29. G.R. No.

203610, October 10, 2016

REPUBLIC OF THE PHILIPPINES AND HUDCC Petitioners, v. 

GONZALO ROQUE, JR, et. al., Respondent.

Facts:

In 1978, when martial law was in force, the Republic, through DPWH, asked the
respondents to sell a portion of their land at a price lower than the market value for the
National Government Center (NGC) Project. The respondents agreed on Republic’s
representation that the Project would eventually enhance the value of the surrounding
portions of the land that they still own and that, if it abandons the project, they will have
the right to buy back the land. New titles were then issued in the Republic’s name.

After several years, informal settlers began to occupy parts of the land, and the
respondents learned that the properties would be used for socialized housing, hence,
respondents filed a complaint for the annulment of the sale of the properties on the
ground of fraud and asserted their right to repurchase after the Republic abandoned the
NGC Project.

Republic invoked its immunity from suit and that no such conditions were agreed upon.

RTC annulled the deeds on the ground of fraud giving credence to the Assistant City
Assessor’s, and Roque's testimonies about the matters discussed during negotiations.

The Republic invoked the parol evidence rule in arguing that the sale had no conditions but
the CA noted that the case is an exception to the parol evidence rule since the written
agreement failed to express the parties' true intent.

Issue: WON parol evidence of Gonzalo and Viloria's testimonies are admissible to establish
the alleged oral conditions in the sale contract.

Held: No, the testimonies are inadmissible under the parol evidence rule. The Rules
provides that a written contract is deemed to contain all the terms agreed upon by the
parties and no evidence of these terms is admissible other than the contents of the
contract.

Respondents failed to present copies of the deeds of sale to show that the sale was attended
by the alleged conditions. Pursuant to the rule, no evidence of contractual terms is
admissible other than the contract itself.

Furthermore, the respondents failed to put in issue in their pleadings the contract's failure
to express the parties' agreement. Hence, the exception was not squarely presented as an
issue for the court to hear evidence on it. The second exception to the parol evidence rule
applies only when the written contract is so ambiguous or obscure in terms that the
parties' contractual intention cannot be understood from a mere reading of the agreement.
In the present case, the respondents failed to allege that the terms of the deeds of sale are
ambiguous or obscure to require the presentation of parol evidence to ascertain the parties'
intent.