Averia v. Averia
REITERATIONFacts
The Antecedents: Macaria Francisco and Marcos Averia had six children. After Marcos' death, Macaria married Roberto Romero, who died in 1968, leaving three adjoining residential lots. In an Extrajudicial Partition, Macaria was apportioned a house and lot at 725 Extremadura Street, Sampaloc, Manila, covered by TCT No. 93310. Macaria filed an action for annulment of title due to fraud, which eventually led to her being awarded an additional 30 square meters. Macaria lived with her son Gregorio and daughter Teresa's families until her death in 1983. In 1989, Macaria's children Domingo, Angel, and Felipe, along with the widow of their deceased son Felimon, filed a complaint for judicial partition of the Extremadura property against Gregorio and Teresa's representative, Sylvanna Vergara. Procedural History: Gregorio and Sylvanna countered that Gregorio and his late wife defrayed litigation expenses for Civil Case No. 79955 and cared for Macaria. They claimed Macaria verbally sold one-half (1/2) of the Extremadura property to them in consideration of these expenses and care. They also asserted that Domingo sold his one-sixth (1/6) share of the remaining half to Gregorio and his wife. The RTC ruled in favor of Gregorio and Sylvanna, declaring Gregorio as the owner of 1/2 of the property and Domingo's 1/6 share of the remaining half as sold to Gregorio. The RTC ordered the partition of the remaining 5/6 of 1/2 of the property. On appeal, the Court of Appeals reversed the RTC decision, holding that the alleged verbal sales were unenforceable under the Statute of Frauds as they were not in writing and that parol evidence was inadmissible as timely objected to. The CA remanded the case for partition. The Petition: Petitioners Gregorio and Sylvanna sought review, arguing that the CA erred in applying the Statute of Frauds to partially or completely executed contracts and in disregarding parol evidence to which no timely objection was made. They contended that the contracts were ratified under Article 1405 of the Civil Code.
Issue(s)
Whether the Court of Appeals erred in applying the Statute of Frauds to the alleged verbal sale of real property and the sale of an interest therein. Whether the alleged verbal contracts were ratified by the failure to object to the presentation of parol evidence. Whether the alleged verbal contracts were partially or totally performed, thus making the Statute of Frauds inapplicable.
Ruling
The petition is granted. The decision of the Court of Appeals is set aside, and the case is remanded to the trial court for appropriate action. The Supreme Court found that the Statute of Frauds applies only to executory contracts and not to those partially or totally performed. It also held that contracts infringing the Statute of Frauds are ratified by the failure to object to the presentation of oral evidence, making them enforceable. The Court found that the petitioners' witnesses' testimonies were not objected to by the respondents, thus ratifying the verbal contracts and making them enforceable.
Ratio Decidendi
On the applicability of the Statute of Frauds and the admissibility of parol evidence: The Supreme Court held that the Court of Appeals erred in reversing the trial court's decision based on the Statute of Frauds. The Court clarified that the Statute of Frauds, as provided in Article 1403(2)(e) of the Civil Code, applies only to executory contracts for the sale of real property or an interest therein. In this case, the petitioners claimed that the contracts were either partially or totally performed, which would render the Statute of Frauds inapplicable. Furthermore, the Court found that the testimonies of the petitioners' witnesses regarding the verbal sale by Macaria and the sale by Domingo were not objected to by the respondents. This failure to object, according to Article 1405 of the Civil Code, constitutes ratification of contracts that infringe the Statute of Frauds, making them enforceable. The Court emphasized that oral evidence may be received to prove partial or total performance of such contracts. On the ratification of contracts infringing the Statute of Frauds: The Supreme Court ruled that the alleged verbal contracts were ratified by the respondents' failure to object to the presentation of parol evidence. The Court meticulously examined the records and found that, except for the testimony of petitioner Gregorio himself concerning the verbal sale by Macaria, the testimonies of other witnesses for the petitioners regarding the sale by Macaria and the sale by Domingo were not objected to by the respondents. Citing Article 1405 of the Civil Code, the Court stated that such failure to object amounts to ratification, making the otherwise unenforceable contracts valid and enforceable. This ratification effectively removed the barrier posed by the Statute of Frauds. On the nature of executed contracts and proof of performance: The Supreme Court reiterated the principle that the Statute of Frauds does not apply to contracts that are either partially or totally performed. The Court noted that the petitioners claimed total performance, with full payment made and Gregorio continuing to occupy the property even after Macaria's death and the filing of the complaint. The Court cited legal commentary stating that while partial performance must be duly proved, it can be proven by either documentary or oral evidence. The testimonies presented by the petitioners were deemed credible and sufficient to establish the performance of the alleged verbal contracts, thereby removing them from the purview of the Statute of Frauds.
Main Doctrine
Contracts infringing the Statute of Frauds are ratified by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefits under them, rendering them enforceable. The Statute of Frauds applies only to executory contracts, not to those which are partially or totally performed, and such performance may be proven by oral evidence.