Consideraciones generales

Art. 566. The usufructuary shall be entitled to all the natural, industrial and civil fruits of the property in usufruct. With respect to hidden treasure which may be found on the land or tenement, he shall be considered a stranger. (471)

Classifications of the rights of the usufructuary 1. As to the thing and its fruits

a. To receive the fruits of the property in usufruct and half of the hidden treasure he accidentally finds on the property b. To enjoy any increase which the thing in usufruct may

acquire through accession

c. To personally enjoy the thing in usufruct or lease it to another

d. To make on the property in usufruct such improvements or expenses he may deem property and to remove the improvements provided no damage is caused to the property

e. To set-off the improvements he may have made on the property against any damage to the same

f. To retain the thing until he is reimbursed for advances for extraordinary expenses and taxes on the capital

2. As to the usufruct itself

a. To alienate (or mortgage) the right of usufruct except parental usufruct

b. In a usufruct to recover property or a real right, to bring the action and to oblige the owner thereof to give him proper authority and necessary proof, and

c. In a usufruct of part of a common property, to exercise all the rights pertaining to the co-owner with respect to the

administration and collection of fruits or interests from the property

3. As to advances and damages

a. To be reimbursed for indispensable extraordinary repairs made by him in an amount equal to the increase in value which the property may have acquired by reason of such repairs

b. To be reimbursed for taxes on the capital advanced by him, and

c. To be indemnified for damages caused to him by the naked owner.

 The usufructuary is given the right to enjoy the property in usufruct and he is entitled to the fruits. The usufructuary has the right to receive all the fruits except:

a. where the usufruct is constituted only on a part of the fruits of a thing or

b. where there is an agreement to the contrary.

 The naked owner retains and can exercise all the rights as owner over the property limited only by the right of enjoyment of the usufructuary.

 Products which when taken from the property diminishes its substance are not to be treated as fruits. They form part of the capital and belong to the naked owner, and not to the usufructuary in the absence of a contrary intent between the parties.

 The usufructuary is not entitled to any hidden treasure because it’s not considered as ‘fruits’. However, as a stranger, he is entitled to ½ if he is the finder.

Art. 567. Natural or industrial fruits growing at the time the usufruct begins, belong to the usufructuary.

Those growing at the time the usufruct terminates, belong to the owner.

In the preceding cases, the usufructuary, at the beginning of the usufruct, has no obligation to refund to the owner any expenses incurred; but the owner shall be obliged to reimburse at the

termination of the usufruct, from the proceeds of the growing fruits, the ordinary expenses of cultivation, for seed, and other similar expenses incurred by the usufructuary.

The provisions of this article shall not prejudice the rights of third persons, acquired either at the beginning or at the termination of the usufruct. (472)

Right of the usufructuary to pending natural and industrial fruits This article does not apply to civil fruits.

 For fruits growing at the beginning of usufruct, they belong to the usufructuary who is not bound to refund to the owner the expenses of cultivation and production incurred.

o However, in case the expenses were incurred by innocent third persons, the usufructuary under Art 443, pursuant to the last paragraph of Art 567, has the obligation to pay the expenses made.

 For fruits growing at the termination of the usufruct, they belong to the owner but he is bound to reimburse the usufructuary the ordinary cultivation expenses out of the fruits received.

 Manresa opines that if at the termination of the usufruct, force majeure should prevent the usufructuary from gathering the fruits, said fruits shall belong to him and not the naked owner.

Art. 568. If the usufructuary has leased the lands or tenements given in usufruct, and the usufruct should expire before the termination of the lease, he or his heirs and successors shall receive only the

proportionate share of the rent that must be paid by the lessee. (473) Art. 569. Civil fruits are deemed to accrue daily, and belong to the usufructuary in proportion to the time the usufruct may last. (474)

Lease by the usufrucutary

 The usufructuary may lease the property in usufruct to another.

 If the usufrcut should expire before the termination of the lease, the usufructuary or his heirs and successors are entitled only to the rents corresponding to the duration of the usufruct. The rents for the remaining period of the lease belong to the owner.

Art. 570. Whenever a usufruct is constituted on the right to receive a rent or periodical pension, whether in money or in fruits, or in the interest on bonds or securities payable to bearer, each payment due shall be considered as the proceeds or fruits of such right.

Whenever it consists in the enjoyment of benefits accruing from a participation in any industrial or commercial enterprise, the date

of the distribution of which is not fixed, such benefits shall have the same character.

In either case they shall be distributed as civil fruits, and shall be applied in the manner prescribed in the preceding article. (475)

Usufruct constituted on certain rights

 Every benefit or payment shall be considered and distributed as civil fruit of such right.

 Payment and benefits that accrue after the termination of the usufruct belong to the owner.

 The date when the benefits accrue determines whether they should belong to the usufructuary or to the owner. Art 570 applies whether or not the date of distribution of benefits is fixed.

Case doctrine

 A stock dividend is considered civil fruit and belongs to the usufructuary. (Bachrach v Seifert)

Art. 571. The usufructuary shall have the right to enjoy any increase which the thing in usufruct may acquire through accession, the servitudes established in its favor, and, in general, all the benefits inherent therein. (479)

Extent of rights of usufructuary

 The usufructuary is generally entitled to all the benefits that the thing in usufruct can give including any increase by accession and servitudes established in his favor.

 Reason is that usufruct covers the entire jus fruendi and jus utendi.

Art. 572. The usufructuary may personally enjoy the thing in usufruct, lease it to another, or alienate his right of usufruct, even by a

gratuitous title; but all the contracts he may enter into as such usufructuary shall terminate upon the expiration of the usufruct, saving leases of rural lands, which shall be considered as subsisting during the agricultural year. (480)

 with respect to the thing in usufruct, he may lease it even without the owner’s consent but not being the owner, the usufructuary cannot alienate, pledge or mortgage the thing itself. He may sell future crops subject to the rule that those ungathered at the time when the usufruct terminates belong to the owner.

 when the things given in usufruct cannot be used without being consumed or were appraised when delivered, the usufructuary may dispose of them.

 With respect to the right of usufruct, since the usufructuary is the owner of the right itselt, he may alienate, pledge or mortgage it, even by gratuitous title.

o But the legal usufruct of the parent over his or her unemancipated children cannot be alienated, pledged, or mortgaged for the right is personal and intransmissible burdened as it is by important obligations of the parent for the benefit of the children.

o A usufruct given in consideration of the person of the usufructuary to last during his lifetime is also personal, and therefore, intransmissible.

o As a rule, all contracts entered into by the usufructuary shall terminate upon the expiration of the usufruct or earlier, except rural leases which continue during the agricultural year. Case doctrine

 A usufructuary of rents, as a corollary to the right to all the rents, to choose the tenant, and to fix the amount of the rent, necessarily has the right to choose himself as the tenant, provided that the obligations he has assumed towards the owner of the property are fulfilled. (Fabie v David)

Art. 573. Whenever the usufruct includes things which, without being consumed, gradually deteriorate through wear and tear, the

usufructuary shall have the right to make use thereof in accordance with the purpose for which they are intended, and shall not be obliged to return them at the termination of the usufruct except in their condition at that time; but he shall be obliged to indemnify the owner for any deterioration they may have suffered by reason of his fraud or negligence. (481)

Usufruct on things which gradually deteriorate

 This article gives an instance of abnormal usufruct because in the enjoyment of the property the usufructuary cannot preserve its form or substance.

 Here the thing gradually deteriorates through wear and tear or normal use.

 The usufructuary is not responsible for the deterioration due to wear and tear nor is he required to make any repairs to restore it to its formal condition. He needs only to return the thing at the termination of the usufruct in the condition it may be at that time.

 The usufructuary is liable for damage suffered by the thing by reason of his fraud or negligence although such liability may be set-off against the improvements he may have made on the property.

 The usufructuary does not answer for deterioration due to a fortuitous event. He is, however, obligated to make the ordinary repairs needed by the thing.

Art. 574. Whenever the usufruct includes things which cannot be used without being consumed, the usufructuary shall have the right to make use of them under the obligation of paying their appraised value at the termination of the usufruct, if they were appraised when delivered. In case they were not appraised, he shall have the right to return at the same quantity and quality, or pay their current price at the time the usufruct ceases. (482)

Usufruct on consumable things

 This is another instance of abnormal usufruct because the thing in usufruct cannot be used without being consumed, like money (but that’s really a simple loan, where the usufructuary can deal with the money as owner.)

 The usufructuary shall have the right to make use of the consumable thing.

 At the termination of the usufruct, he must: 1. Pay its appraised valuel or

2. If there was no appraisal made, either: a. Return the same quantity and quality, or b. Pay its current price at such termination.

Art. 575. The usufructuary of fruit-bearing trees and shrubs may make use of the dead trunks, and even of those cut off or uprooted by accident, under the obligation to replace them with new plants. (483a)

Art. 576. If in consequence of a calamity or extraordinary event, the trees or shrubs shall have disappeared in such considerable number that it would not be possible or it would be too burdensome to replace them, the usufructuary may leave the dead, fallen or uprooted trunks at the disposal of the owner, and demand that the latter remove them and clear the land. (484a)

Usufruct on fruit-bearing trees and shrubs

 The usufructuary is given the right to make use of dead trunks and those cut-off or uprooted by accident but he must place them with new plants because he has the obligation to preserve the form or substance of the property in usufruct.

 Of course, the usufructuary has no obligation to replace with new plants, the dead trees or shrubs already existing at the beginning of the usufruct.

 Under article 576, the usufructuary is not responsible for dead, fallen or uprooted trunks caused by calamity or extra-ordinary events. If it would not be possible or be too burdensome to replace them, he may demand that the owner remove them and clear the land. He may use the trunks but he is required to replace them with new plants under Article 575.

 If replacing the trunks could not be too burdensome, the usufructuary must replace them, whether or not he makes use of them.

Art. 577. The usufructuary of woodland may enjoy all the benefits which it may produce according to its nature.

If the woodland is a copse or consists of timber for building, the usufructuary may do such ordinary cutting or felling as the owner was in the habit of doing, and in default of this, he may do so in accordance with the custom of the place, as to the manner, amount and season.

In any case the felling or cutting of trees shall be made in such manner as not to prejudice the preservation of the land.

In nurseries, the usufructuary may make the necessary thinnings in order that the remaining trees may properly grow.

With the exception of the provisions of the preceding paragraphs, the usufructuary cannot cut down trees unless it be to restore or improve some of the things in usufruct, and in such case shall first inform the owner of the necessity for the work. (485)

Usufruct on woodland and nurseries

 The woodland may be a copse or may consist of timber for building.

 The usufructuary may fell or cut trees as the owner was in the habit of doing or in accordance with the customs of the place as to manner, amount and season. In any case, he must not prejudice the preservation of the land.

 The usufructuary cannot cut down trees other than as mentioned above unless it be for repair or improvement of the things in usufruct but in such case, the owner must be informed of the necessity for the work.

 In nurseries, the usufructuary may make the necessary thinnings in order that the remaining trees may properly grow.

Art. 578. The usufructuary of an action to recover real property or a real right, or any movable property, has the right to bring the action and to oblige the owner thereof to give him the authority for this purpose and to furnish him whatever proof he may have. If in consequence of the enforcement of the action he acquires the thing claimed, the usufruct shall be limited to the fruits, the dominion remaining with the owner. (486)

Usufruct of judicial action to recover

 This article applies if the purpose of the action is to recover real property or personal property or real right over real or personal property

 The action may be instituted in the name of the usufructuary (vs an agent who institutes the action in the name of the principal)

 The usufructuary may oblige the owner to give him the necessary authority to bring the action

 In case of favorable judgment, the usufruct shall be limited to the fruits, with the naked ownership belonging to the owner. With the termination of the case, the usufruct of the action comes to an end.

Art. 579. The usufructuary may make on the property held in usufruct such useful improvements or expenses for mere pleasure as he may deem proper, provided he does not alter its form or substance; but he shall have no right to be indemnified therefor. He may, however, remove such improvements, should it be possible to do so without damage to the property. (487)

 The usufructuary has the right to make improvements, useful or luxurious, as he may deem proper.

 What are the rules?

1. He must not alter the form or substance of the property, 2. He may remove the improvements only if it is possible to do so

without damage to the property

3. He has no right to be indemnified for the improvements if he does not exercise his right to remove

o He cannot invoke the rights of a possessor in good faith in the concept of owner

4. If the improvements cannot be removed without damage, he may set-off the same against any damage caused by him to the property (Art 580)

5. If the usufructuary does not wish to exercise his right of removal, the owner cannot compel him to remove the improvements 6. If the usufructuary wishes to exercise his right of removal, the

owner cannot prevent him by offering to reimburse him

7. The usufructuary’s right to remove the improvements includes the right to destroy them provided no damage is caused to the property 8. The right to remove is enforceable only against the owner, but not

against a purchaser in good faith to whom a clean title has been issued

o Right to remove the improvements should be annotated on the certificate of title, so that it can be enforced against third parties

Case doctrines

 By express provision of law, the usufructuaries do not have the right to reimbursement for improvements they may have introduced on the property. If the rule on reimbursement or indemnity were otherwise, then the usufructuary might improve the owner out of his property. (Moralidad v Pernes)

Art. 580. The usufructuary may set off the improvements he may have made on the property against any damage to the same. (488)

Right to set-off improvements

 This article presupposes that

o the improvements have increased the value of the property and

o the damage to the same was caused through the fault of the usufructuary.

 If the damage exceeds the value of the improvements, the usufructuary is liable for the difference as indemnity

 If the value of the improvements exceeds the damage, he may remove the portion of the improvements representing the excess in value if this can be done without injury to the property, otherwise, the excess in value accrues to the owner.

Art. 581. The owner of property the usufruct of which is held by another, may alienate it, but he cannot alter its form or substance, or do anything thereon which may be prejudicial to the usufructuary. (489)

Rights and obligations of the naked owner

 The naked owner may alienate the property in usufruct because the title (dominium directum) remains vested in him.

 He may construct works, make improvements, or make new plantings on the property in usufruct.