I.

Classification of Property
A. Immovable and Movable
1.
Article 414. All things which are or may
be the object of appropriation are
considered either:
(1) Immovable or real property; or
(2) Movable or personal property.
Parties to a contract may by agreement
treat as personal property that which by
nature would be real property.
Standard Oil Company v. Jaramillo
Building was mortgaged to SOC. SOC sought
to compel Jaramillo, register of deeds, to
register a CHATTEL mortgage issued in SOCs
favor. The objects of the document were the
leasehold rights over a certain property and
the house constructed over the same
property.
Jaramillo refused to register the document
because the objects did not appear to be
personal property under the Chattel Mortgage
Law. SOC filed for mandamus.
HELD: The document should be registered. It
is undeniable that the parties to a contract
may by agreement treat as personal property
that which by nature would be real property.
The registers duty is MINISTERIAL, he can
not determine the nature of the document
sought to be registered.
2.
Article 415. The following are immovable
property:
(1) Land, buildings, roads and constructions of
all kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while
they are attached to the land or form an
integral part of an immovable;
(3) Everything attached to an immovable in a
fixed manner, in such a way that it cannot
be separated therefrom without breaking
the material or deterioration of the object
(incorporation);
(4) Statues, reliefs, paintings, or other objects
for use or ornamentation, placed in
buildings or on lands by the owner of the
immovable in such a manner that it reveals
the intention to attach them permanently to
the tenements (destination);
(5) Machinery, receptacles, instruments or
implements intended by the owner of the
tenement for an industry or works which
may be carried on in a building or on a
piece of land, and which tend directly to
meet the needs of the said industry or
works (destination);
(6) Animal houses, pigeon-houses, beehives,
fish ponds or breeding places of similar
nature, in case their owner has placed them
or preserves them with the intention to
have them permanently attached to the
land, and forming a permanent part of it;
the animals in these places are included
(destination);
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the
matter thereof forms part of the bed, and
waters either running or stagnant;
(9) Docks and structures which, thought
floating, are intended by their nature and
object to remain at a fixed place on a river,
lake, or coast;
(10) Contracts for public works, and servitudes
and other real rights over immovable
property.
Does not define, only enumerates.
Academic Classification of Immovables (NIDA)
1. Nature (trees and plants, land)
2. Incorporation (buildings)
3. Destination or purpose (machinery
placed by owner on tenement for direct
use of industry or works to be carried
on therein)
4. Analogy (like the right of usufruct,
public works, servitudes)
---
If a building is not adhered to the soil and there
is no intent of permanency, it is personal
property.
---
(4) 1. movable property must be placed in an
immovable property
2. by the owner of the immovable
3. the intention must be to attach it
permanently (destination)
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---
Provision in lease that improvements made
shall belong to the lessor upon termination of
the lease air-conditioner installed by lessee.
Will AC be turned over to the lessor? Yes.
Lessee acted as an agent of the lessor.
---
(5) Requisites
A. Placed by the owner;
B. Intended for an industry or works
carried on in building or land;
C. Machines must tend to directly meet
the needs of the industry;
D. Machines must be essential and
principal elements in the industry; not
mere incidentals.
Ex. Sewing machines placed in own house
intended to be used as a garments factory.
Immovable? Yes. Machines placed by owner;
for industry; tend directly to meet;
essential
If other persons house, immovable
Effect of separation: If temporarily taken away,
still immovable.
---
Sale of real property in the CM Registry
cannot bind third persons in good faith.
Leung Yee v. Strong Machinery
Agricola purchased rice-cleaning machinery
from Strong and executed a chattel mortgage
over the machinery and the building in which
it was installed. Agricola defaulted and Strong
purchased the building at auction. The
mortgage and sale were registered in the CM
registry.
Agricola later sold the land to Strong, the sale
being in an unregistered public document.
It turns out that the building was also REM to
Leung Yee to secure payment of a
construction contract. When Agricola
defaulted, Leung Yee purchased the building
at a sheriffs sale (this sale took place after
the building was bought by Strong).
Leung Yee brought suit to recover possession
of the building.
HELD: Strong has a better right over the
building. This is true only because Leung Yee
knew of the chattel mortgage to Strong when
he purchased the building; he was a buyer in
bad faith. The sale of the building cannot bind
third persons in good faith because it was the
sale of real property registered not in the
Registry of Real Property but the CM Registry.
A building may be validly mortgaged
separately from the land upon which it is
built.
Prudential Bank v. Judge Panis
Owners of a building on leased land obtained
2 loan from the bank, the loans secured by
REMs over the building. The owners defaulted,
prompting the foreclosure of the mortgage.
The respondent court ruled that the REMs
were void, holding that a building may not be
mortgaged separately from the land on which
it is built.
HELD: The 1
st
REM, executed before title of
land was transferred to the mortgagor, is
valid. Article 415 mentions buildings
separate from land; this means that the
building by itself is an immovable and may be
the subject of a REM.
The 2
nd
REM, executed after title was
transferred, is void for being violative of the
Public Land Act.
To be considered as real property by
destination, the machinery etc. must be
( 1) essential and principal elements of
the industry and ( 2) the industry must be
carried out in a building or piece of land
Mindanao Bus Co. v. City Assessor
The City Assessor sought to impose realty tax
on certain MAINTENANCE AND REPAIR
EQUIPMENT of MBC.
MBC opposed, contending that the items were
not real property; the items in question are
movable.
HELD: The items are personal property. They
are not immobilized by destination or purpose
as contended by the City Assessor. To be
considered as real property by destination,
they must be (1) essential and principal
elements of the industry and (2) the industry
must be carried out in a building or piece of
land.
In this case, the items are only incidentals to
the transport business and the business is
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carried on not in a building or piece of land
but around the streets of Mindanao.
A stipulation in the lease agreement to
treat the real property as personal is
binding upon the parties. The parties are
estopped from claiming otherwise.
Sergs Products v. PCI Leasing
PCI filed a complaint for a sum of money and
an application for a writ of replevin on the
chocolate manufacturing equipment of Sergs.
Sergs claims property is real and not subject
to a writ of seizure.
HELD: The property is real under Article 415
BUT it was stipulated in the lease agreement
that they would be treated as personal. Sergs
is ESTOPPED from claiming that they are real
in character.
Steel electric towers are personal
property provided they can be removed
without substantial breakage or
deterioration.
Board of Assessment Appeals v. Meralco
The City Assessor sought to impose realty tax
on steel towers of MERALCO. The taxes were
paid under protest, MERALCO contending that
the towers were exempt from taxation and
that they were personal and not real property.
HELD: The towers are personal property.
They are not buildings adhered to the soil
(415-1); they are not attached to an
immovable in a fixed manner and they can be
separated without substantial damage or
deterioration (3) and they are not
machineries intended for works on the land
(5).
3.
Article 416. The following things are
deemed to be personal property:
(1) Those movables susceptible of
appropriation which are not included in the
preceding article;
(2) Real property which by any special
provision of law is considered as personalty;
(3) Forces of nature which are brought under
control by science; and
(4) In general, all things which can be
transported from place to place without
impairment of the real property to which
they are fixed.
For purposes of the Chattel Mortgage
Law, ungathered products have the
nature of personal property and may be
attached and executed upon.
Sibal v. Valdez
Sibals sugarcane crops were attached and
sold to Valdez in order to satisfy a judgment
debt. The lot on which the crops were located
had been previously attached and sold to
another creditor, Macondray. Valdez later
purchased the land from Macondray.
Sibal sought to redeem the sugarcane from
Valdez on the assumption that it was real
property (growing fruits attached to the land).
Plaintiff contends that the sugarcane is
personal property and not subject to
redemption.
HELD: Although the sugarcane may be
considered as growing fruits and is ordinarily
real property, for the purposes of the Chattel
Mortgage Law, the crops must be regarded as
personal property. This is because the right to
the growing crops given to the defendant
mobilized the crops by anticipation. It is as if
there was a gathering in advance rendering
the crop movable.
Electricity may be appropriated; it can be
the obj ect of theft.
US v. Carlos
Accused was convicted for the theft of electric
current by means of a jumper. Accused
contends that electricity is intangible and
cannot be the object of theft.
HELD: Accused is guilty of theft.
The Revised Penal Code provides that
personal property is the subject of theft.
Electricity is a valuable article of merchandise
and can be bought and sold like any other
personal property.
The true test of what is a proper subject of
larceny is not whether the subject is corporeal
or incorporeal, but whether it is capable of
appropriation by another than the owner.
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Article 417. The following are also
considered as personal property:
(1) Obligations and actions which have for
their object movables or demandable sums;
and
(2) Shares of stock of agricultural, commercial,
and industrial entities, although they may
have real estate.
(1) Examples are: the right to recover
stolen property and promissory notes
as these involve movables or
demandable sums
(2) Even if the sole property of the
corporation is real property, a share in
such corporation is personal property.
In fact, all shares in all juridical persons
are considered personal.
The property right of shares of stock
can only be enforced or exercised where
the corporation is organized or has its
place of business.
(3) Money is always personal property.
Money is not merchandise when in
domestic circulation; it becomes
merchandise when it is exported or
taken out of domestic circulation.
Article 418. Movable property is either
consumable or non-consumable.
To the first class belong those movables which
cannot be used in a manner appropriate to
their nature without their being consumed;
to the second class belong all others.
Classifications of movable property
(1) According to NATURE:
a. Consumable cannot be used
according to its nature without
being consumed
b. Non-consumable any other
kind of movable property
(2) According to INTENTION:
a. Fungible Mutuum - borrowed
for consumption and equivalent
property will be returned
b. Non-fungible Commodatum -
exact same property will be
returned.
B. Property in Relation to the Person to
whom it Belongs
4.
Article 419. Property is either of public
dominion or of private ownership.
Article 420. The following things are
property of public dominion:
(1) Those intended for public use, such as
roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks,
shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without
being for public use, and are intended for
some public service or for the development
of the national wealth.
Public dominion (def.):
a) ownership by the State in that the State
has control and administration; or
b) ownership by the public in general.
Three Kinds Of Property Of Public
Dominion:
1) For public use roads, canals for use
by everyone
2) For public service government
buildings and vehicles for use by
authorized persons
3) For the development of national
wealth natural resources.
Canals constructed by private persons
within private lands are of private
ownership.
Santos v. Moreno
The Ayalas originally constructed the canals
to facilitate the operations of their nipa
plantation.
The Ayalas later transformed their nipa
plantation into several fishponds by
constructing dams or dikes to block the flow
of water in canals located in the plantation.
This property was later sold to Santos, who
further developed the property for
aquaculture.
Local residents sought the destruction of the
dikes stating that their construction prevented
them from using the canals for transportation,
caused flooding, and deprived them of fishing
grounds.
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ISSUE: whether the canals are of public
dominion or private ownership.
HELD: The canals are private; their
destruction may not be ordered.
Article 420 states that canals constructed by
the State are of public ownership; conversely,
canals constructed by private persons within
private lands are of private ownership.
Art. 421. All other property of the State,
which is not of the character stated in the
preceding article, is patrimonial property.
(340a)
Art. 422. Property of public dominion, when
no longer intended for public use or for
public service, shall form part of the
patrimonial property of the State. (341a)
Conversion of a propertys character
from public to patrimonial requires a
formal declaration of abandonment of
the public character.
Laurel v. Garcia
The government sought to sell a property
located in Japan which it acquired through a
reparation agreement with the Japanese
government. The property in question was
given with the intention of its being the site of
the Philippine Embassy; it was given with the
understanding that it would be used for the
government sector.
ISSUE: Whether the property is public or
patrimonial.
Respondents claim that the property is
governed not by the Civil Code but by
Japanese law and assuming that the CC were
applicable, the government has implicitly
abandoned the public use of the property and
caused it to become patrimonial by
transferring the embassy to another location
and other executive acts.
HELD: The property is public its ownership
is collective and resides in the sovereign
people. It is outside the commerce of man.
The property is of public dominion and
intended for public service under Article 420
of the Civil Code.
This is dictated by the terms of the
Reparations Agreement and the
corresponding contract of procurement which
bind both the Philippine government and the
Japanese government. Being so, it cannot be
alienated.
Contrary to respondents claim, conversion of
a propertys character from public to
patrimonial requires a formal declaration of
abandonment of the public character.
*Even if the property were patrimonial, there
could be no sale as there is no law authorizing
the same.
Public plazas and streets are of public
character and may not be leased out by
the municipality.
Municipality of Cavite v. Rojas
The municipal council of Cavite withdrew from
public use and leased to Rojas a portion of the
town plaza. The provincial fiscal later filed a
complaint alleging that the property leased
was of public character and therefore the
contract was null and void.
HELD: The contract of lease is ultra vires and
null and void, the municipality never having
had authority to exclude it from public use
and lease it out.
Property belonging to the public domain is
outside the commerce of man and cannot be
the object of any contract.
The defendant must return the land and the
municipality must reimburse rentals paid.
*The book says that Rojas received no benefit
but the facts show that occupation was
enjoyed and a house was built. Compare to
Sanchez v. Asingan.
Property owned by the State which is not
intended for public use or public service
is patrimonial.
There is no reimbursement if lessee
derived substantial benefit from the use
of said property.
Sanchez v. Mun. of Asingan
Petitioner occupied a parcel of land owned by
the municipality, with the implied consent of
the latter, and built buildings of light
materials rent was paid.
When a new set of officials took over, the
council gave notice to petitioner to vacate the
land within 5 months.
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Petitioner refused and filed for prohibition
stating that the land belonged to the province
and the municipality had no standing to seek
their ejectment and in case they should be
ejected, prayed for reimbursement, citing the
Rojas case.
ISSUE: Whether the land is public or
patrimonial.
HELD: The land is patrimonial property of the
municipality. It was not for public use not was
it for public service.
There is to be no reimbursement. Unlike the
Rojas case, the land here is not of public
character. The implied lease agreement is
therefore valid and may be terminated upon
notice.
Assuming that the property is public, there
can still be no reimbursement as petitioner
derived substantial benefit from the use of
said property.
INSERT REPUBLIC V. CA HERE
5.
Art. 423. The property of provinces, cities,
and municipalities is divided into property
for public use and patrimonial property.
Art. 424. Property for public use, in the
provinces, cities, and municipalities, consist
of the provincial roads, city streets,
municipal streets, the squares, fountains,
public waters, promenades, and public
works for public service paid for by said
provinces, cities, or municipalities.
All other property possessed by any of them is
patrimonial and shall be governed by this
Code, without prejudice to the provisions of
special laws.
Where now do properties for public service
and properties for the development of
national wealth fall?
Public service depends on who pays for the
service. If paid for by the political subdivision,
public; if for profit, patrimonial.
National wealth still property for public use
under the regalian doctrine.
Property of a political subdivision is
public only if it is devoted to public use.
Examples of property for public use
being streets, promenades, fountains,
etc.
City of Cebu v. NAWASA
The City of Cebu obtained a loan which was to
be paid with its own funds. Part of the
proceeds of this loan was used to fund the
construction of the Citys sewage system.
NAWASA sought to expropriate the sewage
system. This was opposed with the arguments
that there was no payment of just
compensation; NAWASA offered unliquidated
assets and liabilities.
NAWASA averred, as an alternative course of
action, that the property is one for public use
and under the control of the legislature.
ISSUE: Whether the property is patrimonial
property of the city or property for public use.
HELD: The property is patrimonial and not
subject to legislative control. It is property
of the city, purchased with private funds and
not devoted to public use (it is for profit). It is
therefore patrimonial under the Civil Code.
Nor can the system be considered public
works for public service under Article 424
because such classification is qualified by
ejusdem generis; it must be of the same
character as the preceding items.
What if a courthouse is constructed with
municipal funds?
clarify
City constructs public market patrimonial
Cemetery public use
Under the Law of Municipal Corporations,
it is enough that the property be devoted
for governmental purposes for it to be
classified as public.
Province of Zamboanga v. City of
Zamboanga
Zamboanga City ceased to become the
provincial capital and a law was passed
declaring the provinces property located
within the city to be transferred to the city
free of charge. The properties were the capital
site, hospitals, playgrounds, and schools.
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ISSUE: Whether Congress can transfer the
properties to the City without compensating
the province.
HELD: Yes; the properties are public and
subject to the absolute control of Congress.
If the province owns the properties in it public
and governmental capacity, the property is
public and Congress has absolute control over
it.
The character of the property depends on
the use to which it is devoted. The
problem is which applies, Civil Code or
Law of Municipal Corporations?
Under the CC, a property is public if it is for
the free and indiscriminate use of everyone.
Under municipal law, it is sufficient that the
property be devoted to governmental
purposes.
In this case, applying the CC, the properties
are not for public use but merely for public
service.
However, Municipal law applies because the
controversy is more municipal than civil and
the properties are needed for the
performance of governmental functions. The
LMC provides that a property is public if it is
devoted to public use.
If the CC classification is used, consequences
are dire (acquisition through adverse
possession).
Also the LMC is a special law. The CC itself
provides that its provisions apply without
prejudice to special laws.
The buildings on the lots are also public
because accessory follows the principal.
How do we resolve what determines character?
Salas v. Jarencio: How the property was
purchased public/private funds
Or
Civil code: What use the property is devoted to
free and indiscriminate use of everyone or
otherwise
Or
LMC: Property is public if it is exclusively
devoted to public service.
--
Public properties are exempt from
execution because of their necessity for
governmental functions.
Viuda de Tan Toco v. Municipal Council of
Iloilo
Iloilo was sentenced to pay Tan Toco
compensation for properties taken from her
and used for street-widening. Because Iloilo
had no money, Tan Toco caused a writ of
execution to be issued against municipal
property: street sprinkling trucks, police cars,
police stations, and markets.
Iloilos defense is that the properties are
public and exempt from execution.
HELD: The properties are public and exempt
from execution.
The vehicles and the police station all serve
governmental functions. The market, though
not purely public is also exempt because it
would allow a third party to the franchise
agreement to assume control without the
approval of the administration.
A town plaza loses its public character
when the town ceases using it as such
and subj ects it to patrimonial use.
Municipality of Oas v. Roa
The Municipality of Oas sought to recover land
from Roa claiming it was part of the towns
public square. Roa claims he is the owner of
the property. He had erected a substantial
building on the property without opposition
from the municipality.
HELD: The land belongs to the municipality
as shown by several town resolutions signed
by Roa himself. It is patrimonial because the
town had long since ceased using it as a plaza
and had started using it as storage space.
Although the property is now patrimonial and
susceptible of ownership, Roa has failed to
show any of the modes of acquiring
ownership.
Since both parties are in bad faith (Roas
construction despite knowledge; tolerance by
the municipality), they shall be treated as
though they are both in good faith.
The town may sell the land to Roa or Roa may
sell the improvements to Roa.
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Art. 425. Property of private ownership,
besides the patrimonial property of the
State, provinces, cities, and municipalities,
consists of all property belonging to private
persons, either individually or collectively.
(345a)
Art. 426. Whenever by provision of the law,
or an individual declaration, the expression
"immovable things or property," or
"movable things or property," is used, it
shall be deemed to include, respectively,
the things enumerated in Chapter 1 and
Chapter 2.
Whenever the word "muebles," or "furniture,"
is used alone, it shall not be deemed to
include money, credits, commercial
securities, stocks and bonds, jewelry,
scientific or artistic collections, books,
medals, arms, clothing, horses or carriages
and their accessories, grains, liquids and
merchandise, or other things which do not
have as their principal object the furnishing
or ornamenting of a building, except where
from the context of the law, or the
individual declaration, the contrary clearly
appears. (346a)
II. Ownership
A. In General
6.
Art. 427. Ownership may be exercised over
things or rights.
Ownership (def.) Ownership is the
independent and general right of a person to
control a thing particularly in his possession,
enjoyment, disposition, and recovery, subject
to no restrictions except those imposed by the
state or private persons, without prejudice to
the provisions of the law.
Independent stands by itself and gives you
the right to control the property
General - possession, enjoyment, disposition,
and recovery
Kinds of Ownership (not discussed)
(a) Full ownership this includes all
the rights of an owner.
(b) Naked ownership this is
ownership where the right to
use and the fruits has been
denied.
i. Naked ownership plus
usufruct equals full
ownership.
ii. Usufruct equals full
ownership minus naked
ownership.
iii. Naked ownership equals
full ownership minus
usufruct.
(c) Sole ownership where the
ownership is vested in only one
person.
(d) Co-ownership (or Tenancy in
Common) when the
ownership is vested in two or
more owners.
Art. 428. The owner has the right to enjoy
and dispose of a thing, without other
limitations than those established by law.
The owner has also a right of action against
the holder and possessor of the thing in
order to recover it.
The rights of an owner:
1. Right to Enjoy
a. Right to Possess
i. The right to hold a thing or
to enjoy a right. It means
that the thing or right is
subject to control of my will.
b. Right to Use
i. The right to exclude any
person, as a rule, from the
enjoyment and disposal
thereof.
1. Reasonable force
may be used to
prevent or repel
physical invasion.
2. But to recover, no
force, but legal
means must be
used.
c. Right to the Fruits
i. What
2. Right to Dispose
a. Right to Consume, Destroy, or
Abuse
b. Right To Encumber Or Alienate
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3. Right to Recover
Actions to Recover Property:
1. Recovery of Personal Property
a. Replevin
2. Recovery of Real Property
a. Forcible Entry (MTC)
i. WHAT? This is a
summary action to recover
physical possession of real
property when a person
originally in possession was
deprived thereof by FISTS
(force, intimidation, stealth,
threats, strategy)
Possession is unlawful from
the beginning.
ii. WHEN? Must be brought
within one year from
dispossession; but in case
of strategy or stealth, the
period should be counted
from discovery.
iii. ISSUE? The issue
involved is mere physical
possession and not juridical
possession nor ownership.
b. Unlawful Detainer (MTC)
i. WHAT? This is the action
that must be brought when
possession by a landlord,
vendor, vendee or other
person of any land or
building is being unlawfully
withheld after the expiration
or termination of the right
to hold possession by virtue
of any contract.
Possession is lawful form
the beginning.
ii. WHEN? Must be brought
within one year from the
time the possession
becomes unlawful.
1. One year from
expiration of lease;
or
2. If the reason is non-
payment of rent,
one year from
demand to vacate.
iii. ISSUE? The issue
involved is mere physical
possession and not juridical
possession nor ownership.
**Difference between unlawful detainer and
forcible entry: UDpossession of other is
initially lawful; FEpossession is unlawful from
the outset
c. Accion Publiciana (plenary
action)
i. WHAT? This is the action
for the recovery of the
better right to possess.
ii. WHEN? Must be brought
within ten years.
iii. ISSUE? The issue
involved is who has a better
right to posses; de jure and
not de facto possession is
the issue here.
d. Accion Reivindicatoria
i. WHAT? This is an action
to recover ownership over
real property.
ii. WHEN? This must be
brought within 10/30 years
depending on whether the
other party seeks to obtain
ownership through
ordinary/extraordinary
prescription.
iii. ISSUE? The issue
involved is one of
ownership.
Art. 429. The owner or lawful possessor of a
thing has the right to exclude any person
from the enjoyment and disposal thereof.
For this purpose, he may use such force as
may be reasonably necessary to repel or
prevent an actual or threatened unlawful
physical invasion or usurpation of his
property.
Art. 430. Every owner may enclose or fence
his land or tenements by means of walls,
ditches, live or dead hedges, or by any
other means without detriment to
servitudes constituted thereon.
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Art. 431. The owner of a thing cannot make
use thereof in such manner as to injure the
rights of a third person.
Art. 432. The owner of a thing has no right
to prohibit the interference of another with
the same, if the interference is necessary to
avert an imminent danger and the
threatened damage, compared to the
damage arising to the owner from the
interference, is much greater. The owner
may demand from the person benefited
indemnity for the damage to him.
7.
Art. 433. Actual possession under claim of
ownership raises disputable presumption of
ownership. The true owner must resort to
judicial process for the recovery of the
property.
Art. 434. In an action to recover, the
property must be identified, and the
plaintiff must rely on the strength of his
title and not on the weakness of the
defendant's claim.
Requisites In An Action To Recover:
1. Property must be identified
a. WHY? Burden of proof lies on the
party who asserts the affirmative of
an issue.
The description should be so
definite that an officer of the court
might ho to the locality where the
land is situated and definitely locate
it.
Is a technical description required
or will a statement of boundaries
suffice?
If in a developed area, land will be
sufficiently subdivided.
2. Reliance on title of the plaintiff and not on
the weakness of the defenses claim.
a. Best proof is a Torrens certificate.
b. Tax receipts, tax declarations are
only prima facie evidence of
ownership; it is rebuttable.
Acquisitive prescription: ( 1) GOOD FAI TH
10 years with j ust title and adverse
possession; ( 2) BAD FAI TH 30 years in
adverse possession.
Heirs of Miranda v. CA (skipped)
In 1957, the son of Miranda, acting as
administrator of the estate, sold the property
in issue to private respondent, Agerico. The
property was titled in the name of Agericos
daughter, Charito; Agerico has been in
possession and cultivation since then.
In 1991, the heirs of Miranda entered the
property and prevented Agerico from
cultivating it; an action for forcible entry was
brought and the heirs of Miranda were
ordered to vacate the land.
The heirs filed a complaint for declaration of
nullity of the title.
ISSUE: Whether the property belongs to
Agerico/Charito or to the heirs of Miranda.
HELD: The property belongs to
Agerico/Charito. The action of the heirs has
been barred by prescription.
Ownership over real property is acquired by
acquisitive prescription through adverse
possession with title and in good faith for ten
years.
Without need of title or of good faith,
ownership and other real rights over
immovables is acquired through uninterrupted
adverse possession for 30 years.
In this case, not only could the private
respondents claim acquisitive prescription in
good faith (they had title and possessed the
property in good faith for well over ten years),
they could also claim ownership through
extraordinary prescription by possessing the
property in the concept of owner for thirty
years.
I t is a well settled rule that a title, once
registered, cannot be defeated even by
adverse, open, and notorious possession.
Heirs of Vencilao v. CA (skipped)
The heirs of Vencilao claim that they (and
prior to them, their father) have been in
adverse possession of the property in issue
for over thirty years. They present tax
receipts and CARP documents to support their
claim.
cmt Page 10 of 42 3/7/2004
The Gepalagos (private respondents) claim
ownership of the land based on the TCT. They
claim to have acquired the land in a public
bidding following its foreclosure by PNB.
ISSUE: Who has a better right to the land: a
claimant by acquisitive prescription or a
claimant by deed of sale recorded in the TCT
of the vendor/mortgagee as highest bidder in
a foreclosure sale?
HELD: The titled owner has a better right.
It is a well settled rule that a title, once
registered, cannot be defeated even by
adverse, open, and notorious possession.
When the TCT is in the name of the seller
when the land is sold, the buyer has a right to
rely on what appears on the face of the
document. If there is nothing that indicates
any irregularity, as is the case here, he in not
expected to make further investigations or
inquiries.
The only exception is when an irregularity
appears and the buyer chooses to ignore the
same; in this case, they are no longer
innocent purchasers for value.
On the other hand, the heirs of Vencilao are
estopped from claiming ownership to the land
due to their silence (1) when the property was
mortgaged; (2) foreclosed; and (3) sold.
Art. 435. No person shall be deprived of his
property except by competent authority and
for public use and always upon payment of
just compensation.
Should this requirement be not first complied
with, the courts shall protect and, in a
proper case, restore the owner in his
possession.
Art. 436. When any property is condemned or
seized by competent authority in the
interest of health, safety or security, the
owner thereof shall not be entitled to
compensation, unless he can show that
such condemnation or seizure is unjustified.
Art. 437. * The owner of a parcel of land is
the owner of its surface and of everything
under it, and he can construct thereon any
works or make any plantations and
excavations which he may deem proper,
without detriment to servitudes and subject
to special laws and ordinances. He cannot
complain of the reasonable requirements of
aerial navigation.
Surface Right of a Land Owner is subject
to:
1. Servitudes or easements;
2. Special Laws (mining law);
3. ordinances;
4. reasonable requirements of aerial
navigation;
5. Principles on human relations and the
prevention of injury to the rights of
third persons (unnecessary obstruction
of the light and view of a neighbor).
Art. 438. * Hidden treasure belongs to the
owner of the land, building, or other
property on which it is found.
Nevertheless, when the discovery is made on
the property of another, or of the State or
any of its subdivisions, and by chance, one-
half thereof shall be allowed to the finder. If
the finder is a trespasser, he shall not be
entitled to any share of the treasure.
If the things found be of interest to science or
the arts, the State may acquire them at
their just price, which shall be divided in
conformity with the rule stated.
Art. 439. *(technical description) By
treasure is understood, for legal purposes,
any hidden and unknown deposit of money,
jewelry, or other precious objects, the
lawful ownership of which does not appear.
Requisites:
1. Hidden and unknown deposit (finding it
must be a discovery;
2. Consists of money, jewelry, or other
precious objects;
3. Their lawful ownership does not appear.
Meaning of other precious objects:
1. Restricted by ejusdem generis to mean
objects of the same class as money and
jewelry.
2. How about money found in a book
loaned from the library; who owns the
money? School.
Finding in others property; requisites:
1. It must be by chance
cmt Page 11 of 42 3/7/2004
a. What does by chance mean?
SC/Paras by chance means by
good luck.
2. Finder must not be a trespasser.
Article 440. The ownership of property
gives the right by accession to everything
which is produced thereby, or which is
incorporated or attached thereto, either
naturally or artificially. [OPRAE-PIANA]
*What is accession?
It is the right of a property owner to everything
which is:
a) produced thereby (accession discreta);
or
b) incorporated or attached thereto, either
naturally or artificially (accession
continua).
What are the classifications of accession?
A. Accession to the fruits (discreta)
a. Natural fruits
b. Industrial fruits
c. Civil fruits
B. Accession by attachment or
incorporation (continua)
a. Real property
i. Accession industrial
1. building
2. planting
3. sowing
ii. Accession natural
1. alluvium
2. avulsion
3. change of
course of rivers
4. formation of
islands
b. Personal property
i. Adjunction or
conjunction
1. engrafment
2. attachment
3. weaving
4. painting
5. writing
ii. mixture (confusion
liquids; commixtion
solids)
iii. specification
Is accession a mode of acquiring
ownership?
No, the only modes of acquiring ownership are:
[STOPID-Love]
a) succession
b) tradition as a consequence of certain
contracts
c) occupation
d) prescription
e) intellectual creation
f) donation
g) law
*What are the reasons behind accession?
a) As to the fruits, justice, pure and
simple, because the one who owns the
thing should own its fruits.
b) As to incorporation and attachment,
the owner of the principal should own
the attachment; and economic
convenience (better to have one owner
than two)
Article 441. To the owner belongs:
(1)The natural fruits;
(2)The industrial fruits;
(3)The civil fruits.
Article 442. Natural fruits are the
spontaneous products of the soil, and the
young and other products of animals.
Industrial fruits are those produced by lands of
any kind through cultivation or labor.
Civil fruits are the rents of building, the price
of leases of lands and other property and the
amount of perpetual or life annuities or other
similar income. [SPS-YOPA, PLAK-CL, RB-
PLLOP-PLAOSI]
*When does the owner of the land NOT
own the fruits? [PAUL]
cmt Page 12 of 42 3/7/2004
a) P ossessor of the land receives the fruits
in good faith;
b) A ntichresis, where the creditor gets the
fruits.
c) U sufructuary (right to enjoy the fruits);
d) L essee gets the natural and industrial
fruits (owner gets civil fruits);
*To whom does the offspring of an animal
belong when the male and female belong
to different owners?
The offspring belongs to the mother because,
(1) the paternity is uncertain and (2) during
pregnancy, the female is useless and her owner
bears the expenses.
But if the female is leased, the lessee owns the
offspring, because the lease is onerous (if it
were commodatum, the offspring would belong
to the owner of the female).
A bonus received as compensation for
the risk taken by a mortgagor who
received no value from the loan is not
considered a civil fruit.
Bachrach Motor Co. v. Talisay-Silay
Milling Company.
Talisay obtained a loan from PNB with a REM
provided by one of its planters, Ledesma. To
compensate Ledesma for the accommodation,
Talisay granted him a bonus whose value
was computed as a percentage of the
balance of the loan.
Bachrach, as a creditor of Ledesma, laid a
claim to the bonus received by the latter. On
the other hand, PNB claims that it owns the
fruits, because under Article 2127, the
mortgage extends to the civil fruits of the
property.
ISSUE: Whether the bonus is a civil fruit,
thereby giving PNB a preferential right over it.
HELD: The bonus is not a civil fruit. Civil
fruits are the rents of the buildings, leases of
lands, and income from life annuities, or other
similar sources of income.
Though it is possible to consider the bonus as
income, it is not similar income to the items
in the preceding enumeration. The common
denominator, which is absent in the bonus, is
derivation of the income from the land itself.
In this case, the bonus is not based on the
value of the land but rather on the
amount of the outstanding obligation of
Talisay. It is clearly meant to be
compensation for the risk assumed by the
owner, Ledesma.
Article 443. He who receives the fruits has
the obligation to pay the expenses made by
a third person in their production,
gathering, and preservation.
He who receives the fruits is?
the owner of the land.
To whom does this provision apply?
Article 443 applies only to a planter/possessor
in bad faith. The rule is that if the planter is in
good faith, he is entitled to the fruits already
received.
If the fruits have not yet been gathered?
Article 448 applies if the planter or sower is in
good faith, Article 449 if he is in bad faith.
What are the kinds of expenses subject to
reimbursement?
a. They must be for production,
gathering, or preservation.
Improvements are not included.
b. They must be necessary, and not
excessive. They must be those
normally required by the crop.
What if the expenses exceed the value of
the product, is the planter in bad faith still
entitled to reimbursement?
Only if the owner still requires delivery of the
fruits.
Article 444. Only such as are manifest or
born are considered as natural or industrial
fruits.
*When can we say that the fruit is in
existence?
It depends on the type of fruit:
a. Annual (must be planted every
year/must re-plant after harvest;
rice, wheat, corn) deemed
manifest the moment their
seedlings appear. SOWING.
b. Perennial (only planted once and
bear fruit for several seasons;
mango and coconut trees)
deemed to exist only when they
actually appear. PLANTING.
cmt Page 13 of 42 3/7/2004
*When are animal young considered as
existing?
They are considered existing even if still in the
maternal womb. They should be considered
existing only at the commencement of the
maximum ordinary period for gestation.
*When are civil fruits deemed to exist;
how about natural fruits?
a. Civil fruits accrue daily and are
considered personal property and
may be pro-rated.
b. Natural and industrial fruits, while
still growing, are considered as real
property; ordinarily, they cannot be
pro-rated.
Ex. House rented for 30,000/month. Apply now
the principle that civil fruits accrue daily.
Every day, the property produces 1,000
If B owned the property from 1-5 and B owned
the property from 16-30, A is entitled to 15K
and B is entitled to 15K. If A is paid 30K at the
beginning of the month, he should deliver half
of that to B. This is because civil fruits accrue
DAILY.
Article 445. Whatever is built, planted or
sown on the land of another and the
improvements or repairs made thereon,
belong to the owner of the land, subject to
the provisions of the following articles.
* What are the basic principles of
accession continua (accession industrial)?
a. Accessory follows the principal
b. With certain exceptions, it should
be impossible to separate the
principal and accessory without
causing substantial damage.
c. He who is in good faith may be held
responsible but not penalized.
d. He who is in bad faith may be
penalized.
e. When both are in bad faith, they
shall be treated as if they were in
good faith.
f. No one shall unjustly enrich himself
at the expense of another.
Article 446. All works, sowing, and planting
are presumed made by the owner and at
his expense, unless the contrary is proved.
What are the presumptions of Article 446?
a. That all works, sowing and planting
are made by the owner;
b. At his own expense.
Article 447. The owner of the land who
makes thereon, personally or through
another, plantings, constructions or works
with the materials of another, shall pay
their value; and, if he acted in bad faith, he
shall also be obliged to the reparation of
damages. The owner of the materials shall
have the right to remove them only in case
he can do so without injury to the work
constructed, or without the plantings,
constructions or works being destroyed.
However, if the landowner acted in bad
faith, the owner of the materials may
remove them in any event, with a right to
be reimbursed for damages.
When is the builder/landowner in good
faith/ bad faith?
When he believed the materials were his
own/knew the materials belonged to another.
When is the owner of the materials in good
faith/bad faith?
When he does not know that his materials were
being used/when he knows and does not object.
Ex. A built house with Bs materials. Both were
in good faith. What are the rights of the
parties? Who calls the shots?
B. B is entitled to remove the materials
provided no damage is caused. If this cannot be
done or if B doesnt want to remove the
materials, A may be compelled to pay for the
materials.
If A is in bad faith, B can remove the materials,
regardless of damage caused or demand
payment, with damages in either case.
If B is in bad faith, A may keep the materials.
There is no indemnity and A may seek for
damages because the materials may be inferior
in quality.
If both are in bad faith, they will be treated as if
they were in good faith.
Article 448. The owner of the land on
which anything has been built, sown or
cmt Page 14 of 42 3/7/2004
planted in good faith, shall have the right to
appropriate as his own the works, sowing or
planting, after payment of the indemnity
provided in articles 546 and 548, or to
oblige the one who built or planted to pay
the price of the land, and the one who
sowed, the proper rent.
However, the builder or planter cannot be
obliged to buy the land if its value is
considerable more than that of the building
or trees. In such case, he shall pay
reasonable rent, if the owner of the land
does not choose to appropriate the building
or trees after proper indemnity. The parties
shall agree upon the terms of the lease and
in case of disagreement, the court shall fix
the terms thereof.
What are the rules on good faith in Article
448?
Both must be in good faith.
Who is given the choice and why? What
are the choices?
The owner must be given the choice because
the accessory follows the principal:
a) He may appropriate what has been
built, planted, or sown.
b) He may compel the builder or planter to
buy the land and the sower to pay
rents.
These are the only choices he has. He cannot
compel removal of the improvement. However,
if he opts to sell the portion to the builder and
the builder fails to pay, he may demolish the
structure.
What are the indemnities to be given to
the builder in good faith?
1. Necessary expenses
a. Those made for the
preservation of the thing
b. those without which the thing
would deteriorate or be lost
c. those incurred for cultivation,
production, and upkeep
d. Repairs required by the wear
and tear due to the natural use
of the thing.
2. Useful expenses
a. Those that augment the income
of the thing upon which they
are spent or add value to the
property.
3. Luxurious expenses
a. These are reimbursable only if
the landowner decides to
appropriate them.
Can the owner of the land choose to
appropriate and then later change his
mind?
No, the choice is irrevocable. Once the choice
has been made, in case it is the option to
purchase the improvement, the duty is
monetary and the landowners properties may
be levied to satisfy the debt.
What if the owner refuses to make a
choice?
There are no remedies except those provided
by the law in Article 448.
In this case, I THINK that the builder in good
faith should ask the court to determine a
reasonable amount of rent and deposit the
same regularly with the court.
What if the owner chooses to appropriate
the building, what is his obligation?
The landowner must now indemnify the builder
for the value of the building.
What if after choosing to appropriate the
building, the landowner fails to pay?
The builder has the right to occupy the building
up to the date of payment. He has the right of
retention until payment is made.
What if the owner above allows the builder
to remain but charges rentals for
possession of the land?
No rentals may be charged. The landowner is
not the owner of the property until
indemnification is made.
If the landowner chooses to compel the
builder to buy the land, can the builder be
obliged to purchase the land?
Generally, yes, unless the value of the land is
considerably more than the value of the
building. However if the value of the land is not
considerably more, the builder may be
compelled.
If this is the case, they can agree on terms of
lease, and in case of disagreement, the courts
shall fix the same.
cmt Page 15 of 42 3/7/2004
If the builder is the son of the landowner
and permission is granted, the builder is in
good faith.
If the land is co-owned, and the land is
partitioned, with part of one house
encroaching on the others partition.
In this case, Article 448 applies. Even though
the construction wasnt on the land of another,
the subsequent partition caused 448 to apply
(Del Ocampo v. Abesia). What should the
landowner choose? Sell the small portion of the
land because what will be the use of a portion
of a building?
When the structures built in good faith
on the land of another are of a temporary
character, Article 448 applies, but only
as to indemnity. The landowner is not
compelled to choose between
appropriating the property and selling
the land.
Alviola v. CA
Alviola occupied Tinagans land and built a
copra drier and put up a store where they
engaged in copra trade; this was done in bad
faith but with the tolerance of Tinagan.
Several years later, the heirs of Tinagan filed
a complaint for recovery of possession against
Alviola. Alviola claims that the copra dryer
and store are permanent structures (hollow-
block walls and cement floor) and that 448
should apply.
ISSUE: Whether 448 should apply.
HELD: 448 should apply.
Since both parties were in bad faith, they will
be treated as if they were in good faith for
purposes of indemnity and Article 448 will
apply: the builder of the structures will pay
rent until the structures are dismantled.
However, the dryer and store are temporary
structures. They to not have a permanent
character and were not attached to the soil
with an idea of perpetuity.
Since the structures are merely temporary,
the landowner does not have to choose
between buying the structures and selling the
property.
I n computing the amount to be paid to a
builder in good faith, the FMV of the
structure should be used. The right of
retention enj oyed by the builder allows
him to possess the property and its fruits
until he is fully indemnified; he cannot be
made to pay rents.
Pecson v. CA
Pecson owned a commercial lot on which he
built an apartment building. The lot was sold
at public auction because of his failure to pay
realty taxes. Private respondents, Nuguids,
are now the owners of the lot.
When Pecson challenged the auction, it was
held that the apartment building was not
included in the execution because the
certificate of sale was silent on the issue of
the building.
However, in separate suit for recovery of
possession, the owners of the lot caused
judgment to be rendered ordering Pecson to
transfer the building for the original cost of
construction, 53K.
Pecson was also ordered to pay rentals of 21K
per month (the income of the building from its
tenants) until he vacates the premises.
ISSUE: Whether the construction value of the
building should be paid; whether Pecson
should pay rent.
HELD: The fair market value of the building
should be paid. Pecson is entitled to the right
of retention; he enjoys ownership until he is
fully compensated.
The objective of Article 546 is to administer
justice between the parties; in this case, this
can be accomplished by giving Pecson the
present value of the building.
Article 546 also provides that a possessor in
good faith, as Pecson is, may retain the thing
until he is reimbursed for it. It follows that if
Pecson is allowed to retain possession of the
thing, he is also allowed to retain the income
generated by the building and not pay rent.
cmt Page 16 of 42 3/7/2004
Good faith is presumed; good faith on the
part of the builder passes on to his
successor.
The builders right of retention exists
only when the landowner opts to
purchase the property; if the choice is
compulsory sale, the builder must pay
rent until transfer of ownership.
Tecnogas v. CA
Tecnogass property encroached on Uys
property. The CA held that, though Tecnogas
purchased the property with improvements
already constructed, it was in bad faith
because an owner of a property is supposed
to know its metes and bounds.
ISSUE: Whether Article 448 applies.
HELD: Yes. Good faith is presumed and since
there was no showing of bad faith on the part
of the original builder, the character of
possession passes on to the current
possessor.
Unless one is versed in the science of
surveying, no one can determine the
precise extent or location of his property
by merely examining his title.
Article 448 provides that a property owner on
whose property there has been built a
structure by another, in good faith, shall have
the option to appropriate said structure upon
payment of indemnity or sell the portion
encroached upon to the other.
Uy must choose between the two options in
Article 448. Tecnogas should pay rent on the
land until the time Uy communicates his
choice. If the choice is compulsory sale,
Tecnogas should continue paying rent until
transfer of ownership.
The rule: a purchaser need not go
beyond the title. The exception: where
there are facts that would induce a
reasonably prudent man to make further
inquiries.
State Investment House v. CA
Sps. Oreta purchased a house and lot from
SOLID. Before a deed of sale could be
executed, SOLID mortgaged the property to
SIH; it was foreclosed.
ISSUE: Whether the Oretas have a better
right over the property, despite the absence
of a deed of sale (unregistered sale v.
registered mortgage).
HELD: Yes. SOLID no longer had ownership
and free disposal when it mortgaged the
property; it had no authority to do so.
Though the rule is that a purchaser need not
go beyond the four corners of the title, the
exception is where the purchases has
knowledge of facts to induce a prudent man
to inquire into the status of the property.
SIH, knowing the trade of SOLID, should have
made sure there was no adverse claim on the
property before accepting it as a mortgage; it
was not a purchaser in good faith. This
negligence takes the place of registration of
the rights of the Oretas.
Article 448 does not apply to co- owners;
but when the property is partitioned and
the circumstances covered by 448 are
present, it may be applied.
Del Ocampo v. Abesia
Del OCampo and Abeisa are co-owners of the
subject property; 2/3 and 1/3, respectively.
An action for partition was filed and the
partition showed that the house of Abesia
occupied 5 sqm. of the property of Del
Ocampo.
ISSUE: Whether Article 448 can apply to this
case considering the parties are co-owners.
HELD: Article 448 cannot apply to co-
ownership situations. However, because the
property was partitioned, Article 448 now
applies.
Art. 449. He who builds, plants or sows in
bad faith on the land of another, loses what
is built, planted or sown without right to
indemnity.
Art. 450. The owner of the land on which
anything has been built, planted or sown in
bad faith may demand the demolition of the
work, or that the planting or sowing be
removed, in order to replace things in their
former condition at the expense of the
person who built, planted or sowed;
or he may compel the builder or planter to pay
the price of the land, and the sower the
proper rent.
cmt Page 17 of 42 3/7/2004
Art. 451. In the cases of the two preceding
articles, the landowner is entitled to
damages from the builder, planter or sower.
Art. 452. The builder, planter or sower in
bad faith is entitled to reimbursement for
the necessary expenses of preservation of
the land.
Does Article 449 refer to both standing and
gathered crops?
No, Article 449 applies only to standing crops,
not to gathered crops which are governed by
Article 443 (the planter/sower is entitled to
reimbursement for expenses in their gathering,
production, and preservation).
If B builds, in bad faith, a house on As
land (A being in good faith), what are the
alternative rights of A?
1. A may get the house without paying
indemnity.
2. A may demand demolition of the house,
at Bs expense.
3. A may compel B to buy the land,
whether or not the value is considerably
more than that of the house.
A IS ENTITLED TO DAMAGES IN EACH
CASE.
B IS ENTITLED TO REIMBURSEMENT FOR
NECESSARY EXPENSES FOR PRESERVATION
OF THE LAND
What is the rule on reimbursement of a
builder in bad faith?
He must be reimbursed the necessary expenses
for the preservation of the land because the
true owner would have borne such expenses
anyway.
Land taxes, though not technically necessary
expenses, are reimbursable.
A buyer of land under litigation, with
knowledge of the same, is a buyer in bad
faith.
A builder/ planter in bad faith is not
entitled to reimbursement for
improvements.
Lumungo v. Usman
Datu Idiris sold the property in question to
Mrs. Usman; there was partial payment.
Subsequently, both parties expressed their
desire to resolve the contract but Datu Idiris
never returned the money he received.
Mrs. Usman then sold the lots to Angeles, who
planted 3000 coconut trees; Angeles knew of
the ongoing dispute between Idiris and
Usman.
Datu Idiris filed a complaint for recovery of
possession of the land, which Usman did not
contest. Idiris was adjudged to be owner after
which he sold the land to Lumungo.
It has been settled that Lumungo has a
better right to the property and the only
question is
ISSUE: Whether Angeles is entitled to
reimbursement for the trees planted.
HELD: Angeles is NOT entitled to
reimbursement
Article 449 provides that he who plants in bad
faith on the land of another loses the right to
indemnity. Article 452, on the other hand,
provides that the planter in bad faith is
entitled to reimbursement for necessary
expenses for preservation of the land.
In this case, the planter, Angeles, knew of the
dispute over the land when he purchased the
same.
While Article 449 applies, Article 452 does
not, because trees are not necessary
expenses for the preservation of the land;
they are IMPROVEMENTS.
Lumungo may appropriate (for free) the
trees, compel Angeles to pay for the land, or
order their demolition at the expense of
Angeles, with damages in either case.
A successor- in- interest is bound by the
j udgment ( and summons) against his
predecessors. Construction on the
litigated land after such
j udgment/ summons is construction in
bad faith.
Santos v. Mojica
The lot in question was partitioned and
Santoss parents were ordered to pay rents
for the portion they were occupying.
They failed to pay and a writ of execution was
issued ordering them to vacate the lot.
Leonardo, who was not a party to the suit,
owned a house on the lot this house was
reconstructed into a bigger one after his
cmt Page 18 of 42 3/7/2004
parents were summoned in the above
mentioned case.
The judge, Mojica, ordered the house
demolished.
ISSUE: Whether Leonardo Santos is in good
faith, thereby entitling him to the benefits of
Article 448.
HELD: No, Santos is in BAD FAITH, the house
should be demolished. As such, any
improvements he made are lost in favor of
the landowners (3 options).
Though not a party to the suit in which his
parents were ordered to vacate the lot, he
was bound by the judgment because his claim
was under that of his parents; he is their
successor in interest.
A prospective lessee who builds on the
land of a prospective lessor despite the
absence of a valid contract and the
presence of obj ections to the
construction is clearly in bad faith.
Bugatti v. CA
Bugatti approached Sps. Baguilat and inquired
into the lease of their land; they agreed
provided that the contract would contain
certain terms and conditions. In a meeting,
the spouses laid down their terms and
conditions: the lease would be for 9 years at
500 per month; and a building not exceeding
40k would be constructed by Bugatti with the
cost of the building offsetting the lease.
Even before preparing the lease, Bugatti
occupied the property and began
construction.
ISSUE: Whether Bugatti is a builder in good
faith?
HELD: No, Bugatti is a builder in BAD faith.
The determination of Bugattis good or bad
faith rests on whether there was a valid
contract between the parties giving him the
right to occupy and build upon the land
there was none.
It is obvious that the essential element of
consent was absent. There was no meeting of
the minds between the parties.
There is bad faith on Bugattis part because
he had no right to occupy the property, much
less construct a building thereupon. Neither
can Bugatti claim bad faith on the Baguilats
part because they repeatedly gave him verbal
and written orders to cease his construction.
Articles 449-451 apply; the Baguilats have
the option to: (1) take possession of the
building without payment of indemnity; (2)
demand the destruction of the building at
Bugattis expense; or (3) compel Bugatti to
purchase the land whether or not its value
considerably exceeds the value of the
improvement. They are also entitled to
damages equivalent to rentals beginning from
the time of occupation until eventual eviction.
Art. 453. If there was bad faith, not only
on the part of the person who built, planted
or sowed on the land of another, but also
on the part of the owner of such land, the
rights of one and the other shall be the
same as though both had acted in good
faith.
It is understood that there is bad faith on the
part of the landowner whenever the act was
done with his knowledge and without
opposition on his part.
What is the definition of bad faith?
1. Landowner
a. When the act
(building/planting/sowing) was
done with his knowledge and
without opposition on his part.
b. When he buys land knowing that
there has been construction by a
person other than the owner and
who pays only for the land.
2. Builder
a. When building / planting / sowing is
knowingly done on land belonging
to another.
Art. 454. When the landowner acted in bad
faith and the builder, planter or sower
proceeded in good faith, the provisions of
article 447 shall apply.
If B, in good faith, builds on As land, A
being in bad faith, B may:
1. Compel A to pay for the house +
damages; or
2. Remove or destroy the house +
damages.
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Art. 455. If the materials, plants or seeds
belong to a third person who has not acted
in bad faith, the owner of the land shall
answer subsidiarily for their value and only
in the event that the one who made use of
them has no property with which to pay.
This provision shall not apply if the owner
makes use of the right granted by article
450.
If the owner of the materials, plants or seeds
has been paid by the builder, planter or
sower, the latter may demand from the
landowner the value of the materials and
labor.
How many parties are involved in this
provision?
Three:
1. The owner of the materials;
2. The builder;
a. Primarily liable for the cost of
the materials.
3. The landowner.
a. Subsidiarily liable for the cost of
the materials, IF he makes use
of the materials (appropriates
the improvement).
b. Must reimburse the builder who
has paid for the materials IF he
makes use of the materials
(appropriates the
improvement).
c. Not liable if he chooses to
compel the builder to purchase
the land (this is the right
granted by Article 450).
A, in bad faith, uses the materials of B,
who is also in bad faith, to build on Xs
land. What are their rights and
obligations?
(a) A and B shall be treated as if they were
both in good faith, as far as rights
between them are concerned. A must
reimburse B for the cost of the
materials.
(b) In case A cannot pay for the materials,
X is NOT subsidiarily liable because B is
in bad faith as to him.
(c) X is entitled to damages from A and B
and may:
a. Appropriate the improvement;
b. Compel A to purchase the land,
regardless of cost; or
c. Demolish the structure at As
expense.
Art. 456. In the cases regulated in the
preceding articles, good faith does not
necessarily exclude negligence, which gives
right to damages under article 2176.
What is the liability for negligence?
The negligent party must pay for the damage
done.
Art. 457. To the owners of lands adjoining
the banks of rivers belong the accretion
which they gradually receive from the
effects of the current of the waters.
What is accretion?
Accretion is the process whereby the soil is
deposited.
The soil is alluvium.
What are the forms of accretion?
1. Allluvium
2. Avulsion
3. Change of course of rivers
4. Formation of islands
What is alluvium?
Alluvium is the soil deposited or added to the
lands adjoining the banks of rivers, and
gradually received as an effect of the current of
the waters.
What are the essential elements of
alluvium? [CREIG]
(a) The deposit should be gradual and
imperceptible (as a process);
(b) Cause is the current of the river and
not artificial;
(c) Current must be that of a river (if lake,
Spanish Law of Waters applies; if sea,
deposit belongs to the state);
(d) The river must continue to exist; if
not, Article 461 applies;
(e) The increase must be comparatively
little and not such that would increase
he area of the riparian land by 150%.
cmt Page 20 of 42 3/7/2004
It is NOT necessary that:
a. The riparian owner should make
an express act of possession,
the accession being
automatically his the moment
the soil deposit can be seen;
b. The riparian owner has
completely paid for the value of
the riparian estate, as long as
he has already the beneficial or
equitable title.
What are the reasons why alluvium is
granted the riparian owner? [CECEAU]
(a) To compensate him for the loss he
may suffer due to erosion or the
destructive force of the water and
danger from floods;
(b) To compensate him because the
property is subject to encumbrances
and legal easements;
(c) The interests of agriculture require
that the soil be given to the person who
is in the best position to cultivate the
same;
(d) It cannot be said from whom the soil
came, it may as well be given to the
person who can best utilize it.
Binalay v. Manalo
Binalay purchased two parcels of land which
were later consolidated into one title, Lot 307.
The title of one of the parcels of land
indicated that it included a portion which was
submerged annually by the Cagayan River
during the wet months. However, when the
survey to consolidate the lands into 307 was
conducted, the said portion was submerged
and was not included in the consolidated title.
During the wet months, the perennially
submerged portion causes the river to have
two branches, with an island formed in the
middle; the strip of land is denominated as
Lots 821 and 822.
Binalay claims ownership of Lot 821 by
accretion.
ISSUE: Whether Manalo owns Lot 821 by
accretion to the perennially submerged
portion.
HELD: Manalo does not own Lot 821.
There are 3 requisites for accretion: (1) the
deposit should be gradual and imperceptible;
(2) that it be the result of the action of the
river; (3) that the land where accretion takes
place is adjacent to the riverbank.
Applying the rules, the land Manalo claims by
accretion must be adjacent to Lot 307.
However, the 821 is not adjacent to 307 but
to the submerged portion claimed by Manalo.
This submerged potion belongs not to him but
to the State.
The law of waters states that the natural bed
of a river is the highest ground covered by its
waters during the highest floods. Hence, the
submerged portion is part of the river bed
which, under the Civil Code, is property of
public domain; it cannot come under private
ownership.
Ronquillo v. CA
Estero Calubcub changed course due to
dumping by the people living alongside it.
Ronquillo had been occupying the lot since
1945 and Del Rosario in 1960, immediately
after learning of the occupation, ordered him
to vacate the lot.
The Del Rosarios claim ownership over the
dried up bed as riparian owners; Ronquillo
claims the courts have no jurisdiction because
the land is public and subject to the
disposition of the Director of Lands.
ISSUE: Whether the dried up bed is public or
private land.
HELD: The dried up bed was artificially
caused; it does not fall under 307/461. Under
Article 502, it is property of the public
domain. Being of public character, its sale is
dependent on the Director of Lands. Since the
state needs said property for drainage
purposes, it cannot be the subject of a sale.
Heirs of Navarro v. IAC, Heirs of Pascual
Pascual sought to have land registered; which
he claimed the land was an accretion to his
property. Pascuals property is bounded on
the west by the Bulacan River, on the east by
the Talisay River, and on the north by Manila
Bay. The land sought to be registered as
accretion is at the tip of Pascuals property.
Navarro, who had a fishpond lease of the
foreshore with the Bureau of Lands, opposed
Pascuals registration.
cmt Page 21 of 42 3/7/2004
During the pendency of the registration case,
Pascual filed a complaint for ejectment
against Navarro.
The CA held that the land was Pascuals by
accretion and Navarro should turn over to the
latter the portion of the same covered by his
foreshore lease.
ISSUE: Whether the land is Pascuals by
accretion.
HELD: No, the land is property of the public
domain.
There are 3 requisites for accretion: (1) the
deposit should be gradual and imperceptible;
(2) that it be the result of the action of the
river; (3) that the land where accretion takes
place is adjacent to the riverbank.
In this case, 2 of the 3 requisites are were not
met. The accretion was a result not of the
flow of the rivers but of Manila Bay. This is
clear from the fact that the accretion is at the
northern tip of the property, adjacent to
Manila Bay.
Ferrer v. Bautista
Ferrer claims the land in dispute by virtue of
accretion; Bautista claims it by virtue of a free
patent granted by the Director of Lands.
The land is immediately south of Ferrers
property.
ISSUE: Whether the land is Ferrers by
accretion or Bautistas by virtue of a free
patent.
HELD: The land is Ferrers by accretion.
Alluvion gives to the owners of lands adjoining
the banks of rivers or streams any accretion
which is gradually received from the current
of the water. The rationale if to provide some
compensation to the owners because of it
subjection to destructive forces and
easements.
When the accretion was created, its
ownership passed automatically to Ferrer and
the Director of Lands had no authority to
grant a free patent over it.
Art. 458. The owners of estates adjoining
ponds or lagoons do not acquire the land
left dry by the natural decrease of the
waters, or lose that inundated by them in
extraordinary floods.
Definitions:
POND a body of stagnant water without an
outlet, larger than a puddle but smaller than a
lake, or like a body of water with a small outlet.
LAGOON a small lake, ordinarily of fresh
water, and is not very deep, fed by floods, the
hollow bed of which is bounded by the
elevations of the land.
Govt v. Colegio de San Jose
The Govt and Colegio claim ownership over a
parcel of land which is covered by Laguna de
Bay during the wet season. Colegio had title
to land up to the lakeshore.
The State claims the land is part of the
lakeshore and of the public domain.
ISSUE: Whether the is Colegios or the
States.
HELD: The land is Colegios.
Laguna is a lake, which is defined as a body of
water formed in depressions of the earth. It is
ordinarily of fresh water coming from rivers,
brooks, or springs, and connected to the sea
by them.
THE LAND IS NOT PARTY OF LAGUNA DE
BAYS BED.
Undeniably, Laguna de Bay is a lake, and its
bed is public. What then is its bed? The law of
waters defines the bed as level of the water at
the highest ordinary depth. This in turn is
considered as the level during the dry season.
ARTICLE 367/458 DOES NOT APPLY BEC. LDB
IS A LAKE, NOT A LAGOON.
The Govt also relies on Article 367/458 which
provides that the owners of estates adjoining
ponds or lagoons do not acquire the land left
dry by the natural decrease of the waters or
lose the land inundated in extraordinary
floods.
However, LDB is not a lagoon or pond but a
LAKE.
THE LAW OF WATERS PROVIDES THAT LANDS
ACCIDENTALLY INUNDATED BY LAKES,
CREEKS, RIVERS SHALL CONTINUE TO
REMAIN PROPERTY OF THE RESPECTIVE
OWNERS.
Even if the land was formed by accretion, they
still belong to Colegio.
cmt Page 22 of 42 3/7/2004
Art. 459. Whenever the current of a river,
creek or torrent segregates from an estate
on its bank a known portion of land and
transfers it to another estate, the owner of
the land to which the segregated portion
belonged retains the ownership of it,
provided that he removes the same within
two years.
This article refers to avulsion, which is:
1. the process whereby the current of a
river, creek or torrent segregates from
an estate on its bank a know portion of
land and deposits it on another.
2. The removal of a considerable quantity
of earth upon or annexation to the land
of another, suddenly and by the
perceptible action of the water.
Alluvium v. Avulsion
Alluvium Avulsion
Gradual Sudden or abrupt
Soil cannot be
identified
Identifiable
Belongs to owner of
property to which it is
attached
Belongs to owner from
whose property it was
attached
Agustin v. IAC
Agustin owned the property to the east of the
Cagayan river; Melad owned the property to
the west.
Over 49 years, the river gradually shifted
from west to east, reducing Agustins property
and increasing Melads.
In 1968, a big flood occurred, causing the bed
to river to revert to its original course, cutting
into Melads land.
Melad cultivated the land uncovered on the
eastern portion of the river until Agustin
drove them out.
ISSUE: Whether Agustin or Melad owns the
property uncovered by the abrupt reversion of
the river to its original course.
HELD: The land is Melads.
Melad acquired by accretion the land which
was gradually deposited on his property.
This ownership was not lost by the reversion
of the river to its original course; which
reversion cut through Melads property.
Articles 459 and 463 apply to the situation.
459 provides that when land is segregated
and transferred to another estate, the owner
of the segregated portion retains ownership
provided he removes the same within 2 years.
463 provides that when the current of a river
separates a portion of land from an estate,
the owner retains possession.
Article 476. Whenever there is a cloud on
title to real property or any interest therein,
by reason of any instrument, record, claim,
encumbrance or proceeding which is
apparently valid or effective but is in truth
and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to
said title, an action may be brought to
remove such cloud or to quiet such title.
An action may also be brought to prevent a
cloud from being case upon title to real
property or any interest therein.
What kinds of actions are referred to in
Article 476?
1. Remedial; and
2. Preventative.
What cloud is referred to?
The cloud (or doubt) on title exists because:
a) of an instrument or record or claim or
encumbrance or proceeding;
b) which is apparently valid or effective;
c) but is, actually invalid, ineffective,
void, unenforceable, extinguished, or
barred by prescription;
d) and may be prejudicial to thte title.
Where the plaintiff is in possession of the
land, the prescriptive period within
which to quiet title accrues only form the
time the adverse claim is made known.
Faja v. CA
Frial claims that Faja had been illegally
occupying his titled property for 30 years. He
also claims that Fajas right to question the
validity of the title had prescribed, more than
10 having passed since the issuance of the
decree of registration.
Faja claims that Frial never owned the
property and his title was obtained through
fraud. In her counterclaim, she prays that she
be declared lawful owner of the property.
cmt Page 23 of 42 3/7/2004
Summary judgment was rendered in favor of
Frial.
ISSUE: Whether the right of Faja to
question/quiet title had already prescribed.
HELD: The action had not yet prescribed; an
action to quiet title to property in the
possession of plaintiff is imprescriptible.
The prescriptive period began to run against
Faja only from the time she was served with
the complaint giving her notice that the
property she had been occupying was titled in
Frials name.
It is settled that one who is in actual
possession of land claiming to be owner
thereof may wait until his possession is
disturbed or his title is attacked before taking
steps to vindicate his right (or to quiet title).
The reason being that undisturbed possession
gives him a continuing right to seek aid of a
court of equity to ascertain and determine the
nature of the adverse claim of a third party
and its effect on his own title, which right can
be claimed only by one who is in possession.
Where the plaintiff is in possession of the
land, the prescriptive period within
which to quiet title accrues only form the
time the adverse claim is made known.
Viuda de Cabrera v. CA
Teokemian Sr. died, leaving 3 children with a
parcel of land. A deed of sale was signed by
ony two of the children (Felicidad Teokemian
did not sign), conveying the property to Orais.
Orais had the entire property surveyed and
registered, including the 1/3 share of
Felicidad Tokemian.
Felicidad Teokemian remained in continuous
possession of her 1/3 share, later selling it to
Cabrera, who likewise occupied the lot.
Thirty years after the issuance of the title,
Orais filed an action for reconveyance
(quieting of title), praying that the Cabreras
be ordered to vacate the property.
Cabrera claims that there is was an implied
trust created when Orais acquired the
property through fraud.
Orais claims that the action to recover on the
implied trust had already prescribed, more
than ten years having elapsed.
ISSUE: Whether the right of Cabrera to
recover on the implied trust had already
prescribed.
HELD: The action had not yet prescribed;
though an action for reconveyance of property
based on a constructive trust prescribes ten
years from the date of titling of the property,
this applies only when the trustee is not in
possession of the property.
When the trustee is in possession of the land
sought to be reconveyed, the right to
reconveyance does not prescribe because one
who is in actual possession of a piece of land
claiming to be owner thereof may wait until
his possession is disturbed before taking steps
to vindicate his right.
The reason being that undisturbed possession
gives him a continuing right to seek aid of a
court of equity to ascertain and determine the
nature of the adverse claim of a third party
and its effect on his own title, which right can
be claimed only by one who is in possession.
Where the plaintiff is in possession of the
land, the prescriptive period within
which to quiet title accrues only form the
time the adverse claim is made known.
Spouses Hadji Ali Mamadsual v. J. Moson
Plaintiffs filed an action to quiet title which
was dismissed by the judge who stated that
they had no standing to bring such action
since they did not have legal or equitable
title.
Plaintiffs have been in open and adverse
possession of the property since time
immemorial.
ISSUE: Whether the plaintiffs have legal or
equitable title to the property.
HELD: Plaintiffs have legal and equitable title
to the property.
Legal title means registered ownership while
equitable title means beneficial ownership.
However, title to property does not
necessarily mena the OCT; it can connote
acquisitive prescription by possession in the
concept of owner.
Where the plaintiff is in possession of the
land, the prescriptive period within
which to quiet title accrues only form the
time the adverse claim is made known.
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Titong v. CA
Titong sold a portion of his land to Espinosa;
the latter then sold it to private respondent
Laurio. Titong, however, continued cultivating
and tilling the land already sold and had been
doing so for 20 years, when Laurio entered
the property and attempted to till it himself.
Titong filed an action for quieting of title.
ISSUE: Whether an action for quieting of title
was proper; whether Titong has a right to the
property.
HELD: An action for quieting of title was
improper. The Civil Code provides that such
action is availing only when there is a cloud
on title by reason of any instrument, record,
claim, encumbrance or proceeding. In this
case, none of the causes were present; the
only possible action would have been forcible
entry.
The true issue is a boundary dispute. Titong
has no right over the property. He cannot
claim ordinary acquisitive prescription
because he sold the property and yet altered
the boundary line obvious bad faith.
Extraordinary prescription is likewise absent,
possession being less than 30 years.
Del Banco v. IAC
Brothers Pansacol purchased an island in
Tayabas as co-owners. Several agreements
were later executed as to the extent of
ownership of each.
Later, an action for partition was brought by
successors in interest of the original co-
owners; this was opposed by the successors
of the other co-owners, who claimed that they
had exclusive ownership of the properties
which had already been partitioned.
ISSUE: Whether an the island property had
already been partitioned by virtue of the
agreements entered into by the co-owners.
HELD: There was no physical partition; there
was only ideal partition as to the share of
each co-owner.
That the parties have been in possession of
portions of the lot and have even acquired
titles thereto, there is no proof of partition.
Partition requires a subdivision plain with
respective titles issued to each; simple
agreement is insufficient.
Also, an action for partition does not
prescribe.
Paulmitan v. CA
Donato and his brother inherited property
from their mother. Donato caused the
property to be registered in his name,
claiming he was the only surviving heir. He
later sold the property to his daughter,
Fanesa.
The property was levied by the government
for tax delinquency and was redeemed by
Fanesa.
The heirs of his brother filed a complaint to
partition the property plus damages.
Donatos daughter claims exclusive ownership
by virtue of the 2 sales and prescription.
ISSUE: Whether Fanesa is sole owner of the
property.
HELD: No. Donatos sale of the property to
his daughter was inofficious as far as the
other half belonging to his brother was
concerned.
However, can it be said that when Fanesa
redeemed the entire property from the State,
she became sole owner?
No. Redemption is not a mode of terminating
ownership. The redemption by one co-owner
of the entire property does not vest title over
the same. Fanesa has a lien over the property
and is entitled to reimbursement.
Mariano v. CA
Gosiengfao mortgaged the lot in question; he
died and then the mortgage was foreclosed.
He left several heirs but only one, Amparo,
redeemed the property. Some of the other
heirs assigned their right to redeem in favor
of Amparo; others did not (Grace).
Amparo then sold the lot to Mariano. When
Grace learned of the sale, she filed a
complaint for recovery of possession and legal
redemption with damages against Mariano.
ISSUE: Whether Grace has a right to the
property.
HELD: Yes. It is settled that redemption of a
co-owner inures to the benefit of all other co-
owners.
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Adille v. CA
Felisa, the original owner of the property had
children by two marriages: Adille from the
first and the Asejos from the second.
Felisa sold the property, pacto de retro, then
died. Adille was able to redeem the property
and executed a deed of partition representing
himself to be the sole heir of Felisa thereby
allowing him to title the land in his name.
The Asejos filed for partition with accounting,
claiming Adille was only a trustee. In fact, an
Asejo had all the while been occupying a
portion of the property.
ISSUE: Whether the Asejos have a right to
the property.
HELD: Yes. It is settled that redemption of a
co-owner inures to the benefit of all other co-
owners.
Redemption is a necessary expense and the
Civil Code provides that each co-owner shall
have a right to compel the other co-owners to
contribute to the expenses of preservation.
Adille is then a trustee who acquired the
property through fraud.
Twenty five years have passed since he had
the land titled in his name, has prescription
set in?
No. Prescription as a means of terminating co-
ownership must be preceded by repudiation,
which is subject to the following conditions:
1. co-owner repudiated co-ownership;
2. such act is made known to the co-owners;
3. the evidence is clear and conclusive;
4. he has been in possession in concept of
owner for the required period.
In this case, the co-owners were kept in the
dark regarding the titling in his name.
Moreover, one Asejo continued to enjoy
possession of a portion of the property.
Prescription shall begin from the moment that
the Asejos learned of the fraud.
CONDOMINIUM ACT
What is a condominium?
It is an interest in real property consisting of:
(a) a separate interest in a unit in a
residential, commercial, or industrial
building; and
(b) an undivided interest in common
directly or indirectly, in the land on
which it is located and other common
areas of the building.
(c) It may include, in addition, a separate
interest in other portions of such real
property.
Sec. 4. Condominium act applies only if the
master or enabling deed is registered in the
registry of property and annotated on the
certificate/s of title of the land if such was
registered under the Land Registration or
Cadastral Acts.
The master deed shall contain the following:
1. Description of the land
2. Description of the building
3. Description of the common areas
4. Statement of the exact nature of the
interest acquired by the purchaser in the
unit
5. Statement of the purposes for which the
building and units will be used
6. Certificate of the registered owner of the
property, if he is other than those executing
the master deed
7. The following plans:
a. Survey plan of the land Floor plan of
the building
8. Any reasonable restriction not contrary to
law on the right of the condominium owner
to dispose of his condominium.
Master deed may be amended, revoked, upon
registration instrument executed by registered
owners.
Sec. 5. Any transfer of a unit shall include the
transfer of the undivided interest in the
common areas or the membership in the
corporation PROVIDED, where the common
areas are held by the unit owners as co-owners,
no unit shall be transferred to non-Filipino
citizens or corporations, except in cases of
succession.
Sec. 6. Unless otherwise provided in the master
deed, the incidents of a condo grant are as
follows:
1. The boundary are the interior surfaces of
the walls, floors, ceilings, windows, and
cmt Page 26 of 42 3/7/2004
door. Not included are utilities, heating,
conduits, etc.
2. Easement shall pass as an appurtenance of
the unit
3. Unless otherwise provided, common areas
held in common by unit owners equal
share for one unit
4. easement for ingress egress per unit
5. right to paint fix interior
6. right to mortgage, pledge,
7. right to sell unless master deed requires
offer to condominium owner.
What is a condominium?
What is a separate interest in a unit?
Interest in common in land and common areas?
Can you sell unit but retain common areas? NO
Directly or indirectly? Direct each unit owner
own common area; indirect stockholder
corporation owns
What is a condominium corporation? Manages
land, common areas and to hold indirect
interest in the land and common areas.
If you own condo unit where there is no condo
corporation, can you sell you unit to the
foreigner? NO.
If corporation yes provided Filipino interest
remains 60% or more.
Declaration of Restrictions must also be
registered.
Existence of condominium corporation
coterminous with the building.
Check out differences between regular
corporation and condo
Purpose hold title over land and common
areas
Existence 50 yrs
Dissolution ordinary may be voluntarily
dissolved; condo subject to conditions
provided by law: project destroyed,
uninhabitable, etc.
Whenever you buy a unit, you are given a title
(condo cert of title) but no title to the land. The
sale is annotated in the title to certificate/s of
title, if there is no condo corp. I fthere is a
condo corp, land is in name of corp, no more
annotation because you are a stockholder of the
corporation.
1 vote per unit.
No pay of dues, lien by corporation on units.
Not every purchaser of a condominium
unit is a shareholder in the corporation.
The Mater Deed determines when
ownership of the unit and participation in
the corporation vests in the purchaser.
Sunset View Condominium Corp. v.
Campos
Sunset View filed for the collection of
assessments levied against private
respondents herein.
The private respondents interposed the
objection that the City Court and CFI have no
jurisdiction.
The CFI agreed and held that pursuant to the
Condominium Act, the private respondents
were holders of separate interests and
consequently shareholders of the Sunset
View.
The CFI ordered Sunset View to ventilate its
grievance with the SEC, which has exclusive
original jurisdiction over controversies arising
between shareholders of a corporation.
ISSUE: Whether the CFI or the City Courts
have jurisdiction over the claims filed by
Sunset View, the condominium corporation.
HELD: The City Court and the CFI have
jurisdiction.
The private respondents are not members
or shareholders in the condominium
corporation.
The Condominium Act leaves to the Master
Deed the determination of when the
shareholding in the corporation will be
transferred to the purchaser of the unit.
In this case, the Master Deed provides that
ownership is transferred only upon full
payment of the purchase price.
Private respondents have not yet fully paid
the purchase price, hence they are not
shareholders and the SEC has no jurisdiction
over the claims.
*now, special courts handle intra-corporate
disputes
cmt Page 27 of 42 3/7/2004
No alterations may be made without the
written consent of the homeowners;
upon full payment of the purchase price,
title must be transferred, despite a
mortgage constituted by the developer;
the developer must provide parking.
G.O.A.L. v. CA
NHA extended a loan to GOAL for the latter to
construct a condominium. Construction began
but the contractor abandoned the project
when it was only 60% completed.
A year after the abandonment by the
contractor, GOAL offered units for sale;
private respondents were purchasers who had
fully paid for the units.
GOAL obtained an additional loan from NHA to
continue construction with a condition
imposed by the latter for the former to hold
on to the certificate/s of title.
Private respondents raise 3 complaints: (1) to
stop the illegal continuation of the
construction; (2) to deliver private
respondent Tengs certificate/s of title; (3) to
provide adequate parking spaces.
The HLURB and the OPLA ruled in favor of the
respondents.
ISSUE: Whether the developer, GOAL, can be
compelled (1) to stop the illegal continuation
of the construction; (2) to deliver private
respondent Tengs certificate/s of title; (3) to
provide adequate parking spaces.
HELD: Yes. PD 957 provides:
(1)No developer can alter plans without the
permission of the HLURB and the written
conformity of the homeowners. This is an
amendment of the master deed.
(2)Upon full payment of the purchase price,
the developer is mandated by law to
deliver the certificate/s of title to the
buyers. In fact, even if the unit is
mortgaged by the developer, the
developer must redeem the mortgaged
and deliver certificate/s of title to the
buyer.
(3)Only street parking is excluded from what
should be given for free by the developer.
Free parking may be in the basement or on
the first floor. Furthermore, in a
condominium, unit owners have an
undivided interest over common areas and
facilities, including parking spaces.
Article 491. None of the co-owners shall,
without the consent of the others, make
alterations in the thing owned in common,
even though benefits for all would result
therefrom.
However, if the withholding of the consent by
one or more of the co-owners is clearly
prejudicial to the common interest, the
courts may afford adequate relief.
*What is an alteration?
(1) It is a CHANGE;
(2) Which is more or less PERMANENT;
(3) And changes the USE of the thing;
(4) And PREJUDICES the condition of the
thing or its enjoyment by others.
Or, according to Manresa:
It is an act of ownership, which may be material
(changes nature) or metaphysical (changes
use), and gives rise to a real right over the
property owned in common.
What are examples of an alteration?
1. Sale, donation, or mortgage of the
whole property (the transaction would be
void only to the extent of the co-owner who
did not consent);
2. Sale, donation or mortgage of part of
the property with definite boundaries (the
sale is valid but subject to the result of the
subsequent partition);
3. A voluntary easement;
4. Lease of real property if
a. The lease is registered;
b. Or the lease is for more than one
year (whether recorded or not)
5. The construction of a house on a lot
owned in common;
6. Any other act of strict dominion or
ownership where any encumbrance or
disposition was held implicitly to be an act
of alteration;
7. Impliedly, contracts of long duration.
When is an alteration deemed illegal?
An alteration is deemed illegal when it is made
without the express or implied consent of the
co-owners.
cmt Page 28 of 42 3/7/2004
Note that implied consent by the others will not
give the one making the alteration the right to
seek reimbursement.
What are the effects of an illegal
alteration?
1. The co-owner responsible may lose what
he has spent;
2. He would be liable for losses and damages;
3. Benefits derived by the co-ownership
belong to it;
4. Demolition can be compelled;
5. In case a house is constructed on a
common lot, all the co-owners will be
entitled to a proportionate share of the
rent.
Imperial v. CA
Mariano and Adela were siblings who inherited
2 lots (1052 and 1091) from their mother. To
facilitate titling of the lots, A executed a
waiver of rights in favor of Mariano; another
document was executed where Mariano
acknowledged the simulated character of the
waiver and Adelas share in the inheritance.
Fraudulently, M sold 1052 to a third person/s.
The CA ruled that since M sold 1052 and failed
to give the heirs of A their share in the
proceeds, he is deemed to have waived his
right to 1091. Damages were also awarded.
Imperial effectively partitioned the property.
The SC affirmed the CAs decision.
There is no co- ownership when the
different portions owned by different
people are already concretely
determined and separately identifiable.
Si v. CA
The Armada siblings, C, J, and S, received
from their parents property in Pasay. The
deeds of sale particularly described the
portion conveyed to each son in metes and
bounds. However, the certificate of title of the
original lot remained intact.
C later sold his share to Si. J and S sought to
annul the sale, claiming they had a right of
redemption.
ISSUE: Whether the brothers have the right
of redemption.
HELD: No. The co-ownership has already
been terminated.
Article 484 provides that there is no co-
ownership when the different portions owned
by different people are already concretely
determined and separately identifiable.
In this case, it is evident that the deeds of
sale to each son particularly identified the
conveyed portion of the master lot.
Article 492. For the administration and
better enjoyment of the thing owned in
common, the resolutions of the majority of
the co-owners shall be binding.
There shall be no majority unless the
resolution is approved by the co-owners
who represent the controlling interest in the
object of the co-ownership.
Should there be no majority, or should the
resolution of the majority be seriously
prejudicial to those interested in the
property owned in common, the court, at
the instance of an interested party, shall
order such measures as it may deem
proper, including the appointment of an
administrator.
Whenever a part of the thing belongs
exclusively to one of the co-owners, and the
remainder is owned in common, the
preceding provisions shall apply only to the
part owned in common.
What are acts of administration of
management?
They are those:
(a) that do not involve an alteration;
(b) those that may be renewed from time to
time;
(c) those that have transitory effects, that is,
do not bind the co-ownership for a long
time in the future;
(d) those that do not give rise to a real right
over the thing owned in common; those,
which even if called an alteration, do not
affect the substance or nature of the thing;
(e) those for the common benefit of all the
co-owners and not for only one or some of
them.
How can we tell if the act is alteration or
administration?
cmt Page 29 of 42 3/7/2004
What are examples of acts of
administration?
(a) Lease of one year or less, if unregistered;
(b) Appointment of a co-owner or a third
person as administrator.
What are the limitations on the right of the
financial majority?
(a) There must be NOTICE to the minority of
resolutions;
(b) Only the urgency of the case and difficulty
of meeting would justify proceeding without
notice;
(c) The minority may appeal to the court
against the majority decision when:
a. There is no real majority;
b. The majority refuses to
correct abuse of administration
or maladministration;
c. The minority is made victim of
fraud;
d. An alteration is agreed upon.
e. The resolution is SERIOUSLY
PREJUDICIAL to the rights of
an individual co-owner;
i. Loans without sufficient
security;
ii. Encumbrance or
disposition is made
(alteration);
iii. Abusive administrator is
not replaced.
Article 493. Each co-owner shall have the
full ownership of his part and the fruits
and benefits pertaining thereto, and
he may therefore alienate, assign or
mortgage it and even substitute another
person in its enjoyment, except when
personal rights are involved.
But the effect of the alienation or the
mortgage, with respect to the co-owners,
shall be limited to the portion which may
be allotted to him in the division upon the
termination of the co-ownership.
What is the effect of a co-owners sale of
the entire property without authority of
the others?
The sale is valid only insofar as his share is
concerned.
In case a co-owner sells his share, who
participates in the partition, the vendor or
the vendee?
It depends. If the vendee is already in
possession, then he alone may participate. If,
however, after the share is sold, the vendor
retains a real right over it, both he and the
vendee may participate.
Can a co-owners share be attached even if
there hasnt been partition?
Yes.
If A, B and C are co-owners of a residence,
each owning a floor, can one of them sell
his share to a third person/s who will
convert the same into a factory?
No. In this case, the use of the building would
change and the interests of the others would be
jeopardized.
If A and B own a common dwelling, can one of
them sell his share to a stranger?
No. The interest and privacy of the other would
be jeopardized. Personal right, as it is used in
Article 493 should be understood to be NOT a
technical term.
Article 494. No co-owner shall be obliged
to remain in the co-ownership. Each co-
owner may demand at ANY TI ME the
partition of the thing owned in common,
insofar as his share is concerned.
Nevertheless, an agreement to keep the thing
undivided for a certain period of time, not
exceeding ten years, shall be valid. This
term may be extended by a new
agreement.
A donor or testator may prohibit partition for a
period which shall not exceed twenty years.
Neither shall there be any partition when it is
prohibited by law.
No prescription shall run in favor of a co-owner
or co-heir against his co-owners or co-heirs
so long as he expressly or impliedly
recognizes the co-ownership.
*What is the reason for allowing partition
at ANY TIME?
The law discourages co-ownership because to
remain in such an arrangement subjects a
person to the desires of the rest and conflicts in
management are bound to arise.
cmt Page 30 of 42 3/7/2004
*When may a co-owner NOT successfully
demand partition?
(a) if by agreement, partition is prohibited (10
years max.);
(b) if partition is prohibited by a donor or
testator (20 years max.);
What if all donees agree to partition then
donor challenges partition?
The donation may be revoked due to a violation
of a condition imposed by the donor.
What if heirs violate partition prohibition
of testator?
No one can bring an action to challenge
partition.
What about administrator?
(c) if partition is prohibited by law (CPG);
(d) if physical partition would render the
property unserviceable (the property may
be allotted to one who will indemnify the
others or it may be sold to a third
person/s);
(e) if the legal nature of the common property
does not allow partition (like party walls).
Requirements
a. Repudiation with notice
b. Must be in a clear and convincing manner
c. Other requirements of prescription
d. Period of prescription
Is a tax declaration in ones name
repudiation?
It is not sufficient notice of repudiation.
Is registration of property in ones name
repudiation?
Yes, registration is sufficient repudiation.
Registration of the co- owned property by
a co- owner is an act of repudiation and is
a constructive trust wherein the action to
assail must be brought within 10 years of
registration.
Si v. CA
Siblings Galileo, Eulalio, Juanita, and Vicente
inherited a parcel of land from their brother.
In 1953, Galileo caused the property to be
registered in his name alone.
In 1968, the heirs of the excluded siblings
brought suit against the heirs of Galileo for
the partition or reconveyance of the property.
ISSUE: Whether the heirs of the excluded
siblings have a right of action against the
heirs of Galileo.
HELD: No; the action has already prescribed.
Generally, prescription does not run against
co-owners, as long as the one possessing
recognizes the co-ownership.
However, a co-owner in possession of the co-
owned property is deemed an implied trustee
and possession adverse to the implied trust is
recognized as a repudiation of the co-
ownership.
This repudiation, if made unequivocally and
with knowledge to the co-owners, if proved
convincingly, can cause prescription to run.
When Galileo registered the property in his
name, this is deemed to be a repudiation
sufficient to cause the running of prescription.
An action to reconvey land based on an
implied trust prescribes after 10 years the
action was brought 15 years after the
registration.
A contract providing for the non-
dissolution of the co- ownership until the
subdivided lots are sold is valid.
Tuason v. Tuason, Gregorio Araneta, Inc.
One of the three Tuason siblings sold her
share to GA. GA then proposed to the
remaining two the subdivision of the property
and its sale to the public; both assented.
The terms of the contract provided that the
co-ownership should subsist until all of the
subdivided lots have been sold.
One of the Tuason siblings decided that she
wanted out of the co-ownership and filed a
complaint for partition. The lower court
dismissed the complaint.
In her appeal, she raised the issue of:
ISSUE: Whether the terms of the contract
requiring co-ownership until the sale of all the
lots is contrary to the Civil Code provision
cmt Page 31 of 42 3/7/2004
prohibiting co-owners from being obliged to
remain part of the community.
HELD: The contract is perfectly valid.
The contract is, in fact, designed for the
ultimate end of terminating the co-ownership.
At the time of the appeal, already 97.5% of
the subdivision had been sold, and for a
handsome profit as well.
The co-owners being forced to remain in the
co-ownership should be taken to be a means
to an end of disposing the lots and
terminating the co-ownership.
Q: What it the lots arent sold within ten
years? Could there be an indirect violation of
Article 494?
No, by agreeing to subdivide, develop, and
sell the property, the parties actually entered
into an agreement for partition.
Clear repudiation is required for
prescription to run against co- owners.
Santos v. Santos
Eliseo and Ladislao Santos, brothers, inherited
from their sister and father, parcels of land.
Eliseo claims that Ladislao executed a
Combined Deed of Partition whereby the
latter conveyed the entire property to the
former.
When Ladislao sued for reconveyance or
partition, Eliseo set up the defense of the
Combined Deed of Partition and acquisitive
prescription.
ISSUE: Whether Ladislao has a cause of
action.
HELD: Yes, the co-ownership subsists.
Eliseo failed to present the deed upon which
his claim is based. The claim of subsisting
ownership must be refuted by the best
evidence obtainable.
The issue more important is prescription:
Did Eliseo acquire Ladislaos share
through prescription?
No. Prescription of an action to recover from
an implied trust requires clear repudiation
by the possessor of the object of the co-
ownership. In this case, there was no such
repudiation.
Though Eliseos son remained on the property
belonging to Ladislao, this can be considered
as being assented to by the latter since the
son of Eliseo had been occupying the property
even before the death of the testators.
Article 495. Notwithstanding the
provisions of the preceding article, the co-
owners cannot demand a physical
division of the thing owned in common,
when to do so would render it
unserviceable for the use for which it is
intended. But the co-ownership may be
terminated in accordance with Article 498.
Article 496. Partition may be made by
agreement between the parties or by
judicial proceedings. Partition shall be
governed by the Rules of Court insofar as
they are consistent with this Code.
What are the classifications of partition?
As to CAUSE:
1. extrajudicial or conventional
2. judicial
As to PERMANENCE:
1. provisional or temporary
2. permanent
As to SUBJECT MATTER:
1. real property
2. personal property
As to FORMS AND SOLEMNITIES:
1. partition by judicial decree
2. partition registered in the Registry of
Property
3. partition in a private instrument
4. partition in a public instrument
5. oral partition
What law governs partition?
a. The Civil Code
b. Suppletorily, the Rules of Court.
What must a person seeking partition do?
He must set forth in his complaint the (1)
description of the real estate, the (2)
nature and extent of his title, and he must
(3) join all those with an interest in the
property as defendants.
What must the court do if it finds that
plaintiff has a right to demand partition?
cmt Page 32 of 42 3/7/2004
It shall order partition of the property.
The parties may partition the property among
themselves.
What if the parties fail to agree on the
partition?
The court will appoint not more than 3
disinterested persons as commissioners to
make the partition, commanding them to
allocate to the parties a part of the property as
the court shall order.
Partition may be oral or written; in a
private or public document.
Pada Kilario v. CA, Pada
During Jacintos lifetime, he allowed his
brother, the father of petitioner herein, to
occupy a portion of his property.
When Jacinto died, his heirs executed an
extrajudicial partition in a private document.
They asked petitioner to leave the property;
she refused. An action for ejectment was
filed.
Petitioner claims that the partition was invalid
for being in a private document and that the
portion she is occupying was subsequently
donated to her by a number of the heirs of
Jacinto.
ISSUE: Whether the extrajudicial partition in
a private document is valid.
HELD: Yes, the partition is valid. A partition
may be in a public or private document or
even oral.
Since the partition was valid, the conveyance
to petitioner is invalid because those who
made the conveyance were no longer owners
of the property conveyed.
Where a co- owned property is titled in
the name of one co- owner and there is
no indication on the certificate/ s of title
of co- ownership, a third person may rely
on the face of the title in his purchase of
the said property.
Cruz v. Leis
Getrudes Leis obtained a loan from Cruz; this
was secured by a REM on the subject
property. She failed to pay and the property
was foreclosed.
Her heirs now claim that the property was
conjugal, having been acquired during the
marriage of their parents. Being so, upon the
death of their father, they became owners of
one half of the property.
Cruz claims that the property is paraphernal,
the certificate/s of title indicating that
Gertrudes is a widow and the title is in her
name. Cruz also argues that when Gertrudes
redeemed the property after a previous
mortgage, it became hers alone.
ISSUE: Whether the mortgage of the
property was valid.
HELD: Yes, the mortgage was valid.
Though as a rule, a co-owner can dispose or
encumber only his share of the co-ownership,
in this case, the certificate/s of title indicated
Gertrudes as the absolute owner of the
property.
A person dealing with registered land is not
required to go beyond the certificate/s of title
to determine the condition of the property.
Where several properties were orally
partitioned but one was inadvertently
left out of the court order approving the
partition, the oral partition shall be given
effect.
Maestrado v. CA
Ramon Chavez died, leaving several heirs.
An oral partition was conducted and the same
was approved by the court.
Concepcion, Angel, Amparo, and Salvador
received lot 3046.
Josefa and Carmen received 4 lots, including
the property in dispute, lot 5872.
However, 5872 was not included in the
courts order approving the partition.
To set things straight, Concepcion, Angel,
Amparo, and Salvador (or their successors)
executed quitclaims confirming the existence
of the oral partition.
Subsequently, Concepcion, Angel, Amparo,
and Salvador (or their successors) requested
for the partition of 5872 and the distribution
of their respective shares.
Petitioners, Josefa and Carmen filed an action
for quieting of title.
cmt Page 33 of 42 3/7/2004
ISSUE: Whether private respondents,
Concepcion, Angel, Amparo, and Salvador (or
their successors), have a right to the
property.
HELD: They have no right.
The property was ceded to petitioners upon
the execution of the oral partition which they
themselves confirmed in their quitclaims.
Article 497. The creditors or assignees of
the co-owners may take part in the division
of the thing owned in common and object
to its being effected without their
concurrence.
But they cannot impugn any partition already
executed, unless there has been fraud, or in
case it was made notwithstanding a formal
opposition presented to prevent it, without
prejudice to the right of the debtor or
assignor to maintain its validity.
*May creditors or assignees impugn a
partition already executed?
Generally they may NOT, except:
1. Where there has been fraud;
2. Where a formal opposition has been
previously presented.
Is a mortgage sufficient security against
fraud?
Yes.
Who are the creditors referred to in this
article?
All creditors who became so during the
existence of the co-ownership.
In case a co-owner sells his share, who
participates in the partition, the vendor or
the vendee?
It depends. If the vendee is already in
possession, then he alone may participate. If,
however, after the share is sold, the vendor
retains a real right over it, both he and the
vendee may participate.
Article 498. Whenever the thing is
essentially indivisible and the co-owners
cannot agree that it be allotted to one of
them who shall indemnify the others, it
shall be sold and its proceeds distributed.
What objects are included in this article?
Of course, essentially indivisible objects, such
as automobiles.
However, essentially divisible objects, such as
land, may also be covered if their division would
be to the prejudice of the interests of the
parties.
What is the procedure in the partition of an
essentially indivisible object?
1. Allot the thing to a co-owner, who shall
indemnify the others;
2. If the above is not agreed upon, sell the
thing and distribute the proceeds.
Article 499. The partition of a thing
owned in common shall not prejudice third
persons, who shall retain the rights of
mortgage, servitude, or any other real
rights belonging to them before the
division was made.
Personal rights pertaining to third persons
against the co-ownership shall also remain
in force, notwithstanding the partition.
If A, B, and C, as co-owners of a lot,
mortgage the same to X and then
subsequently partition it, what happens to
the mortgage?
The mortgage would subsist over the 3 post-
partition lots.
Who are third person/s in this article?
All those who did not participate in the
partition.
Article 500. Upon partition, there shall be
a mutual accounting for benefits received
and reimbursements for expenses made.
Likewise, each co-owner shall pay for
damages caused by reason of his
negligence or fraud.
Article 501. Every co-owner shall, after
partition, be liable for defects of title and
quality of the portion assigned to each of
the co-owners.
*What are the effects of partition?
1. mutual accounting for benefits received;
2. mutual reimbursement for expenses;
3. indemnity for damages caused by
negligence or fraud;
4. reciprocal warranty for:
a. defects of title
cmt Page 34 of 42 3/7/2004
b. quality or hidden defects
5. each former co-owner is deemed to have
had exclusive possession of the part
allotted to him for the entire period during
which the co-possession lasted;
6. partition confers upon each the exclusive
title over his respective share.
How is co-ownership extinguished?
1. judicial partition;
2. extrajudicial partition;
3. prescription by co-owner;
4. prescription by stranger;
5. merger in one co-owner;
6. loss or destruction;
7. expropriation.
If A and B partitioned land co-owned by
them and later, X successfully claims
ownership of the land allotted to A, what
happens?
A and B must both bear the loss. B must give
half of the land allotted to him to A.
POSSESSION
Article 523. Possession is the holding of a
thing or the enjoyment of a right.
Why entire property to possession?
Possessor may not be owner. Possession here is
separate from ownership.
Is possession a fact or a right?
Both. It is a fact since it exists; but from the
moment it exists, certain consequences follow,
making it also a right.
What are the viewpoints of possession?
1. Jus possidendi or right TO possession
this is an incident of ownership.
Ex. I own a house; I am entitled to
possess it.
2. Jus possesionis or right OF possession
this is a right independent of ownership.
Ex. I am renting a house; I am entitled
to possess it.
*What are the degrees of possession?
(a) Grammatical mere holding without
having any right (thief)
(b) Juridical possession with juridical title
but not ownership (lessee, depositary,
pledge)
(c) Real possession with just title but not
from the true owner (purchase of
property not owned by seller in good
faith
(d) Dominium possession with a title of
dominium or a just title from the owner
*What are the requisites or elements of
possession?
(a) There must be a holding, detention or
control of a thing or a right, actual or
constructive;
(b) There must be a deliberate intention
to possess; this is a state of mind
(animus possidendi);
(c) The possession must be by virtue of
ones own right (real or dominium; not
possession because of agency)
What does actual or constructive holding
or detention mean?
Ex. There is a large tract of land, of which the
owner actually occupies only a fraction and
constructively occupies the rest.
It is essential in constructive possession that
the property be not in the adverse possession
of another.
What are the classes of possession?
(a) In ones own name or that of another
(Article 524);
(b) In the concept of owner and in the
concept of holder(Article 525);
(c) In good or bad faith.
Are ownership and possession the same?
No. Ownership is different from possession.
Though one owns property, the right to possess
the same may be in the hands of another as a
tenant or lessee.
Article 524. Possession may be exercised
in ones own name or in that of another.
Who is in actual possession of a rented parcel of
land?
The lessor, through the tenant, is in actual
possession in the concept of owner.
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The lessee is in actual possession in the concept
of holder.
What are the kinds of possession in
anothers name?
(a) Voluntary as when the agent
possesses for the principal by virtue of
agreement;
(b) Necessary as when a mother
possesses for a child still in her womb;
(c) Unauthorized this will become the
principals possession only after there
has been a ratification without prejudice
to the effects of negotiorum gestio
(officious management).
Supposing a tenant is ousted by a third
person, can the OWNER of the property
bring an action for forcible entry?
Yes. The landlord was in actual possession
through the tenant and stands to lose
possession and even ownership.
Possession may be exercised in anothers
name. Article 524 of the Civil Code
provides: Possession may be exercised
in ones own name or that of another.
De Luna v. CA
De Luna filed a case of forcible entry against
Dimaano, alleging that the latter entered his
land, began plowing it, and erected a barbed
wire fence.
Dimmano raised the defense the De Luna was
not the owner of the property and that the
property was actually owned by Dequia. He
further claims that Dequia leased the
property to him.
ISSUE: Whether possession may be exercised
in anothers name.
HELD: Yes, possession may be exercised in
anothers name. Article 524 of the Civil Code
provides: Possession may be exercised in
ones own name or that of another.
The issue of prior possession had to be
resolved to determine who had a better right
to possess the property the rule in
ejectment cases being that the only issue to
be resolved is who is entitled to physical or
material possession of the premises or de
facto possession.
Now, if De Luna is able to prove prior
possession in himself, then he may recover
possession from Dimaano.
De Luna was able to prove prior
possession through the testimony of his
tenants who had been occupying the land
for several years this is the possession
exercised by De Luna in anothers name.
De Luna also proved through a neighbors
testimony that Dequias father delivered the
property to him and his mother.
However, since Dimaano alleged that
Dequia, and not De Luna, owned the
property, the court felt the need to look into
the issue of ownership.
Dimaano attempted to prove Dequias
ownership through tax declarations by the
latter on the property but the court held that
this alone was not sufficient to prove
ownership. The court held that the prior
possession of De Luna beats the flimsy claim
of Dimaano without prejudice to the
subsequent determination of true ownership
in an appropriate proceeding.
Article 525. The possession of things or
rights may be had in one of two concepts:
either in the concept of owner, or in that of
the holder of the thing or right to keep or
enjoy it, the ownership pertaining to
another person.
Whose concept?
Owner - Your own and others, must act and
claim to be owner. Paying taxes, getting
boarders.
What is the importance of this classification?
If in concept of holder, the owner benefits from
your possession.
If in the concept of owner, the possessor may
get the property through acquisitive
prescription.
What are the two concepts of possession?
1. In the concept of owner one who,
whether in good or bad faith, claims to
be, and acts as if he is the owner.
2. In the concept of holder one who
recognizes another to be the owner.
Article 526. He is deemed a possessor in
good faith who is not aware that there
exists in his title or mode of acquisition any
flaw which invalidates it.
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He is deemed a possessor in bad faith who
possesses in any case contrary to the
foregoing.
Mistake upon a doubtful or difficult question of
law may be the basis of good faith.
The person here is not an owner there is a
flaw or defect.
What is the importance of distinguishing gf and
bf?
Prescription
Indemnity
Buyer buys title thinking the vendor is the
person on the title GF.
Buys the property from the widow of a
deceased person, did not know she had children
GF
Buys land with Torrens but title is annotated lis
pendens BF
If you are in the business of lending money,
you have to look beyond the title.
Can a person in possession of a valid
Torrens title be in bad faith?
No. The articles on bad faith must be reconciled
with the doctrine of indefeasibility of a Torrens
title. It has been held by the SC that a holder of
a title is in good faith until such title is declared
null and void by the court.
What kind of mistake may be the basis of
good faith?
It must be a mistake upon a doubtful or difficult
question of law provided such ignorance is not
gross and inexcusable.
Is bad faith transmissible to successors in
interest?
Not necessarily. A child or heir may be
presumed to be in good faith notwithstanding
the fathers bad faith.
Article 527. Good faith is always
presumed, and upon him who alleges bad
faith on the part of the possessor rests the
burden of proof.
What is the reason for presuming good faith?
Presumption of innocence; everyone should be
presumed honest until proven otherwise.
Good faith is always presumed and bad
faith must be established by clear and
convincing evidence.
Carreon v. Agcaoili
Carreon claimed that property inherited from
her husband was hers along; a corresponding
certificate/s of title was issued. The land was
later sold to Agcaoili and a certificate/s of title
was issued in his name.
Carreons children filed a complaint against
Agcaoili to have the deed of sale declared as a
mortgage and to recover of the property
their action was predicated on Agcaoilis bad
faith.
ISSUE: Whether Agcaoili was in bad faith.
HELD: Agcaoili was in good faith.
Good faith is always presumed and bad faith
must be established by clear and convincing
evidence.
In this case, there was no showing of bad
faith on Agcaoilis part. Though he was a
townmate of the Carreons, he cannot be
expected to know that his vendor had
children.
Besides, the property was titled and the buyer
had no responsibility to look beyond the title:
which had an expired lien that was of no
consequence to the purchase.
One who purchases real property which
is in the actual possession of others
should, at least, make some inquiry
concerning the rights of those in
possession.
Republic v. CA.
102 SCRA 331. L-42856.
Ramos filed a Homestead application for land
in Nueva Ecija.
Pending this application, Ramos went to
Isabela and found a piece of land covered by
a Homestead application by Lopez but clearly
abandoned by the latter. Ramos filed another
application over this land.
Both Ramoss applications were granted and
he obtained a loan from PNB with the Isabela
land as REM.
Subsequently, Ramos discovered that there
were people occupying his Isabela land, he
filed a complaint for the recovery of
possession against them and won. These
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people sent a petition to the SANR and
alleged the nullity of Ramoss second
Homestead application, desiring to apply for
patents on the same land.
ISSUE: Aside from the many Public Land Act
issues, whether PNB, in accepting the REM of
the Isabela property was in bad faith.
HELD: PNB was in bad faith.
One who purchases/accepts for REM real
property which is in the actual possession of
others should, at least, make some inquiry
concerning the rights of those in possession.
In the absence of such an inquiry, PNB cannot
be considered as a good faith mortgagor as
against such possessors.
However, since Ramoss title over the land is
valid, the REM is valid as between Ramos and
PNB.
There is presumptive knowledge of the
existence of a Torrens Title.
J.M. Tuason v. Munar
J.M. Tuason, the owner of a subdivision,
brought an action for ejectment against
Munar.
Munar claims possession in good faith and
raises the defense that Tuasons certificate/s
of title, which was issued more than 20 years
before, was void due to fraud and that
pursuant to a compromise agreement
between Tuason and Deudor (Munars
predecessor in interest), Munar had a right to
occupy the property.
ISSUE: Whether Munar can assail Tuasons
decree of registration and corresponding
certificate/s of title 20 years after its issuance
and whether Munar was a possessor in good
faith.
HELD: Munar is barred from assailing the title
20 years after its registration. He is in bad
faith because there is presumptive
knowledge of the issuance of the certificate/s
of title to Tuason.
Munar instead chose to ignore the certificate/s
of title and relied on his predecessors claim
of ownership.
Mistake upon a doubtful or difficult
question of law, provided such ignorance
is not gross and inexcusable, can be the
basis of good faith.
Kasilag v. Rodriguez
Ambrosia, the mother of the plaintiffs herein,
mortgaged, in a public document, the
improvements on the property in dispute to
Rodriguez. Because of her failure to pay
interests when due, the parties entered into a
verbal agreement whereby Rodriguez would
condone interest but take possession of the
land and enjoy the fruits; he also introduced
signifact improvements.
However, the land was acquired by Ambrosia
as a homestead and could not be subject to a
real encumbrance, as a contract of antichresis
is.
The heirs of Ambrosia seek to recover the
property from Rodriguez.
ISSUE: Whether Rodriguez was a possessor
in good faith entitling him to indemnity for the
improvements constructed.
HELD: Rodriguez is in good faith.
Mistake upon a doubtful or difficult question of
law, provided such ignorance is not gross and
inexcusable, can be the basis of good faith.
Rodriguez is not a lawyer and is not expected
to know the various intricacies of a contract of
antichresis.
He is entitled to indemnity.
Article 528. Possession acquired in good
faith does not lose this character except in
the case and from the moment facts exist
which show that the possessor is not
unaware that he possesses the thing
improperly or wrongfully.
Examples of when bad faith begins:
1. Receipt of judicial summons;
2. Receipt of a letter demanding vacation
of the property, if the person does not
investigate and he is later defeated.
Article 529. It is presumed that
possession continues to be enjoyed in the
same character in which it was acquired
until the contrary is proved.
What are the presumptions regarding
possession?
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(a) Good faith is presumed;
(b) Continuity of character of possession;
(c) Non-interruption of possession;
(d) Presumption of just title;
(e) Non-interruption of possession of
property unjustly lost but legally
recovered;
(f) Possession during intervening period;
(g) Possession of movable with real
property;
(h) Exclusive possession of common
property.
Article 530. Only things and rights which
are susceptible of being appropriated may
be the object of possession.
What is res nullius and can it be
possessed?
It is abandoned or ownerless property. It may
be possessed but it cannot be acquired through
prescription, which presupposes prior ownership
in another. It can be acquired through
occupation.
Article 531. Possession is acquired by the
material occupation of a thing or the
exercise of a right, or by the fact that it is
subject to the action of our will, or by the
proper acts and legal formalities established
for acquiring such right.
How is possession acquired?
(a) Material occupation or detention
a. Constitutom possesorium
(possessed as owner, now
juridical possession)
b. Tradition brevi manu
(juridical possession, now
possesses as owner)
(b) Exercise of a right
(c) Subjection to our will by mere
agreement or the delivery of keys
a. Tradition longa manu
(delivery by consent)
(d) Constructive possession or proper
acts and legal formalities
succession, donation, execution of
public instruments, court order)
What are the essential requirements for
possession?
(a) corpus the thing physically detained;
(b) animus intent to possess
(express/implied);
Can land adversely occupied by one be
contstructively possessed by another?
No. If an entire parcel is possessed under claim
of ownership, there is constructive possession
of the entire parcel, unless a portion thereof is
adversely possessed by another.
Article 532. Possession may be acquired
by the same person who is to enjoy it, by
his legal representative, by his agent, or by
any person without any power whatever;
but in the last case, the possession shall not
be considered as acquired until the person
in whose name the act of possession was
executed has ratified the same, without
prejudice to the consequences of
negotiorum gestio in a proper case.
How is possession acquired from the
viewpoint of who possesses and what are
the essential requisites for each?
(a) Personal;
(a) Intent to possess
(b) Capacity to possess
(c) Object must be capable of
possession.
(b) Through an authorized person;
(d) Intent to possess for a principal
(e) Capacity to possess for another
(f) Principal has intent and capacity
to possess
(c) Through an unauthorized person upon
ratification (negotiorum gestio).
(g) Intent to possess for another
(h) Capacity of principal to possess
(i) Ratification by principal
(retroactive)
What is negotiorum gestio?
It is the voluntary taking charge of anothers
business or property without any power from
the owner when the property or business is
neglected or abandoned.
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Article 533. The possession of hereditary
property is deemed transmitted to the heir
without interruption an from the moment of
the death of the decedent, in case the
inheritance is accepted.
One who validly renounces an inheritance is
deemed never to have possessed the same.
Importance is for acquisitive prescription.
When does the heir acquire possession of
the inherited property?
1. If the heir accepts from the
moment of death, since there is no
interruption; the possession of the
deceased is tacked to the possession of
the heir.
2. If the heir refuses or is incapacitated
to inherit he is deemed never to have
possessed.
Problem: Father dies on January 1; son
accepts on January 30; in the meantime,
an administrator manages and is in
possession of the property.
Who is in possession of the
property from Jan. 1-30?
The son is in actual possession in the
concept of owner through the
admininstrator, who possessed it in the
concept of holder.
Who may institute an action for
forcible entry against an intruder?
Either the son or the administrator.
What happens if the son enters the
property before acceptance?
The administrator may file a complaint
for forcible entry against him.
Problem: A, B, and C inherited, in equal
parts, a parcel of land.
Day 1: A sold his share to X.
Day 2: B repudiated his inheritance.
Day 3: Partition is made.
How much does X get?
X gets of the property; this was really As
share upon the death of the father. This is
because B is deemed never to have inherited.
Article 534. One who succeeds by
hereditary title shall not suffer the
consequences of the wrongful possession of
the decedent, if it is not shown that he was
aware of the flaws affecting it; but the
effects of possession in good faith shall not
benefit him except upon the death of the
decedent.
Can good faith be tacked onto bad faith? J.H.
yes, JPSP, no.
Article 535. Minors and incapacitated
person may acquire the possession of
things; but they need the assistance of their
legal representatives in order to exercise
the rights which from the possession arise
in their favor.
Reason for the rule?
Practicality candy example.
Example: A minor may acquire the possession
of a fountain pen donated to him, but in a case
of court action regarding ownership of the pen,
his legal representatives must intervene.
What type of acquisition of possession is
referred to in this article?
This article refers to acquisition of possession
only in those matters where the incapacitated
person has capacity to act such as occupation
of res nullius, succession, prescription, or
donation.
Article 536. In no case may possession
be acquired through force or intimidation as
long as there is a possessor who objects
thereto.
He who believes that he has an action or a
right to deprive another of the holding of a
thing, must invoke the aid of the competent
court, if the holder should refuse to deliver
the thing.
What are the modes through which
possession may not be acquired?
a. Force or Intimidation;
b. Tolerance possession is with the
consent of the owner and redounds to
his benefit;
c. Clandestine, secret possession.
Article 537. Acts merely tolerated, and
those executed clandestinely and without
the knowledge of the possessor of a thing,
or by violence, do not affect possession.
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What does it mean that the actsdo not
affect possession?
(a) The intruder does not acquire any right
to possession;
(b) The legal possessor, even if ousted, is
still the possessor and is:
a. Entitled to the benefits of
prescription;
b. Entitled to the fruits;
c. Entitled as possessor for all
purposes favorable to his
possession.
(c) The intruder cannot acquire the
property by prescription.
You wake up in the morning and there is
squatter in your yard clandestine.
Caretaker on your land with understanding that
he will leave when you need the land
tolerance.
Article 538. Possession as a fact cannot
be recognized at the same time in two
different personalities except in the case of
co-possession.
Should a question arise regarding the fact of
possession, the present possessor shall be
preferred;
if there are two possessors, the one longer in
possession;
if the dates of the possession are the same,
the one who presents a title;
and if all these conditions are equal, the thing
shall be placed in judicial deposit appending
determination of its possession or
ownership through proper proceedings.
Does this mean that property can be possessed
by only one?
No, property may be physically possessed by
more than one but not legally possessed.
Compare to rule on double sale.
What is the general rule regarding
possession as a fact and what are the
exceptions?
The general rule is that possession as a fact
cannot be recognized at the same time in two
different personalities.
The exceptions are:
(a) co-possessors there is no conflict of
interest; they are co-owners;
(b) possession in different concepts or
degrees both owner and tenant are
possessors as a fact at the same time;
one in the concept of owner and the
other in the concept of holder.
What are the rules or criteria to be used in
case of conflict or dispute regarding
possession?
(a) The present possessor shall be
preferred;
(b) If both are present, the one longer in
possession;
(c) If the dates of possession are the same,
the one who presents a title;
(d) If all conditions are equal, the thing
shall be placed in judicial deposit
pending determination by the court.
What are the rules in case of double sale
or double donation?
In this case, preference of ownership (not
possession) is determined:
(a) movable property
a. preference to he who first
possessed in good faith
(b) immovable property
a. first who registered his right in
good faith in the registry of
property
b. if there was no registration, the
person who first possessed in
good faith
c. if there was no possession, the
person who presents to oldest
title, provided it was acquired in
good faith
Execution of the deed of sale in a public
document is equivalent to delivery of
possession of the property .
Wong v. Carpio
Giger sold the property to Mercado by virtue
of a deed of sale with right to repurchase;
Mercado was issued a certificate/s of title.
Mercado visited the property periodically,
harvested coconuts, and made copra. He did
not put up any signs, structures, or anything
to indicate actual possession.
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Several years after the sale, Wong went to
the land and saw that it was unoccupied; he
then bought it from Giger and was issued a
certificate/s of title.
A few months after the sale to Wong, Mercado
learned that the formers laborers built a hut
were occupying the land; Mercado was
pleased.
Despite his initial elation, Mercado later filed a
complaint for forcible entry against Wong.
Wong raises the defense that Mercado has not
established prior possession and that his acts
of gathering coconuts and making copra were
only tolerated by the true owner, Giger.
ISSUE: Whether Mercado had possession of
the property.
HELD: Yes, Mercado had possession.
Article 531 of the Civil Code provides that
possession is acquired by the material
occupation of a thing or the exercise of a
right, or by the fact that it is subject to the
action of our will, or by the proper acts and
legal formalities established for acquiring
such right.
Also, the execution of a sale through a public
instrument is equivalent to the delivery of the
thing, unless there is a stipulation to the
contrary.
Applying the aforementioned doctrines, the
execution of the deed of sale in a public
document ( it was notarized) was
equivalent to delivery of possession of
the property.
Since prior possession of Mercado was
proved, Wong must remove himself from the
property.
It seems that, in relation to Article 531, even
the gathering of coconuts (enjoyment of a
right to the fruits) constitutes possession.
Obiters:
The SC also said that entry into the property
by force, intimidation, strategy, or stealth, as
a cause of action in forcible entry covers all of
the ways by which one can wrongfully enter a
property. The act of entering the property and
excluding the rightful possessor therefrom
implies the exertion of force.
Wong must pay rent from the time he learned
of a defect in his title; in this case, from the
time of service of summons.
An 82 year old title is incontrovertible
and conclusive against the whole world.
Bishop v. CA
Salang filed an action for recovery of
possession against Bishop, invoking their
rights as registered owners of the land.
Bishop raised the defense that the land was
part of the public domain and could not have
been registered.
ISSUE: Whether Salang claim on the land,
based on a certificate/s of title, is better than
Bishops.
HELD: Salang has a better right.
It was necessary to determine ownership in
order to resolve the case for recovery of
possession.
Salangs title to the land is based on an OCT
which was issued 82 years ago. It is now
incontrovertible and conclusive against the
whole world.
Vda. de Catchuela v. CA
Diaz applied for the lot in question with the
PHHC, the application was granted and title
was issued. He then sold the property to
Francisco, private respondent herein.
Catchuela had been occupying said property
for several years when Francisco filed an
action for ejectment.
Catchuela filed an action for cancellation of
title and reconveyance of property
Francisco raised the defense that Cathcuela
has no cause of action.
ISSUE: Whether Catchuela has a cause of
action in the case for cancellation of title and
reconveyance of property.
HELD: Catchuela has no cause of action.
She never acquired a right over the lot in
question.
She has no right to seek its reconveyance or
continue in its possession; she is a mere
squatter with the tolerance of Francisco, the
rightful owner.
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