FORM IMPORTANT FOR ENFORCEABILITY STATUTE OF FRAUDS

G.R. No. L-24384

INIGO v ESTATE OF MALOTO
SANCHEZ, J.

Summarized by Ira Agting

The case involves a verbal sale of land. The buyer paid 10k as purchase price and
executed acts of ownership on the land, such as building a retail shop thereon. When
the seller died, the heirs refused to execute a deed of sale. The Iloilo Court held that the
contract is unenforceable under the Statute of Frauds, there being no written documents
such as receipt and deed of sale. SC disagrees, holding that Statute of Frauds is not
applicable in this case because there was a consummated contract. Statute of Frauds is
applicable only to executory contracts, not to contracts either totally or partially
performed. It matters not that neither the receipt for the consideration nor the sale itself
was in writing because "oral evidence of the alleged consummated sale of the land" is
not forbidden by the Statute of Frauds and may not be excluded in court.

IMPORTANT PEOPLE
Margarita Inigo Buyer of the land
Adriana Maloto Seller of the land, deceased

FACTS
Pursuant to a verbal understanding, Margarita Inigo paid Adriana Manaloto P10,000 as
purchase price for a house and lot in Iloilo
Deed of sale was to be executed later on
A receipt was not immediately given, being that Magarita is the niece of Adriana's
husband and that the preparation of the receipt and the deed of sale was to be done by
Adriana's lawyer Atty Palma.
Margarita began improving the property. She constructed a retail store in front of it

On two occasions, Margarita went to see Atty Palma for the deed of sale but she was without
success because he was busy with his campaign as councilor of Iloilo

Adriana died and the Torrens title was transferred to her nephews and nieces. They rejected a
formal demand for the execution of the deed of sale, so Margarita filed a complaint.

The Iloilo court held that the contract is unenforceable under the Statute of Frauds, there
being no written document to record the deed of sale and the payment of the purchase
price.
Article 1403 (2) (e) Civil Code: a verbal contract for the sale of real property is
unenforceable, unless ratified. For, such contract offends the Statute of Frauds

ISSUE with HOLDING

1
 W/N the contract of sale is unenforceable, there being no written
documents NO

1 Long accepted and well settled is the rule that the Statute of Frauds is applicable
only to executory contracts, not to contracts either totally or partially performed.
o In the case, the facts show that there was a consummated contract:
Consideration was paid
By reason of such sale, Margarita performed acts of ownership
thereon.
o It matters not that neither the receipt for the consideration nor the sale
itself was in writing because "oral evidence of the alleged consummated sale
of the land" is not forbidden by the Statute of Frauds and may not be excluded
in court.

1 [Not Relevant to Sales] Malotos filed an ejectment suit against Margarita in the City Court
of Iloilo. They claimed she was a mere lessee of the land. This case was decided in favor
of the Malotos and Margarita was ordered to vacate the premises and pay rentals. The
Malotos claim this decision has become final, therefore the present case re ownership
must be dismissed.

SC: The ejectment case is not an obstacle to the present suit because an action of
ejectment is no bar to another contesting ownership.
o Possession, the problem before the city court, could not have been properly
resolved there without first settling that of ownership.
o City Court of Iloilo had no jurisdiction over the subject-matter thereof which involves
a case of ownership.
o Ownership properly belongs to the Court of First Instance of Iloilo.

DISPOSITIVE PORTION
Complaint is hereby set aside, and the case remanded to the court of origin for further
proceedings.

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