G.R. No. 190846 February 3, 2016
Tomas P. Tan, Jr. vs. Jose G. Hosana

FACTS

Respondent Jose Hosana and his wife Milagros owned a conjugal property. While Jose was working abroad, Milagros sold the property to petitioner Tomas Tan, Jr. She executed the deed of sale acting as attorney-in-fact for Jose by virtue of a Special Power of Attorney (SPA). The deed stated the purchase price as P200,000.00. Jose later filed a complaint for annulment, alleging the SPA was forged and the sale was made without his knowledge or consent. Tomas defended himself as a buyer in good faith, claiming he verified the transaction and actually paid P700,000.00, though only P200,000.00 was reflected in the deed to reduce taxes.
The Regional Trial Court (RTC) nullified the sale, finding the SPA void. The Court of Appeals (CA) affirmed the nullity but ordered Jose and Milagros to reimburse Tomas the purchase price of P200,000.00 to prevent unjust enrichment. Tomas moved for reconsideration, insisting he paid P700,000.00, but the CA denied it. Tomas thus elevated the case, contesting the reimbursement amount.

ISSUE

Whether the Court of Appeals erred in fixing the amount of reimbursement at P200,000.00 instead of the alleged actual purchase price of P700,000.00.

RULING

The Supreme Court denied the petition and affirmed the CA decision. The legal logic rests on the rules of evidence and the parol evidence rule. The deed of absolute sale, a public document, explicitly stated the consideration as P200,000.00. Under the parol evidence rule, when the terms of an agreement are reduced to writing, the document is considered the sole repository of the terms, and no evidence can be admitted to contradict or add to it. Tomas sought to prove a different price (P700,000.00) through his own testimony, which is extrinsic evidence barred by this rule.
The Court found no recognized exception to apply. The deed was not ambiguous on its face regarding the price, and there was no allegation of fraud, mistake, or imperfection in its preparation. The claim of tax evasion as the reason for the discrepancy did not create an ambiguity in the written instrument itself but was an attempt to alter its clear terms. Since the sale was declared void, the right to reimbursement arises from the principle of unjust enrichment to restore the parties to their original positions. However, the amount to be returned must be established by competent evidence. The only competent evidence of the consideration, as embodied in the void contract, was the P200,000.00 stated in the deed. Tomas’s uncorroborated testimony to the contrary was inadmissible to vary this written term. Therefore, the CA correctly ordered reimbursement based on the amount in the deed.