Facts
Marcos Batara owned a one-hectare parcel of land in Kaliwanagan, San Jose City, Nueva Ecija. He died on February 14, 1974, leaving behind his two children, Noblesa Batara-Sapad and Ernesto C. Batara. At the time of his death, Noblesa was nine years old and was taken in by Marcos’s brother, Marcelo Batara, while Ernesto, then 13, was sent to Manila to live with another uncle. Both children were unaware of their father’s ownership of the land.
In 2007, Noblesa received notice from the City Treasurer of San Jose to settle real property tax arrears on the land dating back to 1983. Upon investigation, she discovered that the property was being occupied by her cousin, Benedicto Batara Ocampo. Benedicto claimed that he had purchased the land from Marcos through Marcelo, but he could not present any written proof of the sale.
Noblesa asked Benedicto either to pay her the purchase price or sell the land to third parties and divide the proceeds. Although Benedicto allegedly agreed to pay, he failed to do so. Barangay conciliation failed, and in 2011, Noblesa issued a demand to vacate, which Benedicto ignored. In 2013, Noblesa filed an action for recovery of possession against Benedicto and his wife, Daisy Garcia-Ocampo.
In defense, Benedicto and Daisy asserted that they purchased the property from Marcos for PHP 40,000.00, payable in installments from 1972 to 1985. The first installment of PHP 3,000.00 was allegedly paid to Marcos, while subsequent payments after Marcos’s death were made to Marcelo. Benedicto claimed that one payment was witnessed by Ernesto. Daisy took possession of the property in 1982 and cultivated it. Benedicto admitted there was no written document evidencing the sale due to the deaths of Marcos and Marcelo, but he presented the owner’s copy of the title and tax receipts showing payment of real property taxes since 1982.
On February 20, 2018, the city court ruled in favor of Noblesa and Ernesto, ordering Benedicto and Daisy to vacate the property and surrender the owner’s copy of the title. The court held that the heirs had a better right to possession as successors of the registered owner, that registered land cannot be acquired by adverse possession, and that the alleged sale was ineffective for being undocumented and unregistered, with no proof that Marcelo was authorized to receive payments or convey the property.
ISSUE: Can a land sale made through a verbal, unwritten agreement be considered valid?
Ruling
Yes.
Articles 1358 and 1403(2)(e) of the Civil Code ordain inter alia that contracts for the sale of real property must be made in a public document and subscribed by the party charged or his agent; otherwise they cannot be enforced by action, and evidence thereof “cannot be received without the writing, or a secondary evidence of its contents.” This requirement, however, does not affect the validity of such contracts, because the Civil Code “does not require accomplishment of acts or contracts in a public instrument to validate the act or contract but only to insure its efficacy so that after the existence of the act or contract has been admitted, the party bound may be compelled to execute the document.”
Furthermore, the scope of Article 1403(2) is limited to the enforcement of an unwritten contract. It does not apply to contracts that have been partially or totally implemented; and “[t]aking possession of the property and making improvements thereon serve as indicators that an oral sale of a piece of land had already been executed.” Thus, buyers in possession may invoke an unwritten contract of sale as the legal basis of their possession.
Under Articles 1477 and 1496 of the Civil Code, ownership of the thing sold is vested in the buyer upon delivery. Article 1582 of the same Code obligates the buyer to accept delivery and pay the price of the thing sold. Benedicto and Daisy’s testimonies, coupled with the undisputed fact of their possession, clearly show that the disputed lot had been delivered to them.
However, the remaining balance was paid by Benedicto to Marcelo, who had no proven authority to receive payment on behalf of Marcos or his heirs. Thus, such payments are ineffective. Benedicto should have paid Marcos’s heirs upon their reaching majority but failed to do so and concealed the transaction. Consequently, the unpaid balance remains due, and Benedicto and Daisy are obliged to pay it to Noblesa and Ernesto.