PROPERTY Professor E.

Labitag
Chapter III: Right of Accession

Page 1 of 7 28 July 2009

III. RIGHTS OF ACCESSION1
A. Concept
Art 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. Definition of Accession  TOLENTINO: Right by virtue of which the owner of a thing becomes the owner of everything that the thing may produce or which may be inseparably united or incorporated thereto, either naturally or principally.  JBL REYES: Extension of ownership over a thing to whatever is incorporated thereto naturally or artificially (without or with labor of man) o Incorporation means a stable union or adherence, not mere juxtaposition o Accession is one of the bundle of rights of ownership and is not a mode of acquiring property o It does not depend upon a new title

B. General Principles of Accession
1. Applicable to both accession discreta and accession continua a. Accessory follows the principal (accesio cedit principal)  Owner of the principal acquires or extends his ownership over the accessory  Art 437 Owner of a parcel of land is the owner of its surface and of everything under it  Art 446 Owner of a parcel of land is the owner of its surface and of everything under it b. No one shall be unjustly enriched at the expense of another Applicable to accession continua alone a. Whatever is built, planted or sown on the land of another and the improvement or repairs made thereon, belong to the owner of the land, subject to the provisions of the following articles (Art 445) b. All works, sowing, planting are presumed made by owner and at his expense, unless contrary is proved c. Accessory incorporated to principal such that it cannot be separated without injury to work constructed or destruction to plantings, construction or works (Art 447) d. Bad faith involves liability for damages and other dire consequences e. Bad faith of one party neutralizes bad faith of the other  Art 453 If there was BF, not only on the part of the person who BPS, but also on the part of owner, rights of one and the other shall be the same as though both had acted in good faith. Applicable to accession discreta alone a. Ownership of fruits – to owner of principal thing belongs the natural, industrial and civil fruits (Art 441 ) EXCEPTIONS: i. Possession in good faith (to the possessor) ii. In usufruct (to the usufructuary) iii. In lease (to the lessee) iv. In antichresis (to the creditor)

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C. Obligations of receiver of fruits to pay expenses by 3rd persons in production, gathering and preservation
Art 443 He who receives the fruits has the obligation to pay the expenses made by a third person in their production, gathering and preservation.

D. Kinds of Accession
1. Accession Discreta (Fruits) Art 440 The ownership of property gives the right by accession to everything which is produced thereby…

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Consolidated by Karichi Santos tutubi2b | uplawb2012

The will further provided that upon the death of Mary McDonald Bachrach. however large. lease. as owner of 108. and certain kinds of incomes obtained from the land or building itself BACHRACH v SEIFERT (1950.. as usufructuary or life tenant of the estate. zacate grass fed to horses)  Products of the soil as a result of human labor c. opposed said petition on the ground that the stock dividend in question was not income but formed part of the capital and therefore belonged not to the usufructuary but to the remainderman3. 2 3 Camille Maranan According to my legal dictionary. buildings. to the exclusion of his brothers.g. M.000 shares of stock dividend are civil fruits of the original investment. The 54. It holds that a stock dividend is not in any true sense any dividend at all since it involves no division or severance from the corporate assets of the subject of the dividend. wild herbs in the mountains dedicated to pasturage) b. whether called by one name or another.g. Mary (the widow). This rule supports Seifert and Elianoff’s contention that a stock dividend is not an income (unlike a cash dividend). although paid out in the form of stock. is based upon the earnings of the company. but merely represents an addition to the invested capital. received from the latter 54.Page 2 of 7     Extension of the right of ownership to the products of a thing Based on principles of justice: It is only just that the owner of a thing should also own whatever it produces.. Bachrach) to transfer to her the said 54. Massachusetts rule = stock dividend is not an income but merely represents an addition to the investment capital The Massachusetts rule regards cash dividends. usufruct. one-half of all his estate shall be divided among his legal heirs. o The estate of E. 1948. it is in reality. o Sophie Seifert and Elisa Elianoff. Natural fruits  Art 442 the spontaneous products of the soil and the young and other products of animals  Those products of the soil in whose generation human labor does not intervene (e. Also. o The lower court granted Mary’s petition and overruled S&E’s objection. although declared in stock.000 shares of stock dividend. o June 10. is fruit or income and therefore belonged to her as usufructuary or life tenant. the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income  Periodical (reiterable) increase of incorporeal property due to operation of law (rents. M. two US rulings figured in this case: 1. as income. however made.000 shares representing 50% stock dividend on the said 108. the deceased Emil Maurice Bachrach named his wife (Mary McDonald Bachrach) as usufructuary of the remainder of his estate.000 shares of stock of the Atok-Big Wedge Mining Co. petitioned the lower court to authorize the Peoples Bank and Trust Company (the administrator of the estate of E. held that "where a dividend. Seifer and Elianoff appealed. Bachrach. legal heirs of the deceased. unless otherwise provided by law or contract EXCEPTIONS: possession in good faith. ISSUE: Whether the stock dividend can be considered as a fruit/income (which belongs to the usufructuary) or part of the capital (part of the corpus of the estate which will be delivered together with the rest of the future estate to the remainderman)? HELD: The stock dividend is a form of income. Industrial  Art 442 are those produced by lands of any kind through cultivation or labor  Fruits that implies some kind of cultivation or labor (e. Inc. a remainder is a future estate and a remainderman is the inchoate possessor of that future estate tutubi2b | uplawb2012 . antichresis Art 441 To the owner belongs: a. as capital.000 shares of stock are part of the property in usufruct. In the present case. The SC cited Hite vs. She claimed that said dividend. Hite wherein the Court of Appeals of Kentucky. Ozaeta)2 o In his will. the 108. annuities)  Rents of land.000 shares. the income of the capital invested in it. and stock dividends. unless there is some special reason for a contrary solution GENERAL RULE: Fruits go to the owner of the principal. Civil  Art 442 are the rents of buildings.

should be delivered to the usufructuary (the widow). Talisay-Silay was indebted to PNB. it must be obtained from the land. et al. as part of the income of the usufruct. confusion)  Based on necessity and utility: It being more practical that the owner of the principal thing should own the new things instead of a co-ownership being established. it is distinct and independent from the property referred to in the mortgage to the bank. For it to come under the coverage of income. it went after Talisay (original complaint). According to our SC. DISPOSITIVE: Order affirmed. The Pennsylvania rule declares that all earnings of the corporation made prior to the death of the testatorstockholder belong to the corpus of the estate. the stock dividend. In this case however. Any dividend. no corporation may make or declare any dividend except from the surplus profits arising from its business.02 of Mariano’s bonus from Talisay. and not from the land itself. Thus. represents surplus profits. she has the right over such income. [the] bonus bears no immediate but only a remote and accidental relation to the land. The payment to be made as soon as the central was freed of its debts  Mariano sold his land to Cesar Ledesma for P7500  Bachrach on the other hand was a creditor of Mariano Ledesma. proceeds from leases of lands. It also prayed for accounting of whatever the central owed to Mariano by way of bonus. The central granted it as compensation for the risk that the landowners entered in mortgaging their lands. In My Understanding: The widow is saying that the stock dividend should be transferred to her account since this form part of the income of the estate and since she is the usufructuary. whether cash or stock. formation of islands and BPS) or to movables (conjunction/adjunction. dividend. Hence this appeal Issues: W/N the bonus was a civil fruit which formed part of the mortgaged land – NO Held and Ratio: NO. praying for the delivery of P13850 Talisay owed to Mariano as bonus stated in the first paragraph. change of river bed. The central. On the other hand. and that all earnings. undertook to credit the owners of the plantation… every year with a sum equal to 2% of the debt secured accdg to the yearly balance. This rule supports Mary Bachrach's contention. All parties later agreed to respect Cesar’s credit and absolved him from the complaint and ordered delivery to him of P7500  Trial court ruled in favor of Bachrach. or any instrument of credit. to compensate the planters for mortgaging their property. Disposition: Judgment affirmed 2. when declared as dividends in whatever form. Talisay induced its planters one of whom was Mariano Lacson Ledesma to mortgage their land. The bonus in question was neither rent of a building nor land. BACHRACH v TALISAY SILAY (1931. should be transferred to Mary since Article 471 of the Civil Code (now Art. If the bonus was an income of any kind.Page 3 of 7 2. Accession Continua Art 440 The ownership of property gives the right by accession to everything which is produced thereby…  Acquisition of ownership over a thing incorporated to that which belongs to the owner  May refer to immovables (alluvion. the legal heirs/ remainderman (or men) are contending that the stock dividend is part of the capital and should be delivered to them (together with the rest of the estate upon Mary’s death). Art 355 of the old Civil Code (Art 442 of the current Civil Code) considers three things as civil fruits: rents of buildings. made during the lifetime of the usufructuary or life tenant are income and belong to the usufructuary or life tenant. 566)provides that the usufructuary shall be entitled to receive all the natural.. Intervenor-appellant: Philippine National Bank Facts:  22 Dec 1923.. industrial. Defendants-appellees: Talisay-Silay Milling Co. and income from perpetual of life annuities or other similar sources of revenue. and civil fruits of the property in usufruct. To secure the loan.076. as well as the nullification of the sale made to Cesar Ledesma  PNB filed third party claim alleging a preferential right over Mariano’s credit owed by Tali say as part of the civil fruits of the land mortgaged to the bank. The court held that stock dividends form part of the income and therefore. awarding it P11. Inc. When Mariano could no longer pay Bachrach. 4 Doms Obias tutubi2b | uplawb2012 . BAchrach contested this  Talisay prayed for the absolution of 7500 of the credit as it belonged to Cesar Ledesma as buyer in good faith. commixtion. specification. etc. Therefore. force of river. Romualdez)4 Plaintiff-appellee: Bachrach Motor Co. the Pennsylvania rule is more in accord with Philippine statutory laws than the Massachusetts rule since under section 16 of the Corporation Law. it comes from the assumption of risk. therefore.

plants. ordered the sale of the land in question at public auction.000. on April 24. On January 9. Francisco and Luis Ignacio concerning the ownership of a parcel of land. BPS builds. 1935 to Toribio Teodoro for P8. The defendant avers that “he is a possessor in good faith and that the amount of P2. Moran)6 Facts: Elias Hilario and his wife Dionisia Dres filed a complaint against Damian. Bernardo was able to obtain a favorable decision from the court." The defendant indicated that he was unable to pay the land and. plaintiff was declared the owner of the land but the defendant was held to be a possessor in good faith. the lower court under Judge Alfonso Felix. the same must perforce be denied because defendant Bataclan has lost his right of retention as he failed to pay for the land. to clear the land and make improvements thereon. To sell BP and to lease land S RIGHTS OF BPS IN BAD FAITH 1. 1934.212 and by reducing the price at which the plaintiff could require the defendant to purchase the land in question from P300 down to P200 per hectare. the court below. either to sell the land to the defendant or to buy the improvements from him. as we have already said. IGNACIO v HILARIO (1946. Plaintiff was likewise given 30 days from the date when the decision became final to exercise his option. as far back as 1922. on January 24. After the trial of the case. 5 6 Phoebe Hidalgo Obet Bunagan tutubi2b | uplawb2012 . The plaintiff found the defendant herein. Catalino Bataclan. The court thereafter made some modifications by allowing the defendant to recover compensation amounting to P2. In this case. The land was sold on April 5.642.212 to which he is entitled has not yet been paid to him. Subsequently. Owner is BPS using materials of another (Art 447)  Good faith  Bad faith iii. While the said argument is legally tenable. To acquire building. the plaintiff conveyed to the court his desire "to require the defendant to pay him the value of the land at the rate of P200 per hectare or a total price of P18.212.Page 4 of 7 a. Laurel)5 FACTS: Plaintiff Vicente Bernardo acquired a parcel of land from Pastor Samonte thru a contract of sale. in accordance with article 361 of the Civil Code. requires no more than that the owner of the land should choose between indemnifying the owner of the improvements or requiring the latter to pay for the land”. BPS on another’s land using own materials  BPS in good faith  BPS in bad faith OPTIONS OPEN TO OWNER OF LAND: 1. an order was issued giving the plaintiff 30 days within which to pay the defendant the sum of P2. in the said premises. Thereafter. sows on another’s land with materials owned by 3 person Art 456: Good faith does not exclude negligence BERNARDO v BATACLAN (1938. partly rice-land and partly residential. 1934. Over Immovables 1) Artificial or Industrial – BPS ii. Bernardo instituted a case against said vendor to secure possession of the land. planting and sowing 2. “The law. Thus.000 for the whole tract of land. Both parties appealed the decision.” Defendant further claims that he has a right to retain the land in accordance with the provisions of article 453 of the Civil Code. ISSUE: WON DEFENDANT BATACLAN IS STILL ENTITLED TO RECOVER THE COURT MANDATED COMPENSATION ARISING FROM THE SALE OF THE PROPERTY TO TORIBIO HELD: NO. Landowner in BF but BPS in good faith rd 2. 1934. rendered judgment holding Hilario and Dres as the legal owners of the whole property but conceding to the Ignacios the ownership of the houses and granaries built by them on the residential portion with the rights of a possessor in good faith. It appears that he has been authorized by former owners. for work done and improvements made. plaintiff instituted a case against Bataclan in the Court of First Instance of Cavite. at the instance of the plaintiff and without objection on the part of the defendant. entitled to reimbursement in the total sum of P1.

Right of retention of builder in good faith The owner of the building erected in good faith on a land owned by another. is entitled to retain the possession of the land until he is paid the value of his building. Felipe Natividad). Original decision did not become final as it failed to determine the value of the buildings and of the lot. has the option. under article 453. in the last instance. Right of remotion only available if he chose the latter and the owner of the building cannot pay The owner of the land. all these periods to be counted from the date the judgment becomes executory or unappealable. it having left matters to be settled for its completion in a subsequent proceeding. or sell to them the residential lot for P45.000 for the buildings. The procedure is erroneous. with costs against Hilarion and Dres. after having chosen to sell his land. Order amends judgment substantially and thus null and void The order of Judge Natividad compelling the Ignacios to remove their buildings from the land belonging to Hilario and Dres only because the latter chose neither to pay for such buildings nor to sell the land. the other party fails to pay for the same. the sheriff being ignorant as to how. offensive to articles 361 and 453 of the Civil Code. the proper rent. shall have the right to appropriate as his own the work. for it amends substantially the judgment sought to be executed and is.” He cannot however refuse both to pay for the building and to sell the land and compel the owner of the building to remove it from the land where it is erected. Thus. and certainty no authority is vested in him to settle these matters which involve exercise of judicial discretion. (b) an order to compel Hilario and Dres to pay them the sum of P2. Article 453 provides that “Necessary expenses shall be refunded to every possessor. sowing or planting. in a motion filed in the same CFI (now handled by respondent Judge Hon. He is entitled to such remotion only when. is null and void. the court shall render a final judgment according to the evidence presented by the parties. 3. the petition for certiorari was filed by the Ignacios praying for (a) a restraint and annulment of the order of execution issued by Judge Natividad. The Supreme Court set aside the writ of execution issued by Judge Natividad and ordered the lower court to hold a hearing in the principal case wherein it must determine the prices of the buildings and of the residential lot where they are erected. and within what time may the option be exercised. the period of time within which the Ignacios may pay for the land. but only the possessor in good faith may retain the thing until such expenses are made good to him. the judgment rendered by Judge Felix has never become final. Hilario and Dres prayed for an order of execution alleging that since they chose neither to pay the Ignacios for the buildings nor to sell to them the residential lot. and.Page 5 of 7 Subsequently. upon the other hand. the Ignacios should be ordered to remove the structure at their own expense and to restore Hilario and Dres in the possession of said lot. the rights of both parties were well defined under articles 361 and 453 of the Civil Code. Hence." 2. or to oblige the one who built or planted to pay the price of the land. 4. the motion was granted by Judge Natividad. no additions can be made thereto and nothing can be done therewith except its execution. And execution cannot be had. Useful expenses shall be refunded to the possessor in good faith with the same right of retention. sown or planted in good faith. After hearing. matters which remained unsettled up to the time the petition is filed in the present case. under article 361. After such hearing. the person who has defeated him in the possession having the option of refunding the amount of the expenses or paying the increase in value which the thing may have acquired in consequence thereof. Option of the landowner to pay for the building or sell his land to the owner of the building. either to pay for the building or to sell his land to the owner of the building. for how much. Article 361 provides that “The owner of land on which anything has been built. SARMIENTO v AGANA ()7 DEPRA v DUMLAO ()8 TECHNOGAS PHILS v CA ()9 Grace Lazaro Aris Mascenon 9 Vams Villar 7 8 tutubi2b | uplawb2012 . as well as the period of time within which Hilario and Dres may exercise their option either to pay for the buildings or to sell their land. but it failed to determine the value of the buildings and of the lot where they are erected as well as the periods of time within which the option may be exercised and payment should be made. for after the judgment has become final. 1. after the payment of the indemnity stated in articles 453 and 454. or (c) a rehearing of the case for a determination of the rights of the parties upon failure of extra-judicial settlement. and the one who sowed. and the time to which the option may be exercised In the decision of Judge Felix. these particulars having been left for determination apparently after the judgment has become final. furthermore.

possessor in good faith is entitled to fruits.  Court found Ortiz to be in good faith.  Dolorico relinquished rights over property in favour of Comintan and Zamora. Bacolod City.Page 6 of 7 ORTIZ v KAYANAN (1979.  CA affirmed RTC  Respondent Judge discovered that after the decision of the lower courts. Kee could and did possess the lot even before the completion of payments. but held the public bidding to be valid. Kee believed that the said lot was the one he bought. therefore he really has no right to said fruits.  Dolorico II named as successor and heir his uncle Dolorico. Kee built his residence. Antonio)10 Facts: Homestead Application Lot belonged to Dolorico II. that is. Kee refused to vacate.  Good faith consists in the belief of the builder that the land he is building on is his and he is ignorant of any defect or flaw in his title. he was nonetheless guilty of unlawfully usurping the possessory right of Jardinico over Lot 9 from the time he was served with notice to vacate said lot. Assuming arguendo that Kee was acting in good faith. Ortiz is to retain possession until the amount is paid. This right ceases upon defects being known. the principal.  Before possession is legally interrupted.  Zenaida Octaviano. Jardinico discovered that improvements had been introduced on Lot 9 by Wilson Kee.  All this time Ortiz was in possession and cultivation of the property.632. Eldred Jardinico bought the rights to the lot from Robillo. a store . Calauag. an auto repair shop.  Petitioner contends that he is entitled to the fruits of the property while the P13. He was not aware that the lot delivered to him was not Lot 8. Thereafter. The erroneous delivery was due to the fault of CTTEI and thus imputable to Pleasantville. and was thus liable for rental. Pleasantville has the burden of proving bad faith on the part of Kee. CA: Kee was a builder in good faith. Lot 9. Quezon i. And as good faith is presumed. Ortiz collected tolls on portions of the land even if he had not introduced any improvements on said portions estimated to amount to P25.  It appears that Kee bought on installment Lot 8 from CT Torres Enterprises Inc (CTTEI). was the one who mistakenly pointed out Lot 9 (instead of Lot 8) to Kee’s wife. Lot 9 was vacant. These alleged violations may give rise Mark Yam Krissy Conti 12 Nessa Abad 10 11 tutubi2b | uplawb2012 .632 has yet to be paid. At that time. Decision: NO. This is known as a right to retention. who had taken possession thereof. this being considered as civil fruits. on his state of mind at the time he built the improvements on Lot 9.  Under the Contract to Sell. from Pleasantville Dev’t Corporation in Pleasantville Subdivision.000.  Jardinico confronted Kee after discovering that the latter was occupying Lot 9. hence Jardinico filed an ejectment suit with damages.  Upon completing all payments and securing a TCT in his name. GEMINIANO v CA ()11 PLEASANTVILLE DEV’T CORP v CA ()12 FACTS  Edith Robillo purchased a parcel of land. RTC: Kee is a builder in bad faith. CTTEI’s employee. Issue: WON petitioner is entitled to fruits while Comintan and Zamora have yet to pay the indemnity due petitioner. and other improvements on the lot. as he was unaware of the “mix-up” when he began construction of the improvements. then died. Pleasantville failed to prove otherwise. If petitioner was not found to be the winner.  At the time he built the improvements on Lot 9.  Violation of the Contract of Sale on Installment may not be the basis to negate the presumption that Kee was a builder in good faith.  Also we must consider that tolls were collected from portions with no improvements of petitioner. ISSUE: W/N Kee is a builder in good faith? YES HELD/RATIO:  The roots of the controversy can be traced in the errors committed by CTTEI when it pointed the wrong lot to Kee. the real estate agent of Pleasantville. Ortiz’s ward located in Barrio Cabuluan. Such violations have no bearing whatsoever on whether Kee was a builder in good faith. for the creditor to obtain payment of a debt. Comintan and Zamora are to reimburse him for P13.

he cannot be compelled to pay rentals during the period of retention nor be disturbed in his possession by ordering him to vacate. Nuguid is the landowner. i. Remanded to TC for determination of CMV. petition. balance of P100. DISPOSITIVE: TC decision reinstated.)15 FACTS:  Pedro Pecson owned a commercial lot in Kamias and built a four-door two-storey apartment building.000 from Sps. NCC: Case is apposite as when the landowner is the BPS who then later loses ownership through sale. 5.000. Nuguid sought appropriation. Pecson already received P300.Page 7 of 7 to petitioner’s cause of action against Kee under the said contract (contractual breach) but may not be bases to negate the presumption that Kee was a builder in good faith.. Thus. Nuguid. Juan and Erlinda Nuguid. FELICES v IRIOLE ()13 Sorry I can’t find the case online  SPOUSES NUQUID v CA (1993. 2. the BPS (Pecson) has a RIGHT of RETENTION (which includes the right to the expenses and the right to the fruits) as a builder in good faith.000 paid thereafter.  However. 1993). NCC entitles the BPS to full reimbursement for all the necessary and useful expenses. Pecson entitled to retain ownership of the building and the income therefrom. ISSUE: W/N the spouses should pay rent collected during period of Pecson’s dispossession of the buildi ng? YES. 3. CA erred in upholding TC’s determination of indemnity (P53. NCC entitles landowner (Nuguid) to either appropriate the building upon payment of indemnity or sell the land.)14 SPOUSES NUQUID v CA (2005. 448. Case 3 (Case at bar): CMV = P400. Labitag remembers cases by location Chi Santos Jessa Alvarez 15 Rory Lambino 13 14 tutubi2b | uplawb2012 .000. so the LOT was sold at public auction to Mamerto Nepomuceno. HELD:  Pecson is a builder in good faith. Current market value of the building should be the basis of the indemnity. 1997 (@ P28K/mo. 15.  SC: Sps.  SC (Nov. Nuguid to also pay P1. Nuguid owned the lot. 1) i Because Prof. 4. they want to acquire the building.e. 546. and later to the Sps. 1993 to Dec.  Art. 1993): 1. Case 2: Nuguids sought delivery of possession of the lot and apartment building. He failed to pay realty taxes. TC directed Sps.) Thus. The landowner is prohibited from offsetting or compensating the necessary and useful expenses with the fruits received by the BPS in good faith.  Art.00 construction cost) and in also ordering Pecson to account for rent. Art. and the right of retention until full reimbursement is made. until the payment of indemnity is full.34 million for rentals from Nov. 448. Case 1: Pecson challenged the validity of the auction sale. while Pecson still owned the building (May 5.

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