Ownership to Co Ownership

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Ownership Property Powerpoint Civil Code Ateneo Law

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LAW ON PROPERTY
Lectures of Atty. Claro F. Certeza
Ateneo College of Law

OWNERSHIP IN GENERAL
Articles 427 – 439
Civil Code

Preliminaries
• Ownership Defined
– Ownership is the independent right of a person to
the exclusive enjoyment and control of a thing
including its disposition and recovery subject only
to the restrictions or limitations established by law
and the rights of others. (De Leon)

Kinds of Ownership
• Full Ownership
– The title and the right to use and enjoy the fruits is in
the name of one person

• Beneficial Ownership
– Title is in the name of another
– Ownership recognized by law and capable of being
enforced in court at the instance of the beneficial
owner
– Example: Trust Agreement

• Naked Ownership
– Possession of bare title to the property
– Ownership where the right to use and the fruits is
withheld as it is given to another
– Example: Usufruct

Article 427
Art. 427. Ownership may be exercised over
things or rights. (n)
– Things, i.e. those that are capable of
appropriation
– Rights, are classified as incorporeal property

Rights of the Owner
Art. 428. The owner has the right to enjoy and
dispose of a thing, without other limitations
than those established by law.
The owner has also a right of action against the
holder and possessor of the thing in order to
recover it. (348a)

Rights of Owner
• Article 428 – the owner has the right to:





Recover (Vindicate) (Jus Vindicandi)
Enjoy
Dispose (Jus Disponendi)

• Other Rights
– Right of Accession, the right to everything that is
produced by or attached to the thing owned
(Articles 440 – 475)

Rights of Owner
• Right to Enjoy
– Right to possess (Jus Possidendi)
– Right to use (Jus Utendi)

– Right to the fruits (Jus Fruendi)

Rights of Owner
• Right to Possess
– Articles 523 to 561 on Possession

Rights of Owner
• Provisions re: Right to Use
– Article 429
• Owner may exclude others from enjoyment/ disposal
of the property
• Owner may use reasonable force to prevent actual or
threatened unlawful invasion of his property

– Article 430
• Owner may enclose or fence his land

Rights of Owner
• Right to dispose
– Right to consume or destroy or abuse
– Right to encumber or alienate

Rights of Owner
• Right to Recover/ Vindicate
– Recovery of Personal Property
– Recovery of Real Property

Action To Recover Personal Property
• Action to Recover Property Under Rule 60 of the
Revised Rules of Court
• Requirements: Verified Petition stating – Applicant is the owner of the property
– Property is wrongfully detained by the defendant
– The property is not seized by virtue of a lawful
process
– The actual market value of the property
– Posting of a bond equal to double the value of the
property

Action To Recover Real Property
Action

Where Filed

Period

Grounds

Issue

Forcible Entry
(Accion
Interdictal)

Metropolitan/
Municipal Trial
Court

Within One (1)
year from
dispossession

Deprivation of
possession thru
FISTS. Possession is
invalid from the
start.

Mere physical
possession
(possession de
facto)

Unlawful
Detainer
(Deshaucio)

Metropolitan/
Municipal Trial
Court

Within One (1)
year from date
when
possession
became illegal.

Possession
becomes invalid
after the
termination or
expiration of the
right to possess.

Mere physical
possession
(possession de
facto)

Accion Publiciana

Regional Trial
Court

After One (1)
year but within
ten (10) years
from loss of
possession

Deprivation of
possession thru
means other than
FISTS/ Expiration of
right to Possess

Plenary action to
recover
possession
(better right to
possess)

Accion
Reinvidicatoria

Regional Trial
Court

Within ten (10)
years

Possession is
claimed based on
ownership

Recovery of
ownership

Accion Reinvidicatoria
Art. 434. In an action to recover, the property
must be identified, and the plaintiff must rely on
the strength of his title and not on the weakness
of the defendant's claim. (n)

Other Means to Recover Possession
• Writ of Possession
– Used in connection with the Land Registration Law
directing a sheriff to place a successful registrant
under the Torrens System in possession of the
property covered by a decree of the court
– No separate action is filed by the registrant

• Injunction
– Art. 539: In forcible entry cases, the plaintiff may
petition the court within 10 days from the filing of the
complaint to issue a writ of preliminary mandatory
injunction to restore possession.

DISPUTABLE PRESUMPTION OF
OWNERSHIP
Art. 433. Actual possession under claim of
ownership raises disputable presumption of
ownership. The true owner must resort to
judicial process for the recovery of the property.
• 2 requirements to raise disputable
presumption of ownership
– there must be actual possession of property
– the possession must be under claim of ownership

LIMITATIONS TO RIGHT OF
OWNERSHIP

Limitations on Rights of Owner
• Art. 431. The owner of a thing cannot make use
thereof in such manner as to injure the rights of a
third person.
• Art. 432. The owner of a thing has no right to
prohibit the interference of another with the
same, if the interference is necessary to avert an
imminent danger and the threatened damage,
compared to the damage arising to the owner
from the interference, is much greater. The
owner may demand from the person benefited
indemnity for the damage to him.

LIMITATIONS TO RIGHT OF OWNERSHIP
• Power of Eminent Domain
– Eminent domain, also often referred to as expropriation and, with less
frequency, as condemnation, is, like police power and taxation, an
inherent power of sovereignty. It need not be clothed with any
constitutional gear to exist; instead, provisions in our Constitution on
the subject are meant more to regulate, rather than to grant, the
exercise of the power. Eminent domain is generally so described as
"the highest and most exact idea of property remaining in the
government" that may be acquired for some public purpose through a
method in the nature of a forced purchase by the State. It is a right to
take or reassert dominion over property within the state for public use
or to meet a public exigency. It is said to be an essential part of
governance even in its most primitive form and thus inseparable from
sovereignty. The only direct constitutional qualification is that "private
property shall not be taken for public use without just compensation."
This proscription is intended to provide a safeguard against possible
abuse and so to protect as well the individual against whose property
the power is sought to be enforced.
(Manosca vs. CA, G.R. No. 106440, January 29, 1996)

LIMITATIONS TO RIGHTS OF
OWNERSHIP
• Codal Provision
Art. 435. No person shall be deprived of his property
except by competent authority and for public use
and always upon payment of just compensation.

• Three Requirements
– Exercised by competent authority
– For public use
– Payment of Just Compensation

LIMITATIONS TO RIGHTS OF
OWNERSHIP
• Competent Authority
– The legislature grants the authority by
appropriating the funds to achieve the purpose
– The Executive Branch exercises the authority
granted by the legislature

LIMITATIONS TO RIGHTS OF
OWNERSHIP
• Competent Authority – LGU
– The power of eminent domain is lodged in the
legislative branch of government, which may
delegate the exercise thereof to LGUs, other
public entities and public utilities.
– Section 19 of RA 7160 delegates to LGUs the
power of eminent domain, also lays down the
parameters for its exercise.

LIMITATIONS TO RIGHTS OF
OWNERSHIP
• Competent Authority – LGUs, conditions for exercise of
eminent domain powers
1. An ordinance is enacted by the local legislative council
authorizing the local chief executive, in behalf of the LGU, to
exercise the power of eminent domain or pursue expropriation
proceedings over a particular private property.
2. The power of eminent domain is exercised for public use,
purpose or welfare, or for the benefit of the poor and the landless.
3. There is payment of just compensation, as required under
Section 9 Article III of the Constitution and other pertinent laws.
4. A valid and definite offer has been previously made to the owner
of the property sought to be expropriated, but said offer was not
accepted.
(Yusay vs. CA, G.R. No. 156684, April 6, 2011)

LIMITATIONS TO RIGHTS OF
OWNERSHIP
• Public Use
– Not limited to use by the public
– May be equated with public benefit, public utility or public
advantage (Guido vs. Rural Progress Administration, 84 Phil
847)

• Existence of Public Use
– Generally the courts decides if a particular use is a private
one
– Exception: When Congress has specified the public
purpose for which the authority to expropriate is granted,
the courts are without jurisdiction to inquire into the
necessity of such purpose. (City of Manila vs. Chines
Community of Manila, 40 Phil 349)

LIMITATIONS TO RIGHTS OF
OWNERSHIP
• Public Use – Subsequent Non Use
– If property is expropriated for public use, the
government must make good its intent to use the
same otherwise, the government may be
compelled to return the property to its original
owner. (Ouano vs. Republic, G.R. No. 168770,
February 9, 2011)

LIMITATIONS TO RIGHTS OF
OWNERSHIP
• Just Compensation
– Just compensation is defined as the full and fair
equivalent of the property taken from its owner by
the expropriator. The measure is not the taker’s gain,
but the owner’s loss. The word "just" is used to
intensify the meaning of the word "compensation"
and to convey thereby the idea that the equivalent to
be rendered for the property to be taken shall be real,
substantial, full, and ample. Indeed, the "just"-ness of
the compensation can only be attained by using
reliable and actual data as bases in fixing the value of
the condemned property. (NPC vs. Bernal, G.R. No.
180979, December 15, 2010)

LIMITATIONS TO RIGHTS OF
OWNERSHIP
• Just Compensation – Who Determines
– The trial court has exclusive jurisdiction to
determine just compensation.
– Thus a law which provides that the only basis for
determining just compensation in eminent
domain cases should be the market value as
declared by the owner or as determined by the
assessor, whichever is lower is void. (EPZA vs.
Dulay, 149 SCRA 305)

LIMIATATIONS TO RIGHTS OF
OWNERSHIP
• Two Stages in Expropriation Cases
– First Stage: Determination of the authority of the
plaintiff to exercise the power of eminent domain and
the propriety of its exercise in the context of the facts
of the case. This ends with an Order - • Dismissing the case
• Of Condemnation declaring that the plaintiff has a lawful
right to take the property for public use upon payment of
just compensation.

– Second Stage: Determination by the Court of the just
compensation. (NPC vs. Jocson, 206 SCRA 536)

Limitations on Rights of Owners
• Art. 436. When any property is condemned or
seized by competent authority in the interest
of health, safety or security, the owner thereof
shall not be entitled to compensation, unless
he can show that such condemnation or
seizure is unjustified.

Limitations on Rights of Owners
• Police Power
– The concept of police power is well-established in this
jurisdiction. It has been defined as the "state authority
to enact legislation that may interfere with personal
liberty or property in order to promote the general
welfare." As defined, it consists of (1) an imposition
of restraint upon liberty or property, (2) in order to
foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general
terms to underscore its all-comprehensive embrace.
(Phil. Association of Service Exporters vs. Drilon, G.R.
No. 81958 June 30, 1988)

Limitations on Rights of Owners
• Police Power
– Persons affected by the exercise of police power
are not entitled to compensation unlike those
whose lands are expropriated.

Surface Rights
• Art. 437. The owner of a parcel of land is the
owner of its surface and of everything under
it, and he can construct thereon any works or
make any plantations and excavations which
he may deem proper, without detriment to
servitudes and subject to special laws and
ordinances. He cannot complain of the
reasonable requirements of aerial navigation.

Hidden Treasure
Art. 438. Hidden treasure belongs to the owner of the land, building,
or other property on which it is found.
Nevertheless, when the discovery is made on the property of another,
or of the State or any of its subdivisions, and by chance, one-half
thereof shall be allowed to the finder. If the finder is a trespasser, he
shall not be entitled to any share of the treasure.
If the things found be of interest to science of the arts, the State may
acquire them at their just price, which shall be divided in conformity
with the rule stated. (351a)
Art. 439. By treasure is understood, for legal purposes, any hidden and
unknown deposit of money, jewelry, or other precious objects, the
lawful ownership of which does not appear.

Hidden Treasure
• Two Requisites
– they consist of money, jewels and other precious
objects;
– they are hidden and unknown such that their
finding is a real discovery.

Hidden Treasure
• Precious Objects
– Law refers only to movables

• Owner is Unknown
– Money purposely hidden by the owner is not
hidden treasure;

• Finding is by chance
– There must be no purpose or intent to look for
treasure

ACCESSION

Accession Discreta –
extension of the
rights of ownership
to the products of
the thing. (Art. 441)
Art. 440 – ownership
of the thing gives
owner right to their
produce and to those
incorporated or
attached thereto.

Accession Continua –
acquisition of
ownership over a thing
incorporated to that
which belongs to the
owner.

ACCESSION DISCRETA

3 Kinds of Accession
Discreta Under Art. 442

Natural Fruits –
spontaneous products
of the soil and young
and other products of
animals.

Industrial Fruits –
those produced by
lands of any kind thru
cultivation or labor.

Civil Fruits – rent of
land or building or
amount of perpetual
life annuities.

Art. 444 –
Only such
are manifest
or born are
considered
as natural or
industrial
fruits.

Art. 443 – He
who receives
fruits has the
obligation to pay
the expenses
made by 3rd
persons in their
production,
gathering and
preservation.

ACCESSION CONTINUA

ACCESSION WITH
RESPECT TO IMMOVABLE
PROPERTY (Arts. 445-465)

ACCESSION WITH
RESPECT TO MOVABLE
PROPERTY (Arts. 466-475)

Natural
1. Alluvion
2. Force of river
3. Change of river bed
4. Formation of islands
Industrial
1. Building, planting or
sowing

1. Conjunction or
adjunction
2. Specification
3. Commixtion

Adjunction may
take place by:
• Inclusion
• Soldering
• Weaving
• Painting

Accession on Immovable Property
Whatever is B-S-P on land belongs to the owner OF
THE LAND.
• Art. 445. Whatever is built, planted or sown on
the land of another and the improvements or
repairs made thereon, belong to the owner of the
land, subject to the provisions of the following
articles.
Disputable presumption is that B-S-P on land was
made by the owner.
• Art. 446. All works, sowing, and planting are
presumed made by the owner and at his expense,
unless the contrary is proved. (359)

Article 447
• Art. 447. The owner of the land who makes
thereon, personally or through another,
plantings, constructions or works with the
materials of another, shall pay their value; and, if
he acted in bad faith, he shall also be obliged to
the reparation of damages. The owner of the
materials shall have the right to remove them
only in case he can do so without injury to the
work constructed, or without the plantings,
constructions or works being destroyed.
However, if the landowner acted in bad faith, the
owner of the materials may remove them in any
event, with a right to be indemnified for
damages.

Art. 447 - L.O. makes planting, construction or
works using materials of another.
Owner of Material in Good Faith

Owner of Material in Bad Faith

Landowner in Good
Faith

• Landowner must pay value of
materials.
• Owner of material can
remove provided no injury is
caused to the planting or
works.

• Landowner must pay value
of materials.
• Owner of material can
remove provided no injury is
caused to the planting or
works. (Paras , De Leon,
opines no right of removal)
• Owner of materials liable to
pay damages.

Landowner in Bad
Faith

• Landowner must pay value of • As if both are in good faith.
materials plus damages.
• Owner of materials can
remove even if injury will
result to the planting or works
plus damages.

ARTICLES 448 - 454

Builds
UPON LAND OF
ANOTHER

Article 448
• Art. 448. The owner of the land on which anything has
been built, sown or planted in good faith, shall have
the right to appropriate as his own the works, sowing
or planting, after payment of the indemnity provided
for in Articles 546 and 548, or to oblige the one who
built or planted to pay the price of the land, and the
one who sowed, the proper rent. However, the builder
or planter cannot be obliged to buy the land if its value
is considerably more than that of the building or trees.
In such case, he shall pay reasonable rent, if the owner
of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree
upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
(361a)

When To Apply Article 448
• A person builds on land belonging to another.
• The builder, planter, or sower believes that he
is the owner of the land – He is in GOOD
FAITH.

Good Faith/ Bad Faith
• Good Faith – honest belief of the builder,
planter or sower that the land on which he is
building, planting, or sowing is his and is
ignorant of any defect or title.
• Bad Faith – the builder, planter, or sower, is
aware that he is not the owner of the land or
that his title is defective.

Art. 448 - Good Faith
This Court has ruled that this provision covers only
cases in which the builders, sowers or planters
believe themselves to be owners of the land or, at
least, to have a claim of title thereto. It does not
apply when the interest is merely that of a holder,
such as a mere tenant, agent or usufructuary. From
these pronouncements, good faith is identified by
the belief that the land is owned; or that -- by some
title -- one has the right to build, plant, or sow
thereon.

Options of Landowner
• If the builder, planter, sower is in Good Faith
– To appropriate the improvement
• Must pay NECESSARY EXPENSES
– expenses made for the preservation of the thing or those which
seek to prevent the waste, deterioration or loss of the thing
(Manresa)
– Example: expenses for cultivation, production and upkeep;
ordinary repairs required by natural wear and tear;

• Must pay USEFUL EXPENSES
– Those which add value to the thing or augment its income.
– Example: levelling/ clearing of the ground, introduction of
improvements to the house, construction of fishpond or irrigation
system.

• Must pay ORNAMENTAL/ LUXURIOUS EXPENSES

Options of Landowner
• If the builder, planter, sower is in Good Faith
– Oblige builder or planter to pay the price of the
land or the one who sowed the proper rent
• Not available if the price of the land is considerably
more than the building or trees. In this case he must
pay the proper rent.
• The parties shall agree on the terms of the lease and if
they fail to agree, the courts shall fix the terms.

Who Exercises Option
• The Landowner
• Why is Option given to the landowner?
– He is the owner of the principal and therefore
applying the principles of accession, he is the one
who benefits from it.

When Builder Planter Sower in BAD FAITH

• Art. 449. He who builds, plants or sows in bad faith on the
land of another, loses what is built, planted or sown without
right to indemnity. (362)
• Art. 450. The owner of the land on which anything has been
built, planted or sown in bad faith may demand the
demolition of the work, or that the planting or sowing be
removed, in order to replace things in their former condition
at the expense of the person who built, planted or sowed; or
he may compel the builder or planter to pay the price of the
land, and the sower the proper rent. (363a)
• Art. 451. In the cases of the two preceding articles, the
landowner is entitled to damages from the builder, planter
or sower. (n)
• Art. 452. The builder, planter or sower in bad faith is entitled
to reimbursement for the necessary expenses of
preservation of the land. (n)

Effect – BPS in Bad Faith
• As to cost of what was Built, Planted, Sowed
– No reimbursement is due to builder, planter, sower
(Art. 449)

• Remedies of the owner of land





Demand demolition of the work
Removal of what was planted or sowed
Require the builder or planter to buy the land
Require sower to pay the proper rent (Art. 450)

• Builder, Planter, Sower – liable for damages to the
owner of the land (Art. 451)
• Builder, Planter, Sower – entitled to payment for
expenses to PRESERVE the land.

SUMMARY OF RULES – A person builds, plants, or sows upon
land belonging to another
Builder in Good Faith

Builder in Bad Faith

Landowner in
Good Faith

• L.O. can appropriate the
• B-P-S loses what was built,
works but must pay necessary
planted or sown without right
& useful expense and
to any indemnity. (Art. 449)
ornamental expense. (Art.
• Landowner may demand
448)
demolition of work or
• L.O. can oblige the builder or
removal of what was planted
planter to pay for the land
or sowed. (Art. 450)
(unless the value of the land
• May compel the B-P-S to pay
is considerably more) or the
for the price of the land or
sower to pay rent.
compel sower to pay the
proper rent. (Art. 450)
• The B-P-S in bad faith is
entitled to reimbursement
for the preservation of the
land. (Art. 452)
• L.O. is entitled to damages.

Landowner in
Bad Faith

Apply Art. 447 (Art. 454)

• Apply the rule as if both
parties are in good faith.

Article 454
• Landowner in Bad Faith/ B-P-S in Good Faith
– Apply 447 (As if Landowner is B-P-S in Bad Faith
on his own land with materials belonging to
another)
– Thus, the owner of the materials who is the B-P-S
is entitled to:
• Demand the value of his materials
• Demand the return of his materials
• Plus damages in both cases

Assigned Cases
1. Pacific farms, Inc., vs. Simplicio G. Esguerra, et al.,
G.R. No. L-21783 November 29, 1969
2. Macasaet vs. Macasaet
G.R. Nos. 154391-92 September 30, 2004
3. Technogas vs. CA, 268 SCRA 5
4. Del Campo vs. Abesia, 160 SCRA 379
5. Sarmiento vs. Agana, 129 SCRA 122
6. Javier vs. Javier, 7 Phil 261
7. PNB vs. De Jesus, 411 SCRA 557
8. Rosales vs. Castelltort, 472 SCRA 144
9. Depra vs. Dumlao, 136 SCRA 475
10. Nuguid vs. Court of Appeals, 452 SCRA 243
11. Manotok Realty vs. Tecson, 164 SCRA 587

Pacific Farms v. Garcia
• Carried Lumber sold construction materials to
Insular Farms, Inc., for construction of 6
buildings.
• Insular Farms, Inc. failed to pay and Carried
Lumber sued the former and obtained
judgment.
• Carried Lumber levied upon the six (6)
buildings of Insular Farms.

Pacific Farms v. Garcia
• Pacific Farms filed a third-party claim asserting
that it purchased the 6 buildings from Insular
Farms.
• Carried posted a bond so the sheriff
proceeded with auction sale.
• Pacific Farms filed action against Carried and
the Sheriff to annul the levy of the six
buildings.

Pacific Farms v. Garcia
• Court Ruling
– We should apply Art. 447 by analogy
– Levy of 6 buildings is proper
– Pacific is given time to redeem the 6 buildings by
paying the price of the materials

Pacific Farms v. Garcia
• Why Art. 447 was applied by analogy
– the SC made a finding that Insular Farms and Pacific
Farms are owned by one and the same beneficial
owners.
– Pacific Farms in BAD FAITH as it knows of the claim of
Carried Lumber against its predecessor Insular Farms

• Why applied by analogy
– ordinarily Art. 447 applies only when a landowner
builds on his land using the materials of another
– in this case Insular Farms built using materials of
another but Art. 447 was applied with respect to the
rights of the buyer (Pacific Farms)

Macasaet v. Macasaet
• General Rule. – Art. 448 applies to builders,
sowers or planters who believe themselves to
be owners of the land or, at least, to have a
claim of title thereto. It does not apply when
the interest is merely that of a holder, such as
a mere tenant, agent or usufructuary. From
these pronouncements, good faith is
identified by the belief that the land is owned;
or that -- by some title -- one has the right to
build, plant, or sow thereon.

Macasaet v. Macasaet
• Exceptions: However, in some special cases, this Court
has used Article 448 by recognizing good faith beyond
this limited definition. Thus, in Del Campo v. Abesia,
this provision was applied to one whose house -despite having been built at the time he was still coowner -- overlapped with the land of another. This
article was also applied to cases wherein a builder had
constructed improvements with the consent of the
owner. The Court ruled that the law deemed the
builder to be in good faith. In Sarmiento v. Agana, the
builders were found to be in good faith despite their
reliance on the consent of another, whom they had
mistakenly believed to be the owner of the land.

Macasaet v. Macasaet
• Based on the aforecited special cases, Article 448
applies to the present factual milieu. The
established facts of this case show that
respondents fully consented to the
improvements introduced by petitioners. In fact,
because the children occupied the lots upon their
invitation, the parents certainly knew and
approved of the construction of the
improvements introduced thereon. Thus,
petitioners may be deemed to have been in good
faith when they built the structures on those lots.

Macasaet v. Macasaet
• Observations
– the stay of the children was NOT by mere
tolerance but by contract
– the “term” of the stay is for so long as the parties
“mutually benefitted” until there is a change in
condition – “unresolved conflict” that terminates
the agreement

Technogas vs. CA
• The parties in this case are owners of adjoining lots in
Parañaque, Metro Manila. It was discovered in a
survey, that a portion of a building of petitioner
(technogas), which was presumably constructed by its
predecessor-in-interest, encroached on a portion of
the lot owned by private respondent (Eduardo Uy).
What are the rights and obligations of the parties? Is
Technogas considered a builder in bad faith because, as
held by respondent Court, he is "presumed to know
the metes and bounds of his property as described in
his certificate of title"? Does Technogas succeed into
the good faith or bad faith of his predecessor-ininterest which presumably constructed the building?

Technogas v. CA
• Can the successor-in-interest of the BPS benefit
from Art. 448?
– Yes, provided the successor did not know of the
encroachment.

• Is Technogas in bad faith?
– No, good faith is presumed under Art. 527
– When Technogas purchased the land, the buildings
which encroached were already existing. Technogas
had no way of knowing about the encroachment. In
fact, the owner of the land encroached also became
aware only after he had his land surveyed.

Technogas v. CA
• Since Technogas became aware of the
encroachment subsequent to its purchase, will
this not preclude resorting to Art. 448?
– No, a reading of Art. 448 will show that the
landowner’s exercise of the option can only take
place AFTER the builder shall have come to know
of the intrusion – in short, when both parties
became aware of it.

Del Campo vs. Abesia
• Facts:
– A co-owner built on land owned in common.
– The court appointed commissioner prepared a sketch
plan and it was discovered that the house of one coowner encroached on the part belonging to the other
co-owner.
– The court ruled that Art. 448 cannot be applied since
a co-owner is not a third party. The court applied the
rules on co-ownership.
– The court ordered the builder who encroached to
remove the encroachment.

Del Campo vs. Abesia
• Held:
– The SC agreed with the ruling of the lower court.
– However, when the co-ownership is terminated
by the partition and there is encroachment of 5
sq. meters obviously made in good faith, Art. 448
may be applied by analogy citing Manresa and
Amandi.

Sarmiento vs. Agana
• Facts:
– Mother allowed her daughter and latter’s husband to
build their house on a parcel of land.
– Believing that the mother owns the land, couple built
their house thereon.
– It turns out the mother is not the owner. It is titled to
another who sold the same to Sarmiento.
– Sarmiento filed ejectment case against the couple.
– Lower court ruled that couple is in good faith. It
ordered the couple to vacate the land after Sarmiento
pays them the value of the house.

Sarmiento vs. Agana
• Facts:
– On appeal to RTC, decision modified:
• Sarmiento was given the ff. options exercisable within 60 days
– Reimburse the couple the value of the house, or
– Require the couple to pay the value of the land

• Sarmiento refused to exercise either option
• RTC required couple to deposit the sum equal to the value of land
– Hence, the appeal.

• Held:
– Lower court did not err in requiring landowner to exercise
the 2 options under Art. 448
– Note: Since the landowner refused to exercise any of the 2
options, is it proper for the court to decide for them?

Javier v. Javier
• The son built on land belonging to the father
and with the latter’s consent.
• Father sold land to another.
• The son eventually purchased the lot.
• Son considered a builder in good faith and
court applied Art. 448.

PNB vs. De Jesus
• De Jesus sued PNB for recovery of ownership and
possession.
• De Jesus claimed he purchased the property
covered by TCT 17197 and after survey, north
part is being encroached upon by building owned
by PNB.
• PNB claimed it purchased adjoining property
from Ignacio. At time of sale, Ignacio
acknowledged encroachment and in fact offered
the portion for sale to PNB since he also owned
the lot (now owned by De Jesus)

PNB v. De Jesus
• Is PNB a builder in good faith?
• Held:
– PNB was made aware that part of the building
encroached upon the land of De Jesus – PNB is in
bad faith.
– Article 448 does not apply if the builder is also the
owner of the land which he subsequently loses by
sale or other mode of transfer

Rosales v. Castelltort
• Castelltort purchased Lot 16 from Lina.
• The engineer of Lina pointed to Lot 17 by
mistke and Catelltort built a house on Lot 17
instead of Lot 16.
• Court concluded that Castelltort is in good
faith and applied Art. 448.

Depra v. Dumlao
1. The trial Court shall determine
a) the present fair price of DEPRA's 34 square meter
area of land;
b) the amount of the expenses spent by DUMLAO
for the building of the kitchen;
c) the increase in value ("plus value") which the said
area of 34 square meters may have acquired by
reason thereof, and
d) whether the value of said area of land is
considerably more than that of the kitchen built
thereon.

Depra v. Dumlao
2. After said amounts shall have been determined by competent
evidence, the Regional, Trial Court shall render judgment, as follows:
a) The trial Court shall grant DEPRA a period of fifteen (15) days within
which to exercise his option under the law (Article 448, Civil Code),
whether to appropriate the kitchen as his own by paying to DUMLAO
either the amount of tile expenses spent by DUMLAO f or the building of
the kitchen, or the increase in value ("plus value") which the said area of
34 square meters may have acquired by reason thereof, or to oblige
DUMLAO to pay the price of said area. The amounts to be respectively
paid by DUMLAO and DEPRA, in accordance with the option thus
exercised by written notice of the other party and to the Court, shall be
paid by the obligor within fifteen (15) days from such notice of the option
by tendering the amount to the Court in favor of the party entitled to
receive it;



Depra v. Dumlao
b) The trial Court shall further order that if DEPRA exercises the option to oblige
DUMLAO to pay the price of the land but the latter rejects such purchase because,
as found by the trial Court, the value of the land is considerably more than that of
the kitchen, DUMLAO shall give written notice of such rejection to DEPRA and to
the Court within fifteen (15) days from notice of DEPRA's option to sell the land. In
that event, the parties shall be given a period of fifteen (15) days from such notice
of rejection within which to agree upon the terms of the lease, and give the Court
formal written notice of such agreement and its provisos. If no agreement is
reached by the parties, the trial Court, within fifteen (15) days from and after the
termination of the said period fixed for negotiation, shall then fix the terms of the
lease, provided that the monthly rental to be fixed by the Court shall not be less
than Ten Pesos (P10.00) per month, payable within the first five (5) days of each
calendar month. The period for the forced lease shall not be more than two (2)
years, counted from the finality of the judgment, considering the long period of
time since 1952 that DUMLAO has occupied the subject area. The rental thus fixed
shall be increased by ten percent (10%) for the second year of the forced lease.
DUMLAO shall not make any further constructions or improvements on the
kitchen. Upon expiration of the two-year period, or upon default by DUMLAO in
the payment of rentals for two (2) consecutive months, DEPRA shall be entitled to
terminate the forced lease, to recover his land, and to have the kitchen removed
by DUMLAO or at the latter's expense. The rentals herein provided shall be
tendered by DUMLAO to the Court for payment to DEPRA, and such tender shall
constitute evidence of whether or not compliance was made within the period
fixed by the Court.

Depra v. Dumlao
c) In any event, DUMLAO shall pay DEPRA an amount
computed at Ten Pesos (P10.00) per month as reasonable
compensation for the occupancy of DEPRA's land for the
period counted from 1952, the year DUMLAO occupied
the subject area, up to the commencement date of the
forced lease referred to in the preceding paragraph;
d) The periods to be fixed by the trial Court in its
Precision shall be inextendible, and upon failure of the
party obliged to tender to the trial Court the amount due
to the obligee, the party entitled to such payment shall
be entitled to an order of execution for the enforcement
of payment of the amount due and for compliance with
such other acts as may be required by the prestation due
the obligee.

Accession

• General Rule: Accessory follows the principal. (Art. 445)
• Exception: Art. 120. The ownership of improvements,
whether for utility or adornment, made on the separate
property of the spouses at the expense of the partnership
or through the acts or efforts of either or both spouses
shall pertain to the conjugal partnership, or to the original
owner-spouse, subject to the following rules:




When the cost of the improvement made by the conjugal partnership
and any resulting increase in value are more than the value of the
property at the time of the improvement, the entire property of one
of the spouses shall belong to the conjugal partnership, subject to
reimbursement of the value of the property of the owner-spouse at
the time of the improvement; otherwise, said property shall be
retained in ownership by the owner-spouse, likewise subject to
reimbursement of the cost of the improvement.
In either case, the ownership of the entire property shall be vested
upon the reimbursement, which shall be made at the time of the
liquidation of the conjugal partnership. (158a)

Good Faith – Illustrative Case
• Technogas vs. CA, 268 SCRA 5
– One cannot be presumed to know the metes and
bounds of his property simply based on the
technical description on his title unless he is well
versed in the science of surveying.
– Hence, one who holds title and builds beyond his
property line cannot be presumed to be in bad
faith.

Application of Art. 448 Beyond Limited
Definition Good Faith
• Art. 448 applied to the following cases:
– Where children, upon invitation of their parents,
built a house on a lot owned by their parents.
(Macasaet case)
– Where a co-owner builds a house on land owned
in common which, after partition, is found to
overlapped with the land partitioned to another.
(Del Campo vs. Abesia, 160 SCRA 379)

Application of Art. 448 Beyond Limited
Definition Good Faith
• Art. 448 applied to the following cases:
– Where a party obtains permission to build on
land from one whom they mistakenly believed to
be the owner thereof. (Sarmiento vs. Agana, 129
SCRA 122)
– Where a son builds on a lot belonging to his father
with the latter’s consent. (Javier vs. Javier, 7 Phil
261)

Transferability of Benefits Under Art.
448
• Technogas case
• A buyer of a property from a builder in good
faith enjoys the same if it can be shown that
at the time of acquisition, he is not aware of
any flaw in the property he is acquiring.

Grant To Of Option to Landowner is
Preclusive
• The grant of the option is “preclusive” (PNB
vs. De Jesus, 411 SCRA 557) – the landowner
cannot refuse to exercise either option and
compel instead the owner of the building to
remove it from the land. (Technogas vs. CA, 28
SCRA 5)

Why Is Grant Preclusive?

• Where the builder, planter or sower has acted in good
faith, a conflict of rights arises between the owners,
and it becomes necessary to protect the owner of the
improvements without causing injustice to the owner
of the land. In view of the impracticability of creating a
state of forced co-ownership, the law has provided a
just solution by giving the owner of the land the option
to acquire the improvements after payment of the
proper indemnity, or to oblige the builder or planter to
pay for the land and the sower the proper rent. He
cannot refuse to exercise either option. It is the owner
of the land who is authorized to exercise the option,
because his right is older, and because, by the principle
of accession, he is entitled to the ownership of the
accessory thing. (Rosales vs. Castelltort, 472 SCRA 144)

Can Landowner Demand Removal/
Demolition If BPS in Good Faith?
• When the landowner opts to sell the land and
payment is refused without justifiable cause.
– Justifiable cause means the value of the property
is considerably more than the building.

• When the landowner opts to lease the land to
the builder but the latter defaults in the
payment of 2 consecutive monthly rent or
when the lease expires. (Technogas case)

How Will the Trial Court Apply Art. 448
• First, determine the values of the properties
– Determine the fair price of the property encroached
upon;
– Determine the increase in value (plus value) which
the encroached property may have enjoyed by reason
of the existence of the portion of the building on the
area;
– Determine the encroaching value of the building;
– Determine whether the value of the said area of land
is considerably more than the fair market value of the
portion of the building thereon.

How Will the Trial Court Apply Art. 448
• After determining the respective values, the court
shall render judgment, as follows –
– Give the landowner 15 days within which to exercise
the option to appropriate the encroaching portion of
the building upon payment of its fair market value or
to oblige the builder after paying the price of the area
encroached.
– If landowner chooses to appropriate – pay the value
of the building or the plus value.
– If the landowner opts to sell the portion of land
encroached upon, builder must pay the fair value of
the land encroached upon.

How Will the Trial Court Apply Art. 448
• If purchase of land is rejected because the value
of the land is considerably more than the value of
the building –
– advise the landowner and the court w/in 15 days
from notice of landowner’s exercise of the option.
– give the parties 15 days from notice of rejection to
agree on the terms of the lease.
– If no agreement, the court fixes the terms of the lease
within 15 days from expiry of the period for
negotiation.
• The term of the lease as fixed by the court should not
exceed 2 years.
(Depra vs. Dumlao, 136 SCRA 475)

Right of Retention

• Builder Planter or Sower in Good Faith may Retain
Possession of the Land
– If Landowner chooses to appropriate
– Indemnity is not yet paid in full

• Purpose of right of retention – to ensure full and
prompt reimbursement.
• During the period of retention, builder cannot be
forced to pay rent. (Nuguid vs. Court of Appeals, 452
SCRA 243)
• Destruction of the improvement due to fortuitous
events and without fault of the landowner negates the
right to be paid for the expenses and the right to
retain. (Manotok Realty vs. Tecson, 164 SCRA 587)

Builder/Planter/Sower in Bad Faith
• General Rule: What is built, planted, or sown is
lost without right of indemnity. (Art. 449)
• Exception: If the improvement has already been
harvested, there is no accession and Art. 449 will
not apply.
• Consequently, if fruits have been gathered and
the sower/ planter is ordered to give the fruits to
the landowner – Art. 443 applies and the
sower/planter must be paid for the expenses
cultivation, harvesting, and preservation.

When Both BPS Acted in Good Faith
Landowner in Bad Faith
• Article 454 – Apply provisions of Article 447
– Landowner considered having made the building,
planting or sowing thru the BPS using the
materials of another.
– Consequently, the landowner should pay the
value of the materials plus damages.
– The owner can remove the materials, even if
damage is caused, and still demand payment of
damages.

BPS Builds/Plants/Sows on Land of Another Using
Materials of a Third Person Not in Bad Faith
• Art. 455 – landowner makes use of the materials, he
pays if the BPS has no property with which to pay.
– the landowner “makes use” of the materials only if he
appropriates the construction AND NOT if he compels
builder to purchase the land or to demolish the
construction.

• If landowner demolishes what was built/ planted/
sown Art. 455 DOES NOT apply.
• If BPS paid the owner of the materials the BPS, the BPS
may demand from landowner the value of the
materials and labor. This assumes that the landowner
chooses to appropriate the materials.

BPS Builds/Plants/Sows on Land of Another Using
Materials of a Third Person Not in Bad Faith

• What if the owner of the materials is in bad
faith?
– He loses the right to be indemnified
– He is liable for damages

Good Faith & Negligence
• A party may be in good faith even if he was
negligent.
– the presence of negligence does not necessarily
produce bad faith.
– however, negligence gives rise to the obligation to
pay damages.

Cases
• Pacific farms, Inc., vs. Simplicio G. Esguerra,
et al., G.R. No. L-21783 November 29, 1969

Pacific Farms Case
• Can we apply Article 447 in a case where a
party builds on land belonging to a third party
using the materials of another?
• Yes, by analogy, the building is considered the
principal and the building is the accessory.

Pacific Farms Case
• Applying Art. 447 if a building constructed
using the materials of another is sold to a
third party, who should pay for the materials?
• If the buyer is in bad faith, he should pay for
the materials. Well-established in
jurisprudence is the rule that compensation
should be borne by the person who has been
benefited by the accession.

ACCESSION NATURAL

Accretion
• Accretion is the process whereby the
soil is deposited on land due to the
current of the river.
• Alluvium is the soil actually
deposited on the land by the process
of accretion.

Requisites for Accretion
• Accretion benefits a riparian owner when the
following requisites are present:
(1) that the deposit be gradual and imperceptible;
(2) that it resulted from the effects of the current of the
water; and
(3) that the land where accretion takes place is adjacent
to the bank of a river (Republic v. Court of Appeals, G.R.
No. L-61647, October 12, 1984, 132 SCRA 514, cited in
Agustin v. Intermediate Appellate Court, G.R. Nos.
66075-76, July 5, 1990, 187 SCRA 218).

Definitions
• River
– A natural collection of waters, arising from springs
or fountains, which flow in a bed or canal of
considerable width and length, towards the sea.
– “River" consists of water, a bed and banks, these
several parts constituting the river, the whole
river. It is a compound idea; it cannot exist
without all its parts. Evaporate the water, and you
have a dry hollow. If you could sink the bed,
instead of a river, you would have a fathomless
gulf. Remove the banks, and you have a boundless
flood. (Hilario vs. City of Manila, 19 SCRA 931)

Definition
Banks of River
• Lateral strips or zones of its bed which are
washed by the stream only during such high
floods as do not cause inundations or to the
point reached by river at hightide. (Hilario vs.
City of Manila, 19 SCRA 931)

Rules on Accretion
• Art. 457. To the owners of lands adjoining the
banks of rivers belong the accretion which
they gradually receive from the effects of the
current of the waters. (336)
• Art. 458. The owners of estates adjoining
ponds or lagoons do not acquire the land left
dry by the natural decrease of the waters, or
lose that inundated by them in extraordinary
floods. (367)

Accretion on Riverbanks
• They form part of the land of the riparian owner.
– Provided all the requisites are present
– Provided no human intervention is made to effect or
enhance accretion

• The addition formed by the alluvion belongs
automatically to the riparian owner as a natural
incident to ownership.
• The purchaser of land sold on installment enjoys the
accretion even if there is no full payment yet. (Asst.
Secretary vs. CA, 169 SCRA 27) Reason: The owner
reserves title thereto only for its protection and the
beneficial and equitable title is in the purchaser.

Registration of Alluvial Deposit
• The accretion is automatically owned by the
riparian owner.
• However, the alluvial property MUST be
registered. If not registered, it is subject to
acquisition thru prescription by third parties.
(Heirs of Emiliano Navarro vs. IAC, 268 SCRA
86)

Ponds, Lagoons, Lake & Creek
• Pond – body of stagnant water without an outlet,
larger than a puddle and smaller than a lake, or a like
body of water with a small outlet.
• Lagoon – a small lake, ordinarily of fresh water, and not
very deep, fed by floods, the hollow bed of which is
bounded by elevations of land.
• Lake - A body of water formed in depressions of the
earth. Ordinarily fresh water, coming from rivers,
brooks, or springs, and connected with the sea by
them. (Gov’t vs. Colegio de San Jose, G.R. No. L-30829,
August 28, 1929)
• Creek - recess or arm extending from a river and
participating in the ebb and flow of the sea. (Mercado
vs. Municipal President of Macabebe, 59 Phil. 592
[1934])

Rule on Lagoons/Ponds
• Article 458
– owners of land adjoining ponds or
lagoons:
• Do not acquire land left dry by the
natural decrease of waters
• Do not lose what is inundated because of
floods

Rule on Lakes
• ART 84. Accretions deposited gradually upon
lands contiguous to creeks, streams, rivers, and
lakes, by accessions or sediments from the
waters thereof, belong to the owners of such
lands. . (Gov’t vs. Colegio de San Jose, G.R. No.
L-30829, August 28, 1929)
• Laguna de Bay is a lake. Hence the riparian
owner also owns the accretion.
• Manila Bay is a sea for purposes of accretion.
Hence accretion from Manila Bay constitutes
foreshore lands and is owned by the
government. (Heirs of Emiliano Navarro)

Avulsion
• Definition:
– Transfer of a known portion of land from one
tenement to another by force of the current.

• Distinguished from accretion
– In accretion the deposit of soil is gradual, in avulsion
it is sudden or abrupt;
– In accretion, the owner of the land to which alluvion
attached becomes the owner, in avulsion, the owner
of the property from which a portion is detached
retains ownership.
– In accretion, the owner of the soil (alluivium) is not
known, while in avulsion the owner of the land which
is detached is known.

Two-Year Period
• Reason:
– It is impractical to insist on retention of ownership
because the owner of the segregated property may
not want to be burdened anymore due to the distance
of the segregated portion from his property;
– the owner of the property to which it is attached will
be unduly burdened if the segregated property is not
timely removed;
– the retention of ownership of the known portion may
require the establishment of an easement over the
tenement to which it is attached – thereby developing
ill-will;
– After some time, the segregated portion may blend
with the property to which it is attached.

Uprooted Trees
• Art. 460
– Owner of uprooted trees may reclaim within 6
months, but must pay expenses for gathering and
placing them in a safe place (preservation).
– Owner of the land acquires ownership after 6
months.

Abandonment of River Bed
• Article 461
– the owner of the land invaded by the new course
of the river becomes owner of the abandoned
bed.
– The right is automatically acquired by the owner
of the invaded land.

• Is Art. 461 applicable to a dried up river?
– Art. 461 does not apply where the riverbed dries
up.

Lands Isolated By Branching of Rivers
• Art. 463
– the owner does not lose his ownership simply
because of an inundation which has converted his
land into an island.

Formation of Islands
• Arts. 464 & 465
– Islands formed on the seas, lakes, navigable or
floatable rivers belongs to the state.
– Islands formed in non-navigable and nonfloatable rivers belong to the owners of the
margins or banks nearest to them. If the island is
in the middle of the river, it shall be divided
longitudinally in half.

Cases
1. Government of the Phil Islands vs. Cabangis, 53
Phil 112
2. Hilario v. City of Manila, GR No. L-19570 April
27, 1967
3. Republic v. CA, G.R. No. L-61647. October 12,
1984.
4. Binalay vs. Manalo, G.R. No. 92161 March 18,
1991
5. Baes vs. CA, G.R. No. 108065, July 6, 1993
6. Vda. De Nazareno v. CA, G.R. No. 98045. June
26, 1996.

Cases
7. De Buyser v. Director of Lands, G.R. No. L22763. March 18, 1983.
8. Ignacio v. Director of Lands, G.R. No. L-12958.
May 30, 1960.
9. Government v. Colegio de San Jose, G.R. No.
30829. August 28, 1929.
10. Maneclang v. IAC, G.R. No. L-66575. September
30, 1986.
11. Bantao vs. Dabay, G.R. No. 12264,
September 23, 1918
12. Jaguling vs. CA, G.R. No. 94283, March 4, 1991

Accession With Respect to
Movable Porperties
Articles 466-475

Definitions

• Adjunction (conjunction)

– the union of two movable things belonging to two
different owners in such a way that they form a single
object but each of the component things preserve
their value.

• Mixture
– two or more things belonging to different owners are
mixed with the respective identities of the component
parts destroyed or lost.

• Specification
– work is done on the material of another, such
material, in the consequence of the work itself,
undergoing a transformation.

Illustration
• Adjunction
– metal figure of horse is welded on the metal hood
of a car.

• Mixture
– rice belonging to different owners are mixed
together.

• Specification
– wood belonging to another is used by a sculptor
and is transformed into a wooden statue.

ADJUNCTION

1. Inclusion or engraftment

MIXTURE

1. Commixtion – mixture of
solid things belonging to
different owners.

2. Soldidura or soldering – fusion of metals
2. Confusion – mixture of
2.1 ferruminacion – both principal &
liquid things belonging to
accessory of same metal
different owners.
2.2 plumbatura – objects are of different
kinds of metal
3. Escritura – a person writes on paper
belonging to another.
4. Pintura – a person paints on canvass
belonging to another.
5. Tejido – when threads belonging to
different owners are used to make textile.

Principal/ Accessory
• Principal
– that to which the other has been united as an
ornament, or for its use or perfection. (Art. 467)

• Accessory
– that which has been added to another object as
an ornament, of for the object’s use or perfection.

Test
• First, determine which is the principal and the
accessory using Art. 467. (Rule of Importance or
Purpose)
• If unsuccessful, apply the following:
– The Principal is the one which has greater value
– If both of equal value, the Principal is the one with greater
volume

• Special Rules
– Paintings, canvass is the accessory
– Sculpture, metal or stone is the accessory
– Writings or printed matter, paper or parchment is the
accessory
– Engraving or lithographs, the stone or metal plate is the
accessory

Application of Rules on Adjunction
FIRST DETERMINE WHICH IS THE PRINCIPAL AND WHICH IS THE ACCESSORY
Accessory owner in Good Faith

Accessory owner in BF

Owner of
Principal in
Good Faith

Art. 466 – Owner of the Principal
acquires the accessory, but he must
pay the owner of the Accessory its
value.

Art. 470 - The owner of
the Accessory loses
what is incorporated
and must pay the
owner of the Principal,
damages.

Owner of
Principal in
Bad Faith

Art. 470 – the owner of the
Accessory may:
1. Compel the owner of the
Principal to pay the value of
accessory; or
2. Insist on separation of the
objects even if principal is
damaged.
3. Damages must be paid in either
option.

Apply 466 – both are
considered in good
faith.

Application of Rules on Mixture
Owner 1 in Good
Faith

Owner 1 in Bad
Faith

Owner 2 in Good
Faith

Owner 2 in Bad
Faith

Each owner shares
in proportion to the
value of the part
which belongs to
him. (Art. 472)
Owner 1 loses the
thing belonging to
him AND must pay
damages. (Art. 472)

Owner 2 loses the
thing belonging to
him AND must pay
damages. (Art. 472)
Both are considered
in good faith and
each owner shares
in proportion to the
value of the part
which belongs to
him. (Art. 472)

Application of Rules on Specification
Owner of Materials in Good Faith

Owner of Materials
in Bad Faith

User of
Materials
in Good
Faith

The user becomes the owner of the final
product but must pay the owner of the
materials their value.
Exception: If the material is more
precious than the product, the owner of
the material may (a) appropriate the
product but must pay the value of the
labor employed; or (b) demand
indemnity for the material.

The user may: (a)
appropriate the new
thing without
paying the value of
the material; or (b)
demand that the
owner of the
materials pay him
the value of his
labor. Plus damages
in either case.

User of
Materials
in Bad
Faith

Owner of the material has the option to: (a)
appropriate the work without paying the user; or
(b) demand the value of the materials. Plus
damages in both cases.
Note: If the value of the product, for scientific or
artistic reasons, is considerably more than the
material option (a) is not allowed.

Both are considered
in good faith.

Adjunction/ Mixture/ Specification
End-Product

Nature of
Component
Parts

Principle
Applied

Adjunction
Mixture
Specification
Composed of Composed of One thing
2 things
2 things
whose form
is changed
Component The things
Component
parts
mixed may or parts retain
preserve
may not
their nature
their nature retain their
nature
Accessory
CoAccessory
follows the
ownership
follows the
principal
results
principal

Arts. 476 – 481

ACTION TO QUIET TITLE

Cloud On Title
• A cloud on title is a semblance of title, either legal
or equitable, or a claim or a right in real property,
appearing in some legal form but which is, in fact,
invalid or which would be inequitable to enforce.
(Ballantine Law Dictionary, p. 226)
• A statement claiming an equitable interest in
certain land, and signed only by claimant does
not, although recorded in the register of deeds,
constitute a cloud on title of the owner.
(Leeds vs. Wheeler, 157 Mass. 7, 31 N.E. 709)

Cloud On Title
• Cloud Must Be Substantial
– such as to cause a reasonable fear that it may at
some time be asserted against the owner injuriously.

• Oral Assertion of Right
– not created by mere verbal or parol assertion of
ownership.

• Apprehended or Threatened Cloud
– can be resorted to even with respect to a threatened
cloud

Requisites for Existence of Cloud
• There is an instrument, record, claim,
encumbrance or proceeding which is apparently
valid or effective.
• Such instrument, etc. is, in truth and in fact,
invalid, ineffective, voidable, or unenforceable, or
it has been extinguished or terminated, or has
been barred by extinctive prescription.
• Such instrument, etc. may be prejudicial to said
title.

Examples of Cloud On Title
• A fictitious contract of sale;
• A sale of an agent without written authority or
after expiration of his authority;
• A forged contract;
• A contract of sale or donation which has
become in-operative because of nonperformance by the vendee/ donee of a
condition precedent;
• A voidable contract.

Nature of Action
• What is the nature of actions to quiet title?
– Actions to quiet title are suits “quasi-in-rem”

• What is meant by suits “quasi-in-rem”?
– They are actions against persons with respect to
the res wherein the judgment does not extend
beyond the property in controversy.
– They are conclusive only between the parties
(Portic vs. Cristobal, 456 SCRA 577)

Extinguishment of Right
• The title to property may be quieted with
respect to any instrument which has become
functus oficio by reason of facts which can be
shown only by extrinsic evidence.
– Title and liens which have lost their force or failed
to become operative because the persons entitled
thereto failed to enforce them have been
cancelled as clouds.
– Mortgages which are unenforceable by reason of
the expiration of the period of limitations.

Prescription of Action
• When Plaintiff is in Possession
– the action does not prescribe (Aznar Bros. Realty
Co., vs. Aying, 458 SCRA 496)

• When Plaintiff is not in Possession
– 10 yrs for ordinary prescription/ 30 yrs for
extraordinary prescription.

Requirements
• What are the requirements to maintain an
action to quiet title?
– legal or equitable title or interest

• Does title mean an OCT/TCT?
– no title referred to is the legal right over the
property

Obligation of the Plaintiff
• Art. 479 – the plaintiff must return to the
defendant all benefits he may have received
from the latter, or reimburse him for expenses
that may have redounded to his benefit.
– Thus, in the cancellation of a recorded contract of
sale of real estate, as a cloud upon vendor’s title,
the vendor is required to return to the vendee all
amounts paid to the former by virtue of the
contract, less any damages suffered by the vendor.

CO-OWNERSHIP

Definition
• It is a form of trust and every co-owner is a
trustee for others. (Castrillo vs. CA, G.R. No. L18046, March 31, 1964) Thus, as a general rule,
no one of the co-owners may acquire exclusive
ownership of the common property through
prescription, for possession by one trustee alone
is not deemed adverse to the rest.
• A form of ownership which exists whenever an
undivided thing or right belongs to different
persons.

Definition
• Sanchez Roman
– the right of common dominion which two or more
persons have in a spiritual part of a thing, not
materially or physically divided.

• Manresa
– manifestation of the private right of ownership,
which instead of being exercised by the owner in an
exclusive manner over the thing subject to it, is
exercised by two or more owners and the undivided
thing or right to which it refers is one and the same.

Requisites for Co-Ownership to Exist
1. Plurality of owners;
– More than one owner of one single property.

2. The object of ownership is an “undivided”
thing or right;
– There is no partition of the property.

3. Each co-owner’s right is limited to his “ideal”
share.
– There is no specific portion allotted to the coowner.

“Undivided” Defined
• It is not undivided if the shares are already
pre-determined/ identified even if not
technically identified.

How Created
• By Contract
– By agreement of the parties.

• By Law
– Article 90 of Family Code (The provisions on co-ownership shall
apply to the absolute community of property between the
spouses in all matters not provided for in this Chapter.)

• By Succession
– Heirs become co-owners with respect to the property of the
decedent.

• By Testamentary Disposition/ Donation
• By Fortuitous Event/ Chance
• By Occupancy

Rights of Co-Owners
As to Benefits and Charges
• They share in the benefits and charges in
proportion to their respective interest.
– In the absence of contrary evidence, share is
presumed equal (Art. 485)

Rights of Co-Owners
Right To Use Property
Owned in Common
• Must be for the purpose for which the coownership is intended.
• In such a way as not to injure the interest of
the co-ownership.
• In such a way as not to prevent the other coowners from using it according to their rights.

Purpose of Co-Ownership
• How to determine purpose
– Agreement of the parties
– Ordinary use of the thing owned in common
– Previous particular use of the thing owned in
common
– Mere tolerance, in the absence of any agreement,
does not establish purpose.

Manner Of Use
• Cannot be used for a different purpose than
that intended
– Use of apartment house owned in common as
dwelling

• Cannot use the property in a destructive way

Rights of Co-Owners
Ejectment
• Anyone of the co-owners may bring an action for
ejectment
• Basis
– Suit is deemed to be instituted for the benefit of all.

• Effects
– A person authorized to file an action by one co-owner
does not require the authority of the others.
– But all co-owners must be named as party to the suit.

Rights of Co-Owners
Expenses
• Right to compel co-owners to contribute to
expenses for preservation of the thing and
taxes
– Only necessary expenses (Art. 546) are covered

• Exception
– Co-owner may renounce so much of his share as
may be equivalent to his share in the expenses.

Acts Relating To Property Owned in
Common
• Acts of Preservation
• Acts of Administration
• Acts of Alteration

Acts of Preservation
• What constitute acts of preservation?
– Incurring expenses for the preservation,
maintenance, and necessary repairs of the thing
owned in common.

• Examples:
– Payment of real estate taxes
– Payment of regular car maintenance
– Expenses for the rehabilitation of structural
support of a building.

Acts of Administration
• Definition
– Acts or decisions for the common benefit of all
the co-owners.
– Expenses to improve or embellish the thing
owned in common.

• Example
– Leasing co-owned property for less than one year
where lease is not registered.
– House renovation to improve marketability.

Acts of Alteration
• Definition
– Change in the property owned in common involving:
• Change in the essence of the property (conversion of a car to
a funeral car)
• Change in the use of the property (van is used as a
stationary diner)
• Any transformation which prejudices the condition or
substance of the property (conversion of residential lot to a
piggery)

– Any act of strict ownership
• Sale or mortgage of entire property
• Lease of property for more than 1 year and same is
registered.

Acts or Decisions Affecting Co-Owned Property
Consent Required
Acts of
Preservation

Mere notice if
practicable. (Art. 489)

Acts of
Majority of the coAdministration owners is required.
(Art. 492)
* Majority = 51% or
more of financial
interest
Acts of
Alteration

Liability for Cost
With or without notice, all coowners are liable. (Art. 489)
subject to their respective
interest. (Art. 485)
* Any of the co-owners may
exempt himself thru
renunciation (Art. 488)
Each co-owner is liable to the
extent of their respective
interest. (Art. 485)

All of the co-owners
Each co-owner is liable to the
must give their consent. extent of their respective
(Art. 491)
interest. (Art. 485)

Rights of Co-Owner Under Art. 493
• Art. 493
– He shall have full-ownership of his part, i.e. his
undivided interest or share in the common property;
– He shall have full ownership of the fruits and benefits
pertaining thereto;
– He may alienate, assign, or mortgage his ideal interest
independently of the other co-owners;
– He may substitute another person in the enjoyment of
his part, except when personal rights are involved.

Sale of Co-Owned Property
• Effect of Sale of Entire Property Co-Owned
• Sanchez vs. CA, 404 SCRA 540
– 5 out of 6 co-owners sold their rights over a
parcel of land
– Non-selling co-owner refused to vacate the land
sold
– Can the buyer take-over the land and demolish
the house of non-selling co-owner?
– No. There should be a partition to determine the
portion belonging to f the non-selling co-owner.

Vagilidad vs. Vagilidad, 507 SCRA
• 1931 - Zolio died. He is owner of parcel of land Lot
1253 with an area of 4,280 sq. m
• Zolio left 3 children – LORETO, EFREN, and PRESCILA
• May 12, 1986 – LORETO sold to Gabino V, a portion of
lot 1253 (Lot 1235-B) measuring 1,604 sq m
• July 31, 1987 – Extra Judicial Settlement by LORETO,
EFREN, and PRESCILA adjudicating entire lot 1253 to
Loreto.
• Sept 21, 1988 - Gabino V paid real estate tax
• Dec. 7, 1989 – Gabino sold to Wilfredo V
• Dec. 7, 1989 – LORETO sold lot to Wilfredo V

• Sept. 29, 1995 – Sps Gabino sues Sps Wilfredo for
annulment of document, reconveyance, etc.
– Sps Gabino claims property sold to Wilfredo for “loaning”
purposes only

Ruling of the Lower Court
• Sale from LORETO to Gabino V is null and void. LORETO can
sell only his aliquot share, not a divided part. Hence, the
sale from LORETO to Wilfredo is valid.
Ruling of the CA
• The sale from LORETO to Gabino is valid. At the time of the
sale, he is already entitled to the inheritance.
Ruling of the SC
• A co-owner has the right, even before partition, to sell his
undivided right over the thing owned. Thus, when LORETO
sold the same parcel to Wilfredo subsequently, they
(LORETO) did not own the land anymore.

Right of Redemption
• Art. 1620
– A co-owner of a thing may exercise the right of
redemption in case the shares of all the other coowners or of any of them, are sold to a third person. If
the price of the alienation is grossly excessive, the
redemptioner shall pay only a reasonable one.
– Should two or more co-owners desire to exercise the
right of redemption, they may only do so in
proportion to the share they may respectively have in
the thing owned in common. (1522a)

Purpose of Right of Redemption
• Purpose of Right Given Co-Owner
– The purpose of the law in establishing the right of
legal redemption between co-owners is to reduce the
number of the participants until the community is
done away with (Viola v. Tecson, 49 Phil. 808).

• Effect of Redemption by Co-Owner
– Redemption by a co-owner within the period
prescribed by law inures to the benefit of all the other
co-owners. (Mariano vs. CA, G.R. No. 101522 May 28,
1993)

Personal Rights
• A co-owner may substitute another in the
enjoyment of his undivided interest EXCEPT:
– When personal rights are involved
• A right that cannot be transferred because it affects the
personal relations of the co-owners with one another.
• Example: House inherited by children and used by them
as dwelling.

Termination of Co-Ownership
• Consolidation in one co-owner of all the interests
of the other co-owners.
• Destruction or loss of the property co-owned.
• Acquisitive prescription by a third party or one
co-owner who repudiates the co-ownership.
• By partition, either judicial or extra-judicial.
• By the termination of the period agreed upon or
imposed by the donor or testator.
• Sale of the co-owners of the thing and the
distribution of the proceeds.

Partition
• General Rule: A co-owner may demand partition of the
thing owned in common. (Art. 494)
• Exception:
– when co-owners agree not to partition for a period not
exceeding 10 years.
– when the donor/testator prohibits partition for a period
not exceeding 20 years.
– When partition is prohibited by law.
– When partition will render the thing unserviceable (Art.
495)
– When another co-owner has possessed the property as
exclusive owner and for a period sufficient to acquire it by
prescription.

Rights of Creditors
• Art. 497. The creditors or assignees of the coowners may take part in the division of the thing
owned in common and object to its being
effected without their concurrence. But they
cannot impugn any partition already executed,
unless there has been fraud, or in case it was
made notwithstanding a formal opposition
presented to prevent it, without prejudice to the
right of the debtor or assignor to maintain its
validity. (403)

Art. 497 – Creditors Included
• All creditors are included, whether secured or
privileged, and those of any category under
title of alienation, exchange, donation or
assignment.
• Includes an assignee to whom there has been
no delivery of the interest assigned to him and
has only a personal right against the assignor.

Indivisible Object
• Art. 498. Whenever the thing is essentially
indivisible and the co-owners cannot agree that it
be allotted to one of them who shall indemnify
the others, it shall be sold and its proceeds
distributed. (404)
– Despite the fact that a thing cannot be partitioned if
it will become unserviceable (Art. 495), still, coownership can be terminated by adjudication to one
of the co-owners or the selling of the thing.

Lien on Co-Owned Property
• Art. 499. The partition of a thing owned in
common shall not prejudice third persons,
who shall retain the rights of mortgage,
servitude or any other real rights belonging to
them before the division was made. Personal
rights pertaining to third persons against the
co-ownership shall also remain in force,
notwithstanding the partition. (405)

Art. 499 Interpreted
• Third persons are those who did not participate
in the partition.
• A and B are co-owners of 28 lots. A sold to X his
share in 2 of the lots with right to repurchase.
Thereafter A and B partitioned all the 28 lots such
that 2 of the lots sold to X were granted to A.
What is the right of X with respect to the 2 lots?
• He is the owner of an undivided one-half of the 2
lots in question. X is a “third person” within the
meaning of Art. 499.

Accounting
• Art. 500. Upon partition, there shall be a
mutual accounting for benefits received and
reimbursements for expenses made. Likewise,
each co-owner shall pay for damages caused
by reason of his negligence or fraud. (n)

Liability
• Art. 501. Every co-owner shall, after partition,
be liable for defects of title and quality of the
portion assigned to each of the other coowners. (n)

Cases
• Cruz vs. CA, G.R. No. 122904, April 15, 2005
• Quimpo vs. Vda. De Beltran, G.R. No. 160956,
February 13, 2008
• Castrillo vs. CA, G.R. No. L-18046, March 31, 1964
• Dela Cruz vs. Cruz, G.R. No. L-27759 April 17,
1970
• Lavadia vs. Cosme, 72 Phil 196
• Pardell vs. Bartolome, 23 Phil 450
• Arcelona vs. CA, 280 SCRA 20

Cruz vs. CA, G.R. No. 122904, April 15, 2005

• Documents Involved?

– Deed of Partial Partition
– MOA to share the proceeds of the sale

• Based on the provisions of the MOA was co-ownership continued?
– No, co-ownership is terminated upon judicial or extra-judicial
partition of the properties owned in common. Partition, in general, is
the separation, division and assignment of a thing held in common
among those to whom it may belong. Every act which is intended to
put an end to indivision among co-heirs and legatees or devisees is
deemed to be a partition, although it should purport to be a sale, an
exchange, a compromise, or any other transaction.

• What were considered by the Supreme Court as indication that the
was indeed a partition despite the subsequent execution of the
MOA.
– The statement in the Deed of Partial Partition ending the state of coownership;
– The identification of the mass of shares and the distribution of a
particular part to each of the co-owners.

Quimpo vs. Vda. De Beltran, G.R. No.
160956, February 13, 2008
• When is “parol partition” recognized by the courts?
– Regardless of whether it is enforceable, on the ground of
equity when it has been fully or partially executed.
– Parol partitions may be sustained on the ground of
estoppel of the parties to assert the rights of a tenant in
common as to parts of land divided by parol partition as to
which possession in severalty was taken and acts of
individual ownership were exercised.
– A parol partition may also be sustained on the ground that
the parties thereto have acquiesced in and ratified the
partition by taking possession in severalty, exercising acts
of ownership with respect thereto, or otherwise
recognizing the existence of the partition.
– Where there was a partition in fact between tenants in
common, and a part performance, a court of equity would
have regard to and enforce such partition agreed to by the
parties.

Castrillo vs. CA, G.R. No. L-18046, March 31, 1964

• Can a co-owner acquire the property held in
common by PRESCRIPTION?
– No, as a general rule, no one of them may acquire
exclusive ownership of the common property
through prescription, for possession by one
trustee alone is not deemed adverse to the rest.

POSSESSION

Possession versus Ownership
Ownership

Possession

Ownership exists when a thing pertaining
to one person is completely subjected to
his will in a manner not prohibited by law
and consistent with the rights of others.

On the other hand, possession is defined
as the holding of a thing or the enjoyment
of a right. Literally, to possess means to
actually and physically occupy a thing
with or without right.

Types of Possession
• Possession may be had in one of two ways:
possession in the concept of an owner and
possession of a holder.
• "A possessor in the concept of an owner may be
the owner himself or one who claims to be so."
On the other hand, "one who possesses as a
mere holder acknowledges in another a superior
right which he believes to be ownership, whether
his belief be right or wrong.“

Garcia vs. CA - G.R. No. 133140,
August 10, 1999

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