PROPERTY REVIEWER Part 3 RIGHT OF ACCESSION A.

Concept
It is a mere consequence or incidence of ownership Accession presupposes a preexisting right of ownership Accession is an exercise of the right of ownership, an extension of dominion over a principal thing to an accessory

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. Art. 441. To the owner belongs: (1) The natural fruits; (2) The industrial fruits; (3) The civil fruits. 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 kinds through cultivation or labor. Civil fruits are rents of buildings, the price of leases or land and other property and the amount of perpetual life annuities or other similar income. (1) Definition of Accession The right by virtue of which the owner of a thing becomes the owner of everything that it may produce or which may be inseparably united or incorporated thereto, either naturally or artificially. The right which ownership of property gives over everything which the same produces or which is attached or incorporated thereto either naturally or artificially Merely a consequence of the right of ownership (2) Accession not a mode of acquiring ownership

(3) Basis of Accession Accession discreta is based on principles of justice. It is only just that the owner of a thing should also own whatever it produces, unless there is some special reason for a contrary solution. Accession continua is generally based on necessity and utility, it being more practical that the owner of the principal thing should own the new things instead of a co-ownership being established.

B. General Principles of Accession

(1) Accessory follows the principal (accesio cedit principal) Arts. 445 and 446 give the general rule that the accessory follows the principal (See art. 437). The land is the principal and what is built, the accessory. Basis: Principle of justice: It is only just that a thing should also own whatever it produces, unless there is some special reason for a contrary solution. (2) No unjust enrichment (Art. 443) This principle is generally applicable. The right of the LO to acquire what is built, planted or sown with the materials of another is subject to the obligation to pay their value (Art. 447); and if the materials belong to a 3rd person, the owner shall answer subsidiarily for their value unless he 28

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exercises his right of removal (Art. 455). (3) All works, sowing, and planting are presumed made by the owner and at his expense, unless the contrary is proved (Art. 446) (4) Accessory incorporated to principal such that it cannot be separated without injury to work constructed or destruction to plantings or construction of works. The incorporation or union must be intimate, i.e., it must be such that removal or separation cannot be effected without substantial injury to either or both. (5) Bad faith involves liability for damages and other dire consequences (6) Bad faith of one party neutralizes bad faith of the other (Art. 453). Where the parties are equally in bad faith, they shall both be considered as being in good faith. Where the LO and the BPS are both in good faith or bad faith, neither party may demand as a matter of right the removal of improvements against the will of the other for such right is available only to a party in good faith where the other is in bad faith (See Arts. 447, 449, 450, 453 and 455). (7) Ownership of fruits belong to the principal thing; Exceptions: (i) possession in good faith possessor is entitled to fruits (ii) in usufruct usufructury is entitled to fruits (iii) in lease lessee is entitled to fruits (iv) in antichresis antichretic creditor is entitled to fruits

C.

Obligations of Receiver of Fruits

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. (1) Concept of fruits Juridically, fruits include all the products of or income from a thing, in accordance with its economic purpose, so long as they do not bring about any essential alteration thereof. (2) Application Art. 443 applies where: (a) The owner of the property recovers the same from a possessor and the possessor has not yet received the fruits although they may have already gathered or harvested; or (b) The possessor has already received the fruits but is ordered to return the same to the owner. The owner is obliged to reimburse the previous possessor for the expenses incurred by the latter for their production, gathering, and preservation. (3) Reason for the rule The expenses incurred by another have inured to the benefit of the owner who receives the fruits without such expenses there would have been no fruits. The rule is in keeping with the principle that no one may unjustly enrich himself at the expense of another. (4) What expenses covered The expenses, to be reimbursable under this article, must have 2 characteristics: (a) They must be dedicated to the annual production, 29

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and not for the improvement of the property, and (b) They must not be unnecessary, excessive, or for pure luxury, but must be of such an amount naturally required by the condition of the work or the cultivation made. (5) Where expenses exceed fruits Only expenses incurred by the possessor for the production, gathering and preservation of the fruits are reimbursable. The owner must pay the expenses just the same because the law makes no distinction. (6) Effect of bad faith If the fruits have not yet been gathered at the time the owner recovers possession from a possessor in bad faith, he does not have to pay for production expenses, because Art. 449 clearly says that the possessor in bad faith loses that which had been planted or sown, without right to any indemnity whatsoever. The fruits, still part of the immovable, pass to the owner by accession. HOWEVER, if the fruits are already gathered or severed, and are ordered turned over to the owner of the land by the possessor on bad faith, the latter is entitled to be reimbursed and may deduct his expenses of cultivation, gathering, and preservation. (Art. 443 will apply because the fruits have been separated from the immovable, hence accession continua no longer apply) The owner cannot excuse himself from his obligation by alleging bad faith on the part of the possessor because Art. 443 makes no distinction and because the expenses made were necessary without which the owner would not have received the fruits. A possessor in bad faith ordered to return the fruits he had gathered has a right to deduct the expenses of planting and harvesting. *Art. 443 establishes a general rule, while Art. 449 is the exception.

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. (1) When natural fruits and industrial fruits deemed to exist. (a) With respect to plants which produce only one crop and then perish from the time the seedlings appear from the ground (b) As to plants and trees which live for years and give periodic fruits from the time the fruits actually appear on the plants or trees (c) As regards animals at the beginning of the maximum ordinary period of gestation (when there can be no doubt that they are already in the womb of the mother), this being the surest criterion of their existence in the mothers womb (d) With respect to fowls by analogy, at the beginning of incubation (e) In cases of young animals If existing in the womb of the mother, though unborn D. Kinds of Accession

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(1) Accession discreta the right pertaining to the owner of a thing over everything produced thereby: Facts E.M. Bachrach died leaving his widow (Mary) with all the fruits and the usufruct of the remainder of his estate, including 54,000 shares of stock dividends. Mary petitioned the lower court to authorize the administrator of the estate to transfer to her said shares of stock dividend, claiming that the dividend, although paid out in the form of stock, is fruit or income and thus belonged to her as usufructuary or life tenant. Held A dividend, whether in the form of cash or stock, is income or fruit and consequently should go to the usufructuary, Mary Bachrach, rather than the owner of the shares of stock in usufruct. Dividend is declared only out of the profits of a corporation and not out of its capital. Bachrach vs. Talisay-Silay Facts Sugar planters of Talisay-Silay (TS) mortgaged their lands in order to secure the debts of TS against PNB. As compensation for the risk the planters took, TS undertook to give them a bonus equal to 2% of the debt secured. Bachrach filed a case against TS, asking for Ledesmas credit bonus as payment for the latters debt against Bachrach. TS answered that Ledesmas credit bonus had been purchased by another. PNB alleged that it had preferential right to the bonus because such bonus would be civil fruits of the land that Ledesma mortgaged to PNB. Held A bonus paid by the mortagagedebtor to another who had mortgaged his land to secure the payment of the debtors obligation to a bank is not a 31
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(a) Natural fruits, or spontaneous products of the soil, and the young and other products of animals (Art. 442) Products of the soil in whose generation human labor does not intervene Trees adhering to the soil are not fruits in the juridical sense; they are themselves immovables which may produce fruits. But under certain circumstances they may be considered fruits, as when they are exploited for an industry, in which case they are industrial fruits. The young and other products of animals are, without distinction, classified as natural fruits. The Code does not expressly provide for the ownership of young animals when the male and female parents belong to different owners. But following the rule in the Partidas, the young may properly belong to the owner of the female because it would merely be continuing the ownership which the owner of the female had while the young was in the womb of the mother. (b)Industrial fruits, or those produced by lands of any kinds through cultivation or labor (Art. 442) (c) Civil fruits, or rents of buildings, the price of leases of and other property and the amount of perpetual or life annuities or other similar income (Art. 442)
Cases Bachrach vs. Seifert

PROPERTY REVIEWER
civil fruit of the mortgaged property. Such bonus bears no immediate, but only a remote and accidental relation to the land. It is not income delivered from the property but a compensation granted for the risk assumed by the owner of the property. (2) Accession Continua the right pertaining to the owner of a thing over everything that is incorporated or attached thereto, either naturally or artificially. (a) With regard to immovable property (a.1) Accession industrial, or that which takes place in case of: (i) building, (ii) planting, or (iii) sowing (Arts. 445-455) (a.2) Accession natural, which may be in the form of either: (i) Alluvium (ii) Avulsion (iii) Change in the course of river (iv) Formation of islands (b) With regard to movable property (b.1) Adjunction or conjunction, which may be: (i) inclusio or engraftment (ii) soldadura or attachment (a) ferruminatio objects are of the same metal (b)plumbatura objects are diff. metals (iii) tejido or weaving (iv) pintura or painting (v) escritura or writing (b.2) Commixtion or confusion (b.3) Specification *Lets discuss Accession industrial first: (1) Accession industrial 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. (1) Scope of building The term building is a generic term for all architectural work with roof, built for the purpose of being used as mans dwelling, or for offices, clubs, theaters, etc. A warehouse is not a building (2) Scope of planting It is not necessary that the trees or plants should have taken root; it is enough that they are planted in order to belong to the owner of the land. Art. 446. All works, sowing, and planting are presumed made by the owner and at his expense, unless the contrary is proved. (1) Scope of article All works includes the construction, improvement or repair of building and all analogous works. (2) Presumption as to improvements Art. 446 establishes 2 disputable presumptions: (a) The works etc. were made by the owner this presumption is based on positive law (the provisions of Art. 437 and 445). A land naturally has an owner and the law accordingly presumes that he made the works, sowing, and planting. (b) They were made at the owners expense When a construction exists on a piece of land, it is presumed that 32
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it was made by the owner of the land at his expense In case a third person does so, it is supposed that it was with the consent of the owner 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. (1) Right of owner of materials (OM) The owner of materials used by another does NOT become a part owner of the thing constructed with his materials, but is only entitled to recover their value The owner of the land does NOT have the option to offer to return the materials instead of paying their value. In case of demolition the right of the OM is not revived because the law definitely attributes the ownership to the landowner If the owner alienates the land and the improvements thereon, the action of the owner of the materials shall be against him and not against the vendee. The OM acquires the accessions together with the land. (2) What is bad faith? BPS is in bad faith with respect to the materials if he knew that he had no right to make use of the such materials. The owner of the materials would be in bad faith if such materials were used by another in his presence, with his knowledge and forbearance, and without opposition on his part. 33
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(3) He who alleges the contrary of the presumptions in this article has the burden of proof. (4) Exception: Art. 120 FC (a case of reverse accession) Family Code: 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 acts or efforts of either or both spouses shall pertain to the conjugal partnership, or to the original owner-spouses, subject to the following rules: When the cost of the improvement made by the conjugal partnership and any resulting increase in value are more than the value of the property at the time of the improvement, the entire property of one of the spouses shall belong to the conjugal partnership, subject to reimbursement of the value of the property of the owner-spouse at the time of the improvement, otherwise, said property shall be retained in ownership by the owner-spouse likewise subject to reimbursement of the cost of the improvement. In either case, the ownership of the entire property shall be vested upon the reimbursement, which shall be made at the time of the liquidation of the conjugal partnership. (5) Application For Art. 445 to be applicable, the owner of the land must be known. Otherwise, no decision can be rendered on the ownership of the things planted, built or sown until a hearing shall have been accorded to whomsoever is entitled thereto.

PROPERTY REVIEWER
1st Case: LO is BPS using material of another Good Faith OMlies in ignorance of BPS acts BPS/LObelief that the materials belong to him and who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it Note: his negligence may subject him to liability for damages Bad Faith OMallowing the use of the materials without protest BPS/LOknowledge of lack of title and the absence of permission of the owner of the material to pay their value Landowner and BPS Good faith 1. Right to acquire the improvements after paying the value of materials Owner of Material Good faith 1. Limited right of removal if there would be no injury to work constructed, or without plantings or constructions being destroyed (Art. 447) 2. Right to receive payment for value of materials Good faith 1. Right to receive payment for value of materials 2. Absolute right of removal of the 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 Arts. 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. (1) Reason for the provision Where the BPS has acted in good faith, a conflict of rights arises between the owners, and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. 34
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remove

Good faith 1. Right to acquire the improvements without paying indemnity 2. Right to acquire indemnity for damages if there are hidden defects known to OM Bad faith (Same as though acted in good faith under Art. 453)

work constructed in any event Right to be indemnified for damages Bad faith 1. Lose materials without right to indemnity

Bad faith (Same as though acted in good faith under Art. 453)

Bad faith 1. Acquire BPS after paying its value and paying indemnity for damages (Art. 447) but subject to OMs right to

PROPERTY REVIEWER
The law has provided a solution by giving the owner of the land (LO) the option to (1) acquire the improvements after payment of the proper indemnity OR (2) oblige the builder or planter to pay for the land and the sower to pay the proper rent. LO cannot refuse to exercise either option It is the LO who is authorized to exercise the option because his right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory thing. Art. 450. The owner of the land on which anything had 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 cases of the two preceding articles, the landowner is entitled to reimbursement for the necessary expenses or preservation of the land. Art. 452. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses of preservation of the land. Art. 453. If there was bad faith, not only on 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 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 provision of Art. 447 shall apply. 2ND Case: BPS builds, plants, or sows on anothers land using his own materials Good faith 35
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(2) What construction included To fall within the provisions of this article, the construction must be of a permanent character, attached to the soil with an idea of perpetuity. 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 LO is an action to eject the builder from the land. (3) Good faith in building This article applies only to a case where the BPS believes that he has a claim of title to the land, i.e., that the land is his and he has a right to build, plant, or sow thereon. A possessor in good faith is one who has no knowledge of any flaw or defect in his title or mode of acquisition Good faith is presumed under Art. 527 and he who alleges bad faith has the burden of proving the same. 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.

PROPERTY REVIEWER
OM/BPSlies in belief that the land belongs to him, and his ignorance of any defect or flaw in his title. LOignorance of the BPS acts, or belief that the BPS has the right to construct, plant or sow Bad faith OM/BPSlies in his knowledge of his lack of title and absence of permission of the LO LOknowledge of BPS lack of right to construct, plant or sow (1) Option given to LO Choice of LO shall produce effect from the time it has been communicated to the other party. Once properly made, it cannot be changed by the former without the consent of the latter. (2) Reason for the option Conflict arises between the owners of improvements and LO and it becomes necessary to protect the owner of the improvements w/o causing injustice to the LO. The law has provided a just and equitable solution by giving the LO the option. It is the LO who is allowed to exercise because his right is older and because, by principle of accession, he is entitled to the ownership of the accessory thing. The improvements must be of a permanent nature; otherwise, there is no accession and, therefore, the LO has every right to have the same removed from his property. (3) Right of LO to remove or demolish improvement LO cannot refuse to exercise his right of choice and compel the BPS to remove or demolish the improvement. He is entitled to such removal only when after having chosen to sell his land, the other party fails to pay for the same. (4) Right of LO to require payment for value of the land The purpose of the exception (if the value of land is considerably more than that of the building or trees) is to prevent injustice. It is considered inequitable in such case to compel the BP to pay for the price of the land. A forced lease is created b/w the parties if the LO does not choose to appropriate the improvement after the proper indemnity. As to when the lands value is considerably more than that of the improvement will have to be determined by the court taking into consideration the circumstances of each particular case. (5) Cases not covered Art. 448 does not apply which are governed by other provisions of law: (a) co-ownership (b) usufruct (c) agency (d) lease Where there is a contractual relation existing between the LO and the BPS, their stipulations, primarily, and the pertinent provisions of the CC on ObliCon including those on special contracts, suppletorily, would govern. Landowner Good faith LO has option to: a) Acqui re the improvement BPS and Owner of Material Good faith BPS has right to retain the land until the payment of indemnity (right 36
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PROPERTY REVIEWER
after paying indemnity which may be the: - original cost of improvemen t or - increase in value of the whole brought about by the improvemen t b) Sell the land to the BP pr collect rent from sower unless: - value of land is more than the thing built, planted or sown - BP shall pay rent fixed by parties or by the court in case of disagreeme nt Note: LO can be forced to choose under pain of direct contempt or court can choose for him Good faith 1. LO has right to collect damages in any case and option to: a) Acquire improvements without paying of retention) Note: During this period BPS is not required to pay rent indemnity if the improvements are still standing on the land b) Sell the land to BP or collect rent from the sower unless the value of the improvements in which case there will be a forced lease c) Order demolition of improvements or restoration of land to its former condition at the BPS expense. 2. LO must pay for necessary expenses for preservation. Bad faith 1. LO must indemnify BPS for the improvements and pay damages as if he himself did the BPS 2. LO has no option to sell the land and caanot compel BPS to buy the land unless BPS agrees to Bad faith (Same as though acted in good faith under Art. 453) 4. Recover necessary expenses for preservation of land. Good faith BPS has right to: a) be indemnified for damages b) remove all improvements in any event

Bad faith (Same as though acted in good faith under Art. 453)

Bad faith 1. Pay damages to LO 2. BPS lose materials without right to indemnity 3. No right to refuse to buy the land

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 37
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value and only in the event that the one who made use of them has no property with which to pay. This provision shall apply if the owner makes use of the right granted by Art. 450. If the owner of the materials, plants, or seeds has been paid by the builder, planter, 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 Art. 2176. Good faith does not exclude negligence 1. Right to acquire improveme nts and pay indemnity to BPS; subsidiarily liable to OM 2. Has option to: a) Sell land to BP except if the value of the land is considerabl y more b) Rent to sower Good faith 1. Right to acquire improveme nts and pay indemnity to BPS 2. Has option to: a) Sell land to BP except if the value of the land is considerabl y more b) Rent to sower 3. Without subsidiary liability for cost of materials Good faith 1. LO has right to collect damages in any case 1. Right of retention until necessary and useful expenses are paid 2. Pay value of materials to OM 1. Collect value of materials primarily from BPS and subsidiarily liable for LO if BPS insolvent 2. Limited right of removal

3rd Case: BPS builds. Plants, or sows on anothers land with materials owned by third person (1) Liability of LO He shall be subsidiarily liable for the value of the materials if the following requisites are present: (a) The OM has not acted in bad faith (b) The BPS has no property with which to pay; and (c) LO appropriates the accession to himself (2) Right of BPS who pays OM If BPS pays the OM, the former may seek reimbursement from the LO for the value of the materials and labor to prevent unjust enrichment of the LO at the expense of the BPS. This is true if: (a) The BPS acted in good faith; and (b) The LO appropriates the improvement Landowne r Good faith BPS Good faith OM Good faith

Good faith 1. Right of retention until necessary and useful expenses are paid 2. Keep BPS without indemnity to OM and collect damages from him.

Bad faith 1. Lose the materials without right to indemnity 2. Must pay for damages to BPS

Bad faith 1. Recover necessary expenses

Bad faith 1. Recover value from BPS (as if 38

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PROPERTY REVIEWER
and option to: a) Acquire improveme nts w/o paying for indemnity; or b) Demolition or restoration; or c) Sell to BP, or to rent to sower 2. Pay necessary expense to BPS Bad faith (Same as when all acted in good faith under Art. 453) Bad faith 1. Acquire improveme nt after paying indemnity and damages to BPS unless latter decides to remove improveme nts 2. Subsidiarily liable to OM for value of materials for preservatio n of land from LO unless LO sells land both are in good faith) 2. If BPS acquires improveme nt, remove materials if feasible w/o injury 3. No action against LO but liable to LO for damages Bad faith 1. Acquire improveme nts after indemnity; subsidiraily liable to OM for value of materials 2. Has option to: a) Sell the land to BP except if the value of the land is considerabl y more b) Rent to sower Good faith 1. Acquire improveme nt after paying indemnity; subsidiarily liable to OM 2. LO has option to: a) Sell land to BP except if value of land is considerabl y more b) Rent to sower Bad faith 1. Acquire improveme nts and pay indemnity and damages to BPS unless latter are paid 2. Pay value of materials to OM and pay him damages from LO 2. Collect damages from BPS 3. If BPS acquires improveme nts, remove materials in any event

Bad faith (Same as when all acted in good faith under Art. 453) Good faith 1. May remove improveme nts 2. Be indemnified for damages in any event

Bad faith (Same as when all acted in good faith under Art 453) Good faith 1. Remove materials if possible w/o injury 2. Collect value of materials from BPS; subsidiarily from LO

Bad faith 1. Right of retention until necessary expenses are paid 2. Pay value of materials to OM 3. Pay damages to OM

Good faith 1. Collect value of materials primarily from BPS and subsidiarily from LO 2. Collect damages from BPS 3. If BPS acquires improveme nts, absolute right of removal in any event Bad faith 1. No right to indemnity 2. Loses right to material

Bad faith 1. Right of retention until necessary expenses

Good faith 1. Collect value of materials primarily from BPS and subsidiarily

Good faith 1. Receive indemnity for damages 2. Absolute right of removal of improveme nts in any event

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decides to remove materials Cases Bernardo vs. Baticlan Facts Bernardo bought a parcel of land only to discover that Baticlan is possessing the same property. The lower court held Baticlan to be a possessor in good faith and thus entitled to reimbursement with right of retention subject to Bernardos 2 options whether to sell the land to Baticlan, but Baticlan was unable to pay and so the land was sold at public auction, which was won by Toribio Teodoro. The court removed Baticlans right of retention and granted Teodoros motion to be placed in possession of the land purchased by him. Baticlan appeals from these decisions. Held When Bernardo opted to sell the land to Baticlan, he lost his right of retention over the said property. When, in the face of a conflict between the rights of an owner and a builder, sower, planter in good faith, the owner opts to sell the land to the BPS who is subsequently unable to pay, the BPS loses his right of retention. A forced co-ownership occurs when the BPS has acted in good faith. A conflict of rights arises between the owners and it becomes necessary to protect the owner of the improvements without causing injustice to the owner after payment of the proper indemnity or to oblige the builder or planter to pay for the land and the sower to pay the proper rent (Art. 361). It is the owner of the land who is allowed to exercise the option because his right is older and because, by the principle of accession, he is entitled to the ownership of the accessory thing. When the BPS failed to pay for the land, he lost his right of retention. Ignacio vs Hilario Facts Lower court rendered judgment holding Hilario as the legal owner of a property, but ceded to Ignacio the ownership of the improvements he built on the same land. Hilario was given the option to reimburse Ignacio for the improvements or to sell the land to Ignacaio. Hilario exercised neither option. Held Since the option to remove or demolish improvement is given to the LO and it is limited to paying for the improvement or selling his land to the BPS, he cannot refuse to exercise his right of choice and compel the builder to remove or demolish the improvement. He is entitled to such removal only when after choosing to sell his land, the other party fails to pay for the same. Sarmiento vs Agana Facts Spouses Valentino were told by the mother of the female Valentino to construct a residential house. They did construct a house, only to later discover that the land did not belong to the mother but to the Spouses Santos who sole the same to Sarmiento. Sarmiento asked the Valentinos to vacate and filed an ejectment suit. Held Spouses Valentino may not be ejected from the land. They were builders in good faith. The owner of a building erected in good faith on a land owned by another is entitled to retain possession of the land until he is paid the value of the building. Under Art. 448, Sarmiento may either pay for the 40
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PROPERTY REVIEWER
building or sell his land to the owner of the building. Sarmiento cannot refuse both and then compel the owner of the building to remove it from the land where it is erected. He is entitled to such only when the other party fails to pay for the same. An order by a court compelling a builder in good faith to remove is building from land belonging to another who chooses neither to pay for such building nor sell the land is null and void for being offensive to Art. 448. Depra vs Dumlao Facts The kitchen of Dumlaos house encroached on an area of 34 sq.m. of Depras property. Depra filed unlawful detainer case with the Municipal court. Said court found Dumlao to be a builder in good faith and applying Art. 448, it ordered a forced lease between the parties. Depra, instead of accepting payment for rentals, filed for Quieting of title with the CFI. Dumlao contended that res judicata applies. CFI awarded title to Depra, implying that he may have the kitchen removed. (Note that Depra did not exercise his option under Art. 448 to either pay for the improvements or to sell the land). Dumlao appealed. Held The Municipal court overstepped its bounds when it ordered a forced lease which is an interest in real property, the jurisdiction of which belongs to the CFI. Even if the decision is valid, res judicata cannot apply because the issue in that case is only possession while in the CFI, its ownership. Depra cannot refuse to pay for the encroaching part of Dumlaos houseand at the same time sell the encroached part of his lot. He is entitled to such removal only when after having chosen to sell the encroached lot, Dumalo failed to pay. In this case, Dumlao had expressed willingness to pay for the land, but Depra refused to sell. The judgment was set aside, case was remanded, and the SC set the following guidelines for enforcement of rights under Art. 448 and 546 (This is what sir emphasized!): 1. TC must determine the fair price of the land, expenses for improvement and increase in value of land due to improvements. 2. TC must grant period where: a) landowner must exercise option b) parties must pay in accord with the option chosen c) builder can refuse to offer to sell if value of land is greater than the value of improvements d) if the situation is that of (c), the parties can agree upon the terms of the lease. If there are no agreements, the TC must fix the terms. Ortiz vs Kayanan All the fruits that the possessor may receive from the time that he is summoned or when he answers the complaint must be delivered or paid by him to the owner or lawful possessor. Such is the time when his good faith has ceased. While he may retain the property until he is reimbursed for necessary and useful expenses, all the fruits he receives from the moment his good faith ceases must be deferred or paid by him to the LO. He may, however, secure the reimbursement of his expenses by using the fruits to pay it off (deduct the value of the fruits he receives from the time his good faith ceases from the reimbursement due him). Tecnogas Phil. Manufacturing Corp. vs CA Facts 41
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PROPERTY REVIEWER
Tecnogas discovered that portions of its buildings and wall were occupying Uys land. Tecnogas offered to buy the land but Uy refused. Uy then caused canal to be dug along Tecongas wall, causing the wall to collapse. Held Tecnogas did not lose its rights under Art. 448 merely because of the fact that some years after acquiring the property in good faith, it learned about and aptly recognized the right of Uy to a portion of the land occupied by the building. The supervening awareness does not prejudice its right to claim the status of a builder in good faith. Uys insistence on the removal of the encroaching structures as the proper remedy is legally flawed. This is not one of the remedies bestowed upon by law. He will only be able to avail of it if and when he chooses to compel the petitioner to buy the land at a reasonable price but the latter fails to pay such price. His options are limited to (1) appropriating the encroaching portion of Tenogas building after payment of proper indemnity, (2) obliging the latter to buy the lot occupied by the structure. Pecson v CA Facts Pecson is an owner of an apartment building in a commercial lot. He failed to pay the realty taxes thus the lot was sold at a public auction to Nepomuceno. The latter then sold the lot to the Nuguid spouses. Pecson challenged the validity of the auction sale. One of his contentions is that the auction sale of the commercial lot did not include the sale of the apartment building. This was based on the fact that the Certificate of Sale of Delinquent Property did not mention the building. The TC and the CA upheld this contention. The spouses then filed a motion for delivery of the possession of the lot and the apartment building, citing Art 546. TC ordered the spouses to reimburse Pecson the construction cost of the building for them to be entitled to the possession of the lot and the improvements on it and for Pecson to pay rentals to the spouses. CA affirmed. Held Arts. 448 and 546 are applicable in this case. Art 448 refers to a land whose ownership is claimed by at least 2 parties, one of whom has built, or sown,or planted something, which may have been done in GF or BF. The rule on good faith in Art 526 shall be applied in determining whether a BPS had acted in GF. As held in Coleongco, Art 448 does not apply where the true owner himself is the BPS since the issue of BF or GF in this case is immaterial. The rule on indemnity in Art 546 may be applied by analogy to the improvements since the primary intent of Art 448 is to avoid a state of co-ownership. But Pecson should not pay rentals to the spouses. The spouses, having opted to appropriate the improvement on the lot, have to reimburse Pecson of the cost of construction of the building (in accordance with Art 546). Pecson has the right to retain the improvements until he is reimbursed. An implied tenancy or possession in fact is created pending the payment of the corresponding indemnity. Pleasantville Devt Corp v CA Facts Edith Robillo purchased from Pleasantville a land (Lot 9) in its subdivision in Bacolod. The rights over the lot were then bought by Jardinico. Lot 9 was vacant at that time. Upon completion of payments and securing a TCT in his name, Jardinico discovered that improvements had been introduced 42
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PROPERTY REVIEWER
on Lot 9 by Wilson Kee, who had taken possession thereof. It appears that Kee bought on installment Lot 8 from CTTEI, the real estate agent of Pleasantville. Kee possessed the lot even before the completion of payments. When Kee and his wife inspected Lot 8, the lot pointed to them was Lot 9 instead of Lot 8. Jardinico confronted Kee after discovering that he was occupying Lot 9. Kee refused to vacate hence Jardinico filed an ejectment suit. CA ruled that Kee was a builder in GF, as he was unaware of the mix-up when he began the construction of the improvements. The erroneous delivery was due to the fault of the CTTEI and thus imputable to Pleasantville, the principal. Held The SC agrees with the CA that Kee is a builder in GF. The roots of the controversy can be traced in the errors committed by CTTEI when it pointed the wrong lot to Kee. Good faith consists in the belief of the builder that the land he is building on is his and he is ignorant of any defect or flaw in his title. And as good faith is presumed, Pleasantville has the burden of proving bad faith on the part of Kee. At the time he built the improvements on Lot 8, Kee belived that the said lot was the one he bought. He was not aware that the lot delivered to him was not Lot 8. Pleasantville failed to prove otherwise. Coleongco v Regalado Facts Regalado is an owner of a lot of which Lot 157 was a portion of. Erected in this lot was a building (house) being occupied by the Japanese Army. Regalado then sold Lot 157 to Coleongco who thus became the owner of that particular lot. Coleongco is contending that the sale of Lot 157 included the house, such that when the city was liberated, he collected rentals from the American forces (which succeeded the Japs) for the occupation of the house. It so happened however that after the American forces vacated the house, Regalado occupied it. Coleongco then filed a civil complaint against Regalado. TC ordered Regalado to pay rentals to Coleongco and to remove the house from the said portion of the lot. CA said that the house was formerly the property of Regalado, and that this was constructed in GF, and consequently, that the enjoyment and possession thereof must be considered to have always been in GF, as provided in Arts. 358, 361, 453, 454 of the Old CC (now: Arts. 445, 448, 546,548, respectively). In view of these provisions, the right of the owner of the lot to have the lot cleared of improvements from a builder in GF should be subordinated to the rights of the builder in GF. Rule: Regalado has the right to either pay for the acquisition of Lot 157 or pay for the value of the house, at the option of Coleongco. Held The said rule (now found in Art 448 of the NCC) is not applicable in this case. Regalado constructed the said house on his own land even before he sold the land to Coleongco. Art 448 applies only in cases where a person constructs a building on the land of another in good or bad faith, as the case may be. It does not apply to a case where a person constructs a building on his own land (like in this case), for then there can be no question as to good or bad faith of the builder. Additional Cases Where there is bad faith Felices v. Iriola 43
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PROPERTY REVIEWER
Facts Felices was the grantee of a homestead of over 8 hectares. Felices conveyed in conditional sale to Iriola a portion of his homestead of more than 4 hectares. The conveyance expressly stipulates that after the lapse of 5 years or as soon as may be allowed by law, the vendor or his successors would execute in vendee's favor a deed of absolute sale over the land in question. Two years after the sale, Felices tried to recover the land in question from Iriola, but the latter refused to allow it unless he was paid the alleged value of improvements he had introduced on the property. Held The rule of Art. 453 of the Civil Code invoked by Iriola can not be applied to the instant case for the reason that the improvements in question were made on the premises only after Felices had tried to recover the land in question from him, and even during the pendency of this action in the court below. After Iriola had refused to restore the land to Felices, to the extent that the latter even had to resort to the present action to recover his property, Felices could no longer be regarded as having impliedly assented or conformed to the improvements thereafter made by appellant on the premises. Upon the other hand, Iriola, recognizing as he does Felices' right to get back his property, continued to act in bad faith when he made improvements on the land in question after he had already been asked extra-judicially and judicially, to surrender and return its possession to appellee; and as a penalty for such bad faith, he must forfeit his improvements without any right to reimbursement therefor. J. M. Tuason & Co., inc., v. Jurilla Facts J.M. Tuason and Co., Inc's ownership of the land object of this litigation is admitted by Vicente and Ester Jurilla and supported by Transfer Certificate of Title. Jurilla took possession of a portion of said property and constructed therein a house and other improvements without plaintiff's consent or knowledge. Hence, J.M. Tuason and Co., Inc claims rents for the area occupied by the Jurillas. The Jurillas claim that said portion of the property occupied by them was acquired by them by virtue of an alleged deed of sale executed by Florencio Deudor in their favor. They also claim that they have improvements introduced and that they are builders in good faith.

Held The records disclosed that JM Tuason has Transfer Certificate of Title, while the Jurillas based their rights on the alleged Testimonial Title, it is observed that JM Tuasons title is indefeasible and against the whole world, while that of the Jurillas is not and could not even be considered an imperfect title, as well known in Land Registration Act No. 496. The fact that the Jurillas admit not only in their pleading but also in open court that JM Tuason corporation is the owner of the property in question and that its title is an incontrovertible one, the right of JM Tuason to recover possession of the lot in question cannot be seriously questioned by the Jurillas and its right thereto is imprescriptible. At the time they bought the property from the Deudor, they did not inquire whether the said Deudor was a registered owner of the property. Besides, they never registered the deed of sale in the Office of the Registry of Deed of Quezon City. In order that defendants may be called buyers in good faith, it must be shown by clear 44

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PROPERTY REVIEWER
and convincing evidence that upon buying the property, they were not aware of any flaw in their title or made of acquisition. The fact Jurilla tendered to the Bulacan Subdivision the balance of the consideration of P4,500 and refused to accept the tender, is a clear indication that notice to Vicente Jurilla, who is a lawyer, that the party from whom he was supposed to have bought the property was not the owner thereof and could not, therefore, transmit title to him. *Now lets move on to Accession Natural: (Continuation under Accession Continua; Immovable property) (2) Accession natural may be in the form of either: (i) Alluvium the accretion which lands adjoining the banks or rivers, lakes, creeks or torrents gradually receive from the effects of the current of the water (Art. 457) by the land. (2) Requisites of alluvium: (a) The accretion must be gradual 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 long the shore, is therefore, the work of nature. (b) The cause of the accretion must be the current of the water The word current indicates the participation of the body of water in the ebb and flow of waters due to high and low tide. (c) The land where the accretion takes place must be adjacent to the banks of the rivers Art. 457 deals with the accessions of lands situated on banks of rivers but not on the seashore. *riparian owner owner of the land fronting such riverbanks (d) Alluvium must be natural Alluvium must be the exclusive work of nature and not made artificially by the riparian owner. (3) Elements of the river and their ownership A river is a compound consisting of 3 elements: (a) running waters (b) the bed, and (c) the banks All these parts constitute the whole river. It cannot exist without ALL its parts. (4) River bed 45
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Art. 457. To the owner of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters. (1) Distinguished from accretion Alluvuim 1. Applied to the deposit of soil or to the soil itself Accretion 1. Denotes the act or process by which a riparian land gradually and imperceptively receives addition made by the water to which the land is contiguous 2. The addition or increase received

2. Brought about by accretion

PROPERTY REVIEWER
Art. 70 of the Spanish Law of Waters which defines beds of rivers and creeks provides: The natural bed or channel pf a creek or river is the ground covered by its waters during the highest ordinary floods. River, such that if there is any accretion to speak of, it was man-made and artificial and not the result of gradual and imperceptible sedimentation by the waters of the river. Held What R claims as accretion is really an encroachment a portion of the Meycauayan River by reclamation caused by their having transferred their dikes towards the river bed. Being a portion of the bed of the said river, the lots are of the public dominion and not registerable under the Land Registration Act. Navarro vs IAC Facts Pascual claimed ownership to a parcel of land claiming that it was an accretion to his property. Navarro opposed saying that such property has always been part of public property. Subject property is situated between 2 rivers and is fronted by the Manila Bay. If the land in dispute was formed by the action of the 2 rivers, then it is an accretion, hence owned by Pascual. If it was formed by the action of Manila Bay, then it is foreshore land, hence part of public domain. Held The property is foreshore land, hence part of public domain. The property is an accretion of on a sea bank, Manila Bay being an inlet or arm of the sea; as such, the disputed property is, under Art. 4 of the 1886 Spanish Law of Waters, public domain. SC also said: Riparian owners are, strictly speaking, distinct from littoral owners, the latter being owners of the lands bordering the shore of the sea or lake or other tidal waters. The alluvium, by mandate of Art. 457, is automatically owned by the 46
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(5) River banks Art. 73 of the of the Spanish Law of Waters defines the phrase banks of a river as referring to those lateral strips or zones of its bed which are washed by the stream only during such high floods as do not cause inundations. (6) Reason for alluvium A riparian owner is granted the right to any land or alluvion deposited by a river: (a) To compensate him for the danger of loss that he suffers because of the location if his land (because estates bordering on rivers are exposed to floods and other evils produced by the destructive force of the waters). (b) To compensate him for the encumbrances and various kinds of easements to which his property is subject. (c) To promote the interests of agriculture for the riparian owner is in the best position to utilize accretion. (d) Besides, aside from the above, it is impossible to prove from whose lands the gradual additions came from. Cases Republic vs CA Facts The Republic opposed the registration of lots adjacent to the property of R on the ground that they merely transferred their dikes further down the river bed of the Meycauayan

PROPERTY REVIEWER
riparian owner from the moment the soil deposit can be seen but is not automatically registered property, hence, subject to acquisition through prescription by 3rd persons. (Grande vs CA) *prescription period: 30 years (ii) Avulsion the accretion which takes place whenever the current of a river, lake, creek or torrent segregates from an estate on its bank a known portion of land and transfers it to another estate (Art. 459) River a natural surface stream of water of considerable volume and permanent or seasonal flow Creek a small islet extending further into the land; a natural stream of water normally smaller than and often tributary to a river Torrent a violet stream of water as a flooded river or one suddenly raised by a heavy rain and descending a steep incline; a raging flood or rushing stream of water (b) The segregation and transfer must be sudden or abrupt * In the absence of evidence as to whether the change in the course of a river was caused by accretion and erosion (alluvion) or whether it had occurred through avulsion, the presumption is that the change was gradual and was caused by alluvion (c) The portion of land transported must be known and identifiable (3) Removal within 2 years The former owner preserves his ownership of the segregated portion provided he removes (not merely claims) the same within the period of 2 yrs. Although Art. 459 does not expressly say, it would seem that his failure to do so would have the effect of automatically transferring ownership over it to the owner of the other estate. The period of 2 yrs. is considered sufficient for the original owner to effect the removal of the transferred portion which may be a considerable area. Among the reasons given for the clause on removal within 2 yrs. are the following: (a) The segregated portion is usually very small and it is thus useless to the original 47
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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. (1) Distinguished from Alluvium Alluvium 1. Deposit of soil is gradual 2. Deposit of the soil belongs to the owner of the property where the same was deposited 3. The soil cannot be identified Avulsion 1. Deposit of soil is sudden or abrupt 2. The owner of the property from which a part was detached retains the ownership thereof (2 yrs) 3. The detached portion can be identified

(2) Requisites of Avulsion (a) The segregation and transfer must be caused by the current of a river, creek or torrent. Current the continuous movement of a body of water, often horizontal, in a certain direction

PROPERTY REVIEWER
owner of the land from which it originated and which is generally far from the other land (b) The principle involved is similar to that underlying Art. 460 whereby the owner of uprooted trees must claim them within 6 mos. (c) If the owner of the separated portion retains his ownership without any qualification, he would have a right to enter the other estate at any time, and this easement, aside from preventing the latter estate from enjoying his property, may create illfeeling between them; and (d) After a time the transferred portion may become permanently attached, physically speaking to the other land; the original owner should, therefore, remove it as soon as possible and within 2 yrs. Art. 460. Trees uprooted and carried away by the current of the waters belong to the owner of the land which they may cast, if the owners do not claim them within 6 months. If such owners claim them, they shall pay the expenses incurred in gathering them or putting them in a safe place. (1) Application Art. 460 applies only to uprooted trees. If a known portion of land with trees standing thereon is carried away by the current to another land, Art. 459 governs. (2) Liability of claimant The original owner claiming the trees is liable: to pay the expenses incurred by the owner of the land upon which they have been cast in gathering them, or putting them in a safe place (3) Period for making claim Period is for 6 mos. The period is a condition and not a period of prescription. After a claim is brought within 6 mos. an action may be brought within the period involved by law for prescription of movables. (iii)Change of river beds that which takes place when a river bed is abandoned through the natural change in the course of the waters (Art. 461) 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. 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. (1) Requisites for the application of Art. 461: (a) There must be a change in the natural course of the waters of the river. (b) The change must be abrupt or sudden. (2) When river beds deemed abandoned Abandonment implies the giving up or relinquishment of something. The change in the course of a river does not ipso facto result in the abandonment of the river but must be the reason for its abandonment, i.e., the river is abandoned because of or through the natural change in the course of the water.

48
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PROPERTY REVIEWER
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. (1) New bed through private estate becomes public dominion The bed of a public river or stream is of public ownership. If the river changes its course and opens a new bed, this bed becomes public dominion even if it is on private property. 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. (1) River divides itself into branches Art. 463 refers to the formation of an island causing a river dividing itself into branches resulting in: (a) the isolation of a piece of land or part thereof; or (b) the separation of a portion of land from an estate by the current (2) Application Art. 463 applies whether the river be navigable or floatable or not, for in both cases the owner should not lose his ownership simply because a change of river course converted his land into an island. Case Baes vs CA Facts The government dug a canal on a portion of land owned by Baes to streamline the Tripa de Callina creek. In exchange for such portion, Baes was given a lot with an equal area. When Baes had his lots resurveyed and subdivided, the area of the old creek bed was included such that his landholdings increased. Upon petition by the govt., TC ordered status quo prior to the resurvey. However, Baes contends that under Art. 461, the area of the old creek should belong to him because it says that once the river bed has been abandoned, the owners of the land invaded by the rivers new course automatically become the owner of the abandoned bed. Held Baes contention is impressed with merit. The law speaks of the natural change in the course of the stream, and of the riparian owner is entitled to compensation for damage to or loss of property due to natural causes, theres all the more reason to compensate him when the change in the course of the river, as in this case, is effected through artificial means. BUT, since he has been given an equivalent lot, he is no longer entitled under the principle of unjust enrichment. (iv) Formation of islands either on the seas within the jurisdiction of the Phils. On lakes, and on navigable or floatable rivers (Art. 464) or non-navigable and non-floatable rivers (Art. 465). (See PD 1067 Water Code) Art. 464. Islands which may be formed on the seas within the jurisdiction of the Phils., 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 49
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PROPERTY REVIEWER
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 a nearer margin shall be sole owner thereof. (1) Ownership of islands formed through alluvion (a) If formed: (a.1) on the seas within Phil. jurisdiction (a.2) on lakes, and (a.3) on navigable or floatable waters, the island belongs to the State (b) If formed in non-navigable and non-floatable rivers: (b.1) it belongs to the nearest riparian owner or owner of the margin or bank nearest to it as he is considered in the best position to cultivate and develop the island (b.2) it is divided longitudinally in halves, if it is in the middle of the river (c) Concept of navigable river A navigable river is one which forms in its ordinary condition by itself or by uniting with other waters a continuous highway over with other waters a continuous highway over which commerce is or may be carried on. Test: A river is navigable if it is used or susceptible of being used, in its ordinary condition, as a highway of commerce, that is, for trade and travel in the usual and ordinary modes. *Moving on to Accession Continua; Movable property: (b) With regard to movable property (1) Adjunction or Conjunction that which takes place whenever movable things belonging to different owners are united in such a way that they cannot be separated without injury, thereby forming a single object (Art. 466)

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 values. (1) Characteristics of adjunction (a) There are two movables belonging to different owners (b) They are united in such a way that they form a single object (c) They are so inseparable that their separation would impair their nature or result in substantial injury to either component. (2) Kinds of adjunction: (a) inclusio or engraftment (b) soldadura or attachment ferruminatio objects are of the same metal plumbatura objects are diff. metals (c) tejido or weaving (d) pintura or painting (e) escritura or writing (3) Ownership of new object formed by adjunction (a) If the union took place without bad faith, the owner of the principal thing acquires the accessory, with the obligation to indemnify the former owner of the accessory for its value in its uncontroverted state. 50

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PROPERTY REVIEWER
(b) If the union took place in bad faith, Art. 470 applies. Art. 467. The principal thing, as between two things incorporated, is deemed to be that to which the 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 incorporated is the principal one, the thing of the greater value shall be so considered, and as between two things of equal value, that of the greater volume. (1) TEST to determine principal in adjunction: In order of application, the principal is that: (a) To which the other (accessory) has seen united as an ornament or for its use or perfection (Art. 467); (b) Of greater value, if they are unequal values (c) Of greater volume, if they are of an equal value (Art. 468); and (d) That of greater merits taking into consideration all the pertinent legal provision applicable as well as the comparative, merits, utility and volume of their respective things. (2) Where adjunction involves 3 or more things Art. 466 should be applied in an equitable manner. The principal should be determined and distinguished from the others which would be considered the accessories. Art. 469. Whenever the things united can be separated without injury, their respective owners may demand their separation. Nevertheless, in case the things 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. (1) When separation of things united is allowed. (a) Separation without injury Whenever the separation can be done without injury, their respective owners may demand separation (b) Accessory much more precious Where 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 principal thing may suffer some injury. The owner who made or caused the union or incorporation shall bear the expenses for separation because he is the one considered at fault although he also acted in bad faith. (c) Owner of principal acted in bad faith The owner of the accessory thing may separate it even if the principal thing be destroyed. 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.

(1) Adjunction in bad faith 51

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PROPERTY REVIEWER
Bad faith on the owner of the accessory (a) he shall lose the thing incorporated; and (b) he shall be liable for damage to the owner of the principal thing Bad faith on the part of the owner of the principal (a) the owner of the accessory thing is given the option either: (i) to require the owner of the principal thing to pay the value of the accessory thing; or (ii) to have the accessory thing separated even if for the purpose it be necessary to destroy the principal thing (b) he shall be entitled to damages in either case Bad faith on the part of both (a) Their respective rights shall be determined as though both had acted in good faith. Art. 453 applies. 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. (1) Form of indemnity The innocent owner has the option to demand: (a) the delivery of a thing equal in kind and value and in all other respects (quantity, quality, appearance); or (b) the payment of its price, including its sentimental value (Art. 475) as appraised by experts.

(2) Commixtion or confusion that which takes place whenever there is a mixture of things solid or liquid belonging to different owners, the mixture of solids being called commixtion, while that of liquids, confusion (Art. 472).
Cases Siari Valley Estates vs Lucasan Facts SVE sought to recover 200 heads of cattle that were driven or wandered from its pasture lands into the adjoining lands of Lucasan. Lucasan himself admitted such commixtion although he says that SVE had already retrieved its animals. Which cattle belong to the owner can no longer be determined. Lower court found for SVE. Held Lucasan willfully caused the commixtion such that under Art. 383 (now 473) he will be held to forfeit his own cattle. No actual evidence exists that the 823 missing cattle were taken by Lucasan, but in view of the proof that his men, on 2 occasions, drove away more than 30 heads, it may be presumed that the others must have also been driven away on subsequent or prior occasions. One who stole a part of the money must have also taken the larger sum lost by the offended party. Evidence: 1) An average increase of 30% per year should give Lucasan around 417 heads in 1951, yet in the same year, after selling 230 heads, he still had 400. 2) Lucasans original stock was entirely native, yet when 322 heads were rounded up for inspection, only 29 were found to be native. Santos vs Bernabe Facts 52

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PROPERTY REVIEWER
Jose Bernabe owns a rice warehouse where Urbano Santos deposited 778 cavans and 38 kilos of palay, and Pablo Tiongson 1,026 cavans and 9 kilos. The sacks of palay did not bear any marks or signs, nor were they separated one from the other. Pablo Tiongson filed action to recover the palay he deposited in the warehouse but there were only 924 cavans and 31 and a half kilos of palay in the warehouse at the time of attachment. Urbano Santos sought to recover his palay mixed with those which Tiongson attached. The CFI ordered Pablo Tiongson to pay Urbano Santos the value of 778 cavans and 38 kilos of palay at the rate of P3 per cavan. The provincial sheriff and Pablo Tiongson appeals this decision to the SC. Held Tiongson must pay Santos the value of 396.49 cavans of palay in proportion to the 924 cavans of palay which were attached and sold, the 778 cavans and 38 kilos of palay belonging to the plaintiff Urbano Santos, having been mixed with the 1,026 cavans and 9 kilos of palay belonging to the defendant Pablo Tiongson in Jose Bernabes warehouse, the sheriff having found only 924 cavans and 31 and a half kilos of palay in said warehouse at the time of the attachment thereof; and there being no means of separating from said 924 cavans and 31 and a half kilos of palay belonging to Urbano Santos and those belonging to Pablo Tiongson. Art. 381 CC states, If, by the will of their owners, two things of identical or dissimilar nature are mixed, or if the mixture occurs accidentally, if in the latter case the things cannot be separated without injury, each owner shall acquire a right in the mixture proportionate to the part belonging to him according to the value of the things mixed or commingled. 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 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. (1) Rules governing mixture (a) Mixture by the will of the owners Their rights shall first be governed by their stipulations. In the absence of any stipulation, each owner acquires a right or interest in the mixture in proportion to the value of his material as in co-ownership (See Art. 485). (b) Mixture caused by an owner in good faith or by chance The share of each owner shall also be proportional to the value of the part which belonged to him If the things mixed can be separated without injury, their respective owners may demand separation. The expenses incident to 53
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PROPERTY REVIEWER
separation shall be borne by all the owners in proportion to their respective interests in the mixture. (c) Mixture caused by an owner in bad faith The actor forfeits the thing belonging to him and is liable to pay indemnity for the damages caused to the other owner (Art. 473, par. 2) (d) Mixture made with the knowledge and without the objection of the other owner Applying the provisions of Art. 470, par. 3, by analogy, their respective rights shall be determined as though both acted in good faith. value of the latter, for artistic or scientific reasons, is considerably more than that of the material. (1) Rules governing specification (a) Person made use of material of another in good faith The worker becomes the owner of the new thing but he must indemnify the owner (also in good faith) of the material for its value. Exception: If the material is more precious or of more value than the new thing, the owner of the materials may choose: (i) to appropriate the new thing to himself but mist pay for the value of the work or labor; or (ii) to demand indemnity for the material (b) Person made use of material of another in bad faith The owner of the material has the option either: (i) to appropriate the work to himself without paying the maker; or (ii) to demand the value of the material plus damages. EXCEPTION: The first option is not available if the value of the work, for artistic or scientific reasons, is considerably more than that of the value of the material (Art. 474). (c) Person made use of material of another with the consent and without the objection of the latter Applying the provisions of Art. 470, par. 3 by analogy, the rights shall be determined as though both acted in good faith. 54
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(3) Specification that which takes place whenever a person imparts a new form to materials belonging to another person (Art. 474).
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

PROPERTY REVIEWER
(2) Distinguished from adjunction and mixture Adjunction 1. Involves 2 things Mixture 1. Involves 2 things Specificati on 1. Involves only a thing whose form has changed 2. Component parts retain or preserve their nature 3. Principle that accessory follows the principal applies

2. Component parts retain or preserve their nature 3. Principle that accessory follows the principal apples

2. Things mixed may or may not retain their respective original nature 3. Coownership results

Art. 475. In the preceding articles, sentimental value shall be duly appreciated. (1) Appraisal of the sentimental value Sentimental value shall be duly appreciated in the payment of the proper indemnity in accessions with respect to movable property in the cases provided in the preceding articles. (2) Application Art. 475 applies particularly to Art. 468, par. 1 and Art. 469, par. 2.

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