FACTS

On August 17, 2007, herein petitioners filed with the Metropolitan Trial Court (MeTC) of Pasig City a Complaint for ejectment against herein respondent. In their Position Paper, petitioners alleged that: they are the owners of a condominium unit, denominated as Unit 2203, which is located at AIC Gold Tower, Emerald Avenue, Ortigas Center, Pasig City; they purchased the condominium unit from three (3) Indian nationals who originally contracted to buy the said property from the developer, AIC Realty Corporation (AIC), but had not fully paid for it yet; petitioners’ purchase was evidenced by a Deed of Assignment and Transfer of Rights dated June 13, 2002 and, later on, a Deed of Absolute Sale 7 dated July 13, 2007 in the name of petitioner Armando; at the time of petitioners’ purchase of the subject condominium unit, the same was being leased by respondent from the original owners; the period of lease was from April 1, 2002 to March 1, 2003; petitioners respected the contract of lease between respondent and the original owners; however, since June 2002 up to the time of the filing of the complaint for ejectment, respondent neither remitted nor consigned the monthly rentals due to petitioners for her continued use of the condominium unit; the rental arrears amounted to a total of P2,130,000.00; petitioners sent a letter of demand to respondent requiring that she, together with any and all persons using the said unit with her approval, vacate the premises and pay her arrears; respondent ignored petitioners’ demand letter; petitioners tried to settle the case amicably but no agreement was reached.

                    In her Answer with Compulsory Counterclaims, respondent countered that: she, indeed, entered into a contract of lease with the original owners of the disputed condominium unit which was to commence on April 1, 2002 and would end on March 1, 2003; sometime in June 2002, she decided to purchase the unit; however, since she was then undergoing proceedings to annul her previous marriage and thinking that her purchase of the subject property would disrupt the property arrangements already agreed upon, she thought it best not to have the condominium unit registered yet in her name; instead, she requested Armando Trinidad, who was her confidante, to purchase the unit and register it under his name with the understanding that the said property would actually be owned by respondent; Armando agreed without objection, which led to the execution of the Deed of Assignment and Transfer of Rights in his name; payments for the purchase price were made by respondent through cash and checks paid to the original owners who acknowledged said payments; aside from paying the purchase price, respondent also paid the real property taxes due on the condominium unit as well as the association dues, water bills, common area real estate tax, building insurance and other charges billed by the developer; having full trust in Armando, coupled with her hectic schedule, respondent did not bother to transfer ownership of the subject unit in her name; since April 2002 up to the time of filing her Answer, respondent has been in open and public possession of the subject property; in 2007, while respondent was out of the country, Armando, without respondent’s knowledge, annotated his claim on the condominium certificate of title; he also executed a Deed of Absolute Sale in his favor on July 13, 2007; as a result, respondent was surprised to receive a copy of petitioners’ demand letter and complaint.

CA: The CA ratiocinated that, based on the evidence adduced by the parties, respondent’s claim of ownership deserves more credence. The CA ruled that records of payment of the purchase price of the subject property, through respondent’s personal checks, acknowledgment of these payments by the former owners by way of receipt and affidavit, and respondent’s exercise of acts of ownership prove that she is the owner of the disputed condominium unit and, thus, is entitled to the possession thereof.

Petitioners argue: That under the Parole Evidence Rule, when the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, as between the parties, no evidence of such terms other than the contents of the written agreement. Based on this rule, petitioners contend that since the former owners, as well as respondent, are all parties to the Deed of Assignment and Transfer of Rights, they are bound by the said Deed and they cannot allege terms which are not found within the said agreement.||

ISSUE: 

whether or not the CA correctly apply the Parole Evidence Rule.

HELD: 

Yes. The fact that the Deed of Assignment and Transfer of Rights was put in writing and notarized does not accord it the quality of incontrovertibility otherwise provided by the Parole Evidence Rule. The rule on parole evidence is not, as it were, ironclad. Thus, the second paragraph of Section 9, Rule 130 of the Rules of Court provides the exceptions, to wit:

Section 9. Evidence of written agreements. — . . .

However, a party may present evidence to modify, explain or add to the terms of written agreement if he puts in issue in his pleading:

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

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

(c) The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement.

The term “agreement” includes wills. As observed by the CA, respondent squarely put in issue in her Answer that the Deed of Assignment and Transfer of Rights did not express the true intent of the parties. Hence, the exception applies.

Indeed, petitioners failed to offer any credible explanation why payments of the purchase price were made by respondent by using her personal checks if she is not, in fact, the buyer of the property. Neither was there any justification why respondent paid the real property taxes due on the property, as well as the utility bills, association dues, common area real estate tax and building insurance. More importantly, petitioners also fell short in advancing a plausible refutation why the former owners would execute an affidavit indicating therein that the agreement among the parties is that the subject property shall be purchased in the name of Armando with the understanding between the latter and respondent that Armando would hold the property in respondent’s behalf until it will be placed in her name, thus exposing themselves to possible perjury charges, if such agreement is not really true.|

In addition, if petitioners are the real owners of the subject condominium unit, why did they wait until February 19, 2007, or almost four (4) years after the supposed expiration of respondent’s lease contract, to demand that she vacate the disputed premises and pay rentals. Moreover, as the MeTC has noted, it was only in 2007 that Armando annotated his claim on the condominium certificate of title, executed the subject Deed of Absolute Sale and requested certification of his ownership from the developer.

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