Estate of Valeriano C. Bueno and Genoveva I. Bueno vs. Estate of Atty. Eduardo M. Peralta, Sr. and Luz B. Peralta

An oral contract involving real property that falls under the Statute of Frauds may be removed from its coverage and enforced when ratified by the parties’ failure to object to parol evidence, by judicial admissions, or by acceptance of benefits under the contract. The Statute of Frauds does not render the contract void or inexistent; it merely bars suit for performance or breach unless the defect is cured by ratification.

Spouses Valeriano C. Bueno, Sr. and Genoveva I. Bueno engaged Atty. Eduardo M. Peralta, Sr. in 1957 to handle their personal and business legal matters, and Atty. Peralta served as legal counsel and held executive positions in the Bueno family’s various companies for almost 26 years. The dispute concerns an oral arrangement under which the Bueno Spouses gave Atty. Peralta a parcel of real property at No. 3450 Magistrado Villamor Street, Lourdes Subdivision, Sta. Mesa, Manila, covered by TCT No. 47603, as partial consideration for professional services rendered. The property remained titled in Bueno’s name and was encumbered with financial institutions, and Atty. Peralta and his family occupied it from January 1962. The case turns on the Civil Code’s Statute of Frauds and the rules on ratification of unenforceable contracts.

In 1957, Spouses Valeriano C. Bueno, Sr. and Genoveva I. Bueno engaged Atty. Eduardo M. Peralta, Sr. to handle their personal and business legal matters. Atty. Peralta served as legal counsel and held several executive positions—President, Executive Vice-President, Secretary, Treasurer, or Director—in the Bueno Spouses’ various companies for almost 26 years. In 1960, the Bueno Spouses gave Atty. Peralta the subject property at No. 3450 Magistrado Villamor Street, Lourdes Subdivision, Sta. Mesa, Manila, covered by TCT No. 47603, as partial consideration for professional services rendered. Atty. Peralta, together with his wife and children, occupied the property beginning in January 1962. When Atty. Peralta requested the execution of a deed of conveyance, Bueno provided him only a photostatic copy of the title for reference because the property was encumbered, and prevailed upon him to pay the real property taxes. Relying on Bueno’s express and implied representations, Atty. Peralta and his family introduced several substantial improvements to the property over the years.

Atty. Peralta passed away on 27 December 1983. In 1990, Dr. Edgardo B. Peralta wrote the Bueno Spouses to ask for the proper deed of conveyance over the subject property. Instead of granting the request, the Bueno Spouses demanded the surrender of physical possession. Subsequent demands for the execution of the deed were repeatedly refused. Later, Bueno and his daughter-in-law intruded into the property, and Bueno attacked Edmundo Peralta, one of Atty. Peralta’s children, leading to the filing of a criminal complaint against Bueno.

Dr. Peralta, representing the Estate of Atty. Eduardo M. Peralta, Sr. and Luz B. Peralta, filed a complaint for specific performance and prayed for the execution of the appropriate deed of conveyance. In their Answer, the Bueno Spouses maintained that the claim was unenforceable under the Statute of Frauds; that Atty. Peralta never demanded that they sell the property to him after he and his family were allowed to use it; and that specific performance was impossible because the property was encumbered with financial institutions and could not be conveyed unless redeemed or the obligations paid. The complaint was later amended to implead the heirs of Genoveva Bueno, who died before trial began. Bueno himself died on 18 October 2000, and trial proceeded with the two estates as contending parties.

For the Estate of Peralta, Atty. Moises Nicdao testified in a deposition and in open court that in 1966, at Atty. Peralta’s residence, Bueno reiterated his generosity and that the property had been given to Atty. Peralta as partial consideration for legal services. According to Atty. Nicdao, Atty. Peralta had no definite salary from Bueno; the property could not be transferred immediately because it was indebted to Mitsubishi; Bueno promised that upon payment of the obligation, he would execute a deed of sale; and Atty. Peralta spent more than P200,000, and later more than P300,000, on renovations. Atty. Nicdao also testified that Atty. Peralta occupied the property continuously in the concept of an owner until his death, after which his heirs lived there. Edmundo Peralta testified that no condition was imposed by Bueno on the grant of the property; that Bueno admitted the property was really owned by the Peraltas and was willing to buy it for P3 million; and that Atty. Peralta rendered continuous legal service to the Buenos until his death in December 1983. Dr. Edgardo Peralta testified that the property had been verbally given to his parents, that the title was not given because it was part of the collateral to a mortgage by Bueno, and that they sent a letter dated January 1, 1996 to the bank asking it to honor the verbal agreement.

For the defense, Gaudencio Juan testified that Atty. Peralta resigned or severed his employment with the Bueno companies in 1975, as evidenced by a resignation letter dated May 19, 1975; that the property had been assigned to the Peraltas as additional benefits; and that Bueno had also promised him a lot in Antipolo, Rizal, which did not materialize. Domingo Lalaquit testified as the second defense witness. Valeriano Bueno, Jr. testified that his father was willing to give Atty. Peralta ownership of the property if Atty. Peralta rendered legal services to his father until retirement, but that Atty. Peralta resigned in 1974. On cross-examination, Valeriano Bueno, Jr. acknowledged that his father did not file any ejectment case or action to recover possession against Atty. Peralta and Luz B. Peralta during his lifetime, and that the Peraltas introduced improvements to the property without objection from his father. The RTC found that an agreement existed whereby Atty. Peralta would be awarded the property if he served as counsel until retirement, but that he failed to fulfill the condition because of a handwritten resignation letter dated 15 March 1975, giving the Bueno Spouses the right to rescind. The CA found instead that Atty. Peralta continued to render legal services after the supposed resignation, including as counsel on record in the 1980 Supreme Court case Bueno Industrial vs. R.C. Aquino Timber, and that he reached the retirement age of 60 in August 1980, thus fulfilling the condition. The Supreme Court relied on pre-trial admissions that Atty. Peralta possessed the property from January 1962 and rendered legal services from 1957 to 1975, and on the Estate of Bueno’s reiterated commitment in its petition and Reply.

• Reversible Error: Petitioner raised a lone assignment of error that the Court of Appeals committed reversible error of law and grave abuse of discretion amounting to lack or excess of jurisdiction in reversing the RTC’s dismissal of the complaint for specific performance and in ordering the Estate of Bueno to execute a deed of conveyance over TCT No. 47603 in favor of the Estate of Peralta.
• Statute of Frauds: Petitioner maintained that the Estate of Peralta’s claim was unenforceable under the Statute of Frauds because the alleged agreement to transfer real property was oral and not evidenced by a written note or memorandum.
• No Perfected Contract / No Demand: Petitioner argued that there was no perfected contract between Bueno and Atty. Peralta; Atty. Peralta never demanded that Bueno sell or give him the property after he and his family were allowed to use it.
• Impossibility of Specific Performance: Petitioner asserted that specific performance was impossible because the subject property was encumbered with financial institutions; Bueno could not convey it unless the property was redeemed or the obligations paid.
• Non-Fulfillment of Condition / Resignation: Petitioner argued that Atty. Peralta failed to fulfill the condition of serving until retirement, as shown by his resignation in 1974 or 1975.
• Prescription: Petitioner maintained that the action had prescribed under Article 1145 of the Civil Code, the RTC having held that the action was one for enforcement of an oral contract prescribing in six years from 1960.
• Condition Not Raised in Answer: Petitioner argued against the existence of the condition for transfer because it was never raised as an issue in the Answer.

• Specific Performance / Verbal Conveyance: Respondent claimed that the subject property had been verbally given to Atty. Peralta as partial consideration for legal services and sought execution of a deed of conveyance over TCT No. 47603.
• Facio Ut Des / Partial Performance: Respondent maintained, and the CA adopted, that the agreement was an innominate facio ut des contract, partially performed by both parties, thus removed from the Statute of Frauds.
• Continued Service Until Retirement: Respondent’s evidence, credited by the CA, showed that despite his resignation, Atty. Peralta continued to render legal services to Bueno and his companies until his retirement age, thereby fulfilling the condition.
• Imprescriptibility / Quieting of Title: Respondent maintained that the action was imprescriptible as one for quieting of title, and that laches did not bar the claim.
• Unjust Enrichment / Compensation: Respondent’s position, as accepted by the CA, included that Atty. Peralta’s services were not gratuitous and that the property was given as compensation, so the Estate of Bueno would be unjustly enriched if it retained the property.

• Statute of Frauds and Ratification: Whether the oral agreement between Bueno and Atty. Peralta for the transfer of the subject real property is unenforceable under the Statute of Frauds or was removed from its coverage by ratification through failure to object to parol evidence, judicial admissions, or acceptance of benefits.
• Existence and Terms of the Contract: Whether a perfected oral contract existed between Bueno and Atty. Peralta for the transfer of the subject property as partial consideration for legal services, and whether Atty. Peralta complied with the condition of serving until retirement.
• Prescription and Laches: Whether the action for specific performance had prescribed or was barred by laches.
• Specific Performance: Whether the Estate of Bueno may be ordered to execute a deed of conveyance over TCT No. 47603 in favor of the Estate of Peralta.

• Statute of Frauds and Ratification: No. The oral contract, though covered by the Statute of Frauds, was ratified under Articles 1403 and 1405 of the Civil Code by the Estate of Bueno’s failure to object to parol evidence, its judicial admissions, and its acceptance of benefits.
• Existence and Terms of the Contract: Yes. A perfected oral contract existed; Atty. Peralta complied with the condition because his resignation was ineffectual and he continued to render legal services until retirement.
• Prescription and Laches: No. The CA correctly held that the action had not prescribed and was not barred by laches; the right to demand conveyance arose upon retirement, and the action was also regarded as imprescriptible as one for quieting of title.
• Specific Performance: Yes. The Estate of Bueno was properly ordered to execute a deed of conveyance over TCT No. 47603; if it fails or refuses within 30 days from finality, the RTC shall issue an order divesting title and vesting it in the Estate of Peralta.

• Statute of Frauds and Ratification: Article 1403(2) of the Civil Code provides the general rule that certain contracts, including an agreement for the sale of real property or an interest therein, are unenforceable unless ratified. The lack of writing does not render the agreement void or inexistent; it merely bars suit for performance or breach, and the defect can be cured by acknowledgment or ratification. Heirs of Alido vs. Campano reiterated that an unenforceable contract under Article 1403(2) is not necessarily void since it can be ratified by failure to object to the presentation of oral evidence to prove the contract itself, or by acceptance of benefits, and the contract can be established by the express or implied conduct of the parties. The Statute of Frauds applies only to executory contracts, not to those that have been fully or partially performed. Both the trial court and the CA found that there was a contract to transfer the property from Bueno to Atty. Peralta. The trial court omitted Bueno’s acts of ratification from 1960 and limited its discussion to the alleged lack of personal knowledge of the verbal transaction. The CA viewed Bueno’s acts of ratification through partial performance and placed significant value on Atty. Peralta’s legal services. The oral contract should therefore be excluded from the application of the Statute of Frauds, and the exception in the first sentence of Article 1403, in relation to Article 1405, should apply. Ratification is consent belatedly given through express or implied acts deemed a confirmation of the agreement or a waiver of the right to impugn the unauthorized act. The Estate of Bueno’s petition and Reply reiterated a confirmation of Bueno’s commitment to transfer the property to Atty. Peralta, and during pre-trial it admitted Atty. Peralta’s physical possession from January 1962 up to the present and his rendition of legal services from 1957 to 1975. Under Section 4, Rule 129 of the Revised Rules on Evidence, judicial admissions do not require proof, and an adoptive admission may occur when a party expressly agrees to or concurs in another’s statement, hears and repeats it, accepts or builds upon it, or reads and signs it. Republic vs. Kenrick Development Corporation was applied. The Estate of Bueno’s remarks were also negative pregnant statements, and estoppel under Article 1431 of the Civil Code applied. The Court could disregard all evidence contrary to or inconsistent with the judicial admissions. Ratification by failure to object was also present: Atty. Nicdao’s deposition and testimony were offered to prove that the property was given as partial consideration for legal services, without objection from the Estate of Bueno. Edmundo Peralta’s testimony was objected to as hearsay, but the statement of Bueno was uttered in the presence of Atty. Nicdao, and there is no prohibition against a witness testifying to what he heard. Although counsel for the Estate of Bueno objected during Dr. Peralta’s testimony on parol evidence, that objection was effectively waived when the Estate of Bueno introduced the testimony of Valeriano Bueno, Jr., which tended to prove the oral contract. Valeriano Bueno, Jr. testified that his father was willing to give Atty. Peralta ownership of the property if Atty. Peralta rendered legal services until retirement, and on cross-examination he acknowledged that there was an agreement subject to that condition and that his father did not file any ejectment or recovery case. Personal knowledge of a judicial admission is not required, and competence of a witness is determined at the time of testimony. The Estate of Bueno’s Answer also amounted to ratification when it stated that the only reason for Bueno’s failure to convey the property was the encumbrance on the property, and it failed to allege that Atty. Peralta’s service until retirement was a condition of the contract. Conlu vs. Araneta held that a contract of sale of real property that does not comply with the required form is not automatically invalidated, and if the parties fail to object to the admissibility of oral evidence during trial, the contract is as binding as if reduced to writing. Abrenica vs. Gonda explained that a protest or objection against the admission of evidence must be made at the proper time, and failure to do so waives the objection; cross-examination is a waiver of the defense of the Statute of Frauds. Limketkai Sons Milling, Inc. vs. Court of Appeals reiterated that cross-examination on the contract is deemed a waiver of the Statute of Frauds defense. Ratification by acceptance of benefits was likewise present: since 1962, Bueno and Atty. Peralta mutually benefited from the oral contract, with Atty. Peralta receiving the house and lot in exchange for legal services. The existence of a perfected contract of sale can be based on the conduct of the parties, as held in Maharlika Publishing Corporation vs. Tagle. As to the alleged resignation, the records showed it was ineffectual or not a true resignation because Atty. Peralta continued to render legal services to Bueno and his companies; even assuming he resigned, he could be considered to have resumed his position and engaged as counsel until the mandatory retirement age and beyond, thus complying with the condition. Bueno should not be allowed to repudiate his own acts and representations to the prejudice of Atty. Peralta and his family who relied upon them. It did not matter that neither the receipt for the consideration nor the sale itself was in writing. By invoking the unenforceability of the arrangement under the Statute of Frauds, Bueno and his heirs acknowledged the existence of a contract. Previous, simultaneous, and subsequent acts of the parties are properly cognizable indicia of their true intention. Bueno’s acts allowing Atty. Peralta and his family to stay on the property, introduce substantial improvements, and pay real property taxes, coupled with the absence of any action to recover the property, showed the intention of Bueno to cede ownership over the same in favor of Atty. Peralta. The Court also noted the testimony of Gaudencio Juan that Bueno had the propensity to promise real property to his employees. The agreement arose not only to mutually benefit each other—legal services in exchange for real property—but was likewise borne out of kindness and generosity. The Court must not countenance the acts of Bueno and his heirs who, by their silence, delay, and inaction, knowingly induced Atty. Peralta and his family to spend time, effort, and expense in paying real property tax and making improvements since 1962 only to deny the claim of title when the relationship turned sour. The oral contract between Bueno and Atty. Peralta was ratified by both parties and must be enforced and upheld, in harmony with the principle that courts of equity will not allow the Statute of Frauds to be used as an instrument of fraud, and in recognition of the valuable legal services already rendered by Atty. Peralta.
• Existence and Terms of the Contract: Both the trial court and the CA found that there was a contract to transfer the property from Bueno to Atty. Peralta. The trial court held that the subject property was the subject of a commitment between the Buenos and Atty. Peralta whereby the latter would be awarded the property if he could serve as counsel for the Buenos and their companies until retirement. The CA found that the agreement and perfection of the contract were evident from the subsequent acts of both parties: Bueno’s relinquishing possession of the property to Atty. Peralta and Atty. Peralta’s continued rendition of services to Bueno and his companies. The Court relied on the Estate of Bueno’s own recital of facts in the petition, the pre-trial admissions, and Valeriano Bueno, Jr.’s testimony confirming the existence of the contract. As to the condition of serving until retirement, the CA found that Atty. Peralta continued to work for the Buenos even after the supposed resignation, including as counsel on record in the 1980 Supreme Court case Bueno Industrial vs. R.C. Aquino Timber, and that he reached the retirement age of 60 in August 1980. The Court held that the resignation was ineffectual or not a true resignation because he continued to render legal services, and even assuming he resigned, he resumed his position and engaged as counsel until the mandatory retirement age and beyond. He therefore complied with the condition.
• Prescription and Laches: The CA ruled that the action had not prescribed. The six-year period did not commence in 1960 because Atty. Peralta had not wholly perfected his right to demand the execution of the documents to transfer title to the subject property to him, as he still had to serve Bueno until his retirement. It was only upon Atty. Peralta’s retirement that ownership automatically vested upon him. The CA also subscribed to the Estate of Peralta’s view that the case was imprescriptible as an action for quieting of title. The CA did not find the Estate of Peralta guilty of laches. The Supreme Court affirmed the CA on these points.
• Specific Performance: Because the oral contract was ratified and Atty. Peralta complied with the condition, the Estate of Bueno was ordered to execute a deed of conveyance over TCT No. 47603 in favor of the estates of Eduardo M. Peralta, Sr. and Luz B. Peralta. Should the Estate of Bueno fail or refuse to execute the deed within 30 days from finality of the decision, Branch 37 of the RTC of Manila was ordered to issue an order divesting the Estate of Bueno’s title to the property and vesting it in favor of the Peralta estates, which shall have the force and effect of a conveyance executed in due form of law. The Supreme Court affirmed.

• Statute of Frauds — Under Article 1403(2) of the Civil Code, certain contracts, including an agreement for the sale of real property or an interest therein, are unenforceable unless ratified. The lack of writing does not make the agreement void or inexistent; it merely bars suit for performance or breach. The defect can be cured by acknowledgment or ratification. The Statute of Frauds applies only to executory contracts, not to contracts that have been fully or partially performed. In this case, the oral contract to transfer the subject real property was covered by the Statute of Frauds but was removed from its coverage because it had been partially performed and ratified.
• Ratification of Unenforceable Contracts — Article 1405 of the Civil Code provides that contracts infringing the Statute of Frauds are ratified by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefits under them. Ratification may be express or tacit. In this case, the Estate of Bueno failed to object to the presentation of oral evidence proving the oral contract, and it accepted the benefits of Atty. Peralta’s legal services. The contract was therefore ratified and enforceable.
• Part Performance Exception — The Statute of Frauds does not apply to contracts that have been totally or partially performed. Partial execution is enough to bar the application of the statute because the exclusion of parol evidence would promote fraud or bad faith by allowing a party to keep the benefits derived from the transaction while evading its obligations. In this case, Bueno relinquished possession of the property to Atty. Peralta, who introduced substantial improvements and paid real property taxes, while Atty. Peralta rendered legal services to Bueno and his companies.
• Judicial Admissions — Under Section 4, Rule 129 of the Revised Rules on Evidence, an admission, verbal or written, made by a party in the course of the proceedings in the same case does not require proof. It may be made in the pleadings, in the course of trial by verbal or written manifestations or stipulations, or in other stages of judicial proceedings. In this case, the Estate of Bueno’s petition and Reply reiterated a confirmation of Bueno’s commitment to transfer the property to Atty. Peralta, and its pre-trial admissions confirmed Atty. Peralta’s possession and rendition of legal services. These were judicial admissions binding on the Estate of Bueno.
• Adoptive Admission — An adoptive admission is a party’s reaction to a statement or action by another person when it is reasonable to treat the party’s reaction as an admission of something stated or implied by the other person. It may occur when a party expressly agrees to or concurs in an oral statement, hears a statement and later repeats it, utters an acceptance or builds upon another’s assertion, replies by way of rebuttal to some points but ignores others, or reads and signs a written statement made by another. In this case, the Estate of Bueno adopted the statements of its counsel and witnesses confirming the existence of the contract.
• Negative Pregnant — A negative pregnant is a form of denial that is at the same time an affirmative assertion favorable to the opposing party; it is a denial pregnant with an admission of the substantial facts in the pleading responded to. In this case, the Estate of Bueno’s remarks during the various stages of the suit were deemed negative pregnant statements and thus admissions of the averments directed at it.
• Estoppel by Admission or Representation — Under Article 1431 of the Civil Code, through estoppel an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon. In this case, the Estate of Bueno was estopped from denying the oral contract after having allowed Atty. Peralta and his family to possess the property, introduce improvements, and pay real property taxes for decades.
• Facio Ut Des — A facio ut des contract is an innominate contract meaning “I do and you give.” One party renders a service in exchange for a thing. The CA characterized the agreement between Bueno and Atty. Peralta as a facio ut des contract: Atty. Peralta rendered legal services, and Bueno was to give the subject property. Perez vs. Pomar was cited as upholding a verbal facio ut des contract because one party had already rendered the service.
• Unjust Enrichment — Article 22 of the Civil Code provides that every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. The CA invoked this rule in holding that Atty. Peralta’s services were not gratuitously rendered and should be properly remunerated.
• Equity Will Not Allow the Statute of Frauds as an Instrument of Fraud — Courts of equity will not allow the Statute of Frauds to be used as an instrument of fraud. In this case, the Court held that enforcing the Statute of Frauds to allow the Estate of Bueno to retain the benefits of Atty. Peralta’s legal services while denying the agreed conveyance would perpetuate fraud.

• "Note that Art. 1403(2) speaks of a general rule, but recognizes ratification as an exception." — This passage states the core statutory framework: the Statute of Frauds renders certain contracts unenforceable, but ratification is an express exception that removes the defect.
• "With what transpired between the parties, the oral contract between Bueno and Atty. Peralta should be excluded from the application of the Statute of Frauds. The application of the exception in the first sentence of Article 1403, in relation to Article 1405 of the Civil Code should apply instead." — This is the ratio decidendi on the Statute of Frauds: the oral contract was covered but was removed from the statute’s coverage through ratification.
• "The existence of a perfected contract of sale can be based on the conduct of the parties." — This passage states the evidentiary principle that a contract may be established by the parties’ actions, which the Court applied to find a perfected oral contract.
• "However, the oral contract between Bueno and Atty. Peralta is ratified by both parties and thus must be enforced and upheld. This is in harmony with the principle that courts of equity will not allow the Statute of Frauds to be used as an instrument of fraud." — This is the Court’s final holding on enforceability, combining ratification with the equitable principle against using the Statute of Frauds to perpetrate fraud.

• Heirs of Alido vs. Campano, G.R. No. 226065, July 29, 2019 — Followed; reiterated that an unenforceable contract under Article 1403(2) is not necessarily void and can be ratified by failure to object to oral evidence or by acceptance of benefits, and that the Statute of Frauds is limited to executory contracts.
• Conlu vs. Araneta, G.R. No. 4508, March 4, 1910, 15 Phil. 387 — Followed; held that a contract of sale of real property that does not comply with the required form is not automatically invalidated, and if the parties fail to object to oral evidence during trial, the contract is as binding as if reduced to writing.
• Abrenica vs. Gonda, G.R. No. 10100, August 15, 1916, 34 Phil. 739 — Followed; held that a protest or objection against the admission of evidence must be made at the proper time, and failure to do so waives the objection; cross-examination is a waiver of the defense of the Statute of Frauds.
• Limketkai Sons Milling, Inc. vs. Court of Appeals, G.R. No. 118509, December 1, 1995, 321 Phil. 105 — Followed; reiterated that cross-examination on the contract is deemed a waiver of the defense of the Statute of Frauds.
• Perez vs. Pomar, G.R. No. 1299, November 16, 1903, 2 Phil. 682 — Cited by the CA; upheld a verbal facio ut des contract because one party had already rendered the service.
• Republic vs. Kenrick Development Corporation, G.R. No. 149576, August 8, 2006, 529 Phil. 876 — Applied; explained the principle of adoptive admission, where a party may voluntarily adopt or ratify another’s statement.
• Maharlika Publishing Corporation vs. Tagle, G.R. No. L-65594, July 9, 1986, 226 Phil. 456 — Cited; held that appropriate conduct by the parties may be sufficient to establish an agreement.
• Carbonnel vs. Poncio, G.R. No. L-11231, May 12, 1958, 103 Phil. 655 — Cited; held that courts of equity will not allow the Statute of Frauds to be used as an instrument of fraud.
• Republic vs. Menzi, G.R. No. 183446, November 13, 2012, 698 Phil. 495 — Cited; held that judicial admissions are binding and conclusive, and contrary evidence should be ignored.
• University of Mindanao, Inc. vs. Bangko Sentral ng Pilipinas, G.R. Nos. 194964-65, January 11, 2016, 776 Phil. 401 — Cited; defined ratification as consent belatedly given through express or implied acts deemed a confirmation of the agreement or a waiver of the right to impugn the unauthorized act.

• Article 1403(2), Civil Code — The Statute of Frauds; provides that certain contracts, including an agreement for the sale of real property or an interest therein, are unenforceable unless ratified. The lack of writing does not render the contract void or inexistent; it merely bars suit for performance or breach. Applied: the oral contract to transfer the subject real property was covered but was ratified.
• Article 1405, Civil Code — Contracts infringing the Statute of Frauds are ratified by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefits under them. Applied: the Estate of Bueno failed to object to parol evidence and accepted the benefits of Atty. Peralta’s legal services.
• Article 1392, Civil Code — Ratification extinguishes the action to annul a voidable contract. Cited to bolster the rule on ratification under Article 1405.
• Article 1393, Civil Code — Ratification may be effected expressly or tacitly; there is tacit ratification if, with knowledge of the reason rendering the contract voidable and such reason having ceased, the person with the right to invoke it executes an act that necessarily implies an intention to waive his right. Cited to explain ratification.
• Article 1431, Civil Code — Through estoppel, an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon. Applied: the Estate of Bueno was estopped from denying the oral contract.
• Article 22, Civil Code — Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. The CA invoked this rule in holding that Atty. Peralta’s services were not gratuitous and should be remunerated.
• Article 1145, Civil Code — Provides for a six-year prescription for actions based on an oral contract. The RTC applied this provision to hold that the action had prescribed; the CA rejected this and held that the action had not prescribed.
• Article 1358, Civil Code — Requires certain contracts to appear in a public document for convenience, but failure to observe the proper form does not render the acts or contracts invalid. Cited in the discussion of the form of contracts and the objection to parol evidence.
• Rule 129, Section 4, Revised Rules on Evidence — An admission, verbal or written, made by a party in the course of the proceedings in the same case does not require proof. It may be made in the pleadings, in the course of trial, or in other stages of judicial proceedings. Applied: the Estate of Bueno’s petition, Reply, and pre-trial admissions were judicial admissions.

Gesmundo, J.; Inting, J.; and Gaerlan, J., concur. Inting, J., was designated as an additional member per raffle dated 22 January 2020. No separate concurring opinion is noted in the text.

• Justice Leonen — Dissented. The dissent maintained that before partial execution of a contract of sale may remove an oral contract from the coverage of the Statute of Frauds, the terms of the contract must be clearly established to sufficiently show that the acts alleged as partial performance were done solely pursuant to the alleged oral contract. The terms of an oral contract must have the degree of certainty required of a written contract; the parol agreement must be certain, definite, clear, unambiguous, and unequivocal in its terms, and clearly established by the evidence. The dissent argued that the records did not convincingly attribute Atty. Peralta’s legal services to an agreement that he would serve until retirement in exchange for the property. Atty. Nicdao testified that Bueno gave the property in 1960 and reiterated in 1966 that it had already been completely given, without condition for Atty. Peralta to perform any additional obligation in return; the only condition mentioned was that Bueno would execute a deed of sale once the loan on the property had been paid. Atty. Nicdao also testified that the property was given out of kindness and generosity, and that Peralta had no reciprocal obligation to transfer the real property; thus, the contract testified to was a donation, which must comply with the requirements for validity of donations of real property. The dissent further argued that the majority’s reliance on ratification through failure to object was flawed because the terms allegedly ratified were not the contract accepted by the majority or the CA. Valeriano Bueno, Jr.’s testimony was too vague; he expressly said he had no knowledge that the property had been given as partial consideration for legal services and only learned that his father was willing to give the property if Atty. Peralta served until retirement. The judicial admissions relied upon by the majority did not establish the clear terms of the oral contract. The dissent also argued that reliance on Heirs of Alido vs. Campano and Ortega vs. Leonardo was improper because Ortega did not conclusively determine that an oral contract had been entered into and partially performed; it only allowed trial to determine whether the contract existed and had been partially performed. The better rule is Babao vs. Perez, which requires the parol evidence to be certain, definite, clear, unambiguous, and unequivocal. Since the terms of the alleged oral contract were unclear and the agreement was not reduced to writing, the dissent voted to reverse and set aside the CA decision and resolution and to reinstate the RTC decision.