EVIDENCE

LECTURE NOTES ON THE STATUTE OF FRAUDS ATTY. JESS ZACHAEL B. ESPEJO

THE REQUIREMENT OF FORM WITH RESPECT TO CONTRACTS The general rule is that contracts are essentially consensual and are thus perfected by mere consent. No particular form is generally required for validity as expressed under Article 1356 of the Civil Code. Thus: Art. 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. However, when the law requires that a contract be in some form in order that it may be valid or enforceable, or that a contract be proved in a certain way, that requirement is absolute and indispensable. In such cases, the right of the parties stated in the following article cannot be exercised. However, there are some provisions of the law which require certain formalities for particular contracts. The first is when the form is required for the validity of the contract; the second is when it is required to make the contract effective as against third parties such as those mentioned in Articles 1357 and 1358; and the third is when the form is required for the purpose of proving the existence of the contract, such as those provided in the Statute of Frauds in Article 1403 (ROSA LIM vs. COURT OF APPEALS, ET AL, G.R. No. 102784, February 28, 1996). REQUIRED FOR VALIDITY For example, form is important for validity in the following instances: 1. Art. 748 donations of personal property worth more than P5,000.00 must be in writing; 2. Art. 749 donations of real property must be in a public instrument; 3. Donations propter nuptias (FORTUNATA SOLIS vs. MAXIMA BARROSO, ET AL., G.R. No. L-27939, October 30, 1928); 4. Art. 2134 antichresis must be in writing to be valid REQUIRED TO AFFECT THIRD PERSONS Art. 1357. If the law requires a document or other special form, as in the acts and contracts enumerated in the following article, the contracting parties may compel each other to observe that form, once the contract has been perfected. This right may be exercised simultaneously with the action upon the contract. (1279a) Art. 1358. The following must appear in a public document: (1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein a governed by Articles 1403, No. 2, and 1405; (2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains; (3) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person; (4) The cession of actions or rights proceeding from an act appearing in a public document. All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales of goods, chattels or things in action are governed by Articles, 1403, No. 2 and 1405. (1280a)

Page 1 of 16

In Credit Transactions, we also know that a contract of mortgage must be in writing and the recorded in the proper Registry of Property in order to be valid as against third persons (Article 2125). REQUIRED TO PROVE EXISTENCE OF CONTRACT OR FOR GREATER EFFICACY: THE STATUTE OF FRAUDS The purpose of the Statute of Frauds is to prevent fraud and perjury in the enforcement of obligations depending for their evidence upon the unassisted memory of witnesses by requiring certain enumerated contracts and transactions to be evidenced in writing. The provisions of the Statute of Frauds originally appeared under the old Rules of Evidence. However when the Civil Code was re-written in 1949 (to take effect in 1950), the provisions of the Statute of Frauds were taken out of the Rules of Evidence in order to be included under the title on Unenforceable Contracts in the Civil Code. The transfer was not only a matter of style but to show that the Statute of Frauds is also a substantive law. (CECILIO CLAUDEL, ET AL. vs. COURT OF APPEALS, ET AL., G.R. No. 85240 July 12, 1991) Art. 1403. The following contracts are unenforceable, unless they are ratified: (2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents: (a) An agreement that by its terms is not to be performed within a year from the making thereof; (b) A special promise to answer for the debt, default, or miscarriage of another; (c) An agreement made in consideration of marriage, other than a mutual promise to marry; (d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum; (e) An agreement of the leasing for a longer period than one year, or for the sale of real property or of an interest therein; (f) A representation as to the credit of a third person. STATUTE OF FRAUDS AND CONTRACTS The Statute of Frauds, embodied in Article 1403 of the Civil Code of the Philippines, does not require that the contract itself be in writing. The plain text of Article 1403, paragraph (2) is clear that a written note or memorandum, embodying the essentials of the contract and signed by the party charged, or his agent, suffices to make the verbal agreement enforceable, taking it out of the operation of the statute (CIRILO PAREDES vs. JOSE L. ESPINO, G.R. No. L-23351, March 13, 1968) The Statute does not deprive the parties of the right to contract with respect to the matters therein involved, but merely regulates the formalities of the contract necessary to render it enforceable. Evidence of the agreement cannot be received without the writing or a secondary evidence of its contents (SWEDISH MATCH, ET AL. vs. COURT OF APPEALS, ET AL., G.R. No. 128120, October 20, 2004) The rule presupposes the existence of a perfected contract and requires only that a note or memorandum be executed in order to compel judicial enforcement thereof (VENANCIO DAVID, ET AL. vs. ALEJANDRO TIONGSON, ET AL., G.R. No. 108169, August 25, 1999)

Page 2 of 16

PURPOSE IS PURELY EVIDENTIARY The Statute, however, simply provides the method by which the contracts enumerated therein may be proved but does not declare them invalid because they are not reduced to writing. Consequently, the effect of non-compliance with the requirement of the Statute is simply that no action can be enforced unless the requirement is complied with. Clearly, the form required is for evidentiary purposes only. Hence, if the parties permit a contract to be proved, without any objection, it is then just as binding as if the Statute has been complied with. REQUIREMENT OF NOTE OR MEMORANDUM However, for a note or memorandum to satisfy the Statute, it must be complete in itself and cannot rest partly in writing and partly in parol. The note or memorandum must contain: 1. 2. 3. The names of the parties; The terms and conditions of the contract; and A description of the property sufficient to render it capable of identification.

In other words, such note or memorandum must contain the essential elements of the contract expressed with certainty that may be ascertained from the note or memorandum itself, or some other writing to which it refers or within which it is connected, without resorting to parol evidence (SPOUSES TORCUATOR vs. SPOUSES BERNABE, et al., G.R. No. 134219, June 08, 2005) (A) AN AGREEMENT THAT BY ITS TERMS IS NOT TO BE PERFORMED WITHIN A YEAR FROM THE MAKING THEREOF; The agreement contemplated here is one that is not to be performed within one year BY BOTH PARTIES TO THE AGREEMENT. This is so because of the rule that the Statute of Frauds applies only to executory and not to completed, executed, or partially executed contracts. Thus, where one party has performed ones obligation, oral evidence will be admitted to prove the agreement (GENARO CORDIAL vs. DAVID MIRANDA, G.R. No. 133495, December 11, 2000). EXAMPLES: A orally promises to sell B his car for P500,000 after one year. After one year B goes to A to buy the car. A refuses. B sues A for specific performance based on the contract to sell. Here, B cannot prove his claim inasmuch as the contract is declared to be unenforceable. (B) A SPECIAL PROMISE TO ANSWER FOR THE DEBT, DEFAULT, OR MISCARRIAGE OF ANOTHER; A contract of guaranty is not a formal contract and shall be valid in whatever form it may be, provided that it complies with the statute of frauds (MACONDRAY AND COMPANY, INC. vs. PERFECTO PION, ET AL., G.R. No. L-13817, August 31, 1961) Take note that the provision refers to GUARANTORS and not to SURETIES, who are primarily liable on the debt. A surety agreement is not covered by the Statute and may thus be proved by parol evidence. (C) AN AGREEMENT MADE IN CONSIDERATION OF MARRIAGE, OTHER THAN A MUTUAL PROMISE TO MARRY; What agreements are made in consideration of marriage? 1. Prenuptial agreements or marriage settlements; 2. Donations propter nuptias; 3. Mutual promise to marry, by implication of Article 1403 (c). ROMANA LOCQUIAO VALENCIA, ET AL. VS. BENITO A. LOCQUIAO, ET AL. G.R. No. 122134, October 3, 2003 Unlike ordinary donations, donations propter nuptias or donations by reason of marriage are those "made before its celebration, in consideration of the same and in favor of one or both of the future spouses." The distinction is crucial because the two classes of donations are not governed by exactly the same rules, especially as regards the formal essential requisites.

Page 3 of 16

Under the Old Civil Code, donations propter nuptias must be made in a public instrument in which the property donated must be specifically described. However, Article 1330 of the same Code provides that "acceptance is not necessary to the validity of such gifts". In other words, the celebration of the marriage between the beneficiary couple, in tandem with compliance with the prescribed form, was enough to effectuate the donation propter nuptias under the Old Civil Code. Under the New Civil Code, the rules are different. Article 127 thereof provides that the form of donations propter nuptias are regulated by the Statute of Frauds. Article 1403, paragraph 2, which contains the Statute of Frauds requires that the contracts mentioned thereunder need be in writing only to be enforceable. However, as provided in Article 129, express acceptance "is not necessary for the validity of these donations." Thus, implied acceptance is sufficient. The pivotal question, therefore, is which formal requirements should be applied with respect to the donation propter nuptias at hand. Those under the Old Civil Code or the New Civil Code? It is settled that only laws existing at the time of the execution of a contract are applicable thereto and not later statutes, unless the latter are specifically intended to have retroactive effect. Consequently, it is the Old Civil Code which applies in this case since the donation propter nuptias was executed in 1944 and the New Civil Code took effect only on August 30, 1950. As a consequence, applying Article 1330 of the Old Civil Code in the determination of the validity of the questioned donation, it does not matter whether or not the donees had accepted the donation. The validity of the donation is unaffected in either case.

It is opined that the phrase other than a mutual promise to marry is a surplusage. What would be the effect if the promise to marry is mutual or unilateral? If the same is written or oral? The rule is very clear from jurisprudence that any breach of promise to marry is not actionable. Its enforceability is therefore a non-issue. (D) AN AGREEMENT FOR THE SALE OF GOODS, CHATTELS OR THINGS IN ACTION, AT A PRICE NOT LESS THAN FIVE HUNDRED PESOS, UNLESS THE BUYER ACCEPT AND RECEIVE PART OF SUCH GOODS AND CHATTELS, OR THE EVIDENCES, OR SOME OF THEM, OF SUCH THINGS IN ACTION OR PAY AT THE TIME SOME PART OF THE PURCHASE MONEY; BUT WHEN A SALE IS MADE BY AUCTION AND ENTRY IS MADE BY THE AUCTIONEER IN HIS SALES BOOK, AT THE TIME OF THE SALE, OF THE AMOUNT AND KIND OF PROPERTY SOLD, TERMS OF SALE, PRICE, NAMES OF THE PURCHASERS AND PERSON ON WHOSE ACCOUNT THE SALE IS MADE, IT IS A SUFFICIENT MEMORANDUM; ANGEL CLEMENO, JR., ET AL., vs. ROMEO R. LOBREGAT G.R. No. 137845, September 9, 2004 This is so because the provision applies only to executory, and not to completed, executed or partially executed contracts In this case, the contract of sale had been partially executed by the parties, with the transfer of the possession of the property to the respondent and the partial payments made by the latter of the purchase price thereof. APPLIES TO DATION IN PAYMENT DAO HENG BANK, INC. vs. SPS. LILIA and REYNALDO LAIGO G.R. No. 173856, November 20, 2008 Dacion en pago as a mode of extinguishing an existing obligation partakes of the nature of sale whereby property is alienated to the creditor in satisfaction of a debt in money. It is an objective novation of the obligation, hence, common consent of the parties is required in order to extinguish the obligation. In dacion en pago, as a special mode of payment, the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt. The undertaking really partakes in one sense of the nature of sale, that is, the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtor's debt. As such the elements of a contract of sale, namely, consent, object certain, and cause or consideration must be present. In its modern concept, what actually takes place in dacion en pago is an objective novation of the obligation where the thing offered as an accepted equivalent of the performance of an obligation is considered as the object of the contract of sale, while the debt is considered the purchase price. In any case, common consent is an essential prerequisite,

Page 4 of 16

be it sale or novation, to have the effect of totally extinguishing the debt or obligation." (Emphasis, italics and underscoring supplied; citation omitted) Being likened to that of a contract of sale, dacion en pago is governed by the law on sales. The partial execution of a contract of sale takes the transaction out of the provisions of the Statute of Frauds so long as the essential requisites of consent of the contracting parties, object and cause of the obligation concur and are clearly established to be present. Respondents claim that petitioner's commissioning of an appraiser to appraise the value of the mortgaged properties, his services for which they and petitioner paid, and their delivery to petitioner of the titles to the properties constitute partial performance of their agreement to take the case out of the provisions on the Statute of Frauds. There is no concrete showing, however, that after the appraisal of the properties, petitioner approved respondents' proposal to settle their obligation via dacion en pago. The delivery to petitioner of the titles to the properties is a usual condition sine qua non to the execution of the mortgage, both for security and registration purposes. For if the title to a property is not delivered to the mortgagee, what will prevent the mortgagor from again encumbering it also by mortgage or even by sale to a third party.

(E) AN AGREEMENT OF THE LEASING FOR A LONGER PERIOD THAN ONE YEAR, OR FOR THE SALE OF REAL PROPERTY OR OF AN INTEREST THEREIN; In the case of CELSO FERNANDEZ v. CA, G.R. No. 80231 October 18, 1988, this Court held that "an alleged verbal assurance of renewal of a lease is inadmissible to qualify the terms of the written lease agreement under the parole evidence rule and unenforceable under the Statute of Frauds (INTER-ASIA SERVICES CORP. vs. COURT OF APPEALS, ET AL, G.R. No. 106427 October 21, 1996). ENRIQUE P. SYQUIA vs. COURT OF APPEALS G.R. No. L-61932, June 30, 1987 According to the plaintiff, there is infringement of the Statute of Frauds as well as the Parol Evidence Rule. On the other hand, the defendant invokes the exception contained in Section 7, Rule 130 of the Rules of Court (Parol Evidence Rule). Defendant contends that antecedent factors were involved which induced him to enter into the (contract of lease with Litton Finance & Investment Corp. This brings us to the provisions of Statute of Frauds under Article 1403, No. 2(E), which provides as follows: Art. 1403. The following contracts are unenforceable unless they are ratified: 2. Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents: (E) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein. So, under 2(e) of Article 1403 of the Civil Code as quoted above, the alleged oral assurance or promise of the representatives of the Litton Finance & Investment Corp, that defendant should be given priority or a renewal of Exhibit "G" cannot be enforceable against plaintiff. Likewise, under the Parol Evidence Rule, defendant's claim that he is entitled to a renewal of the contract of lease for the reason that the lessors have given him the option to renew the contract cannot be maintained under the Parol Evidence Rule. Applying the Parol Evidence Rule to the instant case, it is clear that there being a written agreement between the parties, the same should be controlling between them. The exceptions provided for in (A) and (B) cannot apply in the instant case in view of the fact that the contract of lease, Exhibit "G" is clear, thus precluding any mistake or imperfection or failure to express the true intent and agreement of the parties. The Court cannot see any ambiguity in the contract. The tests of completeness of a written contract is the contract itself, as provided for under Sec. 1494 of Jones on Evidence .

Page 5 of 16

SPS. MANUEL & CORAZON CAMARA vs. SPS. JOSE & PAULINA MALABAO G.R. No. 154650, July 31, 2003 As correctly found by the appellate court, the occupation and construction of the improvements made by petitioners on the disputed property are clear acts of ratification and enforcement. In other words, the erection of these structures on the subject lot indicates that the lease contract was already in effect. The Statute of Frauds applies only to executory and not completed, executed or partially executed contracts. Thus, where as in this case, one party has performed his obligation, oral evidence will be admitted to prove the agreement. Furthermore, as can be gleaned from Exhibit "B" of respondents, the amount of P20,000.00 received on April 21, 1989 was apparently for the rent of a stall. Indeed, the said document expressly states that it is a receipt for rentals. Petitioners can not now say that the said receipt is proof of an alleged down payment of the subject lot. Moreover, while there was testimony to the effect that the balance of P60,000.00 from the alleged purchase price of P80,000.00 was allegedly paid on July 3, 1989, the receipt therefore was never presented despite an earlier reservation to do so. This provision INCLUDES COMPROMISE AGREEMENT ON THE SALE OF LAND (CONSOLACION DUQUE SALONGA vs. JULITA B. FARRALES, G.R. No. L-47088 July 10, 1981). DOES IT APPLY TO RIGHTS OF FIRST REFUSAL? ROSENCOR DEVELOPMENT CORPORATION vs. PATERNO INQUING G.R. No. 140479 March 8, 2001 Both the appellate court and the trial court failed to discuss, however, the threshold issue of whether or not a right of first refusal is indeed covered by the provisions of the New Civil Code on the statute of frauds. The resolution of the issue on the applicability of the statute of frauds is important as it will determine the type of evidence which may be considered by the trial court as proof of the alleged right of first refusal. The question now is whether a "right of first refusal" is among those enumerated in the list of contracts covered by the Statute of Frauds. More specifically, is a right of first refusal akin to "an agreement for the leasing of a longer period than one year, or for the sale of real property or of an interest therein" as contemplated by Article 1403, par. 2(e) of the New Civil Code. We have previously held that not all agreements "affecting land" must be put into writing to attain enforceability. Thus, we have held that the setting up of boundaries, the oral partition of real property, and an agreement creating a right of way are not covered by the provisions of the statute of frauds. The reason simply is that these agreements are not among those enumerated in Article 1403 of the New Civil Code. A right of first refusal is not among those listed as unenforceable under the statute of frauds. Furthermore, the application of Article 1403, par. 2(e) of the New Civil Code presupposes the existence of a perfected, albeit unwritten, contract of sale. A right of first refusal, such as the one involved in the instant case, is not by any means a perfected contract of sale of real property. At best, it is a contractual grant, not of the sale of the real property involved, but of the right of first refusal over the property sought to be sold. It is thus evident that the statute of frauds does not contemplate cases involving a right of first refusal. As such, a right of first refusal need not be written to be enforceable and may be proven by oral evidence. (F) A REPRESENTATION AS TO THE CREDIT OF A THIRD PERSON. This, according to Dean Iigo, is similar to guaranty. LIMITATIONS 1. IT DOES NOT APPLY TO PARTIALLY PERFORMED OR EXECUTED CONTRACTS; MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY vs. TUDTUD G.R. No. 174012, November 14, 2008

Page 6 of 16

The Statute of Frauds applies, however, only to executory contracts. It does not apply to contracts which have been completely or partially performed, the rationale thereof being as follows: x x x In executory contracts there is a wide field for fraud because unless they be in writing there is no palpable evidence of the intention of the contracting parties. The statute has precisely been enacted to prevent fraud. However, if a contract has been totally or partially performed, the exclusion of parol evidence would promote fraud or bad faith, for it would enable the defendant to keep the benefits already delivered by him from the transaction in litigation, and, at the same time, evade the obligations, responsibilities or liabilities assumed or contracted by him thereby. ORDUA versus FUENTEBELLA G.R. No. 176841, June 29, 2010 FACTS: The subject of this case is a residential lot located at Fairview Subdivision, Baguio City, which was firstly registered under Amando Gabriel, Sr. Around 1996, Gabriel, Sr. sold the subject lot to Antonita Ordua but there was no executed formal deed. The price of the lot was payable in installments and Gabriel, Sr. accepted the set-up. Antonita and her sons have long been residing in the lot since 1979 and even had a house constructed therein. They also paid real property taxes and declared the lot for tax purposes. After the death of Gabriel, Sr., his son and one of the respondents Gabriel, Jr. continued to accept installment payments from Antonita. Then he wrote a letter to her ordering her to fence off the lot and to construct a road on the adjacent lot. However, despite the payments made by Antonita, Gabriel, Jr. sold the subject lot to Bernard Banta without the knowledge of Antonita and the rest of petitioners. Banta then sold the subject lot to Marcos Cid and Benjamin Cid. The Cids thereafter ceded the subject lot to Eduardo Fuentebilla, Jr. Eduardo, through his lawyer, sent a letter to the residence of Gabriel, Jr. ordering those living therein to vacate the lot or else ejectment would commence. When Antonita, et. al. went directly to Gabriel, Jr.s house after receiving the letter, they were informed by the wife of Gabriel, Jr., Teresita Gabriel that she filed an affidavit-complaint against her husband and the Cids for falsification of public documents, because according to her, her signature was forged in the deed of sale between Gabriel, Jr. and Banta. Teresita accompanied Antonita to file a Complaint for Annulment of Sale, Title, Reconveyance with Damages and along with this a prayer to acquire ownership over the subject lot upon payment of their remaining balance. Whether or not the Statute of Frauds is applicable to partially executed contracts. Petition GRANTED. The Statute of Frauds expressed in Article 1403, par. (2), of the Civil Code applies only to executory contracts, i.e., those where no performance has yet been made. Stated a bit differently, the legal consequence of non-compliance with the Statute does not come into play where the contract in question is completed, executed, or partially consummated. The Statute of Frauds, in context, provides that a contract for the sale of real property or of an interest therein shall be unenforceable unless the sale or some note or memorandum thereof is in writing and subscribed by the party or his agent. However, where the verbal contract of sale has been partially executed through the partial payments made by one party duly received by the vendor, as in the present case, the contract is taken out of the scope of the Statute. Lest it be overlooked, a contract that infringes the Statute of Frauds is ratified by the acceptance of benefits under the contract. Evidently, Gabriel, Jr., as his father earlier, had benefited from the partial payments made by the petitioners. Thus, neither Gabriel Jr. nor the other respondentssuccessive purchasers of subject lotscould plausibly set up the Statute of Frauds to thwart petitioners efforts towards establishing their lawful right over the subject lot and removing any cloud in their title. As it were, petitioners need only to pay the outstanding balance of the purchase price and that would complete the execution of the oral sale.

ISSUE: RULING:

Page 7 of 16

OUANO versus REPUBLIC OF THE PHILIPPINES G.R. No. 168770, February 9, 2011 FACTS: In 1949, the National Airport Corporation (NAC), MCIAAs predecessor agency, pursued a program to expand the Lahug Airport in Cebu City. Through its team of negotiators, NAC met and negotiated with the owners of the properties situated around the airport, which included lots of the Banilad Estate. As the landowners would later claim, the government negotiating team, as a sweetener, assured them that they could repurchase their respective lands should the Lahug Airport expansion project do not push through or once the Lahug Airport closes or its operations transferred to Mactan-Cebu Airport. Some of the landowners accepted the assurance and executed deeds of sale with a right of repurchase. Others, however, including the owners of the aforementioned lots, refused to sell because the purchase price offered was viewed as way below market, forcing the hand of the Republic, represented by the then Civil Aeronautics Administration (CAA), as successor agency of the NAC, to file a complaint for the expropriation of the lots. On December 29, 1961, the then Court of First Instance (CFI) of Cebu rendered judgment for the Republic declaring the expropriation of the subject lots. In view of the adverted buy-back assurance made by the government, the owners of the lots no longer appealed the decision of the trial court. At the end of 1991, or soon after the transfer of the aforesaid lots to MCIAA, Lahug Airport completely ceased operations, Mactan Airport having opened to accommodate incoming and outgoing commercial flights. On the ground, the expropriated lots were never utilized for the purpose they were taken as no expansion of Lahug Airport was undertaken. This development prompted the former lot owners to formally demand from the government that they be allowed to exercise their promised right to repurchase. The demands went unheeded. Civil suits followed. MCIAA would foist the theory that the judgment of condemnation in Civil Case No. R1881 was without qualification and was unconditional. It would, in fact, draw attention to the fallo of the expropriation courts decision to prove that there is nothing in the decision indicating that the government gave assurance or undertook to reconvey the covered lots in case the Lahug airport expansion project is aborted. Elaborating on this angle, MCIAA argues that the claim of the Ouanos and the Inocians regarding the alleged verbal assurance of the NAC negotiating team that they can reacquire their landholdings is barred by the Statute of Frauds. ISSUE: Whether or not the testimonial evidence of the petitioners proving the promises, assurances and representations by the airport officials and lawyers are inadmissbale under the Statute of Frauds. Under the rule on the Statute of Frauds, as expressed in Article 1403 of the Civil Code, a contract for the sale or acquisition of real property shall be unenforceable unless the same or some note of the contract be in writing and subscribed by the party charged. Subject to defined exceptions, evidence of the agreement cannot be received without the writing, or secondary evidence of its contents. MCIAAs invocation of the Statute of Frauds is misplaced primarily because the statute applies only to executory and not to completed, executed, or partially consummated contracts. Carbonnel v. Poncio, et al., quoting Chief Justice Moran, explains the rationale behind this rule, thusly: x x x "The reason is simple. In executory contracts there is a wide field for fraud because unless they may be in writing there is no palpable evidence of the intention of the contracting parties. The statute has been precisely been enacted to prevent fraud." x x x However, if a contract has been totally or partially performed, the exclusion of parol evidence would promote fraud or bad faith, for it would enable the defendant to keep the benefits already derived by him from the transaction in litigation, and at the same time, evade the obligations, responsibilities or liabilities assumed or contracted by him thereby. Analyzing the situation of the cases at bar, there can be no serious objection to the proposition that the agreement package between the government and the private lot owners was already partially performed by the government through the acquisition of the lots for the expansion of the Lahug airport. The parties, however, failed to

RULING:

Page 8 of 16

accomplish the more important condition in the CFI decision decreeing the expropriation of the lots litigated upon: the expansion of the Lahug Airport. The projectthe public purpose behind the forced property takingwas, in fact, never pursued and, as a consequence, the lots expropriated were abandoned. Be that as it may, the two groups of landowners can, in an action to compel MCIAA to make good its oral undertaking to allow repurchase, adduce parol evidence to prove the transaction. At any rate, the objection on the admissibility of evidence on the basis of the Statute of Frauds may be waived if not timely raised. Records tend to support the conclusion that MCIAA did not, as the Ouanos and the Inocians posit, object to the introduction of parol evidence to prove its commitment to allow the former landowners to repurchase their respective properties upon the occurrence of certain events. WHAT CONSTITUTES EXECUTION OR PARTIAL PERFORMANCE MARTA C. ORTEGA vs. DANIEL LEONARDO G.R. No. L-11311, May 28, 1958 If the above means that partial performance of a sale contract occurs only when part of the purchase price is paid, it surely constitutes a defective statement of the law. American Jurisprudence in its title "Statute of Frauds" lists other acts of partial performance, such as possession, the making of improvements, rendition of services, payment of taxes, relinquishment of rights, etc. Thus, it is stated that "The continuance in possession may, in a proper case, be sufficiently referable to the parol contract of sale to constitute a part performance thereof. There may be additional acts or peculiar circumstances which sufficiently refer the possession to the contract. . . . Continued possession under an oral contract of sale, by one already in possession as a tenant, has been held a sufficient part performance, where accompanied by other acts which characterize the continued possession and refer it to the contract of purchase. Especially is this true where the circumstances of the case include the making of substantial, permanent, and valuable improvements." (49 American Jurisprudence 44) It is also stated that "The making of valuable permanent improvements on the land by the purchaser, in pursuance of the agreement and with the knowledge of the vendor, has been said to be the strongest and the most unequivocal act of part performance by which a verbal contract to sell land is taken out of the statute of frauds, and is ordinarily an important element in such part performance. . . . Possession by the purchaser under a parol contract for the purchase of real property, together with his making valuable and permanent improvements on the property which are referable exclusively to the contract, in reliance on the contract, in the honest belief that he has a right to make them, and with the knowledge and consent or acquiescence of the vendor, is deemed a part performance of the contract. The entry into possession and the making of the improvements are held on amount to such an alteration in the purchaser's position as will warrant the court's entering a degree of specific performance." (49 American Jurisprudence p.755, 756.) Again, it is stated that "A tender or offer of payment, declined by the vendor, has been said to be equivalent to actual payment, for the purposes of determining whether or not there has been a part performance of the contract. This is apparently true where the tender is by a purchaser who has made improvements. But the doctrine now generally accepted, that not even the payment of the purchase price, without something more, . . . is a sufficient part performance. (49 American Jurisprudence p. 772.) And the relinquishment of rights or the compromise thereof has likewise been held to constitute part performance. (See same title secs. 473, 474, 475.) In the light of the above four paragraphs, it would appear that the complaint in this case described several circumstance indicating partial performance: relinquishment of rights, continued possession, building of improvements, tender of payment plus the surveying of the lot at plaintiff's expense and the payment of rentals. We shall not take, time to discuss whether one or the other or any two or three of them constituted sufficient performance to take the matter away from the operation of the Statute of Frauds. Enough to hold that the combination of all of them amounted to partial performance; and we do so line with the accepted basis of the doctrine, that it would be a fraud upon the plaintiff if the defendant were permitted to oppose performance of his part after he has allowed or induced the former to perform in reliance upon the agreement. (See 49 American Jurisprudence p. 725.)

Page 9 of 16

We also hold that the oral partition between Romeo and Alexander is not covered by the Statute of Frauds. It is enforceable for two reasons. Firstly, Alexander accepted the six thousand (P6,000.00) pesos given by Romeo as downpayment for the purchase of his share in the Paco property. Secondly, Romeo and his witnesses, Ceferino Miat and Pedro Miranda, who testified regarding the sale of Alexanders share to Romeo, were intensely questioned by petitioners counsel. CONCEPCION R. AINZA vs. SPOUSES PADUA G.R. No. 165420, June 30, 2005 FACTS: Concepcion Ainza (Concepcion) alleged that respondent-spouses Eugenia (Eugenia) and Antonio Padua (Antonio) owned a 216.40 sq. m. lot with an unfinished residential house located at No. 85-A Durian corner Pajo Sts., Barangay Quirino 2-C, Project 2, Quezon City, covered by Transfer Certificate of Title No. 271935. Sometime in April 1987, she bought one-half of an undivided portion of the property from her daughter, Eugenia and the latters husband, Antonio, for One Hundred Thousand Pesos (P100,000.00). The subject property was conjugal and sold by Eugenia (without her husbands consent) in April 1987. No Deed of Absolute Sale was executed to evidence the transaction, but cash payment was received by the respondents, and ownership was transferred to Concepcion through physical delivery to her attorney-in-fact and daughter, Natividad Tuliao (Natividad). Concepcion authorized Natividad and the latters husband, Ceferino Tuliao (Ceferino) to occupy the premises, and make improvements on the unfinished building. Thereafter, Concepcion alleged that without her consent, respondents caused the subdivision of the property into three portions and registered it in their names under TCT Nos. N-155122, N-155123 and N-155124 in violation of the restrictions annotated at the back of the title. Antonio averred that he bought the property in 1980 and introduced improvements thereon. Between 1989 and 1990, he and his wife, Eugenia, allowed Natividad and Ceferino to occupy the premises temporarily. In 1994, they caused the subdivision of the property and three (3) separate titles were issued. Thereafter, Antonio requested Natividad to vacate the premises but the latter refused and claimed that Concepcion owned the property. Antonio thus filed an ejectment suit on April 1, 1999. Antonio claimed that his wife, Eugenia, admitted that Concepcion offered to buy one third (1/3) of the property who gave her small amounts over several years which totaled P100,000.00 by 1987 and for which she signed a receipt, which reads: Received the amount of ONE HUNDRED THOUSAND PESOS (P100,000.00) as payment for the lot on 85-A Durian St., Project 2, Quezon City, from Mrs. Concepcion R. Ainza, on April, 1987. ISSUE: RULING : STATUS OF THE SALE BY EUGENIA TO NATIVIDAD The verbal contract of sale between Eugenia and Concepcion did not violate the provisions of the Statute of Frauds that a contract for the sale of real property shall be unenforceable unless the contract or some note or memorandum of the sale is in writing and subscribed by the party charged or his agent. When a verbal contract has been completed, executed or partially consummated, as in this case, its enforceability will not be barred by the Statute of Frauds, which applies only to an executory agreement. Thus, where one party has performed his obligation, oral evidence will be admitted to prove the agreement. In the instant case, the oral contract of sale between Eugenia and Concepcion was evidenced by a receipt signed by Eugenia. Antonio also stated that his wife admitted to him that she sold the property to Concepcion. It is undisputed that the subject property was conjugal and sold by Eugenia in April 1987 or prior to the effectivity of the Family Code on August 3, 1988, Article 254 of which repealed Title V, Book I of the Civil Code provisions on the property relations between husband and wife. However, Article 256 thereof limited its retroactive effect only to cases where it would not prejudice or impair vested or acquired rights in accordance with the Civil Code or other laws. In the case at bar, vested rights of Concepcion will be impaired or prejudiced by the application of the Family Code; hence, the provisions of the Civil Code should be applied.

Page 10 of 16

In Felipe v. Heirs of Aldon, et al., the legal effect of a sale of conjugal properties by the wife without the consent of the husband was clarified, to wit: The legal ground which deserves attention is the legal effect of a sale of lands belonging to the conjugal partnership made by the wife without the consent of the husband. It is useful at this point to re-state some elementary rules: The husband is the administrator of the conjugal partnership. (Art. 165, Civil Code) Subject to certain exceptions, the husband cannot alienate or encumber any real property of the conjugal partnership without the wifes consent. (Art. 166, Idem.) And the wife cannot bind the conjugal partnership without the husbands consent, except in cases provided by law. (Art. 172, Idem.). In the instant case, Gimena, the wife, sold lands belonging to the conjugal partnership without the consent of the husband and the sale is not covered by the phrase "except in cases provided by law." The Court of Appeals described the sale as "invalid" a term which is imprecise when used in relation to contracts because the Civil Code uses specific names in designating defective contracts, namely: rescissible (Arts. 1380 et seq.), voidable (Arts. 1390 et seq.), unenforceable (Arts. 1403, et seq.), and void or inexistent (Arts. 1409 et seq.). The sale made by Gimena is certainly a defective contract but of what category? The answer: it is a voidable contract. According to Art. 1390 of the Civil Code, among the voidable contracts are "[T]hose where one of the parties is incapable of giving consent to the contract." (Par. 1.) In the instant case Gimena had no capacity to give consent to the contract of sale. The capacity to give consent belonged not even to the husband alone but to both spouses. The view that the contract made by Gimena is a voidable contract is supported by the legal provision that contracts entered by the husband without the consent of the wife when such consent is required, are annullable at her instance during the marriage and within ten years from the transaction questioned. (Art. 173, Civil Code). Gimenas contract is not rescissible for in such a contract all the essential elements are untainted but Gimenas consent was tainted. Neither can the contract be classified as unenforceable because it does not fit any of those described in Art. 1403 of the Civil Code. And finally, the contract cannot be void or inexistent because it is not one of those mentioned in Art. 1409 of the Civil Code. By process of elimination, it must perforce be a voidable contract. The voidable contract of Gimena was subject to annulment by her husband only during the marriage because he was the victim who had an interest in the contract. Gimena, who was the party responsible for the defect, could not ask for its annulment. Their children could not likewise seek the annulment of the contract while the marriage subsisted because they merely had an inchoate right to the lands sold. The consent of both Eugenia and Antonio is necessary for the sale of the conjugal property to be valid. Antonios consent cannot be presumed. Except for the selfserving testimony of petitioner Natividad, there is no evidence that Antonio participated or consented to the sale of the conjugal property. Eugenia alone is incapable of giving consent to the contract. Therefore, in the absence of Antonios consent, the disposition made by Eugenia is voidable. The contract of sale between Eugenia and Concepcion being an oral contract, the action to annul the same must be commenced within six years from the time the right of action accrued. Eugenia sold the property in April 1987 hence Antonio should have asked the courts to annul the sale on or before April 1993. No action was commenced by Antonio to annul the sale, hence his right to seek its annulment was extinguished by prescription. Even assuming that the ten year prescriptive period under Art. 173 should apply, Antonio is still barred from instituting an action to annul the sale because since April 1987, more than ten years had already lapsed without any such action being filed.

Page 11 of 16

In sum, the sale of the conjugal property by Eugenia without the consent of her husband is voidable. It is binding unless annulled. Antonio failed to exercise his right to ask for the annulment within the prescribed period, hence, he is now barred from questioning the validity of the sale between his wife and Concepcion. 2. IT DOES NOT APPLY TO ORAL PARTITIONS OF PROPERTY; SPOUSES VIRGILIO, ET AL. vs. ROMEO V. MIAT G.R. No. 134297, February 11, 2003 In the recent case of Pada-Kilario vs. Court of Appeals, we held: "[N]o law requires partition among heirs to be in writing and be registered in order to be valid. The requirement in Sec. 1, Rule 74 of the Revised Rules of Court that a partition be put in a public document and registered, has for its purpose the protection of creditors and the heirs themselves against tardy claims. The object of registration is to serve as constructive notice to others. It follows then that the intrinsic validity of partition not executed with the prescribed formalities is not undermined when no creditors are involved. Without creditors to take into consideration, it is competent for the heirs of an estate to enter into an agreement for distribution thereof in a manner and upon a plan different from those provided by the rules from which, in the first place, nothing can be inferred that a writing or other formality is essential for the partition to be valid. The partition of inherited property need not be embodied in a public document so as to be effective as regards the heirs that participated therein. The requirement of Article 1358 of the Civil Code that acts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property, must appear in a public instrument, is only for convenience, non-compliance with which does not affect the validity or enforceability of the acts of the parties as among themselves. And neither does the Statute of Frauds under Article 1403 of the New Civil Code apply because partition among heirs is not legally deemed a conveyance of real property, considering that it involves not a transfer of property from one to the other but rather, a confirmation or ratification of title or right of property that an heir is renouncing in favor of another heir who accepts and receives the inheritance. x x x." MAESTRADO vs. ROA, JR. G.R. No. 133324 March 9, 2000 Partition is the separation, division and assignment of a thing held in common among those to whom it may belong. If may be effected extra-judicially by the heirs themselves through a public instrument filed before the register of deeds. However, as between the parties, a public instrument is neither constitutive nor an inherent element of a contract of partition. Since registration serves as constructive notice to third persons, an oral partition by the heirs is valid if no creditors are affected. Moreover, even the requirement of a written memorandum under the statute of frauds does not apply to partitions effected by the heirs where no creditors are involved considering that such transaction is not a conveyance of property resulting in change of ownership but merely a designation and segregation of that part which belongs to each heir. 3. IT DOES NOT APPLY TO WILLS AND SIMILAR DOCUMENTS TESTATE ESTATE OF PAULA TORAY. EUSTAQUIA TENEFRANCIA vs. ROSA ABAJA G.R. No. L-2415, July 31, 1950 It is vigorously contended on behalf of the appellant, that the alleged defect of the attestation clause1 has been cured by oral evidence, which was admitted without opposition on the part of the appellee. This contention cannot be sustained. The doctrine of this court with reference to statute of frauds is not applicable to wills. The statute of frauds relates to contracts and agreements. The subject of wills and testaments and the formalities surrounding their execution are governed by separate and specific provisions of Act No. 190. 4. IT APPLIES ONLY TO ACTIONS FOR VIOLATIONS OF CONTRACT OR ACTIONS FOR SPECIFIC PERFORMANCE 5. IT DOES NOT APPLY WHEN A PARTY OFFERS TO PROVE BY PAROL EVIDENCE THAT THE WRITING DOES NOT EXPRESS THE TRUE INTENT OF THE PARTIES; 6. IT CANNOT BE INVOKED BY A PERSON WHO IS NOT PRIVY TO THE CONTRACT

Page 12 of 16

HOW TO RAISE STATUTE OF FRAUDS AS A DEFENSE 1. In a motion to dismiss (Section 1, Rule 16 of the 1997); SECTION 1. Grounds. Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds: (i) That the claim on which the action is founded is unenforceable under the provisions of the statute of frauds; and SEC. 5. Effect of dismissal. Subject to the right of appeal, an order granting a motion to dismiss based on paragraphs (f), (h), and (i) of section 1 hereof shall bar the refiling of the same action or claim. STRONGWORLD CONSTRUCTION CORPORATION, ET AL. vs. PERELLO, ET AL.

G.R. No. 148026, July 27, 2006

Briefly stated, dismissals that are based on the following grounds, to wit: (1) that the cause of action is barred by a prior judgment or by the statute of limitations; (2) that the claim or demand set forth in the plaintiff's pleading has been paid, waived, abandoned or otherwise extinguished; and (3) that the claim on which the action is founded is unenforceable under the provisions of the statute of frauds, bar the refiling of the same action or claim. Logically, the nature of the dismissal founded on any of the preceding grounds is "with prejudice" because the dismissal prevents the refiling of the same action or claim. Ergo, dismissals based on the rest of the grounds enumerated are without prejudice because they do not preclude the refiling of the same action.

2. In the Answer as an affirmative defense Sec. 5. affirmative. Defenses. Defenses may either be negative or

(a) A negative defense is the specific denial of the material fact or facts alleged in the pleading of the claimant essential to his cause or causes of action. (b) An affirmative defense is an allegation of a new matter which, while hypothetically admitting the material allegations in the pleading of the claimant, would nevertheless prevent or bar recovery by him. The affirmative defenses include fraud, statute of limitations, release, payment, illegality, statute of frauds, estoppel, former recovery, discharge in bankruptcy, and any other matter by way of confession and avoidance. Sec. 6. Pleading grounds as affirmative defenses. If no motion to dismiss has been filed, any of the grounds for dismissal provided for in this Rule may be pleaded as an affirmative defense in the answer and, in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss had been filed. The dismissal of the complaint under this section shall be without prejudice to the prosecution in the same or separate action of a counterclaim pleaded in the answer. 3. By demurrer to the evidence (DOMINADOR GOMEZ vs. REMEDIOS SALCEDO, G.R. No. L-7821 December 31, 1913); RULE 33, Section 1. Demurrer to evidence. After the plaintiff has completed the presentation of his evidence, the defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have waived the right to present evidence. 4. By objection to the reception of such oral evidence ((DOMINADOR GOMEZ vs. REMEDIOS SALCEDO, G.R. No. L-7821 December 31, 1913).

Page 13 of 16

DOMINADOR GOMEZ vs. REMEDIOS SALCEDO G.R. No. L-7821 December 31, 1913 Where, however, the pleading shows on its face that the contract relied upon is oral and that it comes within the statute of frauds, the objection of the party sought to be charged may as well be taken by demurrer as by objection to the reception of evidence tending to prove its existence. When such a party sought to thus offer the defense of the statute, it would prolong the action and subject both litigants to needless expense and waste of time to allow the case to proceed to trial. It would be a mere empty formality which would produce no better or different results than a decision on the demurrer, as in neither case could the contract be enforced. That the defense may be raised by demurrer when the pleading shows on its face that the contract relied upon is oral, is the approved doctrine as is evidenced by the following authorities: Thompson vs. New South Coal Co. (135 Ala., 630; 62 L. R. A., 551; 93 A. S. R., 49); Ahrend vs. Odiorne (118 Mass., 261; 19 Am., Rep., 449); Seamans vs. Barentsen (180 N. Y., 333; 105 A. S. R., 759); International Harvester Co. of America vs. Campbell (43 Tex. Civ. App., 421). An exception to this rule is where part performance is relied upon to take contract out of the statute. (Dicken vs. McKinlay, 163 Ill., 318; 54 A. S. R., 471.) RATIFIED BY FAILURE TO OBJECT OR BY THE ACT OF CROSS-EXAMINATION Art. 1405. Contracts infringing the Statute of Frauds, referred to in No. 2 of Article 1403, are ratified by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance of benefit under them. SPOUSES TORCUATOR vs. SPOUSES G.R. No. 134219, June 08, 2005 The term "Statute of Frauds" is descriptive of statutes which require certain classes of contracts, such as agreements for the sale of real property, to be in writing. It does not deprive the parties the right to contract with respect to the matters therein involved, but merely regulates the formalities of the contract necessary to render it enforceable. The purpose of the statute is to prevent fraud and perjury in the enforcement of obligations depending for their evidence on the unassisted memory of witnesses by requiring certain enumerated contracts and transactions to be evidenced by a writing signed by the party to be charged. 22 The written note or memorandum, as contemplated by Article 1403 of the Civil Code, should embody the essentials of the contract. In the instant case, petitioners present as written evidence of the agreement the special power of attorney executed in their favor by the Salvadors and the summary of agreement allegedly initialed by respondent Remigio Bernabe. These documents do not suffice as notes or memoranda as contemplated by Article 1403 of the Civil Code. The special power of attorney does not contain the essential elements of the purported contract and, more tellingly, does not even refer to any agreement for the sale of the property. In any case, it was rendered virtually inoperable as a consequence of the Salvadors adamant refusal to part with their title to the property. The summary of agreement, on the other hand, is fatally deficient in the fundamentals and ambiguous in the rest of its terms. For one, it does not mention when the alleged consideration should be paid and transfer of ownership effected. The document does not even refer to a particular property as the object thereof. For another, it is unclear whether the supposed purchase price is P600.00, P590.00 or P570.00/square meter. The other conditions, such as payment of documentary stamp taxes, capital gains tax and other registration expenses, are likewise uncertain. Conformably with Article 1405 of the Civil Code, however, respondents acceptance of the agreement foisted by petitioners on them is deemed to have arisen from their failure to object to the testimony of petitioner Mario Torcuator on the matter and their cross-examination of said petitioner thereon. LIMKETKAI SONS MILLING, INC. vs. COURT OF APPEALS, ET AL. G.R. No. 118509 December 1, 1995 In any event, petitioner cites Abrenica vs. Gonda (34 Phil. 739 [1916]) wherein it was held that contracts infringing the Statute of Frauds are ratified when the defense fails to object, or

Page 14 of 16

asks questions on cross-examination. The succinct words of Justice Araullo still ring in judicial cadence: As no timely objection or protest was made to the admission of the testimony of the plaintiff with respect to the contract; and as the motion to strike out said evidence came too late; and, furthermore, as the defendants themselves, by the cross-questions put by their counsel to the witnesses in respect to said contract, tacitly waived their right to have it stricken out, that evidence, therefore, cannot be considered either inadmissible or illegal, and court, far from having erred in taking it into consideration and basing his judgment thereon, notwithstanding the fact that it was ordered to be stricken out during the trial, merely corrected the error he committed in ordering it to be so stricken out and complied with the rules of procedure hereinbefore cited. In the instant case, counsel for respondents cross-examined petitioner's witnesses at length on the contract itself, the purchase price, the tender of cash payment, the authority of Aromin and Revilla, and other details of the litigated contract. Under the Abrenica rule (reiterated in a number of cases, among them Talosig vs. Vda. de Nieba 43 SCRA 472 [1972]), even assuming that parol evidence was initially inadmissible, the same became competent and admissible because of the cross-examination, which elicited evidence proving the evidence of a perfected contract. The cross-examination on the contract is deemed a waiver of the defense of the Statute of Frauds (Vitug, Compendium of Civil Law and Jurisprudence, 1993 Revised Edition, supra, p 563). The reason for the rule is that as pointed out in Abrenica "if the answers of those witnesses were stricken out, the cross-examination could have no object whatsoever, and if the questions were put to the witnesses and answered by them, they could only be taken into account by connecting them with the answers given by those witnesses on direct examination" (pp. 747-748). Moreover, under Article 1403 of the Civil Code, an exception to the unenforceability of contracts pursuant to the Statute of Frauds is the existence of a written note or memorandum evidencing the contract. The memorandum may be found in several writings, not necessarily in one document. The memorandum or memoranda is/are written evidence that such a contract was entered into. STATUTE OF FRAUDS AND EVIDENCE IN ILLEGAL RECRUITMENT PEOPLE OF THE PHIL. vs. RESTITUTO C. PABALAN G.R. No. 115350, September 30, 1996 The Statute of Frauds and the rules of evidence do not require the presentation of receipts in order to prove the existence of a recruitment agreement and the procurement of fees in illegal recruitment cases. The amounts may consequently be proved by the testimony of witnesses. The finding of illegal recruitment in large scale is justified whenever the following elements are present: (1) that the offender engages in the recruitment and placement of workers as defined in Article 13(b) of the Labor Code or in any prohibited activities under Article 34 of the same code; (2) that the offender does not have a license or authority to recruit and deploy workers, either locally or overseas; and (3) that the offender commits the same against three (3) or more persons, individually or as a group. 19 Article 13(b) characterizes recruitment and placement as any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not. It will readily be noted, as earlier explained, that the exhibition of receipts is not necessary for the successful prosecution of the offense of illegal recruitment in large scale. Since all of the above elements were satisfactorily proven by the prosecution before the court a quo through the testimonies of its witnesses and by competent documents, then the non-presentation of receipts should not in any way hinder the conviction of appellant. PAROLE EVIDENCE RULE DISTINGUISHED FROM STATUTE OF FRAUDS Both the Parol Evidence Rule and the Statute of Frauds are evidentiary rules that limit a partys ability to present parol or oral evidence in varied contractual situations.

Page 15 of 16

They are different in the following respects: STATUTE OF FRAUDS The Statute of Frauds requires that certain agreements be proved by writing or by some note or memorandum thereof in order to be enforceable. Does not apply to wills. Cannot be invoked by a stranger to the contract, PAROL EVIDENCE RULE The Parole Evidence Rule has nothing to do with the manner of proving agreements. Its object is to prohibit alteration, change, modification, variation or contradiction of the terms of a written agreement by parol evidence. Applies to wills. Cannot be invoked by either party to the litigation against the other, where at least one of the parties to the suit is not a party or a privy of a party to the written instrument in question.

Page 16 of 16