Possession

a. Characteristics

i. Concept of Possession

Yu vs. Pacleb, G.R. No. 130316, January 24, 2007:

The Civil Code states that possession is the holding of a thing or

the enjoyment of a right. In the grammatical sense, to possess
means to have, to actually and physically occupy a thing, with or
without right. "Possession always includes the idea of occupation
x x x. It is not necessary that the person in possession should
himself be the occupant. The occupancy can be held by another in
his name." Without occupancy, there is no possession.

Two things are paramount in possession. First, there must be

occupancy, apprehension or taking. Second, there must be intent
to possess (animus possidendi).

ii. Doctrine of Constructive Possession

 Does possession require actual occupancy of every square of

the ground?

No. Possession in the eyes of the law does not mean that a man
has to have his feet on every square meter of the ground
before he is deemed in possession. In Ramos vs. The Director of
Lands, G.R. No. 13298. November 19, 1918, the Supreme Court
explained the concept of constructive possession, thus:

[T]he possession and cultivation of a portion of a tract under

claim of ownership of all is a constructive possession of all, if the
remainder is not in the adverse possession of another.

Note however that the doctrine of constrictive possession does

not apply where the possession is without title.

iii. Degrees of Possession

1. possession without any title whatsoever

2. possession with juridical title

3. possession with just title sufficient to transfer ownership

4. possession with a title in fee simple

iv. Classes of Possession

1. Possession in concept of owner and possession in concept of

holder (Article (525)

Note: Concept is opinion, but not of the possessor himself; it is the

opinion of the others. It may also mean belief, but not of the possessor

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 himself, it is the belief of others.

2. Possession by oneself, and possession in the name of another

(Articles 524, 532)

3. Possession in good faith and possession in bad faith (Article

526)

Notes:

i. 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. On the other
hand, one in possession of property knowing that his title is
defective is a possessor in bad faith.

ii. Reconciling Article 526, 3rd par. vis-à-vis Article 3, NCC

GR: Ignorance of the law cannot be the basis of good faith

ER: Error in the application of the law, in the legal solutions that
arise from such application, in the appreciation of the legal
consequences of certain acts, and in the interpretation of
doubtful provisions or doctrines may properly serve as a basis for
good faith (Article 526, 3rd par.)

b. Acquisition of Possession

i. Essential Requisites

The acquisition of possession involves two elements: the corpus and the
animus. The first is the material holding of the thing, and the second, the
intent to possess it. There must be concurrence of the two.

ii. Manner of acquiring possession

1. Material occupancy of the thing

- Note that constructive delivery may be considered as equivalent to

material occupation in those cases where such occupation is
essential to the acquisition of possession.
- Constructive delivery that is deemed equivalent to material
occupation:
i. Tradicion brevi-manu – takes place when one who possesses
a thing by title other than ownership continues to possess the
same but under a new title, that of ownership
Ex. A lessee bought the leased the property
ii. Constitutum possessorium – takes when the owner alienates
the property, but continues to possess the same under a
different title, such as a lessee

2. Subjection to the action of our will

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 - This means of acquisition of possession includes the constructive
delivery known as tradicion simbolica and tradicion longa manu

3. Proper acts and legal formalities established for acquiring such right.

iii. Rule of preference in case of dispute regarding possession

GR: Possession cannot be recognized in two different personalities.

ER: In case of co-possession. (Article 538)

Rules in case of dispute: (Article 538)

1. present/actual possessor shall be preferred

Citing Gaza vs. Lim, the Supreme Court in Yu vs. Pacleb ruled:

Where a dispute over possession arises between two persons, the

person first having actual possession is the one who is entitled to
maintain the action granted by law; otherwise, a mere usurper without
any right whatever, might enter upon the property of another and, by
allowing himself to be ordered off, could acquire the right to maintain
the action of forcible entry and detainer, however momentary his
intrusion might have been.

ILLUSTRATION No. 1:

A is in actual possession of a piece of land, but during his temporary

absence while visiting a relative in another province, B enters the land by
force and occupies it. B’s act does not affect A’s possession; hence, A will
be considered as the actual possessor and will be preferred. (See Article
537)

2. if there are two possessors, the one longer in possession

ILLUSTRATION No. 2:

A and B occupy the same land; each one having constructed a house on
one corner of the land but asserting possession over the whole lot. A took
possession of the lot in 1986, while B started occupying the land in 2000.
Preference will be in favor of the one who was first in taking possession. In
the instant case, it would be A.

3. if the dates of possession are the same, the one with a title

ILLUSTRATION No. 3:

If A and B took possession at the same time, but A has taken possession
without permission from the owner, while B has a lease contract with the
owner, the B will be preferred; the lease contract is his title.

4. if all the above are equal, the fact of possession shall be judicially
determined, and in the meantime, the thing shall be placed in
judicial deposit

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c. Effects of Possession

Possessor in good faith Possessor in bad faith

Fruits Entitled to the fruits No right to receive any fruits:

already (Article 544) i. Those already
gathered gathered and existing
will have to be
returned;
ii. With respect to the
lost, consumed, or
which could have
been received, he
must pay the value.
(Article 549)

Cultivation Right to be reimbursed for

Expenses of the expenses incurred
gathered (Article 443)
fruits
Fruits The possessor in good faith is No right to receive any
pending entitled to a part of the net fruits.
harvest, in proportion to the
time of the possession.
(Article 545)

Production The possessor in good faith No right to be reimbursed

expenses of shall have a right to a part of (Article 449)
pending the expenses of cultivation,
fruits in proportion to the time of
the possession.

As an indemnity for the

possessor’s part of the
expenses of cultivation and
the net proceeds, the owner
has the option:

(1) to pay; or
(2) give the possessor in good
faith the right to finish the
cultivation and gathering
of the growing fruits

Necessary Right to be reimbursed with Right to be reimbursed

expenses right of retention (Article without right of retention
546) (Article 546)

Useful 1. Right to be reimbursed No right to be reimbursed

expenses with right of retention (Article 546)
(Article 546) or
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 Note: The owner has the
option to reimburse the
amount of the expenses or
pay the increase in value of
the thing.
2. Right to remove the
useful improvements
ONLY IF it will not cause
damage to the principal
thing AND the first option
was not exercised. (Article
547)

Ornamental 1. Right to be reimbursed of 1. Right to be paid of the

expenses the expenses incurred, value at the time the
if the owner OPTED to owner or lawful
keep the ornaments possessor enters
2. Right to remove the possession, if the latter
improvements ONLY IF the OPTED to keep the
principal thing will not ornaments
suffer injury AND the 2. Right to remove the
owner does not choose to improvements ONLY IF
retain them (Article 548) the principal thing will
not suffer injury AND the
owner or lawful
possessor does not
choose to retain them
(Article 549)

Improvemen No right to be reimbursed No right to be reimbursed

ts that no (Article 553) (Article 553)
longer
existing
Liability for GR: Not liable Liable in all cases
accidental ER: If he/she acted has acted (Article 552)
loss or with fraudulent intent or
deterioration negligence, after the judicial
summons (Article 552)

Improvement Belongs to the owner or Belongs to the owner or

s caused lawful possessor lawful possessor
time or (Article 551) (Article 551)
nature

d. Loss or unlawful deprivation of a movable

i. General Rule: Possession of personal property acquired in good faith is

equivalent to title. Thus, when the personal property is in the possession
of one who has acquired and holds it in good faith, the true owner cannot
recover it. (Article 559)

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 Requisites:
1. The possession is in good faith;
2. The owner has voluntarily parted with the possession of the thing; and
3. The possessor is in concept of owner.

ii. Exceptions:
(1) The owner has lost it; and
(2) The owner has been unlawfully deprived of the thing.

In these two instances, the owner can recover the thing. The possessor
cannot retain the thing as against the owner, who may recover it without
paying any indemnity.

But if the possessor acquired the thing in a public sale, the owner must
reimburse the possessor the price that he/she has paid. (Article 559, 2 nd
par)

iii. The rights and obligations of a finder of a lost movable under the
Civil Code, cf Article 719 and 720, NCC

Art. 719. Whoever finds a movable, which is not treasure, must return it to
its previous possessor. If the latter is unknown, the finder shall
immediately deposit it with the mayor of the city or municipality where
the finding has taken place.

The finding shall be publicly announced by the mayor for two consecutive
weeks in the way he deems best.

If the movable cannot be kept without deterioration, or without expenses

which considerably diminish its value, it shall be sold at public auction
eight days after the publication.

Six months from the publication having elapsed without the owner having
appeared, the thing found, or its value, shall be awarded to the finder. The
finder and the owner shall be obliged, as the case may be, to reimburse
the expenses. (615a)

Art. 720. If the owner should appear in time, he shall be obliged to pay, as
a reward to the finder, one-tenth of the sum or of the price of the thing
found. (616a)

e. Rights of the possessor

i. Presumptions in favor of possessor

1. Presumption of Good Faith – unless proof of bad faith is

presented, the possessor will be held to be in good faith.
(Article 527)

Thus, so long as the possessor is not actually aware of any defect

invalidating his title or mode of acquisition, or any of the fact or
circumstance which would put a prudent man upon his guard, or require
him to discover the flaw in his transferor’s title, he shall be deemed a
possessor in good faith.

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 2. Presumption of continuity of initial good faith (Article 528)
3. Presumption of enjoyment in the same character in which possession
was acquired until the contrary is proved (Article 529)
4. Presumption of non-interruption in favor of the present possessor
(Article 543)
5. Presumption of continuous possession by the one who recovers
possession of which he was wrongfully deprived
6. Presumption of extension of possession of real property to all movables
contained therein (Article 542)

ii. Rights of a possessor

Art. 539. Every possessor has a right to be respected in his possession;

and should he be disturbed therein he shall be protected in or restored to
said possession by the means established by the laws and the Rules of
Court.

A possessor deprived of his possession through forcible entry may within

ten days from the filing of the complaint present a motion to secure from
the competent court, in the action for forcible entry, a writ of preliminary
mandatory injunction to restore him in his possession. The court shall
decide the motion within thirty (30) days from the filing thereof. (446a)

Art. 540. Only the possession acquired and enjoyed in the concept of
owner can serve as a title for acquiring dominion. (447)

Art. 541. A possessor in the concept of owner has in his favor the legal
presumption that he possesses with a just title and he cannot be obliged
to show or prove it. (448a)

g. Loss or termination of possession

What are the modes of losing possession? (Article 555)

1) By abandonment of the thing;
2) By an assignment made to another either by onerous or gratuitous title;
3) By destruction or total loss of the thing, or because it goes out of commerce;
4) By the possession of another subject to the provisions of Art. 537, if the new
possession has lasted longer than one year. But the real right of possession is
not lost till after the lapse of 10 years;
5) By recovery or reivindication of the thing by the legitimate owner.

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Right of Accession
- The owner of a thing becomes the owner of everything that it may produce or
which may be inseparably united or incorporated thereto.
The doctrine of accession rests on the following basic principles:
(1) That to the owner of the thing belongs the extension or increase of such thing
(2) That the accessory follows the principal
(3) That the incorporation of the accessory with the principal is effected only
when the two things are so united that they cannot be separated without
injuring or destroying the juridical nature of one of them.

1. Right to hidden treasure

 What is the concept of hidden treasure?

1. Hidden and unknown

2. Unknown owner
3. Consists of Money, jewels, or other precious objects. (Not raw
materials)

 What is the meaning of “other precious objects”?

Under the ejusdem generis rule, the phrase should be understood as

being similar to money or jewelry.

 What is the rule regarding discovery of hidden treasure?

General Rule: If the finder is the owner of the land, building, or the
property where it is found, the entire hidden treasure belongs to
him.

Exception: If the finder is not the owner or is a stranger (includes the

lessee or usufructuary), he or she is entitled to ½ thereof. (Article
438, NCC)

 When is the finder entitled to any share in the hidden

treasure?

Requisites:

1. Discovery was made on the property of another, or of the State or

any of its political subdivisions;
2. Made by Chance, that is, there must be no purpose or intent to look
for treasure; and
3. He is not a Trespasser or Agent of the landowner. (Art. 438 par. 2,
NCC)

Note: 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. (Art. 438, NCC)

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2. Right of Accession with Respect to What is Produced

General Rule: The owner of the thing owns the fruits (Article 441, NCC)
Exceptions:
i. Possession in good faith, in which case the fruits belong to
the possessor in good faith
ii. Usufruct, in which case the usufructuary owns the fruits
iii. Lease, in which case the lessee gets the fruits from the property
iv. Antichresis, in which case the creditor receives the fruits

 Can a possessor in bad faith claim reimbursement for the

expenses that he or she incurred under Article 443 of the NCC?
Compare Article 443 of the NCC with that of Article 449.

Article 443 of the NCC provides that:

Art. 443. He who receives the fruits has the obligation to pay the
expenses made by a third person in their production, gathering, and
preservation. (356)

On the other hand, Article 449 of the NCC provides:

Art. 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. (362)

(1) If the fruits have not yet been gathered at the time the
owner recovers possession from the possessor in good faith, he
does not have to pay the production expenses, following Article
449.
(2) If the fruits have been severed or gathered, and the
possessor in bad faith has been ordered to turned over the same
to the owner of the land, the former is entitled to be reimbursed.
Note that the owner cannot excused himself or herself by the bad
faith of the planter or sower because Article 443 makes no
distinction.

3. Right of Accession with respect to Immovable Property

GR: Whatever is built, planted, or sown on the land of another and the
improvements or repairs made, belong to the owner of the land. See
Article 445, NCC

ER: When the cost of the improvement made by the conjugal partnership and
any resulting increase in value are more than the value of the property at
the time of the improvement, the entire property of one of the spouses
shall belong to the conjugal partnership, subject to reimbursement of the

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 value of the property of the owner-spouse at the time of the improvement.
See Article 120. FC

Rule of Accession

i. Rules when landowner (LO) – builder/planter/sower

(BPS) makes constructions/plantings w/ materials of
another (OM) (Article 447)

A. If both are in good faith/bad faith

- The OM is entitled to: (1) recover the value of the materials;
or (2) to remove them, but the second option is only
available if he can do so without injury to the work
constructed or without the plantings, constructions or work
being destroyed.
- LO-BPS can acquire the materials provided there is full
payment of the value of the materials.

 Can LO-BPS offer to return the materials instead of

paying their value?
A reading of Article 447 would show that such option is not
available to the owner of the land.

B. If OM is in good faith, and LO-BPS is in bad faith

- The OM is entitled to: (1) recover the value of the materials;
or (2) to remove them in any event; and (3) damages.
- LO-BPS can acquire the materials provided there is full
payment plus damages

C. If OM is in bad faith, and LO-BPS is in good faith

- OM loses materials without indemnity under Article 449; it is
as if he/she had made the building, planting, or sowing,
because it was done with his/her tacit consent
- LO-BPS can acquire the materials without paying for the
value thereof

ii. Rules when BPS builds, plants, or sows on the land of

another (LO)

A. If both LO and BPS are in good faith

Applicable provisions: Articles 448, 544, 546, 548

There is no co-ownership. The owner owns the property (e.g. land),

and the BPS owns that which he built or planted (e.g. building).
However, LO has the following remedies:

(1) To appropriate that which was built or planted (e.g. building)

as his own, after paying the BPS the amount of indemnity

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 which includes necessary expenses and useful expenses, and
luxurious expenses as provided in Articles 546 and 548; or
(2) To compel the BPS to pay the price of the land (if B or P), or
the rent (if S). However, the B or P 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.

It is very important to note that it is the owner who makes the

determination or choice.

If LO does not make the decision, the parties remain status quo —
BPS remains the owner of that which was built/planted/sowed.
Moreover, the BPS remains the possessor in good faith, and as a
possessor in good faith, he has the right to fruits of the property
(e.g. rentals in the building), pursuant to Article 544 of the Civil
Code.

BPS has also the right of retention over that which was
built/planted/sowed, and such right remains until the owner
reimburses him for the amount of expenses mentioned in
Articles 546 and 548.

 Can the LO instead of exercising the options stated

above, compel the owner of the building to remove the
building from the land?

NO. He is entitled to such removal ONLY when, after having

chosen to sell the land, the other party fails to pay for said
land. (Ignacio vs. Hilario, 76 Phil. 605)

B. If the owner is in bad faith, and the BPS is in good faith

Applicable provisions: Articles 454 and 447

See item No. 1.B above

C. If the owner is in good faith, and the BPS is in bad faith

Applicable provisions: Articles 449, 450, 451, 452

LO is entitled to damages, plus he/she may:

(1) Appropriate what was built without need of indemnity to the

BPS;
(2) Demand the demolition of the thing built or restoration of the
land at the expense of the BPS;
(3) Compel the BPS to pay the land or the sower the proper rent.

Notwithstanding the bad faith on the part of BPS, he still:

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 (1) Is entitled to reimbursement for the necessary expenses of
preservation of land, but he has no right of retention; and
(2) Has the right to remove the materials as long as there will be
no damage to the land.

NOTA BENE: (Regarding Gathered and Growing Crops)

(1) if the crops have already been gathered, planter/sower must

return the value of crops or the crops themselves but minus
the necessary expenses (for production, gathering and
preservation) (Article 443)
(2) if the crops have not yet been gathered, planter/sower must
completely forfeit them to landowner without right to
indemnity (Article 449)

D. If both the owner of the land and the BPS are in bad faith.
Applicable provision: Article 453, NCC

4. Right of Accession with respect to movable property

Basic Principle: Accession exists only if separation is not feasible.

Otherwise, separation may be demanded.

KINDS (accession continua as to movables):

1. Adjunction - the union of two things belonging to different owners, in

such a manner that they cannot be separated without injury, thereby
forming a single object. (Article 466)

i. Different kinds of Adjunction

a. inclusion or engraftment

b. soldadura or soldering

c. escritura or writing

d. pintura or painting

e. tejido or weaving

ii. Tests to determine which is the principal

a. the “rule of importance and purpose”

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 b. that of greater value

c. that of greater volume

d. that of greater merits

SPECIAL RULE:

(1) In painting and sculpture, writings, printed matter,

engraving and lithographs, the board, metal, stone, canvas,
paper or parchment shall be deemed the accessory thing.
(Article 468, 2nd par)
(2) IF THE ADJUNCTION CONCERNS THREE OR MORE THINGS,
determine which really is the principal, and the rest should
be considered as accessories

iii. Rules:

a. Adjunction in good faith by either owner

GR: Accessory follows the principal.

ER: If the accessory is much more precious than the principal,

the owner of the accessory may demand the separation even if
the principal suffers some injury (Article 469)

b. Adjunction in bad faith by the owner of the principal

The owner of the accessory has the following options: (1) to

recover the value or (2) to demand separation, and in both
instances, he/she is entitled to damages (Article 470, 2nd par)

c. Adjunction in bad faith by the owner of the accessory

The owner of the accessor (1) loses the accessory and (2) is
liable for damages (Article 470, 1st par)

iv. When separation of things allowed:

a. separation without injury

b. accessory is more precious than the principal

c. owner of the principal acted in bad faith

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2. Mixture - Union of materials where the components lose their
identity (Article 472)

i. Kinds:

a. Commixtion – mixture of solids

b. Confusion – mixture of liquids

ii. Rules:

a. By the will of both owners or by accident - each owner

acquires an interest in proportion to the value of his o her
material (Article 472)

b. By the will of only one of the owners but in good faith,

apply rule(a) (Article 473, in relation to Article 472)

c. By one owner in bad faith: (1) he/she loses all his/her

rights to his/her own material, and (2) will be liable for
damages (Article 473)

3. Specification - It is the transformation of another’s material by the

application of labor. The material becomes a thing of different kind.
(Article 474)

Rules:

a. Both Owner of the principal (worker) and owner of the materials (OM)
are in good faith:

GR: The principal acquires the new thing, but must indemnify the owner
of the material

ER. If the material is more valuable than the resulting thing, the owner of
the material has the following options:

1) to acquire the work, after paying indemnity for the value of the
work; or

2) to demand indemnity for the material (Article 474, 1st par)

b) Owner of the principal (worker) in bad faith, and OM is in good faith:

GR: The owner of the material has the following options: (1) to acquire
the result without indemnity, or (2) to demand indemnity for the material
plus damages

ER: The owner of the material cannot appropriate the work in case the

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 value of the latter, for artistic or scientific reasons, is considerably more
than that of the material. (Article 474, 2nd par)

c) Owner of the principal (worker) in good faith, and OM is in bad faith:

OM (1) loses the material, and (2) will be liable for damages (Apply
Article 470 by analogy)

The Owner of the principal (worker) acquires the new thing without
indemnity.

Quieting of Title

i. Requisites of an action to quiet title or remove/prevent cloud on

title

(1) plaintiff must have a legal or equitable title to, or interest in the real
property which is the subject matter of the action;

- The Supreme Court in Salvador v. Patricia, Inc., G.R. No.

195834, November 9, 2016 explained the first requisite in this
wise:

“Legal title denotes registered ownership, while equitable

title means beneficial ownership,38 meaning a title
derived through a valid contract or relation, and based on
recognized equitable principles; the right in the party, to
whom it belongs, to have the legal title transferred to
him.”

(2) there must be a cloud in such title;

(3) such cloud must be due to some instrument, record, claim,

encumbrance or proceeding which is apparently valid but is in truth
invalid, ineffective, voidable or unenforceable, and is prejudicial to the
plaintiff’s title; and

(4) plaintiff must return to the defendant all benefits he may have received
from the latter, or reimburse him for expenses that may have
redounded to his benefit.

 In Spouses Caldito v. Obado, G.R. No. 181596, January 30, 2017,

the Supreme Court enumerated the essential requisites pf an action to
quiet title:

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 “… an action to quiet title which has two indispensable
requisites, namely: (1) the plaintiff or complainant has a
legal or an equitable title to or interest in the real property
subject of the action; find (2) the deed, claim, encumbrance
or proceeding claimed to be casting cloud on his title must
be shown to be in fact invalid or inoperative despite its
prima facie appearance of validity or legal efficacy.”
 The following have been held to constitute clouds removable by
action:1
(1) A title or lien which appears to have been procured by fraud,
deceit, or misrepresentation
(2) A forged document
(3) Unauthorized or prohibited conveyances or encumbrances by
incapacitated person
(4) Taxes levied on exempt property, and apparently valid tax
sales and conveyances of such property
(5) A tax sale or a tax deed which is invalid by reason of the prior
payment of the taxes in question
(6) A contract of sale which has been forfeited or rescinded as a
result of the purchaser’s abandonment of the contract or by
his default in performances

ii. There are two actions being referred to in Article 4762 of the NCC:

(1)REMEDIAL—action to quiet title

(2)PREVENTIVE—action to remove a cloud or prevent a future
cloud or doubt

Action to quiet title

Action to
remove/prevent a
cloud on title
PURPOSE to put an end to troublesome to remove a possible
litigation in respect to the foundation for a future
property involved hostile claim
NATURE OF THE
remedial action involving p areventive action to

1
See Tolentino, Vol. II, pages 151 to 152.
2
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth
and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action
may be brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein.

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 ACTION present adverse claim prevent a future cloud
on the title

iii. Prescriptive Period:

(1) plaintiff is in possession – imprescriptible

Heirs of Tappa v. Heirs of Bacud, G.R. No. 187633, April 4, 2016:

… We have already ruled that the one-year prescriptive period

does not apply when the person seeking annulment of
title or reconveyance is in possession of the
property. This is because the action partakes of a
suit to quiet title, which is imprescriptible…

(2) plaintiff is not in possession – 10 (ordinary) or 30 years (extraordinary)

The Supreme Court in Republic v. Mangotara, G.R. Nos. 170375,

170505, 173355-56, 173401, 17356-64, 178779 & 178894, July
7, 2010 ruled:

An action for quieting of title to real property, such as Civil Case

No. 4452, is indubitably a real action.

Article 1141 of the Civil Code plainly provides that real actions
over immovables prescribe after thirty years…

Nevertheless, the Court notes that Article 1411 of the Civil Code
also clearly states that the 30-year prescriptive period for
real actions over immovables is without prejudice to what is

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 established for the acquisition of ownership and other real
rights by prescription. Thus, the Court must also look into the
acquisitive prescription periods of ownership and other real
rights.

Acquisitive prescription of dominion and real rights may be

ordinary or extraordinary.

Ordinary acquisitive prescription requires possession of things in

good faith and with just title for the time fixed by law. In the
case of ownership and other real rights over
immovable property, they are acquired by ordinary
prescription through possession of 10 years.

xxx

Since the ordinary acquisitive prescription period of 10 years

does not apply to LANDTRADE, then the Court turns its
attention to the extraordinary acquisitive prescription
period of 30 years set by Article 1137 of the Civil
Code…

iv. An action to quiet title does not apply to boundary disputes

Vda de Aviles et al., vs. Court of Appeals, G.R. No. 95748

November 21, 1996:

The facts presented unmistakably constitute a clear case of

boundary dispute, which is not cognizable in a special civil
action to quiet title.

xxx

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In fine, to avail of the remedy of quieting of title, a plaintiff must
show that there is an instrument, record, claim, encumbrance
or proceeding which constitutes or casts a cloud, doubt,
question or shadow upon the owner's title to or interest in real
property. Thus, petitioners have wholly misapprehended the
import of the foregoing rule by claiming that respondent Court
erred in holding that there was "no . . . evidence of any
muniment of title, proceeding, written contract, . . .", and that
there were, as a matter of fact, two such contracts, viz., (i) the
Agreement of Partition executed by private respondent and
his brothers (including the petitioners' father and predecessor-
in-interest), in which their respective shares in the inherited
property were agreed upon, and (ii) the Deed of Sale
evidencing the redemption by petitioner Anastacia Vda. de
Aviles of the subject property in a foreclosure sale. However,
these documents in no way constitute a cloud or cast a doubt
upon the title of petitioners. Rather, the uncertainty arises
from the parties' failure to situate and fix the boundary
between their respective properties.

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USUFRUCT

a. Characteristics

i. Definition

Moralidad vs. Spouses Pernes, G.R. No. 152809 August 3, 2006:

Usufruct is defined under Article 562 of the Civil Code in the

following wise:

ART. 562. Usufruct gives a right to enjoy the property of another

with the obligation of preserving its form and substance, unless
the title constituting it or the law otherwise provides.

Usufruct, in essence, is nothing else but simply allowing one to

enjoy another’s property. It is also defined as the right to enjoy
the property of another temporarily, including both the jus utendi
and the jus fruendi, with the owner retaining the jus disponendi
or the power to alienate the same.

ii. Requisites

There are two requisites of usufruct – essential and accidental. The

essential requisite is the right to enjoy the property of another, while
the accidental requisite is the obligation of preserving the form and
substance of such property. The latter is accidental because the title
constituting the usufruct or the law may provide it otherwise, as in the
case of abnormal usufruct.

iii. Characteristics

a. Real right
b. Of temporary duration
c. To derive all advantages from the thing due to normal exploitation
d. May be constituted on real or personal property, consumable or non-
consumable, tangible or intangible, the ownership of which is vested in
another
e. Transmissible

GR: Usufructuary is bound to preserve the form and substance of the

thing in usufruct.
ER: Abnormal usufruct whereby the law or the will of the parties may
allow the modification of the substance of the thing.

iv. How may usufruct be constituted?

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 A usufruct may be constituted: (1) by law; (2) by the will of private
persons expressed in acts inter vivos; (3) by the will of the private persons
expressed in a will; and (4) by prescription. (Article 563)

NHA vs. CA, G.R. No. 148830, April 13, 2005

 What is the title that constituted the usufruct in this case?

In the present case, Proclamation No. 1670 is the title constituting the
usufruct. Proclamation No. 1670 categorically states that the seven-
hectare area shall be determined "by future survey under the
administration of the Foundation subject to private rights if there be
any."

Moralidad vs. Spouses Pernes, G.R. No. 152809 August 3, 2006

 What title created the usufruct in this case?
It is undisputed that petitioner, in a document dated July 21, 1986, supra,
made known her intention to give respondents and her other kins the right to
use and to enjoy the fruits of her property. There can also be no quibbling
about the respondents being given the right "to build their own house" on the
property and to stay thereat "as long as they like." Paragraph #5 of the same
document earmarks "proceeds or income derived from the aforementioned
properties" for the petitioner’s "nearest kins who have less in life in greater
percentage and lesser percentage to those who are better of (sic) in
standing." The established facts undoubtedly gave respondents not only the
right to use the property but also granted them, among the petitioner’s other
kins, the right to enjoy the fruits thereof. We have no quarrel, therefore, with
the CA’s ruling that usufruct was constituted between petitioner and
respondents. It is thus pointless to discuss why there was no lease contract
between the parties.
xxx
The document executed by the petitioner dated July 21, 1986
constitutes the title creating, and sets forth the conditions of, the
usufruct. Paragraph #3 thereof states "[T]hat anyone of my kins may
enjoy the privilege to stay therein and may avail the use thereof.
Provided, however, that the same is not inimical to the purpose
thereof"

v. Distinguish Usufruct from Lease

Usufruct Lease
As to nature Always a real right Generally, a personal
of right right; it becomes a real
right only when
registered
As to the Person creating the Lessor may not be the

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 person usufruct should be the owner
constituting owner or his duly
it authorized agent
As toMay be created by law, Generally, created by
constitution by contract, by will of contract
the testator, or by
prescription
As to extent As a rule, usufruct Generally, refers to uses
covers all the fruits and only
all the uses and
benefits of the entire
property
As to repairs Pays for ordinary Lessee is not generally
and taxes repairs and taxes on under obligation to
the fruits undertake repairs or pay
taxes

vi. Rules governing a usufruct (Article 565)

1. The agreement of the parties or the title giving the usufruct

2. In case of deficiency, apply the provisions of the Civil Code

b. Classification

i. As to cause (Article 563)

a. Legal, or that provided by law, such as parental usufruct or the
usufruct of the parents over the property of their unemancipated
children
b. Voluntary, or that created by the will of private persons
c. Mixed, or by prescription

ii. Classifications under Article 564

a. Total or Partial, depending upon whether it is constituted on the
whole or part of a thing
b. Simple or Multiple, depending on whether it is constituted in favor or
one or several persons
c. Simultaneous or Successive, depending on whether they are to
enjoy it at the same time or one after another
d. Pure, conditional, and with a term, depending on whether it is
constituted with a condition or a term
e. Usufruct of thing or of right, depending upon its object

iii. Special Usufruct

a. of pension or income (Article 570)

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 NOTE: The things referred to in Article 570 are considered civil fruits
and shall be deemed to accrue proportionately to the naked owner and
usufructuary, for the time the usufruct lasts. (See Article 569)

b. of property owned in common (Article 582)

c. of cattle (livestock) (Article 591)
d. on vineyards and woodlands (Article 575-576)
e. on a right of action (Article 578)

 This special usufruct deals with the right to recover by court action
1. Real property
2. Personal property
3. Real right over personal property or real property

 What can the usufructuary demand from the owner?

1. Authority to bring the action
2. Proofs needed for the recovery

 Effect of a favorable judgment

1. Its naked ownership belongs to the owner
2. Its usufruct belongs to him

f. on mortgaged property (Article 600)

g. over the entire patrimony (Article 598)

h. over things which gradually deteriorate (Article 573)

NOTE: The law renders the usufructuary liable only when he or she
causes the deterioration by his fraud or negligence.

i. of consumable property (Article 574)

NOTE: The usufruct in this particular case is not upon the consumable
thing that is delivered to the usufructuary, but upon the sum
representing its value or upon the quantity of things of the same
quality.

This special kind of usufruct is in reality converted into a simple loan.

The usufructuary becomes the owner of the things in usufruct such as
money or a quantity of grains, while the grantor becomes the creditor
entitled to the return of the value or, of things of the same quantity
and quality.

c. Rights and obligations of usufructuary

i. Rights of a Usufructuary

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a. As to the thing and its fruits

1. To receive and benefit from the fruits (Article 566), subject to the rules
laid down in Article 567:

 Fruits pending at the beginning of the usufruct

- Belong to the usufructuary
- No necessity of refunding owner for expenses incurred
- But without prejudice to the right of third persons
 Fruits pending at the termination of the usufruct
- Belong to the owner
- But the owner must reimburse the usufructuary for ordinary
cultivation expenses and for the seeds and similar expenses,
from the proceeds of the fruits
- Also, rights of third persons shouldn’t be prejudiced

2. To enjoy any increase through accessions and servitudes (Article 571)

3. To the half of the hidden treasure that he accidentally finds (Article
566)

Note: The usufructuary, not being the landowner, is not entitled as

owner, but is entitled as finder—to ½ of the treasure as a rule, unless
there is a contrary agreement.

4. To lease the thing, generally, for the same or shorter period as the
usufruct (Article 572)

NOTE: The transfer or lease of the usufruct does not terminate the
relation of the usufructuary with the owner.

5. To improve the thing without altering its form and substance (Article
579)

 The usufructuary has the right to make the following— (1) Useful
improvements; and (2) Luxurious improvements
 But the usufructuary must not alter the form or substance of the
property held in usufruct

 Is the usufructuary entitled to refund for the improvements

that he/she has introduced?

NO. The usufructuary is not entitled to a refund but has the following
option:

1. Remove the improvements if no substantial damage to the

property in usufruct is caused; or
2. Set off the improvements against damages for which he may be
liable

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 In Moralidad vs. Spouses Pernes, the Supreme Court said:

By express provision of law, respondents, as usufructuary, do not

have the right to reimbursement for the improvements they may
have introduced on the property. xxx

Given the foregoing perspective, respondents will have to be

ordered to vacate the premises without any right of reimbursement.
If the rule on reimbursement or indemnity were otherwise, then the
usufructuary might, as an author pointed out, improve the owner out
of his property. The respondents may, however, remove or destroy
the improvements they may have introduced thereon without
damaging the petitioner’s property.

6. To remove improvements made by him if the same will not injure the
property (See Item No. 5)
7. Right to set-off the improvements he may have made on the property
against any damage to the same (Article 580)

 Right to set-off Rule

1. If the damage exceeds the value of the improvements, the
difference shall be paid by the usufructuary as indemnity
2. If the value of the improvements exceeds the damage:
a. If the improvements are of such nature that they can be
removed without injury to the thing in usufruct, the settlement
of the difference must be agreed upon by the parties.
b. If the improvements are of such nature that they cannot be
removed without injuring the thing in usufruct, the excess in
value accrues to the owner.

8. To retain the thing until he is reimbursed for advances for

extraordinary expenses and taxes on the capital (Article 612, cf.
Articles 594 and 597)
9. To collect reimbursements from the owner for indispensable
extraordinary repairs, taxes on the capital he advanced, and damages
caused to him. (Articles 594 and 597)

b. As to the usufruct itself (Article 572)

1. To mortgage the right of usufruct except parental usufruct

NOTE: The usufruct may pledge or mortgage the usufructuary right

but he or she cannot pledge or mortgage the thing itself because he
doesn’t own the thing.

2. To alienate the usufruct

NOTE: Only voluntary usufruct can be alienated.

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2. Obligations of a Usufructuary

i. Before exercising the usufruct (Article 583)

1. To make an inventory of the property; and

NOTE:
- The law does not require the concurrence of the owner
in the making of the inventory. It is enough that the
usufructuary notifies the owner.
- The expenses for the making of the inventory shall be
borne by the usufructuary because it is his/her
obligation to make the inventory.
- The inventory must contain the following:
a. The movables must be appraised
b. The condition of the immovables must be described
- The law provides no form

 When is inventory not required?

1. Where the owner waives the making of an inventory (See
Article 565)
2. Where the title constituting the usufruct exempts the
usufructuary from the making of an inventory (See Article
565)
3. When no one will be injured thereby (Article 585)

 What is the effect/consequence if the usufructuary

failed to make an inventory?
The law is silent. Such failure does not affect the rights of the
usufructuary to enjoy the property and its fruits. However, a
prima facie presumption arises that the property was received
in good condition, and that even if the usufructuary is already
in possession, he or she can still be required to make an
inventory.

2. To give a bond
 What are the exceptions from giving a bond?
1. When no one will be injured thereby (Article 585)
2. When there is waiver by the naked owner or there is
stipulation in a will or contract (See Article 565)
3. When the donor reserved the usufruct of the property
donated (Article 584)
4. Where there is parental usufruct (Article 584)
Exception to the exception: When the parent contracts a
second marriage
5. In cases of caucion juratoria where the usufructuary, being
unable to file the required bond or security, files a verified

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 petition in the proper court asking for the delivery of the
house and furniture necessary for himself and his family
without any bond or security. The usufructuary shall take
an oath to take care of the things and restore them. Note
however that the property cannot be alienated or
encumbered or leased because this would mean that the
usufructuary does not need it. (Article 587)

 What is the effect/consequence if the usufructuary

failed to post the required bond?

1. The naked owner shall have the following options:

a. demand that: (i) the immovables be placed under
administration, (ii) that the movables be sold, (iii)
that the public bonds, instruments of credit payable
to order or to bearer be converted into registered
certificates or deposited in a bank or public
institution, and (iv) that the capital or sums in cash
and the proceeds of the sale of the movable
property be invested in safe securities; OR
b. retain in his/her possession the property in
usufruct as administrator until the usufructuary
gives security or is excused from so doing (Article
586)

NOTE: IF the naked owner does not wish to exercise any of

the following options, he or she may deliver the property to
the usufructuary. The delivery of the property however cannot
be interpreted as a renunciation of the right to demand
security.

2. The usufructuary who does not possess the property may

alienate is right in the same form that he holds it, without
prejudice to the right of the transferee too give the required
security. But a lease cannot be executed by the
usufructuary.

 What is the effect/consequence if the usufructuary

complied with the posting of the required bond?

Upon giving of the security, the usufructuary will be entitled to

all the benefits accruing since the time when he/she should
have begun to receive them. The effect of the security is thus
retroactive. (Article 588)

ii. During the usufruct:

1. To take care of the property as a good father of a family (Article

589)

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 2. To replace with the young thereof animals that die or are lost in
certain cases when the usufruct is constituted on flock or herd of
livestock (Article 591)
3. To make ordinary repairs (Article 592)
 What are considered ordinary repairs?
There are two requisites for ordinary repairs: (1) that the
deterioration or defects arise from the natural use of the thing,
and (2) that the repairs are necessary for the preservation of
the thing.

4. To notify the owner of urgent extra-ordinary repairs (Article 593)

NOTE:
(1) Extraordinary repairs shall be borne by the owner.
(2) IF the need for the repairs is urgent, the law requires that the
usufructuary notifies the naked owner; if it is not urgent, there
is no obligation to give notice.
5. To permit works and improvements by the naked owner not
prejudicial to the usufruct (cf. Article 595)
6. To pay annual taxes and charges on the fruits (Article 596)
7. To pay legal interest on the amount paid for extraordinary repairs
from the usufructuary (Article 594)
8. To pay interest on taxes on capital paid by the naked owner (Article
597)
9. To pay debts when the usufruct is constituted on the whole
patrimony (Article 598)
10. To secure the naked owner’s or court’s approval to collect credits in
certain cases (Article 599)
11. To notify the owner of any prejudicial act committed by third
persons (Article 601)
12. To pay for court expenses and costs regarding usufruct. (Article
602)

a. At the termination of the usufruct:

1. To return the thing in usufruct to the owner unless there is a right of

retention
2. To pay legal interest on the amount spent by the owner for
extraordinary repairs or taxes on the capital
3. To indemnify the owner for any losses due to his negligence or of his
transferees

d. Rights of the naked owner

1. The naked owner during the usufruct can exercise all the right of ownership
consistent with the enjoyment of the thing by the usufructuary.

NOTE: Since the jus disponendi and the title reside with the naked owner, he
retains the right to alienate the property but he cannot alter its form and
substance or do anything prejudicial to the usufructuary. (Article 581)

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 2. Right to collect legal interest on the amount paid for extraordinary repairs from
the usufructuary (Article 594)
3. Right to collect legal interest amount paid for on taxes on capital from the
usufructuary (Article 597)
4. Right to construct any works and make any improvements of which the
immovable in usufruct is susceptible, or make new plantings thereon if it be
rural, provided that such acts do not cause a diminution in the value of the
usufruct or prejudice the right of the usufructuary. (Article 595)

e. Extinction, termination, and extinguishment

 What are the various modes of extinguishing usufruct?
ART. 603. Usufruct is extinguished:
i. By the death of the usufructuary, unless a contrary intention clearly
appears;
ii. By expiration of the period for which it was constituted, or by
the fulfillment of any resolutory condition provided in the title
creating the usufruct;
iii. By merger of the usufruct and ownership in the same person;
iv. By renunciation of the usufructuary;
v. By the total loss of the thing in usufruct;
vi. By the termination of the right of the person constituting the
usufruct;
vii. By prescription.

 What caused the extinguishment of usufruct in Moralidad vs.

Spouses Pernes,?
In fine, the occurrence of any of the following: the loss of the atmosphere of
cooperation, the bickering or the cessation of harmonious relationship
between/among kin constitutes a resolutory condition which, by express wish
of the petitioner, extinguishes the usufruct.
From the pleadings submitted by the parties, it is indubitable that there were
indeed facts and circumstances whereby the subject usufruct may be
deemed terminated or extinguished by the occurrence of the
resolutory conditions provided for in the title creating the usufruct,
namely, the document adverted to which the petitioner executed on July 21,
1986.
xxx
Thus, the Court rules that the continuing animosity between the petitioner
and the Pernes family and the violence and humiliation she was made to
endure, despite her advanced age and frail condition, are enough factual
bases to consider the usufruct as having been terminated.

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 Is bad use of thing under usufruct a ground for the termination of the
contract of usufruct?

Art. 610. A usufruct is not extinguished by bad use of the thing in usufruct;
but if the abuse should cause considerable injury to the owner, the latter may
demand that the thing be delivered to him, binding himself to pay annually to
the usufructuary the net proceeds of the same, after deducting the expenses
and the compensation which may be allowed him for its administration. (520)

 If the property under usufruct was expropriated by the Government,

will it result in the termination of the contract of usufruct?

Art. 609. Should the thing in usufruct be expropriated for public use, the
owner shall be obliged either to replace it with another thing of the same value
and of similar conditions, or to pay the usufructuary the legal interest on the
amount of the indemnity for the whole period of the usufruct. If the owner
chooses the latter alternative, he shall give security for the payment of the
interest. (519)

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