GR 162523; (November, 2009) (Digest)
G.R. No. 162523; November 25, 2009
NORTON RESOURCES AND DEVELOPMENT CORPORATION, Petitioner, vs. ALL ASIA BANK CORPORATION, Respondent.
FACTS
Petitioner Norton Resources obtained a loan of ₱3.8 million from respondent All Asia Bank to construct 160 housing units. The parties executed a Memorandum of Agreement (MOA) for a ₱320,000 service/commitment fee, which the bank deducted in advance from the loan proceeds. Petitioner completed only 35 units and defaulted on the loan. The bank called on the guarantor, Home Financing Corporation (HFC), which paid but withheld ₱250,000. The bank successfully sued HFC for this amount in a prior case.
Subsequently, petitioner filed the present complaint, alleging the ₱320,000 fee was payable at ₱2,000 per unit. Since only 35 units were built, petitioner claimed it owed only ₱70,000 and demanded a refund of ₱250,000. The Regional Trial Court ruled for petitioner, ordering the refund. The Court of Appeals reversed, prompting this petition.
ISSUE
Whether the Court of Appeals erred in ruling that the MOA’s commitment fee was not payable on a per-unit basis and in not ordering the refund of ₱250,000 to petitioner.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic rests on the principle of the obligatory force of contracts and the parol evidence rule. The MOA, a contract of adhesion, explicitly stated a fixed commitment fee of ₱320,000 without any condition linking its payment to the number of units completed. The terms were clear and left no room for interpretation. Petitioner’s claim of a per-unit arrangement constitutes a subsequent oral agreement that sought to vary the unambiguous terms of the written contract. Under the parol evidence rule, such extrinsic evidence is inadmissible to contradict, add to, or subtract from the terms of a written agreement that appears complete on its face.
The Court found no basis to apply the exception for contracts of adhesion, as petitioner failed to prove that the terms were unjust or that it was deprived of a meaningful choice. The contract was not shown to be unconscionable. Furthermore, the prior final judgment in the case between the bank and HFC, which involved the same ₱250,000, bolstered the conclusion that the fee was a fixed amount not subject to refund based on project completion. Thus, the literal import of the MOA governs, and petitioner is not entitled to recover the claimed amount.