TL;DR

The Supreme Court affirmed that a verbal agreement among heirs to divide inherited property is legally valid and binding in the Philippines, even without a written contract. This means that if heirs reach a consensus on how to distribute the estate of a deceased relative during mediation or discussions, this agreement is enforceable, even if one heir later refuses to sign a formal written compromise agreement. This ruling underscores the importance of good faith and keeping one’s word in family inheritance matters, as oral agreements, once proven, carry the same weight as written ones in the eyes of the law.

When Spoken Agreements Speak Louder Than Unsigned Documents: Upholding Oral Partition Among Heirs

The case of Fajardo v. Cua-Malate revolves around a dispute among siblings regarding the estate of their deceased mother, Ceferina. After Ceferina passed away intestate, her daughter Belen Cua-Malate initiated legal proceedings seeking the partition and accounting of her mother’s properties. While most siblings were amenable to an amicable settlement, Victoria Fajardo later contested a compromise agreement, arguing it wasn’t binding on her because she hadn’t signed the written document. The central legal question became: can an oral agreement among heirs regarding property partition be considered valid and enforceable in the Philippines, even if not formalized in writing by all parties?

The Regional Trial Court (RTC) and the Court of Appeals (CA) both ruled in favor of the compromise agreement, a decision ultimately upheld by the Supreme Court. The lower courts found that during mediation, all siblings, including Victoria, had indeed reached a verbal agreement on how to partition their mother’s estate. This oral agreement was reached during several mediation conferences at the Philippine Mediation Center (PMC), where all parties and their counsels were present. The written Compromise Agreement was simply a formalization of this pre-existing oral accord. The RTC emphasized that Victoria’s absence at the signing was due to financial constraints, not disagreement with the terms. The CA corroborated this, stating that evidence showed a “valid oral partition” had occurred, and the written document merely transcribed the oral agreement.

The Supreme Court anchored its decision on established jurisprudence and the provisions of the Rules of Court. Crucially, the Court cited Vda. de Reyes v. Court of Appeals, reiterating that Philippine law does not mandate a written partition for validity among heirs.

“an oral partition may be valid and binding upon the heirs; there is no law that requires partition among heirs to be in writing to be valid.”

Referencing Hernandez v. Andal, the Court further clarified that Rule 74, Section 1 of the Rules of Court, concerning extrajudicial settlements, contains no requirement for written formality for partition validity. This legal principle distinguishes partition from a typical conveyance of real property. Partition is seen as a confirmation of existing rights rather than a transfer of property between parties, thus falling outside the ambit of the Statute of Frauds, which requires certain agreements, including real estate sales, to be in writing to be enforceable. The Court noted Victoria’s failure to present convincing evidence against the factual findings of the lower courts that an oral agreement had been reached. Her silence and inaction between the mediator’s order to draft the agreement and the RTC judgment further weakened her claim.

Moreover, the Supreme Court highlighted the equitable principle that “courts of equity have enforced oral partition when it has been completely or partly performed,” citing Hernandez v. Andal again. The Court acknowledged Belen’s assertion of partial performance of the compromise agreement, which Victoria did not refute. This element of partial performance further solidified the enforceability of the oral partition. In essence, the Supreme Court’s ruling in Fajardo v. Cua-Malate reinforces the validity and binding nature of oral partition agreements among heirs in the Philippines. It underscores that when heirs, through mediation and mutual consent, reach a clear understanding on estate division, such agreements are legally sound, even if one party later attempts to retract based on the absence of a signature on a written document. This case serves as a reminder that verbal commitments in inheritance matters, particularly when corroborated by evidence of agreement and partial performance, hold significant legal weight.

FAQs

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Fajardo v. Cua-Malate, G.R. No. 213666, March 27, 2019