DOCTRINE:When the parties admit the contents of written docs but put in issue whether these docs adequately and correctly express the true intention of the parties, the deciding body is authorized to look beyond these instruments and into the contemporaneous and subsequent actions of the parties in order to determine such intent.

Rule 130, Sec 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 doc in question, and does not base his claim on the instrument or assert a right originating in the instrument.”

FACTS: Respondents Espejos were the original registered owners of the two agricultural lands of Lantap Property located at Barangay Lantap, Bagabag, Nueva Vizcaya and the Murong Property located at Brgy. Murong of the same town which were subsequently foreclosed and sold to Rural Bank of Bayombong, Inc. (RBBI) due to their failure to pay the loans in the said bank. But a Deed of Sale was made on Feb. 26, 1985covering “TCT No. T-62096” (corresponds to Murong property) without description as to the location of the subject property whether it is in Brgy. Murong or Brgy.Lantap.

TCT No. T-62096 dated January 14, 1985 was issued for the Murong Property and TCT No. T-62836 dated June 4, 1985 was issued for the Lantap Property in favor of RBBI. However, both TCTsdid not specifically state its location whether it is in Barangay Lantap or Barangay Murong.

RBBI executed separate Deeds of Voluntary Land Transfer (VLTs) in favor of Marquez and DelaCruz covered by TCT No.  T-62836 (corresponds to Lantap Property) but described being located in Brgy. Murong.DAR issued Certificate of Land Ownership Award (CLOA) to Marquez and Dela Cruz upon payment of the purchase price to RBBI.

Nemi Fernandez, husband of Elenita Espejo, was the tenant of Lantap Property while Salun-at Marquez and Nestor Dela Cruz were the tenants of the Murong Property. No evidence that Espejos took possession of Murong Property nor demanded lease rentals from petioners, Marquez and Dela Cruz.

Espejos filed Complaint on Feb. 10, 1997 before the Regional Agrarian Reform Adjudicator (RARAD) of Bayombong, Nueva Vizcaya based on the Deed of Sale indicating that TCT No. T-62096 (referring to Murong Property) was the subject of theirbuy-back transaction.RARAD gave precedence to the TCT numbers appearing on the Deed of Sale and VLTs but was reversed by Department of Agrarian Reform Adjudication Board (DARAB).

In appeal, the CA annulled and set aside DARAB’s decision because in using the Best Evidence Rule embodied in Rule 130, Section 3, the Deed of Sale is the best evidence as to its contents, particularly the description of the land which was the object of the sale. Since the Deed of Sale expressed that its subject is the land covered by TCT No. T-62096 – the Murong property – then that is the property that the respondents repurchased. The additional description in the VLTs that the subject thereof is located in Barangay Murong was considered to be a mere typographical error.

On June 22, 2004, RBBI filed a separate Petition for Review on Certiorari, docketed as G.R. No. 163320 with the Supreme Court but was denied. CA’s decision becomes final and executory. A petition for review on Certiorari was filed in the SC by Marquez and Dela Cruz.

ISSUE: Whether or not the CA correctly applied the Parol evidence in the case.

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. 44

Moreover, the instant case falls under the exceptions to the Parol Evidence Rule, as provided in the second paragraph of Rule 130, Section 9:

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:

(1) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(2) The failure of the written agreement to express the true intent and agreement of the parties thereto;

          Here, 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. Well-settled is the rule that in case of doubt, it is the intention of the contracting parties that prevails, for the intention is the soul of a contract, not its wording which is prone to mistakes, inadequacies, or ambiguities. To hold otherwise would give life, validity, and precedence to mere typographical errors and defeat the very purpose of agreements.

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