G.R. No.

128066

June 19, 2000

JARDINE DAVIES INC., petitioner, vs. CO R! O" A##EA$S %n& "AR COR#ORA!ION, respon&ents.

dismissal of the complaint against it, while PUREFOODS appealed the Decision of the same court which ordered it to pay FE!S#O$ 'I$$S S ##$( The #ourt of %ppeals affirmed in toto the Decision of the trial court$ (t also re'ersed the lower court and ordered 5%RD(+E to pay FE!S#O damages for inducing PUREFOODS to 'iolate the latter1s contract with FE!S#O$ PUREFOODS was also directed to pay FE!S#O moral and e7emplary damages as well as attorney1s fees$ #ourt of %ppeals denied separate motions for reconsideration filed &y PUREFOODS and 5%RD(+E$ PUREFOODS argues that its letter to FE!S#O was not an acceptance of the latter1s &id proposal and award of the pro3ect &ut more of a ualified acceptance constituting a counter2offer$ Since PUREFOODS ne'er recei'ed FE!S#O1s conforme, PUREFOODS was 'ery well within reason to re'o"e its ualified acceptance or counter2offer$ 8ence, no contract was perfected &etween PUREFOODS and FE!S#O$ 5%RD(+E asserts that the records are &ereft of any showing that it had prior "nowledge of the supposed contract &etween PUREFOODS and FE!S#O, and that it induced PUREFOODS to 'iolate the latter1s alleged contract with FE!S#O$ !oreo'er, 5%RD(+E reasons that FE!S#O, an artificial person, is not entitled to moral damages$ 4ut granting arguendo that the award of moral damages is proper, said award is e7tremely e7cessi'e$ ISS ES) 9$ 0hether there e7isted a perfected contract &etween PUREFOODS and FE!S#O and whether there was an acceptance of the offer, and if so, if it was communicated, there&y perfecting the contract$6 and 2$ 0hether there is any showing that 5%RD(+E induced or conni'ed with PUREFOODS to 'iolate the latter1s contract with FE!S#O$ R $ING) 9$ #ontracts are perfected &y mere consent, upon the acceptance &y the offeree of the offer made &y the offeror$ From that moment, the parties are &ound not only to the fulfillment of what has &een e7pressly stipulated &ut also to all the conse uences which, according to their nature, may &e in "eeping with good faith, usage and law$ To produce a contract, the acceptance must not ualify the terms of the offer$ 8owe'er, the acceptance may &e e7press or implied$

EAS!

"AC!S) To remedy and curtail further losses due to series of power failures, petitioner PUREFOODS decided to install 2 generators in its food processing plant in San Ro ue, !ari"ina #ity$ % &idding for the supply and installation of the generators was held$ Out of the prospecti'e &idder, only F%R E%ST !())S SUPP)* #ORPOR%T(O+ ,FE!S#O-, !O+%R. and %D/%+#E PO0ER su&mitted &id proposals and ga'e &id &onds as re uired$ Thereafter, PUREFOODS confirmed the award of the contract to FE!S#O$ (mmediately, FE!S#O su&mitted the re uired performance &ond and contractor1s all2ris" insurance policy which PUREFOODS ac"nowledged$ FE!S#O made arrangements with its principal and started the PUREFOODS pro3ect &y purchasing the necessary materials$ PUREFOODS on the other hand returned FE!S#O1s 4idder1s 4ond as re uested$ )ater, howe'er, PUREFOODS unilaterally canceled the award$ FE!S#O protested the cancellation and sought a meeting with PUREFOODS$ 4efore the matter could &e resol'ed, PUREFOODS already awarded the pro3ect and entered into a contract with 5%RD(+E +E))$ FE!S#O thus wrote PUREFOODS to honor its contract and to 5%RD(+E to cease and desist from deli'ering and installing the generators$ (ts demand letters unheeded, FE!S#O sued &oth PUREFOODS and 5%RD(+E$ %fter FE!S#O presented its e'idence, 5%RD(+E filed a Demurrer which was granted &y the trial court$ The trial court rendered a decision ordering PUREFOODS to indemnify FE!S#O representing the 'alue of engineering ser'ices it rendered6 to pay FE!S#O its contractor1s mar"2up on installation wor"6 to pay attorney1s fees6 and pay costs$ Trial court dismissed the counterclaim filed &y PUREFOODS$ 4oth FE!S#O and PUREFOODS appealed to the #ourt of %ppeals$ FE!S#O appealed the Resolution of the trial court which granted the Demurrer to E'idence filed &y 5%RD(+E resulting in the

For a contract to arise, the acceptance must &e made "nown to the offeror$ %ccordingly, the acceptance can &e withdrawn or re'o"ed &efore it is made "nown to the offeror$ Since petitioner PUREFOODS started the process of entering into the contract &y conducting a &idding, %rt$ 9:2; of the #i'il #ode, which pro'ides that <=a>d'ertisements for &idders are simply in'itations to ma"e proposals,< applies$ %ccordingly, the Terms and #onditions of the 4idding disseminated &y petitioner PUREFOODS constitutes the <ad'ertisement< to &id on the pro3ect$ The &id proposals or uotations su&mitted &y the prospecti'e suppliers including respondent FE!S#O, are the offers$ %nd, the reply of petitioner PUREFOODS, the acceptance or re3ection of the respecti'e offers$ ?uite o&'iously, the letter of petitioner$ PUREFOODS to FE!S#O constituted acceptance of respondent FE!S#O1s offer as contemplated &y law$ The tenor of the letter, i$e$, <This will confirm that Pure Foods has awarded to your firm ,FE!S#O- the pro3ect,< could not &e more categorical$ (n fine, the enumerated <&asic terms and conditions< were prescriptions on how the o&ligation was to &e performed and implemented$ They were far from &eing conditions imposed on the perfection of the contract$ %s can &e inferred from the actual phrase used in the first portion of the letter, the decision to award the contract has already &een made$ The letter only ser'es as a confirmation of such decision$ 8ence, to the #ourt1s mind, there is already an acceptance made of the offer recei'ed &y Purefoods$ This #ourt has awarded in the past moral damages to a corporation whose reputation has &een &esmirched$ (n the instant case, respondent FE!S#O has sufficiently shown that its reputation was tarnished after it immediately ordered e uipment from its suppliers on account of the urgency of the pro3ect, only to &e canceled later$ 0e thus sustain respondent appellate court1s award of moral damages$ 0e howe'er reduce the award from P2,@@@,@@@$@@ to P9,@@@,@@@$@@, as moral damages are ne'er intended to enrich the recipient$ )i"ewise, the award of e7emplary damages &y way of e7ample for the pu&lic good is e7cessi'e and should &e reduced to P9@@,@@@$@@$

2$ 0hile it may seem that petitioners PUREFOODS and 5%RD(+E conni'ed to decei'e respondent FE!S#O, we find no specific e'idence on record to support such perception$ )i"ewise, there is no showing whatsoe'er that petitioner 5%RD(+E induced petitioner PUREFOODS$ The similarity in the design su&mitted to petitioner PUREFOODS &y &oth petitioner 5%RD(+E and respondent FE!S#O, and the tender of a lower uotation &y petitioner 5%RD(+E are insufficient to show that petitioner 5%RD(+E indeed induced petitioner PUREFOODS to 'iolate its contract with respondent FE!S#O$ Resolution of the trial court and ordering petitioner 5%RD(+E D%/(ES, (+#$, to pay pri'ate respondent moral damages is RE/ERSED and SET %S(DE for insufficiency of e'idence6 and the assailed Decision of the #ourt of %ppeals ordering petitioner PUREFOODS #ORPOR%T(O+ to pay pri'ate respondent F%R E%ST !())S SUPP)* #ORPOR%T(O+ the sum representing the 'alue of engineering ser'ices it rendered, contractor1s mar"2up on installation wor", as well as attorney1s fees is %FF(R!ED plus moral damages and e7emplary damages$