G.R. No. 25462, August 28, 1926
RIO Y OLABRRIETA and JUAN V. MOLINA, plaintiffs-appellants, vs. YU TEC & CO., INC., defendant-appellant.

FACTS

Plaintiff Rio y Olabrrieta (a partnership) alleged that defendant Yu Tec & Co., Inc., through its authorized agent J.V. Molina, offered to sell a parcel of land for P42,000 under specified terms (P7,000 down payment, balance payable in two years with 8% interest). Plaintiff accepted the offer within the given period and was ready to comply, but defendant refused to execute the deed and instead sold the property to defendant Calvin. Plaintiff sued for specific performance and damages. Defendant corporation raised the Statute of Frauds as a defense, arguing there was no written contract subscribed by the party to be charged. The trial court awarded damages to plaintiff but denied specific performance. Both parties appealed.

ISSUE

Whether there was a valid and enforceable contract of sale between the plaintiff and defendant corporation that satisfies the Statute of Frauds.

RULING

No. The Supreme Court reversed the trial court’s judgment and dismissed the complaint.

The Court held that no enforceable contract existed. The defendant’s written authority to agent Molina (Exhibit B) was merely an “authority to sell,” not a contract of sale, and it expressly expired on March 18, 1924. The subsequent document (Exhibit C), which outlined the price and terms, was not a contract itself and was not addressed to the plaintiff. Critically, there was no written document evidencing a perfected sale between the plaintiff and the defendant corporation that was subscribed by the defendant or its authorized agent, as required by the Statute of Frauds. Since Molina’s authority lapsed on March 18, 1924, and was never renewed in writing, he had no power to bind the defendant thereafter. Consequently, the plaintiff could not compel specific performance, and the action was dismissed.