G.R. No. L-23213 October 28, 1977
WESTERN MINDANAO LUMBER CO., INC., plaintiff-appellant, vs. NATIVIDAD M. MEDALLE and ANTONIO MEDALLE, defendants-appellees.

FACTS

Western Mindanao Lumber Co., Inc. filed a complaint seeking to enjoin the defendants, Natividad and Antonio Medalle, from closing a road traversing the latter’s property, Lot 2136. The plaintiff alleged it had a right-of-way agreement dated September 8, 1955, with the previous owner, Luciano Hernandez, and had since maintained and used the road, which was also used by the public. The road was allegedly indispensable as the only access from the plaintiff’s logging concession to the highway. The defendants, who purchased the lot in 1958, initially allowed the use but later sent a notice of their intention to close the road. The trial court issued a preliminary injunction upon the filing of a bond.
The defendants moved to dismiss the complaint, arguing the right-of-way agreement was unenforceable under the Statute of Frauds because its first page was not signed by both parties and witnesses, the second page was undated, the plaintiff’s corporate agent’s signature was absent, and it was not notarized. The trial court granted the motion to dismiss. The plaintiff filed a motion for reconsideration and an amended complaint, which included a prayer for the court to fix reasonable compensation should payment be required. The trial court denied the motion for reconsideration, prompting the plaintiff’s appeal.

ISSUE

Whether the trial court correctly dismissed the complaint on the ground that the right-of-way agreement is unenforceable under the Statute of Frauds.

RULING

The Supreme Court reversed the trial court’s orders. The legal logic is clear: the Statute of Frauds, under Article 1403(2) of the Civil Code, enumerates specific transactions that must be in writing to be enforceable. These include agreements not performable within a year, special promises to answer for another’s debt, agreements in consideration of marriage, sales of goods at a price not less than P500, leases or sales of real property for more than one year, and representations as to credit. An agreement creating an easement of right-of-way is not a sale of real property or an interest therein; it is a mere grant of a limited use. Therefore, such an agreement does not fall within any category covered by the Statute of Frauds and cannot be deemed unenforceable solely for lack of a formal written document meeting all technical requirements.
Furthermore, the Court emphasized that the amended complaint could be construed not merely as an action for specific enforcement of the disputed agreement but alternatively as a judicial action to compel the establishment of an easement of right-of-way under Article 649 of the Civil Code, given the plaintiff’s expressed willingness to pay appropriate indemnity. This alternative cause of action, aimed at securing a legal easement due to necessity, is independent of the written agreement and its enforceability. Thus, the trial court erred in dismissing the case, as the complaint, even absent a perfectly executed written contract, stated a valid cause of action warranting a trial on the merits. The case was remanded for further proceedings.