G.R. No. 11311. May 28, 1958
MARTA C. ORTEGA, PLAINTIFF AND APPELLANT, VS. DANIEL LEONARDO, DEFENDANT AND APPELLEE.
BENGZON, J.:
of oral contracts for the sale of land. Not so well known is the exception
concerning partially executed contracts[1]—at least our jurisprudence offers few, if
any, apposite illustrations. This appeal exemplifies such exception.
Alleging partial performance, plaintiff sought to compel defendant to comply
with their oral contract of sale of a parcel of land. Upon a motion to dismiss,
the Manila court of first instance ordered dismissal following the above general
rule.
Hence this appeal. It should be sustained if the allegations of the
complaint-which the motion to dismiss admitted-set put an instance of partial
performance.
Stripped of non-essentials, the complaint averred that long before and until
her house had been completely destroyed during the liberation of the City of
Manila, plaintiff occupied a parcel of land, designated as Lot I, Block 3 etc.
(hereinafter called Lot I) located at San Andres Street, Malate, Manila; that
after liberation she re-occupied it; that when the administration and
disposition of the said Lot I (together with other lots in the Ana Sarmiento
Estate) were assigned by the Government to the Rural Progress
Administration[1] plaintiff asserted her
right thereto (as occupant) for purposes of purchase; that defendant also
asserted a similar right, alleging occupancy of a portion of the land subsequent
to plaintiff’s; that during the investigation of such conflicting interests,
defendant asked plaintiff to desist from pressing her claim and definitely
promised that if and when he succeeded in getting title to Lot 1[2], he would sell to her a portion thereof with
an area of 55.60 square meters (particularly described) at the rate of P25.00
per square meter, provided she paid for the surveying and subdivision of the
Lot, and provided further that after he acquired title, she could continue
holding the lot as tenant by paying a monthly rental of P10.00 until said
portion shall have been segregated and the purchase price fully paid; that
plaintiff accepted defendant’s offer, and desisted from further claiming Lot I;
that defendant finally acquired title thereto; that relying upon their
agreement, plaintiff caused the survey and segregation of the portion which
defendant had promised to sell, incurring expenses therefor, said portion being
now designated as Lot I-E in a duly prepared and approved subdivision plan; that
in remodelling her son’s house constructed on a lot adjoining Lot I she extended
it over said Lot I-B; that after defendant had acquired Lot I plaintiff
regularly paid him the monthly rental of P10.00; that in July 1954, after the
plans of subdivision and segregation of the lot had been approved by the Bureau
of Lands, plaintiff tendered to defendant the purchase price which the latter
refused to accept, without cause or reason.
The court below explained in its order of dismissal:
“It is admitted by both parties that an oral agreement to sell a piece of
land is not enforceable. (Art. 1403, Civil Code, Section 21, Rule 123, Rules of
Court.) Plaintiff, however, argues that the contract in question, although
verbal, was partially performed because plaintiff desisted from claiming the
portion of lot I in question due to the promise of defendant to transfer said
portion to her after the issuance of title to defendant. The court thinks that
even granting that plaintiff really desisted to claim not I on oral promise to
sell made by defendant, the oral promise to sell cannot be enforced. The
desistance to claim is not a part of the contract of sale of the land. Only in
essential part of the executory contract will, if it has already been performed,
make the verbal contract enforceable, payment of price being an essential part
of the contract of sale.”
If the above means that partial performance of a sale contract occurs only
when part of the purchase price is paid, it surely constitutes a defective
statement of the law. American Jurisprudence in its title “Statute of Frauds”
lists other acts of partial performance, such as possession, the making of
improvements, rendition of services, payment of taxes, relinquishment of rights,
etc.
Thus, it is stated that “The continuance in possession by a purchaser who is
already in possession may, in a proper case, be sufficiently referable to the
parol contract of sale to constitute a part performance thereof. There may be
additional acts, or peculiar circumstances which sufficiently refer the
possession to the contract. * * * Continued possession under an oral contract of
sale, by one already in possession as a tenant, has been held a sufficient part
performance, where accompanied by other acts which characterize the continued
possession and refef it to the contract of purchase. Especially is this true
where the circumstances of the case include the making of substantial,
permanent, and valuable improvements.” (49 American Jurisprudence-44)
It is also stated that “The making of valuable permanent improvements on the
land by the purchaser, in pursuance of the agreement and with the knowledge of
the vendor, has been said to be the strongest and most unequivocal act of part
performance by which a verbal contract to sell land is taken out of the statute
of frauds, and is ordinarily an important element in such part performance. * *
* Possession by the purchaser under a parol contract for the purchase of real
property, together with his making valuable and permanent improvements on the
property which are referable exclusively to the contract, in reliance on the
contract, in the honest belief that he has a right to make them, and with the
knowledge and consent or acquiescence of the vendor, is deemed a part
performance of the contract. The entry into possession and the making of the
improvements are held on amount to such an alteration in the purchaser’s
position as will warrant the court’s entering a degree of specific performance.”
(49 American Jurisprudence p. 755, 756.)
Again, it is stated that “A tender or offer of payment, declined by the
vendor, has been said to be equivalent to actual payment, for the purposes of
determining whether or not there has been a part performance of the contract.
This is apparently true where the tender is by a purchaser who has made
improvements. But the doctrine now generally accepted, that not even the payment
of the purchase price, without something more, * * * is a sufficient part
performance. (49 American Jurisprudence p. 772.)
And the relinquishment of rights or the compromise thereof has likewise been
held to constitute part performance. (See same title sees. 473, 474, 475.)
In the light of the above four paragraphs, it would appear that the complaint
in this case described several circumstance indicating partial performance:
relinquishment of rights[1] continued
possession, building of improvements, tender of payment plus the surveying of
the lot at plaintiff’s expense and the payment of rentals.
We shall not take time to discuss whether one or the other or any two or
three of them constituted sufficient performance to take the matter away from
the operation of the Statute of Frauds. Enough to hold that the combination of
all of them amounted to partial performance; and we do so line with the accepted
basis of the doctrine, that it would be a fraud upon the plaintiff if the
defendant were permitted to oppose performance of his part after he has allowed
or induced the former to perform in reliance upon the agreement. (See 49
American Jurisprudence p. 725.)
The paragraph immediately preceding will serve as our comment on the
appellee’s quotations from American Jurisprudence itself to the effect that
“relinquishment” is not part performance, and that neither “surveying the land”[2] nor tender of payment is sufficient.
The precedents hereinabove transcribed oppose or explain away or qualify the
appellee’s citations. And at the risk of being repetitious we say: granting that
none of the three circumstances indicated by him, (relinquishment, survey,
tender) would separately suffice, still the combination of the three with the
others already mentioned, amounts to more than enough.
Hence, as there was partial performance, the principle excluding parol
contracts for the sale of realty, does not apply.
The judgment will accordingly be reversed and the record remanded for further
proceedings. With costs against appellee.
Paras, C.J., Montemayor, Reyes, A., Bautista Angelo, Labrador,
Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur.
[1]See Moran, Rules of Court, 1957 Ed. Vol.
3, p. 178.
[1]Evidently in connection, with
purchase of landed estates for re-sale to occupants.
[2]Of about 234 square meters.
[1]An occupant of the landed estate has
preference to buy.
[2]Here the survey was at plaintiff’s
expense and pursuant to their agreement.