1|Page LAWYERS IN THE MAKING FROM ST.

THOMAS MORE SCHOOL OF LAW AND BUSINESS

BOOK II
PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS b) Ownership
Title I. - CLASSIFICATION OF PROPERTY 1. Public Dominion
PRELIMINARY PROVISIONS 2. Private Dominion
(Based on the book of Paras)
c) Alienability
PROPERTY 1. Within the commerce of man
 Considered as an object, is that which is, or 2. Outside the commerce of man
may be, appropriated.
 A branch of Civil Law which classifies and d) Existence
defines the different kinds of appropriable 1. Present Property (Res Existentes)
objects, provided for their acquisition and 2. Future Property (Res Futurae)
loss, and in general, treats of the nature and
consequences of real rights. e) Materiality or Immateriality
 Two (2) Elements of Right (derecho): 1. Tangible or Corporeal
1. Subjects (persons); and 2. Intangible or Incorporeal
2. Objects (properties).
f) Dependence or Importance
THING PROPERTY 1. Principal
Broader in scope for it Involves not only 2. Accessory
includes both material objects but also
appropriable and non- intangible things, like g) Capability of Substitution
appropriable objects. rights or credits. 1. Fungible
Ex: Planets, stars, sun. Ex: But under certain 2. Non-Fungible
(Since we cannot conditions, when a
appropriate them, they portion of the sun or h) Nature or Definiteness
are not considered star is placed in a 1. Generic
properties. container, it may be 2. Specific
considered.
i) Whether in the Custody of the Court or Free
CLASSIFICATION OF THINGS: 1. In Custodia Legis (in custody of the
a) Res Nullius (Belonging to no one) court)
b) Res Communes (Belonging to everyone) 2. “Free” property
c) Res Alicujus (Belonging to someone)
CHARACTERISTICS OF PROPERTY
Res Nullius a) Utility for the satisfaction of moral or
The reason why it belongs to no one is economic wants;
because it is: b) Susceptibility of appropriation; and
1. Not yet been Appropriated (ex: fish still c) Individuality or substantivity.
swimming in the ocean); or
2. Abandoned (Res Decelictae) by the owner Art. 414. All things which are or may be the object
with the intention of no longer owning of appropriation are considered either:
them.
(1) Immovable or real property; or
Res Communes (2) Movable or personal property. (333) 
It is owned by everybody in that their use
and enjoyment are given to all of mankind. (Ex: air, IMPORTANCE OF THE CLASSIFICATION OF
wind, sunlight, starlight.) PROPERTY INTO IMMOVABLES AND MOVABLES
 Different provisions of the law govern the
Res Alicujus (Considered Property) acquisition, possession, disposition, loss,
The objects that are tangible or intangible and registration of immovable and
which are owned privately, either in a collective or movables.
individual capacity, and because they can be owned,  Ex: Donation of real property must be in a
it is considered a Property. (Ex: Your book, shares of public instrument. (Art. 749)
stock, or parcel of land.)  Ex: The donation of an automobile worth
P1.8M needs only to be in a private
CLASSIFICATION OF PROPERTY: instrument. (Art. 748)
a) Mobility and Non-Mobility  Ex: Ownership of real property may be
1. Movable or Personal property acquired by the prescription of 30 years
2. Immovable or Real property although there was bad faith. (Art. 1137)

LAW ON PROPERTY
 2|Page LAWYERS IN THE MAKING FROM ST. THOMAS MORE SCHOOL OF LAW AND BUSINESS

 Ex: Acquisition in bad faith of personal his/her body for any

property needs only 8 years. specified purpose.
 To affect 3rd persons, transactions involving o Who may execute a donation? (Any
real property must be recorded in Registry of the following persons may
of Property; there is not so in the case of donate all or any part of the
personal property. decedent’s body for purpose
NOTE: specified, thus: (SSEBG)
 There is NO INCOMPLETENESS OF THE 1. Spouse;
CLASSIFICATION. Machines, or removable 2. Son or daughter of legal age;
houses, or transplantable trees may be 3. Either parent;
considered immovable by virtue of their 4. Brother or sister of legal age; or
being attached to an immovable for certain 5. Guardian over the person of the
specified purposes. decedent at the time of his
 Under Spanish Civil Code: death.
o Immovables = Bienes Immuebles (Note: The persons authorized may
o Movables = Bienes Muebles make the donation after or
 Justinian first classified corporeal property immediately before death.)
(Res Corporales) into: o Manner of Executing a Legacy:
o Immovables = Res Immobiles  By will (Only effective upon
o Movables = Res Mobiles testator’s death without
waiting for probate of the
RECLASSIFICATION CONVERSION will.)
The act of specifying The act of changing the  If not probated or invalid,
how agricultural lands current use of a piece of the legacy, to the extent
shall be utilized for non- agricultural land into that it was executed in good
agricultural uses such as some other use as faith, is nevertheless valid
residential, industrial, or approved by the Dept. and effective.
commercial. of Agrarian Reform  It can also be made in any
(DAR). document other than a will.
The legacy becomes
NOTE: effective upon the death of
 The Human Body is neither a real nor a the testator and shall be
personal property, thus, it cannot be respected by and binding
appropriated. It is indeed a thing or a being. upon the testator’s:
While a human is alive, he cannot be the 1. Executor;
object of a contract for he is outside the 2. Administrator;
commerce of man. He may donate his blood 3. Heirs;
or even sell his organs, but he cannot sell 4. Assign;
his body. 5. Successors-in-interest;
 ORGAN DONATION ACT OF 1991 (RA 7170) 6. All members of the
o An act authorizing the legacy or family.
***The document (may be
donation of all or part of a human
a card or any paper, must
body after death for specified
be signed by the testator in
purposes.
the presence of two
o Therefore, all or part of a human
witnesses who must sign
body may only be donated after a
the document in his
person’s “death”.
presence.
o Death = Irreversible cessation of
o International sharing of human
circulatory and respiratory
organs or tissues; shall be made
functions or the irreversible
only thru exchange programs duly
cessation of all functions of the
approved by the Department of
entire brain, including the brain
Health.
system.
 Any right in the nature of property less than
o Who may execute a Legacy?
Title; (PNB vs. CA) “Interests” is broader and
 Any individual, at least 18
more comprehensive than the word “Title”.
years of age and of sound
The terms are not considered synonymous.
mind may give by way of
legacy, to take effect after
his/her death, all or part of

LAW ON PROPERTY
 3|Page LAWYERS IN THE MAKING
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 ornamentation, placed in buildings or on lands by
the owner of the immovable in such a manner that
it reveals the intention to attach them permanently
to the tenements;
(5) Machinery, receptacles, instruments or
implements intended by the owner of the tenement
for an industry or works which may be carried on in
a building or on a piece of land, and which tend
directly to meet the needs of the said industry or
works;
(6) Animal houses, pigeon-houses, beehives, fish
ponds or breeding places of similar nature, in case
their owner has placed them or preserves them
with the intention to have them permanently
attached to the land, and forming a permanent part
of it; the animals in these places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the
matter thereof forms part of the bed, and waters
either running or stagnant;
(9) Docks and structures which, though floating, are
intended by their nature and object to remain at a
fixed place on a river, lake, or coast;
(10) Contracts for public works, and servitudes and
other real rights over immovable property.  f) Ministerial Duty of the Registrar of Property
NOTE:
 The law does not define what properties are
immovable, it only enumerated such.
 The dictionary defines “property” as: That
which is firmly fixed, settled, or fastened,
and while in general, that which is fixed in a
definite place.
LAW ON PROPERTY
FROM ST. THOMAS MORE SCHOOL OF LAW AND BUSINESS
 The enumeration in Article 415 is not
absolute.
Academic Classification of Real Properties
 Real property by: (NIDA)
1. Nature (like trees and plants)
2. Incorporation (like a building)
3. Destination or Purpose (like machinery
for direct use in an industry)
4. Analogy (like the right of usufruct)
PAR. 1: “Land, buildings, roads and constructions
of all kinds adhered to the soil.”
a) Land is the best example of an immovable
property. Immovable by its very nature.
However, a shovelful of land should be
considered a Personal Property for it is no
longer adhered to the soil. If the land is
rented, it is still immovable.
b) Buildings are considered immovable
provided that they are of permanent
structure adhering to the land. A dismantled
house and/or materials of such house
should be regarded as personal property.
c) May a house built on rented land be the
object of a mortgage? YES, in a real (estate)
mortgage. It may also be the subject of a
chattel mortgage provided two conditions
are present:
1. That the parties to the contract so
agree; and
2. That no innocent third party will be
prejudiced.
d) Building Mortgaged Separately from the
Land on Which It Has Been Built: in the
absence of stipulation, still a building by
itself may be mortgaged apart from the land
on which it has been built. Still considered a
real estate mortgage for the building in
itself is an immovable property. If registered
as a chattel mortgage, it would be void
insofar a 3rd person is concerned.
e) Sale or Mortgage of a Building which Would
Be the Object of Immediate Demolition;
may be considered a personal property and
the sale or mortgage thereof would be a
sale of chattel or a chattel mortgage, for the
true object of the contract would be the
materials thereof.
(ROP): When parties present to the ROP a
document of chattel mortgage, they must
record it even if in his opinion, the object of
the contract is a real property, because his
duty are of a purely ministerial character,
they are not empowered to determine the
nature of any document of which
registration is sought as a chattel mortgage.
g) Constructions of All Kinds: The attachment
must be more or less permanent. (Ex:
Fences and Rail-tracks)
 4|Page LAWYERS IN THE MAKING
PAR. 2: “Trees, plants and growing crops, while
they are attached to the land or form an integral
part of an immovable.”
a) Trees and Plants :
 By nature – If spontaneous products of
soil; and
 By incorporation – if they were planted
through labor.
 Once detached or uprooted – personal
property.
 But if coming from a timber land – still
forms as an integral part, thus,
immovable.
 Trees blown in typhoons – remain part
of the land upon which they rest, thus,
considered real property.
b) Registration of land containing trees and
plants:
 If no claimants – trees and plants are
considered to be annexed to the land,
thus, belonging to the new owner.
 If there are claimants – they become
the property of the person to whom
the land is adjudicated.
c) Growing Crops on One’s Own Land:
 Growing crops are considered real
property by incorporation.
 However, under Chattel Mortgage Law,
it may be considered personal
property, and thus be subject to chattel
mortgage.
 Moreover, the sale of growing crops
should be considered a sale of personal
property. (If harvested, gathered and
delivered) But jurisprudence for the
selling of coconut trees help that it
remains as a real property, as long as
the trees are still attached to the land
or form and integral part thereof.
d) Growing Crops on Another’s Land:
 In the case of Usufructuary, a possessor
or a tenant should be considered a real
property. *IMPORTANT THING* is that
it is still attached to the land.
 If severed, they become personal
property.
e) Synonyms: “GROWING CROPS”
 Standing Crops
 Ungathered Fruits
 Growing Fruits
PAR. 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.”
NOTE:
 The injury or breakage or deterioration in
case of separation must be SUBSTANTIAL.
LAW ON PROPERTY
FROM ST. THOMAS MORE SCHOOL OF LAW AND BUSINESS
 In Roman Law, thing included in Par.3 were
called Res Vinta.
Distinction between Par. 3 and Par.4:
PAR. 3 PAR. 4
1) Cannot be separated 1) Can be separated
from immovable from immovable
without breaking or without breaking or
deterioration. deterioration.
2) Need not be placed 2) Must be placed by the
by the owner. owner, or by his
3) Real property by agent, express or
Incorporation. implied.
3) Real property by
Incorporation and
Destination.
What if?
The property referred to in Par. 3 is
temporarily removed, but with the intention to be
replaced, should it be considered a real or personal
property? Answer: It is considered a personal
property for the incorporation has ceased.
PAR. 4: “Statues, reliefs, paintings or other objects
for use or ornamentation, placed in the building or
on land by the owner of the immovable in such a
manner that it reveals the intention to attach them
permanently to the tenements.”
a) Objects must be placed by the owner of the
immovable property and not by the owner
of the object.
b) The owner can act through his agent or, if
insane, through his appointed guardian.
c) If placed by tenants, object remains as a
personal property for the purposes of the
Chattel Mortgage Law.
What if?
During my house construction, I asked my
neighbour to keep for the meantime my painting
with frame, and the neighbour attaches said
painting to own walls. Shout it be considered as a
real or personal property? Answer: Personal
property. Lack of intent to “permanently” attach it
to neighbour’s wall.
PAR. 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.”
Essential Requisites:
1) The placing must be placed by the owner of the
tenement, his agent, or his duly authorized
legal representative;
 5|Page LAWYERS IN THE MAKING
2) The industry or works must be carried on in the
building or on the land. A transportation
business is not carried on in a building or in the
compound.
3) The machines, etc., must tend directly to meet
the needs of said industry or works; and
4) The machines must be essential and principal
elements in the industry and not merely
incidental.
NOTE:
 Par. 5 refers to real property by destination
or purpose.
 Effects of separation: if machine is still in
the building but is no longer used in the
industry, machine reverts to the condition
of a chattel. But if temporarily separated,
continues as a real property, not by
incorporation but, by destination.
PAR. 6: “Animal houses, pigeon-houses, beehives,
fishponds or breeding places of similar nature, in
case their owner has placed 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.”
NOTE:
 “Houses” referred to may already be
deemed included in Par.1 when speaking of
“construction of all kinds adhered to the
soil.”
 The phrase “The animals in these places are
included.” was already eliminated by the
Code Commission as to avoid confusion on
the matter.
 If animals are temporarily outside, still
considered real property as long as the
intent to return is present.
 For the purposes of criminal law, they are
considered personal property and may be
the object of theft or robbery.
 Alienation of animals; if onerous, the
transaction is considered an alienation of
personal property.
 Temporary Structures of Cages: (Bird Cage)
which may be carried from place to place, is
a chattel. The birds inside are also chattel.
PAR. 7: “Fertilizers actually used on a piece of
land.”
NOTE:
 Fertilizers still in the barn, or on ground but
wrapped inside cover, are still considered
personal property. They have not yet been
“actually” used or spread over the land.
LAW ON PROPERTY
FROM ST. THOMAS MORE SCHOOL OF LAW AND BUSINESS
PAR. 8: “Mines, quarries, and slag dumps while the
matter thereof forms part of the bed, and waters,
either running or stagnant.”
NOTE:
 Mines, including minerals, are real property.
If extracted, already considered chattels.
 “Slag dump” is the dirt and soil taken from a
mine and piled upon the surface of the
ground. Inside the “dump” can be found the
minerals.
 “Waters” referred to are those still attached
to or running thru the soil and ground. But
water itself distinguished from “waters” is
personal property.
 Canals, rivers, lakes, and such part of the
sea as may be the object of appropriation,
are classified as real property.
PAR. 9: “Docks and structures which, though
floating, are intended by their nature and object to
remain at a fixed place on a river, or coast.”
a) “Floating house” tied to ashore or bank
used as residence is considered real
property considering that the waters on
which it floats is immovable. But, if the
floating house makes a journey from place
to place, it assumes the category of a
Vessel.
b) “Vessels” Are considered personal property
as a matter of fact for it is very movable and
may be subject to chattel mortgage.
However, a chattel mortgage of a vessel
must not be registered with the R.O.D. or
Property, but in the record of the Collector
of Customs at the Port of Entry.
c) Although vessel are personal property, they
partake to a certain extent of the nature
and conditions of a Real Property because
of their value and importance in the world
of commerce.
Bar Qs:
Is the steamship President Cleveland
personal or real property? ANSWER: Personal
property for it can be moved from place to place,
although it PARTAKE THE NATURE of real property
in view of its importance in the world of commerce.
PAR. 10: “Contracts for public works, and servitude
and other real rights over immovable property.”
NOTE:
 Under the old Civil Code, the words
“Administrative concessions for public
works” were used instead of “contracts for
public works.”
 Properties referred to in Par. 10 are not
material thing but rights, which are
necessarily intangible. The piece of paper of
 6|Page LAWYERS IN THE MAKING
the written agreement is a personal
property, but the contract itself is a right,
thus, a real property.
 Presbitero vs. Fernandez:
o Issue: Are “sugar quotas” real or
personal property?
o Held: They are real property, for
they are by law considered “real
rights over immovable property”
just like servitudes and easements.
 Properties or rights referred to in Par. 10
are considered real property by analogy.
 The real right of use and habitation (Arts.
523-529, Old CC) and the real right of censo
[(ground rents) Arts. 1604-1994, Old CC)
have been eliminated in the new Civil Code,
because according to the Code Commission,
they have never been referred to in
Philippine contracts and wills.
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 considered as personal property;
(3) Forces of nature which are brought under
control by science; and
(4) In general, all things which can be transported
from place to place without impairment of the real
property to which they are fixed.
EXAMPLES:
 PAR.1: A fountain pen; a piano; animals.
 PAR.2: Growing crops for the purposes of
chattel mortgage law; machinery placed on
a tenement by a tenant who did not act as
the agent of the tenement owner.
 PAR.3: Electricity, gas, light, nitrogen.
 PAR.4: Machinery not attached to land nor
needed for the carrying on of an industry
conducted therein; portable radio; a laptop
computer; a diploma hanging on the wall.
Three (3) Tests to determine whether a property is
Movable or Immovable:
1) If the property is capable of being carried
from place to place (test by description);
2) If such change in location can be made
without injuring the real property to which
it may in the meantime be attached (test by
description); and
LAW ON PROPERTY
FROM ST. THOMAS MORE SCHOOL OF LAW AND BUSINESS
3) If finally, the object is not one of those
enumerated or included in Art. 415 (test by
exclusion).
***Inevitable conclusion is that the property is
a Personal Property.
***Take Note: Test of exclusion is superior to
the test of description.
NOTE:
 A patent, a copyright, the right to an
invention are example of intellectual
property which should be considered as a
personal property.
 “Personal Effects” are personal property but
not all personal property is personal effects.
Personal effects include only such tangible
property as applied to a person and cannot
include automobiles, although they indeed
are personal property.
Art. 417. The following are also considered as
personal property:
(1) Obligations and actions which have for their
object movables or demandable sums; and
(2) Shares of stock of agricultural, commercial and
industrial entities, although they may have real
estate. (336a)
PAR. 1: Example 1: if somebody steals my car, my
right to bring an action to recover is a personal
property by itself. This is because, although the law
uses the term “obligations,” same really refers to
rights or credits, but if credit has not matured, still
considered a personal property. However, if my
right to recover involved a piece of land, it is
considered as a real property because the object of
my right is an immovable.
Example 2: A promissory note is a personal
property, but a mortgage on real estate is real
property by analogy.
PAR. 2: Example 1: Share of Stocks in a mining
corporation is personal property, but the gold mind
and the land of the corporation itself are regarded
to as a real property by the law.
IS MONEY MERCHANDISE?
When it is in domestic circulation, money is
legal tender and is, therefore, NOT merchandise.
However, if attempted to be exported or smuggled,
it is deemed to be taken out of domestic circulation,
thus, now considered a merchandise or commodity.
Note, however, whether money is legal
tender or not, whether merchandise or not, it is still
a Personal Property.
Art. 418. Movable property is either consumable or
 7|Page LAWYERS IN THE MAKING FROM ST. THOMAS MORE SCHOOL OF LAW AND BUSINESS

non-consumable. To the first class belong those

movables which cannot be used in a manner (2) Those which belong to the State, without being
appropriate to their nature without their being for public use, and are intended for some public
consumed; to the second class belong all the others. service or for the development of the national
(337)  wealth. (339a)
Kinds of Movable Property: (CN)
a) Consumable – this cannot be used
according to its nature without it being Art. 421. All other property of the State, which is
consumed. not of the character stated in the preceding article,
b) Non-Consumable – Any other kind of is patrimonial property. (340a)
movable property.
Art. 422. Property of public dominion, when no
Classifications of Movable Property: (NI) longer intended for public use or for public service,
a) According to their Nature – Consumable shall form part of the patrimonial property of the
and non-consumable. State. (341a)
b) According to the Intention of the parties –
Fungible and Non-fungible.
Art. 423. The property of provinces, cities, and
NOTE: municipalities is divided into property for public use
1) When you say Non-Fungible it means that it and patrimonial property. (343)
is agreed that the identical thing be
returned, even though by nature it is
Art. 424. Property for public use, in the provinces,
consumable. (Ex: I will borrow a sack of rice
cities, and municipalities, consist of the provincial
for display purposes only.) The rice is
roads, city streets, municipal streets, the squares,
considered here as non-fungible.
fountains, public waters, promenades, and public
2) When we say Fungible it means that it is
works for public service paid for by said provinces,
agreed that the equivalent be returned. (Ex:
cities, or municipalities.
I borrow rice to consume and promise to
return an equivalent amount of money.)
All other property possessed by any of them is
3) In the law of credit transactions:
patrimonial and shall be governed by this Code,
a) Loan of rice for consumption – simple
without prejudice to the provisions of special
loan or mutuum; and
laws. (344a)
b) Loan of rice for exhibition –
commodatum.
4) The Civil Code uses the words Art. 425. Property of private ownership, besides the
“consumable” and “fungible” patrimonial property of the State, provinces, cities,
interchangeably. and municipalities, consists of all property
5) It is evident, however, that fungibles are belonging to private persons, either individually or
those replaceable by an equal quality and collectively. (345a) 
quantity, either by the nature of things, or
by common agreement. If irreplaceable,
because the identical object must be
returned, they are referred to as non-
fungibles.

CHAPTER 3
PROPERTY IN RELATION TO THE PERSON TO
WHOM IT BELONGS

Art. 419. Property is either of public dominion or of

private ownership. (338)

Art. 420. The following things are property of public

dominion:
 
(1) Those intended for public use, such as roads,
canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads,
and others of similar character;

LAW ON PROPERTY
8|Page LAWYERS IN THE MAKING FROM ST. THOMAS MORE SCHOOL OF LAW AND BUSINESS

LAW ON PROPERTY