I. Classification of Property

A. Immovable and Movable

1.

Article 414. All things which are or maybe the object of appropriation areconsidered either:

(1) Immovable or real property; or

(2) Movable or personal property.

Parties to a contract may by agreementtreat as personal property that which bynature would be real property.

Standard Oil Company v. Jaramillo

Building was mortgaged to SOC. SOC soughtto compel Jaramillo, register of deeds, toregister a CHATTEL mortgage issued in SOC’sfavor. The objects of the document were theleasehold rights over a certain property andthe house constructed over the sameproperty.

Jaramillo refused to register the documentbecause the objects did not appear to bepersonal property under the Chattel MortgageLaw. SOC filed for mandamus.

HELD: The document should be registered. Itis undeniable that the parties to a contractmay by agreement treat as personal propertythat which by nature would be real property.The register’s duty is MINISTERIAL, he cannot determine the nature of the documentsought to be registered.

2.

Article 415. The following are immovableproperty:

(1) Land, buildings, roads and constructions ofall kinds adhered to the soil;

(2) Trees, plants, and growing fruits, whilethey are attached to the land or form anintegral part of an immovable;

(3) Everything attached to an immovable in afixed manner, in such a way that it cannotbe separated therefrom without breakingthe material or deterioration of the object(incorporation);

(4) Statues, reliefs, paintings, or other objectsfor use or ornamentation, placed inbuildings or on lands by the owner of theimmovable in such a manner that it reveals

the intention to attach them permanently tothe tenements (destination);

(5) Machinery, receptacles, instruments orimplements intended by the owner of thetenement for an industry or works whichmay be carried on in a building or on apiece of land, and which tend directly tomeet the needs of the said industry orworks (destination);

(6) Animal houses, pigeon-houses, beehives,fish ponds or breeding places of similarnature, in case their owner has placed themor preserves them with the intention tohave them permanently attached to theland, and forming a permanent part of it;the animals in these places are included(destination);

(7) Fertilizer actually used on a piece of land;

(8) Mines, quarries, and slag dumps, while thematter thereof forms part of the bed, andwaters either running or stagnant;

(9) Docks and structures which, thoughtfloating, are intended by their nature andobject to remain at a fixed place on a river,lake, or coast;

(10) Contracts for public works, and servitudesand other real rights over immovableproperty.

Does not define, only enumerates.

Academic Classification of Immovables (NIDA)

1. Nature (trees and plants, land)

2. Incorporation (buildings)

3. Destination or purpose (machineryplaced by owner on tenement for directuse of industry or works to be carriedon therein)

4. Analogy (like the right of usufruct,public works, servitudes)

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If a building is not adhered to the soil and thereis no intent of permanency, it is personalproperty.

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(4) 1. movable property must be placed in animmovable property

2. by the owner of the immovable

3. the intention must be to attach itpermanently (destination)

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Provision in lease that improvements madeshall belong to the lessor upon termination ofthe lease – air-conditioner installed by lessee.Will AC be turned over to the lessor? Yes.Lessee acted as an agent of the lessor.

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(5) Requisites

A. Placed by the owner;

B. Intended for an industry or workscarried on in building or land;

C. Machines must tend to directly meetthe needs of the industry;

D. Machines must be essential andprincipal elements in the industry; notmere incidentals.

Ex. Sewing machines placed in own houseintended to be used as a garments factory.Immovable? Yes. Machines placed by owner;for industry…; tend directly to meet…;essential…

If other person’s house, immovable

Effect of separation: If temporarily taken away,still immovable.

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Sale of real property in the CM Registrycannot bind third persons in good faith.

Leung Yee v. Strong Machinery

Agricola purchased rice-cleaning machineryfrom Strong and executed a chattel mortgageover the machinery and the building in whichit was installed. Agricola defaulted and Strongpurchased the building at auction. Themortgage and sale were registered in the CMregistry.

Agricola later sold the land to Strong, the salebeing in an unregistered public document.

It turns out that the building was also REM toLeung Yee to secure payment of aconstruction contract. When Agricoladefaulted, Leung Yee purchased the buildingat a sheriff’s sale (this sale took place afterthe building was bought by Strong).

Leung Yee brought suit to recover possessionof the building.

HELD: Strong has a better right over thebuilding. This is true only because Leung Yeeknew of the chattel mortgage to Strong whenhe purchased the building; he was a buyer in

bad faith. The sale of the building cannot bindthird persons in good faith because it was thesale of real property registered not in theRegistry of Real Property but the CM Registry.

A building may be validly mortgagedseparately from the land upon which it isbuilt.

Prudential Bank v. Judge Panis

Owners of a building on leased land obtained2 loan from the bank, the loans secured byREMs over the building. The owners defaulted,prompting the foreclosure of the mortgage.

The respondent court ruled that the REMswere void, holding that a building may not bemortgaged separately from the land on whichit is built.

HELD: The 1st REM, executed before title ofland was transferred to the mortgagor, isvalid. Article 415 mentions ‘buildings’separate from land; this means that thebuilding by itself is an immovable and may bethe subject of a REM.

The 2nd REM, executed after title wastransferred, is void for being violative of thePublic Land Act.

To be considered as real property bydestination, the machinery etc. must be(1) essential and principal elements ofthe industry and (2) the industry must becarried out in a building or piece of land

Mindanao Bus Co. v. City Assessor

The City Assessor sought to impose realty taxon certain MAINTENANCE AND REPAIREQUIPMENT of MBC.

MBC opposed, contending that the items werenot real property; the items in question aremovable.

HELD: The items are personal property. Theyare not immobilized by destination or purposeas contended by the City Assessor. To beconsidered as real property by destination,they must be (1) essential and principalelements of the industry and (2) the industrymust be carried out in a building or piece ofland.

In this case, the items are only incidentals tothe transport business and the business is

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carried on not in a building or piece of landbut around the streets of Mindanao.

A stipulation in the lease agreement totreat the real property as personal isbinding upon the parties. The parties areestopped from claiming otherwise.

Serg’s Products v. PCI Leasing

PCI filed a complaint for a sum of money andan application for a writ of replevin on thechocolate manufacturing equipment of Serg’s.Serg’s claims property is real and not subjectto a writ of seizure.

HELD: The property is real under Article 415BUT it was stipulated in the lease agreementthat they would be treated as personal. Serg’sis ESTOPPED from claiming that they are realin character.

Steel electric towers are personalproperty provided they can be removedwithout substantial breakage ordeterioration.

Board of Assessment Appeals v. Meralco

The City Assessor sought to impose realty taxon steel towers of MERALCO. The taxes werepaid under protest, MERALCO contending thatthe towers were exempt from taxation andthat they were personal and not real property.

HELD: The towers are personal property.They are not buildings adhered to the soil(415-1); they are not attached to animmovable in a fixed manner and they can beseparated without substantial damage ordeterioration (3) and they are notmachineries intended for works on the land(5).

3.

Article 416. The following things aredeemed to be personal property:

(1) Those movables susceptible ofappropriation which are not included in thepreceding article;

(2) Real property which by any specialprovision of law is considered as personalty;

(3) Forces of nature which are brought undercontrol by science; and

(4) In general, all things which can betransported from place to place withoutimpairment of the real property to whichthey are fixed.

For purposes of the Chattel MortgageLaw, ungathered products have thenature of personal property and may beattached and executed upon.

Sibal v. Valdez

Sibal’s sugarcane crops were attached andsold to Valdez in order to satisfy a judgmentdebt. The lot on which the crops were locatedhad been previously attached and sold toanother creditor, Macondray. Valdez laterpurchased the land from Macondray.

Sibal sought to redeem the sugarcane fromValdez on the assumption that it was realproperty (growing fruits attached to the land).

Plaintiff contends that the sugarcane ispersonal property and not subject toredemption.

HELD: Although the sugarcane may beconsidered as growing fruits and is ordinarilyreal property, for the purposes of the ChattelMortgage Law, the crops must be regarded aspersonal property. This is because the right tothe growing crops given to the defendantmobilized the crops by anticipation. It is as ifthere was a gathering in advance renderingthe crop movable.

Electricity may be appropriated; it can bethe object of theft.

US v. Carlos

Accused was convicted for the theft of electriccurrent by means of a jumper. Accusedcontends that electricity is intangible andcannot be the object of theft.

HELD: Accused is guilty of theft.

The Revised Penal Code provides thatpersonal property is the subject of theft.

Electricity is a valuable article of merchandiseand can be bought and sold like any otherpersonal property.

The true test of what is a proper subject oflarceny is not whether the subject is corporealor incorporeal, but whether it is capable ofappropriation by another than the owner.

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Article 417. The following are alsoconsidered as personal property:

(1) Obligations and actions which have fortheir object movables or demandable sums;and

(2) Shares of stock of agricultural, commercial,and industrial entities, although they mayhave real estate.

(1) Examples are: the right to recoverstolen property and promissory notesas these involve movables ordemandable sums

(2) Even if the sole property of thecorporation is real property, a share insuch corporation is personal property.In fact, all shares in all juridical personsare considered personal.

The property right of shares of stockcan only be enforced or exercised wherethe corporation is organized or has itsplace of business.

(3) Money is always personal property.Money is not merchandise when indomestic circulation; it becomesmerchandise when it is exported ortaken out of domestic circulation.

Article 418. Movable property is eitherconsumable or non-consumable.

To the first class belong those movables whichcannot be used in a manner appropriate totheir nature without their being consumed;to the second class belong all others.

Classifications of movable property

(1) According to NATURE:

a. Consumable – cannot be usedaccording to its nature withoutbeing consumed

b. Non-consumable – any otherkind of movable property

(2) According to INTENTION:

a. Fungible – Mutuum - borrowedfor consumption and equivalentproperty will be returned

b. Non-fungible – Commodatum -exact same property will bereturned.

B. Property in Relation to the Person towhom it Belongs

4.

Article 419. Property is either of publicdominion or of private ownership.

Article 420. The following things areproperty of public dominion:

(1) Those intended for public use, such asroads, canals, rivers, torrents, ports andbridges constructed by the State, banks,shores, roadsteads, and others of similarcharacter;

(2) Those which belong to the State, withoutbeing for public use, and are intended forsome public service or for the developmentof the national wealth.

Public dominion (def.):

a) ownership by the State in that the Statehas control and administration; or

b) ownership by the public in general.

Three Kinds Of Property Of PublicDominion:

1) For public use – roads, canals for useby everyone

2) For public service – governmentbuildings and vehicles for use byauthorized persons

3) For the development of nationalwealth – natural resources.

Canals constructed by private personswithin private lands are of privateownership.

Santos v. Moreno

The Ayala’s originally constructed the canalsto facilitate the operations of their nipaplantation.

The Ayala’s later transformed their nipaplantation into several fishponds byconstructing dams or dikes to block the flowof water in canals located in the plantation.This property was later sold to Santos, whofurther developed the property foraquaculture.

Local residents sought the destruction of thedikes stating that their construction preventedthem from using the canals for transportation,caused flooding, and deprived them of fishinggrounds.

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ISSUE: whether the canals are of publicdominion or private ownership.

HELD: The canals are private; theirdestruction may not be ordered.

Article 420 states that canals constructed bythe State are of public ownership; conversely,canals constructed by private persons withinprivate lands are of private ownership.

Art. 421. All other property of the State,which is not of the character stated in thepreceding article, is patrimonial property.(340a)

Art. 422. Property of public dominion, whenno longer intended for public use or forpublic service, shall form part of thepatrimonial property of the State. (341a)

Conversion of a property’s characterfrom public to patrimonial requires aformal declaration of abandonment ofthe public character.

Laurel v. Garcia

The government sought to sell a propertylocated in Japan which it acquired through areparation agreement with the Japanesegovernment. The property in question wasgiven with the intention of its being the site ofthe Philippine Embassy; it was given with theunderstanding that it would be used for thegovernment sector.

ISSUE: Whether the property is public orpatrimonial.

Respondents claim that the property isgoverned not by the Civil Code but byJapanese law and assuming that the CC wereapplicable, the government has implicitlyabandoned the public use of the property andcaused it to become patrimonial bytransferring the embassy to another locationand other executive acts.

HELD: The property is public – its ownershipis collective and resides in the sovereignpeople. It is outside the commerce of man.

The property is of public dominion andintended for public service under Article 420of the Civil Code.

This is dictated by the terms of theReparations Agreement and the

corresponding contract of procurement whichbind both the Philippine government and theJapanese government. Being so, it cannot bealienated.

Contrary to respondents’ claim, conversion ofa property’s character from public topatrimonial requires a formal declaration ofabandonment of the public character.

*Even if the property were patrimonial, therecould be no sale as there is no law authorizingthe same.

Public plazas and streets are of publiccharacter and may not be leased out bythe municipality.

Municipality of Cavite v. Rojas

The municipal council of Cavite withdrew frompublic use and leased to Rojas a portion of thetown plaza. The provincial fiscal later filed acomplaint alleging that the property leasedwas of public character and therefore thecontract was null and void.

HELD: The contract of lease is ultra vires andnull and void, the municipality never havinghad authority to exclude it from public useand lease it out.

Property belonging to the public domain isoutside the commerce of man and cannot bethe object of any contract.

The defendant must return the land and themunicipality must reimburse rentals paid.

*The book says that Rojas received no benefitbut the facts show that occupation wasenjoyed and a house was built. Compare toSanchez v. Asingan.

Property owned by the State which is notintended for public use or public serviceis patrimonial.

There is no reimbursement if lesseederived substantial benefit from the useof said property.

Sanchez v. Mun. of Asingan

Petitioner occupied a parcel of land owned bythe municipality, with the implied consent ofthe latter, and built buildings of lightmaterials – rent was paid.

When a new set of officials took over, thecouncil gave notice to petitioner to vacate theland within 5 months.

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Petitioner refused and filed for prohibitionstating that the land belonged to the provinceand the municipality had no standing to seektheir ejectment and in case they should beejected, prayed for reimbursement, citing theRojas case.

ISSUE: Whether the land is public orpatrimonial.

HELD: The land is patrimonial property of themunicipality. It was not for public use not wasit for public service.

There is to be no reimbursement. Unlike theRojas case, the land here is not of publiccharacter. The implied lease agreement istherefore valid and may be terminated uponnotice.

Assuming that the property is public, therecan still be no reimbursement as petitionerderived substantial benefit from the use ofsaid property.

INSERT REPUBLIC V. CA HERE

5.

Art. 423. The property of provinces, cities,and municipalities is divided into propertyfor public use and patrimonial property.

Art. 424. Property for public use, in theprovinces, cities, and municipalities, consistof the provincial roads, city streets,municipal streets, the squares, fountains,public waters, promenades, and publicworks for public service paid for by saidprovinces, cities, or municipalities.

All other property possessed by any of them ispatrimonial and shall be governed by thisCode, without prejudice to the provisions ofspecial laws.

Where now do properties for public serviceand properties for the development ofnational wealth fall?

Public service – depends on who pays for theservice. If paid for by the political subdivision,public; if for profit, patrimonial.

National wealth – still property for public useunder the regalian doctrine.

Property of a political subdivision ispublic only if it is devoted to public use.

Examples of property for public usebeing streets, promenades, fountains,etc.

City of Cebu v. NAWASA

The City of Cebu obtained a loan which was tobe paid with its own funds. Part of theproceeds of this loan was used to fund theconstruction of the City’s sewage system.

NAWASA sought to expropriate the sewagesystem. This was opposed with the argumentsthat there was no payment of justcompensation; NAWASA offered unliquidatedassets and liabilities.

NAWASA averred, as an alternative course ofaction, that the property is one for public useand under the control of the legislature.

ISSUE: Whether the property is patrimonialproperty of the city or property for public use.

HELD: The property is patrimonial and notsubject to legislative control. It is propertyof the city, purchased with private funds andnot devoted to public use (it is for profit). It istherefore patrimonial under the Civil Code.

Nor can the system be considered “publicworks for public service” under Article 424because such classification is qualified byejusdem generis; it must be of the samecharacter as the preceding items.

What if a courthouse is constructed withmunicipal funds?

clarify

City constructs public market patrimonial

Cemetery public use

Under the Law of Municipal Corporations,it is enough that the property be devotedfor governmental purposes for it to beclassified as public.

Province of Zamboanga v. City ofZamboanga

Zamboanga City ceased to become theprovincial capital and a law was passeddeclaring the province’s property locatedwithin the city to be transferred to the cityfree of charge. The properties were the capitalsite, hospitals, playgrounds, and schools.

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ISSUE: Whether Congress can transfer theproperties to the City without compensatingthe province.

HELD: Yes; the properties are public andsubject to the absolute control of Congress.

If the province owns the properties in it publicand governmental capacity, the property ispublic and Congress has absolute control overit.

The character of the property depends onthe use to which it is devoted. Theproblem is which applies, Civil Code orLaw of Municipal Corporations?

Under the CC, a property is public if it is forthe free and indiscriminate use of everyone.Under municipal law, it is sufficient that theproperty be devoted to governmentalpurposes.

In this case, applying the CC, the propertiesare not for public use but merely for publicservice.

However, Municipal law applies because thecontroversy is more municipal than civil andthe properties are needed for theperformance of governmental functions. TheLMC provides that a property is public if it isdevoted to public use.

If the CC classification is used, consequencesare dire (acquisition through adversepossession).

Also the LMC is a special law. The CC itselfprovides that its provisions apply withoutprejudice to special laws.

The buildings on the lots are also publicbecause accessory follows the principal.

How do we resolve what determines character?

Salas v. Jarencio: How the property waspurchased public/private funds

Or

Civil code: What use the property is devoted to free and indiscriminate use of everyone or

otherwise

Or

LMC: Property is public if it is exclusivelydevoted to public service.

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Public properties are exempt fromexecution because of their necessity forgovernmental functions.

Viuda de Tan Toco v. Municipal Council ofIloilo

Iloilo was sentenced to pay Tan Tococompensation for properties taken from herand used for street-widening. Because Iloilohad no money, Tan Toco caused a writ ofexecution to be issued against municipalproperty: street sprinkling trucks, police cars,police stations, and markets.

Iloilo’s defense is that the properties arepublic and exempt from execution.

HELD: The properties are public and exemptfrom execution.

The vehicles and the police station all servegovernmental functions. The market, thoughnot purely public is also exempt because itwould allow a third party to the franchiseagreement to assume control without theapproval of the administration.

A town plaza loses its public characterwhen the town ceases using it as suchand subjects it to patrimonial use.

Municipality of Oas v. Roa

The Municipality of Oas sought to recover landfrom Roa claiming it was part of the town’spublic square. Roa claims he is the owner ofthe property. He had erected a substantialbuilding on the property without oppositionfrom the municipality.

HELD: The land belongs to the municipalityas shown by several town resolutions signedby Roa himself. It is patrimonial because thetown had long since ceased using it as a plazaand had started using it as storage space.

Although the property is now patrimonial andsusceptible of ownership, Roa has failed toshow any of the modes of acquiringownership.

Since both parties are in bad faith (Roa’sconstruction despite knowledge; tolerance bythe municipality), they shall be treated asthough they are both in good faith.

The town may sell the land to Roa or Roa maysell the improvements to Roa.

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Art. 425. Property of private ownership,besides the patrimonial property of theState, provinces, cities, and municipalities,consists of all property belonging to privatepersons, either individually or collectively.(345a)

Art. 426. Whenever by provision of the law,or an individual declaration, the expression"immovable things or property," or"movable things or property," is used, itshall be deemed to include, respectively,the things enumerated in Chapter 1 andChapter 2.

Whenever the word "muebles," or "furniture,"is used alone, it shall not be deemed toinclude money, credits, commercialsecurities, stocks and bonds, jewelry,scientific or artistic collections, books,medals, arms, clothing, horses or carriagesand their accessories, grains, liquids andmerchandise, or other things which do nothave as their principal object the furnishingor ornamenting of a building, except wherefrom the context of the law, or theindividual declaration, the contrary clearlyappears. (346a)

II. Ownership

A. In General

6.

Art. 427. Ownership may be exercised overthings or rights.

Ownership (def.) – Ownership is theindependent and general right of a person tocontrol a thing particularly in his possession,enjoyment, disposition, and recovery, subjectto no restrictions except those imposed by thestate or private persons, without prejudice tothe provisions of the law.

Independent – stands by itself and gives youthe right to control the property

General - possession, enjoyment, disposition,and recovery

Kinds of Ownership (not discussed)

(a) Full ownership – this includes allthe rights of an owner.

(b) Naked ownership – this isownership where the right touse and the fruits has beendenied.

i. Naked ownership plususufruct equals fullownership.

ii. Usufruct equals fullownership minus nakedownership.

iii. Naked ownership equalsfull ownership minususufruct.

(c) Sole ownership – where theownership is vested in only oneperson.

(d) Co-ownership (or Tenancy inCommon) – when theownership is vested in two ormore owners.

Art. 428. The owner has the right to enjoyand dispose of a thing, without otherlimitations than those established by law.

The owner has also a right of action againstthe holder and possessor of the thing inorder to recover it.

The rights of an owner:

1. Right to Enjoy

a. Right to Possess

i. The right to hold a thing orto enjoy a right. It meansthat the thing or right issubject to control of my will.

b. Right to Use

i. The right to exclude anyperson, as a rule, from theenjoyment and disposalthereof.

1. Reasonable forcemay be used toprevent or repelphysical invasion.

2. But to recover, noforce, but legalmeans must beused.

c. Right to the Fruits

i. What

2. Right to Dispose

a. Right to Consume, Destroy, orAbuse

b. Right To Encumber Or Alienate

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3. Right to Recover

Actions to Recover Property:

1. Recovery of Personal Property

a. Replevin

2. Recovery of Real Property

a. Forcible Entry (MTC)

i. WHAT? This is asummary action to recoverphysical possession of realproperty when a personoriginally in possession wasdeprived thereof by FISTS(force, intimidation, stealth,threats, strategy)

Possession is unlawful fromthe beginning.

ii. WHEN? Must be broughtwithin one year fromdispossession; but in caseof strategy or stealth, theperiod should be countedfrom discovery.

iii. ISSUE? The issueinvolved is mere physicalpossession and not juridicalpossession nor ownership.

b. Unlawful Detainer (MTC)

i. WHAT? This is the actionthat must be brought whenpossession by a landlord,vendor, vendee or otherperson of any land orbuilding is being unlawfullywithheld after the expirationor termination of the rightto hold possession by virtueof any contract.

Possession is lawful formthe beginning.

ii. WHEN? Must be broughtwithin one year from thetime the possessionbecomes unlawful.

1. One year fromexpiration of lease;or

2. If the reason is non-payment of rent,

one year fromdemand to vacate.

iii. ISSUE? The issueinvolved is mere physicalpossession and not juridicalpossession nor ownership.

**Difference between unlawful detainer andforcible entry: UD possession of other isinitially lawful; FE possession is unlawful fromthe outset

c. Accion Publiciana (plenaryaction)

i. WHAT? This is the actionfor the recovery of thebetter right to possess.

ii. WHEN? Must be broughtwithin ten years.

iii. ISSUE? The issueinvolved is who has a betterright to posses; de jure andnot de facto possession isthe issue here.

d. Accion Reivindicatoria

i. WHAT? This is an actionto recover ownership overreal property.

ii. WHEN? This must bebrought within 10/30 yearsdepending on whether theother party seeks to obtainownership throughordinary/extraordinaryprescription.

iii. ISSUE? The issueinvolved is one ofownership.

Art. 429. The owner or lawful possessor of athing has the right to exclude any personfrom the enjoyment and disposal thereof.For this purpose, he may use such force asmay be reasonably necessary to repel orprevent an actual or threatened unlawfulphysical invasion or usurpation of hisproperty.

Art. 430. Every owner may enclose or fencehis land or tenements by means of walls,ditches, live or dead hedges, or by anyother means without detriment toservitudes constituted thereon.

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Art. 431. The owner of a thing cannot makeuse thereof in such manner as to injure therights of a third person.

Art. 432. The owner of a thing has no rightto prohibit the interference of another withthe same, if the interference is necessary toavert an imminent danger and thethreatened damage, compared to thedamage arising to the owner from theinterference, is much greater. The ownermay demand from the person benefitedindemnity for the damage to him.

7.

Art. 433. Actual possession under claim ofownership raises disputable presumption ofownership. The true owner must resort tojudicial process for the recovery of theproperty.

Art. 434. In an action to recover, theproperty must be identified, and theplaintiff must rely on the strength of histitle and not on the weakness of thedefendant's claim.

Requisites In An Action To Recover:

1. Property must be identified

a. WHY? Burden of proof lies on theparty who asserts the affirmative ofan issue.

The description should be sodefinite that an officer of the courtmight ho to the locality where theland is situated and definitely locateit.

Is a technical description requiredor will a statement of boundariessuffice?

If in a developed area, land will besufficiently subdivided.

2. Reliance on title of the plaintiff and not onthe weakness of the defense’s claim.

a. Best proof is a Torrens certificate.

b. Tax receipts, tax declarations areonly prima facie evidence ofownership; it is rebuttable.

Acquisitive prescription: (1) GOOD FAITH 10 years with just title and adverse possession; (2) BAD FAITH 30 years in adverse possession.

Heirs of Miranda v. CA (skipped)

In 1957, the son of Miranda, acting asadministrator of the estate, sold the propertyin issue to private respondent, Agerico. Theproperty was titled in the name of Agerico’sdaughter, Charito; Agerico has been inpossession and cultivation since then.

In 1991, the heirs of Miranda entered theproperty and prevented Agerico fromcultivating it; an action for forcible entry wasbrought and the heirs of Miranda wereordered to vacate the land.

The heirs filed a complaint for declaration ofnullity of the title.

ISSUE: Whether the property belongs toAgerico/Charito or to the heirs of Miranda.

HELD: The property belongs toAgerico/Charito. The action of the heirs hasbeen barred by prescription.

Ownership over real property is acquired byacquisitive prescription through adversepossession with title and in good faith for tenyears.

Without need of title or of good faith,ownership and other real rights overimmovables is acquired through uninterruptedadverse possession for 30 years.

In this case, not only could the privaterespondents claim acquisitive prescription ingood faith (they had title and possessed theproperty in good faith for well over ten years),they could also claim ownership throughextraordinary prescription by possessing theproperty in the concept of owner for thirtyyears.

It is a well settled rule that a title, onceregistered, cannot be defeated even byadverse, open, and notorious possession.

Heirs of Vencilao v. CA (skipped)

The heirs of Vencilao claim that they (andprior to them, their father) have been inadverse possession of the property in issuefor over thirty years. They present taxreceipts and CARP documents to support theirclaim.

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The Gepalagos (private respondents) claimownership of the land based on the TCT. Theyclaim to have acquired the land in a publicbidding following its foreclosure by PNB.

ISSUE: Who has a better right to the land: aclaimant by acquisitive prescription or aclaimant by deed of sale recorded in the TCTof the vendor/mortgagee as highest bidder ina foreclosure sale?

HELD: The titled owner has a better right.

It is a well settled rule that a title, onceregistered, cannot be defeated even byadverse, open, and notorious possession.

When the TCT is in the name of the sellerwhen the land is sold, the buyer has a right torely on what appears on the face of thedocument. If there is nothing that indicatesany irregularity, as is the case here, he in notexpected to make further investigations orinquiries.

The only exception is when an irregularityappears and the buyer chooses to ignore thesame; in this case, they are no longerinnocent purchasers for value.

On the other hand, the heirs of Vencilao areestopped from claiming ownership to the landdue to their silence (1) when the property wasmortgaged; (2) foreclosed; and (3) sold.

Art. 435. No person shall be deprived of hisproperty except by competent authority andfor public use and always upon payment ofjust compensation.

Should this requirement be not first compliedwith, the courts shall protect and, in aproper case, restore the owner in hispossession.

Art. 436. When any property is condemned orseized by competent authority in theinterest of health, safety or security, theowner thereof shall not be entitled tocompensation, unless he can show thatsuch condemnation or seizure is unjustified.

Art. 437. * The owner of a parcel of land isthe owner of its surface and of everythingunder it, and he can construct thereon anyworks or make any plantations andexcavations which he may deem proper,without detriment to servitudes and subjectto special laws and ordinances. He cannot

complain of the reasonable requirements ofaerial navigation.

Surface Right of a Land Owner is subjectto:

1. Servitudes or easements;

2. Special Laws (mining law);

3. ordinances;

4. reasonable requirements of aerialnavigation;

5. Principles on human relations and theprevention of injury to the rights ofthird persons (unnecessary obstructionof the light and view of a neighbor).

Art. 438. * Hidden treasure belongs to theowner of the land, building, or otherproperty on which it is found.

Nevertheless, when the discovery is made onthe property of another, or of the State orany of its subdivisions, and by chance, one-half thereof shall be allowed to the finder. Ifthe finder is a trespasser, he shall not beentitled to any share of the treasure.

If the things found be of interest to science orthe arts, the State may acquire them attheir just price, which shall be divided inconformity with the rule stated.

Art. 439. *(technical description) Bytreasure is understood, for legal purposes,any hidden and unknown deposit of money,jewelry, or other precious objects, thelawful ownership of which does not appear.

Requisites:

1. Hidden and unknown deposit (finding itmust be a discovery;

2. Consists of money, jewelry, or otherprecious objects;

3. Their lawful ownership does not appear.

Meaning of other precious objects:

1. Restricted by ejusdem generis to meanobjects of the same class as money andjewelry.

2. How about money found in a bookloaned from the library; who owns themoney? School.

Finding in others’ property; requisites:

1. It must be by chance

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a. What does by chance mean? SC/Paras – by chance means bygood luck.

2. Finder must not be a trespasser.

Article 440. The ownership of propertygives the right by accession to everythingwhich is produced thereby, or which isincorporated or attached thereto, eithernaturally or artificially. [OPRAE-PIANA]

*What is accession?

It is the right of a property owner to everythingwhich is:

a) produced thereby (accession discreta);or

b) incorporated or attached thereto, eithernaturally or artificially (accessioncontinua).

What are the classifications of accession?

A. Accession to the fruits (discreta)

a. Natural fruits

b. Industrial fruits

c. Civil fruits

B. Accession by attachment orincorporation (continua)

a. Real property

i. Accession industrial

1. building

2. planting

3. sowing

ii. Accession natural

1. alluvium

2. avulsion

3. change ofcourse of rivers

4. formation ofislands

b. Personal property

i. Adjunction orconjunction

1. engrafment

2. attachment

3. weaving

4. painting

5. writing

ii. mixture (confusion –liquids; commixtion –solids)

iii. specification

Is accession a mode of acquiringownership?

No, the only modes of acquiring ownership are:[STOPID-Love]

a) succession

b) tradition as a consequence of certaincontracts

c) occupation

d) prescription

e) intellectual creation

f) donation

g) law

*What are the reasons behind accession?

a) As to the fruits, justice, pure andsimple, because the one who owns thething should own its fruits.

b) As to incorporation and attachment,the owner of the principal should ownthe attachment; and economicconvenience (better to have one ownerthan two)

Article 441. To the owner belongs:

(1)The natural fruits;

(2)The industrial fruits;

(3)The civil fruits.

Article 442. Natural fruits are thespontaneous products of the soil, and theyoung and other products of animals.

Industrial fruits are those produced by lands ofany kind through cultivation or labor.

Civil fruits are the rents of building, the priceof leases of lands and other property and theamount of perpetual or life annuities or othersimilar income. [SPS-YOPA, PLAK-CL, RB-PLLOP-PLAOSI]

*When does the owner of the land NOTown the fruits? [PAUL]

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a) P ossessor of the land receives the fruitsin good faith;

b) A ntichresis, where the creditor gets thefruits.

c) U sufructuary (right to enjoy the fruits);

d) L essee gets the natural and industrialfruits (owner gets civil fruits);

*To whom does the offspring of an animalbelong when the male and female belongto different owners?

The offspring belongs to the mother because,(1) the paternity is uncertain and (2) duringpregnancy, the female is useless and her ownerbears the expenses.

But if the female is leased, the lessee owns theoffspring, because the lease is onerous (if itwere commodatum, the offspring would belongto the owner of the female).

A bonus received as compensation forthe risk taken by a mortgagor whoreceived no value from the loan is notconsidered a civil fruit.

Bachrach Motor Co. v. Talisay-SilayMilling Company.

Talisay obtained a loan from PNB with a REMprovided by one of its planters, Ledesma. Tocompensate Ledesma for the accommodation,Talisay granted him a bonus whose valuewas computed as a percentage of thebalance of the loan.

Bachrach, as a creditor of Ledesma, laid aclaim to the bonus received by the latter. Onthe other hand, PNB claims that it owns thefruits, because under Article 2127, themortgage extends to the civil fruits of theproperty.

ISSUE: Whether the bonus is a civil fruit,thereby giving PNB a preferential right over it.

HELD: The bonus is not a civil fruit. Civilfruits are the rents of the buildings, leases oflands, and income from life annuities, or othersimilar sources of income.

Though it is possible to consider the bonus asincome, it is not similar income to the itemsin the preceding enumeration. The commondenominator, which is absent in the bonus, isderivation of the income from the land itself.

In this case, the bonus is not based on thevalue of the land but rather on theamount of the outstanding obligation ofTalisay. It is clearly meant to be

compensation for the risk assumed by theowner, Ledesma.

Article 443. He who receives the fruits hasthe obligation to pay the expenses made bya third person in their production,gathering, and preservation.

He who receives the fruits is…?

… the owner of the land.

To whom does this provision apply?

Article 443 applies only to a planter/possessorin bad faith. The rule is that if the planter is ingood faith, he is entitled to the fruits alreadyreceived.

If the fruits have not yet been gathered?

Article 448 applies if the planter or sower is ingood faith, Article 449 if he is in bad faith.

What are the kinds of expenses subject toreimbursement?

a. They must be for production,gathering, or preservation.Improvements are not included.

b. They must be necessary, and notexcessive. They must be thosenormally required by the crop.

What if the expenses exceed the value ofthe product, is the planter in bad faith stillentitled to reimbursement?

Only if the owner still requires delivery of thefruits.

Article 444. Only such as are manifest orborn are considered as natural or industrialfruits.

*When can we say that the fruit is inexistence?

It depends on the type of fruit:

a. Annual (must be planted everyyear/must re-plant after harvest;rice, wheat, corn) – deemedmanifest the moment theirseedlings appear. SOWING.

b. Perennial (only planted once andbear fruit for several seasons;mango and coconut trees) –deemed to exist only when theyactually appear. PLANTING.

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*When are animal young considered asexisting?

They are considered existing even if still in thematernal womb. They should be consideredexisting only at the commencement of themaximum ordinary period for gestation.

*When are civil fruits deemed to exist;how about natural fruits?

a. Civil fruits accrue daily and areconsidered personal property andmay be pro-rated.

b. Natural and industrial fruits, whilestill growing, are considered as realproperty; ordinarily, they cannot bepro-rated.

Ex. House rented for 30,000/month. Apply nowthe principle that civil fruits accrue daily. Every day, the property produces 1,000

If B owned the property from 1-5 and B ownedthe property from 16-30, A is entitled to 15Kand B is entitled to 15K. If A is paid 30K at thebeginning of the month, he should deliver halfof that to B. This is because civil fruits accrueDAILY.

Article 445. Whatever is built, planted orsown on the land of another and theimprovements or repairs made thereon,belong to the owner of the land, subject tothe provisions of the following articles.

* What are the basic principles ofaccession continua (accession industrial)?

a. Accessory follows the principal

b. With certain exceptions, it shouldbe impossible to separate theprincipal and accessory withoutcausing substantial damage.

c. He who is in good faith may be heldresponsible but not penalized.

d. He who is in bad faith may bepenalized.

e. When both are in bad faith, theyshall be treated as if they were ingood faith.

f. No one shall unjustly enrich himselfat the expense of another.

Article 446. All works, sowing, and plantingare presumed made by the owner and athis expense, unless the contrary is proved.

What are the presumptions of Article 446?

a. That all works, sowing and plantingare made by the owner;

b. At his own expense.

Article 447. The owner of the land whomakes thereon, personally or throughanother, plantings, constructions or workswith the materials of another, shall paytheir value; and, if he acted in bad faith, heshall also be obliged to the reparation ofdamages. The owner of the materials shallhave the right to remove them only in casehe can do so without injury to the workconstructed, or without the plantings,constructions or works being destroyed.However, if the landowner acted in badfaith, the owner of the materials mayremove them in any event, with a right tobe reimbursed for damages.

When is the builder/landowner in goodfaith/ bad faith?

When he believed the materials were hisown/knew the materials belonged to another.

When is the owner of the materials in goodfaith/bad faith?

When he does not know that his materials werebeing used/when he knows and does not object.

Ex. A built house with B’s materials. Both werein good faith. What are the rights of theparties? Who calls the shots?

B. B is entitled to remove the materialsprovided no damage is caused. If this cannot bedone or if B doesn’t want to remove thematerials, A may be compelled to pay for thematerials.

If A is in bad faith, B can remove the materials,regardless of damage caused or demandpayment, with damages in either case.

If B is in bad faith, A may keep the materials.There is no indemnity and A may seek fordamages because the materials may be inferiorin quality.

If both are in bad faith, they will be treated as ifthey were in good faith.

Article 448. The owner of the land onwhich anything has been built, sown or

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planted in good faith, shall have the right toappropriate as his own the works, sowing orplanting, after payment of the indemnityprovided in articles 546 and 548, or tooblige the one who built or planted to paythe price of the land, and the one whosowed, the proper rent.

However, the builder or planter cannot beobliged to buy the land if its value isconsiderable more than that of the buildingor trees. In such case, he shall payreasonable rent, if the owner of the landdoes not choose to appropriate the buildingor trees after proper indemnity. The partiesshall agree upon the terms of the lease andin case of disagreement, the court shall fixthe terms thereof.

What are the rules on good faith in Article448?

Both must be in good faith.

Who is given the choice and why? Whatare the choices?

The owner must be given the choice becausethe accessory follows the principal:

a) He may appropriate what has beenbuilt, planted, or sown.

b) He may compel the builder or planter tobuy the land and the sower to payrents.

These are the only choices he has. He cannotcompel removal of the improvement. However,if he opts to sell the portion to the builder andthe builder fails to pay, he may demolish thestructure.

What are the indemnities to be given tothe builder in good faith?

1. Necessary expenses

a. Those made for thepreservation of the thing

b. those without which the thingwould deteriorate or be lost

c. those incurred for cultivation,production, and upkeep

d. Repairs required by the wearand tear due to the natural useof the thing.

2. Useful expenses

a. Those that augment the incomeof the thing upon which they

are spent or add value to theproperty.

3. Luxurious expenses

a. These are reimbursable only ifthe landowner decides toappropriate them.

Can the owner of the land choose toappropriate and then later change hismind?

No, the choice is irrevocable. Once the choicehas been made, in case it is the option topurchase the improvement, the duty ismonetary and the landowner’s properties maybe levied to satisfy the debt.

What if the owner refuses to make achoice?

There are no remedies except those providedby the law in Article 448.

In this case, I THINK that the builder in goodfaith should ask the court to determine areasonable amount of rent and deposit thesame regularly with the court.

What if the owner chooses to appropriatethe building, what is his obligation?

The landowner must now indemnify the builderfor the value of the building.

What if after choosing to appropriate thebuilding, the landowner fails to pay?

The builder has the right to occupy the buildingup to the date of payment. He has the right ofretention until payment is made.

What if the owner above allows the builderto remain but charges rentals forpossession of the land?

No rentals may be charged. The landowner isnot the owner of the property untilindemnification is made.

If the landowner chooses to compel thebuilder to buy the land, can the builder beobliged to purchase the land?

Generally, yes, unless the value of the land isconsiderably more than the value of thebuilding. However if the value of the land is notconsiderably more, the builder may becompelled.

If this is the case, they can agree on terms oflease, and in case of disagreement, the courtsshall fix the same.

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If the builder is the son of the landownerand permission is granted, the builder is ingood faith.

If the land is co-owned, and the land ispartitioned, with part of one houseencroaching on the other’s partition.

In this case, Article 448 applies. Even thoughthe construction wasn’t on the land of another,the subsequent partition caused 448 to apply(Del Ocampo v. Abesia). What should thelandowner choose? Sell the small portion of theland because what will be the use of a portionof a building?

When the structures built in good faithon the land of another are of a temporarycharacter, Article 448 applies, but onlyas to indemnity. The landowner is notcompelled to choose betweenappropriating the property and sellingthe land.

Alviola v. CA

Alviola occupied Tinagan’s land and built acopra drier and put up a store where theyengaged in copra trade; this was done in badfaith but with the tolerance of Tinagan.

Several years later, the heirs of Tinagan fileda complaint for recovery of possession againstAlviola. Alviola claims that the copra dryerand store are permanent structures (hollow-block walls and cement floor) and that 448should apply.

ISSUE: Whether 448 should apply.

HELD: 448 should apply.

Since both parties were in bad faith, they willbe treated as if they were in good faith forpurposes of indemnity and Article 448 willapply: the builder of the structures will payrent until the structures are dismantled.

However, the dryer and store are temporarystructures. They to not have a permanentcharacter and were not attached to the soilwith an idea of perpetuity.

Since the structures are merely temporary,the landowner does not have to choosebetween buying the structures and selling theproperty.

In computing the amount to be paid to abuilder in good faith, the FMV of thestructure should be used. The right ofretention enjoyed by the builder allowshim to possess the property and its fruitsuntil he is fully indemnified; he cannot bemade to pay rents.

Pecson v. CA

Pecson owned a commercial lot on which hebuilt an apartment building. The lot was soldat public auction because of his failure to payrealty taxes. Private respondents, Nuguids,are now the owners of the lot.

When Pecson challenged the auction, it washeld that the apartment building was notincluded in the execution because thecertificate of sale was silent on the issue ofthe building.

However, in separate suit for recovery ofpossession, the owners of the lot causedjudgment to be rendered ordering Pecson totransfer the building for the original cost ofconstruction, 53K.

Pecson was also ordered to pay rentals of 21Kper month (the income of the building from itstenants) until he vacates the premises.

ISSUE: Whether the construction value of thebuilding should be paid; whether Pecsonshould pay rent.

HELD: The fair market value of the buildingshould be paid. Pecson is entitled to the rightof retention; he enjoys ownership until he isfully compensated.

The objective of Article 546 is to administerjustice between the parties; in this case, thiscan be accomplished by giving Pecson thepresent value of the building.

Article 546 also provides that a possessor ingood faith, as Pecson is, may retain the thinguntil he is reimbursed for it. It follows that ifPecson is allowed to retain possession of thething, he is also allowed to retain the incomegenerated by the building and not pay rent.

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Good faith is presumed; good faith on thepart of the builder passes on to hissuccessor.

The builder’s right of retention existsonly when the landowner opts topurchase the property; if the choice iscompulsory sale, the builder must payrent until transfer of ownership.

Tecnogas v. CA

Tecnogas’s property encroached on Uy’sproperty. The CA held that, though Tecnogaspurchased the property with improvementsalready constructed, it was in bad faithbecause an owner of a property is supposedto know its metes and bounds.

ISSUE: Whether Article 448 applies.

HELD: Yes. Good faith is presumed and sincethere was no showing of bad faith on the partof the original builder, the character ofpossession passes on to the currentpossessor.

Unless one is versed in the science ofsurveying, no one can determine theprecise extent or location of his propertyby merely examining his title.

Article 448 provides that a property owner onwhose property there has been built astructure by another, in good faith, shall havethe option to appropriate said structure uponpayment of indemnity or sell the portionencroached upon to the other.

Uy must choose between the two options inArticle 448. Tecnogas should pay rent on theland until the time Uy communicates hischoice. If the choice is compulsory sale,Tecnogas should continue paying rent untiltransfer of ownership.

The rule: a purchaser need not gobeyond the title. The exception: wherethere are facts that would induce areasonably prudent man to make furtherinquiries.

State Investment House v. CA

Sps. Oreta purchased a house and lot fromSOLID. Before a deed of sale could beexecuted, SOLID mortgaged the property toSIH; it was foreclosed.

ISSUE: Whether the Oretas have a betterright over the property, despite the absence

of a deed of sale (unregistered sale v.registered mortgage).

HELD: Yes. SOLID no longer had ownershipand free disposal when it mortgaged theproperty; it had no authority to do so.

Though the rule is that a purchaser need notgo beyond the four corners of the title, theexception is where the purchases hasknowledge of facts to induce a prudent manto inquire into the status of the property.

SIH, knowing the trade of SOLID, should havemade sure there was no adverse claim on theproperty before accepting it as a mortgage; itwas not a purchaser in good faith. Thisnegligence takes the place of registration ofthe rights of the Oretas.

Article 448 does not apply to co-owners;but when the property is partitioned andthe circumstances covered by 448 arepresent, it may be applied.

Del Ocampo v. Abesia

Del OCampo and Abeisa are co-owners of thesubject property; 2/3 and 1/3, respectively.An action for partition was filed and thepartition showed that the house of Abesiaoccupied 5 sqm. of the property of DelOcampo.

ISSUE: Whether Article 448 can apply to thiscase considering the parties are co-owners.

HELD: Article 448 cannot apply to co-ownership situations. However, because theproperty was partitioned, Article 448 nowapplies.

Art. 449. He who builds, plants or sows inbad faith on the land of another, loses whatis built, planted or sown without right toindemnity.

Art. 450. The owner of the land on whichanything has been built, planted or sown inbad faith may demand the demolition of thework, or that the planting or sowing beremoved, in order to replace things in theirformer condition at the expense of theperson who built, planted or sowed;

or he may compel the builder or planter to paythe price of the land, and the sower theproper rent.

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Art. 451. In the cases of the two precedingarticles, the landowner is entitled todamages from the builder, planter or sower.

Art. 452. The builder, planter or sower inbad faith is entitled to reimbursement forthe necessary expenses of preservation ofthe land.

Does Article 449 refer to both standing andgathered crops?

No, Article 449 applies only to standing crops,not to gathered crops which are governed byArticle 443 (the planter/sower is entitled toreimbursement for expenses in their gathering,production, and preservation).

If B builds, in bad faith, a house on A’sland (A being in good faith), what are thealternative rights of A?

1. A may get the house without payingindemnity.

2. A may demand demolition of the house,at B’s expense.

3. A may compel B to buy the land,whether or not the value is considerablymore than that of the house.

A IS ENTITLED TO DAMAGES IN EACHCASE.

B IS ENTITLED TO REIMBURSEMENT FORNECESSARY EXPENSES FOR PRESERVATIONOF THE LAND

What is the rule on reimbursement of abuilder in bad faith?

He must be reimbursed the necessary expensesfor the preservation of the land because thetrue owner would have borne such expensesanyway.

Land taxes, though not technically necessaryexpenses, are reimbursable.

A buyer of land under litigation, withknowledge of the same, is a buyer in badfaith.

A builder/planter in bad faith is notentitled to reimbursement forimprovements.

Lumungo v. Usman

Datu Idiris sold the property in question toMrs. Usman; there was partial payment.Subsequently, both parties expressed their

desire to resolve the contract but Datu Idirisnever returned the money he received.

Mrs. Usman then sold the lots to Angeles, whoplanted 3000 coconut trees; Angeles knew ofthe ongoing dispute between Idiris andUsman.

Datu Idiris filed a complaint for recovery ofpossession of the land, which Usman did notcontest. Idiris was adjudged to be owner afterwhich he sold the land to Lumungo.

It has been settled that Lumungo has abetter right to the property and the onlyquestion is…

ISSUE: Whether Angeles is entitled toreimbursement for the trees planted.

HELD: Angeles is NOT entitled toreimbursement

Article 449 provides that he who plants in badfaith on the land of another loses the right toindemnity. Article 452, on the other hand,provides that the planter in bad faith isentitled to reimbursement for necessaryexpenses for preservation of the land.

In this case, the planter, Angeles, knew of thedispute over the land when he purchased thesame.

While Article 449 applies, Article 452 doesnot, because trees are not necessaryexpenses for the preservation of the land;they are IMPROVEMENTS.

Lumungo may appropriate (for free) thetrees, compel Angeles to pay for the land, ororder their demolition at the expense ofAngeles, with damages in either case.

A successor-in-interest is bound by thejudgment (and summons) against hispredecessors. Construction on thelitigated land after suchjudgment/summons is construction inbad faith.

Santos v. Mojica

The lot in question was partitioned andSantos’s parents were ordered to pay rentsfor the portion they were occupying.

They failed to pay and a writ of execution wasissued ordering them to vacate the lot.

Leonardo, who was not a party to the suit,owned a house on the lot – this house wasreconstructed into a bigger one after his

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parents were summoned in the abovementioned case.

The judge, Mojica, ordered the housedemolished.

ISSUE: Whether Leonardo Santos is in goodfaith, thereby entitling him to the benefits ofArticle 448.

HELD: No, Santos is in BAD FAITH, the houseshould be demolished. As such, anyimprovements he made are lost in favor ofthe landowners (3 options).

Though not a party to the suit in which hisparents were ordered to vacate the lot, hewas bound by the judgment because his claimwas under that of his parents; he is theirsuccessor in interest.

A prospective lessee who builds on theland of a prospective lessor despite theabsence of a valid contract and thepresence of objections to theconstruction is clearly in bad faith.

Bugatti v. CA

Bugatti approached Sps. Baguilat and inquiredinto the lease of their land; they agreedprovided that the contract would containcertain terms and conditions. In a meeting,the spouses laid down their terms andconditions: the lease would be for 9 years at500 per month; and a building not exceeding40k would be constructed by Bugatti with thecost of the building offsetting the lease.

Even before preparing the lease, Bugattioccupied the property and beganconstruction.

ISSUE: Whether Bugatti is a builder in goodfaith?

HELD: No, Bugatti is a builder in BAD faith.

The determination of Bugatti’s good or badfaith rests on whether there was a validcontract between the parties giving him theright to occupy and build upon the land –there was none.

It is obvious that the essential element ofconsent was absent. There was no meeting ofthe minds between the parties.

There is bad faith on Bugatti’s part becausehe had no right to occupy the property, muchless construct a building thereupon. Neithercan Bugatti claim bad faith on the Baguilats

part because they repeatedly gave him verbaland written orders to cease his construction.

Articles 449-451 apply; the Baguilat’s havethe option to: (1) take possession of thebuilding without payment of indemnity; (2)demand the destruction of the building atBugatti’s expense; or (3) compel Bugatti topurchase the land whether or not its valueconsiderably exceeds the value of theimprovement. They are also entitled todamages equivalent to rentals beginning fromthe time of occupation until eventual eviction.

Art. 453. If there was bad faith, not onlyon the part of the person who built, plantedor sowed on the land of another, but alsoon the part of the owner of such land, therights of one and the other shall be thesame as though both had acted in goodfaith.

It is understood that there is bad faith on thepart of the landowner whenever the act wasdone with his knowledge and withoutopposition on his part.

What is the definition of bad faith?

1. Landowner

a. When the act(building/planting/sowing) wasdone with his knowledge andwithout opposition on his part.

b. When he buys land knowing thatthere has been construction by aperson other than the owner andwho pays only for the land.

2. Builder

a. When building / planting / sowing isknowingly done on land belongingto another.

Art. 454. When the landowner acted in badfaith and the builder, planter or sowerproceeded in good faith, the provisions ofarticle 447 shall apply.

If B, in good faith, builds on A’s land, Abeing in bad faith, B may:

1. Compel A to pay for the house +damages; or

2. Remove or destroy the house +damages.

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Art. 455. If the materials, plants or seedsbelong to a third person who has not actedin bad faith, the owner of the land shallanswer subsidiarily for their value and onlyin the event that the one who made use ofthem has no property with which to pay.

This provision shall not apply if the ownermakes use of the right granted by article450.

If the owner of the materials, plants or seedshas been paid by the builder, planter orsower, the latter may demand from thelandowner the value of the materials andlabor.

How many parties are involved in thisprovision?

Three:

1. The owner of the materials;

2. The builder;

a. Primarily liable for the cost ofthe materials.

3. The landowner.

a. Subsidiarily liable for the cost ofthe materials, IF he makes useof the materials (appropriatesthe improvement).

b. Must reimburse the builder whohas paid for the materials IF hemakes use of the materials(appropriates theimprovement).

c. Not liable if he chooses tocompel the builder to purchasethe land (this is the rightgranted by Article 450).

A, in bad faith, uses the materials of B,who is also in bad faith, to build on X’sland. What are their rights andobligations?

(a) A and B shall be treated as if they wereboth in good faith, as far as rightsbetween them are concerned. A mustreimburse B for the cost of thematerials.

(b) In case A cannot pay for the materials,X is NOT subsidiarily liable because B isin bad faith as to him.

(c) X is entitled to damages from A and Band may:

a. Appropriate the improvement;

b. Compel A to purchase the land,regardless of cost; or

c. Demolish the structure at A’sexpense.

Art. 456. In the cases regulated in thepreceding articles, good faith does notnecessarily exclude negligence, which givesright to damages under article 2176.

What is the liability for negligence?

The negligent party must pay for the damagedone.

Art. 457. To the owners of lands adjoiningthe banks of rivers belong the accretionwhich they gradually receive from theeffects of the current of the waters.

What is accretion?

Accretion is the process whereby the soil isdeposited.

The soil is alluvium.

What are the forms of accretion?

1. Allluvium

2. Avulsion

3. Change of course of rivers

4. Formation of islands

What is alluvium?

Alluvium is the soil deposited or added to thelands adjoining the banks of rivers, andgradually received as an effect of the current ofthe waters.

What are the essential elements ofalluvium? [CREIG]

(a) The deposit should be gradual andimperceptible (as a process);

(b) Cause is the current of the river andnot artificial;

(c) Current must be that of a river (if lake,Spanish Law of Waters applies; if sea,deposit belongs to the state);

(d) The river must continue to exist; ifnot, Article 461 applies;

(e) The increase must be comparativelylittle and not such that would increasehe area of the riparian land by 150%.

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It is NOT necessary that:

a. The riparian owner should makean express act of possession,the accession beingautomatically his the momentthe soil deposit can be seen;

b. The riparian owner hascompletely paid for the value ofthe riparian estate, as long ashe has already the beneficial orequitable title.

What are the reasons why alluvium isgranted the riparian owner? [CECEAU]

(a) To compensate him for the loss hemay suffer due to erosion or thedestructive force of the water anddanger from floods;

(b) To compensate him because theproperty is subject to encumbrancesand legal easements;

(c) The interests of agriculture requirethat the soil be given to the person whois in the best position to cultivate thesame;

(d) It cannot be said from whom the soilcame, it may as well be given to theperson who can best utilize it.

Binalay v. Manalo

Binalay purchased two parcels of land whichwere later consolidated into one title, Lot 307.The title of one of the parcels of landindicated that it included a portion which wassubmerged annually by the Cagayan Riverduring the wet months. However, when thesurvey to consolidate the lands into 307 wasconducted, the said portion was submergedand was not included in the consolidated title.

During the wet months, the perenniallysubmerged portion causes the river to havetwo branches, with an island formed in themiddle; the strip of land is denominated asLots 821 and 822.

Binalay claims ownership of Lot 821 byaccretion.

ISSUE: Whether Manalo owns Lot 821 byaccretion to the perennially submergedportion.

HELD: Manalo does not own Lot 821.

There are 3 requisites for accretion: (1) thedeposit should be gradual and imperceptible;

(2) that it be the result of the action of theriver; (3) that the land where accretion takesplace is adjacent to the riverbank.

Applying the rules, the land Manalo claims byaccretion must be adjacent to Lot 307.However, the 821 is not adjacent to 307 butto the submerged portion claimed by Manalo.This submerged potion belongs not to him butto the State.

The law of waters states that the natural bedof a river is the highest ground covered by itswaters during the highest floods. Hence, thesubmerged portion is part of the river bedwhich, under the Civil Code, is property ofpublic domain; it cannot come under privateownership.

Ronquillo v. CA

Estero Calubcub changed course due todumping by the people living alongside it.

Ronquillo had been occupying the lot since1945 and Del Rosario in 1960, immediatelyafter learning of the occupation, ordered himto vacate the lot.

The Del Rosarios claim ownership over thedried up bed as riparian owners; Ronquilloclaims the courts have no jurisdiction becausethe land is public and subject to thedisposition of the Director of Lands.

ISSUE: Whether the dried up bed is public orprivate land.

HELD: The dried up bed was artificiallycaused; it does not fall under 307/461. UnderArticle 502, it is property of the publicdomain. Being of public character, its sale isdependent on the Director of Lands. Since thestate needs said property for drainagepurposes, it cannot be the subject of a sale.

Heirs of Navarro v. IAC, Heirs of Pascual

Pascual sought to have land registered; whichhe claimed the land was an accretion to hisproperty. Pascual’s property is bounded onthe west by the Bulacan River, on the east bythe Talisay River, and on the north by ManilaBay. The land sought to be registered asaccretion is at the tip of Pascual’s property.

Navarro, who had a fishpond lease of theforeshore with the Bureau of Lands, opposedPascual’s registration.

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During the pendency of the registration case,Pascual filed a complaint for ejectmentagainst Navarro.

The CA held that the land was Pascual’s byaccretion and Navarro should turn over to thelatter the portion of the same covered by hisforeshore lease.

ISSUE: Whether the land is Pascual’s byaccretion.

HELD: No, the land is property of the publicdomain.

There are 3 requisites for accretion: (1) thedeposit should be gradual and imperceptible;(2) that it be the result of the action of theriver; (3) that the land where accretion takesplace is adjacent to the riverbank.

In this case, 2 of the 3 requisites are were notmet. The accretion was a result not of theflow of the rivers but of Manila Bay. This isclear from the fact that the accretion is at thenorthern tip of the property, adjacent toManila Bay.

Ferrer v. Bautista

Ferrer claims the land in dispute by virtue ofaccretion; Bautista claims it by virtue of a freepatent granted by the Director of Lands.

The land is immediately south of Ferrer’sproperty.

ISSUE: Whether the land is Ferrer’s byaccretion or Bautista’s by virtue of a freepatent.

HELD: The land is Ferrer’s by accretion.

Alluvion gives to the owners of lands adjoiningthe banks of rivers or streams any accretionwhich is gradually received from the currentof the water. The rationale if to provide somecompensation to the owners because of itsubjection to destructive forces andeasements.

When the accretion was created, itsownership passed automatically to Ferrer andthe Director of Lands had no authority togrant a free patent over it.

Art. 458. The owners of estates adjoiningponds or lagoons do not acquire the landleft dry by the natural decrease of thewaters, or lose that inundated by them inextraordinary floods.

Definitions:

POND – a body of stagnant water without anoutlet, larger than a puddle but smaller than alake, or like a body of water with a small outlet.

LAGOON – a small lake, ordinarily of freshwater, and is not very deep, fed by floods, thehollow bed of which is bounded by theelevations of the land.

Gov’t v. Colegio de San Jose

The Gov’t and Colegio claim ownership over aparcel of land which is covered by Laguna deBay during the wet season. Colegio had titleto land up to the lakeshore.

The State claims the land is part of thelakeshore and of the public domain.

ISSUE: Whether the is Colegio’s or theState’s.

HELD: The land is Colegio’s.

Laguna is a lake, which is defined as a body ofwater formed in depressions of the earth. It isordinarily of fresh water coming from rivers,brooks, or springs, and connected to the seaby them.

THE LAND IS NOT PARTY OF LAGUNA DEBAY’S BED.

Undeniably, Laguna de Bay is a lake, and itsbed is public. What then is its bed? The law ofwaters defines the bed as level of the water atthe highest ordinary depth. This in turn isconsidered as the level during the dry season.

ARTICLE 367/458 DOES NOT APPLY BEC. LDBIS A LAKE, NOT A LAGOON.

The Gov’t also relies on Article 367/458 whichprovides that the owners of estates adjoiningponds or lagoons do not acquire the land leftdry by the natural decrease of the waters orlose the land inundated in extraordinaryfloods.

However, LDB is not a lagoon or pond but aLAKE.

THE LAW OF WATERS PROVIDES THAT LANDSACCIDENTALLY INUNDATED BY LAKES,CREEKS, RIVERS SHALL CONTINUE TOREMAIN PROPERTY OF THE RESPECTIVEOWNERS.

Even if the land was formed by accretion, theystill belong to Colegio.

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Art. 459. Whenever the current of a river,creek or torrent segregates from an estateon its bank a known portion of land andtransfers it to another estate, the owner ofthe land to which the segregated portionbelonged retains the ownership of it,provided that he removes the same withintwo years.

This article refers to avulsion, which is:

1. the process whereby the current of ariver, creek or torrent segregates froman estate on its bank a know portion ofland and deposits it on another.

2. The removal of a considerable quantityof earth upon or annexation to the landof another, suddenly and by theperceptible action of the water.

Alluvium v. Avulsion

Alluvium AvulsionGradual Sudden or abruptSoil cannot beidentified

Identifiable

Belongs to owner ofproperty to which it isattached

Belongs to owner fromwhose property it wasattached

Agustin v. IAC

Agustin owned the property to the east of theCagayan river; Melad owned the property tothe west.

Over 49 years, the river gradually shiftedfrom west to east, reducing Agustin’s propertyand increasing Melad’s.

In 1968, a big flood occurred, causing the bedto river to revert to its original course, cuttinginto Melad’s land.

Melad cultivated the land uncovered on theeastern portion of the river until Agustindrove them out.

ISSUE: Whether Agustin or Melad owns theproperty uncovered by the abrupt reversion ofthe river to its original course.

HELD: The land is Melad’s.

Melad acquired by accretion the land whichwas gradually deposited on his property.

This ownership was not lost by the reversionof the river to its original course; whichreversion cut through Melad’s property.

Articles 459 and 463 apply to the situation.

459 provides that when land is segregatedand transferred to another estate, the ownerof the segregated portion retains ownershipprovided he removes the same within 2 years.

463 provides that when the current of a riverseparates a portion of land from an estate,the owner retains possession.

Article 476. Whenever there is a cloud ontitle to real property or any interest therein,by reason of any instrument, record, claim,encumbrance or proceeding which isapparently valid or effective but is in truthand in fact invalid, ineffective, voidable, orunenforceable, and may be prejudicial tosaid title, an action may be brought toremove such cloud or to quiet such title.

An action may also be brought to prevent acloud from being case upon title to realproperty or any interest therein.

What kinds of actions are referred to inArticle 476?

1. Remedial; and

2. Preventative.

What “cloud” is referred to?

The cloud (or doubt) on title exists because:

a) of an instrument or record or claim orencumbrance or proceeding;

b) which is apparently valid or effective;

c) but is, actually invalid, ineffective,void, unenforceable, extinguished, orbarred by prescription;

d) and may be prejudicial to thte title.

Where the plaintiff is in possession of theland, the prescriptive period withinwhich to quiet title accrues only form thetime the adverse claim is made known.

Faja v. CA

Frial claims that Faja had been illegallyoccupying his titled property for 30 years. Healso claims that Faja’s right to question thevalidity of the title had prescribed, more than10 having passed since the issuance of thedecree of registration.

Faja claims that Frial never owned theproperty and his title was obtained throughfraud. In her counterclaim, she prays that shebe declared lawful owner of the property.

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Summary judgment was rendered in favor ofFrial.

ISSUE: Whether the right of Faja toquestion/quiet title had already prescribed.

HELD: The action had not yet prescribed; anaction to quiet title to property in thepossession of plaintiff is imprescriptible.

The prescriptive period began to run againstFaja only from the time she was served withthe complaint giving her notice that theproperty she had been occupying was titled inFrial’s name.

It is settled that one who is in actualpossession of land claiming to be ownerthereof may wait until his possession isdisturbed or his title is attacked before takingsteps to vindicate his right (or to quiet title).

The reason being that undisturbed possessiongives him a continuing right to seek aid of acourt of equity to ascertain and determine thenature of the adverse claim of a third partyand its effect on his own title, which right canbe claimed only by one who is in possession.

Where the plaintiff is in possession of theland, the prescriptive period withinwhich to quiet title accrues only form thetime the adverse claim is made known.

Viuda de Cabrera v. CA

Teokemian Sr. died, leaving 3 children with aparcel of land. A deed of sale was signed byony two of the children (Felicidad Teokemiandid not sign), conveying the property to Orais.

Orais had the entire property surveyed andregistered, including the 1/3 share ofFelicidad Tokemian.

Felicidad Teokemian remained in continuouspossession of her 1/3 share, later selling it toCabrera, who likewise occupied the lot.

Thirty years after the issuance of the title,Orais filed an action for reconveyance(quieting of title), praying that the Cabrerasbe ordered to vacate the property.

Cabrera claims that there is was an impliedtrust created when Orais acquired theproperty through fraud.

Orais claims that the action to recover on theimplied trust had already prescribed, morethan ten years having elapsed.

ISSUE: Whether the right of Cabrera torecover on the implied trust had alreadyprescribed.

HELD: The action had not yet prescribed;though an action for reconveyance of propertybased on a constructive trust prescribes tenyears from the date of titling of the property,this applies only when the trustee is not inpossession of the property.

When the trustee is in possession of the landsought to be reconveyed, the right toreconveyance does not prescribe because onewho is in actual possession of a piece of landclaiming to be owner thereof may wait untilhis possession is disturbed before taking stepsto vindicate his right.

The reason being that undisturbed possessiongives him a continuing right to seek aid of acourt of equity to ascertain and determine thenature of the adverse claim of a third partyand its effect on his own title, which right canbe claimed only by one who is in possession.

Where the plaintiff is in possession of theland, the prescriptive period withinwhich to quiet title accrues only form thetime the adverse claim is made known.

Spouses Hadji Ali Mamadsual v. J. Moson

Plaintiffs filed an action to quiet title whichwas dismissed by the judge who stated thatthey had no standing to bring such actionsince they did not have legal or equitabletitle.

Plaintiffs have been in open and adversepossession of the property since timeimmemorial.

ISSUE: Whether the plaintiffs have legal orequitable title to the property.

HELD: Plaintiffs have legal and equitable titleto the property.

Legal title means registered ownership whileequitable title means beneficial ownership.However, title to property does notnecessarily mena the OCT; it can connoteacquisitive prescription by possession in theconcept of owner.

Where the plaintiff is in possession of theland, the prescriptive period withinwhich to quiet title accrues only form thetime the adverse claim is made known.

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Titong v. CA

Titong sold a portion of his land to Espinosa;the latter then sold it to private respondentLaurio. Titong, however, continued cultivatingand tilling the land already sold and had beendoing so for 20 years, when Laurio enteredthe property and attempted to till it himself.

Titong filed an action for quieting of title.

ISSUE: Whether an action for quieting of titlewas proper; whether Titong has a right to theproperty.

HELD: An action for quieting of title wasimproper. The Civil Code provides that suchaction is availing only when there is a cloudon title by reason of any instrument, record,claim, encumbrance or proceeding. In thiscase, none of the causes were present; theonly possible action would have been forcibleentry.

The true issue is a boundary dispute. Titonghas no right over the property. He cannotclaim ordinary acquisitive prescriptionbecause he sold the property and yet alteredthe boundary line – obvious bad faith.

Extraordinary prescription is likewise absent,possession being less than 30 years.

Del Banco v. IAC

Brothers Pansacol purchased an island inTayabas as co-owners. Several agreementswere later executed as to the extent ofownership of each.

Later, an action for partition was brought bysuccessors in interest of the original co-owners; this was opposed by the successorsof the other co-owners, who claimed that theyhad exclusive ownership of the propertieswhich had already been partitioned.

ISSUE: Whether an the island property hadalready been partitioned by virtue of theagreements entered into by the co-owners.

HELD: There was no physical partition; therewas only ideal partition as to the share ofeach co-owner.

That the parties have been in possession ofportions of the lot and have even acquiredtitles thereto, there is no proof of partition.

Partition requires a subdivision plain withrespective titles issued to each; simpleagreement is insufficient.

Also, an action for partition does notprescribe.

Paulmitan v. CA

Donato and his brother inherited propertyfrom their mother. Donato caused theproperty to be registered in his name,claiming he was the only surviving heir. Helater sold the property to his daughter,Fanesa.

The property was levied by the governmentfor tax delinquency and was redeemed byFanesa.

The heirs of his brother filed a complaint topartition the property plus damages.

Donato’s daughter claims exclusive ownershipby virtue of the 2 sales and prescription.

ISSUE: Whether Fanesa is sole owner of theproperty.

HELD: No. Donato’s sale of the property tohis daughter was inofficious as far as theother half belonging to his brother wasconcerned.

However, can it be said that when Fanesaredeemed the entire property from the State,she became sole owner?

No. Redemption is not a mode of terminatingownership. The redemption by one co-ownerof the entire property does not vest title overthe same. Fanesa has a lien over the propertyand is entitled to reimbursement.

Mariano v. CA

Gosiengfao mortgaged the lot in question; hedied and then the mortgage was foreclosed.

He left several heirs but only one, Amparo,redeemed the property. Some of the otherheirs assigned their right to redeem in favorof Amparo; others did not (Grace).

Amparo then sold the lot to Mariano. WhenGrace learned of the sale, she filed acomplaint for recovery of possession and legalredemption with damages against Mariano.

ISSUE: Whether Grace has a right to theproperty.

HELD: Yes. It is settled that redemption of aco-owner inures to the benefit of all other co-owners.

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Adille v. CA

Felisa, the original owner of the property hadchildren by two marriages: Adille from thefirst and the Asejos from the second.

Felisa sold the property, pacto de retro, thendied. Adille was able to redeem the propertyand executed a deed of partition representinghimself to be the sole heir of Felisa therebyallowing him to title the land in his name.

The Asejos filed for partition with accounting,claiming Adille was only a trustee. In fact, anAsejo had all the while been occupying aportion of the property.

ISSUE: Whether the Asejos have a right tothe property.

HELD: Yes. It is settled that redemption of aco-owner inures to the benefit of all other co-owners.

Redemption is a necessary expense and theCivil Code provides that each co-owner shallhave a right to compel the other co-owners tocontribute to the expenses of preservation.

Adille is then a trustee who acquired theproperty through fraud.

Twenty five years have passed since he hadthe land titled in his name, has prescriptionset in?

No. Prescription as a means of terminating co-ownership must be preceded by repudiation,which is subject to the following conditions:

1. co-owner repudiated co-ownership;

2. such act is made known to the co-owners;

3. the evidence is clear and conclusive;

4. he has been in possession in concept ofowner for the required period.

In this case, the co-owners were kept in thedark regarding the titling in his name.Moreover, one Asejo continued to enjoypossession of a portion of the property.

Prescription shall begin from the moment thatthe Asejos learned of the fraud.

CONDOMINIUM ACTWhat is a condominium?

It is an interest in real property consisting of:

(a) a separate interest in a unit in aresidential, commercial, or industrialbuilding; and

(b) an undivided interest in commondirectly or indirectly, in the land onwhich it is located and other commonareas of the building.

(c) It may include, in addition, a separateinterest in other portions of such realproperty.

Sec. 4. Condominium act applies only if themaster or enabling deed is registered in theregistry of property and annotated on thecertificate/s of title of the land if such wasregistered under the Land Registration orCadastral Acts.

The master deed shall contain the following:

1. Description of the land

2. Description of the building

3. Description of the common areas

4. Statement of the exact nature of theinterest acquired by the purchaser in theunit

5. Statement of the purposes for which thebuilding and units will be used

6. Certificate of the registered owner of theproperty, if he is other than those executingthe master deed

7. The following plans:

a. Survey plan of the land Floor plan ofthe building

8. Any reasonable restriction not contrary tolaw on the right of the condominium ownerto dispose of his condominium.

Master deed may be amended, revoked, uponregistration instrument executed by registeredowners.

Sec. 5. Any transfer of a unit shall include thetransfer of the undivided interest in thecommon areas or the membership in thecorporation PROVIDED, where the commonareas are held by the unit owners as co-owners,no unit shall be transferred to non-Filipinocitizens or corporations, except in cases ofsuccession.

Sec. 6. Unless otherwise provided in the masterdeed, the incidents of a condo grant are asfollows:

1. The boundary are the interior surfaces ofthe walls, floors, ceilings, windows, and

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door. Not included are utilities, heating,conduits, etc.

2. Easement shall pass as an appurtenance ofthe unit

3. Unless otherwise provided, common areasheld in common by unit owners – equalshare for one unit

4. easement for ingress egress per unit

5. right to paint fix interior

6. right to mortgage, pledge,

7. right to sell unless master deed requiresoffer to condominium owner.

What is a condominium?

What is a separate interest in a unit?

Interest in common in land and common areas?

Can you sell unit but retain common areas? NO

Directly or indirectly? Direct – each unit ownerown common area; indirect – stockholdercorporation owns

What is a condominium corporation? Managesland, common areas and to hold indirectinterest in the land and common areas.

If you own condo unit where there is no condocorporation, can you sell you unit to theforeigner? NO.

If corporation – yes provided Filipino interestremains 60% or more.

Declaration of Restrictions must also beregistered.

Existence of condominium corporationcoterminous with the building.

Check out differences between regularcorporation and condo

Purpose – hold title over land and commonareas

Existence – 50 yrs

Dissolution – ordinary may be voluntarilydissolved; condo – subject to conditionsprovided by law: project destroyed,uninhabitable, etc.

Whenever you buy a unit, you are given a title(condo cert of title) but no title to the land. Thesale is annotated in the title to certificate/s oftitle, if there is no condo corp. I fthere is acondo corp, land is in name of corp, no more

annotation because you are a stockholder of thecorporation.

1 vote per unit.

No pay of dues, lien by corporation on units.

Not every purchaser of a condominiumunit is a shareholder in the corporation.The Mater Deed determines whenownership of the unit and participation inthe corporation vests in the purchaser.

Sunset View Condominium Corp. v.Campos

Sunset View filed for the collection ofassessments levied against privaterespondents herein.

The private respondents interposed theobjection that the City Court and CFI have nojurisdiction.

The CFI agreed and held that pursuant to theCondominium Act, the private respondentswere holders of separate interests andconsequently shareholders of the SunsetView.

The CFI ordered Sunset View to ventilate itsgrievance with the SEC, which has exclusiveoriginal jurisdiction over controversies arisingbetween shareholders of a corporation.

ISSUE: Whether the CFI or the City Courtshave jurisdiction over the claims filed bySunset View, the condominium corporation.

HELD: The City Court and the CFI havejurisdiction.

The private respondents are not membersor shareholders in the condominiumcorporation.

The Condominium Act leaves to the MasterDeed the determination of when theshareholding in the corporation will betransferred to the purchaser of the unit.

In this case, the Master Deed provides thatownership is transferred only upon fullpayment of the purchase price.

Private respondents have not yet fully paidthe purchase price, hence they are notshareholders and the SEC has no jurisdictionover the claims.

*now, special courts handle intra-corporatedisputes

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No alterations may be made without thewritten consent of the homeowners;upon full payment of the purchase price,title must be transferred, despite amortgage constituted by the developer;the developer must provide parking.

G.O.A.L. v. CA

NHA extended a loan to GOAL for the latter toconstruct a condominium. Construction beganbut the contractor abandoned the projectwhen it was only 60% completed.

A year after the abandonment by thecontractor, GOAL offered units for sale;private respondents were purchasers who hadfully paid for the units.

GOAL obtained an additional loan from NHA tocontinue construction with a conditionimposed by the latter for the former to holdon to the certificate/s of title.

Private respondents raise 3 complaints: (1) tostop the illegal continuation of theconstruction; (2) to deliver privaterespondent Teng’s certificate/s of title; (3) toprovide adequate parking spaces.

The HLURB and the OPLA ruled in favor of therespondents.

ISSUE: Whether the developer, GOAL, can becompelled (1) to stop the illegal continuationof the construction; (2) to deliver privaterespondent Teng’s certificate/s of title; (3) toprovide adequate parking spaces.

HELD: Yes. PD 957 provides:

(1)No developer can alter plans without thepermission of the HLURB and the writtenconformity of the homeowners. This is anamendment of the master deed.

(2)Upon full payment of the purchase price,the developer is mandated by law todeliver the certificate/s of title to thebuyers. In fact, even if the unit ismortgaged by the developer, thedeveloper must redeem the mortgagedand deliver certificate/s of title to thebuyer.

(3)Only street parking is excluded from whatshould be given for free by the developer.Free parking may be in the basement or onthe first floor. Furthermore, in acondominium, unit owners have anundivided interest over common areas andfacilities, including parking spaces.

Article 491. None of the co-owners shall,without the consent of the others, makealterations in the thing owned in common,even though benefits for all would resulttherefrom.

However, if the withholding of the consent byone or more of the co-owners is clearlyprejudicial to the common interest, thecourts may afford adequate relief.

*What is an alteration?

(1) It is a CHANGE;

(2) Which is more or less PERMANENT;

(3) And changes the USE of the thing;

(4) And PREJUDICES the condition of thething or its enjoyment by others.

Or, according to Manresa:

It is an act of ownership, which may be material(changes nature) or metaphysical (changesuse), and gives rise to a real right over theproperty owned in common.

What are examples of an alteration?

1. Sale, donation, or mortgage of thewhole property (the transaction would bevoid only to the extent of the co-owner whodid not consent);

2. Sale, donation or mortgage of part ofthe property with definite boundaries (thesale is valid but subject to the result of thesubsequent partition);

3. A voluntary easement;

4. Lease of real property if

a. The lease is registered;

b. Or the lease is for more than oneyear (whether recorded or not)

5. The construction of a house on a lotowned in common;

6. Any other act of strict dominion orownership where any encumbrance ordisposition was held implicitly to be an actof alteration;

7. Impliedly, contracts of long duration.

When is an alteration deemed illegal?

An alteration is deemed illegal when it is madewithout the express or implied consent of theco-owners.

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Note that implied consent by the others will notgive the one making the alteration the right toseek reimbursement.

What are the effects of an illegalalteration?

1. The co-owner responsible may lose whathe has spent;

2. He would be liable for losses and damages;

3. Benefits derived by the co-ownershipbelong to it;

4. Demolition can be compelled;

5. In case a house is constructed on acommon lot, all the co-owners will beentitled to a proportionate share of therent.

Imperial v. CA

Mariano and Adela were siblings who inherited2 lots (1052 and 1091) from their mother. Tofacilitate titling of the lots, A executed awaiver of rights in favor of Mariano; anotherdocument was executed where Marianoacknowledged the simulated character of thewaiver and Adela’s ½ share in the inheritance.

Fraudulently, M sold 1052 to a third person/s.

The CA ruled that since M sold 1052 and failedto give the heirs of A their share in theproceeds, he is deemed to have waived hisright to 1091. Damages were also awarded.

Imperial effectively partitioned the property.

The SC affirmed the CA’s decision.

There is no co-ownership when thedifferent portions owned by differentpeople are already concretelydetermined and separately identifiable.

Si v. CA

The Armada siblings, C, J, and S, receivedfrom their parents property in Pasay. Thedeeds of sale particularly described theportion conveyed to each son in metes andbounds. However, the certificate of title of theoriginal lot remained intact.

C later sold his share to Si. J and S sought toannul the sale, claiming they had a right ofredemption.

ISSUE: Whether the brothers have the rightof redemption.

HELD: No. The co-ownership has alreadybeen terminated.

Article 484 provides that there is no co-ownership when the different portions ownedby different people are already concretelydetermined and separately identifiable.

In this case, it is evident that the deeds ofsale to each son particularly identified theconveyed portion of the master lot.

Article 492. For the administration andbetter enjoyment of the thing owned incommon, the resolutions of the majority ofthe co-owners shall be binding.

There shall be no majority unless theresolution is approved by the co-ownerswho represent the controlling interest in theobject of the co-ownership.

Should there be no majority, or should theresolution of the majority be seriouslyprejudicial to those interested in theproperty owned in common, the court, atthe instance of an interested party, shallorder such measures as it may deemproper, including the appointment of anadministrator.

Whenever a part of the thing belongsexclusively to one of the co-owners, and theremainder is owned in common, thepreceding provisions shall apply only to thepart owned in common.

What are acts of administration ofmanagement?

They are those:

(a) that do not involve an alteration;

(b) those that may be renewed from time totime;

(c) those that have transitory effects, that is,do not bind the co-ownership for a longtime in the future;

(d) those that do not give rise to a real rightover the thing owned in common; those,which even if called an alteration, do notaffect the substance or nature of the thing;

(e) those for the common benefit of all theco-owners and not for only one or some ofthem.

How can we tell if the act is alteration oradministration?

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What are examples of acts ofadministration?

(a) Lease of one year or less, if unregistered;

(b) Appointment of a co-owner or a thirdperson as administrator.

What are the limitations on the right of thefinancial majority?

(a) There must be NOTICE to the minority ofresolutions;

(b) Only the urgency of the case and difficultyof meeting would justify proceeding withoutnotice;

(c) The minority may appeal to the courtagainst the majority decision when:

a. There is no real majority;

b. The majority refuses tocorrect abuse of administrationor maladministration;

c. The minority is made victim offraud;

d. An alteration is agreed upon.

e. The resolution is SERIOUSLYPREJUDICIAL to the rights ofan individual co-owner;

i. Loans without sufficientsecurity;

ii. Encumbrance ordisposition is made(alteration);

iii. Abusive administrator isnot replaced.

Article 493. Each co-owner shall have thefull ownership of his part and the fruitsand benefits pertaining thereto, and

he may therefore alienate, assign ormortgage it and even substitute anotherperson in its enjoyment, except whenpersonal rights are involved.

But the effect of the alienation or themortgage, with respect to the co-owners,shall be limited to the portion which maybe allotted to him in the division upon thetermination of the co-ownership.

What is the effect of a co-owner’s sale ofthe entire property without authority ofthe others?

The sale is valid only insofar as his share isconcerned.

In case a co-owner sells his share, whoparticipates in the partition, the vendor orthe vendee?

It depends. If the vendee is already inpossession, then he alone may participate. If,however, after the share is sold, the vendorretains a real right over it, both he and thevendee may participate.

Can a co-owner’s share be attached even ifthere hasn’t been partition?

Yes.

If A, B and C are co-owners of a residence,each owning a floor, can one of them sellhis share to a third person/s who willconvert the same into a factory?

No. In this case, the use of the building wouldchange and the interests of the others would bejeopardized.

If A and B own a common dwelling, can one ofthem sell his share to a stranger?

No. The interest and privacy of the other wouldbe jeopardized. “Personal right,” as it is used inArticle 493 should be understood to be NOT atechnical term.

Article 494. No co-owner shall be obligedto remain in the co-ownership. Each co-owner may demand at ANY TIME thepartition of the thing owned in common,insofar as his share is concerned.

Nevertheless, an agreement to keep the thingundivided for a certain period of time, notexceeding ten years, shall be valid. Thisterm may be extended by a newagreement.

A donor or testator may prohibit partition for aperiod which shall not exceed twenty years.

Neither shall there be any partition when it isprohibited by law.

No prescription shall run in favor of a co-owneror co-heir against his co-owners or co-heirsso long as he expressly or impliedlyrecognizes the co-ownership.

*What is the reason for allowing partitionat ANY TIME?

The law discourages co-ownership because toremain in such an arrangement subjects aperson to the desires of the rest and conflicts inmanagement are bound to arise.

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*When may a co-owner NOT successfullydemand partition?

(a) if by agreement, partition is prohibited (10years max.);

(b) if partition is prohibited by a donor ortestator (20 years max.);

What if all donees agree to partition thendonor challenges partition?

The donation may be revoked due to a violationof a condition imposed by the donor.

What if heirs violate partition prohibitionof testator?

No one can bring an action to challengepartition.

What about administrator?

(c) if partition is prohibited by law (CPG);

(d) if physical partition would render theproperty unserviceable (the property maybe allotted to one who will indemnify theothers or it may be sold to a thirdperson/s);

(e) if the legal nature of the common propertydoes not allow partition (like party walls).

Requirements

a. Repudiation with notice

b. Must be in a clear and convincing manner

c. Other requirements of prescription

d. Period of prescription

Is a tax declaration in one’s namerepudiation?

It is not sufficient notice of repudiation.

Is registration of property in one’s namerepudiation?

Yes, registration is sufficient repudiation.

Registration of the co-owned property bya co-owner is an act of repudiation and isa constructive trust wherein the action toassail must be brought within 10 years ofregistration.

Si v. CA

Siblings Galileo, Eulalio, Juanita, and Vicenteinherited a parcel of land from their brother.

In 1953, Galileo caused the property to beregistered in his name alone.

In 1968, the heirs of the excluded siblingsbrought suit against the heirs of Galileo forthe partition or reconveyance of the property.

ISSUE: Whether the heirs of the excludedsiblings have a right of action against theheirs of Galileo.

HELD: No; the action has already prescribed.

Generally, prescription does not run againstco-owners, as long as the one possessingrecognizes the co-ownership.

However, a co-owner in possession of the co-owned property is deemed an implied trusteeand possession adverse to the implied trust isrecognized as a repudiation of the co-ownership.

This repudiation, if made unequivocally andwith knowledge to the co-owners, if provedconvincingly, can cause prescription to run.

When Galileo registered the property in hisname, this is deemed to be a repudiationsufficient to cause the running of prescription.

An action to reconvey land based on animplied trust prescribes after 10 years – theaction was brought 15 years after theregistration.

A contract providing for the non-dissolution of the co-ownership until thesubdivided lots are sold is valid.

Tuason v. Tuason, Gregorio Araneta, Inc.

One of the three Tuason siblings sold hershare to GA. GA then proposed to theremaining two the subdivision of the propertyand its sale to the public; both assented.

The terms of the contract provided that theco-ownership should subsist until all of thesubdivided lots have been sold.

One of the Tuason siblings decided that shewanted out of the co-ownership and filed acomplaint for partition. The lower courtdismissed the complaint.

In her appeal, she raised the issue of:

ISSUE: Whether the terms of the contractrequiring co-ownership until the sale of all thelots is contrary to the Civil Code provision

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prohibiting co-owners from being obliged toremain part of the community.

HELD: The contract is perfectly valid.

The contract is, in fact, designed for theultimate end of terminating the co-ownership.At the time of the appeal, already 97.5% ofthe subdivision had been sold, and for ahandsome profit as well.

The co-owners being forced to remain in theco-ownership should be taken to be a meansto an end of disposing the lots andterminating the co-ownership.

Q: What it the lots aren’t sold within tenyears? Could there be an indirect violation ofArticle 494?

No, by agreeing to subdivide, develop, andsell the property, the parties actually enteredinto an agreement for partition.

Clear repudiation is required forprescription to run against co-owners.

Santos v. Santos

Eliseo and Ladislao Santos, brothers, inheritedfrom their sister and father, parcels of land.Eliseo claims that Ladislao executed aCombined Deed of Partition whereby thelatter conveyed the entire property to theformer.

When Ladislao sued for reconveyance orpartition, Eliseo set up the defense of theCombined Deed of Partition and acquisitiveprescription.

ISSUE: Whether Ladislao has a cause ofaction.

HELD: Yes, the co-ownership subsists.

Eliseo failed to present the deed upon whichhis claim is based. The claim of subsistingownership must be refuted by the bestevidence obtainable.

The issue more important is prescription:Did Eliseo acquire Ladislao’s sharethrough prescription?

No. Prescription of an action to recover froman implied trust requires clear repudiationby the possessor of the object of the co-ownership. In this case, there was no suchrepudiation.

Though Eliseo’s son remained on the propertybelonging to Ladislao, this can be consideredas being assented to by the latter since the

son of Eliseo had been occupying the propertyeven before the death of the testators.

Article 495. Notwithstanding theprovisions of the preceding article, the co-owners cannot demand a physicaldivision of the thing owned in common,when to do so would render itunserviceable for the use for which it isintended. But the co-ownership may beterminated in accordance with Article 498.

Article 496. Partition may be made byagreement between the parties or byjudicial proceedings. Partition shall begoverned by the Rules of Court insofar asthey are consistent with this Code.

What are the classifications of partition?

As to CAUSE:

1. extrajudicial or conventional

2. judicial

As to PERMANENCE:

1. provisional or temporary

2. permanent

As to SUBJECT MATTER:

1. real property

2. personal property

As to FORMS AND SOLEMNITIES:

1. partition by judicial decree

2. partition registered in the Registry ofProperty

3. partition in a private instrument

4. partition in a public instrument

5. oral partition

What law governs partition?

a. The Civil Code

b. Suppletorily, the Rules of Court.

What must a person seeking partition do?

He must set forth in his complaint the (1)description of the real estate, the (2)nature and extent of his title, and he must(3) join all those with an interest in theproperty as defendants.

What must the court do if it finds thatplaintiff has a right to demand partition?

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It shall order partition of the property.

The parties may partition the property amongthemselves.

What if the parties fail to agree on thepartition?

The court will appoint not more than 3disinterested persons as commissioners tomake the partition, commanding them toallocate to the parties a part of the property asthe court shall order.

Partition may be oral or written; in aprivate or public document.

Pada Kilario v. CA, Pada

During Jacinto’s lifetime, he allowed hisbrother, the father of petitioner herein, tooccupy a portion of his property.

When Jacinto died, his heirs executed anextrajudicial partition in a private document.

They asked petitioner to leave the property;she refused. An action for ejectment wasfiled.

Petitioner claims that the partition was invalidfor being in a private document and that theportion she is occupying was subsequentlydonated to her by a number of the heirs ofJacinto.

ISSUE: Whether the extrajudicial partition ina private document is valid.

HELD: Yes, the partition is valid. A partitionmay be in a public or private document oreven oral.

Since the partition was valid, the conveyanceto petitioner is invalid because those whomade the conveyance were no longer ownersof the property conveyed.

Where a co-owned property is titled inthe name of one co-owner and there isno indication on the certificate/s of titleof co-ownership, a third person may relyon the face of the title in his purchase ofthe said property.

Cruz v. Leis

Getrudes Leis obtained a loan from Cruz; thiswas secured by a REM on the subjectproperty. She failed to pay and the propertywas foreclosed.

Her heirs now claim that the property wasconjugal, having been acquired during themarriage of their parents. Being so, upon thedeath of their father, they became owners ofone half of the property.

Cruz claims that the property is paraphernal,the certificate/s of title indicating thatGertrudes is a widow and the title is in hername. Cruz also argues that when Gertrudesredeemed the property after a previousmortgage, it became hers alone.

ISSUE: Whether the mortgage of theproperty was valid.

HELD: Yes, the mortgage was valid.

Though as a rule, a co-owner can dispose orencumber only his share of the co-ownership,in this case, the certificate/s of title indicatedGertrudes as the absolute owner of theproperty.

A person dealing with registered land is notrequired to go beyond the certificate/s of titleto determine the condition of the property.

Where several properties were orallypartitioned but one was inadvertentlyleft out of the court order approving thepartition, the oral partition shall be giveneffect.

Maestrado v. CA

Ramon Chavez died, leaving several heirs.

An oral partition was conducted and the samewas approved by the court.

Concepcion, Angel, Amparo, and Salvadorreceived lot 3046.

Josefa and Carmen received 4 lots, includingthe property in dispute, lot 5872.

However, 5872 was not included in thecourt’s order approving the partition.

To set things straight, Concepcion, Angel,Amparo, and Salvador (or their successors)executed quitclaims confirming the existenceof the oral partition.

Subsequently, Concepcion, Angel, Amparo,and Salvador (or their successors) requestedfor the partition of 5872 and the distributionof their respective shares.

Petitioners, Josefa and Carmen filed an actionfor quieting of title.

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ISSUE: Whether private respondents,Concepcion, Angel, Amparo, and Salvador (ortheir successors), have a right to theproperty.

HELD: They have no right.

The property was ceded to petitioners uponthe execution of the oral partition which theythemselves confirmed in their quitclaims.

Article 497. The creditors or assignees ofthe co-owners may take part in the divisionof the thing owned in common and objectto its being effected without theirconcurrence.

But they cannot impugn any partition alreadyexecuted, unless there has been fraud, or incase it was made notwithstanding a formalopposition presented to prevent it, withoutprejudice to the right of the debtor orassignor to maintain its validity.

*May creditors or assignees impugn apartition already executed?

Generally they may NOT, except:

1. Where there has been fraud;

2. Where a formal opposition has beenpreviously presented.

Is a mortgage sufficient security againstfraud?

Yes.

Who are the creditors referred to in thisarticle?

All creditors who became so during theexistence of the co-ownership.

In case a co-owner sells his share, whoparticipates in the partition, the vendor orthe vendee?

It depends. If the vendee is already inpossession, then he alone may participate. If,however, after the share is sold, the vendorretains a real right over it, both he and thevendee may participate.

Article 498. Whenever the thing isessentially indivisible and the co-ownerscannot agree that it be allotted to one ofthem who shall indemnify the others, itshall be sold and its proceeds distributed.

What objects are included in this article?

Of course, essentially indivisible objects, suchas automobiles.

However, essentially divisible objects, such asland, may also be covered if their division wouldbe to the prejudice of the interests of theparties.

What is the procedure in the partition of anessentially indivisible object?

1. Allot the thing to a co-owner, who shallindemnify the others;

2. If the above is not agreed upon, sell thething and distribute the proceeds.

Article 499. The partition of a thingowned in common shall not prejudice thirdpersons, who shall retain the rights ofmortgage, servitude, or any other realrights belonging to them before thedivision was made.

Personal rights pertaining to third personsagainst the co-ownership shall also remainin force, notwithstanding the partition.

If A, B, and C, as co-owners of a lot,mortgage the same to X and thensubsequently partition it, what happens tothe mortgage?

The mortgage would subsist over the 3 post-partition lots.

Who are third person/s in this article?

All those who did not participate in thepartition.

Article 500. Upon partition, there shall bea mutual accounting for benefits receivedand reimbursements for expenses made.Likewise, each co-owner shall pay fordamages caused by reason of hisnegligence or fraud.

Article 501. Every co-owner shall, afterpartition, be liable for defects of title andquality of the portion assigned to each ofthe co-owners.

*What are the effects of partition?

1. mutual accounting for benefits received;

2. mutual reimbursement for expenses;

3. indemnity for damages caused bynegligence or fraud;

4. reciprocal warranty for:

a. defects of title

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b. quality or hidden defects

5. each former co-owner is deemed to havehad exclusive possession of the partallotted to him for the entire period duringwhich the co-possession lasted;

6. partition confers upon each the exclusivetitle over his respective share.

How is co-ownership extinguished?

1. judicial partition;

2. extrajudicial partition;

3. prescription by co-owner;

4. prescription by stranger;

5. merger in one co-owner;

6. loss or destruction;

7. expropriation.

If A and B partitioned land co-owned bythem and later, X successfully claimsownership of the land allotted to A, whathappens?

A and B must both bear the loss. B must givehalf of the land allotted to him to A.

POSSESSIONArticle 523. Possession is the holding of a

thing or the enjoyment of a right.

Why entire property to possession?

Possessor may not be owner. Possession here isseparate from ownership.

Is possession a fact or a right?

Both. It is a fact since it exists; but from themoment it exists, certain consequences follow,making it also a right.

What are the viewpoints of possession?

1. Jus possidendi or right TO possession –this is an incident of ownership.

Ex. I own a house; I am entitled topossess it.

2. Jus possesionis or right OF possession –this is a right independent of ownership.

Ex. I am renting a house; I am entitledto possess it.

*What are the degrees of possession?

(a) Grammatical – mere holding withouthaving any right (thief)

(b) Juridical – possession with juridical titlebut not ownership (lessee, depositary,pledge)

(c) Real – possession with just title but notfrom the true owner (purchase ofproperty not owned by seller in goodfaith

(d) Dominium – possession with a title ofdominium or a just title from the owner

*What are the requisites or elements ofpossession?

(a) There must be a holding, detention orcontrol of a thing or a right, actual orconstructive;

(b) There must be a deliberate intentionto possess; this is a state of mind(animus possidendi);

(c) The possession must be by virtue ofone’s own right (real or dominium; notpossession because of agency)

What does actual or constructive holdingor detention mean?

Ex. There is a large tract of land, of which theowner actually occupies only a fraction andconstructively occupies the rest.

It is essential in constructive possession thatthe property be not in the adverse possessionof another.

What are the classes of possession?

(a) In one’s own name or that of another(Article 524);

(b) In the concept of owner and in theconcept of holder(Article 525);

(c) In good or bad faith.

Are ownership and possession the same?

No. Ownership is different from possession.Though one owns property, the right to possessthe same may be in the hands of another as atenant or lessee.

Article 524. Possession may be exercisedin one’s own name or in that of another.

Who is in actual possession of a rented parcel ofland?

The lessor, through the tenant, is in actualpossession in the concept of owner.

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The lessee is in actual possession in the conceptof holder.

What are the kinds of possession inanother’s name?

(a) Voluntary – as when the agentpossesses for the principal by virtue ofagreement;

(b) Necessary – as when a motherpossesses for a child still in her womb;

(c) Unauthorized – this will become theprincipal’s possession only after therehas been a ratification without prejudiceto the effects of negotiorum gestio(officious management).

Supposing a tenant is ousted by a thirdperson, can the OWNER of the propertybring an action for forcible entry?

Yes. The landlord was in actual possessionthrough the tenant and stands to losepossession and even ownership.

Possession may be exercised in another’sname. Article 524 of the Civil Codeprovides: “Possession may be exercisedin one’s own name or that of another.”

De Luna v. CA

De Luna filed a case of forcible entry againstDimaano, alleging that the latter entered hisland, began plowing it, and erected a barbedwire fence.

Dimmano raised the defense the De Luna wasnot the owner of the property and that theproperty was actually owned by Dequiña. Hefurther claims that Dequiña leased theproperty to him.

ISSUE: Whether possession may be exercisedin another’s name.

HELD: Yes, possession may be exercised inanother’s name. Article 524 of the Civil Codeprovides: “Possession may be exercised inone’s own name or that of another.”

The issue of prior possession had to beresolved to determine who had a better rightto possess the property – the rule inejectment cases being that the only issue tobe resolved is who is entitled to physical ormaterial possession of the premises or defacto possession.

Now, if De Luna is able to prove priorpossession in himself, then he may recoverpossession from Dimaano.

De Luna was able to prove priorpossession through the testimony of histenants who had been occupying the landfor several years – this is the possessionexercised by De Luna in another’s name.

De Luna also proved through a neighbor’stestimony that Dequiña’s father delivered theproperty to him and his mother.

However, since Dimaano alleged thatDequiña, and not De Luna, owned theproperty, the court felt the need to look intothe issue of ownership.

Dimaano attempted to prove Dequiña’sownership through tax declarations by thelatter on the property but the court held thatthis alone was not sufficient to proveownership. The court held that the priorpossession of De Luna beats the flimsy claimof Dimaano without prejudice to thesubsequent determination of true ownershipin an appropriate proceeding.

Article 525. The possession of things orrights may be had in one of two concepts:either in the concept of owner, or in that ofthe holder of the thing or right to keep orenjoy it, the ownership pertaining toanother person.

Whose concept?

Owner - Your own and others, must act andclaim to be owner. Paying taxes, gettingboarders.

What is the importance of this classification?

If in concept of holder, the owner benefits fromyour possession.

If in the concept of owner, the possessor mayget the property through acquisitiveprescription.

What are the two concepts of possession?

1. In the concept of owner – one who,whether in good or bad faith, claims tobe, and acts as if he is the owner.

2. In the concept of holder – one whorecognizes another to be the owner.

Article 526. He is deemed a possessor ingood faith who is not aware that thereexists in his title or mode of acquisition anyflaw which invalidates it.

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He is deemed a possessor in bad faith whopossesses in any case contrary to theforegoing.

Mistake upon a doubtful or difficult question oflaw may be the basis of good faith.

The person here is not an owner – there is aflaw or defect.

What is the importance of distinguishing gf andbf?

Prescription

Indemnity

Buyer buys title thinking the vendor is theperson on the title GF.

Buys the property from the widow of adeceased person, did not know she had children

GF

Buys land with Torrens but title is annotated lispendens BF

If you are in the business of lending money,you have to look beyond the title.

Can a person in possession of a validTorrens title be in bad faith?

No. The articles on bad faith must be reconciledwith the doctrine of indefeasibility of a Torrenstitle. It has been held by the SC that a holder ofa title is in good faith until such title is declarednull and void by the court.

What kind of mistake may be the basis ofgood faith?

It must be a mistake upon a doubtful or difficultquestion of law provided such ignorance is notgross and inexcusable.

Is bad faith transmissible to successors ininterest?

Not necessarily. A child or heir may bepresumed to be in good faith notwithstandingthe father’s bad faith.

Article 527. Good faith is alwayspresumed, and upon him who alleges badfaith on the part of the possessor rests theburden of proof.

What is the reason for presuming good faith?

Presumption of innocence; everyone should bepresumed honest until proven otherwise.

Good faith is always presumed and badfaith must be established by clear andconvincing evidence.

Carreon v. Agcaoili

Carreon claimed that property inherited fromher husband was hers along; a correspondingcertificate/s of title was issued. The land waslater sold to Agcaoili and a certificate/s of titlewas issued in his name.

Carreon’s children filed a complaint againstAgcaoili to have the deed of sale declared as amortgage and to recover ½ of the property –their action was predicated on Agcaoili’s badfaith.

ISSUE: Whether Agcaoili was in bad faith.

HELD: Agcaoili was in good faith.

Good faith is always presumed and bad faithmust be established by clear and convincingevidence.

In this case, there was no showing of badfaith on Agcaoili’s part. Though he was atownmate of the Carreon’s, he cannot beexpected to know that his vendor hadchildren.

Besides, the property was titled and the buyerhad no responsibility to look beyond the title:which had an expired lien that was of noconsequence to the purchase.

One who purchases real property whichis in the actual possession of othersshould, at least, make some inquiryconcerning the rights of those inpossession.

Republic v. CA.

102 SCRA 331. L-42856.

Ramos filed a Homestead application for landin Nueva Ecija.

Pending this application, Ramos went toIsabela and found a piece of land covered bya Homestead application by Lopez but clearlyabandoned by the latter. Ramos filed anotherapplication over this land.

Both Ramos’s applications were granted andhe obtained a loan from PNB with the Isabelaland as REM.

Subsequently, Ramos discovered that therewere people occupying his Isabela land, hefiled a complaint for the recovery ofpossession against them and won. These

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people sent a petition to the SANR andalleged the nullity of Ramos’s secondHomestead application, desiring to apply forpatents on the same land.

ISSUE: Aside from the many Public Land Actissues, whether PNB, in accepting the REM ofthe Isabela property was in bad faith.

HELD: PNB was in bad faith.

One who purchases/accepts for REM realproperty which is in the actual possession ofothers should, at least, make some inquiryconcerning the rights of those in possession.

In the absence of such an inquiry, PNB cannotbe considered as a good faith mortgagor asagainst such possessors.

However, since Ramos’s title over the land isvalid, the REM is valid as between Ramos andPNB.

There is presumptive knowledge of theexistence of a Torrens Title.

J.M. Tuason v. Munar

J.M. Tuason, the owner of a subdivision,brought an action for ejectment againstMunar.

Munar claims possession in good faith andraises the defense that Tuason’s certificate/sof title, which was issued more than 20 yearsbefore, was void due to fraud and thatpursuant to a compromise agreementbetween Tuason and Deudor (Munar’spredecessor in interest), Munar had a right tooccupy the property.

ISSUE: Whether Munar can assail Tuason’sdecree of registration and correspondingcertificate/s of title 20 years after its issuanceand whether Munar was a possessor in goodfaith.

HELD: Munar is barred from assailing the title20 years after its registration. He is in badfaith because there is presumptiveknowledge of the issuance of the certificate/sof title to Tuason.

Munar instead chose to ignore the certificate/sof title and relied on his predecessor’s claimof ownership.

Mistake upon a doubtful or difficultquestion of law, provided such ignoranceis not gross and inexcusable, can be thebasis of good faith.

Kasilag v. Rodriguez

Ambrosia, the mother of the plaintiffs herein,mortgaged, in a public document, theimprovements on the property in dispute toRodriguez. Because of her failure to payinterests when due, the parties entered into averbal agreement whereby Rodriguez wouldcondone interest but take possession of theland and enjoy the fruits; he also introducedsignifact improvements.

However, the land was acquired by Ambrosiaas a homestead and could not be subject to areal encumbrance, as a contract of antichresisis.

The heirs of Ambrosia seek to recover theproperty from Rodriguez.

ISSUE: Whether Rodriguez was a possessorin good faith entitling him to indemnity for theimprovements constructed.

HELD: Rodriguez is in good faith.

Mistake upon a doubtful or difficult question oflaw, provided such ignorance is not gross andinexcusable, can be the basis of good faith.

Rodriguez is not a lawyer and is not expectedto know the various intricacies of a contract ofantichresis.

He is entitled to indemnity.

Article 528. Possession acquired in goodfaith does not lose this character except inthe case and from the moment facts existwhich show that the possessor is notunaware that he possesses the thingimproperly or wrongfully.

Examples of when bad faith begins:

1. Receipt of judicial summons;

2. Receipt of a letter demanding vacationof the property, if the person does notinvestigate and he is later defeated.

Article 529. It is presumed thatpossession continues to be enjoyed in thesame character in which it was acquireduntil the contrary is proved.

What are the presumptions regardingpossession?

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(a) Good faith is presumed;

(b) Continuity of character of possession;

(c) Non-interruption of possession;

(d) Presumption of just title;

(e) Non-interruption of possession ofproperty unjustly lost but legallyrecovered;

(f) Possession during intervening period;

(g) Possession of movable with realproperty;

(h) Exclusive possession of commonproperty.

Article 530. Only things and rights whichare susceptible of being appropriated maybe the object of possession.

What is res nullius and can it bepossessed?

It is abandoned or ownerless property. It maybe possessed but it cannot be acquired throughprescription, which presupposes prior ownershipin another. It can be acquired throughoccupation.

Article 531. Possession is acquired by thematerial occupation of a thing or theexercise of a right, or by the fact that it issubject to the action of our will, or by theproper acts and legal formalities establishedfor acquiring such right.

How is possession acquired?

(a) Material occupation or detention

a. Constitutom possesorium(possessed as owner, nowjuridical possession)

b. Tradition brevi manu(juridical possession, nowpossesses as owner)

(b) Exercise of a right

(c) Subjection to our will – by mereagreement or the delivery of keys

a. Tradition longa manu(delivery by consent)

(d) Constructive possession or properacts and legal formalities –succession, donation, execution ofpublic instruments, court order)

What are the essential requirements forpossession?

(a) corpus – the thing physically detained;

(b) animus – intent to possess(express/implied);

Can land adversely occupied by one becontstructively possessed by another?

No. If an entire parcel is possessed under claimof ownership, there is constructive possessionof the entire parcel, unless a portion thereof isadversely possessed by another.

Article 532. Possession may be acquiredby the same person who is to enjoy it, byhis legal representative, by his agent, or byany person without any power whatever;but in the last case, the possession shall notbe considered as acquired until the personin whose name the act of possession wasexecuted has ratified the same, withoutprejudice to the consequences ofnegotiorum gestio in a proper case.

How is possession acquired from theviewpoint of who possesses and what arethe essential requisites for each?

(a) Personal;

(a) Intent to possess

(b) Capacity to possess

(c) Object must be capable ofpossession.

(b) Through an authorized person;

(d) Intent to possess for a principal

(e) Capacity to possess for another

(f) Principal has intent and capacityto possess

(c) Through an unauthorized person uponratification (negotiorum gestio).

(g) Intent to possess for another

(h) Capacity of principal to possess

(i) Ratification by principal(retroactive)

What is negotiorum gestio?

It is the voluntary taking charge of another’sbusiness or property without any power fromthe owner when the property or business isneglected or abandoned.

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Article 533. The possession of hereditaryproperty is deemed transmitted to the heirwithout interruption an from the moment ofthe death of the decedent, in case theinheritance is accepted.

One who validly renounces an inheritance isdeemed never to have possessed the same.

Importance is for acquisitive prescription.

When does the heir acquire possession ofthe inherited property?

1. If the heir accepts – from themoment of death, since there is nointerruption; the possession of thedeceased is tacked to the possession ofthe heir.

2. If the heir refuses or is incapacitatedto inherit – he is deemed never to havepossessed.

Problem: Father dies on January 1; sonaccepts on January 30; in the meantime,an administrator manages and is inpossession of the property.

Who is in possession of theproperty from Jan. 1-30?

The son is in actual possession in theconcept of owner through theadmininstrator, who possessed it in theconcept of holder.

Who may institute an action forforcible entry against an intruder?

Either the son or the administrator.

What happens if the son enters theproperty before acceptance?

The administrator may file a complaintfor forcible entry against him.

Problem: A, B, and C inherited, in equalparts, a parcel of land.

Day 1: A sold his share to X.

Day 2: B repudiated his inheritance.

Day 3: Partition is made.

How much does X get?

X gets ½ of the property; this was really A’sshare upon the death of the father. This isbecause B is deemed never to have inherited.

Article 534. One who succeeds byhereditary title shall not suffer the

consequences of the wrongful possession ofthe decedent, if it is not shown that he wasaware of the flaws affecting it; but theeffects of possession in good faith shall notbenefit him except upon the death of thedecedent.

Can good faith be tacked onto bad faith? J.H.yes, JPSP, no.

Article 535. Minors and incapacitatedperson may acquire the possession ofthings; but they need the assistance of theirlegal representatives in order to exercisethe rights which from the possession arisein their favor.

Reason for the rule?

Practicality – candy example.

Example: A minor may acquire the possessionof a fountain pen donated to him, but in a caseof court action regarding ownership of the pen,his legal representatives must intervene.

What type of acquisition of possession isreferred to in this article?

This article refers to acquisition of possessiononly in those matters where the incapacitatedperson has capacity to act such as occupationof res nullius, succession, prescription, ordonation.

Article 536. In no case may possessionbe acquired through force or intimidation aslong as there is a possessor who objectsthereto.

He who believes that he has an action or aright to deprive another of the holding of athing, must invoke the aid of the competentcourt, if the holder should refuse to deliverthe thing.

What are the modes through whichpossession may not be acquired?

a. Force or Intimidation;

b. Tolerance – possession is with theconsent of the owner and redounds tohis benefit;

c. Clandestine, secret possession.

Article 537. Acts merely tolerated, andthose executed clandestinely and withoutthe knowledge of the possessor of a thing,or by violence, do not affect possession.

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What does it mean that the “acts…do notaffect possession?”

(a) The intruder does not acquire any rightto possession;

(b) The legal possessor, even if ousted, isstill the possessor and is:

a. Entitled to the benefits ofprescription;

b. Entitled to the fruits;

c. Entitled as possessor for allpurposes favorable to hispossession.

(c) The intruder cannot acquire theproperty by prescription.

You wake up in the morning and there issquatter in your yard – clandestine.

Caretaker on your land with understanding thathe will leave when you need the land –tolerance.

Article 538. Possession as a fact cannotbe recognized at the same time in twodifferent personalities except in the case ofco-possession.

Should a question arise regarding the fact ofpossession, the present possessor shall bepreferred;

if there are two possessors, the one longer inpossession;

if the dates of the possession are the same,the one who presents a title;

and if all these conditions are equal, the thingshall be placed in judicial deposit appendingdetermination of its possession orownership through proper proceedings.

Does this mean that property can be possessedby only one?

No, property may be physically possessed bymore than one but not legally possessed.

Compare to rule on double sale.

What is the general rule regardingpossession as a fact and what are theexceptions?

The general rule is that possession as a factcannot be recognized at the same time in twodifferent personalities.

The exceptions are:

(a) co-possessors – there is no conflict ofinterest; they are co-owners;

(b) possession in different concepts ordegrees – both owner and tenant arepossessors as a fact at the same time;one in the concept of owner and theother in the concept of holder.

What are the rules or criteria to be used incase of conflict or dispute regardingpossession?

(a) The present possessor shall bepreferred;

(b) If both are present, the one longer inpossession;

(c) If the dates of possession are the same,the one who presents a title;

(d) If all conditions are equal, the thingshall be placed in judicial depositpending determination by the court.

What are the rules in case of double saleor double donation?

In this case, preference of ownership (notpossession) is determined:

(a) movable property

a. preference to he who firstpossessed in good faith

(b) immovable property

a. first who registered his right ingood faith in the registry ofproperty

b. if there was no registration, theperson who first possessed ingood faith

c. if there was no possession, theperson who presents to oldesttitle, provided it was acquired ingood faith

Execution of the deed of sale in a publicdocument is equivalent to delivery ofpossession of the property .

Wong v. Carpio

Giger sold the property to Mercado by virtueof a deed of sale with right to repurchase;Mercado was issued a certificate/s of title.Mercado visited the property periodically,harvested coconuts, and made copra. He didnot put up any signs, structures, or anythingto indicate actual possession.

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Several years after the sale, Wong went tothe land and saw that it was unoccupied; hethen bought it from Giger and was issued acertificate/s of title.

A few months after the sale to Wong, Mercadolearned that the former’s laborers built a hutwere occupying the land; Mercado waspleased.

Despite his initial elation, Mercado later filed acomplaint for forcible entry against Wong.

Wong raises the defense that Mercado has notestablished prior possession and that his actsof gathering coconuts and making copra wereonly tolerated by the true owner, Giger.

ISSUE: Whether Mercado had possession ofthe property.

HELD: Yes, Mercado had possession.

Article 531 of the Civil Code provides that“possession is acquired by the materialoccupation of a thing or the exercise of aright, or by the fact that it is subject to theaction of our will, or by the proper acts andlegal formalities established for acquiringsuch right.”

Also, the execution of a sale through a publicinstrument is equivalent to the delivery of thething, unless there is a stipulation to thecontrary.

Applying the aforementioned doctrines, theexecution of the deed of sale in a publicdocument (it was notarized) wasequivalent to delivery of possession ofthe property.

Since prior possession of Mercado wasproved, Wong must remove himself from theproperty.

It seems that, in relation to Article 531, eventhe gathering of coconuts (enjoyment of aright to the fruits) constitutes possession.

Obiters:

The SC also said that entry into the propertyby force, intimidation, strategy, or stealth, asa cause of action in forcible entry covers all ofthe ways by which one can wrongfully enter aproperty. The act of entering the property andexcluding the rightful possessor therefromimplies the exertion of force.

Wong must pay rent from the time he learnedof a defect in his title; in this case, from thetime of service of summons.

An 82 year old title is incontrovertibleand conclusive against the whole world.

Bishop v. CA

Salang filed an action for recovery ofpossession against Bishop, invoking theirrights as registered owners of the land.Bishop raised the defense that the land waspart of the public domain and could not havebeen registered.

ISSUE: Whether Salang claim on the land,based on a certificate/s of title, is better thanBishop’s.

HELD: Salang has a better right.

It was necessary to determine ownership inorder to resolve the case for recovery ofpossession.

Salang’s title to the land is based on an OCTwhich was issued 82 years ago. It is nowincontrovertible and conclusive against thewhole world.

Vda. de Catchuela v. CA

Diaz applied for the lot in question with thePHHC, the application was granted and titlewas issued. He then sold the property toFrancisco, private respondent herein.

Catchuela had been occupying said propertyfor several years when Francisco filed anaction for ejectment.

Catchuela filed an action for cancellation oftitle and reconveyance of property

Francisco raised the defense that Cathcuelahas no cause of action.

ISSUE: Whether Catchuela has a cause ofaction in the case for cancellation of title andreconveyance of property.

HELD: Catchuela has no cause of action.

She never acquired a right over the lot inquestion.

She has no right to seek its reconveyance orcontinue in its possession; she is a meresquatter with the tolerance of Francisco, therightful owner.

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