ALFONSO BUISER AND SOLEDAD MEDRANO-BUISER, PETITIONERS, VS. HON. COURT OF APPEALS, PRUDENCIO MARANAN AND LEOVIGILDA SUAREZ, RESPONDENTS.

This is a petition for the review on certiorari of the
Court of Appeals’ decision which reversed the judgment of the trial court and instead ordered the petitioners
— the Buiser Spouses — to refund private
respondents Prudencio Maranan
and Leovigilda Suarez the amount of P14,000.00 with interest at the legal rate from the filing of
the complaint on May 10, 1967,
until fully paid and to pay the sum of P3,000.00
for attorney’s fees and expenses of litigation, plus costs.

The undisputed
facts of the case are narrated
by the Court of Appeals as follows:

“On May 10, 1967,
spouses Prudencio Maranan
and Leovigilda Suarez filed a complaint in the Court of First Instance of Laguna and San
Pablo City against
spouses Alfonso Buiser and Soledad Medrano-Buiser to recover from the latter a sum of money.  The complaint was docketed as Civil Case
No. SP-668 and assigned for disposition to Branch III-San Pablo City of the court.

“The complaint alleged, inter alia, that a few days before February 15, 1967, when defendants were
yet the lessees of the “FILIPINO BAKERY” in Batangas,
Batangas, they represented to plaintiffs that they
had a leasehold contract for the bakery for a period of ten (10) years, only
two (2) years of the contract having elapsed as of February, 1967; that
defendants offered to sell to plaintiffs their leasehold rights over the
bakery, and stated that their copy of the contract was misplaced or lost,
assuring plaintiffs to got a copy from
the notary public in Mindoro, the contract having
been notarized in that province, as the owner of the bakery was a resident
there; that plaintiffs finally purchased for the sum of P10,000.00 from
defendants all the latter’s leasehold rights to occupy and operate the bakery;
that although the deed of sale was executed on February 15, 1967, and the
payment of P10,000.00 was made on the same date, the actual turn over and delivery of possession of the bakery by defendants
to plaintiffs was agreed upon by the parties to be done on March 30,
1967; that it was only on March 28 or 29, 1967, that plaintiffs learned that defendants
had no contract for ten (10) years duration with the owner Apolonio
Buquid, when the latter arrived at Batangas, Batangas, from Mindoro; that the lease of the bakery by defendants from Apolonio Buquid being from month
to month and the owner Buquid came to Batangas purposely to get back the bakery, defendants, in
effect, returned and delivered their possession and occupancy of the bakery to Apolonio Buquid; and that
plaintiffs demanded time and again from defendants the return to them of the
P10,000.00, but defendants consistently refused to return the amount to
plaintiffs.  Plaintiffs prayed for
judgment, ordering defendants to pay them the sum of P10,000.00,
with interest, P3,000.00 for and as attorney’s fees and P5,000.00 as exemplary
damages.

“Resisting the complaint, defendants alleged, among others,
that they admit that they represented to plaintiffs that they had a leasehold
contract for the bakery for a period of ten (10) years, that as of February, 1967,
only two (2) years of the contract had elapsed, and that they were paying the
owner of the bakery P250.00 as monthly rent; that they offered to sell to
plaintiffs their leasehold rights over the bakery, but subject to the
conformity of the owners of the premises; that the agreed consideration of the
sale was P18,000.00,
the payment thereof to be made by plaintiffs to them on March 30, 1967, and
plaintiffs would take possession of the
premises on that date, if the sale would be finally consummated; that
they deny under oath the genuineness and due execution of the alleged Deed of Sale of
Leasehold Rights, Annex “A” to the complaint; that no payment was made by
plaintiffs to them; that Apolonio Buquid
went to Batangas on March 28 or 29, 1967, at the
request of plaintiffs to secure his conformity to the proposed sale of their
leasehold rights in favor of plaintiffs; and that Apolonio Buquid, on his own and at the inducement of and collusion
with plaintiffs, seized the bakery from them (defendants).  The position of defendants is that the
proposed sale of the leasehold rights in favor of plaintiffs was not
consummated, Apolonio Buquid
not having consented thereto and they (plaintiffs) not having been paid a
single centavo.

“After due trial, the lower court rendered a decision,
dismissing the complaint with costs against plaintiffs.” (pp. 24-27, Rollo).

On appeal, the respondent Court of Appeals reversed the lower
court’s decision and entered a new one as above stated.  A subsequent motion for reconsideration was
denied.

Hence, this present petition.

The petitioners raise the following assignment of errors:

I.  THE HONORABLE COURT OF
APPEALS ERRED IN MAKING ITS OWN FINDINGS OF FACTS BASED ON SPECULATION,
SURMISES AND CONJECTURES:  CONTRARY TO
THE ADMISSION OF THE PETITIONERS AND THE PRIVATE RESPONDENTS INSTEAD OF
UPHOLDING THE FINDINGS OF FACTS MADE BY THE TRIAL COURT WHO HEARD THE CASE AND
OBSERVED THE MANNERS AND DEMEANORS OF THE WITNESSES.

II.  THE
HONORABLE COURT OF APPEALS ERRED IN NOT
HOLDING THAT THE DEED OF SURRENDER (EXHIBIT “C”) WAS EXECUTED
BETWEEN BUISERS AND BUQUIDS ONLY TO
PREVENT BUISER FROM COLLECTING THE MONTHLY RENTALS OF P250.00 FROM THE
MARANANS.

III.  THE
HONORABLE COURT OF APPEALS ERRED IN NOT
MODIFYING THE DECISION OF THE TRIAL COURT BY ORDERING THE PLAINTIFFS (PRIVATE
RESPONDENTS) TO PAY THE DEFENDANTS (PETITIONERS) THE BALANCE OF FOUR (4)
THOUSAND PESOS WITH INTEREST, COSTS OF SUIT AND DAMAGES, MORAL AND EXEMPLARY,
AS WELL AS ATTORNEY’S FEES.  (p. 5, Petitioners’ Brief).

The records show that when the Buiser
spouses sold their leasehold rights to the Maranans,
they were entitled to eight more years of occupancy under the original contract
of lease with owner Apolonio Buquid.  The private
respondents claim that pursuant to the February 15, 1967 deed of sale, they were supposed to take over the bakery on March 30, 1967.  Learning, however, that the Buisers had abandoned the bakery and fearful that the
equipment inside might be stolen, they entered the bakery on March 24, 1967 to clean it up and
safeguard the premises.  On March 27, 1967, the Buquid spouses allegedly showed up and told them not to
continue with cleaning up the place as they, the owners, were going to eject
the Buisers for non-payment of rentals.

Informed of the deed of sale, the Buquids
asked respondent Maranans to join in a conference
with the petitioner spouses.  According
to the private respondents, it was during the conference on March 28, 1967 that the Buiser spouses and the Buquid
spouses entered into the agreement terminating as of that date the verbal
contract of lease over the
use of the bakery premises.

Since the Buisers had no more rights to
sell to the Maranans,
the latter had to enter into their own contract of lease with landowner Apolonio Buquid.  Shortly afterward, they filed the complaint
to recover the money allegedly paid to the Buisers
and damages.

The petitioners particularly question the findings of the Court
of Appeals stated below:

“With the surrender of the leased premises by defendants-appellees to the owners,
their contract of lease with the
latter, ipso facto expired, and all the improvements introduced
therein became the property of the
owners.  And when plaintiffs-appellants
entered into a contract of lease with
the owners, the Buquids, the improvements, such as
the building and all accessories, such as the owners and furniture, no longer
belonged to defendants-appellees.

“Plaintiff-appellant Prudencio Maranan parted with the P14,000.00
in favor of defendants-appellees for and in consideration of the right over an
eight-year contract of lease which defendants-appellees
claimed to possess.  But the latter ceased to have any leasehold
right on the bakery after March 28, 1967.

“If ever plaintiffs-appellants were able to occupy the
premised for more than four years, it was by virtue of a transaction with the
owners of the premises, separate and entirely distinct from the contract
entered into by them with defendants-appellees,
having an entirely distinct and separate considerations.” (pp. 32-33, Rollo).

Exhibit “C” provided that:

“TALASTASIN NG SINO MAN, NA:

“Kami, APOLONIO BUQUID, may ari ng Filipino Bakery na nakatayo sa
Evangelista, Batangas, Batangas,
at ALFONSO BUISER, na umuupa
sa naulit na Bakery, ay nagpapatunay
sa harap nito na anq
aming verbal na
usapan na upahan sa naulit na Panaderia ay tinatapos
ngayong arao na ito, Marzo 28, 1967, at akong
umuuna (Alfonso), ay isinusulit ko na sa kanya (Apolonio) panderiang ito.

“Sa KATUNAYAN NG
LAHAT, kami ay lumagda sa mababa
nito, ngayong ika-28 ng Marzo, 1967, dito sa Batangas, Batangas.

(SGD) 
APOLONIO BUQUID           (SGD)  ALFONSO BUISER

APOLONIO BUQUID                       ALFONSO
BUISER

Sa
Harap Nina:

(SGD) ESTELITA R. BUQUID
(SGD) S. M. BUISER”

(p. 13, Respondents’
Brief; Emphasis supplied)

The petitioners claim that despite their having signed Exhibit
“C”, there was no actual surrender of the bakery and its premises to
the owners, the Buquids.  Petitioner Alfonso Buiser
states that he signed the said Exhibit “C” because the Buquids were apprehensive that the petitioners who had
already sold their leasehold rights over the bakery and its premises might
still collect the rent of P250.00 a month from the private respondents.

We find no merit to this contention.

Rule 130, Sec. 7
of the Rules of Court provides:

“Evidence of written agreement.
– When the terms of an agreement have been reduced to writing, it is to be
considered as containing all such terms, and, therefore, there can be, between
the parties and their successors in interest, no evidence of the terms of the
agreement other than the contents of the writing, except in the following
cases:

“a) 
Where a mistake or imperfection of the writing, or its failure to
express the true intent and agreement of the parties, or the validity of the
agreement is put in issue by the pleadings;

“b)  When
there is an intrinsic ambiguity in the writing.

“The term ‘agreement’ includes wills.”

The records fail to show that Exhibit “C” falls under any of the exceptions.

The petitioners admit that they started leasing the bakery and its premises on December 4,
1964.  They introduced various improvements
and by their own estimate, these amounted to about P11,401.00.  They admit,
however, that upon the termination of the lease, all improvements would inure
to the owners, the Buquid spouses.

Exhibit A, the February 15, 1967 deed of sale of leasehold rights expressly stipulates that for P10,000.00
acknowledged as received from the Maranans, the Buisers “ay aming ipinagbibili at ipinagbibili na nga ngayon
ang lahat naming karapatan at paggamit sa nasabing panaderia
(Filipino Bakery); kasama ang
lahat na kagamitan doon na ginagamit namin
ngayon.” (Record on Appeal, in
Civil Case No. Sp. 668, p. 8).

In the same document, the Buisers
stated that “ay aming ipinanananto
at sinasagutan a ginagarantihan
na sa loob
nang walong (8) taon mula ngayon
ay matahimik na magagamit nina G. Maranan ang naulit
na panaderia at sakaling silay ganibalain doon gayon din na pinananagutan
namin ang kanilang magiging danos y perjuicios sakali nga at may lumigalig sa kanila.”
(id at pp. 8-9).

Exhibit C, earlier quoted, executed on March 28, 1967 between Apolonio Buquid and Alfonso Buiser, and witnessed by their respective spouses,
expressly states that it terminates the verbal contract of lease – “ang aming verbal na usapan na
upahan sa naulit na Panaderia
ay tinatapos
ngayong arao na ito” — and that the lessee surrenders the bakery to the lessor —
“at among umuupa (Alfonso) ay, isinusulit ko na sa kanya (Apolonio) ang panaderiang ito.” (Emphasis
supplied)

We
find no reversible error in the ruling of the respondent court that the
petitioners surrendered the bakery to the owners inspite of their having sold their rights for the next
eight years to the private respondents. 
There is no basis for the allegation that Exhibit C does not mean what
it says and that it was executed only to allay certain apprehensions of the Buquid spouses.  We
likewise see no reversible error in the Court of Appeals finding that before
the payment of the P10,000.00 acknowledged in the deed
of sale, there was an advance of P4,000.00 as initial payment for the purchase of leasehold rights.  In fact, the petitioners contended during
pre-trial that the consideration for what they now allege to be an aborted sale
was actually P18,000.00.

The petitioners allege that the finding of the respondent Court
of Appeals that there was a separate and distinct transaction entered into by
private respondents with the Buquids is without
factual basis.

They point out that in
the pre-trial of the case, the petitioners and the private respondents agreed,
among others:

“That plaintiffs have no contract with the owner Apolonio Buquid to occupy the
bakery in question and they rely on the document Exhibit “2” (Kasulatan Nang Bilihan ng Karapatan, Exh. A) as
testified to by plaintiff Prudencio Maranan in the trial of Civil Case No. 1246 of the Municipal Court of Batangas,
Batangas, T.s.n., p. 252, (Exh. 1).” (p. 109, Record on Appeal)

There is no actual conflict between the pre-trial admission and
the separate agreement with the owners.  The initial occupancy of the private
respondents was by virtue of the “Kasulatan Nang Bilihan ng Karapatan.”
The private respondents were asserting the
truth as to the basis of their
entering the bakery.  The lease contract
with the owners was subsequent to their initial occupancy.  It was entered into only when the Maranans realized that the rights purchased from the Buisers were non-existent and that they had
to execute another contract or face eviction. 
In other words, the later agreement was for their continued stay and had
nothing to do with their initial occupancy.

WHEREFORE, the petition is DISMISSED.  The decision of the Court of appeals is
AFFIRMED.  The award of FOURTEEN THOUSAND
PESOS (P14,000.00) to private respondent shall bear the legal rate of Six Percent
(6%) interest from May 10, 1967 until July 29, 1974, and Twelve Percent (12%) interest, thereafter, pursuant to our ruling
in Viloria v. Court
of Appeals (123 SCRA 259).

SO ORDERED.

Fernan, (Chairman), Feliciano, Bidin, and Cortes, JJ., concur.