G.R. No.

152809 August 3, 2006

MERCEDES MORALIDAD, Petitioner,
vs.
SPS. DIOSDADO PERNES and ARLENE PERNES, Respondents.

Doctrine

A usufructuary is not entitled to reimbursements of the improvements he made on the property subject
of the usufruct. However, he may remove such improvements provided it will not cause injury to the
principal thing.

Facts

Petitioner works abroad. She bought a land in Davao City, Philippines for the purpose of letting her
niece, respondent Arlene, to move from Mandug to Davao City and build their house therein and stay as
long as they like. Later on, she wanted the property to be also available to any of her kins wishing to live
and settle in Davao City. Petitioner’s intention was made known in a document she executed on July 21,
1986. Thereafter, Arlene built a house in the lot bought by the petitioner.

When petitioner retired, she came back to the Philippines and lived with respondent Arlene’s house
which they built on the subject property. However, the relationship between petitioner and respondent
turned sour.

Thereafter, petitioner filed an unlawful detainer case against respondents. Petitioner alleged that she is
the registered owner of the land on which the respondents built their house; that through her counsel,
she sent the respondent spouses a letter demanding them to vacate the premises and to pay rentals
therefor, which the respondents refused to heed.

In their defense, the respondents alleged having entered the property in question, building their house
thereon and maintaining the same as their residence with petitioner’s full knowledge and express
consent. To prove their point, they invited attention to her written declaration of July 21, 1986, supra,
wherein she expressly signified her desire for the spouses to build their house on her property and stay
thereat for as long as they like.

The MTCC ruled in favor of petitioner. But, the RTC and the Court of Appeals reversed the decision. The
CA ruled that the ejectment suit is still premature since the unlawful detainer suit presupposes the
cessation of respondents’ right to possess. The CA further ruled that what governs the rights of the
parties is the law on usufruct but petitioner failed to establish that respondents’ right to possess had
already ceased. Petitioner’s statement that respondents can ‘stay as long as they like’ indicates that that
she is allowing respondents to occupy portion of her land as long as the latter want to. Considering that
respondents still want to occupy the premises, petitioner clearly cannot eject respondents.

Issues

Whether or not the unlawful detainer case is still premature since the usufruct is not yet terminated.

Whether or not the respondents, as usufructuary, is entitled to reimbursement of the improvements

(i.e. house) they made on the property subject of usufruct.
Ruling

1. No, the unlawful detainer case in not premature.The term or period of the usufruct originally
specified provides only one of the bases for the right of a usufructuary to hold and retain possession of
the thing given in usufruct. There are other modes or instances whereby the usufruct shall be
considered terminated or extinguished under Article 603 of the Civil Code. One of these is the the
fulfillment of any resolutory condition provided in the title creating the usufruct.

The document executed by the petitioner dated July 21, 1986 constitutes the title creating, and sets
forth the conditions of, the usufruct. Paragraph #3 thereof states “[T]hat anyone of my kins may enjoy
the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not
inimical to the purpose thereof” (Emphasis supplied). What may be inimical to the purpose constituting
the usufruct may be gleaned from the preceding paragraph wherein petitioner made it abundantly
clear “that anybody of my kins who wishes to stay on the aforementioned property should maintain an
atmosphere of cooperation, live in harmony and must avoid bickering with one another.” That the
maintenance of a peaceful and harmonious relations between and among kin constitutes an
indispensable condition for the continuance of the usufruct is clearly deduced from the succeeding
Paragraph #4 where petitioner stated “[T]hat anyone of my kins who cannot conform with the wishes of
the undersigned may exercise the freedom to look for his own.” In fine, the occurrence of any of the
following: the loss of the atmosphere of cooperation, the bickering or the cessation of harmonious
relationship between/among kin constitutes a resolutory condition which, by express wish of the
petitioner, extinguishes the usufruct.

Thus, the continuing animosity between the petitioner and the respondent and the violence and
humiliation she was made to endure, despite her advanced age and frail condition, are enough factual
bases to consider the usufruct as having been terminated.

2. No. Under Article 579 of the Civil Code, respondents, as usufructuary, do not have the right to
reimbursement for the improvements they may have introduced on the property.

Given the foregoing perspective, respondents will have to be ordered to vacate the premises without
any right of reimbursement. If the rule on reimbursement or indemnity were otherwise, then the
usufructuary might, as an author pointed out, improve the owner out of his property. The respondents
may, however, remove or destroy the improvements.
 [ G.R. No. 200991, March 18, 2021 ]

SPOUSES WILFREDO AND DOMINICA ROSARIO, PETITIONERS, VS. GOVERNMENT SERVICE INSURANCE
SYSTEM, RESPONDENT.

Facts:

New San Jose Builders Inc. (NSJBI) and the Government Service Insurance System (respondent) entered into a
Loan Agreement. NSJBI borrowed an amount of Php 600 million to finance the completion of two (2) housing
projects, and to purchase a lot for construction of more housing projects. As security for the loan, NSJBI
mortgaged three (3) parcels of land with existing improvements: 365 lots with existing low-cost houses,102
condominium units (mortgaged properties), and rights over 240 condominium units in GSIS Metro Homes.

Under the loan agreement, NSJBI shall not alienate sell, dispose of, mortgage, or in any manner encumber
the mortgaged properties or any portion thereof without the prior consent of the respondent.

The mortgage was annotated on the Transfer Certificates of Title (TCTs) and Condominium Certificates of
Title (CCTs) of the mortgaged properties. Among those mortgaged pursuant to the Loan Agreement was
allegedly sold by NSJBI to the Spouses Wilfredo and Dominica Rosario (petitioners).

NSJBI defaulted in the payment of the loan. Respondent applied for extrajudicial foreclosure of the
mortgaged properties. Upon failure of NSJBI to exercise its right of redemption, the titles/ownership of the
property were consolidated and the Register of Deeds cancelled the corresponding TCTs and CTCs in favor of
respondent. Claiming that NSJBI continued in possession of the said foreclosed properties, respondent
demanded NSJBI to vacate the foreclosed properties but to no avail. Hence, on 23 August 2006, respondent
filed a petition for issuance of a writ of possession against NSJBI and all occupants of the foreclosed
properties before the RTC.

The CA also ruled that the RTC erred in restraining the implementation of the writ of possession against
petitioners since they are not third parties who are in adverse possession of the foreclosed property.

Issue:

WON the court should grant respondent's application for a writ of possession as against NSJBI but only as to
unsold condominium units and lots that are not in possession of third-party buyers.

Ruling:

The Court deemed that the third-party's possession should be respected as it raises a disputable presumption
of ownership, and under Article 433 of the Civil Code, a person who contests such disputable presumption
must resort to judicial processes for the recovery of the property. However, for purposes of resolving the
propriety of issuing a writ of possession, the trial court must conduct a summary hearing to determine the
nature of the possession of third-party claimants. For it may be that the actual possessor is privy to any of the
parties to the action, or his bona-fide possession may be disputed, or where such possession has been taken
in connivance with the defeated litigant with a view to frustrating the judgment. The trial court shall then
deny or accede to the enforcement of a writ of possession as the finding shall warrant.
Incidentally, jurisprudence has often cited examples of parties against whom a writ of possession cannot
issue. A co-owner, tenant, or usufructuary who is in actual possession cannot be evicted through an ex-
parte application for a possessory writ. These parties are considered to possess the property based on their
own right, and not merely as a transferee or successor of the mortgagor.

Co-owners cannot be evicted through a summary possessory writ from a co-owned property because in a co-
ownership "each co-owner owns the whole, and over it he exercises rights of dominion, but at the same time
he is the owner of a share which is really abstract because until the division is effected, such share is not
concretely determined". During the period of coownership, a co-owner's possession of his share is linked to
the possession of the other co-owners. Each of the co-owners merely own an abstract or ideal portion of the
entire property.

Meanwhile, usufructuaries are also protected from a writ of possession because during the subsistence of
the usufruct, the owner parts with his right to possess and enjoy the property in favor of the usufructuary,
while only retaining the jus disponendi or the power to alienate the same. Under Article 60327 of the Civil
Code, sale of the property is not one of the causes of termination of the usufruct.