G.R. No. 5356 - Dievas vs. Co Chongco

In 1899 or 1900, the plaintiff, Chino Dievas, entered into a verbal contract with the defendant, Modesto Acuna Co Chongco, for the purchase of a lot with specific boundaries: 28 meters in width and 33 meters in depth; bounded on the north by the land of Jose de la Pena, on the east by the land of Enrica Segovia, on the south by the land of Modesto Acuna Co Chongco, and on the west by Calle Washington.
Upon purchasing the lot (which included a structure known as a camarin), the plaintiff later resold to the defendant a portion of the said lot described as a 6-meter by 33-meter parcel, with defined boundaries involving the plaintiff’s adjacent land, the land of Enrica Segovia, the land of Modesto Acuna Co Chongco, and Calle Washington.

The defendant denied the plaintiff’s allegations and claimed ownership of both the lot and the camarin.
He alleged that in August 1899 he ceded the property to the plaintiff as a favor or loan for a period of eight years, during which the plaintiff was granted the right to use the property, collect rent, maintain the camarin in repair, and pay the property taxes.
Upon the expiration of the eight-year period on September 1, 1907, the defendant, by counterclaim, sought the return of the camarin, the lot, and the rental income accruing since the lease’s termination.

The plaintiff filed an action in the Court of First Instance of Occidental Negros to compel the defendant to execute the public document necessary to transfer title for the described portion of the lot, including the camarin not resold back to the defendant.
The trial court, after considering evidence largely consisting of oral testimonies from both parties, found that:

A consummated verbal sale had occurred wherein the plaintiff paid the defendant 1,050 pesos in cash, which the defendant received to his satisfaction.
There was a complete and valid transaction between the parties, notwithstanding the lack of a formal written document evidencing the contract.

The trial court subsequently directed the defendant to execute the proper document of purchase and sale.

Dissatisfied with the findings, the defendant filed a motion for a new trial, contending that the trial court’s findings were contrary to the weight of the evidence.
The defense also asserted that, under Article 1280 of the Civil Code, any sale transferring rights in real estate must be evidenced by a public document in order to be valid.
The trial court’s decision to enforce the verbal contract was subsequently appealed by the defendant, prompting review by the Supreme Court.

The sole evidence in the case was the oral testimony of witnesses from both parties; there were no written or public documents to attest to the sale or the terms of the transaction.
The testimonies confirmed the valid exchange of 1,050 pesos for the sale of the lot and camarin, demonstrating that the verbal contract was consummated.

Whether a verbal contract for the sale of real property, lacking a written or public document evidencing the sale, is valid and enforceable between the parties.
Whether the requirement of Article 1280 of the Civil Code, which mandates that contracts transferring rights in real estate be in writing, invalidates a consummated verbal sale.

Whether the defendant’s failure to execute a public document despite the existence of a consummated verbal contract negates the obligations arising from that contract.
How previous jurisprudence, including decisions in Soriano vs. Cortes and Thunga Chui vs. Que Bentec, influences or supports the enforceability of a verbal contract in situations involving real property.

Whether the oral testimony presented by both parties, in the absence of documentary evidence, is sufficient to substantiate the existence and terms of the contractual transaction.
The evidential value of oral testimony in causing legal effects and creating binding obligations in the absence of the formal written document.