G.R. No. Nos. 113472-73December 20, 1994

ONG CHING PO, YU SIOK LIAN DAVID ONG and JIMMY ONG, Petitioners, vs. CA and SOLEDAD PARIAN, Respondents.

DOCTRINE: SECONDARY EVIDENCE is admissible when the original documents were actually lost or destroyed. But prior to the introduction of such secondary evidence, the proponent must establish the former existence of the document. The correct order of proof is as follows: existence; execution; loss; contents. This order may be changed if necessary in the discretion of the court

FACTS: QUIASON, J.: review on certiorari under Rule 45 July 23, 1947, Ong Joi Jong sold a parcel of land to private respondent Soledad Parian, the wife of Ong Yee. The latter, the brother of petitioner Ong Ching Po. The sale was evidenced by a notarized Deed of Sale written in English, and was registered with the Register of Deeds Manila. TCT was issued in the name of private respondent.

According to private respondent, she entrusted the administration of the lot and building to petitioner Ong Ching Po when she and her husband settled in Iloilo. When her husband died, she demanded that the lot be vacated because she was going to sell it. Petitioner refused to vacate the said premises.

Thus, she filed a case for unlawful detainer against petitioner before the MTC-Manila which dismissed her case.

RTC and CA affirmed the dismissal and became final and executory.

Petitioner, on the other hand, claimed that July 23, 1946, he bought the said parcel of land from Ong Joi Jong. The sale was evidenced by a photo copy of a Deed of Sale written in Chinese with the letter head "Sincere Trading Co." (Exh. "B"). An English translation of said document was (Exh. "C")

December 6, 1983, Ong Ching Po executed a Deed of Absolute Sale conveying to his children, petitioners Jimmy and David Ong, the same property sold by Ong Joi Jong to private respondent in 1947.

Subsequently, petitioners filed an action for reconveyance against private respondent in the RTC-Manila.

Private respondent, in turn, filed an action for quieting of title against petitioners, and upon her motion, the case was consolidated

RTC ruled in favor of private respondent. CA affirmed. Hence, this petition. It was contended that it was only resorted to as a subterfuge because the real buyer (Ong Ching Po) was an alien and it was agreed upon between Ong Ching Po and his brother (Ong Yee, Soledad Parian's husband) that the land be registered in the name of Soledad Parian in order to avoid legal complications and to facilitate registration and transfer and that the said title would be transferred by Soledad to Ong Ching Po or his successors-in-interest and that she would be holding the title in trust for himISSUE: Was the document a deed of conveyance in favor of Soledad? YES?HELD: SC cannot go along with the claim that petitioner Ong Ching Po merely used private respondent as a dummy to have the title over the parcel of land registered in her name because being an alien he was disqualified to own real property in the Philippines. To sustain such an outrageous contention would be giving a high premium to a violation of our nationalization laws.

Assuming that Exhibit "B" is in existence and that it was duly executed, still petitioners cannot claim ownership of the disputed lot by virtue of Constitutional prohibition (1935, 1973, 1987), save in cases of hereditary succession.

Petitioner Ong Ching Po was a Chinese citizen; therefore, he was disqualified from acquiring and owning real property. Assuming that the genuineness and due execution of Exhibit "B" has been established, the same is null and void, it being contrary to law.

On the other hand, the deed of sale executed by Ong Joi Jong in favor of private respondent (Exh. "A") is a notarized document.

Petitioners claim that private respondent admitted that she did not pay anything as consideration for the purported sale in her favor. That private respondent implied in her deposition that it was her husband who paid for the property. Therefore, that the sale was financed out of conjugal funds; such transaction is a common practice in Filipino-family affairs.

RE POSSESSION: Possession is transferred to the vendee by virtue of the notarized deed of conveyance. If what petitioners meant was that private respondent never lived in the building constructed on said land, it was because her family had settled in Iloilo.

RE TRUST: There is no document showing the establishment of an express trust by petitioner Ong Ching Po as trustor and private respondent as trustee. Not even Exhibit "B" can be considered as such a document because private respondent, the registered owner of the property subject of said "deed of sale," was not a party thereto. The oral testimony to prove the existence of the express trust will not suffice. NCC provides that "No express trust concerning an immovable or any interest therein may be proved by parole evidence."

RE IMPLIED TRUST: While an implied trust may be proved orally (Art. 1457), the evidence must be trustworthy and received by the courts with extreme caution, because such kind of evidence may be easily fabricated. It cannot be made to rest on vague and uncertain evidence or on loose, equivocal or indefinite declarations. The wife of petitioner Ong Ching Po, admitted in her testimony in court that Ong Yee was a stockholder of Lam Sing Corporation and was engaged in business, thus capable of such purchase.

RE EXHIBIT B & C: CA did not give any credence to Exhibit "B" and its translation, Exhibit "C", because these documents had not been properly authenticated.

SECONDARY EVIDENCE is admissible when the original documents were actually lost or destroyed. But prior to the introduction of such secondary evidence, the proponent must establish the former existence of the document. The correct ORDER OF PROOF is as follows: existence; execution; loss; contents. This order may be changed if necessary in the discretion of the court.

Petitioners failed to adduce evidence as to the genuineness and due execution of the deed of sale, Exhibit "B".

The DUE EXECUTION of the document may be established by the person or persons who executed it; by the person before whom its execution was acknowledged; or by any person who was present and saw it executed or who after its execution, saw it and recognized the signatures; or by a person to whom the parties to the instrument had previously confessed the execution thereof.

The trial court rejected Yu Siok Lians claim that she was present when said document was executed; why did she not sign said document, even merely as a witness? Her oral testimony is easy to concoct or fabricate. Furthermore, she was married only on September 6, 1946 to the plaintiff, Ong Ching Po.As to the contention of petitioners that all the tax receipts, tax declaration, rental receipts, deed of sale (Exh. "B") and transfer certificate of title were in their possession, private respondent explained that she and her husband entrusted said lot and building to petitioners when they moved to Iloilo. That all the tax receipts were in the name of private respondent and her husband. The rental receipts were also in the name of her husband.

WHEREFORE, the petition is DISMISSED.

G.R. No. 117384 October 21, 1998

HEIRS OF TEODORO DELA CRUZ represented by EDRONEL DELA CRUZ,petitioners,vs.COURT OF APPEALS, PACIFICO MARQUEZ, FILOMENO and GREGORIO, both surnamed MADRID, respondents.

ROMERO,J.:Petitioners filed an action for reconveyance with damages4against private respondents involving a parcel of land situated in Poblacion, San Mateo, Isabela averring therein that the subject land was bought by their predecessor-in-interest from the private respondents, Madrid brothers, for P4,000.00 in a deed of sale executed on May 18, 1959, and since then they have been in actual, physical, continuous and open possession of the property. However, sometime in October 1986, much to their dismay and surprise, private respondents managed to obtain a Torrens Title over the said land.The Madrids denied having executed the said deed of sale and assuming that said document exists, the same is fictitious and falsified. Moreover, while they admit petitioners' possession of the land, they assert that this possession is in defiance of their repeated demands that the former relinquish the same.

Meanwhile, Pacifico Marquez contends that he is an innocent purchaser for value of the property having bought the same from the Madrid brothers in 1976.5Petitioners were unable to present the original deed of sale since it was lost. Consequently, they were constrained to offer, as Exhibit "A," a photo copy of the purported original carbon copy of the deed of sale in an effort to prove the transaction.

The trial court ruled that Exhibit "A" was inadmissible in evidence pronouncing that No proof was adduced that this remaining copy was lost or destroyed. Furthermore, no attempt was done to produce the copies retained by the notary public although there is a possibility that the same still exist (sic). Neither was there any proof that the copy sent to the court as required by the notarial law is unavailable. Under these (sic) state of facts, the Court believes that the "xerox copy of a certified true copy" of the original issued by the notary public cannot be admitted in evidence to prove the conveyance of the land in question

Accordingly, the trial court dismissed petitioners' complaint.

Petitioners appealed to the Court of Appeals where the said court rendered its judgment which ruled that Exhibit "A" was admissible in evidence for failure of the private respondents to object when it was offered during the trial. Unfortunately, petitioners' victory was shortlived. For the Court of Appeals, while ruling that Exhibit "A" was admissible, concluded that the sine had no probative value to support the allegation of the petitioners that the disputed land was sold to them in 1959,Hence, the Court of Appeals affirmed the trial court's decision Failing in their bid to reconsider the decision, the petitioners have filed the present petition.Petitioners maintain that even if Exhibit "A" were a mere photo copy of the original carbon copy, they had presented other substantial evidence during the trial to prove the existence of the sale.6First, the testimony of the notary public, Atty. Tabangay, who acknowledged the due execution of the deed of sale.Second, their long possession of the land in question, bolstered by the construction of various improvements gives rise to the disputable presumption of ownership.

Issue/ruling:

While we concur with the Court of Appeals' finding that Exhibit "A" does not prove that the sale of the land indeed occurred, still we are constrained to reverse its decision in view of the circumstances present in this case.To begin with, Atty. Sevillano Tabangay, the notary public who notarized the deed of sale, testified that the document has about five (5) copies.7Hence, it is imperative that all the originals must be accounted for before secondary evidence can be presented. These petitioners failed to do. Moreover, records show that none of these five copies was even presented during the trial. Petitioners' explanation that these copies were lost or could not be found in the National Archives was not even supported by any certification from the said office.

It is a well-settled principle that before secondary evidence can be presented, all duplicates and/or counterparts must be accounted for, and no excuse for the non-production of the original document itself can be regarded as established until all its parts are unavailable.When Exhibit "A" was presented private respondents failed, not only to object, but even to cross-examine the notary public, Atty. Tabangay, regarding its execution. Forthwith, upon private respondents' failure to object to Exhibit "A" when it was presented, the same becomes primary evidence. To be sure, even if Exhibit "A" is admitted in evidence, we agree with the Court of Appeals that its probative value must still meet the various tests by which its reliability is to be determined. Its tendency to convince and persuade must be considered for admissibility of evidence should not be confused with its probative value.12A cursory glance will immediately reveal that it was unsigned by any of the parties and undated as to when it was executed. Worse, when Atty. Tabangay typed Exhibit "A," the contents were based on an alleged carbon original which petitioners' predecessor-in-interest presented to him, without bothering to check his own files to verify the correctness of the contents of the document he was copying. In other words, Atty. Tabangay's failure to determine the accuracy of the carbon copy requested by the petitioners' predecessor-in-interest renders Exhibit "A" unreliable.

However, despite our prescinding discussion, all is not lost for the petitioner.

The records show that the disputed petitioners since 1959. They have since been introducing several improvements on the land which certainly could not have escaped the attention of the Madrids. Furthermore, during all this time, the land was enclosed, thus signifying petitioners' exclusive claim of ownership. The construction of various infrastructure on the land rice mill, storage house, garage, pavements and other buildings was undoubtedly a clear exercise of ownership which the Madrids could not ignore. Oddly, not one of them protested.

We cannot accept the Madrids' explanation that they did not demand the petitioners to vacate the land due to the unexplained killings within the area.Their failure to raise a restraining arm or a shout of dissent to the petitioners' possession of the subject land in a span of almost thirty (30) years is simply contrary to their of ownership.

Even if we were to rule that the Certificates of Title to the private respondents would ripen into ownership of the land, and therefore, the defense of prescription would be unavailing, still, the petitioners would have acquired title to it by virtue of the equitable principle of laches. The Madrids' long inaction or passivity in asserting their rights over disputed property will preclude them from recovering the same.18Lastly, Marquez' claim that he is a purchaser in good faith and for value does not inspire any merit. In his testimony, he admitted that he knew the land in question.21Curiously, in his Answer22to the complaint filed by the petitioners, he stated that he has been aware that the former were in possession of the land since 1959. Where a purchaser was fully aware of another person's possession of the lot he purchased, he cannot successfully pretend later to be an innocent purchaser for value.23Moreover, one who buys without checking the vendor's title takes all the risks and losses consequent to such failure.24

G.R. No. L-40242December 15, 1982

DOMINGA CONDE,petitioner,vs.THE HONORABLE COURT OF APPEALS, MANILA PACIENTE CORDERO, together with his wife, NICETAS ALTERA, RAMON CONDE, together with his wife, CATALINA T. CONDE,respondents.FACTS:

On April 1938, Margarita, Bernardo and Dominga Conde, as heirs of Santiago Conde, sold with right of repurchase within 10 years from said date, a parcel of agricultural land located in Leyte to the Alteras for P165. The Original Certificate of Title was adjudicated in favor of the Alteras with right of redemption by the petitioner.

In 1945, the Alteras was about to repurchase the lot. However, during that time, the pacto de retro document was lost. For this reason, the Alteras executed a Memorandum stating that Pio Altera already intended to repurchase the lot. However, neither of the vendees-a-retro, Pio Altera nor Casimira Pasagui, was a signatory to the deed. Petitioner maintains that because Pio Altera was very ill at the time, Paciente Cordero executed the deed of resale for and on behalf of his father-in-law. Petitioner further states that she redeemed the property with her own money as her co-heirs were bereft of funds for the purpose.

Thepacto de retrodocument was eventually found.Later on, in June 1965 Pio Altera sold the disputed lot to the spouses Ramon Conde and Catalina T. Conde, who are also private respondents herein.Petitioner then filed in the Court of First Instance of Leyte against Paciente Cordero and his wife Nicetas Altera, Ramon Conde and his wife Catalina T. Conde, and Casimira Pasagui Pio Altera for quieting of title to real property and declaration of ownership.

The lower court ordered petitioner to vacate the property. On appeal, the Court of Appeals upheld the findings of the court a quo that petitioner had failed to validly exercise her right of repurchase in view of the fact that the Memorandum of Repurchase was signed by Paciente Cordero and not by Pio Altera, the vendee-a-retro, and that there is nothing in said document to show that Cordero was specifically authorized to act for and on behalf of the vendee a retro, Pio Altera. Hence, this case.

ISSUE: W/N the sale was valid.

HELD:

Of significance, however, is the fact that from the execution of the repurchase document in 1945, possession, which heretofore had been with the Alteras, has been in the hands of petitioner as stipulated therein. Land taxes have also been paid for by petitioner yearly from 1947 to 1969 inclusive (Exhibits "D" to "D-15"; and "E"). If, as opined by both the Courta quoand the Appellate Court, petitioner had done nothing to formalize her repurchase, by the same token, neither have the vendees-a-retro done anything to clear their title of the encumbrance therein regarding petitioner's right to repurchase. No new agreement was entered into by the parties as stipulated in the deed ofpacto de retro, if the vendorsa retrofailed to exercise their right of redemption after ten years. If, as alleged, petitioner exerted no effort to procure the signature of Pio Altera after he had recovered from his illness, neither did the Alteras repudiate the deed that their son-in-law had signed. Thus, an implied agency must be held to have been created from their silence or lack of action, or their failure to repudiate the agency.

Spouses Conde to whom Pio Altera sold the disputed property in 1965, cannot be said to be purchasers in good faith. OCT No. 534 in the name of the Alteras specifically contained the condition that it was subject to the right of repurchase within 10 years from 1938. Although the ten-year period had lapsed in 1965 and there was no annotation of any repurchase by petitioner, neither had the title been cleared of that encumbrance. The purchasers were put on notice that some other person could have a right to or interest in the property. It behooved Ramon Conde and Catalina Conde to have looked into the right of redemption inscribed on the title, and particularly the matter of possession, which, as also admitted by them at the pre-trial, had been with petitioner since 1945.

Private respondent must be held bound by the clear terms of the Memorandum of Repurchase that he had signed wherein he acknowledged the receipt of P165.00 and assumed the obligation to maintain the repurchasers in peaceful possession should they be "disturbed by other persons". It was executed in the Visayan dialect which he understood. He cannot now be allowed to dispute the same. "... If the contract is plain and unequivocal in its terms he is ordinarily bound thereby. It is the duty of every contracting party to learn and know its contents before he signs and delivers it."4There is nothing in the document of repurchase to show that Paciente Cordero had signed the same merely to indicate that he had no objection to petitioner's right of repurchase. Besides, he would have had no personality to object. To uphold his oral testimony on that point, would be a departure from the parol evidence rule5and would defeat the purpose for which the doctrine is intended.

... The purpose of the rule is to give stability to written agreements, and to remove the temptation and possibility of perjury, which would be afforded if parol evidence was admissible.6In sum, although the contending parties were legally wanting in their respective actuations, the repurchase by petitioner is supported by the admissions at the pre-trial that petitioner has been in possession since the year 1945, the date of the deed of repurchase, and has been paying land taxes thereon since then. The imperatives of substantial justice, and the equitable principle of laches brought about by private respondents' inaction and neglect for 24 years, loom in petitioner's favor.

G.R. No. L-39972 & L-40300 August 6, 1986

VICTORIA LECHUGAS,petitioner,vs.HON. COURT OF APPEALS, MARINA LOZA, SALVADOR LOZA, ISIDRO LOZA, CARMELITA LOZA, DAVID LOZA, AMPARO LOZA, ERLINDA LOZA and ALEJANDRA LOZA,respondents.

FACTS:

Original case was for forcible entry with damages AND recovery and possession of the same property against the private respondents filed by petitioner Lechugas.

Petitioner contends that she purchased land in question from one Leoncia Lansague and that respondents herein, by means of force, intimidation, strategy and stealth, unlawfully entered the said lots. However, during trial, Leoncia Lasangue, (petitioners vendor), testifying for defendants, declared that land in controversy was not part of the portion of land she actually sold to petitioner. She added further that during the lifetime of his father, other sales were made to other persons, including respondents in the case. That the said portion of land in question was actually sold to respondents (by her father); that she only sold six hectares of her inherited property to Victoria Lechugas under a public instrument which was prepared at the instance of Victoria Lechugas and thumb-marked by herself (the vendor) Please note that vendor here is illiterate). CA affirmed ruling of trial court in favor of respondents.

Petitioner, invokes the parol evidence rule as it imputes grave abuse of discretion on the part of the appellate court for admitting and giving credence to the testimony of the vendor regarding the sale of the disputed lot. The testimony is contrary to the contents of the deed of sale executed by the vendor in favor of the petitioner.

ISSUE: W/N parole evidence rule is applicable in this case.

HELD: NO! The parol evidence rule does not apply, and may not properly be invoked by either party to the litigation against the other, where at least one of the parties to the suit is not party or a privy of a party to the written instrument in question and does not base a claim on the instrument or assert a right originating in the instrument or the relation established thereby.

The petitioner's reliance on the parol evidence rule is misplaced. The rule is not applicable where the controversy is between one of the parties to the document and third persons. The deed of sale was executed by Leoncia Lasangue in favor of Victoria Lechugas. The dispute over what was actually sold is between petitioner and the private respondents. In the case at bar, through the testimony of Leoncia Lasangue, it was shown that what she really intended to sell and to be the subject of Exhibit A was Lot No. 5522 but not being able to read and write and fully relying on the good faith of her first cousin, the petitioner, she just placed her thumbmark on a piece of paper which petitioner told her was the document evidencing the sale of land. The deed of sale described the disputed lot instead.

There can be no other conclusion but that Lasangue did not intend to sell as she could not have sold, a piece of land already sold by her father to the predecessor-in-interest of the respondents.G.R. No. 96405 June 26, 1996

BALDOMERO INCIONG, JR.,petitioner,vs.COURT OF APPEALS and PHILIPPINE BANK OF COMMUNICATIONS,respondents.

ROMERO, J.:

Petitioner's liability resulted from the promissory note in the amount of P50,000.00 which he signed with Rene C. Naybe and Gregorio D. Pantanosas on February 3, 1983, holding themselves jointly and severally liable to private respondent Philippine Bank of Communications, Cagayan de Oro City branch. The promissory note was due on May 5, 1983.Petitioner alleged that sometime in January 1983, he was approached by his friend, Rudy Campos, who told him that he was a partner of Pio Tio, the branch manager of private respondent in Cagayan de Oro City, in the falcata logs operation business. Campos also intimated to him that Rene C. Naybe was interested in the business and would contribute a chainsaw to the venture. He added that, although Naybe had no money to buy the equipment, Pio Tio had assured Naybe of the approval of a loan he would make with private respondent. Campos then persuaded petitioner to act as a "co-maker" in the said loan. Petitioner allegedly acceded but with the understanding that he would only be a co-maker for the loan of P50,000.00.

Petitioner alleged further that five (5) copies of a blank promissory note were brought to him by Campos at his office. He affixed his signature thereto but in one copy, he indicated that he bound himself only for the amount of P5,000.00. Thus, it was by trickery, fraud and misrepresentation that he was made liable for the amount of P50,000.00.In the aforementioned decision of the lower court, it noted that the typewritten figure "P50,000-" clearly appears directly below the admitted signature of the petitioner in the promissory note. 3 Hence, the latter's uncorroborated testimony on his limited liability cannot prevail over the presumed regularity and fairness of the transaction, under Sec. 5 (q) of Rule 131. The lower court added that it was "rather odd" for petitioner to have indicated in a copy and not in the original, of the promissory note, his supposed obligation in the amount of P5,000.00 only. Finally, the lower court held that even granting that said limited amount had actually been agreed upon, the same would have been merely collateral between him and Naybe and, therefore, not binding upon the private respondent as creditor-bank.The lower court also noted that petitioner was a holder of a Bachelor of Laws degree and a labor consultant who was supposed to take due care of his concerns, and that, on the witness stand, Pio Tio denied having participated in the alleged business venture although he knew for a fact that the falcata logs operation was encouraged by the bank for its export potential.

CA denied and ordered the entry of judgment in this case.

Nonetheless, we find the petition unmeritorious.

Annexed to the petition is a copy of an affidavit executed on May 3, 1988, or after the rendition of the decision of the lower court, by Gregorio Pantanosas, Jr., an MTCC judge and petitioner's co-maker in the promissory note. It supports petitioner's allegation that they were induced to sign the promissory note on the belief that it was only for P5,000.00, adding that it was Campos who caused the amount of the loan to be increased to P50,000.00.

Nor is there merit in petitioner's assertion that since the promissory note "is not a public deed with the formalities prescribed by law but . . . a mere commercial paper which does not bear the signature of . . . attesting witnesses," parol evidence may "overcome" the contents of the promissory note.9The first paragraph of the parol evidence rule10states:

When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.

Clearly, the rule does not specify that the written agreement be a public document.

What is required is that agreement be in writing as the rule is in fact founded on "long experience that written evidence is so much more certain and accurate than that which rests in fleeting memory only, that it would be unsafe, when parties have expressed the terms of their contract in writing, to admit weaker evidence to control and vary the stronger and to show that the parties intended a different contract from that expressed in the writing signed by them." 11 Thus, for the parol evidence rule to apply, a written contract need not be in any particular form, or be signed by both parties. As a general rule, bills, notes and other instruments of a similar nature are not subject to be varied or contradicted by parol or extrinsic evidence.

WHEREFORE, the instant petition for review on certiorari is hereby DENIED and the questioned decision of the Court of Appeals is AFFIRMED. Costs against petitioner.G.R. No.174719HEIRS OF PACRES vs. HEIRS OF YGONIA

While contracts are generally obligatory in whatever form they may have been entered into, it remains imperative for a party that seeks the performance thereof to prove the existence and the terms of the contract by a preponderance of evidence.Bare assertions are not the quantum of proof contemplated by law.Factual AntecedentsLot No. 9 is a 1,007 square meter parcel of land located at Kinasang-an, Pardo,CebuCityand fronting theCebuprovincial highway.The lot originally belonged to Pastor Pacres (Pastor) who left it intestate to his heirs[6]Margarita, Simplicia, Rodrigo, Francisco, Mario (petitioners predecessor-in-interest) and Vearanda (herein petitioner).Petitioners admitted that at the time of Pastors death in 1962, his heirs were already occupying definite portions of Lot No. 9.The front portion along the provincial highway was occupied by the co-owned Pacres ancestral home,[7]and beside it stood Rodrigos hut (also fronting the provincial highway).Marios house stood at the back of the ancestral house.[8]This is how the property stood in 1968, as confirmed by petitioner Valentinas testimony.On the same year, the heirs leased[9]the ground floor of the [ancestral home] together with a lot area of 300 square meters including the area occupied by the house to respondent Hilario Ramirez (Ramirez), who immediately took possession thereof.Subsequently in 1974, four of the Pacres siblings[10](namely, Rodrigo, Francisco, Simplicia and Margarita) sold their shares in the ancestral home and the lot on which it stood to Ramirez.The deeds of sale described the subjects thereof as part and portion of the 300 square metersactually in possession and enjoymentby vendee and her spouse, Hilario Ramirez, by virtue of a contract of lease in their favor.[11]The Deed of Sale of Right in a House executed by Rodrigo and Francisco was more detailed, to wit:x x x do hereby sell, cede, transfer and convey, forever and in absolute manner, our shares interests and participation in a house of mixed materials under roof of nipa which is constructed inside Lot No. 5506[12]of the Cadastral Survey of Cebu, the lot on which the house is constructed has already been sold to and bought by the herein vendee from our brothers and sisters; that this sale pertains only to our rights and interests and participation in the house which we inherited from our late father Pastor Pacres.[13]With the sale, respondent Ramirezs possession as lessee turned into a co-ownership with petitioners Mario and Vearanda, who did not sell their shares in the house and lot.On various dates in 1971, Rodrigo,]Francisco,[15]and Simplicia sold their remaining shares in Lot No. 9 to respondent Cecilia Ygoa (Ygoa).In 1983, Margarita also sold her share to Ygoa.The total area sold to Ygoa was 493 square meters.In 1984, Ygoa filed a petition to survey and segregate[18]the portions she bought from Lot No. 9.Mario objected on the ground that he wanted to exercise his right as co-owner to redeem his siblings shares.Vendee Rodrigo also opposed on the ground that he wanted to annul the sale for failure of consideration.On the other hand, Margarita and the widow of Francisco both manifested their assent to Ygoas petition.By virtue of such manifestation, the court issued a writ of possession[19]respecting Margaritas and Franciscos shares in favor of Ygoa.It is by authority of this writ that Ygoa built her house on a portion of Lot No. 9.Considering, however, the objections of the two other Pacres siblings, the trial court subsequently dismissed the petition so that the two issues could be threshed out in the proper proceeding.Mario filed the intended action while Rodrigo no longer pursued his objection.The complaint for legal redemption,[20]filed by Mario and Vearanda, was dismissed on the ground of improper exercise of the right.The decision was affirmed by the appellate court[21]and attained finality in the Supreme Court[22]onDecember 28, 1992.The CA held that the complaint was filed beyond the 30-day period provided in Article 1623 of the New Civil Code and failed to comply with the requirement of consignation.It was further held that Ygoa built her house on Lot No. 9 in good faith and it would be unjust to require her to remove her house thereon.OnJune 18, 1993, the Republic of thePhilippines, through the Department of Public Works and Highways (DPWH), expropriated the front portion of Lot No. 9 for the expansion of theCebusouth road.The petition for expropriation was filed in Branch 9 of theRTC ofCebuCityand docketed as Civil Case No. CEB-14150.[23]As occupant of the expropriated portion, Ygoa moved to withdraw her corresponding share in the expropriation payment. Petitioners opposed the said motion.[24]The parties did not supply the Court with the pleadings in the expropriation case; hence, we are unaware of the parties involved and the issues presented therein.However, from all indications, the said motion of Ygoa remains unresolved.OnJuly 20, 1993, the Pacres siblings (Margarita and Francisco were already deceased at that time and were only represented by their heirs) executed a Confirmation of Oral Partition/Settlement of Estate[25]of Pastor Pacres.The relevant statements in the affidavit read:1.That our father the late Pastor Pacres died instestate at Kinasang-an, Pardo,CebuCity on January 2, 1962;2.That he left some real properties, one of which is a parcel of land (Lot No. 9, PCS 07-01-000006, Cebu Cad., located at Kinasang-an, Pardo, Cebu City);3.That after the death of Pastor Pacres, the above-named children declared themselves extra-judicially as heirs of Pastor Pacres and they likewise adjudicated unto themselves the above described lot and forthwith MADE AN ORAL PARTITION;4.That in that ORAL PARTITION, the shares or portion to be allotted to Mario Pacres and Vearanda Pacres Vda. de Ababa shall be fronting the national highway, while the shares of the rest shall be located at the rear;5.That recently, the said heirs had the said lot surveyed to determine specifically their respective locations in accordance with the oral partition made after the death of Pastor Pacres;6.That a sketch of the subdivision plan is hereto attached, duly labeled, indicating the respective locations of the shares of each and every heir.OnSeptember 30, 1994, Mario, petitioners predecessor-in-interest, filed an ejectment suit against Ramirez successor-in-interest Vicentuan.Mario claimed sole ownership of the lot occupied by Ramirez/Vicentuan by virtue of the oral partition.He argued that Ramirez/Vicentuan should pay rentals to him for occupying the front lot and should transfer to the rear of Lot No. 9 where the lots of Ramirezs vendors are located.The court dismissed Marios assertion that his siblings sold the rear lots to Ramirez.It held that the deeds of sale in favor of Ramirez clearly described the object of the sale as the ancestral house and lot.[26]Thus, Ramirez has a right to continue occupying the property he bought.The court further held that since Mario did not sell hispro-indivisoshares in the house and lot, at the very least, the parties are co-owners thereof. Co-owners are entitled to occupy the co-owned property.[27]The Complaint for Specific PerformanceOnJune 3, 1996, Vearanda and the heirs of Mario filed the instant complaint for specific performance[28]against Ygoa and Ramirez.Contrary to Marios allegations of co-ownership over Lot No. 9 in the legal redemption case, Marios heirs insist in the action for specific performance that the heirs agreed on a partition prior to the sale.They seek compliance with such agreement from their siblings vendees, Ygoa and Ramirez, on the basis that the two were privy to these agreements, hence bound to comply therewith.In compliance with such partition, Ygoa and Ramirez should desist from claiming any portion of the expropriation payment for the front lots.Their other cause of action is directed solely at Ygoa, whom they insist agreed to additional, albeit unwritten, obligations other than the payment of the purchase price of the shares in Lot No. 9.Vearanda and Marios heirs insist that Ygoa contracted with her vendors to assume all obligations regarding the payment of past and present estate taxes, survey Lot No. 9 in accordance with the oral partition, and obtain separate titles for each portion.While these obligations were not written into the deeds of sale, petitioners insist it is not subject to the Statute of Frauds since these obligations were allegedly partly complied with by Ygoa.They cite as evidence of Ygoas compliance the survey of her purchased lots and payment of realty taxes.Respondents denied privity with the heirs oral partition. They further maintained that no such partition took place and that the portions sold to and occupied by them were located in front of Lot No. 9; hence they are the ones entitled to the expropriation payment.[29]They sought damages from the unfounded suit leveled against them. To discredit petitioners assertion of an oral partition, respondents presented Exhibit No. 1, which petitioner Valentina herself executed during her testimony. Exhibit No. 1 demonstrated Valentinas recollection of the actual occupation of the Pacres siblings, their heirs and vendees.The sketch undermined petitioners allegation that the heirs partitioned the propertyandimmediatelytook possessionof their allotted lots/shares.Ygoa also denied ever agreeing to the additional obligations being imputed against her.Ruling of the Regional Trial CourtThe trial court ruled in favor of respondents.[30]It held that petitioners failed to prove partition of the lot in accordance with petitioners version.Instead, the trial court held that the parties actual occupation of their portions in Lot No. 9, as evidenced by petitioner Valentinas sketch, is the real agreement to which the parties are bound.Apparently unsatisfied with the parties state of affairs, the trial court further ordered that a survey of the lot according to the parties actual occupation thereof be conducted.Petitioners motion for reconsideration was denied.[31]Unsatisfied with the adverse decision, petitioners appealed to the CA questioning the factual findings of the trial court and its reliance on Exhibit 1.They maintained that Valentina was incompetent and barely literate; hence, her sketch should not be given weight.Ruling of the Court of AppealsThe appellate court sustained the ruling of the trial court insofar as it dismissed petitioners complaint for lack of evidence.It held that the oral partition was not valid because the heirs did not ratify it by taking possession of their shares in accordance with their oral agreement.Moreover, the CA ruled that Ygoas sole undertaking under the deeds of sale was the payment of the purchase price.Since petitioners did not question the validity of the deeds and did not assail its terms as failing to express the true intent of the parties, the written document stands superior over the allegations of an oral agreement.It, however, reversed the trial court on the latters order to survey the lot in accordance with Valentinas sketch.The appellate court explained that while it was conclusive that Ygoa and Ramirez bought portions of the property from some of the Pacres siblings, the issue of the actual area and location of the portions sold to them remains unresolved.The CA narrated all the unresolved matters that prevented a finding that definitively settles the partition of Lot No. 9.The CA emphasized that the question regarding ownership of the front lots and the expropriation payment should be threshed out in the proper proceeding.The CA likewise found no basis for the award of damages to either party. Petitioners Motion for Reconsideration was denied,hence this petition.IssuesPetitioners formulated the following issues:[34]1.Whether or not this complaint for specific performance, damages and attorneys fee [sic] with a prayer for the issuance of a restraining order and later on issuance of a writ of permanent injunction is tenable.2.Whether or not the area purchased and owned by respondents in Lot No. 9 is located along or fronting the national highway.3.Whether or not the lower court committed grave abuse of discretion by rendering a decision not in accord with laws and applicable decisions of the Supreme Court, resulting to the unrest of this case.4.Whether or not it is lawful for the respondents to claim ownership of theP220,000.00 which the government set aside for the payment of the expropriated area in Lot No. 9, fronting the highway, covered by the road widening.Consolidated and simplified, the issues to be resolved are:IWhether petitioners were able to prove the existence of the alleged oral agreements such as the partition and the additional obligations of surveying and titlingIIWhether the issue of ownership regarding the front portion of Lot No. 9 and entitlement to the expropriation payment may be resolved in this actionOur RulingWhether petitioners were able to prove the existence of the alleged oral agreements such as the partition and the additional obligations of surveying and titlingBoth the trial and appellate courts dismissed petitioners complaint on the ground that they had failed to prove the existence of an oral partition.Petitioners now insist that the two courts overlookedfacts and circumstancesthat are allegedly of much weight and will alter the decision if properly considered.[35]Petitioners would have the Court review the evidence presented by the parties, despite the CAs finding that the trial court committed no error in appreciating the evidence presented during the trial.This goes against the rule that this Court is not a trier of facts.Such questions as whether certain items of evidence should be accorded probative value or weight, or rejected as feeble or spurious, or whether or not the proofs on one side or the other are clear and convincing and adequate to establish a proposition in issue, are without doubt questions of fact.[36]Questions like these are not reviewable by this Court which, as a rule, confines its review of cases decided by the CA only to questions of law,which may be resolved without having to re-examine the probative value of the evidence presented.[37]We find no compelling reason to deviate from the foregoing rule and disturb the trial and appellate courts factual finding that the existence of an oral partition was not proven.Our examination of the records indicates that, contrary to petitioners contention, the lower courts conclusion was justified.Petitioners only piece of evidence to prove the alleged oral partition was the joint affidavit (entitled Confirmation of Oral Partition/Settlement of Estate)supposedly executed by some of the Pacres siblings and their heirs in 1993, to the effect that such an oral partition had previously been agreed upon.Petitioners did not adequately explain why the affidavit was executed only in 1993, several years after respondents Ygoa and Ramirez took possession of the front portions of Lot No. 9.[38]If there had been an oral partition allotting the front portions to petitioners since Pastors death in 1962, they should have immediately objected to respondents occupation.Instead, they only asserted their ownership over the front lots beginning in 1993 (with the execution of their joint affidavit) when expropriation became imminent and was later filed in court.Petitioners assertion of partition of Lot No. 9 is further belied by their predecessor-in-interests previous assertion of co-ownership over the same lot in the legal redemption case filed 10 years before.[39]The allegations therein, sworn to as truth by Mario and Vearanda, described Lot No. 9 as a parcel of land that isco-ownedby the Pacres siblingspro indiviso.It was further alleged that Ygoa bought theundividedshares of Rodrigo, Francisco, Margarita, and Simplicia.The statements in the legal redemption case are extrajudicial admissions,[40]which were not disputed by petitioners.These admissions may be given in evidence against them.[41]At the very least, the polarity of their previous admissions and their present theory makes the latter highly suspect.Moreover, petitioners failed to show that the Pacres siblings took possession of their allotted shares after they had supposedly agreed on the oral partition.Actual possession and exercise of dominion over definite portions of the property in accordance with the alleged partition would have been strong proof of an oral partition.[42]In this case, however, petitioners failed to present any evidence that the petitioners took actual possession of their respective allotted shares according to the supposed partition.In fact, the evidence of the parties point to the contrary.Petitioner Valentina herself drew a sketch[43]showing the location of theactualoccupants of Lot No. 9, but the actual occupation shown in her sketch is not in accordance with the terms of the alleged oral partition.[44]According to the terms of the alleged oral partition, the front portions of Lot No. 9 were supposed to have been occupied by petitioners, but Valentinas sketch indicates that the actual occupants of the said portions are respondents.In fine, we rule that the records contain ample support for the trial and appellate courts factual findings that petitioners failed to prove their allegation of oral partition.While petitioners claim that the trial and appellate courts did not appreciate their evidence regarding the existence of the alleged oral partition, the reality is that their evidence is utterly unconvincing.With respect to the alleged additional obligations which petitioners seek to be enforced against respondent Ygoa, we likewise find that the trial and appellate courts did not err in rejecting them.Petitioners allege that when Ygoa bought portions of Lot No. 9 from petitioners four siblings, aside from paying the purchase price, she also bound herself to survey Lot No. 9 including the shares of the petitioners (the non-selling siblings); to deliver to petitioners, free of cost, the titles corresponding to their definite shares in Lot No. 9; and to pay for all their past and present estate and realty taxes.[45]According to petitioners, Ygoa agreed to these undertakings as additional consideration for the sale, even though they were not written in the Deeds of Sale.Like the trial and appellate courts, we find that these assertions by petitioners have not been sufficiently established.In the first place, under Article 1311 of the Civil Code, contracts take effect only between the parties, their assigns and heirs (subject to exceptions not applicable here).Thus, only a party to the contract can maintain an action to enforce the obligations arising under said contract.[46]Consequently, petitioners, not being parties to the contracts of sale between Ygoa and the petitioners siblings, cannot sue for the enforcement of the supposed obligations arising from said contracts.It is true that third parties may seek enforcement of a contract under the second paragraph of Article 1311, which provides that if a contract should contain some stipulation in favor of a third person, he may demand its fulfillment.This refers to stipulationspour autrui, or stipulations for the benefit of third parties.However, the written contracts of sale in this case contain no such stipulation in favor of the petitioners.While petitioners claim that there was anoralstipulation, it cannot be proven under the Parol Evidence Rule.Under this Rule, [w]hen the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.[47]While the Rule admits of exception, no such exception was pleaded, much less proved, by petitioners.The Parol Evidence Rule applies to the parties and their successors in interest.Conversely, it has no application to a stranger to a contract.For purposes of the Parol Evidence Rule, a person who claims to be the beneficiary of an alleged stipulationpour autruiin a contract (such as petitioners) may be considered a party to that contract.It has been held that a third party who avails himself of a stipulationpour autruiunder a contract becomes a party to that contract.[48]This is why under Article 1311, a beneficiary of a stipulationpour autruiis required to communicate his acceptance to the obligor before its revocation.Moreover, to preclude the application of Parol Evidence Rule, it must be shown thatat least one of the parties to the suit is not party or a privy of a party to the written instrument in questionand does not base a claim on the instrument or assert a right originating in the instrument or the relation established thereby.[49]A beneficiary of a stipulationpour autruiobviously bases his claim on the contract.He therefore cannot claim to be a stranger to the contract and resist the application of the Parol Evidence Rule.Thus, even assuming that the alleged oral undertakings invoked by petitioners may be deemed stipulationspour autrui, still petitioners claim cannot prosper, because they are barred from proving them by oral evidence under the Parol Evidence Rule.Whether the issue of ownership regarding the front portion ofLotNo. 9 and entitlement to the expropriation payment may be resolved in this actionPetitioners characterize respondents claim over the expropriation payment as unlawful on the ground that the expropriated portion belongs to petitioners per the alleged oral partition.They also maintain that Ygoa is barred by laches from claiming the front portion because she waited 13 years from the time of the sale to claim her share via petition for subdivision and survey.On the other hand, respondents charge petitioners with forum-shopping on the ground that the issue of ownership had already been submitted to the expropriation court.The trial court affirmed this argument stating that petitioners resorted to forum-shopping, while the appellate court ruled that it could not determine the existence of forum-shopping considering that it was not provided with the pleadings in the expropriation case.We agree with the CA on this score.The parties did not provide the Court with the pleadings filed in the expropriation case, which makes it impossible to know the extent of the issues already submitted by the parties in the expropriation case and thereby assess whether there was forum-shopping.Nonetheless, while we cannot rule on the existence of forum-shopping for insufficiency of evidence, it is correct that the issue of ownership should be litigated in the expropriation court.[50]The court hearing the expropriation case is empowered to entertain the conflicting claims of ownership of the condemned property and adjudge the rightful owner thereof, in the same expropriation case.[51]This is due to the intimate relationship of the issue of ownership with the claim for the expropriation payment.Petitioners objection regarding respondents claim over the expropriation payment should have been brought up in the expropriation court as opposition to respondents motion.While we do not know if such objection was already made,[52]the point is that the proper venue for such issue is the expropriation court, and not here where a different cause of action (specific performance) is being litigated.We also cannot agree with the trial courts order to partition the lot in accordance with Exhibit No. 1 or the sketch prepared by petitioner Valentina.To do so would resolve the issue of ownership over portions of Lot No. 9 and effectively preempt the expropriation court, based solely on actual occupation (which was the only thing which Exhibit No. 1 could have possibly proved).It will be remembered that Exhibit No. 1 is simply a sketch demonstrating the portions of Lot No. 9 actually occupied by the parties.It was offered simply to impeach petitioners assertion of actual occupation in accordance with the terms of the alleged oral partition.Let it be made clear that our ruling, just like those of the trial court and the appellate court, is limited to resolving petitioners action for specific performance.Given the finding that petitioners failed to prove the existence of the alleged oral partition and the alleged additional consideration for the sale, they cannot compel respondents to comply with these inexistent obligations.In this connection, there is no basis for petitioners claim that the CA Decision was incomplete by not definitively ruling on the ownership over the front lots.The CA decision is complete.It ruled that petitioners failed to prove the alleged obligations and are therefore not entitled to specific performance thereof.WHEREFORE,the petition isDENIED.The assailed October 28, 2005 Decision of the Court of Appeals in CA-G.R. No. 174719, as well as its August 31, 2006 Resolution, areAFFIRMED.G.R. No. 95529 August 22, 1991

MAGELLAN MANUFACTURING MARKETING CORPORATION, * petitioner, vs.COURT OF APPEALS, ORIENT OVERSEAS CONTAINER LINES and F.E. ZUELLIG, INC. respondents.

FACTS:1. Petitioner Magellan Manufacturers Marketing Corp. (MMMC) entered into a contract with Choju Co. of Yokohama, Japan to export 136,000 anahaw fans.

2. As payment thereof, a letter of credit was issued to MMMC by the buyer.

3. Through its president, James Cu, MMMC then contracted F.E. Zuellig, a shipping agent, to ship the anahaw fans through the other private respondent, Orient Overseas Container Lines, Inc., (OOCL) specifying that he needed an on-board bill of lading and that transhipment is not allowed under the letter of credit.

4. MMMC paid F.E. Zuellig the freight charges and secured a copy of the bill of lading which was presented to Allied Bank.

5. The bank then credited the amount covered by the letter of credit to MMMC's account. ($23,000)

6. However, when MMMC's president James Cu, went back to the bank, he was informed that the payment was refused by the buyer allegedly because there was no on-board bill of lading, and there was a transhipment of goods.

7. As a result of the refusal of the buyer to accept, upon MMMC's request, the anahaw fans were shipped back to Manila by OOCL.

8. When petitioner informed F.E Zuelig about what happened, the latter issued a certificate stating that its bill of lading it issued is an on-board bill of lading and that there was no actual transhipment of the fans. According to private respondents when the goods are transferred from one vessel to another which both belong to the same owner which was what happened to the Anahaw fans, then there is (no) transhipment. Petitioner sent this certification to Choju Co., Ltd., but the said company still refused to accept the goods in Japan.

9. Private respondents billed petitioner for the amount of such shipment and for demurrage in Japan.

10. In a letter, private respondents gave petitioner the option of paying the sum of P51,271.02 or to abandon the Anahaw fans to enable private respondents to sell them at public auction to cover the cost of shipment and demurrages.

11. Petitioner opted to abandon the goods. However, in a letter, private respondents demanded for payment from petitioner the amount representing the freight charges and demurrage incurred in Japan and Manila; and charges for stripping the container van of the Anahaw fans.

12. Petitioner filed a complaint praying that private respondents be ordered to pay whatever petitioner was not able to earn from Choju Co., Ltd., and other damages since private respondents are to blame for the refusal of Choju Co., Ltd. to accept the Anahaw fans.

13. In answer thereto the private respondents alleged that the bill of lading clearly shows that there will be a transhipment and that petitioner was well aware that MV (Pacific) Despatcher was only up to Hongkong where the subject cargo will be transferred to another vessel for Japan.

14. Private respondents also filed a counterclaim praying that petitioner be ordered to pay freight charges from Japan to Manila and the demurrages.

15. LC decided in favor of private respondents. It dismissed the complaint on the ground that petitioner had given its consent to the contents of the bill of lading where it is clearly indicated that there will be transhipment.

16. CA reduced the amount of freight charges

ISSUE: WHETHER CA ERRED IN AFFIRMING THE DECISION OF THE TRIAL COURT WHICH DISMISSED PETITIONERS COMPLAINT

HELD:

I. Petitioner insists that "(c)onsidering that there was no actual transhipment of the Anahaw fans, then there is no occasion under which the petitioner can agree to the transhipment of the Anahaw fans because there is nothing like that to agree to" and "(i)f there is no actual transhipment but there appears to be a transhipment in the bill of lading, then there can be no possible reason for it but a mistake on the part of the private respondents.

Petitioner, in effect, is saying that since there was a mistake in documentation on the part of private respondents, such a mistake militates against the conclusiveness of the bill of lading insofar as it reflects the terms of the contract between the parties, as an exception to the parol evidence rule, and would therefore permit it to explain or present evidence to vary or contradict the terms of the written agreement, that is, the bill of lading involved herein.

It is a long standing jurisprudential rule that a bill of lading operates both as a receipt and as a contract. It is a receipt for the goods shipped and a contract to transport and deliver the same as therein stipulated. As a contract, it names the parties, which includes the consignee, fixes the route, destination, and freight rates or charges, and stipulates the rights and obligations assumed by the parties. Being a contract, it is the law between the parties who are bound by its terms and conditions provided that these are not contrary to law, morals, good customs, public order and public policy. A bill of lading usually becomes effective upon its delivery to and acceptance by the shipper. It is presumed that the stipulations of the bill were, in the absence of fraud, concealment or improper conduct, known to the shipper, and he is generally bound by his acceptance whether he reads the bill or not.

The holding in most jurisdictions has been that a shipper who receives a bill of lading without objection after an opportunity to inspect it, and permits the carrier to act on it by proceeding with the shipment is presumed to have accepted it as correctly stating the contract and to have assented to its terms. In other words, the acceptance of the bill without dissent raises the presumption that all the terms therein were brought to the knowledge of the shipper and agreed to by him and, in the absence of fraud or mistake, he is estopped from thereafter denying that he assented to such terms. This rule applies with particular force where a shipper accepts a bill of lading with full knowledge of its contents and acceptance under such circumstances makes it a binding contract.

In the light of the series of events that transpired in the case at bar, there can be no logical conclusion other than that the petitioner had full knowledge of, and actually consented to, the terms and conditions of the bill of lading thereby making the same conclusive as to it, and it cannot now be heard to deny having assented thereto. As borne out by the records, James Cu himself, in his capacity as president of MMMC, personally received and signed the bill of lading. On practical considerations, there is no better way to signify consent than by voluntarily signing the document which embodies the agreement.

Under the parol evidence rule, the terms of a contract are rendered conclusive upon the parties, and evidence aliunde is not admissible to vary or contradict a complete and enforceable agreement embodied in a document, subject to well defined exceptions which do not obtain in this case. The parol evidence rule is based on the consideration that when the parties have reduced their agreement on a particular matter into writing, all their previous and contemporaneous agreements on the matter are merged therein. Accordingly, evidence of a prior or contemporaneous verbal agreement is generally not admissible to vary, contradict or defeat the operation of a valid instrument. The mistake contemplated as an exception to the parol evidence rule is one which is a mistake of fact mutual to the parties. Furthermore, the rules on evidence, as amended, require that in order that parol evidence may be admitted, said mistake must be put in issue by the pleadings, such that if not raised inceptively in the complaint or in the answer, as the case may be, a party cannot later on be permitted to introduce parol evidence thereon. Needless to say, the mistake adverted to by herein petitioner, and by its own admission, was supposedly committed by private respondents only and was raised by the former rather belatedly only in this instant petition. Clearly then, and for failure to comply even only with the procedural requirements thereon, we cannot admit evidence to prove or explain the alleged mistake in documentation imputed to private respondents by petitioner.

[G.R. No. L-18077. September 29, 1962.]

RODRlGO ENRIQUEZ, ET AL., plaintiffs-appellants, vs. SOCORRO A. RAMOS, defendant-appellee.

Gelacio L. Dimaano for plaintiff-appellants.

Vicente K. Aranda for defendant-appellee.

PAROLE EVIDENCE PERMISSIBLE IF THERE IS ALLEGATION IN THE PLEADINGS THAT AGREEMENT DOES NOT EXPRESS TRUE INTENT. Section 22, Rule 123 of the Rules of Court, which provides that when the terms of an agreement have been reduced to writing it is to be considered as containing all that has been agreed upon, and that no evidence other than the terms thereof can be admitted between the parties, holds true only if there is no allegation in the pleadings that the agreement does not express the true intent of the parties.

Action for foreclosure of a real estate mortgage.

BAUTISTA ANGELO, J p:

Events prior to the present case:

Plaintiffs entered into a contract of conditional sale with one Pedro del Rosario.

To guarantee the performance of the conditions stipulated therein a performance bond in the amount of P100,000.00 was executed by Pedro del Rosario.

Del Rosario was given possession of the land for development as a subdivision at his expense. He undertook to pay for the subdivision survey, the construction of roads, the installation of light and water, and the income tax plaintiffs may be required to pay arising from the transaction, in consideration of which Del Rosario was allowed to buy the property for P600,000.00 within a period of two years from November 6, 1956 with the condition that, upon his failure to pay said price when due, all the improvements introduced by him would automatically become part of the property without any right on his part to reimbursement and the conditional sale would be rescinded.

Unable to pay the consideration of P600,000.00 as agreed upon, and in order to avoid court litigation, plaintiffs and Del Rosario, together with defendant Socorro A. Ramos, who turned out to be a partner of the latter, entered into a contract of rescission on November 24, 1958.

To release the performance bond and to enable defendant to pay some of the lots for her own purposes, plaintiffs allowed defendant to buy 20 of the lots herein involved at the rate of P16.00 per square meter on condition that she will assume the payment of P50,000.00 as her share in the construction of roads and other improvements required in the subdivision. This situation led to the execution of the contract of sale Exhibit A subject of the present foreclosure proceedings.

Present case:

1. Defendant purchased from plaintiffs 20 parcels of land located in Quezon City and covered by TCTs for the amount of P235,056.00 of which only the amount of P35,056.00 was paid on the date of sale, the balance of P200,000.00 being payable within two years from the date of sale.

2. To secure the payment of the balance of P200,000.00 defendant executed a mortgage in favor of plaintiff upon the 20 parcels of land sold and on a half interest over a parcel of land in Bulacan which was embodied in the same deed of sale; registered in the Office of the Registers of Deeds of Quezon City and Pampanga;

3. Defendant broke certain stipulations contained in said deed of sale with mortgage, plaintiffs instituted the present foreclosure proceedings.

4. Defendant set up as affirmative defense:

a. that the contract mentioned in the complaint does not express the true agreement of the parties because certain important conditions agreed upon were not included therein by the counsel who prepared the contract;

b. that the stipulation that was omitted from the contract was the promise assumed by plaintiffs that they would construct roads in the lands which were to be subdivided for sale on or before January, 1959;

c. that said condition was not placed in the contract because, according to plaintiffs' counsel, it was a superfluity, inasmuch as there is an ordinance in Quezon City which requires the construction of roads in a subdivision before lots therein could be sold;

d. and that, upon the suggestion of plaintiffs' counsel, their promise to construct the roads was not included in the contract because the ordinance was deemed part of the contract.

e. Defendant further claims that the true purchase price of the sale was not P235,056.00 but only P185,000.00, the difference of P50,000.00 being the voluntary contribution of defendant to the cost of the construction of the roads which plaintiffs assumed to do as abovementioned.

5. Trial Court sustained the contention of defendant and dismissed the complaint on the ground that the action of plaintiffs was premature.

6. It found that plaintiffs really assumed the construction of the roads as a condition precedent to the fulfillment of the obligation stipulated in the contract on the part of defendant, and since the same has not been undertaken, plaintiffs have no cause of action.

Issue: Was an oral agreement, coetaneous to the execution of the contract of sale, entered into between the parties to the effect that plaintiffs would undertake the construction of the roads on the lots sold before defendant could be required to comply with her financial obligation?

Ruling:

It is argued that the court a quo erred in allowing the presentation of parole evidence to prove that a contemporaneous oral agreement was also reached between the parties relative to the construction of the roads for the same is in violation of our rule which provides that when the terms of an agreement had been reduced to writing it is to be considered as containing all that has been agreed upon and that no evidence other than the terms thereof can be admitted between the parties (Section 22, Rule 123). This rule, however, only holds true if there is no allegation that the agreement does not express the true intent of the parties. If there is and this claim is put in issue in the pleadings, the same may be the subject of parole evidence (Idem.). The fact that such failure has been put in issue in this case is patent in the answer wherein defendant has specifically pleaded that the contract of sale in question does not express the true intent of the parties with regard to the construction of the roads.

It appearing that plaintiffs have failed to comply with the condition precedent relative to the construction of the roads in the subdivision in question, it follows that their action is premature as found by the court a quo. The failure of defendant to pay the realty and income taxes as agreed upon, as well as to register the mortgage with respect to the Bulacan property, aside from being minor matters, appear sufficiently explained in the brief of defendant-appellee.

[G.R. No. 94563. March 5, 1991.]

MEYNARDO C. POLICARPIO and LOURDES POLICARPIO,petitioners,vs.HONORABLE COURT OF APPEALS, EVELYN Q. CATABAS, ROMULO Q. CATABAS and CLEMENTE CATABAS,respondents.

GUTIERREZ, JR.,Jp:

1. Petitioners-spouses Meynardo C. Policarpio and Lourdes Policarpio and private respondents Evelyn Romulo and Clemente, all surnamed Catabas executed a "Contract to Sell" whereby the private respondents agreed to buy and the petitioners-spouses to sell a residential lot of about 300 square meters with a house and other improvements located at Servillana Street, UE Village, Cainta, Rizal.

2. The property is covered by TCT No. 501812 Registry of Deeds, Province of Rizal. The agreed purchase price was the amount of P270,000 payable as follows: (1) P10,000.00 upon signing of the Contract to Sell; and (2) the balance of P260,000.00 to be paid from the proceeds of the private respondents' PAG-IBIG loan thru its designated bank, the Urban Bank and which they guarantee and warrant to be approved and thereafter release on or before the first week of December 1983; and to deliver to the petitioners-spouses the whole amount of P260,000.00 on or before the first week of December 1983.

3. The "Contract to Sell" also provides that failure on the part of the vendees to pay the balance on the first week of December, 1983 will automatically annul the contract and the vendors shall immediately return the downpayment and that after full payment of the purchase price the vendors shall execute a deed of absolute sale in favor of the vendee.

4. The private respondents were not able to pay the balance price on the first week of December 1983.

5. However, the petitioners-spouses did not return the P10,000 downpayment.

6. The private respondents continued to make partial payments which were received by the petitioners-spouses.

7. All in all, the private respondents made partial payments of P75,000.00 broken down as follows: (1) P10,000.00 at the time of the execution of the Contract to Sell; (2) P50,000.00 on May 9, 1984; (3) P10,000.00 on June 4, 1984 and (4) P5,000.00 on June 7, 1984.Cdpr

8. On March 1, 1985, the private respondents filed with the Regional Trial Court of Pasig, Metro Manila a case for specific performance and damages against the petitioners-spouses.

9. As stated earlier, the trial court's decision was reversed and set aside by the Court of Appeals. A motion for reconsideration was denied. Hence, this petition.

Issue: Whether the Contract to Sell was automatically cancelled upon violation by the buyers (private respondents)

HELD:

DOCTRINE:

In view of the conflicting findings of facts of the trial court and the appellate court we have decided to review the evidence on record in order to arrive at the correct findings based on the record. (Robleza v. Court of Appeals, 174 SCRA 354 [1989]).

It is to be observed that the parties' conflicting evidence centers on the Contract to Sell and Deed of Absolute Sale executed by the parties on April 9, 1984. The parties introduced conflicting testimonies regarding the true nature of the subject documents. This, in effect results in the non-application of the Parol Evidence Rule underSection 9, Rule 130 of the Rules of Court, to wit:

"SEC. 9.Evidence of written agreements. When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement."

The record shows that neither of the parties objected to the different testimonies. After a thorough examination of the record we are constrained to reverse the findings of the appellate court.

The appellate court's conclusion that the petitioners-spouses were at fault in the non-release of the private respondents' PAG-IBIG loan thru Urban Bank, has no factual basis.

The subject property was mortgaged to the Philippine Commercial and Industrial Bank (PCIB). This fact was known to the private respondents. In such a case, it may be assumed that the PCIB would not release the title of the land without first getting paid. Consequently, the petitioners-spouses' contention that payment of the balance price of the subject parcel of land was not dependent upon the release of their title from the PCIB which would be used as collateral by the private respondents to secure their PAG-IBIG loan thru Urban Bank, is more credible.

Moreover, the Urban Bank letter signed by Assistant Manager Ms. Liza M. de los Reyes to PCIB dated July 2, 1984 (Exhibits G and G-1) shows that there is no basis for the conclusion that the petitioner-spouses ". . . reneged on their agreement that Urban Bank would pay their mortgage loan obligation with PCIB so that their TCT No. 501812 over the subject property could be released free of encumbrance and transferred in appellants' name as the latter intended to use the title as collateral for their loan from Urban Bank."

We rule that the findings of facts of the trial court which are at variance with those of the appellate court are more in consonance with the evidence on record.

Moreover, under the contract to sell, it is provided therein that failure on the part of the vendees (private respondents) to pay the balance of the price on the first week of December 1983 will automatically cancel the contract. The private respondents' obligation to pay was a suspensive condition to the obligation of the petitioners-spouses to sell and deliver the subject property. Since, admittedly, the private respondents failed on their obligation to pay, this rendered the contract to sell ineffective and without force and effect.

The subsequent execution of the deed of sale did not in any manner transfer ownership of the property to the private respondents. It is clear that the deed of sale was executed merely to facilitate the release of the private respondents' PAG-IBIG loan from the Urban Bank and not for the purpose of actually transferring ownership.cdll

With these findings, we rule that the private respondents are not entitled to specific performance. The obligation in a contract of sale is reciprocal. (Cortez v. Bibano and Borromeo, 41 Phil. 298 [1920]). Since, the vendees admittedly had not paid the full price of the property which was their obligation under the subject contract they cannot now compel performance of the said contract.

Under the facts of the case, we agree with the trial court that the petitioners-spouses are entitled to moral damages, to wit:

"The defendants' claim of the trauma they suffered upon being sued by the plaintiffs inspires belief. After doing everything in good faith within their capability to help accelerate the release of plaintiffs' loan, their shock was understandable when the plaintiffs, in brazen disregard of their failure to comply with their contractual obligation, suddenly filed the instant complaint. Rather than being commended, as should have been expected, for walking the Biblical second mile in generous accommodation of the plaintiffs, the defendants were instead unceremoniously brought to Court. (Rollo, p. 90)

WHEREFORE, the questioned decision and Resolution of the Court of Appeals are REVERSED and SET ASIDE. The decision of the Regional Trial Court Pasig, Metro Manila is hereby REINSTATED except that the award for moral damages is reduced to P15,000.00 and the awards for exemplary damages in the amount of P20,000.00 and attorney's fees in the amount of P30,000.00 are deleted.

SO ORDERED.

Fernan, C.J., Feliciano, BidinandDavide, Jr., JJ., concur.

G.R. No. 75290November 4, 1992

AMADO T. GURANGO and ESTER GURANGO, Petitioners, vs. IAC and EDWARD L. FERREIRA, Respondents.DOCTRINE: The mistake contemplated as an exception to the parol evidence rule is one which is a mistake of fact mutual to the parties.

FACTS: NOCON, J.: petition for review on certiorari January 26, 1977, private respondent Edward Ferreira sold to petitioner Amado Gurango one booklet of raffle tickets valued at (P500.00) consisting of (100) tickets bearing ticket numbers 162501 to 162600 in connection with a fund-raising project sponsored by the Makati Jaycees.

Ticket number 162574 in the name of Armando "Boyet" Gurango, the minor son of the petitioners, but in the custody or possession of private respondent, won a Toyota Corolla car.

Gurango alleged that he issued Check No. 00730 dated April 12, 1977 for the payment of the (60) raffle tickets in the amount of (300.00) Pesos.

The following morning, private respondent called up petitioner to inform the latter that he had already paid petitioner's remaining unpaid balance of (P200.00) and, for the latter to turnover the (40) claim stubs representing the unpaid balance. Petitioner inquired from the private respondent if any of his tickets won a car during the raffle but was told by the latter that no Jaycee had won any car in said raffle.

When private respondent asked for the (40) claim stubs from the petitioner, the latter informed the former that he is willing to honor their previous agreement and even tendered a check for (P200.00); but private respondent refused, maintaining that the money he advanced the previous night will be charged against his company and he only needs the claim stubs of said tickets to justify said expenses.

Private respondent asked the petitioner to put down their agreement into writing which the latter did in a piece of yellow paper and in his own handwriting

This is a mutual agreement between Mads Gurango & Ed Ferreira that they bought a booklet of Raffle Tickets of Makati JC worth P500.00. All the stubs in our possessions remains our share and any number happened to win in the raffle corresponding to the stub numbers each one of us is holding will own the prize solely w/o the other party claims co-ownership, even that the name printed in the such raffle stubs is in the name of one party or any other person.

This is a Gentlemen and Jayceely agreement that both of us will stick to this simple and binding agreement.

Subsequently, petitioner was shown a copy of Daily Express and learned that ticket No. 162574 won a Toyota Corolla, but was surprised to find out that the winning stub was among those taken by the private respondent.

Private respondent claimed that petitioner informed the former that he is only buying (60) tickets and offered to return the remaining (40) tickets since he needed the money for the payment of his income tax.

Upon noticing that all the returned tickets were in the name of the petitioner or members of his family, private respondent asked the latter to write down their agreement signed by them on April 14, 1977 (Exhibit "A").

Eventually, the car was awarded to petitioners' son. Subsequent demands by the private respondent to the petitioner to comply with their agreement were ignored by the latter.

Private respondent filed a complaint for damages against petitioners with CFI-Rizal, which dismissed the complaint.

IAC reversed the decision of the trial court. It found the agreement (Exh. A or A-1) was prepared and signed by the parties before the raffle. Considering the business and social backgrounds of the parties. Exhibit A or A-1 is the most practical covenant for their mutual protection before the raffle.

ISSUE: Is agreement executed between petitioner and private respondent on April 14, 1977 valid? YES.HELD: Section 9, Rule 130.Evidence of written agreements. - When the terms of an agreement have been reduced to writing, it is to be considered as containing all such terms, and, therefore, there can be, between the party and their successors in interest, no evidence of the terms of the agreement other than the contents of the writing, except in the following cases:

(a)Where a mistake or imperfection of the writing, or its failure to express the true intent and agreement of the parties, or the validity if the agreement is put in issue by the pleading;

(b)When there is an intrinsic ambiguity in the writing.

The mistake contemplated as an exception to the parol evidence rule is one which is a mistake of fact mutual to the parties, which is not present on this case. Moreover, in view of the parties' conflicting claims regarding the true nature of the agreement executed by them, SC finds the version of the private respondent more credible for the terms of said agreement are clear and require no room for interpretation since the intention of the parties, as expressly specified in said agreement, do not contradict each other.

The fact that the agreement was prepared and written by petitioner himself further indicated that said agreement was entered into by the parties freely and voluntarily which renders petitioners' claim of fraud in the execution of the agreement unbelievable.

In the instant case, it is highly improbable that petitioner's consent was given through fraud since the document was prepared and executed by petitioner himself. Therefore, the agreement is valid and binding upon petitioner and respondent.

WHEREFORE, finding no reversible error in the questioned decision of the appellate court, the petitioner for certiorari is hereby DENIED for lack of merit.

G.R. No. 103038 March 31, 1993

JULIA ANG ENG MARIANO,petitioner,vs.THE COURT OF APPEALS, JUANITO FAUSTINO and TERESITA FAUSTINO,respondents.

NOCON,J.:Petitioner claims that the private respondents approached her on October 28, 1986 for a loan of P250,000.00 on the security of a mortgage on their lot at Deparo, Kalookan City and covered by TCT No. 129613 in their names. On January 15, 1987, they secured another loan of P250,000.00 on the basis of the same security. Forseeing their inability to pay this when they become due, private respondents sold the same parcel of land mortgaged to petitioner for an additional P320,550.00 on September 29, 1987. Thus, a deed of sale was drawn up on said date and a new TCT No. 156493 issued in petitioner's name. However, the private respondents refused to turn over possession of the land to her and instead sued her for annulment of deed of sale and damages.

Private respondents' story is that all they wanted was to transform their small piece of land, which they had inherited from their parents, into a subdivision. They looked for financiers who would be able to lend them money for their project and petitioner expressed her desire to help them.

Being unschooled farmers, and relying completely on the trust and confidence they have on petitioner, they signed the prepared mortgage forms that petitioner told them to sign. They first mortgaged their land on October 28, 1986 for P250,000.00 with the condition that they were to construct a house on said lot so that they would be able to secure another P250,000.00 with the house and lot as security. They received, however, only P150,000.00 for the first mortgage. After the house was constructed, they were made to sign another document for another P250,000.00 on January 15, 1987 for which they received again only P150,000.00. Thereafter, petitioner told them that she could easily secure a bank loan of P1,000,000.00 for their project but they had to sign over their property to her as the bank would require that the property be in her name for the loan to be processed. Thus, trusting her completely, they signed on September 29, 1987 a prepared deed of sale which petitioner handed over to them for their signature. When they discovered that there was no loan and that they were being asked to vacate their land, they took petitioner to court.

Private respondents sued petitioner for annulment of the deed of sale and the cancellation of the Transfer Certificate of Title in her name.

The trial court, however, dismissed their complaint relying on the validity of the deed of sale as the best evidence of the transaction between the parties.

On appeal, the appellate court saw otherwise and reversed and set aside the decision of the lower court.

Thus, this petition.Issue/Held:

Behind this flowery legalese is the simple question adverted to at the start of this decision: can parol evidence be admitted to show that the Deed of Sale, which petitioner claims truly represented the contract between the parties and "drawn up with all the solemnities prescribed by law"5and properly notarized, a sham transaction as claimed by the private respondents?

The rule on parol evidence recognizes the following exceptions:

(a) where a mistake or imperfection of the writing, or its failure to express the true intent and agreement of the parties, or the validity of the agreement is put in issue by the pleadings;

(b) . . . (Sec. 7, Rule 130).

As can be clearly gleaned from the foregoing, the rule making a writing the exclusive evidence of the agreement therein stated, is not applicable when the validity of such agreement is the fact in dispute. A contract may be annulled where the consent of one of the contracting parties was procured by mistake, fraud, intimidation, violence or undue influence (Art. 1330, New Civil Code). In fact, as early as 1919 in the case of Bough v. Cantiveros, 40 Phil. 209, this Court laid down the rule that where the validity of the agreement is the issue, parol evidence may be introduced to establish illegality or fraud.

xxx xxx xxx

While the writing itself may have been accompanied by the most solemn formalities, no instrument is so sacred when tainted with fraud as to place it beyond the scrutiny of extrinsic evidence. This evidence overcomes the known presumptionfraus est odiosa et non praesumenda(Yturralde v. Vagilidad, 28 SCRA 393 [1969]).7In the case at bar, petitioner relies heavily8on the notarial certification of the Deed of Absolute Sale by Notary Public Alfonso B. Capacillo on September 24, 1987 that said document was executed by the parties named therein in the presence of witnesses Juanito Chan and Gaspar Dandan.9Private respondents' evidence clearly shows that all they wanted was to contact a financier10who would lend them money to finance the transformation of their inherited agricultural land11in Deparo, Caloocan City into a subdivision. In the meantime they had already spent P6,000.0012for the subdivision survey.13A certain person approached them and told them that a certain Julia Ang could help them in the development of their subdivision.14After private respondent Juanito Faustino was introduced to Julia Ang, the latter promised him that he will be given a loan of P250,000.00 to start the development of his subdivision.15After the private respondents signed the mortgage document for P250,000.00, petitioner gave them only P150,000.00 saying that the balance covered interest and other expenses.16Private respondents, however, had to construct a house on the property as required by petitioner to be able to get additional loans for the development of their subdivision.17Thereafter, an additional mortgage document was prepared for P250,000.00 but, as before they were only given P150,000.00.18Private respondents' version was, in fact, corroborated by petitioner when she testified on cross-examination that the real intention of the parties in the execution of the deed of sale was to secure a loan of P1,000,000.00 on the property in her name and that whatever private respondents owed her would be deducted from the proceeds of the loan with the private respondents assuming the payment thereof.21Her own words make out a case of fraud which she practiced upon the private respondents.

Moreover, petitioner could have easily rebutted and belied private respondents' negative averment22in the trial court. All she had to do was to present the Notary Public who notarized the Deed of Sale and the two witnesses to the deed. Upon their word that private respondents had signed the deed of sale in their presence and had received the consideration of P320,550.00,23private respondents would have had to kiss their cause of action goodbye.

No such testimony was given by the petitioner in the trial court and her corroborating testimony cited in the footnote sho