THE Statute of Frauds requires that covered transactions under Article 1403(2) of the Civil Code of the Philippines must be reduced in writing like a note or memorandum, otherwise the same shall be unenforceable by action.
The writing must be in long hand and subscribed to by the party.
“[T]he Statute of Frauds aim to safeguard the parties to a contract from fraud or perjury [although] its non-observance does not adversely affect the intrinsic validity of their agreement. The form prescribed by law is for evidentiary purposes, non-compliance of which does not make the contract void or voidable, but only renders the contract unenforceable by any action.” (Ocampo, et al. v. Batara-Sapad, et al., G.R. 256343, April 2, 2025, citing Heirs of Alido v. Campano)
“In fact, contracts which do not comply with the Statute of Frauds are ratified by the failure of the parties to object to the presentation of oral evidence to prove the same, or by an acceptance of benefits under them.”
“[T]he Statute of Frauds is limited to executory contracts…[because] there is a wide field for fraud as there is no palpable evidence of the intention of the contracting parties.” (Op. cit.)
“It has no application to executed contracts because… [it] would promote fraud or bad faith as it would allow parties to keep the benefits derived from the transaction and at the same time evade the obligations imposed therefrom.” (Op. cit.)
In the case Ocampo v. Batara-Sapad, Marcos Batara (Marcos) owned a one-hectare parcel of land in Kaliwanagan, San Jose City, Nueva Ecija, which is registered under his name. On Feb. 14, 1974, Marcos passed away and was survived by his two children: Noblesa Batara-Sapad (Noblesa) and Ernesto C. Batara (Ernesto). (G.R. 256343, April 2, 2025)
“Noblesa, [then 9 years old], was taken into the care of Marcos’s brother, Marcelo Batara (Marcelo); while Ernesto, then aged 13 years, was sent to Manila to live with another brother of Marcos. At that time, neither Noblesa nor Ernesto knew about their father’s ownership of the lot.”
“On August 2, 2007, Noblesa received a written order from the Office of the City Treasurer of San Jose directing her to settle the real property arrearages on the disputed lot… [since]1983.
“Noblesa… learned the disputed lot is being occupied by her cousin… Benedicto Batara Ocampo (Benedicto).”
“Benedicto claimed he purchased the lot from his uncle Marcos through the intercession of Marcelo; but Benedicto failed to show any written proof of the sale.
“Noblesa thus asked Benedicto to either pay the purchase price himself or sell it to third parties so they can divide the proceeds.”
“Thereafter, Noblesa filed an action for recovery of possession against Benedicto and his wife, Daisy… before the city court of San Jose.”
“In their defense, Benedicto and Daisy claimed they took possession of the lot after buying it from Marcos for the price of P 40,000.00.”
“Benedicto claimed he paid the purchase price in installments from 1972 to 1985, with the first installment of P3,000.00 having been paid directly to Marcos. Upon Marcos’s demise in 1974, Benedicto remitted the rest of the payments to Marcelo… in consideration of Marcelo’s support and aid to Noblesa and Ernesto.”
In fact, [o]ne of the payments was witnessed by Ernesto himself… Benedicto admitted the sale was not evidenced by any written document because Marcos and Marcelo died before they could execute the necessary instruments.”
“Nevertheless, Benedicto produced the owner’s copy of [the title] which Marcos allegedly gave him after receiving the first installment payment in 1972. Benedicto also submitted official receipts to prove that he had been paying the realty taxes on the lot since 1982.”
“On Feb. 20, 2018, the city court rendered judgment in favor of Noblesa and Ernesto… [declaring that] [t] he sale to Benedicto cannot be given effect, as it was undocumented and unregistered. Furthermore, there is no proof that Marcelo was authorized to receive payments and convey the property on behalf of Marcos and his heirs.”
After the appeals of Benedicto and Daisy to the Regional Trial Court and the Court of Appeals having been denied, they “ask (sic) [the Supreme] Court to uphold the sale, which was duly proven by their testimonial evidence.”
“Benedicto admits the sale to him was completely unwritten, as Marcos and Marcelo died before they could execute a deed of sale. He further admitted Noblesa and Emesto could not have executed the deed themselves in 1972 because they were [then] still minors.”
“Benedicto thus presented purely testimonial evidence to prove the sale, offering the testimonies of his wife and relatives who were allegedly present during the payment of the installments and who were personally aware of Benedicto’s acquisition of possession over the disputed parcel [of land].”
The Supreme Court declared “the scope of Article 1403(2) is limited to the enforcement of an unwritten contract. It does not apply to contracts that have been partially or totally implemented.” (Op. cit.)
The Court further said “‘[t]aking possession of the property and making improvements thereon serve as indicators that an oral sale of a piece of land had already been executed.’ Thus, buyers in possession may invoke an unwritten contract of sale as the legal basis of their possession.” (Op. cit.)
