VDA DE ALBAR V.

CARANDANG, 106 PHIL 855- USUFRUCT

FACTS:

Doña Rosario Fabie y Grey was the owner of the lot in the City of Manila with a building and
improvements, and by a will left by her upon her death which was duly probated she devised the naked
ownership of the whole property to Rosario Grey Vda. de Albar, et al. but its usufruct to Josefa Fabie for
life.

During liberation, as a consequence of the fire that gutted the building in many portions of Manila, the
building on the Ongpin lot was burned, leaving only the walls and other improvements that were not
destroyed by the fire.

One Au Pit, a Chinaman, offered to lease the property for a period of five years, at the same time
agreeing to construct on the lot a new building provided the naked owners as well as the usufructuary
sign the agreement of the lease. As the usufructuary maintains that she has the exclusive right to cede
the property by lease and to receive the full rental value by virtue of her right to usufruct while on the
other hand the naked owners maintain that the right of usufruct was extinguished when the building
was destroyed, the right of the usufructory being limited to the legal interest on the value of the lot and
the materials, in order that the agreement of lease may be affected, the parties agreed on a temporary
compromise whereby the naked owners would receive P100.00, or 20% of the monthly rental of
P500.00 and the usufructuary the balance of 80% or P400.00 of said monthly rental. It was likewise
stipulated in the agreement that the title to the building to be constructed would accrue to the land
upon it completion as an integral part of the lot covered by the transfer certificate of title issued in the
name of the naked owners but subject to the right of usufruct of Josefa Fabie. The parties expressly
reserved the right to litigate their respective claims after the termination of the contract of lease to
determine which of said claims was legally correct.

By reason of the destruction of the building on the Ongpin property, the United States War Damage
Commission approved the claim that was presented for the damage caused to the property, paid to and
received by the naked owners. In the meantime, the usufructuary paid the real estate taxes due on the
property at Ongpin for the years 1945 to 1952.

ISSUE:

Whether or not the usufruct included the building and the land? W/N the usufructuary (FABIE) or naked
owner (VDA DE ALBAR) should undertake the reconstruction? W/N the usufructuary should pay the real
estate taxes?

HELD:

The usufruct for life extended to the land and the building. From the above, it is clear that when the
deceased constituted the life usufruct on the rentals "fincas situadas" in Ongpin and Sto. Cristo streets,
she meant to impose the encumbrance both the building and the land on which it is erected for indeed
the building cannot exist without the land. And as this Court well said, "The land, being an indispensable
part of the rented premises cannot be considered as having no rental value whatsoever." Moreover, in
the Spanish language, the term "fincas" has a broad scope; it includes not only building but land as well.
(Diccionario Ingles-Español, por Martines Amador) Since only the building was destroyed and the
usufruct is constituted not only on the building but on the land as well, then the usufruct is not deemed
extinguished by the destruction of the building for under the law usufruct is extinguished only by the
total loss of the thing subject of the encumbrance (Article 603, old Civil Code).
FABIE, the usufructuary has the discretion to reconstruct the building. Of course, this is addressed to the
wisdom and discretion of the usufructuary who, to all intents and purposes is deemed as the
administrator of the property. This has been clarified in the case of Fabie vs. Gutierrez David, 75 Phil.,
536, which was litigated between the same parties and wherein the scope of the same provision of the
will has been the subject of interpretation.

The usufructuary should pay the taxes. We find, however, merit in the contention that the real estate
taxes paid by respondent in her capacity as usufractuary for several years previous to the present
litigation should be paid by her, as she did, instead of by petitioners not only because she bound herself
to pay such taxes in a formal agreement approved by the court in Civil Case No. 1569 of the Court of
First Instance of Manila (Fabie vs. Gutierrez David, supra). In the case, which involved the same parties
and the same properties subject to usufruct, the parties submitted an amicable agreement which was
approved by the court wherein the usufructuary, herein respondent, bound herself to pay all the real
estate taxes, special assessment and insurance premiums, and make all the necessary repairs on each of
the properties covered by the usufruct and in accordance with said agreement, respondent paid all the
taxes for the years 1945 to 1954.

GABAYO v. CUI

FACTS:

Don Mariano sold his 2 lots to two of his children. Later on, he and his children became co-owners of the
property. Don Mariano executed a deed authorizing the children to apply for a loan w/ mortgage with a
stipulation reserving his right to the fruits of the land. The children then constructed a building on the
land and collected rent from the lessee thereof. Much later, when Don Mariano died, his estate was
claiming the fruits of the building.

ISSUE:

Whether or not Don Mariano had a right to fruits of the building?

RULING:

NO.

The deed expressly reserved only to his right to the fruits of the land. He only owned the rent for the
portion of land occupied by the building; thus, the estate could only claim the rent on that piece of land
and not on the entire parcel of land. The children are entitled to the rents of the building. (A usufruct on
the land may be separate from the building.
There should be no rescission of the contract coz the exact amount of rent due and owing to the Don
Mariano’s estate is still unliquidated and undetermined. The trial court has the discretion to grant the
debtor (children) a period within which to pay the rental income from the portion of land owned by the
building because the same has not yet been determined. Article 1191 of the Civil Code grants the right
to rescind but subject to the period that the court will grant.

Moreover, on the issue of co-ownership, the court held that a co-owner cannot simultaneously be a
usufructuary of the same land owned.