Chapter 11. Law of things and goods.

Goods are valuable objects of material or immaterial nature which can be dominated or
subject to appropriation by people

The Patrimony is made of rights and obligations and the goods are the content of the
Patrimony.

Things are corporeal, tangible goods but the concept of goods also includes rights. However
Civil Code use both as synonymous.

There are certain characteristics that a certain good has to have in order to be subject to
appropriation, to be object of rights.

Art 333 CC “All objects which are or may be subject to appropriation are deemed either
movable or immovable goods”

Art 334 CC- Indicates which are the ones considered immovable goods. Read.

Traditionally immovable goods have been considered to be of a bigger economic importance

than movable goods. For that reason, the Code sets higher cautions for the traffic and the
establishing of encumbrances over immovables or real property.

Real rights over immovable goods are immovable goods.

Art 335 CC “Goods that may be appropriated not included in the preceding Chapter and,
generally, all goods which may be transported from one point to another without impairment
of the immovable object to which it is joined shall be deemed to movable goods.”

Credits are considered to be movable

Real Rights over movable over movable good are movable goods (e.g., Usufruct of shares)

Another way of difference them is to consider them Public or Private goods

Art 338 CC “Goods are either of public domain or private property.”

Public Service those destined to a public use or service (Art 132 SC and 339 CC)

The destiny of the goods is what makes them public goods; destiny which shall be expressly
determined by the Law or arise from the nature of the goods (e.g., Rivers)

Public goods are the property of the State, Autonomous Communities and other public
persons and are managed by them.

Study of this kind of goods belongs to the Constitution and Administrative law.

Private goods or goods of private property are those which belong to individuals and those
which belong to a public entity but are not destined to a public use or service.

Art 340 CC “All other goods pertaining to the State in which the circumstances stated in the
preceding Article do not concur shall be deemed to be private goods”
Fruits:

Fruits are the things generated by other things without altering the essence thereof.

In principle, the fruits belong to its proprietary, unless there is someone with a better right to
them (Art 354 CC)

Art 354 CC The following shall pertain to the owner:

1. Natural fruits

2. Industrial fruits

3. Civil fruits

Also, there are the financial fruits (rents, dividends, interest…)

The Fruits have to follow certain requirements in order to be consider so:

- Certain regularity

- Must no change the essence of the thing derives from

- To be accessory of the thing from which they are produced and separable from it.

Real Rights or Rights in Rem: Concept and Characteristics.

A real right or a right in rem is an immediate and direct power of a person over a thing that the
others have to tolerate.

The power of the holder of the real right grants him the possibility to enjoy and use the right
and to oppose its existence in front of everybody, because it has efficacy regarding all.

Difference comparing with credit rights:

i) Real Rights are over a thing, they are inherent to the thing versus credit rights that
consist on the possibility to ask for a particular behavior.

ii) The efficacy of real rights is regarding all, they can be made effective against any third
party versus credit rights that are only effective against the debtor.

iii) For the transfer real rights, the delivery of the thing is necessary (title + modus) versus
with credit rights where the consent is sufficient.

iv) Types of real rights are defined by law versus credit rights that are based on the
autonomy of the parties.

v) The exercise of the real rights consolidates them versus the exercise of the credit
rights that extinguishes them.

vi) The loss of the thing which is the object of the real right entails the loss of the real
right versus with the credit rights that only entails the end of the obligation in certain
circumstances.

vii) Real rights are subject to be registered in the Property Registry versus credit rights that
cannot be registered.
The real rights attribute to the holder of the right some faculties which main characteristics are
the following:

i) Direct Power– Grants a direct power over the thing without the need of anybody´s
intervention.

ii) Exclusion power --The holder of the right can exclude anybody´s actions over his right
in prejudice of it.

iii) Efficacy erga hommes– Real right has efficacy regarding all, third parties have to
respect the exercise of the right and third parties cannot interfere in the relation
between the holder of the right and the thing

iv) Universal and pursuit power – The real right follows the thing wherever it is and
whoever possesses it.

Types of Real Rights.

-Limited Real Rights

Only confer to their holder a part of the faculties which can be exercised over a thing which
belongs to someone else. Classification and analysis based on: Enjoyment, Real Right of
acquisition and Real Rights of guarantee.

-Limited real rights of enjoyment– Permit the partial use or enjoyment of a thing which is the
property of another

person and sometimes, the acquisition of the fruits thereof.

Main ones are:

1-Usufruct– Grants a broad right of use and enjoyment of the thing entitling the person
holding it (usufructuary) to receive all fruits of the assets in usufruct. Usufruct is the right to
enjoy another person´s property under the obligation to preserve its form and substance
unless otherwise permitted by the owner of the thing upon the constitution of the right, Art
467 CC

The owner of the thing keeps the ownership (nuda propiedad).

At the time of extinction of the usufruct (ex. Lifelong usufruct that cannot be transmitted
mortis causa) the owner recovers the faculties of enjoyment that were assigned to the
usufructuary.

2-Use. Grants its holder only in as much of the natural profits of a thing that belongs to
someone else as is necessary to sustenance, Art 524 p. 1 CC.

3-Habitation. Habitation is the limited real right which grants the holder the right to use the
rooms he and his family might require as a dwelling. The holder of the right can live in the
house of another person without prejudice to the property, Art 524 p.2 CC.

4- Easements. An easement is a burden imposed upon a real property for the benefit of
another real property belonging to a different owner, Art 530 CC.
The immovable having the right to impose the burden is known as dominant tenement and the
land which is subject to the easement is known as the servient tenement Art 530 CC. They are
different easements such as: Easement of access Art 564 CC, flowage easement Art 552 CC,
light and air and rights of prospect, Art 585 CC.

-Limited Real Rights

-Limited real Rights of acquisition. The limited real rights of acquisition grant to their holder
the faculty to buy a thing which belongs to someone else with precedence to others.

1-Option. The right of option grants its holder, for which he has paid a sum of money, the right
to buy the thing which is the object of the option contract within the agreed period and paying
for it the price agreed with the grantor of the option. The option can also regard the sale of a
thing at an agreed price and time.

2-First refusal. A right of first refusal grants the possibility to acquire a certain thing when its
owner has decided to sell it.

3-Redemption. The right of redemption grants the possibility to acquire a certain thing when it
has already been sold to a third party for the price and on the same conditions as it was sold to
the third party.

-Limited real rights of guarantee. This right grant the faculty to sell a good in guarantee for the
performance of an obligation. If the debtor does not perform the obligation guaranteed, the
creditor, who is the holder of the real right, sell the thing to recover what was due to him. Ex,
the pledge and the mortgage.

Acquisition of Real Rights.

Article 609 CC defines different ways to acquire the property. “Ownership is acquired by
occupation. Ownership and other rights over goods are acquired by law, by gift, by testate and
intestate succession and, as a result of certain contracts, by tradition. They may also be
acquired by prescription”

Depending on if the real right is acquired from scratch or from somebody who holds it before,
we can differentiate between original and derivative acquisitions.

Different ways:

a) Occupancy. It consists on taking hold of a thing that does not belong to anybody. Art
610 CC. Nowadays, occupancy does not have much relevance due to the fact that it
only applies to movable goods Art. 17 of Law 23/2003 of Patrimony of the Public
Administration provides that immovable goods which do not belong to someone shall
be the property of the State) and the movable goods without owner are not so
common any more.

b) Usucapion – It is a manner of acquiring property another real rights by the mere

possession in the conditions and during the period established by law.

The usucapion requires two requirements:

- The person has to take possession of the thing alleging to be the owner, Art 447 CC.

- He has to hold public, peaceable and uninterrupted possession of the thing, Art 1941
CC. Open and notorious. Without violence. Uninterrupted
There are two different types of Usucapions.

-Ordinary Usucapion.

Requires the concurrence of more requisites than the extraordinary but it takes place within a
shorter period oftime.

Article 1940 CC– Possession in Good Faith and with just title.He ignores that in his title or
manner of acquisition there is a defect which invalidates it, he thinks he is the true owner of
the thing.

System distinguishes two cases: Movable and immovable goods.

- Ownership of movable things is acquired by ordinary usucapion by

uninterrupted possession in good faith and just title for a period of 3 years, Art
1955.p.1 CC.

- Ownership of immovable goods– 10 years, Art 1957 CC.

-Extraordinary Usucapion

Does not need good faith and just title in the possession of the thing to acquire the right, but
the periods of time during which the thing has to be possessed are longer.

-Art 1955.p.2 Ownership over movable goods prescribes by uninterrupted possession

for 6 years

-Art 1959 CC ownership of immovable uninterrupted possession of 30 years.

Property registry.

It is the register that gives publicity to real rights over immovable goods.

The publicity granted by the Property Registry guarantees the legal security and the certainty
of the traffic of immovable goods by means of public record .

The Property Registry is also a mean for the proof of the rights recorded therein.

Not only is convenient for the holder of the rights registered but also for any third party
interested in it.

The Property Registry is public, everybody has access to what is registered. Anybody who has
an interest can consult the Registry in order to know the vicissitudes of a particular real
property.

With exception of the mortgage right which registration is necessary for its validity,
registration of other real rights and legal acts over them is not compulsory– It may happen that
the Registry and the reality differ.

Subject to Registration:

- Ownership and real rights over immovable goods

- Court decisions which alter the capacity of persons

- Lease contracts of immovable property.

The Property Registry is ruled by several principles which are the base of its organization and
of the manner in which it grants protection to the records therein. Those principles are:

- Specialty– there is an individual sheet for each real property and a different number is
given to each property

- Demand – The record has to be asked for. The registrar does not act ex officio on his
own motion.

- Legality – The registrar shall evaluate the legality of the title and shall deny registration
to defective titles which are not properly made good.

- Priority – The first act presented has precedence over an act which presentation is
posterior, no matter if it is of a previous date.

- Legitimation – the records are presumed to be accurate and therefore the rights are
presumed to belong to the registered owner.

- Successive record – Successive owners succeed in the records.

The main effects of the registration with the Property Registry are 2:

- It protects the owner of the thing because the rights registered are presumed to exist
and belong to the owner recorded in the Registry. The possession is also presumed.
Art 38. 1 ML

Whoever wants to attack the ownership recorded in the Registry has to proof that it is
not the true ownership. Art 38.2 ML

This can be done through a demand of nullity or of cancellation.

- The Registry protects third parties who acquire based on what is registered therein.
“Public Faith” or “Official Authority” of the Registry. Art. 34.1 ML.

There has to happen certain requirements:

- The third party acquires from the person registered as the owner in the Property
Registry

- The third party who trust the Registry has to act in good faith, without knowledge of
the existence of a previous non-registered right

- The acquisition has to be onerous

- The acquisition has to be valid

- The right acquired by the third party has to be, in its turn, registered.