Group report in Property (Modes of Extinguishing Ownership) Reporters: - Mark Jerome Dizon - Karen P. Lustica - Randel Bejasa - Rolando Acuña

1. MODES OF
EXTINGUISHING
OF OWNERSHIP
Reported by: Mark Jerome Dizon, Karen P. Lustica, Randel Bejasa &
Rolando Acuña

2. MODES OF EXTINGUISHING OF
OWNERSHIP
A. VOLUNTARY MODES
B. INVOLUNTARY MODES
1. Abandonment
2. Alienation
3. Voluntary Destruction
1. Fortuitous loss or
destruction
2. Accession continua
3. Rescissory actions
4. Judicial decree
5. By operation of law

3. 1. Abandonment
(Art. 555 par.1 NCC) - it is the voluntary renunciation of rights which a
person has over a thing thereby allowing a third person to acquire
ownership or possession thereof by means of occupancy. (de Leon,
2011)
A. Who may abandon? – The abandoner may be the owner or a mere
possessor, but the latter obviously cannot abandon ownership which
belongs to another. Since abandonment involves the renunciation of a
property right, the abandoner must have right to the thing possessed
and the legal capacity to renounce it (Arts. 38-39) (de Leon, 2011) (de
Leon, 2011)

4. B. There must be an intention to abandon – An owner of a property cannot be
held to have abandoned the same until at least he has some knowledge of the
loss of its possession or of the thing, and a thing cannot be considered
abandoned under the law until the spes recuperandi (hope of recovery) is gone
and the animus revertendi (intention to return) is finally given up. (de Leon,
2011)
Effect of abandonment - by voluntary abandonment a thing becomes without
an owner or possessor and is converted into res nullius and may thus be
acquired by a third person by occupation (prescription). Here, there is not only
loss of occupancy or actual possession but also of real rights to possession – not
only a physical relinquishment but also an intention not to reclaim ownership or
enjoyment thereof. (de Leon, 2011)

5. Not applicable to land
Abandonment which converts the thing into res nullius (nobody's
property) ownership which may be acquired by occupation, can hardly
apply to land, as to which said mode of acquisition is not available (see
Art. 714), let alone to registered land to which no title in derogation to
that of the registered owner shall be acquired by prescription or
possession. (de Leon, 2011)

6. Prescription (Art. 1106)
It is a means of acquiring ownership and other real rights or losing rights
or actions to enforce such rights through the lapse of time.
1. Acquisitive prescription - one acquires ownership and other real rights
through the lapse of time in the manner and under the conditions laid
down by law.
a. Ordinary – requires the possession of things in good faith and with a
just title for the time fixed by law;
b. Extraordinary – does not require good faith or just title but possession
for a period longer than ordinary acquisitive prescription

7. Q: What is the basis of acquisitive prescription?
A: It is based on the assertion of a usurper of an adverse right for such a
long period of time, uncontested by the true owner of the right, as to
give rise to the presumption that the latter has given up such right in
favour of the former. (Tolentino, Civil Code of the Philippines, Vol. IV, p.
2)
Q: What is extraordinary prescription?
A: Prescription where the possessor is in bad faith. It does not require
good faith or just title but possession for a period longer than ordinary
acquisitive prescription (Pineda Succession and Prescription, p. 607, 2009
ed)

8. Q: How does ownership of personal property prescribe?
A: Through uninterrupted possession for 8 years, without need of any
other condition. (Art. 1132)
Q: How about ownership and other real rights over immovables?
A: They prescribe through uninterrupted adverse possession for 30
years, without need of title or of good faith (Art. 1137)

9. Extinctive prescription – loss of property rights or actions through the
possession by another of a thing for the period provided by law or failure
to bring the necessary action to enforce one’s right with in the period
fixed by law.

10. 2. Alienation (Assignment)
It means the complete transmission of the thing or right to another by
any lawful manner. It may either be onerous or gratuitous.
-In a contract of sale, the seller loses the ownership of the things sold in
favour of the buyer upon delivery.
*Ownership is transferred, among other means, by tradition. The
delivery of a thing constitutes a necessary and indispensable requisite for
the purpose of acquiring the ownership of the same by virtue of a
contract. (de Leon, 2011)

11. Kinds of tradition (delivery)
- Real tradition or physical delivery – takes place when the thing is
physically delivered to the buyer.
- Constructive tradition – not real or material but consists in certain facts
indicative of the same.
a. Symbolical tradition – done through delivery of signs or things which
represent the thing being transmitted.
b. Tradition by public instrument – real delivery of possession by a public
writing of a document which evidences the transaction.
c. Traditio longa manu – made by pointing out to the grantee the thing
to be delivered which must be within his sight.

12. d. Tradition brevi manu – grantee is already in possession of the thing
under another title (lessee buys the thing leased to him)
e. Tradition constitutum possessorium – similar to tradition brevi manu
but in the opposite sense and that is when the owner alienates a thing
but remains in possession in another concept such as a lessee or
depositary.

13. Quasi tradition – delivery of incorporeal things or rights by the use of
the grantee of his rights with the grantor’s consent
Tradition by operation of law – not included in the foregoing modes of
delivery and is effected solely by virtue of an express provision of law.

14. Donation (Art. 725)
An act of liberality whereby a person disposes gratuitously of a thing in
favour of another, who accepts it.
A donor loses his rights over the property on three (3) instances:
a. Inter vivos – takes effect during the lifetime of the donor (Arts. 729,
730, 731 NCC)
b. Mortis causa – takes effect upon the death of the donor (Art. 728
NCC)
c. Propter nuptias – takes effect by virtue of marriage, in consideration
of the same, in favour of one or both of the future spouses. (Art. 82,
Family Code)

15. 3. Voluntary Destruction
- If the person voluntary destroys his or
her own property without prejudice to
the rights of the others
- Article 428, paragraph 1: The owner
has the right to enjoy and dispose of a
thing, without other limitations than
those established by law.
- Ex. Ely Buendia of the Eraserheads
voluntary burned his old piano which
had been featured in the band’s Sticker
Happy Album.

16. B. INVOLUNTARY MODES
1. Fortuitous loss or destruction
- Legal loss or Fortuitous loss through
- force majeure, unexpected or uncontrollable event
- fortuitous event proper or act of God
- When it goes out of commerce of man
- Means that the thing owned perishes
- Disappears in such a way that its existence is unknown or it cannot be
recovered

18. 2. Accession continua
- Right pertaining to the owner of a thing over everything which is
incorporated or attached thereto, either naturally or artificially.
I. With regard to immovable property:
A. Accession industrial, or that which takes place in case of:
1. Building;
2. Planting; or
3. Sowing

19. B. Accession natural, which may be in the form of either:
1. Alluvium;
2. Avulsion;
3. Change of river beds (Art. 461); or
4. Formation of islands (Art. 464 and 465)
II. With regard to movable property:
a.Adjunction or conjunction;
b.Commixtion or confusion;
c.Specification

20. Extinguishment of Ownership through Accession Continua
I. Building, Planting, Sowing
A. RULES WHEN LAND OWNER (LO) CONSTRUCTS OR PLANTS ON HIS LAND
WITH MATERIALS OF ANOTHER (OM). (447)
LO in Good Faith; OM in Bad Faith

21. B. RULES WHEN A 3RD PERSON BUILDS, SOWS OR PLANTS (BPS) ON
LANDOWNER’S (LO) LAND. (448)
LO in Good Faith; BPS in Bad Faith

22. Remedies if option exercised by the Landowner was compulsory selling
and Builder fails to pay:
1.Leave things as they are and assume relation of lessor and lessee; pay
rents
2.Demolish what has been built, sown or planted. (Ignacio vs. Hilario)
3.Consider price of land as an ordinary money debt of the builder.
Therefore he may enforce payment thru an ordinary action for recovery
of a money debt (levy and execution).

23. II.
Alluvium
a. To the owners of the lands adjoining the banks of rivers belong the
accretion which they gradually receive from the effects of the current of
waters.
i. Accretion belongs to the owner of the land to which the attachment is
made ipso jure;
ii. Registered owner (of the land lost) is not protected by its registration.
iii. Registration by riparian owner is required; otherwise it may be acquired
through prescription by a third person.

24. III.
Avulsion
a. Accretion which takes place whenever the current of a river, creek,
torrent or lake segregates from an state on its bank a known portion of land
and transfer it to another state.
i.
Ownership is retained by the owner of the land from which it is
detached, at least or a certain period.
1. Should be removed by the original owner within two (2) years, otherwise it
should be adjudicated to the owner of the land to which the portion has been
transferred;
2. Uprooted trees should be claimed within 6 months, with corresponding
payment of the expenses incurred in gathering or putting them in a safe place.

25. IV.
Change of River Beds
V.
Adjunction or conjunction
a.
When the owner of the accessory had acted in bad faith;
The accessory owner shall lose the thing incorporated and shall have the
obligation to indemnify the owner of the principal thing for the damages he
may have suffered.
b.
When the owner of the principal had acted in bad faith.
Accessory owner shall have a right to choose between the principal paying
him the value of the accessory thing or that the thing belonging to him be
separated, in both cases he shall be indemnified for damages

26. VI.
Mixture or confusion
One who caused the mixture or confusion acted in bad faith, he shall lose the
thing belonging to him, besides being obliged to pay indemnity for the
damages caused to the owner of the other thing with which his own has
mixed.
VII. Specification
If in the making of the bad faith intervened, the owner of the material shall
have the right to appropriate the work for himself without paying to the
maker, or demand the latter that he indemnify for the value of the material
and the damages he may suffered.

27. 3. Rescissory actions
Art. 1191. The power to rescind obligations is implied in reciprocal ones,
in case one of the obligors should not comply with what is incumbent upon
him.
The injured party may choose between the fulfilment and the rescission of
the obligation, with the payment of damages in either case. He may also seek
rescission, even after he has chosen fulfilment, if the latter should become
impossible.
The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who
have acquired the thing, in accordance with Articles 1385 and 1388 and the
Mortgage Law. (1124)

28. On the other hand:
Art. 1380. Contracts validly agreed upon may be rescinded in the cases
established by law.
Art. 1381. The following contracts are rescissible:
(1) Those which are entered into by guardians whenever the wards whom
they represent suffer lesion by more than one-fourth of the value of the
things which are the object thereof;
(2) Those agreed upon in representation of absentees, if the latter suffer the
lesion stated in the preceding number;
(3) Those undertaken in fraud of creditors when the latter cannot in any other
manner collect the claims due them;

29. (4) Those which refer to things under litigation if they have been entered
into by the defendant without the knowledge and approval of the
litigants or of competent judicial authority;
(5) All other contracts specially declared by law to be subject to
rescission. (1291a)
Art. 1389. The action to claim rescission must be commenced within four
years.
For persons under guardianship and for absentees, the period of four
years shall not begin until the termination of the former's incapacity, or
until the domicile of the latter is known.

30. 4. Judicial decree
Ownership by a person is extinguished by way of judicial decision or judgment
of a court of law. This exist when the court ruled that the ownership of a
property was declared invalid and should be belong to the adverse party, the
ownership is extinguished due to the declaration of the court. The following
are some of the examples:
•
When the court order to cancel the registration of property due fraud
committed by the present owner.
•
When the court declared the selling of his property for the satisfaction
of his debt.
•
When the court decided to liquidate his property by his parents for the
share of other heirs.

31. •
When the court affirmed that the property be subject to expropriation
and just compensation.
o
Article 435. No person shall be deprived of his property except by
competent authority and for public use and always upon just compensation.
Should this requirement be not first complied with, the courts shall protect
and, in proper case, restore the owner in his possession.
•
Seizure by competent authority
o
Article 436. When any property is condemned or seized by competent
authority in the interest of health, safety or security, the owner shall not be
entitled to compensation, unless he can show that such condemnation or
seizure is unjustified.

32. 5. By operation of law
This is another involuntary mode of extinguishing ownership by way of
existing laws. This exist in the manner in which the ownership of a property is
automatically extinguished due to existing laws and not by mere agreement
or court order. This happens without the control of the owner, such as:
•
By death of the owner – the ownership automatically extinguished and
will be automatically transferred to the heirs.
•
Escheat by the government – when the property was the proceeds of a
crime it will be confiscated by the government authorities.
•
Chattel/Mortgage Property Foreclosure for the satisfaction his debt – his
property will be sold in a public auction and the proceeds will be paid for the
satisfaction of his debt.

33. •
Breach of contract – the property given by the government to the
beneficiary should be use in compliance with the agreement, violations will
results to the return of the property to the government.
•
By way of special such as CARP, Money Laundering Act, Graft and
Corruption Practices

34. OTHER MODES OF EXTINGUISHING OWNERSHIP:
1. Absolute – all persons are affected
a. Physical loss or destruction
b.
Legal loss or destruction (when it goes out of commerce of man)
*Discussed above

35. 2. Relative – only for certain persons for others may acquire their ownership
a.
Law
Ex.
Law governing lost property such as wallets, paintings, sculpture etc.
Extinguishment of ways.
o
Right of ways include the right to use the land of another for a special
purpose, such as a passageway. If the owner of the right of way purchases the
close over which the right of way lies, the right of way is extinguished.

36. b.
Succession
Ex. Family code, Article 43.
(2) The absolute community of property or the conjugal partnership, as the
case may be, shall be dissolved and liquidated, but if either spouse contracted
said marriage in bad faith, his or her share of the net profits of the community
property or conjugal partnership property shall be forfeited in favor of the
common children or, if there are none, the children of the guilty spouse by a
previous marriage or in default of children, the innocent spouse;
(5) The spouse who contracted the subsequent marriage in bad faith shall be
disqualified to inherit from the innocent spouse by testate and intestate
succession.

37. c. Tradition as a consequence
of certain contracts
Ex. The famous Jackson oak or the
Tree that owns itself.
f.
Destruction of the prior title
or right
Expropriation *Discussed
above
Rescission *Discussed above
d. Donation
*Discussed above
Annulment
Fulfilment of a resolutory
condition
g. Prescription
e. Abandonment
*Discussed above
*Discussed above

38. END OF REPORT