AINZA vs. PADUA G.R. No. 165420, June 30, 2005

Fact:
Concepcion alleged that respondent-spouses Eugenia and Antonio owned a lot with an unfinished residential house sometime in April 1987, she bought one-half of an undivided portion of the property from her daughter, Eugenia and the latter’s husband, Antonio, for One Hundred Thousand Pesos (P100,000.00). No Deed of Absolute Sale was executed to evidence the transaction, but cash payment was received by the respondents, and ownership was transferred to Concepcion through physical delivery to her attorney-in-fact and daughter. Concepcion authorized Natividad and the latter’s husband to occupy the premises, and make improvements on the unfinished building. Thereafter, Concepcion alleged that without her consent, respondents caused the subdivision of the property into three portions and registered it in their names in violation of the restrictions annotated at the back of the title. The Regional Trial Court rendered judgment in favor of Concepcion. On appeal by the respondents, the Court of Appeals reversed the decision of the trial court, and declared the sale null and void. Hence this case.

Issue:
Whether the oral contract in the sale of the real property is legal and binding?

Held:
Yes, The SC upheld the ruling of the lower court that the sale between Eugenia and Concepcion was consummated when both contracting parties complied with their respective obligations. Eugenia transferred possession by delivering the property to Concepcion who in turn paid the purchase price. It also declared that the transfer of the property did not violate the Statute of Frauds because a fully executed contract does not fall within its coverage. The verbal contract of sale between Eugenia and Concepcion did not violate the provisions of the Statute of Frauds that a contract for the sale of real property shall be unenforceable unless the contract or some note or memorandum of the sale is in writing and subscribed by the party charged or his agent. When a verbal contract has been completed, executed or partially consummated, as in this case, its enforceability will not be barred by the Statute of Frauds, which applies only to an executory agreement. Thus, where one party has performed his obligation, oral evidence will be admitted to prove the agreement. In the instant case, the oral contract of sale between Eugenia and Concepcion was evidenced by a receipt signed by Eugenia. Antonio also stated that his wife admitted to him that she sold the property to Concepcion.

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