• This case involves a conflict between the heirs of a registered landowner and the current possessors who claim ownership based on an unwritten sale made decades ago. The Supreme Court reversed the decisions of the lower courts, which had favored the heirs based on the land title. The Court ruled that the unwritten sale was valid and enforceable because it was an "executed contract" (possession was transferred), making the Statute of Frauds inapplicable. However, since the buyers made most payments to an unauthorized relative after the owner's death, the Court ordered them to pay the remaining balance with legal interest to the rightful heirs to perfect their ownership.

• The Unwritten Sale: In 1972, Marcos Batara orally agreed to sell his one-hectare lot to his nephew, Benedicto Ocampo, for PHP 40,000.00 in installments. Benedicto paid an initial PHP 3,000.00 directly to Marcos, who then gave him the owner's copy of the land title (TCT).
• Death of Seller & Subsequent Payments: Marcos died in 1974. Benedicto continued making installment payments until 1985, but remitted them to Marcos's brother, Marcelo, who was caring for Marcos's young daughter, Noblesa.
• Possession and Discovery: Benedicto's wife took possession of the land in 1982. Marcos's children, Noblesa and Ernesto, were unaware of their father's property until 2007, when Noblesa received a notice for tax arrearages. Upon discovering Benedicto's occupation, she demanded he vacate.

• City Court & RTC Rulings: Both the city court and the RTC ruled in favor of the heirs (Noblesa and Ernesto). They held that the heirs had a better right to possession based on the TCT in their father's name and that the unwritten sale to Benedicto was not sufficiently proven and unenforceable.
• Court of Appeals (CA) Ruling: The CA affirmed the lower courts' decisions, adding that Benedicto acted in bad faith by making payments to Marcelo, who had no authority to receive them.

• Is an unwritten (oral) sale of real property enforceable if it has been partially or fully executed?
• Are payments made to a deceased seller's relative, who is not a legal representative or guardian, valid to extinguish the buyer's obligation?

The Supreme Court GRANTED the petition and REVERSED the lower courts' decisions.

• Unwritten Sale is Valid and Enforceable: The Court ruled that the Statute of Frauds (which requires sales of real property to be in writing) does not apply because the contract was already *executed*. The transfer of possession of the lot and the owner's title certificate to Benedicto served as clear indicators that the oral sale had been performed. Therefore, parol (oral) evidence was admissible to prove the sale.
• Payments to Unauthorized Person are Ineffective: The payments Benedicto made to Marcelo (the uncle) after Marcos's death were invalid. Marcelo had no legal authority, express or implied, to receive payments on behalf of Marcos or his heirs. Therefore, the balance of the purchase price (PHP 37,000.00) remains unpaid.
• Final Judgment: To do justice, the Court ordered Benedicto and Daisy to pay the remaining PHP 37,000.00 plus legal interest to the heirs, Noblesa and Ernesto. Upon full payment, the heirs are ordered to execute a formal deed of sale in favor of the Ocampos.

• Statute of Frauds (Art. 1403, Civil Code): This rule requires certain contracts, like the sale of real property, to be in writing to be enforceable by action. However, it only applies to *executory* (not yet performed) contracts, not to *executed* (fully or partially performed) contracts.
• Executed Contract: An oral sale of land is considered executed when there is delivery and possession of the property, and/or acceptance of benefits (like payments). Such a sale is valid and enforceable between the parties.
• Payment to an Unauthorized Person: Payment, to be valid, must be made to the creditor or a person authorized by them or by law. Payment to a third person without authority does not extinguish the obligation to the creditor.