SWEDISH MATCH v CA

FACTS:
Swedish Match, AB (SMAB) is a corporation organized under the laws of
Sweden, with 3 subsidiary corporations Phimco, Provident Tree Farms, Inc, and OTT/Louie
(Phils,), Inc.
In 1988, STORA, its parent company, decided to sell SMAB and the latters worldwide match,
lighter and shaving products operation to Swedish Match NV (SMNV). Enriquez, VP of SMSA
(management company of SMAB), was held under special instructions that the sale of
Phimco shares should be executed on or before June 30, 1990. Respondent GM Antonio
Litonjua of ALS Management and Development Corp. was one of the interested parties to
acquire Phimco shares, offering US$36 million. After an exchange of information between
CEO Rossi of SMAB and Litonjua, the latter informed that they may not be able to submit
their final bid on the given deadline considering that the acquisition audit of Phimco and the
review of the draft agreements have not been completed.
In a letter dated July 3, 1990, Rossi informed Litonjua that on July 2, SMAB signed a
conditional contract with a local group for the disposal of Phimco and that the latters bid
would no longer be considered unless the local group would fail to consummate the
transaction on or before September 15, 1990. Irked by SMABs decision to junk his bid,
Litonjua asserted that the US$36 million bid was final, thus finalizing the terms of the sale.
After 2 months from receipt of Litonjuas letter, Enriquez informed the former that the
proposed sale with the local buyers did not materialize and invited to resume negotiations
for the sale of Phimco shares based on a new set of conditions, as to reducing the period of
sale from 30-day to 15, to which Litonjua expressed objections and emphasized that the new
offer constituted an attempt to reopen the already perfected contract of sale.
ISSUE:
Whether or not there was a perfected contract of sale between petitioners and
respondents, with respect to the Phimco shares.
HELD: No, there was no perfected contract of sale since Litonjuas letter of proposing
acquisition of the Phimco shares for US$36 million was merely an offer. Consent in a contract
of sale should be manifested by the meeting of the offer and acceptance upon the thing and
the cause which are to constitute the contract. The lack of a definite offer on the part of the
respondents could not possibly serve as the basis of their claim that the sale of the Phimco
shares in their favor was perfected, for one essential element of a contract of sale needed to
be certain --- the price in money or its equivalent. Obviously, there can be no sale without a
price. Respondents attempt to prove the alleged verbal acceptance of their US$36 million
bid becomes futile since there was in the first place no meeting of the minds with respect to
the price, and such was merely a preliminary offer. Respondents failure to submit their final
bid on the deadline set by the petitioners prevented the perfection of the contract of sale.