
specified, even if the third person should die before the period expires,
unless such usufruct has been expressly granted only in consideration of
the existence of such person. (516)
Art. 607. If the usufruct is constituted on immovable property of
which a building forms part, and the latter should be destroyed in any
manner whatsoever, the usufructuary shall have a right to make use of
the land and the materials.
The same rule shall be applied if the usufruct is constituted on a
building only and the same should be destroyed. But in such a case, if the
owner should wish to construct another building, he shall have a right to
occupy the land and to make use of the materials, being obliged to pay
to the usufructuary, during the continuance of the usufruct, the interest
upon the sum equivalent to the value of the land and of the materials.
(517)
494 PROPERTY
Our Supreme Court, however, adopts a contrary view.128 According
to the Supreme Court, land tax directly burdens the capital, that is, the
real value of the property and should be paid by the owner.129 This is also
the view of Senator Tolentino130 despite the fact that such kind of taxes
are paid annually. Citing Sanchez Roman,131 Tolentino explains that
“annual charges and taxes” in Article 596 of the New Civil Code are
chargeable against the usufructuary only when they may be considered
as a lien upon the fruits.
[108.3] Obligation to Notify Owner of Prejudicial Acts
The usufructuary is obliged to notify the owner of any act of a third
person, of which he may have knowledge, which may be prejudicial to
the “rights of ownership.”132 If he fails in this obligation, he shall be
liable to the owner for damages, as if such act had been cause through
his own fault.133
Note that the intention Article 601 of the New Civil Code is to
protect the “right of ownership” itself and not simply the right of the
naked owner. As a consequence, the usufructuary is obliged to notify the
owner of any act of dispossession or any such attempt made by a third
person even if it is the usufructuary who is entitled to the possession
of the property during the usufruct and not the naked owner. This is
because the usufrucuary has the obligation to return the possession of
the property to the naked owner upon the termination of the usufruct.
Hence, any fact or issue affecting the usufructuary’s possession of the
property may also eventually affect the right of ownership itself. The
usufructuary is not, however, obliged to give notice of any act of a third
person which does not affect the right of ownership, such as when the
act of a third person affects only the rights of the usufructuary with
respect to the fruits of the property.
128
See Mercado v. Rizal, 67 Phil. 608 (1941); Bislig Bay Lumber Co., Inc. v. Provincial
Government of Surigao, 100 Phil. 303 (1956); Board of Assessment Appeals of Zamboanga del
Sur v. Samar Mining Company, Inc., 37 SCRA 734 (1971).
129
Mercado v. Rizal, supra.
130
II Tolentino, Civil Code of the Phil., 1992 ed., 343.
131
See 3 Sanchez Roman 587.
132
Art. 601, NCC.
133
Id.
496 PROPERTY
Art. 608. If the usufructuary shares with the owner the insurance of
the tenement given in usufruct, the former shall, in case of loss, continue
in the enjoyment of the new building, should one be constructed, or shall
receive the interest on the insurance indemnity if the owner does not wish
to rebuild.
Should the usufructuary have refused to contribute to the insur-
ance, the owner insuring the tenement alone, the latter shall receive the
full amount of the insurance indemnity in case of loss, saving always the
right granted to the usufructuary in the preceding article. (518a)
Art. 609. Should the thing in usufruct be expropriated for public use,
the owner shall be obliged either to replace it with another thing of the
same value and of similar conditions, or to pay the usufructuary the legal
interest on the amount of the indemnity for the whole period of the usu-
fruct. If the owner chooses the latter alternative, he shall give security for
the payment of the interest. (519)
Art. 610. A usufruct is not extinguished by bad use of the thing in
usufruct; but if the abuse should cause considerable injury to the owner,
the latter may demand that the thing be delivered to him, binding himself
to pay annually to the usufructuary the net proceeds of the same, after
deducting the expenses and the compensation which may be allowed him
for its administration. (520)
Art. 611. A usufruct constituted in favor of several persons living at
the time of its constitution shall not be extinguished until the death of the
last survivor. (521)
Art. 612. Upon the termination of the usufruct, the thing in usufruct
shall be delivered to the owner, without prejudice to the right of retention
pertaining to the usufructuary or his heirs for taxes and extraordinary
expenses which should be reimbursed. After the delivery has been made,
the security or mortgage shall be cancelled. (522a)
§ 109. Extinguishment of Usufruct
The Civil Code enumerates the following causes for extinguishment
of usufruct:
(1) By the death of the usufructuary, unless a contrary intention
clearly appears;
(2) By the expiration of the period for which it was constituted,
or by the fulfillment of any resolutory condition provided in
the title creating the usufruct;
(3) By merger of the usufruct and ownership in the same
person;
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 497
USUFRUCT
Extinguishment of Usufruct
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting the
usufruct; and
(7) By prescription.134
Aside from the foregoing causes, usufruct is also extinguished: (1)
by the non-compliance with any condition agreed upon by the parties as
grounds for terminating the usufruct; (2) by the rescission or annulment
of the contract which is the source of the right of usufruct; and (3) by
any causes which extinguish legal usufruct.
[109.1] Death of Usufructuary
A usufruct is meant only as a lifetime grant.135 Ordinarily, therefore,
the usufruct is extinguished upon the death of the usufructuary.136 Unlike
a natural person, the lifetime of a corporation or association may be
extended indefinitely.137 For this reason, the law limits the life of the
usufruct to fifty (50) years if the same is constituted in favor of a town,
corporation, or association.138 The purpose of this limitation is to avoid a
situation where the usufruct would become a perpetual one. Of course,
if the town is abandoned or the corporation or association is dissolved
prior to the period agreed upon, the usufruct is also extinguished by
reason thereof.139
Note, however, that it is the death of the usufructuary which
generally results in the termination of the usufruct. Hence, the death
of the naked owner will not extinguish the usufruct unless the parties
expressly so stipulate.
[109.1.1] Exceptions to the Foregoing Rule
By way of exceptions, the death of the usufructuary shall not result
in the extinguishment of the usufruct in the following situations:
134
Art. 603, NCC.
135
NHA v. Court of Appeals, G.R. No. 148830, April 13, 2005.
136
Art. 603(1), NCC.
137
NHA v. Court of Appeals, supra.
138
Art. 605, NCC.
139
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 499
USUFRUCT
Extinguishment of Usufruct
when such usufruct has been expressly granted only in consideration of
the existence of the third person the usufruct is extinguished upon the
latter’s death. In the same example, if the usufruct was constituted by
“O” to help “U” pay for the support of “C,” the usufruct is extinguished
upon the death of the latter.
[109.3] Loss of the Thing
A thing is lost when it perishes, or goes out of commerce, or
disappears in such a manner that its existence is unknown or it cannot
be recovered.145 Hence, loss may either be physical or juridical.
[109.3.1] Exceptions
(1) If the usufruct is constituted on a building and the latter
is destroyed without the fault of the usufructuary, the usufruct is not
extinguished. In such a situation, the usufructuary has the right to make
use of the land and the materials.146 If the owner, however, wishes to
construct another building, he has the right to occupy the land and to
make use of the materials, in which case, he shall be obliged to pay to
the usufructuary, during the continuance of the usufruct, the interest
upon the sum equivalent to the value of the land and of the materials.147
If the building which was destroyed had been insured and the
usufructuary shared in the payment of the insurance, together with the
owner, the usufructuary shall continue in the enjoyment of the new
building, should one be constructed, or shall receive the interest on the
insurance indemnity if the owner does not wish to rebuild.148 Should
the usufructuary have refused to contribute to the insurance and the
same was paid by the owner alone, the owner is entitled to the full
amount of the insurance indemnity, but the usufruct continues over the
land and the materials of the building or in case the owner chooses
to rebuild the building, the usufructuary is only entitled to the legal
interest in the value of the land and the materials but has no right to the
new building.149
145
Art. 1189(1), NCC.
146
Art. 607, 2nd par., NCC.
147
Id.
148
Art. 608, 1st., NCC.
149
Art. 608, 2nd par., NCC.
498 PROPERTY
(1) When the contrary intention clearly appears.140 Hence, when
the parties stipulate that the death of the usufructuary will not extinguish
the usufruct then it shall continue. It is essential, however, that there
must be an express agreement that the usufruct shall continue even after
the death of the usufructuary; otherwise, the death of the usufructuary
will extinguish the usufruct.141 In other words, even if a period or con-
dition is stipulated, the usufruct is extinguished upon the death of the
usufructuary unless there is an express agreement that it shall continue
even after such death.142
(2) In multiple usufructs, the usufruct is extinguished only upon
the death of the last survivor.143
[109.2] Expiration of Period or Fulfillment of Resolutory Condi-
tion
The expiration of the period for which the usufruct was constituted
or the fulfillment of the resolutory condition imposed on the usufruct
by the person constituting it shall likewise result in the extinguishment
of the usufruct. However, even prior to the arrival of the period or prior
to the fulfillment of the resolutory condition, the usufruct is already
extinguished upon the death of the usufructuary unless there is an express
agreement that the usufruct shall continue even after such death.
As discussed in supra § 109.1, the period of the usufruct must not
exceed fifty (50) years if it is constituted in favor of a town, corporation
or association.
In cases where the usufruct is granted for the time that may elapse
before a third person attains a certain age, the usufruct shall subsist for
the number of years specified, even if the third person should die before
the period expires.144 For example, if “O” creates a usufruct over his
property in favor of “U” to last until the child of “U” (“C”), who is five
years old, reaches the age of eighteen years old, the usufruct will continue
for another eight years even if “C” dies at the age of ten. However,
140
Art. 603(1), NCC.
141
2 Castan, 9th ed., 526; Decisions of the Supreme Court of Spain of October 1, 1919 and
July 2, 1952; 2 Valverde 449.
142
See II Tolentino, Civil Code of the Phil., 1992 ed., 347; II Caguioa, Civil Code of the
Phil., 1966 ed., 253.
143
Art. 611, NCC.
144
Art. 606, NCC.
500 PROPERTY
(2) If the property held in usufruct was expropriated for public
use, the usufruct is not extinguished. In such a case, the owner has
the options of either: (a) replacing it with another thing of the same
value and of similar conditions; or (b) paying the usufructuary the legal
interest on the amount of the indemnity for the whole period of the
usufruct, giving security for such payment.150
[109.4] Effect of Bad Use
A usufruct is not extinguished by bad use of the thing held in
usufruct.151 If the bad use or abuse of the thing in usufruct should cause
considerable injury to the owner, the latter may demand that the thing
be delivered to him, binding himself to pay annually to the usufructuary
the net proceeds of the same, after deducting the expenses and the
compensation which may be allowed him for its administration.152
§ 110. Obligations of Usufructuary Upon Termination of Usu-
fruct
Upon the termination of the usufruct, the usufructuary loses the
right to the possession of the property and he is obliged to deliver the
same to the owner unless the usufructuary is entitled to exercise the
right to retain the property.153 As previously discussed, the usufructuary
enjoys a right of retention until payment of the following: (1) sums
that may have been advanced by the usufructuary for payment of taxes
which are imposed directly on the capital;154 and (2) the increase in the
value which the immovable acquired by reason of the extraordinary
repairs paid for by the usufructuary.155
— oOo —
150
Art. 609, NCC.
151
Art. 610, NCC.
152
Id.
153
Art. 612, NCC.
154
Arts. 597 and 612, NCC.
155
Arts. 594 and 612, NCC.

Title VII. EASEMENTS OR SERVITUDES
Chapter 1
EASEMENTS IN GENERAL
Section 1. Different Kinds of Easements
Art. 613. An easement or servitude is an encumbrance imposed
upon an immovable for the benefit of another immovable belonging to a
different owner.
The immovable in favor of which the easement is established is
called the dominant estate; that which is subject thereto, the servient
estate. (530)
Art. 614. Servitudes may also be established for the benefit of a
community, or of one or more persons to whom the encumbered estate
does not belong. (531)
§ 111. Concept
[111.1] Definition
The New Civil Code defines easement or servitude (“servitus”)
from its passive aspect of being an encumbrance. As defined, easement
or servitude is an encumbrance imposed upon an immovable for the
benefit of another immovable belonging to a different owner.1 However,
it may also be established for the benefit of a community, or of one or
more persons to whom the encumbered estate does not belong.2
The foregoing definition, however, represents only one of the
two aspects of easement or servitude. The other aspect of easement or
servitude refers to the right of servitude (jus servitutes), or the right
which corresponds to the burden imposed. From this viewpoint, an
1 miscal, G.R. No. 137882, Feb. 4, 2005; see also Quimen v. CA, 257 SCRA 163 (1996), citing 3
Art. 613, 1st par., NCC.
2 Sanchez Roman 472.
Art. 614, NCC.
501
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Easements in General
[111.1.3] It Is Constituted Over An Immovable …
Whatever may be the kind of easement, the right is always
enjoyed over an immovable property. Or, from the point of view of
the encumbrance, the same is always imposed upon an immovable
property.7 The term “immovable” in Article 613 should be understood
in its ordinary or vulgar connotation — as referring to those which are,
by their nature, cannot be moved from one place to another — such as
lands, buildings and roads.8 Hence, it is legally impossible to impose an
easement over another easement.9
[111.1.4] It Is Constituted Over Another’s Property …
Easement is a right which is enjoyed over another’s property, or
jura in re aliena.10 As such, it operates as a limitation on the title of the
owner of the servient estate, specifically, his right to use (jus utendi).11
Inasmuch as every easement or servitude is a limitation upon one’s
ownership, it follows that no man has a right of servitude in a thing of
which he is the owner: Nulli res sua servit. For if he had, he would have
a right in the thing against himself: which is, of course, absurd.12 Hence,
it is impossible to have an easement over one’s own property in one’s
own favor because things serve their owner by reason of ownership and
not because of any servitude.13 Consequently, if there is a merger in the
same person of the ownership of the dominant and servient estates, the
easement is extinguished.14
Since easement is constituted on the corporeal immovable property
of another person, an acknowledgment of the easement is an admission
that the property belongs to another.15
7
See Art. 613, 1st par., NCC.
8
II Caguioa, Civil Code of the Phil., 1966 ed., 263.
9
Id., 262, citing the Decision of the Supreme Court of Spain of February 4, 1920.
10
Amor v. Florentino, G.R. No. L-48384, Oct. 11, 1943.
11
Solid Manila Corp. v. Bio Hong Trading Co., Inc., 195 SCRA 748 (1991).
12
Lectures on Jurisprudence, John Austin and Sarah Austin, 1863 ed., p. 27.
13
II Caguioa, Civil Code of the Phil., 1966 ed., 263.
14
Art. 631(1), NCC.
15
Bogo-Medellin Milling Co., Inc. v. CA, supra.
501 502 PROPERTY
easement or servitude may thus be defined as “a real right, constituted
on the corporeal immovable property of another, by virtue of which
the owner has to refrain from doing, or must allow someone to do,
something on his property, for the benefit of another thing or person.”3
[111.1.1] Easement and Servitude, Distinguished
Although the Civil Code uses the terms “easement” and “servitude”
interchangeably, they are not, strictly speaking, synonymous. As can be
seen from supra § 111.1, the concept may be defined either from the
point of view of the right enjoyed or from the viewpoint of the burden
imposed. Properly speaking, “easement” refers to the right enjoyed by
one4 while “servitude” refers to the burden imposed upon the other.5 Put
a little differently, easement and servitude are but the two aspects of
the same concept. The passive aspect of being an encumbrance is what
should properly be referred to as the “servitude;” whereas the active
aspect of being a right is what should properly be referred to as an
“easement.”
[111.1.2] Easement Is A Real Right …
Easement is a real right since the right is constituted on the thing
itself and not upon its owner or its occupant. As a consequence, the
right avails against every person whomsoever, who may happen, for the
time being, to have any interest in the thing, or, as adverse possessor,
to exercise a right of dominion over it. The right consists of a limited
use and enjoyment of the thing without possession and gives rise to an
action in rem in favor of the owner of the tenement of the easement and
against any possessor of the servient estate.6 Unlike a lease, an easement
does not give its holder a right of possession over the property, but only
a right of use for a special and limited purpose. It gives the holder of the
easement an incorporeal interest on the land, which is non-possessory
in character, but grants no title thereto.
3
Bogo-Medellin Milling Co., Inc. v. CA, 407 SCRA 518 (2003); Sps. Dela Cruz v. Ra-
4
Bouvier’s Law Dictionary, 3rd revision, Vol. 1, p. 967.
5
Bouvier’s Law Dictionary, 3rd revision, Vol. 1, p. 967.
6
II Caguioa, Civil Code of the Phil., 1966 ed., 262.
503 504 PROPERTY
Bogo-Medellin Milling Co., Inc. v. Court of Appeals
407 SCRA 518 (2003)
Bogo-Medelllin Milling Co., Inc. declared the property it was occupying
to be a “central railroad right of way” or “sugar central railroad right of way”
from 1930 to 1963. It was only in 1965 that Bogo-Medellin Milling Co.
filed a claim over the property during the cadastral survey of Medellin. In
1989, a complaint for recovery of the land was filed by the alleged owner.
Bogo-Medellin Milling Co. interposes, as defense, ownership of the land thru
extraordinary acquisitive prescription. In ruling against Bogo-Medellin Milling
Co., the Court explained —
An easement or servitude is a real right, constituted on the
corporeal immovable property of another, by virtue of which
the owner has to refrain from doing, or must allow someone to
do, something on his property, for the benefit of another thing
or person. It exists only when the servient and dominant estates
belong to two different owners. It gives the holder of the easement
an incorporeal interest on the land but grants no title thereto.
Therefore, an acknowledgment of the easement is an admission
that the property belongs to another.
Having held the property by virtue of an easement, petitioner
cannot now assert that its occupancy since 1929 was in the concept
of an owner. Neither can it declare that the 30-year period of
extraordinary acquisitive prescription started from that year.
Petitioner, however, maintains that even if a servitude
was merely imposed on the property in its favor, its possession
immediately became adverse to the owner in the late 1950’s when
the grant was alleged by respondent heirs to have expired. It
stresses that, counting from the late 1950’s (1959 as found by the
trial court), the 30-year extraordinary acquisitive prescription had
already set in by the time respondent heirs made a claim against it
in their letters dated March 1 and April 6, 1989.
We do not think so. The mere expiration of the period of
easement in 1959 did not convert petitioner’s possession into
an adverse one. Mere material possession of land is not adverse
possession as against the owner and is insufficient to vest title,
unless such possession is accompanied by the intent to possess
as an owner. There should be a hostile use of such a nature and
exercised under such circumstances as to manifest and give notice
that the possession is under a claim of right.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 505
EASEMENTS OR SERVITUDES
Easements in General
In the absence of an express grant by the owner, or conduct
by petitioner sugar mill from which an adverse claim can be
implied, its possession of the lot can only be presumed to have
continued in the same character as when it was acquired (that is,
it possessed the land only by virtue of the original grant of the
easement of right of way), or was by mere license or tolerance of
the owners (respondent heirs). It is a fundamental principle of law
in this jurisdiction that acts of possessory character executed by
virtue of license or tolerance of the owner, no matter how long, do
not start the running of the period of prescription.
After the grant of easement expired in 1959, petitioner never
performed any act incompatible with the ownership of respondent
heirs over Cadastral Lot No. 954. On the contrary, until 1963,
petitioner continued to declare the “sugar central railroad right
of way” in its realty tax receipts, thereby doubtlessly conceding
the ownership of respondent heirs. Respondents themselves were
emphatic that they simply tolerated petitioner’s continued use of
Cadastral Lot No. 954 so as not to jeopardize the employment of
one of their co-heirs in the sugar mill of petitioner.
The only time petitioner assumed a legal position adverse to
respondents’ was when it filed a claim over the property in 1965
during the cadastral survey of Medellin. Since then (1965) and
until the filing of the complaint for the recovery of the subject land
before the RTC of Cebu in 1989, only 24 years had lapsed. Since
the required 30-year extraordinary prescriptive period had not yet
been complied with in 1989, petitioner never acquired ownership
of the subject land.
Art. 615. Easements may be continuous or discontinuous, apparent
or non-apparent.
Continuous easements are those the use of which is or may be in-
cessant, without the intervention of any act of man.
Discontinuous easements are those which are used at intervals and
depend upon the acts of man.
Apparent easements are those which are made known and are con-
tinually kept in view by external signs that reveal the use and enjoyment
of the same.
Non-apparent easements are those which show no external indica-
tion of their existence. (532)
Art. 616. Easements are also positive or negative.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 507
EASEMENTS OR SERVITUDES
Easements in General
easement pertains to persons without a dominant estate.18 In personal
servitude or easement, the person in whose favor the easement is
constituted need not be the owner of any certain estate and does not
require a dominant estate because the person in whose favor the
easement is constituted need not be a property owner.19
[112.1.1] Distinction
A real or praedial servitude is said to be imposed upon one of
the two estates, called the servient estate or praedium serviens, for the
use or advantage of the other, called the dominant estate or praedium
dominans. While it may appear that the right of servitude (jus servitutes)
is enjoyed by the owner or occupant of the dominant estate, he does so
only by reason of such occupancy. In other words, the right of servitude
(jus servitutes) that is being enjoyed by the occupant of the dominant
estate is inseparable from the occupation of the tenement or estate.
Hence, in the ultimate analysis, the right of servitude resides in the
estate (praedium) itself and not in the physical person who successively
occupies or enjoys it.
A personal servitude, on the other hand, is due, not to a thing, but
to a person, independently of the latter’s ownership of any immovable
or estate. If the servitude is established for the advantage of a given
person, the same is inseparable from his person, and necessarily ceases
at his death, unless there is a stipulation to the contrary. In addition, the
right to personal servitude does not extend to the successors-in-interest
of the person to whom the right is granted.20
Jabonete v. Monteverde
16 SCRA 462 (1966)
In a civil case between the plaintiffs and the defendant Antonio Legaspi,
a compromise agreement was entered into whereby the said defendant granted
the plaintiffs and their family, friends, drivers, servants and jeeps a right of
way. Subsequently, however, the plaintiffs, unable to continue with their repair
shop, transferred to another place whereupon the defendant reconstructed his
fence and its footing, closing thereby the opening previously made by the
18
Solid Manila Corp. v. Bio Hong Trading Co., Inc., supra.
19
II Caguioa, Civil Code of the Phil., 1966 ed., 264.
20
Jabonete v. Monteverde, 16 SCRA 462 (1966).
506 PROPERTY
A positive easement is one which imposes upon the owner of the
servient estate the obligation of allowing something to be done or of do-
ing it himself, and a negative easement, that which prohibits the owner of
the servient estate from doing something which he could lawfully do if the
easement did not exist. (533)
§ 112. Kinds of Easements
Easements are classified, as follows:
(1) As to the recipient of the benefit, it is either real or
personal;
(2) As to its source, it is either legal or voluntary. In case of legal
easements, it is either:
(a) public legal easement; or
(b) private legal easement.
(3) As to its exercise, it is either: continuous or discontinuous,
apparent or non-apparent, and positive or negative.
[112.1] Real and Personal (Easement) Servitudes
The concept of real servitude, also known as praedial servitude,
is defined in the first paragraph of Article 613 of the New Civil Code.
In real or praedial servitude, the encumbrance is imposed upon an
immovable for the benefit of another immovable belonging to a different
owner.16 A real servitude, therefore, requires the existence of two distinct
immovables belonging to different owners to each of which it relates.
The immovable in favor of which the easement is established is called
“dominant estate;” that which is subject thereto, the “servient estate.”17
Without these two estates or tenements, there can be no real or praedial
servitude.
The concept of personal servitude, on the other hand, is defined
in Article 614 as an encumbrance imposed upon an immovable for
the “benefit of a community, or of one or more persons to whom the
encumbered estate does not belong.” In personal servitude, there
is therefore no “owner of a dominant tenement” to speak of, and the
16
Art. 613, 1st par., NCC.
17
Art. 613, 2nd par., NCC.
508 PROPERTY
plaintiffs. Thereafter, the plaintiffs’ lot was foreclosed by the Development
Bank of the Philippines (DBP) which, later still, conveyed it under a conditional
sale to Mrs. Luz Arcilla. Upon her acquisition of the lot, she demanded of the
defendant the re-opening of the fence in question as it was her plan to construct
her house in the said lot. When the defendant refused, the Development Bank
filed with the court a petition to hold the said defendant in contempt. To this
petition, Arcilla later intervened and was so allowed by the court. The DBP and
Arcilla contended that the refusal of the defendant to cause or allow the making
of an opening in his fence was a defiance of the said court’s decision approving
the compromise agreement. Pursuant to DBP’s petition, the court declared the
defendant in contempt. Defendant appealed the order holding him in contempt.
When the case reached the Supreme Court, it was held that the defendant was
not guilty of contempt. The Court explained —
Under the aforesaid order of May 24, 1954, the easement
awarded or secured by the lower court to the plaintiffs was strictly
a personal one. The right of way granted was expressly limited to
the latter and their “family, friends, drivers, servants and jeeps.” In
the very language of the agreement the following appears:
El demandado Antonio Legaspi, permitira el
uso y paso en la calle privada construida por el en su
terreno a lo largo del terreno de los demandantes, a
estos, su familia, sus amigos, chofers, servidumbre y
de sus jeeps.
The servitude established was clearly for the benefit alone of
the plaintiffs and the persons above enumerated and it is clear that
the lower court, as well as the parties addressed by the said order,
did not intend the same to pass on to the plaintiffs’ successors-in-
interest. In other words, the right acquired by the original plaintiffs
was a personal servitude under Article 614 of the Civil Code, and
not a praedial servitude that inures to the benefit of whoever owns
the dominant estate.
In resisting the extension of the aforementioned easement
to the latter, the plaintiffs’ successors-in-interest, the respondent-
appellant, therefore, was not defying the decision of March 11,
1954 which was then no longer subsisting, nor the order of May 24,
1954 since the said successors-in-interest had no right thereunder.
Another evidence that the servitude in question was personal
to the plaintiffs is the fact that the same was granted to the latter
without any compensation to the respondent-appellant.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Easements in General
[112.2] Legal and Voluntary Easement
Easements are established either by law or by the will of the
owners. The former are called “legal” and the latter “voluntary” ease-
ments.21
Legal easements are those which can be enforced by force of law
and, therefore, may be established even against the will of the owner
of the servient estate.22 Legal easements may have for their objects
either public use, in which case the easement is called “public legal
easement,” or the interest of private persons, in which case the easement
is called “private legal easement.” Examples of legal easements are the
following:
(1) Easement relating to waters (Arts. 637-648, NCC);
(2) Easement of right of way (Arts. 649-657, NCC);
(3) Easement of party wall (Arts. 658-666, NCC);
(4) Easement of light and view (Arts. 667-673, NCC);
(5) Easement of drainage of buildings (Arts. 674-676, NCC);
(6) Easement of distances (Arts. 677-681, NCC);
(7) Easement of nuisance (Arts. 682-683, NCC); and
(8) Easement of lateral and subjacent support (Arts. 684-687,
NCC).
A voluntary easement is that which is created by reason of the
will of the owner of the servient estate.23 Note that only the owner can
constitute a servitude over his property since it operates as a limitation
upon his title or ownership. Or, to be more accurate, it is only the owner
who can create a servitude that will bind the servient estate (praedium
serviens). All other servitudes which are imposed by non-owners (such
usufructuary, possessors-in-good faith, lessee, etc.) do not bind the
servient estate but only the person establishing the same. Necessarily,
such servitudes shall terminate upon the termination of the right of the
person establishing the same.
21
Art. 619, NCC.
22
II Caguioa, Civil Code of the Phil., 1966 ed., 290, citing 2 Castan, 9th ed., 576.
23
Art. 619, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Easements in General
[112.5] Positive and Negative Easement
A positive easement is one which imposes upon the owner of the
servient estate the obligation of allowing something to be done on his
property (servitutes in patendo); it is negative when it prohibits the
owner of the servient estate from doing something which he could
lawfully do if the easement did not exist (servitutes in non faciendo).32
In positive easement, the right of the owner to exclude any person
from the enjoyment of his property, which right is guaranteed in Article
429 of the New Civil Code, is restricted, in the sense that he is obliged to
allow something to be done on his property.33 An example of a positive
easement is the easement of right of way. A negative easement, on the
other hand, does not involve any restriction on the owner’s right to
exclude. Instead, the owner is simply prohibited from doing something
on his property which he could lawfully do if the easement did not
exist.34 An example of a negative easement is an easement not to build
higher (altius non tollendi).35
An easement may not consist, however, in the right to demand
that the servient owner do something (servitutes in faciendo). For if it
consists in the right to an act to be done by the owner of the servient
estate, such right is merely in the nature of a jus in personam against
that determinate person. Hence, the true reason why a servitude cannot
consist in faciendo is that, if it did, the right created could not be jus in
rem since the same will not fall over the thing but on the person.
While Article 616 of the New Civil Code may seem to allow a
servitutes in faciendo when it says that positive easement may consist in
the servient owner doing something himself, the easements in faciendo
here are only those which are considered as accessory obligations to
a praedial servitude.36 As aptly observed by Senator Tolentino, citing
Ruggiero, an easement can never consist in a personal prestation to do
on the part of the owner of the servient estate; the obligation imposed
upon him is always negative.37 In other words, whether the easement is
32
Art. 616, NCC.
33
Art. 616, NCC.
34
Id.
35
See Amor v. Tolentino, G.R. No. L-48384, Oct. 11, 1943.
36
See 2 Castan, 9th ed., 548.
37
II Tolentino, Civil Code of the Phil., 1992 ed., 355, citing 1 Ruggiero 716-726.
509 510 PROPERTY
[112.3] Continuous and Discontinuous Easements
Under civil law and its jurisprudence, easements are either
continuous or discontinuous according to the manner they are exercised,
not according to the presence of apparent signs or physical indications
of the existence of such easements.24 Thus, an easement is continuous
if its use is, or may be, incessant without the intervention of any act of
man, like the easement of drainage;25 and it is discontinuous if it is used
at intervals and depends on the act of man, like the easement of right
of way.26 Stated otherwise, continuous easements are those of which
the enjoyment is, or may be, continual, without the necessity of any
actual interference by man; while discontinuous easements are those,
the enjoyment of which can be had only by the interference of man.27
A good example of a continuous easement is the easement of light
and view. On the other hand, easement of right of way is an example
of a discontinuous easement because its use is at intervals and depends
upon the acts of man; it can be exercised only if a man passes or puts
his feet over somebody else’s land.28
[112.4] Apparent and Non-Apparent Easements
Apparent easements are those which are made known and are
continually kept in view by external signs that reveal the use and
enjoyment of the same.29 Non-apparent easements, on the other hand,
are those which show no external indication of their existence.30 Thus,
it is the presence of physical or visual signs that classifies an easement
into apparent or non-apparent. Thus, a road (which reveals a right of
way) and a window (which evidences a right to light and view) are
apparent easements, while an easement of not building beyond a certain
height is non-apparent.31
24
Bogo-Medellin Milling Co. v. CA, supra.
25
Arts. 615, 646, NCC.
26
Id.
27
Bouvier’s Law Dictionary, 3rd revision, p. 968.
28
Abellana, Sr. v. CA, 208 SCRA 316 (1992), citing 4 Manresa 597; Haffman v. Shoe-
maker, 71 SE 198, both cited on p. 454, Vol. 2, 6th Ed., Paras, Civil Code of the Philippines.
29
Art. 615, 4th par., NCC.
30
Art. 615, 5th par., NCC.
31
Bogo-Medellin Milling Co. v. CA, supra.
511 512 PROPERTY
a positive or a negative one, the obligation imposed upon the servient
owner is always a negative one. In positive easement, for example, the
obligation of the servient owner is not to interfere in the use of his
property by the holder of the easement. In negative easement, on the
other hand, the obligation of the servient owner is to refrain from doing
something on his property.
Art. 617. Easements are inseparable from the estate to which they
actively or passively belong. (534)
Art. 618. Easements are indivisible. If the servient estate is divided
between two or more persons, the easement is not modified, and each of
them must bear it on the part which corresponds to him.
If it is the dominant estate that is divided between two or more per-
sons, each of them may use the easement in its entirety, without chang-
ing the place of its use, or making it more burdensome in any other way.
(535)
Art. 619. Easements are established either by law or by the will of
the owners. The former are called legal and the latter voluntary ease-
ments. (536)
§ 113. Characteristics of Easements
Articles 617 and 618 provides for the characteristics of an
easement in that: (1) it is inseparable from the estate to which it actively
or passively belongs; and (2) it is indivisible.
[113.1] Inherence or Intransmissibility
As discussed in supra § 111.1.2, an easement is a real right which
falls over the property itself. Or, from the viewpoint of the obligation
imposed, the servitude is imposed upon the property itself and not
upon its owner. Hence, it is said that the easement or servitude is but
an accessory to the tenement of which it forms part.38 In the words of
Article 617 of the New Civil Code, the easement is inseparable from
the estate to which it actively or passively belongs. It cannot, therefore,
be alienated or mortgaged separately from the estate to which it forms
part.39 In addition, the servitude can be availed of against every person
38
Solid Manila Corp. v. Bio Hong Trading Co., 195 SCRA 748 (1991).
39
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Easements in General
who may subsequently acquire ownership of the estate subject to such
encumbrance.
Solid Manila Corp. v. Bio Hong Trading Co.
195 SCRA 748 (1991)
When Bio Hong Trading Co. (BHTC) acquired a parcel of land from its
prior owner, the same has already been subject to an easement of right of way
in favor of the public. Subsequently, the buyer BHTC constructed steel gates
across the alley (to which the encumbrance was imposed) thereby precluding
unhampered use thereof. Because of such closure, Solid Manila Corp. (SMC)
filed an injunction case against BHTC claiming that ever since, it had (as well
as other residents of neighboring estates) made use of the above private alley
and maintained and contributed to its upkeep. When the case reached the
Court of Appeals, the appellate court held that since the buyer BHTC acquired
title to the property and the alley, there was a merger which resulted in the
extinguishment of the easement. SMC, however, claimed that the sale in favor
of BHTC excluded the alley. The Supreme Court ruled in favor of SMC. The
Court explained —
It is true that the sale did include the alley. On this score,
the Court rejects the petitioner’s contention that the deed of sale
‘excluded’ it, because as a mere right-of-way, it can not be separated
from the tenement and maintain an independent existence. Thus:
Art. 617. Easements are inseparable from the
estate to which they actively or passively belong.
Servitudes are merely accessories to the tenements of which
they form part. Although they are possessed of a separate juridical
existence, as mere accessories, they can not, however, be alienated
from the tenement, or mortgaged separately.
The fact, however, that the alley in question, as an easement,
is inseparable from the main lot is no argument to defeat the
petitioner’s claims, because as an easement precisely, it operates
as a limitation on the title of the owner of the servient estate,
specifically, his right to use (jus utendi).
xxx xxx xxx
Hence, and so we reiterate, albeit the private respondent did
acquire ownership over the property –– including the disputed
alley –– as a result of the conveyance, it did not acquire the right to
close that alley or otherwise put up obstructions thereon and thus
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Easements in General
tude from the estates to which it relates. As a consequence, even if the
servient and dominant estates are divided between two or more persons,
the easement or the servitude continues to attach to the estates original-
ly affected. In case of division of the servient estate into several parts,
for example, all such parts, though divided, shall continue to bear the
encumbrance.41 In case of division of the dominant estate into several
parts, each and every part shall continue to enjoy the easement in its
entirety and without any modification.42
Section 2. Modes of Acquiring Easements
Art. 620. Continuous and apparent easements are acquired either by
virtue of a title or by prescription of ten years. (537a)
Art. 621. In order to acquire by prescription the easements referred
to in the preceding article, the time of possession shall be computed
thus: in positive easements, from the day on which the owner of the dom-
inant estate, or the person who may have made use of the easement,
commenced to exercise it upon the servient estate; and in negative ease-
ments, from the day on which the owner of the dominant estate forbade,
by an instrument acknowledged before a notary public, the owner of the
servient estate, from executing an act which would be lawful without the
easement. (538a)
Art. 622. Continuous non-apparent easements, and discontinuous
ones, whether apparent or not, may be acquired only by virtue of a title.
(539)
Art. 623. The absence of a document or proof showing the origin
of an easement which cannot be acquired by prescription may be cured
by a deed of recognition by the owner of the servient estate or by a final
judgment. (540a)
Art. 624. The existence of an apparent sign of easement between
two estates, established or maintained by the owner of both, shall be con-
sidered, should either of them be alienated, as a title in order that the
easement may continue actively and passively, unless, at the time the
ownership of the two estates is divided, the contrary should be provided
in the title of conveyance of either of them, or the sign aforesaid should
be removed before the execution of the deed. This provision shall also
apply in case of the division of a thing owned in common by two or more
persons. (541a)
41
Id.
42
Id.
513 514 PROPERTY
prevent the public from using it, because as a servitude, the alley is
supposed to be open to the public.
The Court is furthermore of the opinion, contrary to that
of the Court of Appeals, that no genuine merger took place
as a consequence of the sale in favor of the private respondent
corporation. According to the Civil Code, a merger exists when
ownership of the dominant and servient estates is consolidated
in the same person. Merger then, as can be seen, requires full
ownership of both estates.
One thing ought to be noted here, however. The servitude in
question is a personal servitude, that is to say, one constituted not
in favor of a particular tenement (a real servitude) but rather, for
the benefit of the general public.
Personal servitudes are referred to in the following article of
the Civil Code:
Art. 614. Servitudes may also be established for
the benefit of a community, or of one or more persons
to whom the encumbered estate does not belong.
In a personal servitude, there is therefore no “owner of a
dominant tenement” to speak of, and the easement pertains to per-
sons without a dominant estate, in this case, the public at large.
Merger, as we said, presupposes the existence of a prior
servient-dominant owner relationship, and the termination of that
relation leaves the easement of no use. Unless the owner conveys
the property in favor of the public — if that is possible — no
genuine merger can take place that would terminate a personal
easement.
For this reason, the trial court was not in error in rendering
summary judgment, and insofar as the respondent Court of Appeals
held that it (the trial court) was in error, the Court of Appeals is in
error.
[113.2] Indivisibility
Easements or servitudes are indivisible.40 This is but a necessary
consequence of the principle of inseparability of the easement or servi-
40
Art. 618, NCC.
515 516 PROPERTY
Art. 625. Upon the establishment of an easement, all the rights nec-
essary for its use are considered granted. (542)
Art. 626. The owner of the dominant estate cannot use the easement
except for the benefit of the immovable originally contemplated. Neither
can he exercise the easement in any other manner than that previously
established. (n)
§ 114. Acquisition of Easements
[114.1] Modes of Acquiring Easements
There are two (2) modes of acquiring easements: (1) by title
and (2) by prescription. All kinds of easements whether continuous or
discontinuous, apparent or non-apparent, positive or negative, may be
acquired by title.43 But only continuous and apparent easements may
be acquired by virtue of prescription.44 In other words, in order for
an easement to be acquired by virtue of prescription it must be both
continuous and apparent. By title as a mode of acquiring servitude, the
Civil Code refers to the “juridical act” which gives birth to the servitude,45
such as the law, donations, contracts and wills. Hence, the act may either
be inter vivos or mortis causa, may be onerous or gratuitous.46
An easement of right of way may be apparent but it is not a
continuous easement because its use is at intervals and depends upon
the acts of man.47 It can be exercised only if a man passes or puts his
feet over somebody else’s land.48 Hence, a right of way is not acquirable
by prescription.49 In his concurring opinion in the case of Ronquillo v.
Roco,50 Justice J.B.L. Reyes explained the reason why right of way may
not be acquired by virtue of prescription —
“The essence of this easement (‘servidumbre de
paso’) lies in the power of the dominant owner to cross or
traverse the servient tenement without being prevented or
43
Arts. 620, 622, NCC.
44
Art. 620, NCC.
45
See Concurring and Dissenting Opinion of Justice Laurel in North Negros Sugar Co. v.
Hidalgo, 63 Phil. 664 (1936).
46
4 Manresa, 5th ed., 552.
47
Abella, Sr. v. CA, 208 SCRA 316 (1992); Costabella Corp. v. CA, 193 SCRA 333
(1991).
48
Id.
49
Id., see also Bogo-Medellin Milling Co., Inc. v. CA, 407 SCRA 518 (2003).
50
G.R. No. L-10619, Feb. 28, 1958.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 517
EASEMENTS OR SERVITUDES
Easements in General
disturbed by its owner. As a servitude, it is a limitation on
the servient owner’s rights of ownership, because it restricts
his right to exclude others from his property. But such
limitation exists only when the dominant owner actually
crosses, or passes over the servient estate; because when he
does not, the servient owner’s right of exclusion is perfect
and undisturbed. Since the dominant owner can not be
continually and uninterruptedly crossing the servient estate,
but can do so only at intervals, the easement is necessarily of
an intermittent or discontinuous nature.
Because possession of a right consists in the enjoyment
of that right (old Civil Code, Art. 430; Art. 423, new Civil
Code) and to enjoy a right is to exercise it, it follows that
the possession (enjoyment or exercise) of a right of way
is intermittent and discontinuous. From this premise, it is
inevitable to conclude, with Manresa and Sanchez Roman,
that such easement can not be acquired by acquisitive
prescription (adverse possession) because the latter requires
that the possession be continuous or uninterrupted (old Civil
Code, Art. 1941; new Civil Code, Art. 1118).”
Bogo-Medellin Milling Co., Inc. v. Court of Appeals
407 SCRA 518 (2003)
Bogo-Medellin Milling Co., Inc. declared the property it was occupying to
be a “central railroad right of way” or “sugar central railroad right of way” from
1930 to 1963. It was only in 1965 that Bogo-Medellin Milling Co. filed a claim
over the property during the cadastral survey of Medellin. In 1989, a complaint
for recovery of the land was filed by the alleged owner. Bogo-Medellin Milling
Co. interposes, as defense, ownership of the land thru extraordinary acquisitive
prescription. As an alternative defense, Bogo-Medellin Milling Co. contended
that it became legally entitled to the easement of right of way over said land by
virtue of prescription under Article 620 of the Civil Code. On the issue of the
acquisition of easement of right of way, the Court held —
Petitioner contends that, even if it failed to acquire ownership
of the subject land, it nevertheless became legally entitled to the
easement of right of way over said land by virtue of prescription
under Article 620 of the Civil Code:
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 519
EASEMENTS OR SERVITUDES
Easements in General
easements, while an easement of not building beyond a certain
height is non-apparent.
In Cuba, it has been held that the existence of a permanent
railway does not make the right of way a continuous one; it is
only apparent. Therefore, it cannot be acquired by prescription.
In Louisiana, it has also been held that a right of passage over
another’s land cannot be claimed by prescription because this
easement is discontinuous and can be established only by title.
In this case, the presence of railroad tracks for the passage
of petitioner’s trains denotes the existence of an apparent but
discontinuous easement of right of way. And under Article 622
of the Civil Code, discontinuous easements, whether apparent
or not, may be acquired only by title. Unfortunately, petitioner
Bomedco never acquired any title over the use of the railroad
right of way whether by law, donation, testamentary succession or
contract. Its use of the right of way, however long, never resulted
in its acquisition of the easement because, under Article 622, the
discontinuous easement of a railroad right of way can only be
acquired by title and not by prescription.
To be sure, beginning 1959 when the original 30-year grant
of right of way given to petitioner Bomedco expired, its occupation
and use of Cadastral Lot No. 954 came to be by mere tolerance of
the respondent heirs. Thus, upon demand by said heirs in 1989
for the return of the subject land and the removal of the railroad
tracks, or, in the alternative, payment of compensation for the use
thereof, petitioner Bomedco which had no title to the land should
have returned the possession thereof or should have begun paying
compensation for its use.
But when is a party deemed to acquire title over the use of
such land (that is, title over the easement of right of way)? In at
least two cases, we held that if: (a) it had subsequently entered
into a contractual right of way with the heirs for the continued
use of the land under the principles of voluntary easements or (b)
it had filed a case against the heirs for conferment on it of a legal
easement of right of way under Article 629 of the Civil Code, then
title over the use of the land is deemed to exist. The conferment
of a legal easement of right of way under Article 629 is subject to
proof of the following:
(1) it is surrounded by other immovables and has no
adequate outlet to a public highway;
518 PROPERTY
“Continuous and apparent easements are acquired either by
virtue of a title or by prescription of ten years.”
The trial court and the Court of Appeals both upheld this
view for the reason that the railroad right of way was, according
to them, continuous and apparent in nature. The more or less
permanent railroad tracks were visually apparent and they
continuously occupied the subject strip of land from 1959 (the year
the easement granted by Feliciana Santillan to petitioner expired).
Thus, with the lapse of the 10-year prescriptive period in 1969,
petitioner supposedly acquired the easement of right of way over
the subject land.
Following the logic of the courts a quo, if a road for the
use of vehicles or the passage of persons is permanently cemented
or asphalted, then the right of way over it becomes continuous in
nature. The reasoning is erroneous.
Under civil law and its jurisprudence, easements are either
continuous or discontinuous according to the manner they are
exercised, not according to the presence of apparent signs or
physical indications of the existence of such easements. Thus, an
easement is continuous if its use is, or may be, incessant without
the intervention of any act of man, like the easement of drainage;
and it is discontinuous if it is used at intervals and depends on the
act of man, like the easement of right of way.
The easement of right of way is considered discontinuous
because it is exercised only if a person passes or sets foot on
somebody else’s land. Like a road for the passage of vehicles
or persons, an easement of right of way of railroad tracks is
discontinuous because the right is exercised only if and when a
train operated by a person passes over another’s property. In other
words, the very exercise of the servitude depends upon the act or
intervention of man which is the very essence of discontinuous
easements.
The presence of more or less permanent railroad tracks does
not in any way convert the nature of an easement of right of way
to one that is continuous. It is not the presence of apparent signs
or physical indications showing the existence of an easement,
but rather the manner of exercise thereof, that categorizes such
easement into continuous or discontinuous. The presence of
physical or visual signs only classifies an easement into apparent
or non-apparent. Thus, a road (which reveals a right of way) and
a window (which evidences a right to light and view) are apparent
520 PROPERTY
(2) payment of proper indemnity;
(3) the isolation is not the result of its own acts; and
(4) the right of way claimed is at the point least prejudicial
to the servient estate, and, insofar as consistent with
this rule, the distance from the dominant estate to the
highway is the shortest.
None of the above options to acquire title over the railroad
right of way was ever pursued by petitioner despite the fact that
simple resourcefulness demanded such initiative, considering
the importance of the railway tracks to its business. No doubt, it
is unlawfully occupying and using the subject strip of land as a
railroad right of way without valid title yet it refuses to vacate it
even after demand of the heirs. Furthermore, it tenaciously insists
on ownership thereof despite a clear showing to the contrary.
[114.2] Acquisition Thru Prescription
If the easement is both continuous and apparent, it may be
acquired by virtue of prescription within a period of ten (10) years.51
The commencement of the ten-year period of prescription will depend
on whether the easement is positive or negative, as follows:
(a) If the easement is positive, the 10-year period is counted
from the day on which the owner of the dominant estate,
or the person who may have made use of the easement,
commenced to exercise it upon the servient estate;52 or
(b) If the easement is negative, the 10-year period is counted
from the day on which the owner of the dominant estate
forbade, by an instrument acknowledged before a notary
public, the owner of the servient estate, from executing an
act which would be lawful without the easement.53
The foregoing principles are best explained if we are going
to consider the acquisition of easement of light and view through
prescription. At the outset, it must be pointed out that a building may
receive light in various manners in the enjoyment of an easement of
51
Art. 620, NCC.
52
Art. 621, NCC.
53
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 521
EASEMENTS OR SERVITUDES
Easements in General
light, because the openings through which the light penetrates may be
made in one’s own wall, in the wall of one’s neighbor, or in a party wall.
The legal doctrine applicable in either one of these cases is different,
owing to the fact that, although anyone may open windows in his own
wall, no one has a right to do so in the wall of another without the
consent of the owner, and it is also necessary, in accordance with Article
667 of the New Civil Code, to obtain the consent of the other co-owner
when the opening is to be made in a party wall.54
When a person opens windows in his own building he does
nothing more than exercise an act of ownership inherent in the right of
property, which, under Article 428 of the New Civil Code, empowers
him to deal with his property as he may see fit, with no limitations
other than those established by law. By reason of the fact that such an
act is performed wholly on a thing which is wholly the property of the
one opening the window, it does not in itself establish any easement,
because the property is used by its owner in the exercise of dominion,
and not as the exercise of an easement: “For a man should not use
that which belongs to him as if it were a service only, but as his own
property.” Coexistent with this right is the right of the owner of the
adjacent property to cover up such windows by building on his own
land or raising a wall contiguously to the wall in which the windows
are opened, by virtue of the reciprocity of rights which should exist
between abutting owners, and which would cease to exist if one could
do what he pleased on his property and the other could not do the same
on his. Hence, it is that the use of the windows opened in a wall of one’s
own property, in the absence of some covenant or express agreement to
the contrary, is regarded as an act of mere tolerance on the part of the
owner of the abutting property, and does not create any right to maintain
the windows to the prejudice of the latter. The mere toleration of such
an act does not imply on the part of the abutting owner a waiver of his
right to freely build upon his land as high as he may see fit, nor does it
avail the owner of the windows for the effects of possession, because it
is a mere possession at will.55
From the foregoing, it follows that the easement of light with
respect to the openings made in one’s own edifice does not consist
54
See Cortes v. Yu-Tibo, 2 Phil. 24 (1903).
55
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 523
EASEMENTS OR SERVITUDES
Easements in General
If the window, on the other hand, is opened in a party wall, and not
in a wall the sole and exclusive property of the owner of the dominant
tenement, the easement of lights is positive and the 10-year period of
prescription commences from the time of the opening of the window.
The reason for this is because no part owner can, without the consent
of the other, make in a party wall a window or opening of any kind, as
provided in Article 667 of the New Civil Code. Hence, the very fact
of making such openings in such a wall might, therefore, be the basis
for the acquisition of a prescriptive title without the necessity of any
active opposition, because it always presupposes the express or implied
consent of the other part owner of the wall, which consent, in turn,
implies the voluntary waiver of the right of such part owner to oppose
the making of such openings or windows in such a wall.59
The same rule will apply if the window is opened on the wall
belonging to one’s neighbor. The 10-year prescriptive period commences
from the time of the opening of the window. Stated otherwise, if anyone
shall open a window in the wall of his neighbor, through which the
light enters his house, by this sole fact he shall acquire a prescriptive
title to the easement of light, if the time fixed by law (ten years) expires
without opposition on the part of the owner of the wall.60
[114.3] Proof of Easement
The presumption is always against the existence of an easement
for “property is always presumed free from any and all encumbrances.”61
Hence, the law requires that the easement must be acquired either by a
title or by prescription.62 If the easement is acquired through prescription,
necessarily there is no document evidencing its existence and the same
may only be established in a judicial proceeding through preponderance
of evidence. If the easement, however, is one which cannot be acquired
through prescription and there is no document evidencing the same, or
such document is no longer available for whatever reason, the absence
of such proof may be cured by a deed of recognition by the owner of the
59
Id.
60
Id.
61
See Concurring and Dissenting Opinion of Justice Laurel in North Negros Sugar Co. v.
Hidalgo, 63 Phil. 664.
62
Arts. 620 and 622, NCC.
522 PROPERTY
precisely in the fact of opening them or using them, inasmuch as they
may be covered up at any time by the owner of the abutting property,
and, as Manresa says in his commentaries on the Civil Code, “there
is no true easement as long as the right to impede its use exists.” The
easement really consists of in prohibiting or restraining the adjacent
owner from doing anything which may tend to cut off or interrupt the
light; in short, it is limited to the obligation of not impeding the light
(ne luminibus officiatur). The latter coincides in its effects, from this
point of view, with the obligation of refraining from increasing the
height of a building (altius non tollendi), which, although it constitutes
a special easement, has for its object, at times, the prevention of any
interruption of the light enjoyed by the adjacent owner.56 In this sense,
it has been commented that an easement of light and view necessarily
includes an easement not to build higher (altius non tollendi). These
two easements necessarily go together because an easement of light
and view requires that the owner of the servient estate shall not build
to a height that will obstruct the window. They are, as it were, the two
sides of the same coin. While an easement of light and view is positive,
that of altius non tollendi is negative.57 It will thus be observed that
the owner of the servient estate subject to such easement is under no
obligation whatsoever to allow anything to be done on his tenement,
nor to do anything there himself, but is simply restrained from doing
anything thereon which may tend to cut off the light from the dominant
estate, which he would undoubtedly be entitled to do were it not for the
existence of the easement. If, then, the first condition is that which is
peculiar to positive easements, and the second condition that which is
peculiar to negative easements. Consequently, the easement of lights in
the case of windows opened in one’s own wall is of a negative character,
and, as such, can not be acquired by prescription under Article 621 of
the New Civil Code, except by counting the time of possession from the
date on which the owner of the dominant estate may, by an instrument
acknowledged before a notary public, have prohibited the owner of the
servient estate from doing something which it would be lawful for him
to do were it not for the easement.58
56
Id.
57
See Amor v. Florentino, G.R. No. L-48384, Oct. 11, 1943.
58
See Cortes v. Yu-Tibo, supra.
524 PROPERTY
servient estate.63 If the owner of the servient estate denies the existence of
the easement or refuses to execute the deed of recognition, the existence
of the easement may nonetheless be established in a judicial proceeding
through preponderance of evidence.
Note that the existence of a title which serves as the basis for
the easement may be proven through oral testimonies of witnesses as
the same is not covered by the Statute of Frauds. Even if the servitude
is imposed upon a parcel of land and the obligation arises from an
oral contract, such agreement is not covered by the Statute of Frauds
considering that “not all agreements affecting land must be put in
writing to attain enforceability.”64 Under paragraph 2(e) of Article 1403
of the New Civil Code, such formality is required only of contracts
involving leases for longer than one year, or for the sale of real property
or of an interest therein.
[114.4] Easement By Apparent Sign or Legal Presumption
As discussed in supra § 114.1, an easement may be acquired in
two ways: (1) by title or (2) by prescription.65 Article 624 of the New
Civil Code provides for acquisition of easements by title through the
operation of law. This article contemplates of a situation where the two
estates belonged previously to only one person but due to alienation or
partition, the ownership of the two estates is divided. Prior, however,
to the division of ownership there exists between the two estates an
apparent sign of easement. In other words, an easement would have
existed between the two estates had the ownership of said estates resided
in two different persons. In such a situation, an easement is created by
way of title upon the division of ownership of the two estates unless,
at the time of the division of ownership of the two estates, the contrary
should be provided in the title of conveyance of either of them or the
apparent sign should be removed before the execution of the deed.66
It should be noted that while Article 624 declares that the easement is
to “continue” the easement actually arises for the first time only upon
alienation of either estate, inasmuch as before that time there is no
63
Art. 623, NCC.
64
Hernandez v. CA, 160 SCRA 821, 826 (1988).
65
Arts. 620 and 622, NCC.
66
Art. 624, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Easements in General
easement to speak of, there being but one owner of both estates.67 As
discussed in supra §§ 111.1.4 and 112.1, a praedial or real easement is
one of the rights in another’s property, or jura in re aliena and nobody
can have an easement over his own property, nimini sua res servit.
Hence, the easement is not created till the division of the property. At
this point, the requisite that there must be two proprietors — one of the
dominant estate and another of the servient estate — is fulfilled.68
The foregoing principles are illustrated in the case of Gargantos v.
Tan Yanon, as follows:
Gargantos v. Tan Yanon
G.R. No. L-14652, June 30, 1952
Francisco Sanz was the former owner of a parcel of land, with the
buildings and improvements thereon. He subdivided the lot into three and then
sold each portion to different persons. One portion was purchased by Guillermo
Tengtio who subsequently sold it to Vicente Uy Veza. Another portion, with
the house of strong materials thereon, was sold to Tan Yanon (“respondent”).
This house has on its northeastern side, doors and windows over-looking the
third portion, which, together with the camarin and small building thereon,
after passing through several hands, was finally acquired by Juan Gargantos
(“petitioner”). Subsequently, Gargantos applied for a permit to construct a
combined residential house and warehouse on his lot. Tan Yanon opposed
approval of this application on the ground that the construction of the building
would prevent him from receiving light and enjoying the view through the
window of his house. Gargantos argued that Tan Yanon never acquired any
easement either by title or by prescription since there is no deed establishing
an easement. He further argued that neither he nor his predecessors-in-interest
have ever executed any deed whereby they recognized the existence of the
easement. In addition, Gargantos claimed that Tan Yanon did not acquire
easement by prescription because the latter never formally forbidden the
former from performing any act which would be lawful without the easement.
The Supreme Court held that Tan Yanon acquired the right of easement, not by
prescription, but by title pursuant to Article 624 of the New Civil Code. The
easement, according to the Court, was created after the sale of the estate to Tan
Yanon. The Court explained —
It is obvious, however, that Article 538, O.C.C. (now
Article 621, N.C.C.) and the doctrine in the Yu-Tibo case are not
67
Gargantos v. Tan Yanon, G.R. No. L-14652, June 30, 1952.
68
See Amor v. Tolentino, 74 Phil. 404 (1943).
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Easements in General
a person different from the owner;69 (4) that the ownership over the two
estates is later on divided, either by alienation or partition; and (5) that
at the time of division of ownership, nothing is stated in the document
of alienation or partition contrary to the easement nor is the sign of the
easement removed before the execution of the document. It will thus be
seen that under Article 624 the existence of the apparent sign has for all
legal purposes the same character and effect as a title of acquisition of
the easement.70
Article 624 also applies to a situation where the two estates were
previously under a state of co-ownership but prior to partition there
exist an apparent sign of easement in one of the estates. For example,
“A” and “B” used to be co-owners of a parcel of land. “A,” during the
existence of the co-ownership constructed a house on one-half portion
of the co-owned property. On the northeastern side of the house, there
are windows and doors which serve as passages for light and view.
Subsequently, “A” and “B” executed a deed of partition whereby the
portion where the house stands was allotted to “A” while the other
half was allotted to “B.” The existence of the doors and windows on
the northeastern side of the aforementioned house, is equivalent to a
title, for the visible and permanent sign of an easement is the title that
characterizes its existence. If nothing has been stated in the deed of
partition contrary to the easement and “A” did not renounce the use of
the windows and doors, either by stipulation or by actually closing them
permanently, the easement is created by title pursuant to Article 624
upon the actual partition of the co-owned property.
According to the Supreme Court in the case of Amor v. Tolentino,71
Article 624 also applies to a division of property by succession.
Section 3. Rights and Obligations of the
Owners of the Dominant and Servient Estates
Art. 627. The owner of the dominant estate may make, at his own
expense, on the servient estate any works necessary for the use and
preservation of the servitude, but without altering it or rendering it more
burdensome.
69
II Caguioa, Civil Code of the Phil., 1966 ed., 276, citing the Decision of the Supreme
Court of Spain of May 27, 1899.
70
Amor v. Tolentino, supra.
71
Supra.
525 526 PROPERTY
applicable herein because the two estates, that now owned by
petitioner, and that owner by respondent, were formerly owned
by just one person, Francisco Sanz. It was Sanz who introduced
improvements on both properties. On that portion presently
belonging to respondent, he constructed a house in such a way that
the northeastern side thereof extends to the wall of the camarin
on the portion now belonging to petitioner. On said northeastern
side of the house, there are windows and doors which serve as
passages for light and view. These windows and doors were in
existence when respondent purchased the house and lot from Sanz.
The deed sale did not provide that the easement of light and view
would not be established. This then is precisely the case covered
by Article 541, O.C.C. (now Article 624, N.C.C.) which provides
that the existence of an apparent sign of easement between two
estates, established by the proprietor of both, shall be considered,
if one of them is alienated, as a title so that the easement will
continue actively and passively, unless at the time the ownership
of the two estate is divided, the contrary is stated in the deed
of alienation of either of them, or the sign is made to disappear
before the instrument is executed. The existence of the doors
and windows on the northeastern side of the aforementioned
house, is equivalent to a title, for the visible and permanent
sign of an easement is the title that characterizes its existence
(Amor v. Florentino, 74 Phil. 403). It should be noted, however,
that while the law declares that the easement is to “continue” the
easement actually arises for the first time only upon alienation of
either estate, inasmuch as before that time there is no easement to
speak of, there being but one owner of both estates (Articles 530,
O.C.C., now Articles 613, N.C.C).
We find that respondent Tan Yanon’s property has an
easement of light and view against petitioner’s property. By reason
of his easement petitioner cannot construct on his land any building
unless he erects it at a distance of not less than three meters from
the boundary line separating the two estates. (Emphasis supplied)
For the acquisition of easement by title under Article 624 to apply,
the following requisites must concur: (1) that there exist an apparent sign
of servitude between two estates; (2) that at the time of the establishment
of such sign, the ownership of the two estates resides in one person; (3)
that the sign of the easement be established by the owner of both estates
because the article will not apply when the easement is established by
527 528 PROPERTY
For this purpose he shall notify the owner of the servient estate, and
shall choose the most convenient time and manner so as to cause the
least inconvenience to the owner of the servient estate. (543a)
Art. 628. Should there be several dominant estates, the owners of
all of them shall be obliged to contribute to the expenses referred to in
the preceding article, in proportion to the benefits which each may derive
from the work. Any one who does not wish to contribute may exempt him-
self by renouncing the easement for the benefit of the others.
If the owner of the servient estate should make use of the easement
in any manner whatsoever, he shall also be obliged to contribute to the
expenses in the proportion stated, saving an agreement to the contrary.
(544)
Art. 629. The owner of the servient estate cannot impair, in any man-
ner whatsoever, the use of the servitude.
Nevertheless, if by reason of the place originally assigned, or of the
manner established for the use of the easement, the same should become
very inconvenient to the owner of the servient estate, or should prevent
him from making any important works, repairs or improvements thereon,
it may be changed at his expense, provided he offers another place or
manner equally convenient and in such a way that no injury is caused
thereby to the owner of the dominant estate or to those who may have a
right to the use of the easement. (545)
Art. 630. The owner of the servient estate retains the ownership of
the portion on which the easement is established, and may use the same
in such a manner as not to affect the exercise of the easement. (n)
§ 115. Rights and Obligations of the Owner of Dominant Estate
[115.1] Effect of Easement Upon The Rights of Servient Owner
As discussed in supra § 111.1.2, an easement consists in the limited
use and enjoyment of the property subjected to such encumbrance but
without possession. In other words, it gives the holder of the easement an
incorporeal interest on the property but grants no title thereto.72 Hence,
the owner of the servient estate retains the ownership of the portion
on which the easement is established, and may use the same in such a
manner as not to affect the exercise of the easement.73 For example, if an
easement of right of way is established, the owner of the servient estate
may do anything on his property as he pleases, in the exercise of his
72
Bogo-Medellin Milling Co. v. CA, supra.
73
Art. 630, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 529
EASEMENTS OR SERVITUDES
Easements in General
right of enjoyment, but he may not enclose the property because such
act will affect the exercise of the easement. In this example, the owner
of the servient estate has an obligation not to obstruct or hinder the free
passage over the servient estate of any person entitled to make use of
it. As such, the holder of the easement may demand for the removal of
such obstruction.
While the owner of the servient estate is prohibited from impairing,
in any manner whatsoever, the use of the servitude,74 he may, however,
change the place of the easement or the manner of its use provided the
following requisites are satisfied:
(1) the place originally assigned or the manner established for
the use of the easement has become very inconvenient to
the owner of the servient estate or it has prevent him from
making any important works, repairs or improvements
thereon;
(2) the servient owner offers another place or another manner of
use equally convenient;
(3) no injury is caused thereby to the owner of the dominant
estate or to those who may have a right to the use of the
easement; and
(4) the expenses that will be incurred in the process shall be
borne by the owner of the servient estate.75
[115.2] Extent of Rights Granted to the Holder of Easement
Upon the establishment of an easement, all the rights necessary for
its use are considered granted.76 Hence, the establishment of a principal
easement carries with it the grant of accessory ones. For example, an
easement for drawing waters carries with it the easement of right of
way. This is expressly recognized in Article 641 of the New Civil Code,
to wit:
“Art. 641. Easements for drawing water and for watering
animals carry with them the obligation of the owners of the
74
Art. 629, 1st par., NCC.
75
Art. 629, 2nd par., NCC.
76
Art. 625, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 531
EASEMENTS OR SERVITUDES
Easements in General
occupation of the tenement or estate. Hence, in the ultimate analysis,
the right of servitude (jus servitutes) resides in the estate (praedium)
itself and not in the physical person who successively occupies or
enjoys it. For this reason, the owner of the dominant estate cannot use
the easement (or the right of servitude) except for the benefit of the
immovable originally contemplated,80 for such right, to repeat, attaches
to the immovable itself and not to its owner.
Neither may the owner of the dominant estate exercise the
easement in any other manner than that previously established.81 When
the easement has been established in a general way, without any
specific purpose, it can be used for all the needs of the dominant estate,
and may be adopted to any new modification in the tenement itself.82
However, when a particular purpose has been specified, the rule is that
the easement cannot be used for a different purpose except when the
change of use does not make the easement more burdensome, in which
case it may be allowed.83
Section 4. Modes of Extinguishment of Easements
Art. 631. Easements are extinguished:
(1) By merger in the same person of the ownership of the domi-
nant and servient estates;
(2) By non-user for ten years; with respect to discontinuous ease-
ments, this period shall be computed from the day on which they ceased
to be used; and, with respect to continuous easements, from the day on
which an act contrary to the same took place;
(3) When either or both of the estates fall into such condition that
the easement cannot be used; but it shall revive if the subsequent con-
dition of the estates or either of them should again permit its use, un-
less when the use becomes possible, sufficient time for prescription has
elapsed, in accordance with the provisions of the preceding number;
(4) By the expiration of the term or the fulfillment of the condition,
if the easement is temporary or conditional;
(5) By the renunciation of the owner of the dominant estate;
80
Art. 626, NCC.
81
Id.
82
II Tolentino, Civil Code of the Phil., 1992 ed., 369.
83
Id.
530 PROPERTY
servient estates to allow passage to persons and animals
to the place where such easements are to be used, and the
indemnity shall include this service. (556)”
As a consequence of the foregoing rule, the owner of the dominant
estate shall have the right to make any works on the servient estate if
the same be necessary for the use and preservation of the servitude.
This right, however, is subject to compliance with the following
requirements:
(1) The work must be necessary for the use and preservation of
the servitude;
(2) The work is done at the expense of the owner of the dominant
estate;
(3) The work can be done without altering the servitude or
rendering it more burdensome;
(4) The owner of the servient estate is first notified of the
intended work; and
(5) The time and manner of making the work should be the most
convenient to the owner of the servient estate or it is done in
such a manner that it causes the least inconvenience to the
owner of the servient estate.77
If there be several owners of the dominant estate, the expenses that
will be incurred in making the work shall be borne by all, in proportion
to the benefits which each may derive therefrom.78 Any one who does
not wish to contribute may exempt himself by renouncing the easement
for the benefit of the others.79
[115.3] Limitations Upon The Rights of Owner of Dominant Estate
As discussed in supra § 112.1.1., while it may appear that the right
of servitude (jus servitutes) is enjoyed by the owner or occupant of the
dominant estate, he does so only by reason of such occupancy. In other
words, the right of servitude (jus servitutes) that is being enjoyed by
the owner or occupant of the dominant estate is inseparable from the
77
Art. 627, NCC.
78
Art. 628, 1st par., NCC.
79
Id.
532 PROPERTY
(6) By the redemption agreed upon between the owners of the
dominant and servient estates. (546a)
Art. 632. The form or manner of using the easement may prescribe
as the easement itself, and in the same way. (547a)
Art. 633. If the dominant estate belongs to several persons in com-
mon, the use of the easement by any one of them prevents prescription
with respect to the others. (548)
§ 116. Extinguishment of Easements
An easement may be extinguished through any of the following
modes: (1) merger; (2) non-user; (3) impossibility of use; (4) expiration
of term; (5) fulfillment of condition; (6) renunciation; and (7)
redemption.84 In addition to the foregoing causes enumerated in Article
631 of the New Civil Code, the following may be added: (1) annulment
or rescission of title constituting the easement; (2) termination of the
right of the grantor; and (3) abandonment of the servient estate; and (4)
eminent domain.85
[116.1] Merger
As discussed in supra § 111.1.4, an easement is a right enjoyed
by another’s property, or jure in re aliena. Therefore, nobody can have
an easement over his own property, nimini sua res servit,86 for a man
should not use that which belongs to him as if it were a service only,
but as his own property.87 For this reason, a real or praedial easement
requires the existence of two distinct immovables belonging to different
owners (see discussions in supra § 112.1). As a consequence, if there
is a merger in the same person of the ownership of the dominant and
servient estates, the easement is extinguished.88 For the same reason, a
personal easement established for the benefit of a particular person is
also extinguished if the said holder of the easement acquires ownership
of the servient estate. But if the personal easement is established for
the benefit of a community, the fact that one of the members of the
84
Art. 631, NCC.
85
4 Manresa, 5th ed., 590.
86
Amor v. Tolentino, supra.
87
Cortes v. Yu-Tibo, supra.
88
Art. 631(1), NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 533
EASEMENTS OR SERVITUDES
Easements in General
community acquires ownership of the servient estate will not result in a
genuine merger that will terminate the personal easement.89
For a real or praedial easement to be extinguished by way of
merger, the merger must involve full ownership of both the dominant
and servient estates.90 Thus, it has been held that when a person acquires
only a part interest in the servient estate it cannot be said that ownership
of the dominant and servient estates has been merged in the same
person.91 It is not necessary, however, that the merger takes place to the
full extent of the property, it being sufficient that the merger takes place
with regard to that part affected by the servitude or that part for the
benefit of which the servitude was established.92
[116.2] Non-User
Non-user, as a mode of extinguishment of easement, presupposes
that the easement was used but later abandoned. For easement to be
extinguished under this mode, it is necessary that the non-user must
have lasted for a period of ten (10) years.93 The computation of the
10-year period of extinctive prescription shall depend on whether the
easement is continuous or discontinuous, as follows:
(a) If the easement is discontinuous, the 10-year period is
computed from the day on which the easement was not
used.94 Since the use of the easement depends upon the acts
of man, if no such act has been executed for a period of ten
(10) years the easement is extinguished.
(b) If the easement is continuous, in which case the use of the
easement does not depend upon the acts of man, the 10-year
period is counted from the day on which an act contrary to
the easement took place.95 For example, if the owner of the
lower estate constructed a series of dikes to prevent the flow
of excess waters coming from the higher estates, the legal
89
See Solid Manila Corp. v. Bio Hong Trading Co., Inc., supra.
90
Id.
91
Cabacungan v. Corrales, 95 Phil. 919.
92
II Caguioa, Civil Code of the Phil., 1966 ed., 285, citing 4 Manresa, 5th ed., 581-582.
93
Art. 631(2), NCC.
94
Id.
95
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 535
EASEMENTS OR SERVITUDES
Legal Easements
[116.4] Renunciation
The renunciation of the easement by the owner of the dominant
estate must be specific, clear and express.101 Hence, a tacit renunciation
will not be sufficient.
[116.5] Redemption
The redemption being referred to in paragraph 6 of Article 631 of
the New Civil Code is the release of the servient estate from the servitude
upon agreement of the owners of both estates and upon payment by the
owner of the servient estate of the corresponding consideration to the
owner of the dominant estate.
Chapter 2
LEGAL EASEMENTS
Section 1. General Provisions
Art. 634. Easements imposed by law have for their object either pub-
lic use or the interest of private persons. (549)
Art. 635. All matters concerning easements established for public
or communal use shall be governed by the special laws and regulations
relating thereto, and, in the absence thereof, by the provisions of this
Title. (550)
Art. 636. Easements established by law in the interest of private
persons or for private use shall be governed by the provisions of this
Title, without prejudice to the provisions of general or local laws and
ordinances for the general welfare.
These easements may be modified by agreement of the interested
parties, whenever the law does not prohibit it or no injury is suffered by a
third person. (551a)
§ 117. Legal Easement, In General
The concept of legal easement and its classifications are discussed
previously in supra § 112.2. As therein discussed, the Civil Code
provides for the following classes of private legal easements:
(a) Easement relating to waters (Arts. 637-648, NCC);
101
Fuentes v. Rivera (CA), 40 O.G. (Sup. 12) 106.
534 PROPERTY
easement of drainage is extinguished ten (10) years after the
construction of the dikes.96
If the dominant estate is under a state of co-ownership, the use
of the easement by any of the co-owners will prevent the running of
the 10-year period of extinctive prescription by non-user.97 This must
be the rule since each co-owner of property which is held pro indiviso
has the right to exercise his rights over the whole property and may use
and enjoy the same with no other limitations other than that he shall not
injure the interests of his co-owners [see discussions in supra § 62.2.2].
In addition, since co-ownership is a form of trust, the possession by a
co-owner of the entire dominant estate is considered for the benefit of
all [see discussions in supra § 73.1].
[116.3] Impossibility of Use
If there are circumstances which rendered impossible the use of
the easement, the same is merely suspended until subsequent conditions
shall again permit the use of the easement.98 In the following situations,
however, the easement is not merely suspended but extinguished:
(a) If the circumstances which cause the impossibility of use
shall be irreparable, in which case, the easement is absolutely
extinguished.
(b) If the circumstances which cause the impossibility of use are
reparable, the easement is likewise extinguished if the period
of extinctive prescription by non-user has already lapsed.99
In the latter case, the circumstance which renders the use of the
easement impossible must not be in the nature of a fortuitous event;
otherwise, the easement may not be extinguished by non-user, in
which case, the easement is merely suspended. According to Senator
Tolentino, the non-user must be due to voluntary abstention by the
dominant owner, and not to fortuitous event, because the basis of this
cause of extinguishment is presumptive renunciation.100
96
Ongsiako v. Ongsiako, G.R. No. L-7510, March 30, 1957.
97
See Art. 633, NCC.
98
Art. 631(3), NCC.
99
Id.
100
II Tolentino, Civil Code of the Phil., 1992 ed., 376, citing 2-II Colin & Capitant 1157.
536 PROPERTY
(b) Easement of right of way (Arts. 649-657, NCC);
(c) Easement of party wall (Arts. 658-666, NCC);
(d) Easement of light and view (Arts. 667-673, NCC);
(e) Easement of drainage of buildings (Arts. 674-676, NCC);
(f) Easement of distances (Arts. 677-681, NCC);
(g) Easement of nuisance (Arts. 682-683, NCC); and
(h) Easement of lateral and subjacent support. (Arts. 684-687,
NCC)
Section 2. Easements Relating to Waters
Art. 637. Lower estates are obliged to receive the waters which natu-
rally and without the intervention of man descend from the higher estates,
as well as the stones or earth which they carry with them.
The owner of the lower estate cannot construct works which will
impede this easement; neither can the owner of the higher estate make
works which will increase the burden. (552)
Art. 638. The banks of rivers and streams, even in case they are of
private ownership, are subject throughout their entire length and within a
zone of three meters along their margins, to the easement of public use in
the general interest of navigation, floatage, fishing and salvage.
Estates adjoining the banks of navigable or floatable rivers are, fur-
thermore, subject to the easement of towpath for the exclusive service of
river navigation and floatage.
If it be necessary for such purpose to occupy lands of private own-
ership, the proper indemnity shall first be paid. (553a)
Art. 639. Whenever for the diversion or taking of water from a river
or brook, or for the use of any other continuous or discontinuous stream,
it should be necessary to build a dam, and the person who is to construct
it is not the owner of the banks, or lands which must support it, he may
establish the easement of abutment of a dam, after payment of the proper
indemnity. (554)
Art. 640. Compulsory easements for drawing water or for watering
animals can be imposed only for reasons of public use in favor of a town
or village, after payment of the proper indemnity. (555)
Art. 641. Easements for drawing water and for watering animals car-
ry with them the obligation of the owners of the servient estates to allow
passage to persons and animals to the place where such easements are
to be used, and the indemnity shall include this service. (556)
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 537
EASEMENTS OR SERVITUDES
Legal Easements
Art. 642. Any person who may wish to use upon his own estate any
water of which he can dispose shall have the right to make it flow through
the intervening estates, with the obligation to indemnify their owners, as
well as the owners of the lower estates upon which the waters may filter
or descend. (557)
Art. 643. One desiring to make use of the right granted in the preced-
ing article is obliged:
(1) To prove that he can dispose of the water and that it is suf-
ficient for the use for which it is intended;
(2) To show that the proposed right of way is the most convenient
and the least onerous to third persons;
(3) To indemnify the owner of the servient estate in the manner
determined by the laws and regulations. (558)
Art. 644. The easement of aqueduct for private interest cannot be
imposed on buildings, courtyards, annexes, or outhouses, or on orchards
or gardens already existing. (559)
Art. 645. The easement of aqueduct does not prevent the owner of
the servient estate from closing or fencing it, or from building over the
aqueduct in such manner as not to cause the latter any damage, or render
necessary repairs and cleanings impossible. (560)
Art. 646. For legal purposes, the easement of aqueduct shall be con-
sidered as continuous and apparent, even though the flow of the water
may not be continuous, or its use depends upon the needs of the domi-
nant estate, or upon a schedule of alternate days or hours. (561)
Art. 647. One who for the purpose of irrigating or improving his es-
tate, has to construct a stop lock or sluice gate in the bed of the stream
from which the water is to be taken, may demand that the owners of the
banks permit its construction, after payment of damages, including those
caused by the new easement to such owners and to the other irrigators.
(562)
Art. 648. The establishment, extent, form and conditions of the ser-
vitudes of waters, to which this section refers, shall be governed by the
special laws relating thereto insofar as no provision therefor is made in
this Code. (563a)
§ 118. Easement Relating to Waters
The following are the easements relating to waters:
(1) Easement of drainage of waters (Art. 637, NCC; Art. 50,
Water Code)
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 539
EASEMENTS OR SERVITUDES
Legal Easements
of ten years computed from the day on which an act contrary to the
easement took place, such as building of dikes.109
[118.2] Easement of Public Use
The banks or rivers and streams and the shores of the seas and
lakes throughout their entire length and within a zone of three (3) meters
in urban areas, twenty (20) meters in agricultural areas and forty (40)
meters in forest areas, along their margins, are subject to the easement
of public use in the interest of recreation, navigation, floatage, fishing
and salvage.110 However, no person shall be allowed to stay in this zone
longer than what is necessary for recreation, navigation, floatage, fishing
or salvage or to build structures of any kind.111 Note that in connection
with this kind of easement, the provision of the first paragraph of Article
638 of the New Civil Code was modified by Article 51 of the Water
Code of the Philippines (P.D. No. 1067).
[118.3] Easement For Drawing Waters
The compulsory easement for drawing waters or for watering
animals can be imposed only for reasons of public use in favor of a
town or village, after payment of the proper indemnity.112 This kind of
easement, upon its establishment, carries with it the easement of right of
way. In other words, the owner of the servient estate shall also have the
obligation to allow passage to persons and animals to the place where
the easement is to be used.113 As such, the indemnity to be paid for the
easement for drawing waters or for watering animals must include
indemnity for the easement of right of way.114
[118.4] Easement of Abutment of Dam
Whenever it is necessary to build a dam for the purpose of
diverting or taking waters from a river or brook, or for the use of any
other continuous or discontinuous stream, and the person who is to
construct it is not the owner of the banks or of the land on which must
109
Art. 631(2), NCC; Ongsiako v. Ongsiako, supra.
110
Art. 51, Water Code of the Phils.
111
Id.
112
Art. 640, NCC.
113
Art. 641, NCC.
114
Id.
538 PROPERTY
(2) Easement for public use (Art. 638, NCC; Art. 51, Water
Code);
(3) Easement for drawing waters (Arts. 640-641, NCC);
(4) Easement of abutment of dam (Art. 639, NCC);
(5) Easement of aqueduct (Arts. 642-646, NCC).
[118.1] Easement of Drainage of Waters
An easement exists when, based on the physical condition of two
estates, waters descend naturally and without the intervention of man
from a higher estate (the dominant estate) to a lower estate (the servient
estate). This is called “easement of drainage of waters.”102 In this kind
of easement, the lower estate is obliged to receive the waters which
naturally and without the intervention of man flow from the higher
estates, as well as the stones or earth which they carry with them.103 Such
being the case, the owner of the lower estate may not construct works,
such as dikes, walls or hedges, which will block or impede the flow of
waters,104 unless he provides an alternative method of drainage.105 The
owner of the higher estate, in turn, may not construct works which will
increase the burden or increase the natural flow.106
The owner of the higher estate shall also have the right to resort to
artificial means for the purpose of draining waters from higher to lower
estates but in the exercise of such right, he is obliged: (1) to select the
routes and methods of drainage that will cause the minimum damage
to the lower lands; and (2) to pay just compensation to the owner of the
lower estate.107
Since the enjoyment of this servitude does not depend upon acts
of man because the descent of water from the higher to the lower estates
is due to the force of gravity, this easement must be classed among the
continuous ones108 and it is subject to extinction by non-user for a period
102
Ongsiako v. Ongsiako, supra.
103
Art. 637, 1st par., NCC; Art. 50, Water Code of the Phils.
104
Art. 637, 2nd par., NCC; Art. 50, Water Code of the Phils.
105
Art. 50, Water Code of the Phils.
106
Art. 637, 2nd par., NCC; Art. 50, Water Code of the Phils.
107
Art. 46, Water Code of the Phils.
108
Ongsiako v. Ongsiako, supra.
540 PROPERTY
support it, he may establish an easement of abutment of dam only upon
payment of the proper indemnity to the owner of the affected estates.115
[118.5] Easement of Aqueduct
[118.5.1] Requisites
If a person wishes to use upon his estate any water of which he
can dispose, he shall have the right to make it flow through intervening
estates.116 This is called “easement of aqueduct.” In order for this
easement to be established, the following requisites must concur:
(1) That he who wants to establish the easement of aqueduct
must be able to prove that he can dispose of the water;
(2) He must also prove that it is sufficient for the use for which
it is intended;
(3) The proposed right of way is the most convenient and the
least onerous to third persons affected; and
(4) He must indemnify the owners of the servient estates
(intervening estates), as well as the owners of the lower
estates upon which the waters may filter or descend.117
Article 47 of the Water Code of the Philippines likewise
provides that “when the use, conveyance or storage of water results
in damage to another, the person responsible for the damage shall pay
compensation.”
This kind of easement, if established for private interest, may
not be imposed on buildings, courtyards, annexes, or outhouse, or on
orchards or gardens already existing.118
[118.5.2] Right of Owners of Servient Estate
The existence of an easement of aqueduct does not, however, curtail
the right of the owner of the servient estate to close or fence his estate119
but he may not refuse the entry of the holder of the easement on his
115
Art. 639, NCC.
116
Art. 642, NCC.
117
Arts. 642 and 643, NCC.
118
Art. 644, NCC.
119
Art. 645, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 541
EASEMENTS OR SERVITUDES
Legal Easements
estate if the purpose of such entry is the cleaning, repair or replacement
of the aqueduct or removal of any obstruction therefrom.120
The existence of such easement does not likewise prevent the
owner of the servient estate from building over these aqueduct provided
that the same does not cause damage to the aqueduct or render the
necessary repairs and cleanings thereon impossible.121
[118.5.3] Nature of Easement
For legal purposes, the easement of aqueduct shall be considered
as continuous and apparent, even though the flow of the water may not
be continuous, or its use depends upon the needs of the dominant estate,
or upon a schedule of alternate days or hours.122 Hence, an easement of
aqueduct may be acquired either by title or by prescription.123
Section 3. Easement of Right of Way
Art. 649. The owner, or any person who by virtue of a real right may
cultivate or use any immovable, which is surrounded by other immov-
ables pertaining to other persons and without adequate outlet to a public
highway, is entitled to demand a right of way through the neighboring
estates, after payment of the proper indemnity.
Should this easement be established in such a manner that its use
may be continuous for all the needs of the dominant estate, establishing
a permanent passage, the indemnity shall consist of the value of the land
occupied and the amount of the damage caused to the servient estate.
In case the right of way is limited to the necessary passage for the
cultivation of the estate surrounded by others and for the gathering of its
crops through the servient estate without a permanent way, the indem-
nity shall consist in the payment of the damage caused by such encum-
brance.
This easement is not compulsory if the isolation of the immovable is
due to the proprietor’s own acts. (564a)
Art. 650. The easement of right of way shall be established at the
point least prejudicial to the servient estate, and, insofar as consistent
with this rule, where the distance from the dominant estate to a public
highway may be the shortest. (565)
120
Art. 49, Water Code of the Phils.
121
Art. 645, NCC.
122
Art. 646, NCC.
123
Art. 620, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 543
EASEMENTS OR SERVITUDES
Legal Easements
Section and those of Articles 640 and 641 shall be observed. In this case
the width shall not exceed 10 meters. (570a)
§ 119. Easement of Right of Way
[119.1] Concept
Servitudes of right of way are an ancient concept, which date
back to the iter, actus, and via of the Romans.124 They are demanded by
necessity, that is, to enable owners of isolated estates to make full use of
their properties, which lack of access to public roads has denied them.125
The essence of this easement (“servidumbre de paso”) lies in the
power of the dominant owner to cross or traverse the servient tenement
without being prevented or disturbed by its owner. As a servitude, it
is a limitation on the servient owner’s rights of ownership, because it
restricts his right to exclude others from his property. But such limitation
exists only when the dominant owner actually crosses, or passes over
the servient estate; because when he does not, the servient owner’s right
of exclusion is perfect and undisturbed. Since the dominant owner can
not be continually and uninterruptedly crossing the servient estate, but
can do so only at intervals, the easement is necessarily of an intermittent
or discontinuous nature. Because possession of a right consists in the
enjoyment of that right and to enjoy a right is to exercise it, it follows that
the possession (enjoyment or exercise) of a right of way is intermittent
and discontinuous. From this premise, it is inevitable to conclude, with
Manresa and Sanchez Roman, that such easement can not be acquired
by acquisitive prescription (adverse possession) because the latter
requires that the possession be continuous or uninterrupted.126
[119.2] Manner of Acquisition; Requisites of Compulsory Right of
Way
As discussed in supra § 114.1, an easement of right of way may
only be acquired by virtue of a title, either voluntarily (Arts. 688-693)
or compulsorily (Arts. 649-657). A voluntary easement of right of way
is constituted by covenant and does not, therefore, require that the
dominant estate be isolated and without an adequate outlet to a public
124
Costabella Corp. v. CA, 193 SCRA 333 (1991).
125
Id.
126
See Concurring Opinion of Justice JBL Reyes in Ronquillo v. Roco, G.R. No. L-10619,
Feb. 28, 1958.
542 PROPERTY
Art. 651. The width of the easement of right of way shall be that
which is sufficient for the needs of the dominant estate, and may accord-
ingly be changed from time to time. (566a)
Art. 652. Whenever a piece of land acquired by sale, exchange or
partition, is surrounded by other estates of the vendor, exchanger, or co-
owner, he shall be obliged to grant a right of way without indemnity.
In case of a simple donation, the donor shall be indemnified by the
donee for the establishment of the right of way. (567a)
Art. 653. In the case of the preceding article, if it is the land of the
grantor that becomes isolated, he may demand a right of way after paying
an indemnity. However, the donor shall not be liable for indemnity. (n)
Art. 654. If the right of way is permanent, the necessary repairs shall
be made by the owner of the dominant estate. A proportionate share of the
taxes shall be reimbursed by said owner to the proprietor of the servient
estate. (n)
Art. 655. If the right of way granted to a surrounded estate ceases
to be necessary because its owner has joined it to another abutting on a
public road, the owner of the servient estate may demand that the ease-
ment be extinguished, returning what he may have received by way of in-
demnity. The interest on the indemnity shall be deemed to be in payment
of rent for the use of the easement.
The same rule shall be applied in case a new road is opened giving
access to the isolated estate.
In both cases, the public highway must substantially meet the needs
of the dominant estate in order that the easement may be extinguished.
(568a)
Art. 656. If it be indispensable for the construction, repair, improve-
ment, alteration or beautification of a building, to carry materials through
the estate of another, or to raise therein scaffolding or other objects nec-
essary for the work, the owner of such estate shall be obliged to permit
the act, after receiving payment of the proper indemnity for the damage
caused him. (569a)
Art. 657. Easements of the right of way for the passage of livestock
known as animal path, animal trail or any other, and those for watering
places, resting places and animal folds, shall be governed by the ordi-
nances and regulations relating thereto, and, in the absence thereof, by
the usages and customs of the place.
Without prejudice to rights legally acquired, the animal path shall
not exceed in any case the width of 75 meters, and the animal trail that of
37 meters and 50 centimeters.
Whenever it is necessary to establish a compulsory easement of
the right of way or for a watering place for animals, the provisions of this
544 PROPERTY
highway. If an estate, however, is so isolated and without an adequate
outlet to a public highway, the grant of easement of right of way is
compulsory and hence, legally demandable, subject to indemnity and
the concurrence of other conditions enumerated under Articles 649 and
650 of the New Civil Code.
In Bacolod-Murcia Milling Co., Inc. v. Capital Subdivision, Inc.,127
the Supreme Court held that a compulsory easement of right of way
cannot be obtained without the presence of four (4) requisites provided
for in Articles 649 and 650 of the Civil Code, which the owner of the
dominant tenement must establish, to wit:
(1) That the dominant estate is surrounded by other immovables
and has no adequate outlet to a public highway (Art. 649, par. 1);
(2) After payment of proper indemnity (Art. 649, par. 1, end);
(3) That the isolation was not due to acts of the proprietor of the
dominant estate (Art. 649, par. 4); and
(4) That the right of way claimed is at the point least prejudicial
to the servient estate; and insofar as consistent with this rule, where
the distance from the dominant estate to a public highway may be the
shortest. (Art. 650)128
By its very nature, and when considered with reference to the
obligations imposed on the servient estate, an easement involves an
abnormal restriction on the property rights of the servient owner and is
regarded as a charge or encumbrance on the servient estate. Thus, it is
incumbent upon the owner of the dominant estate to establish by clear
and convincing evidence the presence of all the preconditions before
his claim for easement of right of way be granted.129 Stated otherwise,
the burden of proving the existence of the prerequisites to validly claim
a compulsory right of way lies on the owner of the dominant estate.130
[119.3] Isolation of the Dominant Estate
In order to entitle the owner of the dominant estate to demand
for a compulsory right of way, it is required that his estate must be
127
17 SCRA 731, 735-736.
128
Cited in Francisco v. IAC, 177 SCRA 527 (1989).
129
Cristobal v. Court of Appeals, G.R. No. 125339, June 22, 1998.
130
Florendo v. Llenado, 244 SCRA 713 (1995).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Legal Easements
“surrounded by other immovables pertaining to other persons.”131
The estate, however, need not be totally landlocked as the isolation
of the dominant estate is also dependent on the particular need of the
dominant owner. What is important to consider is whether or not a right
of way is necessary to fill a reasonable need therefor by the owner.132
Thus, as Manresa had pointed out, if the passageway consists of an
“inaccessible slope or precipice,” it is as if there is no passageway,
that is, one that can sufficiently fulfill the dominant owner’s necessities,
although by the existence of that passageway the property can not be
truly said that the property is isolated.133 So also, while an existing right
of way may have proved adequate at the start, the dominant owner’s
need may have changed since then, for which Article 651 of the Code
allows adjustments as to width.134
But the law makes it amply clear that an owner cannot, by his
own act, isolate his property from a public highway and then claim an
easement of way through an adjacent estate.135 In short, the claimant of
a right of way must not himself procured the isolation of his property.136
According to the last paragraph of Article 649, the “easement is not
compulsory if the isolation of the immovable is due to the proprietor’s
own acts.” Thus, when the claimant of a right of way had already been
granted an adequate access to the public highway through another estate
but the same was no longer in use because he himself had closed it off
by erecting a stonewall on his lot at the point where such passageway
began, he cannot demand for a compulsory right of way in an alternative
location.137
[119.4] Inadequacy of the Outlet to Public Highway
To be entitled to a compulsory right of way, it is necessary that
the estate of the claimant of a right of way must be isolated and without
adequate outlet to a public highway.138 The true standard for the grant of
the legal right is “adequacy.” Hence, when there is already an existing
131
Art. 649, par. 1, NCC.
132
Costabella Corp. v. CA, supra, citing II Francisco, Civil Code of the Philippines, 787.
133
Id.
134
Id.
135
Francisco v. IAC, 177 SCRA 527 (1989).
136
Id.
137
See Francisco v. IAC, supra; see also Dionsio v. Ortiz, 204 SCRA 746 (1991).
138
Art. 649, par. 1, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Legal Easements
plan for the buyers of its lots, notwithstanding that said lot was still
undeveloped and inconvenient to petitioner. Even if Ramos, the
petitioner therein, had “to pass through other lots belonging to other
owners, which are grassy and cogonal, as temporary ingress/egress
with great inconvenience particularly due to flood and mud,” the Court
did not allow the easement because it would run counter to existing
jurisprudence that mere convenience for the dominant estate does not
suffice to serve as basis for the servitude.
In the case of Floro v. Llenado,143 the Supreme Court likewise
refused to impose an easement of right of way over petitioner’s property,
although private respondent’s alternative routes was admittedly
inconvenient because he had to traverse several rice lands and rice
paddies belonging to different persons, not to mention that said passage,
as found by the trial court, was impassable during rainy season.
[119.5] “At the Point Least Prejudicial…”
Article 650 of the New Civil Code explicitly states that the
easement of right of way shall be established at the point least prejudicial
to the servient estate and, insofar as consistent with this rule, where
the distance from the dominant estate to a public highway may be the
shortest. The criterion of least prejudice to the servient estate must
prevail over the criterion of shortest distance although this is a matter
of judicial appreciation.144 While shortest distance may ordinarily imply
least prejudice, it is not always so as when there are permanent structures
obstructing the shortest distance; while on the other hand, the longest
distance may be free of obstructions and the easiest or most convenient
to pass through. In other words, where the easement may be established
on any of several tenements surrounding the dominant estate, the one
where the way is shortest and will cause the least damage should be
chosen. However, if these two (2) circumstances do not concur in a
single tenement, the way which will cause the least damage should be
used, even if it will not be the shortest. This is the test.145 Hence, as
between a right of way that would demolish a store of strong materials
to provide egress to a public highway, and another right of way which
143
Supra.
144
Quimen v. CA, 257 SCRA 163 (1996).
145
Id.
545 546 PROPERTY
adequate outlet from the dominant estate to a public highway, even if
the said outlet, for one reason or another, be inconvenient, the need to
open up another servitude is entirely unjustified.139
Of course, the question of when a particular passage may be said
to be “adequate” depends on the circumstances of each case. Manresa,
however, says: “In truth, not only the estate which absolutely does not
possess it should be considered in this condition, but also that which
does not have one sufficiently safe or serviceable; an estate bordering
a public road through an inaccessible slope or precipice, is in fact
isolated for all the effects of the easement requested by its owner. On
the other hand, an estate which for any reason has necessarily lost its
access to a public road during certain periods of the year is in the same
condition… There are some who propound the query as to whether the
fact that a river flows between the estate and the public road should be
considered as having the effect of isolating the estate... If the river may
be crossed conveniently at all times without the least danger, it cannot
be said that the estate is isolated; in any other case, the answer is in the
affirmative.”140
In order to justify the imposition of the servitude of right of way,
there must be a real, not a fictitious or artificial necessity for it. Mere
convenience for the dominant estate is not what is required by law as
the basis for setting up a compulsory easement. Even in the face of a
necessity, if it can be satisfied without imposing the servitude, the same
should not be imposed. This easement can also be established for the
benefit of a tenement with an inadequate outlet, but not when the outlet
is merely inconvenient. Thus, when a person has already established
an easement of this nature in favor of his tenement, he cannot demand
another, even if the first passage has defects which make passage
impossible, if those defects can be eliminated by proper repairs. 141
In the case of Ramos v. Gatchalian,142 the Court denied access
to Sucat Road through Gatchalian Avenue in view of the fact that
petitioner had a road right of way provided by the Sobrina Rodriguez
Lombos Subdivision indicated as Lot 4133-G-12 in its subdivision
139
Costabella Corp. v. CA, supra.
140
Id.
141
Floro v. Llenado, 244 SCRA 713 (1995).
142
154 SCRA 703 (1987).
547 548 PROPERTY
although longer will only require an avocado tree to be cut down, the
second alternative should be preferred.146
[119.6] Payment of Indemnity
In Talisay-Silay Milling Co. v. Court of First Instance of Negros
Occidental,147 the Supreme Court explained what is meant by payment
or prepayment of the required indemnity under Article 649 of the Civil
Code, as follows:
“. . . Prepayment, as we used the term means the delivery
of the proper indemnity required by law for the damage that
might be incurred by the servient estate in the event the legal
easement is constituted. The fact that a voluntary agreement
upon the extent of compensation cannot be reached by the
parties involved, is not an impediment to the establishment
of such easement. Precisely, the action of the dominant
estate against the servient estate should include a prayer for
the fixing of the amount which may be due from the former
to the latter.”
The extent of the indemnity, should the easement be established
in such a manner that its use may be continuous for all the needs of
the dominant estate, thereby establishing a permanent passage, shall
consist of the value of the land occupied and the amount of the damage
caused to the servient estate.148 And in case the right of way is limited
to the necessary passage for the cultivation of the estate surrounded
by others and for the gathering of its crops through the servient estate
without a permanent way, the indemnity shall consist in the payment of
the damage caused by such encumbrance.149
However, whenever a piece of land which is acquired by sale,
exchange or partition is surrounded by other states of the vendor,
exchanger or co-owner, the owner is entitled to a grant of right of
way without indemnity.150 Such grant of right of way is deemed a tacit
condition of the contract and essentially voluntary in character inasmuch
146
Id.
147
42 SCRA 577 (1971).
148
Art. 649, par. 2, NCC.
149
Art. 649, par. 3, NCC.
150
Art. 652, 1st par., NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 549
EASEMENTS OR SERVITUDES
Legal Easements
as the estate is surrounded by the estate of others through the will of the
parties.151 But if the owner acquires his land by way of a simple donation,
there is no such tacit condition because the donor receives nothing from
the donee. In this latter case, therefore, the donee can only demand for
a right of way after payment of the proper indemnity.152
[119.7] Width of the Easement
Article 651 of the New Civil Code provides that “(t)he width of
the easement of right of way shall be that which is sufficient for the
needs of the dominant estate, and may accordingly be changed from
time to time.” This is taken to mean that under the law, it is the needs
of the dominant property which ultimately determine the width of the
passage. And these needs may vary from time to time.153 In the case
of Encarnacion v. Court of Appeals,154 the Court had the occasion to
explain —
“When petitioner started out as a plant nursery
operator, he and his family could easily make do with a few
pushcarts to tow the plants to the national highway. But the
business grew and with it the need for the use of modern
means of conveyance or transport. Manual hauling of plants
and garden soil and use of pushcarts have become extremely
cumbersome and physically taxing. To force petitioner to
leave his jeepney in the highway, exposed to the elements and
to the risk of theft simply because it could not pass through
the improvised pathway, is sheer pigheadedness on the part
of the servient estate and can only be counter-productive for
all the people concerned. Petitioner should not be denied a
passageway wide enough to accommodate his jeepney since
that is a reasonable and necessary aspect of the plant nursery
business.”
[119.8] Who May Demand For Compulsory Right of Way
Under Article 649 of the New Civil Code, it is the owner, or any
person who by virtue of a real right may cultivate or use any immovable
151
2 Castan, 9th ed., 586.
152
Art. 652, 2nd par., NCC.
153
Encarnacion v. CA, 195 SCRA 74 (1991).
154
Supra.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 551
EASEMENTS OR SERVITUDES
Legal Easements
(1) In dividing walls of adjoining buildings up to the point of com-
mon elevation;
(2) In dividing walls of gardens or yards situated in cities, towns,
or in rural communities;
(3) In fences, walls and live hedges dividing rural lands. (572)
Art. 660. It is understood that there is an exterior sign, contrary to
the easement of party wall:
(1) Whenever in the dividing wall of buildings there is a window or
opening;
(2) Whenever the dividing wall is, on one side, straight and plumb
on all its facement, and on the other, it has similar conditions on the upper
part, but the lower part slants or projects outward;
(3) Whenever the entire wall is built within the boundaries of one
of the estates;
(4) Whenever the dividing wall bears the burden of the binding
beams, floors and roof frame of one of the buildings, but not those of the
others;
(5) Whenever the dividing wall between courtyards, gardens, and
tenements is constructed in such a way that the coping sheds the water
upon only one of the estates;
(6) Whenever the dividing wall, being built of masonry, has step-
ping stones, which at certain intervals project from the surface on one
side only, but not on the other;
(7) Whenever lands inclosed by fences or live hedges adjoin oth-
ers which are not inclosed.
In all these cases, the ownership of the walls, fences or hedges shall
be deemed to belong exclusively to the owner of the property or tenement
which has in its favor the presumption based on any one of these signs.
(573)
Art. 661. Ditches or drains opened between two estates are also
presumed as common to both, if there is no title or sign showing the
contrary.
There is a sign contrary to the part-ownership whenever the earth
or dirt removed to open the ditch or to clean it is only on one side thereof,
in which case the ownership of the ditch shall belong exclusively to the
owner of the land having this exterior sign in its favor. (574)
Art. 662. The cost of repairs and construction of party walls and the
maintenance of fences, live hedges, ditches, and drains owned in com-
mon, shall be borne by all the owners of the lands or tenements having
the party wall in their favor, in proportion to the right of each.
550 PROPERTY
surrounded by other immovable pertaining to other persons, who is
entitled to demand a right of way through the neighboring estates. Thus,
in the case of Spouses Dela Cruz v. Ramiscal,155 the Court held that the
petitioners therein are not entitled to demand for a compulsory right of
way because they are not the owners of the supposed dominant estate
and neither do they possess a real right to use such property.
While a usufructuary is entitled to demand a right of way pursuant
to Article 649, a mere lessee does not enjoy the same right. With respect
to the latter, his action is against the lessor who is bound to maintain
him in the enjoyment of the property.156
[119.9] Extinguishment of Right of Way
If the right of way is no longer necessary because the owner of the
dominant estate has joined it to another abutting on a public highway
and such public highway substantially meets the needs of the dominant
estate, the owner of the servient estate may demand for the release of
his estate from the servitude by returning what he may have received by
way of indemnity without interest. The interest on the indemnity shall,
instead, be considered as payment for the use of the easement.157 The
same rule shall be applied in cases where a new road is opened thereby
giving access to the isolated estate.158
Note, however, that the extinguishment of the right of way in
the foregoing manner does not take place ipso jure. The owner of the
servient estate must ask for the release of his estate from the servitude
upon the return of the indemnity he received.
Section 4. Easement of Party Wall
Art. 658. The easement of party wall shall be governed by the provi-
sions of this Title, by the local ordinances and customs insofar as they do
not conflict with the same, and by the rules of co-ownership. (571a)
Art. 659. The existence of an easement of party wall is presumed,
unless there is a title, or exterior sign, or proof to the contrary:
155
G.R. No. 137882, Feb. 4, 2005.
156
II Tolentino, Civil Code of the Phil., 1992 ed., 387.
157
Art. 655, 1st par., NCC.
158
Art. 655, 2nd par., NCC.
552 PROPERTY
Nevertheless, any owner may exempt himself from contributing to
this charge by renouncing his part-ownership, except when the party wall
supports a building belonging to him. (575)
Art. 663. If the owner of a building, supported by a party wall desires
to demolish the building, he may also renounce his part-ownership of the
wall, but the cost of all repairs and work necessary to prevent any damage
which the demolition may cause to the party wall, on this occasion only,
shall be borne by him. (576)
Art. 664. Every owner may increase the height of the party wall,
doing so at his own expense and paying for any damage which may be
caused by the work, even though such damage be temporary.
The expenses of maintaining the wall in the part newly raised or
deepened at its foundation shall also be paid for by him; and, in addition,
the indemnity for the increased expenses which may be necessary for
the preservation of the party wall by reason of the greater height or depth
which has been given it.
If the party wall cannot bear the increased height, the owner desir-
ing to raise it shall be obliged to reconstruct it at his own expense and, if
for this purpose it be necessary to make it thicker, he shall give the space
required from his own land. (577)
Art. 665. The other owners who have not contributed in giving in-
creased height, depth or thickness to the wall may, nevertheless, acquire
the right of part-ownership therein, by paying proportionally the value
of the work at the time of the acquisition and of the land used for its in-
creased thickness. (578a)
Art. 666. Every part-owner of a party wall may use it in proportion
to the right he may have in the co-ownership, without interfering with the
common and respective uses by the other co-owners. (579a)
§ 120. Easement of Party Wall
[120.1] Nature of Party Wall
While our Civil Code recognizes the existence of co-ownership in
a party wall,159 it is considered more of a servitude. This is to be seen in
the way the concept is treated under the Civil Code — it is discussed
under the title on easement or servitude and not under the title on co-
ownership. In ordinary co-ownership, none of the co-owners may do
anything on the co-owed property for his own exclusive benefit because
he would be impairing the rights of others. But in a party wall, there
159
See Arts. 666 and 667, NCC.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Legal Easements
is no such juridical limitation upon the action of the owner.160 And as
explained by Senator Tolentino, when the law grants to the owners of a
party wall the right to make in it works for the exclusive benefit of the
person making them, and not in the interest of the others, such grant
cannot be by mere title of co-ownership, but by virtue of a right of
servitude.161
[120.2] Presumption of Existence of Easement of Party Wall
The law presumes the existence of an easement of party wall in
the following cases:
(1) In dividing walls of adjoining buildings up to the point of
common elevation;
(2) In dividing walls of gardens or yards situated in cities, towns
or rural communities; and
(3) In fences, walls and live hedges dividing rural lands.
This presumption will not, however, apply if: (1) there is title to
the contrary; (2) there is an exterior sign to the contrary; and (3) there
is proof to the contrary.163
It is understood, however, that there exists an exterior sign contrary
to the easement of party wall in the following instances:
(1) Whenever in the dividing wall of buildings there is a window
or opening;
(2) Whenever the dividing wall is, on one side, straight and
plumb on all its facement, and on the other, it has similar
conditions on the upper part, but the lower part slants or
projects outward;
(3) Whenever the entire wall is built within the boundaries of
one of the estates;
(4) Whenever the dividing wall bears the burden of the binding
beams, floors and roof frame of one of the buildings, but not
those of the others;
160
2 Castan, 9th ed., 589, cited in II Caguioa, Civil Code of the Phil., 1966 ed., 305.
161
II Tolentino, Civil Code of the Phil., 1992 ed., 396, citing 4 Manresa 762-763.
162
Art. 659, NCC.
163
Id.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION
EASEMENTS OR SERVITUDES
Legal Easements
(3) if the party wall cannot bear the increased height, the owner desiring
to raise it shall be obliged to reconstruct it at his own expense, and, if
for this purpose it be necessary to make it thicker, he shall give the
space required from his own land.168
The co-ownership is maintained up to the point where the original
wall extended. But with respect to the additional height, the same shall
be exclusively owned by the part-owner at whose instance the party
wall was raised. As a consequence, the expenses in maintaining the
additional height, as well as the increase in expenses which may be
necessary for the preservation of the party wall by reason of the greater
height, shall be borne by him.169 The other owners may, however, acquire
a proportionate share in the raised party wall by paying proportionately
the value of the work at the time of the acquisition and of the land used
for its increased thickness,170 in which case, all shall bear the expenses
of maintaining the additional height in proportion to their respective
interest in it.
[120.3.3] Repairs and Maintenance of Party Wall
The cost of repairs and construction of party walls and the
maintenance of fences, live hedges, ditches, and drains owned in
common, shall be borne by all the owners of the lands or tenements
having the party wall in their favor, in proportion to the right of each.
Nevertheless, any owner may exempt himself from contributing to this
charge by renouncing his part-ownership, except when the party wall
supports a building belonging to him.171 In case where the party wall
supports a building, the owner of such building may renounce his part
ownership of the party wall if he will demolish the building. But the
cost of all repairs and work necessary to prevent any damage which the
demolition may cause to the party wall on this occasion shall be borne
by him.172
168
Art. 664, NCC.
169
See Art. 694, 2nd par., NCC.
170
Art. 665, NCC.
171
Art. 662, NCC.
172
Art. 663, NCC.
553 554 PROPERTY
(5) Whenever the dividing wall between courtyards, gardens,
and tenements is constructed in such a way that the coping
sheds the water upon only one of the estates;
(6) Whenever the dividing wall, being built of masonry, has
stepping stones, which at certain intervals project from the
surface on one side only, but not on the other;
(7) Whenever lands inclosed by fences or live hedges adjoin
others which are not inclosed.164
In all the foregoing cases, the ownership of the walls, fences
or hedges shall be deemed to belong exclusively to the owner of the
property or tenement which has in its favor the presumption based on
any one of the these signs.165
With respect to ditches or drains opened between two estates,
162
there is also a presumption that they are common to both estates unless
there is a sign or title to the contrary. There is a sign contrary to the
part-ownership whenever the earth or dirt removed to open the ditch or
to clean it is only on one side thereof, in which case the ownership of
the ditch shall belong exclusively to the owner of the land having this
exterior sign in its favor.166
[120.3] Rights and Obligations of Each Co-Owner of Party Wall
[120.3.1] Right to Use
Every part-owner of a party wall may use it in proportion to the
right he may have in the co-ownership even without the consent of the
other owners so long as he does not interfere with the common and
respective uses by the other co-owners.167
[120.3.2] Right to Increase Height of Party Wall
Every part-owner of a party has the right to increase the height
of the party wall subject to the following conditions: (1) the same shall
be done at his expense; (2) he shall pay for any damage which may be
caused by his work, even though such damage may be temporary; and
164
Art. 660, NCC.
165
Id.
166
Art. 661, NCC.
167
See Art. 666, NCC.
555 556 PROPERTY
Section 5. Easement of Light and View
Art. 667. No part-owner may, without the consent of the others, open
through the party wall any window or aperture of any kind. (580)
Art. 668. The period of prescription for the acquisition of an ease-
ment of light and view shall be counted:
(1) From the time of the opening of the window, if it is through a
party wall; or
(2) From the time of the formal prohibition upon the proprietor
of the adjoining land or tenement, if the window is through a wall on the
dominant estate. (n)
Art. 669. When the distances in Article 670 are not observed, the
owner of a wall which is not a party wall, adjoining a tenement or piece
of land belonging to another, can make in it openings to admit light at the
height of the ceiling joists or immediately under the ceiling, and of the
size of thirty centimeters square, and, in every case, with an iron grating
imbedded in the wall and with a wire screen.
Nevertheless, the owner of the tenement or property adjoining the
wall in which the openings are made can close them should he acquire
part-ownership thereof, if there be no stipulation to the contrary.
He can also obstruct them by constructing a building on his land or
by raising a wall thereon contiguous to that having such openings, unless
an easement of light has been acquired. (581a)
Art. 670. No windows, apertures, balconies, or other similar projec-
tions which afford a direct view upon or towards an adjoining land or
tenement can be made, without leaving a distance of two meters between
the wall in which they are made and such contiguous property.
Neither can side or oblique views upon or towards such contermi-
nous property be had, unless there be a distance of sixty (60) centime-
ters.
The nonobservance of these distances does not give rise to pre-
scription. (582a)
Art. 671. The distance referred to in the preceding article shall be
measured in cases of direct views from the outer line of the wall when
the openings do not project, from the outer line of the latter when they
do, and in cases of oblique views from the dividing line between the two
properties. (583)
Art. 672. The provisions of Article 670 are not applicable to buildings
separated by a public way or alley, which is not less than three meters
wide, subject to special regulations and local ordinances. (584a)
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 557
EASEMENTS OR SERVITUDES
Legal Easements
Art. 673. Whenever by any title a right has been acquired to have
direct views, balconies or belvederes overlooking an adjoining property,
the owner of the servient estate cannot build thereon at less than a dis-
tance of three meters to be measured in the manner provided in Article
671. Any stipulation permitting distances less than those prescribed in
Article 670 is void. (585a)
§ 121. Easement of Light and View
[121.1] Concept
See the discussions in supra §114.2.
[121.2] Making an Opening in Party Wall
As discussed in supra § 120.3.1, a part-owner of a party wall may
use it even without the consent the consent of the other owners so long
as he does not interfere in the common and respective uses by the other
co-owners.173 No part-owner may, however, make an opening in a party
wall without the consent of the other co-owners.174 If the same is done
without the consent of the other co-owners, the latter may demand that
what has been done be undone at the expense of the co-owner who
made such opening.175 But if the same is done with the consent of the
other co-owners, the 10-year period of prescription for the acquisition
of an easement of light and view shall commence to run from the time
of the making of such opening.176
[121.3] Acquisition of Easement of Light and View Through
Prescription
See the discussions in supra § 114.2.
[121.4] Observance of Certain Distances
The law prohibits the making of windows, apertures, balconies,
or other similar projections which afford a direct view upon or towards
an adjoining land or tenement without leaving a distance of two
meters between the wall in which they are made and such contiguous
property. With respect to the side or oblique views upon or towards such
173
See Art. 666, NCC.
174
Art. 667, NCC.
175
See Art. 1168, NCC.
176
See Art. 668(1), NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 559
EASEMENTS OR SERVITUDES
Legal Easements
with. Even in the absence of any violation, the owner of the adjacent
property may close the opening should he acquire part ownership of
the wall where the opening has been made, if there be no stipulation
to the contrary.182 If the owner of the adjacent property is not entitled to
demand for the closure of the said opening because there is no violation
of the conditions outlined in the first paragraph of Article 669 and
he does not acquire part-ownership of the wall, he may, nonetheless,
obstruct the opening by constructing a building on his land or by raising
a wall thereon contiguous to that having such opening.183 This he can
do because it is simply an exercise of his right of ownership over his
property. He may not, however, resort to this remedy if the owner of
the wall with the opening has already acquired an easement of light
pursuant to the manner outlined in Articles 621 and 668 of the Civil
Code.
Section 6. Drainage of Buildings
Art. 674. The owner of a building shall be obliged to construct its
roof or covering in such manner that the rain water shall fall on his own
land or on a street or public place, and not on the land of his neighbor,
even though the adjacent land may belong to two or more persons, one of
whom is the owner of the roof. Even if it should fall on his own land, the
owner shall be obliged to collect the water in such a way as not to cause
damage to the adjacent land or tenement. (586a)
Art. 675. The owner of a tenement or a piece of land, subject to the
easement of receiving water falling from roofs, may build in such manner
as to receive the water upon his own roof or give it another outlet in ac-
cordance with local ordinances or customs, and in such a way as not to
cause any nuisance or damage whatever to the dominant estate. (587)
Art. 676. Whenever the yard or court of a house is surrounded by
other houses, and it is not possible to give an outlet through the house it-
self to the rain water collected thereon, the establishment of an easement
of drainage can be demanded, giving an outlet to the water at the point
of the contiguous lands or tenements where its egress may be easiest,
and establishing a conduit for the drainage in such manner as to cause
the least damage to the servient estate, after payment of the property
indemnity. (583)
182
Art. 669, 2nd par., NCC.
183
Art. 669, 3rd par., NCC.
558 PROPERTY
conterminous property, the law requires that the distance be sixty (60)
centimeters.177 Such distance shall be measured in cases of direct views
from the outer line of the wall when the openings do not project, from
the outer line of the latter when they do, and in cases of oblique view
from the dividing line between the two properties.178
The foregoing requirement does not apply, however, to buildings
separated by a public way or alley, which is not less than three meters
wide, unless there is a special regulation and local ordinance which
provides to the contrary.179
Now, what is the effect of violation of the foregoing distance
requirement? When windows or balconies are opened in violation of
the distance requirement in Article 670 of the Civil Code, the same
may be ordered closed because they constitute unlawful openings.180
And as discussed in supra §114.2, the mere making of such opening
does not result in the running of the 10-year prescriptive period for the
acquisition of an easement of light and view. Since the easement is a
negative one, the 10-year period begins to run only from the time of the
formal prohibition mentioned in Articles 621 and 668 of the New Civil
Code.
[121.5] Opening Where Distances Not Observed
If a building is right on the boundary line or the distances required
in Article 670 are not observed, the owner of a wall adjoining a tenement
or piece of land belonging to another, which is not a party wall, may not
make an opening in the said wall except if the following conditions are
present: (1) the opening must not be more than 30 centimeters square
and made at the height of the ceiling joists or immediately under the
ceiling, and with an iron grating imbedded in the wall and with a wire
screen; and (2) it must be for the purpose of admitting light only and
not for the purpose of view.181 If these conditions are violated, the owner
of the tenement or property adjoining the wall may demand for its
closure or he may compel that the foregoing requirements be complied
177
Art. 670, NCC.
178
Art. 671, NCC.
179
Art. 672, NCC.
180
See Saenz v. Figueras Hermanos, 13 Phil. 328 and Choco v. Santamaria, 21 Phil. 132.
181
Art. 669, 1st par., NCC.
560 PROPERTY
§ 122. Easement of Drainage of Buildings
[122.1] Concept
The easement of drainage of buildings is the right to divert or
empty the rain waters from one’s own roof or shed to the neighbor’s
estate either drop by drop or through conduits.184
[122.2] Ownership of Rain Waters
Pursuant to the provisions of the Water Code of the Philippines,
rain waters falling on private lands shall belong to the State.185 However,
any person who captures or collects water by means of cisterns, tanks or
pools shall have exclusive control over such water and he shall also have
the right to dispose of the same.186 The owner of the land where the rain
waters fall may use the same even without securing a permit from the
National Water Resources Council but only for domestic purposes.187
In cases where the owner of a building does not intend to collect
the rain waters falling on the roof or covering of his building, he has
the obligation to construct the roof or covering of his building in such
manner that the rain waters shall fall on his own land or on street or
public place, and not on the land of his neighbor, even though the
adjacent land may belong to two or more persons, one of whom is the
owner of the roof.188 And even if it should fall on his own land, he is also
obligated to collect the water in such a way that it will not cause damage
to the adjacent land or tenement.189
[122.3] Legal Easement of Drainage
An easement of drainage may be demanded subject to compliance
with the following requisites:
(1) The yard or court of a house must be surrounded by other
houses (“the dominant estate”) and it is not possible to
give an outlet through the house itself to the rain collected
therefrom;
184
2 Castan, 9th ed., 594.
185
Art. 6(c), Water Code of the Phils.
186
Art. 7, Water Code of the Phils.
187
Art. 6, last par., Water Code of the Phils.
188
Art. 674, NCC.
189
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 561
EASEMENTS OR SERVITUDES
Legal Easements
(2) The outlet to the water must be at the point of the contiguous
lands or tenements (“the servient estate”) where its egress
may be easiest;
(3) The conduit for the drainage must be established in such
manner as to cause the least damage to the servient estate;
and
(4) Proper indemnity must be paid to the owner of the servient
estate.190
Section 7. Intermediate Distances and Works
for Certain Constructions and Plantings
Art. 677. No constructions can be built or plantings made near forti-
fied places or fortresses without compliance with the conditions required
in special laws, ordinances, and regulations relating thereto. (589)
Art. 678. No person shall build any aqueduct, well, sewer, furnace,
forge, chimney, stable, depository of corrosive substances, machinery,
or factory which by reason of its nature or products is dangerous or nox-
ious, without observing the distances prescribed by the regulations and
customs of the place, and without making the necessary protective works,
subject, in regard to the manner thereof, to the conditions prescribed by
such regulations. These prohibitions cannot be altered or renounced by
stipulation on the part of the adjoining proprietors.
In the absence of regulations, such precautions shall be taken as
may be considered necessary, in order to avoid any damage to the neigh-
boring lands or tenements. (590a)
Art. 679. No trees shall be planted near a tenement or piece of land
belonging to another except at the distance authorized by the ordinances
or customs of the place, and, in the absence thereof, at a distance of
at least two meters from the dividing line of the estates if tall trees are
planted and at a distance of at least fifty centimeters if shrubs or small
trees are planted.
Every landowner shall have the right to demand that trees hereafter
planted at a shorter distance from his land or tenement be uprooted.
The provisions of this article also apply to trees which have grown
spontaneously. (591a)
Art. 680. If the branches of any tree should extend over a neighbor-
ing estate, tenement, garden or yard, the owner of the latter shall have the
190
Art. 676, NCC.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 563
EASEMENTS OR SERVITUDES
Legal Easements
But with respect to the roots of a neighboring tree which penetrated
into the land of another, the owner of the latter may himself cut off
the roots found within his property. The reason for the difference is
that with respect to the roots, the same belong to the owner of the land
where it is found by reason of incorporation.194 This right of the adjacent
owner does not prescribe unless he has been, by a formal act, prohibited
by the owner of the tree from cutting off the roots of the tree, in which
case, the ten-year prescriptive period for the establishment of a negative
easement will commence to run.195
[123.3] Fruits Naturally Falling
By way of exception to the rule in Article 441 that the fruits
belong to the owner of the trees, fruits which are naturally falling upon
adjacent land belong to the owner of the said land.196 This rule has a
practical purpose — which is to discourage the act of allowing branches
to protrude over another’s land.197 This rule, however, does not apply to
cases where the fruits naturally fall on a public property in which case,
the owner of the tree retains ownership.
Section 8. Easement Against Nuisance (n)
Art. 682. Every building or piece of land is subject to the easement
which prohibits the proprietor or possessor from committing nuisance
through noise, jarring, offensive odor, smoke, heat, dust, water, glare and
other causes.
Art. 683. Subject to zoning, health, police and other laws and regula-
tions, factories and shops may be maintained provided the least possible
annoyance is caused to the neighborhood.
Section 9. Lateral and Subjacent Support (n)
Art. 684. No proprietor shall make such excavations upon his land
as to deprive any adjacent land or building of sufficient lateral or subja-
cent support.
Art. 685. Any stipulation or testamentary provision allowing excava-
tions that cause danger to an adjacent land or building shall be void.
194
2 Castan, 9th ed., 596-597.
195
See Art. 621, NCC.
196
Art. 681, NCC.
197
Report of the Code Commission, p. 8.
562 PROPERTY
right to demand that they be cut off insofar as they may spread over his
property, and, if it be the roots of a neighboring tree which should pen-
etrate into the land of another, the latter may cut them off himself within
his property. (592)
Art. 681. Fruits naturally falling upon adjacent land belong to the
owner of said land. (n)
§ 123. Intermediate Distances for Planting
[123.1] Distance to Be Observed in Case of Planting Trees
Article 679 of the New Civil Code prohibits the planting of trees
near a tenement or piece of land belonging to another person unless the
following distance requirement is observed:
(a) the distance authorized by local ordinances or customs of the
place, if any; or
(b) in default of the foregoing, at a distance of at least two (2)
meters from the dividing line of the estate in case of tall trees
and at a distance of at least 50 centimeters in case of shrubs
or small trees.
If the foregoing distance requirement is not followed, the owner
of the adjacent land has the right to demand for the uprooting of the
trees which were planted in violation of the rule.191 This remedy is
also available to the owner of the adjacent land even with respect to
trees which have grown spontaneously at distances shorter than that
mentioned in the immediately preceding paragraph.192
[123.2] Right To Cut Branches and Roots
If the branches of any tree should extend over a neighboring
estate, tenement, garden or yard, the owner of the latter does not have
the right to take the matter into his own hand by cutting of the branches
extending on his property. Instead, he may demand that the protruding
branches be cut-off by its owner. If his demand is not acted upon, he
has to go to court to seek authority for the cutting of the protruding
branches.193
191
See Art. 679, 2nd par., NCC.
192
See Art. 679, 3rd par., NCC.
193
Art. 680, NCC.
564 PROPERTY
Art. 686. The legal easement of lateral and subjacent support is not
only for buildings standing at the time the excavations are made but also
for constructions that may be erected.
Art. 687. Any proprietor intending to make any excavation contem-
plated in the three preceding articles shall notify all owners of adjacent
lands.
§ 124. Legal Easement of Lateral and Subjacent Support
[124.1] Concept
The right of lateral and subjacent support is the right to have
land supported by the adjoining land or the soil beneath.198 Each of two
adjoining landowners is entitled to the support of the other’s land.199
Support is lateral when the supported and the supporting lands are
divided by a vertical plane. Support is subjacent when the supported
land is above and the supporting land is beneath it.200
[124.2] Easement of Lateral and Subjacent Support
The right of lateral support ordinarily exists only with respect to
the soil in its natural condition,201 but our Civil Code expressly includes
buildings in the protection of this easement. In the words of the Code
Commission, this kind of easement or servitude is so essential to the
stability of buildings.202 With this purpose in mind, the law prohibits any
excavation upon one’s land if the same will deprive any adjacent land
or building of sufficient lateral or subjacent support.203 In addition, the
law prohibits any stipulation or testamentary provision allowing such
kind of excavation.204 Any such stipulation or testamentary provision is
expressly declared to be void.205
Note that the easement of lateral and subjacent support is a negative
one — it is in the form of prohibition on the part of a landowner from
making any excavation that will deprive the adjacent land or building
of sufficient lateral or subjacent support. If the right of lateral and
198
Black’s Law Dictionary, 5th ed., 795.
199
Bouvier’s Law Dictionary, Vol. 2, 3rd revision, 1871.
200
Restatement of the Law of Torts, Vol. IV, p. 184.
201
Northern Transportation Co. v. Chicago, 99 U.S. 635, 25 L. Ed. 336.
202
Report of the Code Commission, p. 51.
203
Art. 684, NCC.
204
Art. 685, NCC.
205
Id.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 565
EASEMENTS OR SERVITUDES
Voluntary Easements
subjacent support is violated, the adjoining landowner is entitled to seek
injunctive relief, in addition to the right to recover damages.
Chapter 3
VOLUNTARY EASEMENTS
Art. 688. Every owner of a tenement or piece of land may establish
thereon the easements which he may deem suitable, and in the manner
and form which he may deem best, provided he does not contravene the
laws, public policy or public order. (594)
Art. 689. The owner of a tenement or piece of land, the usufruct of
which belongs to another, may impose thereon, without the consent of
the usufructuary, any servitudes which will not injure the right of usufruct.
(595)
Art. 690. Whenever the naked ownership of a tenement or piece of
land belongs to one person and the beneficial ownership to another, no
perpetual voluntary easement may be established thereon without the
consent of both owners. (596)
Art. 691. In order to impose an easement on an undivided tenement,
or piece of land, the consent of all the co-owners shall be required.
The consent given by some only, must be held in abeyance until the
last one of all the co-owners shall have expressed his conformity.
But the consent given by one of the co-owners separately from the
others shall bind the grantor and his successors not to prevent the exer-
cise of the right granted. (597a)
Art. 692. The title and, in a proper case, the possession of an ease-
ment acquired by prescription shall determine the rights of the dominant
estate and the obligations of the servient estate. In default thereof, the
easement shall be governed by such provisions of this Title as are ap-
plicable thereto. (598)
Art. 693. If the owner of the servient estate should have bound him-
self, upon the establishment of the easement, to bear the cost of the work
required for the use and preservation thereof, he may free himself from
this obligation by renouncing his property to the owner of the dominant
estate. (599)
§ 125. Voluntary Easement
[125.1] Concept
As discussed in supra § 112.2, an easement may either be compul-
sory or voluntary. It is compulsory if it can be demanded by the claim-
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 567
EASEMENTS OR SERVITUDES
Voluntary Easements
[125.4] Abandonment of Property
If upon the establishment of a voluntary easement, the owner of
the servient estate bound himself to bear the cost of the work required
for the use and preservation of the easement he may free himself
from this obligation by renouncing his property to the owner of the
dominant estate.209 The owner of the servient estate need not renounce
his ownership over the entire property if the servitude affects only a part
thereof in which case, he may abandon only that part which is burdened
with the servitude. Needless to say, if the servitude affects the entire
servient tenement, the abandonment must be total.210
Must the abandonment be reduced in some form? Since the
abandonment contemplated in Article 693 of the New Civil Code
produces the transmission of ownership over a real property, the law
(Article 1358, par. 1 of the New Civil Code) requires that the same
must appear in a public document. However, the provision of Article
1358 of the Civil Code on the necessity of a public document is only for
convenience, not for validity or enforceability.211
— oOo —
209
Art. 693, NCC.
210
4 Manresa, 5th ed., 744-746.
211
Dalion v. Court of Appeals, 182 SCRA 872, 877 (1990).
566 PROPERTY
ant as a matter of right upon payment of the proper indemnity. If the
claimant is not entitled to demand for an easement as a matter of right
because the requisites for legal easement are not present, the easement
may only be constituted upon the will of the owner of the servient estate
in which case, the easement is classified as voluntary. Note that only
the owner of the property may constitute an easement over a tenement
because the creation of a servitude is a disposition of a part of the right
of ownership and only an owner can do that.
[125.2] Establishment of Easement on Property Held in Usufruct
Since easement consists of a limited use and enjoyment of the
thing without possession, the establishment of a voluntary easement on
a tenement or piece of land is not inconsistent with the existence of a
usufruct over the same property. Hence, the owner of such tenement or
piece of land may impose any servitude thereon and he may do so even
without the consent of the usufructuary.206
As discussed in supra § 125.1, it is only the owner of the tenement
or piece of land who may constitute an easement over his property. If it is
the usufructuary who will impose the same servitude upon the property
held in usufruct, it is not, in reality, an easement or servitude because it
will not bind the owner or the property itself. In short, the right created
is not a real one but a mere personal right which is binding against
the usufructuary only. Hence, upon the termination of the usufruct the
burden so imposed by the usufructuary likewise ceases.
[125.3] Easement Over A Co-Owned Property
If the tenement or piece of land is in a state of co-ownership, the
unanimous consent of all co-owners is required in order to constitute
a voluntary easement upon the same.207 Consent by the co-owners may
be given by them either simultaneously or successively. In the latter
case, the consent given by one of the co-owners separately from the
others shall already bind him and his successors. In other words, he
cannot later on change his mind and withdraw his consent if the other
co-owners subsequently decide to give their consent.208
206
Art. 689, NCC.
207
Art. 691, 1st par., NCC.
208
Art. 691, par. 3, NCC.
568 PROPERTY
Title VIII. NUISANCE (n)
Art. 694. A nuisance is any act, omission, establishment, business,
condition of property, or anything else which:
(1) Injures or endangers the health or safety of others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public
highway or street, or any body of water; or
(5) Hinders or impairs the use of property.
§ 126 Concept
[126.1] Definition
The law of nuisance is neither simple nor rigorous. In fact,
commentators have described nuisance doctrine as so complex and
uncertain that it amounts to an “impenetrable jungle.”1 Indeed, nuisance
is a flexible area of the law that is adaptable to a wide variety of factual
situations2 because the term “nuisance” itself is incapable of an exact
and exhaustive definition which will fit all cases, because the controlling
facts are seldom alike, and each case stands on its own footing.3
The word nuisance is derived from the French word “nuire” which
means to injure, hurt or harm. Literally, therefore, it means annoyance,
anything that works hurt or injury.4 The concept of nuisance is so broad
that it covers “anything that unlawfully works hurt, inconvenience or
damage.”5 Hence, our Civil Code defines it in Article 694 as “any act,
1
See William L. Prosser, Torts 571, 4th ed. (1971).
2
Sharon Steel Corp. v. City of Fairmont, 175 W.Va. 479, 483, 334 S.E.2d 616, 621 (1985).
3
Harless v. Workman, 145 W.Va. 266, 273-274, 114 S.E.2d 548, 552 (1960).
4
Lebayen v. A.S. Diaz Electrical Service, Inc., 1 CA Rep. 178.
5
3 Bla. Com. 5, 216, cited in Bouvier’s Law Dictionary, 3rd revised ed., Vol. II, p. 2379.
568
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 569
NUISANCE (N)
omission, establishment, business, condition of property or anything
else which injures or endangers the health or safety of others; annoys
or offends the senses, shocks, defies or disregards decency or morality,
obstructs or interferes with the free passage of any public highway or
street, or any body of water or hinders or impairs the use of property.”
It has also been defined as “that class of wrongs that arise from the
unreasonable, unwarrantable, or unlawful use by a person of his own
property, either real or personal, or from his own improper, indecent, or
unlawful personal conduct, working an obstruction of or injury to the
right of another or of the public, and producing such material annoyance,
inconvenience, discomfort, or hurt, that the law will presume resulting
damage.”6
From the foregoing definitions, a nuisance could be “anything”
— it could be an act or omission of a person or simply an establishment,
business or condition of a property or anything else — which interferes
with the rights of a citizen, either in person, property, the enjoyment of
his property, or his comfort.
[126.2] Nuisance and Tort
In supra § 36.3, it was explained that that every holder of
property, however absolute and unqualified may be his title, holds it
under the implied liability that his use of it shall not be injurious to
the equal enjoyment of others having an equal right to the enjoyment
of their property, nor injurious to the rights of the community. As a
consequence, Article 431 of the New Civil Code specifically mandates
that “the owner of a thing cannot make use thereof in such a manner as
to injure the rights of a third person.”
The law on nuisance further clarifies the rule stated in Article 431.
Clearly therefore, the law on nuisance is a restriction or limitation upon
ownership and a manifestation of the principle that every person should
so use his property as not to cause damage or injury to others — “sic
utere tuo ut alienum non laedas.”7
6 9
City of Phoenix v. Johnson, 51 Ariz. 115, 75 P. 2d 30, cited in Black’s Law Dictionary,
5th ed., 961.
7 11
Lebayen v. A.S. Diaz Electric Service, Inc., 1 CA Rep. 178.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 571
NUISANCE (N)
may be unequal.12 A private nuisance, on the other hand, affects only an
individual or a limited number of individuals.13 As distinguished from
a public nuisance, a private nuisance includes any wrongful act which
destroys or deteriorates the property of an individual or of a few persons
or interferes with their lawful use or enjoyment thereof, or any act which
unlawfully hinders them in the enjoyment of a common or public right
and causes them a special injury different from that sustained by the
general public.14 Therefore, although the ground of distinction between
public and private nuisances is still the injury to the community at large
or, on the other hand, to a single individual, it is evident that the same
thing or act may constitute a public nuisance and at the same time a
private nuisance.15 A mixed nuisance is of the kind last described; that
is, it is one which is both public and private in its effects, public because
it injures many persons or all the community, and private in that it also
produces special injuries to private rights.16
[127.1.1] Private Nuisance Distinguished From Trespass to
Land
Claims of trespass and nuisance are difficult to distinguish and in-
clude overlapping concepts. The essential difference however, between
the two is that “trespass is an invasion of the plaintiff’s interest in the
exclusive possession of his land, while nuisance is an interference with
his use and enjoyment of it.”17 Stated otherwise, a nuisance consists of
a use of one’s own property in such a manner as to cause injury to the
property or other right or interest of another and generally results from
the commission of an act beyond the limits of the property affected,
while trespass is a direct infringement of another’s right of property.18
Thus, where there is no actual physical invasion of the plaintiff’s prop-
erty, the cause of action is for nuisance rather than trespass.19
Given that trespass is typically clear and strict, and nuisance is
typically not clear or strict, the boundary between interferences governed
12
Art. 695, NCC.
13
Art. 695, NCC; see also 39 Am. Jr., Sec. 7, 284-2856.
14
Black’s Law Dictionary, 5th ed., 961.
15
Id.
16
Id., 961-962, citing Kelley v. New York, 6 Misc. 516, 27 N.Y.S. 164.
17
Adams v. Cleveland-Cliffs Iron Co., 237 Mich. App. 51, 602 N.W.2d 215 (1999); Had-
field v. Oakland County Drain Commissioner, 430 Mich. 139, 151, 422 N.W.2d 205 (1988).
18
39 Am. Jur. 282, cited in II Caguioa, Civil Code of the Philippines, 1966 ed., 332.
19
Id.
570 PROPERTY
If a nuisance will result in injury to another person, the provisions
of Articles 696, 697, 699, 703 and 705 allow recovery of damages.
But in such cases, the source of obligation of the person responsible
to pay damages is quasi delict or tort. As explained by Judge Sangco,8
“a nuisance is a tort, governed by the rules on tort generally, so that,
as in the case of other torts, legal liability for a nuisance is predicated
on an invasion of the plaintiff’s legal rights by an act not warranted by
law, or from a neglect of duty imposed by law, that results in damage
to another.”
[126.3] Distinguished From Negligence
While nuisance is a tort, it differs, however, from negligence. It has
been held that the legal basis of liability for nuisance is not negligence
but the resulting injury to others regardless of the degree of care or
skill exercised to avoid such injury.9 Stated otherwise, liability for
negligence is based on want of a proper care, while, ordinarily, a person
who creates or maintains a nuisance is liable for the resulting injury to
others regardless of the degree of care or skill exercised to avoid such
injury.10 However, a nuisance may be and frequently is the consequence
of negligence, or the same acts or omissions which constitute negligence
may give rise to a nuisance.11
Art. 695. Nuisance is either public or private. A public nuisance af-
fects a community or neighborhood or any considerable number of per-
sons, although the extent of the annoyance, danger or damage upon indi-
viduals may be unequal. A private nuisance is one that is not included in
the foregoing definition.
§ 127. Classifications of Nuisance
[127.1] Public and Private Nuisance
A nuisance is either public or private. A public nuisance affects
a community or neighborhood or any considerable number of persons,
although the extent of the annoyance, danger or damage upon individuals
8
Judge Sangco, Phil. Law on Torts and Damages, Vol. 2, 1994 ed., pp. 885-886.
39 Am Jur. 282, cited in Lebayen v. A.S. Diaz Electric Service, Inc., 1 CA Rep. 178.
10
Id.
Lebayen v. A.S. Diaz Electric Service, Inc., 1 CA Rep. 178.
572 PROPERTY
by trespass and those governed by nuisance would seem to be a matter
of some importance. In principle, the boundary between trespass and
nuisance is fixed by the nature of the interests these actions are said to
protect: Trespass is said to protect the interest in possession of land,
while nuisance is said to protect the use and enjoyment of land.
Unlike nuisance, the law of intentional trespass is “exceptionally
simple and exceptionally rigorous.”20 Any intentional intrusion that
deprives another of possession of land, even if only temporarily, is
considered a trespass,21 and one who commits an intentional trespass
is subject to liability “irrespective of whether he thereby causes any
harm to any legally protected interest of the other.”22 There is no inquiry
therefore into the balance of interests between the plaintiff and defendant
or whether the intrusion was reasonable. This is so because the private
landowner’s right to exclude others from his or her land is “one of
the most essential sticks in the bundle of rights that are commonly
characterized as property.”23
The case of Jacque v. Steenberg Homes, Inc.,24 a case decided by
the Supreme Court of Wisconsin in the United States of America, is a
good example of a case showing trespass to land.
Jacque v. Steenberg Homes, Inc.
Supreme Court of Wisconsin, 1997
563 N.W.2d 154
WILLIAM A. BABLITCH, Justice.
Steenberg Homes had a mobile home to deliver. Unfortunately for Harvey
and Lois Jacque (the Jacques), the easiest route of delivery was across their
land. Despite adamant protests by the Jacques, Steenberg plowed a path through
the Jacques’ snow-covered field and via that path, delivered the mobile home.
Consequently, the Jacques sued Steenberg Homes for intentional trespass. At
trial, Steenberg Homes conceded the intentional trespass, but argued that no
compensatory damages had been proved, and that punitive damages could not
be awarded without compensatory damages. Although the jury awarded the
Jacques $1 in nominal damages and $100,000 in punitive damages, the circuit
20
William L. Prosser, Torts 63 (4th ed., 1971).
21
Restatement (Second) of Torts § 158.
22
Id.
23
Jacque v. Steenberg Homes, Inc., 563 N.W.2d 154.
24
563 N.W.2d 154 (1997).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 573
NUISANCE (N)
court set aside the jury’s award of $100,000. The court of appeals affirmed,
reluctantly concluding that it could not reinstate the punitive damages because
it was bound by precedent establishing that an award of nominal damages will
not sustain a punitive damage award. * * *
I.
The relevant facts follow. Plaintiffs, Lois and Harvey Jacques, are an
elderly couple, now retired from farming, who own roughly 170 acres near
Wilke’s Lake in the town of Schleswig. The defendant, Steenberg Homes, Inc.
(Steenberg), is in the business of selling mobile homes. In the fall of 1993, a
neighbor of the Jacques purchased a mobile home from Steenberg. Delivery of
the mobile home was included in the sales price.
Steenberg determined that the easiest route to deliver the mobile home
was across the Jacques’ land. Steenberg preferred transporting the home across
the Jacques’ land because the only alternative was a private road which was
covered in up to seven feet of snow and contained a sharp curve which would
require sets of “rollers” to be used when maneuvering the home around the
curve. Steenberg asked the Jacques on several separate occasions whether it
could move the home across the Jacques’ farm field. The Jacques refused. The
Jacques were sensitive about allowing others on their land because they had lost
property valued at over $10,000 to other neighbors in an adverse possession
action in the mid-1980’s. Despite repeated refusals from the Jacques, Steenberg
decided to sell the mobile home, which was to be used as a summer cottage,
and delivered it on February 15, 1994.
On the morning of delivery, Mr. Jacque observed the mobile home parked
on the corner of the town road adjacent to his property. He decided to find out
where the movers planned to take the home. The movers, who were Steenberg
employees, showed Mr. Jacque the path they planned to take with the mobile
home to reach the neighbor’s lot. The path cut across the Jacques’ land. Mr.
Jacque informed the movers that it was the Jacques’ land they were planning
to cross and that Steenberg did not have permission to cross their land. He told
them that Steenberg had been refused permission to cross the Jacques’ land.
One of Steenberg’s employees called the assistant manager, who then
came out to the Jacques’ home. In the meantime, the Jacques called and asked
some of their neighbors and the town chairman to come over immediately.
Once everyone was present, the Jacques showed the assistant manager an
aerial map and plat book of the township to prove their ownership of the land,
and reiterated their demand that the home not be moved across their land.
At that point, the assistant manager asked Mr. Jacque how much money
it would take to get permission. Mr. Jacque responded that it was not a question
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 575
NUISANCE (N)
conclusion, the Barnard court said no. Barnard continues to state the general
rule of punitive damages in Wisconsin. See Tucker v. Marcus, 418 N.W.2d 818,
823-24 (Wis. 1988). The rationale for the compensatory damage requirement
is that if the individual cannot show actual harm, he or she has but a nominal
interest, hence, society has little interest in having the unlawful, but otherwise
harmless, conduct deterred, therefore, punitive damages are inappropriate.
Jacque v. Steenberg Homes, Inc., 548 N.W.2d 80 (Wis. Ct. App. 1996); Maxwell
v. Kennedy, 7 N.W. 657, 658-59 (Wis. 1880).
However, whether nominal damages can support a punitive damage
award in the case of an intentional trespass to land has never been squarely
addressed by this court. Nonetheless, Wisconsin law is not without reference
to this situation. In 1854 the court established punitive damages, allowing
the assessment of “damages as a punishment to the defendant for the purpose
of making an example.” McWilliams v. Bragg, 3 Wis. 424, 425 (1854). The
McWilliams court related the facts and an illustrative tale from the English case
of Merest v. Harvey, 128 Eng. Rep. 761 (C.P. 1814), to explain the rationale
underlying punitive damages.
In Merest, a landowner was shooting birds in his field when he was
approached by the local magistrate who wanted to hunt with him. Although
the landowner refused, the magistrate proceeded to hunt. When the landowner
continued to object, the magistrate threatened to have him jailed and dared
him to file suit. Although little actual harm had been caused, the English court
upheld damages of 500 pounds, explaining “in a case where a man disregards
every principle which actuates the conduct of gentlemen, what is to restrain
him except large damages?” McWilliams, 3 Wis. 424 at 428.
To explain the need for punitive damages, even where actual harm is
slight, McWilliams related the hypothetical tale from Merest of an intentional
trespasser:
Suppose a gentleman has a paved walk in his paddock,
before his window, and that a man intrudes and walks up and down
before the window of his house, and looks in while the owner is at
dinner, is the trespasser permitted to say “here is a halfpenny for
you which is the full extent of the mischief I have done.” Would
that be a compensation? I cannot say that it would be. . . .
McWilliams, 3 Wis. at 428. Thus, in the case establishing punitive
damages in this state, this court recognized that in certain situations of trespass,
the actual harm is not in the damage done to the land, which may be minimal,
but in the loss of the individual’s right to exclude others from his or her property
and, the court implied that this right may be punished by a large damage award
despite the lack of measurable harm.
574 PROPERTY
of money; the Jacques just did not want Steenberg to cross their land. Mr.
Jacque testified that he told Steenberg to “[F]ollow the road, that is what the
road is for.” Steenberg employees left the meeting without permission to cross
the land.
At trial, one of Steenberg’s employees testified that, upon coming out of
the Jacques’ home, the assistant manager stated: “I don’t give a — what [Mr.
Jacque] said, just get the home in there any way you can.” The other Steenberg
employee confirmed this testimony and further testified that the assistant
manager told him to park the company truck in such a way that no one could
get down the town road to see the route the employees were taking with the
home. The assistant manager denied giving these instructions, and Steenberg
argued that the road was blocked for safety reasons.
The employees, after beginning down the private road, ultimately used a
“bobcat” to cut a path through the Jacques’ snow-covered field and hauled the
home across the Jacques’ land to the neighbor’s lot. One employee testified that
upon returning to the office and informing the assistant manager that they had
gone across the field, the assistant manager reacted by giggling and laughing.
The other employee confirmed this testimony. The assistant manager disputed
this testimony.
When a neighbor informed the Jacques that Steenberg had, in fact, moved
the mobile home across the Jacques’ land, Mr. Jacque called the Manitowoc
County Sheriff’s Department. After interviewing the parties and observing
the scene, an officer from the sheriff’s department issued a $30 citation to
Steenberg’s assistant manager. * * *
This case presents three issues: (1) whether an award of nominal damages
for intentional trespass to land may support a punitive damage award and, if
so; (2) whether the law should apply to Steenberg or should only be applied
prospectively and, if we apply the law to Steenberg; (3) whether the $100,000
in punitive damages awarded by the jury is excessive. * * *
II.
* * * Steenberg argues that, as a matter of law, punitive damages could
not be compensatory damages and here the jury awarded only nominal and
punitive damages. The Jacques contend that the rationale supporting the
compensatory damage award requirement is inapposite when the wrongful act
is an intentional trespass to land. We agree with the Jacques. * * *
The general rule was stated in Barnard v. Cohen, 162 N.W. 480 (Wis.
1917), where the question presented was: “In an action for libel, can there be
a recovery of punitory damages if only nominal compensatory damages are
found?” With the bare assertion that authority and better reason supported its
576 PROPERTY
* * * The Jacques argue that both the individual and society have significant
interests in deterring intentional trespass to land, regardless of the lack of
measurable harm that results. We agree with the Jacques. An examination of
the individual interests invaded by an intentional trespass to land, and society’s
interests in preventing intentional trespass to land, leads us to the conclusion
that the Barnard rule should not apply when the tort supporting the award is
intentional trespass to land.
We turn first to the individual landowner’s interest in protecting his or her
land from trespass. The United States Supreme Court has recognized that the
private landowner’s right to exclude others from his or her land is “one of the
most essential sticks in the bundle of rights that are commonly characterized
as property.” Dolan v. City of Tigard, 512 U.S. 374, 384 (1994). This court
has long recognized “[e]very person’s] constitutional right to the exclusive
enjoyment of his own property for any purpose which does not invade the
rights of another person.” Diana Shooting Club v. Lamoreaux, 89 N.W. 880,
886 (Wis. 1902) (holding that the victim of an intentional trespass should have
been allowed to take judgment for nominal damages and costs). Thus, both this
court and the Supreme Court recognize the individual’s legal right to exclude
others from private property.
Yet a right is hollow if the legal system provides insufficient means
to protect it. Felix Cohen offers the following analysis summarizing the
relationship between the individual and the state regarding property rights:
[T]hat is property to which the following label can be
attached:
To the world:
Keep off X unless you have my permission,
which I may grant or
withhold.
Signed: Private Citizen
Endorsed: The state
Felix S. Cohen, Dialogue on Private Property, 9 Rutgers Law Review
357, 374 (1954). Harvey and Lois Jacque have the right to tell Steenberg Homes
and any other trespasser, “No, you cannot cross our land.” But that right has no
practical meaning unless protected by the State. And, as this court recognized
as early as 1854, a “halfpenny” award does not constitute state protection.
The nature of the nominal damage award in an intentional trespass to
land case further supports an exception to Barnard. Because a legal right is
involved, the law recognizes that actual harm occurs in every trespass. The
action for intentional trespass to land is directed at vindication of the legal
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 577
NUISANCE (N)
right. W. Page Keeton, Prosser and Keeton on Torts, § 13 (5th ed. 1984). The
law infers some damage from every direct entry upon the land of another.
Id. The law recognizes actual harm in every trespass to land whether or not
compensatory damages are awarded. Id. Thus, in the case of intentional trespass
to land, the nominal damage award represents the recognition that, although
immeasurable in mere dollars, actual harm has occurred.
The potential for harm resulting from intentional trespass also supports
an exception to Barnard. A series of intentional trespasses, as the Jacques had
the misfortune to discover in an unrelated action, can threaten the individual’s
very ownership of the land. The conduct of an intentional trespasser, if repeated,
might ripen into prescription or adverse possession and, as a consequence, the
individual landowner can lose his or her property rights to the trespasser. See
Wis. Stat. § 893.28.
In sum, the individual has a strong interest in excluding trespassers from
his or her land. Although only nominal damages were awarded to the Jacques,
Steenberg’s intentional trespass caused actual harm. We turn next to society’s
interest in protecting private property from the intentional trespasser.
Society has an interest in punishing and deterring intentional trespassers
beyond that of protecting the interests of the individual landowner. Society has
an interest in preserving the integrity of the legal system. Private landowners
should feel confident that wrongdoers who trespass upon their land will be
appropriately punished. When landowners have confidence in the legal system,
they are less likely to resort to “selfhelp” remedies. In McWilliams, the court
recognized the importance of “‘prevent[ing] the practice of dueling, [by
permitting] juries to punish insult by exemplary damages.’” McWilliams, 3
Wis. at 428. Although dueling is rarely a modern form of self-help, one can
easily imagine a frustrated landowner taking the law into his or her own hands
when faced with a brazen trespasser, like Steenberg, who refuses to heed no
trespass warnings.
People expect wrongdoers to be appropriately punished. Punitive
damages have the effect of bringing to punishment types of conduct that, though
oppressive and hurtful to the individual, almost invariably go unpunished by
the public prosecutor. Kink v. Combs, 135 N.W.2d 789 (Wis. 1965). The $30
forfeiture was certainly not an appropriate punishment for Steenberg’s egregious
trespass in the eyes of the Jacques. It was more akin to Merest’s “halfpenny.” If
punitive damages are not allowed in a situation like this, what punishment will
prohibit the intentional trespass to land? Moreover, what is to stop Steenberg
Homes from concluding, in the future, that delivering its mobile homes via an
intentional trespass and paying the resulting Class B forfeiture, is not more
profitable than obeying the law? Steenberg Homes plowed a path across the
Jacques’ land and dragged the mobile home across that path, in the face of the
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 579
NUISANCE (N)
suit to prosper, the plaintiff must be able to prove two things: (1) that
there was damage to the property;27 and (2) the interference is either:
(a) intentional and unreasonable; or (b) or unintentional and otherwise
negligent or reckless conduct; or (c) resulting in abnormally dangerous
activities in an inappropriate place.28
(i) There Must Be Damage
Unlike in trespass to land which does not require damage to the
property in order for the plaintiff to recover damages,29 it is necessary
in private nuisance that the plaintiff must suffer some form of damage.
Damage may be proved in one of two ways: (1) by proving physical
damage to the property (otherwise known as “tangible nuisance”); or
(2) by proving personal discomfort (loss of amenity) in the claimant’s
use of the premises (otherwise known as “intangible nuisance”).
To succeed in private nuisance, the claimant must ordinarily
show damage to the property. If there were physical harm to property
(for example, damage to trees and shrubs) then it would be necessary
only to show that the harm had been caused by the defendant’s action
and that some kind of harm was a foreseeable consequence of the
defendant’s action. For example, in St. Helens Smelting v. Tipping,30
a case decided by the English court in 1865, damage was caused to
the claimant’s trees by fumes from an industrial plant, which is a clear
case of a nuisance. If the land is physically affected, “damage” may be
presumed by the court, even if the claimant cannot show that his land
has diminished in value. In Hunter v. Canary Wharf, Ltd. and Hunter
v. London Docklands Development Corp.,31 it was held that the deposit
of dust on the claimant’s land was held to be capable of amounting to
damage, even though the claimant had not shown that the value of his
land had been adversely affected.
If the damage relates to the amenity of the land, rather than its
physical state or condition, a claim for private nuisance may likewise
prosper if the defendant’s actions cause the land to become less valuable.
For example, noise from a go-kart track was held in other jurisdictions
27
St. Helen’s Smelting Co. v. Tipping, II ER 1483 (1865).
28
Hendricks v. Stalnaker, supra; Restatement (Second) Torts § 822.
29
See Jacque v. Steenberg Homes, Inc., supra.
30
II ER 1483 (1865).
31
(1997) AC 655.
578 PROPERTY
Jacques’ adamant refusal. A $30 forfeiture and a $1 nominal damage award are
unlikely to restrain Steenberg Homes from similar conduct in the future. An
appropriate punitive damage award probably will.
In sum, as the court of appeals noted, the Barnard rule sends the wrong
message to Steenberg Homes and any others who contemplate trespassing
on the land of another. It implicitly tells them that they are free to go where
they please, regardless of the landowner’s wishes. As long as they cause no
compensable harm, the only deterrent intentional trespassers face is the nominal
damage award of $1, the modern equivalent of Merest’s halfpenny, and the
possibility of a Class B forfeiture under Wis. Stat. § 943.13. We conclude that
both the private landowner and society have much more than a nominal interest
in excluding others from private land. Intentional trespass to land causes actual
harm to the individual, regardless of whether that harm can be measured in
mere dollars. Consequently, the Barnard rationale will not support a refusal
to allow punitive damages when the tort involved is an intentional trespass to
land. Accordingly, assuming that the other requirements for punitive damages
have been met, we hold that nominal damages may support a punitive damage
award in an action for intentional trespass to land. * * *
In conclusion, we hold that when nominal damages are awarded for an
intentional trespass to land, punitive damages may, in the discretion of the jury,
be awarded. Our decision today shall apply to Steenberg Homes. Finally, we
hold that the $100,000 punitive damages awarded by the jury is not excessive.
Accordingly, we reverse and remand to the circuit court for reinstatement of
the punitive damage award.
[127.1.2] Requisites for Recovery Under Private Nuisance
The concept of private nuisance is not so well-developed in
Philippine jurisprudence unlike in other jurisdictions. Most of the cases
decided by the Philippine Supreme Court applying the law of nuisance
involved mainly the concept of abatement of nuisances and distinctions
between nuisance per se and nuisance per accidens.
As distinguished from trespass to land, a private nuisance has been
defined as “a substantial and unreasonable interference with the private
use and enjoyment of another’s land.”25 Hence, the essence of a private
nuisance claim is the protection of a property owner’s interest in the
private use and enjoyment of his land.26 In order for a private nuisance
25
Hendricks v. Stalnaker, 380 S.E.2d 198, 200-202 (W.Va. 1989).
26
Adkins v. Thomas Solvent Co, 440 Mich 293, 302; 487 NW2d 715 (1992).
580 PROPERTY
to be an actionable nuisance,32 as was the bad smell emanating form a
pig farm.33 In the case, however, of Hunter v. Canary Wharf, Ltd., and
Hunter v. London Docklands Development Corp., supra, it was held
that interference with television reception due to the construction of a
tall tower was not actionable in either public or private nuisance as an
interference with the use or enjoyment of land.
(ii) Substantial, Intentional and Unreasonable Interference
After proving that there is damage to the property, the plaintiff is
likewise required to prove that the interference with the private use and
enjoyment of another’s land is either: (a) intentional and unreasonable;
or (b) or unintentional and otherwise negligent or reckless conduct;
or (c) resulting in abnormally dangerous activities in an inappropriate
place.34
Interference is intentional when the actor knows or should know
that the conduct is causing a substantial and unreasonable interference.35
The unreasonableness of an intentional interference must be determined
by a balancing of the landowners’ interests.36 Interference is unreasonable
when the gravity of the harm outweighs the social value of the activity
alleged to cause the harm.37 In other words, there is only a nuisance if the
annoyance outweighs the utility to the actor and to society as a whole.
This is known as the doctrine of comparative utility or balancing of
utilities doctrine.
Hendricks v. Stalnaker
Supreme Court of Appeals of West Virginia, 1989
380 S.E.2d 198
NEELY, Justice:
Walter S. Stalnaker, defendant below, appeals from a decision by the
Circuit Court of Lewis County declaring a water well drilled on his property
to be a private nuisance to Harry L. Hendricks and Mary Hendricks, plaintiffs
32
Tetley v. Chitty (1986).
33
Bone v. Seal (1975).
34
Hendricks v. Stalnaker, supra; Restatement (Second) Torts § 822.
35
Id., citing Restatement (Second) Torts § 825 (1979).
36
Id.
37
Id., citing W. Prosser, supra § 87, at 581, § 89 at 596; Restatement (Second) of Torts § 826
(1979); W. Keeton, supra § 88, at 629. Restatement (Second) of Torts §§ 827 and 828 (1979).
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 581
NUISANCE (N)
below. The Hendrickses, owners of the property adjacent to that of Mr. Stalnaker,
were refused a Health Department permit for a septic system located within
100 feet of Mr. Stalnaker’s water well. The Circuit Court of Lewis County,
based on a jury verdict, found the water well to be a private nuisance and
ordered its abatement. On appeal, Mr. Stalnaker argues that because his water
well was not an unreasonable use of his land, he is not liable for the effects on
the Hendrickses’ property. We agree and, therefore, reverse the decision of the
circuit court.
Mr. Stalnaker owns approximately 10 acres of land situated on Glady
Fork Road, Lewis County. In 1985, Mr. Stalnaker constructed his home on a
2.493 acre portion of the tract, and had two water wells dowsed. One well was
located behind his house and the other, near the Hendrickses’ property. The
rear well was near land disturbed by a former strip mine and, therefore, the
well produced poor quality water. Except for a small section of land near the
Hendrickses’ property — the location of the second “dowsed” well — most of
Mr. Stalnaker’s home tract had been disturbed by a strip mine. In August 1985,
Mr. Stalnaker spent approximately $3,000 in an unsuccessful attempt to treat
the water from the rear well.
In 1984, the Hendrickses purchased approximately 2.95 acres adjacent
to Mr. Stalnaker’s property for a home site or a trailer development. On
31 December 1985, Mr. Hendricks met with the Lewis County sanitarian
to determine locations for a water well and a septic system. The Health
Department requires a distance of 100 feet between water wells and septic
systems before it will issue permits. Because the Hendrickses’ land was too
hilly or had been disturbed in order to build a pond, the only location for a
septic system on the tract was near Mr. Stalnaker’s property. On 13 January
1986, the Hendrickses contacted the county sanitarian to visit their property
to complete the septic system permit application. The county sanitarian said
because of snowy weather he would come out later in the week.
On 13 January 1986, Mr. Stalnaker called the sanitarian and was told
about the Hendrickses’ proposed septic system. Mr. Stalnaker was also told that
the county sanitarian would be unavailable on 14 January 1986 but could meet
with him on 15 January 1986. On 14 January 1986, Mr. Stalnaker contacted a
well driller, who applied for and received a well drilling permit for the second
well from the assistant sanitarian. The well was completed on 25 January 1986
but was not connected to Mr. Stalnaker’s home until January 1987.
On 15 January 1986, the county sanitarian informed Mr. Hendricks that
no permit for his proposed septic system could be issued because the absorp-
tion field for his septic system was within one hundred feet of Mr. Stalnaker’s
water well. Mr. Hendricks did install a septic system without a permit in Janu-
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 583
NUISANCE (N)
an examination of the reasonableness of the property’s use. See McGregor v.
Camden, 34 S.E. 936 (W. Va. 1899) (required an examination of the location,
capacity and management of oil and gas well); Pope v. Edward M. Rude Carrier
Corp., 75 S.E.2d 584 (W. Va. 1953) (transportation of explosives); Martin,
supra (used automobile lot); State ex rel. Ammerman v. City of Philippi, 65
S.E.2d 713 (W. Va. 1951) (tire recapping business); Ritz v. Woman’s Club of
Charleston, 173 S.E. 564 (W. Va. 1934) (noise); Harless v. Workman, 114
S.E.2d 548 (W. Va. 1960) (coal dust).
In the area of public nuisance, we have made explicit that an examination
of the “reasonableness or unreasonableness of the use of property in relation
to the particular locality” is a fair test to determine the existence of a public
nuisance. Similarly, any determination of liability for a private nuisance must
include an examination of the private use and enjoyment of the land seeking
protection and the nature of the interference.
Because the present case concerns conduct that is not a negligent,
reckless, or abnormally dangerous activity, our discussion of private nuisance
is limited to conduct that is intentional and unreasonable. An interference is
intentional when the actor knows or should know that the conduct is causing
a substantial and unreasonable interference. Restatement (Second) of Torts
§ 825 (1979). The unreasonableness of an intentional interference must be
determined by a balancing of the landowners’ interests. An interference is
unreasonable when the gravity of the harm outweighs the social value of the
activity alleged to cause the harm. See W. Prosser, supra § 87, at 581, § 89 at
596; Restatement (Second) of Torts § 826 (1979); W. Keeton, supra § 88, at
629. Restatement (Second) of Torts §§ 827 and 828 (1979) list some of the
factors to be considered in determining the gravity of the harm and the social
value of the activity alleged to cause the harm. However, this balancing to
determine unreasonableness is not absolute. Additional consideration might
include the malicious or indecent conduct of the actor. Restatement (Second)
of Torts § 829. * * *
In the case before us, the Hendrickses’ inability to operate a septic
system on their property is clearly a substantial interference with the use and
enjoyment of their land. The record indicates that the installation of the water
well was intentional, but there was no evidence that the installation was done
so as maliciously to deprive the Hendrickses of a septic system. Mr. Stalnaker
wanted to insure himself of an adequate water supply and found no alternative
to the well he dug.
The critical question is whether the interference, the installation of a
water well, was unreasonable. Unreasonableness is determined by balancing
the competing landholders’ interests. We note that either use, well or septic
system, burdens the adjacent property. Under Health Department regulations,
582 PROPERTY
ary 1987; however, the system was left inoperative pending the outcome of
this suit.
The Hendrickses filed suit in the Circuit Court of Lewis County on 29
January 1987 requesting: (1) the water well be declared a private nuisance, (2)
the nuisance be abated, and (3) damages. In a bifurcated trial, the jury found
that the water well was a private nuisance and the trial judge ordered it to be
abated. On the issue of damages the jury found for the defendant and awarded
no damages.
I
In the past we have broadly described what constitutes a nuisance:
A nuisance is anything which annoys or disturbs the free use
of one’s property, or which renders its ordinary use or physical
occupation uncomfortable. . . A nuisance is anything which
interferes with the rights of a citizen, either in person, property,
the enjoyment of his property, or his comfort. . . A condition is
a nuisance when it clearly appears that enjoyment of property is
materially lessened, and physical comfort of persons in their homes
is materially interfered with thereby. (Citations omitted).
Martin v. Williams, 93 S.E.2d 835, 844 (W. Va. 1956). * * * This definition
of nuisance includes acts or conditions that affect either the general public or a
limited number of persons. In Hark v. Mountain Fork Lumber Co., 34 S.E.2d
348, 354 (W. Va. 1945) we defined a public nuisance as that which “affects
the general public as public, and [a private nuisance as that which] injures one
person or a limited number of persons only.”
In order clearly to delineate between a public nuisance and a private
nuisance, we define a private nuisance as a substantial and unreasonable
interference with the private use and enjoyment of another’s land. The definition
of private nuisance includes conduct that is intentional and unreasonable,
negligent or reckless, or that results in an abnormally dangerous conditions or
activities in an inappropriate place. See W. Prosser, Handbook of the Law of
Torts § 87 at 580, § 89 at 593 (4th ed. 1971); Restatement (Second) of Torts §§
821D, 821F, 822 (1979); W. Keeton, Prosser and Keeton on the Law of Torts §
87 (5th ed. 1984). Recovery for a private nuisance is limited to plaintiffs who
have suffered a significant harm to their property rights or privileges caused by
the interference. Restatement (Second) of Torts §§ 821E, 821F (1979).
Early West Virginia cases indicate that the existence of a private nuisance
was determined primarily by the harm caused. Medford v. Levy, 8 S.E. 302
(W. Va. 1888) (cooking odors); Flanagan v. Gregory and Poole, Inc., 67
S.E.2d 865 (W. Va. 1951) (inadequate culvert). Gradually, the focus included
584 PROPERTY
a water well merely requires non-interference within 100 feet of its location. In
the case of a septic system, however, the 100 foot safety zone, extending from
the edge of the absorption field, may intrude on adjacent property. Thus, the
septic system, with its potential for drainage, places a more invasive burden on
adjacent property. Clearly both uses present similar considerations of gravity
of harm and social value of the activity alleged to cause the harm. Both a water
well and a septic system are necessary to use this land for housing; together
they constitute the in and out of many water systems. Neither party has an
inexpensive and practical alternative. The site of the water well means quality
water for Mr. Stalnaker, and the Hendrickses have only one location available
for their septic system.
In the case before us, we are asked to determine if the water well is a
private nuisance. But if the septic system were operational, the same question
could be asked about the septic system. Because of the similar competing
interests, the balancing of these landowners’ interests is at least equal or,
perhaps, slightly in favor of the water well. Thus, the Hendrickses have not
shown that the balancing of interests favors their septic system. We find that
the evidence presented clearly does not demonstrate that the water well is an
unreasonable use of land and, therefore, does not constitute a private nuisance.
***
We find that because the evidence is not disputed and only one interference
is reasonable, the trial court should have held as a matter of law that the water
well was not a private nuisance. * * *
Reversed.
In deciding the issue of unreasonableness, courts are therefore
called upon to maintain a balance between the interests and rights of the
defendant to use his land and the claimant’s interests. In determining
what is reasonable interference, the following factors are generally
considered: (1) the locality of the plaintiff because inhabitants of
industrial areas must expect more interference;38 (2) the extent of the
interference (even in industrial areas, there are limits);39 (3) and the time
of day (a continuous loud noise made during the middle of the night, for
example, is considered less acceptable than the same during the day.
38
See Bliss v. Hale (1838), 7 L.J.R. 122 (1838); Sturges v. Bridgeman, 11 Eng. Rep. 852
(Ch. D. 1879).
39
R. v. Neville, 170 Eng. Rep. 102 (1791); Colls v. Home and Colonial Stores, (1865) A.C.
179.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 585
NUISANCE (N)
[127.2] Nuisance Per Se and Per Accidens
As to their nature or character, nuisances are classified into either
nuisance per se (or nuisance at law) and nuisance per accidens (or
nuisance in fact). The first is recognized as a nuisance under any and
all circumstances,40 regardless of location or surroundings,41 because
it constitutes a direct menace to public health or safety.42 The second
is not a nuisance per se but may become a nuisance by reason of the
circumstances of the location and surroundings or manner in which it
is performed or operated,43 and its existence being a question of fact, it
cannot be abated without due hearing thereon in a tribunal authorized
to decide whether such a thing does in law constitute a nuisance.44 The
difference between a nuisance per se and a nuisance per accidens is that
in the former, injury in some form is certain to be inflicted, while in the
latter, the injury is uncertain or contingent until it actually occurs.45
The traditional test for determining the existence of a nuisance
per se is whether the nuisance has become dangerous at all times and
under all circumstances to life, health, or property.46 Good examples of
nuisances per se are those which are prohibited by law, such as houses
of ill fame (or prostitution)47 and gambling houses.48 These activities are
nuisances per se regardless of their location or surroundings.
[127.3] Doctrine of Attractive Nuisance
The doctrine of attractive nuisance is of American origin and
recognized in this jurisdiction in the case of Taylor v. Manila Electric.49
The doctrine may be stated, in short, as follows: one who maintains on
40
Salao v. Santos, G.R. No. L-45519, April 26, 1939, citing Iloilo Ice and Cold Storage Co.
v. Municipal Council of Iloilo, 24 Phil. 471; Monteverde v. Generoso, 52 Phil. 123, 127.
41
Black’s Law Dictionary, 5th ed., 962, citing Bluemer v. Saginaw Central Oil & Gas Ser-
vice, Inc., 356 Mich. 399, 97 N.W.2d 90, 96; Koeber v. Apex-Albuq Phoenix Exp., 72 N.M.4, 380
P.2d 14, 15, 16.
42
Salao v. Santos, supra.
43
Black’s Law Dictionary, 5th ed., 962, citing Robichaux v. Happunbauer, 258 La.
44
Salao v. Santos, supra.
45
State ex rel. Cunningham v. Feezell, 218 Tenn. 17, 400 S.W. 2d 716, 719, cited in Black’s
Law Dictionary, 5th ed., 962.
46
Suddeth v. Knight, 280 S.C. 540, 545, 314 S.E.2d 11, 14 (Ct. App. 1984); Black’s Law
Dictionary 1094 (7th ed., 1999).
47
Iloilo Ice and Cold Storage Co. v. Municipal Council of Iloilo, supra.
48
Id.
49
16 Phil. 8.
PROPERTY, OWNERSHIP, AND ITS MODIFICATION 587
NUISANCE (N)
Art. 702. The district health officer shall determine whether or not
abatement, without judicial proceedings, is the best remedy against a
public nuisance.
Art. 703. A private person may file an action on account of a public
nuisance, if it is specially injurious to himself.
Art. 704. Any private person may abate a public nuisance which is
specially injurious to him by removing, or if necessary, by destroying the
thing which constitutes the same, without committing a breach of the
peace, or doing unnecessary injury. But it is necessary:
(1) That demand be first made upon the owner or possessor of
the property to abate the nuisance;
(2) That such demand has been rejected;
(3) That the abatement be approved by the district health officer
and executed with the assistance of the local police; and
(4) That the value of the destruction does not exceed Three thou-
sand pesos (P3,000).
Art. 705. The remedies against a private nuisance are:
(1) A civil action; or
(2) Abatement, without judicial proceedings.
Art. 706. Any person injured by a private nuisance may abate it by
removing, or if necessary by destroying the thing which constitutes the
nuisance, without committing a breach of the peace or doing unneces-
sary injury. However, it is indispensable that the procedure for extrajudi-
cial abatement of a public nuisance by a private person be followed.
Art. 707. A private person or a public official extrajudicially abating
a nuisance shall be liable for damages:
(1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by the courts to be not
a real nuisance.
§ 128. Remedies
Whether the nuisance is public or private, the following remedies
are available: (1) a civil action; or (2) abatement, without judicial
proceedings.52 With regard to a public nuisance, the additional remedy
52
Arts. 699(2) and (3) and 705(1) and (2), NCC.
586 PROPERTY
his premises dangerous instrumentalities or appliances of a character
likely to attract children in play, and who fails to exercise ordinary
care to prevent children from playing therewith or resorting thereto, is
liable to a child of tender years who is injured thereby, even if the child
is technically a trespasser in the premises.50 The principal reason for
the doctrine is that the condition or appliance in question although its
danger is apparent to those of age, is so enticing or alluring to children
of tender years as to induce them to approach, get on or use it, and this
attractiveness is an implied invitation to such children.51
Is a swimming pool or water tank an instrumentality or appliance
likely to attract the little children in play? In other words, is the body of
water an attractive nuisance? In Hidalgo Enterprises, Inc. v. Balandan,
supra, it was held that the attractive nuisance doctrine generally is not
applicable to bodies of water, artificial as well as natural, in the absence
of some unusual condition or artificial feature other than the mere water
and its location.
Art. 696. Every successive owner or possessor of property who fails
or refuses to abate a nuisance in that property started by a former owner
or possessor is liable therefor in the same manner as the one who cre-
ated it.
Art. 697. The abatement of a nuisance does not preclude the right of
any person injured to recover damages for its past existence.
Art. 698. Lapse of time cannot legalize any nuisance, whether public
or private.
Art. 699. The remedies against a public nuisance are:
(1) A prosecution under the Penal Code or any local ordinance;
or
(2) A civil action; or
(3) Abatement, without judicial proceedings.
Art. 700. The district health officer shall take care that one or all of
the remedies against a public nuisance are availed of.
Art. 701. If a civil action is brought by reason of the maintenance of a
public nuisance, such action shall be commenced by the city or municipal
mayor.
50
Hidalgo Enterprises, Inc. v. Balandan, 48 O.G. 2641 (1932).
51
Id.
588 PROPERTY
of criminal prosecution under the provisions of the Revised Penal Code
or any applicable local ordinance is also available.53
[128.1] Criminal Prosecution
As distinguished from private nuisance, a public nuisance may
also be the subject of a criminal prosecution under the Revised Penal
Code or any local ordinance. For example, the conduct of an illegal
gambling is a form of public nuisance which shall subject any person
who shall knowingly permit the commission of the same in any
inhabited or uninhabited place or any building, vessel or other means of
transportation owned or controlled by him.54
[128.2] Abatement of Nuisance
Whether a nuisance is a public or a private one, it may be abated,55
and the abatement may either be without the necessity of judicial
proceedings or only upon due hearing thereon. In a number of cases,56
the Supreme Court clarified, however, that the abatement of a nuisance
without judicial proceedings is possible only if it is a nuisance per se.
In Salao v. Santos,57 the Court explained —
Moreover, nuisances are of two kinds: nuisance per
se and nuisance per accidens. The first is recognized as
a nuisance under any and all circumstances, because it
constitutes a direct menace to public health or safety, and, for
that reason, may be abated summarily under the undefined
law of necessity. The second is that which depends upon
certain conditions and circumstances, and its existence being
a question of fact, it cannot be abated without due hearing
thereon in a tribunal authorized to decide whether such a
thing does in law constitute a nuisance. (Iloilo Ice and Cold
Storage Co. v. Municipal Council of Iloilo, 24 Phil., 471;
Monteverde v. Generoso, 52 Phil., 123, 127.) Appellants’
53
Art. 699(1), NCC.
54
See Art. 195(2), RPC.
55
See Arts. 699 and 705. NCC.
56
Parayno v. Jovellanos, G.R. No. 148408, July 14, 2006; City of Manila v. Judge Laguio,
Jr., G.R. No. 118127, April 25, 2005; Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc., G.R.
No. 148339, Feb. 23, 2005; Santos v. Santos, G.R. No. L-45519, April 26, 1939.
57
Supra.
 PROPERTY, OWNERSHIP, AND ITS MODIFICATION 589 590 PROPERTY
NUISANCE (N)

smoked fish factory is not a nuisance per se. It is a legitimate
industry. If it be, in fact, a nuisance due to the manner of its
operation, then it would be merely a nuisance per accidens.
(Iloilo Ice and Cold Storage Co. v. Municipal Council of
Iloilo, supra; Monteverde v. Generoso, supra.) Consequently,
the order of the municipal president and those of the health
authorities issued with a view to the summary abatement
of what they have concluded, by their own findings, as a
nuisance, are null and void there having been no hearing in
court to the effect.
Thus, a nuisance per accidens cannot be abated without due hearing
thereon in a tribunal authorized to decide whether such a thing does in
law constitute a nuisance.58 And the local government unit concerned
does not have the power to summarily abate a nuisance per accidens in
the guise of exercising its police power through an ordinance. If it does,
such ordinance is null and void because it violates the guarantee of due
process under the Constitution.59
In Parayno v. Jovellanos,60 the Supreme Court struck down the
resolution passed by the Sangguniang Bayan of Calasiao, Pangasinan
authorizing the closure or transfer of location of a gasoline station upon
the authority of its Official Zoning Code. The Court held that the business
of gasoline station could not be considered a nuisance per se which the
municipality could summarily abate in the guise of exercising its police
power. Hence, it cannot be closed down or transferred summarily to
another location.
In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,61 the
Sangguniang Panlungsod of Lucena City, with the aim of localizing
the source of traffic congestion in the city to a single location passed
an ordinance prohibiting the operation of all bus and jeepney terminals
within Lucena, including those already existing, and allowing the
operation of only one common terminal located outside the city proper,
the franchise for which was granted to Lucena Grand Terminal, Inc.
The common carriers plying routes to and from Lucena City were thus
compelled to close down their existing terminals and use the facilities
of Lucena Grand Central. Hence, they questioned the validity of the
ordinance. The Court held that the bus and jeepney terminals are not
nuisances per se. Hence, they may not be abated via an ordinance,
without judicial proceedings, as was done in this case.
In City of Manila v. Judge Laguio, Jr.,62 the Court likewise struck
down the ordinance passed by the City Council of Manila prohibiting
the operation of sauna parlors, massage parlors, karaoke bars, night
clubs, day clubs, super clubs, discotheques, cabarets, dance halls,
motels and inns within the Ermita-Malate area. The Court held, among
others, that the City of Manila could not seek cover under the general
welfare clause to authorize the abatement of nuisances without judicial
proceedings because motels are not nuisances per se.
In Santos v. Salao,63 the Court also declared null and void the
order of the municipal president of Malabon, Rizal and those of its
health authorities issued with a view to the summary abatement of the
appellant’s smoked fish factory. The Court reasoned that the smoked
fish factory is a legitimate industry and not a nuisance per se which
could be abated summarily.
[128.2.1] Who May Abate
Under Article 700 of the New Civil Code, it is the City and/or the
Municipal Health Officer, or in cases of illegal construction, the City
and/or Municipal Engineer, who is charged with the responsibility of
abating public nuisances.
A private person may likewise abate a public nuisance which is
specially injurious to him by removing, or if necessary, by destroying
the thing which constitutes the same, without committing a breach of
the peace, or doing unnecessary injury.64 This rule, however, applies
only to nuisances per se and prior to the abatement, it is necessary:
(1) That demand be first made upon the owner or possessor of
the property to abate the nuisance;

58
Id.
59 62
Id. Supra.
60 63
Supra. Supra.
61 64
Supra. Art. 704, NCC.

PROPERTY, OWNERSHIP, AND ITS MODIFICATION 591 592 PROPERTY

NUISANCE (N)

(2) That such demand has been rejected;

(3) That the abatement be approved by the district health officer
and executed with the assistance of the local police; and
(4) That the value of the destruction does not exceed three
thousand pesos (P3,000).65
The same procedure shall be applied in case of extrajudicial
abatement of a private nuisance by any person injured by the same.66
A private person or a public official who extra-judicially abates a
nuisance shall be liable for damages in the following situations: (1) if he
causes unnecessary injury; or (2) if an alleged nuisance is later declared
by the courts to be not a real nuisance.67
[128.3] Civil Action for Damages
Title IX. REGISTRY OF PROPERTY
Art. 708. The Registry of Property has for its object the inscription
or annotation of acts and contracts relating to the ownership and other
rights over immovable property. (605)
Art. 709. The titles of ownership, or of other rights over immovable
property, which are not duly inscribed or annotated in the Registry of
Property shall not prejudice third persons. (606)
Art. 710. The books in the Registry of Property shall be public for
those who have a known interest in ascertaining the status of the immov-
ables or real rights annotated or inscribed therein. (607)

Whether a nuisance is a public or a private one, a civil action for Art. 711. For determining what titles are subject to inscription or
annotation, as well as the form, effects, and cancellation of inscriptions
its abatement or for injunction may be filed. In case of a public nuisance
and annotations, the manner of keeping the books in the Registry, and
which is not nuisance per se, in which case the remedy of summary the value of the entries contained in said books, the provisions of the
abatement is not available, the action for its abatement or injunction Mortgage Law, the Land Registration Act, and other special laws shall
should be commenced by the city or municipal mayor.68 If the nuisance govern. (608a)
is a private one, any person injured by the same may file the action for
abatement or for injunction.69
— oOo —
Aside from the action for abatement or injunction, a claim for
damages may likewise be maintained by any person who is injured by
a private nuisance. In case of a public nuisance, generally, no action for
damages may be maintained by a private individual unless it is specially
injurious to himself.70 In the said action for damages, not only the person
who caused the nuisance but every successive owner or possessor of the
property who fails or refuses to abate the same in that property shall
be liable for damages in the same manner as the one who created the
nuisance.71

65
Id.
66
Art. 706, NCC.
67
Art. 707, NCC.
68
See Art. 701, NCC.
69
See Art. 705(1), NCC.
70
See Art. 703.
71
See Art. 696, NCC. 592
 593
BOOK III
DIFFERENT MODES OF ACQUIRING
OWNERSHIP
PRELIMINARY PROVISION
ARTICLE 712. Ownership is acquired by occupation and by intel-
lectual creation.
Ownership and other real rights over property are acquired and
transmitted by law, by donation, by testate and intestate succession, and
in consequence of certain contracts, by tradition.
They may also be acquired by means of prescription. (609a)
§ 129. Modes of Acquisition of Ownership and Real Rights
[129.1] In General
Mode of acquiring ownership and other real rights is the specific
cause which produces them as a result of the co-existence of special
status of things, capacity and intention of person and fulfillment of the
requisites of law.1
Ownership, under the Civil Code, is acquired through any of these
modes: (1) occupation; (2) intellectual creation; (3) law; (4) donation;
(5) succession; (6) tradition; and (7) prescription. Other real rights, on
the other hand, are acquired through any of the following modes: (1)
law; (2) donation; (3) succession; (4) tradition and (5) prescription.2
Note that Article 712 distinguishes between modes which are
merely for acquisition (e.g., occupation, intellectual creation and
prescription) and modes which are for both acquisition and transmission
of ownership (e.g., law, donation, succession and tradition).
1
3 Sanchez Roman 199-200.
2
See Art. 712, NCC.
593
DIFFERENT MODES OF ACQUIRING OWNERSHIP 595
PRELIMINARY PROVISION
third person with a right recognized by law. Hence, ownership, as in all
other rights, may also be renounced or abandoned. Abandonment is a
unilateral act of the holder of the right which does not, therefore, require
its acceptance. But it requires, for its validity, that the one renouncing it
must have the legal capacity to do so and the same is coupled with the
intention to renounce the right.
Alienation, on the other hand, involves the voluntary transfer of
the right to another person, which may either be by acts mortis causa or
by acts inter vivos. It may either be onerous or gratuitous.
§ 130. Law as Mode
Law, as a mode of acquiring ownership, refers to those special
legal provisions which directly vest ownership or real rights in favor
of certain persons, independently of the other modes of acquiring
and transmitting ownership or other real rights. The following are the
examples:
“Art. 624. The existence of an apparent sign of
easement between two estates, established or maintained by
the owner of both, shall be considered, should either of them
be alienated, as a title in order that the easement may continue
actively and passively, unless, at the time the ownership of
the two estates is divided, the contrary should be provided in
the title of conveyance of either of them, or the sign aforesaid
should be removed before the execution of the deed. This
provision shall also apply in case of the division of a thing
owned in common by two or more persons. (541a)
“Art. 681. Fruits naturally falling upon adjacent land
belong to the owner of said land. (n)
“Art. 1434. When a person who is not the owner of a
thing sells or alienates and delivers it, and later the seller or
grantor acquires title thereto, such title passes by operation
of law to the buyer or grantee.”
§ 131. Tradition or Delivery
[131.1] Mode and Title, Distinguished
In matters of contracts, distinction must be made between “title”
and “mode” of acquiring ownership. A mode is the legal means by which
594 PROPERTY
[129.2] Original and Derivative Modes
Under Article 712 of the Civil Code, the modes of acquiring
ownership are generally classified into two (2) classes, namely, the
original mode and the derivative mode.3 Modes of acquiring ownership
are called “original” when they result in the independent creation of
a new right of ownership, when their effect, therefore, is independent
of the ownership of a definite third person. A person who acquires by
an original mode has no “auctor” or a person who has ownership and
who transmits the same to a successor. Examples of original modes
are occupation, law, intellectual creation and acquisitive prescription. A
“derivative mode,” on the other hand, is an acquisition which depends
on the existence of the right of a certain other person, called the auctor.
Examples of derivative modes are tradition, succession and donation.
[129.3] Loss of Ownership
The Civil Code does not contain any systematic doctrine regarding
the loss of ownership. Generally, however, the various modes of losing
ownership and other real rights are classified either as voluntary — that
which depends upon the will of the owner — or involuntary — or that
which is independent of the will of the owner.
The voluntary modes are abandonment and alienation. The invol-
untary modes, on the other hand, are the following: (1) the destruction
of the thing, which may either be physical or juridical as when the thing
goes out of commerce; (2) revocatory acts, which may include the nul-
lity, rescission, revocation or resolution of that which gave rise to the
acquisition; (3) extinguishment by legal precept and in virtue of certain
acts, by the owner or third persons (e.g., accession and acquisitive pre-
scription); (4) extinguishment by judicial decree, such as confirmation
of a judicial sale as a result of levy on execution; and (5) extinguish-
ment by act of the State, such as confiscation of the effects and instru-
ments of a crime and expropriation for public use.4
[129.3.1] Abandonment and Alienation
According to Article 6 of the New Civil Code, rights may be
waived or renounced, so long as the waiver is not contrary to law, public
order, public policy, morals or good customs or it is not prejudicial to a
3
Acap v. CA, G.R. No. 118114, Dec. 7, 1995.
4
II Caguioa, Civil Code of the Phil., 1966 ed., 351-352.
596 PROPERTY
dominion or ownership is created, transferred or destroyed, but title is
only the legal basis by which to affect dominion or ownership.5 In this
jurisdiction, the term “title” is used in contradistinction with the term
“mode,” the former being understood as referring to every juridical act,
right or condition which gives a means to the acquisition of ownership
and other real rights but which in itself is insufficient to produce them.6
Mode and title may be distinguished, as follows:
(1) A mode requires not only the intention to acquire but also
either a right previously vested over the thing on the part of the person
who makes the transmission or the special condition or state of the
thing to be transferred as the fact that they are res nullius; whereas, title
requires mere intention.
(2) A mode directly and immediately produces a real right;
whereas, title merely serves as a means and a pretext to that acquisi-
tion.
(3) Mode is the cause, while title is the means.
(4) Mode creates a real right, while title creates merely a personal
right.7
[131.2] Contract Only Constitutes Title
Contracts, under our laws, only constitute titles or rights to the
transfer or acquisition of ownership, while delivery or tradition is
the mode of accomplishing the same.8 Stated otherwise, ownership is
transferred, not by contract alone, but by tradition or delivery. Non
nudis pactis, sed traditione dominia rerum transferentur.9 This much
is clear from Article 712 of the New Civil Code when it provides
that “ownership and other real rights over property are acquired and
transmitted … in consequence of certain contracts, by tradition.” The
delivery of a thing, therefore, constitutes a necessary and indispensable
requisite for the purpose of acquiring the ownership of the same by
virtue of a contract.10
5
San Lorenzo Development Corp. v. CA, G.R. No. 124242, Jan. 21, 2005, citing Villan-
ueva, Philippine Law on Sales, 1995 ed., 5.
6
3 Sanchez Roman 200.
7
3 Sanchez Roman 200.
8
San Lorenzo Development Corp. v. CA, supra.
9
Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., 370 SCRA 56 (2001).
10
Fidelity and Deposit Co. v. Wilson, 8 Phil. 51.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP
PRELIMINARY PROVISION
In relation to the acquisition and transfer of ownership, it should
be noted therefore, that sale is not a mode, but merely a title.11 Sale by
itself does not transfer or affect ownership; the most that sale does is to
create the obligation to transfer ownership. It is tradition or delivery, as
a consequence of sale, that actually transfers ownership.12
[131.3] Concept of Tradition; Requisites
Tradition (traditio) or delivery, as a mode of acquiring and
transmitting ownership and other real rights, refers to the transfer of
possession accompanied by an intention to transfer ownership or other
real rights. In order that there be tradition, the following requisites must
be present: (1) pre-existence of the right to be transmitted in the estate of
the grantor, the same being a derivative mode of acquiring ownership;
(2) just cause or title (causa traditionis) for the transmission, such as
sale; (3) intention on the part of the grantor to grant and on the part
of the grantee to acquire; (4) capacity to transmit (on the part of the
grantor) and capacity to acquire (on the part of the grantee); and (5) an
act which gives it outward form, physically, symbolically or legally.13
It is therefore a rule that ownership can never pass by the bare
delivery of a thing (e.g., for safe keeping, or by way of loan for use), a
bare delivery being, legally speaking, no tradition at all. No delivery can
be tradition in the legal sense, unless it is accompanied by an intention
to transfer ownership, an intention which is expressed, as a rule, by
some juristic act (causa traditionis) which precedes the tradition.14
Hence, in all forms of delivery, it is necessary that the act of delivery,
whether constructive or actual, should be coupled with the intention of
delivering the thing. The act, without the intention, is insufficient.15 The
critical factor in the different modes of effecting delivery which gives
legal effect to the act, is the actual intention of the vendor to deliver,
and its acceptance by the vendee. Without that intention, there is no
tradition.16
11
San Lorenzo Development Corp. v. CA, supra.
12
Id.
13
3 Sanchez Roman, 234-235.
14
Rudolph Sohm, The Institutes of Roman Law, 2002 ed., 235.
15
Union Motor Corporation v. CA, G.R. No. 117817, July 20, 2001, citing Norkis Distribu-
tors, Inc. v. CA, 193 SCRA 694, 698 (1991).
16
Id.
DIFFERENT MODES OF ACQUIRING OWNERSHIP
PRELIMINARY PROVISION
When the motorcycle was registered by Norkis in the name
of private respondent, Norkis did not intend yet to transfer the title
or ownership to Nepales, but only to facilitate the execution of a
chattel mortgage in favor of the DBP for the release of the buyer’s
motorcycle loan. The Letter of Guarantee (Exh. 5) issued by the
DBP, reveals that the execution in its favor of a chattel mortgage
over the purchased vehicle is a pre-requisite for the approval of
the buyer’s loan. If Norkis would not accede to that arrangement,
DBP would not approve private respondent’s loan application and,
consequently, there would be no sale.
In other words, the critical factor in the different modes of
effecting delivery, which gives legal effect to the act, is the actual
intention of the vendor to deliver, and its acceptance by the vendee.
Without that intention, there is no tradition (Abuan v. Garcia, 14
SCRA 759).
xxx xxx xxx
The Court of Appeals correctly ruled that the purpose of the
execution of the sales invoice dated September 20, 1979 (Exh. B)
and the registration of the vehicle in the name of plaintiff-appellee
(private respondent) with the Land Registration Commission
(Exhibit C) was not to transfer to Nepales the ownership and
dominion over the motorcycle, but only to comply with the
requirements of the Development Bank of the Philippines for
processing private respondent’s motorcycle loan. On March 20,
1980, before private respondent’s loan was released and before
he even paid Norkis, the motorcycle had already figured in an
accident while driven by one Zacarias Payba. Payba was not shown
by Norkis to be a representative or relative of private respondent.
The latter’s supposed relative, who allegedly took possession of
the vehicle from Norkis did not explain how Payba got hold of
the vehicle on February 3, 1980. Norkis’ claim that Julian Nepales
was acting as Alberto’s agent when he allegedly took delivery of
the motorcycle (p. 20, Appellants’ Brief), is controverted by the
latter. Alberto denied having authorized Julian Nepales to get the
motorcycle from Norkis Distributors or to enter into any transaction
with Norkis relative to said motorcycle. (p. 5, t.s.n., February 6,
1985). This circumstances more than amply rebut the disputable
presumption of delivery upon which Norkis anchors its defense to
Nepales’ action (pp. 33-34, Rollo).
Article 1496 of the Civil Code which provides that “in the
absence of an express assumption of risk by the buyer, the things
597 598 PROPERTY
Norkis Distributors, Inc. v. Court of Appeals
193 SCRA 694 (1991)
Norkis Distributors, Inc. (Norkis for brevity), is the distributor of Yamaha
motorcycles in Negros Occidental with office in Bacolod. On September 20,
1979, Alberto Nepales bought from the Norkis-Bacolod branch a brand new
Yamaha Wonderbike then displayed in the Norkis showroom. The price of
P7,500.00 was payable by means of a Letter of Guaranty from the Development
Bank of the Philippines (DBP), which Norkis agreed to accept. Hence, credit
was extended to Nepales for the price of the motorcycle payable by DBP upon
release of his motorcycle loan. As security for the loan, Nepales would execute
a chattel mortgage on the motorcycle in favor of DBP. Norkis issued a sales
invoice showing that the contract of sale of the motorcycle had been perfected.
Nepales signed the sales invoice to signify his conformity with the terms of the
sale. In the meantime, however, the motorcycle remained in Norkis’ possession.
On November 6, 1979, the motorcycle was registered in the LTO in the name
of Alberto Nepales and a registration certificate in his name was issued. On
January 22, 1980, the motorcycle was delivered to a certain Julian Nepales
who was allegedly the agent of Alberto Nepales but the latter subsequently
denies it. Thereafter, the motorcycle met an accident on February 3, 1980 while
it was being driven by a certain Zacarias Payba. The unit was a total wreck,
was returned, and stored inside Norkis’ warehouse. On March 20, 1980, DBP
released the proceeds of Nepales’ motorcycle loan to Norkis in the total sum
of P7,500. As the price of the motorcycle later increased to P7,828 in March,
1980, Nepales paid the difference of P328 and demanded the delivery of the
motorcycle. When Norkis could not deliver, Nepales filed an action for specific
performance with damages against Norkis. Nepales alleged that Norkis failed
to deliver the motorcycle which he purchased, thereby causing him damages.
Norkis answered that the motorcycle had already been delivered to him before
the accident, hence, the risk of loss or damage had to be borne by him as owner
of the unit. Norkis concedes that there was no “actual” delivery of the vehicle.
However, it insists that there was constructive delivery of the unit upon: (1)
the issuance of the sales invoice in the name of Nepales and the affixing of his
signature thereon; (2) the registration of the vehicle with the LTO in Nepales’
name; and (3) the issuance of official receipt for payment of registration fees.
The Supreme Court held that Norkis should bear the risk of loss because the
ownership has not yet been transferred to the buyer at the time of the loss. The
Court explained —
In all forms of delivery, it is necessary that the act of delivery
whether constructive or actual, be coupled with the intention of
delivering the thing. The act, without the intention, is insufficient
(De Leon, Comments and Cases on Sales, 1978 Ed., citing Man-
resa, p. 94).
599 600 PROPERTY
sold remain at seller’s risk until the ownership thereof is transferred
to the buyer,” is applicable to this case, for there was neither an
actual nor constructive delivery of the thing sold, hence, the risk of
loss should be borne by the seller, Norkis, which was still the owner
and possessor of the motorcycle when it was wrecked. This is in
accordance with the well-known doctrine of res perit domino.
Aznar v. Yapdiangco
13 SCRA 486 (1965)
In May, 1959, Teodoro Santos advertised in two metropolitan papers the
sale of his Ford Fairlane 500. In the afternoon of May 28, 1959, a certain L. De
Dios, claiming to be a nephew of Vicente Marella, went to the Santos residence
to answer the ad. However, Teodoro Santos was out during this call and only his
son, Irineo Santos, received and talked with De Dios. The latter told the young
Santos that he had come in behalf of his uncle, Vicente Marella, who was
interested to buy the advertised car. On being informed of this, Teodoro Santos
instructed his son Ireneo to see the said Vicente Marella the following day at
his given address.The following day, Irineo Santos went to the said address. At
this meeting, Marella agreed to buy the car for P14,700.00 on the understanding
that the price would be paid only after the car had been registered in his name.
Pursuant to such condition, Vicente Santos transferred the registration of the
car in the name of Marella even without the payment of the purchased price.
When Ireneo Santos turned over to Marella the registration papers and a copy
of the deed of sale and demanded for the payment of the purchase price,
Marella begged off to be allowed to secure the money from a sister supposedly
living in another place. Thereafter, Marella ordered L. De Dios to go to the said
sister and suggested that Irineo Santos go with him. At the same time, Marella
requested the registration papers and the deed of sale from Irineo Santos on
the pretext that he would like to show them to his lawyer. Trusting the good
faith of Marella, Irineo handed over the same to the latter and thereupon, in
the company of L. De Dios and another unidentified person, proceeded to the
alleged house of Marella’s sister. At a certain place on Azcarraga Street, Irineo
Santos and L. De Dios alighted from the car and entered a house while their
unidentified companion remained in the car. Once inside, L. De Dios asked
Irineo Santos to wait at the sala while he went inside a room. That was the
last that Irineo saw of him. For, after a considerable length of time waiting in
vain for De Dios to return, Irineo went down to discover that neither the car
nor their unidentified companion was there anymore. Going back to the house,
he inquired from a woman he saw for L. De Dios and he was told that no
such name lived or was even known therein. Whereupon, Irineo Santos rushed
to the alleged house of Marella to see the latter. He found the house closed
and Marella gone. Finally, he reported the matter to his father who promptly
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 601
PRELIMINARY PROVISION
advised the police authorities. On that same day, Marella was able to sell the
car in question to Jose B. Aznar for P15,000.00, the latter acting in good and
without notice of the defect appertaining to the vendor’s title. While the car in
question was in the possession of Jose B. Aznar and while he was attending to
its registration in his name, agents of the Philippine Constabulary seized and
confiscated the same in consequence of the report to them by Teodoro Santos
that the said car was unlawfully taken from him. On the question of whether
Marella acquired ownership over the car with the delivery of the key of the car
to him, the Court ruled in the negative. The Court explained —
Vicente Marella did not have any title to the property under
litigation because the same was never delivered to him. He sought
ownership or acquisition of it by virtue of the contract. Vicente
Marella could have acquired ownership or title to the subject
matter thereof only by the delivery or tradition of the car to him.
Under Article 712 of the Civil Code, “ownership and other
real rights over property are acquired and transmitted by law, by
donation, by testate and intestate succession, and in consequence of
certain contracts, by tradition.” As interpreted by this Court in a host
of cases, by this provision, ownership is not transferred by contract
merely but by tradition or delivery. Contracts only constitute titles
or rights to the transfer or acquisition of ownership, while delivery
or tradition is the mode of accomplishing the same (Gonzales v.
Rojas, 16 Phil. 51; Ocejo, Perez and Co. v. International Bank, 37
Phil. 631, Fidelity and Deposit Co. v. Wilson, 8 Phil. 51; Kuenzle
& Streiff v. Wacke & Chandler, 14 Phil. 610; Easton v. Diaz Co.,
32 Phil. 180).
For the legal acquisition and transfer of ownership and other
property rights, the thing transferred must be delivered, inasmuch
as, according to settled jurisprudence, the tradition of the thing is
a necessary and indispensable requisite in the acquisition of said
ownership by virtue of contract. (Walter Laston v. E. Diaz & Co. &
the Provincial Sheriff of Albay, supra.)
So long as property is not delivered, the ownership over it is
not transferred by contract merely but by delivery. Contracts only
constitute titles or rights to the transfer or acquisition of ownership,
while delivery or tradition is the method of accomplishing the
same, the title and the method of acquiring it being different in our
law. (Gonzales v. Roxas, 16 Phil. 51)
In the case on hand, the car in question was never delivered
to the vendee by the vendor as to complete or consummate the
DIFFERENT MODES OF ACQUIRING OWNERSHIP 603
PRELIMINARY PROVISION
[131.4.2] Constructive Tradition
The change of possession or delivery need not, however, be
materially visible. Hence, delivery may likewise exists even when the
change of possession is not actual or material but represented by other
signs or acts indicative thereof, in which case the tradition is classified
as a constructive one. Constructive delivery may take place through any
of the following ways: (1) traditio simbolica (symbolical tradition); (2)
traditio longa manu; (3) traditio brevi manu; (4) traditio constitutum
possessorium; and (5) execution of public instrument.
(i) Traditio Simbolica
In traditio simbolica, the transfer of ownership is effected by the
delivery of symbols or things which represent those to be delivered.
Thus in the second paragraph of Article 1498 of the Civil Code, it is
provided that “with regard to movable property, its delivery may also
be made by the delivery of the keys of the place or depository where it
is stored or kept.”
(ii) Traditio Longa Manu
In traditio longa manu, the transfer of ownership is effected by the
grantor by simply pointing out to the grantee the things which are being
transferred and which at the time must be within their sight.
(iii) Traditio Brevi Manu
In traditio brevi manu, the grantee has already acquired actual
control or possession of the thing, as when the thing is leased to him. In
this case, a mere declaration on the part of the grantor that the grantee
shall now hold the thing which is already in his control and possession,
as owner, operates as a form of delivery.
The traditio longa manu and the traditio brevi manu is recognized
in Article 1499 of the Civil Code, to wit:
“ART. 1499. The delivery of movable property may
likewise be made by the mere consent or agreement of the
contracting parties, if the thing sold cannot be transferred to
the possession of the vendee at the time of the sale, or if the
latter already had it in his possession for any other reason.
(1463a)”
602 PROPERTY
transfer of ownership by virtue of the contract. It should be
recalled that while there was indeed a contract of sale between
Vicente Marella and Teodoro Santos, the former, as vendee, took
possession of the subject matter thereof by stealing the same while
it was in the custody of the latter’s son.
There is no adequate evidence on record as to whether Irineo
Santos voluntarily delivered the key to the car to the unidentified
person who went with him and L. De Dios to the place on Azcarraga
where a sister of Marella allegedly lived. But even if Irineo Santos
did, it was not the delivery contemplated by Article 712 of the
Civil Code. For then, it would be indisputable that he turned it over
to the unidentified companion only so that he may drive Irineo
Santos and De Dios to the said place on Azcarraga and not to vest
the title to the said vehicle to him as agent of Vicente Marella.
Article 712 above contemplates that the act be coupled with the
intent of delivering the thing. (10 Manresa 132)
[131.4] Kinds of Tradition
Tradition is classified into:
(1) Real tradition;
(2) Constructive or feigned tradition;
(3) Quasi-tradition; and
(4) Tradition by operation of law
[131.4.1] Real Tradition
Real tradition (or physical or actual delivery) takes place when
the thing is placed in the control and possession of the grantee, which
if it is movable, is when the thing is transferred from hand to hand and,
if immovable, by certain material and possessory acts by the grantee
in the presence and with the consent of the grantor, such as gathering
fruits or entering upon the property which are generally called taking
possession.17
In the Law on Sales, the thing sold is understood as delivered,
when it is placed in the control and possession of the vendee.18
17
2 Castan, 9th ed., 227-228.
18
Art. 1497, NCC.
604 PROPERTY
(iv) Traditio Constitutum Possessorium
Traditio constitutum possessorium is the reverse of traditio brevi
manu. In the former, delivery is effected by a mere declaration on the
part of the transferor that he will hold the thing for the transferee. This,
of course, may take place when the owner of the thing alienates it but
continues possessing it under another contract or capacity, as lessee for
example.
Traditio constitutum possessorium is recognized in Article 1500
of the Civil Code.
While it may appear in traditio longa manu, traditio brevi manu
and traditio constitutum possessorium that the transfer of ownership
is brought about by a mere declaration of consent, this declaration,
however, does not merely state that the other shall henceforth be the
owner, but also, at the same time, effects a change in the physical
control, a change, that is to say, in the actual possession of the thing;
and it is only through the medium of this change that the transfer of
ownership is accomplished. In traditio brevi manu, for example, the
grantee, by purchasing the thing leased acquires a different power over
the thing from that which he had before.19
(v) Execution of Public Instrument
The execution of a public instrument is recognized by law
as equivalent to the delivery of the thing which is the object of the
contract.20 Under the Law on Sales, the execution of a public instrument
of sale is recognized as equivalent to the delivery of the thing sold.21 It
has been held, however, that the execution of a contract of sale as a form
of constructive delivery is but a legal fiction. It holds true only when
there is no impediment that may prevent the passing of the property
from the hands of the vendor into those of the vendee.22 When there is
such impediment, fiction yields to reality — the delivery has not been
effected.23 Stated otherwise, the execution of a public instrument gives
19
Rudolph Sohm, The Institutes of Roman Law, 2002 ed., 234-235.
20
Addison v. Felix and Tioco, 38 Phil. 404, 408 (1918).
21
Art. 1498, NCC.
22
Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., supra, citing Vda. De
Sarmiento v. Lesaca, 108 Phil. 900, 903 (1960).
23
Id.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP
PRELIMINARY PROVISION
rise only to a prima facie presumption of delivery. Such presumption is
destroyed when the instrument itself expresses or implies that delivery
was not intended; or when by other means it is shown that such delivery
was not effected, because a third person was actually in possession of
the thing.24 As early as the case of Addison v. Felix and Tioco,25 decided
in 1918, the Supreme Court already held —
The Code imposes upon the vendor the obligation to
deliver the thing sold. The thing is considered to be delivered
when it is placed “in the hands and possession of the vendee.”
(Civil Code, Art. 1462). It is true that the same article declares
that the execution of a public instrument is equivalent to the
delivery of the thing which is the object of the contract, but,
in order that this symbolic delivery may produce the effect
of tradition, it is necessary that the vendor shall have had
control over the thing sold that, at the moment of the sale,
its material delivery could have been made. It is not enough
to confer upon the purchaser the ownership and the right of
possession. The thing sold must be placed in his control.
When there is no impediment whatever to prevent the thing
sold passing into the tenancy of the purchaser by the sole will
of the vendor, symbolic delivery through the execution of a
public instrument is sufficient. But if, notwithstanding the
execution of the instrument, the purchaser cannot have the
enjoyment and material tenancy of the thing and make use
of it himself or through another in his name, because such
tenancy and enjoyment are opposed by the interposition of
another will, then fiction yields to reality — the delivery has
not been effected.
Equatorial Realty Development, Inc. v. Mayfair Theater, Inc.
370 SCRA 56 (2001)
Carmelo & Bauermann, Inc. (“Carmelo”) used to own a parcel of land
with improvements. It entered into a contract of lease with Mayfair Theater,
Inc. (“Mayfair”). The lease contained a right of first refusal. Within the term
of the lease, Carmelo sold the property to Equatorial Realty Development,
24
Id.
25
Supra.
DIFFERENT MODES OF ACQUIRING OWNERSHIP
PRELIMINARY PROVISION
Let us now apply the foregoing discussion to the present
issue. From the peculiar facts of this case, it is clear that petitioner
never took actual control and possession of the property sold, in
view of respondent’s timely objection to the sale and the continued
actual possession of the property. The objection took the form
of a court action impugning the sale which, as we know, was
rescinded by a judgment rendered by this Court in the mother
case. It has been held that the execution of a contract of sale as a
form of constructive delivery is a legal fiction. It holds true only
when there is no impediment that may prevent the passing of the
property from the hands of the vendor into those of the vendee.
When there is such impediment, “fiction yields to reality — the
delivery has not been effected.”
Hence, respondent’s opposition to the transfer of the property
by way of sale to Equatorial was a legally sufficient impediment
that effectively prevented the passing of the property into the
latter’s hands.
This was the same impediment contemplated in Vda. de
Sarmiento v. Lesaca, in which the Court held as follows:
“The question that now arises is: Is there any stipulation in
the sale in question from which we can infer that the vendor did not
intend to deliver outright the possession of the lands to the vendee?
We find none. On the contrary, it can be clearly seen therein that
the vendor intended to place the vendee in actual possession of the
lands immediately as can be inferred from the stipulation that the
vendee ‘takes actual possession thereof x x x with full rights to
dispose, enjoy and make use thereof in such manner and form as
would be most advantageous to herself.’ The possession referred to
in the contract evidently refers to actual possession and not merely
symbolical inferable from the mere execution of the document.
“Has the vendor complied with this express commitment?
she did not. As provided in Article 1462, the thing sold shall be
deemed delivered when the vendee is placed in the control and
possession thereof, which situation does not here obtain because
from the execution of the sale up to the present the vendee was
never able to take possession of the lands due to the insistent refusal
of Martin Deloso to surrender them claiming ownership thereof.
And although it is postulated in the same article that the execution
of a public document is equivalent to delivery, this legal fiction
only holds true when there is no impediment that may prevent the
605 606 PROPERTY
Inc. (“Equatorial”), in violation of Mayfair’s right of refusal. Mayfair filed a
complaint for rescission of the contract of sale between Carmelo and Equatorial
on the ground that its right of first refusal was violated. Mayfair obtained a
favorable judgment and the decree of rescission became final. When Mayfair
tendered the payment of the purchase price with Carmelo, Equatorial, on the
other hand, demanded rentals from Mayfair alleging itself as the owner by
reason of the contract of sale from the time of the execution of the contract of
sale up to finality of the decision in the case filed by Mayfair. On this issue, the
Supreme Court held that Equatorial Realty did not become the owner of the
contested property because there was no tradition or delivery of the property
sold to Equatorial. The Court explained —
By a contract of sale, “one of the contracting parties obligates
himself to transfer ownership of and to deliver a determinate
thing and the other to pay therefor a price certain in money or its
equivalent.”
Ownership of the thing sold is a real right, which the buyer
acquires only upon delivery of the thing to him “in any of the
ways specified in Articles 1497 to 1501, or in any other manner
signifying an agreement that the possession is transferred from the
vendor to the vendee.” This right is transferred, not by contract
alone, but by tradition or delivery. Non nudis pactis sed traditione
dominia rerum transferantur. And there is said to be delivery if
and when the thing sold “is placed in the control and possession of
the vendee.” Thus, it has been held that while the execution of a
public instrument of sale is recognized by law as equivalent to the
delivery of the thing sold, such constructive or symbolic delivery,
being merely presumptive, is deemed negated by the failure of the
vendee to take actual possession of the land sold.
Delivery has been described as a composite act, a thing in
which both parties must join and the minds of both parties concur.
It is an act by which one party parts with the title to and the
possession of the property, and the other acquires the right to and
the possession of the same. In its natural sense, delivery means
something in addition to the delivery of property or title; it means
transfer of possession. In the Law on Sales, delivery may be either
actual or constructive, but both forms of delivery contemplate
“the absolute giving up of the control and custody of the property
on the part of the vendor, and the assumption of the same by the
vendee.”
xxx xxx xxx
607 608 PROPERTY
passing of the property from the hands of the vendor into those of
the vendee. x x x.”
The execution of a public instrument gives rise, therefore,
only to a prima facie presumption of delivery. Such presumption
is destroyed when the instrument itself expresses or implies that
delivery was not intended; or when by other means it is shown that
such delivery was not effected, because a third person was actually
in possession of the thing. In the latter case, the sale cannot be
considered consummated.
[131.4.3] Quasi-tradition and Tradition By Operation of
Law
Quasi-tradition is used to indicate the transfer of rights or
incorporeal things through the exercise of the rights by the grantee
with the acquiescence of the grantor.26 Tradition by operation of law, on
the other hand, comprises all those cases not covered by the previous
modes of delivery and by which tradition is effected solely by virtue of
a legal precept.27
§ 132. Acquisitive Prescription
[132.1] Concept and Requisites
Prescription, in general, is a mode of acquiring (or losing)
ownership and other real rights through the lapse of time in the manner
and under conditions laid down by law, namely, that the possession
should be in the concept of an owner, public, peaceful, uninterrupted
and adverse.28 Possession is open when it is patent, visible, apparent,
notorious and not clandestine.29 It is continuous when uninterrupted,
unbroken and not intermittent or occasional;30 exclusive when the
adverse possessor can show exclusive dominion over the land and an
appropriation of it to his own use and benefit;31 and notorious when it is
so conspicuous that it is generally known and talked of by the public or
26
3 Sanchez Roman 209-210.
27
2 Castan, 9th ed., 227-228.
28
Sps. Aguirre v. Heirs of Lucas Villanueva, G.R. No. 169898, Oct. 27, 2006; see also Arts.
1106 and 1118, NCC.
29
Director of Lands v. Intermediate Appellate Court, 209 SCRA 214, 224 (1992).
30
Id.
31
Id.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 609
PRELIMINARY PROVISION
the people in the neighborhood.32 The party who asserts ownership by
adverse possession must prove the presence of the essential elements of
acquisitive prescription.
[132.2] Two Kinds: Ordinary and Extraordinary
Article 1117 of the Civil Code is instructive:
“ART. 1117. Acquisitive prescription of dominion and
other real rights may be ordinary or extraordinary.
Ordinary acquisitive prescription requires possession
of things in good faith and with just title for the time fixed
by law.”
Articles 1132, 1134 and 1137 of the Civil Code, on the other hand,
fix the periods of possession, which provide:
“ART. 1132. The ownership of movables prescribes
through uninterrupted possession for four years in good
faith.
The ownership of personal property also prescribes
through uninterrupted possession for eight years, without
need of any other condition.
“ART. 1134. Ownership and other real rights over
immovable property are acquired by ordinary prescription
through possession of ten years.
“ART. 1137. Ownership and other real rights over
immovables also prescribe through uninterrupted adverse
possession thereof for thirty years, without need of title or
of good faith.”
From the foregoing, it can be gleaned that acquisitive prescription
of ownership and other real rights may be ordinary or extraordinary.33
Ordinary acquisitive prescription requires possession of things in good
faith and with just title for the time fixed by law;34 without good faith
32
Id.
33
Art. 1117, NCC.
34
Id.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 611
PRELIMINARY PROVISION
[132.4] When Prescription Does Not Lie
Prescription, as a mode of acquiring ownership or other real rights,
does not apply in the following cases:
(1) The rule is well-settled that prescription does not run against
registered land. Thus, under Sec. 47 of PD No. 1529, otherwise known
as the Property Registration Decree, it is specifically provided that “no
title to registered land in derogation of that of the registered owner
shall be acquired by prescription or adverse possession.” A title, once
registered, cannot be defeated even by adverse, open and notorious
possession.43
In J.M. Tuason & Co. v. Aguirre,44 the Court ruled that “an action
to recover possession of a registered land never prescribes in view of
the provision of Section 44 of Act No. 496 to the effect that no title
to registered land in derogation to that of a registered owner shall be
acquired by prescription or adverse possession.” In fact, there is a
host of jurisprudence that hold that prescription and laches could not
apply to registered land covered by the Torrens system.45 With more
reason are these principles applicable to laches, which is merely an
equitable principle. Laches may not prevail against a specific provision
of law, since equity, which has been defined as ‘justice outside legality’
is applied in the absence of and not against statutory law or rules of
procedure.46
(2) Prescription, both acquisitive and extinctive does not run
against the State.47 Hence, property of the State or any of its subdivisions
which are classified as belonging to public dominion shall not be the
object of prescription.48 Neither may acquisitive prescription be invoked
against the patrimonial property of the State. As held in Alonso v.
Cebu Country Club, Inc.,49 possession of patrimonial property of the
43
Heirs of Leopoldo Vencilao, Sr. v. CA, 288 SCRA 574 (1998).
44
7 SCRA 109 (1963).
45
Umbay v. Alecha, 220 Phil. 103 (1985); Quevada v. Glorioso, 356 Phil. 105 (1998);
Bishop v. Court of Appeals, 208 SCRA 636 (1992); St. Peter Memorial Park, Inc. v. Cleofas,
92 SCRA 389 (1979).
46
Mateo v. Diaz, G.R. No. 137305, Jan. 17, 2002; Velez, Sr. v. Demetrio, G.R. No. 128576,
Aug. 13, 2002.
47
Art. 1108(4), NCC.
48
Art. 1113, NCC.
49
G.R. No. 130876, Dec. 5, 2003.
610 PROPERTY
and just title, acquisitive prescription can only be extraordinary in
character.35
Possession is “in good faith” when there is a reasonable belief that
the person from whom the thing is received has been the owner thereof
and could thereby transmit his ownership.36 For purposes of prescription,
there is just title when the adverse claimant came into possession of the
property through one of the modes recognized by law for the acquisition
of ownership or other real rights, but the grantor was not the owner or
could not transmit any right.37 Further, the law requires that the just title
must be proved for purposes of prescription; it is never presumed.38
[132.3] Period of Prescription
For movable property, the period of ordinary prescription is
four (4) years, while the period of extraordinary prescription is eight
(8) years.39 For real property, the period of ordinary prescription is ten
(10) years,40 while the period of extraordinary prescription is thirty (30)
years.41
In the computation of time necessary for prescription the following
rules shall be observed:
(1) The present possessor may complete the period necessary
for prescription by tacking his possession to that of his grantor or
predecessor-in-interest;
(2) It is presumed that the present possessor who was also the
possessor at a previous time, has continued to be in possession during
the intervening time, unless there is proof to the contrary;
(3) The first day shall be excluded and the last day included.42
35
Arzadon-Crisologo v. Rañon, G.R. No. 171068, Sept. 5, 2007.
36
Sps. Aguirre v. Heirs of Lucas Villanueva, supra, citing Heirs of Segunda Maningding v.
CA, 342 Phil. 567, 574 (1997); see Art. 1127, NCC.
37
Art. 1129, NCC.
38
Art. 1131, NCC.
39
Art. 1132, NCC.
40
Art. 1134, NCC.
41
Art. 1137, NCC.
42
Art. 1138, NCC.
612 PROPERTY
Government, whether spanning decades or centuries, can not ipso facto
ripen into ownership. This is based on the great principle of public
policy. [See further discussion in supra § 23.3]
(3) There is a rule that a trustee cannot acquire by prescription
the ownership of property entrusted to him, or that an action to compel
a trustee to convey property registered in his name in trust for the
benefit of the cestui que trust does not prescribe, or that the defense of
prescription cannot be set up in an action to recover property held by a
person in trust for the benefit of another, or that property held in trust
can be recovered by the beneficiary regardless of the lapse of time.50
That rule applies squarely to express trusts. The basis of the rule is
that the possession of a trustee is not adverse. Not being adverse, he
does not acquire by prescription the property held in trust.51 The rule
of imprescriptibility of the action to recover property held in trust may
possibly apply to resulting trusts as long as the trustee has not repudiated
the trust.52
Acquisitive prescription may bar the action of the beneficiary
against the trustee in an express trust for the recovery of the property
held in trust where: (a) the trustee has performed unequivocal acts of
repudiation amounting to an ouster of the cestui que trust; (b) such
positive acts of repudiation have been made known to the cestui que
trust; and (c) the evidence thereon is clear and conclusive.53
(4) The foregoing rule likewise applies to co-owners and co-heirs
with respect to the property owned in common since co-ownership is a
form of trust and every co-owner is a trustee for the others.54 Hence, the
rule is that no prescription shall lie in favor of a co-owner or co-heirs as
long as he expressly or impliedly recognizes the co-ownership.55
(5) In order to ripen into ownership, possession must be in the
concept of an owner (en concepto de dueño).56 Thus, mere possession
with a juridical title, such as by a usufructuary, a trustee, a lessee, an
50
Buan v. Vda. De Esconde v. CA, 323 Phil. 81, 89 (1996).
51
Id.
52
Id.
53
Id.
54
Sanchez v. CA, 404 SCRA 541 (2003).
55
Art. 494, last par., NCC.
56
Arts. 540 and 1118, NCC.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 613
PRELIMINARY PROVISION
agent or a pledgee, not being in the concept of an owner, cannot ripen
into ownership by acquisitive prescription, unless the juridical relation is
first expressly repudiated and such repudiation has been communicated
to the other party.57
(6) Acts of possessory character executed due to license or by
mere tolerance of the owner would likewise be inadequate58 because
possession, to constitute the foundation of a prescriptive right, must be
en concepto de dueño, or, to use the common law equivalent of the term,
that possession should be adverse, if not, such possessory acts, no matter
how long, do not start the running of the period of prescription.59
(7) Possession obtained through force or intimidation does not
also ripen into ownership because the law on acquisitive prescription
requires that the possession be peaceful.60
(8) Possessory acts which are executed clandestinely and without
the knowledge of the possessor does not likewise ripen into ownership
because the law on acquisitive prescription requires that the possession
be public.61
(9) Prescription does not run between husband and wife, even
though there be a separation of property agreed upon in the marriage
settlements or by judicial decree.62 Neither does prescription run
between parents and children, during the minority or insanity of the
latter, and between guardian and ward during the continuance of the
guardianship.63
[132.5] Capacity to Acquire Ownership By Acquisitive Prescrip-
tion
As a rule, persons who are capable of acquiring property or rights
by other legal modes may acquire the same by means of prescription.64 As
a consequence if just title is required (as the case of ordinary acquisitive
57
Esguerra v. Manantan, G.R. No. 158328, Feb. 23, 2007.
58
Id.
59
Id.
60
Arts. 536 and 1118, NCC.
61
Arts. 537 and 1118, NCC.
62
Art. 1109, 1st par., NCC.
63
Art. 1109, 2nd par., NCC.
64
Art. 1107, NCC.
615
Title I. OCCUPATION
Art. 713. Things appropriable by nature which are without an owner,
such as animals that are the object of hunting and fishing, hidden trea-
sure and abandoned movables, are acquired by occupation. (610)
Art. 714. The ownership of a piece of land cannot be acquired by
occupation. (n)
Art. 715. The right to hunt and to fish is regulated by special laws.
(611)
Art. 716. The owner of a swarm of bees shall have a right to pursue
them to another’s land, indemnifying the possessor of the latter for the
damage. If the owner has not pursued the swarm, or ceases to do so
within two consecutive days, the possessor of the land may occupy or
retain the same. The owner of domesticated animals may also claim them
within twenty days to be counted from their occupation by another per-
son. This period having expired, they shall pertain to him who has caught
and kept them. (612a)
Art. 717. Pigeons and fish which from their respective breeding
places pass to another pertaining to a different owner shall belong to
the latter, provided they have not been enticed by some artifice or fraud.
(613a)
Art. 718. He who by chance discovers hidden treasure in another’s
property shall have the right granted him in Article 438 of this Code.
(614)
Art. 719. Whoever finds a movable, which is not treasure, must re-
turn it to its previous possessor. If the latter is unknown, the finder shall
immediately deposit it with the mayor of the city or municipality where the
finding has taken place.
The finding shall be publicly announced by the mayor for two con-
secutive weeks in the way he deems best.
If the movable cannot be kept without deterioration, or without ex-
penses which considerably diminish its value, it shall be sold at public
auction eight days after the publication.
Six months from the publication having elapsed without the owner
having appeared, the thing found, or its value, shall be awarded to the
615
614 PROPERTY
prescription), the capacity to acquire property by prescription shall be
the same capacity required for the particular title in question.65 Hence,
if the just title is pursuant to a donation, the capacity required is that
of the donee; if it is by succession, the capacity to succeed; and if it
is by contract, the capacity to enter into contracts.66 But if just title is
not required (as in the case of extraordinary prescription), the capacity
for possession is required.67 The capacity for possession is discussed in
supra § 84.9.
The foregoing rule shall apply also to minors and other incapacitated
persons. Hence, for purposes of ordinary prescription where just title is
required, the capacity to acquire property by prescription shall be the
same capacity required for the particular title in question. For example,
minors and other incapacitated persons are qualified to become
donees but acceptance shall be done through their parents or legal
representatives.68 For purposes of extraordinary prescription where
just title is not required, the capacity for possession is required. For
example, even a minor is qualified to acquire possession of a corporeal
object through material occupation but he may not acquire possession
of a right because the latter requires that he be possessed with full civil
capacity. In case of the latter, however, the minor may acquire ownership
by prescription through his parents, guardians or legal representatives.
— oOo —
65
IV Tolentino, Civil Code of the Phil., 1992 ed., 4.
66
Id.
67
Id.
68
Art. 741, NCC.
616 PROPERTY
finder. The finder and the owner shall be obliged, as the case may be, to
reimburse the expenses. (615a)
Art. 720. If the owner should appear in time, he shall be obliged to
pay, as a reward to the finder, one-tenth of the sum or of the price of the
thing found. (616a)
§ 133. Occupation
[133.1] Concept and Requisites
Occupation is a mode of acquiring ownership by the seizure
or apprehension of things corporeal which have no owner with the
intention of acquiring them and according to the rules laid down by
law.1 It consists in taking possession of a thing over which no one has a
proprietary right. The rule of the law is res nullius cedit occupanti.
There are four (4) essential conditions or requisites which must
co-exist in order to give to occupation its full legal significance as a
mode of acquiring ownership. First, the thing must be a res nullius —
that is, a thing which either never had an owner, or which, by virtue of
a previous abandonment (dereliction), has not an owner at the time of
its occupation. Secondly, it must be appropriable by nature or one that
can be seized or apprehended. In other words, it must be corporeal.
Thirdly, it must be brought into the actual possession or control of the
one professing to acquire it. Fourthly, the person must acquire it with the
intention of acquiring ownership. He must therefore have the necessary
capacity to consent.2
[133.2] Animals as Object of Appropriation
Wild beasts, birds, fishes, and in fact all animals which are still
in their natural state of freedom become the property of the captor by
virtue of occupation. This rule, of course, applies especially to hunting
and fishing. And this rule applies even though the capture be made on
another’s land, without prejudice, however, to the liability of the captor
for any damage resulting from his trespass.
However, the right to hunt and to fish is regulated by special laws.3
Under Philippine laws (specifically R.A. No. 9147, otherwise known as
1
3 Sanchez Roman 209.
2
3 Sanchez 210; 2 Castan 140.
3
Art. 715, NCC.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 617
OCCUPATION
the “Wildlife Resources Conservation and Protection Act;” R.A. No.
8550, otherwise known as the “Philippine Fisheries Code of 1998”; and
Fisheries Administrative Order Nos. 202 and 208) and international
treaty (the Convention on International Trade in Endangered Species of
Wild Fauna and Flora or CITES), the buying, using, gathering, killing,
processing and/or transporting of rare, threatened and endangered
species are prohibited. Hence, the rule on acquisition of ownership
by virtue of occupation stated in Article 713 of the New Civil Code
does not apply to animals which are classified as rare, threatened or
endangered species.
[133.2.1] Swarm of Bees
There is a special rule in case of acquisition of ownership of swarm
of bees through occupation. The rule says that the owner of a swarm of
bees has a right to purse them to another’s land, with the obligation
of indemnifying the possessor of the latter for the damage.4 The law
does not, however, authorize the owner of the swarm of bees to enter
an enclosed estate. In the case of the latter, it is necessary to obtain the
permission of the owner of the estate before entering the same.5 In case
the owner of the swarm of bees fails to purse the swarm, or if he initially
makes a pursuit but he ceases to do so within two (2) consecutive days,
the law considers him as to have abandoned ownership of the swarm
of bees6 in which case, the swarm becomes res nullius and ownership
thereof may now be acquired by the owner of the estate by way of
occupation.7 If the owner of the estate fails to seize or capture the swarm
of bees, the same shall remain to be res nullius.
[133.2.2] Wild Animals
The concept of “wild animals” has already been discussed in
supra §§ 102.1 and 102.2. As therein discussed, wild animals are those
which are found in their state of natural freedom. They are without an
owner or res nullius. Hence, ownership thereof may be acquired by
occupation. Pursuant to Article 560, they are, however, considered
4
Art. 716, NCC.
5
2 Castan, 9th ed., 212.
6 8
Art. 716, NCC.
7 9
Id.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 619
OCCUPATION
acquisition of ownership over other movables. If they are lost, their
owner, as a rule, can recover them from the present possessor without
need of indemnifying the latter subject to the qualifications stated in
supra §§ 101.2.1 to 101.3. The ownership thereof may not be acquired
by occupation unless these animals are abandoned by their owner. The
ownership over them can be acquired, however, by another person
through acquisitive prescription — the period of prescription being four
years if the possessor is in good faith or eight years, in any event.
[133.3] Hidden Treasure
A treasure, in the legal sense, is any hidden and unknown deposit
of money, jewelry, or other precious objects, the lawful ownership of
which does not appear.10 It is considered, in law, as res nullius and may
thus be acquired by occupation. The right of the finder is regulated,
however, by the provisions of Article 438 of the New Civil Code,
in relation to Article 718 of the same Code. Hence pursuant to these
articles, the treasure belongs wholly to the finder if found upon own’s
ground; but if found or discovered by chance in another’s property and
the finder not being a trespasser, the treasure is equally divided between
the finder and the owner of the ground. A different rule applies, however,
if the finding of the treasure is pursuant to a deliberate treasure-hunting
activity [see the discussions in supra § 39.2.3].
[133.4] Abandoned, Mislaid and Lost Property
Things the ownership of which has been abandoned are capable
of occupation. But the abandonment must be absolute and must further
comply with the requirements stated in supra § 129.3.1. Note that
abandonment of things is the opposite of occupation. It takes place
when the owner abandons the possession of a thing with the intention of
renouncing his ownership thereof. The effect of such abandonment is to
make the thing a res nullius the moment the abandonment is complete.
Anyone may therefore acquire ownership of the same by occupation.
But distinction must be made between abandoned property, on the
one hand, and lost and mislaid property, on the other hand. In the case
of the former, it is necessary that the spes recuperandi (hope of recovery
10
Art. 439, NCC.
618 PROPERTY
possessed only while they are under one’s control. As a consequence,
once they recover their natural freedom or once they are restored to their
original state of being free, they ceased to be under one’s possession.
As a consequence, they will immediately regain their status of being
res nullius and their ownership may thus be acquired by another person
through occupation.
[133.2.3] Domesticated or Tamed Animals
The concept of “domesticated or tamed animals” is also discussed
in supra §§ 102.1 and 102.2. As therein discussed, these are the animals
which were formerly wild but which have been subdued and retained
the habit of returning to the premises of the possessor.8 They will be
regarded as domesticated animals as long as they retain such habit of
returning to the premises of the possessor but once they lose said habit,
they will immediately revert back to their original status of being wild.
As a consequence, they will re-acquire their original status of being
res nullius and may thus be acquired by another person by occupation.
However, so long as they retain the habit of returning to the premises
of the possessor, the ownership over these animals is not affected by
the simple fact that they are no longer under the control of the present
possessor-owner. Pursuant to Article 716 of the New Civil Code, the
possessor-owner of domesticated animals has a period of twenty (20)
days counted from their occupation by another person within which to
reclaim them. If after the expiration of this period the possessor-owner
fails to reclaim them, the ownership over these animals is considered to
have been abandoned. Hence, they will now again be considered as res
nullius and “they shall pertain to him who has caught and kept them.”9
In other words, the captor shall acquire ownership of the animals by
occupation.
[133.2.4] Domestic Animals
The foregoing rule does not apply to domestic or tame animals,
or those which are born and reared under the control and care of man.
In the case of the domestic animals, they are considered as movable
property. Hence, they are subject to the same rules governing the
See Art. 560, NCC.
Art. 716, NCC.
620 PROPERTY
or recapture) is gone and the animus revertendi (intent to recover) is
given up.11 Thus, it has been held there is no real intention to abandon a
property when, as in the case of a shipwreck or a fire, things are thrown
into the sea or on the highway.12 The mere fact that the cargo is sunk
with a shipwrecked at sea by no means deprives the owner of said cargo
of his property therein. He still has the right to reclaim such property
and to recover the same if possible.13
In the case of lost and mislaid (or misplaced) property, however,
the spes recuperandi and the animus revertendi are still alive. Hence,
its ownership is not lost yet by its owner. So long as the property is not
under the control of another person, the present owner does not lose both
the ownership and possession of the same.14 However, if the misplaced
property is already in the control of another person, its possession is
already deemed lost. This is the difference between mislaid (misplaced
property) and lost property. But in the case of a lost property, note that
it is only the possession which is considered lost by the owner, not his
ownership thereof. The lost property is not, therefore, considered a res
nullius but a res alicujus. Hence, its ownership may not be acquired by
the finder through occupation. The finder, far from becoming owner of
the thing found, is bound to return it to its previous owner, if known, or to
immediately deposit the same with the mayor of the city or municipality
where the finding has taken place, if the owner is unknown.15 If the finder
fails to comply with these procedural requirements and appropriates for
himself the movable property he found, he shall be liable for the crime
of theft.16 If the lost property is turned over to the mayor, the latter is
then required to make a public announcement of such finding for two
consecutive weeks in a manner he deems best.17 If after six months, the
owner does not appear, the thing found, or its value, shall be awarded to
the finder, with the obligation to reimburse the expenses incurred in the
publication.18 It is only after compliance with the foregoing rules that
11
12
U.S. v. Rey, 8 Phil. 500 (1907).
Id.
13
Id.
14
See Art. 556, NCC.
15
Art. 719, 1st par., NCC.
16
Art. 308(1), RPC.
17
Art. 719, 2nd par., NCC.
18
Art. 719, 4th par., NCC.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 621 622 PROPERTY
OCCUPATION

the finder shall acquire ownership of the thing found by occupation. If

the owner appears on time, he shall be obliged, however, to pay, as a
reward to the finder, one-tenth of the sum or of the price of the thing
found.19 Title II. INTELLECTUAL CREATION

Art. 721. By intellectual creation, the following persons acquire

— oOo —
ownership:
(1) The author with regard to his literary, dramatic, historical, le-
gal, philosophical, scientific or other work;
(2) The composer, as to his musical composition;
(3) The painter, sculptor, or other artist, with respect to the prod-
uct of his art;
(4) The scientist or technologist or any other person with regard
to his discovery or invention. (n)
ART. 722. The author and the composer, mentioned in Nos. 1 and 2
of the preceding article, shall have the ownership of their creations even
before the publication of the same. Once their works are published, their
rights are governed by the Copyright laws.
The painter, sculptor or other artist shall have dominion over the
product of his art even before it is copyrighted.
The scientist or technologist has the ownership of his discovery or
invention even before it is patented. (n)
ART. 723. Letters and other private communications in writing are
owned by the person to whom they are addressed and delivered, but they
cannot be published or disseminated without the consent of the writer or
his heirs. However, the court may authorize their publication or dissemi-
nation if the public good or the interest of justice so requires.
ART. 724. Special laws govern copyright and patent. (429a)

§ 134. Intellectual Creation

[134.1] Definition of Intellectual Property
Intellectual property refers to creations of the mind: inventions,
literary and artistic works, and symbols, names, images, and designs
used in commerce.1 Section 4.1 of R.A. No. 8293, otherwise known as

1
Http://www.wipo.int.

19
Art. 720, NCC. 622

DIFFERENT MODES OF ACQUIRING OWNERSHIP 623 624 PROPERTY

INTELLECTUAL CREATION

the “Intellectual Property Code of the Philippines,” defines the scope of material or physical object (the letter itself) and the ideas or thoughts
the term “intellectual property rights,” as follows: contained in the letter (its contents). The former is owned by the person
to whom it is addressed and delivered (the recipient) but the latter is
a) Copyright and related rights;
owned by the author or writer (the sender). As a consequence, while the
b) Trademarks and service marks; recipient may have the control and possession of the physical letter itself
c) Geographic indications; by virtue of his ownership of the same, the author’s consent is required
in cases of publication or dissemination of the letter.6 In addition, the
d) Industrial designs; copyright also belongs to the author or writer (the sender).7 If the
e) Patents; author’s consent is not obtained in the publication and dissemination
of the contents of the letter, the latter may seek injunctive relief from
f) Layout-designs (topographies) of integrated circuits; the courts, in addition to his right to recover damages. However, if
and the public good or the interest of justice so requires, the court may
g) Protection of undisclosed information (n) [TRIPS]. authorize the publication or dissemination of a letter or other private
communications.8
[134.2] When Ownership Is Acquired
The author, the composer, the painter, the sculptor or other artists, — oOo —
the scientists and the inventors acquire ownership over their works
from the moment of their creation2 even before the same are published,
copyrighted or patented.3 Being the owner thereof, the creator has
absolute control over his work and he may do anything with it as he
pleases, including the right to share it with others. He also enjoys the
exclusive right to its publication — but this exclusive right is limited
only to the first publication.4 Unless placed under the protection of the
Copyright Law, once published, the work is dedicated to the public, and
the author loses the exclusive right to control subsequent publications
by others.5
The special law governing patents and copyrights is Republic Act
No. 8293, otherwise known as the “Intellectual Property Code of the
Philippines.”

[134.3] Ownership of Letters

With respect to the ownership of letters and other private
communications in writing, a distinction must be made between the

2
Art. 721, NCC.
3
Art. 722, NCC.
4 6
Santos v. McCullough Printing Co., 12 SCRA 321; Filipino Society of Composers, Au- Art. 723, NCC.
7
thors and Publishers, Inc. v. Tan, 148 SCRA 461. Sec. 178.6, R.A. No. 8293.
5 8
Id. Art. 723, NCC.
 625
Title III. DONATION
Chapter 1
NATURE OF DONATIONS
Art. 725. Donation is an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another, who accepts it. (618a)
§ 135. Definition and Concept
[135.1] Definition
The Civil Code defines donation as an “act of liberality whereby a
person disposes gratuitously of a thing or right in favor of another, who
accepts it.”1 It may also be defined as “a gratuitous contract whereby the
donor divests himself, at present and irrevocably, of the thing given in
favor of the donee.”2 The one who donates is called the donor and the
one who receives the donation is called the donee.
[135.2] Essential Elements of Donation
Not every form of liberality, however, is considered as donation.3
The essential elements of donation are as follows: (a) the essential
reduction of the patrimony of the donor; (b) the increase in the patrimony
of the donee; and (c) the intent to do an act of liberality or animus
donandi.4 Hence, to constitute donation the liberality should be strictly
construed, and as such, donation may be defined as the act of liberality
by which a person impoverishes himself by a fraction of his patrimony
in favor of another person who is thereby enriched.5 Thus, while there
1
Art. 725, NCC.
2
Concurring opinion of J. Antonio in Alejandro v. Geraldez, 78 SCRA 245, 266.
3
II Caguioa, Civil Code, 1966 ed., p. 363.
4
Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla de Leon, 425 SCRA 447,
458-459 (2004), citing Republic v. Guzman, 326 SCRA 90, 95 (2000). See also Abello v. Commis-
sioner of Internal Revenue, 452 SCRA 162, 168 (2005).
5
4 Castan, 7th ed., 163, cited in II Caguioa, Civil Code, 1966 ed., 363.
625
DIFFERENT MODES OF ACQUIRING OWNERSHIP 627
DONATION
Nature of Donations
elements of a donation are present. The patrimony of the
four petitioners were reduced by P882,661.31 each. Senator
Edgardo Angara’s patrimony correspondingly increased by
P3,530,645.24. There was intent to do an act of liberality
or animus donandi was present since each of the petitioners
gave their contributions without any consideration.”7
[135.3] Donative Intent or Animus Donandi
Donative intent is a creature of the mind. It cannot be perceived
except by the material and tangible acts which manifest its presence.
This being the case, donative intent is presumed present when one
gives a part of one’s patrimony to another without consideration.8 It
is not negated when the person donating has other intentions, motives
or purposes which do not contradict donative intent.9 Thus, in Abello
v. CIR,10 the Supreme Court held that the fact that the donors would
somehow in the future benefit from the election of the candidate to
whom they made campaign contributions, in no way amounts to a
valuable consideration so as to remove political contributions from the
purview of a donation as their candidate was under no obligation to
benefit them. The Court explained:
“Since the purpose of an electoral contribution is to
influence the results of the election, petitioners again claim
that donative intent is not present. Petitioners attempt to place
the barrier of mutual exclusivity between donative intent and
the purpose of political contributions. This Court reiterates
that donative intent is not negated by the presence of other
intentions, motives or purposes which do not contradict
donative intent.
“Petitioners would distinguish a gift from a political
contribution by saying that the consideration for a gift is
the liberality of the donor, while the consideration for a
political contribution is the desire of the giver to influence
the result of an election by supporting candidates who, in
7 11
At pp. 168-169.
8 12
Id., at p. 170.
9
Id.
10
Supra.
626 PROPERTY
is liberality in commodatum, gratuitous deposit and mutuum without
interest, these are not considered donations by the Civil Code as these
contracts do not satisfy the elements just mentioned.
In Abello v. Commissioner of Internal Revenue,6 the partners in the
ACCRA law firm contributed P882,661.31 each to the campaign funds
of Senator Edgardo Angara, then running for the Senate during the 1987
national elections. In the year following the elections, the Bureau of
Internal Revenue (BIR) assessed each of the partners P263,032.66 for
their contributions, representing unpaid donor’s taxes. Angara’s partners
questioned the propriety of the imposition of donor’s tax on the ground
that political or electoral contributions are not considered gifts under
the National Internal Revenue Code. In discrediting the contention of
the partners, the Court explained:
“The NIRC does not define transfer of property by gift.
However, Article 18 of the Civil Code, states:
In matters which are governed by the Code of Commerce
and special laws, their deficiency shall be supplied by the
provisions of this Code.
Thus, reference may be made to the definition of a
donation in the Civil Code. Article 725 of said Code defines
donation as:
… an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another, who
accepts it.
Donation has the following elements: (a) the reduction
of the patrimony of the donor; (b) the increase in the
patrimony of the donee; and (c) the intent to do an act of
liberality or animus donandi.
The present case falls squarely within the definition of
a donation. Petitioners, the late Manuel G. Abello, Jose C.
Concepcion, Teodoro D. Regala and Avelino V. Cruz, each
gave P882,661.31 to the campaign funds of Senator Edgardo
Angara, without any material consideration. All three
6
452 SCRA 162, Feb. 23, 2005.
628 PROPERTY
the perception of the giver, would influence the shaping of
government policies that would promote the general welfare
and economic well-being of the electorate, including the
giver himself.
“Petitioners’ attempt is strained. The fact that petitioners
will somehow benefit in the future from the election of the
candidate to whom they contribute, in no way amounts to a
valuable consideration so as to remove political contributions
from the purview of a donation. Senator Angara was under no
obligation to benefit the petitioners. The proper performance
of his duties as a legislator is his obligation as an elected
public servant of the Filipino people and not a consideration
for the political contributions he received. In fact, as a
public servant, he may even be called to enact laws that are
contrary to the interests of his benefactors, for the benefit of
the greater good.
“In fine, the purpose for which the sums of money were
given, which was to fund the campaign of Senator Angara
in his bid for a senatorial seat, cannot be considered as a
material consideration so as to negate a donation.”11
For a donation to exist, however, the intent to donate must be
effectively carried out. Hence, a mere declaration of an intention or
desire to donate is not a donation.12 In the Jutic case,13 for example,
Arsenio Seville executed an affidavit expressing his intention or desire
to give to his brother Melquiades Seville his properties in the event of
his death at some future time. The Court concluded that there was no
donation, be it inter vivos or mortis causa, as such intention or desire
was not effectively carried out after the execution of the affidavit.
Republic v. Guzman
326 SCRA 90 (Feb. 18, 2000)
David Rey Guzman, a natural-born American citizen, is the son of the
spouses Simeon Guzman, a naturalized American citizen but formerly a citizen
At pp. 170-171.
See Justice v. Court of Appeals, 153 SCRA 269 (1987) and Aldaba v. Court of Appeals,
27 SCRA 263.
13
Supra.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 629
DONATION
Nature of Donations
of the Philippines, and Helen Meyers Guzman, an American citizen. In 1968
Simeon died leaving to his sole heirs Helen and David an estate consisting of
several parcels of land located in Bulacan. In 1970, Helen and David executed
a Deed of Extrajudicial Settlement of the Estate of Simeon Guzman dividing
and adjudicating to themselves all the property belonging to the estate of
Simeon. In 1981, Helen executed a Quitclaim Deed assigning, transferring, and
conveying to her son David her undivided one-half interest on all the parcels
of land subject matter of the Deed of Extrajudicial Settlement of the Estate of
Simeon Guzman. Since the document appeared not to have been registered,
upon the advice of her lawyer, Helen executed another document, a Deed of
Quitclaim in August 1989 confirming the earlier deed of quitclaim as well as
modifying the document to encompass all her other property in the Philippines.
In October 1989, David executed a Special Power of Attorney where he
acknowledged that he became the owner of the parcels of land subject of the
Deed of Quitclaim executed by Helen and empowering Atty. Abela to sell or
otherwise dispose of the lots. A certain lawyer wrote the Office of the Solicitor
General and furnished it with documents showing that David’s ownership of
the one-half (1/2) of the estate of Simeon Guzman was defective. Thus, the
OSG filed a petition for escheat praying that 1/2 of David’s interest in each of
the subject parcels of land be forfeited in favor of the estate.
The State anchors its argument on Sections 7 and 8 of Article XII of the
Constitution. The State contends that the acquisition of the parcels of land by
David does not fall under any of these exceptions. It asserts that David being
an American citizen could not validly acquire one-half (1/2) interest in each of
the subject parcels of land by way of the two deeds of quitclaim as they are in
reality donations inter vivos and that the elements of donation are present in the
conveyance made by Helen in favor of David.
David, maintains, on the other hand, that he acquired the property by right
of accretion and not by way of donation, with the deeds of quitclaim merely
declaring Helen’s intention to renounce her share in the property and not an
intention to donate. The intention of Helen, in fact, was to preserve the Bulacan
properties within the bloodline of Simeon from where they originated, over and
above the benefit that would accrue to David by reason of her renunciation.
In holding that the subject quitclaims are not in the nature of donation,
the Court explained —
“There are three (3) essential elements of a donation: (a)
the reduction of the patrimony of the donor; (b) the increase in
the patrimony of the donee; and, (c) the intent to do an act of
liberality or animus donandi. When applied to a donation of an
immovable property, the law further requires that the donation be
DIFFERENT MODES OF ACQUIRING OWNERSHIP 631
DONATION
Nature of Donations
requisites are likewise present in donation. Like any contract, donation
also requires the concurrence of the reciprocal consent of the parties
and it does not become perfect until it is accepted by the donee.15 In
other words, there is a concurrence of offer (coming from the donor)
and acceptance (coming from the donee), consequently, a contract. It
is for this reason that donations inter vivos are likewise governed by
the general provisions on contracts and obligations in all that is not
determined under the title of the New Civil Code on donations.16
The fact that the New Civil Code in Article 725 uses the term “act”
instead of “contract” does not militate against the view presented above
because this is merely a consequence of Emperor Napoleon’s error
who could not conceive of a contract without reciprocal obligations.17
Donation is a bilateral act, and, as such, is a contract, but it is a unilateral
contract which imposes obligations only on the donor.18 Thus, Justice
J.B.L. Reyes commented, as follows:
The Code has failed to recognize that modern civilists
declare it unjustified to separate donations from contracts
even as a mode of acquiring and transmitting ownership. It
is now conceded that historically such separation was due to
Napoleon’s refusal to view donation as a contract because
it did not create reciprocal obligations (thereby confusing
bilaterality of consent and bilaterality of obligations). (See
French authors and XI Scaevola, 526-527).
The text says that donation is ‘an act.’ The project
submitted to the Council of State said it is a ‘contract.’ The
First Consul demanded the alteration on the pretext that a
‘contract’ imposes reciprocal obligations on the ‘contracting
parties’ and thus the appellation could not be given to
donations, wherein the donor is the only one bound to
alienate, receiving nothing in return. He forgot the existence
of unilateral contracts, but the Councilors of State had the
15
See Art. 734, NCC. See also Concurring opinion of J. Antonio in Alejandro v. Geraldez,
78 SCRA 245, 266-267 and Lagazo v. CA, 287 SCRA 18, 27.
16
See Art. 732, NCC.
17
II Caguioa, Civil Code, 1966 ed., 364-365.
18
4 Castan, 7th ed., 169, cited in II Tolentino, Civil Code, 1992 ed., 530 and II Caguioa,
Civil Code, 1966 ed., 365.
630 PROPERTY
made in a public document and that there should be an acceptance
thereof made in the same deed of donation or in a separate public
document. In cases where the acceptance is made in a separate
instrument, it is mandated that the donor should be notified thereof
in an authentic form, to be noted in both instruments.
Not all the elements of a donation of an immovable property
are present in the instant case. The transfer of the property by
virtue of the Deed of Quitclaim executed by Helen resulted in the
reduction of her patrimony as donor and the consequent increase
in the patrimony of David as donee. However, Helen’s intention to
perform an act of liberality in favor of David was not sufficiently
established. A perusal of the two (2) deeds of quitclaim reveals
that Helen intended to convey to her son David certain parcels of
land located in the Philippines, and to re-affirm the quitclaim she
executed in 1981 which likewise declared a waiver and renunciation
of her rights over the parcels of land. The language of the deed
of quitclaim is clear that Helen merely contemplated a waiver
of her rights, title and interest over the lands in favor of David,
and not a donation. That a donation was far from Helen’s mind is
further supported by her deposition which indicated that she was
aware that a donation of the parcels of land was not possible since
Philippine law does not allow such an arrangement. She reasoned
that if she really intended to donate something to David it would
have been more convenient if she sold the property and gave him
the proceeds therefrom. It appears that foremost in Helen’s mind
was the preservation of the Bulacan realty within the bloodline of
Simeon from where they originated, over and above the benefit
that would accrue to David by reason of her renunciation. The
element of animus donandi therefore was missing.”
[135.4] Donation as “Contract”
There is no doubt that donation is a contract. The Civil Code defines
contract as “a meeting of the minds between two persons whereby one
binds himself, with respect to the other to give something or to render
some service.”14 Under Article 1318 of the New Civil Code, there is
no contract unless the following requisites concur: (1) consent of the
contracting parties; (2) object certain which is the subject matter of the
contract; and (3) cause of the obligation which is established. All three
14
Art. 1305, NCC.
632 PROPERTY
weakness to submit to his objection. (Plianol-Ripert, Droit
Civil, Traite Pratique, Vol. 5, p. 13).
Donation has all the requisites of contracts (consent of
both parties, subject matter and cause), and like them requires
tradition (delivery) to vest title in the donee. (See Castan,
Der. Civil, 6th ed., Vol. 3, pp. 95-96). Note that the Partidas
(Part V, Title IV) coincided with the modern doctrine, and
include donations among contracts that transfer ownership.
The error of the Spanish Civil Code, which arose
from slavish copying of the French Code, should have been
corrected, and not perpetuated. It is no answer that donations
are essentially gratuitous; so is commodatum, which is
included by this Code in the Book (IV) on contracts. The
new Italian Civil Code has corrected the French and Spanish
Codes in this matter, and it is regrettable that ours persists in
the erroneous Napoleonic concept.19
[135.5] Donation as “Mode of Acquisition of Ownership”
Under the New Civil Code, donation is one of the modes of
acquiring ownership.20 Hence, it is not simply a title which requires
tradition (delivery) in order that ownership may be effectively
transmitted to the donee. The preceding discussions in supra § 135.4
classifying donation as a contract is not in conflict with the present view
that donation is also a mode of acquiring ownership. Pursuant to the
language of the second paragraph of Article 712 of the New Civil Code,
not all contracts require delivery in order to transfer ownership since
the law requires tradition “in consequence of certain contracts” only
and not in all contracts, thus admitting the fact that there are contracts
which do not require tradition (delivery) in order to transfer ownership.
A good example of such contract which does not require tradition
(delivery) in order to transfer ownership is the gratuitous contract of
donation. Hence, it may be viewed that our Civil Code treats donation as
a contract that transfers ownership. As explained by the Court in Liguez
19
See Lawyer’s Journal, Nov. 30, 1950, p. 555.
20
Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla De Leon, 425 SCRA 447,
458, citing Art. 712, NCC.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 633
DONATION
Nature of Donations
v. Lopez,21 donation does not need to be completed by tradition since
Article 712 prescribes that ownership and rights therein are acquired
and transmitted — by donation, succession — and in consequence of
certain contracts by tradition, thereby implying that donation is not one
of the contracts requiring tradition.
As a mode of acquiring ownership, donation results in an effective
transfer of title over the property from the donor to the donee and
the donation is perfected from the moment the donor knows of the
acceptance by the donee.22 And once a donation is accepted, the donee
becomes the absolute owner of the property donated.23
Art. 726. When a person gives to another a thing or right on account
of the latter’s merits or of the services rendered by him to the donor, pro-
vided they do not constitute a demandable debt, or when the gift imposes
upon the donee a burden which is less than the value of the thing given,
there is also a donation. (619)
Art. 727. Illegal or impossible conditions in simple and remunera-
tory donations shall be considered as not imposed. (n)
Art. 728. Donations which are to take effect upon the death of the
donor partake of the nature of testamentary provisions, and shall be gov-
erned by the rules established in the Title on Succession. (620)
Art. 729. When the donor intends that the donation shall take effect
during the lifetime of the donor, though the property shall not be delivered
till after the donor’s death, this shall be a donation inter vivos. The fruits
of the property from the time of the acceptance of the donation, shall per-
tain to the donee, unless the donor provides otherwise. (n)
Art. 730. The fixing of an event or the imposition of a suspensive
condition, which may take place beyond the natural expectation of life of
the donor, does not destroy the nature of the act as a donation inter vivos,
unless a contrary intention appears. (n)
Art. 731. When a person donates something, subject to the resolu-
tory condition of the donor’s survival, there is a donation inter vivos. (n)
Art. 732. Donations which are to take effect inter vivos shall be gov-
erned by the general provisions on contracts and obligations in all that is
not determined in this Title. (621)
21
L-11240, Feb. 13, 1958.
22
Heirs of Cesario Velasquez v. CA, 324 SCRA 552; see also Vda. De Arceo v. CA, 185
SCRA 489 (1990).
23
Id.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 635
DONATION
Nature of Donations
upon the donee a reciprocal obligation or, to be more precise, this is
the kind of donation made for a valuable consideration, the cost of
which is equal to or more than the thing donated.32 Of all the foregoing
classifications, donations of the onerous type are the most distinct. This
is because, unlike the other forms of donation, the validity of and the
rights and obligations of the parties involved in an onerous donation
is completely governed not by the law on donations but by the law on
contracts.33
[136.2] Donations Mortis Causa
[136.2.1] Concept
There used to be a prevailing notion, spawned by a study of
Roman Law, that the Civil Code recognizes a donation mortis causa
as a juridical act in contraposition to a donation inter vivos.34 That
impression persisted because the implications of article 620 of the
Spanish Civil Code, now Article 728 of the Civil Code, had not been
fully expounded in the law schools.35 The concept of donation mortis
causa of the Roman Law and the Spanish pre-codal legislation has
been eliminated as a juridical entity from and after the enactment of the
Spanish Civil Code of 1889 (Art. 620) as well as the New Civil Code
of the Philippines (Art. 728), which admit only gratuitous transfers of
title or real rights to property either by way of donations inter vivos or
else by way of last will and testament, executed with the requisite legal
formalities.36 Otherwise put, Article 620 of the Spanish Civil Code (now
Article 728 of the New Civil Code) merged donations mortis causa with
testamentary dispositions and thus suppressed the said donations as an
independent legal concept.37 Article 728 of the Civil Code, provides, as
follows:
“Art. 728. Donations which are to take effect upon
the death of the donor partake of the nature of testamentary
provisions, and shall be governed by the rules established in
the Title on Succession. (620)”
32
Id., citing Art. 733, NCC. See also De Luna v. Abrigo, supra, p. 156.
33
Id. See also Art. 733, NCC.
34
Alejandro v. Geraldez, 78 SCRA 245, 253 (1977).
35
Id.
36
Bonsato v. Court of Appeals, 95 Phil. 481, cited in Puig v. Peñaflorida, 15 SCRA 276,
282 (1965).
37
Alejandro v. Geraldez, supra, p. 254.
634 PROPERTY
Art. 733. Donations with an onerous cause shall be governed by
the rules on contracts, and remuneratory donations by the provisions of
the present Title as regards that portion which exceeds the value of the
burden imposed. (622)
§ 136. Classifications of Donation
[136.1] In General
Donations may be classified as to their taking effect in to donations
mortis causa and donations inter vivos. If the donation is made in
contemplation of the donor’s death, meaning that the full or naked
ownership of the donated properties will pass to the donee only because
of the donor’s death, then it is at that time that the donation takes effect,
and it is a donation mortis causa which should be embodied in a last
will and testament.24 But if the donation takes effect during the donor’s
lifetime or independently of the donor’s death, meaning that the full or
naked ownership (nuda proprietas) of the donated properties passes to
the donee during the donor’s lifetime, not by reason of his death but
because of the deed of donation, then the donation is inter vivos.25
Donations inter vivos, on the other hand, may be classified
according to purpose or cause into: (1) pure or simple; (2) remuneratory
or compensatory; (3) conditional or modal; and (4) onerous.26 A pure or
simple donation is one where the underlying cause is plain gratuity27 or
pure liberality (no strings attached).28 This is donation in its truest form.29
On the other hand, a remuneratory or compensatory donation is one
made for the purpose of rewarding the donee for past services, which
services do not amount to a demandable debt.30 A conditional or modal
donation is one where the donation is made in consideration of future
services or where the donor imposes certain conditions, limitations or
charges upon the donee, the value of which is inferior than that of the
donation given.31 Finally, an onerous donation is that which imposes
24
Alejandro v. Geraldez, 78 SCRA 245, 253, citing Bonsato v. Court of Appeals, 95 Phil.
481.
25
Id., citing Castro v. Court of Appeals, 27 SCRA 1076.
26
Republic v. Silim, 356 SCRA 1, 8.
27
Id., citing Art. 725, NCC.
28
Lagazo v. Court of Appeals, 287 SCRA 18, 24. Also in De Luna v. Abrigo, 181 SCRA
150, 155.
29
Republic v. Silim, supra, p. 8.
30
Id., citing Art. 726, NCC.
31
Id., citing Arts. 726 and 733, NCC.
636 PROPERTY
Note that the New Civil Code does not use the term donation
mortis causa.38 According to Manresa, a transfer mortis causa, which
should be embodied in a last will and testament, should not be called
donation mortis causa since it is in reality a legacy.39 The term “donation
mortis causa” as commonly employed is merely a convenient name to
designate those dispositions of property that are void when made in the
form of donations.40
[136.2.2] Distinguished From Donations Inter Vivos
It is the time of effectivity (aside from the form) which distinguishes
a donation inter vivos from a donation mortis causa. And the effectivity
is determined by the time when the full or naked ownership (dominium
plenum or dominium directum) of the donated properties is transmitted
to the donees.41 If the donation is made in contemplation of the donor’s
death, meaning that the full or naked ownership of the donated properties
will pass to the donee only because of the donor’s death, then it is at
that time that the donation takes effect, and it is a donation mortis
causa which should be embodied in a last will and testament.42 But if
the donation takes effect during the donor’s lifetime or independently
of the donor’s death, meaning that the full or naked ownership (nuda
proprietas) of the donated properties passes to the donee during the
donor’s lifetime, not by reason of his death but because of the deed of
donation, then the donation is inter vivos.43
[136.2.3] How to Determine One from the Other
Crucial in determining whether the donation is inter vivos or
mortis causa is the determination of whether the donor intended to
transfer ownership over the properties upon the execution of the deed.44
Otherwise stated, whether a donation is inter vivos or mortis causa
depends upon the nature of the disposition made. Did the donor intend
to transfer the ownership of the property donated upon the execution of
38
Id.
39
5 Manresa, Codigo Civil, 6th ed., p. 107, cited in Alejandro v. Geraldez, supra, p. 252.
40
Bonsato v. CA, supra, p. 487.
41
Alejandro v. Geraldez, supra, p. 253.
42
Id., p. 253, citing Bonsato v. Court of Appeals, 95 Phil. 481.
43
Id., citing Castro v. Court of Appeals, 27 SCRA 1076.
44
Reyes v. Mosqueda, 187 SCRA 661, 671 (1990). See also Austria-Magat v. Court of
Appeals, 375 SCRA 556, citing Gestopa v. Court of Appeals, 342 SCRA 105, 110.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 637
DONATION
Nature of Donations
the donation? If this is so, as reflected from the provisions contained in
the donation, then it is inter vivos; otherwise, it is merely mortis causa,
or made to take effect after death.45
Sometimes the nature of the donation becomes controversial when
the donee’s enjoyment of the property donated is postponed until after
the donor’s death.46 However, Articles 729 and 730 of the Civil Code
provide, as follows:
“Art. 729. When the donor intends that the donation
shall take effect during the lifetime of the donor, though the
property shall not be delivered till after the donor’s death,
this shall be a donation inter vivos. The fruits of the property
from the time of the acceptance of the donation shall pertain
to the donee, unless the donor provides otherwise. (n)”
“Art. 730. The fixing of an event or the imposition of
a suspensive condition, which may take place beyond the
natural expectation of life of the donor, does not destroy the
nature of the act as a donation inter vivos, unless a contrary
intention appears. (n)”
When the time fixed for the commencement of the enjoyment
of the property donated be at the death of the donor, or when the
suspensive condition is related to his death, confusion might arise.
To avoid it we must distinguish between the actual donation and the
execution thereof. That the donation is to have effect during the lifetime
of the donor or at his death does not mean the delivery of the property
must be made during his life or after his death. From the moment that
the donor disposes freely of his property and such disposal is accepted
by the donee, the donation exists, perfectly and irrevocably. Until the
day arrives or until the condition is fulfilled, the donation, although
valid when made, cannot be realized. Thus, he who makes the donation
effective upon a certain date, even though to take place at his death,
disposes of that which he donated and he cannot afterwards revoke the
donation nor dispose of the said property in favor of another.47
45
Castro v. Court of Appeals, 27 SCRA 1076, 1082 (1969), cited in National Treasurer of
the Phil. v. Vda. De Meimban, 131 SCRA 264, 269 (1984).
46
Castro v. CA, supra, pp. 1082-1083.
47
5 Manresa, Codigo Civil, 6th ed., p. 108, cited in Castro v. CA, supra, p. 1083.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 639
DONATION
Nature of Donations
considered in ascertaining the intention of the donor. Here,
the donation is entitled and called donacion onerosa mortis
causa. From the body, however, we find that the donation
was of a nature remunerative rather than onerous. It was for
past services rendered, services which may not be considered
as a debt to be paid by the donee but services rendered to
her freely and in goodwill. The donation instead of being
onerous or for a valuable consideration, as in payment of a
legal obligation, was more of remuneratory or compensatory
nature, besides being partly motivated by affection.
We should not give too much importance or significance
to or be guided by the use of the phrase “mortis causa” in
a donation and thereby to conclude that the donation is not
one of inter vivos. In the case of De Guzman, et al. v. Ibea,
et al. (67 Phil. 633), this Court through Mr. Chief Justice
Avancena said that if a donation by its terms is inter vivos,
this character is not altered by the fact that the donor styles
it mortis causa.
In case of doubt the conveyance should be deemed a donation
inter vivos rather than mortis causa, in order to avoid uncertainty as to
the ownership of the property subject of the deed.57
In Laureta v. Mata,58 the deed of donation provided that the donor
was donating mortis causa certain properties as a reward for the donee’s
services to the donor and as a token of the donor’s affection for him.
The donation was made under the condition that “the donee cannot take
possession of the properties donated before the death of the donor”;
that the donee should cause to be held annually masses for the repose
of the donor’s soul, and that he should defray the expenses for the
donor’s funeral. It was held that said donation was inter vivos despite
the statement in the deed that it was mortis causa. The donation was
construed as a conveyance in praesenti (“a present grant of a future
interest”) because it conveyed to the donee the title to the properties
donated “subject only to the life estate of the donor” and because the
conveyance took effect upon the making and delivery of the deed. The
57
Puig v. Peñaflorida, 15 SCRA 276, 283.
58
44 Phil. 668.
638 PROPERTY
And in ascertaining the intention of the donor, all of the deed’s
provisions must be read together.48 Apart from its language, the real
nature of a deed may likewise be ascertained from the intention of
the parties as demonstrated by the circumstances attendant upon its
execution.49 Hence, it is not sufficient to make a donation one mortis
causa, requiring execution of the instrument of gift in the form and
manner required for a will, that the instrument of donation states that
it is mortis causa, if it can be gathered from the body of the instrument
that the main consideration is not death of the donor but rather services
rendered to him by the donee, or his affection for the latter, and
title is transferred immediately to the donee, even though the gift is
conditioned to take effect after death of the donor insofar as possession
and enjoyment of the property is concerned.50
In other words, the designation of the donation as mortis causa, or
a provision in the deed to the effect that the donation is “to take effect at
the death of the donor” are not controlling criteria;51 such statements are
to be construed together with the rest of the instrument, in order to give
effect to the real intent of the transferor.52 It is now a settled rule that the
title given to a deed of donation is not the determinative factor which
makes the donation inter vivos or mortis causa.53 As early as the case of
Laureta v. Mata, et al.,54 the Supreme Court ruled that the dispositions
in a deed of donation — whether inter vivos or mortis causa do not
depend on the title or term used in the deed of donation but on the
provisions stated in such deed.55 The Court explained in Concepcion v.
Concepcion56 —
x x x But, it is a rule consistently followed by the
courts that it is the body of the document of donation and the
statements contained therein, and not the title that should be
48
Gestopa v. Court of Appeals, 342 SCRA 105, 111 (2000), citing Alejandro v. Geraldez,
supra, p. 261.
49
Sicad v. Court of Appeals, 294 SCRA 183, 191. See also Gestopa v. CA, supra, p. 112
(2000).
50
Concepcion v. Concepcion, 91 Phil. 823.
51
Puig v. Peñaflorida, 15 SCRA 276, 283, citing Laureta v. Mata, 44 Phil. 668; Concepcion
v. Concepcion, supra; Cuevas v. Cuevas, 68 Phil. 68
52
Id., citing Concepcion v. Concepcion, supra; Bonsato v. Court of Appeals, supra.
53
Reyes v. Mosqueda, 187 SCRA 661, 669 (1990).
54
44 Phil. 668 (1928).
55
Cited in Reyes v. Mosqueda, supra, p. 669.
56
Supra.
640 PROPERTY
acceptance of the donation was a circumstance which was taken into
account in characterizing the donation as inter vivos.59
In Balaqui v. Dongso,60 the deed of donation involved was more
confusing than that found in the Laureta case. In the Balaqui case, it was
provided in the deed that the donation was made in consideration of the
services rendered to the donor by the donee; that “title” to the donated
properties would not pass to the donee during the donor’s lifetime,
and that it would be only upon the donor’s death that the donee would
become the “true owner” of the donated properties. However, there was
the stipulation that the donor bound herself to answer to the donee for
the property donated and that she warranted that nobody would disturb
or question the donee’s right. Notwithstanding the provision in the deed
that it was only after the donor’s death when the “title” to the donated
properties would pass to the donee and when the donee would become
the owner thereof, it was held in the Balaqui case that the donation
was inter vivos. It was noted in that case that the donor, in making a
warranty, implied that the title had already been conveyed to the donee
upon the execution of the deed and that the donor merely reserved to
herself the “possession and usufruct” of the donated properties.61
In Concepcion v. Concepcion,62 it was provided in the deed of
donation, which was also styled as mortis causa, that the donation was
made in consideration of the services rendered by the donee to the donor
and of the donor’s affection for the donee; that the donor had reserved
what was necessary for his maintenance, and that the donation “ha de
producir efectos solamente por muerte de la donante.” It was ruled that
the donation was inter vivos because the stipulation that the donation
would take effect only after the donor’s death “simply meant that the
possession and enjoyment, of the fruits of the properties donated’ should
take effect only after the donor’s death and not before.”
[136.2.4] Importance of Distinctions
The distinction between a transfer inter vivos and mortis causa is
important as the validity or revocation of the donation depends upon its
59
Cited in Alejandro v. Geraldez, supra, 258.
60
53 Phil. 673.
61
Cited in Alejandro v. Geraldez, supra, 258.
62
91 Phil. 823.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 641
DONATION
Nature of Donations
nature.63 If the donation is inter vivos, it must be executed and accepted
with the formalities prescribed by Articles 748 and 749 of the Civil
Code, except when it is onerous in which case the rules on contracts
will apply.64 If it is mortis causa, the donation must be in the form of a
will, with all the formalities for the validity of wills, otherwise it is void
and cannot transfer ownership.65
In the following cases, the conveyance was considered a void
mortis causa transfer because it was not cast in the form of a last will
and testament as required in Article 728 of the Civil Code:
[a] Where it was stated in the deed of donation that the donor
wanted to give the donee something “to take effect after his death”
and that “this donation shall produce effect only by and because of
the death of the donor, the property herein donated to pass title after
the donor’s death.”66 In the Padilla case, the donation was regarded as
mortis causa although the donated property was delivered to the donee
upon the execution of the deed and although the donation was accepted
in the same deed.67
[b] Where it was provided that the donated properties would be
given to the donees after the expiration of thirty (30) days from the
donor’s death, the grant was made in the future tense, and the word
“inherit” was used.68 The Court explained that the verb “to inherit”
clearly implies the acquisition of property only from and after the death
of the alleged donors.
[c] Where the alleged donation expressly reserved the right
to dispose of the properties conveyed at any time before his death,
and limited the donation “to whatever property or properties left
undisposed by (the donor) during (his) lifetime.”69 The Court explained
that the alleged donor clearly retained his ownership until his death and
the reservation is tantamount to a reservation of the right to revoke the
donation.
63
Ganuelas v. Cawed, 401 SCRA 447, 455 (2003).
64
Id.
65
Id.; See also Art. 728, NCC.
66
Howard v. Padilla, 96 Phil. 983.
67
Cited in Alejandro v. Geraldez, supra, 256-257.
68
Cariño v. Abaya, 70 Phil. 182, cited in Alejandro v. Geraldez, supra, 257.
69
Bautista v. Sabiniano, 92 Phil. 244, cited in Alejandro v. Geraldez, supra, 257 and Bon-
sato v. CA, 95 Phil. 481.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 643
DONATION
Nature of Donations
the Civil Code.78 As explained in Bautista, et al. v. Sabiniano,79 except in
the instances expressly provided by law, such as the subsequent birth of
children of the donor, failure by the donee to comply with the conditions
imposed, ingratitude of the donee and reduction of the donation in the
event of inofficiousness thereof, a donation is irrevocable. If the donor
reserves the right to revoke it or if he reserves the right to dispose of
all the properties purportedly donated, there is no donation.80 If the
disposition or conveyance or transfer takes effect upon the donor’s
death and becomes irrevocable only upon his death, it is not inter vivos
but a mortis causa donation.81
In the following cases, on the other hand, the conveyance was
considered a valid donation inter vivos, hence, essentially irrevocable:
[a] When the attending circumstances in the execution of
the subject deed demonstrated the intent of the donor to transfer the
ownership over the properties upon its execution since prior to the
execution of the donation inter vivos, the donor spouses already executed
three donations mortis causa.82 Such fact, according to the Court, shows
that the donor spouses were aware of the difference between donations
inter vivos and mortis causa. In addition, the donor made reservation of
lifetime usufruct and sufficient properties for their maintenance which
indicated that the donor intended to transfer the naked ownership over
the properties.83 Lastly, the fact that the donee accepted the donation
is an indication that the donation is inter vivos because donations
mortis causa are not required to be accepted by the donees during their
lifetime.84
[b] Where the donation expressly provides that it is irrevocable
although there are provisions in the deed which state that the same will
only take effect upon the death of the donor and that there is prohibition
to alienate, encumber, dispose, or sell the same.85 Citing the earlier
78
Id.
79
92 Phil. 245, cited in the concurring opinion of J. Antonio in Alejandro v. Geraldez,
supra, pp. 266-267.
80
Concurring opinion of J. Antonio in Alejandro v. Geraldez, supra, pp. 266-267.
81
Id.
82
Gestopa v. Court of Appeals, 342 SCRA 105 (2000).
83
Id.
84
Id.
85
Austria-Magat v. Court of Appeals, 375 SCRA 556 (2002).
642 PROPERTY
[d] Where the circumstances surrounding the execution of the
deed of donation reveal that the donation could not have taken effect
before the donor’s death and the rights to dispose of the donated
properties and to enjoy the fruits remained with the donor during her
lifetime.70
[e] Where it was stated in the deeds of donation that the
donations shall “become effective upon the death of the donor” and
“that in the event that the donee should die before the donor, the
donation shall be deemed automatically rescinded and of no further
force and effect.”71 The phrase “to become effective upon the death of
the donor” admits of no other interpretation but that the donor did not
intend to transfer the ownership of the properties to the donee during
her lifetime.72 In addition, the deeds expressly provide that the donation
shall be rescinded in case the donee predecease the donor, which is one
of the decisive characteristics of a donation mortis causa.73
An essential characteristic of dispositions mortis causa is that
the conveyance or alienation should be (expressly or by necessary
implication) revocable ad nutum, i.e., at the discretion of the grantor
or so-called “donor,” simply because the latter has changed his mind.74
Donation inter vivos, on the other hand, once accepted, becomes
irrevocable.75 As observed by Manresa,76 upon acceptance by the
donee, the donor can no longer withdraw, and he can be compelled to
comply with his offering or to deliver the things he wanted to donate.77
Consequently, it may not be revoked unilaterally or by the sole and
arbitrary will of the donor. The donation, however, may be made
revocable upon the fulfillment of resolutory conditions, or may be
revoked only for the reasons provided in Articles 760, 764 and 765 of
70
David v. Sison, 76 Phil. 418, cited in Alejandro v. Geraldez, supra, 257.
71
Maglasang v. Heirs of Cabatingan, 383 SCRA 6 (2002). See also Ganuelas v. Cawed, 401
SCRA 447 (2003).
72
Id.
73
Id.
74
Puig v. Peñaflorida, supra, 283, citing Bautista v. Sabiniano, 92 Phil. 244 and Bonsato v.
Court of Appeals, 95 Phil. 481
75
Gestopa v. CA, 342 SCRA 105, 113 (2000).
76
5 Manresa 88.
77
Cited in the concurring opinion of J. Antonio in Alejandro v. Geraldez, supra, pp. 266-
267.
644 PROPERTY
case of Bonsato v. Court of Appeals,86 the Court explained that where
the donation per the deed of donation would also take effect upon the
death of the donor with reservation for the donor to enjoy the fruits of
the land, said statements only mean that “after the donor’s death, the
donation will take effect so as to make the donees the absolute owners
of the donated property, free from all liens and encumbrances; for it
must be remembered that the donor reserved for himself a share of
the fruits of the land donated.” On the issue of prohibition to alienate,
the Court, citing the case of Gestopa v. Court of Appeals,87 held that
“the prohibition to alienate does not necessarily defeat the inter vivos
character of the donation. It even highlights the fact that what remains
with the donor is the right of usufruct and not anymore the naked title
of ownership over the property donated.” In the Austria-Magat case,
the provision in the deed of donation that the donated property will
remain in the possession of the donor just goes to show that the donor
has given up his naked title of ownership thereto and has maintained
only the right to use (jus utendi) and possess (jus possidendi) the subject
donated property. The Court also noted the existence of an acceptance
clause which is a mark that the donation is inter vivos.
[c] Where the donation expressly declares that it is irrevocable
and the owner makes reservation for himself, during his lifetime, of the
owner’s share of the fruits or produce, the deed is a donation inter vivos
although it provides that the donation shall become effective after the
death of the donor.88 The Court explained that the express irrevocability
of the donation is a quality absolutely incompatible with the idea of
conveyances mortis causa where revocability is of the essence of the
act. In the Bonsato case, the Court further adds that the reservation made
by the donor would be unnecessary if the ownership of the donated
property remained with him and that the phrase “that after death of the
donor the aforesaid donation shall become effective” only means that
after the donor’s death, the donation will take effect so as to make the
donees absolute owners of the donated property.
[d] When the deed of donation provides that the donor will not
dispose or take away the property donated (thus making the donation
86
95 Phil. 481 (1954).
87
Supra.
88
Bonsato v. Court of Appeals, 95 Phil. 481 (1954).
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 645
DONATION
Nature of Donations
irrevocable), he is in effect making a donation inter vivos. He parts away
with his naked title but maintains beneficial ownership while he lives.89
It remains to be a donation inter vivos despite an express provision that
the donor continues to be in possession and enjoyment of the donated
property while he is alive.
However, a donation which purports to be one inter vivos but
withholds from the donee the right to dispose of the donated property
during the donor’s lifetime is in truth one mortis causa. In a donation
mortis causa “the right of disposition is not transferred to the donee
while the donor is still alive.”90
In David v. Sison,91 the Court construed a deed purporting to be a
donation inter vivos to be in truth one mortis causa because it stipulated
“that all rents, proceeds, fruits, of the donated properties shall remain
for the exclusive benefit and disposal of the donor, Margarita David,
during her lifetime; and that, without the knowledge and consent of
the donor, the donated properties could not be disposed of in any way,
whether by sale, mortgage, barter, or in any other way possible.” On
these essential premises, the Court said, such a donation must be deemed
one mortis causa, because the combined effect of the circumstances
surrounding the execution of the deed of donation and of the above-
quoted clauses thereof was that the most essential elements of ownership
— the right to dispose of the donated properties and the right to enjoy
the products, profits, possession — remained with Margarita David (the
alleged donor) during her lifetime, and would accrue to the donees only
after Margarita David’s death.
In Bonsato v. Court of Appeals,92 the Court emphasized that the
decisive characteristics of a donation mortis causa, which it had taken
into account in David v. Sison, were that the donor not only reserved
for herself all the fruits of the property allegedly conveyed, but what
is even more important, specially provided that without the knowledge
and consent of the donor, the donated properties could not be disposed
of in any way; thereby denying to the transferees the most essential
attribute of ownership, the power to dispose of the properties.
89
Cuevas v. Cuevas, 98 Phil. 68 (1955).
90
Sicad v. Court of Appeals, 294 SCRA 183 (1998).
91
76 Phil. 418 (1946), cited in Sicad v. CA, supra.
92
Supra. See also Sicad v. CA, supra.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 647
DONATION
Nature of Donations
satisfy her needs, the donation must be held to partake of the nature of
a conveyance inter vivos. In Puig case, while there is a clause that the
donor reserved her right “to mortgage or even sell the donated property,
when and if she should need funds to meet her own needs,” the Court
held that such donation is inter vivos. According to the Court, the last
sentence of the stipulation appears incompatible with the grantor’s
freedom to revoke a true conveyance mortis causa, a faculty that is
essentially absolute and discretionary, whether its purpose should be
to supply her needs or to make a profit, or have no other reason than
a change of volition on the part of the grantor-testator. If the donor,
says the Court, wished or intended to retain the right to change the
destination of her property at her sole will and discretion, there was no
reason for her to specify the causes for which she could sell or encumber
the property covered by her bounty.
[136.2.5] Distinguishing Characteristics of Donation Mortis
Causa
The distinguishing characteristics of a donation mortis causa are
the following:
(1) It conveys no title or ownership to the transferee before the
death of the transferor or what amounts to the same thing,
that the transferor should retain the ownership (full or naked)
and control of the property while alive;
(2) That before his death, the transfer should also be revocable
by the transferor at will, ad nutum; but revocability may be
provided for indirectly by means of a reserved power in the
donor to dispose of the properties conveyed;
(3) That the transfer should be void if the transferor should
survive the transferee.99
[136.3] Donation Inter Vivos
If the donation takes effect during the donor’s lifetime or
independently of the donor’s death, meaning that the full or naked
ownership (nuda proprietas) of the donated properties passes to the
99
Ganuelas v. Cawed, 401 SCRA 447, 455-456 (2003), citing Austria-Magat v. CA, 375
SCRA 556. See also Bonsato v. CA, supra, and Alejandro v. Geraldez, supra, pp. 254-255.
646 PROPERTY
Note, however, that a prohibition to alienate may not necessarily
defeat the inter vivos character of the donation.93 As explained earlier,
in ascertaining the intention of the donor, all of the deed’s provisions
must be read together.94 Thus, in Austria-Magat v. Court of Appeals,95
while there is a prohibition to alienate the donated property, the deed,
on the other hand, expressly declares that the donation is irrevocable.
According to the Court in the Austria-Magat case, the prohibition to
alienate does not go against the irrevocable character of the donation.
Such provision, adds the Court, is only necessary assurance that during
the donor’s lifetime, the latter would still enjoy the right of possession
over the property; but, his naked title of ownership has been passed on
to the donees. In Gestopa v. Court of Appeals,96 the Court explained
that the provision in the deed prohibiting the alienation of the donated
property even highlights the fact that what remains with the donor is the
right of usufruct and not anymore the naked title of ownership over the
property donated.
But what about a provision empowering or authorizing the
donor to alienate the property conveyed? What is its effect upon the
conveyance? According to the Court,97 if the are no signs contradicting
or limiting the unqualified and unrestricted right of the donor to alienate
the conveyed property in favor of other persons of her choice at anytime
that she should wish to do so, the same is a true conveyance mortis
causa since it indirectly recognizes the donor’s power to nullify the
conveyance to the alleged donee whatever the donor wished to do so,
for any reason or for no particular reason at all. This faculty, according
to the Court, is characteristic of conveyances post mortem or mortis
causa: for the right of the transferor to alienate the “donated” property
to someone else necessarily imports that the conveyance to the “donee”
will not become final and definite in favor of the latter until the death of
the “donor” should exclude every possibility that the property may be
alienated to some other person.98
However, where the power to indirectly revoke is hedged in by
the specification that the donor could dispose of the property only to
93
Gestopa v. Court of Appeals, 342 SCRA 105.
94
See discussion in supra § ________.
95
Supra.
96
Supra.
97
Puig v. Peñaflorida, supra, 286.
98
Id., 286.
648 PROPERTY
donee during the donor’s lifetime, not by reason of his death but because
of the deed of donation, then the donation is inter vivos.100 As explained
earlier, donation inter vivos, in turn, may be classified into: (1) pure or
simple;101 (2) remuneratory,102 (3) modal,103 and (4) onerous.104
[136.3.1] Pure or Simple and Remuneratory Donations
A pure or simple donation is one where the underlying cause
is plain gratuity105 or pure liberality (no strings attached).106 This
is donation in its truest form.107 On the other hand, a remuneratory
donation is one made for the purpose of rewarding the donee for past
services, which services do not amount to a demandable debt.108 In
remuneratory donation, it is necessary that the services to be repaid
be not demandable obligations, otherwise, the so-called donation is in
reality payment.109 It is likewise necessary that the services must have
already been performed for if the services are still to be performed in
the future, the donation is onerous.110
In the case of simple and remuneratory donations, the rules on
donations in this Title (Arts. 725-773) shall primarily govern111 and the
provisions of the Civil Code on obligations and contracts shall apply in
a suppletory manner.112
Carlos v. Ramil
20 Phil. 183
FACTS: The couple Agustin Carlos and his wife, Juliana Carlos, brought
into their company a young girl from their neighborhood. The couple supported
the girl and the latter served them in return. When the girl grew up and about
100
Castro v. Court of Appeals, 27 SCRA 1076, cited in Alejandro v. Geraldez, supra,
p. 253.
102
101
Art. 725, NCC.
Art. 726, NCC.
103
Arts. 726 and 733, NCC.
104
Art. 733.
105
Republic v. Silim, supra, 8.
106
Lagazo v. Court of Appeals, 287 SCRA 18, 24. Also in De Luna v. Abrigo, 181 SCRA
150, 155.
107
Republic v. Silim, supra, p. 8.
108
Id., citing Art. 726, NCC.
109
5 Manresa 72.
110
Carlos v. Ramil, 20 Phil. 183.
111
See Arts. 725, 726 and 732, NCC.
112
Art. 732, NCC.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 649
DONATION
Nature of Donations
to be married, the spouses Carlos feared that there would be no one who would
take care of them in their twilight years. After the marriage, the couple entered
into an arrangement with the girl and her husband, that if the latter would
remain living in their house and take care of them, the real estate which they
owned would be given to the girl and her husband. There arose a question of
whether or not the agreement constituted a remunerative donation.
RULING: The agreement is not a remunerative donation but a contract
by which Carlos and his wife transferred to the defendant and his wife the lands
described in the complaint upon the consideration that the latter should give to
the former the care therein mentioned and prescribed. That contract was fully
executed upon the part of the defendant and his wife. If the transaction between
Carlos and the defendant was a donation it was una donacion con causa onerosa
and not una donacion remuneratoria. One of the leading differences between
these two classes of donations or gifts is that in the one con causa onerosa the
services which form the consideration for the gift have not yet been performed
while in the other they have. At the time of the transaction hereafter referred
to, none of the services which formed the consideration for the agreement in
question had as yet been performed. They were all to be performed in the
future. Under the provisions of the Civil Code una donacion con causa onerosa
is governed by the provisions of said code relative to contracts. That being
so, the arguments of the appellant relative to the validity of the instrument in
question are entirely inapplicable and beside the point for the reason that they
relate solely to a remunerative gift.
[136.3.2] Modal and Onerous Donations
A conditional or modal donation is one where the donation is
made in consideration of future services or where the donor imposes
certain conditions, limitations or charges upon the donee, the value of
which is inferior than that of the donation given.113 An onerous donation,
on the other hand, is that which imposes upon the donee a reciprocal
obligation or, to be more precise, this is the kind of donation made for
a valuable consideration, the cost of which is equal to or more than the
thing donated.114
When the donation is onerous, it is completely governed not by
the law on donations but by the law on contracts.115 A modal donation,
on the other hand, shall be governed by the law on contracts up to extent
113
Republic v. Silim, supra, p. 8.
114
Id.
115
Art. 733, NCC.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 651
DONATION
Nature of Donations
therein, free from all lines [sic] and encumbrances and
charges whatsoever; [emphasis supplied]
It is clear that the donor did not have any intention to burden
or charge petitioner as the donee. The words in the deed are in fact
typical of a pure donation. We agree with Respondent Court that
the payments made by petitioner were merely his voluntary acts.
This much can be gathered from his testimony in court, in which
he never even claimed that a burden or charge had been imposed
by his grandmother.”
[136.3.3] Importance of Distinctions
The classification of donations into simple, remuneratory or
onerous is important for the purpose of determining: (1) the rules that
shall govern a particular donation; (2) the formalities to be followed;
and (3) the effect of imposition of illegal or impossible conditions.
As stated earlier, simple and remuneratory donations are governed,
primarily, by Title III of Book III (the law on donations) and, suppletorily,
by the law on obligations and contracts. Such being the case, the
formalities required for a valid donation under Articles 748 and 749
of the New Civil Code apply to these kinds of donations. In addition,
Article 727 of the New Civil Code expressly provides that “illegal or
impossible conditions in simple and remuneratory donations shall be
considered as not imposed.” In other words, if illegal or impossible
conditions are imposed in simple or remuneratory donations, then the
donation is valid because the illegal or impossible conditions are simply
considered as not imposed and will, thus, be disregarded.
Donations with an onerous cause, on the other hand, are governed
not by the law on donations but by the rules on contracts.117 Hence, the
formalities required for a valid donation under Articles 748 and 749 of
the Code do not apply.118 And since an onerous donation is governed by
the law on obligations and contracts, if an impossible or illegal condition
is imposed in such kind of donation, the obligation thus created shall be
annulled pursuant to the provisions of Article 1183 of the Civil Code,
which states:
117
Art. 733, NCC.
118
See Danguilan v. Intermediate Appellate Court, 168 SCRA 22 (1988).
650 PROPERTY
of the burden and by the law on donations under the present Title as
regards that portion which exceeds the value of the burden imposed.116
Note that while Article 733 uses the term “remuneratory donations,”
the law is actually referring to modal donations. The use of the term
“remuneratory” in said article is improper.
Lagazo v. Court of Appeals
287 SCRA 18 (1998)
Tito Lagazo filed an action against Alfredo Cabanlit for the recovery of
a parcel of land in Sta. Mesa, Manila which used to be owned by plaintiff’s
grandmother, Catalina Jacob Vda. De Reyes. Plaintiff’s claim was anchored
on an alleged donation made by his grandmother in his favor. Defendant, on
the other hand, claimed that he bought the property from Eduardo Español, to
whom Catalina allegedly sold the lot. After trial, the trial court ruled in favor
of plaintiff. On appeal, the Court of Appeals reversed the decision of the trial
court mainly because of the absence of any evidence that plaintiff accepted
the donation in the manner required by Article 749 of the Civil Code. Plaintiff
contended, however, that the formalities for a donation of real property should
not apply to his case since it was an onerous donation for he allegedly paid for
the amortizations due on the land before and after the execution of the deed
of donation. In upholding the decision of the Court of Appeals that the subject
donation was simple, the Supreme Court ruled —
“We rule that the donation was simple, not onerous. Even
conceding that petitioner’s full payment of the purchase price of
the lot might have been a burden to him, such payment was not
however imposed by the donor as a condition for the donation.
Rather, the deed explicitly stated:
That for and in consideration of the love and
affection which the DONEE inspires in the DONOR,
and as an act of liberality and generosity and considering
further that the DONEE is a grandson of the DONOR,
the DONOR hereby voluntarily and freely gives,
transfer[s] and conveys, by way of donation unto
said DONEE, his heirs, executors, administrators and
assigns, all the right, title and interest which the said
DONOR has in the above described real property,
together with all the buildings and improvements found
116
Id.
652 PROPERTY
“Art. 1183. Impossible conditions, those contrary to
good customs or public policy and those prohibited by law
shall annul the obligation which depends upon them. If the
obligation is divisible, that part thereof which is not affected
by the impossible or unlawful condition shall be valid.
“The condition not to do an impossible thing shall be
considered as not having been agreed upon. (1116a)”
Danguilan v. IAC
168 SCRA 22 (1988)
Domingo Melad owned a farm lot and a residential lot. He and his wife,
having no children of their own, had taken into their home as their ward the
spouses Felix Danguilan and Isidra Melad. The latter was Domingo’s niece.
The spouses Felix Danguilan and Isidra Melad lived with Domingo Melad
and his wife and helped Domingo with the cultivation of the farm. Thereafter,
Domingo executed a private instrument giving to the spouses Felix Danguilan
and Isidra Melad his two lots on the understanding that the latter would take
care of the grantor and would bury him upon his death, which obligation the
spouses fulfilled. On the question of whether the donations of the two lots were
valid considering that the same were not embodied in a public instrument, the
Court ruled —
“It is our view, considering the language of the two
instruments, that Domingo Melad did intend to donate the
properties to the petitioner, as the private respondent contends. We
do not think, however, that the donee was moved by pure liberality.
While truly donations, the conveyances were onerous donations
as the properties were given to the petitioner in exchange for his
obligation to take care of the donee for the rest of his life and
provide for his burial. Hence, it was not covered by the rule in
Article 749 of the Civil Code requiring donations of real properties
to be effected through a public instrument. The case at bar comes
squarely under the doctrine laid down in Manalo v. De Mesa (29
Phil. 495), where the Court held:
‘There can be no doubt that the donation in
question was made for a valuable consideration, since
the donors made it conditional upon the donees’ bearing
the expenses that might be occasioned by the death and
burial of the donor Placida Manalo, a condition and
obligation which the donee Gregorio de Mesa carried
out in his own behalf and for his wife Leoncia Manalo;
therefore, in order to determine whether or not said
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 653
DONATION
Nature of Donations
donation is valid and effective it should be sufficient
to demonstrate that, as a contract, it embraces the
conditions the law requires and is valid and effective,
although not recorded in a public instrument.’”
Roman Catholic Archbishop of Manila v. Court of Appeals
198 SCRA 300 (1991)
In 1930, the spouses Eusebio de Castro and Martina Rieta, executed a deed
of donation in favor of the Roman Catholic Archbishop of Manila covering a
parcel of land located at Kawit, Cavite. The deed of donation provides that the
donee shall not dispose or sell the property within a period of 100 years from
the execution of the deed of donation, otherwise a violation of such condition
would render ipso facto null and void the deed of donation and the property
would revert to the estate of the donors. In 1980, and while still within the
prohibited period, the Roman Catholic Bishop of Imus, sold the property to
spouses Florencio and Soledad Ignao. When the heirs of Eusebio Castro and
Martina Rieta learned about the sale, they filed an action for the nullification
of the deed of donation, rescission of the sale in favor of the spouses Ignao
and reconveyance of the property. When the case was elevated to the Supreme
Court, the Court declared the prohibition imposed on the donation as contrary
to public policy. Applying the provisions of Article 727 of the Code, the Court
further held that such condition shall be considered as not imposed. The Court
explained —
“The cause of action of private respondents is based on the
alleged breach by petitioners of the resolutory condition in the deed
of donation that the property donated should not be sold within a
period of one hundred (100) years from the date of execution of
the deed of donation. Said condition, in our opinion, constitutes an
undue restriction on the rights arising from ownership of petitioners
and is, therefore, contrary to public policy.
Donation, as a mode of acquiring ownership, results in
an effective transfer of title over the property from the donor to
the donee. Once a donation is accepted, the donee becomes the
absolute owner of the property donated. Although the donor may
impose certain conditions in the deed of donation, the same must
not be contrary to law, morals, good customs, public order and
public policy. The condition imposed in the deed of donation in
the case before us constitutes a patently unreasonable and undue
restriction on the right of the donee to dispose of the property
donated, which right is an indispensable attribute of ownership.
Such a prohibition against alienation, in order to be valid, must not
be perpetual or for an unreasonable period of time.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 655
DONATION
Nature of Donations
tance by the donee.” Before notice of the acceptance, therefore, the
offerer (donor) is not bound and may withdraw the offer of donation.
Such revocation will have the effect of preventing the perfection of the
donation, although it may not be known to the offeree (donee). The
power to revoke is implied in the criterion that no donation exists until
the acceptance is known. As the tie or bond springs from the meeting or
concurrence of the minds, since up to that moment, there exists only a
unilateral act, it is evident that he who takes it must have the power to
revoke it by withdrawing his proposition.120 In the same manner, the ac-
ceptance made by the offeree (donee) may be revoked before it comes
to the knowledge of the offeror (donor).121 Since donation is also a con-
tract, the pronouncement by the Court in Jardine Davies, Inc. v. Court
of Appeals,122 may also be applied: “For a contract to arise, the accep-
tance must be made known to the offeror. Accordingly, the acceptance
can be withdrawn or revoked before it is made known to the offeror.”
[137.2] Acceptance is Indispensable
It is explicit in Article 725 of the New Civil Code that acceptance
is necessary in a donation.123 Without acceptance, the donation is not
perfected.124 The rationale behind the requirement of acceptance is that
nobody is obliged to receive a benefit against his will.125
[137.3] Effects of Acceptance
A donation, as a mode of acquiring ownership, results in an
effective transfer of title over the property from the donor to the donee
and once a donation is accepted, the donee becomes the absolute owner
of the property donated,126 notwithstanding the condition imposed by
the donee.127 Once the donation is accepted, it is generally considered
120
Applying by analogy Laudico v. Arias, 43 Phil. 270.
121
Applying by analogy IV Tolentino, Civil Code, 1991 ed., 458.
122
333 SCRA 684, 693.
123
Vita v. Montanano, 194 SCRA 180, 190 (1991); Lagazo v. CA, 287 SCRA 18, 27.
124
See Art. 734, NCC.
125
Vito v. Montanano, supra, 190, citing II Tolentino, Civil Code, 1972 ed., 521.
126
Tanpingco . IAC, 207 SCRA 652, 657, citing Roman Catholic Archbishop of Manila v.
CA, 198 SCRA 300. See also Heirs of Cesario Velasquez v. CA, 324 SCRA 552; Heirs of Rosendo
Sevilla Florencio v. Heirs of Teresa Sevilla de Leon, 425 SCRA 447 (2003).
127
Quijada v. Court of Appeals, 299 SCRA 695 (1998).
654 PROPERTY
Certain provisions of the Civil Code illustrative of the
aforesaid policy may be considered applicable by analogy. Under
the third paragraph of Article 494, a donor or testator may prohibit
partition for a period which shall not exceed twenty (20) years.
Article 870, on its part, declares that the dispositions of the testator
declaring all or part of the estate inalienable for more than twenty
(20) years are void.
It is significant that the provisions therein regarding a testator
also necessarily involve, in the main, the devolution of property by
gratuitous title hence, as is generally the case of donations, being
an act of liberality, the imposition of an unreasonable period of
prohibition to alienate the property should be deemed anathema
to the basic and actual intent of either the donor or testator. For
that reason, the regulatory arm of the law is or must be interposed
to prevent an unreasonable departure from the normative policy
expressed in the aforesaid Articles 494 and 870 of the Code.
In the case at bar, we hold that the prohibition in the deed
of donation against the alienation of the property for an entire
century, being an unreasonable emasculation and denial of an
integral attribute of ownership, should be declared as an illegal or
impossible condition within the contemplation of Article 727 of the
Civil Code. Consequently, as specifically stated in said statutory
provision, such condition shall be considered as not imposed.
No reliance may accordingly be placed on said prohibitory
paragraph in the deed of donation. The net result is that, absent
said proscription, the deed of sale supposedly constitutive of the
cause of action for the nullification of the deed of donation is not
in truth violative of the latter hence, for lack of cause of action, the
case for private respondents must fail.”
Art. 734. The donation is perfected from the moment the donor
knows of the acceptance by the donee. (623)
§ 137. Perfection of Donation
[137.1] When Perfected
Like any other contract, donation also follows the theory of cog-
nition.119 Thus, Article 734 of the New Civil Code provides that “the
donation is perfected from the moment the donor knows of the accep-
119
Lagazo v. CA, 287 SCRA 18, 27.
656 PROPERTY
irrevocable.128 As observed by Manresa,129 upon acceptance by the
donee, the donor can no longer withdraw, and he can be compelled
to comply with his offering or to deliver the things he wanted to
donate.130 Consequently, it may not be revoked unilaterally or by the
sole and arbitrary will of the donor. The donation, however, may be
made revocable upon the fulfillment of resolutory conditions, or may be
revoked only for the reasons provided in Articles 760, 764 and 765 of the
Civil Code.131 As explained in Bautista, et al. v. Sabiniano,132 except “in
the instances expressly provided by law, such as the subsequent birth of
children of the donor, failure by the donee to comply with the conditions
imposed, ingratitude of the donee and reduction of the donation in the
event of inofficiousness thereof, a donation is irrevocable.”
Quijada v. Court of Appeals
299 SCRA 695
In 1956, Trinidad Vda. de Quijada, together with her sisters and a
brother executed a deed of conditional donation over a two-hectare parcel of
land in favor of the Municipality of Talacogon, the condition being that the
parcel of land shall be used solely and exclusively as part of the campus of the
proposed provincial high school in Talacogon. Apparently, Trinidad remained
in possession of the parcel of land despite the donation. In 1962, Trinidad sold
one hectare of the subject land to Regalado Mondejar. Subsequently, Trinidad
verbally sold the remaining one hectare to Regalado Mondejar without the
benefit of a written deed of sale and evidenced solely by receipts of payment.
In 1987, the proposed provincial high school having failed to materialize, the
Sangguniang Bayan of the Municipality of Talacogon enacted a resolution
reverting the two parcels of land back to the donors. In the meantime, Regalado
Mondejar sold portions of the land to several buyers. In 1988, the children of
the late Trinidad Vda. de Quijada filed an action for the recovery of the two
parcels of land against Regalado Mondejar and the other transferees of the
subject property. In ruling for the defendants, the Court explained —
The donation made on April 5, 1956 by Trinidad Quijada
and her brother and sisters was subject to the condition that the
donated property shall be “used solely and exclusively as a part of
128
Vda. de Arceo v. Court of Appeals, 185 SCRA 489, cited in Quilala v. CA, 371 SCRA
311.
129
5 Manresa 88.
130
Concurring opinion of J. Antonio, 78 SCRA 245, 266-267.
131
Id.
132
92 Phil. 245, 249.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP
DONATION
Nature of Donations
the campus of the proposed Provincial High School in Talacogon.”
The donation further provides that should “the proposed Provincial
High School be discontinued or if the same shall be opened but for
some reason or another, the same may in the future be closed”
the donated property shall automatically revert to the donor. Such
condition, not being contrary to law, morals, good customs, public
order or public policy was validly imposed in the donation.
When the Municipality’s acceptance of the donation was
made known to the donor, the former became the new owner of
the donated property — donation being a mode of acquiring and
transmitting ownership — notwithstanding the condition imposed
by the donee. The donation is perfected once the acceptance by
the donee is made known to the donor. Accordingly, ownership is
immediately transferred to the latter and that ownership will only
revert to the donor if the resolutory condition is not fulfilled.
In this case, that resolutory condition is the construction of
the school. It has been ruled that when a person donates land to
another on the condition that the latter would build upon the land
a school, the condition imposed is not a condition precedent or
a suspensive condition but a resolutory one. Thus, at the time of
the sales made in 1962 towards 1968, the alleged seller (Trinidad)
could not have sold the lots since she had earlier transferred
ownership thereof by virtue of the deed of donation. So long as
the resolutory condition subsists and is capable of fulfillment,
the donation remains effective and the donee continues to be the
owner subject only to the rights of the donor or his successors-in-
interest under the deed of donation. Since no period was imposed
by the donor on when must the donee comply with the condition,
the latter remains the owner so long as he has tried to comply with
the condition within a reasonable period. Such period, however,
became irrelevant herein when the donee-Municipality manifested
through a resolution that it cannot comply with the condition of
building a school and the same was made known to the donor.
Only then — when the non-fulfillment of the resolutory condition
was brought to the donor’s knowledge — that ownership of the
donated property reverted to the donor as provided in the automatic
reversion clause of the deed of donation.
The donor may have an inchoate interest in the donated
property during the time that ownership of the land has not reverted
to her. Such inchoate interest may be the subject of contracts
including a contract of sale. In this case, however, what the donor
sold was the land itself which she no longer owns. It would have
DIFFERENT MODES OF ACQUIRING OWNERSHIP
DONATION
Persons Who May Give or Receive a Donation
reasonableness and justness of the condition which the donor
has the right to impose as owner thereof. Moreover, the objects
referred to as outside the commerce of man are those which cannot
be appropriated, such as the open seas and the heavenly bodies.
xxx xxx xxx
[137.4] Manner and Form of Acceptance
The manner and form of acceptance, together with the formalities
required of the donation, are discussed in infra §§ 139.2 and 140.
[137.5] Time For Making Acceptance
Article 746 of the New Civil Code requires that the “acceptance
must be made during the lifetime of the donor and of the donee.” This
article, however, must be read in conjunction with the provisions of
Articles 734 and 1323 of the New Civil Code. As discussed in supra §
137.1, the Civil Code follows the theory of cognition even insofar as
donations are concerned pursuant to Article 734 which provides that
“the donation is perfected from the moment the donor knows of the
acceptance by the donee.” Upon the death of either the donor or the donee
prior to the perfection of the donation, the offer of donation, however,
becomes ineffective. This is clear from the provision of Article 1323
of the New Civil Code which states that “an offer becomes ineffective
upon the death, civil interdiction, insanity, or insolvency of either party
before acceptance is conveyed.” Note that the provisions of Article
1323 likewise applies to donations in view of Article 732 which makes
applicable the provisions on obligations and contracts to donations in
a suppletory manner. Such being the case, an acceptance made by the
donee during the lifetime of both the donor and the donee will not result
in a perfected donation if prior to the donor gaining knowledge of such
acceptance, either him (the donor) or the donee dies.
Chapter 2
PERSONS WHO MAY GIVE OR RECEIVE
A DONATION
Art. 735. All persons who may contract and dispose of their property
may make a donation. (624)
657 658 PROPERTY
been different if the donor-seller sold her interests over the property
under the deed of donation which is subject to the possibility of
reversion of ownership arising from the non-fulfillment of the
resolutory condition.
xxx xxx xxx
Be that at it may, there is one thing which militates against
the claim of petitioners. Sale, being a consensual contract, is per-
fected by mere consent, which is manifested the moment there is
a meeting of the minds as to the offer and acceptance thereof on
three (3) elements: subject matter, price and terms of payment of
the price. Ownership by the seller on the thing sold at the time
of the perfection of the contract of sale is not an element for its
perfection. What the law requires is that the seller has the right to
transfer ownership at the time the thing sold is delivered. Perfec-
tion per se does not transfer ownership which occurs upon the ac-
tual or constructive delivery of the thing sold. A perfected contract
of sale cannot be challenged on the ground of non-ownership on
the part of the seller at the time of its perfection; hence, the sale is
still valid.
The consummation, however, of the perfected contract is
another matter. It occurs upon the constructive or actual delivery
of the subject matter to the buyer when the seller or her successors-
in-interest subsequently acquires ownership thereof. Such
circumstance happened in this case when petitioners — who are
Trinidad Quijada’s heirs and successors-in-interest — became the
owners of the subject property upon the reversion of the ownership
of the land to them. Consequently, ownership is transferred to
respondent Mondejar and those who claim their right from him.
Article 1434 of the New Civil Code supports the ruling that the
seller’s “title passes by operation of law to the buyer.” This rule
applies not only when the subject matter of the contract of sale is
goods, but also to other kinds of property, including real property.
There is also no merit in petitioners’ contention that since
the lots were owned by the municipality at the time of the sale,
they were outside the commerce of men under Article 1409(4) of
the NCC; thus, the contract involving the same is inexistent and
void from the beginning. However, nowhere in Article 1409(4) is
it provided that the properties of a municipality, whether it be those
for public use or its patrimonial property are outside the commerce
of men. Besides, the lots in this case were conditionally owned by
the municipality. To rule that the donated properties are outside
the commerce of men would render nugatory the unchallenged
659 660 PROPERTY
Art. 736. Guardians and trustees cannot donate the property en-
trusted to them. (n)
Art. 737. The donor’s capacity shall be determined as of the time of
the making of the donation. (n)
Art. 738. All those who are not specially disqualified by law therefor
may accept donations. (625)
Art. 739. The following donations shall be void:
(1) Those made between persons who were guilty of adultery or
concubinage at the time of the donation;
(2) Those made between persons found guilty of the same crimi-
nal offense, in consideration thereof;
(3) Those made to a public officer or his wife, descendants and
ascendants, by reason of his office.
In the case referred to in No. 1, the action for declaration of nullity
may be brought by the spouse of the donor or donee; and the guilt of the
donor and donee may be proved by preponderance of evidence in the
same action. (n)
Art. 740. Incapacity to succeed by will shall be applicable to dona-
tions inter vivos. (n)
Art. 741. Minors and others who cannot enter into a contract may
become donees but acceptance shall be done through their parents or
legal representatives. (626a)
Art. 742. Donations made to conceived and unborn children may be
accepted by those persons who would legally represent them if they were
already born. (627)
Art. 743. Donations made to incapacitated persons shall be void,
though simulated under the guise of another contract or through a person
who is interposed. (628)
Art. 744. Donations of the same thing to two or more different do-
nees shall be governed by the provisions concerning the sale of the same
thing to two or more different persons. (n)
Art. 745. The donee must accept the donation personally, or through
an authorized person with a special power for the purpose, or with a gen-
eral and sufficient power; otherwise, the donation shall be void. (630)
Art. 746. Acceptance must be made during the lifetime of the donor
and of the donee. (n)
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 661
DONATION
Persons Who May Give or Receive a Donation
§ 138. Capacity to Make Donations
[138.1] Who May Donate
To be a donor, the law requires that a person must be in possession
of the capacity to contract and the capacity to dispose of his property133
and is not specifically prohibited to make a donation.134 The provisions
of Article 735 on capacity to donate must be interpreted, however, in
conjunction with the provisions of Article 751 of the Civil Code which
provides, as follows:
“Art. 751. Donations cannot comprehend future prop-
erty.
By future property is understood anything which the
donor cannot dispose of at the time of the donation. (635)”
Future property includes all property that belongs to others at the
time the donation is made, although it may or may not later belong to
the donor. It cannot be donated, because it is not at present his property,
and he cannot dispose of it at the moment of making the donation.135
In other words, the law requires that the donor be the owner of the
property donated at the time of the donation, otherwise, such donation
is void, even if accepted, following the rule that “no one can give what
he does not have” — nemo dat quod non habet.
Donation, as a contract, must be distinguished from the contract of
sale. Article 1459 of the Civil Code, on the contract of sale, provides that
“the thing must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered.” In other words, ownership
by the seller of the thing sold at the time of the perfection of the contract
of sale is not an element for its perfection.136 What the law requires is that
the seller has the right to transfer ownership at the time the thing sold is
delivered.137 Perfection per se does not transfer ownership which occurs
upon the actual or constructive delivery of the thing sold.138 A perfected
contract of sale cannot be challenged on the ground of non-ownership
on the part of the seller at the time of its perfection; hence, the sale is
133
Art. 735, NCC.
134
See Art. 739, NCC and Art. 87, FC.
135
See II Tolentino, Civil Code, 1992 ed., 561.
136
Quijada v. Court of Appeals, 299 SCRA 695, 704.
137
Id.
138
Id.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 663
DONATION
Persons Who May Give or Receive a Donation
to be determined at the time of acceptance of the donation;
but the Congress amended the draft by providing that such
determination is to be made at the time of making the donation.
The Commission draft was not accurate, juridically speaking,
because it is not the acceptance that perfects the donation; it
is the donor’s knowledge of such acceptance which makes
the donation effective. The Congress may be considered as
having made the amendment in order to correct the juridical
error in the Commission draft. The phrase “making of the
donation,” used by the Congress in the present article,
should therefore be intended to express the view of Manresa
that capacity must exist at the time of the concurrence of the
wills of the donor and the donee.
“Considered in this light, ‘making of the donation’
must be held to mean ‘perfection of the donation,’ for it is
really upon perfection that the donation is legally made. The
phrase ‘making of the donation’ should thus be construed,
not literally, but in a legal or juridical sense. In other words,
the capacity of the donor must be determined as of the
perfection of the donation.”
Indeed, the literal interpretation of the term “making of the
donation” embodied under the first view expressed above cannot be
sustained. Under Article 1332 of the New Civil Code, an offer becomes
ineffective upon the death, civil interdiction, insanity, or insolvency of
either party before acceptance is conveyed. As explained earlier, this
article likewise applies to donations in view of Article 732 which makes
applicable the provisions on obligations and contracts to donations in
a suppletory manner. Applying the provisions of Article 1332, if the
donor is capacitated at the time he makes the donation his subsequent
incapacity by reason of civil interdiction, insanity or insolvency before
acceptance is conveyed will render the offer ineffective, thus preventing
the perfection of the donation. Following the provisions of Article 734
of the New Civil Code, the donation is not yet perfected at any time
before acceptance is conveyed. Hence, if the offer becomes ineffective
before acceptance is conveyed, such supervening event will prevent
the meeting of the offer and the acceptance — thus preventing the
perfection of the donation.
662 PROPERTY
still valid.139 In donation, however, the law requires that the donor must
be the owner of the thing donated at the time of the donation since the
latter cannot comprehend “anything which the donor cannot dispose of
at the time of the donation.”140 This must be the rule because donation,
under the Civil Code, is a mode of acquiring ownership.141 As a mode of
acquiring ownership, it results in an effective transfer of title over the
property from the donor to the donee and once a donation is accepted,
the donee becomes the absolute owner of the property donated.142
[138.2] Determination of Donor’s Capacity
In the original draft of the New Civil Code, the capacity of the
donor was to be determined at the time of acceptance of the donation;
but the Congress amended the original draft by providing in the present
Article 737 of the Civil Code that such determination is to be made
at “the time of the making of the donation.” But what exactly is the
meaning of the phrase “as of the time of the making of the donation”?
Literally, the donation is made when the donor executes the
instrument of donation or tells the donee that he is giving the property
by way of donation.143 Thus, there is a view to the effect that the donor’s
capacity is to be determined only at this point regardless of his capacity
at the time the acceptance is made known to him.144 Under this view, if
the donor is capacitated at the time he makes the donation his subsequent
incapacity does not affect the validity of the donation and, it will be
perfected even though he is incapacitated at the time of acceptance.145
This view, however, runs in conflict with Article 734, which provides
that “the donation is perfected from the moment the donor knows of the
acceptance by the donee.” For this reason, the late Senator Tolentino
suggested that the term “making of the donation” must be held to mean
“perfection of the donation.” He explained —
“When the Code Commission originally drafted the
present article, it provided that that the donor’s capacity was
139
Id.
140
See Art. 751, NCC.
141
See Art. 712, NCC.
142
Roman Catholic Archbishop of Manila v. CA, 198 SCRA 300, 309.
143
II Tolentino, Civil Code, 1992 ed., 545.
144
II Caguioa, Civil Code, 1966 ed., 387.
145
Id., 388.
664 PROPERTY
[138.3] Legal Impossibility of Double Donations
Article 744 of the Civil Code provides, as follows:
“Art. 744. Donations of the same thing to two or
more different donees shall be governed by the provisions
concerning the sale of the same thing to two or more different
persons. (n)”
The above-quoted provision seem to suggest that there can be a
case of “double donations” to different donees with opposing interest.
This is not, however, legally possible in this jurisdiction. The Separate
(Concurring) Opinion of Justice Vitug in Hemedes v. Court of Appeals146
is illuminating —
“…a donation would not be legally feasible if the donor
has neither ownership nor real right that he can transmit to
the donee. Unlike an ordinary contract, a donation, under
Article 712, in relation to Article 725 of the Civil Code is
also a mode of acquiring and transmitting ownership and
other real rights by an act of liberality whereby a person
disposes gratuitously that ownership or real right in favor of
another who accepts it. It would be an inefficacious process
if the donor would have nothing to convey at the time it is
made.
Article 744 of the Civil Code states that the ‘donation
of the same thing to two or more different donees shall be
governed by the provisions concerning the sale of the same
thing to two or more persons,’ i.e., by Article 1544 of the
same Code, as if so saying that there can be a case of ‘double
donations’ to different donees with opposing interest. Article
744 is a new provision, having no counterpart in the old Civil
Code, that must have been added unguardedly. Being a mode
of acquiring and transmitting ownership or other real rights,
a donation once perfected would deny the valid execution
of a subsequent inconsistent donation (unless perhaps if the
prior donation has provided a suspensive condition which
still pends when the later donation is made).
146
316 SCRA 347, 376-377 (1999).
 DIFFERENT MODES OF ACQUIRING OWNERSHIP
DONATION
Persons Who May Give or Receive a Donation
In sales, Article 1544, providing for the rules to resolve
the conflicting rights of two or more buyers, is appropriate
since the law does not prohibit but, in fact, sanctions the
perfection of a sale by a non-owner, such as the sale of future
things or a short sale, for it is only at the consummation stage
of the sale, i.e., delivery of the thing sold, that ownership
would be deemed transmitted to the buyer. In the meanwhile,
a subsequent sale to another of the same thing by the same
seller can still be a legal possibility. This rule on double sales
finds no relevance in an ordinary donation where the law
requires the donor to have ownership of the thing or the real
right he donates at the time of its perfection (see Article 750,
New Civil Code) since a donation constitutes a mode, not
just a title in an acquisition and transmission of ownership.”
§ 139. Capacity of the Donee
[139.1] Juridical Capacity, Sufficient
The law does not require that the donee must possess capacity to
act, which is defined as “the power to do acts with legal effect,”147 it
being sufficient that he must possesses juridical capacity or “the fitness
to be the subject of legal relations.” So long as the donee possesses
juridical capacity and not specially disqualified by law, he may accept
donations.148 Stated otherwise, all persons, whether natural or juridical,
who are not specially disqualified by law may become donees. Hence,
minors,149 persons who cannot enter into a contract150 and even conceived
and unborn children151 may become donees.
A conceived child, although as yet unborn, is given by law a
provisional personality of its own for all purposes favorable to it.152
Since donation is favorable to the foetus, provided it be pure or simple
in nature, the foetus has the juridical personality to become a donee. Its
personality, however, is provisional or conditional in character153 such
147
See Art. 37, NCC.
148
Art. 738, NCC.
149
Art. 741, NCC.
150
Id.
151
Art. 742, NCC. See also Quimiguing v. Icao, 34 SCRA 132, 134.
152
Art. 40, NCC; Quimiguing v. Icao, supra.
153
Quimiguing v. Icao, supra.
DIFFERENT MODES OF ACQUIRING OWNERSHIP
DONATION
Persons Who May Give or Receive a Donation
The law further requires that the “the donee must accept the
donation personally, or through an authorized person with a special
power for the purpose, or with a general and sufficient power;”159
otherwise, “the donation shall be void.”160 In other words, a donation may
not be accepted by a person who is not authorized to do so, either by the
donee or by law. Such unauthorized acceptance may not even give rise
to an unenforceable contract. This is the necessary consequence of the
provision of article 745 of the New Civil Code. Note that unenforceable
contracts are subject to ratification,161 the effects of which retroact to
the time that the contract was entered without authority and not merely
from the time of its ratification.162 In a donation which is not accepted
in the manner provided for in Article 745, however, the unauthorized
acceptance will not result in a perfected contract of donation, be it
unenforceable or otherwise. In such a situation, there remains an offer
of donation which may be accepted by the donee personally or through
an authorized person with a special power for the purpose, or with a
general and sufficient power, unless the offer (donation) was withdrawn
or revoked prior to such acceptance. But in such a situation, the effects of
the perfection of the donation, i.e., transfer of ownership from the donor
to the donee, will be produced only from the time that the donation is
accepted in the manner provided for in Article 745.
While minors, other incapacitated persons and conceived and un-
born children may become donees, the law requires that the acceptance
of the donation must be made through their parents or legal representa-
tives.163 Notwithstanding the language of Article 741 of the New Civil
Code, however, it is still believed that if what is donated is a person-
al property the value of which does not exceed five thousand pesos
(P5,000) and the donation is pure, a minor or incapacitated person re-
ferred to in said article may validly receive such donation when made
orally and simultaneously delivered.164 However when the donation re-
quires a written acceptance, whether in a private or public instrument,
the provisions of Article 741 should strictly apply.165
159
Art. 745, NCC.
160
Id.
161
See Arts. 1317 and 1403, NCC.
162
See IV Tolentino, Civil Code, 1991 ed., 444.
163
Arts. 741 and 742, NCC.
164
See 5 Manresa, 5th ed., 99; II Tolentino, Civil Code, 1992 ed., 550.
165
Id.
665 666 PROPERTY
that it is required to be born later with the conditions specified in Article
41 of the New Civil Code.154 If the foetus had an intra-uterine life of at
least seven (7) months, it is sufficient that it is alive after the cutting of
the umbilical cord.155 The foetus will then be considered a person even
if it eventually dies. In such situation, the donation will remain valid.
But if the foetus is already dead at the time of compete delivery, its
personality disappears which will render the donation invalid for lack
of a donee. If the foetus, on the other hand, had an intra-uterine life of
less than seven months, it is not deemed born if it dies within twenty-
four hours after its complete delivery.156 In such a case, the donation will
become invalid for lack of a donee. But if the foetus survives for at least
twenty-four hours, the foetus will then be considered a person even if it
eventually dies. In such situation, the donation will remain valid.
[139.2] Manner of Acceptance
The offeror (donor) has a right to prescribe in his offer (donation)
any conditions as to time, place, quantity, mode of acceptance, or other
matters which it may please him to insert in and make a part thereof,
and the acceptance, to conclude the agreement, must in every respect
meet and correspond with the offer, neither falling short of, nor going
beyond, the terms proposed, but exactly meeting them at all points and
closing with them just as they stand,157 and, in the absence of such an
acceptance, subsequent words or acts of the parties cannot create a
contract.158 This is clearly stated in Article 1321 of the Code:
“Art. 1321. The person making the offer may fix the
time, place, and manner of acceptance, all of which must be
complied.”
However, with respect to the forms of acceptance of donations,
the provisions of Articles 748 and 749 of the New Civil Code are
mandatory in character; hence, the offeror (donor) may not prescribe
different formalities in accepting a donation other than those provided
in said articles.
154
Art. 40, NCC.
155
Art. 41, NCC.
156
Id.
157
Peerless Cas. Co. v. Housing Authority of Hazelhurst, Ga., C.A. Ga., 228 F. 2d 376.
158
N.Y. — Poel v. Brunswick-Balke-Collender Co., 110 N.E. 619, 216 N.Y. 310.
667 668 PROPERTY
[139.3] Persons Disqualified to Become Donees
Persons who are disqualified to become donees are those to whom
donations cannot be made by express provisions of law. Hence, the
following persons are disqualified to become donees:
(1) Those who were guilty of adultery or concubinage at the
time of the donation;166
(2) Those who were found guilty of the same criminal offense,
if the donation is made in consideration thereof;167
(3) Public officers or their spouses, descendants and ascendants,
if the donation is made by reason of their office;168
(4) Those who are incapacitated to succeed by will;169
(5) The spouses, if the donation is between them and made
during the marriage, except moderate ones given on the
occasion of any family rejoicing;170
(6) Those who are living together as husband and wife without
a valid marriage, if the donation is between them and made
during their cohabitation.171
[139.3.1] Persons Guilty of Adultery or Concubinage
Donations made between persons who were guilty of adultery or
concubinage at the time of the donation shall be void.172 In this connection,
no previous criminal conviction is necessary since the guilt of the donor
and the donee may be proved by preponderance of evidence in a civil
action for declaration of nullity of the donation.173
The crimes of adultery and concubinage are punished under
Articles 333 and 334, respectively, of the Revised Penal Code. Under
these provisions, a single act of sexual intercourse on the part of the
166
Art. 739(1), NCC.
167
Art. 739(2), NCC.
168
Art. 739(4), NCC.
169
Art. 1027(1), (2), (3), (5) and (6), NCC, in relation to Art. 740, NCC.
170
Art. 87, FC.
171
Art. 87, FC.
172
Art. 739(1), NCC.
173
Last paragraph, Art. 739, NCC.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 669
DONATION
Persons Who May Give or Receive a Donation
wife with a man other than her husband always constitutes adultery174
while a single act of sexual intercourse on the part of the husband with
a woman other than his spouse will not necessarily constitute the crime
concubinage.175 For the crime of concubinage to be committed, it is
required that the husband must either: (1) keep a mistress in the conjugal
dwelling; (2) have sexual intercourse, under scandalous circumstances,
with a woman who is not his wife; or (3) cohabit with her in any other
place.176 While the husband may not be guilty of concubinage for a single
act of sexual intercourse, a donation in favor of the paramour may still
be considered invalid if the same is made in consideration of the sexual
intercourse since contracts whose cause, object or purpose is contrary to
law, morals, good customs, public order or public policy are void from
the very beginning.177
Article 739 of the New Civil Code, however, does not apply to
cases where the alleged concubine did not know that the man was
married.178 To be guilty of concubinage, the woman must know the
man to be married.179 The same principle will likewise apply to the man
accused of committing the crime of adultery.180
[139.3.2] Persons Guilty of Same Criminal Offense
Paragraph 2 of Article 739 contemplates of a principal by
inducement and a principal by direct participation. If a donation is
made between these two persons in consideration of the commission
of a crime, such donation shall be void. In paragraph 2 of Article 739,
unlike in paragraph 1, a previous criminal conviction is necessary since
the law uses the phrase “those x x x found guilty of the same criminal
offense.” In addition, the last paragraph of Article 739 refers only to
paragraph 1 when it authorizes the proving of the guilt of the donor and
donee by mere preponderance of evidence.
174
Art. 333, RPC.
175
Art. 334, RPC.
176
Id.
177
Art. 1409(1), NCC.
178
Social Security System v. Davao, et al., 17 SCRA 863 (1966).
179
Id., Note No. (1), citing Viada y Vilaseca, Vol. 5, p. 217.
180
Del Prado v. Dela Fuente, 28 Phil. 23. See also Reyes, Revised Penal Code, 13th ed.,
pp. 767-768.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 671
DONATION
Persons Who May Give or Receive a Donation
stipulations between the parties,185 a conviction of concubinage,186 or the
existence of illegitimate children.187
[139.3.6] Persons Disqualified to Succeed by Will
By express provision of Article 740 of the New Civil Code, those
who are incapacitated to succeed by will are likewise disqualified to
become donees in donation inter vivos. Articles 1027 and 1032 of the
New Civil Code enumerate those persons who are incapacitated to
succeed by will. However, the disqualifications contemplated in Article
740 extend only to those persons who are incapable of succeeding by
virtue of Article 1027 of the Civil Code and do not extend to those
persons disqualified under Article 1032 of the same Code. As explained
by the late Senator Tolentino, a donation made to a person who
falls under the provisions of Article 1032 would be valid, because a
testamentary provision made in favor of such a person after the testator
has knowledge of the act of unworthiness would constitute a pardon
under Article 1033.188 On the other hand, if the donation has already
been made when the cause of unworthiness occurs, the donation is not
revoked, because donations inter vivos are revoked only by the causes
mentioned in Articles 760, 764 and 765.189 With respect to Article 1027,
it is quite obvious that paragraph no. (4), which speaks of “attesting
witnesses,” is not applicable to donations because no attesting witnesses
are required in donation inter vivos. Hence, in relation to Article 1027,
the following persons are disqualified to become donees under the
provisions of Article 740 of the Civil Code:
(1) The priest who heard the confession of the (donor) during
his last illness, or the minister of the gospel who extended spiritual aid
to him during the same period;
(2) The relatives of such priest or minister of the gospel within
the fourth degree, the church, order, chapter, community, organization,
or institution to which such priest or minister may belong;
185
The Insular Life Company, Ltd. v. Ebrado, 80 SCRA 181 (1977); Matabuena v. Cer-
vantes, 38 SCRA 284 (1971).
186
Calimlim-Canullas v. Fortun, 129 SCRA 675 (1984).
187
People v. Villagonzalo, 238 SCRA 215 (1994); Bienvenido v. Court of Appeals, 237
SCRA 676 (1994).
188
See II Tolentino, Civil Code, 1992 ed., 550.
189
Id.
670 PROPERTY
[139.3.3] Public Officers, His Spouse, Ascendants and Des-
cendants
When the donation is made to a public officer or his or her spouse,
descendants or ascendants, the donation is likewise void.181 While para-
graph 3 of Article 739 refers only to the “wife,” this should be construed
as referring to the “spouse” so as to include the husband.
[139.3.4] Spouses Inter Se During Marriage
Article 87 of the Family Code prohibits the spouses from donating
to each other during the marriage. Any such donation between the
spouses during the marriage, whether direct or indirect, is considered
void, and the prohibition applies whatever may be the property regime
governing the spouses. The rule, however, is not absolute, as moderate
gifts between the spouses given on the occasion of any family rejoicing
are considered valid.
[139.3.5] Persons Cohabiting as Husband and Wife
The prohibition in Article 87 of the Family Code also applies to
persons living together as husband and wife without a valid marriage.
In other words, donations between persons who are living together
as husband and wife are also void. For such prohibition to apply, it is
necessary, however, to prove that the donor and the donee are living
together as husband and wife. In Bitangcor v. Tan,182 the Court held
that the term “cohabitation” or “living together as husband and wife”
means not only residing under one roof, but also having repeated
sexual intercourse. Cohabitation, of course, means more than sexual
intercourse, especially when one of the parties is already old and may
no longer be interested in sex.183 At the very least, cohabitation is the
public assumption by a man and a woman of the marital relation, and
dwelling together as man and wife, thereby holding themselves out to the
public as such. Secret meetings or nights clandestinely spent together,
even if often repeated, do not constitute such kind of cohabitation;
they are merely meretricious.184 In this jurisdiction, the Supreme Court
has considered as sufficient proof of common-law relationship the
181
Art. 739(3), NCC.
182
112 SCRA 113 (1982), cited in Arcaba v. Vda. de Batocael, 370 SCRA 414 (2001).
183
Arcaba v. Vda. de Batocael, supra.
184
Id.
672 PROPERTY
(3) A guardian with respect to (donations) made by a ward in his
favor before the final accounts of the guardianship have been approved,
even if the (donor) should die after the approval thereof; nevertheless,
any (donations) made by the ward in favor of the guardian when the
latter is his ascendant, descendant, brother, sister, or spouse, shall be
valid;
(4) Any physician, surgeon, nurse, health officer or druggist
who took care of the (donor) during his last illness; and
(5) Individuals, associations and corporations not permitted by
law to (receive donations).
Art. 747. Persons who accept donations in representation of others
who may not do so by themselves, shall be obliged to make the notifica-
tion and notation of which Article 749 speaks. (631)
Art. 748. The donation of a movable may be made orally or in writ-
ing.
An oral donation requires the simultaneous delivery of the thing or
of the document representing the right donated.
If the value of the personal property donated exceeds Five thousand
pesos, the donation and the acceptance shall be made in writing. Other-
wise, the donation shall be void. (632a)
Art. 749. In order that the donation of an immovable may be valid, it
must be made in a public document, specifying therein the property do-
nated and the value of the charges which the donee must satisfy.
The acceptance may be made in the same deed of donation or in
a separate public document, but it shall not take effect unless it is done
during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall
be notified thereof in an authentic form, and this step shall be noted in
both instruments. (633)
§ 140. Formalities in Donation
[140.1] In General
While donation is considered as a contract190 and, as a rule,
contracts are obligatory in whatever form they may have been entered
190
See discussions in supra § 1.4.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 673
DONATION
Persons Who May Give or Receive a Donation
into,191 donation, however, is a solemn contract which requires form
for purposes of validity. In other words, if the formalities required in
Articles 748 and 749 are not followed the donation shall be void.
[140.2] Applicability of Articles 748 and 749, NCC
As explained in supra § 136.2.4, the formalities provided for in
Articles 748 and 749 are applicable only to donations inter vivos and not
to transfer mortis causa, the latter being governed by the formalities for
the validity of wills. In supra § 136.3.3, however, it is further clarified
that the formalities required in Articles 748 and 749 apply only to
simple and remuneratory donations and find no application to onerous
ones, the latter being governed by the rules on contracts.
Following the provisions of Article 83 of the Family Code,192
the formalities of donations propter nuptias are likewise governed by
Articles 748 and 749 of the Civil Code. The concept of donation propter
nuptias is limited to donations “made before the celebration of the
marriage, in consideration of the same, and in favor of one or both of
the future spouses.”193 Thus, for a donation to be considered as donation
propter nuptias, the following requisites must be present: (1) it must
be made before the celebration of the marriage; (2) it must be made in
consideration of the marriage; and (3) it must be made in favor of one
or both of the future spouses. In this kind of donation, it is essential that
the donee or donees be either of the future spouses or both of them,
although the donor may either be one of the future spouses or a third
person. Therefore, the following donations are not donations propter
nuptias: (1) those made in favor of the spouses after the celebration of
marriage; (2) those executed in favor of the future spouses but not in
consideration of the marriage; and (3) those granted to persons other
than the spouses even though they may be founded on the marriage.194
[140.3] Form of Donations of Personal Property
The formalities of donations involving personal properties are
governed by Article 748 of the New Civil Code. Depending on its
191
Art. 1356, NCC.
192
Art. 83 of the Family Code provides: “These donations are governed by the rules on
ordinary donations established in Title III of Book III of the Civil Code, insofar as they are not
modified by the following articles.”
193
Art. 82, FC.
194
Serrano v. Solomon, G.R. No. L-12093, June 29, 1959, citing 6 Manresa 232.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 675
DONATION
Persons Who May Give or Receive a Donation
to P3,297,800 as well as its acceptance should have been in
writing. It was not. Hence, the donation is invalid for non-
compliance with the formal requisites prescribed by law.”198
[140.4] Form of Donations of Real Property
If what is to be donated is a real property, the law mandates that:
(1) both the donation and the acceptance must be embodied in a public
instrument, although not necessarily embodied in a single document;199
(2) the real property donated and the value of the charges which the
donee is required to satisfy must be specified in the deed of donation;200
(3) if the acceptance is embodied in a separate public document, the
donor shall be notified thereof in an authentic form and such step shall
be noted in both instruments of donation and acceptance.201 All the
foregoing requisites must be complied with, otherwise, the donation
shall be void.202
[140.4.1] Donation and Acceptance Must Be in Public
Document
In order that the donation of an immovable property may be valid,
it must be made in a public document203 regardless of the value of the
property. It is clear from Article 749 that a transfer of real property from
one person to another cannot take effect as a donation unless embodied
in a public document.204 And since donation is perfected only from the
moment the donor knows of the acceptance by the donee,205 acceptance
of the donation by the donee is, therefore, indispensable; its absence
makes the donation null and void.206 When applied to a donation of an
immovable property, the law further requires that the acceptance must
be made in the same deed of donation or in a separate public document.207
198
Id., at pp. 590-591.
199
Art. 749, 1st and 2nd pars., NCC.
200
Art. 749, 2nd par., NCC.
201
Art. 749, 3rd par., NCC.
202
Art. 749, NCC.
203
Heirs of Rosendo Sevilla Florencio v. Heirs of Teresita Sevilla de Leon, 425 SCRA 447
(2003).
204
Heirs of Salud Dizon Salamat v. Tamayo, 298 SCRA 313, 317 (1998).
205
Art. 734, NCC.
206
Lagazo v. Court of Appeals, 287 SCRA 18, 27.
207
Art. 749, FC.
674 PROPERTY
value, the donation of a personal property may be made either orally
or in writing.
If the value of the personal property does not exceed five thousand
pesos (P5,000.00), the donation may be made orally subject, however,
to the requirement that there must be simultaneous delivery of the
thing or of the document representing the right donated.195 If there is
no simultaneous delivery, the donation is void. There is nothing in
the law, however, which prevents the donation from being reduced in
writing. If the donation is in writing, note that there is no requirement of
simultaneous delivery and the law does not require that the acceptance
must also be in writing. As such, if the value of the personal property to
be donated does not exceed P5,000 and the donation is made in writing,
the acceptance may be made either orally or in writing, expressly or
tacitly, and without need of simultaneous delivery.
If the value of the personal property to be donated exceeds
P5,000.00, the law mandates that both the donation and the acceptance
must be in writing, otherwise, the donation shall be void.196 Note that
the law simply requires the donation and the acceptance to be in written
form and such requirement is complied with if both the donation and
the acceptance are embodied either in a private instrument or a public
instrument. Further, the law does not require that both the donation
and the acceptance be embodied in a single instrument. Hence, the
acceptance may be made in a separate instrument and such fact is not
required to be noted in both instruments of donations and acceptance.
In one case,197 where the alleged subject of donation was the
purchase money in a contract of sale in the amount of P3,297,800,
the Court held that the donation must comply with the mandatory
requirements of Article 748. The Court held —
“Petitioners could not brush aside the fact that a donation
must comply with the mandatory formal requirements set
forth by law for its validity. Since the subject donation is
the purchase money, Art. 748 of the New Civil Code is
applicable. Accordingly, the donation of money equivalent
195
Art. 748, 2nd par., NCC.
196
Art. 748, 3rd par., NCC.
197
Moreño-Lentfer v. Wolf, 441 SCRA 584 (2004).
676 PROPERTY
If the acceptance is not embodied in a public document, the donation
shall be void.208
Heirs of Salud Dizon Salamat v. Tamayo
298 SCRA 313 (1998)
Agustin Dizon died intestate on May 15, 1942 leaving behind his five
children Eduardo, Gaudencio, Salud, Valenta and Natividad as surviving heirs.
Among the properties left by the decedent was a parcel of land in Barrio San
Nicolas, Hagonoy, Bulacan, with an area of 2,188 square meters covered by
Original Certificate of Title No. 10384. On January 8, 1944, Eduardo sold his
hereditary rights in the sum of P3,000 to his sister Salud Dizon Salamat. The
sale was evidenced by a private document bearing the signatures of his sisters
Valenta and Natividad as witnesses. On June 2, 1949, Gaudencio likewise sold
his hereditary rights for the sum of P4,000 to his sister Salud. The sale was
evidenced by a notarized document which bore the signature of Eduardo Dizon
and a certain Angela Ramos as witnesses. Gaudencio died on May 30, 1951
leaving his daughters Priscila D. Rivera and Maria D. Jocson as heirs.
Sometime in 1987, the heirs of Salud Dizon Salamat and the heirs of
Anselma Reyes Dizon filed an action for compulsory judicial partition of real
properties registered in the name of Agustin Dizon with the Regional Trial
Court, Branch 18 of Malolos, Bulacan. The action was prompted by the refusal
of Natividad Dizon Tamayo to agree to the formal distribution of the properties
of deceased Agustin Dizon among his heirs. Her refusal stemmed from her
desire to keep for herself the parcel of land covered by OCT 10384 where she
presently resides, claiming that her father donated it to her sometime in 1936
with the conformity of the other heirs. The subject property is also declared for
taxation purposes under Tax Declaration No. 10376 in the name of Natividad
Dizon Tamayo. Natividad claims that her father donated the subject property to
her sometime in 1936 with the consent of her co-heirs. In support of her claim,
Natividad presented a private document of conformity which was allegedly
signed and executed by her elder brother, Eduardo, in 1936. The heirs of Salud
and Anselma, however, question the authenticity of the document inasmuch as
it is marred by unexplained erasures and alterations.
Notwithstanding the unexplained erasures and alterations, the Court of
Appeals, in affirming the decision of the RTC favoring Natividad, stated that a
cursory reading of the signed statement of Eduardo Dizon, which execution is
undisputed, showed that there was an oral donation of the litigated land from
Agustin Dizon to Natividad Dizon Tamayo in 1936. In reversing the decision
208
Id.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 677
DONATION
Persons Who May Give or Receive a Donation
of the Court of Appeals, the Supreme Court held that such oral donation was
void. The Court explained —
“It is clear from Article 749 that a transfer of real property
from one person to another cannot take effect as a donation unless
embodied in a public document.
The alleged donation in the case at bar was done orally
and not executed in a public document. Moreover, the document
which was presented by respondent in support of her claim that her
father donated the subject parcel of land to her was a mere private
document of conformity which was executed by her elder brother,
Eduardo in 1956. It may not be amiss to point out that the brothers
Eduardo and Gaudencio had already ceded their hereditary interests
to petitioner Salud Dizon Salamat even before 1950.”
[140.4.2] Property Donated and Value of Charges Must Be
Specified
Article 749 further requires that the real property donated and the
value of the charges which the donee is required to satisfy must be spec-
ified in the deed of donation. The “charges” referred to in this article are
the burdens mentioned in Article 726 inferior in value to the property
donated. These charges are required to be specified in the deed of dona-
tion for the purpose of determining the true amount of the donation. As
explained in supra § 136.3.2, if the value of the burdens or charges is at
least equal or superior than that of the value of the property donated, the
donation is in reality a contract and governed by the law on contracts.
[140.4.3] Requirement of Notification and Notation
Title to immovable property does not pass from the donor to
the donee by virtue of a deed of donation until and unless it has been
accepted in a public instrument and the donor duly notified thereof. The
acceptance may be made in the very same instrument of donation. If
the acceptance does not appear in the same document, it must be made
in another. Solemn words are not necessary; it is sufficient if it shows
the intention to accept. But in this case it is necessary that formal notice
thereof be given to the donor, and the fact that due notice has been given
must be noted in both instruments (that containing the offer to donate
and that showing the acceptance).209 Where the deed of donation fails
209
Lagazo v. CA, 287 SCRA 18, 27-28, citing Tolentino, Civil Code of the Philippines,
1992 ed., Vol. II, pp. 557-558.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 679
DONATION
Persons Who May Give or Receive a Donation
David, maintains, on the other hand, that he acquired the property by
right of accretion and not by way of donation, with the deeds of quitclaim
merely declaring Helen’s intention to renounce her share in the property and
not an intention to donate. The intention of Helen, in fact, was to preserve
the Bulacan properties within the bloodline of Simeon from where they
originated, over and above the benefit that would accrue to David by reason
of her renunciation. The Republic, however, maintains that the Special Power
of Attorney executed by David in favor of his lawyer manifests his implied
acceptance of his mother’s alleged donation.
In ruling that there was no effective conveyance of the parcels of land by
way of donation inter vivos, the Supreme Court explained —
Likewise, the two (2) deeds of quitclaim executed by Helen
may have been in the nature of a public document but they lack
the essential element of acceptance in the proper form required by
law to make the donation valid. We find no merit in petitioner’s
argument that the Special Power of Attorney executed by David
in favor of Atty. Lolita G. Abela manifests his implied acceptance
of his mother’s alleged donation as a scrutiny of the document
clearly evinces the absence thereof. The Special Power of Attorney
merely acknowledges that David owns the property referred to and
that he authorizes Atty. Abela to sell the same in his name. There
is no intimation, expressly or impliedly, that David’s acquisition of
the parcels of land is by virtue of Helen’s possible donation to him
and we cannot look beyond the language of the document to make
a contrary construction as this would be inconsistent with the parol
evidence rule.
Moreover, it is mandated that if an acceptance is made in a
separate public writing the notice of the acceptance must be noted
not only in the document containing the acceptance but also in the
deed of donation. Commenting on Art. 633 of the Civil Code from
whence Art. 749 came Manresa said: “If the acceptance does not
appear in the same document, it must be made in another. Solemn
words are not necessary; it is sufficient if it shows the intention to
accept x x x it is necessary that formal notice thereof be given to the
donor, and the fact that due notice has been given must be noted in
both instruments. Then and only then is the donation perfected.’’
Thus, in Santos v. Robledo we emphasized that when the deed
of donation is recorded in the registry of property the document that
evidences the acceptance — if this has not been made in the deed
of gift — should also be recorded. And in one or both documents,
as the case may be, the notification of the acceptance as formally
678 PROPERTY
to show the acceptance, or where the formal notice of the acceptance,
made in a separate instrument, is either not given to the donor or else
not noted in the deed of donation and in the separate acceptance, the
donation is null and void.210 It is well-settled that if the notification and
notation are not complied with, the donation is void.211
Republic v. Guzman
326 SCRA 90 (Feb. 18, 2000)
David Rey Guzman, a natural-born American citizen, is the son of the
spouses Simeon Guzman, a naturalized American citizen but formerly a citizen
of the Philippines, and Helen Meyers Guzman, an American citizen. In 1968
Simeon died leaving to his sole heirs Helen and David an estate consisting of
several parcels of land located in Bulacan. In 1970, Helen and David executed
a Deed of Extrajudicial Settlement of the Estate of Simeon Guzman dividing
and adjudicating to themselves all the property belonging to the estate of
Simeon. In 1981, Helen executed a Quitclaim Deed assigning, transferring, and
conveying to her son David her undivided one-half interest on all the parcels
of land subject matter of the Deed of Extrajudicial Settlement of the Estate of
Simeon Guzman. Since the document appeared not to have been registered,
upon the advice of her lawyer, Helen executed another document, a Deed of
Quitclaim in August 1989 confirming the earlier deed of quitclaim as well as
modifying the document to encompass all her other property in the Philippines.
In October 1989, David executed a Special Power of Attorney where he
acknowledged that he became the owner of the parcels of land subject of the
Deed of Quitclaim executed by Helen and empowering Atty. Abela to sell or
otherwise dispose of the lots. A certain lawyer wrote the Office of the Solicitor
General and furnished it with documents showing that David’s ownership of
the one-half (1/2) of the estate of Simeon Guzman was defective. Thus, the
OSG filed a petition for escheat praying that 1/2 of David’s interest in each of
the subject parcels of land be forfeited in favor of the estate.
The State anchors its argument on Sections 7 and 8 of Article XII of the
Constitution. The State contends that the acquisition of the parcels of land by
David does not fall under any of these exceptions. It asserts that David being
an American citizen could not validly acquire one-half (1/2) interest in each of
the subject parcels of land by way of the two deeds of quitclaim as they are in
reality donations inter vivos and that the elements of donation are present in the
conveyance made by Helen in favor of David.
210
Sumpita v. Banga, 436 SCRA 521, 528-529 (2004), citing Tolentino, Civil Code of the
Philippines, 1992 ed., Vol. II, pp. 557-558.
211
Republic v. Guzman, 326 SCRA 90, 98 (2000).
680 PROPERTY
made to the donor or donors should be duly set forth. Where the
deed of donation fails to show the acceptance, or where the formal
notice of the acceptance made in a separate instrument is either not
given to the donor or else noted in the deed of donation, and in the
separate acceptance, the donation is null and void.
These requisites, definitely prescribed by law, have not been
complied with, and no proof of compliance appears in the record.
The two (2) quitclaim deeds set out the conveyance of the parcels
of land by Helen in favor of David but its acceptance by David
does not appear in the deeds, nor in the Special Power of Attorney.
Further, the records reveal no other instrument that evidences
such acceptance and notice thereof to the donor in an authentic
manner. It is well-settled that if the notification and notation are
not complied with, the donation is void. Therefore, the provisions
of the law not having been complied with, there was no effective
conveyance of the parcels of land by way of donation inter vivos.
However, a strict and literal adherence to the requirement of
“notation” in Article 749 of the Civil Code should be avoided if such
will result not in justice to the parties but conversely a distortion of their
intentions.212 Thus, if the donor was not unaware of the acceptance for
she in fact confirmed it later and requested that the donated land be not
registered during her lifetime, the Court held that it cannot in conscience
declare the donation ineffective simply because there is no notation for
that would be placing too much stress on mere form over substance.213
In another case214 where the acceptance was not noted in the Deed of
Donation, the Court held that the actual knowledge by the donor of
the construction and existence of the school building pursuant to the
condition of the donation already fulfills the legal requirement that the
acceptance of the donation by the donee be communicated to the donor.
In Pajarillo215 and Silim,216 the Court explained that the purpose of the
formal requirement for acceptance of a donation is to ensure that such
acceptance is duly communicated to the donor.
212
See Pajarillo v. Intermediate Appellate Court, 176 SCRA 340 (1989) and Republic v.
Silim, 356 SCRA 1 (2001).
213
Pajarillo v. IAC, supra, at p. 349.
214
Republic v. Silim, supra.
215
Supra, at p. 349.
216
Supra, at p. 11.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 681
DONATION
Persons Who May Give or Receive a Donation
The cases of Pajarillo and Silim must be distinguished from the
cases of Legasto v. Verzosa217 and Santos v. Robledo218 where the Court
applied strictly the requirement of “notation.” In Legasto, there was no
evidence whtsoever that the claimed donations had been accepted, as
stressed by Justice Villa-Real. The same observation is made in Santos,
where Justice Torres noted that the acceptance of the donation did not
appear in the deed of donation or in any other instrument.
Republic v. Silim
356 SCRA 1 (2001)
In 1971, the spouses Silim donated a 5,600 square meter parcel of land in
favor of the Bureau of Public Schools, Municipality of Malangas, Zamboanga
de Sur. In the Deed of Donation, the donors imposed the condition that the
said property should “be used exclusively and forever for school purposes
only.” This donation was accepted by the District Supervisor of BPS, through
an Affidavit of Acceptance and/or Confirmation of Donation. Through a
fund raising campaign by the Parents-Teachers Association of Barangay
Kauswagan, a school building was constructed on the donated land. However,
the Bagong Lipunan school building that was supposed to be allocated for the
donated parcel of land in Barangay Kauswagan could not be released since the
government required that it be built upon a one (1) hectare parcel of land. To
remedy this predicament, the Assistant School Superintendent of the Province
of Zamboanga del Sur authorized the District Supervisor of the BPS to
officially transact for the exchange of the one-half (1/2) hectare old school site
of Kauswagan Elementary School to a new and suitable location which would
fit the specifications of the government. Pursuant to this, the District Supervisor
entered into a Deed of Exchange whereby the donated land was exchanged
with a bigger lot. Consequently, the Bagong Lipunan school buildings were
constructed on the new school site and the school building previously erected
on the donated lot was dismantled and transferred to the new location.
When the spouses Silim saw that a house was being constructed on
the donated land, they filed an action for the cancellation and revocation of
the donation. One of the arguments raised by the spouses Silim was that the
donation was void since the acceptance was not noted in the Deed of Donation.
In holding that the legal requirement in Article 749 was complied with, the
Supreme Court explained —
Respondents further argue that assuming there was a valid
acceptance of the donation, the acceptance was not noted in the
217
54 Phil. 766.
218
28 Phil. 245.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 683
DONATION
Effect of Donations and Limitations Thereon
donation ineffective because there is no notation in
the extrajudicial settlement of the donee’s acceptance.
That would be placing too much stress on mere form
over substance. It would also disregard the clear reality
of the acceptance of the donation as manifested in the
separate instrument dated June 20, 1946, and as later
acknowledged by Juan.
In the case at bar, a school building was immediately
constructed after the donation was executed. Respondents had
knowledge of the existence of the school building put up on the
donated lot through the efforts of the Parents-Teachers Association
of Barangay Kauswagan. It was when the school building was
being dismantled and transferred to the new site and when Vice-
Mayor Wilfredo Palma was constructing a house on the donated
property that respondents came to know of the Deed of Exchange.
The actual knowledge by respondents of the construction and
existence of the school building fulfilled the legal requirement that
the acceptance of the donation by the donee be communicated to
the donor.
[140.4.4] Registration Not Necessary For Validity of Dona-
tion
It is enough, between the parties to a donation of an immovable
property, that the donation be made in a public instrument but, in order
to bind third persons, the donation must be registered in the Registry of
Property.219 Such registration in the Office of the Register of Deeds or in
the Assessor’s Office is not necessary for the donation to be considered
valid and official.220
Chapter 3
EFFECT OF DONATIONS AND LIMITATIONS THEREON
Art. 750. The donations may comprehend all the present property
of the donor, or part thereof, provided he reserves, in full ownership or in
usufruct, sufficient means for the support of himself, and of all relatives
219
Shopper’s Paradise Realty & Development Corp. v. Roque, 419 SCRA 93, 98 (2004).
220
Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla de Leon, 425 SCRA 447,
459 (2004).
682 PROPERTY
Deed of Donation as required in Article 749 of the Civil Code,
hence, the donation is void.
The purpose of the formal requirement for acceptance of a
donation is to ensure that such acceptance is duly communicated
to the donor. Thus, in Pajarillo v. Intermediate Appellate Court,
the Court held:
There is no question that the donation was ac-
cepted in a separate public instrument and that it was
duly communicated to the donors. Even the petitioners
cannot deny this. But what they do contend is that such
acceptance was not “noted in both instruments,” mean-
ing the extrajudicial partition itself and the instrument
of acceptance, as required by the Civil Code.
That is perfectly true. There is nothing in either of
the two instruments showing that “authentic notice” of
the acceptance was made by Salud to Juana and Felipe.
And while the first instrument contains the statement
that “the donee does hereby accept this donation and
does hereby express her gratitude for the kindness and
liberality of the donor,” the only signatories thereof
were Felipe Balane and Juana Balane de Suterio. That
was in fact the reason for the separate instrument of
acceptance signed by Salud a month later.
A strict interpretation of Article 633 can lead to
no other conclusion that the annulment of the donation
for being defective in form as urged by the petitioners.
This would be in keeping with the unmistakable
language of the above-quoted provision. However,
we find that under the circumstances of the present
case, a literal adherence to the requirement of the law
might result not in justice to the parties but conversely
a distortion of their intentions. It is also a policy of the
Court to avoid such an interpretation.
The purpose of the formal requirement is to
insure that the acceptance of the donation is duly
communicated to the donor. In the case at bar, it is
not even suggested that Juana was unaware of the
acceptance for she in fact confirmed it later and
requested that the donated land be not registered
during her lifetime by Salud. Given this significant
evidence, the Court cannot in conscience declare the
684 PROPERTY
who, at the time of the acceptance of the donations, are by law entitled to
be supported by the donor. Without such reservation, the donation shall
be reduced on petition of any person affected. (634a)
Art. 751. Donations cannot comprehend future property.
By future property is understood anything which the donor cannot
dispose of at the time of the donation. (635)
Art. 752. The provisions of Article 750 notwithstanding, no person
may give or receive, by way of donation, more than he may give or receive
by will.
The donation shall be inofficious in all that it may exceed this limita-
tion. (636)
§ 141. Extent of Donation
[141.1] In General
A donor may donate all his property or part thereof221 subject only
to the following limitations:
(1) He cannot donate future property;222
(2) He must reserve, in full ownership or in usufruct, sufficient
means for the support of himself, and of all relatives who, at the time of
the acceptance of the donation, are by law entitled to be supported by
him;223 and
(3) He cannot give by donation more than he can give by
will.224
[141.2] Future Property Cannot Be Donated
Donations cannot comprehend future property.225 This is pretty
obvious. As being itself a mode of acquiring ownership, donation results
in an effective transfer of title over the property from the donor to the
donee226 once the donation is perfected. For this reason, the law requires
that the donor must be the owner of the thing donated at the time of the
221
Art. 750, NCC.
222
Art. 751, NCC.
223
Id.
224
Art. 752, NCC.
225
Art. 751, 1st par., NCC.
226
Shopper’s Paradise Realty & Development Corp. v. Roque, supra, p. 98.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 685
DONATION
Effect of Donations and Limitations Thereon
donation.227 This, in essence, is the meaning of the rule in Article 751
that “donations cannot comprehend future property.” If the rule were
otherwise, it will be an inefficacious process since the donor will have
nothing to convey at the time that the donation is made following the
rule that “no one can give what he does not have” — nemo dat quod
non habet.
By “future property” is understood anything which the donor
cannot dispose of at the time of the donation.228 Stated otherwise,
future property includes all property that belongs to others at the time
the donation is made, although it may or may not later belong to the
donor.229 It cannot be donated, because it is not at present his property,
and he cannot dispose of it at the moment of making the donation.230
The meaning of the phrase “at the time of the donation” in the second
paragraph of Article 751 must be held to mean “perfection of the
donation.” In other words, the phrase “at the time of the donation” in
this article must not be given its literal meaning since the requirement
that the donor must be the owner of the property donated attaches only
at the time of the perfection of the donation and not prior thereto.231
Hence, it is possible that, at the time of the execution of the deed of
donation or even up to the time of acceptance, the donor may not be the
owner of the property donated, so long as at the time the acceptance is
conveyed — at which point the donation is considered perfected — the
requirement of the law (that the donor must be the owner of the property
donated) is already complied with.
[141.2.1] Donation of Future Property Between Future
Spouses
In donation propter nuptias, however, the Family Code allows a
donation of future property between the spouses.232 Under said provision
of the Family Code, however, the donation of future property partakes
227
See discussions in supra § 4.1.
228
Art. 751, 2nd par., NCC.
229
See II Tolentino, Civil Code, 1992 ed., 561.
230
Id.
231
See discussion in supra § 4.2.
232
Art. 84 of the Family Code provides: “Art. 84. If the future spouses agree upon a regime
other than the absolute community of property, they cannot donate to each other in their marriage
settlements more than one-fifth of their present property. Any excess shall be considered void.
“Donations of future property shall be governed by the provisions on testamentary succes-
sion and the formalities of wills. (130a)”
DIFFERENT MODES OF ACQUIRING OWNERSHIP 687
DONATION
Effect of Donations and Limitations Thereon
between the spouses or their respective heirs.237 Hence, any disposition
of the spouse’s respective shares or interest in the conjugal partnership
or absolute community shall be void since such right to one-half of
the conjugal assets does not vest until the liquidation of the conjugal
partnership. Nemo dat qui non habet. No one can give what he has
not.238 In other words, prior to the liquidation of the absolute community
or conjugal partnership, the interest of each spouse in the community
property or conjugal assets is considered as a future property which
cannot be the subject matter of donation inter vivos.
[142.3] Donor Must Reserve For Himself and Relatives
While a donor may donate all his present properties, he must
not neglect himself and his family. Thus, one of the basic limitations
to the donor’s right to donate is that he must reserve, either in full
ownership or in usufruct, sufficient means for the support of himself
and all relatives who, at the time of the acceptance, are by law entitled
to be supported by the donor.239 However, if the donor fails to make such
reservation, the donation is not void but subject only to a corresponding
reduction at the instance of “any person affected” and only to the extent
necessary for the support of the donor and his relatives referred to in
Article 750 of the Civil Code. The provision of Article 750 must be read
in conjunction with Articles 195 and 196 of the Family Code which
provide, as follows:
“Art. 195. Subject to the provisions of the succeeding
articles, the following are obliged to support each other to
the whole extent set forth in the preceding article:
(1) The spouses;
(2) Legitimate ascendants and descendants;
(3) Parents and their legitimate children and the
legitimate and illegitimate children of the latter;
(4) Parents and their illegitimate children and the
legitimate and illegitimate children of the latter; and
237
Id., citing Quintos de Ansaldo v. Sheriff of Manila, 64 Phil. 115 (1937).
238
Id.
239
See Art. 750, NCC.
686 PROPERTY
of the nature of a testamentary provision and, as such, it is governed
by “the provisions on testamentary succession and the formalities of
wills.”233 As explained in supra § 140.2, in donation propter nuptias,
it is essential that the donee or donees be either of the future spouses
or both of them, although the donor may either be one of the future
spouses or a third person. In the second paragraph of Article 84 of the
Family Code, it is clear that the donation of future property referred to
is a donation propter nuptias between the future spouses. Consequently,
if the donation of future property is made by a third person, Article 84
of the Family Code does not apply but Article 751 of the New Civil
Code, even if the donation is one of propter nuptias. In which case, such
donation of future property is prohibited.
[141.2.2] Neither Spouse May Donate His or Her Share in
the Absolute Community or Conjugal Partnership
of Gains
Under the Family Code, either spouse may dispose of his or her
interest in the community property or conjugal partnership of gains
only by will234 and not by acts inter vivos. Hence, neither the husband
nor the wife may donate his or her interest in the community property
or conjugal partnership of gains. The reason for this is because prior to
the liquidation of the absolute community or conjugal partnership, the
interest of each spouse in the community property or conjugal assets is
inchoate, a mere expectancy, which constitutes neither a legal nor an
equitable estate, and does not ripen into title until it appears that there are
assets in the community as a result of the liquidation and settlement.235
The interest of each spouse is limited to the net remainder or “remanente
liquido” (haber ganancial) resulting from the liquidation of the affairs
of the partnership after its dissolution.236 Thus, the right of the husband
or wife to one-half of the conjugal assets or community property does
not vest until the dissolution and liquidation of the conjugal partnership
or the absolute community, or after dissolution of the marriage, when
it is finally determined that, after settlement of conjugal or absolute
community obligations, there are net assets left which can be divided
233
Id.
234
Art. 97, FC.
235
Abalos v. Macatangay, Jr., 439 SCRA 649 (2004).
236
Abalos v. Macatangay, Jr., supra, citing Nable Jose v. Nable Jose, 41 Phil. 713 (1916);
Manuel v. Losano, 41 Phil. 855 (1918).
688 PROPERTY
(5) Legitimate brothers and sisters, whether of full or
half-blood.
“Art. 196. Brothers and sisters not legitimately related,
whether of the full or half-blood, are likewise bound to
support each other to the full extent set forth in Article 194,
except only when the need for support of the brother or sister,
being of age, is due to a cause imputable to the claimant’s
fault or negligence.”
Thus, any of the persons enumerated in the above-quoted provisions
may be deemed as a party in interest in any petition for reduction of the
donation by reason of Article 750 of the Civil Code.
[142.4] Donation Must Not Be Inofficious
A donor’s prerogative to make donations is further subject to the
limitation that he cannot give by donation more than he can give by
will.240 If he does, so much of what is donated as exceeds what he can
give by will is deemed “inofficious” and the donation is reducible to the
extent of such excess, though without prejudice to its taking effect in
the donor’s lifetime or the donee’s appropriating the fruits of the thing
donated.241
Under the law on succession,242 there are three kinds of heirs: (1)
voluntary, those who become as such only by the express will of the
testator in the latter’s will and testament (present only in testamentary
succession); (2) legal or intestate, those who are called by the law to the
succession in the absence of voluntary heirs designated by the testator
(present only in intestate succession); and (3) compulsory, those who
are entitled to the legitime and cannot be deprived thereof by the testator
unless properly disinherited by the testator. Now, there is a part of a
person’s property which he cannot dispose of either by way of donation
inter vivos243 or by testamentary provision in a will244 because the law
has reserved it for his compulsory heirs.245 This portion is called the
240
Art. 752, NCC.
241
Vda. de Tupas v. Br. XLIII, RTC of Negros Occidental, 144 SCRA 622, 624-625, citing
Art. 771, NCC.
242
Arts. 774 to 1105, NCC.
243
Art. 751, NCC.
244
Art. 886, NCC.
245
Id.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 689
DONATION
Effect of Donations and Limitations Thereon
“legitime.”246 Inofficious donations are, therefore, those which prejudice
the legitime of the compulsory heirs.
Inofficious donations are not void although they may be subjected
to a corresponding reduction or revocation, as the case may be, if there
is impairment of the legitime of the compulsory heirs of the donor. And
whether or not there is impairment of such legitime is a matter that can
be determined only upon the death of the donor after considering the
estimated net value of his property at the time of his death.247
Art. 753. When a donation is made to several persons jointly, it is
understood to be in equal shares, and there shall be no right of accretion
among them, unless the donor has otherwise provided.
The preceding paragraph shall not be applicable to donations made
to the husband and wife jointly, between whom there shall be a right of
accretion, if the contrary has not been provided by the donor. (637)
Art. 754. The donee is subrogated to all the rights and actions which
in case of eviction would pertain to the donor. The latter, on the other
hand, is not obliged to warrant the things donated, save when the dona-
tion is onerous, in which case the donor shall be liable for eviction to the
concurrence of the burden.
The donor shall also be liable for eviction or hidden defects in case
of bad faith on his part. (638a)
Art. 755. The right to dispose of some of the things donated, or of
some amount which shall be a charge thereon, may be reserved by the
donor; but if he should die without having made use of this right, the
property or amount reserved shall belong to the donee. (639)
Art. 756. The ownership of property may also be donated to one
person and the usufruct to another or others, provided all the donees are
living at the time of the donation. (640a)
Art. 757. Reversion may be validly established in favor of only the
donor for any case and circumstances, but not in favor of other persons
unless they are all living at the time of the donation.
Any reversion stipulated by the donor in favor of a third person in
violation of what is provided in the preceding paragraph shall be void, but
shall not nullify the donation. (641a)
Art. 758. When the donation imposes upon the donee the obligation
to pay the debts of the donor, if the clause does not contain any declara-
246
Id.
247
See Art. 771, NCC.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 691
DONATION
Effect of Donations and Limitations Thereon
exclusive property.251 In the absence of designation, they shall share and
share alike, without prejudice to the right of accretion.252
[143.2] No Warranty Against Eviction
As a rule, the donor does not warrant the thing donated against
eviction.253 Hence, the donor has no liability to the donee in case of
eviction except: (1) when there is bad faith on the part of the donor,
in which case he is also liable for hidden defects;254 or (2) when the
donation is onerous, in which case the donor shall be liable up to the
amount equal to the burden.255
[143.3] Reservation of Power to Dispose
As discussed in supra § 136.2.4, if there is a reservation by
the donor of the power to dispose or alienate the property donated
and such right is unqualified or unrestricted, meaning, the donor can
alienate the conveyed property in favor of other persons of his choice
at anytime that he should wish to do so, the donation is mortis causa.
The discussion in supra § 136.2.4 must be distinguished, however, from
the provision of Article 755 of the Civil Code, which contemplates of
a situation where there are several properties donated by the donor and
he reserved for himself the power to dispose of “some of the things
donated, or of some amount.” Such reservation is valid and will not
affect the character of the conveyance as donation inter vivos. If the
donor should die, however, without having made use of this right, the
property or amount reserved shall belong to the donee.256 On the other
hand, if there are several properties donated and the donor has reserved
the power to dispose of all of them, which right is neither qualified nor
restricted, meaning he can alienate all the conveyed properties in favor
of other persons of his choice at anytime that he should wish to do so,
the donation is mortis causa, therefore, subject to the rules governing
testamentary provisions and formalities of wills.
251
Art. 113, FC.
252
Id.
253
Art. 754, 1st par., NCC.
254
Art. 754, 2nd par., NCC.
255
Art. 754, 1st par., NCC.
256
Art. 755, NCC.
690 PROPERTY
tion to the contrary, the former is understood to be liable to pay only the
debts which appear to have been previously contracted. In no case shall
the donee be responsible for debts exceeding the value of the property
donated, unless a contrary intention clearly appears. (642a)
Art. 759. There being no stipulation regarding the payment of debts,
the donee shall be responsible therefor only when the donation has been
made in fraud of creditors.
The donation is always presumed to be in fraud of creditors, when
at the time thereof the donor did not reserve sufficient property to pay his
debts prior to the donation. (643)
§ 143. Effect of Donations
[143.1] Donations Made to Several Donees Jointly
When a donation is made to several persons jointly, the following
rules shall apply:
(1) The donees are entitled to equal portions;248
(2) If the donees are not husband and wife, there is no right
of accretion among them, accretion taking place only when expressly
provided for by the donor.249 If the donation, however, is made to husband
and wife jointly the rule is that there is a right of accretion among them
unless the donor provides for the contrary.250
When there is a right of accretion among several donees, the share
of the one who did not accept or could not accept or who died before he
had accepted shall go the other donees in proportion to the interest of
each in the donation. In such a situation, the acceptance by any of the
donees of the donation shall result in its perfection thereby preventing
the donor from revoking that part of the donation corresponding
to the share of the one who did not accept or who died prior to his
acceptance.
(3) If the donation is made to the spouses jointly in a regime
of conjugal partnership of gains, and with designation of determinate
shares, their respective shares shall pertain to them as his or her own
248
Art. 753, NCC.
249
Id.
250
Id.
692 PROPERTY
[143.4] Separate Donation of Ownership and Usufruct
The donor may donate separately the ownership of the property
to one person and the usufruct to another or others subject only
to the condition that all the donees must be living at the time of the
donation.257
[143.5] Donor May Provide for Reversion
The donor may validly provide for the reversion or return of the
property donated to him for any case and circumstances.258 He may
likewise establish a reversion in favor of a third person provided that
such person is living at the time of the donation.259 If the latter condition
is violated, only the provision for reversion is considered void without
affecting the validity of the donation.260
[143.6] Payment of Donor’s Debts
When the donation imposes upon the donee the obligation to pay
the debts of the donor, the following rules shall apply unless a contrary
intention clearly appears: (1) the donee is understood to be liable to pay
only the debts which appear to have been previously contracted; and
(2) the liability of the donee is limited only to the value of the property
donated.261
On the other hand, in the absence of any stipulation regarding
the payment of the debts of the donor, the donee shall be responsible
therefore only when the donation has been made in fraud of creditors.262
And such donation is presumed to be in fraud of creditors when at the
time of the donation the donor did not reserve sufficient property to pay
his debts prior to the donation.263 The liability, however, of the donee
should be limited only to the value of the property donated.
257
Art. 756, NCC.
258
Art. 757, NCC.
259
Id.
260
Id.
261
Art. 758, NCC.
262
Art. 759, NCC.
263
Id.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 693
DONATION
Revocation and Reduction of Donations
Chapter 4
REVOCATION AND REDUCTION
OF DONATIONS
Art. 760. Every donation inter vivos, made by a person having no
children or descendants, legitimate or legitimated by subsequent mar-
riage, or illegitimate, may be revoked or reduced as provided in the next
article, by the happening of any of these events:
(1) If the donor, after the donation, should have legitimate or le-
gitimated or illegitimate children, even though they be posthumous;
(2) If the child of the donor, whom the latter believed to be dead
when he made the donation, should turn out to be living;
(3) If the donor should subsequently adopt a minor child. (644a)
Art. 761. In the cases referred to in the preceding article, the dona-
tion shall be revoked or reduced insofar as it exceeds the portion that
may be freely disposed of by will, taking into account the whole estate of
the donor at the time of the birth, appearance or adoption of a child. (n)
Art. 762. Upon the revocation or reduction of the donation by the
birth, appearance or adoption of a child, the property affected shall be
returned, or its value if the donee has sold the same.
If the property is mortgaged, the donor may redeem the mortgage,
by paying the amount guaranteed, with a right to recover the same from
the donee.
When the property cannot be returned, it shall be estimated at what
it was worth at the time of the donation. (645a)
Art. 763. The action for revocation or reduction on the grounds set
forth in Article 760 shall prescribe after four years from the birth of the
first child, or from his legitimation, recognition or adoption, or from the
judicial declaration of filiation, or from the time information was received
regarding the existence of the child believed dead.
This action cannot be renounced, and is transmitted, upon the death
of the donor, to his legitimate and illegitimate children and descendants.
(646a)
Art. 764. The donation shall be revoked at the instance of the donor,
when the donee fails to comply with any of the conditions which the for-
mer imposed upon the latter.
In this case, the property donated shall be returned to the donor,
the alienations made by the donee and the mortgages imposed thereon
by him being void, with the limitations established, with regard to third
persons, by the Mortgage Law and the Land Registration Laws.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 695
DONATION
Revocation and Reduction of Donations
Art. 771. Donations which in accordance with the provisions of Ar-
ticle 752, are inofficious, bearing in mind the estimated net value of the
donor’s property at the time of his death, shall be reduced with regard to
the excess; but this reduction shall not prevent the donations from taking
effect during the life of the donor, nor shall it bar the donee from appro-
priating the fruits.
For the reduction of donations the provisions of this Chapter and of
Articles 911 and 912 of this Code shall govern. (654)
Art. 772. Only those who at the time of the donor’s death have a right
to the legitime and their heirs and successors in interest may ask for the
reduction of inofficious donations.
Those referred to in the preceding paragraph cannot renounce their
right during the lifetime of the donor, either by express declaration, or by
consenting to the donation.
The donees, devisees and legatees, who are not entitled to the legi-
time and the creditors of the deceased can neither ask for the reduction
nor avail themselves thereof. (655a)
Art. 773. If, there being two or more donations, the disposable por-
tion is not sufficient to cover all of them, those of the more recent dates
shall be suppressed or reduced with regard to the excess. (656)
§ 144. Reduction or Revocation of Donations
[144.1] In General
As previously explained, a donation, as a mode of acquiring
ownership, results in an effective transfer of title over the property
from the donor to the donee and once a donation is accepted, the donee
becomes the absolute owner of the property donated.264 Hence, as a rule,
once the donation is accepted, it is generally considered irrevocable.265
The exceptions to irrevocability are the following grounds expressly
provided in Articles 752, 760, 764 and 765 of the New Civil Code:
(1) the subsequent appearance of children;266 (2) the non-fulfillment of
charges imposed in the donation;267 (3) the ingratitude of the donee;268 and
(4) the fact that the donation is inofficious.269 The donation may likewise
264
Tanpingco v. IAC, 207 SCRA 652, 657, citing Roman Catholic Archbishop of Manila v.
CA, 198 SCRA 300. See also discussion in supra § 3.3.
265
Gestopa v. CA, 342 SCRA 105, 114.
266
Art. 760, NCC.
267
Art. 764, NCC.
268
Art. 765, NCC.
269
Art. 752, NCC.
694 PROPERTY
This action shall prescribe after four years from the noncompliance
with the condition, may be transmitted to the heirs of the donor, and may
be exercised against the donee’s heirs. (647a)
Art. 765. The donation may also be revoked at the instance of the
donor, by reason of ingratitude in the following cases:
(1) If the donee should commit some offense against the person,
the honor or the property of the donor, or of his wife or children under his
parental authority;
(2) If the donee imputes to the donor any criminal offense, or any
act involving moral turpitude, even though he should prove it, unless the
crime or the act has been committed against the donee himself, his wife
or children under his authority;
(3) If he unduly refuses him support when the donee is legally or
morally bound to give support to the donor. (648a)
Art. 766. Although the donation is revoked on account of ingratitude,
nevertheless, the alienations and mortgages effected before the notation
of the complaint for revocation in the Registry of Property shall subsist.
Later ones shall be void. (649)
Art. 767. In the case referred to in the first paragraph of the preced-
ing article, the donor shall have a right to demand from the donee the
value of property alienated which he cannot recover from third persons,
or the sum for which the same has been mortgaged.
The value of said property shall be fixed as of the time of the dona-
tion. (650)
Art. 768. When the donation is revoked for any of the causes stated
in Article 760, or by reason of ingratitude, or when it is reduced because
it is inofficious, the donee shall not return the fruits except from the filing
of the complaint.
If the revocation is based upon noncompliance with any of the con-
ditions imposed in the donation, the donee shall return not only the prop-
erty but also the fruits thereof which he may have received after having
failed to fulfill the condition. (651)
Art. 769. The action granted to the donor by reason of ingratitude
cannot be renounced in advance. This action prescribes within one year,
to be counted from the time the donor had knowledge of the fact and it
was possible for him to bring the action. (652)
Art. 770. This action shall not be transmitted to the heirs of the do-
nor, if the latter did not institute the same, although he could have done
so, and even if he should die before the expiration of one year.
Neither can this action be brought against the heir of the donee, un-
less upon the latter’s death the complaint has been filed. (653)
696 PROPERTY
be reduced based on the following grounds: (1) that the donor did not
reserve sufficient property for his own and his family’s support;270 (2)
by the subsequent appearance of children;271 and (3) that the donation is
inofficious.272
[144.2] Subsequent Appearance of Children
Every donation inter vivos, made by a person having no children
or descendants, legitimate or legitimated by subsequent marriage, or
illegitimate, may be revoked or reduced as provided in the next article,
by the happening of any of these events: (1) if the donor, after the
donation, should have legitimate or legitimated or illegitimate children,
even though they be posthumous; (2) if the child of the donor, whom
the latter believed to be dead when he made the donation, should turn
out to be living; or (3) if the donor subsequently adopt a minor child.273
Note that the happening of any of these events shall only give rise to a
cause or ground to revoke the donation. Hence, if the proper action for
revocation is not instituted, or if it is instituted but after the lapse of the
statutory period of prescription, the donation will forever be considered
valid. For any of these events to be considered as grounds for the
revocation of a donation it is necessary, however, that the donor, at the
time of the donation, did not have, or at least he believed that he did
not have, any children or descendants, whether legitimate, legitimated,
illegitimate or adopted.
[144.2.1] Adoption of Minor Child
In order to be a ground for revocation of the donation under Article
760, the person “adopted” must be a minor child. Stated otherwise, if
the “adopted” child is a person of legal age, the donation may not be
reduced or revoked pursuant to Article 760 although it may be subjected
to either reduction or revocation pursuant to Article 752.
[144.2.2] Effect of Subsequent Appearance of Children
Upon the happening of any of the events mentioned in Article 760,
the donor shall be entitled to demand either for the reduction or revocation
270
Art. 750, NCC.
271
Art. 760, NCC.
272
Art. 752, NCC.
273
Art. 760, NCC.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 697
DONATION
Revocation and Reduction of Donations
of the donation, as the case may be.274 Revocation, as distinguished
from reduction, affects the entire donation while the latter affects only
a part or a portion thereof. When the ground invoked is the subsequent
appearance of children under Article 760, the donation shall be revoked
or reduced insofar as it exceeds the portion that may be freely disposed
of by will.275 In other words, there shall be a corresponding reduction or
revocation of the donation in so far as it impairs the legitime of the child
who subsequently appeared after the making of the donation.
Note, however, that in the determination of the child’s legitime,
it is the whole estate of the donor at the time of the appearance of the
child (be it by subsequent birth, re-appearance or adoption) that shall
be taken into consideration. In other words, there shall be a provisional
liquidation of the estate of the donor at the time of the birth, appearance
or adoption of a minor child for the purpose of determining the donor’s
estate and the child’s legitime. But if there is no impairment of the
child’s legitime — or when the donation does not exceed the free portion
— then the donation shall not be reduced nor revoked.
As distinguished from Article 752, in relation to Article 771, in
Article 760 the “inofficiousness” of the donation is to be determined
during the lifetime of the donor, i.e., at the time of the birth, appearance
or adoption of a minor child. In Article 752, in relation to Article 771,
however, the “inofficiousness” of the donation is determined only at the
time of death of the donor. It may then be asked, is the determination of
the inofficiousness of the donation under Article 760 a final one?
If, at the time of the subsequent appearance of a child under
Article 760, the entire donation is found to be within the free portion
of the donor’s estate, in which case, the donation is neither reduced nor
revoked, and later on the donor died after suffering financial reverses,
may such donation be revoked if found to be inofficious at the time
of the donor’s death? The answer is clearly in the affirmative. In this
situation, the ground for the revocation of the donation is Article 752 of
the New Civil Code.
Let us consider, however, a donation which is either reduced or
revoked because it is found to be inofficious at the time of the subsequent
274
Art. 761, NCC.
275
Art. 761, NCC.
DIFFERENT MODES OF ACQUIRING OWNERSHIP 699
DONATION
Revocation and Reduction of Donations
children and descendants,282 if the donor dies within the four-year
prescriptive period.
[144.3] Failure to Comply With Charges
Article 764 of the New Civil Code provides, as follows:
“Art. 764. The donation shall be revoked at the instance
of the donor, when the donee fails to comply with any of the
conditions which the former imposed upon the latter.
“In this case, the property donated shall be returned
to the donor, the alienations made by the donee and the
mortgages imposed thereon by him being void, with the
limitations established, with regard to third persons, by the
Mortgage Law and the Land Registration Laws.
“This action shall prescribe after four years from the
non-compliance with the condition, may be transmitted to
the heirs of the donor, and may be exercised against the
donee’s heirs.”
[144.3.1] Applicability of Article 764
While Article 764 uses the term “conditions,” what are actually
being referred to in said article are the obligations or charges imposed
by the donor on the donee. In his annotation of Article 764 of the Civil
Code on donations, Arturo M. Tolentino, citing the well-known civilists
such as Castan, Perez Gonzalez and Alguer, and Colin & Capitant,
states clearly the context within which the term “conditions” is used in
the law of donations, to wit:
“The word ‘conditions’ in this article does not refer to
uncertain events on which the birth or extinguishment of a
juridical relation depends, but is used in the vulgar sense of
obligations or charges imposed by the donor on the donee.
It is used, not in its technical or strict legal sense, but in its
broadest sense.”283
282
Art. 763, 2nd par., NCC.
283
Dissenting Opinion of J. Davide in Central Philippine University v. Court of Appeals,
246 SCRA 511, 520, citing II Tolentino, Civil Code, 1983 ed., 535.
698 PROPERTY
appearance of a child under Article 760, but later on the donor dies a
richer man and, at the time of his death, the previous donation could
have been accommodated in the free portion, may the donee be entitled
to the return of the thing donated or its value? The answer must be in
the negative. In this second situation, the ground for the revocation of
the donation is Article 760, which is an altogether different ground from
that provided in Article 752.
[144.2.3] Effects of Reduction or Revocation of Donation
Upon the revocation or reduction of the donation based on Article
760, the following effects are produced:
(1) The property affected shall be returned, or if it cannot be
returned, at least its value;276
(2) If the property is mortgaged, the donor may redeem the
mortgage, by paying the amount guaranteed, with a right to recover
his payment from the donee.277 When the property cannot be returned, it
shall be estimated at what it was worth at the time of the donation.278
(3) The donee shall return the fruits of property affected only
from the filing of the complaint.279
[144.2.4] Prescriptive Period of Action Based on Article 760
The prescriptive period of an action for revocation or reduction
of the donation under Article 760 is four (4) years reckoned from the
birth of the first child, or from his legitimation, recognition or adoption,
or from judicial declaration of filiation, or from the time information
was received regarding the existence of the child believed dead.280 If,
however, the child dies prior to the filing of the action, it is believed that
the action can no longer be brought.281
This action is not subject to waiver or renunciation and is
transmitted, upon the death of the donor, to his legitimate or illegitimate
276
Art. 762, 1st par., NCC.
277
Art. 762, 2nd par., NCC.
278
Art. 762, 3rd par., NCC.
279
Art. 768, 1st par., NCC.
280
Art. 763, 1st par., NCC.
281
3 Navarro Amandi 59, cited in II Tolentino, Civil Code, 1992 ed., 568.
700 PROPERTY
Clearly then, when the law and the deed of donation speaks
of “conditions” of a donation, what are referred to are actually the
obligations, charges or burdens imposed by the donor upon the donee
and which would characterize the donation as onerous.284 Thus, an
eminent civilist285 opines that the manner of revocation in Article 764 is
applicable to onerous donation. In De Luna v. Abrigo,286 however, our
Supreme Court made a ruling to the effect that Article 764 of the New
Civil Code does not apply to onerous donations in view of the specific
provision of Article 733 providing that onerous donations are governed
by the rules on contracts. Invoking the provisions of Article 733, the
Court further held that in determining the prescriptive period of an action
to revoke an onerous donation the rules on contracts and the general
rules on prescription and not the rules on donations are applicable to
onerous donations.287 Applying the rule of the Supreme Court in De Luna
v. Abrigo, which cited Article 1144(1) of the New Civil Code as legal
basis, the prescriptive period of an action for revocation of an onerous
donation by reason of non-compliance with the condition/obligation
imposed is ten (10) years counted from the time within which the donee
must comply with the conditions/obligations of the donation.
De Luna v. Abrigo
181 SCRA 150 (1990)
In 1965, Prudencio de Luna donated a portion of his lot to the Luzonian
Colleges, Inc. The donation was subject to certain terms and conditions and
provided for the automatic reversion to the donor of the donated property in
case of non-compliance. The donee failed to comply with the conditions of
the donation. On April 9, 1971, however, the donor revived the donation in
favor of the donee. As in the original deed of donation, the revived deed of
donation also provided for the automatic reversion to the donor of the donated
area in case of violation of the conditions thereof. In the revived deed, the
donor imposed upon the donee the obligations to construct a chapel, a nursery
and a kindergarten school in the donated property within five years from the
execution of the deed of donation. Claiming that the terms and conditions of
the donation were not complied with by the donee, the heirs of the donor (who
284
Id., 521.
285
See II Caguioa, Civil Code, 1966 ed., 421.
286
181 SCRA 150, 156 (1990). See also Secretary of Education v. Heirs of Rufino Dulay,
Sr., 480 SCRA 452.
287
Id.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP
DONATION
Revocation and Reduction of Donations
died on August 18, 1980) filed an action for the cancellation of the donation
on September 23, 1980. The trial court, however, dismissed the action on the
ground that more than four (4) years had already lapsed from April 9, 1976
when the action was filed. The trial court based its decision on Article 764 of
the New Civil Code. The heirs of de Luna elevated the matter to the Supreme
Court. In reversing the decision of the trial court, the Court explained —
It is the finding of the trial court, which is not disputed by
the parties, that the donation subject of this case is one with an
onerous cause. It was made subject to the burden requiring the
donee to construct a chapel, a nursery and a kindergarten school in
the donated property within five years from execution of the deed
of donation.
Under the old Civil Code, it is a settled rule that donations
with an onerous cause are governed not by the law on donations
but by the rules on contracts, as held in the cases of Carlos v.
Ramil, L-6736, September 5, 1911, 20 Phil. 183; Manalo v. de
Mesa, L-9449, February 12, 1915, 29 Phil. 495. On the matter of
prescription of actions for the revocation of onerous donation, it
was held that the general rules on prescription applies. (Parks v.
Province of Tarlac, supra.). The same rules apply under the New
Civil Code as provided in Article 733 thereof which provides:
“Art. 733. Donations with an onerous cause shall be
governed by the rules on contracts, and remuneratory donations
by the provisions of the present Title as regards that portion which
exceeds the value of the burden imposed.”
It is true that under Article 764 of the New Civil Code,
actions for the revocation of a donation must be brought within
four (4) years from the non-compliance of the conditions of the
donation. However, it is Our opinion that said article does not
apply to onerous donations in view of the specific provision of
Article 733 providing that onerous donations are governed by the
rules on contracts.
In the light of the above, the rules on contracts and the
general rules on prescription and not the rules on donations are
applicable in the case at bar.
xxx xxx xxx
The trial court was therefore not correct in holding that the
complaint in the case at bar is barred by prescription under Article
764 of the New Civil Code because Article 764 does not apply to
onerous donations.
DIFFERENT MODES OF ACQUIRING OWNERSHIP
DONATION
Revocation and Reduction of Donations
property but also the fruits thereof which he may have received after
having failed to fulfill the condition.291
[144.3.3] Prescriptive Period of Action Based under Article
764
The action for revocation based on Article 764 shall prescribe
after four (4) years from the non-compliance with the condition.292 Such
action is transmissible to the heirs of the donor and may be exercised
against the heirs of the donee.
[144.3.4] Article 764 Does Not Apply When Donation
Expressly Provides For Automatic Reversion
The prescriptive period in Article 764 does not apply when the deed
of donation expressly provides for automatic reversion of the property
donated in case of violation of the condition therein because in such
a case a judicial declaration revoking the donation is not necessary.293
In other words, Article 764 of the New Civil Code is intended to
provide a judicial remedy in case of non-fulfillment or contravention
of conditions specified in the deed of donation if and when the parties
have not agreed on the automatic revocation of such donation upon
the concurrence of the contingency contemplated therein.294 Instead, the
applicable prescriptive period is ten (10) years as provided for in Article
1144(1), since the action is for the enforcement of a written contract.295
Roman Catholic Archbishop of Manila v. Court of Appeals
198 SCRA 300 (1991)
In 1930, the spouses Eusebio de Castro and Martina Rieta, executed a deed
of donation in favor of the Roman Catholic Archbishop of Manila covering a
parcel of land located at Kawit, Cavite. The deed of donation provides that the
donee shall not dispose or sell the property within a period of 100 years from
the execution of the deed of donation, otherwise a violation of such condition
would render ipso facto null and void the deed of donation and the property
291
Art. 768, 2nd par., NCC.
292
Art. 764, 3rd par., NCC.
293
Roman Catholic Archbishop of Manila v. Court of Appeals, 198 SCRA 300.
294
Id., at p. 309.
295
Id.
701 702 PROPERTY
As provided in the donation executed on April 9, 1971,
compliance with the terms and conditions of the contract of
donation, shall be made within five (5) years from its execution.
The complaint which was filed on September 23, 1980 was then
well within the ten (10) year prescriptive period to enforce a
written contract (Article 1144[1], New Civil Code), counted from
April 9, 1976.
xxx xxx xxx
[COMMENT: The problem with the ruling in De Luna is that it
renders inoperative the provision of Article 764 of the New Civil Code.
If Article 764 indeed speaks not of “conditions” as the Civil Code
defines it but rather of charges or burdens imposed by the donor upon
the donee, in which case the donation being referred to in Article 764
is an onerous one, the provision of Article 764 must be considered an
exception to the rule in Article 733 providing that onerous donations
are governed by the rules on contracts. After all, it is a basic rule in
statutory construction that when there is a conflict between a general
law and a special statute, the special statute should prevail since it
evinces the legislative intent more clearly than the general statute and
that the special law is to be taken as an exception to the general law in
the absence of special circumstances forcing a contrary conclusion.288 It
is obvious that the four-year prescriptive period specifically provided
for in Article 764 is to be considered as a special law compared to the
general rules on prescription resorted in the De Luna case.]
[144.3.2] Effects of Revocation under Article 764
When the donation is revoked for failure to comply with the charges
imposed on the donation, the property donated shall be returned to the
donor.289 Any alienation or encumbrance made by the donee with respect
to the donated property shall be considered void, subject, however, to
the rights of a buyer or mortgagee in good faith.290
If the revocation is based upon noncompliance with any of the
conditions imposed in the donation, the donee shall return not only the
288
Laguna Lake Authority v. Court of Appeals, 251 SCRA 42, 56.
289
Art. 764, 2nd par., NCC.
290
Id.
703 704 PROPERTY
would revert to the estate of the donors. In 1980, and while still within the
prohibited period, the Roman Catholic Bishop of Imus, sold the property to
spouses Florencio and Soledad Ignao. As a consequence, the spouses were
issued a new title to the property in their names on November 15, 1980. When
the heirs of Eusebio Castro and Martina Rieta learned about the sale, they filed
an action for the nullification of the deed of donation, rescission of the sale in
favor of the spouses Ignao and reconveyance of the property on November
29, 1984. The Roman Catholic Bishops of Manila and Imus, together with
the spouses Ignao, contended that the cause of action had already prescribed
based on Article 764 of the New Civil Code. The Court, however, ruled that
the prescriptive period in Article 764 does not apply in the given case since the
donation expressly provides for automatic reversion in case of violation of the
conditions therein. The Court explained —
Although it is true that under Article 764 of the Civil Code
an action for the revocation of a donation must be brought within
four (4) years from the non-compliance of the conditions of the
donation, the same is not applicable in the case at bar. The deed
of donation involved herein expressly provides for automatic
reversion of the property donated in case of violation of the
condition therein, hence a judicial declaration revoking the same
is not necessary, as aptly stated by the Court of Appeals:
“By the very express provision in the deed of donation itself
that the violation of the condition thereof would render ipso facto
null and void the deed of donation, WE are of the opinion that there
would be no legal necessity anymore to have the donation judicially
declared null and void for the reason that the very deed of donation
itself declares it so. For where (sic) it otherwise and that the donors
and the donee contemplated a court action during the execution of
the deed of donation to have the donation judicially rescinded or
declared null and void should the condition be violated, then the
phrase reading ‘would render ipso facto null and void’ would not
appear in the deed of donation.”
In support of its aforesaid position, respondent court relied
on the rule that a judicial action for rescission of a contract is not
necessary where the contract provides that it may be revoked
and cancelled for violation of any of its terms and conditions.
It called attention to the holding that there is nothing in the law
that prohibits the parties from entering into an agreement that a
violation of the terms of the contract would cause its cancellation
even without court intervention, and that it is not always necessary
for the injured party to resort to court for rescission of the contract.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP
DONATION
Revocation and Reduction of Donations
It reiterated the doctrine that a judicial action is proper only when
there is absence of a special provision granting the power of
cancellation.
It is true that the aforesaid rules were applied to the contracts
involved therein, but we see no reason why the same should
not apply to the donation in the present case. Article 732 of the
Civil Code provides that donations inter vivos shall be governed
by the general provisions on contracts and obligations in all that
is not determined in Title III, Book III on donations. Now, said
Title III does not have an explicit provision on the matter of a
donation with a resolutory condition and which is subject to an
express provision that the same shall be considered ipso facto
revoked upon the breach of said resolutory condition imposed in
the deed therefor, as is the case of the deed presently in question.
The suppletory application of the foregoing doctrinal rulings to the
present controversy is consequently justified.
The validity of such a stipulation in the deed of donation
providing for the automatic reversion of the donated property to
the donor upon non-compliance of the condition was upheld in the
recent case of De Luna, et al. v. Abrigo, et al. It was held therein
that said stipulation is in the nature of an agreement granting a
party the right to rescind a contract unilaterally in case of breach,
without need of going to court, and that, upon the happening of
the resolutory condition or non-compliance with the conditions of
the contract, the donation is automatically revoked without need
of a judicial declaration to that effect. While what was the subject
of that case was an onerous donation which, under Article 733 of
the Civil Code is governed by the rules on contracts, since the
donation in the case at bar is also subject to the same rules because
of its provision on automatic revocation upon the violation of a
resolutory condition, from parity of reasons said pronouncements
in De Luna pertinently apply.
The rationale for the foregoing is that in contracts providing
for automatic revocation, judicial intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing
for rescission even without judicial intervention, but in order to
determine whether or not the rescission was proper.
When a deed of donation, as in this case, expressly provides
for automatic revocation and reversion of the property donated,
the rules on contract and the general rules on prescription should
DIFFERENT MODES OF ACQUIRING OWNERSHIP
DONATION
Revocation and Reduction of Donations
possible for the donor to bring the action but he did not institute the
same, the right to file the same is not transmitted to his heirs even if he
dies before the expiration of the one-year period.298 A fortiori, if upon
the death of the donor the one-year period has not yet commenced to
run because it was not possible for the donor to bring the action during
his lifetime, the right to bring the same is transmitted to the heirs upon
the donor’s death. Neither may the action be filed against the heir of the
donee upon the death of the latter,299 even if the latter should die before
the expiration of the one-year period.
[144.5] Revocation By Reason Inofficiousness
The concept of inofficious donations is discussed in supra §
142.4.
[144.5.1] How to Determine Inofficiousness of Donations
As discussed in supra § 142.4, donations which exceeds the freely
disposable portion of the donor’s estate and thus impairs the legitime of
the compulsory heirs are inofficious and subject to reduction with regard
to the excess.300 In determining whether the donation is inofficious or
not, recourse must be had to the rules established by the Civil Code for
the determination of the legitime and, by extension, of the disposable
portion,301 taking into consideration the estimated net value of the donor’s
property at the time of his death.302 These rules are set forth in Articles
908, 909 and 910 of the Code, on the basis of which the following step-
by-step procedure has been outlined:
(1) determination of the value of the property which remains at
the time of the testator’s death;
(2) determination of the obligations, debts, and charges which
have to be paid out or deducted from the value of the property thus
left;
(3) the determination of the difference between the assets and
the liabilities, giving rise to the hereditary estate;
298
Art. 770, NCC.
299
Id.
300
Art. 771, NCC.
301
Vda. de Tupas v. br. XLIII, RTC of Negros Occidental, 144 SCRA 622, 626.
302
Id.
705 706 PROPERTY
apply, and not Article 764 of the Civil Code. Since Article 1306
of said Code authorizes the parties to a contract to establish such
stipulations, clauses, terms and conditions not contrary to law,
morals, good customs, public order or public policy, we are of
the opinion that, at the very least, that stipulation of the parties
providing for automatic revocation of the deed of donation,
without prior judicial action for that purpose, is valid subject to
the determination of the propriety of the rescission sought. Where
such propriety is sustained, the decision of the court will be merely
declaratory of the revocation, but it is not in itself the revocatory
act.
On the foregoing ratiocinations, the Court of Appeals
committed no error in holding that the cause of action of herein
private respondents has not yet prescribed since an action to
enforce a written contract prescribes in ten (10) years. It is our
view that Article 764 was intended to provide a judicial remedy
in case of non-fulfillment or contravention of conditions specified
in the deed of donation if and when the parties have not agreed on
the automatic revocation of such donation upon the occurrence of
the contingency contemplated therein. That is not the situation in
the case at bar.
[144.4] Revocation By Reason of Ingratitude
The donation may also be revoked at the instance of the donor,
by reason of ingratitude in the following cases: (1) If the donee should
commit some offense against the person, the honor or the property of the
donor, or of his wife or children under his parental authority; (2) If the
donee imputes to the donor any criminal offense, or any act involving
moral turpitude, even though he should prove it, unless the crime or the
act has been committed against the donee himself, his wife or children
under his authority; (3) If he unduly refuses him support when the donee
is legally or morally bound to give support to the donor.296
The action for revocation of the donation by reason of ingratitude
may not be renounced in advance and the same prescribes within a
period of one year counted from the time that the donor had knowledge
of the fact and it was possible for him to bring the action.297 If it was
296
Art. 765, NCC.
297
Art. 769, NCC.
707 708 PROPERTY
(4) the addition to the net value thus found, of the value, at the
time they were made, of donations subject to collation; and
(5) the determination of the amount of the legitimes by getting
from the total thus found the portion that the law provides as the legitime
of each respective compulsory heir.303
Deducting the legitimes from the net value of the hereditary estate
leaves the freely disposable portion by which the donation in question
must be measured. If the value of the donation at the time it was made
does not exceed that difference, then it must be allowed to stand. But if
it does, the donation is inofficious as to the excess and must be reduced
by the amount of said excess.304
[144.5.2] Status of Such Donation During Donor’s Lifetime
While a donation may be found to be inofficious at the time of the
donor’s death, it takes effect nonetheless during the donor’s lifetime.305
And the mere fact that the donation turns out to be inofficious at the
time of the donor’s death does not result in the automatic revocation of
the donation. The provision of Article 752, in relation to Article 771, is
not self-executory. In other words, if no action for revocation is filed,
or if it is filed after the lapse of the prescriptive period, the donation is
forever considered as valid.
[144.5.3] Who May Question Inofficiousness of Donations
Only those who at the time of the donor’s death have a right to
the legitime and their heirs and successors in interest may ask for the
reduction or revocation of inofficious donations.306 In other words,
persons who are not entitled to the legitime (therefore not considered
as compulsory heirs), such as donees, devisees, legatees and creditors
of the deceased donor, cannot ask for the reduction or revocation of
inofficious donations.307 During the lifetime of the donor, the compulsory
heirs who are entitled to ask for the reduction or revocation of inofficious
303
Id., 626.
304
Id.
305
Art. 771, NCC.
306
Art. 772, 1st par., NCC.
307
Art. 772, 3rd par., NCC.
 DIFFERENT MODES OF ACQUIRING OWNERSHIP 709 710 PROPERTY
DONATION
Revocation and Reduction of Donations

donations cannot renounce their right, whether the renunciation be done heirs who were prejudiced by such donation.316 If there are two or more
expressly or impliedly.308 donations and the disposable portion is not sufficient to cover all of
them, those of the more recent date shall be suppressed or reduced with
[144.5.4] Prescriptive Period on the Ground of Inofficious- regard to the excess.317 If they are of the same date, they shall be reduced
ness proportionately.
The Civil Code specifies the following prescriptive periods of As in the case of revocation of donations for any of the causes
actions for the reduction or revocation of donations inter vivos: (1) four stated in Article 760 and by reason of ingratitude, when the donation
years, in cases of subsequent birth, appearance, recognition or adoption is reduced because it is inofficious, the donee shall not return the fruits
of a child;309 (2) four years, for non-compliance with conditions of the except from the filing of the complaint.318
donation;310 (3) one year, for reason of ingratitude;311 and (4) at any time
during the lifetime of the donor and his relatives entitled to support,
for failure of the donor to reserve property for his or their support.312 — oOo —
Interestingly, donations the reduction of which hinges upon the
allegation of impairment of legitime are not controlled by a particular
prescriptive period. What, then, is the prescriptive period for an action
for reduction or revocation of an inofficious donation?
In Imperial v. Court of Appeals,313 the Supreme Court held that an
action for reduction or revocation of an inofficious donation prescribes
in ten (10) years following Article 1144 of the New Civil Code.314 From
when shall the ten-year period be reckoned? Since the cause of action
to enforce a legitime accrues only upon the death of the donor-decedent
for it is only then that the net estate may be ascertained and on which
basis, the legitimes may be determined, the ten year period commences
to run only upon the death of the donor-decedent.315

[144.5.5] Effect of Reduction or Revocation of Inofficious

Donations
When a donation is found to be inofficious, the same will be
reduced to the extent necessary to satisfy the legitimes of compulsory

308
Art. 772, 2nd par., NCC.
309
Art. 763, NCC.
310
Art. 764, NCC.
311
Art. 769, NCC.
312
Art. 750, NCC.
313
316 SCRA 393 (1999).
314 316
Also in Santos v. Alana, 467 SCRA 176, 182-183. Art. 771, NCC.
315 317
Imperial v. CA, supra, p. 403, citing Mateo v. Lagua, 29 SCRA 864. See also Santos v. Art. 773, NCC.
318
Alana, supra. Art. 768, 1st par., NCC.

Philippine Copyright, 2008

by

ELMER T. RABUYA

PROPERTY ISBN 978-971-23-5222-5

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 PREFACE

This work is a product of the author’s more than ten years expe-
rience in teaching the subject. It started as an outline, then turned into
lecture notes and finally, into this book. It is designed for use primarily
by law students and bar reviewees but law practitioners may likewise
find it as a useful guide in the area of Philippine Property Law.
In discussing the subject, the author relied heavily on decisions
promulgated by the Philippine Supreme Court. However, the illuminating
opinions of recognized authorities in the subject matter, both local and
foreign, have likewise been availed of. Some foreign decisions have
likewise been cited in this work to throw light on areas where there is
dearth of materials in the local sources.
It is earnestly hoped that this book will be of help to all disciples
of law.

THE AUTHOR

Manila, Philippines
10 March 2008

iii iv

This book is lovingly dedicated

To my wife, Atty. Melva P. Cobarrubias-Rabuya,
To my son, John Darrel C. Rabuya,
and
To my parents, Martin, Sr. and Azucena.

v vi
 [4.4] Instances Where Building Is Treated As Personal
Property By the Parties ................................................ 14
[4.5] Doctrine of Estoppel; Navarro and Tumalad Cases .... 15
[4.6] Compared with the cases of Associated Ins.
& Surety Co. v. Iya, Evangelista v. Alto Surety
& Ins. Co., Inc., Manarang v. Ofilada and
CONTENTS Piansay v. David .......................................................... 17
[4.7] Classification of property into real or personal
property, a question of law — the Standard Oil case .. 22
BOOK II (C) Construction Adhered To the Soil ............................... 24
PROPERTY, OWNERSHIP, AND ITS [4.8] Constructions of All Kinds Adhered To the Soil ......... 24
MODIFICATION § 5. Real Property under Article 415(2) ............................................ 26
(A) Trees and Plants ........................................................... 26
[5.1] Trees and Plants ........................................................... 26
Title I. CLASSIFICATION OF PROPERTY (B) Growing Fruits............................................................. 26
PRELIMINARY PROVISIONS [5.2] Growing Fruits............................................................. 26
§ 6. Real Property under Article 415(3) ............................................ 27
Page “Everything attached to an immovable in a fixed manner” ....... 27
§ 1. Introductory Concepts................................................................ 1 [6.1] Attachment Must Be In A Fixed Manner .................... 27
[6.2] Need Not Be Attached By the Owner.......................... 27
[1.1] Origin of the Word “Property” .................................... 1
[6.3] However, Intent of the Parties May Govern ................ 27
[1.2] Concept of “Things” .................................................... 2
[1.3] Concept of “Property” under the Civil Code ............... 3 § 7. Real property under Article 415(4) ............................................ 29
[1.4] Susceptibility to Appropriation.................................... 3 “Statues, reliefs, paintings or other objects for use or
[1.5] Additional Requisites .................................................. 4 ornamentation” ........................................................................... 29
§ 2. Classification of Property........................................................... 5 [7.1] Requisites .................................................................... 29
[7.2] Distinguish From Paragraph 3 ..................................... 29
[2.1] Classification under Book II of the Civil Code ........... 5
[2.2] Importance of Classification ........................................ 5 § 8. Real Property under Article 415(5) ............................................ 30
“Machineries, receptacles, instruments or implements” ............ 30
Chapter 1 [8.1] Immovable By Destination in Par. (5); Requisites ...... 30
IMMOVABLE PROPERTY [8.2] Properties Contemplated Under Paragraph 5 .............. 30
[8.3] They Must Be Placed By the Owner or
§ 3. Immovable Property................................................................... 8 By His Agent ............................................................... 30
[3.1] No Definition under the Code...................................... 8 [8.4] They Must Tend Directly To Meet the Needs
[3.2] Kinds of Immovable (Real) Property .......................... 8 of Said Industry or Work ............................................. 34
[8.5] They Must Be “Essential” And “Principal”
§ 4. Real Property under Article 415(1) ............................................ 9 Elements of the Industry or Works .............................. 36
(A) Lands and Roads.......................................................... 9 [8.6] The Industry or Works Must Be Carried On In A
[4.1] Lands and roads ........................................................... 9 Building or On A Piece of Land .................................. 37
(B) Buildings...................................................................... 9 [8.7] Application of the Doctrine of Estoppel
[4.2] Building Is Immovable By Incorporation.................... 9 In Article 415(5) .......................................................... 38
[4.3] Buildings Are Always Immovable............................... 10

vii viii

§ 9. Real property under Article 415(6) ............................................ 41 [17.1] Public Dominion and Private Ownership .................... 52
“Animal houses, pigeon-houses, etc. …” .................................. 41 [17.2] Classification of Property From the Point
[9.1] Animal Houses and Pigeon Houses, Etc. .................... 41 of View of Ownership.................................................. 53
[9.2] Animals Included......................................................... 41 § 18. Property of State: Public Dominion ........................................... 53
§ 10. Real Property under Article 415(7): “Fertilizers” ...................... 41 [18.1] Kinds of Property of Public Dominion Pertaining
§ 11. Real Property under Article 415(8) ............................................ 42 To the State .................................................................. 53
“Mines, quarries, slag dumps, waters ” ..................................... 42 [18.2] “Public Dominion,” as Referring To “Public
[11.1] Mines, Quarries and Slag Dumps ................................ 42 Ownership” .................................................................. 53
[11.2] Waters .......................................................................... 42 [18.3] “Public Dominion,” as Referring To “State
Ownership” .................................................................. 54
§ 12. Real Property under Article 415(9): “Docks [18.4] “Public Ownership” Distinguished From
and Structures” ........................................................................... 42 “State Ownership” ....................................................... 55
§ 13. Real Property under Article 415(10) .......................................... 42 [18.5] Intent to Devote, Sufficient.......................................... 55
[13.1] Rights as Property........................................................ 42 [18.6] Public Use and Public Service, Distinguished ............ 56
[13.2] How Rights Classified ................................................. 43 §19. Property of Public Dominion: For Public Use ........................... 57
§ 14. Definition of Real Property in Real Estate Taxation .................. 43 [19.1] Enumeration of Properties of the State
[14.1] Concept of Real Property in Realty Taxation .............. 43 for “Public Use” .......................................................... 57
[14.2] Machinery and Improvements Subject (A) Roads ........................................................................... 58
to Realty Tax ................................................................ 45 [19.2] Roads ........................................................................... 58
(B) Canals .......................................................................... 58
Chapter 2 [19.3] Canals .......................................................................... 58
(C) Rivers ........................................................................... 60
MOVABLE PROPERTY [19.4] “River” Is A Composite Term ...................................... 60
§ 15. Movable Property....................................................................... 49 [19.5] Natural Bed of A River ................................................ 60
[19.6] Extent of River Bed ..................................................... 61
[15.1] No Precise Definition of the Term ............................... 49
[19.7] Banks of Rivers ........................................................... 62
[15.2] What May Be Considered “Movable” Property,
[19.8] Accretion on Riverbanks ............................................. 63
In General .................................................................... 49
(D) Ports ............................................................................. 63
[15.3] Realty Considered as Personalty By Special
[19.9] Ports ............................................................................. 63
Provisions of Law ........................................................ 50
(E) Shores .......................................................................... 64
[15.4] Forces of Nature .......................................................... 50
[19.10] Shore, Defined ............................................................. 64
[15.5] Chose In Action ........................................................... 50
[19.11] Shore, Property of Public Dominion ........................... 65
[15.6] Obligations In General ................................................ 51
[19.12] Accretions on Seashore ............................................... 65
§ 16. Consumable and Non-consumable ............................................ 51 (F) Foreshore Lands .......................................................... 66
[16.1] Consumable and Non-Consumable ............................. 51 [19.13] Part of Public Dominion .............................................. 66
[16.2] Distinguished From Fungible and Non-Fungible ........ 52 (G) Lakes............................................................................ 68
[19.14] Ownership of Lakes ..................................................... 68
Chapter 3 [19.15] Natural Bed of Lakes, Defined .................................... 68
(H) “Others of Similar Character” ..................................... 69
PROPERTY IN RELATION TO THE PERSON [19.16] Creeks .......................................................................... 69
TO WHOM IT BELONGS
§ 20. Property of Public Dominion: For Public Service ..................... 70
§ 17. Public Dominion and Private Ownership .................................. 52

ix x
§ 21. Property of Public Dominion: For the Development § 27. Patrimonial Property of Political Subdivisions .......................... 96
of National Wealth ..................................................................... 70 [27.1] Reclaimed Lands Belonging to Political Subdivisions ... 97
[21.1] The Regalian Doctrine and State Ownership
§ 28. Other Classification.................................................................... 99
of Natural Resources ................................................... 71
§ 29. Private Property ......................................................................... 101
(A) Natural Resources ........................................................ 73
[21.2] Fishponds ..................................................................... 73
[21.3] Watershed Reservation ................................................ 73 Title II. OWNERSHIP
[21.4] Submerged Lands ........................................................ 74 Chapter 1
(B) Lands of the Public Domain ........................................ 74
[21.5] Classification ............................................................... 74 OWNERSHIP IN GENERAL
[21.6] Classification of Public Lands, Prerogative § 30. Concept of Ownership ............................................................... 103
of the Executive ........................................................... 74
[30.1] Property and Ownership, Distinguished ...................... 103
[21.7] When Public Lands Classified As Patrimonial
[30.2] Ownership, Defined ..................................................... 104
Property ....................................................................... 75
[30.3] Ownership Is A Real Right .......................................... 105
§ 22. Characteristics of Properties of Public Dominion ..................... 76 [30.4] Other Real Rights Aside From Ownership .................. 106
[22.1] They Are Outside the Commerce of Man.................... 76 [30.5] Objects of Ownership .................................................. 106
[22.2] They Are Not Susceptible To Private § 31. Attributes of Ownership............................................................. 107
Appropriation and Acquisitive Prescription ................ 77 § 32. Right to Enjoy ............................................................................ 107
[22.3] They Are Not Subject To Attachment
[32.1] Right To Use and Abuse .............................................. 108
and Execution .............................................................. 78
[22.4] They Cannot Be Burdened With Voluntary § 33. Right to Dispose......................................................................... 108
Easements .................................................................... 79 § 34. Right to Recover ........................................................................ 109
§ 23. Patrimonial Property of the State ............................................... 80 [34.1] Right to Possession ...................................................... 109
[34.2] Actions for Recovery of Possession ............................ 110
[23.1] Examples of Patrimonial Property............................... 80
§ 35. Doctrine of Self-help.................................................................. 115
[23.2] Disposition of Patrimonial Property ............................ 82
[23.3] Not Susceptible To Acquisitive Prescription ............... 82 [35.1] Statement of the Doctrine ............................................ 115
[35.2] Who May Invoke the Doctrine .................................... 115
§ 24. Conversion: From Public Dominion to Patrimonial
[35.3] When May the Doctrine Be Invoked ........................... 116
Property ...................................................................................... 84
[35.4] Defense of Property as Justifying Circumstance ........ 117
§ 25. Property of Provinces, Cities and Municipalities ...................... 87
§ 36. Right to Enclose or Fence .......................................................... 120
[25.1] Classification of Properties of Political § 37. Limitations on Ownership.......................................................... 122
Subdivisions ................................................................ 87
[37.1] General Limitations Pursuant To the Exercise
§ 26. Property for Public Use of Provinces, Cities of the Inherent Powers of the State.............................. 122
and Municipalities...................................................................... 88 [37.2] Specific Limitations Imposed By Law ........................ 126
[26.1] Governed By Same Principles as Property [37.3] Inherent Limitations Arising From Conflicts
of Public Dominion ..................................................... 88 With Other Similar Rights ........................................... 127
[26.2] Provincial Roads, City Streets and [37.4] Limitations Imposed By the Owner Himself............... 134
Municipal Streets ......................................................... 90 § 38. Recovery of Property ................................................................. 137
[26.3] Squares, Fountains, Public Waters,
[38.1] Presumption of Ownership .......................................... 137
Promenades, Etc. ......................................................... 94
[38.2] Requisites of Accion Reivindicatoria .......................... 139

xi xii

§ 39. Right to Sub-surface and Airspace ............................................. 142 [45.1] Situation Contemplated in Article 447 ........................ 181
[39.1] Right To the Sub-Surface or Subsoil .......................... 143 [45.2] Determining the Legal Consequences ......................... 181
[39.2] Right to Hidden Treasure............................................. 148 § 46. Building With One’s Own Materials on the Land
[39.3] Right to the Airspace ................................................... 158 of Another .................................................................................. 187
§ 47. Both Acted In Good Faith .......................................................... 187
Chapter 2 [47.1] Concept of Good Faith ................................................ 187
RIGHT OF ACCESSION [47.2] Good Faith of the Landowner...................................... 208
GENERAL PROVISIONS [47.3] Legal Effects Where Both Parties Are
In Good Faith ............................................................... 208
§ 40. Accession ................................................................................... 168 [47.4] Option to Appropriate .................................................. 219
[40.1] Definition and Concept ................................................ 168 [47.5] Option To Sell the Land............................................... 222
[40.2] Kinds of Accession ...................................................... 169 § 48. Landowner In Good Faith; Builder In Bad Faith ....................... 226
Section 1. Right of Accession with Respect to [48.1] Concept of Bad Faith ................................................... 226
What is Produced by Property [48.2] Legal Consequences; Alternative Rights
of the Landowner ......................................................... 226
§ 41. Accesion Discreta ...................................................................... 170 [48.3] Limited Rights of Builder, Planter or Sower
[41.1] Basic Rule .................................................................... 170 in Bad Faith ................................................................. 228
[41.2] Exceptions to the Rule ................................................. 170 § 49. Both Acted In Bad Faith ............................................................ 229
[41.3] Kinds of Fruits ............................................................. 171
[41.4] Existence of Fruits, When Recognized........................ 173 [49.1] Rules That Will Govern If Both Parties Acted
In Bad Faith ................................................................. 229
[49.2] Bad Faith of the Landowner ........................................ 229
§ 42. Production Expenses .................................................................. 174
§ 50. Landowner In Bad Faith; Builder In Good Faith ....................... 230
[42.1] Situation Contemplated in Article 443 ........................ 174 § 51. Building on Another’s Land Using Another’s Materials ........... 231
[42.2] Applicability of Article 443 ......................................... 174
[42.3] Article 443 Does Not Apply To Pending Fruits .......... 175 [51.1] Situation Contemplated in Art. 455 ............................. 231
[42.4] When Refundable ........................................................ 175 [51.2] If the Owner of the Materials Acted
in Bad Faith ................................................................. 231
Section 2. Right of Accession with Respect to [51.3] If the Owner of the Material Acted in
Immovable Property Good Faith ................................................................... 232

§ 43. Accesion Continua ..................................................................... 176 B. NATURAL ACCESSION

[43.1] Presupposes Absence of Agreement ............................ 176 § 52. Natural Accession ...................................................................... 233
[43.2] Basic Principles Governing Accesion Continua .......... 177
[52.1] Four Forms .................................................................. 233
A. INDUSTRIAL ACCESSION § 53. Alluvion ..................................................................................... 234
§ 44. Industrial Accession ................................................................... 178 [53.1] Definition ..................................................................... 234
[53.2] Riparian Owners Distinguished From
[44.1] Three Forms................................................................. 178
Littoral Owners ............................................................ 234
[44.2] Building, Planting or Sowing on One’s Own Land ..... 179
[53.3] Rule on Alluvion.......................................................... 234
[44.3] Controversial Cases ..................................................... 180
[53.4] Requisites of Alluvion ................................................. 235
§ 45. Using Materials Belonging To Another ..................................... 181 [53.5] Right of Riparian Owner to Alluvium Is Ipso Jure ..... 241

xiii xiv
 [53.6] Exception to the Rule on Alluvion .............................. 242 Chapter 4
§ 54. Avulsion ..................................................................................... 243 RUINOUS BUILDINGS AND TREES
[54.1] Definition ..................................................................... 243 IN DANGER OF FALLING
[54.2] Comparison With Alluvion .......................................... 243 § 61. Ruinous Buildings and Falling Trees ......................................... 269
[54.3] Rule on Avulsion ......................................................... 244
[54.4] Avulsion With Respect To Uprooted Trees ................. 244 [61.1] Exercise of Police Power ............................................. 269
[61.2] Obligations of Owners of Ruinous Buildings ............. 270
§ 55. Change of Course of River ........................................................ 245 [61.3] Obligations of Owners of Falling Trees ...................... 270
[55.1] Effect of Change of Course of River ........................... 245
[55.2] Applicability of Article 461 ......................................... 246 Title III. CO-OWNERSHIP
[55.3] Extension of Ownership Ipso Jure .............................. 248
[55.4] Restoration of the River to Its Former Course ............ 249 § 62. In General................................................................................... 272
[55.5] When River Dries Up .................................................. 250 [62.1] Definition ..................................................................... 272
[55.6] Status of New Bed ....................................................... 250 [62.2] Requisites of Co-ownership ........................................ 272
§ 56. Formation of Island .................................................................... 251 [62.3] Dual Nature of Ownership in Co-Ownership .............. 274
[62.4] Effect of Division or Partition ..................................... 274
[56.1] Three Kinds of Islands................................................. 251
[62.5] A Co-Owner Cannot Claim A Definite Portion ........... 275
[62.6] Distinguished From Partnership .................................. 277
Section 3. Right of Accession with
[62.7] Sources of Co-ownership ............................................ 279
Respect to Movable Property
[62.8] Rules Governing Co-Ownership ................................. 280
§ 57. Adjunction or Conjunction ........................................................ 255 § 63. Share in Benefits and Charges ................................................... 281
[57.1] Forms of Accesion Continua With Respect [63.1] Determining the Ideal Share of Each Co-Owner ......... 281
To Movables ................................................................ 255 [63.2] Determining the Share In Benefits and Charges .......... 282
[57.2] Adjunction or Conjunction, Explained ........................ 255 [63.3] Any Stipulation To The Contrary Is Void .................... 282
[57.3] How It Takes Place ...................................................... 255
§ 64. Right Over the Entire Property .................................................. 283
[57.4] Legal Effects of Adjunction ......................................... 256
[57.5] Tests In Determining The Principal ............................. 258 [64.1] Nature of Co-Owner’s Right Over the Entire
Thing or Right ............................................................. 283
§ 58. Commixtion or Confusion ......................................................... 259
[64.2] Use of the Thing Owned in Common .......................... 283
[58.1] Commixtion or Confusion, Explained ......................... 259 [64.3] Limitations on the Right to Use................................... 284
[58.2] Legal Effects of Commixtion or Confusion ................ 259 [64.4] Determining the Purpose ............................................. 289
§ 59. Specification............................................................................... 261 § 65. Action in Ejectment ................................................................... 289
[59.1] Specification, Explained .............................................. 261 [65.1] Scope of Term “Ejectment” ......................................... 289
[59.2] Legal Effects ................................................................ 261 [65.2] Action Must Be Instituted For All ............................... 290
[65.3] Action Available Even Against A Co-Owner .............. 292
Chapter 3 [65.4] Effect of Judgment Upon the Other Co-Owners ......... 295
QUIETING OF TITLE § 66. Expenses for Preservation .......................................................... 296
§ 60. Quieting of Title ......................................................................... 262 [66.1] Right To Demand Contribution ................................... 296
[66.2] When Notice Required ................................................ 296
[60.1] Action to Quiet Title .................................................... 262
[66.3] Effect of Failure to Comply With the Notice
[60.2] Requisites of Action to Quiet Title .............................. 264
Requirement ................................................................ 297
[60.3] Prescription .................................................................. 267

xv xvi

[66.4] Renunciation By A Co-Owner ..................................... 297 [71.3] Presupposes Existence of Co-Ownership .................... 319
[66.5] Requirement of Consent in Renunciation.................... 298 [71.4] Share Must Be Sold To A Third Party ......................... 320
[66.6] Limitation on the Exercise of the Option [71.5] A Co-Owner Has Right of Redemption,
of Renunciation ........................................................... 298 Not Pre-Emption .......................................................... 320
[66.7] Includes Payment of Taxes .......................................... 299 [71.6] Period of Redemption .................................................. 320
§ 67. Different Stories Belonging to Different Owners ...................... 300 [71.7] Written Notice Not Necessary If There
Is Actual Notice ........................................................... 321
[67.1] Applicability of Article 490 ......................................... 300 [71.8] Article 1620 Distinguished From Article 1088 ........... 321
[67.2] Rules Governing Necessary Expenses ........................ 300
[67.3] Condominium, Defined ............................................... 301 § 72. Extinguishment of Co-ownership .............................................. 322
[67.4] Nature of Ownership in Condominium Projects ......... 301 [72.1] Causes of Extinguishment of Co-ownership ............... 322
[67.5] Rules Governing Expenses on the “Common [72.2] Merger ......................................................................... 322
Areas” .......................................................................... 301 [72.3] Destruction of Thing or Lost of Right ......................... 323
[67.6] Assessment as Lien Upon Unit.................................... 302 [72.4] Redemption By One Co-Owner of the
§ 68. Acts of Alteration ....................................................................... 303 Entire Property............................................................. 323
[68.1] Rule as to “Acts of Alterations” .................................. 303 § 73. Prescription ................................................................................ 328
[68.2] Meaning of “Act of Alteration” ................................... 304 [73.1] General Rule: Prescription Does Not Lie .................... 328
[68.3] Form of Consent .......................................................... 304 [73.2] Exception: When Co-Ownership Is Repudiated .......... 328
[68.4] Effect of Unauthorized Alterations .............................. 304 [73.3] Requisites .................................................................... 329
§ 69. Acts of Administration ............................................................... 305 § 74. Partition ...................................................................................... 331
[69.1] Rule as to “Acts of Administration” ............................ 305 [74.1] Definition ..................................................................... 331
[69.2] Meaning of “Acts of Administration” ......................... 305 [74.2] Right of Co-Owner to Demand Partition..................... 331
[69.3] No Majority or Act Of Majority Is Seriously [74.3] Period of Prescription .................................................. 332
Prejudicial .................................................................... 306 [74.4] Action For Partition, Explained ................................... 341
§ 70. Right Over the Ideal Share ......................................................... 306 [74.5] When Partition Not Available ...................................... 342
[74.6] When thing is essentially indivisible ........................... 343
[70.1] Nature of Co-Owner’s Right Over His Pro [74.7] Legal Effects of Partition ............................................. 347
Indiviso Share .............................................................. 306
[70.2] Effect of Alienation or Mortgage
Title IV. SOME SPECIAL PROPERTIES
of Undivided Share ...................................................... 307
[70.3] Alienation of Definite or Concrete Portion ................. 307 Chapter 1
[70.4] Alienation of Entire Co-owned Property ..................... 312
WATERS
[70.5] Applicability of Doctrine of “Buyer in
Good Faith” ................................................................. 313 § 75. Governing Laws on Waters ........................................................ 350
[70.6] Sale of Conjugal Property Without the Consent § 76. Ownership of Waters .................................................................. 351
of the Other Spouse ..................................................... 316 [76.1] State Ownership of Waters .......................................... 352
[70.7] Sale of Community Property Without the [76.2] Subterranean or Ground Waters................................... 353
Consent of Other Spouse ............................................. 317
§ 77. Appropriation of Waters............................................................. 355
[70.8] Co-ownership in Article 147 of the Family Code ....... 318
§ 71. Right of Legal Redemption........................................................ 318 Chapter 2
[71.1] Legal Redemption in Co-Ownership ........................... 318 MINERALS
[71.2] Requisites For the Exercise of Legal Redemption ...... 319
§ 78. Governing Laws ......................................................................... 375

xvii xviii
 Chapter 3 § 86. Instances Where Possession Is Not Acquired ............................ 414
TRADEMARKS AND TRADE NAMES [86.1] Use of Force or Intimidation ....................................... 414
[86.2] Acts Merely Tolerated ................................................. 416
§ 79. Governing Laws ......................................................................... 376 [86.3] Clandestine and Unknown Acts................................... 419
§ 87. Conflict Over Possession de Facto ............................................ 420
Title V. POSSESSION

Chapter 1 Chapter 3

POSSESSION AND THE KINDS THEREOF EFFECTS OF POSSESSION

§ 88. Right to Protection of Possessors............................................... 424
§ 80. Concept of Possession................................................................ 377
[88.1] Protects Every Kinds of Possessors ............................. 424
[80.1] Definition ..................................................................... 377
[88.2] Actions to Recover Possession .................................... 425
[80.2] Elements of Possession................................................ 378
[88.3] Writ of Preliminary Mandatory Injunction .................. 426
[80.3] Possession as Fact and Right ....................................... 380
[80.4] Degrees of Possession ................................................. 381 § 89. Possession in the Concept of Owner.......................................... 428
[80.5] Classification of Possession under the Civil Code ...... 381 [89.1] Presumption of Just Title ............................................. 429
§ 81. Possession in One’s Own Name or In the Name of Another ..... 382 [89.2] Meaning of “Just Title” ............................................... 429
§ 82. Possession in the Concept of Owner or Holder ......................... 388 [89.3] In Relation to Acquisitive Prescription........................ 430
§ 83. Possession in Good Faith or in Bad Faith .................................. 392 § 90. Co-possession ............................................................................ 431
[83.1] Concept of Possessor In Good Faith; In Bad Faith ..... 392 § 91. Right of Possessors to Fruits ...................................................... 433
[83.2] Mistake of Law ............................................................ 397 I. Possessor in Good Faith
[83.3] Presumption of Good Faith ......................................... 399 A. Fruits Already Received ................................................... 434
[83.4] Object of Possession .................................................... 402
[91.1] Rule.............................................................................. 434
Chapter 2 [91.2] Interruption of Good Faith........................................... 434
[91.3] When Fruits Considered “Received”........................... 435
ACQUISITION OF POSSESSION
B. Pending Fruits .............................................................. 436
§ 84. Acquisition of Possession .......................................................... 404
[91.4] Rule.............................................................................. 436
[84.1] Modes of Acquiring Possession................................... 404 [91.5] Rules Do Not Apply to Trees....................................... 437
[84.2] Requisites for acquisition of possession ...................... 404
II. Possessor in Bad Faith
[84.3] Material Occupation .................................................... 405
A. Fruits Already Received ................................................... 437
[84.4] Doctrine of Constructive Possession ........................... 406
[84.5] Subjection to Action of Will ........................................ 407 [91.6] Rule.............................................................................. 437
[84.6] Proper Acts and Legal Formalities .............................. 408
B. Pending Fruits .............................................................. 438
[84.7] Acquisition of Possession Over Rights ....................... 408
[84.8] By Whom Possession Acquired................................... 408 [91.7] Rule.............................................................................. 438
[84.9] Capacity to Acquire Possession ................................... 409 [91.8] Rule With Respect to Trees ......................................... 439
§ 85. Transfer of Possession Through Succession .............................. 410 § 92. Right to Necessary, Useful and Ornamental Expenses .............. 440
[85.1] Effect of Succession .................................................... 410 [92.1] Kinds of Expenses ....................................................... 440
[85.2] Consequences of Wrongful Possession [92.2] Right of Possessors to Necessary Expenses ................ 441
By Decedent ................................................................ 411 [92.3] Right of Possessors to Useful Expenses ...................... 441

xix xx

[92.4] Right of Possessors to Expenses For Pure Luxury ..... 445 Chapter 3
[92.5] Rule on Improvement Caused by Nature .................... 446
OBLIGATIONS OF THE USUFRUCTUARY
[92.6] Improvements Which Ceased To Exist........................ 446
§ 97. Liability of Possessors for Loss or Deterioration ...................... 447 § 106. Obligations of Usufructuary ...................................................... 486
§ 98. Presumption of Continuity of Possession .................................. 448 § 107. Obligations at the Commencement of Usufruct......................... 486
§ 99. Modes of Losing Possession ...................................................... 449 [107.1] In General .................................................................... 486
[99.1] Abandonment .............................................................. 449 [107.2] Consequences of Failure to Comply with
[99.2] Assignment .................................................................. 451 the Foregoing Obligations ........................................... 486
[99.3] Destruction or Loss of the Thing ................................. 451 [107.3] Exemptions From The Obligation To Give Security ... 487
[99.4] Possession By Another ................................................ 451 [107.4] Instances Where Usufructuary May Be
Relieved of the Foregoing Obligations........................ 488
§ 100. Rule With Respect to Misplaced (Mislaid) Movables ............... 453
§ 101. Possession of Movables ............................................................. 454 § 108. Obligations During the Life of Usufruct .................................... 490

[101.1] Equivalent to Title ....................................................... 454 [108.1] Ordinary and Extraordinary Repairs ........................... 491
[101.2] Exceptions to Irrevindicability .................................... 455 [108.2] Payment of Annual Charges and Taxes ....................... 493
[101.3] Cases Where There Is No Recovery ............................ 464 [108.3] Obligation to Notify Owner of Prejudicial Acts .......... 494

§ 102. Possession of Animals................................................................ 465 Chapter 4

[102.1] Kinds of Animals Under the Code............................... 465
EXTINGUISHMENT OF USUFRUCT
[102.2] When Possession Is Considered Lost .......................... 466
§ 109. Extinguishment of Usufruct ....................................................... 496
Title VI. — USUFRUCT [109.1] Death of Usufructuary ................................................. 497
Chapter 1 [109.2] Expiration of Period or Fulfillment of Resolutory
Condition ..................................................................... 498
USUFRUCT IN GENERAL [109.3] Loss of the Thing ......................................................... 499
§ 103. Usufruct in General .................................................................... 467 [109.4] Effect of Bad Use ........................................................ 500
[103.1] Concept ........................................................................ 467 § 110. Obligations of Usufructuary Upon Termination of Usufruct ..... 500
§ 104. Constitution of Usufruct ............................................................ 470
Title VII. EASEMENTS OR SERVITUDES
[104.1] Manner of Creation...................................................... 470
[104.2] Other Classifications of Usufruct ................................ 471 Chapter 1
[104.3] Object of Usufruct ....................................................... 472 EASEMENTS IN GENERAL

Chapter 2 § 111. Concept ...................................................................................... 501

[111.1] Definition ..................................................................... 501
RIGHTS OF THE USUFRUCTUARY
§ 112. Kinds of Easements.................................................................... 506
§ 105. Rights of Usufructuary............................................................... 476
[112.1] Real and Personal (Easement) Servitudes ................... 506
[105.1] Rights Included In Usufruct ........................................ 476 [112.2] Legal and Voluntary Easement .................................... 509
[105.2] Right to the Fruits ........................................................ 481 [112.3] Continuous and Discontinuous Easements .................. 510
[105.3] Alienation of the Usufructuary Right .......................... 482 [112.4] Apparent and Non-Apparent Easements ..................... 510
[105.4] Right to Useful and Ornamental Improvements ......... 483 [112.5] Positive and Negative Easement ................................. 511
§ 113. Characteristics of Easements ..................................................... 512

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 [113.1] Inherence or Intransmissibility .................................... 512 [119.8] Who May Demand For Compulsory Right of Way ..... 549
[113.2] Indivisibility ................................................................ 514 [119.9] Extinguishment of Right of Way ................................. 550
§ 114. Acquisition of Easements .......................................................... 516 § 120. Easement of Party Wall .............................................................. 552
[114.1] Modes of Acquiring Easements ................................... 516 [120.1] Nature of Party Wall .................................................... 552
[114.2] Acquisition Thru Prescription ..................................... 520 [120.2] Presumption of Existence of Easement
[114.3] Proof of Easement ....................................................... 523 of Party Wall ................................................................ 553
[114.4] Easement By Apparent Sign or Legal Presumption .... 524 [120.3] Rights and Obligations of Each Co-Owner
§ 115. Rights and Obligations of the Owner of Dominant Estate ........ 528 of Party Wall ................................................................ 554
[115.1] Effect of Easement Upon The Rights § 121. Easement of Light and View ...................................................... 557
of Servient Owner........................................................ 528 [121.1] Concept ........................................................................ 557
[115.2] Extent of Rights Granted to the Holder [121.2] Making an Opening in Party Wall ............................... 557
of Easement ................................................................. 529 [121.3.] Acquisition of Easement of Light
[115.3] Limitations Upon The Rights of Owner and View Through Prescription ................................... 557
of Dominant Estate ...................................................... 530 [121.4] Observance of Certain Distances................................. 557
§ 116. Extinguishment of Easements .................................................... 532 [121.5] Opening Where Distances Not Observed .................... 558
[116.1] Merger ......................................................................... 532 § 122. Easement of Drainage of Buildings ........................................... 560
[116.2] Non-User ..................................................................... 533 [122.1] Concept ........................................................................ 560
[116.3] Impossibility of Use .................................................... 534 [122.2] Ownership of Rain Waters ........................................... 560
[116.4] Renunciation ................................................................ 535 [122.3] Legal Easement of Drainage ....................................... 560
[116.5] Redemption.................................................................. 535 § 123. Intermediate Distances for Planting ........................................... 562
[123.1] Distance to Be Observed in Case
Chapter 2
of Planting Trees .......................................................... 562
LEGAL EASEMENTS [123.2] Right To Cut Branches and Roots ............................... 562
[123.3] Fruits Naturally Falling ............................................... 563
§ 117. Legal Easement, In General ....................................................... 535
§ 118. Easement Relating to Waters ..................................................... 537 § 124. Legal Easement of Lateral and Subjacent Support .................... 564
[118.1] Easement of Drainage of Waters ................................. 538 [124.1] Concept ....................................................................... 564
[118.2] Easement of Public Use ............................................... 539 [124.2] Easement of Lateral and Subjacent Support ................ 564
[118.3] Easement For Drawing Waters .................................... 539 § 125. Voluntary Easement ................................................................... 565
[118.4] Easement of Abutment of Dam ................................... 539
[125.1] Concept ........................................................................ 565
[118.5] Easement of Aqueduct ................................................. 540
[125.2] Establishment of Easement on Property
§ 119. Easement of Right of Way ......................................................... 543 Held in Usufruct .......................................................... 566
[119.1] Concept ........................................................................ 543 [125.3] Easement Over A Co-Owned Property ........................ 566
[119.2] Manner of Acquisition; Requisites of Compulsory [125.4] Abandonment of Property ........................................... 567
Right of Way ................................................................ 543
[119.3] Isolation of the Dominant Estate ................................. 544 Title VIII. NUISANCE
[119.4] Inadequacy of the Outlet to Public Highway .............. 545 § 126. Concept ...................................................................................... 568
[119.5] “At the Point Least Prejudicial…” .............................. 547
[119.6] Payment of Indemnity ................................................. 548 [126.1] Definition ..................................................................... 568
[119.7] Width of the Easement................................................. 549 [126.2] Nuisance and Tort ........................................................ 569
[126.3] Distinguished From Negligence .................................. 570

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§ 127. Classifications of Nuisance ........................................................ 570 [133.3] Hidden Treasure........................................................... 619

[127.1] Public and Private Nuisance ........................................ 570 [133.4] Abandoned, Mislaid and Lost Property ....................... 619
[127.2] Nuisance Per Se and Per Accidens .............................. 585
[127.3] Doctrine of Attractive Nuisance .................................. 585
Title II. INTELLECTUAL CREATION
§ 128. Remedies .................................................................................... 587
[128.1] Criminal Prosecution ................................................... 588 § 134. Intellectual Creation ................................................................... 622
[128.2] Abatement of Nuisance ............................................... 588 [134.1] Definition of Intellectual Property ............................... 622
[128.3] Civil Action for Damages ............................................ 591 [134.2] When Ownership Is Acquired ..................................... 623
[134.3] Ownership of Letters ................................................... 623

Title IX. REGISTRY OF PROPERTY Title III. DONATION

Chapter 1
BOOK III
DIFFERENT MODES OF ACQUIRING NATURE OF DONATIONS
OWNERSHIP § 135. Definition and Concept .............................................................. 625
[135.1] Definition ..................................................................... 625
PRELIMINARY PROVISION
[135.2] Essential Elements of Donation................................... 625
§ 129. Modes of Acquisition of Ownership and Real Rights ............... 593 [135.3] Donative Intent or Animus Donandi ............................ 627
[129.1] In General .................................................................... 593 [135.4] Donation as “Contract”................................................ 630
[129.2] Original and Derivative Modes ................................... 594 [135.5] Donation as “Mode of Acquisition of Ownership” ..... 632
[129.3] Loss of Ownership ....................................................... 594 § 136. Classifications of Donation ........................................................ 634
§ 130. Law as Mode .............................................................................. 595 [136.1] In General .................................................................... 634
§ 131. Tradition or Delivery ................................................................. 595 [136.2] Donations Mortis Causa .............................................. 635
[131.1] Mode and Title, Distinguished .................................... 595 [136.3] Donation Inter Vivos .................................................... 647
[131.2] Contract Only Constitutes Title ................................... 596 § 137. Perfection of Donation ............................................................... 654
[131.3] Concept of Tradition; Requisites ................................. 597 [137.1] When Perfected ........................................................... 654
[131.4] Kinds of Tradition........................................................ 602 [137.2] Acceptance is Indispensable ........................................ 655
§ 132. Acquisitive Prescription ............................................................. 608 [137.3] Effects of Acceptance .................................................. 655
[132.1] Concept and Requisites ............................................... 608 [137.4] Manner and Form of Acceptance ................................ 659
[132.2] Two Kinds: Ordinary and Extraordinary ..................... 609 [137.5] Time For Making Acceptance ..................................... 659
[132.3] Period of Prescription .................................................. 610
[132.4] When Prescription Does Not Lie ................................. 611 Chapter 2
[132.5] Capacity to Acquire Ownership By
Acquisitive Prescription .............................................. 613 PERSONS WHO MAY GIVE OR RECEIVE
A DONATION
Title I. OCCUPATION § 138. Capacity to Make Donations ...................................................... 661
[138.1] Who May Donate ........................................................ 661
§ 133. Occupation ................................................................................. 616
[138.2] Determination of Donor’s Capacity ............................ 662
[133.1] Concept and Requisites ............................................... 616 [138.3] Legal Impossibility of Double Donations ................... 664
[133.2] Animals as Object of Appropriation ............................ 616

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§ 139. Capacity of the Donee ................................................................ 665
[139.1] Juridical Capacity, Sufficient ....................................... 665
[139.2] Manner of Acceptance ................................................. 666
[139.3] Persons Disqualified to Become Donees ..................... 668
§ 140. Formalities in Donation ............................................................. 672
[140.1] In General .................................................................... 672
[140.2] Applicability of Articles 748 and 749, NCC ............... 673
[140.3] Form of Donations of Personal Property ..................... 673
[140.4] Form of Donations of Real Property ........................... 675

Chapter 3
EFFECT OF DONATIONS AND
LIMITATIONS THEREON
§ 141. Extent of Donation ..................................................................... 684
[141.1] In General .................................................................... 684
[141.2] Future Property Cannot Be Donated ........................... 684
[142.3] Donor Must Reserve For Himself and Relatives ......... 687
[142.4] Donation Must Not Be Inofficious .............................. 688
§ 143. Effect of Donations .................................................................... 690
[143.1] Donations Made to Several Donees Jointly................. 690
[143.2] No Warranty Against Eviction ..................................... 691
[143.3] Reservation of Power to Dispose ................................ 691
[143.4] Separate Donation of Ownership and Usufruct ........... 692
[143.5] Donor May Provide for Reversion .............................. 692
[143.6] Payment of Donor’s Debts .......................................... 692

Chapter 4
REVOCATION AND REDUCTION
OF DONATIONS
§ 144. Reduction or Revocation of Donations ...................................... 695
[144.1] In General .................................................................... 695
[144.2] Subsequent Appearance of Children ........................... 696
[144.3] Failure to Comply With Charges ................................. 699
[144.4] Revocation By Reason of Ingratitude.......................... 706
[144.5] Revocation By Reason Inofficiousness ....................... 707

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