PAROL EVIDENCE RULE
&'e A duly
1 NORTON RESOURCES AND DEVELOPMENT CORPORATION v.
ALL ASIA BANK CORPORATION
1. Norton Resources applied for and was granted a loan by All Asia
Bank Corporation (P3.8! as e"idenced by a #oan Agree$ent.
%. &'e loan was intended for t'e construction of 1) 'ousing units
subdi"ided by Norton per a *ubdi"ision *ketc' Plan.
a. &o speed up t'e processing of all t'e docu$ents
necessary for t'e release of funds+ Norton allegedly
o,ered All Asia a ser"ice-co$$it$ent fee of P3%)k (P%k
per unit! for t'e construction of t'e units.
b. A e$orandu$ of Agree$ent was eecuted upon
acceptance of t'e o,er.
c. &'e P3%)k was deducted fro$ t'e P3.8 loan proceeds.
3. /o$e 0inancing
co"erage Corporation+
obligating as t'e
itself to pay guarantor+ etended
loan upon Nortonssecurity
default.
2. nly 34-1) 'ousing units were constructed.
a. Norton defaulted in t'e pay$ent of t'e loan.
4. All Asia clai$ ed fro$ /0C and assi gned its inte rest o"er t'e
$ortgage to /0C by "irtue of a 5eed of Assign$ent and
deli"ery of &C&.
. 6pon /0Cs pay$ent of t'e obligation (utstanding a$ount7
P3.% Pay$ent7 P%.9 HFC withheld P2!" !+ it eecuted a
5eed of Release of ortgage canceling t'e $ortgage of all
properties listed in t'e 5eed of Assign$ent.
:. All Asia de$anded for t'e P%4)k but /0C refused upon Nortons
re;uest.
8. All Asia <led an action to reco"er t'e P%4)k.
9. R&C7 =n fa"or of All Asia.
1). CA7 A>r$ed. CA decision beca$e <nal and eecutory . Norton! testi<ed t'at t'e co$$it$ent fee s'ould be paid
11. Norton <led a Co$plaint for *u$ of oney and 5a$a ges
against All Asia alleging t'at t'e P3%)k co$$it$ent fee was to
be paid on a per?unit basis (P%k eac'!.
a. *ince only 34 'ous ing units were constructed+ Norton is
only liable for P:)k.
b. Norton clai$s for t'e return of t'e P%4)k.
1%. All Asia7 5enied + not per unit as pro"ided in A. 0urt'er+
barred by res @udicata.
13. R&C7 =n fa"or of Norton. Co$$it$ent fee was per unit+ t'us+
t'ere was o"erpay$ent of P%4)k.
12. CA7 Re"ersed. 0ro$ t'e literal i$port of t'e A+ not'ing was
$entioned t'at t'e co$$it$ent fee is per?unit and dependent
upon t'e actual construction of t'e units.
contained all t'e ter$s agreed upon by t'e parties.
ISSUE# 'et'er t'e A reects t'e true intention of t'e parties.
$ES. The %&''it'e(t )ee *h&+ld ,e -id i( l+'- *+'
/P02!".
&'e parol e"idence ruleD forbids any addition to or
contradiction of t'e ter$s of a written instru$ent by testi$ony
or ot'er e"idence purporting to s'ow t'at+ at or before t'e
eecution of t'e parties written agree$ent+ ot'er or di,erent
ter$s were agreed upon by t'e parties+ "arying t'e purport of
t'e written contract.
'en an agree$ent 'as been reduced to writing+ t'e parties
cannot be per$itted to adduce e"idence to pro"e alleged
practices w'ic'+ to all purposes+ would alter t'e ter$s of t'e
written agree$ent.
'ate"er is not found in t'e writing is understood to 'a"e been
wai"ed and abandoned.
None of t'e abo"e?cited eceptions <nds application in t'is
case+ $ore particularly t'e alleged failure of t'e A to epress
t'e true intent and agree$ent of t'e parties concerning t'e
co$$it$ent-ser"ice fee of P3%)+))).)).
o Paragrap' 2 of t'e A plainly states7 &'at t'e C#=EN&
o,ers and agrees to pay a co$$it$ent and ser"ice fee
of &/REE /6N5RE5 &EN&F &/6*AN5 PE**
(P3%)+))).))!+ w'ic' s'all be paid in two (%! e;ual
install$ents+ on t'e sa$e dates as t'e <rst and second
partial releases of t'e proceeds of t'e loan
*C agreed to t'e <ndings of t'e CA
o *oriano and 0acundo (GP and Heneral anager of
per unit.
o But a careful scrutiny of t'e testi$onies discloses t'at
t'ey are not in accord wit' t'e docu$entary e"idence on
record.
o
&'e *ubdi"ision
Agree$ent. =t wasPlan was eecuted
i$possible after
for 0acundo t'e #oan
to consider t'e
*ubdi"ision Plan to support Nortons proposal t'at t'e
co$$it$ent fee s'ould be paid per unit.
o &'e A is clear and eplicit in its ter$s.
&'e agree$ent or contract between t'e parties is t'e for$al
epression of t'e parties rig'ts+ duties and obligations. =t is t'e
best e"idence of t'e intention of t'e parties. &'us+ w'en t'e
ter$s of an agree$ent 'a"e been reduc ed to writing+ it is
considered as containing all t'e ter$s agreed upon and t'ere
can be no e"idence of suc' ter$s ot'er t'an t'e contents of t'e written agree$ent between t'e parties and t'eir successors in
interest.