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CRUZ vs JM TUASON & CO.

, INC Nature: Defendant-appellees appeal to dismiss plaintiffs complaint to recover expenses on the improvements from the appellees land and compel them to convey to him the 3,000 sq m of land. Facts - Plaintiff Cruz made permanent improvements on the 20 quinones land claimed by the Deudors. These amounted to Php30,400 and he also incurred expenses of Php7,781.74 - 1952- Defendants JM Tuason and Araneta availed Cruzs services to be their intermediary to make amicable settlements (compromise agreement) for them with the Deudors of Civil Case Q-135. This civil case involved 50 quinones of land where the 20 quinones was part of. He did so on the defendants promise that they will convey to him 3000sq m of the given land. - Mar 16, 1963- The compromise agreement between the Duedors and the defendants was approved but the defendants refused to convey to Cruz the 3000sq m of land that he now occupies. Cruz filed a petition against defendants - Defendants filed motion to dismiss saying: o They do not owe Cruz for the cost of the improvements he made because that transaction was between him and the Deudors. (reimbursement) o They do not need to convey to him 3000sq m of land based on their alleged agreement because it is unenforceable under the Statute of Frauds which covers the sale of real property or of an interest therein. (statute of frauds) o The plaintiffs action to compel such conveyance if it were true already prescribed because the contract started in 1952 but he filed for acquisition only in 1963. It is stated in the law that he may only file action within 10 years. Thus his action already prescribed. (statute of limitations) - Cruz commented that: o They should reimburse him for the improvements because they benefitted from it and it would be unjust enrichment on their part not to do so given he fulfilled his part. He bases it on Art2142 NCC that certain lawful voluntary and unilateral acts give rise to quasi-contracts so that no one shall be unjustly enriched or benefitted at the expense of another. He furthers that while there was no written agreement between him and the defendants, it was an agreement nonetheless thus is a form of quasicontract and extra contractual obligations arise from it. o As to the 3000sq m of land, the Statute of Frauds does not apply because it applies only to executory contracts but not where the contract has already been partly executed. Thus performance of the contract takes it out of this statute. o The period for filing action has not prescribed because under the terms of their agreement, he shall own the land as of the date of signing the agreement but the title to the 3000sq m land shall be delivered within 10 years after this signing. Now as long as this 10-year period had not elapsed yet, he shall not have any right to compel the defendants to execute or deliver the document because they had no obligation to do so. After this 10-year period elapsed can he only file action. Thus when the 10-year period ended on Mar 16, 1963, the period of prescription began only on Mar 17, 1963. o Since the contract was not in writing, he had 6 years before his cause of action prescribes. Issue Does the statute of frauds bar his cause of action? Can the defendants be compelled to convey the 3000sq m of land and to reimburse him for the developments there based on the obligation arising from the quasi-contract with Cruz?

Held NO. The Statute of Frauds does not apply to this case because though there is no evidence of the agreement between Cruz and the defendants, the contract is not considered as a sale of real property or any interest therein where there was no transaction that occurred. NO. Cruz misinterpreted Art2124. This provision states that a quasi-contract cannot emerge against one of the parties if the subject matter is already covered by another contract with another party. In this case, the defendants were correct that Cruz should have filed the motion against the Deudors on the reimbursements and they in turn would seek relief from the defendant companies for these. Because this land was already subject to the contract between Cruz and the Deudors as to the improvements, it cannot be subjected to a quasi-contract between Cruz and the defendant companies where these companies had a prior contract with the Deudors on the land as well.

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