On Whether or Not a Usufruct is an Encumbrance:

 Usufruct is defined in Article 562 of the New Civil Code as that which “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.”

 The Court held in Moralidad vs Sps. Pernes (GR 152809, August 3, 2006) that “Usufruct, in essence,
is nothing else but simply allowing one to enjoy another’s property. It is also defined as the right
to enjoy the property of another temporarily, including both the jus utendi and the jus
fruendi, with the owner retaining the jus disponendi or the power to alienate the same.”

 Thus basically, the concept of usufruct is the combination of the right to use (jus utendi) and the
right to the fruits (jus fruendi)

 The Court defined “encumbrance” in People vs Bataclan (GR 81541, Oct. 4, 1989) as a “burden
upon land, depreciative of its value, such as a lien, easement, or servitude, which, though adverse
to (the) interest of (the) landowner, does not conflict with his conveyance of (the) land in fee.”

 Moreover, the Court held that “the following are considered encumbrances: A claim, lien, charge,
or liability attached to and binding real property; e.g., a mortgage, judgment lien, lease, security
interest, easement or right of way, accrued and unpaid taxes.”

 In Roxas vs Cayetano (GR 92245, June 26, 1991), the Court similarly defined an encumbrance as
“every right to, or interest in, the land which may subsist in third persons, to the diminution of
the value of the land, but consistent with the passing of the fee by the conveyance; any (act) that
impairs the use or transfer of property or real estate . . ."

 In view of the foregoing, a usufruct may therefore be considered as an encumbrance. As held in

Roxas vs Cayetano, an encumbrance is “every right to, or interest in, the land which may subsist
in third persons…” While it was held in Moralidad vs Sps. Pernes that a usufruct is a “right to enjoy
the property of another temporarily…” Since an encumbrance is every right to or interest in the
land, and a usufruct is a right to enjoy the land of another, therefore, a usufruct must be deemed
as a form of encumbrance.

 Although no case was found that reached that Supreme Court where the issue settled was
whether or not a usufruct is an encumbrance, there are however several Supreme Court cases
that conclusively recognized or mentioned usufruct as an encumbrance, without contesting or
invalidating it.

 In Hemedes vs CA (GR 107132, Oct. 8, 1999), the Court held the following that considered
usufructory rights as an encumbrance:

o “In holding that R & B Insurance is not a mortgagee in good faith, public respondent stated
that the fact that the certificate of title of the subject property indicates upon its face that
the same is subject to an encumbrance, i.e. usufructuary rights in favor of Justa Kausapin
during her lifetime or widowhood, should have prompted R & B Insurance to ...investigate
further the circumstances behind this encumbrance on the land in dispute, but which it
 failed to do. Also, public respondent considered against R & B Insurance the fact that it
made it appear in the mortgage contract that the land was free from all liens, charges,
taxes and encumbrances.”

o “Based on the foregoing, the annotation of usufructuary rights in favor of Justa Kausapin
is not sufficient cause to require R & B Insurance to investigate Maxima Hemedes title,
contrary to public respondents ruling, for the reason that Maxima Hemedes ownership
over the property remained unimpaired despite such encumbrance.”

o “Being an innocent mortgagee for value, R & B Insurance validly acquired ownership over
the property, subject only to the usufructuary rights of Justa Kausapin thereto, as this
encumbrance was properly annotated upon its certificate of title.”

o “WHEREFORE, the assailed decision of public respondent and its resolution dated
February 22, 1989 are REVERSED. We uphold petitioner R & B Insurances assertion of
ownership over the property in dispute, as evidenced by TCT No. 41985, subject to the
usufructuary rights of Justa Kausapin, which encumbrance has been properly annotated
upon the said certificate of title. No pronouncement as to costs.”

 Similarly, in the case of Vda. De Albar vs Carangdang (GR L-13361, Dec. 20, 1959), usufruct was
also considered as an encumbrance:
o “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-Español, 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).”

o “However, the majority as of the opinion that same should also be subject to usufruct for
life because it has not been used in the construction that the naked owners may turn over
the money to the usufractuary so that she may use it during her lifetime subject to its
return to them after her death if they desire to be relived of this encumbrance.”