Norton Resources v. All Asia Bank Corporation

Summary

Norton Resources Development Corporation borrowed P3.8 million from All Asia Bank with a P320,000 commitment fee for housing construction under a Memorandum of Agreement. After completing only 35 of 160 planned housing units and defaulting on the loan, Norton claimed the commitment fee should be calculated on a per-unit basis at P2,000 per unit and sought return of P250,000 for unconstructed units. The Supreme Court applied fundamental contract interpretation principles from the Civil Code, emphasizing that clear and unambiguous contract terms must be given their literal meaning. The Court ruled that the MOA unambiguously required lump-sum payment of the commitment fee regardless of actual construction completed, rejecting Norton's attempt to introduce parol evidence to vary the written terms. The decision reinforces that courts cannot rewrite contracts or relieve parties from terms they voluntarily agreed to, highlighting the binding nature of written commercial agreements between sophisticated business entities.