1305 ABSCBN v CA specially authorize them to do so.

specially authorize them to do so. That Del Rosario did not have the authority to accept ABS-CBN’s counter-offer
Civil Law; Contracts; A contract is a meeting of minds between two persons whereby one binds himself to give
something or to render some service to another for a consideration.—The first issue should be resolved against
ABS-CBN. A contract is a meeting of minds between two persons whereby one binds himself to give something or
to render some service to another for a consideration. There is no contract unless the following requisites
concur: (1) consent of the contracting parties; (2) object certain which is the subject of the contract; and (3)
cause of the obligation, which is established. A contract undergoes three stages: (a) preparation, conception, or
generation, which is the period of negotiation and bargaining, ending at the moment of agreement of the
parties; (b) perfection or birth of the contract, which is the moment when the parties come to agree on the
terms of the contract; and (c) consummation or death, which is the fulfillment or performance of the terms
agreed upon in the contract.
Same; Same; Contracts that are consensual in nature are perfected upon mere meeting of the minds. Once
there is concurrence between the offer and the acceptance upon the subject matter, consideration, and terms
of payment a contract is produced.—Contracts that are consensual in nature are perfected upon mere meeting
of the minds. Once there is concurrence between the offer and the acceptance upon the subject matter,
consideration, and terms of payment a contract is produced. The offer must be certain. To convert the offer into
a contract, the acceptance must be absolute and must not qualify the terms of the offer; it must be plain,
unequivocal, unconditional, and without variance of any sort from the proposal. A qualified acceptance, or one
that involves a new proposal, constitutes a counter-offer and is a rejection of the original offer. Consequently,
when something is desired which is not exactly what is proposed in the offer, such acceptance is not sufficient to
generate consent because any modification or variation from the terms of the offer annuls the offer.
Same; Same; Acceptance of an Offer; Words and Phrases; The acceptance of an offer must be unqualified and
absolute, i.e., it “must be identical in all respects with that of the offer so as to produce consent or meeting of
the minds.”—ABS-CBN’s reliance in Limketkai Sons Milling, Inc. v. Court of Appeals and Villonco Realty Company
v. Bormaheco, Inc., is misplaced. In these cases, it was held that an acceptance may contain a request for certain
changes in the terms of the offer and yet be a binding acceptance as long as “it is clear that the meaning of the
acceptance is positively and unequivocally to accept the offer, whether such request is granted or not.” This
ruling was, however, reversed in the resolution of 29 March 1996, which ruled that the acceptance of an offer
must be unqualified and absolute, i.e., it “must be identical in all respects with that of the offer so as to produce
consent or meeting of the minds.”
was best evidenced by his submission of the draft contract to VIVA’s Board of Directors for the latter’s approval.
In any event, there was between Del Rosario and Lopez III no meeting of minds.
Civil Law; Contracts; Damages; Except as provided by law or by stipulation, one is entitled to compensation for
actual damages only for such pecuniary loss suffered by him as he has duly proved.— We find for ABS-CBN on
the issue of damages. We shall first take up actual damages. Chapter 2, Title XVIII, Book IV of the Civil Code is the
specific law on actual or compensatory damages. Except as provided by law or by stipulation, one is entitled to
compensation for actual damages only for such pecuniary loss suffered by him as he has duly proved. The
indemnification shall comprehend not only the value of the loss suffered, but also that of the profits that the
obligee failed to obtain. In contracts and quasi-contracts the damages which may be awarded are dependent on
whether the obligor acted with good faith or otherwise. In case of good faith, the damages recoverable are those
which are the natural and probable consequences of the breach of the obligation and which the parties have
foreseen or could have reasonably foreseen at the time of the constitution of the obligation. If the obligor acted
with fraud, bad faith, malice, or wanton attitude, he shall be responsible for all damages which may be
reasonably attributed to the non-performance of the obligation. In crimes and quasi-delicts, the defendant shall
be liable for all damages which are the natural and probable consequences of the act or omission complained of,
whether or not such damages have been foreseen or could have reasonably been foreseen by the defendant.
Same; Same; Same; Actual damages may likewise be recovered for loss or impairment of earning capacity in
cases of temporary or permanent personal injury, or for injury to the plaintiff’s business standing or
commercial credit.—Actual damages may likewise be recovered for loss or impairment of earning capacity in
cases of temporary or permanent personal injury, or for injury to the plaintiff’s business standing or commercial
credit. The claim of RBS for actual damages did not arise from contract, quasi-contract, delict, or quasidelict. It
arose from the fact of filing of the complaint despite ABS-CBN’s alleged knowledge of lack of cause of action.
ABS-CBN Broadcasting Corporation vs. Court of Appeals, 301 SCRA 572, G.R. No. 128690 January 21, 1999

Commercial Law; Corporation Code; Board of Directors; Under the Corporation Code, unless otherwise
provided by said Code, corporate powers, such as the power to enter into contracts, are exercised by the Board
of Directors. However, the Board may delegate such powers to either an executive committee or officials or
contracted managers.— Under the Corporation Code, unless otherwise provided by said Code, corporate
powers, such as the power to enter into contracts, are exercised by the Board of Directors. However, the Board
may delegate such powers to either an executive committee or officials or contracted managers. The delegation,
except for the executive committee, must be for specific purposes. Delegation to officers makes the latter agents
of the corporation; accordingly, the general rules of agency as to the binding effects of their acts would apply.
For such officers to be deemed fully clothed by the corporation to exercise a power of the Board, the latter must
1306 ALLIED BANKING V CA
Contracts; Leases; Principle of Mutuality; The binding effect of a contract on both parties is based on the
principle that the obligations arising from contracts have the force of law between the contracting parties, and
there must be mutuality between them based essentially on their equality under which it is repugnant to have
one party bound by the contract while leaving the other free therefrom.—Article 1308 of the Civil Code
expresses what is known in law as the principle of mutuality of contracts. It provides that “the contract must bind
both the contracting parties; its validity or compliance cannot be left to the will of one of them.” This binding
effect of a contract on both parties is based on the principle that the obligations arising from contracts have the
force of law between the contracting parties, and there must be mutuality between them based essentially on
their equality under which it is repugnant to have one party bound by the contract while leaving the other free
therefrom. The ultimate purpose is to render void a contract containing a condition which makes its fulfillment
dependent solely upon the uncontrolled will of one of the contracting parties.
Same; Same; Same; An express agreement which gives the les-see the sole option to renew the lease is
frequent and subject to statutory restrictions, valid and binding on the parties—the right of re-newal
constitutes a part of the lessee’s interest in the land and forms a substantial and integral part of the
agreement.—An express agreement which gives the lessee the sole option to renew the lease is frequent and
subject to statutory restrictions, valid and binding on the parties. This option, which is provided in the same lease
agreement, is fundamentally part of the consideration in the contract and is no different from any other
provision of the lease carrying an undertaking on the part of the lessor to act conditioned on the performance by
the lessee. It is a purely executory contract and at most confers a right to obtain a renewal if there is compliance
with the conditions on which the right is made to depend. The right of renewal constitutes a part of the lessee’s
interest in the land and forms a substantial and integral part of the agreement.
Same; Same; Same; The fact that an option to renew is binding only on the lessor and can only be exercised by
the lessee does not render it void for lack of mutuality.—The fact that such option is binding only on the lessor
and can be exercised only by the lessee does not render it void for lack of mutuality. After all, the lessor is free to
give or not to give the option to the lessee. And while the lessee has a right to elect whether to continue with the
lease or not, once he exercises his option to continue and the lessor accepts, both parties are thereafter bound
by the new lease agreement. Their rights and obligations become mutually fixed, and the lessee is entitled to
retain possession of the property for the duration of the new lease, and the lessor may hold him liable for the
rent therefor. The lessee cannot thereafter escape liability even if he should subsequently decide to abandon the
premises. Mutuality obtains in such a contract and equality exists between the lessor and the lessee since they
remain with the same faculties in respect to fulfillment.
Same; Same; Words and Phrases; The clause “may be renewed for a like term at the option of the lessee,”
when exercised by the lessee, results in the automatic extension of the contract of lease under the same terms
and conditions, the phrase “for a like term” referring to the period.—With respect to the meaning of the clause
“may be renewed for a like term at the option of the lessee,” we sustain petitioner’s contention that its exercise
of the option resulted in the automatic extension of the contract of lease under the same terms and conditions.
The subject contract simply provides that “the term of this lease shall be fourteen (14) years and may be
renewed for a like term at the option of the lessee.” As we see it, the only term on which there has been a clear
agreement is the period of the new contract, i.e., fourteen (14) years, which is evident from the clause “may be
renewed for a like term at the option of the lessee,” the phrase “for a like term” referring to the period. It is
silent as to what the specific terms and conditions of the renewed lease shall be. Shall it be the same terms and
conditions as in the original contract, or shall it be under the terms and conditions as may be mutually agreed
upon by the parties after the expiration of the existing lease?
Same; Same; Statutory Construction; As in a statute no word, clause, sentence, provision or part of a contract
shall be considered surplusage or superfluous, meaningless, void, insignificant or nugatory, if that can be
reasonably avoided, and to this end, a construction which will render every word operative is to be preferred
over that which would make some words idle and nugatory.—Besides, if we were to adopt the contrary theory
that the terms and conditions to be embodied in the renewed contract were still subject to mutual agreement by
and between the parties, then the option—which is an integral part of the consideration for the contract—would
be rendered worthless. For then, the lessor could easily defeat the lessee’s right of renewal by simply imposing
unreasonable and onerous conditions to prevent the parties from reaching an agreement, as in the case at bar.
As in a statute no word, clause, sentence, provision or part of a contract shall be considered surplusage or
superfluous, meaningless, void, insignificant or nugatory, if that can be reasonably avoided. To this end, a
construction which will render every word operative is to be preferred over that which would make some words
idle and nugatory.
Same; Same; Where the old lease contract was deemed renewed under the same terms and conditions upon
the exercise by the lessee of its option, the basis of the computation of rentals should be the rental rate
provided for in the existing contract.—Fortunately for respondent lessors, ALLIED vacated the premises on 20
February 1993 indicating its abandonment of whatever rights it had under the renewal clause. Consequently,
what remains to be done is for ALLIED to pay rentals for the continued use of the premises until it vacated the
same, computed from the expiration of the original term of the contract on 31 March 1992 to the time it actually
left the premises on 20 February 1993, deducting therefrom the amount of P68,400.00 consigned in court by
ALLIED and any other amount which it may have deposited or advanced in connection with the lease. Since the
old lease contract was deemed renewed under the same terms and conditions upon the exercise by ALLIED of its
option, the basis of the computation of rentals should be the rental rate provided for in the existing contract.
Same; Same; Donations; Words and Phrases; “Interest,” Explained; A person who is not principally or
subsidiarily bound has no legal capacity to challenge the validity of a contract of donation—he must first have
an interest in it, meaning a material interest, an interest to be affected by the deed, as distinguished from a
mere incidental interest.—ALLIED cannot assail the validity of the deed of donation, not being a party thereto. A
person who is not principally or subsidiarily bound has no legal capacity to challenge the validity of the contract.
He must first have an interest in it. “Interest” within the meaning of the term means material interest, an
interest to be affected by the deed, as distinguished from a mere incidental interest. Hence, a person who is not
a party to a contract and for whose benefit it was not expressly made cannot maintain an action on it, even if the
contract, if performed by the parties thereto would incidentally affect him, except when he is prejudiced in his
rights with respect to one of the contracting parties and can show the detriment which could positively result to
him from the contract in which he had no intervention. We find none in the instant case. Allied Banking
Corporation vs. Court of Appeals, 284 SCRA 357, G.R. No. 124290 January 16, 1998
1307 CORPUS V CA
Attorneys; Contracts; An attorney-client relationship can be created by implied agreement, as when the
attorney actually renderedlegal services for a person who is a close friend. The obligation of such a person to
pay attorney’s fees is based on the law of contracts’ concept of facio ut des (I do and you give). —WE find
respondent David’s position meritorious. While there was no express agreement between petitioner Corpus and
respondent David as regards attorney’s fees, the facts of the case support the position of respondent David that
there was at least an implied agreement for the payment of attorney’s fees. Petitioner s act of giving the check
for P2,000.00 through his aforestated April 18, 1962 letter to respondent David indicates petitioner’s
commitment to pay the former attorney’s fees, which is stressed by expressing that “I wish I could give more but
as you know we were banking on a SC decision reinstating me and reimbursing my back salaries.’ This last
sentiment constitutes a promise to pay more upon his reinstatement and payment of his back salaries. Petitioner
ended his letter that he was “looking forward to a continuation of the case in the lower court, x x x”, to which the
certiorari-mandamus-quo warranto case was remanded by the Supreme Court for further proceedings.
that the Supreme Court failed to resolve the claim within 18 months as provided for in the Constitution — a
provision not yet interpreted by the Supreme Court, and a trial judge who grants such a motion are both guilty
of contempt of court. They are both reprimanded.—Respondent David filed on or about September 13, 1978 a
motion with the court a quo for the issuance of a writ of execution to enforce its decision in Civil Case No. 61802,
subject of the present petition, knowing fully well that it was then still pending appeal before this Court. In
addition, no certification that the aforesaid decision is already deemed affirmed had as yet been issued by the
Chief Justice pursuant to Section 11, paragraph 2, Article X of the New Constitution; because respondent David’s
petitions filed with the Supreme Court on January 31, 1978 and on July 7, 1978 to remand the case to the trial
court for execution and for the issuance of such certification had not yet been acted upon as the same were still
pending consideration by this Court. In fact, this Court has not as of this time made any pronouncement on the
aforesaid provision of the New Constitution.

Same; Same; Same.—It may be advanced that respondent David may be faulted for not reducing the agreement
for attorney’s fees with petitioner Corpus in writing. However, this should be viewed from their special
relationship. It appears that both have been friends for several years and were co-members of the Civil Liberties
Union. In addition, respondent David and petitioner’s father, the late Rafael Corpus, were also close friends.
Thus, the absence of an express contract for attorney’s fees between respondent David and petitioner Corpus is
no argument against the payment of attorney’s fees, considering their close relationship which signifies mutual
trust and confidence between them.

Same; Same; Same.—Moreover, the payment of attorney’s fees to respondent David may also be justified by
virtue of the innominate contract of facio ut des (I do and you give) which is based on the principle that “no one
shall unjustly enrich himself at the expense of another.” Innominate contracts have been elevated to a codal
provision in the New Civil Code by providing under Article 1307 that such contracts shall be regulated by the
stipulations of the parties, by the general provisions or principles of obligations and contracts, by the rules
governing the most analogous nominate contracts, and by the customs of the people.

Same; Same; An attorney cannot charge his client a percentage of the amount recovered as his fees in the
absence of an express agreement.—There was no contract for contingent fee between Corpus and respondent
David. Contingent fees depend on an express contract therefor. Thus, “an attorney is not entitled to a percentage
of the amount recovered by his client in the absence of an express contract to that effect” (7 C.J.S. 1063 citing
Thurston v. Travelers Ins. Co., 258 N.W. 66, 128 Neb. 141).

Same; Same; Attorney’s fees on a quantum meruit basis will be resolved by taking all relevant factors into
consideration.—In determining a reasonable fee to be paid to respondent David as compensation for his
services, on a quantum meruit basis, it is proper to consider all the facts and circumstances obtaining in this case
particularly the following: x x x.

Same; Judges; Contempt; Constitutional Law; An attorney who files in the trial court a motion for issuance of a
writ of execution for his fees, while the resolution of the Supreme Court thereon is still pending, on the ground
1311 Everett Steamship Corp. vs C.A.
Common Carriers; Contracts; Bills of Lading; A stipulation in the bill of lading limiting the common
carrier’s liability for loss or destruction of a cargo to a certain sum, unless the shipper or owner
declares a greater value, is sanctioned by law.—A stipulation in the bill of lading limiting the
common carrier’s liability for loss or destruction of a cargo to a certain sum, unless the shipper or
owner declares a greater value, is sanctioned by law, particularly Articles 1749 and 1750 of the Civil
Code.
Court (supra), we held that even if the consignee was not a signatory to the contract of carriage
between the shipper and the carrier, the consignee can still be bound by the contract. Speaking
through Mr. Chief Justice Narvasa, we ruled: “To begin with, there is no question of the right, in
principle, of a consignee in a bill of lading to recover from the carrier or shipper for loss of, or damage
to goods being transported under said bill, although that document may have been—as in practice it
oftentimes is—drawn up only by the consignor and the carrier without the intervention of the
consignee. x x x.

Same; Same; Same; Contracts of Adhesion; Contracts of adhe-L; sion are not invalid per se. —The
trial court’s ratiocination that private respondent could not have “fairly and freely” agreed to the
limited liability clause in the bill of lading because the said conditions were printed in small letters
does not make the bill of lading invalid. We ruled in PAL, Inc. vs. Court of Appeals that the “juris-
prudence on the matter reveals the consistent holding of the court that contracts of adhesion are not
invalid per se and that it has on numerous occasions upheld the binding effect thereof.” Also, in
Philippine American General Insurance Co., Inc. vs. Sweet Lines, Inc. this Court, speaking through the
learned Justice Florenz D. Re-galado, held: “x x x Ong Yiu vs. Court of Appeals, et al., instructs us that
‘contracts of adhesion wherein one party imposes a ready-made form of contract on the other x x x
are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it
entirely; if he adheres he gives his consent.’ In the present case, not even an allegation of ignorance
of a party excuses non-compliance with the contractual stipulations since the responsibility for
ensuring full comprehension of the provisions of a contract of carriage devolves not on the carrier but
on the owner, shipper, or consignee as the case may be.” (Emphasis supplied)
Same; Same; Same; When the consignee formally claims reimbursement for the missing goods from
the common carrier and subsequently files a case against the latter based on the very same bill of
lading, it accepts the provisions of the contract and thereby makes itself a party thereto.— When
private respondent formally claimed reimbursement for the missing goods from petitioner and
subsequently filed a case against the latter based on the very same bill of lading, it (private
respondent) accepted the provisions of the contract and thereby made itself a party thereto, or at
least has come to court to enforce it. Thus, private respondent cannot now reject or disregard the
carrier’s limited liability stipulation in the bill of lading. In other words, private respondent is bound
by the whole stipulations in the bill of lading and must respect the same.

Same; Same; Same; Same; Greater vigilance is required of the courts when dealing with contracts
of adhesion in that the said contracts must be carefully scrutinized “in order to shield the unwary
(or weaker party) from deceptive schemes contained in ready-made contracts.”—Greater vigilance,
however, is required of the courts when dealing with contracts of adhesion in that the said contracts
must be carefully scrutinized “in order to shield the unwary (or weaker party) from deceptive
schemes contained in ready-made covenants,” such as the bill of lading in question. The stringent
requirement which the courts are enjoined to observe is in recognition of Article 24 of the Civil Code
which mandates that “(i)n all contractual, property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender
age or other handicap, the courts must be vigilant for his protection.”

Same; Same; Same; Even if the consignee is not a signatory to the contract of carriage between the
shipper and the carrier, the consignee can still be bound by the contract.—The next issue to be
resolved is whether or not private respondent, as consignee, who is not a signatory to the bill of
lading is bound by the stipulations thereof. Again, in Sea-Land Service, Inc. vs. Intermediate Appellate
1311 KAUFMAN V PNB
SD
Contract; Stipulation in Favor of Third Person; Revocation of Such Stipulation.—A stipulation in favor
of a third person cannot be revoked by the obligated party alone, without the conformity of the other
contracting party. Kauffman vs. National Bank, 42 Phil., 182, No. 16454 September 29, 1921
1311 ASSOCIATED BANK V CA
Contracts; Prescription; A suit for collection of money based on a written contract prescribes after
ten years from the time its right of action arose.—Private respondent’s claim that the action has
prescribed, pursuant to Article 1149 of the Civil Code, is legally untenable. Petitioner’s suit for
collection of a sum of money was based on a written contract and prescribes after ten years from the
time its right of action arose. Sarmiento’s obligation under the promissory note became due and
demandable on March 6, 1978. Petitioner’s complaint was instituted on August 22, 1985, before the
lapse of the ten-year prescriptive period. Definitely, petitioner still had every right to commence suit
against the payor/obligor, the private respondent herein.
Same; Same; Laches; The doctrine of laches is inapplicable where the claim was filed within the
prescriptive period set forth under the law.—Neither is petitioner’s action barred by laches. The
principle of laches is a creation of equity, which is applied not to penalize neglect or failure to assert a
right within a reasonable time, but rather to avoid recognizing a right when to do so would result in a
clearly inequitable situation or in an injustice. To require private respondent to pay the remaining
balance of his loan is certainly not inequitable or unjust. What would be manifestly unjust and
inequitable is his contention that CBTC is the proper party to proceed against him despite the fact,
which he himself asserts, that CBTC’s corporate personality has been dissolved by virtue of its merger
withpetitioner. To hold that no payee/obligee exists and to let private respondent enjoy the fruits of
his loan without liability is surely most unfair and unconscionable, amounting to unjust enrichment at
the expense of petitioner. Besides, this Court has held that the doctrine of laches is inapplicable
where the claim was filed within the prescriptive period set forth under the law.
neither of the contracting parties bears the legal representation or authorization of the third party.
The “fairest test” in determining whether the third person’s interest in a contract is a stipulation pour
autrui or merely an incidental interest is to examine the intention of the parties as disclosed by their
contract.
Same; Estoppel; A person cannot accept and reject the same instrument.—Private respondent also
claims that he received no consideration for the promissory note and, in support thereof, cites
petitioner’s failure to submit any proof of his loan application and of his actual receipt of the amount
loaned. These arguments deserve no merit. Res ipsa loquitur. The instrument, bearing the signature
of private respondent, speaks for itself. Respondent Sarmiento has not questioned the genuineness
and due execution thereof. No further proof is necessary to show that he undertook to pay
P2,500,000, plus interest, to petitioner bank on or before March 6, 1978. This he failed to do, as
testified to by petitioner’s accountant. The latter presented before the trial court private
respondent’s statement of account as of September 30, 1986, showing an outstanding balance of
P4,689,413.63 after deducting P1,000,000.00 paid seven months earlier. Furthermore, such partial
payment is equivalent to an express acknowledgment of his obligation. Private respondent can
nolonger backtrack and deny his liability to petitioner bank. “A person cannot accept and reject the
same instrument.” Associated Bank vs. Court of Appeals, 291 SCRA 511, G.R. No. 123793 June 29,
1998

Same; Stipulations Pour Autrui; Requisites; The “fairest test” in determining whether the third
person’s interest in a contract is a stipulation pour autrui or merely an incidental interest is to
examine the intention of the parties as disclosed by their contract.—A stipulation pour autrui is one
in favor of a third person who may demand its fulfillment, provided he communicated his acceptance
to the obligor before its revocation. An incidental benefit or interest, which another person gains, is
not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a
third person. Florentino vs. Encarnacion, Sr. enumerates the requisites for such contract: (1) the
stipulation in favor of a third person must be a part of the contract, and not the contract itself; (2) the
favorable stipulation should not be conditioned or compensated by any kind of obligation; and (3)
1319 ROSENSTOCK V BURKE
CONTRACTS; PURCHASE AND SALE; OFFER TO PURCHASE; INTERPRETATION.—The expression "I am
in position to entertain the purchase of the vessel upon the following terms * * * " does not mean a
definite offer to purchase, but merely the idea that a proposition be made to him which he would
accept or reject according to the result of his deliberation.
1319 LAUDICO V ARIAS
1.CONTRACT OF LEASE; PERFECTION J OFFER; ACCEPTANCE ACCEPTANCE BY LETTER.— Under article
1262, paragraph 2, of the Civil Code, an acceptance by letter does not have any effect until it comes
to the knowledge of the one making the offer. Before notice of acceptance, the offerer is not bound
and may withdraw the offer.

2.ID.; lD.; ID.; INTENTION.—The question whether or not an expression is a definite offer to purchase 2.ID.; ID. ; ID.; REVOCATION OF OFFER.—Before notice of acceptance, the offer may be revoked, and
or merely an invitation to a proposition being made to him, is one of intention of the person using the revocation will have the effect of preventing the perfection of the contract, although it may not
said expression, which. is to be determined by the circumstances surrounding the case. be known by the acceptant. Laudico and Harden vs. Arias Rodriguez, 43 Phil. 270, No. 16530 March
31, 1922

1319 BATANGAN V COJUANGCO

OBLIGATIONS AND CONTRACTS; COMPROMISE SETTLEMENT, OFFER OF; ACCEPTANCE, WHEN TO BE
MADE; CASE AT BAR.—An offer of' compromise settlement must be accepted within a reasonable
time. (15 C. J. S., section 7.) And acceptance or rejection of an offer of compromise may be inferred
from circumstances. (Id.) The appellant's failure to act on the offer before the judgment was entered
was an implied rejection of said offer. In pushing the appeal to final conclusion the appellant made it
clear that he was not interested in his creditor's liberal concession. A compromise has for its purpose
the avoidance or termination of a law suit. (Article 1809, Civil Code.) With the rendition of judgment,
the reason which induced the appellee to make her proposition ceased to exist.

2.ID.; ID.; ACCEPTANCE TO ACCORD WITH OFFER; CASE AT BAR.—Ac-ceptance in order to conclude
the agreement must in every respect meet and correspond with the terms and conditions of the
offer. (17 C. J. S., 378.) Granting that the appellant acted on time, payment of P800 fell short of the
appellee's requirement. The appellee wanted P1,508.28 in cash. This was the least she was entitled
to, it being the amount which the court below had f ound to be due her. In her proposition she did
not even include any interest. The substantial variance between the amount in the offer and the
amount tendered not only made the purported acceptance inoperative but "put an end to the
negotiations without forming a contract unless the party making the offer agreed to the suggested
modification." (17 C. J. S., 383.) Batangan vs. Cojuangco, 78 Phil. 481, No. L-224 May 31, 1947
1324 SANCHEZ V RIGOS
Civil law; Obligations and Contracts; Sales; Consideration not presumed in an accepted unilateral
promise to buy or lo sell.—Art 1354 of the Civil Code which presumes the existence of a
consideration in every contract applies to contracts in general, whereas the second paragraph of
Article 1479 thereof refers to “sales” in particular, and, more specifically, to “an accepted unilateral
promise to buy or to sell.” It is Article 1479 that controls defendant’s unilateral promise to sell her
property to the plaintiff.
Same; Same; Same; Promisee in an accepted unilateral promise to sell must prove existence of
consideration.—In order that said unilateral promise may be “binding” upon the promisor, Article
1479 requires the concurrence of a condition, namely, that the promise be “supported by a
consideration distinct from the price.” Accordingly, the promisee can not compel the promisor to
comply with the promise, unless the former establishes the existence of said distinct consideration. In
other words, the promisee has the burden of proving such consideration,
Same; Same; Same; Accepted promise to sell is an offer to sell and when accepted becomes a
contract of sale.—In accepted unilateral promise to sell, 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.
Same; Statutory construction; Provisions of same law should be reconciled.—This view has the
advantage of avoiding a conflict between Article 1324—on the general principles of contracts—and
1479—on sales—of the Civil Code, in line with the cardinal rule of statutory construction that, in
construing different provisions of one and the same law or code, such interpretation should be
favored as will reconcile or harmonize said provision and avoid a conflict between the same.
Same; Same, Exceptions not favored unless dearly intended.—The decision in Southwestern Sugar
So Molasses Co. vs. Atlantic Gulf and Pacific Co., holding that Art. 1324 is modified by Art. 1479 of the
Civil Code, in effect, considers the latter as an exception to the former, and exceptions are not
favored, unless the intention to the contrary is clear, and it is not so. insofar as said two articles are
concerned.
ANTONIO, J., concurring:
Civil law; Obligations and Contracts; Sales; Offeror cannot withdraw offer arbitrarily,—While the
law permits the offeror to withdraw the offer at any time before acceptance even before the period
has expired, some writers hold the view, that the offeror can not exercise this right in an arbitrary or
capricious manner. This is upon the principle that an offer implies an obligation on the part of offeror
to maintain it for such length of time as to permit the offeree to decide whether to accept or not, and
therefore cannot arbitrarily revoke the offer without being liable for damage which the offeree may
suffer. A contrary view would remove the stability and security of business transactions.
1324WOODHOUSE V HALILI
Contracts And Obligations; Consent, not Vitiated by dolo incident; Partnership; Agreement to Form
Partnership, Cannot be Enforced.—Having arrived at the conclusion that the agreement to organize a
partnership may not be declared null and void, may. the agreement be carried out or executed? Held:
Under the Spanish Civil Code, the defendant has an obligation to do, not to give. The law recogniz.es
the individual's freedom or liberty to do an act he has promised to do, or not to do it as he pleases.
This is a vevy personal act (acto personalisimo) of which courts may not compel com-pliance, as it is
considered as an act of violence to do so. (29  Scaevola, 428, 431-432.)
False Representation ; Damages, for dolo incident.—Plaintiff is entitled under the terms of the
agreement to 30 per cent of the net profits of the business. Against this amount of damages, the
damage the defendant suffered by plaintiff's misrepresentation that he had the exclusive franchise,
must be set off. (Art. 1101, Span. Civ. Code.) When the defendant learned, in Los Angeles, California,
that plaintiff did not have the exclusive franchise which he pretended be had and which he had
agreed to transfer to the partnership, his spontaneous reaction was to reduce the plaintiff's share
from 30 per cent to 15 per cent only, to which reduction plaintiff appears to have readily given his
assent. Held: By the misrepresentation of the plaintiff, he obtained a very high percentage (30%) of
share in the profits. Upon learning of the misrepresentation, defendant reduced plaintiff's share to 15
per cent, to which defendant assented. The court can do no better than follow such appraisal of the
damages as the parties themselves had adopted. Woodhouse vs. Halili, 93 Phil., 526, No. L-4811 July
31, 1953
1340 AZARRAGA V GAY
REAL PROPERTY; PURCHASE AND SALE; VENDOR'S ALLEGED FALSE REPRESENTATIONS.—When the
purchaser proceeds to make investigations by himself, and the vendor does nothing to prevent such
investigation from being as complete as the former might wish, the purchaser cannot later allege that
the vendor made false representations to him. (National Cash Register Co. vs. Townsend, 137 N. C.,
652; 70 L. R. A., 349; Williamson vs. Holt, 147 N. C., 515.)
ID. ; ID. ; ID.—One who contracts for the purchase of real estate in reliance on the representations
and statements of the vendor as to its character and value, but after he has visited and examined it
for himself, and has had the means and opportunity of verifying such statements, cannot avoid the
contract on the ground that they were false or exaggerated. (Brown vs. Smith, 109 Fed., 26.) Azarraga
vs. Gay, 52 Phil. 599, No. 29449 December 29, 1928