G.R. No. 205810 , September 9, 2020
ESTATE OF VALERIANO C. BUENO AND GENOVEVA I. BUENO, REPRESENTED BY VALERIANO I. BUENO, JR. AND SUSAN I. BUENO, PETITIONERS, VS. ESTATE OF ATTY. EDUARDO M. PERALTA, SR. AND LUZ B. PERALTA, REPRESENTED BY DR. EDGARDO B. PERALTA, RESPONDENTS.

FACTS

The case originated from a Complaint for specific performance filed by the Estate of Atty. Eduardo M. Peralta, Sr. and Luz B. Peralta (Peralta Estate) against Spouses Valeriano and Genoveva Bueno (Bueno Spouses). The Peralta Estate alleged that as partial payment for legal services rendered by Atty. Peralta, the Bueno Spouses verbally agreed to give him their real property in Sta. Mesa, Manila in 1960. Pursuant to this alleged oral agreement, the Peralta family moved onto the property in 1962, introduced improvements, paid realty taxes, and were given a photocopy of the title. After Atty. Peralta’s death in 1983, demands were made for the Bueno Spouses to execute a deed of conveyance, which they refused. The Bueno Spouses denied the existence of any such agreement, asserted that the Peralta family were merely allowed to reside on the property, and argued that the claim was unenforceable under the Statute of Frauds. The Regional Trial Court dismissed the Complaint. The Court of Appeals reversed the trial court, finding that the Statute of Frauds did not apply due to partial performance of the oral contract. The dissenting opinion of Justice Leonen is presented.

ISSUE

Whether the alleged oral contract for the transfer of interest in real property is enforceable, or whether it is barred by the Statute of Frauds.

RULING

The dissenting opinion disagrees with the majority’s finding that the oral contract was ratified or removed from the ambit of the Statute of Frauds. It emphasizes that for partial execution to remove an oral contract from the coverage of the Statute of Frauds, the terms of the contract must be clearly established to show that the actions constituting partial performance were done solely pursuant to that specific oral contract. The dissent implies that the evidence presented failed to meet this standard, as the terms of the alleged oral agreement were not sufficiently clear and the actions taken (possession, payment of taxes) could be consistent with other arrangements, such as a mere tolerance to reside on the property. Therefore, the oral contract should remain unenforceable under the Statute of Frauds.