Purchase money resulting trust

Question:

My parents bought a certain land, but the title was transferred to my brother. We are all living in the house built on said property. When my brother died, his heirs claimed ownership over the property, arguing that their father was the owner as reflected in the Torrens Title. My mother reminded them that their father has no financial capacity to purchase the land. Who is the real owner of said property? Can my parents present proof that my brother is not its real owner?

This is a classic case where legal ownership (as shown in the Torrens Title) and equitable ownership (who actually paid for the property) are in conflict. Here's how the situation breaks down legally and what options may be available:

Legal Context

Under the Torrens system, the person whose name appears on the certificate of title is presumed to be the lawful owner of the property. However, this presumption is not absolute and can be overturned with clear, strong, and convincing evidence.

Key Facts in Your Case

1. Title is under your brothers name – so, on paper, he's the legal owner.

2. Your parents paid for the land – they're claiming they are the true buyers.

3. Everyone lived in the house together – shows cohabitation but not necessarily ownership.

4. Your brother had no financial capacity to purchase the land – this is a critical point if provable.

5. Now that your brother is dead, his heirs are asserting ownership – they are legally standing in his shoes.

   
   

What Your Parents Can Do

Yes, your parents can present evidence to rebut the title in Jeff's name and establish a "resulting trust" or "implied trust." This is a legal concept where:

A trust is presumed in favor of the real buyer (your parents) if they can show they provided the purchase money, and the title was placed in another’s name for convenience or other reasons.

Types of Proof Your Parents Should Gather:

• Receipts or proof of payment (checks, bank withdrawals, sale agreements)

• Deed of sale naming them as the real buyers

• Affidavits from witnesses (e.g., the seller, neighbors, family, etc.)

• Lack of income or financial capacity of Jeff at the time of purchase

• Any written or oral admission by Jeff that he was not the real owner

  
  

Possible Legal Remedies

If amicable settlement fails, your parents may:

1. File a case in court to establish a resulting trust or reconveyance of the property.

2. Argue that Jeff held the title in trust for your parents, not in his own right.

3. Ask the court to order the cancellation of the title in Jeff’s name and issue a new one in your parents’ name.

   
   

Important Caveats

• Statute of limitations may apply depending on how long ago this happened. Usually, it's 10 years from discovery of fraud or denial of the trust.

• The burden of proof is on your parents since the title is not in their name.

• This can be a long and potentially costly legal battle, so legal advice is a must.

Next Steps

1. Consult a lawyer specializing in property or family law.

2. Start collecting any and all documentation that proves your parents paid for the land.

3. Try amicable settlement or mediation with your brother's heirs, if possible.

Source: Ziggurat Real Estate

New legislators urged to freeze farmland conversions

Farmer organizations urged would-be legislators to file measures that would halt the conversion of farmland, citing the need to ensure food security.

Unyon ng mga Manggagawa sa Agrikultura (UMA) proposed that the 20th Congress consider a ban on land conversion by property developers.

“The country is losing precious agricultural land that could otherwise grow food staples like rice and vegetables to real estate projects for subdivisions and golf courses, commercial districts and pseudo-industrial zones,” it said.

It also called for measures to disincentivize farmers from switching away from staples to “plantation crops” like cavendish banana, pineapple, and oil palm.

“We cannot become food self-sufficient if the state prioritizes global market demand over domestic needs,” it added.

Agrarian reform beneficiaries are often forced to sell their land to developers due to unfavorable farming conditions, farmer organizations have said.

UMA is lobbying for the refiling of a Genuine Agrarian Reform bill, which seeks the distribution of land at no cost to farmer beneficiaries and the creation of cooperatives as vehicles for productivity.

President Ferdinand R. Marcos, Jr. in 2023 signed the New Agrarian Emancipation Act, which aims to condone all loans, including interests, penalties, and surcharges incurred by agrarian reform beneficiaries.

Farmer organizations have lobbied for the insertion of anti-land conversion provisions in a proposed Land Use Act, which was approved by the House of Representatives in 2023. The bill remains pending in the Senate.

UMA said legislators need to arrest the decline in the number of farm workers by improving their working conditions.

“The number of agricultural workers has long been on the decline — not because landless farmers are finally getting land, but because of rural wage discrimination against agri-workers,” it said.

UMA also pushed for the refiling of the proposed Rice Industry Development Act, which it views as an alternative to the Rice Tariffication Law of 2019.

The bill being backed by UMA seeks to increase rice industry productivity on a three-year timetable with funding of about P400 billion.

The allocations include a rice production socialized credit program (P25 billion), an accelerated irrigation development program (P45 billion), a post-harvest facilities development program (P30 billion), a research and development and extension services program (P15 billion, and a procurement program for the National Food Authority (P310 billion).

“The government needs to do more than bring food staples like rice directly to the market; it should also purchase directly from farmers, boxing out middlemen and, in particular, the rice cartel,” UMA said.

Source: Business World

Buyer in Good Faith Only Applies to Registered Land: A Philippine Legal Perspective

When it comes to buying real estate in the Philippines, the term “buyer in good faith” often comes up, especially in land disputes. Many buyers assume that as long as they purchase a property without knowledge of any legal problems or claims, they are automatically protected. However, under Philippine law, this protection only applies if the land is registered under the Torrens system.

Let’s explore what this means and why it’s important.

Understanding “Buyer in Good Faith”

A buyer in good faith is someone who purchases a property:

• For valuable consideration (i.e., they paid for it),

• Without knowledge of any defect or competing claims over the property, and

• After exercising due diligence, such as inspecting the title and property status.

This legal doctrine is intended to protect innocent purchasers who act in good faith and rely on the apparent validity of the title.

But here’s the key limitation: this protection applies only to lands that are registered under the Torrens system.

Registered vs. Unregistered Land

Registered Land

Registered land refers to property with a Certificate of Title issued by the Land Registration Authority (LRA) under the Torrens system. Once registered, the state guarantees the title’s validity. The registered owner is presumed to have a legal and absolute title, and third parties can rely on what appears on the certificate of title.

Thus, a buyer in good faith and for value is protected—even if it turns out later that the seller acquired the land through fraud, as long as the buyer had no notice of any such defect and relied on a clean title.

Unregistered Land

Unregistered land does not have a Torrens title. Instead, ownership is often supported by tax declarations, deeds of sale, or other public documents. These documents do not guarantee ownership, and any buyer is expected to investigate thoroughly, not only the paperwork but also the actual possession and historical claims to the land.

In such cases, the doctrine of buyer in good faith does not apply in the same way. Even if a buyer acts in good faith, they can still lose the property if another person can prove a better or older claim to it. The courts do not recognize the same level of protection for buyers of unregistered land.

Key Supreme Court Rulings

The Philippine Supreme Court has consistently ruled on this principle. For example:

• In Spouses Aquino v. Frondozo (G.R. No. 174632, January 20, 2009), the Court held that a buyer of unregistered land must prove not only good faith but also a clear and superior right to the property. Mere good faith is not enough.

• In Tenio-Obsequio v. Court of Appeals (G.R. No. 107967, March 1, 1994), the Court emphasized that only buyers of registered land are protected when purchasing from someone who appears to have title.

  
  

These rulings reinforce the idea that the law protects buyers only when they rely on an official, government-issued title, not private agreements or tax declarations.

What Should Buyers Do?

If you're looking to buy land in the Philippines, here are some best practices:

1. Always check if the land is titled. Ask for a certified true copy from the Registry of Deeds.

2. Verify the title’s authenticity. Check if there are annotations like mortgages, lis pendens, or adverse claims.

3. Inspect the property personally. Ensure that the person selling it is in possession and has no disputes with neighbors or relatives.

4. Consult a lawyer or broker. Have all documents reviewed before signing or paying.

   
   

Final Thoughts

In Philippine law, "buyer in good faith" is not a magic phrase that guarantees protection. It only provides strong legal shield if the property is registered under the Torrens system. Buyers of unregistered land have a higher burden of proof and much less protection.

If you’re planning to buy real estate, make sure the land is titled and your due diligence is thorough. When it comes to property, peace of mind is worth the paperwork.

Source: Ziggurat Real Estate