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USUFRUCT IN GENERAL

Art. 562

Usufruct is the right to enjoy the property of another with

the obligation of preserving its form and substance, unlessthe

title constituting it or the law provides otherwise; a real right

of temporary nature w/c authorizes its holder to enjoy all the

ebenfits w/c result from normal enjoyment (exploitation) of

another/s property w/ the obligation to return the same thing

at the designated time/ its equivalent (De buen)

Re use and habitation of property : provided under law on

Easement under Art. 614

Extent of Usufruct: (1)jus utendi (2)jus fruendi

-

The remaining right jus disponendi (the right to

dispose) is the essence of naked ownership

-

FORMULA:

Naked Ownership + Usufruct = Full Ownership

Full ownershipUsufruct = Naked ownership

Full ownershipNaked Ownership = Usufruct

- Theres possibility of alteration; the law or the will

of the aprties may allow the modification of the thing

which is called quasi-usufruct

- Object of Usufruct: all property, consumable things

and unproductive things

USUFRUCT EASEMENT

The object here may be real/

personal property

Involves only real property

Can be enjoyed ALL uses

and fruits of the property

Is limited to a particular use

(like the right of way)

Cannot be constituted on an

easement; but it may be

constituted on the land

burdened by an easement

May be constituted in favor

of or burdening, a piece of

land held in usufruct

Usually extinguished by the

death of usufructuary

Not extinguishjed by the

death of the owner of the

dominant estate

SIMILARITIES

- Both are real rights whether registered or not

- Both rights may be reigistered provided that the

usufruct involves real property.

-

Both may be ordinarily be alienated or transmitted in

accordance w/ the formalities set by law.

BASIS USUSFRUCT LEASE

As to extent; ALL fruits and

uses

Only a particular

or specific use

As to nature of the

right;

Always a real

vright

Real right only in

the case of realproperty, the lease

is REGISTERED

or is for MORE

THAN 1 YEAR,

otherwise it is only

a personal right

As to the creator

of the right;

Can be created

only by the owner

or by duly

authorized agent

The lessor may or

may not be the

owner

As to origin; May be created by

(1) law (2)contract

As a rule: only by

contract and by

(3) last will or

prescription

way of excep

by law (imp

new lease or w

builder in g

faith where lan

worth more

the building

448 )

As to cause; Owner is more or

less passice and

allows the

usufdructurary to

enjoy the thing

given in usufruct

deja gozar

Owner or lesso

ACTIVE and

makes the el

enjoyhace go

As to repairs; Usufructurary has

the duty to make

ordinary repairs

Lessee no duty

pay for repairs

As to taxses; Usufructruary

pasy for annual

charges and taxes

on the fruits

Lessee pays

taxes

As to other things; Usufructurary may

lease the property

itself to another

Lesee can

constitute

usufruct on

property leased

Art 563

Kinds as to cause

1.

Legal (e.g usufruct of parents over property

unemancipated child)

2. Voluntary created by will of parties INT

VIVOS (e.g contract or donation) and MOR

CAUSA (e.g last will and testament)

3. Mixedboth law and act of persons; prescription

Art 564Other classification

1. According toquantity or extent (fruits or object)

a. As to fruitstotal or partial

b. As to objectuniversal / singular / particular

2.

As to number of persons enjoying the right

a.

Simpleif only one usufructurary enjoys

b.

Multipleifseveral usufructuaries enjoy

i. Simultaneous

ii. Successive

3. As to quality or kind of objects involved

a. Over RIGHTS (must not

personal/intransmissible in character)

b.

Over THINGSi. NORMAL

ii.

ABNORMAL

4.

According to terms and conditions

a.

Pure usufruct (no term/condition)

b.

With a term/period

c.

With condition

Art 565

- First, the agreement of the parties or the title giv

the usufruct (thus, usufructuary may be allowed

alienate the very thing held in usufruct altho

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generally , this alienation is not allowed by the codal

provisions.

-

Second, in case of deficiency apply the Civil Code.

-

Rule in case of conflict between the rights granted

by virtue of a will and codal provisions, the former

shall prevail.

The naked ownership of proeprties endowed to a

chaplaincy belongs to proper ecclesiastical authority within

whose jurisdiction such properties are found.

Chapter 2

RIGHTS OF THE USUFRUCTUARY

Art 566

1.

To enjoy property w/ respect to its use and receipt of

its fruits

2.

To administer the property in usufruct

3. With respect to the use of property, he has the right to

receive from the thing all service or benefit that it can

give

N.BHe cannot however extract products w/c do not

constitute fruits because hes bound to preserve thething. Thus, cannot convert orchard to grazing field,

fishpond to resort :D

Dividends from share of corporation also fruits; (

they are declared out of corporate profits and not

corporate capital)

- Usufrutuary rights may be transferred, assigned or

otherwise disposed by the usufructurary.

Products which diminish capital (like stones from

stone quarry)Generally, they cannot be considered

fruits. EXCEPTION: contrary intention

Shares of usufructuary re hidden treasure -

usufructuary, not being the landowner is not entitled

as owner but is entitled as finder (to one half of the

treasure) if he really is the finder.

RIGHTS OF NAKED OWNER

GENERAL RULE: may exercise all rights consistent w/ the

enjoyment by usufructuary

- He can sell or encumber and it can be attached by

his creditors.But must not affect the rights of

usufructuary.

-

Actions to protect his rights:1. Reinvindicatory action

2.

Action to remove clouds or quiet title

Art. 567

RULES

1. Frui ts pending at the BEGI NNI NG of usufr uct:

Belong to the usufructuary

No necessity of refunding owner for expenses

incurred

But w/o prejudice ot the right of third persons

2. Frui ts pending at the TERM INATION of usufr u

Belong to the owner

But the owner must reimburse the usufructu

for ordinary cultivation expenses and for

seeds and similar expenses, from the proceed

the fruits.

Rights of innocent third parties should not

prejudice

Art 568

- A lease executed by the owner before the creatio

the usufruct is not extinguished by usufruct.

-

The rents derived from the lease of propertie

usufruct are civil fruits and they accrued form d

day (Art 569)

Art 570

RULES AS TO CERTAIN RIGHTS (rent, perns

benefits, etc.)

- Deemed to accrue proportionately to the NO and

for the time the usufruct lasts.

o

e.g a) A gave B in usufruct the profits certain factory for 10 years. If the usuf

last really for 10 years, all profits during

time must go to B.

-

Rule when date of distribution of benefits is fix

Art 570 applies whether or not the date of distribu

is fixed.

- Stock dividends and cash dividends are civil fr

Same rule should apply to profits of a partnership.

Example with respect to Rents, If A gives B the usufruc

As land, and As land is being rented by C, each paymen

rent shall go to B for the duration of the usufruct, e

payment being considered as part of the proceeds of property.

Art 571

The usufructuary shall have the right to enjoy any increa

w/c the thing in usufruct may acquire throught accession,

servitudes established in tis favor, and in general, all ben

inherent therein.

Increases in the thing held in usufruct aside from

fruits:

1. Accessions (artificial or natural)

2. Servitudes and easements

3.

All benefits inherent in property

Art 572

- Usufructuary may :

Rights with reference to the THING itself

(1)

Personally enjoy the things

(2)

May lease the thing to another (even w/o own

consent)

Rights with reference to the USUFRUCTURA

RIGHT itself(1) He may alienate: usufructuary right (except l

right), or a usufruct granted a usufructuary

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consideration of his person, or a usufruct acquired

thru caucion juratoria.

(2)

He may pledge or mortagge the suufurctuary right

(because he owns said right) EXEPTION: cannot

pledge or mortagge the thing itself ; cannot sell or

alienate the thing itself or furture crops.

Parental usufruct cannot be alienated.

Right of Usufruct may be a subject of valid donation.

Effect of transfer of rightthe usufructuary will be liable to

owner for damages caused by fault or negligence of the

transferee or lessee

The usufruct does not terminate upon death of

transferee but upon death of the usufructuary who has

made the transfer

The usufructuary cannot alienate or dispose the

object included in usufruct

Cases when usufruct converted to right of ownership

1. When things are consumable

2. Things by their nature are intended for sales (such as

merchandise in a commercial establishment)3.

When the things, are delivered under appraisal as

equivalent to their sae

Usufructuary maysale future crop EXCEPTION:

fruits growing at the time usufruct terminates, it

belongs to the owner

Only voluntary usufructs can be alienated

Art 573- refers to Abnormal Usufruct on Things that

Deteriorate ( things that deteriorate much faster than e.g

books, vehicles, computers, etc)

-

Mere deterioration thru NORMAL duty f usufruct- NECESSARY OR ORDINARY REPAIRS

-

Liability: only when usufructuary causes

deterioration by his fraud or negligence

- Effect of Deterioration on the Usufructuarys

Liability:a) Deteriorate because of NORMAL USE: the

usufructurary is not responsible.

b) Deteriorate because of an event that

ENDANGERS THEIR PRSERVATION (

fortuitious event), still responsible.

c)

Deteriorate because of FRAUD, the usufructuay

is responsible.

Art 574- refers to Usufruct over Consumable things

- Also called as Quaisi-usufruct; Converted into

simple loan

-

Why? Because its substance and form is not really

preserved.

- RULES for this quasi-usufruct:

1. The usufructuary (debtor-borrower) can use them (as if

hes the owner, w/ complete right of pledge or

alienation)

2. BUT at the end of the usufruct, he must

Pay the APPRAISED value ( if appraised when

first delivered)

Or if there was no appraisal, return same k

quality, and quantity OR pay the price cur

at the termination of the usufruct (therefor

at the original price or value)

Art 575- Usufruct on Fruit-bearing trees and shrubs

- RIGHTS:

Can use (even for firewood, tho

NOT the owner)

Dead trunks

Those cut-off or uprooted by accide

N.B: but must replace them with

plants

Art 576- Effect of a CALAMITY on the trees and shrubs

-

RIGHTS:

(1)

If it is impossible/burdensome to replace th

the option of the usufructuary are:

i.

May use the trunks but should rep

them

ii. May leave the dead, fallen or uproo

trunks at the owners disposal

demand that the latter remove t

and clear the land(2)

If it is slightly burdensome to replace them,

usufructuary MUST replace them and he can

demand clearance of the land by the owner

Art 577- Special usufruct over WOODLAND because:

Natural resources belong to the State

A license is generally essential if one desire

gather forest products

- OBLIGATIONS OF THE USUFRUCTUARY

1. Must bear in mind that hes not the owner, hence m

see to it that the woodland is preserved either

development or replanting. Thus, he cannot consumeotherwise nothing would be left for the owner.

2.

In the cutting or felling of trees, he must

i.

Follow the owners habit/practices

ii.

In default thereof, follow the customs of the p

(as to manner, amount and season)

prejudice to the owner for while he can use

cannot abuse.

N.B: applicable if the woodland is either a CO

(thicket of small trees) or TIMBER F

BUILDING

iii. if there be no customs, the only time the usufructu

can cut down trees will be for repair or improvement,

must inform the owner (although need not consent)3. Cannot alienate the trees unless he is permitted or

needs the money to do some repairs

In the case of coconutland, the usufruct exte

merely to the fruits produced. At any rate, it wo

have been different had the naked owners appr

been obtained.

Art 578- Usufruct of an Action to recover through the cou

i. Real property

ii. Personal property

iii. Real right over real or personal property

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-

The usufructuary can demand from the owner:

Authority to bring the action (usually thru SPA)

Proofs needed for recovery

-

To prejudice third parties, the usufruct must either be

registered or known to them.

- Institution of the action:The action may be instituted in the usufructuarys name

for being the owner of the usufruct, he is properly

deemed a real party in interest.

If the purpose is the recovery of the property or right, he

is still required under Art. 578 to obtain the naked

owners authority.

If the purpose is to object to or prevent disturbance over

the property , no special authority form the naked owner

is needed.

Effect of Judgment

When judgment is awarded him and he gets the property:

Its naked ownership belongs to the OWNER

Its usufruct belongs to him, he gets the fruits

Art 579 - Refers to the right to useful and luxuriousimprovements

The usufructuary has the IRGHT (not the duty) to make:

i.

USEFUL IMPROVEMENTS

ii.

LUXURIOUS IMPROVEMENTS

But, (1) he must not alter the form or substance of the

property (2) not entitled to a REFUND but he may either

remove the improvement is no substantial damage to the

property in usufruct is caused OR set off(compensate)

the improvements against damages for which he may be

liable.

Art 580- The usufructuary may set-off the improvements

-

RULES

If damage exceeds the value of improvements,

usufructuary is still liable for the difference.

If the value of improvements exceeds the damage, the

difference does not go the usufructuary, but accrues

instead in the absence of contrary stipulation in favor of

the naked owner, otherwise, it is as if the usufructuary

would be entitled to a partial refund in cash; settlement of

the difference must be agreed upon by the parties.

REQUISITES BEFORE SET OFF CAN BE MADE

The damages must have been caused by the

usufructuary

The improvements must have augmented the

value of the property

Art 581- Refers to alienation by naked owner BUT

i.

He cannot alter its from / substance

ii. Or do anything prejudicial to the usufructuary

Art 582- Usufructuary of a part of common property

-

A co-owner may give the usufruct of his shar

another even w/o consent of the others, UNLE

personal considerations are present.

-

EFFECT OF PARTITION: the usufructu

continues to have the usufruct of the part allotte

the co-owner concerned.

OBLIGATIONS OF THE USUFRUCTUARY

Arts 583- 602

Art 583

The usufr uctuary before entering upon the enjoymen

the property is obli ged:

1.

To make and inventory of all the property w/c s

contain an appraisal of the movables and a descriptio

the condition of the immovables.

2. To give security, binding himself t fulfill the obligat

imposed upon him

Re making an inventory; not required the concurre

of the owner in the making of the inventory.

expenses for making the inventory are borne by

usufructuary because it is his obligation andprerequisite to his entry upon the enjoyment of

property.

When inventory not required:

1.

When now one will be injured thereby;

2.

In case of waiver by the naked owner or the law

Re giving security;PURPOSE: to insure faithful compliance of the dutie

the usufructuary

When security not required,

1.

When no one will be injured thereby2.

When theres waiver by the naked owner. Stipulat

3.

When usufructuary is the donor of the property

4.

When theres parental usufruct

5.

When theres caution juratoria, w/c takes plac

the bond, and is made by taking an oath to fu

properly the duties of a usufructuary, BUT thi

available only under the conditions prescribed

Art. 587 (promise under oath)

Art 584- refers to usufruct of donor or of parents

Art 585- effect if no one will be injured

-

The usufructuary may be excuse from the obligaof making an inventory or of giving security, w

no one will be injured thereby

EXCEPTIONS:

(1)

Where the owner waives the giving of security or

making of an inventory

(2)

Where the title constituting the usufruct exempts

usufructuary from any or both of these obligation

(3)

Where the usufructuary asks to be relieved f

these obligations, and no one will be injured by s

exemption

Effect of failure to make an inventory, not affect ri

to enjoy but a prima facie presumption arises that

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property was received by the usufructuary in good

condition, and if hes still in possession, he may still be

required to make an inventory.

Art 586- Refers to the effects of failure to give security

On the rights of naked owner

1. He may deliver the property to the usufructuary

2. May choose RETENTION of the property as

administrator

3.

Or the naked owner may demand RECEIVERSHIP

or ADMINISTRATION of the real property, sale of

movable, conversion/ deposit of credit instruments/

investment of cash or profits

On the rights of usufructuary

1.

The usufructuary cannot possess the property till he

gives security

2.

The usufructuary cannot administer the property,

hence, he cannot execute a lease thereon.

3. The usufructuary cannot collect credits that have

matured, nor invest them unless the Court or the

naked owner consents

4.

But the usufructuary can alienate his right to theusufruct (since failure to give the security did not

extinguish the usufruct). The grantee may of course

possess, the moment he gives security.

Retention of property by naked owner he mayw ant to

retain some of the thing in w/c he may demand their delivery

to him provided he gives security for the payment of legal

interest on their appraised value.

If the movable be sold, the cash belongs to the naked

owner but the interest thereon (6% per annum) belongs to the

usufurcturary.

Art 587- Caucion Juratoria- The sworn undertaking refers in this article is

Caucion Juratoria; the sworn duty to take good care

of the property and return the same at the end of the

usufruct. It takes the place of the bond or security

and is based on necessity and humanity as when a

poor family requires by inheritance, the usufruct of a

badly needed house (Paras)

-

Generally, the security given by the usufructuary

may be a personal bond, pledge or a mortgage.

Caucion juratoria is only the exception , upon

petition of the usufructuary and according to judicial

order.

-

Restriction: he cannot alienate or lease the propertyfor this means he does not need them.

- When not applicable: when the usufurctuary is

exempted from giving security. Art 587 applies only

if he is required but cannot afford to give security.

Art 588

Upon giving the security, the usufructuary will be

entitled to all the benefits accruing since the time

when he should have begun to receive them

(RETROACTIVE EFFECT)

Art 589- The usufructuary shall take care of the things gi

in usufruct as a good father of a family.

Art 590- Liability of usufructuary for acts of the substitu

-

The usufurctuary is made liable for the acts of the

substitutes.

- Even when theres sub-usufructurary, it is still the

usufructuary who answers to the naked owner for

ordinary repairs, taxes on fruits, etc.

Art 591- Usufruct on livestock

- Applicable: when the usufruct is on a FLOCK

HERD of livestock (not merely two or three anim

- RULES:When theres obligation to REPLACE,

i.

If some animals die from natural causes;

ii.

If some animals are lost due to rapacit

beasts of prey

Although reason is caso fortuito, there is dut

replace. Why? Such loss is more or less EXPECT

or NATURAL.

When theres NO OBLIGATION to replace,

i.

Total loss because of some UNEXPECTor UNNATURAL loss (e.g contag

disease)

ii.

Partial loss

In case of Sterile Animals,

Since there are no young (broods) here, the rul

usufruct over fungibles applies.

Art 592- Duty of the usufructuary to make ordinary

repairs

Following conditions must be present:

They are required by normal or natural use

They are needed for preservation

Must have occurred during the usufruct

Must have happened w/ or w/o fault of

usufructuary (If he was at fault, must pay indem

for damages)

EFFECT OF RNEUNCIATIONIf fault of the usufructuary, he cannot exempt himse;f f

liability by renouncing the usufruct.

But if defects occasioned by the ordinary use of the th

the usufructuary may exempt himself from making

repairs by returning to the owner the fruits received duthe time that defects took place.

Definition of Ordinary Repairs - those required by

wear and tear due to the natural use of the thing abd

indispensable for its preservation.

Art 593- Duty of the naked owner to make Extraordina

repairs

Art 594

EXTRAORDINARY REPAIRS; KINDS

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(1)

Those caused by exceptional circumstances (won

they are necessary for the preservation of the thing)

(2)

Those caused by the natural use of the thing, but not

necessary for its preservation

Although borne by the owner, ususfructuary

cannot compel him to make such repairs.

Who should pay extraordinary repairs

based form the above enumeration?

NAKED OWNER. Why? It is his

property.

Thus, If he makes the extraordinary repairs,

he can demand from the usufructuary the

LEGAL intrest on the amount for the

duration of the usufruct.

If Usufructuary made the ER, the ff are his

rights:

i. get increase in value or get

reimbursement of the expenses;

ii. Right of RETENTION till paid.

Art. 595Although the property is in possession of

usufructuary, the naked owner may still:

1.

Construct works;2.

Make Improvements;

3.

Make new plantings

PROVIDED:

-

The value of the usufruct is not diminished.

-

The right of the usufructuary is not prejudiced.

Art. 596What charges or taxes the usufructuary must pay:

1. The annual charges

2. The annual taxes on the fruits

3. The annual taxes on the land

Other charges:1.

Ordinary repairs

2.

Necessary cultivation expenses.

Art 597. Taxes which are imposed directly on the capital

-

E.g estate tax

- RULES:i.

If paid by the owner, he can demand legal

interest on the sum paid.

ii. If advanced by the usufructuary, his rights

are: a) REIMBURSEMENT

b)RETENTION

Art 598- when usufructuary has to pay for the debts of thenaked owner

Must distinguished if theres stipulation to pay or not. If no

stipulation, the done shall be responsible only when the

donation has been made in fraud of creditors.

-

Rule when applicable: a) the usufruct is a

UNIVERSAL one b) naked owner has debts and is

obliged to make periodical payments

Art 599- Rules on Usufruct of a Matured Credit

-

iIf usufructuary has givens security, collection

investment, can be done w/o the approval of

court or of the naked owner.

-

If usufructuary has NOT given security, or when

is EXEMPTED or when theres CAUCI

JURATORIA, collection and investment can be d

only with the approval of the court or of the na

owner.

Art 600- Usufruct if Mortgaged Immovable (PARTICULA

USSUFRUCT)

Art. 601Obligation of usufructuary to notify th

owner of any act of third person

- When notification is required:a.

If 3rd part commits acts prejudicial to

ights of ownership

b. If urgent repairs are needed

c.

If an inventory is to be made.

- Effect of non-notificationi. In (a) the usufurctuary is liable for dama

as if they had been caused thru his o

fault.

ii.

In (b) the usfuructuary cannot even mthe extraordinary repairs needed.

iii.

In the inventory can go on, but na

owner may later on point out discrepan

& ommissions.

Art 602. Liability for Expenses and Costs

EXTINGUISHMENT OF USUFRUCT

1. By the death of the usufructuary

2.

By the expiration of the period3. By merger of the usufruct anf ownership

4.

By renunciation of the usufructuary

5.

By the total loss of the thing in usufruct

6.

By the termination of the right of the per

constituting the usufruct

7.

By prescription