2.
has been unlawfully deprived of a movable
ART 558
Acts relating to possession, executed or agreed to by one who possesses a
thing belonging to another as a mere holder to enjoy or keep it, in any
character, do not bind or prejudice the owner, unless he gave said holder
express authority to do such acts, or ratifies them subsequently
 Possessor referred here is same possessor mentioned in article 525.
 Acts relating to possession of a mere holder do not bind or prejudice
the possessor in the concept of owner unless said acts were previously
authorized or subsequently ratified by the latter. (see Art. 1317.)
 Possession may be acquired for another by a stranger provided there
be subsequent ratification.
ART 559
The possession of movable property acquired in good faith is equivalent to a
title. Nevertheless, one who has lost any movable or has been unlawfully
deprived thereof, may recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price paid therefor.
Right of possessor who acquires movable claimed by another.
 Movables mentioned here pertains to a specific or determinate things.
 If possession of movable was acquired in bad faith, no right is acquired
by the possessor. The property may be recovered by the true owner or
possessor without reimbursement.
If the acquisition was in good faith, here are the rules:
1. Possession equivalent to title. Possession in good faith of a movable
is presumed ownership. It is equivalent to a title. No further proof
is necessary (DOCTRINE OF IRREVINDICABILITY)
2.
EXCEPTIONS to THE RULE OF IRREVINDICABILITY
Where owner or possessor
1. has lost or
 In detail:
1. (As to #1) The rule is necessary “for purposes of facilitating
transactions on movable property which are usually done without
special formalities.’’
2. (As to #2).
Right of ownership, a real right.
 While actual possession of personal property is equivalent to title
thereto, so long as no proof is offered that the same was acquired in
bad faith, an owner who has lost possession of his movable property
or was unlawfully deprived of its possession, can still enforce his right
of ownership without reimbursement against the actual possessor or
even a bona fide purchaser for value except when the possessor
acquired it in a public sale.
 Unlawful deprivation includes all cases of taking that constitute a
criminal offense (conviction is not necessary), such as theft, robbery,
estafa, etc., including those involving abuse of confidence.
 The common law principle that where one of two innocent persons
must suffer by a fraud perpetrated by another, the law imposes the
loss upon the party who, by his misplaced confidence, has enabled the
fraud to be committed, cannot be applied in a case which is covered
by an express provision of law like Article 559.
 Between a common law principle and a statutory provision, the latter
must prevail in our jurisdiction.
 But the seller of movable property who was not paid by the first buyer
who, in turn, sold it to another who acquired it in good faith, cannot
claim to have been “unlawfully deprived of his property.’’
Necessity of proof
 It is necessary in order that the owner of a chattel contest the
apparent title of the possessor that he present adequate proof of the
loss or illegal deprivation.
 Without such proof, the present holder cannot be put on his defense,
even if, as possessor, he has no actual proprietary title to the movable
property in question.
 Article 559, in fact, assumes that the possessor is as yet not the
owner; for it is obvious that where the possessor has come to acquire
indefeasible title by adverse possession for the necessary period, no
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 proof of loss or illegal deprivation could avail the former owner of the
chattel. He would no longer be entitled to recover it under any
condition.
Effect of filing of criminal case against transferor
 The mere filing of a criminal case by the owner against the transferor
does not justify a court in disturbing the possession of the possessor in
good faith
o such filing does not necessarily mean that loss or unlawful
deprivation has occurred
o the possessor not being a party to the criminal case, the court
has no jurisdiction over him.
Effect of non-payment of price by the transferor
 Where the owner has voluntarily parted with the possession of a thing
and there is no showing of loss or unlawful deprivation, the owner
cannot recover.
 Thus, where the owner voluntarily sold his movable property, the
circumstance that the price was not subsequently paid by the
purchaser who later sold the property to a third party who acted in
good faith does not render unlawful the first sale which was valid and
legal at the beginning.
o Non-payment only creates a right to demand payment or to
rescind the contract, or to criminal prosecution in the case of
bouncing checks.
Where the property was acquired at a public sale
 If the possessor of a movable lost or of which the owner has been
unlawfully deprived, has acquired it in good faith at a public sale, the
owner cannot recover without reimbursing the price paid therefor.
When owner cannot recover
1. Where the owner of the movable is, by his conduct, precluded from
denying the seller’s authority to sell;
2. Where the law enables the apparent owner to dispose of the
movable as if he were the true owner thereof;
3. Where the sale is sanctioned by statutory or judicial authority; (d)
Where the sale is made at merchant’s stores, fairs or markets;
4. Where the seller has a voidable title which has not been avoided at
the time of the sale to the buyer in good faith for value and without
notice of the seller’s defect of title;
5. Where recovery is no longer possible because of prescription; and
6. Where the possessor becomes the owner of the thing in
accordance with the principle of finder’s keeper.
EDCA Publishing & Distributing Corp. v. Santos, 184 Scra 614 (1990)
Topic: Unpaid books were sold by the impostor-buyer to another who
acted in GF and with proper care
Facts:
X, identifying himself as Professor JC, placed an order by telephone with
petitioner EDCA for 406 books payable on delivery. EDCA, petitioner,
prepared the corresponding invoice and delivered the books for which X
issued a personal check cov- ering the purchase price, which was
dishonored. X sold the books to Y who, after verifying the seller’s ownership
from the invoice X showed her, paid X.
Petitioner argues that the impostor acquired no title to the books that he
could have validly transferred to Y, the private re- spondent. Its reason is
that as the payment check bounced for lack of funds, there was a failure of
consideration that nullified the contract of sale between it and X.
Ruling:
Issue: Has EDCA been unlawfully deprived of the books because the check
issued by the impostor X in payment therefor was dishonored?
Held: No.
 Sale is consensual...Parties may stipulate that ownership in the
thing shall not pass to purchases until he has fully paid the price.
Non-payment only creates a right to demand payment or rescind
the contract...BUT absent the stipulation above, such as in this
case, delivery of the thing sold will effectively transfer ownership
to the buyer.
 There is no unlawful deprivation of personal property.
 JC acquired ownership over the books sold. Actual delivery of the
books having been made, JC acquired ownership over the books
which he could then validly transfer to the private respondents.
The fact that he had not yet paid for them to EDCA was a matter
between him and EDCA and did not impair the title acquired by
the private respondents to the books.
 EDCA was negligent. EDCA was too trusting in dealing with X.
Although it never transacted with him before, it readily delivered
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 the books and, in turn, accepted his personal check in payment.
EDCA did not even verify his identity which was easy to do. It also
did not wait to clear the check before delivering the books. Worse,
it indicated in the sales invoice that the books had been paid,
thereby vesting ownership in the buyer.
 JC acted in good faith and with proper care. JC did not have to go
beyond the invoice to satisfy herself that the books were owned
by X. hence she exercised good faith. It would be unfair to make
the private respondents bear the prejudice sustained by EDCA as a
result of its own negligence. We cannot see the justice in
transferring EDCA’s loss to Y who had acted in good faith, and with
proper care, when they bought the books from X. Hence, EDCA’s
remedy is not with JC but with X.
ART 560
Wild animals are possessed only while they are under one’s control;
domesticated or tamed animals are considered domestic or tame, if they
retain the habit of returning to the premises of the possessor.
ANIMALS MAY BE
1. wild, or animals, whether terrestrial or aquatic, living in a state of
nature independently of and without the aid and care of man;
2. domesticated or tamed, or animals which are wild or savage by
nature but have been subdued and made use of by man and
become accustomed to live in a tamed condition; or
3. domestic or tame, or any of the various animals (e.g., dog, carabao,
cow) which live and are born and reared, under the control and care
of man, lacking the instinct to roam freely.
 Wild animals may be the object of hunting. (Art. 713.) T
 hey are possessed only if they are under one’s control.
 Possession of wild animals is lost when they regain their freedom or
come under another’s control.
 Domesticated animals are possessed if they habitually return to the
premises of the possessor.
ART 561
One who recovers, according to law, possession unjustly lost, shall be
deemed for all purposes which may redound to his benefit, to have enjoyed
it without interruption.
 This article applies to both possession in good faith as well as to
possession in bad faith, but only if beneficial to the possessor.
 Thus, a possessor in good faith will be deemed to be in continuous
possession for purposes of prescription.
 A possessor in bad faith is not liable for the fruits he recovered during
the time he was unlawfully deprived of possession, for to consider him
in possession continuously would be prejudicial and not redound to
his benefit.
 The recovery of possession must be according to law, that is, through
legal means or by requesting the aid of competent authorities;
otherwise, the benefit of continuous and uninterrupted possession
during the intervening period cannot be invoked.
ART 562
Usufruct gives a right to enjoy the property of another with the obligation of
preserving its form and substance, unless the title constituting it or the law
otherwise provides.
Usufruct, defined
 Another definition, other than that in the provision above, states that
it is "a real right, of a temporary nature, which authorizes its holder to
enjoy all the benefits which result from the normal enjoyment of
another's property, with the obligation to return, at the designated
time, either the same thing, or, in special cases, its equivalent."
o This real right has been preserved in this provision because
aside from the fact that there may still be a voluntary
usufructuary, at least one case of legal usufruct remains, that
of the parent over the child's property. Moreover, the
conjugal partnership is in a sense a usufructuary over the
separate property of the spouses.
 It is the right to enjoy the property of another temporarily, including
both jus utendi (right to use) and jus fruendi (right to fruits), with the
owner retaining jus disponendi (power to alienate or encumber).
Essence of Usufruct
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  Nothing else but simply allowing one to enjoy another's property. a. Total
 A person cannot create a usufruct over his own property and at the b. Partial
same time retain ownership. Usufruct is jus in re aliena; and to be a 7. Extent of owner's patrimony
usufructuary of one's own property is, in law, a contradiction in terms a. Universal
and a conceptual absurdity. b. Particular

Characteristics of Usufruct Impairment of object of Usufruct

1. It is a real right of use and enjoyment2 (whether registered or not in  Essential Requisite - right to enjoy the property of another
the Registry of Property);  The usufructuary is entitled to all the fruits of the property with the
2. It is of temporary duration; obligation to preserve its from and substance.
3. It is intransmissible; and  However, obligation to preserve is only accidental because the law or
4. It may be constituted on real or personal property, consumable or non- agreement of the parties may modify or even entirely eliminate it.
consumable, tangible or intangible, the ownership of which is vested in
another. AS TO NORMAL ABNORMAL
DEFINITION that which involves that which involves things
non-consumable which would be useless to
 But a usufruct of real property must be duly registered or annotated things which the the usufructuary unless they
in the Registry of Property to prejudice 3rd persons (Art. 709). It usufructuary can are consumed or expended
cannot be proven by parol evidence. enjoy without (i.e. money, grain, liquors,
altering their form etc.)
CLASSIFICATION OF USUFRUCT or substance,
1. Whether or not impairment of object is allowed: though they may
a. Normal deteriorate or
b. Abnormal diminish by time or
2. Origin: by the use to which
a. Legal they are applied (i.e.
b. Voluntary a house, piece of
c. Mixed land, furniture, etc.).
3. Number of Usufructuaries ANOTHER NAME perfect or regular imperfect, irregular, or
a. Simple usufruct quasi-usufruct.
b. Multiple (which may be either simultaneous or successive)
4. Terms or Conditions Usufruct v. Lease
a. Pure
b. With a term or period AS TO Usufruct Lease
c. Conditional
5. Quality or kind of object
a. Of things
b. Of rights
6. Quantity or extent of object
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Nature of Always a real right Generally a personal right Repairs and Usufructuary pays for Lessee not generally under
right (registered lease on land is a taxes ordinary repairs and taxes obligation to undertake
real right) on the fruits repairs or pay taxes

Creator of Owner or his agent Lessor may not be the owner

right (i.e. sublessor or ART 563
usufructuary) Usufruct is constituted by law, by the will of private persons expressed in acts
inter vivos or in a last will and testament, and by prescription..

CREATION OF USUFRUCT
Origin Created by law, contract, Generally, by contract 1. Legal
will of the testator, or 2. Voluntary
prescription 3. Mixed

1. Legal - Created by law or declared by law (i.e. Usufruct of the parents

over the property of their unemancipated children (Art. 226, Family
Code)
Extent of All the fruits and all the Generally to certain uses only 2. Voluntary - Created by will of the parties, either by acts inter vivos (i.e.
enjoyment uses and benefits of the (i.e. those stipulated) contract or donation) or by act mortis causa (i.e. last will and
entire property testament)
3. Mixed - Acquired by prescription (i.e. One believing himself the owner
of the property of an absentee, gave in his will the usufruct of the
property to his wife and the naked ownership to his brother, and the
Cause Passive owner who allows More active owner or lessor wife possessed in good faith); where both the law and volition of the
the usufructuary to enjoy who makes the lessee to usufructuary participate
the object enjoy ART 564
Usufruct may be constituted on the whole or a part of the fruits of the thing,
in favor of one or more persons, simultaneously or successively, and in every
case from or to a certain day, purely or conditionally. It may also be
constituted on a right, provided it is not strictly personal or intransmissible.

Kinds of Usufruct, defined

1. Extent of object:
a. Total - Constituted on the whole
b. Partial - Constituted only on a part
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 2. Number of beneficiaries:
a. Simple - Only one usufructuary
b. Multiple - Several usufructuaries
i. Simultaneous - At the same time
ii. Successive - One after another
3. Effectivity or extinguishment:
a. Pure - no term or condition
b. With a term - There is a period (suspensive or resolutory)
c. Conditional - Subject to a condition (suspensive or resolutory)
4. Subject matter:
a. Over things - Involves tangible property
b. Over rights - Involves intangible property as rights are, but the
rights must not be strictly personal or intransmissible; right to
receive support cannot be the subject matter of usufruct
ART 565
The rights and obligations of the usufructuary shall be those provided in the
title constituting the usufruct; in default of such title, or in case it is deficient,
the provisions contained in the two following Chapters shall be observed.
Rules governing usufruct
 Primarily governed by the title creating the usufruct, or in its absence,
by Articles 566 to 612.
1. Legal usufruct - law constituting it will govern
2. Voluntary - the act constituting it
3. Mixed - law on prescription and the extent of the use
 In case of conflict between the will of the parties and the Civil Code, the
former prevails.
ART 566
The usufructuary shall be entitled to all the natural, industrial and civil fruits
of the property in usufruct. With respect to hidden treasure which may be
found on the land or tenement, he shall be considered a stranger..
Classification of the rights of the usufructuary
1. As to the thing and its fruits:
a. To receive the fruits of the property in usufruct and half of the
hidden treasure he accidentally finds on the property;
b. To enjoy any increase which the thing may acquire thru
accession;
c. To personally enjoy the thing in usufruct or lease it to another;
d. To make on the property such improvements or expenses he
may deem proper and to remove the improvements provided
no damages is caused to the property;
e. To set-off the improvements he may have made on the
property against any damage to the same;
f. To retain the thing until he is reimbursed for advances for
extraordinary expenses and taxes on the capital.
2. As to the usufruct itself:
a. To alienate or mortgage the right of usufruct except parental
usufruct;
b. In a usufruct to recover property or a real right, to bring the
action and to oblige the owner to give him proper authority and
necessary proof;
c. In a usufruct of part of a common property, to exercise all rights
pertaining to the co-owner with respect to the administration
and collection of fruits or interests from the property.
3. As to advances and damages:
a. To be reimbursed for indispensable extraordinary repairs made
by him in an amount equal to the increase in value which the
property may have acquired by reason of such repairs;
b. To be reimbursed for taxes on the capital advanced by him;
c. To be indemnified for damages caused to him by the naked
owner.
Right to fruits
 The usufructuary has the right to receive all the fruits except where the
usufruct is constituted only on a part of the fruits of a thing or where
there is an agreement to the contrary.
 The naked owner retains and can exercise all the rights as owner over
the property limited only by the right of enjoyment of the usufructuary.
Right to dividends
 Dividend, whether cash or stock, is income and should go to the
usufructuary.
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  Shares of stock dividends are civil fruits. They represent profits
and the delivery of the certificates of stock is equivalent to the
payment of said profits.
 Said shares may be sold independently of the original shares.

Right of naked owner to certain benefits accruing from the property

1. Products which diminish capital
 The usufructuary has the obligation to preserve the form and
substance of the property unless the title or the law provides
otherwise.
 So, products which when taken from the property diminishes its
substance (i.e. minerals extracted from mines) are not to be
treated as fruits.
 They form part of the capital and belong to the naked owner in
the absence of a contrary intent.
2. Hidden treasure
 Usufructuary is not entitled to any hidden treasure because it is
not under the term "fruits."
 He shall be considered a stranger (i.e. If he is the finder, he is
entitled to 1/2.)

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