Basic principles governing the Statute of Frauds:

 Applicable only to purely executory contracts (not to those which are either partially or totally
performed). Note: An executory contract is a contract that has not yet been fully performed or fully
executed.
 Not applicable to actions which are neither for violation nor performance of contract
o Inapplicable where:
 Ex. Verbal contract was adduced not for purpose of enforcing performance but as
basis of the lawful possession of the applicants in a registration proceeding entitling
them to have the land sold registered in their names
 Ex. In an action to compel the defendant to execute a public instrument in respect
of the land sold to the plaintiff with the right to repurchase within a certain period
so that the said instrument could properly be registered
 Defense may not be availed of by third persons – defense of SUF can be relied upon only by the
parties to the contract or their representatives or privies, or those whose rights are directly
controlled by the statute
o Under the NCC – unenforceable contracts, including those which infringe the SUF, cannot be
assailed by third persons
 Defense may be waived – by (defect of the contract may be ratified):
o Failing to object to the presentation of oral evidence to prove the contract
o Accepting the benefits under the contract
 Limited to specific transactions – cannot apply to any other transaction it enumerated in Art 1403
par 2.
o Ex not covered by SUF
 Agreement creating an easement of right of way
 Setting up of boundaries
 Oral partition of real property
 Right of first refusal
 Wills or to renunciation of partition of inheritance – not being contracts of
conveyance.

Specific contracts covered by SUF

 Agreements not to be performed within a year – from the making thereof is required to be in
writing to be enforceable under SUF
o Test: whether, under its own terms, performance is possible within a year from the making
 If yes – outside of SUF and need not be in writing to be enforceable
 Fact that it may be taken more than one year from making of contract is immaterial
as long as performance is possible under the terms
 1 year period – begins to run from the day the contract is made
o Applies only to agreement not to be performed on either side
o Effect of partial performance
 Contracts may be taken out of the SUF through performance by one party
  It must appear clearly that the full performance has been made by one
party within 1 year, as otherwise, the statute would apply
 Special promise to answer for debt of another – special promise to answer for debt, default or
miscarriage of another (not a promise to answer from one’s own debt)
o Required to be in writing or to be evidence by some note or memorandum signed by the
promisor to be enforceable against the latter
o Hence, contracts or guaranty proper and suretyship are covered by the SUF (pirma ni
guarantor or surety ang kailangan)
o Test: whether the promise is original or a collateral one
 If promise is original or an independent one (if promisor becomes primarily liable for
the payment of debt), the promise is not within the statute
 If promise is collateral to the agreement of another and promisor becomes thereby
merely a surety, the promise must be in writing (undertaking of the guarantor or
surety)
o Not applicable sa mortgage and antichresis
 Agreements in consideration of marriage
o Marriage settlement – must be in writing under the SUF
 However, donation proper nuptias is no longer governed by the SUF (because of Art
83 of the FC) but by the formalities required in ordinary donations
 Sale of goods, chattels or things in action at the price not less than P500
o Covers both tangible and intangible personal property
o Also covers the assignment of choses in action, hence, an assignment of a credit over P500 is
governed by the SUF
 Lease real property for more than a year or an interest therein and (not all transactions on real
property, only lease and sale); (also note: real property – not just land)
o Lease of real property for over one year
 Also covers renewals of lease contract
 Thus, 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 SUF
o Sale of real property or any interest therein
 Sale – consensual – perfected by mere consent – meeting as to the offer and
acceptance
 3 elements: subject matter, price, terms of payment of price
 Does not require formality for validity, except in
1. Sale of large cattle
2. Sale of parcel of land through agent where the law requires the
authority of the agent to be in writing in order for the sale to be
valid
 However, under SUF, an agreement for sale of RP or any interest therein to be
enforceable must be:
 In writing, and
 Subscribed by the party charged or by an agent
  Thus, COS of realty cannot be proven by means of witnesses but must be evidenced
by a written instrument, duly subscribed by the part charged, or by his agent, or by
secondary evidence of their contracts
 Representation as to credit of third persons – to bring within the operation of SUF, representation
must have been made by a stranger to the contract in which credit was extended, or, otherwise
stated, rep must relate to a third person’s credit
o Representation of credit of the person making the representation - not within SUF

Other contracts or agreements which require to be in some form to be enforceable (but not covered
by the SUF)

 Express trust over immovable or any interest therein – may not be proved by parol evidence;
hence, must be in writing to be enforceable
o An implied trust concerning real property may be proved by oral evidence
 Agreement on payment of interest – no interest shall be due unless it has been expressly stipulated
in writing
o Verbal agreement on payment of interest may not be enforced against the borrower against
his will
 However, if borrower pays interest voluntarily when there has been no stipulation,
payment is valid and the creditor is authorized to retain the payment

Contracts which require form only for convenience

 In Art 1358 of Civil Code – required to be in public document but only for convenience and not for
validity or enforceability
o Non-compliance with formal requisites does not adversely affect the validity of the contract
or contractual rights and obligations of the parties
o Non-appearance of parties before the notary public who notarized the deed does not
necessarily nullify nor render the parties’ transaction void
o Effect of non-recording of the instrument – registration of the instrument only adversely
affects third parties
 Formal requirements are for the benefit of third parties
 Non-compliance -does not adversely affect the validity of the contract nor the
contractual rights and obligations of the parties
 Contracts required to be in a public document for convenience
o Art 1358
 Ex. Contracts in order to create real right -
 Remedy granted under Art 1357 – the contracting parties may compel each other to observe that
form and this right may be exercised simultaneously with the action upon the contract.
o For this remedy to be exercised, the following requisites must concur
 Contract must have already been perfected
 Contract must have been valid as to form
 Contract must have been enforceable under SUF
o Enforceability is recognized as each CP is granted the right to compel the other to execute
the proper public instrument so that the valid contract of sale of registered land can be duly
registered and can bind third persons