G.R. No. 226065 – 858 Phil. 209 – Civil Law – Law on Sales – Sale of Real Property – Statute of Frauds – Executed Contracts – Oral Sale of Land is Valid
In 1975, Soledad Alido was granted a free patent for a land in Iloilo. In 1978, she orally sold the land to Flora Campano. Alido delivered to Flora the original certificate of title. Flora immediately took possession of the land and had since been paying the realty tax for the property.
In 1996, Alido died.
In 2009, the heirs of Alido sought to partition the property amongst themselves. They demanded Flora to turn over the title to them but Flora refused. They filed a complaint against Flora for her to return the title to them.
The trial court ruled in favor of the heirs. Flora appealed to the Court of Appeals.
The CA reversed the trial court. The CA ruled that oral sales of real property are valid but are generally unenforceable except if they were already executed or partially executed. The CA further ruled that the heirs are barred by laches especially considering that during the lifetime of Alido, she never questioned the possession of Flora; that it took the heirs more than a decade from the death of Alido to question Flora’s ownership.
ISSUE: Whether or not the sale between Alido and Flora is valid.
HELD: No. The sale is void for it violated the Public Land Act which prohibits the sale of land, acquired through free patent application, within five years from grant. Here, Alido sold the land in 1978 which was within the 5 year ban.
The SC did not agree with the CA that the heirs are barred by laches. The sale is void hence laches will not set in.
The case was remanded to the trial court for the determination of the purchase price and the interest which Flora may collect from the heirs (the land has to be returned to the heirs but Flora is entitled to reimbursement and interest).
The SC however noted that oral sales are valid but under the Statutes of Fraud, they are unenforceable except if they are already executed or partially executed.
