Usufruct Case Synthesis

Capalar | Dobrea | Miraflor | Nares

Group 2
Municipality of Paoay v. Manaois, 86 Phil 629
Whether or not municipal waters or its usufruct may be levied upon and subject to execution.
• NO. Properties for public use held by municipal corporation are not subject to levy and execution. Even
public revenues of municipal corporations destined for the expenses of the municipality are also exempt from
the execution. The reason behind this is that they are held in trust for the people, intended and used for the
accomplishment of the purposes  for which municipal corporation are created, and that to subject said
properties and public funds to execution would materially impeded, even defeat and in some instances
destroy said purpose.
• Property however, which is patrimonial, and which is held by municipality in its proprietary capacity is
treated as the private asset of the town and may be levied upon and sold under an ordinary execution. The
same rules applies to municipal funds derived from patrimonial properties, for instance, it has been held that
shares of stocks held by municipal corporations are subject to execution.
• All this only goes to prove that the municipality of Paoay is not holding this usufruct or right of
fishery in a permanent or absolute manner so as to enable it to dispose of it or to allow it to be
taken away from it as its property through execution.
Fabie v. David, 75 Phil 536
Whether or not a usufructuary has the right to occupy the premises
under usufruct.
• Yes. As a corollary to her right to all the rent, to choose the tenant, and to fix the amount of the rent,
she necessarily has the right to choose herself as the tenant thereof, if she wishes to; and, as she
fulfills her obligation to pay the taxes and insure and conserve the property properly, the owner has
no legitimate cause to complain. As Judge Nable of the municipal court said in his decision, "the
pretension that the plaintiff, being a mere usufructuary of the rents, cannot occupy the property, is
illogical if it be taken into account that that could not have been the intention of the testatrix."
Orozco v. Araneta, 90 Phil 399
Whether or not the stock dividend is part of the capital which should be
preserved in favor of the owners or an income of fruits of the capital which
should be given to and enjoyed by the life usufructuary.
• NO, Court ruled that a dividend, whether in the form of cash or stock, is income and,
consequently, should go to the usufructuary, taking into consideration that a stock
dividend as well as a cash dividend can be declared only out of profits of the
corporation, for it were declared out of the capital it would be a serious violation of the
law.
Bachrach v. Seifer, 97 Phil 483
Whether or not a usufructuary is entitled to stock dividend.
• Yes, the court ruled any dividend, therefore, whether cash or stock, represents surplus profits. The
Civil Code provides that the usufructuary shall be entitled to receive all the natural, industrial, and
civil fruits of the property in usufruct. And articles 474 and 475 (now Articles 569 and 570) provide
as follows:
• ART. 474. Civil fruits are deemed to accrue day by day and belong to the usufructuary in proportion
to the time the usufruct may last.
• ART. 475. When a usufruct is created on the right to receive an income or periodical revenue, either
in money or fruits, or the interest on bonds or securities payable to bearer, each matured payment
shall be considered as the proceeds or fruits such right. When it consists of the enjoyment of the
benefits arising from an interest in an industrial or commercial enterprise, the profits of which are not
distributed at fixed periods, such profits shall have the same consideration. In either case they shall
be distributed as civil fruits and shall be applied in accordance with the rules prescribed by the next
preceding article.