G.R. No. 16530; March 31, 1922
MAMERTO LAUDICO and FRED M. HARDEN, plaintiffs-appellants, vs. MANUEL ARIAS RODRIGUEZ, ET AL., defendants-appellants.

FACTS

Defendant Vicente Arias, on behalf of the co-owners, gave plaintiff Mamerto Laudico an option to lease a building, sending a tentative written contract. Laudico presented Fred M. Harden as the prospective lessee. Negotiations ensued, modifying the terms. On March 6, 1919, Laudico sent a letter to Arias accepting all final propositions. This letter was received by Arias via special delivery at 2:53 p.m. However, earlier that same day, at 11:25 a.m., Arias had sent a letter to Laudico withdrawing the offer to lease. When Arias sent his withdrawal, he had not yet received Laudico’s acceptance. The plaintiffs filed an action to compel the defendants to execute the lease contract.

ISSUE

Whether a contract of lease was perfected between the parties, given that the offeror withdrew the offer before receiving notice of the offeree’s acceptance.

RULING

No, no contract was perfected. Under Article 1262, paragraph 2 of the Civil Code, an acceptance by letter produces no effect until it comes to the knowledge of the offeror. Before the offeror learns of the acceptance, he is not bound and may still withdraw the offer. Here, Arias validly withdrew the offer before he received notice of Laudico’s acceptance. Consequently, when the acceptance was later received, the offer no longer existed. There was no concurrence of offer and acceptance at the same time, which is essential for a meeting of the minds and the birth of a contract. The judgment appealed from was reversed, and the defendants were absolved from the complaint.