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Friday, April 26, 2024

A cocktail of property rights

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"Knowing our property rights will prevent unnecessary disputes or even violence that may lead to litigation."

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When property rights are broached, most discussions will revolve around recovery of ownership or possession of real or personal property. However, property rights extend to other rights as well,  such as rights of accession, usufruct, and legal easement of right of way, among others.  

Accession is when the owner of a thing becomes the owner of everything that this thing may produce, which may be inseparably united or incorporated to it, either naturally or artificially (Tolentino, Property citing Castan, quoting De Diego). The concept is rooted on the general rule that the “accessory follows the principal”, and to the owner of the thing belongs the extension or increase of itself or its products (Tolentino, Property citing Sanchez Roman and Manresa).   

Real properties. When a person builds, plants and sows in bad faith in the land of another – a practice common in the Philippines – the former loses that which he built, planted or sowed without right to indemnity (Article 449, Civil Code). The owner of the land in this situation may demand the demolition of the work, or that the planting and sowing be removed (Article 450, Civil Code).

The owner may also compel the builder or planter to pay the price of the land, or for the sower to pay the proper rent (Article 450, Civil Code). Whatever option is chosen by the owner he is entitled to recover damages from the builder, planter, or sower (Article 451, Civil Code). Hence, building, planting, or sowing in the land of another must be avoided, unless the owner-sells the land or allows you to rent it.

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Personal properties. When the owner of the accessory has made an incorporation to the principal thing in bad faith, he shall lose the thing incorporated and shall pay the owner of the principal thing damages (Article 470, Civil Code). For example, the owner of a silver ring clandestinely incorporates a 1.0 carat diamond into the former, with the intent to appropriate it. In this situation, the accessory is the silver band, and the principal the diamond. Thus, the owner of the ring loses the ring to the owner of the diamond with an obligation to pay damages.  This is without prejudice to a criminal action for theft if the elements of the crime are present.

However, if the owner of the principal thing is in bad faith, the owner of the accessory shall have the right to choose between: (a) the owner paying its value; or (b) the separation of the thing belonging to him even if it is necessary to destroy the principal thing. In both cases, the owner of the principal will have to indemnify the owner of the accessory for damages (Article 470, Civil Code).

What then is bad faith? Bad faith does not simply connote bad judgment or negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong. It means breach of a known duty through some motive, interest or ill will that partakes of the nature of fraud.  For anyone who claims that someone is in bad faith, the former has the duty to prove such (Spouses Espinoza v. Spouses Mayandoc, G.R. No. 211170, July 3, 2017).

In one case, the Supreme Court declared that with the absence of knowledge or awareness that a property acquired has encroached upon the property of another, the presumption of good faith cannot be overturned. There must be sufficient showing that the buyer or purchaser was aware of the encroachment at the time it acquired the property (Technogas Philippines v. Court of Appeals, G.R. No. 108894. February 10, 1997).

Another right involving a property is usufruct. Usufruct gives the right to enjoy the property of another with the obligation of preserving its form and substance. The person who enjoys the property of another is known as the usufructuary. The usufruct is formed by law, by the will of private persons in acts inter vivos or in a testament, and by prescription (Articles 562 and 563, Civil Code).

The usufructuary shall be entitled to all the natural, industrial and civil fruits of the property in usufruct. The fruits growing at the time the usufruct begins shall belong to the usufructuary. Those growing at the time the usufruct terminates belong to the owner (Article 567, Civil Code).

A usufruct can be constituted on lands, buildings, tenements, fruit-bearing trees and shrubs, woodland, the right to receive rents or pensions, or an action to recover real property or real right, or movable property (Articles 568, 570, 575, 577 and 578, Civil Code). There can also be a usufruct on a co-owned property (Article 582, Civil Code).

The usufructuary may personally enjoy the thing in usufruct, lease it to another, or alienate his right of usufruct. However, such contracts shall terminate upon expiration of the usufruct, except leases of rural lands, which shall be considered subsisting during the agricultural year (Article 572, Civil Code).

The owner of the property subject of a usufruct may alienate it but cannot alter its form or substance or do anything prejudicial to the usufructuary (Article 581, Civil Code). The usufructuary, before entering the enjoyment of the property, is obliged to: (a) make an inventory of all the property; and (b) to give security (Article 583, Civil Code).

The requirement of giving security shall not apply if the donor reserves the usufruct of the property he donated, or in cases wherein parents are the usufructuaries of their children’s property, except when the parents contract a second marriage (Article 584, Civil Code). The requirement of inventory and security may be excused when no one will be injured (Article 585, Civil Code).

A limitation on the owner's right to use his or her property, for the benefit of another, is known as an easement. One of the most popular legal easements is the right of way. An easement of right of way is a real right. When an easement of right of way is granted to another person, the rights of the property's owner are limited (G.R. No. 194488, February 11, 2015).

An owner may not exercise some of his or her property rights for the benefit of the person who was granted the easement of right of way. Hence, the burden of proof to show the existence of the above conditions is imposed on the person who seeks the easement of right of way (G.R. No. 194488, February 11, 2015).

To demand the compulsory easement of right of way, an immovable must be surrounded by other immovables belonging to other persons, and is without adequate outlet to a public highway. The isolation of the immovable is not due to its owner's acts, the right of way is established at the point least prejudicial to the servient estate, after payment of the proper indemnity (Article 649, Civil Code).  

In the case of Reyes v. Spouses Valentin, et al., the Ocular Inspection Report of the property shows that there is another outlet to the highway. In between the property and the highway or road is an irrigation canal, which can be traversed by constructing a bridge, similar to what was done by the owners of the nearby properties. There is, therefore, no need to utilize the servient property since another adequate exit exists (G.R. No. 194488, February 11, 2015).

The outlet referred to in the Ocular Inspection Report may be longer and more inconvenient to the petitioner (dominant estate), because she will have to traverse other properties and construct a bridge over the irrigation canal before she can reach the road. However, these reasons will not justify the imposition of an easement on the property because her convenience is not the gauge in determining whether to impose an easement of right of way over another's property (G.R. No. 194488, February 11, 2015).

ҬThe criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance to exit into a public highway, although this is a matter of judicial appreciation. While shortest distance may ordinarily imply least prejudice, it is not always so, as there may be permanent structures obstructing the shortest distance. On the other hand, the longer distance may be free of obstructions and the easiest and most convenient way to pass through (Reyes v. Spouses Valentin, et al., G.R. No. 194488, February 11, 2015 citing Quimen v. Court of Appeals).

In other words, where the easement may be established on any of several tenements surrounding the dominant estate, the one where the way is shortest and will cause the least damage should be chosen. However, as stated, if these two (2) circumstances do not concur in a single tenement, the way which will cause the least damage should be used, even if it will not be the shortest (GR. No. 194488, February 11, 2015 citing Quimen).

“¨As in the case of Reyes, there were permanent structures — such as the garage, garden, and grotto already installed on the property — which will be destroyed to accommodate her preferred location for the right of way. The cost of having to destroy these structures, coupled with the fact that there is an available outlet that can be utilized for the right of way, negates the claim that the property is the point least prejudicial to the servient estate (G.R. No. 194488, February 11, 2015).

Property rights are as important as personal rights, as other rights emanate from it – rights to sell, lease, enjoy, or encumber. Property rights are also intertwined with economic rights, which impact on food, shelter, education and financial resources. More importantly, knowing our property rights will prevent unnecessary disputes or even violence that may lead to litigation.

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