161.

ORDUÑA v FUENTEBELLA

Topic:
Statute of Frauds is inapplicable to partially executed contracts

Facts:
Orduña purchased a residential lot from Gabriel Sr. payable in installments but no deed of sale
was executed. The installments were paid to Gabriel Jr. after the death of his father.
Improvements were thereafter introduced by petitioner while the latter even paid its real property
tax since 1979. Unknown to Orduña, the property has been subject to further alienations until the
same was ceded to respondent, Fuentebella. Orduña, after being demanded by Fuentebella to
vacate the disputed land, then filed a Complaint for Annulment of Sale, Title and Reconveyance
with Damages with a prayer to acquire ownership over the subject lot upon payment of their
remaining balance. The RTC dismissed the petition because the verbal sale between Gabriel Sr.
and Orduña was unenforceable under the Statute of Frauds. This was later affirmed by the Court
of Appeals.

Issue:
Whether the sale of the subject lot by Gabriel Sr to Orduña is unenforceable under the Statute of
Frauds

Ruling:
No. It is a well-settled rule that the Statute of Frauds as expressed in Article 1403, par. (2), of the
Civil Code is applicable only to purely executory contracts and not to contracts which have already
been executed either totally or partially. Here, the verbal contract of sale has been partially
executed through the partial payments made by Orduña duly received by both Gabriel Jr. and his
father.
The purpose of the Statute of Frauds is prevention fraud and perjury in the enforcement of
obligations depending for their evidence on the unassisted memory of witnesses, by requiring
some contracts and transactions to be evidenced by a writing signed by the party to be charged.
Since there is already ratification of the verbal contract through the acceptance of benefits through
the partial payments, it is thus withdrawn from the purview of the Statute of Frauds.