USUFRUCT – gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provide
• Real right, of temporary in nature, which authorizes its holder to enjoy all the benefits which result from the normal enjoyment of another’s property, with the obligation to return, at the designated time, either the same thing, or in special cases, its equivalent
• combination of right to use and right to the fruits
• right to dispose – “naked ownership”
• Full ownership = Naked ownership + Usufruct Essential Characteristics
1. Real right – whether Registered or not 2. Temporary in nature or duration
3. Its purpose is to enjoy the benefits and derive all the advantages from the object as a consequence of normal use or exploitation
Natural Characteristics
The obligation of CONSERVING or PRESERVING the FORM AND SUBSTANCE of the thing.
Accidental Characteristics
1. whether it be pure or a conditional usufruct 2. the number of years it will exist
3. whether it is in favor of one person or several, etc.
Object of Usufruct
1. may be real or personal property
2. may be sterile or productive (fruitful things)
3. may be created over a right (as long as it is NOT strictly personal or intransmissible, and has an independent existence
Rights of Action
1. action to protect the usufruct itself
2. action to protect the exercise of the usufruct
Article 563
Classification as to Origin
1. Legal – created by law. Such usufruct cannot, because of family reasons, be mortgaged or alienated by the parents.
2. Voluntary or Conventional
a. created by the will of the parties INTER VIVOS (during lifetime)
• if this is created by sale or any valuable consideration – Statute of Frauds applies to real property and personal property P500 or more
b. created MORTIS CAUSA
• the formalities of a will or codicil must be complied with, either notarial or holographic
3. Mixed or Prescriptive – created by both law and act of person
• To constitute a valid usufruct, all the requirements of the law must be complied with
• A usufruct over real property, being a real right, must be duly registered to bind innocent third persons
Article 564
Classification as to Quantity or Extent
1. as to fruits – total or partial (depending on whether all the fruits are given or not)
2. as to object – UNIVERSAL (if over the entire patrimony) or SINGLE or PARTICULAR (if only individual things are included
Classification as to Number of persons enjoying the right 1. Simple – only one usufructuary
2. Multiple – several
a. Simultaneous – at the same time b. Successive – one after the other
• If created by donation – all the donees must be alive, or at least already conceived, at the time of he perfection of the donation
• Testamentary succession – there must only be two successive usufructuaries, both must be alive or at least conceived at the time of the testator’s death
Classification as to Quality or Kinds of Objects
1. over RIGHTS – the right must not be strictly personal or intransmissible
• right to receive present or future support cannot be subject of a usufruct
• a usufruct over a real right is also by itself a real right
2. over THINGS
• NORMAL – or perfect or regular. This involves non-consumable things where the form and substance are preserved.
• ABNORMAL – imperfect or irregular. Usufruct over consumable property (quasi- usufruct), over non-consumable things that gradually deteriorate by use, over unproductive or sterile animals
Classification as to Terms or Conditions 1. Pure usufruct – no term or condition 2. With a period or term (“a termino”)
a. Ex die – from a certain day b. In diem – up to a certain day
c. Ex die in diem – from a certain day up to a certain day 3. With a condition (conditional)
Article 565
Rules governing a usufruct
1. the agreement of the parties or the title granting the usufruct 2. in case of deficiency, apply the Civil Code
In case of Conflict
The rights granted by virtue of a will prevails over the codal provisions, unless repugnant to the mandatory provisions of the Civil Code.
Article 566
Fruits -The usufructuary is entitled to the natural, industrial and civil fruits that will accrue during the existence of the usufruct.
Dividends – they are income or civil fruits, whether cash or stock dividends. They should belong to the usufructuary because they are declared out of company profits and not corporate capital.
• Generally, products which diminish capital, cannot be considered fruits, unless a contrary intention appears.
• Hidden treasure – usufructuary is a stranger. But may be entitled to one-half if he is finder.
Article 567 Rules
• Fruits pending at the beginning of usufruct 1. belong to the usufructuary
2. no necessity of refunding owner of expenses incurred 3. but without prejudice to the right of third persons
• Fruits pending at the termination of the usufruct
1. belong to the owner
2. but the owner must reimburse the usufructuary for the ordinary cultivation expenses, and for the seeds and similar expenses, from the proceeds of the fruits
3. Also, rights of innocent third parties should not be prejudiced.
Article 568
Rules when leased property to another
Lease executed by the usufructuary should terminate at the end of the usufruct or earlier except in the case of leases of rural lands, because if the usufruct ends earlier, the lease continues for the remainder of the
agricultural year.
• It is not the naked owner, but the usufructuary who has the right to choose the tenant.
Article 569
---Article 570
Civil fruits shall accrue proportionately to the naked owner and usufructuary, for the time the usufruct lasts.
• The parties may stipulate otherwise in their contract, absent the stipulation apply Art 570.
• The article applies whether the date of distribution of benefits from industrial or commercial enterprises are fixed or not.
• The SC ruled that both cash and stock dividends are fruits. Same should apply to profits of a partnership.
Article 571
Usufruct has the right to the enjoyment of:
1. accessions (whether artificial or natural) 2. servitudes or easements
3. all benefits inherent in the property – like the right to hunt, fish, construct rain water receptacles, etc Article 572
Rights with Reference to thing itself
1. He may personally enjoy the thing (entitled to possession and fruits)
• The enjoyment may also be thru another unless the contrary has been provided or stipulated 2. He may lease the thing to another – even without the owner’s consent. Moreover, ordinarily the lease
must NOT extend to a period longer than that of the usufruct, unless the owner consents. Thus, the lease ends at the time the usufruct ends, except in rural leases.
• If the lessee should damage the property, the usufructuary shall answer to the owner
• The usufructuary may demand reimbursement from the lessee, because of the breach of contract of the lease
• If the usufructuary cannot pay, his bond shall be liable Rights with Reference to the right itself
1. He may alienate the usufructuary right – sell, donate, bequeath, or devise except:
a. Legal usufruct
b. Usufruct granted in consideration of his person c. Usufruct acquired thru a caucion juratoria
2. He may pledge or mortgage the usufructuary right. But he may not pledge or mortgage the thing itself.
• Parental usufruct cannot be alienated or pledged or mortgaged.
Article 573
Effect of the Deterioration – fast deteriorating things
1. NORMAL USE – the usufructuary is NOT responsible. No necessity to make repairs to restore them to their formal condition. Failure to return the thing will result in indemnification for the value of the object may have at the end of the usufruct
2. EVENT OR ACT that ENDANGERS their preservation / FORTUITOUS EVENT, even though NO fault or negligence or fraud on the part of the usufructuary – required to make ordinary or necessary repairs
3. FRAUD or NEGLIGENCE – the usufructuary is responsible. Such liability may however be set off against improvements
Article 574
Quasi-usufruct - on consumable things. Form and substance is not really preserved. This is really a SIMPLE LOAN.
Rules for Quasi-usufruct
1. the usufructuary(debtor-borrower) can use them as if he is the owner, with complete right of pledge or alienation
2. BUT at the end of the usufruct, he must
a. Pay the APPRAISED value (if appraised when first delivered)
b. Or if there was no appraisal, return the same kind, quality or quantity OR pay the price current at the termination of the usufruct (not the original price or value)
Article 575
Special usufruct on fruit bearing trees - Rights The usufructuary can use the following:
1. dead trunks
2. those cut off or uprooted by accident
• but he must replace them with new plants Article 576
1. if it is impossible or too burdensome to replace them, the usufructuary has an option. He – a. may use the trunks but should replace them
b. or may leave the dead, fallen, or uprooted trunks at the owner’s disposal, and demand that the latter remove them and clear the land
2. if it is slightly burdensome to replace them, the usufructuary must replace them (whether he uses the dead trunks or not), and he cannot demand clearance of the land by the owner
Article 577
Obligations of the usufructuary – Special usufruct over woodland
1. in the exercise of the diligence in caring for the property, the woodland should be preserved, either by development or by replanting, he cannot consume all
2. in the cutting or felling of the trees, he must – a. follow the owner’s habit or practices
b. in default thereof, follow the customs of the place (as to manner, amount, season), all without prejudice to the owner, for he can use but cannot abuse – applicable if woodland is a
copse(thicket of small trees) or consists of timber for building
c. of there be no customs, the only time the usufructuary can cut down trees will be for repair or improvement, but here the owner must first be informed
3. cannot alienate the trees unless he is expressly or impliedly permitted by the owner or unless he needs the money to do some repairs (but need to inform owner)
Article 578
What the usufructuary can demand from the owner
1. authority to bring the action (usually a special power of attorney)
2. proofs needed for recovery
• to prejudice third parties, the usufruct must either be registered or known to them Institution of the action
The action may be instituted in the usufructuary’s name, for being the owner of the usufruct, he is deemed a real party in the interest
• if the purpose is the recovery of the property or right, he is still required to obtain authority of the naked owner
• if the purpose is to object to or prevent disturbance over the property, no authority is needed Effect of the judgment
1. naked ownership belongs to the owner 2. usufruct belongs to the usufructuary
Article 579
Useful and Luxurious Improvements The usufructuary has the right to make:
1. useful improvements 2. luxurious improvements BUT –
1. he must not alter the form or substance of the property held in usufruct 2. he is NOT entitled to a refund, BUT he may –
a. either remove the improvements if no substantial damage is caused
b. or set-off(compensate) the improvements against damages for which he may be liable
• Improvements may be registered, but not independently, but in the registration proceedings of the land held in usufruct to protect him against third persons
• Example: to enforce right of removal of useful improvements against innocent purchaser for value of land sold
• While a possessor in good faith is entitled to a refund for useful improvements, a usufructuary is not.
Article 580 Rules – Set-off
1. If damage exceeds the value of the improvements, usufructuary is still liable for the difference
2. If the value of the improvements exceeds the damage, the difference does not go to the usufructuary, but accrues instead in the absence of a contrary stipulation in favor of the naked owner, otherwise it is as if the usufructuary would be entitled to a partial refund in cash
Requisites – Set-off
1. The damage must have been caused by the usufructuary
2. The improvements must have augmented the value of the property Article 581
Naked owner – retains the right to alienate the property But – 1. He cannot alter its form or substance
2. Or do anything prejudicial to the usufructuary
• A purchaser of the property must respect the usufruct in case it is registered or known to him, OTHERWISE, he can oust the usufructuary, who ca then look to the naked owner for damages
• If the naked owner bequeaths or devises to another thru a will, the legatee or devisee should respect the usufruct
• Double sale: ordinarily not allowed to sell usufruct to another after having sold it first to the usufructuary. But if he does so Art 1544 on Double Sale will apply.
Other rights of the naked owner 1. Construct any works 2. Make any improvements
3. Or make new plantings thereon if it be rural BUT – such acts must NOT cause:
1. Decrease in the value of the usufruct 2. Or prejudice the right of the usufructuary
Article 582
Usufructuary of a part of common property
A co-owner may give the usufruct of his share to another, even without the consent of others, unless personal considerations are present.
The usufructuary in such a case takes the owner’s place as to:
1. Administration (management) 2. Collection of fruits or interest Effect of Partition
1. If there be partition, the usufructuary continues to have the usufruct of the part allotted to the co-owner concerned
2. If the co-owners make a partition, without the intervention of the usufructuary, this is alright, and the partition binds said usufructuary. Necessarily however, the naked owner must also respect the usufruct.
Article 583
• Inventory and security – not necessary before the right to usufruct begins. They are merely necessary before physical possession and enjoyment of the property can be had
Requirements for the making of the inventory 1. The owner must be previously notified
2. The condition of the immovables must be described 3. The movables must be appraised
4. No form is required except real property in public instrument to bind third persons 5. Expenses to be borne by the usufructuary
6. Effect of not making inventory – same as not giving security 7. When inventory is NOT required:
a. When no one will be injured thereby provided the naked owner consents
b. In case of waiver by the naked owner or the law, or when there is a stipulation in a will or contract
The giving of Security
• Purpose: to insure faithful compliance of the duties of the usufructuary
• Form – any kind of sufficient security shall be allowed – cash, personal bond, mortgage, etc
• When security is not required:
a. No one will be injured thereby (prejudice)
b. Waiver by the naked owner, or stipulation in a will or by contract
c. When the usufructuary is the donor of the property (who has reserved the usufruct)
d. When there is parental usufruct- except when the parents contract a subsequent marriage, provided that each child’s property does not exceed 50,000 in which case, the parents have to file a bond not as usufructuary, but as guardian or administrator
e. When there is a caucion juratoria, which takes place of the bond Article 584
---Article 585 ---Article 586
Effects of Failure to give security
• On the rights of the naked owner
a. He may deliver the property to the usufructuary (but even if delivery is made, naked owner may still later demand the needed security)
b. Or the naked owner may choose retention of the property as administrator (usufructuary gets the net proceeds minus the administration expenses, fixed by agreement or the courts) c. Or the naked owner may demand receivership or administration (by another) of the real
property, sale of movable, conversion or deposit of credit instruments, or investment of cash or profits
• On the rights of the usufructuary
a. The usufructuary cannot possess the property till he gives security b. He cannot administer the property, he cannot execute a lease thereon
c. Cannot collect credits that have matured, nor invest them unless the Court or naked owner consents
• (c) - applies even if the usufructuary is exempted from giving security
d. But can alienate his right to the usufruct. The grantee may possess the moment he gives security.
• Although the owner may demand sale of movables, he may retain some of them for their artistic worth or sentimental value, he may demand their delivery to him provided he gives security for the payment of legal interest on their appraised value
• Note that if the movable sold, the cash belongs to the owner, but the interest thereon (6% per annum) belongs to the usufructuary
Article 587
• The Article applies when he is required but cannot afford to give security. Does not apply when exempted from giving security
Caucion Juratoria
• The promise under oath
• A sworn duty to take good care of the property and return the same at the end of the usufruct
• It takes place of the bond or security based on necessity and humanity Requisites
• Proper court petition
• Necessity for delivery of furniture, implements, or house included in the usufruct
• Approval of the court
• Sworn promise
Restriction – usufructuary cannot alienate or lease the property for this means that he does not need them Article 588
• RETROACTIVE effect of giving bond
Article 589
Duty to take care of property
1. Although care of a pater familias is required, still a usufruct is NOT extinguished by bad use. Bad use entitles the owner to demand its administration without prejudice to the usufruct.
2. Usufructuary is required to make ordinary repairs and to notify the naked owner of urgency of
extraordinary repairs. Moreover, usufructuary answers for damage caused by the fault or negligence of his alienee, grantee, agent, or lessee.
Rules
• Damage to property caused by the fault or negligence of the usufructuary is demandable right away (no need to wait for the end of the usufruct)
• The usufructuary is NOT entitled to reimbursement for ordinary repairs but may retain the property till he is reimbursed of extraordinary expenses, which he may have been compelled to do.
Article 590
Liability of Usufructuary for acts of the substitute
1. Usufructuary is made liable for the acts of the substitute. While the substitute answers to the usufructuary, the usufructuary answers to the naked owner.
2. Even when there is a sub-usufructuary, it is still the usufructuary who answers to the naked owner for ordinary repairs, taxes on the fruits, etc.
Article 591
Rules in case of fruitful or productive livestock 1. REPLACE
a. If some animals die from natural causes b. or lost due to rapacity of beasts of prey
• even if the cause be fortuitous, there is the duty to replace
• replacement should be made from the YOUNG produced.
2. NO obligation to replace
a. If there is a total loss of the animals because of some unexpected or unnatural loss (like contagious disease or any uncommon event, provided usufructuary has NO fault
b. If there is a partial loss (under the same conditions)
• Remains, not the remainder, must be given to the naked owner
• In cased of partial loss, usufruct continues on the remainder, provided usufructuary has NO fault
• If because of FAULT – usufruct still continues because bad use does not extinguish usufruct (Manresa)
• Sterile animals – rule on usufruct over fungibles applies
Article 592
Duty to make ordinary repairs
For the usufructuary to be responsible for ordinary repairs, the following conditions must be present:
1. They are required by NORMAL or NATURAL use 2. They are needed for preservation
3. They must have occurred during the usufruct
4. They must have happened with or without the fault of the usufructuary
4. They must have happened with or without the fault of the usufructuary