G.R. No. 125761; April 30, 2003
SALVADOR P. MALBAROSA, petitioner, vs. HON. COURT OF APPEALS and S.E.A. DEVELOPMENT CORP., respondents.

FACTS

Petitioner Salvador P. Malbarosa was an officer in a group of companies controlled by respondent S.E.A. Development Corporation (SEADC). Upon his planned retirement, he requested payment of his 1989 incentive compensation. On March 14, 1990, SEADC, through its officer Senen Valero, sent Malbarosa a letter-offer proposing to settle his incentive claim of P251,057.67 by transferring to him a company car valued at P220,000 and a membership share. The letter contained a space for his agreement, requiring him to affix his signature and date. Malbarosa received the original on March 16 but expressed dismay at the amount, refused to sign immediately, and only wrote “Rec’d original for review purposes” on the duplicate copy retained by SEADC.
SEADC, not having received the signed original after more than two weeks, withdrew the offer via a board resolution and a demand letter dated April 4, 1990, requiring the return of the car and membership certificate. Malbarosa responded on April 7, claiming he had already accepted the offer by signing and dating the original copy on March 28, 1990, and enclosed a photocopy as proof. SEADC filed a complaint for recovery of personal property with replevin, asserting ownership of the vehicle.

ISSUE

Whether a perfected contract of sale existed over the vehicle based on the March 14, 1990 letter-offer.

RULING

No. The Supreme Court affirmed the Court of Appeals’ decision, ruling that no contract was perfected. The March 14 letter was a definite offer, but acceptance was not validly communicated. For a contract to be perfected, acceptance must be absolute, unqualified, and manifested in a manner expressly or impliedly authorized by the offeror. The offer specifically required Malbarosa to indicate his agreement by signing and dating the space provided on the letter itself. His act of signing the original on March 28, 1990, without communicating this fact to SEADC, did not constitute a valid acceptance. Acceptance must be brought to the knowledge of the offeror. By retaining the signed original and failing to inform SEADC, Malbarosa did not comply with the prescribed mode of acceptance. Consequently, SEADC’s withdrawal of the offer on April 4, 1990, before any valid acceptance was communicated, was effective. SEADC thus rightfully recovered possession of the vehicle.