PROPERTY

Notes and Digests

TITLE I Classification of “Property”
CLASSIFICATION OF PROPERTY Properties may be classified from different viewpoints.

DISCUSSION: 1. Mobility and Non-Mobility

Definition of Property in the Civil Code: a. Movable or personal property (ex. Car)
▪ Under the Civil Code, property is considered as an b. Immovable or real property (ex. Land)
object which is, or may be, appropriated (Paras).
2. Ownership
Definition of Property as a Subject as a course. a. Public dominion or ownership (ex. River)
b. Private dominion or ownership (ex. Ballpen)
▪ It is the branch of civil law which classifies and
defines the different kinds of appropriable objects,
3. Alienability
provides for their acquisition and loss, and in
a. Within the commerce of man (ex. those
general, treats of the nature and consequences of
which may be the objects of contracts or
real rights.
judicial transactions).
b. Outside the commerce of man (ex. Illegal
Q: What is the difference between a “Thing” from drugs)
“Property”
4. Existence
A: Technically, a “Thing” (Cosas) is broader in scope for it a. Present property
includes appropriable and non-appropriable objects. Example: b. Future property
The planets, stars, the sun.
Note:
“Property” (Bienes) on the other hand, is merely limited to Both present and future property, may be the
appropriable things. Using the example above, since the subject of sale but generally not the subject of
planets, stars, and the sun cannot be appropriated, then they are a donation.
not property.
5. Materiality or Immateriality
Note: a. Tangible or Corporeal (Objects which can be
Property involves not only material objects but also intangible seen or touched. For example, the paper
things, like rights or credits. which money is printed on)
b. Intangible or Incorporeal (ex. Rights or
Classification of “Things” credits)
1. Res nullius (Belonging to no one). These are things
6. Dependence or Importance
that have not yet been appropriated, like fish still
a. Principal
swimming in the ocean, wild animals, and things
b. Accessory
abandoned with no intention from the owner of
owning them.
7. Capability of Substitution
a. Fungible which means capable of
2. Res communes (Belonging to everyone). These are
things owned by everybody. Examples of this is the substitution by other things of the same
air, the wind, the sunlight, or the moonlight. quantity or quality.
b. Non-fungible which means it is incapable of
such substitution.
3. Res alicujus (Belonging to someone). These are
8. Nature or Definiteness
objects that are tangible or intangible, which are
a. Generic (one referring to a group or class)
owned privately, either in a collective or individual
capacity. Examples of this is your book, your shares of b. Specific (one referring to a single unique
stock, or parcel of land. object)

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Notes and Digests
9. Whether in the custody if the court or free
a. In custodia legis (in the custody of the court).
This happens when the property has been
seized by an officer under a writ of
attachment or under a writ of execution.
b. Free means property not in custodia legis.
Characteristics of Property/Requisites for a thing to be
considered as property (USA)
1. Utility for the satisfaction of moral or economic
wants.
2. Substantivity or Individuality (This means it can exist
by itself and not merely as a part of a whole).
3. Appropriability (This means susceptible to
ownership or possession even if not yet actually
approporiated.
Article 414. All things which are or may be the object of
appropriation are considered either:
(1) Immovable or real property; or
(2) Movable or personal property.
A: Reclassification is the act of specifying how agricultural
lands shall be utilized for non-agricultural uses such as
residential, industrial, or commercial
Conversion is the act of changing the current use of a piece of
agricultural land into some other use as approved by the
Department of Agrarian Reform (DAR).
Q: Is the “Human Body” Real or Personal property?
A: It is neither real or personal property. It is not even
property at all, such that it cannot be appropriated.
While a human being is alive, he cannot be the object of a
contract, for he is considered outside the commerce of man. He
may, of course, donate part of his blood, may even sell part of
his hair, but he cannot sell his body.
Take note however of R.A. 7170 otherwise known as the
Organ Donation Act of 1991 wherein it permits the donation of
all or part of a human body after death for specified purposes.
Q: What is Death? When is the person considered Dead?

DISCUSSION: A: According to R.A. 7170, death is the irreversible cessation

of circulatory and respiratory functions or the irreversible
Q: What is the importance of classifying property into
cessation of all functions of the entire brain, including the brain
immovables or movables.
system.

A: It is because the classification of property into immovables

Notes on R.A. 7170
or movables does not assume its importance from the fact of
mobility or non-mobility.
Q: Who may execute a legacy? Who is a donor?
It assumes its importance from the fact that different provisions
of the law govern the acquisition, possession, disposition, loss, A: Any individual, at least eighteen (18) years of age and of
and registration of immovables and movables. sound mind, may give by way of legacy, to take effect after his
death, all or part of his body for any purpose specified under
R.A. 7170.
Note:
The classification given in Art. 414 is not complete in that there
Q: Who may become legatees or donees?
should be a third kind which is the “mixed” or the “semi-
immovable”. Example: machines, removable houses or
transplantable trees. Which, under certain conditions may be A: Under R.A. 7070 The following persons may become
considered as immovable by virtue of their being attached to an legatees or donees of human bodies or parts thereof for any of
immovable for certain specified purposes. the purposes stated hereunder:

This however, does not affect the classification of properties
into two, movable or immovable.
Q: What is the difference between Reclassification and
Conversion?
1. Any hospital, physician or surgeon - For medical or
dental education, research, advancement of medical or
dental science, therapy or transplantation;

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Notes and Digests
2. Any accredited medical or dental school, college or IMMOVABLE PROPERTY
university - For education, research, advancement of
medical or dental science, or therapy; **Article 415. The following are immovable property:

3. Any organ bank storage facility - For medical or dental (1) Land, buildings, roads and constructions of all kinds
education, research, therapy, or transplantation; and adhered to the soil;

4. Any specified individual - For therapy or (2) Trees, plants, and growing fruits, while they are attached
transplantation needed by him. to the land or form an integral part of an immovable;

Q: What is the manner of Executing a Legacy?
A: Such may be made by a will, and with said legacy only
become effective upon a testator’s death without waiting for the
probate of the will.
If the will is not probated, or if it is declared invalid for
testamentary purposes, the legacy, to the extent that it was
executed in good faith, is nevertheless valid and effective.
A legacy may also be made in any document other than a
will. The legacy becomes effective upon death of the testator
and shall be respected by and binding upon his executor or
administrator, heirs, assigns, successors-in-interest and all
members of the family. The document, which may be a card
or any paper designed to be carried on a person, must be
signed by the testator in the presence of two witnesses who must
sign the document in his presence.
(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. (334a)

DISCUSSION:
We are not talking about immovable-in-fact, we are talking
about immovable-in-law. So it is based on what the law
provides, regardless of its nature or the actual nature of the
property.

We go back again to the statement where the importance of its

classification is derived not from the fact of its nature, but from
the fact which the law provides.

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Notes and Digests
While it is true that the dictionary defines immovable property
as that which is firmly fixed, settled, or fastened, and while in
general, immovable property is that which is fixed to a definite
place, still there are many exceptions to this general criterion.
Hence, the law does not define what properties are immovable.
They are merely enumerated.
BAR QUESTION:
Q: What are the categories of immovable property?
one’s own land, or on rented land. The reason is clear such that
it does not distinguish as to who built or owns the building.
GR: A building is always immovable whether built in one’s
own land or rented.
XPN: When a building is merely superimposed on the soil or is
sold for immediate demolition, in which case it may be
considered as movable or personal property.

A: Real properties are categorized by: (NIDA) Note:

Barong-barongs are not permanent structures but mere
1. Nature or those which cannot be carried from place to superimpositions on land.
place.
Requisites for a building to be the subject of a chattel
2. Incorporation or those which are attached to an mortgage:
immovable in a fixed manner and considered as an
integral part thereof, irrespective of its ownership. 1. Parties mutually agreed to consider the house a
personal property; and
3. Destination or things placed in buildings or on lands
by the owner of the immovable or his agent in such a 2. That no innocent third party is prejudiced.
manner that it reveals the intention to attach them
permanently thereto.
Note:
Under the doctrine of estoppel, parties to a contract who agreed
4. Analogy or those which are classified as real or
to treat as personal property that which by nature would be real
immovable by express provision of law.
property are prohibited from assuming inconsistent positions
and repudiating an obligation voluntarily assumed.
(1) Land, buildings, roads and constructions of all kinds
adhered to the soil;
A building, subjected to a chattel mortgage cannot be sold
extrajudicially.
DISCUSSION:

(2) Trees, plants, and growing fruits, while they are

Land attached to the land or form an integral part of an
In terms of Land, it is the best example of immovable property immovable;
due to its very nature. In whatever transaction land is involved
in, it is always immovable. DISCUSSION:

Note: Trees and Plants

A truckful of soil taken from the land like garden soil or the
No matter what their size may be, trees and plants are
like, becomes a personal property because it is no longer
considered real property.
adhered to the land. However, the moment it is used to cover a
land for ornamentation or gardening, it becomes immovable
By nature if they are the spontaneous products of the soil. By
again.
incorporation of they were planted through labor.
Building
But the moment they are detached or uprooted from the land,
Buildings are considered immovable provided they are mor or
they become personal property.
less of a permanent structure, substantially adhering to the land,
and not mere superimpositions on the land.

Note that the laws uses the term “adhered” and not
“superimposed” and this is true, whether the building is built on
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Notes and Digests
Note: separated from the immovable, regain their condition as
In case of uprooted timber, they are still not considered as movable.
personal property because timber is an integral part of the
timber land. Provision is also known as “Immovable by Incorporation”

Growing Fruits
GR: Growing fruits are considered as real property so long as
they are still attached to the soil. Once removed from the soil,
they become personal properties.
(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;

XPN: Growing fruits may be exceptionally treated as personal DISCUSSION:

property pursuant to Art. 416 (2) of the New Civil Code.
Example:
1. For the purposes of sale of the whole or part of the
crops.
2. For the purpose of attachment and execution.
3. For applying the provisions of the Chattel Mortgage
Law.
Note:
Growing crops on one’s own land by express codal provisions
are considered real property by incorporation. Growing crops
are attached in the same way as real property. However, under
the chattel mortgage law, growing crops may be considered as
personal property.
Q: What if you grow crops on another’s land.
Also known as “Immovable by Incorporation & By
Destination”.
Placed by the owner
This means that the objects must be placed by the owner of the
immovable and not necessarily the owner of the object.
Requisites:
1. Placed by the owner or tenant as agent of the owner;
and
2. With the intention of attaching them permanently even
if adherence will not involve breakage or injury.
BAR QUESTION:
Q: If during the construction of my house, I request my
neighbor to keep in the meantime a painting (with frame)
which I own and my friend attaches said painting on his own
wall, should the painting be regarded as real or personal
property?

A: Inasmuch as the law makes no distinction, growing crops A: It is personal Property, in view of the lack of intent to attach
whether on one’s land or on another’s, as in the case of a the painting permanently.
usufructuary, a possessor or a tenant, should be considered as
real property. The important thing is for them to be still attached Difference between Par. 3 and Par. 4 of Article 415.
to the land. Par. 3 Par. 4
1. Cannot be 1. Can be separated
By the time they have been severed, they become personal separated from from immovable
property, even if they had been left scattered or lying about in immovable without without breaking or
the land. breaking or deterioration.
deterioration.
2. Must be placed by
(3) Everything attached to an immovable in a fixed 2. Need not be placed the owner, or by his
manner, in such a way that it cannot be separated by the owner. agent, express or
therefrom without breaking the material or deterioration implied.
of the object; 3. Real property by
incorporation. 3. Real property by
DISCUSSION: incorporation and
Under Roman Law, things included in par. 3 are called Res destination.
Vinta. These are immovables by incorporation, which when

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Notes and Digests
Q: Suppose the properties referred to in par. 3 are
temporarily removed, but there is an intention to replace
them, should they be considered real or personal?
A: It is believed that they should be regarded as personal
property inasmuch as the “incorporation” has ceased.
(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;
DISCUSSION:
Paragraph 5 refers to real property by destination or purpose.
Essential Requisites: (PIME)
1. The placing must be made by the owner of the
tenement, his agent, or duly authorized legal
representative.
2. The industry or works must be carried on in the
building or on the land.
3. The machines, etc., must tend directly to meet the
needs of said industry or works.
4. The machines must be essential and principal
elements in the industry, and not merely incidental.
Note:
If the machine is still in the building, but is no longer used in
the industry conducted therein, the machine reverts to the
condition of a chattel. Upon the other hand, if still needed for
the industry, but separated from the tenement temporarily, the
property continues to be immovable, inasmuch as paragraph 5
refers, not to real property by incorporation, but to real property
by destination or purpose.
Examples of machines which are “Merely Incidental”
Thus cash registers, typewriters, calculators, computers, fax
machines, etc. usually found and used in hotels, restaurants,
theaters, etc., are merely incidentals and should not be
considered immobilized by destination. For these business can
continue or carry on their functions without these equipments.
The same applies to the repair or service shop of the
transportation business because the vehicles may be repaired or
serviced in another shop belonging to another.
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Example of “Incidental”
Machineries of breweries used in the manufacture of liquor and
soft drinks, though movable by nature, are immobilized because
they are essential to said industries.
BAR QUESTION:
Q: When is Machinery attached to land or a tenement
considered immovable?
A: Under Article 415, 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 work shall be considered as
immovable.
Q: Give the Exceptions.
A: The exception is provided for in the case of Davao Sawmill
v. Castillo, wherein the SC ruled that by the placing of the
machinery in a plant by a tenant or usufructuary or any person
having only a temporary right. It follows that the machinery put
did not lose its character of movable property and become
immovable by destination.
Q: What is the exception to the exception?
A: An exception to the exception is found in the case of Valdez
v. Central, when the tenant had promised to leave the
machinery on the tenement at the end of the lease, or when he
acted only as agent of the owner of the land.
(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;
DISCUSSION:
These are immovables by destination. They are considered as
real property if adhered to the soil in a permanent manner. The
animals in the houses are considered part of the immovable.
Q: Suppose the animals are temporarily outside?
A: It is submitted that even if the animals are temporarily
outside, they may still be considered as real property. As long
as the intent to return is present.
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Notes and Digests
Note:
But in the viewpoint of Criminal law, they must be considered
as personal property, and may properly be the object of theft or
robbery.
Cages on the other hand are not included to be immovable by
virtue of par. 6 and will be considered as personal property since
they can be moved from one place to another.
(7) Fertilizer actually used on a piece of land;
DISCUSSION:
Note that fertilizers which are still in the sacks, although there
is intention to place them or use them on land, are movable,
hence, should be considered as personal property.
Only fertilizers actually used on a piece of land are deemed
immovable since it is already place in the land and can never be
separated from it.
(8) Mines, quarries, and slag dumps, while the matter
thereof forms part of the bed, and waters either running
or stagnant;
DISCUSSION:
By their nature, mines, quarries and slag dumps are immovable
property.
Mines – These are mineral lands where excavations are done to
extract minerals such as gold, ores, etc. Note however that once
extracted, they become chattels.
Quarries – These are lands where stones are chipped of or
where sand is being extracted.
Slag Dumps – is the dirt and soil taken from a mine and piled
upon the service of the ground.
Waters – the waters referred to are those still attached to or
running through the soil or ground.
(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;
DISCUSSION:
In this provision, we talk about Floating Houses/Platforms and
Vessels.
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Floating House/Platform
A floating house tied to a shore or bank post and used as a
residence is considered real property, considering that the
waters in which it floats, are considered immovables.
The platform is an immovable property by destination. It was
intended by the owner to remain at a fixed place on a river or
coast. Art. 415 (9) of the New Civil Code considers as real
property “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.
Vessels
Vessels are considered personal property. As a matter of fact,
they are indeed very movable. Because they are personal
property, they may be the subject of a chattel mortgage.
However, take note that a chattel mortgage on a vessel should
be registered not in the Registry of Deeds, but in the record of
the Collector of Customs at the Port of entry.
Note:
Although vessels are personal property, they partake to a
certain extent of the nature and conditions of real property
because of their value and importance to the world of
commerce.
Hence, the rule in the Civil Code with reference to acquisition
of rights over immovable property, particularly the rules on
double sale can be applied to vessels.
BAR QUESTION:
Q: Is the steamship “AAA” personal or real property?
A: It can be moved from place to place, hence it is personal
property, although it partakes the nature of real property in view
of its importance in the world of commerce.
(10) Contracts for public works, and servitudes and other
real rights over immovable property.
DISCUSSION:
The properties referred to in paragraph 10 are not material
things but rights, which are necessarily intangible. These
properties refer to contracts for public works, servitudes and
real rights over immovable property.
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Notes and Digests
Example:
The piece of paper on which the contract for public works has
been written is necessarily personal property, but the contract
itself or rather, the right to the contract, is real property.

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Leung Yee v. Strong Machinery Co.
G.R. No. L-11658 | February 15, 1918
FACTS: The Compania Agricola Filipina purchased from
Strong Machinery Co. rice-cleaning machines which the
former installed in one of its buildings. As security for the
purchase price, Agricola executed a chattel mortgage on the
machines and the building on which they had been installed.
Upon Agricola’s failure to pay, the registered mortgage was
foreclosed, and the building was purchased by Strong
Machinery Co. This sale was annotated in the Chattel
Mortgage Registry. Later, the “Agricola” also sold to
“Strong Machinery” the lot on which the building had been
constructed. This sale was not registered in the Registry of
Property, but Machinery Co. took possession of the building
and the lot. Previously however, the same building had been
purchased at a sheriff’s sale by Leung Yee, a creditor of
Agricola, although Leung Yee knew all the time of the prior
sale in favor of Strong Machinery. This sale in favor of
Leung Yee was recorded in the Registry. Leung Yee now
sues to recover the property from Strong Machinery.
ISSUE: Who has better right to the property?
RULING: Strong Machinery has a better right to the
property.
The building is real property; therefore, its sale as annotated
in the Chattel Mortgage Registry cannot be given the legal
effect of registration in the Registry of Real Property.
The mere fact that the parties decided to deal with the
building as personal property separate and apart from the
land on which it stood does not change its character as real
property.
Thus, neither the original registry in the chattel mortgage
registry, nor the annotation in said registry of the sale of the
mortgaged property had any effect on the building. However,
since the land and the building had first been purchased by
Strong Machinery ahead of Leung Yee, and this fact was
known to Leung Yee, it follows that Leung Yee was not a
purchaser in good faith and should therefore not be entitled
to the property
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COLLEGE OF LAW
Standard Oil v. Jaramillo
G.R. No. L-20329 | March 16, 1923
FACTS: Gervasia de la Rosa, Vda. de Vera, executed a
document in the form of a chattel mortgage, purporting to
convey to the Standard Oil by way of mortgage both the
leasehold interest in said lot and the building which stands
thereon. After said document had been duly acknowledged
and delivered, Standard Oil caused the same to be presented
to Joaquin Jaramillo, 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, Jaramillo refused the registration on the
ground 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.
ISSUE: May the deed involving said property be registered
in the chattel mortgage registry? – YES
RULING: Yes, because the Registrar’s duty is ministerial in
character. There is no legal provision conferring upon him
any judicial or quasi-judicial power to determine the nature
of the document presented before him. He should therefore
accept the legal fees being tendered and place the document
on record.
Articles 334 and 335 of the Civil Code supply no absolute
criterion for discriminating between real property and
personal property for the purpose of the application of the
Chattel Mortgage Law. Those articles state rules which,
considered as a general doctrine, are law in this jurisdiction;
but it must not be forgotten that under given conditions
property may have character different from that imputed to
it in said articles.
It is undeniable that the parties to a contract may by
agreement treat as personal property that which by nature
would be real property; and 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.
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Notes and Digests
PRC, Inc. v. Jarque
G.R. No. L-41506 | March 25, 1935
FACTS: Philippine Refining Co. and Jarque executed three
mortgages on the motor vessels Pandan and Zargazo. The
documents were recorded as transfer and encumbrances of
the vessels for the port of Cebu and each was denominated a
chattel mortgage.
The first two mortgages did not have an affidavit of good
faith. Subsequently, a fourth mortgage was executed by
Jarque and Ramon Aboitiz over motorship Zaragoza and was
entered in the Chattel Mortgage Registry on May 12, 1932,
within the period of thirty days prior to the foreclosure or
institution of the insolvency proceedings.
Jose Curaminas filed with the CFI of Cebu a petition praying
that Francisco Jarque be declared an insolvent debtor. This
was granted and Jarque’s properties were then assigned to
Curaminas. On these facts, the judge declined to order the
foreclosure of the mortgages, but on the contrary sustained
the special defenses of fatal defectiveness of the mortgages
ISSUE: Whether or not vessels are considered personal
property such that they may be the subject of chattel
mortgage. -YES
RULING: Yes. Vessels are considered personal property
under the Civil Law. Similarly under the common law,
vessels are personal property although occasionally referred
to as a peculiar kind of personal property. Since the term
"personal property" includes vessels, they are subject to
mortgage agreeably to the provisions of the Chattel
Mortgage Law.
Indeed, it has heretofore been accepted without discussion
that a mortgage on a vessel is in nature a chattel
mortgage. The only difference between a chattel
mortgage of a vessel and a chattel mortgage of other
personality is that it is not now necessary for a chattel
mortgage of a vessel to be noted n the registry of the
register of deeds, but it is essential that a record of
documents affecting the title to a vessel be entered in the
record of the Collector of Customs at the port of entry.
Otherwise a mortgage on a vessel is generally like other
chattel mortgages as to its requisites and validity.
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B.H. Berkentotter v. Cu Unjieng
G.R. No. L-41643 | July 31, 1935
FACTS: The Mabalacat Sugar Company borrowed from Cu
Unjieng a sum of money, mortgaging as security two lots
together with all its buildings and improvements. Later, to
increase its productive capacity, the Company purchased
additional machines and a new sugar mill which were needed
for the sugar industry. B.H. Barkenkotter contended that the
installation of the machinery and equipment claimed by him
in the sugar central of the Mabalacat Sugar Company, Inc.,
was not permanent in character inasmuch as B. A. Green, in
proposing to him to advance the money for the purchase
thereof, that in case B. A. Green should fail to obtain an
additional loan from Cu Unjieng e Hijos, said machinery and
equipment would become security therefor.
ISSUE: Are the additional machines also considered
mortgaged? -YES
RULING: Yes. The additional machinery and equipment
are included in the first mortgage.
Article 334, paragraph 5, of the Civil Code gives the
character of real property to “machinery, liquid containers,
instruments or implements intended by the owner of any
building or land for use in connection with any industry or
trade being carried on therein and which are expressly
adapted to meet the requirements of such trade or industry.”
If the installation of the machinery and equipment in
question in the central of the Mabalacat Sugar Co., Inc., in
lieu of the other of less capacity existing therein, for its sugar
industry, converted them into real property by reason of their
purpose, 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. 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 necessary be permanent.
Page | 10
 PROPERTY
Notes and Digests
Davao Sawmill v. Castillo
G.R. No. L-40411 | August 7, 1935
FACTS: Davao Saw Mill operated a sawmill, the land upon
which the business was conducted belonged to another
person. On the land, Davao Saw Mill erected a building
which housed the machinery used by it. The machines were
placed and mounted on foundation of cement.
The contract of lease between Davao Saw Mill and the owner
provided that all improvements and buildings introduced and
erected by Davao Saw Mill shall pass to the exclusive
property of the owner with the exception that the machineries
and accessories are not included as improvements. In another
action brought by Davao Light against Davao Saw Mill,
judgment was rendered against the latter and a Writ of
Execution was issued thereon, and the machines were levied
as personalty, by the sheriff. Davao Saw Mill now contends
that the machines are real property by destination, and thus
cannot be levied.
ISSUE: Whether or not the machinery in dispute is a
personal property.
RULING: Machinery which is movable in its nature only
becomes immobilized when placed in a plant by the owner
of the property or plant. Such result would not be
accomplished, therefore by the placing of the machinery in a
plant by a tenant or usufructuary or any person having only
a temporary right. It follows that the machinery put by Davao
Saw Mill did not lose its character of movable property and
become immovable by destination. Hence, the same could be
levied.
The concrete immobilization of the improvements took place
because of the express provisions of the lease, since the lease
deprived the tenant of any right to charge against the lessor
the cost, and it was expressly stipulated that the
improvements should become part of the property belonging
to the owner without compensation to the lessee.
Under such conditions, the tenant was acting but an agent of
the owner, and the immobilization which resulted arose in
legal effect from the act of the owner in giving by contract a
permanent destination of the machinery.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Machinery and Engineering v. Court of Appeals
G.R. No. L-7057 | October 29, 1954
FACTS: Ipo Limestone Co. contends that the machineries in
subject to the writ of replevin are real properties. Despite
that, the sheriff served the writ dismantling the machineries
and causing damages or injuries to the wooden frame
attached to the machineries. The trial court ordered the return
and reinstallation of the machineries. However, they were
only deposited along the road, near the quarry of the Ipo
Limestone Co without reinstallation, rendering them useless.
Limestone Co. argues that the machineries are real properties
and should not be the subject of a writ of replevin. On the
other hand, Machinery and Engineering contends that the
machineries are their personal property since the machineries
were not yet fully paid by Ipo Limestone Co.
ISSUE: Whether or not the machineries are real or personal
properties
RULING: They are real properties. The machineries are
immovable property pursuant to Article 415 (3) and (5) of
the Civil Code.
The machinery and equipment in question appeared to be
attached to the land, particularly to the concrete foundation
of said premises, in a fixed manner, in such a way that the
former could not be separated from the latter "without
breaking the material or deterioration of the object." Hence,
in order to remove said outfit, it became necessary, not only
to unbolt the same, but, also, to cut some of its wooden
supports.
Moreover, said machinery and equipment were "intended by
the owner of the tenement for an industry" carried on said
immovable and tended "directly to meet the needs of the said
industry." (Art. 415 par. 5)
For these reasons, the machineries were immobilized by
attachment and destination. As such immovable property,
they were not subject to replevin.
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 PROPERTY
Notes and Digests
Manarang v. Ofilada
G.R. No. L-8133 | May 18, 1956
FACTS: Manarang obtained a loan from Esteban and
executed a chattel mortgage over a house of mixed materials
as a security. Upon default, Estaban brought an action to
foreclose the property mortgaged. At Manarang’s request,
the house mortgaged was to be sold at public auction to
satisfy the debt. Manarang offered to pay the loan with
interests but denied to pay the publication expenses for the
notice of sale.
Manarang contended that the house is as a personal property
considering that it was the subject of the chattel mortgage.
Given this, the publication of the notice of its sale at public
auction in execution is unnecessary.
ISSUE: Whether or not the house is personal property since
it was considered as such in the chattel mortgage between
Manarang and Esteban. -NO
RULING: No, the house is a real property. 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 as it has
become a permanent fixture on the land, which is real
property.
There cannot be any question that a building of mixed
materials may be the subject of a chattel mortgage, in which
case it is considered as between the parties as personal
property.
When the rules speak of personal property, property which
is ordinarily so considered is meant; and when real property
is spoken of, it means property which is generally known as
real property. The regulations were never intended to suit the
consideration that parties, may have privately given to the
property levied upon.
We, therefore, hold that the mere fact that a house was the
subject of a chattel mortgage and was considered as personal
property by the parties does not make said house personal
property for purposes of the notice to be given for its sale at
public auction. (even if the parties agreed to a chattel
mortgage over a house: it is considered REAL property)
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Evangalista v. Alto Surety Co. Inc.
G.R. No. L-11139 | April 23, 1958
FACTS: Evangelista and Alto Surety both bought the house
of Rivera in separate public auctions in compliance with the
writ of execution issued in their civil cases against Rivera,
respectively.
Evangelista bought the house in October 1952, but the
registration for the writ and notice of attachment of the house
was filed with the Register of Deeds in 1949.
Notwithstanding this, Alto Surety bought the house in May
1952.
To establish Alto’s claim over the house, Alto Surety
contends that Rivera’s house is a personal property, hence
the levy must be made in conformity with subsections (c) and
(e) of Section 7 of Rule 59
ISSUE: Whether a house, constructed by the lessee of the
land on which it is built, should be dealt with for purpose of
attachment, as immovable property or as personal property.
RULING: The house is an immovable property. The house
is not personal property, much less a debt, credit or other
personal property not capable of manual delivery, but
immovable property. As explicitly held, in Laddera vs.
Hodges (48 OG 5374), "a true building (not 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.
This is the doctrine in Leung Yee vs. Strong Machinery
Company, 37 Phil., 644. The opinion that the house of Rivera
should have been attached in accordance with subsection (c)
of said section 7, as "personal property capable of manual
delivery, by taking and safely keeping in his custody", for it
declared that "Evangelista could not have validly purchased
Ricardo Rivera's house from the sheriff as the latter was not
in possession thereof at the time he sold it at a public auction”
is untenable
Page | 12
 PROPERTY
Notes and Digests
Associated v. Iya
G.R. No. L-10837-38 | May 30, 1958
FACTS: The property in question is the house with strong
materials owned by Spouses Valino.
Associated Insurance and Surety Company foreclosed the
chattel mortgage over the house. As a result, public sale was
conducted, and the property was awarded to the Associated
Insurance. They then learned of the existence of the real
estate mortgage over the lot and the improvements in favor
to Isabel Iya. The Associated Insurance argued that as the lot
on which the house was constructed did not belong to
Spouses Valino at the time the chattel mortgage was
executed and as such, the house might be considered as
personal property. They contend that the house be excluded
in the real estate mortgage in favor of Iya
ISSUE: Whether or not the house constructed on a lot not
belonging to the owner is personal property.
RULING: No, the house is a real property. While it is true
that real estate connotes the land and the building constructed
thereon, it is obvious that the inclusion of the building,
separate and distinct from the land, in the enumeration of
what may constitute real properties provided by Article 415
of the Civil Code, could only mean that a building is by itself
an immovable property.
In view of the absence of any specific provision to the
contrary, a building is an immovable property irrespective of
WON said structure and the land on which it is adhered to
belong to the same owner. 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. In the case at
bar, as personal properties could only be the subject of a
chattel mortgage and as obviously the structure in question
is not one, the execution of the chattel mortgage covering
said building is clearly invalid and a nullity
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Mindanao Bus Co. v. City Assessor
G.R. No. L-17870 | September 29, 1962
FACTS: Mindanao Bus Company is engaged in the
transportation business. The company owns a land wherein
several machineries for repair and maintenance intended for
their motor trucks are located. These machineries were
considered by the City Assessor’s Office as real properties,
pursuant to Article 415 (5) of the Civil Code. As real
properties, these machineries were subjected to realty taxes.
Mindanao Bus Company asserts that the machineries are not
real properties.
ISSUE: Whether the machineries are real properties
pursuant to Article 415 (5) of the Civil Code. -NO
RULING: No, the machineries are not real properties. First,
for a movable equipment to be immobilized by destination
pursuant to Article 415 (5) of the Civil Code, it must be an
essential and principal element of an industry or works that
without which, such industry or works would be unable to
function or carry on the industrial purpose for which it was
established.
In the case at bar, machineries in question are merely
incidentals — acquired as movables and used only for
expediency to facilitate and/or improve its service. 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.
Second, Article 415 (5) requires that the industry or works
be carried on in a building or on a piece of land. But in this
case, the equipment in question are destined only to repair or
service the transportation business, which is not carried on in
a building or permanently on a piece of land, as demanded
by the law.
Given these reasons, the machineries are not real properties
Page | 13
 PROPERTY
Notes and Digests
Ago v. Court of Appeals Bicerra v. Teneza
G.R. No. L-17898 | October 31, 1962 G.R. No. L-16218 | November 29, 1962

FACTS: Ago bought and executed a chattel mortgage over
machineries and equipment to secure the payment of balance
of the price remaining unpaid which he agreed to pay on
installment basis. Ago defaulted in his payments despite his
compromise agreement with Grade Park Engineering.
The Provincial Sheriff of Surigao acting upon the writ of
execution issued by the lower court, levied upon and ordered
the sale of the sawmill machineries and equipment in
question. Ago then assigned these machineries and
equipment to Golden Pacific Sawmill, Inc. in payment of his
subscription to the shares of stock of said corporation. The
machineries and equipment were installed in a sawmill
building owned by the corporation, permanently attached to
the ground.
Ago argues that the Sheriff was acting illegally upon the
allegedly void writ of execution by levying the same upon
the sawmill machineries and equipment which have become
real properties of the Golden Pacific sawmill, Inc., and
proceeded in selling the same without prior publication of
the notice of sale thereof in some newspaper of general
circulation as required by the Rules of Court.
FACTS: Sometime in January 1957 Teneza and Barbosa
forcibly demolished the house and that the materials of the
house, after it was dismantled, were placed in the custody of
the barrio lieutenant of the place; and that as a result of
appellees’ refusal to restore the house or to deliver the
materials to appellants the latter have suffered actual
damages.
ISSUE: Whether or not the materials from the demolished
house are real property. -NO
RULING: No. It ceased to be an immovable property. 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.

ISSUE: Whether or not the machineries and equipment are

movable properties. -NO

RULING: No. The machineries and equipment are

immovable properties. By reason of the installment of the
machineries and equipment in Golden Pacific Sawmill,
Inc.’s building, they became real estate properties in
accordance with the provision of Art. 415 (5). Considering
that the machineries and equipment in question valued at
more than P15,000.00 appear to have been sold without the
necessary advertisement of sale by publication in a
newspaper, as required by the Rules of Court, the sale made
by the sheriff must be declared null and void.

Page | 14
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
 PROPERTY
Notes and Digests
Navarro v. Pineda
G.R. No. L-18456 | November 30, 1963
FACTS: Rufino Pineda and his mother, Juana Gonzales,
borrowed from Conrado Navarro, the sum of P2550.00
payable 6 months after date. Pineda executed “Deed of Real
Estate and Chattel Mortgages,” 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 two-story residential house, erected on a lot
belonging to Atty. Vicente Castro and one motor truck. Both
mortgages were contained in one instrument, which was
registered in both the Office of the Register of Deeds and the
Motor Vehicles Office of Tarlac.
Despite two extensions given by Navarro, Pineda and
Gonzales failed to pay the mortgage when it became due and
payable.
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.
ISSUE: Whether or not the residential house, subject of the
mortgage therein, can be considered a chattel. -YES
RULING: Yes. The parties to the contract treated the house
in question as personal or movable property. In the deed of
chattel mortgage, Pineda conveyed by way of “Chattel
Mortgage” “my personal properties,” a residential house and
a truck. The mortgagor himself grouped the house with the
truck, which is, inherently a movable property. The house
which was not even declared for taxation purposes was small
and made of light construction materials: G.I. sheets roofing,
sawali and wooden walls and wooden posts; built on land
belonging to another.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Board of Assessment Appeals v. Manila Electric Co.
G.R. No. L-15334 | January 31, 1964
FACTS: Meralco’s electric power is generated by its hydro-
electric plant located at Botocan Falls, Laguna and is
transmitted to the City of Manila by means of electric
transmission wires, running from the province of Laguna to
the said City. These electric transmission wires which carry
high voltage current, are fastened to insulators attached on
steel towers constructed by MERALCO at intervals, from its
hydroelectric plant in the province of Laguna to the City of
Manila. Meralco has constructed 40 of these steel towers
within Quezon City, on land belonging to it.
On 1955, City Assessor of Quezon City declared the
aforesaid steel towers for real property tax. After denying
Meralco’s petition to cancel these declarations an appeal was
taken by Meralco to the Board of Assessment Appeals of
Quezon City, which required Meralco to pay real property
tax on the said steel towers.
ISSUE: Whether or not the steel towers of an electric
company constitute real property for the purpose of real
property tax. -NO
RULING: No. The steel towers of an electric company don’t
constitute real property for the purposes of real property tax
since they are not immovable property under paragraph 1, 3
and 5 of Article 415.
The steel towers or supports 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
construction analogous to buildings nor adhering to the soil.
The herein subject steel towers 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. Meralco is
not engaged in an industry or works on the land in which the
steel supports or towers are constructed
Page | 15
 PROPERTY
Notes and Digests
Piansay v. David
G.R. No. L-19468 | October 30, 1964
FACTS: David secured a loan from Vda. De Uy Kim, and
to secure the payment, he executed a chattel mortgage over
a house in favor of Kim. Due to failure to pay, the CM was
foreclosed, and Kim was the highest bidder in the public
auction. Kim then sold the house to Mangubat.
Mangubat filed a complaint against David for the collection
of the loan. The complaint was later amended to implead
Kim and Piansay praying that the auction sale and deed of
absolute sale executed by Uy Kim in favor of Piansay be
annulled.
David was ordered by the court to pay and annulled the
chattel mortgage. On the other hand, Piansay assailed
Mangubat’s right to levy execution upon the house alleging
that the same belongs to him, having bought it from Kim who
acquired it at the auction sale.
ISSUE: Whether or not the chattel mortgage constituted on
the house is valid. -NO
RULING: No. However, regardless of the validity of a
contract constituting a chattel mortgage on a house, as
between the parties to the said contract, the same cannot and
doesn’t bind third persons who aren’t parties to the
aforementioned contract or their privies. As a consequence,
the sale of the house in question in the proceedings for the
sale of the house in question in the proceedings for the
extrajudicial foreclosure of said chattel mortgage, is null and
void insofar as Mangubat is concerned and didn’t confer
upon Kim as buyer in said sale, any dominical right in and to
said house.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
People’s Bank v. Dahican Lumber Co.
G.R No. L-17500 | May 16, 1967
FACTS: Atlantic Gulf & Pacific Company of Manila sold
and assigned all its rights in the Dahican Lumber concession
to Dahican Lumber Company. Thereafter, to develop the
concession, DALCO obtained various loans from the
People's Bank & Trust Company.
As security for the payment of the abovementioned loans,
DALCO executed a deed of mortgage covering five parcels
of with all the buildings and other improvements existing
thereon and all the personal properties of the mortgagor
located in its place of business in Camarines Norte. They
again executed a second mortgage on the same property.
Both deeds covered “after acquired property,” those
acquired, constructed, installed or attached in the premises
after the its execution.
Thereafter, DALCO purchased several equipment, spare
parts and supplies from CONNELL and DAMCO. DALCO
then decided to rescind these alleged sales they entered with
the two suppliers. CONNELL and DAMCO contend that the
mortgages over the “after acquired properties” are null and
void since it is not registered in accordance with the Chattel
Mortgage Law.
ISSUE: Whether or not mortgages are valid and binding on
the properties aforesaid in spite of the fact that they were not
registered in accordance with the provisions of the Chattel
Mortgage Law. -YES
RULING: Yes, the parties are estopped. The
characterization of the "after acquired properties" as real
property was made not only by one but by both interested
parties. The consensus of both parties impresses upon the
properties the character the parties determined.
As the mortgages in question were executed on July 13, 1950
with the old Civil Code still in force, such code governs.
Articles 334 and 1877 of the old Civil Code are substantially
reproduced in Articles 415 and 2127 of the new Civil Code.
Article 415 does not define real property but enumerates
what are considered as such, among them being machinery,
receptacles, instruments or replacements intended by owner
of the tenement for an industry or works which may be
carried on in a building or on a piece of land, and shall tend
directly to meet the needs of the said industry or works. The
lower court held that inasmuch as "the chattels were placed
in the real properties mortgaged to plaintiffs, they came
within the operation of Art. 415, paragraph 5 and Art. 2127
of the New Civil Code".
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 PROPERTY
Notes and Digests
GSIS v. Calsons, Inc.
G.R No. L-19867 | May 29, 1968
FACTS: CALSONS, INC. applied for a loan of
P2,000,000.00 to appellee to pay the balance of the purchase
price of certain parcels of land situated at the corner of Globo
de Oro and Elizondo Streets, Quiapo, Manila, and to finance
the construction of a two-storey textile market building on
said land. To secure payment of the note "and/or the interest
thereon and/or other obligations arising thereunder",
appellants executed on the same date a first mortgage in
favor of appellee on five (5) parcels of land particularly
described in the mortgage contract, together with all the
buildings and improvements now existing thereon or which
may hereafter be constructed. Their contract was subject to
multiple conditions. One of which provided that Calson’s
cannot dispose of the machineries without securing GSIS’
consent.
Appellee filed a complaint for the foreclosure of the
mortgage with the Court of First Instance of Manila on
August 11, 1958, alleging a number of violations of the
mortgage contract, among that Calson’s sold the complete
band sawmill and filing machine which allegedly formed
part of the property. In defense, Calson says that those were
not included in the mortgage.
ISSUE: Whether or not the band sawmill and filing machine
were part of the mortgage. -YES
RULING: Yes, the band sawmill and filing machine were
part of the mortgage. The mortgage was on the lands
"together with all the buildings and improvements now
existing or which may hereafter be constructed" thereon.
And the machineries, as found by the trial court, were
permanently attached to the property, and installed there by
the former owner to meet the needs of certain works or
industry therein. They were therefore part of the immovable
pursuant to Article 415 of the Civil Code and need not be the
subject of a separate chattel mortgage in order to be deemed
duly encumbered in favor of appellee. Hence, its disposal
without GSIS’ consent was in contravention to their contract.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Tumulad v. Vicencio
G.R No. L-30173 | September 30, 1971
FACTS: Alberta Vicencio and Emiliano Simeon received a
loan of P4, 800 from Gavino and Generosa Tumalad. To
guaranty said loan, Vicencio executed a chattel mortgage in
favor of Tumalad over their house of strong materials which
stood on a land which was rented from the Madrigal &
Company, Inc. When Vicencio defaulted in paying, the
house was extrajudicially foreclosed, pursuant to their
contract. It was sold to Tumalad and they instituted a Civil
case in the Municipal Court of Manila to have Vicencio
vacate the house and pay rent.
The MTC decided in favor of Tumalad ordering Vicencio to
vacate the house and pay rent until they have completely
vacated the house. Vicencio is questioning the legality of the
chattel mortgage on the ground that 1) the signature on it was
obtained thru fraud and 2) the mortgage is a house of strong
materials which is an immovable therefore can only be the
subject of a REM. On appeal, the CFI found in favor of
Tumalad, and since Vicencio failed to deposit the rent
ordered, it issued a writ of execution, however the house was
already demolished pursuant to an order of the court in an
ejectment suit against Vicencio for non-payment of rentals.
Thus, the case at bar.
ISSUE: Whether or not the Chattel Mortgage is void since
its subject is an immovable. -NO
RULING: No, although a building is by itself an immovable
property, parties to a contract may treat as personal property
that which by nature would be real property and it would be
valid and good only insofar as the contracting parties are
concerned. By principle of estoppel, the owner declaring his
house to be a chattel may no longer subsequently claim
otherwise.
When Vicencio executed the Chattel Mortgage, it
specifically provides that the mortgagor cedes, sells and
transfers by way of Chattel mortgage. They intended to treat
it as chattel therefore are now estopped from claiming
otherwise. Also, the house stood on rented land which was
held in previous jurisprudence to be personalty since it was
placed on the land by one who had only temporary right over
the property thus it does not become immobilized by
attachment.
Page | 17
 PROPERTY
Notes and Digests
Caltex v. CBAA
G.R No. L-50466 | May 31, 1982
FACTS: This case is about the realty tax on machinery and
equipment installed by Caltex (Philippines) Inc. in its gas
stations located on leased land. The machines and equipment
consist of underground tanks, elevated tank, elevated water
tanks, water tanks, gasoline pumps, computing pumps, water
pumps, car washer, car hoists, truck hoists, air compressors
and tireflators.
Said machines and equipment are loaned by Caltex to gas
station operators under an appropriate lease agreement or
receipt. It is stipulated in the lease contract that the operators,
upon demand, shall return to Caltex the machines and
equipment in good condition as when received, ordinary
wear and tear excepted. The lessor of the land, where the gas
station is located, does not become the owner of the
machines and equipment installed therein. Caltex retains the
ownership thereof during the term of the lease.
ISSUE: Whether or not the said gas station equipment are
considered immovables. -YES
RULING: Yes, Immovables. This issue has to be resolved
primarily under the provisions of the Assessment Law and
the Real Property Tax Code. Under, Sec. 38 of the said law:
“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.”
The equipment and machinery, are considered as
appurtenances to the gas station building or shed owned by
Caltex (as to which it is subject to realty tax) and which
fixtures are necessary to the operation of the gas station, for
without them the gas station would be useless, and which
have been attached or affixed permanently to the gas station
site or embedded therein, are taxable improvements and
machinery within the meaning of the Assessment Law and
the Real Property Tax Code.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Meralco Securities v. CBAA
G.R No. L-46245 | May 31, 1982
FACTS: Meralco Securities installed from Batangas to
Manila a pipeline system consisting of cylindrical steel pipes
joined together and buried not less than one meter below the
surface along the shoulder of the public highway. The pipes
are embedded in the soil and are firmly and solidly welded
together so as to preclude breakage or damage thereto and
prevent leakage or seepage of the oil. The valves are welded
to the pipes so as to make the pipeline system one single
piece of property from end to end. Pursuant to the
Assessment Law, Commonwealth Act No. 470, the
provincial assessor of Laguna treated the pipeline as real
property and issued tax declarations, containing the assessed
values of portions of the pipeline.
Meralco appealed the assessments to the CBAA, but the
latter ruled that pipeline is subject to realty tax. CBAA
argued that the pipeline is subject to realty tax because they
are contemplated in Assessment Law and Real Property Tax
Code. Meralco insists that its pipeline is not subject to realty
tax because it is not real property within the meaning of Art.
415.
ISSUE: Whether or not the pipeline system of Meralco
Securities is an immovable property. -YES
RULING: Yes. The pipeline system is a construction
adhering to the soil. Pipeline means a line of pipe connected
to pumps, valves and control devices for conveying liquids,
gases or finely divided solids. It is a line of pipe running upon
or in the earth, carrying with it the right to the use of the soil
in which it is placed.
Article 415[l] and [3] provides that real property may consist
of constructions of all kinds adhered to the soil and
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.
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. It is also
a proper subject of a realty tax.
Page | 18
 PROPERTY
Notes and Digests
Punsalan v. Lacsamana
G.R. No. L-55729, March 18, 1983
FACTS: Punsalan commenced suit for “Annulment of Deed
of Sale with Damages” against PNB and Lacsamana,
essentially impugning the validity of the sale of the
warehouse as embodied in the Amended Deed of Sale.
Punsalan alleged that he is the owner of the warehouse under
Tax Declaration No. 5619, not by the bank either by virtue
of the public auction sale conducted by the Sheriff and sold
to the latter.
PNB filed a Motion to Dismiss for improper venue
considering that the warehouse/building is an immovable
property pursuant to Article 415, No. 1 of the New Civil
Code; and, as such the action of the Punsalan is a real action
affecting title to real property which, under Section 2, Rule
4 of the New Rules of Court, must be tried in the province
where the property or any part thereof lies.
ISSUE: Whether or not the warehouse is an immovable
property and must be tried in the province where the property
lies.
RULING: The warehouse claimed to be owned by Punsalan
is an immovable or real property as provided in article 415(l)
of the Civil Code.
Buildings are always immovable under the Code. 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.
While it is true that Punsalan does not directly seek the
recovery of title or possession of the property in question, his
action for annulment of sale and his claim for damages are
closely intertwined with the issue of ownership of the
building which, under the law, is considered immovable
property, the recovery of which is Punsalan's primary
objective. 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.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Prudential Bank v. Panis
G.R. No. L-50008 | August 31, 1987
FACTS: In 1971, Spouses Magcale obtained a loan from
Prudential Bank secured by Real Estate Mortgage on
residential building with warehouse including the right of
occupancy on the lot where the property is erected. The
Secretary of Agriculture issued Miscellaneous Sales Patent
No. 4776 over the parcel of land, possessory rights over
which were mortgaged to Prudential Bank, in favor of
Fernando Magcale on April 24, 1973.
The Spouses Magcale failed to pay their obligations, thus,
the deeds of Real Estate Mortgage were extrajudicially
foreclosed.
ISSUE: Whether or not a valid real estate mortgage can be
constituted on the building erected on the land belonging to
another. -YES
RULING: Yes. 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."
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 be still a real estate mortgage for the
building would still be considered immovable property even
if dealt with separately and apart from the land. In the same
manner, this Court has also established that possessory rights
over said properties before title is vested on the grantee, may
be validly transferred or conveyed as in a deed of mortgage.
Page | 19
 PROPERTY
Notes and Digests
Benguet Corp v. CBAA
G.R. No. 106041 | January 29, 1993
FACTS: The realty tax assessment involved in this case
amounts to Php11,319,304.00. It has been imposed on the
Benguet Corporation’s tailings dam and the land thereunder
over its protest.
Benguet Corporation does not dispute that the tailings dam
may be considered realty within the meaning of Article 415.
It insists, however, 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
although a considerable sum may have been spent in
constructing and maintaining it.
ISSUE: Whether or not the tailings dam and the lands
submerged thereunder are subject to realty tax or a taxable
improvement. -YES
RULING: Yes. The Court is convinced that the subject dam
falls within the definition of an "improvement" because it is
permanent in character and it enhances both the value and
utility of Benguet Corporation's mine. Moreover, the
immovable nature of the dam defines its character as real
property under Article 415 of the Civil Code and thus makes
it taxable under Section 38 of the Real Property Tax Code.
It would appear that whether a structure constitutes an
improvement so as to partake of the status of realty would
depend upon the degree of permanence intended in its
construction and use. 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. 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.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Serg’s Products v. PCI
G.R. No. 137705 | August 22, 2000
FACTS: PCI Leasing and Finance filed with the RTC-QC a
complaint for sum of money with an application for a writ of
replevin. The writ of replevin (Movables) was granted
directing its sheriff to seize and deliver the machineries and
equipment to PCI Leasing after five (5) days and upon the
payment of the necessary expenses. Goquiolay filed a motion
for special protective order, invoking the power of the court
to control the conduct of its officers and amend and control
its processes, praying for a directive for the sheriff to defer
enforcement of the writ of replevin.
This motion was opposed by PCI Leasing, on the ground that
the properties were still personal and therefore still subject to
seizure and a writ of replevin. In their reply, SPI asserted that
the properties sought to be seized [were] immovable as
defined in Article 415 of the Civil Code, the parties’
agreement to the contrary notwithstanding.
ISSUE: Whether or not the machineries purchased and
imported by SPI became real property by virtue of
immobilization. -YES
RULING: Yes. The machineries became real properties by
virtue of immobilization. In the present case, the machines
that were the subjects of the Writ of Seizure were placed by
SPI in the factory built on their own land. Indisputably, they
were essential and principal elements of their chocolate-
making industry. Hence, although each of them was movable
or personal property on its own, all of them have become
immobilized by destination because they are essential and
principal elements in the industry. In that sense, SPI was
correct in arguing that the said machines are real, not
personal, property pursuant to Article 415 (5) of the Civil
Code.
In this case, the Court did not agree with the submission of
the SPI that the said machines are not proper subjects of the
Writ of Seizure. The Court has held that contracting parties
may validly stipulate that a real property be considered as
personal. After agreeing to such stipulation, they are
consequently estopped from claiming otherwise. Under the
principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found
therein. In the present case, the Lease Agreement clearly
provides that the machines in question are to be considered
as personal property. Under the circumstances, they are
proper subjects of the Writ of Seizure.
Page | 20
 PROPERTY
Notes and Digests
Tsai v. Court of Appeals
G.R. No. 120098 | October 2, 2001
FACTS: Due to business reverses, EVERTEX filed for
insolvency. All its assets were taken into the custody of the
Insolvency Court, including the collateral, real and personal
properties, securing two mortgages. Upon EVERTEX's
failure to meet its obligation to PBCom, the latter
commenced extrajudicial foreclosure of the mortgaged
properties where PBCom emerged as the highest bidder.
PBCom consolidated its ownership over the lot and all the
properties in it. PBCom leased the entire factory premises to
Ruby L. Tsai and later sold the factory, lock, stock and barrel
to Tsai including the contested machineries.
EVERTEX argue that the controverted units of machinery
are not "real properties" but chattels, and, therefore, they
were not part of the foreclosed real properties, rendering the
lease and the subsequent sale thereof to Tsai a nullity.
ISSUE: Whether or not the contested properties are personal
or movable properties. -YES
RULING: 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 gives us a
contrary indication(Treated as Movable). 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.
An immovable may be considered a personal property if
there is a stipulation as when it is used as 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 Mortgage 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.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Soriano v. Galit
GR No. 156295 | September 23, 2003
FACTS: Ricardo Galit obtained a loan from Soriano; this
loan was secured by a real estate mortgage over a parcel of
land. After Ricardo failed to pay his obligation, Soriano filed
a complaint for sum of money against him. The spouses
defaulted and the trial court ruled in favor of Soriano. The
trial court then issued a writ of execution, by virtue of which
the Sheriff levied real properties of Spouses Galit which
included the parcel of land covered by OCT No. T-569, along
with a store/house and a bodega constructed on Lot 1103. At
the sale of the properties in a public auction, Soriano was the
highest and only bidder. Soriano was then granted a writ of
possession over the said properties. However, during the list
of properties in the writ of possession included Lot 1103, or
the parcel of land where the store/house and bodega was
situated.
Spouses Galit assailed the inclusion of the parcel of land
among the list of real properties in the writ of possession.
They argued that the said property was not among those sold
on execution by the Sherrif as reflected in the Sale on
Execution of Real Property. Soriano, in opposition, prayed
for the dismissal of the petition.
ISSUE: Whether or not the land on which the buildings
levied upon in execution is necessarily included in the writ
of possession. -NO
RULING: No. Article 415 of the Civil Code provides that
land, buildings, roads, constructions of all kinds adhered to
the soil are immovable property. It enumerates land and
buildings separately. This can only mean that a building is,
by itself, considered immovable. It has been held that 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 mortgage
would be still a real estate mortgage for the building would
still be considered immovable property even if dealt with
separately and apart from the land.
In this case, considering that what was sold by virtue of the
writ of execution issued by the trial court was merely the
storehouse and bodega constructed on the parcel of land
covered by Transfer Certificate of Title No. T-40785, which
by themselves are real properties of the spouses, the same
should be regarded as separate and distinct from the
conveyance of the lot on which they stand.
Page | 21
 PROPERTY
Notes and Digests
J.G. Summit Holdings v. Court of Appeals
GR No. 124293 | January 31, 2005
FACTS: The property involved here is a right of first refusal
with regard to the sale of shares of stock which was a result
of a joint venture (JVA) between the National Investment
and Development Corporation (NIDC) with a Japanese
corporation, Kawasaki Heavy Industries.
The venture was for the operation and management of the
Philippine Shipyard and Engineering Corporation
(PHILSECO).
In the interest of national economy and the government,
NIDC through the Committee on Privatization and Asset
Privatization Trust (APT), decided to sell the Government’s
share in PHILSECO to Private entities.
JG Summit was declared highest bidder. However, because
of the right to top by 5% percent which was a modification
of on Kawasaki’s right of first refusal, the highest bid
through Philyard Holdings, was able to top the winning bid.
JG Summit protested, contending that PHILSECO, as a
shipyard is a public utility and, hence, must observe the 60%-
40% Filipino-foreign capitalization.
ISSUE: Whether or not the Constitutional prohibition on
ownership of land extends to immovable or real property. -
NO
Whether or not the right of first refusal is an immovable
property. -YES
RULING: First and foremost, the case at bar involves a right
of first refusal over shares of stock, not an option to buy land
itself.
Even Arguing that PHILSECO owned land at the time, the
right of first refusal can be assigned to a qualified Filipino
entity in order to maintain the 60-40% ratio. Which in this
case was validly assigned to PHILYARDS a Filipino
Corporation.
As correctly observed by the APT, the prohibition in the
Constitution applies only to ownership of land. It does not
extend to immovable or real property such as a right of first
refusal which is classified under Article 415 of the Civil
Code which includes “contracts for public works, and
servitudes and other real rights over immovable property”.
Which in this case was the right of first refusal between
Kawasaki and NIDC.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
FELS ENERGY v. Province of Batangas
GR No. 168557 | February 16, 2007
FACTS: NPC entered into a lease contract with Polar
Energy, Inc. over a diesel engine power barges moored at
Balayan Bay in Batangas. The contract was denominated as
an Energy Conversion Agreement which stated the
responsibility of NPC to pay all taxes, import duties, fees
charges, and other levies imposed by the National
Government of the Philippines, among others. Subsequently,
Polar Energy, Inc. assigned its rights under the Agreement to
FELS. NPC sought for reconsideration of the Provincial
Assessor’s decision to assess real property taxes on the
power barges. They contended that the power barges belong
to NPC; since they are actually, directly and exclusively used
by it, the power barges are covered by the exemptions under
Section 234(c) of RA 7160.
ISSUE: Whether or not the power barges, which are floating
and movable, are personal properties and therefor not subject
to real property tax. -NO
RULING: No. Article 415 (9) of the New Civil Code
provides that "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" are considered immovable
property. Thus, power barges are categorized as immovable
property by destination, being in the nature of machinery and
other implements intended by the owner for an industry or
work which may be carried on in a building or on a piece of
land and which tend directly to meet the needs of said
industry or work.
The Court further affirmed the finding that the owner of the
taxable properties is FELS, which in fine, is the entity being
taxed by the local government. As stipulated in their
agreement that the POLAR shall own the power barges and
all the fixtures, fittings, machinery and equipment on the site
used in connection with the power barges. The mere
undertaking of NPC under Section 10.1 of the Agreement,
that it shall be responsible for the payment of all real estate
taxes and assessments, does not justify the exemption. The
privilege granted to NPC cannot be extended to FELS. The
covenant is between FELS and NPC and does not bind a third
person not privy thereto, in this case, the Province of
Batangas.
Page | 22
 PROPERTY
Notes and Digests
MERALCO v. City Assessor exclusively used to meet the needs of the particular industry,
G.R. No. 166102, August 05, 2015 business, or activity; and (2) by their very nature and
purpose, be designed for, or necessary for manufacturing,
FACTS: On February 20, 1989, MERALCO was exempted mining, logging, commercial, industrial, or agricultural
from payment of real property tax on its electric facilities. purposes.

The LBAA rendered a Decision finding that MERALCO
was required to pay the City Government of Lucena a 5% tax
of its gross earnings, whereas the poles, wires, insulators,
transformers, and electric meters of MERALCO, these were
real properties and held that: (1) the steel towers fell within
the term “poles” expressly exempted from taxes under the
franchise of MERALCO; and (2) the steel towers were
personal properties under the provisions of the Civil Code
and, hence, not subject to real property tax.
MERALCO again received a letter from the City Treasurer
of Lucena six years later, which they were being assessed for
real property delinquency on its machineries beginning
1990. MERALCO argues that its transformers, electric posts,
transmission lines, insulators, and electric meters are not
subject to real property tax, given that the definition of
“machinery” under Section 199(o) of the Local Government
Code, on which real property tax is imposed, must still be
within the contemplation of real or immovable property
under Article 415 of the Civil Code because it is axiomatic
that a statute should be construed to harmonize with other
laws on the same subject matter as to form a complete,
coherent, and intelligible system.
ISSUE: Whether or not the machinery of MERALCO are
real properties. -YES
RULING: YES, the machinery of MERALCO are real
properties which are subject to real property tax under the
Local Government Code. The conclusions of the Court in the
1964 MERALCO case do not hold true anymore under the
Local Government Code. The reference in said case to the
Civil Code definition of real property was only an alternative
argument since the tax law at the time does not provide for a
definition of real property.
The properties under Article 415 (5) of the Civil Code are
immovables by destination, or "those which are essentially
movables, 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." These
properties, including machinery, become immobilized if the
following requisites concur:
(a) they are placed in the tenement by the owner of such
tenement;
(b) they are destined for use in the industry or work in
the tenement; and
(c) they tend to directly meet the needs of said industry
or works.
The first two requisites are not found anywhere in the Local
Government Code. MERALCO insists on harmonizing the
provisions of the Civil Code and the Local Government
Code. The Court disagrees, however, for this would
necessarily mean imposing additional requirements for
classifying machinery as real property for real property tax
purposes not provided for, or even in direct conflict with, the
provisions of the Local Government Code. The Court has
acknowledged that 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.
Therefore, for determining whether machinery is real
property subject to real property tax, the definition and
requirements under the Local Government Code are
controlling.(Not Civil Code)

While the Local Government Code still does not provide for
a specific definition of "real property," Sections 199(0) and
232 of the LGC, respectively, gives an extensive definition
of what constitutes "machinery" and unequivocally subjects
such machinery to real property tax.

The Court reiterates that the machinery subject to real

property tax under the Local Government Code "may or may
not be attached, permanently or temporarily to the real
property;" and the physical facilities for production,
installations, and appurtenant service facilities, those which
are mobile, self-powered or selfpropelled, or are not
permanently attached must (a) be actually, directly, and

Page | 23
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
 PROPERTY
Notes and Digests
Capitol Wireless v. Provincial Assessor of Batangas
G.R. No. 180110, May 30, 2016
FACTS: Capwire has signed agreements with other local
and foreign telecommunications companies covering an
international network of submarine cable systems such as the
APCN (which connects Australia, Thailand, Malaysia,
Singapore, Hong Kong, Taiwan, Korea, Japan, Indonesia
and the Philippines); the Brunei MalaysiaPhilippines Cable
Network System (BMP-CNS), the Philippines Italy (SEA-
ME-WE-3 CNS), and the Guam Philippines (GP-CNS)
systems. The agreements provide for co-ownership and other
rights among the parties over the network.
The Provincial Assessor had determined that the submarine
cable systems described in Capwire's Sworn Statement of
True Value of Real Properties are taxable real property, a
determination that was contested by Capwire.
ISSUE: Whether or not submarine wires and cables used for
telecommunications are real property. -YES
RULING: YES. Submarine or undersea communications
cables are akin to electric transmission lines.(Immovables)
In Manila Electric Company v. City Assessor and City
Treasurer of Lucena City the Court held that Both electric
lines and communications cables, in the strictest sense, are
not directly adhered to the soil but pass through posts, relays
or landing stations, but both may be classified under the term
"machinery" as real property under Article 415(5) of the
Civil Code for the simple reason that such pieces of
equipment serve the owner's business or tend to meet the
needs of his industry or works that are on real estate.
Even objects in or on a body of water may be classified as
such, as "waters" is classified as an immovable under Article
415(8) of the Code. A classic example is a boathouse which,
by its nature, is a vessel and, therefore, a personal property
but, if it is tied to the shore and used as a residence, and since
it floats on waters which is immovable, is considered real
property. Besides, the Court has already held that "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."
Thus, absent any showing from Capwire of any express grant
of an exemption for its lines and cables from real property
taxation, then this interpretation applies and Capwire's
submarine cable may be held subject to real property tax.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Provincial Assessor v. Filipinas Palm Oil Plantation
G.R. No. 183416, October 05, 2016
FACTS: Filipinas Palm Oil Plantation, Inc, is a private
organization engaged in palm oil plantation. Harvested fruits
from oil palm trees are converted into oil through Filipinas’
milling plant in the middle of the plantation area. The
Provincial Assessor of Agusan del Sur is a government
agency in charge with the assessment of lands under the
public domain. It assessed Filipinas’ properties found within
the plantation area. Provincial Assessor asserted that haulers
and other pieces of equipment which are unmovable are
taxable real properties.
ISSUE: Whether or not the road equipment and mini haulers
are immovable properties. -YES
RULING: Yes. The road equipment and mini haulers are
immovable properties.
Article 415(5) of the New Civil Code defines “machinery”
as that which constitutes an immovable property.
The following are immovable property: 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.
In the case at bar, Filipinas Palm Oil is engaged in palm oil
plantation. Thus, it harvests fruits from palm trees for oil
conversion through its milling plant. By the nature of
Filipinas Palm Oil’s business, transportation is indispensable
for its operations. The indispensability of the road equipment
and mini haulers in transportation makes it actually, directly,
and exclusively used in the operation of Filipinas Palm Oil’s
business. Therefore, the road equipment and mini haulers
shall be considered as real property, subject to real property
tax.
Page | 24
 PROPERTY
Notes and Digests
MOVABLE PROPERTY
**Article 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 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)
**Article 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)
DISCUSSION:
Examples of Various Kinds of Personal Property
Article 416, paragraph:
(1) Fountain pen, guitar, animals.
(2) Crops for the purpose of the Chattel Mortgage Law or
Machineries placed on a tenement by a tenant who did
not act as the agent of the tenement owner.
(3) Electricity, gas, light, chemicals.
(4) Machinery not attached to land nor needed for the
carrying on of an industry conducted therein such as
portable radio, laptop, or computer.
Article 417, paragraph:
(1) Rights or Credits. Even a promissory note is personal
property. Example: Right to bring action, right to
collect.
Note:
The provision does not apply to a the right to recover
possession for a piece of land is considered real action,
relating to real property and not personal property.
This also does not apply to mortgage on real estate as
it involves real property by analogy.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
(2) Shares of stock, the certificate evidencing ownership
of the share as well as the share itself.
Q: Is a share in a partnership considered personal
property?
A: Yes. As a matter of fact, all shares in all juridical persons
should be considered personal property, for there is no reason
to discriminate between shares in a corporation, and shares in
other juridical persons.
Note:
In the case of Cedman v. Winslow, even if the sole property of
a corporation should consist only of real property, a share of
stock in said corporation is considered personal property.
BAR QUESTION:
Q: What are Personal or Movable Properties?
A: Cite Articles 416 and 417 together.
Special Kind of Personal Property
The author, composer, painter, sculptor, inventor have rights
over their works. These rights are personal property,
(Intellectual Property).
Personal Effects
They are personal property, but not all personal property are
personal effects. Personal effects include only such tangible
property as applied to a person and cannot include automobiles,
although they are indeed personal property.
Tests to determine whether a property is a movable
property:
1. Test of Exclusion – Everything that is not included in
Article 415. Example: Ships or vessels or interest in a
business.
2. By Reason of a Special Law – Immovable by nature
but movable for the purpose of the special law.
Example: growing crops for purposes of the Chattel
Mortgage Law.
3. Test of Mobility – Also called test by description, If
the property is capable of being carried from place to
place without injuring the real property to which it may
in the meantime be attached.
Page | 25
 PROPERTY
Notes and Digests
Article 418. Movable property is either consumable or non-
consumable. To the first class belong those movables which
cannot be used in a manner appropriate to their nature
without their being consumed; to the second class belong all
the others. (337)

DISCUSSION:
Consumable Property – This cannot be used according to its
nature without its being consumed.

Non-consumable Property – It is any other kind of movable

property.

Classification:
1. According to their “nature”:
a. Consumable
b. Non-consumable

2. According to the” intention” of the parties:

a. Fungible (res fungibles)
b. Non-fungible (res nec fungibles)

Note:
If it is agreed that the identical thing be returned, it is non-
fungible, even though by nature it is consumable.

Example:
A borrows a sack of rice, not for consumption but for display or
exhibition. Then the rice is considered non-fungible.

If it is agreed that the equivalent of the thing is to be returned,

the property is then fungible.

Example:
A borrows vinegar to consume and promise to return an
equivalent amount of the same quality, the property is not only
consumable, it is also fungible.

Note:
As to whether a property is fungible or non-fungible is
determined by the agreement of the parties and not on the
consumability of the thing.

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COLLEGE OF LAW
 PROPERTY
Notes and Digests
Sibal v. Valdez
G.R. No. L-26278 | August 4, 1927
FACTS: Leon Sibal brought a case against Emiliano Valdez
in which Valdez won. To satisfy the judgment, the deputy
sheriff attached and sold to Valdez the sugar cane planted by
Sibal and his tenants. Within one year from the date of
attachment, Sibal tendered to Valdez the amount plus interest
in order to redeem said sugarcane. However, Valdez refused
to receive the money and return the sugarcane.
Sibal prayed that Valdez be ordered to consent to the
redemption of the sugarcane.
On his part, Valdez argued that the sugarcane in question
had the nature of personal property and was not, therefore,
subject to redemption.
Sibal contended that sugarcane comes under the
classification of real property as “ungathered products” in
paragraph 2 of Article 334 of the Civil Code (“growing
fruits” under par. 2 of Article 415).
ISSUE: Whether or not the sugarcane may be regarded as
personal property. -YES
RULING: Yes. Act No. 1508, the Chattel Mortgage Law,
fully recognized that growing crops are personal property.
Section 2 of said Act provides: “All personal property shall
be subject to mortgage, agreeable to the provisions of this
Act, and a mortgage executed in pursuance thereof shall be
termed a chattel mortgage.” Section 7 in part provides: “If
growing crops be mortgaged the mortgage may contain an
agreement stipulating that the mortgagor binds himself
properly to tend, care for and protect the crop while growing.
It is clear from the foregoing provisions that Act. No. 1508
was enacted on the assumption that “growing crops” are
personal property. This consideration tends to support the
conclusion that paragraph 2 of Article 334 of the Civil Code
has been modified by Section 450 of Act No. 190 and by Act
No. 1508 in the sense that “ungathered products” as
mentioned in said article of the Civil Code have the nature of
personal property. In other words, the phrase “personal
property” should be understood to include “ungathered
products”.
Therefore, paragraph 2 of Article 334 of the Civil Code has
been modified by section 450 of the Code of Civil Procedure
and by Act No. 1508, the sense that, for the purpose of
attachment and execution, and for the purposes of the Chattel
Mortgage Law, “ungathered products” have the nature of
personal property.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Ordinarily, sugarcane is considered as real property under
paragraph 2 of Article 415 of the Civil Code, but it must be
regarded as personal property for purposes of the Chattel
Mortgage Law, and also for purposes of attachment. The
right to the growing crops mobilizes (or makes personal) the
crops by anticipation, rendering the crop movable.
Laurel v. Judge Abrogar
G.R. No. 155076, January 13, 2009
FACTS: Laurel is one of the accused in a criminal case who
was charged with theft for stealing and using the
international long distance calls belonging to PLDT by
conducting International Simple Resale (ISR), which is a
method of routing and completing international long distance
calls using lines, cables, antenae, and/or airwave frequency
which connect directly to the local or domestic exchange
facilities of the country where the call is destined, effectively
stealing this business from PLDT while using its facilities in
the estimated amount of P20,370,651.92 to the damage and
prejudice of PLDT, in the said amount.
PLDT insists that the Revised Penal Code should be
interpreted in the context of the Civil Code’s definition of
real and personal property. The enumeration of real
properties in Article 415 of the Civil Code is exclusive such
that all those not included therein are personal properties.
Since Article 308 of the Revised Penal Code used the words
"personal property" without qualification, it follows that all
"personal properties" as understood in the context of the
Civil Code, may be the subject of theft under Article 308 of
the Revised Penal Code. PLDT alleges that the international
calls and business of providing telecommunication or
telephone service are personal properties capable of
appropriation and can be objects of theft. Thus, the term
"personal properties" under Article 308 of the Revised Penal
Code is not limited to only personal properties which are
"susceptible of being severed from a mass or larger quantity
and of being transported from place to place."
According to PLDT, the "international phone calls" which
are "electric currents or sets of electric impulses transmitted
through a medium, and carry a pattern representing the
human voice to a receiver," are personal properties which
may be subject of theft. Article 416(3) of the Civil Code
deems "forces of nature" (which includes electricity) which
are brought under the control by science, are personal
property.
1ST ISSUE: Whether or not International Long Distance
call is a personal property under Article 416(3).
RULING: No. International Long Distance Calls are not
personal property. It cannot be said that such international
long distance calls were personal properties belonging to
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 PROPERTY
Notes and Digests
PLDT since the latter could not have acquired ownership
over such calls. PLDT merely encodes, augments, enhances,
decodes and transmits said calls using its complex
communications infrastructure and facilities. PLDT not
being the owner of said telephone calls, then it could not
validly claim that such telephone calls were taken without its
consent. It is the use of these communications facilities
without the consent of PLDT that constitutes the crime of
theft, which is the unlawful taking of the telephone services
and business.
2ND ISSUE: Whether or not the Business Interest is a
personal Property
Laud v. People
G.R. No. 199032, November 19, 2014
FACTS: This is a criminal case involving a retired Police
Officer, Bienvenido Laud. A search warrant was issued to
search the three caves in his compound where human
remains were alleged to have been buried. The human
remains were found inside his compound. Laud then
contended that the human remains were not proper subjects
of the search citing Article 416 of the Civil Code and
contending that the human remains were not capable of
appropriation, therefore they could not be proper subjects of
the search.

RULING: Yes. Business Interest is a personal property. The ISSUE: Whether or not the human remains are considered
business of providing telecommunication or telephone as personal property. -YES
service is likewise personal property which can be the object
of theft under Article 308 of the Revised Penal Code. RULING: Yes. The Supreme Court ruled that under Article
Business may be appropriated under Section 2 of Act No. 416 (4) of the Civil Code which states that, in general, all
3952 (Bulk Sales Law), hence, could be object of theft. things which can be transported from place to place without
Interest in business was not specifically enumerated as impairment of the real property to which they are fixed.
personal property in the Civil Code in force at the time the Considering that human remains can generally be
above decision was rendered. Yet, interest in business was transported from place to place, they are considered as
declared to be personal property since it is capable of personal property.
appropriation and not included in the enumeration of real
properties. Article 414 of the Civil Code provides that all
things which are or may be the object of appropriation are
considered either real property or personal property.
Business is likewise not enumerated as personal property
under the Civil Code. Just like interest in business, however,
it may be appropriated. Following the ruling in Strochecker
v. Ramirez, business should also be classified as personal
property. Since it is not included in the exclusive
enumeration of real properties under Article 415, it is
therefore personal property. Thus, Laurel can be liable for
theft only by stealing the business interest of PLDT.

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COLLEGE OF LAW
 PROPERTY
Notes and Digests
PROPERTY IN RELATION TO THE PERSON TO 3. For the Development of National Wealth – like our
WHOM IT BELONGS national resources.

Article 419. Property is either of public dominion or of
private ownership.
DISCUSSION:
This article expressly provides that properties are owned either:
1. In a Public Capacity
2. In a Private Capacity
Note:
With regard to the state, it may own properties both in its public
capacity (properties of public dominion) and in its private
capacity (patrimonial property)
**Article 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;
(2) Those which belong to the State, without being for public
use, and are intended for some public service or for the
development of the national wealth.
DISCUSSION:
Q: What is Public Dominion?
A: There are two senses in the view of Public Dominion:
1. The sense where the State owns and administers the
property; and
2. The sense where it means ownership by the public in
general in that not even the State or its subdivisions
may make them the object of commerce as long as they
remain properties of public use.
3 Kinds of Property of Public Dominion:
Characteristics of Properties of Public Dominion:
1. They are outside the commerce of man, and cannot be
leased, donated, sold, or be the object of any contract,
except insofar as they may be the object of repairs and
improvements and other incidental things of similar
character..
2. They cannot be acquired by prescription. No matter
how long the possession of the properties has been ,
there can be no prescription against the State regarding
property of the Public Domain.
3. They cannot be registered under the Land Registration
Law and be the subject of a Torrens Title because the
land remains to be property of the Public Dominion.
4. They, as well as their usufruct, cannot be levied upon
by execution, nor can they be attached.
5. In general, they can be used by everybody.
6. They may be either real or personal property.
Mercado v. Municipal President
G.R. No. L-37986 | March 1, 1934
FACTS: Mariano Mercado, in order to facilitate the cutting
and transportation of firewood and other products, produced
on the said hacienda, towards the Nasi River on the east or
towards Limasan creek on the west, connected the two
recesses or bodies of water in question by means of
excavation and, after having so connected them, made other
excavations at both ends towards the said directly connecting
both bodies of water, and which later became known as the
Batasan-Limasan or Pinac Buñgalun creek.
Said creek or canal already existed at the time of the
institution of the registration proceedings wherein judgment
was rendered resulting in the issuance of certificate of title in
favor of Romulo Mercado.

1. For Public Use – like roads, canals which may be used Romulo Mercado decided to convert the said creek into a fish
by ANYBODY. pond and with that object in view, he closed the two openings
thereof towards the Nasi River on one side and Limasan
2. For Public Service – like national government creek on the other side because residents nearby started using
buildings, army rifles , army vessels, or government it. Eufemia Mercado appealed the order of the Secretary of
vehicles which may be used only by AUTHORIZED Commerce with the CFI Pampanga which later dismissed the
PERSONS. said appeal, holding the creek in question as property of the
public domain.

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COLLEGE OF LAW
 PROPERTY
Notes and Digests
ISSUE: Whether or not the creek in question is property of
the public domain. -Yes
RULING: The creek in question is property of the public
domain. Articles 339 of the Spanish Civil Code of 1889
provides that property of public ownership includes “that
devoted to public use, such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, riverbanks,
shores, roadsteads, and that of a similar character.”
Article 407 of the same Code provides that “(1) Rivers and
their natural channels; (2) Continuous or intermittent waters
from springs or brooks running in then natural channels and
the channels themselves; (3) Waters rising continuously or
intermittently on lands of public; xxx (8) Waters which flow
continuously or intermittently from lands belonging to
private persons, to the State, to provinces, or to towns from
the moment they leave such lands; xxx” are of public
ownership.
Article 408 of the Spanish Civil Code of 1889 provides that
“(1) Waters, either continuous or intermittent rising on
private estates, while they run through them; (2) Lakes and
ponds and their beds when formed by nature on such estates;
(3) Subterranean waters found therein; (4) Rain waters
falling thereon as long as they remain within their
boundaries; and (5) The channels of flowing streams,
continuous or intermittent formed by rain water, and those of
brooks crossing estates which are not of public ownership”
are of private ownership.
Further, “the water, bed, banks, and floodgates of a ditch or
aqueduct are deemed to be an integral part of the estate or
building for which the waters are intended. The owners of
estates through or along the boundaries of which the
aqueduct passes can assert no ownership over it, nor any
right to make use of its beds or banks, unless they base their
claim on title deed which specify the right or the ownership
claimed.
Eufemia Mercado cannot invoke in her favor the Article 408
(5) on the ground that although it is true that the Batasan
Limasan or Pinac Buñgalun creek passes through her
hacienda, it is nonetheless true that it is not included in any
of the kinds of private property therein enumerated. Eufemia
Mercado and her predecessors in interest, in closing the two
openings of the said creek and converting it into a fish pond,
not only appropriated for themselves the channel of the said
creek but also the creek itself. Creeks are property of public
domain. Article 339 provides that canals, rivers, torrents, and
those of a similar character are property of public ownership,
and the similarity between rivers, canals, and creeks
undoubtedly obvious on the ground that, as has been stated,
a creek is no other than arm extending from a river.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
City of Manila v. Garcia
G.R. No. L-26053 | February 21, 1967
FACTS: Without the knowledge and consent of the City of
Manila, Garcia, et. al built houses of second-class materials
in the subject parcels of land. In November 1947, Garcia, et.
al, received written permits by the mayor – labelled as “lease
contract” – to occupy the properties.
Epifanio Elementary School needed expansion. City
Engineer, pursuant to the Mayor's directive to clear squatters'
houses on city property, gave each of them thirty (30) days
to vacate and remove his construction or improvement on the
premises. This was followed by the City Treasurer's demand
on each of them, made in February and March, 1962, for the
payment of the amount due by reason of the occupancy and
to vacate in fifteen (15) days.
ISSUE: Whether or not, Garcia, et. al. has a right to remain
the subject land. -No
RULING: The excuse that they have permits from the
mayor is at best flimsy. The permits to occupy are
recoverable on thirty days' notice. They have been asked to
leave; they refused to heed. It is in this factual background
that we say that the city's need for the premises is
unimportant. The city's right to throw them out of the area
cannot be gainsaid. The city's dominical right to possession
is paramount.
They entered the land, built houses of second-class materials
thereon without the knowledge and consent of the city. Their
homes were erected without city permits. These
constructions are illegal.
Rampancy of forcible entry into government lands
particularly, is abetted by the apathy of some public officials
to enforce the government's rights. Obstinacy of these
squatters is difficult to explain unless it is spawned by
official tolerance, if not outright encouragement or
protection. Said squatters have become insensible to the
difference between right and wrong. To them, violation of
law means nothing. With the result that squatting still exists,
much to the detriment of public interest.
Squatting is unlawful and no amount of acquiescence on the
part of the city officials will elevate it into a lawful act. In
principle, a compound of illegal entry and official permit to
stay is obnoxious to our concept of proper official norm of
conduct. Because, such permit does not serve social justice;
it fosters moral decadence. It does not promote public
welfare; it abets disrespect for the law. It has its roots in vice;
so it is an infected bargain. Official approval of squatting
should not, therefore, be permitted to obtain in this country
where there is an orderly form of government.
Page | 30
 PROPERTY
Notes and Digests
We, accordingly, rule that the Manila mayors did not have said that a power to extend (or continue an act or business)
authority to give permits, written or oral, to Garcia et. al., and cannot authorize a transaction that is totally distinct. It is not
that the permits herein granted are null and void. disputed that the old Luneta is a public park or plaza and it is
so considered by Section 859 of the Revised Ordinances of
Manila Lodge v. Court of Appeals the City of Manila. Hence the “extension to the Luneta” must
G.R. No. L-41001 | September 30, 1976 also be a public park or plaza and for public use.

Furthermore, the reclaimed area was formerly a part of the

FACTS: On June 26, 1905 the Philippine Commission
Manila Bay. A bay is nothing more than an inlet of the sea.
enacted Act 1360 which authorized the City of Manila to
Pursuant to Article 1 of the Law of Waters of 1866, bays,
reclaim a portion of Manila Bay. Subsequently, the
roadsteads, coast sea, inlets and shores are parts of the
Philippine Commission passed on 18 May 1907 Act 1657,
national domain open to public use. These are also property
amending Act 1360, so as to authorize the City of Manila
of public ownership devoted to public use, according to
either to lease or to sell the portion set aside as a hotel site.
Article 339 of the Civil Code of Spain. When the shore or
The City of Manila applied for the registration of the
part of the bay is reclaimed, it does not lose its character of
reclaimed area, and on January 20, 1911. On July 13, 1911,
being property for public use, according to Government of
the City of Manila sold the reclaimed area to the Manila
the Philippine Islands vs. Cabangis
Lodge No. 761, BPOE. In January 1963 the Manila Lodge
petitioned the CFI of Manila, for the cancellation of the right
of the City of Manila to repurchase the property. This Under Article 420 of the Civil Code provides that: The
petition was granted on February 15, 1963. following things are property of public dominion:

On November 19, 1963 the Manila Lodge sold the land (1) Those intended for public use, such as roads, canals,
together with all the improvements thereon to the Tarlac rivers, torrents, ports and bridges constructed by the State,
Development Corporation. At the time of the sale, there was banks, shores, roadsteads, and others of similar character;
no annotation of any subsisting lien on the title to the
property. In June 1964 the City of Manila filed with the CFI (2) Those which belong to the State, without being for public
Manila a petition for the reannotation of its right to use, and are intended for some public service or for the
repurchase. The court directed the Register of Deeds of the development of the national wealth.
City of Manila to reannotate in toto the entry regarding the
right of the City of Manila to repurchase the property after In this case, the reclaimed land declared as “public park or
50 years. The CFI Manila ruled that the subject land is part plaza” which is intended for public use therefore, it is a
of the “public park or plaza” therefore, it is part of public property of public dominion.
domain. The TDC asserted that the trial court erred in
declaring the property in question as a public park and as a Republic v. Vda de Castillo
consequence, it nullified the sale thereof by the City of
G.R. No. L-69002 | June 30, 1988
Manila to Manila Lodge.
FACTS: In 1951, Modesto Castillo applied for registration
ISSUE: Whether or not the reclaimed area is a public
for two (2) parcels of land in the lakeshore of the Taal Lake
domain. -Yes
in Batangas. In August of 1951, they were declared as the
true and absolute owners of the land.
RULING: The grant made by Act No. 1360 of the reclaimed
land to the City of Manila is a grant of a “public” nature, the
This was met by an action for annulment of the certificates
same having been made to a local political subdivision. Such
of title by the Republic of the Philippines, alleging that such
grants have always been strictly construed against the
lands formed part of the public dominion – that said lands
grantee. The reclaimed area, an extension to the Luneta, is
had always formed part of the Taal Lake, washed and
declared to be property of the City of Manila; and is of public
inundated by the waters thereof, and being of public
dominion, intended for public use. It cannot be a patrimonial
ownership, it could not be the subject of registration as
property as Act 1360, as amended, provides by necessary
private property.
implication, that the City of Manila could not dispose of the
reclaimed area without being authorized by the lawmaking
body ISSUE: Whether or not the properties formed part of the
public dominion. -Yes
Moreover, the reclaimed area, being an “extension to the
Luneta in the City of Manila,” it is of the same nature or
character as the old Luneta. Anent this matter, it has been

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COLLEGE OF LAW
 PROPERTY
Notes and Digests
RULING: The lakeshore is considered a property of public
dominion under Article 420 par. 1 of the Civil Code. 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;
Lakeshore land or lands adjacent to the lake, like the lands in
question must be differentiated from foreshore land or that
part of the land adjacent to the sea which is alternately
covered and left dry by the ordinary flow of the tides.
No accretion was shown to exist in the case at bar. On the
contrary, it was established that the occupants of the lot filled
up the areas with shells and land to make it more habitable.
Republic v. Gonzales
G.R. No.’s. L-45338-39 | July 31, 1991
FACTS: In this case, we have two lots which are owned by
the Republic of the Philippines. These two lots were
subjected to lease application and miscellaneous sales
application. The property was in possession and occupation
of Gonzales and Josue. The land was therein developed from
a swamp to a commercial and residential area.
In 1955, President Magsaysay issued Proclamation No. 144,
which was for street widening and parking space purposes,
included the lots occupied by Gonzales and Josue. The
Republic contended that it owned the land as even
acknowledged by Gonzales and Josue by the mere filing of
applications by them. However, Gonzales and Josue contend
that such Proclamation made by the President is invalid
considering that it is not for public purpose as the use of the
subject lots were only limited to those persons who had cars.
ISSUE: Whether or not the property is property of public
domain. -Yes
RULING: Under Article 420 (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.
A property for public use is not one wherein it is used by all
citizens at all times, the essence of public use with regards to
this property is that it is open to all. There is no such
provision which prohibits non-vehicle owners from using the
street to walk on it. The same is still considered for public
use even if it cannot be used by everyone.
What makes this particular property public is the fact that it
is open to all. To constitute public use, the public in general
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
should have equal or common rights to use the land or
facility involved on the same terms, however limited in
number the people who can actually avail themselves of it at
a given time
Republic v. Court of Appeals & Morato
G.R. No. 100709 | November 14, 1997
FACTS: In this case, there was a free patent granted in favor
of Morato. This parcel of land was prohibited from being
sold or encumbered. However, during such possession the
Morato had constructed buildings thereon, leased the land,
and mortgaged the same. The Republic of the Philippines
decided to file a case for the cancellation of the free patent
for the reversion of the property back to public dominion
contending that the conditions for the free patent and that the
property is a foreshore land which is property of public
dominion.
ISSUE: Whether or not the said property is of public
dominion.
RULING: Yes, the property is of public dominion. The
Supreme Court ruled that the said property is of public
dominion. Under Article 420 (1) of the Civil Code,
properties of public dominion are those that are 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. Considering that through
natural calamities that occurred, half of the property had now
become foreshore land as parts of the land had now been
permanently covered by the sea. Foreshore land had already
been established as property of public dominion.
Therefore, the title of the land should be reverted to property
of public dominion considering that it is foreshore land.
Morandarte & Ferbera v. Court of Appeals
G.R. No. 123586 | August 12, 2004
FACTS: A free patent was issued in the name of Morandarte
by the Bureau of Lands, Dipolog City. This parcel of land is
adjacent to the river. Suddenly, the river changed its course
and now occupies the property of Sps Morandarte. So, the
river now is considered a property of public dominion under
Article 420.
The Republic of the Philippines, represented by the Director
of Lands, filed a Complaint for Annulment of Title and
Reversion against the Morandarte spouses, the Register of
Deeds of Zamboanga del Norte, the Register of Deeds of
Dipolog City, and DBP.
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 PROPERTY
Notes and Digests
The Republic alleged that the BOL found that the subject
land includes a portion of the Miputak River which cannot
be validly awarded as it is outside the commerce of man and
beyond the authority of the BOL to dispose of. It claimed that
the Morandarte spouses deliberately and intentionally
concealed such fact in the application to ensure approval
thereof. Considering that the Morandarte spouses are guilty
of fraud and misrepresentation in the procurement of their
title, the Republic stressed that their title is void. Spouses
Morandarte alleged that inclusion of the Miputak River
should not render the title void; only the portion of the
property covered by the Miputak River should be nullified
but their title to the remaining portion should be maintained.
ISSUE: Whether or not the whole lot should be rendered
void and reverted to the public dominion. -No
RULING: Accordingly, only the portion traversed by the
Miputak River and the portion covered by the fishpond lease
agreement of the Lacaya spouses which were erroneously
included in Free Patent and Original Certificate of Title
should be reconveyed back to the State.
It is well-recognized that if a person obtains a title under the
Public Land Act which includes, by oversight, lands which
cannot be registered under the Torrens system, or when the
Director of Lands did not have jurisdiction over the same
because it is a public domain, the grantee does not, by virtue
of the said certificate of title alone, become the owner of the
land or property illegally included. Otherwise stated,
property of the public domain is incapable of registration and
its inclusion in a title nullifies that title.
The present controversy involves a portion of the public
domain that was merely erroneously included in the free
patent. A different rule would apply where fraud is
convincingly shown. The absence of clear evidence of fraud
will not invalidate the entire title of the Morandarte spouses.
In closing, we cannot but decry the carelessness of the BOL
in having issued the Free Patent in Morandarte's favor which
covered the Miputak River and the fishpond rights of Felipe
B. Lacaya. Surely, a more diligent search into their records
and thorough ocular inspection of Lot 7 would have revealed
the presence of the Miputak River traversing therein and an
existing fishpond right thereon. Had more vigilance been
exercised by the BOL, the government agency entrusted
specifically with the task of administering and disposing of
public lands, the present litigation could have been averted.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Villarico v. Sarmiento
G.R. No. 136438 | November 11, 2004
FACTS: Villaricos’ lot is separated from the Ninoy Aquino
Avenue (highway) by a strip of land belonging to the
government. As this highway was elevated by 4 meters and
therefore higher than the 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. Sarmiento had a building constructed on a portion
of said government land. In November that same year, a part
thereof was occupied by Andok’s Litson Corporation and
Marites’ Carinderia.
In 1993, by means of a Deed of Exchange of Real Property,
Villarico acquired a 74.30 square meter portion of the same
area owned by the government. The property (TCT 74430)
was registered in his name. He alleged inter alia that
Sarmiento’s 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. Sarmiento
claim 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.
ISSUE/S: Whether or not Villarico may claim right of way
over a property of public dominion (No) and whether
Villarico has rights over the building constructed by
Sarmiento (Yes).
RULING: Public use is "use that is not confined to
privileged individuals, but is open to the indefinite public."
Records show that the lot on which the stairways were built
is for the use of the people as passageway to the highway.
Consequently, it is a property of public dominion.
Property of public dominion is outside the commerce of man
and hence it:
(1) cannot be alienated or leased or otherwise be the subject
matter of contracts;
(2) cannot be acquired by prescription against the State;
(3) is not subject to attachment and execution; and
(4) cannot be burdened by any voluntary easement.
Considering that the lot on which the stairways were
constructed is a property of public dominion, it cannot be
burdened by a voluntary easement of right of way in favor of
Villarico. In fact, its use by the public is by mere tolerance
of the government through the DPWH. Villarico cannot
appropriate it for himself. Verily, he cannot claim any right
of possession over it.
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Notes and Digests
Finally on the second issue, the trial court and the Court of
Appeals found that Sarmiento’s buildings were constructed
on the portion of the same lot now covered by T.C.T. No.
74430 in Villarico’s name. Being its owner, he is entitled to
its possession.
Domalsin v. Valencia
G.R. No. 158687 | January 25, 2006
FACTS: A parcel of land located at sitio Riverside, Camp 3,
Tuba, Benguet. Domalsin claims to be the lawful owner and
possessor of said parcel of land since 1979 up to the present.
He allegedly introduced improvements consisting of
levelling, excavation, riprapping of the earth and a private
road to the river, fruit-bearing trees and other agricultural
plants of economic value. He was in continuous, adverse
possession and in the concept of an owner for the past
nineteen (19) years.
However, Spouses Valenciano constructed a house on the
subject land which prompted Domalsin to file a complaint
for Forcible Entry against Spouses Valenciano. Suyam
testified that Domalsin constructed a private road leading to
the Bued River from Kennon Road. He added that Domalsin
constructed two houses, the first was located along the road-
right-of-way of Kennon Road where Spouses Valenciano are
now constructing their house, while the second was located
below the private road around 40 to 60 meters down from
Kennon Road.
ISSUE: Whether or not the disputed parcel of land is a
property of the public dominion. -Yes
RULING: The disputed parcel of land is a property of public
dominion. It is clear that neither the Domalsin nor the
Valenciano can own nor possess the subject property the
same being part of the public dominion. Property of public
dominion is defined by Article 420 of the Civil Code as
follows:
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 other of similar character.
2. Those which belong to the State, without being for public
use, and are intended for some public service or for the
development of the national wealth.
Properties of public dominion are owned by the general
public. Public use is “use that is not confined to privileged
individuals, but is open to the indefinite public.” 3As the land
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
in controversy is a portion of Kennon Road which is for the
use of the people, there can be no dispute that the same is
part of public dominion. This being the case, the parties
cannot appropriate the land for themselves. Thus, they
cannot claim any right of possession over it. This is clear
from Article 530 of the Civil Code which provides:
ART. 530. Only things and rights which are susceptible of
being appropriated may be the object of possession.
Therefore, the disputed land as part of the property of public
dominion, cannot be appropriated either by Domalsin or
Spouses Valenciano.
MIAA v. CA & City of Paranaque
G.R. No. 155650 | July 20, 2006
FACTS: Manila International Airport Authority (MIAA)
operates the Ninoy Aquino International Airport (NAIA)
Complex in Parañaque City under Executive Order No. 903,
otherwise known as the Revised Charter of the Manila
International Airport Authority (MIAA Charter).
As operator of the international airport, MIAA administers
the land, improvements and equipment within the NAIA
Complex. The MIAA Charter transferred to MIAA
approximately 600 hectares of land, including the runways
and building.
The MIAA Charter further provides that no portion of the
land transferred to MIAA shall be disposed of through sale
or any other mode unless specifically approved by the
President of the Philippines. On 21 March 1997, the Office
of the Government Corporate Counsel (OGCC) issued
Opinion No. 061. The OGCC opined that the Local
Government Code of 1991 withdrew the exemption from
real estate tax granted to MIAA under Section 21 of the
MIAA Charter.
Thus, MIAA negotiated with the City of Parañaque to pay
the real estate tax imposed by the City. MIAA then paid some
of the real estate tax already due.
On 28 June 2001, MIAA received Final Notices of Real
Estate Tax Delinquency from the City of Parañaque for the
taxable years 1992 to 2001.
On 17 July 2001, the City of Parañaque, through its City
Treasurer, issued notices of levy and warrants of levy on the
Airport Lands and Buildings. The Mayor of the City of
Parañaque threatened to sell at public auction the Airport
Lands and Buildings should MIAA fail to pay the real estate
tax delinquency.
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 PROPERTY
Notes and Digests
MIAA admits that the MIAA Charter has placed the title to
the Airport Lands and Buildings in the name of MIAA.
However, MIAA points out that it cannot claim ownership
over these properties since the real owner of the Airport
Lands and Buildings is the Republic of the Philippines. The
MIAA Charter mandates MIAA to devote the Airport Lands
and Buildings for the benefit of the general public.
ISSUE: Whether or not the Airport Land and Buildings are
properties of public dominion and thus exempted from the
payment of real estate tax. -Yes
RULING: Airport Lands and Buildings are of Public
Dominion. The Airport Lands and Buildings of MIAA are
property of public dominion and therefore owned by the
State or the Republic of the Philippines. The Civil Code
provides:
ARTICLE 419. Property is either of public dominion or of
private ownership.
ARTICLE 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;
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 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. As
properties of public dominion, the Airport Lands and
Buildings are owned by the Republic and thus exempt from
real estate tax under Section 234(a) of the Local Government
Code.
Airport Lands and Buildings are Outside the Commerce of
Man. The Airport Lands and Buildings of MIAA are devoted
to public use and thus are properties of public dominion. As
properties of public dominion, the Airport Lands and
Buildings are outside the commerce of man. The Court has
ruled repeatedly that properties of public dominion are
outside the commerce of man. The Court has also ruled that
property of public dominion, being outside the commerce of
man, cannot be the subject of an auction sale. Any
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
encumbrance, levy on execution or auction sale of any
property of public dominion is void for being contrary to
public policy
PFDA v. CA
G.R. No. 150301 | October 2, 2007
FACTS: In this case, the Municipality of Navotas demanded
the payment of taxes from the Philippine Fisheries
Development Authority. After repeated demands, the
Philippine Fisheries Development still did not pay the taxes
demanded by the Municipality of Navotas. A notice was
given to the Philippine Fisheries Development Authority,
stating that the property would then be sold in a public
auction for the payment of taxes. The Philippine Fisheries
Development Authority contended that it cannot be sold nor
subject to the taxes claimed by the municipality because such
form part of property of public dominion.
ISSUE: Whether or not the property is of public dominion.
-Yes
RULING: Under Article 420 (1) of the Civil Code the
following are property of public dominion: 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;
Considering that the property was a port which was built by
the state, the same could not be sold through public auction
as under the Civil Code, properties constructed by the State
and those properties which are ports are considered as
property of public dominion.
PFDA v. CBAA
G.R. No. 178030 | December 15, 2010
FACTS: Lucena Fishing Port Complex is one of the projects
of the National Government, through the Philippine
Fisheries Development Authority. The Local Government
Unit of Lucena tried to collect property tax from Lucena
Fishing Port Complex. However, Lucena Fishing Port
Complex contended that they cannot be subject to real
property tax considering that the subject property was a
property of the government.
ISSUE: Whether or not the property is of public dominion.
-Yes
RULING: Under Article 420, properties which are of public
domain are those that are intended for public use such as
roads, canals, rivers, torrents, ports, and bridges constructed
by the State, banks, shores, roadsteads, and others of similar
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 PROPERTY
Notes and Digests
character. Considering that it is a port, such is considered as
property of public dominion.
MIAA v. City of Pasay
G.R. No. 163072 | April 2, 2009
FACTS: Manila International Airport Authority (MIAA)
operates and administers the Ninoy Aquino International
Airport (NAIA) Complex. Under Sections 3 and 22 of EO
903, approximately 600 hectares of land, including the
runways, the airport tower, and other airport buildings, were
transferred to MIAA. The NAIA Complex is located along
the border between Pasay City and Parañaque City.
On 24 August 2001, the City of Pasay issued notices of levy
and warrants of levy for the NAIA Pasay properties.
Thereafter, the City Mayor of Pasay threatened to sell at
public auction the NAIA Pasay properties if the delinquent
real property taxes remain unpaid.
On 29 October 2001, MIAA filed with the Court of Appeals
a petition to enjoin the City of Pasay from imposing real
property taxes on, levying against, and auctioning for public
sale the NAIA Pasay properties.
The Court of Appeals held that Sections 193 and 234 of
Republic Act No. 7160 or the Local Government Code,
which took effect on 1 January 1992, withdrew the
exemption from payment of real property taxes granted to
natural or juridical persons, including government-owned or
controlled corporations, except local water districts,
cooperatives duly registered under Republic Act No. 6938,
non-stock and non-profit hospitals and educational
institutions. Since MIAA is a government-owned
corporation, it follows that its tax exemption under Section
21 of EO 903 has been withdrawn upon the effectivity of the
Local Government Code.
ISSUE: Whether or not the NAIA Pasay Properties of MIAA
are property of public dominion. – Yes
RULING: 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; (2) Those which belong to the State, without being
for public use, and are intended for some public service or
for the development of the national wealth.
The term "ports x x x constructed by the State" includes
airports and seaports. The Airport Lands and Buildings of
MIAA are intended for public use, and at the very least
intended for public service. Whether intended for public use
or public service, the Airport Lands and Buildings are
properties of public dominion. As properties of public
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
dominion, the Airport Lands and Buildings are owned by the
Republic and thus exempt from real estate tax under Section
234(a) of the Local Government Code
Fernando v. Acuna
G.R. No. 161030 | September 14, 2011
FACTS: Fernando, et al. and Acuna et al. are common
descendants and compulsory heirs of the late spouses Jose A.
Fernando and Lucila Tinio, and the late spouses Antonia A.
Fernando and Felipe Galvez. The registered owners died
intestate and did not leave any instruction on the disposition
of the property.
There being no settlement as to the disposition of the
property, Fernando, et al. as heirs and successors-ininterest
of Jose Fernando one of the registered owners wanted the
subject property be partitioned into eight equal parts,
corresponding to the hereditary interest of each group of
heirs.
Acuna in his Complaint of Intervention claimed that the
portion of the property identified as Lot 1303 was already
adjudicated to Antonio Fernando, Spouses Martinez, and
Jose Fernando (the predecessor-in-interest of Fernando, et
al). Acuna also claimed that the portion identified as Lot
1302 was also already adjudicated to other people as well.
Norma Fernando affirmed that Fernando, et al. were only
claiming Lot 1303 and Sapang Bayan. She also testified that
Sapang Bayan was supposedly included in Lot 1302 and was
previously a river until it dried up. Unlike Lot 1302, the rest
of the property was purportedly not distributed.
ISSUE: Whether or not the Sapang Bayan is a property of
public dominion. -Yes.
RULING: The Sapang Bayan is a property of public
dominion. In fact from the transcripts of the proceedings, the
parties could not agree how Sapang Bayan came about.
Whether it was a gradual deposit received from the river
current or a dried-up creek bed connected to the main river
could not be ascertained.
Even assuming that Sapang Bayan was a dried-up creek bed,
under Article 420, paragraph 1 which included rivers a
property of public dominion, and Article 502, paragraph 1 of
the Civil Code which included rivers and their natural beds
part of the property of public dominion. In the absence of any
provision of law vesting ownership of the dried-up river bed
in some other person, it must continue to belong to the State.
Therefore, on the basis of the law and jurisprudence on the
matter, Sapang Bayan cannot be adjudged to any of the
parties in this case.
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Notes and Digests
Republic v. City pf Parañaque
G.R. No. 191109 | July 18, 2012
FACTS: The property involved in this case are several
portions of reclaimed foreshore and offshore areas of Manila
Bay, including those of Parañaque City made by the
Philippine Reclamation Authority (PRA).
The Controversy arose when then Parañaque City Treasurer
Liberato M. Carabeo (Carabeo) issued Warrants of Levy on
PRA’s reclaimed properties located in Parañaque City based
on the assessment for delinquent real property taxes.
PRA insists that, as an incorporated instrumentality of the
National Government, it is exempt from payment of real
property.
ISSUE: Whether or not the reclaimed lands are properties of
public dominion and thus exempted from the payment of
realty taxes. -Yes
RULING: The subject reclaimed lands are part of the public
domain, owned by the State and exempt from payment of
real estate taxes.
Article 420 of the Civil Code enumerates properties
belonging to the State:
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
2. Those which belong to the State, without being for
public use, and are intended for some public service
or for the development of the national wealth.
The subject lands are reclaimed lands, specifically portions
of the foreshore and offshore areas of Manila Bay. As such,
these lands remain public lands and form part of the public
domain.
Foreshore and submerged areas irrefutably belonged to the
public domain and were inalienable unless reclaimed,
classified as alienable lands open to disposition and further
declared no longer needed for public service.
The property is exempt from real property tax unless the
beneficial use thereof has been granted to a taxable person.
In this case, there is no proof that PRA granted the beneficial
use of the subject reclaimed lands to a taxable entity. There
is no showing on record either that PRA leased the subject
reclaimed properties to a private taxable entity.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Dream Village v. Bases Dev’t Authority
G.R. No. 192896 | July 24, 2013
FACTS: This case involves a large tract of land wherein
settlers in the said area had introduced improvements and
had been occupying the said area for more than thirty years.
They filed a case against the Bases Development Authority
alleging that they are causing summary demolition among
Dream Village Neighborhood Association members. They
contended that the land therein had already been abandoned
by the government and no longer property of public domain.
Moreover, they also contended that considering the period in
which they had occupied the land therein, they have validly
acquired the property by acquisitive prescription as the
property was declared to be for alienable and disposable.
The Bases Development Authority contend that the property
is of public dominion as such title is registered under the
name of the Republic of the Philippines from the cancelled
title of the United States over the property and that the same
was subject to several Presidential Proclamations and
Republic Act No. 7227.
ISSUE: Whether or not the said property is property of the
public domain. -Yes
RULING: Under Article 420 (2) it is stated that property of
public domain are those which belong to the State, without
being for public use, and are intended for some public service
or for the development of the national wealth. The Court
ruled that the property therein could be tied as property for
public service and for development of national wealth, as the
proceeds of the authorized sale of the lands would be for the
benefit of the Bases Conversion Development Authority,
such lands still remain as lands of public domain even if such
is considered to be alienable and disposable. The same can
only become private property after sale to a private person or
entity as authorized by the BCDA law.
Moreover, as to the claim of acquisitive prescription, the
Court ruled that while property of the State or any of its
subdivisions patrimonial in character may be the object of
prescription, those "intended for some public service or for
the development of the national wealth" are considered
property of public dominion and therefore not susceptible to
acquisition by prescription. In order for property of public
dominion to be susceptible of acquisitive prescription, the
Court ruled that there must be an express declaration that the
property is alienable and disposable and that the property is
patrimonial and no longer intended for public service or
development of national wealth.
As to the abandonment by the government, the Court ruled
that there was none. The mere deviation from the
construction of a road in the property does not signify
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 PROPERTY
Notes and Digests
abandonment as to consider the property as alienable and
disposable, as well as, no longer intended for public service
or development of national wealth.
MCIAA v. CA & City of Lapu-lapu
G.R. No. 181756 | June 15, 2015
FACTS: This case stems from a previous decision made by
the Supreme Court which removed the exemption from taxes
of Mactan-Cebu International Airport Authority. This
decision prompted the City of Lapu-Lapu to demand the
payment of real estate taxes from the Mactan-Cebu
International Airport Authority. Mactan-Cebu International
Airport then contended that they could not be held liable for
the properties therein as such was not owned by them but, it
was owned by the State as such was property of public
dominion
ISSUE: Whether or not the said property was of public
dominion. -Yes
RULING: The property is of public dominion. Under
Article 420 (1) of the Civil Code it is stated that, properties
which are of public dominion those that are 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.
Considering that the international airport is considered as a
port and that such property was also constructed by the State,
the same is considered as a property of public dominion.
Therefore, the contention of Mactan-Cebu International
Airport is correct and that the contended property is actually
the property of the state.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Article 421. All other property of the State, which is not of
the character stated in the preceding article, is patrimonial
property.
Article 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.
DISCUSSION:
Q: What is Patrimonial Property?
A: It is property owned by the State in its Private Capacity. It is
property which is not devoted to public use, public service, or
for the development of national wealth.
Examples of Patrimonial Property:
1. Friar Lands.
2. Properties owned by the State in escheat proceedings.
3. Those inherited or donated to the Government.
4. Rents of buildings owned by the State.
Note:
Patrimonial Properties may be acquired by private individuals
or corporations through prescription as provided for by Article
1113 of the Civil Code.
Q: How does conversion from property of public dominion
to patrimonial property effect?
A: When no longer intended or operated for public use or public
service, a property of public dominion shall form part of the
State’s patrimonial property as of the date the Government,
through the Executive or Legislative Departments, has formally
declared that it is no longer needed for said purposes
Article 423. The property of provinces, cities, and
municipalities is divided into property for public use and
patrimonial property.
DSICUSSION:
Properties of Political Subdivisions:
1. Properties for public use; and
2. Patrimonial properties
Properties of a political subdivision for public use cannot be
alienated as such, and may not be acquired by prescription.
However, properties of a political subdivision which are
patrimonial in character may be alienated, and may be acquired
through prescription.
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 PROPERTY
Notes and Digests
Note:
In case there is donation by the National Government to a
Political Subdivision of its patrimonial property, the donated
property becomes either property for public use or patrimonial
property, depending on the use given to the property.
Article 424. Property for public use, in the provinces, cities,
and municipalities, consist 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.
DISCUSSION:
It can also be said that properties of provinces, cities, and
municipalities may also be classified into the following:
1. Those acquired with their own funds (in their private
or corporate capacity), here the political subdivision
has ownership and control.
2. Those which does not fall under the classification
above, wherein these are subject to the control and
supervision of the State. In fact they are held by the
political subdivision in trust for the State for the
benefit of the inhabitants.
Properties for public use may not be leased to private
individuals. If possession has already given, the lessee must
return the possession to the municipality, which in turn must
reimburse him for whatever advanced rentals had been given.
National Properties May not be Registered by a
Municipality Under its own name.
Properties of public dominion, owned by the national
government, even if planted upon with trees by a municipality
for a number of years, do not become municipal properties, and
may not therefore be registered by a municipality under its
name.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Article 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.
DISCUSSION:
Collective Ownership
“Collectively” refers to ownership by private individuals as co-
owners or by corporations, partnerships or other juridical
persons such as foundations who are allowed by the Civil Code
to possess and quire properties.
Presumption of private ownership
Possession by private persons since time immemorial carries
the presumption that the land had never been part of the public
domain, or that it had been private property even before the
Spanish Conquest.
Ownership Evidenced by a Torrens Title
If there is any error in the Torrens title of a person in the sense
that it includes lands belonging to the government, it is only the
government which can properly question that fact, and a judicial
pronouncement is necessary in order to have the portion
excluded from the Torrens Title.
Acquisition by Aliens
An alien has had no right to acquire since the date of effectivity
of the Philippine Constitution, any public or private
agricultural, commercial, or residential lands except in cases of
hereditary succession.
The same rule applies to a foreign corporation, even it be a
religious and non-stock foreign corporation.
Q: What is the effect of a subsequent sale by the disqualified
alien vendee to a qualified Filipino Citizen?
A: If land is invalidly transferred to an alien who subsequently
becomes a citizen or transfers it to a citizen, the flaw in the
original transaction is considered cured and the title of the
transferee is rendered valid.
Thus, the subsequent transfer of the property to qualified
Filipinos may no longer be impugned on the basis of invalidity
of the initial transfer. The objective of the constitutional
provision to keep our lands in Filipino hands has been achieved
Q: What should an applicant establish to prove that the land
subject of an application for registration is alienable?
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 PROPERTY
Notes and Digests
A: An applicant must establish the existence of a positive act of
the government such as a presidential proclamation or an
executive order, an administrative action, investigative reports
of the Bureau of Lands investigator, and a legislative act or
statute.
The applicant may also secure a certification from the
government that the lands applied for are alienable and
disposable.
For confirmation of imperfect title, applicants must prove the
following:
1. That the land forms part of the alienable and
disposable agricultural lands of the public domain; and
2. That they have been in open, continuous, exclusive,
and notorious possession and occupation of the same
under a bona fide claim of ownership either since time
immemorial or since June 12, 1945.
OWNERSHIP IN GENERAL
Article 427. Ownership may be exercised over things or
rights.
DISCUSSION:
“Ownership” Defined
Ownership is the independent and general right of a person to
control a thing particularly in his possession, enjoyment,
disposition, and recovery, subject to no restrictions except those
imposed by the State or private persons, without prejudice to
the provisions of law.
Kinds of Ownership
1. Full ownership (dominium or jus in re propria) – This
includes all the rights of an owner.
2. Naked ownership (nuda proprietas) – This is
ownership where the right to the use and the fruits has
been denied.

Article 426. Whenever by provision of the law, or an 3.
individual declaration, the expression "immovable things or
property," or "movable things or property," is used, it shall
be deemed to include, respectively, the things enumerated in 4.
Chapter 1 and Chapter 2.
Sole ownership – Where ownership is vested only in
one person.
Co-ownership (or tenancy in common) – When the
ownership is vested in two or more owners.

Whenever the word "muebles," or "furniture," is used alone,

it shall not be deemed to include money, credits, commercial Note:
securities, stocks and bonds, jewelry, scientific or artistic Questions relating to ownership or even to the validity or
collections, books, medals, arms, clothing, horses or discharge of a mortgage should generally be ventilated in an
carriages and their accessories, grains, liquids and ordinary civil action or proceeding, and NOT under the
merchandise, or other things which do not have as their proceedings provided in the Land Registration Act, inasmuch
principal object the furnishing or ornamenting of a building, as the latter proceedings are summary in nature, and more or
except where from the context of the law, or the individual less inadequate.
declaration, the contrary clearly appears.
**Article 428. The owner has the right to enjoy and dispose
“Muebles” Or “Furniture” When Used Alone; Effects. of a thing, without other limitations than those established by
If used alone in a contract or agreement, it will not include law.
things found therein like money, jewelry, collections, books,
medals, arms, clothing, etc., which do not have as their principal The owner has also a right of action against the holder and
purpose the furnishing or the ornamenting of the building where possessor of the thing in order to recover it.
the “muebles” or “furniture” is found
DISCUSSION:
Illustration: Under Article 428, the owner has the:
Q: A told B, “I’ll give you my furniture.” Does this include 1. Right to Enjoy
books and bookcases? 2. Right to Dispose
3. Right to Recover or Vindicate
A: As provided under the 2nd paragraph of Article 426, The
Books, no. But the Bookcases, yes. The right to enjoy includes:
1. The right to possess
2. The right to use
3. The right to the fruits
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ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
 PROPERTY
Notes and Digests
The right to dispose includes:
1. The right to consume or destroy or abuse.
2. The right to encumber or alienate.
Rights of an Owner under Roman Law
Jus Possidendi (the right to possess) – The right to possess
means the right to hold a thing or to enjoy a right. In either case,
it means that the thing or right is subject to the control of my
will.
Jus Utendi (the right to use) – The right to use includes the right
to exclude any person, as a rule, from the enjoyment and
disposal thereof.
For this purpose, the owner-possessor may use such force as
may be reasonably necessary to repel or prevent an actual or
threatened unlawful physical invasion or usurpation of the
property (Article 429 CC). Upon the other hand, the owner of a
thing cannot make use thereof in such a manner as to injure the
rights of a third person (Article 431 CC). Otherwise, he may be
held liable for damages, and if his property is a nuisance, it may
be even be destroyed.
Jus Fruendi (right to the fruits) – The right to the fruits includes
the right to three kinds of fruits, Natural, Industrial, Civil. An
example of Civil Fruits are rents from buildings.
Note that jurisprudence would provide that only owners, and
not mortgagees, can claim damages for injury to the fruits of a
piece of land and for injury caused by the deprivation of
possession since the recovery of these damages is an attribute
of ownership.
Jus Abutendi (the right to abuse) – The right to abuse and the
right to consume. Example: A person can burn his own house if
it is located in an isolated place but not where the burning would
endanger the properties of others.
Jus Dispodendi (the right to dispose) – The right to dispose
includes the right to donate, to sell, to pledge, or mortgage. Note
however, a seller need not be the owner at the time of perfection
of the contract of sale. It is sufficient that he be the owner at the
time of delivery (Article 1459 CC)
Jus Vindicandi (the right to recover) – The right to recover is
given expressly under Article 428 which provides that the
owner has also a right of action against the holder and possessor
of the thing in order to recover it.
Jus Accesionis (the right to accessories).
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Q: What are actions to recover property?**
A: In the recovery of Personal Property, the proper action is
replevin, governed by Rule 60 of the Rules of Court.
In the recovery of Real Property, there are three usual actions
to recover the possession of real property.
1. Forcible Entry or Unlawful Detainer – either action
was formerly referred to as an accion interdictal.
2. Accion Publiciana – or the plenary action to recover
the better right of possession.
3. Accion Reivindicatoria – or reivindicatory action
Additionally, we can also make use in certain cases, writs such
as:
1. The writ of preliminary mandatory injunction; and
2. The writ of possession.
Replevin
Replevin is defined as an action or provisional remedy where
the complainant prays for the recovery of the possession of
personal property.
Process:
At the commencement of the action, or at any time before the
other party answers, the applicant may apply for an order of the
delivery of such property to him.
When he applies for the order, he must show by his own
affidavit or that of some other person who personally knows of
the facts:
1. That the applicant is the owner of the property
claimed, particularly describing it, or is entitled to the
possession thereof.
2. That the property is wrongfully detained by the
adverse party, alleging the cause of detention thereof
according to his best knowledge information and
belief.
3. That it has not been distrained or taken for a tax
assessment or fine pursuant to law or seized under a
writ of execution or preliminary attachment or
otherwise placed under custodia legis or if so seized.
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Notes and Digests
The applicant must also give a bond, executed to the adverse
party in double the value of the property as stated in the affidavit
aforementioned.
The court then orders the sheriff to take such property into his
custody. If the property or any part thereof be concealed in a
building or enclosure, and not delivered upon demand, the
sheriff must cause the building or enclosure to be broken open.
Forcible Entry
Forcible entry is a summary action to recover material or
physical possession real property when a person originally in
possession was deprived thereof by Force, Intimidation,
Strategy, Threat, or Stealth (FISTS).
The action must be brought within one year from the
dispossession. However, in strategy or stealth, it would seem
that the better rule would be to count the period of one year from
the time of discovery of such strategy or stealth.
Note:
The issue involved in an action for forcible entry is mere
physical possession and not juridical possession.
The facts to be stated in the complaint for forcible entry must
allege that one in physical possession of a land or building has
been deprived of said possession by another through (FISTS).
Plaintiff must prove that he was in prior physical possession of
the premises until he was deprived thereof by the defendant.
Unlawful Detainer
Unlawful detainer is the action that must be brought when
possession by a landlord, vendor, vendee or other person of any
land or building is being unlawfully withheld after the
expiration or termination of the right to hold possession, by
virtue of any contract, express or implied. In such a case, prior
physical possession is not required.
Note that to make out a case of unlawful detainer, the complaint
must show that the withholding of possession or refusal to
vacate is unlawful. This, where the complaint shows prior
possession by the defendant, but does not allege that the right
of possession had terminated and that occupancy was being
unlawfully withheld from the plaintiff, there is no case of
unlawful detainer.
A person or squatter who occupies the land of another at the
latter’s tolerance or permission without any contract between
them, is necessarily bound by an implied promise that he will
vacate upon demand, failing which, a summary action for
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
ejectment or unlawful detainer is the proper remedy against
him.
The action must be brought within one year from the time
possession becomes unlawful, thus:
1. If there is a fixed period for the termination of the
lease, the lease ends automatically without need of any
demand; hence, the one-year period begins from the
expiration of the lease.
2. Of the reason for ejectment is non payment of rent or
the non-fulfillment of the conditions of the lease, then
the one year period must be counted from the date of
demand to vacate.
Note that the demand to vacate must be absolute, not
conditional. Moreover, the complaint must state when the
demand was made, and the fact that such demand had been
served personally, or by serving a written notice or posting such
notice.
The demand must be made at least 5 days if the property is a
building or 15 days if the property is land, before the action is
brought.
If several demands had been made, the period of one year must
be counted 5 days or 15 days as the case may be from the time
of the latest demand, unless in the meantime an accion
publiciana has been brought.
Accion Publiciana
Accion Publiciana is intended for the recovery of the better right
to possess, and is a plenary action in ordinary civil proceedings.
It must be brought within a period of 10 years, otherwise, the
real right of possession is lost. Note that the issue in this action
is not possession de facto but possession de jure.
Possession de facto vs. Possession de jure
De facto Possession
It is a Latin word meaning ‘in fact’. De facto possession means
the possession which exists in reality even if it is not legally
recognized.
De Jure Possession
De jure is a Latin word meaning “in law”; lawful, legitimate or
a matter of law. De jure possessions are legally recognized
possessions regardless of whether it exists in reality or not. It
is also known as juridical possession meaning possession in the
eyes of law.
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Notes and Digests
There are two kinds of Accion Publiciana:
1. One where the entry was not obtained through FISTS.
This can be brought as soon as the dispossession takes
place, without waiting for the lapse of one year.
Failure to state that the deprivation was caused by
FISTS would make the action not one of forcible entry
but accion publiciana.
2. One where the 1-year period for bringing forcible
entry or unlawful detainer has already expired.
Here after the lapse of the 1-year prescription period,
the action may still be brought after the one year period
as an accion publiciana
Accion Reivindicatoria
Accion reivindicatyoria or reivindicatory action is defined as an
action to recover ownership over real property. The action must
be brought in the RTC where the real estate is situated.
In the reivindicatroy action, the issue involved is ownership,
and for this purpose, evidence of title or mode may be
introduced. On this point of ownership the action differs from
accion publiciana where the issue is the better right of
possession (possession de jure) and from forcible entry or
unlawful detainer where the issue is material possession
(possession de facto).
All three actions however though involving real property, ar
actins in personam, and are therefor binding only upon the
parties and privies thereto.
Other remedies
Writ of Injunction
A person deprived of his possession of real or personal property
is ordinarily not allowed to avail himself of the remedy of
preliminary preventive or prohibitory injunction, the reason
being that the defendant in actual possession is presumed
disputably to have a better right.
However, under the Civil Code, under certain conditions, and
in view of the frequent delays in cases of this nature, the remedy
of the writ of preliminary mandatory injunction may be availed
of in the original case of forcible entry and during appeal in a
case of unlawful detainer.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Writ of possession
A writ of possession used in connection with the Land
Registration Law is a n order directing the sheriff to place a
successful registrant under the Torrens system in possession of
the property covered by a decree of the Court.
It may be issued only against the person defeated in the
registration case, and against anyone unlawfully and adversely
occupying the land or any portion thereof, during the
proceedings, up to the issuance of the final decree.
Limitations on Ownership
The right of ownership is not absolute. There are limitations
which are imposed for the benefit of humanity, and which are
based on certain legal maxims. To summarize, these are:
1. Limitations given by the State – such as police power,
power of taxation and power of eminent domain.
2. Limitations imposed by Law – such as the legal
easement of waters, the legal easement of right of way.
3. Limitations imposed by the Owner – when the owner
leases his property to another, said owner in the
meantime cannot physically occupy the premises;
when the owner pledges his personal property, he has
in the meantime to surrender its possession.
4. Limitations imposed on the Grantor – The donor may
prohibit the donees from partitioning the property for
a period no exceeding 20 years.
**Article 429. The owner or lawful possessor of a thing has
the right to exclude any person from the enjoyment and
disposal thereof. For this purpose, he may use such force as
may be reasonably necessary to repel or prevent an actual or
threatened unlawful physical invasion or usurpation of his
property.
DISCUSSION:
This Article speaks of the Principle of Self-Help. This principle
authorizes an owner or lawful possessor of a property to use
reasonable force to prevent or repel an actual or threatened
unlawful physical invasion or usurpation of property.
Note that there must be no delay in the pursuit, otherwise his
recourse will be to go to the court for the recovery of property.
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Notes and Digests
Requisites of the Principle of Self-Help (DORA)
1. There is no Delay
2. Such force is used by the Owner or lawful possessor
3. Reasonable Force is used
4. There is Actual or threatened physical invasion or
usurpation of the property
Q: Can a third person exercise the right to self help?
A: Yes. A third person who is not a possessor may repel
unlawful possession on the property owned by another. In such
an event, he is acting as a negotorium gestor and the owner must
indemnify him for injuries sustained.
Q: What is a Negotorium Gestor?
A: Negotiorum gestio is the voluntary administration of the
property, business or affairs of another, without his consent or
authority, that creates an obligation for reimbursement for the
necessary expenses the gestor had spent.
Note:
The reasonableness of the defensive acts resorted to by a
possessor is determined not by what he imagined to exist but by
the objective situation.
Article 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.
Article 431. The owner of a thing cannot make use thereof
in such manner as to injure the rights of a third person
Self-Explanatory
**Article 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.
DISCUSSION:
This Article refers to a state of necessity as distinguished from
the principle of self-help enunciated in Article 429 of the CC.
This principle authorized the destruction of property which is
lesser in value to avert the danger poised to another property of
greater value
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Requisites of the principle under Criminal Law:
1. That the evil sought to be avoided actually exists.
2. That the injury feared be greater than that done to
avoid it.
3. That there be no other practical and less harmful means
of preventing it.
Article 433. Actual possession under claim of ownership
raises disputable presumption of ownership. The true owner
must resort to judicial process for the recovery of the
property.
**Article 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
DISCUSSION:
Requisites to prove claim of ownership
1. Proper identification of the property; and
2. Title must be clear, strong and credible
These requisites are based on the doctrines enunciated by the
Supreme Court. These requisites in turn are based on the
proposition that 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 the fact.
As to the 1st requisite:
The boundaries of the land sought must be proved, so that if a
person fails to specify which portion of a parcel of land is the
portion he is supposed to have inherited, his action to recover
the property will necessarily fail.
The claimant must prove in an unquestionable manner his
ownership and identity of the property claimed. The description
should be so definite that an officer of the court might go to the
locality where the land is situated and definitely locate it.
As to the 2nd requisite:
If the claims of both the plaintiff and the defendant are weak,
judgment must be for the defendant, for the latter, being in
possession is presumed to be the owner, and cannot be obliged
to show or prove a better title.
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Notes and Digests
Article 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.
DISCUSSION:
This Article talks about the inherent power of Eminent Domain.
It is the superior right of the State to own certain properties
under certain conditions. It is a limitation on the right of
ownership, and may be exercised even over private properties
of cities and municipalities, and even over lands registered with
a torrens title.
Simply said, eminent domain is the right of the State to acquire
private property for public use upon payment of just
compensation.
Essential Requisites of Eminent Domain:
1. Taking by competent authority
2. Observance of due process of law
3. Taking for public use
4. Payment of just compensation
Due Process of Law
Under the Constitution, no person may be deprived of property
without due process of law. In other words, there must be proper
expropriation proceedings. Such proceedings include:
1. Notice to the owner of the property
2. A full opportunity to present his side on whether or not
the purpose of the taking is public or whether or not
the government reasonably needs the property; and
3. Such other procedural requisites as may be prescribed
under the law.
Note:
Whenever an entity is granted the right to expropriate, the grant
must be strictly construed and when the right is sought to
expropriate private property that is not really needed, the right
should be denied.
Public Use
The question as to whether or not any specific or particular use
is a public one is ultimately a judicial question. The character
of the entity or agency employed is not a sufficient basis to
conclude the presence of public use.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
If Congress has specifically allowed expropriation of realty for
a designated or specified public purpose, the courts of justice
are not allowed to inquire into the necessity of such purpose.
If however, the grant has been merely a general one, the courts
of justice have jurisdiction to decide whether the taking is
indeed for a public use. In such case, the issue is a question of
fact, and the court should inquire into and hear proof upon the
question.
Note:
Absolute necessity for expropriation is not required. All that is
needed is a reasonable necessity for the public use intended.
Payment of Just Compensation
In eminent domain proceedings, just compensation means a fair
and full equivalent value of the loss sustained.
It must be just not only to the individual whose property is
taken, but also to the public which is to pay for it. To calculate
the amount of compensation it is Market Value of the property
PLUS Consequential Damages MINUS the Consequential
Benefits.
Several factors must also considered such as but not limited to:
1. Acquisition cost
2. Current market value of like properties
3. Tax value of the condemned property
4. The size, shape, and location of the property.
Article 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 condemnation
or seizure is unjustified.
DISCUSSION:
This article is based on the Police Power of the State, which in
turn is based on the maxim that the welfare of the people is the
supreme law of the land, Salus Populi Est Suprema Lex.
Unlike eminent domain which requires the giving of just
compensation, police power needs no giving of a financial
return before it can be exercised. This is therefore one instance
when property may be seized or condemned by the government
without any financial compensation.
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Notes and Digests
Police power can refer not merely to condemnation and seizure,
but also to total destruction itself, provided that:
1. Public interest is served
2. The means used are not unduly harsh, abusive, or
oppressive.
Note:
When the government exercises police power and issues police
regulations, the person concerned is not deprived of property
without due process of law, provided that the requisites of the
law are followed.
**Article 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 detriment to servitudes
and subject to special laws and ordinances. He cannot
complain of the reasonable requirements of aerial
navigation.
DISCUSSION:
This article deals with the extend of ownership which a person
has over a parcel of land, with what is commonly referred to as
“Surface Right”.
Thus if a person owns a piece of land, it is understood that he
also owns its surface, up to the boundaries of the land, with the
right to make thereon allowable constructions, plantings, and
excavations subject to:
1. Servitudes or easements
2. Special Laws
3. Ordinances
4. Reasonable requirements of aerial navigation
5. Principles on Human Relations provided under Article
19 and 431 of the CC. (Example: Unnecessary
obstruction of the light and view of the neighbor)
Article 438. Hidden treasure belongs to the owner of the
land, building, or other property on which it is found.
Nevertheless, when the discovery is made on the property of
another, or of the State or any of its subdivisions, and by
chance, one-half thereof shall be allowed to the finder. If the
finder is a trespasser, he shall not be entitled to any share of
the treasure.
If the things found be of interest to science or the arts, the
State may acquire them at their just price, which shall be
divided in conformity with the rule stated.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
DISCUSSION:
Where Hidden Treasures may be found:
1. Land
2. Building
3. Other property
If found on One’s own property
If he alone finds the property, he alone owns the treasure. If he
is married, the treasure belongs to the conjugal partnership.
If found on another’s property
For the finder to be entitled to ½ , the discovery on another’s
property must be by chance. This means there must be no
purpose or intent to look for the treasure
Q: What if the person asks for permission from the land
owner?
A: Although there are conflicting opinions, it is believed that
the treasure should be divided equally between the finder and
the owner even if the finding was the result of a deliberate hunt
for the treasure.
Q: What if the Hidden Treasure is found on land that a
usufruct is using?
A: Since the usufruct is considered to be a stranger, if the owner
of the land finds it in his own land, then the usufruct will not be
given a share. But if he is the finder of the treasure, he is entitled
½ of it.
If found under Government Property
Half of the treasure will be granted to the finder and the other
half to the municipality. However, if the hidden treasure is
scientifically or artistically valuable, the finders half has to be
given to the municipality or state, who in turn will give him a
just price therefor.
Rule on treasure hunts
A treasure hunt is an express search for hidden treasure. Should
discovery be made, the actual finders will not necessarily be
entitled to half. Instead, they will be given what has been
stipulated in the contract.
Article 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.
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Notes and Digests
Note: If ownership of the treasure is known but the owner is
already dead, the same will not be considered as hidden treasure
and must therefore go to the owner’s rightful heirs.
RIGHT OF ACCESSION
**Article 440. 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.
Note:
Accession is not one of the modes enumerated under Article
712 of the CC. It is therefore safe to conclude that accession is
not a mode of acquiring ownership
The reason for this is that Accession presupposes a previously
existing ownership by the owner over the principal.
Fundamentally, accession is a right implicitly included in
ownership, without which it will have no basis or existence.

DISCUSSION: The right to Accession is generally automatic, requiring no prior

Accession is defined as the right of a property owner to act on the part of the owner or of the principal.
everything which is:
Article 441. To the owner belongs:
1. Produced thereby; or
2. Which is incorporated or attached thereto, either (1) The natural fruits;
naturally or artificially.
(2) The industrial fruits;
Note:
The word “artificially” is understood as the improvements made (3) The civil fruits.
on the property.
Article 442. Natural fruits are the spontaneous products of
Classification of Accession: the soil, and the young and other products of animals.

Industrial fruits are those produced by lands of any kind

Accession to the Fruits
through cultivation or labor.
1. Natural Fruits
2. Industrial Fruits Civil fruits are the rents of buildings, the price of leases of
3. Civil Fruits lands and other property and the amount of perpetual or life
annuities or other similar income.
Accession to the Attachment or Incorporation
1. With reference to real property DISCUSSION:
a. Accession Industrial 1. Natural Fruits – Human labor does not intervene. Ex.
i. Building Weeds; Cow’s Milk; Sheep’s Wool
ii. Planting 2. Industrial Fruits – Ex. Herbs; Sugarcane; Palay;
iii. Sowing Apples
b. Accession Natural 3. Civil Fruits – Ex. Rent
i. Alluvium
ii. Avulsion
Note:
iii. Change of course of rivers
If you are a stockholder of a corporation, the cash dividends are
iv. Formation of Islands
considered as income. Cash dividends are considered as fruits
because it was produced from the stocks. It is a civil fruit.
2. With respect to personal property
a. Adjunction or conjunction
Instances when owner of the land does not own the fruits:
i. Inclusion (engraftment)
ii. Soldadura (attachment) 1. If the possessor is in good faith of the land. (Article
iii. Tejido (weaving) 544 par. 1 CC)
iv. Pintura (painting) 2. Usufructuary. (Article 566 CC)
v. Escritura (writing) 3. Lessee (gets the fruits of the land but the owner of the
b. Mixture land gets the civil fruits; Article 1654 CC)
c. specification 4. Contract of Antichresis (Article 2132 CC)

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ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
 PROPERTY
Notes and Digests
**Article 443. He who receives the fruits has the obligation
to pay the expenses made by a third person in their
production, gathering, and preservation.
DISCUSSION:
There are two characters in this provision - the owner of the
land and the third person.
Meaning of a third person
A third person as referenced by this article is one who is not the
owner or the builder, planter or sower in good faith.
Note that Article 443 does not apply when the planter is in good
faith, because in this case, he is already entitled to the fruits
already received, hence, there is no necessity of reimbursing
him. (Article 544 CC)
Illustration:
The Planter/Sower planted something on the land of X in bad
faith. By principle of accession, X owns the gathered fruits.
However, accession is not a way of acquiring something for
free. X has to reimburse Planter/Sower for the necessary
expenses for the production, gathering, and preservation
BAR QUESTION:
Q: What is the obligation of the owner who receives the fruit
from a third person?
A: Article 443 in toto
Article 444. Only such as are manifest or born are
considered as natural or industrial fruits.
With respect to animals, it is sufficient that they are in the
womb of the mother, although unborn.
DISCUSSION:
Existence of the fruit
It depends on the type of fruit:
1. Annual (must be planted every year/must re-plant after
harvest; rice, wheat, corn) – deemed manifest the
moment their seedlings appear; and
2. Perennial (only planted once and bear fruit for several
seasons; mango and coconut trees) – deemed to exist
only when they actually appear.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Young Animals
They are considered existing even if still in the maternal womb.
They should be considered existing only at the commencement
of the maximum ordinary period for gestation.
Pratus sequitor ventrem (offspring follows the mother)
This legal maxim means that the offspring follows the mother.
The legal presumption, in the absence of proof to the contrary,
is that the calf, as well as its mother belongs to the owner of the
latter, by the right of accretion (US v. Caballero, G.R. No. 8608,
September 26, 1913).
Thus, when the ownership over the offspring of the animal
when the male and female belongs to different owners, the
owner of the female was considered also the owner of the
young, unless there is a contrary custom or speculation.
RIGHT OF ACCESSION WITH RESPECT TO
IMMOVABLE PROPERTY
Article 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.
DISCUSSION:
Legal Maxim: Aedificatum solo, solo cedit – The land is the
principal, and whatever is built on it becomes the accessory.
Article 445 deals with Accession to Attachment or
Incorporation, more specifically to accession industrial which
involves BUILDING, PLANTING, SOWING (BPS).
Article 445 talks about the general rule that if anything is on the
land of another, whether it’s an improvement, a tree or a plant,
such belongs to the owner of the land.
Q: How do you distinguish “planting” from “sowing”?
A:
Planting Sowing
Perennial crops Annual crops
Gives rise to a permanent Each deposit of seed fives
plant which in turn produces rise merely to a single crop
the fruit. or harvest.
Without replanting Regular planting or sowing
has to be made
It is important to know the distinctions between the two because
their treatments in the succeeding provisions are different.
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Notes and Digests
Article 446. All works, sowing, and planting are presumed Summary:
made by the owner and at his expense, unless the contrary is RIGHTS AND OBLIGATIONS OF THE
proved. LANDOWNER
Landowner in Good Faith Landowner in Bad Faith
DISCUSSION: He becomes the owner of the He becomes the owner of the
Article 446 presents two disputable presumptions: materials but he must pay for materials but he must pay
their value. The only their value and damages.
exception is when they can
1. The works, sowing, and planting were made by the
be removed without The exception is when the
owner; and destruction to the work made owner of the materials
or to the plants. In such case, decides to remove them
2. They were made at the owners expense. the owner of the materials whether or not destruction
can remove them would be caused. In this
Article 446 presumes that all those works, plantings, or sowings case, the materials would
were made by the owner and at his expense. So that is different still belong to the owner of
from “belonging to the owner” under Article 445. the materials, who in
addition will still be entitled
Article 446 answers the questions on who planted? Who built damages.
the improvements? Who sowed the crops? RIGHTS AND OBLIGATIONS OF THE OWNER OF
THE MATERIALS
Landowner in Good Faith Landowner in Bad Faith
The characters under this article are:
1. The owner of the 1. The owner of the
1. The land owner
materials is entitled materials is entitled
2. The Builder, Planter, Sower (BPS) to reimbursement to the absolute right
provided that he of removal and
Note: does not remove damages whether
These presumptions under Article 446 are rebuttable. The them. or not substantial
usefulness of the presumption lies in the fact that the owner of injury is caused.
the land does not have to prove anymore that the buildings, 2. He is entitled to the
plants, trees and crops are made at the owner’s expense since removal of the 2. He is entitled to
materials provided reimbursement and
the presumption operates in the favor of the owner. Whoever
no substantial damages in the case
alleges the contrary should prove his contention.
injury is caused. he chooses not to
remove the
**Article 447. The owner of the land who makes thereon, materials.
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
Q: What if the landowner wants to return the materials
reparation of damages. The owner of the materials shall have
the right to remove them only in case he can do so without used instead of reimbursing their value, may this be done
injury to the work constructed, or without the plantings, even without the consent of the original owner of the
constructions or works being destroyed. However, if the materials?
landowner acted in bad faith, the owner of the materials may
remove them in any event, with a right to be indemnified for A: It depends, If no damage has been made to the materials or
damages. they have not been transformed as a result of the construction,
they may be returned at the owner’s expense.
DISCUSSION:
This Article treats of the rights and obligations of: If damage has been made or there has been a transformation,
1. The owner of the land who uses the materials of they cannot be returned anymore.
another to build, plant or sow.
2. The owner of the materials. Q: What is the rule when both parties are in bad faith?

Note: A: If both parties are in bad faith, then consider them both in
The above enumeration are also the characters in this Article. good faith.

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COLLEGE OF LAW
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Notes and Digests
Q: What if the owner of the materials is in bad faith?
A: The landowner would not only be exempted from
reimbursement, but would also be entitled to consequential
damages. Such as in cases when the materials are of an inferior
quality.
Note:
Good faith is always is always presumed, and upon him who
alleges bad faith rests the burden of proof.
**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 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.
DISCUSSION:
Article 448 applies only when the Builder, Planter, Sower
believes that he has the right to Build, Plant or Sow because he
think he owns the land or believes himself to have a claim of
title.
On part of the owner of the land, he has the following options:
1. To appropriate for himself the house upon payment of
the proper indemnity; or
2. To compel the builder to buy the land upon which the
house or structure has been built, unless the value of
the land be considerably more than the value of the
house. In the latter case, rent should be paid.
Note:
The landowner has the option to appropriate or to compulsorily
sell the land. He has no right of removal or demolition,
UNLESS, as provided in the case of Ignacio v. Hilario, after
having selected a compulsory sale, the builder fails to pay for
the land. Only then may the landowner compel the removal or
demolition of the constructed building or structure.
It is the owner of the land who has the choice or option, not the
builder. Hence the builder cannot compel the owner of the land
to sell such land to him.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
If in any case an option is impractical to the landowner, it is
important to note that the option is not absolute. He may choose
either the 1st or the 2nd option depending on practicality.
If the option to appropriate the building is impractical, the
landowner may opt for the 2nd option for compulsory selling. If
the builder is unwilling to buy the portion of the land, then he
must vacate the land and pay rentals. Note however, that prior
to the exercise of the landowner of a choice, the builder will not
be required to pay rents because of his good faith and
consequent right of retention.
Q: When is there good faith again?
A: The builder is considered in good faith if he thought that the
lands was his. The landowner is in good faith if he did not know
that somebody was building on his land, or even if he did know,
he expressed his objection.
Q: Why are the options given to the landowner and not the
builder?
A: As jurisprudence would provide, it is the owner of the land
who is allowed to exercise the options because his right to the
land is older and because as provided by Article 437 of the CC,
under the principle of accession, he is entitled to the ownership
of the accessories of the principal land.
Note:
In case the owner chooses to appropriate the thing built, sown
or planted. Ownership over the thing built, sown or planted does
not pass to the landowner till after payment therefor has been
given as provided for under Article 546.
After the owner of the land has given to the builder or possessor
in good faith the proper indemnities, the builder or possessor
may be ordered to vacate the land.
Q: Before the indemnities are given, is the builder entitled
to the rents that accrue in the meantime if the case involves
the building being leased to another person?
A: No. the builder is not entitled to the rents, since his
possession is no longer that of a possessor in good faith. Note
that the election by the landowner has been made. Therefore, of
the builder receives the rents, he must deduct them from
whatever indemnity is due to him.
Q: What right does the builder have prior to indemnity?
A: The right of retention.
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 PROPERTY
Notes and Digests
Note:
Once a choice is made by the landowner, it is generally
irrevocable. Thus, if the land owner has elected to get the
building, but is finally unable to pay for the indemnity or value
of the building, he cannot afterwards elect to sell the land. His
monetary obligation to indemnify can indeed be satisfied by a
levy of execution on his properties,
Q: When does Article 448 do not apply?
A: Article 448 does not apply when:
1. When the builder, planter, sower does not claim
ownership over the land, but possesses it as mere
holder agent, usufructuary, or tenant.
2. When the builder, planter, sower is not a stranger but
a co-owner, even if later on, during the partition, the
portion of land used is awarded to another co-owner.
3. When a person constructs a building on his own land
and then sells the land but not the building to another.
4. When the builder is a belligerent occupant.
**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.
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.
Article 451. In the cases of the two preceding articles, the
landowner is entitled to damages from the builder, planter or
sower.
DISCUSSION:
Article 449 applies, in the case of planting or sowing, only to
growing or standing crops, NOT to gathered crops which are
governed by Article 443.
Q: If you plant and grow crops on the farm of your neighbor
knowing full well that the farm is not yours, what are your
rights with reference to the crops if your neighbor is in good
faith?
A: We must distinguish.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
If the crops have already been gathered, as provided under
Article 443 of the CC. then you have to return the value of the
crops, or the crops themselves minus the expenses essential for
their production, gathering, and preservation.
If the crops have not yet been gathered, that is, if the crops are
still standing, under Article 449, you completely forfeit them in
favor of the owner of the land, without any right to indemnity
except of course for the necessary expenses for the preservation
of the land and not of the crops.
Illustration on the three articles of Bad Faith
If A builds in bad faith a house on B’s land and B is in good
faith. What are rights of B?
1. B is allowed to get the house without paying any
indemnity for its value or expenses (449) but with the
obligation to pay under Article 452, the necessary
expenses for the preservation of the land. B is also
entitled to damages (451).
2. B is allowed to demand the demolition of the house, at
the builder’s expense (450) plus damages (451).
3. B is allowed to compel the builder to buy the land,
whether or not the value of the land is considerably
more than the value of the house (450) plus damages
(451).
Article 452. The builder, planter or sower in bad faith is
entitled to reimbursement for the necessary expenses of
preservation of the land.
DISCUSSION:
A builder in bad faith can lose the building without indemnity
for the necessary or useful expenses for the building. BUT he
must be indemnified the necessary expenses for the
preservation of the land.
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 PROPERTY
Notes and Digests
Article 453. If there was bad faith, not only on the part of the Hence, It is the builder, planter sower who should principally
person who built, planted or sowed on the land of another, pay the material owner for the value of the materials. It is only
but also on the part of the owner of such land, the rights of when the builder, planter, sower is considered to be insolvent
one and the other shall be the same as though both had acted shall the landowner be subsidiarily liable.
in good faith.
Three requisites for the landowner to be subsidiarily liable to
It is understood that there is bad faith on the part of the the material owner:
landowner whenever the act was done with his knowledge
and without opposition on his part.
1. The BPS is insolvent
2. The BPS is in good faith
DISCUSSION:
3. The landowner will appropriate what was built,
If all the conditions under this Article are present such that both planted or sown
parties, the landowner and the builder, planter, sower, are all in
bad faith, then the provisions of Article 448 of the CC shall
Q: Why is the landowner not subsidiarily liable if he does
apply.
not choose to appropriate?
Take not of the succeeding provision as it also involves an
A: Because he does not derive any profit or benefit. The
application of a prior provision.
landowner can only be made liable for the materials if he profits
from the accession of the property.
Article 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. Q: What happens if the builder, planter, sower is in bad
faith? Let us illustrate this. A in bad faith constructs a house
with the materials of B, who is also in bad faith, on the land
DISCUSSION:
of C who is in good faith.
Under this Article, it is only the landowner who is in bad faith.
If there is an instance where the landowner has knowledge of
A: Since both A and B are in bad faith, as between them, they
the construction, planting or sowing of the builder, planter,
are considered to be in good faith. Hence, B as the owner of the
sower in good faith in their own property, then he is considered
materials, must be reimbursed by A. But in case, A cannot pay,
to be in bad faith and the provisions of Article 447 of the CC
C cannot be held subsidiarily liable because to him, B is in bad
shall apply.
faith.

**Article 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 subsidiarily 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
right 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.
DISCUSSION:
We have three characters under Article 445.
1. Landowner
2. Material Owner
3. Builder, Plamter. Sower
Note that the active party here is principally the builder, planter,
sower. It was he who built, planted, sowed on the land of the
landowner using the materials of the material owner.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
If A pays, A cannot ask for reimbursement from C because as
to C, A is in bad faith.
C’s right in this case would be to ask damages from both A and
B. moreover, he may appropriate the house constructed by A
for his own, without payment of any indemnity for useful or
necessary expenses for the house but with indemnity for the
necessary expenses for the preservation of the land as provided
by Articles 449 and 452.
C can also demand the demolition of the house at A’s expense
or compel A to pay the price of the land whether the land is
considerably more valuable than the house or not as provided
under Article 450.
Article 456. In the cases regulated in the preceding articles,
good faith does not necessarily exclude negligence, which
gives right to damages under article 2176.
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 PROPERTY
Notes and Digests
**Article 457. To the owners of lands adjoining the banks lakes, or by creeks, rivers, or other streams shall continue to be
of rivers belong the accretion which they gradually receive the property of their respective owners. This is because no real
from the effects of the current of the waters. alluvial deposit is made.

DISCUSSION: **Article 459. Whenever the current of a river, creek or

This Article talks about Alluvium which is the soil deposited or torrent segregates from an estate on its bank a known portion
added to (Accretion) the lands adjoining the banks of rivers, and of land and transfers it to another estate, the owner of the
gradually received as an effect of the current of the waters. land to which the segregated portion belonged retains the
ownership of it, provided that he removes the same within
two years.
Difference between Accretion and Alluvium
Accretion is the process whereby soil is deposited while
DISCUSSION:
Alluvium is the soil deposited on the estate fronting the river
bank. This article speak of Avulsion. Avulsion is defined as the
process whereby the current of a river, creek, or torrent
segregates from an estate on its bank a known portion of land
Q: What do you call the owner of the land adjoining rivers?
and transfers it to another estate.
A: He is called the Riparian owner.
The removal must be a considerable quantity of earth which is
sudden and by the perceptible action of the water.
Essential Requisites of Alluvium
1. The deposit should be gradual and imperceptible.
Note:
Avulsion may be referred to as “delayed accession” in the sense
2. The cause should be the current of the river.
that if the owner abandons the soil involved, or fails to remove
the same within 2 years, the land to whjch it has been attached
3. The current must be that of the river.
acquires ownership thereof.
4. The river must continue to exist.
ALLUVIUM AVULSION
5. That the increase must be comparatively little, and not Deposit of soil is gradual. Deposit of soil is sudden or
one that increases the area of land by over 150% abrupt.
Origin of the soil cannot be Origin of the soil can be
identified. identified.
Note:
Soil belongs to the owner of Soil belongs to the owner
It is not necessary that the riparian owner should make an property to which it is from whose property it was
express act of possession, the accession being automatically his attached. detached.
the moment the soil deposit can be seen. Delayed Accession.
Automatic Accession
Ownership transfers only
That the riparian owner has completely paid for the value of the upon the lapse of 2 years
riparian estate as long as he has already the equitable or provided that the owner
beneficial title. abandons the soil that is
involved.
Article 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.

DISCUSSION:
Note that this provision only applies to ponds and lagoons that
are left dry due to the natural decrease in its waters. In terms of
lakes, it is provided in the case of Government v. Colegio de
San Jose, that a lake is not among those included under Article
458 hence, the Spanish Law of Waters apply, wherein it is
provided that Lands accidentally indunated by the waters of
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COLLEGE OF LAW
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Notes and Digests
Article 460. Trees uprooted and carried away by the current
of the waters belong to the owner of the land upon which
they may be cast, if the owners do not claim them within six
months. If such owners claim them, they shall pay the
expenses incurred in gathering them or putting them in a safe
place.
DISCUSSION:
Take note of the 6 month period wherein if the owner of the
trees does not claim them within 6 months, then the owner of
the property where the trees were cast shall have ownership of
them.
Article 461. River beds which are abandoned through the
natural change in the course of the waters ipso facto belong
to the owners whose lands are occupied by the new course in
proportion to the area lost. However, the owners of the lands
adjoining the old bed shall have the right to acquire the same
by paying the value thereof, which value shall not exceed the
value of the area occupied by the new bed.
DISCUSSION:
Requisites for Article 461 to apply:
1. The change must be sudden in order that the old
riverbed may be identified.
2. The change of the course must be more or less
permanent, and not temporary overflooding of
another’s land.
3. The change of the riverbed must be a natural one
caused by natural forces and not by artificial means.
4. There must be definite abandonment by the
government.
5. The river must continue to exist, that is, it must not
completely dry up or disappear.
Article 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.
DISCUSSION:
Even if the new bed is on private property, the bed becomes
property of public dominion, just as the old bed had been of
public dominion before abandonment.
Take note that the abandoned riverbed shall now be owned by
the owner property affected by the new bed which must be
proportionate to the lost area. The basis for this would be Article
461 of the CC.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Article 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 retains his ownership. He also retains
it if a portion of land is separated from the estate by the
current.
DISCUSSION:
This article refers to the formation of an island by the branching
off of a river as distinguished from the formation of islands by
successive accumulation of alluvial deposits referred to Articles
464 and 465.
Article 464. Islands which may be formed on the seas within
the jurisdiction of the Philippines, on lakes, and on navigable
or floatable rivers belong to the State. (371a)
Article 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.
DISCUSSION:
Ownership of Islands
If formed on the sea:
1. Within the territorial waters or maritime zone or
jurisdiction of the Philippines = STATE.
2. Outside our territorial jurisdiction = THE FIRST
COUNTRY TO EFFECTIVELY OCCUPY THE
SAME.
If formed on lakes, or navigable or floatable rivers = STATE
If formed on non-navigable or non-floatable rivers:
1. If NEARER in margin to one bank = THE OWNER
OF THE NEARER MARGIN IS THE SOLE
OWNER.
2. If equidistant = THE ISLAND SHALL BE DIVIDED
LONGITUDINALLY IN HALVES< EACH BANK
GETTING A HALF.
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Notes and Digests
RIGHT OF ACCESSION WITH RESPECT TO
MOVABLE PROPERTY
DISCUSSION:
There are usually three types of accession with respect to
movable property:
1. Adjunction – which is the process by virtue of which
two movable things belonging to different owners are
united in such a way that they form a single object.
2. Mixture (commixtion or confusion) – Commixtion if
solids are mixed. Confusion if liquids are mixed.
3. Specification – The giving of a new form to another’s
material through the application of labor.
ADJUNCTION
Article 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)
Article 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)
Article 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)
Article 469. Whenever the things united can be separated
without injury, their respective owners may demand their
separation.
Nevertheless, in case the thing united for the use,
embellishment or perfection of the other, is much more
precious than the principal thing, the owner of the former
may demand its separation, even though the thing to which
it has been incorporated may suffer some injury. (378)
Article 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.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
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.
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)
Article 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.
DISCUSSION:
Note always the rules on damages.
1. If both parties are in good faith = There must be
indemnity in favor of the owner of the accessory
property.
2. If one is in bad faith = Damages is always certain
depending on who is in bad faith.
3. If both parties are in bad faith = Both parties shall be
treated as if they are both in good faith.
MIXTURE
Article 472. If by the will of their owners two things of the
same or different 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)
Article 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.
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 PROPERTY
Notes and Digests
SPECIFICATION SUMMARY
Article 474. One who in good faith employs the material of ADJUNCTION MIXTURE SPECIFICATION
another in whole or in part in order to make a thing of a Involves at least 2 Involves at least May involve only
different kind, shall appropriate the thing thus transformed things 2 things one thing (may be
as his own, indemnifying the owner of the material for its more) but the form
value. of the thing is
changed.
If the material is more precious than the transformed thing or As a rule, As a rule, co- As a rule, accessory
is of more value, its owner may, at his option, appropriate the accessory follows ownership follows the
new thing to himself, after first paying indemnity for the the principal. results. principal.
value of the work, or demand indemnity for the material. The things joined The things The new object
retain their mixed or retains or preserves
If in the making of the thing bad faith intervened, the owner nature. confused may the nature of the
of the material shall have the right to appropriate the work to either retain or original object.
himself without paying anything to the maker, or to demand lose their
of the latter that he indemnify him for the value of the respective
material and the damages he may have suffered. However, natures.
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.

DISCUSSION:
Rules to Follow in Specification:
1. If the WORKER (principal) is in good faith he gets to
appropriate the new thing but he must indemnify for
the materials.

Except if the material (accessory) is more precious

than the new thing or is more valuable, the owner of
the material has the option to either get the new thing
but he pays for the work or demand indemnity for the
material.

2. If the WORKER is in bad faith, the owner of the

material has an option to appropriate the work without
paying for the labor or he can demand indemnity for
the material plus damages.

Note that the option of appropriation is not available if

the value of the resultant work is more valuable for
artistic or scientific reasons.

Article 475. In the preceding articles, sentimental value shall

be duly appreciated

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ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
 PROPERTY
Notes and Digests
QUIETING OF TITLE • A mortgage valid on its face but in reality will cause
**Article 476. Whenever there is a cloud on title to real prejudice.
property or any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is Note:
apparently valid or effective but is in truth and in fact invalid, If the plaintiff is in possession of the property, an action. The
ineffective, voidable, or unenforceable, and may be
reason for this is that while the owner continues to be liable to
prejudicial to said title, an action may be brought to remove
such cloud or to quiet the title. an action, proceeding or suit upon the adverse claim. He has a
continuing right to be given aid by the court to ascertain and
determine the nature of such claim and its effect on his title, or
An action may also be brought to prevent a cloud from being
cast upon title to real property or any interest therein. to assert any superior equity in his favor. He may wait until his
possession is disturbed or his title is attacked before taking steps
to vindicate his right.
DISCUSSION:
Quieting of title is a remedy for the removal of any cloud upon
If the plaintiff is not in possession of the property, the action
or doubt or uncertainty with respect to title or real property.
may prescribe. It may be barred by laches if there is no excuse
offered for failure to assert the title sooner.
In an action for quieting of title, the competent court is tasked
to determine the respective rights of the complainant and other
If somebody else has possession, the period of prescription for
claimants, not only to place things in their proper place, to make
the recovery of the land is either 10 or 30 years depending on
the one who has no rights to said immovable respect and not
ordinary or extraordinary prescription.
disturb the other, but also for the benefit of both.

Article 477. The plaintiff must have legal or equitable title

So that he who has the right would see every cloud of doubt
to, or interest in the real property which is the subject matter
over the property dissipated and he could afterwards without of the action. He need not be in possession of said property.
fear introduce the improvements he may desire, to use, and even
to abuse the property as he deems best.
DISCUSSION:
There is a necessity for the title of the plaintiff such that the
Existence of the Cloud
plaintiff , must either have the legal (registered) ownership or
The cloud or doubt on the title exists because:
the equitable (beneficial) ownership over the property,
1. Of an instrument either deed or instrument or record
otherwise, the action will not prosper.
or claim or encumbrance or proceeding;
Note:
2. Which is apparently valid or effective;
If Plaintiff is in possession If Plaintiff is not in
3. But is in truth and in fact, invalid, ineffective, voidable of the Property possession of the property
or unenforceable or extinguished, terminated or barred Period does not prescribe Period prescribes
by extinctive prescriptiuon; Only right is to remove or **Aside form being given
prevent cloud. the right to remove or
prevent cloud, he may also
4. And may be prejudicial to the title.
bring the ordinary actions of
ejectment, publiciana, or
Reasons for allowing the action: reivindicatoria within the
1. To prevent eventual litigation proper prescriptive periods
2. To protect the true title and possession
3. The promotion of right and justice

Examples of an existence of cloud over a title:

• An agent who sells property of his principal without
written authority.
• Contract is forged.
• Contract was made by an incapacitated person.

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ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
 PROPERTY
Notes and Digests
**Article 478. There may also be an action to quiet title or
remove a cloud therefrom when the contract, instrument or
other obligation has been extinguished or has terminated, or
has been barred by extinctive prescription.
DISCUSSION:
There are two instance where an action to quiet title may be
used.
1. When the contract etc. between the parties have ended.
2. When the action is barred by extinctive prescription.
Article 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.
Article 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.
RUINOUS BUILDINGS AND TREES IN DANGER OF
FALLING
Article 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
administrative authorities may order the demolition of the
structure at the expense of the owner, or take measures to
insure public safety. (389a)
Article 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 travelers 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 shall be done at his expense by order of the
administrative authorities. (390a)

**Article 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 promulgated.

DISCUSSION:
Rules of procedure that needs to be followed:

1. The venue of the action is determined by the situation

or location of the property and not only by the
residence of the parties.

2. The process or notice should accurately describe the

property and state in general terms the nature and
extent of the plaintiff’s claim.

3. The suit cannot be brought in the name of one party for

the use and benefit of another.

4. In a suit for the quieting of title, the actual possessor at

the time of the filing of the action must be respected in
his possession until after there is an adjudication on the
merits.

If the actual possessor is disturbed in the meantime by

the other party, the former is entitled to a writ of
preliminary injunction against said disturbers.

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ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
 PROPERTY
Notes and Digests
CO-OWNERSHIP 7. A co-owner is in a sense a trustee for the other co-
Article 484. There is co-ownership whenever the ownership owners. Thus he may not ordinarily acquire exclusive
of an undivided thing or right belongs to different persons. ownership of the property held in common through
prescription.
In default of contracts, or of special provisions, co-
ownership shall be governed by the provisions of this Title. BAR QUESTION:
Q: Distinguish Co-ownership from Conjugal Partnership
DISCUSSION:
Co-ownership is that state where an undivided thing or right A:
belongs to two or more persons. It is the right of common CO-OWNERSHIP CONJUGAL
dominion which two or more persons have in part of a thing PARTNERSHIP
which is not physically divided. May arise by an ordinary Arises only because of the
contract. marriage contract.
A co-ownership is not a juridical person, nor is it granted any Sex of the co-owners is One must be male, the other
form of juridical personality, thus it cannot sue in court. immaterial. a female.
However, Co-owners may litigate in their individual capacities. Co-owners may be two or Conjugal owners are always
more. in two.
Note: Profits are proportional to Profits are generally 50-50
Possession of a co-owner is like that of a trustee and shall not respective interests. unless a contrary stipulation
be regarded as adverse to the other co-owners but in fact as is in a marriage settlement.
beneficial to all of them. Death of one does not Death of either spouse
dissolve the co-ownership. dissolves the conjugal
partnership.
A co-owner can only alienate hi pro indiviso share in the co-
Generally all the co-owners Generally, the husband is the
owned property. Thus, a co-owner does not lose his part administer. administrator.
ownership of a co-owned property when his share is mortgaged
Co-ownership is Encouraged by law to
by another co-owner without the former’s knowledge. discouraged by law. provide for better family
solidarity.
Q: Sources of Co-ownership/How does it arise?
Article 485. The share of the co-owners, in the benefits as
A: Co-ownership arises by: well as in the charges, shall be proportional to their
1. Law respective interests. Any stipulation in a contract to the
2. Contract contrary shall be void.
3. Chance
4. Occupation or occupancy The portions belonging to the co-owners in the co-ownership
5. Succession or will shall be presumed equal, unless the contrary is proved.

Characteristics of Co-ownership:
1. There must be more than one subject or owner.
2. There is on physical whole divided into “Ideal”
(undivided) shares.
3. Each ideal share is definite in amount, but is not
physically segregated from the rest.
4. Regarding the physical whole, each co-owner must
respect each other in the common use, enjoyment or
preservation of the physical whole.
5. Regarding the ideal share, each co-owner holds almost
absolute control over the same. Meaning he is the full
owner of his part, and of the fruits and benefits thereof.
He may alienate, assign, or mortgage it.
6. It is not a juridical person, it has no juridical
personality.
**Article 486. 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. The purpose of the co-
ownership may be changed by agreement, express or
implied.
DISCUSSION:
This article grants each co-owner the right to use the property
for the purpose intended provided that:
1. The interest of the co-ownership must not be injured
or prejudiced.
2. The other co-owners must not be prevented from using
it.

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Notes and Digests
**Article 487. Any one of the co-owners may bring an
action in ejectment.
DISCUSSION:
Article 487 now allows a co-owner to brin an action for
ejectment which covers all kinds of actions for the recovery of
possession, including forcible entry and unlawful detainer,
without the necessity of joining all the other co-owners as co-
plaintiffs, because the said action instituted is for the benefit for
all.
This is a reversion from the Old Civil Code wherein all co-
owners must institute the suit.
Note:
If the action however, is instituted by the co-owner and
expressly states that he is bringing the case only for himself,
then the action should not be allowed to prosper.
Q: What are actions covered by the term ejectment?
A: Ejectment covers the following actions:
1. Forcible Entry
2. Unlawful Detainer
3. Accion Publiciana
4. Accion Reivindicatoria
5. Quieting of Title
6. Replevin
Article 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.
Article 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.
DISCUSSION:
A co-owner has the right to compel the others to share in the
expenses of preservation, even if incurred without prior
notification to them. But he must if practicable notify them as
provided for under Article 489.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
**Article 490. Whenever the different stories of a house
belong to different 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 proportion 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
maintained 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.
DISCUSSION:
This is not an ordinary case of co-ownership where all the floors
and everything else belong to all co-owners.
Here, we have a case of “Perpendicular Co-ownership” where
the different stories belong to different persons. This is still co
ownership for there is some unity in the main and common
walls, roof, stairs, etc.
Note:
Under the Condominium Law, a condominium corporation can
be formed to take care of the common property.
(See R.A.4726 also known as the Condominium Act)
Article 491. None of the co-owners shall, without the consent
of the others, make alterations in the thing owned in
common, even though benefits for all would result
therefrom. However, if the withholding of the consent by one
or more of the co-owners is clearly prejudicial to the
common interest, the courts may afford adequate relief.
Examples of Alterations:
1. Sale, Donation, Mortgage etc. of the whole property.
2. Voluntary Easement.
3. Lease of real property which is registered.
4. Construction of a house on a lot owned in common.
5. Any other act of strict dominion or ownership.
6. Contracts of long duration.
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 PROPERTY
Notes and Digests
Article 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
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.
Whenever a part of the thing belongs exclusively to one of
the co-owners, and the remainder is owned in common, the
preceding provision shall apply only to the part owned in
common.
Article 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 termination of the co-ownership.
DISCUSSION:
If a co-owner sells the entire common property, the sale is valid
only insofar as his share is concerned, unless the other co-
owners consented to the sale.
In case of the alienation of a co-owner’s share, the person who
participates in the partition should be the stranger who should
participate and not the original co-owner since the vendor of his
interest has ceased.
Article 494. No co-owner shall be obliged to remain in the
co-ownership. 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
certain 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.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF 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.
DISCUSSION:
The reason for allowing the partition at any time is that to
remain in a co-ownership despite the plaintiff’s objections
would be to subject that person to the desires of the rest.
Furthermore it is important to note that the right to demand
partition never prescribes as long as the co-ownership still
remains.
The object of a partition
Both real and personal properties may be the object of partition.
Partition has for its purpose the separation, division or
assignment of things held in common, among the people to
whom they may belong.
BAR QUESTION
Q; When may a Co-owner not successfully deman a partition?
A: These instances are:
1. If by agreement (for a period not exceeding 10 years)
partition is prohibited.
2. When a partition is prohibited by a donor or testator
for a period not exceeding twenty years.
3. When a physical partition would render the property
unserviceable.
Q: What are the conditions before a co-owner becomes the
exclusive owner of the other’s shares through prescription?
A: These conditions are:
1. He must make known to the other co-owners that he is
definitely repudiating the co-ownership and that he is
claiming complete ownership over the entire property.
2. The evidence of repudiation and knowledge on the part
of the others must be clear and convincing.
3. The other requirements of prescription such as
OCEANPO for a period of time required under the law
must be present.
4. The period of prescription shall start to run only from
such repudiation of co-ownership.
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Notes and Digests
Article 495. Notwithstanding the provisions of the preceding
article, the co-owners cannot demand a physical division of
the thing owned in common, 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.
DISCUSSSION:
This article speaks of partition of an essentially indivisible
object.
Article 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.
DISCUSSION:
Q: What must a person desiring judicial partition of real
estate do?
A: Under Rule 69, Section 1, The person having the right to
compel the partition of real estate should set forth in his
complaint the NATURE and EXTENT of his TITLE, and an
adequate DESCRIPTION of the real estate. He must join as
DEFENDANTS all the other persons interested in the property.
Additional rules:
▪ Unless all the other co-owners and interested persons
are made defendants, the action will not prosper.
▪ If a co-owner is dead, his administrator or his heirs
may bring the action.
▪ Insufficiency of description in the complaint may be
cured even during the trial and not afterwards.
▪ An action for partition cannot be considered as one for
the partition of the property owned in common even
though it is so entitled in the prayer of the complaint if
any party to the suit denies the pro-indiviso
(undivided) character of the estate whose partition is
sought and claims exclusive title thereto or to any part
thereof. In such case, the action becomes one for
recovery of property insofar as the property claimed
exclusively by any of the parties concerned.
Q: What must the Court do if it finds that the plaintiff has
the right to demand partition?
A: If after the trial the court finds that the plaintiff has the right
thereto, it shall order the partition of the real estate among all
the parties in interest.
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Thereupon, the parties may, if they are able to agree, make the
partition among themselves by proper instruments of
conveyance, and the court shall confirm the partition together
with the order of the court confirming the same, shall be
recorded in the registry of deeds of the place in which the
property is situated.
Q: What must the Court do if the parties fail to agree on the
partition?
A: If the parties are unable to agree upon the partition, the court
shall appoint not more than three competent and disinterested
persons as commissioners to make the partition, commanding
them to set off to the plaintiff and to each party in interest such
part and proportion of the property as the court shall direct.
Role of the commissioners in making the partition
In making the partition, the commissioners shall view and
examine the real estate after due notice to the partiers to attend
at such view and examination, and shall hear the parties as to
their preference in the portion of the property be set apart to
them and the comparative value thereof, and shall set apart the
same to the parties in lots or parcels as will be most
advantageous and equitable, having due regard to the
improvements, situation, and quality of the different parts of the
land.
Note:
The partition made by the commissioners will not be effective
until approved by the court.
A partition may be novated as long as all the interested parties
consent thereto. This is particularly so if such novation is
required in the interest of justice and equity, and in order to
facilitate the settlement of the estate.
Article 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 effected 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 prejudice
to the right of the debtor or assignor to maintain its validity
DISCUSSION:
All creditors, preferred or ordinary are included within this
scope of creditors provided that they have become creditors
during the existence of co-ownership, and not before or after.
Furthermore, since the law grants them the right to participate
in the partition, notice must be given to them.
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Notes and Digests
Article 498. Whenever the thing is essentially indivisible WATERS
and the co-owners cannot agree that it be allotted to one of SECTION 1
them who shall indemnify the others, it shall be sold and its Ownership of Waters
proceeds distributed.
Article 502. The following are of public dominion:
DISCUSSION:
Although the article seemingly refers only to a case when the (1) Rivers and their natural beds;
property is essentially indivisible, still there is nothing wrong in
applying the same to an object that is essentially divisible (2) Continuous or intermittent waters of springs and brooks
(example: Land). running in their natural beds and the beds themselves;

When it is made to appear to the commissioners that the real (3) Waters rising continuously or intermittently on lands of
estate or a portion thereof, cannot be divided without prejudice public dominion;
to the interests of the parties, the court may order it assigned to
one of the parties willing to take the same, provided he pays to (4) Lakes and lagoons formed by Nature on public lands, and
the other parties such amounts as the commissioners deem their beds;
equitable, UNLESS one of the interested parties asks that the
property be sold instead of being so assigned, in which case the (5) Rain waters running through ravines or sand beds, which
court shall order the commissioners to sell the real estate at are also of public dominion;
public sale.
(6) Subterranean waters on public lands;
**Article 499. The partition of a thing owned in common
(7) Waters found within the zone of operation of public
shall not prejudice third persons, who shall retain the rights
works, even if constructed by a contractor;
of mortgage, servitude or any other real rights belonging to
them before the division was made. Personal rights
pertaining to third persons against the co-ownership shall (8) Waters rising continuously or intermittently on lands
also remain in force, notwithstanding the partition. belonging to private persons, to the State, to a province, or to
a city or a municipality from the moment they leave such
lands;
Article 500. Upon partition, there shall be a mutual
accounting for benefits received and reimbursements for
(9) The waste waters of fountains, sewers and public
expenses made. Likewise, each co-owner shall pay for
establishments. (407)
damages caused by reason of his negligence or fraud. (n)
Article 503. The following are of private ownership:
Article 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) (1) Continuous or intermittent waters rising on lands of
private ownership, while running through the same;
DISCUSSION:
(2) Lakes and lagoons, and their beds, formed by Nature on
Q: How is Co-ownership Extinguished? such lands;

A: Co-ownership is extinguished upon: (3) Subterranean waters found on the same;

1. Judicial Partition
2. Extrajudicial Partition (4) Rain waters falling on said lands, as long as they remain
3. When by prescription, one owner has acquired the within the boundaries;
whole property by adverse possession as against all the
others and repudiating unequivocally the co- (5) The beds of flowing waters, continuous or intermittent,
ownership of the other. formed by rain water, and those of brooks, crossing lands
4. When a stranger acquires by prescription the thing which are not of public dominion.
owned in common.
5. Merger in one co-owner In every drain or aqueduct, the water, bed, banks and
6. Loss or destruction floodgates shall be considered as an integral part of the land
7. Expropriation of building for which the waters are intended. The owners of

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COLLEGE OF LAW
 PROPERTY
Notes and Digests
lands, through which or along the 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
titles of ownership specifying the right or ownership
claimed. (408)
SECTION 2
The Use of Public Waters
Article 504. The use of public waters is acquired:
(1) By administrative concession;
(2) By prescription for ten years.
The extent of the rights and obligations of the use shall be
that established, in the first case, by the terms of the
concession, and, in the second case, by the manner and form
in which the waters have been used. (409a)
Article 505. Every concession for the use of waters is
understood to be without prejudice to third persons. (410)
Article 506. The right to make use of public waters is
extinguished by the lapse of the concession and by non-user
for five years. (411a)
SECTION 3
The Use of Waters of Private Ownership
Article 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)
Article 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)
Article 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)
Article 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)
ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW
Article 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
Article 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)
Article 513. Waters artificially brought forth in accordance
with the Special Law of Waters of August 3, 1866, belong to
the person who brought them up. (418)
Article 514. When the owner of waters artificially brought
to the surface abandons them to their natural course, they
shall become of public dominion. (419)
SECTION 5
General Provisions
Article 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)
Article 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)
Article 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 respective interests. Those
who by their fault may have caused the damage shall be
liable for the expenses. (422)
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Notes and Digests
Article 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)

Note:
See P.D. 1067 also known as The Water Code of the
Philippines.

MINERALS
Article 519. Mining claims and rights and other matters
concerning minerals and mineral lands are governed by
special laws. (427a)

TRADE-MARKS AND TRADE-NAMES

Article 520. A trade-mark or trade-name duly registered in
the proper government bureau or office is owned by and
pertains to the person, corporation, or firm registering the
same, subject to the provisions of special laws. (n)

Article 521. The goodwill of a business is property, and may

be transferred together with the right to use the name under
which the business is conducted. (n)

Article 522. Trade-marks and trade-names are governed by

special laws. (n)

END OF FIRST EXAM

Even if you think you might lose, you’ll be fine as long as you
don’t give up! Surpass your limits. Then a path will open up
for you!

~Captain of the Black Bulls, Yami

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ATENEO DE DAVAO UNIVERSITY
COLLEGE OF LAW