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PROPERTY CASE DIGEST

RUU POSSESSION (Art. 523-561) A N


Kinds of Possession (Art. 523-530) RAMOS V. DIRECTOR OF LAND FACTS: Ramos was a holder of a possession information title which he later conveyed to Romero. Romero applied for the registration of the land. HELD:The possession and cultivation of a portion of a tract of land under claim of ownership, under a claim of ownership of all, is a constructive possession of all, if the remainder isnt under the adverse possession of another. RAMOS VS. DIRECTOR OF LANDS Adverse Possession The general rule is that possession and cultivation of a portion of a tract of land under the claim of ownership of all is a constructive possession of all, if the remainder is not in the adverse possession of another. FACTS: Restituo Romero gained possession of a considerable tract of land located in Nueva Ecija. He took advantage of the Royal Decree to obtain a possessory information title to the land and was registered as such. Parcel No. 1 included within the limits of the possessory information title of Romero was sold to Cornelio Ramos, herein petitioner. Ramos instituted appropriate proceedings to have his title registered. Director of Lands opposed on the ground that Ramos had not acquired a good title from the Spanish government. Director of Forestry also opposed on the ground that the first parcel of land is forest land. It has been seen however that the predecessor in interest to the petitioner at least held this tract of land under color of title. ISSUE: Whether or not the actual occupancy of a part of the land described in the instrument giving color of title sufficient to give title to the entire tract of land?

Atty. Jonathan Sarte

HELD: The general rule is that possession and cultivation of a portion of a tract of land under the claim of ownership of all is a constructive possession of all, if the remainder is not in the adverse possession of another. The claimant has color of title; he acted in good faith and he has open, peaceable, and notorious possession of a portion of the property, sufficient to apprise the community and the world that the land was for his enjoyment. Possession in the eyes of the law does not mean that a man has to have his feet on every square meter of ground before it can be said that he is in possession. Ramos and his predecessor in interest fulfilled the requirements of the law on supposition that the premises consisted of agricultural public land. On the issue of forest land, Forest reserves of public land can be established as provided by law. When the claim of the citizen and the claim of the government as to a particular piece of property collide, if the Government desires to demonstrate that the land is in reality a forest, the Director of Forestry should submit to the court convincing proof that the land is not more valuable for agricultural than for forest purposes. In this case, the mere formal opposition on the part of the Attorney-General for the Director of Forestry, unsupported by satisfactory evidence will not stop the courts from giving title to the claimant. Petitioner and appellant has proved a title to the entire tract of land for which he asked for registration. Registration in the name of the petitioner is hereby granted. DEVELOPMENT BANK OF THE PHILIPPINES v. COURT OF APEEALS G.R.No. 138703,June 30, 2006 FACTS: In March 1968, DBP granted to private respondents an industrial loan in the amount of P2,500,000 P500,000 n cash and P2,000,000 in DBP Progress Bank. It was evidenced by a promissory note and secured by a mortgage executed by respondents over their present and future properties. Another loan was granted by DBP in the for of a 5-year revolving guarantee to P1,700,000. In 1975, the outstanding accounts wth DBP was restructured in view of failure to

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


pay. Amounting to P4,655,992.35 were consolidated into a single account. On the other hand, all accrued interest and charges due amounting to P3,074,672.21 were denominated as Notes Taken for Interests and evidenced by a separate promissory note. For failure to comply with its obligation, DBP initiated foreclosure proceedings upon its computation that respondents loans were arrears by P62,954,473.68. Respondents contended that the collection was unconscionable if not unlawful or usurious . RTC, as affirmed by the CA, ruled in favor of the respondents. ISSUE: Whether the prestation to collect by the DBP is unconscionable or usurious RULING: It cannot be determined whether DBP in fact applied an interest rate higher than what is prescribed under the law. Assuming it did exceed 12% in addition to the other penalties stipulated in the note, this should be stricken out for being usurious. The petition is partly granted. Decision of the court of Appeals is reversed and set aside. The case is remanded o the trial court for the determination of the total amount of the respondents obligation based on the promissory notes, according to the interest rate agreed upon by the parties on the interest rate of 12% per annum, whichever is lower. PLEASANTVILLE DEVELOPMENT CORPORATION v CA FACTS: Edith Robillo purchased a parcel of land, Lot 9, from Pleasantville Devt Corporation in Pleasantville Subdivision, Bacolod City. Eldred Jardinico bought the rights to the lot from Robillo. At that time, Lot 9 was vacant. Upon completing all payments and securing a TCT in his name, Jardinico discovered that improvements had been introduced on Lot 9by Wilson Kee, who had taken possession thereof. It appears that Kee bought on installment Lot 8 from CT TorresEnterprises Inc (CTTEI), the real estate agent of Pleasantville. Under the Contract to Sell, Kee could and did possess the lot even before the completion of payments. Zenaida Octaviano, CTTEIs employee, was the one who mistakenly pointed out Lot 9 (instead of Lot 8) to Kees wife. Thereafter, Kee built his residence, a store, an auto repair shop, and other improvements onthe lot. Jardinico

Atty. Jonathan Sarte

confronted Kee after discovering that the latter wasoccupying Lot 9. Kee refused to vacate, hence Jardinico filed anejectment suit with damages.RTC: Kee is a builder in bad faith. Assuming arguendo that Kee wasacting in good faith, he was nonetheless guilty of unlawfully usurpingthe possessory right of Jardinico over Lot 9 from the time he was servedwithnotice to vacate said lot, and was thus liable for rental. CA: Kee was a builder in good faith, as he was unaware of the mix-up when he began construction of the improvements. The erroneous delivery was due to the fault of CTTEI and thus imputable to Pleasantville, the principal HELD: Kee = builder in GF. The roots of the controversy can be traced in the errors committed by CTTEI when it pointed the wrong lot to Kee. Good faith consists in the belief of the builder that the land he is building on is his and he is ignorant of any defect or flaw in his title. And as good faith is presumed, Pleasantville has the burden of proving bad faith on the part of Kee. At the time he built the improvements on Lot 9, Kee believed that the said lot was the one he bought. He was not aware that the lot delivered to him was not Lot 8. Pleasantville failed to prove otherwise. Violation of the Contract of Sale on Installment may not be the basis to negate the presumption that Kee was a builder in good faith. Such violations have no bearing whatsoever on whether Kee was a builder in good faith, that is, on his state of mind at the time he built the improvements on Lot 9. These alleged violations may give rise to petitioners cause of action against Kee under the said contract (contractual breach) but may not be bases to negate the presumption that Kee was a builder in good faith. KASILAG v RODRIGUEZ FACTS: The parties entered into a contract of mortgage of the improvements on the land acquired as homestead to secure the payment of the indebtedness for P1,000 plus interest. In clause V, the parties stipulated that EA was to pay, w/in 4 1/2 yrs, the debt w/ interest thereon, in w/c event the mortgage would not have any effect; in clause VI, the parties agreed that the tax on the land and its improvements, during the existence of the mortgage, should be paid by the owner of the land; in clause VII, it was covenanted that w/in 30 days from the date of

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


the contract, the owner of the land would file a motion in the CFI of Bataan asking that cert. of title no. 325 be cancelled and that in lieu thereof another be issued under the provisions of RA 496; in clause VIII the parties agreed that should EA fail to redeem the mortgage w/in the stipulated period of 4 1/2 yrs, she would execute an absolute deed of sale of the land in favor of the mortgagee, the petitioner, for the same amount of the loan including unpaid interest; and in clause IX it was stipulated that in case the motion to be presented under clause VII should be disapproved by the CFI-Bataan, the contract of sale of sale would automatically become void and the mortgage would subsist in all its force. One year after the execution of the mortgage deed, it came to pass that EA was unable to pay the stipulated interest as well as the tax on the land and its improvements. For this reason, she and the petitioner entered into another verbal contract whereby she conveyed to the latter the possession of the land on condition that the latter would not collect the interest on the loan, would attend to the payment of the land tax, would benefit by the fruits of the land, and would introduce improvements thereon. HELD: The possession by the petitioner and his receipts of the fruits of the land, considered as integral elements of the contract of antichresis, are illegal and void agreements, because the such contract is a lien and as such is expressly prohibited by Sec 116 of Act No. 2874, as amended. The CA held that petitioner acted In BF in taking possession of the land because he knew that the contract he made w/ EA was an absolute sale, and further, that the latter could not sell the land because it is prohibited by Sec. 116 of Act 2874. A person is deemed a possessor in BF when he knows that there is a flaw in his title or in the manner of its acquisition, by w/c it is invalidated. The question to be answered is w/n the petitioner should be deemed a possessor in GF because he was unaware of any flaw in his title or in the manner of its acquisition by w/c it is invalidated. Ignorance of the flaw is the keynote of the rule. From the facts as found by the CA, we can neither deduce nor presume that the petitioner was aware of a flaw in his title or in the manner of its acquisition, aside from the prohibition contained in Sec. 116. This being the

Atty. Jonathan Sarte

case, the question is w/n GF may be premised upon ignorance of the laws. Gross and inexcusable ignorance of the law may not be the basis of GF but excusable ignorance may be such basis (if it is based upon ignorance of a fact.) It is a fact that the petitioner is not conversant w/ the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the wellgrounded belief that he was not violating the prohibition regarding the alienation of the land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that the latter, as a lien, was prohibited by Sec. 116. Thus, as to the petitioner, his ignorance of the provisions of sec. 116 is excusable and may be the basis of GF. The petitioners being in GF, the respondents may elect to have the improvements introduced by the petitioner by paying the latter the value thereof, P3,000, or to compel the petitioner to buy and have the land where the improvements or plants are found, by paying them its market value to be fixed by the court of origin, upon hearing the parties. Acquisition of Possession (Art. 531-538) MACASAET v MACASAET FACTS: Petitioners Ismael and Teresita Macasaet and Respondents Vicente and Rosario Macasaet are first-degree relatives. Ismael is the son of respondents, and Teresita is his wife. The parents filed with the MTCC of Lipa City an ejectment suit against the children. Respondents alleged that they were the owners of two (2) parcels of land covered by Transfer Certificate of Title (TCT) Nos. T-78521 and T-103141, situated at Banaybanay, Lipa City; that by way of a verbal lease agreement, Ismael and Teresita occupied these lots and used them as their residence and the construction business; petitioners failed to pay the agreed rental of P500 per week. Ismael and Teresita denied the existence of any verbal lease agreement. They claimed that respondents had invited them to construct their

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


residence and business on the subject lots in order that they could all live near one other, employ Marivic (the sister of Ismael), and help in resolving the problems of the family. They added that it was the policy of respondents to allot the land they owned as an advance grant of inheritance in favor of their children. The MTCC ruled in favor of respondents and ordered petitioners to vacate the premises. It opined that Ismael and Teresita had occupied the lots, not by virtue of a verbal lease agreement, but by tolerance of Vicente and Rosario. On appeal, the regional trial court (RTC) upheld the findings of the MTCC. However, the RTC allowed respondents to appropriate the building and other improvements introduced by petitioners, after payment of the indemnity provided for by Article 448 in relation to Articles 546 and 548 of the Civil Code. It added that respondents could oblige petitioners to purchase the land, unless its value was considerably more than the building. In the latter situation, petitioners should pay rent if respondents would not choose to appropriate the building. Upon denial of their individual Motions for Reconsideration, the parties filed with the CA separate Petitions for Review, which were later consolidated. ISSUE: Whether or not the structures built by petitioners were useful improvements under Art. 546. HELD: The structures built by petitioners were useful improvements, because they augmented the value or income of the bare [76] lots. Thus, the indemnity to be paid by respondents under Article 448 is provided for by Article 546, which we quote: Art. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has been reimbursed therefore. Useful expenses shall be refunded only to the possessor in good faith with the same 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

Atty. Jonathan Sarte

increase in value which the thing may have acquired by reason thereof. Consequently, respondents have the right to appropriate -- as their own -- the building and other improvements on the subject lots, but only after (1) refunding the expenses of petitioners or (2) paying the increase in value acquired by the properties by reason thereof. They have the option to oblige petitioners to pay the price of the land, unless its value is considerably more than that of the structures -- in which case, petitioners shall pay reasonable rent. CUAYCONG v BENEDICTO Easement Right of Way Public Highway FACTS: Benedicto owns Hacienda Toreno which is located in Victorias, Negros Occidental. Two roads pass through the said hacienda: the Dacuman-Toreno Road and the Nanca-Victorias Road. For forty years, the owners of the nearby hacienda, Cuaycong et al, had been using the said roads to transport their products. But in 1911, Benedicto decided to close the road and began asking for toll fees for wagons passing through their hacienda. In 1912, Cuaycong et al sued Benedicto. Cuaycong claimed that they have a right of way over the said Nanca-Victorias Road considering that they have been using it since time immemorial. The lower court dismissed the claim over the Dacuman-Toreno Road for the other parties were in default, but the lower court declared that Cuaycong et al do have a right of way over the Nanca-Victorias Road. Benedicto appealed. Cuaycong then averred that the road is a public highway. ISSUE: Whether or not Cuaycong et al were able to establish their right over the NancaVictorias Road. HELD: No. The Nanca-Victorias Road is not a public highway. First it was shown that in the Torrens title held by Benedicto, there was no encumbrance attached to the hacienda, that it is nowhere nearby a road nor does it border a road. Second, the road was not maintained by the local government. Its upkeep was solely supported by the road users for their benefits,

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


convenience and interest. There was no adverse possession by the government. Third, there was no evidence which shows that the land is of the nature of a public highway. It was shown that the road was in existence since 1885, but it was not shown as a public highway, in fact, the other evidence shown pertain to Dacuman-Toreno Road. Fourth, the road was closed in 1911; it was only in 1912 that Cuaycong et al filed their suit. Neither did Cuaycong et al acquired a right of private easement. The lower court ruled that Cuaycong et al and their predecessors in interest had been using the said road since time immemorial yet they only showed evidence that it was in use in 1885 but no other evidence to show a further time of usage was ever shown to prove their claim. ASTUDILLO v BOARD OF PHHC FACTS: Peregrina Astudillo appealed from the "resolution" dated April 18, 1967 of the Court of First Instance of Rizal, Quezon City Branch V, granting the motion for summary judgment filed by Ramon P. Mitra and dismissing her petition for certiorari and mandamus. According to the pleadings of respondents Mitra and the People's Home site and Housing Corporation (PHHC) *, Mitra on December 28, 1957 applied, in behalf of his minor son, Ramon Mitra Ocampo, for the purchase of Lot 16, Block E-155 of the East Avenue Subdivision of the PHHC in Piahan, Quezon City.His application was approved on January 3, 1958. He made a down payment of P840, an amount equivalent to ten percent of the price of the lot. On September 9, 1961 the PHHC and Mitra executed a contract of conditional sale. After Mitra had paid in full the price, which totalled more than nine thousand pesos, a final deed of sale was executed in his favor on February 18, 1965. Transfer Certificate of Title No. 89875 was issued to him on March 1, 1965. On May 3, 1965 Peregrina filed in the lower court her aforementioned petition against the PHHC board of directors, the register of deeds of Quezon City and the spouses Ramon P. Mitra and Salud O. Mitra .After the respondents had filed their answers, the Mitra spouses filed a verified motion for summary judgment. They assumed that there was no genuine issue as to any

Atty. Jonathan Sarte

material fact. Peregrina Astudillo opposed the motion. The parties submitted memoranda. The lower court treated the motion for summary judgment as a motion to dismiss. It dismissed Peregrina's petition on the grounds that she is a mala fide squatter and that the sale of Lot 16 to Mitra cannot be assailed by means of certiorari and mandamus. Peregrina appealed to this Court. She contends that the lower court erred in holding that certiorari and mandamus do not lie in this case and that she has no right to question the award to Mitra, and in not holding that the award of Lot 16 to him was in contravention of the Anti-Graft and Corrupt Practice Law and of the constitutional provision that a Senator or Representative should not directly or indirectly be financially interested in any contract with the government of any subdivision or instrumentality thereof during his term of office. ISSUE: whether Peregrina Astudillo has a cause of action to annul the sale of Lot 16 to Mitra and to compel the PHHC board to award that lot to her. HELD: We hold that she has no cause of action to impugn the award to Mitra and to require that she be allowed to purchase the lot. As a squatter, she has no possessory rights over Lot 16. In the eyes of the law, the award to Mitra did not prejudice her since she was bereft of any rights over the said lot which could have been impaired by that award. In the familiar language of procedure, she was not entitled to sue Mitra and the PHHC for the enforcement or protection of a right, or the prevention of a wrong. Those respondents did not commit any delict or wrong in violation of her rights because, in the first place, she has no right to the lot. Not being principally or subsidiarily bound in the contract of sale between Mitra and the PHHC, she is not entitled to ask for its annulment (Art. 1397, Civil Code). PERAN v CFI FACTS: Jose Evasco owns an unregistered land. He executed an extrajudicial partition of it among his 5 heirs, one of which was his son, Alejandro. He allowed and tolerated his niece Encarnacion (daughter of his brother, Anacleto, who is also one of the heirs) to erect a house on a portion of his lot. In 1972, Alejandro sold the lot to Torella who in turn sold it to Sabater and

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


then the latter sold it to Peran in 1979. When Peran asked Encarnacion to vacate, she refused. Thus, a complaint of Forcible Entry and Unlawful Detainer was filed against Encarnacion. HELD: The CFI erred when it reckoned the counting of the 1 yr period within which to file the action from Dec 31, 1972, and not from the time of demand. A forcible entry and unlawful detainer action must be brought within 1 yr. The 1 yr period of limitation period commences from the time of demand to vacate, and when several demands are made, the same is counted from the last letter of demand. The demand to vacate having been made in Jan 1979 and the suit having been instituted on Feb 8, 1979, the Municipal Court acted within its jurisdiction. The CFI also erred in assuming that prior possession in whatever character is protected by law. The prior possession of Encarnacion and her husband was only by mere tolerance and therefore does not vest in them a right which they can assert against Peran. Possession by tolerance is lawful, but this becomes illegal when, upon demand to vacate by the owner, the possessor refuses to comply with such demand. A possessor by mere tolerance is necessarily bound by an implied promise to vacate upon demand. Effects of Possession (Art. 539-561) YU v HONRADO FACTS: Marcelo Steel Corp sold 42 metric tons of scrap engine blocks to Refuerzo, an alleged swindler. The latter then sold the engine blocks to the Yu spouses, owners of Soledad Junk Shop. The purchase was in GF. The court then issued a warrant for the seizure of the goods in possession of Yu. The goods were seized and placed interesting the premises of Marcelo Steel for safekeeping. Information was filed against Yu and Refuerzo. Yusinformation was dismissed. The Yuspouses are petitioning for the return of the engine blocks. HELD: In the absence of any final judgment in the Estafa case as to the civil liability of the accused to make restitution, the Yu spouses can get the scraps back.Although the search warrant was validlyissued, it does not follow that MarceloSteel is entitled to recover the scrapfrom

Atty. Jonathan Sarte

a third person who bought it in GF. The acquirer and possessor in GF of achattel or movable property is entitledto be respected and protected in hispossession as if he were the true owner,until a competent court rules otherwise.Such possession in GF is equivalent totitle and every possessor has a right tobe respected in his possession (Arts 539and 559). The sale of the scraps to Yuwas covered by a sales invoice andmade in the ordinary course of business. CORDERO v CABRAL FACTS: Felipa Cordero and her children fileda complaint that a portion of the landthey inherited for her husband Gregorio Ocampo was illegally possessed byVictoria Cabral and her tenants. Cabral et.al alleges that they have been inactual, adverse, peaceful, andcontinuous possession, of that portion of land. The Corderos are demanding them to surrender the possession of theland and/or vacate it. The Cabrals refused. CFI served summons to the Cabrals. CFI then dismissed thecomplaint for recovery on the ground that the Cabrals have been in open, continuous, and adverse possession of that portion of land. CA: the Corderos have the right to recover. BUT the CAwent further. It found that the land wassold orally by Gregorio Ocampo to Rodriguez (who is a predecessor of the Cabrals) and thus became binding upon Gregorio. HELD: The SC said that the CA erred inruling that the land was orally sold toRodriguez, the predecessors of theCabrals. The Cabrals, by their ownadmission, are in possession of the disputed land. There is no evidence thatthey were possessors in BF. However,their GF ceased when they were servedwith summons to answer the complaint.As possessors in BF from the service of the summons, they shall reimburse thefruits received.(3) Of enjoyment of possession in thesame character in which was acquireduntil the contrary is proved. DIZON v SUNTAY Article 559 Right to Recover Personal Property- Estoppel FACTS: Suntay was the owner of a 3 carat diamond ring valued at P5.5k (in 1962). In June

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


1962, Suntay entered into an agency to sell with Clarita Sison. Unknown to Suntay, Sison pawned the ring to Dizon who owns a pawnshop. Time passed, and Sison failed to sell the ring nor was she able to return the ring to Suntay. Suntay later discovered that the ring was actually pawned. She demanded Dizon to return the ring. Dizon refused. Suntay filed for a replevin suit which she won. Dizon appealed and he lost. He claims that estoppels should be used against Dizon as she left the ring under the custody of Sison who then pawned it to her. ISSUE: Whether or not Suntay can still claim the ring. HELD: Yes. Suntay can under Article 559 of the Civil Code which provides: The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession of the same. If the possessor of a movable lost of which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor. Dizon must bear the burden due to his misplaced confidence. Suntays right over the ring is superior to that of Dizon. Estoppel may not be used against Suntay. She is the rightful owner merely exercising her right to recover. Neither the promptingsof equity nor the mandates of moral right and natural justice come to Dizons rescue. He is engaged in a business where presumably ordinary prudence would manifest itself to ascertain whether or not an individual who is offering jewelry by way of a pledge is entitled to do so. If no such care be taken, perhaps because of the difficulty of resisting opportunity for profit, he should be the last to complain if thereafter the right of the true owner of such jewelry should be recognized.

Atty. Jonathan Sarte

DIN

fUSUFRUCT (Art. 562-612 S IN


In General (Art. 562-565)

Rights of the Usufructuary (Art. 566-582) FABIE v DAVID Petitioner Josefa is the usufructuary of the income of certain houses in Binondo and Ongpin, under the ninth clause of the will of deceased Rosario. A usufructuary of the rents, as a corollary to the right to all rents, tochoose the tenant and to fix the amount of the rent, necessarily has theright to choose himself as the tenant, provided that the obligations hehas assumed towards the owner of the property are fulfilled. FACTS: Doa Rosario Fabie y Grey was the owner of the lot in the City of Manila with a building and improvements, and by a will left by her upon her death which was duly probated she devised the naked ownership of the whole property to Rosario Grey Vda. De Albar, et al. but its usufruct to Josefa Fabie for life. During liberation, as a consequence of the fire that gutted the building in many portions of Manila, the building on the Ongpin lot was burned, leaving only the walls and other improvements that were not destroyed by the fire. One Au Pit, a Chinaman, offered to lease the property for a period of five years, at the same time agreeing to construct on the lot a new building provided the naked owners as well as the usufructuary sign the agreement of the lease. As the usufructuary maintains that she has the exclusive right to cede the property by lease and to receive the full rental value by virtue of her right to usufruct while on the other hand the naked owners maintain that the right of usufruct was extinguished when the building was destroyed, the right of the usufructory being limited to the legal interest on the value of the lot and the materials, in order that the agreement of lease may be affected, the parties agreed on a temporary compromise whereby the naked owners would receive P100.00, or 20% of the monthly rental of P500.00 and the usufructuary

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


the balance of 80% or P400.00 of said monthly rental. It was likewise stipulated in the agreement that the title to the building to be constructed would accrue to the land upon it completion as an integral part of the lot covered by the transfer certificate of title issued in the name of the naked owners but subject to the right of usufruct of Josefa Fabie. The parties expressly reserved the right to litigate their respective claims after the termination of the contract of lease to determine which of said claims was legally correct. By reason of the destruction of the building on the Ongpin property, the United States War Damage Commission approved the claim that was presented for the damage caused to the property, paid to and received by the naked owners. In the meantime, the usufructuary paid the real estate taxes due on the property at Ongpin for the years 1945 to 1952. ISSUE: Whether or not the usufruct included the building and the land? W/N the usufructuary (FABIE) or naked owner (VDA DE ALBAR) should undertake the reconstruction? W/N the usufructuary should pay the real estate taxes? HELD: The usufruct for life extended to the land and the building. From the above, it is clear that when the deceased constituted the life usufruct on the rentals "fincassituadas" in Ongpin and Sto. Cristo streets, she meant to impose the encumbrance both the building and the land on which it is erected for indeed the building cannot exist without the land. And as this Court well said, "The land, being an indispensable part of the rented premises cannot be considered as having no rental value whatsoever." Moreover, in the Spanish language, the term "fincas" has a broad scope; it includes not only building but land as well. (Diccionario Ingles-Espaol, porMartines Amador) Since only the building was destroyed and the usufruct is constituted not only on the building but on the land as well, then the usufruct is not deemed extinguished by the destruction of the building for under the law usufruct is extinguished only by the total loss of the thing subject of the encumbrance (Article 603, old Civil Code). FABIE, the usufructuary has the discretion to reconstruct the building. Of course, this is addressed to the wisdom and discretion of the usufructuary who, to all intents and purposes is

Atty. Jonathan Sarte

deemed as the administrator of the property. This has been clarified in the case of Fabie vs. Gutierrez David, 75 Phil., 536, which was litigated between the same parties and wherein the scope of the same provision of the will has been the subject of interpretation. The usufructuary should pay the taxes. We find, however, merit in the contention that the real estate taxes paid by respondent in her capacity as usufractuary for several years previous to the present litigation should be paid by her, as she did, instead of by petitioners not only because she bound herself to pay such taxes in a formal agreement approved by the court in Civil Case No. 1569 of the Court of First Instance of Manila (Fabie vs. Gutierrez David, supra). In the case, which involved the same parties and the same properties subject to usufruct, the parties submitted an amicable agreement which was approved by the court wherein the usufructuary, herein respondent, bound herself to pay all the real estate taxes, special assessment and insurance premiums, and make all the necessary repairs on each of the properties covered by the usufruct and in accordance with said agreement, respondent paid all the taxes for the years 1945 to 1954. Obligations of the Usufructuary (Art. 583-602) Extinguishment of Usufruct (Art. 603-612) BALURAN V. NAVARRO The manner of terminating the right of usufruct may be stipulated by the parties such as in this case, the happening of a resolutory condition. FACTS: Baluran and Paraiso (ancestor of Obedencio) entered into a contract which they called barter, but in fact stipulated that they would only transfer the material possession of their respective properties to each other. Thus, Baluran will be allowed to construct a residential house on the land of Paraiso while Paraiso is entitled to reap the fruits of the riceland of Baluran. The contract prohibited them from alienating the properties of the other and contained a stipulation that should the heirs of Paraiso desire to re-possess the residential lot, Baluran is obliged to return the lot. Indeed, years after, Obedencio (grandchild of Paraiso) acquired the ownership of the residential lot from

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


his mother and demanded that Baluran, who was in possession, vacate. Baluran now counters that the barter already transferred ownership. ISSUE: Whether or not the contract was a barter or usufruct RULING: IT IS USUFRUCT. First, the contract is what the law defines it to be and not what the parties call it. It is very clear that what the parties exchanged was not ownership, but merely material possession or the right to enjoy the thing. Now, because it is usufruct, the law allows the parties to stipulate the conditions including the manner of its extinguishment. In this case, it was subject to a resolutory condition which is in case the heir of Paraiso (a third party) desires to repossess the property. Upon the happening of the condition, the contract is extinguished. Therefore, Baluran must return the land to Obedencia. But since Art. 579 allows the usufructuary to remove improvements he made, Baluran may remove the house he constructed. One last point. At the time of this case, the Obedencias were also in possession of the riceland of Baluran. Although it was not proper to decide the issue of possession in this case, the Court nevertheless decided on the matter and order the Obedencias to vacate the property inasmuch as there was an extinguishment of a reciprocal obligations and rights. NATIONAL HOUSING AUTHORITY vs. GRACE BAPTIST CHURCH and COURT OF APPEALS DOCTRINE: A usufruct may be constituted for a specified term and under such conditions as the parties may deem convenient subject to the legal provision on usufruct; a usufructuary may lease the object held in usufruct. A usufructuary has the duty to protect the owners interests a usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides. FACTS: On June 13, 1986, Respondent Grace Baptist Church wrote a letter to NHA manifesting

Atty. Jonathan Sarte

their intent to purchase Lot 4 and 17 of the General Mariano Alvarez Resettlement Project in Cavite. The latter granted request hence respondent entered into possession of the lots and introduced improvements thereon. On February 22, 1991, NHA passed a resolution approving the sale of the subject lots to respondent Church for 700 per square meter, a total of P430,500. respondents were duly informed. On April 8, 1991, respondent church tendered a check amounting to P55,350 contending that this was the agreed price. NHA avers stating that the price now (1991) is different from before (1986). The trial court rendered a decision in favour of NHA stating that there was no contract of sale, ordering to return the said lots to NHA and to pay NHA rent of 200 pesos from the time it took possession of the lot. Respondent Church appealed to the CA which affirms the decision of RTC regarding no contract of sale but modifying it by ordering NHA to execute the sale of the said lots to Church for 700 per square, with 6% interest per annum from March 1991. Petitioner NHA filed a motion for reconsideration which was denied. Hence this petition for review on certiorari ISSUE: WON NHA can be compelled to sell the lots under market value? HELD: No, because the contract has not been perfected. The Church despite knowledge that its intended contract of sale with the NHA had not been perfected proceeded to introduce improvements on the land. On the other hand, NHA knowingly granted the Church temporary use of the subject properties and did not prevent the Church from making improvements thereon. Thus the Church and NHA, who both acted in bad faith shall be treated as if they were both in good faith. In this connection Art 448 provides: the owner of the land in which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land and if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree, on case of disagreement, court shall fix.

Atty. Jonathan Sarte

protected exists, but also that the acts against which the injunction to be directed are violative of said right. In the case at bar, plaintiff failed to establish his right and that the defendant has committed/attempts to commit acts that endanger such right. The complaint does not state how and why the mere passage of defendant over plaintiffs estate conveying tuba to his Hacienda has caused damage to plaintiffs property rights. The real damage that the plaintiff seeks to avoid is the fact that tuba is disposed of at defendants hacienda in which the plaintiffs laborers have access (apparently, the plaintiff hates that his laborers are getting drunk in the tuba saloon of the defendant). This however, is a nothing more than an exercise of legitimate business on the part of the defendant. What the law does not authorize to be done directly, cannot be done indirectly (if plaintiff cannot enjoin defendant from selling tuba, neither can it obtain injunction to prevent him from passing over its property to transport tuba). (TOPICAL: on mode of acquiring easements): The road was constructed by the plaintiff on his own land and it made this road accessible to the public, regardless of class/group of persons/entities. This is a voluntary easement constituted in favor of the community. Indeed, the plaintiff may close the road at its pleasure as no period has been fixed when the easement was constituted, but while the road is still open, he may not capriciously exclude defendant from its use. Having the road devoted to the public in general, the road is charged with public interest and while so devoted, the plaintiff may not establish discriminatory exceptions against any private person. He may withdraw his grant by discontinuing its use, but so long as he maintains it, he must submit to the control. Furthermore there exists a forcible right of way in favor of the defendant (CC 564) because those living in Hacienda Sangay have no access to the provincial road except through the road in question. DUMANGAS v BISHOP OF JARO DOCTRINE: Since the construction of the church, there had been a side door in the wall through which the worshippers attending mass enter and leave, passing and entering the land

RU U EASEMENTS (Art. 613-633) A N


Kindsof Easements (Art. 613-619) Modes of Acquiring Easements (Art. 620-626)

NORTH NEGROS SUGAR v HIDALGO DOCTRINE: The road is clearly a servitude voluntarily constituted in favor of the community under Art. 531. Having been devoted by NNSC to the use of the public in general, the road is charged with public interest. And while so devoted. NNSC may not establish discriminatory exceptions against any private persons. FACTS: Plaintiff is the owner of a sugar central (known as mill site) and also its adjoining plantation Hacienda Begona. He constructed a road adjoining the mill site and the provincial highway. Plaintiff allows vehicles to pass upon paying toll charge of P0.15 for each one; pedestrians are allowed free passage. Defendant owns the adjoining Hacienda Sangay wherein he has a billiard hall and a tuba saloon (as in drinking place). The road of the plaintiff is the only means of access to get to Hacienda Sangay. At one point, plaintiff stopped defendant from using the said road. Hence, instead of taking the road to get to his Hacienda Sangay, defendant passed through Hacienda Begona in a passageway used by the carabaos. Plaintiff applied for injunction to restrain the defendant from entering/passing through his properties (road & Hacienda). ISSUE: WON injunction should be granted. HELD: NO. For injunction to be granted, it must be established that the right sought to be

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


in question. As this use of the land has been continuous, it is evident that the church has acquired a right to such use by prescription, in view of the time that has elapsed since the church was built and dedicated to religious worship, during which period the Municipality has not prohibited the passage over the land by persons who attend services held by the church. FACTS: November 1, 1913, counsel for the municipality of Dumangas, Province of Iloilo, petitioned the Court of First Instance of said province, in conformity with the law, for the registration of six parcels of land of which said municipality claimed to be the absolute owner. These lands are situated in the barrio of Balabag of the pueblo of Dumangas, IloiloThe applicant alleged that it had acquired said lands by possession dating from time immemorial; that it was occupying one of said parcels as a public market, the rest of them being unoccupied. The application for registration was opposed by the Director of Lands, several private parties, and the Roman Catholic Bishop of Jaro. He stated that his objections were based on the ground that said lots absolutely and exclusively belonged to the Roman Catholic Apostolic Church, which had been in quiet and peaceable possession of same since time immemorial, and therefore prayed that the petition for registration be denied. ISSUE: Whether or not the applicant municipality of Dumangas, Iloilo is entitled to have inscribed in its name in the registry of property. HELD: The record shows it to have been duly proven that the disputed lot, is adjacent to the same wall that forms the side of the church of the pueblo of Dumangas; that in said wall or partition there is a side door through which the faithful pass in order to enter the church, and that in order to do so they are compelled to cross the land in question. However, reasonable may be the contention of the objecting corporation, the evidence does not

Atty. Jonathan Sarte

justify its claim, inasmuch as the record shows it to have been conclusively proven that the municipal government of the pueblo of Dumangas has been in possession of the lot in question for more than thirty years, and during this period of time have performed thereon acts of indisputable ownership, such as that of erecting a flag-staff for the use of the municipality and that of using said land as a corral for branding cattle; as a public square, it served as a place for posting the lists of persons called up as military conscripts. The circumstance that the priests in charge of the parish church of Dumangas consented to the performance by the municipal council of said pueblo of acts of possession and ownership over the lot of land in dispute, without their having protested against and objected to the same, clearly shows that the parish church did not then consider that it has a right to the portion of land it now claims, and for this reason we accept the conclusions of fact contained in the judgment appealed from. The record shows that the church of the pueblo of Dumangas was constructed in or about the year 1887; that its wall on the southeast side adjoins the building lot in question; and that since the construction of the church there has been a side door in this wall through which the worshippers attending divine service enter and leave, they having to pass over and cross the land in question. It is therefore to be presumed that the use of said side door also carries with it the use by faithful Catholics of the municipal land over which they have had to pass in order to gain access to said place of worship, and, as this use of the land has been continuous, it is evident that the Church has acquired a right to such use by prescription, in view of the time that has elapsed since the church was built and dedicated to religious worship, during which period the municipality has not prohibited the passage over the land by the persons who attend services customarily held in said church.

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


The record does not disclose the date when the Government ceded to the Church the land on which the church building was afterwards erected, nor the date of the laying out of the adjacent square that is claimed by the municipality and on which the side door of the church, which is used as an entrance by the people who frequent this building, gives. There are good grounds for presuming that in apportioning lands at the time of the establishment of the pueblo of Dumangas and in designating the land adjacent to the church as a public square, this latter was impliedly encumbered with the easement of a right of way to allow the public to enter and leave the church a case provided for by article 567 of the Civil Code for the municipality has never erected any building or executed any work which would have obstructed the passage and access to the side door of the church, and the public has been enjoying the right of way over the land in question for an almost immemorable length of time. Therefore an easement of right of way over said land has been acquired by prescription, not only by the church, but also by the public which, without objection or protest, has continually availed itself of the easement in question. The land in litigation shall, however, be understood to be burdened with an easement of right of way to allow passage to and from the side door of the church of Dumangas, to such extent as may be necessary for the transit of persons and four-wheeled vehicles. AMOR v FLORENTINO FACTS: It appears that over 50 years ago, Maria Florentino owned a house and a camarin or warehouse in Vigan, Ilocos Sur. The house had and still has, on the north side, three windows on the upper story, and a fourth one on the ground floor. Through these windows the house receives light and air from the lot where the camarin stands. On September 6, 1885, Maria Florentino made a will, devising the house and the land on which it is situated to Gabriel Florentino, one of the respondents herein, and to Jose Florentino, father of the other respondents. In said will, the testatrix also

Atty. Jonathan Sarte

devised the warehouse and the lot where it is situated to Maria Encarnancion Florentino. Upon the death of the testatrix in 1882, nothing was said or done by the devisees in regard to the windows in question. On July 14, 1911, Maria Encarnacion Florentino sold her lot and the warehouse thereon to the petitioner, Severo Amor, the deed of sale stating that the vendor had inherited the property from her aunt, Maria Florentino. In January, 1938, petitioner destroyed the old warehouse and started to build instead a two-story house. On March 1st of that year, respondents filed an action to prohibit petitioner herein from building higher than the original structure and from executing any work which would shut off the light and air that had for many years been received through the four windows referred to. The Court of First Instance found that the construction of the new house had almost been completed, so the court denied the writ of preliminary injunction. When the original owner, Maria Florentino, died in 1892, the ownership of the house and its lot passed to respondents while the dominion over the camarin and its lot was vested in Maria Encarnancion Florentino, from whom said property was later bought by petitioner. At the time the devisees took possession of their respective portions of the inheritance, neither the respondents nor Maria Encarnacion Florentino said or did anything with respect to the four windows of the respondents' house. The respondents did not renounce the use of the windows, either by stipulation or by actually closing them permanently. On the contrary, they exercised the right of receiving light and air through those windows. Neither did the petitioner's predecessor in interest, Maria Encarnacion Florentino, object to them or demand that they be close. The easement was therefore created from the time of the death of the original owner of both estates, so when petitioner bought the land and the camarin thereon from Maria Encarnancion Florentino, the burden of this easement continued on the real property so acquired because according to Article 534, "easements are inseparable from the estate to which they actively or passively pertain. HELD: Let us now consider Article 541 more closely in its application to the easement of light and view and to the easement not to build higher (altius non tollendi).

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


Art. 541. The existence of an apparent sign of easement between two estates, established by the proprietor of both, shall be considered, if one of them is alienated, as a title so that the easement will continue actively and passively, unless at the time the ownership of the two estates is divided, the contrary is stated in the deed of alienation of either of them, or the sign is made to disappear before the instrument is executed. From the standpoint of justice and public policy. First. When Maria Encarnacion Florentino, as one of the devisees, accepted the camarin and the lot, she could not in fairness receive the benefit without assuming the burden of the legacy. That burden consisted of the service in fact during the lifetime of the original owner, which service became a true easement upon her death. Second. According to Scaevola, the reason for the principle in question is that there is a tacit contract. It is not just to allow Maria Encarnacion Florentino or her successor in interest to repudiate her own undertaking, implied, it is true, but binding nevertheless. This easement is therefore a burden which Maria Encarnacion Florentino and her successor in interest willingly accepted. They cannot now murmur against any inconvenience consequent upon their own agreement .Third. During the construction of the new house by the petitioner, the respondents filed an action to stop the work. But petitioner continued the construction, so that when the Court of First Instance was ready to pass upon the preliminary injunction, the work had almost been finished. Petitioner, therefore, cannot complain if he is now ordered to tear down part of the new structure so as not to shut off the light from respondents' windows. Fourth. When petitioner bought this lot from the original coheir, Maria Encarnacion Florentino, the windows on respondents' house were visible. It was petitioner's duty to inquire into the significance of those windows. Having failed to do so, he cannot now question the easement against the property which he purchased. This idea of easements can never become obsolete in the face of modern progress. On the contrary, its need is all the more pressing and evident, considering that this mutual assistance and

Atty. Jonathan Sarte

giving way among estates is demanded by the complexities of modern conditions, such as those which obtain in large cities where buildings, large and small, are so close together. The easement has been established in favor of the property of respondents, for these reasons: 1. Maria Florentino having died in 1892, according to a finding of fact of the Court of Appeals, which we cannot review, Article 541 of the Civil Code is applicable to this case. 2. Granting, arguendo, that Maria Florentino died in 1885, nevertheless that same principle embodied in article 541 of the Civil Code was already an integral part of the Spanish law before the promulgation of the Civil Code in 1889, and therefore, even if the instant case should be governed by the Spanish law prior to the Civil Code, the easement in question would also have to be upheld. 3. The easement under review has been acquired by respondents through prescription. 4. The petitioner was not an innocent purchaser, as he was in duty bound to inquire into the significance of the windows. 5. Justice and public policy are on the side of the respondents. RONQUILLO v ROCO FACTS: The amended and supplemental complaint alleged that the plaintiffs have been in the continuous and uninterrupted use of a road or passage way which traversed the land of the defendants and their predecessors in interest, in going to Igualdad Street and the market place of Naga City, from their residential land and back, for more than 20 years; that the defendants and the tenants of Vicente Roco, the predecessors in interest of the said defendants have long recognized and respected the private legal easement of road right of way of said plaintiffs; that on May 12, 1953, the defendants Jose Roco thru his co-defendants, Raymundo Martinez and their men with malice aforethought and with a view to obstructing the plaintiffs' private legal easement over the property of the late Vicente Roco, started constructing a chapel in the middle of the said right of way construction actually impeded, obstructed and disturbed the

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


continuous exercise of the rights of the plaintiffs over said right of way; that on July 10, 1954 the new defendants Natividad Roco and Gregorio Miras, Jr. with the approval of the defendant, Jose Roco and with the help of their men and laborers, by means of force, intimidation, and threats, illegally and violently planted wooden posts, fenced with barbed wire and closed hermitically the road passage way and their right of way in question against their protests and opposition, thereby preventing them from going to or coming from their homes to Igualdad Street and the public market of the City of Naga. It is very clear from the allegations of the plaintiffs in their amended and supplemental complaint, that they claim to have acquired the easement of right of way over the land of the defendants and the latter's predecessors in interest, Vicente Roco, thru prescription by their continuous and uninterrupted use of a narrow strip of land of the defendants as passage way or road in going to Igualdad Street and the public market of Naga City, from their residential land or houses, and return. The dismissal was based on the ground that an easement of right of way though it may be apparent is, nevertheless, discontinuous or intermittent and, therefore, cannot be acquired through prescription, but only by virtue of a title. Under old as well as the New Civil Code, easements may be continuous discontinuous (intermittent), apparent or non-apparent, discontinuous being those used at more or less long intervals and which depend upon acts of man (Articles 532 and 615 of the Old and New Civil Codes, respectively). Continuous and apparent easements are acquired either, by title or prescription, continuous non-apparent easements and discentinuous ones whether apparent or not, may be acquired only by virtue of a title (Articles 537 and 539, and 620 and 622 of the Old and New Civil Codes, respectively). ISSUE: Whether an easement of right of way can be acquired thru prescription. HELD: Under the provisions of the Civil Code, old and new, particularly the articles thereof aforecited, it would therefore appear that the easement of right of way may not be acquired through prescription. Even Article 1959 of the Old Civil Code providing for prescription of ownership and other real rights in real property, excludes therefrom the exception established by

Atty. Jonathan Sarte

Article 539, referring to discontinuous easements, such as, easement of right of way. The minority of which the writer of this opinion is a part, believes that the easement of right of way may now be acquired through prescription, at least since the introduction into this jurisdiction of the special law on prescription through the Old Code of Civil Procedure, Act No. 190. Said law, particularly, Section 41 thereof, makes no distinction as to the real rights which are subject to prescription, and there would appear to be no valid reason, at least to the writer of this opinion, why the continued use of a path or a road or right of way by the party, specially by the public, for ten years or more, not by mere tolerance of the owner of the land, but through adverse use of it, cannot give said party a vested right to such right of way through prescription. The uninterrupted and continuous enjoyment of a right of way necessary to constitute adverse possession does not require the use thereof every day for the statutory period, but simply the exercise of the right more or less frequently according to the nature of the use. (17 Am. Jur. 972). However, the opinion of the majority must prevail, and it is held that under the present law, particularly, the provisions of the Civil Code, old and new, unless and until the same is changed or clarified, the easement of right of way may not be acquired through prescription. Rights and Obligations of Owners (Art. 627-630) LUNA v ENCARNACION FACTS: On September 25, 1948, a deed designated as chattel mortgage was executed by Jose A. Luna in favor of Trinidad Reyes whereby the former conveyed by way of first mortgage to the latter a certain house of mixed materials stated in barrio San Nicolas, municipality of Pasig, Province of Rizal, to secure the payment of a promissory note in the amount of P1,500, with interest at 12 per cent per annum. The document was registered in the office of the register of deeds for the Province of Rizal. The mortgagor having filed to pay the promissory note when it fell due, the mortgage requested the sheriff of said province to sell the house at public auction so that with its proceeds the amount indebted may be paid notifying the mortgagor in writing of the time and place of the sale as required by law. The sheriff acceded to the request and sold the property to the

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


mortgagee for the amount covering the whole indebtedness with interest and costs. The certificate of sale was issued by the sheriff on May 28, 1949. After the period for the redemption of the property had expired without the mortgagor having exercised his right to repurchase, the mortgagee demanded from the mortgagor the surrender of the possession of the property, but the later refused and so on October 13, 1950, she filed a petition in the Court of First Instance of Rizal praying that the provincial sheriff be authorized to place her in possession of the property invoking in her favor the provisions of Act No. 3135, as amended by Act No. 4118. When the petition came up for hearing before the court on October 25, 1950, Jose A. Luna, the mortgagor, opposed the petition on the following grounds: (1) that Act No. 3135 as amended by Act No. 4118 is applicable only to a real estate mortgage; (2) that the mortgage involved herein is a chattel mortgage; and (3) that even if the mortgage executed by the parties herein be considered as real estate mortgage, the extra-judicial sale made by the sheriff of the property in question was valid because the mortgage does not contain an express stipulation authorizing the extra-judicial sale of the property. ISSUE: Whether or not the extra judicial sale made by the sheriff is valid. HELD: The validity of the sale in question may be maintained, it appearing that the mortgage in question is a chattel mortgage and as such it is covered and regulated by the Chattel Mortgage Law, Act No. 1508. Section 14 of this Act allows the mortgagee through a public officer in almost the same manner as that allowed by Act No. 3135, as amended by Act No. 4118, provided that the requirements of the law relative to notice and registration are complied with. We are not prepared to state if these requirements of the law had been complied with in the case for the record before us is not complete and there is no showing to that effect. At any rate, this issue is not how important because the same can be threshed out when the opportunity comes for its determination, nor is it necessary for us to consider it in reaching a decision in the present case. Suffice it to state that for the present we are not expressing any opinion on this matter which concerns the validity of the sale in question for the reason that this opinion will only be limited to a matter of procedure relative to the

Atty. Jonathan Sarte

step taken by the mortgagee in securing the possession of the property involved. In the supposition that the sale of the property made by the sheriff has been made in accordance with law, and the question he is confronted is how to deliver the possession of the property to the purchaser in case of refusal to surrender its possession on the part of the debtor or mortgagor, the remedy of the purchaser according to the authorities, is to bring an ordinary action for recovery of possession. The purchaser cannot take possession of the property by force either directly or through the sheriff. And the reason for this is "that the creditor's right of possession is conditioned upon the fact of default, and the existence of this fact may naturally be the subject of controversy". The creditor cannot merely file a petition for a writ of possession as was done by Trinidad Reyes in this case. Her remedy is to file an ordinary action for recovery of possession in ordered that the debtor may be given an opportunity to be heard not only in regarding possession but also regarding the obligation covered by the mortgage. The petition she has filed in the lower court, which was not even docketed, is therefore improper and should be regarded. VALDERAMA v NORTH NEGROS SUGAR FACTS: As appears from the record, on November 17, 1916, several hacienda owners Manapla, Occidental Negros entered into a contract with Miguel J. Osorio, known as milling contract, wherein Osorio agreed to install in Manapla a sugar central of a minimum capacity of 300 tons, for grinding and milling all the sugar cane to be grown by the hacienda owners, who in turn bound themselves to furnish the central with all the cane they might produce in their estates for thirty years from the execution of the contract, all in accordance with the conditions specified therein. Later on, the defendant North Negros Sugar Co., Inc., acquired the rights and interest of Miguel J. Osorio in the milling contract aforesaid. Two years thereafter, that is to say, on January 29, 1919 Catalino Valderrama (case No. 23810) and on February 1st of the same year, Emilio Rodriguez (case No. 23811) and Santos Urra, Ignacio Benito Huarte, Adolfo Huarte and Pedro Auzmendi (case No. 23812) made with the appellant other milling contracts identical with the first one of November 17, 1916, with some new conditions which are

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

PROPERTY CASE DIGEST


specified in detail in the document. Santos Urra thereafter transferred to Pedro Auzmendi, and the latter to Lorenzo Echarri, their interest in the milling contract executed by them. In view of the fact that the hacienda owners, who were up to that time customers of the central, could not furnish sufficient cane for milling, as required by the capacity of said central, the defendant made other milling contracts with owners of Cadiz, Occidental Negros, in order to obtain sufficient cane to sustain the central; and this gave rise to the plaintiffs filing their complaint, alleging that the easement of way, which each of them has established in his respective hacienda, was only for the transportation through each hacienda of the sugar cane of the owner thereof, while the defendant maintains that it had the right to transport to its central upon the railroad passing through the haciendas of the plaintiffs, not only the sugar cane harvested in said haciendas, but also that of the hacienda owners of Cadiz, Occidental Negros. The defendant answered the amended complaints, admitting some allegations thereof and denying others. And as special defense, it alleged that the plaintiffs respectively granted the defendant, for the period of fifty years from the date of the aforesaid contracts, an easement of way 7 meters wide upon the lands of the plaintiffs for the construction and operation of a railroad for the transportation of sugar cane; that said easement of way was established without any restriction whatsoever, as regards the ownership of the cane to be transported over the said railroad; that said contract was then in full force and effect and had never been annulled or modified. After hearing the three cases, the trial court entered one single judgment for all of them, holding that the defendant had no right to pass through the lands of the plaintiffs described in their amended complaints for the transportation of sugar cane not grown from any of the haciendas of the plaintiffs. From this judgment, the defendant appealed. HELD: It is against the nature of the easement to pretend that it was established in favor of the servient estates, because it is a well settled rule that things serve their owner by reason of ownership and not by reason of easement.This is a case of an easement for the benefit of a corporation, voluntarily created by the plaintiffs upon their respective estates for the construction of a railroad connecting said estates with the central of the defendant. Once the road is

Atty. Jonathan Sarte

constructed, the easement is apparent because it is continuously exposed to view by the rails which reveal the use and enjoyment of said easement. It is evident, as above stated, that the cane of the plaintiffs if to be transported to the central by means of wagons passing upon the railroad; but as the easement was created for the benefit of the corporation, owner of the central, it may cause its wagons to pass upon the road as many times as it may deem fit, according to the needs of the central. If the plaintiffs do not produce sufficient cane to cover the capacity of the central, it would be unjust to impose upon the defendant corporation the burden of maintaining a central, prohibiting it to obtain from another source sufficient cane with which to maintain its business; this is specially true here, because in the milling contract with the plaintiffs, there is nothing to prohibit the defendant from making milling contracts with other planters, and obtain in that way all cane necessary to cover the capacity of the central. The record shows a circumstance indicating that at the time of the execution of the milling contracts above referred to, there was no intention of the part of the contracting parties to limit the use of the railroad to the transportation of cane grown by the plaintiffs in their respective haciendas, and that is because, while the duration of the milling contracts is fixed at thirty years, that of the easement is at fifty. So that if at the end of thirty years the plaintiffs or their successors should no longer desire to furnish canes for milling in the central of the defendant, the latter shall still have the right to the easement for the remaining period, but without transporting on the railroad any cane for the central. An interpretation of the clause in question leading to such a result is untenable. The trial court erred in finding that the appellant could not transport on its railroad passing through the haciendas of the appellees, where it has an easement of way established in its favor, the cane grown in the haciendas of the procedures of Cadiz, Occidental Negros, to be milled in the central of the appellant. Modes of Extinguishment (Art. 631-633) NOTHING FOLLOWS

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DOMASIANPAGADORRIVERATOLEDO. VILLARTA
FAR EASTERN UNIVERSITY - INSTITUTE OF LAW
No Copyright Infringement Intended

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