Contracts creating Real Rights, A1312, Civil Code

1. Concept

Article 1312. In contracts creating real rights, third persons who come into possession of the object of the contract are bound thereby, subject to the provisions of the Mortgage Law and the Land Registration Laws. (n)

1) [A] real right is the power belonging to a person over a specific thing, without a passive subject individually determined, against whom such right may be personally exercised. (Adorable v. CA, G.R. No. 119466, November 25, 1999, Per Mendoza, J.)

2) In Philippine civil law, real rights (jus in re) are those that create a direct and immediate legal relationship between a person and a thing. Unlike personal rights, which are only enforceable against a specific person (like a debtor), real rights are enforceable against the whole world (erga omnes). (Google Gemini 3 [2025], reviewed by Legal / J. Del Puerto, Accessed 27 December 2025)

a. Examples

1) Ownership (Dominium)

Article 712. Ownership is acquired by occupation and by intellectual creation.

Ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition.

They may also be acquired by means of prescription. (609a)

1) Ownership (Dominium): This is the most comprehensive real right. It includes the “bundle of rights”:

• Jus Utendi: Right to use.
• Jus Fruendi: Right to the fruits (rent, harvest).
• Jus Abutendi: Right to consume or transform (not necessarily to “abuse”).
• Jus Disponendi: Right to dispose (sell, donate, mortgage).
• Jus Vindicandi: Right to recover from any possessor. (Google Gemini 3 [2025] as reviewed, supra.)

2) Possession

Article 1312. In contracts creating real rights, third persons who come into possession of the object of the contract are bound thereby, subject to the provisions of the Mortgage Law and the Land Registration Laws. (n)

Article 555. A possessor may lose his possession:

x x x

(4) By the possession of another, subject to the provisions of article 537, if the new possession has lasted longer than one year. But the real right of possession is not lost till after the lapse of ten years. (460a)

Article 557. The possession of immovables and of real rights is not deemed lost, or transferred for purposes of prescription to the prejudice of third persons, except in accordance with the provisions of the Mortgage Law and the Land Registration laws. (462a)

1) Possession: While possession can be a fact, it is also a real right when it involves the legal power to hold a thing, regardless of ownership. (Google Gemini 3 [2025] as reviewed, supra.)

3) Usufruct

Article 562. Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides. (467)

1) Usufruct: The right to enjoy the property of another with the obligation of preserving its form and substance. It essentially gives the holder the right to use and harvest the “fruits” of a property without owning it. (Google Gemini 3 [2025] as reviewed, supra.)

4) Pledge

Article 2088. The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void. (1859a)

1) Pledge: A real right created over movable property delivered to a creditor (or a third person) to secure a debt. (Google Gemini 3 [2025] as reviewed, supra.)

5) Chattel mortgage

1) Chattel Mortgage: Similar to a real estate mortgage, but the security is movable (personal) property. (Google Gemini 3 [2025] as reviewed, supra.)

6) Real estate mortgage

Article 2124. Only the following property may be the object of a contract of mortgage:

(1) Immovables;

(2) Alienable real rights in accordance with the laws, imposed upon immovables.

Article 2088. The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void. (1859a)

1) Real Estate Mortgage: A contract where real property is used as security for the fulfillment of a principal obligation. It is a real right because it follows the property even if the owner changes. (Google Gemini 3 [2025] as reviewed, supra.)

2) Registration of the mortgage establishes a real right or lien in favor of the mortgagee, as provided by Articles 1312 and 2126 of the Civil Code. (Cahayag v. Commercial Credit Corporation, G.R. Nos. 168078, 168357, January 13, 2016, Per Sereno, J.)

7) Easement or Right of Way

Article 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the proper indemnity. x x x

1) Easements (or Servitudes): An encumbrance imposed upon an immovable (servient estate) for the benefit of another immovable (dominant estate) belonging to a different owner (e.g., a right of way). (Google Gemini 3 [2025] as reviewed, supra.)

2)  [A]n easement is a real right on another’s property, corporeal and immovable, whereby the owner of the latter must refrain from doing or allowing somebody else to do or something to be done on his property, for the benefit of another person or tenement. It is jus in re aliena, inseparable, indivisible and perpetual, unless extinguished by causes provided by law. A right of way in particular is a privilege constituted by covenant or granted by law to a person or class of persons to pass over another’s property when his tenement is surrounded by realties belonging to others without an adequate outlet to the public highway. The owner of the dominant estate can demand a right of way through the servient estate provided he indemnifies the owner thereof for the beneficial use of his property. (Quimen v. CA, G.R. No. 112331, May 29, 1996, Per Bellosillo, J.)

3) An easement or servitude is a real right on another’s property, corporeal and immovable, whereby the owner of the latter must refrain from doing or allowing somebody else to do or something to be done on his or her property, for the benefit of another person or tenement; it is jus in re aliena, inseparable from the estate to which it actively or passively belongs, indivisible, perpetual, and a continuing property right, unless extinguished by causes provided by law. The Code defines easement as an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner or for the benefit of a community, or of one or more persons to whom the encumbered estate does not belong. There are two kinds of easement according to source: by law or by will of the owners – the former are called legal and the latter voluntary easement. A legal easement or compulsory easement, or an easement by necessity constituted by law has for its object either public use or the interest of private persons. (Pilar Development Corporation v. Dumadag, G.R. No. 194336, March 11, 2013, Per Peralta, J.)

8) Servitudes

Article 415. The following are immovable property:

x x x

(10) Contracts for public works, and servitudes and other real rights over immovable property.

9) Antichresis

1) Antichresis: A contract where the creditor acquires the right to receive the fruits of an immovable of his debtor, with the obligation to apply them to the payment of interest and then to the principal. (Google Gemini 3 [2025] as reviewed, supra.)

10) Lease (if recorded)

1) Lease (if Recorded): Generally, a lease is a personal right. However, under Philippine law, if a lease of real estate is recorded in the Registry of Property, it becomes a real right binding on third persons. (Google Gemini 3 [2025] as reviewed, supra.)

2) It bears to emphasize that a civil law lease is a mere personal right. It partakes of the nature of a real right when it is recorded on the title of the lessor only in the sense that it is binding even as against third persons without actual notice of the transaction.55 Under Section 51 of PD No. 1529,56 otherwise known as the Land Registration Decree, “no deed, mortgage, lease or other voluntary instrument, except a will purporting to convey or affect registered land shall take effect as a conveyance or bind the land” until its registration. (AQA Global Construction, Inc. v. Planters Development Bank, G.R. Nos. 211649, 211742, August 12, 2015, Per Perlas-Bernabe, J.)

Saul v. Hawkins, En Banc, G.R. No. 66, May 1, 1902, Per Arellano, C.J.:

• The existence of an unrecorded lease, executed in favor of the defendant by the grantor, is taken for granted. There is no allegation that in the contract any agreement has been made that it was to be respected by the purchaser or any other subsequent transferee.

• A contract of lease executed by the vendor, unless recorded, ceases to have effect when the property is sold, in the absence of a contrary agreement. The right to use the house is one of the rights inherent in the dominium transferred by the vendor to the vendee. The contract between the lessor and the lessee does not, however, cease to be binding if the term stipulated in the contract has not expired, as the transfer of the dominium and other rights over the thing does not free the vendor from liability under the personal actions arising from a contract of lease.

• But these personal actions do not bind the purchaser in his capacity as successor by singular title in the absence of an express agreement between the lessor and the lessee — an express agreement which must, in turn, become a personal obligation of the purchaser. If the lease is recorded it is no longer merely a personal right on the part of the lessee to continue to enjoy the property leased, even after the same is sold. It is also a real right, made such by recordation, and constitutes an incumbrance upon the property, whoever may be its owner or possessor, and is therefore enforceable even against third persons.

• The lease in question does not constitute a real right. The subject of the preventive annotation was a judgment which refused “to declare the nullity of the contract of sublease entered into between the said Enrique Dalton and the present sub-lessee of the house belonging to the said Canuto Rivera.” This is not such a recordation of the lease as to constitute a real right, and which, when inscribed in the register to give it publicity, plainly shows to anyone intending to purchase the property the existence of an incumbrance consisting in the deprivation of the right to use the house during the time stipulated in the recorded lease.

11) Contracts for public works

Article 415. The following are immovable property:

x x x

(10) Contracts for public works, and servitudes and other real rights over immovable property.

12) Other real rights

1) [A] maritime lien “constitutes a present right of property in the ship, a jus in re, to be afterward enforced in admiralty by process in rem. From the moment the claim or privilege attaches, it is inchoate, and when carried into effect by legal process, by a proceeding in rem, it relates back to the period when it first attached.” (PNB v. CA, G.R. No. 128661, August 8, 2000, Per Gonzaga-Reyes, J., citing Agbayani, Aguedo F., Commentaries and Jurisprudence on the Commercial Laws of the Philippines, 1993 ed., Volume IV, pp. 699-700 citing 70 Am Jur 2nd, 472)

2. Solemnity or formality

Art. 1358. The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein are governed by Articles 1403, No. 2 and 1405;

1) Acts and contracts which create, transmit, modify or extinguish real rights over immovable property should be embodied in a public document. (Cenido v. Sps. Apacionado, G.R. No. 132474, November 19, 1999, Per Puno, J.)

3. Distinguished

a. Real right vs. Personal right

Feature	Real Rights (Jus in Re)	Personal Rights (Jus ad Rem)
Object	A specific thing (land, car).	An act or performance (to give, to do).
Subject	A person vs. the whole world.	A creditor vs. a specific debtor.
Enforcement	Erga omnes (Against everyone).	In personam (Only against the debtor).
Acquisition	By tradition (delivery).	By mere consent (usually).

(Google Gemini 3 [2025] as reviewed, supra.)

1) A personal right is the power of one person to demand of another, as a definite passive subject, the fulfillment of a prestation to give, to do, or not to do. On the other hand, a real right is the power belonging to a person over a specific thing, without a passive subject individually determined, against whom such right may be personally exercised. (Adorable v. CA, supra.)

b. Real right vs. Real contract

Article 1316. Real contracts, such as deposit, pledge and commodatum, are not perfected until the delivery of the object of the obligation. (n)

1) The fundamental distinction is that a real right is an enforceable right in a specific piece of property (right in rem), whereas a real contract (in the context of civil law systems) refers to a category of agreement that is not fully formed until a physical asset is delivered. (Google Gemini 3 [2025] as reviewed, supra.)

2) In Philippine civil law, the terms real right and real contract might sound similar because they both involve “things” (from the Latin res), but they refer to completely different legal concepts. (Ibid.)

3) A Real Right is a result or a status of power over a thing, while a Real Contract is a method of entering into an agreement. (Ibid.)

Feature	Real Right (Jus in Re)	Real Contract
Nature	A legal power or authority over a specific thing.	A type of agreement that requires delivery to be valid.
Enforceability	Against the whole world (erga omnes).	Initially against the contracting parties only.
Focus	The relationship between a person and a thing.	The perfection (starting point) of an obligation.
Legal Basis	Articles 414 onwards (Property Law).	Article 1316 (Obligations and Contracts).

(Ibid.)

4) Real Right (Jus in Re). A real right is the direct and immediate legal power that a person has over an object. It is “real” because it follows the thing regardless of who holds it. If you own a car (a real right), you can get it back from anyone who steals it because your right is attached to the car itself. (Ibid.)

• Examples: Ownership, Usufruct, Real Estate Mortgage, Easements. (Ibid.)
• Key Characteristic: It creates a “burden” on the thing that everyone must respect. (Ibid.)

5) Real Contract. Under Article 1316 of the Civil Code, most contracts are “consensual” (perfected by mere agreement). However, Real Contracts are the exception—they are not legally “born” until the object is actually delivered. Even if both parties say “yes,” the contract does not exist in the eyes of the law until the thing is handed over. (Ibid.)

• Examples:
  • Deposit: If you agree to keep my laptop safe, the contract of deposit only starts when you actually take the laptop. (Ibid.)
  • Pledge: If I borrow money and promise my watch as collateral, the “Pledge” isn’t valid until I give you the watch. (Ibid.)
  • Commodatum: A loan where you borrow something for free (like a lawnmower) and must return the same thing. (Ibid.)
• Key Characteristic: Delivery is a prerequisite for the contract’s existence. (Ibid.)

6) The Connection. These two often overlap in a single transaction. (Ibid.)

• Example: In a Pledge, the Real Contract is perfected the moment you deliver the jewelry to the pawnshop. As a result of that delivery, the pawnshop now holds a Real Right (the right of pledge) over the jewelry, which they can enforce even if you sell the jewelry to someone else. (Ibid.)