DOCTRINE: “Where a party entitled to the benefit of the parol evidence rule allows such evidence to be received without objection, he cannot, after the trial has closed and the case has been decided against him, invoke the rule in order to secure a reversal of the judgment. Hence, by failing to object to respondent’s testimony in the trial court, petitioners waived the protection of the parol evidence rule.”

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FACTS: In December 1997, Garcia and respondent took possession of their respective leased portions. In July 1999, Garcia pre-terminated his contract with petitioners. Respondent, on the other hand, stayed on until June 8, 2000. According to petitioners, respondent stopped paying his monthly rentals in December 1999. Shortly thereafter, petitioners claimed they discovered respondent putting up improvements on another 120 sq. m. portion of their property which was never leased to him nor to Garcia. They added he had also occupied Garcia’s portion immediately after the latter left.

Petitioners asked respondent to pay his arrears and desist from continuing with his construction but he took no heed. Because of respondent’s failure to meet petitioners’ demands, they asked him to vacate the property. On January 27, 2000, they rescinded the lease contract. On June 23, 2000, petitioners filed in the RTC of Quezon City a case for recovery of possession of real property against respondent. In the complaint, petitioners asked respondent to pay the following: (1) rent from January 27, 2000 or from the time his lease contract was rescinded until he vacated the property; (2) rent for Garcia’s portion from August 1999 until he vacated it and (3) rent for the remaining 120 sq. m. which was not covered by his or Garcia’s contract. Petitioners likewise insisted that respondent was liable to pay his arrears from December 1999 until the expiration of his lease contract in August 2002. According to them, the lease contract provided:

“in the event of [respondent’s] failure to complete the term of the lease, [he would] still be liable to answer for the rentals of the remaining period.”

In his answer with counterclaim, respondent denied petitioners’ accusations and alleged that it was them who owed him money. According to him, he and petitioner Wilfredo Amoncio agreed to construct five commercial buildings on petitioners’ property. One of the buildings was to go to Garcia, two to petitioners and the last two to him. They also agreed that he was to finance the construction and petitioners were to pay him for the two buildings assigned to them. Respondent added he was to pay the rentals for five years and surrender the buildings (on his leased portion) to petitioners after the lapse of said period. However, in June 2000, he vacated the premises after he and petitioners could no longer settle things amicably.

Respondent asked to be paid: (1) P600,000 for the construction cost of the two buildings that went to petitioners; (2) P300,000 as adjusted cost of the portion leased to him and (3) P10,000 as attorney’s fees. The RTC admitted the evidence presented by the respondents to prove the said agreement because the petitioner did not object. CA affirmed, petitioner now is questioning whether the parole evidence rule here is applicable.

ISSUE: whether or not parol evidence rule is applicable even if the case does not fall under any of the four exceptions.

HELD: Yes. Although the present case does not appear to fall under any of the given exceptions written in Section 9 of Rule 130, however, a party to a contract may prove the existence of any separate oral agreement as to any matter which is not inconsistent with its terms. This may be done if, from the circumstances of the case, the court believes that the document does not convey entirely the whole of the parties’ transaction. 

In this case, there are tell-tale signs that petitioners and respondent had other agreements aside from those established by the lease contract. And we find it difficult to ignore them. We agree with the trial court:

. . . [T]hat [respondent], indeed, undertook the construction subject hereof, is not disputed by [petitioners]. [Respondent] testified that two units thereof were intended for [petitioners], another two units for him and one for . . . Garcia at the cost of P300,000.00 per unit or for a total budget of P1.5 million.

Evidence further disclosed that the [b]uilding [p]ermit issued therefor by the Building Official bore the signature of [petitioner] Wilfredo Amoncio . . .

. . . the Court cannot be unmindful of [petitioner Wilfredo Amoncio’s denial by any knowledge of the whole construction undertaken by herein [respondent.] But it is evident that [petitioners] have chosen to adopt inconsistent positions which, by applicable jurisprudence, [are] barred. Said the Court in this regard:

The doctrine of estoppel prohibits a party from assuming inconsistent position based on the principle of election, and precludes him from repudiating an obligation voluntarily assumed after having accepted benefits therefrom. To countenance such repudiation would be contrary to equity and would put a premium on fraud and misrepresentation . . . 

Moreover, petitioners also failed to make a timely objection against respondent’s assertion of their prior agreement on the construction of the buildings. Where a party entitled to the benefit of the parol evidence rule allows such evidence to be received without objection, he cannot, after the trial has closed and the case has been decided against him, invoke the rule in order to secure a reversal of the judgment. Hence, by failing to object to respondent’s testimony in the trial court, petitioners waived the protection of the parol evidence rule.

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