MALBAROSA v COURT OF APPEALS

FACTS:
-Philtectic Corporation and Commonwealth Insurance Co. was a wholly owned subsidiary of
S.E.A. Development Corporation. Malbarosa was president and general manager of Philtectic
while an officer in SEADC’s other group of companies
-Philtectic assigned to Malbarosa a Mitsubishi vehicle and membership certificates
withArchitectural Center, Inc. during his employment with the former.
-January 1990: Malbarosa intimated to Valero, Vice-Chairman of the Board of Directors for
SEADC and Philtectic, his desire to retire and requested that his incentive compensation for
1989 be given to him. Per Da Costa, President of SEADC and Commonwealth Insurance,
Malbarosa is entitled to P395,000. However, they later only offered him P251k net through a
letter-offer dated March 14, 1990.
-If Malbarosa conforms to the letter-offer, he must sign on the space provided. But because he
was dismayed as he eventually learned that the company was financially sound, he insisted to be
paid P395k in cash and he merely indicated on the duplicate “received original for review
purposes” (on March 16) , taking the original with him.
-More than 2 weeks passed and nothing was heard from Malbarosa. SEADC decided to
withdraw its offer. April 3, 1990: SEADC issued a board resolution authorizing Phitectic and/or
Valero to demandthe return of the car and to take court action for the same
-April 4, 1990: Demand letter was sent to Malbarosa regarding the withdrawal of the offer and
thedemand for the car’s return. Malbarosa responded that he already accepted the offer and
included a photocopy of the original wherein he allegedly signed the letter-offer on March 28,
1990.
-Trial Court ruled in favor of SEA Dev’t and ordered Malbarosa to pay for the lease rentals of
the motor vehicle. On appeal, the CA affirmed trial court’s decision.
ISSUE:
Whether or not there was a valid acceptance on Malbarosa’s part on the March 14, 1990
letter-offer.
HELD:
No. There was no valid acceptance.
Malbarosa adduced no proof that SEA Dev’t had granted him a period within which to
accept the offer.
Art. 1318 on the essential requisites of a contract: requires (1)consent,(2) object certain,
and (3)cause of the obligation. Consent is manifested by meeting of the offer and the acceptance
upon the thingand the cause which are to constitute the contract.
 Acceptance must be absolute, unconditional, and without variance of any sort from
theoffer when made known to the offeror. An acceptance not made in the manner prescribed is
not effective but constitutes acounter-offer.
MARTINEZ v HSBC
FACTS:
-Mercedez Martinez sought to annul a contract on the ground that her consent was obtained
under threats
-Under the contract, she agreed to convey several properties to Aldecoa & Co. and HSBC as a
settlement of their claims against her and her husband, who fled the country.
-It was established at the trial that during the period of negotiation, representations were made to
her by HSBC, et.al and concurred in by her lawyers, that if she assented to the requirements of
the HSBC, et.al, the civil suit against herself and her husband would be dismissed and the
criminal charges against the latter withdrawn.
-However, if she refused, her husband must either spend the rest of his life abroad or be
criminally prosecuted.
ISSUE:
Whether or not there was violence that would invalidate the contract.
HELD:
No. There was no violence that would invalidate the contract.
In order that this contract can be annulled it must be shown that Mercedes never gave her
consent to the execution thereof.
It is, however, necessary to distinguish between real duress and the motive which is
present when one gives his consent reluctantly. A contract is valid even though one of the parties
entered into it against his wishes and desires or even against his better judgment. Contracts are
also valid even though they are entered into by one of the parties without hope of advantage or
profit. A contract whereby reparation is made by one party for injuries which he has willfully
inflicted upon another is one which from its inherent nature is entered into reluctantly by the
party making the reparation. He is confronted with a situation in which he finds the necessity of
making reparation or of taking the consequences, civil or criminal, of his unlawful acts. He
makes the contract of reparation with extreme reluctance and only by the compelling force of the
punishment threatened. Nevertheless, such contract is binding and enforceable.