PROPERTY REVIEWERCivil Code of the PhilippinesParas, Book II, Articles 414 to 426

Definition of ‘Property’ as a Subject in a Law CourseConsidered as a subject or course in law, property is that branch of civil law which classifies and defines the different kinds of appropriable objects, provides for their acquisition and loss, and in general, treats of the nature and consequences of real rights.

Classification of THINGS· Res nullius – belonging to no one· Res communes – to everyone· Res alicujus – to someone

Classification of Property· Movable, immovable· Public, private dominion· Within, outside the commerce of man· Present, future property· Tangible or corporeal, intangible or incorporeal· Principal, accessory· Fungible, non-fungible· Generic, specific· In custodia legis, free property

Characteristics of Property1. Utility for the satisfaction of moral or economic wants2. Susceptibility of appropriation3. Individuality or substantivity

ARTICLE 414: All things which are or may be the object of appropriation are considered either:

(1) Immovable or real property; or(2) Movable or personal property.

· Importance of classification to immovable and movable – the fact that different provisions of the law govern the acquisition, possession, disposition, loss, and registration of immovables and movables.

· Human body – neither personal nor real

Art. 415. The following are immovable property:

(1) Land, buildings, roads and constructions of all kindsadhered to the soil;

(2) Trees, plants, and growing fruits, while they areattached to the land or form an integral part of an immovable;

(3) Everything attached to an immovable in a fi xedmanner, in such a way that it cannot be separated therefromwithout breaking the material or deterioration of theobject;

(4) Statues, reliefs, paintings, or other objects for useor ornamentation, placed in buildings or on lands by theowner of the immovable in such a manner that it reveals theintention to attach them permanently to the tenements;

(5) Machinery, receptacles, instruments or implementsintended by the owner of the tenement for an industry orworks which may be carried on in a building or on a piece ofland, and which tend directly to meet the needs of the saidindustry or works;

(6) Animal houses, pigeon-houses, beehives, fi sh pondsor breeding places of similar nature, in case their owner hasplaced them or preserves them with the intention to have thempermanently attached to the land, and forming a permanentpart of it; the animals in these places are included;

(7) Fertilizer actually used on a piece of land;

(8) Mines, quarries, and slag dumps, while the matterthereof forms part of the bed, and waters either running orstagnant;

(9) Docks and structures which, though fl oating, areintended by their nature and object to remain at a fi xed placeon a river, lake, or coast;

(10) Contracts for public works, and servitudes andother real rights over immovable property.

Definition of ‘Immovable Proper

The law does not define what properties are immovable; they are merely enumerated.

Academic Classification of REAL PROPERTIES1. By nature2. By classification3. By destination or purpose4. By analogy

· Buildings – there should be intent of permanent annexation (immovable property)· No distinction whether built on own land or not· Materials and/or dismantled house – personal property

House built on rented land may be mortgaged: Chattel – provided parties agree and no innocent third party is prejudiced Real Estate Mortgage – should be preferred if made subsequent to chattel mortgage

· Buildings subject to chattel mortgage cannot be sold extra – judicially (under 3135, refers to real mortgage only)

· No legal compulsion to register buildings that do not belong to owners land – NO registry in thisjurisdiction of building apart from land.

· Buildings sold or mortgaged to be immediately demolished – personal property, true object of the contract is the materials

· REGISTRY OF PROPERTY – ministerial duty, should register as long as proper fee has been paid. He has no judicial or quasi-judicial power to determine the nature of the document. Standard Oil Co. v. Jaranillo

· Constructions of all kinds –attachment must be more or less permanent

· Wooden scaffoldings of painters – personal property

· Detached or uprooted trees – personal property, except timer in timberland

· Real property (incorporeal thing) – injury or breakage or deterioration in case of separation must be SUBSTANTIAL.

· Everything attached to an immovable (par.3) – when incorporation ceases or when it is detached it is considered as personal property.

· Par.4 (statues, reliefs, paintings) – should have intent to attach permanently

Distinction between par. 3 and 4 of Article 415

Par. 3(1) cannot be separated fromimmovable without breakingor deterioration(2) need not be placed by theowner. (Ladera v. Hodges,CA, 48 O.G. 5374).(3) real property by incorporation

Par. 4(1) can be separated from immovablewithout breakingor deterioration(2) must be placed by theowner, or by his agent,express or implied(3) real property by incorporationand destination

Query: Suppose the properties referred to in paragraph 3 are temporarily removed, but there is an intention toreplace them, should they be considered real or personal property?

ANS.: It is believed that they should be regarded as personal property inasmuch as the “incorporation” hasceased. The Partidas contained an express provision making said property real, but in view of the elimination inthe Code of said provision, we may say that same should no longer apply, despite a contrary opinion expressed bya member of the Code Commission. (Capis-trano, 1 Civil Code, p. 338).

Paragraph 5 refers to real property by destination or purpose

1. Should be placed by the owner of the tenement2. Industry or works must be carried on in a building3. Directly meet the needs of the industry or work4. Machines must be essential and principal elements in the industry, and not merely incidental

· Effect of separation (par.5)

1. If no longer used in the industry – chattel

2. Temporary separation but still needed in the industry – real property· Machinery placed by tenant – personal· Tenant promised to give the machinery – real to the owner· Tenant acted as agent of owner – real· Cannot be real property if placed by person having TEMPORARY RIGHT only· Electric poles/towers – personal properties, because it does not fall in par.1,3, & 5.

Par.6 -

1. Animals inside – real property2. Same with animals temporarily outside but with intent to return

· Par.7 – Fertilizers should be actually used in land· Par.8 – mines, slag dumps, etc· Par.9 – floating house vs. vessel· Par.10 – pertaining to “rights” – real property by analogy

The properties referred to in paragraph 10 are not material things but rights, which are necessarily intangible.(See 3 Manresa 11).

The piece of paper on which the contract for public works has been written is necessarily personal property, but the contract itself, or rather, the right to the contract, is real property.

Art. 416. The following things are deemed to be personal property:

(1) Those movables susceptible of appropriation whichare not included in the preceding article;

(2) Real property which by any special provision of lawis considered as personalty;

(3) Forces of nature which are brought under controlby science; and

(4) In general, all things which can be transported fromplace to place without impairment of the real property towhich they are fixed.

· Growing crops – personal property for purposes of chattel mortgage law and attachment· Test of what may be stole – it is of value and may be appropriated by a person other than the owner

TEST: whether movable or immovable

1. Property is capable of being carried from place to place (Test by DESCRIPTION)2. Change in location can be made without injuring real property to which it is attached. (Test by DESCRIPTION)3. Object is not enumerated in ART 415 (Test by EXCLUSION)

· Test by EXCLUSION is superior to the test by description.· Patent, copyright, right to invention – personal property

Art. 417. The following are also considered as personal property:

(1) Obligations and actions which have for their objectmovables or demandable sums; and

(2) Shares of stock of agricultural, commercial andindustrial entities, although they may have real estate.

· Obligations and actions over movables and demandable sums· Shares of stocks

· If object is illegal – not considered demandable so no right exists

· If the only property of a corporation is real property – shares of stock is still personal property

· MONEY, whether legal tender or merchandise – personal property

Art. 418. Movable property is either consumable or nonconsumable. To the first class belong those movables which cannot be used in a manner appropriate to their nature without their being consumed; to the second class belong all the others.

· Consumable – by nature, cannot be used without being consumed· Non-consumable – any other property· Fungible – if agreed that the equivalent be returned· Non-fungible – identical thing be returned

Art. 419. Property is either of public dominion or of private ownership

Art. 420. The following things are property of publicdominion:

(1) Those intended for public use, such as roads, canals,rivers, torrents, ports and bridges constructed by the State,banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being forpublic use, and are intended for some public service or forthe development of the national wealth.

· Public Dominion – ownership by the State, it has control and administration· OR ownership by the public in general

Three Kinds:

1. Public use – may be used by anybody2. Public service – may be used only by duly authorized persons3. Development of national wealth – e.g. natural resources

· Canals constructed by the State – Public Domain· Canals constructed by private persons – private

Characteristics of Properties of Public Dominion:

1. Outside the commerce of man2. Cannot be acquired by prescription3. Cannot be registered or subject of a Torrens title4. Cannot be levied upon by execution, nor can they be attached5. Generally, they can be used by everybody6. Either real or personal property

· Registration of properties of Public domain does not confer ownership

· Inclusion in title does not confer title

· Forest lands cannot be registered

· Right of public character cannot be transferred except through succession

· Allowing the use of canals by others – the owner losses the exclusive right to use the same

· Agricultural land may be acquired by private persons

· Forest and mining lands may not be transferred but may be leased

· Public agricultural lands – alienable portions NOT classified as forest or mineral lands, may be acquired, if made available becoming patrimonial properties

· Proper licensee owns forest products obtained by other entities

· Classification and re-classification of Public lands – prerogative of the executive department

· Government lands – includes public and patrimonial lands

· Public Land Act: Land is alienable public land Open, continuous, adverse possession

Art. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property.

· Patrimonial property – not devoted to public use, public service, or development of national wealth.· Owned by the State in its private capacity.Examples:1. Friar lands2. San Lazaro Estate3. Lands obtained in escheat proceedings4. Municipal owned waterworks system· Patrimonial properties may be acquired through prescription

Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State.

· When not devoted to public use, public service or development of national wealth – patrimonial property.

· Executive and legislative – authority to make SUCH declaration

Art. 423. The property of provinces, cities, and municipalities is divided into property for public use and patrimonial property.

For POLITICAL SUBDIVISIONS:1. Public use2. Patrimonial property· A municipality is a juridical person capable of acquiring properties· National Government – Central Government· Government of the Philippines - totality

Art. 424. Property for public use, in the provinces, cities and municipalities consist of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities.

All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws.

· Properties of political subdivisions for Public service – patrimonial

· Patrimonial property – not ordinary private property, acquisition should NOT impair certain governmental activities.

· Properties that came from the State – the Government controls the disposition of properties of political subdivisions.

· Absence of proof that political subdivisions acquired the properties with their own funds – presume that it came from the State.

Types of Properties of Political Subdivisions:

1. Acquired through their own funds2. Those subject to the control and supervision of the State – held in trust by the State to them·

Properties for PUBLIC USE may not be leased – reimburse the rents if NO benefit was gained by lessee

· Properties of patrimonial in nature may be levied upon or attached

Art. 425. Property of private ownership, besides the patrimonial property of the State, provinces, cities, and municipalities, consists of all property belonging to private persons, either individually or collectively.

· Private properties – may be owned individually or collectively

· Possession since time immemorial – presumption that it never been part of public domain

· Error in Torrens title which includes government properties – may only be questioned by the government.

· Payment of land tax is not an evidence of ownership if there is a Torrens title

· Acquisition of land by aliens – prohibited (absolute)

PROVISIONS COMMON TO THETHREE PRECEDING CHAPTERS

Art. 426. Whenever by provision of the law, or an individual declaration, the expression “immovable things or property,” or “movable things or property,” is used, it shall be deemed to include, respectively, the things enumerated in Chapter 1 and in Chapter 2.

Whenever the word “muebles,” or “furniture,” is used alone, it shall not be deemed to include money, credits, commercial securities, stocks, and bonds, jewelry, scientifi c or artistic collections, books, medals, arms, clothing, horses or carriages and their accessories, grains, liquids and merchandise, or other things which do not have as their principal object the furnishing or ornamenting of a building, except where from the context of the law, or the individual declaration, the contrary clearly appears.

· Furnitures

· The article enumerates things not included in the term Furnitures

· Money, credit, securities, stocks, jewelry, etc.

Use of the Word ‘Muebles’

This word is used synonymously with “furniture.” Note that furniture has generally for its principal object the furnishing or ornamenting of a building. Found in the old Code, the use of “muebles” was retained by the Code Commission, evidently because many people are acquainted with its meaning. (See 1 Capistrano, Civil Code, p. 371). Note the enumerations of things which are not included in the term “furniture.”