99 SANCHEZ v RIGOS

45 SCRA 368 (1972)

Topic: Elements of a Contract; Essential; Acceptance
Doctrine:
Facts:
In an instrument entitled "Option to Purchase," executed on April 3, 1961, defendantappellant Severina Rigos "agreed, promised and committed ... to sell" to plaintiff-appellee
Nicolas Sanchez for the sum of P1,510.00 within two (2) years from said date, a parcel of
land situated in the barrios of Abar and Sibot, San Jose, Nueva Ecija. It was agreed that said
option shall be deemed "terminated and elapsed," if Sanchez shall fail to exercise his right
to buy the property" within the stipulated period. On March 12, 1963, Sanchez deposited the
sum of Pl,510.00 with the CFI of Nueva Ecija and filed an action for specific performance and
damages against Rigos for the latters refusal to accept several tenders of payment that
Sanchez made to purchase the subject land.
Defendant Rigos contended that the contract between them was only a unilateral
promise to sell, and the same being unsupported by any valuable consideration, by force of
the New Civil Code, is null and void." Plaintiff Sanchez, on the other hand, alleged in his
compliant that, by virtue of the option under consideration, "defendant agreed and
committed to sell" and "the plaintiff agreed and committed to buy" the land described in the
option. The lower court rendered judgment in favor of Sanchez and ordered Rigos to accept
the sum Sanchez judicially consigned, and to execute in his favor the requisite deed of
conveyance. The Court of Appeals certified the case at bar to the Supreme Court for it
involves a question purely of law.
Issue:
Whether or not there was a contract to buy and sell between the parties or only a mere
unilateral promise to sell
Held:

The Court said that the plaintiff (Sanchez) is his complaint alleges that under the
Annex A (copy of the contract), the defendant agreed and committed to sell and the
plaintiff agreed and committed to buy said property making it reciprocally demandable
pursuant to the first paragraph of Art. 1479.
The Court debunked this theory by saying that the option did not impose upon the
plaintiff the obligation to purchase the property. It was not a contract to buy and sell, it
clearly states that there is a commitment to sell the land for P1510.00 but no indication of a
consideration distinct from the price stipulated for the sale of the land.
The Court said that the LC presumed the existence of this consideration using NCC
1354:
NCC 1354: Although the cause is not stated in the contract, it is presumed that it
exists and is lawful, unless the debtor proves the contrary. (1277)
However the Court said that, 1354 pertains to contracts in general, while 1479 refer
to sales, or more specifically, to an accepted unilateral promise to buy or to sell. With 1479
controlling the case at bar
In order that said unilateral promise be binding upon the promisor, Art. 1479 requires
the concurrence of a condition and that the promise be supported by a consideration
distinct from the price, which is absent in this case.
Defendant has explicitly pleaded the absence of this consideration and the plaintiff
(Sanchez), by joining in the petition for the judgment of the pleadings, has impliedly
admitted the truth of her defense, as held in Bauermann vs. Casas: One who prays for
judgment on the pleadings without offering proof as to the truth of his own allegations, and

without giving the opposing party an opportunity to introduce evidence, must be understood
to admit the truth of all the material and relevant allegations of the opposing party, and to
rest his motion for judgment on those allegations taken together with such of his own as are
admitted in the pleadings.
The decision cited a case:
Southwestern Sugar Molasses Co. vs. Atlantic Gulf and Pacific Co.:
In this case, the appellants main contention is that the option granted to the appellee to sell
to him/her Barge no. 10 has no legal effect bec. it is not supported by any consideration and
invokes NCC 1479. On the other hand, appellee maintains and invokes NCC 1324: When the
offerer has allowed the offeree a certain period to accept, the offer may be withdrawn any
time before acceptance by communicating such withdrawal, except when the option is
founded upon consideration as something paid or promised.
Decision: SC said that while it is true that under article 1324 of the new Civil Code,
the general rule regarding offer and acceptance is that, when the offerer gives to the offeree
a certain period to accept, "the offer may be withdrawn at any time before acceptance"
except when the option is founded upon consideration, but this general rule must be
interpreted as modified by the provision of article 1479 above referred to, which applies to
"a promise to buy and sell" specifically. As already stated, this rule requires that a promise to
sell to be valid must be supported by a consideration distinct from the price.
The Court cited another case, however, which is the justification for their ruling in
favour of Sanchez and said that there is no distinction between 1324 and 1479. Atkins, Kroll
and Co., Inc. v. Cua Hian Tek:
Decision: An option is unilateral: a promise to sell at the price fixed whenever the offeree
should decide to exercise his option within the specified time. After accepting the promise
and before he exercises his option, the holder of the option is not bound to buy. He is free
either to buy or not to buy later.
In this case, however, upon accepting herein petitioner's offer a bilateral promise to
sell and to buy ensued, and the respondent ipso facto assumed the obligation of a
purchaser. He did not just get the right subsequently to buy or not to buy. It was not a mere
option then; it was a bilateral contract of sale.
IN OTHER WORDS, since there is no valid consideration, offerer is not bound to
promise and may widthraw it. However, pending notice of his withdrawal, if his offer is
ACCEPTED, the contract of sale has been PERFECTED. Moreover, the decision in
Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., holding that Art. 1324 is
modified by Art. 1479 of the Civil Code, in effect, considers the latter as an exception to the
former, and exceptions are not favored, unless the intention to the contrary is clear, and it is
not so, insofar as said two (2) articles are concerned.
What is more, the reference, in both the second paragraph of Art. 1479 and Art.
1324, to an option or promise supported by or founded upon a consideration, strongly
suggests that the two (2) provisions intended to enforce or implement the same principle.
Decision in Southwestern is abandoned, Atkins is applied.