PROPERTY – 2ND EXAM possession is disturbed or his title is attacked before taking steps to
vindicate his right. Thus, a buyer of land in 1931, who possesses it
Xandredg Sumpt L. Latog
Chapter 3
QUIETING OF TITLE
Article 476. Whenever there is a cloud on title to real
property or any interest therein, by reason of any instrument, record,
claim, encumbrance or proceeding which is apparently valid or
effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be
brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being
cast upon title to real property or any interest therein.
An action to quiet title is a common-law remedy for the
removal of any cloud or doubt or uncertainty on the title to real
property. It is essential for the plaintiff or complainant to have a
legal or an equitable title to or interest in the real property which is
the subject matter of the action. Also, the deed, claim,
encumbrance or proceeding that is being alleged as a cloud on
plaintiff's title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or legal efficacy
[Robles v. Court of Appeals].
In Realty Sales Enterprises v. IAC, the Supreme Court
held that suits to quiet title are not technically suits in rem, nor are
they, strictly speaking, in personam, but being against the person in
respect of the res, these proceedings are characterized as quasi in
rem and the judgment in such proceedings is conclusive only
between the parties.
Requisites
1. Existence of an instrument (deed or contract) or
record or claim or encumbrance or proceeding;
2. The instrument or proceeding is apparently valid or
effective, and prejudicial to the title;
3. In truth and in fact, invalid, ineffective, voidable or
unenforceable, or extinguished.
NOTE: Please observe that when the instrument is not
valid on its face, the remedy does not apply.
Test to Determine the Existence of a Cloud
If a person were sued for ejectment on the strength of the
contract, does he have to produce evidence in order to defeat the
action? If no evidence other than the contract is needed, it is
because the contract is invalid on its face. If evidence is still
required, it is because the contract is apparently valid. Stated
otherwise, the test is: would the owner of the property in an action
at law brought by the adverse party, and founded upon the
instrument or claim, be required to offer evidence to defeat a
recovery? If proof would be essential, the cloud exists; if proof is
not needed, no cloud is cast.
Does the Action to Quiet Title Prescribe?
It depends:
(a) If the plaintiff is in possession of the property, the
action DOES NOT PRESCRIBE. While the owner continues to be
liable to an action, proceeding, or suit upon the adverse claim, he
has a continuing right to be given aid by the court to ascertain and
determine the nature of such claim and its effect on his title, or to
assert any superior equity in his favor. He may wait until his
Page 1 of 21
from that date may still compel the seller’s successors-in-interest to
execute the proper deed of conveyance in 1954, so that the deed
may be registered [Sapto v. Fabiana]. Prescription cannot be
invoked in an action for reconveyance, which is, in effect an action
to quiet title against the plaintiff therein who is in possession of the
land in question.  As lawful possessor and owner of the disputed
portion, her cause of action for reconveyance which, in effect,
seeks to quiet title to property in one's possession
is imprescriptible [Fernandez v. Court of Appeals].
(b) If the plaintiff is NOT in possession of the property,
the action MAY PRESCRIBE. If somebody else has possession,
the period of prescription for the recovery of the land is either 10 or
30 years, depending on ordinary or extraordinary prescription
An action to quiet title or to remove cloud may not be
brought for the purpose of settling a boundary dispute
There is no allegation or evidence of any muniment of
title, proceeding, written contract, or paper showing any color of
title in the defendant, which could cast a shadow on the title of
complainants to any part of the land; there is no overlapping of
description in the muniments held by either. The land of
complainants and defendant join. The line which separates them is
in dispute and is to be determined by evidence aliunde. Each
admits that the other has title up to his line wherever it may be, and
the title papers of neither fix its precise location. So that there is no
paper the existence of which clouds the title of either party, and
nothing could be delivered up and cancelled under the decree of the
court undertaking to remove a cloud [Vda De Aviles v Court of
Appeals].
Vda. De Aviles v. Court of Appeals
Held: Petitioners  have wholly misapprehended the  import of
the foregoing rule by claiming that respondent Court  erred in  holding  that 
there was "no xxx evidence of any muniment of title, proceeding, written
contract, xxx", and that there were, as a matter of fact, two such contracts,
viz., (i) the Agreement of Partition executed by private respondent and his
brothers (including the petitioners’ father and predecessor-in-interest), in
which their respective shares in the inherited property were agreed upon,
and (ii) the Deed of Sale evidencing the redemption by petitioner Anastacia
Vda. de Aviles of the subject property in a foreclosure sale. However, these
documents in no way constitute a cloud or cast a doubt upon the title of
petitioners. Rather, the uncertainty arises from the parties’ failure to situate
and fix the boundary between their respective properties.
As correctly held by the respondent Court, "(i)n fact, both
plaintiffs and defendant admitted the existence of the agreement of partition
dated June 8, 1957 and in accordance therewith, a fixed area was alloted
(sic) to them and that the only controversy is whether these lands were
properly measured. There is no adverse claim by the defendant"which is
apparently valid, but is, in truth and in fact, invalid, ineffective, voidable, or
unenforceable" and which constitutes a cloud thereon.
Corollarily, and equally as clear, the construction of the bamboo
fence enclosing the disputed property and the moving of earthen dikes are
not the "clouds" or "doubts" which can be removed in an action for quieting
of title.
Article 477. The plaintiff must have legal or equitable title
to, or interest in the real property which is the subject matter of the
action. He need not be in possession of said property.
Legal title denotes registered ownership, while equitable
title means beneficial ownership. In the absence of such legal or
equitable title, or interest, there is no cloud to be prevented or
removed. The competent court is tasked to determine the respective
rights of the complainant and other claimants, not only to place
things in their proper place, to make the one who has no rights to
said immovable respect and not disturb the other, but also for the
benefit of both, so that he who has the right would see every cloud
of doubt over the property dissipated, and he could afterwards
without fear introduce the improvements he may desire, to use, and
even to abuse the property as he deems best.
But 'for an action to quiet title to prosper, two
indispensable requisites must concur, namely: (1) the plaintiff or
complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (2) the deed, claim,
encumbrance, or proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy [Sps. Basa v. Vda De
Senly]. In order that a plaintiff may draw to himself an equitable
title, he must show that the one from whom he derives his right had
himself a right to transfer [Heirs of Extramadura v. Extramadura].  part of a thing which is not physically divided.” A co-ownership is
It is not necessary, therefore, that the person seeking to
quiet his title be the registered owner of the property in question
[Mamadsual v. Monson]. When Article 477 speaks of “title” to
property, it does not necessarily denote a certifi cate of title issued
in favor of the person fi ling the suit [Maestrado v. Court of
Appeals]. It can connote acquisitive prescription by possession in
the concept of an owner thereof.
Heirs of Extramadura v. Extramadura
Held: Contrary to the position taken by the CA, the Court finds
that Jose satisfactorily established his equitable title over the subject land
entitling him - and now, petitioners as his successors-in-interest - to the
removal of the cloud or doubt thereon, particularly, the claim of
respondents that they are the owners thereof. Un this case, Jose's title to the
subject land was derived through a contract of sale, as evidenced by a
notarized document denominated as Deed of Absolute Sale dated December
18, 1984, whereby the previous owner/s, Corazon, the widow of Alfredo,
transferred the subject land and two (2) other adjoining parcels to Jose for
and in consideration of P6,000.00, for which Jose duly paid the required
capital gains tax. That Corazon had the right to transfer the land by virtue of
her ownership thereof was clearly established during the trial.
Not only did Jose exercise his right as owner of the subject land
by receiving the fruits thereof, he likewise performed his duties by paying
taxes therefor, evidence of which he presented in court during
trial. "Although tax declarations or realty tax payments of property are not
conclusive evidence of ownership, nevertheless, they are good indicia of
possession in the concept of owner for no one in his right mind would be
paying taxes for a property that is not in his actual or at least constructive
possession. They constitute at least proof that the holder has a claim of title
over the property. The voluntary declaration of a piece of property for
taxation purposes manifests not only one's sincere and honest desire to
obtain title to the property and announces his adverse claim against the
State and all other interested parties, but also the intention to contribute
needed revenues to the Government. Such an act strengthens one's bona
fide claim of acquisition of ownership."
Thus, by sheer preponderance of evidence, the Court concludes
that Jose - not only through the execution of the Deed of Absolute Sale in
his favor, but also as evinced by his exercise of the rights and obligations as
owner thereof- was able to prove his title over the subject land. Therefore,
the action for quieting of title in Civil Case No. 2005-7552 should prosper
to the benefit of his heirs, herein petitioners.
Article 478. There may also be an action to quiet title or
remove a cloud therefrom when the contract, instrument or other
obligation has been extinguished or has terminated, or has been barred
by extinctive prescription.
Page 2 of 21
Two Instances Where the Action May Be Used Two
cases are mentioned in this article:
(a) when the contract, etc., has ended;
(b) when the action is barred by extinctive prescription.
TITLE III
CO-OWNERSHIP
Article 484. There is co-ownership whenever the ownership
of an undivided thing or right belongs to different persons. In default
of contracts, or of special provisions, co-ownership shall be governed
by the provisions of this Title.
Co-ownership is that state where an undivided thing or
right belongs to two or more persons. It is “the right of common
dominion which two or more persons have in a spiritual (or ideal)
not a juridical person, nor is it granted any form of juridical
personality. Thus, it cannot sue in court. Co-owners may, of
course, litigate in their individual capacities.
In the case of Samaniego v. Villajin, the Supreme Court
held that under this Article, co-ownership may exist as to rights,
and is not limited to corporeal things.
Characteristics of co-ownership:
1. Plurality of subjects;
2. Singularity or unity of object, there is one undivided
object;
3. Recognition of ideal shares.
In de Guia v. Court of Appeals, the Supreme Court held
that there is no co-ownership when the different portions owner by
different people are already concretely determined and separately
identifiable even if not yet technically described.
By the nature of co-ownership, a co-owner cannot point
to specific portion of the property owned in common as his own
because his share therein remains intangible. During the existence
of the co-ownership, therefore, no co-owner can claim title to any
definite portion of the community property until the partition
thereof, and prior to the partition, all that the co-owner has is an
ideal or abstract quota or proportionate share in the entire land or
thing [City of Mandaluyong v. Aguilar]. In Vda. de Cabrera v.
Court of Appeals, however, the Supreme Court had the occasion to
hold that where the transferees of an undivided portion of the land
allowed a co-owner of the property to occupy a definite portion
thereof, the possessor is in a better condition or right than said
transferees. Such undisturbed possession, according to the Court,
had the effect of a partial partition of the co-owned property which
entitles the possessor to the definite portion which he occupies.
What Governs Co-ownership?
(a) contracts
(b) special legal provisions
(c) provisions of the Title on Co-ownership
In default of the 1st, apply the 2nd; in the absence of the
2nd, apply the 3rd.
Sources of Co-ownership
Co-ownership may be created by any of the following
causes:

(1) By law: Examples:
(a) Co-ownership will arise if by the will of their
owners two things of the same kind or different kinds are
mixed.37 Co-ownership will likewise arise if by the will of only
one owner, but in good faith, two things of the same or different
kinds are mixed or confused.
(b) When a man and woman who are capacitated to
marry each other, live exclusively with each other as husband
and wife without the benefit of marriage or under a void
marriage, the property acquired by both of them through their
work or industry shall be governed by the rules on co-
ownership. In cases of cohabitation not falling under Article 147
of the Family Code, only the properties acquired by both of the
parties though their actual joint contribution of money, property,
or industry shall be owned by them in common in proportion to
their respective contributions.
(2) By contract: An agreement to keep the thing
undivided for a certain period, not exceeding ten years, shall be
valid. This term may be extended by a new agreement.
(3) By succession: Where there are two or more heirs,
the whole estate of the decedent is, before its partition, owned in
common by such heirs, subject to the payment of debts of the
deceased. The testator may likewise prohibit the partition of the
estate among the heirs for a period not to exceed twenty (20) years.
(4) By fortuitous event or chance: Co-ownership will
arise if two things of the same kind or different kinds are mixed by
chance and the things are not separable without injury.
(5) By occupancy: As when two or more persons catch a
wild pig or get forest products45 or when a hidden treasure is
accidentally discovered by a stranger, who is not a trespasser, on
the land of another.
Distinguished From Partnership
Co-ownership does not of itself establish a partnership,
whether such co-owners do or do not share any profi ts made by
the use of the property. These two concepts are not identical and
they may be distinguished from each other, as follows:
(1) As to creation: Co-ownership may exist without the
necessity of a contract. As will be discussed in infra § 62.7, a co-
ownership is created not only by reason of contracts. A partnership,
on the other hand, requires the existence of a contract in order to
arise. The definition by the Civil Code of a partnership refers to it
as a contract.
(2) As to personality: A co-ownership does not possess
a juridical personality distinct from the co-owners. On the other
hand, the partnership has a juridical personality separate and
distinct from that of each of the partners.
(3) As to purpose: In order to constitute a partnership, it
is important that there must be an agreement to divide the profits
among the partners. Hence, the idea of common profit that may be
derived from the things or services contributed to the partnership is
an essential feature thereof. This is absent, however, in co-
ownership, which is only for the purpose of common enjoyment of
the thing owned in common.
(4) As to duration: In co-ownership, an agreement not to
divide the property for more than ten (10) years is not valid with
respect to the excess; whereas, in partnership there is no limit as to
the time of its existence.
(5) As to the effect of death: In co-ownership, the death
of a coowner does not dissolve the co-ownership, but in partnership
the death of a partner brings about the dissolution of the
partnership.
Page 3 of 21
(6) As to the disposal of share: In co-ownership, a co-
owner may freely dispose of his share but a partner has no power
of disposal so as to make the buyer a partner unless agreed upon by
all the other partners.
Art. 485. The share of the co-owners, in the benefits as well
as in the charges, shall be proportional to their respective interests.
Any stipulation in a contract to the contrary shall be void. The portions
belonging to the co-owners in the co-ownership shall be presumed
equal, unless the contrary is proved.
Rules on the shares of co-owners in the benefits and
charges:
a. The share in the benefits and charges is proportional
to the interest of each. Hence, if one co-owner owns
2/3, he shares 2/3 of the taxes;
b. Contrary stipulation is void. To do so would be to
run against the nature of co-ownership;
c. Each co-owner shares proportionately in the
accretion or alluvium of the property. This is
because an increase in area benefits all.
Article 486. Each co-owner may use the thing owned in
common, provided he does so in accordance with the purpose for which
it is intended and in such a way as not to injure the interest of the co-
ownership or prevent the other co-owners from using it according to
their rights. The purpose of the co-ownership may be changed by
agreement, express or implied.
LIMITATIONs on co-owner’s right to use the thing
owned in common:
a. Can be used only according to the purpose for
which it was intended;
To determine the purpose for which the property is
intended, the agreement of the co-owners (express or implied)
should govern. In default of any agreement: (1) that to which the
thing is ordinarily adapted according to its nature or; (2) the use to
which it has been previously devoted.
Thus, if the co-owners of a vessel agree that it shall be
used as a warehouse or storage place for grain, one of the co-
owners cannot order the grain removed and use the vessel for
maritime transportation. Mere tolerance on the part of the co-
owners cannot legalize the change in the use of the thing from that
intended by the co-owners. Prescription cannot be invoked to
establish a right to such different use, because mere tolerance
cannot be the basis of prescription.
In the case of Aguilar v. Court of Appeals, it was held
that being a co-owner respondent has the right to use the house and
lot without paying any compensation to the petitioner, as he may
use the property owned in common so long as it is in accordance
with the purpose which it is intended and in a manner not injurious
to the interest of the other co-owners.
Each co-owner of property held pro indiviso exercises his
rights over the whole property and may use and enjoy the same
with no other limitation than that he shall not injure the interest of
his co-owners, the reason being that until a division is made, the
respective share of each cannot be determined and every co-owner
exercises, together with his co-participants joint ownership over the
pro indiviso property, in addition to his use and enjoyment of the
same.
 b.The right to use must not prejudice the interest
of the co-owners;
A co-owner cannot devote community property to his
exclusive use to the prejudice of the co-ownership. Thus, where the
co-owners have agreed to lease a building owned in common, a co-
owner cannot retain it for his use without paying the proper rent.
c. The right to use must not be exercised to prevent
others from making use thereof according to
their own right.
The right of enjoyment by each co-owner is limited by a
similar right of the other co-owners. Thus, a co-owner cannot
devote common property to his exclusive use to the prejudice of
the co-ownership [De Guia v. Court of Appeals]. Hence, if the
subject is a residential house, all the co-owners may live there with
their respective families to the extent possible. However, if one co-
owner alone occupies the entire house without opposition from the
other co-owners, and there is no lease agreement, the other co-
owners cannot demand the payment of rent. Conversely, if there is
an agreement to lease the house, the co-owners can demand rent
from the co-owner who dwells in the house.
The co-owners can either exercise an equal right to live
in the house, or agree to lease it. If they fail to exercise any of these
options, they must bear the consequences. It would be unjust to
require the coowner to pay rent after the co-owners by their silence
have allowed him to use the property.
In case the co-owners agree to lease a building owned in
common, a co-owner cannot retain it for his use without paying the
proper rent. Moreover, where part of the property is occupied
exclusively by some co-owners for the exploitation of an industry,
the other co-owners become co-participants in the accessions of the
property and should share in its net profits.
Article 487. Any one of the co-owners may bring an action in
ejectment.
This article covers all kinds of action for the recovery of
possession, i.e., forcible entry and unlawful detainer (accion
interdictal), recovery of possession (accion publiciana), and
recovery of ownership (accion de reivindicacion). As explained by
the renowned civilest, Professor Arturo M. Tolentino:
A co-owner may bring such an action, without the
necessity of joining all the other co-owners as co-plaintiffs,
because the suit is deemed to be instituted for the benefit of
all. If the action is for the benefit of the plaintiff alone, such that
he claims possession for himself and not for the co-ownership,
the action will not prosper.
In the more recent case of Carandang v. Heirs of De
Guzman, this Court declared that a co-owner is not even a
necessary party to an action for ejectment, for complete relief can
be afforded even in his absence, thus:
In sum, in suits to recover properties, all co-owners
are real parties in interest. However, pursuant to Article 487 of
the Civil Code and the relevant jurisprudence, any one of them
may bring an action, any kind of action for the recovery of co-
owned properties. Therefore, only one of the co-owners, namely
the co-owner who filed the suit for the recovery of the co-owned
property, is an indispensable party thereto. The other co-owners
are not indispensable parties. They are not even necessary
parties, for a complete relief can be afforded in the suit even
Page 4 of 21
without their participation, since the suit is presumed to have
been filed for the benefit of all co-owners
Castigador v. Lauron
In this case, although petitioner alone filed the complaint for
unlawful detainer, he stated in the complaint that he is one of the heirs of
the late Lilia Castigador, his mother, who inherited the subject lot, from her
parents. Petitioner did not claim exclusive ownership of the subject lot, but
he filed the complaint for the purpose of recovering its possession which
would redound to the benefit of the co-owners. Since petitioner recognized
the existence of a co-ownership, he, as a co-owner, can bring the action
without the necessity of joining all the other co-owners as co-plaintiffs.
Effect of Judgment Upon the Other Co-Owners
While a co-owner may bring an action in ejectment under
Article 487 without the necessity of joining all the other co-owners
as co-plaintiffs because the suit is deemed to be instituted for the
benefit of all, any adverse judgment cannot prejudice the rights of
the unimpleaded co-owners [Baloloy v. Hular]. However, any
judgment of the court in favor of the co-owner will benefit the
others.
Article 488. Each co-owner shall have a right to compel the
other co-owners to contribute to the expenses of preservation of the
thing or right owned in common and to the taxes. Any one of the latter
may exempt himself from this obligation by renouncing so much of his
undivided interest as may be equivalent to his share of the expenses
and taxes. No such waiver shall be made if it is prejudicial to the co-
ownership. (VIP)
The law grants each co-owner the right to demand
contribution from the other co-owners for any and all expenses he
incurred for the purpose of preserving the thing or right owned in
common, even if the repairs for preservation were made without
the consent of the other co-owners. Note that under Article 489, a
co-owner who desires to make the necessary repairs is not required
to secure the consent of all the co-owners. What the law requires is
that he must, if practicable, notify the other co-owners of the
necessity of such repair prior to undertaking the same.
Consequently, any opposition on the part of the other co-owners
for the making of such necessary repairs does not deprive the co-
owner who made the advances from demanding contributions from
the other co-owners. Note that under the law, repairs for
preservation may be made at the will of only one of the co-owners.
Option of renunciation
While the other co-owners can be compelled to
contribute proportionately to the expenses incurred for the purpose
of preserving the thing or right owned in common, they are given
by law an option of “renouncing so much of (their) undivided
interest as may be equivalent to (their) share of the expenses and
taxes,” in lieu of paying their proportionate contribution to such
expenses.
For example, A, B and C are co-owners of a car valued at
P300,000.00. Assuming that “A” had the car repaired for the
purpose of preserving it and incurred the sum of P30,000.00 in the
process. Assuming that the interest of the three in the co-ownership
is equal (or P100,000.00 each), B and C is required to contribute
P10,000.00 each to the expenses so incurred. If “B,” for example,
does not want to shell out P10,000.00 and opts, instead, to
renounce so much of his undivided interest as may be equivalent to
his share of the expenses, he is required to renounce 1/10 of his
share in favor of the co-owner who incurred the expenses.

Limitation on the Exercise of the Option of
Renunciation
Article 488 prohibits the exercise of the option of
renunciation if it is prejudicial to the interest of the co-ownership.
For example, if A, B and C are co-owners of a property which is in
need of immediate repairs for preservation but the amount thereof
is more than A and B, together, can sustain, the law will not allow
C to opt for renunciation, in lieu of his contribution to the
expenses.100 Such waiver is not allowed because it will be
prejudicial to the interest of the co-ownership.
Article 489. Repairs for preservation may be made at the
will of one of the co-owners, but he must, if practicable, first notify his
co-owners of the necessity for such repairs. Expenses to improve or
embellish the thing shall be decided upon by a majority as determined
in Article 492.
When Notice Required
What the law requires prior to the undertaking of any
repair on the property owned in common for the purpose of
preserving it is mere notice to the other co-owners of the necessity
of such repair. In other words, a co-owner who desires to undertake
such repair is not required to secure the consent of the other co-
owners. The giving of notice, however, is required only if the same
is “practicable” given the circumstances by which the repair is to
be undertaken. Hence, if the repairs are urgent and any delay will
be detrimental to the interest of the co-ownership, prior notification
is no longer necessary and a co-owner may already undertake such
repairs without need of giving prior notice to the other co-owners.
Article 490. Whenever the different stories of a house belong
to different owners, if the titles of ownership do not specify the terms
under which they should contribute to the necessary expenses and
there exists no agreement on the subject, the following rules shall be
observed:
(1) The main and party walls, the roof and the other things
used in common, shall be preserved at the expense of all the owners in
proportion to the value of the story belonging to each;
(2) Each owner shall bear the cost of maintaining the floor of
his story; the floor of the entrance, front door, common yard and
sanitary works common to all, shall be maintained at the expense of all
the owners pro rata;
(3) The stairs from the entrance to the first story shall be
maintained at the expense of all the owners pro rata, with the exception
of the owner of the ground floor; the stairs from the fi rst to the second
story shall be preserved at the expense of all, except the owner of the
ground fl or and the owner of the first story; and so on successively.
R.A. 4276
Perpendicular Co-ownership
A “condominium” is an interest in real property
consisting of a separate interest in a unit in a residential, industrial
or commercial building and an undivided interest in common
directly or indirectly, in the land on which it is located and in other
common areas of the building. “Common areas” in a condominium
project refer to the entire project excepting all units separately
granted or held or reserved;108 while “unit” means a part of the
condominium project intended for any type of independent use or
ownership, including one or more rooms or spaces located in one
or more floors (or part or parts of floors) in a building or buildings
and such accessories as may be appended thereto.
Nature of Ownership in Condominium Projects
Page 5 of 21
With respect to the condominium unit, the same is owned
separately and individually by the unit owner. With respect,
however, to the land and to the common areas in the condominium
project, there are two situations contemplated in Sections 2 and 5
of the Condominium Act. The first contemplates of a situation
where the land and other common areas in the condominium
project are held by the owners of separate units as co-owners
thereof. In such a situation, there is co-ownership among the unit
owners, with respect to the undivided interest in the land and
common areas. The second contemplates of a situation where the
land and other common areas are to be held by the condominium
corporation, in which case, the owners of the individual units are
automatically considered members or shareholders of the
corporation. Under the provisions of the Condominium Act, the
undivided interest in the common areas or the shareholding in the
common areas is inseparable from the unit to which it is only an
appurtenant.
Article 491. None of the co-owners shall, without the consent
of the others, make alterations in the thing owned in common, even
though benefits for all would result therefrom. However, if the
withholding of the consent by one or more of the co-owners is clearly
prejudicial to the common interest, the courts may afford adequate
relief. (VIP)
This article deals with ALTERATIONS (whether or not
common benefits would result).
An alteration is a change (a) which is more or less
permanent; (b) which changes the use of the thing; and (c) which
prejudices the condition of the thing or its enjoyment by the others.
An example would be a sale, donation, or mortgage of the property.
In determining alterations, it is sometimes necessary to
consider the nature of the thing itself. Thus, when a thing does not
require any modification for its enjoyment, whatever modifications
or change that is made will be considered an alteration. But when a
thing in its nature requires changes, such as an industry or business,
in its exploitation, such modifications and variations should be
considered as falling under acts of administration.
NOTES:
a. Article 491 requires unanimity of consent, whether
tacit or express.
b. Effect of tacit consent – although the co-owner who
is deemed to have tacitly consented to the alteration
cannot ask for the demolition, neither can he be held
liable to answer for any part of the expenses
incurred therein, because the obligation to pay such
expenses cannot be deemed to be the subject of his
tacit consent.
Effects of unauthorized alterations
the alteration is made without the consent of all the co-
owners, the act is illegal and invalid, being an act executed against
the provision of a mandatory law. The other co-owners can compel
the erring co-owner to undo what has been done, at the latter’s
expense. This remedy is explicitly authorized by the provisions of
Article 1168 of the New Civil Code which provides that “when the
obligation consists in not doing, and the obligor does what has been
forbidden him, it shall also be undone at his expense.” In addition,
the erring co-owner shall likewise be liable for any losses or
damages which the co-ownership may have suffered.
 In PNB v. Court of Appeals in relation to Castro v. variations should be considered as falling under the acts of simple
Atienza, the Supreme Court held that the alienation of a common administration.
property by a co-owner without the unanimous consent of all the
co-owners is void not because the nature of the thing had been No Majority or Act of Majority Is Seriously Prejudicial
changed or altered, but because of the lack of unanimous consent Should there be no majority, or should the resolution of
required by law – as acts of alienation such as sale, donation, the majority be seriously prejudicial to those interested in the
mortgage, lease for more than one year, etc. are acts of ownership property owned in common, the court, at the instance of an
which could be exercised only by all. The transaction is valid only interested party, shall order such measures as it may deem proper,
with respect to the share of the co-owner alienating. including the appointment of an administrator. According to
In Lopez v. Ilustre, it was held that what a co-owner may Manresa,140 the following acts of the majority are considered
dispose of is only his undivided share, which shall be limited to the prejudicial to the co-ownership: (1) when the resolution calls for a
portion which may be allotted to him upon the termination of the substantial change or alteration of the common property or of the
co-ownership. He has no right to divide the property into parts and use to which it has been dedicated by agreement or by its nature;
then convey one party by metes and bounds. (2) when the resolution goes beyond the limit of mere
administration or invades proprietary rights of the co-owners in
Article 492. For the administration and better enjoyment of violation of Article 491; (3) when the majority authorizes lease,
the thing owned in common, the resolutions of the majority of the co- loans or other contracts without security, exposing the thing to
owners shall be binding. There shall be no majority unless the serious danger to the prejudice of the other co-owners; and (4)
resolution is approved by the co-owners who represent the controlling when the majority refuses to dismiss an administrator who is guilty
interest in the object of the co-ownership. Should there be no majority,
of fraud or negligence in his management, or he does not have the
or should the resolution of the majority be seriously prejudicial to
those interested in the property owned in common, the court, at the
respectability, aptitude, and solvency required of persons holding
instance of an interested party, shall order such measures as it may such positions.
deem proper, including the appointment of an administrator.
Whenever a part of the thing belongs exclusively to one of the co- Article 493. Each co-owner shall have the full ownership of
owners, and the remainder is owned in common, the preceding his part and of the fruits and benefits pertaining thereto, and he may
provisions shall apply only to the part owned in common. therefore alienate, assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights are involved. But
With respect to acts of administration and better the effect of the alienation or the mortgage, with respect to the co-
owners, shall be limited to the portion which may be allotted to him in
enjoyment of the thing owned in common, the resolution of the
the division upon the termination of the co-ownership.
majority of the co-owners shall be sufficient. Under the law on co-
ownership, the terms “majority of the co-owners” do not refer to
Things to remember as regards the rule on ideal share:
numerical majority but to majority of interest. The law provides
1. Each co-owner has full ownership of his part, and of
that “there shall be no majority unless the resolution is approved by
his share in the fruits and benefits;
the co-owners who represent the controlling interest in the object of
2. He may alienate, assign or mortgage his ideal share.
the co-ownership.” For example, if A, B and C are co-owners of a
parcel of land where the share of A is 3/5 while the share of B and
A co-owner has a right to mortgage his undivided
C is 1/5 each, the consent of “A” alone will be sufficient for the
interest. He or she cannot mortgage or otherwise dispose of them in
making of an act of administration. In this example, “A” represents
its entirety without the consent of the other co-owners. Since a co-
the controlling interest in the co-ownership, thus, “A” alone shall
owner is entitled to sell his undivided share, a sale of the entire
be considered as the “majority of the co-owners” for the purpose of
property by one co-owner without the consent of the other co-
approving an act of alteration.
owners is not null and void. Even if a co-owner sells the whole
property as his, the sale will affect only his share but not those of
Meaning of acts of administration
the other co-owners who did not consent to the sale [Paulmitan v.
Repairs for preservation of the thing owned in common
Court of Appeals].
may be made at the will of only one of the co-owners. Hence, the
The Supreme Court held in Ong v. Court of Appeals, that
resolution of the majority of the co-owners is not necessary. The
the heirs as co-owners shall each have the full ownership of his part
act of repairing the thing owned in common for the purpose of
and the fruits and benefits pertaining to it. An heir may, therefore,
preserving it is not considered, therefore, as an act of
alienate, assign, or mortgage it, and even substitute another person
administration. On the other hand, expenses to improve or
in its enjoyment, except when personal rights are involved. But the
embellish the thing shall be decided upon by a majority as
effect of alienation or mortgage, with respect to the co-owners,
determined in Article 492. Hence, an act of administration refers to
shall be limited to the portion which may be allotted to him in the
the improvement or embellishment of the thing owned in common
division upon the termination of the co-ownership.
for the purpose of better enjoyment. As distinguished from acts of
alteration, which have a more permanent result and relate to the
Right to alienate is limited to ideal shares
substance or form of the thing, acts of simple administration refer
While under Article 493 of the New Civil Code, each co-
to the enjoyment of the thing and are of a transitory character. In
owner shall have the full ownership of his part and of the fruits and
determining whether an act is that of administration or alteration,
benefits pertaining thereto and he may alienate, assign or mortgage
the nature of the thing itself must be considered. When the
it, and even substitute another person in its enjoyment, the effect of
enjoyment of the thing does not require its modification, whatever
the alienation or the mortgage with respect to the co-owners, shall
modification or change that is done will be considered an alteration
be limited, by mandate of the same article, to the portion which
within the terms of Article 491. However, when the thing in its
may be allotted to him in the division upon the termination of the
nature requires changes in its exploitation, such modifications and
co-ownership. He has no right to sell or alienate a concrete,
Page 6 of 21
specific, or determinate part of the thing in common to the
exclusion of the other co-owners because his right over the
thing is represented by an abstract or ideal portion without any
physical adjudication. An individual co-owner cannot adjudicate
to himself or claim title to any definite portion of the land or thing
owned in common until its actual partition by agreement or judicial
decree. Prior to that time all that the co-owner has is an ideal or
abstract quota or proportionate share in the entire thing owned in
common by all the co-owners. What a co owner may dispose of is
only his undivided aliquot share, which shall be limited to the
portion that may be allotted to him upon partition. Before partition,
a co-heir can only sell his successional rights [Carvajas v. Court of
Appeals].
Magsanoc v. Pangasinan Loan Bank
Held: It is undisputed that at the time the Real Estate Mortgage
was constituted on July 1, 1991, Roque was already deceased. Upon his
death on April 17, 1991, the conjugal partnership between him and his
spouse, Susana, was dissolved pursuant to Article 126 (1) of the Family
Code, and an implied ordinary co-ownership arose among Susana and the
other heirs of Roque with respect to his share in the assets of the conjugal
partnership pending liquidation. The ensuing implied ordinary co-
ownership is governed by Article 493 of the Civil Code.
Thus, although Susana is a co-owner with her children with
respect to Roque's share in the conjugal partnership, she could not yet assert
or claim title to any specific portion thereof without an actual partition of
the property being first done either by agreement or by judicial decree.
While she herself as co-owner had the right to mortgage or even sell her
undivided interest in the subject property, she could not mortgage or
otherwise dispose of the same in its entirety without the consent of the other
co-owners. Consequently, the validity of the subject Real Estate Mortgage
and the subsequent foreclosure proceedings therefor conducted in favor of
respondent bank should be limited only to the portion which may be
allotted to it, as Susana's successor-in-interest, in the event of partition,
thereby making it a co-owner with petitioners pending partition. 
Heirs of Jarque v. Jarque
Held: Accordingly, while Servanda may sell her undivided
aliquot share as a coowner, she may not alienate the whole of Lot No. 2560
to the exclusion of the other co-owners. More importantly, Servanda cannot
claim specific title to the property. Thus, what may only be considered sold
to Benito, and which was eventually redeemed by Dominga, is Servanda's
right over her undivided aliquot share in the property-not the right over her
lot. Thus, Dominga may only claim such rights that Servanda had possessed
at the time of the sale. Only can sell the ideal share. Once a buyer buys the
ideal share, he becomes a co-owner. Late on upon division, each will get
their specific portion and the co-onweship will no longer exist.
Example of personal right
4 sisters living in the same residence, all of them are co-
owners, all of them are residing in the same place One of the
sisters, wants to sell her share and she sells it to a stranger. Can she
do that? Ordinarily she can do that, except when personal rights are
involved.
She cannot do that as she would require the consent of
her sisters as this involves personal rights. If she sells it to a
stranger, the person would intrude into their privacy especially
when the stranger is a male person, together with the 3 sisters.
Article 494. No co-owner shall be obliged to remain in the
co-ownership. Each co-owner may demand at any time the partition of
the thing owned in common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a
certain period of time, not exceeding ten years, shall be valid. This term
may be extended by a new agreement.
Page 7 of 21
A donor or testator may prohibit partition for a period
which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by
law.
No prescription shall run in favor of a co-owner or co-heir
against his co-owners or co-heirs so long as he expressly or impliedly
recognizes the co-ownership.
To remain in a co-ownership would be to subject a
person to the desires of the rest. Conflicts in management being
bound to arise, the law as much as possible discourages co-
ownership. Hence, no co-owner is, as a rule, obliged to remain in
the co-ownership.
When a Co-owner May Not Successfully Demand a
Partition (BAR)
(a) If by agreement (for a period not exceeding 10 years),
partition is prohibited. [NOTE: The term may be extended by a
new agreement, but only after the expiration of the original period,
otherwise the intention of the law would be defeated.].
(b) When partition is prohibited by a donor or testator
(for a period not exceeding twenty years) — from whom the
property came.
(c) When partition is prohibited by law (as in the case of
the conjugal partnership property, except in certain instances).
(d) When a physical partition would render the property
unserviceable, but in this case, the property may be allotted to one
of the co-owners, who shall indemnify the others, or it will be sold,
and the proceeds distributed. (Art. 498).
(e) When the legal nature of the common property does
not allow partition (like in the case of party walls).
Prohibition to Partition Because of an Agreement
(a) The period must not extend more than 10 years. (Art.
494).
(b) If it exceeds 10 years, the stipulation is valid only
insofar as the first 10 years are concerned.
(c) There can be an extension but only after the original
period has expired.
(d) After the fi rst extension, there can be another, and so
on indefinitely, as long as for each extension, the period of 10 years
is not exceeded
Rule on Prescription
As a general rule, prescription against a co-owner does
not apply. Partition means the segregation or division of a property
in common to those to whom it belongs in parts. A co-owner has
the right to demand at anytime the partition or segregation of his
share in the thing owned in common. The right to demand partition
does not prescribe as long as the co-ownership is recognized.
Exception:
a. When a co-owner gives notice to the other co-
owners that he is repudiating the co-ownership and
that he is claiming ownership of the entire property;
b. The requirement of continuous, open, public,
adverse possession for a period of time required
must be met.
In order that the title may prescribe in favor of a co-
owner, the following requisites must concur:
1. The co-owner has performed unequivocal acts of
repudiation amounting to an ouster of the other co-
owners;
 2. Such positive acts of repudiation have been made
known to the other co-owners;
3. The evidence thereof is clear and convincing.
NOTE: The period of prescription commences from the
date of the repudiation.
In Salvador v. Court of Appeals, it was held that a mere
silent possession by a co-owner, his receipts of rents, fruits, or
profits from the property, the erection of buldings and fences and
the planting of trees thereon, and the payment of land taxes, cannot
serve as proof of exclusive ownership, if it is not borne out by clear
and convincing evidence that he exercised acts of possession which
unequivocably constituted an ouster or deprivation of the rights of
the other co-owners.
Title V
POSSESSION
Chapter I
POSSESSION AND THE KINDS THEREOF
Article 523. Possession is the holding of a thing or the
enjoyment of a right.
Ownership is different from possession. A person may be
declared the owner, but he may not be entitled to possession. The
possession (in the concept of holder) may be in the hands of
another, such as a lessee or a tenant. A person may have introduced
improvements thereon of which he may not be deprived without
due hearing. He may have other valid defenses to resist surrender
of possession. Hence, a judgment for ownership does NOT
necessarily include possession as a necessary incident [Jabon v.
Alo]. This is moreover true only if there is the possibility that the
actual possessor has some rights which must be respected and
defined. Where the actual possessor has no valid right over the
property enforceable even against the owner thereof, the surrender
of the possession to the adjudged owner should be considered
included in the judgment [Perez v. Evite].
Requisites or Elements of Possession
(a) There must be a holding or control (occupancy, or
taking or apprehension) of a thing or a right. (This holding may be
actual or constructive.)
(b) There must be a deliberate intention to possess
(animus possidendi). This is a state of the mind.
(c) The possession must be by virtue of one’s own right.
(This may be because he is an owner or because of a right derived
from the owner such as that of a tenant.)
Classification of Possession
(1) Possession in one’s own name and possession in the
name of another (Article 524);
(2) Possession in the concept of an owner and possession
in the concept of a holder (Article 525); and
(3) Possession in good faith and possession in bad faith
(Article 526).
Degrees of Possession According to Sanchez Roman:
(1) Possession without any title or right whatsoever, as
that of a thief;
Page 8 of 21
(2) Possession with a juridical title or right but not in the
concept of owner, as that of a lessee or depositary;
(3) Possession with a just title, or a title suffi cient to
transfer ownership, but not from the true owner, as that of a buyer
in good faith; and
(4) Possession derived from the right of ownership or
possession with a just title from the true owner. This is the
possession that springs from ownership.
Article 524. Possession may be exercised in one’s own name
or in that of another.
Names Under Which Possession May Be Exercised
(a) one’s own name
(b) name of another
Example: I may possess a piece of land myself or thru
my agent. Here if I possess the land myself, this is possession in
one’s own name; on the other hand, the agent possesses not in his
own name but in that of another.
Possession in Another’s Name
(a) Voluntary — as when an agent possesses for the
principal (by virtue of agreement).
(b) Necessary — as when a mother possesses for a child
still in the maternal womb. [NOTE: Here the mother does not
possess the child; she possesses FOR him.].
(c) Unauthorized — (This will become the principal’s
possession only after there has been a ratifi cation without
prejudice to the effects of negotiorum gestio.)
Article 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.
1. Possession in the concept of the owner
Possession may be had in one of two ways: possession in
the concept of an owner and possession of a holder. A possessor in
the concept of an owner may be the owner himself or one who
claims to be so. On the other hand, one who possesses as a mere
holder acknowledges in another a superior right which he believes
to be ownership, whether his belief be right or wrong [Carlos v.
Republic].
Possession in the concept of the owner is the possession
by the owner himself or by a person who claims to be and acts as
the owner. He possesses the thing in such a way that he makes
people believe or see that he is the owner and recognizes no title or
ownership in another.
Possession in the concept of the owner v. Torrens Title
In Aposotol v, Court of Appeals, the Supreme Court ruled
that the presumption of ownership granted by law to a possessor in
the concept of an owner under Article 541 is only prima facie and
cannot prevail over a valid title registered under the Torrens
System. It is an accepted rule that a person who has a Torrens title
over the property is entitled to the possession thereof.
However, the defense of indefeasibility of Torrens title
cannot extend to a transferee who takes the certificate of title in bad
faith with notice f flaw. A buyer of real property in the possession
of persons other than the seller must be way and should investigate
the right of those in possession otherwise he can hardly be regarded
as buyer in good faith and cannot have any right over the property Article 526. He is deemed a possessor in good faith who is
[Occena v. Esponilla]. not aware that there exists in his title or mode of acquisition any flaw
which invalidates it.
Prior possession, not necessary in a suit for unlawful He is deemed a possessor in bad faith who possesses in any
case contrary to the foregoing. Mistake upon a doubtful or difficult
detainer
question of law may be the basis of good faith.
In a case for unlawful detainer, as when the new owner
of the house ejects the tenant therefrom, is prior physical
1. Possessor in good faith
possession an indispensable requisite on the part of the new
One who is not aware that there exists in his TITLE or
owner?
MODE of acquisition any flaw which invalidates it [DBP v. Court
NO. The fact that the new owners were never in prior
of Appeals]. Good faith, here understood, is an intangible and
physical possession of the subject land is of no moment, as prior
abstract quality with no technical meaning or statutory definition,
physical possession is necessary only in forcible entry cases
and it encompasses, among other things, an honest belief, the
[Apostol v. Court of Appeals].
absence of malice and the absence of design to defraud or to seek
an unconscionable advantage. An individual’s personal good faith
Distinction: Proof of possession in forcible entry and
is a concept of his own mind and, therefore, may not conclusively
unlawful detainer
be determined by his protestations alone. It implies honesty of
In Pajuyo v. Court of Appeals, the Supreme Court held
intention, and freedom from knowledge of circumstances which
that prior possession is not always a condition sine qua non in
ought to put the holder upon inquiry. The essence of good faith lies
ejectment. This is one of the distinctions between forcible entry
in an honest belief in the validity of one’s right, ignorance of a
and unlawful detainer. In forcible entry, the plaintiff, the plaintiff is
superior claim, and absence of intention to overreach another.
deprived of physical possession of his land or building by means of
Applied to possession, one is considered in good faith if he is not
force, threat, strategy or stealth. Thus, he must allege and prove
aware that there exists in his title or mode of acquisition any flaw
prior possession. But in unlawful detainer, the defendant
which invalidates it [PNB v. De Jesus].
unlawfully withholds possession after the expiration or termination
In Marcelo v. Court of Appeals, it was ruled that the
of his right to possess under any contract, express or implied. In
transferee of an unregistered parcel of land for value from a buyer
such case, prior physical possession is not required.
and who took immediate possession thereof has the benefit of good
faith in his favor. Ordinary acquisitive prescription of 10 years is
2. Possession in the concept of the holder
applicable.
In the case of possessors in the concept of holder who are
as such by virtue of a juridical title or right, e.g., lessee,
2. Possession in bad faith
usufructuary, etc., they are considered as possessors in the concept
A possessor in bad faith is one in possession of property
of holder with respect to the thing itself, but considered as
knowing that his title thereto is defective. The difference, therefore,
possessors in the concept of owner with respect to their right
between a possessor in good faith and one in bad faith is that the
Here, the possessor recognizes another to be the owner.
former is NOT AWARE of the defect or flaw in his title or mode of
The one who possesses as a mere holder acknowledges in another a
acquisition while the latter is AWARE of such defect or fl aw. But
superior right which he believes to be ownership, whether his
in either case there is a flaw or defect [Cueto v. Court of Appeals].
belief is right or wrong [Maglucot-aw v. Maglucot].
In the following situations, the possessor is considered in
In Garcia v. Court of Appeals, it was held that the
bad faith:
possessor who is merely tolerated by the owner is a possessor in
(1) Where the possessor of the land acquired the same
the concept of a holder and such possession does not hinder a valid
from a person other than the registered owner because he was
transfer of ownership by the owner thru its sale to another.
charged with notice of the existence of the owner’s certificate of
In Mangahas v. Court of Appeals, it was ruled that there
title [Tuason v. Lecardo].
can be no acquisitive prescription of land in favor of the possessor
(2) Where the possessor of the land knows that she has
if the possession is in the concept of holder.
no title thereto, because she bought the house erected thereon from
In Marcelo v. Court of Appeals, the Supreme Court ruled
one whom she knew was merely a tenant on the land [De Guzman
that acquisitive prescription is a mode of acquiring ownership by a
v. Rivera].
possessor through the requisite lapse of time. IN order to ripen into
(3) In Republic v. Court of Appeals, it was held that a
ownership, possession must be in the concept of the owner, public,
party’s mere refusal to believe that a defect exists and his wilful
peaceful and uninterrupted. Thus, mere possession with a juridical
closing of his eyes to the possibility of the existence of a defect in
title, such as, to exemplify, by usufructuary, a trustee, a lessee, an
his vendor’s title will not make him an innocent purchaser for
agent for a pledgee, not being in the concept of an owner, cannot
value if it afterwards develop that the title was in fact defective.
ripen into ownership by acquisitive prescription, unless the
Hence, if circumstances exist that require a prudent man to
juridical relation is first expressly repudiated and such repudiation
investigate; he will be in bad faith if he does not investigate.
has been communicated to the other party.
(4) In Republic v De Guzman, it was ruled that the
Acts of possessory character executed due to license or
burden of proving the status of the purchaser in good faith and for
by mere tolerance of the owner would likewise be inadequate.
value lies upon him who asserts the status. In discharging the
Possession, to constitute the foundation of a prescriptive riht, must
burden, it is not enough to invoke the ordinary presumption of
be en concepto de dueno, or to use the common law equivalent of
good faith, The rule is settled that a buyer of real property which is
the term, the possession should be adverse; if not, such possessory
in possession of persons other than the seller must be wary and
acts, no matter how long do not start the running of the
should investigate the rights of who is in possession. Otherwise,
prescription.

Page 9 of 21
without such inquiry, the buyer can hardly be regarded as buyer in excusable and may, therefore, be the basis of his good faith. The
good faith. petitioner is deemed a possessor in good faith.

NOTE: Bad Faith Is Personal Just because a person is in
bad faith (knows of the defect or flaw in his title) does not
necessarily mean that his successors-in-interest are also in bad
faith. As a matter of fact, a child or heir may even be presumed in
good faith, notwithstanding the father’s bad faith.
SUMMARY
If he is not aware – GOOD FAITH. There is always a
presumption that every possessor is a possessor in good faith
(Article 527)
If he is aware – BAD FAITH. This is purely personal to
the possessor. It may not necessarily be transmitted to the heir or
his successor-in-interest.
Article 527. Good faith is always presumed, and upon him
who alleges bad faith on the part of a possessor rests the burden of
proof.
Good faith is always presumed, and upon him who
alleges bad faith on the part of the possessor rests the burden of
proof. There is a parallel presumption under the Rules of Evidence
in favor of the innocence of a person from any wrongdoing. This
rule is but a necessary consequence of the treatment that the law
accords to possession which under the Civil Code is viewed as an
outward appearance of ownership. Note that under Article 433 of
the New Civil Code, actual possession under claim of ownership is
viewed as that of presumed ownership.

Mistake upon a doubtful or difficult question of law Article 528. Possession acquired in good faith does not lose
this character except in the case and from the moment facts exist which
may be the basis of good faith
show that the possessor is not unaware that he possesses the thing
Ordinarily, it is only ignorance or mistake of fact which
improperly or wrongfully.
serves as basis of good faith but not mistake of law in view of the
principle enshrined in Article 3 of the New Civil Code that
The presumption in favor of the good faith of the
“ignorance of the law excuses no one from compliance therewith.”
possessor, however, is only juris tantum and may be overcome by
However, the possessor’s mistake upon a doubtful or difficult
proof to the contrary. If no evidence is presented proving bad faith,
question of law may serve as basis of his good faith, in which case
the presumption of good faith therefore remains for it is likewise
such mistake will not render him a possessor in bad faith.
presumed that possession continues to be enjoyed on the same
According to Manresa, gross and inexcusable ignorance of the law
character in which it was acquired, until the contrary is proved.
may not be the basis of good faith, but excusable error arising from
This presumption in favor of good faith continues to
complex legal principles and from the interpretation of conflicting
subsist until facts exist which show that the possessor is already
or doubtful doctrines may be such basis.
aware that he wrongfully or improperly possesses the thing. In
One illustration of this is the case of Kasilag v. Roque. In
other words, every possessor in good faith becomes a possessor in
this case, Ambrosio mortgaged in favor of the petitioner the
bad faith from the moment he becomes aware that what he believed
improvements she made on her land acquired by a homestead
to be true is not so. Consequently, possession in good faith ceases
patent. When Ambrosio was not able to pay the interest on the
from the moment defects in the title are made known to the
loan, she and the petitioner verbally agreed that she would convey
possessors, by extraneous evidence or by suit for recovery of the
to the latter the possession of the land subject to the condition that
property by the true owner. Whatever may be the cause or the fact
the petitioner would not collect the interest, would introduce
from which it can be deduced that the possessor has knowledge of
improvements thereon and would be entitled to the fruits. Pursuant
the defects of his title or mode of acquisition, it must be considered
to such verbal agreement, the petitioner did all three conditions.
sufficient to show bad faith [Wong v. Carpio].
After the death of Ambrosio, her heirs sought to annul the contracts
Existence of bad faith may begin either from the receipt
which she entered into with the petitioner on the ground that the
of judicial summons (See Tacas v. Tobon, 53 Phil. 356), or even
same were in violation of Section 116 of the Public Land Act
before such time as when a letter is received from the true owner
prohibiting any alienation or encumbrance of lands acquired under
asking the possessor to stop planting on the land because somebody
the free patent for a period of five years from the date of the
else owns it. (See Ortiz v. Fuentebella, 27 Phil. 537). What the
issuance of the patent. This law, however, allows the pledge or
possessor should do upon receipt of the letter would be to
mortgage of the improvements thereon. When the case reached the
investigate; and if he does not, but is later on defeated, bad faith
appellate court, the Court of Appeals modified the judgment of the
should be counted not from the time of summons, but from the
lower court by declaring the petitioner possessor in bad faith for
time he first received the letter. Although receipt of summons will
taking the land in violation of Section 116 of the Public Land Act.
ordinarily produce a conversion from good faith to bad faith, it may
In resolving the issue of whether petitioner was a possessor in good
be possible that a possessor will still be convinced of the
faith or not, the Court held —
righteousness of his cause, thus preserving his original good faith.
“xxx It is a fact that the petitioner is not conversant This is why if he originally was in good faith, he would not be
with the laws because he is not a lawyer. In accepting the responsible in case of loss thru fortuitous event, even if the loss
mortgage of the improvements he proceeded on the well- should occur during the trial. Upon the other hand, had he been
grounded belief that he was not violating the prohibition really in bad faith all the time, the loss by fortuitous event would
regarding the alienation of the land. In taking possession thereof not excuse him. (See Art. 552)
and in consenting to receive its fruits, he did not know, as
clearly as a jurist does, that the possession and enjoyment of the
Article 529. It is presumed that possession continues to be
fruits are attributes of the contract of antichresis and that the
enjoyed in the same character in which it was acquired, until the
latter, as a lien, was prohibited by Section 116. These
contrary is proved.
considerations again bring us to the conclusion that, as to the
petitioner, his ignorance of the provisions of section 116 is
Some Presumptions Regarding Possession
Page 10 of 21
 (a) GOOD FAITH — “Good faith is always presumed.’’
(Art. 527).
(b) CONTINUITY OF CHARACTER OF POSSESSION
(whether in good faith or bad faith — “It is presumed that
possession continues to be enjoyed in the same character in which
it was acquired, until the contrary is proved.’’ (Art. 529).
(c) NON-INTERRUPTION OF POSSESSION — “The
possession of hereditary property is deemed transmitted to the heir
without interruption, and from the moment of the death of the
decedent, in case the inheritance is accepted. One who validly
renounces an inheritance is deemed never to have possessed the
same.” (Art. 533).
(d) PRESUMPTION OF JUST TITLE — “A possessor
in the concept of owner has in his favor the legal presumption that
he possesses with just title, and he cannot be obliged to show or
prove it.’’ (Art. 541).
(e) NON-INTERRUPTION OF POSSESSION OF
PROPERTY UNJUSTLY LOST BUT LEGALLY RECOVERED
— “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.” (Art. 561).
(f) POSSESSION DURING INTERVENING PERIOD
— “It is presumed, that the present possessor who was also the
possessor at previous time, has continued to be in possession
during the intervening time, unless there is proof to the contrary.”
(Art. 1138[2]).
(g) POSSESSION OF MOVABLES WITH REAL
PROPERTY — “The possession of real property presumes that of
the movables therein, so long as it is not shown or proved that they
should be excluded.” (Art. 542).
Article 530. Only things and rights which are susceptible of
being appropriated may be the object of possession.
Only things and rights which are susceptible of being
appropriated may be the object of possession. Note that the phrase
“susceptible of being appropriated” in this article is used in a
different manner compared to the phrase “may be the object of
appropriation” in Article 414. The concept of susceptibility to
appropriation in Article 414 is not equivalent to the concept of
things which are within the commerce of man as the latter term is
understood in law. As discussed in said section, while things which
are outside the commerce of man may not be the object of a
contract, they are not necessarily disqualified from being
considered as property pursuant to the criterion mentioned in
Article 414 of the Code. A good illustration is the property of
public dominion pertaining to the State. While they are outside the
commerce of man and cannot be the object of contracts,
nonetheless, they are considered property under the Code.78 On
the other hand, the term “susceptibility to appropriation” in the
present article is broader in scope for it also refers to things which
are within the commerce of man, aside from embracing the
meaning accorded to it under Article 414. Stated otherwise, all
things which are outside the commerce of man and those which, by
reason of physical impossibility cannot be subjected to human
control, may not be the object of possession.
Chapter 2
ACQUISITION OF POSSESSION
Article 531. Possession is acquired by the material
occupation of a thing or the exercise of a right, or by the fact that it is
Page 11 of 21
subject to the action of our will, or by the proper acts and legal
formalities established for acquiring such right.
How Is Possession Acquired? (BAR)
(a) By material occupation (detention) of a thing or the
exercise of a right (quasi-possession). (This also includes
constitutum possessorium or traditio brevi manu.)
(b) By subjection to our will (this includes traditio longa
manu — by mere agreement; or by the delivery of keys — traditio
simbolica) (clearly, this does not require actual physical detention
or seizure).
(c) By constructive possession or proper acts and legal
formalities (such as succession, donation, execution of public
instruments; or thru the possession by a sheriff by virtue of a court
order.)
In Medina v. Greenfield Development Corporation, the
Supreme Court held that the execution of the deeds f conveyance is
already deemed equivalent to delivery of the property and prior
physical possession is not required. Possession is also transferred,
along with ownership thereof, by virtue of the notarized deeds of
conveyances. Under Article 1498 of the Civil Code, when the sale
is made through a public instrument, the execution thereof shall be
equivalent to delivery of the object of the contract.
In donations, there is no need of delivery. The moment
the donation is in the form provided by law, the donee is deemed to
be in possession of the thing donated. Ownership is automatically
acquired by the donee.
The acquisition of possession presupposes the
existence of two essential elements: (1) the corpus; and (2) the
animus possidendi. The fi rst refers refer to the material holding of
the thing or the exercise of the right which may be acquired
through any of the modes mentioned in this article. The second, on
the other hand, refers to the intent to possess the thing or right. In
other words, possession is not acquired in law in the absence of
intent to possess it although there is physical holding of the thing.
For example, if stolen goods are placed in the bag of a person by
another without the former’s knowledge and consent, the former is
not considered a possessor in law because of the absence of intent
to possess the goods.
Article 532. Possession may be acquired by the same person
who is to enjoy it, by his legal representative, by his agent, or by any
person without any power whatever; but in the last case, the possession
shall not be considered as acquired until the person in whose name the
act of possession was executed has ratified the same, without prejudice
to the juridical consequences of negotiorum gestio in a proper case.
Acquisition of Possession from the Viewpoint of Who
Possesses
(a) personal
(b) thru authorized person (agent or legal representative)
(c) thru UNAUTHORIZED person (but only if
subsequently RATIFIED).
Essential Requisites
(a) for personal acquisition
1) intent to possess
2) capacity to possess
3) object must be capable of being possessed
 (b) thru an authorized person
1) intent to possess for principal (not for agent)
2) authority or capacity to possess (for another)
3) principal has intent and capacity to possess
(c) thru an unauthorized person (as in negotiorum
gestio)
1) intent to possess for another (the “principal)
2) capacity of “principal” to possess
3) ratification by “principal” (The possession although
cured only by the express or implied ratification should be regarded
as having a RETROACTIVE effect.)
Article 533. The possession of hereditary property is deemed
transmitted to the heir without interruption and from the moment of
the death of the decedent, in case the inheritance is accepted. One who
validly renounces an inheritance is deemed never to have possessed the
same.
In wills, upon the death of the decedent, if the will is
valid, the heirs mentioned in the will are automatically, by fiction
of law to be in possession of the hereditary estate. Actually and in
truth, the heirs are not in actual possession, but by fiction of law,
the possession by the decedent is deemed to be continued without
any interruption. If heir refuses (or is incapacitated to inherit), he is
deemed NEVER to have possessed the same.
Article 534. One who succeeds by hereditary title shall not
suffer the consequences of the wrongful possession of the decedent, if it
is not shown that he was aware of the flaws affecting it; but the effects
of possession in good faith shall not benefit him except from the date of
death of the decedent.
As defined in the law, a possessor in bad faith is one in
possession of property knowing that his title thereto is defective.
The existence of bad faith on the part of one possessor does not,
however, prejudice his successors-in-interest. The rule in this
jurisdiction is that only personal knowledge of the flaw in one’s
title or mode of acquisition can make him a possessor in bad faith,
for bad faith is not transmissible from one person to another, not
even to an heir.
The reason for the above-quoted article is that bad faith is
personal and intransmissible. Its effects must, therefore, be suffered
only by the person who acted in bad faith; his heir should not be
saddled with such consequences.
Article 535. Minors and incapacitated persons may acquire
the possession of things; but they need the assistance of their legal
representatives in order to exercise the rights which from the
possession arise in their favor.
Persons Referred to in the Article
(a) unemancipated minors
(b) minors emancipated by parental concession or by
marriage (in certain cases, like possession of real property)
(c) other incapacitated persons like 1) the insane 2) the
prodigal or spendthrift 3) those under civil interdiction
4) deaf-mutes (in certain cases) — (in general, those
laboring under restrictions on capacity to act). (See Arts. 38 and
39; 4 Manresa, pp. 190-191).
Minors and incapacitated persons may acquire possession
in those matters where they have capacity to act like in the case of
Page 12 of 21
physical seizure of res nullus or donation of personalty
simultaneously delivered to them and not possession where
juridical acts are imperative like donations of realty where minors
and incapacitated persons have no juridical capacity to execute.
Minors and other incapacitated persons may acquire
property or rights by prescription, either personally or thru their
parents, guardians, or legal representatives (Article 1117).
Article 536. In no case may possession be acquired through
force or intimidation as long as there is a possessor who objects thereto.
He who believes that he has an action or a right to deprive another of
the holding of a thing, must invoke the aid of the competent court, if
the holder should refuse to deliver the thing.
In De Roxas v. Maglanso, it was held that possession
acquired by force or violence does not affect possession because
such possession is not true possession respected by law. For all
purposes favourable to the true owner or possessor, his possession
is not considered interrupted.
In Bishop of Lipa v. Municipality of San Jose, it was held
that there is force or violence in the acquisition, even when the
property was not forcibly taken away from the owner, if the
intruder occupied it during the absence of the owner and commits
acts which repel the return of the owner.
How to recover possession
If a person has been deprived of possession, he cannot
take the law into his own hands. First, he should request the
usurper to give up the thing and if the latter refuses, the former
should invoke the aid of the proper and competent court (that
which has jurisdiction over the subject matter and the parties)
Article 537. Acts merely tolerated, and those executed
clandestinely and without the knowledge of the possessor of a thing, or
by violence, do not affect possession.
1. Acts merely tolerated
“Toleration is defined as ‘the act or practice of permitting
or enduring something not wholly approved of.’ Sarona v. Villegas
described what tolerated acts means, in this language:
“Professor Arturo M. Tolentino states that acts
merely tolerated are those which by reason of neighborliness or
familiarity, the owner of property allows his neighbor or another
person to do on the property; they are generally those particular
services or benefi ts which one’s property can give to another
without material injury or prejudice to the owner, who permits
them out of friendship or courtesy. x x x. And, Tolentino
continues, even though this is continued for a long time, no right
will be acquired by prescription.” x x x. Further expounding on
the concept, Tolentino writes: There is tacit consent of the
possessor to the acts which are merely tolerated. Thus, not every
case of knowledge and silence on the part of the possessor can
be considered mere tolerance. By virtue of tolerance that is
considered as an authorization, permission or license, acts of
possession are realized or performed. The question reduces itself
to the existence or non-existence of the permission.”
Possession, to constitute the foundation of a prescriptive
right, must be a possession under claim of title (en concepto de
dueño), or to use the common law equivalent of the term, it must
be adverse. Acts of a possessory character performed by one who
holds by mere tolerance by the owner are clearly not en concepto
de dueño, and such possessory acts, no matter how long so
continued, do not start the running of the period of prescription
[Cuaycong v. Benedito].
In municipality of Nueva Caceres v. Director of Lands, it
was held that even assuming that these acts continue, they do not
affect possession. On the basis of these acts, no right will be
acquired by prescription.
In Estrella v. Director of Lands, it was held that a person
who occupied another’s property at the latter’s tolerance without
any contract between them, is necessarily bound by an implied
promise to vacate it upon demand, falling in which ejectment suit is
proper against him.
Meaning of “Acts ... do not affect possession” (Art.
537)
(a) The intruder does not acquire any right to possession
(NO LEGAL POSSESSION).
(b) The legal possessor, even if physically ousted, is still
the possessor and therefore — 1) still entitled to the benefits of
prescription; 2) still entitled to the fruits; 3) still entitled as
possessor for all purposes favorable to his possession. (See Ayala
de Roxas v. Maglonso, 8 Phil. 745; 4 Manresa 201-202).
(c) The intruder cannot acquire the property by
prescription. (See Ayala de Roxas v. Maglonso, supra; Cuaycong
v. Benedicto, 37 Phil. 781).
2. Clandestine acts or secret possession
Acts which are executed clandestinely and without the
knowledge of the possessor do not affect possession.128 In order
for possession to remain unaffected, it is necessary that the acts
executed must be both clandestine and unknown to the possessor.
An act is considered done clandestinely if the same is done in
secret, hidden or concealed.129 In other words, the term
“clandestine” is used in contradistinction to the term “public”
under Article 1118 of the New Civil Code — as a requisite for
acquisition of real property through acquisitive prescription. If the
act is done clandestinely but the same is known to the possessor,
his possession will be affected. In the same way, if the act is done
publicly even without the knowledge of the possessor, the same
will affect the latter’s possession.
If both requisites are satisfied, meaning, the act executed
is both clandestine and unknown to the possessor, the same does
not affect the true possession of the legal possessor. As a
consequence, the legal possessor’s possession is not deemed
interrupted for all legal intents and purposes, e.g., it will not
interrupt the running of the period of acquisitive prescription in
favor of the legal possessor nor it will affect his right to receive the
fruits. On the part of the actual possessor, his possession acquired
through clandestine acts not known to the legal possessor will not
ripen into ownership through prescription because one of the
requirements thereof — that the possession be “public” in character
— will not be present.
Article 538. Possession as a fact cannot be recognized at the
same time in two different personalities except in the cases of co-
possession. Should a question arise regarding the fact of possession, the
present possessor shall be preferred; if there are two possessors, the
one longer in possession; if the dates of the possession are the same, the
one who presents a title; and if all these conditions are equal, the thing
shall be placed in judicial deposit pending determination of its
possession or ownership through proper proceedings.
Chapter 3
EFFECTS OF POSSESSION
Page 13 of 21
Article 539. Every possessor has a right to be respected in
his possession; and should he be disturbed therein he shall be protected
in or restored to said possession by the means established by the laws
and the Rules of Court.
A possessor deprived of his possession through forcible entry
may within ten days from the filing of the complaint present a motion
to secure from the competent court, in the action for forcible entry, a
writ of preliminary mandatory injunction to restore him in his
possession. The court shall decide the motion within thirty (30) days
from the fi ling thereof.
1. Right to Protection of Possessors
The Civil Code considers possession as an outward sign
of ownership, it having all the appearances of ownership. For this
reason, the law renders protection to every possessor whether
owners or not. According to the Supreme Court, the phrase “every
possessor” in the article indicates that all kinds of possession, from
that of the owner to that of a mere holder, except that which
constitutes a crime, should be respected and protected by the means
established and the laws of procedure.
The protection is given because the Civil Code assumes
that the possessor of a thing is the owner and also because even if
the possessor is not the owner, his situation should be protected
until it is shown that there is another person with a better right. The
fact of possession in itself, therefore, has a positive value and is
endowed with a distinct standing of its own in the law of property.
True, by this principle of respect for the possessory status, a
wrongful possessor may at times be upheld by the courts, but this is
only temporary and for one sole and special purpose, namely, the
maintenance of public order. The protection is only temporary
because it is intended that as soon as the lawless act of
dispossession has been suppressed, the question of ownership or of
possession de jure is to be settled in the proper court and in a
proper action. The larger and permanent interests of property
require that such rare and exceptional instance of preference in the
courts of the actual but wrongful possessor be permitted.
2. Actions to Recover Possession
Any lawful possessor, not only the owner, may resort to
reasonable force to repel or prevent an actual or threatened
unlawful physical invasion or usurpation of the property in his
possession. But this doctrine can only be invoked at the time of
actual or threatened dispossession, and not when possession has
already been lost. In the latter case, the owner must resort to
judicial process for the recovery of the property as required in
Article 536 of the New Civil Code. Pursuant to this article, he who
believes that he has an action or a right to deprive another of the
holding of a thing must invoke the aid of the competent court, if the
holder should refuse to deliver the thing. This article is
complemented by the present article (Article 539) which grants to
possessors the right not only to be protected in his possession, but
likewise the right to be restored to said possession in case of
disturbance by the means established by the laws and the Rules of
Court.
In Javelosa v. Tapos, the Supreme Court ruled:
Accordingly, the owner may choose among three
kinds of actions to recover possession of real property -
an accion interdictal, accion publiciana or an accion
reivindicatoria.
Notably, an accion interdictal is summary in nature,
and is cognizable by the proper municipal trial court or
metropolitan trial court. It comprises two distinct causes of
action, namely, forcible entry (detentacion) and unlawful
detainer (desahuico). In forcible entry, one is deprived of the
physical possession of real property by means of force,
intimidation, strategy, threats, or stealth, whereas in unlawful
detainer, one illegally withholds possession after the expiration
or termination of his right to hold possession under any contract,
express or implied. An action for forcible entry is distinguished
from an unlawful detainer case, such that in the former, the
possession of the defendant is illegal from the very beginning,
whereas in the latter action, the possession of the defendant is
originally legal but became illegal due to the expiration or
termination of the right to possess. Both actions must be brought
within one year from the date of actual entry on the land, in case
of forcible entry, and from the date of last demand, in case of
unlawful detainer. The only issue in said cases is the right to
physical possession.
On the other hand, an accion publiciana is the
plenary action to recover the right of possession, which should
be brought in the proper regional trial court when dispossession
has lasted for more than one year. It is an ordinary civil
proceeding to determine the better right of possession of realty
independently of title.
Lastly, an accion reivindicatoria is an action to
recover ownership, also brought in the proper RTC in an
ordinary civil proceeding.
In the case at bar, the petitioner, claiming to be the
owner of the subject property, elected to file an action for
unlawful detainer. In making this choice, she bore the
correlative burden to sufficiently allege, and thereafter prove by
a preponderance of evidence all the jurisdictional facts in the
said type of action. Specifically, the petitioner was charged with
proving the following jurisdictional facts, to wit:
(i) initially, possession of property by the defendant
was by contract with or by tolerance of the plaintiff;
(ii) eventually, such possession became illegal upon
notice by plaintiff to defendant of the termination of the latter's
right of possession;
(iii) thereafter, the defendant remained in possession
of the property and deprived the plaintiff of the enjoyment
thereof; and
(iv) within one year from the last demand on
defendant to vacate the property, the plaintiff instituted the
complaint for ejectment.
Particularly, the complaint stated that (i) the
respondents occupied the subject property upon the tolerance of
the petitioner; (ii) the petitioner sent the respondents a demand
to vacate sometime in October 2003; (iii) the same demand was
unheeded; and (iv) the action for unlawful detainer was filed
within one year from the date of the demand. Verily, the
following jurisdictional facts properly vested the MCTC of
Buruanga, Aklan, with jurisdiction over the case.
However, in order for the petitioner to successfully
prosecute her case for unlawful detainer, it is imperative upon
her to prove all the assertions in her complaint. After all, "the
basic rule is that mere allegation is not evidence and is not
equivalent to proof." This, the petitioner failed to do. As
correctly observed by the CA, the petitioner failed to adduce
evidence to establish that the respondents' occupation of the
subject property was actually effected through her tolerance or
permission. Unfortunately, the petitioner failed to prove how
and when the respondents entered the subject lot, as well as how
and when the permission to occupy was purportedly given. In
fact, she was conspicuously silent about the details on how the
permission to enter was given, save for her bare assertion that
the respondents' occupied the premises as caretakers thereof.
The absence of such essential details is especially troubling
considering that the respondents have been occupying the
subject property for more than 70 years, a fact which was not
disputed by the petitioner. In this regard, it is must be shown
Page 14 of 21
that the respondents first came into the property due to the
permission given by the petitioner or her predecessors.
It cannot be gainsaid that the fact of tolerance is of
utmost importance in an action for unlawful detainer. Without
proof that the possession was legal at the outset, the logical
conclusion would be that the defendant's possession of the
subject property will be deemed illegal from the very beginning,
for which, the action for unlawful detainer shall be dismissed.
Remarkably, in Quijano v. Atty. Amante, the Court
ruled that in an action for unlawful detainer, the plaintiff must
show that the possession was initially lawful, and thereafter,
establish the basis of such lawful possession. Similarly, should
the plaintiff claim that the respondent's possession was by
his/her tolerance, then such acts of tolerance must be proved. A
bare allegation of tolerance will not suffice. At least, the
plaintiff must point to the overt acts indicative of his/her or
predecessor's permission to occupy the disputed property.
Failing in this regard, the occupant's possession could then be
deemed to have been illegal from the beginning. Consequently,
the action for unlawful detainer will fail. Neither may the
ejectment suit be treated as one for forcible entry in the absence
of averments that the entry in the property had been effected
through force, intimidation, threats, strategy or stealth.
Similarly, in Suarez v. Sps. Emboy, the Court warned
that "when the complaint fails to aver the facts constitutive of
forcible entry or unlawful detainer, as where it does not state
how entry was effected or how and when dispossession started,
the remedy should either be an accion publiciana or accion
reivindicatoria."
The same ruling was rendered in the case of Dr.
Carbonilla v. Abiera, et al., where the Court laid the important
dictum that the supposed acts of tolerance should have been
present right from the very start of the possession—from entry
to the property. "Otherwise, if the possession was unlawful from
the start, an action for unlawful detainer would be an improper
remedy." This same ruling was echoed in Jose v. Alfuerto, et
al., where the Court even emphasized its consistent and strict
holding that in an unlawful detainer case, "tolerance or
permission must have been present at the beginning of
possession; if the possession was unlawful from the start, an
action for unlawful detainer would not be the proper remedy and
should be dismissed."
Perforce, guided by all the foregoing cases, an action
for unlawful detainer fails in the absence of proof of tolerance,
coupled with evidence of how the entry of the respondents was
effected, or how and when the dispossession started. This rule is
so stringent such that the Court categorically declared in Go, Jr.
v. CA that tolerance cannot be presumed from the owner's failure
to eject the occupants from the land. Rather, "tolerance always
carries with it 'permission' and not merely silence or inaction for
silence or inaction is negligence, not tolerance." On this score,
the petitioner's tenacious claim that the fact of tolerance may be
surmised from her refusal for many years to file an action to
evict the respondents is obviously flawed.
Article 540. Only the possession acquired and enjoyed in the
concept of owner can serve as a title for acquiring dominion.
The following are the effects of possession in the
concept of owner:
(1) It raises a disputable presumption of ownership (Art.
433, NCC).
(2) It creates a disputable presumption that the possessor
has just title and he cannot be obliged to show it. (Art. 541, NCC)
(3) It can ripen into ownership through acquisitive
prescription (Art. 540, NCC), subject to the additional
requirements under Article 1118 of the Civil Code.
 Article 541. . A possessor in the concept of owner has in his
favor the legal presumption that he possesses with a just title and he
cannot be obliged to show or prove it.
Reasons for presumption: (1) A possessor is always
presumed to be in good faith; (2) Because of the inconvenience of
carrying proof of ownership around.
1. Presumption of just title
Actual possession under claim of ownership raises a
disputable presumption of ownership. In addition, the possessor in
the concept of owner (en concepto de dueño) has in his favor the
legal presumption that he possesses with a just title and he cannot
be obliged to show it.
In accion reivindicatoria, for example, the person who
claims that he has a better right to the property has the burden of
proving his title, in addition to proving the identity of the land
claimed. In other words, the plaintiff must rely on the strength of
his own title, not on the weakness of the defendant’s title because
the latter enjoys the presumption of just title which he cannot be
obliged to show.
In Chan v. Court of Appeals, the clause “he possesses
with a just title and he cannot be obliged to show or prove it”
means that the possessor cannot be inquired about his ownership
without any valid reason, for he is presumed to be the owner
thereof. Anyone who claims to be the owner must resort to judicial
process for the recovery of the property.
2. Meaning of just title
The term just title refers to true and valid title, a title
which by itself is sufficient to transfer ownership without the
necessity of letting the period elapse.
For purposes of prescription, “just title” means
colourable title, that title where, although there was a mode of
transferring ownership, still something is wrong, because the
grantor is not the owner of the thing
3. The Kinds of Titles (‘Titulos’)
(a) True and Valid Title (Titulo Verdadero y Valido) —
Here, there was a mode of transferring ownership and the grantor
was the owner. It is defined as a title which by itself is suffi cient to
transfer ownership without the necessity of letting the prescriptive
period elapse. (See Doliendo v. Biarnesa, 7 Phil. 232).
Example: B bought a Ford Expedition Limited from S,
the owner thereof. Then S delivered the car to B. B now has a true
and valid title. [NOTE: This is the just title referred to in Art. 541.
Thus, if B possesses the vehicle and drives it around as an owner,
other people cannot compel him to prove his ownership over the
same.].
(b) Colorable Title (Titulo Colorado) — That title
where, although there was a mode of transferring ownership, still
something is wrong, because the grantor is NOT the owner.
Example: B bought a BMW car from S. S then delivered
the car to B. But it turns out that S never owned the car, and that
somebody else was its owner. Whether B was in good faith or in
bad faith is immaterial in deciding if he (B) is the owner; what is
important is that he is not the owner because he did not acquire or
purchase the property from the owner, his title being merely
“colorado’’ or colorable.
4. Requisites in order that the principle “Possession
is presumed ownership” to apply:
Page 15 of 21
a. One must be in possession, actual or
constructive;
b. The possession must be in the concept of an
owner, not mere holder.
Article 542. The possession of real property presumes that of
the movables therein, so long as it is not shown or proved that they
should be excluded.
“Real property’’ and “movables’’ mean only real or
personal THINGS, not rights. If I possess a house (real property), it
is presumed that I also possess the furniture (personal property)
therein.
Applicability of the Article
(a) whether the possessor be in good faith or bad faith (
b) whether the possession be in one’s own name or in
another’s
(c) whether the possession be in concepto de dueno or in
the concept of holder. Thus, the lessee of a building is presumed to
be the possessor of the movables found therein, for he who needs
them is supposed to have been the one who introduced the
movables into the building.
Article 543. Each one of the participants of a thing possessed
in common shall be deemed to have exclusively possessed the part
which may be allotted to him upon the division thereof, for the entire
period during which the co-possession lasted. Interruption in the
possession of the whole or a part of a thing possessed in common shall
be to the prejudice of all the possessors. However, in case of civil
interruption, the Rules of Court shall apply.
The concept of co-possession implies that the thing
subject matter thereof is undivided and there are two or more
possessors. If the co-possession is under claim of ownership, each
of the co-possessors is considered as the possessor of the whole
and over the whole each may exercise the right of possession,
subject to the similar right of the other co-possessors. This state of
affairs will last until the partition of the property. In the event of
partition, however, each of the co-possessors shall be deemed to
have exclusively possessed the part which may be allotted to him
for the entire period that the state of co-possession lasted.161
However, any interruption in the possession of the whole or part of
a thing possessed in common shall be to the prejudice of all the co-
possessors.
The foregoing principles may be illustrated as follows:
“A,” “B” and “C” are co-possessors of a parcel of land under claim
of ownership and in good faith for a period of eleven years, the
possession being exercised through “C.” On the eleventh year, the
co-possessors divided the property in three equal parts, each taking
exclusive possession of their part after the division. Two years after
the partition, “C” died. During his lifetime, “C” disposed of the
property allotted to him. After his death, however, his heirs fi led
an action against “A” and “B” claiming ownership of a portion of
said property on the ground that their predecessor-in-interest was
the actual possessor of the same and became the exclusive owner
thereof through ordinary acquisitive prescription. In this case, the
claim of the heirs will not prosper since “A” and “B” will be
deemed as the exclusive possessors of the part allotted to them
during the eleven years that the co-possession lasted. Under the
law, “C” is deemed as never to have possessed at all the parts
allotted to “A” and “B.”
 In case of interruption, the law says that the same shall
affect the interest of all. This may be illustrated as follows: “A,”
“B” and “C” are co-possessors of a parcel of land under claim of
ownership, the possession being exercised through “C” for a period
of six years. On the seventh year, “X” took possession of one-third
of the area of he land in the concept of owner and adverse to the
interest of the copossessors and continued to possess the same until
the co-possessors decided to divide the property possessed in
common on the eleventh year. In this situation, the interruption of
possession in connection with one third of the area of the land will
prejudice not only “C” but all the co-possessors. Hence, the co-
possessors can claim ownership only of two-third of the area
through acquisitive prescription and only this area can be the
subject of partition among the co-possessors.
Article 544. A possessor in good faith is entitled to the fruits
received before the possession is legally interrupted.
Natural and industrial fruits are considered received from
the time they are gathered or severed.
Civil fruits are deemed to accrue daily and belong to the
possessor in good faith in that proportion.
This Article applies to fruits only. It cannot extend to
other things like the dismantled materials from a demolished house,
or part of the hidden treasure pertaining to the land.
Who are the possessors entitled to the fruits?
Only the possessors in good faith are entitled to fruits.
Possessors in bad faith on the other hand are not entitled to fruits
but even required to reimburse the fruits already received and to
some extent, damages.
In Calma v. Calma, it was held that during the time the
possessor is considered in good faith, he is entitled to the fruits he
had received out of the property he is possessing. From the moment
his good faith had been converted to bad faith, such as by judicial
summons or extraneous evidence, he loses that right to retain the
fruits.
In Mindanao Academy v. Yap, it was held that before
legal interruption, the fruits received by the possessor in good faith
belong to him. But after judicial summons had been served upon
the possessor in good faith, his right to get the fruits not yet
gathered terminates.
When are fruits considered gathered?
Natural and industrial fruits are gathered the moment
they are gathered or severed. Civil fruits are deemed received on
their due date and not actual date of payment.
What is the liability of possessor in bad faith regarding
fruits?
a. As to fruits already received – returning them if still
existing o pay for their value if already spent;
b. As to growing, pending, or ungathered fruits – no
rights whatsoever.
In Director vs. Abagat, it was ruled that as additional
liability, the possessor in bad faith must render an accounting of the
fruits he had received as well as the fruits he could have received.
He is also liable to pay for damages which must be equivalent of
the reasonable rent for the occupation of the property during the
period of his possession in bad faith.
Page 16 of 21
In MWSS v. Court of Appeals, it was held that the right of
removal granted to a possessor in bad faith applies only to
improvements for pure luxury or mere pleasure.
Article 545. If at the time the good faith ceases, there should
be any natural or industrial fruits, the possessor shall have a right to a
part of the expenses of cultivation, and to a part of the net harvest,
both in proportion to the time of the possession.
The charges shall be divided on the same basis by the two
possessors.
The owner of the thing may, should he so desires, give the
possessor in good faith the right to finish the cultivation and gathering
of the growing fruits, as an indemnity for his part of the expenses of
cultivation and the net proceeds; the possessor in good faith who for
any reason whatever should refuse to accept this concession, shall lose
the right to be indemnified in any other manner.
According to Article 545, if at the time the good faith
ceases, there should be pending natural or industrial fruits, the
possessor and the owner shall have a right to a part of the net
harvest and each shall divide the expenses of cultivation, both in
proportion to the time of their respective possessions. If the owner
does not want to pay his share of the expenses incurred in
connection with the cultivation, he may, at his option, allow the
possessor to finish the cultivation and gathering of the growing
fruits (in lieu of his part of such expenses), in which case, the
owner will not have any share in the harvest. If the owner chooses
this option and the possessor refuses to accept the concession “for
any reason whatever,” the latter shall lose the right to be
indemnified in any other manner. In other words, the possessor
must accept the owner’s choice otherwise he will lose the right to
be indemnified and this rule will apply even if the value of the
fruits are less than the amount of the expenses incurred.
With respect to charges, the same shall also be divided
by the possessor and the owner, in proportion to the time of their
respective possessions. According to Manresa, the term “charges”
in Article 545 is understood to be those expenses incurred not on
the thing itself, but because of it or on account of it. An example of
charges are the taxes incurred, whether on the capital or on the
fruits.
Article 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the thing
until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in
good faith with the same right of retention, the person who has
defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which the
thing may have acquired by reason thereof.
Rule on necessary and useful expenses:
1. Necessary expenses are those incurred to preserve
the property without which, the said property will
physically deteriorate or be lost. Examples are major
repairs of a house [Angeles v. Lozada]; expenses for
cultivation, production and upkeep of the property
[Mendoza v De Guzman].
Rule: Every possessor is entitled to a refund whether in
good or bad faith. The possessor in good faith is entitled to right of
retention of the property until the refund is made.
2. Useful expenses are those incurred to add value to
the property or increase productivity of the property
like construction of dining room, kitchen, closet and
 bathroom [Robles v. Hermanos]; construction of
irrigation system [Valenzuela v. Lopez];
construction of artificial fishponds [Rivera v.
Archbishop of Manila].
Rule: Refundable only to possessors in good faith with
the same right of retention as in necessary expenses.
Article 547. If the useful improvements can be removed
without damage to the principal thing, the possessor in good faith may
remove them, unless the person who recovers the possession exercises
the option under paragraph 2 of the preceding article.
The possessor in good faith may remove the useful
improvements he had introduced provided that no substantial injury
or damage would be caused to the principal thing. In Javier v.
Concepcion, the right to remove useful improvements is subject to
the right of the owner to keep the improvements himself by paying
the expenses incurred or the concomitant increase in value of the
property caused by the improvements. In other words, the
possessor’s right of removal is subordinate to the right of the owner
to retain said improvements [Calagan v. CFI].
Article 548. Expenses for pure luxury or mere pleasure shall
not be refunded to the possessor in good faith; but he may remove the
ornaments with which he has embellished the principal thing if it
suffers no injury thereby, and if his successor in the possession does not
prefer to refund the amount expended.
Expenses for luxury are those incurred to cater to the
personal comfort, convenience or enjoyment of the possessor.
Rule: They are not refundable. The rationale behind this
denial is that the law does not compensate the personal whims and
caprices. These improvements are purely for embellishments and
not for preservation of the property or for increasing the value or
productivity of the property.
Article 549. The possessor in bad faith shall reimburse the
fruits received and those which the legitimate possessor could have
received, and shall have a right only to the expenses mentioned in
paragraph 1 of Article 546 and in Article 443. The expenses incurred in
improvements for pure luxury or mere pleasure shall not be refunded
to the possessor in bad faith, but he may remove the objects for which
such expenses have been incurred, provided that the thing suffers no
injury thereby, and that the lawful possessor does not prefer to retain
them by paying the value they may have at the time he enters into
possession.
Regarding possessor’s rights (if in bad faith) to
ornamental expenses, see discussion under the next preceding
article.
Article 550. The costs of litigation over the property
shall be borne by every possessor.
Article 551. Improvements caused by nature or time shall
always inure to the benefit of the person who has succeeded in
recovering possession.
Neither the possessor in good faith nor in bad faith is
entitled to: (a) improvements caused by NATURE (like alluvium,
etc.). (See 4 Manresa 275-276). (b) improvements caused by TIME
(like the improved flavor of wine).
Page 17 of 21
Article 552. A possessor in good faith shall not be liable for
the deterioration or loss of the thing possessed, except in cases in which
it is proved that he has acted with fraudulent intent or negligence, after
the judicial summons. A possessor in bad faith shall be liable for
deterioration or loss in every case, even if caused by a fortuitous event.
Will a possessor be liable to the owner for any
deterioration or loss suffered by the thing? This question is
answered by Article 552 of the New Civil Code. Pursuant to this
article, the possessor’s liability for loss or deterioration shall
depend on his good faith or bad faith. If the possessor is in good
faith, he is not liable at all for the deterioration or loss of the thing
possessed. A possessor in bad faith, on the other hand, is liable for
any deterioration or loss of the thing “in every case” even when the
same is caused by fortuitous event.
Article 553. One who recovers possession shall not be
obliged to pay for improvements which have ceased to exist at the time
he takes possession of the thing.
Article 554. present possessor who shows his possession at
some previous time, is presumed to have held possession also during
the intermediate period, in the absence of proof to the contrary.
Presumption of Continuity of Possession
If the present possessor can show proof that he was also
in possession of the property at some previous time, his possession
will be presumed to be continuous covering even the intermediate
period.218 This presumption, however, is merely disputable and
may be rebutted by proof to the contrary.
If the present possessor, however, succeeds the previous
possessor by hereditary title, his possession is also deemed
continuous and without any interruption from the moment of the
death of the decedent. Upon acceptance of the inheritance, the
possessor shall be deemed to have possessed the property
continuously and this rule will apply even if he was not in actual
possession of the property at the time of the death of the decedent
and prior to his acceptance. In other words, if the possession is
transmitted by hereditary title, the presumption of continuity of
possession is one which is conclusive and may not be overthrown
by proof to the contrary.
Article 555. A possessor may lose his possession:
(1) By the abandonment of the thing;
(2) By an assignment made to another either by onerous or
gratuitous title;
(3) By the destruction or total loss of the thing, or because it
goes out of commerce;
(4) By the possession of another, subject to the provisions of
Article 537, if the new possession has lasted longer than one year. But
the real right of possession is not lost till after the lapse of ten years.
Ways of Losing Possession
(a) Thru the Possessor’s Voluntary Will and Intent
1) Abandonment. (Art. 555).
2) Assignment (onerous or gratuitous conveyance). (Art.
555).
(b) Against the Possessor’s Will
1) possession of another for more than one year. (Art.
555).
2) final judgment in favor of another (with a better right).
3) expropriation.
 4) prescription in favor of another.
5) recovery or reivindication by the legitimate owner or
possessor. (See 2 Castan 48).
(c) Because of the Object
1) destruction or total loss of the thing. (Art. 555).
2) going out of commerce. (Art. 555).
3) escaping from possessor’s control of wild animals.
(Art. 560).
1. Abandonment
He who has a right may renounce it. This act by which
thing is voluntary renounced constitutes an abandonment.
However, for a property to be considered abandoned under the law,
it is necessary that the spes recuperandi (hope of recovery or
recapture) is gone and the animus revertendi (intent to recover) is fi
nally given up. Certainly, the possessor of a thing cannot be held to
have abandoned the same until at least he has some knowledge of
the loss of its possession or of the loss of the thing. Hence, there is
no real intention to abandon a property when, as in the case of a
shipwreck or a fi re, things are thrown into the sea or on the
highway. To be effective, it is necessary that the abandonment be
made by a possessor in the concept of an owner.
Requisites:
(1) the abandoner must have been a possessor in the
concept of owner (either an owner or mere possessor may
respectively abandon either ownership or possession).
(2) the abandoner must have the capacity to renounce or
to alienate (for abandonment is the repudiation of a property right).
(3) there must be a physical relinquishment of the thing
or object. (Yu v. De Lara, L-16084, Nov. 30, 1962).
(4) there must be no more spes recuperandi (expectation
to recover) and no more animus revertendi (intent to return or get
back). (U.S. v. Rey, 8 Phil. 500; Yu v. De Lara, L-16084, Nov. 30,
1962).
What is the effect of temporary ignorance?
There is no abandonment of movables even if there is
temporary ignorance of the whereabouts of the thing, so long as the
thing remains under the control of the possessor, so long as no one
else has control over the thing.
What is the effect of tolerance?
There is no abandonment, if the owner merely tolerated
(permitted) another possession nor if the latter was done by stealth
or effected through force or intimidation.
2. Assignment
Whereas abandonment involves the giving up of
possession of a thing absolutely, without reference to any particular
person or purpose so that the same may now be appropriated by the
next comer or finder, assignment, on the other hand, involves
relinquishment of possession in favor of a definite or specified
transferee. It therefore involves the transfer of all the rights of the
possessor to another person. For assignment to be validly made, it
is necessary that the assignor be in the concept of owner and that
he has the capacity to alienate.
3. Destruction or loss of the thing
As a mode of losing possession, destruction or loss may
either be physical or juridical. Hence, it is understood that a thing is
Page 18 of 21
lost when it perishes, or goes out of commerce, or disappears in
such a manner that its existence is unknown or cannot be
recovered. Since the term is also used in a juridical sense, a thing is
also considered lost when it is expropriated by the government.
4. Possession by another
Under this mode, distinction must be made between
possession as a fact (de facto) and possession as a right (de jure). If
the possession of another lasts for more than one year, only
possession de facto is lost but not the real right of possession
(possession de jure). Possession de jure, on the other hand, is not
lost until after the lapse of ten (10) years.
Based on the foregoing, the material element that
determines the proper action to be filed for the recovery of the
possession of a real property is the length of time of dispossession.
Under the Rules of Court, the remedies of forcible entry and
unlawful detainer are granted to a person deprived of the
possession of any land or building by force, intimidation, threat,
strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold
possession by virtue of any contract, express or implied, or the
legal representatives or assigns of any such lessor, vendor, vendee,
or other person. These remedies afford the person deprived of the
possession to file at any time within one year after such unlawful
deprivation or withholding of possession, an action in the proper
Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession,
together with damages and costs. The basis of that one year period
of prescription under the Rules of Court is the fourth paragraph of
Article 555 of the New Civil Code which states that possession de
facto is lost through another’s possession for a period longer than
one year. Thus, if the dispossession has not lasted for more than
one year, an ejectment proceeding is proper and the inferior court
has jurisdiction. On the other hand, if the dispossession lasted for
more than one year, the proper action to be fi led is an accion
publiciana since the real right of possession (possession de jure) is
not lost until after the lapse of ten (10) years. In other words, the
right acquired by the person who has been in possession for one
year and one day is only the right that the former possessor lost by
allowing the year and one day to expire — that is the right to
maintain an interdictory action (accion interdictal). The present
possessor, as a consequence, can not be made to answer in an
interdictory action. But he can still be made to answer in a plenary
action for the recovery of the real right of possession which can be
brought within a period of ten (10) years.
Legal possession is not affected by acts which are merely
tolerated and those executed clandestinely and without the
knowledge of the possessor or through violence as long as there is
a possessor who objects thereto. In the aforesaid circumstances,
only possession as a fact (possession de facto) is affected but not
the real right of possession. As a consequence, the real right of
possession may not be lost through any of said means.
In paragraph 4 of Article 555, what is lost after the lapse
of ten (10) years is possession de jure, not necessarily the
ownership of the property. Ownership and possession are distinct
concepts. For ownership to be lost through possession by another,
it must be in the concept of an owner, public, peaceful and
uninterrupted. If the possession is in this nature, the same shall
ripen into ownership over a real property after the lapse of ten
years if coupled with a just title or good faith on the part of the
possessor. If the possession of this nature last for thirty (30) years,
ownership over a real property is also acquired without need of just
title or of good faith.
Article 556. The possession of movables is not deemed lost so
long as they remain under the control of the possessor, even though for
the time being he may not know their whereabouts.
Control means juridical control or right or the thing
remains in one's patrimony. Things are under our control when we
can get their physical or natural possession by diligent search.
Article 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
Article 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.
Rule on Irrevindicability
Possession of movables acquired in good faith does not
only create a presumption of ownership but it is already equivalent
to title. Unlike in the case of immovable property where actual
possession under claim of ownership will only create a disputable
presumption of ownership and that the possessor has a just title, the
possession of movable property acquired in good faith is already
equivalent to a title, thus dispensing with further proof [EDCA
Publishig v. Santos].
Meaning of good faith
Acquired in “good faith’’ — the possessor is of the
“belief that the person from whom he received the thing was its
owner and could transfer valid title thereto (1127).’’
Requisites for title:
1. That the possession is in good faith;
2. That the owner has voluntarily parted with the
possession of the thing;
3. That the possession is in the concept of the owner.
Under this situation, if the real owner gets the thing, he
must reimburse. The meaning of the term “unlawful deprivation” in
Article 559 may not be unduly stretched to cover situations where
there is a contract of purchase and sale between two persons and
the buyer therein fails to pay the purchase price but nonetheless
alienates the thing sold in favor of the present possessor who acted
in good faith [EDCA Publishing v. Santos]. As a rule, the buyer in
a contact of sale acquires ownership of the thing sold upon actual
or constructive delivery even if the purchase price has not yet been
paid. Since ownership is already transferred to the buyer, he can
validly transfer the thing sold to another person. In this case, the
original seller cannot be said to have been “unlawfully deprived” of
the thing sold. Hence, Article 559 does not apply. The remedy of
the unpaid seller, in this situation, is an ordinary action for
Page 19 of 21
collection of sum of money against the buyer, with recovery of
damages.
In Tagatac v. Jimenez, the plaintiff sold her car to Feist,
who sold it to Sanchez, who sold it to Jimenez. When the payment
check issued to Tagatac by Feist was dishonored, the plaintiff sued
to recover the vehicle from Jimenez on the ground that she had
been unlawfully deprived of it by reason of Feist's deception. In
ruling for Jimenez, the Court of Appeals held:
The point of inquiry is whether plaintiff-appellant
Trinidad C. Tagatac has been unlawfully deprived  of her car. At
first blush, it would seem that she was unlawfully deprived
thereof, considering that she was induced to part with it by
reason of the chicanery practiced on her by Warner L. Feist.
Certainly, swindling, like robbery, is an illegal method of
deprivation of property. In a manner of speaking, plaintiff-
appellant was "illegally deprived" of her car, for the way by
which Warner L. Feist induced her to part with it is illegal and is
punished by law. But does this "unlawful deprivation" come
within the scope of Article 559 of the New Civil Code?
x x x           x x x          x x x
. . . The fraud and deceit practiced by Warner L. Feist
earmarks this sale as a voidable contract (Article 1390 N.C.C.).
Being a voidable contract, it is susceptible of either ratification
or annulment. If the contract is ratified, the action to annul it is
extinguished (Article 1392, N.C.C.) and the contract is cleansed
from all its defects (Article 1396, N.C.C.); if the contract is
annulled, the contracting parties are restored to their respective
situations before the contract and mutual restitution follows as a
consequence (Article 1398, N.C.C.).
However, as long as no action is taken by the party
entitled, either that of annulment or of ratification, the contract
of sale remains valid and binding. When plaintiff-appellant
Trinidad C. Tagatac delivered the car to Feist by virtue of said
voidable contract of sale, the title to the car passed to Feist. Of
course, the title that Feist acquired was defective and voidable.
Nevertheless, at the time he sold the car to Felix Sanchez, his
title thereto had not been avoided and he therefore conferred a
good title on the latter, provided he bought the car in good faith,
for value and without notice of the defect in Feist's title (Article
1506, N.C.C.). There being no proof on record that Felix
Sanchez acted in bad faith, it is safe to assume that he acted in
good faith.
EDCA Publishing v. Santos
Held; The above rulings are sound doctrine and reflect our own
interpretation of Article 559 as applied to the case before us.
Actual delivery of the books having been made, Cruz 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.
One may well imagine the adverse consequences if the phrase
"unlawfully deprived" were to be interpreted in the manner suggested by
the petitioner. A person relying on the seller's title who buys a movable
property from him would have to surrender it to another person claiming to
be the original owner who had not yet been paid the purchase price therefor.
The buyer in the second sale would be left holding the bag, so to speak, and
would be compelled to return the thing bought by him in good faith without
even the right to reimbursement of the amount he had paid for it.
It bears repeating that in the case before us, Leonor Santos took
care to ascertain first that the books belonged to Cruz before she agreed to
purchase them. The EDCA invoice Cruz showed her assured her that the
books had been paid for on delivery. By contrast, EDCA was less than
cautious — in fact, too trusting in dealing with the impostor. Although it
had never transacted with him before, it readily delivered the books he had
ordered (by telephone) and as readily accepted his personal check in
payment. It did not verify his identity although it was easy enough to do
this. It did not wait to clear the check of this unknown drawer. Worse, it
indicated in the sales invoice issued to him, by the printed terms thereon,
that the books had been paid for on delivery, thereby vesting ownership in
the buyer.
Surely, the private respondent did not have to go beyond that
invoice to satisfy herself that the books being offered for sale by Cruz
belonged to him; yet she did. Although the title of Cruz was presumed
under Article 559 by his mere possession of the books, these being movable
property, Leonor Santos nevertheless demanded more proof before deciding
to buy them.
It would certainly be unfair now to make the private respondents
bear the prejudice sustained by EDCA as a result of its own
negligence.1âwphi1 We cannot see the justice in transferring EDCA's loss
to the Santoses who had acted in good faith, and with proper care, when
they bought the books from Cruz.
The said article establishes two exceptions to the general
rule of irrevindicability, to wit, when the owner (1) has lost the
thing, or (2) has been unlawfully deprived thereof. In these cases,
the possessor cannot retain the thing as against the owner, who may
recover it without paying any indemnity, except when the
possessor acquired it in a public sale [Del Rosario v. Lucena].  value, and without notice of the seller's defect of title.
1. In Case of Loss
Pursuant to Article 719 of the New Civil Code, if a
movable has been lost (not abandoned), the finder does not
immediately become its owner because there are rules which are
required to be followed. If the finder knows the previous possessor,
the movable must be returned to the latter. If the previous possessor
is unknown, the finder is required to immediately deposit the
movable with the mayor of the city or municipality where the
finding has taken place. The mayor is then required to make a
public announcement of such finding for two consecutive weeks in
a manner he deems fit. If after six months, the owner does not
appear, the thing found, or its value, shall be awarded to the finder.
But if the owner appears on time, he shall be obliged to pay, as a
reward to the finder, one-tenth of the sum or of the price of the
thing found.
If the fi\nder does not comply with these procedural
requirements and appropriate for himself the movable he found, he
shall be guilty of the crime of theft, in which case, the owner shall
the right to recover the lost movable from him without need of
paying any indemnity. The same rule shall apply even if the
movable is already in the possession of third persons who may
have acquired it in good faith from such finder or thief [Aznar v.
Yapdiangco].
2. In Case of Unlawful Deprivation
The phrase “unlawfully deprived” in Article 559 is
susceptible of two meanings. It may be interpreted in a restrictive
sense as referring only to cases of theft or robbery. This is the view
followed by the French Code and adopted by Castan. Manresa, on
the other hand, is of the view that the phrase comprehends all acts
which constitute a crime or an offense and which take away from
the owner what belongs to him; all acts of occupation against the
will of the possessor and all acts of disposition of the thing made
by a person who is not the owner or accomplished by his authority.
In our jurisprudence, it appears that the latter view of Manresa is
the one being followed. Hence, the phrase “unlawfully withheld” in
Article 559 is not limited to cases of unlawful taking but extends to
cases where there has been abuse of confidence.
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Example: If A entrusts money to B who later gives the
same to C, an innocent recipient for value, A, cannot recover the
money (or negotiable document) from C since money ordinarily
does not bear the earmarks of particular ownership. BUT if instead
of money, the object had been an identifi able one, then recovery
can be had for C had acquired same from someone (B) who had no
authority to dispose of the same. And such recovery does not need
reimbursement. C should require the indemnity from B and not A
[U.S. v. Sotelo].
Aznar v. Yapdiangco
Held: The plaintiff-appellant accepts that the car in question
originally belonged to and was owned by the intervenor-appellee, Teodoro
Santos, and that the latter was unlawfully deprived of the same by Vicente
Marella. However, the appellant contends that upon the facts of this case,
the applicable provision of the Civil Code is Article 1506 and not Article
559 as was held by the decision under review. Article 1506 provides:
ART. 1506. Where the seller of goods has a voidable title
thereto, but his, title has not been voided at the time of the sale, the buyer
acquires a good title to the goods, provided he buys them in good faith, for
The contention is clearly unmeritorious. Under the aforequoted
provision, it is essential that the seller should have a voidable title at least.
It is very clearly inapplicable where, as in this case, the seller had no title at
all.
Vicente Marella did not have any title to the property under
litigation because the same was never delivered to him. He sought
ownership or acquisition of it by virtue of the contract. Vicente Marella
could have acquired ownership or title to the subject matter thereof only by
the delivery or tradition of the car to him.
Under Article 712 of the Civil Code, "ownership and other real
rights over property are acquired and transmitted by law, by donation, by
testate and intestate succession, and in consequence of certain contracts, by
tradition." As interpreted by this Court in a host of cases, by this provision,
ownership is not transferred by contract merely but by tradition or delivery.
Contracts only constitute titles or rights to the transfer or acquisition of
ownership, while delivery or tradition is the mode of accomplishing the
same (Gonzales v. Rojas, 16 Phil. 51; Ocejo, Perez and Co. v. International
Bank, 37 Phil. 631, Fidelity and Deposit Co. v. Wilson, 8 Phil. 51; Kuenzle
& Streiff v. Wacke & Chandler, 14 Phil. 610; Easton v. Diaz Co., 32 Phil.
180).
For the legal acquisition and transfer of ownership and other
property rights, the thing transferred must be delivered, inasmuch as,
according to settled jurisprudence, the tradition of the thing is a necessary
and indispensable requisite in the acquisition of said ownership by virtue of
contract. (Walter Laston v. E. Diaz & Co. & the Provincial Sheriff of
Albay, supra.)
So long as property is not delivered, the ownership over it is not
transferred by contract merely but by delivery. Contracts only constitute
titles or rights to the transfer or acquisition of ownership, while delivery or
tradition is the method of accomplishing the same, the title and the method
of acquiring it being different in our law. (Gonzales v. Roxas, 16 Phil. 51)
In the case on hand, the car in question was never delivered to
the vendee by the vendor as to complete or consummate the transfer of
ownership by virtue of the contract. It should be recalled that while there
was indeed a contract of sale between Vicente Marella and Teodoro Santos,
the former, as vendee, took possession of the subject matter thereof by
stealing the same while it was in the custody of the latter's son.
There is no adequate evidence on record as to whether Irineo
Santos voluntarily delivered the key to the car to the unidentified person
who went with him and L. De Dios to the place on Azcarraga where a sister
of Marella allegedly lived. But even if Irineo Santos did, it was not the
delivery contemplated by Article 712 of the Civil Code. For then, it would
be indisputable that he turned it over to the unidentified companion only so
that he may drive Irineo Santos and De Dios to the said place on Azcarraga
and not to vest the title to the said vehicle to him as agent of Vicente
Marella. Article 712 above contemplates that the act be coupled with the
intent of delivering the thing. (10 Manresa 132)
 The lower court was correct in applying Article 559 of the Civil the Code of Commerce and special laws. (Art. 1505, Civil Code,
Code to the case at bar, for under it, the rule is to the effect that if the owner see also Arts. 85, 86, Code of Commerce).
has lost a thing, or if he has been unlawfully deprived of it, he has a right to 2) if owner “is by his conduct precluded from denying
recover it, not only from the finder, thief or robber, but also from third the seller’s authority to sell.” (ESTOPPEL). (Art. 1505).
persons who may have acquired it in good faith from such finder, thief or
3) if possessor had obtained the goods because he was an
robber. The said article establishes two exceptions to the general rule of
irrevindicability, to wit, when the owner (1) has lost the thing, or (2) has
innocent purchaser for value and holder of a NEGOTIABLE
been unlawfully deprived thereof. In these cases, the possessor cannot document of title to the goods. (See Art. 1518)
retain the thing as against the owner, who may recover it without paying 4) Finders of lost article after lapse of six (6) months;
any indemnity, except when the possessor acquired it in a public sale. Article 719
Under Article 559 of the new Civil Code, a person illegally 5) Acquisitive prescription
deprived of any movable may recover it from the person in possession of
the same and the only defense the latter may have is if he has acquired it in
good faith at a public sale, in which case, the owner cannot obtain its return
without reimbursing the price paid therefor. In the present case, plaintiff has
been illegally deprived of his car through the ingenious scheme of
defendant B to enable the latter to dispose of it as if he were the owner
thereof. Plaintiff, therefore, can still recover possession of the car even if it
is in the possession of a third party who had acquired it in good faith from
defendant B. The maxim that "no man can transfer to another a better title
than he had himself" obtains in the civil as well as in the common law.
Finally, the plaintiff-appellant here contends that inasmuch as it
was the intervenor-appellee who had caused the fraud to be perpetrated by
his misplaced confidence on Vicente Marella, he, the intervenor-appellee,
should be made to suffer the consequences arising therefrom, following the
equitable principle to that effect. Suffice it to say in this regard that the right
of the owner to recover personal property acquired in good faith by another,
is based on his being dispossessed without his consent. 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 the new Civil
Code, specifically Article 559. Between a common law principle and a
statutory provision, the latter must prevail in this jurisdiction.

Arenas v. Raymundo
Held: A can get the jewels without giving to the pawnshop the
money borrowed by B because in the first place, the pledge was not valid
(not having been done by the owner or his duly authorized agent); in the
second place, there is no contractual relation between A and the pawnshop;
in the third place, A had been illegally deprived of the jewels; and finally it
would be unjust and unfair to the owner (A) considering the fact that
ordinarily, most pawnshops do not require their customers to first prove
their ownership of the objects being pledged.

Summary of Recovery or Non-Recovery Principle

(a) Owner MAY RECOVER WITHOUT

REIMBURSEMENT:
1) from possessor in bad faith.
2) from possessor in good faith (if owner had LOST the
property or been unlawfully deprived of it) (the acquisition being
from a private person). (Art. 559).

(b) Owner MAY RECOVER but should REIMBURSE:

1) if possessor acquired the object in good faith at a
PUBLIC SALE or AUCTION. (Art. 559). [Because the publicity
attendant to a public sale should have been suffi cient warning for
the owner to come forward and claim the property. (Manresa).].

(c) Owner CANNOT RECOVER, even if he offers to

REIMBURSE (whether or not the owner had lost or been
unlawfully deprived):
1) if possessor had acquired it in good faith by purchase
from a merchant’s store, or in fairs, or markets in accordance with

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