G.R. No. L-15245; October 30, 1920
VICENTE PELAEZ and EDUARDO DE RODA, plaintiffs-appellants, vs. DAVAO AGRICULTURAL & COMMERCIAL CO., INC., defendant-appellee.

FACTS:
Plaintiffs Vicente Pelaez and Eduardo de Roda were co-owners of a launch named “Emma.” On November 22, 1918, Isidro Vamenta, acting on behalf of the defendant corporation, sent a telegram to Pelaez inquiring if he was willing to sell the launch for ₱12,000, payable ₱8,000 in cash and the balance in monthly installments of ₱1,000. Due to the absence of both owners, the telegram was not immediately received. Roda received it on November 25 and sent a reply on November 29, accepting the offer and requesting the money and promissory notes. This reply reached Manila on November 30. On December 2 and 4, Roda and Pelaez sent follow-up telegrams confirming acceptance. However, on December 4, Vamenta sent a telegram to Roda stating that due to the delay in responding, the defendant was considering another offer for a launch and would try to withdraw from that transaction to proceed with the plaintiffs’ offer. The plaintiffs filed an action to compel the defendant to purchase the launch. The trial court ruled in favor of the defendant, holding that time was of the essence and the plaintiffs’ delay in accepting the offer divested the transaction of effect.

ISSUE:
Whether a valid contract of sale was perfected between the parties through telegraphic correspondence.

RULING:
No. The Supreme Court affirmed the trial court’s judgment absolving the defendant, but on different grounds.
1. No Binding Offer: Vamenta’s initial telegram was merely an inquiry (“State if willing to sell”) and not a definite offer to purchase. It was a preliminary negotiation to ascertain the plaintiffs’ terms, not a binding commitment to buy.
2. Telegraphic Correspondence Under the Code of Commerce: Article 51 of the Code of Commerce provided that telegraphic correspondence would produce obligatory force only if the contracting parties had previously agreed in writing to use this medium for binding contracts. No such prior written agreement existed between the parties. The Court held that this provision remained in force, as there had been no substantial change in legislation to warrant its abandonment.
Thus, even assuming the plaintiffs’ acceptance was timely, no contract was perfected due to the absence of a binding offer and the lack of a prior written agreement to be bound by telegraphic communication. The judgment was affirmed, with costs against the appellants.