G.R. No. 259469, August 30, 2023
Buyayo Aliguyon, Petitioner, vs. Jeffrey a.k.a. ‘Naparawan’ Dummang, Johnny a.k.a. ‘Bidang’ Dummang, Minda Dummang, and Donato Dummang, Respondents.

FACTS

Petitioner Buyayo Aliguyon is the registered owner of a parcel of land in Nueva Vizcaya covered by OCT No. P-10995. He alleged that he allowed the father of respondents (Dummang et al.) to occupy a portion of the land in 1968, and later, his son Robert permitted Dummang et al. to occupy a one-hectare portion without Buyayo’s knowledge. Buyayo filed a Complaint for Recovery of Possession with Damages upon learning that Dummang et al. had sued Robert for breach of a contract to convey the one-hectare portion as payment for Robert’s debt.
Respondents countered that in 1983, Robert received 72 grams of gold from Jeffrey Dummang and failed to return it. In 1986, Buyayo offered to give a one-hectare portion of his land as payment for his son’s debt, provided Jeffrey paid an additional PHP 8,000.00. Jeffrey agreed, paid the amount, and the agreement was settled before tribal elders. Respondents took possession of the land and made improvements. The written agreement was lost. The Regional Trial Court (RTC) dismissed Buyayo’s complaint and ordered him to convey the one-hectare portion to respondents. The Court of Appeals (CA) affirmed the RTC decision, finding novation of the contract and that the oral sale was partially executed, thus not covered by the Statute of Frauds. The CA also ruled that the sale of the conjugal property without the wife’s consent was merely voidable and not annulled.

ISSUE

1. Whether there was a valid novation of the contract.
2. Whether the oral sale of the subject land is covered by the Statute of Frauds.
3. Whether the sale of the subject land, a conjugal property, is void due to the absence of the wife’s consent.

RULING

The Supreme Court denied the Petition, affirming the CA’s decision.
1. On Novation: There was a valid novation. Novation extinguishes an obligation by modifying or replacing it. Here, the original obligation was Robert’s debt to return 72 grams of gold. This was novated when Buyayo, with the creditor Jeffrey’s consent, assumed the obligation by agreeing to convey a one-hectare portion of his land in exchange for the debt’s extinguishment and an additional PHP 8,000.00. The subsequent acts of the parties—Jeffrey’s payment and Buyayo’s acceptance, and respondents’ possession and improvements on the land—clearly established novation by substituting the debtor (Buyayo for Robert) and changing the object (land for gold).
2. On Statute of Frauds: The oral sale is not covered by the Statute of Frauds as it was partially executed. Contracts are binding regardless of form if essential requisites are present. The Statute of Frauds applies only to executory contracts. Here, the contract was partially executed: Jeffrey paid the PHP 8,000.00 consideration, and respondents took possession of the land and introduced improvements. Therefore, the oral agreement is enforceable.
3. On Conjugal Property Sale: The sale is not void but merely voidable. Under Article 166 of the New Civil Code (governing the conjugal partnership of gains regime applicable to Buyayo’s marriage), the husband cannot alienate conjugal real property without the wife’s consent. However, such a sale is not void but voidable under Article 173, and the wife may seek annulment within ten years from the transaction. Buyayo’s wife did not file an action for annulment. Thus, the sale remains binding between the parties.
The Supreme Court upheld the CA’s decision ordering Buyayo to execute a deed of conveyance for the one-hectare portion of the land to respondents.