8/2/2019 no v. Espiritu (Aly)

1/1

CONSTANTINO V. ESPIRITU (1971)FACTS

Pastor Constantino conveyed a two-storey house and four subdivision lots, for a consideration ofP8000, to Herminia Espiritu, with the understanding that Espiritu was to hold the properties in trust fortheir illegitimate son, Pastor Constantino, Jr., who was still unborn at the time of the conveyance.

Espiritu mortgaged the properties to secure payment of two loans, and thereafter offered them for sale.

Constantino filed a complaint to restrain Espiritu from further alienating or disposing of the properties,and to order her to execute a deed of absolute sale in favor of Pastor Jr., 5y/o at the time of filing.

Espiritu moved to dismiss the complaint on the ground that the complaint stated no cause of action,Pastor Jr. not having been included as a party-plaintiff, and also that the cause of action wasunenforceable under the Statute of Frauds.

Constantino opposed the motion to dismiss, arguing that the Statute of Frauds does not apply.

The Trial Court dismissed the complaint.

Constantino filed for the admission of an amended complaint, including Pastor Jr. as co-plaintiff.

Espiritu filed an opposition on the ground that the amendment was not an inclusion but a substitution ofthe plaintiff. And as Pastor Jr. had no interest in the subject matter, substitution could not be allowed.

Constantino answered that her ground for opposition was purely technical, so substitution could beallowed under the Rules of Court.

The Trial Court denied Constantinos motion for the admission of an amended complaint.

ISSUES + RATIO1. WON Constantino can bring this action to compel Espiritu to convey the properties to Pastor Jr. YES

The contract between Constantino and Espiritu was a contract pour autrui (Lawyers.com definition: acontract, or provision in a contract, that confers a benefit on a third-party beneficiary), although couched in theform of a deed of absolute sale. It is a general rule that one of the parties to a contract is entitled to bring anaction for its enforcement to prevent its breach. So here, where the contract contained a stipulation pour autruithe rule is amplified in the sense that the third person for whose benefit the contract was entered into may alsodemand its fulfillment. This is consistent with the decision in Echaus v. Gan, which had a similar factual milieu.

2. WON the contract of sale was subject to the agreement that Espiritu would hold the properties in trusfor Pastor, Jr. Question of fact to be determined by the Trial Court

3. WON the contract is not enforceable by reason of the Statute of Frauds NOThe contract had already been partially performed by the execution of the deed of sale.

HELDDecision of the Trial Court set aside, and remanded for further proceedings (Issue 2).