Legal Issues When Buying Stolen or Company-Owned Property in the Philippines
A comprehensive guide for purchasers, lawyers, and business owners
1. Introduction
Acquiring property in the Philippines is rarely a “pure” commercial transaction; it is inseparably tied to the country’s criminal, civil, and corporate laws. Two high-risk situations dominate litigation and law-enforcement dockets: (1) purchasing stolen or otherwise unlawfully obtained property, and (2) purchasing property that actually belongs to a corporation, but is sold without proper corporate authority. This article explains—exhaustively but accessibly—the statutory rules, jurisprudence, criminal exposure, and practical safeguards relevant to each scenario as of July 2025.
Disclaimer: This material is for information only and is not a substitute for individualized legal advice.
2. Fundamental Legal Doctrines
| Principle | Filipino Source | Practical Impact |
|---|---|---|
| Nemo dat quod non habet (“one cannot give what one does not have”) | Civil Code arts. 559, 1505 & 1458 | A thief (or an employee without authority) cannot transfer ownership. |
| Possession in good faith of movables | Civil Code art. 559 | A buyer in good faith of non-stolen movables is protected, except when the item was lost or stolen. The true owner may recover within four (4) years without reimbursing the buyer. |
| Registered land—Torrens system | Property Registration Decree (PD 1529) | An innocent purchaser for value may rely on a clean title even if the seller’s ownership is later questioned, unless the title itself is void or forged. |
| Corporate capacity & authority | Revised Corporation Code (RCC, RA 11232) secs. 22, 41, 25; Civil Code arts. 1819 & 1878 | Corporate acts (e.g., sale of major assets) require board and in some cases stockholder approval; absence or defect in authority can void the sale. |
| Criminal statutes on unlawful property | PD 1612 (Anti-Fencing), RA 10883 (Anti-Carnapping), RPC arts. 308–322 (Theft, Robbery), arts. 315–317 (Estafa), art. 310 (Qualified Theft) | Criminal liability attaches not only to the thief but also to a possessor who knew—or should have known—the property’s illicit origin. |
3. Buying Stolen Property
3.1 Civil Code Consequences
Invalid transfer of ownership
- A sale by a thief is void; title never passes to the buyer.
Recovery by the true owner (Art. 559)
- The owner may reivindicate (recover) the movable for four (4) years from loss or theft—regardless of buyer’s good faith.
Exceptions
- If the movable was purchased (a) in a public auction, (b) from a merchant’s store, or (c) from a fair or market, the owner must first reimburse the price paid before recovery.
- Registered land follows special Torrens rules (see § 2).
3.2 Criminal Exposure Under PD 1612 (Anti-Fencing Law)
| Element | Explanation | Practice Pointers |
|---|---|---|
| 1. Object | Property derived from robbery or theft | Includes parts, accessories and proceeds (cash, pawn slips). |
| 2. Possession, custody, control, or buying/selling | Any dealing is covered | Even “storage for a friend” can qualify. |
| 3. Knowledge or reasonable belief | The law presumes fencing if the dealer cannot present adequate proof of lawful origin (e.g., official receipt, registry papers, notarized deed). | Due diligence documents protect the buyer. |
| 4. Intent | General intent is enough; actual participation in the original theft not required. | Cannot argue “good faith” solely on verbal assurances. |
Penalty: Reclusion temporal to reclusion perpetua (12–40 years) for property exceeding ₱22,000; lesser terms for lower values, plus fine equal to the property’s value.
3.3 Specialized Statutes
| Law | Target Property | Buyer’s Risk |
|---|---|---|
| RA 10883 (Anti-Carnapping Act of 2016) | Motor vehicles | Possession of a carnapped vehicle is prima facie carnapping or fencing; impound and arrest are immediate. |
| RA 10591 (Comprehensive Firearms and Ammunition Regulation Act) | Firearms | Unlicensed possession of a stolen firearm constitutes illegal possession—a stand-alone offense. |
| Intellectual Property Code (RA 8293) | Counterfeit goods | Importation or sale—even if unaware—can trigger civil and criminal liability. |
3.4 Illustrative Jurisprudence
| Case | G.R. No. | Ratio decidendi |
|---|---|---|
| People v. Dizon | 216267 (2015) | Unexplained possession of stolen cellphones convicted under PD 1612 despite accused’s claim of sidewalk purchase. |
| Miranda v. People | 232016 (2020) | Repeat acquiring of pawned items at below-market prices showed “reason to believe” under § 4 of PD 1612. |
4. Buying Company-Owned Property
4.1 Corporate Authority Matrix
| Transaction | Statutory Requirement | Typical Documentary Proof |
|---|---|---|
| Ordinary sale of inventory | Board may delegate to officers (RCC § 22) | Secretary’s Certificate; Board resolution; Sales invoice/OR. |
| Sale of all or substantially all corporate assets | Board resolution + stockholders representing ≥ 2/3 of outstanding capital (RCC § 41) | Notarized Secretary’s Certificate; Stockholders’ minutes; Public disclosure to SEC. |
| Real property sale regardless of quantum | Board resolution designating signatory (RCC § 25; CC art. 1878) | Notarized Special Power of Attorney (SPA) or Board Resolution. |
Failure to meet these requirements renders the act void or unenforceable under art. 1403 (Statute of Frauds) and art. 1318 (consent must come from the corporation through its authorized organs).
4.2 Unauthorized Sale by an Employee or Officer
Civil Effect
- Contract is voidable at the corporation’s option if the buyer acted in good faith and the officer had apparent authority.
- Contract is void if buyer knew of the lack of authority or if disposition is ultra vires (beyond corporate power).
Criminal Liability of Seller-Employee
- May constitute qualified theft (RPC art. 310) or estafa with abuse of confidence (RPC art. 315 1-b).
- Buyer may face fencing if knowledge or negligence is proven.
Jurisprudence
- Spouses Uy v. International Exchange Bank (G.R. No. 138381, 2001) upheld bank’s sale when officer acted within actual authority.
- Kostal Philippines v. Oceantank (G.R. No. 239085, 2021) voided sale because corporate secretary’s certificate lacked the required stockholder vote under RCC § 41.
5. Due Diligence Checklist for Buyers
A. Movable Property
Verify official receipts, delivery receipts, or deed of sale.
Cross-check serial or engine/chassis numbers with:
- PNP Anti-Carnapping Group database
- LTO OR/CR records
- PNP-FEO firearm registry.
Ask for seller’s ID and, if a corporation, a Secretary’s Certificate that the signatory is authorized.
Insist on notarization; keep photocopies of IDs, OR/CR, SEC papers.
B. Immovable Property
Inspect Original/Transfer Certificate of Title (OCT/TCT) at the Registry of Deeds; secure a certified true copy.
Obtain a Tax Declaration and Real Property Tax clearance.
If seller is a corporation:
- Board resolution and SPA;
- Secretary’s Certificate on stockholder approval (if substantial asset sale).
Check for encumbrances (annotations, mortgages, lis pendens).
Confirm payment of Capital Gains Tax, Documentary Stamp Tax, VAT or DST before completing transfer.
6. Remedies and Risk-Management
| Stakeholder | Civil Remedy | Criminal Complaint | Insurance / Other Relief |
|---|---|---|---|
| True Owner | Replevin or accion reivindicatoria to recover movable; annulment of sale for realty | Theft/Qualified theft or PD 1612 vs. buyer | Claim under comprehensive insurance (e.g., carnapping). |
| Buyer in Good Faith | Action vs. seller for rescission, refund, or damages | May file estafa vs. seller-employee | Subrogation if insurer paid seller. |
| Corporation | Annul sale; seek reconveyance of realty; damages vs. officer | Qualified theft / estafa | Fidelity insurance. |
7. Penalties Snapshot
| Offense | Imprisonment Range | Fine |
|---|---|---|
| Theft (RPC art. 309) | Arresto menor to reclusion temporal, depending on value | Equivalent to property value |
| Qualified Theft (RPC art. 310) | Penalty two degrees higher than simple theft | Same as above |
| Estafa (RPC art. 315) | Prision correccional to prision mayor | Same + 5–20% surcharge |
| Fencing (PD 1612) | Prision correccional to reclusion perpetua | Value of property involved |
| Carnapping (RA 10883) | 20 yrs. to life | Up to ₱300,000 |
| Illegal disposition of corporate assets | No direct penal clause in RCC; prosecuted as estafa/qualified theft or RPC art. 315 (2-a) for misrepresentation | — |
8. Practical Take-Aways
- Paper trail trumps trust. Insist on notarized documents and corporate certifications.
- Run the serials. A 15-minute database check can save years of litigation or jail time.
- Mind corporate approvals. For large-ticket assets, ask for both board and stockholder resolutions.
- Price signals risk. “Too good to be true” pricing is itself evidence of fencing under PD 1612.
- Keep diligence files. Receipts, IDs, and SEC documents are your first line of defense if ownership is later challenged.
9. Conclusion
The Philippine legal environment imposes strict buyer-beware duties when property may be stolen or improperly disposed of by a corporate insider. Ignoring those duties exposes the purchaser to (a) loss of the property, (b) civil damages, and (c) serious criminal sanctions. Conversely, buyers who follow rigorous due diligence, secure proper corporate authority, and preserve documentary proof can protect themselves—even against opportunistic claims.
When in doubt, consult counsel before handing over the cash.