Gallemit vs. Tabiliran

An oral contract for the joint purchase and sale of real estate is valid and binding between the parties even without a written instrument, provided the essential conditions for validity exist and the contract is proven by testimony to which no objection was made; a co-owner of property held pro indiviso may demand partition at any time, and the joint acquisition of land for equal division constitutes co-ownership rather than partnership.

Catalino Gallemit and Ceferino Tabiliran were residents of the municipality of Dapitan, Moro Province. In or about January 1904, they mutually agreed to purchase a parcel of land from its original owner, Luis Ganong, for P44, on the condition that each would pay one-half of the price and the property would be divided equally between them. At the relevant time, Tabiliran served as the justice of the peace of the pueblo, a position that enabled him to obstruct the execution of the deed of sale. The dispute arose under the Civil Code provisions on co-ownership (Articles 392 and 400) and the partition proceedings prescribed by sections 181 to 196 of the Code of Civil Procedure.

Catalino Gallemit and Ceferino Tabiliran were residents of the municipality of Dapitan, Moro Province. In or about January 1904, they mutually agreed to acquire by purchase a parcel of land situated in Tangian, barrio of Dohinob, municipality of Dapitan, from its original owner, Luis Ganong, for the sum of P44. The land was bounded on the north and east by the Tangian river, on the south and west by government forests, contained approximately 19.968 square meters, and was planted with 200 abaca plants. It was stipulated between the purchasers that each would pay one-half of the price, or P22, and that the property would be divided equally between them.

The vendor, Luis Ganong, testified under oath that Gallemit paid him P22, his half of the price, and that four months later Tabiliran paid his share. However, because Tabiliran, who was then the justice of the peace of the pueblo, refused to comply with the stipulation, the deed of sale was never executed and no partition of the land was effected. Instead of delivering to Gallemit the share corresponding to the latter's payment, Tabiliran retained the entire land for himself, in violation of the agreed terms, notwithstanding that he had paid only one-half of the purchase price.

Gallemit repeatedly demanded that Tabiliran divide the land. Tabiliran promised on several occasions to make the partition but ultimately refused without good reason and continued to refuse. Without Gallemit's knowledge or consent, Tabiliran gathered the abaca crops of 1904, 1905, and 1906 from the land, extracting approximately 12 arrobas of hemp per crop, and was the sole beneficiary of the fiber obtained. Relying on Tabiliran's promises to divide the land, Gallemit brought 1,500 seeds to Tabiliran to be planted in the portion that would have fallen to Gallemit in the division, but all the seeds died as an indirect result of the partition never being made. Since 1904, Gallemit alone had been paying the taxes on the land without any contribution from Tabiliran.

On March 10, 1908, Gallemit filed a written complaint, twice amended with the court's permission, seeking partition of the land through commissioners appointed for the purpose, damages of P50 for the value of the lost seeds, restoration of one-half of the abaca harvested or its value, and costs. Tabiliran denied each and all of the facts alleged in the complaint and asked to be absolved with costs against the plaintiff. After hearing and the production of oral evidence by both parties, the Court of First Instance, presided by Judge Ramon Avanceña, absolved the defendant with costs against the plaintiff. The trial record, however, contained unobjected testimony from the vendor proving that both purchasers had jointly bought the land and that the deed of sale was not executed due to Tabiliran's opposition, apparently to retain the entire property despite paying only half its price.

• Right to Partition: Gallemit maintained that as a co-owner of the land held pro indiviso, he was entitled to demand its division, the defendant having refused without good reason to effect the partition repeatedly promised.
• Damages for Lost Seeds: Gallemit argued that the P50 value of the 1,500 seeds that died should be indemnified, the loss being an indirect result of the defendant's failure to make the promised partition.
• Restoration of Abaca Harvest: Gallemit claimed restoration of one-half of the abaca crops gathered exclusively by the defendant from the jointly owned land, or the value thereof, for the years 1904, 1905, and 1906.
• Error of the Lower Court: Gallemit moved for annulment of the judgment and new trial on the ground that the lower court's findings were contrary to law.

• General Denial: Tabiliran denied each and all of the facts alleged in each and all of the paragraphs of the amended complaint and sought absolution with costs against the plaintiff.
• Absence of Written Instrument: The defendant's defense appears to have rested on the plaintiff's failure to present any written document proving the joint purchase, invoking the provision of paragraph 5, section 335 of the Code of Civil Procedure requiring contracts for the sale of real estate to be in writing.

• Validity of Oral Contract: Whether an oral contract for the joint purchase of real estate is valid and enforceable between the parties despite the absence of a written instrument under section 335 of the Code of Civil Procedure.
• Right to Partition: Whether the plaintiff, as a co-owner of land held pro indiviso, is entitled to demand partition of the property.
• Nature of the Relationship: Whether the relationship between the parties constitutes a partnership under Article 1665 of the Civil Code or a mere co-ownership.
• Damages: Whether the defendant is liable for damages for the loss of the plaintiff's seeds and for the value of the abaca crops exclusively harvested.

• Validity of Oral Contract: Yes. An oral contract for the sale of real estate is valid and binding between the parties when proven by unobjected testimony, the failure to object constituting a waiver of the Statute of Frauds provisions of section 335 of the Code of Civil Procedure.
• Right to Partition: Yes. As co-owners of undivided land, each party may demand partition at any time pursuant to Articles 392 and 400 of the Civil Code and sections 181 to 196 of the Code of Civil Procedure.
• Nature of the Relationship: No partnership was formed. The sole transaction was the joint acquisition of land for equal division, constituting co-ownership rather than a partnership under Article 1665 of the Civil Code.
• Damages: Yes for the lost seeds, with P50 indemnity awarded; No for the abaca crops, due to lack of proof as to the amount and value of the fiber gathered.

• Validity of Oral Contract: The plaintiff's failure to present a written instrument did not defeat the action for partition. The trial record disclosed unobjected testimony from the vendor, Luis Ganong, proving that the purchase was actually made by both litigants. The deed of sale was never executed because of the defendant's opposition, with the evident purpose of keeping the entire land despite paying only half its price. Relying on Conlu et al. vs. Araneta and Guanko (15 Phil. Rep., 387), which followed Thunga Chui vs. Que Bentec (1 Phil. Rep., 561) and Couto vs. Cortes (8 Phil. Rep., 459), the Court held that an oral contract for the sale of real estate is binding between the parties when the oral evidence is admitted without objection. A failure to except to evidence that does not conform with the statute constitutes a waiver of its provisions. Article 1278 of the Civil Code provides that contracts are binding whatever their form, provided the essential conditions for validity under Article 1261 exist. The proven verbal contract was therefore valid and enforceable.

• Right to Partition: Article 392 of the Civil Code defines community of property as arising when the ownership of a thing belongs to different persons undividedly. Article 400 provides that no co-owner shall be obliged to remain a party to the community and that each may ask at any time for the division of the thing owned in common. Because the plaintiff and defendant jointly purchased the land and each paid one-half of the price, they were co-owners of the undivided property. The present possessor had no right to deny the plaintiff's claim on grounds unsupported by proof. Partition was therefore proper under sections 181 to 196 of the Code of Civil Procedure.

• Nature of the Relationship: No contract of partnership within the meaning of Article 1665 of the Civil Code was formed between the parties. The sole transaction was the joint acquisition of land by mutual agreement, under the condition that each pay one-half of the price and the property be divided equally. The land was acquired not for the purpose of undertaking any business or cultivating it in partnership, but solely to divide it between the two purchasers. The relationship was therefore one of co-ownership, and proof of a partnership contract was unnecessary to maintain an action for partition.

• Damages: The plaintiff suffered damage through the loss of 1,500 seeds that could not be planted in his portion of the land on account of the defendant's refusal to accede to the division. Indemnity of P50, the value of the lost seeds, was just and proper, the loss having been caused by the defendant's fault. As to the abaca harvested exclusively by the defendant, the amount and value of the fiber gathered were not shown in the trial record, and there were no means available in law to make a proper determination. The claim for restoration of one-half of the abaca or its value was accordingly denied.

• Validity of Oral Contracts for Real Estate Sales — Contracts are binding whatever their form, provided the essential conditions for validity exist (Article 1278, Civil Code). An oral contract for the sale of real estate, though not clothed in the form required by section 335 of the Code of Civil Procedure, is valid and binding between the parties when proven by unobjected testimony. The failure to object to oral evidence proving the contract constitutes a waiver of the Statute of Frauds. Applied here: the vendor's unobjected testimony proved the joint purchase, making the verbal contract enforceable despite the absence of a written deed.

• Co-ownership and the Right to Partition — Under Article 392 of the Civil Code, there is community of property when the ownership of a thing belongs to different persons undividedly. Under Article 400, no co-owner is obliged to remain a party to the community, and each may demand division at any time. Applied here: because both parties jointly purchased the land and each paid one-half of the price, they were co-owners, and the plaintiff was entitled to partition as a matter of right.

• Distinction Between Co-ownership and Partnership — The joint acquisition of property for equal division between purchasers, without any purpose of undertaking a business or cultivating the property in partnership, constitutes co-ownership, not a partnership under Article 1665 of the Civil Code. Proof of a partnership contract is not necessary to maintain an action for partition of property acquired jointly and undividedly.

• "Contracts shall be binding, whatever may be the form in which they may have been executed, provided the essential conditions required for their validity exist." — This passage invokes Article 1278 of the Civil Code as the doctrinal basis for enforcing the oral contract of joint purchase, establishing that form is not essential to contractual validity when the substantive requisites are present.

• "once it has been proven by the testimony of witnesses that the purchase of a piece of real estate was made by a verbal contract between the interested parties, if the oral evidence was taken at the petition of one of them without opposition on the part of the other, such proven verbal contract, as the one herein concerned, must be held to be valid." — This articulates the ratio decidendi on the Statute of Frauds waiver issue: unobjected oral evidence of a real estate sale contract renders the contract binding as if it had been reduced to writing.

• "It is neither just nor permissible for the defendant to violate a contract made, even though verbally, with the plaintiff, and to keep without good reason, for his exclusive benefit and to the prejudice only of his coowner, the plaintiff, the whole of the land belonging to both of them in common, because each paid a half of the value thereof." — This passage states the equitable rationale supporting the reversal: a party who paid only half the purchase price cannot retain the entire property to the prejudice of his co-owner.

• Conlu et al. vs. Araneta and Guanko, 15 Phil. Rep. 387 — Controlling precedent followed. Held that an oral contract for the sale of real estate made prior to the Code of Civil Procedure is binding between the parties, and that failure to object to oral evidence proving the contract constitutes a waiver of the Statute of Frauds. The Court applied this rule to uphold the validity of the verbal joint purchase.

• Thunga Chui vs. Que Bentec, 1 Phil. Rep. 561 — Followed through Conlu. Established that an oral contract for the sale of real estate is binding between the parties thereto.

• Couto vs. Cortes, 8 Phil. Rep. 459 — Followed through Conlu. Corroborated the rule that oral contracts for the sale of real estate are enforceable between the parties when proven without objection.

• Article 392, Civil Code — Defines community of property as arising when the ownership of a thing belongs to different persons undividedly. Applied to establish that the plaintiff and defendant were co-owners of the land purchased jointly.

• Article 400, Civil Code — Provides that no co-owner is obliged to remain a party to the community and that each may demand division of the thing owned in common at any time. Applied as the statutory basis for the plaintiff's right to partition.

• Article 1278, Civil Code — Provides that contracts are binding whatever their form, provided the essential conditions for validity exist. Applied to uphold the validity of the verbal contract of joint purchase despite the absence of a written instrument.

• Article 1261, Civil Code — Enumerates the essential conditions required for the validity of contracts. Applied as the standard for determining the validity of the verbal contract, the conditions being equally requisite in a proven oral contract.

• Article 1665, Civil Code — Defines partnership. Applied negatively: the Court found that no partnership was formed because the parties' sole transaction was the joint acquisition of land for equal division, not the undertaking of any business.

• Section 335, paragraph 5, Code of Civil Procedure — Requires contracts for the sale of real estate to be in writing. Applied as the provision whose effect was waived by the defendant's failure to object to oral evidence proving the contract.

• Sections 181–196, Code of Civil Procedure — Govern proceedings for partition. Applied as the procedural framework for ordering the division of the land held in common.

Mapa, Johnson, Carson, and Moreland, JJ., concurred.