PROPERTY – 1ST EXAM
 vs. Ofilada, et al., 99 Phil., 108; 52 Off. Gaz.,
Xandredg Sumpt L. Latog
BOOK II
PROPERTY, OWNERSHIP, AND ITS
MODIFICATIONS
TITLE I
CLASSIFICATION OF PROPERTY
PRELIMINARY PROVISIONS
Article 414. All things which are or may be the object of
appropriation are considered either:
(1) Immovable or real property; or
(2) Movable or personal property.
Under the Civil Code, property, considered as an object,
is that which is, or may be, appropriated. Considered as a subject or
course in law, property is that branch of civil law which classifies
and defines the different kinds of appropriable objects, provides for
their acquisition and loss, and in general, treats of the nature and
consequences of real rights.
The law does not define what appropriation is, but it has
been considered as equivalent to occupation which is the wilful
apprehension of a corporeal object which has no owner, and with
intent to acquire its ownership.
The classification of property into immovables or
movables does not assume its importance from the fact of mobility
or non-mobility, but from the fact that different provisions of the
law govern the acquisition, possession, disposition, loss, and
registration of immovables and movables.
According to the Supreme Court in the case of Standard
Oil Co. of New York v. Jaranillo, under certain conditions, it is
undeniable that the parties to a contract may, by agreement, treat as
personal property that which by nature would be real property.
However, the true reason why the agreement would be valid
between the parties is the application of estoppel. It stated further
that it is a familiar phenomenon to see things classed as real
property for purposes of taxation, which on general principles may
be considered as personal property. However, it would seem that
under the Civil Code, it is only the LAW which may consider
certain real property (like growing crops) as personal property (for
the purpose of making a chattel mortgage). Thus, in Navarro v.
Pineda, the Court held:
In construing Arts. 334 and 335 of the Spanish Civil
Code (corresponding to Arts. 415 and 416, N.C.C.), for purposes
of the application of the Chattel Mortgage Law, it was held that
under certain conditions, "a property may have a character
different from that imputed to it in said articles. It is undeniable
that the parties to a contract may by agreement, treat as
personal property that which by nature would be real property"
(Standard Oil Co. of N.Y. vs. Jaranillo, 44 Phil., 632-633).
"There can not be any question that a building of mixed
materials may be the subject of a chattel mortgage, in which
case, it is considered as between the parties as personal property.
* *. The matter depends on the circumstances and the intention
of the parties". "Personal property may retain its character as
such where it is so agreed by the parties interested even though
annexed to the realty * *". (42 Am. Jur. 209-210, cited in
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Manarang, et al.
No. 8, p. 3954). The view that parties to a deed of chattel
mortgage may agree to consider a house as personal property for
the purposes of said contract, "is good only insofar as the
contracting parties are concerned. It is based, partly, upon the
principles of estoppel * *" (Evangelista vs. Alto Surety 103
Phil., 401). In a case, a mortgaged house built on a rented land,
was held to be a personal property not only because the deed of
mortgage considered it as such, but also because it did not form
an integral part of the land (Evangelista vs. Abad, [CA]; 36 Off.
Gaz., 2913), for it is now well settled that an object placed on
land by one who has only a temporary right to the same, such as
a lessee or usufructuary, does not become immobilized by
attachment (Valdez vs. Central Altagracia, 222 U.S. 58, cited in
Davao Sawmill Co. Inc. vs. Castillo, et al., 61 Phil. 709). Hence,
if a house belonging to a person stands on a rented
land belonging to another person, it may be mortgaged as a
personal property if so stipulated in the document of mortgage.
(Evangelista vs. Abad, supra). It should be noted, however, that
the principle is predicated on statements by the owner declaring
his house to be a chattel, a conduct that may conceivably estop
him from subsequent claiming otherwise (Ladera, et al. vs. C.W.
Hodges, et al., [CA]; 48 Off. Gaz., 5374). The doctrine,
therefore, gathered from these cases is that although in some
instances, a house of mixed materials has been considered as a
chattel between the parties and that the validity of the contract
between them, has been recognized, it has been a constant
criterion nevertheless that, with respect to third persons, who are
not parties to the contract, and specially in execution
proceedings, the house is considered as an immovable property
(Art. 1431, New Civil Code).
Navarro v. Pineda
Held: The house in question was treated as personal or movable
property, by the parties to the contract themselves. In the deed of chattel
mortgage, appellant Rufino G. Pineda conveyed by way of "Chattel
Mortgage" "my personal properties", a residential house and a truck. The
mortgagor himself grouped the house with the truck, which is, inherently a
movable property. The house which was not even declared for taxation
purposes was small and made of light construction materials: G.I. sheets
roofing, sawali and wooden walls and wooden posts; built on land
belonging to another.
The cases cited by appellants are not applicable to the present
case. The Iya cases, 103 Phil., 972 supra), refer to a building or a house of
strong materials, permanently adhered to the land, belonging to the owner
of the house himself. In the case of Lopez vs. Orosa, (103 Phil., 98), the
subject building was a theatre, built of materials worth more than P62
000.00 attached permanently to the soil. In these two cases and in the
Leung Yee Case, supra, third persons assailed the validity of the deed of
chattel mortgages; in the present case, it was one of the parties to the
contract of mortgages who assailed its validity.
Chapter 1
IMMOVABLE PROPERTY
Article 415. The following are immovable property:
(1) Land, buildings, roads and constructions of all kinds
adhered to the soil;
(2) Trees, plants, and growing fruits, while they are attached
to the land or form an integral party of an immovable;
(3) Everything attached to an immovable in a fixed manner,
in such a way that it cannot be separated therefrom without breaking
the material or deterioration of the object;
(4) Statues, reliefs, paintings, or other objects for use or
ornamentation, placed in buildings or on lands by the owner of the
immovable in such a manner that it reveals the intention to attach
them permanently to the tenements.
 (5) Machinery, receptacles, instruments, or implements
intended by the owner of the tenement for an industry or works which
may be carried on in a building or on a piece of land, and which tend
directly to meet the needs of the said industry or works;
(6) Animal houses, pigeon houses, beehives, fish ponds or
breeding places of similar nature, in case their owner has permanently
attached to the land, and forming a permanent part of it; the animals
in these places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the matter
thereof forms party of the bed, nd waters either running or stagnant;
(9) Docks and structures which, though floating, are
intended by their nature ad object to remain at a fixed place on a river,
lake, or coast.
(10) Contracts for public works, and servitudes and other
real rights over immovable property.
Academic Classification of Real Properties
(a) Real property by nature (like trees and plants)
(b) Real property by incorporation (like a building)
(c) Real property by destination or purpose (like
machinery placed by the owner of a tenement on it for direct use in
an industry to be carried on therein)
(d) Real property by analogy (like the right of usufruct,
or a contract for public works, or easements and servitudes, or
“sugar quotas” under Republic Act 1825 and Executive Order 873
[Presbitero v. Fernandez].
Paragraph 1: ‘Land, buildings, roads, and
constructions of all kinds adhered to the soil.’
Land by its very nature is an immovable. And even if
land is moved by an earthquake or an extraordinary happening, the
land should still be considered immovable. A shovelful of land
however, should be considered personal property, since this no
longer adheres to the soil. If land is rented, it is still immovable.
Buildings are considered immovable provided they are
more or less of a permanent structure, substantially adhering to the
land, and not mere superimpositions on the land like barong-
barongs or quonset fixtures and provided there is the intent of
permanent annexation. And this is true, whether the building is
built on one’s own land, or on rented land. The reason is clear: the
law on this point does not distinguish as to who built or owns the
building.
The foregoing provision of the Civil Code enumerates
land and buildings separately. This can only mean that a building
is, by itself, considered immovable.Thus, it has been held that while
it is true that a mortgage of land necessarily includes, in the
absence of stipulation of the improvements thereon, buildings, still
a building by itself may be mortgaged apart from the land on
which it has been built. Such mortgage would be still a real estate
mortgage for the building would still be considered immovable
property even if dealt with separately and apart from the land
[Soriano v. Sps. Galit].
Leung Yee v. Strong Machinery
Held: The building is real property, therefore, its sale as
annotated in the Chattel Mortgage Registry cannot be given the legal effect
of registration in the Registry of Real Property. The mere fact that the
parties decided to deal with the building as personal property does not
change its character as real property. Thus, neither the original registry in
the chattel mortgage registry, nor the annotation in said registry of the sale
of the mortgaged property had any effect on the building. However, since
the land and the building had first been purchased by “Strong Machinery”
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(ahead of Leung Yee), and this fact was known to Leung Yee, it follows
that Leung Yee was not a purchaser in good faith, and should therefore not
be entitled to the property. “Strong Machinery” thus has a better right to the
property.
Constructions of All Kinds. Though the law says
“constructions of all kinds adhered to the soil,” it is understood that
the attachment must be more or less permanent. (3 Manresa 18). A
wall or a fence would be a good example of this kind of real
property by incorporation. This is true even if the fence or wall is
built only of stones as long as there is an intent to permanently
annex the same. Even railroad tracks or rails would come under
this category, for although they are not exactly roads, they are
certainly “constructions.”
Paragraph 2: ‘Trees, plants and growing crops, while
they are attached to the land or form an integral part of an
immovable.’
Trees and Plants. No matter what their size may be,
trees and plants are considered real property, by nature if they are
the spontaneous products of the soil, and by incorporation, if they
were planted thru labor. But the moment they are detached or
uprooted from the land, they become personal property, except in
the case of uprooted timber, if the land is timber land.
Rule on ungathered fruits:
1. Even if the land is being leased by another, and the
fruits belong to the tenant, the fruits are still
considered as immovable because no exception or
qualification is made under the Civil Code.
2. However, when the fruits although ungathered are
sold, as when the entire harvest is sold before being
actually gathered, it is considered as a sale of
movables.
“Growing crops’’ are sometimes referred to as “standing
crops’’ or “ungathered fruits’’ or “growing fruits.’’
Paragraph 3: ‘Everything attached to an immovable
in a fixed manner, in such a way that it cannot be separated
therefrom without breaking the material or deterioration of
the object.’
NOTE: Under this paragraph, for the incorporated thing
to be considered real property, the injury or breakage or
deterioration in case of separation, must be SUBSTANTIAL.
Example: A fixed fire escape stairway firmly embedded
in the walls of a house, an aqueduct, or a sewer, or a well.
Machinery and Engineering v. Court of Appeals
Held: When the sheriff repaired to the premises of respondent,
Ipo Limestone Co., Inc., the machinery and equipment in question appeared
to be attached to the land, particularly to the concrete foundation of said
premises, in a fixed manner, in such a way that the former could not be
separated from the latter "without breaking the material or deterioration of
the object." Hence, in order to remove said outfit, it became necessary, not
only to unbolt the same, but, also, to cut some of its wooden supports.
Moreover, said machinery and equipment were "intended by the owner of
the tenement for an industry" carried on said immovable and tended
"directly to meet the needs of the said industry." For these reasons, they
were already immovable property pursuant to paragraphs 3 and 5 of Article
415 of Civil Code of the Philippines, which, are substantially identical to
paragraphs 3 and 5 of Article 334 of the Civil Code of Spain. As such
immovable property, they were not subject to replevin.
Benguet Corp. v. CBAA
Held: it would appear that whether a structure constitutes an
improvement so as to partake of the status of realty would depend upon the
degree of permanence intended in its construction and use. The expression
"permanent" as applied to an improvement does not imply that the
improvement must be used perpetually but only until the purpose to which
the principal realty is devoted has been accomplished. It is sufficient that
the improvement is intended to remain as long as the land to which it is
annexed is still used for the said purpose.
The Court is convinced that the subject dam falls within the
definition of an "improvement" because it is permanent in character and it
enhances both the value and utility of petitioner's mine. Moreover, the
immovable nature of the dam defines its character as real property under
Article 415 of the Civil Code and thus makes it taxable under Section 38 of
the Real Property Tax Code.
Effect of Separation
If the thing incorporated is temporarily removed with the
intention to replace the same, the thing is considered personal
property because the incorporation had ceased. The material fact of
incorporation or separation is what determines the condition of the
tenement; it recovers its status as movables, irrespective of the
intention of the owner.
Paragraph 4: ‘Statues, reliefs, paintings or other
objects for use or ornamentation, placed in buildings or on
land by the owner of the immovable in such a manner that it
reveals the intention to attach them permanently to the
tenements.’
Example: A fixed statue in the garden of a house, a
permanent painting on the ceiling, a picture embedded in the
concrete walls of a house, a rug or carpet fastened to the floor, as in
the case of wall to wall carpeting.
Paragraph 3 Distinguished from Paragraph 4:
Paragraph 4 (1) can be separated from immovable
without breaking or deterioration (2) must be placed by the owner,
or by his agent, express or implied (3) real property by
incorporation and destination
Paragraph 3 (1) cannot be separated from immovable
without breaking or deterioration (2) need not be placed by the
owner [Ladera v. Hodges]. (3) real property by incorporation and
destination.
Paragraph 5: ‘Machinery, receptacles, instruments,
or implements intended by the owner of the tenement for an
industry or works which may be carried on in a building or on
a piece of land, and which tend directly to meet the needs of the
said industry or works.’
Paragraph 5 refers to real property by destination or
purpose.
In the case of Bischoff vs. Pomar and Compania General
de Tabacos (12 Phil., 690), cited with approval in the case of Cea
vs. Villanueva (18 Phil., 538), this court laid down the following
doctrine:
"1. Realty; Mortgage of Real Estate Includes
Improvements and Fixtures.—It is a rule, established by the
Civil Code and also by the Mortgage Law, with which the
decisions of the courts of the United States are in accord, that in
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a mortgage of real estate, the improvements on the same are
included; therefore, alj objects permanently attached to a
mortgaged building or land, although they may have been
placed there after the mortgage was constituted, are also
included.
2. Id.; Id,; Inclusion or Exclusion of Machinery, etc.
—In order that it may be understood that the machinery and
other objects placed upon and used in connection with a
mortgaged estate are excluded from the mortgage, when it was
stated in the mortgage that the improvements, buildings, and
machinery that existed thereon were also comprehended, it is
indispensable that the exclusion thereof be stipulated between
the contracting parties."
Berkenkotter v. Cu Unjieng
Held: If the installation of the machinery and equipment in
question in the central of the Mabalacat Sugar Co., Inc., in lieu of the other
of less capacity existing therein, for' its sugar industry, converted them into
real property by reason of their purpose, it cannot be said that their
incorporation therewith was not permanent in character because, as
essential and principal elements of a sugar central, without them the sugar
central would be unable to function or carry on the industrial purpose for
which it was established. Inasmuch as the central is permanent in character,
the necessary machinery and equipment installed for carrying on the sugar
industry for which it has been established must necessarily be permanent.
Furthermore, the fact that B., A. Green bound himself to the
plaintiff B. H. Berkenkotter to hold said machinery and equipment as
security for the payment of the latter's credit and to refrain from mortgaging
or otherwise encumbering them until Berkenkotter has been fully
reimbursed therefor, is not incompatible, with the permanent character of
the incorporation of said machinery and equipment with the sugar central of
the Mabalacat Sugar Co., Inc., as nothing could prevent B. A. Green from
giving them as security at least under a second mortgage.
As to the alleged sale of said machinery and equipment to the
plaintiff and appellant after they had been permanently incorporated with
the sugar central of the Mabalacat Sugar Co., Inc., and while the mortgage
constituted on said sugar central to Cu Unjieng e Hijos remained in force,
only the right of redemption of the vendor Mabalacat Sugar Co., Inc., in the
sugar central with which said machinery and equipment had been
incorporated, was transferred thereby, subject to the right of the defendants
Cu Unjieng e Hijos under the first mortgage.
Essential Requisites
1) The placing must be made by the owner of the
tenement, his agent, or duly authorized legal representative.
2) The industry or works must be carried on in the
building or on the land. A transportation business is not carried on
in a building or in the compound [Mindanao Bus Co. v. City
Assessor].
3) The machines, etc., must tend directly to meet the
needs of said industry or works. (ADAPTABILITY).
4) The machines must be essential and principal elements
in the industry, and not merely incidental. [Thus, cash registers,
typewriters, calculators, computers, fax machines, etc., usually
found and used in hotels, restaurants, theaters, etc. are merely
incidentals, and not and should not be considered immobilized by
destination, for these businesses can continue or carry on their
functions without these equipments.
Caltex v. CBAA
Held: We hold that the said equipment and machinery, as
appurtenances to the gas station building or shed owned by Caltex (as to
which it is subject to realty tax) and which fixtures are necessary to the
operation of the gas station, for without them the gas station would be
useless, and which have been attached or affixed permanently to the gas
station site or embedded therein, are taxable improvements and machinery
within the meaning of the Assessment Law and the Real Property Tax
Code.
Effect of Separation
If the machine is still in the building, but is no longer
used in the industry conducted therein, the machine reverts to the
condition of a chattel. Upon the other hand, if still needed for the
industry, but separated from the tenement temporarily, the property
continues to be immovable, inasmuch as paragraph 5 refers, not to
real property by incorporation, but to real property by destination
or purpose.
As a rule, the machinery should be considered as
personal, since it was not placed on the land by the owner of said
land by the owner of said land. Immobilization by destination or
purpose cannot generally be made by a person whose possession of
the property is only temporary, otherwise we will be forced to
presume that he intended to give the property permanently away in
favor of the owner of the premises [Davao Saw Mill Co., Inc. v.
Castillo].
Machinery which is movable in its nature becomes
immobilized when placed in a plant by the owner of the property or
plant, but not when so placed by a tenant, a usufructuary, or a
person having only a temporary right, unless such person acted as
the agent of the owner [Davao Saw Mill Co., Inc. v. Castillo].
However, the machinery would be considered as real property by a
tenant who placed said machinery on the property pursuant to a
contract that it shall belong to the owner [Valdez v. Central
Altagracia, Inc.].
Paragraph 6: ‘Animal houses, pigeon-houses,
beehives, fishponds or breeding places of similar nature, in case
their owner has placed them or preserves them with the
intention to have them permanently attached to the land, and
forming a permanent part of it; the animals in these places are
included.’
The “houses” referred to here may already be deemed
included in paragraph 1 when speaking of “constructions of all
kinds adhered to the soil.”
It is submitted that even if the animals are temporarily
outside, they may still be considered as “real property,’’ as long as
the intent to return is present, as in the case of a homing pigeon.
When the animals inside the permanent animal houses
are alienated onerously or gratuitously, it is believed that the
transaction is an alienation of personal property, unless the building
or the tenement is itself also alienated. This is because in said
alienation, the animal structures must of necessity be detached
from the immovable. Hence, an ordinary inter vivos donation of a
pigeon-house need not be in a public instrument.
Paragraph 7: ‘Fertilizer actually used on a piece of
land.’
Fertilizers still in the barn and even those already on the
ground but wrapped inside some newspapers or any other covering
are still to be considered personal property, for they have not yet
been “actually” used or spread over the land.
Paragraph 8: ‘Mines, quarries, and slag dumps while
the matter thereof forms part of the bed, and waters, either
running or stagnant.’
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Mines, including the minerals still attached thereto, are
real properties, but when the minerals have been extracted, the
latter become chattels.
“Slag dump’’ is the dirt and soil taken from a mine and
piled upon the surface of the ground. Inside the “dump’’ can be
found the minerals.
The “waters” referred to are those still attached to or
running thru the soil or ground. But “water” itself as distinguished
from “waters,” is clearly personal property. Upon the other hand,
canals, rivers, lakes, and such part of the sea as may be the object
of appropriation, are classified as real property.
Paragraph 9: ‘Docks and structures which, though
floating, are intended by their nature and object to remain at a
fixed place on a river, or coast.’
A floating house tied to a shore or bank post and used as
a residence is considered real property, considering that the
“waters” on which it floats, are considered immovables. In a way,
we may say that the classification of the accessory (the floating
house) follows the classification of the principal (the waters).
However, if the floating house makes it a point to journey from
place to place, it assumes the category of a vessel.
Vessels are considered personal property. As a matter of
fact, they are indeed very movable [Philippine Refining Co., Inc.
v. Jarque]. They may be subject to chattel mortgage.
Fels Energy v. Province of Batangas
Article 415 (9) of the New Civil Code provides that docks and
structures which, though floating, are intended by their nature and object to
remain at a fixed place on a river, lake, or coast" are considered immovable
property. Thus, power barges are categorized as immovable property by
destination, being in the nature of machinery and other implements
intended by the owner for an industry or work which may be carried on in a
building or on a piece of land and which tend directly to meet the needs of
said industry or work.
Paragraph 10: ‘Contracts for public works, and
servitudes and other real rights over immovable property.’
The properties referred to in paragraph 10 are not
material things but rights, which are necessarily intangible.
It should be noted that the properties or rights referred to
in paragraph 10 are considered real property by analogy, inasmuch
as, although they are not material, they nevertheless partake of the
essential characteristics of immovable property.
Chapter 2
MOVABLE PROPERTY
Article 416. The following things are deemed to be personal
property:
(1) Those movables susceptible of appropriation which are
not included in the preceding article;
(2) Real property which by any special provision of law is
considered as personalty;
(3) Forces of nature which are brought under control by
science;
(4) In general, all things which can be transported from
place to place without impairment of the real property to which they
are fixed.
Examples of the Various Kinds of Personal Property
For Paragraph 1 — a fountain pen; a piano; animals.
 For Paragraph 2 — growing crops for the purposes of the
Chattel Mortgage Law (Sibal v. Valdez, 50 Phil. 512); machinery
placed on a tenement by a tenant who did not act as the agent of the
tenement owner. (Davao Sawmill v. Castillo, 61 Phil. 709).
Sibal v. Valdez
Held: It is clear from the foregoing provisions that Act No. 1508
was enacted on the assumption that "growing crops" are personal property.
This consideration tends to support the conclusion hereinbefore stated, that
paragraph 2 of article 334 of the Civil Code has been modified by section
450 of Act No. 190 and by Act No. 1508 in the sense that "ungathered
products" as mentioned in said article of the Civil Code have the nature of
personal property.  In other words, the phrase "personal property" should be
understood to include "ungathered products."
For Paragraph 3 — electricity, gas, light, nitrogen. (See
U.S. v. Carlos, 21 Phil. 543).
Laurel v. Abrogar
Held: The only requirement for a personal property to be the
object of theft under the penal code is that it be capable of appropriation. It
need not be capable of "asportation," which is defined as "carrying away."
Jurisprudence is settled that to "take" under the theft provision of the penal
code does not require asportation or carrying away.
Appropriation of forces of nature which are brought under
control by science such as electrical energy can be achieved by tampering
with any apparatus used for generating or measuring such forces of nature,
wrongfully redirecting such forces of nature from such apparatus, or using
any device to fraudulently obtain such forces of nature. In the instant case,
petitioner was charged with engaging in International Simple Resale (ISR)
or the unauthorized routing and completing of international long distance
calls using lines, cables, antennae, and/or air wave frequency and
connecting these calls directly to the local or domestic exchange facilities
of the country where destined.
Indeed, while it may be conceded that "international long
distance calls," the matter alleged to be stolen in the instant case, take the
form of electrical energy, it cannot be said that such international long
distance calls were personal properties belonging to PLDT since the latter
could not have acquired ownership over such calls. PLDT merely encodes,
augments, enhances, decodes and transmits said calls using its complex
communications infrastructure and facilities. PLDT not being the owner of
said telephone calls, then it could not validly claim that such telephone calls
were taken without its consent. It is the use of these communications
facilities without the consent of PLDT that constitutes the crime of theft,
which is the unlawful taking of the telephone services and business.
Therefore, the business of providing telecommunication and the
telephone service are personal property under Article 308 of the Revised
Penal Code, and the act of engaging in ISR is an act of "subtraction"
penalized under said article. However, the Amended Information describes
the thing taken as, "international long distance calls," and only later
mentions "stealing the business from PLDT" as the manner by which the
gain was derived by the accused. In order to correct this inaccuracy of
description, this case must be remanded to the trial court and the
prosecution directed to amend the Amended Information, to clearly state
that the property subject of the theft are the services and business of
respondent PLDT.
For Paragraph 4 — machinery not attached to land nor
needed for the carrying on of an industry conducted therein;
portable radio; a laptop computer; a diploma hanging on the wall.
Three Tests to Determine whether property Is Movable
or Immovable Manresa mentions three tests:
(a) If the property is capable of being carried from place
to place (test by description);
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(b) If such change in location can be made without
injuring the real property to which it may in the meantime be
attached (test by description); and
(c) If finally, the object is not one of those enumerated or
included in Art. 415 (test by exclusion). Then the inevitable
conclusion is that the property is personal property. (3 Manresa 46-
47).
NOTE: Test by exclusion is superior to the test by
description.
Article 417. The following are also considered as personal
property:
(1) Obligations and actions which have for their object
movables or demandable sums; and
(2) Shares of stock of agricultural, commercial and
industrial entities, although they may have real estate.
Paragraph 1: “Obligations and actions which have for
their object movables or demandable sums.’’
The term obligations really refers to ‘credits’ and also
includes bonds, which are technically obligations of the entity
issuing them.
Actions – if somebody steals my car, my right to bring
action to recover the automobile is personal property by itself. A
promissory note (IOU) is personal property, the right to collect is
also a personal property.
Paragraph 2: “Shares of stock of agricultural,
commercial, and industrial entities, although they may have
real estate.”
Shares of stock are a peculiar kind of personal property,
and are unlike other classes of personal property in that the
property right of shares of stock can only be exercised or enforced
where the corporation is organized and has its place of business,
and can exist only as an incident to and connected with the
corporation, and this class of property is inseparable from the
domicile of the corporation itself [Black Eagle Mining Co. v.
Conroy].
A share of stock in a gold mining corporation is personal
property; but the gold mine itself, as well as any land of the
corporation, is regarded as real property by the law. The certificate
itself evidencing ownership of the share, as well as the share itself,
is regarded as personal property. Being personal, it may be the
object of a chattel mortgage [Chua Guan v. Samahang Magsasaka,
Inc].
Article 418. Movable property is either consumable or non-
consumable. To the first class belong those movables which cannot be
used in a manner appropriate to their nature without their being
consumed; to the second class belong all the others.
Consumable — this cannot be used according to its
nature without its being consumed.
Non-consumable — any other kind of movable property.
Chapter 3
PROPERTY IN RELTION TO THE PERSON TO
WHOM IT BELONGS
 Article 419. Property is either of public dominion or of
private ownership.
Article 420. The following things are property of public
dominion:
(1) Those intended for public use, such as road , canals,
rivers, torrents, ports and bridges constructed by the state, banks,
shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public
use, and are intended for some public service or for the development of
national wealth.
Public dominion means ownership by the State in that the
State has control and administration; in another sense, public
dominion means ownership by the public in general, in that not
even the State or subdivisions thereof may make them the object of
commerce as long as they remain properties for public use.
The State may own properties both in its public capacity
and private capacity (patriominal). Patrimonial property are
properties owned by the State in its private capacity or in the
course of its proprietary functions.
Concept of Jura Regalia
The regalia doctrine is enshrined in our present
Constitution. Section 2 paragraph 1, Article XII of the 1987
Constitution states:
Pursuant to the Regalian Doctrine, all lands of the public
domain belong to the State. Hence, "[a]ll lands not appearing to be
clearly under private ownership are presumed to belong to the
State. Also, public lands remain part of the inalienable land of the
public domain unless the State is shown to have reclassified or
alienated them to private persons." To prove that a land is
alienable, the existence of a positive act of the government, such as
presidential proclamation or an executive order; an administrative
action; investigation reports of Bureau of Lands investigators; and
a legislative act or a statute declaring the land as alienable and
disposable must be established [Republic v. Cortes, Sr].
Cruz v. DENR, the Regalian Doctrine does not negate
native titles.
Carino v Insular Government. The land has been held by
individuals under a claim of private ownership. It will be presumed
to have been held in private even before the Spanish conquest
independent of any grant of the Spanish crown.
Three Kinds of Property of Public Dominion
(a) For public use — like roads, canals
Public use is “use that is not confined to privileged
individuals, but is open to the indefinite public [Villarico v.
Sarmiento]. To constitute public use, the public in general should
have equal or common rights to use the land or facility involved on
the same terms, however limited in the number of people who can
actually avail themselves of it at a given time [Republic v.
Gonzales].
In Villanueva v. Castañeda, Jr., citing Espiritu v.
Municipal Council of Pozorrubio, the Court pronounced that town
plazas are properties of public dominion, to be devoted to public
use and to be made available to the public in general. They are
outside the commerce of man and cannot be disposed of or even
leased by the municipality to private parties.
Page 6 of 25
Domalsin v. Valenciano
Held: At the outset, it must be made clear that the property
subject of this case is a portion of the road-right-of way of Kennon Road
which is located in front of a parcel of land that petitioner bought by way of
Deed of Waiver and Quitclaim from Castillo Binay-an. The admission of
petitioner in his Amended Complaint that respondents started constructing a
building within the Kennon Road road-right-of-way belies his claim that
the lot in question is his.
In light of this exposition, it is clear that neither the petitioner
nor the respondents can own nor possess the subject property the same
being part of the public dominion.
Villarico v. Sarmiento
Held: Considering that the lot on which the stairways were
constructed is a property of public dominion, it cannot be burdened by a
voluntary easement of right of way in favor of herein petitioner.  In fact, its
use by the public is by mere tolerance of the government through the
DPWH.  Petitioner cannot appropriate it for himself.  Verily, he cannot
claim any right of possession over it. 
City of Pasig v. Republic
Held: In the present case, the parcels of land are not properties
of public dominion because they are not "intended for public use, such as
roads, canals, rivers, torrents, ports and bridges constructed by the State,
banks, shores, roadsteads." Neither are they "intended for some public
service or for the development of the national wealth." MPLDC leases
portions of the properties to different business establishments. Thus, the
portions of the properties leased to taxable entities are not only subject to
real estate tax, they can also be sold at public auction to satisfy the tax
delinquency.
In sum, only those portions of the properties leased to taxable
entities are subject to real estate tax for the period of such leases. Pasig City
must, therefore, issue to respondent new real property tax assessments
covering the portions of the properties leased to taxable entities. If the
Republic of the Philippines fails to pay the real property tax on the portions
of the properties leased to taxable entities, then such portions may be sold
at public auction to satisfy the tax delinquency.
PFDA v. CBAA
Held: The Lucena Fishing Port Complex, which is one of the
major infrastructure projects undertaken by the National Government under
the Nationwide Fishing Ports Package, is devoted for public use and falls
within the term "ports."
What about airports?
The Supreme Court has clarified in Manila International
Airport Authorities v. Court appeals:
The term "ports" includes seaports and airports. The
MIAA Airport Lands and Buildings constitute a "port"
constructed by the State. Under Article 420 of the Civil Code,
the MIAA Airport Lands and Buildings are properties of public
dominion and thus owned by the State or the Republic of the
Philippines.
The Airport Lands and Buildings are devoted to
public use because they are used by the public for international
and domestic travel and transportation. The fact that the MIAA
collects terminal fees and other charges from the public does not
remove the character of the Airport Lands and Buildings as
properties for public use. The operation by the government of a
tollway does not change the character of the road as one for
public use. Someone must pay for the maintenance of the road,
either the public indirectly through the taxes they pay the
government, or only those among the public who actually use
the road through the toll fees they pay upon using the road. The
tollway system is even a more efficient and equitable manner of
taxing the public for the maintenance of public roads.

(b) For public service — like national government
buildings, army rifles, army vessels (may be used only by duly
authorized persons).
This kind of property includes all property devoted to
public service. In Baguio Citizens Action v, City Council, it was
held that all public buildings constructed by the State for its offices
and functionaries belong to this class.
In Reversion of Reconstituted Title vs. Registry of Deeds,
it was held that properties of LGUs are limited to properties for
public use and patrimonial property. (READ THIS CASE
NALANG).
(c) For the development of national wealth — like our
natural resources.
Characteristics of Properties of Public Dominion
(a) They are outside the commerce of man, and cannot be
leased, donated, sold, or be the object of any contract (Mun. of
Cavite v. Rojas, 30 Phil. 602), except insofar as they may be the
object of repairs or improvements and other incidental things of
similar character.
In the case of Chavez v. Public Estates Authority and
AMARI Coastal Development Corporation, the Supreme Court
held that foreshore and submerged areas irrefutably belonged to the
public domain and were inalienable unless reclaimed, classified as
alienable lands open to disposition and further declared no longer
needed for public service.
City of Manila v. Garcia
Held: These permits, erroneously labeled "lease" contracts, were
issued by the mayors in 1947 and 1948 when the effects of the war had
simmered down and when these defendants could have very well adjusted
themselves. Two decades have now elapsed since the unlawful entry.
Defendants could have, if they wanted to, located permanent premises for
their abode. And yet, usurpers that they are, they preferred to remain on city
property.
Defendants' entry as aforesaid was illegal. Their constructions
are as illegal, without permits. The city charter enjoins the mayor to
"safeguard all the lands" of the City of Manila.
Surely enough, the permits granted did not "safeguard" the city's
land in question. It is our considered view that the Mayor of the City of
Manila cannot legalize forcible entry into public property by the simple
expedient of giving permits or, for that matter, executing leases.
MIAA v. Court of Appeals
Held: The Airport Lands and Buildings of MIAA are devoted to
public use and thus are properties of public dominion. As properties of
public dominion, the Airport Lands and Buildings are outside the
commerce of man. The Court has ruled repeatedly that properties of public
dominion are outside the commerce of man
Land Bank v. Cacayuran
Held: Records disclose that the loans were executed by the
Municipality for the purpose of funding the conversion of the Agoo Plaza
into a commercial center pursuant to the Redevelopment Plan. However,
the conversion of the said plaza is beyond the Municipality’s jurisdiction
considering the property’s nature as one for public use and thereby, forming
part of the public dominion. Accordingly, it cannot be the object of
appropriation either by the State or by private persons. Nor can it be the
subject of lease or any other contractual undertaking.
(b) They cannot be acquired by prescription; no matter
how long the possession of the properties has been, “there can be
Page 7 of 25
no prescription against the State regarding property of the public
domain.” (Palanca v. Commonwealth, 40 O.G. 6th S, No. 10, p.
148; Meneses v. Commonwealth, 69 Phil. 505). “Property of the
State or any of its subdivisions not patrimonial in character shall
not be the object of prescription.” (Art. 1113). Even a city or a
municipality cannot acquire them by prescription as against the
State. (See City of Manila v. Ins. Gov’t., 10 Phil. 327).
(c) They cannot be registered under the Land
Registration Law and be the subject of a Torrens Title; if
erroneously included in a Torrens Title, the land involved remains
property of public dominion. (See Palanca v. Commonwealth, 69
Phil. 449; see also Bishop of Calbayog v. Director of Lands, L-
23481, June 29, 1972, 45 SCRA 418).
It is well-recognized that if a person obtains a title under
the Public Land Act which includes, by oversight, lands which
cannot be registered under the Torrens system, or when the
Director of Lands did not have jurisdiction over the same because
it is a public domain, the grantee does not, by virtue of the said
certificate of title alone, become the owner of the land or property
illegally included. Otherwise stated, property of the public domain
is incapable of registration and its inclusion in a title nullifies that
title [Sps. Morandarte v. Court of Appeals].
Sps Morandarte v. Court of Appeals
Held: The present controversy involves a portion of the public
domain that was merely erroneously included in the free patent. A different
rule would apply where fraud is convincingly shown. The absence of clear
evidence of fraud will not invalidate the entire title of the Morandarte
spouses.
(d) They, as well as their usufruct, cannot be levied upon
by execution, nor can they be attached. Properties of public
dominion, being for public use, are not subject to levy,
encumbrance or disposition through public or private sale. Any
encumbrance, levy on execution or auction sale of any property of
public dominion is void for being contrary to public policy.
Essential public services will stop if properties of public dominion
are subject to encumbrances, foreclosures and auction sale [MIAA
v. Court of Appeals].
(e) In general, they can be used by everybody.
(f) They may be either real or personal property, for it
will be noted that the law here makes no distinction.
Paragraph 1 states “and others of similar character.”
Examples are the following:
(a) public streams [Com. v. Meneses].
(b) natural beds of rivers [Meneses v. Commonwealth].
(c) river channels.
(d) waters of rivers.
(e) creeks — because “a creek is no other than an arm
extending from a river” [Mercado v. Mun. Pres. of Macabebe;
Samson v. Dionisio].
Furthermore, in Celestial v. Cachopero, the Supreme
Court ruled that a dried-up creek bed is property of public
dominion:
A creek, like the Salunayan Creek, is a recess or arm
extending from a river and participating in the ebb and flow of
the sea. As such, under Articles 420(1) and 502(1) of the Civil
Code, the Salunayan Creek, including its natural bed, is property
of the public domain which is not susceptible to private
appropriation and acquisitive prescription. And, absent any
 declaration by the government, that a portion of the creek has
dried-up does not, by itself, alter its inalienable character
(f) all lands thrown up by the sea and formed by
accretion upon the shore by the action of the water, together with
the adjacent shore
(g) lands reclaimed from the sea by the Government.
(Gov’t. v. Cabangis, 53 Phil. 112). When the sea moved towards
the estate and the tide invaded it, the invaded property became
foreshore land and passed to the realm of the public domain. In
fact, the Court in Government vs. Cabangis annulled the
registration of land subject of cadastral proceedings when the
parcel subsequently became foreshore land. In another case, the
Court voided the registration decree of a trial court and held that
said court had no jurisdiction to award foreshore land to any
private person or entity [Republic v. Court of Appeals].
(h) the Manila Bay area or coastal area inasmuch as it
belongs to the state, and is used as a waterway [Vda. de Villongco
v. Moreno].
(i) private lands which have been invaded by the waters
or waves of the sea and converted into portions of the shore or
beach [Natividad v. Director of Lands].
Are rivers whether navigable or not, properties of
public dominion?
ANSWER: It would seem that Article 420 makes no
distinction.
However: (a) It should be noted that in Commonwealth v.
Meneses, the Court mentioned only “navigable river” instead of
“river” merely.
(b) In the case of Commonwealth v. Palanca, the court
seemed to imply that had the rivers been “non-navigable” they
would not have been properties of public dominion.
(c) In the case of Palanca v. Commonwealth, the
Supreme Court said: “The river Viray and the estero Sapang
Sedoria, being navigable, useful for commerce, for navigation, and
fishing, have the character of public domain (or ownership).’’
Besides, in that case, the government lawyers proved that the rivers
were navigable. (All this would seem to imply that non-navigable
rivers are not of public dominion, otherwise, why did the
government have to prove that the rivers were navigable, and why
did the Supreme Court use the participial phrase “being
navigable’’?) In a decision, the Supreme Court has held that if a
river is navigable, it is of public dominion.
Article 421. All other property of the State, which is not of
the character stated in the preceding article, is patrimonial property.
Patrimonial property of the State is the property it owns
but which is not devoted to public use, public service, or the
development of the national wealth. It is wealth owned by the State
in its private, as distinguished from its public, capacity.
Article 422. Property of public dominion, when no longer
intended for public use or for public service, shall form part of the
patrimonial property of the State.
When does change take effect? Only upon declaration of
government through the legislative and executive departments to
the effect that it is no longer needed for public use or public
Page 8 of 25
service. Even if the property is not used presently, the properties
will not automatically convert the land into patrimonial property.
In Faustino Ignacio v. Dir. of Lands, the Supreme Court,
citing Natividad v. Dir. of Lands (CA), said that only the executive
and possibly the legislative departments have the authority and
power to make the declaration that any land so gained by the sea is
not necessary for purposes of public utility, or for the establishment
of special industries or for Coast Guard Service. If no such
declaration has been made by said departments, the lot in question
forms part of the public domain. Consequently, until there is made
a formal declaration on the part of the Government thru the
executive department or the legislature, the parcel in question
continues to be part of the public domain, and cannot be subject to
acquisitive prescription.
It is not for the President to convey valuable real property
of the government on his or her own sole will. Any such
conveyance must be authorized and approved by a law enacted by
the Congress. It requires executive and legislative concurrence
[Laurel v. Garcia].
Dumo v. Republic
Held: The fact that the Republic did not oppose the formal offer
of evidence of Dumo in the RTC does not have the effect of proving or
impliedly admitting that the land is alienable and disposable. The alienable
and disposable character of the land must be proven by clear and
incontrovertible evidence. It may not be impliedly admitted, as Dumo
vehemently argues. It was the duty of Dumo to prove that the land she
sought to register is alienable and disposable land of the public domain.
This burden would have been discharged by submitting the required
documents – a copy of the original classification approved by the DENR
Secretary and certified as a true copy by the legal custodian thereof, and a
certificate of land classification status issued by the CENRO or the PENRO
based on the approved land classification by the DENR Secretary. Without
these, the applicant simply fails to prove that the land sought to be
registered forms part of the alienable and disposable lands of the public
domain and thus, it may not be susceptible to private ownership. As
correctly pointed out by the CA, the land is presumed to belong to the State
as part of the public domain.
Article 423. The property of provinces, cities, and
municipalities is divided into property for public use and patrimonial
property.
Properties of Political Subdivisions
(a) Property for public use
(b) Patrimonial property
Alienation of the Properties
(a) Properties of a political subdivision for public use
cannot be alienated as such, and may not be acquired by
prescription.
(b) Properties of a political subdivision which are
patrimonial in character may be alienated, and may be acquired by
others thru prescription.
Article 424. Property for public use, in the provinces, cities
and municipalities consist of the provincial roads, city streets, the
squares, fountains, public waters, promenades, and public works for
public service paid for by said provinces, cities or municipalities.
All other property possessed by any of them is patrimonial
and shall be governed by this Code, without prejudice to the provisions
of special laws.
 Apparently under Article 424, the basis of the
classification would be the use, however, in Salas v. Jarencio, L-
29788, Aug. 30, 1972, the Supreme Court ruled that the National
Government still controls the disposition of properties of political
subdivisions (regardless of the use to which they are devoted)
provided that the properties CAME FROM THE STATE. The
Court further said that in the absence of proof that the province,
city, or municipality acquired the properties with their own funds,
we should PRESUME that they really had come from the State.
Thus, it can be said that properties of provinces, cities, and
municipalities may also be classified into the following:
(a) those acquired with their own funds (in their private
or corporate capacity) — here the political subdivision has
ownership and control.
(b) those which do not fall under (a) — these are subject
to the control and supervision of the state. In fact, they are held by
the political subdivision in trust for the state for the benefi t of the
inhabitants (whether the purpose of the property is governmental or
proprietary). Reason the political subdivision owes its creation to
the State. It is the State’s agents, or subdivision, or instrumentality
for the purposes of local administration.
Article 425. Property of private ownership, besides the
patrimonial property of the State, provinces, cities, and municipalities,
consists of all property belonging to private persons, either individually
or collectively.
Other private properties are those that belong to private
persons: individually or collectively. Incidentally, by virtue of
Article 425, the Code recognizes the rights to private property.
“Collectively’’ refers to ownership by private individuals as co-
owners; or by corporations, partnerships, or other juridical persons
(such as foundations) who are allowed by the Civil Code to possess
and acquire properties.
PROVISIONS COMMON TO THE THREE
PRECEDING CHAPTERS
Article 426. Whenever by provision of the law, or an
individual declaration, the expression “immovable things or property,”
or “movable things or property,” is used, it shall be deemed to include,
respectively, the things enumerated in Chapter 1 and in Chapter 2.
Whenever the word “muebles,” or “furniture,” is used alone,
it shall not be deemed to include money, credits, commercial securities,
stocks, and bonds, jewelry, scientific or artistic collections, books,
medals, arms, clothing, horses or carriages and their accessories,
grains, liquids, and merchandise, or other things which do not have as
their principal object the furnishing or ornamenting of a building,
except where from the context of the law, or the individual declaration,
the contrary clearly appears.
The word ‘muebles’ is used synonymously with
“furniture.” Note that furniture has generally for its principal object
the furnishing or ornamenting of a building. Found in the old Code,
the use of “muebles” was retained by the Code Commission,
evidently because many people are acquainted with its meaning.
(See 1 Capistrano, Civil Code, p. 371). Note the enumerations of
things which are not included in the term “furniture.”
TITLE II
OWNERSHIP
Chapter 1
Page 9 of 25
OWNERSHIP IN GENERAL
Article 427. Ownership may be exercised over things or
rights.
Ownership, Defined in the Civil Code does not define
ownership. Instead, the Code simply enumerates the rights which
are included therein, as follows:
(1) the right to enjoy the property (Art. 428, par. 1,
NCC);
(2) the right to dispose the property (Art. 428, par. 1,
NCC);
(3) the right to recover the property from any holder or
possessor (Art. 428, par. 2, NCC);
(4) the right to exclude any person from enjoyment and
disposal of the property (Art. 429, NCC);
(5) the right to enclose or fence the land or tenement
(Art. 430, NCC);
(6) the right to demand indemnity for damages suffered
due to lawful interference by a third person to avert an imminent
danger (Art. 432, NCC);
(7) the right to just compensation in case of eminent
domain (Art. 435, NCC);
(8) the right to construct any works or make any
plantations and excavations on the surface or subsurface of the land
(Art. 437, NCC);
(9) the right to hidden treasure found in the owner’s
property (Art. 438, NCC); and
(10) the right to accessions. (Art. 440, NCC)
At least, in our jurisdiction, the more acceptable
definition of ownership is that given by Justice J.B.L. Reyes. He
defines ownership as “an independent right of exclusive enjoyment
and control of the thing for the purpose of deriving therefrom all
advantages required by the reasonable needs of the owner (holder
of the right) and the promotion of the general welfare but subject to
the restrictions imposed by law and the right of others.”
Article 428. The owner has the right to enjoy and dispose of
a thing, without other limitations than those established by law.
The owner has also a right of action against the holder and
possessorof the thing in order to recover it.
In Roman Law, the attributes of ownership are the
following: (1) jus utendi or the right to use property without
destroying its substance; (2) jus fruendi or the right to the fruits; (3)
jus disponendi or the right to dispose or alienate; (4) jus abutendi
or the right to abuse or to consume the thing by its use; (5) jus
possidendi or the right to possess; and (6) jus vindicandi or the
right to recover.
Marcos v. Endencia & GSIS v. CA (TSN Source copy
late)
Limitation on ownership:
1. Imposed by law: Easement of right of way; party
wall; drainage.
2. Imposed by the State: Police power, power of
taxation, eminent domain.
3. Imposed by owner: In cases of lease, the owner
cannot in the meantime physically occupy the
property.
 4. Imposed by grantor: The donor may prohibit the
donee from partitioning the property for a period not
exceeding 20 years.
Article 429. The owner or lawful possessor of a thing has the
right to exclude any person from the enjoyment and disposal thereof.
For this purpose, he may use such force as may be reasonably
necessary to repel or prevent an actual or threatened unlawful physical
invasion or usurpation of his property.
Doctrine of Self-Help
As a necessary consequence of ownership, the owner has
the right of exclusive enjoyment and control over his property, as
well as to its exclusive possession. He may, therefore, exclude any
person from its enjoyment and disposal. This right of the owner is
so important that the law deems it appropriate to allow him to “use
such force as may be reasonably necessary to repel or prevent an
actual or threatened unlawful physical invasion or usurpation of his
property.” The employment of such reasonable force in defense of
his property is what is known in juridical science as the doctrine of
self-help [People v. Depante].
The actual invasion of property may be:
a. Mere disturbance of possession – force may be used
against it at any time as long as it continues even beyond the
prescriptive period for an action of forcible entry. Thus if a
ditch opened by Pedro in the land of Juan, the latter may
close it or cover it by force at any time.
b. Real dispossession – force, to regain possession, can only
be used immediately after the dispossession. Thus, if Juan
without the permission of Pedro picks up a book belonging
to the latter and runs off with it, Pedro can pursue Juan and
recover the book by force.
Is this right absolute?
The use of reasonable force in defense of property under
the doctrine of self-help is authorized only if the purpose is to
“repel” or “prevent” an actual or threatened unlawful physical
invasion or usurpation of the said property. In Article 429 of the
Code, the word “repel” is, of course, referring to an “actual”
unlawful physical invasion or usurpation of the property; while the
word “prevent” is referring to a “threatened” unlawful physical
invasion or usurpation of the property. It is clear, therefore, that the
doctrine of self-help can only be exercised at the time of actual or
threatened dispossession, and not when possession has already
been lost [German Management v. Court of Appeals]. In the latter
case, the owner must resort to judicial process for the recovery of
property as required in Article 536 of the Civil Code. In other
words, the doctrine of self-help cannot be invoked for the purpose
of recovering property.
Villafuerte v. Court of Appeals
Held: Both the trial court and the Court of Appeals concluded
that the lease contracts between petitioners and private respondents over the
latter's respective lots had already expired. There was also a congruence of
findings that it was wrong for private respondents to fence their properties
thereby putting to a halt the operation of petitioners' gasoline station. To
this, we agree.
Article 536 of the Civil Code previously quoted explicitly
provides for the proper recourse of one who claims to be entitled to the
possession of a thing. When private respondents personally took it upon
themselves to evict petitioners from their properties, which act was in clear
Page 10 of 25
contravention of the law, they became liable "for all the necessary and
natural consequences of [their] illegal act.
Abuse of rights rule
It bears stressing that property rights must be considered,
for many purposes, not as absolute, unrestricted dominions but as
an aggregation of qualified privileges, the limits of which are
prescribed by the equality of rights, and the correlation of rights
and obligations necessary for the highest enjoyment of property by
the entire community of proprietors. Indeed, in Rellosa vs. Pellosis,
the Supreme Court held that:
Petitioner might verily be the owner of the land, with
the right to enjoy and to exclude any person from the enjoyment
and disposal thereof, but the exercise of these rights is not
without limitations. The abuse of rights rule established in
Article 19 of the Civil Code requires every person to act with
justice, to give everyone his due; and to observe honesty and
good faith. When right is exercised in a manner which discards
these norms resulting in damage to another, a legal wrong is
committed for which the actor can be held accountable.
Rights of property, like all other social and
conventional rights, are subject to such reasonable limitations in
their enjoyment and to such reasonable restraints established by
law.
UCPB v. Basco
Held: On its face, the Memorandum barred the respondent, a
stockholder of the petitioner bank and one of its depositors, from gaining
access to all bank premises under all circumstances. The said Memorandum
is all-embracing and admits of no exceptions whatsoever. Moreover, the
security guards were enjoined to strictly implement the same.
We agree that the petitioner may prohibit non-employees from
entering the working area of the ATM section. However, under the said
Memorandum, even if the respondent wished to go to the bank to encash a
check drawn and issued to him by a depositor of the petitioner bank in
payment of an obligation, or to withdraw from his account therein, or to
transact business with the said bank and exercise his right as a depositor, he
could not do so as he was barred from entry into the bank. Even if the
respondent wanted to go to the petitioner bank to confer with the corporate
secretary in connection with his shares of stock therein, he could not do so,
since as stated in the Memorandum of petitioner Ongsiapco, he would not
be allowed access to all the bank premises. The said Memorandum, as
worded, violates the right of the respondent as a stockholder or a depositor
of the petitioner bank, for being capricious and arbitrary.
MWSS v. Act Theater, Inc.
Held: Concededly, the petitioner, as the owner of the utility
providing water supply to certain consumers including the respondent, had
the right to exclude any person from the enjoyment and disposal thereof.
However, the exercise of rights is not without limitations. Having the right
should not be confused with the manner by which such right is to be
exercised.
While it is true that MWSS had sent a notice of investigation to
plaintiff-appellee prior to the disconnection of the latter’s water services,
this was done only a few hours before the actual disconnection. Upon
receipt of the notice and in order to ascertain the matter, Act sent its
assistant manager Teodulo Gumalid, Jr. to the MWSS office but he was
treated badly on the flimsy excuse that he had no authority to represent Act.
Act’s water services were cut at midnight of the day following the
apprehension of the employees. Clearly, the plaintiff-appellee was denied
due process when it was deprived of the water services. As a consequence
thereof, Act had to contract another source to provide water for a number of
days. Plaintiff-appellee was also compelled to deposit with MWSS the sum
of P200,000.00 for the restoration of their water services.
 Thus, in order for defense of property to be appreciated
as a justifying circumstance, it is necessary that the means
employed to prevent or repel the aggression must also be
reasonable. Note that under the doctrine of self-help in Article 429
of the Civil Code, what is authorized is the use of force “as may be
reasonably necessary” for the purpose of repelling or preventing
any actual or threatened unlawful physical invasion or usurpation
of one’s property. In determining the reasonableness of the means
employed, the absence of an attack against the person of the owner
or lawful possessor of the property must be considered since
defense of property is not of such importance as the right to life
and limb. In People v. Narvaez, for example, the Court held that
when the appellant fired his shotgun from his window, killing his
two victims, his resistance was disproportionate to the attack.
Hence, he was credited only with special mitigating circumstance
of incomplete defense of property.
It has recently been held that if a person finds a
neighbor’s pig among the plants on his land, the proper thing for
him to do is to drive the pig away, and to fi le a civil action against
the owner of the pig for damage to the plants. It would be wrong
for him to shoot the pig to death for the purpose of vengeance —
and for such an act, he can be convicted of the crime of malicious
mischief [People v. Segovia].
People v. Narvaez
Held: The reasonableness of the resistance is also a requirement
of the justifying circumstance of self defense or defense of one's rights
under paragraph 1 of Article 11, Revised Penal Code. When the appellant
fired his shotgun from his window, killing his two victims, his resistance
was disproportionate to the attack.
WE find, however, that the third element of defense of property
is present, i.e., lack of sufficient provocation on the part of appellant who
was defending his property. As a matter of fact, there was no provocation at
all on his part, since he was asleep at first and was only awakened by the
noise produced by the victims and their laborers. His plea for the deceased
and their men to stop and talk things over with him was no provocation at
all.
Be that as it may, appellant's act in killing the deceased was not
justifiable, since not all the elements for justification are present. He should
therefore be held responsible for the death of his victims, but he could be
credited with the special mitigating circumstance of incomplete defense,
pursuant to paragraph 6, Article 13 of the Revised Penal Code.
NOTE: The nature of the aggression must be illicit or
unlawful. The right to self-help is not available against the exercise
of right by another, such as when the latter executes an extra-
judicial abatement of nuisance. Neither can it be used against the
lawful exercise of the functions of a public official, such as a
sheriff attaching property.
Article 430. Every owner may enclose or fence his land or
tenements by means of walls, ditches, live or dead hedges, or by any
other means without detriment to servitudes constituted thereon.
Corollary to the right to exclude others from the
enjoyment of his property, the owner of a parcel of land or
tenement has the right to enclose or fence the same by whatever
means. In so doing, the owner is effectively giving notice to
everybody that they are not welcome in his property without his
consent and he may, therefore, validly consider any unauthorized
intrusion into his property as an act of unlawful aggression which
will authorize him to resort to self-help.
Page 11 of 25
A person has a right to the natural use and enjoyment of
his own property, according to his pleasure, for all the purposes to
which such property is usually applied.  As a general rule,
therefore, there is no cause of action for acts done by one person
upon his own property in a lawful and proper manner, although
such acts incidentally cause damage or an unavoidable loss to
another, as such damage or loss is damnum absque injuria. When
the owner of property makes use thereof in the general and
ordinary manner in which the property is used, such as fencing or
enclosing the same as in this case, nobody can complain of having
been injured, because the inconvenience arising from said use can
be considered as a mere consequence of community life [Sps.
Custodio v. Court of Appeals].
However, it is required that the right to enclose or fence
must be legitimately exercised and must not be attended with bad
faith. Thus, if the lot owner fenced his property for the purpose of
evicting its occupant whose lease contract had already expired, the
lot owner is liable to said occupant for damages. In such a case,
what the lot owner should do is to resort to the proper legal
processes for the purpose of obtaining recovery of possession
pursuant to the provisions of Article 536 of the Civil Code
[Villafuerte v. Court of Appeals].
Sps. Custodio v. Court of Appeals
Held: The act of petitioners in constructing a fence within their
lot is a valid exercise of their right as owners, hence not contrary to morals,
good customs or public policy. The law recognizes in the owner the right to
enjoy and dispose of a thing, without other limitations than those
established by law. It is within the right of petitioners, as owners, to enclose
and fence their property. Article 430 of the Civil Code provides that
"(e)very owner may enclose or fence his land or tenements by means of
walls, ditches, live or dead hedges, or by any other means without detriment
to servitudes constituted thereon."
At the time of the construction of the fence, the lot was not
subject to any servitudes. There was no easement of way existing in favor
of private respondents, either by law or by contract. The fact that private
respondents had no existing right over the said passageway is confirmed by
the very decision of the trial court granting a compulsory right of way in
their favor after payment of just compensation. It was only that decision
which gave private respondents the right to use the said passageway after
payment of the compensation and imposed a corresponding duty on
petitioners not to interfere in the exercise of said right.
Hence, prior to said decision, petitioners had an absolute right
over their property and their act of fencing and enclosing the same was an
act which they may lawfully perform in the employment and exercise of
said right.  To repeat, whatever injury or damage may have been sustained
by private respondents by reason of the rightful use of the said land by
petitioners is damnum absque injuria.
The right to enclose or fence in Article 430 is also
subject to the limitation that it should not work detriment to the
servitudes constituted therein
The concept of servitude or easement is discussed in
Title VII of this Book. Easement or servitude is defined as a real
right constituted in another person’s property, corporeal and
immovable, by virtue of which the owner of the same has to
abstain from doing or to allow somebody else to do something in
his property for the benefit of another thing or person.68 An
example of this is easement of drainage of waters embodied in
Article 637 of the New Civil Code, which reads:
“Art. 637. Lower estates are obliged to receive the
waters which naturally and without the intervention of man
descend from the higher estates, as well as the stones or earth
which they carry with them.
 The owner of the lower estate cannot construct works
which will impede this easement; neither can the owner of the
higher estate make works which will increase the burden. (552)”
Pursuant to such kind of easement or servitude, the
owner of the lower tenement cannot block or impede the servitude
and the owner of the higher tenement cannot construct works to
increase the burden of the servitude. Clearly, the existence of this
kind of servitude works as a limitation upon the right of the owner
of the lower tenement to enclose his property with walls or other
means if the same will prevent the passage of the water which
naturally falls from the higher tenement.
Heirs of Limense v. De Ramos
Held: Although the owner of the property has the right to
enclose or fence his property, he must respect servitudes constituted
thereon. The question now is whether respondents are entitled to an
easement of right of way.
Every buyer of a registered land who takes a certificate of title
for value and in good faith shall hold the same free of all encumbrances
except those noted on said certificate. It has been held, however, that
"where the party has knowledge of a prior existing interest that was
unregistered at the time he acquired a right to the same land, his knowledge
of that prior unregistered interest has the effect of registration as to him."
In the case at bar, Lot No. 12-C has been used as an alley ever
since it was donated by Dalmacio Lozada to his heirs. It is undisputed that
prior to and after the registration of TCT No. 96886, Lot No. 12-C has
served as a right of way in favor of respondents and the public in general.
We quote from the RTC's decision:
x x x It cannot be denied that there is an alley which shows its
existence. It is admitted that this alley was established by the original owner
of Lot 12 and that in dividing his property the alley established by him
continued to be used actively and passively as such. Even when the division
of the property occurred, the non-existence of the easement was not
expressed in the corresponding titles nor were the apparent sign of the alley
made to disappear before the issuance of said titles.
The Court also finds that when plaintiff acquired the lot (12-C)
which forms the alley, he knew that said lot could serve no other purpose
than as an alley. That is why even after he acquired it in 1969 the lot
continued to be used by defendants and occupants of the other adjoining
lots as an alley. x x x
Thus, petitioners are bound by the easement of right of way over
Lot No. 12-C, even though no registration of the servitude has been made
on TCT No. 96886.
Article 431. The owner of a thing cannot make use thereof in
such manner as to injure the rights of a third person.
Ownership is not an absolute right. Like all other social
and conventional rights, rights arising from ownership are subject
to such reasonable limitations in their enjoyment as shall prevent
them from being injurious, and to such reasonable restraints and
regulations, established by law, as the legislature, under the
governing and controlling power vested in them by the
constitution, may think necessary and expedient.
Article 432. The owner of a thing has no right to prohibit the
interference of another with the same, if the interference is necessary to
avert an imminent danger and the threatened damage, compared to the
damage arising to the owner from the interference, is much greater.
The owner may demand from the person benefited indemnity for the
damage to him.
Doctrine of Acts in a State of Necessity
Under the provisions of Article 432 of the New Civil
Code of the Philippines, the interference by a third person with
Page 12 of 25
another’s property is justified and cannot be prevented by the latter
if such interference is necessary to avert an imminent danger and
the threatened damage, compared to the damage arising to the
owner from the interference, is much greater. An example of the
application of the principle of state of necessity is when a fi re is
threatening to spread and destroy other houses and properties and
the destruction of some houses will avert the spread of the fire,
such destruction is justified and will not be considered as unlawful
physical invasion upon another’s property.
Under the Revised Penal Code, the state of necessity is
considered a justifying circumstance. Any person who, in order to
avoid an evil or injury, does an act which causes damage to another
does not incur criminal liability provided that the following
requisites are present: (a) that the evil sought to be avoided actually
exists; (b) that the injury feared be greater than that done to avoid
it; (c) that there be no other practical and less harmful means of
preventing it; (d) the means used are necessary and indispensable
to avert danger.
Doctrine of Self-help vs. State of Necessity
The doctrine of self-help is invoked by the owner or
lawful possessor in protection of his right to prevent other persons
from interfering with the property. The state of necessity, on the
other hand, is availed of by another person against someone else’s
property for the purpose of averting an imminent danger to himself
or to another person or to their property.
Rabuya notes that it is not possible for the application of
both doctrines to result in conflict of rights. If the application of
one doctrine is proper, it necessarily follows that the application of
the other doctrine is not proper. If, for example, all the requisites
for the application of the doctrine of state of necessity are present,
the owner cannot rightfully invoke the doctrine of self-help to
defeat the application of the former. If the application of the
doctrine of state of necessity is proper, the same is justifi ed under
the provisions of Article 432 of the New Civil Code and it is, in
fact, considered a justifying circumstance under Article 11, fourth
paragraph, of the Revised Penal Code. Such being the case, the
interference made is not considered as an “unlawful physical
invasion or usurpation” of another’s property, which is a requisite
for the proper application of the doctrine of self-help under Article
429 of the New Civil Code.
Indemnity For Damages
While interference to one’s property pursuant to a state
of necessity is justified and does not constitute unlawful
aggression, the persons benefited by such interference are duty
bound to indemnify the owner for the damage suffered by the
latter.
Article 433. Actual possession under claim of ownership
raises a disputable presumption of ownership. The true owner must
resort to judicial process for the recovery of the property.
Disputable Presumption of Ownership
Two requirements to raise a disputable (rebuttable)
presumption of ownership
(a) actual possession; and
(b) claim of ownership.
Since actual possession under claim of ownership raises a
disputable presumption of ownership, such possession must be
respected until it is shown that another person has a better right
over the property.
The true owner has to resort to judicial process to recover
his property, only if the possessor does not want to surrender the
property to him, after proper request or demand has been made.
Judicial process must then be had to prevent disturbances of the
peace [Supia v. Quintero].
Article 434. In an action to recover, the property must be
identified, and the plaintiff must rely on the strength of his title and not
on the weakness of the defendant’s claim.
The established legal principle in actions for annulment
or reconveyance of title is that a party seeking it should establish
not merely by a preponderance of evidence but by clear and
convincing evidence that the land sought to be reconveyed is his.
Article 434 of the Civil Code provides that to successfully maintain
an action to recover the ownership of a real property, the person
who claims a better right to it must prove two (2) things: first, the
identity of the land claimed, and; second, his title thereto. In an
action to recover, the property must be identified, and the plaintiff
must rely on the strength of his title and not on the weakness of the
defendant's claim [VSD Realty v. Uniwide Sales].
First Requisite
The boundaries of the land sought must be proved, so
that if a person fails to specify which portion of a parcel of land is
the portion he is supposed to have inherited, his action to recover
the property will necessarily fail [Santiago v. Santos].
Second Requisite
If the claims of both plaintiff and defendant are weak,
judgment must be for the defendant, for the latter, being in
possession, is presumed to be the owner, and cannot be obliged to
show or prove a better title [Santos v. Espinosa].
Among the evidence which may be presented by plaintiff
to show ownership are the following:
(a) Torrens certificate [Reyes v. Borbon]
(b) Titles granted by the Spanish Government, like those
effected by royal cedula [Guido v. De Borja].
(c) Long and actual possession [Nolan v. Jalandoni]
(d) Occupation of a building for a long time without
paying rentals therefor [Gatdula v. Santos].
(e) Testimony of adverse and exclusive possession of
ownership corroborated by tax declaration of properties, payment
of taxes, and deeds of mortgage (but not the mere fact of working
over the land without expressing the concept in which the land was
being worked) [Consorcia Alano, et al. v. Carmen Ignacio].
Article 435. No person shall be deprived of his property
except by competent authority and for public use and always upon
payment of just compensation.
Should this requirement be not first complied with, the
courts shall protect and, in a proper case, restore the owner in his
possession.
Eminent domain, or the superior right of the State to own
certain properties under certain conditions, is a limitation on the
right of ownership, and may be exercised even over private
properties of cities and municipalities, and even over lands
registered with a Torrens title.
Requisites for exercise:
Page 13 of 25
1. Necessity
2. Private Property
3. Taking
4. Public use
5. Just compensation
6. Due process
Concept of Taking
It may include trespass without actual eviction of the
owner, material impairment of the value of the property or
prevention of the ordinary uses for which the property was
intended. In Ayala de Roxas v. City of Manila, the imposition of an
easement of a 3-meter strip on the plaintiff’s property was
considered taking. In People v. Fajardo, a municipal ordinance
prohibiting a building which would impair the view of the plaza
from the highway was likewise considered taking. In these cases, it
was held that the property owner was entitled to payment of just
compensation
The landmark case of Republic v. Vda. De
Castellvi provides an enlightening discourse on the requisites of
taking:
First, The expropriator must enter a private
property; Second, the entrance into private property must be for
more than a momentary period; Third, the entry into the
property should be under warrant or color of legal
authority; Fourth, the property must be devoted to a public use
or otherwise informally appropriated or injuriously affected;
and Fifth, the utilization of the property for public use must be
in such a way as to oust the owner and deprive him of all
beneficial enjoyment of the property.
Just compensation
The full and fair equivalent of the property taken; it is the
fair market value of the property. It is settled that the market value
of the property is “that sum of money which a person, desirous but
not compelled to buy, and an owner, willing but not compelled to
sell, would agree on as a price to be given and received therefor”.
Just compensation means not only the correct amount to be paid to
the owner of the land but also payment within a reasonable time
from its taking [Eslaban v. De Onorio].
The purpose of just compensation is not to reward the
owner for the property taken, but to compensate him for the loss
thereof. As such, the true measure of the property, as upheld in a
plethora of cases, is the market value at the time of the taking,
when the loss resulted.
To determine just compensation, the trial court should
first ascertain the market value of the property, to which should be
added the consequential damages after deducting therefrom the
consequential benefits which may arise from the expropriation. If
the consequential benefits exceed the consequential damages, these
items should be disregarded altogether as the basic value of the
property should be paid in every case [Republic v. BPI].
When private land is expropriated for a particular
public use, and that particular public use is abandoned, does the
land so expropriated return to its former owner?
The answer to that question depends upon the character
of the title acquired by the expropriator, whether it be the State, a
province, a municipality, or a corporation which has the right to
acquire property under the power of eminent domain. If, for
example, land is expropriated for a particular purpose, with the
condition that when that purpose is ended or abandoned the
property shall return to its former owner, then, of course, when the
purpose is terminated or abandoned the former owner reacquires
the property so expropriated. If, for example, land is expropriated
for a public street and the expropriation is granted upon condition
that the city can only use it for a public street, then, of course,
when the city abandons its use as a public street, it returns to the
former owner, unless there is some statutory provisions to the
contrary. Many other similar examples might be given. If, upon the
contrary, however, the decree of expropriation gives to the entity a
fee simple title, then, the of course, the land becomes the absolute
property of the expropriator, whether it be the State, a province, or
municipality, and in that case the non-user does not have the effect
of defeating the title acquired by the expropriation proceedings
[Fery v. Municipality of Cabanatuan].
Article 436. When any property is condemned or seized by
competent authority in the interest of health, safety or security, the
owner thereof shall not be entitled to compensation unless he can show
that such condemnation or seizure is unjustified.
This article is based on police power, which in turn is
based on the maxim that “the welfare of the people is the supreme
law of the land.’’ Unlike eminent domain which requires the giving
of just compensation, police power needs no giving of a financial
return before it can be exercised. This is therefore one instance
when property may be seized or condemned by the government
without any financial compensation.
Police power can refer not merely to condemnation and
seizure, but also to total destruction itself, provided that (a) the
public interest is served and (b) the means used are not unduly
harsh, abusive, or oppressive [U.S. v. Toribio].
Thus, nuisances can be abated; and rotting canned goods
may be destroyed. If the condemnation, seizure, or destruction is
unjustified, the owner is entitled to compensation.
Article 437. The owner of a parcel of land is the owner of its
surface and of everything under it, and he can construct thereon any
works or make any plantations and excavations which he may deem
proper, without detriment to servitudes and subject to special laws and
ordinances. He cannot complain of the reasonable requirements of
aerial navigation.
It is a well-known principle that the owner of piece of
land has rights not only to its surface but also to everything
underneath and the airspace above it up to a reasonable height
[Republic v. Court of Appeals]. This article deals with the extent of
ownership which a person has over a parcel of land — more
specifically, with what is commonly referred to as “surface right.’’
Thus, if a person owns a piece of land, it is understood that he also
owns its surface, up to the boundaries of the land, with the right to
make thereon allowable constructions, plantings, and excavations,
subject to:
(a) servitudes or easements
(b) special laws — like the Mining Law
(c) ordinances
(d) the reasonable requirements of aerial navigation
(e) principles on human relations (justice, honesty, good
faith) and the prevention of injury to the rights of third persons.
Presumably, the landowners' right extends to such height
or depth where it is possible for them to obtain some benefit or
enjoyment, and it is extinguished beyond such limit as there would
Page 14 of 25
be no more interest protected by law [Republic v. Court of
Appeals].
Article 438. Hidden treasures belong to the owner of the
land, building, or other property on which it is found.
Nevertheless, when the discovery is made on the property of
another, or of the State or any of its subdivisions, and by chance, one-
half thereof shall be allowed to the finder. If the finder is a trespasser,
he shall not be entitled to any shares of the treasure.
If the things found be of interest to science or the arts, the
State may acquire them at their just price, which shall be divided in
conformity with the rule stated.
Since the owner of the land is likewise the owner of its
sub-surface or sub-soil, any “hidden treasure” on the sub-surface
also belongs to him. The same rule applies if the “hidden treasure”
is located on a building or other property — the same belong to the
owner of the building or other property on which it is found.
However, when the discovery is made by a stranger who is not a
trespasser and the discovery is by chance, the finder is entitled to
one-half of the treasure. If the finder is a trespasser, he shall not be
entitled to any share of the treasure.
Article 439. By treasure is understood, for legal purposes,
any hidden and unknown deposit of money, jewelry, or other precious
objects, the lawful ownership of which does not appear.
Requisites in the Definition of Hidden Treasure (a)
Hidden and unknown deposit (such that finding it would indeed be
a discovery). (b) Consists of money, jewelry or other precious
objects. (c) Their lawful ownership does not appear.
Under the ejusdem generis rule, the term “other precious
objects” should be understood as being similar to money or
jewelry. Hence, the concept does not include natural wealth, i.e.,
minerals and petroleum. The Regalian doctrine reserves to the State
all natural wealth that may be found in the bowels of the earth even
if the land where the discovery is made be private. As such, the
right of the owner of the land with respect to the sub-surface or
subsoil is subject to the application of the Regalian doctrine
[Republic v. Court of Appeals].
Kinds of Accession
Based from the provisions of Article 440, accession is
classified into two:
(1) accesion discreta; and
(2) accesion continua.
The first part of the article defines the concept of
accesion discreta or the right of the owner to anything which is
produced by his property. The second part of the article, on the
other hand, defines the concept of accesion continua or the right of
the owner to anything which is incorporated or attached to his
property, whether such attachment is through natural or artificial
causes.
Accesion discreta is subdivided into: (1) natural fruits,
(2) industrial fruits, and (3) civil fruits. Accesion continua, in turn,
may refer to either immovable property or movable property.
With regard to immovable property, accesion continua is
classified into either industrial accession or natural accession
depending on the manner by which the attachment or incorporation
takes place. In industrial accession, the incorporation takes place
artificially; while natural accession takes place through natural
means. Industrial accession, in turn, may take the form of either
building, planting or sowing. Natural accession, on the other hand,
has four forms: (1) alluvion, (2) avulsion; (3) change of course of
river; and (4) formation of islands.
With respect to movable property, accesion continua
may either be: (1) adjunction or conjunction, (2) commixtion or
confusion, and (3) specification. Adjunction or conjunction, in turn,
may take place by: (1) inclusion (engraftment), (2) soldadura
(attachment); (3) tejido (weaving); (4) pintura (painting); or (5)
escritura (writing).
Chapter 2
RIGHTS OF ACCESSION
GENERAL PROVISIONS
Article 440. The ownership of property gives the right by
accession to everything which is produced thereby, or which is
incorporated or attached thereto, either naturally or artificially.
The ownership of property gives the right by accession to
everything which is produced thereby, or which is incorporated or
attached thereto, either naturally or artificially. Accession,
therefore, is the right of an owner of a thing to the products of said
thing as well as to whatever is inseparably attached thereto as an
accessory.
It will be noted that accession is not one of those listed
therein. It is therefore safe to conclude that accession is not a mode
of acquiring ownership. The reason is simple: accession
presupposes a previously existing ownership by the owner over the
principal. This is not necessarily so in the other modes of acquiring
ownership. Therefore, fundamentally and in the last analysis,
accession is a right implicitly included in ownership, without which
it will have no basis or existence. Truly, it is one of the attributes or
characteristics which will make up the concept of dominion or
ownership. (Manresa, 6th Ed., Vol. 3, p. 116; 180-182).
Section 1. – Right of Accession With Respect to What
is Produced by Property (Accession Discreta)
Article 441. To the owner belongs:
(1) The natural fruits;
(2) The industrial fruits;
(3) The civil fruits.
Article 442. Natural fruits are the spontaneous products of
the soil, and the young and other products of animals.
Industrial fruits are those produced by lands of any kind
through cultivation or labor.
Civil fruits are the rents of buildings, the price of leases of
lands and other property and the amount of perpetual or life annuities
or other similar income.
This Article refers to accession discreta which is defined
as the right to the ownership of fruits produced by our property.
The rule in Article 441 is not absolute inasmuch as there
are cases where the owner is not entitled to the fruits of his
property. The exceptions to the rule are the following:
(a) in usufruct
(b) in lease of rural lands
(c) in antichresis
(d) in possession in good faith
(e) fruits naturally falling
Natural Fruits
Page 15 of 25
There are two kinds of natural fruits, namely: (a) the
spontaneous products of the soil — those that appear without the
intervention of human labor, such as the wild fruits in the forest,
herbs, and common grass; and (b) the young and other products of
animals, such as milk, hair, wool, horn, hide, eggs, and animals
dung or manure.
With respect to the natural fruit of the first kind, it is
required that the same must be spontaneous product of the soil. In
other words, it is necessary that there must be no human labor
which has intervened in its generation. If human labor intervenes in
the production of the fruit, the same is classifi ed as an industrial
fruit.
Industrial Fruits
Industrial fruits are those produced by lands of any kind
through cultivation or labor. Hence, for a fruit to be classifi ed as
an industrial fruit, it must satisfy two requirements: (1) it is
produced by the land; and (2) it is produced through cultivation or
labor. Both the natural fruits of the first kind and industrial fruits
are products of the land. They differ, however, in the manner of
their coming into existence. The former is produced naturally and
spontaneously by the soil; while the latter is produced through
cultivation or through human labor. Examples of industrial fruits
are the coffee beans in a coffee plantation; mango fruits in a mango
plantation; palay, corn or sugar cane produced by farmers.
Civil Fruits
Civil fruits are the income or revenues derived from the
property itself. Hence, a dividend, whether in the form of cash or
stock, is considered as civil fruit because it is declared out of the
profi ts of a corporation and not out of the capital stock. But a
bonus which is paid to the owner of a piece of land for undertaking
the risk of securing with his property a loan given to a sugar central
is not civil fruits of the mortgaged property since it is not income
derived from the property itself but a compensation for the risk
assumed by the owner [Bachrach Motors v. Talisay-Silay Milling].
Article 443. He who receives the fruits has the obligation to
pay the expenses made by a third person in their production, gathering
and preservation.
Article 443 of the New Civil Code contemplates a
situation where the recipient of the fruits was not the same person
who incurred the expenses in connection with its production,
gathering and preservation.
However, Article 443 does not apply when the planter is
in good faith, because in this case, he is entitled to the fruits
already received, hence, there is no necessity of reimbursing him
[Article 544].
Article 443 applies only when the fruits are already
harvested and gathered since the article refers to persons “who
receives the fruits.” Hence, the article does not apply to a situation
where the fruits are still pending. At the same time, the article
refers to a recipient who did not incur the expenses for the
production, gathering and preservation of the fruits. This may
happen only if the property was previously in the possession of a
possessor bad in faith but not if the possessor was in good faith.
Under the Civil Code, a possessor in good faith is
entitled to the fruits received by him before his possession is
legally interrupted. Hence, he cannot be compelled by the owner to
return whatever fruits he received prior to the interruption of his
good faith. On the other hand, the possessor in bad faith is required
to reimburse to the legitimate possessor the fruits received by him
and those which the legitimate possessor could have received. Such
being the case, the provisions of Article 443 finds application in a
case where the true owner recovers possession of the property from
a possessor in bad faith who is required by law to return to the
owner not only the fruits he already received but also the fruits
which the owner could have received. This is confirmed by the
provisions of Article 549 of the New Civil Code which states that
while the possessor in bad faith is obligated to reimburse the fruits
received by him and those which the legitimate possessor could
have received, he is, at the same time, entitled to recover the
expenses mentioned in Article 443.
Torbelo v. Sps. Rosario
Held: The accessory follows the principal.  The right of
accession is recognized under Article 440 of the Civil Code which states
that “[t]he ownership of property gives the right by accession to everything
which is produced thereby, or which is incorporated or attached thereto,
either naturally or artificially.”
There is no question that Dr. Rosario is the builder of the
improvements on Lot No. 356-A.  The Torbela siblings themselves alleged
that they allowed Dr. Rosario to register Lot No. 356-A in his name so he
could obtain a loan from DBP, using said parcel of land as security; and
with the proceeds of the loan, Dr. Rosario had a building constructed on Lot
No. 356-A, initially used as a hospital, and then later for other commercial
purposes.  Dr. Rosario supervised the construction of the building, which
began in 1965; fully liquidated the loan from DBP; and maintained and
administered the building, as well as collected the rental income therefrom,
until the Torbela siblings instituted Civil Case No. U-4359 before the RTC
on February 13, 1986.
When it comes to the improvements on Lot No. 356-A, both the
Torbela siblings (as landowners) and Dr. Rosario (as builder) are deemed in
bad faith.  The Torbela siblings were aware of the construction of a building
by Dr. Rosario on Lot No. 356-A, while Dr. Rosario proceeded with the
said construction despite his knowledge that Lot No. 356-A belonged to the
Torbela siblings.  This is the case contemplated under Article 453 of the
Civil Code, which reads:
ART. 453.  If there was bad faith, not only on the part of the
person who built, planted or sowed on the land of another, but also on the
part of the owner of such land, the rights of one and the other shall be the
same as though both had acted in good faith.
It is understood that there is bad faith on the part of the
landowner whenever the act was done with his knowledge and without
opposition on his part.  crop or harvest; whereas in planting, more or less permanent trunks
Characteristic of the Expenses Referred to in Article
443
(a) They must have been used for production, gathering,
or preservation, not for the improvement of the property.
(b) They must have been necessary, and not luxurious or
excessive. Indeed, they must be commensurate with those
ordinarily necessitated by the product. (See 3 Manresa 187-188).
Article 444. Only such as are manifest or born are
considered as natural or industrial fruits.
With respect to animals, it is sufficient that they are in the
womb of the mother, although unborn.
Two Kinds of Crops (Annual and Perennial)
Annual crops (like cereals, grains, rice, corn, sugar) are
deemed manifest (existing) the moment their seedlings appear from
the ground, although the grains have not yet actually appeared.
Perennial crops (like oranges, apples, mangoes, and coconuts) are
deemed to exist only when they actually appear on the trees. (See 2
Manresa, p. 190; see also Walsh, Law of Property, pp. 14-15).
Page 16 of 25
Animals
The young of animals are already considered existing
even if still in the maternal womb. (Art. 444, par. 2).
Section 2. – Right of Accession With Respect to
Immovable Property (VIPs)
Article 445. Whatever is built, planted or sown on the land
of another and the improvements or repairs made thereon, belong to
the owner of the land, subject to the provisions of the following articles.
Article 445 deals with accession continua; more
specifically with accession industrial. (BUILDING, PLANTING,
SOWING). As defined, accesion continua is the right of the owner
to anything which is incorporated or attached to his property,
whether the attachment is by reason of natural or artificial causes.
In Bernardo v. Bataclan, the Supreme Court held:
The Civil Code confirms certain time-honored
principles of the law of property. One of these is the principle of
accession whereby the owner of property acquires not only that
which it produces but that which is united to it either naturally
or artificially. Whatever is built, planted or sown on the land of
another, and the improvements or repairs made thereon, belong
to the owner of the land. Where, however, the planter, builder,
of sower has acted in good faith, a conflict of rights arises
between the owners and it becomes necessary to protect the
owner of the improvements without causing injustice to the
owner of the land. In view of the impracticability of creating
what Manresa calls a state of "forced coownership" (vol. 3, 4th
ed., p. 213), the law has provided a just and equitable solution
by giving the owner of the land the option to acquire the
improvements after payment of the proper indemnity or to
oblige the builder or planter to pay for the land and the sower to
pay the proper rent (art 361). It is the owner of the land who is
allowed to exercise the option because his right is older and
because, by the principle of accession, he is entitled to the
ownership of the accessory thing (3 Manresa, 4th ed., p. 213).
NOTE: The difference between sowing and planting is
that in the former, each deposit of seed gives rise merely to a single
or trees are produced, which in turn produce fruits themselves. In
the latter case therefore, without a replanting, crops will continue to
grow every season.
Basic Principles of Accession Continua (Accession
Industrial)
(a) To the owner of the principal (the land for example)
must belong also the accessions, in accordance with the principle
that “the accessory follows the principal’’ (“accesio cedit
principali’’).
(b) The union or incorporation must, with certain
exceptions, be effected in such a manner that to separate the
principal from the accessory would result in substantial injury to
either.
(c) He who is in good faith may be held responsible but
he should not be penalized.
(d) He who is in bad faith may be penalized.
(e) No one should enrich himself unjustly at the expense
of another.
(f) Bad faith of one party neutralizes the bad faith of the
other so both should be considered in good faith.

Article 446. All works, sowing, and planting are presumed
by the owner and at his expense, unless the contrary is proved.
The two disputable presumptions under this Article are:
(a) The works, sowing, and planting were
made by the owner.
(b) They were made at the owner’s expense
Article 447. The owner of the land who makes thereon,
personally or through another, plantings, constructions, or works with
the materials of another, shall pay for their value; and, if he acted in
bad faith, he shall also be obliged to the reparation of damages. The
owner of the materials shall have the right to remove them only in case
he can do so without injury to the work constructed, or without the
plantings, constructions or works being destroyed. However, if the
landowner acted in bad faith, the owner of the materials may remove
them in any event, with a right to be indemnified for damages.
Rights and Obligations of the Owner of the Land
Who Uses the Materials of Another
(a) If the landowner acted in good faith — He becomes
the owner of the materials but he must pay for their value. The only
exception is when they can be removed without destruction to the
work made or to the plants. In such a case, the owner of the
materials can remove them.
(b) If the landowner is in bad faith — He becomes the
owner of the materials but he must pay: 1) their value; 2) and
damages.
EXCEPT when the owner of the materials decides to
remove them whether or not destruction would be caused. (In this
case, the materials would still belong to the owner of said
materials, who in addition will still be entitled to damages).
Pacific Farms v. Esguerra
Held: Indeed, because we assumed that the appellee was in good
faith, we did not pronounce it liable for the reparation of damages but only
for the payment of the unpaid price of the lumber and construction
materials due to the appellant as unpaid furnisher thereof. Based on this
same assumption, we likewise held that the appellant has no right to remove
the materials but only to recover the value of the unpaid lumber and
construction materials. Thus, since the appellee benefited from the
accession, i.e., from the lumber and materials that went into the
construction of the six buildings, it should shoulder the compensation due
to the appellant as unpaid furnisher of materials, pursuant to the rule we
cited in our decision that compensation should be borne by the person who
has been benefited by the accession.
Rights and Obligations of the Owner of the Materials
(a) If the landowner acted in good faith — 1) The owner
of the materials is entitled to reimbursement (provided he does not
remove them). 2) He is entitled to removal (provided no substantial
injury is caused).
(b) If the landowner acted in bad faith — 1) The owner
of the materials is entitled to the ABSOLUTE right of removal and
damages (whether or not substantial injury is caused). 2) He is
entitled to reimbursement and damages (in case he chooses not to
remove).
Rule When Both Parties are in Bad Faith
Regarding Article 447, what rule should apply if the
landowner and the owner of the materials are both in bad faith?
Consider them in good faith.
Page 17 of 25
NOTE: The landowner himself makes the plantings,
constructs or works with the materials of another. In Article 448,
somebody else other than the landowner plants, constructs, or
works. There is no-ownership. The owner of the materials is not a
co-owner; he is only entitled to recover the value of the materials.
Pacific Farms v. Esguerra – in case of alienation, the
new owner of the land is liable because he has been benefited by
the improvements.
Article 448. The owner of the land on which anything has
been built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after payment of
the indemnity provided for in articles 546 and 548 or to oblige the one
who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that of the
building or trees. In such case he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the building or trees
after proper indemnity. The parties shall agree upon the terms of the
lease and in case of disagreement, the court shall fix the terms thereof.
In this situation, there are actually two persons involved:
(1) the landowner; and (2) the builder, planter or sower (who is at
the same time the owner of the materials). In determining the legal
effects of this situation, it is necessary to take into consideration the
good faith or bad faith of both parties. The owner of the land does
not ipso facto become the owner of what had been planted on his
land by another. Firstly, we have to determine whether the planter
was in good faith or bad faith. Secondly, assuming that the planter
was in good faith, the landowner, should he desire to get the crops,
must first give the proper indemnification to the planter [Inter-
Regional Development Corp. v. Court of Appeals].
Pecson v. Court of Appeals
Held: Article 448 does not apply to a case where the owner of
the land is the builder, sower, or planter who then later loses ownership of
the land by sale or donation.  This Court said so in Coleongco vs. Regalado:
Article 361 of the old Civil Code is not applicable in this case,
for Regalado constructed the house on his own land before he sold said land
to Coleongco.  Article 361 applies only in cases where a person constructs a
building on the land of another in good or in bad faith, as the case may be. 
It does not apply to a case where a person constructs a building on his own
land, for then there can be no question as to good or bad faith on the part of
the builder.
Elsewise stated, where the true owner himself is the builder of
works on his own land, the issue of good faith or bad faith is entirely
irrelevant.
Thus in strict point of law, Article 448 is not apposite to the case
at bar.  Nevertheless, we believe that the provision therein on indemnity
may be applied by analogy considering that the primary intent of Article
448 is to avoid a state of forced co-ownership and that the parties, including
the two courts below, in the main agree that Articles 448 and 546 of the
Civil Code are applicable and indemnity for the improvements may be paid
although they differ as to the basis of the indemnity.
Good Faith
Clearly, Article 448 applies only when the builder,
planter or sower believes he has the right to so build, plant or sow
because he thinks he owns the land or believes himself to have a
claim of title [Morales v. Court of Appeals].
Good faith, here understood, is an intangible and abstract
quality with no technical meaning or statutory definition, and it
encompasses, among other things, an honest belief, the absence of
malice and the absence of design to defraud or to seek an
unconscionable advantage. An individual's personal good faith is a
concept of his own mind and, therefore, may not conclusively be
determined by his protestations alone. It implies honesty of
intention, and freedom from knowledge of circumstances which
ought to put the holder upon inquiry. The essence of good faith lies
in an honest belief in the validity of one's right, ignorance of a
superior claim, and absence of intention to overreach another.
Applied to possession, one is considered in good faith if he is not
aware that there exists in his title or mode of acquisition any flaw
which invalidates it [Arangote v. Sps. Maglunob]. The good faith
ceases from the moment defects in the title are made known to the
possessor, by extraneous evidence or by suit for recovery of the
property by the true owner [Technogas v. Court of Appeals].
Pleasantville Dev’t Corp. v. Court of Appeals
Held: Good faith consists in the belief of the builder that the
land he is building on is his and his ignorance of any defect or flaw in his
title. And as good faith is presumed, petitioner has the burden of proving
bad faith on the part of Kee.
At the time he built improvements on Lot 8, Kee believed that
said lot was what he bought from petitioner. He was not aware that the lot
delivered to him was not Lot 8. Thus, Kee’s good faith. Petitioner failed to
prove otherwise.
Is bad faith imputed to a registered owner of a land
when his improvements encroach upon a neighbor’s land?
There is nothing in case law which would suggest,
however remotely, that bad faith is imputable to a registered owner
of land when a part of his building encroaches upon a neighbor’s
land, simply because he is supposedly presumed to know the
boundaries of his land as described in his certificate of title. No
such doctrinal statement could have been made in those cases
because such issue was not before the Supreme Court. Quite the
contrary, we have rejected such a theory in Co Tao vs.
Chico, where we held that unless one is versed in the science of
surveying, “no one can determine the precise extent or location of
his property by merely examining his paper title” [Technogas v.
Court of Appeals].
Applicable only to cases which the builders, sowers or
planters believe themselves to be owners of the land
Jurisprudence is replete with cases which categorically
declare that Article 448 covers only cases in which the builders,
sowers or planters believe themselves to be owners of the land or,
at least, have a claim of title thereto, but not when the interest is
merely that of a holder, such as a mere tenant, agent or
usufructuary. A tenant cannot be said to be a builder in good faith
as he has no pretension to be owner. In a plethora of cases, this
Court has held that Articles 448 of the Civil Code, in relation to
Article 546 of the same Code, which allows full reimbursement of
useful improvements and retention of the premises until
reimbursement is made, applies only to a possessor in good faith,
i.e., one who builds on land with the belief that he is the owner
thereof. It does not apply where one's only interest is that of a
lessee under a rental contract; otherwise, it would always be in the
power of the tenant to "improve" his landlord out of his property
[Parilla v. Pilar].
Sulo sa Nayon v. Nayong Pilipino
Held: In the case at bar, petitioners have no adverse claim or
title to the land. In fact, as lessees, they recognize that the respondent is the
owner of the land. What petitioners insist is that because of the
improvements, which are of substantial value, that they have introduced on
the leased premises with the permission of respondent, they should be
Page 18 of 25
considered builders in good faith who have the right to retain possession of
the property until reimbursement by respondent.
We affirm the ruling of the CA that introduction of valuable
improvements on the leased premises does not give the petitioners the right
of retention and reimbursement which rightfully belongs to a builder in
good faith. Otherwise, such a situation would allow the lessee to easily
"improve" the lessor out of its property. We reiterate the doctrine that a
lessee is neither a builder in good faith nor in bad faith that would call for
the application of Articles 448 and 546 of the Civil Code
Exception
However, in some special cases, the Supreme Court has
used Article 448 by recognizing good faith beyond this limited
definition.  Thus, in Del Campo v. Abesia, this provision was
applied to one whose house – despite having been built at the time
he was still co-owner – overlapped with the land of another.  This
article was also applied to cases wherein a builder had constructed
improvements with the consent of the owner.  The Court ruled that
the law deemed the builder to be in good faith.  In Sarmiento v.
Agana, the builders were found to be in good faith despite their
reliance on the consent of another, whom they had mistakenly
believed to be the owner of the land.
The Supreme Court likewise applied Article 448
in Spouses Macasaet v. Spouses Macasaet  notwithstanding the fact
that the builders therein knew they were not the owners of the
land.  In said case, the parents who owned the land allowed their
son and his wife to build their residence and business thereon.  As
found by this Court, their occupation was not by mere tolerance but
“upon the invitation of and with the complete approval of (their
parents), who desired that their children would occupy the
premises.  It arose from familial love and a desire for family
solidarity x x x.”  Soon after, conflict between the parties arose. 
The parents demanded their son and his wife to vacate the
premises.  The Court thus ruled that as owners of the property, the
parents have the right to possession over it.  However, they must
reimburse their son and his wife for the improvements they had
introduced on the property because they were considered builders
in good faith even if they knew for a fact that they did not own the
property.
The choice or option belongs to the owner of the land
It is the owner of the land who has the choice or option,
not the builder. Hence, the builder cannot compel the owner of the
land to sell such land to him. Thus, the right of the builder in good
faith is the right to reimbursement for the improvements, that is, if
said improvements are appropriated by the owner of the land
[Quemuel v. Olaes].
Ignao v. Intermediate Appellate Court
Held: Petitioner's second assigned error is however well taken. 
Both the trial court and the Appellate Court erred when they peremptorily
adopted the “workable solution” in the case of Grana vs. Court of Appeals, 
and ordered the owner of the land, petitioner Florencio, to sell to private
respondents, Juan and Isidro, the part of the land they intruded upon,
thereby depriving petitioner of his right to choose.  Such ruling contravened
the explicit provisions of Article 448 to the effect that "(t)he owner of the
land xxx shall have the right to appropriate xxx or to oblige the one who
built xxx to pay the price of the land xxx." The law is clear and
unambiguous when it confers the right of choice upon the landowner and
not upon the builder and the courts.
However, even as the option lies with the landowner, the
grant to him, nevertheless, is preclusive. He must choose one.
Hence, the landowner cannot refuse to exercise either option and
compel instead the owner of the building or improvement to
remove it from the land. The remedy of removal is available only if
and when the owner of the land chooses to compel the builder to
buy the land at a reasonable price but the latter fails to pay such
price. In a situation where the landowner is refusing to exercise any
of the options granted him under Article 448, the builder in good
faith can, under the same Article, compel the landowner to make a
choice between appropriating the building by paying the proper
indemnity or obliging the builder to pay the price of the land
[Technogas Philippines v. Court of Appeals].
Ignacio v. Hilario
Held: The owner of the land, upon the other hand, has the
option, either to pay for the building or to sell his land to the owner of the
building. But he cannot, as respondents here did, refuse both to pay for the
building and to sell the land and compel the owner of the building to
remove it from the land where it is erected. He is entitled to such remotion
only when, after having chosen to sell his land, the other party fails to pay
for the same. But this is not the case before us.
We hold, therefore, that the order of Judge Natividad compelling
defendants-petitioners to remove their buildings from the land belonging to
plaintiffs-respondents only because the latter chose neither to pay for such
buildings nor to sell the land, is null and void, for it amends substantially
the judgment sought to be executed and is, furthermore, offensive to articles
361 and 453 of the Civil Code.
Technogas v. Court of Appeals
Held: The private respondent’s insistence on the removal of the
encroaching structures as the proper remedy, which respondent Court
sustained in its assailed Decisions, is thus legally flawed. This is not one of
the remedies bestowed upon him by law. It would be available only if and
when he chooses to compel the petitioner to buy the land at a reasonable
price but the latter fails to pay such price. This has not taken place. Hence,
his options are limited to: (1) appropriating the encroaching portion of
petitioner’s building after payment of proper indemnity, or (2) obliging the
latter to buy the lot occupied by the structure. He cannot exercise a remedy
of his own liking.
Once the landowner,  has  made his choice, and has duly 
informed the court of said  choice,  and  is accordingly  ordered to
comply  with the  same by  buying the  building erected on  his
land and pay the value thereof fixed by the courts, that duty is
converted into a money obligation which can be  enforced by
execution,  regardless of the unwillingness and alleged inability of
the party concerned to  pay the amount [Tayag v. Court of
Appeals].
Tayag v. Court of Appeals
Held: The question of whether petitioners had  finally  made
their choice,  namely, to buy the houses because they were  unwilling to sell
the land, was directly in issue before the Court of Appeals which definitely
decided that petitioners had made their choice not to sell their  land but to
buy the houses built thereon.   As we have  already said, by our refusal to
review said decision of the Court of Appeals, we agreed with the said court
on its stand on this point; consequently, the trial court was fully warranted
in limiting the presentation  of evidence to the value of the said houses, not
of the land.
As  regards the alleged inability of petitioners to pay the value 
of the buildings finally fixed by the courts at P47,500, claimed by them to
be a good reason for not compelling them to buy the buildings,  we cannot
sanction  said theory. Otherwise, were that claim or contention to be
sustained, and if petitioners were allowed to change their mind, repudiate  to Article 546, which provides for full reimbursement of useful
their choice made in court not to sell the land but to buy the buildings, and
then  compel the owners of the houses, respondents herein, instead to buy
land, then what if respondents also claimed  inability to pay the price of the
land, claiming that it is also a good and valid reason for not  compelling
Page 19 of 25
them  to make the  purchase?  How would this litigation end, if it ever
would end?
The Indemnities to be Given
(a) Necessary Expenses. (Art. 546, par. 1).
(b) Useful Expenses. (Art. 546, par. 2).
(c) Luxurious Expenses — if he desires to appropriate
them for himself. (Art. 548).
In Pecson v. Court of Appeals, it was held that the
objective of Article 546 of the Civil Code is to administer justice
between the parties involved. In this regard, this Court had long
ago stated in Rivera vs. Roman Catholic Archbishop of Manila  that
the said provision was formulated in trying to adjust the rights of
the owner and possessor in good faith of a piece of land, to
administer complete justice to both of them in such a way as
neither one nor the other may enrich himself of that which does not
belong to him.  Guided by this precept, it is therefore the current
market value of the improvements which should be made the basis
of reimbursement. It is therefore the current market value of the
improvement which should be made the basis of reimbursement.
Republic v. Ballocanag
Held: This basic doctrine on unjust enrichment simply means
that a person shall not be allowed to profit or enrich himself inequitably at
another's expense. There is unjust enrichment when a person unjustly
retains a benefit to the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity and
good conscience.
The requisites for the application of this doctrine are present in
the instant case. There is enrichment on the part of the petitioner, as the
State would come into possession of -- and may technically appropriate --
the more than one thousand fruit-bearing trees planted by the private
respondent. There is impoverishment on the part of Reyes, because he
stands to lose the improvements he had painstakingly planted and invested
in. There is lack of valid cause for the State to acquire these improvements,
because, as discussed above, Reyes introduced the improvements in good
faith. Thus, the Court of Appeals did not commit any error in ruling that
Reyes is entitled to the benefits of Articles 448 and 546 of the Civil Code.
Rights of Landowner Before He Makes the Choice
Before the landowner exercises the option, it is evident
that he is not yet the owner of whatever has been built, planted, or
sown, for his only right in the meantime is to exercise the option.
Neither builder nor landowner can oust each other, for until
indemnity is paid, the builder has the right of retention.
Pending Reimbursement, Builder Has Right of
Retention
In addition to the right of the builder in good faith to be
paid the value of his improvement, Article 546 of the New Civil
Code gives him the corollary right of retention of the property until
he is indemnified by the owner of the land. The builder in good
faith may not, therefore, be required to pay rentals. This is so
because the right to retain the improvements while the
corresponding indemnity is not paid implies the tenancy or
possession in fact of the land on which it is built, planted or sown
[Pecson v. Court of Appeals].
However, Article 448 of the New Civil Code, in relation
improvements and retention of the premises until reimbursement is
made, applies only to a possessor in good faith, i.e., one who builds
on a land in the belief that he is the owner thereof. It does not apply
to a mere lessee, otherwise, it would always be in his power to
“improve” his landlord out of the latter’s property [Chua v. Court
of Appeals].
Applicability of the Article if the person who builds,
plants, or sows is a co-owner
It was held in Spouses del Campo vs. Abesia:
"The court a quo correctly held that Article 448 of
the Civil Code cannot apply where a co-owner builds, plants or
sows on the land owned in common for then he did not build,
plant or sow upon land that exclusively belongs to another but of
which he is a co-owner.  The co-owner is not a third person
under the circumstances, and the situation is governed by the
rules of co-ownership.
"However, when, as in this case, the ownership is
terminated by the partition and it appears that the home of
defendants overlaps or occupies a portion of 5 square meters of
the land pertaining to plaintiffs which the defendants obviously
built in good faith, then the provisions of Article 448 of the new
Civil Code should apply.  Manresa and Navarro Amandi agree
that the said provision of the Civil Code may apply even when
there is a co-ownership if good faith has been established”.
In other words, when the co-ownership is terminated
by a partition and it appears that the house of an erstwhile co-
owner has encroached upon a portion pertaining to another co-
owner which was however made in good faith, then the
provisions of Article 448 should apply to determine the
respective rights of the parties.
Can the planter, builder, or sower in good faith, after
discovering that the improvements introduced by him were built,
planted, or sown on another’s land, remove the improvements?
No. A planter in good faith cannot remove the
improvements he introduced in the land he purchased. Even if he is
legally entitled to do so, it would be a violation of the explicit
mandate under Article 547.
Republic v. Ballocanog
Held: To allow Reyes to remove the fruit-bearing trees now full-
grown on the subject land, even if he is legally entitled to do so, would be
risking substantial damage to the land. It would negate the policy
consideration underlying the AFFLA -- to protect and preserve the
biodiversity and the environment, and to prevent any damage to the land.
Further, it would violate the implicit mandate of Article 547 of the Civil
Code which provides:
ART. 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.
In this light, the options that Reyes may exercise under Articles
448 and 546 of the Civil Code have been restricted. It is no longer feasible
to permit him to remove the trees he planted. The only equitable alternative
would be to order the Republic to pay Reyes the value of the improvements
he introduced on the property. This is only fair because, after all, by the
terms of the AFFLA, upon the expiration of the lease or upon its
cancellation if there be any violation or breach of its terms, all permanent
improvements on the land shall pass to the ownership of the Republic
without any obligation on its part to indemnify the lessee.
RULES TO REMEMBER:
1. If the landowner is in good faith, he has two options: (1) the
right to appropriate anything that has been build, planted or
sown after payment of proper indemnity; or (2) to compel the
builder to buy the land unless the price of the land is
substantially higher than the improvements.
2. The right of removal is limited. Generally, the landowner has
no right of removal. Except only after having selected a
Page 20 of 25
compulsory sale and the builder, planter, or sower fails to pay
for the price of the land.
3. Once the landowner makes a choice, it is irrevocable. If after
the landowner makes the choice of appropriation, he cannot
thereafter make the choice of compulsory sale.
Article 449. He who builds, plants, or sows in bad faith on
the land of another, loses what is built, planted or sown without right to
indemnity.
Dr. Arturo Tolentino opines that in distinguishing good
faith and bad faith possession, the Code refers to the manner of
acquisition in general. A possessor in good faith is one who is
unaware that there exists a flaw which invalidates his acquisition of
the thing. Good faith consists in the possessor's belief that the
person from whom he received a thing was the owner of the same
and could convey his title. It consists in an honest intention to
abstain from taking any unconscientious advantage of another, and
is the opposite of fraud. Since good faith is a state of the mind, and
is not a visible, tangible fact that can be seen or touched, it can only
be determined by outward acts and proven conduct. It implies
freedom from knowledge and circumstances which ought to put a
person on inquiry [De Vera v. Court of Appeals]. 
Article 449 applies, in the case of planting or sowing,
only to growing or standing crops, not to gathered crops, which are
governed by Article 443.
De Vera v. Court of Appeals
Held: Records disclose that prior  to the construction in 1983 of
petitioners' house on the land under controversy, a demand
letter dated April 27, 1981 was sent by private respondent to the
petitioners, informing them that the land they were possessing and
occupying is within his (private respondent's) titled property.
In the same letter, the private respondent gave petitioner Agueda
de Vera the option to either pay him the value of the property or lease the
same on a yearly or monthly basis. However, the contending parties failed
to reach a compromise agreement. The lower court found, "that the
defendants (herein petitioners) are occupying ... an area of 22 square
meters in which land, defendants constructed a house of strong materials
in 1983 after dismantling heir (sic) previous building erected thereon on or
about January or February, 1970."
The facts and circumstances aforestated are "outward acts and
proven conduct" indicating bad faith of petitioners
as possessor and builder.
Pada-Kilaro v. Court of Appeals
Held: Considering that petitioners were in possession of the
subject property by sheer tolerance of its owners, they knew that their
occupation of the premises may be terminated any time. Persons who
occupy the land of another at the latter's tolerance or permission, without
any contract between them, is necessarily bound by an implied promise that
they will vacate the same upon demand, failing in which a summary action
for ejectment is the proper remedy against them. Thus, they cannot be
considered possessors nor builders in good faith.
Article 450. The owner of the land on which anything has
been built, planted or sown in bad faith may demand the demolition of
the work, or that the planting or sowing be removed, in order to
replace things in their former condition at the expense of the person
who built, planted or sowed; or he may compel the builder or planter
to pay the price of the land, and the sower the proper rent.
If the landowner has acted in good faith, i.e., he was not
aware that something was being built, planted or sown on his land
and he learned about only after it was done, and the builder, planter
or sower (who is at the same time the owner of the materials) has
acted in bad faith, the landowner can exercise any of the following
three rights and/ or remedies under Articles 449, 450 and 451:
1. Right to appropriate
He can appropriate what has been built, planted or sown
on his land in bad faith without any obligation to pay indemnity
because Article 449 of the New Civil Code provides that “he who
builds, plants or sows in bad faith on the land of another, loses
what is built, planted or sown without right to indemnity.” And in
addition to this right of “confiscation” of the improvements, he can
also demand damages from the builder, planter or sower in bad
faith pursuant to Article 451.
2. Right of Demolition
The second right or remedy of the landowner is to
exercise the right of remotion pursuant to Article 450, i.e., he can
demand that what has been built, planted or sown in bad faith on
his land be removed or demolished and that the land be restored to
its original condition — all at the expense of the builder, planter or
sower — plus damages suffered by the landowner pursuant to
Article 451.
3. Right to compel the payment of the price of the
land
The third possible right of the landowner is to compel the
builder or planter to pay the price of the land, and the sower the
proper rent, pursuant to Article 450, plus damages under Article
451. There being no exception provided in the law, it is submitted
that the landowner can exercise this right even if the value of the
land is considerably more than that of the building or trees. But
then again, this remedy is available against the builder and planter
only. With respect to the sower, the landowner may only compel
him to pay the proper rent.
Article 451. In the cases of the two preceding articles, the
landowner is entitled to damages from the builder, planter, or sower.
The right of the owner of the land to recover damages
from a builder in bad faith is clearly provided for in Article 451 of
the Civil Code. Although said Article 451 does not elaborate on the
basis for damages, the Supreme Court perceives that it should
reasonably correspond with the value of the properties lost or
destroyed as a result of the occupation in bad faith, as well as the
fruits (natural, industrial or civil) from those properties that the
owner of the land reasonably expected to obtain [Heirs of Durano,
Sr. v. Sps. Uy].
Article 452. The builder, planter or sower in bad faith is
entitled to reimbursement for the necessary expenses of preservation of
the land.
Articles 546 and 548 of the Civil Code provide:
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.
Page 21 of 25
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.
A builder in bad faith can lose the building, without
indemnity for the necessary or useful expenses for the building,
BUT he must be indemnified the necessary expenses for the
preservation of the land because, after all, the true owner would
have borne such expenses anyway, even if nothing had been built
on the land.
Necessary expenses have been variously described by the
Spanish commentators as those made for the preservation of the
thing (4 Manresa's Comentarios al Codigo Civil, p. 258); as those
without which the thing would deteriorate or be lost
(Scaevola's Comentarios al Codigo Civil, p. 408); as those that
augment the income of the things upon which they are expended (4
Manresa's Comentarios al Codigo Civil, p. 261; 8 Scaevola's
Comentarios al Codigo Civil, p. 416). Among the necessary
expenditures are those incurred for cultivation, production, upkeep,
etc. (4 Manresa's Comentarios al Codigo Civil, p. 257).
Article 453. If there was bad faith, not only on the part of the
person who built, planted or sowed on the land of another, but also on
the part of the owner of such land, the rights of one and the other shall
be the same as though both had acted in good faith.
It is understood that there is bad faith on the party of the
landowner whenever the act was done with his knowledge and without
opposition on his part.
The bad faith of one neutralizes the bad faith of the other
(3 Manresa 223), so both will be considered in good faith.
Alviola v. Court of Appeals
Held: As correctly ruled by the respondent court, there was bad
faith on the part of the petitioners when they constructed the copra dryer
and store on the disputed portions since they were fully aware that the
parcels of land belonged to Victoria Tinagan. And, there was likewise bad
faith on the part of the private respondents, having knowledge of the
arrangement between petitioners and Victoria Tinagan relative to the
construction of the copra dryer and store. Thus, for purposes of indemnity,
Article 448 of the New Civil Code should be applied.
Article 454, When the landowner acted in bad faith and the
builder, planter or sower proceeded in good faith, the provisions of
Article 447 shall apply.
Article 447 governs the case of building, planting or
sowing on one’s own land with materials of another either in good
faith or in bad faith. The reason why said article applies may be
explained as follows: that if the landowner knew that something
was being built, planted or sown on his land by another and he did
not interpose any objection thereto, it is as if he was the one
building, planting or sowing in bad faith on his own land with
materials belonging to another, using the owner of the materials as
his worker. As a consequence, and pursuant to the provisions of
Article 447, the owner of the materials (who is at the same time the
builder, planter or sower in this case) acquires two alternative
rights, namely: (1) to demand the value of his materials, plus
damages; or (2) to demand the return of his materials in any event,
plus damages.
 Article 455. If the materials, plants, or seeds belong to a
third person who has not acted in bad faith, the owner of the land shall
answer subsidiarily for their value and only in the event that the one
who made use of them has no property with which to pay.
This provision shall not apply if the owner makes use of the
right granted by Article 450. If the owner of the materials, plants or
seeds has been paid by the builder, planter or sower, the latter may
demand from the landowner the value of the materials and labor.
Rights of Owner of the Materials
(a) If he acted in BAD FAITH, he loses all rights to be
indemnified. Moreover, he can even be liable for consequential
damages (as when the materials are of an inferior quality).
(b) If he acted in GOOD FAITH, he is entitled to
reimbursement from the builder (or planter or sower) principally,
since it was the builder (or planter or sower) who FIRST made use
of the materials. In case of insolvency on the part of the builder, the
landowner is subsidiarily liable, if he makes use of the materials.
NOTE: The landowner is subsidiarily liable for the
payment of the value of the materials. This subsidiary liability,
however, of the owner of the land is only available if the following
conditions are met: (1) in case of insolvency of the builder, planter
or sower; and (2) the owner of the land appropriates the building,
planting or sowing. A fortiori, the owner of the land is not liable to
the owner of the materials if the former chooses to order the
demolition of the construction or the removal of the building,
planting or sowing which he has the right to do in case the builder,
planter or sower acted in bad faith. If the landowner pays for the
value of the materials, he becomes the owner thereof. In such a
situation, he may demand damages from the builder, planter or
sower if the latter acted in bad faith, or pay the builder, planter or
sower a reasonable compensation for his labor if the latter acted in
good faith.
Rights of the Builder, Planter or Sower
The rights of the builder, planter or sower shall be
determined depending on his good faith or bad faith.
(a) If he acted in good faith in that he thought honestly
that both the land and the materials belonged to him, he may claim
from the landowner a reasonable compensation for his labor. This
is based on the principle that no person should be unjustly enriched
at the expense of another.
(b) If he acted in bad faith in that he knew that the
materials he was using belonged to somebody else or that he had
no right to the land, then he is not entitled to anything. He may
instead be made to pay damages to the landowner.
Article 456. In the cases regulated in the preceding articles,
good faith does not necessarily exclude negligence, which gives right to
damages under Article 2176.
It is possible that a person may be in good faith, and also
negligent. In fact, in negligence, there is no intent to do wrong. On
the other hand, bad faith presupposes an intent to cause damage or
prejudice. In case there be negligence, damages for his culpa will
arise under Article 2176.
Article 457. To the owners of lands adjoining the banks of
rivers belong the accretion which they gradually receive from the
effects of the current of the waters.
Page 22 of 25
With this article begins accession natural, the principal
forms of which are:
(a) alluvium. (Art. 457).
(b) avulsion. (Art. 459).
(c) change of course of rivers. (Arts. 461-462).
(d) formation of islands. (Arts. 464-465).
Accretion is the process whereby the soil is deposited,
while alluvium is the soil deposited on the estate fronting the river
bank; the owner of such estate is called the riparian owner. Riparian
owners are, strictly speaking, distinct from littoral owners, the
latter being owners of lands bordering the shore of the sea or lake
or other tidal waters. The alluvium, by mandate of Article 457 of
the Civil Code, is automatically owned by the riparian owner from
the moment the soil deposit can be seen but is not automatically
registered property, hence, subject to acquisition through
prescription by third persons [Heirs of Navarro v. IAC].
Accretion benefits a riparian owner when the following
requisites are present:  (1) that the deposit be gradual and
imperceptible; (2) that it resulted from the effects of the current of
the water; and (3) that the land where accretion takes place is
adjacent to the bank of a river [Republic v. Court of Appeals].
First Requisite
A sudden and forceful action like that of flooding is
hardly the alluvial process contemplated under Article 457 of the
New Civil Code. It is the slow and hardly perceptible accumulation
of soil deposits that the law grants to the riparian owner [Binalay v.
Manalo]. This is what distinguishes alluvion from avulsion. In
alluvion, the deposit of soil is gradual and imperceptible; whereas
in avulsion, it is sudden and abrupt.
Zapata v. Director of Lands
The appellant contends that article 457 of the Civil Code
providing that to the owners of lands adjoining the banks of river belong the
accretion which they gradually receive from the effects of the current of the
waters cannot apply and does not support the appellee's claim that the
accretion or deposit of alluvial soil, which is delimited in plan Psu-140515
and designated as Lots 1, 2 and 3, belongs to her as riparian owner, because
such accretion "was not due to the natural effect of the current but was
artificially induced on account of the erection of the fish traps on the
creek."
Held: The contention cannot be sustained. The appellant does
not dispute that the accreted land delimited in plan Psu-140515 and
designated as Lots 1, 2 and 3 adjoining Lot No. 25 and that part of Lot No.
16, both owned by the appellee, had been formed gradually due to the effect
of the water current of the Candalaga Creek, but claims that the accretion
was artificially brought about by the setting up of fish traps, such
as salag net, bunuan (bamboo trap), sabat (cutting of channels) and fencing
that the fishermen had built in the stream. True, those fish traps might have
slowed down the current of the Candalaga Creek and might have brought
about or caused the accretion, but as there is no evidence to show that the
setting up or erection of the fish traps was expressly intended or designed to
cause or bring about the accretion, the appellee may still invoke the benefit
of the provisions of article 457 of the Civil Code to support her claim of
title thereto. Moreover, the fishermen who since 1894 used to set up fish
traps in the creek (p. 7, t.s.n.), later on secured permit from the Government
that auctioned off the right or license to set up fish traps in the creek (p. 6,
t.s.n.), and the setting up of such fish traps stopped or was discontinued
even before 1926 (p. 7, t.s.n.), all go to show that the alluvial accretion was
not entirely due to the setting up of such fish traps.
Vda. De Nazareno v. Court of Appeals
Held: For petitioners to insist on the application of these rules on
alluvion to their case, the above-mentioned requisites must be present.
However, they admit that the accretion was formed by the dumping of
boulders, soil and other filling materials on portions of the Balacanas Creek
and the Cagayan River bounding their land. It cannot be claimed, therefore,
that the accumulation of such boulders, soil and other filling materials was
gradual and imperceptible, resulting from the action of the waters or the
current of the Balacanas Creek and the Cagayan River.
The drying up of the river is not accretion
The dried-up river bed belongs to the State as property of
public dominion, not to the riparian owner, unless a law vests the
ownership in some other person [Republic v. Santos III].
Republic v. Santos III
Held: Respondents did not show that the gradual and
imperceptible deposition of soil through the effects of the current of the
river had formed Lot 4998-B. Instead, their evidence revealed that the
property was the dried-up river bed of the Parañaque River, leading both
the RTC and the CA to themselves hold that Lot 4998-B was “the land
which was previously part of the Parañaque River xxx (and) became an
orchard after it dried up.”
Second Requisite
The requirement that the deposit should be due to the
effect of the current of the river is indispensable. This excludes
from Article 457 of the New Civil Code all deposits caused by
human intervention. Alluvion must be the exclusive work of nature
[Republic v. Court of Appeals]. Hence, the riparian owner does not
acquire the additions to his land caused by special works expressly
intended or designed to bring about accretion. Thus, in Tiongco v.
Director of Lands, where the land was not formed solely by the
natural effect of the water current of the river bordering said land
but is also the consequence of the direct and deliberate intervention
of man, it was deemed a man-made accretion and, as such, part of
the public domain [Vda de Nazareno v. Court of Appeals].
Vda de Nazareno v. Court of Appeals
Held: In the case at bar, the subject land was the direct result of
the dumping of sawdust by the Sun Valley Lumber Co. consequent to its
sawmill operations. Even if this Court were to take into consideration
petitioners' submission that the accretion site was the result of the late
Antonio Nazareno's labor consisting in the dumping of boulders, soil and
other filling materials into the Balacanas Creek and Cagayan River
bounding his land, the same would still be part of the public domain.
Third Requisite
Under Article 457, the accretion must take place on a
land adjacent to the banks of the river. Note, however, that while
Article 457 mentions only of accretions on the banks of rivers, this
must be interpreted in conjunction with Article 84 of the Spanish
Law of Waters which provides:
“Accretions deposited gradually upon land
contiguous to creeks, streams, rivers and lakes, by accessions or
sediments from the water thereof, belong to the owners of such
lands.”
It is therefore explicit from the foregoing provisions that
alluvial deposits along the banks of a creek do not form part of the
public domain as the alluvial property automatically belongs to the
owner of the estate to which it may have been added. The only
restriction provided for by law is that the owner of the adjoining
property must register the same under the Torrens system;
otherwise, the alluvial property may be subject to acquisition
Page 23 of 25
through prescription by third persons [Office of the City Mayor v.
Ebio].
Heirs of Navarro v. Intermediate Appellate Court
Held: First, the title of private respondents' own tract of land
reveals its northeastern boundary to be Manila Bay. Private respondents'
land, therefore, used to adjoin, border or front the Manila Bay and not any
of the two rivers whose torrential action, private respondents insist, is to
account for the accretion on their land. In fact, one of the private
respondents, Sulpicio Pascual, testified in open court that the waves of
Manila Bay used to hit the disputed land being part of the bay's foreshore
but, after he had planted palapat and bakawan trees thereon in 1948, the
land began to rise.
Moreover, there is no dispute as to the location of: (a) the
disputed land; (b) private respondents' own tract of land; (c) the Manila
Bay; and, (d) the Talisay and Bulacan Rivers. Private respondents' own land
lies between the Talisay and Bulacan Rivers; in front of their land on the
northern side lies now the disputed land where before 1948, there lay the
Manila Bay. If the accretion were to be attributed to the action of either or
both of the Talisay and Bulacan Rivers, the alluvium should have been
deposited on either or both of the eastern and western boundaries of private
respondents' own tract of land, not on the northern portion thereof which is
adjacent to the Manila Bay. Clearly lacking, thus, is the third requisite of
accretion, which is, that the alluvium is deposited on the portion of
claimant's land which is adjacent to the river bank.
Right of Riparian Owner to Alluvium Is Ipso Jure
The right of the owners of the bank adjacent to rivers to
the accretion which they receive by virtue of the action of the
waters of the river is ipso jure and there is no need of an action of
the owner of the bank to possess the new addition since it belongs
to him by the very fact of the addition [Roxas v. Tuason].
However, such accretion does not automatically become
registered land just because the lot which receives the same is
covered by Torrens title [Cureg v. IAC]. Thus, the accretion to
registered land does not preclude acquisition of the additional area
by another person through prescription [Reynante v. Court of
Appeals].
Grande v. Court of Appeals
We agree with the Court of Appeals that it does not, just as an
unregistered land purchased by the registered owner of the adjoining land
does not, by extension, become ipso facto registered land. Ownership of a
piece of land is one thing, and registration under the Torrens system of that
ownership is quite another. Ownership over the accretion received by the
land adjoining a river is governed by the Civil Code. Imprescriptibility of
registered land is provided in the registration law. Registration under the
Land Registration and Cadastral Acts does not vest or give title to the land,
but merely confirms and thereafter protects the title already possessed by
the owner, making it imprescriptible by occupation of third parties. But to
obtain this protection, the land must be placed under the operation of the
registration laws wherein certain judicial procedures have been provided.
The fact remains, however, that petitioners never sought registration of said
alluvial property (which was formed sometime after petitioners' property
covered by Original Certificate of Title No. 2982 was registered on June 9,
1934) up to the time they instituted the present action in the Court of First
Instance of Isabela in 1958. The increment, therefore, never became
registered property, and hence is not entitled or subject to the protection of
imprescriptibility enjoyed by registered property under the Torrens system.
Consequently, it was subject to acquisition through prescription by third
persons.
Riparian Owners Distinguished From Littoral Owners
The owner of the estate fronting the river bank is called
the riparian owner. Riparian owners are, strictly speaking, distinct
from littoral owners, the latter being owners of lands bordering the
shore of the sea or lakes or other tidal waters [Heirs of Navarro v.
IAC].
Article 458. The owners of estates adjoining ponds or
lagoons do not acquire the land left dry by the natural decrease of the
waters, or lose that inundated by them in extraordinary floods.
Definitions
(a) Pond — a body of stagnant water without an outlet,
larger than a puddle and smaller than a lake, or a like body of water
with a small outlet [Black’s Law Dictionary].
(b) Lagoon — a small lake, ordinarily of fresh water, and
not very deep, fed by f oods, the hollow bed of which is bounded
by the elevations of the land [Gov’t. v. Colegio de San Jose].
(c) Lake — a body of water formed in depressions of the
earth; ordinarily fresh water, coming from rivers, brooks, or springs
and connected with the sea by them. (Ibid.).
Article 458 applies when the estate adjoins:
(a) a pond;
(b) or a lagoon.
It does not apply when the estate adjoins a lake, a river, a
creek, or other streams [Government of the Philippine Islands. v.
Colegio de San Jose]. In such a case, the land left uncovered
reverts to the adjoining estate which owned it at the very
beginning.
Article 458 of the New Civil Code serves as an exception
to the general rule on alluvion. It is noteworthy that this article
refers only to ponds and lagoons but is not applicable to a lake
since with regard to a lake the rule of alluvion is applicable in
accordance with the Spanish Law of Waters. A lake has been
defined as body of water formed in depressions of the Earth,
ordinarily fresh water, coming from rivers, brooks or springs and
connected to the sea by them. A pond or lagoon on the other hand
is a small body of water, ordinarily of fresh water, and not very
deep, fed by floods, the hollow bed of which is bounded by
elevations of land [Gov’t v. Colegio de San Jose].
Article 459. Whenever the current of a river, creek or
torrent segregates from an estate on its bank a known portion of land
and transfers it to another estate, the owner of the land to which the
segregated portion belonged retains the ownership of it, provided that
he removes the same within two years.
Avulsion Defined
(a) the process whereby the current of a river, creek, or
torrent segregates from an estate on its bank a known portion of
land and transfers it to another estate.
(b) the removal of a considerable quantity of earth upon
or annexation to the land of another, suddenly and by the
perceptible action of the water.
Definition of River, Creek, Torrent
(a) River — a natural stream of water, of greater volume
than a creek or rivulet flowing, in a more or less permanent bed or
channel, between defined banks or walls, with a current which may
either be continuous in one direction or affected by the ebb and
flow of the tide.
(b) Creek — a small stream less than a river.
(c) Torrent — a violent, rushing, or turbulent stream.
Page 24 of 25
Distinction between Alluvium and Avulsion
Alluvion and avulsion share the following similarities:
(1) that they both take place only along the banks of rivers, creeks,
streams and lakes; and (2) that they are caused only by the force of
the current of the waters independently of the act of man.
But they differ, as follows: (1) In alluvion the deposit of
soil is gradual; whereas, in avulsion it is sudden and abrupt; (2) In
alluvion the deposit of soil belongs to the owner of the property
where the same was deposited but in avulsion the owner of the
property from which a part was detached retains the ownership
thereof; (3) In alluvion, accession takes place immediately upon the
deposit of the soil; whereas, in avulsion the right of accession takes
place only after two years from the attachment or incorporation of
the segregated portion of land to the riparian land and only if its
owner fails to remove the same within said period; and (4) In
alluvion, the soil cannot be identifi ed; in avulsion, the detached
portion can be identifi ed. In the absence, however, of evidence that
the change in the course of river was sudden or that it occurred
through avulsion, the presumption is that the change was gradual
and caused by accretion and erosion.
NOTE: In the absence of evidence that the change in the
course of the river was sudden or that it occurred through alluvium,
the presumption is that the change was gradual and was caused by
alluvium and erosion [Payatas-Estate Improvement Co. v. Tuason].
Article 460. Trees uprooted and carried away by the current
of the waters belong to the owner of the land upon which they may be
cast, if the owners do not claim them within six months. If such owners
claim them, they shall pay the expenses incurred in gathering them or
putting them in a safe place.
If trees are uprooted and carried away by the current of
the waters to another estate, the owner of the tree retains ownership
of the same but he is required to claim them within a period of six
months. Note that while avulsion with respect to a segregated
portion of land requires actual physical removal of the portion
detached within two years, the avulsion with respect to uprooted
trees merely require the owner of the tree to make a claim for the
same within a period of six months. If the uprooted trees have been
transplanted by the owner of the land upon which the trees may
have been cast and said trees have taken root in said land, then the
owner of the trees, upon making the claim, is required to refund the
expenses incurred in gathering them or in putting them in a safe
place, including the expenses incurred by the owner of the land for
the preservation of the trees.
Article 461. River beds which are abandoned through the
natural changes in the course of the waters ipso facto belong to the
owners whose lands are occupied by the new course in proportion to
the area lost. However, the owners of the lands adjoining the old bed
shall have the right to acquire the same by paying the value thereof
which value shall not exceed the value of the area occupied by the new
bed.
This article (461) refers to a natural change in the course
of a stream. If the change of the course is due to works constructed
by concessioners authorized by the government, the concession
may grant the abandoned river bed to the concessioners. If there is
no such grant, then, by analogy, the abandoned river bed will
belong to the owners of the land covered by the waters, as provided
in this article, without prejudice to a superior right of third persons
with sufficient title [Baes v. Court of Appeals].
 It is clear under this provision that once the river bed has
been abandoned, the riparian owners become the owners of the
abandoned bed to the extent provided by this article. The
acquisition of ownership is automatic. There need be no act on the
part of the riparian owners to subject the accession to their
ownership, as it is subject thereto ipso jure  from the moment the
mode of acquisition becomes evident, without the need of any
formal act of acquisition. Such abandoned river bed had fallen to
the private ownership of the owner of the riparian land even
without any formal act of his will and any unauthorized occupant
thereof will be considered as a trespasser. The right in re to the
principal is likewise a right in re to the accessory, as it is a mode of
acquisition provided by law, as the result of the right of accretion.
Since the accessory follows the nature of the principal, there need
not be any tendency to the thing or manifestation of the purpose to
subject it to our ownership, as it is subject thereto ipso jure from
the moment the mode of acquisition becomes evident [Agne v.
Director of Lands].
Bagaipo v. Court of Appeals
Held: The decrease in petitioner's land area and the
corresponding expansion of respondent's property were the combined effect
of erosion and accretion respectively.  Art. 461 of the Civil Code is
inapplicable.  Petitioner cannot claim ownership over the old abandoned
riverbed because the same is inexistent.  The riverbed's former location
cannot even be pinpointed with particularity since the movement of the
Davao River took place gradually over an unspecified period of time, up to
the present.
Article 462. Whenever a river, changing its course by
natural causes, opens a new bed through a private estate, this bed shall
become of public dominion.
Even if the new bed is on private property the bed
becomes property of public dominion, just as the old bed had been
of public dominion before the abandonment.
In event of a natural change in the course of the waters of
the river, Article 462 of the New Civil Code expressly declares that
the new bed passing through a private estate shall become property
of public dominion. This rule is consistent with the provisions of
Article 502(1) of the New Civil Code and Article 5(a) of the Water
Code of the Philippines.
Article 463. Whenever the current of a river divides itself
into branches, leaving a piece of land or part thereof isolated, the
owner of the land retains his ownership. He also retains it if a portion
of land is separated from the estate by the current.
The Article refers to the “formation of island by the
branching off of a river” as distinguished from the “formation of
islands by successive accumulation of alluvial deposits
(unidentifiable sediment)” referred to in Articles 464 and 465. In
the first, no accession takes place, the owner retaining his
ownership of the segregated portion; in the second, accession takes
place.
Article 463 applies whether the river is navigable or not,
for in both cases, the owner should not be deprived of his dominion
over the segregated or isolated property
Example: A’s estate adjoins a river, but the river divides
itself into branches, thus affecting A’s property. A however
remains the owner of the portion (this time — an island) which: (a)
may be isolated from the rest (here, the portion has not physically
moved, but there is ISOLATION). (b) or may be separated from
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the rest (here, the portion has physically moved — hence, the
SEPARATION).
Article 464. Islands which may be formed on the seas within
the jurisdiction of the Philippines, on lakes, and on navigable or
floatable rivers belong to the State.
Article 464 provides for a real case of accession
compared to the previous article (Article 463). In Article 464, an
island is formed on a sea, lake or navigable or floatable river
through whatever cause. Thus, the article clearly speaks of an
addition to the property of the State since the island thus formed is
expressly declared to be property of the latter. It has been said that
the island formed pursuant to the provisions of Article 464 forms
part of the patrimonial property of the State and, therefore, may be
sold by the State. Article 464 speaks of an island formed on a
navigable or floatable river. A river is considered to be navigable
or floatable if it is able to carry the produce of the land along its
banks to the market
Article 465. Islands which through successive accumulation
of alluvial deposits are formed in non-navigable and non-floatable
rivers, belong to the owners of the margins or banks nearest to each of
them, or to the owners of both margins if the island is in the middle of
the river, in which case it shall be divided longitudinally in halves. If a
single island thus formed be more distant from one margin than from
the other, the owner of the nearer margin shall be the sole owner
thereof.
Article 465, in turn, speaks of an island formed in non-
navigable or non-floatable rivers through successive accumulation
of deposit in the same manner as alluvion. Hence, if the island is
formed in navigable or floatable rivers, it is Article 464 that will
apply and not this article. If the island is formed through a sudden
and abrupt process due to segregation of identifiable portions of
land from an estate, it is Article 463 that will likewise apply and
not this article, whether the river is navigable or floatable or not.
If the requisites of Article 465 are complied with, the
ownership of the island thus formed shall be governed by the
following rules:
(1) It shall belong to the owner of the margins or banks
nearest to the island;
(2) If the island is in the middle of the river, the same
shall be owned by the owners of both margins, in which case it
shall be divided longitudinally in halves; or
(3) If the island be more distant from one margin than
from the other, the owner of the nearer margin shall be the sole
owner thereof.
The reason for this article is the same as in alluvion in
that the owners of the bank nearer the islands are in the best
position to cultivate and attend to the exploitation of the same. In
fact, no specific act of possession over the accretion is required. If,
however, the riparian owner fails to assert his claim thereof, the
same may yield to the adverse possession of third parties, as indeed
even accretion to land titled under the Torrens system must itself
be registered [Jagualing v. Court of Appeals].