Dear PAO,
My parents (both deceased) bought a land from Spouses D (also deceased). The sale was oral. After paying in full, my parents immediately occupied the land for 30 years and introduced structural improvements. The heirs of Spouses D visited the property last month and claimed that they owned the same because they inherited it from their parents. We told them that our parents bought the land from their parents but they claimed that the said oral sale of land is invalid since the same was not in writing. Are they correct?
Banthur
Dear Banthur,
A contract transferring ownership of a land should be made in a public document in consonance with Article 1358 of the New Civil Code of the Philippines which provides that:
“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; xxx”
Thus, if a contract transferring ownership of a land is not in the form of a public document, it becomes unenforceable following Article 1403
(2) (e) of the same Code which states that “an agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein” violates the Statute of Frauds and is unenforceable, unless ratified.
Nonetheless, being unenforceable does not mean that the contract is void and without effect. In the case of Estate of Spouses Bueno vs. Estate of Peralta, G.R. No. 205810, September 09, 2020, the Supreme Court, through Associate Justice Rodil V. Zalameda, stated that:
“The Statute [of Fraud], 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. xxx
“Further, the Statute of Frauds is limited to executory contracts where there is a wide field for fraud as there is no palpable evidence of the intention of the contracting parties. It has no application to executed contracts because the exclusion of parol evidence 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. xxx” (Emphasis ours)
Applying the above-quoted decision to your situation, the oral sale of land between your parents and Sps. D is valid. Rather, the lack of written contract would only render such agreement as unenforceable in court for failure to comply with the statute of frauds. However, considering that the sale is already consummated and executed, through full payment of the consideration and delivery of the property to your parents, the Statute of Fraud no longer applies. Thus, you may establish the contract by presenting evidence of its execution.
We hope that we were able to answer your queries. This advice is solely based on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Thank you for your continued trust and support.
