Valencia v RFC and Court of Appeals Facts:
On May 1952, respondent issued and advertised to the general public an invitation to bid for the construction if a reinforced concrete building in Davao. In response to the invitation, petitioner submitted a bid on complete construction, electrical installations, and plumbing installations. In June 1952, respondents Board of Governors passed a resolution awarding the contract for construction of the building to Sanchez & Antigua Engineering Co.; the electrical installation to Lorenzo Sarmiento; and the plumbing installations to petitioner Valencia. This notice was given to petitioner through a letter where it was also indicated that petitioner is invited to the office for contract signing. Petitioner replied expressing his “thanks and appreciation” and stating that it would be to the respondent’s advantage to award the contract for the plumbing installations to the contractor of the main building, because the presence of the petitioner’s men in the building might give said contractor an excuse to seek extension of time; and because plumbing installations should go hand in hand with the progress of the work of the construction of the building In view of the petitioner’s failure to sign the contract, respondent awarded the same to the contractor of the building. Respondent, then, brought action against petitioner to recover P6,200 representing the difference between the amount of contract awarded to him at the price at which the plumbing installations were awarded to Sanchez & Antigua Engineering Co. Petitioner answered and said that upon being notified of the award in his favor, he “prepared all the necessary equipment, materials and plumbers to do and perform the installations. But without his consent and knowledge, respondent entered into a contract with Sanchez so he set up a counterclaim of P5,000. CFI: Absolved petitioner CA: reversed CFI’s decision; Judgment was for the respondent. Hence, the present case.
Issues: 1. W/N the award given to petitioner modified the contract making it incomplete and invalid. 2. W/N the petitioner’s offer was good only until June 15, 1952 since it was accompanied by a bond which expires on the same date. (Since petitioner only knew of the ward on June 22, the contract then was not perfected). 3. W/N the contract was perfected with the non-fulfillment of the condition requiring the giving of a performance bond.
Held: 1. No. 2. No. 3. Yes. The contract was perfected. Doctrine: 1. The proposal submitted by the petitioner consisted of (1) complete construction of the building, (2) electrical installations, and (3) plumbing installations. Each one of these was complete in itself Each item was distinct, separate and independent from the other items The award given to the petitioner was neither a modification of his offer nor a partial acceptance thereof. thereof. It was an unqualified acceptance of the fourth item of his bod, which constituted a complete offer. specify its duration. Although the bond itself 2. The petitioner’s bid did not specify expired on June 1952, this does not mean that the bid lapsed on the same date. The bond does not represent the principal obligation itself. It is merely an accessory. That is to say, the principal obligation may stand without the existence of the bond. Moreover, the bond was given for the benefit of the respondent, not of the petitioner, so the former could legally waive said benefit. Petitioner’s conduct is contrary to his contention that his bid has lapsed with the expiration of the said bond. He did not object upon receipt of notice of the award o o He did not even say that his offer has expired already
3. Such condition (giving of a performance bond) presupposes existence of a contract. The existence of the contractual relation between the parties did not depend upon the posting of a performance bond.
