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PROPERTY
Accretion; Alluvion (2001)
For many years, the Rio Grande river deposited soil along its
bank, beside the titled land of Jose. In time, such deposit
reached an area of one thousand square meters. With the
permission of Jose, Vicente cultivated the said area. Ten years
later, a big flood occurred in the river and transferred the
1000 square meters to the opposite bank, beside the land of
Agustin. The land transferred is now contested by Jose and
Agustin as riparian owners and by Vicente who claims
ownership by prescription. Who should prevail,? Why? (5%)
SUGGESTED ANSWER:
Jose should prevail. The disputed area, which is an alluvion,
belongs by right of accretion to Jose, the riparian owner (Art.
457 CC). When, as given in the problem, the very same area"
was "transferred" by flood waters to the opposite bank, it
became an avulsion and ownership thereof is retained by Jose
who has two years to remove it (Art. 459, CC). Vicente's claim
based on prescription is baseless since his possession was by
mere tolerance of Jose and, therefore, did not adversely affect
Jose's possession and ownership (Art. 537, CC). Inasmuch as
his possession is merely that of a holder, he cannot acquire the
disputed area by prescription.
Accretion; Avulsion (2003)
Andres is a riparian owner of a parcel of registered land. His
land, however, has gradually diminished in area due to the
current of the river, while the registered land of Mario on the
opposite bank has gradually increased in area by 200square
meters.
(a) Who has the better right over the 200-square meter area
that has been added to Marios registered land, Mario or
Andres?
(b) May a third person acquire said 200-square meter land by
prescription?
SUGGESTED ANSWER:
a. Mario has a better right over the 200 square meters increase in
area by reason of accretion, applying Article 457 of the
New Civil Code, which provides that to the owners of lands
adjoining the banks of rivers belong the accretion which they
gradually received from the effects of the current of the waters.
Andres cannot claim that the increase in Marios land is his own,
because such is an accretion and not result of the sudden
detachment of a known portion of his land and its attachment to
Marios land, a process called avulsion. He can no longer
claim ownership of the portion of his registered land which was
gradually and naturally eroded due to the current of the river,
because he had lost it by operation of law. That portion of the
land has become part of the public domain.
SUGGESTED ANSWER:
b. Yes, a third party may acquire by prescription the 200 square
meters, increase in area, because it is not included in the Torrens
Title of the riparian owner. Hence, this does not involve the
imprescriptibility conferred by Section 47, P.D. No. 1529. The
fact that the riparian land is registered does not automatically
make the accretion thereto a registered land. (Grande v. CA, 115
521 (1962); Jagualing v. CA, 194 SCRA 607 (1991).
Builder; Good Faith (1992)

A owns a parcel of residential land worth P500,000.00 unknown

to A, a residential house costing P 100,000.00 is built on the
entire parcel by B who claims ownership of the land. Answer all
the following questions based on the premise that B is a builder
in good faith and A is a landowner in good faith.
a) May A acquire the house built by B? If so, how?
b) If the land increased in value to P500,000.00 by reason of the
building of the house thereon, what amount should be paid by A
in order to acquire the house from B?
c) Assuming that the cost of the house was P90,000.00 and not
P100,000.00, may A require B to buy the land?
d) If B voluntarily buys the land as desired by A, under what
circumstances may A nevertheless be entitled to have the house
removed?
e) In what situation may a "forced lease" arise between A and B.
and what terms and conditions would govern the lease?
Give reasons for your answers.
SUGGESTED ANSWER:
(a) Yes, A may acquire the house build by B by paying indemnity
to B. Article 448 of the Civil Code provides that the owner of
the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the
works, sowing or planting, after payment of the indemnity
provided for in Articles 546 and 546 of the Civil Code.
(b) A should pay B the sum of P50,000. Article 548 of the
Civil Code provides that useful expenses shall be refunded to the
possessor in good faith with the right of retention, the person
who has defeated him in the possession having the option of
refunding the amount of the expenses or of paying the increase
in value which the thing may have acquired by reason thereof.
The increase in value amounts to P50,000.00.
(c) Yes, A may require B to buy the land. Article 448 of the Civil
Code provides that the owner of the land on which anything has
been built in good faith shall have the right to oblige the one
who built to pay the price of the land if its value is not
considerably more than that of the building,
(d) If B agrees to buy land but fails to pay, A can have the house
removed ( Depra vs. Dumlao, 136 SCRA 475).
(e) Article 448 of the Civil Code provides that the builder cannot
be obliged to buy the land if its value is considerably more than
that of the building. In such case, he shall pay reasonable rent, if
the owner of the land does not choose to appropriate the
building after proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the court fix the
terms thereof.
Builder; Good Faith vs. Bad Faith (1999)
(a) Because of confusion as to the boundaries of the adjoining
lots that they bought from the same subdivision company, X
constructed a house on the adjoining lot of Y in the honest
belief that it is the land that he bought from the subdivision
company. What are the respective rights of X and Y with respect
to X's house? (3%)
(b) Suppose X was in good faith but Y knew that X was
constructing on his (Y's) land but simply kept quiet about it,
thinking perhaps that he could get X's house later. What are the
respective rights of the parties over X's house in this case? (2%)
SUGGESTED ANSWER:
(a) The rights of Y, as owner of the lot, and of X, as builder of a
house thereon, are governed by Art. 448 of the Civil Code which

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grants to Y the right to choose between two remedies: (a)

appropriate the house by indemnifying X for its value plus
whatever necessary expenses the latter may have incurred for the
preservation of the land, or (b) compel X to buy the land if the
price of the land is not considerably more than the value of the
house. If it is, then X cannot be obliged to buy the land but he
shall pay reasonable rent, and in case of disagreement, the court
shall fix the terms of the lease.
SUGGESTED ANSWER:
(b) Since the lot owner Y is deemed to be in bad faith (Art
453), X as the party in good faith may (a) remove the house and
demand indemnification for damages suffered by him, or
(b) demand payment of the value of the house plus reparation
for damages (Art 447, in relation to Art 454). Y continues as
owner of the lot and becomes, under the second option, owner
of the house as well, after he pays the sums demanded.
Builder; Good Faith vs. Bad Faith (2000)
In good faith, Pedro constructed a five-door commercial
building on the land of Pablo who was also in good faith.
When Pablo discovered the construction, he opted to
appropriate the building by paying Pedro the cost thereof.
However, Pedro insists that he should be paid the current
market value of the building, which was much higher because of
inflation. 1) Who is correct Pedro or Pablo?(1%) 2) In the
meantime that Pedro is not yet paid, who is entitled to the
rentals of the building, Pedro or Pablo? (1%)
SUGGESTED ANSWER:
Pablo is correct. Under Article 448 of the New Civil Code in
relation to Article 546, the builder in good faith is entitled to a
refund of the necessary and useful expenses incurred by him, or
the increase in value which the land may have acquired by reason
of the improvement, at the option of the landowner. The builder
is entitled to a refund of the expenses he incurred, and not to the
market value of the improvement. The case of Pecson v. CA,
244 SCRA 407, is not applicable the problem. In the Pecson
case, the builder was the owner of the land who later lost the
property at a public sale due to non-payment of taxes. The Court
ruled that Article 448 does not apply to the case where the
owner of the land is the builder but who later lost the land; not
being applicable, the indemnity that should be paid to the buyer
must be the fair market value of the building and not just the
cost of construction thereof. The Court opined in that case that
to do otherwise would unjustly enrich the new owner of the
land.
ALTERNATIVE ANSWER:
Pedro is correct. In Pecson vs. CA, it was held that Article
546 of the New Civil Code does not specifically state how the
value of useful improvements should be determined in fixing the
amount of indemnity that the owner of the land should pay to
the builder in good faith. Since the objective of the law is to
adjust the rights of the parties in such manner as "to administer
complete justice to both of them in such a way as neither one
nor the other may enrich himself of that which does not belong
to him", the Court ruled that the basis of reimbursement should
be the fair market value of the building.
SUGGESTED ANSWER:

2) Pablo is entitled to the rentals of the building. As the owner

of the land, Pablo is also the owner of the building being an
accession thereto. However, Pedro who is entitled to retain the
building is also entitled to retain the rentals. He, however, shall
apply the rentals to the indemnity payable to him after deducting
reasonable cost of repair and maintenance.
ALTERNATIVE ANSWER:
Pablo is entitled to the rentals. Pedro became a possessor in bad
faith from the time he learned that the land belongs to Pablo. As
such, he loses his right to the building, including the fruits
thereof, except the right of retention.
Builder; Good Faith vs. Bad Faith; Accession (2000)
a) Demetrio knew that a piece of land bordering the beach
belonged to Ernesto. However, since the latter was studying in
Europe and no one was taking care of the land, Demetrio
occupied the same and constructed thereon nipa sheds with
tables and benches which he rented out to people who want to
have a picnic by the beach. When Ernesto returned, he
demanded the return of the land. Demetrio agreed to do so after
he has removed the nipa sheds. Ernesto refused to let Demetrio
remove the nipa sheds on the ground that these already
belonged to him by right of accession. Who is correct? (3%)
SUGGESTED ANSWER:
Ernesto is correct, Demetrio is a builder in bad faith because he
knew beforehand that the land belonged to Ernesto, under
Article 449 of the New Civil Code, one who builds on the land
of another loses what is built without right to indemnity.
Ernesto becomes the owner of the nipa sheds by right of
accession. Hence, Ernesto is well within his right in refusing to
allow the removal of the nipa sheds.
Builder; Good Faith vs. Bad Faith; Presumption (2001)
Mike built a house on his lot in Pasay City. Two years later, a
survey disclosed that a portion of the building actually stood on
the neighboring land of Jose, to the extent of 40 square meters.
Jose claims that Mike is a builder in bad faith because he should
know the boundaries of his lot, and demands that the portion of
the house which encroached on his land should be destroyed or
removed. Mike replies that he is a builder in good faith and
offers to buy the land occupied by the building instead.
1) Is Mike a builder in good faith or bad faith? Why? (3%) 2)
Whose preference should be followed? Why? (2%)
SUGGESTED ANSWER:
1) Yes, Mike is a builder in good faith. There is no showing that
when he built his house, he knew that a portion thereof
encroached on Jose's lot. Unless one is versed in the science of
surveying, he cannot determine the precise boundaries or
location of his property by merely examining his title. In the
absence of contrary proof, the law presumes that the
encroachment was done in good faith [Technogas Phils, v.
CA, 268 SCRA 5, 15 (1997)].
2) None of the preferences shall be followed. The preference of
Mike cannot prevail because under Article 448 of the Civil
Code, it is the owner of the land who has the option or choice,
not the builder. On the other hand, the option belongs to Jose,
he cannot demand that the portion of the house encroaching on
his land be destroyed or removed because this is not one of the
options given by law to the owner of the land. The owner may
choose between the appropriation of what was built after

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payment of indemnity, or to compel the builder to pay for the

land if the value of the land is not considerably more than that
of the building.
Otherwise, the builder shall pay rent for the portion of the land
encroached.
ALTERNATIVE ANSWER:
1) Mike cannot be considered a builder in good faith because he
built his house without first determining the corners and
boundaries of his lot to make sure that his construction was
within the perimeter of his property. He could have done this
with the help of a geodetic engineer as an ordinary prudent and
reasonable man would do under the circumstances.
2) Jose's preference should be followed. He may have the
building removed at the expense of Mike, appropriate the
building as his own, oblige Mike to buy the land and ask for
damages in addition to any of the three options. (Articles
449, 450, 451, CC)
Chattel Mortgage vs. Pledge (1999)
Distinguish a contract of chattel mortgage from a contract of
pledge. (2%)
SUGGESTED ANSWER:
In a contract of CHATTEL MORTGAGE possession belongs
to the creditor, while in a contract of PLEDGE possession
belongs to the debtor. A chattel mortgage is a formal contract
while a pledge is a real contract.
A contract of chattel mortgage must be recorded in a public
instrument to bind third persons while a contract of pledge must
be in a public instrument containing description of the thing
pledged and the date thereof to bind third persons.
Chattel Mortgage; Immovables (1994) foreclosure sale,
Vini constructed a building on a parcel of land he leased from
Andrea. He chattel mortgaged the land to Felicia. When he could
not pay Felicia. Felicia initiated foreclosure proceedings.
Vini claimed that the building he had constructed on the leased
land cannot be validly foreclosed because the building was, by
law, an immovable. Is Vini correct?
SUGGESTED ANSWERS:
a) The Chattel Mortgage is void and cannot be foreclosed
because the building is an immovable and cannot be an
object of a chattel mortgage.
b) It depends. If the building was intended and is built of
light materials, the chattel mortgage may be considered as
valid as between the parties and it may be considered in
respect to them as movable property, since it can be removed
from one place to another. But if the building is of strong
material and is not capable of being removed or transferred
without being destroyed, the chattel mortgage is void and
cannot be foreclosed.
c) If it was the land which Vini chattel mortgaged, such
mortgage would be void, or at least unenforceable, since he
was not the owner of the land.
If what was mortgaged as a chattel is the building, the chattel
mortgage is valid as between the parties only, on grounds of
estoppel which would preclude the mortgagor from assailing
the contract on the ground that its subject-matter is an
immovable. Therefore Vini's defense is untenable, and Felicia
can foreclose the mortgage over the building, observing,
however, the procedure prescribed for the execution of sale
of a judgment debtor's immovable under Rule 39, Rules of
Court, specifically, that the notice of auction sale should be
published in a newspaper of general circulation.

d) The problem that Vini mortgaged the land by way of a

chattel mortgage is untenable. Land can only be the subject
matter of a real estate mortgage and only an absolute owner
of real property may mortgage a parcel of land. (Article 2085
(2) Civil Code). Hence, there can be no foreclosure.
But on the assumption that what was mortgaged by way of
chattel mortgage was the building on leased land, then the
parties are treating the building as chattel. A building that is
not merely superimposed on the ground is an immovable
property and a chattel mortgage on said building is legally
void but the parties cannot be allowed to disavow their
contract on account of estoppel by deed. However, if third
parties are involved such chattel mortgage is void and has no
effect.
Chattel Mortgage; Immovables (2003)
X constructed a house on a lot which he was leasing from
Y. Later, X executed a chattel mortgage over said house in
favor of Z as security for a loan obtained from the latter. Still
later, X acquired ownership of the land where his house was
constructed, after which he mortgaged both house and land
in favor of a bank, which mortgage was annotated on the
Torrens Certificate of Title. When X failed to pay his loan to
the bank, the latter, being the highest bidder at the foreclosed
the mortgage and acquired Xs
house and lot. Learning of the proceedings conducted by the
bank, Z is now demanding that the bank reconvey to him Xs
house or pay Xs loan to him plus interests. Is Zs demand
against the bank valid and sustainable? Why? 5%
SUGGESTED ANSWER:
No, Zs demand is not valid. A building is immovable or real
property whether it is erected by the owner of the land, by a
usufructuary, or by a lessee. It may be treated as a movable by
the parties to chattel mortgage but such is binding only
between them and not on third parties (Evangelista v. Alto
Surety Col, inc. 103 Phil. 401 [1958]). In this case, since the
bank is not a party to the chattel mortgage, it is not bound by
it, as far as the Bank is concerned, the chattel mortgage, does
not exist. Moreover, the chattel mortgage does not exist.
Moreover, the chattel mortgage is void because it was not
registered. Assuming that it is valid, it does not bind the Bank
because it was not annotated on the title of the land
mortgaged to the bank. Z cannot demand that the Bank pay
him the loan Z extended to X, because the Bank was not
privy to such loan transaction.
ANOTHER SUGGESTED ANSWER:
No, Zs demand against the bank is not valid. His demand
that the bank reconvey to him Xs house presupposes that he
has a real right over the house. All that Z has is a personal
right against X for damages for breach of the contract of
loan.
The treatment of a house, even if built on rented land, as
movable property is void insofar as third persons, such as the
bank, are concerned. On the other hand, the Bank already
had a real right over the house and lot when the mortgage
was annotated at the back of the Torrens title. The bank later
became the owner in the foreclosure sale. Z cannot ask the
bank to pay for Xs loan plus interest. There is no privity of
contract between Z and the bank.
ALTERNATIVE ANSWER:
The answer hinges on whether or not the bank is an innocent

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mortgagee in good faith or a mortgagee in bad faith. In the

former case, Zs demand is not valid. In the latter case, Zs
demand against the bank is valid and sustainable.
Under the Torrens system of land registration, every person
dealing with registered land may rely on the correctness of
the certificate of title and the law will not in any way oblige to
him to look behind or beyond the certificate in order to
determine the condition of the title. He is not bound by
anything not annotated or reflected in the certificate. If he
proceeds to buy the land or accept it as a collateral relying on
the certificate, he is considered a buyer or a mortgagee in
good faith. On this ground, the Bank acquires a clean title to
the land and the house.
However, a bank is not an ordinary mortgagee. Unlike private
individuals, a bank is expected to exercise greater care and
prudence in its dealings. The ascertainment of the condition of a
property offered as collateral for a loan must be a standard and
indispensable part of its operation. The bank should have
conducted further inquiry regarding the house standing on the
land considering that it was already standing there before X
acquired the title to the land. The
bank cannot be considered as a mortgagee in good faith. On
this ground, Zs demand against the Bank is valid and
sustainable.
Chattel Mortgage; Possession (1993)
A, about to leave the country on a foreign assignment,
entrusted to B his brand new car and its certificate of
registration. Falsifying A's signature. B sold A's car to C for
P200,000.00. C then registered the car in his name. To
complete the needed amount, C borrowed P100.000.00 from
the savings and loan association in his office, constituting a
chattel mortgage on the car. For failure of C to pay the
amount owed, the savings and loan association filed in the
RTC a complaint for collection with application for issuance
of a writ of replevin to obtain possession of the vehicle so
that the chattel mortgage could be foreclosed. The RTC
issued the writ of replevin. The car was then seized from C
and sold by the sheriff at public auction at which the savings
and loan association was the lone bidder. Accordingly, the car
was sold to it. A few days later, A arrived from his foreign
assignment. Learning of what happened to his car, A sought
to recover possession and ownership of it from the savings
and loan association. Can A recover his car from the savings
and loan association? Explain your answer.
SUGGESTED ANSWER:
Under the prevailing rulings of the Supreme Court, A can
recover the car from the Savings and Loan Association
provided he pays the price at which the Association bought
the car at a public auction. Under that doctrine, there has
been an unlawful deprivation by B of A of his car and,
therefore, A can recover it from any person in possession
thereof. But since it was bought at a public auction in good
faith by the Savings and Loan Association, he must reimburse
the Association at the price for which the car was bought.
ALTERNATIVE ANSWER:
Yes, A can recover his car from the Savings and Loan
Association. In a Chattel Mortgage, the mortgagor must be
the absolute owner of the thing mortgaged. Furthermore, the
person constituting the mortgage must have the free disposal
of the property, and in the absence thereof, must be legally
authorized for the purpose. In the case at bar, these essential
requisites did not apply to the mortgagor B, hence the Chattel

Mortgage was not valid.

Chattel Mortgage; Preference of Creditors (1995)
Lawrence, a retired air force captain, decided to go into the
air transport business. He purchased an aircraft in cash except
for an outstanding balance of P500,000.00. He incurred an
indebtedness of P300,000.00 for repairs with an aircraft repair
company. He also borrowed P1 Million from a bank for
additional capital and constituted a chattel mortgage on the
aircraft to secure the loan.
While on a test flight the aircraft crashed causing physical
injuries to a third party who was awarded damages of
P200,000.00.
Lawrence's insurance claim for damage to the aircraft was
denied thus leaving him nothing else but the aircraft which was
then valued only at P1 Million. Lawrence was declared insolvent.
Assuming that the aircraft was sold for Pl Million, give the
order of preference of the creditors of Lawrence and
distribute the amount of P1 Million.
SUGGESTED ANSWER:
Assuming that the aircraft was sold for P1 Million, there is no
order of preference. The P1 Million will all go to the bank as
a chattel mortgagee because a chattel mortgage under Art.
2241 (4) NCC defeats Art. 2244 (12) and (14}. Art. 2241 (3)
and (5) are not applicable because the aircraft is no longer in
the possession of the creditor.
Easement vs. Usufruct (1995)
1. What is easement? Distinguish easement from usufruct.
2. Can there be (a) an easement over a usufruct? (b) a
usufruct over an easement? (c) an easement over another
easement? Explain.
SUGGESTED ANSWER:
1. An EASEMENT or servitude is an encumbrance imposed
upon an immovable for the benefit of another immovable
belonging to a different owner. (Art. 613, NCC)
USUFRUCT gives a right to enjoy the property of another
with the obligation of preserving its form and substance,
unless the title constituting it or the law otherwise provides.
(Art. 562, NCC).
ALTERNATIVE ANSWER:
Easement is an encumbrance imposed upon an immovable
for the benefit of another immovable belonging to a different
owner in which case it is called real or predial easement, or
for the benefit of a community or group of persons in which
case it is known as a personal easement.
The distinctions between usufruct and easement are:
a) Usufruct includes all uses of the property and for all
purposes, including jus fruendi. Easement is limited to a
specific use.
b) Usufruct may be constituted on immovable or
movable property. Easement may be constituted only on an
immovable property.
c) Easement is not extinguished by the death of the
owner of the dominant estate while usufruct is extinguished
by the death of the usufructuary unless a contrary intention
appears.
d) An easement contemplates two (2) estates belonging
to two (2) different owners; a usufruct contemplates only one
property (real or personal) whereby the usufructuary uses and
enjoys the property as well as its fruits, while another owns the
naked title during the period of the usufruct.
e) A usufruct may be alienated separately from the
property to which it attaches, while an easement cannot be

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alienated separately from the property to which it attaches.

NOTE: It is recommended by the Committee that any
two (2) distinctions should be given full credit.
SUGGESTED ANSWER:
2. (a) There can be no easement over a usufruct. Since an
easement may be constituted only on a corporeal immovable
property, no easement may be constituted on a usufruct which
is not a corporeal right
(b) There can be no usufruct over an easement. While a
usufruct maybe created over a right, such right must have an
existence of its own independent of the property. A servitude
cannot be the object of a usufruct because it has no existence
independent of the property to which It attaches.
ALTERNATIVE ANSWERS:
There cannot be a usufruct over an easement since an
easement presupposes two (2) tenements belonging to
different persons and the right attaches to the tenement and
not to the owner. While a usufruct gives the usufructuary a
right to use, right to enjoy, right to the fruits, and right to
possess, an easement gives only a limited use of the servient
estate.
However, a usufruct can be constituted over a property that
has in its favor an easement or one burdened with servitude.
The usufructuary will exercise the easement during the period
of usufruct.
(c) There can be no easement over another easement for the
same reason as in (a). An easement, although it is a real right
over an immovable, is not a corporeal right. There is a
Roman maxim which says that: There can be no servitude
over another servitude.
Easement; Effects; Discontinuous Easements; Permissive
Use (2005)
Don was the owner of an agricultural land with no access to a
public road. He had been passing through the land of Ernie
with the latter's acquiescence for over 20 years. Subsequently,
Don subdivided his property into 20 residential lots and sold
them to different persons. Ernie blocked the pathway and
refused to let the buyers pass through his land.
a) Did Don acquire an easement of right of way? Explain.
(2%)
ALTERNATIVE ANSWER:
No, Don did not acquire an easement of right of way. An
easement of right of way is discontinuous in nature it is
exercised only if a man passes over somebody's land. Under
Article 622 of the Civil Code, discontinuous easements,
whether apparent or not, may only be acquired by virtue of a
title. The Supreme Court, in Abellana, Sr. v. Court of Appeals
(G.R. No. 97039, April 24, 1992), ruled that an easement of
right of way being discontinuous in nature is not acquirable by
prescription.
Further, possession of the easement by Don is only
permissive, tolerated or with the acquiescence of Ernie. It is
settled in the case of Cuaycong v. Benedicto (G.R. No. 9989,
March 13, 1918) that a permissive use of a road over the land
of another, no matter how long continued, will not create an
easement of way by prescription.
ALTERNATIVE ANSWER:
Yes, Don acquired an easement of right of way. An easement
that
is continuous and apparent can be acquired by prescription and

title. According to Professor Tolentino, an easement of right of

way
may have a continuous nature if there is a degree of regularity to
indicate continuity of possession and that if coupled with an
apparent sign, such
easement of way may be acquired by prescription.
ALTERNATIVE ANSWER:
Yes, Ernie could close the pathway on his land. Don has not
acquired an easement of right of way either by agreement or
by judicial grant. Neither did the buyers. Thus, establishment
of a road or unlawful use of the land of Ernie would
constitute an invasion of possessory rights of the owner,
which under Article 429 of the Civil Code may be repelled or
prevented. Ernie has the right to exclude any person from the
enjoyment and disposal of the land. This is an attribute of
ownership that Ernie enjoys.
ALTERNATIVE ANSWER:
Yes, Ernie may close the pathway, subject however, to the
rights of the lot buyers. Since there is no access to the public
road, this results in the creation of a legal easement. The lot
buyers have the right to demand that Ernie grant them a right
of way. In turn, they have the obligation to pay the value of
the portion used as a right of way, plus damages.
c) What are the rights of the lot buyers, if any? Explain.
(2%)
SUGGESTED ANSWER:
Prior to the grant of an easement, the buyers of the dominant
estate have no other right than to compel grant of easement of
right of way. Since the properties of the buyers are surrounded
by other immovables and has no adequate outlet to a public
highway and the isolation is not due to their acts, buyers may
demand an easement of a right of way provided proper
indemnity is paid and the right of way demanded is the
shortest and least prejudicial to Ernie. (Villanueva v. Velasco,
G.R. No. 130845, November 27, 2000).
Easement; Nuisance; Abatement (2002)
Lauro owns an agricultural land planted mostly with fruit
trees. Hernando owns an adjacent land devoted to his piggery
business, which is two (2) meters higher in elevation.
Although Hernando has constructed a waste disposal lagoon
for his piggery, it is inadequate to contain the waste water
containing pig manure, and it often overflows and inundates
Lauros plantation. This has increased the acidity of the soil in
the plantation, causing the trees to wither and die. Lauro sues
for damages caused to his plantation. Hernando invokes his
right to the benefit of a natural easement in favor of his
higher estate, which imposes upon the lower estate of Lauro
the obligation to receive the waters descending from the
higher estate. Is Hernando correct? (5%)
SUGGESTED ANSWER:
Hernando is wrong. It is true that Lauros land is burdened
with the natural easement to accept or receive the water
which naturally and without interruption of man descends
from a higher estate to a lower estate. However, Hernando
has constructed a waste disposal lagoon for his piggery and it
is this waste water that flows downward to Lauros land.
Hernando has, thus, interrupted the flow of water and has
created and is maintaining a nuisance. Under Act. 697 NCC,
abatement of a nuisance does not preclude recovery of
damages by Lauro even for the past existence of a nuisance.
Hidden Treasure (1995)

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Tim came into possession of an old map showing where a

purported cache of gold bullion was hidden. Without any
authority from the government Tim conducted a relentless
search and finally found the treasure buried in a new river
bed formerly part of a parcel of land owned by spouses Tirso
and Tessie. The old river which used to cut through the land
of spouses Ursula and Urbito changed its course through
natural causes. To whom shall the treasure belong? Explain.
SUGGESTED ANSWER:
The treasure was found in a property of public dominion, the
new river bed. Since Tim did not have authority from the
government and, therefore, was a trespasser, he is not
entitled to the one-half share allotted to a finder of hidden
treasure. All of it will go to the State. In addition, under Art.
438 of the NCC in order that the finder be entitled to the
1/2 share, the treasure must be found by chance, that is by
sheer luck. In this case, since Tim found the treasure not by
chance but because he relentlessly searched for it, he is not
entitled to any share in the hidden treasure.
ALTERNATIVE ANSWER:
The law grants a one-half share to a finder of hidden treasure
provided he is not a trespasser and the finding is by chance. It is
submitted that Tim is not a trespasser despite his not getting
authority from the government, because the new river bed where
he found the treasure is property for public use (Art. 420 NCC),
to which the public has legitimate access. The question,
therefore, boils down to whether or not the finding was by
chance in view of the fact that Tim "conducted a relentless
search" before finding the treasure. The strict or literal view
holds that deliberate or intentional search precludes entitlement
to the one-half share allotted by law to the finder since the
phrase "by chance" means "by accident", meaning an
unexpected discovery. The liberal view, however, would sustain
Tim's right to the allocated share interpreting the phrase in
question as meaning "by a stroke of good fortune", which does
not rule out deliberate or intentional search. It is submitted that
the liberal view should prevail since in practical reality, hidden
treasure is hardly ever found without conscious effort to find it,
and the strict view would tend to render the codal provision in
question illusory.
Hidden Treasures (1997)
Marcelino, a treasure hunter as just a hobby, has found a map
which appears to indicate the location of hidden treasure. He has
an idea of the land where the treasure might possibly be found.
Upon inquiry, Marcelino learns that the owner of the land,
Leopoldo, is a permanent resident of Canada, Nobody, however,
could give him Leopoldo's exact address.
Ultimately, anyway, he enters the land and conducts a search. He
succeeds.
Leopoldo learning of Marcelino's "find", seeks to recover the
treasure from Marcelino but the latter is not willing to part with
it. Failing to reach an agreement, Leopoldo sues Marcelino for
the recovery of the property. Marcelino contests the action. How
would you decide the case?
SUGGESTED ANSWER:
I would decide in favor of Marcelino since he is considered a
finder by chance of the hidden treasure, hence, he is entitled
to one-half (1/2) of the hidden treasure. While Marcelino
may have had the intention to look for the hidden treasure,
still he is a finder by chance since it is enough that he tried to
look for it. By chance in the law does not mean sheer luck

such that the finder should have no intention at all to look

for the treasure. By chance means good luck, implying that
one who intentionally looks for the treasure is embraced in
the provision. The reason is that it is extremely difficult to
find hidden treasure without looking for it deliberately.
Marcelino is not a trespasser since there is no prohibition for
him to enter the premises, hence, he is entitled to half of the
treasure.
ALTERNATIVE ANSWERS:
1. Marcelino did not find the treasure by chance because he
had a map, he knew the location of the hidden treasure and
he intentionally looked for the treasure, hence, he is not
entitled to any part of the treasure.
2. Marcelino appears to be a trespasser and although there
may be a question of whether he found it by chance or not,
as he has found the hidden treasure by means of a treasure
map, he will not be entitled to a finder's share. The hidden
treasure shall belong to the owner.
3. The main rule is that hidden treasure belongs to the
owner of the land, building or other property on which it is
found. If it is found by chance by a third person and he is not
a trespasser, he is entitled to one-half (1/2). If he is a
trespasser, he loses everything.
Ownership; Co-Ownership (1992)
A, B and C are the co-owners in equal shares of a residential
house and lot. During their co-ownership, the following acts
were respectively done by the co-owners: 1) A undertook the
repair of the foundation of the house,
then tilting to one side, to prevent the house from
collapsing. 2) B and C mortgaged the house and lot to secure
a loan. 3) B engaged a contractor to build a concrete fence all
around the lot. 4) C built a beautiful grotto in the
garden. 5) A and C sold the land to X for a very good
price.
(a) Is A's sole decision to repair the foundation of
the house binding on B and C? May A require B and
C to contribute their 2/3 share of the expense?
Reasons.
(b) What is the legal effect of the mortgage
contract executed by B and C? Reasons.
(c) Is B's sole decision to build the fence binding
upon A and C? May B require A and C to contribute
their 2/ 3 share of the expense? Reasons.
(d) Is C's sole decision to build the grotto binding
upon A and B? May C require A and B to contribute
their 2/ 3 share of the expense? Reasons.
(e) What are the legal effects of the contract of
sale executed by A. C and X? Reasons.
SUGGESTED ANSWER:
(a) Yes. A's sole decision to repair the foundation is binding
upon B and C. B and C must contribute 2/3 of the expense.
Each co-owner has the right to compel the other co-owners
to contribute to the expense of preservation of the thing (the
house) owned in common in proportion to their respective
interests (Arts. 485 and 488, Civil Code).
SUGGESTED ANSWER:
(b) The mortgage shall not bind the 1/3 right and interest
of A and shall be deemed to cover only the rights and
interests of B and C in the house and lot. The mortgage shall
be limited to the portion (2/3) which may be allotted to B
and C in the partition (Art. 493, Civil Code).

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SUGGESTED ANSWER:
(c) B's sole decision to build the concrete fence is not binding
upon A and C. Expenses to improve the thing owned in
common must be decided upon by a majority of the
co-owners who represent the controlling interest (Arts. 489
and 492. Civil Code).
SUGGESTED ANSWER:
(d) C's sole decision to build the grotto is not binding upon A
and B who cannot be required to contribute to the expenses
for the embellishment of the thing owned in common if not
decided upon by the majority of the coowners who represent
the controlling interest (Arts. 489 and 492, Civil Code).
SUGGESTED ANSWER:
(e) The sale to X shall not bind the 1/3 share of B and shall
be deemed to cover only the 2/3 share of A and C in the
land (Art. 493, Civil Code). B shall have the right to redeem
the 2/3 share sold to X by A and C since X is a third person
(Art. 1620, Civil Code).
Ownership; Co-Ownership; Prescription (2000)
In 1955, Ramon and his sister Rosario inherited a parcel of
land in Albay from their parents. Since Rosario was gainfully
employed in Manila, she left Ramon alone to possess and
cultivate the land. However, Ramon never shared the harvest
with Rosario and was even able to sell one-half of the land in
1985 by claiming to be the sole heir of his parents. Having
reached retirement age in 1990 Rosario returned to the
province and upon learning what had transpired, demanded
that the remaining half of the land be given to her as her
share. Ramon opposed, asserting that he has already acquired
ownership of the land by prescription, and that Rosario is
barred by laches from demanding partition and reconveyance.
Decide the conflicting claims. (5%)
SUGGESTED ANSWER:
Ramon is wrong on both counts: prescription and laches. His
possession as co-owner did not give rise to acquisitive
prescription. Possession by a co-owner is deemed not adverse
to the other co-owners but is, on the contrary, deemed
beneficial to them (Pongon v. GA, 166 SCRA 375). Ramon's
possession will become adverse only when he has repudiated
the co-ownership and such repudiation was made known to
Rosario. Assuming that the sale in 1985 where Ramon
claimed he was the sole heir of his parents amounted to a
repudiation of the co-ownership, the prescriptive period
began to run only from that time. Not more than 30 years
having lapsed since then, the claim of Rosario has not as yet
prescribed. The claim of laches is not also meritorious. Until
the repudiation of the co-ownership was made known to the
other co-owners, no right has been violated for the said
co-owners to vindicate. Mere delay in vindicating the right,
standing alone, does not constitute laches.
ALTERNATIVE ANSWER:
Ramon has acquired the land by acquisitive prescription, and
because of laches on the part of Rosario. Ramon's possession
of the land was adverse because he asserted sole ownership
thereof and never shared the harvest therefrom. His adverse
possession having been continuous and uninterrupted for
more than 30 years, Ramon has acquired the land by
prescription. Rosario is also guilty of laches not having
asserted her right to the harvest for more than 40 years.
Ownership; Co-Ownership; Prescription (2002)
Senen and Peter are brothers. Senen migrated to Canada early

while still a teenager. Peter stayed in Bulacan to take care of

their widowed mother and continued to work on the Family
farm even after her death. Returning to the country some
thirty years after he had left, Senen seeks a partition of the
farm to get his share as the only co-heir of Peter. Peter
interposes his opposition, contending that acquisitive
prescription has already set in and that estoppel lies to bar the
action for partition, citing his continuous possession of the
property for at least 10 years, for almost 30 years in fact. It
is undisputed that Peter has never openly claimed sole
ownership of the property. If he ever had the intention to do
so, Senen was completely ignorant of it. Will Senens action
prosper? Explain. (5%).
SUGGESTED ANSWER:
Senens action will prosper. Article 494 of the New Civil
Code provides that no prescription shall run in favor of a
co-owner or co-heir against his co-owners or co-heirs so long
as he expressly or impliedly recognizes the coownership nor
notified Senen of his having repudiated the same.
ALTERNATIVE ANSWER:
Senens action will prosper. This is a case of implied trust.
(Art 1441, NCC) For purposes of prescription under the
concept of an owner (Art. 540, NCC). There is no such
concept here. Peter was a co-owner, he never claimed sole
ownership of the property. He is therefore estopped under
Art. 1431, NCC.
Ownership; Co-Ownership; Redemption (1993)
In 1937, A obtained a loan of P20,000.00 from the National
City Bank of New York, an American-owned bank doing
business in the Philippines. To guarantee payment of his
obligation, A constituted a real estate mortgage on his 30hectare parcel of agricultural land. In 1939, before he could
pay his obligation. A died intestate leaving three children. B, a
son by a first marriage, and C and D, daughters by a second
marriage. In 1940, the bank foreclosed the mortgage for
non-payment of the principal obligation. As the only bidder
at the extrajudicial foreclosure sale, the bank bought the
property and was later issued a certificate of sale. The war
supervened in 1941 without the bank having been able to
obtain actual possession of the property which remained with
A's three children who appropriated for themselves the
income from it. In 1948, B bought the property from the
bank using the money he received as back pay from the U.
S. Government, and utilized the same in agribusiness. In
1960, as B's business flourished, C and D sued B for partition
and accounting of the income of the property, claiming that
as heirs of their father they were co-owners
thereof and offering to reimburse B for whatever he had
paid in purchasing the property from the bank. In brief, how
will you answer the complaint of C and D, if you were
engaged by D as his counsel?
SUGGESTED ANSWER:
As counsel of B, I shall answer the complaint as follows:
When B bought the property, it was not by a right of
redemption since the period therefore had already expired.
Hence, B bought the property in an independent
unconditional sale. C and D are not co-owners with B of the
property. Therefore, the suit of C and D cannot prosper.
ALTERNATIVE ANSWER:
As counsel of B, I shall answer the complaint as follows:
From the facts described, it would appear that the Certificate
of sale has not been registered. The one-year period of

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redemption begins to run from registration. In this case, it has

not yet even commenced. Under the Rules of Court, the
property may be released by the Judgment debtor or his
successor in interest. (Sec. 29, Rule 27). It has been held that
this includes a joint owner. (Ref. Magno vs.Ciola, 61 Phil. 80).
Ownership; Co-Ownership; Redemption (2000)
Ambrosio died, leaving his three daughters, Belen, Rosario
and Sylvia a hacienda which was mortgaged to the Philippine
National Bank due to the failure of the daughters to pay the
bank, the latter foreclosed the mortgage and the hacienda was
sold to it as the highest bidder. Six months later, Sylvia won
the grand prize at the lotto and used part of it to redeem the
hacienda from the bank. Thereafter, she took possession of
the hacienda and refused to share its fruits with her sisters,
contending that it was owned exclusively by her, having
bought it from the bank with her own money. Is she correct
or not? (3%)
SUGGESTED ANSWER:
Sylvia is not correct. The 3 daughters are the co-owners of
the hacienda being the only heirs of Ambrosio. When the
property was foreclosed, the right of redemption belongs
also to the 3 daughters. When Sylvia redeemed the entire
property before the lapse of the redemption period, she also
exercised the right of redemption of her co-owners on their
behalf. As such she is holding the shares of her two sisters in
the property, and all the fruits corresponding thereto, in trust
for them. Redemption by one co-owner inures to the benefit
of all (Adille v. CA.157 SCRA 455). Sylvia, however, is entitled
to be reimbursed the shares of her two sisters in the
redemption price.
Ownership; Co-Ownership; Redemption (2002)
Antonio, Bart, and Carlos are brothers. They purchased from
their parents specific portions of a parcel of land as evidenced
by three separates deeds of sale, each deed referring to a
particular lot in meter and bounds. When the deeds were
presented for registration, the Register of Deeds could not
issue separate certificates of Title had to be issued, therefore,
in the names of three brothers as coowners of the entire
property. The situation has not changed up to now, but each
of the brothers has been receiving rentals exclusively from the
lot actually purchased by him. Antonio sells his lot to a third
person, with notice to his brothers. To enable the buyer to
secure a new title in his name, the deed of sale was made to refer
to undivided interest in the property of the seller (Antonio), with
the metes and bounds of the lot sold being stated. Bart and
Carlos reacted by signifying their exercise of their right of
redemption as co owners. Antonio in his behalf and in behalf
of his buyer, contends that they are no longer coowners,
although the title covering the property has remained in their
names as such. May Bart and Carlos still redeem the lot sold
by Antonio? Explain. (5%)
SUGGESTED ANSWER:
No, they may not redeem because there was no Coownership
among Antonio, Bart, and Carlos to start with. Their parents
already partitioned the land in selling separate portions to
them. The situation is the same as in the case Si
v. Court of Appeals, (342 SCRA 653 [2000]).
Possession (1998)
Using a falsified manager's check, Justine, as the buyer, was
able to take delivery of a second hand car which she had just
bought from United Car Sales Inc. The sale was registered
with the Land Transportation Office. A week later, the seller

learned that the check had been dishonored, but by that time,
Justine was nowhere to be seen. It turned out that Justine had
sold the car to Jerico, the present possessor who knew
nothing about the falsified check. In a suit by United Car
Sales, Inc. against Jerico for recovery of the car, plaintiff
alleges it had been unlawfully deprived of its property
through fraud and should, consequently, be allowed to
recover it without having to reimburse the defendant for the
price the latter had paid. Should the suit prosper? [5%]
SUGGESTED ANSWER:
The suit should prosper as to the recovery of the car.
However, since Jerico was not guilty of any fraud and appears
to be an innocent purchaser for value, he should be
reimbursed for the price he paid. This is without prejudice to
United Car Sales, Inc. right of action against Justine. As
between two innocent parties, the party causing the injury
should suffer the loss. Therefore, United Car Sales, Inc.
should suffer the loss.
ALTERNATIVE ANSWER:
Yes, the suit will prosper because the criminal act of estafa
should be deemed to come within the meaning of unlawful
deprivation under Art. 559, Civil Code, as without it plaintiff
would not have parted with the possession of its car.
ANOTHER ANSWER:
No, the suit will not prosper. The sale is valid and Jerico is a
buyer in good faith.
ANOTHER ANSWER:
Under the law on Sales, when the thing sold is delivered by
the seller to the buyer without reservation of ownership, the
ownership is transferred to the buyer. Therefore in the suit of
United Car Sales, Inc. against Jerico for the recovery of the
car, the plaintiff should not be allowed to recover the car
without reimbursing the defendant for the price that the latter
paid. (EDCA Publishing and Distributing Corp. vs. Santos,
184
SCRA 614, April 26, 1990)
Property; Real vs. Personal Property (1995) Salvador, a
timber concessionaire, built on his lot a
warehouse where he processes and stores his timber for
shipment. Adjoining the warehouse is a furniture factory
owned by NARRAMIX of which Salvador is a majority
stockholder. NARRAMIX leased space in the warehouse
where it placed its furniture-making machinery.
1. How would you classify the furniture-making machinery
as property under the Civil Code? Explain.
2. Suppose the lease contract between Salvador and
NARRAMIX stipulates that at the end of the lease the
machinery shall become the property of the lessor, will your
answer be the same? Explain.
SUGGESTED ANSWER:
1. The furniture-making machinery is movable property
because it was not installed by the owner of the tenement.
To become immovable under Art. 415 (5) of the NCC, the
machinery must be installed by the owner of the tenement.
ALTERNATIVE ANSWER:
It depends on the circumstances of the case. If the machinery
was attached in a fixed manner, in such a way that it cannot
be separated from the tenement without breaking the material
or causing deterioration thereof, it is immovable property
[Art. 415 (3), NCC]. However, if the machinery can be
transported from place to place without impairment of the
tenement to which they were fixed, then it is movable

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property. [Art. 416 (4), NCC]

SUGGESTED ANSWER:
2. It is immovable property. When there is a provision in the
lease contract making the lessor, at the end of the lease,
owner of the machinery installed by the lessee, the said
machinery is considered to have been installed by the lessor
through the lessee who acted merely as his agent. Having
been installed by the owner of the tenement, the machinery
became immovable .under Art. 415 of the NCC. (Davao
Sawmill v. Castillo 61 Phil. 709)
Property; Real vs. Personal Property (1997)
Pedro is the registered owner of a parcel of land situated in
Malolos, Bulacan. In 1973, he mortgaged the land to the
Philippine National Bank (PNB) to secure a loan of
P100.000.00. For Pedro's failure to pay the loan, the PNB
foreclosed on the mortgage in 1980, and the land was sold at
public auction to PNB for being the highest bidder. PNB
secured title thereto in 1987.
In the meanwhile, Pedro, who was still in possession of the
land, constructed a warehouse on the property. In 1988, the
PNB sold the land to Pablo, the Deed of Sale was amended
in 1989 to include the warehouse.
Pedro, claiming ownership of the warehouse, files a complaint
to annul the amended Deed of Sale before the Regional Trial
Court of Quezon City, where he resides, against both the
PNB and Pablo. The PNB filed a motion to dismiss the
complaint for improper venue contending that the warehouse
is real property under Article 415(1) of the Civil Code and
therefore the action should have instead been filed in Malolos,
Bulacan. Pedro claims otherwise. The question arose as to
whether the warehouse should be considered as real or as
personal property.
If consulted, what would your legal advice be?
SUGGESTED ANSWER:
The warehouse which is a construction adhered to the soil is
an immovable by nature under Art. 415 (1) and the proper
venue of any case to recover ownership of the same, which is
what the purpose of the complaint to annul the amended
Deed of Sale amounts to, should be the place where the
property is located, or the RTC of Bulacan.
ADDITIONAL ANSWERS:
1. Buildings are always immovable property, and even in the
instances where the parties to a contract seem to have dealt with
it separate and apart from the land on which it stood in no wise
does it change its character as immovable property. A building is
an immovable even if not erected by the owner of the land. The
only criterion is union or incorporation with the soil. (Ladera
vs.
Hodges (CA) 48
O.G. 4374) (Reyes and Puno, Outline of Philippine Civil
Law,
Vol. 2. p.7)
2. The warehouse built by Pedro on the mortgaged property
is real property within the context of Article 415 of the New
Civil Code, although it was built by Pedro after the
foreclosure sale without the knowledge and consent of the
new owner which makes him a builder in bad faith, this does
not alter the character of the warehouse as a real property by
incorporation. It is a structure which cannot be removed
without causing injury to the land. So, my advice to Pedro is
to file the case with the RTC of Bulacan, the situs of the

property,
(Note: If the examinee does not mention that the structure was built
by a builder in bad faith, it should be given full credit).
Sower; Good Faith/ Bad Faith (2000)
Felix cultivated a parcel of land and planted it to sugar cane,
believing it to be his own. When the crop was eight months
old, and harvestable after two more months, a resurvey of
the land showed that it really belonged to Fred. What are the
options available to Fred? (2%)
SUGGESTED ANSWER:
As to the pending crops planted by Felix in good faith, Fred
has the option of allowing Felix to continue the cultivation
and to harvest the crops, or to continue the cultivation and
harvest the crops himself. In the latter option, however, Felix
shall have the right to a part of the expenses of cultivation
and to a part of the net harvest, both in proportion to the
time of possession. (Art. 545 NCC),
ALTERNATIVE ANSWER:
Since sugarcane is not a perennial crop. Felix is considered a
sower in good faith. Being so, Art. 448 applies. The options
available to Fred are: (a) to appropriate the crop after paying
Felix the indemnity under Art. 546, or (b) to require Felix to
pay rent.
Usufruct (1997)
On 1 January 1980, Minerva, the owner of a building, granted
Petronila a usufruct over the property until 01 June 1998
when Manuel, a son of Petronila, would have reached his
30th birthday. Manuel, however, died on 1 June 1990 when
he was only 26 years old.
Minerva notified Petronila that the usufruct had been
extinguished by the death of Manuel and demanded that the
latter vacate the premises and deliver the same to the
former. Petronila refused to vacate the place on the ground
that the usufruct in her favor would expire only on 1 June
1998 when Manuel would have reached his 30th birthday and
that the death of Manuel before his 30th birthday did not
extinguish the usufruct. Whose contention should be
accepted?
SUGGESTED ANSWER:
Petronila's contention is correct. Under Article 606 of the
Civil Code, a usufruct granted for the time that may elapse
before a third person reaches a certain age shall subsist for
the number of years specified even if the third person should
die unless there is an express stipulation in the contract that
states otherwise. In the case at bar, there is no express
stipulation that the consideration for the usufruct is the
existence of Petronila's son. Thus, the general rule and not
the exception should apply in this case.
ALTERNATIVE ANSWER:
This is a usufruct which is clearly intended for the benefit of
Manuel until he reaches 30 yrs. of age with Petronila serving
only as a conduit, holding the property in trust for his
benefit. The death of Manuel at the age of 26 therefore,
terminated the usufruct.
Property Accretion; Alluvium (2008)
No. IX. The properties of Jessica and Jenny, who are neighbors,
lie along the banks of the Marikina River. At certain times of the
year, the river would swell and as the water recedes, soil, rocks
and other materials are deposited on Jessica's and Jenny's
properties. This pattern of the river swelling, receding and
depositing soil and other materials being deposited on the

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neighbors' properties have gone on for many years. Knowing his

pattern, Jessica constructed a concrete barrier about 2 meters
from her property line and extending towards the river, so that
when the water recedes, soil and other materials are trapped
within this barrier. After several years, the area between Jessica's
property line to the concrete barrier was completely filled with
soil, effectively increasing Jessica's property by 2 meters. Jenny's
property, where no barrier was constructed, also increased by
one meter along the side of the river. (A). Can Jessica and Jenny
legally claim ownership over the additional 2 meters and one
meter, respectively, of land deposited along their properties?(2%)
SUGGESTED ANSWER:
Only Jenny can claim ownership over the additional one
meter of land deposited along her property. Art. 457 of the
Civil Code provides that "to the owners of lands adjoining
the banks of river belong the accretion which they
gradually receive from the effects of the current of the
water." Where the land is not formed solely by the natural
effect of the water current of the river bordering land but is
also the consequences of the direct and deliberate
intervention of man, it is man-made accretion and a part of
the public domain (Tiongco v. Director of Lands, 16 C.A.
Rep 211, cited in Nazareno v. C.A., G.R. No. 98045, 26 June
1996). Thus, Jessica cannot legally claim ownership of the
additional 2 meters of land along her property because she
constructed a concrete barrier about 2 meters from her
property causing deposits of soil and other materials when
the water recedes. In other words, the increase in her
property was not caused by nature but was man-made. (B).
If Jessica's and Jenny's properties are registered, will the benefit
of such registration extend to the increased area of their
properties? (2%) SUGGESTED ANSWER:
If the properties of Jessica and Jenny are registered, the
benefit of such registration does not extend to the
increased area of their properties. Accretion does not
automatically become registered land because there is a
specific technical description of the lot in its Torrens title.
There must be a separate application for registration of the
alluvial deposits under the Torrens System (Grande v. CA,
G.R. No. L-17652, 30 June, 1962).
(C). Assume the two properties are on a cliff adjoining the shore
of Laguna Lake. Jessica and Jenny had a hotel built on the
properties. They had the erath and rocks excavated from the
properties dumped on the adjoining shore, giving rise to a new
patch of dry land. Can they validly lay claim to the patch of land?
(2%) SUGGESTED ANSWER: No. Jessica and Jenny
cannot validly lay claim to the patch of land because in
order to acquire land by accretion, there should be a
natural and actual continuity of the accretion to the land of
the riparian owner caused by natural ebb and flow of the
current of the river (Delgado v. Samonte, CA-G.R. No.
34979-R, 10 Aug 1966). Accretion; Rights of the Riparian
Owner (2009)
No.XVI. Marciano is the owner of a parcel of land through
which a river runs out into the sea. The land had been brought
under the Torrens System, and is cultivated by Ulpiano and his
family as farmworkers therein. Over the years, the river has
brought silt and sediment from its sources up in the mountains
and forests so that gradually the land owned by Marciano
increased in area by three hectares. Ulpiano built three huts on

this additional area, where he and his two married children live.
On this same area, Ulpiano and his family planted peanuts,
monggo beans and vegetables. Ulpiano also regularly paid taxes
on the land, as shown by tax declarations, for over thirty years.
When Marciano learned of the increase in the size of the land, he
ordered Ulpiano to demolish the huts, and demanded that he be
paid his share in the proceeds of the harvest. Marciano claims
that under the Civil Code, the alluvium belongs to him as a
registered riparian owner to whose land the accretion attaches,
and that his right is enforceable against the whole world. (A). Is
Marciano correct? Explain. (3%) SUGGESTED ANSWER:
Marcianos contention is correct. Since that accretion was
deposited on his land by the action of the waters of the
river and he did not construct any structure to increase the
deposition of soil and silt, Marciano automatically owns the
accretion. His real right of ownership is enforceable against
the whole world including Ulpiano and his two married
children. Although Marcianos land is registered, the three
(3) hectares land deposited through accretion was not
automatically registered. As an unregistered land, it is
subject to acquisitive prescription by third persons.
Although Ulpiano and his children live in the three (3)
hectare unregistered land owned by Marciano, they are
farm workers; therefore, they are possessors not in the
concept of owners but in the concept of mere holders. Even
if they possess the land for more than 30 years, they cannot
become the owners thereof through extraordinary
acquisitive prescription, because the law requires
possession in the concept of the owner. Payment of taxes
and tax declaration are not enough to make their
possession one in the concept of owner. They must
repudiate the possession in the concept of holder by
executing unequivocal acts of repudiation amounting to
ouster of Marciano, known to Marciano and must be
proven by clear and convincing evidence. Only then would
his possession become adverse. (B). What rights, if any, does
Ulpiano have against Marciano? Explain. (3%) SUGGESTED
ANSWER:
Although Ulpiano is a possessor in bad faith, because he
knew he does not own the land, he will lose the three huts
he built in bad faith and make an accounting of the fruits
he has gathered, he has the right to deduct from the value
of the fruits the expenses for production, gathering and
preservation of the fruits (Art 443, NCC).
He may also ask for reimbursement of the taxes he has
paid, as these are charges on the land owned by Marciano.
This obligation is based on a quasi-contract (Art 2175,
NCC). Builder; Good Faith; Requisites (2013) No.VIII.
Ciriaco Realty Corporation (CRC) sold to the spouses Del a
Cruz a500-square meter land (Lot A) in Paranaque. The land
now has a fair market value of Pl,200,000. CRC likewise sold to
the spouses Rodriguez, a 700-square meter land (Lot B) which is
adjacent to Lot A. Lot B has a present fair market value of
P1,500,000. The spouses Dela Cruz constructed a house on Lot
B, relying on their presentation of the CRC sales agent that it is
the property they purchased. Only upon the completion of their
house did the spouses Dela Cruz discovered that they had built
on Lot B owned by the spouses Rodriguez, not on Lot A that
they purchased. They spent P 1 000,000 for the house.

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As their lawyer, advise the spouses Dela Cruz on their rights and
obligations under the given circumstances, and the recourses and
options open to them to protect their interests. (8%)
SUGGESTED ANSWER: Based on the fact as stated, the
spouses Dela Cruz as builders and the spouses Rodriguez
as land owners, are both in good faith. The spouses Dela
Cruz are builder in good faith because before constructing
the house they exercised due diligence by asking the Agent
of CRC the location of the lot A, and they relied on the
information given by the agent who is presumed to know
the identity of the lot purchased by the Dela Cruz spouses
(Pleasantville v. CA, 253 SCRA 10, 1996). On the other
hand, there is no showing that the land owners, spouse
Rodriguez acted in bad faith. The facts do not show that
the building was done with their knowledge and without
opposition on their part (Art 453, Civil Code). The good
faith is always presumed (Art. 527, Civil Code). The owner
of the land on which anything has been built, sown, or
planted in good faith shall have the right: (1) to appropriate
as his own the works after payment of the indemnity
provided for in Art 546 and 548, or
(2) to oblige the one who built to pay the price of the land.
However, the builder cannot be obliged to buy the land if
its value is considerable more than that of the building.. In
such case, he shall pay reasonable rent of the owner of the
land does not choose to appropriate the building or trees
after proper indemnity (Art 448, Civil Code). The house
constructed by the spouses Dela Cruz is considered as a
useful expense, since it increased the value of the lot. As
such, should the spouses Rodriguez decides to appropriate
the house, the spouses Dela Cruz are entitled to the right of
retention pending reimbursement of the expenses they
incurred or the increase in value which the thing may have
acquired by reason of the improvement (Art 546, Civil
Code). Thus, the spouses Dela Cruz may demand
P1,000,000.00 as payment of the expenses in building the
house or increase in value of the land because of the house
as a useful improvement, as may be determined by the
court form the evidence presented during the trial (Depra v.
Dumlao, 136 SCRA 475, 1985; Technogas Phils v. CA, 268
SCRA 5, 1997).
Hidden Treasure (2008) No. VIII. Adam, a building
contractor, was engaged by Blas to construct a house on a lot
which he (Blas) owns. While digging on the lot in order to lay
down the foudation of the house, Adam hit a very hard object. It
turned out to be the vault of the old Banco de las Islas Filipinas.
Using a detonation device, Adam was able to open the vault
containing old notes and coins which were in circulation during
the Spanish era. While the notes and coins are no longer legal
tender, they were valued at P100 million because of their
historical value and the coins silver nickel content. The following
filed legal claims over the notes and coins: (i). Adam, as finder;
(ii). Blas, as owner of the property where they were found;
(iii). Bank of the Philippine Islands, as successor-in-interest of
the owner of the vault; and (iv). The Philippine Government

because of their historical value. (A). Who owns the notes and
coins? (4%) SUGGESTED ANSWER:
The notes and coins are no longer owned by the Bank of
the Philippine Islands, which has either lost or abandoned
the vault and its contents, and it has not taken any effort to
search, locate or recover the vault. In any case, since the
vault is in actual possession of Adam, BPI may attempt, in
a judicial action to recover, to rebut the presumption of
ownership in favor of Adam and Blas (Art. 433, Civil Code).
Hidden treasure is any hidden and unknown deposit of
money, jewelry, or other precious objects, the lawful
ownership of which does not appear. Given the age and
importance of the items found, it would be safe to consider
the vault, notes and coins abandoned by BPI and its
predecessor (Art. 439, Civil Code). It belongs to the owner
of the land on which it is found. When the discovery is
made on the property of another, or of the State and by
chance, one-half of it shall belong to the finder who is not a
trespasser (Art. 438, Civil Code). In the present case, Adam,
as finder, and Blas, as owner of the land, are entitled to
share 50-50 in the treasure. The government can only claim
if it can establish that the notes and coins are of interest to
science or the arts, then it must pay just price of the things
found, to be divided equally between Adam and Blas (Art.
438, Civil Code). (B). Assuming that either or both Adam and
Blas are adjudged as owners, will the notes and coins be deemed
part of their absolute community or conjugal partnership of
gains with their respective spouses? (2%)
SUGGESTED ANSWER: If either or both Adam and Blas
are adjudged as owners, the notes and coins shall be
deemed part of their absolute community or conjugal
partnership of gains with their respective spouses (Art. 117,
par 4, FC)
Ownership; Co-Ownership (2009) No. XI. TRUE or
FALSE. Answer TRUE if the statement is true, or FALSE if the
statement is false. Explain your answer in not more than two (2)
sentences. (D). The renunciation by a co-owner of his undivided
share in the co-owned property in lieu of the performance of his
obligation to contribute to taxes and expenses for the
preservation of the property constitutes dacion en pago. (1%)
SUGGESTED ANSWER:
True, Under the Civil Code, a coowner may renounce his
share in the coowned property in lieu of paying for his
share in the taxes and expenses for the preservation of the
coowned property.
In effect, there is dacion en pago because the co-owner is
discharging his monetary obligation by paying it with his
non-monetary interest in the co-owned property. The fact
that he is giving up his entire interest simply means that he
is accepting the value of his interest as equivalent to his
share in the taxes and expenses of preservation. Ownership;
Co-Ownership (2008) No. VI. Alex died without a will, leaving
only an undeveloped and untitled lot in Tagiug City. He is
survived by his wife and 4 children. His wife told the children
that she is waiving her share in the property, and allowed Bobby,
the eldest son who was about to get married, to construct his
house on of the lot, without however obtaining the consent
of his siblings. After settlement of Alex's estate and partition
among the heirs, it was discovered that Bobby's house was
constructed on the portion allocated to his sister, Cathy asked

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Bobby to demolish his house and vacate the portion alloted to

her. In leiu of demolition, Bobby offered to purchase from
Cathy the lot portion on which his house was constructed. At
that time, the house constructed was valued at P350.000.
(A). Can Cathy lawfully ask for demolition of Bobby's house?
(3%) SUGGESTED ANSWER:
Yes, Cathy can lawfully ask for the demolition of Bobby's
house. Where there are two or more heirs, the whole estate
of the decedent, is, before partition, owned in common by
such heirs, subject to the payment of debts of the deceased
(Art. 1078, Civil Code), Under the rules on co-ownership,
"none of the co-owners shall, without the consent of the
others make alterations in the thing owned in common,
even though benefits for all would results therefrom." In
Cruz v. Catapang, G.R. No. 164110, 12 Feb., 2008, the Court
held that "alterations include any act of strict dominion or
ownership such as construction of a house." In the present
case, of Alex is the real owner of the undeveloped and
untitled lot in Taguig, co-ownership is created among his
wife and four children over said property upon his death.
Since the construction of the house by Bobby was done
without obtaining the consent of his siblings, the alteration
effected is illegal. Bobby is considered to be in bad faith
and as a sanction for his conduct, he can be compelled by
Cathy to demolish or remove the structure at his own
expense.
SUGGESTED ANSWER: No. Bobby cannot legally insist
on purchasing the land. Being in bad faith, he has no
option to pay for the price of the lot (Art. 450, Civil Code).
Property; Movable or Immovable (2007) No.II. Manila
Petroleum Co. owned and operated a petroleum operation
facility off the coast of Manila. The facility was located on a
floating platform made of wood and metal, upon which was
permanently attached the heavy equipment for the petroleum
operations and living quarters of the crew. The floating platform
likewise contained a garden area, where trees, plants and flowers
were planted. The platform was tethered to a ship, the MV 101,
which was anchored to the seabed. Please briefly give the reason
for your answers. (10%) (A).Is the platform movable or
immovable property? SUGGESTED ANSWER:
The platform is an immovable property under Art. 415 (9)
NCC, which provides that "docks and structures which,
though floating, are intended by their nature and object to
remain at a fixed place on a river, lake or coast." Since the
floating platform is a petroleum operation facility, it is
intended to remain permanently where it is situated, even if
it is tethered to a ship which is anchored to the seabed.
ALTERNATIVE ANSWER: The platform is a movable
property because it is attached to a movable property, i.e.
the vessel which was merely anchored to the seabed. The
fact that the vessel is merely anchored to the sea bed only
shows that it is not intended to remain at a fixed place;
hence, it remains a movable property. If the intention was
to make the platform stay permanent where it was moored,
it would not have been simply tethered to a vessel but itself
anchored to the seabed. (B). Are the equipment and living
quarters movable or immovable property? SUGGESTED
ANSWER:
The thing and living quarters of the crew are immovable
property under Art. 415 (3) NCC, classifies as an
immovable "everything attached to an immovable in a
fixed manner, in such a way that it cannot be separated

therefrom without breaking the material or deterioration of

the object." Both the equipment and the living quarters are
permanently attached to the platform which is also an
immovable. The equipment can also be classified as an
immovable property under Art. 415 (5) NCC because such
equipment are "machinery, receptacles, instruments or
implements intended by the owner of the tenement for an
industry or works which may be carried on in a building or
on a piece of land and which tend directly to meet the
needs of the industry or works." It is logically assumed that
the petroleum industry may be carried on in a building or
on a piece of land and the platform is analogous to a
building. ALTERNATIVE ANSWER: The equipment and
living quarters of the crew are movable properties since
they are attached to a platform which is also a movable
property, because it is simply attached to a vessel is
likewise a movable property since it was merely anchored
on the seabed only shows that it is not intended to remain
at a fixed place; hence, it remains a movable property. (C).
Are the trees, plants and flowers immovable or movable
property? SUGGESTED ANSWER: The trees, plants and
flowers planted in the garden area of the platform are
immovable property under Art. 415 (2) NCC which
classifies as an immovable property "trees, plants and
growing fruits, while they are attached to the land or form
an integral part of an immovable, the petroleum operation
facility. ALTERNATIVE ANSWER: The trees, plants and
flowers planted in the garden area of the platform are
movable property because they are not permanently
attached t the land and do not form an integral part of an
immovable. The platform is not an immovable property for
the same reason already given in the Alternative Answer to
Item (a) above.