BABAO v.

PEREZ

FACTS:
Celestina Perez was the owner of a parcel of land. In 1924, when Santiago Babao
married her niece Maria Cleofe, Babao and Celestina Perez entered into a verbal
agreement where Santiago bound himself to improve the land by levelling and
clearing all forest trees and planting coconuts, rice, corn and other crops and act as
the administrator thereof during the lifetime of Perez.
In consideration of which, Perez bound herself to convey to Babao or his wife ½ of
the land together with all of its improvements upon her death. In violation of the
said verbal agreement, Perez sold, a few days before she died, 127 ½ hectares of the
land depriving Babao of its possession and administration. When Santiago Babao
died in 1948, Bienvenido Babao was appointed the judicial administrator of his
estate. He filed a case for the conveyance of the ½ portion of the land and for the
annulment of the sales of the portion having been made fictitiously and in the
alternative, for judgment in favor of Babao for P47,000, the useful and necessary
expenses he incurred in improving the land. While the case was pending in the
lower court, counsel for Perez filed a motion to dismiss on the grounds that the
alleged verbal agreement was unenforceable under the Statute of Frauds. However,
the trial court denied the motion because it appeared that Babao fully complied with
his part of the oral contract. The court held that the Statute of Frauds cannot be
invoked because the performance by one party of his part of the contract takes the
case out of the statute.

GENERAL ISSUE:
Whether or not the verbal agreement is unenforceable.

CONTROLLING ISSUE:
Whether or not the verbal agreement falls within the prohibition of the Statute of
Frauds, and is therefore, unenforceable.

RULING: YES
Contracts which by their terms are not to be performed within one year, may be
taken out of the statute through the performance by one party. All that is required in
such case is complete performance within one year by one party, however many
years may have to elapse before the agreement is performed by the other party. But
nothing less than full performance by one part will suffice and if anything remains to
be done after the expiration of the year besides mere payment of money, the statute
will apply.
It is therefore not correct to state that Babao has fully complied with his part within
the year from the alleged contract.

DISPOSITION:
Wherefore, the decision appealed from is reversed, and the case is dismissed, with
costs against appellee.