Ortaez vs CA (G.R. No. 107372 January 23, 1997)

Ortaez vs Court of Appeals
G.R. No. 107372 January 23, 1997

Facts: On September 30, 1982, private respondents sold to petitioner two (2) parcels of registered land in Quezon City for a consideration of P 35,000.00 and P20,000.00, respectively. The first deed of absolute sale covering Transfer Certificate of Title (TCT) No. 258628 and the second deed of absolute sale covering TCT No. 243273. Offshoot, petitioner sued private respondents for specific performance before the RTC. In their answer with counterclaim private respondents merely alleged the existence of the following oral conditions which were never reflected in the deeds of sale: “3.3.2 Title to the other property (TCT No. 243273) remains with the defendants (private respondents) until plaintiff (petitioner) shows proof that all the following requirements have been met: (i) Plaintiff will cause the segregation of his right of way amounting to 398 sq. m.; (ii) Plaintiff will submit to the defendants the approved plan for the segregation; (iii) Plaintiff will put up a strong wall between his property and that of defendants’ lot to segregate his right of way; (iv) Plaintiff will pay the capital gains tax and all other expenses that may be incurred by reason of sale. x x x.” During trial, private respondent Oscar Inocentes, a former judge, orally testified that the sale was subject to the above conditions, although such conditions were not incorporated in the deeds of sale. Despite petitioner’s timely objections on the ground that the introduction of said oral conditions was barred by the parol evidence rule, the lower court nonetheless, admitted them and eventually dismissed the complaint as well as the counterclaim. On appeal, the Court of Appeals (CA) affirmed the court a quo. Hence, this petition.

Issue: Whether or not private respondents’ testimony as to the true intent of the parties is admissible as evidence.

Held: No. The parol evidence herein introduced is inadmissible. Private respondents’ oral testimony on the alleged conditions, coming from a party who has an interest in the outcome of the case, depending exclusively on human memory, is not as reliable as written or documentary evidence. Spoken words could be notoriously unreliable unlike a written contract which speaks of a uniform language. Thus, under the general rule in Section 9 of Rule 130 of the Rules of Court, when the terms of an agreement were reduced to writing, as in this case, it is deemed to contain all the terms agreed upon and no evidence of such terms can be admitted other than the contents thereof. Considering that the written deeds of sale were the only repository of the truth, whatever is not found in said instruments must have been waived and abandoned by the parties. Examining the deeds of sale, we cannot even make an inference that the sale was subject to any condition. As a contract, it is the law between the parties.

The parol evidence herein sought to be introduced would vary, contradict or defeat the operation of a valid instrument, hence, contrary to the rule that:

The parol evidence rule forbids any addition to x x x the terms of a written instrument by testimony purporting to show that, at or before the signing of the document, other or different terms were orally agreed upon by the parties.

Although parol evidence is admissible to explain the meaning of a contract, “it cannot serve the purpose of incorporating into the contract additional contemporaneous conditions which are not mentioned at all in the writing unless there has been fraud or mistake.” No such fraud or mistake exists in this case.

In this case, the deeds of sale are clear, without any ambiguity, mistake or imperfection, much less obscurity or doubt in the terms thereof.

Private respondents did not expressly plead that the deeds of sale were incomplete or that it did not reflect the intention of the buyer (petitioner) and the seller (private respondents). Such issue must be “squarely presented.” Private respondents merely alleged that the sale was subject to four (4) conditions which they tried to prove during trial by parol evidence. Obviously, this cannot be done, because they did not plead any of the exceptions mentioned in the parol evidence rule. Their case is covered by the general rule that the contents of the writing are the only repository of the terms of the agreement. Considering that private respondent Oscar Inocentes is a lawyer (and former judge) he was “supposed to be steeped in legal knowledge and practices” and was “expected to know the consequences” of his signing a deed of absolute sale. Had he given an iota’s attention to scrutinize the deeds, he would have incorporated important stipulations that the transfer of title to said lots were conditional. 

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