G.R. No. L-11311 - Ortega vs. Leonardo

Plaintiff-appellant Marta C. Ortega alleged the existence of an oral contract for the sale of a parcel of land.
She sought to compel defendant-appellee Daniel Leonardo to comply with their verbal contract based on partial performance.
The Manila court of first instance dismissed the complaint invoking the Statute of Frauds, which generally prohibits enforcing oral contracts for the sale of land.

Prior to and until the destruction of plaintiff’s house during the liberation of Manila, she occupied a parcel of land designated as Lot I, Block 3, San Andres Street, Malate, Manila.
After the liberation, plaintiff re-occupied Lot I.
The government assigned the administration and disposition of Lot I and other lots in the Ana Sarmiento Estate to the Rural Progress Administration (RPA).
Both plaintiff and defendant asserted rights to occupy and purchase the property; plaintiff as a pre-existing occupant and defendant as a subsequent occupant.
During an investigation of conflicting claims, defendant requested plaintiff to desist from asserting her interest in Lot I and orally promised to sell her a portion of 55.60 square meters at ₱25.00 per square meter, on the conditions that:

Plaintiff would pay for the surveying and subdivision of the lot;
Plaintiff could hold the portion as a tenant paying ₱10.00 monthly rental until segregation and full payment of the purchase price;
Defendant would sell the lot portion upon acquiring formal title.

Plaintiff accepted and desisted from claiming Lot I.
Defendant later acquired title to Lot I.
Relying on the agreement, plaintiff caused the survey and segregation of the portion (Lot I-E), incurring expenses.
Plaintiff extended her son's house over an adjoining lot (Lot I-B).
Plaintiff consistently paid the monthly rental of ₱10.00 to defendant.
After the subdivision approval by the Bureau of Lands, plaintiff tendered the purchase price in July 1954, which defendant refused without cause.

The trial court dismissed the complaint on the ground that the oral contract of sale was unenforceable under the Statute of Frauds.
It ruled that plaintiff’s desistance from claiming Lot I was not part of the contract of sale and that partial performance must include payment of purchase price, not mere forbearance.

Whether partial performance can be recognized as an exception to the Statute of Frauds in an oral contract for the sale of land.
Whether the acts alleged by plaintiff (including desisting from claim, possession, making improvements, tender of payment, and payment of rent) constitute sufficient partial performance to enforce the oral contract.
Whether the trial court erred in dismissing the complaint solely on the ground that no part payment was made by plaintiff.