Notes in Property: Faqs, Doctrines and Cases

REVIEWER IN PROPERTY 2011 (Compiled from the Books of Justice Jurado and Atty.
Rabuya and recent

Supreme Court cases)
NOTES IN PROPERTY: FAQs, DOCTRINES and CASES 1
1. Why is it necessary to determine the difference between movables and immovables?
a. Acquisitive prescription – movable properties are acquired through 4 or 8 years

of prescription. Immovable properties, on the other hand, are acquired through
10 or 30 years of prescription
b. Object of accessory contracts – In pledge and chattel mortgage, the subject
matter is personal property; while in real estate mortgage, the subject matter is
real property
c. Formal Requirements in donation – personal property with value exceeding
5,000 must be with acceptance in writing, otherwise, donation is void; Donation
and the acceptance of real property must always be embod ied in a public
instrument, otherwise, the donation is void.
d. Extrajudicial deposit – only personal property may be the subject of an
extrajudicial deposit
e. Criminal Law – only personal property can be the object of the crimes of theft
and robbery; while the object of the crime of usurpation of real property is real
property
f. Procedural law – If the action affects title to or possession of real property or
any interest therein referred to as a real action, its venue is in the place where
the property is situated; otherwise, the venue of the action is either the
residence of the plaintiff, or defendant at the option of the plaintiff.
2. What are the different classes of immovables?
a. Immovable by nature – those which cannot be moved from place to place, such
as those mentioned in Art. 415 (1) [with respect to lands and roads] and (8)
Buildings or lands or essentially immovable by nature. Buildings, whether built

on a land owned by another are still considered real property by nature
b. Immovables by incorporation – those which are attached to an immovable in

usch a manner as to for an integral part thereof such as those in Art. 415 (1)
[except land and roads], (2), (3), and (4) of Art. 415.
Constructed Buildings are always real property or immovable. But by agreement

of the parties (such agreement is binding ONLY between th e parties), when a
Building is the subject of a chattel mortgage, such building may be treated as a
personal property. Hence, a chattel mortgage is constituted over a building will
not necessarily render the chattel mortgage as void.
Disclaimer: The following are merely compiled from the books of Justice Desiderio P. Jurado and Atty.
Elmer Rabuya, and Recent Jurisprudence of the Supreme Court and the non-referral to the specific
annotations thereon should not be construed as an act of plagiarism. This is NOT FOR SALE. This is
only or ACADEMIC PURPOSES.
REVIEWER IN PROPERTY 2011 (Compiled from the Books of Justice Jurado and Atty. Rabuya and recent
Trees, plants and flowers are immovable, having been “planted” in the garden
area, under Art. 415(2) which provides that “Trees, plants, and growing fruits 2
while they are attached to the land or form an integral par t of the immovable”
are likewise immovable property.
Living quarters, if attached to the immovable platform with permanence,

becomes an immovable as well. Permanence means they cannot be separated
without destroying the platform or the quarters (Art. 415[3], NCC). On the other
hand, if the attachment is not permanent, or is merely superimposed on the
platform, then the living quarters are movable property. (subject to differing
opinions)
c. Immovables by destination – those which are placed in an immovable for the

use, exploitation or perfection of such immovable, such as those mentioned in
Nos. 4,5,6,7 and 9 of Art. 415.
Although the general rule is that once machineries are placed in factories as
essential and principal elements in an industry or business such machineries are
immobilized by destination and are considered as immovable, the machineries
may, nevertheless be considered personal property by express agreement of
the parties.
Case in point: Serg’s Product Inc. vs. PCI Leasing and Finance, Inc. (338 SCRA
504, 22 August 2000)
The issue in this case is Whether the machineries which are directly used in the
regular course of business, when placed in the factory, are considered
immovable, and therefore cannot be a proper subject of the Writ of Seizure
(search warrant)
ANS: Generally, such machineries are immovables by destination. However,
considering that there was an express agreement under the Lease Contract that
the subject machineries placed in the factory are deemed personal property,
petitioners are now estopped from the denying the characterization of the
subject machines as personal property.
It should be stressed, however, that the Court’s ruling – that the machines
should be deemed personal property pursuant to the Lease Agreement—is good
only insofar as the contracting parties are concerned. Hence, while the parties
are bound by the Lease Agreement, third persons acting in good faith are not
affected by its stipulation characterizing the subject machin ery as personal.
Case in point: Fels Energy, Inc. vs. The Province of Batangas, G.R. No. 168557, 16
February 2007
A facility located on a floating platform made of wood and metal, upon which
was permanently attached the heavy equipment for the petroleum operations
and living quarters of the crew; containing a garden area, where trees, plants
and flowers were painted; tethered to a ship, the MV101, which was anchored to
seabed is an IMMOVABLE property by destination. Art. 415(9) of the NCC
considers as real property “docks” and structures which , though floating, are
intended by their nature and object to remain at a fixed place on a river, lake or 3
coasts.”
d. Immovables by analogy – those which are considered immovables by operation

of law such as those mentioned under Art. 415(10).
Except for rights arising from contracts for public works which are classified as
real property under paragraph 10 of Article 415, all personal rights will fall under
personal property regardless of the subject matter thereof.
With respect to real rights, however, the classification thereof will depend on its
subject matter. If the subject matter of the real right is a real property, then
such real right is a real property. This is clear from paragraph 10 of Article 415
which classifies as real property “real rights over immovable property”. Thus a
real estate mortgage is a real right and a real property by itself (MBTC vs. Alejo,
364 SCRA 812). On the other hand, if the subject matter of the real right is a
personal property, as in the case of chattel mortgage, such real right is classified
as personal property.
3. What is the effect and legal consequences if a chattel mortgage is constituted over
an immovable property?
Ans: As between the parties who constituted chattel mortgage, the said chattel
mortgage is valid. However, as to 3 rd parties validly claiming right over the property
subject of the chattel mortgage, such chattel mortgage is void.
Rationale: Under the Chattel Mortgage Law, only chattels or personalty may be the
object of a contract of chattel mortgage. A building is certainly not a chattel or
personalty. It is realty by incorporation. Therefore, it cannot be the object of a
contract of chattel mortgage. True, in some cases decided by the SC, it has been
held that the contract of chattel mortgage, applying the principle of estoppel, is
binding. However, this rule can be applied only to a situation or controversy
involving the contracting parties only.
4. Machineries placed by a person on the land owned by another: movable or

immovable?
Ans: It depends.
Case in point: Davao Sawmill Co. vs. Castillo (61 Phil 709) : When machineries were
installed by a Lessee on the land of the Lessor, such machineries have not become
immovables. Under No. 6 of Art. 415 of NCC, such machineries should be been
installed by the owner of the tenement, with the intention of making use of them
for a certain industry or works which is being carried on in the building or land, and
should tend directly to meet the needs of the said industry o r works. So in a case
where the lessee of a building established a shoe factory in the building and 4
installed machineries therein, such machineries are movables. In order that
machineries can be classified as immovables within the meaning of No. 5 of Art. 415
of the NCC, it is essential that the following requisites concur:
a. The machinery must be placed by the owner of the tenement
b. An industry or works must be carried on in the tenement
c. The machinery must be intended for such industry or works;
d. The machinery must tend directly to meet the needs of such industry or works
Case in point: Berkenkotter vs. Cu Unjieng (61 Phil. 663): Machineries have become
immovables by reason of the fact that the company installed the machineries in the
central for the use of the industry which is being carried on in the said central. They
have, therefore become immobilized because of their purpose. In other words, they
tend directly to meet the needs of the industry which is being carried on in the
central and in which the Company which installed them is engaged. And it cannot be
said that their incorporation is not permanent in character, because, as essential
and principal elements of a sugar central, without them the central would be unable
to function or carry on the industrial purpose for which it was established.
5. What are the tests which must be applied in order to determine whether an object
is movable or not?
a. Whether the object can be transported from one place to another place;
b. Whether the change of location can take place without injury to the immovable
to which it may be attached; and
c. Whether it is not included in the enumeration found in Art. 415 of the NCC
6. Public lands vs. Government Lands
Public lands and public domain are synonymous --- they refer only to government
land which are opened to private appropriation and settlement by homestead and
other similar acts
Government lands – wider coverage; includes NOT ONLY public lands, but also those
other lands already reserved for or devoted to public use or subject to private right
Property intended for public service: government buildings, military camps, navy
ships, Roponggi property
Property for Development of National Wealth: mineral lands, forest or timber lands
and other natural resources. Sec.2 of Art. XII of the 1987 Philippine Constitution
states that natural resources are not available for alienation but the State may enter
into co-production, joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least 60% of whose capital is owned by
such citizens, in connection with the exploration, development and utilization of the
same. Examples would be fishpond which are owned by the State and may not be 5
alienated but only leased (Menchavez vs. Teves, Jr., 449 SCRA 380, 2005). Also,
watershed reservation and submerged lands are part of the State’s natural resource
and cannot therefore be alienated.
Section 3, Art. XII of the Constitution allows agricultural lands to be alien ated.
Agriculture public lands are classified as patrimonial property of the State only if
they are made available for alienation or disposition.
Patrimonial Property of the State is not subject to acquisitive prescription:

While patrimonial property is considered as a property of the State in what may be
called the private sense, nonetheless, a patrimonial property of the State is not
subject to acquisitive prescription, unless the law expressly provides. Thus, in
Alonso v. Cebu Country Club, Inc., it was held that “possession of patrimonial
property of the Government, whether spanning decades or centuries, cannot ipso
facto ripen into ownership.”
Conversion of property of public dominion to patrimonial must be through an

affirmative act, either on the part of the executive or the legislative to reclassify
property of the public dominion into patrimonial. Conversion cannot be inferred
from the non-use alone of the property for the purpose for which it is intended.
7. Accretions
Art. 457 and Republic vs. CA, 132 SCRA 514 (1984) – Accretions on river banks,
belong to the owner of the lands adjoining the banks provided that the deposit is
due to the effects of the current of the river.
Tiongco vs. Director of Lands 16 C.A. Rep. 211 – those which attached to the owner
of lands adjoining the banks as a consequence direct and deliberate intervention of
man such as man-made accretions, are part of the public domain
DE FACTO EMINENT DOMAIN – whenever the sea advances and private properties
are permanently invaded by the waves, the properties so invaded become part of
the shore and they then pass to the public domain. Consequently, it is not subject to
indemnity by the State. Accretion on shores/sea are not the same as accretion on
lakes. (Law and Cases: Art. 4 of the Spanish Law of Waters of 1866; Heirs of Emilano
Navarro vs. IAC, 268 SCRA 74; Ignacio vs. Director of Lands and Valeriano 108 Phil.
225, 1960)
8. Doctrine of Self-Help
6
Art. 429 includes as one of the rights of the owner of the property to defend his
property. This is referred to as the Doctrine of Self-Help provided that there still
exists a threatened physical invasion and there is a need to repel such actual
physical invasion. In such case, an owner is authorized to use force during the actual
act of invasion. The employment of force in defense of his property must be
reasonable. But when the property has been fully possessed by another, force
cannot be used anymore. The owner, to recover possession, must resort to proper
judicial means.
9. Doctrine of State of Necessity
This is the exception to the Doctrine of Self-Help:

In the enjoyment of his property, the owner cannot prohibit the interference by
another if the same is necessary to avert an imminent danger and the threa tened
damage, compared to the damage arising to the owner from the interference is
much greater (Art. 432, NCC). Thus, if the doctrine of state of necessity applies, the
owner or the lawful possessor may not resort to the doctrine of self -help. Reason:
the invasion or usurpation of his property is not unlawful.
Requisites of state of necessity:

a. There must be a situation of grave peril, an actual or imminent danger, either
upon the person of the actor or a third person or their property
b. The interference is necessary to avert such danger
c. The threatened damage, compared to the damage arising to the owner from the
interference, is much greater
d. The state of necessity must not be brought about by intentional provocation of
the party invoking the same
10. Actions for recovery of possession of real property:
a. Accion Reivindicatoria – action for the recovery of the exercise of ownership,

particularly possession as an attribute or incident of ownership; basis is the
ownership which has not yet been lost
Requisites: must prove the identity of the land claimed and claimant’s title
thereto; the claimant must rely on the strength of his title and not on the
weakness of the defendant’s title.
b. Accion Publiciana – plenary action for the recovery of the better right of
possession (juridical possession). It is also called plenaria de posesion which is
used to refer to an ejectment suit filed after the expiration of one year from the
accrual of the cause of action or from the unlawful withholding of possession of
the realty. (Cruz vs. Torres, 316 SCRA 193)
c. Accion interdictal – either forcible entry or unlawful detainer; for the purpose of
recovery of material or physical possession
Distinctions: 7
Accion interdictal – possession de facto
Accion publiciana – who has better right of possession or real right of possession;
possession de jure (jus possessionis)
11. Building, Planting, or sowing with one’s own materials on the land of another
Four scenarios
a. Land owner (LO) good faith  builder planter or sower and owner of materials
(BPS-OM) good faith = Art. 448 of NCC applies
b. If LO in good faith  BPS-OM in bad faith = Art. 449 to 452 of NCC applies
c. If LO is in bad faith  BPS-OM in bad faith = Art. 448 of the NCC, in relation to
Art. 453 applies
d. If LO in bad faith  BPS-OM in good faith = Art. 447 in relation to Art. 454 of NCC
applies
12. Correlations:
 As to validity of sale of property whether land, buildings, house, machinery,
correlate the provisions on property to Art. 1403 (unenforceability of
contracts); those relating to special contracts and general provisions on
contracts
 For conjugal properties, if sale is made only by one of the spouses, correlate
it to Art. 96 and Art. 124 of the Family Code.
 Correlate Rule 63 of the Rules of Court in cases involving Quieting of Title

under Art. 476. Second paragraph of Sec. 1 of Rule 63 provides that a Petition
for Declaratory relief may be availed of as a remedy involving a n action for
the reformation of an instrument, to quiet title to real property or remove
clouds therefrom, or to consolidate ownership under Article 1607 of the Civil
Code
Applicable case: Mario Siochi vs. Alfredo Gozon, et al./Inter -Dimensional

Realty, Inc. Vs. Mario Siochi, et al., G.R. No. 169900/G.R. No. 169977, March
18, 2010
13. NEW CASES IN PROPERTY
Topic: Builder in Good Faith; and who has better right over the subject property sold
to two persons (Filomena R. Benedicto vs. Antonio Villaflores, G.R. No. 185020, 6
October 2010).
FACTS:
Maria Villflores - owner of Lot in Bulacan. In 1980, Maria sold a portion of the said lot
to her nephew, respondent Antonio Villaflores, latter took possession and constructed 8
a house thereon. 12 years later, Maria executed in favor of Antonio a Kasulatan ng
Bilihang Tuluyan covering the entire Lot 2-A. However, Antonio did not register the sale
or pay the real property taxes for the subject land.
31 August 1994, Maria sold the same lot to Filomena with a deed of sale. Filomena
registered the sale with the Registry of Deeds on 6 September 1994. Conseuqently, t he
TCT under Maria's name was cancelled and new one was issued to Filomena. Since then,
Filomena paid the real property taxes for the subject parcel of land.
On 28 September 2000, Filomena filed a case for Accion Publiciana with Cancellation of
Notice of Adverse Claim, Damages and Attorney's Fees against Antonio. She alleged
that she acquired the lot in 1994 and that at the time of the sale, she was not aware
that Antonio had any claim or interest over the subject property.
Antonio traversed the complaint, asserting absolute ownership over Lot 2-A. He
alleged that he purchased the subject property from Maria in 1980; and that he took
possession of the same and constructed his house thereon. He came to know of the
sale in favor of Filomena only in 2000 when the latter demanded that he vacate the
property. He averred that Filomena was aware of the sale; hence, the subsequent sale
in favor of Filomena was rescissible, fraudulent, fictitious, or simulated.
After trial, the RTC rendered a decision sustaining Filomena’s ownership. According to
the RTC, Filomena was the one who registered the sale in good faith; as such, she has
better right than Antonio. It rejected Antonio’s allegation of bad faith on the part of
Filomena because no sufficient evidence was adduced to prove it. Likewise, the RTC
found Antonio’s evidence of ownership questionable. Nevertheless, it declared
Antonio a builder in good faith.
Both parties appealed to the CA. Filomena assailed theOrder declaring Antonio as a
builder in good faith while Antonio assalied the Order rendering Filomena as having a
better right over the property.
CA affirmed RTC's decision. Hence, the present petition for review before the Supreme
Court.
The question as to whether a possessor/builder is in good faith or b ad faith is a factual

matter that cannot be raised in a petition for Certiorari. Moreover, it is not disputed
that the construction of Antonio’s house was undertaken long before the sale in favor
of Filomena; that when Filomena bought the property from Mar ia, Antonio’s house
which he used as residence had already been erected on the property.
As explained by CA, Antonio claims not being aware of any flaw in his title. He believed
being the owner of the subject premises on account of the Deed of Sale there of in his
favor despite his inability to register the same. The improvement was, in fact,
introduced by Antonio prior to Filomena’s purchase of the land. x x x.
Thus, the Court sustained the finding that Antonio is a builder in good faith.
Under Article 448, a landowner is given the option to either appropriate the
improvement as his own upon payment of the proper amount of indemnity, or sell the
land to the possessor in good faith. Relatedly, Article 546 provides that a builder in
good faith is entitled to full reimbursement for all the necessary and useful expenses
incurred; it also gives him right of retention until full reimbursement is made. 9
The pronouncement of this Court in Pecson v. CA, which was reiterated in Tuatis v. Escol,
is instructive, viz.:
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 [40 Phil. 717 (1920)] 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. A contrary ruling would unjustly enrich the
private respondents who would otherwise be allowed to acquire a highly valued
income-yielding four-unit apartment building for a measly amount. Consequently, the
parties should therefore be allowed to adduce evidence on the present market value of
the apartment building upon which the trial court should base its finding as to the
amount of reimbursement to be paid by the landowner.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is
AFFIRMED.
‫امئاد كعم هللا‬

Topic: On Mortgage of real property:
Heirs of Estelita Burgos-Lipat namely: Alan B. Lipat and Alfredo B. Lipat, Jr. vs. Heirs of
Eugenio D. Trinidad namely: Asuncion R. Trinidad, et al., G.R. No. 185644, March 2, 2010
The one-year redemption period applied by the CA is the rule that generally applies to
foreclosure of mortgage by a bank. The period of redemption is not tolled by the filing
of a complaint or petition for annulment of the mortgage and the foreclosure sale
conducted pursuant to the said mortgage. However, considering the exceptional
circumstances surrounding this case, we will not apply the rule in this instance pro hac
vice. In Lipat, this Court upheld the RTC decision giving petitioners five months and 17
days from the finality of the trial court’s decision to redeem their foreclosed property.
Lipat, already final and executory, has therefore become the law of the case between
the parties, including their heirs who are petitioners and respondents in this c ase.
Consequently, petitioners had five months and 17 days from the finality of Lipat to
exercise their right of redemption, even though this period was beyond one year from
the date of registration of the sale. Thus, the CA erred (and even committed a gr ave
abuse of discretion) when it insisted on a contrary ruling. The CA had no power to
reverse this Court’s final and executory judgment. The CA overstepped its authority
when it held that the right of redemption had already expired one year after the date of
the registration of the certificate of sale. Like all other courts in our judicial system, the
CA must take its bearings from the rulings and decisions of this Court. Nevertheless, we
note that the amount tendered by petitioners to redeem their foreclo sed property was 10
determined by the sheriff at the rate of one percent per month for only one year.
Section 78 of the General Banking Act requires payment of the amount fixed by the
court in the order of execution, with interest thereon at the rate specifie d in the
mortgage contract, and all the costs and other judicial expenses incurred by the bank
or institution concerned by reason of the execution and sale and as a result of the
custody of said property less the income received from the property. The rate of
interest specified in the mortgage contract shall be applied for the one -year period
reckoned from the date of registration of the certificate of sale in accordance with the
General Banking Act. However, since petitioners effectively had more than one year to
exercise the right of redemption, justice, fairness and equity require that they pay 12%
p.a. interest beyond the one-year period up to June 16, 2004 when Partas consigned the
redemption price with the RTC.
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REVIEWER IN PROPERTY 2011 (Compiled from the Books of Justice Jurado and Atty.

Rabuya and recent

NOTES IN PROPERTY: FAQs, DOCTRINES and CASES 1

1. Why is it necessary to determine the difference between movables and immovables?

a. Acquisitive prescription – movable properties are acquired through 4 or 8 years

2. What are the different classes of immovables?

Buildings or lands or essentially immovable by nature. Buildings, whether built

b. Immovables by incorporation – those which are attached to an immovable in

Constructed Buildings are always real property or immovable. But by agreement

Living quarters, if attached to the immovable platform with permanence,

c. Immovables by destination – those which are placed in an immovable for the

d. Immovables by analogy – those which are considered immovables by operation

4. Machineries placed by a person on the land owned by another: movable or

6. Public lands vs. Government Lands

Patrimonial Property of the State is not subject to acquisitive prescription:

Conversion of property of public dominion to patrimonial must be through an

9. Doctrine of State of Necessity

This is the exception to the Doctrine of Self-Help:

Requisites of state of necessity:

10. Actions for recovery of possession of real property:

a. Accion Reivindicatoria – action for the recovery of the exercise of ownership,

 Correlate Rule 63 of the Rules of Court in cases involving Quieting of Title

Applicable case: Mario Siochi vs. Alfredo Gozon, et al./Inter -Dimensional

13. NEW CASES IN PROPERTY

The question as to whether a possessor/builder is in good faith or b ad faith is a factual

‫امئاد كعم هللا‬

‫امئاد كعم هللا‬

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