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J. Modes-of-acquiring-ownership

NOTICE:

1. Please note that these are the modes of acquiring ownership recognized by the Civil Code, to wit: (1) occupation, (2) intellectual creation, (3) law, (4) donation, (5) succession, (6) tradition in consequence of certain contracts, and (7) prescription. (Heirs of Sps. Seraspi v. CA, G.R. No. 135602, 28 April 2000)

2. The discussion under this section is limited to the topics mentioned in the syllabus.

1. Occupation

a. CONCEPT

Ownership is acquired by occupation and by intellectual creation.(Article 712, Civil Code)

Ownership and other real rights over property are acquired and transmitted by law, by donation, by estate and intestate succession, and in consequence of certain contracts, by tradition.(Paragraph 2, Article 712, Ibid.)

They may also be acquired by means of prescription. (Paragraph 3, Article 712, Ibid.)

1) Covered

Things appropriable by nature which are without an owner, such as animals that are the object of hunting and fishing, hidden treasure and abandoned movables, are acquired by occupation. (Article 713, Ibid.)

a) Insects and animals

The owner of a swarm of bees shall have a right to pursue them to another’s land, indemnifying the possessor of the latter for the damage. If the owner has not pursued the swarm, or ceases to do so within two consecutive days, the possessor of the land may occupy or retain the same. The owner of domesticated animals may also claim them within twenty days to be counted from their occupation by another person. This period having expired, they shall pertain to him who has caught and kept them. (Article 716, Ibid.)

Pigeons and fish which from their respective breeding places pass to another pertaining to a different owner shall belong to the latter, provided they have not been enticed by some article of fraud. (Article 717, Ibid.)

2) Excluded

The ownership of a piece of land cannot be acquired by occupation. (Article 714, Ibid.)

b. HIDDEN TREASURE

1) Concept and nature

By treasure is understood, for legal purposes, any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear. (Article 439, Ibid.)

2) In another’s property

He who by chance discovers hidden treasure in another’s property shall have the right granted him in article 438 of this Code. (Article 718, Ibid.)

Hidden treasure belongs to the owner of the land, building, or other property on which it is found.(Article 438, Ibid.)

Nevertheless, when the discovery is made on the property of another, or of the State or any of its subdivisions, and by chance, one-half thereof shall be allowed to the finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure.(Paragraph 2, Article 438, Ibid.)

If the things found be of interest to science of the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated.(Paragraph 3, Article 438, Ibid.)

c. NOT TREASURE

1) Obligation to return to previous possessor

2) If unknown, mayor of the city/municipality

Whoever finds a movable, which is not treasure, must return it to its previous possessor. If the latter is unknown, the finder shall immediately deposit it with the mayor of the city or municipality where the finding has taken place.

a) Notice and publication

The finding shall be publicly announced by the mayor for two consecutive weeks in the way he deems best.(Paragraph 2, Article 719, Ibid.)

b) When sold at public auction

If the movable cannot be kept without deterioration, or without expenses which considerably diminish its value, it shall be sold at public auction eight days after the publication. (Paragraph 3, Article 719, Ibid.)

c) When awarded to the finder

Six months from the publication having elapsed without the owner having appeared, the thing found, or its value, shall be awarded to the finder. The finder and the owner shall be obliged, as the case may be, to reimburse the expenses. (Paragraph 4, Article 719, Ibid.)

3) Obligation to give reward

If the owner should appear in time, he shall be obliged to pay, as a reward to the finder, one-tenth of the sum or of the price of the thing found. (Article 720, Ibid.)

2. Donation

a. CONCEPT

Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. (Article 725, Ibid.)

Ownership and other real rights over property are acquired and transmitted by donation. (Paragraph 2, Article 712, Civil Code)

1) When perfected

The donation is perfected from the moment the donor knows of the acceptance by the donee. (Article 734, Ibid.)  

2) Gratuitous act

Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. (Article 725, Ibid.)  

a) By reason of merits or services rendered

When a person gives to another a thing or right on account of the latter’s merits or of the services rendered by him to the donor, provided they do not constitute a demandable debt, or when the gift imposes upon the donee a burden which is less than the value of the thing given, there is also a donation. (Article 726, Ibid.)

b. KINDS OF DONATIONS

Donations, according to its purpose or cause, may be categorized as:

1) Pure donation (or Simple donation);

2) Remuneratory donation (or Compensatory donation);

3) Conditional donation (or Modal donation); and

4) Onerous donation.

1) Simple donation

A pure or simple donation is one where the underlying cause is plain gratuity. This is donation in its truest form. (Republic of the Philippines v. Silim, G.R. No. 140478, 02 April 2001)

2) Remuneratory donation

A remuneratory or compensatory donation is one made for the purpose of rewarding the donee for past services, which services do not amount to a demandable debt. (Republic of the Philippines v. Silim, G.R. No. 140478, 02 April 2001)

3) Conditional donation (or Modal donation)

A conditional or modal donation is one where the donation is made in consideration of future services or where the donor imposes certain conditions, limitations or charges upon the donee, the value of which is inferior than that of the donation given. (Republic of the Philippines v. Silim, G.R. No. 140478, 02 April 2001)

4) Onerous donation

An onerous donation is that which imposes upon the donee a reciprocal obligation or, to be more precise, this is the kind of donation made for a valuable consideration, the cost of which is equal to or more than the thing donated. (Republic of the Philippines v. Silim, G.R. No. 140478, 02 April 2001)

Donations with an onerous cause shall be governed by the rules on contracts and remuneratory donations by the provisions of the present Title as regards that portion which exceeds the value of the burden imposed. (Article 733, Ibid.)  

c. CONDITIONS

1) Illegal or impossible conditions

Illegal or impossible conditions in simple and remuneratory donations shall be considered as not imposed. (Article 727, Ibid.)  

2) Upon death

Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions, and shall be governed by the rules established in the Title on Succession. (Article 728, Ibid.)  

3) Upon lifetime: donation inter vivos

When the donor intends that the donation shall take effect during the lifetime of the donor, though the property shall not be delivered till after the donor’s death, this shall be a donation inter vivos. The fruits of the property from the time of the acceptance of the donation, shall pertain to the donee, unless the donor provides otherwise. (Article 729, Ibid.)  

Donations which are to take effect inter vivos shall be governed by the general provisions on contracts and obligations in all that is not determined in this Title. (Article 732, Ibid.)

a) Suspensive condition

The fixing of an event or the imposition of a suspensive condition, which may take place beyond the natural expectation of life of the donor, does not destroy the nature of the act as a donation inter vivos, unless a contrary intention appears. (Article 730, Ibid.)

b) Resolutory condition

When a person donates something, subject to the resolutory condition of the donor’s survival, there is a donation inter vivos. (Article 731, Ibid.)  

d. DONORS AND DONEES

1) Donors

The donor’s capacity shall be determined as of the time of the making of the donation. (Article 737, Ibid.)

a) Covered

GENERAL RULE: All persons who may contract and dispose of their property may make a donation. (Article 735, Ibid.)

EXCEPTION: Who cannot be donors:

Guardians and trustees cannot donate the property entrusted to them. (Article 736, Ibid.)

The following donations shall be void:

1) Those made between persons who were guilty of adultery or concubinage at the time of the donation;

2) Those made between persons found guilty of the same criminal offense, in consideration thereof;

3) Those made to a public officer or his wife, descedants and ascendants, by reason of his office.

In the case referred to in No. 1, the action for declaration of nullity may be brought by the spouse of the donor or donee; and the guilt of the donor and donee may be proved by preponderance of evidence in the same action. (Article 739, Ibid.)

2) Donees

a) Covered

GENERAL RULE: All those who are not specially disqualified by law therefor may accept donations. (Article 738, Ibid.)

EXCEPTION: Who cannot be donees

Incapacity to succeed by will shall be applicable to donations inter vivos.(Article 740, Ibid.)

Donations made to incapacitated persons shall be void, though simulated under the guise of another contract or through a person who is interposed.(Article 743, Ibid.)

EXCEPTION TO THE EXCEPTION: Minors and others who cannot enter into a contract may become donees but acceptance shall be done through their parents or legal representatives. (Article 741, Ibid.)

Donations made to conceived and unborn children may be accepted by those persons who would legally represent them if they were already born. (Article 742, Ibid.)

b) Acceptance required

The donee must accept the donation personally, or through an authorized person with a special power for the purpose, or with a general and sufficient power; otherwise, the donation shall be void. (Article 745, Ibid.)

Acceptance must be made during the lifetime of the donor and of the donee. (Article 746, Ibid.)

Persons who accept donations in representation of others who may not do so by themselves, shall be obliged to make the notification and notation of which Article 749 speaks. (Article 747, Ibid.)

c) Double donation

Donations of the same thing to two or more different donees shall be governed by the provisions concerning the sale of the same thing to two or more different persons. (Article 744, Ibid.)

e. MANNER OF DONATIONS

1) Movable property

The donation of a movable may be made orally or in writing. (Article 748, Ibid.)

An oral donation requires the simultaneous delivery of the thing or of the document representing the right donated. (Paragraph 2, Article 748, Ibid.)

If the value of the personal property donated exceeds five thousand pesos, the donation and the acceptance shall be made in writing, otherwise, the donation shall be void. (Paragraph 3, Article 748, Ibid.)

2) Immovable property

In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy.(Article 749, Ibid.)

The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor. (Paragraph 2, Article 749, Ibid.)

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments. (Paragraph 3, Article 749, Ibid.)

f. EFFECT OF DONATIONS

1) Scope of donation

a) All present property

(1) Reserve for support

The donations may comprehend all the present property of the donor, or part thereof, provided he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor. Without such reservation, the donation shall be reduced in petition of any person affected. (Article 750, Ibid.)

(2) Legitime

The provisions of Article 750 notwithstanding, no person may give or receive, by way of donation, more than he may give or receive by will.(Article 752, Ibid.)

The donation shall be inofficious in all that it may exceed this limitation. (Paragraph 2, Article 752, Ibid.)

b) Not applicable to future property

Donations cannot comprehend future property.(Article 751, Ibid.)

By future property is understood anything which the donor cannot dispose of at the time of the donation. (Paragraph 2, Article 751, Ibid.)

2) Multiple donees

a) Equal shares

(1) Right of accretion

GENERAL RULE:When a donation is made to several persons jointly, it is understood to be in equal shares, and there shall be no right of accretion among them, unless the donor has otherwise provided.(Article 753, Ibid.)

EXCEPTION:The preceding paragraph shall not be applicable to donations made to the husband and wife jointly, between whom there shall be a right of accretion, if the contrary has not been provided by the donor. (Paragraph 2, Article 753, Civil Code)

3) Subrogation

The donee is subrogated to all the rights and actions which in case of eviction would pertain to the donor. (Article 754, Ibid.)

4) Warranty by donor

GENERAL RULE: The donor is not obliged to warrant the things donated. (Article 754, Ibid.)

EXCEPTION: … save when the donation is onerous, in which case the donor shall be liable for eviction to the concurrence of the burden.(Article 754, Ibid.)

The donor shall also be liable for eviction or hidden defects in case of bad faith on his part. (Paragraph 2, Article 754, Ibid.)

5) Eviction

Donor is liable for eviction if:

1) Donation is onerous; and

2) Bad faith on his part.

When the donation is onerous, the donor shall be liable for eviction to the concurrence of the burden.(Article 754, Ibid.)

The donor shall also be liable for eviction or hidden defects in case of bad faith on his part. (Paragraph 2, Article 754, Ibid.)

6) Hidden defects

The donor shall be liable for hidden defects in case of bad faith on his part. (Paragraph 2, Article 754, Ibid.)

7) Reserved by donor

The right to dispose of some of the things donated, or of some amount which shall be a charge thereon, may be reserved by the donor; but if he should die without having made use of this right, the property or amount reserved shall belong to the donee. (Article 755, Ibid.)

8) Usufruct

The ownership of property may also be donated to one person and the usufruct to another or others, provided all the donees are living at the time of the donation. (Article 756, Ibid.)

9) Reversion

Reversion may be validly established in favor of only the donor for any case and circumstances, but not in favor of other persons unless they are all living at the time of the donation.(Article 757, Ibid.)

Any reversion stipulated by the donor in favor of a third person in violation of what is provided in the preceding paragraph shall be void, but shall not nullify the donation. (Paragraph 2, Article 757, Ibid.)

10) Obligation to pay debts of donor

a) Only for past debts

b) Debts do not exceed value of property

When the donation imposes upon the donee the obligation to pay the debts of the donor, if the clause does not contain any declaration to the contrary, the former is understood to be liable to pay only the debts which appear to have been previously contracted. In no case shall the donee be responsible for the debts exceeding the value of the property donated, unless a contrary intention clearly appears. (Article 758, Ibid.)

11) In fraud of creditors

a) Responsibility of donee

There being no stipulation regarding the payment of debts, the donee shall be responsible therefor only when the donation has been made in fraud of creditors. (Article 759, Ibid.)

b) When presumption applies

The donation is always presumed to be in fraud of creditors, when at the time thereof the donor did not reserve sufficient property to pay his debts prior to the donation. (Paragraph 2, Article 759, Ibid.)

g. Revocation and reduction of donations

1) Grounds

a) Revocation or reduction grounds

Every donation inter vivos, made by a person having no children or descendants, legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or reduced as provided in the next article, by the happening of any of these events:

1) If the donor, after the donation, should have legitimate or legitimated or illegitimate children,

even though they be posthumous;

2) If the child of the donor, whom the latter believed to be dead when he made the donation, should turn out to be living;

3) If the donor subsequently adopt a minor child. (Article 760, Ibid.)

In the cases referred to in the preceding article, the donation shall be revoked or reduced insofar as it exceeds the portion that may be freely disposed of by will, taking into account the whole estate of the donor at the time of the birth, appearance or adoption of a child. (Article 761, Ibid.)

b) Effects

(1) Return of donated property or its value if already sold

Upon the revocation or reduction of the donation by the birth, appearance or adoption of a child, the property affected shall be returned or its value if the donee has sold the same. (Article 762, Ibid.)

When the property cannot be returned, it shall be estimated at what it was worth at the time of the donation. (Paragraph 3, Article 762, Ibid.)

(2) Redemption of mortgage

If the property is mortgaged, the donor may redeem the mortgage, by paying the amount guaranteed, with a right to recover the same from the donee.(Paragraph 2, Article 762, Ibid.)

When the property cannot be returned, it shall be estimated at what it was worth at the time of the donation. (Paragraph 3, Article 762, Ibid.)

(3) Return of fruits only from filing of complaint

When the donation is revoked for any of the causes stated in Article 760, or by reason of ingratitude, or when it is reduced because it is inofficious, the donee shall not return the fruits except from the filing of the complaint. (Article 768, Ibid.)

(4) The 4-year prescription

The action for revocation or reduction on the grounds set forth in article 760 shall prescribe after four years from the birth of the first child, or from his legitimation, recognition or adoption, or from the judicial declaration of filiation, or from the time information was received regarding the existence of the child believed dead.(Article 763, Ibid.)

This action cannot be renounced, and is transmitted, upon the death of the donor, to his legitimate and illegitimate children and descendants. (Paragraph 2, Article 763, Ibid.)

2) Revocation; Additional grounds

a) Non-compliance with any of the conditions of the donation

(1) Concept

The donation shall be revoked at the instance of the donor, when the donee fails to comply with any of the conditions which the former imposed upon the latter.(Article 764, Ibid.)

(a) Return of donated property

In this case, the property donated shall be returned to the donor, the alienations made by the donee and the mortgages imposed thereon by him being void, with the limitations established, with regard to third persons, by the Mortgage Law and the Land Registration Laws. (Paragraph 2, Article 764, Ibid.)

(b) Return of fruits

If the revocation is based upon noncompliance with any of the conditions imposed in the donation, the donee shall return not only the property but also the fruits thereof which he may have received after having failed to fulfill the condition. (Paragraph 2, Article 768, Ibid.)

(2) The 4-year prescription

This action shall prescribe after four years from the noncompliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donee’s heirs. (Paragraph 4, Article 764, Ibid.)

b) Revocation due to ingratitude

(1) Cases

The donation may also be revoked at the instance of the donor, by reason of ingratitude in the following cases:

1) If the donee should commit some offense against the person, the honor or the property of the donor, or of his wife or children under his parental authority;

2) If the donee imputes to the donor any criminal offense, or any act involving moral turpitude, even though he should prove it, unless the crime or the act has been committed against the donee himself, his wife or children under his authority;

3) If he unduly refuses him support when the donee is legally or morally bound to give support to the donor. (Article 765, Ibid.)

(2) Effects

(a) Alienations or mortgages subsist

Although the donation is revoked on account of ingratitude, nevertheless, the alienations and mortgages effected before the notation of the complaint for revocation in the Registry of Property shall subsist.(Article 766, Ibid.)

Later ones shall be void. (Ibid.)

(b) Demand value of property or sum of the mortgage

In the case referred to in the first paragraph of the preceding article, the donor shall have a right to demand from the donee the value of property alienated which he cannot recover from third persons, or the sum for which the same has been mortgaged.(Article 767, Ibid.)

The value of said property shall be fixed as of the time of the donation. (Paragraph 2, Article 767, Ibid.)

(c) Return of fruits only from filing of complaint

When the donation is revoked for any of the causes stated in Article 760, or by reason of ingratitude, or when it is reduced because it is inofficious, the donee shall not return the fruits except from the filing of the complaint. (Article 768, Ibid.)

(3) Non-renunciation

The action granted to the donor by reason of ingratitude cannot be renounced in advance. (Article 769, Ibid.)

(4) The 1-year prescription

This action prescribes within one year, to be counted from the time the donor had knowledge of the fact and it was possible for him to bring the action.(Article 769, Ibid.)

(5) Non-transferrable

This action shall not be transmitted to the heirs of the donor, if the latter did not institute the same, although he could have done so, and even if he should die before the expiration of one year.(Article 770, Ibid.)

Neither can this action be brought against the heir of the donee, unless upon the latter’s death the complaint has been filed.(Paragraph 2, Article 770, Ibid.)

3) Reduction; Additional effects

a) Inofficious donation; reduction on the excess

Donations which in accordance with the provisions of Article 752, are inofficious, bearing in mind the estimated net value of the donor’s property at the time of his death, shall be reduced with regard to the excess; but this reduction shall not prevent the donations from taking effect during the life of the donor, nor shall it bar the donee from appropriating the fruits.(Article 771, Ibid.)

For the reduction of donations the provisions of this Chapter and of Articles 911 and 912 of this Code shall govern. (Paragraph 2, Article 771, Ibid.)

The provisions of Article 750 notwithstanding, no person may give or receive, by way of donation, more than he may give or receive by will. (Article 752, Ibid.)

The donation shall be inofficious in all that it may exceed this limitation. (Paragraph 2, Article 752, Ibid.)

The donations may comprehend all the present property of the donor, or part thereof, provided he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor. Without such reservation, the donation shall be reduced in petition of any person affected. (Article 750, Ibid.)

b) Who may ask for reduction

Only those who at the time of the donor’s death have a right to the legitime and their heirs and successors in interest may ask for the reduction or inofficious donations. (Article 772, Ibid.)

Those referred to in the preceding paragraph cannot renounce their right during the lifetime of the donor, either by express declaration, or by consenting to the donation. (Paragraph 2, Article 772, Ibid.)

The donees, devisees and legatees, who are not entitled to the legitime and the creditors of the deceased can neither ask for the reduction nor avail themselves thereof. (Paragraph 3, Article 772, Ibid.)

c) Multiple donations

If, there being two or more donations, the disposable portion is not sufficient to cover all of them, those of the more recent date shall be suppressed or reduced with regard to the excess. (Article 773, Ibid.)

3. Prescription

a. CONCEPT

Ownership and other real rights over property may also be acquired by means of prescription. (Paragraph 3, Article 712, Ibid.)

By prescription, one acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law.(Article 1106, Ibid.)

In the same way, rights and conditions are lost by prescription. (Paragraph 2, Article 1106, Ibid.)

1) Kinds of prescription for acquiring property:

There are two kinds of prescription provided in the Civil Code: (a) acquisitive, and (b) extinctive. (De Morales v. CFI of Misamis Occidental, G.R. No. L-52278, 29 May 1980)

a) Acquisitive

Acquisitive prescription is the acquisition of a right by the lapse of time. (Art. 1106, par. 1) Other names for acquisitive prescription are adverse possession and usucapcion. (Ibid.)

b) Extinctive

The other kind is extinctive prescription whereby rights and actions are lost by the lapse of time. (Arts, 11 06, par. 2 and 1139.) Another name for extinctive prescription is litigation of action. (Ibid.)

2) Scope of properties

All things which are within the commerce of men are susceptible of prescription, unless otherwise provided. Property of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription. (Article 1113, Ibid.)

b. WHO CAN ACQUIRE VIA PRESCRIPTION

1) In general

Persons who are capable of acquiring property or rights by the other legal modes may acquire the same by means of prescription.(Article 1107, Ibid.)

Minors and other incapacitated persons may acquire property or rights by prescription, either personally or through their parents, guardians or legal representatives. (Paragraph 2, Article 1107, Ibid.)

2) Married woman

Prescription, acquisitive and extinctive, runs in favor of, or against a married woman. (Article 1110, Ibid.)

3) Co-proprietor or co-owner

Prescription obtained by a co-proprietor or a co-owner shall benefit the others. (Article 1111, Ibid.)

4) Creditors

Creditors and all other persons interested in making the prescription effective may avail themselves thereof notwithstanding the express or tacit renunciation by the debtor or proprietor. (Article 1114, Ibid.)

c. WHO CANNOT ACQUIRE VIA PRESCRIPTION

1) In general

Prescription, both acquisitive and extinctive, runs against:

1) Minors and other incapacitated persons who have parents, guardians or other legal representatives;

2) Absentees who have administrators, either appointed by them before their disappearance, or appointed by the courts;

3) Persons living abroad, who have managers or administrators;

4) Juridical persons, except the State and its subdivisions. (Article 1108, Ibid.)

Persons who are disqualified from administering their property have a right to claim damages from their legal representatives whose negligence has been the cause of prescription. (Paragraph 2, Article 1108, Ibid.)

2) As between husband and wife

Prescription does not run between husband and wife, even though there be a separation of property agreed upon in the marriage settlements or by judicial decree. (Article 1109, Ibid.)

3) As between parents and children

Neither does prescription run between parents and children, during the minority or insanity of the latter, and between guardian and ward during the continuance of the guardianship. (Paragraph 2, Article 109, Ibid.)

4) Renunciation

Persons with capacity to alienate property may renounce prescription already obtained, but not the right to prescribe in the future.(Article 1112, Ibid.)

Prescription is deemed to have been tacitly renounced when the renunciation results from acts which imply the abandonment of the right acquired. (Paragraph 2, Article 1112, Ibid.)

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