PROPERTY

WEEK 4
OWNERSHIP

SOLE OWNERSHIP
DEFINITION

Art. 427. Ownership may be exercised over things or rights.

Art. 712. Ownership is acquired by occupation and by intellectual creation. Ownership and other real
rights over property are acquired and transmitted by law, by donation, by estate and intestate
succession, and in consequence of certain contracts, by tradition. They may also be acquired by means
of prescription.

RIGHTS OF OWNERS

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.
Art. 429. The owner or lawful possessor of a thing has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary
to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.
Art. 430. Every owner may enclose or fence his land or tenements by means of walls, ditches, live or
dead hedges, or by any other means without detriment to servitudes constituted thereon.
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. Should this requirement be not first complied with, the
courts shall protect and, in a proper case, restore the owner in his possession.
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.
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.
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.
Art. 440. The ownership of property gives the right by accession to everything which is produced
thereby, or which is incorporated or attached thereto, either naturally or artificially.

RIGHTS OF ACTION IN REM/ IN PERSONAM/ QUASI IN REM

SANDEJAS v ROBLES 81 PHIL 421

FACTS: This is an appeal from an order of the Court of First Instance of Iloilo dismissing the plaintiff's
action upon motion of the defendant on the ground that it is barred by prior judgment.

The pertinent facts alleged in the complaint to which a motion to dismiss on the ground that the
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cause of action is barred by a prior judgment is filed, are those relating to the cause of action and the
parties, because if they are the same as the cause of action and the parties in the prior judgment, or
though the parties are different they represent the same interest, and the court rendering the prior
judgment had jurisdiction over the subject matter and the parties, the subsequent action is barred by
the prior judgment and should be dismissed.

In the present appeal, there is no question that the parties in the present and prior action are the
same or represent the same interest, and that the cause of action in both are the same, that is, the
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performance or non-performance of the terms and conditions of a contract of sale for the enforcement
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or resolution thereof.
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It appears that the appellants had submitted themselves to the jurisdiction of the Court of First
Instance of Iloilo by filing their answers to the complaint through their Atty. Benjamin H. Tirol, the same
attorney who represents them now; that they were notified of the date set for the hearing of the action,
but when the case was called for trial on September 29, 1944, their attorney asked and obtained
permission from the court to withdraw his appearance as attorney for the appellants stating as ground
therefor that it was difficult to communicate with his clients, who went to Arevalo, a suburb of and distant
of about six or seven kilometers from the Iloilo City, capital of the Province of Iloilo; that to give the
appellants opportunity to be heard, the hearing was postponed and set on the afternoon of the same
date; and that as they did not appear on the afternoon the case was heard and judgment was rendered
on October 2, 1944, declaring the resolution of the contract between the parties and ordering the
appellees to return to the appellants the sum of P5,723.60, received by the former from the latter as
payment on account of the sum of P35,000 agreed upon as purchase price.

And, according to the allegations in appellants' complaint, on October 25, 1944, the appellants
filed a motion for reconsideration which was denied by the court, and when they tried to appeal from the
decision the court denied the appeal on November 23, 1944, and declared the judgement final and
executory; and, on November 29, the appellants filed a motion for reconsideration of the order denying
the appeal, and up to the filing of the complaint in the present case no resolution of the motion has been
received by the appellants.

ISSUE: WON the action filed by the appellants for resolution of contract of sale of real
property is quasi in rem

RULING: The contention is wrong. The action instituted by the appellees to resolve the contract of
sale of said parcel of land, is in personam and not quasi in rem.

In personam is defined as If the technical object of the suit is to establish a claim against some
particular person, with a judgment which generally, in theory at least, binds his body, or to bar some
individual claim or objection, so that only certain persons are entitled to be heard in defense, the action
is in personam, although it may concern the right to or possession of a tangible thing. If, on the other
hand, the object is to bar indifferently all who might be minded to make an objection of any sort against
the right sought to be established, and if anyone in the world has a right to be heard on the strength of
alleging facts which, if true, show an inconsistent interest, the proceeding is in rem. (Tyler vs.
Judges, supra.).

According to an American Jurisprudence, Vol 1 page 435. An action in personam has for its object
a judgment against the person, as distinguished from a judgment against property, to determine
its status. Whether a proceeding is in rem or in personam is determined by its nature and purpose, and
by these only. A proceeding in personam is a proceeding to enforce personal rights and obligations
brought against the person and based on jurisdiction of the person, although it may involve
his right to, or the exercise of ownership of, specific property, or seek to compel him to control
or dispose of it in accordance with the mandate of the court.

In case of Banco Espanol-Filipino v Espana, The action quasi in rem differs from the true
action in rem in the circumstances that in the former an individual is named as defendant, and
the purpose of the proceeding is to subject his interest therein to the obligation or lien
burdening the property. All proceedings having for their sole object the sale or other disposition of
the property of the defendant, whether by attachment, foreclosure, or other form of remedy, are in a
general way thus designated. The judgment entered in these proceedings is conclusive only between the
parties.
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ALFREDO CHING V. COURT OF APPEALS 181 SCRA 9

FACTS: A Decree of Registration was issued issued to Sps. Nofuente and Lumandan for a parcel of land
situated Sitio of Kay-Biga Barrio of San Dionisio, Municipality of Paranaque, Province of Rizal. A portion
of said property was reconveyed by said spouses to Francisco, Regina, Perfects, Constancio and Matilde
all surnamed Nofuente and TCT No. 78633 was thus issued. By virtue of a sale to Ching Leng, TCT No.
78633 was cancelled then the issuance of TCT No. 91137.
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When Ching Leng died, Alfredo Ching her legitimate son was appointed as administrator of her
estate. 13 years after the death of Ching Leng, a suit was commenced by private respondent Pedro
Asedillo against Ching Leng for the reconveyance of the property covered by TCT No. 91137 based on
possession. An amended complaint was made by Asedillo alleging “that on account of the fact that the
defendant has been residing abroad up to the present, and it is not known whether the defendant is still
alive or dead, he or his estate may be served by summons and other processes only by publication.”

Summons by publication was made through “Economic Monitor”, newspaper of general circulation
in Province of Rizal, Pasay City. Subsequently, judgment by default was rendered and TCT No. 91137
was cancelled. The title was transferred to Asedillo who sold the same to Villa Esperanza Development,
Inc.

Petitioner Ching learned of the decision, and so he filed a verified petition to set it aside as null
and void for lack of jurisdiction. The verified petition was granted; however, on motion by Asedillo, the
same was set aside. Ching filed for reconsideration but was denied.

An original petition for certiorari with the Court of Appeals was filed by Ching but was dismissed.
During the pendency of the case, Asedillo died. Ching’s motion for reconsideration was likewise denied
by the CA. Thus, this petition for review on Certiorari.

ISSUE: W/N reconveyance and cancellation of title is in personam which cannot give
jurisdiction to the court by service of summons by publication.

RULING: Yes, reconveyance and cancellation of title are acts in personam.

Actions in personam and actions in rem differ in that the former are directed against
specific persons and seek personal judgments, while the latter are directed against the thing
or property or status of a person and seek judgments with respect thereto as against the
whole world.

An action to redeem, or to recover title to or possession of, real property is not an

action in rem or an action against the whole world, like a land registration proceeding or the probate
of a will; but it is an action in personam, for it binds a particular individual only although it concerns the
right to a tangible thing.

Asedillo’s action for reconveyance and cancellation of title being in personam, the judgment in
question is null and void for lack of jurisdiction over the person of the deceased Ching. Verily, the action
was commenced thirteen (13) years after the latter’s death. According to Dumlao v. Quality plastic
products, the decision of the lower court insofar as the deceased is concerned is void for lack of
jurisdiction over his person. He was not, and he could not have been validly served with summons. He
had no more civil personality, that its fitness to be subject of legal relations was lost through death.

Ching was an innocent purchaser for value as shown by the evidence adduced in his behalf by
petitioner Alfredo Ching, tracking back the roots of his title since 1960, from the time the decree of
registration was issued.

The sole remedy of the landowner whose property has been wrongfully or erroneously registered
in another’s name after one year from the date of the decree is not to set aside the decree but respecting
it and to bring an ordinary action in the ordinary court of justice for damages if the property has
transferred to an innocent purchaser for value.
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The Petition is hereby granted in favor of Ching. SC ordered to reinstate the title in controversy.

Hernandez v Development Bank of the Philippines GR No L-31095 June 18, 1975

Facts: Petitioner was an employee of defendant in its Legal Department for 21 years until his retirement
due to illness;

Petitioner was awarded a lot (810 sq-m, type E) in respondent’s Housing Project in Quezon City;
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However, more than a week thereafter, the Chief Accountant and Comptroller of the private
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respondent returned to the petitioner the checks he has paid pursuant to such award and informed him
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that the private respondent, through its Committee on Organization, Personnel and Facilities, had
cancelled the award of the lot and hour previously awarded on the ground that:

a) He has already retired;

b) He has only an option to purchase said house and lot;
c) There are a big number of employees who have no houses or lots;
d) He has been given his retirement gratuity; that the awarding of the aforementioned house and lot in
his favor would subserve the purpose;

Petitioner protested the cancellation and so filed a complaint in the CFI of Batangas, seeking
annulment of the cancellation of the award of the lot and house in his favor and the restoration of all his
rights thereto;

He contends that it is illegal and unwarranted because he has already a vested right thereto because
of the award;

Private respondent filed a motion to dismiss based on improper venue, contending that since the
petitioner’s action affects the title to a house and lot in Quezon city, the same should have been
commenced in the CFI of Quezon City where the real property is located.

Lower court ruling:

CFI of Batangas: sustained the motion to dismiss based on improper venue.

*Case immediately elevated to the SC

Issue: WON the action of petitioner was improperly laid in the CFI of Batangas

Ruling: No, the case was not improperly filed in the CFI of Batangas.

The venue of actions or, more appropriately, the county where the action is triable depends to a
great extent on the nature of the action to be filed, whether it is real or personal.

Real action is one brought for the specific recovery of land, tenements, or hereditaments. A
personal action is one brought for recovery of personal property, for the enforcement of some contract
or recovery of damages for its breach, or for the recovery of damages for the commission of an injury
to the person or property.

The court agrees that petitioner’s action is not a real but a personal action. As correctly insisted
by petitioner, his action is one to declare null and void the cancellation of the lot and house in his favor
which does not involve title and ownership over said properties but seeks to compel respondent to
recognize that the award is a valid and subsisting one which cannot arbitrarily and unilaterally cancel
and accordingly to accept the proffered payment in full which it had rejected and returned to petitioner.

Such an action is a personal action which may be properly brought by petitioner in his
residence.

The dismissal is overturned and the suit is remanded for further proceedings.

*Domagas v Jensen 448 SCRA 663

FACTS: Petitioner Domagas filed for a forcible entry case against Jensen. Summons and complaint were
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not served on respondent because the latter was apparently out of the country but it was received by
respondent’s brother Oscar who was then at the respondent’s house. The trial court rendered a decision
in favor of petitioner. Respondent did not appeal. August 20, 2000, respondent filed a complaint against
petitioner for the annulment of the decision of MTC since the service of summons was ineffective, the
respondent being out of the country. The RTC decided in favor of Jensen since there was no valid service
of the complaint and summons. The CA affirmed the decision, ruling that the case was an ejectment case
which is an action quasi in rem.

ISSUE: W/N the action of petitioner in the MTC against respondent is an action in personam
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or quasi in rem.
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RULING: The action of the petitioner for forcible entry is a real action and one in personam.
The settled rule is that the aim and object of an action determine its character. Whether a proceeding is
in rem or in personam or in quasi in rem is determined by its nature and purpose, and by these only. A
proceeding in personam is a proceeding to enforce personal rights and obligations brought against the
person and is based on the jurisdiction of the person, although it may involve his right, or the exercise
of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with
the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment
of a court, some responsibility or liability directly upon the person of the defendant. Of this character are
suits to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on
him. An action in personam is said to be one which has for its object a judgment against a person, as
distinguished from a judgment against the proprietary to determine its state… Actions for recovery of
real property are in personam.

Actions quasi in rem deal with the status, ownership or liability of a particular property but which
are intended to operate on these questions only as between the particular parties to the proceedings and
not to ascertain or cut off the rights or interest of all possible claimants. The judgments therein are
binding only upon the parties who joined in the action.

SPECIFIC RIGHTS TO PROTECTION AND ENFORCEMENT

Self-Help
Art. 429. The owner or lawful possessor of a thing has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary
to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.
Art. 430. Every owner may enclose or fence his land or tenements by means of walls, ditches, live or
dead hedges, or by any other means without detriment to servitudes constituted thereon.
Legal action
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.
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.
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.
Art. 536. In no case may possession be acquired through force or intimidation as long as there is a
possessor who objects thereto. He who believes that he has an action or a right to deprive another of
the holding of a thing, must invoke the aid of the competent court, if the holder should refuse to deliver
the thing.
Quieting of title
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in
truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an
action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein.
Art. 477. The plaintiff must have legal or equitable title to, or interest in the real property which is the
subject matter of the action. He need not be in possession of said property.
Art. 478. There may also be an action to quiet title or remove a cloud therefrom when the contract,
instrument or other obligation has been extinguished or has terminated, or has been barred by extinctive
prescription.
Art. 479. The plaintiff must return to the defendant all benefits he may have received from the latter,
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or reimburse him for expenses that may have redounded to the plaintiff's benefit.
Art. 480. The principles of the general law on the quieting of title are hereby adopted insofar as they
are not in conflict with this Code.
Art. 481. The procedure for the quieting of title or the removal of a cloud therefrom shall be governed
by such rules of court as the Supreme Court shall promulgated.

Heirs of Olviga v Court of Appeals 227 SCRA 330

Facts: This is a petition to review the decision of the Court of Appeals affirming the decision of the RTC
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ordering the defendants, heirs of Jose Olviga, to reconvey the land in dispute to the plaintiffs, heirs of
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Cornelia Glor and to pay attorney's fees and the costs of suit.
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It was established by the evidence on record that the land in question was, in 1950, still forest
land when Eutiquio Pureza, then only twelve years old, and his father cleared, cultivated, and introduced
improvements such as, coconut trees, jackfruit, mangoes, avocado and bananas. When the area was
released for disposition, the Bureau of Lands surveyed the same in 1956 in the name of Eutiquio Pureza.
Godofredo Olviga protested the survey but without respect to a one-half-hectare portion is of public
record in the Bureau of Lands. In said document, Godofredo Olviga expressly admitted that the lot
belonged to Eutiquio Pureza, except the 1/2 hectare portion claimed by him which was included in the
survey of Pureza's Lot 13.

In 1960, Eutiquio Pureza filed a homestead application over Lot 13 and transferred his rights in
said lot to Cornelia Glor in 1961. Neither the homestead application of Eutiquio nor the proposed transfer
of his rights to Cornelio Glor was acted upon by the Director of Lands for reasons that the records of the
Bureau of Lands do not disclose.

In 1967, Jose Olviga obtained a registered title for said lot in a cadastral proceeding, in fraud of
the rights of Pureza and his transferee, Cornelio Glor and his family who were the real and actual
occupants of the land.

Court of Appeals found that the Glors failed to follow up Pureza's homestead application over Lot
13 in the cadastral proceedings in fact, they were not aware of the proceedings. Angelita Glor testified
that no notice was ever posted on Lot 13 about the proceedings nor did the barangay captain, tell her
about them. Neither did she receive any notice from the court sheriff or any court employee. This non-
posting of the hearing of the cadastral hearing on the land, or in the barangay hall, was confirmed by
petitioner Virgilio Olviga himself who testified that he did not notice any papers posted on the property
in question. On the other hand, petitioner's father Jose Olviga, claimed both Lots 12 and 13, which are
adjoining lots, in the same cadastral proceedings and later transferred Lot 13 to his son-in-law, Jaime
Olila and daughter, Lolita Olviga.

It was also established that the spouses Olila, were not innocent purchasers for value of the land
from their father, and have never been in the possession. The Glors and their predecessor-in-interest
were the ones found to be in possession of the property.

Issue(s): Whether or not plaintiffs' action is one for quieting of title that does not prescribe.

Held: Yes, plaintiffs’ action is really one for quieting of title that does not prescribe.

With regard to the issue of prescription, this Court ruled that an action for reconveyance of a
parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being
the date of registration of the deed of the date of the issuance of the certificate of title over the property.
But this rule applies only when the plaintiff is not in possession of the property, since if a person claiming
to be the owner thereof is in actual possession of the property, the right to seek reconveyance, which in
effect seeks to quiet title to the property, does not prescribe.

In the case at bar, private respondents and their predecessors-in-interest were in

actual possession of the property since 1950. Their undisturbed possession gave them the
continuing right to seek the aid of a court of equity to determine the nature of the adverse
claim of petitioners, who disturbed their possession.

The Court finds no reversible error in the decision of the Court of Appeals, the petition for review
is DENIED.
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*Pingol v Court of Appeals 225 SCRA 118

Facts: Petitioner Pingol executed a "DEED OF ABSOLUTE SALE OF ONE-HALF OF (1/2) [OF] AN
UNDIVIDED PORTION OF A PARCEL OF LAND" in favor of Francisco N. Donasco which was acknowledged
before a notary public.

Francisco immediately took possession of the subject lot and constructed a house thereon.
On 13 July 1984, Francisco Donasco died. At the time of his demise, he had paid P8,369.00, plus the
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P2,000.00 advance payment, leaving a balance of P10,161.00 on the contract price.

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The heirs of Francisco averred that after the death of their father, they offered to pay the balance
of P10,161.00 plus the stipulated legal rate of interest thereon to Vicente Pingol but the latter rebuffed
their offer and has "been demanding for a bigger and unreasonable amount, in complete variance to
what is lawfully due and payable."

Petitioner Pingol averred that plaintiffs' cause of action had already prescribed; the deed of sale
embodied a conditional contract of sale to be paid within 6 years starting January 1970 and considering
the breach by Francisco of his contractual obligation way back in 1976, the sale was deemed to have
been cancelled and the continuous occupancy of Francisco after 1976 and by his heirs thereafter was by
mere tolerance of Vicente Pingol.

Issue: WON Pingol may refuse to transfer the title to Donasco.

Held: No. The contract between Pingol and Donasco is a contract of sale and not a contract to
sell. The acts of the parties, contemporaneous and subsequent to the contract, clearly show that an
absolute deed of sale was intended, by the parties and not a contract to sell.

The vendor delivered actual and constructive possession of the property to the vendee, who
occupied and took such possession, constructed a building thereon, had the property surveyed and
subdivided and a plan of the property was prepared and submitted to the Land Registration Commission
which approved it preparatory to segregating the same and obtaining the corresponding TCT in his name.
Since the sale, appellee continuously possessed and occupied the property as owner up to his death on
July 13, 1984 and his heirs, after his death, continued the occupancy and possession of the property up
to the present. Those contemporaneous and subsequent events are demonstrative acts that the vendor
since the sale recognized the vendee as the absolute owner of the property sold. All those attributes of
ownership are admitted by defendants in their answer, specifically in paragraphs 7 and 9 of their special
and affirmative defenses.

The contract here being one of absolute sale, the ownership of the subject lot was transferred to
the buyer upon the actual and constructive delivery thereof. The constructive delivery of the subject lot
was made upon the execution of the deed of sale while the actual delivery was effected when the private
respondents took possession of and constructed a house.
The delivery of the object of the contract divested the vendor of the ownership over the same and he
cannot recover the title unless the contract is resolved or rescinded pursuant to Article 1592 of the New
Civil Code which provides that:

In the sale of immovable property, even though it may have been stipulated that upon failure to
pay the price at the time agreed upon the rescission of the contract shall of right take place, the vendee
may pay, even after the expiration of the period, as long as no demand for rescission of the contract has
been made upon him either judicially or by a notarial act.

Titong v Court of Appeals 287 SCRA 102

For one to file an action to quiet title to a parcel of land, the requisites in Art 476 of the
NCC must be complied with meaning there should be an instrument, record, claim,
encumbrance setting forth the cloud or doubt over the title. Otherwise, the action to be filed
can either be ejectment, forcible entry, unlawful detainer, accion reivindicatoria or accion
publiciana.

FACTS:
A 20,592 square meter parcel of land located at Barrio Titiong, Masbate is the subject property being
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disputed in this case. The property is being claimed by 2 contestants, however legal title over the
property can only be given to one of them.

The case originated from an action for quieting of title filed by petitioner Mario Titong. The RTC of Masbate
decided in favor of private respondents, Vicente Laurio and Angeles Laurio as the true and lawful owners
of the disputed land. The CA affirmed the decision of the RTC.

Titong asserts that he is the owner of an unregistered parcel of land with an area of 3.2800
hectares and declared for taxation purposes. He claims that on three separate occasions, private resps,
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with their hired laborers, forcibly entered a portion of the land containing an approximate area of 2
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hectares and began plowing the same under pretext of ownership. On the other hand, private resps
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denied the claim and said that the subject land formed part of the 5.5 hectare agricultural land which
they had purchased from their predecessor-in-interest, Pablo Espinosa.

Titong identified Espinosa as the his adjoining owner asserting that no controversy had sprouted
between them for 20 years until the latter sold lot 3749 to V. Laurio. The boundary between the land
sold to Espinosa and what remained of Titong’s property was the old Bugsayon river. When Titong
employed Lerit as his tenant, he instructed the latter to change the course of the old river and direct the
flow of water to the lowland at the southern portion of Titong’s property, thus converting the old river
into a Riceland.

Private resps, on the other hand, denied claim of Titong’s, saying that the area and boundaries
of disputed land remained unaltered during the series of conveyances prior to its coming into his hands.
Accdg to him, Titong first declared land for taxation purposes which showed that the land had an area
of 5.5 hectares and was bounded on the north by the B. River; on the east by property under ownership
by Zaragoza, and on the west by property owned by De la Cruz. He also alleges that Titong sold property
to Verano. The latter reacquired the property pursuant to mutual agreement to repurchase the same.
However, the property remained in Titong’s hands only for 4 days because he sold it to Espinosa. It then
became a part of the estate of Espinosa’s wife, late Segundina Espinosa. Later on, her heirs executed an
“Extrajudicial Settlement of Estate with Simultaneous Sale” whereby the 5.5 hectares was sold to Laurio
for 5,000 pesos. In all these conveyances, the area and boundaries of the property remained exactly the
same as those appearing in the name of Titong’s.

The court found out that 2 surveys were made of the property. First survey was made by Titong,
while the second was the relocation survey ordered by the lower court. Because of which, certain
discrepancies surfaced. Contrary to Titong’s allegation, he was actually claiming 5.9789 hectares, the
total areas of lot nos 3918, 3918-A and 3606. The lot 3479 pertaining to Espinosa’s was left with only
an area of 4.1841 hectares instead of the 5.5 hectares sold by Titong to him.

Apprised of the discrepancy, private resps filed a protest before Bureau of Lands against 1st
survey, and filing a case for alteration of boundaries before the MTC, proceedings of which were
suspended because of instant case.

Private resps. Avers that Titong is one of the four heirs of his mother, Leonida Zaragoza. In the
Extrajudicial Settlement with Sale of Estate of late Zaragoza, the heirs adjudicated unto themselves the
3.6 hectares property of the deceased. The property was bounded by the north by Verano, on the east
by Bernardo Titong, on the south by the Bugsayon River and on the west by Benigno Titong.
Instead of reflecting only .9000 hectares as his rightful share in the extrajud settlement, Titong’s share
bloated to 2.4 hectares. It then appeared to Laurio that Titong encroached upon his property and
declared it as part of his inheritance.

The boundaries were likewise altered so that it was bounded on the north by Verano, on the east
by B. Titong, on the south by Espinosa and on the west by Adolfo Titong. Laurio also denied that Titong
diverted course of the B. river after he had repurchased the land from Verano because land was
immediately sold to Espinosa thereafter.

ISSUE: Whether or not Titong is the rightful owner of the subject property

RULING: NO The remedy for quieting of title may be availed of under the circumstances
mentioned in Art 476 of the NCC wherein it says that action to quiet title may be made as a
remedial or preventive measure. Under 476, a claimant must show that there is an instrument,
record, claim, encumbrance or proceeding which casts a cloud, doubt, question or shadow upon owner’s
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title to or interest in real property. The ground for filing a complaint for quieting title must be “instrument,
record, claim, encumbrance or proceeding.”

In the case at bar, Titong failed to allege that there was an instrument, claim etc be clouded over
his property. Through his allegations, what Titong imagined as clouds cast on his title were Laurio’s
alleged acts of physical intrusion into his purported property. The grounds mentioned are for action for
forcible entry and not quieting title.

In addition, the case was considered to be a boundary dispute. The RTC and CA correctly held
8

that when Titong sold the 5.5 hectare land to Espinosa, his rights and possession ceased and were
Page

transferred to Laurio upon its sale to the latter.

 PROPERTY

Thus, it is now a contract of sale wherein it is a contract transferring dominion and other real
rights in the thing sold. Titong also cannot rely on the claim of prescription as ordinary acquisitive
prescription requires possession in good faith and with just title for the time fixed by law.

*Sps. Portic v Cristobal 496 Phil 456

FACTS: In 1968, spouses Ricardo and Ferma Portic acquired a parcel of land with a 3 door apartment
from spouses Alcantara even though they’re aware that the land was mortgaged to the SSS. Portic
defaulted in paying SSS. The Portics then executed a contract with Anastacia Cristobal and the latter
agreed to buy the said property for P200k. Cristobal’s down payment was P45k and she also agreed to
pay SSS. The contract between them states:

That while the balance of P155,000.00 has not yet been fully paid the FIRST PARTY OWNERS shall
retain the ownership of the above described parcel of land together with its improvements but the
SECOND PARTY BUYER shall have the right to collect the monthly rentals due on the first door (13-A) of
the said apartment; (payment is due 22 May 1985, if Cristobal will not be able to pay Portic will
reimburse)

A transfer certificate was executed in favor of Cristobal. Cristobal was not able to pay on the due
date. A suit ensued to lift the cloud on the title.

ISSUE: Who is the rightful owner of the parcel of land?

HELD: The Portics insofar as there was no contract of sale. What transpired between the parties was a
contract to sell. The provision of the contract characterizes the agreement between the parties as a
contract to sell, not a contract of sale. Ownership is retained by the vendors, the Portics; it will not be
passed to the vendee, the Cristobals, until the full payment of the purchase price. Such payment is a
positive suspensive condition, and failure to comply with it is not a breach of obligation; it is merely an
event that prevents the effectivity of the obligation of the vendor to convey the title. In short, until the
full price is paid, the vendor retains ownership.

The mere issuance of the Certificate of Title in favor of Cristobal did not vest ownership in
her. Neither did it validate the alleged absolute purchase of the lot. Registration does not vest, but
merely serves as evidence of, title. Our land registration laws do not give the holders any better title
than that which they actually have prior to registration.

Under Article 1544 of the Civil Code, mere registration is not enough to acquire a new title. Good
faith must concur. Clearly, Cristobal has not yet fully paid the purchase price. Hence, as long as it
remains unpaid, she cannot feign good faith. She is also precluded from asserting ownership against
the Portics. The CA’s finding that she had a valid title to the property must be set aside.

RECOVERY OF POSSESSION

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.

RECONVEYANCE
The transfer of real property that takes place when a mortgage is fully paid off and the land is
returned to the owner free from the former debt.
2-Executive DVOREF

REPLEVIN
An action to recover personal property said or claimed to be unlawfully taken.

DAMAGES
An award, typically of money, to be paid to a person as compensation for loss or injury.
9
Page
 PROPERTY
Bishop of Cebu v Mangaron 6 Phil 286

Facts : Mariano Mangaron’s parents and brothers had been in possession of a tract of land in the district
of Ermita until about the year 1877 (possession of at least 20 years).

In 1878, they vacated the land by virtue of an order from the municipality which declared that
the land was included within the zone of materiales Fuertes (fire zone) and the houses in which they
lived upon were of light materials. They vacated said land without objection.

After the land was vacated, Parish Priests of Ermita Church fenced the land and cleaned the same
without any objection on the part of anyone.

In 1898, Mangarons entered upon the land in question and built thereon a nipa house and
continued to live thereon without the consent of the parish priests of Ermita Church or the Bishop of
Cebu. Roman Catholic Church, represented by the bishop of Cebu filed an action to recover possession
of said land; amended complaint for said land to be declared property of the Catholic Church and that it
be restored to the latter. Property had belonged to the Catholic Church from time immemorial.

Mangarons occupied apart thereof by the mere tolerance of the Catholic Church. Mangaron claims
to be the owner of the land by inheritance. He was the legal owner when he was unlawfully ejected by
the bishop of Cebu in 1879. He had a right re-enter; time for prescription has not yet expired since he
was ejected.

The trial court ruled in favor of Bishop of Cebu and ordered Mangarons to vacate the land.
Occupation of the land by Mangaron in the year 1898 was illegal. If he thought he had a right to the
land, he should have filed an action with the court to recover possession and not proceed to occupy the
property. If the Church acceded and voluntarily returned possession and acknowledge that the property
belonged to him, there would be no necessity to file an action; but in this case, Church has objected to
the occupation which necessitates a filing of a proper action. The possession held by Mangaron in 1898
cannot be added to the former possession which was interrupted in 1877 by the order of the municipality.

Article 466 civil code: “a person who recovers possession according to law, which is improperly
lost, is considered as having enjoyed it without interruption for all the purposes which may redound to
his benefit”. It cannot be ascertained that the possession enjoyed by Mangaron was improperly lost. It
has been lost by virtue of an order from the municipality and no proof to the contrary was presented.

Impossible to say what was the nature prior to the year 1877 – whether it was held by right or
by the mere tolerance of the Church. Mangaron filed petition. SC resolved a relevant question of law in
deciding whether to affirm the decision of the trial court -> availability of accion publiciana.

Issue: Whether after the promulgation of the civil code, accion publiciana, which had for its
object the recovery of possession in a plenary action before an action for the recovery of title
could be instituted, still existed . ( YES )

Ratio:
 Available actions:
o Accion interdictal – recovery of physical possession within one year from the time of
dispossession.
o Accion publiciana – better right to such possession brought after lapse of one year.
2-Executive DVOREF

o Recovery of ownership – action for title

 If Mangaron instituted the action interdictal within one year from dispossession, he would have
been restored to the possession.
o One year period has already elapsed so such summary action for possession could not be
maintained.
 But even after the lapse of one year, he still could have brought an accion publiciana  involve
the right to possess; based upon the fact that he, having been in possession for 20 years, could
not lose the same until he had been given opportunity to be heard and had been defeated in an
action in court by another with a better right.
10

 Doubt arises whether accion publiciana is still available from Article 460 of Civil Code
o Possessor may lose possession:
Page

1. Abandonment
 PROPERTY
2. Transfer to another for a good or valuable consideration
3. Destruction or total loss of the thing or by the thing becoming unmarketable
4. By the possession of another, even against the will of the former possessor, if the
new possession has lasted more than one year.
o Questions: Which is lost, possession de facto or also possession de jure? In the first three,
both may be lost, so it would strange if the fourth merely referred to possession de jure.
However, ownership cannot be lost under the fourth; owner may recover ownership, and
is only barred by statute of limitations.
 Evidence that accion publiciana still exists:
o Possession constitutes a right, a right in rem, whenever it is exercised over real property
or property rights
o Where there is a right, there is cause of action
o It is sufficient that the right existing, there should be an action to protect it. No necessity
of any special declaration in civil code
o It is impossible to conceive that a person has a right which need not be respected by
others, and such respect cannot be exacted unless the law provides a remedy for its
enforcement
o If a person has a right over any kind of property, such right would not be complete unless
it could be enforced as against the whole world.
o The action is a recognition of the right; it is a weapon for its protection
o The right does not arise from the action; but vice versa
o Accion publiciana exists, nor for the sake of equity, but because it must necessarily exist
or can exist as provided in Article 445.
 Action brought by Catholic Church to recover the possession which was unlawfully deprived by
the defendant can be properly maintained.

Chacon v Court of Appeals 124 SCRA 784

FACTS
1. 1932 Ramon Chacon was granted a fishpond Lease agreement over a 15 ha mangrove swamp
which he developed into a fishpond in barrio lagusan Cagayan oriental misamis.

2. 1957: after his death his heirs entered into a partnership agreement, under the name Chacon
Enterprises, for the purpose of acquiring title over the fishpond. Aside from the 15 ha. This
agreement also included the adjoining eastern portion with an area of about 4 ha., In their
sales application, they alleged that the area applied for had no indication of settlement,
occupation or improvement, except the dikes and concrete gates they owned.

3. 1968: Chacon filed an ejectment suit against the Galasino group(respondents) who were then
in actual possession of the eastern portion of the land. The trial court dismissed this action
because the respondents houses constructed in the premises show that they were staying and
living there for more than a year already.

4. 1969: Chacon Enterprises filed a civil case to recover the eastern portion alleging that the
respondents occupied the land without their consent and that they refused to vacate despite
repeated demands.

Galasino group assert absolute ownership- 1 they inherited the land from Santiago Ebora,
their deceased predecessor-in-interest,who had been in continuous, public and exclusive possession as
the owner since time immemorial; 2 they continuously,openly and exclusively possessed the land as
2-Executive DVOREF

owners since eboras death; 3 They have planted coconuts thereon, which now bear fruit and;4 that
Chacons certificate is null and void

 Respondents also filed a civil case against Chacon for annulment of said certificate of title and
reconveyance of the land outside the circumferential dike of the fishpond.

5. CFI dismissed Galasino groups complaint and ordered them to vacate the land to surrender
possession to Chacon Enterprises.
6. 1976: Upon appeal, the CA reversed the decision of CFI, holding that the certificate of title in
11

the name of chacon enterprises was null and void insofar as it covered the portion in litigation.
Chacon filed for MR on the grounds that the action filed by Galasino group was barred by
Page

prescription. CA denied this motion holding that the action by Galasino group, albeit
 PROPERTY
denominated as one for reconveyance , is in essence an action to quiet title, which is
imprescriptible.Hence the petition.

ISSUE Whether the action by the Galasino group has already prescribed? - NO

HELD
1. Although Galasino group’s complaint in the civil case was captioned or denominated for
“Annulment of Titleand/or Reconveyance”, the averments of lawful ownership and actual
possession constitute a cause of action for quieting of title or removal of a cloud over such
title.
2. The court had held that the actions to quiet title to property are Imprescriptible. There is
a settled jurisprudence that one who is in actual possession of a piece of land claiming to
be the owner thereof may wait until his possession is disturbed or his titleis attacked before
taking steps to vindicate his right, the reason for the rule being that his undisturbed
possession gives him a continuing right to seek the aid of a court of equity to ascertain
and determine the nature of the adverse claim of a third party and its effect on his own
title, which right can be claimed only by one who is in possession.

German Management v Court of Appeals 177 SCRA 495

FACTS: In February 1982, the spouses Manuel and Cynthia Jose contracted with German Management
and Services, Inc. for the latter to develop their landholdings into a residential subdivision. The spouses
also executed a special power of attorney to that effect.

German Management started the project in February 1983, however, German Management
discovered that the land was being possessed by Ernest0 Villeza et al who were the farmers tilling the
said land at that time. German Management spoke with Villeza et al but the farmers refused to vacate
the land as the farmers claimed that they have been occupying the land for twelve years.

Nevertheless, German Management went on to develop the property and demolished the
properties of the farmers without acquiring a court order. In turn, Villeza et al filed a case of forcible
entry against German Management. In its defense, German Management invoked the Doctrine of Self-
help which provides that:

The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment
and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel
or prevent an actual or threatened unlawful physical invasion or usurpation of his property. (Article 429,
Civil Code)

ISSUE: Whether or not the doctrine of self-help is applicable in this case.

HELD: No. The Doctrine of Self-help is not applicable because at the time when German
Management excluded the farmers, there’s no longer an actual or threatened unlawful
physical invasion or usurpation. That actual or threatened unlawful physical invasion by the farmers
have already lapsed 12 years ago when they began occupying the said land. In fact, they were already
peaceably farming the land.

What should have been the remedy by German Management?

obinson
2-Executive DVOREF

But the farmers are not the real owners and in fact, the spouses Jose have a lawful title over the land?
Regardless of the actual condition of the title to the property, the party in peaceable quiet
possession shall not be turned out by a strong hand, violence or terror. Further, there is now a
presumption of ownership in favor of the farmers since they are the ones occupying the said property.
They can only be ejected either by accion publiciana or accion reivindicatoria through which the spouses
Jose’s better right may be proven.
12
Page
 PROPERTY
*De La Paz v Panis 245 SCRA 242

Facts: The case is a petition for certiorari and mandamus for recovery of possession initially filed by
petitioners in the Court of First Instance of Zamabales against private respondents.

It involves a dispute over a 7.5sq m of land claimed by petitioner as owners over the strength of
TCT-14807 and private respondents as actual possessors. The latter entered in and established
possession over portions of the property for more than 10 years in the honest belief that it was part of
the public domain.

Private respondents did not deny petitioner’s claim over the property. The parties then limited
the questions to be resolved to the following: (a) identify the extent of land claimed by petitioners, (b)
whether or not area occupied by respondents are within the limits of claimed land, (c) whether or not
parties are entitled to damages.

Private respondent filed a petition for certiorari and prohibition with preliminary injunction in this
Court as respondent judge disregarded the aforementioned questions during trial. The Court then
resolved that the only issue between parties is whether or not the land occupied by private respondents
is included in the TCT and thereafter approved a compromised agreement to conduct a relocation survey,
the result of which the respondent judge and private respondents should comply.

Geodetic Engineer report confirmed that private respondents were occupying portions of the titled
land.

However, respondent judge dismissed the complaint and counterclaims of the both parties
claiming that while complaint was a recovery of possession, it was in reality one for ejectment or illegal
detainer.

Petitioners then filed this case praying for the nullification of the decision and compelling
respondent judge to issue a writ execution enforcing the compromised agreement.

ISSUES:
1. WON the case is that of a plenary action for recovery of possession.
2. WON respondent judge has jurisdiction over the case.

HELD: Respondent judge dismissed the action on the assumption that it is one for ejectment
cognizable by the MTC. Such supposition is erroneous.

Ejectment may be effected only through an action for forcible entry or unlawful detainer. Forcible
entry is a summary action to recover material or physical possession of real property when the person
who originally held it was deprived of possession by force, intimidation, threat, strategy, or stealth. An
action for unlawful detainer may be filed when possession by "a landlord, vendor, vendee, or other
person against whom the possession of any land or building is unlawfully withheld after the expiration
or termination of the right to hold possession, by virtue of any contract. Both actions may be filed with
the municipal courts within one year after the unlawful deprivation or withholding of possession.

Forcible entry was ruled out as there is no allegation in the complaint that petitioners were denied
possession of the land in question through any of the methods stated. Neither is the action one for
unlawful detainer as there is no lease contract between the parties, and the demand to vacate made
upon the private respondents did not make them tenants of the petitioners.
2-Executive DVOREF

In order to gain possession of the land occupied by the private respondents, the proper remedy
adopted by the petitioners was the plenary action of recovery of possession before the then Court of
First Instance. Respondent judge, therefore, had jurisdiction over the case and should not have dismissed
it on the ground of lack thereof.

Respondent judge should have stuck to the aforesaid three issues defined by the parties during
pre-trial and considered the result of the land survey.
13

In addition, private respondents likewise argue in their comment and memorandum that since
the petitioners "had not yet entered the land in question (at the time of filing of the complaint), they had
Page

not lost any possession, and the civil case they filed for recovery of possession was wrong as no
 PROPERTY
possession had been lost by them." This argument is untenable. It amounts to recognition by the private
respondents of petitioners' right to possess the land in question and confirms the absence of any past or
present tenancy relationship between the parties.

The three kinds of actions for the recovery of possession of real property are:

1. Accion interdictal, or an ejectment proceeding which may be either that for forcible
entry (detentacion) or unlawful detainer (desahucio), which is a summary action for recovery
of physical possession where the dispossession has not lasted for more than one year, and
should be brought in the proper inferior court;

2. Accion publiciana or the plenary action for the recovery of the real right of possession,
which should be brought in the proper Regional Trial Court when the dispossession has lasted
for more than one year; and

3. Accion reinvindicatoria or accion de reivindicacion, which is an action for the recovery of

ownership which must be brought in the proper Regional Trial Court.

*Vda. de Aviles v Court of Appeals 177 SCRA 495

An action to quiet title or to remove cloud may not be brought for the purpose of settling
a boundary dispute.

FACTS: Eduardo Aviles, the predecessor of the petitioners is the brother of defendant Camilo. They
inherited their lands from their parents and have agreed to subdivide the same amongst themselves.
The area allotted (sic) to Eduardo Aviles is 16,111 square meters more or less, to Anastacio Aviles is
16,214 square meters more or less, while the area allotted to defendant Camilo Aviles is 14,470 square
meters more or less.

Defendant’s land composed of the riceland portion of his land is 13,290 square meters, the
fishpond portion is 500 square meters and the residential portion is 680 square meters, or a total of
14,470 square meters.

The Petitioners claim that they are the owners of the fish pond which they claim is within their
area. Defendant Camilo Aviles asserted a color of title over the northern portion of the property with an
area of approximately 1,200 square meters by constructing a bamboo fence (thereon) and moving the
earthen dikes, thereby molesting and disturbing the peaceful possession of the plaintiffs over said
portion.

Petitioners say that the fences were created to unduly encroach to their property but the
defendant said that he merely reconstructed the same.

Petitioners brought an action to quiet title but were denied thus this case.

ISSUE: Whether or not Petitioners filed the right action

RULING: No, Petitioners filed the wrong action. This is obviously a boundary dispute and as
such the action must fail.

Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of
2-Executive DVOREF

any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is,
in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title,
an action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon a title to real property or any
interest therein.

Petitioners fail to point out any any instrument, record, claim, encumbrance or proceeding that
could been a “cloud” to their title. In fact, both plaintiffs and defendant admitted the existence of the
agreement of partition dated June 8, 1957 and in accordance therewith, a fixed area was allotted to
14

them and that the only controversy is whether these lands were properly measured.
Page

A special civil action for quieting of title is not the proper remedy for settling a boundary dispute,
 PROPERTY
and that petitioners should have instituted an ejectment suit instead. An action for forcible entry,
whenever warranted by the period prescribed in Rule 70, or for recovery of possession de facto, also
within the prescribed period, may be availed of by the petitioners, in which proceeding the boundary
dispute may be fully threshed out.

*Baricuatro v Court of Appeals, 325 SCRA J37

TOPIC: Quieting of title, Buyer protection under NCC 1544 assumes that the buyer is in good
faith from the acquisition of the title to the registration of the same.

FACTS: On October 16, 1968, Severino Baricuatro, Jr. (petitioner) bought two lots on an installment
basis from Constantino M. Galeos. The lots were sold on an installment basis. At the time the original
action for quieting of title was filed in the trial court, petitioner had an unpaid balance. The titles to the
said lots remained in the name of Galeos as the contract of sale expressly provided that "the parties both
agree that a final deed of sale shall be executed, in favor of the buyer upon full and complete payment
of the total purchase price agreed upon."

After the "sale", petitioner introduced certain improvements on the said lots and started to reside
therein in 1970.

December 7, 1968, about two (2) months from the date of the previous sale to petitioner,
respondent Galeos sold the entire subdivision, including the two lots, to his co-respondent Eugenio
Amores. Subsequently, petitioner was informed by respondent Galeos about the sale to respondent
Amores and was advised to pay the balance of the purchase price of the two lots directly to respondent
Amores.

After the sale of the entire subdivision to respondent Amores, he allegedly took possession thereof
and developed the same for residential purposes. Respondent Amores registered the deed of sale
covering the entire subdivision on February 13, 1969, secured the transfer of the title to the same in his
name, subdivided the entire land, and acquired individual titles to the subdivided lots in his name,
including the title of the two (2) lots.

On December 27, 1974, respondent Amores sold the two (2) lots to the spouses Mariano and
Felisa Nemenio, two of the respondents herein. Prior to the sale, however, petitioner was informed
through a letter by respondent Amores about the impending sale of the two (2) lots but the former failed
to respond. The respondent spouses Nemenio caused the transfer of the titles to the said lots and the
issuance of tax declarations in their names. Thereafter, the respondent spouses Nemenio demanded
from petitioner to vacate the said lots but the latter refused to do so.

Thus, a complaint for quieting of title was filed by the respondent spouses Nemenio against
petitioner in the Regional Trial Court of Cebu, Branch V, docketed as Civil Case No. R-15442.

RTC'S ruling was in favor of respondent Nemenio. Petitioner was ordered to desist from further
asserting his supposed rights to the lots in question. Respondent Galeos was ordered to pay or refund
petitioner Baricuatro the amount of money plus interest he has paid as installment for the lots he
purchased.

CA affirmed RTC's judgment. Furthermore, CA said that the fact that Amores subsequently tried
to collect the balance of the purchase price from petitioner as shown by a letter dated after the sale of
2-Executive DVOREF

the entire subdivision to him is not proof that he was aware of the previous transaction between petitioner
and Galeos and declared that Galeos' title to the lots was clean and unencumbered at the time it was
sold to Amores. Thus, Amores cannot be considered a buyer in bad faith.

ISSUE/S:
1. Is Respondent Amores protected by A1544 of the New Civil Code?
2. Are spouses Nemenio entitled to the protection of indefeasibility of a Torrens title?

RULING:
15

1. No. The SC said that a careful and thorough scrutiny of the records of the case reveals that
respondent Amores did not act in good faith when he registered his title to the disputed lots
Page

on February 13, 1969. Assuming that respondent Amores was in good faith when he bought the
 PROPERTY
disputed lots on December 7, 1968, however, when he registered his title on February 13, 1969, the
preponderance of evidence supports the finding that he already had knowledge of the previous sale of
the disputed lots to petitioner. Such knowledge tainted his registration with bad faith. To merit protection
under article 1544, the second buyer must act in good faith from the time of the sale until the registration
of the same.

2. No. The SC deduced that having visited petitioners’ residence in early 1975, respondent
spouses Nemenio cannot claim to be purchasers in good faith when they registered their title
to the disputed lots on August 30, 1976. The registration by the respondent spouses Nemenio was
done in bad faith; hence, it amounted to no "inscription" at all. The SC held in the case of Philippine
Stock Exchange, Inc. vs. Court of Appeals that "the inscription in the registry, to be effective, must be
made in good faith. The defense of indefeasibility of a Torrens Title does not extend to a transferee who
takes the certificate of title with notice of a flaw."A holder in bad faith of a certificate of title is not entitled
to the protection of the law, for the law cannot be used as a shield for frauds."

*BA Finance v Court of Appeals, 327 SCRA 716

Facts: Augusto Yulo, respondent, secured a loan from the petitioner, BA Finance Corp., as evidenced by
his signature on a promissory note in behalf of the A & L Industries. About two months prior to the loan,
however, Augusto Yulo had already left Lily Yulo and their children and had abandoned their conjugal
home. When the obligation became due and demandable, Augusto Yulo failed to pay the same.

Petitioner filed its amended complaint against the spouses on the basis of the promissory note.
They also prayed for the issuance of a writ of attachment that the said spouses were guilty of fraud in
contracting the debt. The trial court issued the writ of attachment thereby enabling the petitioner to
attach the properties of A & L Industries. Private respondent Lily Yulo filed her answer with counterclaim,
alleging that Augusto had already abandoned her and their children five months before the filing of the
complaint and that they were already separated when the promissory note was executed. She also
alleged that her signature was forged in the special power of attorney procured by Augusto.

Petitioner contends that even if the signature was forged or even if the attached properties were
her exclusive property, the same can be made answerable to the obligation because the said properties
form part of the conjugal partnership of the spouses Yulo.

Issue: Whether or not the exclusive property of private respondent forms part of the conjugal
partnership of the spouses and be made answerable to the obligation.

Ruling: SC ordered the release of the attachment of the said property. Though it is presumed that the
single proprietorship established during the marriage is conjugal and even if it is registered in the name
of only one of the spouses. However, for the said property to be held liable, the obligation contracted by
the husband must have redounded to the benefit of the conjugal partnership.

In the case at bar, the obligation which the petitioner is seeking to enforce against the conjugal
property managed by the private respondent was undoubtedly contracted by Augusto Yulo for his own
benefit because at the time he incurred the obligation he had already abandoned his family and had left
their conjugal home. Thus, the Court ruled that petitioner cannot enforce the obligation contracted by
Augusto against his conjugal properties with Lily. Furthermore, the writ of attachment cannot be issued
against the said properties and that the petitioner is ordered to pay Lily actual damages amouting to
P660,000.00.
2-Executive DVOREF

*PEZA v Fernandez 358 SCRA 489

FACTS: Lot 4673 was registered in the names of Florentina Rapaya, Victorino Cuizon among others
covered by an OCT. Sometime thereafter, Jorgea Igot-Soro ño et al executed an Extra-judicial Partition
claiming to be the only surviving heirs of the registered owners, through which they were issued a TCT.

Said lot was among the object of an expropriation proceeding before the RTC. Said RTC approved
the compromise Agreement b/w the Export Processing Zone Authority (EPZA) and Igot-Soroño et al
wherein EPZA would pay a certain amount in exchange for the subject property.
16

EPZA acquired title to said land by virtue of the RTC decision and was issued a corresponding
Page
 PROPERTY
TCT.

The Heirs of the Florentina Rapaya and Juan Cuizon filed a complaint to nullify several documents
including the TCT issued to EPZA for they were excluded from the extrajudicial settlement of the estate.
EPZA filed a motion to dismiss on the ground of prescription and was denied thus elevated the case to
the CA wherein the CA ruled that the heirs of Igot-Soroño defrauded the other heirs by falsely
representing that they were the only heirs enabling them to appropriate the land in favor of EPZA. This
method of acquiring property created a constructive trust in favor of the defrauded party and grants
them the right to vindicate regardless of the lapse of time. Thus, the case at bar.

ISSUE/S:
1) Whether or not private respondent’s claim over the expropriated land has prescribed
2) Whether or not reconveyance lies against expropriated property

HELD: 1) YES. As provided in the Rules of Court, persons unduly deprived of their lawful
participation in a settlement may assert their claim only w/in the 2-year period after the
settlement and distribution of the estate. However, this prescriptive period will not apply to
those who had not been notified of the settlement.

The Private respondents are deemed to have been notified of the extrajudicial settlement since it
was registered and annotated on the certificate of title over the lot.

The only exception to this rule is when the title still remains in the hands of the heirs
who have fraudulently caused the partition of the said property. In the case at bar, the title has
already passed to an innocent purchaser for value, the gov’t through EPZA.

Their remedies of action for reconveyance resulting from fraud, and action for reconveyance
based on an implied constructive trust has already prescribed as well the former having prescribed 4
years from the discovery and the latter prescribing 10 years from the alleged fraudulent registration.

2) NO. Reconveyance is a remedy for those whose property has been wrongfully or
erroneously registered in another’s name. However, this cannot be availed once the property
has passed to an innocent purchaser for value. Since the property has already passed to the
gov’t in an expropriation proceeding, EPZA is entitled to enjoy the security afforded innocent
3rd persons and their title to the property must be preserved.

However, the private respondents are not w/o remedy. They can sue for damages their co-
heirs

WEEK 5
RIGHT TO ACCESSION

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

Whenever the word "muebles," or "furniture," is used alone, it shall not be deemed to include
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money, credits, commercial securities, stocks and bonds, jewelry, scientific or artistic collections, books,
medals, arms, clothing, horses or carriages and their accessories, grains, liquids and merchandise, or
other things which do not have as their principal object the furnishing or ornamenting of a building,
except where from the context of the law, or the individual declaration, the contrary clearly appears.

IMMOVEABLE PROPERTY
DISCRETA
17

Art. 440. The ownership of property gives the right by accession to everything which is produced
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thereby, or which is incorporated or attached thereto, either naturally or artificially.

 PROPERTY
Art. 441. To the owner belongs:
(1) The natural fruits;
(2) The industrial fruits;
(3) The civil fruits.

NATURAL

Art. 442. Natural fruits are the spontaneous products of the soil, and the young and other products of
animals. Industrial fruits are those produced by lands of any kind through cultivation or labor. Civil fruits
are the rents of buildings, the price of leases of lands and other property and the amount of perpetual
or life annuities or other similar income.
Art. 443. He who receives the fruits has the obligation to pay the expenses made by a third person in
their production, gathering, and preservation.
Art. 444. Only such as are manifest or born are considered as natural or industrial fruits. With respect
to animals, it is sufficient that they are in the womb of the mother, although unborn.

INDUSTRIAL

Art. 442. Natural fruits are the spontaneous products of the soil, and the young and other products of
animals. Industrial fruits are those produced by lands of any kind through cultivation or labor. Civil fruits
are the rents of buildings, the price of leases of lands and other property and the amount of perpetual
or life annuities or other similar income.

CIVIL

Art. 442. Natural fruits are the spontaneous products of the soil, and the young and other products of
animals. Industrial fruits are those produced by lands of any kind through cultivation or labor. Civil fruits
are the rents of buildings, the price of leases of lands and other property and the amount of perpetual
or life annuities or other similar income.

CONTINUA

NATURALLY INCORPORATED

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.
Art. 446. All works, sowing, and planting are presumed made by the owner and at his expense, unless
the contrary is proved.
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. 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
2-Executive DVOREF

indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.
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.
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.
Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the
18

builder, planter or sower.

Art. 452. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary
Page

expenses of preservation of the land.

 PROPERTY
Art. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the
land of another, but also on the part of the owner of such land, the rights of one and the other shall be
the same as though both had acted in good faith. It is understood that there is bad faith on the part of
the landowner whenever the act was done with his knowledge and without opposition on his part.
Art. 454. When the landowner acted in bad faith and the builder, planter or sower proceeded in good
faith, the provisions of article 447 shall apply.
Art. 455. If the materials, plants or seeds belong to a third person who has not acted in bad faith, the
owner of the land shall answer subsidiarily for their value and only in the event that the one who made
use of them has no property with which to pay. This provision shall not apply if the owner makes use of
the right granted by article 450. If the owner of the materials, plants or seeds has been paid by the
builder, planter or sower, the latter may demand from the landowner the value of the materials and
labor.
Art. 456. In the cases regulated in the preceding articles, good faith does not necessarily exclude
negligence, which gives right to damages under article 2176.

Zapata v. Director of Lands, 6 SCRA 335

Property; Accretion due to the effect of water current; Right of riparian owner not necessarily affected
by the erection of fish traps in the creek.—Where the accreted land had been formed gradually due to
the effect of the water current of the creek, the riparian owner may invoke the benefit of the provisions
of article 457 of the Civil Code to support his claim of title thereto. The fact that the fish traps set up in
the creek might have slowed down its current, and might have brought about or caused the accretion,
will not affect his ownership, in the absence of evidence, to show that the setting up or erection of the
fish traps was expressly intended to cause or bring about the accretion.

FACTS: It appears that Juliana Zapata owns two parcels of land situated in the municipality of
Santo Tomas, province of Pampanga, adjoining a non-navigable and non-floatable river called the
Candalaga Creek. The two parcels are designated as Lot No. 25 and the northern part of Lot No. 16 of
the Cadastral Survey of San Fernando, Pampanga.1 The first lot contains a superficial area of 6,592
square meters and is registered in her name, as shown by transfer certificate of title No. 12907 issued
by the Register of Deeds in and for the province of Pampanga (Exhibit A). Her ownership or title to a
part of Lot No. 16 was confirmed by a decree entered on 21 November 1955 by the Court of First Instance
of Pampanga ordering that the “remaining portion of Lot No. 16 with an area of 474 square meters” be
registered “in the name of Juliana Zapata” [(Exhibit A-1]; Cad. case No. 1, G.L. R.O. Cad. Record No.
137).

In 1915, when the cadastral survey of San Fernando was begun, the width of the Candalaga
Creek adjoining the two parcels of land owned by Juliana Zapata was about 90 or to 100 meters. At
present, the width is 15 meters, because soil had been accumulated by the water current of the river on
the banks of Lot No. 25 and of that part of Lot No. 16 owned by Juliana Zapata. The accreted land is
delimited in plan Psu-140515 and designated as Lots 1, 2 and 3, the first containing an area of 6,260
square meters, the second, 449 and the third, 2,238 (Exhibit B) and described in the technical
descriptions (Exhibit C).

In a verified petition filed on 16 June 1956 in the Court of First Instance of Pampanga, Juliana
Zapata claims that the aforesaid three lots belong to her by accretion, as provided for in article 457 of
the Civil Code, and prays that the same be registered in her name under the Land Registration Act (Land
Reg. Case No. N-273, L. R. C. rec. No. 1167). On 19 October 1956 on her motion the court entered an
order of general default against all persons except the Director of Lands. On 24 October 1956 the Director
of Lands objected to the petition and prayed that the registration of the three lots in the name of Juliana
2-Executive DVOREF

Zapata be denied and that they be declared to form part of the public domain.

The appellant contends that article 457 of the Civil Code providing that—

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.
cannot apply and does not support the appellee’s claim that the accretion or deposit of alluvial
soil, which is delimited in plan Psu-140515 and designated as Lots 1, 2 and 3, belongs to her as riparian
owner, because such accretion “was not due to the natural effect of the current but was artificially
19

induced on account of the erection of the fish traps on the creek.”

Page

ISSUE: WON the appellant’s (Director of Lands) contention is correct?

 PROPERTY

HELD: The contention is incorrect. The appellant does not dispute that the accreted land had been
formed gradually due to the effect of the water current of the Candalaga Creek, but claims that the
accretion was artificially brought about by the setting up of fish traps, such as salag net, bunuan, sabat
and fencing that the fishermen had built in the stream.

True, those fish traps might have slowed down the current of the Candalaga Creek and
might have brought about or caused the accretion, but as there is no evidence to show that
the setting up or erection of the fish traps was expressly intended or designed to cause or
bring about the accretion, the appellee may still invoke the benefit of the provisions of Article
457 of the Civil Code to support her claim of title thereto. Moreover, the fishermen who since 1894
used to set up fish traps in the creek (p. 7, t.s.n.), later on secured permit from the Government that
auctioned off the right or license to set up fish traps in the creek (p. 6, t.s.n.), and the setting up of such
fish traps stopped or was discontinued even before 1926 (p. 7, t.s.n.), all go to show that the alluvial
accretion was not entirely due to the setting up of such fish traps.

Cortes v. Court of Appeals, 10 Phil 567

REALTY; ACCRETION.—If estates bordering on rivers are exposed to floods and other evils produced by
the destructive force of the waters and if by virtue of lawful provisions said estates are subject to
encumbrances and various kinds of easements, it is proper that the risk or danger which may prejudice
the owners thereof should be compensated by the right of accretion acknowledged by article 84 of the
Law of Waters of the 3d of August, 1866, extended to the Philippines by the royal decree of April 8,
1873, and by article 366 of the Civil Code.

ACTS OF POSSESSION.—Acts of possession exercised by the owner over his estate or land bordering on
the banks of rivers are always understood legally to cover that portion added thereto by accretion, by
the effect of the current of the waters.

FACTS: On the 26th of September, 1906, Maximo Cortes filed a written application for the registration
of a parcel of land owned by him, free of all incumbrances, situated in Calle Aguilar, corner of Calle
Cecilia in the District of Binondo, this city, together with the buildings erected thereon, which land has
an area of 1,172.21 square meters, its boundaries being stated in the application. The land was acquired
by the applicant by purchase from Higinio Francisco y Prospero, according to a deed of sale dated July
3, 1894, recorded in the registry of property, no other person having any title to or interest therein, and
the property was assessed, for the purpose of taxation of the last fiscal year, at 1,444, United States
currency. The buildings erected thereon were paid for by the applicant with his own money, and the
application is accompanied by the deed of sale, plan, and technical description of the land.

The attorney of Manila objected and reproduced the verbal opposition offered in ithe case, alleging
that both the plan and the technical description exhibited contained errors; that there was an excess in
measurement which affects the interests of the city wherein 33.40 meters of the Meisic Creek would
become the property of Maximo Cortes, as a matter of fact the said creek is one of the public use and
belongs to the city of Manila.

ISSUE: WON Maximo has right over the disputed part than the city of Manila

HELD: YES. Maximo has rights over the disputed creek since it has already been registered in
the registry of property, is unquestionable and has been fully proven. It had been satisfactorily
shown that the portion of land included in the technical description presented by the applicant, situated
2-Executive DVOREF

between the lot to which said instrument refers and the lot to which said instrument refers to the bed of
the Meisic Creek, has gradually formed by alluvion, as a result of the current in the said stream, it cannot
be denied that the portion of land belongs to by right of accretion to the owner of the land referred to
in the instrument of the 3rd of July, 1894.

There is no evidence whatever to prove that the addition to the said property was made artificially
by the owner; therefore, the facts alleged and proven in the proceedings must stand. The increase or
accretion which in a latent, incessant, and spontaneous manner is received by the land from the effects
of "the current depositing, in the course of time, sediment and alluvial matter aLong the shore, is
20

undeniably the work of nature and lawfully belongs to the owner of the property; and from the fact that
all or almost the whole area of said increased portion is soft and unsettled, one is naturally convinced
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 PROPERTY
that it was formed by alluvion, and that for such reason it appertains to the owner of the land boi-dering
thereon, by virtue of the right of accretion recognized by the law.

And, although the acts of possession exercised over the bordering land are always understood
legally to cover that portion added to the property by accretion, in this case shrubs have been planted
there, which furnish additional proof that Maximo Cortes has exercised rights of ownership and
possession over the whole area of the property the registration of which he requests.

Hilario v. City of Manila, 19 SCRA 931

FACTS: Dr. Jose Hilario was the registered owner of a large tract of land which was then inherited by
his son, Jose Hilario Jr., plaintiff. During the lifetime of plaintiff's father, the Hilario estate was bounded
on the western side by the San Mateo River. To prevent its entry into the land, a bamboo and lumber
post dike or ditch was constructed on the northwestern side. This was further fortified by a stone wall
built on the northern side. However, in 1937, a great and extraordinary flood occurred which inundated
the entire place. The river destroyed the dike on the northwest, left its original bed and meandered into
the Hilario estate, segregating from the rest thereof a lenticular place of land.

In 1945 the U.S. Army opened a sand and gravel plant within the premises and started scraping,
excavating and extracting soil, gravel and sand from the nearby areas the River. The operations
eventually extended northward into this strip of land. In 1947, the plant was turned over to defendants
who took over its operations.

On 1949, plaintiff filed his complaint7 for injunction and damages against the defendants City
Engineer of Manila, District Engineer of Rizal, the Director of Public Works, and Engr. Busuego, the
Engineer-in-charge of the plant. It was prayed that the latter be restrained from excavating, bulldozing
and extracting gravel, sand and soil from his property and that they solidarily pay to him P5, 000.00 as
damages. Defendants' answer alleged, in affirmative defense, that the extractions were made from the
riverbed while counterclaiming with a prayer for injunction against plaintiff—who, it was claimed, was
preventing them from their operations.

ISSUE: Whether or not the area where defendants extracted gravel and sand is plaintiff’s
property and not from the riverbed and/or riverbank.

HELD: Since the change in the course of the River took place in 1937, long before the present Civil Code
took effect, the question before us should be determined in accordance with the provisions of the old
Civil Code and those of the Law of Waters of August 3, 1866. We agree with defendants that under the
cited laws, all riverbanks are of public ownership — including those formed when a river leaves its old
bed and opens a new course through a private estate. Art. 339 of the old Civil Code is very clear. Without
any qualifications, it provides:

Property of public ownership is —

That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed
by the State, riverbanks, shores, roadsteads, and that of a similar character; (Emphasis supplied)

Moreover, as correctly contended by defendants, the riverbank is part of the riverbed. Art. 73 of
the Law of Waters which defines the phrase "banks of a river" provides:

By the phrase "banks of a river" is understood those lateral strips or zones of its bed which are
2-Executive DVOREF

washed by the stream only during such high floods as do not cause inundations. ... (Emphasis
supplied)

The use the of words "of its bed [de sus alveos]" clearly indicates the intent of the law to consider
the banks — for all legal purposes — as part of the riverbed. The lower court also ruled — correctly —
that the banks of the River are paint of its bed. Since, undeniably all beds of rivers are of public
ownership, it follows that the banks, which form part of them, are also of public ownership. Art. 372 of
the old Civil Code which provides that —
21

“Whenever a navigable or floatable river changes its course from natural causes and opens a new
bed through a private estate, the new bed shall be of public ownership, but the owner of the
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 PROPERTY
estate shall recover it in the event that the waters leave it dry again either naturally or as the
result of any work legally authorized for this purpose.” (Emphasis supplied)

Did not have to mention the banks because it was unnecessary. The nature of the banks always
follows that of the bed and the running waters of the river. A river is a compound concept consisting of
three elements: (1) the running waters, (2) the bed and (3) the banks. All these constitute the river.
American authorities are in accord with this view:

'River' consists of water, a bed and banks.

A "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 paints. 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.

Since a river is but one compound concept, it should have only one nature, i.e., it should either
be totally public or completely private. And since rivers are of public ownership, it is implicit that all the
three component elements be of the same nature also.

Wherefore, Defendants City of Manila and the Director of Public Works and his agents and
employees are hereby absolved from liability to plaintiff since they did not extract materials from
plaintiff's property but from the public domain.

Grande v. Court of Appeals, 5 SCRA 524

FACTS: The Grandes are owners of a parcel of land in Isabela, by inheritance from their deceased
mother, Patricia Angui, who likewise, inherited it from her parents. In the early 1930’s, the Grandes
decided to have their land surveyed for registration purposes. The land was described to have Cagayan
River as the northeastern boundary, as stated in the title.

By 1958, a gradual accretion took place due to the action of the current of the river, and an
alluvial deposit of almost 20,000 sq.m. was added to the registered area. The Grandes filed an action for
quieting of title against the Calalungs, stating that they were in peaceful and continuous possession of
the land created by the alluvial deposit until 1948, when the Calalungs allegedly trespassed into their
property. The Calalungs, however, stated that they were the rightful owners since prior to 1933.

The CFI rendered a decision in favors for the Grandes and ordered the Calalungs to vacate the
premises and deliver possession thereof and to pay for damages and cost. Upon appeal to the CA,
however, the decision was reversed.

ISSUE: Whether or not the respondents have acquired the alluvial property in question
through prescription.

HELD: By law, therefore, unless some superior title has supervened, it should properly belong to the
riparian owners, specifically in accordance with the rule of natural accession in Article 366 of the old Civil
Code (now Article 457), which provides that "to the owner of lands adjoining the banks of rivers, belongs
the accretion which they gradually receive from the effects of the current of the waters." The defendants,
however, contend that they have acquired ownership through prescription.

An accretion to registered land, while declared by specific provision of the Civil Code to
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belong to the owner of the land as a natural accession thereof, does not ipso jure become
entitled to the protection of the rule of imprescriptibility of title established by the Land
Registration Act. Such protection does not extend beyond the area given and described in the
certificate. To hold otherwise, would be productive of confusion. It would virtually deprive the title, and
the technical description of the land given therein, of their character of conclusiveness as to the identity
and area of the land that is registered. Just as the Supreme Court, albeit in a negative manner, has
stated that registration does not protect the riparian owner against the erosion of the area of his land
through gradual changes in the course of the adjoining stream (Payatas Estate Development Co. v.
Tuason, 53 Phil. 55), so registration does not entitle him to all the rights conferred by Land Registration
22

Act, in so far as the area added by accretion is concerned. What rights he has, are declared not by said
Act, but by the provisions of the Civil Code on accession: and these provisions do not preclude acquisition
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of the addition area by another person through prescription.

 PROPERTY

We are convinced, upon consideration of the evidence, that the latter, were really in possession
since 1934, immediately after the process of alluvion started, and that the plaintiffs woke up to their
rights only when they received their copy of the title in 1958. By then, however, prescription had already
supervened in favor of the defendants.

Ignacio v. Director of Lands, 727 SCRA 13

FACTS: Ignacio filed an application for the registration of a parcel of land (mangrove), situated in
Navotas, Rizal, with an area of 37,877 square meters. He amended his application by alleging among
others that he owned the parcel applied for by right of accretion. To the application, the Director of Lands
filed oppositions and claimed the parcel applied for as a portion of the public domain, for the reason that
neither the applicant nor his predecessor-in-interest possessed sufficient title thereto, not having
acquired it either by composition title from the Spanish government or by possessory information title
under the Royal Decree of February 13, 1894, and that he had not possessed the same openly,
continuously and adversely under a bona fide claim of ownership since July 26, 1894. Director of Lands
alleged he was holding the land by virtue of a permit granted him by the Bureau of Fisheries, issued on
January 13, 1947, and approved by the President.

The land applied for adjoins a parcel owned by the applicant which he had acquired from the
Government by virtue of a free patent title in 1936. It has also been established that the parcel in
question was formed by accretion and alluvial deposits caused by the action of the Manila Bay which
boarders it on the southwest. Applicant claims that he had occupied the land since 1935, planting it with
api-api trees, and that his possession thereof had been continuous, adverse and public for a period of
twenty years until said possession was distributed by oppositor.

The Director of Lands sought to prove that the parcel is foreshore land, covered by the ebb and
flow of the tide and, therefore, formed part of the public domain.

The trial court dismissed the application, holding that the parcel formed part of the public domain.

ISSUE: Whether or not the parcel of land belongs to appellant by the law of accretion.

HELD: No, the parcel of land does not belong to appellant by the law of accretion. Having been formed
by gradual deposit by action of the Manila Bay, and appellant cites Article 457 of the New Civil Code,
which provides that:

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.

The article cited is inapplicable because it refers to accretion or deposits on the banks of rivers,
while the accretion in the present case was caused by action of the Manila Bay.

Appellant next contends that Articles 1, 4 and 5 of the Law of Waters are not applicable because
they refer to accretions formed by the sea, and that Manila Bay cannot be considered as a sea. The Court
said contention untenable. A bay is a part of the sea, being a mere indentation of the same:

Bay. — An opening into the land where the water is shut in on all sides except at the entrance;
an inlet of the sea; an arm of the sea, distinct from a river, a bending or curbing of the shore of the sea
or of a lake.
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Article 4 of the Law of Waters of 1866 reads thus:

ART. 4. Lands added to the shores by accretions and alluvial deposits caused by the action of the
sea, form part of the public domain. When they are no longer washed by the waters of the sea and are
not necessary for purposes of public utility, or for the establishment of special industries, or for the
coastguard service, the Government shall declare them to be the property of the owners of the estates
adjacent thereto and as increment thereof.
23

Appellant next contends that he had acquired the parcel in question through acquisitive
prescription, having possessed the same for over ten years. In answer, suffice it to say that land of the
Page

public domain is not subject to ordinary prescription.

 PROPERTY

Republic v. CA, 132 SCRA 514, G.R. No. L-61647, October 12, 1984

FACTS: Respondents Benjamin Tancinco, Azucena Tancinco Reyes, Marina (should be "Maria") Tancinco
Imperial and Mario C. Tancinco are registered owners of a parcel of land covered by Transfer Certificate
of Title No. T-89709 situated at Bulacan bordering on the Meycauayan and Bocaue rivers.

The private respondents filed an application for the registration of three lots adjacent to their
fishpond property. Assistant Provincial Fiscal Amando C. Vicente, in representation of the Bureau of Lands
filed a written opposition to the application for registration.

Private respondents filed a partial withdrawal of the application for registration with respect to
Lot 3 of Plan Psu-131892 in line with the recommendation of the Commissioner appointed by the Court
and Lot 3 was ordered withdrawn from the application and trial proceeded only with respect to Lots 1
and 2.

The lower court rendered a decision granting the application on the finding that the lands in
question are accretions to the private respondents' fishponds covered by Transfer Certificate of Title.

Republic appealed to the respondent Court of Appeals and rendered a decision affirming in
toto the decision of the lower court.

There are facts and circumstances in the record which render untenable the findings of the trial
court and the Court of Appeals that the lands in question are accretions to the private respondents'
fishponds.

The petitioner submits that there is no accretion to speak of under Article 457 of the New Civil
Code because what actually happened is that the private respondents simply transferred their dikes
further down the river bed of the Meycauayan River, and thus, if there is any accretion to speak of, it is
man-made and artificial and not the result of the gradual and imperceptible sedimentation by the waters
of the river.

The private respondents submit that the foregoing evidence establishes the fact of accretion
without human intervention because the transfer of the dike occurred after the accretion was complete.

ISSUE: Whether or not the lands in question are accretions to the private respondents'
fishponds covered by Transfer Certificate of Title.

HELD: No, the lands in question are accretions to the private respondents' fishponds covered
by Transfer Certificate of Title.

Article 457 of the New Civil Code provides:

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.

The article requires the concurrence of three requisites before an accretion covered by this
particular provision is said to have taken place. They are (1) that the deposit be gradual and
imperceptible; (2) that it be made through the effects of the current of the water; and (3) that the land
where accretion takes place is adjacent to the banks of rivers.
2-Executive DVOREF

Alluvion must be the exclusive work of nature. In the instant case, there is no evidence
whatsoever to prove that the addition to the said property was made gradually through the effects of
the current of the Meycauayan and Bocaue rivers. The witness was incompetent to testify to a gradual
and imperceptible increase to their land in the years before 1939 where the witness testified that in that
year, she observed an increase in the area of the original fishpond which is now the land in question. If
she was telling the truth, the accretion was sudden. However, there is evidence that the alleged alluvial
deposits were artificial and man-made and not the exclusive result of the current of the Meycauayan and
Bocaue rivers. The alleged alluvial deposits came into being not because of the sole effect of the current
24

of the rivers but as a result of the transfer of the dike towards the river and encroaching upon it. The
land sought to be registered is not even dry land cast imperceptibly and gradually by the river's current
Page

on the fishpond adjoining it. It is under two meters of water. The private respondents' own evidence
 PROPERTY
shows that the water in the fishpond is two meters deep on the side of the pilapil facing the fishpond
and only one meter deep on the side of the pilapil facing the river.

The reason behind the law giving the riparian owner the right to any land or alluvion deposited
by a river is to compensate him for the danger of loss that he suffers because of the location of his land.
If estates bordering on rivers are exposed to floods and other evils produced by the destructive force of
the waters and if by virtue of lawful provisions, said estates are subject to incumbrances and various
kinds of easements, it is proper that the risk or danger which may prejudice the owners thereof should
be compensated by the right of accretion. Hence, the riparian owner does not acquire the additions to
his land caused by special works expressly intended or designed to bring about accretion. When the
private respondents transferred their dikes towards the river bed, the dikes were meant for reclamation
purposes and not to protect their property from the destructive force of the waters of the river.

The lower court cannot validly order the registration of Lots 1 & 2 in the names of the private
respondents. These lots were portions of the bed of the Meycauayan river and are therefore classified as
property of the public domain under Article 420 paragraph 1 and Article 502, paragraph 1 of the Civil
Code of the Philippines. They are not open to registration under the Land Registration Act. The
adjudication of the lands in question as private property in the names of the private respondents is null
and void. The petition is granted.

Lunod v. Meneses, 11 Phil 128

FACTS
Plaintiifs (Appellees) Nicolas Lunod and 7 others are owners of farmlands on the upper estates near a
lake (Calalaran).Defendant-Appellant Higno Meneses is the owner of a fishpond and a strip of land in
Paraanan adjoining said lake on one side and a river on the other. Paraan is the only outlet of water to
the river from the lands of Lunod et al during rainy season.In 1901 Meneses converted the land in Paraan
to a fishpond and by means of a dam and a bamboo net prevented the free passage of water through
Paraan causing flood and damage of plantations in the upper estates. Lunod et al filed a complaint
alleging that there exists in favor of their rice fields a statutory easement for more than 20 years before
1901 and praying that Meneses be ordered to remove the obstructions that impede the passage of water
through Paraanan.RTC ruled in favor of the plaintiffs.

ISSUE: WON Meneses can be permitted to obstruct the flow of waters through his lands.

HELD: NO, but Lunod et al cannot prevent the defendant from building works to prevent his lands against
influx of waters due to the right of the owner of dominant estate.

RATIO: Where a statutory easement exists between adjoining estates, the owner of the lower lands
must not construct any work that may impair or obstruct an easement which consists in receiving the
waters which naturally, and without the intervention of man, descend from more elevated lands; neither
shall the owner of the latter construct any work that may increase the easement.

The Civil Code allows that every owner may enclose his property by means of walls, dikes, fences,
or any other device, but his right is limited by the easement with which his estate is charged.

Since the plaintiffs can not prevent the defendant from protecting his lands against the influx of
salt water; but the defendant could never be permitted to obstruct the flow of the waters through his
lands to the river during the heavy rains, when the high lands in Calalaran and the lake in said place are
flooded, thereby impairing the right of the owners of the dominant estates; the court advised that it is
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perhaps useful and advantageous to all parties that Meneses be made to build a another dike in addition
to the old dike between the lake of said place and the low lands in Paraanan, for the purpose of preventing
the salt waters of the river flooding (at high tide) not only the lowlands in Paraanan but also the higher
ones of Calalaran and its lake.

*Binalay v. Manalo, 195 SCRA 347

FACTS
Manalo acquired 2 lots which were originally owned by Judge Taccad from 2 different people (the
25

latter’s daughter and from an earlier purchaser). These lots were later consolidated into Lot 307, a total
of 10.45 hectares. The lot was beside the Cagayan River, which, due to flooding, would place a portion
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of the land underwater during the rainy season (September to December). On sunny days, however, the
 PROPERTY
land would be dried up for the entire dry season (January to August). When a survey of the land was
conducted on a rainy month, a portion of the land that Manalo bought was then underwater and was
thus left unsurveyed and excluded from Lot 307.

The big picture is this: Cagayan River running from south to north, forks at a certain point to form
two braches (western and eastern) and then unites at the other end, further north, to form a narrower
strip of land. The eastern branch of the river cuts through Lot 307, and is flooded during the rainy season.
The unsurveyed portion, on the other hand, is the bed of the eastern branch. Note that the fork exists
only during the rainy season while the “island”/elongated strip of land formed in the middle of the forks
becomes dry and perfect for cultivation when the Cagayan river is at its ordinary depth. The strip of land
in the middle of the fork totaled 22.7 hectares and was labeled Lot 821-822. Lot 821 is directly opposite
Lot 307 and is separated by the eastern branch of the river’s fork.

Manalo claims that Lot 821 belongs to him by way of accretion to the submerged portion of the
land to which it is adjacent. Petitioners (Binalay, et al) who possess the Lot 821, on the other hand, insist
that they own it. They occupy the other edges of the lot along the river bank (i.e. the fertile portions on
which they plant tobacco and other agricultural products) and also cultivate the western strip during the
summer.

Manalo filed 2 cases for forcible entry which were both dismissed. Later on, he filed a complaint
for quieting of title, possession, and damages against petitioner. The trial court and the CA ruled in favor
of Manalo, saying that Lot 821 and Lot 307 cannot be considered separate and distinct from each other.
They reasoned that when the land dries up for the most part of the year, the two are connected. [Note:
The CA applied the ruling in Gov’t of the Phil Islands vs. Colegio de San Jose, which was actually
inappropriate because the subject matter in this case was a lake so that the definition of a “bed” was
different.

ISSUE: Whether or not Manalo owns Lot 821 by way of accretion

RULING: No. The disputed property is not an accretion. It is the action of the heavy rains that cause
the highest ordinary level of waters of the Cagayan River during the rainy season. The depressed portion
is a river bed and is thus considered property of public domain.

The SC observed the following:

a) The pictures identified by Manalo during his direct examination depict the depressed portion
as a river bed. The dried up portion had dike-like slopes (around 8m) on both sides connecting it to Lot
307 and Lot 821 that are vertical and very prominent.

b) The eastern bed already existed even before Manalo bought the land. It was called “Rio Muerte
de Cagayan.”

c) Manalo could not have acquire ownership of the land because article 420 of the civil code states
that rivers are property of public dominion. The word “river” includes the running waters, the bed, and
the banks. [The seller never actually owned that part of the land since it was public property]

d) The submerged area (22.72 ha) is twice the area of the land he actually bought. It is difficult
to suppose that such a sizable area could have been brought about by accretion.

More importantly, the requisites of accretion in article 457 were not satisfied. These are: 1) that
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the deposition of the soil or sediment be gradual and imperceptible; 2) that it be the result of the action
of the waters of the river (or sea); and 3) the land where the accretion takes place is adjacent to the
banks of the rivers (or the sea coast). The accretion should’ve been attached to Lot 307 for Manalo to
acquire its ownership. BUT, the claimed accretion lies on the bank of the river; not adjacent to Lot 307
but directly opposite it – across the river. Aside from that, the dike-like slopes which were very steep
may only be formed by a sudden and forceful action like flooding. The steep slopes could not have been
formed by the river in a slow and gradual manner.

*Baes v. Court of Appeals, 224 SCRA 562

26

The rules on alluvion do not apply to man-made or artificial accretions nor to accretions to lands
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that adjoin canals or esteros or artificial drainage systems. If the riparian owner is entitled to
 PROPERTY
compensation for the damage to or loss of his property due to natural causes, there is all the more
reason to compensate him when the change in the course of the river is effected through artificial means.

FACTS: In 1962, the Government dug up a canal on a private estate in order to streamline the Tripa de
Gallina creek (in other words, there was a mand-made change of river course). Said private estate was
acquired by petitioner Baes, and was subdivided in to three lots. It was lot 2958-C which was totally
occupied by the canal so the Government in exchange granted him a lot near but not contiguous to C.
The old river bed was filled up by soil from Lot C. Petitioner now claims ownership over the old river bed
on the basis of Article 461 which says that abandoned river beds belong to the riparian owners whose
land is occupied by the new course of water.

ISSUE: Whether or not Article 461 applies

RULING: YES! If the riparian owner is entitled to compensation for the damage to or loss of his property
due to natural causes, there is all the more reason to compensate him when the change in the course of
the river is effected through artificial means. The loss to the petitioners of the land covered by the canal
was the result of a deliberate act on the part of the government when it sought to improve the flow of
the Tripa de Gallina creek. It was therefore obligated to compensate the Baeses for their loss.

We find, however, that the petitioners have already been so compensated. Felix Baes was given
Lot 3271-A in exchange for the affected Lot 2958-B through the Deed of Exchange of Real Property dated
June 20, 1970. This was a fair exchange because the two lots were of the same area and value and the
agreement was freely entered into by the parties.

*Vda. de Nazareno v. Court of Appeals, 257 SCRA 589

FACTS:
Antonio Nazareno is an owner of a titled property situated beside an accretion area along the ba
nks of Cagayan River. Jose Salasalan & Leo Rabaya leased parcels of land from Nazareno. When Salsalan
& Rabaya stopped paying rentals, Nazareno filed an ejectment suit. The Municipal Trial Court ruled in
favor of Nazareno; the RTC affirmed the decision. Thus, Nazareno filed an application with the Bureau of
Lands to perfect his title over the accretion area being claimed by him. Before the approved survey plan
could be released to the applicant, however, it was protested by private respondents before the Bureau
of Lands which further rendered a decision ordering the amendment of the survey plan in the name of
Antonio Nazareno by segregating therefrom the areas occupied by the private respondents who, if
qualified, may file public land applications covering their respective portions.

Antonio Nazareno filed a motion for reconsideration with respondent Rolleo Ignacio,
Undersecretary of the Department of Natural Resources and Officer-in-Charge of the Bureau of Lands
who denied the motion. Respondent Director of Lands Abelardo Palad then ordered him to vacate the
portions adjudicated to private respondents and remove whatever improvements they have introduced
thereon. He also ordered that private respondents be placed in possession thereof.

Upon the denial of the late Antonio Nazareno's motion for reconsideration, petitioners
Desamparado Vda. de Nazareno and Leticia Tapia Nazareno, filed a case before the RTC, Branch 22 for
annulment of the following: order of investigation by respondent Gillera, report and recommendation by
respondent Labis, decision by respondent Hilario, order by respondent Ignacio affirming the decision of
respondent Hilario and order of execution by respondent Palad. The RTC dismissed the complaint for
failure to exhaust administrative remedies which resulted in the finality of the administrative decision of
the Bureau of Lands. On appeal, the Court of Appeals affirmed the decision of the RTC dismissing the
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complaint.

ISSUE: Whether or not the subject land is a public land

ARGUMENTS:

VDA. DE NAZARENO
The subject land is a private land being an accretion to Antonio Nazareno’s titled property.
27

Art. 457 of the Civil Code which provides that “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”.
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 PROPERTY
The accumulation was gradual and imperceptible, resulting from the action of the waters or current of
the Balacanas Creek and Cagayan River.

SALASALAN AND RABAYA

They contend the public character of the subject land.

Mere application of the Miscellaneous Sales Patent by Nazareno is an admission that the land being
applied is a public land.

RULING: The Court ruled that the subject land is part of the public domain since the accretion
was man-made or artificial.

Under Article 457 of the Civil Code:

“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.”

But the Court provides the following requisites of accretion (Rules of Alluvion):

1.That the deposition of soil or sediment be gradual and imperceptible;

2.That it be the result of the action of the waters of the river (or sea); and
3.That the land where the accretion takes place is adjacent to the banks of rivers (or sea coast).

In Republic v. CA, “the requirement that the deposit should be due to the effect of the current
of the river is indispensable”. In Hilario v. City of Manila, “the word “current” indicates the participation
of the body of water in the ebb and flow of waters due to high and low tide”. Petitioners' submission
not having met the first and second requirements of the rules on alluvion, they cannot claim the rights
of a riparian owner.

It is the Court's irresistible conclusion, therefore, that the accretion was man-made or
artificial. In Republic v. CA, the Court ruled that the requirement that the deposit should be due to the
effect of the current of the river is indispensable. This excludes from Art. 457 of the Civil Code all deposits
caused by human intervention. Putting it differently, alluvion must be the exclusive work of nature. Thus,
in Tiongco v. Director of Lands, et al., where the land was not formed solely by the natural effect of the
water current of the river bordering said land but is also the consequence of the direct and deliberate
intervention of man, it was deemed a man-made accretion and, as such, part of the public domain.

In the case at bar, the subject land was the direct result of the dumping of sawdust by the Sun
Valley Lumber Co. consequent to its sawmill operations. Even if this Court were to take into consideration
petitioners' submission that the accretion site was the result of the late Antonio Nazareno's labor
consisting in the dumping of boulders, soil and other filling materials into the Balacanas Creek and
Cagayan River bounding his land, the same would still be part of the public domain.

The petition is DISMISSED for lack of merit.

ARTIFICIALLY INCORPORATED

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.
Art. 458. The owners of estates adjoining ponds or lagoons do not acquire the land left dry by the
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natural decrease of the waters, or lose that inundated by them in extraordinary floods.
Art. 459. Whenever the current of a river, creek or torrent segregates from an estate on its bank a
known portion of land and transfers it to another estate, the owner of the land to which the segregated
portion belonged retains the ownership of it, provided that he removes the same within two years.
Art. 460. Trees uprooted and carried away by the current of the waters belong to the owner of the land
upon which they may be cast, if the owners do not claim them within six months. If such owners claim
them, they shall pay the expenses incurred in gathering them or putting them in a safe place.
Art. 461. River beds which are abandoned through the natural change in the course of the waters ipso
facto belong to the owners whose lands are occupied by the new course in proportion to the area lost.
28

However, the owners of the lands adjoining the old bed shall have the right to acquire the same by
paying the value thereof, which value shall not exceed the value of the area occupied by the new bed.
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 PROPERTY
Art. 462. Whenever a river, changing its course by natural causes, opens a new bed through a private
estate, this bed shall become of public dominion.
Art. 463. Whenever the current of a river divides itself into branches, leaving a piece of land or part
thereof isolated, the owner of the land retains his ownership. He also retains it if a portion of land is
separated from the estate by the current.
Art. 464. Islands which may be formed on the seas within the jurisdiction of the Philippines, on lakes,
and on navigable or floatable rivers belong to the State.
Art. 465. Islands which through successive accumulation of alluvial deposits are formed in non-navigable
and non-floatable rivers, belong to the owners of the margins or banks nearest to each of them, or to
the owners of both margins if the island is in the middle of the river, in which case it shall be divided
longitudinally in halves. If a single island thus formed be more distant from one margin than from the
other, the owner of the nearer margin shall be the sole owner thereof.

Equatorial v. Mayfair, 370 SCRA 56

FACTS: Carmelo owned a parcel of land with two 2-storey buildings located at Claro M Recto Avenue,
Manila. The said building is leased to Mayfair specifically the portion of the 2 ndfloor, the two spaces at
the ground floor and the mezzanine area. Based on their contract, it stated that,

That if the LESSOR should desire to sell the leased premises, the LESSEE shall be given 30-days
exclusive option to purchase the same.

In the event, however, that the leased premises is sold to someone other than the LESSEE, the
LESSOR is bound and obligated, as it hereby binds and obligates itself, to stipulate in the Deed of Sale
hereof that the purchaser shall recognize this lease and be bound by all the terms and conditions thereof.

Carmelo informed the President of Mayfair they were selling the entire Claro M. Recto property
and a certain Mr. Araneta was offering to buy the whole property and asked if Mayfair was willing to buy
the property. Mayfair send a letter to Carmelo, to which the latter did not reply. On their second letter
Mayfair informed Carmelo off their interest in acquiring the entire building and other improvements if
the price is reasonable.

Four years later, Carmelo sold its entire property, which included the leased premises of Mayfair, to
Equatorial

ISSUE: WON Equatorial was the owner of the subject property and could thus enjoy the fruits
or rentals therefrom

HELD: NO. Rent is a civil fruit that belongs to the owner of the property producing it by right
of accession. Consequently and ordinarily, the rentals that fell due from the time of the
perfection of the sale to petitioner until its rescission by final judgment should belong to the
owner of the property during that period.

Luianag v. Yu-sonquian, 5 SCRA 147, G.R. No. L-2238, October 19, 1905

FACTS: Yu-Chiocco leased a land on Calle Lemery, Tondo in 1901. The property, however, was later
claimed by Leoncia Liuanag, on behalf of the estate of Yu-Chingco, who had died in China on Oct. 30
1901. Yu-Chiocco himself died in August 1902.

The lower court found that Yu-Chiocco contributed the labor, while the materials used belonged
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to the estate of Yu-Chingco, and ruled that the estate of Yu-Chingco owned half of the buildings.

The Supreme Court overturned the ruling, saying that even if the materials belonged to Yu-
Chingco, “it does not follow, as a conclusion of law, that the owner of the material thereby became the
owner of any part of the buildings.”

Instead, Liuanag should be paid for the materials that were used to construct the building.

It cited Art. 360 of the Civil Code, which says that a landowner who builds on his land using the
29

materials of another is obliged to pay for the value of the material. Saying that the provision would also
apply to a leasehold in real estate, the Court said Liuanag has a claim for the value of the materials that
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were used in the construction of the building.

 PROPERTY

ISSUE: WON Art. 360 is applicable

HELD: YES. The provision is applicable to a leasehold in real estate. The plaintiff has a claim for the
value of the material which belonged to the estate of Yu-Chingco, and which was actually used in the
construction of the building.

JM Tuason v. Vda. de Lumanlan, 23 SCRA 231

Facts J.M Tuason and Co Inc. (Tuason) filed a case against Lumanian after the latter unlawfully entered
into its property known as Santa Mesa Height Subdivision (situated at Barrio North Tatalon, Quezon
City). Lumanian took possession of 800 sq m land and constructed her house on the said land. Tuason
prays for ejectment and damage for occupancy.

Lumanian argues that she had brought the property from one Pedro Duedor and that there is a
Comprehensive Agreement between Duedor and Tuason stating that she was one of the buyers
recognized therein.

CFI: Lower Court ruled in favour of Tuason, holding that it is the registered owner and the question
being purely one of possession. Lumanian’s evidence (Compromise Agreement) was completely
immaterial.

Upon appeal, CA ruled in favour of Lumanlan, holding the Compromise Agreement was a valid
defense against the possessory action filed by Tuason. Under Paragraph 7 of the said agreement, Tuason
bound and committed itself to sell Lumanian the lot occupied by her at a reasonable price. Lumanian has
the right to compel Tuason to accept payment for the lot in question and that the agreement legalized
the posssion of Lumanlan.

ISSUE: Whether or not J.M Tuason and Co, Inc is the rightful owner of the said land. – YES

HELD: A careful analysis of the compromise agreement will show that in no way did it obligate Tuason
to sell to those buyers the lots occupied by them at the price stipulated with the Duedors , but a current
prices and terms specified by the Owners (Tuason) in their sale of lots in their subdivision known as Sta.
Mesa Heights Subdivision”.

Paragraph 7 also imports that these buyers of the Duedors must (1) recognize the title of the
owners (tuason) over the property purportedly brought by them and from the Duedors, and (2) sign,
whenever possible new contact of purchase for said property. The agreement also states that “the sums
paid by them to the Duedors shall be credited to buyers.

All that Tuason agreed to was to grant the Duedor buyers preferential right to purchase at current
prices and terms upon recognizing the title of Tuason and signing new contracts and to credit to them
for the amounts they had paid to the Duedors.

Lumanlan never claimed that she had signed a new contract withTuason for the purchase of the
lot occupied. Instead recognizing the title of Tuason as required by the agreement, she used the
paragraph 6 of the agreement for her special defense, arguing that Duedor and Tuason entered into the
compromise agreement where Duedor and his co-owners renounced, ceded, waived, and quitclaimed all
their rights in the property in favour of Tuason without her knowledge and consent. Now she does not
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rely on the compromise agreement but she assails it.

Without the compromise agreement, Lumanlan must justify her possession on the basis of a
pretended superiority of the Duedor’s old Spanish nformacion posesoria over Tuason’s Certificate of Title
No. 1267. But the court has already ruled in previous cases that Lumanlan is barred from assailing the
decree of registration in favour of Tuason predecessors 20 years after its issuance.
The agreement provides that the Duedor buyers should sign new contracts with it at current
prices specified in for the sales of lots. Article 1474, NCC does not apply in this case because Lumanlan
is not a buyer from Tuason since there is no contract between the two.
30

Lumanlan’s argument that she should be deemed a builder in good faith does not hold water. In
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a related case (Tuason v. Macalindog) the court ruled that there being a presumptive knowledge of the
 PROPERTY
torrents title issued to Tuason, the buyer from the Duedor’s cannot say now that she believe her vendor
had rights of ownership over the lot purchaser. She had chosen to ignore the Torrens title of Tuason and
relied instead upon the Duedor’s claim of ownership, perhaps because such course appeared to her as
more advantageous; hence she has only herself to blame for the consequences now that Duedor’s claim
has been abandoned by themselves, and cannot pretend good faith.

Gaboya v. Cui, 38 SCRA 85

FACTS: Don Mariano sold his 2 lots to two of his children. Later on, he and his children became co-
owners of the property. Don Mariano executed a deed authorizing the children to apply for a loan w/
mortgage with a stipulation reserving his right to the fruits of the land. The children then constructed a
building on the land and collected rent from the lessee thereof. Much later, when Don Mariano died, his
estate was claiming the fruits of the building.

Issue: Whether or not Don Mariano had a right to fruits of the building?

Ruling: No. The deed expressly reserved only to his right to the fruits of the land. He only owned the
rent for the portion of land occupied by the building; thus, the estate could only claim the rent on that
piece of land and not on the entire parcel of land. The children are entitled to the rents of the building.
(A usufruct on the land may be separate from the building.

There should be no rescission of the contract coz the exact amount of rent due and owing to the
Don Mariano’s estate is still unliquidated and undetermined. The trial court has the discretion to grant
the debtor (children) a period within which to pay the rental income from the portion of land owned by
the building because the same has not yet been determined. Article 1191 of the Civil Code grants the
right to rescind but subject to the period that the court will grant.

Moreover, on the issue of co-ownership, the court held that a co-owner cannot simultaneously be
a usufructuary of the same land owned.

Floresca v. Evangelista, 96 SCRA 130

Facts: Plaintiffs Maria de Evangelista and Sergio Evangelista, who are mother and son, (the
EVANGELISTAS, for short) are the owners of a residential lot located at Sumilang St., Tanay, Rizal, with
an area of 204.08 sq. ms., assessed at P410.00.

In May 1945, the EVANGELISTAS borrowed from FLOREZA the amount of P100.00.

On or about November 1945, with the consent of the EVANGELISTAS, FLOREZA occupied the
above residential lot and built thereon a house of light materials (barong- barong) without any agreement
as to payment for the use of said residential lot.

Thereafter, the EVANGELISTAS again borrowed money on 5 different dates a total of P740.00
including the first loan.

The last three items are evidenced by private documents stating that the residential lot stands as
security therefor and that the amounts covered thereunder are payable within six years from date,
without mention of interest.
2-Executive DVOREF

On January 10, 1949, FLOREZA demolished this house of light materials and in its place
constructed one of strong materials assessed in his name at P1,410.00 under Tax Declaration No. 4448.
FLOREZA paid no rental as before.

On August 1, 1949, the EVANGELISTAS, for and in consideration of P1,000.00 representing the
total outstanding loan of P740.00 plus P260.00 in cash, sold their residential lot to FLOREZA, with a right
to repurchase within a period of 6 years.

On January 2, 1955, or seven months before the expiry of the repurchase period, the
31

EVANGELISTAS paid in full the repurchase price of P1,000.00.

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 PROPERTY
On April 25, 1956, the EVANGELISTAS, through their counsel, wrote FLOREZA a letter 8 asking
him to vacate the premises as they wanted to make use of their residential lot besides the fact that
FLOREZA had already been given by them more than one year within which to move his house to another
site.

FLOREZA refused to vacate unless he was first reimbursed the value of his house.

Issue: WON Floreza is entitled to reimbursement for the value of the house.

Held: No. The reimbursement of the value of the improvement erected on the subject property
has become moot. Petitioner's right of retention of subject property until he is reimbursed for
the value of his house, as he had demanded, is inextricably linked with the question of rentals.
For if petitioner has the right to indemnity, he has the right of retention and no rentals need
be paid. Conversely, if no right of retention exists, damages in the form of rentals for the
continued use and occupation of the property should be allowed.

It should be noted that petitioner did not construct his house as a vendee a retro. The house had
already been constructed as far back as 1949 (1945 for the house of light materials) even before the
pacto de retro sale in 1949. Petitioner incurred no useful expense, therefore, after that sale. The house
was already there at the tolerance of the EVANGELISTAS in consideration of the several loans extended
to them.

Since petitioner cannot be classified as a builder in good faith within the purview of Article 448 of
the Civil Code, nor as a vendee a retro, who made useful improvements during the lifetime of the pacto
de retro, petitioner has no right to reimbursement of the value of the house which he had erected on the
residential lot of the EVANGELISTAS, much less to retention of the premises until he is reimbursed.

The rights of petitioner are more akin to those of a usufructuary who, under Article 579 of the
Civil (Art. 487 of the old Code), may make on the property useful improvements but with no right to be
indemnified therefor. He may, however, remove such improvements should it be possible to do so
without damage to the property: For if the improvements made by the usufructuary were subject to
indemnity, we would have a dangerous and unjust situation in which the usufructuary could dispose of
the owner's funds by compelling him to pay for improvements which perhaps he would not have made.

Manotok Realty v. Tecson 764 SCRA 587

Facts: Petitioner Manotok Realty file for recovery of possession and damages against the private
respondent Madlangawa. The CFI ruled, declaring the defendant Nilo Madlangawa as a builder or
possessor in good faith; ordering the plaintiff to recognize the right of said defendant to remain in the
property until after he shall have been reimbursed by the plaintiff.
The petitioner filed with the trial court a motion for the approval of petitioner's exercise of option
and for satisfaction of judgment, praying that the court issue an order: a) approving the exercise of
petitioner's option to appropriate the improvements introduced by the private respondent on the
property; b) thereafter, private respondent be ordered to deliver possession of the property in question
to the petitioner.

The Court is of the considered view that under the peculiar circumstances which supervened after the
institution of this case, like, for instance, the introduction of certain major repairs of and other substantial
improvements on the controverted property, the instant motion of the plaintiff is not well-taken and
therefore not legally proper and tenable.
2-Executive DVOREF

The motion had been denied for lack of merit. Hence the petition.

Issue: WON private respondent be ordered to deliver possession of the property in question
to the petitioner.

Held: Yes. When the decision of the trial court became final and executory, it became
incumbent upon the respondent judge to issue the necessary writ for the execution of the
same. There is, therefore, no basis for the respondent judge to deny the petitioner's motion
32

to avail of its option to approriate the improvements made on its property.

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 PROPERTY
Neither can the respondent judge deny the issuance of a writ of execution because the private
respondent was adjudged a builder in good faith or on the ground of "peculiar circumstances which
supervened after the institution of this case, like, for instance, the introduction of certain major repairs
of and other substantial improvements..." because the option given by law either to retain the premises
and pay for the improvements thereon or to sell the said premises to the builder in good faith belongs
to the owner of the property.

Under Article 448, the right to appropriate the works or improvements or to oblige the one who
built or planted to pay the price of the land' belongs to the owner of the land. The only right given to the
builder in good faith is the right to reimbursement for the improvements; the builder, cannot compel the
owner of the land to sell such land to the former.

It is such a builder in good faith who is given the right to retain the thing, even as against the
real owner, until he has been reimbursed in full not only for the necessary expenses but also for useful
expenses.

A possessor in good faith is entitled to the fruits only so long as his possession is not legally
interrupted, and such interruption takes place upon service of judicial summons.

Since the improvements have been gutted by fire, and therefore, the basis for private
respondent's right to retain the premises has already been extinguished without the fault of the
petitioner, there is no other recourse for the private respondent but to vacate the premises and deliver
the same to herein petitioner.

*MWSS v. Court of Appeals, 143 SCRA 623, G.R. No. L-54526, August 25, 1986

Doctrine: He who builds, plants or sows in bad faith on the land of another, loses what is built, planted
or sows without right to indemnity.

FACTS: In a civil case of possession by the city of Dagupan against the MWSS for recovery of possession
and ownership of the Dagupan Waterworks System, the trial court rendered a decision in favor of the
city of Dagupan. However, the trial court also held that MWSS was in Bad Faith, and was therefore not
entitled to their claim of Php 255,000.00 for necessary and useful improvements upon the disputed
waterworks system.

ISSUES: WON MWSS has the right to remove all useful improvements introduced to the
Dagupan Waterworks System.

RULING: NO. Art 449 of the civil code of the Philippines provides that He who builds, plants
or sows in bad faith on the land of another, loses what is built, planted or sows without right
to indemnity.

As a builder in bad faith, NAWASA lost whatever useful improvements it had made without right
to indemnity. The right given a possessor in bad faith is to remove improvements applies only to
improvements for pure luxury or mere pleasure, provided the thing suffers no injury thereby and the
lawful possessor does not prefer to retain them by paying the value they have at the time he enters into
the possession.

*Pleasantville v. Court of Appeals, 253 SCRA 10

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Doctrine: Good faith consists in the belief of the builder that he land he is building on is his and his
ignorance of any defect or flaw in his title. The burden of proving bad faith belongs to the one asserting
it.

Facts: Edith Robillo purchased from Pleasantville Development Corporation, herein petitioner a parcel of
land at Pleasantville Subdivision, Bacolod City. The property was designated as Lot 9, Phase II. In 1975,
herein respondent Eldred Jardinico bought the said subject lot from the former purchaser. Eldred later
discovered that the property he purchased had improvements introduced therein by respondent
WilsonKee.Kee on the other hand bought on installments Lot 8 of the same subdivision from C.T. Torres
33

Enterprises, Inc. (CTTEI) which is the exclusive real estate agent of the petitioner. Under the contract,
Kee was allowed to take possession of the property even before full payment of the price. CTTEI through
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an employee, Zenaida Octaviano accompanied Kee’s wife Donabelle to inspect Lot No. 8. Octaviano,
 PROPERTY
however mistakenly pointed towards Lot 9. Hence spouses Kee had their residence, an auto repair shop,a
store and other improvements constructed on the wrong lot.Upon discovery of the blunder both Kee and
Jardinico tried to reach an amicable settlement butthey failed. Jardinico demanded that the
improvements be removed but as Kee refused, Jardinico filed acomplaint for ejectment with damages
against Kee at the Municipal Trial Court in Cities (MTCC) of Bacolod City. Kee filed a third-party complaint
against herein petitioner and CTTEI.The MTCC found that the error was attributable to CTTEI also since
at present the contract with Kee has rescinded for Kee’s failure to pay installments. Kee no longer had
any right over the subject property and must pay rentals for its use. The Regional Trial Court (RTC) of
Bacolod City ruled that petitioner and CTTEI were not at fault or were not negligent. It argued that Kee
was a builder in bad faith. Even if assuming that he was in good faith, he was no longer so and must pay
rentals from the time that he was given notice to vacate the lot. The Court of Appeals ruled that Kee was
a builder in good faith as he was unaware of the mix-up when he constructed the improvements. It was
in fact due to the negligence and wrongful delivery of CTTEI which included its principal the herein
petitioner. It further ruled that the award of rental was without basis. Pending the resolution of the case
at the Court of Appeals Jardinico and Kee entered into a deed of sale, wherein Lot 9 was sold to Kee. In
the said deed a provision stating that regardless of the outcome of the decision, such shall not be pursued
by the parties and shall be considered dismissed and without effect. The appellate court was not informed
of this deal.

Issue: Whether or not a lot buyer who constructs improvements on the wrong property
erroneously delivered by the owner’s agent, a builder in good faith

Held: Yes. Article 527 of the Civil Code provides the presumption that petitioner has the
burden of proving that Kee was a builder in bad faith. Kee may be made liable for the violation of
the contract with CTTEI but this may not be used as a basis of bad faith and as a sufficient ground to
negate the presumption of good faith. Jardinico is presently only allowed to file a complaint for unlawful
detainer. Good faith is based on the belief of the builder that the land he is building on is his and his
ignorance of any flaw or defect in his title. Since at the time when Kee constructed his improvements on
Lot 8, he was not aware that it was actually Lot 9 that was delivered to him. Petitioner also pointed out
that the contract of sale on installment covering lot 8 between it and KEE was rescinded long before the
the present action was instituted. This has no relevance on the liability of petitioner, as such fact does
not negate the negligence of its agent in pointing out the wronglot to kee. Such circumstance is relevant
only as it gives Jardinico acause of action for unlawful detainer against kee.

*Alviola v. Court of Appeals, 289 SCRA 537

Facts: On April 1, 1950, Victoria Sonjaconda Tinagan purchased from Mauro Tinagan two (2) parcels of
land Thereafter, Victoria and her son Agustin Tinagan, took possession of said parcels of land.

Sometime in 1960, petitioners occupied portions thereof whereat they built a copra dryer and put
up a store wherein they engaged in the business of buying and selling copra.

On June 23, 1975, Victoria died. On October 26, 1975, Agustin died, survived by herein private
respondents, namely his wife, Florencia Buling Vda. de Tinagan and their children Demosthenes, Jesus,
Zenaida and Josephine, all surnamed Tinagan.

On March 29, 1988, private respondents filed a complaint for recovery of possession against
Editha and her husband Porferio Alviola before the Regional Trial Court that they be declared absolute
owners of the said parcels of land, and that petitioners be ordered to vacate the same, to remove their
copra dryer and store, to pay actual damages (in the form of rentals), moral and punitive damages,
2-Executive DVOREF

litigation expenses and attorneys fees.

In their answer, petitioners contend that they own the improvements in the disputed properties
which are still public land; that they are qualified to be beneficiaries of the comprehensive agrarian
reform program and that they are rightful possessors by occupation of the said properties for more than
twenty years

Issue: WON the petitioners own the said parcels of land where the copra dryer and store are
located
34

Held: No. respondents counter that public land has been resolved by overwhelming evidence
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showing ownership and possession by the Tinagans and their predecessors-in-interest prior
 PROPERTY
to 1949. They further aver that they merely tolerated petitioners possession of the disputed
properties for a period which was less than that required for extraordinary prescription.

The private respondents adduced overwhelming evidence to prove their ownership and possession
of the two (2) parcels of land on portions of which petitioners built the copra dryer and a store. Private
respondents tax declarations and receipts of payment of real estate taxes, as well as other related
documents, prove their ownership of the disputed properties.

The record further discloses that Victoria S. Tinagan and her son, Agustin Tinagan, took
possession of the said properties in 1950, introduced improvements thereon, and for more than 40 years,
have been in open, continuous, exclusive and notorious occupation thereof in the concept of owners.

Petitioners own evidence recognized the ownership of the land in favor of Victoria Tinagan. In
their tax declarations, petitioners stated that the house and copra dryer are located on the land of Victoria
S. Tinagan/Agustin Tinagan. By acknowledging that the disputed portions belong to Victoria/Agustin
Tinagan in their tax declarations, petitioners claim as owners thereof must fail.

As correctly ruled by the respondent court, there was bad faith on the part of the petitioners when
they constructed the copra dryer and store on the disputed portions since they were fully aware that the
parcels of land belonged to Victoria Tinagan. And, there was likewise bad faith on the part of the private
respondents, having knowledge of the arrangement between petitioners and Victoria Tinagan relative to
the construction of the copra dryer and store.

Thus, for purposes of indemnity, Article 448 of the New Civil Code should be applied. However,
the copra dryer and the store, as determined by the trial court and respondent court, are transferable in
nature. Thus, it would not fall within the coverage of Article 448. As the noted civil law authority, Senator
Arturo Tolentino, aptly explains: To fall within the provision of this Article, the construction must be of
permanent character, attached to the soil with an idea of perpetuity; but if it is of a transitory character
or is transferable, there is no accession, and the builder must remove the construction. The proper
remedy of the landowner is an action to eject the builder from the land.

The private respondents action for recovery of possession was the suitable solution to eject
petitioners from the premises.

Petition dismissed.

*Heirs of R. Duran v. Uy, 344 SCRA 537

Facts: As far back as August 1970, a 128 hectare of land located in the barrios of Dunga and
Cahumayhumayan, Danao City. On December 27, 1973, the late Congressman Ramon Durano Sr.
together with his son Ramon Durano III, and the latter’s wide Elizabeth Hotchkins-Durano, instituted an
action for damages against spouses Angeles Sepulveda Uy and Emigdio Beng Sing Uy, Spouses Faustino
Alatan and Valeriana Garro, Spouses Rufino Lavador and Aurelia Mata, Silvestre Ramos, Hermogenes
Tito, Teotimo Gonzales, Primitiva Garro, Julian Garro, Ismael Garro, Bienvido Castro, Glicerio Alcala,
Felemon Lavador, Candelario Lumantao, Garino Quimbo, Justino Tito, Marcelino Gonzales, Salvador
Duyday, Venancia Repaso, Leodegracia Gonzales, Jose dela Calzada, Restituta Gonzales, and Cosme
Ramos before branch XVII of the then Court of First Instance of Cebu, Danao City.. Herein respondents
are the possessors of the subject parcel of land which they are cultivating, it was used to be owned by
CEPCO who later sold the same to Durano & Co. On September 15, 1990, Durano & Co sold the disputed
property to petitioner Ramon Durano III, who procured the registration of these lands in his name under
2-Executive DVOREF

TCT no. T-103 and T-104. The different parts of the entire land was bulldozed by the petitioner’s company
resulting to the destruction of plants and other products that were placed by the respondents. Hence, a
claim for damages was lodged against herein petitioner. The respondents presented tax declaration
covering the different areas of the parcel of land that is titled in each of them as proof that they are
entitled for the said damages.

Issue: (1)Whether or not the doctrine of piercing the veil of corporate entity can be applied
in order to make Durano & Co liable for damages.
(2)Whether or not respondents action for reconveyance will prosper.
35

Held: (1)Yes. The court of appeals applied the well-recognized principle of piercing the
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corporate veil, i.e. the law will regard the act of the corporation as the ac of its individual
 PROPERTY
stockholders, when it is shown that the corporation was used merely as an alter ego by those
persons in the commission of fraud or other illegal acts.

That the test in determining the applicability of the doctrine of piercing the veil of corporate fiction is as
follows:
1. Control, not mere majority or complete stock control, but complete domination, not only of
finances but of policy and business practice in respect to the transaction attacked so that the
corporate entity as to this transaction had at the time no separate mind, will or existence of its
own.
2. Such control must, have been used by the defendant to commit fraud or wrong, to perpetrate the
violation of statutory or other positive legal duty, on dishonest and unjust acts in contravention
of plaintiff’s legal right; and
3. The aforesaid control and breach of duty must proximately cause the injury or unjust loss
complained of.
The absence of any one of these elements prevents the piercing the corporate veil. In applying the
instrumentality or alter ego doctrine, the courts are concerned with reality not form, with how the
corporation operated and the individual defendants relationship to that operation.

(2) Yes. it being clear that the property, wrongfully registered in the name of petitioner
Durano III, has not passed to an innocent purchaser for value. Since petitioners knew fully
well the defect in their titles, they were correctly held by the Court of Appeals to be builders
in bad faith.

The Civil Code provides:

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 of indemnity.

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.

Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the
builder, planter or sower.
Based on these provisions, the owner of the land has three alternative rights: (1) to appropriate what
has been built without any obligation to pay indemnity therefor, or (2) to demand that the builder remove
what he had built, or (3) to compel the builder to pay the value of the land.[32] In any case, the landowner
is entitled to damages under Article 451, above cited.

We sustain the return of the properties to respondents and the payment of indemnity as being in
accord with the reliefs under the Civil Code.

The right of the owner of the land to recover damages from a builder in bad faith is clearly
provided for in Article 451 of the Civil Code. Although said Article 451 does not elaborate on the basis
for damages, the Court perceives that it should reasonably correspond with the value of the properties
lost or destroyed as a result of the occupation in bad faith, as well as the fruits (natural, industrial or
civil) from those properties that the owner of the land reasonably expected to obtain. We sustain the
view of the lower courts that the disparity between respondents affidavits and their tax declarations on
the amount of damages claimed should not preclude or defeat respondents right to damages, which is
guaranteed by Article 451.Moreover, under Article 2224 of the Civil Code
2-Executive DVOREF

MOVEABLE PROPERTY
CONJUNCTION/ADJUNCTION
Art. 466. Whenever two movable things belonging to different owners are, without bad faith, united in
such a way that they form a single object, the owner of the principal thing acquires the accessory,
indemnifying the former owner thereof for its value.
Art. 467. The principal thing, as between two things incorporated, is deemed to be that to which the
36

other has been united as an ornament, or for its use or perfection.

Art. 468. If it cannot be determined by the rule given in the preceding article which of the two things
Page

incorporated is the principal one, the thing of the greater value shall be so considered, and as between
 PROPERTY
two things of equal value, that of the greater volume. In painting and sculpture, writings, printed matter,
engraving and lithographs, the board, metal, stone, canvas, paper or parchment shall be deemed the
accessory thing.
Art. 469. Whenever the things united can be separated without injury, their respective owners may
demand their separation. Nevertheless, in case the thing united for the use, embellishment or perfection
of the other, is much more precious than the principal thing, the owner of the former may demand its
separation, even though the thing to which it has been incorporated may suffer some injury.
Art. 470. Whenever the owner of the accessory thing has made the incorporation in bad faith, he shall
lose the thing incorporated and shall have the obligation to indemnify the owner of the principal thing
for the damages he may have suffered. If the one who has acted in bad faith is the owner of the principal
thing, the owner of the accessory thing shall have a right to choose between the former paying him its
value or that the thing belonging to him be separated, even though for this purpose it be necessary to
destroy the principal thing; and in both cases, furthermore, there shall be indemnity for damages. If
either one of the owners has made the incorporation with the knowledge and without the objection of
the other, their respective rights shall be determined as though both acted in good faith.
Art. 471. Whenever the owner of the material employed without his consent has a right to an indemnity,
he may demand that this consist in the delivery of a thing equal in kind and value, and in all other
respects, to that employed, or else in the price thereof, according to expert appraisal.
Art. 475. In the preceding articles, sentimental value shall be duly appreciated.

COMMIXTION/CONFUSION
Art. 472. If by the will of their owners two things of the same or different kinds are mixed, or if the
mixture occurs by chance, and in the latter case the things are not separable without injury, each owner
shall acquire a right proportional to the part belonging to him, bearing in mind the value of the things
mixed or confused.
Art. 473. If by the will of only one owner, but in good faith, two things of the same or different kinds
are mixed or confused, the rights of the owners shall be determined by the provisions of the preceding
article. If the one who caused the mixture or confusion acted in bad faith, he shall lose the thing belonging
to him thus mixed or confused, besides being obliged to pay indemnity for the damages caused to the
owner of the other thing with which his own was mixed.
Art. 475. In the preceding articles, sentimental value shall be duly appreciated.

SPECIFICATION

Art. 474. One who in good faith employs the material of another in whole or in part in order to make a
thing of a different kind, shall appropriate the thing thus transformed as his own, indemnifying the owner
of the material for its value. If the material is more precious than the transformed thing or is of more
value, its owner may, at his option, appropriate the new thing to himself, after first paying indemnity for
the value of the work, or demand indemnity for the material. If in the making of the thing bad faith
intervened, the owner of the material shall have the right to appropriate the work to himself without
paying anything to the maker, or to demand of the latter that he indemnify him for the value of the
material and the damages he may have suffered. However, the owner of the material cannot appropriate
the work in case the value of the latter, for artistic or scientific reasons, is considerably more than that
of the material.
Art. 475. In the preceding articles, sentimental value shall be duly appreciated.

EXCEPTIONS(FC 119-120)
Art. 119. Whenever an amount or credit payable within a period of time belongs to one of the spouses,
2-Executive DVOREF

the sums which may be collected during the marriage in partial payments or by installments on the
principal shall be the exclusive property of the spouse. However, interests falling due during the marriage
on the principal shall belong to the conjugal partnership.
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
37

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
Page
 PROPERTY
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.

WEEK 6 CO-OWNERSHIP
DEFINITION
Art. 484. There is co-ownership whenever the ownership of an undivided thing or right belongs to
different persons. In default of contracts, or of special provisions, co-ownership shall be governed by the
provisions of this Title.
Art. 485. The share of the co-owners, in the benefits as well as in the charges, shall be proportional to
their respective interests. Any stipulation in a contract to the contrary shall be void. The portions
belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved.
Art. 486. Each co-owner may use the thing owned in common, provided he does so in accordance with
the purpose for which it is intended and in such a way as not to injure the interest of the co-ownership
or prevent the other co-owners from using it according to their rights. The purpose of the co-ownership
may be changed by agreement, express or implied.
Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining
thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage,
with respect to the co-owners, shall be limited to the portion which may be alloted to him in the division
upon the termination of the co-ownership.
Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other
co-owners 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.

Pardell v. Bartolome, 23 Phil 450

FACTS: Plaintiff Vicenta Ortiz and defendant Matilde Ortiz are the duly recognized natural daughters of
the spouses Miguel and Calixta who died in Vigan, Ilocos Sur. Prior to the death of their mother, she
executed a will whereby Matilde and Vicenta became the heirs of all her property. Subsequently,
defendants, without judicial authorization or extrajudicial agreement took over the administration and
enjoyment of the properties as well as collection of the rents, fruits and products thereof. Moreover
Matilde and her husband occupied the upper storey of the house and the room of the lower floor as an
office. With this, Vicenta demanded that she be given rental payments by Matilde in occupying the house
since she is a co-owner of the property not occupying the same and as such is entitled to its enjoyment
and/or fruits.

ISSUE: Whether or not Vicenta can collect rentals from Matilde who occupies and enjoy the
property alone as a co-owner.

HELD: No. The law grants each co-owner the right to use the property for the purpose intended
provided that the interest of the co-ownership must not be prevented from using it according
to their rights.

Matilde occupied the property owned in common in accordance with the purpose for which it is
intended. Records show no proof that she neither occasioned any detriment to the interest of the
community property nor prevented her sister from utilizing the said property in accordance to her right
2-Executive DVOREF

as a co-owner thereof. Matilde was excercising her right as a co-owner without being prejudicial to
Vicenta who could have also occupied her property had she wanted to.

Each co-owner of a property has the right pro-indiviso over the whole property and may use and
enjoy the same with no other limitation than that he shall not injure the interests of his co-owners, for
the reason that until a division is made, the respective part of each holder of a right as a co-owner cannot
be determined and every co-owner exercises joint ownership over the pro-indiviso property in addition
to his use and enjoyment of the same.
38
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 PROPERTY
Basa v. Aguilar, 117 SCRA 128

FACTS: This is an appeal by certiorari from the decision of the Court of First Instance of Pampanga in
Civil Case No. 2513, entitled "Olimpia Basa, et al., Plaintiffs, versus Genaro Puyat, et al., Defendants."
The seven (7) petitioners are owners co-pro-indiviso of an undivided ONE-HALF (1/2) share of a parcel
of land located in Barrio San Mateo, Arayat, Pampanga, with an area of 32,383 square meters, more or
less. Private respondents Genaro Puyat and Brigida Mesina were the owners of the other undivided half
of the same parcel of land.

On March 6, 1964, Genaro Puyat, with the marital consent of Brigida Mesina, sold his ONE-HALF
(1/2) share of the parcel of land in question for the price of ONE THOUSAND (P1,000.00) PESOS in favor
of private respondents Primo Tiongson and Macaria Puyat. Primo Tiongson is a son-in-law of Genaro
Puyat who is married to Macaria Puyat, a daughter of Genaro Puyat.

Seven (7) days later, on or March 13, 1964, the herein petitioners filed Civil Case No. 2513,
praying that they be allowed to exercise the right of redemption under Article 1620 of the Civil Code, for
which purpose they deposited with the court the sum of ONE THOUSAND PESOS (P1000.00) as
redemption money.

ISSUE: WON the petitioner is allowed to exercise the right of redemption

HELD: Legal redemption is in the nature of a privilege created by law partly for reasons of public policy
and partly for the benefit and convenience of the redemptioner, to afford him a way out of what might
be a disagreeable or inconvenient association into which he has been thrust. (10 Manresa, 4th Ed., 317.)
It is intended to minimize co-ownership. The law grants a co-owner the exercise of the said right of
redemption when the shares of the other owners are sold to "a third person." A third person, within the
meaning of this Article, is anyone who is not a co-owner. (Sentencia of February 7, 1944 as cited in
Tolentino, Comments on the Civil Code, Vol. V, p. 160.)

Private respondent Primo Tiongson is definitely not a co-owner of the land in question. He is not
even an heir of private respondents Genaro Puyat and Brigida Mesina, nor included in the "family
relations" of the said spouses as defined in Article 217 of the Civil Code. The circumstance that he is
married to Macaria Puyat, a daughter of Genaro Puyat and Brigida Mesina, is of no moment. The
conveyance to the Tiongson spouses was by onerous title, made during the lifetime of Genaro Puyat and
Brigida Mesina. The alleged inchoate right of succession from Genaro Puyat and Brigida Mesina, which
pertained only to Macaria Puyat, is thus out of the question. To deny to the petitioners the right of
redemption recognized in Article 1620 of the Civil Code is to defeat the purpose of minimizing co-
ownership and to contravene the public policy in this regard. Moreover, it would result in disallowing the
petitioners a way out of what, in the words of Manresa," might be a disagreeable or inconvenient
association into which they have been thrust."

Del Campo v. Abesia, 160 SCRA 379

Facts: This case involves a parcel of land, situated at the corner of F. Flores and Cavan Streets, Cebu
City. An action for partition was filed by plaintiffs in the CFI of Cebu. Plaintiffs and defendants are co-
owners pro indiviso of this lot in the proportion of and 1/3 share each, respectively. The trial court
appointed a commissioner in accordance with the agreement of the parties. ,the Id commissioner
conducted a survey, prepared a sketch plan and submitted a report to the trial court on May 29, 1976,
recommending that the property be divided into two lots: Lot 1161-A with an area of 30 square meters
for plaintiffs and Lot No. 1161-B with an area of 15 square meters for the defendants. The houses of
2-Executive DVOREF

plaintiffs and defendants were surveyed and shown on the sketch plan. The house of defendants occupied
the portion with an area of 5 square meters of Lot 1161-A of plaintiffs. The parties manifested their
conformity to the report and asked the trial court to finally settle and adjudicate who among the parties
should take possession of the 5 square meters of the land in question.

ISSUE: Whether or Not Article 448 of the Civil Code is applicable to a builder in good faith
when the property involved is owned in common.

HELD: When the co-ownership is terminated by the partition and it appears that the house of defendants
39

overlaps or occupies a portion of 5 square meters of the land pertaining to plaintiffs which the defendants
obviously built in good faith, then the provisions of Article 448 of the new Civil Code should apply.
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 PROPERTY
Manresa and Navarro Amandi agree that the said provision of the Civil Code may apply even when there
was co-ownership if good faith has been established.

Applying the aforesaid provision of the Civil Code, the plaintiffs have the right to appropriate said
portion of the house of defendants upon payment of indemnity to defendants as provided for in Article
546 of the Civil Code. Otherwise, the plaintiffs may oblige the defendants to pay the price of the land
occupied by their house. However, if the price asked for is considerably much more than the value of the
portion of the house of defendants built thereon, then the latter cannot be obliged to buy the land. The
defendants shall then pay the reasonable rent to the plaintiff upon such terms and conditions that they
may agree. In case of disagreement, the trial court shall fix the terms thereof. Of course, defendants
may demolish or remove the said portion of their house, at their own expense, if they so decide.
Article 448 of the New Civil Code provides as follows:

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.

*Bailon-Casilao v. Court of Appeals, 160 SCRA 738

FACTS:
 The fate of petitioners' claim over a parcel of land rests ultimately on a determination of whether or
not said petitioners are chargeable with such laches as may effectively bar their present action.

 There is a parcel of land in the names of the Bailons (Rosalia, Gaudencio, Sabina Bernabe, Nenita and
Delia) as coowners, each with a 1/6 share.
o Gaudencio and Nenita are now dead, (Nenita being represented in this case by her children)
o Bernabe went to China and had not been heard from since

 It appears that Rosalia and Gaudencio sold a portion of the land to Donato Delgado.

 Rosalia alone, then sold the remainder of the land to Ponciana Aresgado de Lanuza.
o On the same date, Lanuza acquired from Delgado land which the Delgado had earlier acquired
from Rosalia and Gaudencio.

 Husband John Lanuza, acting under a special power of attorney given by his wife, Ponciana, sold the
two parcels of land to Celestino Afable, Sr.

 In all these transfers, it was stated in the deeds of sale that the land was not registered under the
provisions of Act No. 496 when the fact is that it is.
o It appears that the land had been successively declared for taxation first, in the name of
Ciriaca Dellamas, mother of the co-owners, then in the name of Rosalia Bailon, then in that of Donato
Delgado, then in Ponciana de Lanuza's name, and finally in the name of Celestino Afable, Sr.

 The petitioners in this case, the Bailons, filed a case for recovery of property against Celestino Afable.
2-Executive DVOREF

 In his answer, Afable claimed that he had acquired the land in question through prescription and said
that the Bailons are guilty of laches.

LC declared Afable co-owner because he validly bought 2/6 of the land (the shares of Rosalia and
Gaudencio)

 CA affirmed. Prescription does not apply against the Bailons because they are co-owners of the
original sellers. But, an action to recover may be barred by laches.
o CA held the Bailons guilty of laches and dismissed their complaint
40

Issue: Applicability of the doctrine of laches

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 PROPERTY
Ratio:
 Initially, a determination of the effect of a sale by one or more co-owners of the entire property held
in common without the consent of all the co-owners and of the appropriate remedy of the aggrieved co-
owners is required.

 The rights of a co-owner of a certain property are clearly specified in NCC 493:

 Art. 493. Each co-owner shall have the full ownership of his part and of the acts and benefits pertaining
thereto, and he may therefore alienate assign or mortgage it and even substitute another person in its
enjoyment, except when personal rights are involved. But the effect of the alienation or mortgage, with
respect to the co-owners, shall be limited to the portion which may be allotted to him in the division
upon the termination of the co-ownership
 SC has already ruled in other cases that even if a co-owner sells the whole property as his, the sale
will affect only his own share but not those of the other co-owners who did not consent to the sale
o By virtue of the sales made by Rosalia and Gaudencio, which are valid with respect to their
proportionate shares, and the subsequent transfers which culminated in the sale to private respondent
Celestino Afable, Afable thereby became a co-owner of the disputed parcel of land

 Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner
without the consent of the other co-owners is not null and void. o However, only the rights of the co-
owner-seller are transferred, thereby making the buyer a co-owner of the property.

Re: Proper action

 The proper action in cases like this is not for the nullification of the sale or for the recovery
of possession but the division of the common property

 Neither recovery of possession nor restitution can be granted since the buyers are legitimate possessors
in joint ownership of the common property claimed

Re: Prescription
 Here, prescription cannot be invoked.

 Pursuant to NCC 494, no co-owner shall be obliged to remain in the co-ownership. Such co-owner may
demand at anytime the partition of the thing owned in common, insofar as his share is concerned.

 In Budiong v. Bondoc , SC has interpreted that provision to mean that the action for partition is
imprescriptible or cannot be barred by prescription. For NCC 494 explicitly declares: No prescription shall
lie in favor of a co-owner or co- heir so long as he expressly or impliedly recognizes the co-ownership.

 Also, the disputed parcel of land being registered under the Torrens System, the express provision of
Act No. 496 that “no title to registered land in derogation to that of the registered owner shall be acquired
by prescription or adverse possession” is applicable.

 Prescription will not lie in favor of Afable as against the Bailons who remain the registered owners of
the parcel of land.

Re: Argument of Bailons that as to the children who represent their deceased mother, Nenita,
prescription lies
 It is argued, that as to the children who are not the registered co-owners but merely represent their
deceased mother, prescription lies. (citing Pasion v. Pasion: "the imprescriptibility of a Torrens title can
2-Executive DVOREF

only be invoked by the person in whose name the title is registered" and that 'one who is not the
registered owner of a parcel of land cannot invoke imprescriptibility of action to claim.'

 Reliance on the previous case is wrong.

o The ruling there applies only against transferees other than direct issues or heirs or to complete
strangers. The reason for that is: if prescription is unavailing against the registered owner, it must be
equally unavailing against the owner’s hereditary successors, because they merely step into the shoes
of the decedent.
41

Re: Laches
 Laches is also unavailing as a shield against the action of petitioners Bailon.
Page

o There are 4 basic elements of laches

 PROPERTY
1) Conduct on the part of the defendant or of one under whom he claims, giving rise to the
situation of which complaint is made and for which the complainant seeks a remedy;
2) Delay in asserting the corporations complainant's rights, the complainant having had
knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute
suit;
3) Lack of knowledge or notice on the part of the defendant that the complainant would assert
the right on which he bases his suit; and,
4) Injury or prejudice to the defendant in the event relief is accorded to the complainant, or the
suit is not held to be barred o First and last elements are present. o Second and third elements are
missing.

 The second element speaks of delay in asserting the complainant's rights. o However, the mere fact of
delay is insufficient to constitute, laches. o It is required that (1) complainant must have had knowledge
of the conduct of defendant or of one under whom he claims and (2) he must have been afforded an
opportunity to institute suit. o This court has pointed out that laches is not concerned with the mere
lapse of time.

 Laches is defined as the failure or neglect, for an unreasonable length of time to do that which by
exercising due diligence could or should have been done earlier; it is negligence or omission to assert a
right within a reasonable time warranting a presumption that the party entitled to assert it either has
abandoned it or declined to assert it.
o The doctrine of "laches" or of "stale demands" is based upon grounds of public policy which
requires for the peace of society, the discouragement of stale claims and unlike the statute of limitations,
is not a mere question of time but is principally a question of inequity or unfairness of permitting a right
or claim to be enforced or asserted.

 While there was delay in asserting the Bailon’s rights, such delay was not attended with any knowledge
of the sale nor with any opportunity to bring a suit.
o In the first place, the Bailons had no notice of the sale made by their eldest sister. o In the
second place, they were not afforded an opportunity to bring suit because they were kept in the dark
about the transactions entered into by their sister. It was only when Delia returned that she found out
about the sales and immediately, she and her siblings filed the present action for recovery of property.

 The third element of laches is absent.

o There was no lack of knowledge o It is actually Afable who is guilty of bad faith in purchasing
the property as he knew that the property was coowned by six persons and yet, there were only two
signatories to the deeds of sale and no special authorization to self was granted to the two sellers by the
other co-owners.

 A person dealing with a registered land has a right to rely upon the face of the Torrens certificate of
title and to dispense with the need of inquiring further, except when the party concerned has actual
knowledge of facts and circumstances that would impel a reasonably cautions man to make such inquiry.

 Also, petitioners Bailon are relatives of his wife. As a gesture of good faith, he should have contacted
the Bailons who were still listed as co-owners in the certificate of title which was already in his possession
even before the sale.
o In failing to exercise even a minimum degree of ordinary prudence, he is deemed to have
bought the lot at his own risk.
o Hence any prejudice or injury that may be occasioned to him by such sale must be borne by
him. Decision set aside
2-Executive DVOREF

*s v. Lopez, 168 SCRA 431

FACTS: This case exemplifies the Filipino custom of keeping inherited property in a prolonged juridical
condition of co-ownership.

Lorenzo Lopez owned Lot 4685 of the Cadastral survey of Villasis, Pangasinan with an area of
69,687 square meters as evidenced by Original Certificate of Title No. 15262.1 In December, 1931,
Lorenzo Lopez died,2 leaving said property to his wife, Tomasa Ramos and six (6) children. From that
42

time on, the heirs of Lorenzo Lopez did not initiate any moves to legally partition the property.
Page
 PROPERTY
More than twenty-one years later, or on February 11, 1953, Tomasa Ramos and her eldest son,
Candido Lopez, executed a deed of absolute sale of the “eastern undivided four thousand two hundred
and fifty seven-square meters (4,257) more or less, of the undivided portion of (their) interests, rights
and participation” over Lot 4685, in favor of the spouses Melecio Oliveras and Aniceta Minor, in
consideration of the amount of one thousand pesos (P1,000).

On the same day, Tomasa and Candido executed another deed of absolute sale of the “undivided”
four thousand two hundred and fifty-seven (4,257) square meters of the “eastern part” of Lot 4685 in
favor of the spouses Pedro Oliveras and Teodora Gaspar, also in consideration of P1,000.4 Each of the
said documents bear the thumbmark of Tomasa and the signature of Candido.

In his affidavit also executed on February 11, 1953, Candido stated that a month prior to the
execution of the deed of sale in favor of Melecio Oliveras, he offered his: “undivided portion” of Lot 4685
to his “adjacent owners” but none of them was “in a position to purchase” said property.5

Since the execution of the two deeds of absolute sale, the vendees, brothers Melecio and Pedro,
had been paying the real property taxes for their respectively purchased properties.6 They also had been
in possession of their purchased properties which, being planted to palay and peanuts, were segregated
from the rest of Lot 4685 by dikes.

More than thirteen years later or on November 21, 1966, the counsel of the Oliveras brothers
wrote the heirs of Lorenzo Lopez reminding them of the Oliverases’ demands to partition the property
so that they could acquire their respective titles thereto without resorting to court action, and that,
should they fail to respond, he would be forced to file a case in court.8 Apparently, the Lopezes did not
answer said letter since on December 15, 1966, the Oliveras brothers and their wives filed a complaint
for partition and damages9 in the Court of First Instance of Pangasinan.10

The Oliverases stated in their complaint that possession of the disputed properties was delivered
to them with the knowledge and consent of the defendants; that they had been paying the real estate
taxes thereon; that prior to the sale, said properties were offered to the other co-owners for sale but
they refused to buy them; that on February 18, 1953, the transactions were duly annotated and entered
in the Memorandum of encumbrances of OCT No. 15262 as adverse claims; and tha

*Tagarao v. Garcia, 67 Phil 5, G.R. No. L-40064, December 4, 1934

FACTS:

Plaintiffs : Siblings Resurreccion (RT), Buenaventura (BT), and Serafin (ST) Tagarao (grandchildren
of Ventura Garcia who is the brother of defendant Marcos Garcia and co-owner of said land in question)
Defendants: Marcos Garcia (MG), Paula Tabifranca (PT), Margarita Garcia, Rosario Garcia, Dolores
Rufino, Eleuterio Rufino

Timeline:

July 20, 1900 – the land in question was sold to brothers Ventura and Marcos Garcia. When the
two brothers purchased said land, the defendant MG was single. The defendant PT is only his wife
by a second marriage. MG had by his first wife three children who are the defendants Margarita
Garcia, Rosario Garcia and the deceased Catalina Garcia, mother of the defendant Dolores Rufino.
Ventura Garcia (deceased) had two children: Merced Garcia (mother of the plaintiffs) and Claro
Garcia.
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July 20, 1904 – alleged date when MG acquired the title to the land in question. Take note that
while Merced Garcia was still living, or at least until June, 1914, the defendant Marcos Garcia had
been delivering to her and her brother Claro Garcia their share of the products harvested from
the land in question.

May 17, 1918 – after the death of Merced Garcia (1914) and her husband Rafael Tagarao, MG
and PT obtained original certificate of title No. 10009 (title to the land in question), to which
plaintiff RT did not contest nor moved to protect her right like she did years later. The certificate
states that half the land belonged to MG and half belonged to PT who was his spouse at that time
43

(second marriage).
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 PROPERTY
December 31, 1921 – defendant Paula Tabifranca, second wife of the defendant Marcos Garcia,
sold her rights to the defendants Margarita Garcia, Rosario Garcia and Dolores Rufino, her
husband’s daughters and granddaughter. This was agreed upon between her and her husband
Marcos Garcia to prevent the land, part of which belonged to her under said certificate of title,
from ever passing to her son by her first marriage named Juan Tabigui, as she was already a
widow when she contracted marriage with said Marcos Garcia.

October 10, 1927 – the lower court rendered a judgment ordering MG to segregate four hectares
of the land in question to be delivered to Claro Garcia and to pay to the latter as indemnity 90
cavans of palay, or the value thereof in the sum of P360. This is after Claro Garcia submitted a
complaint after MG refused to provide the promised part of the title to Claro after the defendant
secured the certificate stating that the land in question belonged to him and his wife.

October 14, 1928 – Plaintiffs filed a complaint praying for the Deeds of transfer of one-fourth
(¼) of the land known as lot No. 510 of cadastral case No. 11 of the municipality of Isabela,
Occidental Negros (G. L. R. O. Cad. Record No. 100), which was formerly covered, first by original
certificate of title No. 10009 (Exhibit M), later by transfer certificate of title No. 3001 (Exhibit 3),
and at present by transfer certificate of title No. 8782 (Exhibit 7), all of the office of the register
of deeds of said Province of Occidental Negros.

February 13, 1929 – defendants filed a demurrer stating that the lower courts did not have
jurisdiction to which the lower court overruled.

June 9, 1931 – MG and PT filed a petition of even date stating that they had no more interest in
the case, having sold their respective participations to the two Garcias and two Rufinos and
praying in succession that they be absolved from the complaint.

July 15, 1931 – MG and PT filed a motion to include Eleuterio Rufino among the defendants and
on the following day the lower court, granting the motion, ordered the inclusion of Eleuterio Rufino
in the case as one of the defendants.

July 29, 1931 and March 8, 1932 – plaintiffs, after being ordered by the lower court, amended
and re-amended complaint due to respondents’ demurrer. They included a prayer that should the
defendants fail to deliver to them the required portion of the land in question, the latter be ordered to
pay them the value thereof based on the assessed value of the whole property, and that they furthermore
be indemnified for the value of 1,407 cavans of palay at the rate of P4 a cavan, alleging that said 1,407
cavans represented their share in the products of said land from the time the defendants took exclusive
possession thereof.
October 28, 1932 – defendants filed their answer wherein the first two defendants (MG and PT)
alleged that although they formerly were the absolute and exclusive owners of the land in question they
already ceased to be so at that time, having sold the half belonging to PT to the defendants Margarita
Garcia, Rosario Garcia and Dolores Rufino, and the other half belonging to MG to Eleuterio Rufino.
November 19, 1931 – the defendant Eleuterio Rufino denied each and every allegation, alleging
as a special defense that one half of the land in question was sold by MG and purchased by him in good
faith, paying the corresponding price therefore.
Lower Court’s Ruling – After due trial the lower court rendered judgment ordering the
defendants to deliver to the plaintiffs one fourth of the land in question after executing the necessary
deeds of transfer in favor of said plaintiffs or, in lieu thereof, to indemnify them in the sum of P3,882
plus the value of 1,000 cavans of palay at P3 a cavan, with costs. In said judgment said court "declared
the deeds of sale executed by Marcos Garcia in favor of the defendant Eleuterio Rufino and by Paula
Tabifranca in favor of the defendants Margarita Garcia, Rosario Garcia and Dolores Rufino, null and void."

Issue/s: WON the three plaintiffs are entitled to what they jointly pray for in their
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complaint.

Held: No. The Court ruled that only plaintiffs S T and B T are entitled to compel the
defendants since at the time that the action was brought, both of them were entitled to the
exception granted by the provisions of section 42 of Act No. 190. RT’s claim that she should also
enjoy the same rights as his siblings was denied. The court said that her contention that the statute of
limitations should also apply to her is not tenable. The reason being, the purpose statute of limitations
is no other than to protect the diligent and vigilant, not the person who sleeps on his rights, forgetting
44

them and taking no trouble of exercising them one way or another to show that he truly has such rights.
Her rights as a co-owner had prescribed when she did not exercise her right when MG allegedly acquired
Page

said titles to the land in question like Claro Garcia (her uncle) did.
 PROPERTY

The Court did not treat the rights of the plaintiffs as joint stating that “It cannot be argued that
the separation of rights among the plaintiffs was not practicable in the sense that one of them could not
have disposed of or alienate his legal portion of the thing possessed in common without the consent of
the others, because the law provides otherwise. It says: Every part owner shall have the absolute
ownership of his part, and of the fruits and benefits derived there from, and he may, therefore,
sell, assign, or mortgage it, and even substitute another person in its enjoyment, unless
personal rights are involved, but the effect of the sale or mortgage, with respect to the other
participants, shall be limited to the share which may be allotted him in the partition upon the
dissolution of the community.”

Furthermore, the Court said that “That the separation of rights and interests among the
plaintiffs was practicable is further evidenced by the fact that Claro Garcia with whom they
were entitled to one-half of the land in question could recover his legal portion thereof from
Marcos Garcia, although certainly not in its entirety, having failed to assert his rights.” Unlike
the plaintiff RT, Claro Garcia clearly contested MG’s claim the soonest time possible, the point being that
he did not sleep on his rights unlike RT.

*Rivera v. People's Bank, 73 SCRA 546

Edgar Stephenson executed a survivorship agreement in favor of Ana Rivera, his housekeeper.
The agreement provided that Stephenson and Rivera will be the joint owners of the money deposited in
the account with People’s bank and trust Co., and upon the death of either one of the party, the survivor
will be the sole owner of the balance in said account. Stephenson died, and pursuant to the survivorship
agreement, Rivera tried to claim the balance of the joint account. The bank, however, refused.

Rivera filed a complaint to recover the money, but the trial court dismissed the complaint, ruling
that the agreement is either a power of attorney or a donation mortis causa, the requirements of which
were not satisfied.

The Court, in finding the survivorship agreement valid on its face, characterized it as an aleatory
contract, the transfer of the ownership predicated upon the condition of who might die first (in other
words, the other party assumes the risk of losing the property if he dies earlier/the other party gets the
property in the chance that he outlives the other).

The Court likewise found the agreement valid as-applied, since there was no fraud in its execution

DOCTRINE:
There is nothing in the case which speaks of Partnership, so the doctrine, as herein
stated, is an inference based on my appreciation of this case’s value. A joint deposit or joint
bank account is not a partnership. The right of survivorship which is a recognized stipulation
in joint deposits is not applied in partnerships sicte in the latter, upon the death of a partner,
thee state or heirs of the deceased partner has the right to recover his contributing capital
and any fruits and interests therein

*Gatchalian v. Collector of Customs, 67 Phil 666

Facts: Plaintiffs are all residents of the municipality of Pulilan, Bulacan, and that defendant is the
Collector of Internal Revenue of the Philippines.
2-Executive DVOREF

Plaintiffs, in order to enable them to purchase one sweepstakes ticket valued at two pesos (P2),
subscribed and paid therefor the amounts as follows: “immediately thereafter plaintiffs purchased from
one of the duly authorized agents of the National Charity Sweepstakes Office one ticket bearing No.
178637”

The said ticket was registered in the name of Jose Gatchalian and Company as a result, the above-
mentioned ticket bearing No. 178637 won one of the third prizes in the amount of P50,000 and which
check was cashed by Jose Gatchalian & Company.
45

Gatchalian was required by income tax examiner Alfredo David to file the corresponding income
Page

tax return covering the prize won by Jose Gatchalian & Company and that the said return was signed by
 PROPERTY
Gatchalian. Defendant made an assessment against requesting the payment of the sum of P1,499.94 to
the deputy provincial treasurer of Pulilan, Bulacan.

Plaintiffs, through their attorney, sent to defendant a reply requesting exemption from the
payment of the income tax to which reply there were enclosed fifteen (15) separate individual income
tax returns filed separately by each one of the plaintiffs. Defendant denied plaintiffs' request for
exemption from the payment of tax in view of the failure of the plaintiffs to pay the amount of tax
demanded by the defendant, notwithstanding subsequent demand issued a warrant of distraint and levy
against the property of the plaintiffs.
Plaintiffs, through Gregoria Cristobal, Maria C. Legaspi and Jesus Legaspi, paid under protest the
sum of P601.51 as part of the tax and requested defendant that plaintiffs be allowed to pay under protest
the balance plaintiffs demanded upon defendant the refund of the total sum of P1,863.44 paid under
protest by them but that defendant refused and still refuses to refund the said amount notwithstanding
the plaintiffs' demands.

Issues: Whether the plaintiffs formed a partnership, or merely a community of property

without a personality of its own

Ruling: There is no doubt that if the plaintiffs merely formed a community of property the latter is
exempt from the payment of income tax under the law. But according to the stipulated facts the plaintiffs
organized a partnership of a civil nature because each of them put up money to buy a sweepstakes ticket
for the sole purpose of dividing equally the prize which they may win, as they did in fact in the amount
of P50,000 (article 1665, Civil Code).

The partnership was not only formed, but upon the organization thereof and the winning of... the
prize, Jose Gatchalian personally appeared in the office of the Philippine Charity Sweepstakes, in his
capacity as co-partner, as such collected the prize, the office issued the check for P50,000 in favor of
Jose Gatchalian and company, and the said partner, in the same capacity, collected the said check. All
these circumstances repel the idea that the plaintiffs organized and formed a community of property
only.

Having organized and constituted a partnership of a civil nature, the said entity is the one bound
to pay the income tax which the defendant collected. There is no merit in plaintiffs' contention that
the tax should be prorated among them and paid individually, resulting in their exemption
from the tax.

SPECIAL RIGHTS OF CO-OWNERS

Art. 487. Any one of the co-owners may bring an action in ejectment.
Art. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses
of preservation of the thing or right owned in common and to the taxes. Any one of the latter may
exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent
to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-
ownership.
Art. 489. Repairs for preservation may be made at the will of one of the co-owners, but he must, if
practicable, first notify his co-owners of the necessity for such repairs. Expenses to improve or embellish
the thing shall be decided upon by a majority as determined in Article 492.
Art. 490. Whenever the different stories of a house belong to different owners, if the titles of ownership
do not specify the terms under which they should contribute to the necessary expenses and there exists
no agreement on the subject, the following rules shall be observed: (1) The main and party walls, the
roof and the other things used in common, shall be preserved at the expense of all the owners in
2-Executive DVOREF

proportion to the value of the story belonging to each; (2) Each owner shall bear the cost of maintaining
the floor of his story; the floor of the entrance, front door, common yard and sanitary works common to
all, shall be maintained at the expense of all the owners pro rata; (3) The stairs from the entrance to
the first story shall be maintained at the expense of all the owners pro rata, with the exception of the
owner of the ground floor; the stairs from the first to the second story shall be preserved at the expense
of all, except the owner of the ground floor and the owner of the first story; and so on successively.
Art. 491. None of the co-owners shall, without the consent of the others, make alterations in the thing
owned in common, even though benefits for all would result therefrom. However, if the withholding of
the consent by one or more of the co-owners is clearly prejudicial to the common interest, the courts
46

may afford adequate relief.

Art. 492. For the administration and better enjoyment of the thing owned in common, the resolutions
Page

of the majority of the co-owners shall be binding. There shall be no majority unless the resolution is
 PROPERTY
approved by the co-owners who represent the controlling interest in the object of the co-ownership.
Should there be no majority, or should the resolution of the majority be seriously prejudicial to those
interested in the property owned in common, the court, at the instance of an interested party, shall order
such measures as it may deem proper, including the appointment of an administrator. Whenever a part
of the thing belongs exclusively to one of the co-owners, and the remainder is owned in common, the
preceding provision shall apply only to the part owned in common.
Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at
any time the partition of the thing owned in common, insofar as his share is concerned. Nevertheless,
an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be
valid. This term may be extended by a new agreement. A donor or testator may prohibit partition for a
period which shall not exceed twenty years. Neither shall there be any partition when it is prohibited by
law. No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long
as he expressly or impliedly recognizes the co-ownership.
Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all
of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the
sale, provided they do so within the period of one month from the time they were notified in writing of
the sale by the vendor.
Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other
co-owners 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.
Art. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days
from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of
sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor
that he has given written notice thereof to all possible redemptioners. The right of redemption of co-
owners excludes that of adjoining owners.

Melencio v. Dy Tiao Lay, 55 Phil 100

FACTS: The plaintiffs brought the present action against the defendant-appellee for the recovery of the
possession of a parcel of land in Cabanatuan. The plaintiffs also demand an increased monthly rental for
the use and occupation of the parcel; and if it is found that the said appellee was occupying the land by
virtue of a contract of lease, such contract should be declared null and void for lack of consent,
concurrence, and ratification by the owners.

The defendant alleged that he was occupying the said parcel land by virtue of a contract of lease
executed in favor of his predecessor-in-interest, and which contract is still in force; That the mother of
the plaintiffs, as administratpr of the estate of one of the original co-owners of the parcel of land,
recognized and ratified the existence and validity of the contract through the execution of a public
document, and by collecting from the assignees of the original lessee the monthly rent. It appears from
the evidence that the land in question was originally owned by Julian Melencio.

He died leaving his widow, Ruperta Garcia, and his 5 children (Juliana, Ramon, Ruperta, Pedro,
and Emilio). Emilio also died, his minor son Jose P. Melencio succeeded to his interest in the said parcel
of land by representation. A question has been raised if the land was community property, but the
evidence is undisputed that Ruperta Garcia in reality held nothing but a widow's usufruct in the land.

Ruperta Garcia, and children executed a contract of lease of the land in favor of Yap Kui Chin, but
2-Executive DVOREF

neither Jose nor Ramon were mentioned in the lease. The term of the lease was for 20 years, extendible
for a like period at the option of the lessee. The lessee took possession of the parcel in question and
erected the mill as well as the necessary buildings, and in matters pertaining to the lease, he dealt with
Pedro Melencio who acted as manager of the property held in common by the heirs of Julian Melencio.

The original lessee died and the lease was transferred twice more before it came into the hands
of Dy Tiao Lay. Ramon (one of Julian’s children) died, his widow Liberata, was appointed administrator
of his estate. The land which includes the parcel in question was registered under the Torrens system.
The lease was not mentioned in the certificate of title, but it was stated that one house and three
47

warehouses on the land were the property of Yap Kui Chin. The heirs of Julian made an extrajudicial
partition of parts of the inheritance. The land in question fell to the share of
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the children of Ramon, who are the original plaintiffs in the present case.
 PROPERTY

Their mother, Liberta, as administrator, collected the rent for the lease at P20.20 per month until
1926, when she demanded of the lessee that the rent should be increased to P300 per month, and she
was then informed by the defendant that a written lease existed and that according to the terms, the
defendant was entitled to an extension of the lease at the original rental. The plaintiffs denied any
knowledge of the existence of such a contract of lease which was executed without their consent and
was void.

A copy of the contract of lease was found among the papers of the deceased Pedro. This action
was brought to SET ASIDE THE LEASE and to RECOVER POSSESSION OF THE LAND. Upon trial, the court
below rendered judgment in favor of the defendant declaring the lease valid.

ISSUE: Was the lease valid? (NO)

HELD: The contention of the appellants is that the contract of lease (Exhibit C) is null and void,
among the reason is that calls for an alteration of the property in question, therefore ought
to have been signed by all the co-owners as by law required in the premises. The first
proposition is based on article 397 which provides that "none of the owners shall, without the
consent of the others, make any alterations in the common property even though such
alterations might be advantageous to all." SC does not think that the alterations are of sufficient
importance to nullify the lease, especially so since none of the co-owners objected to such alterations
until over twenty years after the execution of the contract of lease. The court below based its decision
on the case of Enriquez vs. A. S. Watson & Co but an examination of the Enriquez case will show that it
differs materially from the present.

In that case all of the co-owners of a lot and building executed a contract of lease of the property
for the term of eighteen years in favor of A. S. Watson & Co.; one of the co-owners was a minor, but he
was represented by his legally appointed guardian, and the action of the latter in signing the lease on
behalf of the minor was formally approved by the CFI.

In the present case only a small majority of the co-owners executed the lease in
question. The contract of lease here in question is null and void. It has been suggested that
by reason of prescription and by acceptance of benefits under the lease, the plaintiffs are
estopped to question the authority for making the lease. There is no proof that Ramon
Melencio and his successor over had knowledge of the existence of the lease in question prior
to 1926. We cannot by mere suspicion conclude that they were informed of the existence of
the document and its terms; it must be remembered that under a strict interpretation of the
terms of the lease, the lessees could remain indefinitely in their tenancy unless the lessors
could purchase the mill and the buildings on the land.

In such circumstances, better evidence than that presented by the defendant in regard to the
plaintiffs' knowledge of the lease must be required. The fact that Ramon during his lifetime received his
share of the products of land owned in common with his coheirs is not sufficient proof of knowledge of
the existence of the contract of lease when it is considered that the land in question was only a small
portion of a large tract which Pedro was administering in connection with other community property. The
appealed judgment as to the validity of the lease is therefore REVERSED, and it is ordered that the
possession of the land in controversy be delivered to the intervenor Liberata as administrator of the
estate of the deceased Ramon Melencio. It is further ordered that the defendant pay to said administrator
a monthly rent of P50 for the occupation of the land from May 1st, 1926, until the land is delivered to
the administrator. The sum of P272 demanded by the defendant in his counterclaim may be deducted
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from the total amount of the rent due and unpaid. The buildings erected on the land by the defendant
and his predecessors in interest may be removed by him, or otherwise disposed of, within six months
from the promulgation of this decision.

Lavadia v. Cosme, 72 Phil 196, GR No. L-47996 May 9, 1941

DOCTRINE:
1. Even among co-owners of a thing, one of them may be the depository, and when he is, he is subject
to the same obligations imposed by law on all depository with respect to the preservation of the thing
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with the care, diligence and interest of a good father.

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2. For the administration and better enjoyment of thing owned in common, according to article 398 of
the Civil Code, it is mandatory that there be an agreement of the majority of the participants (owners).

FACTS: This is an appeal of the court of First Instance Laguna’s decision about possession and custody
of the jewelry adorning image of Pagsanjan’s patroness, Our Lady of Guadalupe consisting of a
diamond-encrusted golden crown, a necklace with diamond and precious stones, a belt encrusted
with precious stones and diamonds, a golden collar completely encrusted with precious stones,
a golden bracelet encrusted with precious stones and diamonds, etc.

In 1880, six pious ladies from (then municipality of) Pagsanjan, Laguna named Martina, Matea,
Isabel, Paula, Pia and Engracia all surnamed Lavadia, agreed that with their own money, to contribute
the above mentioned jewelries. Except for the plaintiff Engracia, the defendants are the legal heirs of
her late sisters Isabel, Matea and Martina. Meanwhile, defendant Rosario Cosme de Mendoza and her
co-defendants are legal heirs and descendants of her late sister Paula.

Also, the original owners (Engracia and her sisters) agreed that these gems would be left with Pia
Lavadia. Pia had the jewels’ custody until her death in 1882 after which her sister Paula succeeded her.
On Paula’s death, the preservation and custody of such jewelry was given to her husband Pedro Rosales
and after him, their daughter Paz Rosales took custody, preservation and care of the jewelry.

After Paz death, the custody, preservation and management of the jewels and the
crown passed to her husband Baldomero Cosme, then to Manuel Soriano and eventually
succeeded by the defendant Rosario Cosme de Mendoza. In fact, from 1880 up to the present time, the
jewels were used to decorate the image of Our Lady of Guadalupe in Pagsanjan every year and none of
them who keep or guard these jewels claimed to possess as the sole owner. Defendant Rosario Cosme
de Mendoza and her co-defendants stated that they did not intend to (solely) own the jewelries.

Rosario, who was the latest custodian of the jewelries, entrusted those jewels to the Catholic
Bishop of Lipa, subject to the condition that the deposited things be used to adorn of Our Lady of
Guadalupe’s image but according to the will of their owners. All these jewels are now locked and
deposited in the Bank of the Philippine Islands because Rosario Cosme de Mendoza deposited those
things there. The descendants of the Isabel, Martina and Matea Lavadia as well as the plaintiff Engracia
Lavadia filed a case in CFI Laguna to claim possession and custody of the jewels.

The lower trial court ruled against the defendants, stating that the plaintiffs are entitled to fourth-
sixths’4/6 pro indiviso share and the defendants are entitled to the two sixths 2/6 pro indiviso share of
the jewelry. It ruled that Rosario Cosme de Mendoza has to deliver the jewelries to the plaintiff and
one of the previous owners Engracia. Dissatisfied with the trial court’s decision, the defendants appealed
the decision to the Supreme Court.

ISSUES:
1) Whether Ramona was a depositary and therefore obligated to return the jewelries to the
owners even if she is a co-owner? (YES)
2) Whether the plaintiffs constitute the majority of the co-owners and therefore can elect
who has custody of the property owned in common? (YES)
3) Whether, assuming that Ramona is a depositary, the property cannot be withdrawn as she
has complied faithfully in performing their duties as repository? (NO, it can be withdrawn)

HELD:
1) YES. The contract which existed between the first owners of the jewels at issue and the first person
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who had their custody, was a contract of deposit.

 According to this contract as defined in Articles 1758 and following the Civil Code, Pia Lavadia first,
and afterwards Paula Lavadia and then her descendants, one being Rosario, received and possessed,
one after the other, the said jewels, only for purposes of custody or such that they must not
use them for their own benefit.
 If it was under a deposit agreement, it is clear that to those who received the jewelry has an
obligation to return them to their owners as soon as claimed by the latter.
 Article 1766 of the Civil Code: "The, depositary is obliged to keep the thing and restore it, when
so requested, to the depositor, or his successors, or the person who has been designated in the
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contract. Their responsibility for the care and the loss of the thing, is governed by the provisions of
title I of this book. "
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 The restitution must be made with all the fruits and accessions of the thing deposited, if any,
without it being given to the depositary who may not withhold, as Sanchez says Roman, (IV Sanchez
Roman, 885), even under the pretext of obtaining compensation for other credits or compensated
for expenses incurred for preservation.
 ROSARIO AND OTHERS: Contract is not that of a deposit because the jewels cannot be considered
as belonging to other persons with respect to Rosario as she is also a co-owner as descendant of one
of its early owners.
 SC: The first owners of the jewelry concerned who came to entrust the custody of the same to some
of them, expressly reserved them to their property. Even among co-owners of a thing, one of them
may be the depository, and thus it is subject to the same obligations imposed by law on all depository
with respect to the conservation of the thing with the care, diligence and interest of a good father.
"Joint owner. The fact that the depositary is a joint owner of the res does not alter the degree of
diligence required of him." (C. J. 18, 570).

2) YES. Appellees are owners of said fourth-sixths of jewelry, and appellants only own the
remaining portion (2/6). Therefore, Engracia Lavadia must have the custody and
administration of these jewels as she was entrusted by the appellees, constituting the
majority of the primitive owners
 As there is no evidence of the contribution of the six primitive owners in the making or
acquisition of the jewels often mentioned in the same proportion, the conclusion, as reasonable as it
is - and this is supported by a presumption of law (Art. 393, Civil Code) - is that the cost is the
same and as such the portions corresponding to the participants of the community shall
be presumed of an equal share.
 For the administration and better enjoyment of thing owned in common, according to
article 398 of the Civil Code, it is mandatory that there be an agreement of the majority of
the participants.

3) NO. The deposit agreement is such that allows the depositor to withdraw from the depository,
the thing deposited, any time he wanted, especially, when the latter, as in the case of Rosario Cosme
Mendoza, has executed an act against the order received in trying to entrust to another's custody and
administration the thing deposited, on their own without the consent of depositors or their heirs.

Tuason v. Tuason, 88 Phil 428

FACTS: In 1941 the sisters Angela I. Tuason and Nieves Tuason de Barreto and their brother Antonio
Tuason Jr., held a parcel of land with an area of 64,928.6 sq. m. covered by Certificate of Title No. 60911
in Sampaloc, Manila, in common, each owning an undivided 1/3 portion

The share of Nieves was sold to Gregorio Araneta Inc., a domestic corporation, and a new
Certificate of Title No. 61721 was issued in lieu of the old title No. 60911 covering the same property.
The three co-owners agreed to have the whole parcel subdivided into small lots and then sold, the
proceeds of the sale to be later divided among them.

Before, during and after the execution of this contract , Atty. J. Antonio Araneta was acting as
the attorney-in-fact and lawyer of the two co-owners, Angela I. Tuason and her brother Antonio Tuason
Jr. At the same time he was a member of the Board of Director of the third co-owner, Araneta, Inc.

On September 16, 1944, Angela I. Tuason revoked the powers conferred on her attorney-in-fact
and lawyer, J. Antonio Araneta because of alleged breach of the terms of the "Memorandum of
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Agreement" and abuse of powers granted to it in the document, she had decided to rescind said contract
and she asked that the property held in common be partitioned. Later, Angela filed a complaint in the
Court of First Instance of Manila asking the court to order the partition of the property in question and
that she be given 1/3 of the same including rents collected during the time that the same including rents
collected during the time that Araneta Inc., administered said property.

The suit was administered principally against Araneta, Inc. Plaintiff's brother, Antonio Tuason Jr.,
one of the co-owners evidently did not agree to the suit and its purpose, for he joined Araneta, Inc. as
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a co-defendant however the court dismissed the complaint without pronouncement as to costs.
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The plaintiff appealed from that decision.

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Some of the reasons advanced by appellant to have the memorandum contract (Exh. 6) declared
null and void or rescinded are that she had been tricked into signing it; that she was given to understand
by Antonio Araneta acting as her attorney-in-fact and legal adviser that said contract would be similar
to another contract of subdivision of a parcel into lots and the sale thereof entered into by Gregorio
Araneta Inc., that the defendant company has violated the terms of the contract by not previously
showing her the plans of the subdivision, the schedule of prices and conditions of the sale, in not
introducing the necessary improvements into the land and in not delivering to her, her share of the
proceeds of the rents and sales.

ISSUE: Whether or not the contract should be declared null and void because its terms,
particularly paragraphs 9, 11 and 15 which violate the provisions of Art. 400 of the Civil Code

RULING: No. The Court affirmed the lower court’s decision. The Court agreed with the trial court
that the provisions of Art. 400 of the Civil Code are not applicable. The contract far from violating the
legal provision that forbids a co-owner being obliged to remain a party to the community, precisely has
for its purpose and object the dissolution of the co-ownership and of the community by selling the parcel
held in common and dividing the proceeds of the sale among the co-owners. The obligation imposed in
the contract to preserve the co-ownership until all the lots shall have been sold, is a mere incident to the
main object of dissolving the co-owners. By virtue of the document, the parties thereto practically and
substantially entered into a contract of partnership as the best and most expedient means of eventually
dissolving the co-ownership, the life of said partnership to end when the object of its creation shall have
been attained. The court found no valid ground for the partition insisted upon the appellant. ART. 400.
No co-owner shall be obliged to remain a party to the community. Each may, at any time,
demand the partition of the thing held in common. Nevertheless, an agreement to keep the
thing undivided for a specified length of time, not exceeding ten years, shall be valid. This
period may be a new agreement.

*Mariano v. Court of Appeals, 222 SCRA 736

FACTS: The proceedings at bar concern (1) an attempt by a married man to prevent execution against
conjugal property of a judgment rendered against his wife, for obligations incurred by the latter while
engaged in a business that had admittedly redounded to the benefit of the family, and (2) the
interference by a court with the proceedings on execution of a co-equal or coordinate court. Both acts
being proscribed by law, correction is called for and will hereby be effected.
The proceedings originated from a suit filed by Esther Sanchez against Lourdes Mariano in the
Court of First Instance at Caloocan City, for recovery of the value of ladies’ ready made dresses allegedly
purchased by and delivered to the latter.

Daniel Sanchez, Esther’s husband, now made his move. He filed a complaint for annulment of the
execution in the Court of First Instance at Quezon City in his capacity as administrator of the conjugal
partnership. He alleged that the conjugal assets could not validly be made to answer for obligations
exclusively contracted by his wife, and that, moreover, some of the personal property levied on, such as
household appliances and utensils necessarily used in the conjugal dwelling, were exempt from
execution.

ISSUE: WON the claim that property levied on in execution of a judgment is not property of
the judgment debtor, Daniel Sanchez’s wife, but of the conjugal partnership of the Sanchez
Spouses
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HELD: In the case at bar, the husband of the judgment debtor cannot be deemed a “stranger” to the
case prosecuted and adjudged against his wife. In any case, whether by intervention in the court issuing
the writ, or by separate action, it is unavailing for either Esther Sanchez or her husband, Daniel, to seek
preclusion of the enforcement of the writ of possession against their conjugal assets. For it being
established, as aforestated, that Esther had engaged in business with her husband’s consent, and the
income derived therefrom had been expended, in part at least, for the support of her family, the liability
of the conjugal assets to respond for the wife’s obligations in the premises cannot be disputed.
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*Arcelona v. Court of Appeals, 280 SCRA 20, [G.R. No. 102900. October 2, 1997]

DOCTRINE: A co-owner cannot maintain an action in ejectment without joining all the other co-owners.
All co-owners in an action for security of tenure of a tenant must be impleaded. Failure of such will bar
the court from making a final adjudication.

FACTS: Farnacio filed an action for peaceful possession, maintenance of security of tenure and damages
against three fishpond co-owners Pacita Arcelona – Olanday, Maria Arcelona-Arellano and Natividad
Arcelona-Cruz. The case was intended maintain him as tenant of the fishpond. 3 other co-owners,
petitioners herein, are naturalized Americans, residing in California, USA. Judgment was rendered by the
trial declaring Farnacio as tenant-caretaker, which was affirmed by the IAC and the Supreme Court.
Subsequently, petitioners filed a petition for annulment of said judgment with the Court of Appeals
claiming that the lower court did not acquire jurisdiction over their persons. They claimed that being co-
owners, they should all be impleaded as indispensable parties. The CA rendered judgment dismissing
the petition on the ground of petitioners' failure to allege the sole and only ground of extrinsic fraud in
their petition for annulment of judgment.

ISSUE: WON the final judgment may be annulled for lack of jurisdiction (over the subject
matter and/or over the person of indispensable parties) and denial of due process?

Ruling: YES. Formerly, Article 487 of the old Civil Code provided that "any one of the co-owners may
bring an action in ejectment." It was subsequently held, however, that a co-owner could not maintain
an action in ejectment without joining all the other co-owners. Rule 3, Section 7 of the Rules of Court,
defines indispensable parties as parties-in-interest without whom there can be no final determination of
an action. It is logical that a tenant, in an action to establish his status as such, must implead all the
pro-indiviso co-owners; in failing to do so, there can be no final determination of the action. In other
words, a tenant who fails to implead all the co-owners cannot establish with finality his tenancy over the
entire co-owned land. Co-owners in an action for the security of tenure of a tenant are encompassed
within the definition of indispensable parties; thus, all of them must be impleaded.

In the case at bar, petitioners are co-owners of a fishpond. It is impossible to pinpoint which specific
portion of the property is owned by Olanday, et al. and which portion belongs to petitioners. Thus, it is
not possible to show over which portion the tenancy relation of Farnacio has been established. Indeed,
petitioners should have been properly impleaded as indispensable parties. Obviously, the failure to
implead petitioners barred the lower court from making a final adjudication. Without the presence of
indispensable parties to a suit or proceeding, a judgment therein cannot attain finality. The Court,
through former Chief Justice Marcelo B. Fernan, held that a person who was not impleaded in the
complaint cannot be bound by the decision rendered therein, for no man shall be affected by a proceeding
in which he is a stranger.

*Adlawan v. Adlawan, 479 SCRA 275

FACTS: Assailed in this petition for review dismissing petitioner Arnelito Adlawans unlawful detainer suit
against respondents Emeterio and Narcisa Adlawan Resolution of the Court of Appeals which denied
petitioners motion for reconsideration.

The ejectment suit from the parties dispute over Lot 7226 and the house built thereon registered
in the name of the late Dominador Adlawan and located at Barrio Lipata, Municipality of Minglanilla,
Cebu. Petitioner claimed that he is an acknowledged illegitimate child and sole heir of Dominador, he
executed an affidavit adjudicating himself to the Lot and the house built thereon. Out of respect and
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generosity to respondents he granted them to occupy the subject property provided they would vacate
should his need for the property arise and verbally requested respondents to vacate the house and lot,
but they refused and filed instead an action for quieting of title with the RTC.

Respondents denied that they begged petitioner to allow them to stay on the questioned property
and stressed that they have been occupying Lot 7226 and the house standing thereon since birth and
alleged that Lot 7226 was originally registered in the name of their deceased father.

Sometime in 1961, spouses Ramon and Oligia needed money to finance the renovation of their
52

house. Since they were not qualified to obtain a loan, they transferred ownership of Lot 7226 in the
name of their son Dominador by virtue of a simulated deed of sale, a title was issued to Dominador which
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enabled him to secure a loan with Lot 7226 as collateral.

 PROPERTY

Respondents contended that Dominadors signature at the back of petitioners birth certificate was
forged, hence, the latter is not an heir of Dominador and has no right to claim ownership of Lot 7226.

ISSUE: Whether or not petitioner can validly maintain the instant case for ejectment.

HELD: No, petitioner cannot validly maintain the instant case for ejectment. The Court notes that the
RTC lost sight of the fact that the theory of succession invoked by petitioner would end up proving that
he is not the sole owner of Lot 7226 because Dominador was survived not only by petitioner but also by
his legal wife, Graciana. By intestate succession, Graciana and petitioner became co-owners of Lot
7226. The death of Graciana, did not make petitioner the absolute owner of Lot 7226 because the share
of Graciana passed to her relatives by consanguinity and not to petitioner with whom she had no blood
relations. The Court of Appeals thus correctly held that petitioner has no authority to institute the instant
action as the sole owner of Lot 7226.

Petitioner contends Article 487 of the Civil Code which provides:

ART. 487. Any one of the co-owners may bring an action in ejectment.

This article covers all kinds of actions for the recovery of possession. Article 487 includes forcible
entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery
of ownership (accion de reivindicacion). A co-owner may bring such an action without the necessity of
joining all the other co-owners as co-plaintiffs because the suit is presumed to have been filed to benefit
his co-owners. It should be stressed, however, that where the suit is for the benefit of the plaintiff alone
who claims to be the sole owner and entitled to the possession of the litigated property, the action should
be dismissed.

In the instant case, it is not disputed that petitioner brought the suit for unlawful detainer in his
name alone and for his own benefit to the exclusion of the heirs of Graciana as he even executed an
affidavit of self- adjudication over the disputed property. It is clear therefore that petitioner cannot validly
maintain the instant action considering that he does not recognize the co-ownership that necessarily
flows from his theory of succession to the property of his father, Dominador. Thus, petition was
dismissed.

SPECIAL RULE ON MARITAL PROPERTIES (NCC 90)

Art. 90. When a marriage is annulled, the court shall award the custody of the children as it may deem
best, and make provision for their education and support. Attorney's fees and expenses incurred in the
litigation shall be charged to the conjugal partnership property, unless the action fails.

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