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Chapter 1

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

1. Define Possession.
Viewpoints of Possession:
a.) Right TO Possession (jus possidendi) a right or incident of ownership
Example: I own a house, thus I am entitled to possess it.

b.) Right OF Possession (jus possessionis) an independent right by itself, independent of

Example: I rent a house from X. Even if Im not the owner, I am entitled to possess it for
the period of lease by virtue of the lease contract.

Degrees of Possession:

1.) Mere holding or having, without any right whatsoever.

Example: possession by a thief

2.) Possession with a juridical title, but not of an owner

also called juridical possession
Example: possession by a lessee, pledgee, depositary

3.) Possession with a just title, but not from the true owner
also called real possessory right
Example: A, buys in good faith a car from B who is not the owner and delivers the car to A.
4.) Possession with a title of dominium, i.e. with a just title from the owner
real ownership or a possession that comes from ownership

What are the Requisites or Elements of Possession?

a.) There must be holding or control of a thing or right.
This holding may be actual or constructive.
b.) There must be a deliberate intention to possess (animus possidendi ).
This is a state of mind.
c.) The possession must be by virtue of ones own right.
This is because he is the owner, or the right is derived from an owner, e.g. tenant.

Q. Does possession mean that you have to physically hold the property?
A. Possession does not necessarily mean that a man has to have his feet on every square meter
of the ground. It is sufficient that he is able to subject the property to the action of his will.
(Somodio v. CA, 54 SCAD 374, 1994)

Ownership is Different from Possession How?

Possession is not a definite proof of ownership, nor is non-possession inconsistent
therewith (Heirs of Bofill v. CA 56 SCAD 73, 1994)

1. One may be the owner of the property, but he is not entitled to possession because of a
subsisting contract of lease; or pledge, or deposit or usufruct.
2. In this case, the right of possessor is enforceable even against the owner; to be respected
and defined.
3. But, if the actual possessor of the property has no valid right that may be enforced
against the owner, the property must be surrendered to the real owner.

Art. 524. Possession may be exercised in ones own name or in that of another.
a.) Possession of Land may be IN THE NAME OF OWNER, or THRU AGENT
Example: Solid Realty Inc. has 1000 shares and its business is buying and selling house and
lots for lease or sell. X owns 8,000 shares, the other 1000 shares are in the name of his lawyer
Y, and the 1000 shares in the name of his father Z. But Y & Z are actually trustees of X. In
effect, X buys house & lots and possess and own them in the name of Solid Realty, Inc.

b.) Landlord or a tenant can institute an action for forcible entry against an intruder in the
exercise of the physical right of possession.

Art. 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.

Q. What are the 2 Kinds or Concepts of Possession? Explain.

1.) Possession in the Concept of Owner (concepto de dueno)
when one claims and acts overtly or openly as if he is the owner;
whether he is in good faith or bad faith is immaterial;
recognizes no title or ownership in another;
also called as adverse possession (acts of dominion in derogation of owners interest)
this type of possession may ripen into ownership
2.) Possession in the Concept of Holder or Juridical Possession
when one recognizes another to be the owner
Example: possession of property by a tenant or lessee,
a usufructuary, depositary, bailee in commodatum

Art. 526. He is deemed a possessor in good faith who is not aware that there exists in his title or
mode of acquisition any flaw which invalidates it. He is deemed a possessor in bad faith who
possesses in any case contrary to the foregoing. Mistake upon a doubtful or difficult question of
law may be the basis of good faith.


Q. When does the good or bad faith of a possessor becomes significant, or be taken into
consideration in the adjudication of the rights of the parties in a case?

A. The good or bad faith of a possessor is applied only when there is a flaw in the title or in the
mode of acquisition of the property, which may invalidate it. This is when the good faith or bad
faith of the possessor becomes significant.

The rights of a mere possessor are unavailing as against a seller who is armed with a Torrens
Title over the property involved. Thus, even if a BUYER knows at the time of purchase that the
lot he is acquiring is possessed by another who is not the seller, he is not necessarily in bad
faith. A possessor is not necessarily the owner, or he may be possessing only a portion of the
land with the knowledge and tolerance of the owner. (Benin v. Tuason L-26127, 28 June 1974)

1. GOOD FAITH (Art. 526) :

Q. When is a possessor deemed to be in good faith?

A. 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.

Q. Is there a legal presumption of good faith? Who has the burden to prove bad faith of the

Good faith is always presumed, and upon him who alleges bad faith on the part of a
possessor rests the burden of proof, to adduce clear and convincing evidence to the
contrary. (Ballatan v. CA 304 SCRA 34, 1999; Dutch Boy Phils. v. Seniel, 576 SCRA 231)

If no evidence is presented proving bad faith, the presumption of good faith remains. This
so even if the possessor has profited, as when he had rented the land to others. (Sideco v.
Pascua, 13 Phil. 342; Labajo v. Enriquez L-11093, Jan. 27, 1958).

Q. If a party simply refuses to believe that there is a defect in the title of the land he is buying, is
this proof of good faith by the buyer?

Good faith or lack of it is a question of intention. It is a fact which is intangible and is

evidenced by external signs. A partys mere refusal to believe that a defect exists or his
willful closing of his eyes to the possibility of the existence of a defect in the vendors title
will not make him an innocent purchaser for value if it afterwards develop that the title
was in fact defective. (Leung Lee v. Strong, 37 Phil. 644) See also: RFC v. Javillonar, L-14224,
Apr. 25, 1960; Manacop Jr. v. Cansino, L-13971, Feb. 27, 1961

If circumstances exist that require a prudent man to investigate, he will be in bad faith if he
does not investigate.

Q. What about if the mistake in possession and ownership of property arose due to a difficult
question of law, can this be a basis of proving good faith?

Mistake on a difficult question of law may be the basis of good faith. It does not lose this
character, except in the case and from the moment the possessors Torrens Titles are
declared null and void by the Courts. (RP Bureau of Forest Development v. IAC and Rama,
GR 69138, May 19, 1992).

Q. What is the effect if a possessor is in good faith with respect to subsequent loss of the property
thru a fortuitous event while it is in his possession?

Effect of Possession in Good Faith a possessor in good faith may not be held responsible
for the subsequent loss of the property thru a fortuitous event (Cea v. Villanueva, 18 Phil.

2. BAD FAITH (Art. 526):

2. BAD FAITH (Art. 526): He is deemed a possessor in bad faith who possesses in any case
contrary to the foregoing.

Q. Is bad faith equivalent to negligence, or does it involves more than mere negligence?

A. Bad faith is different from negligence in that, malice or bad faith contemplates a state of
mind affirmatively operating with furtive design or ill-will. It means breach of a known duty
thru some motive. Bad faith partakes of the nature of fraud.

Q. If the original possessor is in bad faith, does it automatically follow that his heirs or
successors in interests or assignees must also be deemed in bad faith under the law?

A. Bad faith is personal. Just because a person is in bad faith, does not necessarily mean that
his successors in interest are also in bad faith. A child or heir may be presumed in good
faith, notwithstanding the fathers bad faith (Sotto v. Enage 43 OG 5057)

READ: Examples of possessors in bad faith illustration/cases on pp. 464-465, Paras, Vol 2,

Art. 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.

Q. When is Possession in Good Faith Converted to Possession in Bad Faith?

A. From the moment facts exist showing the possessors knowledge of the flaw, from that time
he should be considered as a possessor in bad faith.
It does not matter whether the facts were caused by him or by some other person.

Examples When Bad Faith Begins:

1. It may begin from the receipt of judicial summons (Tacas v. Tobon, 53 Phil. 356)
2. When a letter is received from the true owner asking the possessor to stop planting on the
land. (Ortiz v. Fuentebella, 27 Phil. 537)

3. After the seller offered to redeem the land due to error in selling in violation of the law,
and the buyer refused to restore the land to the seller and instead continue to make
improvements on the land. Consequently, the buyer from that time is deemed in bad faith
and may lose whatever he had built, planted or sowed without right of indemnity. (Felices
v. Iriola, L-11269, Feb. 28, 1958)

Q. What are the consequences as to the enjoyment and rights to the fruits, if say, in a contract of
sale, there was a time when the buyer/possessor was in good faith, but later, this ceases to be so
when an action to recover the property he possesses is filed against him in court?

A. When a contract of sale is void, the possessor is entitled to keep the fruits during the period for
which it held the property in good faith, which good faith of the possessor ceases when action to
recover possession of the property is filed against him and he is served summons therefor. (DBP v.
CA, 316 SCRA 650, 1999)

Art. 529. It is presumed that possession continues to be enjoyed in the same character in which
it was acquired, until the contrary is proved.

Article 529 provides for:

A legal presumption of continuity of character of possession until contrary is proved;
It applies whether character of possession is in good faith or bad faith

Example: On Feb. 10, 2000, A bought a 2 ha. land from B, whose name is indicated in the
TCT. But on May 7, 2000, C, sis of B, sent A thru counsel a demand letter informing buyer
A that, C is the co-owner of B, who is not the sole owner of the 2 ha. Land; that B held in
trust Cs share in the land and provided A with receipts of tax and bank payments made
for the land and the Trust Agreement signed by B & C, and thus, A must return to C the 1
ha. Land unlawfully sold by B.

Q. What is the legal presumption as to the character of As possession from Jan. 10-May 6,
From Feb. 10 May 6, 2000: there is a legal presumption that A obtained the land in
good faith. (see Art. 529)

Q. With the receipt of Cs demand letter on May 7, 2000 by buyer A, what happens to the
character of As possession from that time on?

As of May 7, 2000 and thereafter As good faith ceases by his knowledge or notice of
the flaw or defect in his title to the land. Effect: As good faith is deemed converted into
bad faith. (see Art. 528)

o Possession in good faith ceases from the moment defects in the title are made known
to the possessors by extraneous evidence or by suit recovery of the property by the
true owner x x x (Daclag v. Macahilig, 579 SCRA 556)

Read/memorize: LEGAL PRESUMPTIONS RE POSSESSION see Paras annotated book
1.) Possession in Good Faith (Art. 527)
2.) Continuity of Character of Possession (Art. 529)
3.) Non-Interruption of Possession (Art. 541)
4.) Presumption of Just Title (Art. 561)
5.) Non-Interruption of Possession of Property Unjustly Lost but Legally Recovered
(Art. 561)
6.) Possession During Intervening Period (Art. 1138 (2) )
7.) Possession of Movables with the Real Property (Art. 542)
8.) Exclusive Possession of Common Property (Art. 543)

Art. 530. Only things and rights which are susceptible of being appropriated may be the object
of possession.

Article 530 provides for what may be object of possession those susceptible of being

Q. What properties cannot be appropriated?

1. Property of Public Dominion
2. Res Communes
3. Easements (if discontinuous and non-apparent)
4. Things specifically prohibited by law

Q. Can Res Nullius property (belonging to no one) be the object of possession?

A. Yes. Res Nullius property is -
personal property that belongs to no one; abandoned or ownerless
may be acquired by occupation
may be possessed but cannot be acquired by prescription,
for prescription presupposes prior ownership by another