G.R. No. L-31141, March 11, 1930
W. R. MACFARLANE, plaintiff-appellant, vs. B. A. GREEN, defendant-appellee.

FACTS

Plaintiff W. R. Macfarlane held a mortgage for P60,000 from defendant B. A. Green over two properties: the Manhattan Hotel in Manila and the Abucay Plantation in Bataan. Upon default, Macfarlane filed separate foreclosure suits. In the Manila case, the Manhattan Hotel was sold at public auction to Macfarlane for P65,000. Before the sale was finalized, Green attempted to protest, but Macfarlane’s attorney-in-fact, J. F. Bromfield, orally agreed that if the property were resold for more than P65,000, the excess (after deducting costs) would be credited to Green. Relying on this agreement, Green withdrew his protest. Macfarlane later resold the Manhattan Hotel for P135,000. Subsequently, Macfarlane sought to execute the judgment in the Bataan case, leading to the auction sale of the Abucay Plantation to him for P33,000. Green objected to the confirmation of this sale, invoking the prior oral agreement regarding the Manhattan Hotel resale profits. At trial, Green testified about the oral agreement without timely objection from Macfarlane’s counsel, who only later moved to strike the testimony, arguing that Bromfield’s authority to compromise must be in writing. The trial court denied the motion, found the oral agreement valid, and refused to confirm the Abucay Plantation sale, ordering Macfarlane to account for the Manhattan Hotel resale proceeds.

ISSUE

Whether parol evidence of the oral agreement between Green and Bromfield (Macfarlane’s agent) is admissible despite the Statute of Frauds, given Macfarlane’s failure to timely object.

RULING

Yes, the parol evidence is admissible. The Supreme Court affirmed the trial court’s decision, holding that Macfarlane waived his right to object to the parol evidence. Although the agreement was oral and pertained to a transaction involving real property, Macfarlane’s counsel did not make a timely objection on the ground of the Statute of Frauds when Green testified. The only objection raised was to Bromfield’s authority to compromise, which was later admitted, making that objection moot. Moreover, Macfarlane’s counsel extensively cross-examined Green on the agreement, which constituted a waiver of any objection to the parol evidence. The Court cited Abrenica v. Gonda and De Gracia (34 Phil. 739), which held that failure to timely object to parol evidence, or cross-examining the witness on it, waives the right to invoke the Statute of Frauds. Thus, the oral agreement was binding on Macfarlane, requiring him to account for the resale profit from the Manhattan Hotel and credit it to Green’s debt. The Abucay Plantation sale was properly disapproved pending settlement of the accounts.