PASTOR B. CONSTANTINO vs. HERMINIA ESPIRITU
Issue: May those who are not parties to a contract be benefited by said contract?
Facts of the case: Pastor Constantino sold two parcels of land to Herminia Espiritu, on the condition that the land will be held in trust for their already conceived but as yet unborn illegitimate son. Espiritu took two mortgages on the land and then offered them for sale. Constantino asked the court to: one, issue a temporary restraining order to stop the sale of the lands; and two: compel Espiritu to execute a deed of absolute sale to Pastor Constantino Jr., then two years old.
Espiritu moved to dismiss the case on two grounds: Pastor Jr. was not a party to the suit; and the Statute on Frauds (which basically says that some contracts, including those involving land, should be in writing; and signed by all parties bound by the contracts).
Constantino argued that what was involved was an implied trust under Art. 1453. The trial court dismissed the complaint. Constantino then filed a motion for an amended complaint, to have his son Pastor Jr. included in the suit. The trial court dismissed the motion, and the case was appealed to the Supreme Court.
Ratio: The court ruled that the contract appears to be a contract pour autrui, although couched in the form of a deed of absolute sale, and appellant’s action was, in effect, one for specific performance.
The court held that that the Statute of Frauds was not a strong defense as it was “clear upon the facts alleged in the amended complaint that the contract between the parties had already been partially performed by the execution of the deed of sale, the action brought below being only for the enforcement of another phase thereof, namely, the execution by appellee of a deed of conveyance in favor of beneficiary thereunder.” Whether or not the properties were sold to be held in trust for their child was a matter of fact that should be proved in court.
Decision: Case remanded to the lower court for further trial.