GR 154630; (May, 2005) (Digest)
G.R. No. 154630 ; May 6, 2005
BERMAN MEMORIAL PARK, INC. and LUISA CHONG, petitioners, vs. FRANCISCO CHENG, respondent.
FACTS
Petitioner Berman Memorial Park, Inc. (BMPI) owns and operates the Iloilo Memorial Park. Respondent Francisco Cheng initially purchased a memorial lot (12-Lot) for P150,000 for his deceased wife’s interment, which he paid in full. Subsequently, in May 1994, Cheng agreed to purchase a larger lot (24-Lot). The parties executed a Pre-Need Purchase Agreement No. 2318, stipulating a selling price of P250,000, with a credit of P110,000 from his prior payment, resulting in a net balance of P140,000 payable in installments. Cheng paid the downpayment and several installments.
Cheng later contended he had overpaid, claiming the agreed net price for the 24-Lot was only P100,000 after crediting the full P150,000 from his first purchase. He filed a complaint for specific performance and refund against “Iloilo Memorial Park” (IMP) and sales counselor Luisa Chong, alleging an overpayment of P77,375. BMPI and Chong maintained the correct net price was P140,000 per their written contract, and that Cheng still had an outstanding balance.
ISSUE
Whether the respondent, Francisco Cheng, is entitled to a refund for alleged overpayment based on his interpretation of the contract, or whether he remains liable to pay the balance as stipulated in the written Pre-Need Purchase Agreement.
RULING
The Supreme Court ruled in favor of the petitioners, BMPI and Chong. The Court emphasized the primacy of the written contract as the embodiment of the parties’ agreement. The Pre-Need Purchase Agreement clearly stated a selling price of P250,000 for the 24-Lot, with a credit of P110,000 from the prior transaction, leaving a net balance of P140,000. Cheng’s unilateral assertion of a different computation, which would credit the full P150,000, finds no support in the clear and unambiguous terms of the contract.
The legal logic rests on the fundamental principles of contract interpretation and the parol evidence rule. When the terms of a written agreement are clear and leave no doubt upon the intention of the parties, the literal meaning of its stipulations shall control. The Court cannot alter the contract based on one party’s post-facto assertions that contradict its plain language. Since Cheng did not file an action for reformation of the instrument, the written agreement must be enforced as it stands. Consequently, the Court reversed the lower courts’ decisions and ordered Cheng to pay BMPI his unpaid balance of P32,375 plus interest.