The Supreme Court (SC) has ruled that a land sale made through a verbal, unwritten agreement can be considered valid and binding, as long as it has been partly or fully carried out.
In a decision written by Associate Justice Samuel Gaerlan and made public June 27, the SC’s Third Division upheld the verbal sale of land between Marcos Batara and his nephew Benedicto Ocampo.
The land was registered in Batara’s name. After his death in 1974, his children, Noblesa and Ernesto, were unaware of the property. They only discovered it in 2007 when they received a notice to pay unpaid real estate taxes and found out that their cousin, Ocampo, was living there.
Noblesa and Ernesto filed a case to reclaim the land from Ocampo, saying they were the rightful heirs.
Ocampo claimed he bought the land from Batara while he was still alive. After Batara died, Ocampo kept paying installments to Marcelo, Batara’s brother and Noblesa’s guardian. He also provided the land title as proof, claiming Batara gave it to him after the initial payment.
Both the Regional Trial Court and the Court of Appeals ruled in favor of Noblesa and Ernesto, holding that they had a better right to the property since it was registered under their father’s name. They found there was not enough proof of the sale aside from Ocampo’s verbal claims.
But the SC reversed their decisions. “Even without a written contract, the SC found the sale valid because Ocampo had already received the land title, moved into the property, and made improvements on it,” the Office of the Spokesperson said in a press release.
Under the Civil Code, a sale of land must be in writing to be enforced in court. This written document serves as proof that both parties agreed to the sale. However, the sale is still considered valid even without a written contract if it has already been fully or partly carried out. In such cases, a verbal agreement can still be legally binding, and witnesses may be allowed to testify to prove that the sale happened.
The SC added that taking possession of the land and making improvements on it are strong signs that a verbal sale had already taken place. Thus, buyers who are already living on the property can use the verbal agreement as a legal basis for their possession, even without a written contract.
In this case, the sale was partially executed as Ocampo had partially paid for the land, taken possession of it, received the land title, and paid real property taxes. Thus, the SC admitted the testimonies of Ocampo and his witnesses, which proved the sale.
However, the SC found that Ocampo’s payments to Batara’s brother Marcelo were ineffective because he was not authorized to accept them on behalf of his brother’s heirs.
Therefore, while the sale remains valid, Ocampo must pay the remaining balance of the purchase price, with interest, to Noblesa and Ernesto, the SC added. ||
