Case Summary (G.R. No. 205810)
Chronology of Key Events
• 1962: Atty. Peralta and family took possession, made substantial improvements, and paid realty taxes.
• 27 December 1983: Atty. Peralta died; his heirs continued occupancy and tax payments.
• 1990: Dr. Edgardo Peralta formally demanded execution of a deed of conveyance; the Buenos instead sought surrender of possession.
• 1996: Estate of Peralta filed a complaint for specific performance to compel execution of conveyance documents.
• 2005: RTC dismissed the complaint for unenforceability under the Statute of Frauds and prescription.
• 2012: Court of Appeals reversed, ordering the Buenos’ heirs to execute a deed of conveyance or face court-divesting order.
• 2020: Supreme Court decision under the 1987 Constitution.
Procedural History at the Trial Level
The Regional Trial Court denied the heirs of Genoveva’s motion to dismiss and a demurrer to evidence. After trial on the merits, it concluded that no perfected contract existed, that any oral agreement was executory and barred by the Statute of Frauds and by the six-year prescription, and thus dismissed the Estate of Peralta’s complaint.
Court of Appeals’ Ruling
The appellate court characterized the arrangement as an oral innominate (facio ut des) contract: Peralta rendered legal services (“I do”) in exchange for the conveyance of the property upon retirement (“you give”). It invoked:
• Partial performance doctrine to remove the transaction from the Statute of Frauds;
• Article 22 (unjust enrichment) to require fair remuneration;
• Evidence that the Buenos never paid Peralta any salary and that his occupation and improvements were made in the concept of an owner;
• The imprescriptibility of an action to quiet title once possession is consummated;
• No laches, since demands were repeatedly refused and interruptions of possession occurred.
It therefore ordered execution of a conveyance deed or, upon noncompliance, a court-divesting order.
Issue Before the Supreme Court
Whether the Court of Appeals gravely erred in setting aside the RTC decision, finding an enforceable oral contract removed from the Statute of Frauds, and ordering the execution of a deed of conveyance in favor of the Peralta Estate.
Applicable Law
• 1987 Philippine Constitution (post-1990 decision)
• Civil Code of the Philippines:
– Article 1403(2): Statute of Frauds (oral contracts for sale or transfer of real property are unenforceable absent written note or memorandum)
– Article 1405: Ratification of contracts infringing on the Statute of Frauds by failure to object to parol evidence or by acceptance of benefits
– Article 22: Unjust enrichment
– Article 1145: Extinctive prescription for obligations
Statute of Frauds and Its Exceptions
The Statute of Frauds requires certain contracts, including those for the sale or transfer of real property, to be in writing. However:
• It does not render such contracts void—only unenforceable unless ratified.
• It applies only to executory contracts; partial or full performance exempts the transaction.
• Ratification may be express or tacit: failure to object to oral proof and acceptance of benefits cure the lack of writing.
Supreme Court’s Analysis on Parol Evidence and Ratification
The Court reaffirmed that:
• An oral agreement for real property becomes enforceable when one party partially performs (possession, improvements, tax payments) and the other party acquiesces.
• Tacit ratification occurs when a party, with knowledge of the verbal agreement, fails to object to parol evidence at trial or accepts benefits under the contract.
• Judicial admissions in pleadings, testimony, and counsel’s conduct are binding and may preclude contradictory evidence.
Evidence of Partial Performance and Judicial Admissions
The Court observed that:
• Atty. Peralta and his heirs occupied the property continuously from 1962, made substantial improvements, and paid all realty taxes.
• The Buenos never sued for recovery of possession, tacitly acknowledging t
Case Syllabus (G.R. No. 205810)
Antecedents
- In 1957, Spouses Valeriano C. Bueno and Genoveva I. Bueno engaged Atty. Eduardo M. Peralta, Sr. to handle their personal and business legal matters.
- Atty. Peralta served as counsel and held executive positions in various Bueno‐owned corporations for almost 26 years.
- In 1960, the Buenos gave Atty. Peralta the subject property (TCT No. 47603, 3450 Magistrado Villamor St., Sta. Mesa, Manila) as partial consideration for his professional services.
- Beginning January 1962, Atty. Peralta, his wife, and children occupied the property, introduced substantial improvements, and paid its real property taxes, with the Buenos’ knowledge and acquiescence.
- Atty. Peralta died on 27 December 1983; his heirs continued in peaceful possession and tax payments.
- Starting in 1990, the Peralta heirs repeatedly demanded execution of a proper deed of conveyance; the Buenos refused and instead insisted on physical surrender of the property.
Procedural History
- 15 January 1996: Estate of Peralta filed a complaint for specific performance to compel a deed of conveyance.
- Petitioners’ Answer: denied enforceable oral sale, invoked Statute of Frauds, and cited encumbrances as bar to conveyance.
- 29 July 1998: RTC denied motion to dismiss for failure to plead prescription in the proper stage.
- 31 May 2002: RTC denied petitioners’ demurrer to evidence, finding the case was not barred by Statute of Frauds or prescription.
- 11 October 2005: RTC dismissed the complaint—no perfected contract, condition unfulfilled, and six‐year prescription had already run.
- 19 December 2005: RTC denied Peralta heirs’ motion for reconsideration.
- 31 August 2012: Court of Appeals reversed RTC, held oral facio ut des contract valid and not within Statute of Frauds, and ordered conveyance.
- 8 February 2013: CA denied reconsideration.
- 9 September 2020: Supreme Court rendered its decision on the petition for review on certiorari.
Issues
- Did the Court of Appeals commit reversible error and/or grave abuse of discretio