AUGUSTIN Speciif cperdormances

Oral contract where Augustin was to construct on the land of Zimer

Ziemer was to convey the presmises to him for 500 per acre and the actual cost of the
improcement- monthly insrallments

Simer refused to convey – landlalor d and tenant not odsale

Augustin possession as soon as the construction completed

RTC: oral contract for deed was followed buy such part performance to take it out fro
the staute of frauds

24 receipts as zimer claims were rental receipts

Augustin offered the receipts in evidence abnd testified

Redeipt state: marked rent – no other receipt book

RECEIPT IS VALID TO BE INTRODUCED VIA PAROL EVID

Bc receipt is not contractual nature
LECHUGAS Lechugas v. lozas
Forcible entry – middle and northern portion of owner’s lot
Dismissed complaint

Lechugas appelaed to RTC

While pending pappeal, another case was filed by lecguhas
Recovery and possessiin of the same property

Jointly tried 2 cases – dismissed both

Ca dismissed did not give credence to Leoncia’s testimony

Sc:lechugas introduced evid of deed of sale by leoncia lasangue

Loxas: lechugas bought from leoncia is fiff from the land now subject of the action

Loxas called leocnia as witness who testified the the land of deed of sale is diff

LOT 5522

PAROL EVID IS NOT APPLICABLE

One of the parties & third party document – not parole vid-able
MARTIN Setter and martin – tentative agreement to trade farms
1600 acre Canada – setter
360 acre martin Dakota

Aj Rieger
Denny

Before the agreement was reduced into writing setter got married
Martin vosited seteter farm and another contract was made – on wiritng by not
assigned by mrs setter
Where the encumrbances were reduced

Setter failed to pay the reduced encumbrances hence agreemen3 was made which was
signed by all parties
Money payment was advanced by marti so setter can pay agreement
Martin wasdirected to transfer lfarm to mrs setter not msetter

[Sutter gave a note secured by a mortgage to Martin. Sutter defaulted, so Martin filed a case to
retrieve the mortgaged property so that it could be foreclosed.]

Setter defaulted in patyment of note and the property was foreclosed

Setter filed a counterclialim for damages for alleged misrepresenteation of the market
value of martin’s farm in dajkota

Setter also filed damages against reiger bc Rieger induced him to buy the farm and
misrepresente the true value

COMPREOMOSE AGRREMENT BETWEEN SETTER AND REIGER

Where riegel was to pay 4k

Martin filed a supplemental reply with a different jury alleging that because of the release given
to Rieger in case 2, the same should also release him of any liability as a joint tortfeaser

Sutter was allowed to prove that he did not intend to settle or compromise his cause of action,
and that instead the money received from the settlement and release of Rieger from liability was
so that he could apply his cause of action against Martin

NOT ADMISSIBLE PAROL EVID

75. The tort which Setter claims damages was misrepresentation in inducing the trade of the
farms and equipment. Comparing the allegations of Setter in his answer in this action
(Case 1) with the allegations of the complaint against Rieger (Case 2), the cause of
action asserted by Setter was one and the same in both suits.

76. Rieger and Martin participated in the tort which caused damages to Setter.

75. the parol evidence rule does not ordinarily apply between
strangers to the instrument, or between a party and a
stranger, but it does apply to a stranger who seeks to enforce
rights based on the instrument.

It seems clear that when for a consideration Setter settled and

 compromised their cause of action for damages against Rieger and the
release was executed and delivered, it at once discharged not only Rieger but
also his joint tortfoasors, Martin, from the same cause of action
pending against them.

84. Parol evidence was inadmissible to vary the legal effect of that
stipulation and release as to anyone already discharged thereunder.
LADESCO Spec perf

Land Settlement and Development Corporation, against the Garcia Plantation Co., Inc. and/or Salud C. De
Garcia and Vicente B. Garcia, for the recovery of the sum of P5,955.30, representing the unpaid balance of
the purchase price of two tractors,

Salud as co-defendant because of two promissory notes executed by her,

Admitted executing pN but said that novated agreement

Exhbibit L: Kintanar, Manager, Board of Liquidators of the LASEDECO, giving the defendant Salud C.
de Garcia an extension up to May 31, 1957, within which to pay the account, and since the complaint
was filed on February 20, 1957, they claimed that the action was premature and prayed that the
complaint be dismissed.

LADESCO adit execution of letter but it did not truly express the intent of the parties

TRIAL introduced by ladesco: Guinto, Legal Officer of the Board of Liquidators, to testify on the
true agreement and the intention of the parties at the time the letter

RTC: rule out testimony and sismised the case ofr beinf rpematuture

RTC ERRED IN NOT HAVING ADMITTED PAROL EVID OF TETIMONY

The fact that the letter Exhibit L, failed "to express the true intent and agreement of the parties", Section
22, Rule 123, had been put in issue by the Answe

The parol evidence consisted of the testimony of Attys. Guinto and Kintanar, to the effect that in view of
the plea of defendant Vicente B. Garcia to give the defendants an extension of time to pay their accounts,

Atty. Kintanar gave the defendants up to May 31, 1957, to coincide with their ramie harvest "provided that
they will make a substantial down payment immediately, with the understanding that upon non-payment of
the substantial amount, the extension shall be deemed as not granted and the LASEDECO shall feel free to
seek redress in court". That there was such condition precedent

This is not varying the terms of the written contract by extrinsic agreement, for the simple reason that there
is no contract in existence; there is nothing to which to apply the excluding rule

EXHIBIT L NEVER TOOK EFFEC

PNB V, SEETO Seeto branch pnb Surigao presented a check of 5k
Drawn by gan yek
Drawee: pbcom
Payee: benito seeto
Colleting bank: pnb suirgao
 PNBA CCEPTED: Seeto made a general and unqualified indorsement of the check. PNB accepted it
and paid Seeto the amount of P5000

Check given to pnb march 20 but presented to drawee bank only on April 9 – check was
dishonored for insurffiencit funds

Onb branch immediately sent a letter to Seeto demanding immediate refund of the value of the check

Thereafter, Seeto refused to make the refund demanded, claiming that at the time of the negotiation of the
check the drawer had sufficient funds in the drawee bank, and that had the petitioner’s Surigao agency not
delayed to forward the check until the drawer’s funds were exhausted, the same wouldhave been paid.

PNB SUIT: based on the arruancces fseto gave

PNB submitted two witnesses at the time of the trial, who testified that it was not the practice of PNB’s
agency to cash out of town checks, and that the check was cashed because of the assurances given by Seeto
that the drawer had sufficient funds, and that he Seeto would refund the amount paid by petitioner’s
agency in case the check is dishonored.

Cfi: codsidered tesitmoney: no unreasonable delay & as the drawee bank is not in Cebu, it was impossible
for PNB’s agency to make an immediate verification of the drawer’s solvency, and must have taken
precautions to protect itself against loss by requiring the Seeto to give assurances that he would return the
amount of the check in case of nonpayment.

CA REVERSED on appeal

The issue before the SC is whether the CA erred in not admitting the parole evidence - YES, an
independent or collateral agreement which constituted an inducement to the making of the sale or part of
the consideration therefor. Any prior or contemporaneous conversation in connection with a note or its
indorsement, may be proved by parol evidence. An extrinsic agreement between indorser and indorsee
which can not be embodied in the instrument without impairing its credit is provable by parol.

1. If, therefore, the supposed assurances that the drawer had funds and that the Seeto would refund
the amount of the check if the drawer had no funds, were the considerations or reasons that
induced the branch agency of PNB to go out of its ordinary practice of not cashing out of town
checks and accept the check and to pay its face value, the same should be provable by
parol, provided, of course, that the assurances or inducements
offered would not vary, alter, or destroy the obligations attached by
law to the indorsement.

BUT NOTE that although CA failed to admit the parole evidence, Seeto is still discharged from liability
due to unreasonable delay in the presentation of the check for payment.
ROBLES LIZARRAGA HERMANOS is a mercantile partnership - byer

Robles instituted an action against firm Lizarraga Hermanos (FIRM) for the
recovery of compensation of the improvements made supplied by Robles to hacienda
“Nahalinan,”
 The hacienda belonged originally to the parents of the ROBLES. Upon the death of the Father,
the Mother leased the property to ROBLES for 6 years. It was stipulated that any permanent
improvements necessary to the cultivation and exploitation of the hacienda should be made at the
expense of the lessee without right to indemnity at the end of the term.

Robles made inmprovements on his expense

When the mother of ROBLES died, the FIRM proposed to buy all the properties of the Robles
estate (part of which is the subject property leased). However, the remaining 2 years of the lease
contract became an obstacle with the negotiations of the sale.

The lease contract aroused a conflict between the two. As found by the trial court, ROBLES and
FIRM agreed that in consideration of the shortening of the lease period, the FIRM would
pay the value of all the improvements made by the ROBLES.

An instrument of conveyance was accordingly executed however, in this instrument there was no
reference the improvements or properties placed by ROBLES in the hacienda.

The FIRM promised to compensate ROBLES the improvements and to purchase the existing
crop, together with the cattle and other farm things. But this promise was never reduced into
writing

. ROBLES introduced in evidence only a letter written by Severiano Lizarraga to the him, in
which reference is made to an appraisal and liquidation.

The issue is whether the trial court was correct in finding that FIRM has an
obligation to pay the improvements hinging on the oral evidence presented
by ROBLES? YES. It has accordingly been held that, in case of a written contract of lease, the
lessee may prove an independent verbal agreement on the part of the landlord to put the leased
premises in a safe condition; and a vendor of realty may show by parol evidence that crops
growing on the land were reserved, though no such reservation was made in the deed of
conveyance.

Parol evidanceale since not inconsitstent with the written rems ot eh contract – but orla
related to same subject matter

5. it is a collateral to the written contract, notwithstanding the fact that it deals with
related matters.

the deed of conveyance purports to transfer to the FIRM only such interests in certain properties
as had come to the conveyors by inheritance. Nothing is said concerning the rights in the
hacienda which ROBLES had acquired by lease or concerning the things that he had placed
thereon by way of improvement or had acquired by purchase. The verbal contract which the
ROBLES has established in this case is therefore clearly independent of the main contract of
conveyance, and evidence of such verbal contract is admissible under the doctrine above stated.
MITCHILL Laths owned a farm which they wanted to sell. Across the road, on a land belonging to
Lieutenant-Governor Lunn, they had an ice house.

78. Mrs. Mitchell wanted to purchase the land, but she found the ice house objectionable.
 79. Laths orally promised and agreed, for and in consideration of the purchase of their farm, to
remove the ice house in spring of 1924. Because of this, Mrs. Mitchill made a written contract to
buy the property for $8,400

After receiving a deed, Mrs. Mitchill entered into possession and spent money improving the
land. However, the Laths had not fulfilled their promise to remove the ice house and they don’t
intend to do so.

81. Mitchill then sued for specific performance

WoN the oral agreement to remove the ice house is enforceable? NO.

An oral agreement to modify a written contract is only enforceable if all the following are true:

(1) Oral agreement must be collateral in form;

(2) Oral agreement must not contradict any express or implied provisions of the written contract;
and

(3) Oral agreement must be of the type the parties would not ordinarily expect to put into writing.

In other words, the written agreement on its face must not appear to contain the complete
agreement of the parties.

The oral agreement fails on the 3rd requirement.

The written contract contains a lot of provisions, but nothing about removing the ice house. The
written contract appears on its face to contain the all the responsibilities of each side. An
objective observer would expect that if the parties really agreed about the ice house that they
would have included something about it in the contract.
LAUREANO Laureano executed and delivered to Kilayco a conveyance of certain lands as well as 186 shares
of common stock of the El Hogar Filipino corporation.

The conveyance (written document) stated that the consideration for said conveyance was
P49,550.

In a complaint filed by Laureano against Kilayco, she alleged that “not a cent of the said
consideration was ever paid to her or was agreed or intended to be paid.”
[Laureano was alleging that despite what was written in the conveyance, there was really no
agreement for Kilayco to pay for the properties.]

Laureano and Kilayco had a collateral oral agreement that Kilayco would agree to hold and
administer the property conveyed to him, to make payments for and in behalf of Laureano out of
the rents and profits thereof, and to reconvey the property described in the conveyance on
demand. Laureano said that Kilayco agreed to make monthly payments to El Hogar Filipino to
reduce the debt Laureano owed to the corporation.

Kilayco did not recnvery upon demand - He didn’t make the payments to El Hogar Filipino
as well and converted the proceeds of the rents, issues and profits to his own benefit.
 At lower court: kilayco objected to the oral testimony ofere by Laureano bc it tended to
modify the terms of the written agreementKilayco won in the trial court and the lower
court excluded tsitmony

The evidence excluded was not offered for the purpose of varying the terms of the conveyance
between the parties but to show a contemporaneous collateral agreement
by which the conveyance could be defeated and terminated. It is a well
known principle in law that oral evidence is admissible to show that a conveyance, absolute in
form, is in fact a mortgage.

The purpose of the introduction of parol evidence to show lack of consideration is not for the
purpose of showing the invalidity of the conveyance itself; it is introduced to
reinforce the claim that there was an agreement to reconvey
YU TEK Yu tek: creditor

Gonzales: debtor

Loan of money of 3k – delivever 600 piculs of sugar in 1st and 2nd grade

Ehbit a

(1) That Mr. Basilio Gonzales (Gonzalez) hereby acknowledges receipt of the sum of P3,000 Phil.
Currency from Messrs. Yu Tek & Co. (Yu Tek), and that in consideration of said sum he obligates himself
st nd
to deliver to Yu Tek., 600 piculs of sugar of the 1 and 2 grade, according to the
result of the polarization,

(2) That the said Gonzalez obligates himself to deliver to Yu Tek of this city the said 600 piculs of sugar at
any place within the municipality of Santa Rosa which Yu Tek or a representative of the same may
designate.

c. (3) That in case Gonzalez does not deliver to Yu Tek the 600 piculs of sugar within the period of 3
nd
mos, referred to in the 2 par. of this document, this contract will be rescinded and Gonzalez will then be
obligated to return to Yu Tek the P3,000 received

Yu Tek proved that no sugar had been delivered to it under the contract nor had it been able to receive the
3k. --- Yu Tek prayed for judgment for the 3k and in addition, 1,200 based on the contract.

Gonzales argument: sugar was to be secured from the crop which Gonzalez raised on in
his plantation and that he was unable to fulfill the contract by reason of the almost total
failure of his crop.

3. Nowhere was it stated or intimated in the contract that the sugar was to be raised by Gonzalez.
While parol evidence is admissibile in a variety of ways 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 the writing, unless there
has been fraud or mistake.

In this case, what was sought to show was that the sugar was to be obtained exclusively from the crop
raised by Gonzalez.

1. There is no clause in the written contract which even remotely suggests

such a condition.

2. Gonzalez undertook to deliver a specified quantity of sugar within a specified time.

 3. The contract placed no restriction on Gonzalez in the matter of
obtaining the sugar. He was equally at liberty to purchase it on the
market or raise it himself.

NO PERFECTED SALE Bc no specific appropriation for sugar: BUT SC thinks that this is a case of
liquidated damages. The contract plainly states that if the Gonzalez fails to deliver the 600 piculs of sugar
within the time agreed, the contract will be rescinded and he will be obliged to return the P3,000 and pay
the sum of P1,200 by way of indemnity for loss and damages.
PALANCA Song Fo & Co., of Manila, through its manager, Carlos Palanca, entered into a contract with Fred
Wilson & Co. for the purchase of a distilling apparatus for P10k

Wilson & Co. ordered the apparatus of Turner, Schon & Co.,

about 5 months after the machine was installed, Palanca wrote Wilson & Co. that the rectifying
machine had been examined by a number of competent persons who stated that the machine was
not capable of producing the amount of alcohol

The amout of alcohol was stipulated in the contract, which is the

center of the case57

Clause 1: Un aparato 'Guillaume' para la destilacion-recti cacion directa y continua; tipo 'C,' Agricola,
de una capacidad de 6,000 litros cada 24 horas de trabajo, de un grado de 96-97 Gay Lussac, todo segun el
grabado de la pagina 30 del catalogo Egrot, edicion de 1907 (A 'Guillaume' device for direct
and continuous direct-distillation; type 'C,' Agricola, with a capacity of
6,000 liters per 24 working hours, of a grade of 96-97 Gay Lussac, all
according to the engraving on page 30 of the Egrot catalog, edition of 1907
– based on google translate)

97. hENCE, SONGO fo action for damages for breach of contract was begun in the CFI of
Manila, praying:

a. First, that Wilson & Co. be ordered to comply strictly with the terms of the contract

b. Second, that Wilson & Co., be ordered to pay P16,713.80 as damages

98. Wilson & Co. answered with a general denial and cross-complaint asking judgment
against Palanca in the sum of P5k, the final installment claimed to be due as the purchase
price of the machine

99. Judge Ostrand of the CFI ordered that Palanca take nothing but his action (what does
that even mean? Like “uwi ka na lang” ganun??) and that Wilson & Co.
recover the P5k,

In the first place, it is undeniable from the evidence, that the apparatus is question, while it could
treat 6000L of raw material a day, did not produce 6,000L a day - only something over 480 liters
a day or rectified alcohol of the required grade.

Palanca asserts that there has been a breach of contract According to Palanca, the clause could
not possibly mean that the machine was only to take in 6,000L for this would be improbably in
view of the word "capacity" as indicating receptivity and on the preliminary negotiations as
explaining the intention of the parties

Palanca also testified that he asked for a machine that could produce 6kL a day. Agent of Wilson
 said that Palanca asked him to get a machine that could treat 6kL.

Due to the ambiguity, two approaches must be done.

First, take up the meaning of the words themselves.

Second, apply Sec. 285 of the CivPro (doctrine). The terms of the contract disclose the ff.
essential constitutes: (a) A machine Guillaume, type C (Agricola) as described on p. 30 of the
Catalogue Egrot, ed. 1907, (b) A machine of a capacity of 6k L for every 24 hours of work, (c) A
machine producing alcohol of a grade 96-97 Gay Lussac. Type C (Agricola) as described on
pages 30-31 mentiones the grade of alcohol guaranteed of 96-97 Gay Lusaac, but contains to
mention of a capacity of 6k L a day.

Wilson sold the machine as described in the catalogue. So for the capacity part. As provided by
an American case and the ordinary meaning of the word in English and in Spanish, there is an
ambiguity with the real meaning of the term in the comnntract

So the court applied Sec. 285 and looked at the other circumstances. Wilson sold what was
provided in their catalogue and with the same description. The description did not say it can treat
6kL a day. Also, as stated in the trial, and it was not denied, that the price of a machine that could
treat 6kL a day, is around 35-40k. Here, it was only for 10k. So the court ruled in favor of Wilson
and Palanca (rep of Song Fo) is ordered to pay the 5k.
ACI PHIL Petitioner ACI Philippines, Inc. is engaged in the business of manufacturing
fiberglass, which is used in both commercial and industrial equipment for thermal and acoustic
insulation. In 1993, it ceased from using silica sand in the manufacture of fiberglass and started
using instead recycled broken glass or flint cullets to save on manufacturing costs

ACI contracted with Respondent Editha C. Coquia 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

ACI demanded the reduction of the purchase price from P4.20 per
kilo to P3.65 per kilo to which Coquia acceded allegedly under duress.
ACI issued PO No. 106373 explicitly superseding PO No. 106211.
Deliveries were again made by respondent on 5, 8 and 12 November 1994 under Delivery
Receipt Nos. 901, 719 and 735, respectively. ACI 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.

Coquia filed a Complaint for specific performance and damages

against ACI seeking payment for the deliveries made under Delivery Receipt Nos. 901, 719
and 735, amounting to 46,390 kilos at the renegotiated price of P3.65 per kilo

three (3) days after the complaint was filed, ACI paid for the flint cullets under
Delivery Receipt Nos. 901, 719 and 735 at the unit price of P3.65 per kilo.

Trial Court ruled in favor of Coquia, ordered ACI to accept deliveries of the flint cullets
contracted for under PO No. 106211 and to pay for the said deliveries within ten (10) days from
each delivery at the unit price of P4.20 per kilo.

CA: affirmed the CA held that PO No. 106211 is a contract of adhesion

whose terms must be strictly construed against ACI.

ACI claims that the CA erred in ruling that PO No. 106211 is a contract of adhesion despite the
fact that Coquia is an established businesswoman who has the freedom to negotiate the terms and
conditions of any contract she enters into. It stresses that PO No. 106211 was superseded by PO
No. 106373 and that in both contracts, it was made clear to Coquia that her
assurance of prompt delivery of the flint cullets motivated the
transaction. ACI asserts that the CA erred in affirming the trial court's decision which
compelled it to accept and pay for the deliveries at the price of P4.20 per kilo

Coquia’s comment stated that ACI appears to have shut down its operations and merely reiterates
her position that PO No. 106373 was a product of intimidation practiced upon her by ACI.

In ACI’s Reply, asserts that its juridical personality continues to subsist and changed corporate
name from ACI Philippines, Inc. to Asia Pacific Insulation Corporation

the CA erroneously refused to receive evidence aliunde to prove

that time was an important element of the agreement.

Not a contract of adhesion

There is every indication in this case that Coquia, a presumably astute

businesswoman who has dealings with big corporations such as La
Tondeña as the latter's sole buyer of cullets and has the financial savvy to obtain a loan from a
bank, gave her assent to PO No. 106211 with full knowledge. Coquia was, in fact, the
one who sought a contract with ACI

Futher Condition 4 of the conditions work as an disadvantage

against ACI.: Delivery of the goods must be made at the Purchaser's address shown on the
face of this order or as otherwise directed, on a working day between the hours of 8:00 and 3:30
p.m. Until delivery the goods shall be at the Vendor's risk. Any delivery date shown
on this order shall be of the essence of any contract arising. Delivery
must be made in strict accordance with the order or delivery schedule and any quantities
delivered in excess of that specified on the order may be returned by the Purchaser at the
Vendor's risk and expense.

PO No. 106211, however, is unusually silent as to the date the flint

cullets are needed. – PO SILENT IN DELI DATE

ACI remedied this inadvertence by squarely raising the failure of the

purchase order to express the true intent of the parties, i.e., that
petitioner entered into a contract with respondent conditioned upon
the latter's prompt delivery of flint cullets, as an issue in its Answer
with Counterclaims.

In the testimony of Coquia, the SC found that although she was not given definite days during
which she should deliver the flint cullets, she was indeed apprised of ACI's urgent need for large
quantities thereof. Furthermore, ACI 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 Coquia assured it of prompt deliveries
sufficient for ACI's production requirements.
 Aci not bound to accept additional amount: By acquiescing to the new PO
which no longer indicated a specific quantity of flint cullets to be
delivered, Coquia knew or should be presumed to have known that
deliveries made thereafter were no longer meant to complete the
original quantity contracted for under PO No. 106211. NEW PO which
did indicate the reduced unit price but did not mention the quantity to be delivered.
SEAOIL Seaoil purchased one unit of Robex 200 LC Excavator, Model 1994 from Autcorp Group. It was
embodied in a Vehicle Sales Invoice and Vehicle Sales Information [Transaction 1].

Both documents were signed by President of Seaoil, on behalf of Seaoil. It was agreed that
ownership was to remain with Autcorp until obligation is fully settled.

Seaoil’s contractor, Romeo Valera, issued 12 postdated checks to Autorcorp. However, Autocorp
refused to accept the checks because they were not under Seaoil’s name. Hence, Yu, on behalf of
Seaoil, signed and issued 12 postdated checks for P259,376.62 each with Autocorp as payee.

The remaining 10 checks was not honored by the bank because Seaoil requested that the payment
be stopped.

The excavator was subsequently delivered on September 26, 1994 by Autocorp and was received
by Seaoil in its depot in Batangas. The first check bounced. However, it was remedied when
Seaoil replaced it with a good check. The second check likewise was also good when presented
for payment. However, the remaining 10 checks were not honored by the bank since Seaoil
requested that payment be stopped. Despite repeated demands, Seaoil refused to pay the
remaining balance of P2,593,766.20.

As a defense, Seaoil claims that the real transaction is that Uniline, through Rodriguez (a
stockholder of Autocorp and owner of Uniline), owed money to Focus (owned by Yu) as proven
by a Lease Purchase Agreement [Transaction 2]. Uniline chartered MV Asia property from its
owner, Focus. In lieu of payment, Uniline proposed to settle through conveyance of vehicles and
heavy equipment. The excavator in controversy was allegedly one part of the vehicles conveyed
to Focus as partial payment. This was to be paid by the 12 checks issued by Seaoil but which in
turn were to be funded by checks issued by Uniline.

In short, Seaoil alleges that Uniline funded Seaoil for the issuance of 12
checks to be paid by Seaoil to Autocorp in Transaction 1. Transaction 1 was
merely a “pretended transaction” because while Seaoil (with Yu as
president) may have purchased the excavator from Autocorp (to which
Rodriguez is a stockholder), in reality, Focus (also owned by Yu) is entitled to
the excavator because of the indebtedness of Uniline (owned by Rodriguez)
in Transaction 2.

Autocorp filed a complaint for recovery of personal property with damages and replevin in RTC
[Transaction 1]. RTC ruled that transaction between Autocorp and Seaoil was simple contract of
sale payable in installments. Rodriguez, not being a party, cannot be held liable. CA affirmed. It
held that the transaction between Yu and Rodriguez [Transaction 2] was merely verbal. This
cannot alter the sales contract between Seaoil and Autocorp [Transaction 1] as this will run
counter to the parol evidence rule which prohibits introduction of oral and parol evidence to
modify the terms of the contract.

ISSUE: WoN the parol evidence should be considered as to the nature of the transaction
involved?
SC held NO, because 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. 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 Vehicle Sales Invoice is the best evidence of the transaction. They show that
Autocorp sold to Seaoil one unit of Robex 200 LC Excavator paid for by checks issued by one
Romeo Valera. This does not, however, change the fact that Seaoil Petroleum Corporation, as
represented by Yu, is the customer or buyer. The Lease Purchase Agreement clearly shows that
the parties thereto are two corporations not parties to this case: Focus Point and Uniline. Under
this Lease Purchase Agreement, it is Uniline, as lessee/purchaser, and not Rodriguez, that
incurred the debt to Focus Point. The obligation of Uniline to Focus Point arose out of a
transaction completely different from the subject of the instant case. The transaction under the
Vehicle Sales Invoice is separate and distinct from that under the Lease Purchase Agreement. In
the former, it is Seaoil that owes Autocorp, while in the latter, Uniline incurred obligations to
Focus. There was never any allegation, much less any evidence, that Autocorp was merely an
alter ego of Uniline, or that the two corporations’ separate personalities were being used as a
means to perpetrate fraud or wrongdoing. Rodriguez, as stockholder and director of Uniline,
cannot be held personally liable for the debts of the corporation, which has a separate legal
personality of its own.
MARWQUEZ
LEQUIN