G.R. No.
L-25494 June 14, 1972
NICOLAS SANCHEZ, plaintiff-appellee,
vs.
SEVERINA RIGOS, defendant-appellant.
Santiago F. Bautista for plaintiff-appellee.
Jesus G. Villamar for defendant-appellant.
CONCEPCION, C.J.:p
Appeal from a decision of the Court of First Instance of Nueva
Ecija to the Court of Appeals, which certified the case to Us, upon
the ground that it involves a question purely of law.
The record shows that, on April 3, 1961, plaintiff Nicolas Sanchez
and defendant Severina Rigos executed an instrument entitled
"Option to Purchase," whereby Mrs. Rigos "agreed, promised and
committed ... to sell" to Sanchez the sum of P1,510.00, a parcel of
land situated in the barrios of Abar and Sibot, municipality of San
Jose, province of Nueva Ecija, and more particularly described in
Transfer Certificate of Title No. NT-12528 of said province, within
two (2) years from said date with the understanding 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. Inasmuch as several tenders of payment of the
sum of Pl,510.00, made by Sanchez within said period, were
rejected by Mrs. Rigos, on March 12, 1963, the former deposited
said amount with the Court of First Instance of Nueva Ecija and
commenced against the latter the present action, for specific
performance and damages.
After the filing of defendant's answer — admitting some allegations
of the complaint, denying other allegations thereof, and alleging,
as special defense, that the contract between the parties "is 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" — on February 11, 1964, both parties, assisted by their
respective counsel, jointly moved for a judgment on the pleadings.
Accordingly, on February 28, 1964, the lower court rendered
judgment for Sanchez, ordering Mrs. Rigos to accept the sum
judicially consigned by him and to execute, in his favor, the
requisite deed of conveyance. Mrs. Rigos was, likewise, sentenced
to pay P200.00, as attorney's fees, and other costs. Hence, this
appeal by Mrs. Rigos.
This case admittedly hinges on the proper application of Article
1479 of our Civil Code, which provides:
ART. 1479. A promise to buy and sell a determinate thing for a
price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing
for a price certain is binding upon the promissor if the promise is
supported by a consideration distinct from the price.
In his complaint, plaintiff alleges 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, copy of which was annexed to said pleading as Annex A
thereof and is quoted on the margin. 1 Hence, plaintiff maintains
that the promise contained in the contract is "reciprocally
demandable," pursuant to the first paragraph of said Article 1479.
Although defendant had really "agreed, promised and committed"
herself to sell the land to the plaintiff, it is not true that the latter
had, in turn, "agreed and committed himself " to buy said property.
Said Annex A does not bear out plaintiff's allegation to this effect.
What is more, since Annex A has been made "an integral part" of
his complaint, the provisions of said instrument form part "and
parcel"2 of said pleading.
The option did not impose upon plaintiff the obligation to
purchase defendant's property. Annex A is not a "contract to buy
and sell." It merely granted plaintiff an "option" to buy. And both
parties so understood it, as indicated by the caption, "Option to
Purchase," given by them to said instrument. Under the provisions
thereof, the defendant "agreed, promised and committed" herself
to sell the land therein described to the plaintiff for P1,510.00, but
there is nothing in the contract to indicate that her aforementioned
agreement, promise and undertaking is supported by a
consideration "distinct from the price" stipulated for the sale of the
land.
Relying upon Article 1354 of our Civil Code, the lower
court presumed the existence of said consideration, and this would
seem to be the main factor that influenced its decision in plaintiff's
favor. It should be noted, however, that:
(1) Article 1354 applies to contracts in general, whereas the
second paragraph of Article 1479 refers to "sales" in particular,
and, more specifically, to "an accepted unilateral promise to buy or
to sell." In other words, Article 1479 is controlling in the case at
bar.
(2) In order that said unilateral promise may be "binding upon the
promisor, Article 1479 requires the concurrence of a condition,
namely, that the promise be "supported by a consideration distinct
from the price." Accordingly, the promisee can not compel the
promisor to comply with the promise, unless the former establishes
the existence of said distinct consideration. In other words,
the promisee has the burden of proving such consideration.
Plaintiff herein has not even alleged the existence thereof in his
complaint.
(3) Upon the other hand, defendant explicitly averred in her
answer, and pleaded as a special defense, the absence of said
consideration for her promise to sell and, by joining in the petition
for a judgment on the pleadings, plaintiff has impliedly admitted the
truth of said averment in defendant's answer. Indeed as early as
March 14, 1908, it had been held, in Bauermann v. Casas,3 that:
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. (La Yebana Company vs. Sevilla,
9 Phil. 210). (Emphasis supplied.)
This view was reiterated in Evangelista v. De la Rosa4 and Mercy's
Incorporated v. Herminia Verde.5
Squarely in point is Southwestern Sugar & Molasses Co. v.
Atlantic Gulf & Pacific Co.,6 from which We quote:
The main contention of appellant is that the option granted to
appellee to sell to it barge No. 10 for the sum of P30,000 under the
terms stated above has no legal effect because it is not supported
by any consideration and in support thereof it invokes article 1479
of the new Civil Code. The article provides:
"ART. 1479. A promise to buy and sell a determinate thing for a
price certain is reciprocally demandable.
An accepted unilateral promise to buy or sell a determinate thing
for a price certain is binding upon the promisor if the promise is
supported by a consideration distinct from the price."
On the other hand, Appellee contends that, even granting that the
"offer of option" is not supported by any consideration, that option
became binding on appellant when the appellee gave notice to it of
its acceptance, and that having accepted it within the period of
option, the offer can no longer be withdrawn and in any event such
withdrawal is ineffective. In support this contention, appellee
invokes article 1324 of the Civil Code which provides:
"ART. 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."
There is no question that under article 1479 of the new Civil Code
"an option to sell," or "a promise to buy or to sell," as used in said
article, to be valid must be "supported by a consideration distinct
from the price." This is clearly inferred from the context of said
article that a unilateral promise to buy or to sell, even if accepted,
is only binding if supported by consideration. In other words, "an
accepted unilateral promise can only have a binding effect if
supported by a consideration which means that the option can still
be withdrawn, even if accepted, if the same is not supported by
any consideration. It is not disputed that the option is without
consideration. It can therefore be withdrawn notwithstanding the
acceptance of it by appellee.
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.
We are not oblivious of the existence of American authorities
which hold that an offer, once accepted, cannot be withdrawn,
regardless of whether it is supported or not by a consideration (12
Am. Jur. 528). These authorities, we note, uphold the general
rule applicable to offer and acceptance as contained in our new
Civil Code. But we are prevented from applying them in view of the
specific provision embodied in article 1479. While under the "offer
of option" in question appellant has assumed a clear obligation to
sell its barge to appellee and the option has been exercised in
accordance with its terms, and there appears to be no valid or
justifiable reason for appellant to withdraw its offer, this Court
cannot adopt a different attitude because the law on the matter is
clear. Our imperative duty is to apply it unless modified by
Congress.
However, this Court itself, in the case of Atkins, Kroll and Co., Inc.
v. Cua Hian Tek,8 decided later that Southwestern Sugar &
Molasses Co. v. Atlantic Gulf & Pacific Co.,9 saw no distinction
between Articles 1324 and 1479 of the Civil Code and applied the
former where a unilateral promise to sell similar to the one sued
upon here was involved, treating such promise as an option which,
although not binding as a contract in itself for lack of a separate
consideration, nevertheless generated a bilateral contract of
purchase and sale upon acceptance. Speaking through Associate
Justice, later Chief Justice, Cesar Bengzon, this Court said:
Furthermore, 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.
Lastly, even supposing that Exh. A granted an option which is not
binding for lack of consideration, the authorities hold that:
"If the option is given without a consideration, it is a mere offer of a
contract of sale, which is not binding until accepted. If, however,
acceptance is made before a withdrawal, it constitutes a binding
contract of sale, even though the option was not supported by a
sufficient consideration. ... . (77 Corpus Juris Secundum, p. 652.
See also 27 Ruling Case Law 339 and cases cited.)
"It can be taken for granted, as contended by the defendant, that
the option contract was not valid for lack of consideration. But it
was, at least, an offer to sell, which was accepted by letter, and of
the acceptance the offerer had knowledge before said offer was
withdrawn. The concurrence of both acts — the offer and the
acceptance — could at all events have generated a contract, if
none there was before (arts. 1254 and 1262 of the Civil Code)."
(Zayco vs. Serra, 44 Phil. 331.)
In other words, since there may be no valid contract without a
cause or consideration, the promisor is not bound by his promise
and may, accordingly, withdraw it. 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 view has the advantage of avoiding a conflict between Articles
1324 — on the general principles on contracts — and 1479 — on
sales — of the Civil Code, in line with the cardinal rule of statutory
construction that, in construing different provisions of one and the
same law or code, such interpretation should be favored as will
reconcile or harmonize said provisions and avoid a conflict
between the same. Indeed, the presumption is that, in the process
of drafting the Code, its author has maintained a consistent
philosophy or position. Moreover, the decision in Southwestern
Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., 10 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.
Upon mature deliberation, the Court is of the considered opinion
that it should, as it hereby reiterates the doctrine laid down in
the Atkins, Kroll & Co. case, and that, insofar as inconsistent
therewith, the view adhered to in the Southwestern Sugar &
Molasses Co. case should be deemed abandoned or modified.
WHEREFORE, the decision appealed from is hereby affirmed, with
costs against defendant-appellant Severina Rigos. It is so ordered.
