3Repubhc of tbe ~bilippines

$>upreme (!Court
~anila

THIRD DIVISION

THE HEIRS OF ANSELMA G .R. No. 230573

GODINES, namely: MARLON,
FRANCISCO, ROQUE, ROSA
AND ALMA, all surnamed Present:
*
GODINES,
Petitioners, LEONEN, J,
Chairperson,
HERNANDO,
INTING,
- versus - DELOS SANTOS, and
LOPEZ, J. Y., JJ

PLATON DEMAYMAY and Promulgated:

MATILDE DEMAYMAY,
Respondents. June 28, 2021

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

HERNANDO, J.:

This is a Petition for Review on Certiorari 1 seeking the reversal of the

August 16, 2016 Decision 2 and the March 8, 2017 Resolution 3 of the Comi of
Appeals (CA) in CA-G.R. SP No. 133147.

* Spelled as Godinez in some pa11s of the records.

1
Rollo, 22-34.
Id. at 229-239; penned by Associate Justice Francisco P. Acosta and concurred in by Associate Justices
Noel G. Tijam (now a retired Member of this Court) and Eduardo B. Peralta, Jr.
Id. at 252-253.
Decision 2 GR. No. 230573

Factual antecedents:

Petitioners Marlon, Francisco, Roque, Rosa, and Alma, all surnamed

Godines, claim to be the forced heirs of Anselma Yuson Godines (Anselma)
who died on August 11, 1968 leaving a parcel of residential lot more
particularly described as follows:

A parcel of residential lot located at Divisoria, Cawayan, Masbate,

bounded on the North by Crisanta Yuson; on the East by Emilio Gudayawan;
on the South Bagtic Street; and on the West by Pio Gudayawan; containing an
area of 68 square meters, more or less; and declared for taxation purposes in the
name of Anselma Yuson under Tax Declaration No. 6111 with an assessed
value of P330.00. 4

However, respondent spouses Platon and Matilde (Matilde; collectively,

spouses Demaymay or respondents) are in possession of the land in question5
considering that during her lifetime, Anselma obtained a loan from Matilde
and in consideration thereof, the spouses Demaymay were allowed to use the
land6 for a period of 15 years. However, this agreement was not reduced into
writing.7

Sometime in August 1987, petitioners went to the Office of the

Provincial Assessor of Mas bate to inquire about the status of the lease contract
between Anselma and the spouses Demaymay. 8 Petitioners then found out that
Tax Declaration No. 6111 in the name of Anselma was cancelled and Tax
Declaration No. 7194 was issued under the name of Matilde by virtue of a
Deed of Confirmation of Sale supposedly executed by petitioner Alma in
1970. 9

Moreover, it was found out after an actual survey that the area of sixty-
eight ( 68) square meters indicated in Tax Declaration No. 6111 was not the
correct and true area of the land in question; the correct area thereof was three
hundred thirty-two (332) square meters which appears in Tax Declaration No.
7164 in the name of Matilde. 10

Given this, petitioners filed a Complaint for Recovery of Ownership and

Possession and Declaration of the Deed of Confinnation as Null and Void
with Damages against the spouses Demaymay before the Regional Trial Court
(RTC) of Catalingan, Masbate, Branch 49. 11

4 Id. at 13. Gudayawan also s pe lled as Guidayawan in some pa1ts of the records.
Id. at 2 30.
6
Id.
7
Id.
8
Id.at 108.
9
Id. at 230.
io Id.
11
Id. at72.
Decision 3 G.R. No. 2305 73

In their Complaint, petitioners argued that it was impossible for Alma to

execute the Deed of Confirmation of Sale because she was in Bogo, Cebu
from 1969 to 1975, and that she was only fourteen (14) years old when the
alleged Deed of Confirmation of Sale was executed as she was born in 1956. 12
Petitioners also claimed that in obtaining the said Deed, the spouses
Demaymay acted in bad faith, fraudulently and illegally, prejudicial to the
rights and interests of the petitioners causing them to suffer mental t01iure,
wounded feelings and social humiliation. 13

On the other hand, the spouses Demaymay in their Answer denied

petitioners' allegations and argued that there was no cause of action; that such
action, if any, had already prescribed. 14 They further claimed that they were
the absolute owners and actual possessors of the subject land which they
acquired through sale. They also averred that Alma was estopped from
questioning the documents conveying the land in question, as she was the one
who received the last installment for the land and voluntarily executed the
confirmation due to the untimely demise of her parents. 15

Before the pre-trial , specifically on January 30, 1995, the RTC ordered
the transfer of the case to the Municipal Circuit Trial Court (MCTC) in Placer,
Mas bate, considering the assessed value of the subject property was less than
?20,000.00. 16

The MCTC took cognizance of the case and during the course of the
proceedings, petitioners presented their evidence ex parte as the spouses
Demaymay were declared in default. 17 However, instead of deciding the case
based on its merit, the MCTC in its September 18, 2008 judgment dismissed it
on the ground that the cause of action was annulment of the Deed of
Confirmation of Sale over which the RTC had jurisdiction. 18

On appeal, the RTC reversed the said MCTC judgment and once again
remanded the case to . the MCTC for disposition.19 During the proceedings
before the MCTC, the spouses Demaymay filed a Motion to Dismiss but were
denied by the MCTC in an Order dated May 3, 2011. 20

On May 31, 2011, the MCTC rendered a Decision, the dispositive

po1iion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs,

declaring:

12
Id. at 73.
13
Id. at 73-74.
14
Id. at 77-79.
1s Id.
16
Id. at 230.
11 Id.
1s Id.
19
Id. at 23 1.
20
Id. at 83.
Decision 4 GR. No. 230573

l. Plaintiffs and her brothers and sisters, as heirs of Anselma Godines,

are hereby declared owners of the disputed property;

2. Ordering the cancellation of Tax Declaration No. 7194 in the name of

Matilde Ramirez Dimaymay and its subsequent revision in the name of Platon
Dimaymay under Tax Declaration No. 002715;

3. Ordering Defendants to pay the Plaintiffs the sum of TWENTY

THOUSAND (P20,000.00) PESOS, as litigation expenses;

4. Defendants are directed to VACATE the disputed property upon the

finality of this Decision;

5. No Cost.

SO ORDERED. 2 1

Aggrieved, the spouses Demaymay filed a Motion for Reconsideration

with the MCTC but were denied. 22 Thus, they filed an appeal with the RTC,
arguing that the MCTC erred in not dismissing the complaint for lack of
jurisdiction and laches. 23

The R TC did not decide the case on the merits and instead issued an
Order24 on January 31 , 2012, the dispositive portion of which reads:

WHEREFORE AND IN VIEW OF THE FOREGOING

CONSIDERATIONS, the herein appeal is denied due course, and this case is
hereby remanded to the MCTC, Placer for further hearing and reception of
evidence from the parties.

SO ORDERED. 25

Accordingly, the MCTC conducted further proceedings wherein the

spouses Demaymay's daughter, Nida Demaymay Pepito (Nida), testified that
Anselma indeed sold the subject property to the spouses Demaymay for
Pl ,460.00 in January 1967.26 Nida claimed that she was present when her
parents gave the initial payment of Pl ,010.00, but no contract of sale was
executed since Anselma was about to give birth at that time.27

However, Anselma and her husband, Pedro, died before any contract of
sale was executed. 28 This is why it was Alma and Anselma' s uncle, Emilio
Gudayawan, who executed a receipt for the initial amount of Pl ,010.00
worded in the local vernacular as follows: "Resibo Sa Kwarta Nga Gibayad Sa

~
1
Id. at 95-96; penned by Presiding Judge Dioscoro V. Conag.
22 Id. at 23 I.
23 Id .
24 Id. at I 08- 11 2; penned by Executive Judge Domingo B . Maristela, .Jr.
25
Id. at 11 2.
26
Id. at 23 1-232; see also CA rollo. p. 7 1.
21 Id. .
2s Id.

7v
Decision 5 G.R. No. 230573

Yuta Sa Kantidad Na Phpl,460.00 nga bili sa Yuta." 29 The subject Deed of

Confirmation of Sale was then allegedly executed by Alma on October 12,
1970 upon full payment of the purchase price, and hence the property was tax-
declared under Matilde's name. 30

Ruling of the Municipal Circuit

Trial Court:

A Judgment31 in favor of petitioners was rendered by the MCTC on June

19, 2013, to wit:

WHEREFORE, premises considered, judgment is hereby rendered in

favour of the plaintiffs, and against the defendants. Accordingly, the plaintiffs,
as heirs of Anselma Yuson Godines, are hereby declared the owners of the
property in question thus, legally entitled to its possession. The Confirmation of
Sale of Real Property is hereby declared null and void. The tax declaration
issued in the name of Matilde Ramirez Demaymay over the subject property is
likewise annulled and cancelled/set aside.

SO ORDERED. 32

Ruling of the Regional Trial

Court:

Given the adverse decision, the spouses Demaymay again filed an appeal
with the RTC. 33 On November 18, 2013, the RTC dismissed34 the appeal for
lack of merit, to wit:

WHEREFORE, the instant appeal is hereby dismissed for lack of merit.

Finding no reversible error, the assailed decision dated June I 9, 2013 is hereby
affirmed with modification. The defendants including those who derive title
from them are also hereby directed to vacate the land in question and restore
possession thereof to the plaintiffs.

SO ORDERED. 35

Ruling of the Court of Appeals:

Aggrieved, the spouses Demaymay filed a petition for review under Rule
42 of the Rules of Court with the CA. 36 On August 16, 20 I 6, the CA issued a
Decision37 granting the spouses Demaymay' s petition and reversing the
judgment of the lower court, the dispositive portion of which reads:

29 Id.
30
Id. at 232.
31 Id. at 11 3-1 20, penned by Judge Mary F!or D. Tabigue-Logaiia.
32 Id. at 120.
13
· Id. at 122.
34 Id. at 67-71 ; penned by Presiding Judge Arturo C lemente B. Revi l.
35
Id. at 71.
36
Id. at 17.
37
Id. at 229-239.
Decision 6 GR. No. 230573

WHEREFORE, the petition is GRANTED. The appealed Decision dated

November 18, 2013 of the Regional Trial Court affirming the Judgment dated
June 19, 20 13 of the 4 th Municipal Circuit Trial Comi is REVERSED and SET
ASIDE. Accordingly, the Spouses Platon and Matilde Demaymay are
recognized to be the owners of the subject property entitled to possession
thereof. Upon finality of this Decision, the heirs of Anselma Godines are
ORDERED to execute a Deed of Absolute Sale for the transfer of the subject
property to the name of the Spouses Demaymay.

SO ORDERED. 38

On September 19, 2016, the pet1t1oners filed a Motion for

Reconsideration39 which was denied by the appellate court in its Resolution
dated March 8, 2017 .40

Hence, the instant petition.

Issue

Whether the CA gravely erred in ruling that the heirs of Anselma are
bound by the oral contract of sale allegedly executed in favor of the spouses
Demaymay. 41

Our Ruling

We deny the instant petition.

Preliminarily, it must be emphasized that the main issue at hand is the

validity of the oral sale between Anselma and the spouses Demaymay, and not
the validity of the Deed of Confirmation of Sale, which merely documents the
sale that supposedly happened. V,/e agree with the CA's observation that the
lower courts were fixated on the validity and due execution of the Deed of
Confirmation of Sale, despite the primary issue being the validity of the sale
itself, which was claimed to be an oral or verbal sale. Keeping this in mind,
we proceed with our discussion on whether or not the purported oral sale was
indeed valid.

Our jurisdiction has long recognized the validity of oral contracts,

including oral contracts of sale. Article 1305 of the Civil Code provides the
following definition of a contract:

Article 1305. A contract is a meeting of minds between two persons

whereby one binds himself, with respect to the other, to give something or to
render some service.

38 Id. at 239.
39
Id. at 240-250.
40
Id. at 252-253.
41
Id. at 20.
Decision 7 G.R. No. 230573

Pertinently, Article 1356 of the Civil Code provides:

Article 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.
(Underscoring supplied)

Indeed, contracts that have all the essential requisites for their validity are
obligatory regardless of the form they are entered into, except when the law
requires that a contract be in some form to be valid or enforceable. 42 Article
1358 of the Civil Code provides that the following must appear in a public
instrument: 43

1. Acts and contracts which have for their object the creation,
transmission, modification or extinguishment of real rights over immovable
prope11y; sales of real property or of an interest therein are governed by articles
1403. No. 2. and 1405;

2. The cession, repudiation or renunciation of hereditary rights or of

those of the conjugal partnership of gains;

3. The power to administer property, or any other power which has for its
object an act appearing or which should appear in a public document, or should
prejudice a third person;

4. The cession of actions or rights proceeding from an act appearing in a

public document. (Underscoring supplied)

Article 1403(2) of the Civil Code, otherwise known as the Statute of

Frauds, requires that covered transactions must -be red!Jced into writing;
otherwise, the same would be unenforceable by action.44 In other words, a
sale of real property must be evidenced by a written document as
an oral sale of immovable property is unenforceable. 45

However, this does not necessarily mean that oral contracts of sale of real
property are void or invalid. 46 We have held in the case of The Estate of Pedro
C. Gonzales v. The Heirs of A1arcos Perez47 that failure to observe the
prescribed form of contracts does not invalidate the transaction, to wit:

Nonetheless, 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 validi..!:y__Qr_ enforceability of the transaction, but

42 Heirs ofSoledad A lido v. Campana G.R. No. 226065, Jul y 29, 20 I 9.

43 Id.
44 Id.
45 Id.
46 Id.
47
620 Phil. 47 (2009).
Decision 8 G.R. No. 230573

merelv 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.48 (Underscoring supplied)

Further, as we have also reiterated in Heirs of Soledad Alida v.

Campana, 49 the Statute of Frauds applies only to executory contracts and not
to those which have been executed either fully or partially. 50 In Swedish
Match, AB v. Court of Appeals, 5 1 the Court explained why certain contracts
must be in writing, to wit:

The Statute of Frauds embodied in Article 1403 , paragraph (2), of the

Civil Code 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. 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 1s absolute and
indispensable. Consequently, the effect of non-compliance with the requirement
of the Statute is simply that no action can be enforced unless the requirement is
complied with. Clearly, the form required is for evidentiary purposes only.
Hence, if the parties permit a contract to be proved, without any objection, it is
then just as binding as if the Statute has beer. complied with.

The pw:pose 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
52
transactions to be evidenced by a writing signed by the party to be charged.
(Underscoring supplied)

While the Statute qf Frauds aims to safeguard the parties to a contract

from fraud or perjury, its non-observance does not adversely affect the
intrinsic validity of their agree111ent. 53 The form prescribed by law is for

48 Id. at 61-62.
49 Supra note 42.
50 See Vda. de Ouano v. Republic, 657 Phil. 391, 411 (20 11 ).
51
483 Phil. 735 (2004).
52
Id. at 747-748.
53 Heirs ofSoledad A lido v. Campanu. supra note 42.
Decision 9 GR. No. 230573

evidentiary purposes, non-compliance of which does not make the contract

void or voidable, but only renders the contract unenforceable by any action. 54
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. 55

Further, the Statute of Frauds is confined to executory contracts where

there is a wide field for fraud as there is no palpable evidence of the intention
of the contracting parties. 56 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. 57

Considering the above discussion, the Court agrees with the

observations of the CA that the Statute of Frauds is inapplicable in the present
case as the verbal sale between Anselma and the spouses Demaymay had
already been partially consummated when the former received the initial
payment of Pl ,010.00 from the latter. In fact, the said sale was already totally
executed upon receipt of the balance of P450.00.

Furthermore, from the time the verbal sale happened in 1967, the spouses
Demaymay were in possession the property for more than the 15-year period
of their purported lease contract with Anselma. Such property was eventually
tax declared under Matilde 's name after Alma had executed the Deed of
Confirmation of Sale in 1970 upon receipt of the full purchase price. Indeed,
possession of the property and payment of real property taxes may serve as
indicators that an oral sale of a piece of land has been performed or
executed. 58

Considering that the oral sale between Anselma and the spouses
Demaymay is valid (and is actually enforceable by virtue of the partial, if not
total consummation of the contract), petitioners, being the heirs of Anselma,
are legally bound by the said oral sale. Having already been validly sold and
transferred to the spouses Demaymay, we agree with the CA's conclusion that
the subject piece of land described in Tax Declaration No. 7194 no longer
formed part of Anselma's estate that petitioners could have inherited.

WHEREFORE, the petition is DENIED. The August 16, 2016 Decision

and March 8, 2017 Resolution of the Court of Appeals in CA-G.R. SP No.
133147 are AFFIRMED.

54 Id.
ss Id.
56 Carbonnel v. Poncio, I 03 Phil. 655, 659 ( 1958).
57 Id.
58 Ortega v. Leonardo, I 03 Phil. 870, 872 ( 1958).
Decision 10 GR. No. 230573

SO ORDERED.

WE CONCUR:

Associate Justice
Chairperson

/
HEN EDGA-r£0 L. DELOS SANTOS
Associate Justice Associate Justice

JHOSE~OPEZ
Associate Justice
Decision 11 G.R. No. 230573

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.

Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Comi's Division.