FACTS:

Anselma Godines died leaving a parcel of residential lot. Respondent spouses Platon and Matilde Demaymay were in possession of the land since Anselma obtained a loan from Matilde. The lease agreement was not reduced into writing. Petitioners found out that Tax Declaration No. 6111 under Anselma's name was cancelled and Tax Declaration No. 7194 was issued under Matilde's name. It was also discovered that the correct area of the land was 332 square meters, not 68 square meters as indicated in Tax Declaration No. 6111. Petitioners filed a complaint for recovery of ownership and possession against the spouses Demaymay. The Municipal Circuit Trial Court (MCTC) dismissed the case on the ground that the cause of action fell under the jurisdiction of the Regional Trial Court (RTC). The RTC reversed the MCTC's decision. The MCTC rendered a decision in favor of the petitioners, declaring them as the owners of the disputed property. The spouses Demaymay filed an appeal with the RTC, but it was dismissed for lack of merit. The Court of Appeals granted the spouses Demaymay's petition and recognized them as the owners of the subject property. The petitioners filed a petition for review with the Supreme Court.

ISSUES:

1. Whether the CA gravely erred in ruling that the heirs of Anselma are bound by the oral contract of sale allegedly executed in favor of the spouses Demaymay.

RULING:

1. The Supreme Court denied the petition for lack of merit, affirming the decision of the Court of Appeals. The Court held that there was sufficient evidence to prove the existence of an oral contract of sale between Anselma and the spouses Demaymay, and that the heirs of Anselma are bound by this contract. The Court ruled that the lack of a written contract does not invalidate the transaction, as an oral contract of sale is valid under the law. It also held that the heirs of Anselma failed to prove that there was fraud or bad faith on the part of the spouses Demaymay. Therefore, the Court upheld the CA's ruling that the spouses Demaymay are the owners of the disputed property and are entitled to its possession, and ordered the heirs of Anselma to execute a Deed of Absolute Sale for the transfer of the property to the spouses Demaymay.

PRINCIPLES: