G.R. No.

141877 August 13, 2004

PONENTE: Carpio-Morales, J.

FACTS: Macaria Francisco (Macaria) and Marcos Averia contracted marriage which bore six issues, namely:
Gregorio, Teresa, Domingo, Angel, Felipe and Felimon. Macaria was widowed and she contracted a second marriage
with Roberto Romero (Romero) which bore no issue. Romero died on February 28, 1968, leaving three (3) adjoining
residential lots located at Sampaloc, Manila. The house and lot containing 150 square meters at 725 Extremadura
Street, Sampaloc was apportioned to Macaria with a TCT accordingly issued in her name.

Alleging that fraud was employed by her co-heirs in the partition of the estate of Romero, Macaria filed on June 1,
1970 an action for annulment of title and damages before the CFI of Manila against her co-heirs Domingo Viray, et
al. The case was pending litigation for about ten years until the Court of Appeals rendered a decision awarding an
additional 30 sqm of the estate of Romero to Macaria.

Close to six years after Macaria’s demise or on January 19, 1989, her children Domingo, Angel and Felipe, along
with Susan Pelayo vda. de Averia (widow of Macaria’s deceased son Felimon), filed before the RTC of Manila a
complaint against their brother Gregorio and niece Sylvanna Vergara "representing her absentee mother", Teresa
Averia, for judicial partition of the Extremadura property inclusive of the 30 square meters judicially awarded. The
case which was docketed as Civil Case No. 89-47554 is now the subject of the present decision.

The defendants Gregorio and Sylvanna Vergara, in their February 8, 1989 Answer to the Complaint, countered that
Gregorio and his late wife Agripina spent for the litigation expenses in Civil Case No. 79955, upon the request of
Macaria, and the couple spent not less P20,000.00 for the purpose "which amount due to the inflation of the
Philippine peso is now equivalent to more or less P200,000.00;" that from 1974 to 1983, Macaria was bedridden and
it was Gregorio’s wife Agripina who nursed and took care of her; that before Macaria died, she in consideration of
the court and other expenses which were defrayed by Gregorio and his wife in prosecuting Civil Case No. 79955 and
of "the kindness of the said couple in caring for her," verbally sold to the spouses Gregorio and Agripina one-half
(½) of her Extremadura property.

Gregorio and Sylvanna further countered that the plaintiff Domingo sold and assigned to the spouses Gregorio and
Agripina his one sixth (1/6) share in the remaining ½ portion of the Extremadura property.

The RTC ruled in favor of the defendant. The Court, after a circumspect assessment of the evidence presented by
both parties, hereby declares, that defendant Gregorio Averia then a major of police precinct in Makati was the person
responsible for the expenses in litigation in Civil Case No. 79955, involving the property and their mother had indeed
awarded him with ½ portion of the property and that Domingo Averia sold 1/6 of [his] share of the remaining ½
portion of the property to defendant Gregorio.

However, the CA reversed the decision of the trial court on the grounds that the alleged transfers made by Macaria
and Domingo in favor of Gregorio were bereft of any written memoranda, and that it was error for the trial court to
rely solely on the evidence adduced by the defendants consisting of the testimonies of Gregorio, Veronica Bautista,
Sylvanna Vergara Clutario, Atty. Mario C.R. Domingo, Felimon Dagondon and Gregorio Averia, Jr. The CA
explained its ruling in this wise:

Article 1403, 2(e) of the New Civil Code is explicit:

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 thereafter 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 this 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 two (2) transactions in question being agreements for the sale of real property or of an interest therein are in
clear contravention of the prescription that it must be in writing and subscribed by the party charged or by an agent
thereof. Hence, the strong insistence by defendants-appellees on the verbal conveyances cannot be made the basis
for the alleged ownership over the undivided interests claimed by Gregorio Averia.

The parol evidence upon which the trial court anchored its award in favor of defendant-appellee Gregorio Averia is
irregular as such kind of evidence is foreclosed by Article 1403 of the Civil Code that no evidence of the alleged
agreements can be received without the writing of secondary evidence which embodies the sale of the real
property. The introduction of the testimonies of Gregorio Averia’s witnesses were timely objected to by plaintiffs-
appellants. Since the testimonies of defendants-appellees’ witnesses are inadmissible, then such exclusion has pulled
the rug under the assailed decision of the trial court and it has no more leg to stand on.

ISSUE: WON the CA erred in its finding that (1) there was no sale of ½ of the deceased Macaria F. Averia’s interest
and ownership over the subject property in favor of petitioner Gregorio Averia and; (2) its finding that the reception
of parol evidence to the effect that respondent Domingo Averia had already sold his 1/6 share in the subject property
in favor of petitioner Gregorio Avera is not in accordance with law -- YES

RULING: YES. The Court set aside and reversed the decision of the CA and granted the petition.

On the verbal sale of ½ of Macaria Averia’s property to Gregorio and Agripina: Except for the testimony of
petitioner Gregorio bearing on the verbal sale to him by Macaria of the property, the testimonies of petitioners’
witnesses Sylvanna Vergara Clutario and Flora Lazaro Rivera bearing on the same matter were not objected to by
respondents. Just as the testimonies of Gregorio, Jr. and Veronica Bautista bearing on the receipt by respondent
Domingo on July 23, 1983 from Gregorio’s wife of P5,000.00 representing partial payment of the P10,000.00
valuation of his (Domingo’s) 1/6 share in the property, and of the testimony of Felimon Dagondon bearing on the
receipt by Domingo of P5,000.00 from Gregorio were not objected to. Following Article 1405 of the Civil Code, the
contracts which infringed the Statute of Frauds were ratified by the failure to object to the presentation of parol
evidence, hence, enforceable.

Contrary then to the finding of the CA, the admission of parol evidence upon which the trial court anchored its
decision in favor of respondents is not irregular and is not foreclosed by Article 1405.

In any event, the Statute of Frauds applies only to executory contracts and not to contracts which are either partially
or totally performed. In the case at bar, petitioners claimed that there was total performance of the contracts, full
payment of the objects thereof having already been made and the vendee Gregorio having, even after Macaria’s death
in 1983, continued to occupy the property until and after the filing on January 19, 1989 of the complaint subject of
the case at bar as in fact he is still occupying it. In proving the fact of partial or total performance, oral evidence may
be received as what the trial court in the case at bar did.

Not only on account of Sylvana’s manner of testifying that her testimony should be given weight. Her testimony was
against the interest of her mother Teresa whom she represented, her mother being also an heir of Macaria. If the
transfer by Macaria to Gregorio of ½ of the property is upheld as valid and enforceable, then the share of the other
heirs including Sylvanna’s mother would considerably be reduced.
That Atty. Mario C. R. Domingo who was admittedly Macaria’s counsel in Civil Case No. 79955 affirmed on the
witness stand that Gregorio and his wife were the ones who paid for his attorney’s fees amounting to
P16,000.00 should no doubt strongly lend credence to Gregorio’s claim to that effect.

On the sale of Domingo’s 1/6 share to Gregorio: Petitioners were able to establish said transaction by parol
evidence, consisting of the testimonies of Gregorio Averia, Jr., Veronica Averia and Felimon Dagondon the
presentation of which was, it bears repeating, not objected to.

Albeit Domingo never denied having received the total amount of P10,000.00 from Gregorio and his wife, he denied
having sold to Gregorio his interest over the property. Such disclaimer cannot, however, prevail over the categorical,
positive statements of petitioners’ above-named witnesses.

COMMENTS:

• Parol evidence – Parol evidence is, in simplest terms, evidence regarding discussions about what a
contractual agreement should contain before entering into the contract. In other words, if you hire someone
to paint your house, and in the process of negotiating the contract you also mention that you would like them
to caulk around your windows, but the contract you subsequently enter into does not include anything about
caulking, those discussions are parol evidence (https://www.hg.org/legal-articles/what-is-parol-evidence-
31812)

• I agree with the decision of the Supreme Court to reverse the decision of the CA and uphold the decision of
the RTC and its factual findings. The admission of parol evidence in the case at bar is not irregular and
foreclosed by Article 1405 of the NCC. While Article 1403, 2 (e) provides 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 must be supported
by a written document to be enforceable, Article 1405 also provides that such contracts which infringe the
Statute of Frauds, can be ratified by the absence of any objection from the opposing party.

Art. 1405. Contracts infringing the Statute of Frauds, referred to in No. 2 of Article 1403, are ratified by the
failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefit under
them.

In this case, there was no objection to the testimonies provided by the witnesses of the petitioners and
therefore shall be given full credence. The testimony of Sylvana Vergara Clutario, daughter of Teresa, in fact
was more than sufficient to prove the conveyance of half of the subject property by Macaria to Gregorio.

• In any event, the Statute of Frauds, as explained by the Supreme Court, also applies to purely executory
contracts or those that have not yet been fully performed or fully executed. In the case at bar, the petitioners
were able to prove that there had been a full performance or execution of the contracts.