CIVIL CODE OF THE PHILIPPINES BOOK II PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS Title I. — CLASSIFICATION OF PROPERTY PRELIMINARY PROVISIONS (1) Defi nition of ‘Property’ in the Civil Code Under the Civil Code, property, considered as an object, is that which is, or may be, appropriated. (See Art. 414). (2) Defi nition of ‘Property’ as a Subject in a Law Course Considered as a subject or course in law, property is that branch of civil law which classifi es and defi nes the different kinds of appropriable objects, provides for their acquisition and loss, and in general, treats of the nature and consequences of real rights. [NOTE: Every right (derecho) has two elements — subjects (persons) and objects (properties). Since Book I of the Civil Code deals with Persons, it is logical that Property should be the subject matter of Book II.]. (3) ‘Thing’ Distinguished from ‘Property’ As used in the Civil Code, the word “thing” is apparently SYNONYMOUS with the word “property.’’ However, techni- cally, “thing” is broader in scope for it includes both appro- priable and non-appropriable objects. The planets, the stars, the sun for example, are “things’’ (cosas), but since we cannot appropriate them, they are not technically “property” (bienes). Air, in general, is merely a “thing,” but under certain condi- 1 CIVIL CODE OF THE PHILIPPINES tions, as when a portion of it is placed in a container, it may be considered as property. [NOTE: Property involves not only material objects but also intangible things, like rights or credits.]. (4) Classifi cation of Things There are three kinds of things, depending on the nature of their ownership: (a) res nullius (belonging to no one) (b) res communes (belonging to everyone) (c) res alicujus (belonging to someone) Res Nullius These things belong to no one, and the reason is that they have not yet been appropriated, like fi sh still swimming in the ocean, or because they have been abandoned (res derelictae) by the owner with the intention of no longer owning them. Other examples include wild animals (ferae naturae), wild birds, and pebbles lying on the seashore. Res Communes While in particular no one owns common property, still in another sense, res communes are really owned by everybody in that their use and enjoyment are given to all of mankind. Examples would be the air we breathe, the wind, sunlight, and starlight. Res Alicujus These are objects, tangible or intangible, which are owned privately, either in a collective or individual capacity. And precisely because they can be owned, they really should be considered “property.” Examples: your book, your shares of stock, your parcel of land. (5) Classifi cation of Property Properties may be classifi ed from different viewpoints. Among the most important bases are the following: 2 CIVIL CODE OF THE PHILIPPINES (a) Mobility and non-mobility 1) movable or personal property (like a car) 2) immovable or real property (like land) (b) Ownership 1) public dominion or ownership (like rivers) 2) private dominion or ownership (like a fountain pen) (c) Alienability 1) within the commerce of man (or which may be the objects of contracts or judicial transactions) 2) outside the commerce of man (like prohibited drugs) (d) Existence 1) present property (res existentes) 2) future property (res futurae) [NOTE: Both present and future property, like a harvest, may be the subject of sale but generally not the subject of a donation.]. (e) Materiality or Immateriality 1) tangible or corporeal (objects which can be seen or touched, like the paper on which is printed a P1,000 Bangko Sentral Note) 2) intangible or incorporeal (rights or credits, like the credit represented by a P1,000 Bangko Sentral Note) [NOTE: The Philippine peso bills when at- tempted to be exported may be deemed to have been taken out of domestic circulation as legal tender, and may therefore be treated as a COMMODITY. Hence, bills carried in excess of that allowed by the Bangko Sentral may be forfeited under Sec. 1363(f) of the Revised Administrative Code. (Commissioner of Customs v. Capistrano, L-11075, June 30, 1960).]. 3 Art. 414 CIVIL CODE OF THE PHILIPPINES (f) Dependence or Importance 1) Principal 2) Accessory (g) Capability of Substitution 1) fungible (capable of substitution by other things of the same quantity and quality) 2) non-fungible (incapable of such substitution, hence, the identical thing must be given or returned) (h) Nature or Defi niteness 1) generic (one referring to a group or class) 2) specifi c (one referring to a single, unique object) (i) Whether in the Custody of the Court or Free 1) in custodia legis (in the custody of the court) — when it has been seized by an offi cer under a writ of at- tachment or under a writ of execution. (De Leon v. Salvador, L-30871, Dec. 28, 1970). 2) “free’’ property (not in “custodia legis’’). (6) Characteristics of Property (a) utility for the satisfaction of moral or economic wants (b) susceptibility of appropriation (c) individuality or substantivity (i.e., it can exist by itself, and not merely as a part of a whole). (Hence, the human hair becomes property only when it is detached from the owner.) 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. 4 CIVIL CODE OF THE PHILIPPINES Art. 414 COMMENT: (1) Importance of the Classifi cation of Property Into Im- movables and Movables The classifi cation of property into immovables or movables does not assume its importance from the fact of mobility or non-mobility, but from the fact that different provisions of the law govern the acquisition, possession, disposition, loss, and registration of immovables and movables. Examples: (a) In general, a donation of real property, like land, must be in a public instrument, otherwise the aliena- tion will not be valid even as between the parties to the transaction. (Art. 749). Upon the other hand, the donation of an Audi automobile, worth let us say, P1.8 million, needs only to be in a private instru- ment. (Art. 748). (b) The ownership of real property may be acquired by prescription although there is bad faith, in thirty (30) years (Art. 1137); whereas, acquisition in bad faith of personal property needs only eight (8) years. (Art. 1132). (c) Generally, to affect third persons, transactions in- volving real property must be recorded in the Regis- try of Property; this is not so in the case of personal property. (2) Incompleteness of the Classifi cation The classifi cation given in Art. 414 is not complete in that there should be a third kind — the “mixed” or the “semi-im- movable.” This refers to movable properties (like machines, or removable houses or transplantable trees) which under certain conditions, may be considered immovable by virtue of their be- ing attached to an immovable for certain specifi ed purposes. This clarifi cation, however, does not affect the classifi cation indeed of properties only into two, immovable or movable; for as has been intimated, a machine is, under other conditions, immovable. (See 3 Manresa, pp. 9-12). 5 Art. 414 CIVIL CODE OF THE PHILIPPINES (3) Historical Note Under the Spanish Civil Code, immovables were referred to as bienes immuebles, and movables as bienes muebles. Under Anglo-American law, the terms given are “real” and “personal” respectively. Inasmuch as our country has been infl uenced both by Spanish and Anglo-American jurisprudence, the two sets of terms have been advisedly used by the Code Commission. Incidentally, it should be remembered that it was Justinian who fi rst classifi ed corporeal property (res corporales) into im- movables (res immobiles) and movables (res mobiles). (4) Jurisprudence on the Classifi cation According to the Supreme Court in the case of Standard Oil Co. of New York v. Jaranillo, 44 Phil. 630, under certain conditions, it is undeniable that the parties to a contract may, by agreement, treat as personal property that which by nature would be real property. However, the true reason why the agreement would be valid between the parties is the application of estoppel. It stated further that it is a familiar phenomenon to see things classed as real property for purposes of taxation, which on general principles may be considered as personal property. However, it would seem that under the Civil Code, it is only the LAW which may consider certain real property (like growing crops) as personal property (for the purpose of making a chattel mortgage). (See Art. 416, par. 2). (5) ‘Reclassifi cation’ Distinguished from ‘Conversion’ Reclassifi cation is very much different from conversion –– the former is the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, or commercial –– as embodied in the land use plan, subject to the requirements and procedures for land use conver- sion, while the latter is the act of changing the current use of a piece of agricultural land into some other use as approved by the Dept. of Agrarian Reform (DAR). A mere reclassifi cation of agricultural land does not automatically allow a landowner to change its use and, thus, cause the ejectment of the ten- ants –– he has to undergo the process of conversion before he 6 CIVIL CODE OF THE PHILIPPINES Art. 414 is permitted to use the agricultural land for other purposes. (Ludo & Luym Development Corp. v. Barretto, 471 SCRA 391 [2005]). The fact that a caretaker plants rice or corn on a residen- tial lot in the middle of a residential subdivision in the heart of a metropolitan area cannot by any strained interpretation of law convert it into agricultural land and subject to the agrarian reform program.