Unisource Commercial and Development Corporation vs. Chung

A voluntary easement of right of way cannot be extinguished merely because the dominant estate has an adequate outlet to a public highway; it may be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate.

Petitioner Unisource Commercial and Development Corporation is the registered owner of a parcel of land in Manila covered by TCT No. 176253, which carries a memorandum of encumbrance of a voluntary easement of right of way originating from a 1924 order of the Court of First Instance of Manila. The easement was originally constituted in favor of Francisco Hidalgo y Magnifico over the property of Encarnacion Sandico y Santana, granting Hidalgo the right to open doors and pass through Sandico's land to the bank of an estero leading to the Pasig River. As Sandico's property was transferred through several owners until it reached petitioner, the easement annotation was consistently carried over on each successive title. Hidalgo's property was eventually transferred to respondents Joseph Chung, Kiat Chung, and Cleto Chung under TCT No. 121488.

Petitioner Unisource Commercial and Development Corporation is the registered owner of a parcel of land in Manila covered by TCT No. 176253. The title carries a memorandum of encumbrance of a voluntary easement of right of way, carried over from the Original Certificate of Title of Encarnacion S. Sandico. The annotation, based on a Court of First Instance order dated October 8, 1924, declared that Francisco Hidalgo y Magnifico had the right to open doors in his lot towards adjacent alleys and to pass through Sandico's land until the bank of the estero leading to the Pasig River. As Sandico's property was transferred to several successive owners, the memorandum of encumbrance was consistently annotated on every title until TCT No. 176253 was issued in petitioner's favor. Hidalgo's property, the dominant estate, was eventually transferred to respondents Joseph Chung, Kiat Chung, and Cleto Chung under TCT No. 121488.

On May 26, 2000, petitioner filed a Petition to Cancel the Encumbrance of Voluntary Easement of Right of Way before the Regional Trial Court of Manila, Branch 49, on the ground that the dominant estate had adequate access to a public road — Matienza Street. The trial court initially dismissed the petition on the ground that it was a land registration case. Petitioner moved for reconsideration, and the trial court conducted an ocular inspection of the property. In an Order dated November 24, 2000, the trial court granted the motion and observed that the dominant estate was enclosed with a concrete fence with no less than three doors opening to an alley belonging to the servient estate, and that the dominant estate had a house with a very wide door accessible to Matienza Street without obstruction. The trial court concluded that the dominant estate had an egress to Matienza Street and did not have to use the servient estate.

Respondents countered in their Answer that extinguishment of the easement would prejudice the locality and that petitioner was guilty of laches for taking fifteen years from acquisition of the property to file the petition. On August 19, 2002, the trial court ordered the cancellation of the encumbrance, finding that the dominant estate had no more use for the easement since it had another adequate outlet to a public road. Respondents appealed to the Court of Appeals, which reversed the trial court on October 27, 2005. The appellate court ruled that Article 631(3) of the Civil Code was inapplicable because the presence of an adequate outlet to a highway extinguishes only legal or compulsory easements, not voluntary easements. The appellate court held that a voluntary easement constituted by agreement between the original parties could be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate. Petitioner elevated the case to the Supreme Court via a petition for review on certiorari.

• Nature of Easement (Personal vs. Predial): Petitioner argued that the easement was personal to Francisco Hidalgo because the annotation did not provide that it was binding on the heirs or assigns of Sandico. Since Sandico and Hidalgo resorted to judicial intervention, this showed they contested the existence of the requisite factors establishing a legal easement, indicating the easement was personal.
• Lack of Compensation: Petitioner maintained that no compensation was given to it for the easement, and that it would be unjust enrichment on respondents' part to continue enjoying the easement without adequate compensation to petitioner.
• Unjust Enrichment: Petitioner invoked the Civil Code provision on unjust enrichment, arguing that respondents' continued enjoyment of the easement without compensation constituted unjust enrichment.
• Adequate Outlet: Petitioner argued that even if it were bound by the easement, the same could be cancelled or revoked since the dominant estate had an adequate outlet without having to pass through the servient estate.
• Subdivision of Dominant Estate: Petitioner averred that the easement could not have attached to Hidalgo's property since such property no longer existed after it had been subdivided and registered in respondents' respective names.

• Adoption of Appellate Court's Reasoning: Respondents adopted the disquisition of the Court of Appeals as their counter-arguments, maintaining that the voluntary easement could not be extinguished by the mere existence of an adequate outlet to a public highway, and that the easement could be extinguished only by mutual agreement or renunciation of the owner of the dominant estate.
• Prejudice and Laches: Respondents argued that extinguishment of the easement would be of great prejudice to the locality and that petitioner was guilty of laches for taking fifteen years from acquisition of the property to file the petition.

• Nature of the Easement: Whether the easement constituted in favor of Francisco Hidalgo is personal or predial.
• Extinguishment by Adequate Outlet: Whether a voluntary easement of right of way may be extinguished on the ground that the dominant estate has an adequate outlet to a public highway.
• Binding Effect on Heirs and Assigns: Whether the voluntary easement binds the heirs and assigns of the original parties despite the annotation not expressly mentioning them.
• Effect of Subdivision: Whether the subdivision of the dominant estate extinguishes the easement.
• Unjust Enrichment: Whether the continued enjoyment of the easement by respondents without compensation to petitioner constitutes unjust enrichment.

• Nature of the Easement: No. The easement is not personal but predial; petitioner itself admitted that a voluntary easement of right of way exists, and a voluntary easement is transmissible to heirs and assigns under Article 1311 of the Civil Code.
• Extinguishment by Adequate Outlet: No. The opening of an adequate outlet to a highway can extinguish only legal or compulsory easements, not voluntary easements. A voluntary easement may be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate.
• Binding Effect on Heirs and Assigns: Yes. The omission of heirs or assigns in the annotation does not mean the easement is not binding on them; as a contract, it is generally effective between the parties, their heirs, and assigns, unless the rights are not transmissible by nature, stipulation, or law.
• Effect of Subdivision: No. Under Article 618 of the Civil Code, if the dominant estate is divided between two or more persons, each may use the easement in its entirety without changing the place of its use or making it more burdensome.
• Unjust Enrichment: No. The claim of unjust enrichment was not substantiated; the easement was validly constituted and remains enforceable as a property right.

• Nature of the Easement: Petitioner itself admitted in its petition and memorandum before the trial court that a voluntary easement of right of way exists in favor of respondents. Having made such an admission, petitioner could not later claim that what exists is a legal easement subject to extinguishment under Article 631(3). The easement was constituted by the will or agreement of the original parties (Sandico and Hidalgo), not by statute. The fact that the parties resorted to judicial intervention did not convert the easement into a legal one; the court merely declared the existence of an easement created by the parties. A voluntary easement of right of way is like any other contract and is generally effective between the parties, their heirs, and assigns, except where rights are not transmissible by their nature, by stipulation, or by provision of law (Article 1311, Civil Code).

• Extinguishment by Adequate Outlet: Article 631(3) of the Civil Code, which extinguishes easements when either or both estates fall into such condition that the easement cannot be used, applies only to legal or compulsory easements. The fact that an easement by grant may have also qualified as an easement of necessity does not detract from its permanency as a property right, which survives the termination of the necessity. A voluntary easement of right of way, like any other contract, could be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate. The existence of an adequate outlet to Matienza Street therefore does not extinguish the voluntary easement.

• Binding Effect on Heirs and Assigns: The annotation's failure to mention the heirs or assigns of Sandico and Hidalgo does not mean the easement is not binding on them. A voluntary easement is a contract, and under Article 1311 of the Civil Code, contracts are generally effective between the parties, their heirs, and assigns. Petitioner's reliance on City of Manila vs. Entote was misplaced because that case involved whether the easement was intended for the benefit of the community and the public at large, not whether it bound heirs and assigns. The Court in that case ruled that the clause "any and all other persons whomsoever" embraced only those privy to the owners of the dominant estate, excluding the indiscriminate public — a different issue from the one at bar. Furthermore, although the easement does not appear in respondents' title over the dominant estate, the same subsists; it is settled that registration of the dominant estate under the Torrens system without annotation of the voluntary easement does not extinguish it. On the contrary, it is the registration of the servient estate as free — without the annotation of the voluntary easement — which extinguishes the easement.

• Effect of Subdivision: The mere fact that respondents subdivided the dominant estate does not extinguish the easement. Article 618 of the Civil Code provides that easements are indivisible: if the dominant estate is divided between two or more persons, each of them may use the easement in its entirety, without changing the place of its use, or making it more burdensome in any other way. On May 3, 2005, the property was divided and TCT Nos. 267948, 267949, and 267950 were issued to respondents, but this subdivision did not affect the easement's existence or enforceability.

• Unjust Enrichment: Petitioner's claim of unjust enrichment was unsubstantiated. The easement was validly constituted by agreement of the original parties and has been consistently carried over on the title of the servient estate. The continued enjoyment by respondents of a validly constituted easement does not constitute unjust enrichment, as the easement is a property right that survives the termination of the necessity that may have originally motivated its creation.

• Voluntary vs. Legal Easements — Easements are established either by law (legal easements) or by the will of the owner (voluntary easements). The distinction is critical for purposes of extinguishment: the presence of an adequate outlet to a highway extinguishes only legal or compulsory easements, not voluntary easements. A voluntary easement, being constituted by agreement, can be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate.

• Permanency of Voluntary Easement Despite Termination of Necessity — The fact that an easement by grant may have also qualified as an easement of necessity does not detract from its permanency as a property right, which survives the termination of the necessity. This principle, drawn from La Vista Association, Inc. vs. Court of Appeals, ensures that voluntary easements remain enforceable even when the original conditions that made them necessary no longer exist.

• Transmissibility of Voluntary Easements to Heirs and Assigns — A voluntary easement of right of way, like any other contract, is generally effective between the parties, their heirs, and assigns, except where the rights and obligations arising from the contract are not transmissible by their nature, by stipulation, or by provision of law (Article 1311, Civil Code). The omission of heirs or assigns in the annotation does not mean the easement is not binding on them.

• Registration of Dominant Estate Without Annotation Does Not Extinguish Easement — It is settled that registration of the dominant estate under the Torrens system without the annotation of the voluntary easement in its favor does not extinguish the easement. On the contrary, it is the registration of the servient estate as free — without the annotation of the voluntary easement — which extinguishes the easement. This principle, from Purugganan vs. Paredes, protects the dominant estate owner's right even when the easement is not reflected on the dominant estate's title.

• Indivisibility of Easements — Under Article 618 of the Civil Code, easements are indivisible. If the dominant estate is divided between two or more persons, each of them may use the easement in its entirety, without changing the place of its use, or making it more burdensome in any other way. Subdivision of the dominant estate does not extinguish the easement.

• "The opening of an adequate outlet to a highway can extinguish only legal or compulsory easements, not voluntary easements like in the case at bar. The fact that an easement by grant may have also qualified as an easement of necessity does not detract from its permanency as a property right, which survives the termination of the necessity." — This passage articulates the ratio decidendi: the distinction between legal and voluntary easements for purposes of extinguishment, and the permanency of voluntary easements as property rights.

• "A voluntary easement of right of way, like any other contract, could be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate." — This states the controlling rule on how voluntary easements may be extinguished, distinguishing them from legal easements which may be extinguished by other grounds under Article 631.

• "It is settled that the registration of the dominant estate under the Torrens system without the annotation of the voluntary easement in its favor does not extinguish the easement. On the contrary, it is the registration of the servient estate as free, that is, without the annotation of the voluntary easement, which extinguishes the easement." — This defines the doctrine on the effect of Torrens registration on voluntary easements, protecting the dominant estate owner's right even when the easement is not annotated on the dominant estate's title.

• Private Development Corporation of the Philippines vs. Court of Appeals, G.R. No. 136897, November 22, 2005, 475 SCRA 591 — Cited for the definition of an easement as a real right on another's property, corporeal and immovable, and the distinction between legal and voluntary easements.

• La Vista Association, Inc. vs. Court of Appeals, G.R. No. 95252, September 5, 1997, 278 SCRA 498 — Cited for the principle that an easement by grant that may have qualified as an easement of necessity retains its permanency as a property right, surviving the termination of the necessity, and that a voluntary easement can be extinguished only by mutual agreement or renunciation.

• City of Manila vs. Entote, No. L-24776, June 28, 1974, 57 SCRA 497 — Distinguished; the issue therein was whether the easement was intended for the benefit of the community and the public at large, not whether it bound heirs and assigns. The Court's ruling that "any and all other persons whomsoever" embraced only those privy to the owners of the dominant estate was inapplicable to the present case.

• Purugganan vs. Paredes, No. L-23818, January 21, 1976, 69 SCRA 69 — Cited for the doctrine that registration of the dominant estate under the Torrens system without annotation of the voluntary easement does not extinguish it; rather, it is the registration of the servient estate as free that extinguishes the easement.

• Article 631(3), Civil Code — Provides that easements are extinguished when either or both of the estates fall into such condition that the easement cannot be used. The Court ruled this provision applies only to legal or compulsory easements, not voluntary easements, and therefore the existence of an adequate outlet to Matienza Street did not extinguish the voluntary easement in this case.

• Article 1311, Civil Code — Provides that contracts are binding not only between the parties but also on their heirs and assigns, except where the rights and obligations are not transmissible by their nature, by stipulation, or by provision of law. The Court applied this provision to hold that the voluntary easement, being contractual in nature, is binding on the heirs and assigns of the original parties despite the annotation not expressly mentioning them.

• Article 618, Civil Code — Provides that easements are indivisible; if the dominant estate is divided between two or more persons, each may use the easement in its entirety without changing the place of its use or making it more burdensome. The Court applied this provision to hold that the subdivision of the dominant estate among respondents did not extinguish the easement.

Associate Justices Conchita Carpio Morales, Minita V. Chico-Nazario, Teresita J. Leonardo-De Castro, and Arturo D. Brion concurred in the decision. No separate concurring opinions were written.