FACTS:

This case involves conflicting claims between the parties involving their transaction over a parcel of land and its improvements. The respondents claim that they had purchased the property on installment pursuant to an oral contract to sell, while the petitioners insist that the amounts paid by the respondents were in payment of the latter's previous loan. The trial court ruled in favor of the petitioners, but the appellate court reversed the decision and ruled in favor of the respondents. The case under review is the decision of the Court of Appeals reversing the decision of the Regional Trial Court, ordering the petitioners to execute a deed of sale on the property in favor of the respondents. The court also ordered the cancellation of the transfer certificate of title of the petitioners and the issuance of a new one in favor of the respondents.

Facts:

The plaintiffs, Vedasto and Rolando, were allowed by the defendants to stay in a house by mere tolerance, under the condition that they would pay their electric and water consumption bills. The plaintiffs were also responsible for paying the realty tax, which were sent to them by the defendants for payment to the Batangas City government. Vedasto had recognized the defendants' right of ownership over the property and undertook to vacate it. The plaintiffs filed a complaint against the defendants for damages, claiming that the defendants unlawfully deprived them of possession and refused to accept their tender of payment for the property. The defendants filed a motion for inhibition against the presiding judge, which was granted and the case was re-raffled to another branch. During the proceedings, Redima Baytown Development Corporation intervened and filed an answer-in-intervention. The trial court admitted the answer-in-intervention, but the plaintiffs filed a motion for reconsideration, which was denied. The plaintiffs filed a petition for certiorari before the Court of Appeals, which granted the petition and denied the answer-in-intervention. Redima filed a motion for reconsideration, but it was denied by the Supreme Court. The case proceeded to trial and the plaintiffs testified on their claims of ownership and possession of the property.

The case involves an ejectment suit filed by the spouses Pamplona against Rolando Intac and his father Vedasto, seeking to recover possession of a residential property. According to the spouses Pamplona, they allowed Vedasto and his family to temporarily occupy the property, but they failed to vacate despite repeated demands. The defendants, Rolando and Vedasto, claim that they have a right to occupy the property as they are the lawful owners.

During the trial, Rolando testified that he occupied the property with his father Vedasto and did not pay any rent during their stay. He also mentioned that his mother had a quarrel with his father during the time they supposedly signed the undertaking called "Pangako ng Pag-alis." Rolando stated that he did not appeal the decision of Judge Sulit and left because his mother was still abroad and they could not afford legal representation. On the other hand, Emma Intac, Rolando's aunt, testified that Lilia, Rolando's mother and her sister, is the owner of the house.

The plaintiffs submitted their formal offer of evidence, which the defendants objected to. The trial court admitted the plaintiffs' exhibits with submarkings.

The defense presented witnesses Wilfredo Panaligan and Atty. Dimayacyac. Panaligan, a former member of the Batangas City Police Station, testified that he was requested by their Chief of Police to assist the Pamplonas in dealing with the situation in Barangay Kumintang Ibaba. He claimed to be present when Roilan, Rolando's nickname, signed the undertaking, and witnessed Vedasto signing the "Pangako ng Pag-alis." However, Panaligan admitted there were typographical errors in the document. Atty. Dimayacyac, the defendants' counsel, also testified and affirmed his Judicial Affidavit, stating that he was acquainted with the case and provided assistance in 1997.

ISSUES:

1. Whether the respondents presented sufficient evidence to establish the existence of an oral contract to sell the property.

2. Whether the transfer of the property in favor of Redima, represented by the petitioner's counsel, Atty. Dimayacyac, was null and void.

3. Whether or not there was sufficient evidence to show the existence of a partially executed contract to sell.

4. Whether or not the deed of transfer of rights from the respondents to Redima violated Article 1491 of the Civil Code.

5. Whether the petitioners have proven that the sums of money received from Lilia were payments of past debts.

6. Whether the admissions made by Roilan and Vedasto regarding the petitioners' ownership of the property negated the existence of the contract to sell between Lilia and Bibiana.

7. Whether Lilia's failure to raise the existence of the contract to sell as a defense in the unlawful detainer suit constituted an admission by silence.

8. Whether the respondent’s silence constituted admission of her lack of interest in the property.

RULING:

1. The Court of Appeals (CA) held that the respondents presented sufficient evidence to establish the existence of an oral contract to sell the property. The CA declared that the oral contract, being partially executed by virtue of the partial payments made by one of the respondents, removed it from the application of the Statute of Frauds. In addition, the CA ruled that the transfer of the property to Redima, represented by the petitioner's counsel, Atty. Dimayacyac, was null and void for violating Article 1491 of the Civil Code.

2. The appeal lacks merit. The existence of a partially executed contract to sell between the parties was sufficiently established. The Court found that Lilia sent money to Bibiana, and the latter did not deny receiving the money. The records also showed that the parties agreed for Vedasto and Roilan to occupy the property, and Lilia took steps to protect her interests in the property. As for the deed of transfer of rights, the Court upheld the CA's ruling that it violated Article 1491 of the Civil Code.

3. The petitioners have failed to prove that the sums of money received from Lilia were payments of past debts. The absence of proof led to the inference that the sums of money were for the purchase of the property, as claimed by the respondents.

4. The admissions made by Roilan and Vedasto regarding the petitioners' ownership of the property do not negate the existence of the contract to sell between Lilia and Bibiana. A contract to sell retains ownership with the seller until full payment of the purchase price, therefore, the admissions were consistent with the oral contract to sell.

5. Lilia's failure to raise the existence of the contract to sell as a defense in the unlawful detainer suit does not constitute an admission by silence. The requirements for admission by silence were not present as Lilia did not hear or see the admissions and she was not a party to the written admissions.

6. The Court held that the respondent’s silence did not constitute admission of her lack of interest in the property. The rule on admission by silence requires a mutual correspondence with the declarant. In this case, the respondent did not remain silent but instead communicated with the petitioner on the terms of payment and took steps to preserve her interest in the property. Therefore, her affirmative acts negated any claim of being silent in the face of the assault to her interest.

PRINCIPLES:

• The existence of an oral contract to sell can be established through sufficient evidence even if it is partially executed. The Statute of Frauds does not apply in such cases.

• A transfer of property can be declared null and void if it violates the provisions of Article 1491 of the Civil Code.

• The burden of proof lies on the party who asserts, and mere allegations cannot take the place of evidence.

• Preponderance of evidence refers to the weight, credit, and value of aggregate evidence and is synonymous with "greater weight of evidence" or "greater weight of credible evidence."

• The Court may settle factual disputes on appeal in certain instances, such as when the findings of fact by the lower courts are conflicting or when they are based on misapprehension of facts.

• Each party must prove their affirmative allegations, allegations cannot substitute for evidence.

• Distinctions between a contract to sell and a contract of sale: ownership is retained by the seller in a contract to sell until full payment of the price.

• The rule on admission by silence applies only when the party to be bound was carrying on a mutual correspondence with the declarant.

• Admission by silence requires a mutual correspondence with the declarant.

• The rule on admission by silence is relaxed if the party would have immediately reacted had the statements been orally made in his presence.

• Affirmative acts can negate any claim of being silent in the face of an assault to one's interest.