FACTS:

Plaintiff-appellee, CHINO DIEVAS, brought an action to compel defendant-appellant, MODESTO ACUÑA CO CHONGCO, to execute a public document of purchase and sale for a portion of a lot and camarin. Dievas alleged that in 1899, he verbally purchased the entire lot and camarin from Co Chongco for P1,050, and later resold a portion (6 meters wide by 33 meters deep) back to Co Chongco. Co Chongco denied the sale, claiming he merely ceded the property to Dievas as a favor or loan for eight years (August 1899 to September 1907), with Dievas obligated to keep the camarin in repair, pay taxes, and receive rents. Co Chongco counterclaimed for the return of the property and rents. The trial court found that a consummated verbal sale had indeed taken place in 1899 or 1900 and ordered Co Chongco to execute the proper document for the portion not resold. Co Chongco appealed, arguing that the findings were against the evidence and that a sale of real estate must be evidenced by a public document as required by Article 1280 of the Civil Code.

ISSUE:

Is a consummated verbal contract for the sale of real estate valid and enforceable between the parties, despite the requirement under Article 1280 of the Civil Code for such contracts to be in a public document?

RULING:

Yes, a consummated verbal contract for the sale of real estate is valid and enforceable between the parties.

The Supreme Court affirmed the trial court’s finding that a consummated verbal sale of the lot and camarin did occur in 1899 or 1900 for the sum of P1,050, which the defendant received. Citing previous jurisprudence (Soriano vs. Cortes, 8 Phil. Rep., 459; Thunga Chui vs. Que Bentec, 2 Phil. Rep., 561; Fortis vs. Gutierrez Hermanos, 6 Phil. Rep., 100; Irureta vs. Tambunting, 1 Phil. Rep., 490), the Court reiterated that while Article 1280 of the Civil Code requires certain contracts, including those transferring rights in real estate, to be in a public document, such contracts are nevertheless valid and produce legal effects between the parties even if made verbally. This effect is given by Article 1278 of the Civil Code. While Article 1279 allows a party to compel the other to execute the proper documents, this requirement does not render the underlying verbal contract invalid. Therefore, the consummated verbal contract of sale in this case is valid among the parties.

The judgment of the lower court was affirmed, with costs against the appellant.

G.R. No. L-5356, CHINO DIEVAS, plaintiff-appellee, vs. MODESTO ACUÑA CO CHONGCO, defendant-appellant., August 17, 1910