Sanchez v. Rigos
REITERATIONFacts
The Antecedents: Plaintiff Nicolas Sanchez and defendant Severina Rigos executed an "Option to Purchase" instrument on April 3, 1961. Rigos agreed to sell a parcel of land to Sanchez for P1,510.00 within two years, with the option terminating if Sanchez failed to exercise his right to buy within the period. Sanchez made several tenders of payment within the period, but Rigos rejected them. On March 12, 1963, Sanchez deposited the sum with the Court of First Instance (CFI) and filed an action for specific performance and damages. Procedural History: Rigos admitted some allegations, denied others, and asserted as a special defense that the contract was a unilateral promise to sell unsupported by valuable consideration, thus null and void under the New Civil Code. Both parties jointly moved for a judgment on the pleadings. The CFI rendered judgment for Sanchez, ordering Rigos to accept the consigned sum and execute the deed of conveyance, and sentencing her to pay attorney's fees and costs. Rigos appealed to the Court of Appeals, which certified the case to the Supreme Court as it involved a pure question of law. The Petition: The core issue revolves around the interpretation and application of Article 1479 of the Civil Code concerning unilateral promises to sell.
Issue(s)
Whether a unilateral promise to sell (option) that is not supported by a consideration distinct from the price is binding upon the promissor after it has been accepted by the promisee.
Ruling
The Supreme Court affirmed the decision of the lower court. It held that while an option not supported by a distinct consideration is merely a unilateral promise to sell and may be withdrawn, its acceptance before withdrawal creates a binding contract of sale. The Court reiterated its doctrine in Atkins, Kroll & Co., Inc. v. Cua Hian Tek, abandoning the view in Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co. that Article 1324 is modified by Article 1479.
Ratio Decidendi
On the Sole Issue: The Court held that while Article 1479, paragraph 2, requires a consideration distinct from the price for a unilateral promise to be binding as an option, this does not mean the offer is void if no such consideration exists. Applying the logic from Atkins, Kroll and Co., Inc. v. Cua Hian Tek, the Court explained that an option without separate consideration is a mere offer. If the offeree accepts the offer before it is withdrawn, a bilateral contract of sale is perfected regardless of the initial lack of consideration for the option itself. The Court explicitly abandoned the contrary ruling in Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., which previously held that an option could be withdrawn even after acceptance if it lacked separate consideration. The Court reasoned that Article 1324 and Article 1479 must be reconciled: Article 1324 allows withdrawal of an offer at any time before acceptance unless there is consideration, and Article 1479 clarifies that for the promise to be binding as a promise (preventing withdrawal during the period), separate consideration is needed. Thus, since Rigos did not withdraw the offer before Sanchez tendered payment and accepted the promise, a valid and demandable contract of sale was formed. The concurrence of offer and acceptance generated a contract under Articles 1254 and 1262 of the Civil Code.
Main Doctrine
An accepted unilateral promise to sell, even if not supported by a consideration distinct from the price, generates a binding contract of sale upon acceptance, provided the offer is not withdrawn before acceptance.