BALURAN V.

NAVARRO - USUFRUCT
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:
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.


Baluran vs. Navarro
Second barterer (D) vs. Heir
of first barterer (P)
GR L-44428
[T]


Summary: Two property owners agreed to "barter" their respective properties with each other. The agreement was covered by a contract with a condition that
requires the return of the property if any of the children of the other party's daughter decided to use it. On inheriting the property from his mother, the son of the
other party's daughter filed for recovery of the "exchanged" property.

Rule of Law: To determine the nature of a contract, the courts are not bound by the name or title given to it by the contracting parties.

Facts: Spouses Domingo and Fidela Paraiso owned of a residential lot which they bartered with spouses Avelino and Benilda Baluran (D) for their unirrigated
riceland. The agreement was covered by a document entitled "BARTER" wherein they agreed to "barter and exchange" their properties subject to a condition that
stated that if any of the children of spouses Paraiso's daughter shall choose to reside in the municipality and build his/her own house in the residential lot, spouses
Baluran (D) shall be obliged to return the lot to such children.

Eleven years thereafter, Antonio Obendencio (P) filed a case to recover the bartered property from Baluran (D). In his answer, Baluran (D) alleged that the "barter
agreement" transferred to him the ownership of the residential lot in exchange for the unirrigated riceland.

Issues: Was there transfer of ownership of the properties covered in the "barter agreement"?

Ruling: No. It is a settled rule that to determine the nature of a contract courts are not bound by the name or title given to it by the contracting parties. (Shell Co.
of the Philippines vs. Firemen's Insurance Co., 100 Phil. 757, 1957.) This Court has held that contracts are not what the parties may see fit to call them but what
they really are as determined by the principles of law. (Borromeo vs. Court of Appeals, 47 SCRA 65, 1972.)

Thus, the use of the term "barter" in describing the agreement is not controlling. The agreement is clear that there was no intention on the part of the signatories
thereto to convey the ownership of their respective properties; all that was intended, and it was so provided in the agreement, was to transfer the material
possession thereof. It is also clear that the parties retained the right to alienate their respective properties, which right is an element of ownership.

All that the parties acquired was the right of usufruct which in essence is the right to enjoy the property of another.
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.
Article 562, Civil Code

Under the agreement, spouses Paraiso would harvest the crop of the unirrigated riceland while Baluran (D) could build a house on the residential lot, subject to the
condition that if any of the children of spouses Paraiso's daughter shall choose to reside in the municipality and build his house on the residential lot, Baluran (D)
shall be obliged to return the lot to said children "with damages to be incurred." Thus, the mutual agreement of each party enjoying "material possession" of the
other's property was subject to a resolutory condition the happening of which would terminate the right of possession and use.

A resolutory condition is one which extinguishes rights and obligations already existing. (Tolentino, Commentaries on the Civil Code of the Philippines, Vol. IV, pp.
140, 143.) The right of "material possession" granted in the agreement ends if and when any of the children of spouses Paraiso's daughter would reside in the
municipality and build his house on the property. Inasmuch as the condition opposed is not dependent solely on the will of one of the parties to the contract, but is
dependent on the will of third persons, the same is valid.

BUOT vs. Court of Appeals
G.R. No. 119679 May 18, 2001
Facts:
Encarnacion Diaz vda. De Reston is the original owner of the land in question, found at Tulay, Minglanilla, Cebu.
On December 6, 1974, Encarnacion allegedly sold to the Buot spouses the eastern part of the parcel of land for an amount of P18K. The MOA states
that P1K shall be pain in earnest as downpayment, and the remaining amount to shall be delivered by the Buot spouses when Encarnacion shall
notify them that the title shall be ready for the transfer of their names. It was also agreed that title to, ownership, possession and enjoyment of the
portion sold shall remain with the vendor until the full consideration of the sale shall have been received by her and acknowledged in a document
duly executed for said purpose.
Thereafter, Encarnacion mortgaged the whole parcel of land to the del Rosario spouses. As mortgagee, he was given the power to buy the property.
After three months, he bought it for P100K, P20k as the downpayment. The del Rosario spouses filed for a free patent of the land and was
consequently approved.
The Buot spouses are now seeking for the reconveyance of the land, as they were the rightful owners. The del Rosario spouses contend that they
bought the said property in good faith. Encarnacion, deceased, is now represented by her heirs.
The Buot spouses contend that the sale was perfected from the moment the parties agreed on the object of the contract and the price. They also
contend that the del Rosario spouses defrauded them.
Issue:
1. WON the Memorandum of Agreement the Buot spouses entered into with Encarnacion is a contract of sale? NO
2. WON the Buot spouses are entitled to recover the property in question? NO
3. WON the Buot spouses may recover the partial payments they made to Encarnacion? YES
Held:
1.
THERE WAS NO ACTUAL SALE UNTIL FULL PAYMENT was made by the vendees, and that on the part of the vendees, no full payment would be made
until a certificate of title was ready for transfer in their names.
The MOA is neither a contract of sale nor an option to purchase, but it is a contract to sell. An option is a contract granting a privilege to buy or sell
at a determined price within an agreed time, the specific length or duration of which is not present in the Memorandum of Agreement. In a contract
to sell, the title over the subject property is transferred to the vendee only upon the full payment of the stipulated consideration. Unlike in a
contract of sale, the title in a contract to sell does not pass to the vendee upon the execution of the agreement or the Delivery of the thing sold.
Encarnacion clearly reserved to herself ownership and possession of the property until full payment of the purchase price by the vendees, such
payment being a positive suspensive condition, the failure of which is not considered a breach, casual or serious, but simply an event which
prevented the obligation from acquiring obligatory force.
2.
Petitioners clearly had no right to ask for reconveyance of the property on the ground of fraud as there was no perfected contract of sale between
them and Encarnacion.
Only the person who has been deprived of his property through fraud, either actual or constructive and who was not at fault may file a personal
action for reconveyance. The pretension that there was fraud when Mariano was able to obtain a Free Patent Title, is not supported by evidence. On
the contrary, fraud cannot be presumed and must be established by clear and sufficient evidence.
3.
Even if the Buot spouses did not mistakenly make partial payments, inasmuch as the suspensive condition was not fulfilled, it is only fair and just
that the Buot spouses be allowed to recover what they had paid in expectancy that the condition would happen; otherwise, there would be unjust
enrichment on the part of Encarnacion.