Title
Land Settlement and Development Corporation vs. Garcia Plantation Company
Case
G.R. No. L-17820
Decision Date
Apr 24, 1963
LASADECO sued Garcia Plantation Co. for unpaid tractor debt; defendants claimed novation via extension. Court ruled parol evidence admissible to prove condition precedent, reversing dismissal.

Case Digest (G.R. No. 133442)
Expanded Legal Reasoning Model

Facts:

  • Background and Nature of the Case
    • The case involves a suit for specific performance of contract initiated by the Land Settlement and Development Corporation (LASADECO).
    • The dispute centers on the recovery of P5,955.30, which represents the unpaid balance of the purchase price for two tractors sold by the plaintiff.
    • The tractors were bought by the defendant Garcia Plantation Co., Inc.
  • Parties Involved
    • Plaintiff/Appellant:
      • Land Settlement and Development Corporation (LASADECO).
    • Defendants/Respondents:
      • Garcia Plantation Co., Inc.
      • Salud C. de Garcia – made an alternative co-defendant due to her execution of promissory notes, thereby personally assuming the account of the company.
      • Vicente B. Garcia – included as co-defendant due to his marital relationship with Salud C. de Garcia.
  • Transactional and Documentary Background
    • The defendants admitted the execution of two promissory notes evidencing their indebtedness to the plaintiff.
    • The issue arose when the defendants contended that a subsequent agreement (documented in a letter marked Exhibit L) novated the original obligation.
    • The letter, issued by Filomeno C. Kintanar, Manager of the Board of Liquidators of LASADECO, granted the defendant Salud C. de Garcia an extension to pay the balance up to May 31, 1957.
    • The extension was said to be given on the understanding that a substantial down payment would be made immediately, with the failure to do so invalidating the extension.
  • Pre-Trial and Trial Proceedings
    • Procedural Postponements:
      • Both parties requested several postponements aiming for an amicable settlement before trial.
      • Despite these requests, the trial on the merits was eventually set and held on July 25, 1957, at 1:00 p.m.
    • Admission of Evidence:
      • At trial, the defendants admitted to all documentary evidence indicating their indebtedness.
      • The plaintiff attempted to introduce parol evidence through the testimony of Atty. Lucido A. Guinto and intended the testimony of Mr. Kintanar to demonstrate the true intent behind Exhibit L.
    • Evidentiary Objection and Ruling:
      • The lower court, presided over by the Hon. B. A. Tan, ruled out the parol evidence on the ground that it violated the parol evidence rule (Rule 123).
      • The exclusion of this evidence precluded the plaintiff from proving that the letter did not reflect the true intention and agreement between the parties regarding the extension.
    • Dismissal of the Case:
      • The lower court dismissed the case on the basis that the action was premature, arguing that since the complaint was filed on February 20, 1957—three months before the payment extension deadline—the suit was brought prematurely.
      • The plaintiff refuted this dismissal by contending that the disputed letter and the related condition precedent (i.e., the necessity of a substantial down payment) were material facts still in issue.
  • Appeal and Issues Raised on Appeal
    • The plaintiff appealed the dismissal, alleging errors on the part of the trial court.
      • Error in compelling the trial despite ongoing amicable settlement discussions.
      • Error in excluding admissible parol evidence that was critical in proving that the extension was subject to a condition precedent.
      • Error in deeming the suit premature despite the plaintiff’s claim that the condition precedent (i.e., the substantial down payment) had not been met, thus rendering the extension ineffective.

Issues:

  • Procedural Issue
    • Whether the trial court erred in insisting on going to trial despite both parties’ requests for a postponement to negotiate an amicable settlement.
  • Evidentiary Issue
    • Whether the exclusion of parol evidence—specifically the testimonies of Atty. Lucido A. Guinto and Mr. Kintanar—was proper, given that it was intended to prove the true intent behind the letter (Exhibit L) and the existence of a condition precedent.
  • Substantive Issue
    • Whether the extension granted in Exhibit L was effective only if the stipulated condition precedent (the substantial down payment) was met.
    • Whether the plaintiff could prove that the failure to satisfy the condition precedent voided the extension, thereby making the complaint timely and the case non-premature.
  • Final Determination on Prematurity
    • Whether the dismissal of the case on the ground that the action was premature was justified under the circumstances.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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