PROPERTY(Audio + some discussion notes) 1 Dean Navarro

PROPERTY
ART.415 -IMMOVABLE PROPERTY Mindanao Bus Company Case SC held that the industry doesnt carried on in this building where the repair shop is located the transportation business is carried on outside. The repair equipment is not immobilized but remained personal property. Can the parties agree that certain machinery which has been installed by the owner of the tenement for the industry or works which will be carried on in which tend the need of such industry works Can the owner of such machinery and creditor agree to treat this machinery as personal property? Subjected them to chattel mortgage? Ans: Yes. Principle of Estoppel, although the machinery inside the building & installed by the owner & they tend to meet directly the needs of industry / works which may be carried on in that building. If the parties agree to treat the machinery as chattel & enter into a chattel mortgage neither of the will be permitted to question the validity of chattel mortgage later on the ground that the subject was actually real property. (6) Animal houses, Pigeon houses, breeding places of similar nature In case their owner has placed the or preserves them with the intention to have them permanently attached to the land & forming a permanent part of it, animals in these places are included. Fish ponds > Bangus (immovable even swimming around) For purposes of sale considered movable property (Bangus Sale) Donate Bangus to someone> donation of personal property (7) Fertilizers used on a piece of land Insecticides same rules (8) Mines, quarries & slag dumps, while the matter thereof forms part of the bed, & water either running or stagnant. Water referred to are Natural Water! Drums of water in your yard not referred into in Art.415 (8) Water in rivers, lagoons, lakes. (9) Docks & Structures which though floating, are intended by their nature and object to remain at a fixed placed on a river, lake, or coast. Example of REAL: Barge in a fixed place (real property even if its floating)

NAPOCOR power barge (dock along shore, port supply electricity to provinces) Floating Restaurant (fixed place) MOVABLE: Boat which take on passenger, goes on a cruise on Manila Bay, while cruising around dinner is served

(10) Contract for Public works and servitude and other real right over immovable property ART.416-MOVABLE ART.417 Real property which by any special provision of the law is considered movable Example: growing crops By law is movable/personal, CHATTEL MORTGAGE LAW provision on sales While still growing- mobilization by anticipation (Sibal vs Valdez) Anticipating what will be subsequently gathered even before they are gathered there is mobilization by anticipation. Cannot be the subject of chattel mortgage. -Forces of nature which are brought under control by science Movable: Nuclear power, wind power, electricity -Shares of stock in any corporation = movable Regardless that the corporation which the shares are held is real property or even all of the assets of corporations consists of real property. PUBLIC DOMINION or PRIVATE OWNERSHIP Public Dominion -intended for public use, public service, development of the national wealth Public use (roads, street, parks) -open indiscriminately to the public, open for every one Property of Public Dominion CANNOT BE: (CSL-PAER) The Subject matter of contracts Sold Lease Acquired by prescription Attached & sold to public auction to satisfy public judgment Burdened by easement Registered under Torrens title system, if title is issued covering property of public dominion = not a title The Government has property of 2 types:

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PROPERTY(Audio + some discussion notes) 2 Dean Navarro

1. Public Dominion 2. Patrimonial Property-can be subject of contracts Property of Public Dominion as long as it remains such is subject to special rules. Is it possible to convert property of public dominion to patrimonial property? YES. Is the mere fact of property of public dominion is no longer actually being used for public use or no longer devoted for public service, will that automatically convert from public dominion into patrimonial property? NO. -There must be a formal declaration in the case of national government property. -Formal declaration from the executive, legislative of such conversion. Otherwise, the property remains the property of public dominion. Property of Political Subdivisions- conversion must be authorized by law (Roponggi Cases) -Property of Philippines located in Japan, given to us by way of reparation by Japanese as part of Reparation Agreement -Originally intended for the use of Embassy but never used for that purpose. After long period of time, there was an attempt to sell the properties SC: The mere fact that the properties in Japan have not been actually used for their original purpose doesnt automatically convert the property into patrimonial property. -Still part o Public Domain & consequently not available for private appropriation or ownership until theres a formal declaration on the part of government to withdraw it from being such -Abandonment cannot be inferred. It must be definite! On the part of Local Government Entities -properties are subdivided into properties for public use & patrimonial property Public use- open indiscriminately to the public (Zamboanga Del Norte vs City of Zamboanga) SC ruled: As long as the property is for governmental purposes, property is for public use (Salas vs Jarencio) -Absence of clear evidence as to the source of the funds used in acquiring the property which was currently being held by the local government unit, presumption- land came from the state. -LGU property = no clear showing of funds used = presumption is the land came from the state. LGU is holding merely in TRUST for the state, for the benefit of inhabitants of the locality If that is so, it cant be considered as Patrimonial proper ty, still public property. National Legislative Absolute control over this property. LGU cant enter into contracts, cant validly authorized by means of ordinance. Awarding of contracts in a certain streets in favor of private individuals for purpose of having flee market there As long as the streets remains the street, its for public use & therefore beyond the power of local government unit to deal with by means of contracts. Example: LGU enters into a contract. Certain street be converted into a flea market. Ordinance authorized it. SC ruled: IT CANT BE. What is quite clear from this cases is that while even under Local Government code, LGU unit are allowed to withdraw certain streets when no longer necessary withdraw from public use. They cant convert it without actually withdrawing it from public use, the will still maintain it as a street and at the same time operate it as a flea market As long as they are not withdrawn from public use, they remain property of public use & cant at the same ti me enter into contract with private individuals who intend to operate flee market. (Chavez vs PEA) Agreement between Public Estate Authority and Amari -Amari will reclaim certain submerged lands, as payment, it would be paid with reclaimed lands SC ruled: Reclaimed lands on freedom island (157 hectares) covered by titles under PEA- are ALIENABLE lands of public domain. But they only be LEASED NOT SOLD to private corporations. They may be sold to Filipino Citizens Submerged Areas -Inalienable, outside the commerce of man -only after the PEA reclaim them may the government reclassify them as alienable & disposable lands if no longer needed for public service -Transfer of submerged land into Amari = VOID, since the constitution prohibit the alienation of our National Resources other than the agricultural land of the public domain OWNERSHIP Traditional attributes (Right of Owner): Right to Use Right to The Fruits Right to Consume the thing but its use

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PROPERTY(Audio + some discussion notes) 3 Dean Navarro

Right to Dispose Right to Vindicate/Recover -Later on, owner enclosed it with a fence. Consequently, neighbor cant pass through his land & had to take another route to reach Public Street SC ruled: Namuum Absque Injurie Property owner is simply exercising a right explicitly granted to him by law. The right to enclose his property with a fence in a meantime, great inconvenience may caused by his neighbors but these neighbors have no legal right to claim damages. (cases decided: NO EASEMENT YET) Only after the case was decided, Easement should have created & SC ruled that they should pay indemnity. As long as theres no easement yet, you have perfect right to enclose your property with fence. ART.431 Property owner (jus utendi) -right to use his property should be exercised in such a way as not to injure others -use your own as not to injure others In one case 2 adjoining properties -owner of higher property built certain artificial bodies of water, artificial lakes, water pots, etc. -during inclement/bad weather, some of these constructions were washed away & they fell to the adjoining lower estate SC ruled: Case should be reinstated. Applying Art.431, use your own as not to injure others, Construction of artificial bodies of water on the higher estate as something which causes during bad weather as something prejudicial to the adjoining lower estate ART.432 Emergency Doctrine -you are the owner of a thing, you have no right to prohibit the interference of another person with your property as long as the interference is necessary to prevent an imminent danger & as long as the threatened damage or injury is greater(much greater) than the damage which would arise to you from the interference with your property -Negligence on the part of the person interfering has not preclude resort to the rule Example: CAR- another vehicle driven by X (recklessly slammed in Meralco Post) started to burn Mr.X (even though negligent in driving his car) would have the right to interfere with my property if I happen to have fire extinguisher. I dont have a right to prohibit the interference to use the fire extinguisher. His negligence doesnt preclude him from invoking the rule. Any possible damage of my fire extinguisher is lesser than the damage caused in burning his car

Limitation on the rights of owner -comes from the State (Inherent) -imposed by law (Easements) -imposed by person transmitting property ART.429 Doctrine of Self-Help -Owner or lawful possessor -Allowed by law -The use of such force as may be reasonably necessary to repel or prevent an ACTUAL or THREATENED unlawful deprivation or physical invasion or usurpation of property Only reasonable force should be used Invoke only at the time when there is ACTUAL or THREATENED unlawful physical invasion NOT THEREAFTER! If property has already been taken by 3 person you are NOT ALLOWED to use force to get it back, you must invoke the aid of judicial authorities. (German Management& Service Incorporated) -Land owner executed a power of attorney in favor of German Management service to develop such property -German Mgt discovered that certain individuals are occupying & cultivating the property -German Mgt used Physical force to oust this occupants who are cultivating the portion of the land -later on they invoked principle of Self-held SC ruled: NOT PROPER. Not disputed that when they tried to enter property, those occupants were already cultivating land for some time. A party of peaceable, quiet possession shall not be turned out with strong hands, violence or terror Doctrine of Self-Help- ACTUAL & THREATENED dispossession -when possession already lost > Judicial Process for the recovery of his property ART.430 Owner of the property has the right to enclose property with fence, wall, or any other means (Custodio vs CA) -Property owned by a person with no fence around his property. Some of his neighbors where passing through his land to reach the public road
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PROPERTY(Audio + some discussion notes) 4 Dean Navarro

-Rule: Hidden Treasure belongs to the owner of land, building, and other property in which it is found -If found by another person (other than the owner of the land) by chance = to owner & to finder rule -If trespasser, NOT entitled to the rule or any share -The requires finding must be by CHANCE = traditional meaning is Not intended, totally unexpected Supposing That a man has been given the usufruct of a parcel of land, by his friend, he stay there on that land, One day there is an old man, gave him what appear to be an old map (treasure buried by pirates long time ago), Usufructuary believing what was told to him by the old man, digs at the precise spot and true enough he finds Hidden Treasure, will he be entitled to the hidden treasure? Is it by chance? -If by traditional view, not entitled because he intentionally looked for it -MODERN VIEW: by CHANCE= by STROKE of GOOD FORTUNE -Yamashita Treasure: many have tried but never located, no guaranty that youll find one, even if you have a map. So if you find one = finding is by stroke of GOOD FORTUNE (by chance) -If finder, precisely employed to find treasure= NOT ENTITLED Art.438 remuneration will depend on the contract for the work he would be undertaken (share/direct compensation) Preliminary Examination: Municipality vs Rojas Town Plaza outside the commerce of man, cannot be the subject of contract Davao Sawmill vs City Assessor, Treasurer Machineries owned by the Lessee is personal not real property. Leung Yee vs Strong Machine Co Chattel Mortgage= Personal Property Real Estate Mortgage= Real Property ACCESSION General Rule: ART.440 If you are the owner of the property by right of accession =you are entitled also own which is PRODUCED by that property or which is INCORPORATED or ATTACHED to that property. Either NATURALLY or ARTIFICIALLY

ART.433 Actual possession under claim of ownership raises a disputable presumption of ownership. The true owner must resort to judicial process for the recovery of the property. ART.434 Action to recover requisites: 1. Property must be indentified 2. Plaintiff must rely on the strength of his title & not on the weakness of the defendants claim He who alleges, has the burden of proof ART.435 Reinstatement of Constitution Law Inherent Power of State Power of Eminent Domain- upon payment of just compensation ART.436 Police power- if property was damaged as a consequence in the exercise of Police Power no right to any indemnity ART.437 Owner of property is the owner not only on its surface but of everything under it. It doesnt mean that everything to be taken under it should be literally construed. Exception: Minerals- State (Regalian Doctrine) Up to what depth that a person can be the owner on what is beneath your land? -Extends up to such depth as you can still make use of it (MPC vs Ibrahim) -Property owner, unknown to him MPC constructed a tunnel passing beneath his land. MPC is drawing water from Agos River ART.438 Hidden Treasure Any hidden & unknown deposit of Money, jewelry, or other precious objects, the lawful owner of which does not appear (unknown owner) -Neighbor digging a hole and hiding a jar full of jewelry = NOT Hidden Treasure because you know the owner (lawful ownership must not appear) -law enumerates Money, jewelry, or other precious objects (applying Ejusdem generis rule, limited to things of similar nature) -Therefore, Minerals & oil NOT hidden treasure (owned by the state)

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PROPERTY(Audio + some discussion notes) 5 Dean Navarro

Various kind of Accession Accession Discreta right given to the owner to everything which is produced by that property 3 Types of fruits which can be possibly produced 1. Natural- Spontaneous products of soil, young product of animals (Ex. Animal manure, mushrooms not cultivated usually after thunderstorm-some of these are poisonous) 2. Industrial-produced by lands thru human labor & cultivation (Ex. Mushroom produced/cultured in a farm) 3. Civil- rents, price of leases of lands & other property, life annuities & other similar income Accession Continua- right given to the owner to everything which is incorporated or attached to his property either naturally or artificially With regard to IMMOVABLE PROPERTY Accession Industrial (sub classification of Accession Continua) -building, planting, sowing Accession Natural -alluvium -avulsion (due to risk exposed, they have right to recoverw/in 2 yrs) -change of river bed -formation of islands With regard to PERSONAL or MOVABLE PROPERTY -adjunction/conjunction -commixtion/confusion -specification To the owner belongs all of the fruits Dont forget however the rule in ART.443: -He who receives the fruits has the obligation to reimburse expenses made by another person in their production, gathering & preservation -law doesnt distinguish people in good faith or persons in bad faith, IT APPLIES TO EVERYONE. If bad faith= as long as you spent for gathering, production & preservation of fruits Owner who is able to get back possession is obligated under ART.443 to reimburse for the expenses incurred for the Production, gathering & preservation If I B,P,S on my own land = No question because he is the owner Accession would not apply Land of another! ART.446 Everything all works of sowing & planting presumed is made by owner and at his expense Disputable Presumption ART.447- Land owner & he decides to build on his property using materials of another person Parcel of Land Build house there Use your materials 2 possibilities- Good faith / Bad faith GF= if I thought I own the material & use it BF= if I knew that you are the owner of materials & I still use it If GF= pay their value of materials owned by you Not liable for damages because GF If BF= pay value of materials + damages Owner of Materials (Rights) If Land- remove materials if possible to do so owner is without injury to the work constructed in GF Limited removal of material- if possible to remove materials without injury it means that its not the case of real attachment ART.443 will not apply if fruits are not yet gathered. (Fruits ungathered = art.443 NOT applicable) If Bad faith & not yet gathered fruits when lawful owner possessor recovers property form you Art.443 not applicable = you simply lose all of these ungathered fruits Apply rules in: Possessor in BF Planters in BF Sowers in BF He who is in Bad faith loses everything he built, planted or sown ART.445 When these rules on Accession in immovable property will apply or when it would not Whatever is B,P,S on land of another together with improvements & repairs thereon shall belong to owner of land

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PROPERTY(Audio + some discussion notes) 6 Dean Navarro

If BF= remove materials in any case (Land owner) aside from the right of damages Art.448 Land owner and somebody B,P,S on his land/ property 1. Determine whether B,P,S is in GF or BF 2. Determine also the Land owner if he is in GF or BF Where will be the land owner be in BF? If he knew that somebody is building on his property and he allowed the building to continue If GF= if he doesnt knew that somebody is Building on his land Builder, planter or Sower would be in GF If he is not aware of any defects or flaw in his title or mode of acquisition. The builder thinks he owns that lands or he thought that she has legal rights to build thereon. If he was aware that he had no legal right to build on the property, but he build, planted the same= BF! Rights Land owner & builder are in GF Landowner- can appropriate what has been built, planted or sown on his land -has to pay proper indemnity to the planter, builder or sower In case of building & planting Land owner has option of selling the Land occupied by the building or planting to the builder or planter He cant however avail the option if the value of land is considerably more than the value of the building or planting Considerably more: If value of land or value of building or planting are more or less the same or the difference of value is not too much Land owner is not precluded of availing of that option Difference of land should be considerable more that the value of building, or planting They can simply enter into lease agreement, if they didnt agree to the terms of lease- the court shall fix the terms thereof. (Art.448) Distinguish PLANTER & SOWER Sower- what actually sow -not produce fruits for long period of time ex. Rice, bananas Supposing rd The building is being leased or rented out by me from 3 persons who is paying me rent during period when builder has right of retention Who is entitled to the renters being paid by rentals? Can renters be offset with indemnity due to me? Planter- last for years and continue producing fruits year after year without having to replant them. Ex. Mango trees, coconut trees Indemnity: Builder spent 500k when he built at the time when Land owner exercises his option to appropriate the building was already worth 5M What is the amount which will constitute proper indemnity? SC deiced: the market value at the time when the indemnity is to be paid, although 500k was spent since at the time when the property is to be paid is worth 5M= it is 5M which is to be paid by Land owner to the builder If land owner decides to appropriate he has to pay indemnity and prior to the payment of proper indemnity to the builderthe builder has the right of retention Ex. If you are the Land owner, Im the builder (Both in GF) LO option is to appropriate the building price of indemnity is 10M prior to your payment 10M to me, I have the right to retain the building and to continue occupying your land (Right of Retention given by law to me) Purpose of right of retention: to ensure that I will be paid the proper indemnity due to me Supposing that during this period of retention while you have not yet paid me the indemnity the building is lost (fortuitous event) Net effect: builder lose the right of retention because you are not obligated as LO to pay for buildings or improvements which are ceased to exist. During period of retention, can the LO demand from the builder the payment of rent? No, as long as the builder has the right of retention he is not compelled to pay rent. Why? Because if he would be required to pay rent that will damage/ injure/negate his security for the payment of indemnity.

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(Ortiz vs Cayanan) Possessor in GF, some improvements for which he was entitled to indemnity, there was right of retention. During retention, detour was constructed thru the property 1 highway was being constructed / repaired by the government. In the meantime, vehicles ahs to take the detour thru property & tools were collected (which was under right of retention) Can the tolls collected by the possessor who had the right of retention that is due to him? YES (Ortiz vs Cayanan) Right of retention not merely a security but rather a way for the extinguishment of the obligation to pay indemnity. (Pecson) SC said NO -if the fruits are collected by builder in GF during his period of exercising his right of retention this fruits/rentals cant be compensated w/ the indemnity due him because he is the one entitled as c consequence of his right of retention to the possession and tenancy of the property. He is also entitled to these fruits so that there could be no compensation between the fruits and the indemnity for the simple reason that they are both due to him. They are both entitled to him. (Better view) As long as he built in GF -he should not be deprived of rights pertaining to builder in GF, one which is the right of retention even if considerably, at some point. He is aware theres a defect or flaw in the tile of his acquisition. HE continues it; right of retention implies tenancy and continued possession. As such he is still entitled to the fruits and there is no compensation between the fruits and the amount of indemnity due to him. Option is given to Land Owner not Builder LO decides: -whether he appropriates what has been built or planted -or whether he will ask the builder or planter to buy the land Builder cant compel the LO ti simply sell the land therein or at least the portion thereof to buy his building- he cant do that because the OPTION is NOT given to the builder, but to the Landowner. Why the option given by the law to the landowner? (Dupra vs Dumlao) Because is landowner is all there. Can LO simply refuse either of the option? NO. Under ART.448 (No appropriation, not to sell the land- In short, Lumayas ka!) -NO. He cant just refuse to exercise his option and simply ask for the removal in what in good faith has been built or planted on his land. The option are limited to those on ART.448. Supposing that LO avails or elects the option of selling his land and value of land is not considerably more than that of the building. The builder is NOT ABLE TO PAY. SC HELD: That if this is the case the the LO can ask for the removal of the building. If having opted to sell his land, not considerably more than value of building, builder not able to pay LO can ask for removal of property or building. Other remedies available to LO if this is the case: 1. Simply enter into a lease (if builder cant pay) 2. LO can ask for removal 3. LO can ask for the sale, will first applied to the value of land, the rest or the excess will be delivered to the owner of the house or building (Problem) Prior to the time if LO exercise his right of option of either appropriation or sale (prior to his moment of decision) Builder has been of course occupying the land of the LO, Can he be required to pay rent for his occupancy during that period prior to the exercise by the LO of his option? -YES. He should be -The moment the LO exercise his option to appropriate, there arises the right of retention on the part of the builder, from that moment- He cant be compelled to pay rent. If LO opts instead of appropriation his option is sale of the land to the builder, can rent be demanded for the meantime? -YES. Rent will have to be paid until such time when the land is in fact acquired by the builder. -If Builder acquires the land, the builder is the owner already, he simply doesnt have to pay rent anymore. If co-owner of the property, builds, or plants on the property under co-ownership- these rules would not apply because the co-owner is the owner of ideal aliquot(fractional) share of the whole. Under the rule on co-ownership, the co-owner has the right to use the property under co-ownership as long as he doesnt prevent the co-owners from similarly using it. If something is used by a co-owner- this rule is not available. However, if co-ownership has already been terminated by a partition of the property, and after the partition, it is discovered that on of the co-owner(previous co-ownership) has built on the part of the property which was later on

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PROPERTY(Audio + some discussion notes) 8 Dean Navarro

adjudicated to another co-owner, the rules under ART.448 should apply. Co-owner who had earlier built on the property under coownership but a portion of whose building is discovered to encroach upon the part adjudicated in the partition to the other co-owner will have the rights of builder in GF. -will be considered as builder in Good Faith w/ the same rights under ART.448 Claim of good faith may be made by successor in interest of the original builder. >Example: Land with the standing building thereon was purchased by a buyer. Later on, upon the survey of the land it was discovered that portion of a building encroached upon the adjacent property. SC held: YES. Buyer can invoke good faith. Art.448 can apply. >Example: Couple bought lad from a subdivision. When couple decided to construct a house, it was discovered that the lot was not theirs (nagkamali ng turo ng lote sa kanila) Can they invoke the rights of builders in good faith? -YES.even if the property involved is registered property. (Both property has title) can you still invoke builder in good faith if property is covered with Torrens Title? -YES. Because if you are just an ordinary person, you are not expected to know the precise boundaries. Unless you are an expert in science of surveying. Even if your property is covered by Torrens title. (UNLESS youre a SURVEYOR- an expert in that field) Example: I built land in Manila, owner scolded me, I said sorry but I have no title whatever. My property is in QC. (I dont have property in Manila) Can I claim Good Faith? -NO. mere assertion that I thought I have legal rights to build on the property is obviously a vagrant assertion because it has NO VISIBLE means of SUPPORT -If Builder is Bad Faith = he loses everything and becomes liable for damages. -LO can demand that you buy his land, regardless of the value, NO restriction needed. -You can be compelled to buy his land -LO can demand right of removal -You have NO RIGHT whatsoever, except Recovery of Necessary Expenses for the Preservation of the property -LO also incurred necessary expenses even if Builder is the one who is in possession of property. (Fairness and Basic Justice) ALL FRUITS BELONG TO THE PROPERTY OF THE OWNER. Old case of Giving Bonus -certain land owner was asked by certain land company to mortgage their property to secure for the loan. And for the risk you are going tot ake, we will give you certain bonuses. Pumayag (nag-mortgage ka). Binigyan ng bonuses. Are these bonuses, FRUITS? -NO. because they are not produced by the land. Not even civil fruits. Supposing LO and builder are in BF - they are both considered to have acted in GF. Apply ART.448 Supposing rd Builder used the materials of a 3 person in building on the land of another. The lot will depend on whether the builder or owner are in GF or BF- assuming they are both in GF and material owner are in GF. Rights (Owner of Materials) -can recover the value of materials who use dit but the LO can be held subsidiariliy liable for the value of materials in case the builder is unable to pay the owner of materials their value. -if however, builder is BF and consequently LO demands removal or demolition of building. LO has no subsidiary liability Reason: In accession, he who benefits from the accession must pay for it. (Kung sino ang nakinabang sa accession, dpaat magbayad) If LO decides to appropriate the building- there is subsidiary liability on his part in case the builder is insolvent. If LO decides to ask for removalor destructionof the building. He doesnt (LO) benefit from the accession thats why theres no subsidiary liability on the part of the land owner. If property is sold by LO pending payment of indemnity of the builder? It depends. If in the contract of sale between the LO and 3 person- LO was already paid not just the value of the land but the value of the builing as well, the LO must pay the value of building. (The proper indemnity to the builder) If LO was not paid the value of the building the he doesnt benefit to the building. It would be the buyer who will pay because the buyer was the one benefited. ART.457 ALLUVION
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