Yu Tek v. Gonzales GR No. 9935 Feb.

1, 1915
Facts: Yu Tek & Co. and Basilio Gonzales entered into a Purchase Agreement covering 600 piculs of sugar at any
place within the municipality of Santa Rosa for P3,000, to be paid in advance. The validity of the Purchase
Agreement was from January 1, 1912 up to March 31, 1912 only. It was also stipulated that failure of Gonzales to
deliver the 600 piculs of sugar within 3 months would rescind the contract, thereby obligating Gonzales to return
the P3,000 to Yu Tek & Co., along with another P1,200 as indemnity for loss and damages.

Due to total failure of his sugar crop that year, Gonzales failed to comply with his obligation. As a defense, he
claimed that the agreement between him and Yu Tek required delivery of the sugar from his own plantation and
nowhere else. Yu Tek & Co., however, claimed that there was no such restriction as to the source of the sugar to
be delivered. Gonzales was free to buy the sugar from the market or raise it himself, so long as he complied with
his obligation.

Issue: Should parole evidence be allowed to determine the true intent of the agreement between Yu Tek & Co. and
Gonzales?

Held: No. This case appears to be one to which the rule excluding parol evidence to add to or vary the terms of a
written contract is decidedly applicable. There is not the slightest intimation in the contract that the sugar was to
be raised by the defendant. Parties are presumed to have reduced to writing all the essential conditions of their
contract. While parole evidence is admissible in a variety of ways to explain the meaning of written contracts, it
cannot serve the purpose of incorporating into the contract additional contemporaneous conditions not
mentioned at all in the contract, in the absence of fraud or mistake.

In this case, Gonzales undertook to deliver a specified quantity of sugar within a specified time. No restriction was
placed as to matter of obtaining the sugar. He was equally at liberty to purchase it on the market or raise it
himself. Though Gonzales owned a plantation and expected to raise the sugar himself, he did not limit his
obligation to his own crop of sugar. Therefore, the condition which Gonzales seeks to add to the contract by parole
evidence cannot be considered. The rights of the parties must be determined by the writing itself.

Doctrine: Parties are presumed to have reduced to writing all the essential conditions of their contract.
While parol evidence is admissible in a variety of ways to explain the meaning of written contracts, it
cannot serve the purpose of incorporating into the contract additional contemporaneous conditions which
are not mentioned at all in the writing, unless there has been fraud or mistake.