G.R. No. 230573 - Heirs of Godines vs. Demaymay

Case Summary (G.R. No. 230573)

Factual Background

Petitioners asserted that Anselma Yuson Godines died in 1968 leaving a residential lot in Divisoria, Cawayan, Masbate, described as containing sixty-eight square meters under Tax Declaration No. 6111. Respondents claimed possession of the same parcel on the basis that Anselma obtained a loan from Matilde and, in consideration, permitted the spouses Demaymay to use the land for a fifteen-year period. Petitioners discovered in August 1987 that Tax Declaration No. 6111 was cancelled and Tax Declaration No. 7194 was registered in Matilde’s name by virtue of a purported Deed of Confirmation of Sale allegedly executed by petitioner Alma in 1970. An actual survey later showed the land’s true area to be three hundred thirty-two square meters appearing in Tax Declaration No. 7164 under Matilde’s name.

The Complaint and Core Allegations

Petitioners filed a Complaint for Recovery of Ownership and Possession and Declaration of the Deed of Confirmation as Null and Void with Damages against the spouses Demaymay. They alleged that Alma could not have executed the Deed of Confirmation because she was in Bogo, Cebu from 1969 to 1975 and was only fourteen years old in 1970. Petitioners also alleged that respondents obtained the deed in bad faith and that the spouses’ acts prejudiced the heirs, causing mental anguish and social humiliation.

Respondents’ Answer and Defense

The spouses Demaymay denied the allegations, asserted lack of cause of action and prescription, and pleaded ownership through sale. They contended that Alma was estopped from challenging the documents because she had accepted the last installment for the land and voluntarily executed the confirmation following the death of her parents. Respondents maintained that they, and those deriving title from them, were the absolute owners and actual possessors of the property.

Trial Court Proceedings and Transfer

The Regional Trial Court ordered transfer of the case to the Municipal Circuit Trial Court in Placer, Masbate, due to the assessed value of the property. The MCTC declared respondents in default at one point, prompting petitioners to present ex parte evidence. The MCTC initially dismissed the complaint on jurisdictional grounds but the RTC reversed and remanded for disposition. The MCTC later denied respondents’ motion to dismiss and, after trial and further proceedings, rendered judgment in favor of petitioners.

Judgments Below

The MCTC rendered judgment on May 31, 2011 (and later issued judgment on June 19, 2013 consolidating findings) declaring petitioners as owners, annulling the Confirmation of Sale, cancelling the tax declaration in Matilde’s name, and directing respondents to vacate. The RTC affirmed the MCTC judgment with modification and ordered restoration of possession. The spouses Demaymay appealed to the Court of Appeals under Rule 42.

Court of Appeals Decision and Relief

The Court of Appeals on August 16, 2016 granted the spouses Demaymay’s petition for review, reversed and set aside the RTC judgment, and recognized the spouses Demaymay as the owners entitled to possession. The CA ordered that upon finality of its decision the heirs execute a Deed of Absolute Sale transferring the property to the spouses Demaymay. The CA denied petitioners’ motion for reconsideration in its March 8, 2017 Resolution.

Issue Presented to the Supreme Court

The principal issue submitted to the Supreme Court was whether the Court of Appeals gravely erred in ruling that the heirs of Anselma were bound by the alleged oral contract of sale in favor of the spouses Demaymay.

The Parties’ Contentions Before the Supreme Court

Petitioners contended that the alleged oral sale and the subsequent Deed of Confirmation were invalid, stressing Alma’s incapacity and absence from the locality at the relevant time, and arguing that the sale could not be proved given the requirements of the Statute of Frauds. Respondents maintained that a valid sale occurred in 1967 with an initial payment of P1,010.00 and completion upon payment of the balance P450.00, that possession and tax declaration under Matilde evidenced transfer, and that Alma’s later execution of a Deed of Confirmation in 1970 evidenced ratification.

Supreme Court’s Ruling

The Supreme Court denied the petition and affirmed the Court of Appeals’ Decision and Resolution. The Court held that the controlling question was the validity of the oral sale and not merely the formal execution of the Deed of Confirmation. The Court found that the verbal sale had been at least partially, and ultimately fully, consummated by payment and by respondents’ possession and tax declaration, thereby rendering the Statute of Frauds inapplicable as a bar to enforcement.

Legal Basis and Reasoning

The Court reiterated that contracts are binding in whatever form they are entered into when essential requisites exist (Article 1305; Article 1356). The Court explained that Article 1358 and Article 1403(2) (the Statute of Frauds) prescribe the public inst

Case Syllabus (G.R. No. 230573)

Parties and Procedural Posture

Petitioners are the heirs of Anselma Yuson Godines who filed a Complaint for Recovery of Ownership and Possession and Declaration of the Deed of Confirmation as Null and Void with Damages against the spouses Platon and Matilde Demaymay.
Respondents are the spouses Demaymay, who asserted ownership of the disputed land by virtue of a sale and subsequent tax declaration in Matilde's name.
The petition is a Petition for Review on Certiorari seeking reversal of the August 16, 2016 Decision and March 8, 2017 Resolution of the Court of Appeals in CA-G.R. SP No. 133147.
The Supreme Court rendered judgment denying the petition and affirming the Court of Appeals' decision and resolution.

Key Factual Allegations

Anselma died on August 11, 1968 owning a parcel of land in Divisoria, Cawayan, Masbate, originally tax declared under Tax Declaration No. 6111 with an assessed value of P330.00.
The spouses Demaymay were in possession of the land because Anselma allegedly obtained a loan from Matilde and allowed them to use the land for fifteen years under an unwritten agreement.
Petitioners discovered that Tax Declaration No. 6111 was cancelled and Tax Declaration No. 7194 and No. 7164 were issued under Matilde's name reflecting an actual surveyed area of 332 square meters.
Respondents asserted a sale of the property to them in January 1967 for the total price of P1,460.00 with an initial payment of P1,010.00 and alleged full payment and a Deed of Confirmation of Sale executed by Alma on October 12, 1970.
Petitioners contended that Alma could not have executed the Deed of Confirmation of Sale because she was allegedly fourteen years old in 1970 and was in Bogo, Cebu from 1969 to 1975.

Procedural History

The case was transferred to the Municipal Circuit Trial Court (MCTC) of Placer, Masbate by order dated January 30, 1995 because the assessed value of the property was below P20,000.00.
The MCTC initially dismissed the complaint in its September 18, 2008 judgment for lack of jurisdiction, which the Regional Trial Court (RTC) reversed and remanded.
The MCTC denied the defendants' Motion to Dismiss on May 3, 2011 and rendered a Decision on May 31, 2011 declaring the plaintiffs owners and ordering cancellation of Tax Declaration No. 7194.
Further proceedings culminated in a MCTC judgment in favor of petitioners dated June 19, 2013, which the RTC affirmed on November 18, 2013 with modification and directed defendants to vacate.
The spouses Demaymay filed a petition for review under Rule 42 with the Court of Appeals, which reversed and set aside the lower courts' judgments in its August 16, 2016 Decision and denied reconsideration on March 8, 2017.
The Supreme Court denied the Petition for Review on Certiorari and affirmed the Court of Appeals' August 16, 2016 Decision and March 8, 2017 Res