G.R. No. L-11231; May 12, 1958
ROSARIO CARBONNEL, plaintiff-appellant, vs. JOSE PONCIO, RAMON INFANTE, and EMMA INFANTE, defendants-appellees.

FACTS

Plaintiff Rosario Carbonnel filed a second amended complaint in the Court of First Instance of Rizal alleging that on January 27, 1955, she purchased a parcel of land from defendant Jose Poncio at P9.50 per square meter. She paid P247.26 on account and assumed Poncio’s mortgage obligation with the Republic Savings Bank amounting to P1,177.48, with the balance payable upon execution of the deed of conveyance. A condition was that Poncio could stay on the land for one year, as stated in a signed document (Exhibit A). Poncio refused to execute the deed and later conveyed the property to defendants Ramon and Emma Infante, who allegedly knew of the prior sale. Plaintiff sought declaration of ownership, annulment of the second sale, specific performance, and damages. Defendants moved to dismiss, invoking the Statute of Frauds. The trial court initially denied the motion but later, during trial, after plaintiff presented testimony from Constancio Meonada (who typed and witnessed Exhibit A) and began her own testimony, defense counsel moved to strike based on the Statute of Frauds. The lower court then issued an order dismissing the complaint on the ground that the cause of action was unenforceable under the Statute of Frauds, also dismissing the counterclaims.

ISSUE

Whether the Statute of Frauds is applicable to plaintiff’s action, thereby barring her from presenting parol evidence to prove the alleged contract of sale.

RULING

The Statute of Frauds is NOT applicable. The Supreme Court set aside the order of dismissal and remanded the case for further proceedings. The Court held that the Statute of Frauds applies only to executory contracts, not to contracts that are totally or partially performed. The doctrine of part performance takes an oral contract for the sale of real estate out of the operation of the statute to prevent fraud, as it would be fraudulent to allow a defendant to escape performance after permitting the plaintiff to perform in reliance on the agreement. The Court found that plaintiff’s allegations of partial payment (P247.26) and assumption of the mortgage, if proven, constituted partial performance. It was error for the trial court to reject testimonial evidence on partial performance at the outset; plaintiff is entitled to an opportunity to introduce parol evidence to support her allegations, including explaining the possession of Poncio’s bank book with the P247.26 entry. The merits of the claim were not decided, but the legal right to present evidence was upheld.