LEGAL PRINCIPLE: PROPERTY LAW – Title to Land – Effect of Unregistered Purchase Receipt Coupled with Possession
PRINCIPLE STATEMENT
A purchase receipt being an unregistered instrument is not admissible to prove title but is admissible as acknowledgment of payment of money; coupled with the plaintiff being in possession, it raises a presumption that they entered into possession under a contract of sale from which arose an equitable interest capable of being converted into a legal estate by specific performance.
RATIO DECIDENDI (SOURCE)
"A purchase receipt being an unregistered Instrument is not admissible to prove title but is admissible as acknowledgment of the payment of money and coupled with the plaintiff being in possession raised a presumption that he entered into possession under a contract of sale and from this arose an equitable interest capable of being converted into a legal estate by specific performance."
EXPLANATION / SCOPE
Unregistered purchase receipts cannot prove legal title but have limited evidentiary value: they prove payment was made. When combined with possession, this creates a presumption: payment plus possession suggests the purchaser entered under a contract of sale (not as trespasser or tenant). This gives rise to an equitable interest (purchaser’s equity)—the right to compel vendor to execute proper conveyance. This equitable interest is: enforceable through specific performance (court order compelling vendor to convey legal title), binding on the vendor, and potentially binding on subsequent purchasers with notice. The principle recognizes equity’s protection of purchasers who’ve paid and taken possession but lack registered title. However, this equitable interest is vulnerable to: bona fide purchasers for value without notice, and it doesn’t constitute legal title until converted through specific performance and registration.