RODRIGO ENRIQUEZ, ET AL., PLAINTIFFS AND APPELLANTS, VS. SOCORRO A. RAMOS, DEFENDANT AND APPELLEE.

It is alleged that on November 24, 1958 defendant purchased from plaintiffs
20 parcels of land located in Quezon City and covered by transfer certificates
of title for the amount of P235,056.00 of which only the amount of P35,056.00
was paid on the date of sale, the balance of P200,000.00 being payable within
two years from the date of sale, with 6% interest per annum during the first
year, of the remainder to draw 12% interest per annum if paid thereafter,
provided that at least P100,000.00 should be paid during the first year,
otherwise the whole unpaid balance would become immediately demandable; that to
secure the payment of the balance of P200,000.00 defendant executed a mortgage
in favor of plaintiff upon the 20 parcels of land sold and on a half interest
over a parcel of land in Bulacan which was embodied in the same deed of sale;
that said deed of sale with mortgage was registered in the Office of the
Registers of Deeds of Quezon City and Pampanga; and that as defendant broke
certain stipulations contained in said deed of sale with mortgage, plaintiffs
instituted the present foreclosure proceedings.

Defendant set up as affirmative defense that the contract mentioned in the
complaint does not express the true agreement of the parties because certain
important conditions agreed upon were not included therein by the counsel who
prepared the contract; that the stipulation that was omitted from the contract
was the promise assumed by plaintiffs that they would construct roads in the
lands which were to be subdivided for sale on or before January, 1959; that said
condition was not placed in the contract because, according to plaintiffs’
counsel, it was a superfluity, inasmuch as there is an ordinance in Quezon City
which requires the construction of roads in a subdivision before lots therein
could be sold; and that, upon the suggestion of plaintiffs’ counsel, their
promise to construct the roads was not included in the contract because the
ordinance was deemed part of the contract. Defendant further claims that the
true purchase price of the sale was not P235,056.00 but only P185,000.00, the
difference of P50,000.00 being the voluntary contribution of defendant to the
cost of the construction of the roads which plaintiffs assumed to do as
abovementioned.

After the reception of the evidence, the trial court sustained the contention
of defendant and dismissed the complaint on the ground that the action of
plaintiffs was premature. It found that plaintiffs really assumed the
construction of the roads as a condition precedent to the fulfillment of the
obligation stipulated in the contract on the part of defendant, and since the
same has not been undertaken, plaintiffs have no cause of action. In due time,
plaintiffs have appealed.

The evidence of record discloses the following facts: On November 6, 1956,
plaintiffs entered into a contract of conditional sale with one Pedro del
Rosario covering a parcel of land in Quezon City described in Transfer
Certificate of Title No. 11483 which has a total area of 77,772 square meters in
consideration of a purchase price of P10.00 per square meter. To guarantee the
performance of the conditions stipulated therein a performance bond in the
amount of P100,000.00 was executed by Pedro del Rosario. Del Rosario was given
possession of the land for development as a subdivision at his expense. He
undertook to pay for the subdivision survey, the construction of roads, the
installation of light and water, and the income tax plaintiffs may be required
to pay arising from the transaction, in consideration of which Del Rosario was
allowed to buy the property for P600,000.00 within a period of two years from
November 6, 1956 with the condition that, upon his failure to pay said price
when due, all the improvements introduced by him would automatically become part
of the property without any right on his part to reimbursement and the
conditional sale would be rescinded.

Unable to pay the consideration of P600,000.00 as agreed upon, and in order
to avoid court litigation, plaintiffs and Del Rosario, together with defendant
Socorro A. Ramos, who turned out to be a partner of the latter, entered into a
contract of rescission on November 24, 1958. To release the performance bond and
to enable defendant to pay some of the lots for her own purposes, plaintiffs
allowed defendant to buy 20 of the lots herein involved at the rate of P16.00
per square meter on condition that she will assume the payment of P50,000.00 as
her share in the construction of roads and other improvements required in the
subdivision. This situation led to the execution of the contract of sale Exhibit
A subject of the present foreclosure proceedings.

The main issues posed in this appeal are: (1) Is the purchase price of the 20
lots bought by defendant from plaintiffs the sum of P185,000.00, as claimed by
defendant, or P235,056.00, as claimed by plaintiffs; and (2) Was an oral
agreement, coetaneous to the execution of the contract of sale, entered into
between the parties to the effect that plaintiffs would undertake the
construction of the roads on the lots sold before defendant could be required to
comply with her financial obligation?

Defendant contends that the contract of sale Exhibit A does not express the
true agreement of the parties because certain important conditions agreed upon
were not included therein by plaintiffs’ counsel among which is the promise
assumed by plaintiffs that they would undertake to construct the roads that may
be required in the subdivision subject of the sale on or before January, 1959;
that said condition was not placed in the contract because plaintiffs’ counsel
said that it was a superfluity inasmuch as there was then in Quezon City an
ordinance which requires the construction of roads in a subdivision before the
lots therein could be sold; and that, upon the suggestion of plaintiffs’
counsel, such commitment was not included in the contract because the ordinance
aforesaid was already deemed to be part of the contract.

Plaintiffs, on the other hand, dispute the above contention arguing that
there was no such oral agreement or understanding because all that was agreed
upon between the parties was already expressed and included in the contract of
sale Exhibit A executed between the parties and since defendant failed to pay
the balance of her obligation within the period stipulated, the whole obligation
became due and demandable thus giving plaintiffs the right to foreclose the
mortgage in accordance with law.

After considering and evaluating the evidence submitted by both parties, the
court a quo found defendant’s contention well-taken, thereby concluding
that the action of plaintiffs was premature. In reaching this conclusion the
court a quo made the following comment:

“* * * The Court is of the opinion that the construction of the roads was a
condition precedent to the enforcement of the terms of Exhibit A, particularly
the foreclosure of mortgage, for the reason that the subdivision regulations of
Quezon City requires, as a matter of law, that the sellers of lands therein to
be converted into subdivision lots must construct the roads in said subdivision
before the lots could be sold. The requirement must have beeen uppermost in the
mind of the parties in this case which led to the execution of the so-called
‘Explanation’ (Exhibit 3) wherein it is stated that the sum of P50,000.00 was a
contribution of the herein defendant for the construction of the roads which the
plaintiffs would undertake ‘in accordance with the provisions of the City
Ordinance of Quezon City’ (Exhibit 3). It is to be noted that Exhibit 3 was
executed on November 24, 1958, the very day when Exhibit A was also executed.
Exhibit 3 also proves that the purchase price is not, as appearing in the deed
of sale with mortgage, Exhibit A, actually P235,000.00 but only P185,000.00
which would approximately be the price of the entire area of the land sold at
the rate of P16.00 per square meter.”

We find no error in the conclusion reached by the court a quo for
indeed that is the condition to be expected by a person who desires to purchase
a big parcel of land for purposes of subdivision. In a subdivision the main
improvement to be undertaken before it could be sold to the public is feeder
roads as otherwise it would be inaccessible and valueless and would offer no
attraction to the buying public. And so it is correct to presume, as the court a
quo did, that when the sale in question was being negotiated the construction of
roads in the prospective subdivision must have been uppermost in the mind of
defendant for her purpose in purchasing the property was to develop it into a
subdivision. That such requirement was uppermost in the mind of defendant is
proven by the execution by the plaintiffs of the so-called “Explanation”
(Exhibit 3) on the very day the deed of sale was executed wherein it was stated
that the sum of P50,000.00 was advanced by defendant as her contribution to the
construction of the roads which plaintiffs assumed to undertake “in accordance
with the provisions of the City Ordinance of Quezon City.” It is to be noted
that said document specifically states that the amount of P50,000.00 should be
deducted from the purchase price of P235,056.00 appearing in the deed of sale,
and this is a clear indication that the real purchase price is only P185,000.00,
as claimed by defendant, which would approximately be the price of the entire
area of the land at the rate of P16.00 per square meter.

A circumstance which lends cogency to defendant’s claim that the commitment
of plaintiffs to construct the roads was not inserted in the contract because of
the assurance made by their counsel that it would be a superfluity is the fact
that in Quezon City there was really an ordinance which requires the
construction of roads in a subdivision before lots therein could be sold, and
considering that this assurance came from the very counsel who prepared the
document who even intimated that the ordinance was deemed part of the contract,
defendant must have agreed to the omission relying on the good faith of
plaintiffs and their counsel. At any rate, the execution of the document Exhibit
3 clarifies whatever doubt may have existed with regard to the true terms of the
agreement on the matter.

It is argued that the court a quo erred in allowing the presentation
of parole evidence to prove that a contemporaneous oral agreement was also
reached between the parties relative to the construction of the roads for the
same is in violation of our rule which provides that when the terms of an
agreement had been reduced to writing it is to be considered as containing all
that has been agreed upon and that no evidence other than the terms thereof can
be admitted between the parties (Section 22, Rule 123). This rule, however, only
holds true if there is no allegation that the agreement does not express the
true intent of the parties. If there is and this claim is put in issue in the
pleadings, the same may be the subject of parole evidence (Idem.). The
fact that such failure has been put in issue in this case is patent in the
answer wherein defendant has specifically pleaded that the contract of sale in
question does not express the true intent of the parties with regard to the
construction of the roads.

It appearing that plaintiffs have failed to comply with the condition
precedent relative to the construction of the roads in the subdivision in
question, it follows that their action is premature as found by the court a
quo. The failure of defendant to pay the realty and income taxes as agreed
upon, as well as to register the mortgage with respect to the Bulacan property,
aside from being minor matters, appear sufficiently explained in the brief of
defendant-appellee.

Wherefore, the decision appealed from is affirmed, with costs against
appellants.

Bengzon, C. J., Padilla, Labrador, Reyes, J. B. L., Paredes, Dizon,
and Makalintal, JJ., concur.