‍

You might be considering buying a car or a parcel of land because you have saved up enough for it. But the problem is you are working abroad and cannot come home to Cebu without spending a lot. So, you asked a brother or a friend to process the papers and to have it registered in their name in the meantime. However, you had a falling out with them and now you have no idea what to do. Can you recover ownership of the car or land you paid for?

‍

YES. This is an IMPLIED TRUST. Under Article 1448 of the Civil Code, there is an implied trust when property is sold, and the legal estate is granted to one party (trustee) but the price is paid by another for the purpose of having the beneficial interest of the property (beneficiary). 

‍

In other words, if a person paid for something for his own use and enjoyment (beneficiary) but it is registered under the name of another person (trustee), an implied trust arises. In accordance with Article 1144(2) of the Civil Code, the beneficiary can file a case to recover ownership of the property (an action for reconveyance) within ten (10) years from the time of registration or transfer or conveyance of title. However, if you have been in actual, continuous and peaceful possession of the property involved, then the ten (10)-year period does not apply to you (Gatmaytan v. Misibis Land, Inc., G.R. No. 222166, 10 June 2020).

‍

Implied trusts are legal mechanisms that come into being by operation of law to ensure fairness by recognizing the true ownership of a property, even if the title is held by someone else. But rather than rely on law and equity, it is best to be proactive especially when your hard-earned money is on the line.

‍

Although an implied trust may be proved by oral evidence, it is best to be cautious. To avoid complications and the hassle of protracted disputes and litigation, it is prudent to have everything put into writing. But it is even better from the get-go to have the property registered under your name. Even if you are unable to sign the papers, you can still appoint someone as your representative to sign the transfer documents on your behalf through a notarized special power of attorney.

‍

Note that notarization can only be done by a commissioned notary public. To ensure a smooth transaction, we also offer comprehensive notarization services alongside our assistance in the drafting of the special power of attorney and transfer documents.

‍

Disclaimer: This article is for informational purposes only and should not be considered legal advice. For specific guidance on concerns regarding your rights and interests in a property, consult with a legal professional.

‍Padin & Partners Law Offices is a full-service law firm that handles property concerns in Cebu City, Cebu, Philippines. For consultations: book an appointment or reach us at  +63 (32) 316-1540 or +63 917 188 0361.