Plaintiff-Appellant vs. vs. Defendant-Appellee Zabarrano, Palma & Associates R.M. Escareal

EN BANC
[G.R. No. L-24384. September 28, 1967.]
MARGARITA IÑIGO , plaintiff-appellant, vs. ESTATE OF ADRIANA

MALOTO, GREGORIO L. LIRA, Special Administrator , 1 defendant-
appellee.
Zabarrano, Palma & Associates for plaintiff.

R.M. Escareal for defendants.
SYLLABUS
1. CONTRACTS; STATUTE OF FRAUDS; WHEN NOT APPLICABLE. — Statute of

Frauds is applicable only to executory contracts — not to consummated or partially
performed contracts. Thus, where the facts alleged in the complaint are constitutive of
a consummated contract, it matters not that neither the receipt for the consideration
nor the sale itself was in writing, because oral evidence of the alleged consummated
sale of the land is not forbidden by the Statute of Frauds and may not be excluded in
court.
2. REMEDIAL LAW; SUIT TO COMPEL SPECIFIC PERFORMANCE, JUDGMENT IN
EJECTMENT CASE; EFFECT. — A decision in an ejectment case is no bar to a suit to
compel execution of a deed of sale for an action of ejectment is no bar to another
contesting ownership.
3. ID; TRIAL AND PRACTICE; EJECTMENT; OWNERSHIP, ISSUE OF; EFFECT. —
When the issue of ownership becomes apparent in the course of the trial of an
ejectment case, the city court loses jurisdiction to proceed further with the trial thereof
and the judgment thereon.
DECISION
SANCHEZ , J : p
Appeal from an order dated January 18, 1965, sustaining defendants' motion to
dismiss. The court below ruled that the claim on which plaintiff's suit is founded is
unenforceable under the provisions of the Statute of Frauds. 2
Essential to a resolution of the question posed are the following averments of
the complaint: On March 29, 1963, in pursuance of a previous verbal understanding,
plaintiff paid Adriana Maloto P10,000.00 as purchase price for the disputed house and
lot of 453 square meters, located in Iloilo City. The deed of sale was to be executed
later on. Plaintiff did not press Adriana Maloto for a receipt for the money paid
considering the "almost lial relationship" between the two (plaintiff is a niece of
Adriana's deceased husband), and because plaintiff was told by Adriana that the matter
of the preparation of the said receipt and the deed of sale was to be referred to the
latter's lawyer, Atty. Sulpicio Palma. Meanwhile, plaintiff "began to exercise ownership
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and dominion over the said property by improving the same and constructing a retail
store in front thereof." On two occasions, in September and in October, 1963, on
Adriana's instructions, plaintiff went to see Atty. Palma for the preparation of the deed
of sale. She was without success because Palma then was on the campaign trail as a
candidate for councilor of Iloilo City. On October 20, 1963, Adriana died. Thereafter, the
Torrens title to the property was transferred in the name of the present defendants,
nephews and niece of Adriana Maloto, after settlement of the latter's estate. Formal
demand for the execution of a deed of sale by said defendants was rejected by them.
Hence, this suit to compel defendants to execute that deed.
1. The averments of the complaint reveal that no written document was executed
to record the deed of sale or, for that matter, the payment of the purchase price of the
house and land. These are the considerations which impelled the Iloilo court to declare
that plaintiff's suit is unenforceable under the Statute of Frauds.
By Article 1403 (2) (e) of the Civil Code, a verbal contract for the sale of real
property is unenforceable, unless rati ed. For, such contract offends the Statute of
Frauds. But long accepted and well settled is the rule that the Statute of Frauds is
applicable only to executory contracts - not to contracts either totally or partially
performed. 3 The complaint here states that the deceased Adriana Maloto sold the
disputed house and land to plaintiff; that consideration thereof was paid; that by reason
of such sale, plaintiff performed acts of ownership thereon. The facts thus alleged are
constitutive of a consummated contract. It matters not that neither the receipt for the
consideration nor the sale itself was in writing. Because "oral evidence of the alleged
consummated sale of the land" is not forbidden by the Statute of Frauds and may not
be excluded in court. 4
2. The record on appeal shows that defendants herein led a suit for ejectment
against plaintiff covering the same property, the subject of the suit herein. 5 Claim was
there advanced that plaintiff - in the present case - was a mere lessee thereof. She
traversed the allegations of said complaint by reiterating her claim in the complaint
before us that on March 29, 1963 she bought the house and lot from defendants'
predecessor, Adriana Maloto; that the City Court of Iloilo had no jurisdiction over the
subject-matter thereof which involves a case of ownership; and that the issue of
possession cannot be decided by the city court without rst resolving the question of
ownership which properly belongs to the Court of First Instance of Iloilo. In defendants'
supplementary memorandum led with this Court on March 3, 1966, defendants aver
that the decision of January 4, 1966 in the ejectment case was in favor of defendants in
the case now before us; that said decision directed Margarita Iñigo (plaintiff herein) to
vacate the premises, to pay rentals, attorneys' fees and costs; that the aforesaid
judgment became nal; and that on February 15, 1966, the City Judge issued a writ of
execution to enforce the same. Defendants now submit that dismissal of the case for
ownership is proper because of the facts just recited.
We do not think that the decision in the ejectment case is an obstacle to the
present suit. The simple reason is that an action of ejectment is no bar to another
contesting ownership. And then, it would appear from said decision, Annex "A" of the
supplementary memorandum, that the City Court of Iloilo declared that it is "of the
opinion that the defendant Margarita Iñigo is only a lessee of the properties described
in the complaint." Implicit in this is that the question of ownership was in reality
seriously presented before the city court. So that, possession, the problem before the
city court, could not have been properly resolved there without rst settling that of
ownership. Since the issue of ownership became apparent in the course of the trial of
the ejectment case aforesaid, the city court lost jurisdiction to proceed further with the
trial thereof and the judgment thereon. 6
The decision in the ejectment case accordingly is not decisive of the question of
ownership raised in the complaint before the Court of First Instance of Iloilo in the case
now on appeal before this Court.
For the reasons given, the order of the Court of First Instance of Iloilo of January
18, 1965 dismissing plaintiff's complaint is hereby set aside, and the case remanded to
the court of origin for further proceedings. Costs against defendants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Ruiz Castro, Angeles
and Fernando, JJ., concur.
Footnotes
1. The present defendants under the amended complaint (Case 6492, CFI, Iloilo) are: Pan lo
Maloto, Felino Maloto, Constancio Maloto, and Aldina M. Casiano, R.A., p. 8.
2. Section 1 (i), Rule 16, Rules of Court.

3. Almirol vs. Monserrat, 48 Phil. 67, 69-70; Robles vs. Lizarraga Hermanos, 50 Phil. 387, 397;
Diama vs. Macalibo, 74 Phil. 70, 71; Arroyo vs. Azur, 76 Phil. 493, 498; Facturan vs.
Sabanal, 81 Phil. 512, 513; Carbonnel vs. Poncio, 55 Off. Gaz. No. 14, pp. 2415, 2417-
2418; Soriano vs. Heirs of Magali, L-15133, July 31, 1963. See also: IV Tolentino, Civil
Code of the Philippines, 1962 ed., pp. 564-565; IV Padilla, Civil Code Annotated, 1967 ed.,
pp. 857-860.
4. Diama vs. Macalibo, supra , See also: IV Tolentino, Civil Code of the Philippines, 1962 ed., p.
565.
5. "Pan lo Maloto, Felino Maloto, Constancio Maloto, and Aldina M. Casiano plaintiffs vs.
Margarita Iñigo, defendants," Civil Case 7419 of the Municipal Court of Iloilo. See R.A., p.
36.
6. Torres vs. Peña, 78 Phil. 231, 236-237; Peñalosa vs. Garcia, 78 Phil. 245, 247; Cruz vs. Garcia,
79 Phil. 1, 2-3; Canaynay vs. Sarmiento, 79 Phil. 36, 40; Dy Sun vs. Brillantes, 93 Phil.
175, 179- 180; Raymundo vs. Santos, 93 Phil. 395, 400-402; Teodora vs. Balatbat, 94
Phil. 247, 249 Andres vs. Soriano, 54 Off. Gaz. No. 8, pp. 2506, 2507; Songahid vs. Cinco,
58 Off. Gaz. No. 38, pp. 6104, 6106; Castro vs. De los Reyes, L-14970, July 30, 1960. See
also: General Insurance & Surety Corporation vs. Castelo, L-19330, April 30, 1965;
Santiago vs. Cloribel, L-19598, August 14, 1965.

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EN BANC

[G.R. No. L-24384. September 28, 1967.]

MARGARITA IÑIGO , plaintiff-appellant, vs. ESTATE OF ADRIANA

Zabarrano, Palma & Associates for plaintiff.

1. CONTRACTS; STATUTE OF FRAUDS; WHEN NOT APPLICABLE. — Statute of

2. Section 1 (i), Rule 16, Rules of Court.

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