1. Harry Ives SHOEMAKER v. LA TONDEA, INC.
G.R. No. 45667 | 9 May 1939 6. Shoemaker filed a complaint. The Court granted the demurrer to evidence of
FACTS
1. La Tondea, Inc., entered into a written contract with Harry Shoemaker
whereby Tondea employed Shoemaker as technical manager of its factories for
a period of 5 years (from 1 January 1929).
2. The written contract was with express understanding and agreement that
Shoemaker would receive:
Minimum compensation for his services: P1,500 monthly or P18,000
per annum
That during 1933, the last year of the contract, Tondea would grant to
him a leave or vacation of six months with full compensation or salary
during such leave or vacation.
3. Sometime in March 1933, Tondea made an urgent request to Shoemaker for
the modification of the written contract, upon a mutual understanding and
agreement between the parties, in the ff manner:
That a temporary deduction of P200 would be made each month from
the salary of Shoemaker (from 1 March 1933 until its termination on
31 December 1933).
o That said deduction would be paid to him should the
conditions of the business of Tondea improve, or upon the
termination of his contrat of employment.
That Shoemaker would not take his 6 months leave or vacation during
the year 1933 with full pay --
o Because of the bad condition of the business of Tondea, and
the need for Shoemakers continued services, to discharge
his regular duties and to assume and perform the principal
duties of A.B. Powell (assistant general manager of the
corporation).
4. Tondea actually deducted P200 from Shoemakers salary (total: P2,000),
and obtained all the benefits under said contract as modified. Thus, upon the
termination of said contract, Shoemaker requested Tondea to pay him the
amount deducted and to grant him the leave or vacation of 6 months with full
pay.
5. Tondea, however, has not paid and refuses to pay Shoemaker, did not grant
him vacation leave with full pay, and did not give him his compensation of
P9,000, in accordance with the terms and conditions of the contract.
Tondea on the ground that the facts alleged in Shoemakers amended
complaint do not constitute a cause of action because Shoemakers action
rests on an oral contract which is unenforceable.
ISSUE
W/N the oral contract between the parties here is unenforceable.
HELD
No. The SC ruled in favor of Shoemaker.
General rule: The agreement that by its terms is not to be performed within a
year from the making thereof is unenforceable by action, and evidence thereof
cannot be received without the writing or secondary eveidence of its contents.
Exception: Contracts which by their terms are not to be performed within one
year may be taken out of the statute through complete performance by one party
thereto.
-> Statute of Frauds applies only to agreements not to be performed on either
side within a year from the making thereof. Agreements to be fully performed
on one side within the year are taken out of the operation of the statute.
-> In this case, Tondea hypothetically admitted that Shoemaker complied,
within the year, with all his obligations under the modified oral contract. Also, it
is hypothetically admitted that Tondea benefited from the fulfillment of said
obligations by Shoemaker. Hence, Tondea cannot, in equity and justice, avoid
its own obligations assumed under the modified oral contract.
DOCTRINE: Art. 1403
In an oral contract which, by its terms, is not to be performed within one year
from its execution, the other party cannot avoid fulfillment of his obligation by
invoking the statute of frauds when one of the parties has complied with his
obligation within the year.