ZAYCO v.
SERRA
(1923|Avacena)
LESSON: FORMS OF OFFER
Art. 1319. Consent is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the
contract. The offer must be certain and the acceptance absolute. A
qualified acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer
except from the time it came to his knowledge. The contract, in such
a case, is presumed to have been entered into in the place where
the offer was made.
Art. 1325. Unless it appears otherwise, business advertisements of
things for sale are not definite offers, but mere invitations to make an
offer.
Art. 1326. Advertisements for bidders are simply invitations to make
proposals, and the advertiser is not bound to accept the highest or
lowest bidder, unless the contrary appears.
FACTS:
Nov. 7, 1989 - Lorenzo Zayco who had a property and
Salvador Serra who owned Palma Central entered into a contract,
the pertinent clauses of which state that:
Serra shall give Zayco an option to buy Palma Central for P1M.
When the the purchase of Palma Central is made and Zayco cannot
pay the whole price in cash, he has to pay the first half in cash and
half paid in 3 years. Provided that the Zayco gives a security or bond
that satisfies the party of the first part. The option of the party to buy
or become a partner of Sarra expires on June 30,1919. If its sold or a
partnership with another is formed, Zayco shall have preference to
make such a sale or become a partner over any other persons
desiring to purchase the central or enter into a partnership.
June 28, 1919- Zayco through attorney accepted the contract
and partly paid using a cash order from BPI Iloilo for P100,000.
Notice was also given to Serra in the letter that PNB agreed to
transfer his long term loan of P600,000 to the account of Zayco to
hold him responsible for all the amounts had and received due to the
loan.
 Serra was to be completely removed from responsibility
 Ready to give the bond required by the contract b
 Demanded Serra to execute the deed of sale
Serra knew about it and answered June 30, 1919. But on July
15, Serra wrote that the option contract of Nov. 7 was cancelled.
July 30, 1919 – Zayco brought suit vs. Serra to compel him to
execute the deed of sale, convey Palma Central, and pay P500,000
damages. Jan. 23, 1920 amended complaint that after Nov. 7
contract and before June 28, 1919, a stipulation was made by them
that the sum to be paid in cash of total price was P100,000.
 Re first complaint: Serra said contract of Nov. 7, 1918 did not
specify the part of the price that was to be paid in cash and
the part that was to be paid not exceeding 3 years
 After amendment: Serra alleged there was no such
stipulation that specified how much he needed to pay.
March 19, 1920- SUPPLEMENTAL COMPLAINT cus Serra sold
Palma Central to certain people for P1.5M on the terms of the said
contract. Prayed that Zayco be declared entitled to buy on the same
terms as sthe sale to 3rd parties.
Held:
Nov. 7, 1918 contract: Zayco had the right to (1) buy Palma Central
until June 30, 1919, and (2) have preference, after that date, over
any other purchaser making the same terms.
COURT: While it is true that the contract did not state any
consideration on the part of Serra, it is presumed that there is a
consideration in all contracts (Art. 1277, CC). Consideration can be
proved and there is evidence in this case.
 third parties incurred under the contract.” (I’m sorry I don’t
1. As to the validity and consideration of the contract understand maybe the hard copy has a different phrase”.

The Palma Central was competing with the Bearin Central of

Lizarraga Hermanos and both were wooing Zayco who owned an
estate between them that grows sugar cane. Lizarraga offered to
remit his P40K debt, and Serra offered 60% of the sugar milled from
his canes in Palma instead of usual 55%. He chose Palma.
 Contract was valid. These events + contract evidence of
consideration. The consideration was Zayco waiving
possible benefits from Bearin and his support/loyalty to
Palma Central was a prestation of a thing or service
which benefited Serra.
 Initial agreement was at least an offer to sell which Zayco
accepted before it was unknowingly withdrawn and sold it to
someone else. Serra KNEW he accepted the offer before
withdrawing it.
ACCEPTANCE OF ZAYCO NOT ENOUGH TO PERFECT THE
CONTRACT AND SERRA IS NOT COMPELLED TO EXECUTE
THE SALE.
DISPO: Affirmed judgement.
*Note: The case only mentioned Art. 1277. Did not really cite any
other provisions but please keep in mind the lesson provisions in the
syllabus as mentioned under the title.
RSAT

2. As to the effect of Zayco’s acceptance

However, Zayco’s acceptance in his letter to support Serra’s Palma

Central did not perfect the contract because for acceptance to have
effect, it must be plain and unconditional because if not it’s a
new proposal. The November contract stipulated that a part of the
price of P1M that could be paid in installments, was to be paid in
cash. But the amount was undetermined. The 100k given was
merely a proposal since the amount was not clearly specified. But
the amount was not accepted by Serra. The contract should have
had: (a) Zayco’s acceptance of the terms, and (b) Serra accepting
the 100k.
 Other allegations of Zayco like the stipulation of 100k, that
he agreed to assume the P600k debt of Serra with PNB,
were not alleged in the complaint or presented as evidence
in court.

3. As to claim to preference

3 justices believe he has preference but majority do not

because “plaintiffs have not formally offered to repay the defendant