FIRST DIVISION

[G.R. No. 26173. July 13, 1927.]

ZACARIAS ROBLES , plaintiff-appellee, vs . LIZARRAGA HERMANOS ,

defendant-appellant.

J. Arroyo, Jose Lopez Vito, and Francisco, Lualhati & Lopez for appellant.
Paredes, Buencamino & Yulo for appellee.

SYLLABUS

1. CONTRACTS; EVIDENCE; ORAL CONTRACT INCONSISTENT WITH

WRITTEN CONTRACT; COLLATERAL AGREEMENT. — The rule excluding parol evidence
to vary or contradict a writing does not extend so far as to preclude the admission of
extrinsic 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 reference to such collateral agreement.
2. ID.; STATUTE OF FRAUDS; CONTRACT FOR SALE OF GOODS AND
CHATTELS. — The rule requiring a writing to prove a contract for the sale of goods and
chattels at a price of not less than P100 is not applicable where the buyer receives part
of the goods and chattels.
3. ID.; ID.; SUSPENSIVE CONDITION. — An agreement to buy certain things at
a valuation to be determined by an appraisal to be effected jointly by buyer and seller
obligates the buyer to proceed with the appraisal in good faith, and he cannot escape
liability on the contract by frustrating the appraisal. The making of the appraisal in such
case is not a condition prerequisite to the liability of the buyer, and if he fails to join in
the appraisal, he is liable for the true value of the things contracted about, as the same
may be established in the usual course of proof.
4. EVIDENCE; JUDICIAL NOTICE. — A court may take judicial notice of the
fact that protracted delay in the milling of sugar cane results in loss, and it may have
recourse to scienti c treatises dealing with the cultivation of cane for the purpose of
obtaining information on this point.

DECISION

STREET , J : p

This action was instituted in the Court of First Instance of Occidental Negros by
Zacarias Robles against Lizarraga Hermanos, a mercantile partnership organized under
the laws of the Philippine Islands, for the purpose of recovering compensation for
improvements made by the plaintiff upon the hacienda "Nahalinan" and the value of
implements and farming equipment supplied to the hacienda by the plaintiff, as well as
damages for breach of contract. Upon hearing the cause the trial court gave judgment
for the plaintiff to recover of the defendant the sum of P14,194.42, with costs. From
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
 this judgment the defendant appealed.
It appears that the hacienda "Nahalinan," situated in the municipality of
Pontevedra, Occidental Negros, belonged originally to the spouses Zacarias Robles and
Anastacia de la Rama, parents of the present plaintiff, Zacarias Robles. Upon the death
of Zacarias Robles, sr., several years ago, his widow Anastacia de la Rama was
appointed administratrix of his estate; and on May 20, 1913, as widow and
administratrix, she leased the hacienda to the plain- tiff, Zacarias Robles, for the period
of six years beginning at the end of the milling season in May, 1915, and terminating at
the end of the milling season in May, 1920. It was stipulated that any permanent
improvements necessary to the cultivation and exploitation of the hacienda should be
made at the expense of the lessee without right to indemnity at the end of the term. As
the place was in a run-down state, and it was foreseen that the lessee would be put to
much expense in bringing the property to its productive capacity, the annual rent was
fixed at the moderate amount of P2,000 per annum.
The plaintiff accordingly entered upon the property, in the character of lessee;
and, in order to put the farm in good condition, he found it necessary to make various
improvements and additions to the plant. Brie y stated, the changes and additions thus
effected were these: Substitution of a new hydraulic press; reconstruction of dwelling
house; construction of new houses for workmen; building of camarins; construction of
chimney; reconstruction of ovens; installment of new coolers; purchase of farming
tools and many head of carabao, with other repairs and improvements. All this expense
was borne exclusively by the lessee, with the exception that his mother and coheirs
contributed P1,500 towards the expense of the reconstruction of the dwelling house,
which was one-half the outlay for that item. The rm of Lizarraga Hermanos was well
aware of the nature and extent of these improvements, for the reason that the lessee
was a customer of the rm and had purchased from it many of the things that went into
the improvements.
In 1916, or three years before the lease was to expire, Anastacia de la Rama died,
leaving as heirs Zacarias Robles (the plaintiff), Jose Robles, Evarista Robles, Magdalena
Robles, Felix Robles, and the children of a deceased daughter, Puri cacion Robles.
Shortly thereafter Zacarias Robles, Jose Robles, and Evarista Robles acquired by
purchase the shares of their coheirs in the entire inheritance; and at this juncture
Lizarraga Hermanos came forward with a proposal to buy from these three all of the
property belonging to the Robles estate (which included other properties in addition to
the hacienda "Nahalinan").
In course of the negotiations an obstacle was encountered in the fact that the
lease of Zacarias Robles still had over two years to run. It was accordingly proposed
that he should surrender the last two years of his lease and permit Lizarraga Hermanos
to take possession as purchaser in June, 1918. A surrender of the two years of the
lease would naturally involve a heavy sacri ce on the part of Zacarias Robles not only
because the rent which he was bound to pay was low, but because he had already made
most of the expenditures in out tting the farm which would be necessary for farming
operations during the entire period of the lease.
The plaintiff alleges and the trial court found, upon what we believe to be
su cient proof, that, in consideration that the plaintiff should shorten the term of his
lease to the extent stated, the defendant agreed to pay him the value of all betterments
that he had made on the hacienda and furthermore to purchase from him all that
belonged to him personally on the hacienda, including the crop of 1917-18, the cattle,
farming implements and equipment, according to a valuation to be made after the
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
 harvest. The plaintiff agreed to this; and the instrument of conveyance by which the
three owners, Zacarias, Jose and Evarista Robles, conveyed the property to Lizarraga
Hermanos was accordingly executed on November 16, 1917.
The effective clauses of conveyance by which each of the three owners
transferred their respective interest to the purchaser read as follows:
" (a) Por la presente, Don Jose Robles, en consideracion a la cantidad
de P25,266.37 que declara haber ya recibido de la casa comercial Lizarraga
Hermanos, vende, cede y traspasa a la mencionada casa comercial Lizarraga
Hermanos, representada en este acto por D. Severiano Lizarraga, como gerente de
la misma, sus sucesores y causa-habientes, todos sus derechos, interes y
participacion en la testamentaria de la difunta Da. Anastacia de la Rama, como
uno de los herederos forzosos de la misma y todos los derechos, interes y
participacion adquiridos conjuntamente por el y sus hermanos Da. Evarista
Robles y D. Zacarias Robles de D. Rafael Campos y Hurtado y de Da. Magdalena
Robles.
"(b) Y Da Evarista Robles, con la debida licencia marital de su esposo
D. Enrique Martin, quien concurre al otorgamiento de este documento, en
consideracion a la cantidad de P23,036.43, que declara haber ya recibido de la
casa comercial Lizarraga Hermanos, representada en este acto por D. Severiano
Lizarraga, como gerente de la misma, sus sucesores y causahabientes, vende,
cede y traspasa todos sus derechos, intereses y participacion en la testamentaria
de la difunta Da. Anastacia de la Rama, como una de las herederas forzosas de
la misma, y todos los derechos, interes y participacion adquiridos por ella
juntamente con sus hermanos D. Jose Robles y D. Zacarias Robles de D. Rafael
Campos y Hurtado y de Da. Magdalena Robles.
"(c) Y, nalmente, D. Zacarias Robles, en consideracion a la cantidad
de P32,589.59 que la casa Lizarraga Hermanos, representada en este acto por D.
Severiano Lizarraga, por la presente promete pagarle en o antes del 30 de mayo
de 1917. con los intereses a razon de 8 por ciento anual, vende, cede y traspasa a
favor de la mencionada casa comercial Lizarraga Hermanos, sus sucesores y
causahabientes, todos sus derechos, interes y participacion en la testamentaria
de la difunta Da. Anastacia de la Rama, como uno de los herederos forzosos de
la misma, y todos los derechos, interes y participacion adquiridos por el,
juntamente con sus hermanos, Da. Evarista Robles y D. Jose Robles, de D. Rafael
Campos y Hurtado y de Da. Magdalena Robles."
It will be seen from the clauses quoted that the plaintiff received some
thousands of pesos of the purchase money more than his brother and sister. This is
explained by the fact that the plaintiff was a creditor of his mother's estate while the
other two were debtors to it; and the difference in the amounts paid to each resulted
from the adjustments of their respective rights. Furthermore, it will be noted that the
three grantors in the deed conveyed only their several rights, interest, and share in the
estate of their deceased mother; and precisely the same words are used in de ning
what was conveyed by Zacarias Robles as in de ning what was conveyed by the other
two. These words are noteworthy, and in the original Spanish they run as follows: "Sus
derechos, interes y participacion en la testamentaria de la difunta Da. Anastasia de la
Rama, como uno de los heredenos forzosos de la misma." What was conveyed by the
plaintiff is not de ned as being, in part, the hacienda "Nahalinan," nor as including any of
his rights in or to the property conveyed other than those which he possessed in the
character of heir.
No reference is made in this conveyance to the surrender of the plaintiff's rights
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
 as lessee, except in xing the date when the lease should end; nor is anything said
concerning the improvements or the property of a personal nature which the plaintiff
had placed on the hacienda. The plaintiff says that, when the instrument was presented
to him, he saw that in the sixth paragraph it was declared that the plaintiff's lease
should subsist only until June 30, 1918, instead of in May, 1920, which was the original
term, while at the same time the promise of the defendant to compensate for him for
the improvements and to purchase the existing crop, together with the cattle and other
things, was wanting; and he says that upon his calling attention to this, the
representative of the defendant explained that this was unnecessary in view of the
con dence existing between the parties, at the same time calling the attention of the
plaintiff to the fact that the plaintiff was already debtor to the house of Lizarraga
Hermanos in the amount of P49,000, for which the rm had no security. Upon this
manifestation the plaintiff subsided; and, believing that the agreement with respect to
compensation would be carried out in good faith, he did not further insist upon the
incorporation of said agreement into this document. Nor was the supposed agreement
otherwise reduced to writing.
On the part of the defendant it is claimed that the agreement with respect to
compensating the plaintiff for improvements and other things was never in fact made.
What really happened, according to the defendant's answer, is that, after the sale of the
hacienda had been effected, the plaintiff offered to sell the defendant rm the crop of
cane then existing uncut on the hacienda, together with the carabao then in use on the
place. This proposition was favorably received by the defendant; and it is admitted that
an agreement was arrived at with respect to the value of the carabao, which were taken
over for the agreed price, but it is claimed with respect to the crop that the parties did
not come into accord.
Upon the issue of fact thus made we are of the opinion that the preponderance
of the evidence supports the contention of the plaintiff — and the nding of the trial
court — to the effect that, in consideration of the shortening of the period of the lease
by nearly two years, the defendant undertook to pay for the improvements which the
plaintiff had placed on the hacienda and take over at a fair valuation, to be made by
appraisers, the personal property, such as carabao, tools, and farming implements,
which the plaintiff had placed upon the hacienda at his own personal expense. The
plaintiff introduced in evidence a letter (Exhibit D), written on March 1, 1917, by
Severiano Lizarraga to the plaintiff, in which reference is made to an appraisal and
liquidation. This letter is relied upon by the plaintiff as constituting written evidence of
the agreement; but it seems to us so vague that, if it stood alone, and a written contract
were really necessary, it could not be taken as su cient proof of the agreement in
question. But we believe that the contract is otherwise proved by oral testimony.
When testifying as a witness for the defense Carmelo Lizarraga himself admitted
— contrary to the statement of defendant's answer — that a few days before the
conveyance was executed the plaintiff proposed that the defendant should buy all the
things that the plaintiff then had on the hacienda, whereupon the Lizarragas informed
him that they would buy those things if an agreement should be arrived at as to the
price. We note that as regards the improvements the position of the defendant is that
they pertained to the hacienda, at the time the purchase was effected and necessarily
passed with it to the defendant.
As against the denials of the Lizarragas we have the direct testimony of the
plaintiff and his brother Jose to the effect that the agreement was as claimed by the
plaintiff; and this is supported by the natural probabilities of the case in connection with
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
 a subsequent appraisal of the property, which was rendered futile by the course
pursued by the defendants. It is, however, unnecessary to enter into details with respect
to this, because, upon examining the assignments of error of the appellant in this court,
it will be found that no exception has been taken to the nding of the trial court to the
effect that a verbal contract was made in the sense claimed by the plaintiff.
We now proceed to discuss seriatim the errors assigned by the appellant. Under
the rst, exception is taken to the action of the trial court in admitting oral evidence of a
contract different from that expressed in the contract of sale (Exhibit B); and it is
insisted that the written contract must be taken as expressing all of the pacts,
agreements and stipulations entered into between the parties with respect to the
acquisition of the hacienda. In this connection stress is placed upon the fact that there
is no allegation in the complaint that the written contract fails to express the agreement
of the parties. This criticism is in our opinion not well directed. The case is not one for
the reformation of a document on the ground of mistake or fraud in its execution, as is
permitted under section 285 of the Code of Civil Procedure. The purpose is to enforce
an independent or collateral agreement which constituted an inducement to the making
of the sale, or part of the consideration therefor. There is no rule of evidence of wider
application than that which declares extrinsic evidence inadmissible either to contradict
or vary the terms of a written contract. The execution of a contract in writing is deemed
to supersede all oral negotiations or stipulations concerning its terms and the subject-
matter which preceded the execution of the instrument, in the absence of accident,
fraud or mistake of fact (10 R. C. L., p. 1016). But it is recognized that this rule is to be
taken with proper quali cations; and all the authorities are agreed 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 (10 R. C. L., p.
1036). As expressed in a standard legal encyclopedia, the doctrine here referred to is
as follows: "The rule excluding parol evidence to vary or contradict a writing does not
extend so far as to preclude the admission of extrinsic 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 agree- ment contains any
reference to such collateral agreement, and whether the action is at law or in equity."
(22 C. J., p. 1245.) It has accordingly been held that, in case of a written contract of
lease, the lessee may prove an independent verbal agreement on the part of the
landlord to put the leased premises in a safe condition; and a vendor of realty may
show by parol evidence that crops growing on the land were reserved, though no such
reservation was made in the deed of conveyance (10 R. C. L., p. 1037). In the case
before us the deed of conveyance purports to transfer to the defendant only such
interests in certain properties as had come to the conveyors by inheritance. Nothing is
said concerning the rights in the hacienda which the plaintiff had acquired by lease or
concerning the things that he had placed thereon by way of improvement or had
acquired by purchase. The verbal contract which the plaintiff has established in this
case is therefore clearly independent of the main contract of conveyance, and evidence
of such verbal contract is admissible under the doctrine above stated. The rule that a
preliminary or contemporaneous oral agreement is not admissible to vary a written
contract appears to have more particular reference to the obligation expressed in the
written agreement, and the rule has never been interpreted as being applicable to
matters of consideration or inducement. In the case before us the written contract is
complete in itself; the oral agreement is also complete in itself, and it is a collateral to
the written contract, notwithstanding the fact that it deals with related matters.
Under the second assignment of error the appellant directs attention to
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
 subsection 4 of article 335 of the Code f Civil Procedure wherein it is declared that a
contract for the sale of goods, chattels or things in action, at a price of not less than
P100, shall be unenforceable unless the contract, or some note or memorandum
thereof shall be in writing and subscribed by the party charged, or by his agent; and it is
insisted that the court erred in admitting proof of a verbal contract over the objection
of the defendant's attorney. But it will be noted that the same subsection contains a
quali cation, which is stated in these words, "unless the buyer accept and receive part
of such goods and chattels." In the case before us the trial court found that the
personal property, consisting of farming implements and other movables placed on the
farm by the plaintiff, have been utilized by the defendant in the cultivation of the
hacienda, and that the defendant is bene ting by those things. No effort was made in
the court below by the defendant to controvert the proof submitted on this point in
behalf of the plaintiff, and no error is assigned in this court to the nding of fact with
reference thereto made by the trial judge. It is evident therefore that proof of the oral
agreement with respect to the movables was properly received by the trial judge, even
over the objection of the defendant's attorney.
The appellant's third assignment of error has reference to the alleged suspensive
condition annexed to the oral agreement. In this connection it is claimed that the true
meaning of the proven verbal agreement is that, in case the parties should fail to agree
upon the price, after an appraisal of the property, the agreement would not be binding;
in other words, that the stipulation for appraisal and agreement as to the price was a
suspensive condition in the contract: and since the parties have never arrived at any
agreement on the price (except as to the carabao), it is contended that the obligation of
the defendant has never become effective. We are of the opinion that the stipulation
with respect to the appraisal of the property did not create a suspensive condition. The
true sense of the contract evidently was that the defendant would take over the
movables and the improvements at an appraised valuation, and the defendant
obligated itself to promote the appraisal in good faith. As the defendant partially
frustrated the appraisal, it violated a term of the contract and made itself liable for the
true value of the things contracted about, as such value may be established in the usual
course of proof. Furthermore, it must occur to any one, as the trial judge pointed out,
that an unjust enrichment of the defendant would result from allowing it to appropriate
the movables without compensating the plaintiff therefor.
The fourth assignment of error is concerned with the improvements. Attention is
here directed to the fact that the improvements placed on the hacienda by the plaintiff
became a part of the realty and as such passed to the defendant by virtue of the
transfer effected by the three owners in the deed of conveyance (Exhibit B). It is
therefore insisted that, the defendant having thus acquired the improvements, the
plaintiff should not be permitted to recover their value again from the defendant. This
criticism misses the point. There can be no doubt that the defendant acquired the xed
improvements when it acquired the land, but the question is whether the defendant is
obligated to indemnify the plaintiff for his outlay in making the improvements. It was
upon the consideration of the defendant's promise so to indemnify the plaintiff that the
latter agreed to surrender the lease nearly two years before it was destined to
terminate. There can be no doubt as to the validity of the promise made under these
circumstances to the plaintiff.
The fth assignment of error is directed towards the action of the trial court in
awarding to the plaintiff the sum of P1,142 as compensation for the damage caused by
the failure of the defendant to take the existing crop of cane from the hacienda at the
proper time. In this connection it appears that it- was only in November, 1917, that the
CD Technologies Asia, Inc. © 2018 cdasiaonline.com
 defendant nally noti ed the plaintiff that he would not take the cane off the plaintiff's
hands. Having relied upon the promise of the defendant with respect to this matter, the
plaintiff had made no prior arrangements to have the cane ground himself, and he had
failed to contract ahead for the necessary laborers to harvest the crop. Due to this lack
of hands the milling of the cane was delayed, and things that ought to have been done
in December, 1917, were only accomplished in February, 1918. It resulted also that the
milling of the cane was not completed until July, 1918. The trial court took judicial
notice of the fact that protracted delay in the milling of sugar-cane results in loss; and
his Honor estimated the damage to the plaintiff's crop upon this account in the amount
above stated. As fortifying his position on this point his Honor quoted extensively in his
opinion from scienti c treatises on the subject of the sugar industry in this and other
countries. That there must have been damage attributable to the cause above stated is
manifest; and although the estimate made by the court was based upon what may be
considered matter of judicial notice without any speci c estimate from farmers, we see
no reason to conclude that any injustice was done to the plaintiff in said estimate.
Upon the whole we nd no reason to modify the conclusions of the trial court
upon any point, and the judgment appealed from must be a rmed. It is so ordered,
with costs against the appellant.
Avanceña, C. J., Johnson, Malcolm, Villamor, and Villa-Real, JJ., concur.

CD Technologies Asia, Inc. © 2018 cdasiaonline.com