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ISSUES: Whether the CA erred in applying Art. 448 and 456 and the provisions of the code of
Moralidad v. SPS Diosdado Pernes Usufruct instead of Art. 1678 of the CC; and whether the existing usufruct may be deemed to
GR No. 152809 have been extinguished or terminated.
August 3, 2006
RULING: The court rules in favor of P.
FACTS - What was constituted between the parties is one of usufruct over a piece of land. The
- A parcel of land is located in Davao City and registered under the name of the petitioner petitioner being the owner of the property upon whom the naked title thereto remained and
under a TCT. During the younger years of the Petitioner, she had the opportunity to teach the respondents being two (2) among other unnamed usufructuaries who were simply
in the USA. She would come to the Philippines and spend her vacation at the house of her referred to as petitioner’s kin.
niece, Arlene Perenes (Respondent). - Usufruct under Article 562 of the Civil gives a right to enjoy the property of another with the
- While in the USA, she received news from Arlene that the outskirts of Davao City were obligation of preserving its form and substance, unless the title constituting it or the law
infested by NPA. Shocked by this news, she immediately sent money to Arlene’s Older otherwise provides.
sister, Acaeli. She was instructed to look for a lot in Davao city where Arlene and her family - Usufruct, in essence, is nothing else but simply allowing one to enjoy another’s property.
could settle down. This is why she bought the parcel of land. It is the right to enjoy the property of another temporarily, including both the jus utendi and
- Initially, the lot was acquired to let Arlene settle down but P subsequently wanted the the jus fruendi, with the owner retaining the jus disponendi or the power to alienate the
property to be available to any of her kins who wish to live and settle in Davao City. She same.
made this intention known to Arlene through an executed document. - It is undisputed that the P made known her intention to give R and her other kins the right
- Following the petitioners’ retirement, she went back to the Philippines and stayed at the to use and enjoy the fruits of her property.
house of respondent which was built on the subject property. In the course of time, the - On the second issue whether the existing usufruct may be deemed to have been
relationship between the P and R turned sour. In one instance, P brought a matter before extinguished or terminated. If the question is resolved in the affirmative, then the
the lupon where she lodged a complaint for slander, harassment, and others against the respondents’ right to possession, proceeding as it did from their right of usufruct, likewise
Respondents. Deciding on this, the Lupon ordered the Pernes to vacate the property after ceased
they have been reimbursed for the value of the house they built. Both parties could not - Art. 603 enumerates the modes on how a Usufruct is extinguished. In the document
agree on the amount. executed by the petitioner, it sets forth a resolutory condition over the usufruct "[T]hat
- Eventually, the P filed with the MTCC of Davao City a case for unlawful detainer against anyone of my kins may enjoy the privilege to stay therein and may avail the use thereof.
the Respondent Spouses. P alleges that she is the registered owner of the land on which Provided, however, that the same is not inimical to the purpose thereof"
the R’s built their house; that through her counsel, a letter was sent to the R demanding - Based on the facts and circumstances submitted by the P, it can be seen that that usufruct
them to vacate the premises and pay the rentals, to which R refused to heed. terminated or extinguished by the occurrence of the resolutory condition.
- R alleges that they entered the property and maintained it as their residence with full o the continuing animosity between the petitioner and the Pernes family and the
knowledge and consent of the P. violence and humiliation she was made to endure, despite her advanced age
- MTCC ruled in favor of the P. The court provided that although they R’s were builders in and frail condition, are enough factual bases to consider the usufruct as having
GF, R’s continued possession of the premises became unlawful upon their receipt of the been terminated.
demand to vacate.
- R’s appealed to the RTC, and the decision of the MTCC was reversed. The court provides National Housing Authority v. CA
that the occupation of the R was because of the express consent of the P and not by mere GR No. 148830
tolerance. The RTC further ruled that the Art. 448 and 546 of the CC governs the April 13, 2005
relationship of the parties. The court explains that since respondents are possessors of the
property by permission petitioner, and builders in good faith, they have the right to retain FACTS
possession of the property subject of this case until they have been reimbursed the cost of - Former President Marcos issued Proclamation no. 481, setting aside a 120-hectare portion
the improvements they have introduced on the property. of land in QC owned by the P as reserved property site of the National Government Center
- CA Affirmed the decision of the RTC. It ruled that (NGC). Former president issued another proclamation, which removed a 7-hectare portion
o It is still premature to apply Art. 448 and 546 of the CC to the case at hand of the NGC and another proclamation which gave Manila Seedling Bank Foundation
o What governs the rights of the parties is the law on usufruct but petitioner failed (MSBF) usufructary rights over the segregated portion.
to establish that respondents’ right to possess had already ceased o That the usufructary right was granted for their use in its operation and projects,
and to future survey.

- MSBF occupied the area, and exceeded the 7-hectares subject to its usufructary right over Bachrach v. Seifert
the years. By 1987, it occupied nearly 16 hectares. On the same year, MSBF leased a GR No. L-2659
portion of the area to BGC and other stallholders. October 12, 1950
- On the same year, former president Corazon Aquino issued a memorandum which revoked
the reserved status of the 50 hectares remaining from the 120 hectares of NHA property. FACTS
It also authorized NHA to commercialize the area and sell it to the public. - The deceased petitioner left his widow, Mary McDonoald, all the fruits and usufruct of the
- NHA gave BGC ten days to vacate its occupied area, any structure left within the period remainder of all his estate; and that she may enjoy the use of the usufruct of spend the
will be demolished. BGC filed a complaint for injunction with the trial court. fruits in any manner she wishes. His will provided that upon the death of his widow, ½ of
- RTC dismissed the complaint for injunction and ruled that the MSBF failed to do its right to all his estate shall be divided by his legal heirs except his brother.
conduct a survey. To allow MSBF to determine the 7-hectare now would be unfair to the - P owned 108,000 shares of stock from a mining company. The widow petitioned the lower
grantor of the usufruct. court to authorize the People Bank and Trust Company to her share of stock dividend paid
- BGC Appealed the RTC ruling to the CA. The court reversed the decision of the RTC out in the form of stock, is fruit or income and therefore belonged to her as usufructary.
o Legal heirs of the deceased opposed the petition on the ground that the stock
ISSUES: Whether the premises leased by BGC form MSBF is within the seven-hectare area dividend was not income but formed part of the capital. Thus is did not belong to
that Proclamation No. 167 granted to MSBF by way of Usufruct. the usufructary but to the remainderman.

RULING: Court remands the petition to the trial court for a joint survey to determine finally the ISSUE: W/ stock dividends can be considered as income.
metes and bounds of the seven-hectare area subject to MSBF’s usufructuary rights.
- A usufruct may be constituted for a specified term and under such conditions as the parties RULING: The shares of stock are part of the usufruct.
may deem convenient subject to the legal provisions on usufruct. A usufructuary may lease - The court should consider the Pennsylvania rule which provides that, all earning of the
the object held in usufruct. Thus, the NHA may not evict BGC if the 4,590 square meter corporation made prior to the death of the testator stockholder belong to the corpus of the
portion MSBF leased to BGC is within the seven-hectare area held in usufruct by MSBF. estate, and that all earning, when declared as dividends in whatever form, and during the
The owner of the property must respect the lease entered into by the usufructuary so long lifetime of the usufructary or life tenant.
as the usufruct exists. However, the NHA has the right to evict BGC if BGC occupied a - Under Sec. 16 of the Corporation Law, no corporation may make or declare any dividend
portion outside of the seven-hectare area covered by MSBF’s usufructuary rights. except from the surplus profits arising from its business. Any dividend, therefore, whether
- MSBF’s survey shows that BGC’s stall is within the 7-hectare area while the NHA survey cash or stock, represents surplus profits.
shows otherwise. - Article 471 of the Civil Code provides that the usufructuary shall be entitled to receive all
- ART. 565. The rights and obligations of the usufructuary shall be those provided in the title the natural, industrial, and civil fruits of the property in usufruct. And articles 474 and 475
constituting the usufruct; in default of such title, or in case it is deficient, the provisions provide as follows:
contained in the two following Chapters shall be observed. o ART. 474. Civil fruits are deemed to accrue day by day, and belong to the
- In the present case, Proclamation No. 1670 is the title constituting the usufruct. usufructuary in proportion to the time the usufruct may last.
Proclamation No. 1670 categorically states that the seven-hectare area shall be o ART. 475. When a usufruct is created on the right to receive an income or
determined "by future survey under the administration of the Foundation subject to private periodical revenue, either in money or fruits, or the interest on bonds or
rights if there be any." Based on this proclamation, it authorized MSBF to determine the securities payable to bearer, each matured payment shall be considered as
location of the seven-hectare and left it to choose the location of the seven-hectare area the proceeds or fruits such right. When it consists of the enjoyment of the
under its usufruct benefits arising from an interest in an industrial or commercial enterprise,
- A usufruct is not simply about rights and privileges. A usufructuary has the duty to protect the profits of which are not distributed at fixed periods, such profits shall
the owner’s interests. One such duty is found in Article 601 of the Civil Code which states: have the same consideration. In either case they shall be distributed as civil
ART. 601. The usufructuary shall be obliged to notify the owner of any act of a third person, fruits, and shall be applied in accordance with the rules prescribed by the
of which he may have knowledge, that may be prejudicial to the rights of ownership, and next preceding article.
he shall be liable should he not do so, for damages, as if they had been caused through - The shares of stock are part of the usufruct. The stock dividends are civil fruits of the
his own fault. A usufruct gives a right to enjoy the property of another with the obligation of original investment.
preserving its form and substance,unless the title constituting it or the law otherwise