Civil Law Study Guide – Property Rights

PART I: CLASSIFICATION AND GENERAL CONCEPTS OF PROPERTY

A. Classification of Property (Article 414)

Legal Provision:

“All things which are or may be the object of appropriation are considered either: (1) Immovable or real property; or (2) Movable or personal property.”

1. Immovable or Real Property (Articles 415-417)

Legal Provisions:

Article 415: “The following are immovable property: (1) Land, buildings, roads and constructions of all kinds adhered to the soil…”
Article 416: “The following things are deemed to be immovable property: (1) Rights over immovable property…”
Article 417: “The following are also considered as immovable property: (1) 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…”

Why These Classifications Exist:

Economic Importance: Real property represents the most valuable assets in society
Permanence: These assets are fixed and cannot be easily moved or hidden
Public Records: Facilitates registration and public notice systems
Credit Security: Real property serves as reliable collateral for loans

2. Movable or Personal Property (Articles 418-419)

Legal Provisions:

Article 418: “Movable property is either consumable or non-consumable…”
Article 419: “Consumable goods are those which cannot be used in a manner appropriate to their nature without their being consumed…”

Why This Classification Matters:

Ease of Transfer: Simpler procedures for transfer and sale
Commercial Transactions: Facilitates trade and commerce
Legal Procedures: Different rules for attachment and execution
Inheritance: Different rules for distribution among heirs

Practical Legal Consequences:

Statute of Frauds: Real property sales must be in writing
Registration Requirements: Real property transfers require registration
Prescription Periods: Different periods for acquiring ownership
Remedies: Different legal remedies available for each type

PART II: OWNERSHIP – RIGHTS AND ACQUISITION

A. Nature of Ownership (Article 428)

Legal Provision:

“The owner has the right to enjoy and dispose of a thing, without other limitations than those established by law. The owner has also a right of action against the holder and possessor of the thing in order to recover it.”

Why This Broad Definition:

Individual Liberty: Protects personal autonomy and economic freedom
Economic Development: Encourages investment and improvement of property
Social Stability: Clear ownership rights prevent conflicts and disputes
Constitutional Foundation: Implements constitutional protection of property rights

Essential Rights of Ownership (Jus Dominii):

Jus Utendi – Right to use the property
- Legal Basis: Inherent in ownership concept
- Why: Owner should benefit from property’s utility
- Limitations: Environmental laws, zoning ordinances, neighbor’s rights
Jus Fruendi – Right to enjoy the fruits/income
- Legal Basis: Article 441 – “To the owner belongs the natural, industrial and civil fruits”
- Why: Owner should benefit from property’s productivity
- Scope: Includes rental income, agricultural produce, business profits
Jus Abutendi – Right to consume, destroy, or dispose
- Legal Basis: Article 428’s “right to dispose”
- Why: Ultimate expression of ownership dominion
- Limitations: Cannot harm others, environmental protection laws
Jus Disponendi – Right to transfer ownership
- Legal Basis: Article 428 and contract law provisions
- Why: Enables commerce and voluntary transactions
- Methods: Sale, donation, exchange, succession

Owner’s Remedies (Reivindicatory Action):

Legal Provision – Article 428:

“The owner has also a right of action against the holder and possessor of the thing in order to recover it.”

Why This Right Exists:

Protection of Ownership: Meaningless without enforcement mechanism
Deterrent Effect: Discourages unlawful taking or detention
Social Order: Maintains respect for property rights
Economic Security: Owners can confidently invest in property

Types of Actions:

Accion Reivindicatoria: Recovery of ownership
Accion Publiciana: Recovery of possession with better right
Quieting of Title: Removal of clouds on ownership

B. Modes of Acquiring Ownership (Article 712)

1. Occupation (Article 713)

Legal Provision:

“The ownership of a thing acquired by occupation is obtained by the seizure of a thing which belongs to no one, with the intention of acquiring it, or by hunting or fishing in appropriate places and in accordance with law.”

Why Occupation is Recognized:

Natural Law Theory: First possession creates the strongest claim
Economic Efficiency: Encourages productive use of abandoned resources
Historical Basis: One of the oldest methods of acquiring property
Social Utility: Prevents resources from remaining unused

Requirements for Valid Occupation:

Res Nullius: Thing must belong to no one
- Article 714: “Only things with no owner can be acquired by occupation”
- Why: Cannot steal from existing owners
- Examples: Wild animals, abandoned property, treasure (with limitations)
Physical Seizure: Actual taking or control
- Legal Basis: Intent alone is insufficient
- Why: Establishes clear moment of acquisition
- Methods: Capture, taking possession, marking boundaries
Animus Domini: Intention to acquire ownership
- Legal Basis: Distinguishes from mere custody
- Why: Mental element shows serious intent to own
- Evidence: Actions consistent with ownership claims

Special Rules:

Hunting and Fishing (Article 713):

“In appropriate places”: Must comply with laws and regulations
Why: Balances individual rights with conservation and public policy
Limitations: Licenses required, closed seasons, protected species

Treasure (Articles 718-719):

Article 718: “By treasure is understood… hidden and unknown deposit of money, jewelry, or other precious objects…”
Article 719: “Treasure belongs to the owner of the land… However, when the discovery is made on the property of another… it shall be divided equally…”
Why: Balances finder’s effort with landowner’s rights

2. Intellectual Creation

Governing Law: Intellectual Property Code (RA No. 8293)

Constitutional Basis:

Article XIV, Section 13: “The State shall protect and secure the exclusive rights of scientists, inventors, artists, and other gifted citizens to their intellectual property and creations…”

Why Intellectual Property is Protected:

Innovation Incentive: Rewards creativity and invention
Economic Development: Encourages research and development
Social Progress: Benefits society through new knowledge and art
International Competitiveness: Aligns with global IP standards

Types of Intellectual Property:

Patents (Sections 21-71, IP Code):
- Requirements: Novel, inventive step, industrial application
- Duration: 20 years from filing
- Why: Balances inventor’s reward with eventual public benefit
Copyrights (Sections 172-217, IP Code):
- Protection: Original literary and artistic works
- Duration: Life of author plus 50 years
- Why: Encourages creative expression and cultural development
Trademarks (Sections 121-171, IP Code):
- Purpose: Distinguish goods and services
- Duration: 10 years, renewable indefinitely
- Why: Protects consumers and business goodwill

3. Law (Operation of Law)

Examples and Legal Basis:

Inheritance by Legal Succession:

Article 960: “Legal or intestate succession takes place: (1) If a person dies without a will…”
Why: Ensures orderly transfer of wealth and family support
Policy: Presumed intent of deceased to benefit family

Accretion and Alluvion (Article 457):

Legal Provision: “To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters.”
Why: Natural and gradual process; riparian owner bears risks and should receive benefits
Limitation: Must be gradual and imperceptible

Expropriation (Article 435):

Legal Provision: “No person shall be deprived of his property except by competent authority and for public use and always upon payment of just compensation.”
Why: Balances individual property rights with public welfare
Constitutional Basis: Due process and just compensation requirements

4. Donation (Article 725)

Legal Provision:

“Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it.”

Why Donations are Regulated:

Fraud Prevention: Protects against sham transactions
Family Protection: Safeguards inheritance rights (legitime)
Formality Requirements: Ensures serious intent and proper documentation
Tax Implications: Facilitates proper tax assessment

Essential Elements:

Liberality (Animus Donandi):
- Legal Basis: Must be truly gratuitous
- Why: Distinguishes from disguised sales or payments
- Evidence: No expectation of equivalent return
Gratuitous Transfer:
- Article 726: “When there is an onerous clause, or when the donee is charged with the payment of debts of the donor, the donation is not gratuitous…”
- Why: Protects donor’s creditors and inheritance rights
Acceptance by Donee:
- Article 734: “The donation is perfected the moment the donor knows of the acceptance by the donee.”
- Why: Contract requires meeting of minds
- Method: May be express or implied through conduct
Delivery (For Movables):
- Article 748: “The donation of a movable may be made orally or in writing. If the value exceeds five thousand pesos, the donation… must be made in writing.”
- Why: Prevents fraud and ensures evidence of transfer

Special Rules:

Donations Between Spouses (Article 739):

Prohibition: Generally prohibited during marriage
Why: Prevents circumvention of property relations regime
Exception: Moderate gifts on occasions of family rejoicing

Donations Mortis Causa (Article 728):

Rule: Must comply with will formalities
Why: Revocable nature makes them testamentary dispositions
Policy: Protects inheritance rights and formality requirements

5. Succession (Article 774)

Definition: Mode of acquisition by which property rights are transmitted upon death

Types:

Testate Succession: According to will
Intestate Succession: According to law

What is Transmitted:

Property rights
Obligations (to extent of inheritance value)
Personal rights that survive death

6. Contracts with Tradition

Most Common: Sale (Article 1458)

Elements of Sale:

Consent of parties
Determinate object
Price certain in money or equivalent
Delivery (tradition) to transfer ownership

Other Contracts:

Barter or exchange
Dation in payment
Contracts of lease with option to buy

C. Tradition/Delivery (Article 1497)

Definition: The act by which ownership is transferred from seller to buyer

When Delivery Occurs:

When thing is placed in control and possession of vendee
Physical or constructive delivery
Symbolic delivery (keys, documents)

PART III: SPECIAL CONCEPTS

A. Accession (Article 440)

Principle: Ownership includes everything produced by or attached to the property

Types:

Natural Accession
- Fruits of the property
- Offspring of animals
- Natural deposits
Artificial Accession
- Buildings and improvements
- Plantings and cultivations
- Industrial products

B. Prescription (Articles 1106, 1118)

Definition: Acquisition of ownership through lapse of time under legal conditions

Types:

Ordinary Prescription
- Requires just title and good faith
- 10 years for movables, 10 years for immovables
Extraordinary Prescription
- No need for title or good faith
- 30 years regardless of property type

Interruption (Article 1111):

Judicial claim
Express or tacit recognition by possessor

C. Expropriation (Article 435)

Definition: Government taking of private property for public use

Requirements:

Competent authority
Public use or purpose
Just compensation
Due process of law

PART IV: POSSESSION

A. Nature and Definition (Article 523)

Legal Provision:

“Possession is the holding of a thing or the enjoyment of a right.”

Why Possession is Protected by Law:

Peaceful Order: Prevents violent disputes over property
Presumption of Right: Possessor likely has some legitimate claim
Economic Efficiency: Protects those who productively use property
Practical Necessity: Easier to prove possession than ownership

Types of Possession Recognized:

Material/Actual Possession: Physical control and detention
Legal Possession: Juridical recognition as owner

Distinction from Ownership:

Possession: A fact – actual relationship with the thing
Ownership: A right – legal relationship recognized by law
Why Important: Different remedies and legal consequences

B. Classifications of Possession (Articles 524-528)

1. As to Concept (Article 524)

Legal Provisions:

Article 524: “Possession may be exercised in one’s own name or in that of another.”

In Concept of Owner (Article 525):

Legal Provision: “The possession of things or rights may be had in one of two concepts: either in the concept of owner, or in that of the holder of the thing or right to keep or enjoy it, the ownership pertaining to another person.”
Why: Possessor claims full dominion and intends to own
Legal Effect: Can lead to acquisitive prescription
Example: Buyer in good faith from non-owner

In Concept of Holder (Article 526):

Legal Provision: “He is deemed a possessor in good faith who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it.”
Why: Possessor acknowledges another’s superior right
Legal Effect: Cannot acquire ownership by prescription
Examples: Lessee, depositary, usufructuary

2. As to Good Faith (Articles 526-527)

Good Faith Possession (Article 526):

Legal Provision: “He is deemed a possessor in good faith who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it.”
Why Good Faith is Protected:
- Moral Desert: Innocent party should not suffer
- Commercial Certainty: Protects legitimate transactions
- Social Policy: Encourages reliance on apparent rights
Presumption: Good faith is always presumed (Article 527)

Bad Faith Possession (Article 527):

Legal Provision: “Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof.”
When it Begins: Knowledge of flaw in title or adverse claim
Why Penalized:
- Moral Culpability: Conscious wrongdoing
- Deterrent Effect: Discourages dishonest behavior
- Victim Protection: Compensates true owner

3. As to Title (Article 528)

With Just Title:

Article 528: “Possession acquired in good faith does not lose this character except in the case and from the moment facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongfully.”
Definition: Valid legal basis for possession
Examples: Sale, donation, inheritance
Effect: Shorter prescription period for ownership

Without Just Title:

Meaning: No legal basis or defective title
Examples: Squatter, thief, finder
Effect: Longer prescription period required

C. Effects and Importance of Possession

1. Legal Presumptions

Article 541 – Presumption of Ownership:

“A possessor in the concept of owner has in his favor the legal presumption that he possesses with a just title and he cannot be obliged to show or prove it.”

Why This Presumption Exists:

Practical Necessity: Ownership often difficult to prove
Social Order: Protects current peaceful enjoyment
Burden of Proof: Forces challenger to prove superior right
Commercial Efficiency: Facilitates business transactions

Article 542 – Presumption of Good Faith:

“The possession of personal property acquired in good faith is equivalent to a title.”

Why: Protects commerce in movable goods where investigation of title is impractical

2. Rights of Possessors

Good Faith Possessor Rights (Article 544):

Legal Provision:

“A possessor in good faith is entitled to the fruits received before the possession is legally interrupted.”

Why These Rights Exist:

Compensation for Care: Possessor maintained and improved property
Reliance Interest: Possessor acted reasonably based on apparent rights
Unjust Enrichment: Owner benefits from possessor’s efforts
Incentive for Care: Encourages proper maintenance

Specific Rights:

Fruits Before Interruption: Natural, industrial, and civil fruits
Necessary Expenses: Full reimbursement (Article 546)
Useful Improvements: Right to remove if no damage (Article 547)
Luxurious Improvements: No right to reimbursement

Bad Faith Possessor Obligations (Article 549):

Legal Provision:

“The possessor in bad faith shall reimburse the fruits received and those which the legitimate possessor could have received…”

Why Harsh Treatment:

Moral Punishment: Conscious wrongdoing deserves penalty
Deterrent Effect: Discourages unlawful possession
Full Restitution: Owner should not suffer from wrongful act
No Reward for Wrongdoing: Bad faith should not profit

3. Possessory Actions

Purpose: Protect peaceful possession regardless of ownership

Types of Actions:

Forcible Entry (Rule 70, Rules of Court):
- When Used: Illegal taking of possession by force, intimidation, stealth, or strategy
- Why Protected: Maintains peace and order
- Remedy: Restoration of possession plus damages
Unlawful Detainer (Rule 70, Rules of Court):
- When Used: Lawful possession becomes unlawful after demand to vacate
- Example: Tenant who refuses to leave after lease expiration
- Why: Protects property rights after lawful relationship ends
Accion Publiciana:
- Purpose: Recovery of possession by person with better right
- Basis: Superior possessory right, not necessarily ownership
- Why: Intermediate remedy between possessory actions and ownership suits

Why Separate from Ownership Actions:

Speed: Faster resolution than ownership disputes
Peace and Order: Prevents self-help and violence
Practical Justice: Protects current possessor pending ownership determination

PART V: USUFRUCT

A. Nature and Definition (Article 562)

Legal Provision:

“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.”

Why Usufruct Exists in Law:

Family Protection: Allows support for surviving spouse while preserving inheritance
Economic Efficiency: Separates use from ownership to maximize utility
Flexibility: Accommodates various family and business arrangements
Wealth Management: Enables income generation while preserving capital

Essential Elements:

Property of Another: Usufructuary cannot own the property
Right to Enjoy: Includes use and fruits
Preserve Form and Substance: Cannot alter essential character
Temporary Nature: Limited in duration

Parties and Their Legal Status:

Usufructuary:

Rights: Use and enjoyment (jus utendi et fruendi)
Status: Real right holder, not mere personal right
Obligations: Preserve property, pay certain expenses

Naked Owner (Nudo Propietario):

Rights: Ownership without use and enjoyment
Status: Retains jus abutendi and jus disponendi
Limitations: Cannot interfere with usufructuary’s rights

B. Rights of Usufructuary (Articles 564-566)

1. Primary Rights – Use and Enjoyment

Article 564:

“The usufructuary shall have the right to enjoy any increase which the thing may acquire through accession, the natural or industrial fruits, the rents or any other benefits arising from the same.”

Why These Broad Rights:

Economic Incentive: Encourages proper care and improvement
Complete Enjoyment: Makes usufruct economically viable
Natural Justice: Those who bear burdens should receive benefits

2. Right to Fruits (Article 565)

Legal Provision:

“The fruits accruing during the usufruct belong to the usufructuary, even though they may ripen after the termination of the usufruct; and those fruits which were pending at the time the usufruct began, even though they ripen during the usufruct, belong to the owner.”

Types of Fruits Covered:

Natural Fruits:

Definition: Products without human intervention
Examples: Fruits from trees, offspring of animals
Why Included: Reward for care and maintenance

Industrial Fruits:

Definition: Products requiring human labor
Examples: Crops, manufactured goods
Why Included: Compensation for usufructuary’s efforts

Civil Fruits:

Definition: Income from property
Examples: Rent, interest, dividends
Legal Basis: Article 441 – fruits belong to owner during ownership period
Application: Usufructuary is temporary “owner” of use rights

3. Right to Improvements (Article 579)

Legal Provision:

“The usufructuary may make on the property held in usufruct such useful improvements or expenses for mere pleasure as he may deem proper, provided he does not alter the form or substance thereof; but he shall have no right to be indemnified therefor. He may, however, remove such improvements, should it be possible to do so without damage to the property.”

Why This Rule:

Ownership Protection: Prevents forced improvements on owner
Usufructuary Freedom: Allows personal adaptations during usufruct
Balanced Approach: Permits improvements but without reimbursement claim
Damage Prevention: Protects property integrity

Types of Improvements:

Necessary Improvements: For property preservation (usufructuary’s obligation)
Useful Improvements: Increase property value (no reimbursement)
Luxurious Improvements: For pleasure only (entirely at usufructuary’s risk)

C. Obligations of Usufructuary

1. Pre-Enjoyment Obligations

Article 583 – Inventory and Security:

“The usufructuary, before entering upon the enjoyment of the property, is obliged: (1) To make, after notice to the proprietor or his legitimate representative, an inventory of all the property, which shall contain an appraisal of the movables and a description of the condition of the immovables; (2) To give security, binding himself to fulfill the obligations imposed upon him in accordance with this Chapter.”

Why These Requirements:

Evidence Preservation: Documents initial condition for later accountability
Owner Protection: Ensures compensation for any deterioration
Risk Management: Bonds protect against usufructuary default
Clear Record: Prevents disputes about property condition

Exceptions to Security Requirement (Article 584):

Parents as usufructuaries of children’s property
Surviving spouse in legal usufruct
When donor/testator waives requirement

2. During Usufruct Obligations

Article 593 – Preservation Duty:

“The usufructuary is obliged to make the ordinary repairs needed by the thing given in usufruct; by ordinary repairs are understood those which are occasioned by the natural wear and tear due to the natural use of the thing and are indispensable for its preservation.”

Why Usufructuary Bears This Burden:

User Responsibility: Those who benefit should bear ordinary costs
Preservation Incentive: Encourages proper care during use
Fair Allocation: Owner handles extraordinary repairs as capital improvements
Economic Logic: Current user best positioned to maintain property

Article 601 – Taxes on Fruits:

“The usufructuary of a movable or immovable by universal title or of a part thereof, is obliged to pay the annual charges and taxes and the fees due thereon during the usufruct.”

Why This Allocation:

Benefit Theory: Those receiving income pay related taxes
Current Capacity: Usufructuary has present resources from fruits
Administrative Efficiency: Avoids complex reimbursement arrangements

3. Extraordinary Repairs (Article 594)

Legal Provision:

“If the owner should make the extraordinary repairs, he shall have a right to demand of the usufructuary the legal interest on the amount expended for this purpose.”

Why Owner’s Responsibility:

Capital Nature: Major repairs preserve long-term value
Ownership Burden: Owner retains ultimate ownership obligations
Economic Fairness: Owner benefits from improved property after usufruct
Interest Payment: Compensates owner for current expenditure

D. Termination of Usufruct (Article 603)

Legal Provision:

“Usufruct is extinguished: (1) By the death of the usufructuary; (2) By the expiration of the period for which it was constituted, or by the fulfillment of the resolutory condition provided in the title creating the usufruct; (3) By merger of the usufruct and ownership in the same person; (4) By renunciation of the usufructuary; (5) By the total loss of the thing in usufruct; (6) By the termination of the right of the person constituting the usufruct; (7) By prescription.”

1. Death of Usufructuary (Natural Termination)

Why Death Terminates:

Personal Nature: Usufruct is personal to the usufructuary
Family Protection: Prevents indefinite delay of inheritance
Legal Policy: Avoids perpetual separation of ownership and use
Exception: Juridical persons (corporations) – different rules apply

2. Expiration/Condition (Contractual Termination)

Why Parties Can Set Terms:

Freedom of Contract: Allows flexible arrangements
Certainty: Clear termination prevents disputes
Planning Tool: Facilitates estate and business planning

3. Merger (Legal Impossibility)

Article 603(3) Application:

Same Person Principle: Cannot have usufruct in own property
Legal Logic: Ownership includes all rights usufruct would provide
Automatic Effect: No declaration needed, happens by operation of law

4. Total Loss of Property

Why Total Loss Terminates:

Impossibility: Cannot exercise rights over non-existent property
Risk Allocation: Neither party at fault for acts of God
Complete Loss Required: Partial loss only suspends rights proportionally

Article 607 – Partial Loss:

“If the usufruct is constituted on immovable property of which a building forms part, and the latter should be destroyed in any manner whatsoever, the usufructuary shall have a right to make use of the land and the materials.”

Why Different Rule for Partial Loss:

Remaining Value: Part of property still exists and usable
Proportional Rights: Rights continue to extent property remains
Practical Solution: Allows continued benefit from remaining assets usufructuary’s expense
Pay Charges: Taxes and expenses on fruits
Notify Owner: Of need for extraordinary repairs

3. Upon Termination

Return Property: In same condition
Account for Fruits: Especially if bad faith
Remove Improvements: If separable without damage

D. Termination of Usufruct (Article 603)

1. Natural Causes

Death of Usufructuary: Unless juridical person
Expiration of Term: If limited period
Fulfillment of Condition: If conditional

2. Legal Causes

Total Loss: Destruction of property
Merger: Same person becomes owner and usufructuary
Prescription: Non-use for required period

3. Voluntary Causes

Renunciation: Express waiver by usufructuary
Mutual Agreement: Between parties

PART VI: EASEMENTS (SERVITUDES)

A. Nature and Definition (Article 613)

Legal Provision:

“An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner.”

Why Easements Exist in Law:

Economic Efficiency: Maximizes utility of both properties
Necessity: Some properties require access through others
Social Utility: Promotes productive use of land
Accommodation Principle: Balances competing property rights

Essential Elements (All Must Be Present):

Two Immovable Properties:
- Legal Basis: Article 613 limitation to immovables
- Why: Permanent burden requires permanent property
- Exception: None recognized in Philippine law
Different Owners:
- Legal Logic: Cannot have easement over own property
- Merger Effect: Easement extinguished if same person acquires both
- Policy: Prevents unnecessary legal complications
Benefit to Dominant Estate:
- Requirement: Must enhance utility, convenience, or value
- Why: Justifies burden on servient estate
- Test: Benefit must be real and substantial, not merely personal
Burden on Servient Estate:
- Nature: Limitation on owner’s use of property
- Compensation: Usually through necessity or agreement
- Extent: Only what is necessary for easement purpose