JOSE MARIA COLLEGE

COLLEGE OF LAW

Philippine-Japan Friendship Highway, Sasa, Davao City

Name : Salman M. Johayr

Year and Program : 2nd Year; 4-year program

Instructor : Atty. Kristine Mae Quibod

Subject : Law on Property

Case Digests

“TITLE VI. USUFRUCT”

 1. Eleizegui v. Manila Lawn Tennis Club
[G.R. No. 967; May 19, 1903]

Facts:

Dario and Gaudencio Eleizegui entered into a contract of lease on January 1980, of
its land with the Manila Lawn Tennis Club where it was stipulated that the lessee is
expressly authorized to make improvements upon the land, by erecting buildings of both
permanent and temporary character, by making fills, laying pipes, and making such other
improvements as might be considered desirable for the comfort and amusement of the
members. It was also stipulated that the lease for all the time and that the members of the
said club may desire to use it and that, Mr. Williamson or whoever may succeed him as
secretary of said club may terminate the lease whenever desired without other formality than
that of giving a month's notice. It was also specified that the ElezeguIs as owners of the land
would undertake to maintain the club as long as the tenant. The rent of the said land is fixed
at P25 per month.

On August 1980, the Elezeguis terminated the contract of lease by the notice given
to the Manila Lawn Tennis Club but the latter refused to accede and vacate the leased land.
The Elezeguis filed an action for unlawful detainer onn the ground that the lease was already
terminated. With respect to the term of the lease the present question has arisen. In its
discussion 3 theories have been presented: 1) the duration depends upon the will of the
lessor, who, upon one month's notice given to the lessee, may terminate the lease so
stipulated; 2) the duration makes it dependent upon the will of the lessee, as stipulated in the
contract; and 3) the right is reserved to the courts to fix the duration of the term. The first
theory is that which has prevailed in the judgment below.

Issue:

Whether or not the contract of lease was perpetual since in the contract, the duration
thereof as left to the will of the lessee alone

Ruling:

No. The lease in question does not fall within any of the cases in which the rights and
obligations arising from a contract cannot be transmitted to heirs, either by its nature, by
agreement, or by provision of law. Usufruct is a right of superior degree to that which arises
from a lease. It is a real right and includes all the jus utendi and jus fruendi. Nevertheless,
the utmost period for which a usufruct can endure, if constituted in favor a natural person, is
the lifetime of the usufructuary and if in favor of juridical person, it cannot be created for
more than thirty years. It was repeatedly stated in the document that it was a lease, and
nothing but a lease, which was agreed upon: "Being in the full enjoyment of the necessary
legal capacity to enter into this contract of lease they have agreed upon the lease of said
estate .They lease to Mr. Williamson, who receives it as such. The rental is fixed at 25 pesos
a month .The owners bind themselves to maintain the club as tenant. Upon the foregoing
conditions they make the present contract of lease." If it is a lease, then it must be for a
determinate period. It cannot be concluded that the termination of the contract is to be left
completely at the will of the lessee, because it has been stipulated that its duration is to be
left to his will.
 2. Moralidad v. Pernas

[GR No. 152809; August 3, 2006]

Facts:

A parcel of land located in Davao City was registered in the name of petitioner
Mercedes Moralidad under TCT No. T-123125. Petitioner now actually residing at 8021
Lindbergh Boulevard, Philadelphia, Pennsylvania, U.S.A, acquired the lot property initially for
the purpose of letting Arlene move from Mandug to Davao City proper but later she wanted
the property to be also available to any of her kins wishing to live and settle in Davao City.
Petitioner made known this intention in a document she executed on July 21, 1986: 1. that
Mr. and Mrs. Diosdado M. Pernes may build their house therein and stay as long as they
like; 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; 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; and that
anyone of my kins who cannot conform with the wishes of the undersigned may exercise the
freedom to look for his own; and 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.

Thereafter her retirement in 1993, petitioner came back to the Philippines to stay with
the respondents‟ 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.

Issue:

Whether or not the agreement for the use of the land constituted the defendants as
usufructs

Ruling:

Yes. The Court is inclined to agree with the CA that what was constituted between
the parties herein is one of usufruct over a piece of land, with the petitioner being the owner
of the property upon whom the naked title thereto remained and the respondents being two
(2) among other unnamed usufructuaries who were simply referred to as petitioner‟s kin. The
Court, however, cannot go along with the CA‟s holding that the action for unlawful detainer
must be dismissed on ground of prematurity. 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.

The established facts undoubtedly gave respondents not only the right to use the
property but also granted them, among the petitioner‟s other kins, the right to enjoy the fruits
thereof. Therefore, with the CA‟s ruling that usufruct was constituted between petitioner and
respondents.
 3. Bachrach v. Seifert

[GR No. L-2659; October 12, 1950]

Facts:

The deceased E. M. Bachrach, who left no forced heir except his widow Mary
McDonald Bachrach, in his last will and testament made various legacies in cash and willed
the remainder of his estate. The estate of E. M. Bachrach, as owner of 108,000 shares of
stock of the Atok-Big Wedge Mining Co., Inc., received from the latter 54,000 shares
representing 50 per cent stock dividend on the said 108,000 shares. In1948, Mary McDonald
Bachrach, as usufructuary or life tenant of the estate, petitioned the lower court to authorize
the Peoples Bank and Trust Company, as administrator of the estate of E. M. Bachrach, to
transfer to her the said 54,000 shares of stock dividend by indorsing and delivering to her the
corresponding certificate of stock, claiming that said dividend, although paid out in the form
of stock, is fruit or income and therefore belonged to her as usufructuary or life tenant.
Sophie Siefert and Elisa Elianoff, legal heirs of the deceased, opposed said petition on the
ground that the stock dividend in question was not income but formed part of the capital and
therefore belonged not to the usufructuary but to the remainderman. While appellants admit
that a cash dividend is an income, they contend that a stock dividend is not, but merely
represents an addition to the invested capital.

Issue:

Whether or not the 54,000 shares of stock dividends belong to the usufructuary Mary
Mcdonald Bachrach

Ruling:

Yes. So called Pennsylvania rule, which prevails in various other jurisdictions in the
United States, supports appellee's contention. This rule declares that all earnings of the
corporation made prior to the death of the testator stockholder belong to the corpus of the
estate, and that all earnings, when declared as dividends in whatever form, made during the
lifetime of the usufructuary or life tenant. Under section 16 of our Corporation Law, no
corporation may make or declare any dividend except from the surplus profits arising from its
business. Any dividend, therefore, whether cash or stock, represents surplus profits. Article
471 of the Civil Code provides that the usufructuary shall be entitled to receive all the
natural, industrial, and civil fruits of the property in usufruct.

In this case, the 108,000 shares of stock are part of the property in usufruct. The
54,000 shares of stock dividend are civil fruits of the original investment. They represent
profits, and the delivery of the certificate of stock covering said dividend is equivalent to the
payment of said profits. Said shares may be sold independently of the original shares, just
as the offspring of a domestic animal may be sold independently of its mother.
 4. Orozco and Alcantara v. Araneta

[G.R. No. L-3691; November 21, 1951]

Facts:

Eugenio del Saz Orozco died leaving a will with a pertinent clause providing 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, 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 or not the stock dividends 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
as his own exclusive property

Ruling:

Yes. The stock dividends were income or fruits of the capital which should be given
to and enjoyed by the life usufructuary, Orozco as his own exclusive property. Citing the
case of Bachrach vs. Seifert, 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.

Here, respondents Salvador Araneta et al attempted to differentiate the present case

from the Bachrach case, contending that, while the doctrine in that case effected a just and
equitable distribution, the application of it in the present case would cause an injustice, for,
quoting Justice Holmes, "abstract propositions do not decide concrete cases."

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 remaindermen, 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 were 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.
 5. Alunan v. Veloso

[G.R. No. L-29158; December 29, 1928]

Facts:

It started with an account filed in these intestate proceedings for the settlement of the
estate of the deceased Rosendo Hernaez by his judicial administrator, Rafael Alunan. Jose
Hernaez, one of the heirs interested in this proceedings, assigned the whole of his portion to
Eleuteria Ch. Velos- who objects to some of the items of the account filed, assigning errors
to the resolution of the lower court. One of the errors questioned herein is that the lower
court having admitted the partition proposed by the administrator in his account. According
to this account, the total amount to be partitioned among the heirs is P88,979.08, which the
administrator distributed equally among all the heirs, including the widow's each one
receiving P11,122.38. This partition is object to with respect to the widow’s right of a
usufructuary.

Issue:

Whether or not money be an object of usufruct.

Ruling:

Yes. In this case, it was alleged that the distributed amount is in money, and since
the widow's right is only a usufruct, and as there can be no usufruct of money, since it is a
fungible thing, the adjudication made to the widow was erroneous.

However, the Supreme Court stated that it is incorrect to say that there can be no
usufruct of money, because it is a fungible thing (Art. 482, Civil Code). Thus, Money can be
considered an object of usufruct.
 6. Bislig Bay v. Government of Surigao

[G.R. No. L-9023. November 13, 1956]

Facts:

Bislig Bay Lumber Co., Inc. is a timber concessionaire of a portion of public forest
located in the provinces of Agusan and Surigao. To develop and exploit its concession, the
company constructed at its expense a road from the barrio Mangagoy into the area of the
concession. Tax was paid under protest but 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. Province of
Surigao filed a motion to dismiss on two grounds (1) that the venue is improperly laid, and
(2) that the complaint states no -cause of action; but this motion was denied.

The theory of Bislig Bay is that the 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), according to the evidence, the road was built not only for the use and benefit
of appellee but also of the public in general.

Issue:

Whether or not a usufructuary be compelled to pay taxes of the road they

constructed which the government

Ruling:

No. The Supreme Court upheld the theory of Bislig Bay that the ownership of the
road that was constructed by them 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 Bislig Bay
primarily for its use and benefit, the privilege is not exclusive, for, under the lease contract
entered into by them and the government and by public in by the general. , 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.

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 (Mercado vs. Rizal, 67 Phil., 608; Article 597,
new Civil Code). Appellee is but a partial usufructuary of the road in question.
 7. Board of Assessments v. Samar Mining
[GR NO. L-28034 Feb 27, 1971]

Facts:

Respondent Samar Mining (Samico) owned a mine and mill built the 42-km gravel pit
Samico Road to connect to the pier. Granted Miscellaneous Lease for the right of way by
the Bureau of Land and Bureau of Forestry for the public land where the road traversed but
Contract of Lease never executed.

Samico received an assessment from the Provincial Assessor amounting to

P1,117,900.00 as real estate tax on the taxable portion of Samico Road. Samico appealed
the assessment to petitioner Board of Assessment (BAA) on the ground that the road was
not a taxable improvement because it was constructed entirely on public land. The BAA
upheld the assessment but held it unenforceable until the lease contracts were executed.
Samico moved for reconsideration, but the BAA, in a decision dated Aug. 3, 1965, not only
denied the appeal but made the assessment immediately enforceable, with the amount due
accruing from the date of completion of the road in 1959. Upon second denial by the BAA,
Samico elevated its case to the Court of Tax Appeals.

The Provincial Assessor and the BAA assailed the CTA‟s jurisdiction over the case
on the ground that Samico should have paid the tax under protest first before appealing. On
June 28, 1967, the CTA ruled that it has jurisdiction over the case and then decided in favor
of Samico. Hence this appeal to the SC.

Issue:

Whether or not the road constructed on alienable public land leased to Samico is
taxable.

Ruling:

No. The road constructed on alienable public land leased to Samico is not taxable.

The road is indeed an improvement, but it is not taxable under Sec. 2 of the
Assessment Law pursuant to the ruling in Bislig Bay Lumber Co. v. Prov‟l. Gov‟t. of Surigao
(100 Phil 303), which held that a private party who introduces improvements on public land
subject to a lease is only a partial usufructuary of the road and therefore cannot be made to
pay real estate tax; because in such cases ownership ultimately remains with the
Government and the improvements remain open to public use.

In this case, the road constructed by Samar Mining made on the public land is for
public purpose. Hence, should be exempted from paying the real property taxes.
 8. Mercado v. Real

[GR NO. 45534; Apr 27, 1939]

Facts:

The properties by the deceased Paciano Rizal y Mercado belonged in usufruct to

nine (9) heirs and in naked ownership to seven (7) others. The naked owners wanted the
usufructuaries to pay the land tax of the said properties. However, the usufructuaries refused
contending that the obligation to pay the land tax rests on the naked owners.
Notwithstanding the refusal of the usufructuaries, the naked owners deducted the amount of
the land tax to the share in the products of the former. Eventually, eight (8) naked owners
returned a portion of the amount that had been deducted from the share in the products of
the usufructuaries. The usufructuaries then brought an action to compel the only naked
owner who refused the return of the said share.

The trial court interposed a demurrer on the ground that the action is premature
under Article 505 of the Old Civil Code which states: Any taxes which may be imposed
directly upon the capital, during the usufruct, shall be chargeable to the owner. Then, if paid
the latter, the usufructuary shall pay him the proper interest on any sums he may have
disbursed by reason thereof; if the usufructuary should advance the amounts of such taxes
he shall recover them upon the expiration of the usufruct.

Issue:

Whether or not the trial court is correct in interposing the demurrer based on the
ground that the action of the usufructuaries is premature.

Ruling:

No. The trial court erred in interposing the demurrer based on the ground that the
action of the usufructuaries is premature.

Pursuant to the second paragraph of Article 505 of the Old Civil Code, if the
usufructuary should pay the tax, he would be entitled to reimbursement for the amount
thereof only upon the expiration of the usufruct, and the usufruct being still afoot, it is
premature for usufructuaries who advanced the payment of the tax, to bring the action for
the recovery of what they paid. However, in this case, the usufructuaries did not make the
payment; the naked owners were the ones who made it without their consent and with
money belonging to them as their share of the fruits coming to them in their capacity as
usufructuaries. Reversing the resolutions of the trial court, the demurrer interposed to the
complaint is overruled.
 9. Hemedes v. CA
[GR NO.107132 Oct 8, 1999]

Facts:
Petitioner Jose Hemedes is the father of Maxima and Enrique. Jose executed
“Donation Inter Vivos with Resolutory Conditions” whereby he conveyed the subject land in
favor of his third wife, JUSTA KAUSAPIN, 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, Justa Kausapin executed “Deed of Conveyance by
Reversion”, conveying the property to Maxima Hemedes. A title was issued in the name of
Maxima. Maxima then constituted a real estate mortgage over the property and the property
was extra judicially foreclosed by R&B insurance for Maxima‟s failure to pay the loan she
obtained. Meanwhile, despite the earlier conveyance by JUSTA to Maxima, Justa executed
a “Kasunduan” conveying the same property to her stepson Enrique. Enrique then sold the
property to Dominium.

Issue:

Whether or not R & B Insurance should be considered an innocent purchaser of the

land in question

Ruling:

Yes, R & B Insurance should be considered an innocent purchaser. The annotation

of usufructuary rights in favor of Justa upon Maxima‟s 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 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 is not
sufficient cause to require R & B Insurance to investigate Maxima‟s title for the reason that
Maxima‟s ownership over the property remained unimpaired despite such encumbrance. R &
B Insurance had a right to rely on the certificate of title and was not in bad faith in accepting
the property as a security for the loan it extended to Maxima Hemedes.
 10. Chingen v. Arguelles
[GR No. L-3314; January 3, 1907]

Facts:
Petitioner Anselmo Chingen, by his attorney, Claro Reyes, filed a complaint in the
Court of First Instance of the city of Manila, praying for judgment against the four defendants
herein for onehalf of the jewels therein mentioned and the rent of the property referred to
therein, to wit, 4,170 pesos, or a half of 8,340 pesos received by the defendants since the
date they took possession of the legacies left by the deceased Raymunda Reyes in her will
that is to say, since the 29th of May, 1900 which said legacies consisted of a house
numbered 8, 10, 12 and 14 Calle Claveria, district of Binondo, two combs set with diamonds
and pearls, respectively, a gold ring set with three diamonds, a pair of gold earrings set with
three diamonds each, and a gold ring set with one large and several small diamonds, the
defendants having 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. Article 837 of the Civil Code provides: "If the testator
should leave neither legitimate ascendants or descendants, the surviving spouse shall be
entitled to one-half of the estate also in usufruct."

Issue:
Whether or not Chingen should received 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

Ruling:
No. Article 513 provides that the usufruct shall be extinguished: (a) By the death of
usufructuary; (b) By expiration of the period for which it was constituted, or performance of
the condition subsequent set forth in the deed creating the usufruct; (c) By the coincidence
of the usufruct and ownership in the same person. (d) By the renunciation of the
usufructuary; (e) By total loss of the thing constituting the subject matter of the usufruct. (f)
By termination of the right of the person who constituted the usufruct. And (g) By
prescription.

The property of the estate of his deceased wife having been divided in two equal
parts,the property to which the plaintiff 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. 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.
 11. Vda de Aranas v. Aranas

[GR No. L-56249, 29 May 1987]

Facts:

The testator left a will which was admitted to probate in 1956. The will provides that:
(1) the remainder of the estate will be under the the special administration of Vicente Aranas,
his faithful and serviceable nephew, until his death or until he resigns; (2) that the sons of
testator‟s brother [Carmelo] can hold said office of special administrator, and none other than
they, if Vicente dies or resigns; (3) the special administration is perpetual; and (4) that
Vicente will receive 1/2 of the produce of said properties, and the other 1/2 of the produce to
be given to the Catholic Church.

In 1977, respondent Judge in SP:303 [Motion for Declaration of Heirs and Partition
and for Removal of the Administrator] ruled in petitioners‟ favor that the „perpetual
inalienability and administration by Vicente is null and void after 20 years from 1954. Vicente
moved to reconsider alleging that said order was violative of due process because only the
issue for the removal of administrator was heard. Thus, the court set aside its earlier order.
Petitioners moved to reconsider, but was denied. Hence, the present petition for certiorari.

Issue:

Whether or not the testamentary dispositions [right of usufructuary and right to hold
as special administrator] is null and void for being perpetual, that is, more than 20 years

Ruling:

No. 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. (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." on the doctrine laid down in Article 870 of the New Civil Code to
"Article 870. The dispositions of the testator declaring all or part of the estate inalienable for
more than twenty years are void.
 12. City of Manila v. Monte de Piedad
[G.R. No. 1975. November 10, 1905]
Facts:

It was admitted during the trial of this case that the city of Manila was, on and prior to
the 6th day of July, 1887, the owner of the land in the Plaza de Goiti, on which the building of
defendant now stands. On the 6th day of July, 1887, the city of Manila adopted the following
resolution.

On the 14th of May, 1901, the defendant presented to the Court of First Instance of
Manila, a petition asking that its possession as owner of the land and building in question be
inscribed in accordance with the provisions of article 390 of the Mortgage Law. The
proceedings usual in such cases were taken, the prayer of the petition was granted by the
Court of First Instance, and on the 13th of June, 1901, the inscription was made in the
registry of property for the city of Manila. On the 13th of October, 1903, the plaintiff brought
this action against the defendant, asking that the above-mentioned inscription be canceled,
and that the judgment be entered in favor of the plaintiff for the possession of the property
and the sum of $14,000, money of the United States, as damages. Judgment was entered in
the court below in favor of the plaintiff so far as to order that the inscription be so modified as
to show that the plaintiff was the owner of the land, and that the defendant had a right to
occupy it gratuitously, so long as devoted the land to the purpose above mentioned. The
judgment denied the plaintiff any other relief. Plaintiff has appealed from the judgment, but
the defendant has not.

Issue:

Whether or not the defendant has a right to occupy the land in question so long as
the building is not abandoned, and so long as it is devoted to the purposes of a Monte de
Piedad y Caja de Ahorros and consider the defendant as usufructuary

Ruling:

Yes.The defendant has a right to occupy the land in question so long as the building
is not abandoned, and so long as it is devoted to the purposes of a Monte de Piedad y Caja
de Ahorros.

The appellant also bases its appeal upon the ground that the defendant, by claiming
in the proceedings relating to the possessory information to be the absolute owner of the
land and building, forfeited all the rights which it acquired by virtue of the cession of 1887;
that by this claim it repudiated the relation which had theretofore existed between it and the
appellant, and virtually said that it no longer occupied the land under the terms of the grant,
but was the absolute owner thereof. At the trial below evidence was introduced by the
defendant to show that this claim of ownership was made by the officers then in charge of
the defendant institution under a mistake of fact; that the only documents which the then
officers had before them at the time the proceeding was commenced, indicated that the city
had conveyed in 1887 to the defendant an absolute title to the land. The evidence tended to
show that the then managers of the Monte de Piedad were not informed of and did not see
copies of the petition to which we have referred, nor of the resolution of the city of Manila
making the cession, and the claim of the defendant is that there was no intention on its part
in presenting the petition for the inscription.
 13. Locsin v. Valenzuela

[G.R. No. 51333, G.R. No. 52289 May 18, 1989]

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 a large tract of
agricultural land known as "Hacienda Villa Regalado" located in Barrio Panubigan, Canlaon
City, Negros Occidental covered by a Transfer of Certificate of Title. 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 lessee.

On October 22, 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 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 on 30 May 1977 that the rental payments as of 22
October 1972 were properly considered as amortization payments for the land and as such
should pertain to the land- owners and not to the usufructuary.

Issue:

What is the legal character of the payments made by the tenants beginning October
21, 1972 payments on the price of the land itself or civil fruits of the land

Ruling:

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.nIt 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. 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.
 14. Moralidad v. Pernes
[G.R. No. 152809 August 3, 2006]

Facts:

Petitioner taught in Davao City, Quezon City and Manila. While teaching in Manila,
she had the good fortune of furthering her studies at the University of Pennsylvania, U.S.A.
While schooling, she was offered to teach at the Philadelphia Catholic Archdiocese, which
she did for seven (7) years. Thereafter, she worked at the Mental Health Department of said
University for the next seventeen (17) years. During those years, she would come home to
the Philippines to spend her two-month summer vacation in her hometown in Davao City.
Being single, she would usually stay in Mandug, Davao City, in the house of her niece,
respondent Arlene Pernes, a daughter of her younger sister, Rosario.

Back in the U.S.A. sometime in 1986, she received news from Arlene that Mandug at
the outskirts of Davao City was infested by NPA rebels and many women and children were
victims of crossfire between government troops and the insurgents. Shocked and saddened
about this development, she immediately sent money to Araceli, Arlene‟s older sister, with
instructions to look for a lot in Davao City where Arlene and her family could transfer and
settle down. Petitioner acquired the lot property initially for the purpose of letting Arlene
move from Mandug to Davao City proper in Palm Village, Bajada, Davao City but later she
wanted the property to be also available to any of her kins wishing to live and settle in Davao
City. Petitioner made known this intention in a document she executed on July 21, 1986.
Following her retirement in 1993, petitioner came back to the Philippines to stay with the
respondents‟ 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. Petitioner filed with an unlawful detainer suit against the
respondent spouses.

Issue:

Whether or not the existing usufruct may be deemed to have been extinguished or
terminated

Ruling:

Yes. The document executed by the petitioner dated July 21, 1986 constitutes the
title creating, and sets forth the conditions of, the usufruct. Paragraph 3 thereof states 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. What may be
inimical to the purpose constituting the usufruct may be gleaned from the preceding
paragraph wherein petitioner made it abundantly clear "that anybody of my kins who wishes
to stay on the aforementioned property should maintain an atmosphere of cooperation, live
in harmony and must avoid bickering with one another. That the maintenance of a peaceful
and harmonious relations between and among kin constitutes an indispensable condition for
the continuance of the usufruct is clearly deduced from the succeeding Paragraph 4 where
petitioner stated that anyone of my kins who cannot conform with the wishes of the
undersigned may exercise the freedom to look for his own." In fine, the occurrence of any of
the following: the loss of the atmosphere of cooperation, the bickering or the cessation of
harmonious relationship between/among kin constitutes a resolutory condition which, by
express wish of the petitioner, extinguishes the usufruct.