EN BANC

[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-appellee.

SYLLABUS

1. CIVIL LAW; CONTRACTS; CONTRACT TO BUY AND SELL; OPTION

WITHOUT CONSIDERATION; CASE AT BAR. — Where both parties indicated in the
instrument in the caption, as an "Option to Purchase," and 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, it is not a
"contract to buy and sell." It merely granted plaintiff an "option" to buy.
2. ID.; ID.; ID.; ID.; ARTICLES 1354 AND 1479, NEW CIVIL CODE;
APPLICABILITY. — It should be noted that: 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."
3. ID.; ID.; REQUISITE OF A UNILATERAL PROMISE IN ORDER TO BIND
PROMISOR; BURDEN OF PROOF REST UPON PROMISEE. — In order that a 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.
4. ID.; ID.; WHERE A UNILATERAL PROMISE TO SELL GENERATED TO A
BILATERAL CONTRACT OF PURCHASE AND SALE; ARTICLES 1324 AND 1479, NCC., NO
DISTINCTION. — This Court itself, in the case of Atkins, Kroll & Co., Inc. vs. Cua Hian Tek
(102 Phil., 948), decided later than Southwestern Sugar & Molasses Co. vs. Atlantic &
Pacific Co., 97 Phil., 249, 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 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. In other words, since there may be no
valid contract without a cause or consideration 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.
5. REMEDIAL LAW; PLEADINGS AND PRACTICE; JUDGMENT ON THE
PLEADINGS; IMPLIED ADMISSION. — Defendant explicitly averred in her answer, and
pleaded as a special defense, the absence of said consideration for her promise to sell
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 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.
6. STATUTORY CONSTRUCTION; INTERPRETATION OF PROVISIONS OF
SAME LAW; CARDINAL RULE. — The view that an option to sell can still be withdrawn,
even if accepted, if the same is not supported by any consideration, has the advantage
of avoiding a con ict between Article 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 con ict 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. vs. Atlantic Gulf &
Paci c Co., supra, holding that Article 1324 is modi ed by Article 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 Article 1479 and Article 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.
ANTONIO, J., concurring opinion:
1. CIVIL LAW; CONTRACTS; OPTION TO SELL; EFFECT OF ACCEPTANCE. — I
fully agree with the abandonment of the view previously adhered to in Southwestern
Sugar & Molasses Co. vs. Atlantic Gulf and Paci c Co. (97 Phil., 249), which holds that
an option to sell can still be withdrawn, even if accepted if the same is not supported by
any consideration, and the rea rmance of the doctrine in Atkins, Kroll & Co. Inc. vs. Cua
Hian Tech (102 Phil., 948), holding that "an option implies . . . the legal obligation to
keep the offer (to sell) open for the time speci ed"; that it could be withdrawn before
acceptance, if there was no consideration for the option, but once the "offer to sell" is
accepted, a bilateral promise to sell and to buy ensues, and the offeree ipso facto
assumes the obligations of a purchaser.
2. ID.; ID.; ID.; OPTION WITHOUT CONSIDERATION IS A MERE OFFER TO
SELL, NOT BINDING UNTIL ACCEPTED. — If the option to sell is given without a
consideration, it is a mere offer to sell, which is not binding until accepted. If, however,
acceptance is made before a withdrawal, it constitutes a binding contract of sale. The
concurrence of both acts — the offer and the acceptance — could in such event
generate a contract.
3. ID.; ID.; ID.; WITHDRAWAL OF OFFER BEFORE ACCEPTANCE, OFFER
IMPLIES AN OBLIGATION ON THE PART OF OFFEROR. — While the law permits the
offeror to withdraw the offer at any time before acceptance even before the period has
expired, some writers hold the view, that the offeror can not exercise this right in an
arbitrary or capricious manner. This is upon the principle that an offer implies an
obligation on the part of the offeror to maintain it for such length of time as to permit
the offeree to decide whether to accept or not, and therefore cannot arbitrarily revoke
the offer without being liable for damages which the offeree may suffer. A contrary
view would remove the stability and security of business transactions.
4. ID.; ID.; ID.; A BILATERAL RECIPROCAL CONTRACT; CASE AT BAR. —
Where, as in the present case, the trial court found that the "Plaintiff (Nicolas Sanchez)
had offered the sum of P1,510.00 before any withdrawal from the contract has been
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 made by the Defendant (Severina Rigos)," and Rigos' offer to sell was accepted by
Sanchez, before she could withdraw her offer, a bilateral reciprocal contract — to sell
and to buy — was generated.

DECISION

CONCEPCION J :
CONCEPCION, p

Appeal from a decision of the Court of First Instance of Nueva Ecija to the Court
of Appeals, which certi ed 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, for 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 Certi cate 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 P1,510.00, 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 ling 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 the 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 rst
paragraph of said Article 1479. Although defendant had really "agreed, promised and
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 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 bean 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 speci cally, 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 hie 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 pleading. (La Yebana Company vs. Sevilla, 9 Phil. 210)."
(Emphasis supplied.).

This view was reiterated in Evangelista V. De la Rosa 4 and Mercy's Incorporated

v. Herminia Verde. 5
Squarely in point is Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Paci c
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:.
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 '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 of 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 at 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 a 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. Here it is not
disputed that the option is without consideration. It can therefore be withdrawn
notwithstanding the acceptance made 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 net 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 speci c
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 justi able 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." 7
However, this Court itself, in the case of Atkins, Kroll and Co., Inc. v. Cua Hian Tek,
8 decided later than Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Paci c 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
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 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 xed
whenever the offeree should decide to exercise his option within the speci ed
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 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 su cient
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 latter, 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 con ict 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 con ict 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 & paci c Co., 1 0 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,
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 insofar all inconsistent therewith, the view adhered to in the South western Sugar &
Molasses Co. case should be deemed abandoned or modified.
WHEREFORE, the decision appealed from is hereby a rmed, with costs against
defendant-appellant Severina Rigos. It is so ordered.
Reyes, J.B.L., Makalintal, Zaldivar, Fernando, Teehankee, Barredo and Makasiar,
JJ., concur.
Castro, J., did not take part.

Separate Opinions
ANTONIO , J., concurring:

I concur in the opinion of the Chief Justice.

I fully agree with the abandonment of the view previously adhered to in
Southwestern Sugar & Molasses Co. vs. Atlantic Gulf and Paci c Co. 1 which holds that
an option to sell can still be withdrawn, even if accepted, if the same is not supported
by any consideration, and the rea rmance of the doctrine in Atkins, Kroll & Co., Inc. vs.
Cua Hian Tek, 2 holding that "an option implies . . . the legal obligation to keep the offer
(to sell) open for the time speci ed;" that it could be withdrawn before acceptance, if
there was no consideration for the option, but once the "offer to sell" is accepted, a
bilateral promise to sell and to buy ensues, and the offeree ipso facto assumes the
obligations of a purchaser In other words, if the option is given without a consideration,
it is a mere offer to sell, which is not binding until accepted. If, however, acceptance is
made before a withdrawal, it constitutes a binding contract of sale. The concurrence of
both acts — the offer and the acceptance — could in such event generate a contract.
While the law permits the offeror to withdraw the offer at any time before
acceptance even before the period has expired, some writers hold the view, that the
offeror can not exercise this right in an arbitrary or capricious manner. This is upon the
principle that an offer implies an obligation on the part of the offeror to maintain it for
such length of time as to permit the offeree to decide whether to accept or not, and
therefore cannot arbitrarily revoke the offer without being liable for damages which the
offeree may suffer. A contrary view would remove the stability and security of business
transactions. 3
In the present case the trial court found that the "Plaintiff (Nicolas Sanchez) had
offered the sum of P1,510.00 before any withdrawal from the contract has been made
by the Defendant (Severina Rigos)." Since Rigos' offer to sell was accepted by Sanchez,
before she could withdraw her offer, a bilateral reciprocal contract — to sell and to buy
was generated.

Footnotes

1. "OPTION TO PURCHASE

"KNOW ALL MEN BY THESE PRESENTS:

"I, SEVERINA RIGOS, Filipino, of legal age, widow, with residence at San Jose, Nueva
Ecija, do by these presents —

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 WITNESSETH:

"That I am the owner of that property covered by Transfer Certificate of Title No. NT-
12528 of the Land Records of Nueva Ecija, my ownership thereof is evidenced by a Deed
of Absolute Sale in my favor known as Doc. No. 47; Page No. 12; Book No. 1; Series of
1961 of Notary Public, A. Tomas;

"That I have agreed, promised and committed and do hereby agree, promise and
commit to sell the property covered by the above numbered certificate of title to
NICOLAS SANCHEZ, Filipino, of legal age, married to Engracia Barrantes, with residence
at San Jose, Nueva Ecija, within a period of two (2) years from the execution of this
instrument for the amount of One Thousand Five Hundred Ten Pesos (P1,510.00)
Philippine Currency;

"That if within the period of two (2) years from the execution of this instrument said
Nicolas Sanchez shall fail to exercise his right to buy the property under this option, then
his right is deemed terminated and elapsed and that I shall no longer be compelled to
sell to him the property;

"That I, NICOLAS SANCHEZ, whose personal circumstances are mentioned above

hereby agree and conform with all the conditions set forth in this option to purchase
executed in my favor; that I bind myself with all the terms and conditions.

"IN WITNESS WHEREOF, the parties have hereunto affixed their signatures below this
3rd day of April, 1961, at San Jose, Nueva Ecija.

(Sgd.) NICOLAS SANCHEZ (Sgd.) SEVERINA RIGOS

Res. Cert. No. A-3914416 Res. Cert. No. A-2977240
Issued at San Jose, N.E. Issued at San Jose, N.E.
on April 3, 1961 April 1, 1961
SIGNED IN THE PRESENCE OF:
(Sgd.) F. R. Bautista (Sgd.) Hipolito Francisco"

2. As alleged in paragraph 5 of the Complaint.

3. 10 Phil. 386, 390.

4. 76 Phil. 115.

5. L-21571, September 29, 1956.

6. 97 Phil. 249, 251-252.

7. Emphasis ours.

8. 102 Phil. 948, 951-952.

9. Supra.
10. Supra.
ANTONIO, J., concurring:

1. 97 Phil., 249.

2. 102 Phil., 948.

3. I Gasperi 302, 6 Planiol & Ripert 180.

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