In this case the private-respondent SEADC wholly-owned and controlled Philtectic

Corp. which Malbarosa is the President and General Manager, he is also an officer of
other corporations belonging to the same.

The SEADC assigned to Malbarosa one of its vehicles, an 82 model Mitshubishi

Gallant Super Saloon and was also issued membership certificates in the Architectural
Center, Incorporated.

Sometime in January 1990, Malbarosa hinted the Vice Chairman of the Board of
Directors of SEADC, named Valero, that he already desired to retire from the said
Corporation and requested that his 1989 incentive compensation to be paid to him.
Malbarosa then sent his letter of resignation to be effective on February 28, 1990 from
all his positions in the said Coporation and reiterating his request for the incentive
compensation

On February 5, 1990, one Louis Da Costa, the President of SEADC, met with
Malbarosa to discuss his incentive compensation and to what mode the payment will
be made. He submitted that Malbarosa would be entitled to an amount of 395,000.

On March 14, 1990, the SEADC through Valero, signed a letter-offer addressed to
Malbarosa stating that the resignation was duly accepted by the Corporation and that
he was only entitled to an incentive compensation in the amount of 251,057php,
proposing that the amount be satisfied from the value of the earlier assigned car plus
the suppose value of the membership certificate.

The SEADC required that if he accepted the offer, he had to affix his conformity on the
space provided and the date on the right bottom portion of the letter. (So in the full text
of the case, there is a sample blank underline where Malbarosa should affix his
conformity and indicate the date when he signed it)

On March 16, 1990, the Letter-Offer was handed to Malbarosa by Da Costa and the
former was dismayed upon knowing of the decreased amount of the incentive
compensation that was being given by SEADC.

Malbarosa refused to sign the letter-offer on the space provided and only wrote on the
duplicate copy retained by Da Costa, the words “Rec’d (received) original for review
purposes”.

After the lapsed of two weeks, SEADC did not receive any signed original copy of the
said Letter-Offer from Malbarosa, and the Board of Directors have decided on April 3,
1990 to authorize Philtetic Corp and/or Valero to demand the return of the car and take
actions against him.

On April 4, 1990, Malbarosa received the said demand notice to return the car and
revocation of his membership certificate, together with this, the notice of withdrawal of
the Letter-Offer was also served to him, all this through the counsel of Philtetic Corp.

On April 7, 1990, Malbarosa replied to the counsel stating that he cannot comply with
the said demand as he already signed the Letter-Offer on the original copy last March
28, 1990; he attached a photocopy of the original letter-offer showing that he already
affixed his signature dated March 28, 1990. (So dito nag-umpisa ung problema, sabi ni
Malbarosa pinirmahan ko na ung original copy ng letter-offer nung March 28 pa, hindi
niyo na pwedeng bawiin saken ung offer niyo na sasakyan, but later on the Supreme
Court will explain why this is not valid at all)
This prompted SEADC to file a complaint against Malbarosa for recovery of personal
property with replevin and damages in the trial court.

In Malbarosa’s defense, he reiterated that he already signed the Letter-offer on March

28th and notified the Corporation about his affixed conformity making him the rightful
possessor of the car.

In addition, he alleged that on March 29, 1990 he tried to call the office of Da Costa to
inform him of the acceptance; however the telephone receptionist informed him that Da
Costa was out of the office. This prompted him to just ask the telephone receptionist a
favor, to inform Da Costa that he already accepted the offer.

At any rate, the RTC favored the respondent Corporation ruling that there is no
perfected contract since there is no notification of the acceptance made by Malbarosa
and the Corporation validly withdrawn the Offer before such acceptance. The CA
affirmed the decision of the RTC, hence this appeal to the Supreme Court

The issues raised by Malbarosa are: whether or not there is a valid acceptance on the
Letter-offer? And whether or not the withdrawal made by the Corporation is valid?

It is also important to take note that the petitioner is claiming that he already signed the
Letter-Offer on March 28th and sent the copy to the counsel’s Corporation on April 7,
1990 and he further averred that he already communicated his acceptance through the
phone, calling the office of Da Costa on March 29 th hence the implied acceptance. Is
this even allowed as a way of acceptance?

Ruling:

The SC ruled that there is no valid acceptance in the offer made by the Corporation
explaining that 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 that is not accepted does not
give rise to a consent hence the contract does not come into existence .

To produce a contract, there must be an 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.

Unless the offeror knows the acceptance, there is no meeting of the minds of the
parties. The offeror may withdraw its offer and revoke the same before
acceptance is made. The contract is perfected only from the time an acceptance
of an offer is made known to the offeror.

It is clear that the Supreme Court in this case is ruling that even if Malbarosa is
now claiming that he already accepted the made offer, the acceptance was
already late, since there is already a valid withdrawal made by the Corporation.
Malbarosa is claiming that he already signed the Letter-Offer on March 28, 1990
but the Supreme Court reiterated that Malbarosa only attached a notice to the
Corporation of his said acceptance only on April 7, 1990, and the valid
withdrawal was made known to Malbarosa on April 4, 1990 ahead of the ACTUAL
acceptance made.

Going now to the issue on the manner of acceptance claimed by Malbarosa, by

way of calling the office of Da Costa on March 29, 1990, the Supreme Court is not
persuaded that he already impliedly accepted the offer since this is not a valid
notice of acceptance to the offerror, explaining that:
If an offeror prescribes the exclusive manner in which acceptance of his offer
shall be made, only that manner prescribed will be binding or valid. (in this instant
case, the acceptance is clearly prescribed by the Corporation) The required
acceptance is in the manner of affixing conformity on the space provided in the
said letter-offer and writing the date of said acceptance, thus excluding any
implied acceptance or any other mode of acceptance by Malbarosa.

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 (or made to a person present) 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. (Segway ko lang din po, as discussed in the book of Rabuya page
422, these inter praesentes offers since they must be accepted immediately
when the offeror has not fixed the period for acceptance, if they are rejected by
the offeree, the offer is also immediately terminated)

In addition thereto, the 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. (as also proven, that Malbarosa did not sign his actual
conformity, but signed the copy of the letter offer, stating that it is for review
purposes, that he did not accept or reject the same for the reason that he needed
time to decide

So as we can remember in the facts of this case, Malbarosa alleged that he already
accepted the offer by way of calling the office of Da Costa, however by the established
ruling of the Supreme Court, it is clear that even if he called the office on March 29,
1990 and as he claimed signed the Letter-Offer on March 28,1990, this invalidates a
binding contract between them since this is not the prescribed manner of acceptance
expressly provided by the offeror which is the Corporation, and since the same already
withdrew the Offer on April 4, 1990 and he only sent the notice of the actual
acceptance on April 7, 1990 there is no contract to speak of and no meeting of the
minds

Malboraso now, also contends that the Corporation did not give him ample time to
decide on the offer.

The Supreme Court is again not persuaded. It ruled that when the offeror did not
indicate any time frame, the offer should be accepted immediately. In this case, the
Letter-Offer March 14, 1990 was handed to Malbaraso on March 16, 1990, and up to
the time the offer was withdrawn of April 4, 1990. Malbarosa had more than two
weeks which was more than sufficient to accept the offer.

 On the last issue, Malbarosa avers that Philtectic Corporation, although a wholly-
owned and controlled subsidiary of the SEADC, had no authority to withdraw the
offer
 The Supreme Court again rejected his contentions and ruled that the authority
given to Philtectic Corporation to file suits and recovery against Malbarosa
impliedly includes the power to withdraw the offer.
 All the more so, that Vice Chairman Valero testified that the April 4, 1990
withdrawal letter of Philtectic Corporation to Malbarosa was upon his
instruction and conformably with the aforesaid resolution of the Board of
Directors of the SEADC.
Side note: - even assuming arguendo that Malbarosa was given a reasonable time to
affixed his signature. It is already late, since he signed the letter-offer March 28 and
only sent the copy April 7 after the valid withdrawal on April 4 by the Corporation

In analogy – relating this scenario from the discussions of Rabuya, Jurado and
Tolentino on the valid acceptance – this affixing of conformity made by Malbarosa on
the 28th of March is not even a factor – since our Civil laws accepted the Cognition or
Cognitive theory, not the mailbox theory – it cannot be said to retroact on the day
Malbarosa signed the letter-offer, the controlling point here is the delivery of the copy of
the affixed letter-offer on April 7, not the actual signing on March 28 th

Unless and until the respondent received said copy of the letter-offer, it cannot
be argued that a contract had already been perfected between the petitioner and
the respondent.