Property Part 3 – Co-Ownership, Possession, and Usufruct

DLSL Civil Law Review I 2020 – Atty. Rabuya

00:00:00 – 1:43:40
Co-ownership

The concept of co-ownership:

1. There must be unity of the object – there is a property/thing that is materially undivided;
2. There must be plurality of subjects – that same thing or property is owned by several
owners;
3. There must be recognition of ideal shares.

Source of Co-Ownership
In determining the interest of the co-owners in the co-ownership, that will depend on the source
of co-ownership.
(1) Contract is only one of the several sources of co-ownership. Co-ownership may exist
(2) by reason of law, or (3) by reason of succession, or (4) by reason of occupation
which is a mode of acquiring ownership, or (5) by reason of fortuitous event.
If the source of the co-ownership is other than agreement/contract among the co-
owners, the interest of each of the co-owners in the co-ownership is provided for by law.
On the other hand (OTH), if the source of co-ownership is contract, primarily, in
determining the interest of each of the CO in the co-ownership, that will depend on the
agreement among the co-owners.
If the source of co-ownership is contract, it is not necessary that each one of them must
have contributed to the acquisition of the property. It is possible that even if one did not
contribute to the acquisition of the property, he can be made a co-owner by reason of
the agreement of the parties.
OTH, if there is no agreement/absence of an agreement, the mere construction of a
house by one on the land of another shall not give rise to a case of co-ownership in the
absence of agreement. Instead, that situation will be governed by the provisions of the
NCC on industrial accession – from Arts. 448-455.
As I’ve said, if the source of co-ownership is contract, in determining the interest of each
of the co-owners in the co-ownership, they shall primarily be governed by their
agreement. In the absence of agreement, as to the extent of their respective interests,
doon lang natin titingan yung presentation of proof.
For example, how much is contributed by each in the acquisition of the property?
 Now, after determining the interest of each of the co-owners in the co-ownership,
the next problem is: how much shall be the share of each in the benefits and
charges?
The provision of the law is mandatory: the interest of each of the co-owners with
respect to the benefits and charges should be in proportion to the respective
interest of each in the co-ownership, and any agreement to the contrary is
declared null and void.

Kinds of Co-Ownership
Now, in every co-ownership, lagi nating iisipin that there are two (2) kinds of ownership existing
in every co-ownership.
(1) The ownership that pertains to the entire property. It is in relation to the entire
property that we will be talking of co-ownership. But in any co-ownership, there is
also
(2) An exclusive ownership over one’s ideal share.

Unahin nating pag-usapan yung ownership pertaining to the entire property.

Prior to partition, each of the co-owners cannot claim a right over any definite or
concrete portion of the co-ownership. Anyone of them cannot as yet tell which part of the
property his ideal share will fall; for which reason, prior to partition, each one of them is
considered as the owner of the whole. And over the whole, each one of them may
exercise his right of ownership.

For example. If the co-owned property is a house and lot. Anyone of the co-
owners can make use of the entire property even without the consent of the other
co-owners. But the right of one of the co-owners is subject to the similar rights of
the others.

While anyone of them can make use of the entire property, the use by one of the
entire property is subject to the following limitations:

1. The use must be in accordance with the purpose to which the

property is intended;
2. The right of each is subject to the similar rights of the others.

So, one cannot use the property in such a way that the other co-owners will not
be able to exercise their own right over that property.
Examples of application of those principles.
If the co-owned property is a house and lot and it is co-owned among 3 brothers.
Each one of them may occupy the entire house and lot if there is no opposition
from the other co-owners. He may occupy even without the consent of the
others, so long as there is no opposition from the others.
But if one occupies the entire property without the consent/knowledge of the
others, can he be required to vacate the property?
NO. The occupant, being a co-owner, is entitled to possession. He is entitled to
exercise his right of ownership over the entire property, and for which reason, he
cannot be required to vacate.
Can he be compelled to pay rentals?
NO. The right of the other co-owners is to exercise a similar right. They cannot
demand the occupant to vacate; they cannot require the occupant to pay rentals.
But their right is likewise to occupy the house and lot. If they all want to live
together, they can do so. But if they do not want to occupy the co-owned
property, they cannot force the occupant/co-owner to vacate the property and to
pay rentals. However, the use by a co-owner of the property must not be in
contravention of the purpose to which the property is to be devoted.
So if there is an agreement among the co-owners that the property should be
rented out so that the co-ownership may earn income, if one of the co-owners in
violation of the agreement will occupy the property, the co-owners will not be able
to rent it out. So, this time, the occupant-coowner can now be required to pay
rentals. He cannot be compelled to vacate, but he can now be required to pay
rentals on the property MINUS his share. He can be required to pay rentals but
minus his interest in the co-ownership.

Importance of Consent on Certain Acts by a Co-Owner

One important principle in co-ownership is the requirement of consent.
Depending on the act that will be executed by a co-owner.
1. Act of alteration – if the act to be executed by a co-owner is an act of
alteration, the consent requirement is UNANIMOUS CONSENT OF
ALL THE CO-OWNERS. Otherwise, the act will not be valid and the
co-owner who executed the act can be required to undo the act that
he executed – which is an act of alteration without the consent of all
the co-owners.

2. Mere act of alteration [administration?], or it is an act that will

require incurring expenses for mere improvement/expenses for
pure luxury – In other words, if the act to be executed is (1) an act of
administration, or (2) it will incur expenses which are in the nature of
useful expenses/nature of expenses for pure luxury, in order for the
act to be valid, it must require the MAJORITY VOTE of the co-owners.

But in co-ownership, when we talk of majority, we are not referring to

the numerical number of the co-owners. Instead, majority in co-
 ownership is HE WHO HAS CONTROLLING INTEREST. Yun ang
ibig-sabihin ng majority vote: kung sino ang may controlling interest.

3. The act will require incurring necessary expenses – Meaning, if

the expense is for the purpose of preserving the property in common,
the will of ONE OF THE CO-OWNERS is sufficient. Meaning, one of
the co-owners may undertake the repair of the property owned in
common and in the process, incurred necessary expenses, he does
not need to obtain the consent of the other co-owners. And after
incurring a necessary expense, the right of the co-owner who incurred
the expense is to demand proportionate contribution from the other
co-owners.

May the other co-owners refuse to contribute?

YES, at their option, they may do so---but they will be required to

renounce so much of their interest in the co-ownership that will
correspond to their share of expenses.

So, if one of the co-owners undertake the repair of the property in

common for the purpose of preserving the property in common, in
which case, he will be incurring necessary expenses, he has a right to
demand reimbursement of the expenses from the other co-owners
representing the share of the other co-owners in such necessary
expense. Sabi nga natin kanina, with respect to the charges, the
charges should be in proportion to the respective interest of the co-
owners in the co-ownership.

But with respect to the co-owner who has the obligation of contributing
to the necessary expense, mayroon siyang option: either (1) to pay
his corresponding share in the necessary expenses, or (2) if he does
not want to pay his proportionate contribution in the necessary
expense, he may instead renounce so much of his interest in the co-
ownership that will correspond in favor of the co-owner who paid the
expense corresponding to his share in the necessary expense.

But the option of renouncing is potestative on the part of the co-owner

who has the obligation to contribute to the expenses. He cannot be
compelled to renounce so much of his interest in the co-ownership if
he does not want. So, if he does not want to pay his proportionate
contribution in the necessary expense, and at the same time he does
not want to renounce so much of his interest in the co-ownership, he
cannot be compelled to renounce so much of his share in the co-
ownership. The remedy of the co-owner who incurred the expense
is to file an ordinary action for collection of money.
4. Ejectment – If the action to be taken by the one of the co-owners is to
file an action in ejectment, in Art. 487 of the NCC: in maintaining an
action in ejectment, the will of one of the co-owners is sufficient. The
law provides that it is sufficient that ONE OF THE CO-OWNERS
brought an action in ejectment. He does not need to join the other co-
owners in the action, either as party-plaintiff/party-defendant.

In other words, in maintaining an action in ejectment, only one of the

co-owners is considered an indispensable party. The plaintiff co-
owner who filed the action in ejectment is not required to include the
other co-owners in the action: either as party plaintiff/party defendant.

But that rule in Art. 487 will only apply so long as the action that was
filed by the plaintiff-coowner is for the benefit of the co-ownership. So,
the action that he filed is for the benefit of all. From the moment that
the plaintiff-co-owner filed the action for his exclusive benefit, saying
that he is now the exclusive owner of the property so that the action
that he filed is for his exclusive benefit, the rule under Art. 487 will no
longer be applicable. This time, the other co-owners are now to be
considered as indispensable parties.

The term ejectment under Art. 487 is not being used in its technical
sense. It is not limited to an action for forcible entry/unlawful detainer.
The term “action in ejectment” will include all kids of action, the
purpose of which, is to recover possession.

So, if the property involved is a personal property, the term

“ejectment” in Art. 487 can include an action for Writ of Replevin. If the
property to be recovered is a real property, the term “ejectment” in
487 can include: Forcible Entry, Unlawful Detainer, Accion Publiciana,
or Accion Reivindicatoria.

The SC said: even if the action filed by one of the co-owners is simply
an action for revival of the judgment, if the effect of the revival of
judgment is recovery of possession, then Art. 487 is still applicable.

Can one of the co-owners avail of the rule in Art. 487 even against
another co-owner? Halimbawa, tatlo sila. One of the co-owners (co-
owner 1) who is in possession is now claiming to be the exclusive
owner of the property; the third co-owner (co-owner 3) filed an action
in ejectment against the other co-owner, and he did not include in the
action the second co-owner (co-owner 2), will Art. 487 be still
applicable in that situation even if the action for recovery for
possession is filed against another co-owner?

SC: YES, Art. 487 can likewise be availed by a co-owner even against
another co-owner. But in that action for ejectment filed by one against
 another co-owner, the court cannot order the defendant to vacate the
property because being a co-owner, the defendant is also entitled to
the possession of the property. At the same time, in that action, the
court cannot order the partition of the property. If partition is desired, a
separate action for partition must be filed.

The only judgment that may be obtained by the plaintiff-coowner in

the action that he filed for ejectment against another co-owner is a
judgment for RECOGNITION OF THE CO-OWNERSHIP. The
importance for that judgment recognizing the existence of co-
ownership is that it will stop the running of the prescriptive period in
favor of the defendant-coowner who is now claiming to be the
exclusive owner of the co-owned property.

Art. 493, NCC

Art. 493 deals with the right of a co-owner over his ideal share. With respect to a co-owner’s
ideal share, a co-owner is exercising absolute ownership over his ideal share. He can do
anything that he pleases with respect to his ideal share. He can sell it; he can encumber it; he
can lease it; without need of obtaining the consent of the other co-owners.
In the same way, he cannot likewise be compelled to sell his ideal share if he does not want.

In a case decided by SC, for example: there was a parcel of land owned by 4 co-owners. There
is an interested buyer of the property, but he wants to buy the entire property. Nag-meeting
yung apat na co-owners to make a decision. 2 of them wanted to sell; the other 2 did not want to
sell the entire property. The 2 co-owners who want to sell the entire property went to court to
compel the other co-owners to sell their shares. The argument of the plaintiff co-owners in
seeking that remedy is this: the selling of the entire property is an act of alteration, which should
require the unanimous consent of all the co-owners, invoking Art. 491 of the NCC. In Art. 491,
sabi dyan, if the other co-owners are withholding their consent to the prejudice of the common
interest in the co-ownership, the other co-owners may seek appropriate reliefs from the court.
So, in that case, the trial court issued an order compelling the 2 other co-owners who were
made defendants in that petition to sell their ideal shares. Tama ba ang trial court in ordering the
2 other co-owners to sell their ideal shares?
SC: Mali ang trial court. With respect to a co-owner’s ideal share, he is exercising
absolute ownership. He can sell it without the consent of the other co-owners OR he
may likewise choose NOT to sell it and he cannot be compelled to sell his ideal share.
With respect to a co-owner’s ideal share, the applicable law is Art. 493 and not Art. 491
of the NCC.

Right of Legal Redemption

Now, if one of the co-owners will sell his ideal share without the consent of the other co-owners,
and he will be selling it to a third person, and he can do so without the other co-owners, ang
tanong: What is the right of the other co-owners?
Their right is to exercise the RIGHT OF LEGAL REDEMPTION. There is a right of legal
redemption that exists in favor of the co-owners if the ideal share of one of them will be sold to a
stranger.

In order for a right of legal redemption to be exercised, the following requirements must
be present:
1. At the time of the sale of the ideal share, and at the time of the exercise of the right of
redemption, the co-ownership must still be existing;
2. The price for which the share was paid for must be returned to the purchaser;
3. The redemption should be exercised within the prescriptive period
Notes:
What is the prescriptive period for the exercise of the right of legal redemption among
the co-owners?
It is 30 days from receipt of a written notice of sale.
So, kalian tumatakbo yang 30-day period na yan?
From receipt of a written notice of sale.
Must the notice be in writing/is the written notice requirement mandatory?
Pabago-bago ang desisyon ng SC with respect to that question; but ang trend ng
recent jurisprudence, bumabalik ang SC to its ruling that the requirement of a
written notice is MANDATORY. Without a written notice of the sale, hindi tatakbo
ang 30-day period of redemption. So, mandatory. Kung walang written notice,
kahit na mayroong actual notice of sale, hindi pa rin tatakbo ang 30-day period of
redemption.
But, with respect to the form of the written notice, the law and jurisprudence is
not requiring any special form. Ang requirement lang: the notice must be in
writing although it can come in any form.
So, the SC ruled: if the other co-owners will furnish a copy of the deed of sale,
that is SUFFICIENT COMPLIANCE with the requirement of the written notice.
Likewise, if the other co-owners received a copy of the summons, that is
sufficient compliance with the requirement of a written notice.
In order for that 30-day period to commence to run, kanino dapat manggaling ang
written notice? Can it come from the vendee/buyer?
SC: NO. Uli, pabago-bago ang decision ng SC. But if recent trend of
jurisprudence should be considered, the SC is going back to the rule that: In
 order for that 30-day period to commence to run, the written notice must come
from the vendor-co-owner.
As against right of pre-emption. The right of a co-owner is to exercise a right of legal
redemption which presupposes that there was already a sale. A co-owner does not have
a pre-emptive right; walang right of pre-emption. Ano pinagkaiba ng pre-emption? Pre-
emption is exercised prior to the sale in order to prevent the sale of the ideal share to
another person. SC said: the right of the co-owner is redemption, which requires that
there must already be a sale. A co-owner does not have a right of pre-emption. A co-
owner cannot prevent another co-owner from selling his ideal share to a stranger. Ang
right niya lang is: after the sale, he may redeem/may exercise a right of redemption.

Right to Sell/Encumber
In relation to Art. 147, FC
Ordinarily, a co-owner has a right to sell or to encumber his ideal share without need of
getting the consent of the other co-owner. In the Family Code, mayroon tayong na-
encounter na exception to that rule. In Art. 147 of the FC: In the co-ownership existing in
Art. 147 of FC, a co-owner is prohibited from disposing/encumbering his ideal share
without the consent of the other co-owner if the disposition/encumbrance is to be made
during the cohabitation. Even the sale of the ideal share by a co-owner in Art. 147 is
prohibited if the sale is without the consent of the other co-owner. Magiging valid lang
yung sale if it is consented to by the other co-owner. Kung walang consent ang other co-
owner, the sale is not valid.
But that prohibition will only apply so long as the parties are still cohabiting. After the
cohabitation, the general rule in Art. 493 will not be applicable.

In Co-Ownership
Can one of the co-owners sell the entire co-owned property without the consent of the other co-
owners?
Of course not, he cannot do that because he is not the owner of the entire property. He
is merely a part-owner/co-owner of the entire property.

But if one of the co-owners will sell the entire property without the consent of the others, is the
sale void/invalid?
NO. The sale is not void.
SC: The sale is still valid. Wala siyang right to sell the entire property, but the sale is not
void/still valid. In those cases, the SC applied a rule in contract interpretation that in
interpreting a contract/if there are two ways of interpreting a contract, where one
interpretation will make the contract invalid, and where one interpretation will sustain the
 validity of the contract, we should choose that interpretation which will sustain the
validity of the contract.
So, following that legal principle, in trying to avoid declaring the contract/transaction as
void. If one of the co-owners sold the entire property, mayroon bang paraan na
maiwasang i-declare yung entire transaction as invalid? Mayroon bang pwedeng ibenta
ang isang co-owner validly without the consent of the other co-owners?
Mayroon. Yung ideal share niya.
So, in those cases where one of the co-owners sold the entire co-owned property
without the consent of the other co-owners, in order to avoid declaring the entire
transaction as invalid, the SC merely treated the transaction as a sale of ideal share of
the selling co-owner. Ang effect, the buyer did not become the owner of the entire
property because the buyer will only be getting the ideal share of the selling co-owner. In
other words, the buyer will simply step into the shoes of the selling co-owner, thereby
becoming one of the co-owners.
So, if the action that will be filed by the other co-owner is an action to nullify the sale, that
will not prosper; because the sale is not void. The sale is valid. If the action that will be
filed by the other co-owners is an action for the reconveyance of the ideal share, that
action is not the proper remedy because the ideal shares were not affected. The SC has
ruled that what the transacting co-owner had sold is only his ideal share without affecting
the ideal shares of the other co-owners who did not give their consent to the sale of the
entire co-owned property.

May one of the co-owners sell a concrete, definite portion of the co-owned property prior to
partition without the consent of the other co-owners?
NO, he cannot do that. Prior to partition, a co-owner cannot claim a definite/concrete
portion of the co-owned property.

Will the sale become void?

NO. The sale is still valid. Again, following THAT rule in contract interpretation that as
much as possible, avoid declaring the contract as invalid if there is a legal way of
sustaining its validity. In those cases where a co-owner sold a concrete/definite portion
of a co-owned property, the SC again simply treated the transaction as a sale of the
ideal share of the selling co-owner.

In those cases where one of the co-owners sold the entire co-owned property without the
consent of the other co-owners/sold a concrete portion of the co-owned property without the
consent of the other co-owners, ano ang REMEDY? What is the proper remedy of the other co-
owners?
 The proper remedy of the other co-owners is either: (1) action of partition; or (2) simply,
redeem the ideal share of the selling co-owner from the buyer. In both cases, the SC
merely treated the transaction as a sale of the ideal share of the selling co-owner to a
stranger. In which case, the other co-owners are entitled to exercise a right of legal
redemption.

Termination of Co-Ownership
Important concepts in relation to the termination of co-ownership: Redemption, Prescription,
Partition

Redemption
May redemption of the co-owned property be a cause for the termination of the co-ownership?
If the redemption in a situation where the co-owned property was made a collateral in an
obligation secured by the co-owners, and the property was foreclosed but there is a one-year
redemption period. If during the one-year redemption period, one of the co-owners, using his
exclusive money, redeemed the foreclosed property, is that a way to terminate the co-
ownership? Will the redeeming co-owner become the exclusive of the property?
The answer to both questions is: NO.
If the redemption of the foreclosed property was made during the period of redemption –
Remember that during the period of redemption, the mortgagor is still the owner of the
foreclosed property; therefore, if the mortgagor is still the owner of the foreclosed
property during the one-year redemption period, the co-ownership is still existing at that
time. The redemption by one of the co-owners of the entire property which was
foreclosed is not a way of terminating the co-ownership. Therefore, the co-owner who
redeemed the foreclosed property, even if he used his exclusive money, did not become
the exclusive owner of the property. The property remains to be a co-owned property of
the co-owners.
What the redeeming co-owner did was simply to incur a necessary expense for the
purpose of preserving the co-owned property. So, the right of the redeeming co-owner is
only to demand proportionate contributions from the other co-owners in proportion to the
respective interest of each of the co-owners in the co-ownership.
However, if the redemption by one of the co-owners using his exclusive money was
done after the one-year redemption period, that is not actually an exercise of the right of
redemption. That is actually a repurchase.
Why?
After the expiration of the period of redemption, by operation of law, ownership is already
transferred in favor of the purchaser during the auction sale. Therefore, the co-
ownership is no longer the owner of the foreclosed property AFTER the lapse of the one-
year redemption period. So, automatically, after the lapse of the period, the co-
 ownership was already terminated. So, when one of the previous co-owners redeemed
the property using exclusive money AFTER the expiration of the period of redemption,
that is actually a repurchase of the property. Therefore, the one who made use of his
exclusive money in reacquiring that property will become the exclusive owner of the
property. Because at the time of the purchase and sale, the co-ownership was no longer
existing; it was already terminated.

Prescription
May one of the co-owners acquire the co-owned property by way of acquisitive prescription/by
way of prescription? May prescription run whether it is extinctive or acquisitive? Can it run in
favor of a co-owner against the other co-owners?
Ordinarily, the answer is NO.
Ordinarily, a co-owner cannot acquire the co-owned property by reason of prescription
even if he is the exclusive possessor of the co-owned property.
Why not? Because in co-ownership, the exclusive possession by one of the co-owners is
not considered adverse against the other co-owners.
Why? Because in co-ownership, there exists a relationship of trust. The possession by
one of the co-owners is not considered adverse against the other co-owners. In fact, the
possession by one is deemed for the benefit of all.
So, the general rule in co-ownership is that a co-owner cannot acquire the co-owned
property by way of acquisitive prescription. Prescription does not run in favor of a co-
owner against the other co-owners. That is the rule.
BUT that rule will only be applicable so long as the co-ownership is still being
recognized.
From the moment that the co-ownership is effectively repudiated, then prescription will
now commence to run.

Effective Repudiation
Para masabi nating “effective repudiation,” what are the requirements? There are three
(3) important requirements in order for the repudiation of the co-ownership to be
considered effective:
1. There must be a positive, clear, unequivocal act of repudiation.

The repudiating co-owner must execute a positive act which must be clear,
unequivocal act of repudiating the co-ownership.

2. The act of repudiating the co-ownership must be made known to the other co-
owners.
 Therefore, the other co-owners must be notified of the act of repudiating the co-
ownership.

3. The evidence thereon must be clear and convincing.

Let us give examples of CLEAR ACT OF REPUDIATING CO-OWNERSHIP.

If the act of a co-owner is simply to cancel the tax declaration in the name of all the
co-owners and to replace it with a tax declaration solely in his name, is that a clear
act of repudiating the co-ownership?
NO. A tax declaration is for the purpose of payment of taxes/real estate taxes
which is beneficial to the co-ownership. So that act alone is not a clear act of
repudiating the co-ownership.
But, if coupled with other actions, such as: preventing the other co-owners from
exercising their rights over the property [preventing the other from entering the
property, from gathering firewood, from receiving/acquiring fruits from the
property], in addition to the cancellation of the tax declaration in the name of the
other co-owners and replacing it with another tax declaration solely in the name
of the co-owner who is in possession, then that will now amount to repudiation of
the co-ownership.
If a co-owner will cancel the title in the name of the other co-owners, and replace
it with a title solely in the name of the co-owner who is in possession of the
property, that is a CLEAR ACT OF REPUDIATING the co-ownership.
The filing of an action for quieting of title against the other co-owners is also a
CLEAR ACT OF REPUDIATING the co-ownership.
Those are examples of acts/clear acts of repudiating the co-ownership.
However, if after executing that act of repudiating the co-ownership---for
example, if the co-owner will cancel the title in the names of the other co-owners
and replace it with a title solely in his name: that is supposed to be an act of
repudiating the co-ownership---afterwards, he will still be impliedly admitting the
co-ownership. For example, if after cancelling the title in the name of the other
co-owners and replacing it with a title/TCT solely in his name, but yung isa sa
mga co-owners whose name was taken out from that certificate of title, if that co-
owner will ask the permission of the co-owner who is in possession of the
property that he be allowed to construct his house on the co-owned property,
kung pumayag yung co-owner who caused the cancellation of the title on the
name of all and the issuance of a new title solely in his name na mag-construct
ang other co-owner over his property, he is still impliedly admitting the existence
of the co-ownership.
 So, dapat yung actions must be consistent: of repudiating the co-ownership.
Now, if there is a clear act of repudiating the co-ownership, and the other co-
owners were notified of the act of repudiation, and the evidence thereon is clear
and convincing, the prescriptive period will now commence to run.

What is the required period of prescription?

It will depend on what kind of prescription is being invoked by the co-owners who
repudiated the co-ownership. Pwedeng ang i-invoke nya: acquisitive
prescription; pwedeng extinctive prescription.
If the co-owner who repudiated the co-ownership will be invoking ACQUISITIVE
PRESCRIPTION as his defense/that he becomes the exclusive owner of the co-
owned property by way of acquisitive prescription, how long is the prescriptive
period?
If there is just title and good faith, the acquisitive prescription with respect
to acquisition of real property is ten (10) years.
In the absence of good faith and just title, the period of prescription for
purposes of acquiring ownership is thirty (30) years. Dapat, 30 years must
have lapsed from that time that he notified the other co-owners of his act
of repudiating the co-ownership if it is acquisitive prescription that will be
put up as a defense.
OTH, if the co-owner repudiating the co-ownership will be putting up
EXTINCTIVE PRESCRIPTION as a defense, extinctive prescription is statute of
limitations. If the other co-owners will file an action for reconveyance of their ideal
shares/recovery of their ideal shares, what is the prescriptive period of an action
for reconveyance of ideal shares?
SC: The action for reconveyance, which is based on implied/constructive
trust is ten (10) years.
So if it is extinctive prescription that is used as a defense, the prescriptive
period is 10 years.
How do we count that 10-year prescriptive period?
The 10-year prescriptive period is counted from the notice to the other co-
owners of the act of repudiation.
If the act of repudiation is by way of cancelling the titles on the name of
the other co-owners and by replacing it with a certificate of title solely in
the name of the co-owner who repudiated the co-ownership, the principle
of constructive notice will be applicable. So the 10-year period of
 prescription will commence to run from the date of the issuance of the
certificate of title.

Partition

RULE: Ang sabi ng batas, partition can be demanded at any time by any of the co-owners.
XPN: That is the case if partition is (1) not prohibited by law, or if partition is (2) not prohibited by
agreement of the parties or (3) by the will of the grantor.
By agreement. If the co-ownership is by reason of agreement among the co-owners,
they may likewise agree to prohibit partition but only for a period not exceeding 10 years.
So, during that 10-year period, the prohibition against partition is valid. During that time,
no co-owner may validly demand for the partition of the co-owned property if the other
co-owners will object to such partition.
By succession. If the co-ownership is by reason of succession or by reason of donation,
the grantor may prohibit the partition of the donated property/inherited property but only
for a period not exceeding 20 years. During that 20-year period, partition is not allowed.
By law. Partition may likewise be prohibited by provision of law.
Example, if the co-owned property is a Family Home, and the family home continues as
such after the death of the person who constituted the same, the law prohibits the
partition of the family home unless there is a compelling reason to do so.

When No Prohibition
In the absence of prohibition, either from provision of law/agreement of the co-
owners/will of the grantor, the RULE is that: PARTITION CAN BE DEMANDED BY A
CO-OWNER AT ANY TIME. That being the case, an action for partition to be filed by a
co-owner is not subject to any prescriptive period. So, an action for partition is
IMPRESCRIPTIBLE.
However, that RULE will only be applicable so long as the co-ownership is still being
recognized. From the moment that there was an EFFECTIVE REPUDIATION of the co-
ownership, because all the three requisites that we earlier discussed are present, even if
another co-owner will file an action for partition, in reality, that is no longer an action for
 partition but an action for reconveyance of property/reconveyance of their ideal share ---
which is now subject to a 10-year prescriptive period.

Possession

 Possession may be understood either as merely an incident/consequence of ownership.

In which case, we refer to it as: jus possidendi

 OTH, Possession may also be a right which is independent and apart from ownership. In
which case, we refer to it as: jus possesionis.

Possession, which is independent and apart from ownership (JUS POSSESIONIS)

1. The possession may either be exercised personally by the possessor, or through an
agent. So, possession may either be exercised (1) in one’s own name, or (2) in the
name of another.
The possession is exercised in one’s own name if the possession is being
exercised by the possessor himself/the one who has the right of possession. If
the possession as a matter of fact and the right of possession belong to the
possessor/one and the same person, that is possession that is being exercised in
one’s own name.
OTH, if the fact of possession is in the hands of a mere agent, and the agent is
exercising the possession on behalf of a principal who is the owner of the right of
possession, that is possession in another’s name. If the possession is by a
mere agent, the legal possessor/lawful possessor is the principal on whose
behalf the possession is being exercised by the agent.

2. The possession may also be (1) in the concept of an owner, or (2) merely in the concept
of a holder.
 The possession is in the concept of a mere holder if the possessor is
recognizing a superior right that belongs to someone else, which he believes to
be that of ownership.
For example, the possession by a mere lessee, or by a mere usufructuary is a
possession in the concept of a mere holder because the lessee/usufructuary is
recognizing a superior right that belongs to the lessor/naked owner, which he
believes himself to be that of ownership.

OTH, the possession is in the concept of an owner if the possessor is telling

everyone that he is the owner of the property, and he is not recognizing any
superior right that belongs to someone else. Even if the possessor is in bad faith,
he knew/it is possible that he knew that he is not the owner, but he is telling the
public that he is the owner and he is not recognizing any superior right that
belongs to someone else: that is possession in the concept of an owner.
So, a possessor in the concept of an owner may be a possessor in bad faith.
What is the importance of this concept?
1. If the possessor is in the concept of an owner, he is enjoying a presumption
for the meantime that he is the owner of the property. At the same time, he is
also enjoying the presumption that he is possessing the property with a just
title of which he cannot be obliged to show.
2. Most importantly, it is only possession in the concept of an owner that can
ripen into ownership by way of acquisitive prescription. If the possession is in
the concept of a holder, it cannot ripen into ownership by way of acquisitive
prescription UNLESS the possessor repudiates the superior right that he had
earlier recognized.

But, in the case of a possessor in the concept of a holder, in order for the
property to be acquired by way of acquisitive prescription for a shorter period
(ordinary prescription), it is a requirement that the just title must be proven. It
cannot simply be presumed to exist.

3. Possession may also be (1) in good faith, or (2) in bad faith.

Who is a possessor in good faith?
The possessor is a possessor in good faith if he believes to be the owner of
the property.
But his belief must not be a stubborn belief. His belief that he is the owner must
be based on the existence of a title/mode of acquisition in his favor, except that
he does not become the owner even if there is a title/mode of acquisition in his
favor because his title/mode is suffering from a defect/flaw that invalidate the
same. However, he becomes a possessor in good faith because he was ignorant
of the existence of such flaw or defect.

OTH, a possessor in bad faith knew from the very start that he was not the
owner of the property, either because: (1) he had no title/mode of acquisition that
can be the basis of his belief of ownership, or (2) even if he has a title/mode of
acquisition in his favor over the property, but nonetheless, he knew/was aware
that his title/mode was invalid because of the existence of a flaw or defect in the
title/mode invalidating the same.
Those are our concepts of possession in good faith and possession in bad faith.

What are the legal consequences of possession in good faith, or possession in

bad faith?
1. Effects of those kinds of possession in relation to the fruits of the
property.

a. If the possessor had already received the fruits prior to the recovery of
the property by the lawful possessor, what are the rules?

Possessor in GF – If the fruits have already been received/gathered

by the possessor before the property was recovered by the lawful
possessor, and the possessor was in good faith, ang rule natin: the
possessor in good faith is entitled to the fruits that he received during
the time that he was acting in good faith.

Possessor in BF – OTH, if the possessor was in bad faith when he

received the fruits, he has the obligation of returning to the lawful
possessor not only the fruits that he actually received, but likewise,
those fruits that could have been received by the lawful possessor
had the lawful possessor been in possession.

b. Effects if the fruits are still pending/not yet harvested/not yet gathered
at the time that the property was recovered from the possessor by the
owner. What are the rules?

Possessor in GF – if the possessor is in good faith, and the fruits are

still pending at the time of the recovery of the property by the true
owner/lawful possessor, the possessor in good faith and the lawful
possessor will both share in the net harvest. Both are entitled to a
share in the net harvest.

Papaano paghahatian ang net harvest? In proportion to the length of

their respective possession.
 Since paghahatian nila yung harvest, dapat nilang paghatian din ang
lawful expenses in proportion to their respective length of possession.
On the part of the lawful possessor who recovered the property, he
has an option of not contributing to the cultivation expenses. How?

By simply allowing the possessor in good faith to harvest everything.

At his option, he may give that concession to the possessor in good
faith. However, if the possessor in good faith for one reason or
another refuses that concession, the possessor in good faith will lose
the right to be indemnified in whatever manner.

Possessor in BF – if the possessor was in bad faith, and the fruits are
still pending at the time of the recovery of property, the applicable law
is Art. 449 – the possessor in bad faith will not only lose the principal,
but he will likewise lose the fruits without the right to be indemnified.
He is not entitled to recover the cultivation expenses that he incurred
because the possessor in bad faith is only entitled to recover those
expenses only in the situation where the fruits were already
harvested/received by the possessor in bad faith PRIOR to the
recovery of the property.

2. Effects of such kind of possession in relation to the expenses that

may be incurred by a possessor---whether in GF/BF.

Possessor in good faith/bad faith may incur three (3) kinds of expenses:

1. Necessary expenses – if the expense is indispensable for the

preservation of the property.

Therefore, a necessary expense will only be for the purpose of

preserving the property. It does not have any utility. It does not add
any value to the property. A necessary expense will not result in any
improvement.

2. Useful expenses – not for preservation; instead, if useful expenses

are incurred, it will result into an additional value or utility to the
property thereby resulting into an improvement.

3. Expenses for pure luxury – it will also result into an additional

value/utility to the property. Ang pinagkaiba ng useful sa pure luxury:

In useful expense, the expense will always result into an additional

value/utility to the property regardless of who the possessor may be.
Absolute yung additional value.

OTH, in the case of expenses for mere luxury, the additional increase
in the value of the property/additional utility to the property will defend
on who the possessor is. Maaring sa ibang possessor, walang
additional utility; maaaring sa ibang possessor, yung expense na yun
may result to an additional utility. So, relative ang tinatawag nating
effect of expenses for pure luxury.

Notes:

Necessary Expense

Now, if the expense is necessary, whether the possessor is in good

faith/is in bad faith, both are entitled to a refund of the necessary
expenses that they incurred. Ang pinagkaiba lang:

Possessor in GF – it is only the possessor in good faith who is entitled

to a right of retention pending payment/reimbursement of such kind of
expense.

Possessor in BF – OTH, a possessor in bad faith does not enjoy any

right of retention in relation to the necessary expense that he incurred.

Useful Expense

In useful expenses that will result into a useful improvement, what are
the rights of a possessor in good faith/in bad faith?

Possessor in GF – if the lawful possessor will choose to appropriate

the useful improvement, he must pay an indemnity to the possessor in
good faith. How much is that indemnity?

At the option of the lawful possessor, that indemnity may either be: (1)
the amount actually expended/actual expense incurred by the
possessor in good faith; or (2) only the increase in the value of the
property by reason of that improvement.

Pending reimbursement of such expense, the possessor in good faith

is likewise entitled to a right of retention.

If the lawful possessor does not want to appropriate the useful

improvement, the right of the possessor in good faith is to remove the
improvement. But he can only remove the improvement if the removal
can be done without causing injury to the property.

Possessor in BF – in relation to the useful expenses that he incurred;

he has NO RIGHT. He is not entitled to a right of refund. Likewise, he
is not entitled to a right of removal. Wala siyang right; nada, nil.
 Expenses for Pure Luxury

Whether the possessor was in good faith or in bad faith, both kinds of
possessor DO NOT ENJOY/ARE NOT ENTITLED to a right of
reimbursement of the expenses that he incurred for pure luxury.

BUT he is entitled to a right of removal, subject to 2 conditions:

1. Lawful possessor does not want to retain the ornament/al
improvement; and
2. The removal can be done without causing injury to the property.
If the lawful possessor wants to appropriate the ornamental
improvement, he is required to pay an indemnity to the possessor,
whether in BF/GF. How much is the indemnity?
If the possessor is in GF – the actual expense incurred by the
possessor in good faith.
If the possessor is in BF – the indemnity shall be limited to the value
of the improvement at the time that the lawful possessor enters into
possession.

Possession Over Movable Property

The RULE is that if the possession of a movable was acquired in good faith, and the previous
possessor had voluntarily parted with its possession, the possession of the movable by the
present possessor is already equivalent to title.
Again, if the present possessor acquired possession in good faith, and the previous possessor
voluntarily parted with possession, the possession by the present possessor is already
equivalent to title and the possession can no longer be recovered from him. That is the doctrine
of irrevindicability of movables.

The doctrine of irrevindicability of movables requires:

1. That the possession was acquired in good faith; and
2. That the previous possessor voluntarily parted with possession.

The doctrine of irrevindicability of movables does not apply in 2 situations:

1. If the previous possessor lost the movable; or
2. If the previous possessor was unlawfully deprived of possession.
Lost Movable
The RULE in our jurisdiction is that: with respect to a lost movable, the previous
possessor does not immediately lose his ownership over the lost movable.
Alternatively, on the part of the finder, the finder does not immediately acquire
ownership over the lost movable that he found. The obligation of the finder is to
return the lost movable to its owner if the ownership appears. OTH, if the lawful
ownership does not appear, the obligation of the finder is to deposit the item in the
Office of the Mayor. If the finder does not follow such procedure, and the finder
appropriates the item to himself, he will be committing a simple crime of Theft.
The previous possessor can always recover the property from the finder. If the finder
had sold that property to a third person, and that third person acted in good faith, the
previous possessor can still recover the property from the present possessor even if
the present possessor had acted in good faith. The previous possessor has no
obligation of returning the price for which the third person paid for that property.
However, if that third person acquired the lost movable at a public sale and in good
faith, the previous possessor may still recover the possession of that property from
the third person who purchased that property at a public sale in good faith; only this
time, the previous possessor is required to return the price for which the third person
had paid for such property before he can recover its possession.
If the finder will follow the procedure of depositing the lost movable in the Office of
the Mayor, the Office must cause the publication of such finding.
And if the previous possessor will come out and recover the property within a period
of 6 months from the time of the publication, he will retain his ownership over that
property BUT the previous possessor is required to pay a finder’s fee to the finder
equivalent to 10% of the value of that property.
OTH, if the possessor does not recover the possession of the property within 6
months from the time of the publication, then ownership over that property will be
acquired by the finder by way of Occupation minus the expenses that were incurred
in the publication of the finding of that lost movable.

Unlawful Deprivation of Possession

If the previous possessor was deprived of possession by a THIEF or a ROBBER, he
can always recover the possession of his movable from the thief/robber.
If the thief/robber was able to sell the movable to a third person who acted in good
faith, the previous possessor can still recover the possession of that movable from
the buyer, even if the buyer had acted in good faith in acquiring that property. And
the previous possessor has no obligation of returning the price for which the third
person had paid for that property ---
--- unless the third person acquired the movable at a public sale in good faith. In
which case, the previous possessor may still recover the possession of that movable
 from the third person, but this time, he must first return to the buyer/third person the
price for which the third person had paid for that property.
But the term “unlawful deprivation” is not limited to cases of theft or robbery. It will
likewise include cases of abuse of confidence. Kahit hindi naman kaso ng Theft o
Robbery, but if there was no intention yet to make the delivery/nagkaroon ng
transaction for the sale of a movable, the prospective buyer being able to obtain
possession of the movable but there was no intention yet on the part of the seller to
make the delivery, the prospective buyer does not as yet acquire ownership over the
movable. Kung maitakbo niya yung movable, even if there was no theft/robbery in
that situation, nevertheless, there was abuse of confidence.
And the term “unlawful deprivation” will likewise cover cases of abuse of confidence.
So, in that situation, even if the prospective buyer was able to sell the movable to a
third person who acted in good faith, the previous possessor can still recover the
movable from the present possessor, even if the present possessor had acted in
good faith unless the third person had acquired the movable at a public sale in good
faith; in which case, before the previous possessor may recover his possession, he
is required to return the price for which the third person had paid for that property.
BUT the term “unlawful deprivation” cannot be overstretched to include cases where
there was a valid sale and there was already a transfer of ownership --- because
there was intention to make the delivery. Example, the seller already delivered the
movable to a buyer. There was intention to make the delivery. But the buyer was not
able to pay the purchase price. Nonetheless, ownership was already transferred to
the buyer because of delivery. Since there was intent on the part of the seller to
make a delivery for the purpose of transferring ownership. So, even if the seller was
not paid the purchase price, there was no unlawful deprivation of possession. The
remedy of the seller is: to collect the unpaid purchase price from the buyer.

USUFRUCT

Usufruct is a real right.

In usufruct, during the existence of the usufruct, it is the usufructuary who is entitled to ALL the
attributes of ownership.

Ano lang ang attribute of ownership that remains with the naked owner?
 ONLY the right to dispose. So, together with the naked title, the right to dispose remains
with the naked owner. So, it is the naked owner who has the right to sell the property
during the existence of the usufruct.

Kung tatanungin kayo: may the naked owner sell the property subject matter of the usufruct
during the existence of the usufruct?
YES. He remains to be the owner and retains the right to dispose the property. But the
disposition must not impair/affect the usufructuary right of the usufructuary. Otherwise,
the naked owner will be liable to the usufructuary if the right of the usufructuary will be
impaired.

Kasama sa right to dispose yung RIGHT TO ENCUMBER.

So, even if there is a usufruct. It cannot prevent the naked owner from entering into a
contract of mortgage over the property subject matter of the usufruct because the naked
owner retains with him the right to dispose which includes with it the right to
encumber/right to mortgage the property.
But the other attributes of ownership, including: possession, enjoyment, right to receive
the fruits, the right to recover, are with the usufructuary.
So, it is the usufructuary who has the right to enter into a contract of lease during the
existence of the usufruct because the right of possession is with the usufructuary.

Important concepts
In relation to the repair of the property subject matter of the usufruct:
Ordinary Repair – If the repair of the property is a case of ordinary repair, that is the
obligation of the usufructuary; and the expenses that may be incurred in the process are
for the account of the usufructuary. If the usufructuary will not undertake an ordinary
repair, he can be compelled to do so by the naked owner.
Extraordinary Repair – OTH, if the repair is extraordinary, that is the obligation of the
naked owner and the expenses that may be incurred are for the account of the naked
owner.

When is the repair ordinary, when is it extraordinary?

Ordinary
Two requisites must be satisfied in order for the repair to be considered as
ordinary:
 1. The repair must be due to the wear and tear of the property arising from
its normal use/normal wear and tear arising from its normal use;
2. The repair is indispensable for preservation.

If those 2 requisites are present, then that is an ordinary repair.

If both are not satisfied, then the repair is extraordinary.

Extraordinary
If the repair is extraordinary because both the requisites are not present, but if
the repair is necessary for the preservation of the subject matter subject of the
usufruct, what if the naked owner does not want to undertake to repair the
property? Can he be compelled to do so by the usufructuary?
NO. Because after all, it is the naked owner who will bear the loss if that repair is
necessary/indispensable for preservation.
However, in such a situation, the usufructuary may himself choose to undertake
the extraordinary repair and in the process, incur the expenses.
If it is the usufructuary who undertook the extraordinary repair because such
repair is indispensable for preservation, can he demand reimbursement from the
naked owner? Is he entitled to demand reimbursement from the naked owner?
YES, if two (2) requisites are satisfied:
1. If the repair is indeed indispensable for preservation; and
2. If prior to undertaking the extraordinary repair, he first notified the
naked owner for the need of such repair.
If both are satisfied, then he is entitled to reimbursement of the expenses that he
incurred in connection with an extraordinary repair that is indispensable for
preservation. Until he is paid of such amount, he is entitled to a right of retention.

On Taxes
What are those taxes that are for the account of the Usufructuary, and what are those taxes that
are for the account of the Naked Owner?
Tax falls on the capital/property itself subject matter of the usufruct, the payment of that
tax is the obligation of the NAKED OWNER.
Tax falls on the fruits, that is for the account of the USUFRUCTUARY.
Example of a Tax falling on the capital:
Real Estate Tax on the land. Since the real estate tax falls on the capital, the payment of
that is the obligation of the naked owner.
What if the naked owner fails/refuses to pay a tax that is supposed to be on his account
because the tax falls on the capital? What is the remedy of the usufructuary?
The usufructuary may choose to advance the payment of such tax subject to
reimbursement. Until he is reimbursed of the amount that he advanced in connection
with the payment of a tax which is on the account of the naked owner, he is also entitled
to a right of retention.

So, in usufruct, there are two (2) situations where the usufructuary is entitled to a right of
retention even if the usufruct is already terminated:
1. If he incurred extraordinary expenses which are necessary/indispensable for the
purpose of preservation, and prior to the incurring of such necessary expense he
first notified the naked owner of the need for such repair; and
2. If he advanced the payment of taxes which are supposed to be for the account of
the naked owner, because those taxes fall on the capital.
In those 2 situations, the usufructuary is entitled to a right of retention.

Improvements Introduced
Lastly, what are the rights of the usufructuary who introduced an improvement on the property
subject matter of the usufruct?
- He is not entitled to demand reimbursement of the useful expenses that he incurred;
otherwise, had he been granted that right under the law, he can easily improve the
naked owner out of the latter’s property by simply introducing an improvement.

- Instead, the right of the usufructuary who introduced an improvement on the property
subject matter of the usufruct is a LIMITED RIGHT OF REMOVAL.

Bakit limited right of removal? Because he can only remove the improvement if
the removal will not cause injury to the principal.

However, if the removal can be done because it will not cause injury to the
principal/property subject matter of the usufruct, the usufructuary cannot be
prevented from removing EVEN IF the naked owner will choose to appropriate
the improvement and offer to pay the value of such improvement. Kahit na. The
option of removal is potestative on the part of the usufructuary. If he wants to
 remove, and the removal can be done because it will not cause injury to the
property, then he can do so. He cannot be prevented from removing, even if the
owner will be offered to pay for the value of the improvement.

However, if the usufructuary is at the same time liable to the naked owner for
damages because he caused injury to the property subject matter of the usufruct,
the usufructuary may choose to offset his liability for damages with the value of
the improvement that he introduced on the property.

END.