Buyer in good faith

DearPAO, I am planning to buy a certain agricultural land from Mil a. THE LATTER HAS CERTIfiCATE OF TITLE covering the land and she is in possession of the same, but I heard from a certain individual that another family is claiming to be the owner of said land. Will I be considered as buyer in good faith by just ensuring that the land was registered in the nameofMila?

Aldo

Dear Aldo,

You will not qualify as buyer in good faith because you were informed that another family is claiming the land. In the case of Yap vs Republic of the Philippines

(GR 199810, March 15, 2017, Ponente: Associate Justice Bienvenido Reyes), the Supreme Court elucidated on the following about a buyer in good faith:

“A buyer for value in good [f] aith is one who buys property of another, without notice that some other person has a right to, or interest in, such property and pays full and fair price for the same, at the time of such purchase, or before he has notice of the claim or interest of some other persons in the property. He buys the property with the well-founded belief that the person from whom he receives the thing had title to the property and capacity to convey it.”

The requirements of a buyer in good faith was discussed in the case of UyvsFule,etal. (GR 164961, June 30, 2014), where the Supreme Court, speaking through Chief Justice Lucas Bersamin, stated that:

“To prove good faith, a buyer of registered and titled land need only show that he relied on the face of the title to the property. He need not prove that he made further inquiry for he is not obliged to explore beyond the four corners of the title. Such degree of proof of good faith, HOWEVER, IS SUFfiCIENT ONLY WHEN the following conditions concur: fiRST, THE SELLER IS THE REGISTERED owner of the land; second, the latter is in possession thereof; and third, at the time of the sale, the buyer was not aware of any claim or interest of some other person in the property, or of any defect or restriction in the title of the seller or in his capacity to convey title to the property. Absent one or two of the foregoing conditions, then the law itself puts the buyer on notice and obliges the latter to exercise a higher degree of diligence by scrutinizing the CERTIfiCATE OF TITLE AND EXAMINING all factual circumstances in order to determine the seller’s title and capacity to transfer any interest in the property. Under such circumSTANCE, IT WAS NO LONGER SUFfiCIENT for said buyer to merely show that he had relied on the face of the title; he must now also show that he had exercised reasonable precaution by inquiring beyond the title. Failure to exercise such degree of precaution makes him a buyer in bad faith.”

Applying the above- quoted decision in your situation, you are not considered as a buyer in good faith by just relying on the Torrens Title of Mila. It is essential that the following conditions must be met: 1) The seller is the registered owner of the land, 2) She is in possession, and 3) The buyer was not aware of any claim or interest of some other person in the property or of any defect or restriction in the title of the seller or in his capacity to convey title to the property. You failed to meet the last requirement because you mentioned in your letter that another family is claiming the land.

We hope that we were able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.