FACTS:

The spouses Carlos and Felicitas Valenzuela (hereinafter referred to as "Valenzuelas") are the registered owners of a residential house and lot in Angeles City, Pampanga. They wrote to Aurelia Enriquez, a licensed real estate agent, in 1979 to look for buyers for their property for P500,000.00. Enriquez found the Timbol couple (herein referred to as "Timbols") who were interested in buying the property for the said amount. The Timbols agreed to take care of the taxes, agent's commission, and other expenses. On February 10, 1980, the Valenzuelas were informed by Enriquez about the Timbols' offer. On March 6, 1980, the Valenzuelas sent a letter confirming their acceptance of the offer and stating that the Timbols will pay in cash and take care of the mentioned expenses. Enriquez received a P10,000.00 check as "earnest money" from the Timbols, which was acknowledged in a "Binding Receipt to the sale of Lot" executed on March 7, 1980. However, when the deed of sale was presented to the Valenzuelas, they refused to sign it because they wanted the stated consideration to be P500,000.00 and not a reduced amount of P120,000.00. After several postponements, the Timbols eventually agreed to indicate the amount of P500,000.00 on the deed of sale, and the signing was scheduled on May 8, 1980. However, the Valenzuelas left for Canada on May 10, 1980, without signing the deed of sale. The Timbols and Enriquez filed an action for specific performance and damages against the Valenzuelas. The trial court ruled in favor of the Timbols and ordered the Valenzuelas to sign and deliver the deed of sale. The Court of Appeals affirmed with modification. The Valenzuelas filed a petition for review on certiorari before the Supreme Court, which was denied.

ISSUES:

1. Whether a contract of sale had been perfected when the parties had differing views on the price and expenses to be shouldered.

2. Whether the contract of sale was enforceable under the Statute of Frauds for not being reduced to writing.

RULING:

1. The Court ruled that the contract of sale had been perfected because the intention of the parties was to agree on a price of P500,000 net of taxes, commissions, and expenses to be shouldered by the Timbols. This was supported by the fact that the Valenzuelas accepted the offer of P500,000 net of taxes and expenses and the Timbols agreed to have the amount of P500,000 stated in the deed of sale.

2. The Court held that the Statute of Frauds, which applies to executory contracts, could not be raised as a defense in this case because there has been partial performance by the Timbols. They made a down payment of P10,000 which was known and accepted by the Valenzuelas. The Valenzuelas' failure to revoke the authority of the real estate agent to receive the down payment amounted to an admission and ratification of such authority.

PRINCIPLES:

• In determining the existence of a contract, the intention of the parties should be analyzed, particularly the intention behind the price and the expenses to be shouldered by the buyer.

• The Statute of Frauds applies only to executory contracts and partial performance may remove the defense of the Statute of Frauds.