210: LAUDICO v ARIAS
requires.
FACTS:
X, on his behalf and that of his co-owners, write a
letter to Y, giving him an option to lease their building to Z. After
some negotiation, no definite agreement was arrived at. Y
finally wrote a letter to X advising the latter that all his
propositions, as amended and supplemented were accepted.
This letter was received by X at 2:53 PM of March 6.
On that same day, at 11:25 Am, X had, in turn written a letter to
Y withdrawing the offer to lease the building. Y brought action
to compel the execution of the contract of lease.
ISSUE: Under the facts was a contract perfected between
X and Y?
RULING:
No. When X sent his letter of withdrawal to Y, X had
not yet received the letter of acceptance, and when it reached
him, he had already sent his letter of withdrawal. Before X
received notice of the acceptance, X was not yet bound by
it and consequently, he had the right to withdraw the offer.
There was no meeting of the minds through offer and
acceptance, which is the essence of the contract.
While there was an offer, there was no acceptance,
and when the latter was made and could have binding effect,
the offer was the lacking. Though both the offer and
acceptance existed, they did not meet to give birth to a
contract.
211. YUVIENGCO v DACUYCUY
FACTS:
Petitioners, owners of a parcel of land and the
building existing thereon, expressed through their
representative who wrote a letter to private respondents, the
tenants therein, their willingness to sell their property to them
for P6.5M and should decide on or before July 31, 1978
whether or not to buy the property. Private respondents replied
by telegram with the following words, "we agree to buy
property proceed Tacloban to negotiate details".
When petitioners' representative arrived with the
prepared contract to purchase and to sell, private respondents
found variance between the terms of payment and what they
had in mind, hence the bankdraft being offered for payment
was returned and the document remained unsigned by the
latter (private respondents).
ISSUE:
WON there exist a perfected contract of sale.
RULING:
NO. The telegram-reply of Yao to Atty. Gamboa's
letter of July 12, 1978 is not an absolute acceptance. Thus,
there is no meeting of the minds.
We underline the word "negotiate" advisedly, because
to Our mind it is the key word that negates and makes it legally
impossible for Us to hold that respondents' acceptance of
petitioners' offer, assuming that it was a "certain" offer indeed,
was the "absolute" one that Article 1319 above-quoted
Dictionally, the implication of "to negotiate" is
practically the opposite of the idea that an agreement has been
reached. Webster's Third International Dictionary, Vol. II (G. &
C. Merriam Co., 1971 Philippine copyright) gives the meaning
of negotiate as "to communicate or confer with another so as to
arrive at the settlement of some matter; meet with another so
as to arrive through discussion at some kind of agreement or
compromise about something; to arrange for or bring about
through conference or discussion; work at or arrive at or settle
upon by meetings and agreements or compromises ."
Importantly, it must be borne in mind that Yao King Ong's
telegram simply says "we agree to buy property." It does not
necessarily connote acceptance of the price but instead
suggests that the details were to be subject of negotiation.
212: ENRIQUEZ v SUN LIFE ASSURANCE CO.
FACTS:
On September 24, 1917, H made application to an
insurance company through its office in Manila for a life
annuity. Two days later he paid the sum of P6,000 to the
manager of the company's Manila office and was given a
receipt therefor. On November 26, 1917, the head office gave
notice of acceptance by cable to Manila. On the same date the
Manila office prepared a letter notifying H that his application
had been accepted and this was placed in the ordinary
channels for transmission, but as far as known, was never
actually mailed and was never received by the applicant. H
died on December 20, 1917.
ISSUE: Whether or not the there has been a valid offer and
acceptance??
RULING:
None. The Civil Code provides that the acceptance
made by letter binds the person making the offer only from the
date it has came to its knowledge. The contract of
life annuity was not perfected. There was no satisfactory
evidence that the applicationacceptance came to the
knowledge of Herrer.
Article 16 of the Civil Code provides that any deficiency in the
special law shall be supplied by the Code. The Insurance Code
does not provide for law on the principle of acceptance, thus
the Civil Code shall govern.
Article 1319 provides that "Consent is shown by the
concurrence of offer and acceptance with respect to the thing
and the consideration which are to constitute the contract. An
acceptance made by letter shall not bind the person making
the offer except from the time it came to his knowledge. The
contract, in such case, is presumed to have been entered into
at the place where the offer was made."
American Courts held that acceptance of offer not actually
communicated does not complete the contract but the mailing
of the acceptance. Locus Poenitrntiae is ended when
acceptance has passed beyond partys control.
Furthermore, according to the provisional receipt, three things
had to be accomplished by the insurance company before
there was a contract:
(1) There had to be a medical examination of the applicant;
(2) There had to be approval of the application by the head
office of the company; and
(3) This approval had in some way to be communicated by the
company to the applicant.
In the case, there was no letter of notification. No evidence of
knowledge. Judgment reversed. Php6000 with interest is to be
returned.
213: MARLBAROSA v CA
FACTS:
Petitioner was the president and general manager of
Philtectic Corp., a subsidiary of respondent SEADC. Being an
officer, he was issued a car and membership in the
Architectural Center. One day he intimidated with the vice-
chairman of the BoD of respondent his desire to retire and he
requested that his incentive compensation be paid to him as
president of Philtectic. He then tendered his resignation to said
VP. One of the officer met with petitioner and informed him that
he will get roughly around P395k.
Following his resignation, the VP sent a letter-offer to
petitioner stating therein acceptance of petitioners resignation
and advised him that he is entitled to P251k as his incentive
compensation. In the same letter, the VP proposed the
satisfaction of his incentive by giving him the car the company
issued and the membership in the Architectural Center will be
transferred to him, instead of cash. Petitioner was required by
respondent through the VP to affix his signature in the letter if
he was agreeable to the proposal. The letter was given to the
petitioner by the officer who told him that he was supposed to
get P395k.Petitioner was dismayed when he received the
letter-offer and refused to sign it as required by respondent if
he was agreeable to it.
Two weeks later, respondent company demanded the
return the car and turn over the membership in the
Architectural Center. Petitioner wrote the counsel of
respondent telling him that he cannot comply with the demand
since he already accepted the offer fourteen (14) days after it
was made. In his letter, he enclosed a Xerox of the original with
his affixed signature as required.
With his refusal, respondent instituted an action for
recovery with replevin. In his Answer to the complaint, the
petitioner, as defendant therein, alleged that he had already
agreed on March 28, 1990 to the March 14, 1990 Letter-offer
of the respondent, the plaintiff therein, and had notified the said
plaintiff of his acceptance; hence, he had the right to the
possession of the car.
After the trial, judgment was rendered against
petitioner. The trial court opined that there existed no perfected
contract between the petitioner and the respondent on the
latters March 14, 1990 Letter-offer for failure of the petitioner
to effectively notify the respondent of his acceptance of said
letter-offer before the respondent withdrew the same. He
appealed to the CA which affirmed the decision of the trial
court. Hence, this present appeal.
ISSUES:
Whether or not there was a valid acceptance on his
part of the March 14, 1990 Letter-offer of the
respondent?
Whether or not there was an effective withdrawal by
the respondent of said letter-offer?
RULING:
No. Under Article 1319 of the New Civil Code, the
consent by a party is manifested by the meeting of the offer
and the acceptance upon the thing and the cause which are to
constitute the contract. An offer may be reached at any time
until it is accepted. An offer that is not accepted does not give
rise to a consent. To produce a contract, there must be
acceptance of the offer which may be express or implied but
must not qualify the terms of the offer. The acceptance must be
absolute, unconditional and without variance of any sort from
the offer. The acceptance of an offer must be made known to
the offeror. Unless the offeror knows of the acceptance, there
is no meeting of the minds of the parties, no real concurrence
of offer and acceptance.
The offeror may withdraw its offer and revoke the
same before acceptance thereof by the offeree. The contract is
perfected only from the time an acceptance of an offer is made
known to the offeror. If an offeror prescribes the exclusive
manner in which acceptance of his offer shall be indicated by
the offeree, an acceptance of the offer in the manner
prescribed will bind the offeror. On the other hand, an attempt
on the part of the offeree to accept the offer in a different
manner does not bind the offeror as the absence of the
meeting of the minds on the altered type of acceptance.
An offer made inter praesentes must be accepted
immediately. If the parties intended that there should be an
express acceptance, the contract will be perfected only upon
knowledge by the offeror of the express acceptance by the
offeree of the offer. An acceptance which is not made in the
manner prescribed by the offeror is not effective but constitutes
a counter-offer which the offeror may accept or reject.
The contract is not perfected if the offeror revokes or
withdraws its offer and the revocation or withdrawal of the
offeror is the first to reach the offeree.
In the case at bar, the respondent made its offer
through its VP. On March 16, the officer handed over the
original letter-offer to petitioner. The respondent required the
petitioner to accept by affixing his signature and the date in the
letter offer, thus foreclosing an implied acceptance or any other
mode of acceptance. And it is for a fact that the petitioner did
not accept or reject the offer for he needed time to decide
whether to accept or reject. Although the petitioner claims that
he had affixed his conformity to the letter-offer on March 28,
1990, the petitioner failed to transmit the said copy to the
respondent. It was only on April 7, 1990 when the petitioner
appended to his letter to the respondent a copy of the said
March 14, 1990 Letter-offer bearing his conformity that he
notified the respondent of his acceptance to said offer. But
then, the respondent, through Philtectic Corporation, had
already withdrawn its offer and had already notified the
petitioner of said withdrawal via respondents letter dated April
4, 1990 which was delivered to the petitioner on the same day.
Indubitably, there was no contract perfected by the parties on
the March 14, 1990 Letter-offer of the respondent.
 On the second issue. It is necessarily so because
there was no need for the respondent to withdraw its offer
because the petitioner had already rejected the respondents
offer on March 16, 1990 when the petitioner received the
original of the March 14, 1990 Letter-offer of the respondent
without the petitioner affixing his signature on the space
therefor.
214: SANCHEZ v RIGOR
FACTS:
Parties executed an instrument, entitled Option to
Purchase, whereby defendant "agreed, promised and
committed . . . to sell" to Sanchez, for the sum of P1,510.00, a
parcel of land within two (2) years from said date with the
understanding that said option shall be deemed "terminated
and elapsed," if "Sanchez shall fail to exercise his right to buy
the property" within the stipulated period. Defendant refused to
accept payments made by plaintiff. Consequently, plaintiff
commenced an action for specific performance and damages
against defendant.
Defendant alleged that the contract between the parties "is a
unilateral promise to sell, and the same being unsupported by
any valuable consideration, by force of the New Civil Code, is
null and void".
ISSUE:
WON the promise contained in the contract is
reciprocally demandable, pursuant to the first paragraph of
Article 1479.
RULING:
Yes. As held in the case of Atkins, Kroll and Co., Inc.
v. Cua Hian Tek:
. . .an option is unilateral: a promise to sell at the
price fixed whenever the offeree should decide to
exercise his option within the specified time. After
accepting the promise and before he exercises his
option, the holder of the option is not bound to buy.
He is free either to buy or not to buy later. In this case
however, upon accepting herein petitioner's offer a
bilateral promise to sell and to buy ensued, and the
respondent ipso facto assumed the obligation of a
purchaser. He did not just get the right subsequently
to buy or not to buy. It was not a mere option then; it
was bilateral contract of sale.
'If the option is given without a consideration, it is a
mere offer of a contract of sale, which is not binding
until accepted. If, however, acceptance is made
before a withdrawal, it constitutes a binding contract
of sale, even though the option was not supported by
a sufficient consideration. . . . ' (77 Corpus Juris
Secundum p. 652. See also 27 Ruling Case Law 339
and cases cited.')
The concurrence of both acts the offer and the
acceptance could at all events have generated a
contract.
In other words, since there may be no valid contract
without a cause or consideration, the promisor is not bound by
his promise and may, accordingly, withdraw it. Pending notice
of its withdrawal, his accepted promise partakes, however, of
the nature of an offer to sell which, if accepted, results in a
perfected contract of sale.
215: LEOQUINCO v POSTAL SAVINGS
FACTS:
Plaintiff alleged that he was the highest bidder at a
public auction held by the defendants for the sale of a piece or
parcel of land; that in Resolution No. 31 of the board of
directors of the Bank, authorizing the sale of said property at
public auction, as well as in the public notice announcing said
sale, the board of directors have expressly reserved to
themselves the right to reject any and all bids; that as such
highest bidder at said auction, he wrote a letter to the
defendants advising that he was ready to tender payment for
the land as soon as the deed of sale of the same in his favor is
executed and delivered by the defendants; that the defendants
refused to execute the deed in spite of requests made therefor
by him.
As a special defense, the defendants alleged that in
Resolution No. 31 of the board of directors of the Postal
Savings Bank, authorizing the sale at public auction of the
property in question, as well as in the notice announcing said
sale, the defendants expressly reserved to themselves "the
right to reject any and all bids," and that they never accepted
the bid or offer of the plaintiff.
ISSUE:
WON Resolution No. 31 of the board of directors of
the Postal Savings Bank is binding upon appellant.
RULING:
Yes. Appellant set forth and admitted in his pleadings
that in the resolution adopted by the board of directors
authorizing the sale at public auction of the land, as well as in
the notice announcing the auction, the appellees had expressly
reserved to themselves the right to reject any and all bids. By
taking part in the auction and offering his bid, the appellant
voluntarily submitted to the terms and conditions of the auction
sale, announced in the notice, and clearly acknowledged the
right so reserved to the appellees. The appellees, making use
of that right, rejected his offer. Clearly, the appellant has no
ground of action to compel them to execute a deed of sale of
the land in his favor, nor to compel them to accept his bid or
offer. "The owner of property offered for sale at auction has the
right to prescribe the manner, conditions and terms of sale, and
where these are reasonable and are made known to the buyer,
they are binding upon him, and he cannot acquire a title in
opposition to them, and against the consent of the owner. . . ."
(Farr vs. John, 23 Iowa, 286; Batemann, on Auctions, p. 2; 6
Corpus Juris, p. 827.)
216: DANTIS v MAGHINANG
FACTS:
Rogelio Dantis alleged that he was the registered
owner of a parcel of land covered by Transfer Certificate of
Title located in San Miguel, Bulacan. According to him, he
acquired ownership of the property through a deed of
extrajudicial partition of the estate of his deceased father,
Emilio Dantis. He had been paying the realty taxes on the said
property but Julio, Jr. occupied and built a house on a portion
of his property without any right at all. Rogelio alleged that
demands were made upon Julio, Jr. to vacate the premises but
the same fell on deaf ears and that the acts of Julio, Jr. had
created a cloud of doubt over his title and right of possession
of his property. Rogelio, thus, prayed that judgment be
rendered declaring him to be the true and real owner of the
said parcel of land covered.
In his Answer Julio, Jr. denied the material allegations
of the complaint. By way of an affirmative defense, he claimed
that he was the actual owner said parcel of land. According to
him, he had been in open and continuous possession of the
property for almost thirty (30) years; The land was sold by
Rogelios father, Emilio, to his father, Julio Sr. In the affidavit,
affiant Ignacio Dantis, alleged that Emilio Dantis agreed to sell
352 square meters of the lot to Julio Maghinang on installment.
Defendant was then 11 years old in 1952. Julio Jr. admitted
that the affidavit was not signed by the alleged vendor, Emilio
Dantis, the father of Rogelio Dantis. The receipt he presented
was admittedly a mere photocopy.
Julio Jr. presented an undated handwritten receipt of
initial downpayment in the amount of 100.00 supposedly
issued by Emilio to Julio, Sr. in connection with the sale of the
subject lot. Rogelio, on the other hand, argues that even if
Exhibit "4" would be considered as competent and admissible
evidence, still, it would not be an adequate proof of the
existence of the alleged oral contract of sale because it failed
to provide a description of the subject lot, including its metes
and bounds, as well as its full price or consideration.
ISSUES:
1. Whether there is a perfected contract of sale between Emilio
and Julio, Sr.
2. Who is the rightful ownership of the subject lot?
RULING:
The petition is meritorious. The Supreme Court ruled
in favor of Rogelio. By the contract of sale, one of the
contracting parties obligates himself to transfer the ownership
of, and to deliver, a determinate thing, and the other to pay
therefor a price certain in money or its equivalent. A contract of
sale is a consensual contract and, thus, is perfected by mere
consent which is manifested by the meeting of the offer and
the acceptance upon the thing and the cause which are to
constitute the contract. Until the contract of sale is perfected, it
cannot, as an independent source of obligation, serve as a
binding juridical relation between the parties.
The essential elements of a contract of sale are: The
absence of any of the essential elements shall negate the
existence of a perfected contract of sale.
a) Consent or meeting of the minds, that is, consent to
transfer ownership in exchange for the price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
Seemingly, Julio, Jr. wanted to prove the sale by a receipt
when it should be the receipt that should further corroborate
the existence of the sale. At best, his testimony only alleges
but does not prove the existence of the verbal agreement.
Julio, Jr. miserably failed to establish by preponderance of
evidence that there was a meeting of the minds of the parties
as to the subject matter and the purchase price.
The above document would readily show that it does not
specify a determinate subject matter. Nowhere does it provide
a description of the property subject of the sale, including its
metes and bounds, as well as its total area..
In Swedish Match, AB v. Court of Appeals,37 the Court ruled
that the manner of payment of the purchase price was an
essential element before a valid and binding contract of sale
could exist. The Civil Code does not explicitly provide that the
minds of the contracting parties must also meet on the terms or
manner of payment of the price, the same is needed,
otherwise, there is no sale. An agreement anent the manner of
payment goes into the price so much so that a disagreement
on the manner of payment is tantamount to a failure to agree
on the price
The fact, therefore, that the petitioners delivered to
the respondent the sum ofP10,000.00 as part of the down-
payment that they had to pay cannot be considered as
sufficient proof of the perfection of any purchase and sale
agreement between the parties herein under Art. 1482 of the
new Civil Code, as the petitioners themselves admit that some
essential matter - the terms of payment - still had to be
mutually covenanted. WHEREFORE, the petition is
GRANTED.