Law on Property (Batacan)

8/10/2019 Law on Property (Batacan)

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Marianne Macayra

B A S I C P R I N C I P L E S : LAW ON PROPERTY Compiled and discussed by ATTY. ED C. BATACAN

PROPERTY, concept of: (Civil law concept) – All things whether tangible [physical objects] or intangible [rights] which are or maybe the object of appropriation. (See Art. 414 NCC).

It follows that those which cannot be appropriated are not

considered property. [i.e. stars, moon, air, planets, etc.]However, in Escano vs. Gil [CA] February 11, 1958, it was heldthat the right to office, though not a vested property right, in atechnical sense, is property. An office may be considered asproperty in controversies relating to the question as to which of two persons is entitled thereto.

In Cornejo vs. Gabriel, 41 Phil. 200 , it was ruled that property,under the due process clause of the Constitution, includes theright to hold, occupy and exercise an office.

What is appropriation? The New Civil Law Code does not definewhat appropriation is, but it has been considered as equivalent tooccupation, which is the willful apprehension of a corporeal

object which has no owner, and with intent to acquire itsownership.

PROPERTY, classification of: (See Art. 414, NCC)

§ Immovable or real property;§ Movable or personal property.

Why is there importance to classify? Because different provisionsof the law govern the acquisition, possession, disposition, lossand registration of immovable and movable.

For example:

a. Donations of real property (like land) must be in apublic instrument, otherwise the alienation will be nulland void even as between the parties. On the other hand, the donation of a movable (like a ring valued atsay P5,000.00), needs only to be in a privateinstrument. (see Art. 748, NCC).

b. The ownership over a real property may be acquired byprescription (see Art. 1137) in 30 years (bad faith);whereas, acquisition of personal property in bad faithneeds only 8 years (see Art. 1132, NCC).

c. Generally, to affect third persons, transactions involvingreal property must be recorded in the Registry of Property; this is not so in the case of personal property.

QUESTION: May parties by agreement treat as personal

property that which by classification under the law be realproperty?

A: Technically, it would seem that under the Civil Code, it is onlythe LAW which may consider certain real property (like growingcrops) as personal property for the purpose of making a chattelmortgage. (See Art. 416, par.2). Also, for purposes of taxation,improvements on real property which are essentially movablesmay be considered as subject to real property tax.

However, in Evangelista vs. Abad, 36 O.G. 2913 and Navarrovs. Pineda, 9 SCRA 631, the Supreme Court ruled that a realproperty may be treated as personal property provided that two

conditions are met: a) The parties mutually agree to consider the real property [i.e. house], a personalty; and b) That noinnocent third person shall be prejudiced thereby.

The validity of the chattel mortgage constituted on a house

cannot be questioned by the owner of the house because he isplaced under estoppel from denying the existence of the chattelmortgage.

In Tsai vs. Court Of Appeals, 366 SCRA 324, it was held thatthe nature of the disputed machineries, i.e., that they were heavy,bolted or cemented on the real property mortgaged, does notmake them ipso facto immovable under Article 415 (3) and (5) of the New Civil Code, as the parties’ intent has to be looked into.While it is true that the controverted properties appear to beimmobile, a perusal of the Contract of Real and ChatttelMortgage executed by the parties show a contrary indication.

In the case at bar, the intention of the parties is to treat the said

machineries and equipment as chattels. The parties executed aReal Estate Mortgage and Chattel Mortgage, instead of just RealEstate Mortgage if indeed their intention is to treat all theproperties included therein as immovable. Also attached to thesaid contract is a separate “List of Machineries and Equipment”.These facts evince the conclusion that the parties intend to treatthe machineries as chattels.

QUESTION: May a building subjected to a chattel mortgage besold extra-judicially in accordance with the provisions of RealEstate Mortgage Law?

A: In Luna vs. Encarnacion, 91 Phil 531, it was held that abuilding subjected to chattel mortgage cannot be sold extra-

judicially under the provisions of Act 3135 since the Article refers

only to real estate mortgage.

In Manarang vs. Ofilada, 99 Phil 108 , it was ruled that auctionsales on execution upon judgment, the building or house shall betreated as real property, and therefore, the rule on foreclosure of real estate mortgage must be followed.

IMMOVABLE PROPERTY

Classes of Immovable (IN GENERAL):

a) Immovables by nature - those which cannot bemoved from place to place because of their nature,

such as land (par 1 Art. 415), mines, quarries and slagdumps (par 8, Art. 415);

b) Immovables by incorporation - those which areessentially movables, but are attached to animmovable in such manner as to become an integralpart thereof. [Examples: those mentioned in par 1, 2, 3,4 & 6, Art. 415, except land, buildings and roads];

c) Immovables by destination - those which areessentially movables, but by the purpose for which theyhave been placed in an immovable, partake the natureof the latter because of the added utility derived



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therefrom, such as those mentioned in pars 4, 6, 7 & 9of Art. 415);

d) Immovables by analogy or by law - those mentionedin par 10, Art. 415; right of usufruct; easements andservitudes.

Classes of Immovables (SPECIFICALLY):

Art. 415. The following are immovable property:

PARAGRAPH 1: Land, buildings, roads andconstructions of all kinds adhered to the soil.

REMINDERS :

· LAND:

Land by its very nature is immovable. And even, if land ismoved by an earthquake or an extra-ordinary happening, theland should still be considered immovable. A truckload of soil[i.e. garden soil] should be considered personal property sincethere is no longer adherence to the soil.

Even if land is rented, it is still considered as immovable.

· BUILDINGS:

Buildings of permanent structure are always classified asimmovable. It is immaterial whether it is built on a rented or owned land. The nature of the building as property does notdepend on the way the parties deal with it [see: Leung Yee vsStrong Machinery Co. 37 Phil. 664.]

Buildings are considered immovable provided they are moreor less permanent substantially adhering to the land, and notmere super-impositions on the law. In Luna vs Encarnacion, itwas held that a structure which is merely superimposed on a landlike a temporary shelter for workers is not real or immovableproperty.

· CONSTRUCTIONS:

It is understood that the attachment must be more or lesspermanent. A wall or a fence is good example of this kind of immovable by incorporation. As long as there is an intent topermanently annex the same, it is immaterial whether thematerials used is only made of stone. Railroad tracks or railscome under this category.

Wooden scaffoldings on which carpenters stand whileconstructing a house are merely personal property in view of thelack of “adherence” to the soil or the intent to permanently annexthe same to the soil.

PAR. 2: Trees, plants and growing crops, while they areattached to the land or form an integral part of animmovable.

Trees and plants no matter what their size may be areconsidered real property. By nature - if they are the spontaneousproducts of the soil, and by incorporation - if they were plantedthru labor.

But the moment they are detached or uprooted from the land,they become personal property, except in the case of uprootedtimber , if the land is timberland, because although no longer attached, the timber still forms an “integral part” of the timberland.

Rule on ungathered fruits:

1. Even if the land is being leased by another, and thefruits belong to the tenant, the fruits are still consideredas immovable because no exception or qualification ismade under the Civil Code.

2. However, when the fruits although ungathered are sold,as when the entire harvest is sold before being actually

gathered, it is considered as a sale of movables.[Mobilized by anticipation]

In Sibal vs. Valdez, 50 Phil 512 , the Supreme Court held that for purposes of attachment and execution, and for purposes of theChattel Mortgage Law, ungathered products have the nature of personal property.

PAR. 3: Everything attached to an immovable in a fixedmanner, in such a way that it cannot be separatedtherefrom without breaking the material or deteriorationof the object.

Under this paragraph, for the incorporated thing to be consideredreal property, the injury or breakage or deterioration in case of

separation, must be substantial . [Examples: A fixed fire escapestairway firmly embedded in the walls of the house; aqueduct; or a sewer or a well.

In CBAA vs. MERALCO, 119 Phil. 328 , it was ruled that thesteel towers of MERALCO not attached to an immovable in afixed manner are not realty and therefore, not subject to realtytax. The towers can be separated from the ground withoutbreaking or causing deterioration upon the object to which theyare attached.

However, in Caltex vs. CBAA, 114 SCRA 273, it was held thatstorage tanks installed on land leased from Caltex are subject torealty tax, they being improvements on realty .

In Berkenkotter vs. Cu Unjieng, 61 Phil 683, it was ruled thatmachinery for breweries utilized in the liquor or soft-drinkmanufacturing, though movable in nature, are immobilized bydestination being essential to said industry.

In Mindanao Bus Co. vs. City Assessor, 116 Phil 501, it washeld that machinery of a transportation company such aswelding, boring machine, lathe machine “sitting on a cementplatform” which are not essential to the transportation business of the owner of the tenement do not constitute realty.

Effect of separation: If the thing incorporated is temporarilyremoved with the intention to replace the same, the thing isconsidered as personal property because the incorporation had

ceased. The material fact of incorporation or separation is whatdetermines the condition of the tenement; it recovers its status asmovables, irrespective of the intention of the owner.

PAR. 4: Statues, reliefs, paintings or other objects for use or ornamentation, placed in building or on land bythe owner of the immovable in such a manner that itreveals the intention to attach them permanently to thetenements.

These are immovables both by incorporation and by destination.



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Example:

A f ixed statue in the garden of the house; a permanent paintingon the ceiling; a picture embedded in the concrete walls of ahouse; a rug or carpet fastened to the floor (wall-to-wallcarpeting).

The objects must be placed by the owner of the immovable(buildings or lands) and not necessarily the owner of the object. If

placed by a mere tenant, the objects must remain chattels or personalty (See: Davao Sawmill vs. Castillo, 61 Phil 709).

However, in Valdez vs. Central Altagracia, 255 U.S. 58 , it washeld that where the owner of a tenement entered into a contractwith a lessee, stipulating that the lessee shall place certainobjects in the property leased, and that such objects shall remainwith the property upon the termination of the lease, without anyobligation on the part of the owner to reimburse the lessee, thetenant acts as an agent of the owner in giving by contract apermanent destination to them.

Effect of separation: In Ago vs. Court of Appeals, 6 SCRA530 , it was held that the moment these objects are separatedfrom the land or building or from the industry or works, theyregain back their condition as personal property.

PAR. 5: Machinery, receptacles, instruments, or implements intended by the owner of the tenement for an industry or works which may be carried on in abuilding or on a piece of land, and which tend directlyto meet the needs of the said industry or works.

These are immovables by purpose or destination.

Essential requisites:

1. The placing must be made by the owner of thetenement, his agent, or duly authorized legalrepresentative;

2. The industry or works must be carried on in the buildingor on the land;

3. The machines, etc. must tend directly to meet theneeds of said industry, and not merely incidental.

In Mindanao Bus Co. vs. City Assessor, 116 Phil 501, it wasruled that a transportation business is not carried on in a buildingor in the compound. Cash registers, typewriters, etc. usuallyfound and used in hotels, restaurants, theaters, etc., are merelyincidentals, and should not be considered immobilized bydestination for these business can continue or carry on their functions without these equipments. The same applies to therepair or service shop of the transportation business because thevehicles may be repaired or serviced in another shop belongingto another.

In Berkenkotter vs. Cu Unjieng, 61 Phil 663, the SupremeCourt held: “Machinery intended by the owner of any building or land for the use in connection with any industry or trade beingcarried on therein and which are expressly adapted to meet therequirements of such trade, are considered as real property. If the installation of the machinery and equipment in question in thecentral converted them into real property by reason of their purpose, it cannot be said that their incorporation therewith wasnot permanent in character because, as essential and principal

elements of a sugar central, without them the sugar central wouldbe unable to function or carry on the industrial purpose for whichit was established. The new machinery must, therefore, beconsidered as subject to the real estate mortgage in favor of thedefendant.”

Effect of separation: If the machines are still in the building, butno longer used in the industry conducted therein, the machinesrevert to the condition of a chattel. The moment they are

separated from the purpose of the industry (not necessarily fromthe immovable), they recover their (not necessarily from theimmovable), they recover their condition as movables (see: Agovs. Court of Appeals, 6 SCRA 530 ).

On the other hand, if still needed for the industry, but separatedfrom the tenement temporarily, the property continues to beimmovable, inasmuch as par. 5 refers not to real property byincorporation, but to real property by destination or purpose.

PAR. 6: Animal houses, pigeon-houses, beehives,fishponds or breeding places or similar nature, in casetheir owner has placed them or preserves them with theintention to have them permanently attached to the

land, and forming a permanent part of it; the animals inthese places are included.

The houses referred to here may already be deemed included inpar. 1 when speaking of “constructions of all kinds adhered to thesoil.” Even if the animals are temporarily outside, they may stillbe considered as real property as long as the intent to return ispresent, as in case of a homing pigeon. But from the viewpoint of criminal law, they are considered as personal property and mayproperly be the objects of theft or robbery.

When the animals inside the permanent animal houses arealienated onerously or gratuitously, the transaction is analienation of personal property, unless the building or the

tenement itself is also alienated . This is because in saidalienation, the animal structures must of necessity be detachedfrom the immovable. Hence an ordinary inter-vivos donation of apigeon-house need not be in a public instrument.

PAR. 7: Fertilizers actually used on a piece of land.

Fertilizers still in the barn and even those already on the groundbut wrapped inside some newspapers or any other covering arestill to be considered personal property, for they have not yetbeen “actually” used or spread over the land.

The fertilizers should be on the land where they are to be utilized,because it is only that the intention of the owner to use them onthe tenement is beyond doubt. Hence, fertilizers kept in the

farmhouse are not immovable.

PAR. 8: Mines, quarries, and slag dumps while thematter thereof forms part of the bed, and waters, either running or stagnant.

Mines, including the minerals still attached thereto, are realproperties, but when the minerals have been extracted, the latter become chattels.

Slag dump is the dirt and soil taken from a mine and piled uponthe surface of the ground. Inside the “dump” can be found theminerals.



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The “waters” referred to are those still attached to or running thruthe soil or ground. But the “water” itself as distinguished from“waters” is clearly personal property. On the other hand, canals,rivers, lakes, and such part of the sea as may be the object of appropriation, are classified as real property.

PAR. 9: Docks and structures which, though floating,are intended by their nature and object to remain at afixed place on a river, or coast.

A floating house tied to a shore or bank post and used as aresidence is considered real property, considering that the“waters” on which it f loats, are considered immovables. In a way,we may say that the classification of the accessory (the floatinghouse) follows the classification of the principal (the waters).However, if the floating house makes it a point to travel fromplace to place, it assumes the category of a vessel.

By express provision of Art. 585 of the Code of Commerce,vessels are movable property; but they partake, to a certainextent, of the nature and conditions of the property, on account of their value and importance in the world of commerce. (See:Rubiso vs. Rivera, 37 Phil. 72 )

Vessels are considered personal property. As a matter of fact,they are indeed very movable, (see: PRC vs. Jarque, 61 Phil 229) because they are personal property, they may be thesubject of the chattel mortgage. (See: McMicking vs. Espanol- Filipino, 13 Phil 429; Arroyo vs. Yu de Sane, 54 Phil 7 )

PAR. 10: Contracts for public works, and servitudes andother real rights over immovable property.

The properties referred to in this paragraph are not materialthings but rights, which are necessarily intangible. The piece of paper on which the contract for the public works has been writtenis necessarily personal property, but the contract itself, or theright of the contract is real property.

A servitude or easement is an encumbrance imposed upon animmovable for the benefit of another immovable belonging to adifferent owner, or for the benefit of a person, group of persons,or a community [ex. Easement of right of way].

Other real rights over real property include real estate mortgage,antichresis, possessory retention, usufruct, leases of realproperty, if registered; or even if not registered, if their duration isfor more than a year.

Usufruct of personal property or a lease of personal propertyshould be considered personal property.

In the case of Presbitero vs. Fernandez (March 30, 1958), the

Supreme Court held that sugar quotas are real property, for theyare by law considered “real rights over immovable property” justlike servitudes and easements.

Court jurisdiction: In Cabutihan vs. LCDC, 383 SCRA 353, itwas held that actions affecting title to or possession of realproperty or an interest therein shall be commenced and tried inthe proper court that has territorial jurisdiction over the areawhere the real property is situated.

MOVABLE PROPERTY

Art. 416. The following things are deemed to be personalproperty:

1. Those movables susceptible of appropriation whichare not included in the preceding article.

Examples: cell phones; money; ring; cars.

2. Real property which by any special provision of law isconsidered as personalty.

Examples: Growing crops for the purpose of the ChattelMortgage Law (see: Sibal vs. Valdez, 50 Phil. 512 ); machineryplaced on a tenement by a tenant, who did not act as the agentof the tenement owner (see: Davao Sawmill vs. Castillo, 61Phil. 709).

3. Forces of nature which are brought under control byscience.

Examples: Electricity, gas, light, nitrogen (see: US vs.Carlos, 21 Phil. 543).

4. In general, all things which can be transported fromplace to place without impairment of the real property towhich they are fixed.

Examples: Machinery not attached to land or needed for thecarrying on of an industry conducted therein.

Test to determine whether property is movable or immovable:

a) If the property is capable of being carried from place toplace. (Test by description)

b) If such change in location can be made without injuringthe real property to which it may in the meantime beattached. (Test by description)

c) And if finally, the object is not one of those enumeratedor included in Art. 415. (Test by exclusion)

(If the answer is YES) Then the inevitable conclusion is that theproperty is personal property.

Note: Test by exclusion is superior to test by description.

Art. 417. The following are also considered as personalproperty:

1.) Obligations and actions which have for their objectmovables or demandable sums.

REMINDERS: The term obligations really refers to ”credits”and also includes bonds, which are technically obligations of the

entity issuing them; Actions – if somebody steals my car, myright to bring action to recover the automobile is personalproperty by itself; A promissory note is a personal property; theright to collect it is also a personal property.

2) Shares of stock of agricultural, commercial andindustrial entities, although they may have real estate.

Although the provisions of par. 2 seem to refer only tocorporations by the words “shares of stocks”, and only to thoseengaged in agriculture, commerce, and industry, nevertheless, all

juridical persons must be deemed included.



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A share of stock in a gold mining corporation is alsopersonal property; but the gold mine itself, and any land of thecorporation, are regarded as real property by the law. Thecertificate evidencing ownership of the share, and the shareitself, are regarded as personal property. Being personal, theymay be the object of a chattel mortgage (see: Chua Guan vs.Samahang Magsasaka, Inc. 62 Phil. 472)

A half interest in drugstore business is personal property capable

of being the subject of a chattel mortgage (see: Strochecher vs.Ramirez, 44 Phil. 933). However, a half-interest in a drugstore,considered as a building (not a business) is a real right in realproperty and is therefore by itself a real property.

In Hongkong and Shanghai Bank vs. Aldecoa, 30 Phil 255 , itwas held that real estate mortgages are realty and notpersonalty.

PROPERTY IN RELATION TO THE PERSON TO WHOM ITBELONGS

Art. 419. Property is either of public dominion or of private

ownership.

The State may own properties both in its publiccapacity (public dominion) and private capacity(patrimonial).

§ Public dominion – ownership by the state in its publiccapacity or in the exercise of its governmental functions.

§ Patrimonial – ownership by the State in its private capacity or in the course of its proprietary functions. This is the propertyover which the State has the same rights, and for which it maydispose, to the same extent as private individuals in relation totheir property, subject only to the administrative laws andregulations on the procedure of exercising such rights. They

exist for the State to attain its economic ends, as a means for its subsistence, and the preservation of its natural organism.

What are properties of public dominion? [see Art 420, NCC]

a. Those intended for public use, such as roads, canals,rivers, torrents, ports and bridges constructed by thestate, banks, shores, roadsteads, and others of similar character;

b. 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.

In Usero vs. CA, 353 SCRA 449, the SC held that 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 domainwhich is not susceptible to private ownership. Being public water,a creek cannot be registered under the Torrens System in thename of any individual.

Characteristics:

1. They may be real or personal;2. They cannot be levied or attached; [Tan Toco vs.

Mun. Council of Iloilo, 49 Phil 52 ];

3. They cannot be registered under the Land RegistrationLaw;

4. They cannot be acquired by prescription [Harty vs.Mun. of Victoria, 13 Phil. 152 ];

5. They are outside the commerce of man [Mun. of Cavite vs Rojas, 30 Phil 20 ];

6. They cannot be burdened by any voluntary easement.

Property for PUBLIC USE , defined: It can be used by

everybody, even by strangers or aliens in accordance with itsnature; but nobody can exercise over it the rights of a privateowner. Thus, no private person can have a property right in theuse of a street for his private business, nor can he acquire over such a right to possession as would require the exercise of possessory actions.

In Republic vs. Gonzales, 199 SCRA 788 , it was held that: theconception urged by appellants to restrict property reserved for public use to include only property susceptible of being used by agenerally unlimited number of people is flawed and obsolete,since the number of the users is not the yardstick in determiningwhether property is properly reserved for public use or benefit.

To constitute public use, the public in general should have equalor common rights to use the land or facility involved on the sameterms, however limited in the number of people who can actuallyavail themselves of it at a given time. There is nothing in the lawwhich excludes non-car owners from using a widened street or aparking area should they in fact happen to be driving cars. Theopportunity to avail of the use thereof remains open for the publicin general.

In Villarico vs. Sarmiento, 110 SCRA 442 , the SC ruled that:“Public use is use that is not confined to privileged individuals butis open to the indefinite public. Records show that the lot onwhich the stairways were built is for the use of the people aspassageway to the highway. Consequently, it is a property of

public dominion.”

Property for PUBLIC SERVICE: - This kind of property includesall property devoted for public service. In Baguio Citizens

Action vs. City Council, 121 SCRA 368 , it was held that allpublic buildings constructed by the State for its offices andfunctionaries belong to this class.

QUESTION: Are rivers whether navigable or not, properties of public dominion?

A: It would seem that Art. 420 NCC makes no distinction.

However, in Palanca vs. Commonwealth, 40 OG 148 , theSupreme Court said: “The river Viray and the estero Sapang

Sedoria, being navigable, useful for commerce, for navigation,and fishing, they have the character of public domain.”

In Taleon vs. Secretary of Public Works, L-24281, May 16,1967 , it was held that if a river is capable in its natural state of being used for commerce, it is navigable in fact, and therefore,becomes a public river.

In Martinez vs. Court of Appeals, 56 SRCA 647 , it was heldthat navigable rivers are outside the commerce of man andtherefore cannot be registered under the Land Registration Law.If converted into fishponds, the latter can be demolished



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notwithstanding the title, for said title cannot convert the streamsinto private ones.

In Mercado vs. Municipal President of Macabebe, 59 Phil 592 ,it was ruled that creeks which are mere extensions of rivers areconsidered property of public domain.

CONVERSION

Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall formpart of the patrimonial property of the state.

Note:

¬ When change takes effect? Property of public dominionceases to be such and becomes private property of the Stateonly upon declaration by the government, thru the legislative or executive departments, to the effect that it is no longer neededfor public use or public service. If the property has beenintended for such use or service, and the government has notdevoted it to other uses, or adopted any measure which

amounted to a withdrawal thereof from public use or service,the same remains property for public use or servicenotwithstanding the fact that it is not actually devoted for publicuse or service. (See:Capitulo, et. al. vs. Aquino 53 OG 1477 )

¬ Who shall declare? In the case of Faustino vs. Dir. Of Lands, L-12958, May 30, 1960 , the Supreme Court, (citingNatividad vs. Dir. Of Lands, CA 37 OG 2905) said that onlythe executive and possibly the legislative departments havethe authority and power to make the declaration that any landso gained by the sea is not necessary for purposes of publicutility, or for the establishment of special industries. If no suchdeclaration has been made by the said departments, the lot inquestion forms part of the public domain.

Consequently, until there is made a formal declaration on the partof the government thru the executive department or thelegislature, the parcel in question continues to be part of thepublic domain and cannot be subject to acquisitive prescription.

In Laurel vs. Garcia, 187 SCRA 799, the Supreme Court said :It is not for the President to convey valuable real property of thegovernment on his or her own sole will. Any such conveyancemust be authorized and approved by law enacted by Congress.It requires executive and legislative concurrence.

See: Coaco vs. Bercilles, 66 SCRA 481.

See also: International Hardwood vs. Univ. of the Philippines, August 13, 1991, 200 SCRA 554.

OWNERSHIP IN GENERAL

Art. 427. Ownership may be exercised over things or rights.A person has the right to control a thing particularly in hispossession, enjoyment, disposition, and recovery, subjectto no restriction except those imposed by the law.

Right to Enjoy: In Marcos vs. Endencia, 38 O.G. 855 , it wasruled that the right to enjoy consists not only in the right to collectthe rents or fruits, in short, the benefits which accrue from the

thing, but also in the right to use and utilize the same accordingto its natural destination and in the right, besides, to make thething serve one’s necessities, one’s pleasures, and even, withinthe letter and spirit of the law, personal whims.

QUESTION: If a land has been foreclosed by the mortgagee,does the mortgagor still have the right to enjoy his foreclosedproperty?

A: YES, but only during the period of redemption. In GSIS vs.CA, 377 SCRA 54, it was held that the mortgagor has the right toredeem his property, possession, use and enjoyment of the sameduring the period of redemption.

Limitations on ownership:

1. Imposed by law : Easement of right of way; party wall;drainage.

2. Imposed by state: Police power; Power of taxation; Power of eminent domain.

3. Imposed by owner : In cases of lease, the owner cannot inthe meantime physically occupy the property; (alsopledges).

4. Imposed by grantor : The donor may prohibit the donee frompartitioning the property for a period not exceeding 20 years.

DOCTRINE OF SELF-HELP

Art. 429. The owner or lawful possessor of a thing has theright to exclude any person from enjoyment and disposalthereof. For this purpose, he may use such force as may bereasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of hisproperty.

This article was taken from Art. 227 of the German Civil Codewhich provides: An act impelled by legitimate necessity shall not

be unlawful. Legitimate necessity consists in the defenseindispensable to repel, personally or thru another, an actual or unjust situation.

Principle of self-help: It is lawful to repel force by means of force. It implies that the state of things to be defended enjoys

juridical protection. It is sort of self-defense, where the use of such necessary force to protect proprietary or possessory rightsconstitutes a justifying circumstance under the Penal Code.

The actual invasion of property may be:

a. Mere disturbance of possession – force may beused against it at any time as long as it continues, evenbeyond the prescriptive period for an action of forcibleentry. Thus if a ditch opened by Pedro in the land of Juan, the latter may close it or cover it by force at anytime.

b. Real dispossession – force, to regain possession canonly be used immediately after the dispossession.Thus, if Juan without the permission of Pedro picks upa book belonging to the latter and runs off with it, Pedrocan pursue Juan and recover the book by force.

In German Management & Services, Inc. vs. CA, 177 SCRA495 , it was held that the doctrine of self-help can only be



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exercised at the time of actual or threatened dispossession.When possession had already been lost, the owner must resortto judicial process for the recovery of property.

In People vs. Segovia, 103 Phil 1162 , the SC ruled that theowner of the plants who shot an animal to death, out of vengeance is not justified under the rule. The proper move for him to do is to drive away the animal and then seek damagesfrom the owner of the animal. For shooting and killing the animal,

he can be convicted of malicious mischief.

Nature of the aggression: The aggression must be illicit or unlawful. The right to self-help is not available against theexercise of right by another, such as when the latter executes anextra-judicial abatement of nuisance. Neither can it be usedagainst the lawful exercise of the functions of a public official,such as a sheriff attaching property.

DOCTRINE OF ACTS IN A STATE OF NECESSITY

Art. 432. the owner of a thing has no right to prohibit theinterference of another with the same, if the interference is

necessary to avert an imminent danger and the threateneddamage, compared to the damage arising to the owner fromthe interference, is much greater. The owner may demandfrom the person benefited indemnity for the damage to him.

This article, following the same principle of self-help contained inthe second part of Article 429, allows the use of defensive forceto preserve an existing situation, as against an external eventwhich the passive subject is entitled to repel as much as anunlawful aggression by another.

Examples of danger contemplated by this article are: the attackof animals, the spread of fire, the threat of flood, etc. Theattacking animal, belonging to another may be killed by the

victim; a house in the path of a fire may be demolished; and adike may be destroyed at one point to prevent a flood over other places. The law permits the injury or destruction of thingsbelonging to other provided this is necessary to avert a greater danger.

Requisites:

1. Existence of an evil sought to be avoided;2. The injury feared is greater than that done to avoid it;3. That there be no other practical and less harmful

means of preventing it;4. The means employed is necessary and indispensable

to avert danger.

Effect of mistake: The right to act in a state of necessitydepends upon the objective existence of the danger with therequisites provided by law. If through error , one believed himself to be in a state of necessity, or used means in excess of therequirements, his act would be illicit and the owner of theproperty used against him the defensive force authorized in Art.429.

Effect of negligence: The law does not require that the personacting in a state of necessity be free from negligence in thecreation of such situation. Thus, if a person picks up an unknownobject in a drug store and eats it, thinking it to be candy, and it

turns out to be poison, he can lawfully drink any antidote he mayfind in the store, even without the consent of the owner.

Basis of liability: The obligation to indemnity does not dependupon imputability. The basis of the liability is the benefit derived.

Conflict of rights: The right of self-help under Article 429 is notavailable against an act in a state of necessity.

Concept of just compensation

Just compensation: The fair and full equivalent for the losssustained (Mla. Railroad vs. Velasquez, 32 Phil 286 ). Themarket value of the condemned property plus consequentialdamages less consequential benefits (Manila Railroad vs.Fabie, 17 Phil. 208 ); See also EPZA vs. Dulay, 149 SCRA 305 .

QUESTION: May real property be subjected to an easement of right of way through expropriation?

A: In Republic vs. PLDT, 26 SCRA 620 , the SC ruled thatnormally, expropriation deals with a transfer of title or ownership;there is nothing wrong, therefore, in imposing a burden less thanthe transfer of ownership. It is unquestionable that real property

may through expropriation be subjected to an easement of rightof way.

QUESTION: In the event that the purpose of the expropriation isabandoned or withdrawn, is the previous owner entitled toreacquire the property?

A: In Fery vs. Municipality of Cabanatuan, 42 Phil 28 , the SCruled that if the decree granted full ownership to the petitioner,the latter remains the owner regardless of the disappearance or cessation of the public need for the property. If the grant of ownership or title is subject to the condition that it will revert tothe owner when the purpose of the expropriation is terminated or abandoned, the original owner of the property would reacquirethe property.

FORMULA: Market value + consequential damages –consequential benefits. [MRR vs. Velasquez, 32 Phil 286 ]

Illustration: PhP 10,000,000.00 market value of land + 2,000,000.00 consequential damages as when a

building is demolished PhP 12,000,000.00- 1,000,000.00 consequential benefits as when

market value of his separate adjacentproperty increased

PhP 11,000,000.00 amount of just compensation

RIGHT OF ACCESSION

Art 440. The ownership of property gives the right byaccession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially.

Accession, meaning of: The right of a property owner toeverything which is produced thereby or which is incorporated or attached thereto. “To the owner of the principal belongs theaccessory .”



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ACCESSION

DISCRETA (Produced) CONTINUA (Incorporated)

NATURAL INDUSTR’L CIVIL REAL PERSONAL

Spontaneousproducts of the

soil;The young andother productsof animals

Thoseproduced by

lands of anykind thrucultivation or labor

Rents of buildings;

Price of leases;

Amount of perpetual or lifeannuities.

INDT’L NATURAL Adjun Mix Spec

BuildingPlantingSowing

Alluvium AvulsionChange of course of riversformation of islands

Engraftment;attachment;weavingpainting;writing

Confusion (liquid);Commixtion(solids)

REMINDER:

Instances when the owner of land does not own the fruits:

§ Possessor in good faith of the land . (He owns the fruitsalready received.) (see : Art 544, par 1)

§ Usufruct . The usufructuary owns the fruits. (see Art 566)

§ Lease. The lessee gets the fruits of the land. (Of course, theowner gets the civil fruits in the form of rentals.) See Art.1654

§ In antichresis, the antichretic creditor gets the fruits,although said fruits should be applied first to the interest, if any is owing; and then to the principal amount of the loan.(see : Art. 2132)

RIGHT OF ACCESSION WITH RESPECT TO IMMOVABLEPROPERTY

GEN. RULE:

Art. 445. Whatever is built, planted or sown on the land of another and the improvements or repairs made thereon,belongs to the owner of the land.

To the owner of the principal (land for example) must belong alsothe accessions – in accordance with the principle that the“accessory follows the principal.”

NOTE: This article deals with accession continua morespecifically accession industrial – BUILDING, PLANTING,SOWING.

Exception: Art. 120 of the Family Code: A building constructedon the land owned by one of the spouses at the expense of theconjugal partnership will belong to the partnership or to thespouse who owns the land depending on which of the twoproperties has a higher value.

If the land is more valuable than the building, the building shall beowned by the owner of the land. If the building is more valuablethan the land , the entire property shall belong to the conjugalpartnership. In both cases, there is right of reimbursement at thetime of liquidation of the conjugal partnership.

RIGHTS OF THE LANDOWNER

Art. 447. The owner of the land who makes thereonpersonally or thru 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 thereparation of damages. The owner of the materials shallhave the right to remove them only in case he can do sowithout injury to the work constructed, or without theplantings, 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 tobe indemnified for damages.

LANDOWNER

Good Faith Bad Faith

Right to appropriate hematerials but he must pay itsvalue; or return the materials

provided they are nottransformed at the expense of the landowner

The owner of the materialsmay remove them providedthat there is no injury to thework constructed.

1. Liable to pay the value of thematerials plus damages;

2. Owner of the materials may

remove them whether there isinjury or none, plus damages.

Note: There is no provision of law which applies to a situationwhere the landowner is in good faith while the owner of thematerial is in bad faith.

However, it would seem that the landowner would not only be

exempted from reimbursement, but would also be entitled toconsequential damages (as when for instance, the materials areof inferior quality). Moreover, the owner of the materials wouldlose all rights to them, such as the right of removal, regardless of whether substantial injury would be caused.

REMINDERS:

§ Under Art. 447. The landowner himself (as distinguishedfrom Art. 448) makes the PLANTINGS, CONSTRUCTIONSOR WORKS on his land, BUT with the materials of another person.



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§ In such a situation, a NEW THING is produced (i.e.something that is built or constructed on a land by thelandowner with the materials of another), but does not resultin co-ownership. The owner therefore of the materials doesnot become part owner of the new thing. He is only entitledto recover their value.

§ In short, the law gives the LANDOWNER, who acted ingood faith, the right to APPROPRIATE the new thing

provided that he INDEMNIFIES the owner of the materials.

QUESTION: What if the landowner offers to dismantle the newthing and return the materials thereof to its owner?

A: Strictly speaking, the law does not grant this option. What thelaw provides is the right (of the landowner) to pay for the value of the materials. However, when the materials can be removedwithout causing injury thereof (i.e. statues, ornaments or other of like nature), or when the materials had not been t ransformed, thelandowner may return them at his expense to the owner of thematerials.

QUESTION: What if the new thing is dismantled, is the right of the owner of the materials revived?

A: It would seem that the law attributes ownership to thelandowner by giving them the option to pay for their value, hence,the right of the owner of the materials is not revived. However,the better rule should be that as long as there is no injury to thework constructed or to the planting, the same may be recoveredby the owner thereof.

REMINDERS:

§ In case of alienation by the landowner, the owner of thematerials may go against the new owner, because he is theone benefited by the accession. (Pacific Farms vs Esguerra30 SCRA 684)

§ Bad Faith; Good Faith, meaning of – (Cf. Arts. 453 and526). The builder, planter or sower is in bad faith if hemakes use of the land or materials which he knows belongto another.

Art. 448. The owner of the land on which anything has beenbuilt, sown or planted in good faith, shall have the right toappropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Article 546 and 548or to oblige the one who built or planted to pay the price of the land, and one who sowed, the proper rent.

However, the builder or planter cannot be obliged tobuy the land if its value is considerably more than that of

the building or trees. In such case, he shall pay reasonablerent if the owner of the land does not chose to appropriatethe building or trees after indemnity. The parties shall agreeupon the terms of the lease and in case of disagreement, thecourt shall fix the terms thereof .

Note: This article applies only if the builder, planter or sower is ingood faith. (See also Arts. 454 and 447.)

Applicability of Art. 448:

In Pecson vs. Court Of Appeals, 244 SCRA 407 , it washeld that Article 448 applies only to a land whose ownership is

claimed by two or more parties, one of whom has built someworks, one sown or planted something. It does not apply to acase where the owner of the land is the builder, sower or planter who then later loses ownership of the land by sale or donation.Nevertheless, the provision therein with respect to indemnity maybe applied by analogy considering that the primary intent of Art.448 is to avoid a state of forced co-ownership.

In PNB vs. de Jesus, 557 SCRA 411, the SC held that Art

448 refers to a piece of land whose ownership is claimed by twoor more parties, one of whom has built some works (or sown or planted something) and, not to a case where the owner of theland is the builder or sower or planter who then later losesownership of the land by sale or otherwise for “where the trueowner himself is the builder of works on his own land, the issueof good faint or bad faith is entirely irrelevant.”

Who is entitled to possession of the building if thelandowner opts to appropriate the building?

In Pecson [supra], the SC further held: Since the landowner opted to appropriate the apartment building, the owner of thebuilding is thus entitled to the possession and enjoyment of the

apartment building, until he is paid the proper indemnity, as wellas of the portion of the lot where the building was constructed.

This is so, because the right to retain the improvementswhile the corresponding indemnity is not paid implies the tenancyor possession in fact of the land which it is built, planted or sown.The petitioner not having been so paid, he was entitled to retainownership of the building, and, necessarily, the incometherefrom. [Cf: Mendoza vs. de Guzman, 54 SCRA 164]

What is the basis of reimbursement, cost of the building or the market value of the building?

Again, in Pecson [supra], it was held that the objective of Art. 546 of the Civil Code is to administer justice between the

parties involved in such a way as neither one nor the other mayenrich himself of that which does not belong to him. It istherefore the current market value of the improvement whichshould be made the basis of reimbursement.

A contrary ruling would unjustly enrich the privaterespondents who would otherwise be allowed to acquire a highlyvalued income-yielding four-unit apartment building for a measlyamount.

QUESTION: May a lessee or a tenant who introducedimprovements on a rented land recover for their value under Art.448?

A: In Balucanag vs. Francisco, 122 SCRA 498 , in relation toRivera vs. Trinidad, 48 Phil 396 , the SC ruled: “Art 448 doesnot apply to a lessee because as such lessee he knows that he isnot the owner of the leased premises. Neither can he deny theownership or title of his lessor. A lessee who introducesimprovements in the leased premises, does so at his own risk inthe sense that he cannot recover their value from the lessor,much less retain the premises until such reimbursement.”

Also, in Chua vs. Court of Appeals, 301 SCRA 358 , it washeld that: “…the fact that petitioners made repairs on thepremises is not a reason to retain the possession of the



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premises. There is no provision of law which grants the lessee aright of retention over the leased premises on that ground.”

“Art. 448 of the Civil Code, in relation to Art. 546, whichprovides for full reimbursement of useful improvements andretention of the premises until reimbursement is made, appliesonly to a possessor in good faith, i.e. one who builds on a land inthe belief that he is the owner thereof. This right is not applicableto a mere lessee, otherwise, it would always be in his power to

“improve” his landlord out of the latter’s property.”

What if both the landowner and the builder are in good faith,who shall prevail?

In a sense, it is the landowner, since the law grants uponhim the right either to appropriate or compulsory sale. In bothcases however, the builder is also protected.

OTHER REMEDIES:

In Filipinas Colleges vs. Timbang, 106 Phil 247 , the SCheld that the land and improvements may be sold at publicauction, applying the proceeds thereof to the payment of thevalue of the land and the excess, if any, to be delivered to the

owner of the improvements in payment thereof.

In Miranda vs. Fadullon, 97 Phil 801, it was held that theparties may decide to leave things as they are and assume therelation of lessor or lessee; and should they disagree as to theamount of the rental, they can go to court for the fixing of thatamount.

NOTE: Forced lease is also created when the landowner opts for compulsory sale [value of land is not immoderate] and the builder failed to pay.

Can the landowner refuse to exercise both options andinsists on removal?

In Ignacio vs. Hilario, 76 Phil 605 , it was held that thelandowner cannot both refuse to pay for the building and to sellthe land to the builder, and compel the latter to remove thebuilding. He is entitled to seek the removal of the building only if after having chosen to sell the land, the builder failed to pay for the same.

Is the landowner entitled to rentals from the builder duringthe period of retention?

In Grana vs. CA, 109 Phil 260 , the SC ruled that during thetime that the builder is retaining possession of the land, hecannot be required to pay rentals. Otherwise, the right of retention will be rendered nugatory.

What is the nature of the right of retention?

The right of retention is security for the payment of improvements. [Miranda vs. Fadullon, 97 Phil 801]. If thebuilding is gutted by fire, the basis for right of retention isextinguished. [Manotok vs. Tecson, 164 SCRA 587 ].

RULES TO REMEMBER:

IF LANDOWNER IS IN GOOD FAITH

He has two options: (It is the landowner who has the option isnot the builder, planter or sower.)

1. To appropriate for himself anything that has been built,planted or sown upon the proper payment of indemnity;(RIGHT OF APPROPRIATION) cf: Ignao vs. IAC 1- 18-91

Note: Ownership over the thing built, sown or planted does notpass to the landowner until after payment therefore has beengiven. In the meantime, the builder, planter or sower (who is ingood faith) has the right of retention (see: Martinez vs.

Baganus, 28 Phil 500 );

2. To compel the builder to buy the land unless the valueof the land be considerably more than the value of whathas been built, planted or sown; (RIGHT TOCOMPULSORY SELLING). In this situation, there isno right of retention because the planter, builder or sower is the one required to pay. (see: Bernardo vs.Bataclan, 66 Phil 598 )

Generally, the landowner has no RIGHT OF REMOVAL,except after having selected a compulsory sale, the builder,planter or sower fails to pay for the land (see: Ignacio vs.Hilario, 76 Phil 605 ).

Note: Once a choice is made by the landowner, it is generallyirrevocable. Thus, if the landowner has elected to get thebuilding, but is finally unable to pay for the indemnity or value of the building, she cannot afterwards elect to sell the land. (See:Tayag vs. Yuseco, 97 Phil 712 )

IF THE BUILDER, PLANTER IS IN BAD FAITH (Landowner ingood faith): (See: Arts. 449, 450 and 451)

1. He loses what is built, planted or sown without right toindemnity (except necessary expenses for thepreservation of the land), see: Art 452;

2. He may be required to demolish or remove what is builtor planted or sown;

3. The builder may be compelled to pay the price of theland (whether or not the value of the land isconsiderably higher than the value of the house) andthe sower proper rent;

4. He is liable to pay damages.

QUESTION: If Davao City is invaded and occupied by an enemycountry and an airstrip is constructed on a private land, who shallown the airstrip after the war, assuming the enemy is defeated?

A: In Republic vs. Lara, 96 Phil 170 , it was held that the airfieldbelongs to the Republic of the Philippines and not to the owner of the land. The Japanese Army cannot be considered a possessor in bad faith so as to make the airfield the property of the

landowner by industrial accession. International law allows thetemporary use by the enemy occupant of private lands andbuildings for all kinds of purposes demanded by the necessitiesof war.

ALLUVIUM

Art. 457. To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receivefrom the effects of the current of the waters. (See: Republicvs. CA, 132 SCRA 514)



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NOTE: This article applies also to creeks, streams, lakes(although the soil deposited may not be called alluvium.)

Forms of accession natural:

a. Alluvium;b. Avulsion;c. Change of course of rivers;d. Formation of islands.

Alluvium is the soil deposited or added to (accretion) the landsadjoining the banks of rivers and gradually received as an effectof the current of the waters. By law, the accretion is owned bythe owner of the estate fronting the river bank (riparian owner).

Accretion is the process whereby soil is deposited; alluvium isthe soil deposited on river banks.

Essential requisites of alluvium:

1. The deposit should be gradual and imperceptible as aprocess (natural); Current must be that of a river; doesnot apply to accretion by man-made means (see:Republic vs. CA, 132 SCRA 154);

2. 2. Current must be that of a rive (if lake, the depositmay not be called alluvium but the principle is thesame, see : Art. 84 Spanish Law on Waters);

3. The river must continue to exist (otherwise, if the river disappears, Art. 58 PD 1067, in re: Art. 461 NCC, shallapply);

4. The increase must be comparatively little.

QUESTION: What is the nature of an alluvion and how is itacquired?

A: In Ferrer vs. Bautista, 231 SCRA 257 , it was held that: Article457 of the Civil Code, under which petitioner claims ownershipover the disputed parcel of land, provides: “Art. 457. To the

owners of land adjoining the banks of rivers belong the accretionwhich they gradually receive from the effects of the current of waters.” Undoubtedly, plaintiff is the lawful owner of theaccretion, she being the registered owner of Lot Not. 1980 whichadjoins the alluvial property.

Alluvion gives to the owners of land adjoining the banks of rivers or streams any accretion which is gradually received fromthe effects of the current of water. The rationale for the rule is toprovide some kind of compensation to owners of land continuallyexposed to the destructive force of water and subjected tovarious easements.

QUESTION: Does the Director of Land have jurisdiction to grant

title over alluvial claims by third party who is not the riparianowner?

A: In Ferrer vs. Bautista [supra], the Director of Lands has noauthority to grant a free patent over the land that has passed toprivate ownership and which has thereby ceased to be publicland. Any title thus issued or conveyed by him would be null andvoid. Private respondents, therefore, acquired no right or titleover the disputed land by virtue of the free patent since at thetime it was issued in 1966, it was already private property and notpart of the disposable land of the public domain.

QUESTION: Is there a need for the riparian owner of making aformal claim of possession?

A: In Agne vs. Director, 181 SCRA 793, it was held that theriparian owner may not necessarily make an express act of possession, it being that the accretion is automatic, the momentthe soil deposit appears.

However, in Grande vs. CA, 6-30-62 , it was held that an alluvial

deposit does not automatically become registered land simplybecause the lot which receives it is covered by a Torrens Title. Although the owner of the land on which the alluvial deposit ismade becomes automatically the owner of the alluvial deposit,the law not requiring any act of possession on his part from themoment the deposit becomes manifest.

Still ownership of a piece of land is one thing and registrationunder the Torrens System is another. In order that the alluvialdeposit may be entitled to the protection of imprescriptibility, thesame must be placed under the operation of the LandRegistration Law. An unregistered alluvial property is thereforesubject to acquisition through prescription by third person.

AVULSION

Art. 459. Whenever the current of a river, creek or torrentsegregates from an estate on its bank a known portion of land and transfers it to another state, the owner of the landto which the segregated portion belonged retains theownership of it, provided that he removes the same withintwo years.

Avulsion - the process whereby the current of a RIVER,CREEK or TORRENT segregates from an estate on its bank aKNOWN PORTION of land and transfers it to another estate.

Avulsion implies a violent tearing or breaking away. It may also

be referred to as “delayed accession” in the sense that if theowner abandons the soil involved, or fails to remove (not merelyclaim) the same within two years, the land to which it had beenattached acquires ownership thereof.

REMINDERS :

§ Torrent means a violent, rushing or turbulent stream.

§ The law does not make a distinction whether the portionsegregated is big or small.

§ If the detached portion is not attached to another’s land butsimply is in the middle of the river, ownership still remainswith the person whose land it had been detached.

Art. 462. Whenever a river, changing its course by naturalcauses, opens a new bed through a private estate, this bedshall become of public dominion.

QUESTION: If the cause of the damage is due to artificialmeans, is the riparian owner entitled to compensation?

A: In Baes vs. CA, if the riparian owner is entitled tocompensation for the damage to or loss of his property due tonatural causes, there is all the more reason to compensate himwhen the change in the course of the river is effected through



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artificial means. The loss to the petitioners of the land covered bythe canal was the result of a deliberate act on the part of thegovernment when it sought to improve the flow of the Tripa deGallina creek. It was therefore obligated to compensate theBaeses for the loss.

QUIETING OF TITLE

Art. 476. Whenever there is a cloud on title to real propertyor any interest therein, by reason of any instrument, record,claim, encumbrance, or proceeding which is apparently validor effective but is in truth and in fact invalid, ineffective,voidable or unenforceable, and may be prejudicial to saidtitle, an action may be brought to remove such cloud or toquiet the title. An action may also brought to prevent acloud from being cast upon title to real property or anyinterest therein.

Note: Please observe that when the instrument is not valid on itsface, the remedy does not apply.

What is an action for quieting of title?

In Robles vs. CA, 328 SCRA 97 , the SC said: An action for quieting of title is a common law remedy for the removal of anycloud or doubt or uncertainty on the title to the real property. It isessential for the plaintiff or complainant to have a legal or anequitable title to or interest in the real property which is thesubject matter of the action. Also, the deed, claim, encumbranceor proceeding that is being alleged as a cloud on plaintiff’s titlemust be shown to be in fact invalid or inoperative despite itsprima facie appearance of validity of legal efficacy.

What must be proven in an action to quiet title?

In Secuya vs. Vda. De Selma, 329 SCRA 244, it was heldthat in an action to quiet title, the plaintiffs or complainants must

demonstrate a legal or an equitable title to, or an interest in, thesubject real property. Likewise, they must show that the deed,claim, encumbrance or proceeding that purportedly casts a cloudon their title is in fact invalid or inoperative despite its prima facieappearance of validity or legal efficacy.

Requisites:

1. Existence of an instrument (deed or contract) or recordor claim or encumbrance or proceeding;

2. The instrument or proceeding is apparently valid or effective, and prejudicial to the title;

3. In truth and in fact, invalid, ineffective, voidable or unenforceable, or extinguished.

Test : Would the owner of the property in an action at law broughtby the adverse party and founded upon the instrument or claim,be required to offer evidence to defeat a recovery? If proof wouldbe essential, the cloud exists; if proof is not needed, no cloud iscast.

Example: Alma’s land was sold by Roger (a forger) to B, a buyer in good faith. Alma’s name had been forged by Roger in thedeed of sale. The sale on its face is apparently valid, with Alma’sname indicated as the seller. In truth, however, the sale is

defective because of the forgery. Alma’s remedy is an action toquiet title.

Question: Does an action to quiet title prescribe?

A: It depends, if the plaintiff is in possession of the property, theaction does not prescribe. But if the plaintiff is not in possessionof the property, the action may prescribe (see: Fernandez vs.Court of Appeals, 189 SCRA 780 ; Mamadsual vs. Moson, 140

SCRA 83) In Pingol vs. Court Of Appeals, 226 SCRA 118 , the SCruled that although the plaintiff’s complaint was denominated asone for specific performance, it is in effect an action to quiet title.Prescription thus cannot be invoked against the privaterespondents 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 state thus: “The owner of real propertywho is in possession thereof may wait until his possession isinvaded or his title is attacked before taking steps to vindicate hisright. A person claiming title to real property, but not inpossession thereof, must act affirmatively and within the timeprovided by the statute.

Possession is a continuing right as in the right to defendsuch possession. So it has been determined that an owner of real property in possession has a continuing menace to his title.Such menace is compared to a continuing nuisance or trespass,not barred by statute until continued without interruption for alength of time sufficient to affect a change of title as a matter of law. (see also: Sapto vs Fabiano, 103 Phil 683; Bucton vsGabar, 55 SCRA 499; Dignos vs CA, 158 SCRA 375; Coronel vsIAC, 155 SCRA 270; Solid State vs CA, 196 SCRA 630)

CO-OWNERSHIP

Art. 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.

Note: Under this article, co-ownership may exist as to rights, andis not limited to corporeal things. (see: Samaniego vs. VillajinC.A OG 3137 )

In Javier vs. Javier, 5 Phil 78 , when a house is owned byone person, and the lot by another, there is no co-ownershipcreated over the properties.

Characteristics: (Co-ownership may also be referred to asTenancy in common)

1. Plurality of subjects;2. Singularity or unity of object;3. Recognition of ideal shares.

In de Guia vs. CA, 413 SCRA 114, the SC held that there isno co-ownership when the different portions owned by differentpeople are already concretely determined and separatelyidentifiable even if not yet technically described.



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Rules regarding ideal share:

§ Each co-owner has full ownership of his part, and of hisshare in the fruits and benefits (Art. 493);

§ He may alienate, assign or mortgage his ideal share. (Art.493);

What governs co-ownership?

a. Contracts; in default thereof:

b. Special legal provisions;c. The law on co-ownership.

Sources of co-ownership:

¬ LAW - party walls; party ditches; intestate succession;properties acquired by a man and a woman whosemarriage is void;

¬ CONTRACT - two persons buy a parcel of land sharing inthe purchase price and agree not to divide the land for tenyears;

¬ CHANCE - commixtion, confusion, hidden treasure;

¬ WILL - when two persons are named as legatees or

devisees of an undivided thing;¬ OCCUPATION - Punzalan vs. Boon Liat, 44 Phil 320 ,

when a wild beast is caught by several persons.

Rules on the shares of co-owners in the benefits andcharges (Art. 485):

a. The share in the benefits and charges is proportional tothe interest of each. Hence, if one co-owner owns 2/3,he shares 2/3 of the taxes;

b. Contrary stipulation is VOID. To do so would be to runagainst the nature of co-ownership;

c. Each co-owner shares proportionately in the accretionor alluvium of the property. This is because anincrease in area benefits all.

LIMITATIONS on co-owner’s right to use the thing owned incommon (Art. 486):

a. Can be used only according to the purpose for which itwas intended;

To determine the purpose for which the property isintended, the agreement of the co-owners (express or implied) should govern. In default of any agreement: (1) thatto which the thing is ordinarily adapted according to itsnature or; (2) the use to which it has been previouslydevoted.

Thus, if the co-owners of a vessel agree that it shall beused as a warehouse or storage place for grain, one of theco-owners cannot order the grain removed and use thevessel for maritime transportation. Mere tolerance on thepart of the co-owners cannot legalize the change in the useof the thing from that intended by the co-owners.Prescription cannot be invoked to establish a right to suchdifferent use, because mere tolerance cannot be the basisof prescription.

In Aguilar vs. Court of Appeals, 227 SCRA 472 , itwas held that being a co-owner respondent has the right to

use the house and lot without paying any compensation tothe petitioner, as he may use the property owned incommon so long as it is in accordance with the purpose for which it is intended and in a manner not injurious to theinterest of the other co-owners.

Each co-owner of property held pro indiviso exerciseshis rights over the whole property and may use and enjoythe same with no other limitation than that he shall not injure

the interest of his co-owners, the reason being that until adivision is made, the respective share of each cannot bedetermined and every co-owner exercises, together with hisco-participants joint-ownership over the pro indivisoproperty, in addition to his use and enjoyment of the same.

b. The right to use must not prejudice the interest of theco-ownership;

A co-owner cannot devote community property to hisexclusive use to the prejudice of the co-ownership. Thus,where the co-owners have agreed to lease a building ownedin common, a co-owner cannot retain it for his use withoutpaying the proper rent.

c. The right to use must not be exercised to prevent theothers from making use thereof according to their ownright.

The right of enjoyment by each co-owner is limited by asimilar right of others. Hence, if the thing is a dwellinghouse, all the co-owners may live therein with their respective families, to the extent possible. But if one co-owner alone occupies the entire house without opposition of the others, and there is no agreement to lease it, the other co-owners cannot demand the payment of rents.

They can either exercise an equal right to live in thehouse, or agree to lease it; if they fail to do so, they must

bear the consequences. It would be unjust to require theco-owner to pay rents after the other co-owners by their silence have allowed him to use the property.

Art. 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.

Alteration is a change: which (a) is more or less permanent; (b)changes the use of the thing; and (c) prejudices the condition of the thing or its enjoyment by the others.

It is also a change (not limited to physical) of state of thething or the withdrawal of the use from that intended.

Example: sale; donation; or mortgage of the property.

In determining alterations, it is sometimes necessary toconsider the nature of the thing itself. Thus, when a thing doesnot require any modification for its enjoyment, whatever modifications or change that is made will be considered analteration. But when a thing in its nature requires changes, such



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an industry or business, in its exploitation, such modifications andvariations should be considered as falling under acts of administration.

REMINDERS:

§ Article 491 requires unanimity of consent, whether tacit or express.

§ Effect of tacit consent - although the co-owner who is

deemed to have tacitly consented to the alteration cannotask for the demolition, neither can he be held liable toanswer for any part of the expenses incurred therein,because the obligation to pay such expenses cannot bedeemed to be the subject of his tacit consent.

In PNB vs. CA, 98 SCRA 207 in rel. to Castro vs. Atienza,53 SCRA 264, the SC said that the alienation of a commonproperty by a co-owner without the unanimous consent of all theco-owners is void not because the nature of the thing had beenchanged or altered, but because of the lack of unanimousconsent required by law – as acts of alienation such as sale,donation, mortgage, lease for more than one year, etc. are actsof ownership which could be exercised only by all. Thetransaction is valid only with respect to the share of the co-owner alienating.

What are the rights of a co-owner with regard to his idealshare?

In Go Ong vs. CA, 154 SCRA 270 , it was held that under the provisions of Art. 493, the heirs as co-owners shall each havethe full ownership of his part and the fruits and benefits pertainingto it. An heir may, therefore alienate, assign or mortgage it, andeven substitute another person in its enjoyment, except whenpersonal rights are involved. But the effect of alienation or mortgage, with respect to the co-owners, shall be limited to theportion which may be allotted to him in the division upon the

termination of the co-ownership. [see also: PNB vs. CA, 98 SCRA 207 ]

In Lopez vs. Ilustre, 5 Phil 576 , it was held that what a co-owner may dispose of is only his undivided share, which shall belimited to the portion which may be allotted to him upon thetermination of the co-ownership. He has no right to divide theproperty into parts and then convey one part by metes andbounds.

Art. 494.

General Rule:

No co-owner shall be obliged to remain in the co-ownership.

Each co-owner may demand at any time the partition of thething owned in common, insofar as his share is concerned.

Reasons:

a. To avoid conflicts in management;b. The law discourages co-ownership;c. The disposition or enjoyment of the thing owned in

common is subject to the desire of all co-owners.

Exceptions:

When there exists a PROHIBITION, because:

a. of the existence of an AGREEMENT between theparties

• not more than 10 years, extendible by a newagreement after the termination of the originalperiod; hence, no automatic renewal, otherwise, theintention of the law would be defeated.

• If more than 10 years, void as to the excess;

•

If prohibition is perpetual, valid only up to 10 years;• If agreement is subject to a resolutory condition, the

agreement ends upon fulfillment of the conditionprovided it does not exceed 10 years.

b. the LAW does not allow partition; (conjugal partnershipas a general rule);

c. of the WILL of the donor or testator; (the prohibitionmay be up to 20 years);

d. the legal NATURE of the property does not allowpartition (i.e. automobile, partition shall proceed inaccordance with the rules set forth under Art. 498).

Note: As a general rule, prescription against a co-owner doesnot lie.

In Aguilar vs. CA, 227 SCRA 472 , in rel. to Salvador vs.CA, 243 SCRA 239, the SC held that: Partition means thesegregation or division of a property in common to those to whomit belongs in parts. A co-owner has the right to demand atanytime the partition or segregation of his share in the thingowned in common. The right to demand partition does notprescribe as long as the co-ownership is recognized.

In order that the title may prescribe in favor of a co-owner,the following requisites must concur : (Robles vs. Court of

Appeals, 328 SCRA 97 )

1. The co-owner has performed unequivocal acts of repudiation amounting to an ouster of the other co-owners;

2. Such positive acts of repudiation have been madeknown to the other co-owners;

3. The evidence thereof is clear and convincing.

In Robles vs. CA, the SC ruled that: Hilario did not havepossession of the subject property; neither did he excludepetitioners from the use and enjoyment thereof, as they haveindisputably shared in its fruits. Likewise, his act of entering intothe mortgage contract with the bank cannot be construed to be arepudiation of the co-ownership. As an absolute owner of hisundivided interest in the land, he had the right to alienate his

share, as he in fact did. Neither should his payment of land taxesin his name, as agreed upon by the co-owners, be construed asrepudiation of the co-ownership. The assertion that thedeclaration of the co-ownership was tantamount to repudiationwas belied by the continued occupation and possession of thedisputed property by the petitioners as owners.

Exception:

a. When a co-owner gives notice to the other co-ownersthat he is repudiating the co-ownership and that he isclaiming ownership of the entire property;



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b. The requirement of continuous, open, public, adversepossession for the period of time required must be met;

Note:

Acts which may be considered adverse insofar as strangersare concerned may not be considered adverse insofar as co-owner is concerned. In other words, it is harder for a co-owner acquire properties of strangers. Hence, mere actual possession

by one co-owner will not give rise to the inference that thepossession was adverse. This is because a co-owner is after allentitled to possession of the property. There must indeed be adefinite repudiation and the possession is to the exclusion of other co-owners.

In Salvador vs. CA, 243 SCRA 239, it was held that a meresilent possession by a co-owner, his receipts of rents, fruits or profits from the property, the erection of buildings and fences andthe planting of trees thereon, and the payment of land taxes,cannot serve as proof of exclusive ownership, if it is not borne outby clear and convincing evidence that he exercised acts of possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners.

Note: The period of prescription commences from the date of therepudiation.

POSSESSION

Art. 523: Possession is the holding of a thing or theenjoyment of a right.

What is the relationship between ownership andpossession?

As a general rule, possession is an element of ownership.However, this is not absolute, there are circumstances whereby

the owner of the thing does not possess the thing.Essential Requisites of Possession: (Must concur)

1. Holding, maybe actual or constructive, the body of thing or the corpus. (There is occupancy, taking or apprehension)

2. Intent to hold it, the animus or desire.3. The possession must be by virtue of one’s own right.

Hence, an agent who holds is not t ruly in possession; itis the principal who possesses thru the agent.

Classes of possession:

1. Possession is one’s own name or possession in the

name of another; (see Art. 524)2. Possession in the concept of an owner or possessionin the concept of a holder; (see Art. 525)

3. Possession in good faith or possession in bad faith.(See Art. 526)

What are the Degrees of Possession?

1. The mere holding of a thing without the title, or theholding of a thing in violation of the rights of the owner.

Example: A thief possesses a thing without title and inviolation of the right of the owner.

2. Possession with juridical title, but not that of ownership.

Example: Contract of lease; Usufruct; Possession by:tenant; depository; bailee; or lessee. All these have

juridical titles but they are not the owners.

3. Possession with just title not sufficient to possessownership. (a.k.a. real possessory right.);

Example: “A” in good faith buys an automobile from “B”

who delivers the same to “A”, and who merelypretended to be the owner thereof.

4. Possession with a title of dominium. This is possessionarising from ownership.

What are the concepts of possession?

Art. 525. The possession of things or rights may be had inone of two concepts: either in the concept of owner , or inthat of the holder of the thing or right….

a. In the concept of an owner : It is the possession bythe owner himself or by a person who CLAIMS to beand ACTS as the owner, whether he is in good faith or

in bad faith. He possesses the thing in such a way thathe makes people believe or see that he is the owner and recognizes no title or ownership in another.

Possession in the concept of owner vs. Torrens title:

In Apostol vs. CA, 432 SCRA 351, the SC ruled that thepresumption of ownership granted by law to a possessor in theconcept of an owner under Art 541 is only prima-facie and cannotprevail over a valid title registered under the Torrens System. It isan accepted rule that a person who has a torrens title over theproperty is entitled to the possession thereof.

In Occena vs. Esponilla, 431 SSCRA 116 , the SC ruledthat the defense of indefeasibility of Torrens title does not extend

to a transferee who takes the certificate of title in bad faith withnotice of a flaw. A buyer of real property in the possession of persons other than the seller must be wary and shouldinvestigate the rights of those in possession otherwise he canhardly be regarded as buyer in good faith and cannot have anyright over the property.

Prior possession, not necessary in a suit for unlawful detainer

In a case for unlawful detainer, as when the new owner of the house ejects the tenant therefrom, is prior physicalpossession an indispensable requisite on the part of the newowner?

In Apostol vs. CA, 432 SCRA 351, the SC ruled that “thefact that the respondents were never in prior physical possessionof the subject land is of no moment, as prior physical possessionis necessary only in forcible entry cases.”

Distinction: Proof of possession in forcible entry andunlawful detainer

In Pajuyo vs. CA, 430 SCRA 492 , the SC held that: “Prior possession is not always a condition sine qua non in ejectment.This is one of the distinctions between forcible entry and unlawfuldetainer. In forcible entry, the plaintiff is deprived of physical



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possession of his land or building by means of force, threat,strategy or stealth. Thus, he must allege and prove prior possession. But in unlawful detainer, the defendant unlawfullywithholds possession after the expiration or termination of hisright to possess under any contract, express or implied. In suchcase, prior physical possession is not required.

b. In the concept of holder : Here, the possessor recognizes another to be the owner.

Examples: Tenant; Usufructuary; Depositary; Bailee incommodatum.

What is the nature of possession by a lessee?

In Maglucot-aw vs. Maglucot, 329 SCRA 78 , it was heldthat one who possesses as a mere holder acknowledges inanother a superior right which he believes to be ownership,whether his belief is right or wrong.

In Jose M. T. Garcia vs. Court of Appeals, et al., G.R. No.113140, August 10, 1999, the SC held that possessor who ismerely tolerated by owner is a possessor in the concept of holder and such possession does not hinder a valid transfer of

ownership by the owner thru its sale to another.

In Servando Mangahas vs. Court of Appeals, G.R. No.95815, March 10, 1999, it was ruled that there can be noacquisitive prescription of land in favor of the possessor if thepossession is in the concept of holder .

In Sotera Paulino Marcelo, et al. vs. CA, G.R. No.131803. April 14, 1999, the SC ruled: "Acquisitive prescription isa mode of acquiring ownership by a possessor through therequisite lapse of time. In order to ripen into ownership,possession must be in the concept of an owner, public, peacefuland uninterrupted.

Thus, mere possession with a juridical title, such as, to

exemplify, by a usufructuary, a trustee, a lessee, an agent for apledgee, not being in the concept of an owner, cannot ripen intoownership by acquisitive prescription, unless the juridical relationis first expressly repudiated and such repudiation has beencommunicated to the other party.

Acts of possessory character executed due to license or bymere tolerance of the owner would likewise be inadequate.Possession, to constitute the foundation of a prescriptive right,must be en concepto de dueno, or, to use the common lawequivalent of the term, that possession should be adverse; if not,such possessory acts, no matter how long, do not start therunning of the period of prescription.”

POSSESSION IN GOOD FAITH AND POSSESSION IN BADFAITH

Art. 526. He is deemed a possessor in good faith who is notaware that there exists in his title or mode of acquisition anyflaw which invalidates it. He is deemed a possessor in badfaith who possesses in any case contrary to the foregoing.Mistake upon a doubtful or difficult question of law may bethe basis of good faith.

AWARENESS of any FLAW is question of knowledge.

ü If he is not aware – GOOD FAITH. There is always apresumption that every possessor is a possessor ingood faith. (see Art. 527)

ü If he is aware – BAD FAITH. This is purely personal tothe possessor. It may not necessarily be transmitted tothe heir.

In Sotera Paulino Marcelo, et. al. vs. CA, G.R. No.

131803, April 14, 1999, the SC ruled that transferee of anunregistered parcel of land for value from a buyer and who tookimmediate possession thereof has the benefit of good faith in hisfavor. Ordinary acquisitive prescription of 10 years is applicable.

In Republic vs. CA, 102 SCRA 331, it was held that aparty’s mere refusal to believe that a defect exists and his willfulclosing of his eyes to the possibility of the existence of a defect inhis vendor’s title will not make him an innocent purchaser for value if it afterwards develop that the title was in fact defective.Hence, if circumstances exist that require a prudent man toinvestigate; he will be in bad faith if he does not investigate.[See: Leung Lee vs. Strong, 37 Phil. 464]

In Republic vs. De Guzman, 326 SCRA 267 , the SC ruledthat the burden of proving the status of purchaser in good faithand for value lies upon him who asserts that status. Indischarging the burden, it is not enough to invoke the ordinarypresumption of good faith. “The rule is settled that a buyer of realproperty which is in possession of persons other than the seller must be wary and should investigate the rights of who is inpossession. Otherwise, without such inquiry, the buyer canhardly be regarded as buyer in good faith.”

ACQUISITION OF POSSESSION

Art. 531. Possession is acquired by the material occupation

of a thing or the exercise of a right, or by the fact that it issubject to the action of our will, or by the proper acts andlegal formalities established for acquiring such right.

Three ways of acquiring possession:

1. Material occupation of the thing/exercise of a right.

¬ Holding, apprehension, arrest, occupancy.Occupation is used here in its ordinary sense whichmeans holding of a thing which must be physical.(Also the exercise of a right.)

2. By the action of our will. (By agreement)

¬ Here, there is no actual physical detention or seizure

of the thing but the agreement between the partiesconstitutes the fact of possession.

3. Proper acts and legal formalities established bylaw. This is the legal formality which gives rise topossession.

¬ These are certain documents that can ordinarily giverise to possession because of legal fiction. Themoment that document takes effect, automatically,the person in whose favor that documents is



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executed is deemed to have acquired possession of that property.

In Medina vs. Greenfield Dev. Corp., the SC held that: “…the execution of the deeds of conveyance is already deemedequivalent to delivery of the property and prior physicalpossession is not required. Possession is also transferred, alongwith ownership thereof, by virtue of the notarized deeds of conveyances. Under Art 1498 of the Civil Code, when the sale is

made through a public instrument, the execution thereof shall beequivalent to delivery of the object of the contract.

• In donations, there is no need of delivery. The moment thedonation is in the form provided by law, the donee is deemedto be in possession of the thing donated. Ownership isautomatically acquired by the donee.

• In wills, upon the death of the decedent if the will is valid, theheirs mentioned in the will are deemed automatically, by fictionof law to be in possession of the hereditary estate. Actuallyand in truth, the heirs are not in actual possession but byfiction of law, the possession by the decedent is deemed to becontinued without any interruption. Art. 533.

QUESTION: Who is the preferred possessor amongclaimants? Can tax receipts and declarations be the basis of claim of ownership through prescription?

A: In Cequeña vs. Bolante, 330 SCRA 216 , it was held thatpetitioners did not lose legal possession because possessioncannot be acquired through force or violence. For all intents andpurposes, a possessor even if physically ousted is still deemedthe legal possessor. Indeed, anyone who can prove prior possession, regardless of its character, may recover suchpossession.

The respondent is the preferred possessor because,benefiting from her father’s tax declaration of the subject lot since

1926, she has been in possession thereof for a longer period. Onthe other hand, petitioner’s father acquired joint possession onlyin 1952.

Tax receipts and declarations of ownership, when coupledwith proof of actual possession of the property, can be the basisof a claim for ownership through prescription. Respondent’spossession was not disturbed until 1953 when the petitioner’sfather claimed the land. But by then, her possession, which wasin the concept of an owner – public, peaceful and uninterrupted –had already ripened into ownership. Furthermore, she herself after her father’s demise, declared and paid realty taxes for thedisputed land.

Tax declarations and receipts are not conclusive evidenceof ownership. At most, they constitute mere prima facie proof of ownership or possession of the property for which taxes havebeen paid. In the absence of actual, public and adversepossession, the declaration of the for tax purposes does notprove ownership.

The petitioners, despite 32 years of farming the subjectland, did not acquire ownership by mere occupation. Unlesscoupled with the element of hostility toward the true owner,occupation and use, however long, will not confer title byprescription or adverse possession.

In Republic vs. CA, 258 SCRA 712 , the SC ruled thatalthough tax declarations or realty tax payments of property arenot conclusive evidence of ownership, nevertheless, they aregood indicia of possession in the concept of owner for no one inhis right mind would be paying taxes for a property that is not inhis actual or at least constructive possession.

They constitute at least proof that the holder has a claim of title over the property. The voluntary declaration of a piece of

property and announces his adverse claim against the State andall other interested parties, but also the intention to contributeneeded revenues for the government. Such an act strengthensone’s bona fide claim of acquisition of ownership.

Who may acquire possession?

One who is in full possession of his civil capacity canacquire possession of a thing or a right through any of the threeways of acquiring possession as provided in Art. 531 (i.e.: [a]material occupation of the thing; [b] by the action of our will; [c]proper acts and legal formalities established by law.) or may acquire (under Art. 432): [a] through his representative; [b] by hisagent; or [c] by any person without any power whatsoever

(negotiorum gestio)

Note: The possession of a person without power cannot beacquired without the ratification of the person in whose name theact of possession was executed.

QUESTION: May minors and incapacitated persons acquirepossession?

A: Minors and incapacitated persons may acquire possession inthose matters where they have capacity to act like in the case of physical seizure of res nullius or donation of personaltysimultaneously delivered to them and not possession where

juridical acts are imperative like donations of realty where minorsand incapacitated persons have no juridical capacity to execute.

(see also: Art. 535.)

QUESTION: What are the circumstances that cannot give rise topossession?

1. Force, violence, intimidation.

In Ayala de Roxas vs. Maglanso, 8 Phil 745 in rel. to Morenovs. Goco, 26 Phil 496 , it was held that possession acquired byforce or violence does not affect possession because suchpossession is not true possession respected by law. For allpurposes favorable to the true owner or possessor, hispossession is not considered interrupted.

In Bishop of Lipa vs. Mun. of San Jose, 27 Phil 571, it was

held that there is force or violence in the acquisition, even whenthe property was not forcibly taken away from the owner, if theintruder occupied it during the absence of the owner and commitsacts which repel the return of the owner.

2. Mere tolerance of the owner .

Concept – Acts merely tolerated are those allowed by the owner not by reason of duty or obligation but by the impulse of sense of neighborliness or good familiarity with persons.

In Municipality of Nueva Caceres vs. Director of Lands, 24Phil 485 it was held that even assuming that these acts continue,



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they do not affect possession. On the basis of these acts, no rightwill be acquired by prescription.

In Estrella vs. Director of Lands, 106 Phil 911 in rel. to Yu vs.de Lara, 116 Phil 1106 , it was held that a person who occupiedanother’s property at the latter’s tolerance without any contractbetween them, is necessarily bound by an implied promise tovacate it upon demand, falling in which ejectment suit is proper against him.

3. Clandestine acts or secret possession. They cannotgive rise to possession, for possession must be open.

EFFECTS OF POSSESSION

Art. 539.

The right to be:

a. Respected in his possession;b. Protected or restored to said possession by legal

means in case of disturbance of another;

Reasons for the rule – To:a. prevent a positive attempt against public order;b. avoid disturbances in the community;c. prevent deprivation of property without due process of

law;d. avoid taking into his own hands the administration of

justice.

Remedies:

1. Action for forcible entry – the unlawful deprivation of possession by means of force, intimidation, stealth,threat or strategy. Here, the dispossession arises froma situation or condition under which a person can

wrongfully enter upon a real property and excludeanother, who has had possession, therefrom.

2. Unlawful detainer action

3. Accion publiciana – where the cause of action arosemore than one year prior to the filing of the complaint torecover possession of real property, and therefore theaction for forcible entry and detainer can no longer beinstituted. The issue here is who has the better right of possession?

PRESUMPTION OF OWNERSHIP

Art. 541. A possessor in the concept of an owner has in hisfavor the legal presumption that he possesses with a justtitle and he cannot be obliged to show or prove it.

What does it mean by “he possesses with a just title and hecannot be obliged to show or prove it”?

In Chan vs. CA, 33 SCRA 737 , the clause “he possesseswith a just title and he cannot be obliged to show or prove it”means that, the possessor cannot be inquired about hisownership without any valid reason, for he is presumed to be the

owner thereof. Anyone who claims to be the true owner mustresort to judicial process for the recovery of the property.

Note: The term “just little” refers to true and valid title – a titlewhich by itself is sufficient to transfer ownership without thenecessity of letting the period elapse. (see: Diolente vs.Biarnessa, 7 Philippines 232)

Example: “B” brought a car from “S”, the owner thereof. Then “S”

delivered the car to “B”. “B” now has a valid and true title over thecar. Thus, if “B” possesses and drives the car around as anowner, other people cannot compel him to prove ownershipthereof.

Note: For purposes of prescription, “just title” means colorabletitle – that title where, although there was a mode of transferringownership, still something is wrong, because the grantor is notthe owner of the thing.

Example: In the above example, if it turn out that “S” is not theowner of the car and somebody else was its owner, “B” would notbe considered as the owner thereof because he did not acquire itfrom the owner of the car, irrespective whether or not he is ingood faith. However, for purposes of prescription, his possessionis just considered as “just title” of the period required by lawdepending on whether he is in good faith or not. Of in good faith

– 4 years ( personal property); in bad faith - 8 years.

Reasons for the presumption:

1. A possessor is always presumed to be in good faith.2. Because of the inconvenience of carrying proofs of

ownership around.

Requisites in order that the principle “Possession ispresumed ownership” to apply:

1. One must be in possession, actual or constructive;2. The possession must be in the concept of an owner,

not mere holder; (see: Art. 540)

Art. 544. A possessor in good faith is entitled to the fruitsreceived before the possession is legally interrupted.

Natural and industrial fruits are considered receivedfrom the time they are gathered or severed.

Civil fruits are deemed to accrue daily and belong to thepossessor in good faith in that proportion.

Applicability of the article: The article applies to fruits only. Itcannot extend to other things like the dismantled materials from ademolished house, part of the hidden treasure pertaining to theowner of the land.

Who are the possessors entitled to the fruits?

Only possessors in good faith are entitled to fruits.Possessors in bad faith on the other hand are not entitled to fruitsbut even required to reimburse the fruits already received and tosome extent damages.

In Calma vs. Calma, 56 Phil 102 , during the time thepossessor is considered in good faith, he is entitled to the fruitshe had received out of the property he is possessing. From themoment his good faith had been converted into bad faith – such





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2. That the owner has voluntarily parted with thepossession of the thing;

3. That the possession is in the concept of an owner.

Note: Under this situation, if the (real) owner gets the thing, hemust REIMBURSE.

Exceptions to the rule: [Note: Here, there is NOREIMBURSEMENT.]

1. When the owner has lost the thing;2. When the owner has been unlawfully deprived of the

thing;

Exception to the exception: When the possessor had acquiredthe thing in good faith at a public sale (public auction sale).

[Note: Here, the owner of the thing shall REIMBURSE the pricepaid.]

Instances where there could be NO RECOVERY even if owner offers reimbursement:

1. If possessor acquired the thing in good faith bypurchase from a MERCHANT STORE or in FAIRS or in

MARKETS, in accordance with the code of COMMERCE of special laws (see Art. 1505, NCC and

Art 85 of the Code of Commerce);2. If owner is by his own conduct precluded from denying

the seller’s authority to sell (Estoppel); see: Art. 1505,NCC;

3. Holders in due course; Art. 1518, NCC;4. Finders of lost article after lapse of six (6) months; Art.

719, NCC;5. Acquisitive prescription; Art. 1132, NCC (good faith – 4

years; bad faith – 8 years).

UNLAWFULLY DEPRIVED

EDCA Publishing vs. Santos, 184 SCRA 614FACTS: On October 5, 1981, a person identifying himself asProf. Jose Cruz of De la Salle College placed an order viatelephone for 406 pcs of books with EDCA Publishing payable ondelivery (COD). EDCA prepared the corresponding invoice anddelivered the books as ordered, for which Cruz issued a personalcheck covering the purchase price of P8,995.65. On October 7,1981, Cruz sold 120 pcs of the books to Leonor Santos who,after verifying the seller’s ownership from the invoice Cruzshowed her, paid him P1,700.00.

Meanwhile, EDCA having become suspicious over a secondorder placed by Cruz even before clearing of his first check,made inquiries with Della Sale College where he had claimed tobe dean and was informed that there was no such person in itsemploy. Further verification revealed that Cruz had no moreaccount or deposit with the Philippine Amanah Bank, againstwhich he had drawn the payment check. EDCA then went to thepolice, which set a trap and arrested Cruz on October 7, 1981.

On the night of the same date, EDCA sought the assistanceof the police which forced their way into the store of Santos andthreatened her with prosecution for buying stolen property. Theyseized the 120 books without warrant, loading them in a vanbelonging to EDCA, and thereafter, turned them over to EDCA.

Santos sued for the recovery of the books. EDCA contendedthat it can recover the books from Santos considering that EDCAwas unlawfully deprived thereof since the check issued by theimpostor was dishonored thus, nullifying the contract of salebetween it and the impostor.

HELD: Art. 1477 of the Civil Code provides that the ownership of the thing sold shall be transferred to the vendee upon the actualor constructive delivery thereof. Art. 1478 also provides that the

parties may stipulate that ownership in the thing shall not pass tothe purchaser until he has fully paid the price.

It is clear from the above provisions, particularly Art. 1478that ownership in the thing sold shall not pass to the buyer untilfull payment of the purchase price only if there is a stipulation tothat effect. Otherwise, the rule is that such ownership shall passfrom the vendor to the vendee upon the actual or constructivedelivery of the thing sold even if the purchase price has not yetbeen paid. Non-payment creates a right to demand payment or to rescind the contract, or to criminal prosecution in the case of bouncing checks. But absent the stipulation above noted,delivery of the thing sold will effectively transfer ownership to thebuyer who can in turn transfer it to another.

In Tagactac vs. Jimenez , the plaintiff sold the car to Feist,who sold it to Sanchez, who sold it to Jimenez, when thepayment check issued to Tagactac by Feist was dishonored, theplaintiff sued to recover the vehicle from Jimenez on the groundthat she had been unlawfully deprived of it by reason of Feist’sdeception. In ruling for Jimenez, the Court of Appeals held:

“The point of inquiry is whether plaintiff-appellant Trinidad C.Tagactac has been unlawfully deprived of her car. At first blush,it would seem that she was unlawfully deprived thereof,considering that she was induced to part with it by reason of thechicanery practiced on her by Feist. Certainly, swindling, likerobbery, is an illegal method of deprivation of property. In a

manner of speaking, plaintiff-appellant was “illegally deprived” of her car, for the way by which Feist induced her to part with it isillegal and punishable by law. But does this “unlawfuldeprivation” come within the scope of Art. 559 of the New CivilCode?

The fraud and deceit practiced by Feist earmarks this saleas a voidable contract (Art 1390 NCC). Being a voidable contract,it is susceptible of either ratification or annulment. If the contractis ratified, the action to annul it is extinguished (Art 1392, NCC)and the contract is cleansed from all its defects (Art 1396, NCC);if the contract is annulled, the contracting parties are restored totheir respective situations before the contract and mutualrestitution follows as a consequence (Art 1398, NCC).

However, as long as no action is taken by the party entitled,either that of annulment or of ratification, the contract of saleremains valid and binding. When plaintiff-appellant Tagactacdelivered the car to Feist by virtue of said voidable contract of sale, the title to the car passed to Feist. Of course, the title thatFeist acquired was defective and voidable. Nevertheless, at thetime he sold the car to Felix Sanchez, his title thereto had notbeen avoided and he therefore conferred good title on the latter;provided he bought the car in good faith, for value and withoutnotice of the defect in Feist title (Art 1506, NCC)



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The above rulings are sound doctrine and reflect our owninterpretation of Art. 559 as applied to the case before us. Actualdelivery of the books having been made, Cruz acquiredownership over the books which he could then validly transfer tothe private respondents. The fact that he had not yet paid for them to EDCA was a matter between him and EDCA and did notimpair the title acquired by the private respondents to the books.

One may well imagine the adverse consequences if the

phrase “unlawfully deprived” were to be interpreted in the manner suggested by the petitioner. A person relying on the seller’s titlewho buys a movable property from him would have to surrender it to another person claiming to be the original owner who had notyet been paid the purchase price therefor. The buyer in thesecond sale would be left holding the bag, so to speak and wouldbe compelled to return the thing bought by him in good faithwithout even the right to reimbursement of the amount he hadpaid for it.

Aznar vs. Yapdiangco, 13 SCRA 486

FACTS: Santos agreed to sell his car to Marella for P14,700.00,the price to be paid after the car is registered in the name of

Marella. After the execution of the Deed of Sale, Santos together Marella proceeded to the Motor Vehicles Office where theregistration of the car in Marella’s name was effected. WhenSantos asked for payment, Marella told him that he was short of P2,000.00 and informed him that he would get from his sister.Together they rode in the car to the supposed residence of hissister. Upon entering the house, Marella told Santos to wait inthe sala while he asked his sister for the money.

In the meanwhile, on the pretext that Marella had to showhis sister of the registration papers of the car, Santos gave themto Marella, who thereupon entered the supposed room of hissister, ostensibly to show her the papers. That was the last timeSantos saw Marella and his car. In the meantime Marella

succeeded in selling the car to Aznar who bought the same ingood faith for P15,000.00. When Aznar was trying to register thecar at the Motor Vehicles Office, the same was seized from himby the Philippine Constabulary as a consequence of the reportmade to them by Santos.

The lower court decided in favor of Santos applying theprovisions of Art 559 and concluded that he was “unlawfullydeprived” of his property. On appeal, Aznar contended that Art.1506 of the Civil Code and not Art 559 is applicable. Art 1506provides:

“Art. 1506. Where the seller of goods has a voidable titlethereto, but his title has not been voided at the time of the

sale, the buyer acquired a good title to the goods, providedhe buys them in good faith, for value, and without notice of the seller’s defect or title.”

HELD: The contention is clearly unmeritorious. Under the afore-quoted provision, it is essential that the seller should have avoidable title at least. It is inapplicable where, as in this case, theseller had no title at all.

Marella did not have any title to the property under litigationbecause the same was never delivered to him. He soughtownership or acquisition of it by virtue of the contract. Marella

could have acquired ownership or title to the subject matter thereof only by the delivery or tradition of the car to him. The car in question was never delivered to the vendee by the vendor asto complete or consummate the transfer of ownership by virtue of the contract. It should be recalled that while there was indeed acontract of sale between Santos and Marella, the latter as thevendee, took possession of the subject matter thereof by stealingthe same while it was in the custody of the former’s son.

See: Cases

a. Del Rosario vs. Lucena, 8 Phil. 535 b. Varela vs. Finnick, 9 Phil 482 c. Arenas vs. Raymundo, 19 Phil 46 d. US vs. Sotelo, 28 Phil. 147

USUFRUCT IN GENERAL

Art. 562, Usufruct gives a right to enjoy the property of another with the obligation of preserving its forms andsubstance, unless the title constituting it or the lawotherwise provides.

CONCEPT: Usufruct – the right to enjoy the property of another,with the obligation of preserving its form and substance unlessthe title constituting it or the law provides otherwise.

Rights of Full Owner = DISPOSE + USE + FRUITS

FULL OWNERSHIP = Naked Ownership + Usufruct

Characteristics:

1. Real right;

2. Temporary in nature;

3. Purpose is to enjoy the benefits;

4. Obligation to conserve and preserve. - Natural(Ordinarily present but may be eliminated byagreement) and Accidental (may or may not bepresent depending upon the stipulation of the parties)

USUFRUCT, how created:

a. By law; (see Art. 225/226 of the Family Code, in re: Art.321 of the Civil Code.)

Note: The property of an emancipated child is ownedexclusively by the child and shall be devoted solely for his support and education. As to the fruits or income of the property, the rights of the parents over the sameshall be limited only to the child’s support and collective

daily needs of the family.b. By contract or agreement;

c. By last will and testament.

Rules governing usufruct:

a. Agreement; (or the title giving the usufruct)b. Civil Code.

Essential (Usufruct

cannot exist

without these)



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RIGHTS OF THE USUFRUCTUARY

FIRST. The usufructuary shall be entitled to all the natural,industrial and civil fruits of the property in usufruct. With respectto hidden treasure which may be found on the land or tenement,he shall be considered a stranger. (See: Art. 566)

Rules:

1. Pending natural or industrial fruits: growing at the time

the usufruct begins belongs to the usufructuary;

Here, the usufructuary has no obligation to refund for theexpenses but without prejudice to the right of third persons.(Thus, if the fruits had been planted by a possessor in good faith,the pending crop expenses and charges shall be pro-ratedbetween said possessor and the usufructuary) see: Art. 545,NCC;

- those growing at the time the usufruct terminates, belong tothe naked owner. (See: Art. 567, NCC)

Here, the naked owner is obligated to reimburse the expensesincurred for the ordinary cultivation and seeds and other similar

expenses from the proceeds of the fruits. (Hence, the excess of expenses over the proceeds need not be reimbursed.)

2. Civil Fruits: (Rents, pensions, benefits, etc.) see: Art. 570,NCC.

Rule: They shall be deemed to accrue proportionately to thenaked owner and usufructuary for the time the usufructlasts.

Example: A gave B in usufruct the profits of a certain building for five (5) years.

a. If the usufruct lasts for the period stipulated, all the profitsduring the said period will go to B.

b. Suppose however, B died at the end of three (3) years,and the following were the profits from the building:

Yr. 1 - P10,000.00

Yr. 2 - P20,000.00

Yr. 3 - P30,000.00*

Yr. 4 - P20,000.00

Yr. 5 - P40,000.00

P120,000.00

Ratio is 3:2, thus: 3(P120,000.00)/5 = P72,000.00 – share of B;2(P120,000.00)/5 = P48,000.00 – share of A.

QUESTION: What is the nature of dividends? Who shall beentitled to them?

In Bachrach vs. Siefert, 87 Phil 483, dividends from shares in acorporation are civil fruits whether in the form of cash or stockdividends. They are not part of the capital, hence, they belong tothe usufructuary.

QUESTION: Are usufructuary rights exempt from execution?

In Vda. De Bogacki vs. Inserto, 111 SCRA 356 , usufructuaryrights can be disposed of by the usufructuary, thus, he can

transfer, assign, or alienate such rights. In the same vein, theserights may be subjected to a writ of execution, not being exempttherefrom.

SECOND. The usufructuary has the right to the enjoyment of:

a. Accessions (whether artificial or natural);

b. Servitudes and easements;

c. All benefits inherent in property (i.e.: the right to hunt

and fish therein, the right to construct rain water receptacles) see: Art. 571, NCC;

THIRD. The usufructuary, in addition to the usufruct (as a right)may: (see: Art. 572)

a. Enjoy the thing itself or thru another;

b. Lease the thing to another (for a period not longer thanthat of the usufruct) even without the naked owner’sconsent;

c. Alienate, sell, donate, bequeath, or devise, sell or pledge the usufructuary right (not the thing itself or future crops, for crops pending at the termination of theusufruct belong to the naked owner.)

FOURTH. The usufructruary has the right to MAKE USE of things included in usufruct which gradually deteriorate withoutbeing consumed, through wear and tear, in accordance with thepurpose for which they were intended. (a.k.a. AbnormalUsufruct) see: Art. 573.

Examples: clothes, furniture, vehicles, books, etc.

Effect of the deterioration:

a. Because of normal use – the usufructuary is not liable. Hecan return them in the conditions they might be in at thetermination of the usufruct. There is no necessity for him tomake any repairs to restore them to their former condition.

Although there is no express provision on the matter, if theusufructuary does not return the things upon the expirationof the usufruct, he shall pay an indemnity for the value of thething at the time such expiration.

b. Because of fortuitous event - usufructuary is obliged tomake the necessary and ordinary repairs (see art. 592). Butthe mere deterioration thru normal use does not require theordinary repairs referred to under art. 592.

c. Because of fraud - the usufructuary is responsible. Butsuch liability make be set off against improvements. (see:

Art. 580);

FIFTH. The usufructuary has the right to MAKE USE of

consumable things in usufruct. (a.k.a. quasi-usufruct, see art.574)

Note: (the principle of creditor-debtor relationship applies) Here,the usufructuary becomes the owner of the things (consumable)in usufruct, such as a sum of money or a quantity of liquid of grain but he has the obligation to pay for their current price or return the things of the same quantity and quality at the timethe usufruct ceases.

SIXTH. The usufructuary of fruit-bearing trees and shrubs hasthe right to make use of the dead trunks, and even of those cut



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off or uprooted by accident. (a.k.a. special usufruct) see: Art.575.

Note: here, the usufructuary is obliged to replace with new plants.

SEVENTH. The usufructuary has the right to make:

a. Useful improvements;

b. Luxurious improvements for mere pleasure.

However:

1. He must not alter the form or substance of the properlyheld in usufruct, unless the naked owner consents;

2. He is not entitled to a refund but either remove theimprovement if no substantial damage to the propertyis caused (see Art 579); or to set off (compensate) theimprovements against damages for which he may beliable (see: Art. 580). His right does not involve anobligation, hence, if the usufructuary does not wish toexercise it, he cannot be compelled by the nakedowner to remove his improvements. The option toremove is granted to the usufructuary.

Rule in case of set off: (see. Art. 580)

a. If damage is greater than the improvement -usufructuary is liable for the excess;

b. If improvement is greater than the damage - the nakedowner is not liable to refund the excess.

Rule: If a co-owner of a property gives the usufruct of his shareto another (see. Art. 582) the usufructuary takes the co-owner’splace as to:

a. Administration or management;

b. Collection of fruits or interest (but not as to alienation,disposition, or creation of any real right over theproperty, since these are strict acts of ownership,unless authorized by the naked owner.)

Effect of Partition: The usufructuary continues to have theusufruct of the part allotted to the co-owner concerned.

Note: the co-owner may partition the property even without theconsent of the usufructuary and the partition is binding upon theusufructuary. However, the naked owner (co-owner) mustrespect the usufructuary.

OBLIGATIONS OF THE USUFRUCTUARY

The usufructuary has obligations:

a. Before the usufruct;b. During the usufruct; andc. After the usufruct.

Art. 583:

GENERAL RULE: The usufructuary BEFORE entering upon theenjoyment of the property is OBLIGED:

1. To make after notice to the owner an INVENTORY of all property which shall contain appraisal of the

movables and description of the condition of theimmovables;

2. To give SECURITY, binding himself to fulfill theobligations imposed upon him.

Note: The obligation to make inventory and to give security arenot necessary in order for the right to the usufruct begins but aremerely required before physical possession and enjoyment

of the property can be had.EXCEPTION: Inventory is not required when:

1. No one will be injured thereby (as in the case of usufruct over a periodical pension or incorporeal right(see: Art. 570), provided the naked owner consents for the law says “may” (see: Art. 585);

2. In case of waiver by the naked owner; or when there isstipulation (in a will or contract).

Security is not required when:

1. No one will be injured thereby (as in the case of usufruct over a periodical pension or incorporeal right

(see: Art. 570), provided the naked owner consents for the law says “may” (see : Art. 585);

2. In case of waiver by the naked owner; or when there isstipulation (in a will or contract).

3. When the usufructuary is the donor of the property(who has reserved the usufruct). (The naked owner should be grateful enough not to require the security.);

4. In cases of caucion juratoria (promise under oath), see: Art. 587.

CAUTION JURATORIA

Art. 587. Caucion Juratoria – a sworn duty to take good careof the property and return the same at the end of theusufruct.

If a usufruct consists in:

1. Furnitures necessary for the use of the usufructuary;

2. House which his family may live;

3. Tools and implements and other movables necessaryfor an industry or vocation which the usufructuary isengaged, and the usufructuary cannot afford to givethe required security, he may file a petition before thecourts to allow him to enjoy possession of the saidproperties in usufruct and swear under oath to take

good care and return them at the end of the usufruct.

RULE ON ORDINARY REPAIRS

Under Art. 592, the usufructuary is obliged to make the ordinaryrepairs needed by the thing given in usufruct.

Note: These are repairs needed because of an event or an actthat endangers the preservation of the thing. (as distinguishedfrom deterioration under Art. 572).



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Conditions for liability:

1. They are required by normal or natural use;2. They are needed for preservation;3. They must have occurred during the usufruct;4. They must have happened with our without the fault of

the usufructuary;

Note: If the naked owner had demanded the repair, and the

usufructuary still fails to do so, the owner may make thempersonally or thru another at the expense of the usufructuary.

RULE ON EXTRA-ORDINARY REPAIRS

Art. 593. Extraordinary repairs shall be at the expense of theowner. The usufructuary is obliged to notify the owner whenthe need for such repairs is urgent.

Rules governing the payment of debts of the naked owner if the usufruct is a universal one (constituted on the whole of apatrimony; and the naked owner has debts or is obliged to makeperiodical payments.

§ If there is stipulation to pay the debts of the naked owner,apply Art. 758 :

a. Pay only for prior debts and not for debts contractedafter the usufruct has been made, unless there is adeclaration to the contrary;

b. Pay only for debts up to the value of the property inusufruct unless, the contrary is intended.

§ If there is no stipulation to pay the debts of the nakedowner, apply Art. 759:

a. As a rule, there is no obligation to pay;

b. The only exception is that when the usufruct was

constituted in fraud of creditors.“In fraud of creditor ” – when at the time of the constitution of theusufruct, the naked owner did not reserve sufficient property topay his debts. This is presumed.

QUESTION: May usufruct be constituted over a real property infavor of an alien?

In Ramirez vs. Vda. De Ramirez, 111 SCRA 704, a usufructover parcels of land made by a Filipino in favor of an Austrianwoman is valid because ownership of the land is not vested inthe usufructuary. What is proscribed by the Constitution isownership by an alien.

EASEMENTS OR SERVITUDES

Easement is an encumbrance imposed upon an immovable for the benefit of:

a. Community;

b. One or more persons;

c. Another immovable belonging to a different owner (see Art. 614) = real easement.

Immovable, meaning of the term “immovable” must be construedin its common and not legal sense. Hence it refers toimmovables by nature, such as lands, roads and buildings.

Servient estate - is one which is burdened by a servitude;

Dominant estate - is one that is benefited as a result of aneasement.

In Quimen vs. CA, 257 SCRA 163, an easement is a real right

on another’s property, corporeal and immovable for the benefit of another immovable, whereby the owner of the latter must refrainfrom doing or allow somebody else to do or something to bedone on his property, for the benefit of another person or tenement. It is inseparable, indivisible and perpetual, unlessextinguished by causes provided by law.

Characteristics of easement:

1. It is a real right;

2. Imposable only against another’s property and never inone’s own property; it can exist only when the servientestate and the dominant estate belong to two differentowners;

3. It is a form of limitation on ownership and a restrictionon the enjoyment of one’s own property;

4. It is inseparable and indivisible; it cannot be separatedfrom the tenement to which it belongs or divided even if there is division of the tenement; (see Arts. 617 & 618)

5. It is intransmissible (unless the tenement affected isalso transmitted or alienated;

6. It is perpetual unless extinguished.

Inseparability – easements or servitudes are merelyaccessories to the tenements to which they are appurtenant.They are inseparable, hence, intransmissible. They cannot bealienated separately from the tenements to which they pertain.

Thus, they cannot be alienated independently of the real propertyto which they are attached.

In Valisno vs. Adriano, 161 SCRA 398 , the alienation of tenements carries with it the alienation of the servitudespertaining to them.

Indivisibility – Both dominant and servient estate may bedivided between two or more persons. But the partition will notmodify the easement. Each of the servient owners shall bear theburden of the easement on the part corresponding to his share inthe immovable property.

Easements may also be:

1. According to the MANNER they are exercised or used:a. CONTINUOUS easements - are those the use of

which is or may be INCESSANT (without anyinterruption) or without the intervention of any act of man;

Note: Here, for easement to be “continuous” the usedoes not have to be without interruption; it is enoughthat it MAY BE incessant;

Note: The distinction between continuous anddiscontinuous easements refers only to the exercise of

personal easement



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the servitude, but not to the essence, because theservitude exists continuously, whether it is being usedor not.

Examples:

Easements of drainage - the fact that water flows in itsignifies continuous use but the absence of any flowdoes not make it non-continuous. It is enough that the

flow of water may be without interruption;Easements of aqueduct - it is considered ascontinuous (at least, for purposes of prescription) eventhough the flow of water may not be continuous, or itsused depends upon the needs of the dominant estate,or upon a schedule or alternate days or hours.

b. DISCONTINUOUS Easements - they are used atintervals and depend upon the acts of man.

Example: Easement of right of way because it can beexercised only if a man passes or puts his feet over somebody else’s land.

2. According to whether or not their EXISTENCE isindicated:

a. APPARENT Easement - those made known andcontinually kept in view by external signs that revealthe use and enjoyment of the same.

Note: The sign need not be seen but should besusceptible of being seen.

Examples: Dam; Window in a party wall visible to bothowners; Right of way if there is an alley or a permanentpath.

b. NON-APPARENT Easements - they show no externalindication of their existence.

Examples: (in general, negative easements) Easementof not building to a more than certain height; A right of way if there is no visible path or alley.

3. According to PURPOSE of the easement or nature of the limitation :

a. POSITIVE Easement - Here, the owner of the servientestate is OBLIGED: (a.k.a servitude of sufferance) (a)to allow something to be done on his property; or (b) todo something himself on his property.

Example:

üEasement of light and view on openings made ona PARTY WALL.

If one opens a window on a party wall the other owner may close it anytime. However, if he does not close it,and the other owner acquires the easement byprescription, the other owner can no longer close it.Therefore the owner of the servient estate is allowingsomething to be done on his property.

Note: Easement of light and view on a party wall.Here, the owners of such wall permit the encumbranceto burden their common wall.

ü The owner of the servient estate has the duty tocut off the branches of his tree extending over theneighboring estate.

b. NEGATIVE Easements - Here, the owner of theservient estate is prohibited to do something which hecould lawfully do were it not for the existence of theeasement. (a.k.a. servitude of limitation)

Example:ü Easement of light and view on openings made on

one’s OWN WALL.

When a person makes an opening on his own wall toadmit light below the ceiling joist, and he acquires aservitude to admit such light, the servitude is a negativeone, because: It imposes upon the owner of theadjacent tenement the obligation not to construct on hisown land in such a manner as to obstruct the light.

How are easements established?

Art. 619. Easements are established either by law (legal

easements) or by the will of the owners (voluntaryeasements).

Modes of acquiring easements:

Art. 620. Continuous and apparent easements are acquiredeither by virtue of a title or by prescription of ten years.

a. Continuous and apparent easements (meaning theyare continuous and apparent at the same time) may beacquired by :

¬ Title (Any kind of juridical act or law sufficient tocreate the encumbrance i.e.: contract, donation,testamentary succession.)

¬Prescription (10 years whether in good faith or in badfaith). Note: see Art. 1115 - general rules onprescription are not applicable in cases of prescription provided for by special or particular provisions.

b. Discontinuous and apparent - only by title;

c. Continuous and apparent - only by title;

d. Discontinuous and non-apparent - only by title.

Rule (Art. 621) in order that continuous and apparent easements may be acquired thru prescription:

a. If easement is POSITIVE:

¬ The period of prescription is counted from the day of the dominant estate began to exercise it:

Example: A and B are neighbors and they own a partywall. If A makes an opening or window in the party wallin 1988, B can close it anytime before 1998. Becauseif by the time the window is still open, A has alreadyacquired the easement of light and view by prescriptionof 10 years, counted from the opening of the window.

Note: A window on a party wall is something allowed bya co-owner to be done on his own property and may



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therefore give rise to a positive easement of sufferance.

b. If the easement is NEGATIVE:

¬ The period is counted from the date of NOTARIALPROHIBITION made upon the servient estate.

Example: “A” and “B” are neighbors. On his building'swall, “A” opened a window beneath the ceiling joist to

admit light, in 1978. Even after ten years (1988), “B”may still obstruct the light by constructing on his ownlot a building higher than “A's” unless “A” makes anotarial prohibition prohibiting “B” from making theobstruction.

QUESTION: If in 1984, “A” makes a prohibition, may “B” stillmake the obstruction?

A: Yes, because, it is only in 1994 (ten years after the notarialprohibition) when “A” may be said to have acquired the negativeeasement of light and view. After 1994, “B” may no longer obstruct.

APPARENT SIGN OF EASEMENT

Art.624. The existence of an apparent sign of easementbetween two estates, established or maintained by theowner or both, shall be considered, should either of them bealienated, as a title in order that the easement may continueactively or passively, unless at the time the ownership of thetwo estates is divided, the contrary should be provided inthe title of the conveyance of either of them, or the signaforesaid should be removed before the execution of thedeed . This provision shall also apply in case of the divisionof a thing owned in common by two or more persons.

Note: Article refers not to an existing sign but a sign of anexisting easement. It is the servitude between the two tenementswhich must exist and not the sign thereof.

Rights of the dominant estate:

¬ To exercise the easement and all necessary rights for its useincluding accessory easement (Art. 625);

¬ To make on the servient estate all works necessary for the useand preservation of the servitude, BUT:

1. This must be at his own expense;2. He must NOTIFY the servient owner;3. Select convenient time and manner;

4. He must not alter the easement nor render it moreburdensome.

¬ To ask for a MANDATORY INJUNCTION to preventimpairment or obstruction in the exercise of the easement aswhen the owner of the servient estate obstructs the right of way, building a wall or fence (see: Resolme vs. Lazo, 27 Phil 416 );

¬ To RENOUNCE totally (for an easement is indivisible) if hedesires exemption from the contribution to expenses (Art.628);

Obligations of the dominant estate:

¬ He cannot alter the easement (Art. 627);

¬ He cannot make it more burdensome (Art. 627);

ü Thus he cannot use the easement except for movableoriginally contemplated;

ü In the easement of right of way, he cannot increase the

agreed width of the path, nor deposit soil or materialsoutside the boundaries agreed upon (for the acts would beincreasing the burden). But he may allow others to use thepath (this really does not increase the burden) except if thecontrary has been stipulated. (see: Valderama vs. NorthNegros Sugar Co., 48 Phil 492 )

ü If there be several dominant estates each must contributeto necessary repairs and expenses in proportion to thebenefits received by each estate (and not in proportion tothe value of each estate). In the absence of proof, thebenefits are presumed to be equal.

Rights of the servient estate:

¬ To retain ownership and possession of the portion of his landaffected by the easement (Art. 630) even if indemnity for theright is given (as in the case of easement of right of way) (Art.649), unless the contrary has been stipulated;

¬ To make use of the easement, unless deprived by stipulationprovided that the exercise of the easement is not adverselyaffected (Art. 630), and provided further that he contributes tothe expenses in proportion to the benefits received, unlessthere is a contrary stipulation (Art. 628, par. 2);

¬ To change the location of a very inconvenient easementprovided that an equally convenient substitute is made, withoutinjury to the dominant estate. (Art. 629, part. 2)

Obligations of the servient estate:

¬ He cannot impair the use of the easement (Art. 629, par. 1)

¬ He must contribute to the expenses in case he uses theeasement, unless there is a contrary stipulation. (Art. 628, par.2);

¬ In case of impairment, to restore conditions to the status quoat his expense plus damages. (In case of obstruction, aswhen he fences the original right of way, and offers aninconvenient substitute way, which is farther and requiresturning at a sharp angle, he may be restrained by injunction.)See; Resolme vs. Lazo, 27 Phil. 416 ;

¬ To pay for the expenses incurred for the change of location or from of the easement (in the proper case). See: Art. 629, par.2

MODES OF EXTINGUISHMENT OF EASEMENTS

Art. 631. Easements are extinguished:

1. By MERGER:

¬ The merger must be absolute (without any condition),complete (not partial) and not temporary. Thus, if the



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owner of the servient buys the whole portion affected, themerger is complete, and the easement is extinguished.But if the portion bought is not the portion affected, theeasement naturally remains.

Examples:

ü Temporary merger :

Q: The dominant owner sold a retro his estate to B, the

servient owner. Is the easement extinguished?

A: No, it is only suspended for the merger is onlytemporary. It is revived when the property isredeemed.

ü Conditional merger : The dominant estate wasdonated to the servient estate, but it was stipulated thatif the servient owner later marries X, the propertyreverts to the dominant owner. Pending the resolutorycondition, the merger is considered temporary, and theeasement is merely suspended. When the servientowner marries X, the easement is revived. If nomarriage takes place (as when X dies) the easement

really is extinguished.

2. By NON-USER for 10 years:

¬ Non-user refers to an easement that has once been usedbecause one cannot discontinue using what one never used.

¬ Non-user means voluntary abstention and not due tofortuitous event, because the basis of this cause ispresumptive renunciation.

Note: From what time to compute?

a. Discontinuous - (like right of way) from the time itceased to be used.

b. Continuous - (like aqueduct) from the day on which anact contrary to the same took place. Thus the erectionof works incompatible with the exercise of theeasement or totally obstructing the servitude, agreed toby the owner of the dominant estate, amounts to a tacitrenunciation and extinguishes the servitude. (see:Ongsiako vs. Ongsiako, 3-30-57 )

3. By IMPOSSIBILITY OF USE or BAD CONDITION of thetenement:

¬ The impossibility of using the easement, which arisesfrom the condition of the tenements, only suspends the

servitude, until such time when it can be used again. Anexample of this would be the flooding of the servienttenement over which a right of way exists. Unless,extinguishment is caused by the necessary period for non-user.

4. By EXPIRATION of the term or FULFILLMENT of thecondition:

¬ Example: An easement was agreed upon to last till theowner of the dominant estate becomes a lawyer. Whenthe condition is fulfilled the easement is extinguished.

5. WAIVER or RENUNCIATION of the dominant estate:

¬ As a general rule, the renunciation must be express, clear and specific (otherwise it may be confused with none-user). However, it may be tacit for as long as there areacts which clearly reveal it beyond doubt.

6. REDEMPTION agreed upon:

¬ This is voluntary redemption, existing because of a

stipulation. Stipulations may provide conditions under which the easement would be extinguished.

7. OTHER causes:

a. Expropriation of the servient estate;

b. Annulment, recession or cancellation of the title thatconstituted the easement;

c. Abandonment of the servient estate;

d. Resolution of the right of the granter to create theeasement (as when there is redemption of the propertysold a retro because of the exercise of the right of

conventional redemption);

LEGAL EASEMENTS

Art. 634. Easements imposed by law have for their objecteither public use or the interest of private persons.

Legal easements - those imposed by law and which have for their object either:

a. Public use - governed by special laws (i.e. Law onWaters; Irrigation Law; Water Code);

b. The interest of private persons - governed by theprovisions of the Civil Code; agreement between theparties; general or local laws.

Different kinds of legal easements:

1. Easement relating to:

¬ waters - natural drainage of lands (Art. 637); naturaldrainage of buildings (Art. 674); easement on riparianbanks for navigation;

¬ floatage and salvage (Art. 638) - easement of a dam(Arts. 639, 647); easement for drawing water or for watering animals (Arts. 640-641); easement of aqueduct(Arts. 643-646); easement for the construction of a stoplock or sluice gate.

2. Right of way;

3. Party wall;

4. Light and view;

5. Drainage;

6. Intermediate distance;

7. Easement against nuisance;

8. Lateral and subjacent support.



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EASEMENT OF RIGHT OF WAY

Art. 649. Easement of right of way.

Definition: the easement or privilege by which one person or aparticular class of persons is allowed to pass over another's land,usually through one particular path or line. The term right of way may either refer to the easement itself or the strip of land

over which passage can be done.

Requisites:

a. The property is surrounded by the estates of others;

b. There is no adequate outlet to a public highway. (If outlet isthru the water, like a river or sea, under Spanish law, theeasement cannot be demanded for there exists an adequateoutlet; it is believed that in Philippines, a distinction must bemade, depending on danger, convenience and cost.);

c. There must be payment of proper indemnity, (but later on,the amount may be refunded when easement ends, see:

Art. 655);

d. It must be established at a point least prejudicial to theservient estate. (This is generally but not necessarily theshortest distance);

e. The isolation must not be due to the proprietor's own acts(as when he has built enclosing walls, see : Art. 649);

f. Demandable only by the owner or one with a real right like ausufructuary. (The lessee should ask the lessor to demandthe easement from adjoining estates.)

Note: The onus or the burden of proof is upon the owner of thedominant estate to show the specific averments in his complaintthe existence of the requisites or preconditions enumerated.

QUESTION: Can there be judicial easement?

In La Vista Association vs. CA, 278 SCRA 498 , when the courtsays that an easement exists, it is not creating one. For even aninjunction cannot be used to create one as there is no such thingas judicial easement. The court merely declares the existence of an easement created by the parties.

NUISANCE

Why is nuisance a modification of ownership?

Because if one’s property becomes a nuisance, he can be

deprived of its enjoyment and even be deprived of its ownership.So, if a house is about to collapse and may cause injury toothers, the owner can be compelled to demolish the house.

NUISANCE, defined:

Art. 694 provides: A nuisance is any act, omission,establishment, condition of property, or anything else which:

1. Injures or endangers the health or safety of the others.(ex: House in danger of falling; explosive factory in aresidential area.

2. Annoys or offends the senses. (ex: Too much noise or horn blowing; a chimney which renders a houseuninhabitable due to excessive smoke)

3. Shocks, defies or disregards decency or morality. (ex:Public exhibition of a naked person; strip-teasing;public display of nude posters.)

Note: The standard of morality changes. So that what

was immoral 20 years ago may not be immoral today.The third instance then depends on time, place andstandard of morality of countries and people.

4. Obstructs or interferes with the free passage of anypublic highway or streets, or any body of water. (ex:houses erected on public streets)

5. Hinders or impairs the use of property. (ex: Illegalconstructions on another’s land)

What are the different kinds of nuisance?

1. Public or private nuisance (Art. 695):

¬ Public nuisance – the doing of or the failure to do

something that injuriously affects safety, health or morals of the public, or works some substantialannoyance, inconvenience or injury to the public. Itaffects a community or neighborhood or anyconsiderable number of person although the extentof the annoyance, danger or damage uponindividuals may be unequal.

¬ Private nuisance – One which violates only privaterights and produces damage to but one or fewpersons and cannot be said to be public.

2. Nuisance per se or nuisance per accidens:

¬ Nuisance per se – a nuisance at all times and under

all circumstances or conditions.

¬ Nuisance per accidens - a nuisance only under certain circumstances or conditions.

3. Attractive nuisance – This is any contrivance which isvery attractive to children but very dangerous to them.

REMINDER:

• An attractive nuisance is not illegal. It may be legal or legitimate thing but because of its nature, it can easily injurechildren, that is why it is called attractive nuisance.Example: firearms.

•

If one is an owner of an attractive nuisance, he is required toexercise the highest degree of diligence to prevent it frombeing played by children.

Hidalgo Enterprises vs. Balandan 91 Phil. 488

FACTS: A certain ice-plant factory maintained two big tanks fullof water in a place where children pass by. A boy 8 years of agepassed by and entered the premises of the factory and took abath in one of the tanks. While swimming, the boy drowned anddied. The parents of the boy filed an action for damages againstthe factory alleging that the tank full of water was an attractive



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nuisance and yet the factory did not provide any precaution toavoid injury.

The following issues were raised:

1. Whether or not water can be considered an attractivenuisance.

The SC held that water in any form is not an attractivenuisance. Nature in itself has created streams, lakes,

and pools which attract children. Lurking in their waters is always the danger of drowning. Against thisdanger, children are to know the danger.

2. Whether on not the tank full of water is an attractivenuisance?

It is neither an attractive nuisance. Any imitation of nature, like a swimming pool, is not an attractivenuisance. So, if the owner of a private property createsan artificial pool on his own property, merely duplicatingthe work of nature without adding any new danger, heis not liable.

Who can be liable for damages for the nuisance cause? The owner or possessor who originally caused the nuisance andthe subsequent owner or possessor of the property are jointlyand severally liable. (Art. 696: Every successive owner or possessor of property who fails or refuses to abate a nuisance inthat property started by a former owner or possessor is liabletherefore in the same manner as the one who created it.)

Who are liable?

In general:

a. One who creates;b. All who participates;c. One who adopts;

d. One who continues a previously existing nuisance;e. One who refuses to abate nuisance.

If a property which has already caused nuisance is removed,is it a defense?

A: Art. 697: NO, the abatement of a nuisance does not precludethe right of any person injured to recover damages for its pastexistence.

May an action for abatement of a nuisance prescribe?

A: NO, an action for abatement of a nuisance is one which isimprescriptible. A nuisance can be abated anytime. Art. 698:Lapse of time cannot be legalize any nuisance whether public or

private. Art. 1143, 2nd par, an action to abate a public or privatenuisance is not extinguished by prescription:

What are the remedies against a nuisance?

A: It depends on whether it is a public or private nuisance.

¬ If it is a PUBLIC NUISANCE, there are 3 possibleremedies:

a. CRIMINAL PROSECUTION under the Penal Code or any local ordinance [Note: This remedy is instituted bypublic officers (ordinarily the mayor)];

b. CIVIL ACTION;

c. EXTRA-JUDICIAL ABATEMENT (abatement, without judicial proceedings. (Art. 699);

Note: Remedy (b) and (c) above may be brought byany private individual if the nuisance is specially injurious tohimself.

¬ If it is a PRIVATE NUISANCE, there are 2 possible

remedies:

a. Civil action; or

b. Abatement, without judicial proceedings (Art. 705)

QUESTION: What are the requisites for the abatement of nuisance, whether public or private, without judicial proceedings?(Art. 703 and 704)

ANSWER:

a. There must be showing that the nuisance is speciallyinjurious to the person seeking the abatement of nuisance; (Art. 703)

b. That demand be first made upon the owner or possessor of the property to abate the nuisance;

c. That such demand has been rejected or ignored;

d. That the abatement must be approved by the CityEngineer in Manila and other chartered cities, and inthe provinces, by the Provincial Health Officer andexecuted with the assistance of or attended by amember of the local police force;

e. That the abatement must be done in such a way that itdoes not breach public peace, or do unnecessaryinjury;

f. That the value of the thing to be abated does not

exceed P3,000.Note:

¬ Criminal prosecution is not mentioned. However, if a crimehas been committed as defined in the Revised Penal Code,criminal prosecution can proceed.

¬ If the nuisance to be abated is more than P3,000.00 itcannot be abated without judicial proceedings. It can beabated only through a criminal or civil action in court as thecase may be.

When may a private person or a public officer extra judicially abating a nuisance be liable for damages?

Art. 707:1. If he causes unnecessary injury; or 2. If an alleged nuisance is later declared by the courts to

be not a real nuisance.

Cases:

a. Pp vs. de Guzman, et. al., 90 Phil. 132 b. Espiritu vs. Municipal Council, 102 Phil 867 c. Iloilo Cold Storage vs. Mun. Council, 24 Phil. 471d. Canlas vs. de Aquino, 2 SCRA 814e. San Rafael vs. City of Manila, 46 SCRA 40



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f. Velasco vs. Manila Electric, 40 SCRA 342 g. Ramcar vs. Millar, 6 SCRA 517

DIFFERENT MODES OF ACQUIRING OWNERSHIP

Modes of acquiring ownership:

a. ORIGINAL MODE: (Ownership is acquired for the first time)

1. Occupation (hunting, fishing, hidden treasure);

2. Intellectual Creation (books, copy rights, patents,letters);

b. DERIVATIVE MODE: (There is merely a transfer of ownership; somebody else was the owner before)

3. Succession;

4. Donation;

5. Prescription (Art. 1106);

6. Law (Arts. 158, 445, 461, 465, 466, 681, 1434, 1456 –NCC);

7. Tradition (meaning: legal delivery actual/constructive)as a consequence of certain contracts (i.e.: sale,barter, assignment, simple loan or mutuum)

MODE - the process of acquiring or transferring ownership.

TITLE - that which is not ordinarily sufficient to conveyownership, but which gives a juridical justification for a mode; thatis, it provides the cause for the acquisition of ownership.

Example: If “A” sells to “B” a specific car for a specific amount,the sale is the title; by virtue of such title, “A” should now deliver the property to “B”. It is the delivery or tradition that makes “B”the owner; it is the tradition that is the mode.

OCCUPATION

Art. 713. Occupation is the acquisition of ownership bySEIZING corporeal things that have no owner, made with theintention of acquiring them, and accomplished according tolegal rules.

Occupation distinguished from possession:

¬ Occupation can take place only with respect to propertywithout an owner; while possession can refer to all kinds of property whether with or without an ownership.

¬

Occupation, in itself when proper confers ownership; butpossession does not by itself give rise to ownership.

Requisites for occupation:

1. There must be a seizure of apprehension (note: thematerial holding is not required as long as there is rightof disposition);

2. The property seized must be corporeal (personal)property;

3. The property seized must be susceptible of appropriation (either unowned or abandoned property);

4. There must be intent to appropriate;

5. The requisites or conditions of the law must becomplied with (i.e.: good faith; proper title; legal periodof time).

Art. 714. The ownership of a piece of land cannot be

acquired by occupation.

Reasons: Because a land that is not shown to belong to anyoneis presumed to be a public land;

- Occupation as a mode of acquiring ownership refers tomovables which are either considered as res nullius or resderelicta.

INTELLECTUAL CREATION

Intellectual Creation is the product of mental labor embodied inwriting or some other material form.

Art. 721. By intellectual creation, the following persons

acquire ownership:¬ The author with regard to his literary, dramatic, historical,

legal, philosophical, scientific or other work.

¬ The composer, as to his musical composition.

¬ The painter, sculptor, or other artist, with respect to theproduct of his art.

¬ The scientist or technologist or any other person with regardto his discovery or invention.

Art 722.

¬ Ownership before publication – exclusive;

¬Ownership after publication – no more exclusive rightexcept when work is copyrighted.

Note: Mere circulation among close friends and associateshowever, is not considered publication.

Art. 723. Letters and other communications in writing areowned by the person to whom they are addressed anddelivered, but they cannot be published or disseminatedwithout the consent of the writer or his heirs. However thecourt may authorize their publication or dissemination if thepublic good or the interest of justice so requires.

Rules:

•

The physical or material object is owned by the person towhom it has been sent.

• The thoughts, ideas and form of expression contained in theletter belong to the sender or author of the letter.

• The recipient cannot publish or disseminate the letter, unless:

a. The writer or the writer’s heirs consent;

b. The public good or the interest of justice so requires aswhen the:



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• The publication is necessary for the vindication of thecharacter of the person to whom the letter is addressed.

• The letter is produced as evidence in court, in the course of the administration of justice, except when the letter constitutesa privilege communication and cannot be admitted in evidencewithout the consent of the writer.

COPYRIGHT

Nature of Copyright:

¬ It is the exclusive right secured by law to an author or hisassigns to multiply and dispose of copies of an intellectual or artistic creation.

¬ It is a corporeal right to print and publish, and existindependent of the corporeal property out of which it arises.

The objectives of copyright are:

1. To encourage individuals to intellectual labor byassuring them of just rewards;

2. To secure the society of the largest benefit of their products.

Right of a copyright owner:

¬ To print, reprint, publish, copy, distribute, multiply, sell andmake photographic illustrations of the copyrighted work.

¬ To make translations or other versions or extracts or arrangements or adaptations thereof.

¬ To exhibit, perform, represent, produce or reproduce thecopyright work.

¬ To make any other use or disposition of the copyrighted work.

Extent of the protection:

•

Concepts, theories, speculations, abstracts of ideashowever original they may be are not covered by theprotection, because there is no monopoly of theories andspeculations of an author. He may transfer these theories of ideas into intellectual products as books, letters or any formof writing or illustration. These are exclusively his.

• But once caused to be published, his exclusive right over the same causes, except when copyrighted. But theprotection extends only in so far as the form, language or style of the production are concerned and not the theories or the ideas themselves. So that when one copies the form,style and language, there is infringement. It should be acopy of the original but similarity alone is not sufficient,

what is important though is the copy is so near to theoriginal as to give to every person seeing it the idea createdby the original.

Note: Copyright does not extend to the general concept or formatof a dating game show.

Francisco G. Joaquin & BJ Productions, Inc., vs. Hon.Franklin Drilon, et. al., [G.R. No. 108946, January 28, 1999]

FACTS: This is a prosecution for violation of PD 49 [Decree onIntellectual Property]. Joaquin and BJ Productions, Inc. holder of a Certificate of Copyright of a TV dating game show, “Rhoda

and Me”, claimed that IXL Productions & RPN Channel 9infringed upon their copyright by copying the format and stylethereof in its show, “It’s a Date”.

HELD: The Court, speaking thru Justice Mendoza, ruled that theformat of a show is not copyrightable. The format or mechanicsof a television show is not included in the list of protected worksin P.D. No. 49. For this reason, the protection afforded by thelaw cannot be extended to cover them.

Copyright, in the strict sense of the term, is purely astatutory right. It is a new or independent right granted by thestatute, and not simply a pre-existing right regulated by thestatute. Being a statutory grant, the rights are only such as thestatute confers, and may be obtained and enjoyed only withrespect to the subjects and by the persons, and on terms andconditions specified in the statute.

P.D. No. 49, in enumerating what subjects are subject tocopyright, refers to finished works and not to concepts. Thecopyright does not extend to an idea, procedure, process,system, method of operation, concept, principle, or discovery,regardless of the form in which it is described, explained,

illustrated, or embodied in such work. Thus, the newINTELLECTUAL PROPERTY CODE OF THE PHILIPPINESprovides:

SECTION 175. Unprotected Subject Matter. -Notwithstanding the provisions of Section 172 and 173, noprotection shall extend, under this law, to any idea,procedure, system, method or operation, concept, principlediscovery or mere data as such, even if they are expressed,explained, illustrated or embodied in a work; news of thedays and other miscellaneous facts having the character of mere items of press information; or any official text of alegislative, administrative or legal nature, as well as anyofficial translation thereof.

Cinematographic works and works produced by a processanalogous to cinematography or any process for making audio-visual recordings;

The copyright does not extend to the general concept or format of its dating game show. Accordingly, by the very natureof the subject of petitioner BJPI’s copyright, the investigatingprosecutor should have the opportunity to compare thevideotapes of the two shows.

Mere description by words of the general format of the twodating game shows in insufficient, the presentation of the master videotape in evidence was indispensable to the determination of the existence of probable cause. As aptly observed byrespondent Secretary of Justice: A television show includes morethan mere words can describe because it involves a wholespectrum of visuals and effects, video and audio, such that nosimilarity or dissimilarity may be found by merely describing thegeneral copyright/format of both dating game shows.

The requirement of originality: Originality does not meannovelty or ingenuity, neither uniqueness nor creativity. The lawdoes not impose such requirements. Originality simply meansthat the work “owes its origin to the author”. It means that the



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work is an independent creation of the author. [See: IPL byRanhilio C. Aquino, 2003 Ed.]

Requisites:

a. The work must originate from its author;

b. It must not be copied;

c. It must involve some intellectual effort.

Note:• Copyright extends to adaptations of the original work.

However, in regard to works that are adaptations, such asabridged works, digests, anthologies – There will still beoriginality sufficient to warrant copyright protection if theauthor, through his skill and effort, has contributed adistinguishable variation from the older works. In such a case,only those parts which are new are protected by the newcopyright.

• Garfield’s creator obviously has copyright to the comic stripsthat entertain us with the antics of this strange mutant of afeline. But does the copyright protection operate to bar an

entrepreneur from creating Garfield stuffed toys or sculptor from immortalizing the flabby cat in Italian marble? A simpler judicial approach would be to treat the toy or the piece of asculpture as a derivative work, and thus, to require authorityfrom Garfield’s creator before allowing it legal status. [See: IPLby Ranhilio C. Aquino, 2003 Ed.]

THE INTERLEGO DOCTRINE

“There must be in addition some element of material alteration or embellishment which suffices to make the totality of the work anoriginal work. Even a relatively small alteration or additionquantitatively may, if material, suffice to convert that which issubstantially copied from an earlier work into an original work.Whether it does so or not is a question of degree having regard

to the quality rather than the quantity of the addition. But copyingper se, however much skill or labor might be devoted to theprocess could not make an original work.”

Note: What is protected by copyright is not merely the visualappearance but the work as embodied in a particular artisticmedium, example - an artfully blown glass rose versus atransposition of the same rose but into different artistic medium –a pencil sketch. Is there infringement? A skillfully and artisticallyblown glass rose is protected as a glass rose, so that changingthe medium is not infringing the work. [See: IPL by Ranhilio C.

Aquino, 2003 Ed.]

A copyright precludes trademark registration.

In United Feature Syndicate vs. Munsingwear, GR No. 76193,11-9-89, the SC held that the exclusive rights vested by PD 49 infavor of a copyright owner preclude the appropriation of the samework as a trademark.

QUESTION: Would public display of a purchased copyrightedwork, like paintings constitute infringement?

Generally, there is no infringement. PD 49 and RA 8293 aresilent on this point. It is patently absurd to deny a purchaser of awork of art the right to display it publicly and to impose upon himthe obligation of concealing it from public view.

Excepted from this privilege are works produced by film, slide,television image or analogous process. Otherwise, copyright inthem would mean nothing at all, for public display, showing or exhibiting them are precisely the source of economic advantagefor their creators, while painters and sculptors derive economicgain from the sale of the work itself.

However : [see: IPL by Ranhilio C. Aquino, 2003 Ed.]

a. A protected photograph cannot be copied by drawingor by photographic reproduction;

b. A choreographic work is infringed by a still photo whiledance routine is in progress;

c. A photograph of copyrighted jewelry infringescopyright.

When is there infringement?

Substantial reproduction does not require reproduction of theentire copyrighted work, or even a large portion thereof.

If so much is taken that the value of the original work issubstantially diminished, or the labors of the original author are

substantially and to an injurious extent appropriated by another,that is sufficient in point of law to constitute piracy.

It is not the copying, per se, that is prohibited but the injuriouseffect it has on the author of the copied work. The unfair appropriation of one’s research effort is sufficient injury to sustaina claim. (See: Habana vs. Robles GR No. 131522, 7-09-99)

Remedies in case of infringement:

a. Damages;

b. Injunction;

Effect of expiration: On the final expiration of the copyrightterm, the whole work falls into the public domain and becomesfree and unrestricted.

TRADEMARKS

General Garments Corporation vs. the Director of Patentsand Puritan Sportswear Corporation [G.R. No. L- 24295.September 30, 1971]

ISSUE: Whether or not a foreign corporation, unlicensed and unregistered to do business in the Philippines has legal capacity to maintain a suit in the Philippine Patent Office for cancellationof a registered trademark.

A foreign corporation which has never done business in thePhilippine Islands and which is unlicensed to do business here,

but widely and favorably known in the Islands through the use of its products bearing its corporate and trade name has a legalright to maintain an action in the Islands.

The purpose of such a suit is to protect its reputation,corporate name and goodwill which have been establishedthrough the natural development of its trade for a long period of years. The right to the use of the corporate or trade name is aproperty right, a right in rem, which it may assert and protect inany of the courts of the world- even in jurisdictions where it doesnot transact business- just the same as it may protect its tangibleproperty, real or personal against trespass or conversion.



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Ang Si Heng and Salustiana Dee vs. Wellington Dept. StoreInc., Benjamin Chua, S.R. Mending Store Inc. Mendinueto,and Filemon Cosio (G.R. No. L.4531, Jan. 10, 1953)

ISSUES: Are geographical indications registrable? When doesuse of trade name constitute unfair competition?

a. The term “Wellington” is either a geographical name or surname of a person. Geographical names are regarded as

common property and it is a general rule that the samecannot be appropriated as the subject of an exclusivetrademark or trade name. Even if Wellington was asurname, it cannot also be validly registered as trade name.

Therefore an action for violation of trademark cannot bemaintained because the right to damages or injunction isgranted only to those entitled to the exclusive use of aregistered trademark or trade name. (Section 23, Republic

Act No. 166)

b. On unfair competition, while there is a similarity betweenthe trademark or tradename “Wellington Company” and thatof “Wellington Department Store,” no confusion or deceptioncan possibly result or arise from such similarity because thelatter is a “department store”, while the former does notpurport to be so. Moreover, the Supreme Court held that thepublic cannot be deceived that the goods of the plaintiff originate from the defendant’s store because thedefendant’s store does not sell clothing apparels bearing theplaintiff’s mark “Wellington”.

Neither could such deception by any possibility be producedbecause the defendant’s store is situated at Escolta, whileplaintiff’s store or place of business is located in another business district far away from Escolta. The mere fact thattwo or more customers of the plaintiffs thought of theprobable identity of the products sold by one and the other

is not sufficient proof of the supposed confusion that thepublic has been led into by the use of the name adopted bythe defendants. No evidence has been submitted thatcustomers of the plaintiffs-appellants had actually beenmisled into purchasing defendant’s articles andmerchandise.

Crisanta Y. Gabriel vs. Jose R.Perez and Honorable TiburcioEvalle as Director of Patents (G.R. No. L-24075, January 31,1974)

ISSUE: Whether or not petitioner as exclusive distributor of Respondent became the rightful, owner of the trademark“WONDER”.

The exclusive distributor does not acquire any proprietaryinterest in the principal’s trademark. “In the absence of anyinequitable conduct on the part of the manufacturer, an exclusivedistributor, who employs the trademark of the manufacturer, doesnot acquire proprietary interest in the mark which will extinguishthe rights of the manufacturer, and a registration of the trademarkby the distributor as such belongs to the manufacturer, providedthe fiduciary relationship does not terminate before application for registration is filed.” (87 CJS 258-259, citing cases.)

Philippine Refining Co., Inc., vs. Ng Sam and the Director of Patents (Gr No. L-26676, July 30, 1982)

Camia Cooking Oil vs. Camia Ham

ISSUE: Whether or not registration of the same mark under thesame class for non-competitive and unrelated goods may beallowed.

HELD: The parties are non-competitive and their products so

unrelated that the sue of identical trademarks is not likely to giverise to confusion, much less cause damage to petitioner.

While ham and some of the products of petitioner areclassified under Class 47 (Foods and Ingredients of Food), thisalone cannot serve as the decisive factor in the resolution of whether or not they are related goods. Emphasis should be onthe similarity of the products involved and not on the arbitraryclassification or general description of their properties or characteristics. The particular goods of the parties are sounrelated that consumers would not in any probability mistakeone as the source or origin of the product of the other.

“Ham” is not a daily food fare for the average consumer.

One purchasing ham would exercise a more cautious inspectionof what he buys on account of its price. In addition, the goods of petitioners are basically derived from vegetable oil and animalfats, while the product of respondent is processed from pig’slegs. A consumer would not reasonably assume that petitioner has so diversified its business to include the product of respondent.

The term “CAMIA” is descriptive of a whole genus of gardenplants with fragrant white flowers. Some people call the “CAMIA”the “white ginger plant” because of its tuberous roots, whilechildren refer to it as the butterfly flower because of its shape.Being a generic and common term, its appropriation as atrademark, albeit in a fanciful manner in that it bears no relation

to the product it identifies, is valid. However, the degree of exclusiveness accorded to each user is closely restricted.

Esso Standard Eastern Inc., vs. United Cigarette Corp. G.R.No. L-29971, Aug. 31, 1982

Esso Petroleum vs. Esso Cigarette

ISSUE: Whether or not the protection afforded by a trademark registration extends to all goods.

The goods on which petitioner uses the trademark ESSO,petroleum products, and the product of respondent, cigarettes,are non-competing. Trademark infringement depends on whether or not the goods of the parties are so related that the public may

be, or is actually, deceived and misled that they came from thesame manufacturer. In cases of related goods, confusion of business could arise out of the use of similar marks, in the caseof non-related goods, it could not.

In the case at bar, the goods are obviously different fromeach other – with “absolutely no iota of similitude”. They are soforeign that it is unlikely that purchasers would think thatpetitioner is the manufacturer of respondent’s goods. One of thefactors that show that the goods involved are non-competitiveand non-related is the fact that respondent’s goods are beyondPetitioner’s “zone of potential or natural and logical expansion”.



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Moreover, respondent’s goods are distributed through differentchannels of trade.

SIMILARITY TEST : To determine whether a trademark has beeninfringed, the mark as a whole must be considered and not asdissected. If the buyer is deceived, it is attributable to the marksas a totality, not usually to any part of it [Del Monte Corporationvs. Court of Appeals, 181 SCRA 410]

DISSIMILARITY TEST [or the so-called “visible differencetest ”]: In the case of Asia Brewery vs. Court of Appeals (224SCRA 437), the SC applied the “dissimilarity test” or “visibledifference test” in determining whether or not there exists unfair competition. In this case, while the Supreme Court did notabandon the “similarity test”, it nevertheless, qualified the samewhen it applied the “visible difference test” especially so when thedissimilarities abound. It said: “Besides the dissimilarity in their names, the following other dissimilarities in the trade dress or appearance of the competing brands abound:

1. The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck. The BEER PALE PILSEN bottle has afat, bulging neck;

2. The words “pale pilsen” on SMC’s label are printed inbold and laced letters along a diagonal band, whereasthe words “pale pilsen” on ABI’s bottle are half the sizeand printed in slender block letters on a straighthorizontal band;

3. The names of the manufacturers are prominentlyprinted on their respective bottles. SAN MIGUEL PALEPILSEN is “Bottled by San Miguel Brewery Philippines,”whereas BEER PALE PILSEN is “Especially brewedand bottled by Asia Brewery Incorporated, Philippines;

4. On the back of ABI’s bottle is printed in big, bold letters,under a row of flower buds and leaves, its copyrighted

slogan: BEER NA BEER!” Whereas SMC’s bottlecarries no slogan;

5. The back of the SAN MIGUEL PALE PILSEN bottlecarries the SMC logo, whereas the BEER PALEPILSEN bottle has no logo;

6. The SAN MIGUEL PALE PILSEN bottle cap is stampedwith a coat of arms and the words “San Miguel BreweryPhilippines” encircling the same. The BEER PALEPILSEN bottle cap is stamped with the name “BEER”in the center, surrounded with the words “Asia BreweryIncorporated Philippines;

7. Finally, there is a substantial price difference betweenBEER PALE PILSEN (currently at P4.25 per bottle) andSAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who pays only P4.25 for a bottle of beer cannot expect to receive San Miguel Pale Pilsen fromthe storekeeper or bartender.”

• In the Asia Brewery case, the Supreme Court deviating fromthe Del Monte ruling further said: “The ruling may not apply toall kinds of products. In resolving cases of infringement andunfair competition, the courts should take into considerationseveral factors which would affect its conclusion, to wit: the

age, training and education of the usual purchaser, the natureand cost of the article, whether the article is bought for immediate consumption and also the conditions under which itis usually purchased.

• The Del Monte case involved catsup, a common householditem which is bought off the store shelves by housewives andhouse help who, if they are illiterate and cannot identify theproduct by name or brand, would very likely identify the

product by mere recollection of its appearance.

Since the competitor, Sunshine Sauce Mfg. Industries,not only used recycled Del Monte bottles for its catsup (despitethe warning embossed on the bottles: “Del Monte Corporation.Not to be refilled.”) but also used labels which were a“colorable imitation” of Del Monte’s label, we held that therewas infringement of Del Monte’s trademark and unfair competition by Sunshine. Our ruling in Del Monte would notapply to beer which is not usually picked up from a store shelf by ordered by brand by the beer drinker himself from thestorekeeper or waiter in a pub or restaurant.”

• In Lim Hoa vs. Director of Patents 100 Phil. 214, in rel. to

Etepha vs. Director, 16 SCRA 495 , the Supreme Court wasmore telling: “The court differentiated food seasoning product,a kitchen article of daily consumption, from commodities or articles of relatively great value, such as radio and televisionsets, air-conditioning units, machinery, etc., where theprospective buyer generally the head of a family or abusinessman, before making the purchase, reads thepamphlets and all literature available, describing the article heis planning to buy and perhaps even makes comparisons withsimilar articles in the market.

He is not likely to be deceived by similarity in thetrademarks because he makes a more or less study of thesame and may even consult his friends about the relative merit

and performance of the article or machinery, as compared toothers also for sale.

UNFAIR COMPETITION :

Alhambra Cigar vs. Mojica March 21, 1914

Unfair competition consists in passing off or attempting topass off upon the public the goods or business of one person andfor the goods or business of another. It consists essentially in theconduct of a trade or business in such a manner that there iseither an express or implied representation to that effect. Unfair competition, as thus defined, is a legal wrong for which the courtsafford a remedy. It is a tort and a fraud. The basic principle is thatno one has a right to dress up his goods or otherwise representthem in such a manner as to deceive an intending purchaser andinduce him to believe he is buying the goods of another. Actual or probable deception and confusion on the part of customers byreason of defendant’s practices must always appear to beconsidered as an act of unfair competition.

In addition to that, it is not necessary to show that anyperson has been actually deceived by defendant’s conduct andlead to purchase his goods in the belief that they are the goods of plaintiff, it is sufficient to show that such deception will be naturaland probable result of defendant’s acts. Either actual or probable



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deception and confusion must be shown, for if there is noprobability of deception there is no unfair competition.

In this regard, the class of purchasers who buy the particular kind of article manufactured must be considered in determiningthe question of probable deception. This includes incautious,unwary or ignorant purchasers, but not purchasers who make noexamination. This is because unfair competition is a case-to-casebasis. The fact that careful buyers, who scrutinize closely, are not

deceived merely shows that the injury is less in degree but notnecessarily mean there is no injury. The same is true withcareless purchasers who are deceived simply by the use of ordinary and common forms of putting up goods do notnecessarily show unfair competition.

TRIPS [Agreement on the Trade-related aspects of Intellectual Property Rights]

What is included in the term: “Intellectual Property Rights”? (Sec. 4 RA 8293)

¬ Copyright and related rights;

¬ Trademarks and Service Marks;

¬ Geographic Indications (One which identifies a good asoriginating in a territory of a trips member);

¬ Industrial Designs (Any composition of lines or colors or any three dimensional form, whether of not associatedwith lines or colors and gives a special appearance to andcan serve as pattern for an industrial product or handicraft);

¬ Patents;

¬ Layout – designs (Topographies) of Integrated Circuits;

¬ Protection of undisclosed information [i.e. trade secrets,formula]

INTELLECTUAL PROPERTY OFFICE

Functions:

• To grant patents for inventions;

• To register marks, geographic indication, integrated circuits;technology transfer arrangements;

• To administratively adjudicate contested proceedingsaffecting IPR;

Structure: The IPO is headed by a director general

There are 6 bureaus, each headed by a director:

1. Bureau of Patents; (Functions: search and examinationof patent applications and the grant of patents);

2. Bureau of Trademarks: (function: search andexamination of applications for the registration of marksof ownership and the issuance of the certificate of registration);

3. Bureau of Legal Affairs - Functions:

a. hear and decide opposition to the application for registration of marks; cancellation of trademarks,

patents, industrial designs; and petitions for compulsory licensing of patents;

b. exercise original jurisdiction in administrativecomplaints for violation of laws involvingintellectual property rights: Provided , That its

jurisdiction is limited to complaints where the totaldamages claimed are less than P200,000.00:Provided further , that availment of the provisional

remedies may be granted in accordance with theRules of Court];

4. Documentation, Information and Technology Transfer Bureau - Functions: provide technical, advisory andother services relating to the licensing and promotion of technology, and carry out an efficient and effectiveprogram for technology transfer; register technologytransfer arrangement; and settle disputes involvingtechnology transfer payments];

5. The Management Information System and EDPBureau;

6. The Administrative, Financial and Personnel ServiceBureau;

PATENT

What is patent? A grant made by the government to an inventor,conveying and securing to him the exclusive right to make use of his invention for a given period.

What are patentable inventions? Any technical solution to aproblem in any field of human activity which is new, involves aninventive step and is industrially applicable. It may be, or mayrelate to: a product; or process; or an improvement of any of theforegoing. (Sec. 21) Example: A new and useful machine; amanufactured product or substance; or an improvement of any of

the foregoing.When shall an invention be considered as “new”?

¬ When it is novel; (Sec 23)

¬ When it does not form part of a prior art.

Prior art shall consist of: everything which has been madeavailable to the public anywhere in the world, before thefiling date of the application claiming invention, which meansthat the “invention” is: (a) already known; (b) publicly used ;or (c) already patented or described ;

When an invention is considered useful? When it is capableperforming some beneficial function.

NON-PATENTABLE INVENTIONS:

¬ Discoveries, scientific theories and mathematical methods;

¬ Schemes, rules and methods of performing mental acts,playing games or doing business, and programs for computer;

¬ Methods for treatment of the human or animal body bysurgery or therapy and diagnostic methods practiced onhuman or animal body;



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¬ Plant varieties or animal breeds or essentially biologicalprocess for the production of plants and animals except:micro-organisms and non-biological and micro-biologicalprocesses;

¬ Aesthetic creations; or

¬ Anything contrary to public order or morality.

Who has a RIGHT to a patent?

ü The right to a patent belongs to the inventor, his heirs or assigns;

ü When two (2) or more persons have jointly made aninvention, the right to a patent shall belong to them jointly.(co-ownership)

ü If two or more persons have made the invention separatelyand independently of each other, the right to the patentshall belong to the person who filed an application for suchinvention;

ü Where two or more applications are filed for the sameinventions, to the applicant who has the earliest filing date

or the earliest priority date.

ü The person who commissions the work shall own thepatent, unless otherwise provided in the contract;

ü In the case the employee made the invention in the courseof his employment contract, the patent shall belong to :

• The employee, if the inventive activity is not a part of his regular duties even if the employee uses the time,facilities and materials of the employer;

• The employer, if the invention is the result of theperformance of his regularly assigned duties, unlessthere is an agreement to the contrary

RIGHT OF PRIORITY

An application for patent filed by any person who haspreviously applied for the same invention in another country,which by treaty, convention, or law affords similar privileges toFilipino citizens, shall be considered as filed as of the date of thefiling the foreign application: Provided, That :

a. The local application expressly claims priority;

b. It is filed within 12 months from the date of copy of theforeign application was filed;

c. A certified copy of the foreign application together withan English translation is filed w/in 6 months from the

date of filing in the Philippines.

Term of Patent: 20 years from the filing date of the application.

RIGHT OF PATENTEE:

A patentee shall have the exclusive right to make; use andsell the patented machine, article or product, and to use thepatented process for the purpose of industry or commerce, thru-out the Philippines for the duration of the patent.

INFRINGEMENT OF PATENT:

A violation of the right which is secured to the inventor bythe patent law (IPC) constitutes an infringement. It consists in themaking, using, selling of the patented process or instrumentalityby any person without authorization on the part of the patentee.

TEST : In order to constitute infringement there must beSUBSTANTIAL IDENTITY (not exact identity) between the twodevices.

They are identical: When they perform substantially thesame function (or mode or principle) in substantially the sameway to obtain the same result, even if they differ in name, form,shape or dimensions. (Doctrine of equivalents)

NO INFRINGEMENT:

¬ When the original machine is improved by the use of different form or combination although performing the samefunctions.

¬ When a single element in the original device is left out in thenew device.

¬ When the making or using of a patented invention is not

conducted for profit and solely for the purpose of researchor experiment or for instruction.

¬ Preparation of a medicine for individual cases in a pharmacyor by a medical professional in accordance with a medicalprescription.

¬ When used in any foreign ship or vessel, aircraft or landvehicle for its exclusive needs (not for purposes of manufacture or sale) entering the Philippines temporarily or accidentally;

¬ Any prior user who in good faith was using the invention inhis business or enterprise prior to the filing or priority date of the application on which a patent is granted.

¬ Use by the government or third persons authorized by thegovernment when :

a. Required by public interest. (i.e.: national security;nutrition; health; development of other sectors); or

b. It is determined by an administrative or judicial bodythat the exploitation by the owner of the patent is anti-competitive.

Note: The burden of proof to show infringement of a patent is onthe party who asserts such infringements.

Defenses:

a. The patent is invalid;b. The invention is not new and patentable;

c. The patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out byperson skilled in the art;

d. The patent is contrary to public order or morality.

Remedies: Civil action for damages plus injunction.



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DONATIONS

Art. 725. Donation is:

An act of liberality whereby a person disposes gratuitously of athing or right in favor of another who accepts it.

Essential requisites:

a. The reduction in the patrimony of the donor;

b. The increase in the patrimony of the donee;

c. The intent to do an act of liberality.

Note: When a person gets a life insurance and names a thirdperson as his beneficiary, and the insurance becomes payableby the death of the insured, there is a donation in favor of thebeneficiary – not in the sum received by him from the insurer, butin the total amount of premiums that have been paid by theinsured. This is the only amount that leaves the patrimony.

If the amount of premiums, however, exceeds theinsurance, there is donation only to have extent of the insurance.This is the only amount that is added to the patrimony of the

donee.Classification of donations:

1. Simple - the cause is pure liberality (no strings attached);

2. Remuneratory - to reward past services which do notconstitute demandable debt (ex: A donation to one whosaved the donor’s life).

Note: The phrase “they do not constitute a demandabledebt ” (Art. 726) means that the service which was rendereddid not produce an obligation demandable against thedonor; or if it had, such obligation has been renounced infavor of the donor.

EXAMPLE: A agreed to review B for the bar examinationsfor a fee of P10,000.00. Later, B passes the bar examination, and as a gratitude gives A a parcel of landworth P20,000.00. The remuneratory donation here is onlywith respect to the excess of P10,000.00 because, theservices of A constitute a demandable debt, unless, A in themeantime renounces his fees and in such case , there isdonation to the extent of P20,000.00.

3. Conditional or Modal – when the donation imposes uponthe donee an obligation in favor of the donor himself or athird person or even the public.

EXAMPLE: A piece of land is donated to the city in order

that it may be converted into a park or public market.Form to be followed:

¬ In simple/remuneratory donations - form of donations

¬ Onerous donations - contracts.

Art. 727. Illegal or impossible conditions in simple andremuneratory donations shall be considered as notimposed.

Note:

• It is supposed to be simple (no strings attached), why isthere a need to have a condition, much less, impossible?

• If the condition is not void, then the donation is not reallysimple, for it has a burden imposed upon the donee.

• What is voided here is the impossible condition and not thedonation itself.

FACTS: Fernando and Placido Manalo “donated” a parcel of landto their niece, Leoncia, on the condition that the latter wouldshoulder the “funeral expenses” of the former when they die. Thedonation was done in a private instrument. Is the donation valid?

HELD: Yes, the donation is valid because it is an onerousdonation. It is governed by the law on contracts. A privateinstrument was sufficient. [Manalo vs. De Mesa 20 Phil. 496 ]

DONATION INTER-VIVOS

Art. 730. Effect of the fulfillment of the suspensive condition

beyond the lifetime of the donor.EXAMPLE: “A” donates a piece of land to “B” on the conditionthat “X”, “A’s” son becomes a lawyer.

The fulfillment of the condition even after the death of the donor does not affect the nature of the donation as inter vivos. Thefulfillment retroacts to the time of the donation.

Art. 731. When a person donates something, subject to theresolutory condition of the donor’s survival, there isdonation inter-vivos.

Note: Fulfillment of a resolutory condition, its effect.

EXAMPLE: “A” was about to undergo a delicate operation. Hedonated to “B” a parcel of land subject to the condition that if “A”survives the operation, “B’s” ownership over the land wouldterminate, and the same would revert to “A”. But if “A” dies, thereis donation inter vivos not mortis causa.

When is donation perfected?

Art. 734. The donation is perfected from the moment thedonor knows of the acceptance by the donee;

Art. 746. Acceptance must be made during the lifetime of thedonor and the donee.

Who may donate?

Art. 735. All persons who may contract and dispose of their property may make a donation.

Art.737. The donor’s capacity shall be determined as of thetime of the making of the donation.

REMINDER: The phrase “as of the time of the making of thedonation” should really mean “as of the time of the perfection of the donation”. So that, a physically incapacitated person (i.e.unemancipated minors or insane) may still validly donateprovided that at the time of his knowledge of the acceptance bythe donee, the incapacity is not present. Although, it is submitted



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that the donation is voidable following the law on contracts whichare suppletory to simple donation – as in vitiated consent.

The capacity of the donee is determined at the time of theperfection of the donation (at the time he makes known to thedonor his acceptance of the donation).

Capacity of the Husband or the Wife: Husbands or wives maydonate their own capital or paraphernal properties without the

consent of the other. But with respect to conjugal or communityproperty, they cannot make donations without the consent of theother, except : moderate donations for charity or on occasion of family rejoicing or family distress, (see : Art. 98 & Art. 125 of theFamily Code ); see also Arts. 113-115 of the Family Code.

May husbands and wives donate to each other?

Art. 87. Family Code – Every donation or grant of gratuitousadvantage, direct or indirect, between the spouses duringthe marriage shall be void, except moderate gifts which thespouses may give each other on the occasion of any familyrejoicing. The prohibition shall also apply to person livingtogether as husband and wife without a valid marriage.

Reason: To protect the creditors and the weaker spouse from thedominance of the other.

What is moderate is relative. This may be determined based onthe financial status of the family.

Capacity of a minor : For purposes of marriage, a person maycontract marriage at the age of 18 years. But may he enter into amarriage settlement wherein he may dispose of his futureproperty in favor of his prospective spouse without theintervention of the parents?

Art. 78. (in relation to Art. 234 and 236 of the Family Code) whichrequires that the parents are required to be made parties to themarriage settlements was impliedly repealed by RA 6809,

wherein marriage settlements may now be entered by the childpersonally even without the intervention of the parents.

Read also: Donations by reason of marriage – Arts. 82 – 87,Family Code.

What may be donated?

Art. 750. The donation may comprehend all present propertyof the donor, or part thereof, provided he reserves in fullownership or in usufruct, sufficient means for the support of himself, and all of relatives who at the time of theacceptance of the donation, are by law entitled to besupported by the donor. Without such reservation, thedonation shall be reduced on petition of any personaffected.

REMINDER:

¬ The donation may comprehend all present property, meaningthat which the donor can dispose of at the time of the donationbut in all instances, the donor cannot give more than what hecan give by will (meaning, a person cannot receive more thanwhat the giver can give by virtue of a will). Otherwise, thedonation is considered inofficious.

¬ The sufficiency can be determined by the court in accordancewith prudence and the exercise of reasonable discretion.

¬ Excessive or inofficious donation is not void but merelyreducible.

¬ Donations cannot comprehend future property (Art. 751),because the donor cannot give what he does not have, exceptin cases of contractual succession and donations by reason of

marriage (see : Art. 84, Family Code).What are the formalities of a donation?

With respect to IMMOVABLE property: (See: Art. 749)

ü The donation must be in a PUBLIC DOCUMENT.

ü The acceptance must also be in a PUBLICDOCUMENT.

With respect to MOVABLE property:

ü The donation must be in writing.

ü If the value of the thing is P5,000.00 or less :

•

may be oral but simultaneous delivery of the thingand the document representing the right donated isrequired;

• may be in writing;

ü In both instances (where the donation is either oral or written), the acceptance may be made orally (expressor implied) or in writing;

SPECIAL DISQUALIFICATION

See: Arts. 739 and 740

a. Those made between persons who are guilty of adulteryor concubinage at the time of the donation;

Notes:

• This refers to donations between paramours.

• There is no necessity of proving the guilt in a criminalproceedings, it is enough that the guilt may be proven bya preponderance of evidence in a civil action for thedeclaration of nullity of the donation.

• The commission of the adultery or concubinage must beat the time of the donation and not after.

• When the purpose of the donation is to initiate, continue,resume or compensate the illicit relations between theparamours, the donation is void.

• But if the intention is to indemnify the damaged caused tothe other at the time of separation, the donation is valid.

b. Those made between persons found guilty of the sameoffense, in consideration thereof;

Note:

• If a person agrees to kill another in consideration of adonation to be made in his favor, the donation is void.



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• Here, since the consideration is illegal, the donation, mustnecessarily be void;

• There must be a conviction.

c. Those made to a public officer or his spouse,descendants or ascendants by reason of his office.

Note:

•

The purpose for the rule is to prevent bribery;• The donation is void by reason of public policy.

Art. 740. Incapacity to succeed by will shall be applicable todonations inter-vivos. The following persons aredisqualified:

a. The priest who heard the confession of the donor during his last illness, or

b. The minister of the gospel who extended spiritual aid tohim during the same period;

c. The relatives of such priest or minister of the gospelwithin the 4th civil degree, the church the order,chapter, community, organization, or institution towhich such priest or minister belongs;

d. The guardian with respect to donations made by theward in his favor before the final accounts of theguardianship have been approved, even if the donor should die after the approval thereof; nevertheless anydonation made by the ward in favor of the guardianwhen the latter is his ascendant, descendant, brother,sister, or spouse, shall be valid;

e. Any physician surgeon, nurse, health officer, or druggist who took care of the donor during his lastillness;

f. Individuals, associations and corporations notpermitted by law to receive donations.

Note: The incapacity to inherit by reason of unworthinessprovided in Art. 1032 is not included within the scope of theabove article.

A donation made to a person who falls under the provisionsof said article would be valid, because a testamentary provisionmade in favor of such person after the testator has knowledge of the act of unworthiness would constitute pardon under Art. 1033.

On the other hand, if the donation has already been made

when the cause of unworthiness occurs, the donation isrevoked only by the causes mentioned in Arts. 760, 764 and765.

RULES IN CASES OF DOUBLE DONATIONS:

• Apply the rule on double sales, Art. 1544, NCC;

a. Movable property - the ownership shall be transferredto the donee who have first taken possession thereof ingood faith.

b. Immovable property – the ownership shall belong to thedonee who first recorded it in the registry of property.

• If there be no inscription, the ownership shall pertain to thedonee who in good faith was the first in the possession. Andin the absence thereof, to the donee who presents the oldesttitle, provided there is good faith.

REVOCATION AND REDUCTION OF DONATIONS

Art. 760. Every donation inter-vivos made by a personhaving no children or descendants, legitimate or legitimatedby subsequent marriage, or illegitimate, may be revoked or reduced by the happening of any of these events:

a. If the donor, after the donation, should have legitimateor legitimated children, even though they beposthumous; BIRTH

b. If the child of the donor whom the latter believed to bedead when he made the donation, should turn out to beliving; REAPPEARANCE

c. If the donor should subsequently adopt a minor child.

ADOPTIONNote:

¬ When the revocation should take effect: The donation isrevoked or reduced by the happening of any of the eventsenumerated in Art. 760. In other words, the revocation or reduction takes place ipso jure. No action is necessary torevoke or reduce the donation which is already considered bylaw as revoked. Court action is necessary however, when thedonee refuses to return the property. In such case, thedecision of the court will be merely declaratory of therevocation – it will not be a revocatory act.

¬ Birth, reappearance and adoption as causes for the revocation

or reduction. The article seeks to protect the presumptivelegitimate or the expected legitime of the heir.

¬ The value of the estate to be considered is at the time of thebirth, reappearance or adoption.

¬ The action to reduce must be brought within 4 years, see: Art.763. This action cannot be renounced.

¬ The article applies only to donation inter vivos and not to:

a. donations propter nuptias (which can be revoked onlyfor causes enumerated by law);

b. onerous donations (for these are really contracts);c. mortis causa (for this is revocable for any or no cause

at all).ILLUSTRATION: “X” has no child. At the time he gave thedonation of P10,000.00, he had P100,000.00. Therefore after thedonation, he had P90,000.00 left. Later, he adopted a minor child. At the same time he made the adoption he had onlyP5,000.00 left. Should the donation be reduced? If so, howmuch?



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Note: The value of the estate to be considered is at the time of birth, reappearance or adoption.

Donation = P10,000.00

Property left at the time of adoption = P 5,000.00

P15,000.00

Legitime = P15,000.00 x ½ = P 7,500.00

Since the value of the estate is only P5,000.00, the donationmust be reduced by P2,500.00.

See: Cruz vs. CA, 140 SCRA 245

Art. 764. A donation may also be revoked at the instance of the donor when the donee fails to comply with any of theconditions which the former imposed upon the latter.

Exception: When the condition is immoral, illegal or impossible.

Notes:

¬ Effect of non-fulfillment – the donor has the choice of enforcing the condition by action for specific performance.

The donee having bound himself to carry out the conditionimposed by accepting the donation, may be compelled withwhat has been stipulated.

¬ A court action is necessary if the donee refuses to returnthe property

Art. 765. The donation may also be revoked at the instanceof the donor, by reason of ingratitude in the following cases:

a. If the donee should commit some offense againstthe person, the honor, or the property of the donor or of his wife or children under his parental authority;

Note:

• Offense does not mean a criminal offense; it mayalso include non-criminal offenses.

• No criminal conviction is necessary, and proof of theoffense by mere preponderance of evidence in a suitfor revocation is sufficient.

b. If the donee imputes to the donor any criminaloffense, or any act involving moral turpitude, eventhough he should prove it, unless the crime of the acthas been committed against the donee himself, his wifeor children under his authority;

c. If he unduly refuses him support when the donee islegally or morally bound to give support to the donor.

Notes:

• There is legal or moral ground;

• The refusal to support must be “undue” or “unjustified”

• It is understood that the support given periodicallyshould not exceed the value of the thing donated

Art. 769. Prescriptive period for revocation by reason of ingratitude shall be 1 year to be counted from the time thedonor had knowledge of the fact and it was possible for himto bring the action.

Art. 770. The action for revocation is not transmitted to theheirs of the donor.

Reason: Because the grounds for revocation are purely personal

to the donor.Exceptions:

¬ When the action was already instituted but the donor subsequently died;

¬ When the donor is killed by the donee;

¬ The donor died without knowing the act of ingratitude.

Art. 771. Inofficious donations:

a. The value of the estate is the value at the time of thedonor’s death.

b. Net Estate + property left at the time of death minus

debts and charges plus value of donations.

c. The donation may be considered inofficious, only in sofar as it may affect the legitime of the heirs;

d. Since the inofficiousness of the donation cannot bedetermined till after the donor’s death, it follows that inthe meantime, the donation is valid and ownership istransmitted to the donee during the donor’s lifetime.

Prescriptive period: The action to reduce or revoke may bebrought within a period of 5 years from the time of the donor’sdeath. See: Art. 1149, NCC

Who may bring action to reduce?

• Compulsory heirs of the donor;

• Heirs and successors-in-interests of the compulsory heirs.

Documents

Law on Property (Batacan)