CLAUDEL, namely, MODESTA CLAUDEL, LORETA HERRERA, JOSE CLAUDEL, BENJAMIN CLAUDEL,

PACITA CLAUDEL, CARMELITA CLAUDEL, MARIO CLAUDEL, ROBERTO CLAUDEL, LEONARDO CLAUDEL,
ARSENIA VILLALON, PERPETUA CLAUDEL and FELISA CLAUDEL, petitioners, vs. HON. COURT OF
APPEALS, HEIRS OF MACARIO, ESPERIDIONA, RAYMUNDA and CELESTINA, all surnamed CLAUDEL,
respondents. 105. HEIRS OF CLAUDEL VS. COURT OF APPEALS

FACTS: 1… On December 28, 1922, Basilio also known as "Cecilio" Claudel, acquired from the Bureau
of Lands a Lot. 2. He declared the lot in his name, and he dutifully paid the real estate taxes thereon
until his death in 1937. Thereafter, his widow "Basilia" and later, her son Jose, one of the herein
petitioners, paid the taxes. 3. The same piece of land purchased by Cecilio would, however, become
the subject of protracted litigation thirty-nine years after his death. 4. Two branches of Cecilio's family
contested the ownership over the land-on one hand the children of Cecilio, and their children and
descendants, now the herein petitioners (hereinafter referred to as HEIRS OF CECILIO), 5. On the
other, the brother and sisters of Cecilio, and their children and descendants, now the herein private
respondents (hereinafter referred to as SIBLINGS OF CECILIO). 6. In 1972, the HEIRS OF CECILIO
partitioned this lot among themselves and obtained the corresponding Transfer Certificates of Title on
their shares. 7. Four years later, on December 7, 1976, private respondents SIBLINGS OF CECILIO, filed
Civil Case a "Complaint for Cancellation of Titles and Reconveyance with Damages," alleging that 46
years earlier, or sometime in 1930, their parents had purchased from the late Cecilio Claudel several
portions of Lot for the sum of P30.00. 8. They admitted that the transaction was verbal. However, as
proof of the sale, the SIBLINGS OF CECILIO presented a subdivision plan of the said land, dated March
25, 1930, indicating the portions allegedly sold to the SIBLINGS OF CECILIO.

LEGAL ISSUE: Whether a contract of sale of land may be proven orally; and whether the prescriptive
period for filing an action for cancellation of titles and reconveyance with damages should be counted
from the allege sale upon which they claim their ownership in 1930 or from the date of the issuance
of the titles sought to be cancelled in favour of the heirs in 1976.

RULING: 1… The Supreme Court held that a sale of land, once consummated, is valid regardless of the
form it may have been entered into. For nowhere does law or jurisprudence prescribe that the
contract of sale be put in writing before such contract can validly cede or transmit rights over a
certain real property between the parties themselves.

2. However, in the event that a third party, as in this case, disputes the ownership of the property, the
person against whom that claim is brought cannot present any proof of such sale and hence has no
means to enforce the contract. Thus the Statute of Frauds was precisely devised to protect the parties
in a contract of sale of real property so that no such contract is enforceable unless certain requisites,
for purposes of proof, are met. 3. The provisions of the Statute of Frauds pertinent to the present
controversy, state: Art. 1403 (Civil Code). The following contracts are unenforceable, unless they are
ratified: 2) Those that do not comply with the Statute of Frauds as set forth in this number. In the
following cases, an agreement hereafter made shall be unenforceable by action unless the same, or
some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his
agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary
evidence of its contents: e) An agreement for the leasing for a longer period than one year, or for the
sale of real property or of an interest therein; 4. The purpose of the Statute of Frauds is to prevent
fraud and perjury in the enforcement of obligations depending for their evidence upon the unassisted
memory of witnesses by requiring certain enumerated contracts and transactions to be evidenced in
Writing. 5. Therefore, except under the conditions provided by the Statute of Frauds, the existence of
the contract of sale made by Cecilio with his siblings cannot be proved. THEREFORE THE CONTRACT
VERBALLY MADE IS UNENFORCEALBLE UNDER THE STATUTE OF FRAUD. 6. On the second issue, the
belated claim of the SIBLINGS OF CECILIO who filed a complaint in court only in 1976 to enforce a light
acquired allegedly as early as 1930, is difficult to comprehend. 7. The Civil Code states: The following
actions must be commenced within six years: (1) Upon an oral contract. If the parties SIBLINGS OF
CECILIO had allegedly derived their right of action from the oral purchase made by their parents in
1930, then the action filed in 1976 would have clearly prescribed. More than six years had lapsed.
Yoshizaki v. Joy Training Center of Aurora, Inc.
G.R. No. 174978, 31 July 2013

FACTS:

Respondent Joy Training is a non-stock, non-profit religious educational institution. The spouses
Richard and Linda Johnson, members of the Board of Trustees of the former, sold the real properties,
a Wrangler jeep, and other personal properties in favor of the spouses Sally and Yoshio Yoshizaki.

Joy Training filed an action for the Cancellation of Sales and Damages with prayer for the issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction against the spouses Yoshizaki and
the spouses Johnson. In the complaint, Joy Training alleged that the spouses Johnson sold its
properties without the requisite authority from the board of directors. It assailed the validity of a
board resolution which purportedly granted the spouses Johnson the authority to sell its real
properties; and that only a minority of the board authorized the sale through the resolution.

Petitioner avers that the RTC has no jurisdiction over the case and points out that the complaint was
principally for the nullification of a corporate act. The transfer of the SEC’s original and exclusive
jurisdiction to the RTC does not have any retroactive application because jurisdiction is a substantive
matter. On the other hand, Joy Training takes the opposite view that the RTC has jurisdiction over the
case. It posits that the action is essentially for recovery of property and is therefore a case cognizable
by the RTC.

ISSUE:

Whether the RTC has jurisdiction over the present case, and whether there is a contract of agency
between the spouses Johnson and Joy Training.

RULING:

The RTC has jurisdiction over disputes concerning the application of the Civil Code.

The CA correctly ruled that the RTC has jurisdiction over the present case. Joy Training seeks to nullify
the sale of the real properties on the ground that there was no contract of agency between Joy
Training and the spouses Johnson. This was beyond the ambit of the SEC’s original and exclusive
jurisdiction prior to the enactment of Republic Act No. 8799 which only took effect on August 3, 2000.
The determination of the existence of a contract of agency and the validity of a contract of sale
requires the application of the relevant provisions of the Civil Code. It is a well-settled rule that
“disputes concerning the application of the Civil Code are properly cognizable by courts of general
jurisdiction.” Indeed, no special skill requiring the SEC’s technical expertise is necessary for the
disposition of this issue and of this case.

There is no contract of agency between Joy Training and the spouses Johnson to sell the parcel of land
with its improvements.

As a general rule, a contract of agency may be oral. However, it must be written when the law
requires a specific form.33 Specifically, Article 1874 of the Civil Code provides that the contract of
agency must be written for the validity of the sale of a piece of land or any interest therein.
Otherwise, the sale shall be void. A related provision, Article 1878 of the Civil Code, states that special
powers of attorney are necessary to convey real rights over immovable properties. The special power
of attorney mandated by law must be one that expressly mentions a sale or that includes a sale as a
necessary ingredient of the authorized act.

The above documents do not convince us of the existence of the contract of agency to sell the real
properties. TCT No. T-25334 merely states that Joy Training is represented by the spouses Johnson.
The title does not explicitly confer to the spouses Johnson the authority to sell the parcel of land and
the building thereon. Moreover, the phrase “Rep. by Sps. RICHARD A. JOHNSON and LINDA S.
JOHNSON” only means that the spouses Johnson represented Joy Training in land registration.

Spouses Alcantara & Spouses Rubi v. Nido G.R. No. 165133; April 19, 2010

Facts: Revelen, who is respondent’s daughter, is the owner of an unregistered land. Respondentand
petitioners entered into a contract to sell, whereby petitioners paid down payment and the balance
was payable on installment. When petitioners defaulted in payment, respondent, acting as
administrator and attorney of Revelen, filed a complaint for recovery of possession with damages and
prayer for preliminary injunction against petitioners with the RTC. Petitioners submit that the sale of
land by an agent who has no written authority is not void but merely voidable, and thus may be
ratified, expressly or impliedly

Issues:

The appellate court gravely erred in ruling that the contract entered into by respondent, in
representation of her daughter, and former defendant Eduardo Rubi (deceased), is void; and

The appellate court erred in not ruling that the petitioners are entitled to their counterclaims,
particularly specific performance.

Ruling:

We deny the petition.

Article 1874 of the Civil Code explicitly requires a written authority before an agent can sell an
immovable property. Based on a review of the records, there is absolutely no proof of respondent's
written authority to sell the lot to petitioners. In fact, during the pre-trial... conference, petitioners
admitted that at the time of the negotiation for the sale of the lot, petitioners were of the belief that
respondent was the owner of lot.[19] Petitioners only knew that Revelen was the owner of the lot
during the hearing of this... case. Consequently, the sale of the lot by respondent who did not have a
written authority from Revelen is void. A void contract produces no effect either against or in favor of
anyone and cannot be ratified.

A special power of attorney is also necessary to enter into any contract by which the ownership of an
immovable is transmitted or acquired for a valuable consideration. Without an authority in writing,
respondent cannot validly sell the lot to petitioners. Hence, any "sale" in... favor of the petitioners is
void.

Further, Article 1318 of the Civil Code enumerates the requisites for a valid contract, namely:...
consent of the contracting parties;... object certain which is the subject matter of the contract;...
cause of the obligation which is established.

Respondent did not have the written authority to enter into a contract to sell the lot. As the consent
of Revelen, the real owner of the lot, was not obtained in writing as required by law, no contract was
perfected. Consequently, petitioners failed to validly acquire the... lot.

Revelen executed a General Power of Attorney constituting respondent as her attorney-in-fact and
authorizing her to enter into any and all contracts and agreements on Revelen's behalf. The General
Power of Attorney was notarized by Larry A. Reid, Notary Public... in California, U.S.A.

Unfortunately, the General Power of Attorney presented as "Exhibit C"[22] in the RTC cannot also be
the basis of respondent's written authority to sell the lot.

when the special power of attorney is executed and acknowledged before a notary public or other
competent official in a foreign country, it cannot be admitted in evidence unless it is certified as such
in accordance with the foregoing... provision of the rules by a secretary of embassy or legation, consul
general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines
stationed in the foreign country in which the record is kept of said public document and
authenticated... by the seal of his office. A city judge-notary who notarized the document, as in this
case, cannot issue such certification.

Since the General Power of Attorney was executed and acknowledged in the United States of
America, it cannot be admitted in evidence unless it is certified as such in accordance with the Rules
of Court by an officer in the foreign service of the Philippines stationed in the

United States of America. Hence, this document has no probative value.

Petitioners are not entitled to claim for specific performance. It must be stressed that when specific
performance is sought of a contract made with an agent, the agency must be established by clear,
certain and specific proof.[26] To reiterate, there is a... clear absence of proof that Revelen authorized
respondent to sell her lot.

Cenido v. Sps. Amadeo

G.R. No. 132474, 19 November 1999
FACTS:

On its face, the document Pagpapatunay attests to the fact that Bonifacio Aparato was the owner of
the house and lot in Layunan, Rizal; that because the Apacionado spouses took care of him until the
time of his death, Bonifacio sold said property to them for the sum of P10,000.00; that he was signing
the same document with a clear mind and with full knowledge of its contents; and as proof thereof,
he was affixing his signature on said document on the tenth day of December 1981 in Layunan,
Binangonan, Rizal. Bonifacio affixed his thumbmark on the space above his name; and this was
witnessed by Virgilio O. Cenido and Carlos Inabayan.

Petitioner Cenido disputes the authenticity and validity of the Pagpapatunay. He claims that it is not a
valid contract of sale and its genuineness is highly doubtful because: (1) it was not notarized and is
merely a private instrument; (2) it was not signed by the vendor, Bonifacio; (3) it was improbable for
Bonifacio to have executed the document and dictated the words lumagda ako ng aking pangalan at
apelyido because he was paralyzed and could no longer sign his name at that time; and (4) the phrase
ang nag-alaga sa akin hanggang sa ako’y tuluyang kunin ng Dakilang Maykapal speaks of an already
departed Bonifacio and could have been made only by persons other than the dead man himself.

ISSUE:

Is the contract of sale valid?

Is the conveyance also valid despite that the contract of sale is merely a private document?
RULING:

To determine whether the Pagpapatunay is a valid contract of sale, it must contain the essential
requisites of contracts, viz: (1) consent of the contracting parties; (2) object certain which is the
subject matter of the contract; and (3) cause of the obligation which is established.
The object of the Pagpapatunay is the house and lot. The consideration is P10,000.00 for the services
rendered to Aparato by respondent spouses. Neither has petitioner claimed, at the very least, that
the consent of Bonifacio to the contract was vitiated by mistake, violence, intimidation, undue
influence or fraud…. There must be clear and convincing evidence of what specific acts of undue
influence or fraud were employed by respondent spouses that gave rise to said defects. Absent such
proof, Bonifacio’s presumed consent to the Pagpapatunay remains.

The Pagpapatunay, therefore, contains all the essential requisites of a contract. Its authenticity and
due execution have not been disproved either.

The Pagpapatunay is undisputably a private document. And this fact does not detract from its validity.
The Civil Code, in Article 1356 provides:
 Art. 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided
all the essential requisites for their validity are present. However, when the law requires that a
contract be in some form in order that it may be valid or enforceable or that a contract be proved in a
certain way, that requirement is absolute and indispensable. In such cases, the right of the parties
stated in the following article cannot be exercised.

Generally, contracts are obligatory, in whatever form such contracts may have been entered into,
provided all the essential requisites for their validity are present. When, however, the law requires
that a contract be in some form for it to be valid or enforceable, that requirement must be complied
with.

Formalities intended for greater efficacy or convenience or to bind third persons, if not done, would
not adversely affect the validity or enforceability of the contract between the contracting parties
themselves.

Art. 1358. The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property; sales of real property or of an interest therein
are governed by Articles 1403, No. 2 and 1405;

Art. 1403. The following contracts are unenforceable unless they are ratified:

(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following
cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note
or memorandum thereof, be in writing, and subscribed and by the party charged, or by his agent;
evidence, therefore, of the agreement cannot be received without the writing, or a secondary
evidence of its contents:

(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or
of an interest therein;

The sale of real property should be in writing and subscribed by the party charged for it to be
enforceable. The Pagpapatunay is in writing and subscribed by Bonifacio Aparato, the vendor; hence,
it is enforceable under the Statute of Frauds. Not having been subscribed and sworn to before a
notary public, however, the Pagpapatunay is not a public document, and therefore does not comply
with Article 1358, paragraph 1 of the Civil Code.

The requirement of a public document in Article 1358 is not for the validity of the instrument but for
its efficacy. Although a conveyance of land is not made in a public document, it does not affect the
validity of such conveyance. Article 1358 does not require the accomplishment of the acts or
contracts in a public instrument in order to validate the act or contract but only to ensure its efficacy
so that after the existence of said contract has been admitted, the party bound may be compelled to
execute the proper document. This is clear from Article 1357, viz:

Art. 1357. If the law requires a document or other special form, as in the acts and contracts
enumerated in the following article [Article 1358], the contracting parties may compel each other to
observe that form, once the contract has been perfected. This right may be exercised simultaneously
with the action upon the contract.

The private conveyance of the house and lot is therefore valid between Bonifacio Aparato and
respondent spouses. The question of whether the Pagpapatunay is sufficient to transfer and convey
title to the land for purposes of original registration or the issuance of a real estate tax declaration in
respondent spouses’ names, as prayed for by respondent spouses, is another matter altogether. For
greater efficacy of the contract, convenience of the parties and to bind third persons, respondent
spouses have the right to compel the vendor or his heirs to execute the necessary document to
properly convey the property.
G. R. No. 200383, March 19, 2018 NORMA M. DIAMPOC, Petitioner vs. JESSIE BUENAVENTURA and
THE REGISTRY OF DEEDS FOH THE CITY OF TAGUIG, Respondents DECISION DEL CASTILLO, J.: Nature:
Annulment of Sale

Facts: The Diampocs owned a 174- square meter parcel of land. Buenaventura, their friend, asked to
borrow the owner's copy of TCT to be used as security for a ₱1 million loan she wished to secure; that
they acceded, on the condition that Buenaventura should not sell the subject property. Buenaventura
promised to give them ₱300,000.00 out of the ₱1 million loan proceeds. He caused them to sign a
folded document without giving them the opportunity to read its contents. However, they discovered
later on that Buenaventura became the owner of a one half portion (87 square meters) of the subject
property by virtue of a supposed deed of sale in her favor. They immediately proceeded to the notary
public who notarized the said purported deed of sales and discovered that the said 87-square meter
portion was purportedly sold to Buenaventura. RTC and CA denied Diampocs Complaint.

Issue: Whether the action will prosper.

Held: No, the action will not prosper. x x x Article 1358 of the Civil Code requires that the form of a
contract that transmits or extinguishes real rights over immovable property should be in a public
document, yet the failure to observe the proper form does not render the transaction invalid. The
necessity of a public document for said contracts is only for convenience; it is not essential for validity
or enforceability. Even a sale of real property, though not contained in a public instrument or formal
writing, is nevertheless valid and binding, for even a verbal contract of sale or real estate; produces
legal effects between the parties. Consequently, when there is a defect in the notarization of a
document, the clear and convincing evidentiary standard originally attached to a duly-notarized
document is dispensed with, and the measure to test the validity of such document is preponderance
of evidence.15 x x x Nevertheless, the defective notarization of the deed does not affect the validity of
the sale of the house. Although Article 1358 of the Civil Code states that the sale of real property must
appear in a public instrument, the formalities required by this article is not essential for the validity of
the contract but is simply for its greater efficacy or convenience, or to bind third persons, and is
merely a coercive means granted to the

contracting parties to enab1e them to reciprocally compel the observance of the prescribed form.
Consequently, the private conveyance of the house is valid between the parties. As far as the lower
courts are concen1ed, the three requirements of cause, object, and consideration concurred. This
Court is left with no option but to respect the lower courts' findings, for its jurisdiction in a petition for
review on certiorari is limited to reviewing only errors of law since it is not a trier of facts. This is
especially so in view of the identical conclusions affirmed at by them. Indeed, petitioner and her
husband conceded that there was such a deed of sale, but only that they were induced to sign it
without being given the opportunity to read its contents -believing that the document they were
signing was a mere authorization to obtain a bank loan. According to petitioner, the document was
"folded" when she affixed her signature thereon; on the other hand, her husband added that at the
time he signed the same, it was "dark". These circumstances, however, did not prevent them from
discovering the true nature of the document; being high school graduates and thus literate, they were
not completely precluded from reading the contents thereof, as they should have done if they were
prudent enough, Petitioner's excuses are therefore flimsy and specious.

SWEDISH MATCH v. CA, GR No. 128120, 2004-10-20

Facts:

Swedish Match, AB (hereinafter SMAB) is a corporation organized under the laws of Sweden not doing
business in the Philippines. SMAB, however, had three subsidiary corporations in the Philippines, all
organized under Philippine laws, to wit: Phimco Industries, Inc. (Phimco),... Provident Tree Farms, Inc.,
and OTT/Louie (Phils.), Inc.
Sometime in 1988, STORA, the then parent company of SMAB, decided to sell SMAB of Sweden and
the latter's worldwide match, lighter and shaving products operation to Eemland Management
Services, now known as Swedish Match NV of Netherlands, (SMNV), a corporation organized and...
existing under the laws of Netherlands. STORA, however, retained for itself the packaging business.

SMNV initiated steps to sell the worldwide match and lighter businesses while retaining for itself the
shaving business. SMNV adopted a two-pronged strategy, the first being to sell its shares in Phimco
Industries, Inc. and a match company in Brazil, which proposed sale would... stave-off defaults in the
loan covenants of SMNV with its syndicate of lenders. The other move was to sell at once or in one
package all the SMNV companies worldwide which were engaged in match and lighter operations
thru a global deal (hereinafter, global deal).

Ed Enriquez (Enriquez), Vice-President of Swedish Match Sociedad Anonimas (SMSA) the

management company of the Swedish Match group was commissioned and granted full powers to
negotiate by SMNV, with the resulting transaction, however, made subject to final approval by the
board.

Enriquez was held under strict instructions that the sale of Phimco shares should be executed on or
before 30 June 1990, in view of the tight loan covenants of SMNV. Enriquez came to the Philippines in
November 1989 and informed the Philippine financial and business circles that... the Phimco shares
were for sale.

Several interested parties tendered offers to acquire the Phimco shares, among whom were the AFP
Retirement and Separation Benefits System, herein respondent ALS Management & Development
Corporation and respondent Antonio Litonjua (Litonjua), the president and general... manager of ALS.

Litonjua submitted to SMAB a firm offer to buy all of the latter's shares in Phimco and all of Phimco's
shares in Provident Tree Farm, Inc. and OTT/Louie (Phils.), Inc. for the sum of P750,000,000.00.[5]

Through its Chief Executive Officer, Massimo Rossi (Rossi), SMAB, in its letter dated 1 December 1989,
thanked respondents for their interest in the Phimco shares. Rossi informed respondents that their
price offer was below their expectations but urged them to undertake a... comprehensive review and
analysis of the value and profit potentials of the Phimco shares, with the assurance that respondents
would enjoy a certain priority although several parties had indicated their interest to buy the shares.
[6]

Litonjua offered to buy the disputed shares, excluding the lighter division for US$30.6 million, which
per... another letter of the same date was increased to US$36 million.

Responding to Litonjua's offer, Rossi sent his letter dated 11 June 1990, informing the former that ALS
should undertake a due diligence process or pre-acquisition audit and review of the draft contract for
the Match and Forestry activities of Phimco at ALS' convenience.

Rossi informed Litonjua that on 2 July 1990, they signed a conditional contract with a local group for
the disposal of Phimco. He told Litonjua that his bid would no longer be considered unless the local
group would fail to consummate the... transaction on or before 15 September199

Respondents added that SMAB's refusal to consummate... the perfected sale of the Phimco shares
amounted to an abuse of right and constituted conduct which is contrary to law, morals, good
customs and public policy.[18]

Respondents prayed that petitioners be enjoined from selling or transferring the Phimco shares, or
otherwise implementing the sale or transfer thereof, in favor of any person or entity other than
respondents, and that any such sale to third parties be annulled and set aside.

Respondents also asked that petitioners be ordered to execute all documents or instruments and
perform all acts necessary to consummate the sales agreement in their favor.
Traversing the complaint, petitioners alleged that respondents have no cause of action, contending
that no perfected contract, whether verbal or written, existed between them. Petitioners added that
respondents' cause of action, if any, was barred by the Statute of Frauds since... there was no written
instrument or document evidencing the alleged sale of the Phimco shares to respondents.

Petitioners filed a motion for a preliminary hearing of their defense of bar by the Statute of Frauds,
which the trial court granted. Both parties agreed to adopt as their evidence in support of or against
the motion to dismiss, as the case may be, the evidence which they... adduced in support of their
respective positions on the writ of preliminary injunction incident.

It ruled that there was no perfected contract of sale between petitioners and respondents. The court
a quo said that the letter dated 11 June 1990, relied upon by... respondents, showed that petitioners
did not accept the bid offer of respondents as the letter was a mere invitation for respondents to
conduct a due diligence process or pre-acquisition audit of Phimco's match and forestry operations to
enable them to submit their final offer... on 30 June 1990.

Issues:

THE TRIAL COURT EXCEEDED ITS AUTHORITY AND JURISDICTION WHEN IT ERRED PROCEDURALLY IN
MOTU PROPIO (sic) DISMISSING THE COMPLAINT IN ITS ENTIRETY FOR "LACK OF A VALID CAUSE OF
ACTION" WITHOUT THE BENEFIT OF A FULL-BLOWN TRIAL AND ON THE MERE MOTION TO DISMISS.

Ruling:

After assessing the respective arguments of the parties, the Court of Appeals reversed the trial court's
decision. It ruled that the series of written communications between petitioners and respondents
collectively constitute a sufficient memorandum of their agreement under

Article 1403 of the Civil Code; thus, respondents' complaint should not have been dismissed on the
ground that it was unenforceable under the Statute of Frauds.

The appellate court opined that any document or writing, whether formal or informal, written either
for the purpose of... furnishing evidence of the contract or for another purpose which satisfies all the
Statute's requirements as to contents and signature would be sufficient; and, that two or more
writings properly connected could be considered together. The appellate court concluded that the...
letters exchanged by and between the parties, taken together, were sufficient to establish that an
agreement to sell the disputed shares to respondents was reached.

The Court of Appeals clarified, however, that by reversing the appealed decision it was not thereby
declaring that respondents are entitled to the reliefs prayed for in their complaint, but only that the
case should not have been dismissed on the ground of unenforceability under... the Statute of Frauds.
It ordered the remand of the case to the trial court for further proceedings.

Petitioners argue that the Court of Appeals erred in failing to consider that the Statute of Frauds
requires not just the existence of any note or memorandum but that such note or memorandum
should evidence an agreement to sell; and, that in this case, there was no word, phrase,... or
statement in the letters exchanged between the two parties to show or even imply that an agreement
had been reached for the sale of the shares to respondent.

Petitioners stress that respondent Litonjua made it clear in his letters that the quoted prices were
merely tentative and still subject to further negotiations between him and the seller. They point out
that there was no meeting of the minds on the essential terms and conditions... of the sale because
SMAB did not accept respondents' offer that consideration would be paid in Philippine pesos.

Court of Appeals correctly ruled that the Statute of Frauds does not apply to the instant case.
The basic issues to be resolved are: (1) whether the appellate court erred in reversing the trial court's
decision dismissing the complaint for being unenforceable under the Statute of Frauds; and (2)
whether there was a perfected contract of sale between petitioners and... respondents with respect
to the Phimco shares.

The Statute of Frauds embodied in Article 1403, paragraph (2), of the Civil Code[22] requires certain
contracts enumerated therein to be evidenced by some note or memorandum in order to be
enforceable. The term "Statute of Frauds" is descriptive of statutes... which require certain classes of
contracts to be in writing. The Statute does not deprive the parties of the right to contract with
respect to the matters therein involved, but merely regulates the formalities of the contract necessary
to render it enforceable.[23] Evidence of the agreement cannot be received without the writing or a
secondary evidence of its contents.

The Statute, however, simply provides the method by which the contracts enumerated therein may
be proved but does not declare them invalid because they are not reduced to writing. By law,
contracts are obligatory in whatever form they may have been entered into, provided all the...
essential requisites for their validity are present. However, when the law requires that a contract be
in some form in order that it may be valid or enforceable, or that a contract be proved in a certain
way, that requirement is absolute and indispensable.

However, for a note or memorandum to satisfy the Statute, it must be complete in itself and cannot
rest partly in writing and partly in parol. The note or memorandum must contain the names of the
parties, the terms and conditions of the contract, and a description of the... property sufficient to
render it capable of identification.[28] Such note or memorandum must contain the essential
elements of the contract expressed with certainty that may be ascertained from the note or
memorandum itself, or some other writing to which... it refers or within which it is connected,
without resorting to parol evidence.[29]

Contrary to the Court of Appeals' conclusion, the exchange of correspondence between the parties
hardly constitutes the note or memorandum within the context of Article 1403 of the Civil Code.

Evidently, the trial court's dismissal of the complaint on the ground of unenforceability under the
Statute of Frauds is warranted.

Quite obviously, Litonjua's letter dated 21 May 1990, proposing the acquisition of the Phimco shares
for US$36 million was merely an offer. This offer, however, in Litonjua's own words, "is understood to
be subject to adjustment on the basis of an audit of the assets,... liabilities and net worth of Phimco
and its subsidiaries and on the final negotiation between ourselves."

Was the offer certain enough to satisfy the requirements of the Statute of Frauds? Definitely not.

At any rate, from the procedural stand point, the continuing objections raised by petitioners to the
admission of parol evidence[50] on the alleged verbal acceptance of the offer rendered any evidence
of acceptance inadmissible.

A close examination of the complaint reveals that it alleges two distinct causes of action, the first is
for specific performance[53] premised on the existence of the contract of sale, while the other is
solely for damages, predicated on the purported... dilatory maneuvers executed by the Phimco
management.[5

Heirs of Alido v. Campano G.R. No. 226065, July 29, 2019 2nd Division REYES, J. JR., J.

Facts: Soledad Alido is the registered owner of a parcel of land in Alimondian, Iloilo was able to
register it under her name. Campano took possession of the land and the owner’s duplicate OCT, and
paid its realty taxes, pursuant to an alleged sale. When Alino died, her heirs namely, Reynaldo,
Maggie, and Rodrigo, executed a Deed of Adjudication of the property and sought to register the
property in their names. As such, they needed to retrieve OCT No. F-16558, but Campano refused to
do so. Thus, they were constrained to filed a verified petition for Campano to surrender the owner’s
duplicate of the title. Heirs of Alido, believe that Campano cannot defeat their claim of ownership
because it is supported by a certificate of title issued in the name of their predecessor. On the other
hand, Campano claims ownership over the property by virtue of an oral sale between her and Alido

Issue: Whether contracts of sale of real property without its term being reduced in writing are void or
invalid.

Ruling: No. It is a settled rule that the failure to observe the proper form prescribed by Article 1358
does not render the acts or contracts enumerated therein invalid. It has been uniformly held that the
form required under the said Article is not essential to the validity or enforceability of the transaction,
but merely for convenience. The Court agrees with the CA in holding that a sale of real property,
though not consigned in a public instrument or formal writing, is, nevertheless, valid and binding
among the parties, for the time-honored rule is that even a verbal contract of sale of real estate
produces legal effects between the parties. Stated differently, although a conveyance of land is not
made in a public document, it does not affect the validity of such conveyance. Article 1358 does not
require the accomplishment of the acts or contracts in a public instrument in order to validate the act
or contract but only to insure its efficacy. However, since the sale of a parcel of land is in violation of
the five-year prohibition on the alienation of land acquired via a free patent application, it is void and
produces no legal effect. As successors-ininterest of Alido, their right to challenge the sale between
Alido and Campano cannot be barred by laches as it was in violation of the restriction on the sale of
land acquired through free patent. Consequently, the heirs of Alido may recover the parcel of land
Alido had sold to Campano. However, as a result of the annulment of the sale between Alido and
Campano, the latter may claim the purchase price and interest.

Berg vs. Magdalena Estate G.R. No. L-3784

October 17, 1952

BAUTISTA ANGELO, J.: FACTS: The plaintiff and defendant are co-owners of said property, the former
being the owner of one-third interest and the latter of the remaining two-thirds. The division is asked
because plaintiff and defendant are unable to agree upon the management of the property and upon
the partition thereof. Defendant it sold to plaintiff one-third of the property in litigation subject to the
express condition that should either vendor or vendee decide to sell his or its undivided share, the
party selling would grant to the other part first an irrevocable option to purchase the same at the
seller's price. Plaintiff fixed the sum of P200,000 as the price of said share and offered to sell it to
defendant, which offer was accepted, and for the payment of said price plaintiff gave defendant a
period of time which, including the extensions granted. Defendant claims that, in spite of the
acceptance of the offer, plaintiff refused to accept the payment of the price, and for this refusal
defendant suffered damages in the amount of P100,000. For these reasons, defendant asks for
specific performance. Plaintiff claims that the transaction relative to the property in litigation is not
supported by any note or memorandum subscribed by the parties, as in fact no such note or
memorandum has been made evidencing the transaction, for which reason, plaintiff claims, this
transaction falls under the statute of frauds and cannot form the basis of the special defense invoked
by the defendant.

ISSUE: Whether an agreement to sell has actually been reached between plaintiff and defendant of
the share of the former in the property in litigation for the sum of P200,000.

HELD: YES. We are of the opinion that the applications marked exhibits "3" and "4", whether
considered separately or jointly, satisfy all the requirements of the statute as to contents and
signature and, as such, they constitute sufficient proof to evidence the agreement in question. And
we say so because in both applications all the requirements of a contract are present, namely, the
parties, the price or consideration, and the subject-matter. In the application exhibit "3",

Jerome C. Aviso
Ernest Berg appears as the seller and the Magdalena Estate Inc. as the purchaser, the former's
interest in the Crystal Arcade as the subjectmatter, and the sum of P200,000 as the consideration.

Jerome C. Aviso

H. R. No. L-51058 January 27, 1992

I.
J. ASIA PRODUCTION CO., INC., WANG TA PENG and WINSTON WANG, petitioners, vs. HON.
ERNANI CRUZ PAñO, as Judge of the Court of First Instance of Rizal (Quezon City, Branch XVIII), LOLITA
LEE LE HUA and ALBERTO DY, respondents.
K.
L. Facts: 1. Lolita Lee Le Hua and Alberto Dy, the private respondents in this case, claimed to be the
owners of a building constructed on a lot leased from Lucio San Andres. 2. They offered to sell the
building to petitioners Asia Production Company, Wang Ta Peng and Winston Wang. 3. Asia Prod et al.
agreed because of the former’s assurance that they will also assign to them the contract of lease over
the land. 4. However, the agreement and promise were not reduced to writing. 5. Relying on the good
faith of Hua and Dy, Asia Prod et al. constructed a weaving factory on the leased lot. 6. Unfortunately,
Hua and Dy, failed to comply with their undertaking to execute the deed to sale and to assign the
contract despite the fact that they were able to encash the checks Asia Prod paid. 7. Worse, the lot
owner made it plain to Asia Prod that he was unwilling to give consent to the assignment of the lease
unless they agreed to certain onerous terms, such as an increase in rental, or the purchase of the land
at a very unconscionable price. 8. Asia Prod et al thus, compelled to request for a stop payment order
of the remaining checks. 9. Succeeding negotiations to save the transaction proved futile by reason of
the continued failure of Hua and Dy to execute the deed of sale of the building and the deed of
assignment of the contract of lease. 10. Asia Prod then, removed all their property, machinery and
equipment from the building, vacated the same and returned its possession to Hua and Dy. 11. Asia
Prod et al. then demanded from Hua and Dy the return of their partial payment for the purchase price
of the building. But Hua and Dy refused to return it. 12. Hence, Asia Prod filed a complaint against Hua
and Dy before the CFI of Quezon City. 13. Alberto Dy averred that the claim on which the action is
based — an alleged purchase of a building which is not evidenced by any writing — cannot be proved
by parol evidence since Article 1356 in relation to Article 1358 of the Civil Code requires that it should
be in writing. 14. But according to Asia Prod et al, their complaint is essentially for collection of a sum
of money and not to enforce the sale but to compel Hua and Dy to refund the sum of money which
was paid to them as purchase price in a sale which did not materialize by reason of their bad faith. 15.
Judge Paño of the CFI Quezon city dismissed the complaint on the ground that it is barred by the
Statute of Frauds.

Issue: Whether or not an action for the refund of partial payments made by Asia Prod is barred by the
Statute of Frauds.

Ruling: No. Judge Paño committed grave abuse of discretion in dismissing the complaint on the
ground that the claim is barred by the Statute of Frauds. •

SC explained that the purpose of the statute is to prevent fraud and perjury in the enforcement of
obligations depending for their evidence on the unassisted memory of witnesses by requiring certain
enumerated contracts and transactions to be evidenced by a writing signed by the party to be
charged.

It was not designed to further or perpetuate fraud. As explicitly provided for in paragraph (2), Article
1403 of the Civil Code, the contracts concerned are simply "unenforceable" and the requirement that
they — or some note or memorandum thereof — be in writing refers only to the manner they are to
be proved.

It goes without saying then that the statute will apply only to executory rather than executed
contracts. Partial execution is even enough to bar the application of the statute.
Now, the present case is not for specific performance of the agreement to sell the building and to
assign the leasehold right.

Asia Prod et al. merely seek to recover their partial payment for the agreed purchase price of the
building.

The action is definitely not one for specific performance, hence the Statute of Frauds does not apply.
And even if it were for specific performance, partial execution thereof by Asia Prod effectively bars
Hua and Dy from invoking it.

Since it is for refund of what Asia Prod had paid under the agreement, originally unenforceable under
the statute, because they had withdrawn from it due to the "bad faith" on the part of Hua and Dy, the
latter cannot be allowed to take shelter under the statute and keep the money for themselves.

If this were the case, the statute would only become a shield for fraud, allowing Hua and Dy not only
to escape performance of their obligations, but also to keep what they had received from Asia prod,
thereby unjustly enriching themselves.

SC opined that the Statute of Frauds is applicable only to executory contracts, not to contracts that
are totally or partially performed.