Tuesday, March 8, 2011

Case Digest in Evidence (Remedial Law): SEAOIL Petroleum Corp. vs. AUTOCORP


SEAOIL PETROLEUM CORPORATION VS. AUTOCORP GROUP AND PAUL Y. RODRIGUEZ
G.R. No. 164326, October 17, 2008
FACTS:Petitioner Seaoil Petroleum Corporation purchased one unit of ROBEX 200 LC Excavator, Model 1994 from respondent Autocorp Group. The sales agreement was embodied in the Vehicle Sales Invoice No. A-0209 and Vehicle Sales Confirmation No. 258. Seaoil issued 12 checks as payment therefor; however 10 checks were not honored by the bank since Seaoil requested that payment be stopped. Autocorp filed a complaint for recovery of personal property with damages and replevin in the Regional Trial Court.

Seaoil claims that Seaoil and Autocorp were only utilized as conduits to settle the obligation of one foreign entity named Uniline Asia, in favor of another foreign entity, Focus Point International, Incorporated. The real transaction is that Uniline, through Rodriguez, owed money to Focus. In lieu of payment, Uniline instead agreed to convey the excavator to Focus. This was to be paid by checks issued by Seaoil but which in turn were to be funded by checks issued by Uniline.

Petitioner Seaoil in sum alleges that the written agreement failed to express the true intent and agreement of the parties, thus parol evidence is admissible.

ISSUE:
Whether or not parol evidence rule is applicable in this case.

HELD:
No. Although parol evidence is admissible to explain the meaning of a contract, it cannot serve the purpose of incorporating into the contract additional contemporaneous conditions which are not mentioned at all in the writing unless there has been fraud or mistake. Evidence of a prior or contemporaneous verbal agreement is generally not admissible to vary, contradict or defeat the operation of a valid contract.

The Vehicle Sales Invoice is the best evidence of the transaction. The terms of the subject sales invoice are clear. They show that Autocorp sold to Seaoil one unit Robex 200 LC Excavator paid for by checks issued by one Romeo Valera.


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