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SWEDISH MATCH V CA
FACTS:
Swedish Match, AB is a corporation organized under the laws of
Sweden with threesubsidiary corporations in the Philippines: Phimco
Industries, Inc., Proident !ree "arms, Inc.,
and #!!$%ouie &Phils.', Inc. In ()**, S!#+A, the then parent
company of SMAB, decided to
sell SMAB of Sweden. d nri-uez, ice/President of Swedish Match
Sociedad Anonimas,
informed the Philippine financial and business circles that the
Phimco shares were for sale under
strict instructions that the sale of such should be e0ecuted on
or before 12 3une ())2.
!he A"P +etirement and Separation Benefits System, Antonio
%iton4ua, the president and
general manager of A%S, through a letter, submitted a firm offer
to buy all of the latter5s shares
in Phimco and all of Phimco5s shares in Proident !ree "arm, Inc.
and #!!$%ouie &Phils.', Inc.
for the sum of P672,222,222.22. !hrough its 8hief 0ecutie
#fficer, Massimo +ossi, SMAB, in
its letter, informed respondents that their price offer was
below their e0pectations but urged them
to reiew and analyze the alue and profit potentials of the
Phimco shares, with the assurance
that respondents would en4oy a certain priority.
!hereafter, an e0change of correspondence ensued between
petitioners and respondents. In
his letter, %iton4ua offered to buy the disputed shares for 9S1;
million. "urther trade of
information too< place. %iton4ua informed that they may not
be able to submit their final bid on
the gien deadline considering that the ac-uisition audit
&+e-uested on the 39= ((/ %!!+
made by +ossi> sub4ect to reimbursement by SMAB up to the
amount of 9S?2,222 if things
don5t go A%S5s way' of Phimco and the reiew of the draft
agreements hae not been completed.
In a letter dated 3uly 1, ())2, +ossi informed %iton4ua that on
3uly ?, SMAB signed a conditional
contract with a local group for the disposal of Phimco and that
the latter5s bid would no longer be
considered unless the local group would fail to consummate the
transaction on or before
September (7, ())2. Ir
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contract of sale between petitioners and respondents. SMAB
did not accept the bid offer of
respondents as the letter was a mere initation for respondents
to conduct a due diligence process
or pre/ac-uisition audit. Assuming that respondents bid was
faored by an oral acceptance made
in priate by officers of SMAB, such acceptance was merely
preparatory to a formal acceptance
by the SMAB
CA reversed the RTC’s decision It ruled that the
series of written communications
between petitioners and respondents collectiely constitute
a sufficient memorandum of their
agreement under Article (@21, =88. !he letters e0changed between
the parties were sufficient to
establish that an agreement to sell the disputed shares to
respondents was reached. It ordered the
remand of the case to the trial court for further
proceedings.
A%S then argued that there was partial performance of the
perfected contract on their part
based on the conduct of the ac-uisition audit. !hey aerred
that petitioners agreed to be bound by
the results of the audit and offered to reimburse the costs
thereof.
ISS!ES:
W"# there $as a per%ected contract o% sale &et$een
petitioners and respondents $ith
respect to the 'himco shares
R!(I#):
#" !he e0change of correspondence between the
parties hardly constitutes the note or
memorandum within the conte0t of Article (@21 of the 8iil 8ode.
+ossi5s letter dated (( 3une
())2 is not complete in itself. First, it does not indicate at
what price the shares were being sold.
+espondents were supposed to submit their final offer after the
completion of the due diligence
process but they weren5t able to. !his undoubtedly proes
that there was as yet no definite
agreement as to the price. Second, the letter does not state the
mode of payment of the price
which is an essential element such that a disagreement on the
manner of payment is tantamount
to a failure to agree on the price.
%iton4ua5s proposal of the ac-uisition of the Phimco shares for
9S1; million was merely an
offer. !he statement that they would not be able to submit their
final bid by 12 3une ())2 is
inconsistent with their declaration that the 9S1; million was
their final bid. !he lac* o% ade%inite o%%er on the part o%
respondents could not possibly sere as the basis of their
claim
that the sale of the Phimco shares in their faor was perfected,
for one essential element of a
contract of sale was obiously wanting, the price certain in
money or its e-uialent.
ranting arguendo, that the amount of 9S1; million was a definite
offer, it would remain
as a mere offer in the absence of eidence of its acceptance. !he
acceptance must be identical in
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all respects with that of the offer so as to produce consent or
meeting of the minds. +espondent5s
attempt to proe the alleged erbal acceptance of their 9S1;
million bid becomes futile for
there was in the first place no meeting of the minds with
respect to the price. Its plea of partial
performance should li
