G.R. No. 9935 - Yu Tek and Co. vs. Gonzalez

Respondent sought to introduce parol evidence that the sugar must come from his own crop, frustrated by crop failure.
The Court applied the parol‐evidence rule: a written contract is presumed to comprise all essential terms.
Absent fraud or mistake, no extrinsic evidence may add a contemporaneous condition not in the writing.

Gonzalez argued that failure of his crop excused performance under Civil Code provisions on loss of the thing due after a perfected sale (Arts. 1452, 1096, 1182).
A perfected sale requires agreement on the specific thing and price (Art. 1450).
The Court distinguished earlier decisions where particular objects (a tobacco factory, specific shares, a warehouse lot of hemp) were identified and segregated.
Here “sugar” remained a generic commodity; no specific lot was appropriated or set apart.
Conclusion: the agreement was an executory contract to sell, not a perfected sale. Loss of respondent’s own crop did not relieve him of contractual responsibility.

Citation of Louisiana cases confirmed that contracts to supply from general stock by sample constitute executory agreements until specific goods are appropriated or delivered to carriers.
By analogy, Gonzalez’s obligation to deliver generic sugar remained inchoate until actual delivery—title had not passed, and risk of nonperformance fell on him.

The P1,200 specified in paragraph 3 served as liquidated damages agreed by the parties, not a mere cap on ordinary damages.
Under Article 1255, parties may stipulate indemnity for breach provided it does not contravene law or public order.