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SO ORDERED.

Padilla (Chairman), Bellosillo, Kapunan and Hermosisima, Jr.,

JJ., concur.

Judgment affirmed in toto.

Notes.—Circumstantial evidence may be sufficiently cogent to

satisfy the judicial conscience, and may be as potent as direct
testimony in tending to connect the accused with the commission of
the offense. (People vs. Balisteros, 237 SCRA 497 [1994])
The rule on circumstantial evidence necessarily requires that each
circumstance must be positively established with the requisite
quantum of evidence, in the same manner that the catena that binds
them together and conduces to a conclusion of guilt must survive the
test of reason and satisfy the required evidentiary weight. (People vs.
Adofina, 239 SCRA 67 [1994])
——o0o——

G.R. No. 121506. October 30, 1996.*

MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY,

petitioner, vs. COURT OF APPEALS, REGIONAL TRIAL
COURT, BRANCH 9, CEBU CITY, MELBA LIMBACO, LINDA
C. LOGARTA and RAMON C. LOGARTA, respondents.

Evidence; Parol Evidence Rule; Contracts; Pleadings and Practice; A

party may present evidence to modify, explain or add to the terms of a
written agreement if he puts in issue in his pleading the failure of the written
agreement to express the true intent of the

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* THIRD DIVISION.

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Mactan Cebu Intl. Airport Authorithy vs. Court of Appeals

parties thereto.—Under the parol evidence rule, when the terms of an

agreement have been reduced into writing, it is considered as containing all
the terms agreed upon, and there can be, between the parties and their
successors-in-interest, no evidence of such terms other than the contents of
the written agreement. However, a party may present evidence to modify,
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explain or add to the terms of the written agreement if he puts in issue in his
pleading, the failure of the written agreement to express the true intent of
the parties thereto.
Same; Same; Same; Same; Where a parol contemporaneous agreement
was the moving cause of the written contract, or where the parol agreement
forms part of the consideration of the written contract, and it appears that
the written contract was executed on the faith of the parol contract or
representation, such evidence is admissible.—In the case at bench, the fact
which private respondents seek to establish by parol evidence consists of the
agreement or representation made by the NAC that induced Inez Ouano to
execute the deed of sale; that the vendors and their heirs are given the right
of repurchase should the government no longer need the property. Where a
parol contemporaneous agreement was the moving cause of the written
contract, or where the parol agreement forms part of the consideration of the
written contract, and it appears that the written contract was executed on the
faith of the parol contract or representation, such evidence is admissible. It
is recognized that proof is admissible of any collateral parol agreement that
is not inconsistent with the terms of the written contract though it may relate
to the same subject matter. The rule excluding parol evidence to vary or
contradict a writing does not extend so far as to preclude the admission of
existing evidence to show prior or contemporaneous collateral parol
agreements between the parties, but such evidence may be received,
regardless of whether or not the written agreement contains any reference to
such collateral agreement, and whether the action is at law or in equity.
Same; Same; Same; A protest or objection against the admission of any
evidence must be made at that proper time, and if not so made, it will be
understood to have been waived.—More importantly, no objection was
made by petitioner when private respondents introduced evidence to show
the right of repurchase granted by the NAC to Inez Ouano. It has been
repeatedly laid down as a rule of evidence that a protest or objection against
the admission of any

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738 SUPREME COURT REPORTS ANNOTATED

Mactan Cebu Intl. Airport Authorithy vs. Court of Appeals

evidence must be made at the proper time, and if not so made, it will be
understood to have been waived.
Same; Same; Same; Statute of Frauds; In the case at bench, the deed of
sale and the verbal agreement allowing the right of repurchase should be
considered as an integral whole — the deed of sale is in itself the note or
memorandum evidencing the contract.—Under Art. 1403 of the Civil Code,
a contract for the sale of real property shall be unenforceable unless the
same or some note or memorandum thereof be in writing and subscribed by
the party charged or his agent. Evidence of the agreement cannot be
received without the writing, or a secondary evidence of its contents. In the
case at bench, the deed of sale and the verbal agreement allowing the right
of repurchase should be considered as an integral whole. The deed of sale
relied upon by petitioner is in itself the note or memorandum evidencing the
contract. Thus, the requirement of the Statute of Frauds has been sufficiently
complied with.

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Same; Same; Same; Same; The Statute of Frauds was enacted for the
purpose of preventing fraud — it should not be made the instrument to
further them.—Moreover, the principle of the Statute of Frauds only applies
to executory contracts and not to contracts either partially or totally
performed, as in this case, where the sale has been consummated; hence, the
same is taken out of the scope of the Statute of Frauds. As the deed of sale
has been consummated, by virtue of which, petitioner accepted some
benefits thereunder, it cannot now deny the existence of the agreement. The
Statute of Frauds was enacted for the purpose of preventing fraud. It should
not be made the instrument to further them.

PETITION for review on certiorari of a decision of the Court of

Appeals.
   The facts are stated in the resolution of the Court.
  Sycip, Salazar, Hernandez & Gatmaitan for private respondents.

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RESOLUTION
FRANCISCO, J.:
Petitioner Mactan Cebu International Airport Authority
(MCIAA)1 seeks a reversal of the decision2 of the Court of Appeals
(CA) dated March 23, 1995 as well as the resolution3 dated August
7, 1995 denying petitioner’s motion for reconsideration. The facts,
as stated in the assailed decision, and which we adopt, are as
follows:

“Sometime in 1949, officers of the National Airport Corporation

informed the owners of the various lots surrounding the Lahug Airport that
the government will purchase their lands for the expansion of the airport.
The landowners were convinced to sell their properties, otherwise, the
government will be forced to institute expropriation proceedings in courts.
They were also assured that their properties will be returned to them when
these are no longer being used by the airport (TSN-Daclan, 15 June 1992,
pp. 5-7; TSN-Sanchez, 29 September 1992, p. 12; TSN-Daclan, 9 February
1993, pp. 7-9, 12).
“Initially, Inez Ouano did not want to sell her property because she does
not have enough to bequeath to her grandchildren and the price offered by
the government was very low. Nonetheless, she agreed to sell since the
government was going to expropriate the land anyway. She was also
reassured by the promise that the land will be returned to her when it is no
longer in use (TSN-Daclan, 15 June 1992, pp. 5-6).
“Eufemio Vercide, one of the affected landowners testified that in a
meeting called by the NAC, the landowners were given documents to sign,
and he asked for a rider or certification which would indicate that the land
will be returned to him should it not be used by the airport. He testified that
it was only after the rider was given to him that he signed the document of
sale (TSN-Catin, 24 September 1992; Deposition of Eufemio Vercide;
Records, pp. 146-155). The

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1 Successor-in-interest of the National Airport Corporation (NAC).
2 Rollo, pp. 22, 24-31.
3 Rollo, p. 23.

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rider dated 8 November, 1949, signed by Mariano Reyes for the NAC and
Vercide reads, as follows:
“This RIDDER (sic), shall remain in full force up to whensoever
and whatever the Lahug Airport may happen in the future. All
statements in anticipations herein below stated, shall remain valid in
favor of the landowners.
“That in the event that this Lahug Airport will be left dead and of
no use, or be transferred to another place or locality, then the parcels
of land mentioned in the attached Doc. No. 698, Page 8, Book No.
XVII, Series of 1949 by Atty. Daniel Tumulak, shall be returned to
the same owner, EUFEMIO O. VERCIDE at the same selling price
without any interest (Exhibit “F-1”; Records, p. 92).”
“The sale of Inez’ property was covered by a Deed of Sale signed by her
and Mariano Reyes representing the NAC. The deed indicates that the Lot
742 was sold for P2,596.40; and Lot 953 for P1,125.20. The deed does not
contain any provision regarding Inez’ right to repurchase the properties. Nor
does she have any rider such as the one given to Vercide.
“Nonetheless, during her lifetime, Inez used to remind her granddaughter
Melba Limbaco, who was living with her, about the assurance by the NAC
officials that the properties will be returned. Inez also made Melba
understand that the latter can recover the land herself should Inez die before
the proper time arises.
xxx xxx xxx
“Upon learning that other landowners were able to recover their
properties and that the then Pres. Aquino had ordered that the airport be
transferred to Mactan, the appellees tried to repurchase the properties
originally owned by their grandmother. On 2 October 1991, they wrote to
Capt. Antonio Oppus, the manager of appellant, signifying their intention to
repurchase the properties originally owned by their grandmother (Exhibit
“D,” Records, pp. 82-83). Capt. Oppus replied through a letter dated 17
October 1991 denying their request because the deed of sale covering the
properties does not contain any condition relating to the right to repurchase.
These properties, it was explained, had become the absolute properties of
the NAC (Exhibit “E,” Records, p. 84).4

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4 Decision dated March 23, 1995, pp. 2-4 1995; Rollo, pp. 24-26.

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Private respondents thereafter filed a case for reconveyance with

the Regional Trial Court (RTC) which ruled in their favor. On appeal
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to the CA, the same was affirmed in toto. Hence, this petition
assigning the following errors:

“I. RESPONDENT COURT ERRED IN RULING THAT THERE

WAS AN AGREEMENT ALLOWING INEZ OUANO AND HER
SUCCESSORS TO REPURCHASE THE LOTS IN QUESTION ABSENT
ANY “RIDER” IN THE DEED OF SALE SIMILAR TO THE SALES OF
ADJACENT LOTS WHICH CONTAINED RIDERS.
II. RESPONDENT COURT ERRED IN RULING THAT THE
STATUTE OF FRAUDS DOES NOT APPLY IN THE INSTANT CASE
AS THE CONTRACT HAS BEEN PARTIALLY EXECUTED.”5

Anent the first error, the CA’s finding that there was an agreement
allowing the right of repurchase, was established after admitting the
parol evidence presented by private respondents. We reject
petitioner’s argument that in the absence of any rider providing for
such right of repurchase, no evidence, whatsoever can be received to
establish that such a right indeed exists. Both the RTC and the CA
correctly ruled that the right of repurchase granted by the NAC to
Inez Ouano can be sufficiently established by parol evidence. The
Court of Appeals, based on the parol evidence presented by private
respondents, thus stated:

“We see no reason, however, why Inez should be considered as not

similarly situated as the owners of these other lots. All these lots surround
the Lahug Airport and were acquired by the government for the proposed
expansion of the airport. The appellee has not presented any evidence to
show that Inez’ lots were acquired for a different purpose or under different
conditions. Why then should the sale of such lots be singled out as not
subject to the right to repurchase when a good number of the lots around
them were already repurchased by their original owners?”6

_______________

5 Appellant’s Brief, p. 6; Rollo, p. 15.

6 Decision dated March 23, 1995, p. 7; Rollo, p. 29.

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Under the parol evidence rule, when the terms of an agreement

have been reduced into writing, it is considered as containing all the
terms agreed upon, and there can be, between the parties and their
successors-in-interest, no evidence of such terms other than the
contents of the written agreement. However, a party may present
evidence to modify, explain or add to the terms of the written
agreement if he puts in issue in his pleading, the failure of the
written agreement to express the true intent of the parties thereto.7 In
the case at bench, the fact which private respondents seek to
establish by parol evidence consists of the agreement or
representation made by the NAC that induced Inez Ouano to execute
the deed of sale; that the vendors and their heirs are given the right
of repurchase should the government no longer need the property.

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Where a parol contemporaneous agreement was the moving cause of
the written contract, or where the parol agreement forms part of the
consideration of the written contract, and it appears that the written
contract was executed on the faith of the parol contract or
representation, such evidence is admissible.8 It is recognized that
proof is admissible of any collateral parol agreement that is not
inconsistent with the terms of the written contract though it may
relate to the same subject matter. The rule excluding parol evidence
to vary or contradict a writing does not extend so far as to preclude
the admission of existing evidence to show prior or
contemporaneous collateral parol agreements between the parties,
but such evidence may be received, regardless of whether or not the
written agreement contains any reference to such collateral
agreement, and whether the action is at law or in equity.9
More importantly, no objection was made by petitioner when
private respondents introduced evidence to show the

_______________

7 Rule 130, Sec. 9, par. 2(b).

8  3 Jones on Evidence, Sec 1492; Woodhouse vs. Halili, 49 O.G. 3374, cited in
V.J. Francisco, The Revised Rules of Court, Vol. VII, 1973 ed., p. 166.
9 Robles vs. Lizarraga Hermanos, 50 SCRA 387.

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Mactan Cebu Intl. Airport Authorithy vs. Court of Appeals

right of repurchase granted by the NAC to Inez Ouano. It has

been repeatedly laid down as a rule of evidence that a protest or
objection against the admission of any evidence must be made at the
proper time, and if not so made, it will be understood to have been
waived.10
As regards the second assigned error, the CA correctly held that
the Statute of Frauds does not apply to the case at bench. In support
thereof, the CA declared:

“It will be stressed that the right to repurchase is part of the contract of
sale, albeit not incorporated in the deed of sale. It is not an independent
agreement or contract. It is, therefore, correct for the trial court to hold that
the contract has been partially executed by the sale of the properties to the
appellant.”11

Under Art. 1403 of the Civil Code, a contract for the sale of real
property shall be unenforceable unless the same or some note or
memorandum thereof be in writing and subscribed by the party
charged or his agent. Evidence of the agreement cannot be received
without the writing, or a secondary evidence of its contents. In the
case at bench, the deed of sale and the verbal agreement allowing the
right of repurchase should be considered as an integral whole. The
deed of sale relied upon by petitioner is in itself the note or
memorandum evidencing the contract. Thus, the requirement of the
Statute of Frauds has been sufficiently complied with. Moreover, the
principle of the Statute of Frauds only applies to executory contracts
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and not to contracts either partially or totally performed,12 as in this
case, where the sale has been consummated; hence, the same is
taken out of the scope of the Statute of Frauds. As the deed of sale
has been consummated, by virtue of which, petitioner accepted some
benefits thereunder, it cannot now deny the existence of the
agreement.13 The

_______________

10 Cruz vs. CA, 192 SCRA 209.

11 Decision dated March 23, 1995, p. 9; Rollo, p. 31.
12 Victoriano vs. CA, 194 SCRA 19.
13 Art. 1405, Civil Code.

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Mactan Cebu Intl. Airport Authorithy vs. Court of Appeals

Statute of Frauds was enacted for the purpose of preventing fraud. It

should not be made the instrument to further them.14
ACCORDINGLY, the petition is hereby DENIED.
SO ORDERED.

Narvasa (C.J., Chairman), Davide, Jr., Melo and Panga niban,

JJ., concur.

Petition denied.

Notes.—Even when a document appears on its face to be a sale

with pacto de retro the owner of the property may prove that the
contract is really a loan with mortgage by raising as an issue the fact
that the document does not express the true intent and agreement of
the parties, and parol evidence then becomes competent and
admissible to prove that the instrument was given merely as a
security for the repayment of the loan. (Olea vs. Court of Appeals,
247 SCRA 274 [1995])
The fact that the deed of sale still has to be signed and notarized
does not mean that no contract has already been perfected — the
requisite form under Article 1458 of the Civil Code is merely for
greater efficacy or convenience and the failure to comply therewith
does not affect the validity and binding effect of the act between the
parties. (Limketkai Sons Milling, Inc. vs. Court of Appeals, 250
SCRA 523 [1995])
——o0o—— 

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14 National Bank vs. Philippine Vegetable Oil, Co., 49 Phil. 857.

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