DIZON VS SUNTAY has lost any movable or has
(ARTICLE 559) been unlawfully deprived
thereof may recover it from
FACTS: the person in possession of
Respondent Lourdes G. the same. If the possessor of a
Suntay and one Clarita R. movable lost of which the
Sison entered into a owner has been unlawfully
transaction wherein the deprived, has acquired it in
Suntay’s three-carat diamond good faith at a public sale, the
ring, valued at P5,500.00, owner cannot obtain its
was delivered to Sison for return without reimbursing
sale on commission. Upon the price paid therefor.” The
receiving the ring, Sison only exception the law allows
executed and delivered to the is when there is acquisition in
receipt to Suntay. After the good faith of the possessor at
lapse of a considerable time a public sale, in which case
without Clarita R. Sison the owner cannot obtain its
having returned to the ring to return without, reimbursing
her, Suntay made demands the price. Hanging on to said
on Clarita R. Sison for the exception as his basis, Dizon
return of said jewelry. Clarita insisted that the principle of
R. Sison, however, could not estoppel should apply in this
comply with Suntay’s case but the Supreme Court
demands because on June 15, ruled otherwise.
1962, Melia Sison, niece of In the present case not only
the husband of Clarita R. has the ownership and the
Sison, evidently in origin of the jewels
connivance with the latter, misappropriated been
pledged the ring with the unquestionably proven but
petitioner Dominador Dizon's also that Clarita R. Sison,
pawnshop for P2,600.00 acting fraudulently and in
without Suntay’s knowledge. bad faith, disposed of them
When Suntay found out that and pledged them contrary to
Clarita R. Sison pledged the agreement with no right of
ring, she filed a case of estafa ownership, and to the
against the latter with the prejudice of Suntay, who was
fiscal's office. Subsequently, illegally deprived of said
Suntay wrote a letter to Dizon jewels and who, as the owner,
on September 22, 1962 has an absolute right to
asking for the return of her recover the jewels from the
ring which was pledged with possession of whosoever
the latter’s pawnshop under holds them, which in this
its Pawnshop Receipt serial B case is Dizon’s pawnshop.
No. 65606, dated June 15, Dizon ought to have been on
1962. his guard before accepting
Dizon refused to return the the pledge in question, but
ring, so Suntay filed an action evidently there was no such
for its recovery with the CFI precaution availed of and he
of Manila, which declared has no one to blame but
that she had the right to its himself. While the activity he
possession. The Court of is engaged in is no doubt
Appeals likewise affirmed legal, it is not to be lost sight
said decision. of that it thrives on taking
advantage of the necessities
ISSUE: precisely of that element of
Who has the right title over our population whose lives
the subject property? are blighted by extreme
poverty. From whatever angle
COURT RULING: the question is viewed then,
estoppel certainly cannot be
The Supreme Court affirmed justly invoked.
the decision of the lower
courts. The controlling Adlawan vs. Adlawan,
provision is Article 559 of the 479 SCRA 275, G.R. No.
Civil Code which provides 161916 January 20, 2006
that “[T]he possession of PRINCIPLE: Co-Ownership
movable property acquired in
good faith is equivalent to a FACTS:
title. Nevertheless, one who
The instant ejectment suit
stemmed 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. In his complaint,
Arnelito claimed that he is an
acknowledged illegitimate
child6 of Dominador who
died on May 28, 1987 without
any other issue. Claiming to
be the sole heir of
Dominador, he executed an
affidavit adjudicating to
himself Lot 7226 and the
house built thereon. Out of
respect and generosity to
Emeterio and Narcisa
Adlawan who are the siblings
of his father, he granted their
plea to occupy the subject
property provided they would
vacate the same should his
need for the property arise.
Sometime in January 1999,
he verbally requested
respondents to vacate the
house and lot, but they
refused and filed instead an
action for quieting of title
with the RTC. Finally, upon
respondents’ refusal to heed
the last demand letter to
vacate dated August 2, 2000,
petitioner filed the instant
case on August 9, 2000.
On the other hand,
respondents Narcisa and
Emeterio, 70 and 59 years of
age, respectively,denied that
they begged Arnelito 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. They alleged that Lot
7226 was originally
registered in the name of
their deceased father, Ramon
Adlawan and the ancestral
house standing thereon was
owned by Ramon and their
mother, Oligia Mañacap
Adlawan. The spouses had
nine children including the
late Dominador and herein
surviving respondents
Emeterio and Narcisa.
During the lifetime of their
parents and deceased
siblings, all of them lived on
the said property. Dominador
and his wife, Graciana Ramas
Adlawan, who died without
issue, also occupied the same.
1
Petitioner Arnelito, on the
other hand, is a stranger who
never had possession of Lot
7226.
Sometime in 1961, spouses
Ramon and Oligia needed
money to finance the
renovation of their house.
Since they were not qualified
to obtain a loan, they
transferred ownership of Lot
7226 in the name of their son
Dominador who was the only
one in the family who had a
college education. By virtue
of a January 31, 1962
simulated deed of sale, a title
was issued to Dominador
which enabled him to secure
a loan with Lot 7226 as
collateral. Notwithstanding
the execution of the
simulated deed, Dominador,
then single, never disputed
his parents’ ownership of the
lot. He and his wife,
Graciana, did not disturb
respondents’ possession of
the property until they died
on May 28, 1987 and May 6,
1997, respectively.
ISSUE : Whether or not
Arnelito can validly maintain
the ejectment suit
RULING:
Respondents also contended
that Dominador’s signature
at the back of petitioner’s
birth certificate was forged,
hence, the latter is not an heir
of Dominador and has no
right to claim ownership of
Lot 7226.15 They argued that
even if petitioner is indeed
Dominador’s acknowledged
illegitimate son, his right to
succeed is doubtful because
Dominador was survived by
his wife, Graciana.
DECISIOPN OF LOWER
COURTS
MTC: dismissed the
complaint holding that the
establishment of Petitioner
Arnelitos’s filiation and the
settlement of the estate of
Dominador are conditions
precedent to the accrual of
petitioner’s action for
ejectment. It added that since
Dominador was survived by
his wife, Graciana, who died
10 years thereafter, her legal
heirs are also entitled to their
share in Lot 7226.
RTC: reversed the decision of
the MTC holding that the title
of Dominador over Lot 7226
cannot be collaterally
attacked. It thus ordered
respondents to turn over
possession of the
controverted lot to petitioner
and to pay compensation for
the use and occupation of the
premises.
Court of Appeals: set aside
the decision of the RTC and
reinstated the judgment of
the MTC. It ratiocinated that
petitioner and the heirs of
Graciana are co-owners of
Lot 7226. As such, petitioner
cannot eject respondents
from the property via an
unlawful detainer suit filed in
his own name and as the sole
owner of the property.
RATIO DECIDENDI OF
SUPREME COURT
Wills and Succession;
Illegitimate Children; The
death of the father of an
allegedly acknowledged
illegitimate son did not make
said son the absolute owner
of a parcel of land owned by
the decedent and his legal
wife, and the subsequent
death of the latter did not
make said illegitimate son the
absolute owner of the lot
because the share of the
deceased wife passed to her
relatives by consanguinity
and not her husband’s
illegitimate child with whom
she had no blood relations.—
Petitioner averred that he is
an acknowledged illegitimate
son and the sole heir of
Dominador. He in fact
executed an affidavit
adjudicating to himself the
controverted property. In
ruling for the petitioner, the
RTC held that the questioned
January 31, 1962 deed of sale
validly transferred title to
Dominador and that
petitioner is his
acknowledged illegitimate
son who inherited ownership
of the questioned lot. The
Court notes, however, 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.
This is so because Dominador
was survived not only by
petitioner but also by his
legal wife, Graciana, who died
10 years after the demise of
Dominador on May 28, 1987.
By intestate succession,
Graciana and petitioner
became co-owners of Lot
7226. The death of Graciana
on May 6, 1997, 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.
Actions; Parties; Ejectment;
Co-Ownership; A co-owner
may bring such actions for
recovery of possession
without the necessity of
joining all of the other co-
owners as co-plaintiffs
because the suit is presumed
to have been filed for the
benefit of his co-owners;
However, if 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.—Petitioner
contends that even granting
that he has co-owners over
Lot 7226, he can on his own
file the instant case pursuant
to 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 coowners
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.
The renowned civilist,
2
Professor Arturo M.
Tolentino, explained—. . . A
co-owner may bring such an
action, without the necessity
of joining all the other co-
owners as coplaintiffs,
because the suit is deemed to
be instituted for the benefit of
all. If the action is for the
benefit of the plaintiff alone,
such that he claims
possession for himself and
not for the coownership, the
action will not prosper.
Wills and Succession;
Intestate Succession;
Escheat; In default of the
heirs of the decedent, the
State will inherit the
decedent’s share and will
thus be a co-petitioner
entitled to possession and
enjoyment of the property.—
In the same vein, there is no
merit in petitioner’s claim
that he has the legal
personality to file the present
unlawful detainer suit
because the ejectment of
respondents would benefit
not only him but also his
alleged co-owners. However,
petitioner forgets that he filed
the instant case to acquire
possession of the property
and to recover damages. If
granted, he alone will gain
possession of the lot and
benefit from the proceeds of
the award of damages to the
exclusion of the heirs of
Graciana. Hence, petitioner
cannot successfully capitalize
on the alleged benefit to his
co-owners. Incidentally, it
should be pointed out that in
default of the said heirs of
Graciana, whom petitioner
labeled as “fictitious heirs,”
the State will inherit her
share and will thus be
petitioner’s co-owner entitled
to possession and enjoyment
of the property.
BALOLOY VS HULAR
FACTS: Spouses Lino and
Victoriana Estopin were the
original owners of a parcel of
land located in Barangay
Biriran, Juban, Sorsogon
( Lot No. 3347 ) of the
Juban Cadastre. A major
portion of the property was
agricultural, while the rest
was residential. November 11
and 25, 1961: When Lino
Estopin died intestate, his
widow, Victoriana Lagata,
executed a Deed of Absolute
Sale on over the agricultural
portion of Lot No. 3347,
( 15,906 sqm) and the
residential portion of the
property (287 sqm) to
Astrologo Hular. In 1961 or
thereabouts: Iluminado
asked Hular’s permission to
construct a house on a
portion of Lot No. 3347 near
the road, and the latter
agreed. Iluminado Baloloy
in 1945 acquired a coconut
land (north of the residential
portion of Lot 3347 Lot No.
3353 (9302 sqm) and
registered the same.
Iluminado constructed his
house on a portion of Lot
No. 3353. He and his family,
including his children,
forthwith resided in said
house. In 1979,
respondent Hular had his
house constructed near the
trail (road) on Lot No.
3347, which, however,
occupied a big portion of Lot
No. 3353. Iluminado died
intestate on November 29,
1985. His widow and their
children continued residing
in the property, while
petitioner Reynaldo Baloloy,
one of Iluminado’s children,
later constructed his house
near that of his deceased
father. When Astrologo
died, he was survived by
his children, Jose, Romeo,
Anacleto, Elena, Leo,
Teresita, and the
respondent, among others,
who continued to reside in
their house. Sometime in
l991 the respondent had Lot
No. 3353 surveyed and
discovered that the
residential area deeded by
Lagata to Astrologo Hular
had an area of 1,405 square
meters, instead of 287 square
meters only. Respondent
Alfredo Hular filed a Albina
complaint for quieting of title
of real property against the
children and heirs of
Iluminado Baloloy, namely,
Anacorita, Antonio, and
petitioners Reynaldo and
Adelina, all surnamed
Baloloy. He prayed among
others that he be declared the
absolute owner of the
property in question.
ISSUE: Whether all the
indispensable parties had
been impleaded by the
respondent in the trial court
(NO)
RULING: Respondent
adduced evidence that when
his parents died intestate,
they were survived by their
children, the respondent and
his siblings Elena, Jose,
Romeo, Anacleto, Leo, and
Teresita. Article 1078 of the
Civil Code provides that
where there are two or more
heirs, the whole estate of the
decedent is, before partition,
owned in common by such
heirs, subject to the payment
of the debts of the deceased.
Under Article 487 of the
New Civil Code, any of the
co-owners may bring an
action in ejectment. This
article covers all kinds of
actions for the recovery of
possession, including an
accion publiciana and a
reinvidicatory action. If the
action is for the benefit of the
plaintiff alone who claims to
be the sole owner and
entitled to the possession
thereof, the action will not
prosper unless he impleads
the other co-owners who are
indispensable parties. In
this case, the respondent
alone filed the complaint,
claiming sole ownership over
the subject property and
praying that he be declared
the sole owner thereof. There
is no proof that the other co-
owners had waived their
rights over the subject
property or conveyed the
same to the respondent or
such co-owners were aware of
the case in the trial court.
HEIRS OF ALBINA
AMPHIL VS MANAHAN
SUMMARY: Exequiel, as
representative of the heirs of
Ampil filed a
complaint for ejectment
against the Manahans. In the
complaint, it was alleged that
Albina was the owner of two
lots, as evidenced by tax
declarations, and that Albina
had allowed Perfecto and his
family to occupy a portion of
the properties, on the
condition that they would
vacate the same, should the
need arise. The Manahans
filed their answer, averring
3
that the lots belonged to
them, their predecessor-in-
interest having been in
peaceful and continuous
possession thereof since time
immemorial. The MTC ruled
in favor of the Heirs. The
RTC affirmed. The CA
reversed. The SC upheld the
MTC/ RTC.
DOCTRINE: In an action for
forcible entry and unlawful
detainer, any one of the Art.
487, CC provides that any one
of the co-owners may bring
an action for ejectment,
without joining the others.
The action is not limited to
ejectment cases but includes
all kinds of suits for recovery
of possession, because the
suit is presumed to have been
instituted for the benefit of
all.
FACTS: Exequiel Ampil, as
representative of the heirs of
Albina Ampil filed a admits of several exceptions.
complaint for ejectment
against the Manahans
(Perfecto, Virginia, Teresita,
Almario, and Irene). In the
complaint, it was alleged that
Albina was the owner of two
adjoining residential lots in
Bulacan, as evidenced by tax
declarations, and that Albina
had allowed Perfecto and his
family to occupy a portion of
the properties, on the
condition that they would
vacate the same, should the
need arise.
After the death of Albina,
Exequiel and the rest of the
heirs requested Perfecto and
family to vacate the property,
but the latter refused.
The matter was brought to
the Lupong Tagapamayapa,
who issued a Certification to
File an Action for failure of
the parties to amicably settle
their dispute.
The Heirs sent a demand
letter to the Manahans to
surrender possession of the
lands, but to no avail. So, the
Heirs filed a complaint for
ejectment before the MTC.
The Manahans filed their
answer, averring that the lots
belonged to them, their
predecessor-in-interest
having been in peaceful and
continuous possession
thereof since time
immemorial, and that Albina
was never the owner of the
property.
The MTC rendered judgment
in favor of the Heirs, on the
basis of the tax declarations.
The RTC affirmed.
The CA reversed, ruling that
tax declarations and receipts
are not conclusive proof of
ownership or right of
possession, and only becomes
strong evidence of ownership
when accompanied by proof
of actual possession. The CA
denied the Heirs’ motion for
reconsideration.
ISSUE: Who has the better
right to the physical
possession of the disputed
property? THE HEIRS
RULING:
As a rule, petitions for review
on certiorari under Rule 45 of
the Rules Court are limited
only to questions of law and
not of fact. The rule, however,
Here, the factual findings of
the CA are contrary to those
of the MTC and the RTC.
Hence, a review of the case is
imperative.
In an unlawful detainer case,
the physical or material
possession of the property
involved, independent of any
claim of ownership by any of
the parties, is the sole issue
for resolution. But where the
issue of ownership is raised,
the courts may pass upon
said issue in order to
determine who has the right
to possess the property. This
adjudication, however, is only
an initial determination of
ownership for the purpose of
settling the issue of
possession, the issue of
ownership being inseparably
linked thereto. As such, the
lower court’s adjudication of
ownership in the ejectment
case is merely provisional
and would not bar or
prejudice an action between
the same parties involving
title to the property.
In the case at bar, the Court
sustains the findings of both
the MTC and the RTC. The
bare allegation of the
Manahans, that they had
been in peaceful and
continuous possession of the
lot in question because their
predecessor-in-interest had
been in possession thereof in
the concept of an owner from
time immemorial, cannot
prevail over the tax
declarations and other
documentary evidence
presented by petitioners. In
the absence of any supporting
evidence, that of the Heirs
deserves more probative
value.
A perusal of the records
shows that Manahans’
occupation of the lot in
question was by mere
tolerance. To prove
ownership over the property,
the Heirs presented the tax
declarations covering the
properties and a certification
issued by the Municipality,
showing that their mother,
Albina, had been paying the
corresponding real property
taxes thereon. The Heirs also
submitted a survey plan, in
support of Albina’s
application for land
registration over the disputed
lots. In fact, the Registry of
Deeds of Bulacan issued
Katibayan ng Orihinal na
Titulo conferring title over
the lot in the names of the
heirs of Albina.
Also, one of the Heirs
verbally demanded that the
Manahans vacate the
property and when the latter
refused, they filed a
complaint before the
Barangay Lupon. From the
minutes of the meeting in the
Barangay Lupon, Perfecto
admitted Albina allowed
them temporary use of the
lots and that they could not
leave the premises because
they had nowhere else to go.
When the parties failed to
reach a settlement, the Heirs,
in order to protect their
rights to the lot in question,
filed a case for violation of
P.D. No. 772, an Act
Penalizing Squatting and
other Similar Acts against
Perfecto, before the Regional
Trial Court. In the said case,
Perfecto executed a
Sinumpaang Salaysay,
wherein he admitted that
Albina was the owner of the
lots in question and that he
was merely allowed by her to
4
use the property on condition
that they would vacate it on
demand. As a result, the
court dismissed the
complaint because it found
out that Perfecto and his
family’s stay in the
questioned lots was lawful
because Albina permitted
them to use the lots on the
condition that they would
vacate the same should
Albina need it.
On the other hand, the
Manahans could not present
proof that they and their
predecessors-in-interest had
openly and continuously
possessed the subject land
since time immemorial.
Granting that the Manahans
or their predecessors-in-
interests had been in
possession in the concept of
an owner since time
immemorial, none of them
declared the disputed lots for
taxation purposes and, thus,
never paid taxes thereon. The
Manahans' allegation that
they were in peaceful,
continuous and adverse
possession of the lots in
question, unsupported by any
evidence, is not substantial to
establish their interest over
the property.
Well established is the rule
that ownership over the land
cannot be acquired by mere
occupation. While it is true
that tax declarations are not
conclusive evidence of
ownership, they,
nevertheless, constitute at
least proof that the holder
has a claim of title over the
property. It strengthens one's
bona fide claim of acquisition
of ownership.
PROCEDURAL ISSUE +
RATIO: Does Exequiel have
authority to file the complaint
on behalf of his co-heirs?
YES.
Art. 487, CC provides that
any one of the co-owners may
bring an action for ejectment,
without joining the others.
The action is not limited to
ejectment cases but includes
all kinds of suits for recovery
of possession, because the
suit is presumed to have been
instituted for the benefit of
all.
Celino v. Heirs of Alejo and
Teresa Santiago – As co-
owner of the properties, each
of the heirs may properly
bring an action for ejectment,
forcible entry, or any kind of
action for the recovery of
possession of the subject
properties. Thus, a co-owner
may bring such an action,
even without joining all the
other co-owners as co-
plaintiffs, because the suit is
deemed to be instituted for
the benefit of all.
Carandang v. Heirs of De
Guzman – Only one of the co-
owners, namely the co-owner
who filed the suit for the
recovery of the co-owned
property, is an indispensable
party thereto. The other co-
owners are not indispensable
parties. They are not even
necessary parties, for a
complete relief can be
afforded in the suit even
without their participation,
since the suit is presumed to
have been filed for the benefit
of all co-owners.
In the case at bench, the
complaint clearly stated that
the disputed property was
held in common by the Heirs;
and that the action was
brought to recover possession
of the lots from respondents
for the benefit of all the heirs
of Albina. Hence, Exequiel, a
co-owner, may bring the
action for unlawful detainer
even without the special
power of attorney of his co-
heirs, for complete relief can
be accorded in the suit even
without their participation
because the suit is deemed to
be instituted for the benefit of
all the co-owners.
RULING: CA reversed; MTC/
RTC reinstated. (Judgment in
favor of the Heirs)
National Housing Authority v
CA, Bulacan Garden
Corporation and Manila
Seedling Bank Foundation
(2005)
National Housing
Authority (NHA) VS
Bulacan Garden
Corporation ( BGC)
Manila Seedling Bank
Foundation (MSBF)
Facts
October 24, 1968:
Proclamation 481 set aside
120ha owned by NHA in
Quezon City. It was reserved
property for the site of the
National Government Center
September 19, 1977:
Proclamation 1670 removed a
7ha portion from the 120ha.
It also gave MBSF
usufructuary rights over the
7ha. The Proclamation stated
that the location of the 7ha
within the 120ha would be
determined by a future
survey under the
administration of MBSF.
MBSF's occupancy gradually
exceeded the 7ha area. By
1987, it occupied around 16ha
of the 120ha. The land it
occupied was bounded by
EDSA to the west, Agham
Road to the east, Quezon
Avenue to the south, and a
creek to the north.
August 18, 1987: MBSF
leased a portion of the area it
occupied to BGC and other
stallholders. BGC leased the
portion facing EDSA. It
occupied 4590 sq m of the
16ha.
November 11, 1987:
Memorandum Order 127
revoked the reserved status of
the 50ha remaining from the
120ha NHA property
reserved under Proclamation
481. It authorized the NHA to
commercialize the area and
sell it to the public.
August 15, 1988: NHA gave
BGC 10 days to vacate its
occupied area because it was
outside the 7ha granted to
MBSF. After the 10 days,
remaining structures would
be demolished by the NHA.
BGC filed a complaint for
injunction. Trial court
dismissed - NHA may
demolish. NHA demolished
BGC's facilities. Court of
appeals reversed.
Issues (topical)
Are the premises leased by
BGC from MBSF within the
usufructuary area granted to
the latter by Proclamation
1670?
5
Where exactly is the 7ha
granted by Proclamation
1670 in the 120ha?
In determining the location
of the 7ha, whose land survey
should prevail? MBSF's
survey, or the NHA's survey?
Held
To determine the location of
the 7ha, MBSF and NHA
should conduct a joint
survey. Case remanded to
trial court.
A usufruct may be
constituted for a specified
term and under such
conditions as the parties may
deem convenient subject to
the legal provisions on
usufruct. A usufructuary may
lease the object held in
usufruct. Thus, the NHA may
not evict BGC if the 4,590
square meter portion MSBF
leased to BGC is within the
seven-hectare area held in
usufruct by MSBF. The
owner of the property must
respect the lease entered into
by the usufructuary so long as
the usufruct exists.[11]
However, the NHA has the
right to evict BGC if BGC
occupied a portion outside of
the seven-hectare area
covered by MSBF’s
usufructuary rights.
A usufruct gives a right to
enjoy the property of another
with the obligation of
preserving its form and
substance, unless the title
constituting it or the law
otherwise provides. This
controversy would not have
arisen had MSBF respected
the limit of the beneficial use
given to it
MBSF's survey shows that
BGC's stall is within the 7ha.
MBSF plots the location of
the 7ha by starting from
Quezon Ave going northward
along EDSA. This survey was
based on the fact that MBSF's
main facilities are located
within this area.
NHA's survey shows that
BGC's stall is outside the 7ha.
NHA plots the location of the
7ha by starting from Quezon
Ave going towards Agham
Road. This survey was based
on the fact that MBSF's gate
fronted Agham Road.
To determine whose survey
should be followed, the court
cited CC 565:
ART. 565. The rights and
obligations of the
usufructuary shall be those
provided in the title
constituting the usufruct; in
default of such title, or in case
it is deficient, the provisions
contained in the two
following Chapters shall be
observed.
Proclamation 1670 is the title
containing the usufruct. It
clearly states that the 7ha
should be determined by "“by
future survey under the
administration of the
Foundation subject to private
rights if there be any.” Thus,
it is MBSF's survey that
should be followed.
HOWEVER, because MBSF
exceeded the 7ha allotted to it
by 9ha (7+9=16ha), the Court
ultimately ruled that a joint
survey between the NHA and
MBSF should be conducted
instead.
Obiter
The Court discussed the
duration of the usufruct
granted to MBSF. It cited CC
605:
ART. 605. Usufruct cannot be
constituted in favor of a town,
corporation, or association
for more than fifty years. If it
has been constituted, and
before the expiration of such
period the town is
abandoned, or the
corporation or association is
dissolved, the usufruct shall
be extinguished by reason
thereof
Since usufructs may only last
a maximum of 50 years,
MBSF's usufruct has only 22
years left, considering
Proclamation 1670 was
issued on September 19, 1977
(28 years from the year
2005).
AVELINO BALURAN vs
HON. RICARDO Y.
NAVARRO
FACTS:
Spouses Domingo Paraiso
and Fidela Q. Paraiso were
the owners of a residential
lot. The spouses Paraiso
executed an agreement
entitled "BARTER" whereby
as party of the first part they
agreed to "barter and
exchange" with spouses
Avelino and Benilda Baluran
their residential lot with the
latter's unirrigated riceland
without any permanent
improvements, under the
following conditions:
That both the Party of the
First Part and the Party of the
Second Part shall enjoy the
material possession of their
respective properties; the
Party of the First Part shall
reap the fruits of the
unirrigated riceland and the
Party of the Second Part shall
have a right to build his own
house in the residential lot.
Nevertheless, in the event any
of the children of Natividad
P. Obencio, daughter of the
First Part, shall choose to
reside in this municipality
and build his own house in
the residential lot, the Party
of the Second Part shall be
obliged to return the lot such
children with damages to be
incurred.
That neither the Party of the
First Part nor the Party of the
Second Part shall encumber,
alienate or dispose of in any
manner their respective
properties as bartered
without the consent of the
other.
That inasmuch as the
bartered properties are not
yet accordance with Act No.
496 or under the Spanish
Mortgage Law, they finally
agreed and covenant that this
deed be registered in the
Office of the Register of
Deeds of Ilocos Norte
pursuant to the provisions of
Act No. 3344 as amended.
Antonio Obendencio filed
with the RTC the present
complaint to recover the
residential lot from Avelino
Baluran claiming that he is
the rightful owner of said
residential lot having
acquired the same from his
mother, Natividad Paraiso
Obedencio, and that he
needed the property for
Purposes Of constructing his
6
house thereon inasmuch as
he had taken residence in his
native town, Sarrat.
Obedencio accordingly
prayed that he be declared
owner of the residential lot
and that defendant Baluran
be ordered to vacate the same
forfeiting his (Obedencio)
favor the improvements
defendant Baluran had built
in bad faith.
Answering the complaint,
Avelino Baluran alleged inter
alia that the "barter
agreement" transferred to
him the ownership of the
residential lot in exchange for
the unirrigated riceland
conveyed to plaintiff's
Predecessor-in-interest,
Natividad Obedencio, who in
fact is still in On thereof, and
that the plaintiff's cause of
action if any had prescribed.
It was likewise admitted that
the aforementioned
residential lot was donated by
Natividad Obedencio to her
son Antonio Obedencio, and
that since the execution of the
agreement of Avelino Baluran
was in possession of the
residential lot, paid the taxes
of the property, and
constructed a house thereon.
RTC rendered decision that
the plaintiff is hereby
declared owner of the
question, the defendant is
hereby ordered to vacate the
same with costs against
defendant.
Issue:
1. Whether or not the
transaction constitute barter
which intends to transfer
ownership of the property.
2. Whether or not the
transaction constitute
usufruct.
Ruling:
1. No, in the instant
case, the use of the, term
"barter" in describing the
agreement is not controlling.
The stipulations in said
document are clear enough to
indicate that there was no
intention at all on the part of
the signatories thereto to
convey the ownership of their
respective properties; all that
was intended, and it was so
provided in the agreement,
was to transfer the material
possession thereof. In fact,
the parties retained the right
to alienate their respective
properties which right is an
element of ownership.
2. Yes, as to the
material being the only one
transferred, all that the
parties acquired was the right
of usufruct which in essence
is the right to enjoy the
Property of another. Spouses
Paraiso would harvest the
crop of the unirrigated
riceland while the other
party, Avelino Baluran, could
build a house on the
residential lot, subject,
however, to the condition,
that when any of the children
of Natividad Paraiso
Obedencio, daughter of
spouses Paraiso, shall choose
to reside in the municipality
and build his house on the
residential lot, Avelino
Baluran shall be obliged to
return the lot to said children
"With damages to be
incurred." Thus, the mutual
agreement that each party
enjoying "material
possession" of the other's
property was subject to a
resolutory condition the
happening of which would
terminate the right of
possession and use.
Moreover, when there is
nothing contrary to law,
morals, and good customs Or
Public Policy in the
stipulations of a contract, the
agreement constitutes the law
between the parties and the
latter are bound by the terms
thereof. Art. 1306 of the Civil
Code states:
“The contracting parties may
establish such stipulations,
clauses, terms and conditions
as they may deem
convenient, provided they are
not contrary to law, Morals,
good customs, public order,
or public policy.”
Contracts which are the
private laws of the
contracting parties, should be
fulfilled according to the
literal sense of their
stipulations, if their terms are
clear and leave no room for
doubt as to the intention of
the contracting parties, for
contracts are obligatory, no
matter what their form may
be, whenever the essential
requisites for their validity
are present.
Usufruct may be constituted
by the parties for any period
of time and under such
conditions as they may deem
convenient and beneficial
subject to the provisions of
the Civil Code, Book II, Title
VI on Usufruct. The manner
of terminating or
extinguishing the right of
usufruct is primarily
determined by the
stipulations of the parties
which in this case is the
happening of the event
agreed upon.
However, application of Art.
579 of the Civil Code is
proper and hold that
petitioner will not forfeit the
improvement he built on the
lot but may remove the same
without causing damage to
the property. To wit:
“The usufructuary may make
on the property held in
usufruct such useful
improvements or expenses
for mere pleasure as he may
deem proper, provided he
does not alter its form or
substance; but he shall have
no right to be indemnified
therefor. He may, however.
He may, however, removed
such improvements, should it
be possible to do so without
damage to the property. “
As to the unirrigated riceland
which admittedly is in the
possession of Natividad
Obedencio. The "barter
agreement" did not transfer
the ownership of the
respective properties
mentioned therein, it follows
that petitioner Baluran
remains the owner of the
unirrigated riceland and is
now entitled to its
Possession. With the
happening of the resolutory
condition provided for in the
agreement, the right of
usufruct of the parties is
extinguished and each is
entitled to a return of his
property. It is true that
Natividad Obedencio who is
now in possession of the
property and who has been
made a party to this case
7
cannot be ordered in this
proceeding to surrender the
riceland. But inasmuch as
reciprocal rights and
obligations have arisen
between the parties to the so-
called "barter agreement",
the parties and for their
successors-in-interest are
duty bound to effect a
simultaneous transfer of the
respective properties if
substance at justice is to be
effected.
To conclude, the judgment is
hereby rendered: 1) declaring
the petitioner Avelino
Baluran and respondent
Antonio Obedencio the
respective owners the
unirrigated riceland and
residential lot mentioned in
the "Barter Agreement"; 2)
ordering Avelino Baluran to
vacate the residential lot and
removed improvements built
by thereon, provided,
however that he shall not be
compelled to do so unless the
unirrigated riceland shall five
been restored to his
possession either on volition
of the party concerned or
through judicial proceedings
which he may institute for the
purpose.
MORALIDAD VS
DIOSDADO PERNES
FACTS:
Petitioner is the registered
owner of a parcel of land in
Davao City which is the
subject of the
controversy. The petitioner
had worked in U.S.A. for
years until retirement. Being
single, she would
usually stay in the house of
her niece, respondent Arlene
Pernes, at Mandug, Davao
City during her vacation and
that in 1986, when she
received news from Arlene
that Mandug was infested by
NPA rebels and many women
and children were victims of
crossfire between
government troops and the
insurgents, she immediately
sent money to buy a lot in
Davao City proper where
Arlene and her family could
transfer and settle down.
Petitioner wanted the
property to be also available
to any of her kins
wishing to live and settle in
Davao City and made known
this intention in a document
she executed on July 21,
1986. which reads:
I, MERCEDES VIÑA
MORALIDAD, of legal age,
single, … hereby declare:
1. That it is my desire that
Mr. and Mrs. Diosdado M.
Pernes may build their house
therein and stay as long as
they like;
2. That anybody of my kins
who wishes to stay on the
aforementioned real property
should maintain an
atmosphere of cooperation,
live in harmony and must
avoid bickering with
one another;
3. That anyone of my kins
may enjoy the privilege to
stay therein and may avail
the
use thereof. Provided,
however, that the same is not
inimical to the purpose
thereof;
4. That anyone of my kins
who cannot conform with the
wishes of the undersigned
may exercise the freedom to
look for his own;
5. That any proceeds or
income derived from the
aforementioned properties
shall be allotted to my
nearest kins who have less in
life in greater percentage and
lesser percentage
to those who are better of in
standing. In her retirement,
petitioner came back to the
Philippines to stay with the
respondents’ on the
house they build on the
subject property. In the
course of time, their relations
turned sour which resulted in
violent confrontations and
the filing of suits at the
barangay lupon and to the
Ombudsman for conduct
unbecoming of public
servants and at the MTCC, an
ejectment suit for unlawful
detainer. The MTCC rendered
judgment for the petitioner
directing the defendants to
vacate the premises and to
yield peaceful possession
thereof to plaintiff.
Respondent spouses
appealed to the RTC where
the decision of the MTCC was
reversed, holding that
respondents’ possession of
the property in
question was not by mere
tolerance of the petitioner but
rather by her express
consent. It further
ruled that Article 1678 of the
Civil Code on reimbursement
of improvements introduced
is inapplicable since said
provision contemplates of a
lessor-lessee arrangement,
which was not the factual
milieu obtaining in the case.
Instead, the RTC ruled that
what governed the parties’
relationship are Articles
448 and 546 of the Civil
Code. Petitioner went to the
CA wherein her petition was
denied on the ground that it
is still premature to apply
Articles 448 and 546 of the
Civil Code considering that
the issue of whether
respondents’ right to possess
a portion of petitioner’s land
had already expired or was
already terminated was not
yet resolved. The CA further
ruled that what governs the
rights of the parties is
the law on usufruct but
petitioner failed to establish
that respondents’ right to
possess had already
ceased.
ISSUES:
What provisions of the Civil
Code should govern the
rights of the parties.
Whether or not the
respondents’ right to possess
the land had been
terminated.
HELD:
Usufruct is defined under
Article 562 of the Civil Code
in the following wise: ART.
562. Usufruct
gives a right to enjoy the
property of another with the
obligation of preserving its
form and substance, unless
the title constituting it or the
law otherwise provides.
Usufruct, in essence, is
nothing else but simply
allowing one to enjoy
another’s property. It is
also defined as the right to
enjoy the property of another
temporarily, including both
the jus utendi and the jus
fruendi, with the owner
8
retaining the jus disponendi
or the power to alienate the
same.
It is undisputed that
petitioner, in a document,
made known her intention to
give respondents
and her other kins the right
to use and to enjoy the fruits
of her property and the
respondents were
being given the right “to build
their own house” on the
property and to stay thereat
“as long as they like.”
Paragraph #5 of the same
document earmarks
“proceeds or income derived
from the aforementioned
properties” for the
petitioner’s “nearest kins who
have less in life in greater
percentage and lesser
percentage to those who are
better of in standing.” The
established facts undoubtedly
gave respondents not only
the right to use the property
but also granted them,
among the petitioner’s other
kins, the right to enjoy the
fruits thereof.
There are other modes or
instances whereby the
usufruct shall be considered
terminated or extinguished.
For sure, the Civil Code
enumerates such other
modes of extinguishment:
ART. 603. Usufruct is
extinguished:
(1) By the death of the
usufructuary, unless a wish of the petitioner,
contrary intention clearly
appears;
(2) By expiration of the
period for which it was
constituted, or by the
fulfillment of any resolutory
condition provided in the title
creating the usufruct;
(3) By merger of the usufruct
and ownership in the same
person;
(4) By renunciation of the
usufructuary;
(5) By the total loss of the
thing in usufruct;
(6) By the termination of the
right of the person
constituting the usufruct;
(7) By prescription.
The document executed by
the petitioner constitutes the
title creating, and sets forth
the
conditions of the usufruct.
Paragraph #3 thereof states
“That anyone of my kins may
enjoy the privilege to
stay therein and may avail
the use thereof. Provided,
however, that the same is not
inimical to the purpose
thereof”. What may be
inimical to the purpose
constituting the usufruct may
be gleaned from the
preceding paragraph wherein
petitioner made it abundantly
clear “that anybody of my
kins who wishes to
stay on the aforementioned
property should maintain an
atmosphere of cooperation,
live in harmony and must
avoid bickering with one
another.” That the
maintenance of a peaceful
and harmonious relations
between and among kin
constitutes an indispensable
condition for the continuance
of the usufruct is clearly
deduced from the succeeding
Paragraph #4 where
petitioner stated “That
anyone of my kins who
cannot conform with the
wishes of the undersigned
may exercise the freedom to
look for his own.” In fine, the
occurrence of any
of the following: the loss of
the atmosphere of
cooperation, the bickering or
the cessation of harmonious
relationship between/among
kins constitutes a resolutory
condition which, by express
extinguishes the usufruct.
Thus, the Court rules that the
continuing animosity
between the petitioner and
the Pernes family and the
violence and humiliation she
was made to endure, despite
her advanced age and frail
condition, are enough factual
bases to consider the usufruct
as having been terminated.
The relationship between the
petitioner and respondents
respecting the property in
question is one of owner and
usufructuary. Accordingly,
respondents’ claim for
reimbursement of the
Improvements they
introduced on the property
during the effectivity of the
usufruct should be governed
by applicable statutory
provisions and principles on
usufruct. In this regard, we
cite with approval what
Justice Edgardo Paras wrote
on the matter: If the builder
is a usufructuary, his rights
will be governed by Arts. 579
and 580. By express
provision of law,
respondents, as usufructuary,
do not have the right to
reimbursement for the
improvements they may have
introduced on the property.
We quote Articles 579 and
580 of the Civil Code:
Art. 579. The usufructuary
may make on the property
held in usufruct such useful
improvements or expenses
for mere pleasure as he may
deem proper, provided he
does not alter its form or
substance; but he shall
have no right to be
indemnified therefor. He
may, however, remove such
improvements, should it be
possible to do
so without damage to the
property
Art. 580. The usufructuary
may set off the improvements
he may have made on the
property against any
damage to the same.
GABOYA VS CUI
FACTS:
Don Mariano Cui, widower,
as owner of 3 lots situated in
the City of Cebu, sold said
three lots to three of his
children named Rosario C. de
Encarnacion, Mercedes C. de
Ramas and Antonio Ma. Cui,
pro indiviso for the sum of
P64,000. However one-third
of the property
corresponding to Rosario C.
de Encarnacion was returned
to the vendor because she
was not able to pay for the
purchase price which resulted
to the cancellation of the 1/3
sale. Because of the sale of
these lots pro indiviso and
because of the cancellation of
the sale to one of the three
original vendees, Don
Mariano and his children
Mercedes and Antonio
became co-owners of the
whole mass in equal portions.
In the deed of sale vendor
Don Mariano retained for
himself the usufruct of the
property. Subsequently, a
building was erected on a
portion of this mass facing
Calderon street and was
9
occupied by a Chinese
businessman for which he
paid Don Mariano P600 a
month as rental. The date
when the building, was
constructed and by whom do
not appear in the record.
Sometime after the sale to
Mercedes and Antonio the
two applied to the
Rehabilitation Finance
Corporation (RFC) for a loan
of P130,000 with which to
construct a 12-door
commercial building
presumably on a portion of
the entire parcel
corresponding to their share.
On January 7, 1947 Don
Mariano, executed an
authority to mortgage
authorizing his two children
co-owners to mortgage his
share. The loan was
eventually granted and was
secured by a mortgage on the
three lots in question, Don
Mariano being included as
one of the three mortgagors
and signing the
corresponding promissory
note with his two co-owners.
He did not however, join in
the construction of the 12-
door commercial building.
The 12-door commercial
building was eventually
constructed and the builder-
owners thereof Mercedes and
Antonio received and
continued to receive the rents
thereof amounting to P4,800
a month and paying
therefrom the installments
due for payment on the loan
to the Rehabilitation Finance
Corporation.
The complaint alleges that
the usufructuary right
reserved in favor of Don
Mariano Cui extends to and
includes the rentals of the
building constructed by
Antonio Cui and Mercedes
Cui on the land sold to them
by their father; that the
defendants retained those
rentals for themselves; that
the usufructuary rights of the
vendor were of the essence of
the sale, and their violation
entitled him to rescind (or
resolve) the sale. It prayed
either for rescission with
accounting, or for delivery of
the rentals of the building
with interests, attorneys’ fees
and costs.
Issue:
Whether or not the usufruct
reserved by the vendor in the
deed of sale, over the lots in
question that were at the time
vacant and unoccupied, gave
the usufructuary the right to
receive the rentals of the
commercial building
constructed by the vendees
with funds borrowed from
the Rehabilitation and
Finance Corporation, the
loan being secured by a
mortgage over the lots sold.
Whether or not the failure of
the vendees to pay over its
rentals to the usufructuary
entitled the latter to rescind,
or more properly, resolve the
contract of sale.
Whether the action for
rescission due to breach of
the contract could still be
enforced and was not yet
barred.
Held: Under the articles of
the Civil Code on industrial
accession by modification on
the principal land (Articles
445 to 456 of the Civil Code)
such accession is limited
either to buildings erected on
the land of another, or
buildings constructed by the
owner of the land with
materials owned by someone
else.
Thus, Article 445,
establishing the basic rule of
industrial accession,
prescribes that —
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.
while Article 449 states:
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. (Emphasis
supplied)
Articles 447 and 445, in turn,
treat of accession produced
by the landowner’s building,
planting and sowing “with
the materials of another” and
when “the materials, plants
or seeds belong to a third
person other than the
landowner or the builder,
planter or sower.
Nowhere in these articles on
industrial accession is there
any mention of the case of
landowner building on his
own land with materials
owned by himself (which is
the case of appellees
Mercedes and Antonio Cui).
The Civil Code itself limits
the cases of industrial
accession to those involving
land and materials belonging
to different owners
The usufruct over the land
did not entitle the
usufructuary to either the
gross or the net income of the
building erected by the
vendees, but only to the
rental value of the portion of
the land occupied by the
structure (in so far as the
usufructuary was prevented
from utilizing said portion),
and that rental value was not
liquidated when the
complaints were filed in the
court below, hence, there was
no default in its payment.
Actually, this theory of
appellants fails to take into
account that Don Mariano
could not retain ownership of
the land and, at the same
time, be the usufructuary
thereof. His intention of the
usufructuary rights in itself
imports that he was no longer
its owner. For usufruct is
essentially jus in re aliena;
and to be a usufructuary of
one’s own property is in law a
contradiction in terms, and a
conceptual absurdity.
10