ABSCBN BROADCASTING CORPORATION vs. HONORABLE COURT OF APPEALS, G.R. No. 128690 January 21, 1999 ~ Mister Criminology

ABSCBN BROADCASTING CORPORATION vs. HONORABLE COURT OF APPEALS, REPUBLIC BROADCASTING CORP, VIVA PRODUCTION, INC., and VICENTE DEL ROSARIO

G.R. No. 128690 January 21, 1999

FACTS:

1. In 1990, ABSCBN and Viva executed a Film Exhibition Agreement whereby Viva gave ABSCBN an exclusive right to exhibit some Viva films.
2. One of the provisions of the agreement states that ABSCBN shall have the right of first refusal to the next twenty-four Viva films for TV telecast provided, however, that such right shall be exercised by ABSCBN from the actual offer in writing.
3. Viva, through defendant Del Rosario, offered ABSCBN, through its vice-president Charo Santos Concio, a list of 3 film packages (36 title) from which ABSCBN may exercise its right of first refusal under the aforesaid agreement
4. ABSCBN, however through Mrs. Concio, "can tick off only ten (10) titles" (from the list) "we can purchase" and therefore did not accept said list.
5. On February 27, 1992, defendant Del Rosario approached ABSCBN's Ms. Concio, with a list consisting of 52 original movie titles (i.e. not yet aired on television) including the 14 titles subject of the present case, as well as 104 reruns (previously aired on television) from which ABSCBN may choose another 52 titles.
6. On April 2, 1992, defendant Del Rosario and ABSCBN general manager, Eugenio Lopez III, met at the Tamarind Grill Restaurant in Quezon City to discuss the package proposal of Viva.
7. What transpired in that lunch meeting is the subject of conflicting versions.
8. Mr. Lopez testified that he and Mr. Del Rosario allegedly agreed that ABSCRN was granted exclusive film rights to 14 films for a total consideration of P36 million; that he allegedly put this agreement as to the price and number of films in a "napkin'' and signed it and gave it to Mr. Del Rosario.
9. On the other hand, Del Rosario denied having made any agreement with Lopez regarding the 14 Viva films; Denied the existence of a napkin in which Lopez wrote something; and insisted that what he and Lopez discussed at the lunch meeting was Viva's film package offer of 104 films for a total price of P60 million. Mr. Lopez promising to make a counter proposal which came in the form of a proposal contract.
10. On April 06, 1992, Del Rosario and Mr. Graciano Gozon of RBS Senior vice-president for Finance discussed the terms and conditions of Viva's offer to sell the 104 films, after the rejection of the same package by ABSCBN.
11. On April 07, 1992, defendant Del Rosario received through his secretary, a handwritten note from Ms. Concio – a draft of the counter proposal
12. The said counter proposal was however rejected by Viva's Board of Directors in the evening of the same day
13. On April 29, 1992, after the rejection of ABSCBN and following several negotiations and meetings defendant Del Rosario and Viva's President Teresita Cruz, in consideration of P60 million, signed a letter of agreement dated April 24, 1992. granting RBS the exclusive right to air 104 Viv produced and/or acquired films including the 14 films subject of the present case.
14. RTC rendered a decision favoring respondents.
15. According to the RTC, there was no meeting of minds on the price and terms of the offer.
16. The alleged agreement between Lopez III and Del Rosario was subject to the approval of the VIVA Board of Directors, and said agreement was disapproved during the meeting of the.
17. Hence, there was no basis for ABSCBN's demand that VIVA signed the 1992 Film Exhibition Agreement.
18. Furthermore, the right of first refusal under the 1990 Film Exhibition Agreement had previously been exercised per Ms. Concio's letter to Del Rosario ticking off ten titles acceptable to them, which would have made the 1992 agreement an entirely new contract.

ISSUE:

Whether or not there is a perfected contract between ABSCBN and VIVA films

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RULING:

A contract is a meeting of minds between two persons whereby one binds himself to give something or to render some service to another for a consideration. There is no contract unless the following requisites concur: (1) consent of the contracting parties; (2) object certain which is the subject of the contract; and (3) cause of the obligation, which is established.

Once there is concurrence between the offer and the acceptance upon the subject matter, consideration, and terms of payment a contract is produced. The offer must be certain. To convert the offer into a contract, the acceptance must be absolute and must not qualify the terms of the offer; it must be plain, unequivocal, unconditional, and without variance of any sort from the proposal. A qualified acceptance, or one that involves a new proposal, constitutes a counteroffer and is a rejection of the original offer.

ABSCBN, sent, through Ms. Concio, a counterproposal in the form of a draft contract proposing exhibition of 53 films for a consideration of P35 million. This counterproposal could be nothing less than the counteroffer of Mr. Lopez during his conference with Del Rosario at Tamarind Grill Restaurant. Clearly, there was no acceptance of VIVA's offer, for it was met by a counteroffer which substantially varied the terms of the offer.

In the case at bar, ABSCBN made no unqualified acceptance of VIVA's offer. Hence, they underwent a period of bargaining. ABSCBN then formalized its counterproposals or counteroffer in a draft contract, VIVA through its Board of Directors, rejected such counteroffer, Even if it be conceded arguendo that Del Rosario had accepted the counteroffer, the acceptance did not bind VIVA, as there was no proof whatsoever that Del Rosario had the specific authority to do so.

Under Corporation Code, unless otherwise provided by said Code, corporate powers, such as the power; to enter into contracts; are exercised by the Board of Directors. However, the Board may delegate such powers to either an executive committee or officials or contracted managers. The delegation, except for the executive committee, must be for specific purposes.

Del Rosario did not have the authority to accept ABSCBN's counteroffer was best evidenced by his submission of the draft contract to VIVA's Board of Directors for the latter's approval. In any event, there was between Del Rosario and Lopez III no meeting of minds.