Ownership and other Rights In Rem

SYNOPSIS

A. THINGS 11.101

B. POSSESSION 11.104

C. RIGHTS IN REM 11.110

D. OWNERSHIP 11.113

E. REVOCABLE OWNERSHIP 11.119

F. FIDUCIARY OWNERSHIP 11.120

G. CO-OWNERSHIP 11.123

H. CONDOMINIUM 11.124

I. OTHER CIVIL CODE RIGHTS IN REM 11.125



A. THINGS

11.101 Title I of Book Three of the Civil Code defines a thing as any physical object whose worth may be ascertained. Rules applying to material things also govern energy and natural forces that can be appropriated¹.
¹ Art. 2311.

11.102 Among other possible classifications of things considered in themselves, things are movables or immovables, the former being chattels capable of movement on their own or by some external force and the latter being so by nature, such as real property or real estate including the ground and all things solid or fluid on or below the surface and everything naturally fastened to the ground or existing under the ground without the act of man, as well as movables existing as accessions permanently fastened to the ground or set intentionally on real estate and affected to it as accessories by the owner¹.
¹ Arts. 2313 to 2323.

11.103 From an ownership point of view, things belong to the government, be it the federal, provincial (state) or municipal (county) government, and are publicly or privately owned. Publicly state owned things comprise territorial and other sea waters, bays, ports, moorings and beaches up to the high-water line, rivers and riverbanks, all other natural water courses except when flowing within a single estate and hence privately owned, and all other waters applied or apt to be applied in the public interest, including subterranean waters and notwithstanding the land owner’s right of use of such waters to the limit of his needs and in accordance to regulations, navigable lakes and their margins, islands that a formed in public waters when not of private property, streets, parks, roads, canals, bridges and other public works for common use and ruins or archaeological sites of scientific worth. Privately state owned things include, amongst others, any not privately owned land and gold, silver, copper and precious stones mines and fossil fuels notwithstanding private ownership of the land above¹.
¹ Arts. 2339 to 2342 and 2350.

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B. POSSESSION

11.104 Title II of Book Three of the Civil Code refers to possession as the physical power that a person exerts over a thing with the will to subject it to the exercise of the right of property and tenancy as that same power exerted over a thing but acknowledging property in another. Possession is legitimate, when meaning the content and exercise of a right in rem, or illegitimate, when not so, the latter being either in good faith, if in its beginning possessor believes without a doubt in the legitimacy of his possession, or in bad faith, which consists in the absence of such a persuasion. Bad faith possession shall be vicious when of chattels stolen, or belonging to others and disposed of as own property or as free from encumbrances when not so, or if acquired through a breach of trust; and, when of real property, if acquired by way of violence, stealth or a breach of trust. Unless otherwise presumed, possessor’s good faith is presumed¹.
¹ Arts. 2351, 2352, 2355, 2356, 2358, 2362 and 2364.

11.105 Possession is normally acquired through voluntary and material delivery and receipt of the thing concerned or by exertion of unopposed possessory acts by party coming into possession upon previous possessor’s withdrawal. Possession of all material things that are in the market may be acquired personally or by an empowered representative or an agent and subject to confirmation, but property not of a material or physical nature cannot be the object of possession¹.
¹ Arts. 2377 to 2380 and 2392 to 2400.

11.106 Possession in good faith of chattels not lost or stolen causes ownership to be presumed in favour of possessor and the strength to disown any real action claming title by third parties¹.
¹ Art. 2412.

11.107 Upon restitution of the thing being ordered to claimant of title, natural, industrial and civil fruits are attributed as belonging to possessor in good faith once gathered or collected; he must be reimbursed for necessary and useful expenses and improvements carried out on the thing if extant at the time of restitution, and possessor has the right to retain possession until payment be made; and he is not liable for destruction or damages to the thing, even when having occurred through his fault. Possessor in bad faith is liable for ruin and damage to the thing even when due to an act of God or force majeure and unless such consequences would also have happened had the thing been in the owner’s custody or care, and even to this extent if possession were vicious; he must return or pay for natural and civil fruits he has acquired or missed acquiring through his fault after deducting incurred tilling, harvest or extraction expenses; and he must be reimbursed for necessary expenses and improvements on the thing with a right to retain possession until paid and also for useful expenses to the extent of their having increased the thing’s value. Products, meaning anything obtained from the ground that cannot naturally reproduce itself must be returned by possessors in good or bad faith¹.
¹ Arts. 2422 to 2444.

11.108 Possession is lost when the thing possessed stops existing by death, total destruction or transformation into something else, or when possessory acts by possessor become in fact impossible, or as a result of delivery to another not for the purpose of only transferring tenancy of the thing, or because of abandonment with the intention of not possessing the thing any longer, or when somebody else is allowed to take possession against possessor’s will for a year without being reinstated, or if the thing is legally excluded from the market¹.
¹ Arts. 2451 to 2459.

11.109 The fact of possessing something grants the right to self defense in certain exceptional circumstances and to institute legal proceedings to be maintained or reinstated when possessor has been troubled or deprived of possession¹.
¹ Arts. 2469, 2470, 2473, 2490 and 2495.

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C. RIGHTS IN REM

11.110 Rights in rem or real rights, as opposed to rights in personam establishing a jural relation or obligational bond between two or more persons whereby one of the parties is obligated towards the other to perform a certain engagement or undertaking¹, mean title to anything material, be it of a movable or immovable nature, and link a person directly, not by way of any sort of performance expected from a debtor, to such a material thing and therefore lawfully exclude everybody else from such a thing and compel all third parties, and not only a specific debtor, to abstain from interfering in any way with title holder’s use and enjoyment and right of disposal².
¹ See Chapter 8.
² Art. 497.

11.111 Rights in rem can only be created by law, though normally do not come to be also by law but are established by a contract or bequeathed by will. Any agreement or will establishing other rights in rem or modifying those already admitted by law shall only be accepted as rights in personam if valid and enforceable as such. Rights in rem governed by the Civil Code are ownership and co-ownership, usufruct, use and habitation, easements, mortgages, chattel mortgages or pledges and antichresis ¹.
¹ Arts. 2502 and 2503.

11.112 Acquisition and transfer of title on real estate must be duly registered for opposition to interested third parties if contested¹.
¹ Art. 2505 and Law 17.801 as amended by laws 22.231 and 22.427.

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D. OWNERSHIP

11.113 Title IV of Book Three of the Civil Code refers to ownership or dominion as the right in rem by which a thing is subject to the will and action of a person, who is thereby entitled to use, enjoy and dispose of such a thing in an orderly or regular way. Ownership is exclusive, because no two persons can own the whole of something at the same time, though part ownership by each owner in common is possible; it is also perpetual, because ownership continues independently of actual exercise of the owner’s faculties and even if he exerts none or cannot do so, or a third party exerts such proprietary acts, either with owner’s consent or against his will, during the time required for prescription of property; and it is also absolute, inasmuch as owner can apply the thing to any purpose it is legally susceptible of or dispose of it in any way and exclude intruders from it and remove whatsoever may have been left on owners property by others without his consent¹.
¹ Arts. 2506, 2508, 2510, 2513 to 2517.

11.114 Full or perfect ownership is that which is everlasting and unencumbered toward third parties, whereas ownership is less full or imperfect when bound to end after a certain period or on a certain condition coming to be or if encumbered in favour of third parties by rights in rem such as easements, usufruct and others¹.
¹ Arts. 2507 and 2661.

11.115 Ownership of ground extends perpendicularly down, comprising everything that be under the surface, such as treasures¹ or mines² where nothing is elsewise provided for by law, and up into space above the ground, where the owner may raise his buildings or have those belonging to strangers and intruding at any height removed. All buildings, plantations and other constructions on or beneath the ground are presumed to have been made by the owner of the land and to be belonging to him, unless otherwise proven. Ownership also extends to natural, industrial and civil fruits of property, unless a third party be entitled thereto³.
¹ Arts. 2550 to 2566 govern ownership of treasures, basically entitling any spontaneous discoverer to half the treasure he has unearthed and attributing the remaining half to the owner of the land where discovery was made.
² The Mining Code as enacted by Decree 456/97 provides that mines are a federal or a provincial government privately owned immovable property, depending on each particular mine site’s location, and that such property is distinct from that of the land in which the mine is placed (see Arts. 7, 11 and 12).
³ Arts. 2518 to 2522.

11.116 There are several ways of acquiring ownership, including appropriation¹, transformation of something into a different species under certain circumstances², accession by natural or artificial accretion of things movable or immovable by alluvion, avulsion, planting, building, joining or mixing of dry or fluid things³, inheritance⁴ and prescription by continued, uninterrupted, open and undisputed possession of real property, for ten years if on the basis of a defective title and in good faith or for twenty if not, and for two or three years if of registered or unregistered chattels⁵. The most frequent means of acquiring ownership is by delivery or tradition of possession performed by a legally abled owner to a third party who is also legally enabled to acquire property and to whom title is duly transferred⁶. Title to real estate must be registered to ensure full opposition to third interested parties in good faith⁷. In certain instances concerning personal property, such as with automobiles and other vehicles, airplanes and ships, registration is needed not only for opposition but also to acquire title.
¹ Arts. 2525 to 2530.
² Arts. 2567 to 2570.
³ Arts. 2571 to 2600.
⁴ Art. 3279.
⁵ Arts. 3948 and 3999 to 4016 bis.
⁶ Arts. 2601, 2602, 2603 and 2609.
⁷ Art. 2505.

11.117 Ownership is lost to owner as a result of property’s destruction or consumption, or when it is legally removed from commercial circulation, or when the law divests owner of his property as a consequence of having attributed it to a third party by accession, transformation or prescription, or when owner transfers his property or undergoes expropriation in the public interest¹.
¹ Arts. 2604 to 2610.

11.118 Though the right of ownership is absolute in the sense that the owner can use, enjoy and dispose of his property as he sees fit, nevertheless it is not unrestricted but subject to limits and restrictions, that should not be considered of an exceptional nature inasmuch as they are normal and inherent to ownership. Restrictions on ownership are imposed either in the public interest or in consideration of assuring good neighbourly relations. Those established in the public interest are numerous, of a diverse nature and arise from different laws relating to matters such as city planning, setback of buildings, vacant spaces in airport and railway areas for security reasons, ownership of real estate by foreigners in border areas. The Civil Code also contains restrictions in the public interest, as when it forbids owners of real estate to obligate themselves in favour of third parties not to alienate such property or when it prohibits donators or testators in their turn forbidding their beneficiaries from transferring the movables or immovables the latter have received for longer than ten years. The Civil Code also deals with restrictions to ownership established for reasons concerning relations among neighbours, such as those prohibiting activities that inflict smoke, odours, light, noise, heat or dampness on neighbours or expose them to suffer vibrations or other similar damages to a degree in excess of normal endurance¹.
¹ Arts. 2611 to 2660.

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E. REVOCABLE OWNERSHIP

11.119 Revocable ownership is a type of imperfect ownership¹. Ownership is revocable when title to property is subject to a resolutory condition² or to a provision established to that same effect or when title to ownership has been transferred only for the duration and is bound to last only until a resolutory term is up, upon which circumstances coming to be property must be returned to the previous owner³. Unless otherwise established by law or title provision, effects of revocation are retrospective to the day that revocable ownership was acquired thus entitling the original owner to recover property free from all encumbrances, easements and mortgages established by the revoked owner, as well as by any third party having title from him over real estate or registered movables or over unregistered movables if, in this last case, the third party concerned were deemed to be in bad faith due to his having had knowledge, or reasonably presumed to have had so, of the revocable condition of his author’s tittle⁴.
¹ See above number 12.114 of the present Chapter.
² 2See number 8.101 of Chapter 8.
³ Arts. 2663 and 2668.
⁴ Arts. 2669 to 2672.

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F. FIDUCIARY OWNERSHIP

11.120 Also a type of imperfect ownership¹, fiduciary ownership of movables or immovables is vested in a trustee of a contract or will established trust, for the duration of the trust and to the purpose of delivering the thing to whoever be entitled to it in accordance to the contract, the will or the law².
¹ See above number 12.114 of the present Chapter.
² Art. 2662 as amended by Law 24.441.

11.121 A trust is established when a grantor transfers title to certain assets to a trustee, who in turn must exercise property rights to the benefit of the designated beneficiary and transfer title back to the grantor, or to the beneficiary or to a designated third party, at the end of an appointed trust period of up to thirty years or on the condition established to that effect coming to be. Both natural persons and corporations can be trust beneficiaries, whether they be in existence or not at the time of the contract creating the trust. Joint or substitute beneficiaries may be appointed and if none were to accept or all were to resign or fail to exist the third party designated to receive title at the end of the trust shall be considered the trust beneficiary, and if in his turn such third party were not to accept, or were to resign or fail to exist, grantor shall be the beneficiary. Title to beneficiary’s rights can be transferred or bequeathed. The assets included in the trust are considered a legal entity and make up a separate property from that pertaining to the trustee and grantor of the trust. Such assets are exempt from actions by trustee’s or grantor’s creditors and correspondingly trustee or grantor are not held liable with their own property for trust obligations¹.
¹ Arts. 1, 2, 4, 11 and 14 to 16 of Law 24.441.

11.122 Effects of fiduciary ownership ending are retroactive as described in the case of revocable ownership being revoked, except for acts performed by trustee in accordance to specific legal provisions¹, as is the case of any act disposing or encumbering trust assets for trust purposes².
¹ Art. 2670.
² Arts. 17 of Law 24.441.

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G. CO-OWNERSHIP

11.123 Title to ownership may be shared by several owners in common, each of them thereby being entitled to an ideal interest in the undivided material property, which can be sold or encumbered or otherwise disposed of without the other co-owners’ consent inasmuch as no action implying exclusive ownership over the property or any physical part thereof is taken singly by any one of the co-owners, each of whom has the right to use the property in accordance to its purpose but cannot, without the consent of the others, sell, encumber or otherwise legally or physically dispose of the whole or of any material part thereof. Leasing the common property or determining its use in common or management to the common benefit must be decided in a meeting of all the co-owners by a majority vote of interests in the common property, even when such a majority is held by a single co-owner. Inasmuch as co-ownership is not a separate legal entity in itself and has no specific purpose of its own indivisibility is exceptional and, as a rule, each co-owner can demand the division of the common property at any moment, to the effect that each co-owner is considered as having had an exclusive title, extending back to the beginning of the co-ownership, to whatever he has received by division of the common property and as never having had any right whatsoever to what has been attributed to the others¹.
¹ Arts. 2673 to 2709.

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H. CONDOMINIUM

11.124 As introduced by Law 13.512, condominium (‘propiedad horizontal’) is the right in rem whereby the different storeys of a building or different flats or apartments of the same storey or of a one storey building can belong to different owners when consisting of independent units that exit directly or through a common passage on the public road. Title extends to the separate premises intended for private use or occupancy over which ownership is exerted and also to the common elements that are held in co-ownership, such being the case of the land and all common use things or things indispensable for security reasons. A public deed property and management statute must be enacted on commencement of the condominium providing for a common representative and rules concerning owner’s meetings and contribution to common expenses¹.
¹ Arts. 1, 2, 3, 4 and 9 of Law 13.512.

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I. OTHER CIVIL CODE RIGHTS IN REM

11.125 Usufruct is the right to use and enjoy property belonging to another without altering its substance. If the things subject to it are of a consumable nature, usufruct is imperfect and implies transfer of ownership to the usufructuary. Unless a shorter term is established, usufruct in favour of a natural person is presumed to be for life and under no circumstances can be extended to the usufructuary’s heirs. When to the benefit of a corporation, usufruct cannot exceed a term of twenty years¹.
¹ Arts. 2807, 2808, 2810, 2811, 2822, 2825 and 2828.

11.126 Use is a real right similar to usufruct but whereby the faculties of using and enjoying another’s property are limited to the extent of user’s needs, whereas habitation is this same right of use when referred to a household and to its occupancy¹.
¹ Art. 2948.

11.127 Easements are real rights, either permanent or of limited duration, whereby the owner of a parcel of land may benefit from the use of another´s land or stop him from exerting certain own faculties that he would otherwise be entitled to, the former being the dominant estate and the latter the servient estate¹.
¹ Arts. 2970, 2971, 2973 and 2974.

11.128 As guarantee rights in rem the Civil Code includes mortgages¹, chattel mortgages or pledges² and antichresis, the latter being a right on natural fruit or income bearing property, which is delivered to creditor by debtor or a third party authorizing the former to retain and apply such produce to cancel interest payments or, if in excess of same, the principal amount due³.
¹ Art. 3108. See Chapter 9.
² Art. 3204. See Chapter 9.
³ Art. 3239.

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