Property - RIght of Possession - Case Doctrines

PropertyRight of Possession

Case Doctrines

Frondarina v. Malazarte, G.R. No. 148423

Tax declarations are clear manifestations and strong indications of possession and occupation of a parcel of land. Tax receipts are evidential and suggestive demonstration of their possession of the subject lot in the concept of an owner.

Although tax declarations or real estate payments of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of an owner.

*Notes.Tax receipts and declarations are prima facie proofs of ownership or possession of the property for which such taxes have been paid, coupled with proof of actual possession of the property they may become the basis of a claim for ownership. (De la Cruz v. Court of Appeals, 412 SCRA 282)

The first in time is the first in right. (Frondarina v. Malazarte)Where the dispute over possession arises between two persons, the person first having actual possession is the one who is entitled to maintain an action granted by law. (Gaza v. Lim, 395 SCRA 261)

Yu v. Pacleb, G.R. No. 130316

The Civil Code states that possession is the holding of a thing or the enjoyment of a right. In the grammatical sense, to possess means to have, to actually and physically occupy a thing, with or without right. “Possession always includes the idea of occupation x x x. It is not necessary that the person in possession should himself be the occupant. The occupancy can be held by another in his name.” Without occupancy, there is no possession.

Two things are paramount in possession:1.) There must be occupancy, apprehension or taking.2.) There must be intent to possess (animus possidendi).

The payment of real estate tax is one of the most persuasive and positive indications showing the will of a person to possess in concepto de dueño or with claim of ownership.

Capuyoc v. De Sola, G.R. No. 151322

An action for forcible entry is a quieting process that is summary in nature. It is

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designed to recover physical possession x x x. In forcible entry, the plaintiff is deprived of physical possession by means of force, intimidation, threat, strategy or stealth. The presence of any of these elements implies that the possession of the disputed land by the defendant has been unlawful from the beginning; that is he acquired possession by illegal means. The principal issue to be resolved in forcible entry cases is mere physical or material possession (possession de facto) and not juridical possession (possession de jure) nor ownership of the property involved. Title is not involved.

Malayan Realty, Inc. v. Uy Han Yong, G.R. No. 163763

The lease period was not agreed upon by the parties; Art. 1687, par. 2 – in the event that the lessee has occupied the leased premises for over a year, the courts may fix a longer term for the lease. The power of the courts to establish a grace period is potestative or discretionary, depending on the particular circumstances of the case. Where a petitioner has been deprived of its possession over the leased premises for so long a time, and it is shown that, indeed, the respondent was the recipient of substantial benefits while the petitioner was unable to have the full use and enjoyment of a considerable portion of its property, such militates against further deprivation by fixing a period of extension.

Labastida v. Court of Appeals, G.R. No. 110174

A lease on a month-to-month basis is deemed to expire at the end of the month upon notice to vacate addressed by the lessor to the lessee. The refusal of the lessee to leave the premises gives rise to an action for unlawful detainer. The action for unlawful detainer is based on the expiration of the lease, no notice is required; notice is needed only when the action is due to the lessee’s failure to pay rent or to comply with the conditions of the lease.

In case several demands to vacate are made, the period is reckoned from the date of the last demand.

Estate of Soledad Manantan v. Somera, G.R. No. 145867

Unlawful detainer is a summary action for the recovery of possession of real property. In unlawful detainer cases, the possession of the defendant was originally legal, as his possession was permitted by the plaintiff on account of an express or implied contract between them. However, defendant’s possession became illegal when the plaintiff demanded that defendant vacate the subject property due to the expiration or termination of the right to possess under their contract, and defendant refused to heed such demand.

- This action may be filed by a lessor, vendor, vendee, or other person against


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whom the possession of any land or building is unlawfully withheld.- If the action was filed beyond the prescribed one year period (from last

demand), then it cannot properly qualify as an action for unlawful detainer; it may be an accion publiciana or accion reivindicatoria.

Valdez Jr. v. Court of Appeals, G.R. No. 132424

Three Kinds of Actions Available to Recover Possession of Real Property:(a) accion interdictal(b) accion publiciana(c) accion reivindicatoria

Accion interdictal comprises two distinct causes of action(1) forcible entry (detentacion)(2) unlawful detainer (desahuico)

Forcible Entry Unlawful DetainerNature of Possession by the Defendant/ Nature of

Entry(determines the cause of

action)

Illegal from the beginning(FISTS – force,

intimidation, stealth, threat, or strategy)

Originally legal but became illegal due to

expiration or termination of the right to possess.

Nature of the Action Summary SummaryJurisdiction Over the

ActionMunicipal Trial Court or Metropolitan Trial Court

Municipal Trial Court or Metropolitan Trial Court

Prescriptive PeriodWithin 1 year from the date of actual entry on

the land

Within 1 year from the date of last demand

Issue

The right to physical possession

(which party has prior de facto possession)

The right to physical possession

Accion Publiciana is the plenary action to recover the right of possession, which should be brought in the proper Regional Trial Court when dispossession has lasted for more than one year. It is an ordinary civil proceeding to determine the better right of possession of realty independently of title.

Accion Reivindicatoria is an action to recover ownership also brought in the proper Regional Trial Court in an ordinary civil proceeding.

Carlos v. Republic, G.R. No. 164823

Possession is broader than occupation because it includes constructive possession. When the law adds the word occupation, it seeks to delimit the all-encompassing


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effect of constructive possession.

Actual Possession of a land consists in the manifestation of acts of dominion over it of such a nature, as a party would naturally exercise over his own property.

Possession may be had in one of two ways:Possessor in the concept of an owner

Possessor as a mere holder

may be the owner himselfor

one who claims to be so

acknowledges in another a superior right which he believes to be

ownership, whether his belief be right or wrong

Heirs of Marcelo Cabal v. Cabal, G.R. No. 153625

Good faith is always presumed, and upon him who alleges bad faith on the part of the possessor rests the burden of proof.

Good Faith is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage. It implies honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry.The essence of good faith lies in an honest belief in the validity of one’s right, ignorance of a superior claim, and absence of intention to overreach another.

Applied to possession, one is considered in good faith if he is not aware that there exists in his title or mode of acquisition any flaw which invalidates it.

Dizon v. Rodriguez, 13 SCRA 704

The possessor who is not aware of any flaw in his title which invalidates it is considered a possessor in good faith and his possession does not lose this character except in the case and from the moment his Torrens Title is declared null and void by final judgment of the Courts (facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongfully/contrary is proved)

Development Bank of the Philippines v. Court of Appeals, G.R. No. 111737

A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw, which invalidates it. Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. A mistake upon a doubtful or difficult question of law may properly be the basis of good faith.


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The possessor is entitled to keep the fruits during the period for which it held the property in good faith.

Villarico v. Sarmiento, G.R. No. 136438

Property of public dominion is outside the commerce of man. One cannot claim any right of possession over it. Art. 530 – Only things and rights which are susceptible of being appropriated may be the object of possession.

Asset Privatization Trust v. T. J. Enterprises, G.R. No. 167195

A person who does not have actual possession of the thing sold cannot transfer constructive possession by the execution and delivery of a public instrument.

Escritor, Jr. v. Intermediate Appellate Court, No. L-71283

A possessor in bad faith is one in possession of property knowing that his title thereto is defective. Possession in bad faith should not prejudice successors-in-interest. The rule is that only personal knowledge of the flaw in one’s title or mode of acquisition can make him a possessor in bad faith, for bad faith is not transmissible from one person to another, not even to an heir. Art. 534 - One who succeeds by hereditary title shall not suffer the consequences of the wrongful possession of the decedent. Bad faith is personal and intransmissible. Its effects must be suffered only by the person who acted in bad faith.

Good faith is always presumed; if no evidence is presented proving bad faith, the presumption of good faith remains.

Florentino v. Supervalue, Inc., G.R. No. 172384

Lessees are not possessors or builders in good faith. Art. 448 in relation to Art. 546, which allows full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e. one who builds on land with the belief that he is the owner thereof. It does not apply where one’s only interest is that of a lessee under a rental contract; otherwise, it would always be in the power of the tenant to “improve” his landlord out of his property.

Cosio and de Rama v. Palileo, No. L-18452

It is presumed that possession is enjoyed in the same character in which it was acquired until the contrary is proved. Bad faith starts from the time one becomes aware of the flaw in his title (like; date when the decision of a court became final). A possessor in bad faith is liable for rent during all the time he deprived the owner of


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the use of the property. Liability for rent must be deemed to begin at such time he became aware of the flaw in his title.

A Mortgagee in Possession is one “who has lawfully acquired actual or constructive possession of the premises mortgaged to him, standing upon his rights as mortgagee and not claiming another title, for the purpose of securing his security upon such property or making its income help to pay his debt.” A simple mortgage does not give the mortgagee the right to the possession of the mortgaged property.

Edu v. Gomez, No. L-33397

The acquirer or purchaser in good faith of a chattel of movable property is entitled to be respected in his possession as if he were the true owner thereof until a competent court rules otherwise. As the true owner, the possessor in good faith cannot be compelled to surrender possession nor to be required to institute an action for recovery of the chattel, whether or not an indemnity bond is issued in his favor.

PropertyUsufructuary Right

Case Doctrines

National Housing Authority vs. Court of Appeals, G.R. No. 148830

A usufruct may be constituted for a specified term and under such conditions as the parties may deem convenient subject to the legal provisions on usufruct. A usufructuary may lease the object held in usufruct. The owner of the property must respect the lease entered into by the usufructuary so long as the usufruct exists.

A usufruct is not simply about rights and privileges. A usufructuary has the duty to protect the owner’s interests. One such duty is found in Article 601 of the Civil Code, which states: ART. 601. The usufructuary shall be obliged to notify the owner of any act of a third person, of which he may have knowledge, that may be prejudicial to the rights of ownership, and he shall be liable should he not do so, for damages, as if they had been caused through his own fault. 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.

The law clearly limits any usufruct constituted in favor of a corporation or association to 50 years. A usufruct is meant only as a lifetime grant. Unlike a natural person, a corporation or association’s lifetime may be extended indefinitely. The usufruct would then be perpetual. This is especially invidious in cases where the usufruct given to a corporation or association covers public land.

Facts:On 24 October 1968, Proclamation No. 481 issued by then President Ferdinand


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Marcos set aside a 120-hectare portion of land in Quezon City owned by the NHA as reserved property for the site of the National Government Center (“NGC”). On 19 September 1977, President Marcos issued Proclamation No. 1670, which removed a 7-hectare portion from the coverage of the NGC. Proclamation No. 1670 gave MSBF usufructuary rights over this segregated portion. Over the years, MSBF’s occupancy exceeded the 7-hectare area subject to its usufructuary rights. By 1987, MSBF occupied approximately 16 hectares. MSBF leased a portion of the area it occupied to BGC and other stallholders.

On 11 November 1987, President Corazon Aquino issued Memorandum Order No. 127 (“MO 127”) which revoked the reserved status of “the 50 hectares, more or less, remaining out of the 120 hectares of the NHA property reserved as site of the National Government Center.” MO 127 also authorized the NHA to commercialize the area and to sell it to the public. 15 August 1988, acting on the power granted under MO 127, the NHA gave BGC ten days to vacate its occupied area.

The trial court dismissed the complaint for injunction filed by BGC against the NHA (1994). BGC wanted to enjoin the NHA from demolishing BGC’s facilities on a lot leased from MSBF. MSBF allegedly has usufructuary rights over the lot leased to BGC. The CA reversed this, NHA appealed.

Issue:Exact location of the seven-hectare area granted by Proclamation No. 1670 to MSBF.To determine implication on usufructuary rights of MSBF affecting BGC.

Held:ART. 565. The rights and obligations of the usufructuary shall be those provided in the title constituting the usufruct; in default of such title, or in case it is deficient, the provisions contained in the two following Chapters shall be observed.

Proclamation No. 1670 is the title constituting the usufruct. Proclamation No. 1670 categorically states that the seven-hectare area shall be determined “by future survey under the administration of the Foundation subject to private rights if there be any.” Proclamation No. 1670 left it to MSBF to choose the location of the seven-hectare area under its usufruct.

A usufruct is not simply about rights and privileges. A usufructuary has the duty to protect the owner’s interests. One such duty is found in Article 601 of the Civil Code which states:ART. 601. The usufructuary shall be obliged to notify the owner of any act of a third person, of which he may have knowledge, that may be prejudicial to the rights of ownership, and he shall be liable should he not do so, for damages, as if they had been caused through his own fault.

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.

ART. 605. Usufruct cannot be constituted in favor of a town, corporation, or


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association for more than fifty years. If it has been constituted, and before the expiration of such period the town is abandoned, or the corporation or association is dissolved, the usufruct shall be extinguished by reason thereof.

The law clearly limits any usufruct constituted in favor of a corporation or association to 50 years. A usufruct is meant only as a lifetime grant. Unlike a natural person, a corporation or association’s lifetime may be extended indefinitely. The usufruct would then be perpetual. This is especially invidious in cases where the usufruct given to a corporation or association covers public land.

*Note: In a usufruct, only the jus utendi and jus fruendi over the property is transferred to the usufructuary—the owner of the property maintains the jus disponendi or the power to alienate, encumber, transform, and even destroy the same.

Bachrach vs. Seifert and Elianoff, No. L2659

Article 471 of the Civil Code provides that the usufructuary shall be entitled to receive all the natural, industrial, and civil fruits of the property in usufruct. The stock dividend in question in this case is a civil fruit of the original investment. The shares of stock issued in payment of said dividend may be sold independently of the original shares, just as the offspring of a domestic animal may be sold independently of its mother.

Facts:The deceased E. M. Bachrach, who left no forced heir except his widow Mary McDonald Bachrach, in his last will and testament:

"Sixth: It is my will and do herewith bequeath and devise to my beloved wife Mary McDonald Bachrach for life all the fruits and usufruct of the remainder of all my estate after payment of the legacies, bequests, and gifts provided for above; and she may enjoy said usufruct and use or spend such fruits as she may in any manner wish."

The will further provided that upon the death of Mary McDonald Bachrach, onehalf of all his estate "shall be divided share and share alike by and between my legal heirs, to the exclusion of my brothers."

The estate of E. M. Bachrach, as owner of 108,000 shares of stock of the Atok Big Wedge Mining Co., Inc., received from the latter 54,000 shares representing 50 per cent stock dividend on the said 108,000 shares. On June 10, 1948, Mary McDonald Bachrach, as usufructuary or life tenant of the estate, petitioned the lower court to authorize the Peoples Bank and Trust Company, as administrator of the estate of E. M. Bachrach, to transfer to her the said 54,000 shares of stock dividend by indorsing and delivering to her the corresponding certificate of stock, claiming that said dividend, although paid out in the form of stock, is fruit or income and therefore belonged to her as usufructuary or life tenant. Sophie Siefert and Elisa Elianoff, legal heirs of the deceased, opposed said petition on the ground that the stock dividend in question was not income but formed part of the capital and


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therefore belonged not to the usufructuary but to the remainderman.

Massachusetts rule – It regards cash dividends, however large, as income, and stock dividends, however made, as capital. It holds that a stock dividend is not in any true sense any dividend at all since it involves no division or severance from the corporate assets of the subject of the dividend; that it does not distribute property but simply dilutes the shares as they existed before; and that it takes nothing from the property of the corporation, and adds nothing to the interests of the shareholders.

Pennsylvania rule – declares that all earnings of the corporation made prior to the death of the testator stockholder belong to the corpus of the estate, and that all earnings, when declared as dividends in whatever form, made during the lifetime of the usufructuary or life tenant are income and belong to the usufructuary or life tenant.

Issue:Is a stock dividend fruit or income, which belongs to the usufructuary, or is it capital or part of the corpus of the estate, which pertains to the remainderman?

Held:We think the Pennsylvania rule is more in accord with our statutory laws than the Massachusetts rule. Under section 16 of our Corporation Law, no corporation may make or declare any dividend except from the surplus profits arising from its business. Any dividend, therefore, whether cash or stock, represents surplus profits. Article 471 of the Civil Code provides that the usufructuary shall be entitled to receive all the natural, industrial, and civil fruits of the property in usufruct.ART. 566. The usufructuary shall be entitled to all the natural industrial and civil fruits of the property in usufruct. With respect to hidden treasure which may be found on the land or tenement, he shall be considered a stranger. (471)

And articles 474 and 475 provide as follows:ART. 569. Civil fruits are deemed to accrue day by day, and belong to the usufructuary in proportion to the time the usufruct may last. (474)

ART. 570. When a usufruct is created on the right to receive an income or periodical revenue, either in money or fruits, or the interest on bonds or securities payable to bearer, each matured payment shall be considered as the proceeds or fruits of such right.

When it consists of the enjoyment of the benefits arising from an interest in an industrial or commercial enterprise, the profits of which are not distributed at fixed periods, such profits shall have the same consideration.

In either case they shall be distributed as civil fruits, and shall be applied in accordance with the rules prescribed by the next preceding article. (475)

The 108,000 shares of stock are part of the property in usufruct. The 54,000 shares of stock dividend are civil fruits of the original investment. They represent profits and the delivery of the certificate of stock covering' said dividend is equivalent to


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the payment of said profits. Said shares may be sold independently of the original shares just as the offspring of a domestic animal may be sold independently of its mother.


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Property - RIght of Possession - Case Doctrines

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