PROPERTY – FINAL EXAM
vs. Alto Surety 103
Xandredg Sumpt L. Latog
I Gaz., 2913), for it is now well settled that an object placed on
CLASSIFICATION OF PROPERTY
A. PRELIMINARY PROVISION
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.
Under the Civil Code, property, considered as an object,
is that which is, or may be, appropriated. Considered as a subject or
course in law, property is that branch of civil law which classifies
and defines the different kinds of appropriable objects, provides for
their acquisition and loss, and in general, treats of the nature and
consequences of real rights.
The law does not define what appropriation is, but it has
been considered as equivalent to occupation which is the wilful
apprehension of a corporeal object which has no owner, and with
intent to acquire its ownership.
The classification of property into immovables or
movables does not assume its importance from the fact of mobility
or non-mobility, but from the fact that different provisions of the
law govern the acquisition, possession, disposition, loss, and
registration of immovables and movables.
According to the Supreme Court in the case of Standard
Oil Co. of New York v. Jaranillo, under certain conditions, it is
undeniable that the parties to a contract may, by agreement, treat as
personal property that which by nature would be real property.
However, the true reason why the agreement would be valid
between the parties is the application of estoppel. It stated further
that it is a familiar phenomenon to see things classed as real
property for purposes of taxation, which on general principles may
be considered as personal property. However, it would seem that
under the Civil Code, it is only the LAW which may consider
certain real property (like growing crops) as personal property (for
the purpose of making a chattel mortgage). Thus, in Navarro v.
Pineda, the Court held:
In construing Arts. 334 and 335 of the Spanish Civil
Code (corresponding to Arts. 415 and 416, N.C.C.), for purposes
of the application of the Chattel Mortgage Law, it was held that
under certain conditions, "a property may have a 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"
(Standard Oil Co. of N.Y. vs. Jaranillo, 44 Phil., 632-633).
"There can not 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.
* *. The matter depends on the circumstances and the intention
of the parties". "Personal property may retain its character as
such where it is so agreed by the parties interested even though
annexed to the realty * *". (42 Am. Jur. 209-210, cited in
Manarang, et al. vs. Ofilada, et al., 99 Phil., 108; 52 Off. Gaz.,
No. 8, p. 3954). The view that parties to a deed of chattel
mortgage may agree to consider a house as personal property for
the purposes of said contract, "is good only insofar as the
contracting parties are concerned. It is based, partly, upon the
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principles of estoppel * *" (Evangelista 
Phil., 401). In a case, a mortgaged house built on a rented land,
was held to be a personal property not only because the deed of
mortgage considered it as such, but also because it did not form
an integral part of the land (Evangelista vs. Abad, [CA]; 36 Off.
land by one who has only a temporary right to the same, such as
a lessee or usufructuary, does not become immobilized by
attachment (Valdez vs. Central Altagracia, 222 U.S. 58, cited in
Davao Sawmill Co. Inc. vs. Castillo, et al., 61 Phil. 709). Hence,
if a house belonging to a person stands on a rented
land belonging to another person, it may be mortgaged as a
personal property if so stipulated in the document of mortgage.
(Evangelista vs. Abad, supra). It should be noted, however, that
the principle is predicated on statements by the owner declaring
his house to be a chattel, a conduct that may conceivably estop
him from subsequent claiming otherwise (Ladera, et al. vs. C.W.
Hodges, et al., [CA]; 48 Off. Gaz., 5374). The doctrine,
therefore, gathered from these cases is that although in some
instances, a house of mixed materials has been considered as a
chattel between the parties and that the validity of the contract
between them, has been recognized, it has been a constant
criterion nevertheless that, with respect to third persons, who are
not parties to the contract, and specially in execution
proceedings, the house is considered as an immovable property
(Art. 1431, New Civil Code).
Navarro v. Pineda
Held: The house in question was treated as personal or movable
property, by the parties to the contract themselves. In the deed of chattel
mortgage, appellant Rufino G. 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.
The cases cited by appellants are not applicable to the present
case. The Iya cases, 103 Phil., 972 supra), refer to a building or a house of
strong materials, permanently adhered to the land, belonging to the owner
of the house himself. In the case of Lopez vs. Orosa, (103 Phil., 98), the
subject building was a theatre, built of materials worth more than P62
000.00 attached permanently to the soil. In these two cases and in the
Leung Yee Case, supra, third persons assailed the validity of the deed of
chattel mortgages; in the present case, it was one of the parties to the
contract of mortgages who assailed its validity.
B. IMMOVABLE PROPERTY
Article 415. The following are immovable property:
(1) Land, buildings, roads and constructions of all kinds
adhered to the soil;
(2) Trees, plants, and growing fruits, while they are attached
to the land or form an integral party of an immovable;
(3) Everything attached to an immovable in a fixed manner,
in such a way that it cannot be separated therefrom without breaking
the material or deterioration of the object;
(4) Statues, reliefs, paintings, or other objects for use or
ornamentation, placed in buildings or on lands by the owner of the
immovable in such a manner that it reveals the intention to attach
them permanently to the tenements.
(5) Machinery, receptacles, instruments, or implements
intended by the owner of the tenement for an industry or works which
may be carried on in a building or on a piece of land, and which tend
directly to meet the needs of the said industry or works;
(6) Animal houses, pigeon houses, beehives, fish ponds or
breeding places of similar nature, in case their owner has 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 party of the bed, nd waters either running or stagnant;
(9) Docks and structures which, though floating, are
intended by their nature ad 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.
Academic Classification of Real Properties
(a) Real property by nature (like trees and plants)
(b) Real property by incorporation (like a building)
(c) Real property by destination or purpose (like
machinery placed by the owner of a tenement on it for direct use in
an industry to be carried on therein)
(d) Real property by analogy (like the right of usufruct,
or a contract for public works, or easements and servitudes, or
“sugar quotas” under Republic Act 1825 and Executive Order 873
[Presbitero v. Fernandez].
1. ‘Land, buildings, roads, and constructions of all
kinds adhered to the soil.’
Land by its very nature is an immovable. And even if
land is moved by an earthquake or an extraordinary happening, the
land should still be considered immovable. A shovelful of land
however, should be considered personal property, since this no
longer adheres to the soil. If land is rented, it is still immovable.
Buildings are considered immovable provided they are
more or less of a permanent structure, substantially adhering to the
land, and not mere superimpositions on the land like barong-
barongs or quonset fixtures and provided there is the intent of
permanent annexation. And this is true, whether the building is
built on one’s own land, or on rented land. The reason is clear: the
law on this point does not distinguish as to who built or owns the
building.
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
[Biccera v. Teneza].  “Growing crops’’ are sometimes referred to as “standing
The foregoing provision of the Civil Code enumerates
land and buildings separately. This can only mean that a building
is, by itself, considered immovable.Thus, 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
[Soriano v. Sps. Galit].
Leung Yee v. Strong Machinery
Held: 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 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
Page 2 of 121
be entitled to the property. “Strong Machinery” thus has a better right to the
property.
Constructions of All Kinds
Though the law says “constructions of all kinds adhered
to the soil,” it is understood that the attachment must be more or
less permanent. (3 Manresa 18). A wall or a fence would be a good
example of this kind of real property by incorporation. This is true
even if the fence or wall is built only of stones as long as there is an
intent to permanently annex the same. Even railroad tracks or rails
would come under this category, for although they are not exactly
roads, they are certainly “constructions.”
2. ‘Trees, plants and growing crops, while they are
attached to the land or form an integral part of
an immovable.’
The prohibition in the Constitution applies only to
ownership of land. It does not extend to immovable or real property
as defined under Article 415 of the Civil Code. Otherwise, we
would have a strange situation where the ownership of immovable
property such as trees, plants and growing fruit attached to the land
would be limited to Filipinos and Filipino corporations only [JG
Summit v. Court of Appeals].
Trees and Plants. No matter what their size may be,
trees and plants are considered real property, by nature if they are
the spontaneous products of the soil, and by incorporation, if they
were planted thru labor. But the moment they are detached or
uprooted from the land, they become personal property, except in
the case of uprooted timber, if the land is timber land.
Rule on ungathered fruits:
a. Even if the land is being leased by another, and the
fruits belong to the tenant, the fruits are still
considered as immovable because no exception or
qualification is made under the Civil Code.
b. However, when the fruits although ungathered are
sold, as when the entire harvest is sold before being
actually gathered, it is considered as a sale of
movables.
crops’’ or “ungathered fruits’’ or “growing fruits.’’
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.’
Under this paragraph, for the incorporated thing to be
considered real property, the injury or breakage or deterioration in
case of separation, must be SUBSTANTIAL.
Example: A fixed fire escape stairway firmly embedded
in the walls of a house, an aqueduct, or a sewer, or a well.
Machinery and Engineering v. Court of Appeals
Held: When the sheriff repaired to the premises of respondent,
Ipo Limestone Co., Inc., 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." For these reasons, they
were already immovable property pursuant to paragraphs 3 and 5 of Article
415 of Civil Code of the Philippines, which, are substantially identical to
paragraphs 3 and 5 of Article 334 of the Civil Code of Spain. As such
immovable property, they were not subject to replevin.
Benguet Corp. v. CBAA
Held: 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.
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 petitioner'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.
Meralco Securities v. CBAA
Held: It is incontestable that the pipeline of Meralco Securities
does not fall within any of the classes of exempt real property enumerated
in section 3 of the Assessment Law and section 40 of the Real Property Tax
Code.
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 (Note 21[10],54 C.J.S. 561).
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 (Exh. B, p. 39, Rollo). 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.
Insofar as the pipeline uses valves, pumps and control devices to
maintain the flow of oil, it is in a sense machinery within the meaning of
the Real Property Tax Code.
Effect of Separation
If the thing incorporated is temporarily removed with the
intention to replace the same, the thing is considered personal
property because the incorporation had ceased. The material fact of
incorporation or separation is what determines the condition of the
tenement; it recovers its status as movables, irrespective of the
intention of the owner.
4. ‘Statues, reliefs, paintings or other objects for
use or ornamentation, placed in buildings or on
land by the owner of the immovable in such a
manner that it reveals the intention to attach
them permanently to the tenements.’
Example: A fixed statue in the garden of a house, a
permanent painting on the ceiling, a picture embedded in the
concrete walls of a house, a rug or carpet fastened to the floor, as in
the case of wall to wall carpeting.
Paragraph 3 Distinguished from Paragraph 4:
Paragraph 4 (1) can be separated from immovable
without breaking or deterioration (2) must be placed by the owner,
Page 3 of 121
or by his agent, express or implied (3) real property by
incorporation and destination
Paragraph 3 (1) cannot be separated from immovable
without breaking or deterioration (2) need not be placed by the
owner [Ladera v. Hodges]. (3) real property by incorporation and
destination.
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.’
Paragraph 5 refers to real property by destination or
purpose. The following are the requisites:
a. The placing must be made by the owner of the
tenement, his agent, or duly authorized legal
representative;
b. The industry or works must be carried on in the
building or on the land. A transportation business is
not carried on in a building or in the compound
[Mindanao Bus Co. v. City Assessor];
c. The machines, etc., must tend directly to meet the
needs of said industry or works.
(ADAPTABILITY);
d. The machines must be essential and principal
elements in the industry, and not merely incidental.
[Thus, cash registers, typewriters, calculators,
computers, fax machines, etc., usually found and
used in hotels, restaurants, theaters, etc. are merely
incidentals, and not and should not be considered
immobilized by destination, for these businesses can
continue or carry on their functions without these
equipment.
In the case of Bischoff vs. Pomar and Compania General
de Tabacos (12 Phil., 690), cited with approval in the case of Cea
vs. Villanueva (18 Phil., 538), this court laid down the following
doctrine:
"1. Realty; Mortgage of Real Estate Includes
Improvements and Fixtures.—It is a rule, established by the
Civil Code and also by the Mortgage Law, with which the
decisions of the courts of the United States are in accord, that in
a mortgage of real estate, the improvements on the same are
included; therefore, alj objects permanently attached to a
mortgaged building or land, although they may have been
placed there after the mortgage was constituted, are also
included.
2. Id.; Id,; Inclusion or Exclusion of Machinery, etc.
—In order that it may be understood that the machinery and
other objects placed upon and used in connection with a
mortgaged estate are excluded from the mortgage, when it was
stated in the mortgage that the improvements, buildings, and
machinery that existed thereon were also comprehended, it is
indispensable that the exclusion thereof be stipulated between
the contracting parties."
Berkenkotter v. Cu Unjieng
Held: 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 necessarily be permanent.
Furthermore, the fact that B., A. Green bound himself to the
plaintiff B. H. Berkenkotter to hold said machinery and equipment as
security for the payment of the latter's credit and to refrain from mortgaging
or otherwise encumbering them until Berkenkotter has been fully
reimbursed therefor, is not incompatible, with the permanent character of
the incorporation of said machinery and equipment with the sugar central of
the Mabalacat Sugar Co., Inc., as nothing could prevent B. A. Green from
giving them as security at least under a second mortgage.
As to the alleged sale of said machinery and equipment to the
plaintiff and appellant after they had been permanently incorporated with
the sugar central of the Mabalacat Sugar Co., Inc., and while the mortgage
constituted on said sugar central to Cu Unjieng e Hijos remained in force,
only the right of redemption of the vendor Mabalacat Sugar Co., Inc., in the
sugar central with which said machinery and equipment had been
incorporated, was transferred thereby, subject to the right of the defendants
Cu Unjieng e Hijos under the first mortgage.
Caltex v. CBAA
Held: We hold that the said equipment and machinery, 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.
Capitol Wireless v. Provincial Treasurer of Batangas
Held: While both electric transmission lines (on land) and
submarine undersea communication tables, in the strictest sense, are not
directly adhered to the soil but pass-through posts, relays or landing
stations, nonetheless they may be classified under the term “machinery” as
real property under Article 415(5) 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 machinery, as waters is classified as an
immovable under Article 415(8). 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, it is considered real property.
Board of Assessment Appeals v. MERALCO
Held: The steel towers or supports in question, do not come
within the objects mentioned in paragraph 1, because they do not constitute
buildings or constructions adhered to the soil. They are not construction
analogous to buildings nor adhering to the soil. As per description, given by
the lower court, they are removable and merely attached to a square metal
frame by means of bolts, which when unscrewed could easily be dismantled
and moved from place to place. They can not be included under paragraph
3, as they are not attached to an immovable in a fixed manner, and they can
be separated without breaking the material or causing deterioration upon
the object to which they are attached. Each of these steel towers or supports
consists of steel bars or metal strips, joined together by means of bolts,
which can be disassembled by unscrewing the bolts and reassembled by
screwing the same. These steel towers or supports do not also fall under
paragraph 5, for they are not machineries, receptacles, instruments or
implements, and even if they were, they are not intended for industry or
works on the land. Petitioner is not engaged in an industry or works in the
land in which the steel supports or towers are constructed.
MERALCO v. City Assessor
Page 4 of 121
Held: The aforequoted conclusions of the Court in the 1964
MERALCO case do not hold true anymore under the Local Government
Code.
While the Local Government Code still does not provide for a
specific definition of "real property," Sections 199(o) and 232 of the said
Code, 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 self-propelled, or are not permanently attached
must (a) be actually, directly, and exclusively used to meet the needs of the
particular industry, business, or activity; and (2) by their very nature and
purpose, be designed for, or necessary for manufacturing, mining, logging,
commercial, industrial, or agricultural purposes.
Article 415, paragraph (1) of the Civil Code declares as
immovables or real properties "[l]and, buildings, roads and constructions of
all kinds adhered to the soil." The land, buildings, and roads are
immovables by nature "which cannot be moved from place to place,"
whereas the constructions adhered to the soil are immovables by
incorporation "which are essentially movables, but are attached to an
immovable in such manner as to be an integral part thereof." [57] Article 415,
paragraph (3) of the Civil Code, referring to "[e]verything 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," are
likewise immovables by incorporation. In contrast, the Local Government
Code considers as real property machinery which "may or may not be
attached, permanently or temporarily to the real property," and even those
which are "mobile."
Article 415, paragraph (5) of the Civil Code considers as
immovables or real properties "[m]achinery, 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." The Civil Code,
however, does not define "machinery.
The properties under Article 415, paragraph (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 aforementioned
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.
As between the Civil Code, a general law governing property
and property relations, and the Local Government Code, a special law
granting local government units the power to impose real property tax, then
the latter shall prevail. As the Court pronounced in Disomangcop v. The
Secretary of the Department of Public Works and Highways Simeon A.
Datumanong:
It is a finely-imbedded principle in statutory construction that a
special provision or law prevails over a general one. Lex specialis derogant
generali. As this Court expressed in the case of Leveriza v. Intermediate
Appellate Court, "another basic principle of statutory construction mandates
that general legislation must give way to special legislation on the same
subject, and generally be so interpreted as to embrace only cases in which
the special provisions are not applicable, that specific statute prevails over a
general statute and that where two statutes are of equal theoretical
application to a particular case, the one designed therefor specially should
prevail." (Citations omitted.)
The Court also very clearly explicated in Vinzons-Chato v.
Fortune Tobacco Corporation that:
 A general law and a special law on the same subject are statutes
in pari materia and should, accordingly, be read together and harmonized,
if possible, with a view to giving effect to both. The rule is that where there
are two acts, one of which is special and particular and the other general
which, if standing alone, would include the same matter and thus conflict
with the special act, the special law must prevail since it evinces the
legislative intent more clearly than that of a general statute and must not be
taken as intended to affect the more particular and specific provisions of the
earlier act, unless it is absolutely necessary so to construe it in order to give
its words any meaning at all.
The circumstance that the special law is passed before or after
the general act does not change the principle. Where the special law is later,
it will be regarded as an exception to, or a qualification of, the prior general
act; and where the general act is later, the special statute will be construed
as remaining an exception to its terms, unless repealed expressly or by
necessary implication. (Citations omitted.)
Furthermore, in Caltex (Philippines), Inc. v. Central Board of
Assessment Appeals, the Court acknowledged that "[i]t 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.
Effect of Separation
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.
As a rule, the machinery should be considered as
personal, since it was not placed on the land by the owner of said
land by the owner of said land. Immobilization by destination or
purpose cannot generally be made by a person whose possession of
the property is only temporary, otherwise we will be forced to
presume that he intended to give the property permanently away in
favor of the owner of the premises [Davao Saw Mill Co., Inc. v.
Castillo].
Machinery which is movable in its nature becomes
immobilized when placed in a plant by the owner of the property or
plant, but not when so placed by a tenant, a usufructuary, or a
person having only a temporary right, unless such person acted as
the agent of the owner [Davao Saw Mill Co., Inc. v. Castillo].
However, the machinery would be considered as real property by a
tenant who placed said machinery on the property pursuant to a
contract that it shall belong to the owner [Valdez v. Central
Altagracia, Inc.].
6. ‘Animal houses, pigeon-houses, beehives,
fishponds 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.’
The “houses” referred to here may already be deemed
included in paragraph 1 when speaking of “constructions of all
kinds adhered to the soil.”
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, as in the case of a homing pigeon.
Page 5 of 121
When the animals inside the permanent animal houses
are alienated onerously or gratuitously, it is believed that the
transaction is an alienation of personal property, unless the building
or the tenement is itself also alienated. This is because in said
alienation, the animal structures must of necessity be detached
from the immovable. Hence, an ordinary inter vivos donation of a
pigeon-house need not be in a public instrument.
7. ‘Fertilizer actually used on a piece of land.’
Fertilizers still in the barn and even those already on the
ground but wrapped inside some newspapers or any other covering
are still to be considered personal property, for they have not yet
been “actually” used or spread over the land.
8. ‘Mines, quarries, and slag dumps while the
matter thereof forms part of the bed, and waters,
either running or stagnant.’
Mines, including the minerals still attached thereto, are
real properties, but when the minerals have been extracted, the
latter become chattels.
“Slag dump’’ is the dirt and soil taken from a mine and
piled upon the surface of the ground. Inside the “dump’’ can be
found the minerals.
The “waters” referred to are those still attached to or
running thru the soil or ground. But “water” itself as distinguished
from “waters,” is clearly personal property. Upon the other hand,
canals, rivers, lakes, and such part of the sea as may be the object
of appropriation, are classified as real property.
9. ‘Docks and structures which, though floating, are
intended by their nature and object to remain at
a fixed place on a river, or coast.’
A floating house tied to a shore or bank post and used as
a residence is considered real property, considering that the
“waters” on which it floats, are considered immovables. In a way,
we may say that the classification of the accessory (the floating
house) follows the classification of the principal (the waters).
However, if the floating house makes it a point to journey from
place to place, it assumes the category of a vessel.
Vessels are considered personal property. As a matter of
fact, they are indeed very movable [Philippine Refining Co., Inc. v.
Jarque]. They may be subject to chattel mortgage.
Fels Energy v. Province of Batangas
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.
10. ‘Contracts for public works, and servitudes and
other real rights over immovable property.’
The properties referred to in paragraph 10 are not
material things but rights, which are necessarily intangible.
It should be noted that the properties or rights referred to
in paragraph 10 are considered real property by analogy, inasmuch
as, although they are not material, they nevertheless partake of the
essential characteristics of immovable property.
C. 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;
(4) In general, all things which can be transported from
place to place without impairment of the real property to which they
are fixed.
Examples:
Paragraph 1 — a fountain pen; a piano; animals.
Paragraph 2 — growing crops for the purposes of the
Chattel Mortgage Law (Sibal v. Valdez, 50 Phil. 512); machinery
placed on a tenement by a tenant who did not act as the agent of the
tenement owner. (Davao Sawmill v. Castillo, 61 Phil. 709).
Sibal v. Valdez
Held: 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 hereinbefore stated, 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."
Paragraph 3 — electricity, gas, light, nitrogen. (See U.S.
v. Carlos, 21 Phil. 543).
Laurel v. Abrogar
Held: The only requirement for a personal property to be the
object of theft under the penal code is that it be capable of appropriation. It
need not be capable of "asportation," which is defined as "carrying away."
Jurisprudence is settled that to "take" under the theft provision of the penal
code does not require asportation or carrying away.
Appropriation of forces of nature which are brought under
control by science such as electrical energy can be achieved by tampering
with any apparatus used for generating or measuring such forces of nature,
wrongfully redirecting such forces of nature from such apparatus, or using
any device to fraudulently obtain such forces of nature. In the instant case,
petitioner was charged with engaging in International Simple Resale (ISR)
or the unauthorized routing and completing of international long distance
calls using lines, cables, antennae, and/or air wave frequency and
connecting these calls directly to the local or domestic exchange facilities
of the country where destined.
Indeed, while it may be conceded that "international long
distance calls," the matter alleged to be stolen in the instant case, take the
form of electrical energy, it cannot be said that such international long
distance calls were personal properties belonging to 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.
Therefore, the business of providing telecommunication and the
telephone service are personal property under Article 308 of the Revised
Penal Code, and the act of engaging in ISR is an act of "subtraction"
penalized under said article. However, the Amended Information describes
the thing taken as, "international long distance calls," and only later
mentions "stealing the business from PLDT" as the manner by which the
gain was derived by the accused. In order to correct this inaccuracy of
Page 6 of 121
description, this case must be remanded to the trial court and the
prosecution directed to amend the Amended Information, to clearly state
that the property subject of the theft are the services and business of
respondent PLDT.
Paragraph 4 — machinery not attached to land nor
needed for the carrying on of an industry conducted therein;
portable radio; a laptop computer; a diploma hanging on the wall.
Laud v. People
Held: "Personal property" in the foregoing context actually
refers to the thing’s mobility, and not to its capacity to be owned or
alienated by a particular person. Article416 of the Civil Code, which Laud
himself cites, states that in general, all things which can be transported from
place to place are deemed to be personal property. Considering that human
remains can generally be transported from place toplace, and considering
further that they qualify under the phrase "subject of the offense" given that
they prove the crime’s corpus delicti, it follows that they may be valid
subjects of a search warrant under the above-cited criminal procedure
provision. Neither does the Court agree with Laud’s contention that the
term "human remains" is too all-embracing so as to subvert the particular
description requirement. Asthe Court sees it, the description points to no
other than the things that bear a direct relation to the offense committed,
i.e., of Murder. It is also perceived that the description is already specific as
the circumstances would ordinarily allow given that the buried bodies
would have naturally decomposed over time. These observations on the
description’s sufficient particularity square with the Court’s pronouncement
in Bache and Co., (Phil.), Inc. v. Judge Ruiz, wherein it was held:
A search warrant may be said to particularly describe the things
to be seized when the description therein is as specific as the circumstances
will ordinarily allow(People v. Rubio, 57 Phil. 384 [1932]); or when the
description expresses a conclusion of fact — not of law — by which the
warrant officer may be guided in making the search and seizure (idem.,
dissent of Abad Santos, J.); or when the things described are limited to
those which bear direct relation to the offense for which the warrant is
being issued(Sec. 2, Rule 126, Revised Rules of Court) x x x If the articles
desired to be seized have any direct relation to an offense committed, the
applicant must necessarily have some evidence, other than those articles, to
prove the said offense; and the articles subject of search and seizure should
come in handy merely to strengthen such evidence. (Emphases supplied)58
Consequently, the Court finds that the particular description
requirement – both as to the place to be searched and the things to be seized
– had been complied with.
1. Three Tests to Determine whether property Is
Movable or Immovable Manresa mentions three
tests:
(a) If the property is capable of being carried from
place to place (test by description);
(b) If such change in location can be made without
injuring the real property to which it may in the
meantime be attached (test by description); and
(c) If finally, the object is not one of those enumerated
or included in Art. 415 (test by exclusion). Then
the inevitable conclusion is that the property is
personal property.
NOTE: Test by exclusion is superior to the test by
description.
2. Other Kinds of Movable Property
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.
a. “Obligations and actions which have for
their object movables or demandable
sums.’’
The term obligations really refers to ‘credits’ and also
includes bonds, which are technically obligations of the entity
issuing them.
Actions – if somebody steals my car, my right to bring
action to recover the automobile is personal property by itself. A
promissory note (IOU) is personal property, the right to collect is
also a personal property.
b. Shares of stock of agricultural, commercial,
and industrial entities, although they may
have real estate.”
Shares of stock are a peculiar kind of personal property,
and are unlike other classes of personal property in that the
property right of shares of stock can only be exercised or enforced
where the corporation is organized and has its place of business,
and can exist only as an incident to and connected with the
corporation, and this class of property is inseparable from the
domicile of the corporation itself [Black Eagle Mining Co. v.
Conroy].
A share of stock in a gold mining corporation is personal
property; but the gold mine itself, as well as any land of the
corporation, is regarded as real property by the law. The certificate
itself evidencing ownership of the share, as well as the share itself,
is regarded as personal property. Being personal, it may be the
object of a chattel mortgage [Chua Guan v. Samahang Magsasaka,
Inc].
3. Consumable and Non-Consumable Properties
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.
Consumable are those which cannot be used according to
its nature without its being consumed. Non-consumable are any
other kind of movable property.
D. PROPERTY IN RELTION TO THE PERSON TO
WHOM IT BELONGS
Article 419. Property is either of public dominion or of
private ownership.
1. Property of Public Dominion
Article 420. The following things are property of public
dominion:
(1) Those intended for public use, such as road, 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
national wealth.
Page 7 of 121
Public dominion means ownership by the State in that the
State has control and administration; in another sense, public
dominion means ownership by the public in general, in that not
even the State or subdivisions thereof may make them the object of
commerce as long as they remain properties for public use.
The State may own properties both in its public capacity
and private capacity (patriominal). Patrimonial property are
properties owned by the State in its private capacity or in the
course of its proprietary functions.
Concept of Jura Regalia
The regalia doctrine is enshrined in our present
Constitution. Section 2 paragraph 1, Article XII of the 1987
Constitution states:
Pursuant to the Regalian Doctrine, all lands of the
public domain belong to the State. Hence, "[a]ll lands not
appearing to be clearly under private ownership are presumed to
belong to the State. Also, public lands remain part of the
inalienable land of the public domain unless the State is shown
to have reclassified or alienated them to private persons." To
prove that a land is alienable, the existence of a positive act of
the government, such as presidential proclamation or an
executive order; an administrative action; investigation reports
of Bureau of Lands investigators; and a legislative act or a
statute declaring the land as alienable and disposable must be
established [Republic v. Cortes, Sr].
In Cruz v. DENR, it was held that the Regalian Doctrine
does not negate native titles.
The land has been held by individuals under a claim of
private ownership. It will be presumed to have been held in private
even before the Spanish conquest independent of any grant of the
Spanish crown [Carino v. Insular Government].
1. Three Kinds of Property of Public Dominion
a. For public use
Public use is “use that is not confined to privileged
individuals, but is open to the indefinite public [Villarico v.
Sarmiento]. To constitute public use, the public in general should
have equal or common rights to use the land or facility involved on
the same terms, however limited in the number of people who can
actually avail themselves of it at a given time [Republic v.
Gonzales].
In Villanueva v. Castañeda, Jr., citing Espiritu v.
Municipal Council of Pozorrubio, the Court pronounced that town
plazas are properties of public dominion, to be devoted to public
use and to be made available to the public in general. They are
outside the commerce of man and cannot be disposed of or even
leased by the municipality to private parties.
Domalsin v. Valenciano
Held: At the outset, it must be made clear that the property
subject of this case is a portion of the road-right-of way of Kennon Road
which is located in front of a parcel of land that petitioner bought by way of
Deed of Waiver and Quitclaim from Castillo Binay-an. The admission of
petitioner in his Amended Complaint that respondents started constructing a
building within the Kennon Road road-right-of-way belies his claim that
the lot in question is his.
In light of this exposition, it is clear that neither the petitioner
nor the respondents can own nor possess the subject property the same
being part of the public dominion.
 Villarico v. Sarmiento
Held: 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 herein petitioner.  In fact, its
use by the public is by mere tolerance of the government through the
DPWH.  Petitioner cannot appropriate it for himself.  Verily, he cannot
claim any right of possession over it.  the Authority in any way consistent with this Order, including such
LRTA v. Quezon City
Held: The LRTA operations and properties of public
dominion are devoted to public use and public welfare, hence, are
owned by the Republic of the Philippines, and for legal and socially
significant reasons, are exempt from real property taxes and the means
to collect such taxes.
--------------------------------------------
The analysis provided by the En Banc decision in MIAA v. CA
fully demonstrates that LRTA is not engaged in a profit-earning business
like a private corporation. LRTA v. CBOA held that LRTA was engaged in
an ordinary business because it was charging fees for the use of its
properties. This reasoning no longer holds water. We adopt in full the
disquisition of the En Banc in MIAA v. CA:
The Airport Lands and Buildings are devoted to public use
because they are used by the public for international and domestic travel
and transportation. The fact that the MIAA collects terminal fees and other
charges from the public does not remove the character of the Airport Lands
and Buildings as properties for public use. The operation by the
government of a tollway does not change the character of the road as one
for public use. Someone must pay for the maintenance of the road, either
the public indirectly through the taxes they pay the government, or only
those among the public who actually use the road through the toll fees they
pay upon using the road. The tollway system is even a more efficient and
equitable manner of taxing the public for the maintenance of public roads.
The charging of fees to the public does not determine the
character of the property whether it is of public dominion or not. Article
420 of the Civil Code defines property of public dominion as one "intended
for public use." Even if the government collects toll fees, the road is still
"intended for public use" if anyone can use the road under the same terms
and conditions as the rest of the public. The charging of fees, the limitation
on the kind of vehicles that can use the road, the speed restrictions and
other conditions for the use of the road do not affect the public character of
the road.
The terminal fees MIAA charges to passengers, as well as the
landing fees MIAA charges to airlines, constitute the bulk of the income
that maintains the operations of MIAA. The collection of such fees does not
change the character of MIAA as an airport for public use. Such fees are
often termed user's tax. This means taxing those among the public who
actually use a public facility instead of taxing all the public including those
who never use the particular public facility. A user's tax is more equitable
— a principle of taxation mandated in the 1987 Constitution.
Verily, MIAA v. CA relevantly addresses the present social
milieu which the provision of public transportation plays in the lives of our
people. Indeed, with so much public expenses to take care of, the
government cannot be left alone to fully fund all public services which are
essential to the viability of our communities, most especially our means of
public transportation. Hence, the mere fact that consumers must pay all, or
in the case of the operations of our light rail transit, some of the expenses,
should not detract from the nature of the service the government entity
offers or the characterization of all the infrastructure which the operations
require.
To be sure, the LRTA and its properties are tasked to establish
the light rail transit in the country. To pursue this mandate and purpose, the
LRTA pioneered the construction of light rail transit infrastructure, which
was financed through foreign loans. The revenues from the LRTA
operations were designed to pay for the loans incurred for its construction.
The LRTA operations were intended as a public utility rather than as a
profit-making mechanism. The income which the LRTA generates is being
used for its operations, especially the maintenance of rail tracks and trains.
Section 2 of EO 603 provides for the re-capitalization of excess revenues
Page 8 of 121
and for such other purposes that will enhance the LRTA's mandate and
purpose:
The Authority shall conduct its business, according to prudent
commercial principles and shall ensure, as far as possible, that its revenues
for any given year are, at least sufficient to meet its expenditures. Any
excess of revenues over expenditure in any fiscal year may be applied by
provisions for the renewal of capital assets and the repayment of loans, as
the Authority may consider prudent.
Based on an independent 2008-2009 field survey report, the
LRTA income barely covered costs for operating expenses. The operating
profit from the operation of Lines 1 and 2 was in a deficit. Reasons for plus
net income in certain years were due to foreign exchange gain and infusion
of subsidies from the government.
As both a matter of social data and acceptable legal reasoning, it
is erroneous to conclude that to date, the LRTA has been engaged in profit-
making business. More than ever, its gargantuan tasks are to establish and
operate a viable public transportation system via the light rail trains to
address the demands of the riding public and to alleviate the worsening
traffic and transportation situation at least in Metro Manila.
Given the mandate and purpose of the LRTA, it stands to reason
that the LRTA's railroads, carriageways, terminal stations, and the lots on
which they are found and/or constructed are properties of public dominion
intended for public use. As such, they are exempt from real property tax
under Section 234 (a) of the Local Government Code.
City of Lapu-Lapu v. Phil. Economic Zone Authority teaches:
Properties of public dominion are outside the commerce of man.
These properties are exempt from "levy, encumbrance or disposition
through public or private sale. As this court explained in Manila
International Airport Authority:
Properties of public dominion, being for public use, are not
subject to levy, encumbrance or disposition through public or private sale.
Any encumbrance, levy on execution or auction sale of any property of
public dominion is void for being contrary to public policy. Essential public
services will stop if properties of public dominion are subject to
encumbrances, foreclosures and auction sale.
On the other hand, all other properties of the state that are not
intended for public use or are not intended for some public service or for
the development of the national wealth are patrimonial properties. Article
421 of the Civil Code of the Philippines provides:
Art. 421. All other property of the State, which is not of the
character stated in the preceding article, is patrimonial property.
Patrimonial properties are also properties of the state, but the
state may dispose of its patrimonial property similar to private persons
disposing of their property. Patrimonial properties are within the commerce
of man and are susceptible to prescription, unless otherwise provided.
MIAA v. CA identifies the locus of ownership of properties of
public dominion for public use - the Republic of the Philippines. If any of
these properties are titled in the name of specific government entities, the
latter only hold the legal title for the ultimate benefit of the Republic and
the sovereignty.
The light rail transit system is one of the major means of
transportation in Metro Manila. The bulk of public commuters takes the
light rail transit to go to and from their residences and places of work and
other places of social interaction.
The light rail transit passes along several cities and
municipalities. There are two (2) LRT lines, the green and blue lines. The
Light Rail Transit System Line No. 1 consists of the 15km elevated railway
system servicing the Taft Avenue - Rizal Avenue route between Baclaran,
Pasay City and the Bonifacio Monument in the City of Caloocan. The
Megatren, more popularly known by its generic name Line 2, is a 13.8km
mass transit line that traverses five (5) cities in Metro Manila, namely
Pasig, Marikina, Quezon City, San Juan, and Manila, along the major
thoroughfares of Marcos Highway, Aurora Boulevard, Ramon Magsaysay
Boulevard, Legarda, and Recto Avenue.
Undoubtedly, the light rail transit performs a crucial role in the
lives of the people in Metro Manila. And the fact that by necessary
implication, it has to pass through several local government units, the
protection accorded to properties of public dominion for public use must be
extended to the LRTA and its properties. Taking some or a portion of the
railroads, railways, carriageways, and terminal stations will literally hamper
the operation of the light rail transit. Trains run on the rail tracks which are
fastened to a concrete foundation resting on a prepared subsurface.[44] Like
an airport, the light rail transit has a terminal commonly known as the LRT
station. It is a hub where passengers converge to buy train tickets and
access the train facilities. It is also where the trains regularly stop to load or
unload passengers. These properties are essential for the passenger
transport and continued operation of the light rail transit, without which this
massive transportation system will be paralyzed.
The fact that the LRTA may have entered into transactions with,
short of alienating them, to private parties in relation to the establishment,
operation, maintenance, and viability of a light rail transit in the country,
does not detract from the characterization of the LRTA's properties as
properties of public dominion for public use or public service. What is
important is the role, nexus, and relevance that these properties play in the
public use or public service purposes of the LRTA.
City of Pasig v. Republic
Held: In the present case, the parcels of land are not properties
of public dominion because they are not "intended for public use, such as
roads, canals, rivers, torrents, ports and bridges constructed by the State,
banks, shores, roadsteads." Neither are they "intended for some public
service or for the development of the national wealth." MPLDC leases
portions of the properties to different business establishments. Thus, the
portions of the properties leased to taxable entities are not only subject to
real estate tax, they can also be sold at public auction to satisfy the tax
delinquency.
In sum, only those portions of the properties leased to taxable
entities are subject to real estate tax for the period of such leases. Pasig City
must, therefore, issue to respondent new real property tax assessments
covering the portions of the properties leased to taxable entities. If the
Republic of the Philippines fails to pay the real property tax on the portions
of the properties leased to taxable entities, then such portions may be sold
at public auction to satisfy the tax delinquency.
Philippine Heart Center v. Quezon City
Held: The properties of the PHC are properties of public
dominion devoted to public use and welfare and, therefore, exempt from
real property taxes and levy, without prejudice to the liability of taxable
persons to whom the beneficial use of any of these properties has been
granted
(i) Canals
If the canal is situated within a public property [Bautista
v. Alarcon] or the same is constructed by the State and devoted to
public use, it is a property of public ownership [Santos v. Moreno].
On the other hand, canals constructed by private persons
within their private lands and devoted exclusively for private use
are of private ownership [Ibid]. However, its owner may lose any
right over it by prescription if he allows said canal to be used by
the public for navigation and fishing purposes for a very long
period of time [Mercado v. Municipal president of Macabebe].
(ii) Rivers
Rivers is a composite term which includes (1) running
waters, (2) the bed, and (3) the banks [Binalay v. Manalo]. Since
reivers are of public ownership, it is implicit that all the three
component elements be of the same nature also [Hilario v. City of
Manila].
Fernando v. Acuna
Held: Even assuming that Sapang Bayan was a dried-up creek
bed, under Article 420, paragraph 1 and Article 502, paragraph 1 of the
Civil Code, rivers and their natural beds are property of public dominion.  and then they pass to the public domain [Government v. Cabangis].
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.
Page 9 of 121
We ruled on this issue in Republic v. Court of Appeals, to wit:
The lower court cannot validly order the registration of Lots 1
and 2 in the names of the private respondents. These lots were portions of
the bed of the Meycauayan river and are therefore classified as property of
the public domain under Article 420 paragraph 1 and Article 502, paragraph
1 of the Civil Code of the Philippines. They are not open to registration
under the Land Registration act. The adjudication of the lands in question
as private property in the names of the private respondents is null and void.
Furthermore, in Celestial v. Cachopero, we similarly ruled that a
dried-up creek bed is property of public dominion:
A creek, like the Salunayan Creek, is a recess or arm extending
from a river and participating in the ebb and flow of the sea. As such, under
Articles 420(1) and 502(1) of the Civil Code, the Salunayan Creek,
including its natural bed, is property of the public domain which is not
susceptible to private appropriation and acquisitive prescription. And,
absent any declaration by the government, that a portion of the creek has
dried-up does not, by itself, alter its inalienable character.
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.
(iii) Ports
The term ports in Article 420(1) includes seaports and
airports [MIAA v. Court of Appeals].
PFDA v. CBAA
Held: The Lucena Fishing Port Complex, which is one of the
major infrastructure projects undertaken by the National Government under
the Nationwide Fishing Ports Package, is devoted for public use and falls
within the term "ports."
What about airports?
The Supreme Court has clarified in Manila International
Airport Authorities v. Court appeals:
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. The fact that the MIAA
collects terminal fees and other charges from the public does not
remove the character of the Airport Lands and Buildings as
properties for public use. The operation by the government of a
tollway does not change the character of the road as one for
public use. Someone must pay for the maintenance of the road,
either the public indirectly through the taxes they pay the
government, or only those among the public who actually use
the road through the toll fees they pay upon using the road. The
tollway system is even a more efficient and equitable manner of
taxing the public for the maintenance of public roads.
(iv) Shores and Foreshores
Shore is understood to be that space which is alternately
covered and uncovered by water with the movements of the tides
[Francisco v. Government]. Its interior or terrestrial limit is the line
reached by the highest equinoctial tides [Ibid]. Where the tides are
not appreciable, the shore begins on the landside at the line reached
by the sea during ordinary storms or tempests [Ibid].
Shores are properties of public dominion. Thus, when the
sea advances and private properties are permanently invaded by the
waves, the properties so invaded beome part of the shore or beach
The owner thus dispossessed does not retain any right to the natural
products resulting from their new nature; it is a de facto case of the sea. As such, under Articles 420(1) and 502(1) of the Civil
eminent domain, and not subject to indemnity [Ibid]. Code, the Salunayan Creek, including its natural bed, is property
Foreshore lands are also part of the public dominion of the public domain which is not susceptible to private
appropriation and acquisitive prescription. And, absent any
[Republic v. Court of Appeals]. It is not capable of private
declaration by the government, that a portion of the creek has
appropriation [Manese v. Velasco]. Foreshore land is that part of dried-up does not, by itself, alter its inalienable character
the land immediately in front of the shore; the part which is
between high and low water marks, and alternately covered with  all lands thrown up by the sea and formed by
water and left dry by the flux and reflux of the tides. It is indicated accretion upon the shore by the action of the
by a middle line between the highest and lowest tides [Ponce v. water, together with the adjacent shore
Gomez]. However, the land’s proximity alone to the waters does  lands reclaimed from the sea by the
not necessarily make it a foreshore land [Almagro v. Kwan]. To Government. (Gov’t. v. Cabangis, 53 Phil.
qualify as foreshore land, it must be shown that the land lies 112). When the sea moved towards the estate
between the high and low water marks and is alternately wet and and the tide invaded it, the invaded property
dry according to the flow of the tide [Ibid]. became foreshore land and passed to the realm
Thus, in Republic v. Lensico, the Court held that although of the public domain. In fact, the Court in
the two corners of the subject lot adjoin the sea, the lot cannot be Government vs. Cabangis annulled the
considered as foreshore land since it has not been proven that the registration of land subject of cadastral
lot was covered by water during high tide. In Almagro v. Kwan, proceedings when the parcel subsequently
the Court similarly ruled that when it is clearly proven that the became foreshore land. In another case, the
disputed land remained dry even during high tide, the same is not Court voided the registration decree of a trial
foreshore but private land. court and held that said court had no
jurisdiction to award foreshore land to any
(v) Lakes private person or entity [Republic v. Court of
Natural lakes and lagoons and their beds belong to the Appeals].
State and are part of the public dominion. Lakes and lagoons  the Manila Bay area or coastal area inasmuch
naturally occurring on private lands also belong to the State [Water
as it belongs to the state, and is used as a
Code of the Philippines]. The Laguna de Bay has long been
waterway [Vda. de Villongco v. Moreno].
recognized as a lake [Government v. Colegio de San Jose]. As
 private lands which have been invaded by the
such, the accretion occurring therein, by mandate of Article 84 of
waters or waves of the sea and converted into
the Spanish Law of Waters of 1866, belongs to the owner of the
portions of the shore or beach [Natividad v.
land contiguous thereto [Heirs of Navarro v. IAC].
Director of Lands].
 Military Reservations. In Navy Officer’s
Lakeshore lands vs. Foreshore lands
Village Association v. Republic, the Court ruled
Lakeshore land or lands adjacent to the lake, like the
that parcels of land classified as reservations
lands in question must be differentiated from foreshore land or that
for public or quasi-public uses: (1) are non-
part of the land adjacent to the sea which is alternately covered and
alienable and non-disposable land in view of
left dry by the ordinary flow of the tides. Such distinction draws
C.A. No. 141 specifically declaring them as
importance from the fact that accretions on the bank of a lake, like
non-alienable and not subject to disposition;
Laguna de Bay, belong to the owners of the estate to which they
and (2) they remain public domain lands until
have been added, while accretion on a sea bank still belongs to the
they are actually disposed of in favor of private
public domain, and is not available for private ownership until
persons.
formally declared by the government to be no longer needed for
 Fort Bonifacio remains property of public
public use [Republic v. Castillo].
dominion of the State, because although
(vi) Others of Similar Character declared alienable and disposable, it is reserved
Examples are the following: for some public service or for the development
of the national wealth, in this case, for the
conversion of military reservations in the
 public streams [Com. v. Meneses].
country to productive civilian uses [Dream
 natural beds of rivers [Meneses v.
Village v. BCDA].
Commonwealth].
 Water Works System. In General Mariano
 river channels.
Alvarez Services Cooperative v. NHA, the
 waters of rivers.
Court ruled that water works system in General
 creeks — because “a creek is no other than an
Mariano Alvarez, Cavite, including the three
arm extending from a river” [Mercado v. Mun.
water tanks subject of the assailed writ of
Pres. of Macabebe; Samson v. Dionisio].
execution, is devoted to public use and thus,
property of public dominion.
Furthermore, in Celestial v. Cachopero, the Supreme
 Reclaimed Lands of Public Estates Authority.
Court ruled that a dried-up creek bed is property of public
In Chavez v. PEA, the Court held that foreshore
dominion:
and submerged areas irrefutably belong to the
A creek, like the Salunayan Creek, is a recess or arm public domain and were inalienable unless
extending from a river and participating in the ebb and flow of reclaimed, classified as alienable lands open to

Page 10 of 121
 disposition and further declared to be no longer
needed for public service.
 Road Right of Way. A property used as a road
right of way for the Manila South Expressway
Extension Project, a road devoted for a public
use since it was taken in 1978, is a property of
public dominion [Hi-Lon Manufacturing v.
COA].
b. For public service — like national
government buildings, army rifles, army
vessels (may be used only by duly authorized
persons).
This kind of property includes all property devoted to
public service. In Baguio Citizens Action v, City Council, it was
held that all public buildings constructed by the State for its offices
and functionaries belong to this class.
In Reversion of Reconstituted Title vs. Registry of Deeds,
it was held that properties of LGUs are limited to properties for
public use and patrimonial property. (READ THIS CASE
NALANG).
c. For the development of national wealth —
like our natural resources.
Natural resources are not available for alienation but the
State may enter into co-production, joint venture, or production-
sharing agreements with Filipino citizens, or corporations or
associations at least 60% of whose capital is owned by such
citizens, in connection with the exploration, development and
utilization of the same [Menchavez v. Teves, Jr.].
A watershed reservation [Collado v. Court of Appeals]
and submerged lands [Chavez v. PEA] are part of the State’s
natural resource and cannot therefore be alienated.
2. Characteristics of Properties of Public Dominion
a. They are outside the commerce of man
As such, they cannot be leased, donated, sold, or be the
object of any contract (Mun. of Cavite v. Rojas, 30 Phil. 602),
except insofar as they may be the object of repairs or
improvements and other incidental things of similar character.
In the case of Chavez v. Public Estates Authority and
AMARI Coastal Development Corporation, the Supreme Court
held that 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.
City of Manila v. Garcia
Held: These permits, erroneously labeled "lease" contracts, were
issued by the mayors in 1947 and 1948 when the effects of the war had
simmered down and when these defendants could have very well adjusted
themselves. Two decades have now elapsed since the unlawful entry.
Defendants could have, if they wanted to, located permanent premises for
their abode. And yet, usurpers that they are, they preferred to remain on city
property.
Defendants' entry as aforesaid was illegal. Their constructions
are as illegal, without permits. The city charter enjoins the mayor to
"safeguard all the lands" of the City of Manila.
Surely enough, the permits granted did not "safeguard" the city's
land in question. It is our considered view that the Mayor of the City of
Manila cannot legalize forcible entry into public property by the simple
expedient of giving permits or, for that matter, executing leases.
Page 11 of 121
MIAA v. Court of Appeals
Held: 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
Land Bank v. Cacayuran
Held: Records disclose that the loans were executed by the
Municipality for the purpose of funding the conversion of the Agoo Plaza
into a commercial center pursuant to the Redevelopment Plan. However,
the conversion of the said plaza is beyond the Municipality’s jurisdiction
considering the property’s nature as one for public use and thereby, forming
part of the public dominion. Accordingly, it cannot be the object of
appropriation either by the State or by private persons. Nor can it be the
subject of lease or any other contractual undertaking.
b. 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” [Palanca v. Commonwealth].
“Property of the State or any of its subdivisions not patrimonial in
character shall not be the object of prescription.” (Art. 1113). Even
a city or a municipality cannot acquire them by prescription as
against the State.
c. They cannot be registered under the Land
Registration Law and be the subject of a
Torrens Title
If erroneously included in a Torrens Title, the land
involved remains property of public dominion.
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 [Sps. Morandarte v. Court of Appeals].
Sps Morandarte v. Court of Appeals
Held: 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.
d. They, as well as their usufruct, cannot be
levied upon by execution, nor can they be
attached
Properties of public dominion, being for public use, are
not subject to levy, encumbrance or disposition through public or
private sale. Any encumbrance, levy on execution or auction sale
of any property of public dominion is void for being contrary to
public policy. Essential public services will stop if properties of
public dominion are subject to encumbrances, foreclosures and
auction sale [MIAA v. Court of Appeals].
3. Patrimonial Property
 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.
Patrimonial property of the State is the property it owns
but which is not devoted to public use, public service, or the
development of the national wealth. It is wealth owned by the State
in its private, as distinguished from its public, capacity.
Over this kind of property, the State has the same rights
and has the same power of disposition as private individuals in
relation to their own property, but of course, subject to rules and
regulations. The purpose of this property is in order that the State
may attain its economic ends, to serve as a means for its
subsistence and preservation and in that way to be able to better
fulfill its primary mission." Examples of patrimonial property of
the State are those properties acquired by the government in
execution or tax sales and mangrove lands and mangrove swamps.
Even public agricultural lands that are made alienable and
disposable by the State are considered patrimonial properties. In
fact, in our jurisprudence, despite dealing with the management of
water, which is a natural resource and an essential public utility,
waterworks have been categorized as property owned by municipal
corporations in their proprietary character [PNOC Alternative
Fuels v. NGCP].
The property of private ownership or patrimonial
property of the State may be sub-classified into: (1) by nature or
use or those covered by Article 421, which are not property of
public dominion or imbued with public purpose based on the
State’s current or intended use; and (2) by conversion or those
covered by Article 422; which previously assumed the nature of
property of public dominion by virtue of the State’s use, but which
are no longer being used or intended for said purpose. Since those
properties could only come from property of public dominion as
defined under Article 420, converted patrimonial property of the
State are separate from and not a subset of patrimonial property by
nature or user under Article 421 [Republic v. Alejandre].
In order to convert property of public dominion into
patrimonial property, there must be an affirmative act, either on the
part of executive or the legislative, to reclassify property of the
public dominion into patrimonial. The intention to reclassify must
be clear, definite and must be based on correct legal premises.
Hence, the conversion can no longer be inferred from the non-use
alone of the property for the purpose to which it is intended [Laurel
v. Garcia]. In the case of lands of the public domain, however, a
declaration that property of the public dominion is alienable and
disposable does not ipso facto convert it into patrimonial property
[Heirs of Malabanan v. Republic]. Lands of the public domain
become patrimonial property only when they are no longer
intended for public use or public service or the development of
national wealth [Dumo v Republic]. In turn, the intention that the
property is no longer needed for public use, public service, or the
development of national wealth may only be ascertained through
an express declaration by the State [Heirs of Malabanan v.
Republic]. Accordingly, there must be an express declaration by
the State that the public dominion property is no longer intended
for public service or the development of the national wealth or that
the property has been converted into patrimonial. Without such
express declaration, the property, even if classified as alienable or
disposable, remains property of the public dominion, pursuant to
Page 12 of 121
Article 420(2), and thus incapable of acquisition by prescription. It
is only when such alienable and disposable lands are expressly
declared by the State to be no longer intended for public service or
for the development of the national wealth that the period of
acquisitive prescription can begin to run. Such declaration shall be
in the form of a law duly enacted by Congress or a Presidential
Proclamation in cases where the President is duly authorized by
law [Ibid].
In Faustino Ignacio v. Dir. of Lands, the Supreme Court,
citing Natividad v. Dir. of Lands (CA), said that only the executive
and possibly the legislative departments have the authority and
power to make the declaration that any land so gained by the sea is
not necessary for purposes of public utility, or for the establishment
of special industries or for Coast Guard Service. If no such
declaration has been made by said departments, the lot in question
forms part of the public domain. Consequently, until there is made
a formal declaration on the part of the Government thru the
executive department or the legislature, the parcel in question
continues to be part of the public domain, and cannot be subject to
acquisitive prescription.
It is not for the President to convey valuable real property
of the government on his or her own sole will. Any such
conveyance must be authorized and approved by a law enacted by
the Congress. It requires executive and legislative concurrence
[Laurel v. Garcia].
Dumo v. Republic
Held: The fact that the Republic did not oppose the formal offer
of evidence of Dumo in the RTC does not have the effect of proving or
impliedly admitting that the land is alienable and disposable. The alienable
and disposable character of the land must be proven by clear and
incontrovertible evidence. It may not be impliedly admitted, as Dumo
vehemently argues. It was the duty of Dumo to prove that the land she
sought to register is alienable and disposable land of the public domain.
This burden would have been discharged by submitting the required
documents – a copy of the original classification approved by the DENR
Secretary and certified as a true copy by the legal custodian thereof, and a
certificate of land classification status issued by the CENRO or the PENRO
based on the approved land classification by the DENR Secretary. Without
these, the applicant simply fails to prove that the land sought to be
registered forms part of the alienable and disposable lands of the public
domain and thus, it may not be susceptible to private ownership. As
correctly pointed out by the CA, the land is presumed to belong to the State
as part of the public domain.
PNOC Alternative Fuels v. NGCP
Held: Petitioner PAFC posits the argument that the subject
property is a land of die public domain as it is devoted to public use or
purpose, i.e the development of the petrochemical industry which, it argues,
is a matter of national interest Thus, according to petitioner PAFC, the
subject property is  not private property. Hence, since respondent NGCP is
only allowed to expropriate private property, necessarily, it has no authority
to expropriate the subject property.
The Court disagrees with petitioner PAFC. The subject property,
though owned by a State instrumentality, is considered patrimonial property
that assumes the nature of private property.
First and foremost, it is admitted by all parties that the subject
property, sitting within the Petrochemical Industrial Park, is an industrial
zone. In fact, the crux of petitioner PAFC's Petition is the argument that
since the Petrochemical Industrial Park has been declared by law as an
industrial zone dedicated to the development of the petrochemical industry,
it should be deemed a land dedicated to public use, i.e., a land of public
dominion.
 However, in Republic v. East Silverlane Realty Development
Corp., the Court held that when the subject property therein was
classified by the government as an industrial zone, the subject property
therein "had been declared patrimonial and it is only then that the
prescriptive period began to run."
Further, it is apparent from R.A. No. 10516 and its IRR that the
industrial estate is being owned, managed, and operated by the State, not in
its sovereign capacity, but rather in its private capacity. Simply stated, the
management and operation of the industrial estate is proprietary in
character, serving the economic ends of the State.
P.D. No. 949, as amended by R.A. No. 10516, calls for the
development of the industrial estate by introducing "business activities
that will promote its best economic use." In addition, in the IRR of the
said law, the Petrochemical Industrial Park was described as an industrial
and commercial estate, wherein private sector investment is encouraged in
the development of "industrial and commercial activities/enterprises in
said Industrial Estate." According to the IRR, the industrial estate may be
used in any manner to achieve its best economic use, allowing "any activity
or series of activities regularly engaged in as a means of livelihood or with
a view to profit." Hence, it is crystal clear that the management of the land
where the subject property is located is commercial in nature and that the
State, through petitioner PAFC, is operating the said property in
its proprietary capacity, in order to serve economic, and not sovereign,
ends.
Petitioner PAFC's insistence that the petrochemical industry is
an industry endowed with national interest is unconvincing. The sheer fact
that one of the allowable activities inside the industrial estate pertains to the
development of the petrochemical industry is not enough to characterize the
subject property as land of the public domain. To reiterate, the Court has
previously characterized waterworks as patrimonial property despite the
fact that such properties deal with the management of an important natural
resource and an essential public utility, for the reason that the operations of
waterworks by municipal corporations are often in the nature of a business
venture. In the instant case, it is apparent from P.D. No. 949, as amended by
R.A. No. 10516, that the Petrochemical Industrial Park is intended and
accordingly devoted by law as a commercial and business venture.
Furthermore, as already discussed at length, the defining
characteristic of land of public domain is inalienability. To reiterate, upon
the explicit declaration of alienability and disposability, the land ceases to
possess the characteristics inherent in properties of public dominion,
namely, that they are outside the commerce of man, cannot be acquired by
prescription, and cannot be registered under the land registration law, and
accordingly assume the nature of patrimonial property of the State, that is
property owned by the State in its private capacity. Hence, an express
declaration of alienability and disposability by the State negates the
characterization of property as land of public dominion.
Applying the foregoing in the instant case, the laws governing
the subject property have unequivocally declared that the subject property
is alienable, disposable, appropriable, may be conveyed to private
persons or entities, and is subject to private rights.
Under P.D. No. 949, the Petrochemical Industrial Park
was explicitly made alienable and disposable for lease, sale, and
conveyance to private entities or persons for the conduct of related
industrial activities”
Section 2. The Philippine National Oil Company shall manage,
operate and develop the said parcel of land as a petrochemical industrial
zone and will establish, develop and operate or cause the establishment,
development and operation thereat of petrochemical and related industries
by itself or its subsidiaries or by any other entity or person it may deem
competent alone or in joint venture; Provided, that, where any
petrochemical industry is operated by private entities or persons, whether or
not in joint venture with the Philippine National Oil Company or its
subsidiaries, the Philippine National Oil Company mav lease, sell and/or
convey such portions of the petrochemical industrial zone to such
private entities or persons.
The alienable and disposable nature of the Petrochemical
Industrial Park was further expanded when P.D. No. 949 was subsequently
amended by R.A. No. 10516. The said law allowed the lease, sale, and
conveyance of the Petrochemical Industrial Park for purposes
of commercial utilization by private sector investors:
Page 13 of 121
SECTION 2. Purpose of Land Use. - The PNOC shall manage,
operate and develop the said parcel of land as an industrial zone and will
establish, develop and operate or cause the establishment, development and
operation thereat of petrochemical and related industries, as well as of
businesses engaged in energy and energy-allied activities or energy-related
infrastructure projects, or of such other business activities that will
promote its best economic use, as determined by the PNOC Board of
Directors, by itself or its subsidiaries or by any other entity or person it may
deem competent alone or in joint venture: Provided, That, where any
petrochemical or energy-related industry or any such other business as
determined by the PNOC is operated by private entities or persons,
whether or not in joint venture with the PNOC or its subsidiaries, the
PNOC may lease, sell and/or convey such portions of the industrial
zone to such private entities or persons.
Petitioner PAFC's argument that the subject property is strictly
confined and restricted to the development of the petrochemical industry is
manifestly erroneous. The law itself unequivocally allows the establishment
of businesses engaged in energy and energy-allied activities or energy-
related infrastructure projects, which obviously includes the establishment
of transmission towers. The law permits, and even highly encourages, the
conduct of commercial activities in the industrial estate by allowing the
transfer of the subject property to private investors.
Hence, with the subject property expressly declared by law, i.e.,
P.D. No. 949, as amended by R.A. No. 10516, to be an industrial and
commercial estate that may be transferred or conveyed to private
persons so that business activities may be conducted therein, there is no
doubt in the mind of the Court that the subject property is patrimonial
property. In other words respondent NGCP has the authority under Section
4 of R.A. No. 9511 to expropriate the subject property.
International Hardwood v. University of the
Philippines
Held: Under Proclamation No. 791, dated 25 September 1961, a
parcel of land of the public domain described therein, with an area of 3,500
hectares, which is the very parcel of land subject of R.A. No. 3990, was
withdrawn from sale or settlement and was reserved for the College of
Agriculture of the UP as experiment station for the proposed Dairy
Research and Training Institute and for research and production studies of
said college, subject however to private rights, if any, and to the condition
that the disposition of timber and other forest products found thereon shall
be subject to forestry laws and regulations.
The above reservation is within the area covered by petitioner's
timber license.
Pursuant, however, to R.A. No. 3990 which establishes a central
experiment station for the use of the UP in connection with its research and
extension functions, particularly by the College of Agriculture, College of
Veterinary Medicine and College of Arts and Sciences, the above
"reserved" area was "ceded and transferred in full ownership to the
University of the Philippines subject to any existing concessions, if any."
When it ceded and transferred the property to UP, the Republic
of the Philippines completely removed it from the public domain and, more
specifically, in respect to the areas covered by the timber license of
petitioner, removed and segregated it from a public forest; it divested itself
of its rights and title thereto and relinquished and conveyed the same to the
UP; and made the latter the absolute owner thereof, subject only to the
existing concession. That the law intended a transfer of the absolute
ownership is unequivocally evidenced by its use of the word "full" to
describe it. Full means entire, complete, or possessing all particulars, or not
wanting in any essential quality. 11 The proviso regarding existing
concessions refers to the timber license of petitioner. All that it means,
however, is that the right of petitioner as a timber licensee must not be
affected, impaired or diminished; it must be respected. But, insofar as the
Republic of the Philippines is concerned, all its rights as grantor of the
license were effectively assigned, ceded and conveyed to UP as a
consequence of the above transfer of full ownership. This is further home
out by Section 3 of R.A. No. 3990 which provides, inter alia, that "any
incidental receipts or income therefrom shall pertain to the general fund of
the University of the Philippines. Having been effectively segregated and
removed from the public domain or from a public forest and, in effect,
converted into a registered private woodland, the authority and jurisdiction
of the Bureau of Forestry over it were likewise terminated. This is obvious
from the fact that the condition in Proclamation No. 971 to the effect that
the disposition of timber shall be subject to forestry laws and regulations is
not reproduced iii R.A. No. 3990. The latter does not likewise provide that
it is subject to the conditions set forth in the proclamation. An owner has
the right to enjoy and dispose of a thing without other limitations than those
established by law. The right to enjoy includes the jus utendi or the right to
receive from the thing what it produces, and the jus abutendi or the right to
consume the thing by its use.13 As provided for in Article 441 of the Civil
Code, to the owner belongs the natural fruits, the industrial fruits and the
civil fruits. There are, however, exceptions to this rules, as where the
property is subject to a usufruct, in which case the usufructuary gets the
fruits.14 In the instant case, that exception is made for the petitioner as
licensee or grantee of the concession, which has been given the license to
cut, collect, and remove timber from the area ceded and transferred to UP
until I February 1985.1âwphi1 However, it has the correlative duty and
obligation to pay the forest charges, or royalties, to the new owner, the UP,
at the same rate as provided for in the Agreement. The charges should not
be paid anymore to the Republic of the Philippines through the Bureau of
Internal Revenue because of the very nature of the transfer as aforestated.
Consequently, even the Bureau of Internal Revenue automatically lost its
authority and jurisdiction to measure the timber cut from the subject area
and to collect forestry charges and other fees due thereon.
4. Property of Provinces, Cities, and Municipalities
Article 423. The property of provinces, cities, and
municipalities is divided into property for public use and patrimonial
property.
Article 424. Property for public use, in the provinces, cities
and municipalities consist of the provincial roads, city streets, the
squares, fountains, public waters, promenades, and public works for
public service paid for by said provinces, cities or municipalities.
All other property possessed by any of them is patrimonial
and shall be governed by this Code, without prejudice to the provisions
of special laws.
Properties of Political Subdivisions are:
(a) Property for public use
(b) Patrimonial property
The properties of public dominion of the local
government are the following: (1) those expressly enumerated in
paragraph 1 of Article 424 as intended for public use, such as
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; and (2)
those not expressly enumerated in the first paragraph of Article 424
but devoted to public and governmental purposes, such as local
administration, public education and public health. On the other
hand, these properties not enumerated in paragraph 1 of Article 424
and owned by the province, city or municipality in its private or
proprietary capacity are classified as patrimonial [Sangguniang
Panlalawigan v. Garcia, Jr.].
In province of Zamboanga del Norte v. City of
Zamboanga, properties for the free and indiscriminate use of
everyone are classified under the Civil Code as for public use,
while all other properties are patrimonial in nature. In contrast,
under the Municipal Corporations Law norm, to be considered
public property, it is enough that a property is held and devoted to a
governmental purpose, such as local administration, public
education, and public health. Nonetheless, the Court clarified that
Page 14 of 121
the classification of properties in the municipalities, other than
those for public use, as patrimonial under Article 424, is without
prejudice to the provisions of special laws, holding that the
principles obtaining under the Law of Municipal Corporations can
be considered as special laws.
Apparently under Article 424, the basis of the
classification would be the use, however, in Salas v. Jarencio, L-
29788, Aug. 30, 1972, the Supreme Court ruled that the National
Government still controls the disposition of properties of political
subdivisions (regardless of the use to which they are devoted)
provided that the properties CAME FROM THE STATE. The
Court further said that in the absence of proof that the province,
city, or municipality acquired the properties with their own funds,
we should PRESUME that they really had come from the State.
Thus, it can be said that properties of provinces, cities, and
municipalities may also be classified into the following:
a. those acquired with their own funds (in their private
or corporate capacity) — here the political
subdivision has ownership and control.
b. those which do not fall under (a) — 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
(whether the purpose of the property is
governmental or proprietary). Reason the political
subdivision owes its creation to the State. It is the
State’s agents, or subdivision, or instrumentality for
the purposes of local administration.
In Province of Zamboanga del Norte v. City of
Zamboanga, the Court ruled that the lots used as capitol site,
school sites and its grounds, hospital, and leprosarium sites and the
high school playground sites – a total of 24 lots – since these were
held by the former Zamboanga province in its governmental
capacity and therefore subject to the absolute control of Congress.
In Sangguniang Panlalawigan of Bataan v. Province of
Bataan, the Court ruled that since the subject property is devoted to
public education the same is classified as public and Congress has
absolute control over it; and that the property of the public domain,
although titled to the local government, is held by it in trust for the
State. Hence, the local government holds the subject property
subject to the paramount power of the legislature to dispose of the
same, for after all it owes its creation to it as an agent for the
performance of a part of its public work, the local government
being but a subdivision or instrumentality thereof for purposes of
local administration. Accordingly, the legal situation is the same as
if the State itself holds the property and puts it to a different use.
5. Private Properties
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.
Other private properties are those that belong to private
persons: individually or collectively. Incidentally, by virtue of
Article 425, the Code recognizes the rights to private property.
“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 acquire properties.
E. PROVISIONS COMMON TO THE THREE
PRECEDING CHAPTERS
Article 426. Whenever by provision of the law, or an
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 Chapter 1 and in Chapter 2.
Whenever the word “muebles,” or “furniture,” is used alone,
it shall not be deemed to include money, credits, commercial securities,
stocks, and bonds, jewelry, scientific or artistic collections, books,
medals, arms, clothing, horses or carriages and their accessories,
grains, liquids, and merchandise, or other things which do not have as
their principal object the furnishing or ornamenting of a building,
except where from the context of the law, or the individual declaration,
the contrary clearly appears.
The word ‘muebles’ is used synonymously with
“furniture.” Note that furniture has generally for its principal object
the furnishing or ornamenting of a building. Found in the old Code,
the use of “muebles” was retained by the Code Commission,
evidently because many people are acquainted with its meaning.
(See 1 Capistrano, Civil Code, p. 371). Note the enumerations of
things which are not included in the term “furniture.”
II
OWNERSHIP
A. OWNERSHIP IN GENERAL
Article 427. Ownership may be exercised over things or
rights.
Ownership, Defined in the Civil Code does not define
ownership. Instead, the Code simply enumerates the rights which
are included therein, as follows:
(1) the right to enjoy the property (Art. 428, par. 1,
NCC);
(2) the right to dispose the property (Art. 428, par. 1,
NCC);
(3) the right to recover the property from any holder or
possessor (Art. 428, par. 2, NCC);
(4) the right to exclude any person from enjoyment and
disposal of the property (Art. 429, NCC);
(5) the right to enclose or fence the land or tenement
(Art. 430, NCC);
(6) the right to demand indemnity for damages suffered
due to lawful interference by a third person to avert
an imminent danger (Art. 432, NCC);
(7) the right to just compensation in case of eminent
domain (Art. 435, NCC);
(8) the right to construct any works or make any
plantations and excavations on the surface or
subsurface of the land (Art. 437, NCC);
(9) the right to hidden treasure found in the owner’s
property (Art. 438, NCC); and
(10) the right to accessions. (Art. 440, NCC)
At least, in our jurisdiction, the more acceptable
definition of ownership is that given by Justice J.B.L. Reyes. He
Page 15 of 121
defines ownership as “an independent right of exclusive enjoyment
and control of the thing for the purpose of deriving therefrom all
advantages required by the reasonable needs of the owner (holder
of the right) and the promotion of the general welfare but subject to
the restrictions imposed by law and the right of others.”
B. RIGHT TO ENJOY, DISPOSE AND RECOVER
Article 428. The owner has the right to enjoy and dispose of
a thing, without other limitations than those established by law.
The owner has also a right of action against the holder and
possessor of the thing in order to recover it.
1. Right to Enjoy and Dispose
In Roman Law, the attributes of ownership are the
following: (1) jus utendi or the right to use property without
destroying its substance; (2) jus fruendi or the right to the fruits; (3)
jus disponendi or the right to dispose or alienate; (4) jus abutendi
or the right to abuse or to consume the thing by its use; (5) jus
possidendi or the right to possess; and (6) jus vindicandi or the
right to recover.
Reyes v. Chung
Held: In an extrajudicial foreclosure of real property, the
purchaser becomes the absolute owner thereof if no redemption is made
within one year from the registration of the certificate of sale by those
entitled to redeem. Being the absolute owner, he is entitled to all the rights
of ownership over a property recognized in Article 428 of the New Civil
Code, not the least of which is possession, or jus possidendi.
Possession being an essential right of the owner with which he is
able to exercise the other attendant rights of ownership, after consolidation
of title, the purchaser in a foreclosure sale may demand possession as a
matter of right. Thus, Section 7 of Act No. 3135, as amended, imposes
upon the RTC a ministerial duty to issue a writ of possession to the new
owner upon a mere ex parte motion.
PNB v. Sps. Bacani
Held: In extrajudicial foreclosures of real estate mortgage, the
debtor, his or her successors-in-interest, or any judicial creditor or judgment
creditor of said debtor, is granted a period of one (l) year within which to
redeem the property. The redemption period is reckoned from the
registration of the certificate of sale with the Register of Deeds. [43] When the
debtor, or the successors-in-interest as the case may be, fails to redeem the
property within the prescribed statutory period, the consolidation of
ownership in favor of the purchaser becomes a matter of right. At that
point, the purchaser becomes the absolute owner of the property, and may,
as a necessary consequence, exercise all the essential attributes of
ownership.
The effect of the consolidation of title over a foreclosed property
was satisfactorily explained by the Court in Spouses Marquez v. Spouses
Alindog, as follows:
It is thus settled that the buyer in a foreclosure sale becomes
the absolute owner of the property purchased if it is not redeemed
during the period of one year after the registration of the sale. As such,
he is entitled to the possession of the said property and can demand it
at any time following the consolidation of ownership in his name and
the issuance to him of a new transfer certificate of title. The buyer can in
fact demand possession of the land even during the redemption period
except that he has to post a bond in accordance with Section 7 of Act no.
3135, as amended. No such bond is required after the redemption period of
the property is not redeemed. Possession of the land then becomes an
absolute right of the purchaser as confirmed owner. Upon proper
application and proof of title, the issuance of the writ of possession
becomes a ministerial duty of the court.
In this case, PNB's certificate of sale was registered on October
10, 1986 and one (1) year lapsed from this date without the Spouses Bacani
exercising their right to redeem the subject property. [47] Due to the
unfortunate failure of the Spouses Bacani to exercise their redemption right,
the title of Rodolfo over the subject property was cancelled and TCT No. T-
185028 was issued in the name of PNB. At this point, PNB became the
absolute owner of the property and Rodolfo, as well as his wife, lost all
their rights and interests over it. Verily, PNB not only had the right to its
possession, but also all the other rights considered as essential attributes of
ownership—including the right to dispose or alienate the subject property.
The Court notes that when the Spouses Bacani made its initial
offer to repurchase the subject property on August 26, 1991,[51] almost four
(4) years passed since the redemption period expired on October 10, 1987.
Thus, by the time the parties started negotiating the Spouses Bacani's
reacquisition of the subject property, PNB was already the absolute owner.
On this point, Article 428 of the Civil Code explicitly states that:
ART. 428. The owner has the right to enjoy and dispose of a
thing, without other limitations than those established by law.
x x x x (Emphases and underscoring Ours)
Clearly, PNB had full discretion as to the terms and
conditions relating to the disposition of the subject property. PNB
cannot be compelled to sell the subject property to specific persons without
its consent. Neither may the courts enjoin nor nullify the alienation of the
property on grounds other than those established by law.[52]
The Spouses Bacani, however, anchored their claim on PNB
SEL Circular No. 8-7/89, which embodied the bank's policy of giving
priority to former owners in the disposition of its acquired assets. But when
the circular was issued on November 29, 1989, the redemption period
has expired and the title over the subject property was already
consolidated in favor of PNB as its purchaser during the foreclosure
sale. For this reason, any offer on the part of the Spouses Bacani is merely
an offer to repurchase, and PNB was not statutorily or contractually bound
to accept such offer.
While it was similarly alleged that the Spouses Bacani started
negotiating with PNB for the reacquisition of the property as early as 1988,
or before the issuance of PNB's certificate of title, it remains undisputed
that they failed to redeem the property within the prescribed period for
redemption. Consequently, the Spouses Bacani were divested of their rights
over the subject property. The subsequent issuance of a final deed of sale to
PNB merely confirmed the title that was earlier vested in the bank.
Since it is undisputed that the Spouses Bacani failed to exercise
their right of redemption within the prescribed period, the Court cannot
uphold. their assertion that PNB's policy of preference should allow them to
repurchase the property unconditionally. The Court's ruling in GE Money
Bank, Inc. v. Spouses Dizon is instructive on this matter:
The right to redeem of the Spouses Dizon already expired on
October 18, 1994. Thereafter, their offer should aptly be termed as a
repurchase, not redemption. The Bank is not bound by the bid price, at
the very least, and has the discretion to even set a higher price. As We
explained:
The right to redeem becomes functus officio on the date of its
expiry, and its exercise after the period is not really one of redemption but a
repurchase. Distinction must be made because redemption is by force of
law; the purchaser at public auction is bound to accept redemption.
Repurchase, however, of foreclosed property, after redemption period,
imposes no such obligation. After expiry, the purchaser may or may not re-
sell the property but no law will compel him to do so. And, he is not
bound by the bid price; it is entirely within his discretion to set a
higher price, for after all, the property already belongs to him as
owner.
In any case, the issuance of PNB SEL Circular No. 8-7/89 does
not automatically entitle the Spouses Bacani to repurchase the subject
property. The circular was an internal memorandum intended for the
information of bank employees and personnel. It was addressed to the
heads of PNB's offices and branches, to guide them in the disposal and
alienation of the bank's acquired assets. Thus, as an internal bank policy,
the Spouses Bacani do not have a legally enforceable right to be
prioritized over all other buyers of the subject property.
Shipside Incorporated v. Court of Appeals
Held: While Camp Wallace may have belonged to the
government at the time Rafael Galvez's title was ordered cancelled in Land
Registration Case No. N-361, the same no longer holds true today.
Page 16 of 121
Republic Act No. 7227, otherwise known as the Bases
Conversion and Development Act of 1992, created the Bases Conversion
and Development Authority. Section 4 pertinently provides:
Section 4. Purposes of the Conversion Authority. -- The
Conversion Authority shall have the following purposes:
(a) To own, hold and/or administer the military reservations of
John Hay Air Station, Wallace Air Station, O'Donnell Transmitter Station,
San Miguel Naval Communications Station, Mt. Sta. Rita Station
(Hermosa, Bataan) and those portions of Metro Manila military camps
which may be transferred to it by the President;
Section 2 of Proclamation No. 216, issued on July 27, 1993, also
provides:
Section 2. Transfer of Wallace Air Station Areas to the Bases
Conversion and Development Authority. -- All areas covered by the
Wallace Air Station as embraced and defined by the 1947 Military Bases
Agreement between the Philippines and the United States of America, as
amended, excluding those covered by Presidential Proclamations and some
25-hectare area for the radar and communication station of the Philippine
Air Force, are hereby transferred to the Bases Conversion Development
Authority ...
With the transfer of Camp Wallace to the BCDA, the
government no longer has a right or interest to protect. Consequently, the
Republic is not a real party in interest and it may not institute the instant
action. Nor may it raise the defense of imprescriptibility, the same being
applicable only in cases where the government is a party in interest. Under
Section 2 of Rule 3 of the 1997 Rules of Civil Procedure, "every action
must be prosecuted or defended in the name of the real party in interest. "To
qualify a person to be a real party in interest in whose name an action must
be prosecuted, he must appear to be the present real owner of the right
sought to enforced (Pioneer Insurance v. CA, 175 SCRA 668 [1989]). A
real party in interest is the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the avails of the suit. And
by real interest is meant a present substantial interest, as distinguished from
a mere expectancy, or a future, contingent, subordinate or consequential
interest (Ibonilla v. Province of Cebu, 210 SCRA 526 [1992]). Being the
owner of the areas covered by Camp Wallace, it is the Bases Conversion
and Development Authority, not the Government, which stands to be
benefited if the land covered by TCT No. T-5710 issued in the name of
petitioner is cancelled.
Republic v. Bernabe
Held: R.A. 7227 expressly provides that the BCDA is to own,
hold and/or administer the military reservations and other properties
transferred to it.
Given that, under Proc. 163, the CAB Lands were expressly
transferred to the BCDA and the BCDA is empowered to determine their
utilization and disposition, and that under R.A. 7227, BCDA is to own, hold
and/or administer the properties transferred to it, it would seem that the
Republic might have divested its right of dominion over properties that had
been transferred to the BCDA and it would seem that BCDA would be the
real party in interest in this case rather than the Republic.
This was the very ruling of the Court in the 2001 case
of Shipside Incorporated. In that case, the OSG, representing the Republic,
filed a complaint for revival of judgment and cancellation of titles which
had been issued over parcels of land located inside Camp Wallace. Shipside
Incorporated filed a Motion to Dismiss based on the ground, among others,
that the Republic was not the real party in interest because the real property
covered by the Torrens titles sought to be cancelled, allegedly part of Camp
Wallace (Wallace Air Station), were under the ownership and
administration of the BCDA under R.A. 7227.
Limitation on ownership:
a. Imposed by law: Easement of right of way; party
wall; drainage.
b. Imposed by the State: Police power, power of
taxation, eminent domain.
 c. Imposed by owner: In cases of lease, the owner
cannot in the meantime physically occupy the
property.
d. Imposed by grantor: The donor may prohibit the
donee from partitioning the property for a period not
exceeding 20 years.
2. Right to Recover
Undeniably, under the law, jus possidendi is a necessary
incident of ownership. However, the owner cannot exercise this
right to the prejudice of a party whose possession is predicated on a
contract like agency, trust, pledge or lease. A party vested with the
right of possession to the property may set up this right even
against the owner thereof. Under Article 539, every possessor has a
right to be respected in his possession and, if deprived of such
right, the law shall restore it to him [Metro Manila Transit v.DM
Consortium]. Thus, the owners or possessors of a property have no
authority to use force and violence to eject alleged usurpers who
were in prior physical possession of it [Heirs of Laurora v. Sterling
Technopark III].
Without a doubt, the owner of real property is entitled to
the possession thereof as an attribute of his or her ownership. In
fact, the holder of a Torrens Title is the rightful owner of the
property thereby covered, and is entitled to its possession. This
notwithstanding, the owner cannot simply wrest possession thereof
from whoever is in actual occupation of the property [Javelosa v.
Tapus]. If he does, he becomes liable for all the necessary and
natural consequences of his illegal act [Villafuerte v. Court of
Appeals]. Under the law, one who claims to be the owner of a
property possessed by another must bring the appropriate judicial
action for its physical recovery. The term judicial process could
mean no less than an ejectment suit or reivindicatory action, in
which the ownership claims of the contending parties may be
properly heard and adjudicated [Dayot v. Shell Chemical].
Under existing law and jurisprudence, there are three
kinds of actions available to recover possession of real property.
a. Accion Reivindicatoria
Accion reinvindicatoria or accion de reivindicacion is an
action whereby the plaintiff alleges ownership over a parcel of land
and seeks recovery of its full possession [Heirs of Yusingco v.
Busilak]. It is a suit to recover possession of a parcel of land as an
element of ownership [Ocampo v. Heirs of Dionsio]. The judgment
in such a case determines the ownership of the property and awards
the possession of the property to the lawful owner. It is different
from accion interdictal or accion publiciana where the plaintiff
merely alleges proof of better right to possess without claim of title
[Heirs of Yusingco v. Busilak].
If the plaintiff's claim of ownership (and necessarily,
possession or jus possidendi) is based on his Torrens title and the
defendant disputes the validity of this Torrens title, then the issue
of whether there is a direct or collateral attack on the plaintiffs title
is also irrelevant. This is because the court where the reivindicatory
or reconveyance suit is filed has the requisite jurisdiction to rule
definitively or with finality on the issue of ownership — it can pass
upon the validity of the plaintiff's certificate of title [Cullado v.
Guitierrez].
b. Accion Publiciana
Accion publiciana, or an accion plenaria de possession is
a plenary action to recover the right of possession, and the issue is
which the party has the better right of possession (possession de
Page 17 of 121
jure) [Martinez v. Heirs of Lim]. It can be filed when the
dispossession has lasted for more than one year. It is also used to
refer to an ejectment suit where the cause of dispossession is not
among the grounds for forcible entry and unlawful detainer, or
when possession has been lost for more than one year and the
action can no longer be maintained under Rule 70 of the Rules of
Court. The objective of the plaintiffs in accion publiciana is to
recover possession only, not ownership [Ibid].
The objective of the plaintiffs in accion publiciana is to
recover possession only, not ownership. However, where the
parties raise the issue of ownership, the courts may pass upon the
issue to determine who between the parties has the right to possess
the property. This adjudication is not a final determination of the
issue of ownership; it is only for the purpose of resolving the issue
of possession, where the issue of ownership is inseparably linked to
the issue of possession. The adjudication of the issue of ownership,
being provisional, is not a bar to an action between the same parties
involving title to the property. The adjudication, in short, is not
conclusive on the issue of ownership [Cullado v. Gutierrez].
c. Accion Interdictal
Accion interdictal is a summary action that seeks the
recovery of physical possession where the dispossession has not
lasted for more than one year, and is to be exclusively brought in
the proper inferior court. The issue involved is material possession
or possession de facto [Martinez v. Heirs of Lim]. The only
question that the courts resolve in ejectment proceedings is: who is
entitled to the physical possession of the premises, that is, to the
possession de facto and not to the possession de jure. It does not
even matter if a party’s title to the property is questionable. For this
reason, an ejectment case will not necessarily be decided in favor
of one who has presented proof of ownership of the subject
property [Eversley Childs Sanitarium v. Barbarona].
Cases of forcible entry and unlawful detainer are
governed by Rule 70 of the Rules of Court. Under Section 1 of
Rule 70, "a person deprived of the possession of any land or
building by force, intimidation, threat, strategy, or stealth, or a
lessor, vendor, vendee, or other person against whom the
possession of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession, by virtue
of any contract, express or implied, the legal representatives or
assigns of any such lessor, vendor, vendee, or other person, may, at
any time within one (1) year after such unlawful deprivation or
withholding of possession, bring an action in the proper Municipal
Trial Court against the person or persons unlawfully withholding or
depriving of possession, or any person or persons claiming under
them, for the restitution of such possession, together with damages
and costs."
Forcible entry and unlawful detainer cases are governed
by the rules on summary procedure. The judgment rendered in an
action for forcible entry or unlawful detainer is conclusive with
respect to the possession only, will not bind the title or affect the
ownership of the land or building, and will not bar an action
between the same parties respecting title to the land or
building. When the issue of ownership is raised by the defendant in
his pleadings and the question of possession cannot be resolved
without deciding the issue of ownership, the issue of ownership
shall be resolved only to determine the issue of possession
[Cullado v. Gutierrez].
When the ejectment court thus resolves the issue of
ownership based on a certificate of title to determine the issue of
possession, the question is posed: is this a situation where the
Torrens title is being subjected to a collateral attack proscribed by
Section 48 of Presidential Decree No. (PD) 1529[30] or the Property
Registration Decree, viz.: "A certificate of title shall not be subject
to collateral attack. It cannot be altered, modified, or cancelled
except in a direct proceeding in accordance with law." The answer
to this is "No" because there is no real attack, whether direct or
collateral, on the certificate of title in question for the simple
reason that the resolution by the ejectment court cannot alter,
modify, or cancel the certificate of title. Thus, the issue of whether
the attack on a Torrens title is collateral or direct is immaterial in
forcible entry and unlawful detainer cases because the resolution of
the issue of ownership is allowed by the Rules of Court on a
provisional basis only. To repeat: when the issue of ownership is
raised by the defendant in his pleadings and the question of
possession cannot be resolved without deciding the issue of
ownership, the issue of ownership shall be resolved only to
determine the issue of possession [Ibid].
C. DOCTRINE OF SELF-HELP
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.
As a necessary consequence of ownership, the owner has
the right of exclusive enjoyment and control over his property, as
well as to its exclusive possession. He may, therefore, exclude any
person from its enjoyment and disposal. This right of the owner is
so important that the law deems it appropriate to allow him to “use
such force as may be reasonably necessary to repel or prevent an
actual or threatened unlawful physical invasion or usurpation of his
property.” The employment of such reasonable force in defense of
his property is what is known in juridical science as the doctrine of
self-help [People v. Depante].
a. Mere disturbance of possession
Force may be used against it at any time as long as it
continues even beyond the prescriptive period for an action of
forcible entry. Thus if a ditch opened by Pedro in the land of Juan,
the latter may close it or cover it by force at any time.
b. Real dispossession
Force, to regain possession, can only be used
immediately after the dispossession. Thus, if Juan without the
permission of Pedro picks up a book belonging to the latter and
runs off with it, Pedro can pursue Juan and recover the book by
force.
Right Not Absolute
The use of reasonable force in defense of property under
the doctrine of self-help is authorized only if the purpose is to
“repel” or “prevent” an actual or threatened unlawful physical
invasion or usurpation of the said property. In Article 429 of the
Code, the word “repel” is, of course, referring to an “actual”
unlawful physical invasion or usurpation of the property; while the
word “prevent” is referring to a “threatened” unlawful physical
invasion or usurpation of the property. It is clear, therefore, that the
doctrine of self-help can only be exercised at the time of actual or
threatened dispossession, and not when possession has already
been lost [German Management v. Court of Appeals]. In the latter
Page 18 of 121
case, the owner must resort to judicial process for the recovery of
property as required in Article 536 of the Civil Code. In other
words, the doctrine of self-help cannot be invoked for the purpose
of recovering property.
Villafuerte v. Court of Appeals
Held: Both the trial court and the Court of Appeals concluded
that the lease contracts between petitioners and private respondents over the
latter's respective lots had already expired. There was also a congruence of
findings that it was wrong for private respondents to fence their properties
thereby putting to a halt the operation of petitioners' gasoline station. To
this, we agree.
Article 536 of the Civil Code previously quoted explicitly
provides for the proper recourse of one who claims to be entitled to the
possession of a thing. When private respondents personally took it upon
themselves to evict petitioners from their properties, which act was in clear
contravention of the law, they became liable "for all the necessary and
natural consequences of [their] illegal act.
Abuse of rights rule
It bears stressing that property rights must be considered,
for many purposes, not as absolute, unrestricted dominions but as
an aggregation of qualified privileges, the limits of which are
prescribed by the equality of rights, and the correlation of rights
and obligations necessary for the highest enjoyment of property by
the entire community of proprietors. Indeed, in Rellosa vs. Pellosis,
the Supreme Court held that:
Petitioner might verily be the owner of the land, with
the right to enjoy and to exclude any person from the enjoyment
and disposal thereof, but the exercise of these rights is not
without limitations. The abuse of rights rule established in
Article 19 of the Civil Code requires every person to act with
justice, to give everyone his due; and to observe honesty and
good faith. When right is exercised in a manner which discards
these norms resulting in damage to another, a legal wrong is
committed for which the actor can be held accountable.
Rights of property, like all other social and
conventional rights, are subject to such reasonable limitations in
their enjoyment and to such reasonable restraints established by
law.
UCPB v. Basco
Held: On its face, the Memorandum barred the respondent, a
stockholder of the petitioner bank and one of its depositors, from gaining
access to all bank premises under all circumstances. The said Memorandum
is all-embracing and admits of no exceptions whatsoever. Moreover, the
security guards were enjoined to strictly implement the same.
We agree that the petitioner may prohibit non-employees from
entering the working area of the ATM section. However, under the said
Memorandum, even if the respondent wished to go to the bank to encash a
check drawn and issued to him by a depositor of the petitioner bank in
payment of an obligation, or to withdraw from his account therein, or to
transact business with the said bank and exercise his right as a depositor, he
could not do so as he was barred from entry into the bank. Even if the
respondent wanted to go to the petitioner bank to confer with the corporate
secretary in connection with his shares of stock therein, he could not do so,
since as stated in the Memorandum of petitioner Ongsiapco, he would not
be allowed access to all the bank premises. The said Memorandum, as
worded, violates the right of the respondent as a stockholder or a depositor
of the petitioner bank, for being capricious and arbitrary.
MWSS v. Act Theater, Inc.
Held: Concededly, the petitioner, as the owner of the utility
providing water supply to certain consumers including the respondent, had
the right to exclude any person from the enjoyment and disposal thereof.
However, the exercise of rights is not without limitations. Having the right
should not be confused with the manner by which such right is to be
exercised.
While it is true that MWSS had sent a notice of investigation to
plaintiff-appellee prior to the disconnection of the latter’s water services,
this was done only a few hours before the actual disconnection. Upon
receipt of the notice and in order to ascertain the matter, Act sent its
assistant manager Teodulo Gumalid, Jr. to the MWSS office but he was
treated badly on the flimsy excuse that he had no authority to represent Act.
Act’s water services were cut at midnight of the day following the
apprehension of the employees. Clearly, the plaintiff-appellee was denied
due process when it was deprived of the water services. As a consequence
thereof, Act had to contract another source to provide water for a number of
days. Plaintiff-appellee was also compelled to deposit with MWSS the sum
of P200,000.00 for the restoration of their water services.
Diamond Farms v. DFWMPC
Held: It is beyond doubt that petitioner is the farm operator and
manager while respondents are the farm workers. Both parties enjoyed
possession of the land. Together, they worked thereon. Before CARP,
petitioner was the landowner, farm operator and manager. Respondents are
its farm workers. After the deferment period, CARP finally dawned.
Petitioner lost its status as landowner, but not as farm operator and
manager. Respondents remained as petitioner’s farm workers and received
wages from petitioner.
Now, the unrebutted claim of respondents in their answer and
position paper is that they guarded the 74-hectare land to protect their rights
as farm workers and CARP beneficiaries. They were compelled to do so
when petitioner attempted to install other workers thereon, after it conspired
with 67 CARP beneficiaries to occupy the 35-hectare land. They were fairly
successful since the intruders were able to occupy the pumping structure.
The government, including this Court, cannot condone petitioner’s act to
thwart the CARP’s implementation. Installing workers on a CARP-covered
land when the DAR has already identified the CARP beneficiaries of the
land and has already ordered the distribution of the land to them serves no
other purpose than to create an impermissible roadblock to installing the
legitimate beneficiaries on the land.
We also find the action taken by respondents to guard the land
as reasonable and necessary to protect their legitimate possession and
prevent precisely what petitioner attempted to do. Such course was justified
under Article 429 of the Civil Code which reads:
ART. 429. The owner or lawful possessor of a thing has the
right to exclude any person from the enjoyment and disposal thereof. For
this purpose, he may use such force as may be reasonably necessary to
repel or prevent an actual or threatened unlawful physical invasion or
usurpation of his property.
Being legitimate possessors of the land and having exercised
lawful means to protect their possession, respondents were not guilty of
unlawful occupation.
Thus, in order for defense of property to be appreciated
as a justifying circumstance, it is necessary that the means
employed to prevent or repel the aggression must also be
reasonable. Note that under the doctrine of self-help in Article 429
of the Civil Code, what is authorized is the use of force “as may be
reasonably necessary” for the purpose of repelling or preventing
any actual or threatened unlawful physical invasion or usurpation
of one’s property. In determining the reasonableness of the means
employed, the absence of an attack against the person of the owner
or lawful possessor of the property must be considered since
defense of property is not of such importance as the right to life
and limb. In People v. Narvaez, for example, the Court held that
when the appellant fired his shotgun from his window, killing his
two victims, his resistance was disproportionate to the attack.
Hence, he was credited only with special mitigating circumstance
of incomplete defense of property.
Page 19 of 121
It has recently been held that if a person finds a
neighbor’s pig among the plants on his land, the proper thing for
him to do is to drive the pig away, and to fi le a civil action against
the owner of the pig for damage to the plants. It would be wrong
for him to shoot the pig to death for the purpose of vengeance —
and for such an act, he can be convicted of the crime of malicious
mischief [People v. Segovia].
People v. Narvaez
Held: The reasonableness of the resistance is also a requirement
of the justifying circumstance of self defense or defense of one's rights
under paragraph 1 of Article 11, Revised Penal Code. When the appellant
fired his shotgun from his window, killing his two victims, his resistance
was disproportionate to the attack.
WE find, however, that the third element of defense of property
is present, i.e., lack of sufficient provocation on the part of appellant who
was defending his property. As a matter of fact, there was no provocation at
all on his part, since he was asleep at first and was only awakened by the
noise produced by the victims and their laborers. His plea for the deceased
and their men to stop and talk things over with him was no provocation at
all.
Be that as it may, appellant's act in killing the deceased was not
justifiable, since not all the elements for justification are present. He should
therefore be held responsible for the death of his victims, but he could be
credited with the special mitigating circumstance of incomplete defense,
pursuant to paragraph 6, Article 13 of the Revised Penal Code.
NOTE: The nature of the aggression must be illicit or
unlawful. The right to self-help is not available against the exercise
of right by another, such as when the latter executes an extra-
judicial abatement of nuisance. Neither can it be used against the
lawful exercise of the functions of a public official, such as a
sheriff attaching property.
D. FENCING OF LAND OR TENEMENTS
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.
Corollary to the right to exclude others from the
enjoyment of his property, the owner of a parcel of land or
tenement has the right to enclose or fence the same by whatever
means. In so doing, the owner is effectively giving notice to
everybody that they are not welcome in his property without his
consent and he may, therefore, validly consider any unauthorized
intrusion into his property as an act of unlawful aggression which
will authorize him to resort to self-help.
A person has a right to the natural use and enjoyment of
his own property, according to his pleasure, for all the purposes to
which such property is usually applied.  As a general rule,
therefore, there is no cause of action for acts done by one person
upon his own property in a lawful and proper manner, although
such acts incidentally cause damage or an unavoidable loss to
another, as such damage or loss is damnum absque injuria. When
the owner of property makes use thereof in the general and
ordinary manner in which the property is used, such as fencing or
enclosing the same as in this case, nobody can complain of having
been injured, because the inconvenience arising from said use can
be considered as a mere consequence of community life [Sps.
Custodio v. Court of Appeals].
However, it is required that the right to enclose or fence
must be legitimately exercised and must not be attended with bad
faith. Thus, if the lot owner fenced his property for the purpose of
evicting its occupant whose lease contract had already expired, the
lot owner is liable to said occupant for damages. In such a case,
what the lot owner should do is to resort to the proper legal
processes for the purpose of obtaining recovery of possession
pursuant to the provisions of Article 536 of the Civil Code
[Villafuerte v. Court of Appeals].
Sps. Custodio v. Court of Appeals
Held: The act of petitioners in constructing a fence within their
lot is a valid exercise of their right as owners, hence not contrary to morals,
good customs or public policy. The law recognizes in the owner the right to
enjoy and dispose of a thing, without other limitations than those
established by law. It is within the right of petitioners, as owners, to enclose
and fence their property. Article 430 of the Civil Code provides that
"(e)very owner may enclose or fence his land or tenements by means of
walls, ditches, live or dead hedges, or by any other means without detriment
to servitudes constituted thereon."
At the time of the construction of the fence, the lot was not
subject to any servitudes. There was no easement of way existing in favor
of private respondents, either by law or by contract. The fact that private
respondents had no existing right over the said passageway is confirmed by
the very decision of the trial court granting a compulsory right of way in
their favor after payment of just compensation. It was only that decision
which gave private respondents the right to use the said passageway after
payment of the compensation and imposed a corresponding duty on
petitioners not to interfere in the exercise of said right.
Hence, prior to said decision, petitioners had an absolute right
over their property and their act of fencing and enclosing the same was an
act which they may lawfully perform in the employment and exercise of
said right.  To repeat, whatever injury or damage may have been sustained
by private respondents by reason of the rightful use of the said land by
petitioners is damnum absque injuria.
North Greenhills v. Morales
Held: Under the Civil Code, NGA, as owner of the park, has the
right to 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. It also has a right to exclude others from access to, and
enjoyment of its property.
NGA's legal right to block the access door is beyond doubt.
Courts have no business in securing the access of a person to another
property absent any clear right on the part of the latter.
The CA essentially violated the right of NGA. Atty. Morales
never introduced any evidence that he had acquired any right by
prescription or by agreement or legal easement to access the park through
his side door. Moreover, he never claimed that his side door was his only
access to the park. He has other means and, being adjacent to the park,
going through other means is not cumbersome.
The conditions25 set forth under the Deed of Donation by Ortigas
& Co. Ltd. to NGA could not be used by Atty. Morales in his favor.
Assuming that he has a right as a member to use the park, it does not mean
that he can assert that his access to the park could only be done through his
side door. Atty. Morales knows very well that he can access the park
through some other parts of the park.
The right to enclose or fence in Article 430 is also
subject to the limitation that it should not work detriment to the
servitudes constituted therein
The concept of servitude or easement is discussed in
Title VII of this Book. Easement or servitude is defined as a real
right constituted in another person’s property, corporeal and
immovable, by virtue of which the owner of the same has to
abstain from doing or to allow somebody else to do something in
his property for the benefit of another thing or person.68 An
example of this is easement of drainage of waters embodied in
Article 637 of the New Civil Code, which reads:
Page 20 of 121
“Art. 637. Lower estates are obliged to receive the
waters which naturally and without the intervention of man
descend from the higher estates, as well as the stones or earth
which they carry with them.
The owner of the lower estate cannot construct works
which will impede this easement; neither can the owner of the
higher estate make works which will increase the burden. (552)”
Pursuant to such kind of easement or servitude, the
owner of the lower tenement cannot block or impede the servitude
and the owner of the higher tenement cannot construct works to
increase the burden of the servitude. Clearly, the existence of this
kind of servitude works as a limitation upon the right of the owner
of the lower tenement to enclose his property with walls or other
means if the same will prevent the passage of the water which
naturally falls from the higher tenement.
Heirs of Limense v. De Ramos
Held: Although the owner of the property has the right to
enclose or fence his property, he must respect servitudes constituted
thereon. The question now is whether respondents are entitled to an
easement of right of way.
Every buyer of a registered land who takes a certificate of title
for value and in good faith shall hold the same free of all encumbrances
except those noted on said certificate. It has been held, however, that
"where the party has knowledge of a prior existing interest that was
unregistered at the time he acquired a right to the same land, his knowledge
of that prior unregistered interest has the effect of registration as to him."
In the case at bar, Lot No. 12-C has been used as an alley ever
since it was donated by Dalmacio Lozada to his heirs. It is undisputed that
prior to and after the registration of TCT No. 96886, Lot No. 12-C has
served as a right of way in favor of respondents and the public in general.
We quote from the RTC's decision:
x x x It cannot be denied that there is an alley which shows its
existence. It is admitted that this alley was established by the original owner
of Lot 12 and that in dividing his property the alley established by him
continued to be used actively and passively as such. Even when the division
of the property occurred, the non-existence of the easement was not
expressed in the corresponding titles nor were the apparent sign of the alley
made to disappear before the issuance of said titles.
The Court also finds that when plaintiff acquired the lot (12-C)
which forms the alley, he knew that said lot could serve no other purpose
than as an alley. That is why even after he acquired it in 1969 the lot
continued to be used by defendants and occupants of the other adjoining
lots as an alley. x x x
Thus, petitioners are bound by the easement of right of way over
Lot No. 12-C, even though no registration of the servitude has been made
on TCT No. 96886.
E. RIGHTS OF THIRD PERSONS
Article 431. The owner of a thing cannot make use thereof in
such manner as to injure the rights of a third person.
Ownership is not an absolute right. Like all other social
and conventional rights, rights arising from ownership are subject
to such reasonable limitations in their enjoyment as shall prevent
them from being injurious, and to such reasonable restraints and
regulations, established by law, as the legislature, under the
governing and controlling power vested in them by the
constitution, may think necessary and expedient.
F. ACTS IN A STATE OF NECESSITY
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.
Under the provisions of Article 432 of the New Civil
Code of the Philippines, the interference by a third person with
another’s property is justified and cannot be prevented by the latter
if such interference is necessary to avert an imminent danger and
the threatened damage, compared to the damage arising to the
owner from the interference, is much greater. An example of the
application of the principle of state of necessity is when a fi re is
threatening to spread and destroy other houses and properties and
the destruction of some houses will avert the spread of the fire,
such destruction is justified and will not be considered as unlawful
physical invasion upon another’s property.
Under the Revised Penal Code, the state of necessity is
considered a justifying circumstance. Any person who, in order to
avoid an evil or injury, does an act which causes damage to another
does not incur criminal liability provided that the following
requisites are present: (a) that the evil sought to be avoided actually
exists; (b) that the injury feared be greater than that done to avoid
it; (c) that there be no other practical and less harmful means of
preventing it; (d) the means used are necessary and indispensable
to avert danger.
Doctrine of Self-help vs. State of Necessity
The doctrine of self-help is invoked by the owner or
lawful possessor in protection of his right to prevent other persons
from interfering with the property. The state of necessity, on the
other hand, is availed of by another person against someone else’s
property for the purpose of averting an imminent danger to himself
or to another person or to their property.
Rabuya notes that it is not possible for the application of
both doctrines to result in conflict of rights. If the application of
one doctrine is proper, it necessarily follows that the application of
the other doctrine is not proper. If, for example, all the requisites
for the application of the doctrine of state of necessity are present,
the owner cannot rightfully invoke the doctrine of self-help to
defeat the application of the former. If the application of the
doctrine of state of necessity is proper, the same is justifi ed under
the provisions of Article 432 of the New Civil Code and it is, in
fact, considered a justifying circumstance under Article 11, fourth
paragraph, of the Revised Penal Code. Such being the case, the
interference made is not considered as an “unlawful physical
invasion or usurpation” of another’s property, which is a requisite
for the proper application of the doctrine of self-help under Article
429 of the New Civil Code.
Indemnity For Damages
While interference to one’s property pursuant to a state
of necessity is justified and does not constitute unlawful
aggression, the persons benefited by such interference are duty
bound to indemnify the owner for the damage suffered by the
latter.
G. DISPUTABLE PRESUMPTION OF OWNERSHIP
Article 433. Actual possession under claim of ownership
raises a disputable presumption of ownership. The true owner must
resort to judicial process for the recovery of the property.
Page 21 of 121
Two requirements to raise a disputable (rebuttable)
presumption of ownership:
(a) actual possession; and
(b) claim of ownership.
Since actual possession under claim of ownership raises a
disputable presumption of ownership, such possession must be
respected until it is shown that another person has a better right
over the property.
The true owner has to resort to judicial process to recover
his property, only if the possessor does not want to surrender the
property to him, after proper request or demand has been made.
Judicial process must then be had to prevent disturbances of the
peace [Supia v. Quintero].
H. ACTION TO RECOVER
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.
The established legal principle in actions for annulment
or reconveyance of title is that a party seeking it should establish
not merely by a preponderance of evidence but by clear and
convincing evidence that the land sought to be reconveyed is his.
Article 434 of the Civil Code provides that to successfully maintain
an action to recover the ownership of a real property, the person
who claims a better right to it must prove two (2) things: first, the
identity of the land claimed, and; second, his title thereto. 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 [VSD Realty v. Uniwide Sales].
a. First 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 [Santiago v. Santos].
b. Second Requisite
If the claims of both plaintiff and 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 [Santos v. Espinosa].
Among the evidence which may be presented by plaintiff
to show ownership are the following:
(i) Torrens certificate [Reyes v. Borbon];
(ii) Titles granted by the Spanish
Government, like those effected by royal
cedula [Guido v. De Borja];
(iii) Long and actual possession [Nolan v.
Jalandoni];
(iv) Occupation of a building for a long time
without paying rentals therefor [Gatdula
v. Santos];
(v) Testimony of adverse and exclusive
possession of ownership corroborated by
tax declaration of properties, payment of
taxes, and deeds of mortgage (but not the
mere fact of working over the land
 without expressing the concept in which
the land was being worked) [Consorcia
Alano, et al. v. Carmen Ignacio].
Ibot v. Heirs of Tayco
Held: As to the first requisite, there is no doubt that the land
sought to be reconveyed is Lot No. 299, a residential lot located at
Pigcawayan, Province of Cotabato. As to the second requisite on title of
ownership, the claims of the parties conflict.
An evaluation of the assailed CA decision
A reading of the assailed CA decision shows that it recognized
the respondents' failure to prove the sale between Amelita and Francisco.
According to the CA, the exhibits that the respondents offered in
evidence, i.e., Miscellaneous Sale Application and Appraisal Report signed
by Land Inspector Geminiano Oliva, are not deeds of reconveyances or
proofs of the alleged sale. The respondents, moreover, failed to prove that
they have an open, continuous, adverse and uninterrupted possession of the
subject property for more than 30 years, there being no document that
would show that they, in the exercise of their claim as its owners, had and
have been paying the realty tax due on the subject property. As consistently
held, tax receipts are not an evidence of ownership but they are
good indicia of possession in the concept of owner, for no one would
ordinarily be paying taxes for a property not in his actual or at least
constructive possession.
Nonetheless, the CA confirmed the respondents' possession of
the subject land for more than 30 years as uncontroverted due to the
improvements they introduced over the subject land since 1964, such as
buildings and concrete houses, among others. Applying the case of Heirs of
Dela Cruz v. CA, the CA therefore concluded that such acts could mean a
clear exercise of ownership by the respondents.
Such analysis is inaccurate. The case of Dela Cruz does not
apply in this case because of the varying factual setting, to wit: (1) the
respondents therein were able to prove the alleged sale to their predecessor-
in-interest; and (2) the defendant failed to send a demand letter or any form
of dissent to the plaintiff to assert his claim of ownership. Here, it is the
reverse. The respondents failed to present any document to prove the
alleged sale. Moreover, the petitioner was able to assert his claim of
ownership not only by sending a letter demanding for the respondents to
vacate the disputed property but he also filed an action for ejectment
against them when his demand to vacate was unheeded.
The CA also cited the case of Naval v. CA to emphasize the
principle that the registration of a parcel of land under the Torrens system
does not vest or create ownership in favor of the registrant. It should be
noted, however, that in Naval, there was a sale of an unregistered land to
different buyers at different times unlike in the instant case. In Naval, the
second buyer (who allegedly purchased the land in 1972) successfully had
the disputed land titled in her name upon which she based her claim of
ownership. However, in that case, there was a prior sale of the same
unregistered land which was registered as early as 1969 coupled with the
buyers' immediate possession thereof.
Here, the registration of Lot No. 299 was not preceded by a
prior sale to the respondents' predecessor-in-interest. As above discussed,
the respondents failed to substantiate their claim that the same land was
sold to the late Francisco because the documents they presented in evidence
did not prove the alleged sale. It can, therefore, be stated that the OCT
issued in the name of the petitioner over Lot No. 299 cannot be assailed by
the respondents considering that their claim of ownership has not been duly
proved. Therefore, the case of Naval is also inapplicable.
Citing the case of Aznar Brothers Realty Company v. Aying, the
CA also pointed out that a constructive implied trust was constituted in
favor of the respondents in view of the fraud employed by the petitioner
when he obtained title over Lot No. 299 by misrepresenting that he is in
actual possession thereof at the time he applied for its registration. Contrary
to the CA's disquisition, however, the Court finds that no implied trust was
created between the petitioner and the respondents. In Aznar, there was
determination of who among the heirs did not sign the deed of sale.
Therefore, the Torrens title issued in the name of the buyer holds the same
in trust for their benefit. Here, it is again worthy to stress that the
Page 22 of 121
respondents had nothing to support their claim of ownership over that of the
petitioner.
Therefore, the petitioner, being a registered owner of the
disputed lot, cannot be considered as a trustee in favor of the respondents
as cestui que trust.
Valenzuela v. Roman
Held: The Court finds that respondent was able to successfully
prove both requisites by preponderance of evidence, both documentary and
testimonial.
The identity of the property over which respondent asserts
ownership is well established. During trial before the RTC, the TCT was
presented and offered as evidence to prove the identity of the subject
property belonging to respondent. On the other hand, petitioner failed to
present evidence to prove that the subject lot was part of the properties
donated to petitioner by Constantino. To further prove the identity of the
property, respondent also offered the testimonies of Fr. Samson who
inspected the subject property and negotiated with petitioner to solve the
matter of illegal encroachments on the property of respondent. 72 In short,
the ownership of the subject property and the identity of the lot are beyond
dispute. As the trial court correctly observed, the meeting held by both
parties on August 14, 1998 would also show that petitioner acknowledged
that respondent owns the lot where petitioner's structures were erected
when they offered replacement for the lot they had occupied.
I. EMINENT DOMAIN
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.
Eminent domain, or the superior right of the State to own
certain properties under certain conditions, 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.
The following are the requisites for the valid exercise of
eminent domain:
a. Necessity
b. Private Property
c. Taking
d. Public use
e. Just compensation
f. Due process
1. Concept of Taking
It may include trespass without actual eviction of the
owner, material impairment of the value of the property or
prevention of the ordinary uses for which the property was
intended. In Ayala de Roxas v. City of Manila, the imposition of an
easement of a 3-meter strip on the plaintiff’s property was
considered taking. In People v. Fajardo, a municipal ordinance
prohibiting a building which would impair the view of the plaza
from the highway was likewise considered taking. In these cases, it
was held that the property owner was entitled to payment of just
compensation
The landmark case of Republic v. Vda. De
Castellvi provides an enlightening discourse on the requisites of
taking:
First, The expropriator must enter a private
property; Second, the entrance into private property must be for
 more than a momentary period; Third, the entry into the
property should be under warrant or color of legal
authority; Fourth, the property must be devoted to a public use
or otherwise informally appropriated or injuriously affected;
and Fifth, the utilization of the property for public use must be
in such a way as to oust the owner and deprive him of all
beneficial enjoyment of the property.
2. Just compensation
The full and fair equivalent of the property taken; it is the
fair market value of the property. It is settled that the market value
of the property is “that sum of money which a person, desirous but
not compelled to buy, and an owner, willing but not compelled to
sell, would agree on as a price to be given and received therefor”.
Just compensation means not only the correct amount to be paid to
the owner of the land but also payment within a reasonable time
from its taking [Eslaban v. De Onorio].
The purpose of just compensation is not to reward the
owner for the property taken, but to compensate him for the loss
thereof. As such, the true measure of the property, as upheld in a
plethora of cases, is the market value at the time of the taking,
when the loss resulted.
To determine just compensation, the trial court should
first ascertain the market value of the property, to which should be
added the consequential damages after deducting therefrom the
consequential benefits which may arise from the expropriation. If
the consequential benefits exceed the consequential damages, these
items should be disregarded altogether as the basic value of the
property should be paid in every case [Republic v. BPI].
When private land is expropriated for a particular
public use, and that particular public use is abandoned, does the
land so expropriated return to its former owner?
The answer to that question depends upon the character
of the title acquired by the expropriator, whether it be the State, a
province, a municipality, or a corporation which has the right to
acquire property under the power of eminent domain. If, for
example, land is expropriated for a particular purpose, with the
condition that when that purpose is ended or abandoned the
property shall return to its former owner, then, of course, when the
purpose is terminated or abandoned the former owner reacquires
the property so expropriated. If, for example, land is expropriated
for a public street and the expropriation is granted upon condition
that the city can only use it for a public street, then, of course,
when the city abandons its use as a public street, it returns to the
former owner, unless there is some statutory provisions to the
contrary. Many other similar examples might be given. If, upon the
contrary, however, the decree of expropriation gives to the entity a
fee simple title, then, the of course, the land becomes the absolute
property of the expropriator, whether it be the State, a province, or
municipality, and in that case the non-user does not have the effect
of defeating the title acquired by the expropriation proceedings
[Fery v. Municipality of Cabanatuan].
J. SEIZURE AS AN EXERCISE OF POLICE POWER
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.
This article is based on police power, which in turn is
based on the maxim that “the welfare of the people is the supreme
Page 23 of 121
law of the land.’’ 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.
Police power can refer not merely to condemnation and
seizure, but also to total destruction itself, provided that (a) the
public interest is served and (b) the means used are not unduly
harsh, abusive, or oppressive [U.S. v. Toribio].
Thus, nuisances can be abated; and rotting canned goods
may be destroyed. If the condemnation, seizure, or destruction is
unjustified, the owner is entitled to compensation.
K. SURFACE RIGHT OF A LAND OWNER
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.
It is a well-known principle that the owner of piece of
land has rights not only to its surface but also to everything
underneath and the airspace above it up to a reasonable height
[Republic v. Court of Appeals]. This article deals with the extent of
ownership which a person has over a parcel of land — more
specifically, 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:
(a) servitudes or easements
(b) special laws — like the Mining Law
(c) ordinances
(d) the reasonable requirements of aerial navigation
(e) principles on human relations (justice, honesty,
good faith) and the prevention of injury to the rights
of third persons.
Presumably, the landowners' right extends to such height
or depth where it is possible for them to obtain some benefit or
enjoyment, and it is extinguished beyond such limit as there would
be no more interest protected by law [Republic v. Court of
Appeals].
NPC v. Ibrahim
Held:  Moreover, the Court sustains the finding of the lower
courts that the sub-terrain portion of the property similarly belongs to
respondents. This conclusion is drawn from Article 437 of the Civil Code
which provides:
Thus, the ownership of land extends to the surface as well as to
the subsoil under it. In Republic of the Philippines v. Court of Appeals, this
principle was applied to show that rights over lands are indivisible and,
consequently, require a definitive and categorical classification, thus:
The Court of Appeals justified this by saying there is "no
conflict of interest" between the owners of the surface rights and the owners
of the sub-surface rights. This is rather strange doctrine, for it is a well-
known principle that the owner of a piece of land has rights not only to its
surface but also to everything underneath and the airspace above it up to a
reasonable height. Under the aforesaid ruling, the land is classified as
mineral underneath and agricultural on the surface, subject to separate
claims of title. This is also difficult to understand, especially in its practical property, hence, an encumbrance. As a matter of bank policy, property with
application. an existing encumbrance cannot be considered neither accepted as collateral
Under the theory of the respondent court, the surface owner will for a loan."
be planting on the land while the mining locator will be boring tunnels All the foregoing evidence and findings convince this Court that
underneath. The farmer cannot dig a well because he may interfere with the preponderantly plaintiffs have established the condemnation of their land
mining operations below and the miner cannot blast a tunnel lest he destroy covering an area of 48,005 sq. meters located at Saduc, Marawi City by the
the crops above. How deep can the farmer, and how high can the miner go defendant National Power Corporation without even the benefit of
without encroaching on each others rights? Where is the dividing line expropriation proceedings or the payment of any just compensation and/or
between the surface and the sub-surface rights? reasonable monthly rental since 1978.
The Court feels that the rights over the land are indivisible and
that the land itself cannot be half agricultural and half mineral. The
Lloyds v. NPC
classification must be categorical; the land must be either completely
Held: It is true that this Court, in National Power Corporation v.
mineral or completely agricultural.
Ibrahim, applied Article 437 of the Civil Code to order the National Power
Registered landowners may even be ousted of ownership and
Corporation to pay just compensation to the property owners. In that case, a
possession of their properties in the event the latter are reclassified as
tunnel was built underneath the owners' property without their knowledge.
mineral lands because real properties are characteristically indivisible. For
Ibrahim, however, does not apply here. There was no extraction
the loss sustained by such owners, they are entitled to just compensation
of minerals conducted in Ibrahim, unlike here, which involved the
under the Mining Laws or in appropriate expropriation proceedings.
quarrying of limestones, a mineral.
Moreover, petitioner's argument that the landowners' right
Even Benguet Consolidated Mining v. Republic cannot be made
extends to the sub-soil insofar as necessary for their practical interests
basis for the award of just compensation for the limestone deposits. Unlike
serves only to further weaken its case. The theory would limit the right to
Lloyds Richfield's mineral claim, which was made in 1993—under the
the sub-soil upon the economic utility which such area offers to the surface
regime of 1987 Constitution—Benguet Consolidated's mineral claim was
owners. Presumably, the landowners' right extends to such height or depth
made as early as 1909, under the Philippine Bill of 1902. The organic act
where it is possible for them to obtain some benefit or enjoyment, and it is
stated that minerals may still be claimed by private individuals. 85 In other
extinguished beyond such limit as there would be no more interest
words, Benguet Consolidated's mining claim had become a vested
protected by law.
right.86 But even then, as Lloyds Richfield pointed out, no just
In this regard, the trial court found that respondents could have
compensation was ultimately given to Benguet Consolidated because the
dug upon their property motorized deep wells but were prevented from
gold deposits were not of commercial value.
doing so by the authorities precisely because of the construction and
Therefore, the Court of Appeals correctly deleted the award of
existence of the tunnels underneath the surface of their property.
just compensation for the limestone deposits.
Respondents, therefore, still had a legal interest in the sub-terrain portion
insofar as they could have excavated the same for the construction of the
deep well. The fact that they could not was appreciated by the RTC as proof L. HIDDEN TREASURES
that the tunnels interfered with respondents' enjoyment of their property and
deprived them of its full use and enjoyment, thus: Article 438. Hidden treasures belong to the owner of the
Has it deprived the plaintiffs of the use of their lands when from land, building, or other property on which it is found.
the evidence they have already existing residential houses over said tunnels Nevertheless, when the discovery is made on the property of
and it was not shown that the tunnels either destroyed said houses or another, or of the State or any of its subdivisions, and by chance, one-
disturb[ed] the possession thereof by plaintiffs? From the evidence, an half thereof shall be allowed to the finder. If the finder is a trespasser,
affirmative answer seems to be in order. The plaintiffs and [their] co-heirs he shall not be entitled to any shares of the treasure.
discovered [these] big underground tunnels in 1992. This was confirmed by If the things found be of interest to science or the arts, the
the defendant on November 13, 1992 by the Acting Assistant Project State may acquire them at their just price, which shall be divided in
Manager, Agus 1 Hydro Electric Project (Exh. K). On September 16, 1992, conformity with the rule stated.
Atty. Omar Maruhom (co-heir) requested the Marawi City Water District
for permit to construct a motorized deep well over Lot 3 for his residential
Article 439. By treasure is understood, for legal purposes,
house (Exh. Q). He was refused the permit "because the construction of the
any hidden and unknown deposit of money, jewelry, or other precious
deep well as (sic) the parcels of land will cause danger to lives and
objects, the lawful ownership of which does not appear.
property." He was informed that "beneath your lands are constructed the
Napocor underground tunnel in connection with Agua Hydroelectric plant"
(Exh. Q-2). There in fact exists ample evidence that this construction of the The requisites in the definition of hidden treasure are:
tunnel without the prior consent of plaintiffs beneath the latter's property
endangered the lives and properties of said plaintiffs. It has been proved (a) Hidden and unknown deposit (such that finding it
indubitably that Marawi City lies in an area of local volcanic and tectonic would indeed be a discovery).
activity. Lake Lanao has been formed by extensive earth movements and is
(b) Consists of money, jewelry or other precious
considered to be a drowned basin of volcano/tectonic origin. In Marawi
City, there are a number of former volcanoes and an extensive amount of
objects.
faulting. Some of these faults are still moving. (Feasibility Report on (c) Their lawful ownership does not appear.
Marawi City Water District by Kampsa-Kruger, Consulting Engineers,
Architects and Economists, Exh. R). Moreover, it has been shown that the Under the ejusdem generis rule, the term “other precious
underground tunnels [have] deprived the plaintiffs of the lawful use of the objects” should be understood as being similar to money or
land and considerably reduced its value. On March 6, 1995, plaintiffs jewelry. Hence, the concept does not include natural wealth, i.e.,
applied for a two-million peso loan with the Amanah Islamic Bank for the minerals and petroleum. The Regalian doctrine reserves to the State
expansion of the operation of the Ameer Construction and Integrated
all natural wealth that may be found in the bowels of the earth even
Services to be secured by said land (Exh. N), but the application was
disapproved by the bank in its letter of April 25, 1995 (Exh. O) stating that: if the land where the discovery is made be private. As such, the
"Apropos to this, we regret to inform you that we cannot right of the owner of the land with respect to the sub-surface or
consider your loan application due to the following reasons, to wit: subsoil is subject to the application of the Regalian doctrine
That per my actual ocular inspection and verification, subject [Republic v. Court of Appeals].
property offered as collateral has an existing underground tunnel by the
NPC for the Agus I Project, which tunnel is traversing underneath your
Page 24 of 121
 Since the owner of the land is likewise the owner of its
sub-surface or sub-soil, any “hidden treasure” on the sub-surface
also belongs to him. The same rule applies if the “hidden treasure”
is located on a building or other property — the same belong to the
owner of the building or other property on which it is found.
However, when the discovery is made by a stranger who is not a
trespasser and the discovery is by chance, the finder is entitled to
one-half of the treasure. If the finder is a trespasser, he shall not be
entitled to any share of the treasure.
III
RULES ON 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.
Based from the provisions of Article 440, accession is
classified into two:
(1) accesion discreta; and
(2) accesion continua.
The first part of the article defines the concept of
accesion discreta or the right of the owner to anything which is
produced by his property. The second part of the article, on the
other hand, defines the concept of accesion continua or the right of
the owner to anything which is incorporated or attached to his
property, whether such attachment is through natural or artificial
causes.
Accesion discreta is subdivided into: (1) natural fruits,
(2) industrial fruits, and (3) civil fruits. Accesion continua, in turn,
may refer to either immovable property or movable property.
With regard to immovable property, accesion continua is
classified into either industrial accession or natural accession
depending on the manner by which the attachment or incorporation
takes place. In industrial accession, the incorporation takes place
artificially; while natural accession takes place through natural
means. Industrial accession, in turn, may take the form of either
building, planting or sowing. Natural accession, on the other hand,
has four forms: (1) alluvion, (2) avulsion; (3) change of course of
river; and (4) formation of islands.
With respect to movable property, accesion continua
may either be: (1) adjunction or conjunction, (2) commixtion or
confusion, and (3) specification. Adjunction or conjunction, in turn,
may take place by: (1) inclusion (engraftment), (2) soldadura
(attachment); (3) tejido (weaving); (4) pintura (painting); or (5)
escritura (writing).
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. Accession,
therefore, is the right of an owner of a thing to the products of said
thing as well as to whatever is inseparably attached thereto as an
accessory.
It will be noted that accession is not one of those listed
therein. It is therefore safe to conclude that accession is not a mode
of acquiring ownership. The reason is simple: accession
presupposes a previously existing ownership by the owner over the
principal. This is not necessarily so in the other modes of acquiring
ownership. Therefore, fundamentally and in the last analysis,
accession is a right implicitly included in ownership, without which
it will have no basis or existence. Truly, it is one of the attributes or
Page 25 of 121
characteristics which will make up the concept of dominion or
ownership. (Manresa, 6th Ed., Vol. 3, p. 116; 180-182).
A. RIGHT OF ACCESSION WITH RESPECT TO WHAT
IS PRODUCED BY PROPERTY (ACCESSION
DISCRETA)
Article 441. To the owner belongs:
(1) The natural fruits;
(2) The industrial fruits;
(3) The civil fruits.
Article 442. Natural fruits are the spontaneous products of
the soil, and the young and other products of animals.
Industrial fruits are those produced by lands of any kind
through cultivation or labor.
Civil fruits are the rents of buildings, the price of leases of
lands and other property and the amount of perpetual or life annuities
or other similar income.
This Article refers to accession discreta which is defined
as the right to the ownership of fruits produced by our property.
The rule in Article 441 is not absolute inasmuch as there
are cases where the owner is not entitled to the fruits of his
property. The exceptions to the rule are the following:
(a) in usufruct
(b) in lease of rural lands
(c) in antichresis
(d) in possession in good faith
(e) fruits naturally falling
Natural Fruits
There are two kinds of natural fruits, namely: (a) the
spontaneous products of the soil — those that appear without the
intervention of human labor, such as the wild fruits in the forest,
herbs, and common grass; and (b) the young and other products of
animals, such as milk, hair, wool, horn, hide, eggs, and animals
dung or manure.
With respect to the natural fruit of the first kind, it is
required that the same must be spontaneous product of the soil. In
other words, it is necessary that there must be no human labor
which has intervened in its generation. If human labor intervenes in
the production of the fruit, the same is classifi ed as an industrial
fruit.
Industrial Fruits
Industrial fruits are those produced by lands of any kind
through cultivation or labor. Hence, for a fruit to be classifi ed as
an industrial fruit, it must satisfy two requirements: (1) it is
produced by the land; and (2) it is produced through cultivation or
labor. Both the natural fruits of the first kind and industrial fruits
are products of the land. They differ, however, in the manner of
their coming into existence. The former is produced naturally and
spontaneously by the soil; while the latter is produced through
cultivation or through human labor. Examples of industrial fruits
are the coffee beans in a coffee plantation; mango fruits in a mango
plantation; palay, corn or sugar cane produced by farmers.
Civil Fruits
Civil fruits are the income or revenues derived from the
property itself. Hence, a dividend, whether in the form of cash or
stock, is considered as civil fruit because it is declared out of the
profi ts of a corporation and not out of the capital stock. But a
bonus which is paid to the owner of a piece of land for undertaking
the risk of securing with his property a loan given to a sugar central
is not civil fruits of the mortgaged property since it is not income
derived from the property itself but a compensation for the risk
assumed by the owner [Bachrach Motors v. Talisay-Silay Milling].
1. Duty of Recipient of Fruits to Reimburse
Necessary Expenses
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.
Article 443 of the New Civil Code contemplates a
situation where the recipient of the fruits was not the same person
who incurred the expenses in connection with its production,
gathering and preservation.
However, Article 443 does not apply when the planter is
in good faith, because in this case, he is entitled to the fruits
already received, hence, there is no necessity of reimbursing him
[Article 544].
Article 443 applies only when the fruits are already
harvested and gathered since the article refers to persons “who
receives the fruits.” Hence, the article does not apply to a situation
where the fruits are still pending. At the same time, the article
refers to a recipient who did not incur the expenses for the
production, gathering and preservation of the fruits. This may
happen only if the property was previously in the possession of a
possessor bad in faith but not if the possessor was in good faith.
Under the Civil Code, a possessor in good faith is
entitled to the fruits received by him before his possession is
legally interrupted. Hence, he cannot be compelled by the owner to
return whatever fruits he received prior to the interruption of his
good faith. On the other hand, the possessor in bad faith is required
to reimburse to the legitimate possessor the fruits received by him
and those which the legitimate possessor could have received. Such
being the case, the provisions of Article 443 finds application in a
case where the true owner recovers possession of the property from
a possessor in bad faith who is required by law to return to the
owner not only the fruits he already received but also the fruits
which the owner could have received. This is confirmed by the
provisions of Article 549 of the New Civil Code which states that
while the possessor in bad faith is obligated to reimburse the fruits
received by him and those which the legitimate possessor could
have received, he is, at the same time, entitled to recover the
expenses mentioned in Article 443.
Torbelo v. Sps. Rosario
Held: The accessory follows the principal.  The right of
accession is recognized under Article 440 of the Civil Code which states
that “[t]he 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.”
There is no question that Dr. Rosario is the builder of the
improvements on Lot No. 356-A.  The Torbela siblings themselves alleged
that they allowed Dr. Rosario to register Lot No. 356-A in his name so he
could obtain a loan from DBP, using said parcel of land as security; and
with the proceeds of the loan, Dr. Rosario had a building constructed on Lot
No. 356-A, initially used as a hospital, and then later for other commercial
purposes.  Dr. Rosario supervised the construction of the building, which
began in 1965; fully liquidated the loan from DBP; and maintained and
administered the building, as well as collected the rental income therefrom,
until the Torbela siblings instituted Civil Case No. U-4359 before the RTC
on February 13, 1986.
Page 26 of 121
When it comes to the improvements on Lot No. 356-A, both the
Torbela siblings (as landowners) and Dr. Rosario (as builder) are deemed in
bad faith.  The Torbela siblings were aware of the construction of a building
by Dr. Rosario on Lot No. 356-A, while Dr. Rosario proceeded with the
said construction despite his knowledge that Lot No. 356-A belonged to the
Torbela siblings.  This is the case contemplated under Article 453 of the
Civil Code, which reads:
ART. 453.  If there was bad faith, not only on the part of the
person who built, planted or sowed on the land of another, but also on the
part of the owner of such land, the rights of one and the other shall be the
same as though both had acted in good faith.
It is understood that there is bad faith on the part of the
landowner whenever the act was done with his knowledge and without
opposition on his part. 
2. Crops and Animals
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.
a. Two Kinds of Crops (Annual and Perennial)
Annual crops (like cereals, grains, rice, corn, sugar) are
deemed manifest (existing) the moment their seedlings appear from
the ground, although the grains have not yet actually appeared.
Perennial crops (like oranges, apples, mangoes, and coconuts) are
deemed to exist only when they actually appear on the trees. (See 2
Manresa, p. 190; see also Walsh, Law of Property, pp. 14-15).
b. Animals
The young of animals are already considered existing
even if still in the maternal womb. (Art. 444, par. 2).
B. RIGHT OF ACCESSION WITH RESPECT TO
IMMOVABLE PROPERTY (ACCESSION CONTINUA)
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.
Article 445 deals with accession continua; more
specifically with accession industrial. (BUILDING, PLANTING,
SOWING). As defined, accesion continua is the right of the owner
to anything which is incorporated or attached to his property,
whether the attachment is by reason of natural or artificial causes.
In Bernardo v. Bataclan, the Supreme Court held:
The Civil Code confirms certain time-honored
principles of the law of property. One of these is the principle of
accession whereby the owner of property acquires not only that
which it produces but that which is united to it either naturally
or artificially. 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. Where, however, the planter, builder,
of sower has acted in good faith, a conflict of rights arises
between the owners and it becomes necessary to protect the
owner of the improvements without causing injustice to the
owner of the land. In view of the impracticability of creating
what Manresa calls a state of "forced coownership" (vol. 3, 4th
ed., p. 213), the law has provided a just and equitable solution
by giving the owner of the land the option to acquire the
improvements after payment of the proper indemnity or to
oblige the builder or planter to pay for the land and the sower to
pay the proper rent (art 361). It is the owner of the land who is
allowed to exercise the option because his right is older and
 because, by the principle of accession, he is entitled to the
ownership of the accessory thing (3 Manresa, 4th ed., p. 213).
NOTE: The difference between sowing and planting is
that in the former, each deposit of seed gives rise merely to a single
crop or harvest; whereas in planting, more or less permanent trunks
or trees are produced, which in turn produce fruits themselves. In
the latter case therefore, without a replanting, crops will continue to
grow every season.
It must also be noted that Article 445 uses the adverb
"thereon" which is simply defined as "on the thing that has been
mentioned." In other words, the supposed improvement must be
made, constructed or introduced within or on the property and not
outside so as to qualify as an improvement contemplated by law.
Otherwise, it would just be very convenient for land owners to
expand or widen their properties in the guise of improvements
[Daclison v. Baytion].
Provincial Assessor v. Filipinas Palm
Held: Despite the land being leased by respondent when the
roads were constructed, the ownership of the improvement still belongs to
NGPI-NGEI. As provided under Article 440 and 445 of the Civil Code, the
land is owned by the cooperatives at the time respondent built the roads.
Hence, whatever is incorporated in the land, either naturally or artificially,
belongs to the NGPI-NGEI as the landowner.
Although the roads were primarily built for respondent's benefit,
the roads were also being used by the members of NGPI and the public.
Basic Principles of Accession Continua (Accession
Industrial)
(a) To the owner of the principal (the land for example)
must belong also the accessions, in accordance with
the principle that “the accessory follows the
principal’’ (“accesio cedit principali’’).
(b) The union or incorporation must, with certain
exceptions, be effected in such a manner that to
separate the principal from the accessory would
result in substantial injury to either.
(c) He who is in good faith may be held responsible but
he should not be penalized.
(d) He who is in bad faith may be penalized.
(e) No one should enrich himself unjustly at the
expense of another.
(f) Bad faith of one party neutralizes the bad faith of
the other so both should be considered in good faith.
1. Disputable Presumptions
Article 446. All works, sowing, and planting are presumed
by the owner and at his expense, unless the contrary is proved.
The two disputable presumptions under this Article are:
(i) The works, sowing, and planting were
made by the owner.
(ii) They were made at the owner’s expense
2. Rights and Obligations of Landowner and
Owner of Materials
Article 447. The owner of the land who makes thereon,
personally or through another, plantings, constructions, or works with
the materials of another, shall pay for their value; and, if he acted in
bad faith, he shall also be obliged to the reparation of damages. The
Page 27 of 121
owner of the materials shall have the right to remove them only in case
he can do so without injury to the work constructed, or without the
plantings, constructions or works being destroyed. However, if the
landowner acted in bad faith, the owner of the materials may remove
them in any event, with a right to be indemnified for damages.
a. Rights and Obligations of the Owner of the
Land Who Uses the Materials of Another
If the landowner acted in good faith, he becomes the
owner of the materials but he must pay for their value. The only
exception is when they can be removed without destruction to the
work made or to the plants. In such a case, the owner of the
materials can remove them.
If the landowner is in bad faith, he becomes the owner of
the materials but he must pay their value and damages, except
when the owner of the materials decides to remove them whether
or not destruction would be caused. (In this case, the materials
would still belong to the owner of said materials, who in addition
will still be entitled to damages).
Pacific Farms v. Esguerra
Held: Indeed, because we assumed that the appellee was in good
faith, we did not pronounce it liable for the reparation of damages but only
for the payment of the unpaid price of the lumber and construction
materials due to the appellant as unpaid furnisher thereof. Based on this
same assumption, we likewise held that the appellant has no right to remove
the materials but only to recover the value of the unpaid lumber and
construction materials. Thus, since the appellee benefited from the
accession, i.e., from the lumber and materials that went into the
construction of the six buildings, it should shoulder the compensation due
to the appellant as unpaid furnisher of materials, pursuant to the rule we
cited in our decision that compensation should be borne by the person who
has been benefited by the accession.
b. Rights and Obligations of the Owner of the
Materials
If the landowner acted in good faith, the owner of the
materials is entitled to reimbursement (provided he does not
remove them) and he is entitled to removal (provided no substantial
injury is caused).
If the landowner acted in bad faith, the owner of the
materials is entitled to the ABSOLUTE right of removal and
damages (whether or not substantial injury is caused). He is also
entitled to reimbursement and damages (in case he chooses not to
remove).
c. Rule When Both Parties are in Bad Faith
Regarding Article 447, what rule should apply if the
landowner and the owner of the materials are both in bad faith?
Consider them in good faith.
NOTE: The landowner himself makes the plantings,
constructs or works with the materials of another. In Article 448,
somebody else other than the landowner plants, constructs, or
works. There is no-ownership. The owner of the materials is not a
co-owner; he is only entitled to recover the value of the materials.
Pacific Farms v. Esguerra – in case of alienation, the
new owner of the land is liable because he has been benefited by
the improvements.
3. Builder in Good Faith
 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.
In this situation, there are actually two persons involved:
(1) the landowner; and (2) the builder, planter or sower (who is at
the same time the owner of the materials). In determining the legal
effects of this situation, it is necessary to take into consideration the
good faith or bad faith of both parties. The owner of the land does
not ipso facto become the owner of what had been planted on his
land by another. Firstly, we have to determine whether the planter
was in good faith or bad faith. Secondly, assuming that the planter
was in good faith, the landowner, should he desire to get the crops,
must first give the proper indemnification to the planter [Inter-
Regional Development Corp. v. Court of Appeals].
Pecson v. Court of Appeals
Held: Article 448 does not apply to a case where the owner of
the land is the builder, sower, or planter who then later loses ownership of
the land by sale or donation.  This Court said so in Coleongco vs. Regalado:
Article 361 of the old Civil Code is not applicable in this case,
for Regalado constructed the house on his own land before he sold said land
to Coleongco.  Article 361 applies only in cases where a person constructs a
building on the land of another in good or in bad faith, as the case may be.  planters believe themselves to be owners of the land
It does not apply to a case where a person constructs a building on his own
land, for then there can be no question as to good or bad faith on the part of
the builder.
Elsewise stated, where the true owner himself is the builder of
works on his own land, the issue of good faith or bad faith is entirely
irrelevant.
Thus in strict point of law, Article 448 is not apposite to the case
at bar.  Nevertheless, we believe that the provision therein on indemnity
may be applied by analogy considering that the primary intent of Article
448 is to avoid a state of forced co-ownership and that the parties, including
the two courts below, in the main agree that Articles 448 and 546 of the
Civil Code are applicable and indemnity for the improvements may be paid
although they differ as to the basis of the indemnity.
a. Good Faith
Clearly, Article 448 applies only when the builder,
planter or sower believes he has the right to so build, plant or sow
because he thinks he owns the land or believes himself to have a
claim of title [Morales v. Court of Appeals].
Good faith, here understood, is an intangible and abstract
quality with no technical meaning or statutory definition, and it
encompasses, among other things, an honest belief, the absence of
malice and the absence of design to defraud or to seek an
unconscionable advantage. An individual's personal good faith is a
concept of his own mind and, therefore, may not conclusively be
determined by his protestations alone. It implies honesty of
intention, and freedom from knowledge of circumstances which
ought to put the holder upon inquiry. The essence of good faith lies
in an honest belief in the validity of one's right, ignorance of a
superior claim, and absence of intention to overreach another.
Applied to possession, one is considered in good faith if he is not
aware that there exists in his title or mode of acquisition any flaw
which invalidates it [Arangote v. Sps. Maglunob]. The good faith
Page 28 of 121
ceases from the moment defects in the title are made known to the
possessor, by extraneous evidence or by suit for recovery of the
property by the true owner [Technogas v. Court of Appeals].
Pleasantville Dev’t Corp. v. Court of Appeals
Held: Good faith consists in the belief of the builder that the
land he is building on is his and his ignorance of any defect or flaw in his
title. And as good faith is presumed, petitioner has the burden of proving
bad faith on the part of Kee.
At the time he built improvements on Lot 8, Kee believed that
said lot was what he bought from petitioner. He was not aware that the lot
delivered to him was not Lot 8. Thus, Kee’s good faith. Petitioner failed to
prove otherwise.
Is bad faith imputed to a registered owner of a land
when his improvements encroach upon a neighbor’s land?
There is nothing in case law which would suggest,
however remotely, that bad faith is imputable to a registered owner
of land when a part of his building encroaches upon a neighbor’s
land, simply because he is supposedly presumed to know the
boundaries of his land as described in his certificate of title. No
such doctrinal statement could have been made in those cases
because such issue was not before the Supreme Court. Quite the
contrary, we have rejected such a theory in Co Tao vs.
Chico, where we held that unless one is versed in the science of
surveying, “no one can determine the precise extent or location of
his property by merely examining his paper title” [Technogas v.
Court of Appeals].
Applicable only to cases which the builders, sowers or
Jurisprudence is replete with cases which categorically
declare that Article 448 covers only cases in which the builders,
sowers or planters believe themselves to be owners of the land or,
at least, have a claim of title thereto, but not when the interest is
merely that of a holder, such as a mere tenant, agent or
usufructuary. A tenant cannot be said to be a builder in good faith
as he has no pretension to be owner. In a plethora of cases, this
Court has held that Articles 448 of the Civil Code, in relation to
Article 546 of the same Code, which allows full reimbursement of
useful improvements and retention of the premises until
reimbursement is made, applies only to a possessor in good faith,
i.e., one who builds on land with the belief that he is the owner
thereof. It does not apply where one's only interest is that of a
lessee under a rental contract; otherwise, it would always be in the
power of the tenant to "improve" his landlord out of his property
[Parilla v. Pilar].
Sulo sa Nayon v. Nayong Pilipino
Held: In the case at bar, petitioners have no adverse claim or
title to the land. In fact, as lessees, they recognize that the respondent is the
owner of the land. What petitioners insist is that because of the
improvements, which are of substantial value, that they have introduced on
the leased premises with the permission of respondent, they should be
considered builders in good faith who have the right to retain possession of
the property until reimbursement by respondent.
We affirm the ruling of the CA that introduction of valuable
improvements on the leased premises does not give the petitioners the right
of retention and reimbursement which rightfully belongs to a builder in
good faith. Otherwise, such a situation would allow the lessee to easily
"improve" the lessor out of its property. We reiterate the doctrine that a
lessee is neither a builder in good faith nor in bad faith that would call for
the application of Articles 448 and 546 of the Civil Code
 Exception
However, in some special cases, the Supreme Court has
used Article 448 by recognizing good faith beyond this limited
definition.  Thus, in Del Campo v. Abesia, this provision was
applied to one whose house – despite having been built at the time
he was still co-owner – overlapped with the land of another.  This
article was also applied to cases wherein a builder had constructed
improvements with the consent of the owner.  The Court ruled that
the law deemed the builder to be in good faith.  In Sarmiento v.
Agana, the builders were found to be in good faith despite their
reliance on the consent of another, whom they had mistakenly
believed to be the owner of the land.
The Supreme Court likewise applied Article 448
in Spouses Macasaet v. Spouses Macasaet  notwithstanding the fact
that the builders therein knew they were not the owners of the
land.  In said case, the parents who owned the land allowed their
son and his wife to build their residence and business thereon.  As
found by this Court, their occupation was not by mere tolerance but
“upon the invitation of and with the complete approval of (their
parents), who desired that their children would occupy the
premises.  It arose from familial love and a desire for family
solidarity x x x.”  Soon after, conflict between the parties arose.  option, either to pay for the building or to sell his land to the owner of the
The parents demanded their son and his wife to vacate the
premises.  The Court thus ruled that as owners of the property, the
parents have the right to possession over it.  However, they must
reimburse their son and his wife for the improvements they had
introduced on the property because they were considered builders
in good faith even if they knew for a fact that they did not own the
property.
Department of Education v. Casibang
Held: Moreover, the trial court ruled that the DepEd is a builder
in good faith. To be deemed a builder in good faith, it is essential that a
person asserts title to the land on which he builds, i.e., that he be a
possessor in the concept of owner, and that he be unaware that there exists
in his title or mode of acquisition any flaw which invalidates it. [50] However,
there are cases where Article 448 of the Civil Code was applied beyond the
recognized and limited definition of good faith, e.g., cases wherein the
builder has constructed improvements on the land of another with the
consent of the owner.[51] The Court ruled therein that the structures were
built in good faith in those cases that the owners knew and approved of the
construction of improvements on the property.
Despite being a possessor by mere tolerance, the DepEd is
considered a builder in good faith, since Cepeda permitted the construction
of building and improvements to conduct classes on his property. Hence,
Article 448 may be applied in the case at bar.
b. The choice or option belongs to the owner
of the land
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. Thus, the right of the builder in good
faith is the right to reimbursement for the improvements, that is, if
said improvements are appropriated by the owner of the land
[Quemuel v. Olaes].
Ignao v. Intermediate Appellate Court
Held: Petitioner's second assigned error is however well taken.  the land, was directly in issue before the Court of Appeals which definitely
Both the trial court and the Appellate Court erred when they peremptorily
adopted the “workable solution” in the case of Grana vs. Court of Appeals,  buy the houses built thereon.   As we have  already said, by our refusal to
and ordered the owner of the land, petitioner Florencio, to sell to private
respondents, Juan and Isidro, the part of the land they intruded upon,
thereby depriving petitioner of his right to choose.  Such ruling contravened
the explicit provisions of Article 448 to the effect that "(t)he owner of the
Page 29 of 121
land xxx shall have the right to appropriate xxx or to oblige the one who
built xxx to pay the price of the land xxx." The law is clear and
unambiguous when it confers the right of choice upon the landowner and
not upon the builder and the courts.
However, even as the option lies with the landowner, the
grant to him, nevertheless, is preclusive. He must choose one.
Hence, the landowner cannot refuse to exercise either option and
compel instead the owner of the building or improvement to
remove it from the land. The remedy of removal is available only if
and when the owner of the land chooses to compel the builder to
buy the land at a reasonable price but the latter fails to pay such
price. In a situation where the landowner is refusing to exercise any
of the options granted him under Article 448, the builder in good
faith can, under the same Article, compel the landowner to make a
choice between appropriating the building by paying the proper
indemnity or obliging the builder to pay the price of the land
[Technogas Philippines v. Court of Appeals].
Ignacio v. Hilario
Held: The owner of the land, upon the other hand, has the
building. But he cannot, as respondents here did, refuse both to pay for the
building and to sell the land and compel the owner of the building to
remove it from the land where it is erected. He is entitled to such remotion
only when, after having chosen to sell his land, the other party fails to pay
for the same. But this is not the case before us.
We hold, therefore, that the order of Judge Natividad compelling
defendants-petitioners to remove their buildings from the land belonging to
plaintiffs-respondents only because the latter chose neither to pay for such
buildings nor to sell the land, is null and void, for it amends substantially
the judgment sought to be executed and is, furthermore, offensive to articles
361 and 453 of the Civil Code.
Technogas v. Court of Appeals
Held: The private respondent’s insistence on the removal of the
encroaching structures as the proper remedy, which respondent Court
sustained in its assailed Decisions, is thus legally flawed. This is not one of
the remedies bestowed upon him by law. It would be available only if and
when he chooses to compel the petitioner to buy the land at a reasonable
price but the latter fails to pay such price. This has not taken place. Hence,
his options are limited to: (1) appropriating the encroaching portion of
petitioner’s building after payment of proper indemnity, or (2) obliging the
latter to buy the lot occupied by the structure. He cannot exercise a remedy
of his own liking.
Once the landowner,  has  made his choice, and has duly 
informed the court of said  choice,  and  is accordingly  ordered to
comply  with the  same by  buying the  building erected on  his
land and pay the value thereof fixed by the courts, that duty is
converted into a money obligation which can be  enforced by
execution,  regardless of the unwillingness and alleged inability of
the party concerned to  pay the amount [Tayag v. Court of
Appeals].
Tayag v. Court of Appeals
Held: The question of whether petitioners had  finally  made
their choice,  namely, to buy the houses because they were  unwilling to sell
decided that petitioners had made their choice not to sell their  land but to
review said decision of the Court of Appeals, we agreed with the said court
on its stand on this point; consequently, the trial court was fully warranted
in limiting the presentation  of evidence to the value of the said houses, not
of the land.
 As  regards the alleged inability of petitioners to pay the value  he is indemnified by the owner of the land. The builder in good
of the buildings finally fixed by the courts at P47,500, claimed by them to
be a good reason for not compelling them to buy the buildings,  we cannot
sanction  said theory. Otherwise, were that claim or contention to be
sustained, and if petitioners were allowed to change their mind, repudiate 
their choice made in court not to sell the land but to buy the buildings, and
then  compel the owners of the houses, respondents herein, instead to buy
land, then what if respondents also claimed  inability to pay the price of the
land, claiming that it is also a good and valid reason for not  compelling
them  to make the  purchase?  How would this litigation end, if it ever
would end?
c. The Indemnities to be Given
The following are the expenses to be given:
 Necessary Expenses. (Art. 546, par. 1).
 Useful Expenses. (Art. 546, par. 2).
 Luxurious Expenses — if he desires to
appropriate them for himself. (Art. 548).
In Pecson v. Court of Appeals, it was held that the
objective of Article 546 of the Civil Code is to administer justice
between the parties involved. In this regard, this Court had long
ago stated in Rivera vs. Roman Catholic Archbishop of Manila  that
the said provision was formulated in trying to adjust the rights of
the owner and possessor in good faith of a piece of land, to
administer complete justice to both of them in such a way as
neither one nor the other may enrich himself of that which does not
belong to him.  Guided by this precept, it is therefore the current
market value of the improvements which should be made the basis
of reimbursement. It is therefore the current market value of the
improvement which should be made the basis of reimbursement.
Republic v. Ballocanag
Held: This basic doctrine on unjust enrichment simply means
that a person shall not be allowed to profit or enrich himself inequitably at
another's expense. There is unjust enrichment when a person unjustly
retains a benefit to the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity and
good conscience.
The requisites for the application of this doctrine are present in
the instant case. There is enrichment on the part of the petitioner, as the
State would come into possession of -- and may technically appropriate --
the more than one thousand fruit-bearing trees planted by the private
respondent. There is impoverishment on the part of Reyes, because he
stands to lose the improvements he had painstakingly planted and invested
in. There is lack of valid cause for the State to acquire these improvements,
because, as discussed above, Reyes introduced the improvements in good
faith. Thus, the Court of Appeals did not commit any error in ruling that
Reyes is entitled to the benefits of Articles 448 and 546 of the Civil Code.
d. Rights of Landowner Before He Makes the
Choice
Before the landowner exercises the option, it is evident
that he is not yet the owner of whatever has been built, planted, or
sown, for his only right in the meantime is to exercise the option.
Neither builder nor landowner can oust each other, for until
indemnity is paid, the builder has the right of retention.
Pending Reimbursement, Builder Has Right of
Retention
In addition to the right of the builder in good faith to be
paid the value of his improvement, Article 546 of the New Civil
Code gives him the corollary right of retention of the property until
Page 30 of 121
faith may not, therefore, be required to pay rentals. This is so
because the right to retain the improvements while the
corresponding indemnity is not paid implies the tenancy or
possession in fact of the land on which it is built, planted or sown
[Pecson v. Court of Appeals].
However, Article 448 of the New Civil Code, in relation
to Article 546, which provides for full reimbursement of useful
improvements and retention of the premises until reimbursement is
made, applies only to a possessor in good faith, i.e., one who builds
on a land in the belief that he is the owner thereof. It does not apply
to a mere lessee, otherwise, it would always be in his power to
“improve” his landlord out of the latter’s property [Chua v. Court
of Appeals].
e. Applicability of the Article if the person
who builds, plants, or sows is a co-owner
It was held in Spouses del Campo vs. Abesia:
"The court a quo correctly held that Article 448 of
the Civil Code cannot apply where a co-owner builds, plants or
sows on the land owned in common for then he did not build,
plant or sow upon land that exclusively belongs to another but of
which he is a co-owner.  The co-owner is not a third person
under the circumstances, and the situation is governed by the
rules of co-ownership.
"However, when, as in this case, the ownership is
terminated by the partition and it appears that the home of
defendants overlaps or occupies a portion of 5 square meters of
the land pertaining to plaintiffs which the defendants obviously
built in good faith, then the provisions of Article 448 of the new
Civil Code should apply.  Manresa and Navarro Amandi agree
that the said provision of the Civil Code may apply even when
there is a co-ownership if good faith has been established”.
In other words, when the co-ownership is terminated
by a partition and it appears that the house of an erstwhile co-
owner has encroached upon a portion pertaining to another co-
owner which was however made in good faith, then the
provisions of Article 448 should apply to determine the
respective rights of the parties.
Can the planter, builder, or sower in good faith, after
discovering that the improvements introduced by him were built,
planted, or sown on another’s land, remove the improvements?
No. A planter in good faith cannot remove the
improvements he introduced in the land he purchased. Even if he is
legally entitled to do so, it would be a violation of the explicit
mandate under Article 547.
Republic v. Ballocanog
Held: To allow Reyes to remove the fruit-bearing trees now full-
grown on the subject land, even if he is legally entitled to do so, would be
risking substantial damage to the land. It would negate the policy
consideration underlying the AFFLA -- to protect and preserve the
biodiversity and the environment, and to prevent any damage to the land.
Further, it would violate the implicit mandate of Article 547 of the Civil
Code which provides:
ART. 547. If the useful improvements can be removed without
damage to the principal thing, the possessor in good faith may remove them
unless the person who recovers the possession exercises the option under
paragraph 2 of the preceding article.
In this light, the options that Reyes may exercise under Articles
448 and 546 of the Civil Code have been restricted. It is no longer feasible
to permit him to remove the trees he planted. The only equitable alternative
would be to order the Republic to pay Reyes the value of the improvements
he introduced on the property. This is only fair because, after all, by the
terms of the AFFLA, upon the expiration of the lease or upon its
cancellation if there be any violation or breach of its terms, all permanent
improvements on the land shall pass to the ownership of the Republic
without any obligation on its part to indemnify the lessee.
RULES TO REMEMBER:
 If the landowner is in good faith, he has two options: (1) the
right to appropriate anything that has been build, planted or
sown after payment of proper indemnity; or (2) to compel the
builder to buy the land unless the price of the land is
substantially higher than the improvements.
 The right of removal is limited. Generally, the landowner has
no right of removal. Except only after having selected a
compulsory sale and the builder, planter, or sower fails to pay
for the price of the land.
 Once the landowner makes a choice, it is irrevocable. If after
the landowner makes the choice of appropriation, he cannot
thereafter make the choice of compulsory sale.
4. Builder in Bad Faith
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.
Dr. Arturo Tolentino opines that in distinguishing good
faith and bad faith possession, the Code refers to the manner of
acquisition in general. A possessor in good faith is one who is
unaware that there exists a flaw which invalidates his acquisition of
the thing. Good faith consists in the possessor's belief that the
person from whom he received a thing was the owner of the same
and could convey his title. It consists in an honest intention to
abstain from taking any unconscientious advantage of another, and
is the opposite of fraud. Since good faith is a state of the mind, and
is not a visible, tangible fact that can be seen or touched, it can only
be determined by outward acts and proven conduct. It implies
freedom from knowledge and circumstances which ought to put a
person on inquiry [De Vera v. Court of Appeals].  damages to respondents is not supported by the evidence on record.[20]
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.
De Vera v. Court of Appeals
Held: Records disclose that prior to the construction in 1983 of
petitioners' house on the land under controversy, a demand
letter dated April 27, 1981 was sent by private respondent to the
petitioners, informing them that the land they were possessing and
occupying is within his (private respondent's) titled property.
In the same letter, the private respondent gave petitioner Agueda
de Vera the option to either pay him the value of the property or lease the
same on a yearly or monthly basis. However, the contending parties failed
to reach a compromise agreement. The lower court found, "that the
defendants (herein petitioners) are occupying ... an area of 22 square
meters in which land, defendants constructed a house of strong materials
in 1983 after dismantling heir (sic) previous building erected thereon on or
about January or February, 1970."
The facts and circumstances aforestated are "outward acts and
proven conduct" indicating bad faith of petitioners
as possessor and builder.
Pada-Kilaro v. Court of Appeals
Page 31 of 121
Held: Considering that petitioners were in possession of the
subject property by sheer tolerance of its owners, they knew that their
occupation of the premises may be terminated any time. Persons who
occupy the land of another at the latter's tolerance or permission, without
any contract between them, is necessarily bound by an implied promise that
they will vacate the same upon demand, failing in which a summary action
for ejectment is the proper remedy against them. Thus, they cannot be
considered possessors nor builders in good faith.
Ravina v. Villa-Abrille
Held: In the present case, the property is registered in the name
of Pedro and his wife, Mary Ann.  Petitioners cannot deny knowledge that
during the time of the sale in 1991, Pedro was married to Mary Ann.
However, Mary Ann’s conformity did not appear in the deed.  Even
assuming that petitioners believed in good faith that the subject property is
the exclusive property of Pedro, they were apprised by Mary Ann’s lawyer
of her objection to the sale and yet they still proceeded to purchase the
property without Mary Ann’s written consent.  Moreover, the respondents
were the ones in actual, visible and public possession of the property at the
time the transaction was being made.  Thus, at the time of sale, petitioners
knew that Mary Ann has a right to or interest in the subject properties and
yet they failed to obtain her conformity to the deed of sale.  Hence,
petitioners cannot now invoke the protection accorded to purchasers in
good faith.
Now, if a voidable contract is annulled, the restoration of what
has been given is proper.  The relationship between the parties in any
contract even if subsequently annulled must always be characterized and
punctuated by good faith and fair dealing. [17] Hence, in consonance with
justice and equity and the salutary principle of non-enrichment at another’s
expense, we sustain the appellate court’s order directing Pedro to return to
petitioner spouses the value of the consideration for the lot covered by TCT
No. T-88674 and the house thereon.
However, this court rules that petitioners cannot claim
reimbursements for improvements they introduced after their good faith had
ceased.  As correctly found by the Court of Appeals, petitioner Patrocinia
Ravina made improvements and renovations on the house and lot at the
time when the complaint against them was filed.  Ravina continued
introducing improvements during the pendency of the action.[18]
Thus, Article 449 of the New Civil Code is applicable.  It
provides that, “(h)e who builds, plants or sows in bad faith on the land of
another, loses what is built, planted or sown without right to indemnity.”[19]
On the last issue, petitioners claim that the decision awarding
The claim is erroneous to say the least.  The manner by which
respondent and her children were removed from the family home deserves
our condemnation.  On July 5, 1991, while respondent was out and her
children were in school, Pedro Villa Abrille acting in connivance with the
petitioners[21] surreptitiously transferred all their personal belongings to
another place.  The respondents then were not allowed to enter their rightful
home or family abode despite their impassioned pleas.
a. Right of Owner of the Land in Good Faith
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.
If the landowner has acted in good faith, i.e., he was not
aware that something was being built, planted or sown on his land
and he learned about only after it was done, and the builder, planter
or sower (who is at the same time the owner of the materials) has
acted in bad faith, the landowner can exercise any of the following
three rights and/ or remedies under Articles 449, 450 and 451:
 BPI v. Sanchez
Held: The Sanchezes are to elect their option
under the Arts. 449-450 of the
New Civil Code
Moreover, bad faith on the part of TSEI, Garcia and the
intervenors leads to the application of Articles 449-450 of the New Civil
Code, which provide:
Consequently, the Sanchezes have the following options: (1)
acquire the property with the townhouses and other buildings and
improvements that may be thereon without indemnifying TSEI or the
intervenors;[63] (2) demand from TSEI or the intervenors to demolish what
has been built on the property at the expense of TSEI or the intervenors; or
(3) ask the intervenors to pay the price of the land. [64]  As such, the
Sanchezes must choose from among these options within thirty (30) days
from finality of this Decision. Should the Sanchezes opt to ask from the
intervenors the value of the land, the case shall be remanded to the RTC for
the sole purpose of determining the fair market value of the lot at the time
the same were taken from the Sanchezes in 1988.
If the Sanchezes decide to appropriate the townhouses, other
structures and improvements as their own pursuant to Article 449 of the
Civil Code, then the intervenors-purchasers Caminas, Maniwang, Tulagan,
Marquez and VCTI shall be ordered to vacate said premises within a
reasonable time from notice of the finality of the decision by the
Sanchezes.  They have a right to recover their investment in the townhouses
from Garcia and TSEI. If the Sanchezes do not want to make use of the
townhouses and improvements on the subject lot, then the purchasers can
be ordered to demolish said townhouses or if they don’t demolish the same
within a reasonable time, then it can be demolished at their expense. On the
3rd option, if the Sanchezes do not want to appropriate the townhouses or
have the same demolished, then they can ask that the townhouse purchasers
pay to them the fair market value of the respective areas allotted to their
respective townhouses subject of their deeds of sale.
b. Damages
Article 451. In the cases of the two preceding articles, the
landowner is entitled to damages from the builder, planter, or sower.
The right of the owner of the land to recover damages
from a builder in bad faith is clearly provided for in Article 451 of
the Civil Code. Although said Article 451 does not elaborate on the
basis for damages, the Supreme Court perceives that it should
reasonably correspond with the value of the properties lost or
destroyed as a result of the occupation in bad faith, as well as the
fruits (natural, industrial or civil) from those properties that the
owner of the land reasonably expected to obtain [Heirs of Durano,
Sr. v. Sps. Uy].
c. Reimbursement
Article 452. The builder, planter or sower in bad faith is
entitled to reimbursement for the necessary expenses of preservation of
the land.
Articles 546 and 548 of the Civil Code provide:
Article 546. Necessary expenses shall be refunded to
every possessor; but only the possessor in good faith may retain
the thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the
possessor in good faith with the same right of retention, the
person who has defeated him in the possession having the option
of refunding the amount of the expenses or of paying the
increase in value which the thing may have acquired by reason
thereof.
Article 548. Expenses for pure luxury or mere
pleasure shall not be refunded to the possessor in good faith; but
Page 32 of 121
he may remove the ornaments with which he has embellished
the principal thing if it suffers no injury thereby, and if his
successor in the possession does not prefer to refund the amount
expended.
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 because, after all, the true owner would
have borne such expenses anyway, even if nothing had been built
on the land.
Necessary expenses have been variously described by the
Spanish commentators as those made for the preservation of the
thing (4 Manresa's Comentarios al Codigo Civil, p. 258); as those
without which the thing would deteriorate or be lost
(Scaevola's Comentarios al Codigo Civil, p. 408); as those that
augment the income of the things upon which they are expended (4
Manresa's Comentarios al Codigo Civil, p. 261; 8 Scaevola's
Comentarios al Codigo Civil, p. 416). Among the necessary
expenditures are those incurred for cultivation, production, upkeep,
etc. (4 Manresa's Comentarios al Codigo Civil, p. 257).
Princess Rachel Development v. Hill View
Held: Thus, petitioners have the right to appropriate what has
been built on its property, without any obligation to pay indemnity therefor.
Due to its bad faith, Hillview forfeits what it has built without any right to
be paid indemnity. While necessary expenses shall be refunded to the
builder, whether he built the same in good faith or in bad faith, PRDC's
properties were in fact not preserved but used, and were consequently
damaged, for the construction of Hillview's project. Notably, as well,
Hillview did not file a counterclaim for the refund of necessary expenses to
which it may have been entitled, if at all.50 Neither does Hillview have the
right of retention over the encroached portions as the right of retention is
afforded only to a possessor in good faith.
Should petitioners choose not to exercise its right to appropriate
the improvements as granted to it under Article 449 of the Civil Code, it
may exercise either of its alternative rights under Articles 450 and 451, i.e.,
(a) to demand the removal or demolition of what has been built at
Hillview's expense; or (b) to compel Hillview to pay the price or value of
the portions it had encroached upon, whether or not the value of the land is
considerably more than the value of the improvements.
These considered, the RTC's order to "demolish the buildings
and improvements made in the encroached premises at its own cost" should
be modified so as to correctly reflect the foregoing alternative rights given
to the landowner.
d. Landowner in Bad Faith
Article 453. If there was bad faith, not only on the part of the
person who built, planted or sowed on the land of another, but also on
the part of the owner of such land, the rights of one and the other shall
be the same as though both had acted in good faith.
It is understood that there is bad faith on the party of the
landowner whenever the act was done with his knowledge and without
opposition on his part.
The bad faith of one neutralizes the bad faith of the other
(3 Manresa 223), so both will be considered in good faith.
Alviola v. Court of Appeals
Held: As correctly ruled by the respondent court, there was bad
faith on the part of the petitioners when they constructed the copra dryer
and store on the disputed portions since they were fully aware that the
parcels of land belonged to Victoria Tinagan. And, there was likewise bad
faith on the part of the private respondents, having knowledge of the
arrangement between petitioners and Victoria Tinagan relative to the
construction of the copra dryer and store. Thus, for purposes of indemnity,
Article 448 of the New Civil Code should be applied.
Bliss Development v. Diaz
Held: The CA may have made the erroneous conclusion that
Diaz acted in good faith, but because BDC equally acted in bad faith, Art.
453 of the Civil Code commands that the rights of one and the other shall
be the same as though both had acted in good faith. The CA made the
correct observation then, when it said:
Under Article 448, the landowner is given the option, either to
appropriate the improvement as his own upon payment of the proper
amount of indemnity or to sell the land to the possessor in good faith.
Relatedly Article 546 provides that a builder in good faith is entitled to full
reimbursement for all the necessary and useful expenses incurred. In this
case, however, the option of selling the land to the builder in good faith is
no longer viable in light of the ruling in the interpleader case. Hence, there
is only one thing left for [BDC] to do: indemnify Diaz for the
improvements introduced on the property.
Nevertheless, because the law treats both parties as if they acted
in good faith, the CA committed reversible error in awarding moral and
exemplary damages, there being no basis therefor. We find it proper to
delete the award of P100,000.00 as moral damages, P50,000.00 as
exemplary damages, and P25,000.00 as attorney’s fees.
In sum, the CA correctly reversed the ruling of the RTC, and
ordered BDC to pay Diaz the amount he paid as amortizations, as well as
the value of the improvements that he introduced on the subject property.
However, because both parties acted in bad faith, there is no basis for the
award of moral and exemplary damages, as well as attorney’s fees.
5. Land Owner in Bad Faith and Builder in Good
Faith
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.
Article 447 governs the case of building, planting or
sowing on one’s own land with materials of another either in good
faith or in bad faith. The reason why said article applies may be
explained as follows: that if the landowner knew that something
was being built, planted or sown on his land by another and he did
not interpose any objection thereto, it is as if he was the one
building, planting or sowing in bad faith on his own land with
materials belonging to another, using the owner of the materials as
his worker. As a consequence, and pursuant to the provisions of
Article 447, the owner of the materials (who is at the same time the
builder, planter or sower in this case) acquires two alternative
rights, namely: (1) to demand the value of his materials, plus
damages; or (2) to demand the return of his materials in any event,
plus damages.
If he acted in GOOD FAITH, he is entitled to
reimbursement from the builder (or planter or sower) principally,
since it was the builder (or planter or sower) who FIRST made use
of the materials. In case of insolvency on the part of the builder, the
landowner is subsidiarily liable, if he makes use of the materials.
NOTE: The landowner is subsidiarily liable for the
payment of the value of the materials. This subsidiary liability,
however, of the owner of the land is only available if the following
conditions are met: (1) in case of insolvency of the builder, planter
or sower; and (2) the owner of the land appropriates the building,
planting or sowing. A fortiori, the owner of the land is not liable to
the owner of the materials if the former chooses to order the
demolition of the construction or the removal of the building,
planting or sowing which he has the right to do in case the builder,
planter or sower acted in bad faith. If the landowner pays for the
value of the materials, he becomes the owner thereof. In such a
situation, he may demand damages from the builder, planter or
sower if the latter acted in bad faith, or pay the builder, planter or
sower a reasonable compensation for his labor if the latter acted in
good faith.
Rights of the Builder, Planter or Sower
The rights of the builder, planter or sower shall be
determined depending on his good faith or bad faith.
If he acted in good faith in that he thought honestly that
both the land and the materials belonged to him, he may claim
from the landowner a reasonable compensation for his labor. This
is based on the principle that no person should be unjustly enriched
at the expense of another.
If he acted in bad faith in that he knew that the materials
he was using belonged to somebody else or that he had no right to
the land, then he is not entitled to anything. He may instead be
made to pay damages to the landowner.
7. Negligence
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.
It is possible that a person may be in good faith, and also
negligent. In fact, in negligence, there is no intent to do wrong. On
the other hand, bad faith presupposes an intent to cause damage or
prejudice. In case there be negligence, damages for his culpa will
arise under Article 2176.
C. ACCESSION NATURAL

6. Rights of Owner of the Materials

1. Alluvium

Article 455. If the materials, plants, or seeds belong to a

Article 457. To the owners of lands adjoining the banks of
third person who has not acted in bad faith, the owner of the land shall
rivers belong the accretion which they gradually receive from the
answer subsidiarily for their value and only in the event that the one
effects of the current of the waters.
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 With this article begins accession natural, the principal
seeds has been paid by the builder, planter or sower, the latter may forms of which are:
demand from the landowner the value of the materials and labor.
(a) alluvium. (Art. 457).
If he acted in BAD FAITH, he loses all rights to be (b) avulsion. (Art. 459).
indemnified. Moreover, he can even be liable for consequential (c) change of course of rivers. (Arts. 461-462).
damages (as when the materials are of an inferior quality). (d) formation of islands. (Arts. 464-465).

Page 33 of 121

Accretion is the process whereby the soil is deposited,
while alluvium is the soil deposited on the estate fronting the river
bank; the owner of such estate is called the riparian owner. Riparian
owners are, strictly speaking, distinct from littoral owners, the
latter being owners of lands bordering the shore of the sea or lake
or other tidal waters. The alluvium, by mandate of Article 457 of
the Civil Code, is automatically owned by the riparian owner from
the moment the soil deposit can be seen but is not automatically
registered property, hence, subject to acquisition through
prescription by third persons [Heirs of Navarro v. IAC].
Accretion benefits a riparian owner when the following
requisites are present:  (1) that the deposit be gradual and
imperceptible; (2) that it resulted from the effects of the current of
the water; and (3) that the land where accretion takes place is
adjacent to the bank of a river [Republic v. Court of Appeals].
 Thus, it is not enough to be a riparian owner in order to
enjoy the benefits of accretion. One who claims the right of
accretion must show by preponderant evidence that he has met all
the conditions provided by law. Petitioner has notably failed in this
regard as it did not offer any evidence to prove that it has satisfied
the foregoing requisites [New Regent v. Tanjuatco].
a. First Requisite
A sudden and forceful action like that of flooding is
hardly the alluvial process contemplated under Article 457 of the
New Civil Code. It is the slow and hardly perceptible accumulation
of soil deposits that the law grants to the riparian owner [Binalay v.
Manalo]. This is what distinguishes alluvion from avulsion. In
alluvion, the deposit of soil is gradual and imperceptible; whereas
in avulsion, it is sudden and abrupt.
Zapata v. Director of Lands
The appellant contends that article 457 of the Civil Code
providing that to the owners of lands adjoining the banks of river belong the
accretion which they gradually receive from the effects of the current of the
waters cannot apply and does not support the appellee's claim that the
accretion or deposit of alluvial soil, which is delimited in plan Psu-140515
and designated as Lots 1, 2 and 3, belongs to her as riparian owner, because
such accretion "was not due to the natural effect of the current but was
artificially induced on account of the erection of the fish traps on the
creek."
Held: The contention cannot be sustained. The appellant does
not dispute that the accreted land delimited in plan Psu-140515 and
designated as Lots 1, 2 and 3 adjoining Lot No. 25 and that part of Lot No.
16, both owned by the appellee, had been formed gradually due to the effect
of the water current of the Candalaga Creek, but claims that the accretion
was artificially brought about by the setting up of fish traps, such
as salag net, bunuan (bamboo trap), sabat (cutting of channels) and fencing
that the fishermen had built in the stream. True, those fish traps might have
slowed down the current of the Candalaga Creek and might have brought
about or caused the accretion, but as there is no evidence to show that the
setting up or erection of the fish traps was expressly intended or designed to
cause or bring about the accretion, the appellee may still invoke the benefit
of the provisions of article 457 of the Civil Code to support her claim of
title thereto. Moreover, the fishermen who since 1894 used to set up fish
traps in the creek (p. 7, t.s.n.), later on secured permit from the Government
that auctioned off the right or license to set up fish traps in the creek (p. 6,
t.s.n.), and the setting up of such fish traps stopped or was discontinued
even before 1926 (p. 7, t.s.n.), all go to show that the alluvial accretion was
not entirely due to the setting up of such fish traps.
Vda. De Nazareno v. Court of Appeals
Held: For petitioners to insist on the application of these rules on
alluvion to their case, the above-mentioned requisites must be present.
Page 34 of 121
However, they admit that the accretion was formed by the dumping of
boulders, soil and other filling materials on portions of the Balacanas Creek
and the Cagayan River bounding their land. It cannot be claimed, therefore,
that the accumulation of such boulders, soil and other filling materials was
gradual and imperceptible, resulting from the action of the waters or the
current of the Balacanas Creek and the Cagayan River.
Delos Reyes v. Municipality of Kalibo
Held: Here, Ignacio characterized the land in question as
swampy and its increase in size as the effect of the change of the shoreline
of the Visayan Sea, and not through the gradual deposits of soil coming
from the river or the sea. Also, Baltazar Gerardo, the Officer-in-Charge of
the Community Environment and Natural Resources Office of the Bureau
of Lands, found upon inspection in 1987 that the subject area was
predominantly composed of sand rather than soil. [13] One of the plaintiffs,
Javier, also testified that in 1974 or 1976, the Visayan Sea was around one
(1) kilometer from the land in question, and in 2003, the distance already
became around three (3) kilometers, giving the impression that the
increment was actually the result of additional area of sand deposits left by
the sea when it had receded, and not by gradual deposits of soil or sediment
caused by the action of water. In addition, the DENR has remained firm and
consistent in classifying the area as land of the public domain for being part
of either the Visayan Sea of the Sooc Riverbed and is reached by tide water.
Further, the Sheriffs Report dated July 13, 1998 shows that when he
conducted an ocular inspection of the area, part of it was reached by the
tide. At around 11:30 a.m., he was able to measure the deepest portion of
the high tide at around nineteen (19) inches, and its wideness at five (5)
meters near the concrete wall.
The drying up of the river is not accretion
The dried-up river bed belongs to the State as property of
public dominion, not to the riparian owner, unless a law vests the
ownership in some other person [Republic v. Santos III].
Republic v. Santos III
Held: Respondents did not show that the gradual and
imperceptible deposition of soil through the effects of the current of the
river had formed Lot 4998-B. Instead, their evidence revealed that the
property was the dried-up river bed of the Parañaque River, leading both
the RTC and the CA to themselves hold that Lot 4998-B was “the land
which was previously part of the Parañaque River xxx (and) became an
orchard after it dried up.”
b. Second Requisite
The requirement that the deposit should be due to the
effect of the current of the river is indispensable. This excludes
from Article 457 of the New Civil Code all deposits caused by
human intervention. Alluvion must be the exclusive work of nature
[Republic v. Court of Appeals]. Hence, the riparian owner does not
acquire the additions to his land caused by special works expressly
intended or designed to bring about accretion. Thus, in Tiongco v.
Director of Lands, where the land was not formed solely by the
natural effect of the water current of the river bordering said land
but is also the consequence of the direct and deliberate intervention
of man, it was deemed a man-made accretion and, as such, part of
the public domain [Vda de Nazareno v. Court of Appeals].
Vda de Nazareno v. Court of Appeals
Held: In the case at bar, the subject land was the direct result of
the dumping of sawdust by the Sun Valley Lumber Co. consequent to its
sawmill operations. Even if this Court were to take into consideration
petitioners' submission that the accretion site was the result of the late
Antonio Nazareno's labor consisting in the dumping of boulders, soil and
other filling materials into the Balacanas Creek and Cagayan River
bounding his land, the same would still be part of the public domain.
 c. Third Requisite
Under Article 457, the accretion must take place on a
land adjacent to the banks of the river. Note, however, that while
Article 457 mentions only of accretions on the banks of rivers, this
must be interpreted in conjunction with Article 84 of the Spanish
Law of Waters which provides:
“Accretions deposited gradually upon land
contiguous to creeks, streams, rivers and lakes, by accessions or
sediments from the water thereof, belong to the owners of such
lands.”
It is therefore explicit from the foregoing provisions that
alluvial deposits along the banks of a creek do not form part of the
public domain as the alluvial property automatically belongs to the
owner of the estate to which it may have been added. The only
restriction provided for by law is that the owner of the adjoining
property must register the same under the Torrens system;
otherwise, the alluvial property may be subject to acquisition
through prescription by third persons [Office of the City Mayor v.
Ebio].
Heirs of Navarro v. Intermediate Appellate Court
Held: First, the title of private respondents' own tract of land
reveals its northeastern boundary to be Manila Bay. Private respondents'
land, therefore, used to adjoin, border or front the Manila Bay and not any
of the two rivers whose torrential action, private respondents insist, is to
account for the accretion on their land. In fact, one of the private
respondents, Sulpicio Pascual, testified in open court that the waves of
Manila Bay used to hit the disputed land being part of the bay's foreshore
but, after he had planted palapat and bakawan trees thereon in 1948, the
land began to rise.
Moreover, there is no dispute as to the location of: (a) the
disputed land; (b) private respondents' own tract of land; (c) the Manila
Bay; and, (d) the Talisay and Bulacan Rivers. Private respondents' own land
lies between the Talisay and Bulacan Rivers; in front of their land on the
northern side lies now the disputed land where before 1948, there lay the
Manila Bay. If the accretion were to be attributed to the action of either or
both of the Talisay and Bulacan Rivers, the alluvium should have been
deposited on either or both of the eastern and western boundaries of private
respondents' own tract of land, not on the northern portion thereof which is
adjacent to the Manila Bay. Clearly lacking, thus, is the third requisite of
accretion, which is, that the alluvium is deposited on the portion of
claimant's land which is adjacent to the river bank.
Right of Riparian Owner to Alluvium Is Ipso Jure
The right of the owners of the bank adjacent to rivers to
the accretion which they receive by virtue of the action of the
waters of the river is ipso jure and there is no need of an action of
the owner of the bank to possess the new addition since it belongs
to him by the very fact of the addition [Roxas v. Tuason].
However, such accretion does not automatically become
registered land just because the lot which receives the same is
covered by Torrens title [Cureg v. IAC]. Thus, the accretion to
registered land does not preclude acquisition of the additional area
by another person through prescription [Reynante v. Court of
Appeals].
Grande v. Court of Appeals
We agree with the Court of Appeals that it does not, just as an
unregistered land purchased by the registered owner of the adjoining land
does not, by extension, become ipso facto registered land. Ownership of a
piece of land is one thing, and registration under the Torrens system of that
ownership is quite another. Ownership over the accretion received by the
land adjoining a river is governed by the Civil Code. Imprescriptibility of
Page 35 of 121
registered land is provided in the registration law. Registration under the
Land Registration and Cadastral Acts does not vest or give title to the land,
but merely confirms and thereafter protects the title already possessed by
the owner, making it imprescriptible by occupation of third parties. But to
obtain this protection, the land must be placed under the operation of the
registration laws wherein certain judicial procedures have been provided.
The fact remains, however, that petitioners never sought registration of said
alluvial property (which was formed sometime after petitioners' property
covered by Original Certificate of Title No. 2982 was registered on June 9,
1934) up to the time they instituted the present action in the Court of First
Instance of Isabela in 1958. The increment, therefore, never became
registered property, and hence is not entitled or subject to the protection of
imprescriptibility enjoyed by registered property under the Torrens system.
Consequently, it was subject to acquisition through prescription by third
persons.
Riparian Owners Distinguished From Littoral Owners
The owner of the estate fronting the river bank is called
the riparian owner. Riparian owners are, strictly speaking, distinct
from littoral owners, the latter being owners of lands bordering the
shore of the sea or lakes or other tidal waters [Heirs of Navarro v.
IAC].
Ponds and Lagoons
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.
Definitions
A pond is a body of stagnant water without an outlet,
larger than a puddle and smaller than a lake, or a like body of water
with a small outlet [Black’s Law Dictionary].
A lagoon is a small lake, ordinarily of fresh water, and
not very deep, fed by foods, the hollow bed of which is bounded by
the elevations of the land [Gov’t. v. Colegio de San Jose].
A Lake is a body of water formed in depressions of the
earth; ordinarily fresh water, coming from rivers, brooks, or springs
and connected with the sea by them. (Ibid.).
Article 458 applies when the estate adjoins:
(a) a pond;
(b) or a lagoon.
It does not apply when the estate adjoins a lake, a river, a
creek, or other streams [Government of the Philippine Islands. v.
Colegio de San Jose]. In such a case, the land left uncovered
reverts to the adjoining estate which owned it at the very
beginning.
Article 458 of the New Civil Code serves as an exception
to the general rule on alluvion. It is noteworthy that this article
refers only to ponds and lagoons but is not applicable to a lake
since with regard to a lake the rule of alluvion is applicable in
accordance with the Spanish Law of Waters. A lake has been
defined as body of water formed in depressions of the Earth,
ordinarily fresh water, coming from rivers, brooks or springs and
connected to the sea by them. A pond or lagoon on the other hand
is a small body of water, ordinarily of fresh water, and not very
deep, fed by floods, the hollow bed of which is bounded by
elevations of land [Gov’t v. Colegio de San Jose].
2. Avulsion
 Article 459. Whenever the current of a river, creek or
torrent segregates from an estate on its bank a known portion of land
and transfers it to another estate, the owner of the land to which the
segregated portion belonged retains the ownership of it, provided that
he removes the same within two years.
Avulsion the process whereby the current of a river,
creek, or torrent segregates from an estate on its bank a known
portion of land and transfers it to another estate. It is the removal of
a considerable quantity of earth upon or annexation to the land of
another, suddenly and by the perceptible action of the water.
The following are the requisites for avulsion:
a. It takes place only along the banks of rivers, creeks,
streams and lakes;
b. It is caused only by the force of the urrent of the
water independently of the act of man;
c. The deposit of soil is sudden and abrupt; and
d. The detached portion can be identified. In the
absence of evidence, however, that the change in the
course of river was sudden or that it occurred
through avulsion, the presumption is that the change
was gradual and caused by accretion and erosion
[C.N. Hodges v. Garcia].
Definition of River, Creek, Torrent
(a) River — a natural stream of water, of greater volume
than a creek or rivulet flowing, in a more or less permanent bed or
channel, between defined banks or walls, with a current which may
either be continuous in one direction or affected by the ebb and
flow of the tide.
(b) Creek — a small stream less than a river.
(c) Torrent — a violent, rushing, or turbulent stream.
Distinction between Alluvium and Avulsion
Alluvion and avulsion share the following similarities:
(1) that they both take place only along the banks of rivers, creeks,
streams and lakes; and (2) that they are caused only by the force of
the current of the waters independently of the act of man.
But they differ, as follows: (1) In alluvion the deposit of
soil is gradual; whereas, in avulsion it is sudden and abrupt; (2) In
alluvion the deposit of soil belongs to the owner of the property
where the same was deposited but in avulsion the owner of the
property from which a part was detached retains the ownership
thereof; (3) In alluvion, accession takes place immediately upon the
deposit of the soil; whereas, in avulsion the right of accession takes
place only after two years from the attachment or incorporation of
the segregated portion of land to the riparian land and only if its
owner fails to remove the same within said period; and (4) In
alluvion, the soil cannot be identifi ed; in avulsion, the detached
portion can be identifi ed. In the absence, however, of evidence that
the change in the course of river was sudden or that it occurred
through avulsion, the presumption is that the change was gradual
and caused by accretion and erosion.
NOTE: In the absence of evidence that the change in the
course of the river was sudden or that it occurred through alluvium,
the presumption is that the change was gradual and was caused by
alluvium and erosion [Payatas-Estate Improvement Co. v. Tuason].
a. Uprooted Trees
Page 36 of 121
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.
If trees are uprooted and carried away by the current of
the waters to another estate, the owner of the tree retains ownership
of the same but he is required to claim them within a period of six
months. Note that while avulsion with respect to a segregated
portion of land requires actual physical removal of the portion
detached within two years, the avulsion with respect to uprooted
trees merely require the owner of the tree to make a claim for the
same within a period of six months. If the uprooted trees have been
transplanted by the owner of the land upon which the trees may
have been cast and said trees have taken root in said land, then the
owner of the trees, upon making the claim, is required to refund the
expenses incurred in gathering them or in putting them in a safe
place, including the expenses incurred by the owner of the land for
the preservation of the trees.
b. Change of the Course of Rivers
Article 461. River beds which are abandoned through the
natural changes 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.
This article (461) refers to a natural change in the course
of a stream. If the change of the course is due to works constructed
by concessioners authorized by the government, the concession
may grant the abandoned river bed to the concessioners. If there is
no such grant, then, by analogy, the abandoned river bed will
belong to the owners of the land covered by the waters, as provided
in this article, without prejudice to a superior right of third persons
with sufficient title [Baes v. Court of Appeals].
It is clear under this provision that once the river bed has
been abandoned, the riparian owners become the owners of the
abandoned bed to the extent provided by this article. The
acquisition of ownership is automatic. There need be no act on the
part of the riparian owners to subject the accession to their
ownership, as it is subject thereto ipso jure  from the moment the
mode of acquisition becomes evident, without the need of any
formal act of acquisition. Such abandoned river bed had fallen to
the private ownership of the owner of the riparian land even
without any formal act of his will and any unauthorized occupant
thereof will be considered as a trespasser. The right in re to the
principal is likewise a right in re to the accessory, as it is a mode of
acquisition provided by law, as the result of the right of accretion.
Since the accessory follows the nature of the principal, there need
not be any tendency to the thing or manifestation of the purpose to
subject it to our ownership, as it is subject thereto ipso jure from
the moment the mode of acquisition becomes evident [Agne v.
Director of Lands].
Bagaipo v. Court of Appeals
Held: The decrease in petitioner's land area and the
corresponding expansion of respondent's property were the combined effect
of erosion and accretion respectively.  Art. 461 of the Civil Code is
inapplicable.  Petitioner cannot claim ownership over the old abandoned
riverbed because the same is inexistent.  The riverbed's former location
cannot even be pinpointed with particularity since the movement of the
Davao River took place gradually over an unspecified period of time, up to
the present.
c. New Bed on Private Property
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.
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 the abandonment.
In event of a natural change in the course of the waters of
the river, Article 462 of the New Civil Code expressly declares that
the new bed passing through a private estate shall become property
of public dominion. This rule is consistent with the provisions of
Article 502(1) of the New Civil Code and Article 5(a) of the Water
Code of the Philippines.
d. Formation of Islands on Rivers
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.
The Article refers to the “formation of island by the
branching off of a river” as distinguished from the “formation of
islands by successive accumulation of alluvial deposits
(unidentifiable sediment)” referred to in Articles 464 and 465. In
the first, no accession takes place, the owner retaining his
ownership of the segregated portion; in the second, accession takes
place.
Article 463 applies whether the river is navigable or not,
for in both cases, the owner should not be deprived of his dominion
over the segregated or isolated property
Example: A’s estate adjoins a river, but the river divides
itself into branches, thus affecting A’s property. A however
remains the owner of the portion (this time — an island) which: (a)
may be isolated from the rest (here, the portion has not physically
moved, but there is ISOLATION). (b) or may be separated from
the rest (here, the portion has physically moved — hence, the
SEPARATION).
e. Formation of Islands on the Seas
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.
Article 464 provides for a real case of accession
compared to the previous article (Article 463). In Article 464, an
island is formed on a sea, lake or navigable or floatable river
through whatever cause. Thus, the article clearly speaks of an
addition to the property of the State since the island thus formed is
expressly declared to be property of the latter. It has been said that
the island formed pursuant to the provisions of Article 464 forms
part of the patrimonial property of the State and, therefore, may be
sold by the State. Article 464 speaks of an island formed on a
navigable or floatable river. A river is considered to be navigable
Page 37 of 121
or floatable if it is able to carry the produce of the land along its
banks to the market
f. Formation of Islands through Successive
Accumulation of Alluvial Deposits
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.
Article 465, in turn, speaks of an island formed in non-
navigable or non-floatable rivers through successive accumulation
of deposit in the same manner as alluvion. Hence, if the island is
formed in navigable or floatable rivers, it is Article 464 that will
apply and not this article. If the island is formed through a sudden
and abrupt process due to segregation of identifiable portions of
land from an estate, it is Article 463 that will likewise apply and
not this article, whether the river is navigable or floatable or not.
If the requisites of Article 465 are complied with, the
ownership of the island thus formed shall be governed by the
following rules:
(1) It shall belong to the owner of the margins or banks
nearest to the island;
(2) If the island is in the middle of the river, the same
shall be owned by the owners of both margins, in which case it
shall be divided longitudinally in halves; or
(3) If the island be more distant from one margin than
from the other, the owner of the nearer margin shall be the sole
owner thereof.
The reason for this article is the same as in alluvion in
that the owners of the bank nearer the islands are in the best
position to cultivate and attend to the exploitation of the same. In
fact, no specific act of possession over the accretion is required. If,
however, the riparian owner fails to assert his claim thereof, the
same may yield to the adverse possession of third parties, as indeed
even accretion to land titled under the Torrens system must itself
be registered [Jagualing v. Court of Appeals].
D. ACCESSION WITH RESPECT TO MOVABLE
PROPERTY
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.
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. (380)
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. (382)
Article 474. One who in good faith employs the material of
another in whole or in part in order to make a thing of a different kind,
shall appropriate the thing thus transformed as his own, indemnifying
the owner of the material for its value.
If the material is more precious than the transformed thing
or is of more value, its owner may, at his option, appropriate the new
thing to himself, after first paying indemnity for the value of the work,
or demand indemnity for the material.
If in the making of the thing bad faith intervened, the owner
of the material shall have the right to appropriate the work to himself
without paying anything to the maker, or to demand of the latter that
he indemnify him for the value of the material and the damages he may
have suffered. However, the owner of the material cannot appropriate
the work in case the value of the latter, for artistic or scientific reasons,
is considerably more than that of the material. (383a)
Article 475. In the preceding articles, sentimental value shall
be duly appreciated. (n)
IV
QUIETING OF TITLE
A. ACTION TO QUIET TITLE
Page 38 of 121
Article 476. Whenever there is a cloud on title to real
property or any interest therein, by reason of any instrument, record,
claim, encumbrance or proceeding which is apparently valid or
effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be
brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being
cast upon title to real property or any interest therein.
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.
An action to quiet title is a common-law remedy for the
removal of any cloud or doubt or uncertainty on the title to real
property. It is essential for the plaintiff or complainant to have a
legal or an equitable title to or interest in the real property which is
the subject matter of the action. Also, the deed, claim,
encumbrance or proceeding that is being alleged as a cloud on
plaintiff's title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or legal efficacy
[Robles v. Court of Appeals].
In Realty Sales Enterprises v. IAC, the Supreme Court
held that suits to quiet title are not technically suits in rem, nor are
they, strictly speaking, in personam, but being against the person in
respect of the res, these proceedings are characterized as quasi in
rem and the judgment in such proceedings is conclusive only
between the parties.
For an action to quiet title to prosper, two indispensable
requisites must concur, namely: (1) the plaintiff or complainant has
a legal or an equitable title to or interest in the real property subject
of the action; and (2) the deed, claim, encumbrance, or proceeding
claimed to be casting cloud on his title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity
or legal efficacy [Dalisay v. SSS].
NOTE: Please observe that when the instrument is not
valid on its face, the remedy does not apply.
B. EXISTENCE OF A CLOUD
If a person were sued for ejectment on the strength of the
contract, does he have to produce evidence in order to defeat the
action? If no evidence other than the contract is needed, it is
because the contract is invalid on its face. If evidence is still
required, it is because the contract is apparently valid. Stated
otherwise, the test is: would the owner of the property in an action
at law brought by the adverse party, and founded upon the
instrument or claim, be required to offer evidence to defeat a
recovery? If proof would be essential, the cloud exists; if proof is
not needed, no cloud is cast.
A “cloud on title” is an outstanding instrument, record,
claim, encumbrance or proceeding which is actually invalid or
inoperative, but which may nevertheless impair or affect
injuriously the title to the property. The matter complained of must
have a prima facie appearance of validity or legal efficacy. The
cloud on title is a semblance of title which appears in some legal
form but which is in fact unfounded. The invalidity or
inoperativeness of the instrument is not apparent on the face of
such instrument, and it has to be proved by extrinsic evidence
[Aquino v. Quiazon]. Thus, a cloud on a title exists when: (1) there
is an instrument, record, claim, encumbrance or proceeding; (2)
which is apparently valid or effective; (3) but it is int ruth and in
fact invalid, ineffective, voidable, or unenforceable; and (4) may be
prejudicial to the title sought to be quieted [Ocampo v. Ocampo].
As a general rule, a cloud which may be removed by suit to quiet
title is not created by mere verbal or parol assertion of ownership
of or an interest in property. This rule is subject to qualification,
where there is a written or factual basis for the asserted right. Thus,
a claim of right based on acquisitive prescription or adverse
possession has been held to constitute a removable cloud on title
[Tandog v. Macapagal].
Ocampo v. Ocampo
Held: Since it was already established that respondent's
signature on the ESW, which was the basis of petitioner's title over the
property, was forged, then it is only necessary for the cloud on respondent's
title to be removed. Thus, the trial court's order to cancel TCT No. 102822
and uphold the parties' co-ownership was proper.
Tappa v. Bacud
Held: Spouses Tappa failed to meet these two requisites.
First, Spouses Tappa's claim of legal title over Lot No. 3341 by
virtue of the free patent and the certificate of title, OCT No. P-69103 issued
in their name cannot stand. The certificate of title indicates that it was
issued by virtue of Patent No. 021519-92-3194. We agree with the CA that
at the time of the application for free patent, Lot No. 3341 had already
become private land by virtue of the open, continuous, exclusive, and
notorious possession by respondents. Hence, Lot No. 3341 had been
removed from the coverage of the Public Land Act, which governs public
patent applications.
The settled rule is that a free patent issued over a private land is
null and void, and produces no legal effects whatsoever. Private ownership
of land as when there is a prima facie proof of ownership like a duly
registered possessory information or a clear showing of open, continuous,
exclusive, and notorious possession, by present or previous occupants—is
not affected by the issuance of a free patent over the same land, because the
Public Land Law applies only to lands of the public domain. The Director
of Lands has no authority to grant free patent to lands that have ceased to be
public in character and have passed to private ownership.
In Magistrado v. Esplana,[64] we cancelled the titles issued
pursuant to a free patent after finding that the lots involved were privately
owned since time immemorial. A free patent that purports to convey land to
which the Government did not have any title at the time of its issuance does
not vest any title in the patentee as against the true owner.
In this case, the parties were able to show that Lot No. 3341 was
occupied by, and has been in possession of the Tappa family, even before
the 1963 Affidavit was executed. After the execution of the 1963 Affidavit,
respondents occupied their respective portions of the property. Delfin
testified that before his father, Lorenzo, died in 1961, Lorenzo had been
occupying the lot since before the war, and that Delfin was born there in
1934.
Records show that Lorenzo declared Lot No. 3341 for taxation
purposes as early as 1948, and paid the real property taxes (evidenced by
real property tax payment receipts in the name of Lorenzo from 1952 until
his death in 1961). Spouses Tappa were likewise shown to pay the real
property taxes from 1961 to 2000. Similarly, respondents also declared
their respective portions of Lot No. 3341 for taxation in their names in
1994, and paid real property taxes on those portions from 1967 to
2004. Although tax declarations or realty tax payment of property are not
conclusive evidence of ownership, they are good indicia of possession in
the concept of owner, for no one in his right mind would be paying taxes
for a property that is not in his actual or constructive possession. They
constitute at least proof that the holder has a claim of title over the property.
Spouses Tappa also admitted in their complaint that sometime in
1963, Bacud and Malupeng started occupying portions of Lot No. 3341 and
planted crops on the property, while Calabazaron did the same on another
portion of the lot in the 1970's. The complaint stated further that since 1963,
the respondents "continuously occupied portion of the subject land.”
In view of the foregoing circumstances that show open,
continuous, exclusive and notorious possession and occupation of Lot No.
3341, the property had been segregated from the public domain. At the time
Page 39 of 121
the patent and the certificate of title were issued in 1992, Spouses Tappa
and their predecessors-in-interest were already in possession, at least to the
half of the lot, since 1934; and respondents were also in possession of the
other half since 1963. Therefore, the free patent issued covers a land
already segregated from the public domain.
In Heirs of Simplicio Santiago v. Heirs of Mariano E.
Santiago, we ruled, thus:
Considering the open, continuous, exclusive and notorious
possession and occupation of the land by respondents and their
predecessors in interests, they are deemed to have acquired, by operation of
law, a right to a government grant without the necessity of a certificate of
title being issued. The land was thus segregated from the public domain and
the director of lands had no authority to issue a patent. Hence, the free
patent covering Lot 2344, a private land, and the certificate of title issued
pursuant thereto, are void.
Records also show that Spouses Tappa were aware of
respondents' possession of the disputed portions of Lot No. 3341. They
even admitted such possession (since 1963) by respondents in their
complaint filed in 1999. Despite this, Spouses Tappa were able to obtain a
free patent of the whole property even if they were not in possession of
some of its portions. Therefore, Free Patent No. 021519-92-3194 and OCT
No. P-69103 are void not only because it covers a private land, but also
because they fraudulently included[76] respondents' portion of the property.
In Avila v. Tapucar, we held that "[i]f a person obtains a title under the
Torrens system, which includes by mistake or oversight land which can no
longer be registered under the system, he does not, by virtue of the said
certificate alone, become the owner of the lands illegally included."
In an action to quiet title, legal title denotes registered
ownership, while equitable title means beneficial ownership. [79] As
discussed, the free patent and the certificate of title issued to Spouses Tappa
could not be the source of their legal title.
Collateral Attack on Title
Section 48 of P.D. No. 1529 provides that “a certificate
of title shall not be subject to collateral attack. It cannot be altered,
modified, or canceled except in a direct proceeding in accordance
with law. Jurisprudence explains that an attack on a title when its
objective is to nullify the title, thereby challenging the judgment
pursuant to which the title was decreed. The attack os direct when
the objective is the annul or set aside the judgment, or enjoin its
enforcement. On the other hand, the attack is indirect or collateral
when, in an action to obtain a different relief, an attack on the
judgment is nevertheless made as an incident thereof [Filipinas
Eslon Manufacturing v. Heirs of Llanes]. However, raising the
invalidity of a certificate of title in an action for quieting of title is
not a collateral attack because it is central, imperative, and essential
in such an action that the complainant shows the invalidity of the
deed which casts cloud on his title [Ibid]. in other words, an action
for quieting of title does not amount to a collateral attack because
at the heart of the action for quieting of title is the genuineness of
the certificate of title [Roman Catholic Archbishop v. Soriano, Jr.].
the relief sought is certainly feasible since the objective of an
action to quiet title, as provided under Article 476 of the Civil
Code, is precisely to quiet, remove, invalidate, annul, and/or nullify
a cloud on title to real property or any interest therein by reason of
any instrument, record, claim, encumbrance or proceeding which is
apparently valid or effective but is in truth and in fact invalid,
ineffective, voidable, or unenforceable, and may be prejudicial to
said title [Syjuco v. Bonifacio].
Besides, what cannot be collaterally attacked is the
certificate of title and not the title. The certificate referred to is that
document issued by the Register of Deeds. By title, the law refers
to ownership which is represented by that document. Ownership is
different from certificate of title, the latter being only the best proof
of ownership of a piece of land. Title as a concept of ownership
should not be confused with the certificate of title as evidence of
such ownership although both are interchangeably used [Heirs of
Tappa v. Heirs of Bacud]. However, mere issuance of a certificate
of title in the name of any person does not foreclose the possibility
that the real property may be under co-ownership with persons not
named in the certificate, or that the registrant may only be a trustee,
or that other parties may have acquired interest over the property
subsequent to the issuance of the certificate of title. Stated
differently, placing a parcel of land under the mantle of the Torrens
system does not mean that ownership thereof can no longer be
disputed. The certificate cannot always be considered as conclusive
evidence of ownership [Ibid].
C. LEGAL OR EQUITABLE TITLE
Article 477. The plaintiff must have legal or equitable title
to, or interest in the real property which is the subject matter of the
action. He need not be in possession of said property.
Legal title denotes registered ownership, while equitable
title means beneficial ownership. In the absence of such legal or
equitable title, or interest, there is no cloud to be prevented or
removed. The competent court is tasked to determine the respective
rights of the complainant and other claimants, not only to place
things in their proper place, to make the one who has no rights to
said immovable respect and not disturb the other, but also for the
benefit of both, so that he who has the right would see every cloud
of doubt over the property dissipated, and he could afterwards
without fear introduce the improvements he may desire, to use, and
even to abuse the property as he deems best.
But 'for an action to quiet title to prosper, two
indispensable requisites must concur, namely: (1) the plaintiff or
complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (2) the deed, claim,
encumbrance, or proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy [Sps. Basa v. Vda De
Senly]. In order that a plaintiff may draw to himself an equitable
title, he must show that the one from whom he derives his right had
himself a right to transfer [Heirs of Extramadura v. Extramadura].  barred by extinctive prescription; and (4) and may be prejudicial to the title.
It is not necessary, therefore, that the person seeking to
quiet his title be the registered owner of the property in question
[Mamadsual v. Monson]. When Article 477 speaks of “title” to
property, it does not necessarily denote a certifi cate of title issued
in favor of the person filing the suit [Maestrado v. Court of
Appeals]. It can connote acquisitive prescription by possession in
the concept of an owner thereof.
Heirs of Extramadura v. Extramadura
Held: Contrary to the position taken by the CA, the Court finds
that Jose satisfactorily established his equitable title over the subject land
entitling him - and now, petitioners as his successors-in-interest - to the
removal of the cloud or doubt thereon, particularly, the claim of
respondents that they are the owners thereof. Un this case, Jose's title to the
subject land was derived through a contract of sale, as evidenced by a
notarized document denominated as Deed of Absolute Sale dated December
18, 1984, whereby the previous owner/s, Corazon, the widow of Alfredo,
transferred the subject land and two (2) other adjoining parcels to Jose for
and in consideration of P6,000.00, for which Jose duly paid the required
capital gains tax. That Corazon had the right to transfer the land by virtue of
her ownership thereof was clearly established during the trial.
Not only did Jose exercise his right as owner of the subject land
by receiving the fruits thereof, he likewise performed his duties by paying
taxes therefor, evidence of which he presented in court during
Page 40 of 121
trial. "Although tax declarations or realty tax payments of property are not
conclusive evidence of ownership, nevertheless, they are good indicia of
possession in the concept of owner for no one in his right mind would be
paying taxes for a property that is not in his actual or at least constructive
possession. They constitute at least proof that the holder has a claim of title
over the property. The voluntary declaration of a piece of property for
taxation purposes manifests not only one's sincere and honest desire to
obtain title to the property and announces his adverse claim against the
State and all other interested parties, but also the intention to contribute
needed revenues to the Government. Such an act strengthens one's bona
fide claim of acquisition of ownership."
Thus, by sheer preponderance of evidence, the Court concludes
that Jose - not only through the execution of the Deed of Absolute Sale in
his favor, but also as evinced by his exercise of the rights and obligations as
owner thereof- was able to prove his title over the subject land. Therefore,
the action for quieting of title in Civil Case No. 2005-7552 should prosper
to the benefit of his heirs, herein petitioners.
Dalisay v. SSS
Held: Additionally, it is well to emphasize that in order that an
action for quieting of title may prosper, it is essential that the plaintiff must
have legal or equitable title to, or interest in, the property which is the
subject-matter of the action.[96] Legal title denotes registered ownership,
while equitable title means beneficial ownership. In the absence of such
legal or equitable title, or interest, there is no cloud to be prevented or
removed.
Here, DDII having divested itself of any claim over the property
in favor of SSS by means of sale via dacion en pago, petitioner has lost its
title over the property which would give it legal personality to file said
action.
Thus, the CA did not err in dismissing the complaint for lack of
merit.
Tappa v. Bacud
Held: The second requisite for an action to quiet title is likewise
wanting. We find that; although an instrument (the 1963 Affidavit) exists,
and which allegedly casts cloud on Spouses Tappa's title, it was not shown
to be in fact invalid or ineffective against Spouses Tappa's rights to the
property.
A cloud on a title exists when (1) there is an instrument (deed,
or contract) or record or claim or encumbrance or proceeding; (2) which is
apparendy valid or effective; (3) but is, in truth and in fact, invalid,
ineffective, voidable, or unenforceable, or extinguished (or terminated) or
The 1963 Affidavit is no doubt an instrument, which appears to
be valid. It is dated and appears to be executed and signed by Delfin, his
mother, and sisters. It is also notarized by a public notary. It states that
Genaro originally owns the land described, and that one-half (1/2) of which
is actually owned by Irene as a co-heir. This is contrary to the claim of
Spouses Tappa that the property was solely Lorenzo's. Respondents' argue
that this affidavit evidences the title of their predecessor-in-interest over
Lot No. 3341 and effectively, theirs.
The 1963 Affidavit however, was not proven to be, in fact,
invalid, ineffective, voidable, or unenforceable, or extinguished (or
terminated) or barred by extinctive prescription. The CA correctly found
that Spouses Tappa's claim of force and intimidation m the execution of the
1963 Affidavit was "unsubstantiated." [82] The CA pointed out that, "[a]side
from the testimony of Delfin Tappa, no other evidence was presented to
prove the claim of force and intimidation, hence, it is at most, self-
serving."[83] Also, the 1963 Affidavit was duly notarized and, as such, is
considered a public document, and enjoys the presumption of validity as to
its authenticity and due execution.
Thus, we affirm the ruling of the CA that the requisites for an
action to quiet tub are wanting in this ease.
D. PRESCRIPTION
If the plaintiff is in possession of the property, the action
DOES NOT PRESCRIBE. While the owner continues to be liable
to 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 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. Thus, a buyer of land in 1931, who possesses it
from that date may still compel the seller’s successors-in-interest to
execute the proper deed of conveyance in 1954, so that the deed
may be registered [Sapto v. Fabiana]. Prescription cannot be
invoked in an action for reconveyance, which is, in effect an action
to quiet title against the plaintiff therein who is in possession of the
land in question.  As lawful possessor and owner of the disputed
portion, her cause of action for reconveyance which, in effect,
seeks to quiet title to property in one's possession
is imprescriptible [Fernandez v. Court of Appeals].
If the plaintiff is NOT in possession of the property, the
action MAY PRESCRIBE. If somebody else has possession, the
period of prescription for the recovery of the land is either 10 or 30
years, depending on ordinary or extraordinary prescription
An action to quiet title or to remove cloud may not be
brought for the purpose of settling a boundary dispute
There is no allegation or evidence of any muniment of
title, proceeding, written contract, or paper showing any color of
title in the defendant, which could cast a shadow on the title of
complainants to any part of the land; there is no overlapping of
description in the muniments held by either. The land of
complainants and defendant join. The line which separates them is
in dispute and is to be determined by evidence aliunde. Each
admits that the other has title up to his line wherever it may be, and
the title papers of neither fix its precise location. So that there is no
paper the existence of which clouds the title of either party, and
nothing could be delivered up and cancelled under the decree of the
court undertaking to remove a cloud [Vda De Aviles v Court of
Appeals].
Vda. De Aviles v. Court of Appeals
Held: Petitioners  have wholly misapprehended the  import of
the foregoing rule by claiming that respondent Court  erred in  holding  that  of the co-ownership, therefore, no co-owner can claim title to any
there was "no xxx evidence of any muniment of title, proceeding, written
contract, xxx", and that there were, as a matter of fact, two such contracts,
viz., (i) the Agreement of Partition executed by private respondent and his
brothers (including the petitioners’ father and predecessor-in-interest), in
which their respective shares in the inherited property were agreed upon,
and (ii) the Deed of Sale evidencing the redemption by petitioner Anastacia
Vda. de Aviles of the subject property in a foreclosure sale. However, these
documents in no way constitute a cloud or cast a doubt upon the title of
petitioners. Rather, the uncertainty arises from the parties’ failure to situate
and fix the boundary between their respective properties.
As correctly held by the respondent Court, "(i)n fact, both
plaintiffs and defendant admitted the existence of the agreement of partition
dated June 8, 1957 and in accordance therewith, a fixed area was alloted
(sic) to them and that the only controversy is whether these lands were
properly measured. There is no adverse claim by the defendant"which is
apparently valid, but is, in truth and in fact, invalid, ineffective, voidable, or
unenforceable" and which constitutes a cloud thereon.
Corollarily, and equally as clear, the construction of the bamboo
fence enclosing the disputed property and the moving of earthen dikes are
not the "clouds" or "doubts" which can be removed in an action for quieting
of title.
V
CO-OWNERSHIP
Page 41 of 121
A. CO-OWNERSHIP DEFINED
Article 484. There is co-ownership whenever the ownership
of an undivided thing or right belongs to different persons. In default
of contracts, or of special provisions, co-ownership shall be governed
by the provisions of this Title.
Co-ownership is that state where an undivided thing or
right belongs to two or more persons. It is “the right of common
dominion which two or more persons have in a spiritual (or ideal)
part of a thing which is not physically divided.” A co-ownership is
not a juridical person, nor is it granted any form of juridical
personality. Thus, it cannot sue in court. Co-owners may, of
course, litigate in their individual capacities.
Mere construction of a house on another's land does not
create a co-ownership. Article 484 of the Civil Code provides that
co-ownership exists when the ownership of an undivided thing or
right belongs to different persons. Verily, a house and a lot are
separately identifiable properties and can pertain to different
owners [Pidlaoan v. Pidlaoan].
In the case of Samaniego v. Villajin, the Supreme Court
held that under this Article, co-ownership may exist as to rights,
and is not limited to corporeal things.
1. Characteristics of co-ownership
a. Plurality of subjects;
b. Singularity or unity of object, there is one undivided
object;
c. Recognition of ideal shares.
In de Guia v. Court of Appeals, the Supreme Court held
that there is no co-ownership when the different portions owner by
different people are already concretely determined and separately
identifiable even if not yet technically described.
By the nature of co-ownership, a co-owner cannot point
to specific portion of the property owned in common as his own
because his share therein remains intangible. During the existence
definite portion of the community property until the partition
thereof, and prior to the partition, all that the co-owner has is an
ideal or abstract quota or proportionate share in the entire land or
thing [City of Mandaluyong v. Aguilar]. In Vda. de Cabrera v.
Court of Appeals, however, the Supreme Court had the occasion to
hold that where the transferees of an undivided portion of the land
allowed a co-owner of the property to occupy a definite portion
thereof, the possessor is in a better condition or right than said
transferees. Such undisturbed possession, according to the Court,
had the effect of a partial partition of the co-owned property which
entitles the possessor to the definite portion which he occupies.
2. What Governs Co-ownership
(a) contracts
(b) special legal provisions
(c) provisions of the Title on Co-ownership
In default of the 1st, apply the 2nd; in the absence of the
2nd, apply the 3rd.
3. Sources of Co-ownership
 Co-ownership may be created by any of the following
causes:
(a) By law: Examples:
(a) Co-ownership will arise if by the will of their
owners two things of the same kind or different kinds are
mixed.37 Co-ownership will likewise arise if by the will of only
one owner, but in good faith, two things of the same or different
kinds are mixed or confused.
(b) When a man and woman who are capacitated to
marry each other, live exclusively with each other as husband
and wife without the benefit of marriage or under a void
marriage, the property acquired by both of them through their
work or industry shall be governed by the rules on co-
ownership. In cases of cohabitation not falling under Article 147
of the Family Code, only the properties acquired by both of the
parties though their actual joint contribution of money, property,
or industry shall be owned by them in common in proportion to
their respective contributions.
(b) By contract: An agreement to keep the thing
undivided for a certain period, not exceeding ten years, shall be
valid. This term may be extended by a new agreement.
(c) By succession: Where there are two or more heirs,
the whole estate of the decedent is, before its partition, owned in
common by such heirs, subject to the payment of debts of the
deceased. The testator may likewise prohibit the partition of the
estate among the heirs for a period not to exceed twenty (20) years.
(d) By fortuitous event or chance: Co-ownership will
arise if two things of the same kind or different kinds are mixed by
chance and the things are not separable without injury.
(e) By occupancy: As when two or more persons catch a
wild pig or get forest products45 or when a hidden treasure is
accidentally discovered by a stranger, who is not a trespasser, on
the land of another.
4. Distinctions from Other Contracts
a. Distinguished From Partnership
Co-ownership does not of itself establish a partnership,
whether such co-owners do or do not share any profi ts made by
the use of the property. These two concepts are not identical and
they may be distinguished from each other, as follows:
(i) As to creation: Co-ownership may exist without the
necessity of a contract. As will be discussed in infra § 62.7, a co-
ownership is created not only by reason of contracts. A partnership,
on the other hand, requires the existence of a contract in order to
arise. The definition by the Civil Code of a partnership refers to it
as a contract.
(ii) As to personality: A co-ownership does not possess
a juridical personality distinct from the co-owners. On the other
hand, the partnership has a juridical personality separate and
distinct from that of each of the partners.
(iii) As to purpose: In order to constitute a partnership, it
is important that there must be an agreement to divide the profits
among the partners. Hence, the idea of common profit that may be
derived from the things or services contributed to the partnership is
an essential feature thereof. This is absent, however, in co-
ownership, which is only for the purpose of common enjoyment of
the thing owned in common.
(iv) As to duration: In co-ownership, an agreement not
to divide the property for more than ten (10) years is not valid with
respect to the excess; whereas, in partnership there is no limit as to
the time of its existence.
Page 42 of 121
(iv) As to the effect of death: In co-ownership, the death
of a coowner does not dissolve the co-ownership, but in partnership
the death of a partner brings about the dissolution of the
partnership.
(v) As to the disposal of share: In co-ownership, a co-
owner may freely dispose of his share but a partner has no power
of disposal so as to make the buyer a partner unless agreed upon by
all the other partners.
B. SHARE IN BENEFITS AND CHARGES
Art. 485. The share of the co-owners, in the benefits as well
as in the charges, shall be proportional to their respective interests.
Any stipulation in a contract to the contrary shall be void. The portions
belonging to the co-owners in the co-ownership shall be presumed
equal, unless the contrary is proved.
The following are the rules on the shares of co-owners in
the benefits and charges:
a. The share in the benefits and charges is proportional
to the interest of each. Hence, if one co-owner owns
2/3, he shares 2/3 of the taxes;
b. Contrary stipulation is void. To do so would be to
run against the nature of co-ownership;
c. Each co-owner shares proportionately in the
accretion or alluvium of the property. This is
because an increase in area benefits all.
C. USE OF THE PROPERTY OWNED IN COMMON
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.
1. Used only according to the purpose for which it
was intended;
To determine the purpose for which the property is
intended, the agreement of the co-owners (express or implied)
should govern. In default of any agreement: (1) that to which the
thing is ordinarily adapted according to its nature or; (2) the use to
which it has been previously devoted.
Thus, if the co-owners of a vessel agree that it shall be
used as a warehouse or storage place for grain, one of the co-
owners cannot order the grain removed and use the vessel for
maritime transportation. Mere tolerance on the part of the co-
owners cannot legalize the change in the use of the thing from that
intended by the co-owners. Prescription cannot be invoked to
establish a right to such different use, because mere tolerance
cannot be the basis of prescription.
In the case of Aguilar v. Court of Appeals, it was held
that being a co-owner respondent has the right to use the house and
lot without paying any compensation to the petitioner, as he may
use the property owned in common so long as it is in accordance
with the purpose which it is intended and in a manner not injurious
to the interest of the other co-owners.
Each co-owner of property held pro indiviso exercises his
rights over the whole property and may use and enjoy the same
with no other limitation than that he shall not injure the interest of
his co-owners, the reason being that until a division is made, the
respective share of each cannot be determined and every co-owner
exercises, together with his co-participants joint ownership over the
pro indiviso property, in addition to his use and enjoyment of the
same.
2.The right to use must not prejudice the interest
of the co-owners
A co-owner cannot devote community property to his
exclusive use to the prejudice of the co-ownership. Thus, where the
co-owners have agreed to lease a building owned in common, a co-
owner cannot retain it for his use without paying the proper rent.
3. The right to use must not be exercised to prevent
others from making use thereof according to
their own right
The right of enjoyment by each co-owner is limited by a
similar right of the other co-owners. Thus, a co-owner cannot
devote common property to his exclusive use to the prejudice of
the co-ownership [De Guia v. Court of Appeals]. Hence, if the
subject is a residential house, all the co-owners may live there with
their respective families to the extent possible. However, if one co-
owner alone occupies the entire house without opposition from the
other co-owners, and there is no lease agreement, the other co-
owners cannot demand the payment of rent. Conversely, if there is
an agreement to lease the house, the co-owners can demand rent
from the co-owner who dwells in the house.
The co-owners can either exercise an equal right to live
in the house, or agree to lease it. If they fail to exercise any of these
options, they must bear the consequences. It would be unjust to
require the coowner to pay rent after the co-owners by their silence
have allowed him to use the property.
In case the co-owners agree to lease a building owned in
common, a co-owner cannot retain it for his use without paying the
proper rent. Moreover, where part of the property is occupied
exclusively by some co-owners for the exploitation of an industry,
the other co-owners become co-participants in the accessions of the
property and should share in its net profits.
D. RIGHT TO FILE EJECTMENT CASE
Article 487. Any one of the co-owners may bring an action in
ejectment.
This article covers all kinds of action for the recovery of
possession, i.e., forcible entry and unlawful detainer (accion
interdictal), recovery of possession (accion publiciana), and
recovery of ownership (accion de reivindicacion). As explained by
the renowned civilest, Professor Arturo M. Tolentino:
A co-owner may bring such an action, without the
necessity of joining all the other co-owners as co-plaintiffs,
because the suit is deemed to be instituted for the benefit of
all. If the action is for the benefit of the plaintiff alone, such that
he claims possession for himself and not for the co-ownership,
the action will not prosper.
In the more recent case of Carandang v. Heirs of De
Guzman, this Court declared that a co-owner is not even a
necessary party to an action for ejectment, for complete relief can
be afforded even in his absence, thus:
Page 43 of 121
In sum, in suits to recover properties, all co-owners
are real parties in interest. However, pursuant to Article 487 of
the Civil Code and the relevant jurisprudence, any one of them
may bring an action, any kind of action for the recovery of co-
owned properties. Therefore, only one of the co-owners, namely
the co-owner who filed the suit for the recovery of the co-owned
property, is an indispensable party thereto. The other co-owners
are not indispensable parties. They are not even necessary
parties, for a complete relief can be afforded in the suit even
without their participation, since the suit is presumed to have
been filed for the benefit of all co-owners
Castigador v. Lauron
In this case, although petitioner alone filed the complaint for
unlawful detainer, he stated in the complaint that he is one of the heirs of
the late Lilia Castigador, his mother, who inherited the subject lot, from her
parents. Petitioner did not claim exclusive ownership of the subject lot, but
he filed the complaint for the purpose of recovering its possession which
would redound to the benefit of the co-owners. Since petitioner recognized
the existence of a co-ownership, he, as a co-owner, can bring the action
without the necessity of joining all the other co-owners as co-plaintiffs.
Plasabas v. Court of Appeals
Held: Here, the allegation of petitioners in their complaint that
they are the sole owners of the property in litigation is immaterial,
considering that they acknowledged during the trial that the property is co-
owned by Nieves and her siblings, and that petitioners have been authorized
by the co-owners to pursue the case on the latter’s behalf. Impleading the
other co-owners is, therefore, not mandatory, because, as mentioned earlier,
the suit is deemed to be instituted for the benefit of all.
1. Action Against Co-Owner
Any co-owner may file an action under Article 487
not only against a third person, but also against another co-
owner who takes exclusive possession and asserts exclusive
ownership of the property. In the latter case, however, the only
purpose of the action is to obtain recognition of the co-ownership.
The plaintiff cannot seek exclusion of the defendant from the
property because as co-owner he has a right of possession. The
plaintiff cannot recover any material or determinate part of the
property.
In Hermogena G. Engreso with Spouse Jose Engreso v.
Nestoria De La Cruz and Herminio De La Cruz, we reiterated the
rule that a co-owner cannot recover a material or determinate part
of a common property prior to partition as follows:
It is a basic principle in civil law that before a
property owned in common is actually partitioned, all that the
co-owner has is an ideal or abstract quota or proportionate share
in the entire property. A co-owner has no right to demand a
concrete, specific or determinate part of the thing owned in
common because until division is effected his right over the
thing is represented only by an ideal portion.
As such, the only effect of an action brought by a co-
owner against a co-owner will be to obtain recognition of the co-
ownership; the defendant cannot be excluded from a specific
portion of the property because as a co-owner he has a right to
possess and the plaintiff cannot recover any material or
determinate part of the property. Thus, the courts a quo erred
when they ordered the delivery of one-half (½) of the building in
favor of private respondent.
De Guia v. Court of Appeals
Held: Indisputably, DE GUIA has been in exclusive possession
of the entire FISHPOND since July 1974. Initially, DE GUIA disputed
ABEJO's claim of ownership over the ½ undivided portion of the
FISHPOND. Subsequently, he implicitly recognized ABEJO's ½ undivided
share by offering to settle the case for P300,000 and to vacate the property.
During the trial proper, neither DE GUIA nor ABEJO asserted or
manifested a claim of absolute and exclusive ownership over the entire
FISHPOND. Before this Court, DE GUIA limits the issues to the propriety
of bringing an action for recovery of possession and the recovery of
compensatory damages.
Following the inherent and peculiar features of co-ownership,
while ABEJO and DE GUIA have equal shares in the FISHPOND
quantitatively speaking, they have the same right in a qualitative sense as
co-owners. Simply stated, ABEJO and DE GUIA are owners of the whole
and over the whole, they exercise the right of dominion. However, they are
at the same time individual owners of a ½ portion, which is truly abstract
because until there is partition, such portion remains indeterminate or
unidentified. As co-owners, ABEJO and DE GUIA may jointly exercise the
right of dominion over the entire FISHPOND until they partition the
FISHPOND by identifying or segregating their respective portions.
Since a co-ownership subsists between ABEJO and DE GUIA,
judicial or extra-judicial partition is the proper recourse. An action to
demand partition is imprescriptible and not subject to laches.[22] Each co-
owner may demand at any time the partition of the common property unless
a co-owner has repudiated the co-ownership under certain
conditions. Neither ABEJO nor DE GUIA has repudiated the co-ownership
under the conditions set by law.
To recapitulate, we rule that a co-owner may file an action for
recovery of possession against a co-owner who takes exclusive possession
of the entire co-owned property. However, the only effect of such action is
a recognition of the co-ownership. The courts cannot proceed with the
actual partitioning of the co-owned property. Thus, judicial or extra-judicial
partition is necessary to effect physical division of the FISHPOND between
ABEJO and DE GUIA. An action for partition is also the proper forum for
accounting the profits received by DE GUIA from the FISHPOND.
However, as a necessary consequence of such recognition, ABEJO shall
exercise an equal right to possess, use and enjoy the entire FISHPOND.
2. Effect of Judgment Upon the Other Co-Owners
While a co-owner may bring an action in ejectment under
Article 487 without the necessity of joining all the other co-owners
as co-plaintiffs because the suit is deemed to be instituted for the
benefit of all, any adverse judgment cannot prejudice the rights of
the unimpleaded co-owners [Baloloy v. Hular]. However, any
judgment of the court in favor of the co-owner will benefit the
others.
E. EXPENSES FOR PRESERVATION AND TAXES
1. Right to Demand Contribution
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. (VIP)
The law grants each co-owner the right to demand
contribution from the other co-owners for any and all expenses he
incurred for the purpose of preserving the thing or right owned in
common, even if the repairs for preservation were made without
the consent of the other co-owners. Note that under Article 489, a
co-owner who desires to make the necessary repairs is not required
to secure the consent of all the co-owners. What the law requires is
that he must, if practicable, notify the other co-owners of the
necessity of such repair prior to undertaking the same.
Consequently, any opposition on the part of the other co-owners
Page 44 of 121
for the making of such necessary repairs does not deprive the co-
owner who made the advances from demanding contributions from
the other co-owners. Note that under the law, repairs for
preservation may be made at the will of only one of the co-owners.
A co-owner who redeems the property in its entirety does
not make him the owner of all of it. The property remains in a
condition of co-ownership as the redemption does not provide for a
mode of terminating a co-ownership [Paulmitan v. Court of
Appeals]. But the one who redeemed has the right to be reimbursed
for the redemption price and until reimbursed, holds a lien upon the
subject property for the amount due [Cabales v. Court of Appeals].
The failure of the other co-owners to reimburse the amounts
advanced by the one who redeemed in payment of the loan does
not entitle the latter to claim full ownership of the co-owned
property. It only gives him the right to claim reimbursement for the
amounts he advanced in behalf of the co-ownership. Such advance
payments are in the nature of necessary expenses for the
preservation of the co-ownership. Article 488 of the Civil Code
provides that necessary expenses may be incurred by one co-
owner, subject to his right to collect reimbursement from the
remaining co-owners. Until reimbursed, he holds a lien upon the
subject property for the amount he advanced [Taghoy v. Tigol, Jr.].
a. Option of renunciation
While the other co-owners can be compelled to
contribute proportionately to the expenses incurred for the purpose
of preserving the thing or right owned in common, they are given
by law an option of “renouncing so much of (their) undivided
interest as may be equivalent to (their) share of the expenses and
taxes,” in lieu of paying their proportionate contribution to such
expenses.
For example, A, B and C are co-owners of a car valued at
P300,000.00. Assuming that “A” had the car repaired for the
purpose of preserving it and incurred the sum of P30,000.00 in the
process. Assuming that the interest of the three in the co-ownership
is equal (or P100,000.00 each), B and C is required to contribute
P10,000.00 each to the expenses so incurred. If “B,” for example,
does not want to shell out P10,000.00 and opts, instead, to
renounce so much of his undivided interest as may be equivalent to
his share of the expenses, he is required to renounce 1/10 of his
share in favor of the co-owner who incurred the expenses.
b. Limitation on the Exercise of the Option of
Renunciation
Article 488 prohibits the exercise of the option of
renunciation if it is prejudicial to the interest of the co-ownership.
For example, if A, B and C are co-owners of a property which is in
need of immediate repairs for preservation but the amount thereof
is more than A and B, together, can sustain, the law will not allow
C to opt for renunciation, in lieu of his contribution to the
expenses.100 Such waiver is not allowed because it will be
prejudicial to the interest of the co-ownership.
2. Repairs for Preservation
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.
 What the law requires prior to the undertaking of any
repair on the property owned in common for the purpose of
preserving it is mere notice to the other co-owners of the necessity
of such repair. In other words, a co-owner who desires to undertake
such repair is not required to secure the consent of the other co-
owners. The giving of notice, however, is required only if the same
is “practicable” given the circumstances by which the repair is to
be undertaken. Hence, if the repairs are urgent and any delay will
be detrimental to the interest of the co-ownership, prior notification
is no longer necessary and a co-owner may already undertake such
repairs without need of giving prior notice to the other co-owners.
In Adille v. Court of Appeals, it was held that neither
does the fact that the petitioner had succeeded in securing title over
the parcel in his name terminate the existing co-ownership. While
his half-brothers and sisters are, as we said, liable to him for
reimbursement as and for their shares in redemption expenses, he
cannot claim exclusive right to the property owned in common.
Registration of property is not a means of acquiring ownership. It
operates as a mere notice of existing title, that is, if there is one.
F. PERPENDICULAR CO-OWNERSHIP
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 fi rst to the second
story shall be preserved at the expense of all, except the owner of the
ground fl or and the owner of the first story; and so on successively.
1. Condominium Act (R.A. 4276)
A “condominium” is an interest in real property
consisting of a separate interest in a unit in a residential, industrial
or commercial building and an undivided interest in common
directly or indirectly, in the land on which it is located and in other
common areas of the building. “Common areas” in a condominium
project refer to the entire project excepting all units separately
granted or held or reserved; while “unit” means a part of the
condominium project intended for any type of independent use or
ownership, including one or more rooms or spaces located in one
or more floors (or part or parts of floors) in a building or buildings
and such accessories as may be appended thereto.
2. Nature of Ownership in Condominium Projects
With respect to the condominium unit, the same is owned
separately and individually by the unit owner. With respect,
however, to the land and to the common areas in the condominium
project, there are two situations contemplated in Sections 2 and 5
of the Condominium Act. The first contemplates of a situation
where the land and other common areas in the condominium
project are held by the owners of separate units as co-owners
thereof. In such a situation, there is co-ownership among the unit
owners, with respect to the undivided interest in the land and
common areas. The second contemplates of a situation where the
Page 45 of 121
land and other common areas are to be held by the condominium
corporation, in which case, the owners of the individual units are
automatically considered members or shareholders of the
corporation. Under the provisions of the Condominium Act, the
undivided interest in the common areas or the shareholding in the
common areas is inseparable from the unit to which it is only an
appurtenant.
G. ALTERATIONS AND ADMINISTRATION
1. Acts of Alteration
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. (VIP)
This article deals with ALTERATIONS (whether or not
common benefits would result).
An alteration is a change (a) which is more or less
permanent; (b) which changes the use of the thing; and (c) which
prejudices the condition of the thing or its enjoyment by the others.
An example would be a sale, donation, or mortgage of the property.
In determining alterations, it is sometimes necessary to
consider the nature of the thing itself. Thus, when a thing does not
require any modification for its enjoyment, whatever modifications
or change that is made will be considered an alteration. But when a
thing in its nature requires changes, such as an industry or business,
in its exploitation, such modifications and variations should be
considered as falling under acts of administration.
That a sale constitutes an alteration as mentioned in
Article 491 is an established jurisprudence. It is settled that
alterations include any act of strict dominion or ownership and any
encumbrance or disposition has been held implicitly to be an act of
alteration.[9] Alienation of the thing by sale of the property is an act
of strict dominion.[10] However, the ruling that alienation is
alteration does not mean that a sale of commonly owned real
property is covered by the second paragraph of Article 491, such
that if a co-owner withholds consent to the sale, the courts, upon a
showing of a clear prejudice to the common interest, may, as
adequate relief, order the grant of the withheld consent [Arambulo
v. Nolasco]. 
Alterations include any act of strict dominion or
ownership and any encumbrance or disposition has been held
implicitly to be an act of alteration. [19] The construction of a house
on the co-owned property is an act of dominion. Therefore, it is an
alteration falling under Article 491 of the Civil Code. There being
no consent from all co-owners, respondent had no right to construct
her house on the co-owned property [Cruz v. Catapang].
Consent of only one co-owner will not warrant the
dismissal of the complaint for forcible entry filed against the
builder [Ibid]. 
NOTES:
a. Article 491 requires unanimity of consent, whether
tacit or express.
b. Effect of tacit consent – although the co-owner who
is deemed to have tacitly consented to the alteration
cannot ask for the demolition, neither can he be held
liable to answer for any part of the expenses
 incurred therein, because the obligation to pay such
expenses cannot be deemed to be the subject of his
tacit consent.
Effects of unauthorized alterations
the alteration is made without the consent of all the co-
owners, the act is illegal and invalid, being an act executed against
the provision of a mandatory law. The other co-owners can compel
the erring co-owner to undo what has been done, at the latter’s
expense. This remedy is explicitly authorized by the provisions of
Article 1168 of the New Civil Code which provides that “when the
obligation consists in not doing, and the obligor does what has been
forbidden him, it shall also be undone at his expense.” In addition,
the erring co-owner shall likewise be liable for any losses or
damages which the co-ownership may have suffered.
In PNB v. Court of Appeals in relation to Castro v.
Atienza, the Supreme Court held that the alienation of a common
property by a co-owner without the unanimous consent of all the
co-owners is void not because the nature of the thing had been
changed or altered, but because of the lack of unanimous consent
required by law – as acts of alienation such as sale, donation,
mortgage, lease for more than one year, etc. are acts of ownership
which could be exercised only by all. The transaction is valid only
with respect to the share of the co-owner alienating.
In Lopez v. Ilustre, it was held that what a co-owner may
dispose of is only his undivided share, which shall be limited to the
portion which may be allotted to him upon the termination of the
co-ownership. He has no right to divide the property into parts and
then convey one party by metes and bounds.
A lease over the common property without the consent of
all the co-owners is not void. Just as a sale of the whole common
property without the consent of the other co-owners affects only
the share or interest of the selling co-owner, a lease of the entire
property does not affect the interests of the non-consenting co-
owners.  Therefore, a lease over the entire Property is valid insofar
as the interests of the consenting co-owners are concerned
[Wheelers Club v. Bonifacio, Jr.].
2. Acts of Administration
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
provisions shall apply only to the part owned in common. (398)
With respect to acts of administration and better
enjoyment of the thing owned in common, the resolution of the
majority of the co-owners shall be sufficient. Under the law on co-
ownership, the terms “majority of the co-owners” do not refer to
numerical majority but to majority of interest. The law provides
that “there shall be no majority unless the resolution is approved by
the co-owners who represent the controlling interest in the object of
the co-ownership.” For example, if A, B and C are co-owners of a
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parcel of land where the share of A is 3/5 while the share of B and
C is 1/5 each, the consent of “A” alone will be sufficient for the
making of an act of administration. In this example, “A” represents
the controlling interest in the co-ownership, thus, “A” alone shall
be considered as the “majority of the co-owners” for the purpose of
approving an act of alteration.
Meaning of acts of administration
Repairs for preservation of the thing owned in common
may be made at the will of only one of the co-owners. Hence, the
resolution of the majority of the co-owners is not necessary. The
act of repairing the thing owned in common for the purpose of
preserving it is not considered, therefore, as an act of
administration. On the other hand, expenses to improve or
embellish the thing shall be decided upon by a majority as
determined in Article 492. Hence, an act of administration refers to
the improvement or embellishment of the thing owned in common
for the purpose of better enjoyment. As distinguished from acts of
alteration, which have a more permanent result and relate to the
substance or form of the thing, acts of simple administration refer
to the enjoyment of the thing and are of a transitory character. In
determining whether an act is that of administration or alteration,
the nature of the thing itself must be considered. When the
enjoyment of the thing does not require its modification, whatever
modification or change that is done will be considered an alteration
within the terms of Article 491. However, when the thing in its
nature requires changes in its exploitation, such modifications and
variations should be considered as falling under the acts of simple
administration.
No Majority or Act of Majority Is Seriously Prejudicial
Should there be no majority, or should the resolution of
the majority be seriously prejudicial to those interested in the
property owned in common, the court, at the instance of an
interested party, shall order such measures as it may deem proper,
including the appointment of an administrator. According to
Manresa,140 the following acts of the majority are considered
prejudicial to the co-ownership: (1) when the resolution calls for a
substantial change or alteration of the common property or of the
use to which it has been dedicated by agreement or by its nature;
(2) when the resolution goes beyond the limit of mere
administration or invades proprietary rights of the co-owners in
violation of Article 491; (3) when the majority authorizes lease,
loans or other contracts without security, exposing the thing to
serious danger to the prejudice of the other co-owners; and (4)
when the majority refuses to dismiss an administrator who is guilty
of fraud or negligence in his management, or he does not have the
respectability, aptitude, and solvency required of persons holding
such positions.
H. RIGHTS OF EACH CO-OWNER OVER HIS IDEAL
SHARE
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.
1. Rights Ideal Share
 Each co-owner has full ownership of his part, and of his
share in the fruits and benefits. He may alienate, assign or
mortgage his ideal share.
A co-owner has a right to mortgage his undivided
interest. He or she cannot mortgage or otherwise dispose of them in
its entirety without the consent of the other co-owners. Since a co-
owner is entitled to sell his undivided share, a sale of the entire
property by one co-owner without the consent of the other co-
owners is not null and void. Even if a co-owner sells the whole
property as his, the sale will affect only his share but not those of
the other co-owners who did not consent to the sale [Paulmitan v.
Court of Appeals].
The Supreme Court held in Ong v. Court of Appeals, that
the heirs as co-owners shall each have the full ownership of his part
and the fruits and benefits pertaining to it. An heir may, therefore,
alienate, assign, or mortgage it, and even substitute another person
in its enjoyment, except when personal rights are involved. But the
effect of alienation or mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.
Heirs of Co v. Gervacio
Held: Protacio, Sr., although becoming a co-owner with his
children in respect of Marta's share in the conjugal partnership, could not
yet assert or claim title to any specific portion of Marta's share without an
actual partition of the property being first done either by agreement or by
judicial decree. Until then, all that he had was an ideal or abstract quota in
Marta's share.[18] Nonetheless, a co-owner could sell his undivided share;
hence, Protacio, Sr. had the right to freely sell and dispose of his undivided
interest, but not the interest of his co-owners. Consequently, the sale by
Protacio, Sr. and Rito as co-owners without the consent of the other co-
owners was not necessarily void, for the rights of the selling co-owners
were thereby effectively transferred, making the buyer (Servacio) a co-
owner of Marta's share. This result conforms to the well-established
principle that the binding force of a contract must be recognized as far as it
is legally possible to do so (quando res non valet ut ago, valeat quantum
valere potest).
1. Right to Alienate
While under Article 493 of the New Civil Code, each co-
owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto and he may alienate, assign or mortgage
it, and even substitute another person in its enjoyment, the effect of
the alienation or the mortgage with respect to the co-owners, shall
be limited, by mandate of the same article, to the portion which
may be allotted to him in the division upon the termination of the
co-ownership. He has no right to sell or alienate a concrete,
specific, or determinate part of the thing in common to the
exclusion of the other co-owners because his right over the
thing is represented by an abstract or ideal portion without any
physical adjudication. An individual co-owner cannot adjudicate
to himself or claim title to any definite portion of the land or thing
owned in common until its actual partition by agreement or judicial
decree. Prior to that time all that the co-owner has is an ideal or
abstract quota or proportionate share in the entire thing owned in
common by all the co-owners. What a co owner may dispose of is
only his undivided aliquot share, which shall be limited to the
portion that may be allotted to him upon partition. Before partition,
a co-heir can only sell his successional rights [Carvajas v. Court of
Appeals].
However, where a parcel of land, forming part of the
undistributed properties of the dissolved conjugal partnership of
gains, is sold by a widow to a purchaser who merely relied on the
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face of the certificate of title thereto, issued solely in the name of
the widow, the purchaser acquires a valid title to the land even as
against the heirs of the deceased spouse. The rationale for this rule
is that "a person dealing with registered land is not required to go
behind the register to determine the condition of the property. He is
only charged with notice of the burdens on the property which are
noted on the face of the register or the certificate of title. To require
him to do more is to defeat one of the primary objects of the
Torrens system [Sps. Cruz v. Leis].
Magsanoc v. Pangasinan Loan Bank
Held: It is undisputed that at the time the Real Estate Mortgage
was constituted on July 1, 1991, Roque was already deceased. Upon his
death on April 17, 1991, the conjugal partnership between him and his
spouse, Susana, was dissolved pursuant to Article 126 (1) of the Family
Code, and an implied ordinary co-ownership arose among Susana and the
other heirs of Roque with respect to his share in the assets of the conjugal
partnership pending liquidation. The ensuing implied ordinary co-
ownership is governed by Article 493 of the Civil Code.
Thus, although Susana is a co-owner with her children with
respect to Roque's share in the conjugal partnership, she could not yet assert
or claim title to any specific portion thereof without an actual partition of
the property being first done either by agreement or by judicial decree.
While she herself as co-owner had the right to mortgage or even sell her
undivided interest in the subject property, she could not mortgage or
otherwise dispose of the same in its entirety without the consent of the other
co-owners. Consequently, the validity of the subject Real Estate Mortgage
and the subsequent foreclosure proceedings therefor conducted in favor of
respondent bank should be limited only to the portion which may be
allotted to it, as Susana's successor-in-interest, in the event of partition,
thereby making it a co-owner with petitioners pending partition. 
Heirs of Jarque v. Jarque
Held: Accordingly, while Servanda may sell her undivided
aliquot share as a coowner, she may not alienate the whole of Lot No. 2560
to the exclusion of the other co-owners. More importantly, Servanda cannot
claim specific title to the property. Thus, what may only be considered sold
to Benito, and which was eventually redeemed by Dominga, is Servanda's
right over her undivided aliquot share in the property-not the right over her
lot. Thus, Dominga may only claim such rights that Servanda had possessed
at the time of the sale. Only can sell the ideal share. Once a buyer buys the
ideal share, he becomes a co-owner. Late on upon division, each will get
their specific portion and the co-onweship will no longer exist.
Metrobank v. Pascual
Held: In the case at bar, Florencia constituted the mortgage on
the disputed lot on April 30, 1997, or a little less than two years after the
dissolution of the conjugal partnership on July 31, 1995, but before the
liquidation of the partnership. Be that as it may, what governed the property
relations of the former spouses when the mortgage was given is the
aforequoted Art. 493. Under it, Florencia has the right to mortgage or even
sell her one-half (1/2) undivided interest in the disputed property even
without the consent of Nicholson.  However, the rights of Metrobank, as
mortgagee, are limited only to the 1/2 undivided portion that Florencia
owned. Accordingly, the mortgage contract insofar as it covered the
remaining 1/2 undivided portion of the lot is null and void, Nicholson not
having consented to the mortgage of his undivided half.
The conclusion would have, however, been different if
Nicholson indeed duly waived his share in the conjugal partnership. But, as
found by the courts a quo, the April 9, 1995 deed of waiver allegedly
executed by Nicholson three months prior to the dissolution of the marriage
and the conjugal partnership of gains on July 31, 1995 bore his forged
signature, not to mention  that of the notarizing officer. A spurious deed of
waiver does not transfer any right at all, albeit it may become the root of a
valid title in the hands of an innocent buyer for value.
Upon the foregoing perspective, Metrobank’s right, as
mortgagee and as the successful bidder at the auction of the lot, is confined
only to the 1/2 undivided portion thereof heretofore pertaining in ownership
to Florencia.  The other undivided half belongs to Nicholson. As owner pro
indiviso of a portion of the lot in question, Metrobank may ask for the
partition of the lot and its property rights “shall be limited to the portion
which may be allotted to [the bank] in the division upon the termination of
the co-ownership.” This disposition is in line with the well-established
principle that the binding force of a contract must be recognized as far as it
is legally possible to do so––quando res non valet ut ago, valeat quantum
valere potest.
Silva v. Lo
Held: First. We sustain the RTC's confirmation of the 2006
Kasunduan. As correctly ruled by the trial court, albeit plaintiffs Enrica and
Teodoro did not sign the Kasunduan, they acquiesced to the partition and
distribution of the subject property, the qualified tenants receiving half
thereof. In fact, Enrica filed a Manifestation dated December 18, 2006 that
she and Teodoro will not object to the 2006 Kasunduan as long as they will
be given their preferred portion of the subject property. Truly indicative of
Enrica's and Teodoro's acquiescence to the 2006 Kasunduan is the fact that
neither of them have questioned it nor have they intervened in CA-G.R. SP
No. 116979 and in this appeal.
As regards the absence of Conchita's signature to the
2006 Kasunduan after she has purportedly repudiated the agency
relationship with her mother in 2000, we rule that the 2006 Kasunduan is
effective as against Conchita.
Even without going into the validity of Concepcion signing the
2006 Kasunduan on Conchita's behalf, the appellate court could not void
the sale and transfer of half of the subject property to its qualified
beneficiaries under a voluntary transfer arrangement provided in the CARL.
2. Personal Right
Example: 4 sisters living in the same residence, all of
them are co-owners, all of them are residing in the same place One
of the sisters, wants to sell her share and she sells it to a stranger.
Can she do that? Ordinarily she can do that, except when personal
rights are involved.
She cannot do that as she would require the consent of
her sisters as this involves personal rights. If she sells it to a
stranger, the person would intrude into their privacy especially
when the stranger is a male person, together with the 3 sisters.
I. PARTITION
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.
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.
To remain in a co-ownership would be to subject a
person to the desires of the rest. Conflicts in management being
bound to arise, the law as much as possible discourages co-
ownership. Hence, no co-owner is, as a rule, obliged to remain in
the co-ownership.
Anzures v. Sps. Ventanilla
Held: The Court notes that respondents have recognized the co-
ownership insofar as the parcel of land is concerned when they alleged in
Page 48 of 121
their complaint for unlawful detainer their intention to partition the same.
They assert, however, exclusive ownership over the residential house
standing thereon by virtue of the deed of donation and extrajudicial
settlement of estate. The documentary evidence, however, shows that the
parties are also coowners of the residential house.
The parties, being co-owners of both the land and the building,
the remedy of the respondents is to file an action for partition.
1. Concept
Article 1079 of the Civil Code defines partition as the
separation, division and assignment of a thing held in common
among those to whom it may belong.  It has been held that the fact
that the agreement of partition lacks the technical description of the
parties' respective portions or that the subject property was then
still embraced by the same certificate of title could not legally
prevent a partition, where the different portions allotted to each
were determined and became separately identifiable [Rizal v.
Naredo].
2. When a Co-owner May Not Successfully Demand
a Partition (BAR)
i. If by agreement (for a period not exceeding 10
years), partition is prohibited. [NOTE: The term
may be extended by a new agreement, but only after
the expiration of the original period, otherwise the
intention of the law would be defeated.].
ii. When partition is prohibited by a donor or testator
(for a period not exceeding twenty years) — from
whom the property came.
iii. When partition is prohibited by law (as in the case
of the conjugal partnership property, except in
certain instances).
iv. When a physical partition would render the property
unserviceable, but in this case, the property may be
allotted to one of the co-owners, who shall
indemnify the others, or it will be sold, and the
proceeds distributed. (Art. 498).
v. When the legal nature of the common property does
not allow partition (like in the case of party walls).
vi. When partition would render it unserviceable for the
use for which it is intended. But the co-ownership
may be terminated in accordance with article 498.
a. Prohibition to Partition Because of an
Agreement
i. The period must not extend more than 10 years.
(Art. 494).
ii. If it exceeds 10 years, the stipulation is valid only
insofar as the first 10 years are concerned.
iii. There can be an extension but only after the original
period has expired.
iv. After the fi rst extension, there can be another, and
so on indefinitely, as long as for each extension, the
period of 10 years is not exceeded
b. When no agreement as to whom the
indivisible thing be allotted to
Article 498. Whenever the thing is essentially indivisible and
the co-owners cannot agree that it be allotted to one of them who shall
indemnify the others, it shall be sold and its proceeds distributed. (404)

Article 494 of the Civil Code provides that no co-owner
shall be obliged to remain in the co-ownership, and that each co-
owner may demand at any time partition of the thing owned in
common insofar as his share is concerned. Corollary to this rule,
Article 498 of the Code states that whenever the thing is essentially
indivisible and the co-owners cannot agree that it be allotted to one
of them who shall indemnify the others, it shall be sold and its
proceeds accordingly distributed. This is resorted to (1) when the
right to partition the property is invoked by any of the co-owners
but because of the nature of the property it cannot be subdivided or
its subdivision would prejudice the interests of the co-owners, and
(b) the co-owners are not in agreement as to who among them shall
be allotted or assigned the entire property upon proper
reimbursement of the co-owners. In one case, this Court upheld the
order of the trial court directing the holding of a public sale of the
properties owned in common pursuant to Article 498 of the Civil
Code [Aguilar v. Court of Appeals].
3. Rule on Imprescriptibility
It has been held that Article 494 implies that an action to
demand partition is imprescriptible or cannot be barred by laches
[Monteroso v. Court of Appeals]. The positive mandate of Article
94 conferring imprescriptibility to actions of a co-owner or co-heir
against his co-owners or co-heirs should preempt and prevail over
all abstract arguments based only on equity. Certainly, laches
cannot be set up to resist the enforcement of an imprescriptible
legal right [Generosa v. Prangan-Valera].
In Quintos v. Nicholas, the co-owners filed an action for
partition which was dimissed by the trial court for failure of the
parties and counsel to appear. The judgment of dismissal became
final. Subsequently, some of the co-owners filed an action against
the other co-owners for quieting of title alleging exclusive
oenership thereof by prescription. The defendants in the action for
quieting title filed a counter-claim for partition. The parties who
filed the action for quieting of title alleged that the counter-claim
for partition is already barred by res judicata because the dismissal
of the action for partition was with prejudice. On the issue of
partition, the Court ruled that while the dismissal of a case for
failure to prosecute has the effect of adjudication on the merits, and
is necessarily understood to be with prejudice to the filing of
another action, such dismissal with prejudice under Rule 17,
Section 3 of the Rules of Court cannot defeat the right of a co-
owner to ask for partition at any time, provided that there is no
actual adjudication of ownership of shares yet. The Court explained
that between dismissal with prejudice under Rule 17, Section 3 and
the right granted to co-owners under Article 494, the latter must
prevail. To construe otherwise would diminish the substantive right
of a co-owner through the promulgation of procedural rules.
a. Exception
i. When a co-owner gives notice to the other co-
owners that he is repudiating the co-ownership and
that he is claiming ownership of the entire property;
ii. The requirement of continuous, open, public,
adverse possession for a period of time required
must be met.
In order that a co- owner's possession may be deemed
adverse to the other co-owners, the following elements must
concur: (1) that he has performed unequivocal acts of repudiation
Page 49 of 121
amounting to an ouster of the other co-owners; (2) that such
positive acts of repudiation have been made known to the other co-
owners; and (3) that the evidence thereon must be clear and
convincing [Herrera v. Fangonil].
NOTE: The period of prescription commences from the
date of the repudiation.
In Salvador v. Court of Appeals, it was held that a mere
silent possession by a co-owner, his receipts of rents, fruits, or
profits from the property, the erection of buldings and fences and
the planting of trees thereon, and the payment of land taxes, cannot
serve as proof of exclusive ownership, if it is not borne out by clear
and convincing evidence that he exercised acts of possession which
unequivocably constituted an ouster or deprivation of the rights of
the other co-owners.
From the moment one of the co-owners claims that he is
the absolute and exclusive owner of the properties and denies the
others any share therein, the question involved is no longer one of
partition, but of ownership. In such case, the imprescriptibility of
the action for partition can no longer be invoked or applied when
one of the co-owners has adversely possessed the property as
exclusive owner for a period sufficient to vest ownership by
prescription [Delima v. Court of Appeals].
Herrera v. Fangonil
Held: Clearly, petitioner cannot claim adverse possession in the
concept of an owner where she voluntarily executed documents stating that
she was a mere creditor and/or co-owner. Mere silent possession by a co-
owner; his receipt of rents, fruits or profits from the property; his erection
of buildings and fences and the planting of trees thereon; and the payment
of land taxes cannot serve as proofs of exclusive ownership, if it is not
borne out by clear and convincing evidence that he exercised acts of
possession which unequivocably constituted an ouster or deprivation of the
rights of the other co-owners.[34] In this case, we find that petitioner effected
no clear and evident repudiation of the co- ownership. Petitioner's only act
of repudiation of the co-ownership was when she refused to honor the
extrajudicial settlement in 1994. Alternatively, possession by a co-owner is
like that of a trustee and shall not be regarded as adverse to the other co-
owners, but in fact as beneficial to all of them.[35] A co-ownership is a form
of trust, with each owner being a trustee for each other. [36] Mere actual
possession by one will not give rise to the inference that the possession was
adverse because a co-owner is, after all, entitled to possession of the
property. [37] Thus, as a rule, prescription does not run in favor of a co-heir
or co-owner as long as he expressly or impliedly recognizes the co-
ownership; and he cannot acquire by prescription the share of the other co-
owners, absent a clear repudiation of the co-ownership.  [38] An action to
demand partition among co-owners is imprescriptible, and each co-owner
may demand at any time the partition of the common property.
Heirs of Reyes v. Reyes
Held: The concurrence of the foregoing elements was not
established herein. For one, Alejandro did not have adverse and exclusive
possession of the property, as, in fact, the other co-owners had continued to
possess it, with Alejandro and his heirs occupying only a portion of it.
Neither did the cancellation of the previous tax declarations in the name of
Leoncia, the previous co-owner, and the issuance of a new one in
Alejandro's name, and Alejandro's payment of the realty taxes constitute
repudiation of the co-ownership.  The sole fact of a co-owner declaring the
land in question in his name for taxation purposes and paying the land taxes
did not constitute an unequivocal act of repudiation amounting to an ouster
of the other co-owner and could not constitute adverse possession as basis
for title by prescription. [34] Moreover, according to Blatero v. Intermediate
Appellate Court,[35] if a sale a retro is construed as an equitable mortgage,
then the execution of an affidavit of consolidation by the purported buyer to
consolidate ownership of the parcel of land is of no consequence and the
"constructive possession" of the parcel of land will not ripen into
ownership, because only possession acquired and enjoyed in the concept of
owner can serve as title for acquiring dominion.
In fine, the respondents did not present proof showing that
Alejandro had effectively repudiated the co-ownership. Their bare claim
that Alejandro had made oral demands to vacate to his co-owners was self-
serving and insufficient. Alejandro's execution of the affidavit of
consolidation of ownership on August 21, 1970 and his subsequent
execution on October 17, 1970 of the joint affidavit were really equivocal
and ambivalent acts that did not manifest his desire to repudiate the co-
ownership.
The only unequivocal act of repudiation was done by the
respondents when they filed the instant action for quieting of title on
September 28, 1994, nearly a year after Alejandro's death on September 2,
1993. However, their possession could not ripen into ownership considering
that their act of repudiation was not coupled with their exclusive possession
of the property.
b. Period of Prescription
When a co-owner has effectively repudiated the co-
ownership, two possibilities may arise: (1) such co-owner may
acquire the entire property by virtue of acquisitive prescription if
his possession meets all the requirements of the law, and after the
expiration of the prescriptive period; or (2) the other co-owners
who were deprived of their share may lose their right to seek a
declaration of the existence of the co-ownership and of their rights
thereunder because the same may already be barred under the
statute of limitations (or extinctive prescription).
Where there is a repudiation of the co-ownership over a
real property, it has been held that the action for reconveyance by a
co-owner of his share prescribes in 10 years, the action being based
on an implied or constructive trust [Segura v. Segura].
The Court ruled that hwen a co-owner of the property
executed a deed of partition and on the strength thereof obtained
the cancellation of the title in the name of their predecessor and the
issuance of a new one wherein he appears as the new owner of the
property, thereby in effect repudiating the ownership of the other
co-owners over their shares, the statute of limitations started to run
for the purpose of the action instituted by the latter seeking a
declaration of the existence of the co-ownership and of their rights
thereunder [Castillo v. Court of Appeals]. Since an action for
reconveyance of land based on implied or constructive trust
prescribes after 10 years, it is from the date of the issuance of such
title that the effective assertion of adverse title for purposes of the
statute of limitations is counted [Jaramil v. Court of Appeals].
In Maritegui v. Court of Appeals, however, the Court
held that when a co-owner or co-heir registered the properties in
his name in fraud of other co-owners or co-heirs, prescription can
only be deemed to have commenced from the time the latter
discovered the former’s act of defraudation. In Adille v. Court of
Appeals, it was held that while it is true that registration under the
Torrens system is constructive notice of title, the Torrens title does
not furnish a shield for fraud.
4. Procedure
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. (402)
In Austria v. Lichauco, it was held:
There are two stages in every action for partition.
The first phase is the determination of whether a co-ownership
Page 50 of 121
in fact exists and a partition is proper, i.e., not otherwise legally
proscribed, and may be made by voluntary agreement of all the
parties interested in the property. This phase may end either: (a)
with a declaration that plaintiff is not entitled to have a partition
either because a co-ownership does not exist, or partition is
legally prohibited; or (b) with a determination that a co-
ownership does in truth exist, partition is proper in the premises,
and an accounting of rents and profits received by the defendant
from the real estate in question is in order. In the latter case, the
parties may, if they are able to agree, make partition among
themselves by proper instruments of conveyance, and the court
shall confirm the partition so agreed upon.
The second phase commences when it appears that
the parties are unable to agree upon the partition directed by the
court. In that event, partition shall be done for the parties by the
court with the assistance of not more than three (3)
commissioners. This second stage may well also deal with the
rendition of the accounting itself and its approval by the court
after the parties have been accorded opportunity to be heard
thereon, and an award for the recovery by the party or parties
thereto entitled of their just share in the rents and profits of the
real estate in question.
The proceedings in this case have only reached the
first phase. It must be mentioned as an aside that even if the
order decreeing partition leaves something more to be done by
the trial court for the complete disposition of the case, i.e., the
appointment of commissioners, the proceedings for the
determination of just compensation by the appointed
commissioners, the submission of their reports and hearing
thereon, and the approval of the partition, it is considered a final
order and may be appealed by the party aggrieved thereby.
There is no question that a co-ownership exists
between petitioner and respondents. To this extent, the trial
court was correct in decreeing partition in line with the Civil
Code provision that no co-owner shall be obliged to remain in
the co-ownership.
However, the trial court went astray when it also
authorized the sale of the subject properties to a third party and
the division of the proceeds thereof. What makes this portion of
the decision all the more objectionable is the fact that the trial
court conditioned the sale upon the price and terms acceptable to
plaintiffs (respondents herein) only, and adjudicated the
proceeds of the sale again only to plaintiffs. The pertinent
portion of the trial court disposition states:
xxx
2) Authorizing the sale, conveyance or transfer of the
above-described properties to a third-party at such price and
under such terms acceptable to plaintiffs and thereafter,
dividing the proceeds of said sale among them in accordance
with their proportionate interests. [Emphasis supplied.]
It is true that petitioner did not assign this error on
appeal resulting in the appellate court's failure to rule on the
matter. Nonetheless, we cannot simply brush this issue aside
considering that its resolution is necessary in arriving at a just
disposition of the case. The rectification of the trial court's
decision is accordingly in order.
5. Rights of Third Persons
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. (403)
Article 499. The partition of a thing owned in common shall
not prejudice third persons, who shall retain the rights 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 also remain in force, notwithstanding the partition.
(405)
6. Accounting
Article 500. Upon partition, there shall be a mutual
accounting for benefits received and reimbursements for expenses
made. Likewise, each co-owner shall pay for damages caused by reason
of his negligence or fraud. (n)
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)
VI
POSSESSION
A. REQUISITES OF POSSESSION
Article 523. Possession is the holding of a thing or the
enjoyment of a right.
Ownership is different from possession. A person may be
declared the owner, but he may not be entitled to possession. The
possession (in the concept of holder) may be in the hands of
another, such as a lessee or a tenant. A person may have introduced
improvements thereon of which he may not be deprived without
due hearing. He may have other valid defenses to resist surrender
of possession. Hence, a judgment for ownership does NOT
necessarily include possession as a necessary incident [Jabon v.
Alo]. This is moreover true only if there is the possibility that the
actual possessor has some rights which must be respected and
defined. Where the actual possessor has no valid right over the
property enforceable even against the owner thereof, the surrender
of the possession to the adjudged owner should be considered
included in the judgment [Perez v. Evite].
1. Requisites
In order that there be possession, two things are
paramount:
(i) There must be occupancy, apprehension or
taking; and
(ii) There must be intent to possess (animus
possidendi) [Yu v. Pacleb].
2. Things or Rights Subject to Possession
Article 530. Only things and rights which are susceptible of
being appropriated may be the object of possession.
It must be emphasized, however, that only things and
rights which are susceptible of being appropriated may be the
object of possession. The following cannot be appropriated and
hence, cannot be possessed: property of the public
dominion, common things (res communes) such as sunlight and air,
and things specifically prohibited by law [Republic v. Cortez].
Only things and rights which are susceptible of being
appropriated may be the object of possession. Note that the phrase
“susceptible of being appropriated” in this article is used in a
Page 51 of 121
different manner compared to the phrase “may be the object of
appropriation” in Article 414. The concept of susceptibility to
appropriation in Article 414 is not equivalent to the concept of
things which are within the commerce of man as the latter term is
understood in law. As discussed in said section, while things which
are outside the commerce of man may not be the object of a
contract, they are not necessarily disqualified from being
considered as property pursuant to the criterion mentioned in
Article 414 of the Code. A good illustration is the property of
public dominion pertaining to the State. While they are outside the
commerce of man and cannot be the object of contracts,
nonetheless, they are considered property under the Code.78 On
the other hand, the term “susceptibility to appropriation” in the
present article is broader in scope for it also refers to things which
are within the commerce of man, aside from embracing the
meaning accorded to it under Article 414. Stated otherwise, all
things which are outside the commerce of man and those which, by
reason of physical impossibility cannot be subjected to human
control, may not be the object of possession.
B. CLASSIFICATION OF POSSESSION
1. In One’s Own Name and In the Name of Another
Article 524. Possession may be exercised in one’s own name
or in that of another.
It is not necessary that the owner or holder of the thing
exercise personally the rights of possession. The rights of
possession may be exercised through agents [Santos v. Manalili].
It is not necessary that the owner of a parcel of land
should himself occupy the property as someone in his name may
perform the act. In other words, the owner of real estate has
possession, either when he himself is physically in occupation of
the property, or when another person who recognizes his rights as
owner is in such occupancy [Heirs of Extramadura v.
Extramadura].
Republic v. Alonte
Held: The fact that Editha Alonte, respondent's attorney-in-fact,
testified that it is she and her family who are residing on the subject lot does
not negate the statement in the petition for reconstitution that it is
respondent who is in possession of the lot. After all, Article 524 of the New
Civil Code provides that possession may be exercised in one's own name or
in that of another. Obviously, Editha Alonte was exercising possession over
the land in the name of respondent Lourdes Alonte. This is supported by the
Certification[14] from the Office of the City Treasurer of Quezon City
which states that the real property taxes on said property, declared in the
name of Lourdes Alonte, had been paid.
2. In the Concept of Owner and In the Concept of
Holder
Article 525. The possession of things or rights may be had in
one of two concepts: either in the concept of owner, or in that of the
holder of the thing or right to keep or enjoy it, the ownership
pertaining to another person.
Possession may be had in one of two ways: possession in
the concept of an owner and possession of a holder. A possessor in
the concept of an owner may be the owner himself or one who
claims to be so. On the other hand, one who possesses as a mere
holder acknowledges in another a superior right which he believes
to be ownership, whether his belief be right or wrong [Carlos v.
Republic].
a. Possession in the Concept of Owner
Possession in the concept of the owner is the possession
by the owner himself or by a person who claims to be and acts as
the owner. He possesses the thing in such a way that he makes
people believe or see that he is the owner and recognizes no title or
ownership in another.
Jus possessionis or possession in the concept of an
owner is one of the two concepts of possession provided under
Article 525 of the Civil Code. Also referred to as adverse
possession, this kind of possession is one which can ripen into
ownership by prescription [Republic v. Cortez].
Possession in the concept of the owner v. Torrens Title
In Aposotol v, Court of Appeals, the Supreme Court ruled
that the presumption of ownership granted by law to a possessor in
the concept of an owner under Article 541 is only prima facie and
cannot prevail over a valid title registered under the Torrens
System. It is an accepted rule that a person who has a Torrens title
over the property is entitled to the possession thereof.
However, the defense of indefeasibility of Torrens title
cannot extend to a transferee who takes the certificate of title in bad
faith with notice f flaw. A buyer of real property in the possession
of persons other than the seller must be way and should investigate
the right of those in possession otherwise he can hardly be regarded
as buyer in good faith and cannot have any right over the property
[Occena v. Esponilla].
Prior possession, not necessary in a suit for unlawful
detainer
In a case for unlawful detainer, as when the new owner
of the house ejects the tenant therefrom, is prior physical
possession an indispensable requisite on the part of the new
owner?
NO. The fact that the new owners were never in prior
physical possession of the subject land is of no moment, as prior
physical possession is necessary only in forcible entry cases
[Apostol v. Court of Appeals].
Distinction: Proof of possession in forcible entry and
unlawful detainer
In Pajuyo v. Court of Appeals, the Supreme Court held
that prior possession is not always a condition sine qua non in
ejectment. This is one of the distinctions between forcible entry
and unlawful detainer. In forcible entry, the plaintiff, the plaintiff is
deprived of physical possession of his land or building by means of
force, threat, strategy or stealth. Thus, he must allege and prove
prior possession. But in unlawful detainer, the defendant
unlawfully withholds possession after the expiration or termination
of his right to possess under any contract, express or implied. In
such case, prior physical possession is not required.
(i) Effects of Possession the Concept of
Owner
Article 540. Only the possession acquired and enjoyed in the
concept of owner can serve as a title for acquiring dominion.
The following are the effects of possession in the concept
of owner:
Page 52 of 121
 It raises a disputable presumption of ownership
(Art. 433, NCC).
 It creates a disputable presumption that the
possessor has just title and he cannot be
obliged to show it. (Art. 541, NCC)
 It can ripen into ownership through acquisitive
prescription (Art. 540, NCC), subject to the
additional requirements under Article 1118 of
the Civil Code.
Prescription is another mode of acquiring ownership and
other real rights over immovable property. It is concerned with
lapse of time in the manner and under conditions laid down by law,
namely, that the possession should be in the concept of an owner,
public, peaceful, uninterrupted and adverse. Possession is open
when it is patent, visible, apparent, notorious and not clandestine. 
It is continuous when uninterrupted, unbroken and not intermittent
or occasional; exclusive when the adverse possessor can show
exclusive dominion over the land and an appropriation of it to his
own use and benefit; and notorious when it is so conspicuous that it
is generally known and talked of by the public or the people in the
neighborhood [Heirs of Crisologo v. Ranon].
In order to ripen into ownership, possession must be in
the concept of an owner, public peaceful and uninterrupted. Thus,
mere possession with a juridical title, such as, to exemplify, by a
usufructuary, a trustee, a lessee, an agent or a pledgee, not being in
the concept of an owner, cannot ripen into ownership by
acquisitive prescription, unless the juridical relation is first
expressly repudiated and such repudiation has been communicated
to the other party. Acts of possessory character executed due to
license or by mere tolerance of the owner would likewise be
inadequate. Possession, to constitute the foundation of a
prescriptive right, must be en concepto de dueno, or, to use the
common law equivalent of the term, that possession should be
adverse; if not, such possessory acts, no matter how long, do not
start the running of the period of prescription [Marcelo v. Court of
Appeals].
(ii) Presumption of Just Title
Article 541. A possessor in the concept of owner has in his
favor the legal presumption that he possesses with a just title and he
cannot be obliged to show or prove it.
 There is just title when the adverse claimant came into
possession of the property through one of the modes recognized by
law for the acquisition of ownership or other real rights but the
grantor was not the owner or could not transmit any right [Tito v.
Court of Appeals].
Actual possession under claim of ownership raises a
disputable presumption of ownership. In addition, the possessor in
the concept of owner (en concepto de dueño) has in his favor the
legal presumption that he possesses with a just title and he cannot
be obliged to show it.
In accion reivindicatoria, for example, the person who
claims that he has a better right to the property has the burden of
proving his title, in addition to proving the identity of the land
claimed. In other words, the plaintiff must rely on the strength of
his own title, not on the weakness of the defendant’s title because
the latter enjoys the presumption of just title which he cannot be
obliged to show.
 In Chan v. Court of Appeals, the clause “he possesses
with a just title and he cannot be obliged to show or prove it”
means that the possessor cannot be inquired about his ownership
without any valid reason, for he is presumed to be the owner
thereof. Anyone who claims to be the owner must resort to judicial
process for the recovery of the property.
The term just title refers to true and valid title, a title
which by itself is sufficient to transfer ownership without the
necessity of letting the period elapse.
For purposes of prescription, “just title” means
colourable title, that title where, although there was a mode of
transferring ownership, still something is wrong, because the
grantor is not the owner of the thing.
(iii) The Kinds of Titles (‘Titulos’)
True and Valid Title (Titulo Verdadero y Valido) —
Here, there was a mode of transferring ownership and the grantor
was the owner. It is defined as a title which by itself is suffi cient to
transfer ownership without the necessity of letting the prescriptive
period elapse. (See Doliendo v. Biarnesa, 7 Phil. 232).
Example: B bought a Ford Expedition Limited from S,
the owner thereof. Then S delivered the car to B. B now has a true
and valid title. [NOTE: This is the just title referred to in Art. 541.
Thus, if B possesses the vehicle and drives it around as an owner,
other people cannot compel him to prove his ownership over the
same.].
Colorable Title (Titulo Colorado) — That title where,
although there was a mode of transferring ownership, still
something is wrong, because the grantor is NOT the owner.
Example: B bought a BMW car from S. S then delivered
the car to B. But it turns out that S never owned the car, and that
somebody else was its owner. Whether B was in good faith or in
bad faith is immaterial in deciding if he (B) is the owner; what is
important is that he is not the owner because he did not acquire or
purchase the property from the owner, his title being merely
“colorado’’ or colorable.
b. Possession in the Concept of Holder
Article 558. Acts relating to possession, executed or agreed
to by one who possesses a thing belonging to another as a mere holder
to enjoy or keep it, in any character, do not bind or prejudice the
owner, unless he gave said holder express authority to do such acts, or
ratifies them subsequently
In the case of possessors in the concept of holder who are
as such by virtue of a juridical title or right, e.g., lessee,
usufructuary, etc., they are considered as possessors in the concept
of holder with respect to the thing itself, but considered as
possessors in the concept of owner with respect to their right
Here, the possessor recognizes another to be the owner.
The one who possesses as a mere holder acknowledges in another a
superior right which he believes to be ownership, whether his
belief is right or wrong [Maglucot-aw v. Maglucot].
In Garcia v. Court of Appeals, it was held that the
possessor who is merely tolerated by the owner is a possessor in
the concept of a holder and such possession does not hinder a valid
transfer of ownership by the owner thru its sale to another.
In Mangahas v. Court of Appeals, it was ruled that there
can be no acquisitive prescription of land in favor of the possessor
if the possession is in the concept of holder.
Page 53 of 121
In Marcelo v. Court of Appeals, the Supreme Court ruled
that acquisitive prescription is a mode of acquiring ownership by a
possessor through the requisite lapse of time. IN order to ripen into
ownership, possession must be in the concept of the owner, public,
peaceful and uninterrupted. Thus, mere possession with a juridical
title, such as, to exemplify, by usufructuary, a trustee, a lessee, an
agent for a pledgee, not being in the concept of an owner, cannot
ripen into ownership by acquisitive prescription, unless the
juridical relation is first expressly repudiated and such repudiation
has been communicated to the other party.
Acts of possessory character executed due to license or
by mere tolerance of the owner would likewise be inadequate.
Possession, to constitute the foundation of a prescriptive riht, must
be en concepto de dueno, or to use the common law equivalent of
the term, the possession should be adverse; if not, such possessory
acts, no matter how long do not start the running of the
prescription.
Bukidnon Doctors v. Metrobank
Held: In the case at bar, it is not disputed that after the
foreclosure of the property in question and the issuance of new certificates
of title in favor of the respondent, the petitioner and the respondent entered
into a contract of lease of the subject properties.  This new contractual
relation presupposed that the petitioner recognized that possession of the
properties had been legally placed in the hands of the respondent, and that
the latter had taken such possession but delivered it to the former as lessee
of the property.  By paying the monthly rentals, the petitioner also
recognized the superior right of the respondent to the possession of the
property as owner thereof.  And by accepting the monthly rentals, the
respondent enjoyed the fruits of its possession over the subject property. [24] 
Clearly, the respondent is in material possession of the subject premises.
Thus, the trial court's issuance of a writ of possession is not only
superfluous, but improper under the law.  Moreover, as a lessee, the
petitioner was a legitimate possessor of the subject properties under Article
525 of the Civil Code.  Thus, it could not be deprived of its lawful
possession by a mere ex parte motion for a writ of possession.
C. POSSESSION IN GOOD FAITH AND POSSESSION IN
BAD FAITH
Article 526. He is deemed a possessor in good faith who is
not aware that there exists in his title or mode of acquisition any flaw
which invalidates it.
He is deemed a possessor in bad faith who possesses in any
case contrary to the foregoing. Mistake upon a doubtful or difficult
question of law may be the basis of good faith.
1. Possessor in Good Faith
One who is not aware that there exists in his TITLE or
MODE of acquisition any flaw which invalidates it [DBP v. Court
of Appeals]. Good faith, here understood, is an intangible and
abstract quality with no technical meaning or statutory definition,
and it encompasses, among other things, an honest belief, the
absence of malice and the absence of design to defraud or to seek
an unconscionable advantage. An individual’s personal good faith
is a concept of his own mind and, therefore, may not conclusively
be determined by his protestations alone. It implies honesty of
intention, and freedom from knowledge of circumstances which
ought to put the holder upon inquiry. The essence of good faith lies
in an honest belief in the validity of one’s right, ignorance of a
superior claim, and absence of intention to overreach another.
Applied to possession, one is considered in good faith if he is not
aware that there exists in his title or mode of acquisition any flaw
which invalidates it [PNB v. De Jesus].
 In Marcelo v. Court of Appeals, it was ruled that the
transferee of an unregistered parcel of land for value from a buyer
and who took immediate possession thereof has the benefit of good
faith in his favor. Ordinary acquisitive prescription of 10 years is
applicable.
a. Presumption of Good Faith
Article 527. Good faith is always presumed, and upon him
who alleges bad faith on the part of a possessor rests the burden of
proof.
Good faith is always presumed, and upon him who
alleges bad faith on the part of the possessor rests the burden of
proof. There is a parallel presumption under the Rules of Evidence
in favor of the innocence of a person from any wrongdoing. This
rule is but a necessary consequence of the treatment that the law
accords to possession which under the Civil Code is viewed as an
outward appearance of ownership. Note that under Article 433 of
the New Civil Code, actual possession under claim of ownership is
viewed as that of presumed ownership.
b. Proof of Bad Faith Necessary
Article 528. Possession acquired in good faith does not lose
this character except in the case and from the moment facts exist which
show that the possessor is not unaware that he possesses the thing
improperly or wrongfully.
The presumption in favor of the good faith of the
possessor, however, is only juris tantum and may be overcome by
proof to the contrary. If no evidence is presented proving bad faith,
the presumption of good faith therefore remains for it is likewise
presumed that possession continues to be enjoyed on the same
character in which it was acquired, until the contrary is proved.
This presumption in favor of good faith continues to
subsist until facts exist which show that the possessor is already
aware that he wrongfully or improperly possesses the thing. In
other words, every possessor in good faith becomes a possessor in
bad faith from the moment he becomes aware that what he believed
to be true is not so. Consequently, possession in good faith ceases
from the moment defects in the title are made known to the
possessors, by extraneous evidence or by suit for recovery of the
property by the true owner. Whatever may be the cause or the fact
from which it can be deduced that the possessor has knowledge of
the defects of his title or mode of acquisition, it must be considered
sufficient to show bad faith [Wong v. Carpio].
Existence of bad faith may begin either from the receipt
of judicial summons (See Tacas v. Tobon, 53 Phil. 356), or even
before such time as when a letter is received from the true owner
asking the possessor to stop planting on the land because somebody
else owns it. (See Ortiz v. Fuentebella, 27 Phil. 537). What the
possessor should do upon receipt of the letter would be to
investigate; and if he does not, but is later on defeated, bad faith
should be counted not from the time of summons, but from the
time he first received the letter. Although receipt of summons will
ordinarily produce a conversion from good faith to bad faith, it may
be possible that a possessor will still be convinced of the
righteousness of his cause, thus preserving his original good faith.
This is why if he originally was in good faith, he would not be
responsible in case of loss thru fortuitous event, even if the loss
should occur during the trial. Upon the other hand, had he been
Page 54 of 121
really in bad faith all the time, the loss by fortuitous event would
not excuse him. (See Art. 552)
c. Right to the Fruits
Article 544. A possessor in good faith is entitled to the fruits
received before the possession is legally interrupted.
Natural and industrial fruits are considered received from
the time they are gathered or severed.
Civil fruits are deemed to accrue daily and belong to the
possessor in good faith in that proportion.
Article 545. If at the time the good faith ceases, there should
be any natural or industrial fruits, the possessor shall have a right to a
part of the expenses of cultivation, and to a part of the net harvest,
both in proportion to the time of the possession.
The charges shall be divided on the same basis by the two
possessors.
The owner of the thing may, should he so desires, give the
possessor in good faith the right to finish the cultivation and gathering
of the growing fruits, as an indemnity for his part of the expenses of
cultivation and the net proceeds; the possessor in good faith who for
any reason whatever should refuse to accept this concession, shall lose
the right to be indemnified in any other manner.
This Article applies to fruits only. It cannot extend to
other things like the dismantled materials from a demolished house,
or part of the hidden treasure pertaining to the land.
Who are the possessors entitled to the fruits?
Only the possessors in good faith are entitled to fruits.
Possessors in bad faith on the other hand are not entitled to fruits
but even required to reimburse the fruits already received and to
some extent, damages.
In Calma v. Calma, it was held that during the time the
possessor is considered in good faith, he is entitled to the fruits he
had received out of the property he is possessing. From the moment
his good faith had been converted to bad faith, such as by judicial
summons or extraneous evidence, he loses that right to retain the
fruits.
In Mindanao Academy v. Yap, it was held that before
legal interruption, the fruits received by the possessor in good faith
belong to him. But after judicial summons had been served upon
the possessor in good faith, his right to get the fruits not yet
gathered terminates.
Daclag v. Macahilig
Held: Article 528 of the Civil Code provides that possession
acquired in good faith does not lose this character, except in a case and
from the moment facts exist which show that the possessor is not unaware
that he possesses the thing improperly or wrongfully. Possession in good
faith ceases from the moment defects in the title are made known to the
possessors, by extraneous evidence or by suit for recovery of the
property by the true owner. Whatever may be the cause or the
fact from which it can be deduced that the possessor has knowledge of the
defects of his title or mode of acquisition, it must be considered sufficient
to show bad faith. Such interruption takes place upon service of summons.
Article 544 of the same Code provides that a possessor in good
faith is entitled to the fruits only so long as his possession is not legally
interrupted. Records show that petitioners received a summons together
with respondents' complaint on August 5, 1991;[10] thus, petitioners' good
faith ceased on the day they received the summons. Consequently,
petitioners should pay respondents 10 cavans of palay per annum beginning
August 5, 1991 instead of 1984.
 When are fruits considered gathered?
Natural and industrial fruits are gathered the moment
they are gathered or severed. Civil fruits are deemed received on
their due date and not actual date of payment.
What is the liability of possessor in bad faith regarding
fruits?
i. As to fruits already received – returning them if still
existing o pay for their value if already spent;
ii. As to growing, pending, or ungathered fruits – no
rights whatsoever.
In Director vs. Abagat, it was ruled that as additional
liability, the possessor in bad faith must render an accounting of the
fruits he had received as well as the fruits he could have received.
He is also liable to pay for damages which must be equivalent of
the reasonable rent for the occupation of the property during the
period of his possession in bad faith.
In MWSS v. Court of Appeals, it was held that the right of
removal granted to a possessor in bad faith applies only to
improvements for pure luxury or mere pleasure.
According to Article 545, if at the time the good faith
ceases, there should be pending natural or industrial fruits, the
possessor and the owner shall have a right to a part of the net
harvest and each shall divide the expenses of cultivation, both in
proportion to the time of their respective possessions. If the owner
does not want to pay his share of the expenses incurred in
connection with the cultivation, he may, at his option, allow the
possessor to finish the cultivation and gathering of the growing
fruits (in lieu of his part of such expenses), in which case, the
owner will not have any share in the harvest. If the owner chooses
this option and the possessor refuses to accept the concession “for
any reason whatever,” the latter shall lose the right to be
indemnified in any other manner. In other words, the possessor
must accept the owner’s choice otherwise he will lose the right to
be indemnified and this rule will apply even if the value of the
fruits are less than the amount of the expenses incurred.
With respect to charges, the same shall also be divided
by the possessor and the owner, in proportion to the time of their
respective possessions. According to Manresa, the term “charges”
in Article 545 is understood to be those expenses incurred not on
the thing itself, but because of it or on account of it. An example of
charges are the taxes incurred, whether on the capital or on the
fruits.
d. Deterioration or Loss of the Thing
Article 552. A possessor in good faith shall not be liable for
the deterioration or loss of the thing possessed, except in cases in which
it is proved that he has acted with fraudulent intent or negligence, after
the judicial summons. A possessor in bad faith shall be liable for
deterioration or loss in every case, even if caused by a fortuitous event.
Will a possessor be liable to the owner for any
deterioration or loss suffered by the thing? This question is
answered by Article 552 of the New Civil Code. Pursuant to this
article, the possessor’s liability for loss or deterioration shall
depend on his good faith or bad faith. If the possessor is in good
faith, he is not liable at all for the deterioration or loss of the thing
possessed. A possessor in bad faith, on the other hand, is liable for
any deterioration or loss of the thing “in every case” even when the
same is caused by fortuitous event.
Page 55 of 121
2. Possession in Bad Faith
A possessor in bad faith is one in possession of property
knowing that his title thereto is defective. The difference, therefore,
between a possessor in good faith and one in bad faith is that the
former is NOT AWARE of the defect or flaw in his title or mode of
acquisition while the latter is AWARE of such defect or fl aw. But
in either case there is a flaw or defect [Cueto v. Court of Appeals].
In the following situations, the possessor is considered in
bad faith:
a. Where the possessor of the land acquired the same
from a person other than the registered owner
because he was charged with notice of the existence
of the owner’s certificate of title [Tuason v.
Lecardo].
b. Where the possessor of the land knows that she has
no title thereto, because she bought the house
erected thereon from one whom she knew was
merely a tenant on the land [De Guzman v. Rivera].
c. In Republic v. Court of Appeals, it was held that a
party’s mere refusal to believe that a defect exists
and his wilful closing of his eyes to the possibility
of the existence of a defect in his vendor’s title will
not make him an innocent purchaser for value if it
afterwards develop that the title was in fact
defective. Hence, if circumstances exist that require
a prudent man to investigate; he will be in bad faith
if he does not investigate.
d. In Republic v De Guzman, it was ruled that the
burden of proving the status of the purchaser in
good faith and for value lies upon him who asserts
the status. In discharging the burden, it is not
enough to invoke the ordinary presumption of good
faith, The rule is settled that a buyer of real property
which is in possession of persons other than the
seller must be wary and should investigate the rights
of who is in possession. Otherwise, without such
inquiry, the buyer can hardly be regarded as buyer
in good faith.
Embrado v. Court of Appeals
Held: Before buying the property, Salimbagat and Cimafranca
allegedly inquired from the office of the Register of Deeds concerning the
genuineness of the certificate of title of Eda Jimenez, and from the Clerk of
Court of the Court of First Instance of Dipolog City as to whether the
property was involved in any litigation. However, they failed to inquire
from petitioners as to why they were the ones in actual possession of the
property.
The rule is settled that a buyer of real property which is in the
possession of persons other than the seller must be wary and should
investigate the rights of those in possession. Otherwise, without such
inquiry, the buyer can hardly be regarded as a buyer in good faith. When a
man proposes to buy or deal with realty, his first duty is to read the public
manuscript, i.e., to look and see who is there upon it, and what are his
rights. A want of caution and diligence which an honest man of ordinary
prudence is accustomed to exercise in making purchases is, in
contemplation of law, a want of good faith. The buyer who has failed to
know or discover that the land sold to him is in the adverse possession of
another, is a buyer in bad faith.
The fact that Lucia Embrado resides in the premises, coupled
with the relatively young age and meager financial standing of the Jimenez
spouses, should have been sufficient for Cimafranca to hesitate accepting
Eda’s transfer certificate of title at its face value. Cimafranca, after
deliberately closing his eyes to such a vital information, is now claiming
good faith. For obvious reasons, we cannot accept his contention. We thus
declare him, together with Marcos Salimbagat, to be purchasers in bad faith
hence not entitled to protection under the Torrens system of registration.
Lot 564 is now registered in the name of Eda Jimenez “married
to Santiago Jimenez” under Transfer Certificate of Title No. T-17103 which
was issued pursuant to the “Absolute Deed of Sale” executed in her favor
by petitioner Lucia Embrado. We have already declared said deed of sale as
null and void since its object, Lot 564, is conjugal property which was sold
by Lucia Embrado without her husband’s conformity. The present vendees,
Marcos Salimbagat and Pacifico Cimafranca, who bought the property from
Eda Jimenez have failed to persuade us that they acquired the property in
good faith.
NOTE: Bad faith is personal. Just because a person is
in bad faith (knows of the defect or flaw in his title) does not
necessarily mean that his successors-in-interest are also in bad
faith. As a matter of fact, a child or heir may even be presumed in
good faith, notwithstanding the father’s bad faith.
enjoyed in the same character in which it was acquired, until the
contrary is proved.
SUMMARY
“xxx It is a fact that the petitioner is not conversant
with the laws because he is not a lawyer. In accepting the
mortgage of the improvements he proceeded on the well-
grounded belief that he was not violating the prohibition
regarding the alienation of the land. In taking possession thereof
and in consenting to receive its fruits, he did not know, as
clearly as a jurist does, that the possession and enjoyment of the
fruits are attributes of the contract of antichresis and that the
latter, as a lien, was prohibited by Section 116. These
considerations again bring us to the conclusion that, as to the
petitioner, his ignorance of the provisions of section 116 is
excusable and may, therefore, be the basis of his good faith. The
petitioner is deemed a possessor in good faith.
3. Presumption of Possession of the Same
Character
Article 529. It is presumed that possession continues to be

(a) GOOD FAITH — “Good faith is always presumed.’’

a. If he is not aware – GOOD FAITH. There is
(Art. 527).
always a presumption that every possessor is a
(b) CONTINUITY OF CHARACTER OF POSSESSION
possessor in good faith (Article 527)
(whether in good faith or bad faith — “It is presumed that
b. If he is aware – BAD FAITH. T his is purely
possession continues to be enjoyed in the same character in which
personal to the possessor. It may not necessarily be
it was acquired, until the contrary is proved.’’ (Art. 529).
transmitted to the heir or his successor-in-interest.
(c) NON-INTERRUPTION OF POSSESSION — “The
possession of hereditary property is deemed transmitted to the heir
Mistake upon a doubtful or difficult question of law
without interruption, and from the moment of the death of the
may be the basis of good faith
decedent, in case the inheritance is accepted. One who validly
Ordinarily, it is only ignorance or mistake of fact which
renounces an inheritance is deemed never to have possessed the
serves as basis of good faith but not mistake of law in view of the
same.” (Art. 533).
principle enshrined in Article 3 of the New Civil Code that
(d) PRESUMPTION OF JUST TITLE — “A possessor
“ignorance of the law excuses no one from compliance therewith.”
in the concept of owner has in his favor the legal presumption that
However, the possessor’s mistake upon a doubtful or difficult
he possesses with just title, and he cannot be obliged to show or
question of law may serve as basis of his good faith, in which case
prove it.’’ (Art. 541).
such mistake will not render him a possessor in bad faith.
(e) NON-INTERRUPTION OF POSSESSION OF
According to Manresa, gross and inexcusable ignorance of the law
PROPERTY UNJUSTLY LOST BUT LEGALLY RECOVERED
may not be the basis of good faith, but excusable error arising from
— “One who recovers, according to law, possession unjustly lost,
complex legal principles and from the interpretation of conflicting
shall be deemed for all purposes which may redound to his benefit,
or doubtful doctrines may be such basis.
to have enjoyed it without interruption.” (Art. 561).
One illustration of this is the case of Kasilag v. Roque. In
(f) POSSESSION DURING INTERVENING PERIOD
this case, Ambrosio mortgaged in favor of the petitioner the
— “It is presumed, that the present possessor who was also the
improvements she made on her land acquired by a homestead
possessor at previous time, has continued to be in possession
patent. When Ambrosio was not able to pay the interest on the
during the intervening time, unless there is proof to the contrary.”
loan, she and the petitioner verbally agreed that she would convey
(Art. 1138[2]).
to the latter the possession of the land subject to the condition that
(g) POSSESSION OF MOVABLES WITH REAL
the petitioner would not collect the interest, would introduce
PROPERTY — “The possession of real property presumes that of
improvements thereon and would be entitled to the fruits. Pursuant
the movables therein, so long as it is not shown or proved that they
to such verbal agreement, the petitioner did all three conditions.
should be excluded.” (Art. 542).
After the death of Ambrosio, her heirs sought to annul the contracts
which she entered into with the petitioner on the ground that the
D. ACQUISITION OF POSSESSION
same were in violation of Section 116 of the Public Land Act
prohibiting any alienation or encumbrance of lands acquired under
Article 531. Possession is acquired by the material
the free patent for a period of five years from the date of the
occupation of a thing or the exercise of a right, or by the fact that it is
issuance of the patent. This law, however, allows the pledge or subject to the action of our will, or by the proper acts and legal
mortgage of the improvements thereon. When the case reached the formalities established for acquiring such right.
appellate court, the Court of Appeals modified the judgment of the
lower court by declaring the petitioner possessor in bad faith for Possession is acquired:
taking the land in violation of Section 116 of the Public Land Act.
In resolving the issue of whether petitioner was a possessor in good (a) By material occupation (detention) of a thing or the
faith or not, the Court held — exercise of a right (quasi-possession). (This also
Page 56 of 121
 includes constitutum possessorium or traditio brevi
manu.)
(b) By subjection to our will (this includes traditio
longa manu — by mere agreement; or by the
delivery of keys — traditio simbolica) (clearly, this
does not require actual physical detention or
seizure).
(c) By constructive possession or proper acts and legal
formalities (such as succession, donation, execution
of public instruments; or thru the possession by a
sheriff by virtue of a court order.)
In Medina v. Greenfield Development Corporation, the
Supreme Court held that the execution of the deeds f conveyance is
already deemed equivalent to delivery of the property and prior
physical possession is not required. Possession is also transferred,
along with ownership thereof, by virtue of the notarized deeds of
conveyances. Under Article 1498 of the Civil Code, when the sale
is made through a public instrument, the execution thereof shall be
equivalent to delivery of the object of the contract.
In donations, there is no need of delivery. The moment
the donation is in the form provided by law, the donee is deemed to
be in possession of the thing donated. Ownership is automatically
acquired by the donee.
The acquisition of possession presupposes the
existence of two essential elements: (1) the corpus; and (2) the
animus possidendi. The first refers refer to the material holding of
the thing or the exercise of the right which may be acquired
through any of the modes mentioned in this article. The second, on
the other hand, refers to the intent to possess the thing or right. In
other words, possession is not acquired in law in the absence of
intent to possess it although there is physical holding of the thing.
For example, if stolen goods are placed in the bag of a person by
another without the former’s knowledge and consent, the former is
not considered a possessor in law because of the absence of intent
to possess the goods.
Republic v. David
Held: First, actual possession is not the same as actual
occupancy. Hence, it was an error on the part of the lower courts to hold
that the requirement of possession alone was a sufficient compliance with
the conditions under subparagraphs (a) and (c).
Under the law, “[p]ossession is acquired by the material
occupation of a thing or the exercise of a right, or by the fact that it is
subject to the action of our will, or by the proper acts and legal formalities
established for acquiring such right.” As such, actual possession consists in
the manifestation of acts of dominion over property of such a nature as a
party would naturally exercise over his own[22] -- as when respondent
himself is physically in occupation of the property, or even when another
person who recognizes the former’s rights as owner is in occupancy. [23] In
short, possession can be either “actual” or merely constructive.
On the other hand, actual occupancy connotes “something real,
or actually existing, as opposed to something merely possible, or to
something which is presumptive or constructive.” Unlike possession, it can
only be actual or real, not constructive.
Equatorial Realty v. Mayfair
Held: That actual possession of the property was turned over by
Carmelo to Equatorial is clear from the fact that the latter received rents
from Mayfair.  Receiving rentals is an exercise of actual possession. 
When Mayfair paid its monthly rentals to Equatorial, it recognized the
latter’s right of ownership over the property.  And even if Mayfair did not
recognize Equatorial’s superior right, the fact remains that Equatorial
was then enjoying the fruits of the disputed property.  Pertinently, it
Page 57 of 121
does not follow that because a transaction is prohibited or illegal, title, as
between the parties to the transaction, does not pass from the seller,
donor, or transferor to the vendee, donee or transferee.
1. Acquisition of Possession from the Viewpoint of
Who Possesses
Article 532. Possession may be acquired by the same person
who is to enjoy it, by his legal representative, by his agent, or by any
person without any power whatever; but in the last case, the possession
shall not be considered as acquired until the person in whose name the
act of possession was executed has ratified the same, without prejudice
to the juridical consequences of negotiorum gestio in a proper case.
For personal acquisition, the following must be present:
a. intent to possess
b. capacity to possess
c. object must be capable of being possessed
If thru an authorized person:
a. intent to possess for principal (not for agent)
b. authority or capacity to possess (for another)
c. principal has intent and capacity to possess
If thru an authorized person (as in negotiorum gestio):
a. intent to possess for another (the “principal)
b. capacity of “principal” to possess
c. ratification by “principal” (The possession although
cured only by the express or implied ratification
should be regarded as having a RETROACTIVE
effect.)
Ericsson v. City of Pasig
Held: In Commissioner of Internal Revenue v. Bank of
Commerce, the Court interpreted gross receipts as including those which
were actually or constructively received, viz.
Actual receipt of interest income is not limited to physical
receipt. Actual receipt may either be physical receipt or constructive
receipt. When the depository bank withholds the final tax to pay the tax
liability of the lending bank, there is prior to the withholding a constructive
receipt by the lending bank of the amount withheld. From the amount
constructively received by the lending bank, the depository bank deducts
the final withholding tax and remits it to the government for the account of
the lending bank. Thus, the interest income actually received by the lending
bank, both physically and constructively, is the net interest plus the amount
withheld as final tax.
The concept of a withholding tax on income obviously and
necessarily implies that the amount of the tax withheld comes from the
income earned by the taxpayer. Since the amount of the tax withheld
constitutes income earned by the taxpayer, then that amount manifestly
forms part of the taxpayer’s gross receipts. Because the amount withheld
belongs to the taxpayer, he can transfer its ownership to the government in
payment of his tax liability. The amount withheld indubitably comes from
income of the taxpayer, and thus forms part of his gross receipts. (Emphasis
supplied)
Further elaboration was made by the Court in Commissioner
of Internal Revenue v. Bank of the Philippine Islands, in this wise:
Receipt of income may be actual or constructive. We have held
that the withholding process results in the taxpayer’s constructive receipt of
the income withheld, to wit:
By analogy, we apply to the receipt of income the rules
on actual and constructive possession provided in Articles 531 and 532 of
our Civil Code.
 Under Article 531:
“Possession is acquired by the material occupation of a thing or
the exercise of a right, or by the fact that it is subject to the action of our
will, or by the proper acts and legal formalities established for acquiring
such right.”
Article 532 states:
“Possession may be acquired by the same person who is to enjoy
it, by his legal representative, by his agent, or by any person without any
power whatever; but in the last case, the possession shall not be considered
as acquired until the person in whose name the act of possession was
executed has ratified the same, without prejudice to the juridical
consequences of negotiorum gestio in a proper case.”
The last means of acquiring possession under Article 531 refers
to juridical acts—the acquisition of possession by sufficient title—to which
the law gives the force of acts of possession. Respondent argues that only
items of income actually received should be included in its gross receipts. It
claims that since the amount had already been withheld at source, it did not
have actual receipt thereof.
We clarify. Article 531 of the Civil Code clearly provides that
the acquisition of the right of possession is through the proper acts and legal
formalities established therefor. The withholding process is one such act.
There may not be actual receipt of the income withheld; however, as
provided for in Article 532, possession by any person without any power
whatsoever shall be considered as acquired when ratified by the person in
whose name the act of possession is executed.
In our withholding tax system, possession is acquired by the
payor as the withholding agent of the government, because the taxpayer
ratifies the very act of possession for the government. There is
thus constructive receipt. The processes of bookkeeping and accounting for
interest on deposits and yield on deposit substitutes that are subjected to
FWT are indeed—for legal purposes—tantamount to delivery, receipt or
remittance.
2. Acquisition of Hereditary Property
Article 533. The possession of hereditary property is deemed
transmitted to the heir without interruption and from the moment of
the death of the decedent, in case the inheritance is accepted. One who
validly renounces an inheritance is deemed never to have possessed the
same.
Article 534. One who succeeds by hereditary title shall not
suffer the consequences of the wrongful possession of the decedent, if it
is not shown that he was aware of the flaws affecting it; but the effects
of possession in good faith shall not benefit him except from the date of
death of the decedent.
In wills, upon the death of the decedent, if the will is
valid, the heirs mentioned in the will are automatically, by fiction
of law to be in possession of the hereditary estate. Actually and in
truth, the heirs are not in actual possession, but by fiction of law,
the possession by the decedent is deemed to be continued without
any interruption. If heir refuses (or is incapacitated to inherit), he is
deemed NEVER to have possessed the same.
The rule in this jurisdiction is that only personal
knowledge of the flaw in one’s title or mode of acquisition can
make him a possessor in bad faith, for bad faith is not transmissible
from one person to another, not even to an heir [Escritor, Jr. v.
IAC].
As defined in the law, a possessor in bad faith is one in
possession of property knowing that his title thereto is defective.
The existence of bad faith on the part of one possessor does not,
however, prejudice his successors-in-interest. The rule in this
jurisdiction is that only personal knowledge of the flaw in one’s
title or mode of acquisition can make him a possessor in bad faith,
Page 58 of 121
for bad faith is not transmissible from one person to another, not
even to an heir.
The reason for the above-quoted article is that bad faith is
personal and intransmissible. Its effects must, therefore, be suffered
only by the person who acted in bad faith; his heir should not be
saddled with such consequences.
3. Acquisition by Minors and Incapacitated Persons
Article 535. Minors and incapacitated persons may acquire
the possession of things; but they need the assistance of their legal
representatives in order to exercise the rights which from the
possession arise in their favor.
The persons referred to in this Article are:
(a) unemancipated minors
(b) minors emancipated by parental concession or by
marriage (in certain cases, like possession of real
property)
(c) other incapacitated persons like 1) the insane 2) the
prodigal or spendthrift 3) those under civil
interdiction4) deaf-mutes (in certain cases) — (in
general, those laboring under restrictions on
capacity to act).
Minors and incapacitated persons may acquire possession
in those matters where they have capacity to act like in the case of
physical seizure of res nullus or donation of personalty
simultaneously delivered to them and not possession where
juridical acts are imperative like donations of realty where minors
and incapacitated persons have no juridical capacity to execute.
Minors and other incapacitated persons may acquire
property or rights by prescription, either personally or thru their
parents, guardians, or legal representatives (Article 1117).
4. Acquisition of Possession of Wild Animals
Article 560. Wild animals are possessed only while they are
under one’s control; domesticated or tamed animals are considered
domestic or tame, if they retain the habit of returning to the premises
of the possessor. (465)
E. WHEN POSSESSION IS NOT ACQUIRED
1. Acquisition Through Force or Violence
Article 536. In no case may possession be acquired through
force or intimidation as long as there is a possessor who objects thereto.
He who believes that he has an action or a right to deprive another of
the holding of a thing, must invoke the aid of the competent court, if
the holder should refuse to deliver the thing.
In De Roxas v. Maglanso, it was held that possession
acquired by force or violence does not affect possession because
such possession is not true possession respected by law. For all
purposes favourable to the true owner or possessor, his possession
is not considered interrupted.
In Bishop of Lipa v. Municipality of San Jose, it was held
that there is force or violence in the acquisition, even when the
property was not forcibly taken away from the owner, if the
intruder occupied it during the absence of the owner and commits
acts which repel the return of the owner.
 As such, even if a possessor is physically ousted from the
property through the use of force or violence, he is still deemed the
legal possessor in the eyes of the law [Cequena v. Bolante].
Elsewise stated, a person in possession cannot be ejected by force,
violence or terror, not even by the owners, and notwithstanding the
actual condition of the title to the property. If such illegal manner
of ejectment is employed, the aprty who proves prior possession
can recover possession even from the owners themselves [Heirs of
Laurora v. Sterling Technopark III].
How to recover possession
If a person has been deprived of possession, he cannot
take the law into his own hands. First, he should request the
usurper to give up the thing and if the latter refuses, the former
should invoke the aid of the proper and competent court (that
which has jurisdiction over the subject matter and the parties)
Thus, in Villafuerte v. Court of Appeals, when private
respondents personally took it upon themselves to evict petitioners
from their properties, which act was in clear contravention of the
law, they became liable "for all the necessary and natural
consequences of [their] illegal act."
2. Acts Merely Tolerated or Clandestine and
Unknown Acts
Article 537. Acts merely tolerated, and those executed
clandestinely and without the knowledge of the possessor of a thing, or
by violence, do not affect possession.
a. Acts merely tolerated
“Toleration is defined as ‘the act or practice of permitting
or enduring something not wholly approved of.’ Sarona v. Villegas
described what tolerated acts means, in this language:
“Professor Arturo M. Tolentino states that acts
merely tolerated are those which by reason of neighborliness or
familiarity, the owner of property allows his neighbor or another
person to do on the property; they are generally those particular
services or benefi ts which one’s property can give to another
without material injury or prejudice to the owner, who permits
them out of friendship or courtesy. x x x. And, Tolentino
continues, even though this is continued for a long time, no right
will be acquired by prescription.” x x x. Further expounding on
the concept, Tolentino writes: There is tacit consent of the
possessor to the acts which are merely tolerated. Thus, not every
case of knowledge and silence on the part of the possessor can
be considered mere tolerance. By virtue of tolerance that is
considered as an authorization, permission or license, acts of
possession are realized or performed. The question reduces itself
to the existence or non-existence of the permission.”
Possession, to constitute the foundation of a prescriptive
right, must be a possession under claim of title (en concepto de
dueño), or to use the common law equivalent of the term, it must
be adverse. Acts of a possessory character performed by one who
holds by mere tolerance by the owner are clearly not en concepto
de dueño, and such possessory acts, no matter how long so
continued, do not start the running of the period of prescription
[Cuaycong v. Benedito].
In municipality of Nueva Caceres v. Director of Lands, it
was held that even assuming that these acts continue, they do not
affect possession. On the basis of these acts, no right will be
acquired by prescription.
Page 59 of 121
In Estrella v. Director of Lands, it was held that a person
who occupied another’s property at the latter’s tolerance without
any contract between them, is necessarily bound by an implied
promise to vacate it upon demand, falling in which ejectment suit is
proper against him.
Meaning of “Acts ... do not affect possession” (Art. 537)
(a) The intruder does not acquire any right to possession
(NO LEGAL POSSESSION).
(b) The legal possessor, even if physically ousted, is still
the possessor and therefore — 1) still entitled to the benefits of
prescription; 2) still entitled to the fruits; 3) still entitled as
possessor for all purposes favorable to his possession. (See Ayala
de Roxas v. Maglonso, 8 Phil. 745; 4 Manresa 201-202).
(c) The intruder cannot acquire the property by
prescription. (See Ayala de Roxas v. Maglonso, supra; Cuaycong
v. Benedicto, 37 Phil. 781).
b. Clandestine acts or secret possession
Acts which are executed clandestinely and without the
knowledge of the possessor do not affect possession.128 In order
for possession to remain unaffected, it is necessary that the acts
executed must be both clandestine and unknown to the possessor.
An act is considered done clandestinely if the same is done in
secret, hidden or concealed.129 In other words, the term
“clandestine” is used in contradistinction to the term “public”
under Article 1118 of the New Civil Code — as a requisite for
acquisition of real property through acquisitive prescription. If the
act is done clandestinely but the same is known to the possessor,
his possession will be affected. In the same way, if the act is done
publicly even without the knowledge of the possessor, the same
will affect the latter’s possession.
If both requisites are satisfied, meaning, the act executed
is both clandestine and unknown to the possessor, the same does
not affect the true possession of the legal possessor. As a
consequence, the legal possessor’s possession is not deemed
interrupted for all legal intents and purposes, e.g., it will not
interrupt the running of the period of acquisitive prescription in
favor of the legal possessor nor it will affect his right to receive the
fruits. On the part of the actual possessor, his possession acquired
through clandestine acts not known to the legal possessor will not
ripen into ownership through prescription because one of the
requirements thereof — that the possession be “public” in character
— will not be present.
F. POSSESSION DE FACTO
Article 538. Possession as a fact cannot be recognized at the
same time in two different personalities except in the cases of co-
possession. Should a question arise regarding the fact of possession, the
present possessor shall be preferred; if there are two possessors, the
one longer in possession; if the dates of the possession are the same, the
one who presents a title; and if all these conditions are equal, the thing
shall be placed in judicial deposit pending determination of its
possession or ownership through proper proceedings.
In case of conflict involving the question of possession as
a fact, the following rules of preference shall govern:
a. The present possessor shall be preferred.
b. If there are two possessors, the one longer in
possession is preferred.
 c. If the dates of possession are the same, the one who realty, shows a lack of sufficient adverseness of the formers' possession to
presents a title. qualify as being one in the concept of owner.
d. If all the foregoing conditions are equal, the thing The only instance petitioners assumed a legal position
shall be placed in judicial deposit pending sufficiently adverse to respondent's ownership of the disputed properties
was when they declared Lot No. 17526 for tax purposes in their name in
determination of its possession or ownership
1989. Since then and until the filing of the complaint for recovery of
through proper proceedings. possession in 1990, only one year had elapsed. Hence, petitioners never
acquired ownership through extraordinary prescription of the subject realty.
In determining who the “present possessor” is, the On the other hand, being the sole transferree of his father,
precepts earlier discussed in letter E shall be taken into respondent showed through his tax declarations which were coupled with
consideration. Hence, if the controversy is between a previous possessory acts that he, through his predecessor, had been in possession of
possessor and the actual possessor who acquires possession the land for more than 30 years since 1916. "Open, exclusive and
through force, violence, intimidation, clandestine acts not known to undisputed possession of alienable public land for the period prescribed by
law creates the legal fiction whereby the land, upon completion of the
the previous possessor, the previous possessor shall be deemed as
requisite period - ipso jure and without the need of judicial or other
the present possessor because his possession was not affected sanction, ceases to be public land and becomes private
[Cequena v. Bolante]. Thus, where a dispute over possession arises property."[34] Ownership of immovable property is acquired by
between two persons, the person first having actual possession is extraordinary prescription through possession for 30 years. [35] For purposes
the one who is entitled to maintain the action granted by law; of deciding the instant case, therefore, the possession by respondent and his
otherwise, a mere usurper without any right whatever, might enter predecessor had already ripened into ownership of the subject realty by
upon the property of another and, by allowing himself to be virtue of prescription as early as 1946.
ordered off, could acquire the right to maintain the action of
forcible entry and detainer, however momentary his intrusion Wong v. Carpio
might have been [Gaza v. Lim]. Held: It should be stressed that "possession is acquired by the
material occupation of a thing or the exercise of a right, or by the fact that it
is subject to the action of our will, or by the proper acts and legal
Olegario v. Mari
formalities for acquiring such right." (Art. 531, Civil code; Rizal Cement
Held: As previously mentioned, respondent's predecessor, Juan
Co., Inc. vs. Villareal, 135 SCRA 15 [1985]); and that the execution of a
Mari, had declared the disputed realty for tax purposes as early as 1916.
sale thru a public instrument shall be equivalent to the delivery of the thing,
The tax declarations show that he had a two storey house on the realty. He
unless there is stipulation to the contrary x x x.  If, however, notwith-
also planted fruit bearing trees and bamboos thereon. The records also show
standing the execution of the instrument, the purchaser cannot have the
that the 897-square meter property had a bamboo fence along its perimeter.
enjoyment and material tenancy of the thing and make use of it herself,
All these circumstances clearly show that Juan Mari was in possession of
because such tenancy and enjoyment are opposed by another, then delivery
subject realty in the concept of owner, publicly and peacefully since 1916
has not been effected.  (Paras, Civil Code of the Philippines, Vol. II, 1989
or long before petitioners entered the disputed realty sometime in 1965.
Ed., p. 400).
Based on Article 538 of the Civil Code, the respondent is the
Applying the above pronouncements on the instant case, it is
preferred possessor because, benefiting from his father's tax declaration of
clear that possession passed from vendor William Giger to private
the subject realty since 1916, he has been in possession thereof for a longer
respondent Manuel Mercado by virtue of the first sale a retro (Exhibit A),
period. On the other hand, petitioners acquired joint possession only
and accordingly, the later sale a retro (Exhibit 5) in favor of petitioner
sometime in 1965.
failed to pass the possession of the property because there is an impediment
Despite 25 years of occupying the disputed lots, therefore,
- the possession exercised by private respondent.  Possession as a fact
petitioners did not acquire ownership. Firstly, they had no just title.
cannot be recognized at the same time in two different personalities except
Petitioners did not present any document to show how the titles over Lot
in the cases of co-possession.  Should a question arise regarding the fact of
Nos. 17526 and 17533 were transferred to them, whether from respondent,
possession, the present possessor shall be preferred; if there are two
his predecessor, or any other person. Petitioners, therefore, could not
possessions, the one longer in possession, if the dates of possession are the
acquire the disputed real property by ordinary prescription through
same, the one who presents a title; and if these conditions are equal, the
possession for 10 years. Secondly, it is settled that ownership cannot be
thing shall be placed in judicial deposit pending determination of its
acquired by mere occupation. Unless coupled with the element of hostility
possession or ownership through proper proceedings (Art. 538, Civil Code).
towards the true owner, occupation and use, however long, will not confer
As to petitioner's query that "Is the entry of petitioner to the
title by prescription or adverse possession. In other words, possession, to
property characterized by force, intimidation, threat, strategy, or
constitute the foundation of a prescriptive right, must be possession under
stealth in order to show that private respondent has had possession so that
claim of title, that is, it must be adverse.
the case is within the jurisdiction of the inferior court?" (p. 15, Petition; p.
Petitioners' acts of a possessory character - acts that might have
16, Rollo).  The same is answered in the affirmative.
been merely tolerated by the owner - did not constitute possession. No
The act of entering the property and excluding the lawful pos-
matter how long tolerated possession is continued, it does not start the
sessor therefrom necessarily implies the exertion of force over the property,
running of the prescriptive period.[30] Mere material possession of land is
and this is all that is necessary.  Under the rule, entering upon the premises
not adverse possession as against the owner and is insufficient to vest title,
by strategy or stealth is equally as obnoxious as entering by force.  The
unless such possession is accompanied by the intent to possess as an owner.
foundation of the action is really the forcible exclusion of the original
There should be a hostile use of such a nature and exercised under such
possessor by a person who has entered without right.  The words "by force,
circumstance as to manifest and give notice that the possession is under a
intimidation, threat, strategy, or stealth" include every situation or condition
claim of right.
under which one person can wrongfully enter upon real property and
Petitioners have failed to prove that their possession was adverse
exclude another who has had prior possession therefrom.  If a trespasser
or under claim of title or right. Unlike respondent, petitioners did not have
enters upon land in open daylight, under the very eyes of person already
either the courage or forthrightness to publicly declare the disputed lots as
clothed with lawful possession, but without the consent of the latter, and
owned by them for tax purposes. Tax declarations "prove that the holder
there plants himself and excludes such prior possessor from the property,
has a claim of title over the property. Aside from manifesting a sincere
the action of forcible entry and detainer can unquestionably be maintained,
desire to obtain title thereto, they announce the holder's adverse claim
even though no force is used by the trespasser other than such as is
against the state and other interested parties".[32] Petitioners' omission, when
necessarily implied from the mere acts of planting himself on the ground
viewed in conjunction with respondent's continued unequivocal declaration
and excluding the other party.  (Tolentino, Civil Code of the Philippines,
of ownership over, payment of taxes on and possession of the subject

Page 60 of 121
Vol. II, 1983 Ed., pp. 243-244; Drillon vs. Gaurana, 149 SCRA 342
[1987]).
G. EFFECTS OF POSSESSION
Article 539. Every possessor has a right to be respected in
his possession; and should he be disturbed therein he shall be protected
in or restored to said possession by the means established by the laws
and the Rules of Court.
A possessor deprived of his possession through forcible entry
may within ten days from the filing of the complaint present a motion
to secure from the competent court, in the action for forcible entry, a
writ of preliminary mandatory injunction to restore him in his
possession. The court shall decide the motion within thirty (30) days
from the fi ling thereof.
1. Right to Protection of Possessors
The Civil Code considers possession as an outward sign
of ownership, it having all the appearances of ownership. For this
reason, the law renders protection to every possessor whether
owners or not. According to the Supreme Court, the phrase “every
possessor” in the article indicates that all kinds of possession, from
that of the owner to that of a mere holder, except that which
constitutes a crime, should be respected and protected by the means
established and the laws of procedure.
The protection is given because the Civil Code assumes
that the possessor of a thing is the owner and also because even if
the possessor is not the owner, his situation should be protected
until it is shown that there is another person with a better right. The
fact of possession in itself, therefore, has a positive value and is
endowed with a distinct standing of its own in the law of property.
True, by this principle of respect for the possessory status, a
wrongful possessor may at times be upheld by the courts, but this is
only temporary and for one sole and special purpose, namely, the
maintenance of public order. The protection is only temporary
because it is intended that as soon as the lawless act of
dispossession has been suppressed, the question of ownership or of
possession de jure is to be settled in the proper court and in a
proper action. The larger and permanent interests of property
require that such rare and exceptional instance of preference in the
courts of the actual but wrongful possessor be permitted.
2. Actions to Recover Possession
Any lawful possessor, not only the owner, may resort to
reasonable force to repel or prevent an actual or threatened
unlawful physical invasion or usurpation of the property in his
possession. But this doctrine can only be invoked at the time of
actual or threatened dispossession, and not when possession has
already been lost. In the latter case, the owner must resort to
judicial process for the recovery of the property as required in
Article 536 of the New Civil Code. Pursuant to this article, he who
believes that he has an action or a right to deprive another of the
holding of a thing must invoke the aid of the competent court, if the
holder should refuse to deliver the thing. This article is
complemented by the present article (Article 539) which grants to
possessors the right not only to be protected in his possession, but
likewise the right to be restored to said possession in case of
disturbance by the means established by the laws and the Rules of
Court.
In Javelosa v. Tapos, the Supreme Court ruled:
Page 61 of 121
Accordingly, the owner may choose among three
kinds of actions to recover possession of real property -
an accion interdictal, accion publiciana or an accion
reivindicatoria.
Notably, an accion interdictal is summary in nature,
and is cognizable by the proper municipal trial court or
metropolitan trial court. It comprises two distinct causes of
action, namely, forcible entry (detentacion) and unlawful
detainer (desahuico). In forcible entry, one is deprived of the
physical possession of real property by means of force,
intimidation, strategy, threats, or stealth, whereas in unlawful
detainer, one illegally withholds possession after the expiration
or termination of his right to hold possession under any contract,
express or implied. An action for forcible entry is distinguished
from an unlawful detainer case, such that in the former, the
possession of the defendant is illegal from the very beginning,
whereas in the latter action, the possession of the defendant is
originally legal but became illegal due to the expiration or
termination of the right to possess. Both actions must be brought
within one year from the date of actual entry on the land, in case
of forcible entry, and from the date of last demand, in case of
unlawful detainer. The only issue in said cases is the right to
physical possession.
On the other hand, an accion publiciana is the
plenary action to recover the right of possession, which should
be brought in the proper regional trial court when dispossession
has lasted for more than one year. It is an ordinary civil
proceeding to determine the better right of possession of realty
independently of title.
Lastly, an accion reivindicatoria is an action to
recover ownership, also brought in the proper RTC in an
ordinary civil proceeding.
In the case at bar, the petitioner, claiming to be the
owner of the subject property, elected to file an action for
unlawful detainer. In making this choice, she bore the
correlative burden to sufficiently allege, and thereafter prove by
a preponderance of evidence all the jurisdictional facts in the
said type of action. Specifically, the petitioner was charged with
proving the following jurisdictional facts, to wit:
(i) initially, possession of property by the defendant
was by contract with or by tolerance of the plaintiff;
(ii) eventually, such possession became illegal upon
notice by plaintiff to defendant of the termination of the latter's
right of possession;
(iii) thereafter, the defendant remained in possession
of the property and deprived the plaintiff of the enjoyment
thereof; and
(iv) within one year from the last demand on
defendant to vacate the property, the plaintiff instituted the
complaint for ejectment.
Particularly, the complaint stated that (i) the
respondents occupied the subject property upon the tolerance of
the petitioner; (ii) the petitioner sent the respondents a demand
to vacate sometime in October 2003; (iii) the same demand was
unheeded; and (iv) the action for unlawful detainer was filed
within one year from the date of the demand. Verily, the
following jurisdictional facts properly vested the MCTC of
Buruanga, Aklan, with jurisdiction over the case.
However, in order for the petitioner to successfully
prosecute her case for unlawful detainer, it is imperative upon
her to prove all the assertions in her complaint. After all, "the
basic rule is that mere allegation is not evidence and is not
equivalent to proof." This, the petitioner failed to do. As
correctly observed by the CA, the petitioner failed to adduce
evidence to establish that the respondents' occupation of the
subject property was actually effected through her tolerance or
permission. Unfortunately, the petitioner failed to prove how
and when the respondents entered the subject lot, as well as how
and when the permission to occupy was purportedly given. In
fact, she was conspicuously silent about the details on how the
 permission to enter was given, save for her bare assertion that
the respondents' occupied the premises as caretakers thereof.
The absence of such essential details is especially troubling
considering that the respondents have been occupying the
subject property for more than 70 years, a fact which was not
disputed by the petitioner. In this regard, it is must be shown
that the respondents first came into the property due to the
permission given by the petitioner or her predecessors.
It cannot be gainsaid that the fact of tolerance is of
utmost importance in an action for unlawful detainer. Without
proof that the possession was legal at the outset, the logical
conclusion would be that the defendant's possession of the
subject property will be deemed illegal from the very beginning,
for which, the action for unlawful detainer shall be dismissed.
Remarkably, in Quijano v. Atty. Amante, the Court
ruled that in an action for unlawful detainer, the plaintiff must
show that the possession was initially lawful, and thereafter,
establish the basis of such lawful possession. Similarly, should
the plaintiff claim that the respondent's possession was by
his/her tolerance, then such acts of tolerance must be proved. A
bare allegation of tolerance will not suffice. At least, the
plaintiff must point to the overt acts indicative of his/her or
predecessor's permission to occupy the disputed property.
Failing in this regard, the occupant's possession could then be
deemed to have been illegal from the beginning. Consequently,
the action for unlawful detainer will fail. Neither may the
ejectment suit be treated as one for forcible entry in the absence
of averments that the entry in the property had been effected
through force, intimidation, threats, strategy or stealth.
Similarly, in Suarez v. Sps. Emboy, the Court warned
that "when the complaint fails to aver the facts constitutive of
forcible entry or unlawful detainer, as where it does not state
how entry was effected or how and when dispossession started,
the remedy should either be an accion publiciana or accion
reivindicatoria."
The same ruling was rendered in the case of Dr.
Carbonilla v. Abiera, et al., where the Court laid the important
dictum that the supposed acts of tolerance should have been
present right from the very start of the possession—from entry
to the property. "Otherwise, if the possession was unlawful from
the start, an action for unlawful detainer would be an improper
remedy." This same ruling was echoed in Jose v. Alfuerto, et
al., where the Court even emphasized its consistent and strict
holding that in an unlawful detainer case, "tolerance or
permission must have been present at the beginning of
possession; if the possession was unlawful from the start, an
action for unlawful detainer would not be the proper remedy and
should be dismissed."
Perforce, guided by all the foregoing cases, an action
for unlawful detainer fails in the absence of proof of tolerance,
coupled with evidence of how the entry of the respondents was
effected, or how and when the dispossession started. This rule is
so stringent such that the Court categorically declared in Go, Jr.
v. CA that tolerance cannot be presumed from the owner's failure
to eject the occupants from the land. Rather, "tolerance always
carries with it 'permission' and not merely silence or inaction for
silence or inaction is negligence, not tolerance." On this score,
the petitioner's tenacious claim that the fact of tolerance may be
surmised from her refusal for many years to file an action to
evict the respondents is obviously flawed.
3. Effect of Possession of Real Property
Article 542. The possession of real property presumes that of
the movables therein, so long as it is not shown or proved that they
should be excluded.
“Real property’’ and “movables’’ mean only real or
personal THINGS, not rights. If I possess a house (real property), it
Page 62 of 121
is presumed that I also possess the furniture (personal property)
therein.
4. Effect of Co-Possession
Article 543. Each one of the participants of a thing possessed
in common shall be deemed to have exclusively possessed the part
which may be allotted to him upon the division thereof, for the entire
period during which the co-possession lasted. Interruption in the
possession of the whole or a part of a thing possessed in common shall
be to the prejudice of all the possessors. However, in case of civil
interruption, the Rules of Court shall apply.
The concept of co-possession implies that the thing
subject matter thereof is undivided and there are two or more
possessors. If the co-possession is under claim of ownership, each
of the co-possessors is considered as the possessor of the whole
and over the whole each may exercise the right of possession,
subject to the similar right of the other co-possessors. This state of
affairs will last until the partition of the property. In the event of
partition, however, each of the co-possessors shall be deemed to
have exclusively possessed the part which may be allotted to him
for the entire period that the state of co-possession lasted.161
However, any interruption in the possession of the whole or part of
a thing possessed in common shall be to the prejudice of all the co-
possessors.
The foregoing principles may be illustrated as follows:
“A,” “B” and “C” are co-possessors of a parcel of land under claim
of ownership and in good faith for a period of eleven years, the
possession being exercised through “C.” On the eleventh year, the
co-possessors divided the property in three equal parts, each taking
exclusive possession of their part after the division. Two years after
the partition, “C” died. During his lifetime, “C” disposed of the
property allotted to him. After his death, however, his heirs fi led
an action against “A” and “B” claiming ownership of a portion of
said property on the ground that their predecessor-in-interest was
the actual possessor of the same and became the exclusive owner
thereof through ordinary acquisitive prescription. In this case, the
claim of the heirs will not prosper since “A” and “B” will be
deemed as the exclusive possessors of the part allotted to them
during the eleven years that the co-possession lasted. Under the
law, “C” is deemed as never to have possessed at all the parts
allotted to “A” and “B.”
In case of interruption, the law says that the same shall
affect the interest of all. This may be illustrated as follows: “A,”
“B” and “C” are co-possessors of a parcel of land under claim of
ownership, the possession being exercised through “C” for a period
of six years. On the seventh year, “X” took possession of one-third
of the area of he land in the concept of owner and adverse to the
interest of the copossessors and continued to possess the same until
the co-possessors decided to divide the property possessed in
common on the eleventh year. In this situation, the interruption of
possession in connection with one third of the area of the land will
prejudice not only “C” but all the co-possessors. Hence, the co-
possessors can claim ownership only of two-third of the area
through acquisitive prescription and only this area can be the
subject of partition among the co-possessors.
5. Expenses and Improvements
 Article 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the thing
until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in
good faith with the same right of retention, the person who has
defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which the
thing may have acquired by reason thereof.
a. Necessary Expenses
Necessary expenses are those incurred to preserve the
property without which, the said property will physically
deteriorate or be lost. Examples are major repairs of a house
[Angeles v. Lozada]; expenses for cultivation, production and
upkeep of the property [Mendoza v De Guzman].
Rule: Every possessor is entitled to a refund whether in
good or bad faith. The possessor in good faith is entitled to right of
retention of the property until the refund is made.
The objective of Article 546 of the Civil Code is to
administer justice between the parties involved. In this regard, this
Court had long ago stated in Rivera vs. Roman Catholic
Archbishop of Manila that the said provision was formulated in
trying to adjust the rights of the owner and possessor in good faith
of a piece of land, to administer complete justice to both of them in
such a way as neither one nor the other may enrich himself of that
which does not belong to him.  Guided by this precept, it is
therefore the current market value of the improvements which
should be made the basis of reimbursement.  A contrary ruling
would unjustly enrich the private respondents who would otherwise
be allowed to acquire a highly valued income-yielding four-unit
apartment building for a measly amount.  Consequently, the parties
should therefore be allowed to adduce evidence on the present
market value of the apartment building upon which the trial court
should base its finding as to the amount of reimbursement to be
paid by the landowner [Torbelo v. Sps. Rosario].
Heirs of Limense v. Ramos
Held: Useful expenses shall be refunded only to the possessor in
good faith with the same right of retention, the person who has defeated
him in the possession having the option of refunding the amount of the
expenses or of paying the increase in value which the thing may have
acquired by reason thereof.
In Spouses Del Campo v. Abesia, this provision was applied to
one whose house, despite having been built at the time he was still co-
owner, overlapped with the land of another. In that case, this Court ruled:
The court a quo correctly held that Article 448 of the Civil Code
cannot apply where a co-owner builds, plants or sows on the land owned in
common for then he did not build, plant or sow upon the land that
exclusively belongs to another but of which he is a co-owner. The co-owner
is not a third person under the circumstances, and the situation is governed
by the rules of co-ownership.
However, when, as in this case, the ownership is terminated by
the partition and it appears that the house of defendants overlaps or
occupies a portion of 5 square meters of the land pertaining to plaintiffs
which the defendants obviously built in good faith, then the provisions of
Article 448 of the new Civil Code should apply. x x x
In other words, when the co-ownership is terminated by a
partition, and it appears that the house of an erstwhile co-owner has
encroached upon a portion pertaining to another co-owner, but the
encroachment was in good faith, then the provisions of Article 448 should
apply to determine the respective rights of the parties. In this case, the co-
ownership was terminated due to the transfer of the title of the whole
property in favor of Joaquin Limense.
Under the foregoing provision, petitioners have the right to
appropriate said portion of the house of respondents upon payment of
indemnity to respondents, as provided for in Article 546 of the Civil Code.
Page 63 of 121
Otherwise, petitioners may oblige respondents to pay the price of the land
occupied by their house. However, if the price asked for is considerably
much more than the value of the portion of the house of respondents built
thereon, then the latter cannot be obliged to buy the land. Respondents shall
then pay the reasonable rent to petitioners upon such terms and conditions
that they may agree. In case of disagreement, the trial court shall fix the
terms thereof. Of course, respondents may demolish or remove the said
portion of their house, at their own expense, if they so decide.[36]
Florentino v. Supervalue, Inc.
Held: Further, Articles 448 and 546 of the Civil Code, which
allow full reimbursement of useful improvements and retention of the
premises until reimbursement is made, apply only to a possessor in good
faith, i.e., one who builds on land with the belief that he is the owner
thereof.  A builder in good faith is one who is unaware of any flaw in his
title to the land at the time he builds on it. In this case, the petitioner cannot
claim that she was not aware of any flaw in her title or was under the belief
that she is the owner of the subject premises for it is a settled fact that she is
merely a lessee thereof.
In Geminiano v. Court of Appeals,[36] this Court was emphatic in
declaring that lessees are not possessors or builders in good faith, thus:
Being mere lessees, the private respondents knew that their
occupation of the premises would continue only for the life of the lease. 
Plainly, they cannot be considered as possessors nor builders in good
faith.
In a plethora of cases, this Court has held that Article 448 of the
Civil Code, in relation to Article 546 of the same Code, which allows full
reimbursement of useful improvements and retention of the premises until
reimbursement is made, applies only to a possessor in good faith, i.e., one
who builds on land with the belief that he is the owner thereof.  It does not
apply where one's only interest is that of a lessee under a rental
contract; otherwise, it would always be in the power of the tenant to
"improve" his landlord out of his property.
Since petitioner's interest in the store space is merely that of the
lessee under the lease contract, she cannot therefore be considered a builder
in good faith.  Consequently, respondent may appropriate the improvements
introduced on the leased premises without any obligation to reimburse the
petitioner for the sum expended.
b. Useful Expenses
Article 547. If the useful improvements can be removed
without damage to the principal thing, the possessor in good faith may
remove them, unless the person who recovers the possession exercises
the option under paragraph 2 of the preceding article.
Useful expenses are those incurred to add value to the
property or increase productivity of the property like construction
of dining room, kitchen, closet and bathroom [Robles v.
Hermanos]; construction of irrigation system [Valenzuela v.
Lopez]; construction of artificial fishponds [Rivera v. Archbishop
of Manila].
Expenses incurred for the construction of a wall
surrounding the estate, the construction of an irrigation system and
the introduction of improvements in an uncultivated land were
classified as useful expenses by our Court [Valenzuela v. Lopez].
Those incurred for a chapel, an electric system or an elevator in a
building, a fishpond [Rivera v. Roman Catholic Church], are also
considered useful expenses.
Rule: Refundable only to possessors in good faith with
the same right of retention as in necessary expenses.
The possessor in good faith may remove the useful
improvements he had introduced provided that no substantial injury
or damage would be caused to the principal thing. In Javier v.
Concepcion, the right to remove useful improvements is subject to
the right of the owner to keep the improvements himself by paying
the expenses incurred or the concomitant increase in value of the
property caused by the improvements. In other words, the
possessor’s right of removal is subordinate to the right of the owner
to retain said improvements [Calagan v. CFI].
c. Luxurious Expenses
Article 548. Expenses for pure luxury or mere pleasure shall
not be refunded to the possessor in good faith; but he may remove the
ornaments with which he has embellished the principal thing if it
suffers no injury thereby, and if his successor in the possession does not
prefer to refund the amount expended.
Expenses for luxury are those incurred to cater to the
personal comfort, convenience or enjoyment of the possessor.
Rule: They are not refundable. The rationale behind this
denial is that the law does not compensate the personal whims and
caprices. These improvements are purely for embellishments and
not for preservation of the property or for increasing the value or
productivity of the property.
d. Right of Possessor in Bad Faith
Article 549. The possessor in bad faith shall reimburse the
fruits received and those which the legitimate possessor could have
received, and shall have a right only to the expenses mentioned in
paragraph 1 of Article 546 and in Article 443. The expenses incurred in
improvements for pure luxury or mere pleasure shall not be refunded
to the possessor in bad faith, but he may remove the objects for which
such expenses have been incurred, provided that the thing suffers no
injury thereby, and that the lawful possessor does not prefer to retain
them by paying the value they may have at the time he enters into
possession.
Regarding possessor’s rights (if in bad faith) to
ornamental expenses, see discussion under the next preceding
article.
NHA v. Manila Seedling Bank
Held: As provided in the law, respondent shall be made to
account for the fruits it received from the time it took possession until the
time it surrendered the excess to petitioner. Respondent has admitted that it
leased out the excess to various establishments and earned profits
therefrom. Having done so, it is bound to pay the corresponding amounts to
petitioner.
Respondent, however, shall be entitled to a refund of the
necessary expenses it incurred. Necessary expenses are those made for the
preservation of the land occupied, or those without which the land would
deteriorate or be lost. These may also include expenditures that augment the
income of the land or those that are incurred for its cultivation, production,
and upkeep.
e. Costs of Litigation
Article 550. The costs of litigation over the property shall be
borne by every possessor.
f. Improvements Caused by Nature or Time
Article 551. Improvements caused by nature or time shall
always inure to the benefit of the person who has succeeded in
recovering possession.
Page 64 of 121
Neither the possessor in good faith nor in bad faith is
entitled to: (a) improvements caused by NATURE (like alluvium,
etc.). (See 4 Manresa 275-276). (b) improvements caused by TIME
(like the improved flavor of wine).
6. Recovery of Possession
Article 553. One who recovers possession shall not be
obliged to pay for improvements which have ceased to exist at the time
he takes possession of the thing.
7. Presumption of Continuity of Possession
Article 554. present possessor who shows his possession at
some previous time, is presumed to have held possession also during
the intermediate period, in the absence of proof to the contrary.
If the present possessor can show proof that he was also
in possession of the property at some previous time, his possession
will be presumed to be continuous covering even the intermediate
period.218 This presumption, however, is merely disputable and
may be rebutted by proof to the contrary.
If the present possessor, however, succeeds the previous
possessor by hereditary title, his possession is also deemed
continuous and without any interruption from the moment of the
death of the decedent. Upon acceptance of the inheritance, the
possessor shall be deemed to have possessed the property
continuously and this rule will apply even if he was not in actual
possession of the property at the time of the death of the decedent
and prior to his acceptance. In other words, if the possession is
transmitted by hereditary title, the presumption of continuity of
possession is one which is conclusive and may not be overthrown
by proof to the contrary.
8. Rule on Movables
Article 556. The possession of movables is not deemed lost so
long as they remain under the control of the possessor, even though for
the time being he may not know their whereabouts.
Control means juridical control or right or the thing
remains in one's patrimony. Things are under our control when we
can get their physical or natural possession by diligent search.
H. LOSS OF POSSESSION
Article 555. A possessor may lose his possession:
(1) By the abandonment of the thing;
(2) By an assignment made to another either by onerous or
gratuitous title;
(3) By the destruction or total loss of the thing, or because it
goes out of commerce;
(4) By the possession of another, subject to the provisions of
Article 537, if the new possession has lasted longer than one year. But
the real right of possession is not lost till after the lapse of ten years.
1. Abandonment
He who has a right may renounce it. This act by which
thing is voluntary renounced constitutes an abandonment.
However, for a property to be considered abandoned under the law,
it is necessary that the spes recuperandi (hope of recovery or
recapture) is gone and the animus revertendi (intent to recover) is fi
nally given up. Certainly, the possessor of a thing cannot be held to
have abandoned the same until at least he has some knowledge of
the loss of its possession or of the loss of the thing. Hence, there is
no real intention to abandon a property when, as in the case of a
shipwreck or a fi re, things are thrown into the sea or on the
highway. To be effective, it is necessary that the abandonment be
made by a possessor in the concept of an owner.
The following are the requisites of abandonment:
a. The abandoner must have been a possessor in the
concept of owner (either an owner or mere
possessor may respectively abandon either
ownership or possession).
b. The abandoner must have the capacity to renounce
or to alienate (for abandonment is the repudiation of
a property right).
c. There must be a physical relinquishment of the thing
or object [Yu v. De Lara].
d. There must be no more spes recuperandi
(expectation to recover) and no more animus
revertendi (intent to return or get back). [U.S. v.
Rey].
What is the effect of temporary ignorance?
There is no abandonment of movables even if there is
temporary ignorance of the whereabouts of the thing, so long as the
thing remains under the control of the possessor, so long as no one
else has control over the thing.
What is the effect of tolerance?
There is no abandonment, if the owner merely tolerated
(permitted) another possession nor if the latter was done by stealth
or effected through force or intimidation.
2. Assignment
Whereas abandonment involves the giving up of
possession of a thing absolutely, without reference to any particular
person or purpose so that the same may now be appropriated by the
next comer or finder, assignment, on the other hand, involves
relinquishment of possession in favor of a definite or specified
transferee. It therefore involves the transfer of all the rights of the
possessor to another person. For assignment to be validly made, it
is necessary that the assignor be in the concept of owner and that
he has the capacity to alienate.
3. Destruction or loss of the thing
As a mode of losing possession, destruction or loss may
either be physical or juridical. Hence, it is understood that a thing is
lost when it perishes, or goes out of commerce, or disappears in
such a manner that its existence is unknown or cannot be
recovered. Since the term is also used in a juridical sense, a thing is
also considered lost when it is expropriated by the government.
4. Possession by another
Under this mode, distinction must be made between
possession as a fact (de facto) and possession as a right (de jure). If
the possession of another lasts for more than one year, only
possession de facto is lost but not the real right of possession
(possession de jure). Possession de jure, on the other hand, is not
lost until after the lapse of ten (10) years.
Based on the foregoing, the material element that
determines the proper action to be filed for the recovery of the
possession of a real property is the length of time of dispossession.
Page 65 of 121
Under the Rules of Court, the remedies of forcible entry and
unlawful detainer are granted to a person deprived of the
possession of any land or building by force, intimidation, threat,
strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold
possession by virtue of any contract, express or implied, or the
legal representatives or assigns of any such lessor, vendor, vendee,
or other person. These remedies afford the person deprived of the
possession to file at any time within one year after such unlawful
deprivation or withholding of possession, an action in the proper
Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession,
together with damages and costs. The basis of that one year period
of prescription under the Rules of Court is the fourth paragraph of
Article 555 of the New Civil Code which states that possession de
facto is lost through another’s possession for a period longer than
one year. Thus, if the dispossession has not lasted for more than
one year, an ejectment proceeding is proper and the inferior court
has jurisdiction. On the other hand, if the dispossession lasted for
more than one year, the proper action to be fi led is an accion
publiciana since the real right of possession (possession de jure) is
not lost until after the lapse of ten (10) years. In other words, the
right acquired by the person who has been in possession for one
year and one day is only the right that the former possessor lost by
allowing the year and one day to expire — that is the right to
maintain an interdictory action (accion interdictal). The present
possessor, as a consequence, can not be made to answer in an
interdictory action. But he can still be made to answer in a plenary
action for the recovery of the real right of possession which can be
brought within a period of ten (10) years.
Legal possession is not affected by acts which are merely
tolerated and those executed clandestinely and without the
knowledge of the possessor or through violence as long as there is
a possessor who objects thereto. In the aforesaid circumstances,
only possession as a fact (possession de facto) is affected but not
the real right of possession. As a consequence, the real right of
possession may not be lost through any of said means.
In paragraph 4 of Article 555, what is lost after the lapse
of ten (10) years is possession de jure, not necessarily the
ownership of the property. Ownership and possession are distinct
concepts. For ownership to be lost through possession by another,
it must be in the concept of an owner, public, peaceful and
uninterrupted. If the possession is in this nature, the same shall
ripen into ownership over a real property after the lapse of ten
years if coupled with a just title or good faith on the part of the
possessor. If the possession of this nature last for thirty (30) years,
ownership over a real property is also acquired without need of just
title or of good faith.
Sps. Supapo v. Sps. De Jesus
Held: The respondents point out that the Spouses Supapo filed
the complaint for accion publiciana on March 7, 2008 or more than ten (10)
years after the certificate to file action was issued on November 25, 1992.
The respondents contend that the Spouses Supapo may no longer recover
possession of the subject property, the complaint having been filed beyond
the period provided by law.
Further, while the respondents concede that the Spouses Supapo
hold a TCT over the subject property, and assuming a Torrens title is
imprescriptible and indefeasible, they posit that the latter have lost their
right to recover possession because of laches.
 On their part, the Spouses Supapo admit that they filed the
complaint for accion publiciana more than ten (10) years after the
certificate to file action was issued. Nonetheless, they argue that their cause
of action is imprescriptible since the subject property is registered and titled
under the Torrens system.
We rule that the Spouses Supapo's position is legally correct.
At the core of this controversy is a parcel of land registered
under the Torrens system. The Spouses Supapo acquired the TCT on the
subject lot in 1979.[46] Interestingly, the respondents do not challenge the
existence, authenticity and genuineness of the Supapo's TCT.
In defense, the respondents rest their entire case on the fact that
they have allegedly been in actual, public, peaceful and uninterrupted
possession of the subject property in the concept of an owner since 1992.
The respondents contend that they built their houses on the subject lot in
good faith. Having possessed the subject lot for more than ten (10) years,
they claim that they can no longer be disturbed in their possession.
Under the undisputed facts of this case, we find that the
respondents' contentions have no legal basis.
In a long line of cases, we have consistently ruled that lands
covered by a title cannot be acquired by prescription or adverse
possession. We have also held that a claim of acquisitive prescription is
baseless when the land involved is a registered land because of Article
1126 of the Civil Code in relation to Act 496 [now, Section 47 of
Presidential Decree (PD) No. 1529.
The Spouses Supapo (as holders of the TCT) enjoy a panoply of
benefits under the Torrens system. The most essential insofar as the present
case is concerned is Section 47 of PD No. 1529 which states:
Section 47. Registered land not subject to prescriptions. No title
to registered land in derogation of the title of the registered owner shall be
acquired by prescription or adverse possession.
In addition to the imprescriptibility, the person who holds a
Torrens Title over a land is also entitled to the possession thereof. The right
to possess and occupy the land is an attribute and a logical consequence of
ownership. Corollary to this rule is the right of the holder of the Torrens
Title to eject any person illegally occupying their property. Again, this right
is imprescriptible.
In Bishop v. CA, we held that even if it be supposed that the
holders of the Torrens Title were aware of the other persons' occupation of
the property, regardless of the length of that possession, the lawful
owners have a right to demand the return of their property at any time as
long as the possession was unauthorized or merely tolerated, if at all.
Even if the defendant attacks the Torrens Title because of a
purported sale or transfer of the property, we still rule in favor of the holder
of the Torrens Title if the defendant cannot adduce, in addition to the deed
of sale, a duly-registered certificate of title proving the alleged transfer or
sale.
A case in point is Umpoc v. Mercado in which we gave greater
probative weight to the plaintiffs TCT vis-a-vis the contested unregistered
deed of sale of the defendants. Unlike the defendants in Umpoc, however,
the respondents did not adduce a single evidence to refute the Spouses
Supapo's TCT. With more reason therefore that we uphold the
indefeasibility and imprescriptibility of the Spouses Supapo's title.
By respecting the imprescriptibility and indefeasibility of the
Spouses Supapo's TCT, this Court merely recognizes the value of the
Torrens System in ensuring the stability of real estate transactions and
integrity of land registration.
I. RULE ON IRREVINDICABILITY
Article 559. The possession of movable property acquired in
good faith is equivalent to a title. Nevertheless, one who has lost any
movable or has been unlawfully deprived thereof, may recover it from
the person in possession of the same.
If the possessor of a movable lost or of which the owner has
been unlawfully deprived, has acquired it in good faith at a public sale,
the owner cannot obtain its return without reimbursing the price paid
therefor.
1. Possession in Good Faith Equivalent to Title
Page 66 of 121
Possession of movables acquired in good faith does not
only create a presumption of ownership but it is already equivalent
to title. Unlike in the case of immovable property where actual
possession under claim of ownership will only create a disputable
presumption of ownership and that the possessor has a just title, the
possession of movable property acquired in good faith is already
equivalent to a title, thus dispensing with further proof [EDCA
Publishig v. Santos].
A thing is acquired in good faith if the possessor is of the
“belief that the person from whom he received the thing was its
owner and could transfer valid title thereto (1127).’’
There are three (3) requisites to make possession of
movable property equivalent to title, namely: (a) the possession
should be in good faith; (b) the owner voluntarily parted with the
possession of the thing; and (c) the possession is in the concept of
owner [Ledesma v. Court of Appeals].
Under this situation, if the real owner gets the thing, he
must reimburse. The meaning of the term “unlawful deprivation” in
Article 559 may not be unduly stretched to cover situations where
there is a contract of purchase and sale between two persons and
the buyer therein fails to pay the purchase price but nonetheless
alienates the thing sold in favor of the present possessor who acted
in good faith [EDCA Publishing v. Santos]. As a rule, the buyer in
a contact of sale acquires ownership of the thing sold upon actual
or constructive delivery even if the purchase price has not yet been
paid. Since ownership is already transferred to the buyer, he can
validly transfer the thing sold to another person. In this case, the
original seller cannot be said to have been “unlawfully deprived” of
the thing sold. Hence, Article 559 does not apply. The remedy of
the unpaid seller, in this situation, is an ordinary action for
collection of sum of money against the buyer, with recovery of
damages.
In Tagatac v. Jimenez, the plaintiff sold her car to Feist,
who sold it to Sanchez, who sold it to Jimenez. When the payment
check issued to Tagatac by Feist was dishonored, the plaintiff sued
to recover the vehicle from Jimenez on the ground that she had
been unlawfully deprived of it by reason of Feist's deception. In
ruling for Jimenez, the Court of Appeals held:
The point of inquiry is whether plaintiff-appellant
Trinidad C. Tagatac has been unlawfully deprived of her car. At
first blush, it would seem that she was unlawfully deprived
thereof, considering that she was induced to part with it by
reason of the chicanery practiced on her by Warner L. Feist.
Certainly, swindling, like robbery, is an illegal method of
deprivation of property. In a manner of speaking, plaintiff-
appellant was "illegally deprived" of her car, for the way by
which Warner L. Feist induced her to part with it is illegal and is
punished by law. But does this "unlawful deprivation" come
within the scope of Article 559 of the New Civil Code?
x x x           x x x          x x x
. . . The fraud and deceit practiced by Warner L. Feist
earmarks this sale as a voidable contract (Article 1390 N.C.C.).
Being a voidable contract, it is susceptible of either ratification
or annulment. If the contract is ratified, the action to annul it is
extinguished (Article 1392, N.C.C.) and the contract is cleansed
from all its defects (Article 1396, N.C.C.); if the contract is
annulled, the contracting parties are restored to their respective
situations before the contract and mutual restitution follows as a
consequence (Article 1398, N.C.C.).
However, as long as no action is taken by the party
entitled, either that of annulment or of ratification, the contract
of sale remains valid and binding. When plaintiff-appellant
Trinidad C. Tagatac delivered the car to Feist by virtue of said
voidable contract of sale, the title to the car passed to Feist. Of
 course, the title that Feist acquired was defective and voidable.
Nevertheless, at the time he sold the car to Felix Sanchez, his
title thereto had not been avoided and he therefore conferred a
good title on the latter, provided he bought the car in good faith,
for value and without notice of the defect in Feist's title (Article
1506, N.C.C.). There being no proof on record that Felix
Sanchez acted in bad faith, it is safe to assume that he acted in
good faith.
EDCA Publishing v. Santos
Held; The above rulings are sound doctrine and reflect our own
interpretation of Article 559 as applied to the case before us.
Actual delivery of the books having been made, Cruz acquired
ownership over the books which he could then validly transfer to the
private respondents. The fact that he had not yet paid for them to EDCA
was a matter between him and EDCA and did not impair the title acquired
by the private respondents to the books.
One may well imagine the adverse consequences if the phrase
"unlawfully deprived" were to be interpreted in the manner suggested by
the petitioner. A person relying on the seller's title who buys a movable
property from him would have to surrender it to another person claiming to
be the original owner who had not yet been paid the purchase price therefor.
The buyer in the second sale would be left holding the bag, so to speak, and
would be compelled to return the thing bought by him in good faith without
even the right to reimbursement of the amount he had paid for it.
It bears repeating that in the case before us, Leonor Santos took
care to ascertain first that the books belonged to Cruz before she agreed to
purchase them. The EDCA invoice Cruz showed her assured her that the
books had been paid for on delivery. By contrast, EDCA was less than
cautious — in fact, too trusting in dealing with the impostor. Although it
had never transacted with him before, it readily delivered the books he had
ordered (by telephone) and as readily accepted his personal check in
payment. It did not verify his identity although it was easy enough to do
this. It did not wait to clear the check of this unknown drawer. Worse, it
indicated in the sales invoice issued to him, by the printed terms thereon,
that the books had been paid for on delivery, thereby vesting ownership in
the buyer.
Surely, the private respondent did not have to go beyond that
invoice to satisfy herself that the books being offered for sale by Cruz
belonged to him; yet she did. Although the title of Cruz was presumed
under Article 559 by his mere possession of the books, these being movable
property, Leonor Santos nevertheless demanded more proof before deciding
to buy them.
It would certainly be unfair now to make the private respondents
bear the prejudice sustained by EDCA as a result of its own negligence. We
cannot see the justice in transferring EDCA's loss to the Santoses who had
acted in good faith, and with proper care, when they bought the books from
Cruz.
2. In Case of Loss
The said article establishes two exceptions to the general
rule of irrevindicability, to wit, when the owner (1) has lost the
thing, or (2) has been unlawfully deprived thereof. In these cases,
the possessor cannot retain the thing as against the owner, who may
recover it without paying any indemnity, except when the
possessor acquired it in a public sale [Del Rosario v. Lucena].  law which prohibits their use or trade outside of the casino which issues
It is quite clear that a party who (a) has lost any movable
or (b) has been unlawfully deprived thereof can recover the same
from the present possessor even if the latter acquired it in
good faith and has, therefore, title thereto for under the first
sentence of Article 559, such manner of acquisition is equivalent to
a title. Undoubtedly, one who has lost a movable or who has been
unlawfully deprived of it cannot be said to have voluntarily parted
with the possession thereof [Ledesma v. Court of Appeals].  more reason that this Court should require petitioner to prove convincingly
Pursuant to Article 719 of the New Civil Code, if a
movable has been lost (not abandoned), the finder does not
immediately become its owner because there are rules which are
Page 67 of 121
required to be followed. If the finder knows the previous possessor,
the movable must be returned to the latter. If the previous possessor
is unknown, the finder is required to immediately deposit the
movable with the mayor of the city or municipality where the
finding has taken place. The mayor is then required to make a
public announcement of such finding for two consecutive weeks in
a manner he deems fit. If after six months, the owner does not
appear, the thing found, or its value, shall be awarded to the finder.
But if the owner appears on time, he shall be obliged to pay, as a
reward to the finder, one-tenth of the sum or of the price of the
thing found.
If the finder does not comply with these procedural
requirements and appropriate for himself the movable he found, he
shall be guilty of the crime of theft, in which case, the owner shall
the right to recover the lost movable from him without need of
paying any indemnity. The same rule shall apply even if the
movable is already in the possession of third persons who may
have acquired it in good faith from such finder or thief [Aznar v.
Yapdiangco].
Subic Bay Legend Resorts v. Fernandez
Held: Moreover, if petitioner should stick to its theory that
Cabrera stole the subject casino chips, then its failure to file a criminal case
against the latter – including Ludwin and Deoven for that matter – up to
this point certainly does not help to convince the Court of its position,
especially considering that the supposed stolen chips represent a fairly large
amount of money.  Indeed, for purposes of this proceeding, there appears to
be no evidence on record – other than mere allegations and suppositions –
that Cabrera stole the casino chips in question; such conclusion came
unilaterally from petitioner, and for it to use the same as foundation to the
claim that Ludwin, Deoven and respondent are dealing in stolen chips is
clearly irregular and unfair.
Thus, there should be no basis to suppose that the casino chips
found in Ludwin’s and Deoven’s possession were stolen; petitioner acted
arbitrarily in confiscating the same without basis.  Their Joint Affidavit –
which was later recanted – does not even bear such fact; it merely states
that the chips came from Cabrera.  If it cannot be proved, in the first place,
that Cabrera stole these chips, then there is no more reason to suppose that
Ludwin and Deoven were dealing in or possessed stolen goods; unless the
independent fact that Cabrera stole the chips can be proved, it cannot be
said that they must be confiscated when found to be in Ludwin’s and
Deoven’s possession.
It is not even necessary to resolve whether Ludwin’s and
Deoven’s Joint Affidavit was obtained by duress or otherwise; the
document is irrelevant to petitioner’s cause, as it does not suggest at all that
Cabrera stole the subject casino chips.  At most, it only shows that Cabrera
gave Ludwin and Deoven casino chips, if this fact is true at all – since such
statement has since been recanted.
The fact that Ludwin and Deoven appear to be indecisive as to
who gave them the casino chips does not help petitioner at all.  It cannot
lead to the conclusion that Cabrera stole the chips and then gave them to the
two; as earlier stated, petitioner had to prove this fact apart from Ludwin’s
and Deoven’s claims, no matter how incredible they may seem.
Though casino chips do not constitute legal tender,[24] there is no
them.  In any case, it is not unusual – nor is it unlikely – that respondent
could be paid by his Chinese client at the former’s car shop with the casino
chips in question; said transaction, if not common, is nonetheless not
unlawful.  These chips are paid for anyway; petitioner would not have
parted with the same if their corresponding representative equivalent – in
legal tender, goodwill, or otherwise – was not received by it in return or
exchange.  Given this premise – that casino chips are considered to have
been exchanged with their corresponding representative value – it is with
and persuasively that the chips it confiscated from Ludwin and Deoven
were indeed stolen from it; if so, any Tom, Dick or Harry in possession of
genuine casino chips is presumed to have paid for their representative value
in exchange therefor.  If petitioner cannot prove its loss, then Article 559
cannot apply; the presumption that the chips were exchanged for value
remains.
3. In Case of Unlawful Deprivation
The phrase “unlawfully deprived” in Article 559 is
susceptible of two meanings. It may be interpreted in a restrictive
sense as referring only to cases of theft or robbery. This is the view
followed by the French Code and adopted by Castan. Manresa, on
the other hand, is of the view that the phrase comprehends all acts
which constitute a crime or an offense and which take away from
the owner what belongs to him; all acts of occupation against the
will of the possessor and all acts of disposition of the thing made
by a person who is not the owner or accomplished by his authority.
In our jurisprudence, it appears that the latter view of Manresa is
the one being followed. Hence, the phrase “unlawfully withheld” in
Article 559 is not limited to cases of unlawful taking but extends to
cases where there has been abuse of confidence.
Example: If A entrusts money to B who later gives the
same to C, an innocent recipient for value, A, cannot recover the
money (or negotiable document) from C since money ordinarily
does not bear the earmarks of particular ownership. BUT if instead
of money, the object had been an identifi able one, then recovery
can be had for C had acquired same from someone (B) who had no
authority to dispose of the same. And such recovery does not need
reimbursement. C should require the indemnity from B and not A
[U.S. v. Sotelo].
Aznar v. Yapdiangco
Held: The plaintiff-appellant accepts that the car in question
originally belonged to and was owned by the intervenor-appellee, Teodoro
Santos, and that the latter was unlawfully deprived of the same by Vicente
Marella. However, the appellant contends that upon the facts of this case,
the applicable provision of the Civil Code is Article 1506 and not Article
559 as was held by the decision under review. Article 1506 provides:
ART. 1506. Where the seller of goods has a voidable title
thereto, but his, title has not been voided at the time of the sale, the buyer
acquires a good title to the goods, provided he buys them in good faith, for
value, and without notice of the seller's defect of title.
The contention is clearly unmeritorious. Under the aforequoted
provision, it is essential that the seller should have a voidable title at least.
It is very clearly inapplicable where, as in this case, the seller had no title at
all.
Vicente Marella did not have any title to the property under
litigation because the same was never delivered to him. He sought
ownership or acquisition of it by virtue of the contract. Vicente Marella
could have acquired ownership or title to the subject matter thereof only by
the delivery or tradition of the car to him.
Under Article 712 of the Civil Code, "ownership and other real
rights over property are acquired and transmitted by law, by donation, by
testate and intestate succession, and in consequence of certain contracts, by
tradition." As interpreted by this Court in a host of cases, by this provision,
ownership is not transferred by contract merely but by tradition or delivery.
Contracts only constitute titles or rights to the transfer or acquisition of
ownership, while delivery or tradition is the mode of accomplishing the
same (Gonzales v. Rojas, 16 Phil. 51; Ocejo, Perez and Co. v. International
Bank, 37 Phil. 631, Fidelity and Deposit Co. v. Wilson, 8 Phil. 51; Kuenzle
& Streiff v. Wacke & Chandler, 14 Phil. 610; Easton v. Diaz Co., 32 Phil.
180).
For the legal acquisition and transfer of ownership and other
property rights, the thing transferred must be delivered, inasmuch as,
according to settled jurisprudence, the tradition of the thing is a necessary
and indispensable requisite in the acquisition of said ownership by virtue of
contract. (Walter Laston v. E. Diaz & Co. & the Provincial Sheriff of
Albay, supra.)
Page 68 of 121
So long as property is not delivered, the ownership over it is not
transferred by contract merely but by delivery. Contracts only constitute
titles or rights to the transfer or acquisition of ownership, while delivery or
tradition is the method of accomplishing the same, the title and the method
of acquiring it being different in our law. (Gonzales v. Roxas, 16 Phil. 51)
In the case on hand, the car in question was never delivered to
the vendee by the vendor as to complete or consummate the transfer of
ownership by virtue of the contract. It should be recalled that while there
was indeed a contract of sale between Vicente Marella and Teodoro Santos,
the former, as vendee, took possession of the subject matter thereof by
stealing the same while it was in the custody of the latter's son.
There is no adequate evidence on record as to whether Irineo
Santos voluntarily delivered the key to the car to the unidentified person
who went with him and L. De Dios to the place on Azcarraga where a sister
of Marella allegedly lived. But even if Irineo Santos did, it was not the
delivery contemplated by Article 712 of the Civil Code. For then, it would
be indisputable that he turned it over to the unidentified companion only so
that he may drive Irineo Santos and De Dios to the said place on Azcarraga
and not to vest the title to the said vehicle to him as agent of Vicente
Marella. Article 712 above contemplates that the act be coupled with the
intent of delivering the thing. (10 Manresa 132)
The lower court was correct in applying Article 559 of the Civil
Code to the case at bar, for under it, the rule is to the effect that if the owner
has lost a thing, or if he has been unlawfully deprived of it, he has a right to
recover it, not only from the finder, thief or robber, but also from third
persons who may have acquired it in good faith from such finder, thief or
robber. The said article establishes two exceptions to the general rule of
irrevindicability, to wit, when the owner (1) has lost the thing, or (2) has
been unlawfully deprived thereof. In these cases, the possessor cannot
retain the thing as against the owner, who may recover it without paying
any indemnity, except when the possessor acquired it in a public sale.
Under Article 559 of the new Civil Code, a person illegally
deprived of any movable may recover it from the person in possession of
the same and the only defense the latter may have is if he has acquired it in
good faith at a public sale, in which case, the owner cannot obtain its return
without reimbursing the price paid therefor. In the present case, plaintiff has
been illegally deprived of his car through the ingenious scheme of
defendant B to enable the latter to dispose of it as if he were the owner
thereof. Plaintiff, therefore, can still recover possession of the car even if it
is in the possession of a third party who had acquired it in good faith from
defendant B. The maxim that "no man can transfer to another a better title
than he had himself" obtains in the civil as well as in the common law.
Finally, the plaintiff-appellant here contends that inasmuch as it
was the intervenor-appellee who had caused the fraud to be perpetrated by
his misplaced confidence on Vicente Marella, he, the intervenor-appellee,
should be made to suffer the consequences arising therefrom, following the
equitable principle to that effect. Suffice it to say in this regard that the right
of the owner to recover personal property acquired in good faith by another,
is based on his being dispossessed without his consent. The common law
principle that where one of two innocent persons must suffer by a fraud
perpetrated by another, the law imposes the loss upon the party who, by his
misplaced confidence, has enabled the fraud to be committed, cannot be
applied in a case which is covered by an express provision of the new Civil
Code, specifically Article 559. Between a common law principle and a
statutory provision, the latter must prevail in this jurisdiction.
Arenas v. Raymundo
Held: A can get the jewels without giving to the pawnshop the
money borrowed by B because in the first place, the pledge was not valid
(not having been done by the owner or his duly authorized agent); in the
second place, there is no contractual relation between A and the pawnshop;
in the third place, A had been illegally deprived of the jewels; and finally it
would be unjust and unfair to the owner (A) considering the fact that
ordinarily, most pawnshops do not require their customers to first prove
their ownership of the objects being pledged.
Ledesma v. Court of Appeals
 Held: The basic issue then in this case is whether private
respondent was unlawfully deprived of the cars when it sold the same to
Rustico Consunji, through a person who claimed to be Jojo Consunji,
allegedly the latter's son, but who nevertheless turned out to be Armando
Suarez, on the faith of a Manager's Check with a face value of P101,000.00,
dishonored for being altered, the correct amount being only P101.00.
Under this factual milieu, the respondent Court was of the
opinion, and thus held, that private respondent was unlawfully deprived of
the car by false pretenses.
We disagree. There was a perfected unconditional contract of
sale between private respondent and the original vendee. The former
voluntarily caused the transfer of the certificate of registration of the
vehicle in the name of the first vendee -- even if the said vendee was
represented by someone who used a fictitious name -- and likewise
voluntarily delivered the cars and the certificate of registration to the
vendee’s alleged representative. Title thereto was forthwith transferred to
the vendee. The subsequent dishonor of the check because of the alteration
merely amounted to a failure of consideration which does not render the
contract of sale void, but merely allows the prejudiced party to sue for
specific performance or rescission of the contract, and to prosecute the
impostor for estafa under Article 315 of the Revised Penal Code. This is the
rule enunciated in EDCA Publishing and Distributing Corp. vs. Santos, the
facts of which do not materially and substantially differ from those
obtaining in the instant case. We rejected said claim in this wise:
"The contract of sale is consensual and is perfected once
agreement is reached between the parties on the subject matter and the
consideration. According to the Civil Code:
ART. 1475. The contract of sale is perfected at the moment
there is a meeting of minds upon the thing which is the object of the
contract and upon the price.
From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the form of
contracts.
x         x           x
ART. 1477. The ownership of the thing sold shall be transferred
to the vendee upon the actual or constructive delivery thereof.
ART. 1478. The parties may stipulate that ownership in the
thing shall not pass to the purchaser until he has fully paid the price.
It is clear from the above provisions, particularly the last one
quoted, that ownership in the thing sold shall not pass to the buyer until full
payment of the purchase price only if there is a stipulation to that effect.
Otherwise, the rule is that such ownership shall pass from the vendor to the
vendee upon the actual or constructive delivery of the thing sold even if the
purchase price has not yet been paid.
Non-payment only creates a right to demand payment or to
rescind the contract, or to criminal prosecution in the case of bouncing
checks. But absent the stipulation above noted, delivery of the thing
sold will effectively transfer ownership to the buyer who can in turn
transfer it to another."
In the early case of Chua Hai vs. Hon. Kapunan, one Roberto
Soto purchased from the Youngstown Hardware, owned by private
respondent, corrugated galvanized iron sheets and round iron bars for
P6,137.70; in payment thereof, he issued a check drawn against the
Security Bank and Trust Co. without informing Ong Shu that he (Soto) had
no sufficient funds in said bank to answer for the same. In the meantime,
however, Soto sold the sheets to, among others, petitioner Chua Hai. In the
criminal case filed against Soto, upon motion of the offended party, the
respondent Judge ordered petitioner to return the sheets which were
purchased from Soto. Petitioner's motion for reconsideration having been
denied, he came to this Court alleging grave abuse of discretion and excess
of jurisdiction. In answer to the petition, it is claimed that inter alia, even if
the property was acquired in good faith, the owner who has been unlawfully
deprived thereof may recover it from the person in possession of the same
unless the property was acquired in good faith at a public sale. Resolving
this specific issue, this Court ruled that Ong Shu was not illegally deprived
of the possession of the property:
"x x x It is not denied that Ong Shu delivered the sheets to Soto
upon a perfected contract of sale, and such delivery transferred title or
ownership to the purchaser. Says Art. 1496:
Page 69 of 121
‘Art. 1496. The ownership of the thing sold is acquired by the
vendee from the moment it is delivered to him in any of the ways specified
in articles 1497 to 1501, or in any other manner signifying an agreement
that the possession is transferred from the vendor to the vendee.’ (C.C.)
The failure of the buyer to make good the price does not, in law,
cause the ownership to revest in the seller until and unless the bilateral
contract of sale is first rescinded or resolved pursuant to Article 1191 of the
new Civil Code.
And, assuming that the consent of Ong Shu to the sale in favor
of Soto was obtained by the latter through fraud or deceit, the contract was
not thereby rendered void ab initio, but only voidable by reason of the
fraud, and Article 1390 expressly provides that:
‘ART. 1390. The following contracts are voidable or annullable,
even though there may have been no damage to the contracting parties:
(1) Those where one of the parties is incapable of giving consent
to a contract;
(2) Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a proper
action in court. They are susceptible of ratification.’
Agreeably to this provision, Article 1506 prescribes:
‘ARTICLE 1506. Where the seller of goods has a voidable title
thereto, but his title has not been avoided at the time of the sale, the buyer
acquires a good title to the goods, provided he buys them in good faith, for
value, and without notice of the seller's defect of title.' (C.C.)
Hence, until the contract of Ong Shu with Soto is set aside by a
competent court assuming that the fraud is established to its satisfaction),
the validity of appellant's claim to the property in question can not be
disputed, and his right to the possession thereof should be respected."
It was therefore erroneous for the respondent Court to declare
that the private respondent was illegally deprived of the car simply because
the check in payment therefor was subsequently dishonored; said Court also
erred when it divested the petitioner, a buyer in good faith who paid
valuable consideration therefor, of his possession thereof.
Varela v. Finnick
Held: In the present case not only has the ownership and the
origin of the jewels misappropriated been unquestionably proven but also
that the accused, acting fraudulently and in bad faith, disposed of them and
pledged them contrary to agreement,  with  no right of ownership, and to
the prejudice of the injured party,  who was thereby illegally deprived of
said jewels; therefore, in accordance with  the provisions of article 464, the
owner has an absolute right to recover the jewels from the possession of
whosoever holds  them, in accordance with the judgment entered in the
aforesaid cause for estafa, wherein, the accused having been found guilty,
the right of Josef a Varela to recover the jewels in question is expressly
acknowledged.
Francisco v. CBCI
Held: Moreover, the owner of the goods who has been
unlawfully deprived of it may recover it even from a purchaser in good
faith. Thus, the purchaser of property which has been stolen from the owner
has been held to acquire no title to it even though he purchased for value
and in good faith.
In this case, it is clear that Bacsa was not the owner of the diesel
fuel. Francisco was aware of this but he claimed that Bacsa was authorized
by CBCI to sell the diesel fuel. However, Francisco’s claim that Bacsa was
authorized is not supported by any evidence except his self-serving
testimony. Francisco did not even confirm with CBCI if it was indeed
selling its diesel fuel since it is not one of the oil companies known in the
market to be selling petroleum products. This fact alone should have put
Francisco on guard.
It does not appear that CBCI, by some direct and equivocal act,
has clothed Bacsa with the indicia of ownership or apparent authority to sell
CBCI’s diesel fuel. Francisco did not state if the identification card
presented by Bacsa indicated that he was CBCI’s agent or a mere
employee. Consequently, CBCI is not precluded by its conduct from
denying Bacsa’s authority to sell. CBCI did not hold out Bacsa or allow
Bacsa to appear as the owner or one with apparent authority to dispose of
the diesel fuel.
Clearly, Bacsa cannot transfer title to Francisco as Bacsa was
not the owner of the diesel fuel nor was he authorized by CBCI to sell its
diesel fuel. CBCI did not commit any act to clothe Bacsa with apparent
authority to sell the diesel fuel that would have misled Francisco. Francisco,
therefore, did not acquire any title over the diesel fuel. Since CBCI was
unlawfully deprived of its property, it may recover from Francisco, even if
Francisco pleads good faith.
4. Effect on Possession After Recovery
Article 561. One who recovers, according to law, possession
unjustly lost, shall be deemed for all purposes which may redound to
his benefit, to have enjoyed it without interruption. (466)
SUMMARY
Owner MAY RECOVER WITHOUT
REIMBURSEMENT:
a. from possessor in bad faith.
b. from possessor in good faith (if owner had LOST
the property or been unlawfully deprived of it) (the
acquisition being from a private person). (Art. 559).
Owner MAY RECOVER but should REIMBURSE:
a. if possessor acquired the object in good faith at a
PUBLIC SALE or AUCTION. (Art. 559). [Because
the publicity attendant to a public sale should have
been suffi cient warning for the owner to come
forward and claim the property. (Manresa).].
Owner CANNOT RECOVER, even if he offers to
REIMBURSE (whether or not the owner had lost or been
unlawfully deprived):
a. if possessor had acquired it in good faith by
purchase from a merchant’s store, or in fairs, or
markets in accordance with the Code of Commerce
and special laws. (Art. 1505, Civil Code, see also
Arts. 85, 86, Code of Commerce).
b. if owner “is by his conduct precluded from denying
the seller’s authority to sell.” (ESTOPPEL). (Art.
1505).
c. if possessor had obtained the goods because he was
an innocent purchaser for value and holder of a
NEGOTIABLE document of title to the goods. (See
Art. 1518)
d. Finders of lost article after lapse of six (6) months;
Article 719
e. Acquisitive prescription
VII
USUFRUCT
A. USUFRUCT IN GENERAL
1. Definition
Page 70 of 121
Article 562. Usufruct gives a right to enjoy the property of
another with the obligation of preserving its form and substance, unless
the title constituting it or the law otherwise provides.
Usufruct, in essence, is nothing else but simply allowing
one to enjoy another's property. [9] It is also defined as the right to
enjoy the property of another temporarily, including both the jus
utendi and the jus fruendi, with the owner retaining the jus
disponendi or the power to alienate the same [Moralidad v.
Pernes].
Ownership really consists of three fundamental rights:
(a) jus disponendi (right to dispose)
(b) jus utendi (right to use)
(c) jus fruendi (right to the fruits)
NOTE: The combination of the latter two (jus utendi and
fruendi) is called USUFRUCT (from the term “usufructus”). The
remaining right (jus disponendi) is really the essence of what is
termed “naked ownership.”
The formulae are:
(a) Full ownership equals Naked ownership plus
Usufruct.
(b) Naked ownership equals Full ownership minus
Usufruct.
(c) Usufruct equals Full ownership minus Naked
ownership.
May usufruct be constituted over a real property in
favor of an alien?
YES. In Ramirez v. Vda De Ramirez, it was held that a
usufruct over parcels of land made by a Filipino in favor of an
Austrian woman is valid because ownership of the land is not
vested in the usufructuary. What is proscribed by the Constitution
is ownership by an alien.
2. Constitution of Usufruct
Article 563. Usufruct is constituted by law, by the will of
private persons expressed in acts inter vivos or in a last will and
testament, and by prescription.
Article 564. Usufruct may be constituted on the whole or a
part of the fruits of the thing, in favor of one or more persons,
simultaneously or successively, and in every case from or to a certain
day, purely or conditionally. It may also be constituted on a right,
provided it is not strictly personal or intransmissible. (469)
B. RIGHTS OF THE USUFRUCTUARY
Article 565. The rights and obligations of the usufructuary
shall be those provided in the title constituting the usufruct; in default
of such title, or in case it is deficient, the provisions contained in the
two following Chapters shall be observed. (470)
1. Right to Fruits
Article 566. The usufructuary shall be entitled to all the
natural, industrial and civil fruits of the property in usufruct. With
respect to hidden treasure which may be found on the land or
tenement, he shall be considered a stranger.
Article 569. Civil fruits are deemed to accrue daily, and
belong to the usufructuary in proportion to the time the usufruct may
last.
The usufructuary is entitled to the natural, industrial, and
civil fruits that will accrue during the existence of the usufruct.
What about dividends of corporations?
A dividend (whether in the form of cash or stock) is
income or civil fruits and should belong to the usufructuary and not
to the remainderman (naked owner). This is because dividends are
declared out of corporate profits, not corporate capital (the
“corpus”). Dividends declared out of the capital are seriously
prohibited by the law. Incidentally, stock dividends may be sold
independently of the original shares just as the offspring of an
animal may be alienated independently of the parent animal
[Bachrach v. Seifert].
Share of Usufructuary Re Hidden Treasure
The usufructuary, not being the landowner, is not entitled
as owner, but is entitled as fi nder (to one-half of the treasure, as a
rule, unless there is a contrary agreement) if he really is the finder.
If somebody else is the finder, the usufructuary gets nothing.
Are usufructuary rights exempt from execution?
In Bogacki v. Insierto, the Supreme Court held that
usufructuary right can be disposed by the usufructuary, thus, he can
transfer, assign, or alienate such rights. In the same vein, these
rights may be subjected to a writ of execution, not being exempt
therefrom.
a. Pending Natural or Industrial Fruits
Article 567. Natural or industrial fruits growing at the time
the usufruct begins, belong to the usufructuary.
Those growing at the time the usufruct terminates, belong to
the owner.
In the preceding cases, the usufructuary, at the beginning of
the usufruct, has no obligation to refund to the owner any expenses
incurred; but the owner shall be obliged to reimburse at the
termination of the usufruct, from the proceeds of the growing fruits,
the ordinary expenses of cultivation, for seed, and other similar
expenses incurred by the usufructuary.
The provisions of this article shall not prejudice the rights of
third persons, acquired either at the beginning or at the termination of
the usufruct.
This Article refers to PENDING NATURAL OR
INDUSTRIAL fruits (there can be no pending civil fruits or rents,
for they accrue daily).
Fruits pending at the BEGINNING of usufruct:
(i) belong to the usufructuary;
(ii) no necessity of refunding owner for expenses
incurred, (for the owner gave the usufruct
evidently without any thought of being
reimbursed for the pending fruits, or because
the value of said fruits must already have been
taken into consideration in fixing the terms and
Page 71 of 121
conditions of the usufruct, if for instance, the
usufruct came about because of a contract);
(iii) BUT without prejudice to the right of third
persons. (Thus, if the fruits had been planted by
a possessor in good faith, the pending crop
expenses and charges shall be pro-rated
between said possessor and the usufructuary).
(See Art. 545).
Fruits pending at the TERMINATION of usufruct:
(i) Belong to the OWNER;
(ii) BUT the owner must reimburse the
usufructuary for ordinary cultivation expenses
and for the seeds and similar expenses, from
the proceeds of the fruits. (Hence, the excess of
expenses over the proceeds need not be
reimbursed.)
(iii) Also, rights of innocent third parties should not
be prejudiced.
b. Rent
Article 568. If the usufructuary has leased the lands or
tenements given in usufruct, and the usufruct should expire before the
termination of the lease, he or his heirs and successors shall receive
only the proportionate share of the rent that must be paid by the
lessees.
As a rule, the lease executed by the usufructuary should
terminate at the end of the usufruct or earlier (Art. 572), except in
the case of leases of rural lands, because in said case, if the
usufruct ends earlier than the lease, the lease continues for the
remainder of the agricultural year. (Ibid.)
Example: In 2002, A gave his land in usufruct to B for 4
years. B leased the land in favor of C for 8 years. Ordinarily, the
lease should end in 2006, because at that time, the usufruct ends.
BUT if the naked owner so desires, he may allow the lease to
continue for 4 more years. The rent of the fi rst four years belongs
to the usufructuary; that for the remaining four belongs to the
naked owner. (Art. 568). (See 4 Manresa 396-397). Whether the
rents consist of money or goods is immaterial, the important thing
is that the rents constitute civil fruits. (See 4 Manresa 396-397).
c. Civil Fruits
Article 570. Whenever a usufruct is constituted on the right
to receive a rent or periodical pension, whether in money or in fruits,
or in the interest on bonds or securities payable to bearer, each
payment due shall be considered as the proceeds of fruits of such right.
Whenever it consists in the enjoyment of benefits accruing
from a participation in any industrial or commercial enterprise, the
date of the distribution of which is not fixed, such benefits shall have
the same character.
In either case they shall be distributed as civil fruits, and
shall be applied in the manner prescribed in the preceding article.
The things referred to in Article 570 are considered civil
fruits and shall be deemed to accrue proportionately to the naked
owner and usufructuary, for the time the usufruct lasts.
Examples:
 (a) A gave to B in usufruct the profi ts of a certain
factory for 10 years. If the usufruct lasts really for 10 years, all
profits during that time must go to B.
(b) Suppose, however, B died at the end of 5 years, and
the following were the profits of the factory:
2nd year — P30 million
3rd year — P50 million
8th year — P10 million
10th year — P20 million
[NOTE: A business enterprise may sometimes have a
profit; at times, may incur a loss; and in the case of profits — these
may be irregular.].
How should the profits be divided?
ANS.: It is UNFAIR to give the heir of the usufructuary
P80 million (2nd and 3rd year’s profits) and only P30million (8th
and 10th year’s profits) to the naked owner. If this were so, we
would be applying the rule for industrial or natural fruits, not civil
fruits. It is indeed unfair because a business is expected to have its
ups and downs. Therefore, considering that the usufruct was
supposed to last for 10 years (though it actually lasted for only 5
years), it is fairer to give half of the total profi ts to the heirs of the
usufructuary, and half to the naked owner.
[NOTE: Similarly, if during the first five years, no profi
ts were realized because the company came out even, and profi ts
came only after the last fi ve years, the rule set forth above should
be followed, otherwise gross injustice would result since it is well-
known that it takes a company sometime before it becomes a
gaining proposition. Of course, the parties can stipulate otherwise
in their contract, but in the absence of stipulation, Art. 570 should
apply.
2. Increase in the Thing Held in Usufruct
Article 571. The usufructuary shall have the right to enjoy
any increase which the thing in usufruct may acquire through
accession, the servitudes established in its favor, and, in general, all the
benefi ts inherent therein.
Aside from the right to the fruits (already discussed), the
usufructuary has the right to the enjoyment (use, not ownership) of:
(a) accessions (whether artificial or natural),
(b) servitudes and easements,
(c) all benefits inherent in the property (like the right to
hunt and fish therein, the right to construct rain
water receptacles, etc.).
3. Right to the Thing Itself and the Usufructuary
Right
Article 572. The usufructuary may personally enjoy the
thing in usufruct, lease it to another, or alienate his right of usufruct,
even by a gratuitous title; but all the contracts he may enter into as
such usufructuary shall terminate upon the expiration of the usufruct,
saving leases of rural lands, which shall be considered as subsisting
during the agricultural year.
a. Rights with Reference to the THING
ITSELF (in Addition to the Usufruct)
The usufruct may:
Page 72 of 121
(i) may personally enjoy the thing (that is, entitled
to possession and fruits).
[NOTE: The enjoyment may also be thru another unless
the contrary has been provided or stipulated.].
(ii) may lease the thing to another. (This can be
done even without the owner’s consent;
moreover, ordinarily the lease must not extend
to a period longer than that of the usufruct,
unless the owner consents. Thus, the lease ends
at the time the usufruct ends, except in the case
of rural leases.).
[NOTE: If the lessee should damage the property, the
usufructuary shall answer to the owner. (Art. 590). The relation
between the owner and the usufructuary, does not end just because
a lease has been made. The usufructuary, however, can demand
reimbursement from the lessee, because of the latter’s breach of the
contract of lease. If the usufructuary cannot pay the damage to the
naked owner, his bond shall be liable. This is precisely one reason
for the requirement of a bond. (See Art. 583).].
However, Article 1168 of the Civil Code provides that
when an obligation consists in not doing and the obligor does what
has been forbidden him, it shall also be undone at his expense. The
lease contract prohibited petitioner Luis Keh, as lessee, from
subleasing the fishpond. In entering into the agreement for pakiao-
buwis with private respondent, not to mention the apparent artifice
that was his written agreement with petitioner Lee on January 9,
1978, petitioner Keh did exactly what was prohibited of him under
the contract to sublease the fishpond to a third party [Perez v.
Court of Appeals].
b. Rights with Reference to the
USUFRUCTUARY RIGHT ITSELF
The usufruct:
(i) May alienate (sell, donate, bequeath, or devise)
the usufructuary right (except a legal usufruct,
i.e., the usufruct which parents have over the
properties of their unemancipated children,
because said usufruct is to be used for certain
obligations towards children); or a usufruct
granted a usufructuary in consideration of his
person (4 Manresa 375); or a usufruct acquired
thru a caucion juratoria, for here, the need of
the usufructuary himself is the reason for the
enjoyment. (See Art. 587).
(ii) May pledge or mortgage the usufructuary right
(because he OWNS said right) BUT he cannot
pledge or mortgage the thing itself because he
does not own the thing. (See Art. 2085[2]).
Neither can he sell or in any way alienate the
thing itself, or future crops, for crops pending
at the termination of the usufruct belong to the
naked owner. (Art. 567).
4. Abnormal or Imperfect Usufruct
Article 573. Whenever the usufruct includes things which,
without being consumed, gradually deteriorate through wear and tear,
the usufructuary shall have the right to make use thereof in accordance
with the purpose for which they are intended, and shall not be obliged
to return them at the termination of the usufruct except in their
condition at that time; but he shall be obliged to indemnify the owner
for any deterioration they may have suffered by reason of his fraud or
negligence.
This article deals with an ABNORMAL or imperfect
usufruct. It is true that ALL things deteriorate, but there are some
things that deteriorate much faster than others (such as clothes,
furniture, carriages, vehicles, computers, copiers, or books).
a. Deterioration because of NORMAL USE
The usufructuary is not responsible. Therefore, he can
return them in the condition they might be in at the termination of
the usufruct. There is no necessity for him to make any repairs to
restore them to their former condition (See 4 Manresa 430-431),
for after all, they can be PRESERVED without the necessity of
repairs (as when the varnish of a chair has disappeared). Failure to
return the thing will result in indemnifi cation for the value the
object may have at the end of the usufruct.
delivered) (2) Or, if there was no appraisal,
return same kind, quality, and quantity OR pay
the price current at the termination of the
usufruct (therefore not at the original price or
value).
6. Dead and Cut-Off or Uprooted Trunks
Article 575. The usufructuary of fruit-bearing trees and
shrubs may make use of the dead trunks, and even of those cut off or
uprooted by accident, under the obligation to replace them with new
plants.
The usufructuary can use (even for firewood, though he
is NOT the naked owner) the following:
(a) dead trunks
(b) those cut off or uprooted by accident

BUT he must REPLACE them with new plants (for

b. Deterioration because of an event or act
indeed, he was not the naked owner).
that endangers their preservation (as when
by fortuitous event, lightning splits a table into
7. Right to Make Useful and Luxurious
three pieces),
Improvements
Even though there was no fault or negligence or fraud on
the part of the usufructuary, he is still required, under Art. 592, to
Article 579. The usufructuary may make on the property
make the NECESSARY OR ORDINARY REPAIRS. Thus, mere
held in usufruct such useful improvements or expenses for mere
deterioration thru normal use does not require the ordinary repairs
pleasure as he may deem proper, provided he does not alter its form or
referred to in Art. 592. substance; but he shall have no right to be indemnified therefor. He
c. deteriorate because of fraud (dolo incidente may, however, remove such improvements, should it be possible to do
or fraud amounting to an EVASION of the so without damage to the property.
obligation to preserve) or NEGLIGENCE
(culpa), Article 580. The usufructuary may set off the improvements
The usufructuary is responsible. (Art. 573). (Such he may have made on the property against any damage to the same.
liability may however be set off against improvements.) (See Art. (488)
580).
The usufructuary has the RIGHT (not the duty) to
5. Abnormal Usufruct on Consumable Things make:
(a) useful improvements;
Article 574. Whenever the usufruct includes things which (b) luxurious improvements (for mere pleasure).
cannot be used without being consumed, the usufructuary shall have
the right to make use of them under the obligation of paying their BUT —
appraised value at the termination of the usufruct, if they were
(a) He must not alter the form or substance of the
appraised when delivered. In case they were not appraised, he shall
property held in usufruct (he cannot build a house if
have the right to return the same quantity and quality, or pay their
current price at the time the usufruct ceases. to do so would destroy an orchard, if the usufruct is
on an orchard, unless the owner consents).
(b) He is NOT entitled to a REFUND (otherwise he
This is another instance of abnormal usufruct, and is
might improve the naked owner out of his property)
sometimes referred to as a “quasi-usufruct” because the form and
(Castan), but he may —
substance is not really preserved. Thus, this is really a SIMPLE
(i) either remove the improvements if no
loan. It has been included however in the title on usufructs because
substantial damage to the property in
in what are called UNIVERSAL USUFRUCTS, both non-
usufruct is caused (Art. 579); OR
consumable and consumable properties are included. While we
(ii) set off (compensate) the improvements
seldom fi nd usufructs on consumable properties alone, it is a fact
against damages for which he may be
that they indeed exist. Thus, the Supreme Court has held that even
liable. (Art. 580).
money may be the object of a usufruct.

Rule in case of set off

RULES for this ‘QUASI-USUFRUCT’
a. If the damage is greater than the improvement, the
(i) The usufructuary (debtor-borrower) can use
usufructuary is liable for the excess;
them (as if he is the owner, with complete right
b. If the improvement is greater than the damage, the
of pledge or alienation).
naked owner is not liable to refund he excess.
(ii) BUT at the end of the usufruct, he must (1) pay
the APPRAISED value (if appraised when first

Page 73 of 121
 8. Rights of Usufructuary of a Part of a Common
Property
Article 582. The usufructuary of a part of a thing held in
common shall exercise all the rights pertaining to the owner thereof
with respect to the administration and the collection of fruits or
interest. Should the co-ownership cease by reason of the division of the
thing held in common, the usufruct of the part allotted to the co-owner
shall belong to the usufructuary.
A co-owner may give the usufruct of his share to another,
even without the consent of the others, unless personal
considerations are present. (See Art. 493).
The usufructuary in such a case takes the owner’s place
as to:
(a) administration (management);
(b) collection of fruits or interest. (Art. 582). (BUT not
as to alienation, disposition, or creation of any real
right over the property, since these are strict acts of
ownership, unless of course he is authorized by the
naked owner.).
Effect of Partition
If there be a partition, the usufructuary continues to have
the usufruct of the part allotted to the co-owner concerned. (Art.
582).
If the co-owners make a partition, without the
intervention of the usufructuary, this is all right, and the partition
binds said usufructuary. Necessarily however, the naked owner
must also respect the usufruct [Pichay v. Querol].
9. Other Rights
Article 576. If in consequence of a calamity or extraordinary
event, the trees or shrubs shall have disappeared in such considerable
number that it would not be possible or it would be too burdensome to
replace them, the usufructuary may leave the dead, fallen or uprooted
trunks at the disposal of the owner, and demand that the latter remove
them and clear the land. (484a)
Article 577. The usufructuary of woodland may enjoy all the
benefits which it may produce according to its nature.
If the woodland is a copse or consists of timber for building,
the usufructuary may do such ordinary cutting or felling as the owner
was in the habit of doing, and in default of this, he may do so in
accordance with the custom of the place, as to the manner, amount and
season.
In any case the felling or cutting of trees shall be made in
such manner as not to prejudice the preservation of the land.
In nurseries, the usufructuary may make the necessary
thinnings in order that the remaining trees may properly grow.
With the exception of the provisions of the preceding
paragraphs, the usufructuary cannot cut down trees unless it be to
restore or improve some of the things in usufruct, and in such case he
shall first inform the owner of the necessity for the work. (485)
Article 578. The usufructuary of an action to recover real
property or a real right, or any movable property, has the right to
bring the action and to oblige the owner thereof to give him the
authority for this purpose and to furnish him whatever proof he may
have. If in consequence of the enforcement of the action he acquires the
thing claimed, the usufruct shall be limited to the fruits, the dominion
remaining with the owner. (486)
Page 74 of 121
10. Rights of the Owner
Article 581. The owner of property the usufruct of which is
held by another, may alienate it, but he cannot alter its form or
substance, or do anything thereon which may be prejudicial to the
usufructuary.
Article 595. The owner may construct any works and make
any improvements of which the immovable in usufruct is susceptible,
or make new plantings thereon if it be rural, provided that such acts do
not cause a diminution in the value of the usufruct or prejudice the
right of the usufructuary. (503)
C. OBLIGATIONS OF THE USUFRUCTUARY
The usufructuary has obligations:
(a) before the usufruct (like the making of inventory)
(b) during the usufruct (like taking due care of property)
(c) after the usufruct (like the duty to return and
indemnify in the proper cases).
1. Obligation Before Entering Upon the Usufruct
Article 583. The usufructuary, before entering upon the
enjoyment of the property, is obliged:
(1) To make, after notice to the owner or his legitimate
representative an inventory of all the property, which shall contain an
appraisal of the movables and a description of the condition of the
immovables;
(2) To give security, binding himself to fulfill the obligations
imposed upon him in accordance with this Chapter.
Article 584. The provisions of No. 2 of the preceding article
shall not apply to the donor who has reserved the usufruct of the
property donated, or to the parents who are usufructuaries of their
children’s property, except when the parents contract a second
marriage. (492a)
Article 585. The usufructuary, whatever may be the title of
the usufruct, may be excused from the obligation of making an
inventory or of giving security, when no one will be injured thereby.
a. Inventory
The following are required while making inventory:
(i) The owner (or his legitimate representative)
must be previously NOTIFIED (his presence or
absence is not important). (Purpose of notice:
To enable him to correct errors in the
inventory; if he desires).
(ii) The condition of the IMMOVABLES must be
described.
(iii) The movables must be appraised (in view of
easy deterioration or loss).
(iv) As a rule, NO FORM is required except that
when there are real properties, Art. 1358
demands a public instrument to affect third
parties.
(v) Expenses are to be borne by the usufructuary,
since the duty is his. (4 Manresa 451-452).
(vi) Effect of not making inventory (except when
excused) — same as when the security is not
given. (See Arts. 586 and 599; see also 3
Sanchez Roman 575-576).

NOTE: The obligation to make inventory and to give
security are not necessarily in order for the right to the usufruct to
begin, but are merely required before physical possession and
enjoyment of the property can be had.
b. The Giving of Security
Article 599. The usufructuary may claim any matured
credits which form a part of the usufruct if he has given or gives the
proper security. If he has been excused from giving security or has not
been able to give it, or if that given is not sufficient, he shall need the
authorization of the owner, or of the court in default thereof, to collect
such credits.
The usufructuary who has given security may use the capital
he has collected in any manner he may deem proper. The usufructuary
who has not given security shall invest the said capital at interest upon
agreement with the owner; in default of such agreement, with judicial
authorization; and, in every case, with security sufficient to preserve
the integrity of the capital in usufruct. (507)
The purpose is to insure faithful compliance of the duties
of the usufructuary (whether required during or at end of the
usufruct — like the duty to return). Since the law does not specify
what kind of security should be given, it follows that any kind of
sufficient security should be allowed — such as a cash or personal
bond, mortgage, etc.
c. When Inventory and Security Not Required
Inventory is not required when:
(i) No one will be injured thereby (as in the case
of usufruct over a periodical pension or
incorporeal right, provided the naked owner
consents for the law says may (Art. 585.
(ii) In case of waiver by the naked owner; or when
there is a stipulation in a will or contract.
Security is not required when:
(i) No one will be injured thereby (as in the case of
usufruct over a periodical pension or incorporeal
right, provided the naked owner consents for the law
says may (Art. 585);
(ii) In case of waiver by the naked owner, or when there
is a stipulation in a will or contract;
(iii) When the usufructuary is the donor of the property
(who has reserved the usufruct).
(iv) In case of caucion juratoria (promise under oath
under Art. 587).
(v) When there is a parental usufruct (that is, in the case
of parents who are usufructuaries of their children’s
property, except when the parents contract a second
or subsequent marriage, PROVIDED that each
child’s property does not exceed P50,000 in which
case, the parents have to fi le a bond (See Art. 225,
the Family Code) not as usufructuary, but as
guardian or administrator.
d. Failure to Give Security
Page 75 of 121
Article 586. Should the usufructuary fail to give security in
the cases in which he is bound to give it, the owner may demand that
the immovables be placed under administration, that the movables be
sold, that the public bonds, instruments of credit payable to order or to
bearer be converted into registered certifi cates or deposited in a bank
or public institution, and that the capital or sums in cash and the
proceeds of the sale of the movable property be invested in safe
securities.
The interest on the proceeds of the sale of the movables and
that on public securities and bonds, and the proceeds of the property
placed under administration, shall belong to the usufructuary.
Furthermore, the owner may, if he so prefers, until the
usufructuary gives security or is excused from so doing, retain in his
possession the property in usufruct as administrator, subject to the
obligation to deliver to the usufructuary the net proceeds thereof, after
deducting the sums which may be agreed upon or judicially allowed
him for such administration.
Article 587. If the usufructuary who has not given security
claims, by virtue of a promise under oath, the delivery of the furniture
necessary for his use, and that he and his family be allowed to live in a
house included in the usufruct, the court may grant this petition, after
due consideration of the facts of the case.
The same rule shall be observed with respect to implements,
tools and other movable property necessary for an industry or vocation
in which he is engaged.
If the owner does not wish that certain articles be sold
because of their artistic worth or because they have a sentimental
value, he may demand their delivery to him upon his giving security for
the payment of the legal interest on their appraised value.
Article 588. After the security has been given by the
usufructuary, he shall have a right to all the proceeds and benefits
from the day on which, in accordance with the title constituting the
usufruct, he should have commenced to receive them. (496)
The “promise under oath” is called a “caucion juratoria”
— a sworn duty to take good care of the property and return same
at the end of the usufruct. It takes the place of the bond or security
and is based on necessity and humanity (See 3 Sanchez Roman
578) as when a poor family acquires by inheritance, the usufruct of
a badly needed house. (See 4 Manresa 473-474).
Article 587 does not apply when the usufructuary is
exempted from giving security. It applies only if he is required but
cannot afford to give the security.
The following are the requisites for Caucion Juratoria to
be allowed:
(i) proper court petition
(ii) necessity for delivery of furniture, implements
or house included in the usufruct
(iii) approval of the court
(iv) sworn promise.
2. Obligations During the Usufruct
a. Degree of Care Required
ARTICLE 589. The usufructuary shall take care of the
things given in usufruct as a good father of a family. (497) 
b. Ordinary Repairs
Article 592. The usufructuary is obliged to make the
ordinary repairs needed by the thing given in usufruct. By ordinary
repairs are understood such as are required by the wear and tear due
to the natural use of the thing and are indispensable for its
preservation. Should the usufructuary fail to make them after demand
by the owner, the latter may make them at the expense of the
usufructuary.
These are repairs needed because of an event or an a that
endangers the preservation of the thing. (as distinguished from
deterioration under Art. 572).
For the usufructuary to be responsible for ordinary
repairs, the following conditions must be present:
(i) They are required by NORMAL or NATURAL
use.
(ii) They are needed for preservation.
(iii) They must have occurred DURING the
usufruct (because those occurring before and
after the end of the usufruct should be borne by
the naked owner). (4 Manresa 487).
(iv) They must have happened with or without the
fault of the usufructuary.
NOTES:
 If he was at FAULT, the usufructuary must pay
indemnity for damages.
 If the naked owner had demanded the repair,
and the usufructuary still fails to do so, the
owner may make them personally or thru
another at the expense of the usufructuary.
c. Extraordinary Repairs
Article 593. Extraordinary repairs shall be at the expense of
the owner. The usufructuary is obliged to notify the owner when the
need for such repairs is urgent.
Article 594. If the owner should make the extraordinary
repairs, he shall have a right to demand of the usufructuary the legal
interest on the amount expended for the time that the usufruct lasts.
Should he not make them when they are indispensable for
the preservation of the thing, the usufructuary may make them; but he
shall have a right to demand of the owner, at the termination of the
usufruct, the increase in value which the immovable may have
acquired by reason of the repairs. (502a)
If there is a stipulation to pay the debts of the naked
owner, Article 758 applies:
i. Pay only for prior debts and not for debts contracted
after the usufruct has been made, unless there is a
declaration to the contrary.
ii. Pay only for debts up to the value of the property in
usufruct unless, the contrary is intended.
If there is no stipulation to pay debts of the naked
owner, Article 759 applies:
i. As a rule, there is no obligation to pay;
ii. The only exception is that when the usufruct was
constituted in fraud of creditors (when at the time of
the constitution of the usufruct, the naked owner did
not reserve sufficient property to pay his debts. This
is presumed).
Page 76 of 121
d. Payment of Annual Charges and Taxes
Article 596. The payment of annual charges and taxes and of
those considered as a lien on the fruits, shall be at the expense of the
usufructuary for all the time that the usufruct lasts. (504)
Article 597. The taxes which, during the usufruct, may be
imposed directly on the capital, shall be at the expense of the owner.
If the latter has paid them, the usufructuary shall pay him
the proper interest on the sums which may have been paid in that
character; and, if the said sums have been advanced by the
usufructuary, he shall recover the amount thereof at the termination of
the usufruct. (505)
Pursuant to the aforequoted provision, the tax directly
burdens the capital, that is, the real value of the property and
should be paid by the owner. It is contended, however, that under
the second paragraph of the aforequoted article, if the usufructuary
should pay the tax, he would be entitled to reimbursement for the
amount thereof only upon the expiration of the usufruct, and the
usufruct being still afoot, it is premature for the plaintiffs, as
usufructuaries who advanced the payment of the tax, to bring the
action for the recovery of what they paid. There is, however, no
basis for this reasoning in the case of Mercado v. Rizal. In this
case, the usufructuaries objected to the payment of tax. They did
not consent to the deduction thereof from their share in the
products, and much less to the application thereof to this payment
which they believe they are not bound to make. In fact they did not
make the payment; the naked owners were the ones who made it
without their consent and with money belonging to them as their
share of the fruits coming to them in their capacity as
usufructuaries.
e. Debts of Owner
Article 598. If the usufruct be constituted on the whole of a
patrimony, and if at the time of its constitution the owner has debts, the
provisions of articles 758 and 759 relating to donations shall be applied,
both with respect to the maintenance of the usufruct and to the
obligation of the usufructuary to pay such debts.
The same rule shall be applied in case the owner is obliged,
at the time the usufruct is constituted, to make periodical payments,
even if there should be no known capital. (506)
Article 600. The usufructuary of a mortgaged immovable
shall not be obliged to pay the debt for the security of which the
mortgage was constituted.
Should the immovable be attached or sold judicially for the
payment of the debt, the owner shall be liable to the usufructuary for
whatever the latter may lose by reason thereof. (509)
There is no doubt that the owner may validly mortgage
the property in favor of a third person and the law provides that, in
such a case, the usufructuary shall not be obliged to pay the debt of
the mortgagor, and should the immovable be attached or sold
judicially for the payment of the debt, the owner shall be liable to
the usufructuary for whatever the latter may lose by reason thereof
[Hemedes v. Court of Appeals].
f. Obligation to Notify Owner
Article 601. The usufructuary shall be obliged to notify the
owner of any act of a third person, of which he may have knowledge,
that may be prejudicial to the rights of ownership, and he shall be
liable should he not do so, for damages, as if they had been caused
through his own fault. (511)
g. Suits Relating to the Usufruct
Article 602. The expenses, costs and liabilities in suits
brought with regard to the usufruct shall be borne by the
usufructuary. (512)
h. Usufruct On Livestock
Article 591. If the usufruct be constituted on a flock or herd
of livestock, the usufructuary shall be obliged to replace with the young
thereof the animals that die each year from natural causes, or are lost
due to the rapacity of beasts of prey.
If the animals on which the usufruct is constituted should all
perish, without the fault of the usufructuary, on account of some
contagious disease or any other uncommon event, the usufructuary
shall fulfill his obligation by delivering to the owner the remains which
may have been saved from the misfortune.
Should the herd or flock perish in part, also by accident and
without the fault of the usufructuary, the usufruct shall continue on the
part saved.
Should the usufruct be on sterile animals, it shall be
considered, with respect to its effects, as though constituted on fungible
things. (499a)
3. Obligations After the Usufruct
Article 612. Upon the termination of the usufruct, the thing
in usufruct shall be delivered to the owner, without prejudice to the
right of retention pertaining to the usufructuary or his heirs for taxes
and extraordinary expenses which should be reimbursed. After the
delivery has been made, the security or mortgage shall be cancelled.
(522a)
D. EXTINGUISHMENT OF USUFRUCT
Article 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless a contrary
intention clearly appears;
(2) By the expiration of the period for which it was
constituted, or by the fulfillment of any resolutory condition provided
in the title creating the usufruct;
(3) By merger of the usufruct and ownership in the same
person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting
the usufruct;
(7) By prescription. (513a)
In Rivera-Calingasan v. Riverat, the right to the usufruct
is rendered moot by the death of Wilfredo since death extinguishes
a usufruct under Article 603(1) of the Civil Code. This
development deprives the heirs of the usufructuary the right to
retain or to reacquire possession of the property even if the
ejectment judgment directs its restitution.
1. Partial Loss
Article 604. If the thing given in usufruct should be lost only
in part, the right shall continue on the remaining part. (514)
2. Usufruct In Favor of Entities
Page 77 of 121
Article 605. Usufruct cannot be constituted in favor of a
town, corporation, or association for more than fifty years. If it has
been constituted, and before the expiration of such period the town is
abandoned, or the corporation or association is dissolved, the usufruct
shall be extinguished by reason thereof. (515a)
3. Usufruct For The Time That May Elapse Before
a Third Person Reaches a Certain Age
Article 606. A usufruct granted for the time that may elapse
before a third person attains a certain age, shall subsist for the number
of years specified, even if the third person should die before the period
expires, unless such usufruct has been expressly granted only in
consideration of the existence of such person. (516)
4. Usufruct on a Building And/Or the Land
Concerned
Article 607. If the usufruct is constituted on immovable
property of which a building forms part, and the latter should be
destroyed in any manner whatsoever, the usufructuary shall have a
right to make use of the land and the materials.
The same rule shall be applied if the usufruct is constituted
on a building only and the same should be destroyed. But in such a
case, if the owner should wish to construct another building, he shall
have a right to occupy the land and to make use of the materials, being
obliged to pay to the usufructuary, during the continuance of the
usufruct, the interest upon the sum equivalent to the value of the land
and of the materials. (517)
5. Payment of Insurance on the Tenement Held in
Usufruct
Article 608. If the usufructuary shares with the owner the
insurance of the tenement given in usufruct, the former shall, in case of
loss, continue in the enjoyment of the new building, should one be
constructed, or shall receive the interest on the insurance indemnity if
the owner does not wish to rebuild.
Should the usufructuary have refused to contribute to the
insurance, the owner insuring the tenement alone, the latter shall
receive the full amount of the insurance indemnity in case of loss,
saving always the right granted to the usufructuary in the preceding
article. (518a)
6. Rules in Case of Expropriation
Article 609. Should the thing in usufruct be expropriated for
public use, the owner shall be obliged either to replace it with another
thing of the same value and of similar conditions, or to pay the
usufructuary the legal interest on the amount of the indemnity for the
whole period of the usufruct. If the owner chooses the latter
alternative, he shall give security for the payment of the interest. (519)
7. Effect of Bad Use of the Property Held in
Usufruct
Article 610. A usufruct is not extinguished by bad use of the
thing in usufruct; but if the abuse should cause considerable injury to
the owner, the latter may demand that the thing be delivered to him,
binding himself to pay annually to the usufructuary the net proceeds of
the same, after deducting the expenses and the compensation which
may be allowed him for its administration. (520)
 8. Rights and Obligations at the Termination of the
Usufruct
Article 611. A usufruct constituted in favor of several
persons living at the time of its constitution shall not be extinguished
until the death of the last survivor. (521)
VIII
EASEMENTS OR SERVITUDES
A. GENERAL PROVISIONS
Article 613. An easement or servitude is an encumbrance
imposed upon an immovable for the benefit of another immovable
belonging to a different owner. The immovable in favor of which the
easement is established is called the dominant estate; that which is
subject thereto, the servient estate.
Article 614. Servitudes may also be established for the
benefit of a community, or of one or more persons to whom the
encumbered estate does not belong
‘Easement’ (or ‘Servitude’) is an encumbrance imposed
upon an immovable for the benefit of a community or one or more
persons (personal easements) or for the benefit of another
immovable belonging to a different owner (real or predial
easement).
In Quimen v. Court of Appeals, it was held that an
easement is a real right on another’s property, corporeal and
immovable, for the benefit of another immovable, whereby the
owner of the latter must refrain from doing or allow somebody else
to do or something to be done on his property, for the benefit of
another person or tenement. It is inseparable, indivisible and
perpetual, unless extinguished by causes provided by law.
Example: the right of way across another’s land.
Sanchez Roman’s Definition: It is a real right, constituted on
another’s property, corporeal and immovable whereby the owner of
the latter must refrain from doing or allowing somebody else to do
something on his property, for the benefit of another person or
tenement.
Servient Estate is one which is burdened by a servitude;
Dominant Estate is one that is benefited as a result of an
easement.
1. Characteristics of Easement
(a) a real right — therefore an action in rem is possible
against the possessor of the servient estate.
(b) imposable only on ANOTHER’S property (hence,
there can be no true easement on one’s own
property; thus, merger in the same person of the
ownership of the dominant and servient estate
extinguishes the easement). [See Arts. 613, 631 (No.
1).].
(c) it is a jus in re aliena (a real right that may be
alienated although the naked ownership — nuda
proprietas — is maintained).
(d) it is a limitation or encumbrance on the servient
estate for another’s benefit. [NOTE: It is an
encumbrance on the servient estate, but confers a
benefit on the dominant estate.].
Page 78 of 121
[NOTE: (1) It is essential that there be a BENEFIT
otherwise there would be no easement.
(2) It is not essential that the benefit be exercised.
What is vital is that it can be exercised.
(3) It is not essential for the benefit to be very great.
(4) The benefit should not be so great as to
completely absorb or impair the usefulness of the servient estate,
for then, this would be not merely an encumbrance or a
limitation but the cancellation of the rights of the servient estate.
(See 4 Manresa 586-587).
(5) The benefit or utility goes to the dominant estate
(not necessarily to the owner of the dominant estate). There is
limited use but there is NO POSSESSION.
(6) The exercise is naturally restricted by the needs
of the dominant estate or of its owner (TS, Nov. 17, 1930), such
needs being dependent upon the progress of civilization
(Larracas v. Del Rio, [CA], 37 O.G. 287, where the Court of
Appeals held that “in an age when motor cars are a vital
necessity, the dominant proprietor has a right to demand a
driveway for his automobile, and not a mere lane or pathway.”).
(7) Easements, being an ABNORMAL restriction on
ownership, are NOT PRESUMED, but may be imposed by
LAW. (See Art. 619).].
(e) there is INHERENCE (or INSEPARABILITY,
from the estate to which it belongs). (Art. 617).
(f) it is INDIVISIBLE (even if the tenement be
divided). (Art. 618).
(g) it is INTRANSMISSIBLE (unless the tenement
affected be also transmitted or alienated).
(h) as long as the dominant and/or the servient estate
exists unless sooner extinguished by the causes
enumerated in the law).
2. Classification of Easements
Article 615. Easements may be continuous or discontinuous,
apparent or non-apparent.
Continuous easements are those the use of which is or may
be incessant, without the intervention of any act of man.
Discontinuous easements are those which are used at
intervals and depend upon the acts of man.
Apparent easements are those which are made known and
are continually kept in view by external signs that reveal the use and
enjoyment of the same.
Non-apparent easements are those which show no external
indication of their existence.
Artticle 616. Easements are also positive or negative.
A positive easement is one which imposes upon the owner of
the servient estate the obligation of allowing something to be done or of
doing it himself, and a negative easement, that which prohibits the
owner of the servient estate from doing something which he could
lawfully do if the easement did not exist.
(a) According to Party Given the Benefit (Real or
Personal Easements).
i. real (or predial) — for the benefit of another
immovable belonging to a different owner
(Example: Easement of water where lower
estates are obliged to allow water naturally
descending from upper estates to fl ow into
them [lower estates]. [See Art. 637]. [Art.
613].).
 ii. personal easement — for the benefi t of one or
more persons or of a community (not the
owner of the servient estate). (Example:
Easement of right of way for the passage of
livestock [See Art. 657] [Art. 614] or right of
way for the community.
Jabonete v. Monteverde
Held: Under the aforesaid order of May 24, 1954, the easement
awarded or secured by the lower court to the plaintiffs was strictly a
personal one. The right of way granted was expressly limited to the latter
and their "family, friends, drivers, servants and jeeps." In the very language
of the agreement the following appears:
xxx
The servitude established was clearly for the benefit alone of the
plaintiffs and the persons above enumerated and it is clear that the lower
court, as well as the parties addressed by the said order, did not intend the
same to pass on to the plaintiffs' successors-in-interest. In other words, the
right acquired by the original plaintiffs was a personal servitude under
Article 614 of the Civil Code, and not a predial servitude that inures to the
benefit of whoever owns the dominant estate.
In resisting the extension of the aforementioned easement to the
latter, the plaintiffs' successors-in-interest, the respondent-appellant,
therefore, was not defying the decision of March 11, 1954 which was then
no longer subsisting, nor the order of May 24, 1954 since the said
successors-in-interest had no right thereunder.
Another evidence that the servitude in question was personal to
the plaintiffs is the fact that the same was granted to the latter without any
compensation to the respondent-appellant.
(b) According to the Manner They Are Exercised
(Continuous or Discontinuous):
i. continuous easements — their use is incessant,
or may be incessant, without the intervention of
any act of man. (Examples: The easement of
drainage, the right to support a beam on
another’s wall.)
[NOTE: For an easement to be considered “continuous,”
its use does not have to be incessant; it is enough that the use MAY
BE incessant.].
ii. discontinuous easements — they are used at
intervals and depend upon the acts of man.
(Example: Easement of right of way, because it
can be exercised only if a man passes or puts
his feet over somebody else’s land.
Easement is continuous if its use is, or may be, incessant
without the intervention of any act of man, like the easement of
drainage; and it is discontinuous if it is used at intervals and
depends on the act of man, like the easement of right of way
[Bicol Agro v. Obias].
The easement of right of way is considered discontinuous
because it is exercised only if a person passes or sets foot on
somebody else's land. Like a road for the passage of vehicles or
persons, an easement of right of way of railroad tracks is
discontinuous because the right is exercised only if and when a
train operated by a person passes over another's property. In other
words, the very exercise of the servitude depends upon the act or
intervention of man which is the very essence of discontinuous
easements. The presence of more or less permanent railroad tracks
does not, in any way, convert the nature of an easement of right of
way to one that is continuous. It is not the presence of apparent
Page 79 of 121
signs or physical indications showing the existence of an easement,
but rather the manner of exercise thereof, that categorizes such
easement into continuous or discontinuous. The presence of
physical or visual signs only classifies an easement into apparent or
non-apparent. Thus, a road (which reveals a right of way) and a
window (which evidences a right to light and view) are apparent
easements, while an easement of not building beyond a certain
height is non-apparent. [Bogo-Medellin Milling v. Court of
Appeals].
(c) According to whether or not their Existence is
Indicated (Apparent and non-apparent
Easements)
i. apparent easements — those made known and
continually kept in view by external signs that
reveal the use and enjoyment of the same.
[Examples: Right of way when there is an alley or a
permanent path; dam; window in a party wall visible to both
owners.
[NOTE: The easement of aqueduct is considered always
apparent (Art. 646), whether or not it can be seen.]
Liwag v. Happy Glen Loop Homeowners
Held: In this case, the water facility is an encumbrance on Lot
11, Block 5 of the Subdivision for the benefit of the community. It is
continuous and apparent, because it is used incessantly without human
intervention, and because it is continually kept in view by the overhead
water tank, which reveals its use to the public.
Contrary to petitioner’s contention that the existence of the
water tank on Lot 11, Block 5 is merely tolerated, we find that the easement
of water facility has been voluntarily established either by Marcelo, the
Subdivision owner and developer; or by F.G.R. Sales, his predecessor-in-
interest and the original developer of the Subdivision. For more than 30
years, the facility was continuously used as the residents’ sole source of
water. The Civil Code provides that continuous and apparent easements are
acquired either by virtue of a title or by prescription of 10 years. [32] It is
therefore clear that an easement of water facility has already been acquired
through prescription.
ii. non-apparent easements — they show no
external indication of their existence.
[Examples: In general, negative easements,
easement of not building to more than a certain
height, easement of lateral and subjacent
support; easement of intermediate distances.
Also a right of way if there is no visible path or
alley.
(d) According to the Purpose of the Easement or the
Nature of the Limitation (Positive and Negative).
i. positive easement: Here the owner of the
servient estate is obliged (a) to allow
something to be done on his property (servitus
in patendo) or (b) to do it himself (servitus in
faciendo). Positive easements are also termed
“servitudes of SUFFERANCE or INTRUSION
or SERVICE,” because something is being
done on the servient estate. [Examples:
Easement of light and view in a party wall.
right of way, duty to cut off tree branches
extending over the neighboring estates.
 ii. negative easement: Here the owner of the
servient estate is PROHIBITED to do
something which he could lawfully do were it
not for the existence of the easement. (Art.
616). (Example: Easement of light and view
when the window or opening is on one’s own
wall or estate. (Negative easements may also
be called “servitudes of ABSTENTION or
LIMITATION or RESTRICTION’’).
In Garcia v. Santos, it was held that as a general rule, an
easement of light and view is a positive one if the window or
opening is situated in a party wall, while it is a negative one if the
window or opening is thru one's own wall, i.e., thru a wall of the
dominant estate. However, "[e]ven if the window is on one's own
wall, still the easement would be positive if the window is on a
balcony or projection extending over into the adjoining land."
3. Principle of Inseparability
Article 617. Easements are inseparable from the estate to
which they actively or passively belong.
Easements cannot be sold or donated or mortgaged
independently of the real property to which they may be attached.
This does not mean, however, that a person cannot grant an
easement of right of way, for example, unless he also sells the land.
It merely means that when an easement is granted, such easement
refers to a particular parcel of land.
Registration of the dominant estate under the Torrens
system without the registration of the voluntary easements in its
favor, does not extinguish the easements; but registration of the
servient estate without the registration of the easements burdening
it extinguishes said voluntary easements. Actual knowledge of
third persons is equivalent to registration in that if they have actual
knowledge of the existence of the easement, they are bound by the
same, even though no registration has been made.
NOTE: A right of way may be either a legal easement or
a voluntary easement. If, for example, there is no adequate outlet to
the highway except thru the neighbor’s land, the neighbor is
obliged by law to grant a compulsory (legal) easement of right of
way, upon payment of the proper indemnity. On the other hand,
even if there is already an adequate outlet, a person may still desire
to cross his neighbor’s land. This right of way must be stipulated
upon, in which case we term the easement a voluntary one.
In Solid Manila v. Bio Hong Trading, while it is true that
the sale did include the alley, the Court rejects the petitioner's
contention that the deed of sale "excluded" it, because as a mere
right-of-way, it cannot be separated from the tenement and
maintain an independent existence. Servitudes are merely
accessories to the tenements of which they form part. Although
they are possessed of a separate juridical existence, as mere
accessories, they cannot, however, be alienated from the tenement,
or mortgaged separately. The fact, however, that the alley in
question, as an easement, is inseparable from the main lot is no
argument to defeat the petitioner's claims, because as an easement
precisely, it operates as a limitation on the title of the owner of the
servient estate, specifically, his right to use (jus utendi).
4. Indivisibility
Page 80 of 121
Article 618. Easements are indivisible. If the servient estate
is divided between two or more persons, the easement is not modified,
and each of them must bear it on the part which corresponds to him.
If it is the dominant estate that is divided between two or
more persons, each of them may use the easement in its entirety,
without changing the place of its use, or making it more burdensome in
any other way.
Partition or division of an estate does not divide the
easement, which continues to be complete in that each of the
dominant estates can exercise the whole easement over each of the
servient estates, but ONLY on the PART corresponding to each of
them.
Example: Estate A, the dominant estate, is divided into
three, with owners, X, Y, Z having determinate parts thereof. Each
of the three may use the easement of right of way for example,
provided that the burden is not increased.
NOTE: The mere increase in the number of owners is
not what the law means when it says that the easement should not
be made more burdensome.
5. How Easements are Established
Article 619. Easements are established either by law or by
the will of the owners. The former are called legal and the latter
voluntary easements.
a. voluntary — constituted by will or agreement of
the parties or by a testator. [NOTE: Even if a
voluntary easement — easement by grant —
becomes also a legal easement, or an easement by
necessity, it is still a property right, which
continues even if the necessity has ended.
[Benedicto v. Court of Appeals].
b. mixed — created partly by agreement and partly
by the law.
c. legal — those constituted by law for public use or
for private interest. [Examples of Legal Easement:
(i) waters. (Arts. 637-648).
(ii) right of way. (Arts. 649-657).
(iii) party wall. (Arts. 649-657).
(iv) light and view. (Arts. 667-673).
(v) drainage of buildings. (Arts. 674-676).
(vi) intermediate distances. (Arts. 677-681).
(vii) against nuisances. (Arts. 682-683).
(viii) lateral and subjacent support. (Arts.
684- 687).].
B. MODES OF ACQUIRING EASEMENTS
Easements are acquired:
a. If continuous and apparent (i.e., if they are
continuous and at the same time apparent), they may
be acquired by title or prescription.
b. If discontinuous and apparent (only by TITLE).
(Art. 622).
c. If continuous and non-apparent (only by TITLE).
(Art. 622).
d. If discontinuous and non-apparent (only by TITLE).
(Art. 622).
1. Continuous and Apparent Easements

Article 620. Continuous and apparent easements are
acquired either by virtue of a title or by prescription of ten years.
Note that prescription under Article 620 requires 10 years
irrespective of the good or bad faith, the presence or absence of just
title on the part of the possessor. The general rules on prescription
are not applicable in cases of prescription provided for by special
or particular provisions.
a. Acquisition by Title
Title here does not necessarily mean document. It means
a juridical act or law sufficient to create the encumbrance.
Examples: law, donation, testamentary succession,
contract.
Intestate succession does not create an easement, for no
act is involved. Hence, instead of creating an easement, it transmits
merely an easement already existing.
Prescription is a mode of acquisition, and is generally
and ordinarily a title, but is not considered as such under Art. 620
which expressly makes it DISTINCT from title.
In Velasco v. Cusi, it was held that if a street or highway
already exists when a Torrens Title is issued to the adjacent owner,
and said street or highway is included inside the boundaries
mentioned in the title, the street or highway may be regarded as an
encumbrance or easement over the lot just as effectively as when
said easement is recorded in the title. The action to quiet title (to
have the street or highway declared petitioner’s property) must
necessarily fail.
b. Acquisition Thru Prescription
Article 621. In order to acquire by prescription the
easements referred to in the preceding article, the time of possession
shall be computed thus: in positive easement, from the day on which
the owner of the dominant estate, or the person who may have made
use of the easement, commenced to exercise it upon the servient estate;
and in negative easements, from the day on which the owner of the
dominant estate forbade, by an instrument acknowledged before a
notary public, the owner of the servient estate, from executing an act
which would be lawful without the easement.
If the easement is both continuous and apparent, it may
be acquired by virtue of prescription within a period of ten (10)
years. The commencement of the ten-year period of prescription
will depend on whether the easement is positive or negative, as
follows:
i. If the easement is positive, the 10-year period
is counted from the day on which the owner of
the dominant estate, or the person who may
have made use of the easement, commenced to
exercise it upon the servient estate; or
ii. If the easement is negative, the 10-year period
is counted from the day on which the owner of
the dominant estate forbade, by an instrument
acknowledged before a notary public, the
owner of the servient estate, from executing an
act which would be lawful without the
easement.
Even under the old Civil Code, a “formal act” was
required and therefore, an oral prohibition was NOT sufficient;
Page 81 of 121
neither was a mere private writing. The law requires solemn
formalities because easements are in the nature of an encumbrance
on the servient estate, constituting as they do, a limitation on the
dominical right of the owner of the subjected property. The notarial
prohibition in the acquisition of a negative easement is equivalent
to the act of direct invasion in the case of positive easement [Cid v.
Javier].
NPC v. Sps. Campos
Held: As a corollary, Article 1119 of the Civil Code provides
that:
Art. 1119.  Acts of possessory character executed in virtue of
license or by mere tolerance of the owner shall not be available for the
purposes of possession.
In this case, the records clearly reveal that the petitioner's
possession of that portion of the subject property where it erected the
wooden posts and transmission lines was merely upon the tolerance of the
respondents.  Accordingly, this permissive use by the petitioner of that
portion of the subject property, no matter how long continued, will not
create an easement of right-of-way by prescription.  The case of Cuaycong
vs. Benedicto is particularly instructive.  In that case, the plaintiffs for more
than twenty years made use of the road that passed through the hacienda
owned by the defendants, being the only road that connected the plaintiff's
hacienda to the public road.  The defendants closed the road in question and
refused the use of the same unless a toll was paid.  The plaintiffs therein
brought an action to enjoin the defendants from interfering with the use of
the road.  In support of their action, the plaintiffs presented evidence
tending to show that they have acquired the right-of-way through the road
by prescription.  This Court rejected the contention, holding as follows:
Had it been shown that the road had been maintained at the
public expense, with the acquiescence of the owners of the estates crossed
by it, this would indicate such adverse possession by the government as in
course of time would ripen into title or warrant the presumption of a grant
or of a dedication.  But in this case there is no such evidence, and the
claims of plaintiffs, whether regarded as members of the public asserting a
right to use the road as such, or as persons claiming a private easement of
way over the land of another must be regarded as resting upon the mere fact
of user.
If the owner of a tract of land, to accommodate his neighbors or
the public in general, permits them to cross his property, it is reasonable to
suppose that it is not his intention, in so doing, to divest himself of the
ownership of the land so used, or to establish an easement upon it, and that
the persons to whom such permission, tacit or express, is granted, do not
regard their privilege of use as being based upon anything more than the
mere tolerance of the owner.  Clearly, such permissive use is in its
inception based upon an essentially revocable license.  If the use continues
for a long period of time, no change being made in the relations of the
parties by any express or implied agreement, does the owner of the property
affected lose his right of revocation?  Or, putting the same question in
another form, does the mere permissive use ripen into title by prescription?
It is a fundamental principle of the law in this jurisdiction
concerning the possession of real property that such possession is not
affected by acts of a possessory character which are "merely tolerated" by
the possessor, which are or due to his license (Civil Code, arts. 444 and
1942).  This principle is applicable not only with respect to the prescription
of the dominium as a whole, but to the prescription of right in rem.   In the
case of Cortes vs. Palanca Yu-Tibo (2 Phil. Rep., 24, 38), the Court said:
The provision of article 1942 of the Civil Code to the effect that
acts which are merely tolerated produce no effect with respect to possession
is applicable as much to the prescription of real rights as to the prescription
of the fee, it being a glaring and self-evident error to affirm the contrary, as
does the appellant in his motion papers. Possession is the fundamental basis
of prescription.  Without it no kind of prescription is possible, not even the
extraordinary. Consequently, if acts of mere tolerance produce no effect
with respect to possession, as that article provides, in conformity with
article 444 of the same Code, it is evident that they can produce no effect
with respect to prescription, whether ordinary or extraordinary.  This is true
whether the prescriptive acquisition be of a fee or of real rights, for the
same reason holds in one and the other case; that is, that there has been no SUFFERANCE or ALLOWANCE, thus the easement is
true possession in the legal sense of the word.  (Citations omitted) POSITIVE. (See Cortez v. Yu Tibo, 2 Phil. 24, see also Art. 668).].
Possession, under the Civil Code, to constitute the foundation of
a prescriptive right, must be possession under claim of title (en concepto de May the Easement of Right of Way be Acquired by
dueño), or to use the common law equivalent of the term, it must
Prescription? (BAR EXAM QUESTION)
be adverse.  Acts of possessory character performed by one who holds by
mere tolerance of the owner are clearly not en concepto de dueño, and such
ANS.: No, because it is discontinuous or intermittent.
possessory acts, no matter how long so continued, do not start the running The limitation on the servient owner’s rights of ownership exists
of the period of prescription. only when the dominant owner actually crosses or passes over the
Following the foregoing disquisition, the petitioner's claim that servient estate. Since the dominant owner cannot be continually
it had acquired the easement of right-of-way by prescription must perforce crossing the servient estate, but can do so only at intervals, the
fail.  As intimated above, possession is the fundamental basis of easement is necessarily of a discontinuous nature [Ronquillo v.
prescription, whether ordinary or extraordinary.  The petitioner never Roco].
acquired the requisite possession in this case.  Its use of that portion of the
subject property where it erected the wooden poles and transmission lines
was due merely to the tacit license and tolerance of the respondents.  As
Why Negative Easements Can Be Acquired by
such, it cannot be made the basis of the acquisition of an easement of right- Prescription Despite the Fact that they are Non-Apparent
of-way by prescription. While in general, negative easements cannot be acquired
by prescription since they are non-apparent, still the very existence
Who makes the notarial prohibition or who should of Art. 621 (insofar as it relates to negative easements), proves that
commence the exercise of the easement? in certain cases, and for purposes of prescription, there are negative
The dominant estate, thru its owner or usufructuary or easements that may indeed be considered “apparent,” not because
possessor or legal representative; in other words, any one who there are visible signs of their existence but because of the making
desires to establish the easement. of a notarial prohibition. The notarial prohibition makes apparent
what really is non-apparent.
Examples:
A and B are neighbors, and they own a party wall. If A 2. Continuous Non-Apparent and Discontinuous
makes an opening or window in the party wall, in 2002, B can Easements
close it at anytime before 2012. Because, if by that time the
window is still open, A has already acquired the easement of light Article 622. Continuous non-apparent easements, and
and view by prescription of 10 years, counted from the opening of discontinuous ones, whether apparent or not, may be acquired only by
virtue of a title.
the window since this is POSITIVE easement. (See Art. 668, par.
1). A window on a party wall is something allowed by a co-owner
to be done on his own property (owned in common) and may Article 623. The absence of a document or proof showing the
origin of an easement which cannot be acquired by prescription may be
therefore give rise to a positive easement or easement of
cured by a deed of recognition by the owner of the servient estate or by
sufferance.
a final judgment.
A and B are neighbors. On his building’s wall, A opened
a window beneath the ceiling joists to admit light in 2002. Even
The presumption is always against the existence of an
after 10 years (2012), B may still obstruct the light by constructing
easement for “property is always presumed free from any and all
on his own lot a building higher than A’s unless A makes a
encumbrances.” Hence, the law requires that the easement must be
NOTARIAL PROHIBITION prohibiting B from making the
acquired either by a title or by prescription. If the easement is
obstruction. If in 2002, A makes the prohibition, may B still make
acquired through prescription, necessarily there is no document
the obstruction in 2009?
evidencing its existence and the same may only be established in a
Yes, because it is only in 2012 (ten years after the
judicial proceeding through preponderance of evidence. If the
notarial prohibition) when A may be said to have acquired this
easement, however, is one which cannot be acquired through
NEGATIVE easement of light and view. After 2012, B may no
prescription and there is no document evidencing the same, or such
longer obstruct. [See Cortez v. Yu Tibo, 2 Phil. 24, which held that
document is no longer available for whatever reason, the absence
a window opened on one’s own wall and which does not extend
of such proof may be cured by a deed of recognition by the owner
over the neighbor’s land may give rise to a NEGATIVE easement,
of the servient estate. If the owner of the servient estate denies the
since the neighbor may be prohibited to do an act (building on his
existence of the easement or refuses to execute the deed of
own lot) which would be lawful to do if the easement did not exist.
recognition, the existence of the easement may nonetheless be
(See also Art. 616).].
established in a judicial proceeding through preponderance of
evidence.
Is the easement of light and view positive or negative?
In Sps. Mercader v. Sps. Bardilas, it was held that the
(BAR EXAM QUESTION)
road right of way is a discontinuous apparent easement in the
ANS.: It depends:
context of Article 622 of the Civil Code, which provides that
If made on one’s own wall and the wall does not extend
continuous non-apparent easements, and discontinuous ones,
over the neighbor’s land, the easement is NEGATIVE (because he
whether apparent or not, may be acquired only by virtue of title.
only does an act of ownership, and to create an easement, a
But the phrase with existing Right of Way in the TCT is not one of
prohibition is required. (Cortez v. Yu Tibo, 2 Phil. 24; Art. 668).
the modes of acquisition of the easement by virtue of a title.
If made on one’s own wall which extends over the
Acquisition by virtue of title, as used in Art. 622 of the Civil Code,
neighboring land (invading its atmospheric area); or if made on a
refers to "the juridical act which gives birth to the easement, such
PARTY WALL, the easement is created because of an act of
as law, donation, contract, and will of the testator."

Page 82 of 121

Velasco v. Cusi
Held: From her own allegations in her complaint, Bolton
Street cannot be a discontinuous easement as she claims it to be, which may
not be acquired by prescription.  Nonetheless, whether the mode of
acquisition of the easement that Bolton Street is, would be only by virtue of
title, as petitioner contends, this is not material or of any consequence, in
the present proceedings, once it indubitably appears as it does, from the
allegations of the complaint itself, that Bolton Street constituted an
easement of public highway on Lot No. 77, from which petitioner's lot was
taken, when the said bigger lot was originally registered.  It remained as
such legal encumbrance, as effectively as if it had been duly noted on the
certificate of title, by virtue of the clear and express provision of Section 39
of Act 496, it being admitted that at the time of the registration of Lot 77,
the public highway was already in existence or subsisting.  This fact erases
whatever cause of action petitioner may have to bring the complaint she
filed in the court a quo for quieting of title on a portion of the street which
she claims to be part of her lot, free from encumbrance of any kind.  The
Order complained of has only this legal postulate as its basis.  Nothing has
been mentioned therein on the acquisition by the City of Davao of the lot in
question by prescription, and a discussion of this matter as is found in
petitioner's brief would be entirely irrelevant.
Parol Evidence
Note that the existence of a title which serves as the basis
for the easement may be proven through oral testimonies of
witnesses as the same is not covered by the Statute of Frauds. Even
if the servitude is imposed upon a parcel of land and the obligation
arises from an oral contract, such agreement is not covered by the
Statute of Frauds considering that “not all agreements affecting
land must be put in writing to attain enforceability.” Under
paragraph 2(e) of Article 1403 of the New Civil Code, such
formality is required only of contracts involving leases for longer
than one year, or for the sale of real property or of an interest
therein
3. Sign of Existing Easement
Article 624. The existence of an apparent sign of easement
between two estates, established or maintained by the owner of both,
shall be considered, should either of them be alienated, as a title in
order that the easement may continue actively and passively, unless, at
the time the ownership of the two estates is divided, the contrary
should be provided in the title of conveyance of either of them, or the
sign aforesaid should be removed before the execution of the deed. This
provision shall also apply in case of the division of a thing owned in
common by two or more persons. (VIP)
This Article refers not to an existing sign but a sign of an
existing easement. It is the servitude between the two tenements
which must exist and not the sign thereof.
The mode of acquiring an easement under Article 624 is
a "legal presumption or apparent sign." Article 624 finds
application in situations wherein two or more estates were
previously owned by a singular owner, or even a single estate but
with two or more portions being owned by a singular owner.
Originally, there is no true easement that exists as there is only one
owner. Hence, at the outset, no other owner is imposed with a
burden. Subsequently, one estate or a portion of the estate is
alienated in favor of another person, wherein, in that estate or
portion of the estate, an apparent visible sign of an easement
exists. According to Article 624, there arises a title to an
easement of light and view, even in the absence of any formal
act undertaken by the owner of the dominant estate, if this
apparent visible sign, such as the existence of a door and
Page 83 of 121
windows, continues to remain and subsist, unless, at the time the
ownership of the two estates is divided, ( 1) the contrary should be
provided in the title of conveyance of either of them, or (2) the sign
aforesaid should be removed before the execution of the deed
[Garcia v. Santos].
For the acquisition of easement by title under Article 624
to apply, the following requisites must concur: (1) that there exist
an apparent sign of servitude between two estates; (2) that at the
time of the establishment of such sign, the ownership of the two
estates resides in one person; (3) that the sign of the easement be
established by the owner of both estates because the article will not
apply when the easement is established by a person different from
the owner; (4) that the ownership over the two estates is later on
divided, either by alienation or partition; and (5) that at the time of
division of ownership, nothing is stated in the document of
alienation or partition contrary to the easement nor is the sign of
the easement removed before the execution of the document. It will
thus be seen that under Article 624 the existence of the apparent
sign has for all legal purposes the same character and effect as a
title of acquisition of the easement.
Article 624 also applies to a situation where the two
estates were previously under a state of co-ownership but prior to
partition there exist an apparent sign of easement in one of the
estates. For example, “A” and “B” used to be co-owners of a parcel
of land. “A,” during the existence of the co-ownership constructed
a house on one-half portion of the co-owned property. On the
northeastern side of the house, there are windows and doors which
serve as passages for light and view. Subsequently, “A” and “B”
executed a deed of partition whereby the portion where the house
stands was allotted to “A” while the other half was allotted to “B.”
The existence of the doors and windows on the northeastern side of
the aforementioned house, is equivalent to a title, for the visible
and permanent sign of an easement is the title that characterizes its
existence. If nothing has been stated in the deed of partition
contrary to the easement and “A” did not renounce the use of the
windows and doors, either by stipulation or by actually closing
them permanently, the easement is created by title pursuant to
Article 624 upon the actual partition of the co-owned property.
While it is a general rule that a window or opening
situated on the wall of the dominant estate involves a negative
easement, and, thus, may only be acquired by prescription, tacked
from the time of the formal prohibition upon the proprietor of the
servient estate, it is not true that all windows or openings situated
on the wall of the dominant estate may only be acquired through
prescription. Aside from prescription, easements may likewise be
acquired through title. The term "title" does not necessarily mean a
document. Instead, it refers to a juridical act or law sufficient to
create the encumbrance. One such legal proviso which grants title
to an easement is found in Article 624 of the Civil Code [Garcia
v. Santos].
Privitization v. Legaspi
Held: From the foregoing, it can be inferred that when the owner
of two properties alienates one of them and an apparent sign of easement
exists between the two estates, entitlement to it continues, unless there is a
contrary agreement, or the indication that the easement exists is removed
before the execution of the deed.
In relation thereto, the Compromise Agreement, as approved by
the court, clearly states, among other things, that:
xxxx
2.0 That in consideration of the covenants hereunder stipulated,
plaintiff [Caruff] Development Corporation (CDC), hereby terminates the
instant case against defendants Philippine National Bank (PNB) and the
National Government/APT, and hereby:
2.1 Assigns, transfers and conveys in favor of defendant
National government thru APT, CDC's rights, title and interest in the
Maytubig property, situated at the back of the Legaspi Towers 300.
Condominium, consisting of seven (7) contiguous lots with an aggregate
area of 1,504.90 square meters, covered by the following Transfer
Certificate of Title, viz: TCT No. 23663 - Pasay City Registry; TCT No.
142497 - Metro Manila 1 Registry; TCT No. 142141 - Metro Manila 1
Registry; TCT No. 127649 - Metro Manila 1 Registry; x x x; all titles,
free from any and all liens and encumbrances, to be delivered, and the
necessary papers and documents to be turned over/executed to effect
transfer in favor of the National Government/APT, upon approval of this
Compromise Agreement;
x x x x.
Thus, when the subject property was assigned to the National
Government thru the APT, no easement arose or was voluntarily created
from the transfer of ownership, considering that the parties, more
particularly, Caruff, pledged that it was assigning, transferring, and
conveying the subject property in favor of the National Government thru
the APT "free from any and all liens and encumbrances.”
Compromise agreements are contracts, whereby the parties
undertake reciprocal obligations to resolve their differences, thus, avoiding
litigation, or put an end to one already commenced. [18] As a contract, when
the terms of the agreement are clear and explicit that they do not justify an
attempt to read into it any alleged intention of the parties; the terms are to
be understood literally, just as they appear on the face of the contract.
[19]
 Considering that Caruff never intended to transfer the subject property to
PMO, burdened by the generating set and sump pumps, respondent should
remove them from the subject property.
Garcia v. Santos
Held: Prior to the purchase of the subject property by the Sps.
Garcia in 1998, the subject property and its adjoining lot, i.e., Lot 1, were
both owned by singular owners, i.e., the Sps. Santos. On the subject
property, a one-storey house laden with several windows and openings was
built and the windows and openings remained open. Then on October 1998,
the subject property, together with the one-storey structure, was alienated in
favor of the Sps. Garcia, while the Sps. Santos retained the adjoining Lot 1.
Jurisprudence has recognized that Article 624 is an exception
carved out by the Civil Code that must be taken out of the coverage of the
general rule that an easement of light and view in the case of windows
opened in one's own wall is a negative easement that may only be acquired
by prescription, tacked from a formal prohibition relayed to the owner of
the servient estate.
As explained in Amor v. Florentino, the very decision in Cortes
v. YuTibo, while holding that the easement of light and view in situations
involving openings situated on the wall of the dominant estate is a negative
easement that may only be acquired by prescription tacked from formal
prohibition, "distinguishes that case from the situation foreseen in article
541 [now Article 624 of the Civil Code]."
In Cortes v. Yu-Tibo, there were two different owners of two
separate houses from the beginning, which is a situation different from that
presented under Article 624 where there is only one original owner of the
two structures. Cortes v. Yu-Tibo itself explicitly differentiates the situation
presented therein and the special situation contemplated under then Article
541 of the Spanish Civil Code, which is now Article 624 of the Civil Code,
wherein no formal act is needed to acquire easement of light and view:
x x x It is true that the supreme court of Spain, in its decisions of
February 7 and May 5, 1896, has classified as positive easements of lights
which were the object of the suits in which these decisions were rendered in
cassation, and from these it might be believed at first glance[,] that the
former holdings of the supreme court upon this subject had been overruled.
But this is not so, as a matter of fact, inasmuch as there is no conflict
between these decisions and the former decisions above cited.
In the first of the suits referred to, the question turned upon two
houses which had formerly belonged to the same owner, who established a
service of light on one of them for the benefit of the other. These properties
were subsequently conveyed to two different persons, but at the time of the
Page 84 of 121
separation of the property nothing was said as to the discontinuance of the
easement, nor were the windows which constituted the visible sign thereof
removed. The new owner of the house subject to the easement endeavored
to free it from the incumbrance, notwithstanding the fact that the easement
had been in existence for thirty-five years, and alleged that the owner of the
dominant estate had not performed any act of opposition which might serve
as a starting point for the acquisition of a prescriptive title. The supreme
court, in deciding this case, on the 7th of February, 1896, held that the
easement in this particular case was positive, because it consisted in the
active enjoyment of the light. This doctrine is doubtless based upon article
541 of the Code, which is of the following tenor: "The existence of
apparent sign of an easement between two tenements, established by the
owner of both of them, shall be considered, should one be sold, as a title for
the active and passive continuance of the easement, unless, at the time of
the division of the ownership of both tenements, the contrary should be
expressed in the deed of conveyance of either of them, or such sign is taken
away before the execution of such deed."
The word "active" used in the decision quoted in classifying the
particular enjoyment of light referred to therein, presupposes on the part of
the owner of the dominant estate a right to such enjoyment arising, in the
particular case passed upon by that decision, from the voluntary act of the
original owner of the two houses, by which he imposed upon one of them
an easement for the benefit of the other. It is well known that easements are
established, among other cases, by the will of the owners. (Article 536 of
the Code) It was an act which was, in fact, respected and acquiesced in by
the new owner of the servient estate, since he purchased it without making
any stipulation against the easement existing thereon, but, on the contrary,
acquiesced in the continuance of the apparent sign thereof. As is stated in
the decision itself, "It is a principle of law that upon a division of a
tenement among various persons—in the absence of any mention in the
contract of a mode of enjoyment different from that to which the former
owner was accustomed—such easements as may be necessary for the
continuation of such enjoyment are understood to subsist." It will be seen,
then, that the phrase "active enjoyment" involves an idea directly opposed
to the enjoyment which is the result of a mere tolerance on the part of the
adjacent owner, and which, as it is not based upon an absolute, enforceable
right, may be considered as of a merely passive character. Therefore, the
decision in question is not in conflict with the former rulings of the supreme
court of Spain upon the subject, inasmuch as it deals with an easement of
light established by the owner of the servient estate, and which continued in
force after the estate was sold, in accordance with the special provisions of
article 541 of the Civil Code.
Application of the Court's Decisions in Amor v. Florentino, and
Gargantos v. Tan Yanon to the Instant Case
The rulings of the Court in Amor v. Florentino and Gargantos v.
Tan Yanon, which involve situations that are almost completely analogous
to the instant case, are enlightening.
In these cases, like the case at hand, several properties were
once owned by a single owner, wherein in one of the properties, a structure
with windows and other openings was put up. Subsequently, the adjacent
property was transferred to a different owner, wherein a structure was built
thereon obstructing the windows and other openings found on the adjacent
lot.
In Amor v. Florentino, one Maria Florentino (Maria) owned a
house and a camarin or warehouse located in Vigan, Ilocos Sur. The house
had, on the north side, three windows on the upper storey, and a fourth one
on the ground floor. Through these windows, the house received light and
air from the adjacent lot where the camarin stood.
On September 6, 1885, Maria made a will, devising the house
and the land on which it was situated to Gabriel Florentino, one of the
respondents therein, and to Jose Florentino, father of the other respondents
therein. In said will, the testatrix also devised the warehouse and the lot
where it was situated to Maria Encarnacion Florentino (Maria
Encarnacion). Upon the death of the testatrix in 1892, nothing was said or
done by the devisees in regard to the windows in question. On July 14,
1911, Maria Encarnacion sold her lot and the warehouse thereon to the
petitioner therein, Severo Amor (Amor). In January 1938, therein Amor
destroyed the old warehouse and started to build instead a two-storey
house.
 In deciding the case, the Court first explained that easements
may be acquired either through title or prescription and enumerated the
different acts by which an easement may be acquired by virtue of title,
namely: (1) a deed of recognition by the owner of the servient estate; (2) a
final judgment; and (3) an apparent sign between two estates, established
by the owner of both, referring to Article 541 (now Article 624) of the Civil
Code. Citing decisions of the Supreme Tribunal of Spain, the Court
explained that "under article 541 [now Article 624] of the Civil Code, the
visible and permanent sign of an easement 'is the title that characterizes its
existence'
Applying Article 541 (now Article 624) of the Civil Code, the
Court held that the existence of the four windows constructed on the subject
house was an apparent sign of an easement of light and view, the
subsistence of which after the lots were segregated to different owners
created an easement of light and view by title without the need of any
formal notice to the servient estate. The Court explained that the moment of
the constitution of the easement of light and view, together with that of
altius non tollendi, was the time of the transfer of the other property
adjacent to the lot where the windows were located, which, in that case, was
the death of the original owner of both properties:
It will thus be seen that under article 541 the existence of the
apparent sign in the instant case, to wit, the four windows under
consideration, had for all legal purposes the same character and effect as a
title of acquisition of the easement of light and view by the respondents
upon the death of the original owner, Maria Florentino. Upon the
establishment of that easement of light and view, the concomitant and
concurrent easement of altius non tollendi was also constituted, the heir of
the camarin and its lot, Maria Encarnacion Florentino, not having objected
to the existence of the windows. The theory of article 541, of making the
existence of the apparent sign equivalent to a title, when nothing to the
contrary is said or done by the two owners, is sound and correct, because as
it happens in this case, there is an implied contract between them that the
easements in question should be constituted.
Analyzing article 541 further, it seems that its wording is not
quite felicitous when it says that the easement should continue. Sound
juridical thinking rejects such an idea because, properly speaking, the
easement is not created till the division of the property, inasmuch as a
predial or real easement is one of the rights in another's property, or jura in
re aliena and nobody can have an easement over his own property, nemini
sua res servit. In the instant case, therefore, when the original owner, Maria
Florentino, opened the windows which received light and air from another
lot belonging to her, she was merely exercising her right of dominion.
Consequently, the moment of the constitution of the easement of light and
view, together with that of altius non tollendi, was the time of the death of
the original owner of both properties. At that point, the requisite that there
must be two proprietors — one of the dominant estate and another of the
servient estate was — fulfilled.
Subsequently, in 1960, the Court rendered its Decision in the
case of Gargantos v. Tan Yanon.
In the said case, the late Francisco Sanz (Sanz) was the former
owner of a parcel of land with the buildings and improvements thereon,
situated in the poblacion of Romblon. He subdivided the lot into three (3)
and then sold each portion to different persons. One portion was purchased
by Guillermo Tengtio who subsequently sold it to Vicente Uy Veza.
Another portion, with the house of strong materials thereon, was sold in
1927 to Tan Yanon, the respondent therein. This house had on its
northeastern side, doors and windows overlooking the third portion, which,
together with the camarin and small building thereon, after passing through
several hands, was finally acquired by Juan Gargantos (Gargantos), the
petitioner therein. In 1955, Gargantos tore down the roof of the camarin and
constructed a combined residential house and warehouse on his lot.
The Court held that Article 538 (now Article 621) of the Civil
Code and the doctrine in Cortes v. Yu-Tibo that the easement of light and
view in situations involving openings situated on the wall of the dominant
estate is a negative easement that may only be acquired by prescription
tacked from formal prohibition "[is] not applicable herein because the two
estates, that now owned by petitioner, and that owned by respondent, were
formerly owned by just one person, Francisco Sanz."60
Page 85 of 121
The Court further explained that the existence of the doors and
windows on the northeastern side of the house was equivalent to a title, for
the visible and permanent sign of an easement was the title that
characterized its existence:
x x x It was Sanz who introduced improvements on both
properties. On that portion presently belonging to respondent, he
constructed a house in such a way that the northeastern side thereof extends
to the wall of the camarin on the portion now belonging to petitioner. On
said northeastern side of the house, there are windows and doors which
serve as passages for light and view. These windows and doors were in
existence when respondent purchased the house and lot from Sanz. The
deed of sale did not provide that the easement of light and view would not
be established. This then is precisely the case covered by Article 541,
O.C.C. (now Article 624, N.C.C.) which provides that the existence of an
apparent sign of easement between two estates, established by the
proprietor of both, shall be considered, if one of them is alienated, as a title
so that the easement will continue actively and passively, unless at the time
the ownership of the two estates is divided, the contrary is stated in the deed
of alienation of either of them, or the sign is made to disappear before the
instrument is executed. The existence of the doors and windows on the
northeastern side of the aforementioned house, is equivalent to a title, for
the visible and permanent sign of an easement is the title that characterizes
its existence (Amor vs. Florentino, 74 Phil., 403). It should be noted,
however, that while the law declares that the easement is to "continue" the
easement actually arises for the first time only upon alienation of either
estate, inasmuch as before that time there is no easement to speak of, there
being but one owner of both estates (Article 530, O.C.C., now Article 613,
N.C.C.).
From Amor v. Florentino and Gargantos v. Tan Yanon, read
together with Cortes v. Yu-Tibo, it has been jurisprudentially established
that, in a situation wherein Article 624 of the Civil Code applies, there
arises an easement if an apparent sign of the existence of an easement, i.e.,
the existence of windows and openings on the dominant estate, continues to
remain even after the transfer of the property to the new owner, unless such
apparent sign is removed or if there is an agreement to the contrary.
To reiterate, such is exactly the situation attendant in the instant
case. Lot 1 and the subject property were once owned by one owner, i.e.,
the Sps. Santos. On the subject property, a one-storey house with windows
and other openings that accept light and view from Lot 1, which was idle at
that time, was built. Subsequently, in 1998, the subject property was
alienated in favor of the Sps. Garcia. It is undisputed that the windows and
other openings on the one-storey house subsisted and remained open. It is
also not disputed that there was no agreement made by the parties
whatsoever to the effect that the windows and openings of the Sps. Garcia's
house should be closed or removed.
Hence, in accordance with Article 624 of the Civil Code, from
the time the Sps. Santos transferred the subject property to the Sps. Garcia,
there arose by title an easement of light and view, placing a burden on the
servient estate, i.e., Lot 1, to allow the Sps. Garcia's residence unobstructed
access to light and view, subject to certain limitations as will be discussed
hereunder.
The core of the RTC and CA, Special 18th Division's Decisions
dismissing the Sps. Garcia's Complaint centers on the argument that the
cases of Amor v. Florentino, and Gargantos v. Tan Yanon are not
applicable to the instant case because in the latter, "the previous owner only
made improvements on the [subject property] of [the Sps. Garcia] at the
time of the transfer of the alleged dominant estate to [the Sps. Garcia.] This
takes the instant case out of the factual milieu of Amor and Gargantos."63
According to the CA, Special 18th Division, "[t]he rulings in Amor and
Gargantos appear to be premised on the fact that the previous owner made
improvements on both properties prior to the transfer of one of these
properties."
After a close reading of Amor v. Florentino and Gargantos v.
Tan Yanon, the Court holds that the RTC and CA, Special 18th Division
were mistaken in not applying the aforesaid cases to the instant case.
First and foremost, the subject Civil Code provision dealt with
by these two cases, i.e., Article 624 (formerly Article 541) of the Civil
Code, merely states that what is involved in this particular situation is "an
apparent sign of easement between two estates."65
 There is nothing in the aforesaid provision that requires the
presence or establishment of structures or improvements on both estates at
the time the ownership of the two estates is divided. The conclusion of the
CA, Special 18th Division that Article 624 applies only when the (future)
servient estate has an improvement thereon at the time of the transfer of the
ownership of either or both of the estates finds no textual support. What the
law merely states is that there must be two estates that were once owned by
one owner, regardless of the existence of improvements in the (future)
servient estate. What law requires is that, at the time the ownership of the
estates is divided, there must be an apparent sign of easement that exists,
such as a window, door, or other opening, in the dominant estate.
As exhaustively explained by recognized Civil Law
Commentator, former CA Justice Eduardo P. Caguioa, the existence of an
easement of light and view under Article 624 is established as long as (1)
there exists an apparent sign of servitude between two estates; (2) the sign
of the easement must be established by the owner of both tenements; (3)
either or both of the estates are alienated by the owner; and (4) at the time
of the alienation nothing is stated in the document of alienation contrary to
the easement nor is the sign of the easement removed before the execution
of the document:
x x x In this case[,] the owner of two estates has established an
apparent sign of the easement between two estates. It is apparent inasmuch
as since it is the owner establishing it in his own property in favor of an
estate belonging to himself there is no easement but merely an exercise of
the right of ownership. Should, however, one or both of the estates be
alienated or after partition in case of a property owned in common, then
that sign established by the owner will constitute a title for the
establishment of the easement, both actively or passively, except in case the
contrary should be provided in the document of conveyance of either estate
or in case before the alienation is made the sign is removed by the owner.
Hence, in order that this article will apply[,] the following are the
requisites: (1) That there exist an apparent sign of servitude between two
estates; (2) That the sign of the easement be established by the owner of
both tenements because the article will not apply when the easement is
established by a person different from the owner; (3) That either or both of
the estates are alienated by the owner; and (4) That at the time of the
alienation nothing is stated in the document of alienation contrary to the
easement nor is the sign of the easement removed before the execution of
the document.66
It is evident that the prior existence of another structure or
building in the other estate, in addition to the apparent sign of easement
existing on the dominant estate, is not a requirement for the application of
Article 624. What is clear from the foregoing is that the hallmark of an
easement of light and view established by an apparent sign of easement
under Article 624 is the existence of an apparent sign of servitude between
two estates, such as a window, door, or any other opening, that was
established by the common owner of both estates prior to the division of
ownership of these estates.
Second, upon close reading of Amor v. Florentino and
Gargantos v. Tan Yanon, there is no holding whatsoever by the Court that
the application of Article 624 (formerly Article 541) is restricted to
situations wherein the servient estate previously contained improvements or
structures. The RTC and CA, Special 18th Division failed to explain the
rationale for making a differentiation as to situations wherein the servient
estate was idle at the time of the division of the ownership of the two
estates. Instead, the RTC and CA, Special 18th Division merely nitpicked
this singular factual difference and concluded, without sufficient
explanation, that the factual milieu of the instant case differs from those of
Amor v. Florentino and Gargantos v. Tan Yanon.
It must be stressed that the presence of a minor factual
difference does not preclude the application of judicial precedent. It must be
explained how the factual difference in a case makes the doctrine
established in the decided case inapplicable therein. In the instant case, the
cases of Amor v. Florentino and Gargantos v. Tan Yanon clearly and
plainly explain that there arises an easement if an apparent sign of the
existence of an easement, i.e., the existence of windows and openings on
the dominant estate, continues to remain even after the transfer of the
property to the new owner, without making any holding whatsoever that
there should have been a prior structure that was put up on the servient
estate. The fact that the existence of windows, doors, and other openings on
Page 86 of 121
the dominant estate is the apparent sign of an existing easement is not
hinged whatsoever on the presence of structures on the adjacent servient
estate. In short, the fact in the aforesaid cases that the servient estates
therein had existing structures prior to the division of ownership is not a
significant fact that is determinative of the holdings of the Court.
In fact, the Court notes that in Amor v. Florentino, the
improvement originally constructed on the servient estate, i.e., the
warehouse, was actually totally demolished and that, after the transfer of
ownership of the dominant estate, a new two-storey house was thereafter
built in its stead. This does not differ substantially from a situation wherein
new constructions are done in the servient estate that was previously
completely empty.
Further, in Gargantos v. Tan Yanon, the Court, in applying
Article 624 of the Civil Code, held that "[b]y reason of this easement,
petitioner cannot construct on his land any building."67 The Court did not
say that the petitioner therein was barred only from adding or increasing the
height of existing structures or improvements.
Hence, considering the foregoing discussion, the RTC and CA,
Special 18th Division committed an error in holding that the Sps. Garcia
failed to acquire an easement of light and view in the instant case. By virtue
of Article 624 of the Civil Code and applicable jurisprudence, the Court
holds that the Sps. Garcia have acquired an easement of light and view by
title despite the lack of any formal notice or prohibition made upon the
owner of the servient estate.
Fernandez v. Delfin
Held: Similarly, Article 624 applies in this case. The front
properties and the back properties were all previously owned by petitioners,
who created an apparent sign of an easement on the front properties when:
(1) they used a portion of the front properties to give the back properties
access to the national highway; and (2) they had it annotated on the front
properties' titles as an easement of right of way in favor of the back
properties. When the front properties were eventually transferred to the
Philippine National Bank, the bank did not raise any qualms or stipulated
against the easement of right of way or the annotations.57 Thus, when the
front properties were sold, respondents' titles bore the same annotations as
those of petitioners.58
To clarify, the easement of right of way was not constituted
when petitioners annotated it on their titles. However, when the front
properties were transferred to the Philippine National Bank, the apparent
signs of the easement-the path and the annotations-served as a title over the
easement. The title would not have been conferred if the contrary were so
provided in the deed of transfer, or if the path and annotations were
removed before the deed of transfer was executed. Here, there is no
showing that the Philippine National Bank stipulated against the easement.
Thus, it is bound to respect the easement.
The same goes for respondents. They were aware of the
easement as it was annotated on the Philippine National Bank's titles and on
the titles issued to them. They are thus presumed to have been informed
that petitioners use a portion of the front properties to access the national
highway. Yet, despite this knowledge, they still purchased the properties,
with no showing that they made any manifest objection to it at the time of
transfer.
Thus, a valid easement of right of way was constituted on the
front properties now owned by respondents.
C. RIGHTS AND OBLIGATIONS OF THE OWNERS OF
THE DOMINANT AND SERVIENT ESTATES
1. Use of the Easement
Article 626. The owner of the dominant estate cannot use the
easement except for the benefit of the immovable originally
contemplated. Neither can he exercise the easement in any other
manner than that previously established.
Article 626 presupposes the existence of course of a
dominant estate, otherwise the Article cannot apply. Easements
with a dominant estate are called easement appurtenant, without the
dominant estate, they are purely personal, and may thus be referred
to as easements in gross (here, there is merely a personal interest in
another’s land). Note, however, that a personal easement or an
easement in gross, precisely because it is an easement, is still real
property, not personal property.
2. Works for Use and Preservation
Article 627. The owner of the dominant estate may make, at
his own expense, on the servient estate any works necessary for the use
and preservation of the servitude, but without altering it or rendering
it more burdensome.
For this purpose, he shall notify the owner of the servient
estate, and shall choose the most convenient time and manner so as to
cause the least inconvenience to the owner of the servient estate.
Article 628. Should there be several dominant estates, the
owners of all of them shall be obliged to contribute to the expenses
referred to in the preceding article, in proportion to the benefits which
each may derive from the work. Any one who does not wish to
contribute may exempt himself by renouncing the easement for the
benefi t of the others. If the owner of the servient estate should make
use of the easement in any manner whatsoever, he shall also be obliged
to contribute to the expenses in the proportion stated, saving an
agreement to the contrary.
In the easement of right of way, he cannot increase the
agreed width of the path, nor deposit soil or materials outside of the
boundaries agreed upon (for these acts would be increasing the
burden), BUT he may allow OTHERS to use the path (this really
does NOT increase the burden) except if the contrary has been
stipulated [Valderrama v. North Negros Sugar Co].
3. Obligation Not to Impair the Servitude
Article 629. The owner of the servient estate cannot impair,
in any manner whatsoever, the use of the servitude. Nevertheless, if by
reason of the place originally assigned, or of the manner established for
the use of the easement, the same should become very inconvenient to
the owner of the servient estate, or should prevent him from making
any important works, repairs or improvements thereon, it may be
changed at his expense, provided he offers another place or manner
equally convenient and in such a way that no injury is caused thereby
to the owner of the dominant estate or to those who may have a right to
the use of the easement.
4. Right to Retain Ownership
Article 630. The owner of the servient estate retains the
ownership of the portion on which the easement is established, and
may use the same in such a manner as not to affect the exercise of the
easement.
Article 635. All matters concerning easements established
for public or communal use shall be governed by the special laws and
regulations relating thereto, and, in the absence thereof, by the
provisions of this Title.
D. MODES OF EXTINGUISHMENT OF EASEMENTS
Article 631. Easements are extinguished:
(1) By merger in the same person of the ownership of the
dominant and servient estates;
Page 87 of 121
(2) By non-user for ten years; with respect to discontinuous
easements, this period shall be computed from the day on which they
ceased to be used; and, with respect to continuous easements from the
day on which an act contrary to the same took place;
(3) When either or both of the estates fall into such condition
that the easement cannot be used; but it shall revive if the subsequent
condition of the estates or either of them should again permit its use,
unless when the use becomes possible, sufficient time for prescription
has elapsed, in accordance with the provisions of the preceding
number;
(4) By the expiration of the term or the fulfillment of the
condition, if the easement is temporary or conditional;
(5) By the renunciation of the owner of the dominant estate;
(6) By the redemption agreed upon between the owners of
the dominant and servient estates.
Article 632. The form or manner of using the easement may
prescribe as the easement itself, and in the same way. (547a)
Article 633. If the dominant estate belongs to several persons
in common, the use of the easement by any one of them prevents
prescription with respect to the others. (548)
1. Merger
The merger must be absolute, complete, not temporary.
Thus, if the owner of the servient estate buys the whole portion
affected, the merger is complete, and the easement is extinguished.
But if the portion bought is not the portion affected, the easement
naturally remains.
Example:
A, the dominant owner, sold a retro his estate to B, the
servient owner. Is the easement extinguished?
No, it is only suspended for the merger is merely
temporary. It revives when the property is redeemed. (See 3
Sanchez Roman 651).
The dominant estate was donated to the servient estate,
but it was stipulated that if the servient owner later marries X, the
property reverts to the dominant owner. Pending the resolutory
condition, the merger can be considered temporary, and the
easement is merely suspended. When the servient owner marries X,
the easement is revived. If no marriage takes place (as when X
dies), the easement really is extinguished.
The dominant estate was sold unconditionally (no right
of redemption) to the servient owner. Later, the dominant owner
bought his former estate. Still later, the dominant estate was sold to
another person X. Is the easement revived? ANS.: The absolute
sale of the dominant estate to the servient estate merged completely
and defi nitely the ownership of both estates in one person.
Therefore, the easement was not merely suspended; it was totally
extinguished. When the former dominant owner bought back his
estate, it was not because of the exercise of the right of
conventional redemption. It was a new sale. No easement was
created by virtue of the sale. Therefore, there was no easement that
could be revived upon the sale of the property to X.
NOTE: The example above presupposes that the
easement was a VOLUNTARY one not a legal easement.
When a person acquires only a part interest in the
servient estate it cannot be said that ownership of the dominant and
servient estates has been merged in the same person [Cabacungan
v. Corrales]
Sps. Salimbangon v. Sps. Tan
 Held: Consequently, when the owner of Lots D and E also
became the owner of Lot B, the easement of right of way on Lot B became
extinct by operation of law. The existence of a dominant estate and a
servient estate is incompatible with the idea that both estates belong to the
same person.
Secondly, there is no question that when the heirs realized that it
was not fair to take strips of 1.5 meters from each of Lots A, D, and E for
the easement of right of way when these lots were already small, the heirs
executed a "Cancellation of Annotation of Right of Way, etc." that
cancelled the easement of right of way they earlier established on Lots A,
D, and E and in its place imposed a 3-meter wide easement of right of way
solely on Lot B
Although the "cancellation" document did not say so, it was
implicit that the changed location of the easement cancelled not only the
1.5-meter strip of easement imposed on Lot A of the Salimbangons but also
their right to use the new 3-meter easement alley that lay entirely on Lot B.
Strictly speaking, if the Salimbangons insist that their right as dominant
estate under the original partition agreement remains, then that would be
partly on a 1.5-meter strip of their own Lot A and partly on the equivalent
1.5-meter strip on the side of Lot B, not on the new 3-meter alley
established entirely on Lot B.
The point is that, obviously, in establishing the new easement of
right of way, the heirs intended to abandon the old one. Since this 3-meter
alley on Lot B directly connected Lots D and E to the street, it is also
obvious that only the latter lots were its intended beneficiary. And, with the
ownership of Lots B, D, and E now consolidated in a common owner,
namely, the Tans, then the easement of right of way on Lot B may be said
to have been extinguished by operation of law.
2. Non-User
Non-user, as a mode of extinguishment of easement,
presupposes that the easement was used but later abandoned. For
easement to be extinguished under this mode, it is necessary that
the non-user must have lasted for a period of ten (10) years. The
computation of the 10-year period of extinctive prescription shall
depend on whether the easement is continuous or discontinuous, as
follows:
(a) If the easement is discontinuous, the 10-year period
is computed from the day on which the easement
was not used.94 Since the use of the easement
depends upon the acts of man, if no such act has
been executed for a period of ten (10) years the
easement is extinguished.
(b) If the easement is continuous, in which case the use
of the easement does not depend upon the acts of
man, the 10-year period is counted from the day on
which an act contrary to the easement took place.
For example, if the owner of the lower estate
constructed a series of dikes to prevent the flow of
excess waters coming from the higher estates, the
legal easement of drainage is extinguished ten (10)
years after the construction of the dikes.
If the dominant estate is under a state of co-ownership,
the use of the easement by any of the co-owners will prevent the
running of the 10-year period of extinctive prescription by non-
user. This must be the rule since each co-owner of property which
is held pro indiviso has the right to exercise his rights over the
whole property and may use and enjoy the same with no other
limitations other than that he shall not injure the interests of his co-
owners. In addition, since co-ownership is a form of trust, the
possession by a co-owner of the entire dominant estate is
considered for the benefit of all.
Page 88 of 121
3. Impossibility of Use or Bad Condition
This merely suspends (unless extinguishment is caused
by the necessary period for non-user) since possibility of use
revives the easement.
4. Expiration of the Term or Fulfillment of the
Condition
Example: An easement was agreed upon to last till the
owner of the dominant easement becomes a lawyer. When the
condition is fulfilled, the easement ceases.
5. Renunciation by the Owner of the Dominant
Estate
Renunciation must be express, clear, specifi c (otherwise
it might be confused with non-user). This is particularly true for
discontinuous easements. While it is true that a legal easement for
the benefit of private individuals may be waived, still the mere fact
that it has not been used at all cannot give rise to the conclusion
that there has been a waiver [Francisco v. Paez].
6. Redemption
The redemption being referred to in paragraph 6 of
Article 631 of the New Civil Code is the release of the servient
estate from the servitude upon agreement of the owners of both
estates and upon payment by the owner of the servient estate of the
corresponding consideration to the owner of the dominant estate.
This is voluntary redemption, existing because of an
express stipulation. The stipulation may provide conditions under
which the easement would be extinguished.
7. Other Causes for Extinguishment of Easement
Other causes are:
(a) Expropriation of the servient estate;
(b) Permanent impossibility to make use of the
easement;
(c) Annulment, rescission, or cancellation of the title
that constituted the easement;
(d) Abandonment of the servient estate;
(e) Resolution of the right of the grantor to create the
easement (as when there is redemption of the
property sold a retro because of the exercise of the
right of conventional redemption) (See Art. 1618);
(f) Registration of the servient estate as FREE, that is,
although the servient estate was registered under the
Torrens system, the easement thereon was not
registered (Sec. 39, Act 496), unless there is a
stipulation or actual knowledge of the existence of
the easement on the part of the transferee (Mendoza
v. Rosel, 74 Phil. 87; Santos v. Reyes, [CA] 40 No.
15, p. 3140; Laureana A. Cid v. Irene P. Javier, et
al.);
(g) In the case of the legal easement of right of way, the
opening of an adequate outlet to the highway
extinguishes the easement, if the servient owner
makes a demand for such extinguishment.
NOTE: This method of extinguishment, a special one, is
expressly mentioned in the Code, insofar as the legal easement of
right of way is concerned.
Tanedo v. Bernad
 Held: As can be seen from the above provisions, the alienation
of the dominant and servient estates to different persons is not one of the
grounds for the extinguishment of an easement. On the contrary, use of the
easement is continued by operation of law. Article 624 of the Civil Code
provides:
xxx
In the instant case, no statement abolishing or extinguishing the
easement of drainage was mentioned in the deed of sale of Lot 7501-A to
Eduardo Tanedo. Nor did Antonio Cardenas stop the use of the drain pipe
and septic tank by the occupants of Lot 7501-A before he sold said lot to
Eduardo Tanedo. Hence, the use of the septic tank is continued by operation
of law. Accordingly, the spouses Romeo and Pacita Sim, the new owners of
the servient estate (Lot 7501-B), cannot impair, in any manner whatsoever,
the use of the servitude.
E. LEGAL EASEMENTS IN GENERAL
Article 634. Easements imposed by law have for their object
either public use or the interest of private persons (VIP).
Article 636. Easements established by law in the interest of
private persons or for private use shall be governed by the provisions
of this Title, without prejudice to the provisions of general or local laws
and ordinances for the general welfare.
These easements may be modified by agreement of the
interested parties, whenever the law does not prohibit it or no injury is
suffered by a third person.
The following are the different legal easements:
(a) the easements relating to waters
(b) right of way
(c) party wall
(d) light and view
(e) drainage
(f) intermediate distances
(g) easement against nuisance
(h) lateral and subjacent support
F. EASEMENTS RELATING TO WATERS
1. Natural Drainage of Lands
Article 637. Lower estates are obliged to receive the waters
which naturally and without the intervention of man descend from the
higher estates, as well as the stones or earth which they carry with
them.
The owner of the lower estate cannot construct works which
will impede this easement; neither can the owner of the higher estate
make works which will increase the burden. (552)
An easement exists when, based on the physical
condition of two estates, waters descend naturally and without the
intervention of man from a higher estate (the dominant estate) to a
lower estate (the servient estate). This is called “easement of
drainage of waters [Ongsiako v. Ongsiako]. In this kind of
easement, the lower estate is obliged to receive the waters which
naturally and without the intervention of man fl ow from the higher
estates, as well as the stones or earth which they carry with
them.103 Such being the case, the owner of the lower estate may
not construct works, such as dikes, walls or hedges, which will
block or impede the flow of waters, unless he provides an
alternative method of drainage. The owner of the higher estate, in
Page 89 of 121
turn, may not construct works which will increase the burden or
increase the natural flow.
The owner of the lower estate cannot construct works
which will impede this natural flow, unless he provides an
alternative method of drainage; neither can the owner of the higher
estate make works which will increase this natural flow. As
worded, the provision imposes a natural easement upon the lower
estate to receive the waters which naturally and without the
intervention of man descend from higher states. However, where
the waters which flow from a higher state are those which are
artificially collected in man-made lagoons, any damage occasioned
thereby entitles the owner of the lower or servient estate to
compensation [Remman Enterprises, Inc. v. Court of Appeals].
Ermino v. Golden Village
Held: Thus, the bulldozing and construction works done by E.B.
Villarosa, not to mention the denudation of the vegetation at the Hilltop
City Subdivision, made Alco Homes and Golden Village's obligation, as
lower estates, more burdensome than what the law contemplated. Lower
estates are only obliged to receive water naturally flowing from higher
estates and such should be free from any human intervention. In the
instant case, what flowed from Hilltop City Subdivision was not water that
naturally flowed from a higher estate. The bulldozing and flattening of the
hills led to the softening of the soil that could then be easily carried by the
current of water whenever it rained. Thus, Alco Homes and Golden Village
are not anymore obligated to receive such waters and earth coming from
Hilltop City Subdivision.
The Court also agrees with the CA's observation that the
concrete fence cannot be considered as an impediment to Golden Village's
obligation to receive the water, because if only naturally flowing water,
without any human intervention, cascaded down from the Hilltop City
Subdivision, the concrete fence would not pose as an obstruction to its
flow. In this regard, the closure of the steel grille gate was effected even
before the construction made by E.B. Villarosa.
Vergara v. Sonkin
Held: In the case at bar, it is undisputed that the Sonkin property
is lower in elevation than the Vergara property, and thus, it is legally
obliged to receive the waters that flow from the latter, pursuant to Article
637 of the Civil Code. This provision refers to the legal easement pertaining
to the natural drainage of lands, which obliges lower estates to receive from
the higher estates water which naturally and without the intervention of
man descends from the latter, i.e., not those collected artificially in
reservoirs, etc., and the stones and earth carried by the waters,35 viz.:
Art. 637. Lower estates are obliged to receive the waters which
naturally and without the intervention of man descend from the higher
estates, as well as the stones or earth which they carry with them.
The owner of the lower estate cannot construct works which will
impede this easement; neither can the owner of the higher estate make
works which will increase the burden.36
In this light, Sps. Sonkin should have been aware of such
circumstance and, accordingly, made the necessary adjustments to their
property so as to minimize the burden created by such legal easement.
Instead of doing so, they disregarded the easement and constructed their
house directly against the perimeter wall which adjoins the Vergara
property, thereby violating the National Building Code in the process,
specifically Section 708 (a) thereof which reads:
Section 708. Minimum Requirements for Group A Dwellings.
(a) Dwelling Location and Lot Occupancy.
The dwelling shall occupy not more than ninety percent of a
corner lot and eighty percent of an inside lot, and subject to the provisions
on Easement on Light and View of the Civil Code of the Philippines, shall
be at least 2 meters from the property line.
Hence, the CA correctly held that while the proximate cause of
the damage sustained by the house of Sps. Sonkin was the act of Sps.
Vergara in dumping gravel and soil onto their property, thus, pushing the
perimeter wall back and causing cracks thereon, as well as water seepage,
the former is nevertheless guilty of contributory negligence for not only
failing to observe the two (2)-meter setback rule under the National
Building Code, but also for disregarding the legal easement constituted over
their property. As such, Sps. Sonkin must necessarily and equally bear their
own loss.
2. Easement Along Riparian Banks
Article 638. The banks of rivers and streams, even in case
they are of private ownership, are subject throughout their entire
length and within a zone of three meters along their margins, to the
easement of public use in the general interest of navigation, floatage,
fishing and salvage.
Estates adjoining the banks of navigable or floatable rivers
are, furthermore, subject to the easement of towpath for the exclusive
service of river navigation and floatage.
If it be necessary for such purpose to occupy lands of private
ownership, the proper indemnity shall first be paid. (553a)
This is an easement on riparian property, banks of rivers
and streams.
In the case of Unson v. Lacson, the Supreme Court held
that “the withdrawal by the City of Manila of a public alley, and
the city’s subsequent leasing of the same to a private party, thus
rendering it impossible for the public to use the zone of three
meters along the estero, for purposes of navigation, floatage, fi
shing, and salvage, is contrary to Art. 638 of the new Civil Code.
The authority of local governments to enact municipal ordinances
is subject to the general limitation that the same shall not be
repugnant to law.”
3. Easement Concerning a Dam
Article 639. Whenever for the diversion or taking of water
from a river or brook, or for the use of any other continuous or
discontinuous stream, it should be necessary to build a dam, and the
person who is to construct it is not the owner of the banks, or lands
which must support it, he may establish the easement of abutment of a
dam, after payment of the proper indemnity. (554)
4. Easements for Drawing Water or for Watering
Animals
Article 640. Compulsory easements for drawing water or for
watering animals can be imposed only for reasons of public use in
favor of a town or village, after payment of the proper indemnity. (555)
5. Easements for Drawing Water and Watering
Animals
Article 641. Easements for drawing water and for watering
animals carry with them the obligation of the owners of the servient
estates to allow passage to persons and animals to the place where such
easements are to be used, and the indemnity shall include this service.
(556)
6. Easement of Aqueduct
Article 642. Any person who may wish to use upon his own
estate any water of which he can dispose shall have the right to make it
flow through the intervening estates, with the obligation to indemnify
their owners, as well as the owners of the lower estates upon which the
waters may filter or descend.
Page 90 of 121
Article 643. One desiring to make use of the right granted in
the preceding article is obliged:
(1) To prove that he can dispose of the water and that it is
sufficient for the use for which it is intended;
(2) To show that the proposed right of way is the most
convenient and the least onerous to third persons;
(3) To indemnify the owner of the servient estate in the
manner determined by the laws and regulations. (558)
Article 644. The easement of aqueduct for private interest
cannot be imposed on buildings, courtyards, annexes, or outhouses, or
on orchards or gardens already existing. (559)
Article 645. The easement of aqueduct does not prevent the
owner of the servient estate from closing or fencing it, or from building
over the aqueduct in such manner as not to cause the latter any
damage, or render necessary repairs and cleanings impossible. (560)
Article 646. For legal purposes, the easement of aqueduct
shall be considered as continuous and apparent, even though the fl ow
of the water may not be continuous, or its use depends upon the needs
of the dominant estate, or upon a schedule of alternate days or hours.
Articles 642 to 646 deal with the legal (compulsory)
easement of aqueduct, the right to make water flow thru
intervening estates in order that one may make use of said waters.
Note that the existence of the easement of RIGHT OF WAY does
not necessarily include the easement of aqueduct. Hence, in San
Rafael Ranch Co. v. Rogers Co., it was held that the right to dig
trenches and to lay pipelines for the conducting of water is not
included in a contract granting a right of way (the rights given
being merely those of INGRESS or EGRESS to and from the lot
involved).
Salazar v. Gutierrez
Held: Specifically the appellate court held that there is no
evidence to show that the petitioner has complied with the three requisites
laid down in Article 643 in order to entitle her to claim a legal easement of
aqueduct under Article 642.  It bears repeating that the finding thus made,
although apparently factual in character, is premised upon supposed
absence of evidence, and therefore is reviewable by this Court if the
premise is clearly contradicted by the record or unjustified upon other
considerations which logically lead to a different conclusion, but which the
decision under review did not take into account.
On the first requisite of Article 643 - that the petitioner must
prove that he can dispose of the water and that it is sufficient for the use for
which it is intended - there is the statement of the trial court that the
disputed canal had been in existence since the Spanish regime, or at least
prior to the original registration of Lot 433 in 1923, and that of the Court of
Appeals itself confirmatory of this second alternative finding.  If, as thus
found, the petitioner had been using water from Sapang Tuyo to irrigate Lot
436 since she acquired said lot in 1949, as the municipality
of Balanga had been doing before her, and that such use had lasted
continuously for at least thirty years, it is a fair presumption that she had a
right to do so and that the water she could dispose of was sufficient for the
purpose.  Indeed it would be a superfluity to require her to produce a permit
from the proper authorities, for even without it the right had already
become vested both under Article 194 of the Spanish Law of Waters and
under Article 504 of the Civil Code, which respectively state:
"ART. 194.  Any person who has enjoyed the use of public
waters for a term of twenty years without objection on the part of the
authorities or of any third person, shall continue in its enjoyment, even
though he may not be able to show that he secured proper permission."
"ART. 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."
The third requisite of Article 643 of the Civil Code refers to the
matter of indemnity to the owner of the servient estate.  As correctly
pointed out by the petitioner, it would be nigh impossible now to present
actual proof that such indemnity has been paid, considering the number of
years that have elapsed since the easement had first come into existence and
the subsequent changes in ownership of the lots involved.  It stands to
reason, however, that if the easement had continued for so long - in fact, not
only before Lot 433 Was registered in 1923 bat for thirty years thereafter,
until cut off by the respondents in 1953 - the legal requirement in question
must have been complied with.
The other requisite of Article 643 is that "the proposed right of
way is the most convenient and the least onerous to third persons."
The Court of Appeals stated that the petitioner has not established this fact,
and that "her own evidence reveals that her lot is abutting Sapang Tuyo on
its southern boundary, wherefrom she can easily and directly draw the
water necessary to irrigate her land."  This statement is
an oversimplication.  Proximity or abutment of a piece of land to a stream
does not necessarily carry with it the conclusion that water may
conveniently be drawn directly therefrom for irrigation.  In the first place,
the petitioner has pointed out in her brief, without contradiction by the
respondents, that the portion of her land which abuts Sapang Tuyo is a
precipice.  Secondly, the trial court made an ocular inspection of the
premises and observed that the eastern and northeastern portions of Lot 436
are lower than the southwestern, western and northwestern (the point
where Lot 436 adjoins Lot 433) portions of the same.  Finally, it would
appear from the observation made by the same court that the demolished
canal is part of a system of conduits used to irrigate the lands of the
petitioner and the respondents as well as the surrounding estates belonging
to other owners, and that this system of conduits is of a permanent
nature.  The trial court's description bears repeating:
"At the ocular inspection conducted on September 22, 1953, it
was found that the eastern and northeastern portions of Lot No. 436 are
lower than the southern, western and northwestern portions of the same;
that about one-fourth (1/4) only of the lot is planted to palay and
this palay is yellowish, scarce and could hardly merit attention to produce
any substantial quantity of palay; that this palay is planted in the eastern
portion of the same; that the palay planted on the land of defendant
Gutierrez and on the lot east of the land of the plaintiff is luxuriant, green
and had all the earmarks of producing a good harvest; that the 'pinitak' on
the northwestern portion of the land of the plaintiff is higher than the rest of
the land; that on this portion is found a canal about one and a half (1-1/2)
meters deep which canal runs south and parallel to the boundary line of Lot
436 owned by the plaintiff and Lot No. 435 and is one and a half (1-1/2)
meters from this boundary; that along the southern boundary of Lot No. 433
that separates it from Lot No. 436 is a 'minangon' or a dike and water flaws
continuously from one 'pinitak' to another of said Lot No. 433 up to a point
between points '15' and '14' of said lot as shown on Exhibit 'A' x x x that
this water passes from one 'pinitak' to another through openings made on
the 'pilapils' or small dikes that separate the several 'pinitaks' on this Lot
No. 433; that the western side of the canal that was demolished is located
on the boundary line of Lots Nos. 433 and 434 and this boundary line is
higher and some trees are found therein; that the new canal x x x is short
and the old canal from point '131' to about point '7' of Lot No. 433 on this
exhibit is still in use although it is not clean; that Lot No. 434 owned by
Antonio Mendoza is irrigated by two (2) pipes coming from Lot No. 431
and by a canal that comes from Lot No. 431 and by a canal that comes from
the main irrigation canal located on the boundary line of these two (2) lots
431 and 434; that this main irrigation canal is the canal that goes through
Lot No. 443 x x x which canal ends farther east of Lot 448 x x x; that this
canal begins from the dam farther west of these Lots Nos. 431, 434, 433
and 436.
x x x
The boundary line of the two (2) lots Nos. 433 and 434 shows,
that it is a 'minangon', a dike.  It is extraordinarily high.  From this
situation, it can be concluded that the canal along this boundary line must
be big.  To irrigate the southern part of Lot No. 433 would not require a big
and permanent canal if the same was used to irrigate the southern part of
Page 91 of 121
Lot No. 433.  Canal marked 'W' which is a substitute canal is small and
shallow.  From the remnants of the old and demolished canal, it is safe to
assume that the canal has been in existence for a long time as shown by
some big trees on the high 'minangon'.  If it were to water only the southern
part of the lot as claimed by the defendants, it would have been the same in
size as the new canal marked 'W' on Exhibit 'A.' The construction of the
new canal marked 'W' on the exhibit is a feeble attempt to justify the
alleged purpose of the old canal, but this attempt at coverage is laid bare by
the existence of the old canal that crossed Lot No. 433 x x x.  Considering
that the southern portion of said lot is lower than the rest of the same, the
Court believes that the openings on the dike of the old canal would be
sufficient to let water flow to the southern portions of this lot.  The western
portion of this lot could have been watered from the old canal ('X') or from
the existing canal ('Z') on Exhibit 'A'.  That being so, there is only one
explanation why the old canal ('X') is in existence and that is for the use of
Lot No. 436 and other lots farther east of Lot No. 436."
It is a reasonable conclusion from the foregoing that the
demolished canal supplying water to Lot 436 of the petitioner was merely
an extension of the system of conduits established long ago, considering
that in view of the topography of the area and the proximity of the said lot
to the main dike in Lot 433 it was more convenient to make the connection
therewith than to draw water directly from Sapang Tuyo.  Article 118 of the
Spanish Law of Waters allows the creation of a compulsory easement of
aqueduct for the purpose of establishing or extending an irrigation system,
and there is nothing to the contrary in the Civil Code.
In any case the respondents are hardly in a position to avail of
the registration of Lot 433 in 1923 without the corresponding registration of
the easement on the title as an excuse to summarily terminate it thirty years
thereafter.  The original registered owner allowed the easement to continue
in spite of such non?registration:  the least that can be said is that he either
recognized its existence as a compulsory servitude on his estate or
voluntarily agreed to its establishment and continuance.  And the
respondent Guillermo Gutierrez, as the successor-in-interest to the said
owner by inheritance, is not an innocent third person who could plead the
absence of annotation on the title.  Not only was he aware of the existence
of the easement when he inherited the property in 1927, but he likewise
allowed it to continue for twenty-six years after he acquired title.  He is
bound both by the act of his predecessor and by his own.
5. Construction of a Stop Lock or Sluice Gate
Article 647. One who for the purpose of irrigating or
improving his estate, has to construct a stop lock or sluice gate in the
bed of the stream from which the water is to be taken, may demand
that the owners of the banks permit its construction, after payment of
damages, including those caused by the new easement to such owners
and to the other irrigators. (562)
6. Drainage of Buildings
Article 674. The owner of a building shall be obliged to
construct its roof or covering in such manner that the rain water shall
fall on his own land or on a street or public place, and not on the land
of his neighbor, even though the adjacent land may belong to two or
more persons, one of whom is the owner of the roof. Even if it should
fall on his own land, the owner shall be obliged to collect the water in
such a way as not to cause damage to the adjacent land or tenement.
(586a)
Article 675. The owner of a tenement or a piece of land,
subject to the easement of receiving water falling from roofs, may build
in such manner as to receive the water upon his own roof or give it
another outlet in accordance with local ordinances or customs, and in
such a way as not to cause any nuisance or damage whatever to the
dominant estate. (587)
Article 676. Whenever the yard or court of a house is
surrounded by other houses, and it is not possible to give an outlet
through the house itself to the rain water collected thereon, the
establishment of an easement of drainage can be demanded, giving an
outlet to the water at the point of the contiguous lands or tenements
where its egress may be easiest, and establishing a conduit for the
drainage in such manner as to cause the least damage to the servient
estate, after payment of the proper indemnity. (588)
A person should let rain water FALL on his own land,
and not on the adjacent land, even if he be a co-owner of the latter.
Rain water must be COLLECTED (Art. 674), instead of just being
allowed to drift to the adjacent or lower land.
In Purruganan v. Paredes, when the lot of Emilio
Purugganan was registered under the Torrens system, there was an
express recognition in the Decree of Registration that Purugganan’s
lot was subject to an easement of drainage over a portion of said
lot, 8 1/2 meters long, and one meter wide so that the rain water
coming from the roof of a building to be constructed on the
adjoining lot would fall into the land of Purugganan. The easement
was thus in favor of the adjoining lot belonging to Felisa Paredes.
Later, Paredes constructed a building with a roof protruding over
the lot of Purugganan. This was over the objection of Purugganan.
The Court held that Paredes had no such right to construct a
protruding roof. The encumbrance is not the roof itself (hence the
roof of Paredes should not protrude over the adjoining lot) but the
falling of the rain water inside Purugganan’s land. The distances
prescribed in the Decree therefore did not refer to the protrusion of
the width and length of the roof, but to the distance of the rain
water falling on the adjacent lot. The roof of Paredes must
therefore be reconstructed.
7. Provisions on Easements of Waters Prevail Over
Special Laws
Article 648. The establishment, extent, form and conditions
of the servitudes of waters, to which this section refers, shall be
governed by the special laws relating thereto insofar as no provision
therefor is made in this Code. (563a)
G. EASEMENT OF RIGHT OF WAY
1. Requisites
Article 649. The owner, or any person who by virtue of a
real right may cultivate or use any immovable, which is surrounded by
other immovables pertaining to other persons and without adequate
outlet to a public highway, is entitled to demand a right of way through
the neighboring estates, after payment of the proper indemnity.
Should this easement be established in such a manner that
its use may be continuous for all the needs of the dominant estate,
establishing a permanent passage, the indemnity shall consist of the
value of the land occupied and the amount of the damage caused to the
servient estate.
In case the right of way is limited to the necessary passage
for the cultivation of the estate surrounded by others and for the
gathering of its crops through the servient estate without a permanent
way, the indemnity shall consist in the payment of the damage caused
by such encumbrance.
This easement is not compulsory if the isolation of the
immovable is due to the proprietor’s own acts. (VIP)
Article 650. The easement of right of way shall be
established at the point least prejudicial to the servient estate, and,
insofar as consistent with this rule, where the distance from the
dominant estate to a public highway may be the shortest.
Page 92 of 121
This is the easement or privilege by which one person or
a particular class of persons is allowed to pass over another’s land,
usually thru one particular path or line. The term “right of way,”
upon the other hand, may refer either to the easement itself, or
simply, to the strip of land over which passage can be done.
Thus, to be conferred a legal easement of right of way
under Article 649, the following requisites must be complied with:
(a) the property is surrounded by other immovables and
has no adequate outlet to a public highway;
(b) proper indemnity must be paid;
(c) The isolation is not the result of the owner of the
dominant estate's own acts;
(d) the right of way claimed is at the point least
prejudicial to the servient estate; and
(e) to the extent consistent with the foregoing rule, the
distance from the dominant estate to a public
highway may be the shortest. The onus of proving
the existence of these prerequisites lies on the owner
of the dominant estate [Valdez v. Tabisula].
In AMA Land v. Wack Wack Residents’ Association, the
Court cited an additional requisite: that the right of way must be
absolutely necessary for the normal enjoyment of the dominant
estate by its owner. There must be a real, not fictitious or artificial,
necessity for the right of way, and the right cannot be claimed
merely for the convenience of the owner of the enclosed estate.
However, in Reyes v. Ramos, necessity may not be specifically
included in the requisites for the grant of compulsory easement
under the Civil Code, however, this goes into the question of “least
prejudice.” An easement of right of way imposes a burden on a
property and limits the property owner’s use of that property. The
limitation imposed on a property will be burdened. Thus, when the
applicant for a compulsory grant of right away is not yet using her
property, which is presently tenanted, and the application for the
grant of right of way is for “future purposes,” the Court ruled that
there is still no necessity for an easement of right of way because
there is no immediate and imperative need for the construction of a
right of way as the dominant estate and its surrounding properties
remain as agricultural lands under tenancy.
In the case of Locsin v. Climaco, it was held that the onus
or burden of proof is upon the owner of the dominant estate to
show by specific averments in his complaints the existence of the
requisites or pre-conditions enumerated. Incidentally, the Sugar
Limitation Law (Act 4166) as amended, does not grant the Central
the right to establish a right of way on the lands of adherent
planters. It would appear from its title and declaration of policy that
Act 4166 was enacted solely for the purpose of limiting and
allocating the production of sugar in the Philippines, as well as
regulating the processing and marketing thereof.
When the court says that an easement exists, it is not
creating one (hence, there are no judicial easements); it merely
declares the existence of an easement created either by law or by
the parties or testator [La Vista Association v. Court of Appeals].
a. Requirement of Isolation
The estate need not be totally landlocked as the isolation
of the dominant estate is also dependent on the particular need of
the dominant owner. What is important to consider is whether or
not a right of way is necessary to fill a reasonable need therefor by
the owner. Thus, if the passageway consists of an “inaccessible
slope or precipice,” it is as if there is no passageway, that is, one
that can sufficiently fulfill the dominant owner’s necessities,
although by the existence of that passageway the property cannot
be truly said that the property is isolated. So also, while an existing
right of way may have proved adequate at the start, the dominant
owner’s need may have changed since then, for which Article 651
of the Code allows adjustments as to width [Costabella v. Court of
Appeals].
An owner cannot, by his own act, isolate his property
from a public highway and then claim an easement of way through
an adjacent estate. In short, the claimant of a right of way must not
himself procured the isolation of his property [Francisco v. IAC].
According to the last paragraph of Article 649, the “easement is not
compulsory if the isolation of the immovable is due to the
proprietor’s own acts.” On that matter, the owner of the dominant
estate is bound by his predecessor-in-interest’s act of causing the
isolation of her property [Reyes v. Valentin]. Thus, when the
claimant of a right of way had already been granted an adequate
access to the public highway through another estate but the same
was no longer in use because he himself had closed it off by
erecting a stonewall on his lot at the point where such passageway
began, he cannot demand for a compulsory right of way in an
alternative location [Dionsio v. Ortiz].
However, the mere fact that the purchaser of a parcel of
land knew that the property he was buying was already surrounded
by other immovables leaving him no adequate ingress or egress to
a public highway cannot prevent him from demanding later on a
compulsory right of way. In Williams v. Zerda, the owner of the
servient estate opposed the application of the dominant estate for a
compulsory grant of a right of way on the ground that the isolation
of the dominant estate was attributable to the applicant’s own acts.
They pointed out that when the applicant purchased the dominant
estate, he knew that the former owner of the dominant estate was in
negotiation with them for the sale of the dominant estate, this, he
was in bad faith. The Court ruled that such circumstance cannot be
used to defeat the applicant’s claim for a right of way because the
previous owner of the dominant estate had every right to sell his
property to anybody. Further, when the applicant bought the
dominant estate there could have been no existing contract of sale
yet considering that the owner of the servient estate and the
previous owner of the dominant estate were still in negotiation.
b. Requirement of Inadequacy of Outlet to
Public Highway
The true standard for the grant of the legal right is
adequacy [Costabella v. Court of Appeals].
In order to justify the imposition of the servitude of a
right of way, there must be a real, not a fictitious or artificial
necessity for it. Mere convenience for the dominant estate is not
what is required by law as the basis for setting up a compulsory
easement. Even in the face of a necessity, if it can be satisfied
without imposing the servitude, the same should not be imposed.
This easement can also be established for the benefit of a tenement
with an inadequate outlet, but not when the outlet is merely
inconvenient. Thus, when a person has already established an
easement of this nature in favor of his tenement, he cannot demand
another, even if the first passage has defects which make passage
impossible, if those defects can be eliminated by proper repairs
[Floro v. Llenado].
The convenience of the dominant estate has never been
the gauge for the grant of compulsory right of way. When there is
already an existing adequate outlet from the dominant estate to a
public highway, even fi the said outlet, for one reason or another,
Page 93 of 121
be inconvenient, the need to open up another servitude is
unjustified [Reyes v. Ramos].
In Cristobal v. Court of Appeals, the Court disallowed
the easement prayed for because an outlet already exists which is a
pathwalk located at the left side of petitioner’s property and which
is connected to a private road about 500 meters long. The private
road, in turn, leads to Ma. Elena Street, which is about 2.5 meters
wide, and finally, to Visayas Avenue. This outlet was determined
by the Court to be sufficient for the needs of the dominant estate.
In Floro v. Llenado, the Court refused to impose a right
of way over petitioner’s property although private respondent’s
alternative route was admittedly inconvenient because he had to
traverse several ricelands and rice paddies belonging to different
persons, not to mention that said passage is impassable during the
rainy reason.
In Ramos v. Gatchalian Realty, the Court refused to grant
the easement prayed for even if petitioner had to pass through lots
belonging to other owners, as temporary ingress and egress, which
lots were grassy, cogonal, and greatly inconvenient due to flood
and mud because such grant would run counter to the prevailing
jurisprudence that mere convenience for the dominant estate does
not suffice to serve as basis for the easement.
c. Least Prejudicial
Whenever there are several tenements surrounding the
dominant estate, the right of way must be established on the
tenement where the distance to the public road or highway is
shortest and where the least damage would be caused. If these two
criteria (shortest distance and least damage) do nto concur in a
single tenement, the Court has held in the past that the least
prejudice criterion must prevail over the shortest distance criterion
[Williams v. Zerda].
As between a right of way that would demolish a store of
strong materials to provide egress to a public highway, and another
right of way which, although longer, will only require an avocado
tree to be cut down, the second alternative should be preferred
[Quimen v. Court of Appeals].
As between the right of way that would demolish a fence
of strong materials to provide ingress and egress to a public
highway and another right of way which although longer will only
require a van or vehicle to make a turn, the second alternative
should be preferred [Quintanilla v. Abangan].
As between a right of way that would destroy the wire
fence and a house and another right of way which although the
longer will only traverse two vacant lots, the second alternative
should be preferred [Calimoso v. Roullo].
Least prejudice is about the suffering of the servient
estate, not of the dominant estate. Least prejudice is about the
suffering fo the servient estate. Its value is not determined solely by
the price of the property, but also by the value of the owner’s
foregone opportunity for use, resulting from the limitations
imposed by the easement. Thus, if the two alternative routes are the
following: (1) through the property of the respondent but petitioner
would have permanent structures – such as the garage, garden, and
grotto already installed on respondent’s property – destroyed to
accommodate her preferred location for the right of way; and (2)
through the property of the National Irrigation Authority which
may provide longer access from petitioner’s property to the public
highway, free from obstructions, but would require petitioner to
construct a concrete bridge over the irrigation canal, the Court
ruled that the second alternative is that which is least prejudicial to
the servient estate. The Court explained that even though such
route may be longer and more inconvenient to petitioner because
she will have to traverse other properties and construct a bridge
over the irrigation canal before she can reach the road, however,
these reasons will not justify the imposition of an easement on
respondent’s property because her convenience is not the gauge in
determining whether to impose an easement of right of way over
another’s property. The test it prejudice to the servient estate, not
the dominant estate [Reyes v. Ramos].
d. The Proper Indemnity
Prepayment means the delivery of the proper indemnity
required by law for the damage that might be incurred by the
servient estate in the event the legal easement is constituted. The
fact that a voluntary agreement upon the extent of compensation
cannot be reached by the parties involved is not an impediment to
the establishment of such easement. Precisely, the action of the
dominant estate against the servient estate should include a prayer
for the fixing of the amount which may be due from the former to
the latter [Talisay-Silay Milling v. CFI].
In the case of a legal easement, Article 649 prescribes the
parameters by which the proper indemnity may be fixed. If the
intention is to establish a permanent passage, the second paragraph
of Article 649 applies. The Civil Code categorically provides for
the measure by which the proper indemnity may be computed: the
value of the land occupied plus the amount of the damage caused to
the servient estate [Woodridge School v. ARB Construction]. Thus,
to award indemnity using factors different from those given by the
law is a complete disregard of these clear statutory provisions and
is evidently arbitrary [De Guzman v. Filinvest Development].
If the easement is intended to perpetually or indefinitely
deprive the owner of his proprietary rights through the imposition
of conditions that affect the ordinary use, free enjoyment and
disposal of the property or through restrictions and limitations that
are inconsistent with the exercise of the attributes of ownership, or
when the introduction of structures or objects which, by their
nature, create or increase the probability of injury, death upon or
destruction of life and property found on the land is necessary, then
the owner should be compensated for the monetary equivalent of
the land [NPC v. Tiangco].
In De Guzman v. Filinvest Development, petitioners
argue that it is unfair to require them to pay the value of the
affected road lots since the same is tantamount to buying the
property without them being issued titles and not having the right
to exercise dominion over it. The Court held the argument to be
untenable.Payment of the value of the land for permanent use of
the easement does not mean an alienation of the land occupied. In
fact under the law and unlike in purchase of a property, should the
right of way no longer be necessary because the owner of the
dominant estate has joined it to another abutting on a public
highway, and the servient estate demands that the easement be
extinguished, the value of the property received by the servient
estate by way of indemnity shall be returned in full to the dominant
estate. This only reinforces the concept that the payment of
indemnity is merely for the use of the right of way and not for its
alienation.
2. Who is Entitled to Right of Way
In the case of Sps. Dela Cruz v. Ramiscal, it was held
that the petitioners therein are not entitled to demand for a
compulsory right of way because they are not the owners of the
supposed dominant estate and neither do they possess a real right to
use such property.
Page 94 of 121
3. Where the Path Should Be Established and
Width of Path
Article 651. The width of the easement of right of way shall
be that which is sufficient for the needs of the dominant estate, and
may accordingly be changed from time to time. (566a)
Under the law, it is the needs of the dominant property
which ultimately determine the width of the passage. And these
needs may vary from time to time. When petitioner started out as a
plant nursery operator, he and his family could easily make do with
a few pushcarts to tow the plants to the national highway. But the
business grew and with it the need for the use of modern means of
conveyance or transport. Manual hauling of plants and garden soil
and use of pushcarts have become extremely cumbersome and
physically taxing. To force petitioner to leave his jeepney in the
highway, exposed to the elements and to the risk of theft simply
because it could not pass through the improvised pathway, is sheer
pigheadedness on the part of the servient estate and can only be
counterproductive far all the people concerned. Petitioner should
not be denied a passageway wide enough to accommodate his
jeepney since that is a reasonable and necessary aspect of the plant
nursery business. We are well aware that an additional one and
one-half (1 1/2) meters in the width of the pathway will reduce the
servient estate to only about 342.5 square meters. But petitioner has
expressed willingness to exchange an equivalent portion of his land
to compensate private respondents for their loss. Perhaps, it would
be well for respondents to take the offer of petitioner seriously.
[5]
 But unless and until that option is considered, the law decrees
that petitioner must indemnify the owners of the servient estate
including Mamerto Magsino from whose adjoining lot 1/2 meter
was taken to constitute the original path several years ago. Since
the easement to be established in favor of petitioner it of a
continuous and permanent nature, the indemnity shall consist of the
value of the land occupied and the amount of the damage caused to
the servient estate pursuant to Article 649 [Encarnacion v. Court of
Appeals].
4. Rules if Grantor’s or Grantee’s Land is Enclosed
Article 652. Whenever a piece of land acquired by sale,
exchange or partition, is surrounded by other estates of the vendor,
exchanger, or co-owner, he shall be obliged to grant a right of way
without indemnity.
In case of a simple donation, the donor shall be indemnified
by the donee for the establishment of the right of way. (567a)
Article 653. In the case of the preceding article, if it is the
land of the grantor that becomes isolated, he may demand a right of
way after paying an indemnity. However, the donor shall not be liable
for indemnity. (n)
If the ENCLOSING estate is that of the grantor (seller,
barterer, or co-owner but NOT donor), the grantee does not pay
indemnity for the easement.
If the ENCLOSED estate is that of the grantor (seller,
barterer, or co-owner but NOT donor), the grantor must pay
indemnity
The easement in Arts. 652 and 653 is in a sense a
voluntary easement (created implicitly by the will of the parties in
view of the contract or agreement entered into). It is of course
compulsory in the sense that it has to be granted, generally without
payment of any indemnity.
Jariol v. Court of Appeals
Held: In point of fact, a road right of way providing access to
the public road from "Lot G" existed long before the execution of the
extrajudicial partition even during the lifetime of Quirino Rodriguez. The
Deed of Partition merely sought to legalize and give stability to the access
road already existing. That was confirmed by the testimony of Mrs.
Casafranca. That is also the position taken by the other heirs who have been
included as defendants respondents. As a matter of law, considering that
"Lot G " has no access to the public road, the easement is explicitly
provided for in Article 652 of the Civil Code 7 , its width being determined
by the needs of the servient estate pursuant to Article 651 8 of the same law.
Thirdly, the justice of the situation rather than the technicalities
of the controversy should govern herein. The questioned insertions and
annotations refer to an "existing actual private lane." The question of
legality of those insertions is linked with the need for its continued
existence and the laws on easement cannot but have a definite bearing. The
annotations did not "create" a right-of-way, contrary to the opinion of the
Trial Court. They merely confirmed are existing one. Respondent Appellate
Tribunal did not "by judicial fiat" establish a "legal easement of right- of-
way" on Lot "F". It found that it had been pre-existing and that under the
circumstances, the laws on easement were applicable. A chapel exits in the
interior constructed by the deceased Quirino Rodriguez, who was also
responsible for giving chapel-goers access thereto from the street. 9 The
right-of-way exists for the mutual benefit of most of the heirs of Quirino
Rodriguez. As aptly stated by respondent Court "justice and equity demand
that the status quo be maintained with regards to the easement of right of
way."
5. Ownership of, and Repairs and Taxes on, the
Path
Article 654. If the right of way is permanent, the necessary
repairs shall be made by the owner of the dominant estate. A
proportionate share of the taxes shall be reimbursed by said owner to
the proprietor of the servient estate. (n)
6. Causes for Extinguishment of the Easement of
Right of Way
Article 655. If the right of way granted to a surrounded
estate ceases to be necessary because its owner has joined it to another
abutting on a public road, the owner of the servient estate may demand
that the easement be extinguished, returning what he may have
received by way of indemnity. The interest on the indemnity shall be
deemed to be in payment of rent for the use of the easement.
The same rule shall be applied in case a new road is opened
giving access to the isolated estate.
In both cases, the public highway must substantially meet
the needs of the dominant estate in order that the easement may be
extinguished. (568a)
7. Temporary Easement of Right of Way
Article 656. If it be indispensable for the construction,
repair, improvement, alteration or beautification of a building, to carry
materials through the estate of another, or to raise therein scaffolding
or other objects necessary for the work, the owner of such estate shall
be obliged to permit the act, after receiving payment of the proper
indemnity for the damage caused him. (569a)
Under Article 656, if the right of way is indispensable for
the construction, repair, improvement, alteration or beautification
of a building, a temporary easement is granted after payment of
Page 95 of 121
indemnity for the damage caused to the servient estate.
Indispensable in this instance is not to be construed literally. Great
inconvenience is sufficient [Preyslet, Jr. v. Court of Appeals].
Article 656 requires proof of indispensability and receipt of
payment of the proper indemnity for the damage caused by the
owner of the dominant estate before the owner of the servient
estate can be compelled to grant a temporary easement of right of
way. Being preconditions, they are akin to suspensive conditions
that must be fulfilled before the obligation on the part of the
servient estate to allow the easements can arise. To stress, the
temporary easement of a right of way under Article 656, similar to
the permanent easement of right of way pursuant to its Articles 649
and 650, can only be granted after proof of compliance with the
prerequisities set forth in the articles duly adduced during a
fullblown trial [AMA Land v. Wack Wack Residents’ Association].
8. Easement of Right of Way for the Passage of
Livestock
Article 657. Easements of the right of way for the passage of
livestock known as animal path, animal trail or any other, and those
for watering places, resting places and animal folds, shall be governed
by the ordinances and regulations relating thereto, and, in the absence
thereof, by the usages and customs of the place.
Without prejudice to rights legally acquired, the animal path
shall not exceed in any case the width of 75 meters, and the animal trail
that of 37 meters and 50 centimeters.
Whenever it is necessary to establish a compulsory easement
of the right of way or for a watering place for animals, the provisions of
this Section and those of articles 640 and 641 shall be observed. In this
case the width shall not exceed 10 meters. (570a)
H. EASEMENT OF PARTY WALL
Article 658. The easement of party wall shall be governed by
the provisions of this Title, by the local ordinances and customs insofar
as they do not conflict with the same, and by the rules of co-ownership.
(571a)
This is a wall at the dividing line of estates. Co-
ownership governs the wall, hence the party wall is necessarily a
common wall. However, not all common walls are party walls. For
example, a handball wall owned by two brothers, on their common
lot is a common wall, but is not a party wall.
1. Presumption
Article 659. The existence of an easement of party wall is
presumed, unless there is a title, or exterior sign, or proof to the
contrary:
(1) In dividing walls of adjoining buildings up to the point of
common elevation;
(2) In dividing walls of gardens or yards situated in cities,
towns, or in rural communities;
(3) In fences, walls and live hedges dividing rural lands.
(572)
The presumption (of being a party wall) is rebutted by:
(a) title to the contrary
(b) exterior signs to the contrary
(c) proof to the contrary.
 2. Exterior Signs Negativing the Existence of a
Party Wall
Article 660. It is understood that there is an exterior sign,
contrary to the easement of party wall:
(1) Whenever in the dividing wall of buildings there is a
window or opening;
(2) Whenever the dividing wall is, on one side, straight and
plumb on all its facement, and on the other, it has similar conditions on
the upper part, but the lower part slants or projects outward;
(3) Whenever the entire wall is built within the boundaries
of one of the estates;
(4) Whenever the dividing wall bears the burden of the
binding beams, floors and roof frame of one of the buildings, but not
those of the others;
(5) Whenever the dividing wall between courtyards, gardens,
and tenements is constructed in such a way that the coping sheds the
water upon only one of the estates;
(6) Whenever the dividing wall, being built of masonry, has
stepping stones, which at certain intervals project from the surface on
one side only, but not on the other;
(7) Whenever lands inclosed by fences or live hedges adjoin
others which are not inclosed.
In all these cases, the ownership of the walls, fences or
hedges shall be deemed to belong exclusively to the owner of the
property or tenement which has in its favor the presumption based on
any one of these signs. (573)
The article enumerates, by way of illustration, exterior
signs rebutting the presumption of there being an easement of party
wall (thus, instead of a party wall, we have a wall exclusively
owned by a single owner). (See Lao and De los Santos v. Heirs of
Alburo, 3 Phil. 48)
3. Party Ditches or Drains
Article 661. Ditches or drains opened between two estates
are also presumed as common to both, if there is no title or sign
showing the contrary.
There is a sign contrary to the part-ownership whenever the
earth or dirt removed to open the ditch or to clean it is only on one side
thereof, in which case the ownership of the ditch shall belong
exclusively to the owner of the land having this exterior sign in its
favor. (574)
The presumption of party wall (party ditch, party drain)
applies to ditches and drains opened between 2 estates.
The presumption is also rebuttable (juris tantum). Thus,
if a deposit of dirt is on one side alone, the owner of that side is
considered the owner of the ditch.
4. Repairs on and Construction of the Party Wall
Article 662. The cost of repairs and construction of party
walls and the maintenance of fences, live hedges, ditches, and drains
owned in common, shall be borne by all the owners of the lands or
tenements having the party wall in their favor, in proportion to the
right of each.
Nevertheless, any owner may exempt himself from
contributing to this charge by renouncing his part-ownership, except
when the party wall supports a building belonging to him. (575)
This article speaks of proportionate contribution to
repairs and construction (similar to co-ownership).
Page 96 of 121
Renunciation of the share of one owner in the party wall
may be made, in order to free himself from the above-mentioned
contribution UNLESS —
(a) the repair had already been contracted for and made
(for here, he would still be liable to the repairer).
(b) he still uses the wall (as when it supports his
building). (Art. 662). [If the building is demolished
renunciation can be made. (Art. 663).].
5. Demolition of a Building Supported by the Party
Wall
Article 663. If the owner of a building supported by a party
wall desires to demolish the building, he may also renounce his part-
ownership of the wall, but the cost of all repairs and work necessary to
prevent any damage which the demolition may cause to the party wall,
on this occasion only, shall be borne by him. (576)
Indemnification must be made for damages (the
simultaneous damages or those incurred immediately after and
because of, the demolition, not those which may occur later on).
6. Increasing the Height of the Party Wall
Article 664. Every owner may increase the height of the
party wall, doing so at his own expense and paying for any damage
which may be caused by the work, even though such damage be
temporary.
The expenses of maintaining the wall in the part newly
raised or deepened at its foundation shall also be paid for by him; and,
in addition, the indemnity for the increased expenses which may be
necessary for the preservation of the party wall by reason of the
greater height or depth which has been given it.
If the party wall cannot bear the increased height, the owner
desiring to raise it shall be obliged to reconstruct it at his own expense
and, if for this purpose it be necessary to make it thicker, he shall give
the space required from his own land. (577)
This deals with the right to increase the height of the
party wall. He who desires this:
(a) must do so at his own expense.
(b) must pay the necessary damages caused, even if the
damage be temporary.
(c) must bear the costs of maintenance of the portion
ADDED.
(d) must pay for the increased cost of preservation.
(e) must reconstruct if original wall cannot bear the
increased height.
(f) must give the additional space (land) necessary, if
wall is to be thickened.
7. How the Other Owners May Acquire Part-
Ownership in the Additions
Article 665. The other owners who have not contributed in
giving increased height, depth or thickness to the wall may,
nevertheless, acquire the right of part-ownership therein, by paying
proportionally the value of the work at the time of the acquisition and
of the land used for its increased thickness. (578a)
8. Use by the Co-Owners of the Wall
 Article 666. Every part-owner of a party wall may use it in
proportion to the right he may have in the co-ownership, without
interfering with the common and respective uses by the other co-
owners. (579a)
I. EASEMENT OF LIGHT AND VIEW
This section deals with two kinds of easements:
(a) the easement of LIGHT — jus luminum (as in the
case of small windows, not more than 30 cm.
square, at the height of the ceiling joist, the purpose
of which is to admit light, and a little air, but not
VIEW).
(b) the easement of VIEW — “servidumbre prospectus”
(as in the case of full or regular windows
overlooking the adjoining estate) (Incidentally,
although the principal purpose here is VIEW, the
easement of light is necessarily included, as well as
the easement of altius non tollendi [not to build
higher for the purpose of obstruction].).
 None of these provisions under this section, however,
actually create a legal easement of light and view which can only
be acquired through prescription or a by virtue of a voluntary title.
From the foregoing, we agree with the respondents that Alolino
does not have an easement of light and view or an easement of
right of way over the respondents' property or the barrio road it
stands on. This does not mean, however, that the respondents are
entitled to continue occupying the barrio road and blocking the
rear of Alolino's house. Every building is subject to the easement
which prohibits the proprietor or possessor from committing
nuisance [Alolino v. Flores].
1. Prohibition to Make an Opening thru the Party
Wall
Article 667. No part-owner may, without the consent of the
others, open through the party wall any window or aperture of any
kind. (580)
Example: A and B are co-owners of a party wall. A can
not make an opening on the wall without the permission of B. If A
were allowed to do this (without B’s consent), there is a distinct
possibility that A will later claim the whole wall as his in view of
the exterior sign. (Art. 660, par. 1). Moreover, it is as if A were
allowed to use the WHOLE thickness of the wall.
2. When Easement of Light and View is Positive
and When Negative
Article 668. The period of prescription for the acquisition of
an easement of light and view shall be counted:
(1) From the time of the opening of the window, if it is
through a party wall; or
(2) From the time of the formal prohibition upon the
proprietor of the adjoining land or tenement, if the window is through
a wall on the dominant estate. (n)
The easement of light and view is either positive or
negative:
(a) Positive — if the window is thru a party wall. (Art.
668, par. 1). Therefore, the period of prescription
commences from the time the window is opened.
Page 97 of 121
Even if the window is on one’s own wall, still the
easement would be positive if the window is on a
balcony or projection extending over into the
adjoining land. [Fabie v. Lichauco].
(b) Negative — if the window is thru one’s own wall,
that is, thru a wall of the dominant estate. (Art. 668,
par. 2). Therefore, the time for the period of
prescription should begin from the time of notarial
prohibition upon the adjoining owner [Cortez v. Yu
Tibo]. “Formal prohibition’’ or “formal act’’ means
not merely any writing, but one executed in due
form and/or with solemnity — a public instrument
[Cid v. Javier].
3. Restricted Windows
Article 669. When the distances in article 670 are not
observed, the owner of a wall which is not party wall, adjoining a
tenement or piece of land belonging to another, can make in it openings
to admit light at the height of the ceiling joists or immediately under
the ceiling, and of the size of thirty centimeters square, and, in every
case, with an iron grating imbedded in the wall and with a wire screen.
Nevertheless, the owner of the tenement or property
adjoining the wall in which the openings are made can close them
should he acquire part-ownership thereof, if there be no stipulation to
the contrary.
He can also obstruct them by constructing a building on his
land or by raising a wall thereon contiguous to that having such
openings, unless an easement of light has been acquired. (581a)
The openings or windows referred to in this article are
for light, not VIEW, hence, the conditions or restrictions set for
them. (We shall refer to them as the RESTRICTED WINDOWS.)
Severina Choco v. Santamaria
Held: It appears obvious to us, from the evidence,  that the
window No. 1, referred to in the first assignment of errors, is next to  the
appellants'  lot.   To judge from the photographic views, Exhibits A  and  D,
it opens on the boundary line between the said lot and  that  of the appellee
and is situated  perpendicularly above a  part  of the wall  that belongs to 
the appellants.  This  opinion is  corroborated by the testimony of the
defendant's witness who  took the said photographs,  in  so far as  he said
that "a part of the window in  question is in front of the plaintiffs' property,
and a  person approaching  the window may clearly see the said lot."   And 
certainly if it  is in front of this  lot,  it is unquestionable that it directly
overlooks the same;  but  even though it did not and only  a side or oblique
view of the lot could be obtained  from it,  it could  not be kept open, since
between it and the plaintiffs' property there does not intervene the distance 
required by law - that  of two meters in the first case, and 60 centimeters in
the second.  In reality, there is no distance at all between the said window
and the plaintiffs' lot, because, as we have said, this window is
perpendicular to the boundary line of the said lot; therefore, its opening is a 
manifest  violation  of the provisions  of article 582 of the Civil Code which
reads as follows:
"Windows with direct views, or balconies or any similar
openings projecting over the estate  of the neighbor, can not be made if
there is not a distance of, at least,  2  meters between the wall in which they
are built and said  estate.
"Neither can side nor oblique views be opened over said
property, unless there is a distance of  60 centimeters."
Because of the lack  of the distance required by law, the
window  in question must be closed,  and consequently the judgment
appealed from  should be modified in this sense, as regards this window.
With respect to the second assignment of error, the question
raised  by the appellants  concerns the proper interpretation of article 581 of
the Civil Code which prescribes as follows:
 "The owner of a wall which is not a party-wall, adjoining
another's estate,  may  make in it windows or  openings  to admit  light, at
the height of the ceiling joists or  immediately  under the ceiling, of the
dimensions  of 30 centimeters square and, in any case, with an iron grate
embedded in the  wall and a  wire screen."
The  windows mentioned, in this part of the appeal are those
indicated by Nos. 2, 3, 4, 5, 6, 8, and 9, in the defendant's Exhibit A.    They
are  all  situated immediately under the ceiling of the first floor and are
provided with wire screens; some of  them measure more and others less
than 30 centimeters square  and none of them have iron  grates embedded in
the wall.  Owing  to this  last circumstance, none of them fully comply with
the conditions  required by law; moreover, those  numbered  5, 6, 8, and 9,
have the additional defect  of  being  greater than  30  centimeters square.   they have at the same time joists and techo.  In  referring to  the  lower
The trial judge therefore ordered, in the judgment,  that  all the
aforementioned  windows  be closed  or that they be made to conform to the
law with respect to their dimensions and the placing of iron grates
embedded in the wall.  The appellants maintain that these windows should
have been ordered closed absolutely and finally, and, consequently, that the
option allowed the defendant to keep them open, provided that he brought
them within the terms of the law, is contrary to the  same and, therefore,  Aside from what  has  been said here, the object of the law in
illegal.
It is alleged as a ground for such averment that none of the
windows referred to are at the height of the  ceiling joists, which is the first
condition  required by law.
"We understand by ceiling joists - say the appellants - in a
building composed of any given  number of stories, the long pieces to  than another,  whichever it may be, in connection with this provision  of
which are nailed the boards that form the ceiling of the last story  of the
building, counting the  stories from below; and this interpretation which we
give to the words ceiling joists must be that most in harmony with the spirit
of article 581 of  the code, the subject of our  examination, since
immediately after  them in the  same article, in explanation, are found the
words or immediately  under 'los techos,' in order to indicate, without the 
least  doubt, the sole place or height  where openings or windows may be
made in conformity with the  law.   It  is needless  to say that a building,
though composed of several  stories, can have but one techo.  *  *  *"
This  last assertion  is incorrect.  By techo is  understood that  Article 670. No windows, apertures, balconies, or other
part of a construction which covers the  rooms under it and certainly forms
one of the essential parts  of every story.  A story is composed of earth,
pavement and ceiling, the  latter, that is, the  ceiling, being that part  of the
story that is  visible to the observer situated below  in the room covered by
it.   (Hispano-American Encyclopedic Dictionary, by Montaner and
Simon.)  Consequently, every story has a ceiling, and  not, as  the
appellants maintain, the upper one alone.
Nor is their  definition exact of the word joists, as it is employed
in article 581  of the Code.   According to the dictionary of the Spanish
Academy, these are, in architecture, understood to be a kind of beam laid
horizontally and serving in buildings to support others or for bracing and
connecting the parts of the  structure.  Mucius  Scaevola  says in  his Civil
Code, volume 10, page 448
"The horizontal timbers that are placed  upon the  tops of  the
uprights, that is, what are commonly called beams, intended to serve for
connection and main support of the timbers of the different floors that
separate  the  stories of the building, are called joists."
According to  these  definitions each floor necessarily has joists,
that is, beams, since,  in the last analysis they are what support and secure
the structure of the story immediately above; therefore it is not  true that  669).
there may be joists  only in the top story, as  the appellants  claim by saying
that they understand to be such the long timbers to which are fastened the
boards of the ceiling at the top story of the building.  On the contrary,
carefully  considered, it is  precisely the top story that does not need joists,
since it does not have to support any other higher portion of  the building.   the boundary line.
It has only to support the  weight of the roof,  which is   undoubtedly much 
less than that  of  a whole story.   So that, according to Mucius Scaevola
(work cited, vol. 10, p. 487), it can not be said that the  top story has joists. 
And because it certainly does not have them, is the  reason why the code in
said article 581 employs the phrase or immediately under "los techos" in
referring to the top story.
The author's  words in  expounding this  theory  in his
commentary on article 581 of the Civil Code are as follows:
Page 98 of 121
"We said elsewhere that these (the joists) were the  horizontal
timbers that rest upon the tops of the uprights; they form, then, the  upper
limit  of the different stories of  a house; and therefore,  in referring to the
top story, which can not be said to have joists, article 581 makes use of the
phrase or immediately under 'los techos.' "
This  does not mean that  the  italicized phrase  refers solely and
exclusively  to  the top story, since the lower stories also have techos, as
above set forth.   In our opinion what the author cited means is that in
speaking of the top story, which has no joists, the words of article 581 of
the code, at the height of the ceiling joists, fail to  apply, the phrase or
immediately under "hs techos" alone being thereto applicable, in distinction
from the lower stories, with regard to which both phrases are applicable as
stories  either phrase may,  in connection  with the other, determine  the
place, which surely can not be more  than one, where it is permissible  to 
open the  windows  called regulation windows, whenever in them the joists
are actually joined to or placed next to the techo which forms the top of
each  of said stories.  Both phrases therefore express the same idea with
reference to  the  lower stories.
authorizing the opening of the windows in question in all the stories of a
building, without any exception, is clear.  Their purpose is, as article 581
itself says, to furnish light  to  the rooms, and it is evident at a glance that
the rooms of the lower stories have as  much need for  light as those of the
top story.   No good reason exists for having one story  in  better  condition 
law.
The defendant is ordered to  close finally and forever the
window marked No. 1 in Exhibit A, the judgment appealed from  in so far
as it refers to said window being thus modified, but affirmed in all other
respects; without special finding as to  costs in this instance.
4. Regular or Full Windows
similar projections which afford a direct view upon or towards an
adjoining land or tenement can be made, without leaving a distance of
two meters between the wall in which they are made and such
contiguous property.
Neither can side or oblique views upon or towards such
conterminous property be had, unless there be a distance of sixty
centimeters.
The nonobservance of these distances does not give rise to
prescription. (582a)
Article 671. The distances referred to in the preceding
article shall be measured in cases of direct views from the outer line of
the wall when the openings do not project, from the outer line of the
latter when they do, and in cases of oblique view from the dividing line
between the two properties. (583)
Articles 670 and 671 deal with regular, full windows (as
distinguished from the restricted windows referred to in Article
Regular windows can be opened provided that the proper
distances are followed.
For windows having direct (face to face) views, observe
at least 2 meters distance between the wall having the windows and
For windows having side or oblique views (that is, one
must turn his head to the right or to the left to view the adjoining
land), observe a distance of at least 60 cms. between the boundary
line and nearest edge of the window.
Soriano v. Sterberg
 Held: The provisions of law upon which plaintiff bases his
action concern easements, and are found in the Civil Code.  Reliance is
principally  made upon the first paragraph of article 582 of the Civil Code
reading as follows: "No windows or balconies or other similar projections
which directly overlook the adjoining property may be opened or built
without leaving a distance of not less than 2 meters between the wall in
which they are built and such adjoining property."
The provisions of law upon which the defendant grounds his
defense concern prescription of actions, and are found in Chapter III of the
Code of Civil Procedure.  The maximum time within which an action for
relief can be brought is there fixed as within ten years after the cause of
action accrues.
The subject of easements of light and view is so thoroughly
covered in two learned decisions handed down by the Chief Justice that it
would be highly unprofitable to enter this intricate field of the law.  necessary protective works, subject, in regard to the manner thereof, to
(Cortes vs. YuTibo [1903], 2 Phil., 24; Fabie vs. Lichauco [1908], 11 Phil.,
14.)  But here there is no question of easement.  The point now to be
decided is whether or not a right of action to enforce article 582 of the Civil
Code may be lost by failure to prosecute within the prescriptive period
fixed by the Code of Civil Procedure.
It should first be noted that the defendant in this case has never
prohibited the plaintiff from building on his, the plaintiff's, own land, any
wall that he may desire to construct.  Further, it should be noted that the
offending edifice of the defendant was constructed in 1905.  This was the
year when the defendant violated the law.  This was the date when the
cause of action accrued.  Nevertheless, the windows complained of were
permitted to be open for thirteen years without  protest.  The plaintiff must,
consequently, by reason of his own laches, be considered to have waived
any right which he may have had to compel the windows to be closed.   The
argument of plaintiff that it was only in 1917, when he bought the land in
question, that the statute of limitations began to run, is not convincing, for
the general rule is, that once the statute begins to run, it never stops, and the
transfer of the cause of action does not have the effect of suspending its
operation.  (Ervin vs. Brooks [1892], 111 N. C, 358.)
It is our holding that plaintiff's right of action under article 582
of the Civil Code accrued in 1905 when the windows in defendant's house
were opened, and that, in accordance with Chapter III of the Code of Civil
Procedure. his action has prescribed.
5. Rule When the Buildings Are Separated By a
Public Way or Alley
Article 672. The provisions of article 670 are not applicable
to buildings separated by a public way or alley, which is not less than
three meters wide, subject to special regulations and local ordinances.
(584a)
6. Rule When a Right Has Been Acquired to Have
Direct Views
Article 673. Whenever by any title a right has been acquired
to have direct views, balconies or belvederes overlooking an adjoining
property, the owner of the servient estate cannot build thereon at less
than a distance of three meters to be measured in the manner provided
in article 671. Any stipulation permitting distances less than those
prescribed in article 670 is void. (585a)
Article 673 speaks of a TRUE servitude (servitude of
restraint or abstention) unlike Articles 669 and 670 which do not
really refer to easements since BOTH owners are prohibited.
Article 673 applies even when the easement has been
acquired under Article 624. Thus, if an estate has easement of light
and view under Article 624, the neighbor cannot construct on his
(the neighbor’s) lot unless he observes the 3-meter rule [Gargantos
v. Yano].
Page 99 of 121
J. INTERMEDIATE DISTANCES AND WORKS FOR
CERTAIN CONSTRUCTIONS AND PLANTINGS
Article 677. No constructions can be built or plantings made
near fortified places or fortresses without compliance with the
conditions required in special laws, ordinances, and regulations
relating thereto. (589)
Article 678. No person shall build any aqueduct, well, sewer,
furnace, forge, chimney, stable, depository of corrosive substances,
machinery, or factory which by reason of its nature or products is
dangerous or noxious, without observing the distances prescribed by
the regulations and customs of the place, and without making the
the conditions prescribed by such regulations. These prohibitions
cannot be altered or renounced by stipulation on the part of the
adjoining proprietors.
In the absence of regulations, such precautions shall be
taken as may be considered necessary, in order to avoid any damage to
the neighboring lands or tenements. (590a)
Article 679. No trees shall be planted near a tenement or
piece of land belonging to another except at the distance authorized by
the ordinances or customs of the place, and, in the absence thereof, at a
distance of at least two meters from the dividing line of the estates if
tall trees are planted and at a distance of at least fifty centimeters if
shrubs or small trees are planted.
Every landowner shall have the right to demand that trees
hereafter planted at a shorter distance from his land or tenement be
uprooted.
The provisions of this article also apply to trees which have
grown spontaneously. (591a)
Article 680. If the branches of any tree should extend over a
neighboring estate, tenement, garden or yard, the owner of the latter
shall have the right to demand that they be cut off insofar as they may
spread over his property, and, if it be the roots of a neighboring tree
which should penetrate into the land of another, the latter may cut
them off himself within his property. (592)
Article 681. Fruits naturally falling upon adjacent land
belong to the owner of said land. (n)
K. EASEMENT AGAINST NUISANCE (N)
Article 682. Every building or piece of land is subject to the
easement which prohibits the proprietor or possessor from committing
nuisance through noise, jarring, offensive odor, smoke, heat, dust,
water, glare and other causes.
Article 683. Subject to zoning, health, police and other laws
and regulations, factories and shops may be maintained provided the
least possible annoyance is caused to the neighborhood.
L. LATERAL AND SUBJACENT SUPPORT
Article 684. No proprietor shall make such excavations upon
his land as to deprive any adjacent land or building of sufficient lateral
or subjacent support.
Article 685. Any stipulation or testamentary provision
allowing excavations that cause danger to an adjacent land or building
shall be void.
 Article 686. The legal easement of lateral and subjacent
support is not only for buildings standing at the time the excavations
are made but also for constructions that may be erected.
Article 687. Any proprietor intending to make any
excavation contemplated in the three preceding articles shall notify all
owners of adjacent lands.
An owner, by virtue of his surface right, may make
excavations on his land, but his right is subject to the limitation that
he shall not deprive any adjacent land or building of sufficient
lateral or subjacent support. Between two adjacent landowners,
each has an absolute property right to have his land laterally
supported by the soil of his neighbor, and if either, in excavating on
his own premises, he so disturbs the lateral support of his
neighbor's land as to cause it, or, in its natural state, by the pressure
of its own weight, to fall away or slide from its position, the one so
excavating is liable [Castro v. Monsod].
Castro v. Monsod
Held: In the instant case, an easement of subjacent and lateral
support exists in favor of respondent.  It was established that the properties
of petitioner and respondent adjoin each other. The residential house and lot
of respondent is located on an elevated plateau of fifteen (15) feet above the
level of petitioner's property. The embankment and the riprapped stones
have been in existence even before petitioner became the owner of the
property. It was proven that petitioner has been making excavations and
diggings on the subject embankment and, unless restrained, the continued
excavation of the embankment could cause the foundation of the rear
portion of the house of respondent to collapse, resulting in the destruction
of a huge part of the family dwelling.
We sustain the CA in declaring that a permanent injunction on
the part of petitioner from making injurious excavations is necessary in
order to protect the interest of respondent. However, an annotation of the
existence of the subjacent and lateral support is no longer necessary. It
exists whether or not it is annotated or registered in the registry of property.
A judicial recognition of the same already binds the property and the owner
of the same, including her successors-in-interest. Otherwise, every
adjoining landowner would come to court or have the easement of
subjacent and lateral support registered in order for it to be recognized and
respected.
M. VOLUNTARY EASEMENTS
Article 688. Every owner of a tenement or piece of land may
establish thereon the easements which he may deem suitable, and in the
manner and form which he may deem best, provided he does not
contravene the laws, public policy or public order.
The easements established may be predial (for the benefit
of an estate) or personal.
Only the owner or someone else, in the name of and with
the authority of the owner, may establish a voluntary predial
servitude on his estate, for this is an act of ownership. (However so
as not to prejudice the usufructuary, the usufructuary’s consent is
needed to create a “perpetual, voluntary easement.’’
Page 100 of 121
If a person is an owner with a resolutory title or an
annullable one, he can create an easement over the property, BUT
it is deemed extinguished upon resolution or annulment of the
right. (4 Manresa 836). The same may be said of an easement
created in good faith by the will merely of the usufructuary or
possessor in good faith. Such easement naturally ends, when the
usufruct or possession terminates. From one viewpoint, what had
been granted was not really an easement but merely a personal
right.
An owner of a subdivision can properly impose on its
contracts selling the lots to private owners that the buyers cannot
build factories thereon. In a sense this is an easement, and makes
evident the intent to make the subdivision a residential zone. This
is a valid contractual provision which, while it restricts the free use
of the land by the owner is nonetheless NOT contrary to public
policy [Trias v. Araneta].
Ortigas & Co. v. Feati Bank
Held: The need for reconciling the non-impairment clause of the
Constitution and the valid exercise of police power may also be gleaned
from Helvering v. Davis 45 wherein Mr. Justice Cardozo, speaking for the
Court, resolved the conflict "between one welfare and another, between
particular and general," thus —
"Nor is the concept of the general welfare static. Needs that
were narrow or parochial a century ago may be interwoven in our day with
the well-being of the nation. What is critical or urgent changes with the
times."
Even if the subject building restrictions were assumed by the
defendant-appellee as vendee of Lots Nos. 5 and 6, in the corresponding
deeds of sale, and later, in Transfer Certificates of Title Nos. 101613 and
106092, the contractual obligations so assumed cannot prevail over
Resolution No. 27, of the Municipality of Mandaluyong, which has validly
exercised its police power through the said resolution. Accordingly, the
building restrictions, which declare Lots Nos. 5 and 6 as residential, cannot
be enforced.
North Negros Sugar v. Hidalgo
Held: It is undisputed that the road in question was constructed
by the plaintiff on its own land, and that it  connects the central or the "mill
site" with  the provincial road.  We have also the admission that the plaintiff
made this road accessible to the general public, regardless of class or group
of persons or entities.  Its use has been extended to employees and  laborers
of the  plaintiff; and  so also to all those who have a mind to pass through 
it, except that, in cases of motor vehicles, a passage fee of P0.15 each
should be paid.  There is no contention here that  the defendant had refused
to pay said tolls whenever he wanted  to  drive his car along the road in
question.
We, therefore, have the case of an easement of way voluntarily
constituted in  favor of a community.  Civil Code, articles 531 and 594
read:
"ART. 531. Easements may also  be established for the benefit
of one or more persons or of a community to whom the encumbered estate
does not belong."
*      *        *        *         *          *       *
"ART. 594. The owner of an  estate may burden it with such
easements as he may deem  fit, and in such manner and form  as he may
consider desirable,  provided he does not violate the law or public order."
There is nothing in the constitution of this easement  in violation
of law or public  order,  except  perhaps that the right to open  roads and
charge passage fees therefor  is the State's by right of sovereignty  and may
not be  taken over by a private individual without the requisite permit.
This,  however, would affect the right of the plaintiff  to charge tolls, but
not that of the defendant or of  any other person to make use of the
easement.
As  may be  seen from the language  of article 594,  in cases of
voluntary easements, the  owner is  given ample liberty to establish them:
"as he may deem fit, and in such manner and form  as  he may consider
desirable."  The plaintiff "considered it desirable" to open this road to the allows petitioner a much greater ease in going to and coming from the main
public in  general,  without imposing any condition save the payment of a  thoroughfare is to completely ignore what jurisprudence has consistently
fifteen-centavo toll by motor vehicles, and it may not now go back on this maintained through the years regarding an easement of a right of way, that
and deny the existence  of an easement.  Voluntary easements under article 'mere convenience for the dominant estate is not enough to serve as its
594 are not contractual in nature; they constitute the act of the owner.  If he  basis.' To justify the imposition of this servitude, there must be a real, not a
exacts any condition, like the payment of a certain indemnity for the use of fictitious or artificial, necessity for it." (See Tolentino, Civil Code of the
the easement, any person who  is willing to pay  it may make use of the  Philippines, Vol. II, 2nd Ed., 1972, p. 371)
easement. If the contention be made that a  contract is necessary it may be
stated  that a contract exists from the time all those who desire to make use
La Vista v. Court of Appeals
of the easement are disposed to pay the required indemnity.
Held: That there is no contract between LA VISTA and Solid
The plaintiff contends that the easement of way is intermittent in
Homes, Inc., and thus the court could not have declared the existence of an
nature and can only be acquired by virtue of a title under article 539.  The
easement created by the manifest will of the parties, is devoid of merit. The
defendant, however, does not lay claim to it by prescription.   The title in
predecessors-in-interest of both LA VISTA and Solid Homes, Inc., i.e., the
this case consists  in the fact that the plaintiff has offered the use of this
Tuasons and the Philippine Building Corporation, respectively, clearly
road to the general public upon payment of a certain sum as passage fee in
established a contractual easement of right-of-way over Mangyan Road.
the case of motor vehicles.
When the Philippine Building Corporation transferred its rights and
The cases of Roman Catholic Archbishop of Manila vs. Roxas
obligations to ATENEO the Tuasons expressly consented and agreed
(22 Phil., 450),  and Cuaycong vs. Benedicto  (37 Phil., 781), are not
thereto. Meanwhile, the Tuasons themselves developed their property into
controlling, as there the attempt was to establish that the right to an 
what is now known as LA VISTA. On the other hand, ATENEO sold the
easement of way had been acquired by prescription.  Here defendant's
hillside portions of its property to Solid Homes, Inc., including the right
contention is, that while the road in question remains open to the public, he
over the easement of right-of-way. In sum, when the easement in this case
has  a right to its use  upon paying the  passage fees required by the 
was established by contract, the parties unequivocally made provisions for
plaintiff.   Indeed the latter  may close it at its pleasure, as no period has
its observance by all who in the future might succeed them in dominion.
been fixed when the easement was  voluntarily constituted,  but while  the
road is thrown open, the plaintiff may not capriciously exclude the
defendant from its use. 1. Right of Naked Owner to Impose Easements
Furthermore, plaintiff's evidence  discloses the existence of a
forcible right of way  in favor of the owner and occupants  of the Hacienda Article 689. The owner of a tenement or piece of land, the
"Sangay"  under the Civil Code, article 564, because, according to said usufruct of which belongs to another, may impose thereon, without the
evidence, those living in the Hacienda "Sangay" have no access to the consent of the usufructuary, any servitudes which will not injure the
provincial road except thru the road in question.   right of usufruct.

Rivera v. IAC
Held:  The deed of sale was executed on September 6, 1979,
many years after the wall built in the middle of the Mangyan Road had
been drawn back to its present position.  Undoubtedly, Dr. Lourdes R.
Quisumbing the then president of the Maryknoll College Foundation, Inc.
who entered into the contract of sale with the petitioners could not have
considered the one-half (1/2) portion of the Mangyan Road as part of the
Maryknoll College Campus.  And to construe the one-half (1/2) portion of
the Mangyan Road as "inside the Maryknoll College Campus" would be
odd and whimsical.
The provisions of the deed of sale with mortgage are clear.  It is
the well-settled rule in the interpretation of a contract that if its terms are
clear, the literal meaning of the stipulations shall control (Government
Service Insurance System v. Court of Appeals, 145 SCRA 311 [1986]). 
Maryknoll College granted a right of way over the one-half (1/2) portion of
the Mangyan Road only for utilities particularly electric, telephone, water,
sewerage, and drainage.  It was a grant for specific purposes only.  It did
not grant a road right of way over that particular portion of the road. 
Maryknoll however provided a road right of way inside the Maryknoll
College Campus "in the event the La Vista Subdivision Association refuses
VENDEE-MORTGAGORS (the petitioners) access to the other half
portion of the road owned by said association." And with regard to this
provision, Maryknoll did not fail in its obligation to provide a road right of
way inside its campus.  To support this point, the private respondent
submitted a manifestation showing that there are two (2) roads located
within the Maryknoll College Campus leading from the petitioners' lot to
Katipunan Avenue.  This, petitioners did not refute.  If indeed the
petitioners have been granted a road right of way, such right should have
been asserted against Maryknoll College and not La Vista which is actually
not a party to the contract.
Notwithstanding the existence of a city ordinance, the
petitioners do not have an unquestioned right over the one-half portion of
the Mangyan Road.  In the case of Ramos, Sr. v. Gatchalian Realty,
Inc. (154 SCRA 703 [1987]), this Court had the occasion to explain:
"xxx To allow the petitioner access to Sucat Road through
Gatchalian Avenue inspite of a road right of way provided by the
petitioner's subdivision for its buyers simply because Gatchalian Avenue
The naked owner must respect the rights of the
usufructuary. Hence, while he may impose the easement of “altius
non tollendi” (obligation not to build higher) without the
usufructuary’s approval (Art. 689) still, insofar as the easement of
right of way is concerned, he should try to obtain the
usufructuary’s consent, for here the latter’s rights may be interfered
with. (See 4 Manresa 837-838). If he does not get the
usufructuary’s consent, he may be held liable for damages.
2. Rules When a Usufruct Exists
Article 690. Whenever the naked ownership of a tenement or
piece of land belongs to one person and the beneficial ownership to
another, no perpetual voluntary easement may be established thereon
without the consent of both owners.
The beneficial owner (as distinguished from the naked
owner) may by himself create a temporary easement compatible
with the extent of his beneficial dominion.
If the easement is perpetual (like the permanent easement
of right of way) both the naked and the beneficial owners must
consent.
3. Creation of an Easement by the Co-Owners in a
Co-Ownership
Article 691. In order to impose an easement of an undivided
tenement, or piece of land, the consent of all the co-owners shall be
required. The consent given by some only, must be held in abeyance
until the last one of all the co-owners shall have expressed his
conformity. But the consent given by one of the co-owners separately
from the others shall bind the grantor and his successors not to prevent
the exercise of the right granted.

Page 101 of 121

 Reason for requiring unanimous consent on the part of all
the co-owners: The creation of the voluntary easement is an act of
ownership (the alienation not of any aliquot part but of a qualitative
part of the enjoyment of the whole premises).
Once a co-owner gives his consent, he cannot later on
revoke his consent (except when the consent had been vitiated). As
a matter of fact, his own successors cannot ordinarily revoke the
consent he had given.
4. Governing Rules for Voluntary Easements
Article 692. The title and, in a proper case, the possession of
an easement acquired by prescription shall determine the rights of the
dominant estate and the obligations of the servient estate. In default
thereof, the easement shall be governed by such provisions of this Title
as are applicable thereto.
If created by title (contract, will, etc.), the title governs.
The Civil Code is suppletory.
If created by prescription, the form and manner in which
it had been acquired. (See Art. 626). The Civil Code is suppletory.
If created by prescription in a proper case (that is, may
have been a contract initially, but the form and manner may have
been extended or decreased by prescription), the way the easement
has been possessed, that is, the manner and form of possession. The
Civil Code is suppletory. (See 3 Sanchez Roman 648)
5. Rule to Apply When Servient Estate Has Bound
Itself to Pay for the Maintenance of the
Easement
Article 693. the owner of the servient estate should have
bound himself, upon the establishment of the easement, to bear the cost
of the work required for the use and preservation thereof, he may free
himself from this obligation by renouncing his property to the owner of
the dominant estate.
In the contract or title, the servient owner may have or
may not have bound himself to pay for the maintenance (use and
preservation) of the easement. The article applies only when he has
so bound himself.
IX
OCCUPATION AND INTELLECTUAL CREATION
A. PRELIMINARY PROVISION
1. Modes of Acquiring Ownership
Article 712. Ownership is acquired by occupation and by
intellectual creation.
Ownership and other real rights over property are acquired
and transmitted by law, by donation, by testate and intestate
succession, and in consequence of certain contracts, by tradition.
They may also be acquired by means of prescription.
(a) Original modes. (independent of any pre-existing or
preceding title or right of another):
1) Occupation
2) Creation or work (in the Code, only intellectual
creation is mentioned).
Page 102 of 121
(b) Derivative modes. (somebody else was the owner
before):
1) Succession
2) Donation
3) Prescription
4) Law
5) Tradition, as a consequence of certain contracts (like
the contract of sale, barter, assignment, simple loan or mutuum).
NOTE: A perfected sale does not transmit ownership; it
is the delivery or tradition which conveys ownership.
In some contracts, like Deposit or Commodatum, neither
the perfection of the contract nor the delivery transfers ownership.
Hence, we say not “tradition’’ but “tradition, as a
consequence of certain contracts.’’
‘Mode’ Distinguished from ‘Title’
(a) Definitions
1) mode — the process of acquiring or transferring
ownership. (See 3 Sanchez Roman 199-200).
2) title — that which is not ordinarily sufficient to
convey ownership, but which gives a juridical justification for a
mode; i.e., it provides the cause for the acquisition of ownership.
Example: If A sells to B a specific car for a specific
amount, the sale is the title; by virtue of such title, A should now
deliver the property to B. It is the delivery or tradition that makes B
the owner; it is tradition that is the mode.
B. OCCUPATION
Article 713. Things appropriable by nature which are
without an owner, such as animals that are the object of hunting and
fishing, hidden treasure and abandoned movables, are acquired by
occupation.
Occupation is the acquisition of ownership by seizing
corporeal things that have no owner, made with the intention of
acquiring them, and accomplished according to legal rules.
1. Requisites
The following are the esssential Requisites for
occupation:
(a) There must be a seizure or apprehension (the
material holding is not required as long as there is
right of disposition).
(b) The property seized must be corporeal personal
property.
(c) The property seized must be susceptible of
appropriation (either abandoned property — “res
derelicta,” or unowned property — “res nullius”).
(NOT res communes for these are owned in
common or public property.)
(d) There must be the intent to appropriate.
(e) The requisites or conditions of the law must be
complied with.
Occupation vs. Possession
Occupation can take place only with respect to property
without an owner; while possession can refer to all kinds of
property whether with or without an ownership.
 Occupation, in itself when proper, confers ownership; but
possession does not by itself give rise to ownership.
2. Ownership of Land
Article 714. The ownership of a piece of land cannot be
acquired by occupation.
The reason for the article is the fact that “when the land
is without owner, it pertains to the State.”
Although it is a fact that lands which never had an owner
belong to the State, still it is true that there is no legal express
provision authorizing the State to become owner of land which
formerly was owned by someone. In view however of Art. 714, it
is submitted that it can now be implied that all lands whether
originally with an owner, or without one, and which at present have
no owner, belong to the State. It is likewise submitted that
abandoned land (one with an owner before) becomes patrimonial
land of the State susceptible of acquisition thru acquisitive
prescription.
OCCUPATION PRESCRIPTION
(a) Original mode – no (a) Derivative mode –
owner somebody else was
owner
(b) Shorter period of (c) Generally, longer period
possession. of possession.
C. INTELLECTUAL CREATION
Article 721. By intellectual creation, the following persons
acquire ownership:
(1) The author with regard to his literary, dramatic,
historical, legal, philosophical, scientific or other work;
(2) The composer, as to his musical composition;
(3) The painter, sculptor, or other artist, with respect to the
product of his art;
(4) The scientist or technologist or any other person with
regard to his discovery or invention.
Intellectual creation is the product of mental labor
embodied in writing or some other material form.
1. Author and Composer
Article 722. The author and the composer, mentioned in
Nos. 1 and 2 of the preceding article, shall have the ownership of their
creations even before the publication of the same. Once their works are
published, their rights are governed by the Copyright laws.
The painter, sculptor or other artist shall have dominion
over the product of his art even before it is copyrighted.
The scientist or technologist has the ownership of his
discovery or invention even before it is patented.
The Article enumerates examples of this mode of
acquisition. Mere circulation among close friends and associates
however, is not considered publication.
2. Writings
Article 723. Letters and other private communications in
writing are owned by the person to whom they are addressed and
delivered, but they cannot be published or disseminated without the
consent of the writer or his heirs. However, the court may authorize
Page 103 of 121
their publication or dissemination if the public good or the interest of
justice so requires.
Distinction should be made between the letter (ideas,
thoughts) and the letter (paper, with words). The first in a way
belongs to the sender; the second to the recipient. Thus, the
recipient may burn the letter, and cannot be compelled to return
them to the sender. The sender may publish the letter (when he has
memorized its contents or kept a copy) even without the recipient’s
consent.
Rules:
a. The physical or material object is owned by he
person to whom it has been sent.
b. The thoughts, ideas, and form of expression
contained in the letter belong to the sender or author
of the letter.
c. The recipient cannot publish or disseminate the
letter, unless:
i. The writer or the writer’s heirs consent;
ii. The public good or the interest of justice so
requires as when (i) the publication is necessary
for the vindication of the character of the person
to whom the letter is addressed or (ii) the letter
is produced as evidence in court, in the course of
the administration of justice, except when the
letter constitutes a privileged communication
and cannot be admitted in evidence without the
consent of the writer.
X
DONATION
A. NATURE OF DONATIONS
Article 725. Donation is an act of liberality whereby a person
disposes gratuitously of a thing or right in favor of another, who
accepts it.
A donation, as a mode of acquiring ownership, results in
an effective transfer of title over the property from the donor to the
donee and once a donation is accepted, the donee becomes the
absolute owner of the property donated [Tangpico v. IAC].
Donation has the following elements: (a) the reduction of
the patrimony of the donor; (b) the increase in the patrimony of the
donee; and, (c) the intent to do an act of liberality or animus
donandi [Abella v. CIR].
To be considered a donation, an act of conveyance must
necessarily proceed freely from the donor's own, unrestrained
volition. A donation cannot be forced: it cannot arise from
compulsion, be borne by a requirement, or otherwise be impelled
by a mandate imposed upon the donor by forces that are external to
him or her. Article 726 of the Civil Code reflects this
commonsensical wisdom when it specifically states that
conveyances made in view of a "demandable debt" cannot be
considered true or valid donations. In jurisprudence, animus
donandi (that is, the intent to do an act of liberality) is an
indispensable element of a valid donation, along with the reduction
of the donor's patrimony and the corresponding increase in the
donee's patrimony [Republic v. Sps. Llamas].
 NOTE: When a person gets a life insurance and names a
third person as his beneficiary, and the insurance becomes payable
by the death of the insured, there is donation in favor of the
beneficiary – not in sum received by him from the insurer, but in
the total amount of premiums that have been paid by the insured.
This is the only amount that leaves the patrimony. If the amount of
premiums, however, exceeds the insurance, there is donation only
to the extent of the insurance. This is the only amount that is added
o the patrimony of the donee.
1. Classification of Donations
Article 726. When a person gives to another a thing or right
on account of the latter’s merits or of the services rendered by him to
the donor, provided they do not constitute a demandable debt, or when
the gift imposes upon the donee a burden which is less than the value of
the thing given, there is also a donation.
a. simple — the cause is pure liberality (no strings
attached) Example: A donates a parcel of land to B.
(FORM: that of donations).
Lagazo v. Court of Appeals
Held: We rule that the donation was simple, not onerous. Even
conceding that petitioner’s full payment of the purchase price of the lot
might have been a burden to him, such payment was not however imposed
by the donor as a condition for the donation. Rather, the deed explicitly
stated:
“That for and in consideration of the love and affection which
the DONEE inspires in the DONOR, and as an act of liberality and
generosity and considering further that the DONEE is a grandson of the
DONOR, the DONOR hereby voluntarily and freely gives, transfer[s] and
conveys, by way of donation unto said DONEE, his heirs, executors,
administrators and assigns, all the right, title and interest which the said
DONOR has in the above described real property, together with all the
buildings and improvements found therein, free from all lines [sic] and
encumbrances and charges whatsoever;”
It is clear that the donor did not have any intention to burden or
charge petitioner as the donee. The words in the deed are in fact typical of a
pure donation. We agree with Respondent Court that the payments made by
petitioner were merely his voluntary acts. This much can be gathered from
his testimony in court, in which he never even claimed that a burden or
charge had been imposed by his grandmother.
b. remuneratory — purpose: to reward past services,
with no strings attached. (The services here do not
constitute recoverable debts.).
Example: A donates a parcel of land to B, who had
previously helped him review for the bar examinations. (This is the
remuneratory donation referred to in Art. 726, “on account of the
services rendered by him to the donor, provided they do not
constitute a demandable debt’’).
Other examples: a donation to one who saved the donor’s
life (Manresa, Vol. 1, p. 676) or to the heirs of a deceased
corporation manager who in life was greatly responsible for the
corporation’s success. (Carla v. De la Rama Steamship Co., Inc., L-
5377, Dec. 29, 1954). (FORM: The form of donation should be
followed REGARDLESS of the true value of the past services
compared to the value of the donation.).
Reyes v. Asuncion
Page 104 of 121
Held: The subject contract in this case is seemingly a
remuneratory donation as all the elements for such are present. The CA
explained:
A painstaking review of the contract reveals that it is a
remuneratory donation. First, appellant expressed in the contract that "sa
loob ng sampling taon namin[g] pagsasama[,] nakita namin na naging
matapat siya sa kanyang obligations bilang taga pamahala [sic] ng aming
tubuhan at sa mga [k]ontratista at higit sa lahat ay marunong siya makisama
sa aming mga kasama at siya [ay] mapagkakatiwalaan lalo na sa pera.
Clearly, she gave the subject land to appellee to remunerate his ten (10)
years of faithful service to her. More importantly, appellant stated that
"napagkasunduan namin na kami ang bahala sa finances, sa kasunduan na
kami ang magpapakabyaw ng tubo sa pangalan ko, hanggang gusto ko. This
is a profit sharing agreement where appellant finances the planting,
harvesting and milling of sugarcane on the subject land donated to appellee
under appellant's name. Unmistakably, it is a charge or burden on the
donation.
However, as pointed out by the CA, the contract, as well as the
evidence presented during the trial, are silent as to the value of the burden,
hence, instead of the law on donations, the rules on contract should govern
the subject contract because the donation is onerous as the burden is
imposed upon the donee of a thing with an undetermined value.
Furthermore, the CA is also right in ruling that it is not necessary that the
contract be in a public instrument if it involves immovable property,
properly citing Pada-Kilario v. Court of Appeals which states that the
requirement of Article 1358 of the Civil Code that acts which have for their
object the creation, transmission, modification or extinguishment of real
rights over immovable property, must appear in a public document, is only
for convenience, non-compliance with which does not affect the validity or
enforceability of the acts of the parties as among themselves.
c. Conditional or modal — purpose: to reward future
services or because of certain future charges or
burdens, when the VALUE of said services,
burdens, or charges is LESS than the value of the
donation.
Example: A donates to B a parcel of land worth
P700,000 but B should give A a ring worth P150,000 or teach him
certain things, the value of the instruction being P90,000.
Forms to be followed
(1) Simple or remuneratory donations – form of
donations
(2) Onerous donations – contracts.
Illegal or Impossible Conditions
Articlce 727. Illegal or impossible conditions in simple and
remuneratory donations shall be considered as not imposed.
Like in testamentary dispositions (Art. 873), only the
illegal or impossible conditions are disregarded. The donation itself
remains valid. What is voided here is the impossible condition and
not the donation itself.
Liguez v. Court of Appeals
Held: Here the facts as found by the Court of Appeals (and
which we can not vary) demonstrate that in making the donation in
question, the late Salvador P. Lopez was not moved exclusively by the
desire to benefit appellant Conchita Liguez, but also to secure her
cohabiting with him, so that he could gratify his sexual impulses. This is
clear from the confession of Lopez to the witnesses Rodriguez and Ragay,
that he was in love with appellant, but her parents would not agree unless
he donated the land in question to her. Actually, therefore, the donation was
but one part of an onerous transaction (at least with appellant's parents) that
must be viewed in its totality. Thus considered, the conveyance was clearly
predicated upon an illicit causa.
Appellant seeks to differentiate between the alleged liberality of
Lopez, as causa for the donation in her favor, and his desire for cohabiting
with appellant, as motives that impelled him to make the donation, and
quotes from Manresa and the jurisprudence of this Court on the distinction
that must be maintained between causa and motives (De Jesus vs. Urrutia
and Co., 33 Phil. 171). It is well to note, however that Manresa himself
(Vol. 8, pp. 641-642), while maintaining the distinction and upholding the
inoperativeness of the motives of the parties to determine the validity of the
contract, expressly excepts from the rule those contracts that are
conditioned upon the attainment of the motives of either party.
. . . distincion importantisima, que impide anular el contrato por
la sola influencia de los motivos a no ser que se hubiera subordinando al
cumplimiento de estos como condiciones la eficacia de aquel.
The same view is held by the Supreme Court of Spain, in its
decisions of February 4, 1941, and December 4, 1946, holding that the
motive may be regarded as causa when it predetermines the purpose of the
contract.
In the present case, it is scarcely disputable that Lopez would
not have conveyed the property in question had he known that appellant
would refuse to cohabit with him; so that the cohabitation was an implied
condition to the donation, and being unlawful, necessarily tainted the
donation itself.
The Court of Appeals rejected the appellant's claim on the basis
of the well- known rule "in pari delicto non oritur actio" as embodied in
Article 1306 of 1889 (reproduced in Article 1412 of the new Civil Code):
ART. 1412. If the act in which the unlawful or forbidden cause
consists does not constitute a criminal offense, the following rules shall be
observed:
(1) When the fault is on the part of both contracting parties,
neither may recover what he has given by virtue of the contract, or demand
the performance of the other's undertaking;
(2) When only one of the contracting parties is at fault, he
cannot recover, what he has given by reason of the contract, or ask for
fulfillment of what has been promised him. The other, who is not at fault,
may demand the return of what he has given without any obligation to
comply with his promise.
In our opinion, the Court of Appeals erred in applying to the
present case the pari delicto rule. First, because it can not be said that both
parties here had equal guilt when we consider that as against the deceased
Salvador P. Lopez, who was a man advanced in years and mature
experience, the appellant was a mere minor, 16 years of age, when the
donation was made; that there is no finding made by the Court of Appeals
that she was fully aware of the terms of the bargain entered into by and
Lopez and her parents; that, her acceptance in the deed of donation (which
was authorized by Article 626 of the Old Civil Code) did not necessarily
imply knowledge of conditions and terms not set forth therein; and that the
substance of the testimony of the instrumental witnesses is that it was the
appellant's parents who insisted on the donation before allowing her to live
with Lopez. These facts are more suggestive of seduction than of immoral
bargaining on the part of appellant. It must not be forgotten that illegality is
not presumed, but must be duly and adequately proved.
In the second place, the rule that parties to an illegal contract, if
equally guilty, will not be aided by the law but will both be left where it
finds them, has been interpreted by this Court as barring the party from
pleading the illegality of the bargain either as a cause of action or as a
defense. Memo auditor propriam turpitudinem allegans. Said this Court in
Perez vs. Herranz, 7 Phil. 695-696:
It is unnecessary to determine whether a vessel for which a
certificate and license have been fraudulently obtained incurs forfeiture
under these or any other provisions of this act. It is enough for this case that
the statute prohibits such an arrangement as that between the plaintiff and
defendant so as to render illegal both the arrangement itself and all
contracts between the parties growing out of it.
It does not, however, follow that the plaintiff can succeed in this
action. There are two answers to his claim as urged in his brief. It is a
familiar principle that the courts will not aid either party to enforce an
illegal contract, but will leave them both where it finds them; but where the
plaintiff can establish a cause of action without exposing its illegality, the
Page 105 of 121
vice does not affect his right to recover. The American authorities cited by
the plaintiff fully sustain this doctrine. The principle applies equally to a
defense. The law in those islands applicable to the case is found in article
1305 of the Civil Code, shutting out from relief either of the two guilty
parties to an illegal or vicious contract.
In the case at bar the plaintiff could establish prima facie his
sole ownership by the bill of sale from Smith, Bell and Co. and the official
registration. The defendant, on his part, might overthrow this title by proof
through a certain subsequent agreement between him and the plaintiff,
dated March 16, 1902, that they had become owners in common of the
vessel, 'the agreement not disclosing the illegal motive for placing the
formal title in the plaintiff. Such an ownership is not in itself prohibited, for
the United States courts recognize the equitable ownership of a vessel as
against the holder of a legal title, where the arrangement is not one in fraud
of the law. (Weston vs. Penniman, Federal Case 17455; Scudder vs. Calais
Steamboat Company, Federal Case 12566.).
On this proof, the defendant being a part owner of the vessel,
would have defeated the action for its exclusive possession by the plaintiff.
The burden would then be cast upon the plaintiff to show the illegality of
the arrangement, which the cases cited he would not be allowed to do.
The rule was reaffirmed in Lima vs. Lini Chu Kao, 51 Phil. 477.
The situation confronting us is exactly analogous. The appellant
seeks recovery of the disputed land on the strength of a donation regular on
its face. To defeat its effect, the appellees must plead and prove that the
same is illegal. But such plea on the part of the Lopez heirs is not
receivable, since Lopez, himself, if living, would be barred from setting up
that plea; and his heirs, as his privies and successors in interest, can have no
better rights than Lopez himself.
Appellees, as successors of the late donor, being thus precluded
from pleading the defense of immorality or illegal causa of the donation,
the total or partial ineffectiveness of the same must be decided by different
legal principles. In this regard, the Court of Appeals correctly held that
Lopez could not donate the entirety of the property in litigation, to the
prejudice of his wife Maria Ngo, because said property was conjugal in
character and the right of the husband to donate community property is
strictly limited by law (Civil Code of 1889, Arts. 1409, 1415, 1413; Baello
vs. Villanueva, 54 Phil. 213).
ART. 1409. The conjugal partnership shall also be chargeable
with anything which may have been given or promised by the husband
alone to the children born of the marriage in order to obtain employment for
them or give then, a profession or by both spouses by common consent,
should they not have stipulated that such expenditures should be borne in
whole or in part by the separate property of one of them.".
ART. 1415. The husband may dispose of the property of the
conjugal partnership for the purposes mentioned in Article 1409.)
ART. 1413. In addition to his powers as manager the husband
may for a valuable consideration alienate and encumber the property of the
conjugal partnership without the consent of the wife.
The text of the articles makes it plain that the donation made by
the husband in contravention of law is not void in its entirety, but only in so
far as it prejudices the interest of the wife. In this regard, as Manresa points
out (Commentaries, 5th Ed., pp. 650-651, 652-653), the law asks no
distinction between gratuitous transfers and conveyances for a
consideration.
2. Donations Mortis Causa and Inter Vivos
Article 728. Donations which are to take effect upon the
death of the donor partake of the nature of testamentary provisions,
and shall be governed by the rules established in the Title on
Succession.
Article 729. When the donor intends that the donation shall
take effect during the lifetime of the donor, though the property shall
not be delivered till after the donor’s death, this shall be a donation
inter vivos. The fruits of the property from the time of the acceptance
of the donation, shall pertain to the donee, unless the donor provides
otherwise.

Article 732. Donations which are to take effect inter vivos
shall be governed by the general provisions on contracts and
obligations in all that is not determined in this Title.
a. Inter vivos:
(i) takes effect during the lifetime of the donor
(ii) must follow the formalities of donations (if
ordinary and simple)
(iii) cannot be revoked except for grounds provided
for by law
(iv) in case of impairment of the legitime,
donations inter vivos are preferred to donations
mortis causa (priority in time is priority in
right)
(v) the right of disposition is completely
transferred to the donee (although certain
reservations as to usufruct, for example, may
be made)
(vi) acceptance by donee must be during lifetime of
donor.
b. Mortis causa
(i) takes effect after the death of the donor
(ii) must follow the formalities of wills or codicils
(holographic or notarial)
(iii) can be revoked at any time and for any reason
while the donor is still alive (just as a will is
essentially revocable). In other words, this
donation is revocable ad mutuum, i.e., at the
discretion of the grantor or the so-called
“donor” simply because he has changed his
mind.
(iv) in case the legitime is impaired, donations
mortis causa (since they partake of the nature
of, or are really, legacies or devises) are
reduced ahead of donations inter vivos, the
latter being preferred.
(v) the right of disposition is not transferred to the
donee while the donor is still alive.
(vi) acceptance by donee mortis causa can only be
done after the donor’s death; any prior
acceptance is immaterial or void. (There can as
a rule be no contract relating to future
inheritance.)
Donations mortis causa partake the nature of
testamentary provisions and as such, said deeds must be executed
in accordance with the requisites on solemnities of wills and
testaments under Articles 805 and 806 of the Civil Code
[Maglasang v. Heirs of Cabatingan].
Donation inter vivos differs from donation mortis
causa in that in the former, the act is immediately operative even if
the actual execution may be deferred until the death of the donor,
while in the latter, nothing is conveyed to or acquired by the donee
until the death of the donor-testator. The following ruling of this
Court in Alejandro v. Geraldez is illuminating:
If the donation is made in contemplation of the
donor’s death, meaning that the full or naked ownership of the
donated properties will pass to the donee only because of the
Page 106 of 121
donor’s death, then it is at that time that the donation takes
effect, and it is a donation mortis causa which should be
embodied in a last will and testament.
But if the donation takes effect during the donor’s
lifetime or independently of the donor’s death, meaning that the
full or naked ownership (nuda proprietas) of the donated
properties passes to the donee during the donor’s lifetime, not by
reason of his death but because of the deed of donation, then the
donation is inter vivos.
The distinction between a transfer inter
vivos and mortis causa is important as the validity or revocation
of the donation depends upon its nature. If the donation is inter
vivos, it must be executed and accepted with the formalities
prescribed by Articles 748 and 749 of the Civil Code, except
when it is onerous in which case the rules on contracts will
apply. If it is mortis causa, the donation must be in the form of a
will, with all the formalities for the validity of wills, otherwise it
is void and cannot transfer ownership.
The distinguishing characteristics of a donation mortis
causa are the following:
a. It conveys no title or ownership to the transferee before the
death of the transferor; or, what amounts to the same thing,
that the transferor should retain the ownership (full or
naked) and control of the property while alive;
b. That before his death, the transfer should be revocable by
the transferor at will, ad nutum; but revocability may be
provided for indirectly by means of a reserved power in
the donor to dispose of the properties conveyed;
c. That the transfer should be void if the transferor should
survive the transferee
d. [T]he specification in a deed of the causes whereby the act
may be revoked by the donor indicates that the donation
is inter vivos, rather than a disposition mortis causa;
e. That the designation of the donation as mortis causa, or a
provision in the deed to the effect that the donation is "to
take effect at the death of the donor" are not controlling
criteria; such statements are to be construed together with
the rest of the instrument, in order to give effect to the real
intent of the transferor[;] [and]
f. That in case of doubt, the conveyance should be deemed
donation inter vivos rather than mortis causa, in order to
avoid uncertainty as to the ownership of the property
subject of the deed [Villanueva v. Sps. Branoco].
What is most significant in determining the type of
donation is the absence of stipulation that the donor could revoke
the donations; on the contrary, the deeds expressly declare them to
be “irrevocable”, a quality absolutely incompatible with the idea of
conveyances mortis causa where revocability is of the essence of
the act, to the extent that a testator cannot lawfully waive or restrict
his right of revocation [Austria-Magat v. Court of Appeals].
Prohibition to alienate does not necessarily defeat
the inter vivos character of the donation. It even highlights the fact
that what remains with the donor is the right of usufruct and not
anymore the naked title of ownership over the property donated
[Gestopa v. Court of Appeals].
Ganuelas v. Cawed
Held: In the donation subject of the present case, there is
nothing therein which indicates that any right, title or interest in the donated
properties was to be transferred to Ursulina prior to the death of Celestina.
The phrase “to become effective upon the death of the DONOR”
admits of no other interpretation but that Celestina intended to transfer the
ownership of the properties to Ursulina on her death, not during her
lifetime.
More importantly, the provision in the deed stating that if the
donee should die before the donor, the donation shall be deemed rescinded
and of no further force and effect shows that the donation is a postmortem
disposition.
As stated in a long line of cases, one of the decisive
characteristics of a donation mortis causa is that the transfer should be
considered void if the donor should survive the donee.
3. Suspensive Condition Which May Be Fulfilled
Beyond the Lifetime of the Donor
Article 730. The fixing of an event or the imposition of a
suspensive condition, which may take place beyond the natural
expectation of life of the donor, does not destroy the nature of the act as
a donation inter vivos, unless a contrary intention appears.
Example: A donated to B a piece of land, on condition
that X, A’s son, would become a lawyer. This condition may take
place beyond the lifetime of A, although A may have desired to see
the condition fulfilled while he is still alive. But the donation is
nevertheless a donation inter vivos, unless a contrary intention
appears. Hence, a public instrument, not a will, would be needed.
The fulfillment of the condition even after the death of
the donor does not affect the nature of the donation as inter vivos.
The fulfillment retroacts to the time of the donation.
4. Donation Subject to the Resolutory Condition of
the Donor’s Survival
Article 731. When a person donates something, subject to
the resolutory condition of the donor’s survival, there is a donation
inter vivos.
Example: A was about to undergo an operation. He
donated to B a parcel of land subject to the condition that if A
survives the operation, B’s ownership over the land would
terminate, and the same would revert to A. This is a donation inter
vivos, not mortis causa.
5. Onerous Donations
Article 733. Donations with an onerous cause shall be
governed by the rules on contracts, and remuneratory donations by the
provisions of the present Title as regards that portion which exceeds
the value of the burden imposed.
An onerous donation is that which imposes upon the
donee a reciprocal obligation or, to be more precise, this is the kind
of donation made for a valuable consideration, the cost of which is
equal to or more than the thing donated. Of all the classifications,
donations of the onerous type are the most distinct.  This is
because, unlike the other forms of donation, the validity of and the
rights and obligations of the parties involved in an onerous
donation is completely governed not by the law on donations but
by the law on contracts [Yulo v. Roman Catholic].  customs, public order and public policy.
Yulo v. Roman Catholic
Held: Here, the Court of Appeals correctly applied the law on
contracts instead of the law on donations because the donation involved in
this case is onerous, saddled as it is by a burden imposed upon the donee to
put up and operate a home for the aged and the infirm.  We thus quote with
approval the terse ruling of the appellate court in the challenged decision:
First, the violations of the conditions of the donation committed
by the donee were merely casual breaches of the conditions of the donation
and did not detract from the purpose by which the donation was made, i.e.,
Page 107 of 121
for the establishment of a home for the aged and the infirm.  In order for a
contract which imposes a reciprocal obligation, which is the onerous
donation in this case wherein the donor is obligated to donate a 41,117
square meter property in Canlubang, Calamba, Laguna on which property
the donee is obligated to establish a home for the aged and the infirm
(Exhibit C), may be rescinded per Article 1191 of the New Civil Code, the
breach of the conditions thereof must be substantial as to defeat the purpose
for which the contract was perfected (Tolentino, “Civil Code of the
Philippines,” Vol. IV, pp. 179-180; Universal Food Corp. v. Court of
Appeals, 33 SCRA 1, 18; Ocampo v. Court of Appeals, 233 SCRA 551,
562).  Thus, in the case of “Ocampo v. C.A.” (ibid), citing the case of
“Angeles v. Calasanz” (135 SCRA 323, 330), the Supreme Court ruled:
The right to rescind the contract for non-performance of one of
its stipulations x x x is not absolute.  In Universal Food Corp. v. Court of
Appeals (33 SCRA 1) the Court stated that:
The general rule is that rescission of a contract will not be
permitted for a slight or casual breach, but only for such substantial and
fundamental breach as would defeat the very object of the parties in making
the agreement (Song Fo & Co. v. Hawaiian-Philippine Co., 47 Phil.
821,827).  The question of whether a breach of a contract is substantial
depends upon the attendant circumstances (Corpus v. Hon. Alikpala, et al.,
L-23707 & L-23720, Jan. 17, 1968).
The above ruling of the Court of Appeals is completely in tune
with this Court’s disposition in Republic vs. Silim, supra.  The donor
therein sought to revoke the donation on the ground that the donee breached
the condition to exclusively and forever use the land for school purpose
only, but this Court ruled in favor of the donee:
Without the slightest doubt, the condition for the donation was
not in any way violated when the lot donated was exchanged with another
one.  The purpose for the donation remains the same, which is for the
establishment of a school.  The exclusivity of the purpose was not altered or
affected.  In fact, the exchange of the lot for a much bigger one was in
furtherance and enhancement of the purpose of the donation.  The
acquisition of the bigger lot paved way for the release of funds for the
construction of Bagong Lipunan school building which could not be
accommodated by the limited area of the donated lot.
As in Silim, the three (3) lease contracts herein entered into by
the donee were for the sole purpose of pursuing the objective for which the
donation was intended.  In fact, such lease was authorized by the donor by
express provision in the deed of donation, albeit the prior written consent
therefor of the donor is needed.  Hence, considering that the donee’s acts
did not detract from the very purpose for which the donation was made but
precisely to achieve such purpose, a lack of prior written consent of the
donor would only constitute casual breach of the deed, which will not
warrant the revocation of the donation.
Besides, this Court cannot consider the requirement of a prior
written consent by the donor for all contracts of lease to be entered into by
the donee as an absolute ground for revocation of the donation because such
a condition, if not correlated with the purpose of the donation, would
constitute undue restriction of the donee’s right of ownership over the
donated property.
Instructive on this point is the ruling of this Court in The Roman
Catholic Archbishop of Manila vs. Court of Appeals, viz:
Donation, as a mode of acquiring ownership, results in an
effective transfer of title over the property from the donor to the donee. 
Once a donation is accepted, the donee becomes the absolute owner of the
property donated.  Although the donor may impose certain conditions in the
deed of donation, the same must not be contrary to law, morals, good
x        x          x
In the case at bar, we hold that the prohibition in the deed of
donation against the alienation of the property for an entire century, being
an unreasonable emasculation and denial of an integral attribute of
ownership, should be declared as an illegal or impossible condition within
the contemplation of Article 727 of the Civil Code.  Consequently, as
specifically stated in said statutory provision, such condition shall be
considered as not imposed.  No reliance may accordingly be placed on said
prohibitory paragraph in the deed of donation.  The net result is that, absent
said proscription, the deed of sale supposedly constitutive of the cause of
action for the nullification of the deed of donation is not in truth violative of
the latter, hence, for lack of cause of action, the case for private respondents
must fail.
If petitioner would insist that the lack of prior written consent is
a resolutory condition that is absolute in character, the insistence would not
stand the validity test under the foregoing doctrine.  What would have been
casual breaches of the terms and conditions of the donation, may, in that
event, even be considered as no breach at all when the Court strikes down
such absolute condition of prior written consent by the donor in all
instances without any exception whatsoever.  The Court, however,
understands that such a condition was written with a specific purpose in
mind, which is, to ensure that the primary objective for which the donation
was intended is achieved.  A reasonable construction of such condition
rather than totally striking it would, therefore, be more in accord with the
spirit of the donation.  Thus, for as long as the contracts of lease do not
detract from the purpose for which the donation was made, the complained
acts of the donee will not be deemed as substantial breaches of the terms
and conditions of the deed of donation to merit a valid revocation thereof
by the donor.
De Luna v. Abrigo
Held: It is true that under Article 764 of the New Civil Code,
actions for the revocation of a donation must be brought within four (4)
years from the non-compliance of the conditions of the donation. However,
it is Our opinion that said article does not apply to onerous donations in
view of the specific provision of Article 733 providing that onerous
donations are governed by the rules on contracts.
In the light of the above, the rules on contracts and the general
rules on prescription and not the rules on donations are applicable in the
case at bar.
Under Article 1306 of the New Civil Code, the parties to a
contract have the right "to establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to
law, morals, good customs, public order or public policy." Paragraph 11 of
the "Revival of Donation Intervivos, has provided that "violation of any of
the conditions (herein) shall cause the automatic reversion of the donated
area to the donor, his heirs, x x x, without the need of executing any other
document for that purpose and without obligation on the part of the
DONOR". Said stipulation not being contrary to law, morals, good
customs, public order or public policy, is valid and binding upon the
foundation who voluntarily consented thereto.
The validity of the stipulation in the contract providing for the
automatic reversion of the donated property to the donor upon non-
compliance cannot be doubted. It is in the nature of an agreement granting a
party the right to rescind a contract unilaterally in case of breach, without
need of going to court. Upon the happening of the resolutory condition of
non-compliance with the conditions of the contract, the donation is
automatically revoked without need of a judicial declaration to that effect.
In the case of University of the Philippines v. de los Angeles, L-28602,
September 29, 1970, 35 SCRA 102-107, it was held:  donation of real property because such a donation need not be
"x x x There is nothing in the law that prohibits the parties from
entering into agreement that violation of the terms of the contract would
cause cancellation thereof, even without court intervention. In other words,
it is not always necessary for the injured party to resort to court for
rescission of the contract. (Froilan v. Pan Oriental Shipping Co., et al., L-
11897, 31 October 1964, 12 SCRA 276)."
This was reiterated in the case of Angeles v. Calasanz, L-42283,
March 18, 1985:  mortis causa?
"Well settled is, however, the rule that a judicial action for the
rescission of a contract is not necessary where the contract provides that it
may be revoked and cancelled for violation of any of its terms and
conditions (Lopez v. Commissioner of Customs, 37 SCRA 327, 334, and
cases cited therein).  For purposes of marriage, a person may contract
"Resort to judicial action for rescission is obviously not
contemplated.... The validity of the stipulation can not be seriously
disputed. It is in the nature of a facultative resolutory condition which in
many cases has been upheld, by this court. (Ponce Enrile v. Court of
Appeals, 29 SCRA 504)"
However, in the University of the Philippines v. Angeles case,  to be made parties to the marriage settlements was impliedly
(supra), it was held that in cases where one of the parties contests or denies
Page 108 of 121
the rescission, "only the final award of the court of competent jurisdiction
can conclusively settle whether the resolution is proper or not". It was held,
thus: 
"x x x since in every case, where the extrajudicial resolution is
contested, only the final award of the court of competent jurisdiction can
conclusively settle whether the resolution was proper or not. It is in this
sense that judicial action will be necessary as without it, the extrajudicial
resolution will remain contestable and subject to judicial invalidation,
unless attack thereon should become barred by acquiescence, estoppel or
prescription."
It is clear, however, that judicial intervention is necessary not
for purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to determine
whether or not the rescission was proper.
The case of Parks v. Province of Tarlac, supra, relied upon by
the trial court, is not applicable in the case at bar. While the donation
involved therein was also onerous, there was no agreement in the donation
providing for automatic rescission, thus, the need for a judicial declaration
revoking said donation.
The trial court was therefore not correct in holding that the
complaint in the case at bar is barred by prescription under Article 764 of
the New Civil Code because Article 764 does not apply to onerous
donations.
As provided in the donation executed on April 9, 1971,
compliance with the terms and conditions of the contract of donation, shall
be made within five (5) years from its execution. The complaint which was
filed on September 23, 1980 was then well within the ten (10) year
prescriptive period to enforce a written contract (Article 1144(1), New Civil
Code), counted from April 9, 1976.
B. PERSON WHO MAY GIVE OR RECEIVE A
DONATION
1. Capacity
Article 735. All persons who may contract and dispose of
their property may make a donation.
It is not enough that a person be capacitated to contract;
he must also have capacity to dispose (by acts inter vivos) of his
property.
Example: A, minor, 17 years of age, who has been
emancipated by parental concession (Art. 234, Family Code), and
who therefore can make a contract involving personal property
(Art. 236, id.), is now allowed by himself or herself to make a
effected thru a guardian (Art. 236, id.), although necessitating its
embodiment in a public instrument. (Art. 749, Civil Code). He is
nonetheless allowed to donate personal property without parental
consent or without intervention of a guardian. (See Art. 236, id.).
May an emancipated minor by himself make donation
ANS.: Yes, because at the age of 17, a person of sound
mind can already make a valid will.
a. Capacity of a minor
marriage at the age of 18 years. But may he enter into a marriage
settlement wherein he may dispose of his future property in favor
of his prospective spouse without the intervention of the parents?
Article 78 of the Family Code which requires the parents
repealed by RA 6809, wherein marriage settlements may now be
entered by the child personally even without the intervention of the
parents.
b. Capacity of the Husband or Wife
Husbands or wives may donate their own capital or
paraphernal properties without the consent of the other. But with
respect to conjugal or community property, they cannot make
donations without the consent of the other, except: moderate
donations for charity or on occasion of family rejoicing or family
distress.
Unless she is the administratrix of the conjugal
partnership, she cannot donate conjugal property without the
husband’s consent except in the case of a moderate donation for
charity or on occasions of family rejoicing or family distress. (Art.
125, Family Code). With respect to her exclusive property, she
may, if of age, dispose of the same without the consent of the
husband. (See Art. 111, id.).
May husbands and wives donate to each other?
Under Article 87 of the Family Code, every donation or
grant of gratuitous advantage, direct or indirect, between the
spouses during the marriage shall be void, except moderate gifts
which the spouses may give each other on the occasion of any
family rejoicing. The prohibition shall also apply to persons living
together as husband and wife without a valid marriage.
What is moderate may be determined based on the
financial status of the family.
c. Guardians and Trustees
Article 736. Guardians and trustees cannot donate the
property entrusted to them.
Guardians and trustees may of course donate their own
properties, unless they are otherwise disqualified by the law, but
not the property entrusted to them, for the simple reason that they
are not the owners thereof.
2. Donor’s Capacity
Article 737. The donor’s capacity shall be determined as of
the time of the making of the donation.
“Making” must be interpreted to mean “perfection” of
the donation, otherwise if “making” means “giving,” Art. 737
would in some cases be inconsistent with Art. 734 which states that
“the donation is perfected from the moment the donor knows of the
acceptance by the donee.” To avoid a contradiction, the rule may
be stated thus: “at the time the donation is perfected, both the donor
and the donee must be capacitated.” In order for a donation of
property to be valid, what is crucial is the donor's capacity to give
consent at the time of the donation. Certainly, there lies no doubt in
the fact that insanity or unsoundness of the disposing mind
impinges on consent freely given. However, the burden of proving
such incapacity rests upon the person who alleges it. If no
sufficient proof to this effect is presented, capacity will be
presumed [Lavarez v. Guevarra].
Catalan v. Basa
Held: A thorough perusal of the records of the case at bar
indubitably shows that the evidence presented by the petitioners was
insufficient to overcome the presumption that Feliciano was competent
Page 109 of 121
when he donated the property in question to Mercedes. Petitioners make
much ado of the fact that, as early as 1948, Feliciano had been found to be
suffering from schizophrenia by the Board of Medical Officers of the
Department of Veteran Affairs. By itself, however, the allegation cannot
prove the incompetence of Feliciano.
A study of the nature of schizophrenia will show that Feliciano
could still be presumed capable of attending to his property rights.
Schizophrenia was brought to the attention of the public when, in the late
1800s, Emil Kraepelin, a German psychiatrist, combined "hebrephrenia"
and "catatonia" with certain paranoid states and called the condition
"dementia praecox." Eugene Bleuler, a Swiss psychiatrist, modified
Kraepelin's conception in the early 1900s to include cases with a better
outlook and in 1911 renamed the condition "schizophrenia." According to
medical references, in persons with schizophrenia, there is a gradual onset
of symptoms, with symptoms becoming increasingly bizarre as the disease
progresses. The condition improves (remission or residual stage) and
worsens (relapses) in cycles. Sometimes, sufferers may appear relatively
normal, while other patients in remission may appear strange because they
speak in a monotone, have odd speech habits, appear to have no emotional
feelings and are prone to have "ideas of reference." The latter refers to the
idea that random social behaviors are directed against the sufferers. It has
been proven that the administration of the correct medicine helps the
patient. Antipsychotic medications help bring biochemical imbalances
closer to normal in a schizophrenic. Medications reduce delusions,
hallucinations and incoherent thoughts and reduce or eliminate chances of
relapse. Schizophrenia can result in a dementing illness similar in many
aspects to Alzheimer's disease. However, the illness will wax and wane
over many years, with only very slow deterioration of intellect.
From these scientific studies it can be deduced that a person
suffering from schizophrenia does not necessarily lose his competence to
intelligently dispose his property. By merely alleging the existence of
schizophrenia, petitioners failed to show substantial proof that at the date of
the donation, June 16, 1951, Feliciano Catalan had lost total control of his
mental faculties. Thus, the lower courts correctly held that Feliciano was of
sound mind at that time and that this condition continued to exist until proof
to the contrary was adduced. Sufficient proof of his infirmity to give
consent to contracts was only established when the Court of First Instance
of Pangasinan declared him an incompetent on December 22, 1953.
It is interesting to note that the petitioners questioned Feliciano's
capacity at the time he donated the property, yet did not see fit to question
his mental competence when he entered into a contract of marriage with
Corazon Cerezo or when he executed deeds of donation of his other
properties in their favor. The presumption that Feliciano remained
competent to execute contracts, despite his illness, is bolstered by the
existence of these other contracts. Competency and freedom from undue
influence, shown to have existed in the other acts done or contracts
executed, are presumed to continue until the contrary is shown.[32]
Heirs of Sevilla v. Sevilla
Held: There is no effective consent in law without the capacity
to give such consent. In other words, legal consent presupposes capacity.
Thus, there is said to be no consent, and consequently, no contract when
the agreement is entered into by one in behalf of another who has never
given him authorization therefor unless he has by law a right to represent
the latter.
In the case at bar, at the time Felisa executed the deed of extra-
judicial partition dividing the share of her deceased sister Honarata between
her and the heirs of Filomena Almirol de Sevilla, she was no longer the
owner of the 1/2 undivided portion of Lot No. 653, having previously
donated the same to respondent Leopoldo Sevilla who accepted the
donation in the same deed. A donation inter vivos, as in the instant case, is
immediately operative and final.[36] As a mode of acquiring ownership, it
results in an effective transfer of title over the property from the donor to
the donee and the donation is perfected from the moment the donor knows
of the acceptance by the donee. And once a donation is accepted, the donee
becomes the absolute owner of the property donated.
Evidently, Felisa did not possess the capacity to give consent to
or execute the deed of partition inasmuch as she was neither the owner nor
the authorized representative of respondent Leopoldo to whom she
previously transmitted ownership of her undivided share in Lot No. 653.
Considering that she had no legal capacity to give consent to the deed of
partition, it follows that there is no consent given to the execution of the
deed, and therefore, there is no contract to speak of. As such, the deed of
partition is void ab initio, hence, not susceptible of ratification.
3. Void Donations
Article 739. The following donations shall be void:
(1) Those made between persons who are guilty of adultery
or concubinage at the time of the donation;
(2) Those made between persons found guilty of the same
criminal offense, in consideration thereof;
(3) Those made to a public officer or his wife, descendants
and ascendants, by reason of his office.
In the case referred to in No. 1, the action for declaration of
nullity may be brought by the spouses of the donor or donee; and the
guilt of the donor and donee may be proved by preponderance of
evidence in the same action.
a. Paramours
Paragraph 1 refers to donations between paramours.
There is no necessity of proving guilt in a criminal proceeding. It is
enough that the guilt may be proven by a preponderance of
evidence in a civil action for the declaration of nullity of the
donation.
The commission of the adultery or concubinage must be
at the time of the donation and not after. When the purpose of the
donation is to initiate, continue, resume or compensate the illicit
relations between the paramours, the donation is void. But if the
intention is to indemnify the damage caused to the other at the time
of separation, the donation is valid.
Heirs of Maramag v. De Guzman
Held: Petitioners are third parties to the insurance contracts with
Insular and Grepalife and, thus, are not entitled to the proceeds thereof.  or his spouse, descendants or ascendants by reason of his office.
Accordingly, respondents Insular and Grepalife have no legal obligation to
turn over the insurance proceeds to petitioners.  The revocation of Eva as a
beneficiary in one policy and her disqualification as such in another are of
no moment considering that the designation of the illegitimate children as
beneficiaries in Loreto's insurance policies remains valid.  Because no legal
proscription exists in naming as beneficiaries the children of illicit
relationships by the insured,[22]  the shares of Eva in the insurance proceeds,
whether forfeited by the court in view of the prohibition on donations under
Article 739 of the Civil Code or by the insurers themselves for reasons
based on the insurance contracts, must be awarded to the said illegitimate
children, the designated beneficiaries, to the exclusion of petitioners.  It is
only in cases where the insured has not designated any beneficiary, [23] or
when the designated beneficiary is disqualified by law to receive the
proceeds,[24] that the insurance policy proceeds shall redound to the benefit
of the estate of the insured.
Bienvenido v. Court of Appeals
Held: The Court of Appeals held that the sale of the property to
Nenita is void on the principle embodied in art. 739(1) of the Civil Code
which declares donations made between persons who are guilty of adultery
or concubinage at the time of the donation to be void. In the first place, an
action for declaration of the nullity of such donations can only be brought
by the innocent spouse, perhaps in this case by the first wife, but certainly
not by Luisita whose marriage to Aurelio is itself void.
Insular Life v. Ebrado
Held: In essence, a life insurance policy is no different from a
civil donation insofar as the beneficiary is concerned.  Both are founded
upon the same consideration:  liberality.  A beneficiary is like a donee,
because from the premiums of the policy which the insured pays out of
Page 110 of 121
liberality, the beneficiary will receive the proceeds or profits of said in-
surance.  As a consequence, the proscription in Article 739 of the new Civil
Code should equally operate in life insurance contracts.  The mandate of
Article 2012 cannot be laid aside:  any person who cannot receive a
donation cannot be named as beneficiary in the life insurance policy of the
person who cannot make the donation. [5] Under American law, a policy of
life insurance is considered as a testament and in construing it, the courts
will, so far as possible treat it as a will and determine the effect of a clause
designating the beneficiary by rules under which wills are interpreted.
3.  Policy considerations and dictates of morality rightly justify
the institution of a barrier between common-law spouses in regard to
property relations since such relationship ultimately encroaches upon the
nuptial and filial rights of the legitimate family.  There is every reason to
hold that the bar in donations between legitimate spouses and those
between illegitimate ones should be enforced in life insurance policies since
the same are based on similar consideration.  As above pointed out, a
beneficiary in a life insurance policy is no different from a donee.  Both are
recipients of pure beneficence.  So long as marriage remains the threshold
of family laws, reason and morality dictate that the impediments imposed
upon married couple should likewise be imposed upon extra-marital
relationship.  If legitimate relationship is circumscribed by these legal
disabilities, with more reason should an illicit relationship be restricted by
these disabilities.  
b. Persons Guilty of Same Crime
Paragraph 2 refers to those made between persons found
guilty of the same criminal offense, in consideration thereof. Thus,
if a person agrees to kill another in consideration of a donation to
be made in his favor, the donation is void. The consideration is
illegal, the donation must necessarily be void.
NOTE: There must be a conviction.
c.Donations Directly or Indirectly to a Public
Officer
Paragraph 3 refers to donations made to a public officer
The purpose for the rule is to prevent bribery.
6. Persons Disqualified
Article 740. Incapacity to succeed by will shall be applicable
to donations inter vivos.
Under the law of succession, there are two kinds of
incapacity to inherit —
(a) absolute incapacity — where in no case can there be
a transmission of the inheritance (Example: an
abortive infant.)
(b) relative incapacity — where under certain
conditions, a particular person cannot inherit from a
particular decedent. (Example: The priest who heard
the confession of the testator during his last illness.)
The following persons are disqualified:
a. The priest who heard the confession of the donor
during his last illness, or
b. The minister of the gospel who extended spiritual aid
to him during the same period;
c. The relatives of such priest or minister of the gospel
within the 4th civil degree, the church of the order, the
chapter, community, organization, or institution to
which such priest or minister belongs;
 d. The guardian with respect to donations made by the
ward in his favor before the final accounts of the
guardianship have been approved, even if the donor
should die after the approval thereof; nevertheless any
donation made by the ward in favor of the guardian
when the latter is his ascendant, descendant, brother,
sister, or spouse, shall be valid;
e. Any physician, surgeon, nurse, health officer, or
druggist who took care of the donor during his last
illness;
f. Individuals, associations and corporations not
permitted by law to receive donations.
NOTE: The incapacity to inherit by reason of
unworthiness provided in Article 1032 is not included within the
scope of the above article.
A donation made to a person who falls under the
provisions of said article would be valid, because a testamentary
provision made in favor of such person after the testator has
knowledge of the act of unworthiness would constitute pardon
under Article 1033.
On the other hand, if the donation has already been made
when the cause of unworthiness occurs, the donation is revoked
only by the causes mentioned in Articles 760, 764 and 765.
7. Donations to Two or More Different Donees
Article 744. Donations of the same thing to two or more
different donees shall be governed by the provisions concerning the
sale of the same thing to two or more different persons.
If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall
belong to the person acquiring it who in good faith first recorded it
in the Registry of Property.
Should there be no inscription, the ownership shall
pertain to the person who in good faith was fi rst in the possession;
and, in the absence thereof, to the person who presents the oldest
title, provided there is good faith. (Art. 1544, Civil Code).
8. Acceptance
Article 734. The donation is perfected from the moment the
donor knows of the acceptance by the donee.
Article 745. The donee must accept the donation personally,
or through an authorized person with a special power for the purpose,
or with a general and sufficient power; otherwise, the donation shall be
void.
The donation is perfected, not from the time of
acceptance but from the time of knowledge by the donor that the
donee has accepted. (The knowledge may of course be actual or
constructive). If there is no acceptance, the donation will of course
be null and void.
Acceptance (of a donation inter vivos) must be made
during the lifetime of the donor and of the donee. (Art. 746).
Prior to learning of the acceptance, there is as yet no
perfected donation (no donation at all), hence, the donor may give
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the property to somebody else, for he has not really parted with the
disposition of the property.
If the donation and the acceptance are in the same
instrument, containing the signatures of both donor and donee, it is
understood that there is already knowledge of the acceptance,
hence, the donation is already perfected [Laureta v. Mata].
a. Who May Accept
Article 738. All those who are not specially disqualified by
law therefor may accept donations.
“Specially disqualified’’ does not refer to those
incapacitated to contract like minors or those of unsound mind, but
to people such as those mentioned in Art. 739, and husbands and
wives with respect to immoderate donations from each other
(donations of spouses inter se).
Since the law does not distinguish, both natural and
juridical persons may become donees. An unregistered partnership
may become a donee because it is a juridical or artifi cial person
despite its non-registration. But the conjugal partnership itself, not
being natural or juridical, cannot be a donee. Instead, the donation
should be given by the stranger to the husband and wife, the share
of the husband being credited to his capital, and that of the wife
being considered part of her paraphernal property.
Missionary Sisters v. Alzona
Held: There is no question that the true intent of Purificacion,
the donor and the owner of the properties in question, was to give, out of
liberality the subject house and lot, which she owned, to the petitioner. This
act, was then contained in a public document, the deed having been
acknowledged before Atty. Arcillas, a Notary Public. 36 The acceptance of
the donation is made on the same date that the donation was made and
contained in the same instrument as manifested by Mother Concepcion's
signature.37 In fine, the remaining issue to be resolved is the capacity of the
petitioner as donee to accept the donation, and the authority of Mother
Concepcion to act on its behalf for this purpose.
Under Article 737 of the Civil Code, "[t]he donor's capacity
shall be determined as of the time of the making of the donation." By
analogy, the legal capacity or the personality of the donee, or the authority
of the latter's representative, in certain cases, is determined at the time of
acceptance of the donation.
Article 738, in relation to Article 745, of the Civil Code
provides that all those who are not specifically disqualified by law may
accept donations either personally or through an authorized representative
with a special power of attorney for the purpose or with a general and
sufficient power.
The Court finds that for the purpose of accepting the donation,
the petitioner is deemed vested with personality to accept, and Mother
Concepcion is clothed with authority to act on the latter's behalf.
At the outset, it must be stated that as correctly pointed out by
the CA, the RTC erred in holding that the petitioner is a de
facto corporation.
Jurisprudence settled that "[t]he filing of articles of
incorporation and the issuance of the certificate of incorporation are
essential for the existence of a de facto corporation." In fine, it is the act of
registration with SEC through the issuance of a certificate of incorporation
that marks the beginning of an entity's corporate existence.
Petitioner filed its Articles of Incorporation and by-laws on
August 28, 2001. However, the SEC issued the corresponding Certificate of
Incorporation only on August 31, 2001, two (2) days after Purificacion
executed a Deed of Donation on August 29, 2001. Clearly, at the time the
donation was made, the Petitioner cannot be considered a corporation de
facto. 
 Rather, a review of the attendant circumstances reveals that it
calls for the application of the doctrine of corporation by estoppel as
provided for under Section 21 of the Corporation Code, viz.:
Sec. 21. Corporation by estoppel. - All persons who assume to
act as a corporation knowing it to be without authority to do so shall be
liable as general partners for all debts, liabilities and damages incurred or
arising as a result thereof: Provided, however, That when any such
ostensible corporation is sued on any transaction entered by it as a
corporation or on any tort committed by it as such, it shall not be allowed to
use as a defense its lack of corporate personality.
One who assumes an obligation to an ostensible corporation
as such, cannot resist performance thereof on the ground that there
was in fact no corporation.  children may be accepted by those persons who would legally represent
The doctrine of corporation by estoppel is founded on principles
of equity and is designed to prevent injustice and unfairness. It applies
when a non-existent corporation enters into contracts or dealings with third
persons.41 In which case, the person who has contracted or otherwise dealt
with the non-existent corporation is estopped to deny the latter's legal
existence in any action leading out of or involving such contract or dealing.
While the doctrine is generally applied to protect the sanctity of dealings
with the public,42 nothing prevents its application in the reverse, in fact the
very wording of the law which sets forth the doctrine of corporation by
estoppel permits such interpretation. Such that a person who has assumed
an obligation in favor of a non-existent corporation, having transacted with
the latter as if it was duly incorporated, is prevented from denying the
existence of the latter to avoid the enforcement of the contract.
Jurisprudence dictates that the doctrine of corporation by
estoppel applies for as long as there is no fraud and when the existence of
the association is attacked for causes attendant at the time the contract or
dealing sought to be enforced was entered into, and not thereafter.
In this controversy, Purificacion dealt with the petitioner as if it
were a corporation. This is evident from the fact that Purificacion executed
two (2) documents conveying her properties in favor of the petitioner –
first, on October 11, 1999 via handwritten letter, and second, on August 29,
2001 through a Deed; the latter having been executed the day after the
petitioner filed its application for registration with the SEC.
The doctrine of corporation by estoppel rests on the idea that if
the Court were to disregard the existence of an entity which entered into a
transaction with a third party, unjust enrichment would result as some form
of benefit have already accrued on the part of one of the parties. Thus, in
that instance, the Court affords upon the unorganized entity corporate
fiction and juridical personality for the sole purpose of upholding the
contract or transaction.
In this case, while the underlying contract which is sought to be
enforced is that of a donation, and thus rooted on liberality, it cannot be
said that Purificacion, as the donor failed to acquire any benefit therefrom
so as to prevent the application of the doctrine of corporation by
estoppel.45 To recall, the subject properties were given by Purificacion, as a
token of appreciation for the services rendered to her during her illness. 46 In
fine, the subject deed partakes of the nature of a remuneratory or
compensatory donation, having been made "for the purpose of rewarding
the donee for past services, which services do not amount to a demandable
debt."
Anent the authority of Mother Concepcion to act as
representative for and in behalf of the petitioner, the Court similarly
upholds the same. Foremost, the authority of Mother Concepcion was never
questioned by the petitioner. In fact, the latter affirms and supports the
authority of Mother Concepcion to accept the donation on their behalf; as
she is, after all the congregation's Superior General. 60 Furthermore, the
petitioner's avowal of Mother Concepcion's authority after their SEC
registration is a ratification of the latter's authority to accept the subject
donation as the petitioner's representative.
In closing, it must be emphasized that the Court is both of law
and of justice. Thus, the Court's mission and purpose is to apply the
law with justice.
Donation is an expression of our social conscience, an act rooted
purely on the goodness of one's heart and intent to contribute.
Purificacion, the donor is worthy of praise for her works of
charity. Likewise, the petitioner is worthy of admiration for with or without
Page 112 of 121
the promise of reward or consideration, the Court is certain that it is
impelled by sincere desire to help the petitioner in overcoming her illness.
i. Acceptance of Donations made to Minors
and Unborn Children
Article 741. Minors and others who cannot enter into a
contract may become donees but acceptance shall be done through
their parents or legal representatives.
Article 742. Donations made to conceived and unborn
them if they were already born.
ii. Donations to Incapacitated Persons
Article 743. Donations made to incapacitated persons shall
be void, though simulated under the guise of another contract or
through a person who is interposed.
b. When Acceptance Made
Article 746. Acceptance must be made during the lifetime of
the donor and of the donee.
The rule enunciated herein is applicable to donations
inter vivos as well as donations which are onerous. In the case of
onerous donations (contracts) without unconditional acceptance,
there is no meeting of the mind, and therefore no perfection of the
contract.
Reason: The donation is personal between the donor and
the donee.
While this kind of donation should also be accepted to be
effective, still the acceptance by the donee must be made only after
the donor’s death. The reason in this donation is really either a
devise or a legacy, and is governed by the rules of testamentary
succession. Any acceptance made by the donee during the lifetime
of the donor is of no effect, and gives the donee no vested right
thereto, because a donation mortis causa, like a will, is essentially
revocable even without a justifiable cause.
Upon the other hand, the donee mortis causa need not
accept the donation during his lifetime as long as he did not
predecease the donor. Hence acceptance, in this case, may be made
expressly or impliedly by the donee’s heirs. If the donee
predeceases the donor, the donee’s heirs cannot accept in his
behalf, because a donee mortis causa transmits no right (to the
donation) to his own heirs.
c. Additional Duty of Those Who Accept for
Others
Article 747. Persons who accept donations in representation
of others who may not do so by themselves, shall be obliged to make the
notification and notation of which Article 749 speaks.
It is understood that the “persons’’ referred to here are
duly authorized to do the acceptance.
Notification and notation, in the proper cases, are
essential for the perfection of the donation.
C. FORMS OF ACCEPTANCE
1. Donation of Movable Property

Article 748. The donation of a movable may be made orally
or in writing.
An oral donation requires the simultaneous delivery of the
thing or of the document representing the right donated.
If the value of the personal property donated exceeds five
thousand pesos, the donation and acceptance shall be made in writing.
Otherwise, the donation shall be void.
The formalities in this article are very important. Without
them, the donation is not only voidable. It is completely void.
(a) If the value of the donated movable is more than
P5,000:
Should always be in writing. The acceptance must also
be in writing. Hence, if the donation is made in an affidavit, and the
donee merely signifies his acceptance orally, the donation is null
and void.
Lentfer v. Wolff
Held: Petitioners could not brush aside the fact that a donation
must comply with the mandatory formal requirements set forth by law for
its validity. Since the subject of donation is the purchase money, Art. 748 of
the New Civil Code is applicable.  Accordingly, the donation of money
equivalent to P3,297,800 as well as its acceptance should have been in
writing.  It was not.  Hence, the donation is invalid for non-compliance with
the formal requisites prescribed by law
(b) If the value of the donated movable is P5,000 or
less:
(i) can be made orally. (But here there must be —
 simultaneous delivery of thing, or
 simultaneous delivery of the document
representing the right donated.
(Acceptance may of course be oral or
written, express or implied.)
(ii) can be made in writing.
2. Donation of Real Property
Article 749. In order that the donation of an immovable may
be valid, it must be made in a public document, specifying therein the
property donated and the value of the charges which the donee must
satisfy.
The acceptance may be made in the same deed of donation
or in a separate public document, but it shall not take effect unless it is
done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the
donor shall be notified thereof in an authentic form, and this step shall
be noted in both instruments.
Without the formalities stated in this article, the donation
of realty is null and void, not merely voidable. This is because a
donation of real property is a solemn contract. Upon the other
hand, if an instrument merely acknowledges ownership of land by
another, no donation is involved.
In order that a donation of an immovable property be
valid, the following elements must be present: (a) the essential
reduction of the patrimony of the donor; (b) the increase in the
patrimony of the donee; (c) the intent to do an act of liberality
Page 113 of 121
or animus donandi; (d) the donation must be contained in a public
document; and e) that the acceptance thereof be made in the same
deed or in a separate public instrument; if acceptance is made in a
separate instrument, the donor must be notified thereof in an
authentic form, to be noted in both instruments [Missionary Sisters
v. Alzona].
In Sumipat v. Banga, this Court declared that title to
immovable property does not pass from the donor to the donee by
virtue of a Deed of Donation until and unless it has been
accepted in a public instrument and the donor duly notified
thereof. The acceptance may be made in the very same instrument
of donation. If the acceptance does not appear in the same
document, it must be made in another. Where the Deed of
Donation fails to show the acceptance, or where the formal notice
of the acceptance, made in a separate instrument, is either not given
to the donor or else not noted in the Deed of Donation and in the
separate acceptance, the donation is null and void.
(a) If the deed of donation and the acceptance are in
the same instrument:
(i) The instrument must be a public document.
(ii) The document must specify the property
donated and the charges (burdens), if any.
(b) If the deed of donation and the acceptance are
NOT in the same instrument:
(i) The donation must be in a public instrument or
document.
(ii) The document must specify the property
donated and the charges, if any. [NOTE: A
donation which does not identify the land
donated is of no effect and is therefore void.
(iii) The acceptance in a separate instrument must
be in a public instrument.
(iv) The donor shall be notified in authentic form
of the fact that acceptance is being made or
has been made in a separate public instrument.
(v) The fact that there has been a notification must
be noted in both instruments.
Unchuan v. Lozada
Held:  Here, the Deed of Donation does not appear to be duly
notarized. In page three of the deed, the stamped name of Cresencio
Tomakin appears above the words Notary Public until December 31, 1983
but below it were the typewritten words Notary Public until December 31,
1987. A closer examination of the document further reveals that the
number 7 in 1987 and Series of 1987 were merely superimposed. This was
confirmed by petitioner's nephew Richard Unchuan who testified that he
saw petitioner's husband write 7 over 1983 to make it appear that the deed
was notarized in 1987. Moreover, a Certification from Clerk of Court
Jeoffrey S. Joaquino of the Notarial Records Division disclosed that the
Deed of Donation purportedly identified in Book No. 4, Document No. 48,
and Page No. 35 Series of 1987 was not reported and filed with said office.
Pertinent to this, the Rules require a party producing a document as genuine
which has been altered and appears to have been altered after its execution,
in a part material to the question in dispute, to account for the alteration. He
may show that the alteration was made by another, without his concurrence,
or was made with the consent of the parties affected by it, or was otherwise
properly or innocently made, or that the alteration did not change the
meaning or language of the instrument. If he fails to do that, the document
shall, as in this case, not be admissible in evidence.
 Arangote v. Maglunob
Held:  The acceptance of the said donation was not made by the
petitioner and her husband either in the same Affidavit or in a separate
public instrument. As there was no acceptance made of the said donation,
there was also no notice of the said acceptance given to the donor,
Esperanza. Therefore, the Affidavit executed by Esperanza in favor of
petitioner and her husband is null and void.
The subsequent notarized Deed of Acceptance [39] dated 23
September 2000, as well as the notice [40] of such acceptance, executed by
the petitioner did not cure the defect. Moreover, it was only made by the
petitioner several years after the Complaint was filed in court, or when the
RTC had already rendered its Decision dated 12 September 2000, although
it was still during Esperanza's lifetime. Evidently, its execution was a mere
afterthought, a belated attempt to cure what was a defective donation.
It is true that the acceptance of a donation may be made at
any time during the lifetime of the donor. And granting arguendo that
such acceptance may still be admitted in evidence on appeal, there is still
need for proof that a formal notice of such acceptance was received by
the donor and noted in both the Deed of Donation and the separate
instrument embodying the acceptance. At the very least, this last legal
requisite of annotation in both instruments of donation and acceptance was
not fulfilled by the petitioner. Neither the Affidavit nor the Deed of
Acceptance bears the fact that Esperanza received notice of the acceptance
of the donation by petitioner. For this reason, even Esperanza's one-third
share in the subject property cannot be adjudicated to the petitioner.
With the foregoing, this Court holds that the RTC and the Court
of Appeals did not err in declaring null and void Esperanza's Affidavit.
Registration
The registration in the Registry of Property of the
donation of real property is not needed for validity between the
parties and their assigns; the registration is only useful for binding
third parties.
Article 749 of the Civil Code requires that donation of
real property must be made in a public instrument to be valid.
In Department of Education, Culture and Sports (DECS) v. Del
Rosario, We stated:
A deed of donation acknowledged before a notary
public is a public document. The notary public shall certify
that he knows the person acknowledging the instrument and
that such person is the same person who executed the
instrument, acknowledging that the instrument is his free act
and deed. The acceptance may be made in the same deed of
donation or in a separate instrument. An acceptance made in a
separate instrument must also be in a public document. If the
acceptance is in a separate public instrument, the donor shall be
notified in writing of such fact. Both instruments must state the
fact of such notification.
In Gonzales v. Court of Appeals, we explained the
significance of the foregoing provisions to unregistered donations
as follows:
From the foregoing provisions, it may be inferred
that as between the parties to a donation of an immovable
property, all that is required is for said donation to be contained
in a public document. Registration is not necessary for it to be
considered valid and effective. However, in order to bind
third persons, the donation must be registered in the
Registry of Property (now Registry of Land Titles and
Deeds). Although the non registration of a deed of donation
shall not affect its validity, the necessity of registration
comes into play when the rights of third persons are
affected, as in the case at bar.
xxxx
Page 114 of 121
It is undisputed in this case that the donation
executed by Ignacio Gonzales in favor of his grandchildren,
although in writing and duly notarized, has not been registered
in accordance with law. For this reason, it shall not be binding
upon private respondents who did not participate in said deed or
had no actual knowledge thereof. Hence, while the deed of
donation is valid between the donor and the donees, such deed,
however, did not bind the tenants-farmers who were not parties
to the donation. As previously enunciated by this Court, non-
registration of a deed of donation does not bind other parties
ignorant of a previous transaction.
Cano v. Cano
Held: In this case, petitioners do not deny that the
donation propter nuptias was never registered. Applying the rule laid down
in Gonzales, the conveyance of the property in their favor is not considered
binding on third persons, who had no participation in the deed or any actual
knowledge thereof.[87] The Court is convinced that respondents fall within
the scope of this rule.
The records of both the cases for ejectment and the quieting of
title are bereft of evidence of respondents' participation in or actual
knowledge of the deed. In fact, petitioners never made that assertion in any
of their submissions before the courts. Instead, they focused on their claim
that respondents were aware of the former's possession of the property.[88]
We emphasize, however, that in order for prior unregistered
interest to affect third persons despite the absence of registration, the law
requires actual knowledge of that interest. Nothing less would suffice. As
we explained in Pineda v. Arcalas, mere possession of the property is not
enough:
True, that notwithstanding the preference given to a registered
lien, this Court has made an exception in a case where a party has actual
knowledge of the claimant's actual, open, and notorious possession of the
disputed property at the time the levy or attachment was registered. In such
situations, the actual notice and knowledge of a prior unregistered interest,
not the mere possession of the disputed property, was held to be equivalent
to registration.
Lamentably, in this case, Pineda did not even allege, much less
prove, that Arcalas had actual knowledge of her claim of ownership and
possession of the property at the time the levy was registered. The records
fail to show that Arcalas knew of Pineda's claim of ownership and
possession prior to Pineda's filing of her third party claim before the
Quezon City RTC. Hence, the mere possession of the subject property by
Pineda, absent any proof that Arcalas had knowledge of her possession and
adverse claim of ownership of the subject property, cannot be considered as
equivalent to registration.
In the absence of proof that respondents participated in the
transaction, or had knowledge of petitioners' interest over the land at the
time the property was purchased in 1982, this Court must rule that they are
not bound by the unregistered donation. Hence, the conveyance had no
effect as to respondents.
Effects if the Donation Is only in a Private Instrument
(i) The donation is null and void (Art. 754) unless it be
a donation propter nuptias, because here the Statute
of Frauds governs. However, under the OLD Civil
Code, the donation propter nuptias of real property
had to be in a public instrument, otherwise, it was
null and void.
(ii) Neither party may compel the other to execute a
public instrument because Art. 1367 does not apply.
Art. 1367 applies only when the contract or donation
is already valid and enforceable, and its purpose is
therefore only for convenience. Art. 1367 reads: “If
the law requires a document or other special form,
as in acts and contracts enumerated in the following
Article (Art. 1368), the contracting parties may
 compel each other to observe that form, once the
contract has been perfected. This right may be
exercised simultaneously with the action upon the
contract.”
(iii) Cannot really be ratified (if by ratification, we mean
that the donation is valid from the very beginning).
This is because the donation in a private instrument
(of realty) is not merely voidable; it is void. But if a
new donation is made, ratifying the previous one,
this is all right, but this is because of the new
donation (and not the old one), hence, the
ratification here will not have any retroactive effect.
(iv) Although the private instrument of donation does
not transfer ownership over the property, still the
“donee” who received same may eventually acquire
the property by prescription since the possession
would be adverse and in concepto de dueno. Indeed
a void donation may serve as basis for acquisitive
prescription,
D. EFFECT OF DONATIONS AND LIMITATIONS
THEREON
Article 750. The donation may comprehend all the present
property of the donor, or part thereof, provided he reserves, in full
ownership or in usufruct, sufficient means for the support of himself,
and of all relatives who, at the time of the acceptance of the donation,
are by law entitled to be supported by the donor. Without such
reservation, the donation shall be reduced on petition of any person
affected.
This article is important because the claims of the
donor’s own family should not be disregarded. Thus, if the donor is
a person who earns sufficient income from his profession like law,
medicine, or accountancy he need not reserve property.
An excessive donation under this article is not void, but
merely reducible to the extent support of the relatives is impaired.
The party prejudiced can ask the court for the reduction.
The donation may comprehend all present property,
meaning that which the donor can dispose of at the time of the
donation but in all instances, the donor cannot give more than what
he can give by will (meaning, a person cannot receive more than
what the giver can give by virtue of a will). Otherwise, the
donation is considered inofficious.
The sufficiency can be determined by the court in
accordance with prudence and the exercise of reasonable
discretion.
The following donations are not included under this
Article:
(a) the onerous donation
(b) the donation mortis causa (for the donation takes
effect only upon the donor’s death)
(c) donations propter nuptias (for these donations are
never reducible; they are only revocable on the
grounds expressly provided by law).
1. Limitations
a. Future Property
Article 751. Donations cannot comprehend future property.
Page 115 of 121
By future property is understood anything which the donor
cannot dispose of at the time of the donation.
The law defines future property as “anything which the
donor cannot dispose of at the time of the donation.” Future
inheritance cannot be the object of a donation, but present or
accrued inheritance may be, even if the properties have not yet
been delivered, for in succession, the rights to the inheritance are
transmitted from the very moment of the death.
In at least one instance, however, the Civil Code allows
the donation of future property in what authors generally refer to as
“contractual succession.’’ This occurs when in a marriage
settlement, the would-be spouses are allowed to donate mortis
causa to each other “future property” to the extent permitted under
the rules of testamentary succession. (See Art. 84, Family Code). It
should be observed, however, that strangers cannot donate to the
future spouses a donation inter vivos of future property, the
privilege thereto being limited to the future spouses.”
b. Inofficious Donation
Article 752. The provisions of Article 750 notwithstanding,
no person may give or receive, by way of donation, more than he may
give or receive by will. The donation shall be inofficious in all that it
may exceed this limitation.
Article 755. The right to dispose of some of the things
donated, or of some amount which shall be a charge thereon, may be
reserved by the donor; but if he should die without having made use of
this right, the property or amount reserved shall belong to the donee.
Article 771. Donations which in accordance with the
provisions of article 752, are inofficious, bearing in mind the estimated
net value of the donor’s property at the time of his death, shall be
reduced with regard to the excess; but this reduction shall not prevent
the donations from taking effect during the life of the donor, nor shall
it bar the donee from appropriating the fruits.
For the reduction of donations the provisions of this Chapter
and of Articles 911 and 912 of this Code shall govern.
Rules Re Inofficious Donations
(i) Note that the value of the estate is that which it had,
not at the time of donation, but at the time of the
donor’s death. (The property left minus debts and
charges plus the value of the donation equals the net
hereditary estate.
(ii) Inofficious donations may not only be reduced; they
may be completely cancelled (when, for example,
the donor had no free portion left, because of the
presence of certain compulsory heirs). Example: If
the compulsory heirs are the surviving spouse (she
gets 1/4 of the estate), one legitimate child (1/2), and
one illegitimate child (1/4), it is evident that
everything constitutes the legitime, leaving nothing
at the free disposal of the donor. Here, all donations
inter vivos should be totally reduced, unless of
course the compulsory heirs concerned refuse to
institute the action.
(iii) Since the inofficiousness of the donation cannot be
determined till after the donor’s death, it follows
that in the meantime, the donation is valid and
 ownership is transmitted to the donee during the
donor’s lifetime.
Prescription period: The action to reduce or revoke may
be brought within a period of 5 years from the time of the donor’s
death.
Santos v. Alana
Held: Pursuant to Article 752 earlier cited, Gregorio could not
donate more than he may give by will. Clearly, by donating the entire lot to
petitioner, we agree with both lower courts that Gregorio's donation is
inofficious as it deprives respondent of her legitime, which, under Article
888 of the Civil Code, consists of one-half (1/2) of the hereditary estate of
the father and the mother. Since the parents of both parties are already dead,
they will inherit the entire lot, each being entitled to one-half (1/2) thereof.
II. Whether respondent's suit is barred by prescription.
In Imperial vs. Court of Appeals, we held that "donations, the
reduction of which hinges upon the allegation of impairment of legitime (as
in this case), are not controlled by a particular prescriptive period, for
which reason, we must resort to the ordinary rules of prescription. Under
Article 1144 of the Civil Code, actions upon an obligation created by law
must be brought within ten years from the time the right of action accrues.
Thus, the ten-year prescriptive period applies to the obligation to reduce
inofficious donations, required under Article 771 of the Civil Code. to the
extent that they impair the legitime of compulsory heirs.
From when shall the ten-year period be reckoned? In Mateo vs.
Lagua, involving the reduction, for inofficiousness, of a donation propter
nuptias, we held that the cause of action to enforce a legitime accrues upon
the death of the donor-decedent. Clearly so, since it is only then that the net
estate may be ascertained and on which basis, the legitimes may be
determined.
Here, Gregorio died in 1986. Consequently, respondent had until
1996 withisn which to file the action. Records show that she filed her suit in
1992, well within the prescriptive period.
(i) Persons Who Can Ask for
Reduction of Inofficious Donation
Article 772. Only those who at the time of the donor’s death
have a right to the legitime and their heirs and successors-in-interest
may ask for the reduction of inofficious donations.
Those referred to in the preceding paragraph cannot
renounce their right during the lifetime of the donor, either by express
declaration, or by consenting to the donation.
The donees, devisees and legatees, who are not entitled to the
legitime and the creditors of the deceased can neither ask for the
reduction nor avail themselves thereof.
This Article refers to the people who can ask for the
reduction of an inofficious donation. Note that the donor himself
has no right to ask for the reduction. This is because it is only at his
death when the officiousness or the inofficiousness of the donation
can be determined.
Note that only the following may ask for the reduction on
the ground of inofficiousness:
(a) the compulsory heirs of the donor (whether children,
other descendants, ascendants or surviving spouse)
(b) the heirs and successors-in-interest of the
abovementioned compulsory heirs.
The following cannot ask for the reduction:
 voluntary heirs of the donor (such as friends,
brothers, etc.)
 devisees (recipients of gifts of real property in a
will)
 legatees (recipients of gifts of personal property in a
will)
 creditors of the deceased (The Register of Deeds is
not allowed to raise the question as to whether or
not a donation is inofficious.
(ii) Preference Given to Earlier Donations
Article 773. If, there being two or more donations, the
disposable portion is not sufficient to cover all of them, those of the
more recent date shall be suppressed or reduced with regard to the
excess.
Preference is given to earlier donations (first come first
served). Therefore, if it is essential to reduce, the subsequent ones
must first be reduced.
Exception to Rule: Wedding gifts of jewelry, clothing
and outfit by parents and ascendants in favor of descendants shall
not be reduced (even if they be more recent), provided they do not
exceed one tenth (1/10) of the free portion.
c. Donation of Ownership and Usufruct
Article 756. The ownership of property may also be donated
to one person and the usufruct to another or others, provided all the
donees are living at the time of the donation.
d. Reversion
Article 757. Reversion may be validly established in favor of
only the donor for any case and circumstances, but not in favor of
the
other persons unless they are all living at the time of the donation.
Any reversion stipulated by the donor in favor of a third
person in violation of what is provided in the preceding paragraph
shall be void, but shall not nullify the donation.
e. Obligation to Pay Debts of Donor
Article 758. When the donation imposes upon the donee the
obligation to pay the debts of the donor, if the clause does not contain
any declaration to the contrary, the former is understood to be liable to
pay only the debts which appear to have been previously contracted. In
no case shall the donee be responsible for debts exceeding the value of
the property donated, unless a contrary intention clearly appears.
2. Effects
a. Effect on Donations Made to Several
Persons Jointly
Article 753. When a donation is made to several persons
jointly, it is understood to be in equal shares, and there shall be no
right of accretion among them, unless the donor has otherwise
provided.
The preceding paragraph shall not be applicable to
donations made to the husband and wife jointly, between whom there
shall be a right of accretion, if the contrary has not been provided by
the donor.
b. Subrogation of the Donee
Page 116 of 121
 Article 754. The donee is subrogated to all the rights and
actions which in case of eviction would pertain to the donor. The latter,
on the other hand, is not obliged to warrant the things donated, save
when the donation is onerous, in which case the donor shall be liable
for eviction to the concurrence of the burden.
The donor shall also be liable for eviction or hidden defects
in case of bad faith on his part.
c. Payment of Debts
Article 759. There being no stipulation regarding the
payment of debts, the donee shall be responsible therefor only when the
donation has been made in fraud of creditors.
The donation is always presumed to be in fraud of creditors,
when at the time thereof the donor did not reserve sufficient property
to pay his debts prior to the donation.
E. REVOCATION AND REDUCTION OF DONATIONS
1. Inofficious Donations
Article 760. Every donation inter vivos, made by a person
having no children or descendants, legitimate or legitimated by
subsequent marriage, or illegitimate, may be revoked or reduced as
provided in the next article, by the happening of any of these events:
(1) If the donor, after the donation, should have legitimate or
legitimated or illegitimate children, even though they be posthumous;
(2) If the child of the donor, whom the latter believed to be
dead when he made the donation, should turn out to be living;
(3) If the donor should subsequently adopt a minor child.
Art. 760 applies only to donations inter vivos; and not to:
(a) donations propter nuptias (which can be revoked
only for causes mentioned in Art. 132).
(b) onerous donations (for these are really contracts).
There are two (2) kinds of inofficious donations (those
that impair or prejudice the legitime or successional rights of
compulsory heirs):
(a) those referred to in Arts. 760 and 761 (where the
donor at the time of donation either had no children
or thought he had no more).
(b) those referred to in Arts. 771 and 752 (where the
donor had at least one child already at the time he
made the donation).
NOTES:
(a) When the revocation should take effect: The
donation is revoked or reduced by the happening of
any of the events enumerated in Article 760. In other
words, the revocation or reduction takes place ipso
jure. No action is necessary to revoke or reduce the
donation which is already considered by law as
revoked. Court action is necessary, however, when
the done refuses to return the property. In such case,
the decision of the court will be merely declaratory
of the revocation – it will not be a revocatory act.
(b) Birth reappearance and adoption as causes for the
revocation or reduction. The article seeks to protect
the presumptive legitime or the expected legitime of
the heir.
Page 117 of 121
(c) The value of the estate to be considered is at the
time of the birth, reappearance or adoption.
Example
X has no child. At the time he gave a donation of
P1,000,000, he had P10,000,000. Therefore after the donation, he
had P9,000,000 left. Later, he adopted a minor child. At the time he
made the adoption, he had only P500,000 left. Should the donation
be reduced? If so, by how much, why, and within what period?
ANS.: Since he had only P500,000 left at the time of
adoption, his total estate at that time was P1,500,000 (P500,000 left
plus P1,000,000 given as donation). Since the legitime of the
adopted child is P750,000 (which is one-half of the estate), it
follows that the free portion is also only P750,000. Therefore, the
donation must be reduced by P250,000. The action for reduction
must be brought within 4 years from the time of the adoption.
(Arts. 760, 761, 763).
Cruz v. Court of Appeals
Held: In the instant petition for review, petitioner imputes to the
appellate court alleged errors which boil down to the question as to whether
under the facts as established and the law, the decision under review
correctly dismissed the complaint to annul the subject donation. We hold
that it did.
In the case of the subsequent adoption of a minor by one who
had previously donated some or all of his properties to another, the donor
may sue for the annulment or reduction of the donation within four years
from the date of adoption, if the donation impairs the legitime of the
adopted, taking into account the whole estate of the donor at the time of the
adoption of the child. (Civil Code, Articles 760, 761 and 763). Of course,
the burden of proof is on the plaintiff-donor, who must allege and establish
the requirements prescribed by law, on the basis of which annulment or
reduction of the donation can be adjudged.
Unfortunately, in the case at bar, the complaint for annulment
does not allege that the subject donation impairs the legitime of the adopted
child. Indeed it contains no indication at all of the total assets of the donor.
Nor is there proof of impairment of legitime. On the contrary,
there is unrebutted evidence that the donor has another piece of land
(27,342 sq. m.) situated in Dolores, Taytay, Rizal worth P273,420.00 in
1977, although then subject to litigation.
The legal situation of petitioner-donor, as plaintiff, is made
worse by the factual finding of the Court of Appeals that the grandfather of
the donees was the owner pro indiviso of one-half of the donated land, the
effect of which is to reduce the value of the donation which can then more
easily be taken from the portion of the estate within the free disposal of
petitioner.
a. Reduction of the Donation
Article 761. In the cases referred to in the preceding article,
the donation shall be revoked or reduced insofar as it exceeds the
portion that may be freely disposed of by will, taking into account the
whole estate of the donor at the time of the birth, appearance or
adoption of a child.
The value of the estate (hereditary) is: The value at the
birth, appearance, or adoption PLUS the value of the donation (at
the time donation was made).
NOTE: The value of the donation must be added
otherwise absurdities may arise: moreover, had not the donation
been made, its value would still be part of the estate; fi nally, the
law does not say that the whole estate will be that remaining at the
time of birth, appearance or adoption, it merely says that said value
must be taken into account.
 In so far as the free disposal is concerned, the donation
will remain valid up to that extent. In other words, if the entire
donation can be covered by the free disposal; it should remain
untouched.
b. What the Donee Must Do if the Donation is
Reduced
Article 762. Upon the revocation or reduction of the
donation by the birth, appearance or adoption of a child, the property
affected shall be returned, or its value if the donee has sold the same.
If the property is mortgaged, the donor may redeem the
mortgage, by paying the amount guaranteed, with a right to recover
the same from the donee.
When the property cannot be returned, it shall be estimated
at what it was worth at the time of the donation.
If the property is still with him, return the property.
If the property has been sold, give the value (usually the
price of the sale) to the donor.
If the property has been mortgaged, the donor may pay
off the debt, but he can recover reimbursement from donee. (d) If
the property cannot be returned (as when it has been lost or totally
destroyed), return its value (value not at time of loss but at
perfection of donation).
c. Prescription of Action for Revocation or
Reduction
Article 763. The action for revocation or reduction on the
grounds set forth in Article 760 shall prescribe after four years from
the birth of the first child, or from his legitimation, recognition or
adoption, or from the judicial declaration of filiation, or from the time
information was received regarding the existence of the child believed
dead.
This action cannot be renounced, and is transmitted, upon
the death of the donor, to his legitimate and illegitimate children and
descendants.
(a) If the donation was made when there was no child, it
is the birth of the first child that counts, and not the birth of
subsequent children. If therefore, 3 years after the birth of the first
child, a second is born, the period left is only one more year. We
should not begin counting four years all over again.
(b) “First child” refers to first legitimate child.
(c) Mere birth of a natural child is not a ground; it is the
recognition (voluntary or by judicial compulsion) that is the ground
for reduction. Therefore, the period of 4 years should start from the
time of such recognition or acknowledgment.
2. Failure to Comply With Conditions
Article 764. The donation shall be revoked at the instance of
the donor, when the donee fails to comply with any of the conditions
which the former imposed upon the latter.
In this case, the property donated shall be returned to the
donor, the alienations made by the donee and the mortgages imposed
thereon by him being void, with the limitations established, with regard
to third persons, by the Mortgage Law and the Land Registration
Laws.
This action shall prescribe after four years from the non-
compliance with the condition, may be transmitted to the heirs of the
donor, and may be exercised against the donee’s heirs.
Page 118 of 121
Conditions” must be understood to mean the charges or
burdens imposed (like teaching the donor’s child for one semester,
or working at least 8 hours a day in a certain factory). (3 Castan
107). It can also refer to “resolutory conditions.’’ (Example: I am
donating my land to you now but you should not get married for 2
years.) But, it cannot refer to suspensive conditions (like, I will
donate my land to you if you pass the coming bar examinations)
because here, if the condition is not fulfi lled, the donation never
becomes effective, and therefore, there will be nothing to revoke.
(Indeed, Art. 764 is a clear case not only of revocation but also
RESOLUTION, because under Art. 1191, non-compliance of
conditions can be considered a resolutory condition.).
The exception to the first paragraph is when the
condition is immoral or illegal.
The donor has the choice of enforcing the condition by
action for specific performance. The donee, having bound himself
to carry out the condition imposed by accepting the donation, may
be compelled with what has been stipulated.
Clemente v. Republic
Held: Further, in 2003, Socorro already wrote to DPWH asking
for updates on the construction of the government hospital. However, the
DPWH informed her that there were no plans to build any hospital on the
Subject Property. Thus, it is clear that the donee no longer has the
intention of fulfilling its obligation under the Deed of Donation. It has
now become evident that the donee will no longer comply with the
condition to construct a hospital because a government hospital was already
built in another barangay, Barangay Polo. If it becomes indubitable that the
event, in this case the construction of the hospital, will not take place, then
the obligation of the donor to honor the donation is extinguished.
[34]
 Moreover, the donor-obligee can seek rescission of the donation if the
donee-obligor has manifested no intention to comply with the condition of
the donation.
For the same reason, we find that laches has not set in. Laches is
defined as the failure or neglect for an unreasonable and unexplained length
of time to do that which, by exercising due diligence, could or should have
been done earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it.
Because of the failure of the Deed of Donation to specify the
period within which to comply with the condition, there can be no delay in
asserting the right against respondent. In contrast, respondent is guilty of
unreasonable delay and neglect in complying with its obligation to
construct a government hospital and to use the Subject Property as a
hospital site.
Based on the foregoing, the revocation of the donation and the
reconveyance and recovery of possession of the Subject Property in favor
of the donors – or the heirs of the donors – are necessary and proper.
a. Court Action
A court action is necessary if he done refuses to return
the property. Although Article 764 provides that the donation shall
be revoked “at the instance of the donor’’ when the donee fails to
comply with any of the conditions which the former imposed on
the latter, the Supreme Court held in the case of Ongsiako, et al. v.
Ongsiako, (as well as in previous cases), that the donor may not
revoke a donation by his own unilateral act, even if the donee
should have broken any of the conditions imposed by the donation.
A court action is essential, if the donee refuses to return the
property voluntarily.
Exception: Note that the non-fulfillment of the condition
does not automatically revoke the donation. Court action is
essential for revocation, unless the donee willingly surrenders the
property or its value. It is the party prejudiced who should bring the
suit [Oracion v. Juanillo].

Secretary v. Heirs of Dulay
Held: The right to seek the revocation of
donation had not yet prescribed
when respondents filed their complaint
Anent the second issue, we reject the contention of the OSG that
respondents' cause of action is already barred by prescription under Article
764 of the New Civil Code, or four years from the non-compliance with the
condition in the deed of donation. Since such failure to comply with the
condition of utilizing the property for school purposes became manifest
sometime in 1988 when the DECS utilized another property for the
construction of the school building, the four-year prescriptive period did not
commence on such date. Petitioner was given more than enough time to
comply with the condition, and it cannot be allowed to use this fact to its
advantage. It must be stressed that the donation is onerous because the
DECS, as donee, was burdened with the obligation to utilize the land
donated for school purposes. Under Article 733 of the New Civil Code, a
donation with an onerous cause is essentially a contract and is thus
governed by the rules on contract.[19] We fully agree with the ruling of the
appellate court:
xxx With this, [we] decline to apply the four-year prescriptive
period for the revocation of donation provided under Article 764 of the
New Civil Code and instead apply the general rules on contracts since
Article 733 of the same Code, specifically provided that onerous donations
shall be governed by the rules on contracts.
Corollarily, since a deed of donation is considered a written
contract, it is governed by Article 1144 of the New Civil Code, which
provides that the prescriptive period for an action arising from a written
contract is ten (10) years from the time the cause of action accrues. In the
case of donation, the accrual of the cause of action is from the expiration of
the time within which the donee must comply with the conditions or
obligations of the donation. In the instant case, however, it must be noted
that the subject donation fixed no period within which the donee can
comply with the condition of donation. As such, resort to Article 1197 of
the New Civil Code is necessary. Said article provides that if the obligation
does not fix a period, but from its nature and the circumstances it can be
inferred that a period was intended, the courts may fix the duration thereof.
Indeed, from the nature and circumstances of the condition of the subject
donation, it can be inferred that a period was contemplated by the donors.
The donors could not have intended their property to remain idle for a very
long period of time when, in fact, they specifically obliged the defendant-
appellants to utilize the land donated for school purposes and thus put it in
good use.
In Central Philippine University v. Court of Appeals, a case
squarely in point, we have established that the legal possibility of bringing
the action begins with the expiration of a reasonable opportunity for the
donee to fulfill what has been charged upon it by the donor. Likewise,
we held that even if Article 1197 of the New Civil Code provides that the
courts may fix the duration when the obligation does not determine the
period but from its nature and circumstances it can be inferred that a period
was intended, the general rule cannot be applied because to do so would be
a mere technicality and would serve no other purpose than to delay or lead
to an unnecessary and expensive multiplication of suits.
Altogether, it has been 16 years since the execution of the deed
of donation. Petitioner DECS failed to use the property for the purpose
specified in the deed of donation. The property remained barren and
unutilized. Even after respondents sought the return of the property before
the courts, petitioner DECS still failed to draw up plans to use the property
for school purposes. In fine, petitioner DECS has no use for the property;
hence, the same shall be reverted to the respondents.
b. When Court Action Not Needed
It was ruled in De Luna v. Abrigo that:
It is clear, however, that judicial intervention is
necessary not for purposes of obtaining a judicial declaration
rescinding a contract already deemed rescinded by virtue of an
agreement providing for rescission even without judicial
Page 119 of 121
intervention, but in order to determine whether or not the
rescission was proper.
While the ruling in De Luna applied specifically to
onerous donations with an automatic revocation clause, we
extended this doctrine to apply to donations inter vivos in general
in Roman Catholic Archbishop of Manila. We explained in this
case that Article 732 of the Civil Code states that the general
provisions on obligations and contracts shall govern donations inter
vivos in all matters not determined in Title III, Book III on
donations. Title III has no explicit provisions for instances where a
donation has an automatic revocation clause. Thus, the rules in
contracts law regarding automatic rescission of contracts as well as
the jurisprudence explaining it find suppletory application. We then
reiterated in Roman Catholic Archbishop of Manila that where a
donation has an automatic revocation clause, the occurrence of the
condition agreed to by the parties as to cause the revocation, is
sufficient for a party to consider the donation revoked without need
of any judicial action. A judicial finding that the revocation is
proper is only necessary when the other party actually goes to court
for the specific purpose of challenging the propriety of the
revocation. Nevertheless, even in such a case, "x x x the decision of
the court will be merely declaratory of the revocation, but it is not
in itself the revocatory act." We also explained in this case that in
ascertaining the prescription of actions arising from an automatic
revocation clause in donations, the general provisions on
prescription under the Civil Code apply. Article 764—which
provides for a four-year prescriptive period to file an action to
revoke the donation in case of breach of a condition—governs an
instance where the deed of donation does not contain an automatic
revocation clause.
Camarines Sur v. Bodega
Held: In this case, the Deed of Donation contains a clear
automatic revocation clause. The clause states:
That the condition of this donation is that the DONEE shall use
the above-described portion of land subject of the present donation for no
other purpose except the construction of its building to be owned and to be
constructed by the above-named DONEE to house its offices to be used by
the said Camarines Sur Teachers' Association, Inc., in connection with its
function s under its charter and by-laws and the Naga City Teachers'
Association as well as the Camarines Sur High School Alumni Association,
PROVIDED FURTHERMORE, that the DONEE shall not sell, mortgage
or incumber the property here in donated including any and all
improvements thereon in favor of any party and provided, lastly, that the
construction of the building or buildings referred to above shall be
commenced within a period of one (1) year from and after the execution of
this donation, otherwise, this donation shall be deemed automatically
revoked and voided and of no further force and effect.
The provision identifies three conditions for the donation: (1)
that the property shall be used for "no other purpose except the construction
of its building to be owned and to be constructed by the above-named
DONEE to house its offices to be used by the said Camarines Sur Teachers'
Association, Inc., in connection with its functions under its charter and by-
laws and the Naga City Teachers' Association as well as the Camarines Sur
High School Alumni Association," (2) CASTEA shall "not sell, mortgage
or incumber the property herein donated including any and all
improvements thereon in favor of any party," and (3) "the construction of
the building or buildings referred to above shall be commenced within a
period of one (1) year from and after the execution." The last clause of this
paragraph states that "otherwise, this donation shall be deemed
automatically revoked x x x." We read the final clause of this provision as
an automatic revocation clause which pertains to all three conditions of the
donation. When CASTEA leased the property to Bodega, it breached the
first and second conditions.
 Accordingly, petitioner takes the position that when CASTEA
leased the property to Bodega, it violated the conditions in the Deed of
Donation and as such, the property automatically reverted to it. It even
executed a Deed of Revocation. The records show that CASTEA never
contested this revocation. Hence, applying the ruling in De Luna, Roman
Catholic Archbishop of Manila, Dolor and Zamboanga Barter Traders
Kilusang Bayan, Inc., petitioner validly considered the donation revoked
and by virtue of the automatic revocation clause, this revocation was
automatic and immediate, without need of judicial intervention. Thus, the
CA clearly erred in its finding that petitioner should have first filed an
action for reconveyance. This contradicts the doctrine stated in the
aforementioned cases and renders nugatory the very essence of an
automatic revocation clause.
Thus, as petitioner validly considered the donation revoked and
CASTEA never contested it, the property donated effectively reverted back
to it as owner. In demanding the return of the property, petitioner sources
its right of possession on its ownership. Under Article 428 of the Civil
Code, the owner has a right of action against the holder and possessor of the
thing in order to recover it.
This right of possession prevails over Bodega's claim which is
anchored on its Contract of Lease with CASTEA. CASTEA's act of leasing
the property to Bodega, in breach of the conditions stated in the Deed of
Donation, is the very same act which caused the automatic revocation of the
donation. Thus, it had no right, either as an owner or as an authorized
administrator of the property to lease it to Bodega. While a lessor need not
be the owner of the property leased, he or she must, at the very least, have
the authority to lease it out.[51] None exists in this case. Bodega finds no
basis for its continued possession of the property.
As to the question of prescription, we rule that the petitioner's
right to file this ejectment suit against Bodega has not prescribed.
First, we reiterate that jurisprudence has definitively declared
that Article 764 on the prescription of actions for the revocation of a
donation does not apply in cases where the donation has an automatic
revocation clause. This is necessarily so because Article 764 speaks of a
judicial action for the revocation of a donation. It cannot govern cases
where a breach of a condition automatically, and without need of judicial
intervention, revokes the donation.
3. Ingratitude
Article 765. The donation may also be revoked at the
instance of the donor, by reason of ingratitude in the following cases:
(1) If the donee should commit some offense against the
person, the honor or the property of the donor, or of his wife or
children under his parental authority;
(2) If the donee imputes to the donor any criminal offense, or
any act involving moral turpitude, even though he should prove it,
unless the crime or the act has been committed against the donee
himself, his wife or children under his authority;
(3) If he unduly refuses him support when the donee is
legally or morally bound to give support to the donor.
Article 766. Although the donation is revoked on account of
ingratitude, nevertheless, the alienations and mortgages effected before
the notation of the complaint for revocation in the Registry of Property
shall subsist.
Later ones shall be void.
Article 767. In the case referred to in the first paragraph of
the preceding article, the donor shall have a right to demand from the
value of the property alienated which he cannot recover from third
persons, or the sum for which the same has been mortgaged.
The value of said property shall be fixed as of the time of the
donation.
The acts of ingratitude in Art. 766 are:
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(a) Purely PERSONAL (hence the act must have been
committed by the DONEE, and not by his wife or
relatives). (Guzman v. Ibea, decided June 26, 1941,
held that if the donee’s wife attacks the donor, the
donation is not revocable on the ground of
ingratitude.) (MOREOVER, as a general rule, it is
only the donor who can, in the proper case, bring an
action to revoke on ground of ingratitude.)
(b) EXCLUSIVE (hence, those not enumerated are
deemed excluded)
a. Action Cannot be Renounced
Article 769. The action granted to the donor by reason of
ingratitude cannot be renounced in advance. This action prescribes
within one year, to be counted from the time the donor had knowledge
of the fact and it was possible for him to bring the action.
The right to revoke because of ingratitude cannot be
renounced in advance (that is, prior to or at the time of the
perfection of the donation). However, if the act of ingratitude has
already been committed, the right to revoke may be RENOUNCED
for this would be merely an act of forgiveness.
b. Non-Transmissibility
Article 770. This action shall not be transmitted to the heirs
of the donor, if the latter did not institute the same, although he could
have done so, and even if he should die before the expiration of one
year.
Neither can this action be brought against the heir of the
donee, unless upon the latter’s death the complaint has been filed.
The action as a rule cannot be transmitted because the
right is purely personal to the donor. If however, he has already
instituted the action, but dies before its termination, his heirs are
allowed to continue the suit. If, upon the other hand, the donor is
killed by the donee, it follows that the donor never had a chance to
revoke, in this case the heir may institute the action within the
proper prescriptive period, of course. In the same manner, the heirs
may begin the action if the donor died without having known of the
act of ingratitude.
4. Effect of Revocation
Article 768. When the donation is revoked for any of the
causes stated in article 760, or by reason of ingratitude, or when it is
reduced because it is inofficious, the donee shall not return the fruits
except from the filing of the complaint.
If the revocation is based upon non-compliance with any of
the conditions imposed in the donation, the donee shall return not only
the property but also the fruits thereof which he may have received
after having failed to fulfill the condition.
SUMMARY
(1) Distinctions between Revocation and Reduction
REVOCATION REDUCTION
(a) This is TOTAL (affects the (a) This is as a rule, only
whole property) regardless of PARTIAL (though in some
whether the legitime has been cases as in comment No. 2
impaired or not. under Art. 771, the reduction
may cover or absorb the

(b) As a rule, for the benefit of
the donor.
(c) As a rule, for the benefit of
the heirs of the donor.
WHOLE donation, in which
case, it is as if the WHOLE has
been reduced or revoked), and
applies only when the legitime
has been IMPAIRED. Thus, the
legitime must always be
preserved.
(b) As a rule, for the benefit of
the heirs of the donor, since
their legitimes are supposed to
be preserved.

(2) Grounds for Revocation

(a) Fulfillment of resolutory conditions or charges. (Art.
764).
(b) Ingratitude. (Art. 765).

(3) Grounds for Reduction

(In some cases, TOTAL REDUCTION or
ABSORPTION making them appear to be cases of
REVOCATION):
(a) B.A.R. (birth, adoption, reappearance). (Art. 760).
(b) Inofficiousness. (Art. 771).
(c) If insuffi cient property is left for support of donor
and his relatives. (Art. 750).
(d) If made in fraud of creditors (creditors at the time of
the donation). (Art. 1387).

(4) Void, Ineffective, or Unperfected Donations

(BAR)
(a) Those not perfected in accordance with the forms and
solemnities of law (particularly when there is no proper
acceptance). (Example: donations of land if not made in a public
instrument). (Art. 794).
(b) Those made with property outside the commerce of
man.
(c) Those made with future property (Art. 751) except
those provided for in marriage settlements. (Art. 84, Family Code).
(d) Those made to persons specially disqualified:
1) by reason of public policy. (Art. 739).
2) by reason of unworthiness. (Art. 740).
3) by reason of possible undue infl uence. (Art. 87,
Family Code).

An action to annul a donation prescribes in 4 years from

the date of discovery of the fraud. The discovery of the fraud must
be counted at the latest from the time the deed is registered,
because registration is a notice to the entire world. Even if it is
proved that the registration of the deed of donation had been made
in bad faith, the action to annul said registration prescribes in 4
years [Dumanon v. Butuan City Rural Bank].

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