I. Introduction
This memorandum examines the legal concept of usufruct under the Civil Code of the Philippines, focusing on the rights and obligations of the usufructuary. Usufruct, a real right defined under Articles 562 to 595, grants a person (the usufructuary) the right to enjoy the property of another (the naked owner) with the obligation of preserving its substance. It is a dismemberment of ownership, separating the benefits from the naked title.
II. Legal Definition and Creation
Usufruct is established by law (legal usufruct), by the will of private persons expressed in acts inter vivos or mortis causa (voluntary usufruct), or by prescription (Article 563). Its essential elements are: (1) a thing or right that is not consumed by its use (except as provided for quasi-usufruct); (2) a usufructuary; and (3) a naked owner. The right is generally personal to the usufructuary and is extinguished upon their death, unless constituted for the benefit of a juridical person, in which case it lasts for a maximum of thirty years (Article 605).
III. Rights of the Usufructuary
The core right is the enjoyment of the property. This includes:
A. Right to Use and Fruits: The usufructuary is entitled to all the natural, industrial, and civil fruits of the property during the usufruct (Articles 566, 567). Fruits are deemed to accrue daily and belong to the usufructuary in proportion to the duration of the usufruct.
B. Right to Possession: The usufructuary is entitled to possession for the purpose of enjoyment.
C. Right to Accessories and Accessions: The usufruct extends to all accessories of the property and to its accretions (Article 573).
D. Right to Necessary Expenses: The usufructuary may recover necessary expenses for the preservation of the property upon termination of the usufruct (Article 579).
E. Right to Mortgage the Usufruct: The usufructuary may mortgage their right of usufruct, but the mortgage expires with the usufruct (Article 595).
IV. Obligations of the Usufructuary
Prior to enjoyment, the usufructuary must:
A. Make an Inventory and Appraisal: Execute a detailed inventory of the property and an appraisal of movable items, with the naked owner (Article 571).
B. Give a Bond: Provide security for the proper care of the property and the return thereof at the termination of the usufruct, unless exempted by the grantor or by law (Article 572).
During the usufruct, the usufructuary must:
C. Preserve the Substance of the Property: Exercise the diligence of a good father of a family (Article 589).
D. Pay Ordinary Taxes and Charges: Bear annual charges, such as ordinary taxes and insurance premiums, incidental to the current enjoyment and administration (Article 596).
E. Make Ordinary Repairs: Be responsible for ordinary repairs arising from normal wear and tear (Article 592).
V. Obligations of the Naked Owner
The naked owner bears extraordinary taxes and charges (Article 597) and is responsible for extraordinary repairs. The naked owner may make these repairs but is not obliged to do so; if they do not, the usufructuary may make them and deduct the cost from the rents or income (Article 593).
VI. Alienation and Alteration
The usufructuary cannot alienate or encumber the substance of the property without the owner’s consent. However, the naked owner retains the right to alienate the property, but such alienation is subject to the existing usufruct (Article 579). The usufruct is not extinguished by the sale of the property; it follows the thing into the hands of the new owner (derecho de seguidad).
VII. Extinguishment of Usufruct
Usufruct is extinguished by: (1) death of the usufructuary (or expiration of the term for juridical persons); (2) expiration of the period or fulfillment of the resolutory condition; (3) merger of the usufruct and ownership; (4) total loss of the property; (5) renunciation by the usufructuary; (6) final judgment rescinding or annulling the title; and (7) prescription of the right through non-use for thirty years (Article 603).
VIII. Quasi-Usufruct
Over consumable things, a quasi-usufruct is created, obliging the usufructuary to return an equal amount of the same kind and quality, or their value at the termination of the usufruct (Article 574). This functions as a loan for use.
IX. Practical Remedies
A. For the Naked Owner: If the usufructuary fails to give security or commits waste, the naked owner may petition the court for the deposit of the property with a third person or for the appointment of a receiver to manage it, or demand the extinguishment of the usufruct if the abuse is severe (Articles 572, 589). For failure to pay taxes or make ordinary repairs, the naked owner may perform them and claim reimbursement from the usufructuary or deduct the cost from the fruits.
B. For the Usufructuary: To protect the right of enjoyment, the usufructuary may file an action for quieting of enjoyment or an injunction against disturbances by the naked owner or third parties. For recovery of necessary or useful expenses incurred, the usufructuary must file a claim upon termination, supported by proof, and may exercise a right of retention over the property until reimbursed, to the extent that the property benefits (Article 579).
C. Upon Termination: The naked owner may file an action for recovery of possession (accion reivindicatoria) and for damages against a usufructuary who refuses to return the property. Both parties should request a judicial inventory to compare with the initial inventory, resolving claims for deterioration, improvements, or expenses.