Seaoil Petroleum Corp. v. Autocorp et al. (G.R. No.

164326, October 17, 2008)

Facts:

Defendant-appellant Seaoil purchased one unit of Excavator from Plaintiff-appelle

Autocorp payable in 12 monthly instalments. The remaining 10 of the 12 checks were
dishonored by the bank since Seaoil requested that payment be stopped. Hence,
Autocorp filed a complaint for recovery of personal property with damages and replevin.
Seaoil alleges that Seaoil and Autocorp were only utilized as conduits to settle the
obligation of one foreign entity named Uniline Asia, in favor of another foreign entity,
Focus Point International, Incorporated.

Issue:

Whether or not the CA erred in partially applying the parol evidence rule.

Held:

No. Petitioner does not question the validity of the vehicle sales invoice but merely
argues that the same does not reflect the true agreement of the parties.
However, petitioner only had its bare testimony to back up the alleged arrangement with
Rodriguez. The Monte de Piedad checks – the supposedly “clear and obvious link”
between the documentary evidence and the true transaction between the parties – are
equivocal at best. There is nothing in those checks to establish such link. Rodriguez
denies that there is such an agreement. Unsubstantiated testimony, offered as proof of
verbal agreements which tends to vary the terms of a written agreement, is inadmissible
under the parol evidence rule. The parol evidence rule forbids any addition to, or
contradiction of, the terms of a written agreement by testimony or other evidence
purporting to show that different terms were agreed upon by the parties, varying the
purport of the written contract. 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. Evidence of a prior or contemporaneous verbal
agreement is generally not admissible to vary, contradict or defeat the operation of a
valid contract. Hence, petitioner’s contention that the document falls within the
exception to the parol evidence rule is untenable. The exception obtains only where “the
written contract is so ambiguous or obscure in terms that the contractual intention of the
parties cannot be understood from a mere reading of the instrument. In such a case,
extrinsic evidence of the subject matter of the contract, of the relations of the parties to
each other, and of the facts and circumstances surrounding them when they entered
into the contract may be received to enable the court to make a proper interpretation of
the instrument.
Heirs of Ureta v. Heirs of Ureta (G.R. No. 165748, September 14, 2011)

Facts:

Alfonso Ureta begot 14 children with Policronio as the eldest. The children of Policronio,
are opposed to the rest of Alfonso’s children and their descendants. During his lifetime,
Alfonso executed four (4) Deeds of Sale covering several parcels of land, one of which
was made in favor of Policronio. The sales were only made for taxation purposes and no
monetary consideration was given. Alfonso continued to own, possess and enjoy the
lands and their produce during his lifetime. The Deed of Sale executed in favor of
Policronio, covered six parcels of land, which are the properties in dispute in this case
after the heirs of Alfonso included such property in the Deed of Extra-Judicial Partition.

Issue:

1. Whether or not parol evidence may be entertained to thwart the binding effect of
the Deed of Absolute Sale.
2. Whether or not parol evidence may not be invoked by the heirs of Alfonso not
being parties or successor-in-interest to the Deeds of Absolute Sale.

Held:

1. Yes. Paragraphs (b) and (c) of Section 9, Rule 130 of the Revised Rules of Court are
applicable in the case at bench. The failure of the Deed of Sale to express the true
intent and agreement of the parties was clearly put in issue in the Answer of the
Heirs of Alfonso to the Complaint. It was alleged that the Deed of Sale was only
made to lessen the payment of estate and inheritance taxes and not meant to
transfer ownership. The exception in paragraph (b) is allowed to enable the court to
ascertain the true intent of the parties, and once the intent is clear, it shall prevail
over what the document appears to be on its face. As the true intent of the parties
was duly proven in the present case, it now prevails over what appears on the Deed
of Sale. The validity of the Deed of Sale was also put in issue in the Answer. The
operation of the parol evidence rule requires the existence of a valid written
agreement. It is, thus, not applicable in a proceeding where the validity of such
agreement is the fact in dispute, such as when a contract may be void for lack of
consideration. Considering that the Deed of Sale has been shown to be void for
being absolutely simulated and for lack of consideration, the Heirs of Alfonso are not
precluded from presenting evidence to modify, explain or add to the terms of the
written agreement.
2. Yes. Indeed, the applicability of the parol evidence rule requires that the case be
between parties and their successors-in-interest. In this case, both the Heirs of
Alfonso and the Heirs of Policronio are successors-in-interest of the parties to the
Deed of Sale as they claim rights under Alfonso and Policronio, respectively.
Marquez et al. v. Espejo et al. (G.R. No. 168387, August 25, 2010)

Facts:

Respondents were the original registered owners of two parcels of agricultural land, with
an area of two hectares each. One is located at Barangay Lantap, Bagabag, while the
other in Barangay Murong, Bagabag, both in Nueva Vizcaya. There is no dispute
among the parties that the Lantap property is tenanted by the respondents, while the
Murong property is tenanted by petitioners. Both lands were mortgaged and eventually
foreclosed and sold to Rural Bank of Bayombong, Inc. (RBBI). TCT No. T-62096 was
issued for the Murong property while TCT No. T-62836 was issued for the Lantap
property. Both TCTs describe their respective subjects without any reference to
either Barangay Lantap or Barangay Murong. Eventually, respondents Espejos bought
back one of their lots from RBBI evidenced by TCT No. T-62096 (Murong property) and
petitioners also acquired, thru Voluntary Land Transfer (VLT), the land covered by TCT
No. T-62836 (Lantap property). There is no evidence, however, that respondents took
possession of the Murong property, or demanded lease rentals from the petitioners who
continued to be the tenants of the Murong property, or otherwise exercised acts of
ownership over the Murong property. After some time, respondents thereafter filed a
Complaint now claiming title from the petitioners.

Issue:

Whether or not the Parole Evidence Rule should be applied.

Held:

No. The application of the Parol Evidence Rule is improper in the case at bar. In the first
place, respondents are not parties to the VLTs executed between RBBI and petitioners;
they are strangers to the written contracts. Rule 130, Section 9 specifically provides that
parol evidence rule is exclusive only as “between the parties and their successors-in-
interest.” The parol evidence rule may not be invoked where at least one of the parties
to the suit is not a party or a privy of a party to the written document in question, and
does not base his claim on the instrument or assert a right originating in the
instrument. Moreover, the instant case falls under the exceptions to the Parol Evidence
Rule. The petitioners’ VLTs suffer from intrinsic ambiguity. The VLTs described the
subject property as covered by TCT No. T-62836 (Lantap property), but they also
describe the subject property as being located in “Barangay Murong.” Even the
respondents’ Deed of Sale falls under the exception to the Parol Evidence Rule. It
refers to “TCT No. T-62096” (Murong property), but RBBI contended that the true intent
was to sell the Lantap property. In short, it was squarely put in issue that the written
agreement failed to express the true intent of the parties. Based on the foregoing, the
resolution of the instant case necessitates an examination of the parties’ respective
parol evidence, in order to determine the true intent of the parties.
ACI Philippines, Inc. v. Coquia (G.R. No. 174466, July 14, 2008)

Facts:

Petitioner contracted with respondent for the purchase of one (1) lot of flint cullets,
consisting of 2,500 to 3,000 metric tons, at a price of P4.20 per kilo under Purchase
Order (PO) No. 106211. Several deliveries made by respondent were accepted and paid
for by petitioner at the unit price of P4.20 per kilo as indicated in PO No. 106211.
However, petitioner thereafter demanded the reduction of the purchase price from P4.20
per kilo toP3.65 per kilo to which respondent acceded, albeit allegedly under duress.
Petitioner accordingly issued PO No. 106373 explicitly superseding PO No. 106211.
Subsequent deliveries were again made by respondent under Delivery Receipt (DR)
Nos. 901, 719 and 735, respectively. Petitioner accepted the deliveries but refused to
pay for them even at the reduced price of P3.65 per kilo, demanding instead that the unit
price be further reduced to P3.10 per kilo. Respondent then filed a Complaint for specific
performance and damages against petitioner seeking payment for the deliveries made
under DR Nos. 901, 719 and 735, amounting to 46,390 kilos at the renegotiated price
of P3.65 per kilo. Respondent further demanded that petitioner be directed to accept
and pay for the remaining deliveries to complete the one (1) lot of flint cullets originally
contracted for. Three (3) days after the complaint against it was filed, petitioner paid for
the flint cullets under Delivery Receipt Nos. 901, 719 and 735 at the unit price of P3.65
per kilo.

Issue:

Whether or not evidence aliunde (Parole Evidence) may be received to prove time was
an important element of the agreement.

Held:

Yes. Section 9, Rule 130 of the Rules of Court states that a party may present evidence
to modify, explain or add to the terms of the agreement if he puts in issue in his pleading
the failure of the written agreement to express the true intent and agreement of the
parties. Since an exception to the parol evidence rule was squarely raised as an issue in
the answer, the trial court should not have been so inflexible as to completely disregard
petitioner’s evidence. Sifting through the testimony of respondent, we find that although
she was not given definite days during which she should deliver the flint cullets, she was
indeed apprised of petitioner’s urgent need for large quantities thereof. Furthermore,
petitioner presented the unrebutted testimony of Ermilinda Batalon, its materials control
manager, to prove that it agreed to the P4.20 per kilo purchase price only because
respondent assured it of prompt deliveries sufficient for petitioner’s production
requirements. These testimonies give us a more complete picture of the transaction
between the parties and allow for a more reasoned resolution of the issues, without
over-reliance on the tenuous application of the rule on contracts of adhesion.
Financial Building Corp. v. Rudlin International Corp. et al. (G.R. No. 164186,
October 4, 2010)

Facts:

Petitioner and respondent entered into an agreement to construct a school building

which was embodied in a Construction Agreement which was subsequently modified by
another Letter-Agreement. The demand for payment of the balance was left unheeded
hence the complaint for collection and preliminary attachment by the petitioner.
Respondent avers that the Construction Agreement did not reflect the true contract price
and that the project was not completed and/or defective.

Issue:

Whether or not respondent can avail of the exceptions to the parole evidence rule.

Held:

No. Under the general rule in Section 9 of Rule 130 of the Rules of Court, when the
terms of an agreement were reduced in 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. Rudlin cannot invoke the exception under (a) or (b) of Section 9, Rule
130 of the Rules of Court. Such exception obtains only where “the written contract is so
ambiguous or obscure in terms that the contractual intention of the parties cannot be
understood from a mere reading of the instrument. In such a case, extrinsic evidence of
the subject matter of the contract, of the relations of the parties to each other, and of the
facts and circumstances surrounding them when they entered into the contract may be
received to enable the court to make a proper interpretation of the instrument. Under the
fourth exception, however, Rudlin’s evidence is admissible to show the existence of
such other terms agreed to by the parties after the execution of the contract. But apart
from the Bar Chart and Cash Flow Chart prepared by FBC, and the testimony of Rodolfo
J. Lagera, no competent evidence was adduced by Rudlin to prove that the amount
stated therein as contract price was the actual decreased amount that FBC and Rudlin
found mutually acceptable. As to the affidavits executed by Architect Quezon and his
associate Roberto R. Antonio, the same do not serve as competent proof of the
purported actual contract price as they did not testify thereon. Significantly, the Letter-
Agreement did not at all mention the total contract price. Likewise, there is nothing in
the various letters sent by Rudlin to FBC while construction was in progress and even
subsequent to the execution of the said Letter-Agreement indicating that Rudlin
corrected the original contract price which FBC had repeatedly mentioned in its letters
and documents.
Lapulapu Foundation Inc., et al. v. CA et al. (G.R. No. 126006, January 29, 2004)

Facts:

Petitioner Tan, President of the Foundation, obtained four loans from the respondent
Allied Banking Corp. covered by four promissory notes. Thereafter, the entire obligation
was not paid by the petitioner foundation despite demand, hence, the complaint. In its
answer, the petitioner Foundation denied incurring indebtedness from the respondent
Bank alleging that the loans were obtained by petitioner’s President Tan in his personal
capacity, for his own use and benefit and on the strength of the personal information he
furnished the respondent Bank. For his part, petitioner Tan admitted that he contracted
the loans from the respondent Bank in his personal capacity. The parties, however,
agreed that the loans were to be paid from the proceeds of petitioner Tan’s shares of
common stocks in the Lapulapu Industries Corporation, a real estate firm. The loans
were covered by promissory notes which were automatically renewable (“rolled-over”)
every year at an amount including unpaid interests, until such time as petitioner Tan was
able to pay the same from the proceeds of his aforesaid shares.

Issue:

Whether or not parole evidence rule can be applied.

Held:
Yes. Section 9, Rule 130 of the of the Revised Rules of Court provides that “when the
terms of an agreement have been reduced to writing, it is to be 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.”
In this case, the promissory notes are the law between the petitioners and the
respondent Bank. Nowhere was it stated therein that they would be renewed on a year-
to-year basis or “rolled-over” annually until paid from the proceeds of petitioner Tan’s
shares in the Lapulapu Industries Corp. Accordingly, this purported unwritten agreement
could not be made to vary or contradict the terms and conditions in the promissory
notes. Evidence of a prior or contemporaneous verbal agreement is generally not
admissible to vary, contradict or defeat the operation of a valid contract. While parol
evidence is admissible to explain the meaning of written contracts, it cannot serve the
purpose of incorporating into the contract additional contemporaneous conditions which
are not mentioned at all in writing, unless there has been fraud or mistake. No such
allegation had been made by the petitioners in this case.
Madrigal et al. v. CA et al. (G.R. No. 142944, April 15, 2005)

Facts:

In need of money, private respondent Mallari mortgage their house and lot to one of the
petitioner who is also his son, Virgilio. However, the deed was denominated as “Deed of
Absolute Sale.” Things turned for the worse to the unsuspecting Mallari when, without
his knowledge, his son Virgilio, sold the same property for the same amount to petitioner
Madrigal, a longtime neighbor of the Mallaris in the area. Hence, the complaint for
annulment, redemption and damages with prayer for injunction.

Issue:

Whether or not Parol Evidence Rule should apply.

Held:

No. To begin with, we cannot view the Deed of Absolute Sale in question in isolation of
the circumstances under which the same was executed by Virgilio’s parents, more so in
the light of his father’s disavowal of what the document, on its face, purports to state.
Then, too, there is the ruling of this Court in Lustan vs. CA to the effect that even if the
document appears to be a sale, parol evidence may be resorted to if the same does not
express the true intent of the parties.
Ortañes v. CA et al. (G.R. No. 107372, January 23, 1997)

Facts:

Private respondents sold to petitioner two (2) parcels of registered land. Private
respondents received the payments but failed to deliver the titles to petitioner. Thus, the
latter demanded from the former the delivery of said titles. Private respondents,
however, refused on the ground that the title of the first lot is in the possession of
another person, and petitioner's acquisition of the title of the other lot is subject to certain
conditions. Offshoot, petitioner sued private respondents for specific performance before
the RTC. In their answer with counterclaim private respondents merely alleged the
existence of oral conditions which were never reflected in the deeds of sale.
Issue:

Whether or not parol evidence is admissible.

Held:

No. The parol evidence 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.
Heirs of Pacres v. Heirs of Ygoña (G.R. No. 174719, May 5, 2010)

Facts:

Lot No. 9 is a 1,007 square meter parcel of land located at Kinasang-an,

Pardo, Cebu City and fronting the Cebu provincial 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 Veñaranda (herein
petitioner). Petitioners admitted that at the time of Pastor’s 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
Rodrigo’s hut (also fronting the provincial highway). Mario’s house stood at the back of
the ancestral house.[8] This is how the property stood in 1968, as confirmed by petitioner
Valentina’s 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 meters actually in possession and enjoyment by 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 Ramirez’s possession as lessee turned into a co-ownership with
petitioners Mario and Veñaranda, who did not sell their shares in the house and lot.
 On various dates in 1971, Rodrigo,[14] Francisco,[15] and Simplicia[16] sold their
remaining shares in Lot No. 9 to respondent Cecilia Ygoña (Ygoña). In 1983,
Margarita[17] also sold her share to Ygoña. The total area sold to Ygoña was 493 square
meters.
In 1984, Ygoña 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 Ygoña’s petition. By virtue of
such manifestation, the court issued a writ of possession[19] respecting Margarita’s and
Francisco’s shares in favor of Ygoña. It is by authority of this writ that Ygoña 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 Veñaranda, 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] on December 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 Ygoña built her house on Lot No. 9 in good faith
and it would be unjust to require her to remove her house thereon.

On June 18, 1993, the Republic of the Philippines, through the Department of
Public Works and Highways (DPWH), expropriated the front portion of Lot No. 9 for the
expansion of theCebu south road. The petition for expropriation was filed in Branch 9 of
the Regional Trial Court of Cebu City and docketed as Civil Case No. CEB-
14150.[23] As occupant of the expropriated portion, Ygoña 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 Ygoña remains unresolved.

On July 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, Cebu City 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 Veñaranda 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.

On September 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 Ramirez’s vendors are located.

The court dismissed Mario’s 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
his pro-indiviso shares 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 Performance

 On June 3, 1996, Veñaranda and the heirs of Mario filed the instant complaint for
specific performance[28] against Ygoña and Ramirez. Contrary to Mario’s allegations of
co-ownership over Lot No. 9 in the legal redemption case, Mario’s 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, Ygoña and Ramirez,
on the basis that the two were privy to these agreements, hence bound to comply
therewith. In compliance with such partition, Ygoña 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 Ygoña, whom they insist agreed to
additional, albeit unwritten, obligations other than the payment of the purchase price of
the shares in Lot No. 9. Veñaranda and Mario’s heirs insist that Ygoña 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 Ygoña. They cite as evidence of Ygoña’s 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 Valentina’s recollection of the actual occupation of the Pacres siblings,
their heirs and vendees. The sketch undermined petitioners’ allegation that the heirs
partitioned the property and immediately took possession of their allotted
lots/shares. Ygoña also denied ever agreeing to the additional obligations being imputed
against her.

Issues

Petitioners formulated the following issues:[34]

 1. Whether or not this complaint for specific performance, damages and
attorney’s 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

the P220,000.00 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:

I
Whether petitioners were able to prove the existence of the alleged oral
agreements such as the partition and the additional obligations of surveying
and titling

II
Whether the issue of ownership regarding the front portion of Lot No. 9
and entitlement to the expropriation payment may be resolved in this action

Our Ruling

Whether petitioners were able to prove the

existence of the alleged oral agreements such as
the partition and the additional obligations of
surveying and titling

Both 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 overlooked facts and circumstances that 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 CA’s 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 Ygoña 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 Pastor’s 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-interest’s 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 Veñaranda, described Lot No. 9 as a parcel of land that is co-owned by the
Pacres siblings pro indiviso. It was further alleged that Ygoña bought
the undivided shares 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 the actual occupants 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 Valentina’s 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 Ygoña, we likewise find that the trial and appellate courts
did not err in rejecting them. Petitioners allege that when Ygoña 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, Ygoña 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 Ygoña 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
stipulations pour 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 an oral stipulation, 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
stipulation pour autrui in 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 stipulation pour
autrui under a contract becomes a party to that contract.[48] This is why under Article
1311, a beneficiary of a stipulation pour autrui is required to communicate his acceptance
to the obligor before its revocation.

Moreover, to preclude the application of Parol Evidence Rule, it must be shown

that “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.”[49] A beneficiary of a
stipulation pour 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 stipulations pour 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 of Lot No. 9 and entitlement to the
expropriation payment may be resolved in this
action

Petitioners 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 Ygoña 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
respondent’s 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 court’s 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 is DENIED. 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.

SO ORDERED.
 [G.R. No. 139495. November 27, 2000.]

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), Petitioner, v. THE HON. COURT

OF APPEALS and VIRGINIA CHIONGBIAN, Respondents.

DECISION

GONZAGA-REYES, J.:

This Petition for Review on Certiorari seeks the reversal of the Decision of the Court of Appeals 1 in CA G.R.
CV No. 56495 entitled "Virginia Chiongbian v. Mactan-Cebu International Airport Authority" which affirmed
the Decision of the Regional Trial Court 2 , 7th Judicial Region, Branch 24, Cebu City. cralawli bra ry : red

The Court of Appeals rendered its decision based on the following facts: jgc:chan rob les.com. ph

"Subject of the action is Lot 941 consisting of 13,766 square meters located in Lahug, Cebu City, adjoining
the then Lahug Airport and covered by TCT No. 120366 of the Registry of Deeds of Cebu City, in the name
of MCIAA.

During the liberation, the Lahug Airport was occupied by the United States Army. Then, in 1947, it was
turned over to the Philippine Government through the Surplus Property Commission. Subsequently, it was
transferred to the Bureau of Aeronautics which was succeeded by the National Airports Corporation. When
the latter was dissolved, it was replaced by the Civil Aeronautics Administration (CAA).

On April 16, 1952, the Republic of the Philippines, represented by the CAA, filed an expropriation
proceeding, Civil Case No. R-1881 (Court of First Instance of Cebu, Third Branch), on several parcels of land
in Lahug, Cebu City, which included Lot 941, for the expansion and improvement of Lahug Airport.

In June 1953, appellee Virginia Chiongbian purchased Lot 941 from its original owner, Antonina Faborada,
the original defendant in the expropriation case, for P8,000.00. Subsequently, TCT No. 9919 was issued in
her name (Exh. D).

Then, on December 29, 1961, judgment was rendered in the expropriation case in favor of the Republic of
the Philippines which was made to pay Virginia Chiongbian the amount of P34,415.00 for Lot 941, with legal
interest computed from November 16, 1947, the date when the government begun using it. Virginia
Chiongbian did not appeal therefrom.

Thereafter, absolute title to Lot 941 was transferred to the Republic of the Philippines under TCT No. 27696
(Exhs. E and 2).

Then, in 1990, Republic Act No. 6958 was passed by Congress creating the Mactan-Cebu International
Airport Authority to which the assets of the Lahug Airport was transferred. Lot 941 was then transferred in
the name of MCIAA under TCT No. 120366 on May 8, 1992.

On July 24, 1995, Virginia Chiongbian filed a complaint for reconveyance of Lot 941 with the Regional Trial
Court of Cebu, Branch 9, docketed as Civil Case No. CEB-17650 alleging, that sometime in 1949, the
National Airport Corporation (NAC) ventured to expand the Cebu Lahug Airport. As a consequence, it sought
to acquire by expropriation or negotiated sale several parcels of lands adjoining the Lahug Airport, one of
which was Lot 941 owned by Virginia Chiongbian. Since she and other landowners could not agree with the
NAC’s offer for the compensation of their lands, a suit for eminent domain was instituted on April 16, 1952,
before the then Court of First Instance of Cebu (Branch III), against forty-five (45) landowners, including
Virginia Chiongbian, docketed as Civil Case No. R-1881, entitled "Republic of the Philippine v. Damian
Ouano, Et. Al." It was finally decided on December 29, 1961 in favor of the Republic of the Philippines.

Some of the defendants-landowners, namely, Milagros Urgello, Mamerto Escaño, Inc. and Ma. Atega Vda. de
Deen, appealed the decision to the Court of Appeals under CA-G.R. No. 33045-R, which rendered a modified
judgment allowing them to repurchase their expropriated properties. Virginia Chiongbian, on the other hand,
did not appeal and instead, accepted the compensation for Lot 941 in the amount of P34,415, upon the
assurance of the NAC that she or her heirs would be given the right of reconveyance for the same price once
the land would no longer be used as (sic) airport.
Consequently, TCT No. 9919 of Virginia Chiongbian was cancelled and TCT No. 27696 was issued in the
name of the Republic of the Philippines. Then, with the creation of the MCIAA, it was cancelled and TCT No.
120366 was issued in its name.

However, no expansion of the Lahug Airport was undertaken by MCIAA and its predecessors-in-interest. In
fact, when Mactan International Airport was opened for commercial flights, the Lahug Airport was closed at
the end of 1991 and all its airport activities were undertaken at and transferred to the Mactan International
Airport. Thus, the purpose for which Lot 941 was taken ceased to exist." 3

On June 3, 1997, the RTC rendered judgment in favor of the respondent Virginia Chiongbian (CHIONGBIAN)
the dispositive portion of the decision reads:jgc: chan roble s.com.p h

"WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in favor of the plaintiff,
Virginia Chiongbian and against the defendant, Mactan Cebu International Authority (MCIAA), ordering the
latter to restore to plaintiff the possession and ownership of the property denominated as Lot No. 941 upon
reimbursement of the expropriation price paid to plaintiff.

The Register of Deeds is therefore ordered to effect the Transfer of the Certificate Title from the defendant
to the plaintiff on Lot No. 941, cancelling Transfer Certificate of Title No. 120366 in the name of defendant
MCIAA and to issue a new title on the same lot in the name of Virginia Chiongbian.

No pronouncement as to cost.

SO ORDERED." 4

Aggrieved by the holding of the trial court, the petitioner Mactan Cebu International Airport Authority
(MCIAA) appealed the decision to the Court of Appeals, which affirmed the RTC decision. Motion for
Reconsideration was denied 5 hence this petition where MCIAA raises the following grounds in support of its
petition:
c hanrob1es vi rt ual 1aw li bra ry

I.

THE COURT OF APPEALS ERRED IN UPHOLDING THE TRIAL COURT’S JUDGMENT THAT THERE WAS A
REPURCHASE AGREEMENT AND IGNORING PETITIONER’S PROTESTATIONS THAT ADMISSION OF
RESPONDENT’S ORAL EVIDENCE IS NOT ALLOWED UNDER THE STATUE OF FRAUDS.

II.

THE COURT OF APPEALS ERRED IN HOLDING THAT THE DECISION IN LIMBACO IS MATERIAL AND
APPLICABLE TO THE CASE AT BAR.

III.

THE COURT OF APPEALS ERRED IN HOLDING THAT THE MODIFIED JUDGMENT IN CA-GR NO. 33045
SHOULD INURE TO THE BENEFIT OF CHIONGBIAN EVEN IF SHE WAS NOT A PARTY IN SAID APPEALED
CASE.

IV.

THE COURT OF APPEALS ERRED IN RULING THAT THE RIGHT OF VIRGINIA CHIONGBIAN TO REPURCHASE
SHOULD BE UNDER THE SAME TERMS AND CONDITIONS AS THE OTHER LANDOWNERS SUCH THAT HER
REPURCHASE PRICE IS ONLY P34, 415.00." 6

MCIAA contends that the Republic of the Philippines appropriated Lot No. 941 through expropriation
proceedings in Civil Case No. R-1881. The judgment rendered therein was unconditional and did not contain
a stipulation that ownership thereof would revert to CHIONGBIAN nor did it give CHIONGBIAN the right to
repurchase the same in the event the lot was no longer used for the purpose it was expropriated. Moreover,
CHIONGBIAN’s claim that there was a repurchase agreement is not supported by documentary evidence.
The mere fact that twenty six (26) other landowners repurchased their property located at the
aforementioned Lahug airport is of no consequence considering that said landowners were able to secure a
rider in their contracts entitling them to repurchase their property.

MCIAA also argues that the Court of Appeals erroneously concluded that it did not object to the evidence
presented by CHIONGBIAN to prove the alleged repurchase agreement considering that the transcript of
stenographic notes shows that it manifested its objections thereto for being in violation of the Statute of
Frauds.

MCIAA also faults the Court of Appeals for applying the ruling in the case of Limbaco v. Court of Appeals 7 .
It is the position of MCIAA that the ruling in the case of Limbaco is not squarely in point with respect to the
present case for the reason that the Limbaco case involved a contract of sale of real property and not an
expropriation.

Moreover, MCIAA alleges that the Court of Appeals erred in ruling that the case of Escaño, et. al. v. Republic
8 proves the existence of the repurchase agreement. MCIAA claims that although the parties in said case
were CHIONGBIAN’s co-defendants in Civil Case No. R-1881, CHIONGBIAN did not join in their appeal of the
judgment of condemnation. The modified judgment in CA G.R. No. 33045-R should not therefore redound to
CHIONGBIAN’s benefit who was no longer a party thereto or to the compromise agreement which Escaño et.
al. entered into with the Republic of the Philippines.
chan rob 1es vi rtua1 1aw 1ib rary

Finally, assuming for the sake of argument that CHIONGBIAN has a right to repurchase Lot No. 941, MCIAA
claims that the Court of Appeals erred in ruling that the right of CHIONGBIAN to purchase said lot should be
under the same terms and conditions given to the other landowners and not at the prevailing market price.
Such ruling is grossly unfair and would result in unjustly enriching CHIONGBIAN for the reason that she
received just compensation for the property at the time of its taking by the government and that the
property is now worth several hundreds of millions of pesos due to the improvements introduced by MCIAA.
9

On the other hand, aside from praying that this Court affirm the decision of the Court of Appeals, the private
respondent CHIONGBIAN prays that the petition be denied for the reason that it violates the 1997 Rules on
Civil Procedure, more specifically the requirement of a certification of non-forum shopping. CHIONGBIAN
claims that the Verification and Certification on Non-Forum Shopping executed by the MCIAA on September
13, 1999 was signed by a Colonel Marcelino A. Cordova whose appointment as Assistant General Manager of
MCIAA was disapproved by the Civil Service Commission as early as September 2, 1999. It is CHIONGBIAN’s
position that since his appointment was disapproved, the Verification attached to the petition for review
on certiorari cannot be considered as having been executed by the "plaintiff" or "principal party" who under
Section 5, Rule 7 of the Rules of Court can validly make the certification in the instant petition.
Consequently, the petition should be considered as not being verified and as such should not be considered
as having been filed at all.

After a careful consideration of the arguments presented by the parties, we resolve to grant the petition.

We first resolve the procedural issue.

We are not persuaded by CHIONGBIAN’s claim that the Verification and Certification against forum shopping
accompanying MCIAA’s petition was insufficient for allegedly having been signed by one who was not
qualified to do so. As pointed out by the MCIAA, Colonel Cordova signed the Verification and Certification
against forum shopping as Acting General Manager of the MCIAA, pursuant to Office Order No. 5322-99
dated September 10, 1999 issued by the General Manager of MCIAA, Alfonso Allere. 10 Colonel Cordova did
not sign the Verification and Certification against forum shopping pursuant to his appointment as assistant
General Manager of the MCIAA, which was later disapproved by the Commission on Appointments. This fact
has not been disputed by CHIONGBIAN.

We come now to the substantive aspects of the case wherein the issue to be resolved is whether the
abandonment of the public use for which Lot No. 941 was expropriated entitles CHIONGBIAN to reacquire it.

In Fery v. Municipality of Cabanatuan 11 , this Court had occasion to rule on the same issue as follows: jgc:chan rob les.com. ph

"The answer to that question depends upon the character of the title acquired by the expropriator, whether
it be the State, a province, a municipality, or a corporation which has the right to acquire property under the
power of eminent domain. If, for example, land is expropriated for a particular purpose, with the condition
that when that purpose is ended or abandoned the property shall return to its former owner, then, of
course, when the purpose is terminated or abandoned the former owner reacquires the property so
expropriated. If, for example, land is expropriated for a public street and the expropriation is granted upon
condition that the city can only use it for a public street, then, of course, when the city abandons its use as
a public street, it returns to the former owner, unless there is some statutory provision to the contrary.
Many other similar examples might be given. If, upon the contrary, however, the decree of expropriation
gives to the entity a fee simple title, then, of course, the land becomes the absolute property of the
expropriator, whether it be the State, a province, or municipality, and in that case the non-user does not
have the effect of defeating the title acquired by the expropriation proceedings. chan rob 1es vi rtua1 1aw 1ib rary

When land has been acquired for public use in fee simple, unconditionally, either by the exercise of eminent
domain or by purchase, the former owner retains no rights in the land, and the public use may be
abandoned, or the land may be devoted to a different use, without any impairment of the estate or title
acquired, or any reversion to the former owner. 12

In the present case, evidence reveals that Lot No. 941 was appropriated by the Republic of the Philippines
through expropriation proceedings in Civil Case No. R-1881. The dispositive portion of the decision in said
case reads insofar as pertinent as follows:jgc:chan roble s.com.p h

"IN VIEW OF THE FOREGOING, judgment is hereby rendered: c han rob1es v irt ual 1aw li bra ry

1. Declaring the expropriation of Lots Nos. 75, 76, 89, 90, 91, 105, 106, 107, 108, 104, 921-A, 88, 93, 913-
B, 72, 77, 916, 777-A, 918, 919, 920, 764-A, 988, 744-A, 745-A, 746, 747, 752-A, 263-A, 941, 942, 740-A,
743, 985, 956, 976-A, 984, 989-A; and 947, including in the Lahug Airport, Cebu City, justified and in lawful
exercise of the right of eminent domain;

2. Declaring the fair market values of the lots thus taken and condemning the plaintiff to pay the same to
the respective owners with legal interest from the dates indicated therein, as follows: Lots Nos. 75, 76, 89,
90, 91, 92, 105, 106, 107, 108-P31, 977 (minus P10,639 or P21,278 as balance in favor of Mamerto
Escaño, Inc., with legal interest from November 16, 1947 until fully paid; . . . Lot No. 941-P34,415.00 in
favor of Virginia Chiongbian, with legal interest from November 16, 1947 until fully paid; . . .

3. After the payment of the foregoing financial obligation to the landowners, directing the latter to deliver to
the plaintiff the corresponding Transfer Certificate of Title to their representative lots; and upon the
presentation of the said titles to the Register of Deeds, ordering the latter to cancel the same and to issue,
in lieu thereof, new Transfer Certificates of Title in the name of the plaintiff.

NO COST.

SO ORDERED." 13 (Emphasis supplied)

The terms of the judgment are clear and unequivocal and grant title to Lot No. 941 in fee simple to the
Republic of the Philippines. There was no condition imposed to the effect that the lot would return to
CHIONGBIAN or that CHIONGBIAN had a right to repurchase the same if the purpose for which it was
expropriated is ended or abandoned or if the property was to be used other than as the Lahug airport.

CHIONGBIAN cannot rely on the ruling in Mactan Cebu International Airport v. Court of Appeals 14 wherein
the presentation of parol evidence was allowed to prove the existence of a written agreement containing the
right to repurchase. Said case did not involve expropriation proceedings but a contract of sale. This Court
consequently allowed the presentation of parol evidence to prove the existence of an agreement allowing
the right of repurchase based on the following ratiocination: jgc:chan robles .com.p h

"Under the parol evidence rule, when the terms of an agreement have been reduced into 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.
However, a party may present evidence to modify, explain or add to the terms of the written agreement if
he puts in issue in his pleading, the failure of the written agreement to express the true intent of the parties
thereto. In the case at bench, the fact which private respondents seek to establish by parol evidence
consists of the agreement or representation made by the NAC that induced Inez Ouano to execute the deed
of sale; that the vendors and their heirs are given the right of repurchase should the government no longer
need the property. Where a parol contemporaneous agreement was the moving cause of the written
contract, or where the parol agreement forms part of the consideration of the written contract, and it
appears that the written contract was executed on the faith of the parol contract or representation, such
evidence is admissible. It is recognized that proof is admissible of any collateral parol agreement that is not
inconsistent with the terms of the written contract though it may relate to the same subject matter. The rule
excluding parol evidence to vary or contradict a writing does not extend so far as to preclude the admission
of existing evidence to show prior or contemporaneous collateral parol agreements between the parties, but
such evidence may be received, regardless of whether or not the written agreement contains any reference
to such collateral agreement, and whether the action is at law or in equity. chanrob 1es vi rtua 1 1aw 1ib rary

More importantly, no objection was made by petitioner when private respondents introduced evidence to
show the right of repurchase granted by the NAC to Inez Ouano. It has been repeatedly laid down as a rule
of evidence that a protest or objection against the admission of any evidence must be made at the proper
time, and if not so made, it will be understood to have been waived." 15

This pronouncement is not applicable to the present case since the parol evidence rule which provides that
"when the terms of a written 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" applies to written agreements and has no
application to a judgment of a court. To permit CHIONGBIAN to prove the existence of a compromise
settlement which she claims to have entered into with the Republic of the Philippines prior to the rendition of
judgment in the expropriation case would result in a modification of the judgment of a court which has long
become final and executory. chanrob1e s virtua1 1aw 1ib rary

And even assuming for the sake of argument that CHIONGBIAN could prove the existence of the alleged
written agreement acknowledging her right to repurchase Lot No. 941 through parol evidence, the Court of
Appeals erred in holding that the evidence presented by CHIONGBIAN was admissible.

Under 1403 of the Civil Code, a contract for the sale of real property shall be unenforceable unless the
same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his
agent; evidence, therefore of the agreement cannot be received without the writing or a secondary evidence
of its contents.

Contrary to the finding of the Court of Appeals, the records reveal that MCIAA objected to the purpose for
which the testimonies of CHIONGBIAN 16 and Patrosinio Berceder 17 (BERCEDE) were offered, i.e. to prove
the existence of the alleged written agreement evincing a right to repurchase Lot No. 941 in favor of
CHIONGBIAN, for being in violation of the Statute of Frauds. MCIAA also objected to the purpose for which
the testimony of Attorney Manuel Pastrana (PASTRANA) was offered, i.e. to prove the existence of the
alleged written agreement and an alleged deed of sale, on the same ground. 18 Consequently, the
testimonies of these witnesses are inadmissible under the Statute of Frauds to prove the existence of the
alleged sale.

Aside from being inadmissible under the provisions of the Statute of Frauds, CHIONGBIAN’s and BERCEDE’s
testimonies are also inadmissible for being hearsay in nature. Evidence is hearsay if its probative value is
not based on the personal knowledge of the witness but on the knowledge of another person who is not on
the witness stand. 19 CHIONGBIAN, through deposition, testified that: jgc:chan robles .com.p h

"ATTY. DUBLIN (To Witness)

Q: Mrs. Chiongbian, you said a while ago that there was an assurance by the government to return this
property to you in case Lahug Airport will be no longer used, is that correct?

WITNESS: chanrob1e s virtual 1aw l ibra ry

A: Yes, sir. That is true.

ATTY. DUBLIN: (To witness)

Q: Can you recall when was this verbal assurance made?

A: I cannot remember anymore.

Q: You cannot also remember the year in which the alleged assurance was made?
A: I cannot also remember because I’m very forgetful.

Q: Now, can you tell us so far as you can remember who was that person or government authority or
employee that made the alleged assurance?

A: The owner of the property.

Q: Now, how many times was this assurance being made to you to return this property in case the Lahug
Airport will no longer be used?

A: 2 or 3, I cannot recall.

Q: You cannot also remember in what particular place or places was this assurance being made?

A: In my previous residence in Mabolo.

DEPOSITION OFFICER: chanro b1es vi rtua l 1aw li bra ry

The assurance was made in my previous residence at Mabolo.

WITNESS: chanrob1e s virtual 1aw l ibra ry

A: I entrusted that to my lawyer, Atty. Pedro Calderon. chanrob 1es virtua1 1aw 1 ibra ry

ATTY. DUBLIN: (to witness)

Q: You mean the assurance was made personally to your lawyer at that time, Atty. Pedro Calderon?

A: Yes, sir.

Q: So you are now trying to tell us that that assurance was never made to you personally. Is that right,
Ma’m?

A: He assured me directly that the property will be returned to me.

Q: When you said "he", are you referring to your lawyer at that time, Atty. Pedro Calderon

A: Yes, sir.

Q: So, in effect, it was your lawyer, Atty. Pedro Calderon, who made the assurance to you that the property
will be returned in case Lahug Airport will be abandoned?

A: Yes, sir. 20

CHIONGBIAN’s testimony shows that she had no personal knowledge of the alleged assurance made by the
Republic of the Philippines that Lot No. 941 would be returned to her in the event that the Lahug Airport was
closed. She stated that she only learned of the alleged assurance of the Republic of the Philippines through
her lawyer Attorney Calderon, who was not presented as a witness.

BERCEDE’s testimony regarding the alleged agreement is likewise inadmissible to prove the existence of the
agreement for also being hearsay in nature. Like CHIONGBIAN, BERCEDE did not have personal knowledge
of the alleged assurance made by the Republic of the Philippines to his father that their land would be
returned should the Lahug Airport cease to operate for he only learned of the alleged assurance through his
father.

PASTRANA’s testimony does little to help CHIONGBIAN’s cause. He claims that subsequent to the execution
of the alleged written agreement but prior to the rendition of judgment in the expropriation case, the
Republic and CHIONGBIAN executed a Deed of Sale over Lot No. 941 wherein CHIONGBIAN sold the
aforementioned lot to the Republic of the Philippines. However, CHIONGBIAN never mentioned the existence
of a deed of sale. 21 In fact, the records disclose that Lot No. 941 was transferred to the Republic of the
Philippines pursuant to the judgment of expropriation in Civil Case No. R-1881 which CHIONGBIAN herself
enforced by filing a motion for withdrawal of the money after the decision was rendered. 22 Moreover, since
the very terms of the judgment in Civil Case No. R-1881 are silent regarding the alleged deed of sale or of
the alleged written agreement acknowledging the right of CHIONGBIAN to repurchase Lot No. 941, the only
logical conclusion is that no sale in fact took place and that no compromise agreement was executed prior to
the rendition of the judgment. Had CHIONGBIAN and the Republic executed a contract of sale as claimed by
PASTRANA, the Republic of the Philippines would not have needed to pursue the expropriation case
inasmuch as it would be duplicitous and would result in the Republic of the Philippines expropriating
something it had already owned. Expropriation lies only when it is made necessary by the opposition of the
owner to the sale or by the lack of agreement as to the price. 23 Consequently, CHIONGBIAN cannot compel
MCIAA to reconvey Lot No. 941 to her since she has no cause of action against MCIAA. chanrob1es vi rtua1 1aw lib rary

Finally, CHIONGBIAN cannot invoke the modified judgment of the Court of Appeals in the case of Republic of
the Philippines v. Escaño, et. al. 24 where her co-defendants, Mamerto Escaño, Inc., Milagros Urgello and
Maria Atega Vda. De Deen entered into separate and distinct compromise agreements with the Republic of
the Philippines wherein they agreed to sell their land subject of the expropriation proceedings to the latter
subject to the resolutory condition that in the event the Republic of the Philippines no longer uses said
property as an airport, title and ownership of said property shall revert to its respective owners upon
reimbursement of the price paid therefor without interest. MCIAA correctly points out that since
CHIONGBIAN did not appeal the judgment of expropriation in Civil Case No. R-1881 and was not a party to
the appeal of her co-defendants, the judgment therein cannot redound to her benefit. And even assuming
that CHIONGBIAN was a party to the appeal, she was not a party to the compromise agreements entered
into by her co-defendants. A compromise is a contract whereby the parties, by making reciprocal
concessions, avoid litigation or put an end to one already commenced. 25 Essentially, it is a contract
perfected by mere consent, the latter being manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute the contract. 26 A judicial compromise has the force of law
and is conclusive between the parties 27 and it is not valid and binding on a party who did not sign the
same. 28 Since CHIONGBIAN was not a party to the compromise agreements, she cannot legally invoke the
same.

ACCORDINGLY, the Decision of the Court of Appeals is hereby REVERSED and SET ASIDE. The complaint of
Virgina Chiongbian against the Mactan-Cebu International Airport Authority for reconveyance of Lot No. 941
is DISMISSED.

SO ORDERED.