Sanchez v. Rigos

On April 3, 1961, Severina Rigos signed an instrument entitled "Option to Purchase." In it she "agreed, promised and committed" to sell Nicolas Sanchez a parcel of land in San Jose, Nueva Ecija for P1,510 within two years. His right would be deemed terminated if he failed to exercise it within that period. Sanchez signed his conformity. Within the two years, Sanchez made several tenders of the price, and Rigos rejected them all. On March 12, 1963 he deposited the amount with the Court of First Instance of Nueva Ecija and sued for specific performance and damages. Rigos answered that the contract was a unilateral promise to sell that no valuable consideration supported, and so was null and void under the Civil Code. Both parties moved for judgment on the pleadings. The CFI relied on Art. 1354, which presumes the existence of consideration. It ordered Rigos to accept the amount deposited and to execute a deed of conveyance. Rigos appealed to the Court of Appeals, which certified the case to the Supreme Court as involving a purely legal question.

1. 1Whether Rigos's unilateral promise to sell, unsupported by a consideration distinct from the price, was binding on her as an option.
2. 2Whether Sanchez's acceptance of the offer before its withdrawal gave rise to a perfected contract of sale.

The instrument was an option, a unilateral promise to sell. It was not a bilateral contract to buy and sell, because it imposed no obligation on Sanchez to buy. Under the second paragraph of Art. 1479, an accepted unilateral promise to buy or sell binds the promisor only "if the promise is supported by a consideration distinct from the price." Art. 1479 controls over Art. 1354 because it specifically governs sales. The promisee therefore has the burden of proving that distinct consideration. Sanchez never alleged it. By joining in the motion for judgment on the pleadings, he impliedly admitted Rigos's averment that there was none. The option, as such, did not bind Rigos. However, the Court reiterated Atkins, Kroll & Co. v. Cua Hian Tek. An option without consideration is a mere offer to sell, which is not binding until accepted. If it is accepted before it is withdrawn, a bilateral contract of sale arises. "Pending notice of its withdrawal, his accepted promise partakes, however, of the nature of an offer to sell which, if accepted, results in a perfected contract of sale." This reading harmonizes Art. 1479 with Art. 1324, under which an offeror who gives a period to accept may withdraw before acceptance unless the option is founded on consideration. It also avoids treating Art. 1479 as an unfavored exception to Art. 1324. Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., which held that an option without consideration may be withdrawn even after acceptance, was deemed abandoned or modified insofar as inconsistent. The CFI decision ordering Rigos to convey the land was affirmed, with costs against her.