LINA PEÑALBER vs.

QUIRINO RAMOS, LETICIA PEÑALBER, store by the petitioner, on the condition that the stocks and
and BARTEX INC. merchandise of the store will be inventoried, and out of the
G.R. No. 178645. January 30, 2009 proceeds of the sales thereof, respondent spouses Ramos shall pay
Chico-Nazario, J petitioner’s outstanding obligations and liabilities. After settling and
paying the obligations and liabilities of petitioner, respondent
Doctrine: The requirement in Article 1443 that the express trust spouses Ramos bought the Bonifacio property from Mendoza out of
concerning an immovable or an interest therein be in writing is their own funds.
merely for purposes of proof, not for the validity of the trust
agreement. RTC ruled in favor of petitioner. RTC denied respondent spouses
Ramos’ Motion for
Facts: Reconsideration for lack of merit, ratiocinating that respondent
Petitioner operated a hardware store in a building (Bonifacio spouses Ramos failed to interpose timely objections when
property) which is owned by Mendoza – lessor. Petitioner allowed petitioner testified on their alleged verbal agreement regarding the
spouses Ramos (respondent) to manage the hardware store. purchase of the Bonifacio property. As such, respondent spouses
Ramos were deemed to have waived such objections, which cannot
Mendoza put the property for sale. Petitioner did not have enough be raised anymore in their Motion for Reconsideration. CA reversed
cash so she entered into a verbal contract with the respondent with and ruled in favor of respondents.
the following terms:
ISSUE: Whether or not petitioner proved the existence of
[1.] The lot would be bought [by herein respondent spouses Ramos] express trust involving immovable through her parol evidence.
for and in behalf of [herein petitioner];
[2.] The consideration of P80,000.00 for said lot would be paid by HELD:
[respondent spouses Ramos] from the accumulated earnings of the NO. However, in accordance with Article 1443 of the Civil Code,
store; when an express trust concerns an immovable property or any
[3.] Since [respondent spouses Ramos] have the better credit interest therein, the same may not be proved by parol or oral
standing, they would be made to appear in the Deed of Sale as the evidence.
vendees so that the title to be issued in their names could be used
by [them] to secure a loan with which to build a bigger building and In the instant case, petitioner maintains that she was able to prove
expand the business of [petitioner]. the existence of a trust agreement between her and respondent
spouses Ramos. She calls attention to the fact that respondent
Respondent entered into a contract of sale with Mendoza and titles spouses Ramos could not account for the P116,946.15 difference in
were issued in their favor. And they returned the management of the beginning inventory and the second inventory of the stocks of
hardware store to petitioner. the hardware store, and they failed to present proof to support
their allegation that the amount was used to pay the other
Petitioner asserted that the Bonifacio property was fully paid out of obligations of petitioner. As respondent spouses Ramos never
the funds of the store and if respondent spouses Ramos had given denied the existence of the P116,946.15 difference, petitioner
any amount for the purchase price of the said property, they had contends that they have the burden of proving where this amount
already sufficiently reimbursed themselves from the funds of the had gone, if indeed they did not use the same to buy the Bonifacio
store. Consequently, petitioner demanded from respondent property. Petitioner asserts that given the respondent spouses
spouses Ramos the reconveyance of the title to the Bonifacio Ramos’ failure to discharge such burden, the only conclusion would
property to her but the latter unjustifiably refused. Petitioner be that they did use the amount to purchase the Bonifacio
insisted that respondents were in reality mere trustees of the property.
Bonifacio property.
It bears stressing that petitioner has the burden of proving her
Respondent spouses Ramos contended that they were given not cause of action in the instant case and she may not rely on the
only the management, but also the full ownership of the hardware weakness of the defense of respondent spouses Ramos. Burden of
proof is the duty of any party to present evidence to establish his evidence to support the contract covered by the statute, and
claim or defense by the amount of evidence required by law, which thereby permit such contract to be proved orally, it will be just as
is preponderance of evidence in civil cases. Preponderance of binding upon the parties as if it had been reduced to writing.
evidence is the weight, credit, and value of the aggregate evidence
on either side and is usually considered to be synonymous with the Even though that the respondents failed to object to the
term “greater weight of the evidence” or “greater weight of the presentation of parol evidence, the Court is not persuaded by the
credible evidence. It is evidence which is more convincing to the oral evidences presented by petitioner proving the existence of
court as worthy of belief than that which is offered in opposition contract.
thereto. Therefore, the party, whether plaintiff or defendant, who
asserts the affirmative of the issue has the burden of proof to
obtain a favorable judgment. For the plaintiff, the burden of proof
never parts.39 For the defendant, an affirmative defense is one
which is not a denial of an essential ingredient in the plaintiff’s
cause of action, but one which, if established, will be a good
defense i.e., an avoidance of the claim.

From the allegations of the petitioner’s Complaint in Civil Case No.

3672, the alleged verbal trust agreement between petitioner and
respondent spouses Ramos is in the nature of an express trust as
petitioner explicitly agreed therein to allow the respondent spouses
Ramos to acquire title to the Bonifacio property in their names, but
to hold the same property for petitioner’s benefit. Given that the
alleged trust concerns an immovable property, however,
respondent spouses Ramos counter that the same is unenforceable
since the agreement was made verbally and no parol evidence may
be admitted to prove the existence of an express trust concerning
an immovable property or any interest therein.

On this score, we subscribe to the ruling of the RTC in its Order

dated 17 July 2000 that said spouses were deemed to have waived
their objection to the parol evidence as they failed to timely object
when petitioner testified on the said verbal agreement. The
requirement in Article 1443 that the express trust concerning an
immovable or an interest therein be in writing is merely for
purposes of proof, not for the validity of the trust agreement.

Therefore, the said article is in the nature of a statute of frauds.

The term statute of frauds is descriptive of statutes which require
certain classes of contracts to be in writing. 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.41 The effect of
non-compliance is simply that no action can be proved unless the
requirement is complied with. Oral evidence of the contract will be
excluded upon timely objection. But if the parties to the action,
during the trial, make no objection to the admissibility of the oral