Atkins Kroll & Co. vs. Cu Hian Tek
102 Phil 984
January 1958
FACTS:
On September 13, 1951, petitioner Atkins Kroll & Co. (Atkins) sent a letter to respondent B. Cu Hian Tek (Hian Tek) offering (a) 400 cartons of Luneta brand Sardines in Tomato Sauce 48 / 15-oz. Ovals at $8.25 per carton, (b) 300 cartons of Luneta brand Sardines Natural 48/15 oz. talls at $6.25 per carton, and (c) 300 cartons of Luneta brand Sardines in Tomato Sauce 100/5-oz. talls at $7.48 per carton, with all of the offers subject to reply by September 23, 1951. Hian Tek unconditionally accepted the said offer through a letter delivered on September 21, 1951, but Atkins failed to deliver the commodities due to the shortage of catch of sardines by the packers in California.
Hian Tek, therefore, filed an action for damages in the CFI of Manila which granted the same in his favor. Upon Atkins’ appeal, the Court of Appeals affirmed said decision but reduced the damages to P3,240.15 representing unrealized profits. Atkins herein contends that there was no such contract of sale but only an option to buy, which was not enforceable for lack of consideration because it is provided under the 2nd paragraph of Article 1479 of the New Civil Code that "an accepted unilatateral promise to buy or to sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price.” Atkins also insisted that the offer was a mere offer of option, because the "firm offer" was a continuing offer to sell until September 23.
Was there a contract of sale between the parties or only a unilateral promise to buy?
COURT RULING:
The Supreme Court held that there was a contract of sale between the parties. Petitioner’s argument assumed that only a unilateral promise arose when the respondent accepted the offer, which is incorrect because a bilateral contract to sell and to buy was created upon respondent’s acceptance.
Had B. Cua Hian Tek backed out after accepting, by refusing to get the sardines and / or to pay for their price, he could also be sued. But his letter-reply to Atkins indicated that he accepted "the firm offer for the sale" and that "the undersigned buyer has immediately filed an application for import license.” After accepting the promise and before he exercises his option, the holder of the option is not bound to buy. In this case at bar, however, upon respondent’s acceptance of herein petitioner's offer, a bilateral promise to sell and to buy ensued, and the respondent had immediately assumed the obligations of a purchaser.
