Malbarosa vs. Court of Appeals

A contract is perfected only upon the offeror's knowledge of the offeree's acceptance; thus, an acceptance made after the offeror has withdrawn the offer is inefficacious, especially when the offer prescribes an exclusive manner of acceptance that the offeree initially fails to follow.

Salvador P. Malbarosa, president and general manager of Philtectic Corporation—a wholly-owned subsidiary of S.E.A. Development Corp. (SEADC)—tendered his resignation from the SEADC group of companies and requested his 1989 incentive compensation. After negotiations, SEADC sent a letter-offer detailing the compensation, which included transferring a company car and membership shares to Malbarosa. The letter required Malbarosa to indicate his conformity by affixing his signature and the date on a designated space.

• Resignation and Offer: Malbarosa tendered his resignation effective February 28, 1990. On March 14, 1990, SEADC sent a letter-offer proposing a specific incentive compensation amount, partly payable via transfer of a company car and membership shares. The letter required Malbarosa to affix his signature and the date on a designated space to signify conformity.
• Initial Refusal: On March 16, 1990, Louis Da Costa (SEADC President) handed the original letter to Malbarosa. Malbarosa was dismayed by the amount, refused to sign on the designated space, and wrote "Rec'd original for review purposes" on the duplicate copy retained by Da Costa.
• Delayed Acceptance and Withdrawal: Malbarosa claimed he signed the original on March 28, 1990, but did not transmit it to SEADC. On March 29, 1990, he called Da Costa's office, leaving a message with a receptionist that he had accepted the offer. On April 3, 1990, SEADC's Board authorized Philtectic Corporation to demand the return of the car and take legal action. On April 4, 1990, Philtectic Corporation wrote Malbarosa withdrawing the March 14 offer and demanding the car's return within 24 hours. Malbarosa received this letter on the same day.
• Belated Notification: On April 7, 1990, Malbarosa wrote to Philtectic's counsel claiming he had already accepted the offer on March 28 and enclosed a copy of the signed letter.

• Valid Acceptance: Petitioner argued that he was given a reasonable time to accept the offer and validly accepted it on March 28, 1990, by signing the document. He also claimed implied acceptance by retaining possession of the car.
• Ineffective Withdrawal: Petitioner contended that Philtectic Corporation had no authority to withdraw SEADC's offer, as the board resolution only authorized Philtectic to demand the car and file suit, not to withdraw the offer.

• Factual Issues and No Acceptance: Respondent argued that the issues raised were factual and beyond the scope of a Rule 45 petition. Receiving the original "for review purposes" constituted a counter-offer, and Malbarosa's indecision on March 16 meant the offer was deemed not accepted.
• Authority to Withdraw: Respondent asserted that the authority given to Philtectic to demand and sue for the car necessarily included the authority to withdraw the offer. Furthermore, Senen Valero (SEADC Vice-Chairman) testified that he personally instructed the lawyers to send the April 4 withdrawal letter.

• Perfection of Contract: Whether there was a valid acceptance by Malbarosa of SEADC's March 14, 1990 letter-offer.
• Withdrawal of Offer: Whether there was an effective withdrawal by SEADC of the letter-offer through Philtectic Corporation.

• Perfection of Contract: No valid acceptance was made. The offer prescribed an exclusive manner of acceptance (signing on the space provided), foreclosing implied acceptance or other modes. Malbarosa did not sign on March 16. Even assuming he signed on March 28, he failed to notify the offeror. Acceptance must be made known to the offeror to perfect the contract. The offeror received notice of acceptance only on April 7, after the offer had already been withdrawn on April 4. An offer made inter praesentes must be accepted immediately; Malbarosa's two-week delay meant the offeror had the option to withdraw.
• Withdrawal of Offer: The withdrawal was effective. The authority granted to Philtectic to demand the return of the car and institute action implicitly included the authority to withdraw the offer. Moreover, the withdrawal letter was sent upon the instruction of Senen Valero, an authorized officer of SEADC.

• Meeting of the Minds (Consent) — Consent is manifested by the meeting of the offer and acceptance upon the thing and the cause. An offer not accepted gives rise to no consent. Acceptance must be absolute, unconditional, and without variance. The acceptance must be made known to the offeror; without such knowledge, there is no meeting of the minds.
• Prescribed Manner of Acceptance — If the offeror prescribes an exclusive manner of acceptance, acceptance must be made in that manner to bind the offeror. Acceptance in a different manner constitutes a counter-offer.
• Withdrawal of Offer — An offeror may withdraw the offer before acceptance by the offeree. If the revocation reaches the offeree before the acceptance is made known to the offeror, the contract is not perfected.
• Acceptance inter praesentes — An offer made to a person present must be accepted immediately. If no period is fixed, the offeror may withdraw the offer if the offeree does not accept immediately.

• "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."
• "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."

• Gamboa v. Ronsalez, 17 Phil. 381 — Cited for the principle that an offer not accepted does not give rise to consent.
• Uy v. Hon. Evangelista, 361 SCRA 95 (2001) — Cited for the rule that acceptance must be absolute, unconditional, and without variance.
• Jardine Davies, Inc. v. Court of Appeals, et al., 333 SCRA 689 (2000) — Cited for the requirement that acceptance must be made known to the offeror.
• Enriquez v. Sun Life Assurance, 41 Phil. 269 — Cited for the principle that without the offeror's knowledge of acceptance, there is no meeting of the minds.

• Article 1318, Civil Code — Enumerates the essential requisites of a contract (consent, object certain, cause). Applied to determine if a contract was perfected between the parties.
• Article 1319, Civil Code — Provides that consent is manifested by the meeting of the offer and acceptance upon the thing and the cause which are to constitute the contract. Applied to determine if there was a concurrence of offer and acceptance.
• Article 1320, Civil Code — Mentioned regarding the modes of acceptance, which may be express or implied.

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