1|Article 562 Article 612 USUFRUCT
MTCC rendered judgment for the Mercedes.
ARTICLE 562
G.R. No. 152809 August 3, 2006
MERCEDES MORALIDAD, Petitioner,
vs.
SPS. DIOSDADO PERNES and ARLENE
PERNES, Respondents.
Note: ISSUE IN RELATION TO ARTICLE 562 ONLY
FACTS:
Mercedes Moralidad acquired TCT T-123125 for the
purpose of letting her niece Arlene and her family
move from Mandug to Davao City. Later she
wanted the property to be also available to any of
her kins wishing to live and settle in Davao City.
Mercedes made known this intention in a
document she executed on July 21, 1986. The
document reads:
I, MERCEDES MORALIDAD, now residing in
Pennsylvania, U.S.A., wish to convey my honest
intention regarding my properties situated at Palm
Village, Bajada, Davao City . . . and hereby
declare:
1. That it is my desire that Mr. and Mrs. Diosdado
M. Pernes may build their house therein and stay as
long as they like;
2. That anybody of my kins who wishes to stay on
the aforementioned real property should maintain
an atmosphere of cooperation, live in harmony and
must avoid bickering with one another;
3. That anyone of my kins may enjoy the privilege
to stay therein and may avail the use thereof.
Provided, however, that the same is not inimical to
the purpose thereof;
4. That anyone of my kins who cannot conform
with the wishes of the undersigned may exercise
the freedom to look for his own;
5. That any proceeds or income derived from the
aforementioned properties shall be allotted to my
nearest kins who have less in life in greater
percentage and lesser percentage to those who
are better of in standing.
Following her retirement in 1993, Mercedes
came back to the Philippines to stay with Arlene
and Diosdado on the house they build on the
subject property. In the course of time, their
relations turned sour because members of the
Pernes family were impervious to her suggestions
and attempts to change certain practices
concerning matters of health and sanitation within
their compound. Relations having deteriorated
from worse to worst, Mercedes filed with the MTC
an unlawful detainer suit against the Pernes
spouses.
RTC ruled that what governed the parties'
relationship are Art. 448 and 546. On appeal, the
CA, while conceding the applicability of Art. 448
and 546, ruled that it is still premature to apply the
same considering that the issue of whether Perness'
right to possess a portion of Mercedes' land had
already expired was not yet resolved. To the CA,
the unlawful detainer suit presupposes the cessation
of Perness' right to possess. The CA further ruled that
what governs the rights of the parties is the law on
usufruct but Mercedes failed to establish that
Perness' right to possess had already ceased.
ISSUE:
WHAT IS THE RELATIONSHIP BETWEEN MERCEDES
AND PERNESS?
HELD:
What was constituted between the parties is
one of usufruct over a piece of land, with the
Mercedes being the owner of the property upon
whom the naked title thereto remained and
Perness being two (2) among other unnamed
usufructuaries who were simply referred to as
Mercedes's kin.
Usufruct is defined under Article 562 of the Civil
Code.
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.
It is undisputed that Mercedes, in a document
dated July 21, 1986, supra, made known her
intention to give Perness and her other kins the right
to use and to enjoy the fruits of her property. There
can also be no quibbling about the Perness being
given the right "to build their own house" on the
property and to stay thereat "as long as they like."
Paragraph #5 of the same document earmarks
"proceeds or income derived from the
aforementioned properties" for the Mercedes's
"nearest kins who have less in life in greater
percentage and lesser percentage to those who
are better in standing."
The established facts undoubtedly gave
Perness not only the right to use the property but
also granted them, among the Mercedes's other
kins, the right to enjoy the fruits thereof. We have no
quarrel, therefore, with the CA's ruling that usufruct
was constituted between Mercedes and Perness. It
is thus pointless to discuss why there was no lease
contract between the parties.
2|Article 562 Article 612 USUFRUCT
ARTICLE 565
1. G.R. No. 148830. April 13, 2005
NATIONAL HOUSING AUTHORITY, Petitioners, after the expiration of the ten-day period will be
vs.
COURT OF APPEALS, BULACAN GARDEN
CORPORATION and MANILA SEEDLING BANK
FOUNDATION, INC., Respondents.
FACTS:
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.
On 15 August 1988, acting on the power granted
under MO 127, the NHA gave BGC ten days to
vacate its occupied area. Any structure left behind
demolished by NHA.
BGC then filed a complaint for injunction on 21 April
1988 before the trial court. On 26 May 1988, BGC
amended its complaint to include MSBF as its co-
plaintiff.

On 24 October 1968, Proclamation No. 481 issued
by then President Ferdinand Marcos set aside a
120-hectare portion of land in Quezon City owned
by the NHA4 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 seven-
hectare portion from the coverage of the NGC.
Proclamation No. 1670 gave MSBF usufructuary
rights over this segregated portion, as follows:
Pursuant to the powers vested in me by the
Constitution and the laws of the Philippines, I,
FERDINAND E. MARCOS, President of the Republic
of the Philippines, do hereby exclude from the
operation of Proclamation No. 481, dated October
24, 1968, which established the National
Government Center Site, certain parcels of land
embraced therein and reserving the same for the
Manila Seedling Bank Foundation, Inc., for use in its
operation and projects, subject to private rights if
any there be, and to future survey, under the
administration of the Foundation.
This parcel of land, which shall embrace 7
hectares, shall be determined by the future survey
based on the technical descriptions found in
Proclamation No. 481, and most particularly on the
original survey of the area, dated July 1910 to June
1911, and on the subdivision survey dated April 19-
25, 1968. (Emphasis added)
Trial court- Proclamation No. 1670 gave MSBF the
right to conduct the survey, which would establish
the seven-hectare area covered by MSBFs
usufructuary rights. However, the trial court held
that MSBF failed to act seasonably on this right to
conduct the survey. The trial court ruled that the
previous surveys conducted by MSBF covered 16
hectares, and were thus inappropriate to
determine the seven-hectare area. The trial court
concluded that to allow MSBF to determine the
seven-hectare area now would be grossly unfair to
the grantor of the usufruct.
On 8 March 1994, the trial court dismissed BGCs
complaint for injunction.
The NHA demolished BGCs facilities soon
thereafter.
CA- MSBF did in fact assert this right by conducting
two surveys and erecting its main structures in the
area of its choice.
On 30 March 2001, the appellate court reversed the
trial courts ruling.
ISSUE:
WHETHER THE PREMISES LEASED BY BGC FROM MSBF
IS WITHIN THE SEVEN-HECTARE AREA THAT
PROCLAMATION NO. 1670 GRANTED TO MSBF BY
WAY OF USUFRUCT.

MSBF occupied the area granted by Proclamation RULING:

No. 1670. Over the years, MSBFs occupancy
exceeded the seven-hectare area subject to its
usufructuary rights. By 1987, MSBF occupied
approximately 16 hectares. By then the land
occupied by MSBF was bounded by Epifanio de los
Santos Avenue ("EDSA") to the west, Agham Road
to the east, Quezon Avenue to the south and a
creek to the north.
On 18 August 1987, MSBF leased a portion of the
area it occupied to BGC and other stallholders.
BGC leased the portion facing EDSA, which
occupies 4,590 square meters of the 16-hectare
area.
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.9 A usufructuary may lease the object held
in usufruct.10 Thus, the NHA may not evict BGC if the
4,590 square meter portion MSBF leased to BGC is
within the seven-hectare area held in usufruct by
MSBF. The owner of the property must respect the
lease entered into by the usufructuary so long as
the usufruct exists.11 However, the NHA has the right
to evict BGC if BGC occupied a portion outside of
the seven-hectare area covered by MSBFs
usufructuary rights.

Article 565 of the Civil Code states:

3|Article 562 Article 612 USUFRUCT
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 not simply about rights and privileges. A
case it is deficient, the provisions contained in the
two following Chapters shall be observed.
In the present case, 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." The appellate court and the
trial court agree that MSBF has the latitude to
determine the location of its seven-hectare usufruct
portion within the 16-hectare area. The appellate
court and the trial court disagree, however,
whether MSBF seasonably exercised this right.
It is clear that MSBF conducted at least two surveys.
Although both surveys covered a total of 16
hectares, the second survey specifically indicated
a seven-hectare area shaded in yellow. MSBF
made the first survey in 1984 and the second in
1986, way before the present controversy started.
MSBF conducted the two surveys before the lease
to BGC. The trial court ruled that MSBF did not act
seasonably in exercising its right to conduct the
survey. Confronted with evidence that MSBF did in
fact conduct two surveys, the trial court dismissed
the two surveys as self-serving. This is clearly an error enforcing MSBFs rights within the seven-hectare
on the part of the trial court. Proclamation No. 1670
authorized MSBF to determine the location of the
seven-hectare area. This authority, coupled with the
fact that Proclamation No. 1670 did not state the
location of the seven-hectare area, leaves no room
for doubt that Proclamation No. 1670 left it to MSBF
to choose the location of the seven-hectare area
under its usufruct.
More evidence supports MSBFs stand on the
location of the seven-hectare area. The main
structures of MSBF are found in the area indicated
by MSBFs survey. These structures are the main
office, the three green houses, the warehouse and
the composting area. On the other hand, the NHAs
delineation of the seven-hectare area would cover
only the four hardening bays and the display area.
It is easy to distinguish between these two groups of
structures. The first group covers buildings and
facilities that MSBF needs for its operations. MSBF
built these structures before the present controversy
started. The second group covers facilities less
essential to MSBFs existence. This distinction is
decisive as to which survey should prevail. It is clear
that the MSBF intended to use the yellow-shaded
area primarily because it erected its main structures
there.
Inobaya testified that his main consideration in
using Agham Road as the starting point for his
survey was the presence of a gate there. The
location of the gate is not a sufficient basis to
determine the starting point. MSBFs right as a
usufructuary as granted by Proclamation No. 1670
should rest on something more substantial than
where MSBF chose to place a gate.
On the other hand, this Court cannot countenance
MSBFs act of exceeding the seven-hectare portion
granted to it by Proclamation No. 1670. A usufruct is
usufructuary has the duty to protect the owners
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.22 This controversy would not
have arisen had MSBF respected the limit of the
beneficial use given to it. MSBFs encroachment of
its benefactors property gave birth to the
confusion that attended this case. To put this matter
entirely to rest, it is not enough to remind the NHA to
respect MSBFs choice of the location of its seven-
hectare area. MSBF, for its part, must vacate the
area that is not part of its usufruct. MSBFs rights
begin and end within the seven-hectare portion of
its usufruct. This Court agrees with the trial court that
MSBF has abused the privilege given it under
Proclamation No. 1670. The direct corollary of
area is the negation of any of MSBFs acts beyond
it.
2. G.R. No. 158182 June 12, 2008
SESINANDO MERIDA, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
FACTS:
Petitioner was charged in the Regional Trial Court of
Romblon, Romblon, Branch 81 (trial court) with
violation of Section 68 of PD 705, as amended, for
"cut[ting], gather[ing], collect[ing] and remov[ing]"
a lone narra tree inside a private land in Mayod,
Ipil, Magdiwang, Romblon (Mayod Property) over
which private complainant Oscar M. Tansiongco
(Tansiongco) claims ownership.
The prosecution evidence showed that on 23
December 1998, Tansiongco learned that petitioner
cut a narra tree in the Mayod Property. Tansiongco
reported the matter to Florencio Royo (Royo),
the punong barangay of Ipil. On 24 December
1998, Royo summoned petitioner to a meeting with
Tansiongco. When confronted during the meeting
about the felled narra tree, petitioner admitted
cutting the tree but claimed that he did so with the
permission of one Vicar Calix (Calix) who,
according to petitioner, bought the Mayod
Property from Tansiongco in October 1987 under
a pacto de retro sale. Petitioner showed to Royo
Calix's written authorization signed by Calix's wife.
On 11 January 1999, Tansiongco reported the tree-
cutting to the Department of Environment and
Natural Resources (DENR) forester Thelmo S.
4|Article 562 Article 612 USUFRUC
Hernandez (Hernandez) in Sibuyan, Romblon. When
Hernandez confronted petitioner about the felled
tree, petitioner reiterated his earlier claim to Royo
that he cut the tree with Calix's permission.
Hernandez ordered petitioner not to convert the
felled tree trunk into lumber.
On 26 January 1999, Tansiongco informed
Hernandez that petitioner had converted the narra
trunk into lumber. Hernandez, with other DENR
employees and enforcement officers, went to the
Mayod Property and saw that the narra tree had
been cut into six smaller pieces of lumber.
Hernandez took custody of the lumber, deposited
them for safekeeping with Royo, and issued an
apprehension receipt to petitioner. A larger portion
of the felled tree remained at the Mayod Property.
The DENR subsequently conducted an investigation
on the matter.
Tansiongco filed a complaint with the Office of the
Provincial Prosecutor of Romblon (Provincial
Prosecutor) charging petitioner with violation of
Section 68 of PD 705, as amended.
Rtc- guilty
Ca- affirmed
ISSUE: WHETHER PETITIONER IS LIABLE FOR VIOLATION
OF SECTION 68 OF PD 705, AS AMENDED. - YES
RULING:
Section 68 penalizes three categories of acts: (1)
the cutting, gathering, collecting, or removing of
timber or other forest products from any forest land
without any authority; (2) the cutting, gathering,
collecting, or removing of timber from alienable or
disposable public land, or from private land without
any authority; and (3) the possession of timber or
other forest products without the legal documents
as required under existing forest laws and
regulations. Petitioner stands charged of having
"cut, gathered, collected and removed timber or
other forest products from a private land without x x
x the necessary permit x x x " thus his liablity, if ever,
should be limited only for "cut[ting], gather[ing],
collect[ing] and remov[ing] timber," under the
second category. Further, the prosecution
evidence showed that petitioner did not perform
any acts of "gathering, collecting, or removing" but
only the act of "cutting" a lone narra tree. Hence,
this case hinges on the question of whether
petitioner "cut x x xtimber" in the Mayod Property
without a DENR permit.
We further hold that the lone narre tree petitioner
cut from the Mayod Property constitutes "timber"
under Section 68 of PD 705, as amended. PD 705
does not define "timber," only "forest product"
(which circuitously includes "timber.") Does the
narra tree in question constitute "timber" under
Section 68? The closest this Court came to defining
the term "timber" in Section 68 was to provide that
"timber," includes "lumber" or "processed log." In
other jurisdictions, timber is determined by
compliance with specified dimensions or certain
"stand age" or "rotation age." In Mustang Lumber,
T
Inc. v. Court of Appeals, this Court was faced with a
similar task of having to define a term in Section 68
of PD 705 - "lumber" - to determine whether
possession of lumber is punishable under that
provision. In ruling in the affirmative, we held that
"lumber" should be taken in its ordinary or common
usage meaning to refer to "processed log or
timber,".
3. G.R. No. 152195 January 31, 2005
PEDRO SEPULVEDA, SR., substituted by SOCORRO S.
LAWAS, Administratrix of His Estate, petitioner,
vs.
ATTY. PACIFICO S. PELAEZ, respondent.
FACTS:
On December 6, 1972, Atty. Pacifico Pelaez filed a
complaint against his granduncle, Pedro
Sepulveda, Sr., for the recovery of possession and
ownership of his one-half (1/2) undivided share of
several parcels of land covered by Tax Declaration
(T.D.) Nos. 28199, 18197, 18193 and 28316; his
undivided one-third (1/3) share in several other lots
covered by T.D. Nos. 28304, 35090, 18228, 28310,
26308, 28714, 28311, 28312 and 28299 (all located in
Danao, Cebu); and for the partition thereof among
the co-owners. The case was docketed as Civil
Case No. SF-175.
The eleven lots were among the twenty-five (25)
parcels of land which the private respondents
mother, Dulce Sepulveda, inherited from her
grandmother, Dionisia Sepulveda under the Project
of Partition dated April 16, 1937 submitted by Pedro
Sepulveda, Sr. as the administrator of the formers
estate, duly approved by the then CFI of Cebu in
Special Proceeding No. 778-0.
Under the said deed, Pedro Sepulveda, Sr.
appeared to be the owner of an undivided portion
of Lot No. 28199, while his brother and Dulces uncle
Santiago Sepulveda, was the undivided owner of
one-half (1/2) of the parcels of land covered by T.D.
Nos. 18197, 18193 and 28316. Dulce and her uncles,
Pedro and Santiago, were likewise indicated
therein as the co-owners of the eleven other
parcels of land, each with an undivided one-third
(1/3) share thereof.
Atty. Pelaez alleged that his mother Dulce died
intestate on March 2, 1944, and aside from himself,
was survived by her husband Rodolfo Pelaez and
her mother Carlota Sepulveda. Dulces grandfather
Vicente Sepulveda died intestate on October 25,
1920, and Dulce was then only about four years old.
According to the private respondent, his
grandmother Carlota repeatedly demanded the
delivery of her mothers share in the eleven (11)
parcels of land, but Pedro Sepulveda, Sr. who by
then was the Municipal Mayor of Tudela, refused to
do so. Dulce, likewise, later demanded the delivery
of her share in the eleven parcels of land, but Pedro
Sepulveda, Sr. still refused, claiming that he needed
to continue to possess the property to reap the
produce therefrom which he used for the payment
of the realty taxes on the subject properties. The
private respondent alleged that he himself
5|Article 562 Article 612 USUFRUCT
demanded the delivery of his mothers share in the ISSUE:
subject properties on so many occasions, the last of
which was in 1972, to no avail.
The private respondent further narrated that his
granduncle executed an affidavit on November 28,
1961, stating that he was the sole heir of Dionisia other heirs as parties-plaintiffs constituted a legal
when she died intestate on June 5, 1921, when, in
fact, the latter was survived by her three sons,
Santiago, Pedro and Vicente. Pedro Sepulveda, Sr.
also executed a Deed of Absolute Sale5 on July 24,
1968 over the property covered by T.D. No. 19804
(T.D. No. 35090) in favor of the City of Danao for
7,492.00. According to the private respondent, his
granduncle received this amount without his
(private respondents) knowledge. Articles 471 to 490 of the old Civil Code.18
In his answer to the complaint, Pedro Sepulveda, Sr.
admitted having executed a deed of sale over the
parcel of land covered by T.D. No. 19804 in favor of
Danao City, but averred that the latter failed to pay
the purchase price thereof; besides, the private
respondent had no right to share in the proceeds of
the said sale. He likewise denied having received
any demand for the delivery of Dulces share of the
subject properties from the latters mother Carlota,
or from the private respondent.
During the trial, Pedro Sepulveda, Sr. died intestate.
His daughter, petitioner Socorro Sepulveda Lawas,
was appointed administratrix of his estate in July
1976.
To prove the delivery of Dulces share under the
project of partition, the petitioner presented the
Affidavit of Consolidation she executed in October
1940 covering thirteen (13) of the twenty-five (25)
parcels of land which were deeded to her under
the Project of Partition,8 as well as the Order9 dated
March 24, 1962 of the then CFI in Special
Proceeding No. 778-R, denying Carlotas motion for
the reconstitution of the records of the said case,
and for the delivery of Dulces share in the eleven
parcels of land. The court likewise declared therein
that Dulce, through her grandchildren and her
mother, Carlota, had already received her share of
the estate from Pedro Sepulveda, Sr. as early as
January 10, 1938.
According to the petitioner, Dulce and Pedro
Sepulveda, Sr. had a verbal agreement wherein the
eleven parcels of land covered by the complaint
would serve as the latters compensation for his
services as administrator of Dionisias estate. Thus,
upon the termination of Special Proceeding No.
778-0, and subsequent to the distribution of the
shares of Dionisias heirs, Pedro Sepulveda, Sr. then
became the sole owner of Dulces shares.
Trial court- in favor of respondents; action for
reconveyance based on constructive trust had not
yet prescribed when the complaint was filed; that
he was entitled to a share in the proceeds of the
sale of the property to Danao City; and that the
partition of the subject property among the
adjudicatees thereof was in order.
Ca- affirmed with modification
Whether or not Atty. Pelaez has right to claim
ownership over the properties in question NO
The failure of the private respondent to implead the
obstacle to the trial court and the appellate courts
exercise of judicial power over the said case, and
rendered any orders or judgments rendered therein
a nullity.
RULING:
The rights of the usufructuary are provided in
In Gamis v. Court of Appeals,19 we held that:
Under articles 807 and 834 of the old Civil Code the
surviving spouse is a forced heir and entitled to a
share in usufruct in the estate of the deceased
spouse equal to that which by way of legitime
corresponds or belongs to each of the legitimate
children or descendants who have not been
bettered or have not received any share in the
one-third share destined for betterment. The right of
the surviving spouse to have a share in usufruct in
the estate of the deceased spouse is provided by
law of which such spouse cannot be deprived and
which cannot be ignored. Of course, the spouse
may waive it but the waiver must be express.
In a complaint for partition, the plaintiff seeks, first, a
declaration that he is a co-owner of the subject
property; and, second, the conveyance of his
lawful shares.21
As the Court ruled in De Mesa v. Court of Appeals:
The first stage of an action for judicial partition
and/or accounting is concerned with the
determination of whether or not a co-ownership in
fact exists and a partition is proper, that is, it is not
otherwise legally proscribed and may be made by
voluntary agreement of all the parties interested in
the property. This phase may end in a declaration
that plaintiff is not entitled to the desired partition
either because a co-ownership does not exist or a
partition is legally prohibited. It may also end, on
the other hand, with an adjudgment that a co-
ownership does in truth exist, that partition is proper
in the premises, and that an accounting of rents
and profits received by the defendant from the real
estate in question is in order. In the latter case, "the
parties may, if they are able to agree, make
partition among themselves by proper instruments
of conveyance, and the court shall confirm the
partition so agreed upon by all the parties." In either
case, whether the action is dismissed or partition
and/or accounting is decreed, the order is a final
one and may be appealed by any party aggrieved
thereby.
The second stage commences when the parties
are unable to agree upon the partition ordered by
the court. In that event, partition shall be effected
for the parties by the court with the assistance of
not more than three (3) commissioners. This second
6|Article 562 Article 612 USUFRUC
phase may also deal with the rendition of the
accounting itself and its approval by the Court after
the parties have been accorded the opportunity to
be heard thereon, and an award for the recovery
by the party or parties thereto entitled of their just
shares in the rents and profits of the real estate in
question.
Indeed, the presence of all indispensable parties is
a condition sine qua non for the exercise of judicial
power. It is precisely when an indispensable party is
not before the court that the action should be
dismissed. Thus, the plaintiff is mandated to implead
all the indispensable parties, considering that the
absence of one such party renders all subsequent
actions of the court null and void for want of
authority to act, not only as to the absent parties
but even as to those present.24 One who is a party
to a case is not bound by any decision of the court,
otherwise, he will be deprived of his right to due
process. Without the presence of all the other heirs
as plaintiffs, the trial court could not validly render
judgment and grant relief in favor of the private
respondent.
The failure of the private respondent to implead the
other heirs as parties-plaintiffs constituted a legal
obstacle to the trial court and the appellate courts
exercise of judicial power over the said case, and
rendered any orders or judgments rendered therein
a nullity.
To reiterate, the absence of an indispensable party
renders all subsequent actions of the court null and
void for want of authority to act, not only as to the
absent parties but even as to those
present.26 Hence, the trial court should have
ordered the dismissal of the complaint.27
4. G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all
surnamed OPOSA, minors, and represented by their parents
ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor,
represented by her parents CALVIN and ROBERTA SADIUA,
CARLO, AMANDA SALUD and PATRISHA, all surnamed FLORES,
minors and represented by their parents ENRICO and NIDA
FLORES, GIANINA DITA R. FORTUN, minor, represented by her
parents SIGRID and DOLORES FORTUN, GEORGE II and MA.
CONCEPCION, all surnamed MISA, minors and represented by
their parents GEORGE and MYRA MISA, BENJAMIN ALAN V.
PESIGAN, minor, represented by his parents ANTONIO and ALICE
PESIGAN, JOVIE MARIE ALFARO, minor, represented by her
parents JOSE and MARIA VIOLETA ALFARO, MARIA CONCEPCION
T. CASTRO, minor, represented by her parents FREDENIL and JANE
CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA
DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor, represented
by his parents GREGORIO II and CRISTINE CHARITY NARVASA,
MA. MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE
GABRIELLE, all surnamed SAENZ, minors, represented by their
parents ROBERTO and AURORA SAENZ, KRISTINE, MARY ELLEN,
MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING,
minors, represented by their parents MARIO and HAYDEE KING,
DAVID, FRANCISCO and THERESE VICTORIA, all surnamed
ENDRIGA, minors, represented by their parents BALTAZAR and
TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed
ABAYA, minors, represented by their parents ANTONIO and
MARICA ABAYA, MARILIN, MARIO, JR. and MARIETTE, all
surnamed CARDAMA, minors, represented by their parents
MARIO and LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL, and
IMEE LYN, all surnamed OPOSA, minors and represented by their
parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN
JOHN and ISAIAH JAMES, all surnamed QUIPIT, minors,
represented by their parents JOSE MAX and VILMI QUIPIT,
BUGHAW CIELO, CRISANTO, ANNA, DANIEL and FRANCISCO, all
surnamed BIBAL, minors, represented by their parents
T
FRANCISCO, JR. and MILAGROS BIBAL, and THE PHILIPPINE
ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as
the Secretary of the Department of Environment and Natural
Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding
Judge of the RTC, Makati, Branch 66, respondents.
FACTS:
The controversy has its genesis in Civil Case No. 90-
77 which was filed before Branch 66 (Makati, Metro
Manila) of the Regional Trial Court (RTC), National
Capital Judicial Region. The principal plaintiffs
therein, now the principal petitioners, are all minors
duly represented and joined by their respective
parents. Impleaded as an additional plaintiff is the
Philippine Ecological Network, Inc. (PENI), a
domestic, non-stock and non-profit corporation
organized for the purpose of, inter alia, engaging in
concerted action geared for the protection of our
environment and natural resources. The original
defendant was the Honorable Fulgencio S.
Factoran, Jr., then Secretary of the Department of
Environment and Natural Resources (DENR). His
substitution in this petition by the new Secretary, the
Honorable Angel C. Alcala, was subsequently
ordered upon proper motion by the
petitioners.1 The complaint2 was instituted as a
taxpayers' class suit3 and alleges that the plaintiffs
"are all citizens of the Republic of the Philippines,
taxpayers, and entitled to the full benefit, use and
enjoyment of the natural resource treasure that is
the country's virgin tropical forests." The same was
filed for themselves and others who are equally
concerned about the preservation of said resource
but are "so numerous that it is impracticable to
bring them all before the Court." The minors further
asseverate that they "represent their generation as
well as generations yet unborn."
The complaint starts off with the general averments
that the Philippine archipelago of 7,100 islands has
a land area of thirty million (30,000,000) hectares
and is endowed with rich, lush and verdant
rainforests in which varied, rare and unique species
of flora and fauna may be found; these rainforests
contain a genetic, biological and chemical pool
which is irreplaceable; they are also the habitat of
indigenous Philippine cultures which have existed,
endured and flourished since time immemorial;
scientific evidence reveals that in order to maintain
a balanced and healthful ecology, the country's
land area should be utilized on the basis of a ratio
of fifty-four per cent (54%) for forest cover and forty-
six per cent (46%) for agricultural, residential,
industrial, commercial and other uses; the distortion
and disturbance of this balance as a consequence
of deforestation have resulted in a host of
environmental tragedies, such as (a) water
shortages resulting from drying up of the water
table, otherwise known as the "aquifer," as well as of
rivers, brooks and streams, (b) salinization of the
water table as a result of the intrusion therein of salt
water, incontrovertible examples of which may be
found in the island of Cebu and the Municipality of
Bacoor, Cavite, (c) massive erosion and the
consequential loss of soil fertility and agricultural
productivity, with the volume of soil eroded
estimated at one billion (1,000,000,000) cubic
7|Article 562 Article 612 USUFRUC
meters per annum approximately the size of the
entire island of Catanduanes, (d) the endangering
and extinction of the country's unique, rare and
varied flora and fauna, (e) the disturbance and
dislocation of cultural communities, including the
disappearance of the Filipino's indigenous cultures,
(f) the siltation of rivers and seabeds and
consequential destruction of corals and other
aquatic life leading to a critical reduction in marine
resource productivity, (g) recurrent spells of drought
as is presently experienced by the entire country,
(h) increasing velocity of typhoon winds which result
from the absence of windbreakers, (i) the floodings
of lowlands and agricultural plains arising from the
absence of the absorbent mechanism of forests, (j)
the siltation and shortening of the lifespan of multi-
billion peso dams constructed and operated for the
purpose of supplying water for domestic uses,
irrigation and the generation of electric power, and
(k) the reduction of the earth's capacity to process
carbon dioxide gases which has led to perplexing
and catastrophic climatic changes such as the
phenomenon of global warming, otherwise known
as the "greenhouse effect."
Plaintiffs further assert that the adverse and
detrimental consequences of continued and
deforestation are so capable of unquestionable
demonstration that the same may be submitted as
a matter of judicial notice. This notwithstanding,
they expressed their intention to present expert
witnesses as well as documentary, photographic
and film evidence in the course of the trial.
On 22 June 1990, the original defendant, Secretary
Factoran, Jr., filed a Motion to Dismiss the complaint
based on two (2) grounds, namely: (1) the plaintiffs
have no cause of action against him and (2) the
issue raised by the plaintiffs is a political question
which properly pertains to the legislative or
executive branches of Government. In their 12 July
1990 Opposition to the Motion, the petitioners
maintain that (1) the complaint shows a clear and
unmistakable cause of action, (2) the motion is
dilatory and (3) the action presents a justiciable
question as it involves the defendant's abuse of
discretion.
On 18 July 1991, respondent Judge issued an order
granting the aforementioned motion to dismiss.7 In
the said order, not only was the defendant's claim
that the complaint states no cause of action
against him and that it raises a political question
sustained, the respondent Judge further ruled that
the granting of the relief prayed for would result in
the impairment of contracts which is prohibited by
the fundamental law of the land.
Plaintiffs thus filed the instant special civil action
for certiorari under Rule 65 of the Revised Rules of
Court and ask this Court to rescind and set aside
the dismissal order on the ground that the
respondent Judge gravely abused his discretion in
dismissing the action. Again, the parents of the
plaintiffs-minors not only represent their children, but
have also joined the latter in this case.8
Issue: of whether the said petitioners have a cause
of action to "prevent the misappropriation or
T
impairment" of Philippine rainforests and "arrest the
unabated hemorrhage of the country's vital life
support systems and continued rape of Mother
Earth."
Ruling:
I.
Before going any further, We must first focus on
some procedural matters. Petitioners instituted Civil
Case No. 90-777 as a class suit. The original
defendant and the present respondents did not
take issue with this matter. Nevertheless, We hereby
rule that the said civil case is indeed a class suit.
The subject matter of the complaint is of common
and general interest not just to several, but to all
citizens of the Philippines. Consequently, since the
parties are so numerous, it, becomes
impracticable, if not totally impossible, to bring all
of them before the court. We likewise declare that
the plaintiffs therein are numerous and
representative enough to ensure the full protection
of all concerned interests. Hence, all the requisites
for the filing of a valid class suit under Section 12,
Rule 3 of the Revised Rules of Court are present both
in the said civil case and in the instant petition, the
latter being but an incident to the former.
This case, however, has a special and novel
element. Petitioners minors assert that they
represent their generation as well as generations
yet unborn. We find no difficulty in ruling that they
can, for themselves, for others of their generation
and for the succeeding generations, file a class suit.
Their personality to sue in behalf of the succeeding
generations can only be based on the concept of
intergenerational responsibility insofar as the right to
a balanced and healthful ecology is concerned.
Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means
the created world in its entirety.9 Such rhythm and
harmony indispensably include, inter alia, the
judicious disposition, utilization, management,
renewal and conservation of the country's forest,
mineral, land, waters, fisheries, wildlife, off-shore
areas and other natural resources to the end that
their exploration, development and utilization be
equitably accessible to the present as well as future
generations. 10 Needless to say, every generation
has a responsibility to the next to preserve that
rhythm and harmony for the full enjoyment of a
balanced and healthful ecology. Put a little
differently, the minors' assertion of their right to a
sound environment constitutes, at the same time,
the performance of their obligation to ensure the
protection of that right for the generations to come.
II.
The complaint focuses on one specific fundamental
legal right the right to a balanced and healthful
ecology which, for the first time in our nation's
constitutional history, is solemnly incorporated in
the fundamental law.
The right to a balanced and healthful ecology
carries with it the correlative duty to refrain from
impairing the environment.
8|Article 562 Article 612 USUFRUC
Civil Case No. 90-777 be said to raise a political
question. Policy formulation or determination by the
executive or legislative branches of Government is
not squarely put in issue. What is principally
involved is the enforcement of a right vis-a-
vis policies already formulated and expressed in
legislation. It must, nonetheless, be emphasized that
the political question doctrine is no longer, the
insurmountable obstacle to the exercise of judicial
power or the impenetrable shield that protects
executive and legislative actions from judicial
inquiry or review.
III.
Needless to say, all licenses may thus be revoked
or rescinded by executive action. It is not a
contract, property or a property right protested by
the due process clause of the Constitution. In Tan vs.
Director of Forestry, 25 this Court held:
. . . A timber license is an instrument by which the
State regulates the utilization and disposition of
forest resources to the end that public welfare is
promoted. A timber license is not a contract within
the purview of the due process clause; it is only a
license or privilege, which can be validly withdrawn
whenever dictated by public interest or public
welfare as in this case.
A license is merely a permit or privilege to do what
otherwise would be unlawful, and is not a contract
between the authority, federal, state, or municipal,
granting it and the person to whom it is granted;
neither is it property or a property right, nor does it
create a vested right; nor is it taxation (37 C.J. 168).
Thus, this Court held that the granting of license
does not create irrevocable rights, neither is it
property or property rights (People vs. Ong Tin, 54
O.G. 7576).
Since timber licenses are not contracts, the non-
impairment clause, which reads:
Sec. 10. No law impairing, the obligation of
contracts shall be passed. 27
cannot be invoked.
In the second place, even if it is to be assumed that
the same are contracts, the instant case does not
involve a law or even an executive issuance
declaring the cancellation or modification of
existing timber licenses. Hence, the non-impairment
clause cannot as yet be invoked. Nevertheless,
granting further that a law has actually been
passed mandating cancellations or modifications,
the same cannot still be stigmatized as a violation
of the non-impairment clause. This is because by its
very nature and purpose, such as law could have
only been passed in the exercise of the police
power of the state for the purpose of advancing
the right of the people to a balanced and healthful
ecology, promoting their health and enhancing the
general welfare.
In short, the non-impairment clause must yield to
the police power of the state.
T
Finally, it is difficult to imagine, as the trial court did,
how the non-impairment clause could apply with
respect to the prayer to enjoin the respondent
Secretary from receiving, accepting, processing,
renewing or approving new timber licenses for,
save in cases of renewal, no contract would have
as of yet existed in the other instances. Moreover,
with respect to renewal, the holder is not entitled to
it as a matter of right.
5. G.R. No. 148246 February 16, 2007
REPUBLIC OF THE PHILIPPINES, Petitioner, vs. JUAN C.
TUVERA, VICTOR P. TUVERA and TWIN PEAKS
DEVELOPMENT CORPORATION, Respondents.
Caveat: not included in the ruling kay about res
judicata, demurrer to evidence, issued about
Tuvera kay close siya kay Marcos and damages.
Still, dili nako ma relate sa property ang case.
FACTS: Twin Peaks Development Corporation (Twin
Peaks) was organized with a principal purpose of
engaging in the real estate business. There were
five incorporating stockholders, including
respondent Victor Tuvera (Victor) who owned 48%
of the shares of the fledgling corporation. Victor
was the son of respondent Juan Tuvera, who was
then Presidential Executive Assistant of President
Marcos.
Acting on a letter of Twin Peaks Vice-President and
Treasurer Evelyn Fontanilla, President Marcos
granted the award of a Timber License Agreement
(TLA) in favor of Twin Peaks and to export
mahogany of the narra. As a result, Twin Peaks was
able to engage in logging operations.
In 1986, President Marcos was ousted, and Corazon
C. Aquino assumed the presidency. She established
the Philippine Commission on Good Government
(PCGG), tasked with tracking down the ill-gotten
wealth procured by Marcos, his family, and
associates. Among the powers granted to the
PCGG was the power to issue writs of sequestration.
PCGG issued a Writ of Sequestration on all assets,
properties, records, documents, and shares of stock
of Twin Peaks on the ground that all the assets of
the corporation are ill-gotten wealth. This was
followed by a Mission Order implementing the Writ
of Sequestration.
PCGG, in behalf of the Republic, filed the
Complaint to recover funds allegedly acquired by
said parties.
The Complaint alleged that Juan Tuvera, as
Presidential Executive Assistant of President Marcos,
took advantage of his relationship to influence the
President by engaging in a scheme to unjustly
enrich himself at the expense of the Republic and
of the Filipino people. This was allegedly
accomplished on his part by securing a TLA on
behalf of Twin Peaks despite existing laws expressly
prohibiting the exportation of mahogany of the
narra and Twin Peaks lack of qualification to be a
grantee thereof for lack of sufficient logging
equipment. The Complaint further alleged that Twin
Peaks exploited the countrys natural resources by
engaging in large-scale logging and the export of
9|Article 562 Article 612 USUFRUC
its produce through its Chinese operators whereby
respondents obtained a revenue of approximately
45 million.
Respondents Victor Tuvera and Twin Peaks claimed
that Twin Peaks was awarded the TLA only after its
articles of incorporation had been amended
enabling it to engage in logging operations, that
the Republics reference to Chinese operations
were merely imagined, and that the PCGG has no
statutory authority to institute the action. Juan
Tuvera also denied the allegations of the Republic
and alleged that as Presidential Executive Assistant
of then President Marcos, he acted within the
confines of his duties and had perpetrated no
unlawful acts.
Respondents filed an Omnibus Motion to Nullify Writ
of Sequestration and/or the Mission Order. The
Sandiganbayan issued a Temporary Restraining
Order against the PCGG requiring it to cease,
refrain and desist from further implementing the Writ
of Sequestration and the Mission Order, and a Writ
of Preliminary Injunction was subsequently granted.
During trial after the prosecution has rested its case
and with leave of court, respondents, filed a
Demurrer to Evidence on the basis of res judicata
citing the factual antecedents culminating with the
Courts decision in Felipe Ysmael Jr. & Corp., Inc. v.
Sec. of Environment and Natural Resources.
Subsequently, the Sandiganbayan held that the
validity of TLA was already fully adjudicated in a
Resolution/Order issued by the Office of the
President, which had become final and executory
with the failure of the aggrieved party to seek a
review thereof. Consequently, the Sandiganbayan
concluded that the Republic is barred from
questioning the validity of TLA in consonance with
the principle of res judicata.
ISSUE: Whether or not the TLA was validly issued in
favour of Twin Peaks. - No
RULING: Section 3 of Executive Order No. 14-A
establishes that the degree of proof required in
cases such as this instant case is preponderance of
evidence. The Complaint adverted to several
provisions of law including R.A. No. 3019, (Anti-Graft
and Corrupt Practices Act), and Articles 19, 20 and
21 of the Civil Code.
Still, the most organic laws that determine the
validity or invalidity of the TLA are those that
governed the issuance of timber license
agreements in 1984. In that regard, the Republic
argues that the absence of a bidding process is
patent proof of the irregularity of the issuance of
the TLA in favor of Twin Peaks.
A timber license agreement authorizes a person to
utilize forest resources within any forest land with the
right of possession and exclusion of others. The
Forestry Reform Code prohibits any person from
utilizing, exploiting, occupying, possessing or
conducting any activity within any forest land
unless he had been authorized to do so under a
license agreement, lease, license or permit. The
T
Code also mandates that no timber license
agreement shall be issued unless the applicant
satisfactorily proves that he has the financial
resources and technical capability not only to
minimize utilization, but also to practice forest
protection, conservation and development
measures.
However, the Code is silent as to the procedure in
the acquisition of such timber license agreement.
Such procedure is more particularly defined under
FAO (Forestry Administration Order) No. 11, which
provides for the "revised forestry license regulations."
FAO No. 11 establishes that it is the Director of
Forestry who has the power "to grant timber licenses
and permits." It also provides as a general policy
that timber license agreements shall be granted
through no other mode than public
bidding. However, Section 24 of FAO No. 11 does
admit that a timber license agreement may be
granted through "negotiation," as well as through
"public bidding." But even a person who is granted
a TLA through "negotiation" is still required to submit
the same requirements and supporting papers as
required for public bidding.
There is no doubt that no public bidding occurred in
this case. Certainly, respondents did not raise the
defense in their respective answers. The absence of
such bidding was testified on by prosecution
witness Arcangel. Yet even if we consider that Twin
Peaks could have acquired the TLA through
"negotiation," the prescribed requirements for
"negotiation" under the law were still not complied
with.
It is evident that Twin Peaks was of the frame of
mind that it could simply walk up to President
Marcos and ask for a timber license agreement
without having to comply with the elaborate
application procedure under the law. This is
indicated by the letter signed by Twin Peaks Vice
President and Treasurer Evelyn Fontanilla,
addressed directly to then President Marcos,
wherein Twin Peaks expressed that "we would like to
request a permit to export 20,000 cubic meters of
logs and to cut and process 10,000 cubic meters of
the narra species in the same area." A marginal
note therein signed by Marcos indicates an
approval thereof.
Neither the Forestry Reform Code nor FAO No. 11
provide for the submission of an application directly
to the Office of the President as a proper mode for
the issuance of a TLA. Without discounting the
breadth and scope of the Presidents powers as
Chief Executive, the authority of the President with
respect to timber licenses is, by the express terms of
the Revised Forestry Code, limited to the
amendment, modification, replacement or
rescission of any contract, concession, permit,
license or any other form of privilege granted by
said Code.
There are several factors that taint this backdoor
application for a timber license agreement by Twin
Peaks. The forest area covered by the TLA was
already the subject of a pre-existing TLA in favor of
Ysmael. The Articles of Incorporation of Twin Peaks
10 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
does not even stipulate that logging was either a
principal or secondary purpose of the corporation.
Respondents do allege that the Articles was
amended prior to the grant in order to
accommodate logging as a corporate purpose,
yet since respondents have waived their right to
present evidence by reason of their resort to
demurrer, we cannot consider such allegation as
proven.
Sec. 18(a)(1) of FAO No. 11 requires that an
applicant must have a minimum capitalization of
20.00 per cubic meter in cash and an established
credit line of 150.00 per cubic meter based on the
allowable annual cut. Twin Peaks, therefore, must
have at least 1,200,000.00 in cash as its minimum
capitalization, following FAO No. 11. An
examination of Twin Peaks Articles of Incorporation
shows that its paid-up capital was only 312,500.00.
Clearly, Twin Peaks paid-up capital is way below
the minimum capitalization requirement.
Moreover, Sec. 18(5) provides that the bidder or
applicant shall show evidence of ownership of, or
negotiation to acquire, a wood processing plant.
However, although TLA No. 356 was issued to Twin
Peaks in 1984, it continued to engage the services
of at least two sawmills as late as 1988. Four (4)
years from the issuance of the license, Twin Peaks
remained incapable of processing logs.
ARTICLE 566
1. EN BANC
G.R. No. L-3691. November 21, 1951.
JACINTO DEL SAZ OROZCO y MORTERA and MARIA
PAZ ALCANTARA, Plaintiffs-Appellants, v. SALVADOR
ARANETA, FRANCISCO DEL SAZ OROZCO Y LOPEZ,
DOLORES DEL SAZ OROZCO Y LOPEZ, and the minors
FELISA, EUGENIO, ANTONIO, JOSE, MARIA Y CARLOS,
all surnamed DEL SAZ OROZCO Y LOPEZ whose
natural guardian is DOA CONCEPCION LOPEZ
VDA. DE DEL SAZ OROZCO, Defendants-Appellees.
SYLLABUS
1. DESCENT AND DISTRIBUTION; FRUITS OF PROPERTY
UNDER ADMINISTRATION; STOCK DIVIDENDS.
Several thousand shares of stock in a corporation
was , by will, given by the deceased to one of his
heirs in life usufruct, with the obligation to preserve
paid shares in favor of the other heirs who were
declared the naked owners thereof. Later, the
corporation declared stock dividends and the
usufructuary received, as his proportionate portion,
over 28,000 additional shares of stock. "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: A dividend, whether in the form of cash or
stock, is income and, consequently, should go to
the usufructuary, taking into consideration that a
stock dividend as well as a cash dividend can be
declared only out of profits of the corporation.
(Estate of Bachrach, 87 Phil., 483).
FACTS: Eugenio del Saz Orozco died leaving a will
and was afterwards duly admitted to probate. The
pertinent clause of that will provided that certain
properties should be given in life usufruct to his son
Jacinto del Saz Orozco y Mortera, with the
obligation on his part to preserve said properties in
favor of the other heirs who were declared the
naked owners thereof.
Among these properties were 5,714 shares of stock
of the Benguet Consolidated Mining Company and
94 shares of stock of the Manila Electric Company,
according to the project of partition executed
pursuant to said will and duly approved by the
court.
On September 11, 1934, the Benguet Consolidated
Mining Company declared and distributed stock
dividends out of its surplus profits, the plaintiff
receiving his proportionate portion of 11,428 shares.
On November 17, 1939, said Mining Company
again declared stock dividends out of its surplus
profits, of which the plaintiff received 17,142 shares,
making a total of 28,570 shares.
ISSUE: Whether the stock dividend is part of the
capital which should be preserved in favor of the
owners or an income or fruits of the capital which
should be given to and enjoyed by the life
usufructuary (plaintiff) as his own exclusive
property. - Yes
HELD: The same question was raised in the Matter of
the Testate Estate of Emil Maurice Bachrach: "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?
In said case, Emil Maurice Bachrach was the owner
of 108,000 shares of stock of the Atok Big Wedge
Mining Co., Inc. He received 54,000 shares,
representing 50 per cent stock dividend on said
original shares. On June 10, 1948, Mary MacDonald
Bachrach as life tenant or usufructuary of the estate
filed a motion asking the Court of First Instance to
authorize the Peoples Bank and Trust Company, as
administrator of the estate of Emil Maurice
Bachrach, to transfer to her the said 54,000 shares
of stock dividend by indorsing and delivering to her
the corresponding certificates of stock, claiming
that said dividend, although paid out in the form of
stock, was fruit or income and, therefore, belonged
to her as a usufructuary. The other heirs of Bachrach
opposed the motion on the ground that the stock
dividend was part of the capital or corpus of the
estate and belonged to the remainderman. The
court granted the motion and the other heirs
appealed.
SC ruled that a dividend, whether in the form of
cash or stock, is income and, consequently, should
go to the usufructuary, taking into consideration
that a stock dividend as well as a cash dividend
can be declared only out of profits of the
corporation, for if it were declared out of the
capital it would be a serious violation of the law.
For the reasons sustaining the doctrine, we refer to
that recent decision.
The appellees attempt to differentiate the present
case from that case, contending that, while the
11 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
doctrine in that case effected a just and equitable
distribution, the application of it in the present case
would cause an injustice. We have examined the
two cases carefully and we have not perceived
any difference which would justify a reversal or
modification of the doctrine in the Bachrach case.
One of the differences pointed out is that by the
declaration of stock dividends the voting power of
the original shares of stock is considerably
diminished, and, if the stock dividends are not given
to the remainderman, the voting power of the latter
would be greatly impaired. Bearing in mind that the
number of shares of stock of the Benguet
Consolidated Mining Company is so large, the
diminution of the voting power of the original shares
of stock in this case cannot possibly affect or
influence the control of the policies of the
corporation which is vested in the owners of the
great block of shares. This would not be a sufficient
reason for modifying the doctrine of the Bachrach
case. These remarks are made in answer to the
argument of the appellees in this particular case,
but they do not imply that if the diminution of the
voting power were considerable the doctrine
should be modified.
In view of the foregoing, the judgment appealed
from is reversed, and it is declared that the stock
dividends amounting to 28,570 shares, above
mentioned, belongs to the plaintiff-appellant
Jacinto del Saz Orozco y Mortera exclusively and in
absolute ownership.
ARTICLE 581
1. G.R. No. 107132 October 8, 1999
MAXIMA HEMEDES, petitioner, vs. THE HONORABLE
COURT OF APPEALS, DOMINIUM REALTY AND
CONSTRUCTION CORPORATION, ENRIQUE D.
HEMEDES and R & B INSURANCE
CORPORATION, respondents.
G.R. No. 108472 October 8, 1999
R&B INSURANCE CORPORATION, petitioner, vs. THE
HONORABLE COURT OF APPEALS, DOMINIUM REALTY
AND CONSTRUCTION CORPORATION, ENRIQUE D.
HEMEDES and MAXIMA HEMEDES, respondents.
FACTS: The instant controversy involves a question
of ownership over an unregistered parcel of land,
identified as Lot No. 6 situated in Sala, Cabuyao,
Laguna. It was originally owned by the late Jose
Hemedes, father of Maxima Hemedes and Enrique
D. Hemedes.
Jose Hemedes executed a document entitled
"Donation Inter Vivos With Resolutory
Conditions" whereby he conveyed ownership over
the subject land, together with all its improvements,
in favor of his third wife, Justa Kauapin, subject to
the following resolutory conditions:
(a) Upon the death or remarriage of the DONEE,
the title to the property donated shall revert to any
of the children, or their heirs, of the DONOR
expressly designated by the DONEE in a public
document conveying the property to the latter; or
(b) In absence of such an express designation
made by the DONEE before her death or
remarriage contained in a public instrument as
above provided, the title to the property shall
automatically revert to the legal heirs of the
DONOR in common.
Pursuant to the first condition above mentioned,
Justa Kausapin executed a "Deed of Conveyance
of Unregistered Real Property by
Reversion" conveying to Maxima Hemedes the
subject property.
Maxima Hemedes, through her counsel, filed an
application for registration and confirmation of title
over the subject unregistered land. An OCT was
issued in the name of Maxima Hemedes married to
Raul Rodriguez by the Registry of Deeds with the
annotation that "Justa Kausapin shall have the
usufructuary rights over the parcel of land herein
described during her lifetime or widowhood."
R & B Insurance claimed that Maxima Hemedes
and her husband Raul Rodriguez constituted a real
estate mortgage over the subject property in its
favor to serve as security for a loan in the amount of
P6,000.00. R & B Insurance extrajudicially foreclosed
the mortgage for failure to pay the loan, and the
land was sold at a public auction with R & B
Insurance as the highest bidder and a certificate of
sale was issued by the sheriff in its favor. Since
Maxima Hemedes failed to redeem the property
within the redemption period, R & B Insurance
executed an Affidavit of Consolidation and a TCT
was issued its name. The annotation of usufruct in
favor of Justa Kausapin was maintained in the new
title.
Despite the earlier conveyance of the subject land
in favor of Maxima Hemedes, Justa Kausapin
executed a "Kasunduan" whereby she transferred
the same land to her stepson Enrique D. Hemedes,
pursuant to the resolutory condition in the deed of
donation executed in her favor by her late husband
Jose Hemedes. Subsequently, Enriques D. Hemedes
sold the property to Dominium Realty and
Construction Corporation (Dominium).
Dominium leased the property to its sister
corporation Asia Brewery, Inc. who, even before
the signing of the contract of lease, constructed
two warehouses made of steel and asbestos
costing about P10,000,000.00 each. Upon learning
of Asia Brewery's constructions upon the subject
property, R & B Insurance sent a letter informing the
former of its ownership of the property and of its
right to appropriate the constructions since Asia
Brewery is a builder in bad faith.
On May 8, 1981, Maxima Hemedes also wrote a
letter addressed to Asia Brewery wherein she
asserted that she is the rightful owner of the subject
property and that she has the right to appropriate
Asia Brewery's constructions, to demand its
demolition, or to compel Asia Brewery to purchase
the land. In another letter addressed to R & B
Insurance, Maxima Hemedes denied the execution
of any real estate mortgage in favor of the latter.
Dominium and Enrique D. Hemedes filed a
complaint with the CFI for the annulment of the TCT
issued in favor of R & B Insurance and/or the
12 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
reconveyance to Dominium of the subject
property. The complaint alleged that Dominium
was the absolute owner of the subject property by
virtue of the deed of sale executed by Enrique D.
Hemedes, who in turn obtained ownership of the
land from Justa Kausapin, as evidenced by the
"Kasunduan".
RTC: In favor of Dominium and Enrique D. Hemedes.
CA: Affirmed the decision in toto.
ISSUE: 1. Which of the two conveyances by Justa
Kausapin, the first in favor of Maxima Hemedes and
the second in favor of Enrique D. Hemedes,
effectively transferred ownership over the subject
land? Maxima
2. Whether or not the annotation of usufructuary
rights in favor of Justa Kausapin upon Maxima
Hemedes' OCT imposes upon R & B Insurance the
obligation to investigate the validity of its
mortgagor's title. - No
RULING: 1. Public respondent's finding that the
"Deed of Conveyance of Unregistered Real
Property By Reversion" executed by Justa Kausapin
in favor of Maxima Hemedes is spurious is not
supported by the factual findings in this case. It is
grounded upon the mere denial of the same by
Justa Kausapin. A party to a contract cannot just
evade compliance with his contractual obligations
by the simple expedient of denying the execution
of such contract.
Moreover, public respondent's reliance upon Justa
Kausapin's repudiation of the deed of conveyance
is misplaced for there are strong indications that she
is a biased witness. Justa Kausapin was dependent
upon Enrique D. Hemedes for financial assistance
and was already 80 years old, suffering from
worsening physical infirmities and completely
dependent upon her stepson Enrique D. Hemedes
for support. He could easily have influenced his
aging stepmother to donate the subject property to
him.
The CA also erred when it declared the Deed of
Conveyance by Reversion in favor of Maxima void
for failure to comply with Article 1332 of the Civil
Code, which states: When one of the parties is
unable to read, or if the contract is in a language
not understood by him, and mistake or fraud is
alleged, the person enforcing the contract must
show that the terms thereof have been fully
explained to the former. In this case, Justa denies
knowledge of the deed of conveyance. Hence,
Art. 1332 is inapplicable as it was useless to
determine whether or not Justa was induced to
execute the document by means of fraud when
she denies knowledge of existence in the first place.
Moreover, private respondents have failed to
produce clear, strong, and convincing evidence to
overcome the positive value of the "Deed
Conveyance of Unregistered Real Property by
Reversion" a notarized document. The mere
denial of its execution by the donor will not suffice
for the purpose.
The declarations of real property by Enrique D.
Hemedes, his payment of realty taxes, and his
being designated as owner of the subject property
cannot defeat a certificate of title, which is an
absolute and indefeasible evidence of ownership
of the property in favor of the person whose name
appears therein. With regard to tax declarations
and tax receipts, this Court has held on several
occasions that the same do not by themselves
conclusively prove title to land.
2. R & B Insurance should be considered a
mortgagee in good faith and an innocent
purchaser of the land in question. It is a well-
established principle that every person dealing with
registered land may safely rely on the correctness
of the certificate of title issued and the law will in no
way oblige him to go behind the certificate to
determine the condition of the property. An
innocent purchaser for value is one who buys the
property of another without notice that some other
person has a right to or interest in such property and
pays a full and fair price for the same at the time of
such purchase or before he has notice of the claim
of another person.
The annotation of usufructuary rights in favor of
Justa Kausapin upon Maxima Hemedes' OCT dose
not impose upon R & B Insurance the obligation to
investigate the validity of its mortgagor's title.
Usufruct gives a right to enjoy the property of
another with the obligation of preserving its form
and substance. The usufructuary is entitled to all the
natural, industrial and civil fruits of the property and
may personally enjoy the thing in usufruct, lease it
to another, or alienate his right of usufruct, even by
a gratuitous title, but all the contracts he may enter
into as such usufructuary shall terminate upon the
expiration of the usufruct.
Clearly, 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. This right is
embodied in the Civil Code, which provides that
the owner of property the usufruct of which is held
by another may alienate it, although he cannot
alter the property's form or substance, or do
anything which may be prejudicial to the
usufructuary.
There is no doubt that the owner may validly
mortgage the property in favor of a third person
and the law provides that, in such a case, the
usufructuary shall not be obliged to pay the debt of
the mortgagor, and should the immovable be
attached or sold judicially for the payment of the
debt, the owner shall be liable to the usufructuary
for whatever the latter may lose by reason thereof.
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 respondent's ruling, for the reason that
Maxima Hemedes' ownership over the property
remained unimpaired despite such encumbrance.
R & B Insurance had a right to rely on the certificate
13 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
of title and was not in bad faith in accepting the
property as a security for the loan it extended to
Maxima Hemedes.
2. G.R. No. L-51333 February 19, 1991
RAMONA R. LOCSIN, accompanied by her husband RENATO L.
LOCSIN; TERESITA R. GUANZON, accompanied by her husband
ROMEO R. GUANZON; CELINA R. SIBUG accompanied by her
husband CARLOS V. SIBUG; MA. LUISA R. PEREZ, accompanied by
her husband JOSE V. PEREZ; EDITHA R. YLANAN, accompanied by
her husband CARLOS W. YLANAN; and ANA MARIE R. BENEDICTO,
accompanied by her husband JOSE LUIS U. BENEDICTO,
petitioners, vs.
HONORABLE JUDGE VICENTE P. VALENZUELA, Judge of the Court
of First Instance of Negros Occidental, Branch III and SPOUSES
JOSEPH SCHON and HELEN BENNETT SCHON, respondents.
G.R. No. L-52289 February 19, 1991
RAMONA R. LOCSIN, accompanied by her husband RENATO R.
LOCSIN; TERESITA R. GUANZON, accompanied by her husband
ROMEO G. GUANZON; CELINA R. SIBUG, accompanied by her
husband CARLOS V. SIBUG; MA. LUISA R. PEREZ, accompanied by
her husband JOSE V. PEREZ; EDITHA R. YLANAN, accompanied by
her husband CARLOS W. YLANAN; and ANA MARIE R. BENEDICTO,
accompanied by her husband JOSE LUIS U. BENEDICTO,
petitioners, vs.
CARLOS PANALIGAN, AMADO MARQUEZ, HERBERT PEDROS,
ANTONIO FELICIANO, JR., HUGO AGUILOS, ALBERTO GUBATON,
JULIA VDA. DE ESQUELITO, SERAFIN JANDOQUELE, SEREFIAS
ESQUESIDA, CARLOS DELA CRUZ, ELISEO GELONGOS, ESPINDION
JOCSON, SALVADOR MUNUN, ULFIANO ALEGRIA, and IRINEO
BALERA, and the Spouses JOSEPH SCHON and HELEN BENNETT
SCHON respondents.
FACTS: Petitioners Ramona R. Locsin, Teresita R.
Guanzon, Celina R. Sibug, Ma. Lusia R. Perez, Editha
R. Ylanan and Ana Marie R. Benedicto were co-
owners of Hacienda Villa Regalado located in
Negros Occidental.
A portion of this land, known as Lot No. 2-C-A-3 was
subject to the lifetime usufructuary rights of
respondent Helen Schon. The bulk of this lot was
cultivated lessees-tenants who customarily
delivered the rental to Helen Schon.
After the onset of the martial law administration, PD
27 was promulgated decreeing the "Emancipation
of Tenants." The tract of land owned in common by
the petitioners, including the portion thereof subject
to Helen Schon's usufructuary rights, fell within the
scope of "Operation Land Transfer." Petitioners
through counsel sought the opinion of the DAR as
to who (petitioners or respondent Helen Schon)
should be entitled to receive the rental payments
which continued to be made by the respondent
tenants to Helen Schon.
The DAR District Officer rendered an opinion that
the rental payments as of 22 October 1972 (when
PD 27 was created) were properly considered as
amortization payments for the land and as such
should pertain to the land- owners and not to the
usufructuary.
Civil Case No. 13828, Court of First Instance of
Negros Occidental
Petitioners filed against the spouses Joseph and
Helen Schon for collection of rentals plus damages
with prayer for preliminary injunction. There
petitioners claimed that since the land subject to
Helen Schon's usufructuary rights was among the
parcels of land declared by the DAR as a land
reform area pursuant to PD 27, the rental payments
which the respondent spouses had been collecting
should be delivered to petitioners.
Respondents Schon alleged that the CFI was bereft
of jurisdiction over the subject matter of the case.
CAR Case No. 76, Court of Agrarian Relations
Approximately 5 months after filing their complaint
before the Negros Occidental CFI, petitioners filed
a second complaint with the Court of Agrarian
Relations. Petitioners impleaded as co-respondents
of the spouses Schon the tenants who were
cultivating the land burdened with the usufruct of
Helen Schon. Petitioners prayed that the
respondent tenants be required to pay to
petitioners (rather than to the spouses Schon) all
future rentals beginning with the crop year of 1978
and every year thereafter, until full payment of the
amortization payments computed by the DAR.
Respondents Schon once again asserted lack of
jurisdiction over the subject matter of the case, this
time on the part of the CAR. The dispute between
petitioners and respondents Schon related to the
continued existence or termination of the
usufructuary rights of Helen Schon, which issue did
not constitute an agrarian dispute and therefore
had to be litigated elsewhere, i.e., before the
regular courts of first instance.
The respondent tenants agreed with the Schons
that there was no tenancy relationship existing in
respect of the land cultivated by them, since such
land had already been brought within the ambit of
"Operation Land Transfer".
Dismissal of Civil Case No. 13823 and CAR Case No.
76
The Agrarian Court rendered a decision dismissing
petitioners' complaint in CAR. It held that it had no
jurisdiction to decide the case because it is a
dispute between two landowners, thus, no agrarian
dispute which it may take cognizance of.
On appeal, the CA ruled that since the only issue
presented in the appeal was whether or not the
CAR had jurisdiction to try and decide CAR Case,
the appeal raised "a pure question of law" and
certified the case to the Supreme Court for the
latter's disposition.
In Civil Case 13823, the CFI held that it was the
Court of Agrarian Relations that had jurisdiction
over the case.
ISSUES: 1. As between the naked owners and the
usufructuary, who should be entitled to the amounts
paid by the tenants beginning 21 October 1972?
The naked owners
2. Whether or not the legal character of the
payments made by the tenants beginning 21
October 1972 are amortization payments on the
cost of the land- Yes
14 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
HELD: Under PD No. 27, the tenant-farmer became
owner of a family-size farm of five (5) hectares or, if
the land was irrigated, three (3) hectares, and that
the tenant-owner had to pay for the cost of the
land within fifteen (15) years by paying fifteen (15)
equal annual amortization payments. Thus, it
appears clear that ownership over lands (like Lot
No. 2-C-A-3) subjected to Operation Land Transfer
moved from the registered owner (the old
landowner) to the tenants (the new landowners).
The fifteen (15) annual amortizations to be paid by
the tenants-owners were intended to replace the
landholdings which the old landowners gave up in
favor of the new landowners, the tenants-owners.
It follows that in respect of land subjected to
Operation Land Transfer, the tenants-farmers
became owners of the land they tilled as of the
effective date of Presidential Decree No. 27, i.e., 21
October 1972.
We believe and so hold that Lot No. 2-C-A-3 having
been declared part of the land reform area and
subjected to Operation Land Transfer, the payments
made on and after 21 October 1972 by the private
respondent tenants-farmers constituted
amortization payments on the cost of the land that
they were required to pay under Presidential
Decree No. 27. These payments, therefore, legally
pertain to petitioners, the former landowners as part
of the compensation for the dominion over land of
which they were deprived by operation of
Presidential Decree No. 27.
Those payments cannot be characterized as rentals
like those which had been paid to Helen Schon as
usufructuary prior to the promulgation of
Presidential Decree No. 27 and prior to the
effectivity of Operation Land Transfer.
We turn to the question of what rights, if any, were
retained by Helen Schon as a usufructuary, after
the effectivity of Presidential Decree No. 27.
We believe that the usufruct which had therefore
existed as a jus in re aliena in favor of Helen Schon
was effectively extinguished by Presidential Decree
No. 27.
To hold, as private respondent Helen Schon
apparently urges, that her usufruct was not
extinguished but rather remained impressed upon
the land passing on to the new owners, would
obviously defeat the very purpose of the land
reform statute. Presidential Decree No. 27 was
enacted to "emancipate" the tenants from the
"bondage of the soil" by giving to tenants-farmers
ownership of the land which they were cultivating
upon the assumption that they would work harder
to improve their lot in life if they became
landowners rather than mere tillers of somebody
else's land.
This is not to say that respondent Helen Schon lost
any and all rights upon the promulgation of
Presidential Decree No. 27. In a legal, technical
sense, it may be difficult to hold that Presidential
Decree No. 27 resulted in the lands brought within
the scope of Operation Land Transfer being
"expropriated for public use", as this term is used in
Article 609 of the Civil Code, which reads thus:
Art. 609. Should the thing in usufruct be
expropriated for public use, the owner shall be
obliged either to replace it with another thing of the
same value and of similar conditions, or to pay the
usufructuary the legal interest on the amount of the
indemnity for the whole period of the usufruct. If the
owner chooses the latter alternative, he shall give
security for the payment of the interest.
For it was not the Government or any of its
agencies which took over ownership of the land nor
was such land devoted subsequently to "public
use", since ownership was transferred directly from
former landowner to the tenant-tiller as new
landowner, for the use and benefit exclusively of
the new landowner. While, however, Article 609 of
the Civil Code may not be strictly applicable, we
believe that the situation contemplated in Article
609 is sufficiently close to that which resulted from
application of Presidential Decree No. 27 to the
land here involved. Bearing in mind that refusal to
decide an otherwise unavoidable issue upon the
ground of non liquet ("it is not clear") is not a
permissible response by a court where there is no
provision of law clearly and specifically applicable
to the facts at hand,4 we believe that Article 609
should be applied to the present set of facts by
analogy.
It follows that respondent Helen Schon, so long as
her rights as usufructuary persist under the
instrument which gave birth to such rights, would be
entitled to a replacement reasonably equivalent to
the land previously burdened with her usufructuary
right, or to legal interest on the amount of the
indemnity or cost of the land paid by private
respondent tenants-farmers and the Land Bank.
While the option or choice belongs to petitioners,
considering that Helen Schon had already received
part of the purchase price of the land previously
owned by petitioners from private respondent
tenants-farmers, and in the interest of expeditious
justice, we consider it the second alternative that
should be given effect. Thus, from the monies that
she actually received from private respondent
tenants-farmers on and after 21 October 1972,
respondent Helen Schon is entitled to retain an
amount equivalent to the legal interest on said
amounts for every year that the usufruct would by
its own terms have continued to exist had it not
been extinguished by operation of Presidential
Decree No. 27; the balance of such amounts
received by her shall be turned over to petitioners.
She is also entitled to the same right in respect of
the balance of the price of the land petitioners
presumably received from the Land Bank.
ARTICLE 597
1. EN BANC
G.R. No. L-9023. November 13, 1956.
BISLIG BAY LUMBER COMPANY. INC., Plaintiff-
Appellee, vs. THE PROVINCIAL GOVERNMENT OF
SURIGAO, Defendant-Appellant.
FACTS: Bislig Bay Lumber Co., Inc. is a timber
concessionaire of a portion of public forest located
15 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
in the provinces of Agusan and Surigao. With a view
to developing and exploiting its concession, the
company constructed at its expense a road from
the barrio Mangagoy into the area of the
concession in Surigao, a portion of which is on a
private property of the company. The expenses
incurred by the company in the construction of said
road amounted to P113,370, upon which the
provincial assessor of Surigao assessed a tax in the
amount of P669.33. Of this amount, the sum of
P595.92 corresponds to the road constructed within
the area of the concession. This was paid under
protest. Later, the company filed an action for its
refund in the Court of First Instance of Manila
alleging that the road is not subject to tax.
It is the theory of Appellant (Government of
Surigao) that, inasmuch as the road was
constructed by Appellee (Bislig) for its own use and
benefit it is subject to real tax even if it was
constructed on a public land.
On the other hand, Appellee contended that said
road is exempt from real tax because (1) the road
belongs to the national government by right of
accession, (2) the road cannot be removed or
separated from the land on which it is constructed
and so it is part and parcel of the public land, and
(3) the road was built not only for the use and
benefit of Appellee but also of the public in
general.
ISSUE: Whether or not Bislig Bay Lumber Co. is
exempt from real tax. Yes because it a
usufructuary of the road in question
RULING: We are inclined to uphold the theory of
Appellee.
In the first place, it cannot be disputed that the
ownership of the road that was constructed by
Appellee belongs to the government by right
accession not only because it is inherently
incorporated or attached to the timber land leased
to Appellee, but also because upon the expiration
of the concession, said road would ultimately pass
to the national government.
In the second place, while the road was
constructed by Appellee primarily for its use and
benefit, the privilege is not exclusive, for, under the
lease contract entered into by the Appellee and
the government and by public in by the general.
Thus, under said lease contract, Appellee cannot
prevent the use of portions, of the concession for
homesteading purposes. It is also in duty bound to
allow the free use of forest products within the
concession for the personal use of individuals
residing in or within the vicinity of the land. The
government has reserved the right to set aside
communal forest for the use of the inhabitants of
the region, and to set forest reserves for public uses.
It can also grant licenses covering any portion of
the territory for the cutting and extraction of timber
to be used in public works, for mining purposes, or
for the construction of railway lines. And, if it so
desires, it can provide for logging railroad, cable
ways timber chute os slide, telephone lines,
pumping stations log landings, and other rights of
way for the use of forest licensees, concessionaires,
permittees, or other lessees.
In other words, the government has practically
reserved the rights to use the road to promote its
varied activities. Since, as above shown, the road in
question cannot be considered as an improvement
which belongs to Appellee, although in part is for its
benefit, it is clear that the same cannot be the
subject of assessment within the meaning of section
2 of Commonwealth Act No. 470.
We are not oblivious of the fact that the present
assessment was made by Appellant on the strength
of an opinion rendered by the Secretary of Justice,
but we find that the same is predicated on
authorities which are not in point, for they refer to
improvements that belong to the lessee although
constructed on lands belonging to the government.
It is well settled that a real tax, being a burden upon
the capital, should be paid by the owner of the land
and not by a usufructuary. Appellee is but a partial
usufructuary of the road in question.
ARTICLE 600
1. See case digest of Maxima Hemedes vs. CA
(Case 1 of Article 566)
ARTICLE 603
1. G.R. No. L-3314. January 3, 1907.
ANSELMO CHINGEN, Plaintiff-Appellant, v. TOMAS
ARGUELLES AND WIFE, ET AL., Defendant-Appellees.
1. WILLS; HEIRS; SURVIVING SPOUSE, RIGHTS OF;
USUFRUCT. The right of usufruct in the estate of a
deceased spouse to which the surviving widower is
entitled, who is in addition an heir under the will of
his deceased wife, is not superior and he is not
entitled to greater privileges than other coheirs,
because the object of the law is to equalize the
condition of the heirs and that of the surviving
spouse with the right of usufruct.
2. ID.; ID.; ID. The usufructuary right in one-half of
the estate of a deceased person who leaves
neither legitimate ascendants nor descendants is
extinguished ipso facto by the merger of such
usufructuary right and ownership in one person
whom concur the status of widower and heir. (Art.
513, par. 3, Civil Code.)
3. ID.; ID.; ID.; ID. The widower who receives his
share as an heir under the will from one-half of the
estate of his deceased wife, without legitimate
ascendants or descendants, has no right to enjoy
the usufruct of the other half of the property to the
prejudice of his coheirs and the various legatees
under the will.
FACTS:
On October 25, 1905, Anselmo Chingen, filed a
complaint in the Court of First Instance of the city of
Manila, to recover one half of the jewels and one
half of the rent accruing from a certain property
16 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
(4,170 pesos, or a half of 8,340 pesos), which said
property, as well as the jewels in question, were
delivered as part of their legacies to the legatees,
Carmen Reyes, Jose Reyes, and Pedro Reyes, under
the will of the deceased Raymunda Reyes.
The said legacies consisted of a house numbered 8,
10, 12, and 14 Calle Claviera, district of Binondo,
two combs set with diamonds, and pearls,
respectively a gold ring with three diamonds each,
and a gold ring with one large and several
diamonds.
Chingen alleged that Tomas Arguelles et al refused
to pay half of the earnings derived from the
property left by the testatrix and the legacies
referred to belonging to him as the surviving
husband of the deceased, who died without
legitimate heirs, ascendants or descendants all
efforts to collect the sum thus claimed having
failed.
However, Tomas Arguelles et. al argued that the
value of which legacies did not exceed one half of
the estate of which she could freely dispose, and
therefore were not subject to the right of usufruct
which ordinarily would belong to Chingen.
Chingen, asserted that if the value of the said
legacies was not included in the estate the right of
usufruct which the surviving husband and upon one
half of the property left by the testatrix would be
jeopardized.
Lower Court entered judgment in favor of the
Tomas Arguelles et.al and dismissing the said
complaint.
Upon appeal, Chingen insist for his claims to
recover the remainder of the property which
belonged to him in usufruct under the law as the
surviving spouse of the testatrix, citing to this end
article 815 of the Civil Code.
The main reliance of Chingen is that the testatrix,
did not assign to him in her will the entire portion
which belonged to him; that is to say, one half of
the estate in usufruct.
ISSUES:
a. WON Chingen is entitled to the usufruct of
one half of the estate YES
b. WON the said usufructuary right in the one-
half of the estate of the decedent is
subsisting NO, EXTINGUISHED ipso facto by
the merger of such usufructuary rights and
ownership in one person whom the status of
WIDOWER and HEIR
RULING:
1. Article 837 of the Civil Code provides:
"If the testator should have neither legitimate
ascendants nor descendants, the surviving spouse
shall be entitled to one half of the estate also in
usufruct."
The testatrix left no legitimate descendants or
ascendants. Her surviving husband was therefore
entitled to the usufruct of one half of the estate.
Where the surviving husband is also an heir under
the will, as happens in the present case, the
undivided portion assigned to him as such heir in
accordance with the terms of the will shall be
considered as an integral part of the one-half of the
estate subject to the right of usufruct of such
husband for the reason that the latter's right, even
though he may be also an heir under the will, is not
superior, and he is not entitled to greater privileges
than other coheirs.
The object of the law is to equalize the condition of
the heirs and that of the surviving spouse who
received nothing in addition to his usufructuary
portion, and the plaintiff is entitled to a share of the
estate property, not as surviving spouse, but as an
heir, which share he has already received and
accepted.
It is not just that the plaintiff, Anselmo Chingen, after
receiving the property to which he was entitled as
such testamentary heir of his deceased wife, should
be also entitled to the usufruct of the other half of
the estate in which the property so received by him
was not included.
2. The property of the estate of his deceased
wife having been divided in two equal parts, the
property to which the Chingen was entitled as an
heir under the will should have been taken out of
the one half, subject to the usufruct of the surviving
spouse. This done, the usufruct, of course, is
extinguished ipso facto by the merger of such right
of usufruct and ownership in the same person, as
provided in paragraph 3 of article 513 of the Civil
Code.
It is absurd and contrary to all justices that the
Chingen should receive his share as an heir under
the will from one half of the estate and be further
entitled to the usufruct of the other half to the
prejudice of his coheir and the various legatees
under the will. There is no law or article of the code
which authorizes such an iniquitous privilege.
In any event the portion of the estate subject to the
usufruct must be claimed from the heir or heirs in
due time, and in the manner and form prescribed
by law.
It appears from the record that the property of the
estate was liquidated, distributed, and apportioned
among the heirs and legatees under the will, the
plaintiff, as the executor and heir of his deceased
wife, and attorney Nazario Constantino, guardian
ad litem of the minor heir, Lamberto Reyna, being
the only ones who took part in the proceedings
were duly approved by the court.
The property of the estate having been disturbed,
and the Chingen having disposed of some of the
most valuable property awarded to him in said
partition, and the properties having been actually
delivered to the respective legatees, a new
liquidation or settlement of the estate cannot be
17 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
had, and the partition made under the exclusive
direction of the plaintiff as executor of the will of the
deceased cannot be set aside, since the same is
expressly prohibited by the provisions of article 1078
of the Civil Code.
Moreover, it has not been shown that the property
bequeathed to the defendant legatees was
included in the one half of the husband. The mere
fact that the plaintiff delivered the said property to
the legatees absolutely and unconditionally shows
conclusively that his right of usufruct is intact and
has not been injured in any way.
Finally, the legacy to which this action relates
consists of a house and certain jewels and is
according to the will, an unconditional legacy
without any fixed period, and that the property thus
bequeathed is specified and described as being of
the exclusive ownership of the testatrix, the
legatees were entitled to the property bequeathed
to them, and as owners, they were also entitled to
the fruits and earnings and any increase thereof, as
well as liable for any loss or impairment thereof.
(Arts. 881, 882, Civil Code.)
ARTICLE 609
1. G.R. No. L-51333 February 19, 1991
RAMONA R. LOCSIN, accompanied by her husband RENATO L.
LOCSIN; TERESITA R. GUANZON, accompanied by her husband
ROMEO R. GUANZON; CELINA R. SIBUG accompanied by her
husband CARLOS V. SIBUG; MA. LUISA R. PEREZ, accompanied by
her husband JOSE V. PEREZ; EDITHA R. YLANAN, accompanied by
her husband CARLOS W. YLANAN; and ANA MARIE R. BENEDICTO,
accompanied by her husband JOSE LUIS U. BENEDICTO,
petitioners,
vs.
HONORABLE JUDGE VICENTE P. VALENZUELA, Judge of the Court
of First Instance of Negros Occidental, Branch III and SPOUSES
JOSEPH SCHON and HELEN BENNETT SCHON, respondents.
G.R. No. L-52289 February 19, 1991
RAMONA R. LOCSIN, accompanied by her husband RENATO R.
LOCSIN; TERESITA R. GUANZON, accompanied by her husband
ROMEO G. GUANZON; CELINA R. SIBUG, accompanied by her
husband CARLOS V. SIBUG; MA. LUISA R. PEREZ, accompanied by
her husband JOSE V. PEREZ; EDITHA R. YLANAN, accompanied by
her husband CARLOS W. YLANAN; and ANA MARIE R. BENEDICTO,
accompanied by her husband JOSE LUIS U. BENEDICTO,
petitioners,
vs.
CARLOS PANALIGAN, AMADO MARQUEZ, HERBERT PEDROS,
ANTONIO FELICIANO, JR., HUGO AGUILOS, ALBERTO GUBATON,
JULIA VDA. DE ESQUELITO, SERAFIN JANDOQUELE, SEREFIAS
ESQUESIDA, CARLOS DELA CRUZ, ELISEO GELONGOS, ESPINDION
JOCSON, SALVADOR MUNUN, ULFIANO ALEGRIA, and IRINEO
BALERA, and the Spouses JOSEPH SCHON and HELEN BENNETT
SCHON respondents.
Mirano, Mirano & Associates Law Offices for petitioners.
Jose V. Valmayor and Samuel SM Lezama for respondents in
51333.
Ledesma, Guinez, Causing, Espino & Serftno Law Office for
private respondents in G.R. No. 51333.
Bonifacio R. Cruz for private respondents in G.R. No. 52289.
FACTS:
CONSOLIDATED CASES
Petitioners, Ramona R. Locsin, Teresita Guanzon,
Celia R. Sibug, Maria Rosa R. Perez, Editha Ylanan
and Ana Marie R. Benedicto were co-owners of a
large tract of agricultural land known as "Hacienda
Villa Regalado" located in Barrio Panubigan
Canlaon City, Negros Occidental. The tract of land
was covered by Transfer Certificate of Title No. T-494
and there more particularly described in the
following terms:
TRANSFER CERTIFICATE OF TITLE NO. T-494
A parcel of land . . . containing an area of THREE
MILLION THIRTY-THREE THOUSAND AND FORTY-EIGHT
(3,033,048) square meters, more or less.
A portion of this land, known as Lot No. 2-C-A-3 and
consisting of an area of 60.07464 hectares, was
subject to the lifetime usufructuary rights of
respondent Helen Schon. The bulk of this lot was
cultivated by the following lessees-tenants who
customarily delivered the rentals to Helen Schon:
On 22 October 1972, after the onset of the martial
law administration of former President Marcos,
Presidential Decree No. 27 was promulgated,
decreeing the "Emancipation of Tenants."
The tract of land owned in common by petitioners,
including the portion thereof subject to Helen
Schon's usufructuary rights, fell within the scope of
the "Operation Land Transfer".
Petitioners, sought the opinion of the DAR as to who
should be entitled to receive the rental payments
which continued to be made by the respondent
tenants to Helen Schon.
The DAR District Officer rendered an opinion on 13
May 1977 that the rental payments as of October
1972 were properly considered as amortization
payments for the land and as such should pertain
to the landowners and not to the usufructuary.
1. Civil Case No. 13828, Court of First Instance,
Negros Occidental.
On 22 May 1978, petitioners filed against spouses
Joseph and Helen Schon for collection of rentals
plus damages with prayer for preliminary injunction.
They sought to recover from the Schons all such
rentals or the money value thereof (the rental
payments which the respondent spouses had been
collecting from the tenants, beginning from 21
October 1972,) as constituting or forming part of the
amortization payments for the land to be made by
the tenants and prayed for injunction to prevent
respondents from collecting any further rental
payments from the tenants of the land involved.
Upon the other hand, in the Answer filed on 12 July
1978, the respondents Schon contended that upon
the assumption arguendo that the Court of First
Instance did have jurisdiction, Article 609 of the Civil
Code must in any case be applied by that court in
resolving the case.
2. CAR Case No. 76, Court of agrarian
Relations
18 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
On 13 October 1978, a second compliant was
lodged with the Court of Agrarian Relations, 11th
Judicial District, San Carlos City.
Petitioners impleaded as co-respondents of the
spouses Schon, the tenant who were cultivating the
land burdened with the usufruct of Helen Schon.
They prayed that the respondent tenants be
required to pay to petitioners (rather than to the
spouses Schon) all future rentals beginning with the
crop year of 1978 and every year thereafter, until
full payment of the amortization payment
computed by the DAR.
In their Answer, the respondents Schon once again
asserted lack of jurisdiction over the subject matter
of the case, this time on the part of the Court of
Agrarian Relations.
The respondent tenants, for their part, agreed with
the Schons that there was no tenancy relationship
existing in respect of the land cultivated by them,
since such land had already been brought within
the ambit of "Operation Land Transfer", and prayed
that the petitioners and the usufructuary be
required to litigate among themselves their
respective rights before the proper court.
Agrarian Court rendered a decision dismissing
petitioners' complaint in CAR Case No. 76,
declaring itself as bereft of jurisdiction to decide
that case.
In a Resolution dated 18 May 1989, the Court, after
declaring that jurisdiction over the two (2) cases
was lodged in the appropriate Regional Trial Court
by virtue of the provisions of Section 19 (7) of Batas
Pambansa Blg. 129, consolidate the two cases.
Locsin et. al insist that the payments made by
private respondent tenants to Helen Schon
beginning on 21 October 1972 should be
considered as amortization payments for the price
of the land and as such should belong to the
landowners and not to the usufructuary.
Upon the other hand, Helen Schon urges that those
amounts should pertain to her considering that her
rights as usufructuary persist during her lifetime and
have not been extinguished by operation of the
Land Reform Law.
Helen Schon further argues that assuming her
usufructuary rights had been extinguished, the
provisions of Article 609 of the Civil Code should be
applied, and that thereunder she would be entitled
either to replacement of the land burdened with her
usufruct (the fruits of which would then be payable
to her) or payment of legal interest on the amount
of the purchase price of the land.
ISSUE:
(1) WON the usufructuary rights of Helen Schon
was extinguished after the effectivity of Presidential
Decree No. 27 YES
RULING:
The SC ruled that the usufruct which had therefore
existed as a jus in re aliena (a right in the property
of another) in favor of Helen Schon was effectively
extinguished by Presidential Decree No. 27.
To hold, as Helen Schon apparently urges, that her
usufruct was not extinguished but rather remained
impressed upon the land passing on to the new
owners, would obviously defeat the very purpose of
the land reform statute. Presidential Decree No. 27
was enacted to "emancipate" the tenants from the
"bondage of the soil" by giving to tenants-farmers
ownership of the land which they were cultivating
upon the assumption that they would work harder
to improve their lot in life if they became
landowners rather than mere tillers of somebody
else's land.
To hold Helen Schon as entitled to continue
enjoying, as usufructuary, the natural or civil fruits of
Lot No. 2-C-A-3, would be to set at naught the
major purpose projected by Presidential Decree
No. 27 and maintained by Executive Order No. 228.
However, Helen Schon has not lost any and all rights
upon the promulgation of Presidential Decree No.
27. In a legal, technical sense, it may be difficult to
hold that Presidential Decree No. 27 resulted in the
lands brought within the scope of Operation Land
Transfer being "expropriated for public use", as this
term is used in Article 609 of the Civil Code, which
reads thus:
Art. 609. Should the thing in usufruct be
expropriated for public use, the owner shall be
obliged either to replace it with another thing of the
same value and of similar conditions, or to pay the
usufructuary the legal interest on the amount of the
indemnity for the whole period of the usufruct. If the
owner chooses the latter alternative, he shall give
security for the payment of the interest.
For it was not the Government or any of its
agencies which took over ownership of the land nor
was such land devoted subsequently to "public
use", since ownership was transferred directly from
former landowner to the tenant-tiller as new
landowner, for the use and benefit exclusively of
the new landowner.
While, however, Article 609 of the Civil Code may
not be strictly applicable, we believe that the
situation contemplated in Article 609 is sufficiently
close to that which resulted from application of
Presidential Decree No. 27 to the land here
involved. Bearing in mind that refusal to decide an
otherwise unavoidable issue upon the ground of
non liquet ("it is not clear") is not a permissible
response by a court where there is no provision of
law clearly and specifically applicable to the facts
at hand, the Court believe that Article 609 should
be applied to the present set of facts by analogy.
It follows that respondent Helen Schon, so long as
her rights as usufructuary persist under the
instrument which gave birth to such rights, would be
entitled to a replacement reasonably equivalent to
the land previously burdened with her usufructuary
19 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
right, or to legal interest on the amount of the
indemnity or cost of the land paid by private
respondent tenants-farmers and the Land Bank.
While the option or choice belongs to petitioners,
considering that Helen Schon had already received
part of the purchase price of the land previously
owned by petitioners from private respondent
tenants-farmers, and in the interest of expeditious
justice, we consider it the second alternative that
should be given effect.
Thus, from the monies that she actually received
from private respondent tenants-farmers on and
after 21 October 1972, respondent Helen Schon is
entitled to retain an amount equivalent to the legal
interest on said amounts for every year that the
usufruct would by its own terms have continued to
exist had it not been extinguished by operation of
Presidential Decree No. 27; the balance of such
amounts received by her shall be turned over to
petitioners.
She is also entitled to the same right in respect of
the balance of the price of the land petitioners
presumably received from the Land Bank.
OTHER ISSUES:
As between the naked owners and the
usufructuary, who should be entitled to the amounts
paid by the tenants beginning 21 October 1972?
Presidential Decree No. 27, the basic statute, the
tenant-farmer became owner of a family-size farm
of five (5) hectares or, if the land was irrigated,
three (3) hectares, and that the tenant-owner had
to pay for the cost of the land within fifteen (15)
years by paying fifteen (15) equal annual
amortization payments. Thus, it appears clear that
ownership over lands (like Lot No. 2-C-A-3)
subjected to Operation Land Transfer moved from
the registered owner (the old landowner) to the
tenants (the new landowners). The fifteen (15)
annual amortizations to be paid by the tenants-
owners were intended to replace the landholdings
which the old landowners gave up in favor of the
new landowners, the tenants-owners.
It follows that in respect of land subjected to
Operation Land Transfer, the tenants-farmers
became owners of the land they tilled as of the
effective date of Presidential Decree No. 27, i.e., 21
October 1972. Pending full payment of the cost of
the land to the old landowner by the Land Bank of
the Philippines, the leasehold system was
"provisionally maintained" but the "lease rentals"
paid by the tenants-farmers prior to such full
payment by the Land Bank to the old landowner,
would be credited no longer as rentals but rather as
"amortization payments" of the price of the land,
the un-amortized portion being payable by the
Land Bank. In respect of lands brought within the
coverage of Operation Land Transfer, the leasehold
system was legally and effectively terminated
immediately on 21 October 1972 (notwithstanding
the curious statement in Department Circular No. 8
that it was "provisionally maintained"). It was in
respect of lands not yet subjected to the terms and
effects of Operation Land Transfer that the
leasehold system did continue to govern the
relationship between the "landowner and his
tenant-tillers".
The exemption of the old landowner from the
capital gains tax on the amortization payments
made to him by the tenants-purchasers, under
Presidential Decree No. 57 (supra), underscores the
fact, referred to above, that ownership or dominion
over the land moved immediately from landowner
to tenant-farmer, rather than upon completion of
payment of the price of the land. In general,
capital gains are realized only when the owner
disposes of his property.
We believe and so hold that Lot No. 2-C-A-3 having
been declared part of the land reform area and
subjected to Operation Land Transfer, the payments
made on and after 21 October 1972 by the private
respondent tenants-farmers constituted
amortization payments on the cost of the land that
they were required to pay under Presidential
Decree No. 27. These payments, therefore, legally
pertain to petitioners, the former landowners as part
of the compensation for the dominion over land of
which they were deprived by operation of
Presidential Decree No. 27. Those payments cannot
be characterized as rentals like those which had
been paid to Helen Schon as usufructuary prior to
the promulgation of Presidential Decree No. 27 and
prior to the effectivity of Operation Land Transfer.
2. G.R. No. L-44428 September 30, 1977
AVELINO BALURAN, petitioner,
vs.
HON. RICARDO Y. NAVARRO, Presiding Judge, Court
of First Instance of Ilocos Norte, Branch I and
ANTONIO OBEDENCIO, respondents.
Jurisprudence: No barter agreement for purposes of
transferring ownership can be inferred when it is
clear that the parties merely intended to transfer
material possession thereof
FACTS:
Spouses Domingo Paraiso and Fidela Q. Paraiso
were the owners of a residential lot of around 480
square meters located in Sarrat, Ilocos Norte.
On or about February 2, 1964, the Paraisos
executed an agreement entitled "BARTER" whereby
as party of the first part they agreed to "barter and
exchange" with spouses Avelino and Benilda
Baluran their residential lot with the latter's
unirrigated riceland situated in Sarrat, Ilocos Norte,
of approximately 223 square meters without any
permanent improvements, under the following
conditions:
1. That both the Party of the First Part and the
Party of the Second Part shall enjoy the material
possession of their respective properties; the Party
of the First Part shall reap the fruits of the unirrigated
riceland and the Party of the Second Part shall
have a right to build his own house in the residential
lot.
20 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
2. Nevertheless, in the event any of the
children of Natividad P. Obendencio, daughter of
the First Part, shall choose to reside in this
municipality and build his own house in the
residential lot, the Party of the Second Part shall be
obliged to return the lot such children with
damages to be incurred.
3. That neither the Party of the First Part nor the
Party of the Second Part shall encumber, alienate
or dispose of in any manner their respective
properties as bartered without the consent of the
other.
4. That inasmuch as the bartered properties
are not yet accordance with Act No. 496 or under
the Spanish Mortgage Law, they finally agreed and
covenant that this deed be registered in the Office
of the Register of Deeds of Ilocos Norte pursuant to
the provisions of Act No. 3344 as amended.
On May 6, 1975 Antonio Obendencio filed the
present complaint to recover the above-
mentioned residential lot from Avelino Baluran
claiming that he is the rightful owner of said
residential lot, it was donated on October 4, 1974
by Natividad Paraiso Obedencio, his mother and
that he needed the property for constructing his
house thereon.
Answering the complaint, Avelino Baluran alleged
(1) that the "barter agreement" transferred to him
the ownership of the residential lot in exchange for
the unirrigated riceland conveyed to plaintiff's
Predecessor-in-interest, Natividad Obedencio, who
in fact is still in On thereof, and
(2) that the plaintiff's cause of action if any had
prescribed.
Moreover, Baluran stated that since the execution
of the agreement of February 2, 1964, he was in
possession of the residential lot, paid the taxes of
the property, and constructed a house thereon with
and value of P250.00. 3
RTC: Obedencio is hereby declared owner of the
question, the Baluran is hereby ordered to vacate
the same.
On appeal Baluran raised the following issues;
I The lower Court erred in holding that the barter
agreement did not transfer ownership of the lot in
suit to the petitioner.
II The lower Court erred in not holding that the
right to re-barter or re- exchange of respondent
Antonio Obedencio had been barred by the
statute of limitation.
However, the resolution of this appeal revolves on
the nature of the undertaking contract of February
2, 1964 which is entitled "Barter Agreement."
MAIN ISSUE: Whether or not the contract was a
barter or usufruct - USUFRUCT
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.
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. Thus, in
the instant case, the use of the, term "barter" in
describing the agreement of February 2, 1964, is not
controlling.
The stipulations in said document are clear enough
to indicate that there was no intention at all 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.
(Condition No.1) In fact, under condition No. 3 of
the agreement, the parties retained the right to
alienate their respective properties which right is an
element of ownership.
With the material possession being the only one
transferred, all that the parties acquired was the
right of usufruct which in essence is the right to
enjoy the Property of another.
Under the document in question, spouses Paraiso
would harvest the crop of the unirrigated riceland
while the other party, Avelino Baluran, could build a
house on the residential lot, subject, however, to
the condition, that when any of the children of
Natividad Paraiso Obedencio, daughter of spouses
Paraiso, shall choose to reside in the municipality
and build his house on the residential lot, Avelino
Baluran shall be obliged to return the lot to said
children "With damages to be incurred." (Condition
No. 2 of the Agreement) Thus, the mutual
agreement 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. The right of
"material possession" granted in the agreement of
February 2, 1964, ends if and when any of the
children of Natividad Paraiso, Obedencio
(daughter of spouses Paraiso, Party of the First Part)
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 the spouses Paraiso
but is Part dependent on the will of third persons
Natividad Obedencio and any of her children
the same is valid.
When there is nothing contrary to law, morals, and
good customs Or Public Policy in the stipulations of
a contract, the agreement constitutes the law
between the parties and the latter are bound by
the terms thereof.
Art. 1306 of the Civil Code states:
Art. 1306. The contracting parties may
establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided
21 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
they are not contrary to law, Morals, good customs,
public order, or public policy.
Contracts which are the private laws of the
contracting parties, should be fulfilled according to
the literal sense of their stipulations, if their terms are
clear and leave no room for doubt as to the
intention of the contracting parties, for contracts
are obligatory, no matter what their form may be,
whenever the essential requisites for their validity
are present.
OTHER ISSUES:
WON the right to re-barter or re- exchange of
respondent Antonio Obedencio had been barred
by the statute of limitation
The submission of petitioner is untenable. Art. 1606
of the Civil Code refers to conventional redemption
which petitioner would want to apply to the present
situation. However, as We stated above, the
agreement of the parties of February 2, 1964, is not
one of barter, exchange or even sale with right to
repurchase, but is one of or akin the other is the use
or material ion or enjoyment of each other's real
property.
Usufruct may be constituted by the parties for any
period of time and under such conditions as they
may deem convenient and beneficial subject to
the provisions of the Civil Code, Book II, Title VI on
Usufruct. The manner of terminating or extinguishing
the right of usufruct is primarily determined by the
stipulations of the parties which in this case now
before Us is the happening of the event agreed
upon. Necessarily, the plaintiff or respondent
Obedencio could not demand for the recovery of
possession of the residential lot in question, not until
he acquired that right from his mother, Natividad
Obedencio, and which he did acquire when his
mother donated to him the residential lot on
October 4, 1974. Even if We were to go along with
petitioner in his argument that the fulfillment of the
condition cannot be left to an indefinite, uncertain
period, nonetheless, in the case at bar, the
respondent, in whose favor the resolutory condition
was constituted, took immediate steps to terminate
the right of petitioner herein to the use of the lot.
Obedencio's present complaint was filed in May of
1975, barely several months after the property was
donated to him.
WON the petitioner has the right to recover
damages
We have no basis for awarding damages to
petitioner.
However, the Court applied Art. 579 of the Civil
Code and hold that petitioner will not forfeit the
improvement he built on the lot but may remove
the same without causing damage to the property.
Art. 579. 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 its form or
substance; but he shall have no right to be
indemnified therefor. He may, however. He may,
however, removed such improvements, should it be
possible to do so without damage to the property.
In view of our ruling that the "barter agreement" of
February 2, 1964, did not transfer the ownership of
the respective properties mentioned therein, it
follows that petitioner Baluran remains the owner of
the unirrigated riceland and is now entitled to its
Possession. With the happening of the resolutory
condition provided for in the agreement, the right of
usufruct of the parties is extinguished and each is
entitled to a return of his property. It is true that
Natividad Obedencio who is now in possession of
the property and who has been made a party to
this case cannot be ordered in this proceeding to
surrender the riceland. But inasmuch as reciprocal
rights and obligations have arisen between the
parties to the so-called "barter agreement", we hold
that the parties and for their successors-in-interest
are duty bound to effect a simultaneous transfer of
the respective properties if substance at justice is to
be effected.
ARTICLE 611
G.R. No. L-21809. January 31, 1966.
GIL P. POLICARPIO, ET AL., Plaintiffs-Appellees, v.
JOSE V. SALAMAT, ET AL., Defendants, VICENTE
ASUNCION, ET AL., Defendants-Appellants.
1. USUFRUCT; DEATH OF ONE OF USUFRUCTUARIES
BEFORE END OF USUFRUCT; ACCRETION AMONG
USUFRUCTUARIES; EXCEPTION. There is accretion
among usufructuaries who are constituted at the
same time when one of them dies before the end
of the usufruct. The only exception is if the usufruct is
constituted in a last will and testament and the
testator makes a contrary provision. In the instant
case, there is none. On the contrary, the testatrix
constituted the usufruct in favor of the children of
her three cousins with the particular injunction that
they are the only ones to enjoy the same as long as
they live, from which it can be implied that, should
any of them die, the share of the latter shall accrue
to the surviving ones. These provisions of the will are
clear. They do not admit of any other interpretation.
FACTS:
In a duly probated last will and testament of one
Damasa Crisostomo, she gave the naked
ownership of a fishpond owned by her to her sister
Teodorica de la Cruz while its usufruct to the
children of her cousins Antonio Perez, Patricia
Vicente and Canuto Lorenzo. The fishpond is
situated at a barrio of Hagonoy, Bulacan.
The children of Antonio Perez, Patricia Vicente and
Canuto Lorenzo turned out to be fourteen, namely:
Maria, Pio, Fructuosa, Graciano, Vicente, Victoria,
Teodora, and Juan, all surnamed Perez, Apolonio
Lorenzo, Bonifacio Lorenzo, Vicente Asuncion,
Francisco Lorenzo, Leoncio Perez and Servillano
Perez.
22 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
On the other hand, Teodorica dela Cruz, the naked
owner, bequeathed in her will all her rights to the
fishpond to Jose V. Salamat.
The fourteen usufructuaries leased the fishpond first
to one Gil P. Policarpio who used to give them
proportionately the usufruct corresponding to them.
During the term of the lease, however, three of the
usufructuaries died, namely, Francisco Lorenzo,
Leoncio M. Perez and Servillano Perez, and so, upon
their death, both the naked owner and the
remaining usufructuaries claimed the shares
corresponding to the deceased usufructuaries in
the amount of P10, 714.26 and because of these
conflicting claims, the lessee withheld said amount.
Subsequently, on May 31, 1962, the surviving
usufructuaries leased the fishpond to one Batas
Riego de Dios who came to know of the existing
conflicting claims, and not knowing to whom of the
claimants the shares of the deceased
usufructuaries should be paid, said lessee was also
constrained to withhold the corresponding part of
the usufruct of the property.
So, on November 15, 1962, the two lessees
commenced the present action for interpleader
against both the naked owner and surviving
usufructuaries to compel them to interplead and
litigate their conflicting claims.
Jose V. Salamat avers that he is the successor-in-
interest of Teodorica dela Cruz and as such he is
entitled to the shares corresponding to the three
deceased usufructuaries in as much as the usufruct
in their favor was automatically extinguished by
death and became merged with the naked owner.
The surviving usufructuaries, on the other hand,
adhere to the theory that since the usufructuaries
were instituted simultaneously by the late Damasa
Crisostomo, the death of the three usufructuaries
did not extinguish the usufruct; hence, the surviving
usufructuaries are entitled to receive the shares
corresponding to the deceased usufructuaries, the
usufruct to continue until the death of the last
usufructuary.
RTC: The Court ruled in favor of Jose V. Salamat. He
is entitled to the sum of P10, 714.26 representing the
shares of the three deceased usufructuaries in the
lease rental due.
The surviving usufructuaries took the present
appeal.
Appellants argue that it is the surviving
usufructuaries who are entitled to receive the
shares of the deceased by virtue of Article 611 of
the Civil Code which provides:
"A usufruct constituted in favor of several persons
living at the time of its constitution shall not be
extinguished until the death of the last survivor."
On the other hand, appellee (Jose Salamat)
contends that the most a usufruct can endure if
constituted in favor of a natural person is the
lifetime of the usufructuary, because a usufruct is
extinguished by the death of the usufructuary unless
a contrary intention clearly appears (Article 603,
Civil Code).
Hence, appellee argues, when the three
usufructuaries died, their usufructuary rights were
extinguished and whatever rights they had to the
fruits reverted to the naked owner.
ISSUE:
Whether the eleven surviving usufructuaries of the
fishpond in question are the ones entitled to the
fruits that would have corresponded to the three
deceased usufructuaries, or the naked owner Jose
V. Salamat.
- The eleven surviving usufructuaries are entitled to
the shares of the three deceased usufructuaries
RULING:
If the theory of appellee in the sense that the death
of the three usufructuaries has the effect of
consolidating their rights with that of the naked
owner were correct, Article 611 of the Civil Code
would be superfluous, because Article 603 already
provides that the death of the usufructuary
extinguishes the usufruct unless the contrary
appears.
Furthermore, said theory would cause a partial
extinction of the usufruct, contrary to the provisions
of Article 611 which expressly provides that the
usufruct shall not be extinguished until the death of
the last survivor. The theory of appellee cannot,
therefore, be entertained.
The well-known Spanish commentators on the
counterpart of Article 611 we have copied above
which implicitly provides that the share of a
usufructuary who dies in the meantime inures to the
benefit of the surviving usufructuaries, also uphold
the view we here express.
It, therefore, appears that the Spanish
commentators on the subject are unanimous that
there is accretion among usufructuaries who are
constituted at the same time when one of them dies
before the end of the usufruct. The only exception is
if the usufruct is constituted in a last will and
testament and the testator makes a contrary
provision. Here there is none.
On the contrary, the testatrix constituted the
usufruct in favor of the children of her three cousins
with the particular injunction that they are the only
ones to enjoy the same as long as they live, from
which it can be implied that, should any of them
die, the share of the latter shall accrue to the
surviving ones. These provisions of the will are clear.
They do not admit of any other interpretation.
ARTICLE 612
1. G.R. No. L-4452 October 1, 1908
JUANA PICHAY, plaintiff-appellee,
23 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
vs.
EULALIO QUEROL, ET AL., defendants-appellants.
FACTS:
Juana Pichay, conveyed to the defendants, Eulalio
Querol, et al an undivided one-third interest in
twenty- five parcels of land situated in the Province
of Ilocos Sur, as payment of a debt of P1,500 which
she owed them.
The contract by which this conveyance was made
contained the following clause:
Third. The one-third part of these lands belong to
me, it being my share in the inheritance left by my
deceased parents; but I have requested may said
creditors to allow me to enjoy the usufruct of the
same until my death, notwithstanding the fact that I
have conveyed the said lands to them in payment
of my debt, and I bind myself not to sell, mortgage,
or leave the said lands as inheritance to any
person.
Querol et al, claimed that this clause above quoted
gave plaintiff no right of usufruct in the land, saying
that it appears that she only asked for this right and
it does not appear that the defendants gave it to
her.
Moreover, the owners of the twenty- five parcels of
land made a partition thereof among themselves,
in which the Pichay took no part, and in this
partition certain specific tracts of land were
assigned to the defendants as the third to which
they were entitled by reason of the conveyance
from the plaintiff to them.
They have been in possession of the tracts so
assigned to them in partition since the date thereof,
and are now in such possession, and have refused
to recognize in the plaintiff any right of usufruct
therein.
Pichay brought this action against the Querol et al,.
The Court rendered the following judgment:
(1) That all the lands described in the complaint be
delivered to Juana Pichay for administration;
(2) that Juana Pichay has a right of usufruct in a
third party of the said lands until her death;
(3) that the partition of the said lands, made by the
co-owners of Juana Pichay cannot affect the latter;
(4) Eulalio Querol is hereby directed to deliver to
Juana Pichay two crops from the third part of the
lands in question, or the equivalent thereof, taking
as a basis the present crop that is, the crop to be
harvested within a short time and
(5) Juana Pichay is sentence to indemnify Eulalio
Querol in the sum of P300 on account of the past
suit, without costs.
RELEVANT ISSUE: #2
Whether or not the petitioner can validly invoke her
right of usufructuary as stated in the clause of their
agreement. YES
RULING:
The petitioner is entitled for usufructuary rights. The
defendants and appellants claim that this clause
above quoted gave plaintiff no right of usufruct in
the land, saying that it appears that she only asked
for this right and it does not appear that the
defendants gave it to her. This contention cannot be
sustained. The only reason for inserting this clause in
the contract was for the purpose of securing to the
plaintiff the right which is therein set out. The form of
the words used is not sufficient to defeat this
purpose.
OTHER ISSUES: #3
1. The first proposition contained in this
judgment finds no support in the record,
and there is nothing therein to show that the
plaintiff had any acquired right to the
administration of the lands described in the
complaint.
2. The second proposition finds its support in
the record if it is limited to the lands which
were assigned to the defendants in
partition.
3. The third proposition cannot be supported.
Article 490 of the Civil Code is as follows:
ART. 490. The usufructuary of part of a thing held in
common shall exercise all the rights corresponding
to the owner thereof with regard to the
administration and collection of fruits or interests.
Should the community cease by reason of the
division of the thing possessed in common, the
usufruct of the part awarded to the owner of co-
owner shall appertain to the usufructuary.
ISSUE: Whether or not the usufructuary is bound by
the partition made by the owners of the undivided
property although he took no part therein.
HELD:
The usufructuary shall be bound by the partition
made by the owners of the undivided property
although he took no part in the partition but the
naked owner to whom the part held in usufruct has
been allotted must respect the usufruct. The right of
the usufructuary is not affected by the division but is
limited to the fruits of said pat allotted to the co-
owner.
4. As to the fourth proposition, the agreed
statement of facts shows that, while the
defendants are in possession of the tracts
which had been assigned to them, they
received the crops for only two years; that
the crop for the year 1906 amounted to 14
uyones and 13 manojos, of the value of P4
for each uyon, and that the crop of 1907
amounted to 15 uyones and 4 manojos, of
the value of P6.25 for each uyon. These are
the only amounts which the plaintiff is
entitled to recover.
24 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
5. As to the fifth proposition, while it appears
that the plaintiff excepted to the judgment,
and stated that she desired to present a bill
of exceptions, yet she is in fact did not
present any. The error, therefore, assigned
by her with reference to this fifth proposition
cannot be considered.
2. G.R. No. L-39187 January 30, 1982
ANULINA L. VDA. DE BOGACKI petitioner,
vs.
HON. SANCHO Y. INSERTO Presiding Judge, Branch
1, Court of First Instance of Iloilo, THE PROVINCIAL
SHERIFF OF ILOILO, and MA. EMMA LUZ BOGACKI
respondents.
FACTS:
The private respondent, Maria Emma Luz Bogacki, is
the owner of four parcels of land situated in Iloilo
City, and more particularly known as Lots 72-B, 591,
73, and 72-A of the Cadastral Survey of Iloilo over
which her mother, herein petitioner Anulina
Ledesma Vda. de Bogacki has a usufruct, covering
one-third (1/3) of one-half (1/2) each of the said
parcels of land or equivalent to one-sixth (1/6) of
the share pertaining to the deceased Cesar
Bogacki, Jr.
Due to a misunderstanding, Maria Emma Bogacki,
left the home for her mother and Anulina took
possession of all these properties exclusively for
herself, without sharing with Maria Emma Luz the
rentals she obtained from the said properties.
As a consequence, Maria Emma Luz filed an action
for partition with the Court of First Instance of Iloilo
against her mother Anulina "to define the portions
over which the defendant may exercise her
usufructuary rights over the four parcels of land, Lots
72-B, 591, 73 and 72-A.
The Court ordered the defendant, Anulina Ledesma
Vda. de Bogacki to limit her right of usufruct to one-
sixth (1/6) each of all these portions of the land and
orders her to turn over to the plaintiff 5/6 of all that
she had previously collected from the lots not
beyond ten years and conservatively appraised at
P50.00 a month from 1959 until the filing of this case
and an equivalent of said amount from date of
judgment.
No appeal was taken from said decision and a writ
of execution was issued on March 3, 1971.
Since no tangible assets or properties were
available to satisfy the money judgment, the
plaintiff therein asked the Court that a levy be
made on the usufructuary rights of the defendant.
The defendant opposed the motion upon the
ground that her usufructuary right is one created by
law as a surviving spouse and hence, exempt from
execution for family reasons.
The usufructuary rights were subsequently sold to
the judgment creditor, Maria Emma Luz Bogacki, as
the highest bidder thereof, for P6, 300.00.
Anulina Ledesma Vda. de Bogacki filed a motion
for the reconsideration but her motion was denied.
Maria Emma Luz, filed a motion for the issuance of
a writ of possession, which was granted by the
respondent Judge on August 5, 1974.
Hence, the instant recourse for the annulment of
the order of August 5, 1974, as well as the levy on
execution and the sale at public auction of the
petitioner's usufructuary rights, and to restrain the
respondents from dispossessing her of the said
usufruct.
The petitioner claimed that her usufructuary rights
are exempt from execution for the reasons that: (1)
a usufruct of a surviving spouse cannot be
alienated for family reasons pursuant to Art. 321 of
the Civil Code; (2) her usufruct, already confined to
a single area equivalent to 1/6 of the total area of
the lots on which she has a usufruct and where she
had built a residential house, is a homestead within
the purview of Sec. 12 (a) of Rule 39, Rules of Court;
and (3) her usufructuary rights partake of the nature
and character of such personal relations as in the
right to receive legal support, government pension
and gratuity, as provided for under Sec. 12(1) of
Rule 39.
The petitioner further claimed that her usufruct
cannot be levied on execution, much less sold at
public auction, which, in effect, would extinguish it
in a manner not according to the modes for
extinguishing a usufruct provided for under Art. 603
of the Civil Code.
ISSUE:
WON a levy be made on the usufructuary rights and
subsequently be sold at an execution sale/public
auction - YES
RULING:
The Court had ruled that the usufruct of a widow
may be transferred, assigned or otherwise disposed
of by her as she may please, like any other
hereditary property, and hence, an interest in real
property which can be sold upon execution.
The grounds relied upon by the petitioner in resisting
the levy and sale on execution of her usufructuary
rights are devoid of merit.
The petitioner claimed that her usufruct cannot be
alienated for family reasons pursuant to Article 321
of the Civil Code. This article of the Civil Code,
however, cannot be invoked by the petitioner
because the usufructuary rights mentioned in this
article are those enjoyed by parents over the
property of their unemancipated children under
their custody, and not those enjoyed by the
petitioner which are those of a widow, constituted
on the property of her late husband as her share in
the estate of the latter.
The petitioner also claimed that her usufruct, which
she had confined to a single area of about 500
25 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
square meters, equivalent to 1/6 of the total area of
the lots of the private respondent on which she has
a usufruct, and where she had constructed a
residential house, is a homestead and therefore,
exempt from execution according to Sec-12(a),
Rule 39 of the Rules of Court.
But, Section 12(a) of Rule 39 cannot be invoked by
the petitioner. Under this section, the debtor's family
home constituted in accordance with the Civil
Code, or in the absence thereof, the homestead in
which he resides, and the land necessarily used in
connection therewith, both not exceeding in value
P3, 000.00, shall be exempt from execution.
In the instant case, however, the execution was not
enforced against the petitioner's "homestead" or
residential house, but on her usufructuary rights over
the lots belonging to the private respondent. The
residential house constructed by the petitioner on
the land of the private respondent is but an
improvement on the property which the
usufructuary may remove upon extinguishment of
the usufruct, if it be possible to do so without
damage to the property.
Section 12 (1) of Rule 39 is not also applicable
because the property levied and sold on execution
is not the right to receive legal support or money or
property obtained as such support, or any pension
or gratuity from the government. The right to
support, unlike the usufruct of a widow, is a personal
right essential to the life of the recipient, so that it
cannot be subject to attachment or execution.
On the other hand, the usufruct of the widow, which
was not reincorporated in the new Civil Code,
maybe transferred or otherwise disposed of by her,
as she may please, like any other hereditary
property.
Moreover, it appears that the levy on execution
was made on March 26, 1971, 19 and the
petitioner's usufructuary rights were sold at a public
auction sale on July 21, 1971. The petitioner,
however, took no action thereon such that the
orders issued have already become final and
executory when she filed the instant petition. It is
now too late to review the proceedings made
therein.
It results that there was no abuse of discretion
committed in the levy and sale on execution of the
petitioner's usufructuary rights to satisfy a judgment
against her.
3. G.R. No. L-56249 May 29, 1987
IN THE MATTER OF THE TESTATE ESTATE OF THE
DECEASED REV. FATHER TEODORO ARANAS,
RAMONA B. VDA. DE ARANAS, ADELIA B. ARANAS-
FERNANDEZ, HEIRS OF THE LATE RODULFO B. ARANAS,
ETC., ET AL., petitioners, vs.
VICENTE B. ARANAS AND HON. LUIS B. MANTA,
respondents.
FACTS:
Fr. Teodoro Aranas, a priest of the Roman Catholic
Church, died on January 19, 1953. He had
executed on June 6, 1946 his Last Will and
Testament which was admitted to probate on
August 31, 1956. In said Last Will and Testament, Fr.
Aranas stipulated the following:
A. The return to Aniceto Aranas or his heirs of all
properties acquired by Fr. Aranas from his brother
Aniceto Aranas and ten (10) parcels of land
described in the Will inherited by the testator from
his parents.
B. The return to Carmelo Aranas or his heirs of
all properties acquired by Fr. Aranas from his
brother Carmelo Aranas and ten (10) parcels of
land described in the Will inherited by the testator
from his parents.
C. The special administration of the remainder
of the estate of the testator by Vicente Aranas, a
faithful and serviceable nephew and designating
him also as recipient of 1/2 of the produce of said
properties after deducting the expenses for the
administration and the other 1/2 of the produce to
be given to the Catholic Church for the eternal
repose of the testator's soul. Said pertinent provision
1 reads as follows:
Fourth. It is my will that the lands I had bought from
other persons should be converged and placed
under a "special administrator."
The special administrator of these lands, for his
office, should receive one half of all the produce
from which shall be deducted the expenses for the
administration, and the other half of the produce
should be received by the Roman Catholic Church
and should be spent for my soul, Vicente B. Aranas
(Tingting), because he is a faithful and serviceable
nephew, should be the first special administrator of
said properties, without bond, until his death or until
he should not want to hold the said office anymore.
Anyone of the sons of my brother Carmelo Aranas
can hold the said office of special administrator,
and none other than they. Their father, my brother
Carmelo Aranas shall be the one to decide who
among them shall hold the said office, but upon
the death of my said brother Carmelo Aranas, his
said sons will have power to select the one among
them ourselves. The special administration is
perpetual.
On November 17, 1977, the lower court ruled, upon
petitioners' "Motion for the Declaration of Heirs and
Partition; and for Removal of the Administrator
(Vicente Aranas) and/or for his Permission to Resign,
and appointment of His Successor" that the
"perpetual inalienability and administration of the
portion of the estate of the late Rev. Fr. Teodoro
Aranas, administered by Vicente Aranas, is null and
void after twenty years from January 19, 1954 and
declared in the same order the heirs of the late Fr.
Aranas.
However, the above said Order was subsequently
set aside upon the "Urgent Motion for
26 | A r t i c l e 5 6 2 A r t i c l e 6 1 2 U S U F R U C T
Reconsideration and to Declare Testate and
Intestate Heirs of the late Fr. Teodoro Aranas," filed
by the administrator Vicente Aranas on the
allegation that said order was violative of due
process and without legal and factual basis
because only the issue for the removal of the
administrator was heard and not the matter of the
declaration of heirs.
Thus, the Order dated November 17, 1977 is "set
aside and in the interest of justice, reopened in
order that other heirs, successors-in-interest of Felino
Aranas, could likewise assert their claims, as in the
case of the heirs of Aniceto Aranas and Carmelo
Aranas."
Their MR denied, petitioners raised in their appeal,
the following issue that the lower court erred in
setting aside its order dated November 17, 1977
and in not applying the provisions on Usufruct of the
New Civil Code with respect to the properties
referred to as Group "C" in the Last Will and
Testament.
The court ruled in its questioned order that this
particular group of properties (Group "C") is subject
to the following:
1. Remunerative legacy by way of usufruct of
the net proceeds of 1/2 of the estate after
deducting expenses for administration in favor of
Vicente Aranas, during his lifetime and shall
continue an administrator of the estate, and, who,
upon his death or refusal to continue such usufruct,
may be succeeded by any of the brothers of the
administrator as selected by their father, Carmelo
Aranas, if still alive or one selected by his sons if, he,
Carmelo, is dead; Pursuant to the Will. (Article 562,
563, 564 and 603 of the New Civil Code).
2. Legacy in favor of the Roman Catholic
Church, particularly the Archbishop diocese of
Cagayan de Oro City Represented by the
Reverend Archbishop Patrick H. Cronin over one-
half of the proceeds of the properties under Group
"C." (Article 603, New Civil Code) and to last for a
period of Fifty years from the effective date of the
legacy, Article 605, New Civil Code).
Assailing the aforementioned ruling, petitioners rely
heavily on the doctrine laid down in Art. 870 of the
New Civil Code to wit:
Art. 870. The dispositions of the testator declaring all
or part of the estate inalienable for more than
twenty years are void.
ISSUE: Whether or not the designation of Vicente as
special administrator or his usufructuary rights is
perpetual NO, it has limitations
RULING:
A cursory reading of the English translation of the
Last Will and Testament shows that it was the
sincere intention and desire of the testator to
reward his nephew Vicente Aranas for his faithful
and unselfish services by allowing him to enjoy one-
half of the fruits of the testator's third group of
properties until Vicente's death and/or refusal to
act as administrator in which case, the
administration shall pass to anyone chosen by
Carmelo Aranas among his sons and upon
Carmelo's death, his sons will have the power to
select one among themselves.
Vicente Aranas therefore as a usufructuary has the
right to enjoy the property of his uncle with all the
benefits which result from the normal enjoyment (or
exploitation) of another's property, with the
obligation to return, at the designated time, either
the same thing, or in special cases its equivalent.
This right of Vicente to enjoy the fruits of the
properties is temporary and therefore not perpetual
as there is a limitation namely his death or his
refusal.
Likewise his designation as administrator of these
properties is limited by his refusal and/or death and
therefore it does not run counter to Art. 870 of the
Civil Code relied upon by the petitioners.
Be it noted that Vicente Aranas is not prohibited to
dispose of the fruits and other benefits arising from
the usufruct.
Neither are the naked owners (the other heirs) of
the properties, the usufruct of which has been given
to Vicente Aranas prohibited from disposing of said
naked ownership without prejudice of course to
Vicente's continuing usufruct.
To void the designation of Vicente Aranas as
usufructuary and/or administrator is to defeat the
desire and the dying wish of the testator to reward
him for his faithful and unselfish services rendered
during the time when said testator was seriously ill
or bed-ridden.
The proviso must be respected and be given effect
until the death or until the refusal to act as such of
the instituted usufructuary/administrator, after
which period, the property can be properly
disposed of, subject to the limitations provided in
Art. 863 of the Civil Code concerning a
fideicommissary substitution, said Article says:
A fideicommissary substitution by virtue of which the
fiduciary or first heir instituted is entrusted with the
obligation to preserve and to transmit to a second
heir the whole or part of the inheritance, shall be
valid and shall take effect, provided such
substitution does not go beyond one degree from
the heir originally instituted, and provided further,
that the fiduciary or first heir and the second heir
are living at the time of the death of the testator.