You are on page 1of 2

2.

MALBAROSA V CA
GR NO: 125761
APRIL 30,2003
MJB
Topic:
Plaintiff-Appellant (Petitioner): Salvador Malbarosa
Defendant-Appellees(Respondent) : Hon Court of Appeals and S.E.A Development Corp
Ponente: Callejo, Sr J
RECIT-READY: Petitioner was ordered by the trial court to return the subject car assigned to him by respondent for his failure
to agree on the letter-offer of the respondent for an incentive compensation in the amount of P251,057.67, in order that the
said car shall be transferred to him. The trial court ruled that there existed no perfected contract between the petitioner and
the respondent for failure of the petitioner to effectively notify the respondent of his acceptance of the letter-offer before the
respondent withdrew the same. The Court of Appeals (CA) affirmed the decision of the trial court. Hence, this petition for
review on certiorari. In affirming the decision of the CA, the Supreme Court ruled that 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. 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. The acceptance of the offeree of the offer after knowledge of the revocation or withdrawal of the
offer is inefficacious.
DOCTRINE:
 There is no contract unless the following requisites concur: (1) consent of the contracting parties; (2) object certain
which is the subject matter of the contract (3) cause of the obligation which is established (Art. 1318)
 Requirements of a valid acceptance to wit:
o may be express or implied
o must be absolute, unconditional and without variance of any sort from the
o must be made known to the offeror
o must be made in the manner prescribed by the offeror
FACTS:
 Malbarosa 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 (March 14) to petitioner stating therein acceptance of petitioner’s
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. He 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 latter’s 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.
ISSUE:
 WON there was a valid acceptance on Malbarosa's part of the March 14, 1990 letter-offer of respondent? NO!

HELD/RATIO:

 Article 1318 of CC says that There is no contract unless the following requisites concur:
o Consent of the contracting parties
o Object certain which is the subject matter of the contract
o Cause of the obligation which is established
 In this case, there is no contract as Malbarosa failed to meet the requirements of a valid acceptance to wit:
o May be express or implied
o Must be absolute, unconditional and without variance of any sort from the offer
o Must be made known to the offeror
o Must be made in the manner prescribed by the offeror
 Malabarosa communicated his acceptance only after the knowledge of revocation or withdrawal of his offer. He
failed to transmit his conformity while the offer was subsisting.
o 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 respondent required the petitioner to accept the offer by affixing his signature on the space provided in said
letter-offer and writing the date of said acceptance, thus foreclosing an implied acceptance or any other mode of
acceptance by the petitioner. However, when the letter-offer of the respondent was delivered to the petitioner on
March 16, 1990, he did not accept or reject the same for the reason that he needed time to decide whether to reject
or accept the same.
 There was no contract perfected between the petitioner and the respondent corporation
 The petitioner’s assailed that he was not accorded by the respondent reasonable time to accept or reject its offer does
not persuade. It must be underscored that there was no time frame fixed by the respondent for the petitioner to accept
or reject its offer.
 When the offeror has not fixed a period for the offeree to accept the offer, and the offer is made to a person present,
the acceptance must be made immediately.
 In this case, the respondent made its offer to the petitioner when Da Costa handed over on March 16, 1990 to the
petitioner its March 14, 1990 Letter-offer but that the petitioner did not accept the offer.
 The respondent, thus, had the option to withdraw or revoke the offer, which the respondent did on April 4, 1990

RULING:
 Respondent won! There existed no perfected contract between the petitioner and the respondent on the latter’s March
14, 1990 Letter-offer for failure of the petitioner to effectively notify the respondent of his acceptance