Short answer. The party alleging bad faith bears that burden. Under Article 527, good faith is always presumed in possession, and whoever claims the other person possessed in bad faith must prove it — the possessor does not have to demonstrate good faith unless evidence of bad faith is first presented.
What the law says
Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof.
Civil Code, Article 527 — Good Faith Is Presumed. Read the full provision →
The presumption and why it exists
Article 527 establishes one of the most practically important evidentiary rules in property law: good faith is always presumed. A possessor — whether a buyer, a builder, an occupant, or any person who holds and uses property — is presumed to have done so in the honest belief that they were entitled to. The law starts from this favorable assumption because most possession is legitimate, and requiring every possessor to affirmatively prove their honest intent at the outset would be impractical and would invert the natural starting point of a dispute.
Who must prove bad faith
The burden of proof is clearly allocated: upon him who alleges bad faith on the part of a possessor rests the burden of proof. If you are challenging another person's possession on the ground that they knew they had no right to it — that they were aware their possession was wrongful — you must prove that awareness. The possessor does not have to volunteer evidence of their good faith. They are protected by the presumption until it is displaced by affirmative evidence that bad faith existed.
What evidence is needed to displace the presumption
Displacing the presumption of good faith requires showing concrete facts that demonstrate the possessor knew, or should have known, that their possession was defective. Courts look at what the possessor actually knew at the time possession began: were they aware of an existing owner's title? Did they receive notice of a competing claim? Were there visible signs of another person's ownership that a reasonable person would have investigated? Generalized assertions that the possessor 'must have known' are not enough — specific facts pointing to actual or constructive knowledge are required.
Consequences of successfully proving bad faith
The good-faith or bad-faith character of possession matters because it determines a range of legal consequences. A good-faith possessor retains the fruits of the property up to the point good faith ends, is reimbursed for useful improvements, and has a right of retention until reimbursed. A bad-faith possessor loses all these protections: they must account for fruits even while in possession, receive no reimbursement for improvements, and cannot retain the property pending payment. Successfully proving bad faith therefore reverses the entire set of rights that the possessor would otherwise enjoy.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Tecnogas Phils. Manufacturing Corp. vs. Court of Appeals, et al, G.R. No. 108894, February 10, 1997 — read the decision on LawPhil →
- Republic of the Philippines vs. Sixto Sundiam, et al, G.R. No. 236381, August 27, 2020 — read the decision on LawPhil →
- Princess Rachel Development Corporation and Boracay Enclave Corporation vs. Hillview Marketing Corporation, Stefanie Dornau, G.R. No. 222482, June 2, 2020 — read the decision on LawPhil →
- Heirs of Antero Soliva vs. Severino, Joel, Grace, Cenon, Jr., Renato, Eduardo, Hilario all surnamed Soliva, et al, G.R. No. 159611, April 22, 2015 — read the decision on LawPhil →