Purisima, Jr. vs. Purisima

An oral contract for the sale of real property that has been fully consummated through payment of the price and delivery of possession is not governed by the Statute of Frauds, which applies only to executory contracts; and an action for reconveyance filed by a party in actual possession of the disputed property is imprescriptible, as it is in the nature of an action to quiet title.

The parties are members of the same family. Respondents Macaria Purisima and the Spouses Erlinda and Daniel Medrano are siblings of the late Pascual Purisima Sr., while petitioners Pascual Purisima Jr., Leonardo Purisima, Eufrata Purisima, and Estelita Daguio are the children and heirs of Pascual Sr. The disputed property is Lot 71, PLS-631-D, located in Cagumitan, Tuao, Cagayan, which Pascual Sr. owned but which had not yet been titled at the time of the events giving rise to the dispute. The controversy stems from Pascual Sr.'s alleged oral sale of portions of this lot to the respondents in 1960 and the subsequent titling of the entire lot in the name of Pascual Sr.'s heirs through a free patent obtained in 1991.

Pascual Purisima Sr. owned Lot 71, PLS-631-D, located in Cagumitan, Tuao, Cagayan. Sometime in 1960, Pascual Sr. sold portions of this property to his siblings — Macaria Purisima and the Spouses Erlinda and Daniel Medrano — to answer for his medical bills. At the time of the sale, the whole land was not yet titled, but it had been surveyed for a patent application under Pascual Sr.'s name by the Land Management Bureau on April 21, 1960. The portions sold were identified as Lot 71-A, Pls-D, containing approximately 3,507 square meters, and Lot 71-B, Pls-631-D, containing 3,525 square meters. Banking on mutual trust, the parties did not record the survey or the sale. Since the 1960s and prior to Pascual Sr.'s death on April 12, 1971, respondents had been in open, continuous, and exclusive possession of the apportioned properties, paying realty taxes thereon and maintaining their own tenants tilling their respective portions.

On September 19, 1978, petitioners, as heirs of Pascual Sr., executed an Extrajudicial Settlement of Estate of Deceased, Pascual Purisima and Sale over the unregistered property of their father, which included the sale of the properties already apportioned to the respondents. Petitioners admitted signing the document but claimed they did not understand its import and were convinced by the respondents — their aunts — that it was merely evidence of indebtedness. They further claimed they did not appear before a notary public in its execution and were not given a copy.

On December 16, 1991, Pascual Purisima Jr. was granted Free Patent No. 021528-91-2459 under the name of "Heirs of Pascual Sr.," covering the whole of Lot 71, including the portions already sold to the respondents. On August 17, 1992, the free patent was registered with the Registry of Deeds of Tuao, Cagayan, and Original Certificate of Title No. P-5968 was issued in favor of the "Heirs of Pascual Purisima Sr. rep. by Pascual Purisima Jr." Upon learning of the inclusion of their land in the extrajudicial settlement, respondents repeatedly requested Purisima Jr. to surrender OCT P-5968 in order to annotate the extrajudicial settlement, register the previous subdivision plan, and secure their own titles. Petitioners ignored these pleas, and despite barangay conciliation proceedings, the parties failed to reach an amicable settlement.

Respondents then filed a complaint before the RTC for reconveyance, cancellation, and quieting of title. Petitioners countered that no sale had transpired and that the amounts given by respondents were merely financial assistance extended to their sick father. They maintained that the only reason respondents were allowed to possess the property was by tolerance, as a form of payment for the financial help extended to Pascual Sr. The RTC dismissed the complaint for lack of written evidence of sale, holding that even if a sale had transpired, it was unenforceable for not being embodied in a written document. The CA reversed, finding the reconveyance proper and holding that the Statute of Frauds did not apply to the consummated 1960 sale, as confirmed by the 1978 Extrajudicial Settlement of Estate and Sale.

• Factual Misappreciation: Petitioners argued that the CA gravely erred by failing to notice certain relevant facts which, if properly considered, would justify a different conclusion, and by misappreciating the facts in ruling that there was a sale on the strength of the 1978 Extrajudicial Settlement of Estate and Sale.
• Invalidity of the 1960 Sale: Petitioners maintained that the CA erred in predicating its finding of sale on the 1978 Extrajudicial Settlement, since that document was a mere confirmation of the alleged 1960 sale which was null and void for not being reduced to writing.
• Indefeasibility of Title: Petitioners argued that the CA erred in allowing an attack on their title when said title was already indefeasible.
• No Sale Transpired: Petitioners contended that no sale transpired at any given time, and that the amounts given by respondents were due to the fact that their father was sick. They claimed they did not understand the import of the 1978 document and were convinced it was merely evidence of indebtedness.

• Existence of Sale: Whether the CA erred in ruling that there was a sale on the strength of the 1978 Extrajudicial Settlement of Estate and Sale.
• Validity of the 1960 Oral Sale: Whether the 1960 oral sale is null and void for not being reduced to writing under the Statute of Frauds.
• Attack on Indefeasible Title: Whether respondents may seek reconveyance despite the indefeasibility of petitioners' certificate of title.

• Existence of Sale: No. The CA did not err; both the RTC and CA were one in finding valid consideration in the 1960 sale, and the testimonies of the parties were consistent that Pascual Sr. received the amounts for the purchase of the apportioned lots.
• Validity of the 1960 Oral Sale: No. The Statute of Frauds applies only to executory contracts, not to consummated contracts. The 1960 oral sale was fully consummated, as evidenced by the 1978 Extrajudicial Settlement of Estate and Sale, which was undisputed and acknowledged by the petitioners themselves.
• Attack on Indefeasible Title: Yes. A certificate of title merely confirms or records title already existing and vested; it cannot be used to protect a usurper from the true owner. An action for reconveyance is available to a party wrongfully deprived of property, and where the complainant is in possession of the land, the action is imprescriptible.

• Existence of Sale: The issues raised by petitioners were essentially factual in nature, calling for a review of the evidence presented during trial — a function reserved for lower courts under Rule 45. While the conflicting findings of the RTC and CA could theoretically justify a review, the mere fact of disagreement does not automatically warrant it. Petitioners utterly failed to substantiate their arguments or prove that their case falls under the recognized exceptions. Nevertheless, even relaxing the rules, both lower courts agreed that respondents had given monetary consideration to Pascual Sr. for the purchase of the apportioned lots. The testimonies were consistent that Pascual Sr. received the amounts, and respondents established that payments were made because Pascual Sr. was in dire need of money due to his poor health. The purpose of the payment did not affect its validity as consideration for the sale.
• Validity of the 1960 Oral Sale: The Statute of Frauds, embodied in Article 1403(2)(e) of the Civil Code, requires a written instrument for the enforceability of certain contracts, including verbal contracts for the sale of real property. However, the Statute of Frauds applies only to executory contracts — not to contracts either totally or partially performed. The 1960 oral sale was already fully consummated, as evidenced by the 1978 Extrajudicial Settlement of Estate of Deceased, Pascual Purisima, Sr. and Sale, which was undisputed and acknowledged by the petitioners themselves, and as further established by the testimonies of respondents' tenants and other documentary evidence. A contract of sale, whether oral or written, is a consensual contract perfected by mere consent, requiring no particular form for its validity. The transfer of ownership from Pascual Sr. to respondents was effective from the time of the consummated sale, pursuant to Article 1458 of the Civil Code, which obligates the seller to transfer ownership and deliver a determinate thing in exchange for a price certain.
• Attack on Indefeasible Title: While a certificate of title is indefeasible, unassailable, and binding against the whole world, it does not create or vest title; it merely confirms or records title already existing and vested. It cannot be used to protect a usurper from the true owner, nor as a shield for fraud, nor to permit one to enrich himself at the expense of others. Although review of the decree of registration is no longer available after the one-year period, an equitable remedy remains: reconveyance to the true owner, provided the property has not been transferred to an innocent purchaser for value. The Torrens system was not designed to shield one who committed fraud or holds title in bad faith; the registered property is deemed held in trust for the real owners. The prescriptive period for reconveyance of registered property is ten years from issuance of the certificate of title, but this period does not apply where the complainant is in possession of the land and the registered owner was never in possession. In such a case, the action for reconveyance is in the nature of an action to quiet title, which is imprescriptible. Here, respondents had been in open, continuous, and exclusive possession of the apportioned properties since the 1960s, making their action imprescriptible.

• Statute of Frauds — Applicability Limited to Executory Contracts — The Statute of Frauds, under Article 1403(2)(e) of the Civil Code, renders verbal contracts for the sale of real property unenforceable unless ratified. However, the Statute of Frauds applies only to executory contracts — not to contracts that have been totally or partially performed or consummated. Where a sale has been consummated through payment of the price and delivery of possession, the absence of a written instrument does not render the sale void or unenforceable. The Court applied this doctrine to uphold the validity of the 1960 oral sale, which was fully consummated and later confirmed by the 1978 Extrajudicial Settlement of Estate and Sale.

• Consensual Nature of Contract of Sale — A contract of sale, whether oral or written, is a consensual contract, perfected by mere consent. No particular form is required for its validity. Once perfected, the sale and all its consequences under the law are binding on the parties and their successors-in-interest. The Court relied on this principle to hold that the 1960 oral sale stood and was binding on the petitioners as heirs of Pascual Sr.

• Certificate of Title as Confirmatory, Not Creative — A certificate of title under the Torrens system is indefeasible and binding against the whole world, but it does not create or vest title. It merely confirms or records title already existing and vested. It cannot be used to protect a usurper from the true owner, nor as a shield for fraud, nor to permit unjust enrichment at the expense of others. The Court applied this doctrine to justify the ordering of reconveyance notwithstanding the issuance of OCT No. P-5968 in favor of the petitioners.

• Action for Reconveyance Based on Constructive Trust — Imprescriptibility When Complainant Is in Possession — An action for reconveyance of property based on an implied or constructive trust is the proper remedy for a party whose property has been erroneously or fraudulently registered in another's name. The prescriptive period is ten years from issuance of the certificate of title. However, this prescriptive period does not apply where the complainant is in possession of the land and the registered owner was never in possession. In such a case, the action is in the nature of an action to quiet title, which is imprescriptible. The Court applied this doctrine because respondents had been in open, continuous, and exclusive possession of the apportioned properties since the 1960s.

• Torrens System Not a Shield for Fraud — The Torrens system was not designed to shield and protect one who had committed fraud or misrepresentation and thus holds title in bad faith. The registered property is deemed held in trust for the real owners by the person in whose name it has been registered. The Court invoked this principle to support the ordering of reconveyance to respondents as the true owners.

• "But long accepted and well settled is the rule that the Statute of Frauds is applicable only to executory contracts - not to contracts either totally or partially performed." — This passage, quoted from Iñigo vs. Estate of Adriana Maloto, articulates the fundamental limitation on the Statute of Frauds and is the doctrinal basis for upholding the validity of the consummated 1960 oral sale.

• "While the certificate of title in favor of defendants-appellees is indefeasible, unassailable and binding against the whole world, including government itself, it does not create or vest title. It merely confirms or records title already existing and vested." — This passage, quoted by the Court with approval from the CA decision, defines the confirmatory — not creative — function of a Torrens certificate of title and is central to the rationale permitting reconveyance despite an indefeasible title.

• "However, the ten-year prescriptive period for an action for reconveyance is not applicable where the complainant is in possession of the land to be reconveyed and the registered owner was never in possession of the disputed property. In such a case, the action for reconveyance filed by the complainant who is in possession of the disputed property would be in the nature of an action to quiet title which is imprescriptible." — This passage, also quoted from the CA decision with approval, establishes the imprescriptibility of an action for reconveyance when the complainant is in possession, a doctrine frequently cited in subsequent property law jurisprudence.

• Iñigo vs. Estate of Adriana Maloto, 128 Phil. 279 (1967) — Controlling precedent on the inapplicability of the Statute of Frauds to consummated contracts of sale. The Court quoted this case at length to establish that the Statute of Frauds applies only to executory contracts, and that oral evidence of a consummated sale of land is not forbidden and may not be excluded in court.
• Uniland Resources vs. Development Bank of the Philippines, 277 Phil. 839 (1991) — Cited for the proposition that mere disagreement between the CA and the RTC as to the facts does not automatically warrant Supreme Court review of factual findings, so long as the CA's findings are borne out by the record or based on substantial evidence.
• Pascual vs. Burgos, 776 Phil. 167 (2016) — Cited in support of the rule that conflicting factual findings between the CA and the RTC do not, by themselves, automatically warrant a review of factual findings by the Supreme Court.
• Bernas vs. The Estate of Felipe Yu Han Yat, G.R. Nos. 195908 & 195910, August 15, 2018 — Cited for the enumeration of exceptions under which the Supreme Court may review factual findings in a Rule 45 petition.
• Ignacio vs. Ragasa, G.R. No. 227896, January 29, 2020 — Cited for the definition of a question of fact and the distinction between questions of law and questions of fact in the context of Rule 45 review.

• Article 1403(2)(e), Civil Code — Provides that a verbal contract for the sale of real property is unenforceable unless ratified, as it falls under the Statute of Frauds. The Court held this provision inapplicable because the 1960 oral sale was a consummated, not executory, contract.
• Article 1458, Civil Code — Defines a contract of sale as one whereby a party obligates himself to transfer ownership and deliver a determinate thing, and the other to pay a price certain in money or its equivalent. The Court relied on this provision to conclude that ownership of the apportioned properties was effectively transferred to respondents upon consummation of the 1960 sale.
• Rule 45, Rules of Court — Governs petitions for review on certiorari before the Supreme Court, confining review to questions of law. The Court noted that the issues raised by petitioners were factual in nature and that petitioners failed to substantiate any ground for exception to the rule.

Leonen (Chairperson), Inting, Delos Santos, and Rosario, JJ., concurred. No separate concurring opinions were written.