Property Reviewer
Prof. Eduardo Labitag
AY 2009 – 2010, 1st Semester
Part 1. Definition and Classification of Property………...1 Part 2. Ownership……………………………………….14 Part 3. Right of Accession………………………………20 Part 4. Quieting of Title………………………………...42 Part 5. Co-­‐ownership…………………………………...46 Part 6. Possession………………………………………65 Part 7. Usufruct…………………………………………78 Part 8. Easement of Servitudes………………………..95 Part 9. Nuisance………………………………………..110 Part 10. Modes of Acquiring Ownership………………114 Part 11. Donation……………………………………….128 Part 12. Lease…………………………………………..143 Class Notes……………………………………………..158 Part 1. Definition and Classification of Property A. Definition Property – an economic concept, meaning a mass of things or objects useful to human activity and which are necessary to life, for which reason they may in one way or another be organized and distributed, but always for the use of man. Right to property: the juridical tie by virtue of which a person has the exclusive power to receive or obtain all the benefits from a thing, except those prohibited or restricted by law or by the rights of others Right to property v. Ownership: right to property emphasizes vinculum between man and the thing, while ownership refers to the mass of rights over a thing à these 2 are synonymously used 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. Things Property All objects that exist and can All those that are already be of some use to man appropriated Those that are already All those that can be possessed and are found in possessed man’s patrimony In a juridical sense, includes only objects which can be of Things are property not only utility to man à object must when they are useful to man be one that can satisfy but when they are human needs, pleasure or appropriated comfort The Code uses things and property as identical to each other – property includes NOT only things which are already possessed but also those which are susceptible of being possessed by him Requisites for an object to be considered a thing or property: 1) Utility – capacity to satisfy human wants 2) Individuality and substantivity – separate and autonomous existence 3) Susceptibility of being appropriated – those which cannot be appropriated because of their distance, depth or immensity cannot be considered as things (i.e. stars, ocean) à these are called common things Human body – as a whole, it is not considered as a thing; some parts are considered things when separated from it (i.e. teeth, hair) Upon death, the corpse becomes a thing, although it is not susceptible of appropriation and commerce by reason of public morality. Right of possession over the corpse is recognized in the nearest relatives and the surviving spouse for the purpose of adequate burial. Res nullius – things which have intentionally abandoned by their owners; these are still considered in law as things, even if for the moment they have no owners, because they can still be the subject of appropriation Res communes – things which belong to everybody Appropriation – equivalent to occupation, which is the willful apprehension of a corporeal object which has no owner, with the intent to acquire its ownership Rights as property – things include not just material objects but also rights Only rights patrimonial in character can be considered as things. There are 2 kinds: Real rights (jus in re) and Personal Rights (jus ad rem) B. Classification by Transportability 1. Immovables or Real 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 part of an immovable; (3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object; (4) Statues, reliefs, paintings or other objects for use or De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Definition and Classification of Property
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ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements; (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works; (6) Animal houses, pigeon-­‐houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included; (7) Fertilizer actually used on a piece of land; (8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant; (9) Docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast; (10) Contracts for public works, and servitudes and other real rights over immovable property. a.
Immovables by nature – those which cannot b.
Immovables by incorporation – those which are essentially movables but are attached to an immovable in such a way as to be an integral part thereof (pars. 2. 3 & 7) Immovables by destination – those which c.
be moved from place to place; their intrinsic quality have no utility except in a fixed place (pars. 1 & 8) are essentially movables but by the purpose for which they have been placed in an immovable, partake of the nature of an immovable because of the added utility derived therefrom (pars. 4, 5, 6 & 9) d.
Immovables by analogy – (par. 10) Par. 1 (Lands, buildings and constructions) §
Buildings are always immovables o Their adherence to the land must be permanent and substantial. They are essentially immovables by incorporation. §
Separate treatment by the parties of a building from the land on which it stands, does not change the immovable character of the building, which by itself can be the subject of real estate mortgage. o The nature of the building as realty is independent of the way the parties deal with it. §
Buildings on rented land – still immovable; the ownership of the land on which they are erected cannot change their nature as immovable property. o The mere fact that a building was a subject of a chattel mortgage and was considered as personal property by the parties does not make said building personal property. Par. 2 (Trees and plants) §
Trees and plants are only immovables when they are attached to the land; hence, when they have been cut or uprooted, they become movable. o Timber is still immovable when it constitutes an integral part of the immovable. §
Ungathered fruits or growing crops are movables for the purpose of the Chattel Mortgage Law. o For the purpose of attachment: growing crops are to be attached in the same manner as realty. Par. 3 (Things incorporated) §
Res vinta in Roman Law – immovables by incorporation and not by nature, destination or by analogy. §
When separated from the immovable, they regain their condition as movable property. §
The breakage or injury in case of separation must be substantial. §
There is no need for the owner himself to attach the thing to the land. §
Examples: wells, sewers, aqueducts and railways §
Query: Suppose the properties are temporarily removed, but there is an intention to replace them, should they be considered real or personal property? à Personal inasmuch as the “incorporation” has ceased Par. 4 (Fixtures and ornaments) §
Requisites: o Placed by the owner or by the tenant as agent of the owner; o With intention of attaching them permanently even if adherence will not involve breakage or injury. §
Where the improvement or ornaments placed by the lessee are not to pass to the owner at the expiration of the lease, they remain movables for chattel mortgage purposes. (Davao Sawmill v. Castillo) §
Par. 3 v. Par. 4: Par. 3 Par. 4 Cannot be separated from Can be separated from immovable without breaking immovable without breaking or deterioration or deterioration Must be placed by the owner, Need not be placed by the or by his agent, expressed or owner implied Real property by Real property by incorporation incorporation and destination De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Par. 5 (Machinery and equipment) §
The immovable condition of these objects depends upon their being destined for use in the industry or work in the tenement; the moment they are separated, not necessarily from the immovable, but from the industry or work in which they are utilized, they recover their condition as movables. §
Requisites: o Placed by the owner or the tenant as agent of the owner; o Adapted to the needs of the industry or work carried on §
New machinery placed in a mortgaged central, to replace old machinery, becomes subject to the prior real estate mortgage (Berkenkotter v. Cu Unjieng) §
Examples: furniture and equipment, but NOT work animals §
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. If it is still needed for the industry but separated from the tenement temporarily, the property continues to be immovable, inasmuch as par.5 refers, not to real property by incorporation, but to real property by destination. Par. 6 (Animal houses and animals therein) §
Requisites: o Placed by the owner or the tenant as agent of the owner, with the intention of permanent attachment; o Forming a permanent part of the immovable. Par. 7 (Fertilizer) §
Should be on the land where they are to be utilized, because it is only then that the intention of the owner to use them on the tenement is beyond doubt. o “Actually used” means that it has been spread over the land. Par. 8 (Mineral deposits and waters) §
When minerals have been extracted, they 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. §
“Waters” referred to are those still attached to or running thru the soil or the ground. Par. 9 (Docks and fixed floating structures) §
Vessels partake of a certain extent of the nature and conditions of real property as to formalities for valid transfer and period of adverse possession. o Vessels are considered personal property under CC. §
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. However, if the floating house makes it a point to journey from place to place, it assumes the category of a vessel. Par. 10 (Realty by analogy) §
Ex: servitude or easement, real mortgage, antichresis, possessory retention, usufruct and leases of real property Effect of Enumeration – the enumeration does not admit other kinds of immovable properties. The distinction between movables and immovables is made by the law itself and parties, by their agreement, cannot attribute immovable character to things which legally have the character of movables. 2.
Movables or Personal 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 personal property; (3) Forces of nature which are brought under control by science; and (4) In general, all things which can be transported from place to place without impairment of the real property to which they are fixed. Tests for movable character: (NOTE: Manresa mentions only the 1st two tests) 1) By exclusion – everything NOT included in Article 415 (par. 1); examples: a. Ships or vessels irrespective of size; b. ½ interest in a business 2) By description – an object is immovable if it possesses (par. 4): a. Ability to change location – whether it can be carried from place to place; b. Without substantial injury to the immovable to which it is attached. 3) By special provision – real property is considered as personal property (par. 2); examples: a. Growing crops under the Chattel Mortgage Law b. Machinery installed by a lessee not acting as agent of the owner (Davao Sawmill) 4) By forces of nature – this would include electricity, gas, heat, oxygen Semi-­‐movables – these are now classified as movables; they include all those which are susceptible of moving by themselves without assistance from any outside force (ex: animals) De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Intellectual property – personal property; it consists in the pecuniary benefit which the owner can get by the reproduction or manufacture of his work. 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. Obligations and actions – personal rights; includes the infinite variety of contracts, promises, or obligations which confer on one party the right to recover movable property or a sum of money from another by action. Shares of stocks – personal property The term “entities” should be deemed to include all juridical persons, even partnerships although they do not issue shares of stocks. Cases: Davao Sawmill conducted business on another’s land and it is shown that it has treated the machineries (mounted on cement) in question as its personal property. When it executed a chattel mortgage on its machineries, it was foreclosed and a writ of execution was made over the machineries in favor of respondents. Davao Sawmill contends that such machineries are real property citing 1st provision of Art. 334 (415 NCC). The machineries were rightfully treated as personalty and levied upon in favor of respondents. While not conclusive, the characterization of the property as chattels is indicative of the owner’s intention and impresses upon the property the character determined by the parties. Also, machinery which is movable in its nature only 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 any person having only a temporary right, unless such person acted as the agent of the owner. One only having a temporary right to the possession or enjoyment of property is not presumed by the law to have applied movable property belonging to him so as to deprive him of it by causing it, by an act of immobilization, to become the property of another. (Davao Sawmill v. Castillo) www Mabalacat Sugar obtained a loan from Cu Unjieng secured by a mortgage constituted on 2 parcels of land "with all its buildings, improvements … now existing or that may in the future exist in said lots.” Mabalacat bought additional machinery and equipment for the lands, the payment for which was advanced by Berkenkotter. Mabalacat thereby bound itself in favor of Berkenkotter that the machineries be treated as securities for its debt and that it would not mortgage the machineries to anybody until Berkenkotter has been paid. Berkenkotter claims now that the additional machineries are not permanent, hence not included in the mortgage to Cu Unjieng. The additional machinery is a part of the real property mortgaged to Cu Unjieng because Art 334 (415 NCC) deems real property -­‐ machineries intended by the owner of any building or land for use in connection with any industry or trade being carried on therein and which are expressly adapted to meet the requirements of such trade or industry. The fact that it was treated as security in favor of Berkenkotter does not alter the permanent character of machinery’s incorporation to the mortgage. What should have been done was to stipulate the exclusion of the machinery from the mortgage. (Berkenkotter v. Cu Unjieng) www Lopez supplied the lumber for the business of Orosa. Lopez was not fully paid. It’s shown that the land and building of Orosa’s business was mortgaged to another party. Lopez remained unpaid and filed case against Orosa and the business. The lower court and CA held Orosa and the business liable, and Lopez acquired a materialman's lien over the property (over and above the mortgage); the lien being merely confined to the building and did not extend to the land on which the construction was made. Lopez now seeks to also include the land in his lien. The materialman’s lien (refectionary) attaches only to the building and not to the land. While it is true that generally, real estate connotes the land and the building constructed thereon, it is obvious that the inclusion of the building, separate and distinct from the land, in the enumeration of what may constitute real properties could mean only one thing – that a building is by itself an immovable property. Also, in this case, the materialman's lien could be charged only to the building for which the credit was made or which received the benefit of refection, the interest of the mortgagee over the land is superior and cannot be made subject to the said materialman's lien. (Lopez v. Orosa) www Vicencio executed chattel mortgage over their house in favor of Tumalad as security for a loan. Such house was being rented from Madrigal & Co. Upon failure to pay, the mortgage on the house was extrajudicially foreclosed and the Tumalads were the highest bidders. The Tumalads filed a civil case against Vicencio to vacate and to surrender to them the possession of the house. The chattel mortgage over the house is valid. The doctrine of estoppel applies to the parties, having treated the subject house as personalty. In support of this, the SC reiterates its previous rulings on the matter: 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; but, only insofar as the contracting parties are concerned. It is based, partly, upon the principle of estoppel. Also, 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 part of the land, for it is now settled that an object placed on land by one who had only a temporary right to the same, such as the lessee or usufructuary, does not become immobilized by attachment. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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However, in this case, since the period of redemption by the Vicencios has not yet expired, the action by the Tumalads for possession of the house is premature. (Tumalad v. Vicencio) [Criticism: estoppel applies to mistake of fact and not to law.] www Spouses Valino executed a chattel mortgage on their house in favor of AI, who was the surety for their debt to NARIC. They subsequently executed a real estate mortgage over their house and lot in favor of Iya. Upon failure to pay NARIC, AI then foreclosed the chattel mortgage as a result of which it caused the said house to be declared in its name. Subsequently, upon failure to pay Iya, the latter also foreclosed the mortgage of the land and the improvements on it. AI filed a case to exclude the house from the real estate mortgage while Iya filed the case to satisfy her claims from foreclosure on the house and lot. The rights of Iya from the real estate mortgage to foreclose both the house and lot is preferred. As personal properties could only be the subject of a chattel mortgage, the execution of the chattel mortgage covering a building is clearly invalid and a nullity. While it is true that said document was correspondingly registered in the Chattel Mortgage Register, this act produced no effect whatsoever for where the interest conveyed is in the nature of a real property, the registration of the document in the registry of chattels is merely a futile act. Thus, the registration of the chattel mortgage of a building of strong materials produce no effect as far as the building is concerned. And there is no right acquired by a chattel mortgage creditor who purchases real properties in an extrajudicial foreclosure sale by virtue of that chattel mortgage, which mortgage has been declared null and void with respect to said real properties. (Note: 3rd party Iya assailing the chattel mortgage agreement) (Associated Insurance v. Iya) www Wearever executed a chattel mortgage over certain raw materials inventory as well as a machinery. Wearever defaulted and Makati Leasing filed a complaint for judicial foreclosure. Makati Leasing also applied for an action of replevin against the machinery. The machinery was rightfully treated as a personal property and subject to the effects of an action for replevin and chattel mortgage. The doctrine of estoppel applies to Wearever, having treated the subject matter as personalty. One who has so agreed is estopped from denying the existence of the chattel mortgage. It is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property, as long as no interest of third parties would be prejudiced thereby. Equity dictates that one should not benefit at the expense of another. Also, Wearever could not be allowed to impugn the efficacy of the chattel mortgage after it has benefited therefrom. (Makati Leasing v. Wearever) www Acquiring a franchise, Meralco constructed 40 steel towers to transmit electricity. These towers were assessed for real property tax. Meralco claims that the towers are “poles,” which are tax exempt under the franchise. The steel towers are personal properties exempted from real property tax. A reading of the franchise granted to Meralco as well as US cases would show that the word “poles” also cover the steel towers subject hereof. Moreover, while the tax law does not provide for a definition of real property, Art. 415 does. The steel towers or supports do not come within the objects mentioned in paragraph 1, because they do not constitute buildings or constructions adhered to the soil. They are not constructions analogous to buildings nor adhering to the soil. 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 or 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 on the land in which the steel supports or towers are constructed. (Board of Assessment Appeals v. Meralco) www The pipeline system consists of cylindrical steel pipes joined together and buried not less than 1 meter below the surface along the shoulder of the public highway. This pipeline was assessed for real property tax. It is incontestable that the pipeline here does not fall within any of the classes of exempt real property enumerated in the Assessment Law and the Real Property Tax Code. The pipeline here falls under Art. 415 [1] and [3] since it is a construction adhering to the soil; and, 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. (Note: pipeline system as a whole) Insofar as the pipeline uses valves, pumps and control devices to maintain the oil flow, it is in a sense machinery within the meaning of the Real Property Tax Code. (Meralco Securities v. Board of Assessment) www 2 storage tanks are installed on land leased by Meralco. Realty taxes were imposed on the tanks since the foundation, on which the tanks rest, and other integral parts thereof, are affixed to the land. Meralco stresses the fact that the tanks are not attached to the land and that they were placed on leased land not owned by it. This is one of those borderline or penumbral cases. It has to be resolved in light of the provisions of the Assessment Law, Commonwealth Act No. 470, Real Property Tax Code, and the Presidential Decree No. 464. In these laws, improvements are taxable as real property. While the 2 storage tanks are not embedded in the land, they may, nevertheless, be considered as improvements on the De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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land, enhancing its utility and rendering it useful to the oil industry. The tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations. For purposes of taxation, the term “real property” may include things which should generally be regarded as personal property. (Meralco v. Central Board of Assessment ) www Caltex loaned machinery and equipment installed by Caltex (Philippines) in its gas stations located on leased land. Caltex retains ownership thereof during the term of the lease. For purposes of taxation, the items were treated by the Board as taxable realty under the Real Property Tax Code and PD 464, and that the definitions in Art. 415-­‐6 are not applicable to this case. 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. Improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty . It is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property. (Caltex v. Board of Assessment Appeals) www Realty tax was imposed on the tailings dam and the land thereunder. Benguet does not dispute that the dam may be considered realty under Art 415 but it insists that the dam cannot be subjected to realty tax as a separate and independent propertybecause it does not constitute an “assessable improvement” on the mine within the meaning of the Real Property Tax Code. Since the Real Property Tax Code does not define real property, Art 415 of the CC applies. In this case the pertinent portions are Art 415 [1] and [3]. Likewise, under the Real Property Tax Code, an improvements are taxable. In this case, the court concludes that it appears that whether a structure constitutes an improvement so as to partake 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. 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 the mine. (Benguet Corp. v. Central Board of Assessment Appeals) 3.
Importance and Significance of Classification a.
Criminal law Usurpation of property can take place only with respect to real property. Robbery and theft can be committed only against personal property. b.
Form of contracts involving movables and immovables Subject matter – only real property can be the subject of real mortgage and antichresis; only personal property can be the subject of simple loan or mutuum, voluntary deposit, pledge and chattel mortgage. Donation – real property – public instrument; personal property – private instrument To affect 3rd persons -­‐ Transactions involving real property must be recorded in the Registry of Property; this is not so in the case of personal property c.
Prescription Although there is bad faith, ownership of real property may be acquired in 30 years; for personal property, 8 years d.
Venue e.
Taxation Double sales under 1544 Immovables are governed by the law of the country wherein they are located, whereas movables are governed by the personal laws of the owner which in some cases is the law of his nationality and in other cases, the law of his domicile. f.
Publicity and recordings are more important for immovables (ex: double sale). As to movables, possession is equivalent to title. g.
h.
Preference of credits Causes of action to recover Proper action to recover possession of real property may be an action for forcible entry and unlawful detainer. For personal property, replevin or manual delivery. 4.
Differences between Real Rights and Personal Rights Real rights (jus in re) – power belonging to a person over a specific thing, without a passive subject determined against whom such right may be personally exercised Characteristics: (1) a subject and an object connected by a relation of ownership of the former over the latter; (2) general obligation or duty of De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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respect for such relation, there being no particular passive subject; (3) effective actions recognized by law to protect such relation against anyone who may want to disturb it. Personal rights (jus ad rem) – power belonging to one person to demand of another, as a definite passive subject, the fulfillment of a prestation to give, to do or not to do Characteristics: (1) 2 subjects, active and passive, who are determined and specified; (2) general obligation on the part of 3rd persons to respect the relation between the active and passive subjects; (3) effective actions in favor of the active subject against the passive subject for the performance of the prestation by the latter so that the relation between them may produce its natural and juridical effects. Distinctions By the no. of persons involved in juridical relation By the object of the juridical relation By the manner in which the will of the active subject affects the thing By the cause creating the juridical relation By the methods of extinguishment of the juridical relation By the nature of the actions arising from them C.
Real One definite active subject, rest of the world as passive Personal Definite active and passive subjects Corporeal thing Intangible thing Directly affects the thing Indirectly affects the things through the prestation of the debtor Mode and title Title alone Extinguished by loss or destruction of the thing Give rise to real actions against 3rd persons Not extinguished by the loss or destruction of the thing Only personal actions against the definite debtor Classification by Ownership Article 419. Property is either of public dominion or of private ownership. Public dominion – Owned by the State in its public or sovereign capacity and intended for public use and not for the use of the State as a juridical person. It is held in trust for the interest of the community. Private ownership – can be exercised by the State in its private capacity or by private persons Public Dominion v. Ownership: §
Public dominion does not import the idea of ownership. Property of public dominion is not owned by the State but simply under its jurisdiction and administration for the collective enjoyment of all the people of the State of which it is the territorial sovereign. §
The purpose of property of public dominion is not to serve the State as a juridical person but the citizens; it is intended for the common and public welfare, so it cannot be the object of appropriation either by the State or by private persons. The relation of the State and this property arises from the fact that the State is the juridical representative of the social group, and as such it takes care of and preserves the same, and regulates its use for the general welfare. 1.
Res Nullius §
This does not belong and are not enjoyed by anyone such as abandoned property. 2.
Public Dominion Property of public dominion – property of the State in its public capacity. Such properties are those intended for public use, for some public service, or for the development of the national wealth. Dominium -­‐ capacity of the State to own or acquire property. a.
Property of State Article 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. i.
For public use “Shores” means that portion of land which is subject to the ebb and flow of the waters of the sea. May be used by everybody, even by strangers or aliens, in accordance with its nature; but nobody can exercise over it the rights of a private owner. Examples of “others of similar character” – public streams, natural beds of rivers, river channels, waters of rivers, creeks, accretions to the shore of the sea by the action of the water, reclaimed lands, private lands which have been invaded by the waters or waves of the sea and converted into portions of the shore or beach, streets. ii.
For public service Includes fortresses, unleased mines and civil buildings. Does not distinguish between movables and immovables; hence, whatever the condition of the property, provided it is for public service, it falls within this category. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Property Reviewer
Public use May be used by anyone indiscriminately Public service May be used only by authorized persons iii.
For development and national wealth Includes natural resources such as minerals, coal, oil and forest Cases: RA 7942 (Philippine Mining Act of 1995) was passed to govern the exploration, development, utilization and processing of all mineral resources. R.A. No. 7942 defines the modes of mineral agreements for mining operations, outlines the procedure for their filing and approval, assignment/transfer and withdrawal, and fixes their terms. Similar provisions govern financial or technical assistance agreements (FTAAs). President entered into an FTAA with WMCP covering 99,387 hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato. Also, 100 FTAA applications had already been filed, covering an area of 8.4 million hectares, 64 of which applications are by fully foreign-­‐owned corporations covering a total of 5.8 million hectares, and at least one by a fully foreign-­‐owned mining company over offshore areas. The constitutionality of RA 7942 and its related issuances are questioned. The arguments of the respondents sought to enforce their theory that under the 1987 Constitution, their contracts rooted from RA 7942, which practically allows a even a foreign corporation to fully manage and operate all aspect of the mining activity, are valid and supported. R.A. No. 7942 is invalid insofar as said Act authorizes service contracts. Although the statute employs the phrase "financial and technical agreements" in accordance with the 1987 Constitution, it actually treats these agreements as service contracts that grant beneficial ownership to foreign contractors over the nation's mineral resources, leaving the State with nothing but bare title thereto, it being contrary to the fundamental law. Tracing back the development of the laws (Constitution and statutes) relating to the natural resources of the Philippines, it can be concluded that upon the enactment of the 1987 Constitution, its intention is to retain the Regalian doctrine – “All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State.” This intention is qualified by other provisions in the same article regarding the property of the state. It can be seen that the provision balances the need for foreign capital and technology with the need to maintain the national sovereignty. It recognizes the fact that as long as Filipinos can formulate their own terms in their own territory, there is no danger of relinquishing sovereignty to foreign interests. The WMCP FTAA is a service contract. It violates the Constitution because it is contrary to the language of the Constitution – Section 2, Article XII of the Constitution: FTAAs should be limited to "technical or financial assistance" only. The WMCP FTAA allows WMCP, a fully foreign-­‐owned mining corporation, to extend more than mere financial or technical assistance to the State, for it permits WMCP to manage and operate every aspect of the mining activity. The phrase "service contracts" has been deleted in the 1987 Constitution's Article on National Economy and Patrimony. If the CONCOM intended to retain the concept of service contracts under the 1973 Constitution, it could have simply adopted the old terminology ("service contracts") instead of employing new and unfamiliar terms ("agreements . . . involving either technical or financial assistance"). This leads to the inevitable conclusion that under the new Constitution, foreign investors (fully alien-­‐owned) can NOT participate in Filipino enterprises except to provide: (1) Technical Assistance for highly technical enterprises; and (2) Financial Assistance for large-­‐scale enterprises. The intent of this provision, as well as other provisions on foreign investments, is to prevent the practice (prevalent in the Marcos government) of skirting the 60/40 ownership equation using the cover of service contracts. The rationale for specifically removing “service contracts” is that these lodge exclusive management and control of the enterprise to the service contractor like the old concession regime where the concessionaire had complete control over the country's natural resources, having been given exclusive and plenary rights to exploit a particular resource and, in effect, having been assured of ownership of that resource at the point of extraction. Service contracts, hence, are antithetical to the principle of sovereignty over our natural resources, as well as the constitutional provision on nationalization or Filipinization of the exploitation of our natural resources. (La Bugal-­‐B’laan Tribal Association v. Ramos, Jan 27, 2004) www
Motion for Reconsideration of the decision of the SC declaring unconstitutional certain provisions of RA. 7942 and laws related and pursuant to it, on the ground that such provisions are in the nature of service contracts and are therefore contrary to the law of the land. Stress is made on the fact that WMCP has transferred its shares to a Filipino corporation – Sagittarius. The FTAA is not per se defective or unconstitutional. It was questioned only because it had been issued to an allegedly non-­‐qualified, foreign-­‐owned corporation. Nothing in the Constitutional provision prohibits the State from entering into an FTAA with a Filipino Corporation. When the transfer of the FTAA happens to be a Filipino corporation, the need for such safeguard is not critical. The court concedes that there exists the distinct possibility that one or more of the future FTAAs will be the subject of yet another suit grounded on constitutional issues. The Court must recognize the exceptional character of the situation and the paramount public interest involved, as well as the necessity for a ruling to put an end to the uncertainties plaguing the mining industry and the affected communities as a result of doubts cast upon the constitutionality and validity De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Definition and Classification of Property
Property Reviewer
of the Mining Act, the subject FTAA and future FTAAs, and the need to avert a multiplicity of suits. The basic issue, which goes back to the laws passed and the contentions as to their validity, relates to the question of whether or not Congress, DENR and the President acted within their jurisdiction. The SC finds that they did act within their respective jurisdictions. Under the doctrine of separation of powers and due respect for co-­‐equal and coordinate branches of government, this Court must restrain itself from intruding into policy matters and must allow the President and Congress maximum discretion in using the resources of our country and in securing the assistance of foreign groups to eradicate the grinding poverty of our people and answer their cry or viable employment opportunities in this country. Let the development of the mining industry be the responsibility of the political branches of the government. And let not this Court interfere inordinately and unnecessarily. (La Bugal-­‐
B’laan Tribal Association v. Ramos, on Reconsideration, Dec. 2004, Feb. 2005) www Under the Amended Joint Venture Agreement (JVA) entered into by PEA and AMARI (a private corporation), the JVA covers a reclamation area of 750 has. Only 157.84 has. of the 750-­‐has. reclamation project have been reclaimed, and the rest of the 592.15 has. are still submerged areas forming part of Manila Bay. Under the agreement, AMARI will acquire and own a maximum of 367.5 has. of reclaimed land which will be titled in its name. The issue is whether AMARI can acquire and own under the Amended JVA 367.5 has, of reclaimed foreshore and submerged areas in Manila Bay in view of Sections 2 and 3, Article 12 of the 1987 Const. Under Section 2, Article 12 of the 1987 Const, the foreshore and submerged areas of Manila Bay are part of the “lands of the public domain, waters xxx and other natural resources” and consequently owned by the State. As such, foreshore and submerged areas “shall not be alienated,” unless they are classified as “agricultural lands” of the public domain. There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession. Moreover, these reclaimed lands cannot be classified as alienable or disposable if the law has reserved them for some public or quasi-­‐public use. PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain, and also constitute a declaration that the Freedom Islands are no longer needed for public service. The Freedom Islands (157.84 has.) are thus alienable or disposable lands of the public domain, open to disposition or concession to qualified parties. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Const. and existing laws. As regards the submerged 592.15 has of land, there is no legislative or Presidential act classifying these submerged areas as alienable or disposable lands of the public domain open to disposition. These submerged areas are not covered by any patent or certificate of title. There can be no dispute that these submerged areas form part of the public domain, and in their present state are inalienable and outside the commerce of man. Until reclaimed from the sea, these submerged areas are, under the Constitution, "waters x x x owned by the State," forming part of the public domain and consequently inalienable. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares of the Freedom Islands, such transfer is void for being contrary to Section 3, Article 12 of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article 12 of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain. (Chavez v. Public Estates Authority) *Note, decision was affirmed on Reconsideration www
Between the the houses of the Useros and the Resp. is a low-­‐
level strip of land, with a stagnant body of water filled with floating water lilies that causes considerable damage to the house of respondents whenever it storms. The respondents then made some construction on the low-­‐level strip of land and rip-­‐rapped the soil on it. The Useros claimed that they owned that portion of the land and filed a case of forcible entry against resp. The resp. alleges that the the subject land is part of the creek and therefore is part of the public domain. All the pieces of evidence taken together, it can be concluded that the subject strip of land is a creek and belongs to no one but the state. Property is either of public dominion or private ownership. In reference to Art 420, the phrase “others of similar character” includes a creek which is a recess or an arm of a river. It is property belonging to the public domain which is not susceptible to private ownership. Being public water, a creek cannot be registered under the Torrens System in the name of any individual. The respondents may therefore construct on the land strip to prevent damages to their property. (Usero v. CA) www Acme purchased the lands in question from Mariano and Acer Infiel in 1962. The Infiels are members of the national cultural minorities who had, by themselves and through their progenitors, possessed and occupied those lands since time De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Definition and Classification of Property
Property Reviewer
immemorial, or for more than the required 30-­‐yeard period and were, by reason thereof, entitled to exercise the right granted in Section 48 of the Public Land Act to have their title judicially confirmed. Acme sought to register their ownership over the lands in 1981. This was opposed by the Director stating that since it was sought to be registered in 1981, the 1973 Constitution applies. And the 1973 Constitution would prevent such registration as it prohibits private corporations to hold lands of the public domain except in lease not exceeding 1,000 has. The question turns upon a determination of the character of the lands at the time of institution of the registration proceedings in 1981. If they were then still part of the public domain, then the registration is prohibited. If they were already private lands, the constitutional prohibition does not apply. The rule is that alienable public land held by a possessor, personally or through his predecessors-­‐in-­‐interest, openly, continuously and exclusively for the prescribed statutory period (30 yrs under The Public Land Act, as amended) is converted to private property by the mere lapse or completion of the said period by operation of law. The application for confirmation is mere formality. Following that rule and on the basis of the undisputed facts, the land subject here was already private property at the time it was acquired from the Infiels by Acme in 1962. Acme thereby acquired a registrable title, there being at the time (1962) no prohibition against said corporation’s holding or owning private land. The accidental circumstance that the proceedings were done under the aegis of the 1973 Constitution which forbids corporations from owning lands of the public domain cannot defeat a right already vested before that law came into effect. (Director of Lands v. IAC) b.
Property of Municipal Corporations Article 424. Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities. i.
For public use including public works for public service They are outside the commerce of man and therefore cannot be the subject matter of private contracts, they cannot be acquired by prescription and they are not subject to attachment and execution. 3.
Private Property a.
Patrimonial Property of the State Article 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property. Patrimonial property – the property over which the State has the same rights, and of which it may dispose, to the same extent as private individuals in relation to their own property, subject only to the administrative laws and regulations on the procedure of exercising such rights. This kind of property – 1) Enables the State to attain its economic ends 2) Serves as a means for the State’s subsistence and preservation 3) Enables the State to fulfill its primary mission Examples: friar lands, mangrove lands and mangrove swamps, escheated properties and commercial buildings May be acquired by private individuals or corporations thru prescription. 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. Property of public dominion ceases to be such and becomes private property of the State only upon a declaration by the government, thru executive or legislative departments, to the effect that it is no longer needed for public use or service. Example: fortresses no longer used b.
Patrimonial Property Corporations of Municipal Article 424. 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. The province or municipality, as a juridical entity, possesses private property to answer for its economic necessities. Properties of provinces, cities and municipalities may be classified into: 1) Those acquired with their own funds (in their private or corporate capacity) – the political subdivision has ownership and control 2) Those which do not fall under no. 1 – subject to the control and supervision of the state; held by the political subdivision in trust for the state for the benefit of the inhabitants c.
Private Property of Private Persons 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. Refer to all property belonging to private persons either individually or collectively. “Collectively” refers to ownership by private individuals as co-­‐
owners; or by corporations, partnerships, or other juridical De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Definition and Classification of Property
Property Reviewer
persons who are allowed by the CC to possess and acquire properties. Where a person has proved his right of ownership over a piece of land, and it is not shown that the State has a superior right thereto, the former must be recognized as owner even as against the State. Possession by private persons since time immemorial carries the presumption that the land had never been part of the public domain, or that it had been private property even before the Spanish conquest. Peculiar nature of ecclesiastical properties – churches strictly speaking are neither public nor private property. They constitute a special kind of property devoted to religious worship and as such, are outside the commerce of man. Cases: A writ of execution was issued against the municipal council for failure to pay a money judgment against it. As a result, the sheriff attached 2 auto trucks used for street sprinkling, one police patrol auto, the police stations, and the markets, including the lots occupied by them. The question involved is whether this attachment is valid or void. The attachment is void. Property for public use of the municipality is not within the commerce of man so long as it is used by the public and, consequently, said property is also inalienable. Property, real and personal, held by municipalities, in trust for the benefit of their inhabitants, and used for public purposes, is exempt from execution. (Tantoco v. Municipal Council) www By virtue of CA 39, the capital of Zamboanga province was changed to Dipolog. Its former capital – Municipality of Zamboanga became Zamboanga City. CA 39 provided that the properties (50 lots) left in Zamboanga City by Zamboanga province has to be paid by the former. Thereafter, a Cabinet Resolution was passed, which conveyed all such properties to Zamb. City for P1.00. Then later on, RA 711 was passed, which divided Zamboanga province into del Norte and del Sur. The President issued a ruling holding that del Norte had a vested right over the value of the properties mentioned in CA 39. Because of this, Zamboanga City had to allocate some of its revenue and pay Zamboanga del Norte. Later on, RA 3039 was passed, which provided that all assets belonging to Zamb. province are transferred freely to Zamb. City. Zamb. del Norte assails the constitutionality of RA 3039. SC holds that 26 lots are deemed patrimonial and Zamb. del Norte is entitled to be compensated for these lands, while RA 3039 is valid as to the other 24 lots. Properties owned by Zamboanga Province could have been public or patrimonial. If the property is owned by the municipality (meaning municipal corporation) in its public and governmental capacity, the property is public and Congress has absolute control over it. But if the property is owned in its private or proprietary capacity, then it is patrimonial and Congress has no absolute control. In this case, the municipality cannot be deprived of it without due process and payment of just compensation. There are 2 norms of classifying the properties – based on the Art. 423-­‐4 of CC and based on the Law of Municipal Corporations. Applying the norm in the CC, all the properties in question, except the two (2) lots used as HS playgrounds, could be considered as patrimonial properties of the former Zamboanga province. Applying the norm obtaining under the principles constituting the law of Municipal Corporations, all those of the 50 properties in question which are devoted to public service are deemed public; the rest remain patrimonial. Under this norm, to be considered public, it is enough that the property be held and devoted for governmental purposes like local administration, public education, public health, etc. The Court is more inclined to uphold the view that the controversy is more along the domains of the Law of Municipal Corporations than along that of Civil Law. The Court is not inclined to hold that municipal property held and devoted to public service is in the same category as ordinary private property. The consequences are dire. As ordinary private properties, they can be levied upon and attached. They can even be acquired thru adverse possession, all these to the detriment of the local community. Moreover, the Law of Mun. Corp., for the purpose of Art. 424, can be considered as “special law.” (Zamboanga del Norte v. City of Zamboanga) www RA 4118, passed by the Senate and approved by the President, had the effect of converting the subject lot into patrimonial property and being transferred to a government branch – the LTA. The mayor of the city brought an action to prohibit LTA from further implementing RA 4118 as the law was unconstitutional as it deprives the city its property without due process and just compensation. The land in question is not a patrimonial property of the city and therefore, RA 4118 did not violate the right to due process. The city failed to show by any shred of evidence in what manner it acquired said land as its private or patrimonial property. In the absence of a title deed to any land claimed by the City of Manila as its own, showing that it was acquired with its private or corporate funds, the presumption is that such land came from the State upon the creation of the municipality. The general rule is that regardless of the source or classification of land in the possession of a municipality, excepting those acquired with its own funds in its private or corporate capacity, such property is held in trust for the State for the benefit of its inhabitants, whether it be for governmental or proprietary purposes. It holds such lands 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 municipality being but a subdivision or instrumentality thereof for purposes of local administration. (Salas v. Jarencio) www De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Definition and Classification of Property
Property Reviewer
The land in question was part of the public road, but it was declared by the city as an abandoned road. It was later on sold in a public bidding where Cebu Oxygen Co. was the highest bidder, who sought to register the land in its name. City fiscal opposed to dismiss the registration saying the property is outside the commerce of man as it is part of the public domain. The sale is valid. The City Charter of Cebu City gives the city the right to declare a road as abandoned, to close a road or street, and also to withdraw it from public use. Art. 442 of the CC provides that when such property is withdrawn from public use, it follows that such withdrawn portion becomes patrimonial property. Consequently such property can be the object of an ordinary contract. (Cebu v. Bercilles) www Money judgment was rendered against the municipality. When the judgment became final, respondents moved for a writ of execution. The municipality moved to quash the motion on the ground that its property or funds are all public funds exempt from execution. The rule is that public funds are exempt from execution. Public funds are held in trust for the people, intended and utilized for the accomplishment of the purposes for which municipal corporations are created. To subject said properties and public fund to executions would materially impede, defeat, or even destroy such purpose. Moreover, the Decree on Local Fiscal Administration states that there must be a corresponding appropriation before any money of the municipality may be paid out. (Municipality of San Miguel v. Fernandez) www The lots formerly formed part of the parcel of land belonging to the predecessor of Cabangis. Due to the action of the Manila Bay waves, the land began to wear away until it became completely submerged in water. When the government undertook dredging procedures, it deposited the sand and silt on the lands submerged in water until the land part gradually formed the lots again. Cabangis then sought to declare the lots for purposes of taxation. The lots are held to be public land belonging to the government. In a case of gradual encroachment or erosion by the ebb and flow of the tide, private property may become 'property of public ownership,' as defined in article 339 of the code, where it appears that the owner has to all intents and purposes abandoned it and permitted it to be totally destroyed, so as to become a part of the 'playa' (shore of the sea), 'rada' (roadstead), or the like. They then pass to the public domain, but 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 eminent domain, and not subject to indemnity." The lots in question having disappeared on account of the gradual erosion due to the ebb and flow of the tide, and having remained in such a state until they were reclaimed from the sea by the filling in done by the Government, they are public land. (Government v. Cabangis) 4.
Effect and Significance of Classification of Property as Property of Public Dominion a.
b.
Property is outside the commerce of man Property cannot be the subject of acquisitive prescription c. Property cannot be attached or levied upon in execution d. Property cannot be burdened with a voluntary easement D. Other Classifications 1. By their physical existence a. Corporeal All property the existence of which can be determined by the senses (res qui tangi possunt). Includes rights of ownership of corporeal things. b.
Incorporeal Things having abstract existence, created by man and representing value. Includes rights over incorporeal things, credits, and real rights other than ownership over corporeal things. 2.
By their autonomy or dependence a.
Principal b.
Accessory Those to which other things are considered dependent or subordinated, such as the land on which a house is built. Those which are dependent upon or subordinated to the principal. They are destined to complete, enhance or ornament another property. 3.
By their subsistence after use Article 418. Movable property is either consumable or nonconsumable. 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. a.
Consumable Those whose use according to their nature destroys the substance of the thing or causes their loss to the owner. (ex: food) Consumable goods cannot be the subject matter of a contract of commodatum unless the purpose of the contract is not the consumption of the object, as when it is merely for exhibition. b. Non-­‐consumable – ex: money in coin De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Definition and Classification of Property
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i.
Differentiated from fungibles and non-­‐fungibles Fungibles v. Non-­‐fungibles: §
The quality of being fungible depends upon their possibility, because of their nature or the will of the parties, of being substituted by others of the same kind, not having a distinct individuality. §
These are generally the things whose individuality can be determined by counting, weighing or measuring. Consumable v. Fungible: §
Fungible and non-­‐fungible – according to purpose, depending on whether they can be substituted by other things of the same kind, quality and quantity. §
Consumable and non-­‐consumable – according to the nature of the thing. §
It is the intention of the parties to a contract which determines whether the object is fungible or non-­‐
fungible and not the consumable or non-­‐consumable nature of the thing. b.
7.
c.
a.
4.
By reason of their susceptibility to division a.
Divisible Those which can be divided physically or juridically without injury to their nature. Ex: piece of land or an inheritance. Singular i.
Simple ii.
Compound b.
Universal When several things collectively form a single object in law under one name. 8.
Susceptibility to appropriation a.
Non-­‐appropriable b.
Appropriable Already appropriated Not yet appropriated Susceptibility to commerce i.
ii.
Deteriorable or non-­‐deteriorable Contents and constitution Deteriorable – those that deteriorate through use or by time Non-­‐deteriorable – those that do not deteriorate Future Those which do not exist in actuality, but whose existence can reasonably be expected with more or less probability, such as ungathered fruits. 9.
a.
Within the commerce of man Those which can be the object of juridical transactions. b.
Outside the commerce of man Those which cannot be the object of juridical transactions. b.
Indivisible Those which cannot be divided without destroying their nature or rendering impossible the fulfillment of the juridical relation of which they are object. 5.
By reason of designation a.
Generic That which indicates its homogenous nature, but not the individual such as a horse, house, dress, without indicating it. b.
Specific That which indicates the specie or its nature and the individual, such as “the white horse of X”. 6.
Existence in point of time a.
Present Those which exist in actuality, either physical or legal, such as, the erected building. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Ownership
Property Reviewer
Part 2. Ownership Article 427. Ownership may be exercised over things or rights. A. Definition Ownership – It is independent right of exclusive enjoyment and control of a thing for the purpose of deriving therefrom all the advantages required by the reasonable needs of the owner (or holder of the right) and the promotion of the general welfare, but subject to the restrictions imposed by law and rights of others. (J.B.L. Reyes) Ownership is a relation in private law by virtue of which a thing (or property right) pertaining to one person is completely subjected to his will in everything not prohibited by public law or the concurrence with the rights of another. (Scialoja) B. Bundle of rights included in Ownership 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) Jus Utendi – receive what it produces 2) Jus Fruendi – receive fruits 3) Jus Abutendi – consume by use 4) Jus Disponendi – dispose, alienate, encumber, transfer, transform, destroy 5) Jus Vindicandi – exclude others from possession of the thing 6) *Jus Possidendi -­‐ possess Article 429. The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal therof. 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. Principle of self-­‐help -­‐ This is a qualification to the rule that a person should not take the law in his own hands; it is a sort of self-­‐defense. This doctrine authorizes the lawful possessor to use reasonable force to prevent a threatened unlawful invasion or usurpation of the property. The actual invasion of property may consist of a mere disturbance of possession or of a real dispossession. If it is 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. If the invasion, however, consists of real dispossession, force to regain possession can be used only immediately after the dispossession. Who may use force -­‐ The right to use force to defend property is given only to the immediate possessor but the possessor need not have a real or personal right over the thing; he may have no right over it at all. There must, however, be a real aggression, an imminent violation of law. Nature of Aggression -­‐ The aggression must be illicit or unlawful. The right to self-­‐help is not available against the exercise of right by another. It is immaterial that the aggression is executed because of error of fact or law; the existence of the danger of violation of law and right is sufficient, for the possessor is not in a position to know the error of the aggressor and he has to make a quick decision. C.
Other specific rights found in Civil Code 1.
Right to exclude; self-­‐help; doctrine of self help; elements (see article 429) Elements: 1) Person exercising right is the owner or lawful possessor of the property; 2) There is actual or threatened unlawful physical invasion of his property; 3) Use of force as may be reasonably necessary to repel or prevent it a) The right is available only when possession has not been lost; otherwise, the owner or lawful possessor should resort to the judicial process b) The right may be exercised by a third person. In such event, such person is acting as a negotiorum gestor and the owner or possessor must indemnify him for injuries sustained while exercising that right 2.
Right to enclose or fence 3.
Right to receive just compensation in case of expropriation 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. The right of an owner to enclose his tenement is limited by the servitudes existing thereon. 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. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Ownership
Property Reviewer
Public use or utility – The question whether any particular use is a public one, is ultimately a judicial question. Necessity for the expropriation does not mean absolutely indispensable, but requires only a reasonable necessity of the taking for the purpose in view. Payment of indemnity – The payment is a condition precedent to the taking of private property for public use. That is to say, proprietary rights, except right of occupation, are not affected by the condemnation proceedings until the title has passed to the petitioner, and that does not occur until the award of compensation for damages has been satisfied. Amount to be paid – Just compensation, therefore, means a fair and full equivalent for the loss sustained. The owner is entitled to the market value of the condemned property to which must be added his consequential damages, if any, or, from which must be deducted his consequential benefits, if any. 4.
Right to hidden treasure Article 438. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-­‐half thereof shall be allowed to the finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure. If the things found be of interest to science or the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. Article 439. By treasure is understood, for legal purposes, any hidden and unknown deposit of money, jewelry or other precious objects, the lawful ownership of which does not appear. Concept of hidden treasure – Two requirements: 1) that they consist of money, jewels, or other precious objects 2) that they are hidden and unknown, such that their finding is a real discovery Precious objects – The law seems to refer only to movables as hidden treasure. Owner unknown – It is necessary, in order that the deposit be considered hidden treasure, that the owner is not known. Owner of hidden treasure: 1) If the finder is the owner of the property, the treasure belongs to the owner of the property; 2)
3)
4)
If the finder is a third person, and he discovered it by chance, he is entitled to ½ of the value thereof. The other half pertains to the owner of the property where it was found. If the finder is an intruder, he is not entitled to anything. If the finder is the usufructuary, and he discovered the hidden treasure by chance, then he is entitled to ½ of the value thereof. The other half belongs to the naked owner. Note: “By chance” means that the finder has no intention to search for the treasure. 5.
Right to 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. Accession, defined – The right by virtue of which the owner of a thing becomes the owner of everything that it may produce or which may be inseparably united or incorporated thereto, either naturally or artificially. 6.
Right to recover possession and/or ownership – Jus Vindicandi a. Available actions to recover possession/ownership Re: Immovable Property 1)
2)
3)
Accion reivindicatoria – recovery of ownership, not merely possession; prescription: 30 years Accion publiciana – recovery of possession due to tolerance of owner; availed of if action of forcible entry is not filed in one year; prescription: 10 years Accion interdictal – prescription 1 year a) Forcible entry – illegal possession from the start; prescription: 1 year from actual dispossession Lawful possessor was unlawfully deprived of possession through FISTS (Force, Intimidation, Strategy, Threat or Stealth) b)
Unlawful detainer – illegal possession from failure to vacate from the time a notice to vacate is given; prescription: 1 year from the last notice Demand may be personal or in writing. Cases: Petitioners filed a case with the RTC for a parcel of land they claim to have been inherited from their father (who acquired the property from respondent’s grandmother). Respondent built a house on said property saying that he was given De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Ownership
Property Reviewer
consent by his grandmother. The RTC took cognizance of the case. The CA reversed the RTC decision for lack of jurisdiction based on a tax declaration showing an assessed value of P5,950 presented by Hilario. The SC held that the RTC does not have jurisdiction over the petitioner’s action. The petitioner’s theory is that their action is one of accion reivindicatoria wherein regardless of the assessed value, the RTC has jurisdiction. However, the claim was not one for ownership but that of possession and thus, is one of an accion publiciana. (Hilario v. Salvador) www A complaint for forcible entry through strategy and stealth was filed by the private respondents against the petitioner saying that the owner of the lot is their mother and that upon death, the private respondents became co-­‐owners. The petitioner, on the other hand, claimed that he was given permission by the lot’s overseer and true owners spouses Terrado. The court held that the action for forcible entry will not prosper. While the crucial element of the issue of possession in determining forcible entry is present, the complainant private respondent must allege jurisdictional facts of prior physical possession. In this case, the CA was wrong to hold that the position of being an oppositor in the cadastral case was sufficient to establish prior physical possession. (Sampayan v. CA) www A previous occupant of a lot adjacent to petitioner’s lot built a building that encroached upon the petitioner’s property. The building is now used by the respondent spouses as a warehouse. When petitioner bought the property, he informed the respondents that the building occupies a portion of his land but allowed them to use it nevertheless. 11 years later, petitioner demanded that the spouses demolish and remove part of the building encroaching his property but the spouses refused to do so. Petitioner then filed a complaint for illegal detainer. The SC held that unlawful detainer was the proper remedy. An unlawful detainer cause of action is based on a recovery of the possession of a property whose possession was inceptively lawful but became illegal when possession was not restored despite the termination of the right. Possession by tolerance is lawful but it becomes unlawful when the possessor by tolerance refuses to vacate upon demand of the owner. (Santos v. Ayon) www Respondent owner of property filed 21 ejectment complaints after the refusal of the petitioners to vacate the lot. Respondent has made a demand for such after previously tolerating the construction of residential houses and other improvements on her property without rent. In an unlawful detainer case, it must be alleged that the defendant was initially in lawful possession but the possession becomes unlawful upon termination or expiration of his right to possess. In the case at bar, respondent alleged that she owned the lot and tolerated construction and a subsequent withdrawal of such tolerance. Thus, respondent’s ejectment complaint was proper. (Ganila v. CA) www Mandaue Prime acquired properties in question & informed the respondent spouses Ong to vacate. They filed an unlawful detainer case. The respondents question the jurisdiction of the court they filed it in claiming that the action should have been accion reinvindicatoria. The Court ruled that the complaint makes out a case for unlawful detainer. The allegation in the complaint that there was unlawful withholding of possession is sufficient to make out a case for unlawful detainer, even without necessarily employing the terminology of law. The phrase “unlawful withholding” implies possession on the part of the defendant which was legal in the beginning, having no other source than a contract, express or implied, and which later expired as a right and is being withheld by defendant. (Ross Rica v. Ong) www Respondent forcefully took possession of the subject lot. Petitioners filed a complaint for “recovery of possession and ownership”. Respondent questions the jurisdiction of the lower court claiming that a forcible entry case has prescribed because his possession has been for 2 years. The Court held that the case should have been filed in the RTC and not the MTC and the action should have been Accion Publiciana or Accion Reinvindicatoria. An action for forcible entry is a quieting process and the one year bar for filing suit is in pursuance of the summary nature of the action. After the lapse of the one year period, the suit must be commenced in the RTC via an accion publiciana, a suit for recovery of the right to possess. It is an ordinary civil proceeding to determine the better right of possession of realty independent of title. It also refers to an ejectment suit filed after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty independently of title. Likewise, a case may be instituted before the same court as an accion reivindicatoria, which is an action to recover ownership as well as possession. Note: Ei incumbit probation qui dicit, non qui negat – He who asserts, not he who denies, must prove. (Peralta-­‐Labrador v. Bugarin) Re: Movable Property 4)
Replevin – manual delivery of the property; prescription: 4 or 8 years De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Ownership
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b. Requisites for Recovery 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. Requisites for recovery – The possessor of property has the presumption of title in his favor. Thus, any person who claims that he has a better right to the property must prove: 1) that he has a better title than the defendant to the property; and 2) the identity of the property. Identify the property – May be established by presenting evidence such as survey plan of the property or the testimony of competent and credible witnesses. Case: Petitioners allege that they are owners of a parcel of land. They find out that their neighbor to the west (respondent Caballero) was selling their land. They presented conflicting evidence, namely tax declarations and other documents as regards the sale of the land to the petitioners. 1st step in an action regarding property: know where the property is. If you don’t know the exact boundaries of the property is then you can’t file an action to protect it. The court found that the evidence presented by the petitioners presented (the documents alleging the sale and tax declarations) did not properly identify the land in question. (Seriña V. Caballero) Prove his right of ownership – rely on strength of his evidence not on weakness of defendant’s claim – A person who claims the ownership of property is duty bound to clearly identify the land claimed, in accordance with the titles on which he founds his right to ownership, and he shall not be permitted to rely upon defects in the defendant’s title. His right to recover must be founded on positive title or right, and not merely on negative ones, such as lack or insufficiency of title on the part of the defendant. Proof of ownership – Ownership may be proved by any evidence admissible in law. Once a decree of registration has been made under the Torrens system and the period of 1 year has elapsed, the title becomes perfect. The ownership and title to land duly recorded cannot be overcome by gratuitous titles, such as inheritance or donation or mere tax declarations. Tax declarations and receipts, however, are strong evidence of ownership of land when accompanied by possession for a period sufficient for prescription. Long Possession – The fact of long possession may be established in conjunction with other proof of title in order to show 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. Cases: Estanislao Montalbo owned a tract of land. When he died, his properties passed on to his children, Petra and Felisa. By mutual agreement, Petra and Felisa divided between themselves the lands of their father. Felisa exchanged her share with a parcel of land belonging to her aunt, Andrea Montalbo. Andrea donated ½ of the lot to the municipality for use as a school site while the other half was given to her daughter on the occasion of her marriage. Petra’s husband learned of the exchange, and upon investigation, found that in the deed of exchange, the signature of the municipal secretary was forged. He then filed a criminal complaint against Andrea Montalbo and Andrea’s son-­‐in-­‐law, Nicolas Mendoza. The Court took note of the fact that the defendants have been in continuous possession of the land openly, adversely and in the concept of owners since 1927 and the plaintiffs have not attempted to disturb defendants’ possession until 1952. The defendants have therefore acquired ownership of the land through acquisitive prescription. Possession is an indicium of ownership of the thing possessed and to the possessor goes the presumption that he holds the thing under the claim of ownership. Article 433 states that the actual possession under claim of ownership raises a disputable presumption of ownership. As in the instant case there are conflicting claims of possession by the parties over the land in controversy and because the fact of possession cannot be recognized at the same time in two different personalities except in cases of co-­‐possession the present possessor is to be preferred pursuant to Article 538. The Mendozas are presently in possession of the property and the presumption of ownership in their favor has not been successfully rebutted by evidence that they are mere lessees as the Perezes claimed. There was no proof of lease, and the Mendozas were the ones consulted for the road-­‐widening project. (Perez v. Mendoza) www People trying to prove that they’re heirs of a property owner and are therefore entitled to inheritance. All they had was averments that they were related to the deceased. Therefore their claim was a fail. (Dizon V CA) D. Limitations of real right of ownership 1. General Limitation a. 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 De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Ownership
Property Reviewer
compensation, unless he can show that such condemnation or seizure is unjustified. Police power limits ownership in the sense that a property may be interfered with, even destroyed, if so demanded by the welfare of the community. When property is impaired by police power, the owner, unlike in eminent domain, is not entitled to just compensation. It is a case of “damage to property without injury” – damnum absque injuria. Extent of police power – It is universally conceded to include everything essential to public safety, health, and morals, and to justify the destruction or abatement, by summary proceedings, of whatever may be regarded as a public nuisance. Requisites – To justify the exercise of police power, the following must appear: 1) that the interests of the public generally, as distinguished from those of a particular class, require such interference; and 2) that the means are reasonably necessary for the accomplishment of a purpose, and not unduly oppressive upon individuals. b.
Taxation This is the inherent power of the State to raise revenue to defray the necessary governmental expenses for a public purpose. Through taxation, the governed who enjoy the benefits of protection to their lives, liberty and property must bear the financial burdens of the government. Thus, real and personal property may be taxed and sold, if necessary, for the non-­‐payment of taxes. c.
Eminent domain It is the superior right of the State to acquire private property for public use upon payment of just compensation. Requisites – To justify the exercise of the right of eminent domain, the following requisites must all be present: 1) Private property as the object of the expropriation; 2) The property is taken by the State or by competent authority; 3) The purpose of the taking is for public use; 4) The taking must be attended with due process of law; 5) There is payment of just compensation 2.
Specific Limitation a.
b.
3.
Legal Servitudes Limitations imposed by the party transmitting the property Limitation from scattered provisions of Civil Code Article 431. – The owner of a thing cannot make use thereof in such manner as to injure the rights of a third person. Sic Utere Tuo Ut Alienum Non Laedas – It is unlawful to exercise the right of ownership in such a manner as to have no other effect than to injure a third person without benefit to the owner. This is also the basis of a tort action for damages. 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. Act in State of Necessity – When another’s property is used to avert danger not arising from it. In other words, it is for the purpose of protecting the actor himself or another person at the expense of the owner of the property who has no part in the state of necessity. The source of danger is immaterial. It is necessary, however, that the interference with another’s property be indispensable to avert the threatened danger or damage. Comparative danger – The seriousness or gravity of the danger must be much greater than the damage to the property affected or destroyed by the protective act. In determining the value of the property, not only the economic but also the sentimental value of the property must be considered. Permissible acts – The interference occasioned by a state of necessity includes all acts on the property to avert the danger or damage, including its destruction. The owner is obliged to tolerate these acts. Effect of mistake – If through error, one believed himself to be in a state of necessity, or used means in excess of the requirements of the situation, his act would be illicit, and the owner of the property can properly use against him the defensive force authorized in Article 429 (Self-­‐help doctrine). Indemnity for damages – The provision calling for indemnity should be considered a general rule. By way of exception, if the owner of the property causing the danger would have been responsible for damages if the danger had not been averted, then this fact deprives him of the right to indemnity. Basis for liability – Benefit derived. See other provisions in the Civil Code: 1) 2191 (Liability of Proprietors) 2) 677 (Fortified places/Fortresses) 3) 644 & 678 (Easement of Aqueduct) 4) 679 (Planting of Trees) De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Ownership
Property Reviewer
5) 670 (Easement of light and view) 6) 649 & 652 (Easement of right of way) 7) 637 (Easement of passage of water from upper to lower tenements) 8) 676 (Drainage of buildings) 9) 684-­‐687 (Easement of Lateral and Subjacent Support) Cases: Consti case of airplanes killing chickens because the farm was beside an airfield. The farmer sued the government, among one of the grounds was trespassing. Note the ancient common law doctrine: cujus est solum ejus est usque ad coelum (usque ad infernos) – ownership of the land to the periphery of the universe. This common law doctrine is no longer applied in the modern world, in view of the doctrine that the air is a public highway. The Court, however, said that this principle is not applicable in the present case. If the flights over respondents’ property rendered it inhabitable, there would be a taking that must be compensable. It is the owner’s loss, not the taker’s gain, which is the measure of the value of the property taken. Market value fairly determined is the normal measure of the recovery. And that value may reflect the use to which the land could readily be converted, as well as the existing use. If, by reason of the frequency and altitude of flights, respondents could not use this land for any purpose, their loss would be complete. The fact that the planes never touched the surface is irrelevant. The owner’s right to possess and exploit the land – his beneficial ownership of it – would be destroyed. Although airspace is a public highway, if the landowner is to have full enjoyment of the land, he must have exclusive control of the immediate reaches of the enveloping atmosphere. Otherwise, buildings could not be erected, trees could not be planted, and even fences could not be run. The landowner owns at least as much of the space above the ground as he can occupy or use in connection with the land. (US v Causby) www Defendant built a dam on his property and subsequently flooded the properties of the plaintiffs. The owner of lower lands cannot erect works that will impede or prevent such an easement or charge, constituted and imposed by the law upon his estate for the benefit of higher lands belonging to different owners; neither can the latter do anything to increase or extend the easement. It is true that the Code authorizes every owner to enclose his estate by means of walls, ditches, fences or other device, but this right is limited by the easement imposed upon his estate. The owner of the property is always under the strict and necessary obligation to respect the statutory easement of the waters charged upon his property. (Lunod v Meneses) De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Right of Accession
Property Reviewer
Part 3. Right of Accession Article 440. The ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially. A. Concept Definition – the right by virtue of which the owner of a thing becomes the owner of everything that it may produce or which may be inseparably united or incorporated thereto, either naturally or artificially. Accession is not a mode of acquiring ownership. It is merely a consequence of the right of ownership. It presupposes a pre-­‐
existing right of ownership. Accession discreta is based on principles of justice. Accession continua is based generally on principles of utility and necessity. B. General Principles of Accession 1. Applicable to both accession discreta an accession continua a. Accessory follows the principal 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 446. All works, sowing, and planting are presumed made by the owner and at his expense, unless the contrary is proved. Arts. 445 and 446 lay down the general rule. The land is the principal and whatever is built on it is the accessory. Basis is principle of justice. It is only just and fair that a thing should also own whatever it produces, unless there is some special reason for a contrary solution. b.
No one shall be unjustly enriched at the expense of another 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 their value; and, if he acted in bad faith, he shall also be obliged to the reparation of damages. The 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. Article 455. If the materials, plants or seeds belong to a third person who has not acted in bad faith, the owner of the land shall answer subsidiarily for their value and only in the event that the one who made use of them has no property with which to pay. This provision shall not apply if the owner makes use of the right granted by article 450. If the owner of the materials, plants or seeds has been paid by the builder, planter or sower, the latter may demand from the landowner the value of the materials and labor. The landowner has the right to acquire what is built, planted or sown with the corresponding obligation to pay the value of the materials used (Art. 447). If the materials belong to a 3rd person, the landowner shall answer subsidiarily (primarily the BPS) unless he exercises his option of removal (Art. 455) 2.
Applicable to accession continua a.
Whatever is build, planted, or sown to 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 (445). The term “building” is a generic term for all architectural work with roof, built as a dwelling, or for offices etc. It is not necessary that the trees or plants have taken root, it is enough that they are planted in order to belong to the landowner. b.
All works, sowing and planting are presumed made by owner and at his expense, unless contrary is proved. (Article 446) “All works” means the construction, improvement, or repair of building and all analogous works. Two disputable presumptions of Art. 446 1) Works were made by the owner 2) Works were made at the owner’s expense (Or if a 3rd person does so, it is presumed that it was with the owner’s consent) One who alleges the contrary has the burden to prove his allegations. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Right of Accession
Property Reviewer
Exception: Article 120 FC FC Article 120. The ownership of improvements, whether for utility or adornment, made on the separate property of the spouses at the expense of the partnership or through the acts or efforts of either or both spouses shall pertain to the conjugal partnership, or to the original owner-­‐spouse, subject to the following rules: When the cost of the improvement made by the conjugal partnership and any resulting increase in value are more than the value of the property at the time of the improvement, the entire property of one of the spouses shall belong to the conjugal partnership, subject to reimbursement of the value of the property of the owner-­‐spouse at the time of the improvement; otherwise, said property shall be retained in ownership by the owner-­‐spouse, likewise subject to reimbursement of the cost of the improvement. In either case, the ownership of the entire property shall be vested upon the reimbursement, which shall be made at the time of the liquidation of the conjugal partnership. For the article to be applicable, the landowner should be known. c.
Accessory incorporated to principal such that it cannot be separated without injury to work constructed or destruction to plantings, construction or works The incorporation or union of the principal and accessory must be intimate, such that removal therefrom would cause substantial injury to wither or both. d.
Bad faith involves liability for damages and other dire consequences e.
Bad faith of one party neutralizes bad faith of the other – Art. 453 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 part of the landowner whenever the act was done with his knowledge and without opposition on his part. You cannot apply the doctrine of in pari delicto here. Where the parties are equally in bad faith, they shall both be considered in good faith. Neither the landowner nor the BPS may demand as a matter of right removal of improvements against the will of the other because such right is applicable only to a party in good faith and the others in bad faith. (Arts. 447, 449, 450, 453 and 455) 3.
Applicable to accession discreta alone a.
Ownership of Fruits –To owner of principal thing belongs the natural, industrial and civil fruits (Article 441) 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 kinds through cultivation or labor. Civil fruits – are rents of buildings, the price of leases or land and other property and the amount of perpetual life annuities or other similar income. Exceptions: 1)
2)
3)
4)
C.
Possession in good faith – possessor is entitled to fruits In Usufruct – usufructuary is entitled to fruits In Lease – lessee is entitled to fruits In Antichresis – antichretic creditor is entitled to fruits Obligations of Receiver of Fruits to pay expenses by 3rd person in production, gathering and preservation-­‐ Article 443 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 applies where: 1) The owner of the property recovers the same from a possessor and the possessor has not yet received the fruits although they may have already gathered or harvested; or 2) The possessor has already received the fruits but is ordered to return the same to the owner. The owner is obliged to reimburse the previous possessor for the expenses incurred by the latter. The expenses incurred by another inured to the benefit of the owner who receives the fruits. Without such expenses, there would have been no fruits. The article’s rationale is in keeping with the principle that no man may unjustly enrich himself at the expense of another. 2 characteristics of expenses in order to be reimbursable: 1) Must be dedicated to the annual production, and not for the improvement of the property; De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Property Reviewer
2)
Must not be unnecessary, excessive, or for pure luxury, but must be reasonable. Article 443 is the general rule while Article 449 is the exception. D. Kinds of Accession 1. Accession Discreta (Fruits) – Article 440 a. Natural b. Industrial c. Civil Cases: Emil Bachrach died leaving his widow, herein petitioner with all the fruits and the usufruct of the remainder of his estate which includes 54,000 shares of stock dividends. The widow petitioned the court to authorize the administrator of the estate to transfer to her the said shares, claiming that the dividend is fruit or income and thus belonged to her as usufructuary or life tenant. The defendants opposed the petition. The Pennsylvania rule (all earnings of a corporation, when declared as dividends in whatever form, made during the lifetime of the usufructuary, belong to the latter) is more in accord with our statutory laws. A dividend, whether in the form of cash or stock, is income or fruit and consequently should go to the usufructuary. Mary Bachrach is the owner of the shares of stock in usufruct. Dividend is declared only out of the profits of a corporation and not out of his capital. (Bachrach v. Seifert) www Several sugar planters of Talisay-­‐Silay mortgaged their lands in order to secure the debts of Talisay-­‐Silay against PNB. As compensation for the planters’ risk, Talisay promised to give them a bonus equal to 2% of the debt secured. Because of this promise, Bachrach filed a complaint against Talisay asking for Ledesma’s bonus as payment of the latter’s debt against Bachrach. A bonus paid by the mortgage-­‐debtor to another who had mortgaged his land to secure the payment of the debtor’s obligation to a bank is not a civil fruit of the mortgaged property. Such bonus bears no immediate, but only a remote and accidental relation to the land. It is not income delivered from the property but a compensation granted for the risk assumed by the owner of the property. (Bachrach v. Talisay Silay) 2.
Accession Continua OVER IMMOVABLES a.
Artificial or Industrial – Building, Planting, Sowing (BPS) i.
Owner is Builder, Planter, Sower (BPS) using material of another – Article 447 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 their value; and, if he acted in bad faith, he shall also be obliged to the reparation of damages. The 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. The owner of materials used by another does not become a part owner of the thing constructed but is ONLY entitled to recover their value. The owner of the land does not have the option to offer to return the materials instead of paying their value. BPS is in bad faith with respect to the materials if he knew that he had no right to make use of such materials. The owner of the materials would be in bad faith if such materials were used by another in his presence, with his knowledge and forbearance, and without opposition on his part. (a) In Good Faith OM – lies in ignorance of BPS’ acts BPS/LO – good faith lies in the belief that the materials belong to him and is also not aware that there exists in his title or mode of acquisition any flaw which invalidates it. Note: His negligence may subject him to liability for damages. (b) In Bad faith OM – allowing the use of the materials without protest BPS/LO – bad faith exists when there is knowledge of lack of title and the absence of permission of the owner of the material to pay their value. ii.
BPS builds, plants or sows on another’s land using his own materials – Article 448 – 454 Rationale – where the BPS has acted in good faith, 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. The law provides a solution by giving the landowner options – 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. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Right of Accession
Property Reviewer
The landowner cannot refuse to exercise either option. It is the landowner who is authorized 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. To fall within the provisions of this article, the construction must be of a permanent character. If it is of a transitory character or is transferable, there is no accession. The builder must remove the construction. (a) BPS in Good Faith – Article 448 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. This article applies only to a case where the BPS believes that he has a claim of title to the land. A possessor in good faith is one who has no knowledge of any flaw or defect in his title or mode of acquisition. Good faith is presumed under Article 527 and he who alleges bad faith has the burden of proving the same. (b) BPS in Bad Faith – Article 449, 450, 451 Article 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity. Article 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay the price of the land, and the sower the proper rent. Article 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder, planter or sower. Options to Owner of Land: 1)
2)
To Acquire building, planting, and sowing §
BPS has right to retention §
Retains possession without paying rental §
Not entitled to fruits; his rights are the same as an antichretic creditor. To sell to BP, to lease land S §
BP may refuse if value of land considerable more than BP; then –forced lease by LO and BP §
BPS in Bad Faith – Article 449,450, 451 Rights of builder, planter, sower in bad faith -­‐ Article 452, 443: Article 452. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses of preservation of the land. 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. §
Landowner in bad faith but BPS in good faith – Article 454, 447 – reason for adverting to rule 447 iii. BPS builds, plants, sows on another’s land with materials owned by 3rd person – Article 455 Article 455. If the materials, plants or seeds belong to a third person who has not acted in bad faith, the owner of the land shall answer subsidiarily for their value and only in the event that the one who made use of them has no property with which to pay. This provision shall not apply if the owner makes use of the right granted by article 450. If the owner of the materials, plants or seeds has been paid by the builder, planter or sower, the latter may demand from the landowner the value of the materials and labor. Nota Bene: Good faith does not exclude negligence – Article 456 Cases: Petitioner bought a parcel of land only to find out that Bataclan has been authorized by former owners, as far back as 1922, to clear the land and make improvements thereon. The lower court held Bataclan to be a possessor in good faith and entitled to reimbursement with right of retention. Baticlan was unable to pay so the land was sold to a public auction, won by Teodoro. When in the face of a conflict between the rights of an owner and a builder, sower, planter in good faith, the owner (Bernardo) opts to sell the land to the BPS (Bataclan) who is De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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subsequently unable to pay, Bataclan loses his right of retention. A forced co-­‐ownership occurs when the BPS has acted in good faith. A conflict of rights arises and it becomes necessary to protect the owner of the improvements without causing injustice to the owner. 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. (Bernardo v. Bataclan) www The lower court rendered judgment holding HIlario as the legal owner of the property, but recognized Ignacio as the owner of the improvements (houses and granaries) he built in good faith. Hilario was given the option to either reimburse Ignacio for the improvements or to sell the land to Ignacio. He exercised neither option. Since the option to remove or demolish improvement is given to the landowner and it is limited to paying for the improvement or selling his land to the BPS, he cannot refuse to exercise his right of choice and compel the builder to remove or demolish the improvement. He is entitled to such removal only when after choosing to sell his land, the other party fails to pay for the same. (Ignacio v. Hilario) www The spouses Valentino were told by the mother of the female Valentino that they can construct a residential house on a lot of 145 square meters. They did construct a house, only to find out later that the lot did not belong to his mother-­‐in-­‐law but to the spouses Santos who sold the same to Sarmiento. Spouses Valentino cannot be ejected from the land automatically because they were builders in good faith. The owner of a building erected in good faith on a land owned by another is entitled to retain possession of the land until he is paid the value of the building. According to Article 448, Sarmiento may either pay for the building or sell his land to the Valentinos. Sarmiento cannot refuse both option and then compel the owner of the building to remove it from the land. He is entitled to such only when the Valentinos failed to pay. (Sarmiento v. Agana) www Depra is the owner of a parcel of registered land, located in the municipality of Dumangas, Iloilo. Sometime in 1972, Dumlao constructed his house ; his kitchen thereof had encroached on Depra’s property. Depra’s mother asked Dumlao to move back from his encroachment and filed an action for unlawful detainer. The lower court found Dumlao to be a builder in good faith and ordered a forced lease. The Municipal court overstepped its bounds when it ordered a forced lease which is an interest in real property, the jurisdiction of which belongs to the Court of First Instance. Depra cannot refuse payment of the encroachment and at the same time refused to sell the encroached part of his lot to Dumlao. He is entitled only such removal only after having chosen to sell the encroached lot, Dumlao failed to pay. The SC set the following guidelines for enforcement of rights under Article 448 and 546. 1. TC must determine the fair price of the land, expenses for improvement and increase in value of land due to improvements. 2. TC must grant period where landowner must exercise option; parties must pay in accord with the option chosen; builder can refuse to offer to sell if value of land is greater than the value of improvements; and if the situation is that of the third, the parties can agree upon the terms of the lease. If there are no agreements, the TC must fix the terms. (Depra v. Dumlao) www Technogas Phils. is the registered owner of a parcel of land situated in Barrio San Dionisio, Paranaque, Manila. Edgardo Uy is the owner of the land which adjoins plaintiff’s land. Later, it was found out that portions of the buildings and wall bought by Technogas are occupying a portion of defendant’s adjoining land. Upon learning of the encroachment, Technogas ordered to buy from Uy that particular portion, but Uy refused the offer. Technogas did not lose its rights under Article 448 merely because of the fact that some years after acquiring the property in good faith, it learned about and aptly recognized the right of Uy to a portion of the land occupied by the building. The supervening awareness does not prejudice its right to claim the status of a builder in good faith. Uy’s options are limited to appropriating the encroaching portion of Technogas’ building after payment of proper indemnity or obliging the latter to buy the lot occupied by the said structure. Uy’s insistence on the removal of the encroaching structures as the proper remedy is legally flawed. He will only be able to avail of it 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. (Technogas Philippines v. CA) www The lot in controversy was formerly the subject of homestead application one Martin Dolorico, plaintiff’s ward who already died. Since it was plaintiff who continued the cultivation and possession of the property without however filing any application to acquire title; Martin Dolorico I, the uncle of the deceased, was named as his heir and successor in interest. Thereafter, the uncle executed an affidavit relinquishing his rights over the said property in favor of defendants Quirino Comintan and Eleuterio Zamora. All the fruits that the possessor may receive from the time that he is summoned or when he answers the complaint must be delivered or paid by him to the owner or lawful possessor. Such is the time when his good faith has ceased. While he may retain the property until he is reimbursed for necessary and De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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useful expenses, all the fruits he receives from the moment his good faith ceases must be deferred or paid by him to the landowner. He may, however, secure the reimbursement of his expenses by using the fruits to pay it off. (Ortiz v. Kayanan) www It appears that Lot No. 3765-­‐B-­‐1 containing an area of 314 square meters was originally owned by the petitioners' mother, Paulina Amado vda. de Geminiano. On a 12-­‐square-­‐
meter portion of that lot stood the petitioners' unfinished bungalow, which the petitioners sold in November 1978 to the private respondents for the sum of P6,000.00, with an alleged promise to sell to the latter that portion of the lot occupied by the house. Subsequently, the petitioners' mother executed a contract of lease over a 126 square-­‐meter portion of the lot, including that portion on which the house stood, in favor of the private respondents for P40.00 per month for a period of seven years commencing on 15 November 1978. The private respondents then introduced additional improvements and registered the house in their names. On 9 February 1993, the petitioners sent, via registered mail, a letter addressed to private respondent Mary Nicolas demanding that she vacate the premises and pay the rentals in arrears within twenty days from notice. Upon failure of the private respondents to heed the demand, the petitioners filed with the MTCC of Dagupan City a complaint for unlawful detainer and damages. The lessees were not builders in good faith and not entitled to reimbursement of the value of the house and improvements. The SC, holding that Articles 448 and 546 of the Civil Code, which allow possessors in good faith to recover the value of improvements and retain the premises until reimbursed, did not apply to lessees like the private respondents, because the latter knew that their occupation of the premises would continue only during the life of the lease. Besides, the rights of the private respondents were specifically governed by Article 1678, which allows reimbursement of up to one-­‐half of the value of the useful improvements, or removal of the improvements should the lessor refused to reimburse. It is undisputed that the private respondents came into possession of a 126 square-­‐meter portion of the said lot by virtue of a contract of lease executed by the petitioners' mother in their favor. 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. (Germiniano v. CA) www Facts: Edith Robillo purchased from petitioner a parcel of land designated as Lot 9, Phase II and located at Taculing Road, Pleasantville Subdivision, Bacolod City. In the year 1975, respondent Jardinico bought the rights to the lot from Robillo and upon completion of the payments, he secured TCT. He then discovered that improvements had already been introduced on Lot 9 by respondent Wilson Kee. It appears that Kee bought on installment Lot 8. Unfortunately, the parcel of land pointed by the employee was Lot 9. The SC agrees with the CA that Kee is a builder in good faith. The roots of the controversy can be traced in the errors committed by the CTTEI when it pointed the wrong lot to Kee. Good faith consists in the belief of the builder that the land he is building on is his and he is ignorant of any defect or flaw in his title. And as good faith is presumed, Pleasantville has the burden of proving bad faith on the part of Kee. (Pleasantville Dev’t. Corp. v. CA) www Plaintiff Felices was the grantee of a homestead of over 8 hectares located in Pili, Camarines Sur. A month after, he conveyed in additional sale to defendant Iriola a portion of his homestead of more than 4 hectares. Two years after, Felices tried to recover the land but Iriola refused to allow it unless he was paid P2,000 as the alleged value of improvements. The rule of Article 453 of the CC invoked by Iriola cannot be applied to the instant case for the reason that the improvements in question were made on the premises only after Felices had tried to recover the land in question from him, and even during the pendency of this action in the court below. Iriola, recognizing as he does Felices’ right to get back his property, continued to act in bad faith when he made improvements on the land in question after he had already been asked extra-­‐judicially and judicially, to surrender and return its possession to appellee; and as a penalty for such bad faith, he must forfeit his improvements without any right to reimbursement therefor. (Felices v. Iriola) www Pedro Pecson owned a commercial lot located at Kamias Road, Quezon City on which he built a 4-­‐door, 2 storey apartment building. He failed to pay realty taxes and the lot was sold at a public auction. The spouses Nuguid were the ones who bought it. Pecson challenged the validity of the auction sale. The lower court upheld spouses Nuguid’s title but declared that the apartment building was not included in the auction. While the law aims to concentrate in one person the ownership of the land and the improvements thereon in view of the impracticability of creating a state of forced co-­‐
ownership, it guards against unjust enrichment insofar as the good faith builder’s improvements are concerned. The right of retention is one of the measures devised by law for the protection of builders in good faith. A builder in good faith cannot be compelled to pay rentals during the period of retention nor be distributed in his possession by ordering him to vacate. (Spouses Nuquid v. CA) De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Tables 1, 2 and 3. Outline Article 447-­‐455 Case 1: Landowner is BPS using material of another Landowner and BPS Good faith • Right to acquire the improvements after paying the value of materials. Bad faith • Acquire BPS after paying its value and paying indemnity for damages (Article 447) but subject to OM’s right to remove Owner of Material Good faith •
Limited right of removal if there would be no injury to work constructed, or without plantings or constructions being destroyed. (Article 447) •
Right to receive payment for value of materials Good faith •
Right to receive payment for value of materials •
Absolute right of removal of the work constructed in any event •
Right to be indemnified for damages Bad faith •
Lose materials without right to indemnity Good faith • Right to acquire the improvements without paying indemnity • Right to acquire indemnity for damages if there are hidden defects known to OM Bad faith Bad faith • Same as though acted in good faith under Article 453 •
Same as though acted in good faith under Article 453 Case 2: BPS builds, plants, or sows on another’s ;and using his own materials Landowner BPS and Owner of Material Good faith Good faith •
Landowner has option to: •
BPS has right to retain (right of retention) the land until the a. Acquire the improvement after paying indemnity which payment of indemnity may be the original cost of improvement OR increase in value of the whole brought about by the improvement NOTE: During this period BPS is not required to pay rent. b. Sell the land to the BP or collect rent from sower UNLESS value of land is more than the thing built, planted or sown or BP shall pay rent fixed by parties or by the court in case of disagreement. NOTE: Landowner can be forced to choose under pain of direct contempt or court can choose for him. Good faith Bad faith •
Landowner has right to collect damages in any case and •
Pay damages to landowner option to: •
BPS lose materials without right to indemnity a. Acquire improvements without paying indemnity if the •
No right to refuse to buy the land improvements are still standing on the land •
Recover necessary expenses for preservation of land b. Sell the land to BP or collect rent from the sower unless value of the improvements in which case there will be a forced lease c. Order demolition of improvements or restoration o0f land to its former condition at the expense of the BPS •
Landowner must pay for necessary expenses for preservation Bad faith Good faith •
Landowner must indemnify BPS for the improvements and •
BPS has right to : pay damages as if he himself did the BPS a. Be indemnified for damages b. Remove all improvements in any event •
Landowner has no option to sell the land and cannot compel BPS to buy the land unless BPS agrees to Bad faith Bad faith •
Same as though acted in bad faith under Article 453 •
Same as though acted in bad faith under Article 453 De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Case 3: BPS builds, plants or sows on another’s land with materials owned by third persons Landowner BPS Owner of Material Good faith Good faith Good faith •
Right to acquire improvements and •
Right of retention until necessary and •
Collect value of material primarily pay indemnity to BPS; subsdiarily useful expenses are paid from BPS and subsidiarily liable for liable to OM landowner if BPS is insolvent •
Pay value of materials to OM •
Has option to: •
Limited right of removal a. Sell land to BP except if the value of the land is considerably more b. Rent to sower Good faith Good faith Bad faith •
Right to acquire improvements and •
Right of retention until necessary and •
Lose the material without right to pay indemnity to BPS useful expenses are paid. indemnity •
Has option to: •
Keep BPS without indemnity to OM •
Must pay for damages to BPS a. Sell land to BP except if the value and collect damages from him of the land is considerably more b. Rent to sower •
Without subsidiarily liability for cost of materials Good faith Bad faith Bad faith •
Landowner has right to collect •
Recover necessary expenses for •
Recover value from BPS (as if both damages in any case and option to: preservation of land from landowner are in good faith) a. Acquire improvements w/o unless landowner sells land •
If BPS acquires improvement, remove paying for indemnity; or materials if feasible w/o injury b. Demolition or restoration; or •
No action against landowner but c. Sell to BP, or to rent to sower liable to landowner for damages •
Pay necessary expenses to BPS Bad faith Bad faith Bad faith •
Same as when all acted in good faith •
Same as when all acted in good faith •
Same as when all acted in good faith under Article 453 under Article 453 under Article 453 Bad faith Good faith Good faith •
Acquire improvement after paying •
May remove improvements •
Remove materials if possible w/o indemnity and damages to BPS unless •
injury Be indemnified for damages in any latter decides to remove event •
Collect value of materials from BPS; •
Subsidiarily liable to OM for value of subsidiarily from landowner materials Bad faith Bad faith Good faith •
Acquire improvements after •
Right of retention until necessary •
Collect value of materials primarily indemnity; subsidiarily liable to OM expenses are paid from BPS and subsidiarily from for value of materials landowner •
Pay value of materials to OM and pay •
Has option to: him damages •
Collect damages from BPS a. Sell the land to BP except if the •
If BPS acquires improvements, value of the land is considerably remove materials in any event more b. Rent to sower Good faith Bad faith Good faith •
Acquire imrovement after paying •
Right of retention until necessary •
Collect value of materials primarily indemnity; subsidiarily liable to OM expenses are paid from BPS and subsidiarily from landowner •
Landowner has option to: •
Pay value of materials to OM a. Sell land to BP except if value of •
Collect damages from BPS •
Pay damages to OM land is considerably more •
If BPS acquires improvements, b. Rent to sower absolute right of removal in any event Bad faith Good faith Bad faith •
Acquire improvements and pay •
Receive indemnity for damages •
No right to indemnity indemnity and damages to BPS unless •
Absolute right of removal of •
Loses right to mnaterial latter decides to remove materials improvements in any event De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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b.
Natural 1)
i. Alluvium – Article 457 Article 457. To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters. Alluvium – it is the soil imperceptibly and gradually deposited on the lands adjoining the banks of rivers caused by the current of the water. Accretion – it is the process whereby the soil is so deposited. Riparian owner – owner of the land fronting such riverbanks This accretion is known as alluvion. If land bordering on streams are exposed to floods and other damages due to the destructive force of the waters, and if by virtue of law they are subject to encumbrances and various kinds of servitudes, it is only just that such risks or dangers as may prejudice the owners thereof should in some way be compensated by right of accretion. Alluvion is said to have taken place already when the deposit of sediment has reached a level higher that the highest level of the water during the year. If the alluvion is formed suddenly, or when it is formed beneath the surface of the water and then it suddenly appears, there are some who believe that it should be considered as alluvion, because all the reasons applicable to alluvion exist in such case. Essential elements of alluvium: 1) That the deposit of soil or sediment be gradual and imperceptible; 2) That it be the result of an action of the waters of the river (or sea); 3) That the land where accretion takes place is adjacent to the banks of river (or the sea coast) Reasons why soil deposited (alluvio) is granted to owners of lands adjoining the banks of rivers: 2)
To offset his loss for possible erosion of his estate due to the current of the river; To compensate for his sufferings or burdens arising from the subjection of his land to encumbrances and legal easements. The current causing the alluvial deposit must be from a river. If it is from the sea, the deposit will pertain to the State. The requirement that the deposit should be due to the effect of the current of the water, excludes from this article all deposits caused by works expressly for that purpose. Alluvion must be the exclusive work of nature; hence, the owner of a tenement does not acquire the additions to his land cause by special works intended to bring about accretion because this would not be gradual accumulation from the current of the water. The registration of the riparian land under the prevailing land registration law does not protect the riparian owner against the diminution of the area of his land through gradual changes in the course of the adjoining stream. Alluvial property granted to the riparian owner, although automatically owned does not ipso facto automatically become a registered property. It may be lost to third persons by prescription if the riparian owner does not apply for its registration under the Land Registration Law. Cases: Respondents are registered owners of a parcel of land covered by a TCT situated at Meycauayan, Bulacan. They filed an application for the registration of 3 lots adjacent to their fishpond property but was opposed by the assistant provincial fiscal. Lot 3 was ordered withdrawn from the application and trial proceeded only with Lots 1 and 2. There is no accretion to speak of. Before an accretion takes place, 3 requisites must occur: deposit be gradual and imperceptible; it be made through the effects of a river current; and the land where accretion takes place is adjacent to the banks of rivers. For accretion or alluvion to form part of registered land of riparian owner, the gradual alluvial deposits must be due to the effects of the river’s current. Deposits made by human intervention are excluded. A riparian owner cannot register accretions to his land arising from special works or man-­‐made dikes constructed for reclamation purposes. (Republic v. CA) www Petitioners are the owners of a parcel of land located at Magsaysay, Isabela by inheritance from their deceased mother. When it was surveyed for purposes of registration sometime in 1930, its northeast boundary was the Cagayan River. Since then and for many years thereafter, a gradual accretion on the northeast side took place, by action of the river’s current. By 1958, the bank thereof had receded to a distance of about 105 meters from its original site and an alluvial deposit had been added to the registered area. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Alluvial deposits on registered land – An accretion does not automatically become registered land, just because the land which receives the accretion is covered by a Torrens title. Ownership of a piece of land is one thing; registration under the Torrens system of that ownership is another. Ownership over the accretion received by the land adjoining a river is governed by the Civil Code. Imprescriptibility of the registered land is provided by the registration law. (Grande v. CA) www Pablito Menseses acquired a 417 sq.m. and 515 sq. m. properties in Los Banos, Laguna, in consideration of Bautista’s “love and affection” and some “monetary obligation” in favor of Meneses. However, the same property was claimed by the Quisumbing family and traces their ownership since 1919. The heirs applied for registration and confirmation of title over an additional area of 2,387 sq.m. which had gradually accrued to their property by natural action of the waters of Laguna de Bay. The requisites of accretion are present. They are: 1. The deposition of soil or sediment be gradual and imperceptible; 2. The result of the action of the river or sea; and 3. The land where the accretion takes place is adjacent to the banks of river. The lands are then accretion lands and could only redound to the benefit of the Quisumbings who own the property adjacent to the land in controversy. (Meneses v. CA) 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. Pond – a body of stagnant water without any outlet. It is a small body of still water artificially formed by hallowing or embarking it refers also to a small lake. Lagoon – a small lake but not very deep, the hollow of which is bounded by the elevation of the land. Article 458 does not apply to lakes. A lake is a body of water formed in depressions of the earth, ordinarily of fresh water. Foreshore land – when the sea moves towards the estate and the tide invades it, the invade property becomes foreshore land and passes to the realm of public domain. ii. 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 – it is the process whereby a portion of the land is segregated from an estate by the forceful current of a river, creek or torrent and transferred to another estate. River – 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 be either continuous in one direction or affected by the ebb and flow of the tide. Elements of a river: water, bed and banks Creek – a recess or arm extending from a river, which precipitates in the ebb and flow of the sea. A creek is a small stream, less than a river, and is not a separate or independent stream. Torrent – a stream of water flowing with great rapidity and violence The transfer of a known portion of land from one tenement to another by force of the current is known as avulsion. The portion of the land must be such that it can be identified as coming from a definite tenement. If such identification is not possible, no right to remove the same can be recognized in anyone. Even if the portion of the land that has been transferred is a compact mass, if the tenement from which it came cannot be determined, there is no avulsion, and the present article does not apply. And when the transfer does not involve a compact mass, but only the soil from upper tenements have been removed by the water, and such soil is deposited on lower tenements, there is no known portion of land that can be removed under the provisions of this article. If the sediment of land taken from a riparian land is not a known mass that can be identified, but the area of the land is reduced through gradual erosion due to changes in the course of adjoining stream, there is no avulsion and the owner is not protected. A portion of land may be transferred from one tenement to another by other forces of nature than the current of a river, such as when land from a mountain slope rolls down to another tenement by reason of an earthquake. In the absence of an express provision on the matter, the present article can be applied by analogy. If the owner of the known portion of land removes it within two years, he retains the ownership thereof. The law does not expressly state the effect of his failure to remove such land within the period provided. The principle of accession, recognized by this article as operating after the period of two years, must apply whether the failure to remove be voluntary or involuntary, and irrespective of the area of the known portion that has been transferred De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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The unavoidable mixture of sediment at the point of contact between the portion of land and the surface of the tenement on which it was deposited is not sufficient to remove it from the operation of the present article. However, if by some force of nature, such as rain, the known portion is broken or loosen into soil which mixes with that of the tenement on which it is deposited, then there is no known portion which can be removed. By general rule of accession, the owner of the tenement with which the soil is merged becomes the owner of such soil. When the known portion taken by the current of the waters from one tenement is left in the middle of a stream, not united to any other tenement, the owner preserves his right of ownership over said portion. Requisites of avulsion: 1) The segregation and transfer is caused by current of water; 2) The segregations and transfer must be sudden or abrupt; 3) The portion of land transported must be known and identifiable. Alluvium v. Avulsion Alluvium Avulsion The process is sudden and abrupt, causing the The process of soil deposit on segregation of a portion of the land of the riparian owner land from one estate and is gradual and imperceptible. transferring it to another estate. The soil deposit is not The property detached is identifiable. known or identifiable. The ownership of the The alluvio belongs to the detached property is retained owner of the land to which by the owner, subject to the the soil had been deposited. removal thereof within 2 years from the detachment. The ownership of the detached property is not The ownership granted to the automatically vested in the riparian owner is automatic. owner of the tenement to which it was attached. Case: The property is foreshore land, hence part of public domain. The property is an accretion of land on a sea bank. Manila Bay being an inlet or arm of the sea; as such, the disputed property is public domain. The alluvium, by mandate of Article 457, 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 of 30 years by 3rd persons. (Navarro v. IAC) 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. iii. Change of course of River – Article 461-­‐463 Article 461. River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are occupied by the new course in proportion to the area lost. However, the owners of the lands adjoining the old bed shall have the right to acquire the same by paying the value thereof, which value shall not exceed the value of the area occupied by the new bed. 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. 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. If due to forces of nature (like floods, earthquakes, volcanic eruptions, etc.) a river changed its usual course and occupied the land of another creating therein a new riverbed and leaving the old bed to dry, the owner of the invaded land becomes the owner of the old bed in proportion to the area he lost. However, the government has the right and power to revert back the course of the new river to its original location. When the Government takes steps to return the river to its old bed, there is no abandonment of the riverbed. Requisites for the application of Article 461: 1) There must be a change in the natural course of the waters of the river; 2) The change must be abrupt or sudden. The Article will not apply if the river has branched out and created new courses without however abandoning the original riverbed. When a river or stream suddenly changes its course and in the process had traversed private lands, the owners of the affected lands may not compel the government to restore the river to its former bed. Dried-­‐up river – if the river just dried up for lack of flowing waters, Article 461 will not apply because there are no owners who were deprived of the lands by the change of river course. The dried up riverbed pertains to the State. Rationale behind the Article – to compensate for the loss of the land occupied by the new bed. It is more equitable to compensate the actual losers than to add land to those who have lost nothing. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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New riverbeds – the new riverbed becomes a property of public dominion. Right of the owner of land occupied by new river course: 1) Right to old bed ipso facto in proportion to the area lost; 2) Owner of adjoining land to old bed still have right to acquire the same by paying its value – value not to exceed the value of the area occupied by the new bed 3) Formation of island in non-­‐navigable river a) Owner of margin nearest to islands formed – if island formed is near one side b) Owner of both margins – if island is in the middle (divided into halves, longitudinally_ Art. 461 Where as a result of a flood a certain public stream changes its course, leaving a portion of its old bed dry, but as soon thereafter as practicable steps were taken under the direction of the government to bring back the stream in its former course and work was undertaken for this purpose, it was held that there was no abandonment of the old bed, that the public was not divested of its ownership over it, and that the stream might be properly brought back to its former course, over the opposition of the riparian owners. It is sufficient that there be some reasonable indication on the ground of the abandoned bed, and that there be sufficient evidence showing that the river changes its course not gradually or imperceptibility by abruptly and sudden. If the change in the course is due to works constructed by concessionaires authorized by government, the concession may grant the abandoned river bed to the concessionaires. 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 by this article, without prejudice to a superior right of third person with sufficient title. Art. 462 The natural bed of a river is the ground covered by its waters during ordinary floods. Since all beds of rivers are of public ownership, the banks, which for part thereof, are also of public ownership. Art. 463 This article refers to all rivers, whether navigable and floatable or not. The owner does not lose his ownership simply because of an inundation which has converted this land into an island. Cases: The government dug a canal on a private land to streamline the Tripa de Gallina creek. This lot was later acquired by Baes who named it in his name and subdivided it into 3 lots. New TCTs were issued but the Republic discovered that one of the lots, on which Baes erected an apartment building, covered a lot of Psay cadastre which is a filled-­‐up portion of the Tripa de Gallina creek. Baes’ contention is impressed with merit. The law speaks of the natural change in the course of the stream, and of the riparian owner is entitled to compensation for damage to or loss of property due to natural causes, there’s all the more reason to compensate him when the change in the course of the river, as in this case, is effected through artificial means. But since he has been given an equivalent lot, he is no longer entitled under the principle of unjust enrichment. (Baes v. CA) www The elongated strip of land formed by the western and eastern branches of the Cagayan River looked very much like an island. This strip of land was surveyed and was designated as Lot 821 and 822. Respondent Manalo claims that Lot 821 also belong to him by way of accretion to the submerged portion of the property to which it is adjacent. Petitioners in possession of Lot 821 insist that they own Lot 821. They occupy the outer edges of Lot 821 along the river banks. They also cultivate the western strip of the unsurveyed portion during summer. Respondents do not own Lot 821. Article 70 defines the natural bed channel of a creek or river as the ground covered by its waters during the highest floods. The highest floods in the eastern branch of the river occur with the annual coming of the rains as the river waters in their onward course cover the entire depressed portion. Respondent Manalo cannot acquire private ownership of the bed of the eastern branch of the river even if it was included in the deeds of absolute sale executed by Gregorio Taguba and Faustina Taccad in his favor. These vendors could not have validly sold land that constituted property of public dominion. (BInalay v. Manalo) iv. Formation of Islands – Article 461-­‐465 See PD No. 1067, Water Code 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 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. Art. 461 Once the river bed has been abandoned, the owners of the invaded land become owners of the abandoned bed to the extent provided by this article. There need be no act on their part to subject the accession to their ownership, as it is subject thereto ispo jure from the moment the mode of acquisition becomes evident. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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If the river bed runs dry, the river bed will continue to remain property of public dominion, in the absence of any provision vesting the ownership of the dried up river bed in some other person. Art. 462 The natural bed of a river is the ground covered by its waters during ordinary floods. Since all beds of rivers are of public ownership, the banks, which for part thereof, are also of public ownership. Art. 463 This article refers to all rivers, whether navigable and floatable or not. The owner does not lose his ownership simply because of an inundation which has converted this land into an island. Art. 464 Laurent and Ricci, commenting on the French and Italian codes, say that these islands form part of the patrimonial property of the State, which may sell them. Our Civil Code has no express provision on this point, and the solution offered by the two commentators has been considered applicable under our Code. Art. 465 This article refers to islands formed gradually by successive accumulations of deposits by the waters of the river, in the same manner as alluvion. It does not include those which are formed by the branching of a river, of those which are known portions of land from a tenement and deposited in the middle of the stream, in which cases their former owners preserve their ownership. It includes, however, new isles or islets formed between an existing island and the opposite river bank, in which case the owner of the owner of the older island is just considered as a riparian owner for the purpose of determining the ownership of the new isle and islet. Islands formed on Philippine seas, on lakes and on nabigable or floatable rivers belong to the State. Navigable or floatable river – it is a river which in its natural condition is capable of affording a channel or passage for ships and vessels engaged in commerce and as such must not be sufficient to float bancas or light boats but also bigger watercrafts. It must be deep enough to allow the unobstructed movements of ships and vessels. Test: A river is navigable id it is used or susceptible of being used, in its ordinary condition, as a highway of commerce, that is, for trade and travel in the usual and ordinary modes. Article 465 covers islands formed by successive accumulation of alluvial deposits. The formation must be in non-­‐navigable rivers; otherwise, Article 464 shall apply. The islands referred to in Article 465 shall pertain and belong to the owners of the margins or banks of the river nearest each of them. If the island happens to be striding in the middle of the river, it shall be divided longitudinally in halves – both owners of the opposite banks of the rivers will have a share on the islands formed. If the island is more distant from one bank compared to the opposite bank, the owner of the bank nearer the island shall be the sole owner thereof. PD 1067. The Water Code of the Philippines CHAPTER I DECLARATION OF OBJECTIVES AND PRINCIPLES Article 1. This Code shall be known as The Water Code of the Philippines. Article 2. The objectives of this Code are: (a) To establish the basic principles and framework relating to the appropriation, control and conservation of water resources to achieve the optimum development and rational utilization of these resources; (b) To define the extent of the rights and obligations of water users and owners including the protection and regulation of such rights; (c) To adopt a basic law governing the ownership, appropriation, utilization, exploitation, development, conservation and protection of water resources and rights to land related thereto; and (d) To identify the administrative agencies which will enforce this Code. Article 3. The underlying principles of this code are: (a) All waters belong to the State. (b) All waters that belong to the State can not be the subject to acquisitive prescription. (c) The State may allow the use or development of waters by administrative concession. (d) The utilization, exploitation, development, conservation and protection of water resources shall be subject to the control and regulation of the government through the National Water Resources Council, hereinafter referred to as the Council. (e) Preference in the use and development of waters shall consider current usages and be responsive to the changing needs of the country. Article 4. Waters, as used in this Code, refers to water under the grounds, water above the ground, water in the atmosphere and the waters of the sea within the territorial jurisdiction of the Philippines. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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CHAPTER II OWNERSHIP OF WATERS Article 5. The following belong to the State: (a) Rivers and their natural beds; (b) Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves; (c) Natural lakes and lagoons; (d) All other categories of surface waters such as water flowing over lands, water from rainfall whether natural, or artificial, and water from agriculture runoff, seepage and drainage; (e) Atmospheric water; (f) Subterranean or ground waters; and, (g) Seawater. Article 6. The following waters found on private lands belong to the State: (a) Continuous or intermittent waters rising on such lands; (b) Lakes and lagoons naturally occuring on such lands; (c) Rain water falling on such lands; (d) Subterranean or ground waters; and, (e) Water in swamps and marshes. The owner of the land where the water is found may use the same for domestic purposes without securing a permit, provided that such use shall be registered, when required by the Council. The Council, however, may regulate such when there is wastage, or in times of emergency. Article 7. Subject to the provisions of this Code, any person who captures or collects water by means of cisterns, tanks, or pools shall have exclusive control over such water and the right to dispose of the same. Article 8. Water legally appropriated shall be subject to the control of the appropriator from the moment it reaches the appropriator's canal or aqueduct leading to the place where the water will be used or stored and, thereafter, so long as it is being beneficially used for the purposes for which it was appropriated. CHAPTER III APPROPRIATION OF WATERS Article 9. Waters may be appropriated and used in accordance with the provisions of this Code. Appropriation of water, as used in this Code, is the acquisition of rights over the use of waters or the taking or diverting of waters from a natural source in the manner and for any purpose allowed by law. Article 10. Water may be appropriated for the following purposes: (a) Domestic (b) Municipal (c) Irrigation (d) Power generation (e) Fisheries (f) Livestock raising (g) Industrial (h) Recreational, and (i) Other purposes Use of water for domestic purposes is the utilization of water for drinking, washing, bathing, cooking or other household needs, home gardens, and watering of lawns or domestic animals. Use of water for municipal purposes is the utilization of water for supplying the water requirements of the community. Use of water for irrigation is the utilization of water for producing agricultural crops. Use of water for power generation is the utilization of water for producing electrical or mechanical power. Use of water for fisheries is the utilization of water for the propagation and culture of fish as a commercial enterprise. Use of water for livestock raising is the utilization of water for large herds or flocks of animals raised as a commercial enterprise. Use of water for industrial purposes is the utilization of water in factories, industrial plants and mines, including the use of water as an ingredient of a finished product. Use of water for recreational purposes is the utilization of water for swimming pools, bath houses, boating, water skiing, golf courses and other similar facilities in resorts and other places of recreation. Article 11. The State, for reasons of public policy, may declare waters not previously appropriated, in whole or in part, exempt from appropriation for any or all purposes and, thereupon, such waters may not be appropriated for those De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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purposes. Article 12. Waters appropriated for a particular purpose may be applied for another purpose only upon prior approval of the Council and on condition that the new use does not unduly prejudice the rights of other permittees, or require an increase in the volume of water. Article 13. Except as otherwise herein provided, no person, including government instrumentalities or government-­‐owned or controlled corporations, shall appropriate water without a water right, which shall be evidenced by a document known as a water permit. Water right is the privilege granted by the government to appropriate and use water. Article 14. Subject to the provisions of this Code concerning the control, protection, conservation, and regulation of the appropriation and use of waters, any person may appropriate or use natural bodies of water without securing a water permit for any of the following: (a) Appropriation of water by means of handcarried receptacles; and (b) Bathing or washing, watering or dipping of domestic or farm animals, and navigation of watercrafts or transportation of logs and other objects by flotation. Article 15. Only citizens of the Philippines, of legal age, as well as juridical persons, who are duly qualified by law to exploit and develop water resources, may apply for water permits. Article 16. Any person who desires to obtain a water permit shall file an application with the Council who shall make known said application to the public for any protests. In determining whether to grant or deny an application, the Council shall consider the following: protests filed, if any; prior permits granted; the availability of water; the water supply needed for beneficial use; possible adverse effects; land-­‐use economics; and other relevant factors. Upon approval of an application, a water permit shall be issued and recorded. Article 17. The right to the use of water is deemed acquired as of the date of filing of the application for a water permit in case of approved permits, or as of the date of actual use in a case where no permit is required. Article 18. All water permits granted shall be subject to conditions of beneficial use, adequate standards of design and construction, and such other terms and conditions as may be imposed by the Council. Such permits shall specify the maximum amount of water which may be diverted or withdrawn, the maximum rate of diversion or withdrawal, the time or times during the year when water may be diverted or withdrawn, the points or points of diversion or location of wells, the place of use, the purposes of which water may be used and such other requirements the Council deems desirable. Article 19. Water rights may be leaded or transferred in whole or in part to another person with prior approval of the Council, after due notice and hearing. Article 20. The measure and limit of appropriation of water shall be beneficial use. Beneficial use of water is the utilization of water in the right amount during the period that the water is needed for producing the benefits for which the water is appropriated. Article 21. Standards of beneficial use shall be prescribed by the council for the appropriator of water for different purposes and conditions, and the use of waters which are appropriated shall be measured and controlled in accordance therewith. Excepting for domestic use, every appropriator of water shall maintain water control and measuring devices, and keep records of water withdrawal. When required by the Council, all appropriators of water shall furnish information on water use. Article 22. Between two or more appropriators of water from the same sources of supply, priority in time of appropriation shall give the better right, except that in times of emergency the use of water for domestic and municipal purposes shall have a better right over all other uses; Provided, the where water shortage is recurrent and the appropriator for municipal use has a lower priority in time of appropriation, then it shall be his duty to find an alternative source of supply in accordance with conditions prescribed by the Council. Article 23. Priorities may be altered on grounds of greater beneficial use, multi-­‐purpose use, and other similar grounds after due notice and hearing, subject to payment of compensation is proper cases. Article 24. A water right shall be exercised in such a manner that the rights of third persons or of other appropriators are not prejudiced thereby. Article 25. A holder of water permit may demand the establishment of easements necessary for the construction and maintenance of the works and facilities needed for the beneficial use of the waters to be appropriated subject to the requirements of just compensation and to the following conditions: (a) That he is the owner, lessee, mortgagee or one having real right over the land upon which he proposes to use water; and (b) That the proposed easement is the most convenient and the least onerous to the servient estate. Easements relating to the appropriation and use of waters De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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may be modified by agreement of the contracting parties provided the same is not contrary to law or prejudicial to third persons. Article 26. Where water shortage is recurrent, the use of the water pursuant to a permit may, in the interest of equitable distribution of the benefits among legal appropriators, reduce after due notice and hearing. Article 27. Water users shall bear the diminution of any water supply due to natural causes or force majeure. Article 28. Water permits shall continue to be valid as long as water is beneficially used; however, it maybe suspended on the grounds of non-­‐compliance with approved plans and specifications or schedules of water distribution; use of water for a purpose other than that for which it was granted; non-­‐
payment of water charges; wastage; failure to keep records of water diversion, when required; and violation of any term or condition of any permit or rules and regulations promulgated by the Council. Temporary permits may be issued for the appropriation and use of water for short periods under special circumstances. Article 29. Water permits may be revoked after due notice and hearing on grounds of non-­‐use; gross violation of the conditions imposed in the permit; unauthorized sale of water; willful failure or refusal to comply with rules and regulations of any lawful order; pollution, public nuisance or acts detrimental to public health and safety; when the appropriator is found to be disqualified under the law to exploit and develop natural resources of the Philippines; when, in the case, of irrigation, the land is converted to non-­‐agricultural purposes; and other similar grounds. Article 30. All water permits are subject to modification or cancellation by the council, after due notice and hearing, in favor of a project of greater beneficial use or for multi-­‐purpose development, and a water permittee who suffers thereby shall be duly compensated by the entity or person in whose favor the cancellation was made. CHAPTER IV UTILIZATION OF WATERS Article 31. Preference in the development of water resources shall consider security of the State, multiple use, beneficial effects, adverse effects and costs of development. Article 32. The utilization of subterranean or ground water shall be coordinated with that of surface waters such as rivers, streams, springs and lakes, so that a superior right in one not adversely affected by an inferior right in the other. For this purpose the Council shall promulgate rules and regulations and declare the existence of control areas for the coordinated development, protection, and utilization of subterranean or ground water and surface waters. Control area is an area of land where subterranean or ground water and surface water are so interrelated that withdrawal and use in one similarly affects the other. The boundary of a control area may be altered from time to time, as circumstances warrant. Article 33. Water contained in open canals, aqueducts or reservoirs of private persons may be used by any person for domestic purpose or for watering plants as long as the water is withdrawn by manual methods without checking the stream or damaging the canal, aqueduct or reservoir; Provided, That this right may be restricted by the owner should it result in loss or injury to him. Article 34. A water permittee or appropriator may use any watercourse to convey water to another point in the watercourse for the purpose stated in a permit and such water may be diverted or recaptured at that point by said permittee in the same amount less allowance for normal losses in transit. Article 35. Works for the storage, diversion, distribution and utilization of water resources shall contain adequate provision for the prevention and control of diseases that may be induced or spread by such works when required by the Council. Article 36. When the reuse of waste water is feasible, it shall be limited as much as possible, to such uses other than direct human consumption. No person or agency shall distribute such water for public consumption until it is demonstrated that such consumption will not adversely affect the health and safety of the public. Article 37. In the construction and operation of hydraulic works, due consideration shall be given to the preservation of scenic places and historical relics and, in addition to the provisions of existing laws, no works that would required the destruction or removal of such places or relics shall be undertaken without showing that the distribution or removal is necessary and unaviodable. Article 38. Authority for the construction of dams, bridges and other structures across of which may interfere with the flow of navigable or flotable waterways shall first be secured from the Department of Public Works, Transportation and Communications. Article 39. Except in cases of emergency to save life or property, the construction or repair of the following works shall be undertaken only after the plans and specifications therefor, as may be required by the Council, are approved by the proper government agency; dams for the diversion or storage of water; structures for the use of water power, installations for the utilization of subterranean or ground water and other structures for utilization of water resources. Article 40. No excavation for the purpose of emission of a hot spring or for the enlargement of the existing opening thereof shall be made without prior permit. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Any person or agency who intends to develop a hot spring for human consumption must first obtain a permit from the Department of Health. Article 41. No person shall develop a stream, lake, or spring for recreational purposes without first securing a permit from the Council. Article 42. Unless-­‐otherwise ordered by the President of the Philippines and only in time of national calamity or emergency, no person shall induce or restrain rainfall by any method such as cloud seeding without a permit from the proper government emergency. Article 43. No person shall raise or lower the water level of a river stream, lake, lagoon, or marsh nor drain the same without a permit. Article 44. Drainage systems shall be so constructed that their outlets are rivers, lakes, the sea, natural bodies of water, or such other water course as may be approved by the proper government agency. Article 45. When a drainage channel is constructed by a number of persons for their common benefit, the cost of construction and maintenance of the channel shall be borne by each in proportion to the benefits drived. Article 46. When artificial means are employed to drain water from higher to lower land, the owner of the higher land shall select the routes and methods of drainage that will cause the minimum damage to the lower lands, subject to the requirements of just compensation. Article 47. When the use, conveyance or storage of waters results in damage to another, the person responsible for the damage shall pay compensation. Article 48. When a water resources project interferes with the access of landowner to a portion of his property or with the conveyance of irrigation or drainage water, the person or agency constructing the project shall bear the cost of construction and maintenance of the bridges, flumes and other structures necessary for maintaining access, irrigation, or drainage, in addition to paying compensation for land and incidental damages. Article 49. Any person having an easement for an aqueduct may enter upon the servient land for the purpose of cleaning, repairing or replacing the aqueduct or the removal of obstructions therefrom. Article 50. Lower estates are obliged to receive the waters which naturally and without the intervention of man flow from the higher estate, as well as the stone or earth which they carry with them. The owner of the lower estate can not 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. Article 51. The banks of rivers and streams and the shores of the seas and lakes throughout their entire length and within a zone of three (3) meters in urban areas, twenty (20) meters in agricultural areas and forty (40) meters in forest areas, along their margins are subject to the easement of public use in the interest of recreation, navigation, floatage, fishing and salvage. No person shall be allowed to stay in this zone longer than what is necessary for recreation, navigation, floatage, fishing or salvage or to build structures of any kind. Article 52. The establishment, extent, form, and conditions of easements of water not expressly determined by the provisions of this Code shall be governed by the provisions of the Civil Code. CHAPTER V CONTROL OF WATERS Article 53. To promote the best interest and the coordinated protection of flood plain lands, the Secretary of Public Works, Transportation and Communications may declare flood control areas and promulgate guidelines for governing flood plain management plans in these areas. Article 54. In declared flood control areas, rules and regulations may be promulgated to prohibit or control activities that may damage or cause deterioration or lakes and dikes, obstruct the flow of water, change the natural flow of the river, increase flood losses or aggravate flood problems. Article 55. The government may construct necessary flood control structures in declared flood control areas, and for this purpose it shall have a legal easement as wide as may be needed along and adjacent to the river bank and outside of the bed or channel of the river. Article 56. River beds, sand bars and tidal flats may not be cultivated except upon prior permission from the Secretary of the Department of Public Works, Transportation and Communication and such permission shall not be granted where such cultivation obstructs the flow of water or increase flood levels so as to cause damage to other areas. Article 57. Any person may erect levees or revetments to protect his property from flood, encroachment by the river or change in the course of the river, provided that such constructions does not cause damage to the property of another. Article 58. When a river or stream suddenly changes its course to traverse private lands, the owners of the affected lands may not compel the government to restore the river to its former bed; nor can they restrain the government from taking steps to revert the river or stream to its former course. The owners of the land thus affected are not entitled to compensation for any damage sustained thereby. However, the former owners of the new bed shall be the owners of the abandoned bed in proportion to the area lost by each. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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The owners of the affected lands may undertake to return the river or stream to its old bed at their own expense; Provided, That a permit therefor is secured from the Secretary of Public Works, Transportation and Communication and work pertaining thereto are commenced within two years from the change in the course of the river or stream. Article 59. Rivers, lakes and lagoons may, upon the recommendation of the Philippines Coast Guard, be declared navigable either in whole or in part. Article 60. The rafting of logs and other objects on rivers and lakes which are flotable may be controlled or prohibited during designated season of the year with due regard to the needs of irrigation and domestic water supply and other uses of water. Article 61. The impounding of water in ponds or reservoirs may be prohibited by the Council upon consultation with the Department of Health if it is dangerous to public health, or it may order that such pond or reservoir be drained if such is necessary for the protection of public health. Article 62. Waters of a stream may be stored in a reservoir by a permittee in such amount as will not prejudice the right of any permittee downstream. Whoever operates the reservoir shall, when required, release water for minimum stream flow. All reservoir operations shall be subject to rules and regulations issued by the Council or any proper government agency. Article 63. The operator of a dam for the storage of water may be required to employ an engineer possessing qualifications prescribed for the proper operations, maintenance and administration of the dam. Article 64. The Council shall approve the manner, location, depth, and spacing in which borings for subterranean or ground water may be made, determine the requirements for the registration of every boring or alteration to existing borings as well as other control measures for the exploitation of subterranean or ground water resources, and in coordination with the Professional Regulation Commission prescribe the qualifications of those who would drill such borings. No person shall drill a well without prior permission from the Council. Article 65. Water from one river basin may be transferred to another river basin only with approval of the Council. In considering any request for such transfer, the Council shall take into account the full costs of the transfer, the benefits that would accrue to the basin of origin without the transfer, the benefits would accrue to the receiving basin on account of the transfer, alternative schemes for supplying water to the receiving basin, and other relevant factors. CHAPTER VI CONSERVATION AND PROTECTION OF WATERS AND WATERSHEDS AND RELATED LAND RESOURCES Article 66. After due notice and hearing when warranted by circumstances, minimum stream flows for rivers and streams, and minimum water levels for lakes may be established by the Council under such conditions as may be necessary for the protection of the environment, control of pollution, navigation, prevention of salt damage, and general public use. Article 67. Any watershed or any area of land adjacent to any surface water or overlying any ground water may declared by the Department of Natural Resources as protected area Rules and regulations may be promulgated by such Department to prohibit or control such activities by the owners or occupants thereof within the protected area which may damage or cause the deterioration of the surface water or ground water or interfere with the investigation, use, control, protection, management or administration of such waters. Article 68. It shall be the duty of any person in control of a well to prevent the water from flowing on the surface of the land, or into any surface water, or any porous stratum under neath the surface without being beneficially used. Article 69. It shall be the duty of any person in control of a well containing water with minerals or other substances injurious to man, animals, agriculture, and vegetation to prevent such waters from flowing on the surface of the land or into any surface water or into any other aquifer or porous stratum. Article 70. No person shall utilize an existing well or pond or spread waters for recharging substerranean or ground water supplies without prior permission of the Council. Article 71. To promote better water conservation and usage for irrigation purposes, the merger of irrigation associations and the appropriation of waters by associations instead of by individuals shall be encouraged. No water permit shall be granted to an individual when his water requirement can be supplied through an irrigation association. Article 72. In the consideration of a proposed water resource project, due regard shall be given to ecological changes resulting from the construction of the project in order to balance the needs of development and the protection of the environment. Article 73. The conservation of fish and wildlife shall receive proper consideration and shall be coordinated with other features of water resources development programs to insure that fish and wildlife values receive equal attention with other project purposes. Article 74. Swamps and marshes which are owned by the State and which primary value for waterfowl propagation or other wildlife purposes may be reserved and protected from drainage operation and development. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Article 75. No person shall, without prior permission from the National Pollution Control Commission, build any works that may produce dangerous or noxious substances or perform any act which may result in the introduction of sewage, industrial waste, or any pollutant into any source of water supply. Water pollution is the impairment of the quality of water beyond a certain standard. This standard may vary according to the use of the water and shall be set by the National Pollution Control Commission. Article 76. The establishment of cemeteries and waste disposal areas that may affect the source of a water supply or a reservoir for domestic or municipal use shall be subject to the rules and regulations promulgated by the Department of Health. Article 77. Tailings from mining operations and sediments from placer mining shall not be dumped into rivers and waterways without prior permission from the Council upon recommendation by the National Pollution Control Commission. Article 78. The application of agricultural fertilizers and pesticides may be prohibited or regulated by the National Pollution Control Commission in the areas where such application may cause pollution of a source of water supply. CHAPTER VII ADMINISTRATION OF WATERS AND ENFORCEMENT OF THE PROVISIONS OF THIS CODE x x x CHAPTER VIII PENAL PROVISIONS xxx CHAPTER IX TRANSITORY AND FINAL PROVISIONS xxx Waters – refer to water under the ground, water above the ground, water in the atmosphere and waters of the sea within the territorial jurisdiction of the Philippines. Waters owned by the State: 1) Continuous or intermittent waters arising on such lands; 2) Lakes and lagoons naturally occurring on such lands; 3) Rain water falling on such lands; 4) Subterranean or ground waters; and 5) Waters in swamps and marshes Reverse Accession – 120 FC; 321 CC FC Article 120. The ownership of improvements, whether for utility or adornment, made on the separate property of the spouses at the expense of the partnership or through the acts or efforts of either or both spouses shall pertain to the conjugal partnership, or to the original owner-­‐spouse, subject to the following rules: When the cost of the improvement made by the conjugal partnership and any resulting increase in value are more than the value of the property at the time of the improvement, the entire property of one of the spouses shall belong to the conjugal partnership, subject to reimbursement of the value of the property of the owner-­‐spouse at the time of the improvement; otherwise, said property shall be retained in ownership by the owner-­‐spouse, likewise subject to reimbursement of the cost of the improvement. In either case, the ownership of the entire property shall be vested upon the reimbursement, which shall be made at the time of the liquidation of the conjugal partnership. Article 321. The property which the unemancipated child has acquired or may acquire with his work or industry, or by any lucrative title, belongs to the child in ownership, and in usufruct to the father or mother under whom he is under parental authority and in whose company he lives; but if the child, with the parent's consent, should live independently from them, he shall be considered as emancipated for all purposes relative to said property, and he shall have over it dominion, usufruct and administration. OVER MOVABLES The classes of accession when it comes to movable property are adjunction or conjunction, specification and commixtion or confusion. In adjunction or conjunction, two different things are so united that they form asingle object, but each component part preserves its nature. This last characteristic distinguishes it from commixtion or confusion, which implies a greater interpenetration and even decomposition of the things mixed. On the other hand, specification is distinguished from conjunction and commixtion in that there is union of two objects in the latter, while in the former it is the work of a third person that is united to the property of another. a.
Conjunction or Adjunction Article 466. Whenever two movable things belonging to different owners are, without bad faith, united in such a way that they form a single object, the owner of the principal thing acquires the accessory, indemnifying the former owner thereof for its value. 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. Article 468. If it cannot be determined by the rule given in the preceding article which of the two things incorporated is the De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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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. Art. 466 There is accession by adjunction only when the two things united cannot be separated without injury to them. It is necessary that: 1) That the two things belong to different owners 2) That they form a single object, or that their separation would impair their nature. The application of the rule of acceessorium sequitur principale, must give way to any express or implied agreement of the owners as to the ownership of the new object. When the adjunction is of three or more things, the provisions of this and the following articles should be applied, in an equitable manner. The judge should determine which is the principal, and adjudicate all the accessories to its owner. Art. 467 Criteria to determine principal: 1. That of the importance or purpose of the things, stated in this article. 2. That of their value 3. That of their volume Art. 468 When the criteria of value and of volume cannot be applied, because of equality of these conditions, the matter should be determined by taking into account all the provisions applicable in order to decide from the comparative merits, utility and volume of the things, which should be considered as the principal and which the accessory. Owner of the resulting object – the resulting object shall belong to the owner of the principal thing, but with the obligation to indemnify the owner of the accessory for the value of the latter’s thing. Good faith is necessary in adjunction. Good faith is that condition of the mind where the person concerned is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. If the owner of the principal thing acted in bad faith, Article 470 (2) will operate: “…the owner of the accessory thing shall have the right to choose between the former paying him its value or that the thing belonging to him be separated, even though for his purpose it be necessary to destroy the principal thing; and in both cases, furthermore, there shall be indemnity for damages.” Primary factors to determine the principal and the accessory (Article 467): (INTENT as consideration) 1) The thing which is incorporated to another thing as an ornament is the accessory. The other is the principal. 2) The thing which is added to or joined to another for the use or perfection of the latter is the accessory. The other is the principal. Secondary factors to determine the principal and the accessory (Article 468): 1) The thing of greater value shall be considered as principal. (VALUE as consideration) 2) If they happen to be of equal value, the one with greater volume shall be considered as principal. (VOLUME as consideration) 3) Special criteria: “In painting and sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone, canvas, paper or parchment shall be deemed the accessory thing.” The law gives more importance to the work done rather than on the things where the work has been done. The work is the result of an intellectual prowess and acumen which is beyond pecuniary estimation. Classes of adjunction or conjunction: i.
Inclusion or engraftment Art, 469 Impliedly, this article refers to adjunction by inclusion and by soldering, which are the only forms in which separation is possible without injury to the things united, and to which the situation contemplated in the second paragraph can have reference. The expenses for the separation of the objects should be borne by the owner who caused the union or incorporation, because he is the one responsible for the conflict of rights. E.g. setting a precious stone on a golden ring. The stone will pertain to the owner of the ring. ii. Soldadura or soldering Art, 469 Impliedly, this article refers to adjunction by inclusion and by soldering, which are the only forms in which separation is possible without injury to the things united, and to which the situation contemplated in the second paragraph can have reference. The expenses for the separation of the objects should be borne by the owner who caused the union or incorporation, because he is the one responsible for the conflict of rights. E.g. Joining a piece of medal to another metal belonging to a different owner. The object will belong to the owner of the principal thing as determined under Articles 467 or 468. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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(a) Plumbatura – different metals (b) Ferruminatio –Same metal iii. Tejido or weaving E.g. making a baby dress using threads belonging to another person. The dress will pertain to the weaver who owns the cloth. iv. Escritura or writing E.g. writing a poem on papers belonging to another. The papers will pertain to the writer. v. Pintura or painting E.g. painting a scenic view on a canvas belonging to another. The canvas will pertain to the painter. 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. 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. 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. If the things united can be separated without injury to each other, their respective owners may demand their separation. However, if the accessory happens to be much more precious than the principal (to which it was united for the use, embellishment or perfection), the owner of the former may demand its separation even though the principal may suffer injury. When the owner of the accessory who caused the incorporation acted in bad faith, he shall indemnify the owner of the principal for the damages which the latter has suffered. When the owner of the principal is the one who acted in bad faith, the owner of the accessory has the right to demand the following: 1) The payment of the value of the accessory thing with damages; or 2) The separation of the accessory thing from the principal, even though the principal would be destroyed plus damages. Ways of paying indemnity: 1) Delivery of a thing similar in kind and value and in all other respects of that thing used or incorporated by the other party 2) Payments of the price as separated by experts in case the parties cannot stipulate on the price. Sentimental value shall also be considered (Article 475). b.
Commixtion and Confusion 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. 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. Art. 472 This article refers to commixtion or confusion. If the things mixed are of the same kind and quality, there is no conflict of rights, and the mixture can easily be divided between two owners. It is only when they are of different kinds or quality that a co-­‐ownership arises. When the mixture is made by the will of the owners, it cannot be subjected absolutely to the provisions of this article. The parties may freely stipulate such terms and agreements as they may deem proper. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Classes of mixture: 1) Confusion – this results when liquids belonging to different owners got mixed by agreement or by chance. 2) Commixtion – this results when the solid matters are mixed by agreement or by chance. If the things mixed or confused (by chance) are not separable without injury, each owner shall have a right to the resulting thing proportionate to the value of the thing he owns. If the things are mixed or confused by an act of an owner of one thing in good faith, the rights of the owners shall be in proportion to the things they own. In effect, there is co-­‐
ownership. However, if the perpetrator of the mixture acted in bad faith, he shall suffer the following sanctions: 1) He shall lose the thing belonging to him which was mixed or confused with the other thing belonging to another who is not in bad faith. If both are in bad faith, they shall be regarded as both in good faith on the principle that if both parties are in bad faith, the bad faith of one neutralizes the bad faith of the other. 2) He shall be liable for damages to the owner of the thing mixed or confused. Cases: Siari Valley sought to recover 200 heads of cattle that were driven or wandered from its pasture lands into the adjoining lands of Lucasan. Lucasan himself admitted such commixtion although he says that Siari Valley had already retrieved its animals. Which cattle belongs to the owner can no longer be determined. Lucasan willfully caused the commixtion such that under Article 383 (now 473), he will be held to forfeit his own cattle. No atual evidence exists that the 823 missing cattles were taken by Lucasan, but in view of the proof that his men, on 2 occasions, drove away more than 30 heads, it may be presumed that the others must have also been driven away on subsequent prior occasions. (Siari Valley Estates vs. Lucasan) www Jose Bernabe owns a rice warehouse where Urbano Santos deposited 778 cavans and 38 kilos of palay, and Pablo Tiongson 1,026 cavans and 9 kilos. The sacks did not bear any marks or identifications to secure identification nor were they separated from one another. Tiongson filed an action to recover the palay he deposited but there were only 924 cavans and 31 ½ kilos of palay. Urbano Santos sought to recover his pala mixed with those which Tiongson had attached. Tiongson must pay Santos the value of 396.49 cavans of palayin proportion to the 924 cavans of palay which were attached and sold, the 778 cavans and 38 kilos of palay belonging to the plaintiff Santos, having been mixed with the 1,026 cavans and 9 kilos of palay belonging to the defendant Tiongson in Bernabe’s warehouse. And there being no means of separating the cavans and kilos of palay belonging to Santos and Tiongson, Article 381 CC states that, “If, by the will of their owners, two things of identical or dissimilar nature are mixed, or if the mixture occurs accidentally, it in the latter case the things cannot be separated without injury, each owner shall acquire a right in the mixture proportionate to the part belonging to him according to the value of the things mixed or commingled. (Santos vs. Bernabe) c.
Specification 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. Specification – giving of a new form to a material belonging to another person through the application of labor or industry. The material used is transformed into another thing or is changed in identity. Rules in specification: 1) When the maker is in good faith: a) The maker shall appropriate the new thing but he must indemnify the owner of the material for the value thereof. b) The maker cannot appropriate the new thing if the material transformed is worth more than the new thing. In which case, the owner of the material can appropriate they new thing subject to the payment of the value of the work, or he can demand indemnity for the material with damages. 2) When the maker is in bad faith: a) The owner of the material can appropriate the work without paying for the labor or industry exerted b) The same owner can demand indemnity for the material plus damages. However, the owner of the material cannot appropriate the work if the value thereof is considerably more than the value of the material due to the artistic or scientific importance of the work. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Part 4. Quieting of Title An action for quieting of title is a proceeding in equity, the purpose of which is the declaration of the invalidity of a claim on a title or the invalidity of an interest in property adverse to that of the plaintiff, and thereafter to free the plaintiff and all those claiming under him any hostile claim thereon. Property involved in quieting of title: real property Justifications for quieting of title: 1) To prevent future of further litigation on the ownership of the property 2) To protect the true title and possession 3) To protect the real interest of both parties 4) To determine and make known the precise state of the title for the guidance of all 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.
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 property. A “cloud” on a title may emerge by reason the following: 1) Any instrument – which could be a contract, or any deed of conveyance, mortgage, assignment, waiver, etc. covering the property concerned 2) Any record, claim, encumbrance – like an attachment, lien, inscription, adverse claim, lis pendens, on a title 3) Any proceeding – like an extrajudicial partition of property These should appear valid or effective, and extraneous evidence is needed to prove their validity or invalidity. These must be in truth and fact invalid, ineffective, voidable, or unenforceable and which may be prejudicial to the true owner or possessor. The alleged cloud must be prima facie substantial, and cast such a suspicion on the title or interest to which it is hostile as will injuriously affect the market value of the property, or seriously embarrass the owner either in disposing of the property or in maintaining his rights. As a general rule, a cloud which may be removed by suit to quiet title is not created by mere verbal or parole assertion of ownership or an interest in property. Article 476 contemplates 2 actions: 1)
2)
Remedial action – to remove the cloud on a title or to quiet a title Preventive or precautionary action – to prevent a future cloud on being cast upon the 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. Other instances that justify an action to quiet title: 1) When the contract, instrument or other obligation has already been extinguished or terminated. The title to property may be quieted with respect to any instrument which has become functus officio (no further legal effect) which can only be shown by extrinsic evidence. Title and liens which have lost their force or failed to become operative because the persons entitled thereto failed to enforce them have been cancelled as clouds. Title to property will be quieted against a conveyance or mortgage which has been executed for the purpose of 2) When the contract, instrument, or other obligations had already been barred by extinctive prescription. A. Differences between an action to quiet title and action: 1. To remove a cloud Basis Action to Quiet Title Purpose To put an end to vexatious litigations in respect to the property concerned. Nature Plaintiff asserts own claim and declares that the claim of the defendant is unfounded and calls on the defendant to justify his claim on the property that the same may be determined by the court. Filed against people who have claims; claims are more general in nature Action to Remove Cloud To procure the cancellation, release of an instrument, encumbrance or claim in the plaintiff’s title – which affects the title or enjoyment of the property. Plaintiff declares his own claim and title, and at the same time indicates the source and nature of the defendant’s claim, pointing its defects and prays for the declaration of its invalidity. Filed against defendant who asserts claims based on an invalid instrument (but not apparent) De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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2.
To prevent a cloud (action quia timet) The Court has not only the power to remove and existing cloud, but also the power to prevent the casting of a cloud on the title to property. Relief is granted if the threatened or anticipated cloud is one which, if it existed, be removed by a suit to quiet title. Thus, the Court will restrain a defendant from proceeding with an illegal act which if completed will necessarily cast a cloud upon the plaintiff’s title Requisites of an action to prevent a cloud: 1) Plaintiff has a title to a real property or interest therein 2) Defendant is bent on creating a cloud on the title or interest therein. The danger must not be merely speculative or imaginary but imminent. 3) Unless the defendant is restrained or stopped, the title or interest of the plaintiff will be prejudiced or adversely affected. Action to Quiet Action to Prevent Basis Title Cloud To put an end to To remove a vexatious possible litigations in Purpose foundation for a respect to the future hostile property claim concerned. Remedial action: Preventive action: Nature involves a present prevents a future adverse claim cloud on title B. Prescription of action 1)
2)
When the plaintiff is in possession of the property, the action to quiet title does not prescribe. The reason is that the owner of the property or right may wait until his possession is disturbed or his title is assailed before taking steps to vindicate his right. When the plaintiff is not in possession of the property, the action to quiet title may prescribe. The prescriptive period for the recovery of land is 10 years when the prescription is ordinary, or 30 years when the prescription is extraordinary. Cases: Land dispute between the Glors and the Olvigas over Lot 13 of the Guinayangan Public Land Subdivision. The ascendants of Glor have been in possession of subject property since 1950. A homestead application was filed in 1960 but was not acted upon due to unknown reasons. In 1967, Olviga acquired a registered title for the property through a cadastral proceeding. The Glor spouses at the time were not able to follow the proceeding because of sickness, lack of education and lack of notice of the hearings. They came to know of the title only in 1988. The Glors continued possession of the property up to the present. The lower court and CA ruled in favor of the Glors. An action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed of the date of the issuance of the certificate of title over the property (Vda. de Portugal v. IAC, 159 SCRA 178). But this rule applies only when the plaintiff is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. In the case at bar, private respondents and their predecessors-­‐in-­‐interest were in actual possession of the property since 1950. Their undisturbed possession gave them the continuing right to seek the aid of a court of equity to determine the nature of the adverse claim of petitioners, who in 1988 disturbed their possession. NOTE ON RECKONING POINT OF PERIOD: Despite their citation of Portugal, SC affirmed the CA’s finding that the reckoning point is from the date Glor knew about the title (1988), instead of the date of its registration (1967). No explanation was given by the SC on this point. (Olviga v. CA) www Dispute over a parcel of land in Bagong Barrio, Caloocan City between Pingol and Donasco’s heirs. In 1969, Pingol sold the property to Donasco. Payment was to be made by annual installments until January 1976. Donasco failed to complete the payment. He died in 1984, leaving a balance of P10, 161. Donasco’s heirs remained in possession of the property. They offered to pay the balance but Pingol refused to accept. Donasco’s heirs filed a civil case against Pingol in 1988 to compel him to accept payment. (Reckoning point: 1976) Although the private respondents' complaint before the trial court was denominated as one for specific performance, it is in effect an action to quiet title. The real and ultimate basis of petitioners' action is their ownership of [the property] with their possession thereof, which entitles them to a conveyance of the property (Bucton v. Gabar). Prescription thus cannot be invoked against the private respondents for it is aphoristic that an action to quiet title to property in one's possession is imprescriptible. The rationale for this rule has been aptly stated thus: “The owner of real property who is in possession thereof may wait until his possession is invaded or his title is attacked before taking steps to vindicate his right. A person claiming title to real property, but not in possession thereof, must act affirmatively and within the time provided by the statute. Possession is a continuing right as is the right to defend such possession. So it has been determined that an owner of real property in possession has a continuing right to invoke a court of equity to remove a cloud that is a continuing menace to his title. Such a menace is compared to a continuing nuisance or trespass which is treated as successive nuisances or trespasses, not barred by statute until continued without interruption for a length of time sufficient to affect a change of title as a matter of law." (Pingol v. CA) C.
Who are entitled to bring action? Article 477. The plaintiff must have legal or equitable title to, or interest in the real property which is the subject matter of De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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the action. He need not be in possession of said property. One who has an equitable title to property may maintain an action to quiet title thereon. Legal title covers a situation where the party is the registered owner of the property. Equitable title covers a situation where the person has the beneficial ownership of the property. E.g. (Pineda) If by agreement, Peter had registered in his name the property of John, Peter is the registered owner but John is the beneficial owner, Peter is a mere trustee, while John is the cestui que trust or beneficiary. Either Peter or John can file an action to quiet or remove cloud on title. D. Notes 1. There is a cloud on title to real property or any interest to real property 2.
Plaintiff has legal or equitable title to or interest in the subject/ real property 3.
Instrument record claim, etc. must be valid and binding on its face but in truth and in fact invalid, ineffective, void or unenforceable The face of the instrument must be considered closely. If from the four corners thereof, it appears that there is an invalid and ineffective contract, there is no cloud existing on the title. But, if there is a need to present evidence to establish its invalidity to defeat the claim, then a cloud on title exists. Test: Would the owner of the property in an action for ejectment brought by the adverse party be required to offer evidence to defeat a recovery? The action to quiet title does not apply: 1) To questions involving interpretation of documents 2) To mere written or oral assertions of claims a) Unless made in a legal proceeding b) Or asserting that an instrument or entry in plaintiff’s favor is not what it purports to be 3) To boundary disputes 4) To deeds by strangers to the title unless purporting to convey the property of the plaintiff 5) To instruments invalid on their face 6) Where the validity of the instrument involves a pure question of law 4.
Plaintiff must return benefits received from the defendant Article 479. The plaintiff must return to the defendant all benefits he may have received from the latter, or reimburse him for expenses that may have redounded to the plaintiff’s benefit. The provision is based on the maxim: “He who seeks equity must do equity.” Case: Dispute over a parcel of land in Barrio Titong, Masbate, Masbate between Titong and Laurio. Two surveys were made which covered the property: one for Titong, and one for a relocation done by the government. The two had discrepancies. Laurio filed a complaint against the first survey to the Bureau of Lands but the case was held in abeyance for the present case. Titong was able to acquire a tax declaration covering the subject property and filed the instant case of quieting of title. The lower court and CA held in favor of Laurio. The instant petition must be denied for the reason that the lower court should have outrightly dismissed the complaint for quieting of title. The complaint failed to allege that an "instrument, record, claim, encumbrance or proceeding" beclouded the plaintiff's title over the property involved. Titong merely alleged that the Laurios, together with their hired laborers and without legal justification, forcibly entered the southern portion of the land of the plaintiff and plowed the same. Through his allegations, what petitioner imagined as clouds cast on his title to the property were private respondents' alleged acts of physical intrusion into his purported property. Clearly, the acts alleged may be considered grounds for an action for forcible entry but definitely not one for quieting of title. Even if the complaint below were to be considered as a valid one for quieting of title, still, the instant petition for review on certiorari must fail. The courts below correctly held that when petitioner "sold, ceded, transferred and conveyed" the 5.5-­‐
hectare land in favor of Pablo Espinosa, his rights of ownership and possession pertaining thereto ceased and these were transferred to the latter. In the same manner, Espinosa's rights of ownership over the land ceased and were transferred to private respondent upon its sale to the latter. (Titong v. CA) 5.
Actions to quiet title are proceedings quasi in rem Nature of the action – they are suits against a particular person or persons in respect to the res and the judgment will apply only to the property in dispute. These suits are quasi in rem. Case: Dispute over a lot with an apartment in Marulas, Valenzuela City. The Alcantaras sold the property to the Portics and on the condition that they will assume the former’s obligation on mortgage with the SSS. The Portics defaulted in payment and sold the property to Cristobal, who to pay for the same by paying for the amount the PRotics owed to the SSS and an additional P35,000. The Alcantaras also executed a sale in favor of Cristobal for the amount of P50,000. A TCT was executed in favor of Cristobal by the Alcantaras. The Portics filed a case of quieting of Title, assailing the TCT held by De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Cristobal. RTC held in favor of Portic, but the CA reversed the decision. The action to quiet title are characterized as proceedings quasi in rem. Technically, they are neither in rem nor in personam. In an action quasi in rem, an individual is named as defendant. However, unlike suits in rem, a quasi in rem judgment is conclusive only between the parties. Generally, the registered owner of a property is the proper party to bring an action to quiet title. However, it has been held that this remedy may also be availed of by a person other than the registered owner because, in the Article reproduced above, “title” does not necessarily refer to the original or transfer certificate of title. Thus, lack of an actual certificate of title to a property does not necessarily bar an action to quiet title. As will be shown later, petitioners have not turned over and have thus retained their title to the property. The mere issuance of the Certificate of Title in favor of Cristobal did not vest ownership in her. Neither did it validate the alleged absolute purchase of the lot. Time and time again, this Court has stressed that registration does not vest, but merely serves as evidence of, title. Our land registration laws do not give the holders any better title than that which they actually have prior to registration. (Sps. Portic v. Cristobal) De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Part 5. Co-­‐ownership 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. A. Definition Right of common dominion which two or more persons have in a spiritual part of a thing, not materially or physically divided (Sanchez-­‐Roman) Manifestation of the private right of ownership, which instead of being exercised by the owner in an exclusive manner over the things subject to it, is exercised by two or more owners and the undivided thing or right to which it refers is one and the same (Manresa) B. Characteristics 1.
There is plurality of owners but only one real right or object of ownership: There is unity or material indivision of a single object. 2.
The recognition of ideal shares, defined but not physically identified This determines the rights and obligations of the co-­‐owners. 3.
Each co-­‐owner has absolute control over his ideal share No mutual representation by the co-­‐owners. 4.
Mutual respect among co-­‐owners in regard to use, enjoyment and preservation of the things as a whole The property is for common enjoyment. Relationship of co-­‐owner to the other co-­‐owners is fiduciary and attribute. The property or thing held pro-­‐indiviso is impressed with a fiducial nature: each co-­‐owner becomes a trustee for the benefit of his co-­‐owners and he may not do any act prejudicial to the interest of his co-­‐owners There is an express trust created: co-­‐ownership is a form of trust and every co-­‐owner is a trustee for the others Requisites/elements: 1) Plurality of owners 2) Only one real right of ownership – object of ownership must be a single thing or right which is undivided 3)
4)
5)
Recognition of ideal shares (aliquot portions) which is defined but not physically identified Each co-­‐owner’s right is limited only to his ideal share of the physical whole, not over specific portions of the property There is mutual respect among co-­‐owners in regards to the use, enjoyment and preservation of the property owned in common Case: Two sisters inherited lands from their mother. One sister (with husband) accused the other sister (with husband) and refusing to divide the properties, acting as sole administrator (with no judicial authority) over the same, and selfishly enjoying the rent (fruits) paid without sharing. They finally divided the properties. But the house is Escolta (Manila), which remained co-­‐owned by them became a problem. Complaining sister contends that she is entitled to reside in that house without paying the other sister rent. Note that certain areas of the house are for rent too (to 3rd persons). Until a judicial division is made, the respective part of each holder cannot be determined. The effects of this would be: Each co-­‐owner exercises together with the others joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same Each co-­‐owner may enjoy the whole property and use it Only limitation: a co-­‐owner cannot use or enjoy the property in a manner that shall injure the interest of his other co-­‐owners (Pardell v. Bartolome ) Subject of Co-­‐ownership: All things or property, including property rights: personal, real, tangible or intangible (see Lab notes for examples) C.
Differences between co-­‐ownership and joint tenancy Co-­‐Ownership Origin: Civil Law Other names: Tenancy in Common, ownership in common, Co-­‐dominium Ownership of share: undivided thing + own ideal part/share of each Disposition of share: each co-­‐owner may dispose of his undivided share without the consent of others De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Joint Tenancy Origin: Common Law Other names: Joint ownership, tenancy is common, “all for one, one for all” Ownership of share: no abstract share by the co-­‐
owners because the rights of the joint tenants are inseparable Disposition of share: a joint tenant may not dispose of his share/interest without the consent of others (rationale: he may prejudice 46
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Effect of Death: heirs of the deceased inherit his share in the property Effect of legal disability/incapacity: defense against prescription is exclusive to the co-­‐owner with disability/incapacity the others by alienating his share) Effect of death: ownership dies with him, and his surviving joint tenants are subrogated to his rights by virtue of jus accrescendi (survivorship) Effect of legal disability/incapacity: defense of one can be used by all, as disability/incapacity inures to the benefit of the others for purposes of prescription D. Differences between partnership and co-­‐
ownership Co-­‐ownership Creation: law, fortuitous event, occupancy, succession or contract (no formalities of a contract necessary) Creation: by contract Personality: Partnership has a distinct personality from the partners Purpose: collective enjoyment of the property Purpose: to obtain profit Mutual agency: no mutual representation (except if there is a special authority for such representation) Effect of legal disability/incapacity/death: does not dissolve co-­‐
ownership Profit distribution: must be proportional to the interest of each co-­‐owner (not subject to stipulation) Duration: general rule is that an agreement to keep the ownership for more than 10 years is void Attachment: creditors of a co-­‐owner can attach on the shares of others E.
Sources of co-­‐ownership 1.
Personality: co-­‐ownership has no legal personality Disposal of share: each co-­‐
owner may dispose of his undivided share without the consent of others Partnership Case: 15 people made contributions to buy a sweepstakes ticket, which was registered in the name of Gatchalian and Co. The ticket won 3rd prize, for which Gatchalian was required to file an income tax return (covering the prize). They failed to pay such tax so CIR issued a warrant of distraint and levy. The 15 people paid twice (in protest) to avoid embarrassment. These 15 people are now demanding refund of the two payments made in protest. There is partnership because each of them shelled out money to buy a sweepstakes ticket with the sole purpose of dividing equally the prize which they may win (and did win). In effect, they created a partnership of a civil nature. This mean that they are bound to pay the corresponding income tax. There is exemption from payment of income tax only when there was merely a community of property. On the other hand, a partnership is liable for said tax. (Gatchalian v. CIR) Disposal of share: a partner may not dispose of his share/interest or transfer the same to a 3rd person without the consent of others Mutual agency: generally, partner binds other partners (there is mutual representation) Effect of legal disability/incapacity/death: partnership is dissolved Profit distribution: depends upon the stipulation in their contract Duration: no term limit set by law Attachment: creditors of a partner cannot attach and sell on execution the shares of other partners in the partnership Law a. Cohabitation FC. Article 147. When a man and a 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, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-­‐ownership. In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former's efforts consisted in the care and maintenance of the family and of the household. Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation. When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-­‐ownership shall be forfeited in favor of their common children. In case of default of or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall take place upon termination of the cohabitation. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Article 148. In cases of cohabitation not falling under the preceding Article, only the properties acquired by both of the parties through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions. In the absence of proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidences of credit. If one of the parties is validly married to another, his or her share in the co-­‐ownership shall accrue to the absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad faith is not validly married to another, his or her shall be forfeited in the manner provided in the last paragraph of the preceding Article. The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith. Article 90. The provisions on co-­‐ownership shall apply to the absolute community of property between the spouses in all matters not provided for in this Chapter. Article 147: between a man and a woman capacitated to marry each other Article 148: between a man and a woman not capacitated to marry each other Article 90: if matter is not provided in the FC Chapter on ACP, then rules on co-­‐ownership will apply b. Purchase Article 1452. If two or more persons agree to purchase property and by common consent the legal title is taken in the name of one of them for the benefit of all, a trust is created by force of law in favor of the others in proportion to the interest of each. Article 1452: an implied trust is created in favor of all the others in the proportion to the interest of each when two or more persons purchase a property and by common consent the legal title is taken in the name of one of them for the benefit of all c. Succession Article 1078. 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. Article 1078: Intestate Succession (without will) Subject to the payment of debts of the deceased, if there are two or more heirs, the whole estate of the decedent is owned in common by the heirs before partition For as long as the estate is left undivided, the heirs will be considered co-­‐owners of the inheritance. If one of the heirs dies, his heirs will in turn be co-­‐
owners of the surviving original heirs. Note: if one of the co-­‐heirs (co-­‐owners) redeems the property, this will inure to the benefit of the other co-­‐heirs (co-­‐owners) even if they did not contribute to the redemption money Testate: by will, the estate is given to two or more persons/heirs d. Donation 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. Article 753: If donation is made to several persons jointly, it is understood to be in equal shares There will be no rights of accretion unless the donor provides for it Article 753 (par 2): if donation is made to a husband and wife jointly, there shall be a right of accretion unless the contrary is so provided by the donor e. Chance – Commixtion in Good Faith 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. Article 472: if by will of the owners or by chance a mixture occurs and in the latter case the things cannot be separated without causing injury, each owner shall acquire a right proportional to the part belonging to him Taken into consideration: the value of the things mixed or confused Case: Lucasan admitted commixtion of his cattle’s with those of Siari Valley (around 200) which were driven or known to have wandered into his pasture lands. Problem is that they could no longer determine which cattle belonged to whom. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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There was proof that Lucasan’s men, on two occasions, drove away 30 cattles from Siari Valley to his pasture lands so it may be presumed that the others were also driven away on subsequent occasions. (One who stole a part of the money must have taken also the larger sum lost by the offended party) Because Lucasan willfully cause the commixtion, he will be held to forfeit his own cattle in favor of Siary Valley. (Siari Valley Estates v. Lucasan) f. Hidden Treasure Article 438. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-­‐half thereof shall be allowed to the finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure. If the things found be of interest to science or the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. Article 438: co-­‐ownership between finder and owner When applicable: If finder (who is not the owner) found hidden treasure by chance and is not a trespasser g. 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. Article658: governed by the provisions on easements, local ordinances and customs (for as long as they don’t conflict with NCC) and by rules of co-­‐ownership h. Occupation – Harvesting and Fishing Case: 22 fishermen agreed that 1) they’d be owners of ambergris found in the belly of a whale and 2) none of them could sell without the consent of the others. One of them (Teck) loaded the ambergris to Zamboanga and managed to convince Ahmad (3rd person) to buy them, upon the promise of protection from the other co-­‐owners. Sale is not valid because the ambergris was undivided common property of the fishermen. Said common ownership was acquired by occupancy – there was an express agreement between the co-­‐owners that no one can sell it without the consent of all. For action on recovery on co-­‐ownership: can be exercised not just against 3rd persons but also a co-­‐owner who performs any act in relation to the thing held in common prejudicial or in violation of the right of the community. (Punzalan v. Boon Liat) i. Condominium Law RA 4726. The Condominium Act Sec. 6. Unless otherwise expressly provided in the enabling or master deed or the declaration of restrictions, the incidents of a condominium grant are as follows: (c) Unless otherwise, provided, the common areas are held in common by the holders of units, in equal shares, one for each unit. RA 4726: common areas are held in common by the holders of units in equal shares, one for each unit Exception: if otherwise provided Case: Twin Towers wanted Litonjua (ALS Corp president), the occupant of the condo unit owned by ALS corporation to pay his unpaid condo quarterly assessments and dues as authorized by its Master Deed and Declaration of Restrictions. The Condominium Act provides that the Master Deed may authorize the condominium corporation to collect “reasonable assessments to meet authorized expenditures.” For this purpose, each unit owner “may be assessed separately for its share of such expenditures in proportion (unless otherwise provided) to its owner’s fractional interest in the common areas.Twin Towers is expressly authorized by its Master Deed to impose reasonable assessments on its members to maintain the common areas and facilities of the Condominium, and it has the right to collect assessments and dues from its members and the corollary obligation of its members to pay are beyond dispute. Note: Petitioner’s Master Deed provides that a member of the Condominium corporation shall share in the common expenses of the condominium project. This obligation does not depend on the use or non-­‐use by the member of the common areas and facilities of the Condominium. Whether or not a member uses the common areas or facilities, these areas and facilities will have to be maintained. Expenditures must be made to maintain the common areas and facilities whether a member uses them frequently, infrequently or never at all. (Twin Towers v. CA) 2.
Contracts a. By Agreement of Two or More Persons 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. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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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.
Article 494: two or more persons may agree to create a co-­‐
ownership Note: there is a 10-­‐year term limit for ownership by agreement Term may be extended by a new agreement b. By Universal Partnership Article 1778. A partnership of all present property is that in which the partners contribute all the property which actually belongs to them to a common fund, with the intention of dividing the same among themselves, as well as all the profits which they may acquire therewith. Article 1779. In a universal partnership of all present property, the property which belonged to each of the partners at the time of the constitution of the partnership, becomes the common property of all the partners, as well as all the profits which they may acquire therewith. A stipulation for the common enjoyment of any other profits may also be made; but the property which the partners may acquire subsequently by inheritance, legacy, or donation cannot be included in such stipulation, except the fruits thereof. Article 1780. A universal partnership of profits comprises all that the partners may acquire by their industry or work during the existence of the partnership. Movable or immovable property which each of the partners may possess at the time of the celebration of the contract shall continue to pertain exclusively to each, only the usufruct passing to the partnership. Of all present properties: Article 1778 and Article 1779 The partners contribute all the property which belongs to them to a common fund wit the intent of dividing the same among them (including the profit which they may derive from it) The property which belongs to each of the partners at the time of the constitution of the partnership becomes the common property of all the partners (with the profits) A stipulation for the common enjoyment of any other profits may also be made. Property of partners acquired after the creation of the partnership by virtue of an inheritance, legacy or donation cannot be included in such stipulation except the fruits of the same Of profit: Article 1780 Akin to CPG: comprises all that the partners may acquire by their industry or work during the existence of the partnership c. By Associations and Societies with Secret Articles Article 1775. Associations and societies, whose articles are kept secret among the members, and wherein any one of the members may contract in his own name with third persons, shall have no juridical personality, and shall be governed by the provisions relating to co-­‐ownership. Article 1775: associations and societies whose the articles are kept secret wherein anyone of the members may contract in his own name with 3rd persons No juridical personality Legal effects of Co-­‐ownership: 1) Bundle of Rights A co-­‐ownership creates rights in favor of each one of the co-­‐
owners with respect to the property owned in common. All the bundle of rights in ownership are found in co-­‐ownership also, with each co-­‐owner having all such rights in conjunction with the others. Bundle of Rights: 1) Jus Utendi – right to use and enjoy the property (including accessions) 2) Jus Fruendi – right to the fruits of the property 3) Jus Abutendi – right to consume the property 4) Jus disponendi – right to dispose of the property (totally, partially, permanently, temporary) 5) Jus vindicandi – right to recover the property 6) Jus possidendi – right to possess the property by virtue of ownership (implied from the first 5 rights) Note: the exercise of these rights is limited by the concomitant rights of each of the co-­‐owners. 2)
Views of Rights Right over the thing owned in common: limited by the concomitant rights of the other co-­‐owners De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Right over his ideal share or undivided interest over the same property: not limited by the concomitant rights of the co-­‐
owners Since the co-­‐owner is the absolute owner of his share, he can deal with it like any full owner of an incorporeal property F.
Rights of each co-­‐owner over the thing or property owned in common 1.
To use the thing according to the purpose intended (Jus Utendi) (Article 486) 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. Limitations on co-­‐owner’s right: Use must be to the purpose for which it is intended Use must be without prejudice to the interest of the co-­‐
ownership Use must not prevent the other co-­‐owners from making use of the property according to their own rights Purpose of the thing may be altered by agreement, express or implied, provided It does not cause injury or prejudice to the interest of co-­‐
ownership, Any act against the collective interest is an act against ownership A co-­‐owner cannot devote the community property to his exclusive use to the prejudice of the co-­‐ownership And, It does not prevent the use by other co-­‐owners Co-­‐owners may establish rules regarding the use of the property held in common There must be a just and equitable distribution of uses among all co-­‐owners Case: The sister who lived in the house cannot be compelled to pay rents beause she was merely exercising a right pertaining to her as a co-­‐owner. But with respect to the portion of the house occupied by her husband as his office, the husband should pay his sister-­‐in-­‐law ½ of the rents such portion should have received if rented by others. He cannot use such portion gratuitously because that would prejudice the other co-­‐owner who is entitled to receive the rents that it should produce had it been leased to others. (Pardell v. Bartolome , supra) 2.
To share in the benefits in proportion to his interest provided the charges are borne by each in the same proportion (Article 485) Article 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. Effect of Accretion: accretion added to any portion of land owned in common becomes part of the property in co-­‐
ownership Such addition must be divided according to each co-­‐owner’s proportionate share Cases: Tining Resuena and others resided in the upper portion of a lot allegedly under the acquiescence of a co-­‐owner who owned 2/8 of the property. The owner of 6/8 of the property eventually turned the area into a resort, and he wanted the petitioners to leave so he could expand. So he filed for an action for ejectment. Article 487 of the Civil Code, which provides simply that “[a]ny one of the co-­‐owners may bring an action in ejectment,” is a categorical and an unqualified authority in favor of owner to evict the petitioners from the portions of lot. The rule is a co-­‐
owner may bring an action to exercise and protect the rights of all. When the action is brought by one co-­‐owner for the benefit of all, a favorable decision will benefit them; but an adverse decision cannot prejudice their rights. Note: the rule is that persons who occupy the land of another at the latter's tolerance or permission, without any contract between them, are 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. (Resuena v. CA) www Villaner’s parents owned a parcel of land. By a Deed of Absolute Sale his parents sold the land tohim, who was then married to Justiniana Lipajan. Villaner’s wife died, then he conveyed the same property to Leonardo Acabal. The document was a deed of sale but Villaner contends that it was a mere lease agreement. Villaner’s co-­‐heirs’ claim that as co-­‐owners of the property, the Deed of Absolute Sale executed by Villaner in favor of Leonardo does not bind them as they did not consent to such an undertaking. There is no question that the property is conjugal. The presumption applies to all properties acquired during marriage. For the presumption to be invoked, therefore, the property must be shown to have been acquired during the marriage. In the case at bar, the property was acquired on July 6, 1971 during Villaner’s marriage with Justiniana Lipajan. It cannot be seriously contended that simply because the tax declarations covering the property was solely in the name of Villaner it is his personal and exclusive property. What is material is the time when the land was acquired by Villaner, and that was during the lawful existence of his marriage to Justiniana. Since De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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the property was acquired during the existence of the marriage of Villaner and Justiniana, the presumption is that it is the couple’s conjugal property. Upon the death of Justiniana Lipajan, the CPG was terminated and Villaner’s interest in the conjugal partnership became actual and vested with respect to an undivided one-­‐half portion.]Justiniana's rights to the other half, in turn, vested upon her death to her heirs, including Villaner who is entitled to the same share as that of each of their eight legitimate children. As a result then of the death of Justiniana, a regime of co-­‐ownership arose between Villaner and his co-­‐heirs in relation to the property. While Villaner owns five-­‐ninths (5/9) of the disputed property, he could not claim title to any definite portion of the community property until its actual partition by agreement or judicial decree. Prior to partition, all that he has is an ideal or abstract quota or proportionate share in the property. Villaner, however, as a co-­‐owner of the property has the right to sell his undivided share. Every co-­‐owner has absolute ownership of his undivided interest in the co-­‐owned property and is free to alienate, assign or mortgage his interest except as to purely personal rights. While a co-­‐owner has the right to freely sell and dispose of his undivided interest, nevertheless, as a co-­‐owner, he cannot alienate the shares of his other co-­‐owners – nemo dat qui non habet. Villaner, however, sold the entire property without obtaining the consent of the other co-­‐owners. Following 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 – the disposition affects only Villaner’s share pro indiviso, and the transferee gets only what corresponds to his grantor’s share in the partition of the property owned in common. (Acabal v. Acabal) 3. Anyone of the co-­‐owner may bring an action in ejectment (Article 487) Article 487. Any one of the co-­‐owners may bring an action in ejectment. Action in Ejectment: covers all kinds of actions for the recovery of possessions (i.e. forcible entry, unlawful detainer, accion publiciana, accion reivindicatory) Action of a co-­‐owner need not include all the co-­‐owners are co-­‐plaintiffs because the suit is deemed to be instituted for the benefit of all Action will not prosper if the action is brought for the benefit of the plaintiff alone and not for the co-­‐ownership 4. To compel the other co-­‐owners to contribute to expense for preservation of the property owned in common and to the payment of taxes (Article 488) 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. What are included: only necessary expense and taxes Not included: those not for preservation and only produces benefits for an owner + those which are for mere luxury, embellishment or pleasure Expenses for preservation: those which, if not made, would endanger the existence of the thing or reduce its value or productivity Do not imply an improvement or increase Expenses advanced for preservation by one co-­‐owner should be borne by all and the others are bound to contribute to their respective shares Useful expenses not covered: even if useful expenses increase the income of the thing owned in common for the benefit of all co-­‐owners, one of them cannot incur such expenses without the consent of others, and then charge the latter for their shares The community is not for profit but for preservation of the sources of income only – new sources of income then cannot be created at the expense of the co-­‐owners without their consent Renunciation: other co-­‐owners have the option not to contribute by renouncing so much of his undivided interest as may be equivalent to his share of the necessary expenses and taxes Must be express, never tacit renunciation: failure to pay is not a renunciation Basis for computation: value of interest in the property at the time of the renunciation Requirement of Consent: waiver requires the consent of other co-­‐owners because it is a case of dacion en pago (cessation of rights) involving expenses and taxes already paid (J.B.L. Reyes) Prejudicial waiver: no waiver shall be made if prejudicial to co-­‐
ownership Remedy against defaulting Co-­‐Owner: action to compel him to contribute such share He cannot be compelled to renounce any portion of his share because renunciation must be a voluntary and free act 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. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Rule before repairs for preservation may be made at the will of one-­‐co-­‐owner (Article 489) As far as practicable: notification first Rule: a co-­‐owner can advance expenses for preservation of the property even without prior consent of others. He is entitled to be reimbursed for the amount he spent for necessary expenses. Requisites before expenses for embellishment or improvement may be made: 1) Notify co-­‐owners of necessity 2) Decision by majority (Sir Labitag: Majority pertains to financial majority or controlling interest in the co-­‐
ownership) Effects of failure to notify-­‐co-­‐owners: 1) Does not deprive co-­‐owner who advanced the expense the right to be reimbursed the proportionate share of the others in the expenses 2) Co-­‐owner who shelled out the money has the burden of proving the necessity of such repairs and the reasonableness of the expense 3) He will not be fully reimbursed if: the others can prove that he had notified them, they could have hired the services of another who would charge less than the people with whom the one who advanced contracted or that they know of a store that sells the needed material at a cheaper price (difference shall be borne by him alone) 5. To oppose any act of Alteration (Article 491) 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. What is an alteration: change made by a co-­‐owner in the thing owned in common, which involves 1) Change of the thing from the state or essence in which the others believe it should remain, or 2) Withdrawal of the thing from the use to which they wish to be intended, or 3) Any other transformation which prejudices the condition or substance of the thing or its enjoyment by the others Main requirement for any act of alteration: unanimous consent of all co-­‐owners Except: withholding of consent by any one of the co-­‐
owners is clearly prejudicial to the common interest Remedy: court decides (Article 491) Form of consent: express or tacit Alteration v. Administration Alteration Administration More permanent result and Refers to the enjoyment of relate to the substance or the thing and is of transitory form of the thing character Nature: if the thing does not When the thing in its nature require any modification for requires changes, its enjoyment, any modifications can be modification that is made considered as acts of simple will be considered an administration alteration Consent: Unanimous Consent: mere majority is consent of all sufficient Alteration without consent of all is illegal The one who did the alteration will lose whatever he spent in case he is made to demolish the work he has done (no right to reimbursement) Damages to the non-­‐consenting co-­‐owner can also be granted by the court Note: this is subject to ratification – if co-­‐owners decide to contribute to the expenses by reimbursing the co-­‐owner who made the alteration (effect: benefit of alteration will inure to the co-­‐ownership) 6. To protest against acts of majority which are seriously prejudicial to the minority (Article 492, par. 3) Article 492(3). 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. Administration must be done by co-­‐owners themselves. The court cannot appoint an administrator to manage a property when the co-­‐owners want to handle it themselves Rule: majority may only proceed to act without notice to the minority if the circumstances warrant urgency Who can be the administrator? It may or may not be a co-­‐owner, provided it was delegated by the co-­‐owners What can an administrator do? PROVIDED there is a unanimous consent of all co-­‐owners, an administrator may compromise on, donate, cede, alienate, mortgage, or encumber the common property What are acts seriously prejudicial? 1) Those that seriously affect the interest of the co-­‐owners in the community 2) Those that will cause injuries enough to justify the intervention of the court De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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3)
4)
5)
Not mere slight causes! Those that go beyond the limits of mere administration or invades the propriety rights of the co-­‐owners Those which expose the thing to serious danger to the prejudice of the co-­‐owners Remedy of minority: injunction or worse, partition Note: court may order proper measures including appointment of administrator if necessary Acts of Administration have the following characteristics: 1) They do not involve alteration 2) Renewable from time to time 3) They do not bind the co-­‐ownership for a long time in the future 4) They do not give rise to a real right over the things owned in common Cases: 6 pious women bought an image of Our Lady of Guadalupe. One of them had the initial custody, which was passed on to another and finally to another one of them pious women. When the current holder wanted to make the Bishop of Lipa custodian, everyone else objected. Simple majority rule is applied when the parties are choosing who must have custody. If the amount of individual contribution is undetermined, the law presumes that they all contributed proportionately. Given than in this case it was a 4/6 versus 2/6, the majority has a right to determine who should be entrusted the with the custody of the image. (Lavadia v. Cosme) www A widow and 3 of her children executed a contract of lease in favor of Dy for 20 years, extendible for another 20 at the option of the lessee. Two of the co-­‐heris did not agree to this arrangement (they didn’t sign). The contract stipulated that at the end of the 1st 20 years, the lessors may purchase all the buildings on the land at a price to be determined by experts appointed by the parties. Failure to take advantage of this privilege means that the lease would automatically continue for another 20 years. The heirs made an extrajudicial partition of the land, and this leased land is part of what was partitioned. They want to recover from Dy the possession of the land, saying they did not consent to the lease plus they were unaware of the contract. A contract of lease (during this time, 1920) at this time ceases to be an act of administration if the duration is for more than 6 years. If it exceeds 6 years, the contract must be recorded in the registry of property. Part owners representing the greater portion of a property held in common have no power to lease a property longer than 6 years without the consent of all co-­‐
owners whose propriety rights would be restricted or annulled by contracts of long duration. (OLD civil code: if more than 6 years, lease is an act of strict ownership so all co-­‐owners must consent) Note: NCC requires that a special power of attorney is required for leases of real property by an administrator when 1) the contract is to be recorded in the registry of property and 2) when the lease is for more than 1 year (Melencio v. Dy) www 3 Tuasons co-­‐owned a piece of land, and they entered into an agreement re: no one shall sell, alienate or dispose of his ownership without giving preference to the other co-­‐owners first. Later on, one of the Tuasons wanted the property partitioned and the agreement annulled. The obligation imposed by their agreement has for its purpose and object the dissolution of the co-­‐ownership and the community by selling the parcel held in common and dividing the proceeds of the sale among the co-­‐owners. The agreement is not void for it upholds the concept which the law upholds forbidding a co-­‐owner from being obliged to remain a party to the community. (Tuason v. Tuason) 7. To exercise legal redemption (Article 1620, 1623) Article 1620. A co-­‐owner of a thing may exercise the right of redemption in case the shares of all the other co-­‐owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one. Should two or more co-­‐owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common. Article 1623. The right of legal pre-­‐emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners. The right of redemption of co-­‐owners excludes that of adjoining owners. What is redemption? Act of reclaiming possession of something by payment of a specific price Rules: Period: 30 days from the date of written notification of sale by co-­‐owner vendor Without such written notice, the 30-­‐day period does not start to run Exceptions: Estoppel by laches (inaction) If there is oral notification and several years have passed (implied waiver) and there is De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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reliance on the non-­‐action of co-­‐
owners Estoppel by silence When there is duty to speak Written notification must come from the prospective vendor Vendor is in a better position to know things involving the property and the sale The prospective vendee may not see eye-­‐to-­‐eye with the co-­‐owners since they may have a different way of enjoying things/the property Cases: Dad die, left a lot to his wife and 2 daughters. One of the daughters redeemed the lot after it was foreclosed. She also sold the entire property after. When the other sister learned of it, she filed a complaint for recovery. Redemption of the property by a co-­‐owner does not vest him sole ownership over said property. Redemption will inure to the benefit of all co-­‐owners. Redemption is not a mode of termination of relationship. The only time there could have been a consolidation of ownership is when none of the heirs were able to redeem it within the 1-­‐year period, the bank consolidated the ownership of the property, and one of the heirs bought the land from the bank, in which case the one who bought shall have sole ownership of the property. (Mariano v. CA) www A widow remarried and then died intestate. One of her children (David) in her 2nd marriage died intestate too. One of her children from the first marriage sold to Verdad their interest in a lot left by widow. The wife of David found out that there was a sale and sought to redeem the property 5 years later. Wife has a right over the property left by widow because she is a forced heir of David (hence an undivided interest was passed on to her), who had interest over his mum’s intestate estate. The right of redemption was also timely since at the time she filed the case, there was no written notice of the sale given to her. The 30-­‐day period was yet to commence. A written notice of sale is mandatory in order to remove all uncertainties about the sale, its terms and conditions and its efficacy and status. (Verdad v. CA) 8. To ask for partition (Article 494) 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. For as long as the co-­‐ownership exists, anyone of the co-­‐
owners can ask for partition, or as to any co-­‐owner, the action for partition is imprescriptible. Effect of partition: termination of the co-­‐ownership What is it? Division between the persons of real/personal property which they own in common so that each may enjoy and possess his sole estate to the exclusion of and without interference from the others Right to ask for partition at anytime except: 1) There is a stipulation against it (not over ten years) 2) When condition of indivision is imposed by transferor/donor/testator (not to exceed 20 years) 3) The legal nature of community prevents partition (i.e. party wall) 4) When partition is generally prohibited by law (i.e. ACP, party wall) 5) When the partition would render the thing unserviceable or the thing held in common is essentially indivisible if the thing cannot be physically partitioned, they may sell the thing and the co-­‐owners may divide the proceeds) 6) When acquisitive prescription has set in in favor of a stranger to con-­‐ownership or in favor of a co-­‐owner Cases: Ramirez brought an action for partition. Some of the co-­‐
owners objected because they figured it would be detrimental to them. If there is an allegation that a physical division of the property will cause inestimatable damage to the interest of the co-­‐
owners, evidence must be produced to support it. (Ramirez v. Ramirez) www Two brothers bought a house in Paranaque. Though 1 of them (V) shelled out 2/3 and the other (S) only 1/3 of the amount, they agreed by a memo to equal ownership later on. The deed of sale and title was in S’s name. After the dad died, V demanded that S vacate the place, that the house be sold and that he be given 2/3 of the proceeds. S wanted equal division of the proceeds being a co-­‐owner. Either one may demand that the house be sold and at any time and the other may not object. Thereafter the proceeds must be divided equally according to their respective interests. (Aguilar v. CA) www (Note: Viuda’s name here is Maria Ondoy) Ape owned a piece of land which passed on to his wife and 11 kids upon his death. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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One of the kids allegedly sold his share, and now the buyers are asking for specific performance (deed of sale). Kid denied this, and the co-­‐owners are trying to redeem the share. The right of legal pre-­‐emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners. The reasons for requiring that the notice should be given by the seller, and not by the buyer, are easily divined. The seller of an undivided interest is in the best position to know who are his co-­‐owners that under the law must be notified of the sale. Also, the notice by the seller removes all doubts as to fact of the sale, its perfection; and its validity, the notice being a reaffirmation thereof, so that the party notified need not entertain doubt that the seller may still contest the alienation. This assurance would not exist if the notice should be given by the buyer. Note: In this case, the records are bereft of any indication that Fortunato (the kid who allegedly sold his share) was given any written notice of prospective or consummated sale. The thirty (30)-­‐day redemption period under the law, therefore, has not commenced to run. Despite this, however, the SC ruled that co-­‐owners could no longer invoke their right to redeem for the exercise of this right “presupposes the existence of a co-­‐ownership at the time the conveyance is made by a co-­‐owner and when it is demanded by the other co-­‐owner or co-­‐owners.” The regime of co-­‐ownership exists when ownership of an undivided thing or right belongs to different persons. By the nature of a 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. As legal redemption is intended to minimize co-­‐ownership, once the property is subdivided and distributed among the co-­‐owners, the community ceases to exist and there is no more reason to sustain any right of legal redemption. (Vda. De Ape v. CA) 9. Other cases where right of legal redemption is given (Article 1621, 1622) Article 1621. The owners of adjoining lands shall also have the right of redemption when a piece of rural land, the area of which does not exceed one hectare, is alienated, unless the grantee does not own any rural land. This right is not applicable to adjacent lands which are separated by brooks, drains, ravines, roads and other apparent servitudes for the benefit of other estates. If two or more adjoining owners desire to exercise the right of redemption at the same time, the owner of the adjoining land of smaller area shall be preferred; and should both lands have the same area, the one who first requested the redemption. (1523a) Article 1622. Whenever a piece of urban land which is so small and so situated that a major portion thereof cannot be used for any practical purpose within a reasonable time, having been bought merely for speculation, is about to be re-­‐sold, the owner of any adjoining land has a right of pre-­‐emption at a reasonable price. If the re-­‐sale has been perfected, the owner of the adjoining land shall have a right of redemption, also at a reasonable price. When two or more owners of adjoining lands wish to exercise the right of pre-­‐emption or redemption, the owner whose intended use of the land in question appears best justified shall be preferred. Cases: American guy died and left some properties to his widow and son. The widow assigned all her rights to her son. The son sold them to a Filipino citizen. Halili, isang pakielamerong kapitbahay, questioned the transfers of property and claimed ownership on right of legal redemption. Halili cannot redeem since Article 1621 only applies to rural lands. The subject land in this case was clearly urban. Art 1621, the land sought to be redeemed and the adjacent land belonging to the person exercising the right of redemption must be rural. If one or both is urban, right cannot be invoked. (Halili v. CA) www Francisco and her 3 sisters co-­‐owned a land on which a commercial building stood on. They sold 1/5 of their undivided interest over the land to their mother, so mum became a co-­‐
owner. Without their knowledge, mum sold her share to Boiser. Boiser then sent a summons and a complaint claiming her share on the rentals collected by Francisco and her sisters. In turn, Francisco informed Bosier that she was exercising her right of redemption as co-­‐owner. Bosier contended that the 30-­‐day period has lapsed because she informed Francisco of the claim on a May, Francisco only tried to redeem on an August. For there to be sufficient compliance with the notice requirement, the written notice must come from the vendor or the prospective vendor, not from any other person. It is the notification from the seller which can remove all doubts as to the fact of the sale, its perfection and its validity. Hence, Francisco’s mother should have been the one to notify her, not Bosier. (Francisco vs. Boiser) G. Implications of co-­‐owners right over his ideal share 1.
Rights of a Co-­‐owner: a.
To share in fruits and benefits De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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b.
c.
d.
To alienate, mortgage, or encumber and dispose his ideal share (but other co-­‐owners may exercise right of legal redemption within 30 days from notification of prospective co-­‐
owner vendor) To substitute another person in the enjoyment of thing To renounce part of his interest to reimburse necessary expenses incurred by another co-­‐
owner (Article 488) 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. 2.
Effect of Transaction by each owner a.
b.
c.
Limited to his share in the partition Transferee does not acquire any specific portion of the whole property until partition Creditors of co-­‐owners may intervene in the partition to attack the same if it is prejudicial (Article 499) 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. Except: creditors cannot ask for rescission even if not notified in the absence of fraud (Article 497) 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. Cases: Sps. Espique had 5 heirs. Carvajal was occupying 2/5 of one of Espique’s lots – he purchased such parts from 2 of the 5 heirs. One of the lots Carvajal purchased is being claimed by someone else who apparently bought the same from one of the 5 kids. Sps. Espique wanted their land back. Unless partition is effected, each heir cannot claim sole ownership over a definite portion of the land and cannot dispose of the same. Heirs become the undivided owner of the whole estate – each co-­‐owner shall have full ownership if his part even as to fruits and benefits. He may alienate, assign or mortgage his share. The effect of such act shall be limited to the portion allotted to him during partition. Until said partition though, he cannot alienate a specific part of the estate. A co-­‐
owner cannot adjudicate to himself a definite portion owned in common until partition by agreement or by a judicial decree. Until then, they can only sell their successional rights. (Carvajal v. CA) www Flaviano the widower sold a portion of their conjugal lot to Pamplona before the liquidation of the CPG and without the consent of his co-­‐heirs. The Pamplonas then built a house and piggery over the area to which Flaviano pointed during the sale. When Flaviano died, the other heirs demanded that Pamplonas vacate the area. Flavaiano has a right to sell the lot. As forced heir of his wife, he was entitled to a/2 of the entire CPG, with only the other half belonging to other heirs. They did hold the property as co-­‐
owners. But since the area he sold was within the limits of his share, he had the right to sell the same. There was partial partition of the property when he sold the lot to the Pamplonas. (Pamplona v. Moreto) www Brothers Castro leased to Atienza a fish pond co-­‐owned by them. One of the brothers and Atienza agreed to annul the lease contract that same year. However, the widow of the other brother did not want to sign the annulment document. The signature of the widow was not essential to the validity of the agreement cancelling the lease contract between the brothers and Atienza. However, the effect of said agreement will be limited to the portion which may be allotted to the agreeing brother in the division upon the termination of the co-­‐ownership. A co-­‐owner may enter into a contract of lease insofar as to his interest. He can also cancel the same without the consent of the other co-­‐owner. (Castro v. Atienza) www Parents died, left a parcel of land to 3 children. One of them sold her rights to Estoque. The next day, the other 2 children executed a deed of extrajudicial settlement wherein they assigned all their rights to the selling kid. This area now (2/3 of the lot) was sold by the assignee and her children to Pajimula. What Estoque bought was a distinct portion and separate from what Pajimula bought. She never acquired an undivided interest over the lot and she never became a co-­‐owner. What was sold to her was a distinct share owned by the original selling kid. It became distinct as soon as the extrajudicial settlement was made. (Estoque v. Pajimula) www 13 co-­‐owners owned a lot. They all signed a deed of sale in favor of Diversified credit. The husband of one of the 13 though built a house of the property even before the property was partitioned. Diversified credit wanted them out, but they contended that the house was conjugal property, hence insofar as 1/13 of the sold lot was concerned, it was void. (Wife had no right daw to alienate that share because it’s part of the CPG) No individual co-­‐owner can claim title to any definite portion of the land or thing owned in common until the partition De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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thereof. It cannot be validly claimed that the house constructed was on a land belonging to selling wife. All that the co-­‐owner has is an ideal, abstract or proportionate share in the entire thing owned in common by all the co-­‐owners. As such, Diversify can shoo them away. (Diversified Credit v. Rosario) www Widow mortgaged the entire CPG to PNB. This was not annotated on the title. Eventually, the property was sold at public auction for another obligation, and the Malacas sps acquired the rights to these shares. They registered their title. When the loan on PNB was not paid, the court issued a new title over the property in favor of PNB. But this was annulled by the CA. After the death of her husband, widow became a co-­‐owner of the property with her children. She was only entitled to ½, hence she had no right to mortgage the whole property. Assuming the mortgage to PNB was valid, it would only be for ½ of the estate. Such mortgage by a co-­‐owner is limited only to the portion which may be alloted to him in the division upon the termination of the co-­‐ownership. (PNB v. CA) H. Rules on co-­‐ownership not applicable to CPG or ACP These two regimes are governed by the provisions on the Family Code Even void marriages and cohabitation of incapacitated persons are governed by Article 50, 147, and 148 of the Family Code I.
Special Rules on Ownership of Different Stories of a House as Differentiated from Provisions of the Condominium Act RA 4726. The Condominium Act Sec. 1. The short title of this Act shall be "The Condominium Act". Sec. 2. A Condominium is an interest in real property consisting of a separate interests in a unit in a residential, industrial or commercial building or in an industrial estate and an undivided interests in common, directly and indirectly, in the land, or the appurtenant interest of their respective units in the common areas. The real right in condominium may be ownership or any interest in real property recognized by law on property in the Civil Code and other pertinent laws. Sec. 3. As used in this Act, unless the context otherwise requires: a) "Condominium" means a condominium as defined in the next preceding section. b) "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 parts of floors) in a building or buildings and such accessories as may be appended thereto: Provided, that in the case of an industrial estate wherein the condominium project consists of several buildings, plants and factories may, by themselves, be considered separately as individual units as herein defined. c) "Project" means the entire parcel of real property divided or to be divided in condominiums, including all structures thereon. d) "Industrial Estate or Estate" means a certain tract of land which is subdivided and developed primarily for industrial purposes and which usually includes provisions for basic infrastructure facilities and common services such as roads, water, electricity, drainage and waste disposal system. e) "Common areas" means the entire project except all units separately granted or held or reserved. f) "To divide" real property means to divide the ownership thereof or other interests therein by conveying one or more condominium therein but less than the whole thereof. Sec. 4. The provisions of this Act shall apply to property divided or to be divided into condominium only if there shall be recorded in the Register of Deeds of the province or city in which the property lies, and duly annotated in the corresponding certificate of title of the land, if the latter had been patented or registered under either the Land Registration or Cadastral Acts, an enabling or master deed which shall contain, among others, the following: a) Description of the land on which the building or buildings and improvements are to be located; b) Description of the building or buildings, stating the number of storeys and basement, the number of units and their accessories, if any; c) Description of the common areas and facilities; d) A statement of the exact nature of the interest acquired or to be acquired by the purchased in the separate units and the common areas of the condominium projects. Where title to or to appurtenant interests in the common areas is to be held by a condominium corporation, a statement to this effect shall be included; e) A certificate of the registered owner of the property, if he is other than those executing the master deed, as well as of all registered holders of any lien or encumbrances on the property, that they consent to the registration of the deed; f) The following plans shall be appended to the deed as integral parts thereof: 1. A survey plan of the land included in the project, unless a survey plan of the same property had previously been filed in De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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said office. 2. A diagrammatic floor plan of the building or buildings each unit, its relative location and approximate dimensions. g) Any reasonable restriction not contrary to law, morals, or public policy regarding the right of any condominium owner to alienate or dispose off his condominium. h) The enabling or master deed may be amended or revoked upon registration of an instrument executed by a simple majority of the registered owners of the property: Provided, That in a condominium project exclusively for either residential or commercial use, simple majority shall be on a per unit of ownership basis and that in the case of mixed use, simple majority shall be on a floor area of ownership basis: Provided, further, That prior notifications to all registered owners shall be submitted to the Housing and Land Use Regulatory Board and the city/municipal engineer for approval before it can be registered. Until registration of a revocation, the provisions of this Act shall continue to apply to such property. Sec. 5. Any transfer or conveyance of a unit or an apartment, office or store or other space therein, shall include the transfer or conveyance of the undivided interest in the common areas or in a proper case, the membership or share holdings in the condominium corporation: Provided, however, That where the common areas in the condominium project are held by the owners of separate units as co-­‐owners hereof, no condominium unit therein shall be conveyed or transferred to persons other than Filipino citizens or corporation at least 60% of the capital stock of which belong to Filipino citizens, except in cases of hereditary succession. Where the common areas in a condominium project are held by a corporation, no transfer or conveyance of a unit shall be valid if the concomitant transfer of the appurtenant membership or stockholding in the corporation will cause the alien interest in such corporation to exceed the limits imposed by existing laws. Sec. 6. Unless otherwise expressly provided in the enabling or master deed or the declaration of restrictions, the incidents of a condominium grant are as follows: a) the boundary of the unit granted are the interior surfaces of the perimeter walls, floors, ceiling, windows and doors thereof: Provided, that in the case of an industrial estate condominium projects, wherein whole buildings, plants or factories may be considered as unit defined under section 3 (b) hereof, the boundary of a unit shall include the outer surfaces of the perimeter walls of said buildings, plants or factories. The following are not part of the unit: bearing walls, columns, floors, roofs, foundations, and other common structural elements of the buildings; lobbies, stairways, hall ways and other areas of common use, elevator equipment and shafts, central heating, central refrigeration and central air conditioning equipment, reservoir, tanks, pumps and other central services and facilities, pipes, ducts, flues, chutes, conduits wires and other utility installations, wherever located, except the outlets thereof when located within the unit. b) There shall pass with the unit, as an appurtenant thereof, an exclusive casement for the use of the air space encompasses by the boundaries of the unit as it exists at any particular time and as the unit may lawfully be altered or reconstructed from time to time. Such easement shall be automatically terminated in any air space upon destruction of the units as to render it untenantable. c) Unless otherwise provided, the common areas are held in common by the holders of units, in equal share one for each unit. d) A non-­‐exclusive easement for ingress, egress and support through the common areas in appurtenant to each unit and the common areas are subject to such easement. e) Each condominium owner shall have the exclusive right to paint, repaint, tile, wax, paper or otherwise refinish and decorate the inner surfaces of the walls, ceilings, floors, windows and doors hounding his own unit: provided, that in the case of an industrial estate condominium unit, such right may be exercised over the external surfaces of the said unit. f) Each condominium owner shall have the exclusive right to mortgage, pledge or encumber his condominium and to have the same appraised independently of the other condominium owner. g) Each condominium owner has also the absolute right to sell or dispose of his condominium unless the master deed contains a requirements that the property be first offered to the condominium owners within a reasonable period of time before the same is offered to outside parties; Sec. 7. Except as provided in the following section, the common areas shall remain undivided, and there shall be no judicial partition thereof. Sec. 8. Where several persons own condominium in a condominium project, an action may be brought by one or more such person for partition thereof, by sale of the entire project, as if the owners of all the condominium in such project were co-­‐owners of the entire project in the same proportion as their interests in the common areas: Provided, however, that a partition shall be made only upon a showing: a) That three years after damage or destruction to the project which renders a material part thereof unfit for its use prior thereto, the project had not been rebuilt or repaired substantially to its state prior to its damage or destruction; or b) That damage or destruction to the project has rendered one half or more of the units therein untenantable and that condominium owners holding in aggregate more than 30 percent interest in the common areas are opposed to the repair or restoration of the projects; or c) That project has been in existence in excess of 50 years, that it is obsolete and uneconomical, and that condominium owners holding in aggregate more than 50 percent interest in De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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the common areas are opposed to repair or restoration or remodeling or modernizing of the project; or d) That the project or a material part thereof has been condemned or expropriated and that the project is no longer viable, or that the condominium owners holding in aggregate more than 70 percent interest in the common areas are opposed to the continuation of the condominium regime after expropriation or condemnation of a material proportion thereof; or e) That the condition for such partition by sale set forth in the declaration of restrictions duly registered in accordance with the terms of this Act, have been met. Sec. 9. The owner of a project shall, prior to the conveyance of any condominium therein, register a declaration or restrictions, relating to such project, which restrictions shall ensure to a bind all condominium owners in the project, such liens, unless otherwise provided, may be enforced by any condominium owner in the project or by the management body of such project. The Register of Deeds shall enter and annotate the declaration of restrictions, upon the Certificate of Title covering the land included within the proper, if the land is patented or registered under the Land Registration or Cadastral Acts. Such declaration of restrictions, among the other things, may also provide: a) As to management body 1. For the power thereof, including power to enforce the provisions of the declarations of restrictions; 2. For the maintenance of insurance policies insuring condominium owners against loss by the, casualty, liability, workmen's compensation and other insurable risks and for bonding of the members of any management body; 3. Provisions for maintenance, utility, gardening and other services benefiting the common areas for the operations of the building, and legal, accounting and other professional and technical services; 4. For purchase of materials, supplies and the like needed by the common areas; 5. For payment of taxes and special assessment which would be a lien upon the entire project or common areas, for discharge of my encumbrance levied against the entire project of the common areas; 6. The manner for delegation of its powers; 7. For reconstruction of any portion or portions of any damage to or destruction of the project; 8. For entry by its officers and agents into any unit when necessary in connection with the maintenance or construction for which such body is responsible; 9. For a power of attorney to the management body to sell the entire project for the benefit of all of the owners thereof when partition of the project may be authorized under Section 8 of this Act, which said power shall be binding upon all of the condominium owners regardless or whether they assume the obligations of the restrictions or not. b) The manner and procedure for amending such restrictions, provided, that the vote of not less than a majority in interest of the owners is obtained; c) For independent audit of the accounts of the management body; d) For reasonable assessments to meet authorized expenditures, each condominium unit to be assessed separately for its share of such expenses in proportion (unless otherwise provided) to its owner's fractional interest in any common areas; e) For the subordination of the liens securing such assessments to other lien either generally or specifically described; f) For conditions, other than those provided for in Sections 8 and 13 of this Act, upon which partition of the project and dissolution of the condominium corporation may be made. Such right to partition or dissolution may be conditioned upon failure of the condominium owners to rebuild within a certain period or upon specified percentage of damage to the building, or upon a decision of an arbitration, or upon any other reasonable condition. Sec. 10. Whenever the common areas in a condominium project are held by a condominium corporation, such corporation shall constitute the management body of the project. The corporate purposes of such a corporation shall be limited to the holding of the common areas; either the ownership of any other interest in real property recognized by the law, to the management of the project, and to such other purposes as maybe necessary, incidental or convenient to the accomplishment of said purposes. The articles of incorporation or by laws of the corporation shall not contain any provision contrary to or inconsistent with the provision of this Act, the enabling or master deed, or the declaration of restrictions of the project, membership in a condominium corporation regarding of whether it is stock or non-­‐stock corporation, shall not be transferable separately from the condominium unit of which it is an appurtenance. When a member or a stockholder ceases to own a unit in the project in which the condominium corporation owns or holds the common area, he shall automatically cease to be a member or stockholder of the condominium corporation. Sec. 11. The registration and regulation of a condominium corporation shall be vested with the Housing And Land Use Regulatory Board (HLURB) and the term of the said corporation shall be coterminous with the duration of the subdivision projects, the provision of the corporation law to the contrary notwithstanding. 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Sec. 12. The dissolution of the condominium corporation in any manner and any of the causes provided by law shall be governed by the provisions of the Title XIV of the Corporation Code. Sec. 13. Until the enabling or the master deed of the project in which the condominium corporation owns or holds the common areas is revoked the corporation shall not be voluntarily dissolved through an action for dissolution under Rule 104 of the Rules of Court except upon a showing: a) The three years after damage or destruction to the project in which damage or destruction renders a materials part thereof unfit for its use prior thereto, the project has not been rebuilt or repaired substantially to its state prior to its damage or destruction; or b) The damage or destruction to the project has rendered one half or more of the units therein untenantable and that more than 30 percent of the member of the corporation entitled to vote, if a stock corporation, are opposed to the repair or reconstruction of the project; or c) That the project has been in existence excess of 50 years, that it is obsolete and uneconomical and that more than 50 percent of the members of the corporation if non-­‐stock or stockholders representing more than 50 percent of the capital stock entitled to vote, if a stock corporation, are opposed to the repair or restoration or remodeling or modernizing of the project; or d) That project or material part thereof has been condemned or expropriated and that the project is no longer viable or that the members holding in aggregate more than 70 percent interest in the corporation if non-­‐stock, or the stockholders representing more than 70 percent of the capital stock entitled to vote, if a stock corporation, are opposed to the continuation of the condominium regime after expropriation or condemnation of a material portion thereof; or e) That the conditions for such a dissolution set forth in the declaration of restrictions of the project in which the corporation, are opposed to the continuation of the condominium regime after expropriation or condemnation of a material portion thereof; or Sec. 14. The condominium corporation may also be dissolved by the affirmative vote of all the stockholders or members thereof at a general or special meeting duly called for such purpose: Provided, that all the requirements of Section 62 of the Corporation Law are complied with. Sec. 15. Unless otherwise provided for in the declaration of restrictions, upon voluntary dissolution of a condominium corporation in accordance with the provisions of Sections 13 and 14 of this Act, the corporation shall be deemed to hold a power of attorney from all the members or stockholders to sell and dispose of their separate interests in the project and liquidation of the corporations shall be affected by a sale of the entire project as if the corporation owned the whole thereof, subject to the rights of the corporation and of individual condominium creditors. Sec. 16. A condominium corporation shall not, during its existence, sell, exchange, lease or otherwise dispose of the common areas owned or held by it in the condominium project unless authorized by the affirmative vote of a simple majority of the registered owners: provided, that prior notification to all registered owners are done and provided further, that the condominium corporation may expand or integrate the project with another upon the affirmative vote of a simple majority of the registered owners, subject only to the final approval of the HLURB. Sec. 17. Any provisions of the Corporation Law to the contrary not withstanding, the by-­‐laws of a condominium corporation shall provide. That a stockholder or member shall not be entitled to demand payment of his shares or interest in those cases where such right is granted under the Corporation Law unless the consents to sell his separate interest in the project to the corporation or to any purchaser of the corporation's choice who shall also buy from the corporation the dissenting member or stockholder's interest. In case of disagreement as to price, the procedure set forth in the appropriate provisions of the Corporation Law for valuation of shares shall be allowed. The corporation shall have two years within which to pay for the shares or furnish a purchaser of its choice from the time of award. All expenses incurred in the liquidation of interest of the dissenting member or stockholder shall be borne by him. Sec. 18. Upon registration of an instrument conveying a condominium, the Register of Deed shall, upon payment of the proper fees, enter and annotate the conveyance on the certificate of title covering the land included within the project and the transferee shall be entitled to the issuance of a "condominium owners" copy of the pertinent portion of such certificate of title. Said "Condominium Owner's" copy need not reproduce the ownership status of other condominium in the project. A copy of the description of land, a brief description of condominium conveyed, name and personal circumstances of the condominium owner would be sufficient for purposes of the "condominium owners" copy of the certificate of title. No conveyance of condominium or part thereof, subsequent to the original conveyance thereof from the owner of the project, shall be registered unless accompanied by a certificate of the management body of the project that such conveyance is in accordance with the provisions of the declaration of restrictions of such project. In case of condominium project registered under the provisions of the Spanish Mortgage Law or Act 3344 as amended, the registration of the deed of conveyance of a condominium shall be sufficient if the Register of Deed shall keep the original or signed copy thereof, together with the certificate of the management body of the project, and return a copy of the deed of conveyance to the condominium owner duly acknowledged and stamped by the Register of Deeds in the same manner as in the case of registration of conveyance De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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is in accordance with the provisions of the declaration of restrictions of such project. Sec. 19. Where the enabling or master deed provides that the land included within a condominium project are to be owned in common by the condominium owners therein the Register of Deeds may at the request of all the condominium owner and upon surrender of all their condominium owner's copies, cancel the certificate of title of the property and issue a new one in the name of said condominium owners as pro-­‐indiviso co-­‐owners thereof. Sec. 20. The assessment upon any condominium made in accordance with a duly registered declaration of restrictions shall be an obligation of the owner thereof at the time the assessment is made. The amount of any such assessment plus any other charges thereon, such as interest, costs (including attorney's fee) and penalties, as such may be provided for in the declaration of restrictions, shall be and become a lien upon the condominium to be registered with the Register of Deed of the City or province where such condominium project is located. The notice shall state the amount of such assessment and such other charges thereon as may be authorized by the declaration of restrictions, a description of condominium unit against which same has been assessed, and the name of the registered owner thereof. Such notice shall be signed by an authorized representative of the management body or as otherwise provided in the declaration of restrictions. Upon payment of said assessment and charges of other satisfaction thereof, the management body shall cause to be registered a released of the lien. Such lien shall be superior to all other liens registered subsequent to the registration of said notice of assessment except real property tax liens and except that the declaration of restrictions may provide for the subordination thereof to any other liens and encumbrances, such liens may be enforced in the same manner provided for by law for the judicial or extra-­‐judicial foreclosure of mortgage or real property. Unless otherwise provided for in the declaration of the restrictions, the management body shall have power to bid at foreclosure sale. The condominium owner shall have the right of redemption as in cases of judicial or extra-­‐judicial foreclosure of mortgages. Sec. 21. No labor performed or services or materials furnished without the consent of or at the required of a condominium owner or his agent or his contractor or sub-­‐contractor, shall be the basis of a lien against the condominium of any other condominium owner, unless such other owner have expressly consented to or requested the performance of such labor or furnishing of such materials or services. Such express consent shall be deemed to have given by the owner of any condominium in the case of emergency repairs of his condominium unit. Labor performed or services or materials furnished for the common areas, if duly authorized by the management body provided for in a declaration of restriction governing the property, shall be deemed to be approved by the condominium owner. The owner of any condominium may remove his condominium from a lien against two of the lien of the fraction of the total sum secured by such lien which is attributable to his condominium unit. Sec. 22. Unless otherwise provided for by the declaration of restrictions, the management body, provided for herein, may acquire and hold, for the benefit of the condominium owners, tangible personal property and may dispose of the same by sale or otherwise, and the beneficial interest in such personal property shall be owned by the condominium owners in the same proportion as their respective interests in the common areas. A transfer of a condominium shall transfer to the transferee ownership of the transferor's beneficial interest in such personal property. Sec. 23. Where, in an action for partition of a condominium corporation on the ground that the project or a material part thereof has been condemned or expropriated, the court finds that the condition provided in this Act or in the declaration have not been met, the court may decree a reorganization of the project declaring which portion or portions of the project shall continue as a condominium project, the owners thereof, and the respective rights of the remaining owners and the just compensation, if any, that a condominium owner may be entitled to due to deprivation of his property. Upon receipt of a copy of the decree, the Register of Deeds shall enter and annotate the same on the pertinent certificate of title. Sec. 24. Any deed declaration or plan for a condominium project shall be liberally construed to facilitate the operation of the project, and its provisions shall be presumed to be independent and several. Sec. 25. The building and design standards for condominium projects to be promulgated by HLURB shall provide for, among others, accessibility features for disabled persons pursuant to Batas Pambansa Bilang 344 of 1994. Sec. 26. Whenever real property has been divided into condominiums, each condominium separately owned shall be separately assessed, for purposes of real property taxation and other tax purposes, to the owners thereof and tax on each such condominium shall constitute a lien solely thereon. Sec. 27. All acts or parts of Acts in conflict on inconsistent with this Act are hereby amended insofar as condominium and its incidents are concerned. Concept of Condominium: interest in a specific unit and an undivided interest in common areas The two interests must go hand-­‐in-­‐hand Separate interest in: a unit in a residential, industrial or commercial building Undivided interest in common: directly or indirectly in the land on which it is located and in other common areas of the building Note: The condominium law effectively separates the building from the land (by a master deed) De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Co-ownership
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Building is deemed an accessory Amendments: co-­‐ownership in common areas means shared expenses in these areas Sec 4: simple majority of the property Sec 16: common areas may be disposed by affirmative vote of a simple majority of the registered owners What does the Housing and Land Use Regulatory Board do? They hear the complaints of buyers Important documents in Condo Ownership: 1) deed of sale 2) master deed 3) declaration of restrictions: pertains to how common areas will be governed and who will do the governing i.e. how to contribute to common area expenses: contribution to maintenance, upkeep, repair of common areas included there is an “Assessment”, which is a lien upon the condo unit Case: Not every purchaser of a condo unit is a shareholder of the condo corporation The Master deed determines when shareholding will be transferred to the buyer – in this case, there was a contract to sell, in which case there had to be full payment before ownership can be transferred Upon transfer of ownership, the purchaser of the condo becomes a shareholder of the condo corporation. A “separate interest” in the condominium entitles the holder to become automatically a share holder in the condominium corporation (Sec 2 of the Condominium Act) (Sunset View Condo v. Judge Campos) J.
Extinguishment of Co-­‐ownership 1. Total Destruction of Thing or loss of the Property-­‐Co-­‐owned Is there still co-­‐ownership if a building is destroyed? Yes, over the land and the debris. 2.
Merger of all interests in one person What: consolidation in only one of the co-­‐owners of all the interests of the others 3.
Acquisitive Presciption By whom: 1) A third person (Art 1106) 2) A co-­‐owner against the other co-­‐owners Requisites: 1) Unequivocal acts of repudiation of the rights of the other co-­‐owners (you oust the other co-­‐owners) must be shown by clear and convincing evidence must be within the knowledge of the other co-­‐owners must not be a mere refusal to recognize the others as co-­‐owners 2) Open and adverse possession not mere silent possession Note: there is a presumption that possession of a co-­‐
owner is not adverse Prescription only arises and produces all effects when the acts are clearly meant to oust the rights of the other co-­‐owners Case: Fabian the dad died intestate and was survived by 4 kids. One of his grandkids, de Gaban, survived him too. Capitle is a kid of another one of Fabian’s kids, meaning pet. and res. are cousins. But! Apparently, Fabian had two wives, so the mums of the two brothers from whom the kids filing this case came from were different. Now they are having problems dividing the property Fabian owned. The Spanish Civil Code applies to the issue of inheritance since Fabian died way before the NCC. The line of the petitioners (Capitle) is illegitimate. Assuming arguendo that they were legitimate and, therefore, were co-­‐owners of the property: From the moment co-­‐owner Julian occupied in 1919 and claimed to be the absolute and exclusive owner of the property and denied his brothers any share therein up to the time of his death in 1950, the question involved is no longer one of partition but of ownership in which case imprescriptibility of the action for partition can no longer be invoked. The adverse possession by Julian and his successors-­‐
in-­‐interest-­‐ herein respondents as exclusive owner of the property having entailed a period of about 67 years at the time of the filing of the case at bar in 1986, ownership by prescription had vested in them. (Capitle v. De Gaban) 4.
Partition or Division Of what: respective individed shares of the co-­‐owners a.
Right to ask for partition at anytime except: i.
ii.
iii.
iv.
When there is a stipulation against it (not over ten years) When condition of indivision is imposed by transferor/donor/testator (not to exceed 20 years) When the legal nature of community prevents partition (i.e. party wall) When partition is generally prohibited by law (i.e. ACP, party wall) De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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v.
1)
When the partition would render the thing unserviceable or the thing held in common is essentially indivisible If the thing cannot be physically partitioned, they may sell the thing and the co-­‐owners may divide the proceeds) when acquisitive prescription has set in in favor of a stranger to con-­‐ownership or in favor of a co-­‐owner b.
Effects of Partition 1)
2)
3)
4)
5)
confers upon each heir the exclusive ownership of the property adjudicated to him co-­‐heirs shall be reciprocally bound to warrant the title to and the quality of each property adjudicated reciprocal obligation of warranty shall be proportionate to the respective hereditary shares of co-­‐heirs an action to enforce warranty must be brought within 10 years from the date the right accrues the co-­‐heirs shall not be liable for the subsequent insolvency of the debtor of the estate c.
Right of creditors of individual co-­‐owners d.
Procedure for Partition: How: agreement by parties or judicial decree Form: oral or written (statute of Frauds does not operate here because it is not a conveyance of property but a mere segregation or designation of which parts belong to whom) Rules of Court: does not preclude agreements or settlements Action for Partition: WON the plaintiff is indeed a co-­‐owner of the property HOW will the property be divided between the plaintiff and defendant. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Part 6. Possession A. Definition and Concept Article 523. Possession is the holding of a thing or the enjoyment of a right. Concept of Possession: To possess means to have, to physically and actually occupy a thing, with or without right. (Sanchez Roman) It is the holding of a thing or a right, whether by material occupation or by the fact that the thing or the right is subjected to the action of our will. (Manresa) It is an independent right apart from ownership. Right of Possession Right to possess (jus possessionis) (jus possidendi) Independent right Incident to ownership Possession includes the idea of occupation. It cannot exist without it. (Exceptions: Art 537) Essential Requisites of Possession: 1) Holding or control of a thing or right (corpus) consists of either a) The material or physical holding or occupation either b) Exercise of a right c) Constructive possession (intention to possess is very crucial)’ General Rule: Possession and cultivation of a portion of a tract under claim of ownership of all is a constructive possession of all, if the remainder is not in adverse possession of another. Doctrine of constructive possession applies when the possession is under title calling for the whole. It does not apply where possession is without title. Cases: Ramos instituted proceedings to have his title registered. Director of Lands filed an opposition to register on the ground that he has not acquired a good title, because he has only cultivated ¼ of the land. Possession in the eyes of law does not mean that a man has to have his feet on every square meter of the ground before it can be said that he is in possession. The general rule is that the possession and cultivation of a tract of land under a claim of ownership of all, is a constructive possession of all, if the remainder is not in adverse possession of another. (Ramos v. Director of Lands) www A land was occupied by 40 tenants during the Spanish regime. They were granted homestead applications. Years after, the heirs filed for registration of the land in their names. The heirs have no right to the registration of the land. The rule on constructive possession does not apply because the major portion of the land is in the adverse possession of the homesteaders and the heirs. It is still part of public domain until the patents are issued. (Director v. CA) 2) Intention to possess (animus possidendi) Animus possidendi may be contradicted and rebutted by evidence – to prove that the person who is in possession, does not in fact exercise power or control and does not intend to do so. B. Degrees of Holding Possession 1.
Mere holding or possession without title whatsoever and in violation of the right of the owner, e.g. possession of a thief or usurper of land 2. Possession with juridical title but not that of ownership, e.g. possession of a tenant, depository agent, bailee trustee, lessee, antichretic creditor. This degree of possession will never ripen into full ownership as long as there is no repudiation of concept under which property is held. 3. Possession with just title or title sufficient to transfer ownership, but not from the true owner e.g. possession of a vendee from a vendor who pretends to be the owner. This degree of possession ripens into full ownership by lapse of time. 4. Possession by just title from the true owner. The delivery of possession transfers ownership and strictly speaking, is jus possidendi. Principal aspect of possession is presumed ownership, by virtue of a just title and continuous holding of a thing, C.
Cases of Possession 1.
Possession for oneself, or possession exercised in one’s own name and possession in the name of another. Article 524. Possession may be exercised in one's own name or in that of another. Name under which possession may be exercised: 1) In one’s own name – the fact of possession and the right to such possession is found in the same person. 2) In the name of another – the one in actual possession is without any right of his own, but is merely an instrument of another in the exercise of the latter’s possession. The rights of possession may be exercised through agents and may either be necessary or voluntary. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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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. Necessary – when exercised in behalf of a conceived child, of juridical persons, of persons not sui juris and of the conjugal partnership, by their representatives. Voluntary – agents or administrators appointed by the owner or possessor. Third person may also voluntary exercise possession in the name of another, but it does not become effective unless ratified by the person in whose name it is exercised. 2.
Possession in the concept of an owner, and possession in the concept of a holder with the ownership belonging to another 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 in Concept of Holder: One who possesses as a mere holder, not in the concept of owner, acknowledges in another a superior right which he believes to be ownership, whether his belief be right or wrong. E.g. tenant, usufructuary, borrower in commodatum. Possession in Concept of Owner: May be exercised by the owner himself or one who claims to be so. When a person claims to be the owner of a thing, whether he believes so or not, acting as an owner, and performing acts of ownership, and he is or may be considered as the owner by those who witness his exercise of proprietary rights, then he is in the possessor of an owner. This is the kind of possession that ripens into ownership under Article 540. Effects of Possession in Concept of an Owner: 1) Converted into ownership by the lapse of time necessary for prescription 2) Possessor can bring all actions necessary to protect his possession, availing himself of any action which an owner can bring, except accion revindicatoria which is substituted by accion publiciana. 3) He can ask for the inscription of possession in the registry of property 4) Upon recovering possession from one who has unlawfully deprived him of it, he can demand fruits and damages 5) He can do on the thing possessed everything that the law authorizes an owner to do; he can exercise the right of pre-­‐emption and is entitled to the indemnity in case of appropriation. 3.
Possession in good faith and possession in bad faith 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. An honest intention to abstain from taking any unconscientious advantage of another and is the opposite of fraud. A state of mind and not visible or tangible fact that can be 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. The belief of a possessor that he is the owner of the thing must be based upon the title or mode of acquisition, such as a sale, a donation, inheritance or other means of transmitting ownership; for without this, there can be no real, well-­‐
grounded belief of one’s ownership. Error in the application of the law, in the legal solutions that arise from such application, in the appreciation of legal consequence of certain acts, and in the interpretation of doubtful provisions or doctrines, may properly serve as basis for good faith. A misconception of the law, no matter how honest cannot have the effect of making one a possessor in good faith, when he does not hold a title valid in form or a deed sufficient in terms to transfer property. Possessor in Bad Faith – one who knows his title is defective Only personal knowledge of the flaw in the title or mode of acquisition can make him a possessor in bad faith for bad faith is not transmissible from one person to another. Case: Jardinico bought lot no. 9 from Pleasantville and upon the issuance of TCT in his name, he found out that Wilson Kee had already taken possession of the lot and made improvements thereon. Apaprently, Kee bought lot no. 8 and the lot that was pointed to him as lot no.8 was actually lot no. 9. Kee was unaware of the mix up. Kee is a builder in GF. It was CITEI (the agent of Pleasantville) that caused the mix up. Good faith consists in the belief of the builder that the land he is building on is his and he is ignorant on the defect or flaw in his title. At the time he built his improvements on the lot, Kee honestly believed that the lot he De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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was possessing was Lot no. 8. (Pleasantville Development Corp. v. CA) a. Mistake upon a doubtful or difficult question of law as a basis of good faith Mistake or ignorance of the law, by itself, cannot become the basis of good faith. What makes the error or ignorance a basis of good faith is the presence of an apparent “doubt” or “difficulty” in the law. In other words, the law is complex, ambiguous, or vague such that it is open to two or more interpretations. When the ignorance of the law is gross and inexcusable, as when a person of average intelligence would know the law, such ignorance cannot be the basis of good faith. Otherwise, the intendment of Article 3 which states that, “Ignorance of the law excuses no one from compliance therewith,” will be defeated. Case: Ambrosio was issued a homestead patent. She entered two agreements with Kasilag. The first, she mortgaged the improvements of the land as a security for the loan, and second, where she conveyed the possession of the land to Kasilag subject to conditions. By virtue of the 2nd agreement, Kasilag entered upon the land. Both of them were unaware that the legal term for the contract that they entered into was that of an antichresis. Ambrosio died and her heirs sought recovery of the land. Kasilag cannot be said to have acted in bad faith by taking possession of the land as a consequence of the agreement, as Ambrosio was prohibited from encumbering or alienating the land for 5 years because of a homestead patent. A person is deemed a possessor in BF when he knows there is a flaw in his title or in the manner of acquisition by which it is invalidated. Gross and inexcusable ignorance of the law may not be the basis of GF, but possible, excusable ignorance may be the basis. Kasilag is not a lawyer nor conversant in the law. He did not know that the possession and taking of the fruitsa re the attributes of a contract of antichresis, and is prohibited by the homestead agreement. Thus, his ignorance is excusable and may be the basis of good faith. (Kasilag v. Rodriguez) D. What Things or Rights May be Possessed Article 530. Only things and rights which are susceptible of being appropriated may be the object of possession. Not all things susceptible of appropriation can be the object of prescription (See Article 1113) E.
What may be possessed by private persons 1. Res Communes 1. Property of Public Dominion 2. Right under discontinuous and/or non-­‐apparent easement F.
Acquisition of Possession 1.
Ways of acquiring possession 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. Essential Requisites – the two must concur: 1) Corpus – the material holding of the thing 2) Animus – the intent to possess it Animus is essential in possession. There is no possession if the holder does not want to exercise the rights of a possessor. Animus is implied from the acts of the possessor. a.
Material Possession of the Thing Occupation – acquiring possession of things but not rights. It is only possession of fact, not the legal right of possession. Usurpation is not sanctioned as a method of acquiring possession. b.
Subjection to the action of our will Material possession of the thing subjects it to the action of our will. The action of our will must be juridical, in the sense that it must be according to law. i.
The doctrine possession of constructive Considered as equivalent to material occupation in those cases where such occupation is essential to the acquisition of possession. ii.
Includes constructive delivery 1.
Traditio brevi manu (thing already in transferee’s hands, e.g. under a contract of lease, then delivered under a sale) One who possesses a thing by title other than ownership, continues to possess the same under a new title, that of ownership. 2. Traditio constitutum possessorium (thing remains in the transferor’s hands, e.g. sale then retained under a commodatum) When the owner alienates the thing, but continues to possess the same under a different title, such as a depositary, pledge or tenant De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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c.
Proper acts under legal formalities – refers to the acquisition of possession by sufficient title, intervivos or mortis causa, lucrative or onerous. Example : 1. Includes tradition longa manu and tradition simbolica, donations, succession (testate or intestate), contracts, judicial writs of possession, writ if execution of judgments, execution and registration of public instruments. Tradicion simbolica – effected by delivering some object or symbol or placing the thing under the control of the transferee, such as the keys of the warehouse containing the goods delivered Tradicion longa manu – Effected by the transferor by pointing out to the transferee the things which are being transferred. Case: Reyes mortgaged to the bank several pieces of property and pledged part of his property and the goods were delivered to a depositary. Garcia (another creditor of Reyes) obtained a favorable judgment against his property and requested the sheriff to seize the goods in the warehouse. The sheriff could not seize the goods as there was a perfected contract of pledge and the depositary was placed in the possession of the goods after the symbolic transfer by means of delivery to him of the keys of the warehouse where the goods are kept. (Banco Espanol Filipino v. Peterson) 2. By whom may possession be acquired 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.
a.
By the same person; Elements of Personal Acquisition: 1) Must have the capacity to acquire possession 2) Must have the intent to possess 3) The possibility to acquire possession must be present. b.
By his legal representative Acquisition through Another The representative or agent has the intention to acquire the thing or exercise the right for another, and not for himself That the person for whom the thing has been acquired or the right exercised, has the intention of possessing such thing or exercising such right The most usual form of authority is that of agency which may be special power or general authority. Negotiorum Gestio – when a person voluntarily manages the affairs of another. Acquisition takes place when the person represented learns of it and ratifies the possession in his name. Such ratification retroacts to the time of the apprehension by the gestor and possession of the former must be deemed to have been acquired from that moment. Article 534. On 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 the death of the decedent. Bad faith is personal and intransmissible. Its effects must be therefore, be suffered only by the person who acted in bad faith; his heir should not be saddled with the consequences Good faith can only benefit the person who has it; and the good faith of the heir cannot erase the effects of bad faith of his predecessor. c.
By his agent d.
By any person without any power whatsoever but subject to ratification, without prejudice to proper case or negotiorum gestio (Arts. 2144, 2i49, 2150) Article 2144. Whoever voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, is obliged to continue the same until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so. This juridical relation does not arise in either of these instances: (1) When the property or business is not neglected or abandoned; (2) If in fact the manager has been tacitly authorized by the owner. n the first case, the provisions of Articles 1317, 1403, No. 1, and 1404 regarding unauthorized contracts shall govern. In the second case, the rules on agency in Title X of this Book shall be applicable. Article 2149. The ratification of the management by the owner of the business produces the effects of an express agency, even if the business may not have been successful. Article 2150. Although the officious management may not have been expressly ratified, the owner of the property or De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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business who enjoys the advantages of the same shall be liable for obligations incurred in his interest, and shall reimburse the officious manager for the necessary and useful expenses and for the damages which the latter may have suffered in the performance of his duties. The same obligation shall be incumbent upon him when the management had for its purpose the prevention of an imminent and manifest loss, although no benefit may have been derived. e.
Qualifiedly, 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. Incapacitated – all those who do not have the capacity to act (insane, lunatic, deaf-­‐mutes who cannot read and write, spendthrifts and those under civil interdiction) Minors can acquire the possession of things and avail themselves of this possession when they become of age, for purposes of acquisitive prescription. Possession of things and not possession of rights Acquisition of possession by material occupation Includes acquisition by any means for which the minor or incapacitated person has the capacity Succession, testate or intestate, donations propter nuptias, or even pure and simple donations 3.
What do not affect possession 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 Those which by reason of neighborliness or familiarity, the owner of property allows his neighbor or another person to do on the property; Those particular services or benefits which one’s property can give to another without material injury or prejudice to the owner, who permits them out of friendship or courtesy Acts of little disturbances which a person, in the interest of neighborliness or friendly relations permits others to do on his property, although continued for a long time, no right will be acquired by prescription Case: The children were invited by their parents to occupy the latter’s 2 lots, out of parental love and family solidarity. However, due to conflict, the parents asked them to vacate the premises by filing an unlawful detainer against them. When the parents invited the children to use the lots, no period was intended by the parties. The agreement subsisted as long as both parties benefitted. When the conflict arose, the children no longer had any cause for continued possession of the lots. It ceased upon the notice to vacate. (Mascaet v. Mascaet) b.
Acts executed clandestinely and without the knowledge of the possessor Possession must be public in order to be the basis for prescription Article 1118. Possession has to be in the concept of an owner, public, peaceful and uninterrupted. c.
Acts of violence as long as the possessor objects thereto (i.e. he files a case) 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. Possession acquired by force, not only when one forcibly takes away the property from another, but also when one occupied the property in the property in the absence of another, and repels the latter upon his return. Force may be actual or threatened; and may be employed by the possessor himself, or by another for him, and against any possessor. Effect on Possession: Acts mentioned do not constitute true possession. They do not interrupt the period of prescription nor affect the rights to the fruits. For all purposes that may be favorable to the true possessor, his possession is not considered interrupted. Cases: The owner of a piece of land, in order to accommodate his neighbors and the public, permitted them to cross his property. A road was established for this purpose, kept in repair by the owner and continued in use for 30-­‐40 years until the owner began to collect tolls for the passage of the carts. The mere permissive use merely tolerated by the possessor cannot affect possession and cannot be the basis of acquisitive prescription. Possession to constitute the De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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foundation of prescriptive right, must be possession under claim of title, it must be adverse. (Cuaycong v. Benedicto) In 1961, Mitra purchased Lot 16 of East Ave. Subdivision owned by PHHC. The lot was in actual possession of Astudillo who has a shanty there and has been squatting on the land since 1957. She has no cause of action to impugn the award to Mitra and to require that she be allowed to purchase the lot. As a squatter, she has no possessory right over Lot 16. In the eyes of law, the award to Mitra did not prejudice her, since she was bereft of any rights over the lot. (Astudillo v. Board of Dir. PHHC) www Evasco owned a lot which he partitioned among his 5 heirs. Alejandro (one of the heirs) allowed his niece to erect a house on the portion of the lot. When he asked her to vacate, she refused. Prior possession of the niece was only by mere tolerance and therefore does not vest them any right which they can assert. Possession by tolerance is lawful but this becomes illegal when, upon demand to vacate by the owner, the possessor refuses to comply with such demand. (Peran v. CFI) 4.
Rules to solve conflicts of possession 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. General Rule: possession cannot be recognized in two different personalities, except in cases of co-­‐possession by co-­‐
possessors without conflict of claims of interest. In case of conflicting possession – preference is given to: a. Present possessor or actual possessor b. In there are two or more possessors, the one longer in possession c. If the dates of possession are the same, the one who presents a title d. If all conditions are equal, the thing shall be placed in judicial deposit pending determination of possession or ownership through proper proceedings G. Effects of Possession 1.
In general, every possessor has a right to be respected in his possession; if disturbed therein, possessor has a right to be protected in or restored to said 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 filing thereof. “Every possessor” – includes all kinds of possession, from that of an owner to that of a mere holder, except that which constitutes a crime. Reason for rule: Prevent anyone from taking the administration of justice into his own hands. Even the owner cannot forcibly eject the possessor, but must resort to the courts. a.
Actions to recover possession i.
Summary proceedings – forcible entry and unlawful detainer. Plaintiff may ask for writ of preliminary mandatory injunction. Within 10 days from filing of complaint in forcible entry. (Article 539) Forcible entry and Unlawful Detainer Rule 70, Rules of Court gives any person deprived of the possession of any land or building by force, intimidation, strategy, or stealth at any time within one year after such unlawful deprivation, the action of forcible entry. “by force, intimidation, strategy, or stealth” Includes every situation or condition under which one person can wrongfully enter upon real property and exclude another, who has had prior possession therefrom. The same writ is available in unlawful detainer actions upon appeal. (Arr. 1674) Article 1674. In ejectment cases where an appeal is taken the remedy granted in Article 539, second paragraph, shall also apply, if the higher court is satisfied that the lessee's appeal is frivolous or dilatory, or that the lessor's appeal is prima facie meritorious. The period of ten days referred to in said article shall be counted from the time the appeal is perfected. Case: Marcelo Steel Corp. sold 42 tons of scrap engine blocks to Refuerzo (an alleged swindler), the latter sold it to the YU spouses. The purchase was in GF. The court issued a warrant for the seizure of said goods. The Yu spouses were petitioning for the return of the engine blocks. Yu can get the scrap engines back in the absence of any final judgment in the estafa case as to the civil liability of Yu. The acquirer and possessor in GF of a chattel or movable property is entitled to be respected and protected in his possession as if he were the true owner, until a competent court rules De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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otherwise. Possession in GF is equivalent to a title and every possessor has a right to be respected in his possession. (Yu v. Honorad0) ii. Accion publiciana (based on superior right of possession, no ownership) Action for the recovery of possession of real property upon mere allegation and proof of a better title thereto iii. Accion revindicatoria (recovery of ownership), including right to possess An action setting up title and right to possession Not barred by a judgment in an action for forcible entry and unlawful detainer iv. Action for replevin (possession or ownership for movable property)
b.
Lawful possessor can employ 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 Article 540. Only the possession acquired and enjoyed in the concept of owner can serve as a title for acquiring dominion. To consolidate title by prescription, the possession must be under claim of ownership, and it must be peaceful, public and uninterrupted. It is only the conviction of ownership externally manifested, which generates ownership. Acts of possessory character done by virtue of a license or mere tolerance on the part of the real owner are not sufficient and will not confer title by prescription or adverse possession. The following cannot acquire title by prescription: Lessees, trustees, pledges, tenants on shares or planters and all those who hold in the name or representation of another, Or as mere holders placed in possession of the property by the owner, such as agents, employees And those holding in a fiduciary character, like receivers, attorneys, depositaries and antichretic creditors Neither can a co-­‐owner acquire the common property by prescription against co-­‐owners Except: When he holds the same adversely against all of them with notice to them the exclusive claim of ownership General Rule: Prescription does not run in favor of one who holds trust for others. 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. Refers to all kinds of possession, whether in concept of owner or not, in good faith or in bad faith, and in one’s own name or another’s –in reference to things only, NOT rights. 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. 2.
Entitlement to fruits – possessor in good faith/bad faith (Arr. 544, 549) 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. Provision is based on the following reasons of equity: The fruits received are generally used for the consumption and livelihood of the possessor, and his life and expenses may have been regulated in view of such fruits The owner has been negligent in not discovering or contesting the possession of the possessor; it would be unjust after the possessor has been thus allowed o rely on the efficacy of the title, to require him to return the fruits he has received on the basis of that title. Between the owner who has abandoned his property and left it unproductive and the possessor, who has contributed to the social wealth, by the fruits he has produced, the law leans toward the latter. Right of the possessor in good faith: Only limited to the fruits of the thing. He must restore the fruits received from the time such good faith ceased. He has no rights to the objects which do not constitute fruits. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Legal interruption of possession in good faith: Takes place when an action is filed against him –from the time he learns of the complaint, from the time he is summoned to the trial. 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 desire, 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. Old Civil Code New Civil Code Possessor in GF was reimbursed the entire Proportionate division of expense of cultivation expenses of production incurred by him Charges: Those which are incurred, not on the thing itself but because of it Borne by the two possessors in proportion to their respective possession Include every presentation required of the possessor by reason of possession of the thing, whether it constitutes a real right or not. E.g. Taxes, contributions in favor of the government When fruits are insufficient – There should only be reimbursement of expenses; but each possessor should suffer a proportionate reduction due to the insufficiency of the harvest. 3.
Reimbursement for expenses – possessor in good/bad faith 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.
Necessary Expenses Imposed by the thing itself and have no relation to the desire or purpose of the possessor; hence they are reimbursed, whatever may be the juridical character of the person who advanced them. They are the “cost of living” for the thing and must be reimbursed to the one who paid them, irrespective of GF or BF. Only a possessor in GF is entitled to retain the thing until he is reimbursed. Those imposed for the preservation of the thing. They are not considered improvements; they do not increase the value of the thing, but merely prevent them from becoming useless. Useful Expenses Incurred to give greater utility or productivity to the thing E.g. Wall surrounding an estate, an irrigation system, planting in an uncultivated land, a fishpond, an elevator in the building, electric lighting system They are reimbursed only to the possessor in GF as a compensation or reward for him. Possessor in BF cannot recover such 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. Possessor in GF – may remove the useful improvement if it can be removed without damage to the principal thing, instead of asking for reimbursement for the expenses incurred. Possessor in BF – cannot remove, even if he can do so. 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 They do not affect the existence or the substance of the thing itself, but only the comfort, convenience or enjoyment of the possessor. They are not the subject of reimbursement, because the law does not compensate personal whims or caprices. E.g. Opening of a garden, placing fountains and statues in it, adorning the ceilings paintings, and the walls with reliefs Useful Expenses v. Expenses for Luxury: Useful Expenses Expenses for Luxury Those which increase the Those which merely income derived from the embellished the thing thing Result: Increase in the Result: Benefit or advantage products, either absolutely, is only for the convenience of De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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or because of greater facilities for producing them Includes expenses resulting in real benefit or advantage to the thing The resulting utility is essential and absolute, to all who may have the thing. definite possessors The utility is for the possessor or particular persons alone and is therefore accidental. 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.
Right of the possessor in bad faith No right to receive any fruits. Those already gathered and existing will have to be returned. Those lost consumed or which could have been received, he must pay the value. He does not have to pay interest on the value of the fruits he has to pay because such amount is unliquidated. Article 550. The costs of litigation over the property shall be borne by every possessor. Article 551. Improvements caused by nature or time shall always insure to the benefit of the person who has succeeded in recovering possession. Includes all the natural accessions referred to by articles 457-­‐
465, and all those which do not depend upon the will of the possessor. e.g. widening of the streets, rising of fountains of fresh or mineral water, increase of foliage of trees a.
Liability for loss or deterioration of property by possessor in bad faith. 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.
Possessor in GF – No liability for the loss or deterioration The liability is for the loss or deterioration occurring when the possession is in bad faith. A greater liability, is imposed upon the possessor who is in bad faith from the beginning than upon one whose possession started in good faith but was converted into bad faith. Former is liable, even in cases of fortuitous event. Latter is liable only in cases of fraud and negligence, after judicial summons. Possessor in good faith v. Possessor in Bad faith: Possessor in GF Possessor in BF Must reimburse fruits received or fruits legitimate Entitled to the fruits possessor could Fruits while possession is in have received (549) Received GF and before legal interruption ( 544) Entitled to expenses for production, gathering and preservation Entitled to a part of their expenses of cultivation and part of the network harvest, both proportion to the time of possession (545) Pending Owner may indemnify Fruits or allow possessor in GF to finish cultivation and fruits will be indemnified for his cultivation (545) If possessor refuses concession, no indemnity (545) Must share with the legitimate possessor, Charges Same as with GF in proportion to the time of possession Right of Necessary reimbursement and Reimbursement only Expenses retention in the meantime (545) Owner’s option to reimburse him either for expenses or for increase in value (546) No right to reimbursement. He Retention prior to also cannot remove Useful reimbursement (546) improvements even Expenses he can do so without Limited right of injury to the removal but should principal thing. not damage principal and owner does not exercise option of payment of expenses or increase in value De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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(547) Ornamental Expenses Limited right of removal as above (548) Limited right of removal (no injury to thing and lawful possessor does not retain by paying for them) (548) Deterioration of Loss No liability unless due to fraud or negligence after becoming in BF Liable WoN due to his fault, negligence, fortuitous event Costs of Litigation Bears cost Bears cost 4.
Possession of movable acquired in good (in concept of owner) is equivalent to title (Article 559) 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 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. Possessor has actual title which is defeasible only by true owner One who has lost a movable or ahs been unlawfully deprived thereof may recover it without reimbursement, except is possessor acquired it in a public sale. Possession of personal property acquired in good faith is equivalent to title. When the movable property is in the possession of one who has acquired and holds it in good faith, the true owner cannot recover it, except when the latter has lost it or he has unlawfully deprived of it. Requisites of title: 1) Possession in GF 2) The owner has voluntarily parted with the possession of the thing 3) The possession is in the concept of an owner When the Owner Can Recover: 1) Has lost the thing 2) Has been unlawfully deprived thereof H. Effect of possession in the concept of owner: 1.
Possession may be lapsed of time ripen into full ownership, subject to certain exceptions 2.
Presumption of just title and cannot be obliged to show or prove it (Article 541); exception (Article 1131) 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. Basis: Possession is presumed ownership, unless the contrary is proved. This presumption is prima facie and it prevails until contrary is proved. Just title – that which is legally sufficient to transfer the ownership or the real right to which it relates Exception: Article 1131. For the purposes of prescription, just title must be proved; it is never presumed. 3.
Possessor may bring all actions necessary to protect his possession except revindicatoria 4.
May employ self help under Article 429 5.
Possessor may ask for inscription of such real right of possession in the registry of property 6.
Has right to the fruits and reimbursement of expenses (assuming he is possessor in good faith) 7.
Upon recovery of possession which has unlawfully deprived may demand fruits and damages 8.
Generally, he can do on the things possessed everything that the law authorizes the owner to do until he is ousted by one who had a better right. 9.
Possession in good faith and possession in bad faith (Article 528) a.
Mistake upon doubtful or difficult question of law as a basis of good faith (Article 526, par 3) I.
Presumption in favor of the possessor – for acquisitive prescription 1.
Of good faith until contrary is proved 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. Presumption is only juris tantum because possession is the outward sign of ownership. Unless such proof of bad faith is presented, the possessor will be held to be in good faith. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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So long as the possessor is not actually aware of any defect invalidating his title, he is deemed a possessor in good faith. 2.
Of continuity of initial good faith in which possession was commenced of possession in good faith does not lose this character except in case and from the moment possessor became aware or is not unaware of improper or wrongful possession (Art 528) 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. Possession in good faith 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. Good faith ceases from the date of the summons to appear at the trial. Case: Cordero and her children filed a complaint against Cabral and her tenants for possessing the land they inherited from her husband. The Corderos are demanding them to surrender the possession of the land and/or vacate it. They refused. There is no evidence that the Cabrals were possessors in BF. However, their GF ceased when theyw ere served with summons to answer the complaint. As possessors in BF from the service of the summons, they shall reimburse the fruits received. Good faith ceases from the date of the summons to appear at the trial. (Cordero v. Cabral) 3.
Of enjoyment of possession in the same character in which possession was required until contrary is proved (Article 529) Article 529. It is presumed that possession continues to be enjoyed in the same character in which it was acquired, until the contrary is proved. 4.
Of non-­‐interruption of possession in favor of present possessor who proves possession at a previous time until the contrary is proved (Article 554, 1120-­‐1124) Article 554. A 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. Article 1120. Possession is interrupted for the purposes of prescription, naturally or civilly. Article 1121. Possession is naturally interrupted when through any cause it should cease for more than one year. The old possession is not revived if a new possession should be exercised by the same adverse claimant. Article 1122. If the natural interruption is for only one year or less, the time elapsed shall be counted in favor of the prescription. Article 1123. Civil interruption is produced by judicial summons to the possessor. Article 1124. Judicial summons shall be deemed not to have been issued and shall not give rise to interruption: (1) If it should be void for lack of legal solemnities; (2) If the plaintiff should desist from the complaint or should allow the proceedings to lapse; (3) If the possessor should be absolved from the complaint. In all these cases, the period of the interruption shall be counted for the prescription. 5.
Of continuous possession or non-­‐interruption of possession of which he was wrongfully deprived for all purposes favorable to him. 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. Applicable to both the possessor in GF and BF, but only so far as it redounded to their benefit. Possessor in GF – deemed to be in continuous possession for the purpose of prescription. Recovery of possession must be according to law; through the use of proper actions and the use of competent authority. 6.
Other presumptions with respect to specific properties of property rights: a. Of extension of possession of real property to all movables contained therein so long as in is not shown that they should be excluded; exceptions (Article 426) 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 Chapter 2. Whenever the word "muebles," or "furniture," is used alone, it De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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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. b. Non-­‐interruption of possession hereditary property (Article 533, 1078) of 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 1078. 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. c. Of just title in favor of possessor in concept of owner (Article 541; but see Art 1141) 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. Article 1141. Real actions over immovables prescribe after thirty years. This provision is without prejudice to what is established for the acquisition of ownership and other real rights by prescription. J.
Possession may be lost by 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 Includes the giving up possession, and not necessarily of ownership by every possessor It is the opposite occupation. It consists of the voluntary renunciation of all the rights which the person may have in a thing, with intent to lose such a thing. To be effective, it must be necessary that it be made by a possessor in the concept of an owner. It must be clearly appear that the spes recuperandi is gone and the animus revertendi is finally given up. 2.
Assignment, either onerous or gratuitous Complete transmission of ownership rights to another person, gratuitously or onerously 3.
Destruction or total loss of thing or it goes out of commerce Must be total, otherwise partial loss will result in loss of possession in the lost part only. 4.
Possession by another; if possession has lasted longer than one year; real right of possession not lost after 10 years Subject to Article 537 (acts merely tolerated, etc.) 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. Possession that is lost here refers only to possession as a fact (de facto), not the legal right of possession (de jure). It is the possession that the new possessor acquires. Real right of possession is lost only after 10 years. After one year, the actions for forcible entry and unlawful detainer can no longer be brought. But accion publiciana may still be instituted to recover possession de jure 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. The improvements, having ceased to exist, the lawful possessor or owner cannot benefit from them; hence he should not pay for them. Necessary expenses are not considered improvements, and even if the object for which they were incurred no longer exists at the time of entry upon possession, the lawful possessor or owner has to pay for them. Article 557. The possession of immovables and of real rights is not deemed lost, or transferred for purposes of prescription to the prejudice of third persons, except in accordance with De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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the provisions of the Mortgage Law and the Land Registration laws. Third parties relying on the Registry of Property are privileged to consider the registered possessors or owners as still such in spite of loss 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. Rules for Loss of 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 judicial control or right, or that the thing remains in one’s patrimony 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.
Kinds of Animals Wild – those which live naturally independent of man Domesticated – those which, being wild by nature, have become accustomed to recognize the authority of man. When they observe this custom, they are placed in the same category as domestic and when they lose it, they are considered as wild. Domestic or Tame – those which are born and reared ordinarily under the control and care of man; they are under the ownership of man, and do not become res nullius unless they are abandoned. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Part 7. Usufruct A. Concept 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. Definition: Usufruct is a real right, of a temporary nature, which authorizes its holder to enjoy all the benefits which results from the normal enjoyment of another’s property, with the obligation to return, at the designated time, either the same thing or, in special cases, its equivalent. (De Buen) Use and Habitation – have been omitted from the CC Use gives the right to receive, out of the fruits of another’s property, whatever may be sufficient for the needs of the usuary and of his family, even should the latter increase. Habitation gives to the person having this right the authority to occupy in another’s house the apartment necessary for himself and for the members of his family. Extent of Usufruct: Includes both jus utendi and jus fruendi Preservation of form and substance – preservation not only of the material of which the object is made up, but also the form which makes the thing suitable for the particular purpose for which the owner intends it. Abnormal usufruct – alteration is allowed (quasi-­‐
usufruct in Roman Law) Object of Usufruct: Rights – as long as the right has its own independent existence Servitude which has no existence independent of the tenements to which it attaches, cannot be the object of usufruct. Consumable things – there can be no right of usufruct independent of the right of ownership with respect to such things. If the thing should be consumable, the usufruct should be considered as on their value if they were appraised, or on an equal quantity and quality if they were not appraised. Unproductive things – usufruct can be created even on sterile or absolutely unproductive land, or things for mere pleasure, such as promenades, statues or paintings, even if they do not produce any utility. 3 fundamental rights appertaining to ownership: 1) Jus disponendi – remains with naked owner 2)
3)
Jus utendi – usufruct Jus fruendi – usufruct B. Historical Considerations 2 Types of Servitudes under Roman Law 1) Personal – attaches to persons §
Operae servorum – on slaves; first to be abolished §
Usufructus – general usufruct; 3 bundles of rights (right to use or enjoy, to own fruits, and to possess) à last remaining form of personal servitude under Roman Law §
Usus – right to receive out of the fruits of another’s property; abolished §
Habitation – right to occupy in another’s house the apartment necessary for the usufructuary and his family; abolished 2) Real or Praedial – attaches to real property C.
Characteristics of Usufruct Essential Characteristics: 1) It is a real right 2) Of temporary duration 3) To derive all advantages from the thing due to normal exploitation Natural Characteristics: 1) Usufructuary must preserve the form or substance of the thing §
Preservation is a natural requisite, not essential because the title constituting it or the law may provide otherwise §
Substance is destination and value of the thing §
Reason for preserving form and substance – -­‐
To prevent extraordinary exploitation; -­‐
To prevent abuse, which is frequent; -­‐
To prevent impairment. 2) Usufruct is extinguished by the death of the usfructuary §
Natural because a contrary intention may prevail D. Usufruct distinguished from Lease and from Servitude Usufruct v. Lease Basis By the nature of the right By the creator of the right By the cause By the extent of enjoyment Usufruct Always a real right Owner Passive owner who allows the usufructuary to enjoy the thing Generally covers all the utility of De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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By the origin As regards repairs and taxes which the thing is capable May be created by law, by will of the parties, or by prescription Pays for ordinary repairs and taxes on the fruits May only be created by the will of the parties Generally not borne by a lessee Usufruct v. Servitude Basis As to the object By the extent or enjoyment Usufruct May involve real or personal property Covers all the uses of the thing Servitudes May only involve real property Limited to a particular use Similarities between Usufruct and Servitude: 1) Both are real rights, whether registered or not. 2) Both rights may be registered, provided that the usufruct involves real property. All easements of course concerns real property. 3) Both may ordinarily be alienated or transmitted in accordance with the formalities set by law. E.
c.
Classes of Usufruct 1.
By origin 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. a.
Voluntary Voluntary – that created by the will of private persons, either: 1) By act inter vivos – such as contracts and donations §
By alienation of the usufruct §
By retention of the usufruct §
Where a usufruct is constituted inter vivos and for valuable consideration, the contract is unenforceable unless in writing 2) By act mortis causa – such as testament b.
dominion, usufruct and administration. FC. Article 226. The property of the unemancipated child earned or acquired with his work or industry or by onerous or gratuitous title shall belong to the child in ownership and shall be devoted exclusively to the latter's support and education, unless the title or transfer provides otherwise. The right of the parents over the fruits and income of the child's property shall be limited primarily to the child's support and secondarily to the collective daily needs of the family. Query – Is there still a legal usufruct under the FC? à YES, but in a limited manner. The right of the parents over the fruits and income of the child’s property shall be limited primarily to the collective daily needs of the family. Under Old CC, there were 2 legal usufructs: 1) Lifetime usufruct of surviving spouse over the estate of the dead spouse – surviving spouse is not a legal heir; no one inherits as long as the remaining spouse is alive. Under the New CC, surviving spouse is a legal heir (forced heir) 2) Usufruct of parent Legal Legal – that provided by law such as the usufruct of parents over the property of their unemancipated children 321 CC v. 226 FC à 226 repealed 321 Article 321. CC The property which the unemancipated child has acquired or may acquire with his work or industry, or by any lucrative title, belongs to the child in ownership, and in usufruct to the father or mother under whom he is under parental authority and in whose company he lives; but if the child, with the parent's consent, should live independently from them, he shall be considered as emancipated for all purposes relative to said property, and he shall have over it Mixed Mixed – or by prescription (but long time possession usually creates ownership), created both by law and the acts of persons Ex: I possessed in good faith a parcel of land which really belonged to another. Still in good faith, I gave in my will to X the naked ownership of the land and Y the usufruct. In due time, Y may acquire the ownership of the usufruct by acquisitive prescription. 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. Will of the parties prevails – the rights and duties of the usufructuary provided by law may be modified or eliminated by the parties. Authority to alienate – title constituting the usufruct may validly authorize the usufructuary to alienate the thing itself held in usufruct. If the usufructuary is authorized to alienate the thing in case of necessity, it is the usufructuary who determines the question of necessity. 2.
By person enjoying right of usufruct Article 564. Usufruct may be constituted on the whole or a part of the fruits of the thing, in favor of one more persons, simultaneously or successively, and in every case from or to a certain day, purely or conditionally. It may also be constituted De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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on a right, provided it is not strictly personal or intransmissible. a.
b.
Multiple – several usufructuaries enjoy i.
Simultaneous – at the same time (there can be 100 usufructs at once) ii.
Successive – one after the other 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. Article 863. A fideicommissary substitution by virtue of which the fiduciary or first heir instituted is entrusted with the obligation to preserve and to transmit to a second heir the whole or part of the inheritance, shall be valid and shall take effect, provided such substitution does not go beyond one degree from the heir originally instituted, and provided further, that the fiduciary or first heir and the second heir are living at the time of the death of the testator. Article 869. A provision whereby the testator leaves to a person the whole or part of the inheritance, and to another the usufruct, shall be valid. If he gives the usufruct to various persons, not simultaneously, but successively, the provisions of Article 863 shall apply. If usufruct is by donation, ALL donees must be alive. (756) Fiduciary or first heir and the second heir must be alive at the time of the death of the testator. (863) If by testamentary succession, there must be only 2 successive usufructuaries, and both must be alive or at least already conceived at the time of the testator’s death. (869) By object of usufruct Article 564. Usufruct may be constituted on the whole or a part of the fruits of the thing, in favor of one 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. a.
b.
Simple – only one usufructuary enjoys Limitation on successive usufruct: 3.
Right to receive present or future support cannot be the object of the usufruct. ii.
Must not be strictly personal or intransmissible. Usufruct over a real right is by itself a real right. Things Normal – involves non-­‐consummable things where the form and substance are preserved Abnormal or irregular Article 574. Whenever the usufruct includes things which cannot be used without being consumed, the usufructuary shall have the right to make use of them under the obligation of paying their appraised value at the termination of the usufruct, if they were appraised when delivered. In case they were not appraised, he shall have the right to return at the same quantity and quality, or pay their current price at the time the usufruct ceases. May be on consumables (ex: food) But must be replaced with equal quantity if not appraised Must be considered as on their value May also be on non-­‐consummables that gradually deteriorate by use (ex: furniture or car) In reality, the usufruct is converted into a simple loan. Not upon the consumable things themselves which are delivered to the usufructuary, but upon the sum representing their value or upon a quantity of things of the same kind and quality. The usufructuary, in effect, becomes the owner of the things in usufruct, while the grantor becomes a mere creditor entitled to the return of the value or of the things of the same quantity and quality. 4.
By extent of the usufruct Article 564. Usufruct may be constituted on the whole or a part of the fruits of the thing, in favor of one 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. a.
Rights i.
i.
ii.
As to the fruits Total – all consumed by the usufruct Partial – only on certain aspects of the usufruct’s fruits 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. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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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. F.
b.
As to object Singular – only on particular property of the owner ii.
Universal – pertains to the whole property; 1.
Universal usufruct subject to provisions of: 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 the debts exceeding the value of the property donated, unless a contrary intention clearly appears. 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. The ususfructuary has to pay for the debts of the naked owner as earlier stipulated. If there are no stipulations, the usufructuary has to pay only when the usufruct has been made in fraud of creditors. 5.
i.
a.
b.
Pure – no terms or conditions Conditional – either suspensive or resolutory c. With a term or period i.
Ex die – from a certain day ii.
In diem – up to a certain day iii.
Ex die in diem – from a certain day up to a certain day Fruits consist of natural, industrial and civil 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. Rights of Usufructuary: Right to enjoy the property to the same extent as the owner, but only with respect to its use and the receipt of its fruits. With respect to the use of property, he has the right to receive from the thing all the service or benefit that it can give. Usufructuary cannot extract products which do not constitute fruits because he is bound to preserve the form and substance of the thing. Ex: dividends from shares of a corporation, whether in the form of cash or of stock dividends. Usufructuary rights may be transferred, assigned or otherwise disposed of by the usufructuary. Not exempt from execution and can be sold at public auction. ii.
By the terms of usufruct Article 564. Usufruct may be constituted on the whole or a part of the fruits of the thing, in favor of one 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. Right to possess and enjoy the thing itself, its fruits and accessions As to the thing and its fruit a.
i.
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. Rights of Usufructuary As to hidden treasure, usufructuary is considered a stranger 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. Usufructuary is a stranger thus he has no share. Article 438. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-­‐half thereof shall be allowed to the finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure. If the things found be of interest to science of the arts, the State may acquire them at their just price, which shall be De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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divided in conformity with the rule stated. If usufructuary accidentally discovers hidden treasure, he is entitled to ½ as finder. iii.
Fruits pending at the beginning of usufruct 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. Fruits pending at the beginning of the usufruct: Belong to the usufructuary without reimbursement of expenses to the owners, but also without prejudice to 3rd persons Fruits already matured at the time of the termination of the usufruct, which ordinarily would have already been gathered by the usufructuary, may remain ungathered for no fault imputable to him, but because of malice or an act imputable to the naked owner or a 3rd person, or even due to force majeure or fortuitous event. No prejudice to the right of 3rd persons – if the fruits had been planted by a possessor in good faith, the pending crop expenses and charges shall be prorated between said possessor and the usufructuary. Fruits pending at its termination: Belong to the naked owner The owner shall reimburse to the usufructuary ordinary cultivation expenses from the proceeds of the fruits (not to exceed the value of the fruits) Rights of innocent 3rd parties should not be prejudiced. iv.
Civil fruits Article 569. Civil fruits are deemed to accrue daily, and belong to the usufructuary in proportion to the time the usufruct may last. 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 or 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. There is NO prorating of natural or industrial fruits. Rule as to certain rights (rent, pension, benefits) Accrue proportionately to the naked owner and usufructuary, for the time the usufruct lasts. This article applies whether or not the date of distribution is fixed because this after all is the usual state of things. Example for rents – If A gives B the usufruct of A’s land, and A’s land is being rented by C, each payment of rent shall go to B for the duration of the usufruct, each payment being considered as part of the proceeds of the property. v.
To enjoy any increase through accessions and servitudes, including products of hunting and fishing 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 benefits inherent therein. Reason – the usfructuary, as a rule, is entitled to the entire jus fruendi and entire jus utendi. b.
Right to lease the thing 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. Effect of the transfer of right: The transfer or lease of the usufruct does NOT terminate the relation of the usufructuary with the owner. Usufruct does NOT terminate upon the death of the transferee, but it terminates upon the death of the usufructuray who made the transfer. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Alienation of thing in usufruct: Usufructuary, not being the owner, CANNOT alienate or dispose of the objects included in the usufruct. He cannot renounce a servitude in favor of the tenement in usufruct; neither can he mortgage or pledge the thing, even if they constitute stocks or bonds. Right of usufruct is sometimes converted into a right of ownership, and the usufructuary may dispose of the things in the ff. cases: When the things are consumable (574); When the things by their nature are intended for sale, such as the merchandise in a commercial establishment; and When the things, whatever their nature, are delivered under appraisal as equivalent to their sale Sale of future crop – if the usufruct terminates before the harvest, the legal consequences of the sale are: Valid sale – owner is entitled to receive the price from the vendee If price has been paid in advance to the usufructuary, he or his estate must deliver it to the owner. Alienation of Legal Usufruct Valverde – only voluntary usufructs can be alienated under this article because legal usufructs are created by law for particular persons in view of certain relations and therefore cannot be enjoyed by others who do not have such relations. Manresa and others – while the usufruct of the surviving spouse under the old CC could be alienated, that of the parents over the property of unemancipated children could not be transferred because it is affected by important obligations in favor of said children. General rule – the lease should be for the same period as the usufruct Exception – leases of rural lands in which case the lease continues for the remainder of the agricultural year It is the usufructuary and not the naked owner who has the right to choose the tenant. (Fabie v. David) 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 lessee. Leases by owners – a lease executed by the owner before the creation of the usufruct is not extinguished by such usufruct. Lease by usufructuary – the usufructuary is entitled to receive such rents only up to the time of the expiration of the usufruct, if the lease still subsists after the termination of the usufruct. The rents for the remaining period of the lease will belong to the owner. i.
Limitations May be leased even without the consent of the owner; but no alienation, mortgage or pledge. Future crop may be sold but such sale would be void if not ratified by the owner. The buyer’s remedy is to recover from the usufructuary. If things are consumables or were appraised when delivered, the usufructuary can dispose of them. As owner of the right of usufruct, the usufructuary may then do any act of ownership upon it. But once done, it cannot be taken back. Only voluntary usufruct can be alienated. ii.
Liability of the usufructuary-­‐lessor Article 590. A usufructuary who alienates or leases his right of usufruct shall answer for any damage which the things in usufruct may suffer through the fault or negligence of the person who substitutes him. Liable for the act of the substitute. If there’s a sub-­‐usufructuary, it is still the usufructuary who is liable to the owner. Liability is founded upon the duty to preserve the form and substance of the thing in usufruct. iii.
Exceptions of right of leasing the thing Legal usufructs cannot be leased. Caucion juratoria (lease would show that the usufructuary does not need the property badly) Case: Fabie is the administratix and the usufructuary of the premises, which Ngo Soo is leasing. Fabie instituted an action of unlawful detainer against Ngo Soo claiming that she had the right to choose who the tenants would be and as so, she can choose herself to be the tenant since she had already refused the renewal of the present lease agreement. The absolute owner of the premises intervened in this case claiming that Fabie was only a usufructuary of the income of the premises. The case brought to the SC is not decided on the merits and the issue revolves around the question as who is De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Property Reviewer
entitled to administer the property subject matter, and who should be the tenant, and the conditions of the lease. The case is remanded after the Court determined that after resorting to the will of the former owner, the stipulation of the parties, and a final judgment in another civil case, the usufructuary has the right to administer the property in question. All the acts of administration were vested in the usufructuary. As long as the property is properly conserved and insured, the owner have no cause for complaint, and his right in that regard is fully protected by the terms of the stipulation and the judgment of the court in the civil case. To permit him to arrogate to himself the privilege to choose the tenant, and to dictate the conditions of the lease would be to place the usufructuary entirely at his mercy – that is, it would place the usufructuary in the absurd situation of having a certain indisputable right without the power to protect, enforce and fully enjoy it. Therefore, as corollary to the right of the usufructuary to all the rent, to choose the tenant, and to fix the amount of the rent, she necessarily has the right to choose herself as the tenant thereof; and, as long as the obligations she had assumed towards the owner are fulfilled. (Fabie v. Gutierrez David) c.
Right to improve the thing – inures to the benefit of the naked owner Article 579. The usufructuary may make on the property held in usufruct such useful improvements or expenses for mere pleasure as he may deem proper, provided he does not alter its form or substance; but he shall have no right to be indemnified therefor. He may, however, remove such improvements, should it be possible to do so without damage to the property. Whenever the usufructuary can remove the improvements without injury to the property in usufruct, he has the right to do so, and the owner cannot prevent him from doing so even upon payment of their value. This right does not involve an obligation – if the usufructuary does not wish to exercise it, he cannot be compelled by the owner to remove the improvements. Usufructuary may demolish or destroy the improvement, such as a building, provided he leaves the land as it was before the construction of such improvement. This right to remove improvements can be enforced only against the owner, not against a purchaser in good faith to whom a clean title has been issued. There is NO indemnity – if the improvements made by the usufructuary were subject to indemnity, we would have a dangerous and unjust situation in which the usufructuary could dispose of the owner’s funds, by compelling him to pay for improvements which perhaps he would not have made. Registration of improvements – to protect usufructuary against 3rd persons While a possessor in good faith is entitled to a refund for useful improvements, a usufructuary is not. Article 580. The usufructuary may set off the improvements he may have made on the property against any damage to the same. Compensation of values and not of rights and obligations It is necessary that the improvements should have increased the value of the property, and that the damages are imputable to the usufructuary. Increase in value and the amount of damages are set off against each other. If the damages exceed the increase in value, the difference should be paid by the usufructuary as indemnity. If the increase in value exceeds the damages, and the improvements are of such nature that they can be removed without injury to the thing in usufruct, the settlement of the difference must be agreed upon by the parties. If the improvements cannot be removed without injury, the excess in value accrues to the owner. 2.
As to the legal right of usufruct itself a.
Right to mortgage right of usufruct 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. Does not include parental usufruct because of personal and family considerations. Usufruct cannot pledge or mortgage the thing itself because he does not own the thing. 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. b.
Right to alienate the usufruct except in purely personal usufructs or when title constituting it prohibits the same – parental usufruct is inalienable De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Usufruct
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G. Rights of the naked owner 1. At the beginning of the usufruct (see obligations of usufructuary at the beginning of the usufruct) 2. During the usufruct a. Retains title to the thing or property b. He may alienate the property – he may not alter the form or substance of the thing; nor do anything prejudicial to the usufructuary It may be a private document because nothing is provided by law as to its form. But when immovables are involved, public instrument is prescribed to affect 3rd persons. (1358) Effect of failure to make inventory – such failure does not affect the rights of the usufructuary to enjoy the property and its fruits; but a prima facie presumption arises that the property was received by the usfructuary in good condition, and even if he is already in possession, he may still be required to make an inventory. (under the Argentine Code as accepted under our law) i.
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. He may construct buildings, make improvements and plantings. Provided: (1) the value of the usufruct is not impaired and (2) the rights of the usufructuary are not prejudiced H. Obligations of Usufructuary 1. At the beginning of usufruct or before exercising the usufruct are easily lost or deteriorated. ii.
c.
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. These requirements are NOT conditions precedent to the commencement of the right of the usufructuary but merely to the entry upon the possession and enjoyment of the property. a.
Exceptions to the requirement of inventory ∗ No one will be injured thereby 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. ∗
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b.
Title constituting usufruct excused the making of inventory Title constituting usufruct already makes an inventory To give a bond for the faithful performance of duties as usufructuary Purpose – to insure faithful compliance of the duties of the usufructuary (whether required during or at the end of the usufruct – like the duty to return) Form of security – 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. i.
To make inventory The law does not require the concurrence of the owner in the making of the inventory. It is sufficient for the usufructuary to notify him and he may attend or not, personally or through an authorized representative. The expenses for the making of the inventory are borne by the usufructuary because it is his obligation to make the inventory and it is a prerequisite to his entry upon the enjoyment of the property. Requisites ∗ Immovables must be described ∗
Movables appraised because they No bond are required in the following ∗ No prejudice would result (585) ∗ Usufruct is reserved by donor – gratitude on the donee’s part demands that the donor be excused from filing the bond 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. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Title constituting usufruct excused usufructuary If usufructuary takes possession under a caucion juratoria 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. The security given may be by a personal bond, a pledge, or a mortgage. It is only by way of exception that a caucion juratoria is allowed, and only under the special circumstances mentioned in this article: Upon petition of the usufructuary; and According to judicial order It is permitted as a matter of common humanity. A usufructuary under this can neither alienate his right nor lease the property, for that would mean that he does not need the dwelling or the implements and furniture. Requisites before this is allowed: 1) Proper court petition 2) Necessity for delivery of furniture, implements or house included in the usufruct 3) Approval of the court 4) Sworn promise ii.
Right of the naked owner: Potestative right; if he does not wish to exercise it, he may deliver the property to the usufructuary. Delivery, however, does not mean a renunciation of the right to demand security. He shall have the ff. options: Receivership of realty, sale of movables, deposit of securities, or investment of money; or Retention of the property as administrator. Net products less administration expenses fixed by agreement or by the Court, shall be delivered to the usufructuary. Right of the usufructuary – he may alienate his right over the property which he does not possess in the same form as he holds it, without prejudice to the right of the transferee to give the required security. Retroactivity – upon giving the security, the usufructuary will be entitled to all the benefits accruing since the time when he should have begun to receive them. Effect of failure to give bond 2.
During the usufruct a.
Effect of filing a bond 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. iii.
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 certificates 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. To take care of the thing like a good father of a family Article 589. The usufructuary shall take care of the things given in usufruct as a good father of a family. When damages are caused to the property by the fault or negligence of the usufructuary, the naked owner need not wait for the termination of the usufruct before bringing the action to recover proper indemnity. Article 610. A usufruct is not extinguished by bad use of the De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Usufruct
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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. The bad use of a thing, which causes considerable injury, entitles the owner to demand the delivery and administration of the thing. The bad use must cause considerable injury, not to the thing, but to the owner. When there’s sufficient security, this can seldom happen, because there can be no injury to the owner who can recover on the security. If there’s no security, and the usufructuary does not have other property, the resulting prejudice is easy to see. The exercise of this remedy does NOT extinguish the usufruct. b.
To undertake 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. Requisites of ordinary repairs: 1) That the deteriorations or defects arise from the natural use of the thing; 2) That the repairs are necessary for the preservation of the thing. The usufructuary is bound to pay only for the repairs made during the existence of the usufruct. He cannot be obliged to pay for the expenses for repairs made before he enters upon the enjoyment of the thing. If the defects existed already at the time the usufruct began, the obligation to defray the ordinary repairs falls upon the owner. When the ordinary repairs are due to defects caused by the fault of the usufructuary he cannot exempt himself from liability by renouncing the usufruct. He will still be held liable for damages under the general rule of liability for fault or negligence. But if the defects existing before the renunciation are occasioned by the ordinary use of the thing, the usufructuary may exempt himself from making the repairs by returning to the owner the fruits received during the time that the defects took place. Remedy if usufructuary does not make the necessary repairs – if 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.
To notify owner of need to undertake 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. i.
Concept of extraordinary repairs Extraordinary repairs are for the account of the owner but the usufructuary should notify the owner of the urgent need. Kinds: 1) Those cause by exceptional circumstances, whether or not they are necessary for the preservation of the thing; 2) Those caused by the natural use of the thing, but are not necessary for its preservation. 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. ii.
Naked owner obliged to undertake them but when made by owner, usufructuary pays legal interest on the amount while usufruct lasts Reason why naked owner pays for extraordinary repairs – it is his property Legal repairs must be paid by the usufructuary on the amount. It is the usufructuary who benefits by the extraordinary repairs, which restore the thing to its condition of usefulness. iii.
Naked owner cannot be compelled to undertake extraordinary repairs ∗ If indispensible and owner fails to undertake extraordinary repairs may be made by usufructuary De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Usufruct
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The expenses for extraordinary repairs are borne by the owner but the usufructuary cannot compel him to make such repairs, because the law does not impose such repairs as an obligation of the owner. Neither is the usufructuary bound to make such repairs if the owner chooses not to make them; it is optional for the usufructuary to make such repairs or not. The usufructuary who has made the extraordinary repairs necessary for preservation, is entitled to recover from the owner the increase in value which the tenement acquired by reason of such works. Usufructuary may retain until he is paid. Requisites before usufructuary is allowed to make extraordinary repair: 1) There must be due notification to the naked owner of the urgency – if it is not urgent, there is no obligation to give notice. 2) The naked owner failed to make them 3) The repair is needed for preservation d.
To pay for annual charges and taxes on the fruits 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. Case: Through lease applications, Samar Mining was allowed to construct roads for its operations on lands owned by the public. It constructed a road thereon, which road was assessed for real estate taxes. It was considered taxable by the Board as it falls under the term “improvements.” No real estate taxes on the road should be assessed against Samar Mining. It is well settled that a real tax, being a burden upon the capital, should be paid by the owner of the land and not by a usufructuary. There is no merit in the contention of distinguishing public lands into alienable and indisposable. All properties owned by the government, without any distinction, are exempt from taxation. (Board of Assessment Appeals of Zamboanga del Sur v. Samar Mining Company, Inc.) e.
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. Annual charges and taxes are to be paid by the usufructuary only when they can be considered as a lien upon the fruits. (Sanchez Roman) They cannot include those levied upon the tenement itself, but only those levied upon the persons in possession or enjoyment thereof. 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. Usufructuary must give notice to the owner of acts which may prejudice the rights of ownership, if urgent repairs are needed and if an inventory is to be made. f.
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. To shoulder the costs of litigation re usufruct Article 602. The expenses, costs and liabilities in suits brought with regard to the usufruct shall be borne by the usufructuary. Reason: the suits affect usufructuary’s rights g.
Land tax is a burden upon the capital, that is, upon the real value of the property, and under the present article it should be paid by the owner. If paid by the owner – he is entitled to interest on the payment Reason: the usufructuary is enjoying the property If paid by the usufructuary – he is entitled to reimbursement at termination with a right of retention. To notify owner of any act detrimental to ownership To answer for fault or negligence of alienee, lessee or agent of usufructuary Article 590. A usufructuary who alienates or leases his right of usufruct shall answer for any damage which the things in usufruct may suffer through the fault or negligence of the person who substitutes him. (498) The usufructuary is made liable for the acts of the substitute. While the substitute answers to the usufructuary, the usufructuary answers to the naked owner. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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I.
At the time of termination of the usufruct 1. To deliver the thing in usufruct to the owner in the condition in which he has received it, after undertaking ordinary repairs Exception: abnormal usufruct – return the thing of same kind, quantity and quality; if with appraised value, must return value appraised J.
Special Cases of Usufruct 1.
Usufruct over a pension or periodical income 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 or 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. Each payment shall be considered as fruits. The distribution of benefits (dividends) of industrial or commercial enterprises shall also be deemed fruits. Apportionment shall be on the basis of the ordinary rules governing civil fruits. 2.
Usufruct of property owned in common 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. The usufructuary takes the place of the owner as to: 1) Management; 2) Fruits; and 3) Interest Effect of partition: 1) The right of the usufructuary is not affected by the division of the property in usufruct among the co-­‐owners. 2) After partition, the usufruct is transferred to the part allotted to the co-­‐owner. 3.
Usufruct constituted on a flock or herd of 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. On sterile stock – same rules on consumable property govern (i.e. replacement upon termination) On fruitful stock – Where there’s obligation to replace: (1) If some animals die from natural causes; (2) Or if some animals are lost due to rapacity of beasts of prey Even though the cause is fortuitous, there is the duty to replace. This is because the loss is more or less expected and natural. Replace ordinary losses with the young. Where there’s no obligation to replace: (1) if there is a total loss of animals because of some unexpected or unnatural loss (like contagious disease or any other uncommon event, provided the usufructuary has no fault); (2) if there is a partial loss If all perish, the usufructuary should deliver the remains to the owner. If a part of the stock perishes, the usufruct subsists on the remainder. 4.
Usufruct over fruit bearing trees and sprout and woodlands 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. This is a rare application now to forest lands because of the Regalian Doctrine governing natural resources under the Constitution. There are private plantations in the Philippines. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Usufruct
Property Reviewer
The usufructuary can use the ff: Dead trunks and those cut off or uprooted by accident. Usufructuary must replace dead trees, unless it would be impossible or burdensome, in which case he may demand that the owner clear the land. Can make usual cuttings that owner used to do. Can also cut the trees that are not useful 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. A is a usufructuary of trees and shrubs belonging to B. as a result of an earthquake, many of the trees and shrubs disappeared or were destroyed. What are A’s rights and obligations? If it is impossible or too burdensome to replace them, the usufructuary has an option. He: May use the trunks but should replace them; Or may leave the dead, fallen, or uprooted trunks at the owner’s disposal, and demand that the latter remove them and clear the land. If it is slightly burdensome to replace them, the usufructuary must replace them (whether he uses the dead trunks or not), and he cannot demand clearance of the land by the owner. 5.
Usufruct on a right of action 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. Deals with the right to recover by court action: 1) Real property 2) Personal property 3) Real right over real or personal property The usufructuary can demand from the owner: 1) Authority to bring the action (usually a special power of attorney) 2) Proofs needed for a recovery Institution of the action – the action may be instituted in the usufructuary’s name, for being the owner of the usufruct, he is properly deemed a proper party in interest If the purpose is the recovery of the property or right, he is still required under 578 to obtain the naked owner’s authority. If the purpose is to object to or prevent disturbances over the property, no special authority from the naked owner is needed. 6.
Usufruct on mortgaged property 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. Usufruct of mortgaged immovable (particular usufruct) A mortgaged his land to B and gave its usufruct to C. Since A did not pay his debt, B foreclosed the mortgage and at the foreclosure sale D bought the property. Can C demand anything from A? à Yes, because A is held by the law liable for the loan. When the usufruct is universal As when the usufruct involves the entire patrimony, some object of which are mortgaged, the more applicable article is 598. If there is no stipulation for payment by the usufructuary is made, and the usufruct was not created to defraud creditors, the usufructuary has NO duty to payy off the debt. The usufruct may mortgage the usufruct itself. In such a case, it is the usufructuary who should pay his own debt. This article can also apply, by analogy, to a pledged movable, provided that the movable is in the usufructuary’s possession, since in the law of pledge, it is essential that the thing pledged be placed in the possession of the creditor, or a 3rd person by common agreement. 7.
Usufruct over an entire patrimony 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. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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90
Usufruct
Property Reviewer
Application: 1) If the usufruct is a universal one 2) And the naked owner – Has debts or is obliged to make periodical payments (whether or not there be known capital) General rule: the usufructuary is NOT liable for the owner’s debts. Exceptions: 1) When it is so stipulated; in which case – The usufructuary shall be liable for the debt specified. If there is no specification, he is liable only for debts incurred by the owner before the usufruct was constituted. 2) When the usufruct is constituted in fraud of creditors Limitation – in no case shall the usufructuary be responsible for debts exceeding the benefits under the usufruct. (except when the contrary intention appears) 8.
Usufruct over deteriorable property 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. shall have the right to make use of them under the obligation of paying their appraised value at the termination of the usufruct, if they were appraised when delivered. In case they were not appraised, he shall have the right to return at the same quantity and quality, or pay their current price at the time the usufruct ceases. If the thing is appraised at delivery, the usufructuary must pay their appraised value at the termination of the usufruct. If they were not appraised, he must return the same kind and quality or pay the current price at the expiration of the usufruct. Simple loan K. 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. 1.
Abnormal usufruct Nature of deterioration – In the natural use of things, there may occur certain defects calling for repairs for their preservation, independent of the deterioration produced by age and time which slowly and without appreciable effects changes the aspect of the things from day to day. Liability to indemnify: It is sufficient if the usufructuary returns them in the condition in which they may have been found at the time of the expiration of the usufruct. The law renders the usufructuary liable only when he causes deterioration by his fraud or negligence. If usufructuary does not return the things upon the expiration of the usufruct, he should pay an indemnity equivalent to the value of the things at the time of such expiration. 9.
Usufruct over consumable property Article 574. Whenever the usufruct includes things which cannot be used without being consumed, the usufructuary Death of usufructuary – natural end; Exceptions: a.
In multiple usufructs – it ends at the death of the last survivor Article 611. A usufruct constituted in favor of several persons living at the time of its constitution shall not be extinguished until death of the last survivor. If simultaneously constituted, all the usufructuaries must be alive (or at least conceived) at the time of constitution. If successively constituted, (1) if by virtue of donation – all the donees-­‐usufructuaries must be living at the time of the donation; (2) if by will – there should only be 2 successive usufructuaries and both must have been alive at the time of testator’s death. b.
If the period is fixed by reference to the life of another or there is a resolutory condition – the right is transmitted to the heirs of the usfructuary until the expiration of the term or the fulfillment of the condition. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
91
Usufruct
Property Reviewer
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. A gave B his land in usufruct until C becomes 40yrs. old. A constituted the usufruct when C was only 20yrs. old. This means that the usufruct should last for 20yrs even if C dies before attaining the age of 40. If therefore C dies at the age of 30, the usufruct in B’s favor generally continues. c.
When a contrary intention clearly appears A period or a resolutory condition is stipulated, and the usufructuary dies before the expiration of the period or the happening of the resolutory condition, is the usufruct extinguished or must it continue to the end of the period or the fulfillment of the condition? 1st view: usufruct is personal and it CANNOT be extended beyond the lifetime of the usufructuary. (Sanchez Roman and SC) 2nd view: usufruct SUBSISTS and is transmitted to the heirs of the usufructuary because the will of the parties must be respected. (Manresa) 3rd view: usufruct will NOT be terminated by the death of the usufructuary ONLY when it is expressly stipulated that it shall continue even after such death until the expiration of the period or the happening of the condition agreed upon. (Valverde and Scaevola) 2.
Expiration of period or fulfillment of resolutory condition imposed on usufruct by person constituting the usufruct Cases: The parties called it a “barter” of their properties, although they retained the possession of their own respective properties. The residential lot “bartered” by one of the parties was stipulated to be subject to a resolutory condition. Upon fulfillment of the condition, the party to whom the residential lot was “bartered” to sought to reclaim possession over the land. The nature of the contract is determined by the law and not what the parties stipulate. Here, with the material possession being the only one transferred, all that the parties acquired was the right of usufruct which in essence is the right to enjoy the property of another. In this case, the action by the one reclaiming possession has not yet prescribed because a usufruct may be constituted by the parties for any period of time and under such conditions as they may deem convenient and beneficial subject to the provisions of the CC on Usufruct. The manner of terminating or extinguishing the right of usufruct is primarily determined by the stipulations of the parties which in this case is the happening of the event agreed upon. Art, 579 is applied here with the effect that the happening of the resolutory condition extinguishes the right of usufruct of the parties and each is entitled to a return of his property. (Baluran v. Navarro) www A Presidential Proclamation gave MSBF usufructuary rights over a segregated portion (7 has) of NHA’s land. MSBF in turn, leased this portion to BGC (Bulacan Garden). A Memorandum Order granted NHA to commercialize its property and sell it to the public. Therefore, NHA asked BGC to vacate the property it was leasing. The case is remanded because according to the Presidential Proclamation, which was the title constituting the usufruct, it stated that the 7 ha. area to be segregated shall be determined by a future survey. This meant that MSBF was to choose the location of the 7 ha. area under its usufruct. Since in this case, both the NHA and MSBF conducted their own survey of what the 7 ha. should be, they are now both ordered to conduct it jointly. Concerning the rights of BGC, a usufruct may be constituted for a specified term and under such conditions as the parties may deem convenient subject to the legal provisions on usufruct. A usufructuary may lease the object held in usufruct. Thus, the NGA may not evict BGC if the portion leased to it by MSBF is within the 7 ha. area held in usufruct by MSBF. The owner of the property must respect the lease entered into by the usufructuary so long as the usufruct exists. However, the NHA has the right to evict BGC if BGC occupied a portion outside of the 7 ha. area. (NHA v. CA, Bulacan Garden Corp.) a.
In favor of juridical persons – period cannot exceed 50yrs. 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. b.
Time that may elapse before a 3rd person attains a certain age, even if the latter dies before period expires – unless granted only in consideration of his existence 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. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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92
Usufruct
Property Reviewer
3.
Merger of rights of usufruct and naked ownership in one person H was the usufructuary of land owned by X. x dies, leaving in his will, the naked ownership of the land to H. the usufruct is extinguished because now H is both the naked owner and the usufructuary. 4.
Renunciation of usufruct Waiver means a voluntary surrender of the rights of the usufructuary, made by him with intent to so surrender them 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. When insurance premium paid by owner and usufructuary (par. 1) ∗ If owner rebuilds, usufruct subsists on new building ∗ If owner does not rebuild interest upon insurance proceeds paid to usufructuary ii.
When the insurance taken by the naked owner only because usufructuary refuses to contribute to the premium (par. 2) ∗ Owner entitled to insurance money (no interest paid to usufructuary) ∗ If he does not rebuild, usufruct continues over remaining land and/or owner may pay interest on value of both materials and land (607) ∗ If owner rebuilds, usufruct does not continue on new building, but owner must pay interest on value of land and old materials iii.
When insurance taken by usufructuary only depends on value of usufructuary’s insurable interest ∗ Insurance proceeds goes to the usufructuary ∗ No obligation to rebuild ∗ Usufruct continues on the land ∗ Owner has not share in insurance proceeds a.
5.
Limitations i.
Must be express – tacit renunciation is not sufficient ii.
Does not need the consent of naked owner iii.
If made in fraud of creditors, wiaver may be rescinded by them through action under Article 1381 – accion pauliana Extinction or loss of property a. If destroyed property is not insured i.
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. i.
ii.
If building forms part of an immovable under usufruct – the usufruct continues over the land and the remaining materials If usufruct is on the building only ∗ If owner does not rebuild, usufruct continues over the land and materials (plus interests) ∗ If owner rebuilds, usufructuary must allow owner to occupy the land and to make use of materials; but the owner must pay interest on the value of both the land and the materials. b.
If destroyed property is insured before termination of the usufruct 6.
Termination of right of person constituting the usufruct Ex: usufructs constituted by a vendee a retro terminate upon redemption De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
93
Usufruct
Property Reviewer
7.
Prescription 2)
Adverse possession against the owner or the usfructuary. It is not the non-­‐use which extinguishes the usufruct by prescription, but the use by a 3rd person. There can be no prescription as long as the usfructuary receives the rents from the lease of the property, or he enjoys the price of the sale of his right. Covered cases: If 3rd party acquires ownership of thing or property in usufruct or right of ownership lost through prescription or right of usufruct not began within prescriptive period, or if there is a tacit abandonment or non use of thing held in usufruct for required period. 8.
What do not cause extinguishment of usufruct a.
Expropriation of thing in usufruct 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. If naked owner alone was given the indemnity, he has the option: 1) To replace with equivalent thing 2) Or to pay to the usufructuary legal interest on the indemnity – requires security given by the naked owner for the payment of the interest If both the naked owner and the usufructuary were separately given indemnity, each owns the indemnity given to him, the usufruct being totally extinguished. If usufructuary alone was given the indemnity, he must give it to the naked owner and compel the latter to return either the interest or to replace the property. He may even deduct the interest himself, if the naked owner fails to object. The bad use must cause considerable injury not to the thing, but to the owner. Court will determine if there’s considerable injury to the naked owner. c.
Usufruct over a building 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) 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. b.
Bad use of thing 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. Effect of bad use: 1) Entitles the owner to demand delivery and administration of the thing. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
94
Easements of Servitudes
Property Reviewer
Part 8. Easements of Servitudes A. Definition A real right + Burdens a thing with a prestation of determinate servitudes + for the exclusive enjoyment of one who is NOT an owner of a tenement A real right + By virtue of which the owner has to ABSTAIN from doing or ALLOW somebody else to do something to his property + for the benefit of another Encumbrance + Imposed upon an immovable + for the benefit of another immovable owned by another. DOMINANT ESTATE: immovable in favor of which the easement is established (the property which benefits) SERVIENT ESTATE: immovable that is subject to the easement (the property which must suffer the said servitude for the benefit of another) B. Essential Features of Easements/Real Servitudes/Paredial Servitudes 1. It is a REAL RIGHT – it gives an action in rem or real action against any possessor of servient estate Action in rem: an action against the thing itself, instead of against the person. Owner of the dominant estate can file a real action for enforcement of right to an easement 2.
Possession of the property remains in the servient owner, but the owner of the dominant estate enjoys a certain benefit. There exists a limitation on ownership: the dominant owner is allowed to enjoy or use part of the servient estate, or imposes on the owner a restriction as to his enjoyment of his own property. Use of the easement is also limited. 5.
It creates a relation between tenements No transfer of ownership, but a relationship is created, depending on the easement. 6.
It cannot consist in requiring the owner of the servient estate to do an act (servitus in faciendo consistere nequit) unless the act is accessory to a praedial servitude (obligation propter rem) Servient owner merely allows something to be done to his estate. EXCEPT Praedial servitudes: JUS TIGNI IMMITENDI: Right to place beams in an adjoining wall It is a right enjoyed over another property (jus in re aliena) – it cannot exist in one’s property (nulli res sua servit) When a dominant and servient estate have the same owner, an easement is extinguished. Separate ownership is a prerequisite to an easement. 3.
It is a right constituted over an immovable by nature (land and buildings), not over movables. (Article 613) Immovable: used in its common and not in the legal sense, meaning only property immovable BY NATURE can have easements. 4.
It limits the servient owner’s right of ownership for the benefit of the dominant estate. Right of limited use but no right to possess servient estate. Being an abnormal llimitation of ownership, it cannot be presumed. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
95
Easements of Servitudes
Property Reviewer
JUS ONERIS FERENDI: Right to support a building upon another’s wall 1)
2)
If servient estate is divided: Easement is not modified, and each of them must bear it on the part which corresponds to him. If dominant estate is divided: Each may use the easement in its entirety, without changing the place or making it more burdensome. There arise as many new dominant tenements as there are parts 11. It has permanence – once it attaches, whether used or not, it continues and may be used at anytime Perpetual: exists as long as property exists, unless it is extinguished. 7.
8.
Generally, it may consist in the owner of the dominant estate demanding that the owner of the servient estate refrain from doing something (servitus in non faciendo) or that the latter permit that something be done over the servient property (servitus in patendo), but not in the right to demand that the owner of the servient right to demand that the owner of the servient estate do something (servitus in faciendo) except if such act is an accessory obligation to a preadial servitude (obligation propter rem) It is inherent or inseparable from estate to which they actively or passively belong (Article 617) Easements are merely accessory to the tenements, and a “quality thereof.” They cannot exist without tenements. Such easements exist even if they are not expressly stated or annotated as an encumbrance of the titles. 9.
It is intransmissible – it cannot be alienated separately from the tenement affected or benefited Any alienation of the property covered carries with it the servitudes affecting said property. But this affects only the portion of the tenement with the easement, meaning the portions unaffected can be alienated without the servitude. 10. It is indivisible (Article 618) Relates only to the portion of the tenement affected by the servitudes. C.
Classification of Servitudes 1.
As to recipient of benefits a.
Real or Praedial The servitude exists for the benefit of a particular tenement. b.
Personal The servitude exists for the benefit of persons without a dominant tenement. Note that under Roman Law, usufruct together with usus habitatio and operae servorum were classified as personal servitude USUS HABITATIO: the right to reside in a house OPERAE SERVORUM: the right to the labor of slaves 2.
As to cause or origin a.
Legal – whether for public use or for the interest of private persons Once requisites are satisfied, the owner of the dominant estate may ask the Court to declare that an easement is created. E.g. Natural drainage of waters, Abutment of land, Aqueduct, etc. b.
Voluntary Created by the will of the owners of the estate through CONTRACT Created by an owner in A LAST WILL OR TESTAMENT, DONATION, ETC. *** There is no such thing as a JUDICIAL EASEMENT. The Courts cannot create easements, they can only declare the De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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96
Easements of Servitudes
Property Reviewer
existence of one, if it exists by virtue of the law or will of the parties. 3.
As to its exercise (Article 615) Important in determining prescription: only continuous and apparent easements can be created by prescription a.
Continuous Use is or may be incessant, without the intervention of any man b.
Although some easements seem to impose a positive prestation upon the owner of the servient estate, in reality, the primary obligation is still negative. E.g. Under Article 680: the owner of a tree whose branches extend over to a neighboring property is required to cut off the extended branches, but the real essence of the easement is the obligation NOT TO ALLOW the branches of the tree to extend beyond the land Used at intervals, and dependent upon the acts of man. 4.
Apparent Made known and continually kept in view by external signs that reveal the use and enjoyment of the same b.
Non-­‐apparent Show no external indication of their existence 5.
By the object or obligation imposed (Article 616) a.
Positive Imposes upon the owner of the servient estate the obligation of allowing something to be done, or doing it himself b.
Negative (prescription starts to run from service of notarial prohibition) Prohibits the owner of the servient estate from doing something which he could lawfully do if the easement did not exist. E.g. Negative Easement of Light and View: An opening is made on the wall of the dominant estate, and the easement consists of imposing upon the servient estate the obligation to not build anything that would obstruct the light. D. General Rules relating to Servitudes 1. Nulli res sua servi: No one can have a servitude over one’s own property 2. Servitus in faciendo consistere nequit: A servitude cannot consist in doing 4.
A servitude must be exercised civiliter – in a way least burdensome to the owner of the land 5. A servitude must have a perpetual cause Modes of Acquiring Easements As indication of its existence (Article 615) a.
Servitus servitutes esse non potes: There can be no servitude over another servitude Discontinuous Also important for purposes of prescription 3.
E.
Case: The road to the tuba saloon = voluntary easement. May be closed by owner to all, but no capricious exclusion of a certain person. Hacienda owner constructs road for its employees, and made the road accessible to general public. But employees used the road to get to a tuba saloon, and would get drunk there. The hacienda owner then decided to ban the saloon owner from using the road. Because the road was voluntarily created as a servitude by the owner, he may close it at his pleasure. But while the road is open, he may not capriciously exclude the owner of the tuba saloon from its use. (North Negros Sugar v. Hidalgo) 1.
By title – juridical act which gives rise to the servitude (e.g. law, donations, contracts or wills) Case: Right of way to Church side door = By prescription. Parcel of land on the edge of one of the walls of the church is being claimed by both the municipality and the church. The municipality was adjudged as owner having performed acts of ownership over the lot – building a flagstaff, a theater, cockpit, etc. BUT a right of way had been acquired because the Catholic faithful used the lot to enter the side door of the Church. The right to use the lot had been acquired by prescription, in view of the time that has elapsed since the church was built and dedicated to religious worship, during which period the municipality has not prohibited the passage over the land by De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
97
Easements of Servitudes
Property Reviewer
the persons who attend services. (Dumangas v. Bishop of Jaro) a.
Article 623: If easement has been acquired but no proof of existence of easement available, and easement is one that cannot be acquired by prescription, then – E.g. by oral contract or missing document. i.
May be cured by deed of recognition by owner of servient estate or -­‐ By affidavit or a formal deed acknowledging the servitude ii.
By final judgment -­‐ Owner of the dominant estate must file a case in Court to have the easement declared. -­‐ May prove the easement through other evidence e.g. testimony, photos b.
Article 624: Existence of an apparent sign considered a title Sign indicating the existence of a servitude between tenements = sufficient title to allow the easement to continue For purposes of alienation or division in co-­‐ownership, the easement continues UNLESS: §
A contrary stipulation is included in the title of conveyance, at the time the ownership is divided §
Sign of such easement is removed before the execution of the deed. Case: Owner of a camarin and a house situated in adjacent lots bequeathed said properties to different persons. The house had 4 windows facing the lot occupied by the camarin thus enjoying the easement of light and view. The lot where the camarin stood was however sold to an owner who wanted to build a two-­‐storey house thereon. The new owner was however prohibited from doing so, and mandated to respect the easement. Four windows = Existence of a sign + No contrary act or stipulation when ownership passed to another = Equivalent of title. No easement existed while the properties were still owned by the same owner, but upon her death and the transfer to two different heirs, who accepted the properties but did not oppose the easement thereon, such easement of light and view-­‐altius non tollendi was created. The easement of light and view necessarily goes together with an easement not to build higher (altius non tollendi). They are two sides of the same coin. While an easement of light and view is positive, that of altius non tollendi is negative. (Amor v. Florentino) 2.
By prescription REQUISITES: 1) Easement must be continuous and apparent. 2) Easement must have existed for 10 years. 3) NO NEED for good faith or just title. Case: Road or passageway from home to the market place was obstructed by the construction of a chapel. Although the road had been used for more than 20 years, since an easement of right of way is a discontinuous easement, it CANNOT be acquired by prescription because of the requirement of continuous or uninterrupted possession. JBL Reyes: The essence of this easement ("servidumbre de paso") lies in the power of the dominant owner to cross or traverse the servient tenement without being prevented or disturbed by its owner. As a servitude, it is a limitation on the servient owner's rights of ownership, because it restricts his right to exclude others from his property. But such limitation exists only when the dominant owner actually crosser, or passes over the servient estate; because when he does not, the servient owner's right of exclusion is perfect and undisturbed. Since the dominant owner cannot be continually and uninterruptedly crossing the servient estate, but can do so only at intervals, the easement is necessarily of an intermittent or discontinuous nature. (Ronquillo v. Roco) F.
Rights and Obligations of Owners of dominant and Servient Estates 1.
Right of owner of dominant estate Limited Jus Utendi: limited by the nature of the easement itself a.
To use the easement and exercise all rights necessary for the of it Article 625: Grants the owner of the dominant estate the right to use the principal easement, and all accessory servitudes. E.g. Easement of drawing water carries with it the easement of right of way to the place where water is drawn. Article 626: Grants the right to use the easement for all the needs of the dominant estate (if the easement is established in a general way) or for the purpose because of which it was De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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established (e.g. easement to draw water for irrigation, cannot be used to supply water to a factory). b.
To do at his expense, all necessary works for the use and preservation of the easement Article 627: Servient owner may make at his own expense any works necessary for USE and PRESERVATION of the servitude WITHOUT altering it or rendering it more burdensome. Necessity of the works determine extent of such works. Works must be executed in the manner least inconvenient to the servient owner, who cannot recover indemnity for the inevitable damages or inconveniences which may be caused thereby. c.
In a right of way, to ask for change in width of easement sufficient for needs Article 651: The needs of the dominant estate determine the width of the passage. The servitude may be modified after its establishment, depending upon the needs of the dominant tenement. Case: Petitioner seeks the widening of the road path through respondent’s property, alleging that his plant nursery business had prospered enough for him to require an automobile. The Court granted the modification of the easement stating that under the law, the needs of the dominant property 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. Petitioner should not be denied a passageway wide enough to accomodate his jeepney since that is a reasonable and necessary aspect of the plant nursery business. (Encarnacion v. CA) 2.
b.
Article 627(2): Notify the owner of the servient estate before making repairs and choosing the most convenient time and manner so as to cause the least inconvenience to the owner of the servient estate. c.
Not to alter easement or render it more burdensome Article 627: Owner of dominant estate may make repairs at his expense, but cannot alter the easement or make it more burdensome. Case: Planters of sugar cane established a right of way for the transportation of the cane to the milling central. Because the said planters could not deliver the quantity required, the Central entered into contracts with other planters, but still used the right of way to transport the additional sugar. Court allowed Central to use the right of way to transport the additional sugar. This did not make the easement more burdensome nor did it alter it. What is prohibited is extending the road or repairing it or depositing excavations outside the area. But the additional use produced no such effects. (Valderama v. North Negros) d.
To contribute to expenses of works necessary for use and preservation of servitude, if there are several dominant estates, unless he renounces his interest Article 628: The owners who benefit from a servitude must contribute to expenses to maintain and preserve such easement, in proportion to the benefit they respectively receive, and not in proportion to their value (presumed equal if there is no proof or agreement to the contrary). OR he may renounce his share to exempt himself from paying expenses. Obligations of the owner of dominant estate a. To use the easement for benefit of immovable and in the manner originally established Article 626: Right to use the easement for the benefit of the immovable originally contemplated, and in the manner originally established. If established for a particular purpose, the easement cannot be used for a different one. However, if established in a general way, without specific purpose, the easement can be used for all the needs of the dominant estate. To notify owner of servient before making repairs and to make repairs in a manner least inconvenient to servient estate 3.
Rights of owner of servient estate a.
To retain ownership and use of his property Article 630: Servient owner must respect the use of the servitude, but retains ownership and use the same, in a manner not affecting the easement. b.
To change the place and manner of the use of the easement Article 629(2): Right to change the place and manner of use De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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REQUISITES if change will cause prejudice to the dominant owner nor impair the use of the servitude: 1) By reason of the place/manner originally assigned, the use of such easement has become VERY INCONVENIENT to the owner 2) The easement should prevent him from making any important works, repairs or improvements thereon 3) Change must be done at his expense 4) He offers another place or manner equally convenient 5) In such a way that no injury is caused by the change to the owner of the dominant estate or to those who may have a right to use the easement But if change will NOT cause prejudice or impair the use of the easement, the requisites need not be satisfied. c.
To use the easement May use the easement but must also contribute proportionately to the expenses 4.
In legal easements, what may be extinguished through non-­‐
user is only the actual form or manner of the easement. BUT the right or power to claim the exercise of the legal servitude does not prescribe. a.
b.
b.
Not to impair the use of the easement Article 628(1): Cannot impair, in any manner whatsoever, the use of the servitude To contribute proportionately to expenses if he uses the easement G. Modes of Extinguishment of Easements 1. Merger – must be absolute, perfect and definite, not merely temporary Absolute: Ownership of the property must be absolute, thus not applicable to lease, usufruct, etc. Perfect: Merger must not be subject to a condition If the merger is temporary, there is at most a suspension of the easement, but no extinguishment. 2.
By non-­‐user for 10 years Owner of dominant estate does not exercise right over easement. Inaction, not outright renunciation. Due to voluntary abstention by the dominant owner, and not to a fortuitous event Discontinuous easements – counted from the day they ceased to be used ii.
Continuous easements – counted from the day an act adverse to the exercise took place The use by a co-­‐owner of the dominant estate bars prescription with respect to the others For dominant estates owned in common, if one co-­‐owner exercises the easement, it inures to the benefit of all the others and leads to preservation of the easement. c.
Article 628(2): Must contribute proportionately to expenses. Corollary to right to use the easement. i.
An act must be done to prevent the dominant owner from using the easement. E.g. in an easement of light and view, the erection of works obstructing the servitude would commence the period of prescription Obligations of the servient estate a.
Computation of the period Servitudes not yet exercised cannot be extinguished by non-­‐user An easement must have first been used, before it can be extinguished by inaction. 3.
Extinguishment by impossibility of use Impossibility referred to must render the entire easement unusable for all time. Impossibility of using the easement due to the condition of the tenements (e.g. flooding) only suspends the servitude until it can be used again. If the suspension exceeds 10 years, the easement is deemed extinguished. 4.
Expiration of the term or fulfillment of resolutory condition Only for voluntary easements 5.
Renunciation of the owner of the dominant estate – must be specific, clear, express (distinguished from non-­‐user) 6.
Redemption agreed upon between the owners De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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The servient owner redeems the property from the burden of the servitude, pursuant to an agreement. b.
7.
Other causes not mentioned in Article 631 a. Annulment and rescission of the title constituting the easement For voluntary easements b.
2.
Termination of the right of grantor For voluntary easements c.
Abandonment of the servient estate For private legal easements By agreement of the interested parties whenever the law does not prohibit it and no injury is suffered by a 3rd person ii.
By the provisions of Chapter 2, title VII, Book II Private legal easements provided for by the NCC a. Those established for the use of water or easements relating to waters i.
i.
Natural drainage of waters Owner of the servient estate gives up ownership of the easement (e.g. the strip of land where the right of way is constituted) in favor of the dominant estate. The easement is extinguished because ownership is transferred to the dominant owner, who now owns both properties. d.
Eminent domain The government’s power to expropriate property for public use, subject to the payment of just compensation. e.
Special cause for extinction of legal rights of way; if right of way no longer necessary Article 655: Right of way ceases to be necessary: 1) Owner of the of the dominant estate has joined to another abutting on a public road 2) A new road is opened giving access to the isolated estate Requisite: the public highway must substantially meet the needs of the dominant estate in order that the easement may be extinguished = Owner of the servient estate may demand that the easement be extinguished. Owner of the servient estate must return indemnity he received (value of the land) H. Legal Easements 1. Law governing legal easements a. For public easements i.
Special laws and regulations relating thereto (ex: PD 1067 and PD 705) ii.
By the provisions of Chapter 2, Title VII, Book II, NCC Article 637: Lower estates are obliged to receive waters as well as stones or earth from higher estates REQUISITE: 1. Waters must flow naturally, without the intervention of man DUTIES: DOMINANT OWNER (Higher Estate): Cannot construct works to increase the burden e.g. canals draining other lands into the lower estate, works which prevent absorption of water like pavements which make the ground more impervious than it is. May demand that the servient owner allow him to make works necessary to remove obstructions impeding natural passage SERVIENT OWNER (Lower Estate): Cannot make works which would impede the servitude e.g. dams which would block the natural flow, walls, ditches that enclose the tenements. Can construct works that he may deem necessary to prevent damage to himself, so long as he foes not cause damage to inferior tenements De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Case: Plaintiffs had an easement of natural drainage over defendant’s land, but the defendants obstructed the easement by constructing a dam in 1938. The action to destroy the dam was filed in 1951, on the theory, among other things, that the dam was a nuisance and therefore could never be legalized and that the action could not prescribe. The action has prescribed. Article 63 is an exception to Article 698. Moreover, granting that the dam was originally a nuisance, it must have been due to its interference with the plaintiffs’ right of drainage; but since that same right of drainage had become extinct by non-­‐user for 10 years, after that period, the dam could no longer interfere with terminated rights and was no longer a nuisance when the action was instituted in 1951. Moreover, under the law of nuisance in 1938, while no right to maintain a public nuisance could be acquired by prescription, the right to maintain a private nuisance could be acquired by prescription. Since the defendant’s prescriptive rights were acquired under said law, any contradictory rule in the new Code should not be allowed to operate retroactively to their prejudice. (Ongsiaco v. Ongsiaco) ii.
Easements on lands along riverbanks Article 638: 1. Banks of rivers and streams are subject throughout their entire length, and within a zone of 3 meters along their margins to the EASEMENT OF PUBLIC USE in the general interest of navigation, floatage, fishing and salvage. 2. Estates adjoining banks of navigable or floatable rivers are subject to the EASEMENT OF TOWPATH for the exclusive service of river navigation and floatage If occupation of public lands of private ownership is necessary = Proper indemnity to be paid iii.
Abutment of a dam Article 639: Easement of abutment of a dam may be established after payment of proper indemnity REQUISITES: 1)
2)
Construction of dam mecessary for the use of any other continuous or discontinuous stream Person who is to construct the dam is NOT the owner of the banks or lands which must support the dam Unauthorized construction: no easement has been previously established, and one of the wings of the dam occupied the land of another iv.
Aqueduct: Arts. 642-­‐646: Any person wishing to use upon his own estate any water can make it flow through intervening estates + With obligation to indemnify owners of such estates Considered as a continuous and apparent easement, even though the flow of water may not be continuous REQUISITES: 1) Dominant owner must prove that: a) He can dispose of the water b) Water is sufficient for the use for which it is intended c) The proposed right of way is the most convenient and the least onerous to third persons 2) Dominant owner must also indemnify the servient estate in the manner determined by laws and regulations 3) Dominant owner cannot impose the easement of aqueduct on buildings, courtyards, annexes, outhouses, orchards or gardens already existing Existing structures cannot be injured to establish the easement. RIGHT OF SERVIENT OWNER: May fence or build over the aqueduct in such a manner as not to cause any damage, or render impossible any necessary repairs and cleanings v.
Stop lock and sluice gate Article 646: Construction of a stop lock or sluice gate in the bed of the stream from which the water is to be taken = Owners of the banks must permit construction 1) For the purpose of irrigating or improving his estate 2) After payment of damages (including damage caused by the new easement) vi.
Drawing waters and watering animals REQUISITES: 1) Can be imposed only for reasons of public use in favor of a town or village 2) After payment of proper indemnity De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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b.
If right of way is limited to necessary passage for cultivation of the estate and for gathering crops, without permanent way = damage caused by encumbrance The easement of right of way 3)
RULES for establishing the right of way a) Article 650: Must be established at the point LEAST prejudicial to the servient estate i) Insofar as consistent with the first rule, where the distance from the dominant estate to a public highway is shortest E.g. as between a longer way without injury to the servient estate’s constructions, etc. and a shorter way that would cause injury b)
Article 649: 1)
2)
Who may demand: a) The owner of the dominant estate b) Any person with the real right to cultivate or use the immovable e.g. a usufructuary BUT a lessee cannot demand such easement, because the lessor is the one bound to maintain him in the enjoyment of the property REQUISITES: a) Dominant estate is surrounded by other immovables owned by other persons b) There must absolutely be no access to a public highway c) Even if there is access, it is difficult or dangerous to use, or grossly insufficient c)
d)
Article 651: Width of the easement shall be that which is sufficient for the needs of the dominant estate i) Easement may be changed from time to time depending upon the needs of the dominant tenement Article 654: Necessary repairs for a permanent right of way shall be made by the DOMINANT OWNER. Article 654: A proportionate share of taxes shall be reimbursed by the dominant owner to the proprietor of the servient estate e)
Article 652: In cases where the dominant estate needing the right of way is acquired by sale, exchange or partition + Estate is surrounded by other estates owned by the vendor, exchanger of co-­‐owner i)
Mere inconvenience in the use of an outlet does not render the easement a necessity. d)
An adequate outlet is one that is sufficient for the purpose and needs of the dominant owner, and can be established at a reasonable expense. Does not necessarily have to be by land – an outlet through a navigable river if suitable to the needs of the tenement is sufficient. Isolation of the immovable is NOT due to the dominant owner’s own acts ii)
E.g. if he constructs building to others obstructing the old way e)
Payment of indemnity If right of way is permanent and continuous for the needs of the dominant estate = value of the land + amount of damage caused to the servient estate -­‐ Grantor receives nothing from the grantee, therefore no implied condition as to a right of way is constituted f)
4)
Vendor, exchanger or co-­‐owner shall grant the right of way WITHOUT INDEMNITY -­‐ Granting the servitude without indemnity is a tacit condition of the sale, exchange or partition: each party receives something Donor (simple donation) must still be indemnified for right of way If the land of the grantor is the one which becomes isolated, he may demand right of way after paying an indemnity EXTINGUISHMENT a) Extinguished in the following circumstances because easement ceases to be necessary: i) Owner has joined the dominant estate to another abutting the public road ii) A new road is opened giving access to the isolated estate De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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b)
5)
Extinguishment is NOT automatic. The owner of the servient estate must ask for such extinguishment c) Indemnity paid to the servient owner must be returned: i) If easement is permanent: value of the land must be returned ii) If easement is temporary: nothing to be returned SPECIAL RIGHTS OF WAY a) Article 656: With payment of proper indemnity i) Right of way to carry materials for the construction, repair, improvement, alteration or beautification of a building through the estate of another ii)
iii)
Right of way to raise on another’s land scaffolding or other objects necessary for the work Article 657: (1) Right of way for the passage of livestock known as animal path, animal trail, watering places, resting places, animal folds -­‐
ANIMAL PATHS shall not exceed in any case a width of 75 meters -­‐
ANIMAL TRAILS shall not exceed 37 meters and 50 cm -­‐
Rights of way for WATERING PLACES shall not exceed 10 meters -­‐
Governed by ordinances and regulations relating thereto, and in the absence thereof, by the usages and customs of the place Cases: Sari-­‐sari store obstructs the shortest possible route through the land to the public highway. To avoid the store, the passage must go through respondent’s property, where the only obstruction is the avocado tree. The Court granted the easement through the respondent’s property, a legal easement having met the following conditions: (a) the dominant estate is surrounded by other immovables without an adequate outlet to a public highway; (b) the dominant estate is willing to pay the proper indemnity; (c) the isolation was not due to the acts of the dominant estate; and, (d) the right of way being claimed is at a point least prejudicial to the servient estate The said easement is to be constituted on respondent’s property, even if the same is not the shortest route. The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance although this is a matter ofjudicial appreciation. While shortest distance may ordinarily imply least prejudice, it is not always so as when there are permanent structures obstructing the shortest distance; while on the other hand, the longest distance may be free of obstructions and the easiest or most convenient to pass through. (Quimen v. CA) www Plaintiff seeks to enjoin the owner of the adjoining estate from enclosing their property, as to deprive her of her only access to the public highway. Court ruled that the plaintiff cannot claim a right of way, because: 1. She had another access to the public highway through another adjoining estate 2. Her isolation was due to her own act of building a fence to separate her own property 3. She failed to make a valid tender of an indemnity (David Chan v. CA) www La Vista and LGV had a dispute as to whether there was a right of way constituted for their mutual benefit, via the 15 meter Mangyan Road in the boundary of their properties. The Court ruled that based on the contracts entered into by the predecessors of La Vista and LGV, a voluntary easement of right-­‐of-­‐way over Mangyan Road was constituted. Like any other contract, the same could be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate. The fact that LGV had other means of egress to the public highway cannot extinguish the said easement, being voluntary and not compulsory. The free ingress and egress along Mangyan Road created by the voluntary agreement between the parties is thus legally demandable with the corresponding duty on the servient estate not to obstruct the same. (La Vista Association v. CA) www Baltazar opposes the establishment of a right of way over her property, alleging that the respondent had two other passageways available to him. The Court found however that the two passageways mentioned were mere temporary pathways which respondent Panganiban requested successively from his two neighbors when petitioner Baltazar closed the passageway through his property. Because petitioner’s property offered the shortest distance from the respondent’s land to the highway, such easement could be legally constituted. (Vda. de Baltazar v. CA) www Petitioners seek to affirm the existence of a right of way over respondent’s property, upon which they appropriated a passage way and constructed a shed. The Court ruled that inasmuch as petitioners have an adequate outlet to a public highway, they have no right to insist on using a portion of respondent’s property as pathway and for which no indemnity was being paid by them. It was likewise found that the adequate outlet was established by the original owner precisely for the purpose of ingress and egress to the properties. Although the way through De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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petitioner’s property is shortest, mere convenience for the dominant estate is not enough to serve as its basis. To justify the imposition of this servitude, there must be a real, not a fictitious or artificial necessity for it. (Spouses Dela Cruz v. Ramiscal) c.
The easement of party walls PARTY WALL Built by common agreement by getting land from the adjoining tenements in equal parts Owner may use the wall for his own exclusive benefit WALL OWNED IN COMMON Owned by adjoining owners from its construction or by subsequent act Co-­‐owner cannot use the wall for his own exclusive benefit, because he would be impairing the rights of his co-­‐
owners Each owner can insert beams in the wall to the extent of entire thickness Each owner may insert beams but only to the extent of ½ of its thickness DETERMINING THE EXISTENCE OF A PARTY WALL 1) PRESUMED in the following situations UNLESS there is a TITLE or EXTERIOR SIGN or PROOF to the contrary a) In dividing walls of adjoining buildings, up to the point of common elevation b) In dividing walls of gardens or yards, situated in cities, towns or rural communities c) In fences, walls and live hedges dividing rural lands d) Ditches or drains between two estates 2) EXTERIOR SIGNS CONTRARY TO THE EASEMENT OF PARTY WALL (merely illustrative and not exclusive) a) A window or opening in the dividing wall of buildings b) A lower part of the wall slants or projects outward on one side of the wall, while the other side is straight and plumb on its facement c) Entire wall is built WITHIN the boundaries of one of the estates Existence of an exterior sign (protrusion) will have to give way to the fact that the entire party wall is built within the boundary of one estate. d) Dividing wall bears the burden of beams, floors and roof frame of only one of the buildings e) Dividing wall between courtyards, garden or tenements is constructed in such a way that the it sheds water upon only one of the estates f) Dividing wall has stepping stones which project from the surface of one side only, but not on the other g) Lands enclosed by fences or live hedges adjoin others which are not enclosed OTHERS NOT ENUMERATED in ARTICLE 659 h) Two adjoining tenements surrounded by live hedges of different kinds = the hedge must belong to the owner of the tenement using the same kind of plants i) For ditches or drains between two estates, whenever the earth or dirt removed to open or clean the ditch is only on one side thereof De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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CONTRADICTORY SIGNS 1) Contradictory external signs are left to the determination of the Court, but the quality instead of the number of signs must prevail. Also, a presumption arising from the object or purpose of the wall is of more force than that arising from a doubtful external sign. 2) Title, as an express proof of ownership prevails over an external sign, which merely gives rise to a presumption RULES 1) Cost of repairs and construction, maintenance of fences, hedges, ditches and drains shall be borne by ALL the owners of the lands or tenements EXCEPT: if the defects were occasioned only by one owner 2) An owner may exempt himself from contributing to the expenses by renouncing his part-­‐ownership, UNLESS the party wall supports a building he owns Renunciation refers not only to the wall, but also to the land on which it is constructed. 3) An owner of a building supported by a party wall who desires to demolish his building, may also renounce his part ownership of the wall. BUT he must still bear the cost of all the repairs and work necessary to prevent any damage to the party wall. 4) Every owner may increase the height of the wall, at his own expense and paying for damages caused by the work. He must also pay for: Expenses of maintaining the wall in the part newly raised, or deepened foundation Indemnity for increased expenses necessary for the preservation of the wall by reason of the greater height or depth which has been given it Reconstruction expenses in case the party wall cannot bear the increased height. If increased thickness is needed, the owner shall give the space required from his own land Other owners may acquire part ownership of the increased height, depth or thickness of the wall, by paying proportionately the value of the work at the time of the acquisition, and of the land for its increased thickness 5) Part-­‐owners may use the party wall IN PROPORTION to the right he may have in the co-­‐ownership, without interfering with the common and respective uses of the others. E.g. A ½ interest in the wall = ½ payment for expenses = ½ use as in one can insert beams in the wall up to ½ thickness d.
The easement of light and view NATURE OF THE EASEMENT 1) POSITIVE: Opening a window through a party wall When a part owner of a party wall opens a window therein, such act implies the exercise of the right of ownership by the use of the entire thickness of the wall = invasion of the right of the other part owners / violation of the right to proportional use of the party wall. 2) NEGATIVE: Formal prohibition upon the owner of the adjoining land or tenement When a person opens a window on his own building, he does nothing more than exercise an act of ownership on his property = Does not establish an easement Coexistent is the right of the owner of the adjacent property to build on his own land, even if such structures cover the window If the adjacent owner does not build structures to obstruct the window, such is considered mere tolerance and NOT a waiver of the right to build. An easement is created only when the owner who opens up a window prohibits or restrains the adjacent owner from doing anything, which may tend to cut off or interrupt the light. DISTANCES 1) Window, apertures, balconies and other projections with a direct view upon or towards an adjoining land must have a distance of 2 METERS between the wall and the contiguous property. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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2)
3)
4)
For structures with a side or oblique view (at an angle from the boundary line), there should be a distance of 60 centimeters. Measured from: a) The outer line of the wall if the openings do not project b) The outer line of the openings if they project c) The dividing line between the two properties in cases of oblique view If distances are not complied with: a) Windows are considered unlawful openings = owner may be ordered by the Court to close them Even if the adjoining owner does not object to the construction of such structures at first, he cannot be held to be in estoppel. b) Does not give rise to prescription Mere opening of the window in violation of the distances does not give rise to the easement of light and view by prescription 5)
Owners of a wall (not a party wall) adjoining a tenement of another can make openings to admit light without complying with the distance requirements SO LONG AS: a) Openings are made at the height of the ceiling joists (horizontal beams) or immediately under the ceiling b) Size: 30 cm square c) With iron grating imbedded in the wall d) With a wire screen from doing something he could lawfully do. THUS, although the action to compel the closure might have prescribed, the owner of the adjoining estate may still build on his own land a structure which might obstruct the view. 6)
7)
In buildings separated by a public way or alley, not less than 3 meters wide, the distances required (2 m, 60 cm) do not apply. If an easement is acquired to have direct views, balconies or belvederes, the owner of the servient estate must not build at less than 3 meters from the boundary line of the two tenements. True servitude, because the servient owner is prohibited from building at a certain distance. The distances may be stipulated by the parties, but should not be less than what is prescribed by the law (2 meters and 60 cm) e.
The easement of drainage of buildings But owner of the adjoining estate can close the opening if: a) He acquires part ownership of the party wall b) He constructs a building or raises a wall on his land, unless an easement of light has been acquired If requirements are not complied with, the owner of the adjoining estate may compel the closure of the opening. The action to compel the closing of the opening may prescribe, if the opening is permitted without protest. The period begins to run from the moment such opening is made. BUT prescription of the action to compel the closure of the opening DOES NOT MEAN that the servitude of light and view has been acquired. Period of acquisitive prescription will only start to run from the time the owner asserting the servitude has forbidden the owner of the adjoining tenement Article 674: Regulating the disposal of rain water 1) Owner of a building is obliged to construct a roof or covering so as to ensure 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. 2) Owner is also obliged to collect the war falling on his own land so as not to cause damage to adjacent tenements Rain water is res nullius, and has no owner. This article merely imposes a limitation on the use of one’s property, so that rain water falling thereon may not cause damage. Obligation to collect water (#2) is an exception to the rule requiring lower tenements to receive water flowing from higher tenements. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Property Reviewer
Owner is obliged to provide an outlet for waters falling upon his land. Article 675: Owner of tenement subject to the easement of receiving water falling from roofs may build as to receive the water upon his own roof, or give it another outlet in accordance with local ordinances or customs, in a way as not to cause nuisance or damage to the dominant estate. Article 676: Easement giving an outlet to the water through contiguous estates Requisites: 1) Yard or court of a house is surrounded by other houses 2) Water is collected thereon 3) Not possible to give an outlet through the house itself 4) Establishment of conduit for drainage must be at a point where egress is easiest and where it will cause the least damage to the servient estate 5) After payment of proper indemnity f.
The easement of distance for certain constructions and plantings CONSTRUCTIONS may be built only after complying with prescribed regulations (special laws, ordinances, regulations): 1) Constructions or plantings near fortified places or fortresses 2) Aqueduct, well, sewer, furnace, forge, chimney, stable, depository of corrosive substances, machinery, factory (with dangerous and noxious substances) Distances must be observed and protective works necessary for the conditions must be made 3) Trees planted near a tenement or piece of land In the absence of ordinances or customs of the place: TALL TREES: At a distance of at least 2 meters from the dividing line of the estates SHRUBS/SMALL TREES: At least 50 cm from the dividing line If trees are planted at a shorter distance, landowner may demand that it be uprooted PLANTINGS ENCROACHING ON ADJOINING ESTATES 1) Branches of any tree extending over a neighboring estate, garden, etc. Owner of the adjoining estate has the right to demand that they be cut off insofar as they may spread over his property 2) Roots of a neighboring tree which should penetrate into the land of another Owner may cut the roots off himself within his property, even without notice to the owner of the trees Roots, by accession are converted into the property of the owner of the land into which they penetrate. Also, cutting off the roots will not give the cutter any benefit, in contrast to cutting off the branches of a tree. PRESCRIPTION OF ACTION TO CUT: Period only starts to run after the owner of the estate has demanded that the owner of the trees cut off the branches or roots, and the latter refuses. The fact that the owner does not cut off the trees only constituted mere tolerance. 3) Fruits naturally falling upon adjacent land belong to the owner of the land Not by right of occupation but by principle of accession. Owner of the tree retains ownership: a. If he picks the fruits from the branches which invade the neighboring tenement b. If fruits fall on immovables for public use (not considered as fruits of these immovables) g.
The easement against nuisances Article 682: Every proprietor or possessor of a building or piece of land is prohibited from committing nuisance through noise, jarring, offensive odor, smoke, heat, dust, water, glare and other causes Noise, heat, jarring, etc. are licit if they produce no injury or material impairment in the utilization of the neighboring tenement. Material impairment depends on the nature and purpose of the tenement e.g. dwelling house vs. factory. Degree of annoyance to be tolerated depends on what is usual for a specific locality. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
108
Easements of Servitudes
Property Reviewer
Article 683: Factories and shops may be maintained, subject to zoning, health, police and other laws and regulations. h.
The easement of lateral and subjacent support Article 684: An owner cannot make such excavations as to deprive any adjacent land or building of sufficient lateral or subjacent support LATERAL SUPPORT Limitation on the right to excavate on his own land: one cannot excavate so close to an adjoining estate as to deprive it of natural support and cause it to crumble. Not necessary that the excavation is made on the lot immediately adjoining. It is sufficient if the excavation results in a slide in the plaintiff’s property Owner who makes excavations can either: 1) Observe a sufficient distance to permit the necessary lateral support of adjoining land 2) Support the latter artificially through walls, etc. SUBJACENT SUPPORT The owners of the rights below the surface are burdened with the easement to refrain from removing such sufficient support which will protect the surface from subsidence or sinking, and keep it securely at its original level. REMEDIES FOR VIOLATION 1) Action for Damages against the one who made the excavation, whether owner or contractor, etc. A consequence of the violation of the right of property; may be recovered by any one who has an interest in the land which has been injured e.f. one in possession, lessee, etc. 2) Injunction Restraining the owner from excavating so as to deprive the land of natural support Will prohibit merely any excavation which shall cause the plaintiff’s land to fall away due to withdrawal of support OTHER RULES: 1) Stipulations or testamentary provisions allowing excavations that cause danger to adjacent land or building is VOID. 2) Also applicable to future constructions 3) Any proprietor intending to make any excavation shall notify all owners of adjacent lands. Notice must sufficiently inform the adjoining owner of the nature and extent of the proposed excavation, so as to enable the owner to take the necessary precautions to protect his property. No formal notice is necessary if the adjoining owner already has actual knowledge of such excavation. But giving notice does not absolve the excavator from the duty to exercise reasonable care to avoid injury to neighbors. Exists when there is severance of ownership (surface owner vs. substrata owner) as in mines and tunnels. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
109
Nuisance
Property Reviewer
Part. 9 Nuisance A. Definition Art. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything else which: (1) Injures or endangers the health or safety of others; or (2) Annoys or offends the senses; or (3) Shocks, defies or disregards decency or morality; or (4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or (5) Hinders or impairs the use of property. To constitute a nuisance there must be an arbitrary or abusive use of property or disregard of commonly accepted standards set by society. The word “nuisance” is derived from the French word “nuire”, which means injury, hurt or harm. Latin: “nocumentum”. Literally, it means annoyance – anything that works hurt or injury. Legal meaning – the term “nuisance” is applied to that class of wrongs that arise from the unreasonable and unwarrantable or unlawful use by a person of his own property, real or personal, or from his own improper, indecent, or unlawful personal conduct, working an obstruction or injury to a right of another, or of the public, producing such material annoyance, inconvenience, discomfort or hurt that the law will presume a consequent damage. Contemporary usage: 1) Harm caused 2) That which causes the ham (indecent human conduct or physical condition of the land) 3) Both Nuisance v. Trespass: Nuisance Trespass Use of one’s own property in such a manner as to cause injury to the property or right or interest of another, and Direct infringement of generally results from the another’s right of property. commission of an act beyond the limits of the property affected. Injury is consequential Injury is immediate Nuisance is distinguished from trespass to realty in that it may consist of injury to realty or interference with its use or enjoyment, without entry upon it. (Ex: Damming a stream on one’s own land which causes it to overflow the land of another) Nuisance v. Negligence: Nuisance Negligence Whether it was unreasonable Whether the defendant’s use for the defendant to act as he of his property was did in view of the threatened unreasonable as to plaintiff, danger or harm to one in without regard to plaintiff’s position. foreseeability of injury. Liability for the resulting injury to others regardless of Liability is based on a want of the degree of care or skill proper care exercised to avoid such injury. Principles ordinarily apply where the cause of action is Principles ordinarily apply for continuing harm caused where the cause of action is by continuing or recurrent for harm resulting from one acts which cause discomfort act which created an or annoyance to plaintiff in unreasonable risk of injury. the use of his property. Examples as enumerated under CC: 1) Injury to health – Any business, although itself lawful, which necessarily impregnates large volumes of the atmosphere with disagreeable, unwholesome or offensive matter, may become a nuisance to those occupying adjacent property, in case it is so near, and the atmosphere is contaminated to such an extent as substantially to impair the comfort and enjoyment of adjacent occupants. To constitute smoke a nuisance, the annoyance and inconvenience suffered must be of substantial injury to neighboring property itself, or such as to interfere sensibly with its use and enjoyment by persons of ordinary sensibilities. 2) Dangerous to safety – manufacture, storing or keeping of explosives in large quantities in the vicinity of dwelling houses or excavation adjoining a public highway 3) Annoyance to senses – slaughterhouses and cowhide storage vats from which emanated vile and offensive odors; noise of animals kept in residential neighborhood Criterion – they are to be judged by the effect they are calculated to produce upon ordinary people under normal circumstances, not by their effect upon the oversensitive, the fastidious or the sick, nor, on the other hand, by their effect upon those who are abnormally indifferent to such things, or who by long experience have learned to endure them without inconvenience. Inconvenience must be materially interfering with the ordinary comfort, physically, of human existence. 4) Shocking to decency – bawdy or disorderly house; building used for either lewdness or of assignation or prostitution De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
110
Nuisance
Property Reviewer
5)
B. Classes Art. 695. Nuisance is either public or private. A public nuisance affects a community or neighborhood or any considerable number of persons, although the extent of the annoyance, danger or damage upon individuals may be unequal. A private nuisance is one that is not included in the foregoing definition. 1.
According to Nature (old classification) a.
Nuisance per se or at law An act, occupation or structure which is a nuisance at all times and under any circumstances, regardless of location or surroundings. Nuisance in and of itself, without regard to circumstances. Example: house of ill-­‐fame b.
Nuisance per accidens or in fact One that becomes a nuisance by reason of circumstances and surroundings. It is not a nuisance by its nature but it may become so by reason of the locality, surrounding, or the manner in which it is conducted, managed, etc. Example: slaughterhouse – not a nuisance per se because it is not unlawful to establish slaughterhouses, which are necessary for the convenience of the community. But this may become a nuisance under certain circumstances. Per se Per accidens The wrong is established by proof of the mere act. It Proof of the act and its becomes a nuisance as a consequences. matter of law. 2.
places and accordingly constitute public nuisances, aside from being nuisances per se. Hinders or impairs the use of property – illegal construction on another’s land If hindrance is just, authorized and necessary, it is not a nuisance. Scope of Injurious Effects a.
Public The doing of or the failure to do something that injuriously affects the safety, health or morals of the public. It causes hurt, inconvenience or injury to the public, generally, or to such part of the public as necessarily comes in contact with it. This is a direct encroachment upon public rights or property which results injuriously to the public. Houses constructed on public streets and river beds obstruct at all times the free use by the public of said b.
Private One which violates only private rights and produces damages to but one or a few persons. Where a dam was constructed in such a way that one of its wings rested on the land of another and a portion of the land of the latter was placed under water as a consequence, the court allowed the removal of the dam. Public Private Affects the individual or a Affects the public at large limited number of individuals only Need not affect the whole community or hurt and injure all the public. It is sufficient if it affects the surrounding community generally or if the injury is occasioned to such part of the public as come in contact with it. Test is not the number of persons annoyed but the possibility of annoyance to the public by the invasion of its rights – the fact that it is in a public place and annoying to all who come within its sphere. c.
3.
Mixed Doctrine of Attractive Nuisance One who maintains on his premises dangerous instrumentalities or appliances of a character likely to attract children in play, and who fails to exercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a child of tender years who is injured thereby, even if the child is technically a trespasser in the premises. Basis of liability – The attractiveness is an invitation to children. Safeguards to prevent danger must therefore be set up. Example – A swimming pool or water tank is not an attractive nuisance, for while it is attractive, it cannot be a nuisance, being merely an imitation of the work of nature. (Hidalgo Enterprises v. Balandan) C.
Liability in case of nuisance Art. 696. Every successive owner or possessor of property who fails or refuses to abate a nuisance in that property started by a former owner or possessor is liable therefor in the same manner as the one who created it. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
111
Nuisance
Property Reviewer
Liability of creator of nuisance: He who creates a nuisance is liable for the resulting damages and his liability continues as long as the nuisance continues. There must be a breach of some duty on the part of the person sought to be held liable for damages resulting from a nuisance before an action will lie against him. No one is to be held liable for a nuisance which he cannot himself physically abate without legal action against another for that purpose. Where several persons, acting independently, cause damage by acts which constitute a nuisance, each is liable for the damage which he has caused or for his proportionate share of the entire damage. Liability of transferees: The grantee of land upon which there exists a nuisance created by his predecessors in title is NOT responsible therefore merely because he becomes the owner of the premises, or merely because he permits it to remain. He shall be liable if he knowingly continues the nuisance. Generally, he is not liable for continuing it in its original form, unless he has been notified of its existence and requested to remove it, or has actual knowledge that it is a nuisance and injurious to the rights of others. Nature of liability: All persons who participate in the creation or maintenance of a nuisance are jointly and severally liable for the injury done. If 2 or more persons who create or maintain the nuisance act entirely independent of one another, and without any community of interest, concert of action, or common design, each is liable only so far as his acts contribute to the injury. For joint liability, there must be some joint or concurrent act or community of action or duty, or the several wrongful acts done at several times must have concurred in their effects as one single act to produce the injury complained of. Art. 697. The abatement of a nuisance does not preclude the right of any person injured to recover damages for its past existence. Abatement and damages are cumulative remedies. Art. 698. Lapse of time cannot legalize any nuisance, whether public or private. No prescription – prescription cannot establish a right to maintain a public nuisance. The action to abate a public or private nuisance is NOT extinguished by prescription. (Art. 1143[2]) Exception: 698 and 1143(2) do not apply to easements which are extinguished by obstruction and non-­‐user for 10yrs. (Art. 631). D. Regulation of nuisances Art. 699. The remedies against a public nuisance are: (1) A prosecution under the Penal Code or any local ordinance: or (2) A civil action; or (3) Abatement, without judicial proceedings. Criminal prosecution: Only for a public nuisance, not for a private one. Public nuisances are offenses against the State, and since early times it has been held that one who is responsible for this may be proceeded against criminally by indictment. Question of intent is immaterial. Persons liable – person is liable for the consequence which his act produced Civil action: 1) Judgment with abatement – defendant convicted of maintain a nuisance may also be ordered to abate the nuisance 2) Injunction – where the injury occasioned by an indictable nuisance is pressing or imminent, so that the public safety is menaced or public rights are obstructed or interfered with, and the special circumstances are such that the ordinary process of the court is not sufficiently prompt or effective to prevent the injury or obstruction, the remedy can be injunction provided the right is clear and the wrong has not been acquiesced in by the plaintiff. Extrajudicial abatement: This right is based upon necessity which must be present to justify its exercise. It must be reasonably and efficiently exercised, means employed must not be unduly oppressive on individuals, and no more injury must be done to the property or rights of individuals than is necessary to accomplish the abatement. No right to compensation if property taken or destroyed is a nuisance. Art. 700. The district health officer shall take care that one or all of the remedies against a public nuisance are availed of. Art. 701. If a civil action is brought by reason of the maintenance of a public nuisance, such action shall be commenced by the city or municipal mayor. Art. 702. The district health officer shall determine whether or not abatement, without judicial proceedings, is the best remedy against a public nuisance. Art. 703. A private person may file an action on account of a public nuisance, if it is specially injurious to himself. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
112
Nuisance
Property Reviewer
General rule: Individual has no right of action against a public nuisance. The abatement proceedings must be instituted in the name of the State or its representatives. Except: An individual who has suffered some special damage different from that sustained by the general public, may maintain a suit in equity for an injunction to abate it, or an action for damages which he has sustained. Action becomes a tort if an individual has suffered particular harm, in which case the nuisance is treated as a private nuisance with respect to such person. Art. 704. Any private person may abate a public nuisance which is specially injurious to him by removing, or if necessary, by destroying the thing which constitutes the same, without committing a breach of the peace, or doing unnecessary injury. But it is necessary: (1) That demand be first made upon the owner or possessor of the property to abate the nuisance; (2) That such demand has been rejected; (3) That the abatement be approved by the district health officer and executed with the assistance of the local police; and (4) That the value of the destruction does not exceed three thousand pesos. Requisites of the right of a private individual to abate a public nuisance: 1) The right must be exercised only in cases of urgent or extreme necessity. The thing alleged to be a nuisance must be existing at the time that it was alleged to be a nuisance. 2) Summary abatement must be resorted to within a reasonable time after knowledge of the nuisance is acquired or should have been acquired by the person entitled to abate. 3) Person who has the right to abate must give a reasonable notice of his intention to do so, and allow thereafter a reasonable time to enable the other to abate the nuisance himself. 4) Means employed must reasonable and for any unnecessary damage or force, the actor will be liable. Right to abate is not greater than the necessity of the case and is limited to the removal of only so much of the objectionable thing as actually causes the nuisance. 5) Abatement must be approved by the district health officer. 6) Property must not be destroyed unless it is absolutely necessary to do so. 7) Right must always be exercised with the assistance of local police so as not to disturb the public peace. Art. 705. The remedies against a private nuisance are: (1) A civil action; or (2) Abatement, without judicial proceedings. Action for damages: Recovery is limited to the damage occasioned up to the time of the commencement of the action. If nuisance continues to the time of trial, then damages shall be computed from that time. If nuisance is permanent, a single action is enough to cover both past and prospective damages. If temporary or recurrent, each repetition of it gives rise to a new cause of action and successive actions will lie. Defenses to action: 1) Public necessity – private interest must yield to the public good; creation of nuisance amounts to taking of property therefore just compensation must be made. 2) Estoppel – one who voluntarily places himself in a situation whereby he suffers an injury will not be heard to say that his damage is due to a nuisance maintained by another. 3) Non-­‐existence of the nuisance 4) Impossibility of abatement Art. 706. Any person injured by a private nuisance may abate it by removing, or if necessary, by destroying the thing which constitutes the nuisance, without committing a breach of the peace or doing unnecessary injury. However, it is indispensable that the procedure for extrajudicial abatement of a public nuisance by a private person be followed. Art. 707. A private person or a public official extrajudicially abating a nuisance shall be liable for damages: (1) If he causes unnecessary injury; or (2) If an alleged nuisance is later declared by the courts to be not a real nuisance. Remedies of property owner: A person whose property is seized or destroyed as a nuisance may resort to the courts to determine w/n it was in fact a nuisance. 1) Action for replevin 2) Enjoin the sale or destruction of the property 3) Action for the proceeds of its sale and damages if it has been sold 4) Enjoin private parties from proceeding to abate a supposed nuisance Liability of person abating: Whoever abates an alleged nuisance and thus destroys or injures private property, or interferes with private rights, whether a public officer or private person, unless he acts under the order of a court having jurisdiction, does so at his peril. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
113
Modes of Acquiring Ownership
Property Reviewer
Part 10. 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. The theory of Mode and Title in acquiring ownership or real rights emphasizes the distinction between the right to a thing and actual ownership or real right over it. To give rise to ownership or a real right, it is not enough that there be a right or claim to the same, however justified; that right or title, arising from a juridical act, must be completed by fulfilling certain conditions imposed by law. Hence, ownership or real rights are acquired only pursuant to a legal process or mode. Mode and Title Differentiated Mode of acquiring ownership and other real right is a specific cause which produces dominion and other real rights as a result of the co-­‐existence of special status of things, capacity and intention of persons and fulfillment of the requisites of law. Title is every juridical right which gives a means to the acquisition of real rights but in itself is insufficient to produce them. Title is the remote cause, and mode the proximate cause, of acquisition. Hence, the contract of sale is title, and tradition is the mode. Ownership is not transferred by contract merely but by tradition or delivery. Contracts only constitute titles or rights to transfer or acquisition of ownership, while delivery is the mode accomplishing the same. Thus in a contract of sale, ownership is not transferred until the property is delivered and the purchaser has take possession of the same. Mode v. Title Mode Title Serves merely to give the Directly and immediately occasion for its acquisition or produces a real right existence Cause Means Proximate cause Remote cause Essence of the right which is Means whereby that to be created or transmitted “essence” is transmitted Extinction of Ownership and Real Rights: The Code does not contain any systematic doctrine on the loss of ownership. Most authors classify the modes of losing ownership into voluntary and involuntary. According to Sanchez Roman: Voluntary modes: abandonment; alienation Involuntary modes: total loss of the thing, accession continua, rescissory actions, judicial decree, and operation of law. According to other authors: Absolute extinguishment: material loss of the thing; juridical loss of the thing (when it goes out of commerce); expropriation by public use. Relative extinguishment: by law (accession, prescription, confiscation); by act of man combined with law (legal redemption, abandonment, tradition, rescission, nullity and revocation) Special causes of extinguishment of certain real rights: usufruct; easement; possession Abandonment – renunciation of real rights, and requires legal capacity of the subject and intent to renounce the right. It is a unilateral act and requires no formalities. Note: If personal property is abandoned, it becomes res nullius and may be acquired by occupation. Alienation – the transfer of ownership to another person. It may be mortis causa (deathbed gift) or inter vivos (transfer by agreement between living people), and may be onerous or gratuitous. Loss of the thing – this may occur either by the total physical destruction of the thing, or by its juridical loss when it ceases to be the object of private ownership e.g. when a thing goes out of commerce Rescissory actions – annulment, rescission or revocation of an act e.g. revocation of donation by reason of ingratitude Judicial decree – by decision of the courts; according to Tolentino, this mode is not really distinct from other modes of extinguishing ownership because the decision of the courts do not create or extinguish rights but only declare their existence or non-­‐existence. Operation of law – prescription and acts of the State. Acts of the State include confiscation of the effects and instruments of crime, the requisition of property in times of war, and expropriation for public use. Modes of Acquiring Ownership A. Original Modes Original modes of acquisition are those which produce the acquisition of ownership independent of any preexisting right of another person, hence, free from burdens or encumbrances. Note: according to Tolentino, an original mode of acquiring ownership that is not mentioned in the Code is work. This is broader than intellectual creation. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
114
Modes of Acquiring Ownership
Property Reviewer
1. 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 mode of acquiring ownership by apprehension of a corporeal thing which has no owner, by a person having capacity for the purpose, with intent to appropriate it as his, and according to the rules established by law. It is taking possession which by itself confers ownership. It is limited to things without an owner and cannot be asserted as a mode of acquiring ownership of things owned by someone else. When the thing has already been abandoned by its owner, it becomes res nullius and may be acquired by occupation. The thing is considered abandoned when the spes recuperandi (hope of recovery) is gone and the animo revertendi (intention to return) has been given up by the owner. Requisites of occupation: 1) Corporeal personal property 2) Property susceptible of appropriation – not res communes 3) Seizure with intent to appropriate 4) No owner (res nullius) or abandoned property (res derelict) 5) Observance of conditions prescribed by law Ways by which occupation may be effected: 1) By hunting and fishing; 2) By finding of movables which never had an owner; 3) By finding of movables which have been abandoned by the owner; 4) By finding of hidden treasure. Kinds of occupation: 1) Of animals a) Wild or feral animals – roaming free in their natural state, suffering contract with man only by compulsion i) Seizure (hunting or fishing) in open season ii) By means not prohibited (like poison or explosives) b) Tamed or domesticated animals – wild by nature but have become accustomed to man i) General rule: they belong to the tamer, but upon recovering freedom are susceptible to occupation unless claimed within 20 days from seizure by another (Art. 716) ii) Special rules: (1) Pigeons and fish which pass (voluntarily) from their breeding place to another belonging to a different owner, belong to 2)
the latter unless enticed by trickery or fraud (Art. 217) (2) Swarms of bees are lost to the owner and are acquirable by occupation if the previous owner does not pursue them (or abandons pursuit) for two consecutive days (Art. 716) (a) The owner may pursue them into the enclosed estates of another but must indemnify the latter for damage (Art. 716) (b) The pursuer must ask the consent of the owner of the enclosed estates to enter the same (c) After the expiration of two days from cassation of pursuit, the bees belong to one who caught and kept them. c) Tame or domestic animals – ordinarily born and reared under man’s control, including tamed animals accustomed to return (Art. 560) i) These are not acquired by occupation except when abandoned. The owner may claim them from the finder, barring prescription, or special laws (on stray animals). Otherwise Art. 719 is applied. Other personal property a) Abandoned – may be acquired by occupation b) Lost – not known to be abandoned (Art. 719) i) If the former possessor is known, the finder must restore the thing to him. ii) If the former possessor is not known: (1) The finder must deposit the thing with the mayor of the town where the finding took place. (2) The mayor must advertise the finding for two consecutive weeks in the manner he deems best. (a) If the thing is deteriorable or expensive to keep, it shall be sold at auction 8 days after publication and the price deposited. (b) If not deteriorable, the thing must be preserved. (3) If the owner does not claim within 6 months from the last publication, the thing shall be awarded to the finder. If the owner appears, he recovers the thing, paying reward to the finder, on the basis of 1/10 of the price, plus costs. But the owner may abandon the thing in favor of the finder. iii) The finder who does not follow the above procedure commits theft and cannot acquire the thing by prescription, even if extraordinary. (Art. 1133) iv) Lost property must be distinguished from abandoned property, where the owner’s waiver of his rights is known or manifest. v) Marine salvage is governed by special law (Act No. 2616) c) Hidden treasure – the law grants De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Modes of Acquiring Ownership
Property Reviewer
i)
ii)
d)
e)
To the finder: ½ by occupation To the landowner: ½ by accession (Art. 718) (1) Except: in case of persons married under the CPG system, when the share, as finder or as owner, goes to the partnership (Art. 154) Marine products (shells, plants, etc.) – these belong to the first occupant, when cast ashore. Otherwise, apply fishing laws. Jetsam – things (not marine products) cast into the sea. i) Kinds: (1) Ligan – resting at the bottom of the sea (a) Lying under the open sea – these will belong to the finder or salvor (b) Lying under territorial waters – the rules on sharing will be governed by the Salvage Law (Act 2616) (2) Flotsam – floating on the surface – these belong to the State; but the rule is without prejudice to salvage rights (3) Wreck – cast ashore – these have to be deposited with the authorities in accordance with Art. 719. a. Not applicable to ownership of a piece of land Article 714. The ownership of a piece of land cannot be acquired by occupation. When land is without an owner, it pertains to the State. Therefore, it cannot be acquired by occupation. Article 714 makes no distinction between land that from the beginning had no owner, and land which has been under private ownership but later abandoned. In both cases, the land cannot be acquired by occupation. Note: Tolentino said that this provision was borrowed from the Argentine/ French, Chile, and Soviet Codes that likewise provide that abandoned property belong to the State. In our jurisdiction, however, no law provides that abandoned lands revert or belong to the state. Abandonment is a mere relinquishment of right; not a transfer of dominion to the State, there being no law providing for such transfer. Abandonment is a unilateral act of disposition which merely converts the land into res nullius. If the present article is to be applied literally, then such abandoned land cannot be acquired by anyone, even by the State, by occupation. The logical effect, therefore, of a literal application of this misplaced provision, a product of indiscriminate copying from foreign sources, is that abandoned lands will forever remain res nullius. Tolentino said that the present provision should be limited to lands belonging to the State. b. Privilege to hunt and fish regulated by special law Article 715. The right to hunt and to fish is regulated by special laws. The legislature may prohibit the killing of game during certain seasons, and a license may be required for hunting during the open season. c.
Occupation of a swarm of bees or domesticated animals Article 716. The owner of a swarm of bees shall have a right to pursue them to another’s land, indemnifying the possessor of the latter for the damage. If the owner has not pursued the swarm, or ceases to do so within two consecutive days, the possessor of the land may occupy or retain the same. The twenty days to be counted from their occupation by another person. This period having expired, they shall pertain to him who has caught and kept them. 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.
The provisions concerning domesticated animals refer to animals that have been abandoned and have been taken into possession by another in default of the lawful possessor. Hence, it cannot apply when the animals have been delivered to the custody of another. Domesticated animals are those which were originally wild, but have been captured, tamed and accustomed to people. They belong to those who captured and tamed them. If they escape and regain their original state of freedom, they will cease to belong to their former owners. If they have been caught by another, the former owner may still recover them within twenty days. Domestic or tame animals are those born and ordinarily raised under the care of people. They are subject to the rules of law on ordinary movable property, and they are not susceptible of occupation unless they are abandoned by their owners. d. Pigeons and fish Article 717. Pigeons and fish which from their respective breeding places pass to another pertaining to a different owner shall belong to the latter, provided they have not been enticed by some artifice or fraud. The pigeons and fish must pass from their breeding place to another breeding place belonging to a different owner. Since De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
116
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Property Reviewer
the law considers such animals as part of the immovable where the breeding place is located (Art. 415, par. 6), they become property of the owner of the breeding place to which they have transferred. e. Hidden treasure Article 718. He who by chance discovers hidden treasure in another’s property shall have the right granted him in article 438 of this Code. Article 438. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-­‐half thereof shall be allowed to the finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure. If the things found be of interest to science or the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. Article 439. By treasure is understood, for legal purposes, any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear. f.
Lost movables; procedure after finding lost movables Article 719. Whoever finds a movable, which is not treasure, must return it to its previous possessor. If the latter is unknown, the finder shall immediately deposit it with the mayor of the city or municipality where the finding has taken place. The finding shall be publicly announced by the mayor for two consecutive weeks in the way he deems best. If the movable cannot be kept without deterioration, or without expenses which considerably diminish its value, it shall be sold at public auction eight days after the publication. Six months from the publication having elapsed without the owner having appeared, the thing found, or its value, shall be awarded to the finder. The finder and the owner shall be obliged, as the case may be, to reimburse the expenses. Article 720. If the owner should appear in 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. Lost things are those which are without a possessor, but are not res nullius. Any person who, having found lost property, shall fail to deliver the same to the local authorities or its owner, commits the crime of theft. A finder of lost property, therefore, can be charged with theft when he knows or learns who the owner is and still continues to retain the thing or appropriates it, with intent to gain. The finder may incur expenses in trying to locate the owner or in preserving the thing until its return to the latter. The law is silent on his right to recover the expenses. Tolentino said that there may be reimbursement of the expenses, aside from the reward to the finder, so long as these are reasonably necessary. The finder should not be penalized for his honesty and for his desire to avoid loss to the owner. The principle of agency and of negotiorum gestio can be applied. 2. 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. 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. 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 their publication or dissemination if the public good or the interest of justice so requires. Article 724. Special laws govern copyright and patent. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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The 1987 Constitution, Section 13 and 15, Article XIV, recognizes the exclusive rights of gifted citizens to their intellectual property and creations. 1987 Constitution. Article XIV Section 13. The State shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such period as may be provided by law. Section 15. Arts and letters shall enjoy the patronage of the State. The State shall conserve, promote, and popularize the nation’s historical and cultural heritage and resources, as well as artistic creations. Significance of the protection according to the Supreme Court: If the author of the book, after its publication, cannot prevent its reproduction by any person who may want to reproduce it, then the property granted to him is reduced to a very insignificant thing and effort made in the publication of the book is in no way rewarded. Ownership over works is recognized even before publication, copyrighting and patenting (Article 722): The author or composer shall have ownership of their creations even before they are published. The painter, the sculptor, or other artist has ownership of the products of his artistic works even before they are copyrighted. The scientist or technologist has the ownership of his discovery or invention even before it is patented. Dual interests in letters and other private communication in writing (Article 723): 1) From the viewpoint of the sender or writer – the intellectual property consists in the ideas and thoughts expressed therein. The sender or writer is the owner of these thoughts or ideas. He retains his ownership over them and can have them published even without the consent of the recipient. 2) From the viewpoint of the recipient – the paper or material used where the writing was impressed or done, pertains in ownership to the recipient. The recipient can destroy the letter if he wants to without the knowledge and consent of the writer for he is under no obligation to keep and preserve it for the writer. If he loses it, he can recover it from the finder or possessor, just like any lost personalty, even from the sender himself. Special law that govern copyright and patent (Article 724): RA8293 – Intellectual Property Code of 1997 Intellectual Property Rights: a. Copyright and related rights A copyright is an intangible, incorporeal right granted by statute to the author or originator of certain literary or artistic productions, whereby he is invested, for a specific period, with the sole and exclusive privilege of multiplying copies of the same and publishing and selling them. Purpose of the law: The purpose of the copyright law is not so much to protect and control any visible thing as it is to secure a limited monopoly of the right to publish the production which is the result of the author’s thought and to make known this right to the public. In other words, the law recognizes artistic or literary productions not only in respect of ownership of the thing created, but also in respect of the intangible estate arising from the privilege of publishing and selling to others copies of the thing produced. Kinds: 1) Common law copyright – right of the author to prohibit publication of his works without his authority or consent. These embrace literary works, including private correspondence. But if the work is unqualifiedly released to the public, without securing statutory copyright, it becomes public property. 2) Statutory copyright – monopoly in: a) Publication, printing, sale and reproduction of the author’s intellectual creations; b) Translations, arrangements, and adaptations; c) Exhibitions, performances, reproductions; d) Other lawful uses including radio broadcasts. 3) In private correspondence, distinguish the author’s copyright from ownership of the corpus of the letter, which is like any movable. Laws on copyright: 1) The law of January 10, 1879 on Intellectual Property 2) Act 3134, as amended by RA 167 No copyright may be obtained on: 1) Works on the public domain 2) Official documents 3) Speeches, lectures, dissertations in courts, administrative tribunals, assemblies and public meetings 4) Immoral or unchaste works Procedure of procuring copyright: 1) Application with an affidavit as to the date of publication 2) Deposit of two complete copies 3) Publication with notice of the copyright (copyright, name, date) or notice of reserved publication Note: absent of notice renders an infringement innocent Rules on copyright ownership: 1) In the case of original literary and artistic works, copyright shall belong to the author of the work. 2) In the case of works of joint ownership, the co-­‐authors shall be the original owners of the copyright and in the De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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absence of agreement, their rights shall be governed by the rules on co-­‐ownership. If, however, a work of joint authorship consists of parts that can be used separately and the author of each part can be identified, the author of each part shall be the original owner of the copyright in the part that he has created. In the case of work created by an author during and in the course of his employment, the copyright shall belong to: a) The employee, if the creation of the object of copyright is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer. b) The employer, if the work is the result of the performance of his regularly-­‐assogned duties, unless there is an agreement, express or implied, to the contrary. In the case of a work commissioned by a person other than an employer of the author and who pays for it and the work is made in pursuance of the commission, the person who so commissioned the work shall have ownership of the work, but the copyright thereto shall remain with the creator, unless there is a written situation to the contrary. In the case of audiovisual work, the copyright shall belong to the producer, the author of the scenario, the composer of the music, the film director, and the author of the work so adapted. However, subject to contrary or other stipulations among the creators, the producer shall exercise the copyright to an extent required for the exhibition of the work in any manner, except for the right to collect performing license fees for the performance of musical compositions, with or without words, which are incorporated into the work. In respect of letters, the copyright shall belong to the writer subject to the provisions of Article 723 of the Civil Code. The protection lasts for 30 years renewable for another 30 years. In case of serial publications, 40 years from the publication of the 1st volume, renewable for an equal period. Remedies for infringement: 1) Injunction 2) Actual damages or damages not less than ₱200 nor more than ₱10,000.00 Foreign copyrights: registration may be had on the basis of reciprocity. Copyrights are not subject to levy or attachment. b. Trademarks, trade-­‐names and service marks Definitions under the Trademark Law (RA 166): Trademark – includes any word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured, sold or dealt in by others. Trade-­‐name – includes individual names and surnames, firm names, trade-­‐names, devices or words used by manufacturers, industrialists, merchants, agriculturists, and others to identify their business, vocations or occupations; the names and titles lawfully adopted and used by natural or juridical persons, unions, and any manufacturing industrial, commercial, agricultural or other organizations engaged in trade or commerce. Service mark – means a mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others and includes without limitation the marks, names, symbols, titles, designations, slogans, character names, and distinctive features of radio and other advertising. The Intellectual Property Code provides the following definition of the aforementioned terms: Mark – any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods. Trade-­‐name – the name or designation identifying or distinguishing an enterprise. The function of a trademark is to point distinctively, either by its own meaning or by association, to the origin or ownership of the wares to which it is applied. When a trademark or trade-­‐name is duly registered in the Bureau of Trademark under the Intellectual Property Office, it shall pertain in ownership to the person or juridical entity which registered it. Trademark and Trade-­‐name, distinguished: A trademark is generally described as a sign, device or mark by which articles produced or dealt in by a particular person or organization are distinguished or distinguishable from those produced or dealt in by others, and must be affixed to the goods or articles. A trade-­‐name is descriptive of the manufacturer or dealer himself as much as his own name is, and frequently includes the name of the place where the business is located. It involves the individuality of the maker or dealer for protection in trade, and to avoid confusion in business, and to secure the advantages of a good reputation. It is more popularly applied to the goodwill of a business and need not be affixed to the goods sold. Goodwill means reputation for competence, honesty, and fair-­‐dealing and its value is in attracting customers. Determination of infringement of trademark – Test of Dominancy: If the competing trademark contains the main or essential or dominant features of another, and confusion and deception is likely to result, infringement takes place. Infringement of a trademark is shown by a comparison of the trademark with the alleged infringing trademark, and a demonstration of resemblance between the two such as De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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would likely to cause the one mark to be mistaken for the other. What constitutes infringement under the Intellectual Property Code (Section 155): 1) Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or 2) Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth: Provided, That the infringement takes place at the moment any of the acts stated in Subsection 155.1 or this subsection are committed regardless of whether there is actual sale of goods or services using the infringing material. c.
Geographic indications of origin False designation of origin or false description or representation is punishable under the RPC, Article 189. False Designations of Origin; False Description or Representation. -­‐ 169.1. Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which: (a) Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person; or (b) In commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable to a civil action for damages and injunction provided in Sections 156 and 157 of this Act by any person who believes that he or she is or is likely to be damaged by such act. 169.2. Any goods marked or labelled in contravention of the provisions of this Section shall not be imported into the Philippines or admitted entry at any customhouse of the Philippines. The owner, importer, or consignee of goods refused entry at any customhouse under this section may have any recourse under the customs revenue laws or may have the remedy given by this Act in cases involving goods refused entry or seized.
Example of false designation of origin: where the accused caused to be affixed in the labels of the bottle containers of the food seasoning a designation of origin that the said food seasoning was packed by Chams Products Co. of San Francisco, California, when in truth it was packed in the Philippines. d. Industrial designs An industrial design is any composition of lines or colors or any three-­‐dimensional form, whether or not associated with lines or colors: Provided, that such composition or form gives a special appearance to and can serve as pattern for an industrial product or handicraft. e. Patents A patent is an exclusive right to an invention granted to a patentee, his heirs or assigns for the term thereof. Patentable invention – any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable shall be patentable. It may be, or may relate to, a product, or process, or an improvement of any of the foregoing. Essential elements of an invention to be patentable: To be called an invention, an object must possess the essential elements of novelty, originality and precedence. Novelty – An invention shall not be considered new if it forms part of a prior art Prior art – it shall consist of: i) Everything which has been made available to the public everywhere in the world, before the filing date or the priority date of the application claiming the invention; ii) The whole contents of an application for a patent, utility model, or industrial design registration, published in accordance with the Act, filed or effective in the Philippines, with a filing or priority date that is earlier than the filing or priority date of the application: Provided, that the application which has validly claimed the filing date of an earlier application shall be prior art with effect as of the filing date of such earlier application: Provided further, that the application or the inventor identified in both application or the inventor identified in both applications are not one and the same. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Non-­‐patentable inventions: 1) Discoveries, scientific theories and mathematical methods 2) Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computers 3) Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on human or animal body. This provision shall not apply to products and composition for use in any of these methods 4) Plant varieties or animal breeds or essentially biological process for the production of plants or animals. This provision shall not apply to micro-­‐organisms and non-­‐
biological and microbiological processes Provisions under this subsection shall not preclude Congress to consider the enactment of a law providing sui generis protection to plan varieties and animal breeds and a system of community intellectual rights protection: 5) Aesthetic creations; 6) Anything that is contrary to public order or morality. Basis: 1) There must be an invention (exercise of ingenuity, beyond mere mechanical skill in the art, to produce a new and useful result 2) Of a new and useful machine, product or substance, of possible advantage to the public 3) Not previously known or used, or described in printed publications, or in public use or on sale in the Philippines or covered by any prior patent 4) Includes new and original industrial designs (shape, pattern or appearance) 5) The invention is not patentable if: a) Contrary to public order, morals, public health or welfare b) It is an abstract idea or principle or theorem Procedure in the Patent Office (before the Commissioner of Parents, whose decision is directly appealable to the Supreme Court): 1) Sworn application by the true and actual inventor or his heirs, representatives or assigns; 2) Specifications (description and claims); 3) Payment of fees; 4) Foreign applications on a reciprocity or a treaty basis should be filed here within 12 months Rights conferred by patent: 1) Where the subject matter of a patent is a product – right to restrain, prohibit and prevent any unauthorized person or entity from making, using, offering for sale, selling or importing that product; 2) Where the subject matter of a patent is a process – right to restrain, prevent, or prohibit any unauthorized person or entity from using the process, and from manufacturing, dealing in, using, selling, or offering for sale, or importing any product obtained directly or indirectly from such process. Patent owners shall also have the right to assign, or transfer by succession the patent, and to conclude licensing contracts for the same. A patent confers exclusive right to make, use or sell in the Philippines, except (1) as against the government and (2) use for research, experiment or instruction. Remedies for infringement: 1) Injunction 2) Damages up to the extent of 3 times the actual amount. These may be in the form of royalty. The damages are not recoverable if no notice is given of the patent or after 4 years of infringement. Foreign patents are recognized upon the basis of reciprocity. Cancellation may be had, after hearing in the Patent Office, on the following grounds: 1) That it is not new or patentable; 2) That there has been faulty specification; 3) That the patenty is not the true or actual inventor, or assignee thereof. f.
Topographies of integrated circuits g. Rights of performers, producers of sound recordings and broadcasting organizations "Performers" -­‐ actors, singers, musicians, dancers, and other persons who act, sing, declaim, play in, interpret, or otherwise perform literary and artistic work; "Sound recording" -­‐ the fixation of the sounds of a performance or of other sounds, or representation of sound, other than in the form of a fixation incorporated in a cinematographic or other audiovisual work; "Audiovisual work or fixation" -­‐ a work that consists of a series of related images which impart the impression of motion, with or without accompanying sounds, susceptible of being made visible and, where accompanied by sounds, susceptible of being made audible; "Fixation" -­‐ the embodiment of sounds, or of the representations thereof, from which they can be perceived, reproduced or communicated through a device; "Producer of a sound recording" -­‐ the person, or the legal entity, who or which takes the initiative and has the responsibility for the first fixation of the sounds of a performance or other sounds, or the representation of sounds; "Publication of a fixed performance or a sound recording" -­‐ the offering of copies of the fixed performance or the sound recording to the public, with the consent of the right holder: De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Provided, That copies are offered to the public in reasonable quality; "Broadcasting" -­‐ the transmission by wireless means for the public reception of sounds or of images or of representations thereof; such transmission by satellite is also "broadcasting" where the means for decrypting are provided to the public by the broadcasting organization or with its consent; "Broadcasting organization" -­‐ include a natural person or a juridical entity duly authorized to engage in broadcasting; and "Communication to the public of a performance or a sound recording" -­‐ the transmission to the public, by any medium, otherwise than by broadcasting, of sounds of a performance or the representations of sounds fixed in a sound recording. For purposes of Section 209, "communication to the public" includes making the sounds or representations of sounds fixed in a sound recording audible to the public.
Scope of performers’ rights: 1) As regards their performances, the right of authorizing: a) The broadcasting and other communication to the public of their performance; and b) The fixation of their unfixed performance. 2) The right of authorizing the direct or indirect reproduction of their performances fixed in sound recordings, in any manner or form; 3) Subject to the provisions of Section 206, the right of authorizing the first public distribution of the original and copies of their performance fixed in the sound recording through sale or rental or other forms of transfer of ownership; 4) The right of authorizing the commercial rental to the public of the original and copies of their performances fixed in sound recordings, even after distribution of them by, or pursuant to the authorization by the performer; and 5) The right of authorizing the making available to the public of their performances fixed in sound recordings, by wire or wireless means, in such a way that members of the public may access them from a place and time individually chosen by them. Moral rights of performers: 1) Independently of a performer's economic rights, the performer, shall, as regards his live aural performances or performances fixed in sound recordings, have the right to claim to be identified as the performer of his performances, except where the omission is dictated by the manner of the use of the performance, and to object to any distortion, mutilation or other modification of his performances that would be prejudicial to his reputation. 2) The rights granted to a performer in accordance with Subsection 203.1 shall be maintained and exercised fifty (50) years after his death, by his heirs, and in default of heirs, the government, where protection is claimed. Rights of producers of sound recordings: 1)
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The right to authorize the direct or indirect reproduction of their sound recordings, in any manner or form; the placing of these reproductions in the market and the right of rental or lending; The right to authorize the first public distribution of the original and copies of their sound recordings through sale or rental or other forms of transferring ownership; and The right to authorize the commercial rental to the public of the original and copies of their sound recordings, even after distribution by them by or pursuant to authorization by the producer. Rights of broadcasting organizations: 1) The rebroadcasting of their broadcasts; 2) The recording in any manner, including the making of films or the use of video tape, of their broadcasts for the purpose of communication to the public of television broadcasts of the same; and 3) The use of such records for fresh transmissions or for fresh recording. Limitations on protection: 1) The use by a natural person exclusively for his own personal purposes; 2) Using short excerpts for reporting current events; 3) Use solely for the purpose of teaching or for scientific research; and 4) Fair use of the broadcast subject to the conditions under Section 185. h. Protection of undisclosed information i.
Laws repealed by the Intellectual Property Code (Sec. 239) Section 239. Repeals. -­‐ 239.1. All Acts and parts of Acts inconsistent herewith, more particularly Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are hereby repealed. 239.2. Marks registered under Republic Act No. 166 shall remain in force but shall be deemed to have been granted under this Act and shall be due for renewal within the period provided for under this Act and, upon renewal shall be reclassified in accordance with the International Classification. Trade names and marks registered in the Supplemental Register under Republic Act No. 166 shall remain in force but shall no longer be subject to renewal. 239.3. The provisions of this Act shall apply to works in which copyright protection obtained prior to the effectivity of this Act is subsisting: Provided, That the application of this Act shall not result in the diminution of such protection. All Acts and part of Acts that are inconsistent with the Intellectual Property Code: De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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PD 49 – Intellectual Property Decree, including PD 285, as amended RA 165, as amended – Patent Law RA 166, as ameded – An Act to Provide for the Registration of Trademarks, Trade-­‐names and Service-­‐
names Articles 188 and 189 of the RPC B. Derivative Modes Derivative modes of acquiring ownership are based on a right previously held by another person, and therefore, subject to the same characteristics, powers, burdens, etc. as when held by previous owner. Derivative mode may be by transfer or constitution of rights. There is a transfer when the person transmits the right in its entirety to another, thereby definitely losing the right. e.g. in a contract of sale, when there is a tradition of the thing sold. There is a constitution of right when a person does not transmit his right in its entirety, but only a part thereof, which is inferior in character. e.g. a mortgage, usufruct or other encumbrance in favor of another is created in one’s property. 1. Law There is no specific Article in the Code covering law as one of the modes of acquiring ownership. “Law” as a mode of acquiring ownership should be interpreted to apply only to situations where ownership is vested independently of the other modes of acquisition. Registration – Act 496, The Land Registration Act Land registration is not a mode of acquiring ownership. It merely confirms the existence of one’s ownership over a property with notice to the whole world. It must be noted though that in double sale or double donation of realty, registration is made to prevail over possession. Registration does not vest title. It is merely an evidence of such title over a particular property. Purposes of registration: 1) To give notice to the whole world about the true status of real property, and existing real rights thereon; 2) To bind third persons who may come and transact contracts on the property. Titles of ownership, or other rights over immovable property, if not annotated in the Registry of Property shall not prejudice third persons, unless they have actual knowledge of the transaction involved; 3) To prevent the perpetration of frauds by plugging loopholes which facilitate the unlawful transfers of property. Estoppel of title Article 1434. When a person who is not the owner of the thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee. Marriage under absolute community of property system Hidden treasure Accession Article 445. Whatever is built, planted or sown on the land of another and the repairs or improvements made thereon, belong to the owner of the land, subject to the provisions of the following articles. Change in river’s course Article 461. River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are occupied by the new course in proportion to the area lost. However, the owners of the lands adjoining the old bed shall have the right to acquire the same by paying the value thereof, which value shall not exceed the value of the area occupied by the new bed. Accession continua over movables 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. Article 681. Fruits naturally falling upon adjacent land belong to the owner of said land. Article 1456. If property is acquired through mistake or fraud, the person is obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person for whom the property comes. FC Article 120. The ownership of improvements, whether for utility or adornment, made on the separate property of the spouses at the expense of the partnership or through the acts or efforts of either or both spouses shall pertain to the conjugal partnership, or to the original owner-­‐spouse, subject to the following rules: When the cost of the improvement made by the conjugal partnership and any resulting increase in value are more than the value of the property at the time of the improvement, the entire property of one of the spouses shall belong to the conjugal partnership, subject to reimbursement of the value of the property of the owner-­‐spouse at the time of the improvement; otherwise, said property shall be retained in ownership by the owner-­‐spouse, likewise subject to reimbursement of the cost of the improvement. In either case, the ownership of the entire property shall be vested upon the reimbursement, which shall be made at the De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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time of the liquidation of the conjugal partnership. 2. Donation – see separate section 3. Succession mortis causa Article 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law. Article 776. The inheritance includes all the property, rights and obligations of a person which are not extinguished by his death. Article 777. The rights to the succession are transmitted from the moment of the death of the decedent. Elements of succession: 1) It is a mode or way of acquiring ownership 2) There is a transmission of property, rights and obligations to another or others. 3) The cause of transmission is the death of the decedent 4) The procedure of transmission may be by will or operation of law 5) The acceptance of the inheritance by the heir. Rights to the succession are vested as of the moment of death of the decedent. Until the death had supervened, the right to succession is merely speculative for in the meantime, the law may change, the will of the testator may vary, or the circumstances may be modified to such an extent that he who expects to receive the property may be deprived of it. The moment of death is the determining point when an heir acquires a definite right to the inheritance. Succession v. Inheritance: Succession is a mode of acquiring ownership which arises when a predecessor dies. Inheritance refers to the object of succession, that is, the mass or totality of the patrimony of the deceased person that will be transferred to his heirs or estate upon his death. 4. (Acquisitive) Prescription Article 1106. By prescription, one acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law. In the same way, rights and conditions are lost by prescription.
Article 1107. Persons who are capable of acquiring property or rights by the other legal modes may acquire the same by means of prescription. Minors and other incapacitated persons may acquire property or rights by prescription, either personally or through their parents, guardians or legal representatives. Article 1108. Prescription, both acquisitive and extinctive, runs against: (1) Minors and other incapacitated persons who have parents, guardians or other legal representatives; (2) Absentees who have administrators, either appointed by them before their disappearance, or appointed by the courts; (3) Persons living abroad, who have managers or administrators; (4) Juridical persons, except the State and its subdivisions. Persons who are disqualified from administering their property have a right to claim damages from their legal representatives whose negligence has been the cause of prescription. Article 1109. Prescription does not run between husband and wife, even though there be a separation of property agreed upon in the marriage settlements or by judicial decree. Neither does prescription run between parents and children, during the minority or insanity of the latter, and between guardian and ward during the continuance of the guardianship. Article 1110. Prescription, acquisitive and extinctive, runs in favor of, or against a married woman. Article 1111. Prescription obtained by a co-­‐proprietor or a co-­‐
owner shall benefit the others. Article 1112. Persons with capacity to alienate property may renounce prescription already obtained, but not the right to prescribe in the future. Prescription is deemed to have been tacitly renounced when the renunciation results from acts which imply the abandonment of the right acquired. Article 1113. All things which are within the commerce of men are susceptible of prescription, unless otherwise provided. Property of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Article 1114. Creditors and all other persons interested in making the prescription effective may avail themselves thereof notwithstanding the express or tacit renunciation by the debtor or proprietor. Prescription is a mode of acquiring (or losing) ownership and other real rights thru the lapse of time in the manner and under the conditions laid down by law, namely, that the possession should be: 1) In the concept of an owner; 2) Public; 3) Peaceful; 4) Uninterrupted; 5) Adverse – claimant clearly, definitely, and unequivocally notify the owner of his intention to advert an exclusive ownership in himself. Acquisitive Prescription Extinctive Prescription (also called usucapcion) vests the property and raise a new Statute of limitation title in the occupant Positive action of the Inaction or neglect of the possessor owner The acquisition of ownership or other real rights through prescription is retroactive – once the period is completed; the new owner is considered as having acquired the thing or right from the moment the period began to run. Persons capable of acquiring property or rights by other legal modes may acquire the same by means of prescription. Minors and other incapacitated persons may acquire property rights by prescription, either personally or through their parents, guardians or legal representatives. But in order for them to acquire by prescription, it is necessary that they must have discernment, because the animus rem sibi habiendi (intent to appropriate the thing as one’s own) is an essential element of possession. When discernment is wanting, they can acquire by prescription only through their legal representatives. Prescription runs against all persons having full civil capacity, and even against: Minors and other incapacitated persons who have parents, guardians or other legal representatives; Absentees who have administrators, either appointed by them before their disappearance, or appointed by the courts; Persons living abroad, who have managers and administrators; and Juridical persons, except the state and its subdivisions. What cannot be acquired by prescription: movables possessed through crime and lands registered under the Torrens system Kinds of prescription: 1) As to whether rights are acquired or lost a)
2)
Acquisitive prescription i) Ordinary prescription ii) Extraordinary prescription b) Extinctive prescription As to the object or subject matter a) Prescription of property i) Prescription of real property ii) Prescription of personal property b) Prescription of rights Requisites common to ordinary and extraordinary acquisitive prescription: 1) Capacity of the acquirer to acquire by prescription 2) Capacity of the loser to lose by prescription 3) Object must be susceptible of prescription 4) Lapse of required period of time a) Ordinary acquisitive prescription i) Movable property – 4 years ii) Immovable property – 8 years b) Extraordinary acquisitive prescription i) Movable property – 10 years ii) Immovable property – 30 years 5) The possession must be: a) In concepto de dueño (concept of owner) b) Public (not clandestine nor non-­‐apparent) c) Peaceful (not thru force, violence, or intimidation) d) Continuous or uninterrupted Additional requisites for ordinary acquisitive prescription: 1) Good faith 2) Just title (there was a mode of acquiring ownership but the grantor was not the owner; hence, the just title here is “titulo colorado” or “colorable title” Good faith – reasonable belief that the person from whom he received the thing was the owner thereof, and could transmit his ownership Good faith must last throughout the whole period. Good faith may later be changed to bad faith. In such case, how many more years of possession would be required? 1) For real property, 3 years of possession in bad faith would be equivalent to one year of possession in good faith. Reason: 30 years would be required for extraordinary prescription, but only 10 years are needed for ordinary prescription. 2) For personal property, two years of possession in bad faith would be equivalent to one year in good faith. Reason: Extraordinary prescription needs 8 years, ordinary prescription needs 4 years. Just title – 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. (Article 1129) For the purposes of prescription, just title must be proved; it is never presumed. (Article 1131) De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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In the concept of owner – possession not by mere tolerance of owner but adverse to that of the owner; possessor claims that he owns the property A possessor in the concept of a holder cannot acquire property by prescription because his possession is not adverse. Public, peaceful and uninterrupted – possessor is known to be the owner of the thing; he acquired and maintained the thing without violence Prescription may be interrupted for the purposes of prescription: 1) Natural interruption: when through any cause, possession should cease for more than 1 year w Possession de facto is lost if the property be in possession of another for more than 1 year. w If the natural interruption is only one year or less, the time elapsed shall be counted in favor of the prescription (Article 1121) – as if no interruption w If prescription is interrupted, the old possession will generally not be counted. The period must begin all over again. 2) Civil interruption: produced by judicial summons to the possessor w Judicial summons shall be deemed not to have been issued and shall not give rise to interruption (Article 1124): i) If it should be void for lack of legal solemnities; ii) If the plaintiff should desist from the complaint or should allow the proceedings to lapse; iii) If the possessor should be absolved from the complaint. 3) Any express or tacit recognition which the possessor may make over the owner’s right also interrupts possession. (Article 1125) Rules for computation of time: Article 1138. In the computation of time necessary for prescription the following rules shall be observed: (1) The present possessor may complete the period necessary for prescription by tacking his possession to that of his grantor or predecessor in interest; (2) It is presumed that the present possessor who was also the possessor at a previous time, has continued to be in possession during the intervening time, unless there is proof to the contrary; (3) The first day shall be excluded and the last day included. Tacking of possession – adding the period of possession of the predecessor Reason: the true owner of the property was after all not in possession during the possession of said predecessor Tacking is allowed only if there be privity of relationship between the predecessor and the successor, as in the case of succession, donation, sale, barter, etc. Thus, a mere intruder or usurper cannot tack. Tacking by a subsequent possessor of his predecessor’s possession can be allowed if the predecessor’s possession can satisfy the requisites for prescription. Prescription of actions: Article 1139. Actions prescribe by the mere lapse of time fixed by law. In general, prescription of action is available as a defense. To be asserted as such, it must be specifically pleaded and proved. Lapse of time fixed by law: 1) 8 years from the time possession is lost – actions to recover movables (Article 1140) 2) 30 years – real action to recover immovables (Article 1141) w Refers to extraordinary prescription for immovables w Possession de jure of an immovable is lost at the end of 10 years 3) 10 years w From the day the action could have been brought – mortgage action (Article 1142) w From the time the right of action accrues upon a written contract (Article 1144) w From the time the right of action accrues upon an obligation created by law (Article 1144) w From the time the right of action accrues upon a judgment (Article 1144) 4) 6 years w Upon an oral contract (Article 1145) w Upon a quasi-­‐contract (Article 1145) 5) 4 years w Upon an injury to the rights of the plaintiff (Article 1146) w Upon a quasi-­‐delict (Article 1146) 6) 1 year w For forcible entry and detainer (Article 1147) w For defamation (Article 1147) 7) 5 years from the time the right of action accrues for all other actions whose periods are not fixed in the Civil Code or in other laws (Article 1149) Rights and actions not extinguished by prescription: 1) Right to demand a right of way (Article 1143) 2) Right to bring an action to abate a public or private nuisance (Article 1143) 3) The action to demand partition of a co-­‐ownership (Article 494) 4) The action for the quieting of title so long as the plaintiff is in possession of the property 5) An action to recover property expressly placed in trust, unless such trust has been repudiated unequivocally 6) An action by the registered owner of land to recover possession of said land 7) An action brought by a buyer of land to compel the seller to execute the proper deed of conveyance, provided that said buyer is still in possession of the land De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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5. Tradition as a consequence of certain contracts Tradition is a derivative mode of acquiring ownership and other real rights whereby, there being intention and capacity on the part of the grantor and grantee and pre-­‐existence of said rights on the part of the grantor, they are transmitted to the grantee through a just title. Requisites of tradition: 1) Pre-­‐existence of right in estate of grantor 2) Just cause or title for the transmission 3) Intention – of both grantor and grantee 4) Capacity – to transmit and to acquire 5) An act of giving it outward form, physically, symbolically, or legally Legal maxim: “Non nudis practis, sed traditione dominia rerum transferentur.” “Not by mere agreement, but by delivery, is ownership transferred.” The delivery of a thing constitutes a necessary and indispensable requisite for the purpose of acquiring the ownership of the same by virtue of a contract. Kinds of tradition: 1) Real tradition – physical delivery of the thing; actual transfer of control and possession with intent to pass ownership or real tight over the property. If the thing is movable, it contemplates a hand-­‐to-­‐hand transfer of the thing If the thing is an immovable, it contemplates material acts performed by the grantee, i.e. taking possession of the immovable 2) Constructive tradition – not the real or material delivery of the thing that may take place in any of the following situations: a) Symbolic delivery – delivery of signs or things which represent that which is being transmitted b) Delivery of public instrument – the substitution of the real delivery of possession by a public writing with the delivery of a document which evidences tradition c) Traditio longa manu – pointing of the thing (movable property) within sight by the grantor to the grantee d) Traditio brevi manu – grantee’s continuous possession over the thing delivered but now under the title of ownership (like a lessee who had purchased the property leased to him and later continues to possess it as the owner thereof) e) Traditio constitutum possessorium – the owner remains in possession of the thing but in another concept f)
Quasi-­‐tradition – delivery of incorporeal things or rights by the grantee of his right with the owners consent g) Tradition by operation of law De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Donation
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Part 11. Donation A. Nature of donation A bilateral contract creating unilateral obligations on the donor’s part Concept: Donation is a contract since it requires consent of both donor and donee, though it produces obligations only on the side of the donor. The French Civil Code (followed by the Italian and the Spanish) termed it an act at Napoleon’s insistence who couldn’t conceive (although erroneously) that a contract could be unilateral in effects. (Scaevola) B. Requisites of donation 1) Consent and capacity of the parties 2) Animus donandi (causa) [intention to donate] 3) Delivery of thing donated 4) Form as prescribed by law NOTE: There must be impoverishment (in fact) of donor’s patrimony and enrichment on the part of done Elements in common with other contracts 1. Consent and capacity of parties 2. Subject matter 3. Cause (liberality) 4. Form as prescribed by law Essential features of true donations 1. Alienation of property by the donor during his lifetime, which is accepted. A commitment whereby services are given gratuitously is a binding transaction. 2. Irrevocability by the donor 3. Intention to benefit the donee (animus donandi) The emphasis in donations is on liberality, not mere gratuitousness. Thus, commodatum is gratuitous but is not donation. 4. Consequent impoverishment of the donor (diminution of his assets) C.
Kinds of donations 1.
As to its taking effect (revocability at the donor’s option) a. Inter vivos 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 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. Article 731. When a person donates something, subject to the resolutory condition of the donor's survival, there is a donation inter vivos. Donations inter vivos take effect independently of the donor’s death. These take effect (as alienations of property) upon acceptance and thereafter are no longer revocable by the donor alone. Irrevocable except for the following grounds: Subsequent birth of the donor’s children Donee’s failure to comply with imposed conditions Donee’s ingratitude Reduction of the donation by reason of inofficiousness Differential tests for donations inter vivos In donations inter vivos with deferred execution until the donor’s death, there’s no option to revoke at will before the donor dies Even if transfer of actual (physical) possession is suspended until then It’s donation inter vivos even if there is no immediate delivery. Designation as mortis causa of the deed of donation is not controlling Neither is the provision that the donation is to take effect at the donor’s death CC 730, 731 b. Mortis causa 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. Donations mortis causa become effective upon the death of the donor. These are effective as gratuitous dispositions of property upon the donor’s death. They are revocable at will. Distinction must be made between donations mortis causa and donations inter vivos subject to a suspensive term (“at the death of the donor”), i.e. between transfer of title and transfer of mere possession Mortis causa donations partake of the nature of testamentary provisions and are governed by the rules of testamentary successions, as to requisites and form. Form is that of testaments. Exception: those made between future spouses Differential tests for donations mortis causa De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Donor’s death ahead of the donee is a suspensive condition for the existence of the donation Revocable upon the exclusive will of the donor Characteristics: -­‐ Transferor retains ownership (full or naked) and control of the property while alive -­‐ Transfer is revocable at will before his death -­‐ Transfer will be void if the transferor should survive the transferee Donation merely transfers administration of the property before the donor’s death Inter vivos v Mortis causa Inter vivos Mortis causa Executed and Must be in the form of accepted with a will, with all the formalities prescribed formalities for the by CC 748 & 749 As to validity of wills Exception: for formalities Otherwise, it’s onerous void and cannot donations, the transfer rules of contracts ownership. apply As to Effective during the Effective after the effectivity lifetime of the donor death of the donor Acceptance must be made after the death of the donor, the donation being effective only after Acceptance must be the death of donor. As to made during the Acceptance during acceptance lifetime of the donor the donor’s lifetime is premature and ineffective because there can be no contract regarding future inheritance As to Ownership is transfer of immediately Ownership is ownership transferred. Delivery transferred after for right of of possession is death disposition allowed after death Irrevocable – may be Revocable upon the As to revoked only for the exclusive will of the revocation reasons provided in donor CC 760, 764, 765 When it is excessive or inofficious, being As to When it is excessive preferred, it is reduction or inofficious, it is reduced only after the or reduced first, or even donations mortis suppression suppressed causa had been reduced or exhausted The nature of the act, whether it’s one of disposition or of execution, is controlling to determine whether the donation is mortis causa or inter vivos. Not dependent on donor’s death = inter vivos NOTE: In case of doubt, the conveyance should be deemed a donation inter vivos to avoid uncertainty as to the ownership of the property subject of the donation. c. Propter nuptias FC Article 82. Donations by reason of marriage are those which are made before its celebration, in consideration of the same, and in favor of one or both of the future spouses. FC Article 87. 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. Requisites of donations propter nuptias 1) Must be made before the celebration of the marriage 2) Made in consideration of the marriage 3) Made in favor of one or both of the future spouses Ordinary donations v Donations propter nuptias Ordinary Propter nuptias Express Necessary Not required acceptance As to Can’t be made by May be made by minors minors minors (FC 78) As to May include future Cannot include future future property (same rule as property property wills) Limit as to No limit to donation If present property is donation of present property donated and property of present provided legitimes are regime is ACP, limited property not impaired to 1/5 Grounds for Law on donations FC 86 revocation Void donations under FC 87 Donations between the spouses during the marriage Any grant of gratuitous advantage between the spouses during the marriage, direct or indirect Reasons for the prohibitions To prevent the weaker spouse from being influenced by the stronger spouse, whether by abuse of affection or by threats or violence To protect creditors To prevent an indirect modification of the marriage settlement during the marriage Exception to prohibitions Moderate gifts which the spouses may give each other on the occasion of any family rejoicing To determine if it’s a moderate gift, consider the family’s social position, its De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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financial condition, its usages and customs, and other circumstances of the parties 2.
As to cause or consideration a. Simple – made out of pure liberality or because of the merits of the donee b. Remuneratory – made for services already rendered to the donor (causam praeteritam) not constituting recoverable debts (e.g. saving the donor’s life) Distinction must be made to determine the regime which would govern the donation – the law on donations (for remuneratory donations) or the law on obligations and contracts (for onerous donations) What does not constitute a demandable debt per CC 726 Interpreted by Manresa to mean that the service rendered did not produce an obligation demandable against the donor, or if it had, such obligation has been renounced in favor of the donor. c.
equal to or more in value than the thing donated. (Lagazo v CA) 3.
As to effectivity or extinguishment a. Pure – the donation is without conditions or period b. Conditional – the donation is subject to conditions (future and uncertain events), suspensive or resolutory 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. Article 731. When a person donates something, subject to the resolutory condition of the donor's survival, there is a donation inter vivos. Effect of an impossible condition [lifted from D2008 magic notes] Onerous [imposes a burden inferior in value to property donated] Considered not written in simple and remuneratory donations; donee should disregard it as probably due to the donor’s quirkiness. In onerous donations, the donation will be considered void. It means the obligor never meant to be bound by the obligation. This is not so in simple and remuneratory donations because of the different cause – either pure liberality (simple) or intent to recompense for past debt (remuneratory) Made with a burden imposed upon donee; not true donations, being subject to the law of contracts If the value of the burden is not determinable when the donation is made, it’s governed wholly by the rules of contracts as an onerous donation i. Improper – burden equal in value to property donated ii. Sub-­‐modo or modal – e.g. imposes a prestation upon done as to how property donated will be applied iii. Mixed donations – negotium mixtum cum donatione e.g. sale for price lower than value of property Case: In 1985, Jacob executed a deed of donation in favor of her grandson Lagazo over a piece of land. He checked with the Registry of Property, found the land in the delinquent list, and paid the installment in arrears and the remaining balance on the lot. Lagazo asked Cabanlit to vacate the premises. The latter refused, claiming he acquired the property from someone to whom Jacob had sold the lot in 1977. The trial court ruled in Lagazo’s favor. CA reversed, holding that the donee’s failure to accept a donation renders it null and void. The donation to Lagazo was not onerous, and thus not ruled by the law on contracts. The deed clearly shows the donor did not intend to burden or charge Lagazo as the donee. The payments he made were voluntary. A simple or pure donation is one whose cause is pure liberality, while an onerous donation is one subject to burdens, charges, or future services c.
4.
With a term (suspensive or resolutory) Importance of classification a. As to form – depends on whether it’s inter vivos or mortis causa b. As to governing rules Inter vivos: rules on donation Mortis causa: rules on testate succession Simple and remuneratory: rules on donation Onerous: rules on contracts c.
As to impossible conditions Article 727. Illegal or impossible conditions in simple and remuneratory donations shall be considered as not imposed. Article 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be valid. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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The condition not to do an impossible thing shall be considered as not having been agreed upon. The donations referred to in CC 727 remain valid. Only the illegal or impossible condition is considered as not written. This article applies to the rule of testamentary dispositions (CC 873), because both donation and succession are gratuitous modes of transmitting ownership. 5.
Characteristics of a donation mortis causa a. Convey no title or ownership before donor’s death b. Before donor’s death transfer is revocable c. Transfer is void if donor survives done 6.
Distinction between donation mortis causa and donation inter vivos a. What is important is the time of transfer of ownership, even if transfer of property donated may be subject to a condition or a term b. Importance of classification – validity and revocation of donation Case: Domingo Bonsato executed two deeds of donation of several parcels of land in favor of his brother and nephew. His children filed a complaint, alleging the donations were mortis causa and void for lack of requisite formalities. The CFI ruled that they were donations inter vivos, but valid only as to an undivided ½ share in the parcels since the properties were presumptively conjugal. CA reversed, holding said donations null and void. The donations are valid. None of the requisites for a donation mortis causa is discernible in the subject deeds. The term “donations mortis causa” as now commonly employed is merely a convenient name to designate those dispositions of property that are void when made in the form of donations. Requisites of donation mortis causa 1) Transferor retains ownership (full or naked) and control of the property while alive 2) Transfer is revocable by the transferor at will, ad nutum, before his death 3) The transfer should be void if the transferor should survive the transferee (Bonsato v CA) Case: The spouses Danlag owned 6 parcels of land. They executed 3 deeds of donation mortis causa and 1 deed of donation inter vivos in favor of Pilapil. Six years later, they sold 2 of the 6 parcels to the spouses Gestopa and executed a deed of revocation recovering all parcels. The CA was correct in ruling against the Gestopas. Crucial in resolving whether the donation was inter vivos or mortis causa is the determination of whether the donor intended to transfer ownership over the properties upon the execution of the deed. In ascertaining the donor’s intention, all of the deed’s provisions must be read together. (Gestopa v CA) Case: Comerciante executed a deed of donation over a lot in favor of her 4 children. Four years later, she sold the subject property in favor of her daughter. Her other children filed an action to annul the TCT from the registration of the sale. The trial court dismissed, ruling it was a donation mortis causa per CC 728. CA reversed, holding it is a donation inter vivos. The donation is mortis causa. Whether the donation is inter vivos or mortis causa depends on whether the donor intended to transfer ownership over the properties upon the execution of the deed. The act of selling the property to Austria-­‐Magat can’t be considered a valid act of revocation of the deed because a formal case to revoke must be filed. An acceptance clause is a mark that the donation is inter vivos. Acceptance is a requirement for donations inter vivos. Donations mortis causa, being in the form of a will, are not required to be accepted by the donees during the donor’s lifetime. (Austria-­‐
Magat v CA) D. Who may give or receive donations Article 735. All persons who may contract and dispose of their property may make a donation. Article 737. The donor's capacity shall be determined as of the time of the making of the donation. Article 738. All those who are not specially disqualified by law therefor may accept donations. 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 children may be accepted by those persons who would legally represent them if they were already born. Capacity to donate – donor must have the capacity to donate and the capacity to dispose of property Required for donations inter vivos, not mortis causa Donor’s capacity determined as of the time of the donation, subsequent incapacity not being material. If incapacity prevents the donor from learning of the acceptance, there’s no donation. The donor’s capacity must be determined as of the perfection of the donation. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Donation
Property Reviewer
“Making of the donation” should be construed in the legal or juridical sense. It’s taken to mean “perfection of the donation” – it’s upon perfection that the donation is legally made. Capacity to accept donations – generally, all persons not disqualified by law may be donees. E.
Who may not give or receive donations Article 736. Guardians and trustees cannot donate the property entrusted to them. Article 739. The following donations shall be void: (1) Those made between persons who were 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, descedants 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 spouse of the donor or donee; and the guilt of the donor and donee may be proved by preponderance of evidence in the same action. Article 1027. The following are incapable of succeeding: (1) The priest who heard the confession of the testator during his last illness, or the minister of the gospel who extended spiritual aid to him during the same period; (2) The relatives of such priest or minister of the gospel within the fourth degree, the church, order, chapter, community, organization, or institution to which such priest or minister may belong; (3) A guardian with respect to testamentary dispositions given by a ward in his favor before the final accounts of the guardianship have been approved, even if the testator should die after the approval thereof; nevertheless, any provision made by the ward in favor of the guardian when the latter is his ascendant, descendant, brother, sister, or spouse, shall be valid; (4) Any attesting witness to the execution of a will, the spouse, parents, or children, or any one claiming under such witness, spouse, parents, or children; (5) Any physician, surgeon, nurse, health officer or druggist who took care of the testator during his last illness; (6) Individuals, associations and corporations not permitted by law to inherit. Article 1032. The following are incapable of succeeding by reason of unworthiness: (1) Parents who have abandoned their children or induced their daughters to lead a corrupt or immoral life, or attempted against their virtue; (2) Any person who has been convicted of an attempt against the life of the testator, his or her spouse, descendants, or ascendants; (3) Any person who has accused the testator of a crime for which the law prescribes imprisonment for six years or more, if the accusation has been found groundless; (4) Any heir of full age who, having knowledge of the violent death of the testator, should fail to report it to an officer of the law within a month, unless the authorities have already taken action; this prohibition shall not apply to cases wherein, according to law, there is no obligation to make an accusation; (5) Any person convicted of adultery or concubinage with the spouse of the testator; (6) Any person who by fraud, violence, intimidation, or undue influence should cause the testator to make a will or to change one already made; (7) Any person who by the same means prevents another from making a will, or from revoking one already made, or who supplants, conceals, or alters the latter's will; (8) Any person who falsifies or forges a supposed will of the decedent. Article 740. Incapacity to succeed by will shall be applicable to donations inter vivos. 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. 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. Disqualifications By reason of public policy (CC 739) 1) Those made between persons guilty of adultery or concubinage at the time of the donation Conviction not required and may be proved by preponderance of evidence De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Those made between persons guilty of the same criminal offense, if the donation is made in consideration thereof Those made to a public officer, his spouse, descendants, and/or ascendants, by reason of his office Applicable by analogy to extramarital relations By reason of donee’s unworthiness {CC 1032 and CC 1027 [except (4)]} 1) Priest/minister who heard testator’s confession or extended spiritual aid during latter’s last illness 2) Priest’s/minister’s church/order or relatives within the fourth degree 3) Guardian, as to testamentary dispositions given by a ward in his favor before the final accounts of the guardianship have been approved 4) Physician/surgeon/nurse/health officer/druggist who took care of testator during his last illness 5) Individuals/associations/corporations not permitted by law to inherit 6) Parents who abandoned their children or induced their daughters to lead a 7) Person convicted of an attempt against the life of testator/spouse/descendants/ascendants 8) Person who accused testator of a crime with imprisonment of 6 years or more, if found groundless 9) Heir who failed to report knowledge of testator’s violent death within a month 10) Anyone who caused testator to make or change a will by fraud, violence, undue influence, or intimidation 11) Anyone who uses the same means to prevent one from making or revoking a will, or to supplant, conceal, or alter the latter’s will 12) Anyone who falsifies or forges decedent’s supposed will By reason of prejudice to creditors or heirs (voidable) Donations to disqualified people are void even if made fictitiously a) under guise of another contract or b) through an intermediary These are the persons to whom donations can’t be made, such as those referred to in CC 739 and 740, as well as husband and wife who can’t donate to each other during the marriage Cases: Vitug asked court authority to sell certain properties belonging to his late wife’s estate to cover his advances to the estate. The executrix opposed, saying that the funds used were conjugal partnership funds. Vitug claimed the funds are his exclusive property, having acquired it through a survivorship agreement executed with his late wife and the bank. The survivorship agreement is valid. It is not a donation mortis causa, which should be embodied in a will. It’s not a donation inter vivos, because it was to take effect after the death of one party. It is not a donation between the spouses because it involved no conveyance of a spouse’s own properties to the other, said funds presumed to be conjugal. Mrs. Vitug having predeceased her husband, the latter acquired upon her death a vested right over the money in the savings account. (Vitug v CA) www Jose Hemedes executed a “Donation Inter Vivos with Resolutory Conditions” over a parcel of land in favor of his third wife Justa. Pursuant to the first condition, she executed a deed to convey to petitioner Maxima the subject property, while Justa retained usufructuary rights. Despite the earlier conveyance in favor of Maxima, she transferred the same land to her stepson. He sold it to Dominium Realty, which leased it to Asia Brewery. AB constructed warehouses; when Maxima found out, she wrote the company claiming she is the rightful owner. The second donation is null and void for the purported object didn’t exist at time of the transfer, having already been transferred to Maxima. Only the just utendi and jus fruendi over the property is transferred to the usufructuary. The owner of the property maintains the jus disponendi. A donation would not be legally feasible if the donor has neither ownership nor real right that he can transmit to the donee. (Hemedes v CA) F.
Acceptance of donation The donation is perfected (binding) upon the donor’s learning of the acceptance. If the donor revokes the donation before learning of the acceptance – no donation Must be made during the lifetime of both donor and donee If the donor dies before he learns of the acceptance, the donation doesn’t take effect. 1.
Who may accept 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. 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. Acceptance or consent must be personal, or through a person authorized generally or specifically. The form of authority must be in a public instrument in accordance with CC 1358. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Time of acceptance of donation inter vivos and donation mortis causa Article 746. Acceptance must be made during the lifetime of the donor and of the donee. Case: The donation is perfected only upon the moment the donor knows of the donee’s acceptance. 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. (Lagazo v CA, supra) G. Form of donations 1. Personal 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 the acceptance shall be made in writing, otherwise, the donation shall be void. With simultaneous delivery of property donated – May be oral unless it exceeds PhP 5 000, in which case it’s void if not in writing Without simultaneous delivery – Must be in writing (public or private) including the acceptance regardless of value The law does not require that the acceptance should also be in writing. The omission of this requirement permits a tacit acceptance or one that’s not written. 2.
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. Must be in a public instrument specifying property donated and burdens assumed by the donee regardless of value Acceptance must be either: In the same instrument, or In another public instrument, notified to the donor in authentic form, and noted in both deeds -­‐
Donor may waive formal notice. A donation made in this form, duly accepted by the donee, transfers possession as well as ownership of the land donated, unless a contrary intention is inferable from the terms of the donation. Agreement to respect the terms and at the same time expressing gratitude for the donor’s benevolence is sufficient acceptance. Exceptions: Donations propter nuptias – need no express acceptance Onerous donations – form governed by the rules of contracts 3.
Rules in CC 748 and 749 not applicable to a. Onerous donations b. Modal donations c. Donations mortis causa d. Donations propter nuptias Case: Spouses Lauro and Placida Sumipat acquired 3 parcels of land during their marriage. Lauro executed a deed donating these lands to his illegitimate children. It appears his hand was physically guided by his illegitimate daughter for his signature, and Placida was requested to sign even without being told what it was for. The deed did not validly transfer title to petitioners, the illegitimate children. Title to immovable property does not pass from donor to 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. Where the deed fails to show the acceptance, or where the formal notice of the acceptance made in a separate instrument is 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. (Sumipat v Banga) H. What may be donated 1. All present property, or part thereof, of donor a. Provided he reserves, in full ownership or usufruct, sufficient means for support of himself and all relatives entitled to be supported by donor at the time of acceptance Article 750. The donations 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 in petition of any person affected. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Case: Sixto Calicdan inherited land from his parents. He died and was survived by his wife and three children. The wife executed a deed of donation inter vivos of the land to Cendana in 1947. In 1992, Sixto’s daughter filed a complaint alleging that the donation was void. The donation inter vivos is void. The [donated] land was not part of the Calicdan spouses’ conjugal property. The governing law when Sixto died [1941] was the Spanish Civil Code, which stated that the surviving spouse only had a right of usufruct over the estate of the deceased spouse. Cendaña, who derived his rights from the wife, only acquired the right of usufruct. However, he has become the rightful owner of the land by extraordinary acquisitive prescription. (Calicdan v Cendaña) b.
Provided that no person may give or receive by way of donation, more than he may give or receive by will (CC 752); also, reserves property sufficient to pay donor’s debts contracted before donation, otherwise, donation is in fraud of creditors (CC 759, 1387) 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 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. Article 1387. All contracts by virtue of which the debtor alienates property by gratuitous title are presumed to have been entered into in fraud of creditors, when the donor did not reserve sufficient property to pay all debts contracted before the donation. Alienations by onerous title are also presumed fraudulent when made by persons against whom some judgment has been issued. The decision or attachment need not refer to the property alienated, and need not have been obtained by the party seeking the rescission. In addition to these presumptions, the design to defraud creditors may be proved in any other manner recognized by the law of evidence. Donee’s liability for the debts of the donor in the case contemplated by CC 759 should be considered as limited to the value of the thing donated. If donations exceed the disposable or free portion of his estate, donation is inofficious. Exceptions a. Donations provided for in marriage settlements between future spouses (FC 84, CC 130) – not more than 1/5 of present property FC Article 84. If the future spouses agree upon a regime other than the absolute community of property, they cannot donate to each other in their marriage settlements more than one-­‐
fifth of their present property. Any excess shall be considered void. Donations of future property shall be governed by the provisions on testamentary succession and the formalities of wills. CC Article 130. The future spouses may give each other in their marriage settlements as much as one-­‐fifth of their present property, and with respect to their future property, only in the event of death, to the extent laid down by the provisions of this Code referring to testamentary succession. The limitation to donation of present property does not apply if the property relations of the future spouses will be governed by ACP, since all the parties’ properties (with certain exceptions) will become absolute community anyway. If the future spouses agree on another regime, they can’t donate to each other in their marriage settlement any more than 1/5 of their present property. Any excess shall be considered void. b.
Donations propter nuptias by an ascendant consisting of jewelry, furniture, or clothing not to exceed 1/10 of disposable portion Article 1070. Wedding gifts by parents and ascendants consisting of jewelry, clothing, and outfit, shall not be reduced as inofficious except insofar as they may exceed one-­‐tenth of the sum which is disposable by will. 2.
What may not be donated Future property – Anything which donor cannot dispose of at the time of donation Article 751. Donations cannot comprehend future property. By future property is understood anything which the donor cannot dispose of at the time of the donation. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Property Reviewer
Future property includes all property that belongs to others at the time the donation is made, although it may or may not later belong to the donor. Not future property Property to which the donor has a right, although the delivery of such to him may be fixed for a future date Property which pertain to him conditionally, and will become his upon the happening of a suspensive condition Basis for the article The donor cannot deliver or dispossess himself of the future property. Also, it’s a principle of law that nobody can dispose of that which does not belong to him. Exception: marriage settlements of future spouses only in event of death to extent laid down in CC re: testamentary succession b.
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. I.
Effect of donation 1.
In general Case: Shopper’s Paradise entered a lease contract and memorandum of agreement with Dr. Roque. Before these could be annotated on the TCT, the latter died. Negotiations broke down with Dr. Roque’s son due to disagreements. He filed a case for the annulment of the contracts, claiming his parents executed a deed of donation inter vivos of the land in his favor. The donation was made in a public instrument; however, the title remained in Dr. Roque’s name until 1994. The donation is valid. It is enough between the parties to a donation of an immovable property that the donation be made in a public document. To bind third persons, the donation must be registered in the Registry of Property. Where a party has knowledge of a prior existing interest which is unregistered at the time he acquired a right thereto, his knowledge of that prior unregistered interest would have the effect of registration with regard to him. (Shopper’s Paradise Realty v Roque) a.
Donee may demand actual delivery of thing donated c.
Donor not obliged to warrant things donated, except in onerous donations in which case donor is liable for eviction up to extent of burden (CC 754) d.
Donor is liable for eviction or hidden defects in case of bad faith on his part (CC 754) e.
In donations propter nuptias, donor must release property donated from mortgages and other encumbrances, unless the contrary has been stipulated CC 130, FC 84: Please see first exception for the provisions Donations propter nuptias of future property are governed by the provisions on testamentary succession and the formalities of wills. Hence, they are revocable, unlike donations of present properties in the marriage settlement which can’t be revoked except if the marriage doesn’t take place, since marriage settlements can’t be modified nor revoked after the marriage. Donee is subrogated to rights of donor in the property donated Article 131. The donor by reason of marriage shall release the property donated from mortgages and all other encumbrances upon the same, with the exception of easements, unless in the marriage settlements or in the contracts the contrary has been stipulated. i. Donations propter nuptias of property subject to encumbrances are valid. Effect of foreclosure FC Article 85. Donations by reason of marriage of property subject to encumbrances shall be valid. In case of foreclosure of the encumbrance and the property is sold for less than the total amount of the obligation secured, the donee shall not be liable for the deficiency. If the property is sold for more than the total amount of said obligation, the donee shall be entitled to the excess. FC 85 changes the rule in CC 131 by providing that even property subject to encumbrances may be the subject of a donation by reason of marriage, subject to the following conditions: In case of foreclosure of the encumbrance and the property is sold for less than the amount of the obligation secured = the donee shall not be liable for the deficiency If the property is sold for more than the total amount of the obligation = the donee shall be entitled to the excess De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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f.
Donations to several donees jointly – no right of accretion, except: i. Donor provides otherwise ii. Donation to husband and wife jointly with right of accretion (jus accrescendi), unless donor provides otherwise i. If expressly stipulated – donee to pay only debts contracted before the donation, unless specified otherwise But in no case shall donee be responsible for debts exceeding value of property donated, unless clearly intended ii. If there’s no stipulation – donee answerable only for donor’s debt only in case donation is in fraud of creditors 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. 2.
Special provisions a. Reservation by donor of power to dispose (in whole or in part) or to encumber property donated 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. b.
Donation of naked ownership to one donee and usufruct to another 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. c.
e.
Illegal or impossible conditions Article 272. Children who are legitimated by subsequent marriage shall enjoy the same rights as legitimate children. Article 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be valid. The condition not to do an impossible thing shall be considered as not having been agreed upon. J.
Revocation and reduction of donations 1.
Revocation distinguished from reduction of donations Revocation v Reduction Revocation Total, whether the legitime is impaired or not Conventional reversion in favor of donor or other person Benefits the donor Article 757. Reversion may be validly established in favor of only the donor for any case and circumstances, but not in favor of 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. d.
Payment of donor’s debt 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 the debts exceeding the value of the property donated, unless a contrary intention clearly appears. Reduction Made insofar as the legitime is prejudiced Benefits the donor’s heirs (except when made on the ground of the appearance of a child) 2.
Causes of reduction/revocation a.
Inofficiousness of 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 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 De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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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. 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. Basis for CC 771: The law intends to protect the actual legitime of the forced heirs. The limitation imposed by CC 752 applies to persons who have compulsory heirs. The amount that can be donated depends upon the character of the compulsory heirs and the amount of property at the time of the death of the donor. Article 911. After the legitime has been determined in accordance with the three preceding articles, the reduction shall be made as follows: (1) Donations shall be respected as long as the legitime can be covered, reducing or annulling, if necessary, the devises or legacies made in the will; (2) The reduction of the devises or legacies shall be pro rata, without any distinction whatever. If the testator has directed that a certain devise or legacy be paid in preference to others, it shall not suffer any reduction until the latter have been applied in full to the payment of the legitime. (3) If the devise or legacy consists of a usufruct or life annuity, whose value may be considered greater than that of the disposable portion, the compulsory heirs may choose between complying with the testamentary provision and delivering to the devisee or legatee the part of the inheritance of which the testator could freely dispose. Article 912. If the devise subject to reduction should consist of real property, which cannot be conveniently divided, it shall go to the devisee if the reduction does not absorb one-­‐half of its value; and in a contrary case, to the compulsory heirs; but the former and the latter shall reimburse each other in cash for what respectively belongs to them. The devisee who is entitled to a legitime may retain the entire property, provided its value does not exceed that of the disposable portion and of the share pertaining to him as legitime. i. Who may ask for reduction 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 or 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. ii. Rule applied – If disposable portion not sufficient to cover two or more 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. Reason for the rule in CC 773 The reduction or annulment of inofficious donations shall be made in the inverse order of their dates, in accordance with the principle that priority in time gives priority in right. First donations within the free portion, and the later donations are the ones that impair the legitime. Donations, when made at the same time There must be proportional reduction of simultaneous donations – then the donees would have equal rights. The donor, however, may impose a preference in this case, which must be expressly stated in the donation itself. b.
Subsequent birth, reappearance of child or adoption of minor by donor 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 subsequently adopt a minor child. Basis: Need to protect a child’s presumptive legitime The law presumes that the donor wouldn’t have made the donation if he had or knew he had a child who would naturally be entitled to his affection and property. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Effects -­‐ Donation is valid if not exceeding the free part, computed as of the birth/adoption/reappearance of the child -­‐ Donee must return the property or its value at the time of the donation -­‐ Fruits to be returned from the filing of the action -­‐ Alienations and encumbrances by the donee before the filing of the donor’s action, are valid -­‐ Mortgages by the donee are valid, but may be discharged subject to reimbursement from the donee These causes are not self operating. They require an action. They don’t apply to donations mortis causa. The donation is revoked “by the happening” of any of the events enumerated – the revocation takes place ipso jure Extent of revocation The donation will be revoked only to the extent of the presumptive legitime of the child Prescription of action – four (4) years Cause of action Prescription computed from Birth of legitimate children Birth of first child Illegitimate child From the date of birth 3.
Revocation (only) a.
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. This applies to all donations except Donations mortis causa Donations propter nuptias Onerous donations A donation cannot be revoked except because of acts imputable to the donee. Founded on the idea of moral duty – one who received a donation must be grateful to his benefactor. Conviction not necessary – enough that the offense be proved in the action for revocation i. Causes ii. Time to file action for revocation 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. Limitation of the action: within 1 year from knowledge of the offense The action cannot be waived in advance. iii. Who may file 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. It’s not transmissible to the heirs of the donor. The donor must bring the action himself. The law doesn’t absolutely forbid the transmission of the action to the donor’s heirs. If the act of ingratitude caused the donor’s death, or if the donor dies without having known of the act of ingratitude, his heirs may ask for the revocation. The action for revocation can’t be instituted against the donee’s heirs. Only when the action has already been filed is it allowed to continue against the heirs of the donee. Non-­‐transmission of the action depends upon whether the donor could have brought the action but did not choose to do so iv. Effect of revocation On alienations and mortgages 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 donee the value of property alienated which he cannot recover from third persons, or the sum for which the same has De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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Property Reviewer
been mortgaged. The value of said property shall be fixed as of the time of the donation.
Cases: Calapine executed a deed of donation inter vivos ceding half of a parcel of land to his niece. Two months after, another deed identically entitled was purportedly executed by Calapine ceding unto Doria the whole parcel. A TCT was thus issued in her name. She sold part of the land to the Eduarte spouses. Calapine claimed his signature to the deed was forged. He filed a case to revoke the donation. Calapine had the right to revoke the donation. A donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. All crimes which offend the donor show ingratitude and are causes for revocation [enumerated in CC 765]. However, petitioners are buyers in good faith and for value. Mere possession cannot defeat the title of a holder of a registered Torrens title to real property. (Eduarte v. CA) www The daughter (respondent), grandson (petitioner), and widow of the late Celestino Arbizo extra-­‐judicially settled a parcel of land. The respondent donated part of her land to Noceda. The latter constructed his house on the donated land, while respondent fenced her portion and built 3 huts. Noceda removed the fence, occupied the huts, and fenced respondent’s entire land without her consent. She demanded that he vacate her land but he refused. The deed of donation should indeed be revoked. Noceda’s act of occupying the portion pertaining to Director without the latter’s knowledge and consent is an act of usurpation which is an offense against the property of the donor and considered as an act of ingratitude of a donee against the donor. The law does not require the conviction of the donee; it’s enough that the offense be proved in the action for revocation. The action to revoke by reason of ingratitude prescribes within one year to be counted from the time a) the donor had knowledge of the fact; b) provided it was possible for him to bring the action. (Noceda v CA) b.
Violation of condition i. Prescription of action ii. Transmissibility of action The three lease contracts entered into by the respondent donee were solely for pursuing the objective for which the [onerous] donation was intended. 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 a casual breach of the deed, which will not warrant the revocation of the donation. (Yulo and Sons v Roman Catholic Bishop of San Pablo) c.
Effect of revocation or reduction 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. Article 764, par. 2. 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. 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 donee the value of 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. Donor has choice of enforcing the charge by an action for specific performance, or of revoking the donation. The donee may be compelled to comply with what has been stipulated. Partial non-­‐fulfillment Generally a ground for revocation; however, when the part fulfilled offers great utility to the donor, the courts are considered empowered to decree only partial revocation, and even to deny revocation when the unperformed part is insignificant. Donee’s death does not bar donor’s action to revoke the donation for failure of the donee during his lifetime to fulfill the conditions imposed upon him. The action may be brought against his heirs and their assigns. d.
Effect as to fruits 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 noncompliance 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. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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140
Donation
Property Reviewer
Mortgages made before the annotation of the complaint are also valid, but the donee is liable for whatever sum has been paid to discharge the mortgage. Summary:
What may be donated (Article 750) What may not be donated Donations made to several persons jointly Donor Donee Acceptance of the donation Amounts paid are reimbursable by the donee. Limitation: 1) He reserves in full ownership or in usufruct, sufficient means for his support and all relatives who are at the time of the acceptance of the donation are, by law, entitled to be supported All present property of the donor or part Effect of non-­‐reservation: reduction thereof of the donation 2) He reserves sufficient property at the time of the donation for the full settlement of his debts Effect of non-­‐reservation: considered to be a donation in fraud of creditors, and donee may be liable for damages 1) Future property; those which the donor cannot dispose of at the time of the donation (Article 751) 2) More than what he may give or receive by will (Article 752) If exceeds: inofficious No accretion – one donee does not get the Exception: those given to husband and share of the other donees who did not wife, except when the donor otherwise accept (Article 753) provides Who are not allowed: 1) Guardians and trustees with respect to the property entrusted to them Who are allowed: All persons who may (Article 736) contract (of legal age) and dispose of their 2) Made between person who are guilty property (Article 735) of adultery and concubinage (Article Donor’s capacity is determined at the time 739) of the making of donation (Article 737) 3) Made between persons found guilty of the same criminal offense, in consideration thereof (Article 739) Who are allowed to accept donations: Those who are not specifically disqualified Who are not allowed: 1) Made between person who are guilty by law (Article 738) of adultery and concubinage (Article 739) Those who are allowed, with 2) Made between persons found guilty qualifications: of the same criminal offense, in 1) Minors and others who are consideration thereof (Article 739) incapacitated (see Article 38), 3) Made to a public officer or his wife, provided that their acceptance is descendant and ascendants, by done through their parents or legal reason of his office (Article 739) representatives (Article 741) 4) Those who cannot succeed by will 2) Conceived and unborn children, (Article 740) provided that the donation is 5) Those made to incapacitated persons, accepted by those who would legally although simulated under the guise of represent them if they were already another contract (Article 743) born Who may accept (Article 745): When to accept: during the lifetime of the De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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141
Donation
Property Reviewer
1)
2)
What the donee acquires with the thing Obligation of the donor Obligation of the donee What may be reserved by the donor Reversion Donee personally Authorized person with a special power for the purpose or with a general sufficient power He shall be subrogated to all the rights and actions that would pertain to the donor in case of eviction (Article 754) No obligation to warrant (Article 754) If the donation so states, the donee may be obliged to pay the debts previously contracted by the donor and in no case shall he be responsible for the debts exceeding the value of the thing donated (Article 758) Right to dispose of some of the things donated, or of dome amount which shall be a charge thereon The property donated may be restored or returned to 1) Donor or his estate; or 2) Another person Revocation/ Reduction of Donation Basis Time of Action Transmissibility Birth, appearance, adoption Within 4 years from birth, legitimation and adoption Transmitted to children and descendants upon the death of donor Non-­‐compliance with condition Within 4 years from non-­‐
compliance May be transmitted to donor’s heirs and may be exercised against donee’s heirs Ingratitude Within 1 year after knowledge of the fact Generally not transmitted to heirs of donor/ donee Failure to reserve sufficient means for support At any time, by the donor or relatives entitled o support Not transmissible Inofficiousness for being in excess of what the donor can give by will Within 5 years from the death of the donor Transmitted to donor’s heirs Fraud against creditors Rescission within 4 years from the perfection of donation/ knowledge of the donation Transmitted to creditor’s heirs or successors-­‐in-­‐interest donor or donee (Article 746) Exception: when the donation is onerous Exception: appears when contrary intention If the donor dies without exercising this right, the portion reserved shall belong to the donee Limitation to (2): the third person whoul be living at the time of the donation Effect Property returned/ value (if sold)/ redeem mortgage with right to recover Property returned, alienations and mortgages void subject to rights of third persons in good faith Property returned, but alienations and mortgages effected before the notation of the complaint for revocation in the registry of property subsist Reduced to the extent necessary to provide support Donation takes effect on the lifetime of donor. Reduction only upon his death with regard to the excess Returned for the benefit of the creditor who brought the action De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
D2012
Liability (Fruits) Fruits returned from the filing of the complaint Fruits received after having failed to fulfill condition returned Fruits received from the filing of the complaint returned Donee entitled Donee entitled Fruits returned/ if impossible, indemnify creditor for damages 142
Lease
Property Reviewer
Part 12. Lease The contract of lease is an agreement whereby one person (lessor) binds himself to grant temporarily the enjoyment or use of a thing or to render some service to another (lessee) who undertakes to pay rent, compensation or price therefor. Lease is only a personal right. It is a real right only by exception as in the case of lease of real estate recorded in the Registry of Property which makes it binding upon third persons, like a purchaser. In the absence of registration, the purchaser may terminate the lease, save when there is a stipulation in the contract of sale, or when the purchaser knows the existence of the lease (Article 1676), actual knowledge being equivalent to registration (Article 1648). A. General Characteristics of every lease 1. Temporary duration 2. Onerous 3. Price is fixed according to contract duration B. Kinds of Leases Article 1642. The contract of lease may be of things, or of work and service. 1.
Lease of things It involves an obligation on the part of the lessor to deliver the thing which is the object thereof and the correlative right of the lessee to peaceful and adequate enjoyment thereof for a price certain. a. Movables b. Immovables a) Lease is a mere personal right. Its inscription in the Registry of Property t bind third persons does not in any way alter or modify the rights and obligations of the parties under the contract which has a life of its own independent of registration. 2.
Lease of work or contract of labor A contract of labor is that by virtue of which one person binds himself with respect to the other to place at the service of the latter his own efforts in work, and the latter in turn agrees to pay him a compensation proportionate to the time or the quantity of the work done. A contract of labor is a contract sui generis, partaking the nature of a partnership in which the capitalist and the laborer have their respective shares. It is not a contract of service; its subject is not merchandise, but a free and rational being. Article 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects. Article 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public. Article 1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid. Every lease of real estate may be recorded in the Registry of Property. Unless a lease is recorded, it shall not be binding upon third persons. (Article 1648) Effect of registration of lease of real estate: 1) As against third persons – a) Binds third persons. Unless so recorded, an innocent purchaser for value is not bound to respect the existing lease and he may terminate the same. b) A contract of lease of land must be in a public instrument so that it may be recorded. c) The provision is intended to protect the lessee who cannot be ousted by the buyer if the lease is recorded. The right of the buyer to terminate the lease should be curbed as much as possible because it is unjust to the lessee, and practically sanctions a violation of the contract of lease by the lessor. 2) As between the parties – Article 1704. In collective bargaining, the labor union or members of the board or committee signing the contract shall be liable for non-­‐fulfillment thereof. Article 1705. The laborer's wages shall be paid in legal currency. Article 1706. Withholding of the wages, except for a debt due, shall not be made by the employer. Article 1707. The laborer's wages shall be a lien on the goods manufactured or the work done. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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143
Lease
Property Reviewer
Article 1708. The laborer's wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. Article 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer. Article 1710. Dismissal of laborers shall be subject to the supervision of the Government, under special laws. Article 1711. Owners of enterprises and other employers are obliged to pay compensation for the death of or injuries to their laborers, workmen, mechanics or other employees, even though the event may have been purely accidental or entirely due to a fortuitous cause, if the death or personal injury arose out of and in the course of the employment. The employer is also liable for compensation if the employee contracts any illness or disease caused by such employment or as the result of the nature of the employment. If the mishap was due to the employee's own notorious negligence, or voluntary act, or drunkenness, the employer shall not be liable for compensation. When the employee's lack of due care contributed to his death or injury, the compensation shall be equitably reduced. Article 1712. If the death or injury is due to the negligence of a fellow worker, the latter and the employer shall be solidarily liable for compensation. If a fellow worker's intentional malicious act is the only cause of the death or injury, the employer shall not be answerable, unless it should be shown that the latter did not exercise due diligence in the selection or supervision of the plaintiff's fellow worker.
3.
Lease of Services The head of the family shall furnish, free of charge, suitable sanitary quarters as well as adequate food. If the house helper is less than 18 years of age, the head of the family shall give an opportunity to the house helper for at least elementary education. No contract for household service shall last for more than 2 years. However, such contract may be renewed from year to year. b. Contract for a piece of work Article 1713. By the contract for a piece of work the contractor binds himself to execute a piece of work for the employer, in consideration of a certain price or compensation. The contractor may either employ only his labor or skill, or also furnish the material. Article 1714. If the contractor agrees to produce the work from material furnished by him, he shall deliver the thing produced to the employer and transfer dominion over the thing. This contract shall be governed by the following articles as well as by the pertinent provisions on warranty of title and against hidden defects and the payment of price in a contract of sale. Article 1715. The contract shall execute the work in such a manner that it has the qualities agreed upon and has no defects which destroy or lessen its value or fitness for its ordinary or stipulated use. Should the work be not of such quality, the employer may require that the contractor remove the defect or execute another work. If the contract fails or refuses to comply with this obligation, the employer may have the defect removed or another work executed, at the contractor's cost. Article 1716. An agreement waiving or limiting the a. Household service It involves an obligation on the part of a housekeeper (Article 1689), laborer or employee (Article 1700), or common carrier (Article 1732) to do or perform a service for the head of the family, or master, employer, or passenger or shipper of goods, respectively, in consideration of compensation. Domestic or household service is that rendered as personal service to the family with whom the family usually lives. The services must be manual and personal, and rendered in the house of a family, thus distinguishing from this concept the services of those who have some office or profession, such as private tutors, secretaries, etc. Household service shall always be reasonably compensated. Such compensation shall be in addition to the house helper’s lodging, food, and medical attendance. contractor's liability for any defect in the work is void if the contractor acted fraudulently. Article 1717. If the contractor bound himself to furnish the material, he shall suffer the loss if the work should be destroyed before its delivery, save when there has been delay in receiving it. Article 1718. The contractor who has undertaken to put only his work or skill, cannot claim any compensation if the work should be destroyed before its delivery, unless there has been delay in receiving it, or if the destruction was caused by the poor quality of the material, provided this fact was communicated in due time to the owner. If the material is lost through a fortuitous event, the contract is extinguished. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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144
Lease
Property Reviewer
Article 1719. Acceptance of the work by the employer relieves Article 1724. The contractor who undertakes to build a the contractor of liability for any defect in the work, unless: (1) The defect is hidden and the employer is not, by his special knowledge, expected to recognize the same; or (2) The employer expressly reserves his rights against the contractor by reason of the defect. structure or any other work for a stipulated price, in conformity with plans and specifications agreed upon with the land-­‐owner, can neither withdraw from the contract nor demand an increase in the price on account of the higher cost of labor or materials, save when there has been a change in the plans and specifications, provided: (1) Such change has been authorized by the proprietor in writing; and (2) The additional price to be paid to the contractor has been determined in writing by both parties. Article 1720. The price or compensation shall be paid at the time and place of delivery of the work, unless there is a stipulation to the contrary. If the work is to be delivered partially, the price or compensation for each part having been fixed, the sum shall be paid at the time and place of delivery, in the absence if stipulation. Article 1721. If, in the execution of the work, an act of the employer is required, and he incurs in delay or fails to perform the act, the contractor is entitled to a reasonable compensation. The amount of the compensation is computed, on the one hand, by the duration of the delay and the amount of the compensation stipulated, and on the other hand, by what the contractor has saved in expenses by reason of the delay or is able to earn by a different employment of his time and industry. Article 1722. If the work cannot be completed on account of a defect in the material furnished by the employer, or because of orders from the employer, without any fault on the part of the contractor, the latter has a right to an equitable part of the compensation proportionally to the work done, and reimbursement for proper expenses made. Article 1723. The engineer or architect who drew up the plans and specifications for a building is liable for damages if within fifteen years from the completion of the structure, the same should collapse by reason of a defect in those plans and specifications, or due to the defects in the ground. The contractor is likewise responsible for the damages if the edifice falls, within the same period, on account of defects in the construction or the use of materials of inferior quality furnished by him, or due to any violation of the terms of the contract. If the engineer or architect supervises the construction, he shall be solidarily liable with the contractor. Acceptance of the building, after completion, does not imply waiver of any of the cause of action by reason of any defect mentioned in the preceding paragraph. The action must be brought within ten years following the collapse of the building. Article 1725. The owner may withdraw at will from the construction of the work, although it may have been commenced, indemnifying the contractor for all the latter's expenses, work, and the usefulness which the owner may obtain therefrom, and damages. Article 1726. When a piece of work has been entrusted to a person by reason of his personal qualifications, the contract is rescinded upon his death. In this case the proprietor shall pay the heirs of the contractor in proportion to the price agreed upon, the value of the part of the work done, and of the materials prepared, provided the latter yield him some benefit. The same rule shall apply if the contractor cannot finish the work due to circumstances beyond his control. Article 1727. The contractor is responsible for the work done by persons employed by him. Article 1728. The contractor is liable for all the claims of laborers and others employed by him, and of third persons for death or physical injuries during the construction. Article 1729. Those who put their labor upon or furnish materials for a piece of work undertaken by the contractor have an action against the owner up to the amount owing from the latter to the contractor at the time the claim is made. However, the following shall not prejudice the laborers, employees and furnishers of materials: (1) Payments made by the owner to the contractor before they are due; (2) Renunciation by the contractor of any amount due him from the owner. This article is subject to the provisions of special laws. De Mesa, Deveraturda, Esperas, Flores, Go, Goingo, Gonzales, Morillo, Mancao, Oposa, Refran, Serapio
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145
Lease
Property Reviewer
Article 1730. If it is agreed that the work shall be accomplished to the satisfaction of the proprietor, it is understood that in case of disagreement the question shall be subject to expert judgment. If the work is subject to the approval of a third person, his decision shall be final, except in case of fraud or manifest error. Article 1371. He who has executed work upon a movable has a right to retain it by way of pledge until he is paid. c. Lease of services of common carriers Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air,