PROPERTY CASE DIGESTS | 10TH WEEK

(1) GABOYA V. CUI FACTS: Don Mariano sold his three lots pro diviso to his three children. One of his children, due to lack of funds, was not able to purchase part of the land. This reverted back to the father. As part of the sale, the father reserved for himself the usufruct of the property. He coowned the land with his children then. A building was then constructed in a portion of the land, wherein the rentals was given to the father. Thereafter, he two children who were co-owners obtained a loan, secured by a mortgage, with authority of the father, to construct a commercial building. The father alleges that since he has a usufruct over the land, he has usufruct or share in the rentals earned through the constructed building. ISSUE: W/N the usufruct extended to the rentals of the building subsequently built by the 2 children co-owners HELD: NO. The reserved right of vendor on a parcel of land does NOT include rentals from the building subsequently constructed on the vacant lots, but that it did entitle the usufructuary (Don Mariano) to a reasonable rent for the portion of the land being occupied by the building. 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: (1) W/N the usufruct included the building and the land? (2) W/N the usufructuary (FABIE) or naked owner (VDA DE ALBAR) should undertake the reconstruction? (3) 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 "fincas situadas" 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, por Martines 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 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

(2) VDA. DE ALBAR V. CARANGDANG 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 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

PROPERTY CASE DIGESTS | 10TH WEEK

(4) BALURAN V. NAVARRO DOCTRINE: 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 his mother and demanded that Baluran, who was in possession, vacate. Baluran now counters that the barter already transferred ownership. ISSUE: W/N the contract was a barter or something else (hula ko lang 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.