CIVIL LAW > IX. PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS > C. DIFFERENT MODES OF ACQUIRING OWNERSHIP

The Civil Code of the Philippines, under Book II (Property, Ownership, and its Modifications), lays down the rules and principles regarding the modes of acquiring ownership. These provisions outline how ownership is legally transferred, acquired, or vested in individuals or juridical entities. Below is a meticulous discussion on the different modes of acquiring ownership:

1. ORIGINAL MODES OF ACQUIRING OWNERSHIP

Ownership is acquired originally when it does not depend on a previous owner. The following are the recognized original modes:

a. Occupation (Articles 712-713, Civil Code)

Ownership is acquired by occupation when a person takes possession of things that are susceptible of ownership but are without an owner.
Examples:
- Appropriation of abandoned property.
- Hunting and fishing, subject to regulations.
- Finding of hidden treasure (Article 438, Civil Code) – ownership of hidden treasure may be acquired, partly or wholly, by the finder if discovery occurs on another’s property.

b. Intellectual Creation

Intellectual property rights are acquired by creating original works such as literary, artistic, or scientific works, protected by special laws like the Intellectual Property Code (RA 8293).

2. DERIVATIVE MODES OF ACQUIRING OWNERSHIP

Ownership is acquired derivatively when it is transmitted from a previous owner to another. The Civil Code enumerates various derivative modes:

a. Law

Ownership can be acquired by operation of law, such as:
- Succession (inheritance) under Articles 774-1105 of the Civil Code.
- State acquisition of property for public use through eminent domain.

b. Donation (Articles 725-773, Civil Code)

Ownership is acquired by voluntary transfer of property without consideration.
Key types of donation:
- Inter vivos (during the lifetime of the donor).
- Mortis causa (takes effect upon the death of the donor, akin to a testamentary disposition).

c. Succession

Ownership passes from the deceased to their heirs through intestate or testamentary succession.
Intestate succession occurs when no valid will exists, while testamentary succession arises from a valid will.

d. Prescription (Articles 1106-1155, Civil Code)

Ownership and other real rights can be acquired through the lapse of time, subject to the following conditions:
- Ordinary prescription: Possession in good faith and with just title for 10 years.
- Extraordinary prescription: Open, continuous, exclusive, and notorious possession for 30 years, without need of just title or good faith.

e. Tradition (Delivery of Property)

Ownership of movable or immovable property is transferred through the delivery of the thing, accompanied by the intention to transfer ownership (Articles 712-719, Civil Code).
Types of tradition:
- Real tradition (physical delivery of the thing).
- Symbolic tradition (e.g., delivery of keys to a warehouse where goods are stored).
- Traditio longa manu (delivery by pointing out the thing).

3. ACQUISITION BY CONTRACTS (Article 712, Civil Code)

Contracts are the most common mode of acquiring ownership in everyday transactions. Ownership is transferred through a perfected and consummated contract, such as:

Sale (Articles 1458-1637, Civil Code).
Exchange (Article 1638, Civil Code).
Barter or other agreements where ownership is explicitly or impliedly transferred.

4. ACCESSION (Articles 440-465, Civil Code)

Ownership includes the right to all that is produced by the property or that is incorporated or attached thereto. Modes of acquisition through accession include:

a. Natural Accession

Includes the fruits of the property:
- Natural fruits (e.g., harvest from crops).
- Industrial fruits (e.g., products of factories).
- Civil fruits (e.g., rent or lease income).

b. Artificial Accession

Incorporation of improvements or structures made on one’s property by another.
- Example: Builder in good faith acquires compensation if the landowner claims the improvement (Article 448).

c. Alluvium and Avulsion (Article 457-459, Civil Code)

Alluvium: Gradual deposit of soil by river action belongs to the riparian owner.
Avulsion: Sudden transfer of land by water flow belongs to the original owner but must be reclaimed within two years.

5. ACQUISITION BY MIXTURE AND SPECIFICATION (Articles 466-475, Civil Code)

Ownership can also arise through processes involving material combination or transformation:

Mixture:
- If materials belonging to different owners are combined, ownership depends on mutual agreement or proportional contribution.
Specification:
- If a new thing is created from another’s materials, ownership may vest in the maker or the material owner, depending on circumstances like good faith and value contribution.

6. ACQUISITION BY THE STATE

The State may acquire ownership through:

Eminent domain: Forcible acquisition of private property for public use upon payment of just compensation (Article III, Section 9, Constitution).
Escheat: Property reverts to the State when a person dies without heirs or when properties are abandoned.

7. MODES BASED ON SPECIAL LAWS

Ownership is also acquired under laws outside the Civil Code:

Land Reform Laws: Transfer of ownership to farmer-beneficiaries (e.g., Comprehensive Agrarian Reform Program under RA 6657).
Mining and Natural Resources Laws: Ownership of extracted resources as governed by the Mining Act or similar statutes.
Acquisition under Condominium Act (RA 4726): Ownership of individual units in a condominium project.

IMPORTANT PRINCIPLES GOVERNING OWNERSHIP ACQUISITION

Capacity to Own: Legal capacity to acquire ownership must exist, subject to limitations (e.g., foreigners are restricted from owning land under the Constitution).
Public Order and Public Policy: Ownership must not be acquired through acts that violate public policy or public order.
Registration: For immovable property, acquisition must be registered in the Registry of Deeds to be enforceable against third parties.

By these principles, the Philippine legal system ensures clarity and order in the acquisition and transfer of ownership, while safeguarding the rights of individuals, the public, and the State.