Assignment 3

VILLA REY TRANSIT, INC. v.
FERRER
25 SCRA 845, October 29, 1968
Doctrine: the requisites for the admissibility of secondary evidence when the original is in the custody of the
adverse party: (1) opponent’s possession of the original, (2) reasonable notice to opponent to produce the
original, (3) satisfactory proof of existence, (4) failure or refusal of opponent to produce the original in court.
As to the first element, it is enough that the circumstances are such as to indicate that the original is in the
actual possession of the adversary.
FACTS: Jose M. Villarama was an operator of a bus transportation, under the business name of Villa Rey
Transit, pursuant to certificates of public convenience granted him by the Public Service Commission
which authorized him to operate thirty--two units on various routes or lines from Pangasinan to Manila,
and vice--versa. On January 8, 1959, he sold the aforementioned two certificates of public convenience to
the Pangasinan Transportation Company, Inc. for Php350,000 with the condition, among others, that the
seller "shall not for a period of 10 years...apply for any TPU service identical or competing with the buyer."
Barely three months later, a corporation called Villa Rey Transit, Inc. was organized with
Natividad R. Villarama, wife of Jose M. Villarama, and the latter’s relatives as incorporators; Natividad
was the Treasurer as well. In less than a month after its registration with the SEC, the corporation bought
five certificates of public convenience, forty--nine buses, tools and equipment from one Valentin Fernando.
On that same day when the contract of sale was executed, the parties immediately applied with the PSC
for its approval, with a prayer for the issuance of a provisional authority in favor of the vendee
Corporation to operate the service therein involved. On May 19, 1959, the PSC granted the provisional
permit prayed for, upon the condition that "it may be modified or revoked by the Commission at any time,
shall be subject to whatever action that may be taken on the basic application and shall be valid only
during the pendency of said application."
Before the PSC could take final action on said application for approval of sale however, the Sheriff
of Manila levied on two of the five certificates of public convenience involved------this is pursuant to a writ of
execution issued by the Court of First Instance of Pangasinan in favor of Eusebio Ferrer, a judgment
creditor of Fernando. A public sale was then conducted by the Sheriff of the said two certificates of public
convenience and Ferrer was the highest bidder, and a certificate of sale was issued in his name. He
eventually sold the certificates of public convenience to Pantranco. PSC thereafter issued a ruling
awarding provisional right to operate to Pantranco. The Corporation took issue with this ruling and
elevated the matter to the Supreme Court which ruled that it should be the Corporation who must
provisionally operate the lines until the dispute on ownership is settled by the proper court. The
Corporation then filed a petition to declare the sheriff’s sale void which the Court of First Instance did.
Thus, Pantranco filed an appeal contending that the Corporation and Jose Villarama are one and the
same, and consequently, the non--competition clause embodied in the deed of sale entered into by Jose
Villarama is also binding to the Corporation. To prove its contention, Pantranco presented photostatic
copies of ledgers and vouchers which showed the comingling of Villarama’s personal funds and those of
the Corporation’s. Villarama assailed the admissibility of the said ledgers and vouchers contending that it
has no evidentiary value as they are merely photocopies of originals and thus are not the best evidence.
ISSUE:
1. Whether or not the photostatic ledgers and vouchers are admissible? – YES.
RATIO: Section 5, Rule 130 provides for the requisites for admissibility of secondary evidence when the
original is in the custody of the adverse party: (l) opponent’s possession of the original, (2) reasonable
notice to opponent to produce the original, (3) satisfactory proof of existence, (4) failure or refusal of
opponent to produce the original in court. In this case, such requisites have been complied with.
Villarama has practically admitted the second and fourth. As to the third, he admitted its previous
existence in the files of the Corporation and had even seen some of them. As to the first, he said that the
originals were missing and the Corporation is no longer in possession of it. However, it is not necessary
for a party seeking to introduce secondary evidence to show that the original is in the actual possession of
his adversary. It is enough that the circumstances are such as to indicate that the writing is in his
possession or under his control. Neither is it required that the party entitled to the custody of the
instrument should, on being notified to produce it, admit having it in his possession. Hence, secondary
evidence is admissible where he denies having it in his possession. The party calling for such evidence
may introduce a copy thereof as in the case of loss. For, among the exceptions to the best evidence rule is
“when the original has been lost, destroyed or cannot be produced in court.” The originals of the vouchers
in question must be deemed to have been lost, as even the Corporation admits such loss. Hence, there
can be no doubt as to the admissibility in evidence of the said photocopies of vouchers & ledgers.
ANALYSIS:
The SC is correct in its ruling. The ruling would still be the same under the Proposed Rules on Evidence.
MICHAEL & CO. v. ENRIQUEZ
33 SCRA 87 December 24, 1915
Doctrine: Trial courts do well in refusing at all times to permit the introduction of incompetent evidence and
particularly secondary evidence of the contents of written instruments unless the facts required by the Code
of Civil Procedure as the conditions precedent for such evidence are clearly shown to exist.
FACTS: The petitioner, E. Michael and Co. claims to be a successor of a sale with a right to repurchase
made by Adriano Enriquez in favor of E. Michael and E. Michael & Co. by virtue of an instrument, duly
executed and delivered to it, transferring property, business and assets of any kind including the land
subject of this litigation. It alleged that the expiration of the right to repurchase------thus, the consolidation
of ownership in the petitioner company.
During the trial, MCI attempted to prove two things which the trial court prevented it from doing:
(1) the execution and delivery of the conveyance transferring to it the land in question and (2) the fact that
the instrument so executed and delivered was lost. Although it was conceded that there were questions
from MCI’s counsel which were rather informal, and thus when objected to was properly sustained, there
were questions, however, which were well--framed and whose answers should be allowed, the trial court
nevertheless sustained objections to it and the evidence sought to be adduced was excluded. Thus, when
the CFI of Cebu dismissed the case on the ground of lack of cause of action, the petitioner company filed
this appeal.
ISSUE:
1. Whether or not the trial court erred in preventing MCI from proving existence and the delivery of the
conveyance transferring to it the land in question? --
RATIO: Trial courts do well in refusing at all times to permit the introduction of incompetent evidence
and particularly secondary evidence of the contents of written instruments unless the facts required by
the Code of Civil Procedure as the conditions precedent for such evidence are clearly shown to exist.
Section 321 of the Code provides:
“An original writing must be produced and proved, except as otherwise provided in this Act.
If it has been lost, proof of the loss must first be made before evidence can be given of its
contents. Upon such proof being made, together with proof of the due execution of the
writing, its contents may be proved by a copy or by a recital of its contents in some
authentic document or by the recollection of a witness.”
As will be seen in this section, the writing itself must be produced unless it has been lost or
destroyed in which case, before its contents may be proved by other evidence, it must be shown by the
party offering secondary evidence that: 1.) that the document was duly executed and delivered, where
delivery is necessary, and;; 2.) that it has been lost or destroyed.
The execution or delivery of the document maybe established by the person or persons, who
executed it, by the person before whom its execution was acknowledged, or by any person who was
present and saw it executed and delivered or who, after its execution and delivery, saw it and recognized
the signatures;; or by a person to whom the parties to the instruments have previously confessed the
execution thereof. The destruction of the instrument may be proved by any person knowing the fact. The
loss may be shown by any person who knew the fact of its loss, or by anyone who has made, in the
judgment of the court, a sufficient examination in the place or places where the document or pares of
similar character are usually kept by the person in whose custody the document lost was, and has been
unable to find it;; or who has made any other investigation which is sufficient to satisfy the Court that the
document was indeed lost.
If it appears, on an attempt to prove the loss, that the document is in fact in existence, then the
proof of loss or destruction fails and secondary evidence is inadmissible unless section 322 of the Civil
code of Procedure should be applicable. After proper proof of the due execution and delivery and its loss
or destruction, oral evidence maybe given of its contents by any person who signed the document, or who
read it, or heard it read knowing, or it being proved from other sources, that the document so read was
the one in question. Such evidence may also be given by any person who was present when the contents
of the document was being talked over between the parties thereto to such an extent as to give him
reasonably full information as to its contents;; or the contents maybe proved by any person to whom the
parties to the instrument have confessed or stated the contents thereof;; or by a copy thereof;; or by a
recital of its contents in some authentic document.
ANALYSIS:
DE VERA v. AGUILAR
218 SCRA 603, February 9, 1993
Doctrine: Secondary evidence is admissible when the original documents were actually lost or destroyed.
But prior to the introduction of such secondary evidence, the proponent must establish the former existence
of the instrument. The correct order of proof is as follows: (1) existence, (2) execution, (3) loss, (4) contents,
although this order may be changed in the discretion of the court.
FACTS: The petitioners De Vera and respondent Leona, married to respondent Aguilar, are the children
and heirs of the late Marcosa Bernabe. During her lifetime, she owned the disputed parcel of land in
Camalig, Maycauayan, Bulacan. Two of the petitioners, Basilio and Felipe, mortgaged said land to Atty.
Bordador. When the mortgage matured, the Aguilar spouses redeemed it from Atty. Bordador and were in
turn sold to them by Marcosa, evidenced by a deed of absolute sale. Thereafter, an OCT was issued in
their name. Three years later, the De Veras wrote to the Aguilar spouses demanding for partition of the
disputed land claiming that as children of Marcosa, they were co--owners of the property. They further
claimed that the Aguilar spouses had resold the property to Marcosa. The Aguilar spouses denied all
these allegations by the De Veras.
The De Veras filed a suit for reconveyance of the lot and the trial court ruled in favor of the
petitioners after admitting, over the objection of the Aguilar spouses, a photocopy of an alleged deed of
sale executed by them in favor of Marcosa. The Court of Appeals reversed the lower court’s decision upon
finding that the loss or destruction of the original deed of sale has not been duly proven by the petitioners
rendering the photocopy of the deed of sale as inadmissible in evidence.
ISSUE:
1. Whether or not the petitioners have satisfactorily proven the loss of the original deed of sale so as to
allow the xeroxed copy of the same? -- YES.
RATIO: Secondary evidence is admissible when the original documents were actually lost or destroyed.
But prior to the introduction of such secondary evidence, the proponent must establish the former
existence of the instrument. The correct order of proof is as follows: (1) existence, (2) execution, (3) loss,
(4) contents, although this order may be changed in the discretion of the court. The sufficiency of proof
offered as a predicate for the admission of an alleged lost deed lies within the judicial discretion of the
trial court under all the circumstances of the particular case. A reading of the decision of the trial court
shows that it merely ruled on the existence and due execution of the alleged deed of sale dated April 28,
2959. It failed to look into the facts and circumstances surrounding the loss or destruction of the original
copies of the alleged deed of sale.
In establishing the execution of a document, the same may be established by the person or
persons who executed it, by the person before whom its execution was acknowledged, or by any person
who was present and saw it executed or who, after its execution saw it and recognized the signatures;; or
by a person to whom the parties to the instrument had previously confessed the execution thereof. The
Court agreed with the findings of the trial court that the petitioners have sufficiently established the due
execution of the alleged deed of sale through the testimony of the notary public.
The destruction of the instrument may be proved by any person knowing the fact. The loss may
be shown by any person who knew the fact of its loss, or by anyone who made, in the judgment of the
court, a sufficient examination in the place or places where the document or papers of similar character
are usually kept by the person in whose custody the document lost was, and has been unable to find it;;
or who has made any other investigation which is sufficient to satisfy the court that the instrument is
indeed lost.
ANALYSIS:
NATIONAL POWER CORPORATION v. CODILLA
G.R. No. 170491 April 4, 2007
Doctrine: When the subject of inquiry is the contents of documents, no evidence shall be admissible other
than the original documents themselves, except in certain cases specifically enumerated therein.
FACTS: M/V Dibena Win, a vessel of foreign registry owned and operated by Bangpai Shipping Co.,
allegedly bumped and damaged the power barge of the National Power Corporation which was then
moored at the Cebu International Port. Consequently, NAPOCOR filed before the RTC a complaint for
damages against Bangpai for the alleged damages caused on its power barge. Thereafter, NAPOCOR filed
an amended complaint, impleading Wallem Shipping Inc., contending that the latter is a ship agent of
Bangpai. Both Bangpai and Wallem filed a motion to dismiss, however, it was denied.
After adducing evidence during the trial, NAPOCOR filed a formal offer of evidence consisting of
Exhibits A to V together with the sub--marked portions thereof. On the other hand, Bangpai and Wallem
filed their respective objections to NAPOCOR’s formal offer of evidence. The RTC denied the admission and
excluding from the records Exhibits A, C, D, E, H and its sub--markings I, J, K, L, M, N, O, P. It argued
that NAPOCOR has been given every opportunity to present the originals of the photocopies of the
documents it offered, but it never produced the originals. Also, the photocopies do not constitute as
electronic evidence as the information was not received, recorded, retrieved or produced electronically.
Moreover, it was not authenticated. Finally, the required affidavit to prove the admissibility and
evidentiary weight of the alleged electronic evidence was not executed, much less presented in evidence.
Therefore, the photocopies must be stricken off the record. Aside from being not properly identified by any
competent witness, the loss of the principals was not established by any competent proof. NAPOCOR filed
a motion for reconsideration, however, it was denied. Petition for certiorari filed with the CA was likewise
denied.
ISSUE:
1. Whether or not the exhibits should be admitted? – NO.
2. Whether or not the photocopies of documents are equivalent to the original documents based on the
Rules on Electronic Evidence? – NO.
RATIO: The pieces of documentary evidence by NAPOCOR were not properly identified by any competent
witness. As correctly pointed out by Bangpai, the witnesses did not have personal knowledge of and
participation in the preparation and making of the pieces of documentary evidence. The pieces of the
documentary evidence were merely photocopies of purported documents or papers. Section 3 of Rule 130
of the Rules of Court states that when the subject of inquiry are the contents of documents, no evidence
shall be admissible other than the original documents themselves, except in certain cases specifically
enumerated therein. NAPOCOR has not shown that the non--presentation or non--production of its original
pieces of documentary evidence falls under such exceptions. The pieces of documentary evidence do not
constitute as electronic evidence. The information therein were not received, retrieved, or produced
electronically. NAPOCOR has not properly authenticated such evidence as electronic documents. Lastly, it
has not established by affidavit the admissibility and evidentiary weight of the said documentary
evidence.
ANALYSIS:
The SC is correct in its ruling, both under the Rules of Evidence and Rules of Electronic Evidence. The
ruling would still be the same upon the application of the Proposed Rules of Evidence. The original
document must be produced, subject to the enumerated exceptions therein.
ESTRADA VS. DESIERTO
G.R. No. 146710-15
April 3 2001
Doctrine: “Evidence is called hearsay when its probative force depends, in whole or in part, on the competency
and credibility of some persons other that the witness by whom it is sought to
produce it. There are three reasons for excluding hearsay evidence: (1) absence of cross examination; (2)
absence of demeanor evidence, and (3) absence of the oath. Not at all hearsay
evidence, however, is inadmissible as evidence. Over the years, a huge body of hearsay evidence
has been admitted by courts due to their relevance, trustworthiness and necessity.”
“A complete analysis of any hearsay problem requires that we further determine whether the
hearsay evidence is one exempted from the rules of exclusion. A more circumspect examination
of our rules of exclusion will show that they do not cover admissions of a party and the Angara
Diary belongs to this class rule on res inter alios acta this rule is expressed in section 28 of Rule
130 of the Rules of Court, viz: “The rights of a party cannot be prejudiced by an act, declaration,
or omission of another, except as hereinafter provided.” The res inter alios acta rule has several
exceptions. One of them is provided in section 29 of Rule 130 with respect to admissions by a
co-partner or agent.”
Facts: The case at bar stemmed from the events that transpired during EDSA II. President Joseph Estrada
pursuant to the calls for resignation, left Malacanang, and pursuant to this, Gloria Macapagal-Arroyo, then
Vice President under Estrada’s reign took place. Estrada now goes to the court to contest the legitimacy of
Arroyo’s Presidency, arguing that he never resigned as President, and hence, hence, claims hence, claims to
still be the lawful President of the Philippines. Among the pieces of evidence offered to prove that Estrada had
indeed resigned from the presidency is the Angara Diary, chronicling the last moments of Estrada in
Malacanang.
Issue: Whether the Angara Diary is inadmissible as hearsay evidence?
Ruling: NO. The Supreme Court held that the Angara diary is not an out-of-court statement but is a part of
the pleadings of the case. Furthermore, the Court noted that the Angara diaries contained direct statements of
Estrada with respect to his proposal for the holding of a snap election, his intent to leave his post by Monday
and his exasperation over the bureaucracy, controversy and red tape. An ANALYSIS of the same leads to the
conclusion that the contents of the diary may be more accurately classified as admissions of a party. Pursuant
to Rules of Evidence, “the act, declaration or omission of a party as to a relevant fact may be given in evidence
against him.”
Moreover, the statements cannot be regarded as hearsay evidence because the same can be properly
categorized as independently relevant statements. Independently relevant statements are those which are
“Independent” from the truth of the statements. Independent relevant statements classified into statements
which consist of the very facts in issue and those which are circumstantial evidence of the facts in issue, such
as the statements of a person showing his state of mind or statements of a person from which an inference
may be made as to the state of mind of another. Pursuant to this, it may well be said that the entries in the
Angara diary may be regarded as containing statements regarding the state of mind of Estrada, hence
constituting circumstantial evidence of his intent to resign.
ANALYSIS: Under the current rules, the decision of the Supreme Court in admitting the Angara Diary is
questionable. By virtue of its decision, does it automatically mean that any document attached to a pleading is
already considered a judicial admission? Moreover, it is noteworthy to mention that the original of the diaries
were not presented in court but merely the copies as reproduced in the newspapers. Despite the fact that the
statements in the diary were made by Angara, they were received by the court as admissions of Estrada.
MCC INDUSTRIAL SALES v. SANGYONG
G.R. No. 170633 October 17, 2007
Doctrine: The terms “Electronic Data Message” and “Electronic Document” do not include a facsimile
transmission or “fax”.
FACTS: MCC Industrial Sales is a domestic corporation engaged in the business of importing and
wholesaling stainless steel products. One of its suppliers is the Ssangyong Corporation. The two
corporations conducted business through telephone calls and facsimile or telecopy transmissions.
Ssangyon would send the pro forma invoices containing the details of the steel product order to MCC. If
the latter conforms thereto, its representative affixes his signature on the faxed copy and sends it back to
Ssangyong, again by fax.
Ssangyong sent by fax a letter addressed to Gregory Chan, MCC Manager and President of Sanyo
Seiki Stainless Steel Corporation, in order to confirm MCC’s and Sanyo Seiki’s order of 220 metric tons of
hot rolled stainless steel under a preferential rate of $1,860 per MT. Chan, on behalf of the corporations,
assented and affixed his signature on the conforme portion of the letter. Ssangyong forwarded to MCC a
pro forma invoice containing the terms and conditions of the transaction. It stated that the payment for
the ordered steel products would be made through an irrevocable letter of credit. MCC sent back by fax to
Ssangyong the invoice bearing the conformity signature of Chan. Because of the confirmed transaction,
Ssangyong placed the order with its steel manufacturer, Pohang Iron and Steel Corporation, in South
Korea and paid the same in full. Ssangyong informed Sanyo Seiki and MCC, by way of fax transmittal,
that it was ready to ship the stainless steel from Korea to the Philippines. It requested that the opening of
the letter of credit be facilitated. Chan affixed his signature on the fax transmittal and returned the same
by fax to Ssangyong. However, both Sanyo Seiki and MCC failed to open the letter of credit.
Thereafter, Ssanyong filed before the RTC a civil action for damages due to breach of contract
against MCC, Sanyo Seiki, and Chan, alleging that the defendants breached their contract when they
refused to open the letter of credit. Defendants filed a demurrer evidence alleging that Ssangyong failed to
present the original copies of the pro forma invoices on which the civil action was based. The RTC
admitted the documentary evidence as electronic evidence and ruled in favor of Ssanyong. Upon appeal to
the CA, the latter affirmed the RTC ruling.
ISSUE:
1. Whether or not the printout of a facsimile transmission an electronic data message or electronic
document and admissible as such? – NO.
RATIO: The Rules on Electronic Evidence provides that an electronic document is considered as an
original document under the Rule on Evidence if it is a printout or output readable by sight or other
means, shown to reflect the data accurately. An electronic document is admissible in evidence if it
complies with the rules on admissibility prescribed by the Rules of Court and related laws, and is
authenticated in the manner prescribed by the said Rules.Thus, to be admissible in evidence as an
electronic data message or to be considered as a functional equivalent of an original document under the
Rule on Evidence, the writing must be an electronic data message or an electronic document.
The Rules on Electronic Evidence defines these terms as follows: “Electronic Data Message” refers
to information generated, sent, received or stored by electronic, optical or similar means. On the other
hand, “Electronic Document” refers to information or the representation of information, data, figures,
symbols or other modes of written expression, described or however represented, by which a right is
established or an obligation extinguished, or by which a fact may be proved and affirmed, which is
received, recorded, transmitted, stored, processed, retrieved or produced electronically. It includes
digitally signed documents and print--out or output, readable by sight or other means, which accurately
reflects the electronic data message or electronic document. For purposes of these Rules, the term
“electronic document” may be used interchangeably with “electronic data message.” (emphasis supplied)
At first glance, facsimile transmissions are considered as electronic documents because they are
sent by electronic means. However, the following amendment was proposed: “Electronic Record” means
data that is recorded or stored on any medium in or by a computer system or other similar device, which
can be read or perceived by a person or by a computer system or other similar device. It includes a
display, printout or other output of that data. As drafted, it would not apply to telexes or faxes, except
computer--generated faxes, unlike the United Nations model law on electronic commerce. A facsimile is not
a genuine and authentic pleading. It is, at best, an exact copy preserving all the marks of an original.
Without the original, there is no way on determining on its face whether the facsimile pleading is genuine
and authentic and was originally signed by the party and his counsel. It may, in fact be a sham pleading.
Since a facsimile transaction is not an electronic data message or an electronic document and
cannot be considered as electronic evidence, with greater reason is a photocopy of such a fax
transmission not electronic evidence. Therefore, the pro forma invoices, which are mere photocopies of the
original fax transmittals, are not electronic evidence.
ANALYSIS:
The SC is incorrect in its ruling. Under the Rule on Electronic Evidence, it is clear that the electronic
document refers to information which is received, recorded, transmitted, stored, processed, retrieved, or
produced electronically. It does not provide as a primary requisite that the information must be recorded
or stored alone. Evidently, facsimile transmissions can be considered as electronic evidence.
TITLE: EBREO VS. EBREO . G.R. No. 160065. February 28, 2006.*
DOCTRINE: It is axiomatic that before a party is allowed to adduce secondary evidence to prove the contents
of the original of a deed or document, the party has to prove with the requisite quantum of evidence, the loss
or destruction or unavailability of all the copies of the original of the said deed or document.
FACTS: A Complaint for Partition, Reconveyance, Accounting and Damages, was filed by Gil Ebreo,
represented by his Attorney-in-Fact Felixberto Ebreo, Flaviano Ebreo and Homobono Cueto against petitioners
Felino Ebreo, Spouses Antonio Ebreo and Evelyn P. Beraña-Ebreo, Ignacio Ebreo and Eleuteria Cueto before
the Regional Trial Court (RTC) of Batangas City, Branch 7. From plaintiffs’ account in their complaint, Felipe
Ebreo died intestate in 1926 leaving behind as heirs his five children, Gil, Flaviano, Felino, Ignacio, and
Felipa.1 Subsequently, Felipa died leaving behind her heirs, Genoveva, Homobono and Eleuteria all surnamed
Cueto. Genoveva died in 1991 without any issue. Defendants-spouses Antonio Ebreo and Evelyn Beraña are
the son and daughter-in-law, respectively, of defendant Felino, one of the five children of Felipe Ebreo.
Pursuant to the subdivision made by their father Felipe, Lot No. 9046 was subdivided into six lots identified as
Lots A, B, C, D, E and F.
On 11 September 1967, the five heirs of Felipe Ebreo, through themselves and their representatives, executed
and signed a document entitled, “Kasulatan ng Pagbabahagi ng Lupa”4 where they extrajudicially partitioned
the above-described property except the portion known as Lot No. 9046-F. As agreed upon by these heirs, Lot
No. 9046-F, with an area of 13,799 square meters, shall remain under the co-ownership of Gil, Flaviano,
Felino, Ignacio and the heirs of Felipa Ebreo. However, plaintiffs were surprised to discover that Lot 9046-F
was declared for taxation purposes in the name of defendant Antonio Ebreo. Based on plaintiffs’ recitals, they
alleged that they never sold, ceded, conveyed or transferred their rights, share and co-ownership over Lot
9046-F.
Defendants argued:
 Lot 9046-F was sold by the heirs to Santiago Puyo. By virtue of this sale, the corresponding Real
Property Tax Declaration was transferred in the name of Santiago Puyo as owner.
 Upon the sale by Santiago Puyo of Lot 9046-F to Antonio Ebreo, Tax Declaration for the year 1977,
was issued in the name of Antonio Ebreo. This Tax Declaration was later on revised and cancelled by
Tax Declaration No. 075-534 upon the marriage of defendant Antonio Ebreo to defendant Evelyn
Beraña. From 1977 up to 1994, defendants-spouses Antonio Ebreo and Evelyn Beraña religiously paid
the taxes due on the land.
 Deed of Absolute Sale of Lot No. 9046-F by the heirs of Felipe Ebreo to Santiago Puyo was executed
and ratified sometime in 1968 before Attorney Doroteo M. Chavez of Batangas City.
 From 1968 to 1976, Mr. Santiago Puyo possessed said lot peacefully, continuously, publicly and in the
concept of owner
RTC & CA ruled in favour of the heirs due to defendant-appellants failed to produce the alleged Deed of Sale in
violation of the Best Evidence Rule. The best evidence rule, applied to documentary evidence, operates as a
rule of exclusion, that is, secondary (or substitutionary) evidence cannot inceptively be introduced as the
original writing itself must be produced in court.
ISSUE: Whether or not the annotation of the Deed of Sale appearing in Tax Declaration No. 48221 is a
sufficient proof of transfer in line with the doctrine of presumption of regularity of performance of official duty?
Whether or not entries in official records are admissible in evidence to establish the fact of valid transfer of Lot
No. 9046-F that effectively conveyed ownership of the property from the heirs of Felipe Ebreo to Santiago
Puyo?
RULING: DENIED.We find the petition bereft of merit.
TAX DECLARATION
 mere fact that the disputed property may have been declared for taxation purposes in the name of the
petitioners does not necessarily prove ownership. Neither does the payment of taxes conclusively prove
ownership of the land paid for.22 It is merely an indicium of a claim of ownership.
 The typewritten entry on Tax Decl. No. 48221 (Exhs. “9” and “9-A”) detailing the particulars of the
alleged deed of sale in favor of Santiago Puyo is patently suspicious and a very very poor ersatz for the
primary document. While the sale allegedly took place in 1967, said deed was annotated on Exh. “9”
which however only “begins with the year 1973.” Moreover, while the alleged sale took place in 1967,
yet Tax. Decl. No. 32941 (Exh. “10”) that was issued on Feb. 7, 1968 still carried the names of Gil,
Flaviano, Felino and Ignacio, all EBREO and Genoveva, Eleuteria and Homobono, all CUETO and not
the name of Santiago Puyo.\
 It is self-evident that the seller cannot transfer more than what he has or as oftenly stated
hyperbolically, the river cannot rise above its source.
 Tax declaration is not sufficient proof of the transfer of property and inasmuch as the subject of
inquiry is the Deed of Sale, it was incumbent on the petitioners to adduce in evidence the original or a
copy of the deed consistent with Section 3, Rule 130 of the Rules of Court. In the absence of the said
document, the exhortations of petitioners regarding the existence of said deed of sale must fail.
To summarize, the testimonies of Pajilan, Felino Ebreo and Asuncion Aguado are at most secondary evidence;
hence, they are inadmissible considering that the petitioners, as offerors of the Deed of Sale, thereof failed to
prove any of the exceptions provided in Section 3, Rule 130 of the Rules of Court and to establish conditions
for their admissibility.30 Even if they are admitted, they have no probative value.
Under this rule, it is axiomatic that before a party is allowed to adduce secondary evidence to prove the
contents of the original of a deed or document, the party has to prove with the requisite quantum of evidence,
the loss or destruction or unavailability of all the copies of the original of the said deed or document.
Indeed, before a party is allowed to adduce secondary evidence to prove the contents of the original of the deed,
the offeror is mandated to prove the following: “(a) the execution and existence of the original (b) the loss and
destruction of the original or its non-production in court; and (c) unavailability of the original is not due to bad
faith on the part of the offeror.”
Both the testimonies of Asuncion Aguado and Antonio Ebreo lacked the legal underpinning needed to prove
the deed of sale. Their testimonies were not recollection of witnesses who saw the execution and delivery of the
document. According to Sec. 4, Rule 130, the contents of the lost writing may be proved, inter alia, by the
recollection of witnesses. As matters stand, however, Aguado’s testimony relates not to the execution of the
document but to what her father (Santiago Puyo) did with the property after it was already acquired. (t.s.n. pp.
4-7, Direct, May 17, 1995) Similarly, Antonio Ebreo’s testimony does not refer to the execution and delivery of
the deed of sale but of having allegedly seen said document when he purchased the lot from Santiago Puyo. He
testified that “when I bought it from Santiago Puyo, he brought with him the Tax Declaration in the name of
Santiago Puyo as well as the deed of sale between my father and his brothers and Santiago Puyo.” (t.s.n. pp.
13-14, Direct, Aug. 16, 1995). In fine, they were not witnesses to the execution and delivery of the document of
sale to qualify their testimonies under the phrase “recollection of witnesses.”
Neither does the testimony of Felino Ebreo evoke faith and confidence. His salutary recollection of the missing
document failed to instill credulity. For one, it was uncorroborated by any of the parties to the alleged deed of
sale. In fact, such sale was directly controverted by his supposed co-sellers and co-owners Giland Flaviano.
Finally, Felino Ebreo’s claim that he could not produce it because it was borrowed by his niece Eleuteria Cueto
and never returned to him was squarely refuted by said Eleuteria Cueto when she testified in rebuttal for the
plaintiffs.
ENRIQUEZ v. RAMOS
G.R. No. L--18077 September 29, 1962
Doctrine: The rule on parol evidence holds true if there is no allegation that the agreement does not express
the true intent of the parties.
Facts:
It is alleged that on November 24, 1958 defendant purchased from plaintiffs 20 parcels of land located
in Quezon City and covered by transfer certificates of title for the amount of P235,056.00 of which only the
amount of P35,056.00 was paid on the date of sale, the balance of P200,000.00 being payable within two years
from the date of sale, with 6% interest per annum during the first year, of the remainder to draw 12% interest
per annum if paid thereafter, provided that at least P100,000.00 should be paid during the first year,
otherwise the whole unpaid balance would become immediately demandable; that to secure the payment of the
balance of P200,000.00 defendant executed a mortgage in favor of plaintiff upon the 20 parcels of land sold
and on a half interest over a parcel of land in Bulacan which was embodied in the same deed of sale; that said
deed of sale with mortgage was registered in the Office of the Registers of Deeds of Quezon City and Pampanga;
and that as defendant broke certain stipulations contained in said deed of sale with mortgage, plaintiffs
instituted the present foreclosure proceedings.
Defendant set up as affirmative defense that the contract mentioned in the complaint does not express
the true agreement of the parties because certain important conditions agreed upon were not included therein
by the counsel who prepared the contract; that the stipulation that was omitted from the contract was the
promise assumed by plaintiffs that they would construct roads in the lands which were to be subdivided for
sale on or before January, 1959; that said condition was not placed in the contract because, according to
plaintiffs' counsel, it was a superfluity, inasmuch as there is an ordinance in Quezon City which requires the
construction of roads in a subdivision before lots therein could be sold; and that, upon the suggestion of
plaintiffs' counsel, their promise to construct the roads was not included in the contract because the ordinance
was deemed part of the contract. Defendant further claims that the true purchase price of the sale was not
P235,056.00 but only P185,000.00, the difference of P50,000.00 being the voluntary contribution of defendant
to the cost of the construction of the roads which plaintiffs assumed to do as abovementioned.
After the reception of the evidence, the trial court sustained the contention of defendant and dismissed
the complaint on the ground that the action of plaintiffs was premature. It found that plaintiffs really assumed
the construction of the roads as a condition precedent to the fulfillment of the obligation stipulated in the
contract on the part of defendant, and since the same has not been undertaken, plaintiffs have no cause of
action. In due time, plaintiffs have appealed.
Issues:
(1) Is the purchase price of the 20 lots bought by defendant from plaintiffs the sum of P185,000.00, as
claimed by defendant, or P235,056.00, as claimed by plaintiffs; and
(2) Was an oral agreement, coetaneous to the execution of the contract of sale, entered into between the parties
to the effect that plaintiffs would undertake the construction of the roads on the lots sold before defendant
could be required to comply with her financial obligation?
Ruling:
Defendant contends that the contract of sale Exhibit A does not express the true agreement of the
parties because certain important conditions agreed upon were not included therein by plaintiffs' counsel
among which is the promise assumed by plaintiffs that they would undertake to construct the roads that may
be required in the subdivision subject of the sale on or before January, 1959; that said condition was not
placed in the contract because plaintiffs' counsel said that it was a superfluity inasmuch as there was then in
Quezon City an ordinance which requires the construction of roads in a subdivision before the lots therein
could be sold; and that, upon the suggestion of plaintiffs' counsel, such commitment was not included in the
contract because the ordinance aforesaid was already deemed to be part of the contract.
Plaintiffs, on the other hand, dispute the above contention arguing that there was no such oral
agreement or understanding because all that was agreed upon between the parties was already expressed and
included in the contract of sale Exhibit A executed between the parties and since defendant failed to pay the
balance of her obligation within the period stipulated, the whole obligation became due and demandable thus
giving plaintiffs the right to foreclose the mortgage in accordance with law.
After considering and evaluating the evidence submitted by both parties, the court a quo found defendant's
contention well-taken, thereby concluding that the action of plaintiffs was premature. In reaching this
conclusion the court a quo made the following comment:
"* * * The Court is of the opinion that the construction of the roads was a condition precedent to the enforcement
of the terms of Exhibit A, particularly the foreclosure of mortgage, for the reason that the subdivision regulations
of Quezon City requires, as a matter of law, that the sellers of lands therein to be converted into subdivision lots
must construct the roads in said subdivision before the lots could be sold. The requirement must have beeen
uppermost in the mind of the parties in this case which led to the execution of the so-called 'Explanation' (Exhibit
3) wherein it is stated that the sum of P50,000.00 was a contribution of the herein defendant for the construction
of the roads which the plaintiffs would undertake 'in accordance with the provisions of the City Ordinance of
Quezon City' (Exhibit 3). It is to be noted that Exhibit 3 was executed on November 24, 1958, the very day when
Exhibit A was also executed. Exhibit 3 also proves that the purchase price is not, as appearing in the deed of sale
with mortgage, Exhibit A, actually P235,000.00 but only P185,000.00 which would approximately be the price of
the entire area of the land sold at the rate of P16.00 per square meter."
We find no error in the conclusion reached by the court a quo for indeed that is the condition to be expected by
a person who desires to purchase a big parcel of land for purposes of subdivision. In a subdivision the main
improvement to be undertaken before it could be sold to the public is feeder roads as otherwise it would be
inaccessible and valueless and would offer no attraction to the buying public. And so it is correct to presume,
as the court a quo did, that when the sale in question was being negotiated the construction of roads in the
prospective subdivision must have been uppermost in the mind of defendant for her purpose in purchasing the
property was to develop it into a subdivision. That such requirement was uppermost in the mind of defendant
is proven by the execution by the plaintiffs of the so-called "Explanation" (Exhibit 3) on the very day the deed of
sale was executed wherein it was stated that the sum of P50,000.00 was advanced by defendant as her
contribution to the construction of the roads which plaintiffs assumed to undertake "in accordance with the
provisions of the City Ordinance of Quezon City." It is to be noted that said document specifically states that
the amount of P50,000.00 should be deducted from the purchase price of P235,056.00 appearing in the deed
of sale, and this is a clear indication that the real purchase price is only P185,000.00, as claimed by
defendant, which would approximately be the price of the entire area of the land at the rate of P16.00 per
square meter.
A circumstance which lends cogency to defendant's claim that the commitment of plaintiffs to construct the
roads was not inserted in the contract because of the assurance made by their counsel that it would be a
superfluity is the fact that in Quezon City there was really an ordinance which requires the construction of
roads in a subdivision before lots therein could be sold, and considering that this assurance came from the
very counsel who prepared the document who even intimated that the ordinance was deemed part of the
contract, defendant must have agreed to the omission relying on the good faith of plaintiffs and their counsel.
At any rate, the execution of the document Exhibit 3 clarifies whatever doubt may have existed with regard to
the true terms of the agreement on the matter.
It is argued that the court a quo erred in allowing the presentation of parole evidence to prove that a
contemporaneous oral agreement was also reached between the parties relative to the construction of the
roads for the same is in violation of our rule which provides that when the terms of an agreement had been
reduced to writing it is to be considered as containing all that has been agreed upon and that no evidence
other than the terms thereof can be admitted between the parties (Section 22, Rule 123). This rule, however,
only holds true if there is no allegation that the agreement does not express the true intent of the parties. If
there is and this claim is put in issue in the pleadings, the same may be the subject of parole evidence (Idem.).
The fact that such failure has been put in issue in this case is patent in the answer wherein defendant has
specifically pleaded that the contract of sale in question does not express the true intent of the parties with
regard to the construction of the roads.
It appearing that plaintiffs have failed to comply with the condition precedent relative to the construction of the
roads in the subdivision in question, it follows that their action is premature as found by the court a quo. The
failure of defendant to pay the realty and income taxes as agreed upon, as well as to register the mortgage with
respect to the Bulacan property, aside from being minor matters, appear sufficiently explained in the brief of
defendant-appellee.
CANUTO v. MARIANO
G.R. No. L--11346 March 21, 1918
Doctrine: The rule forbidding the admission of parol or extrinsic evidence to alter, vary, or contradict a
written instrument does not apply so as to prohibit the establishment by parol of an agreement between the
parties to a writing, entered into subsequent to the time when the written instrument was executed,
notwithstanding such agreement may have the effect of adding to, changing, modifying, or even altogether
abrogating the contract of the parties.
FACTS: Espiridiona Canuto executed a deed of sale of the parcel of land to Juan Mariano for the sum of
Php360, reserving the right to repurchase the land for that amount within 1 year from the date of the
deed of sale. Canuto failed to exercise her right to repurchase, the redemption period having elapsed.
Mariano set up a claim of absolute ownership over the land, notwithstanding the insistent
demand of Canuto that she be permitted to exercise her reserved right of repurchase in accordance with
an alleged oral agreement for the extension of the redemption period. Canuto claimed that 2 days before
the expiration of the original redemption period, she asked Mariano for an extension of time for the
repurchase of the land and Mariano agreed. After the expiration of the redemption period, Canuto decided
to repurchase the land, but Mariano failed to appear at the time and place agreed upon for the payment
of the purchase price and has refused to execute a deed of resale, or to reserve the purchase price agreed
upon, despite Canuto’s repeated demands and tender of purchase price. The trial court ruled in favor of
Canuto.
ISSUE:
1. Whether or not the parol evidence to alter, vary, or contradict a written instrument can be admitted? –
YES.
RATIO: The rule forbidding the admission of parol or extrinsic evidence to alter, vary, or contradict a
written instrument does not apply so as to prohibit the establishment by parol of an agreement between
the parties to a writing, entered into subsequent to the time when the written instrument was executed,
notwithstanding such agreement may have the effect of adding to, changing, modifying, or even altogether
abrogating the contract of the parties as evidenced by the writing;; for the parol evidence does not in any
way deny that the original agreement of the parties was that which the writing purports to express, but
merely goes to show that the parties have exercised their right to change or abrogate the same, or to make
a new and independent contract.
It makes no difference how soon after the execution of the written contract the parol one was
made. If it was in fact subsequent and is otherwise unobjectionable it may be proved and enforced.
ANALYSIS:
YU TEK v. GONZALES
G.R. No. L--9935 February 1, 1915
Doctrine: 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.
FACTS: Yu Tek and Co. and Basilio Gonzales entered into a written contract wherein Gonzales obligated
himself to deliver to Yu Tek 600 piculs of sugar of first and second grade within 3 months in
consideration of the receipt of the sum of Php3,000. However, Gonzales failed to carry out his obligation.
Yu Tek filed an action against Gonzales, proving that no sugar had been delivered that it had not
been able to recover the Php3,000. Meanwhile, Gonzales alleges that the parties intended that the sugar
was to be secured from the crop which he raised on his plantation, and that he was unable to fulfill the
contract by reason of the almost total failure of his crop. The lower court refused to admit the parol
evidence and ruled in favor of Yu Tek.
ISSUE:
1. Whether or not the parol evidence should be admitted? – NO.
RATIO: 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.
In the case at bar, it is sought to show that the sugar was to be obtained exclusively from the
crop raised by the defendant. There is no clause in the written contract which even remotely suggests
such a condition. Gonzales undertook to deliver a specified quantity of sugar within a specified time. The
contract placed no restriction upon him in the matter of obtaining the sugar. He was equally at liberty to
purchase it on the market or raise it himself. It may be true that Gonzales owned a plantation and
expected to raise the sugar himself, but he did not limit his obligation to his own crop of sugar. The
conclusion is that the condition which the defendant seeks to add to the contract by parol evidence
cannot be considered. The rights of the parties must be determined by the writing itself.
ANALYSIS:
LAND SETTLEMENT AND DEVELOPMENT CORPORATION V. GARCIA PLANTATION CO. INC.,
AND/OR SALUD GARCIA AND VICENTA B. GARCIA
G.R. No. L--17820 April 24, 1963
Doctrine: When the operation of the contract is made to depend upon the occurrence of an event, which, for
that reason is a condition precedent, such may be established by parol evidence.
FACTS: Land Settlement and Development Corp. (LASEDECO) sold 2 tractors to Garcia Plantation. The
payment of the purchase price was secured by two promissory notes signed by Salud de Gracia. Upon the
Plantation’s failure to pay such purchase price, LASEDECO filed an action for the collection of P5,955.30.
The defendants, in their answer, admitted the execution of the two promissory notes, but
contended that the same had been novated by a subsequent agreement contained in a letter (Exh. L) sent
by the manager of the Board of Liquidators of the LASEDECO, giving the defendant Salud C. de Garcia an
extension up to May 31, 1957, within which to pay the account, and since the complaint was filed on
February 20, 1957, they claimed that the action was premature and prayed that the complaint be
dismissed.
At the trial, when the plaintiff presented the Legal Officer of the Board of Liquidators, to testify on
the true agreement and the intention of the parties at the time the letter (Exh. L for the defendants) was
drafted and prepared, the lower court, upon the objection of the counsel for defendants, ruled out said
testimony and prevented the introduction of evidence under the parol evidence rule (Sec. 22, Rule 123).
Plaintiff also intended to present the writer of the letter, to testify on the same matter, but in view of the
ruling of the lower court, it rested its case.
ISSUE:
1. Whether the lower court erred in excluding parol evidence, tending to prove the true intention and
agreement of the parties and the existence of a condition precedent, before the extension granted the
defendants, contained in Exhibit L, could become effective? -- YES.
RATIO: The parol evidence consisted of the testimony of Attys. Guinto and Kintanar, to the effect that in
view of the plea of defendant Vicente B. Garcia to give the defendants an extension of time to pay their
accounts, Atty. Kintanar gave the defendants up to May 31, 1957, to coincide with their ramie harvest
"provided that they will make a substantial down payment immediately, with the understanding that
upon non--payment of the substantial amount, the extension shall be deemed as not granted and the
LASEDECO shall feel free to seek redress in court". That there was such condition precedent is
manifested by the second paragraph of the letter Exhibit L, quoted hereunder:
“November 20, 1956

Mrs. Salud de Garcia Tacurong, Cotabato:
Dear Madam;;
Please be advised that the Board has granted you an extension up to May 31, 1957, within which to pay
your account.
This matter has been the subject of agreement between your husband and this office.
Respectfully,(Sgd.) FILOMENO C. KINTANAR”
The subject of agreement alluded to in the second paragraph of the above letter, was the
condition to be complied with or the consideration given for the extension of time, within which the Garcia
spouses pay their account.
The lower court should have admitted the parol evidence sought to be introduced to prove the
failure of the document in question to express the true intent and agreement of the parties. When the
operation of the contract is made to depend upon the occurrence of an event, which, for that reason is a
condition precedent, such may be established by parol evidence.
In the case at bar, reference is made of a previous agreement, in the second paragraph of letter
Exhibit L, and although a document is usually to be interpreted in the precise terms in which it is
couched, Courts, in the exercise of sound discretion, may admit evidence of surrounding circumstances,
in order to arrive at the true intention of the parties.
ANALYSIS:
The general rule under the current rules (Rule 130 §9) is that when the terms of the
agreement have been reduced in writing it is considered as containing all the terms agreed upon and
there can be, between the parties and their successors in interest, no evidence of such terms other
than the contents of the written agreement. One exception to this rule is when a party puts in issue
in his pleading the failure of the written agreement to express the true intent and agreement of the
parties thereto. Thus, the court was correct when it decided that the lower court should have
admitted the parol evidence sought to be introduced to prove the failure of the document in question
to express the true intent and agreement of the parties. The same is provided for by the proposed
rules of evidence. However, the petition must be verified.
MAULINI v. SERRANO
28 PHIL 640 December 16, 1914
Doctrine: If the purpose in presenting an evidence was to show that the contract of indorsement never
existed;; that the minds of the parties never met on the terms of such contract;; that they never mutually
agreed to enter into such contract;; and that there never existed a consideration upon which such an
agreement could be founded it is not prohibited.
FACTS: This is an appeal from a judgment of the Court of First Instance of the city of Manila in favor of
the plaintiff for the sum of P3,000, with interest thereon at the rate of ll/2 per cent month from
September 5, 1912, together with the costs.
The action was brought by the plaintiff upon the contract of indorsement alleged to have been made in his
favor by the defendant upon the following promissory note:
“3,000. Due 5th of September, 1912. We jointly and severally agree to pay to
the order of Don Antonio G. Serrano on or before the 5th day of September,
1912, the sum of three thousand pesos (P3,000) for value received for
commercial operations. Notice and protest renounced. If the sum herein
mentioned is not completely paid on the 5th day of September, 1912, this
instrument will draw interest at the rate of 11⁄2 per cent per month from the date
when due until the date of its complete payment. The makers hereof agree to
pay the additional sum of P500 as attorney's fees in case of failure to pay the note.
Manila, June 5, 1912.
(Sgd.) For Padern, Moreno & Co., by F. Moreno, member of the firm. For
Jose Padern, by F. Moreno. Angel Gimenez.”
The note was indorsed on the back as follows:
“Pay note to the order of Don Fernando Maulini, value received. Manila, June 5,
1912.
(Sgd.) A.G. Serrano.”

ISSUE:
1. Whether Serrano was an accommodation indorser and liable on the note? -- NO.
2. Whether the evidence is admissible? -- YES.
RATIO: The accommodation to which reference is made in Section 29 is not one to the person who takes
the note but one to the maker or indorser of the note.
It is true, that in the case at bar, it was an accommodation to the plaintiff, in the popular sense, to have the
defendant indorse the note;; but it wasn't the accommodation described in the law but rather a mere favor to
him and one which in no way bound Serrano. In cases of accommodation indorsement, the indorser makes
the indorsement for the accommodation of the maker. Such an indorsement is generally for the purpose of
better securing the payment of the note—that is, he lends his name to the maker and not the holder.
Parol evidence is admissible for the purposes named. The prohibition against parol evidence is to
prevent alteration, change, modification, or contradiction of the term of a written instrument, admittedly
existing, by the use of some parol evidence except in cases specifically named in the action. The case at
bar is not one where the evidence offered varies, alters, modifies, or contradicts
the terms of indorsement admittedly existing. The evidence was not offered for that purpose. The purpose
was to show that the contract of indorsement ever existed;; that the minds of the parties never met on the
terms of such contract;; that they never mutually agreed to enter into such contract;; and that there never
existed a consideration upon which such an agreement could be founded.
ANALYSIS:
Under our current rules (Rule 130 §9), when the terms of the agreement have been reduced in writing it is
considered as containing all the terms agreed upon and there can be, between the parties and their
successors in interest, no evidence of such terms other than the contents of the written agreement. This,
however, does not apply where the purpose of considering the drafts is not to vary, alter, or modify the
agreement, but only to discover the intent of the parties thereto and the circumstances surrounding the
execution of the contract.
The Supreme Court resolved the issue on the admissibility of evidence by discussing that the contention
has some of the appearances of a case in where an indorser seeks prove forgery. That is, where an
indorser claims that his name was forged, parol evidence is admissible to prove that fact, and, if he proves
it, it is a complete defense, the fact being that the indorser never made any such contract, that no such
relation never existed between him and the indorsee, and that there was no consideration whatever to
sustain such a contract. In the case before us we have a condition somewhat similar.
The meaning which the majority opinion apparently wishes to convey, in calling attention to the difference
between what, as it says, was the purpose of the evidence presented by the defendant and what was
sought to be proved thereby, is that the defendant does not endeavor to contradict or alter the terms of
the agreement, which is contained in the instrument and is admitted to exist between the parties;; but to
deny the existence of such an agreement between them, that is, the existence of any indorsement at all,
and that any consideration ever passed to sustain the said indorsement, or, in other words, that the
defendant acknowledged the indorsement as regards the form in which it appears to have been drawn up,
but not with respect to its essence, that is, to the truth of the particular facts set forth in the
indorsement.
Thus, the rule does not really apply there being no agreement. Since this case deals in those where the
purpose is to prove the non--existence of the alleged agreement, necessarily, parol evidence should
likewise be admitted under the proposed rules because it is not excluded.
PHILIPPINE NATIONAL BANK v. BENITO SEETO
G.R. No. L--4388 August 13, 1952
Doctrine: Any prior or contemporaneous conversation in connection with a note or its indorsement may be
proved by parole evidence. An extrinsic agreement between indorser and indorsee which cannot be
embodied in the instrument without impairing its credit is provable by parole.
FACTS: On March 13, 1948, Seeto presented to PNB at Surigao a P5,000 check, payable to cash or
bearer, and drawn by one Gan Yek Kiao against the Cebu branch of the Philippine National Bank of
Communications. After consultation with the bank employees, Seeto made a general and unqualified
endorsement of the check, which was accepted by PNB’s agency, which paid Seeto the value of the check
therefore. Upon being presented to the drawee bank for payment, however, the check was dishonored for
“insufficient funds.” PNB demanded refund from Seeto. Seeto, however, refused, claiming that at the time
of the negotiation of the check, the drawer had sufficient funds in the drawee bank, and had not PNB
delayed in forwarding the check until the drawer’s funds were exhausted, the same would have been paid.
PNB alleged that Seeto gave assurances that the drawer of the check had sufficient funds with
the bank, and that Seeto had made a general and unqualified indorsement thereon. As evidence, PNB
presented two witnesses at the trial, who testified that the check was cashed due to assurances given by
Seeto and the promise that he would refund the amount paid by PNB should the check be dishonored.
ISSUE:
1. Whether parol evidence with respect to the verbal assurances made by Seeto be admitted as evidence?
-- YES.
RATIO: Any prior or contemporaneous conversation in connection with a note or its indorsement may be
proved by parol evidence. An extrinsic agreement between indorser and indorsee which cannot be
embodied in the instrument without impairing its credit is provable by parol. If, therefore, the supposed
assurances that the drawer had funds and that the Seeto would refund the amount of the check if the
drawer had no funds, were the considerations or reasons that induced the branch agency of PNB to go
out of its ordinary practice of not cashing out of town checks and accept the check and to pay its face
value, the may be proved by parol, provided, of course, that the assurances or inducements offered would
not vary, alter, or destroy the obligations attached by law to the indorsement.
In this case, however, there was no express obligation assumed by Seeto that the drawer would
always have funds, or that he would refund the amount of the check even if there was delay in its
presentation. Therefore, such assurances were discharged by the unreasonable delay in the presentation
of the check for payment.
ANALYSIS:
The general rule under the current rules (Rule 130 §9) is that when the terms of the agreement have been
reduced in writing it is considered as containing all the terms agreed upon and there can be, between the
parties and their successors in interest, no evidence of such terms other than the contents of the written
agreement. One exception to this rule is when a party puts in issue in his pleading the failure of the
written agreement to express the true intent and agreement of the parties thereto. Thus, the court was
correct when it declared that the supposed assurances that the drawer had funds and that the
respondent herein would refund the amount of the check if the drawer had no funds, were the
considerations or reasons that induced the branch agency of the petitioners to go out of its ordinary
practice of not cashing out of town checks and accept the check and to pay its face value, the same would
be provable by parol, provided, of course, that the assurances or inducements offered would not vary,
alter, or destroy the obligations attached by law to the indorsement.
The same is provided for by the proposed rules of evidence. However, the petition must be verified.
CHARLES F. WOODHOUSE v. FORTUNATO F. HALILI
G.R. No. L--4811 July 31, 1953
Doctrine: If an act or statement was not sought to be introduced to change or alter the terms of the
agreement, but to prove the representations or inducements, or fraud, with which or by which he secured
the other party's consent thereto, it is excluded form the parol evidence rule.
FACTS: Plaintiff entered into a written agreement with the defendant to the effect that they shall organize
a partnership for the bottling and distribution of soft drinks, plaintiff to act as industrial partner or
manager, and the defendant a capitalist furnishing the capital necessary therefor. The defendant claims
that his consent to the agreement was secured by the representation of plaintiff that he was the owner, or
was about to become owner, of an exclusive bottling franchise, which representation was false. The fraud
and false representation were sought to be proven by means, among others, of the drafts of the agreement
prior to the final one, which drafts are presumed to have already been integrated into the final agreement.
ISSUE:
1. Whether those prior drafts excluded from the prohibition of the parol evidence rule? -- YES.
RATIO: The purpose of considering the drafts is not to vary, alter, or modify the agreement, but to
discover the intent of the parties thereto and the circumstances surrounding the execution of the
contract. The issue of fact is, did plaintiff represent to defendant that he had an exclusive franchise?
Certainly, his acts or statements prior to the agreement are essential and relevant to the determination of
said issue. The act or statement of the plaintiff was not sought to be introduced to change or alter the
terms of the agreement, but to prove how he induced the defendant to enter into it -- to prove the
representations or inducements, or fraud, with which or by which he secured the other party's consent
thereto. These are expressly excluded from the parol evidence rule.
Fraud and false representation are an incident to the creation of a jural act, not to its integration,
and are not governed by the rules on integration. Where parties prohibited from proving said
representations or inducements, on the ground that the agreement had already been entered into, it
would be impossible to prove misrepresentation or fraud. The parol evidence rule expressly allows the
evidence to be introduced when the validity of an instrument is put in issue by the pleadings (sec. 22--a of
Rule 123)
ANALYSIS:
written agreement to express the true intent and agreement of the parties thereto. In this case, there is no
need to apply the provision because the purpose of considering the drafts is not to vary, alter, or modify
the agreement, but only to discover the intent of the parties thereto and the circumstances surrounding
the execution of the contract.
The same is provided for by the proposed rules of evidence. However, if the offeror will attempt to modify,
explain or add terms to the agreement, the petition must be verified.
ZACARIAS ROBLES v. LIZARRAGA HERMANOS
G.R. No. L--26173 July 13, 1927
Doctrine: The rule against the admission of parole evidence does not extend so far as to preclude the
admission of extrinsic evidence to show prior or contemporaneous collateral parole agreements between the
parties, but such evidence may be received, regardless of whether or not the written agreement contains
any reference to such collateral agreement, and whether the action is at law or in equity.
FACTS: Anastacia de la Rama, as administratrix of the estate of her husband, leased the hacienda
“Nahalinan” to Zacarias Robles, Jr. for six years. Robles, Jr., at his expense and without any right of
indemnity at the end of the term, made various improvements and additions to the plant.
Three years before the lease was to expire, Lizarraga Hermanos, a mercantile partnership,
proposed to buy all of the property belonging to the hacienda. As Robles, Jr., still had over two years in
his lease contract, he was asked to surrender such last two years and permit Lizarraga Hermanos to take
possession as buyer. Lizarraga Hermanos agreed to pay him the value of all betterments made on the
hacienda and to buy from him all that belonged to him personally on the hacienda. However, no reference
of such surrender of Robles’ rights as lessee, except in fixing the date when the lease should end, nor of
anything said concerning the improvements or property of a personal nature, was placed in the
instrument of conveyance later executed.
Robles, Jr filed a complaint against Lizarraga Hermanos for the recovery of compensation for
improvements made by him on the hacienda and the value of implements and farming equipment
supplied by him, as well as damages for breach of contract. As evidence, he presented a letter written by
Severiano Lizarraga to him, in which a reference is made to an appraisal and liquidation. Lizarraga
Hermanos, however, assailed the admission of the letter as being prohibited parole evidence.
ISSUE:
1. Whether the letter admissible as evidence apart from the instrument of conveyance? -- YES.
RATIO: The purpose of the parole evidence is to enforce an independent or collateral agreement
constituting an inducement or the making of the sale, or part of the consideration therefore. There is no
rule of evidence of wider application than that which declares intrinsic evidence inadmissible either to
contradict or vary the terms of a written contract, such being deemed to supersede all oral negotiations or
stipulations concerning its terms and the subject--matter which preceded the execution of the instrument,
in the absence of accident, fraud or mistake of fact. However, such rule does not extend so far as to
preclude the admission of extrinsic evidence to show prior or contemporaneous collateral parole
agreements between the parties, but such evidence may be received, regardless of whether or not the
written agreement contains any reference to such collateral agreement, and whether the action is at law
or in equity.
In this case, the deed of conveyance purports to transfer to Lizarraga Hermanos only such
interests in certain properties as had come to the conveyors by inheritance, not those which Robles, Jr.
had acquired by lease or purchase, or those that he had placed thereon by way of improvement. The
verbal contract established in this case is therefore clearly independent of the main contract of
conveyance, and evidence of such is admissible under the doctrine above stated. The written contract is
complete in itself, the oral agreement is also complete in itself, and it is a collateral to the written
contract, notwithstanding the fact that it deals with related matters.
ANALYSIS:
written agreement to express the true intent and agreement of the parties thereto.
The Court was correct when it did not apply the provision in this case because the purpose of considering
the drafts is not to vary, alter, or modify the agreement, but only to discover the intent of the parties
thereto and the circumstances surrounding the execution of the contract.
The same is provided for by the proposed rules of evidence. However, if the offeror will attempt to modify,
explain or add terms to the agreement, the petition must be verified.
LUCIO R. CRUZ v. COURT OF APPEALS
G.R. No. 79962 December 10, 1990
Doctrine: The parole evidence rule is predicated on the existence of a document embodying the terms of an
agreement. A receipt is not such a document as it merely attests to the receipt of money and it is not and
could have not been intended by the parties to be the sole memorial of their agreement.
FACTS: Conrado Salonga filed a complaint for collection and damages against petitioner Lucio Cruz
alleging that in the course of their business transactions of buying and selling fish, the petitioner
borrowed from him an amount of P35,000.00, evidenced by a receipt (Exhibit D). Salonga claimed that of
this amount, only P20,000.00 had been paid. Salonga also claimed that he and Cruz agreed that the
latter would grant him an exclusive right to purchase the harvest of certain fishponds leased by Cruz in
exchange for certain loan accommodations and that pursuant thereto, Salonga delivered to Cruz various
loans totaling P15,250.00, evidenced by four receipts and an additional P4,000.00, the receipt of which
had been lost. Salonga further claimed that Cruz failed to comply with his part of the agreement by
refusing to deliver the alleged harvest of the fishpond and the amount of his indebtedness.
Cruz denied having contracted any loan from Salonga. By way of special defense, he alleged that he was a
lessee of several hectares of a fishpond owned by Nemesio Yabut and that he entered into an agreement
with Salonga whereby the latter would purchase (pakyaw) fish in certain areas of the fishpond. They also
agreed that immediately thereafter, Salonga would sublease the same fishpond for a period of one year.
Cruz admitted having received the amounts mentioned but he contended that these amounts were
received by him not as loans but as consideration for their "pakyaw" agreement and payment for the
sublease of the fishpond.
Cruz presented an instrument (Exh. I) executed to evidence their "pakyaw" agreement and to fix
its duration. He was corroborated by 2 witnesses. The trial court ruled in favor of the Cruz but the CA
reversed stating that Exhibit "I" is very clear in its non--reference to the transaction behind Exhibit "D."
Thus, its tenor must not be clouded by any parole evidence introduced by the Cruz.
ISSUE:
1. Whether the CA erred in disregarding parole evidence to Exhibits "D" and "I" to explain the real
transaction between the parties? – YES.
RATIO: The parole evidence rule is not applicable in the case at bar. Section 7, Rule 130 is predicated on
the existence of a document embodying the terms of an agreement, but Exhibit D does not contain such
an agreement. It is only a receipt attesting to the fact that petitioner received from the private respondent
the amount of P35,000. It is not and could have not been intended by the parties to be the sole memorial
of their agreement. As a matter of fact, Exhibit D does not even mention the transaction that gave rise to
its issuance. At most, Exhibit D can only be considered a casual memorandum of a transaction between
the parties and an acknowledgment of the receipt of money executed by the petitioner for the private
respondent's satisfaction.
The "pakyaw" was mentioned only in Exhibit I, which also declared the petitioner's receipt of
money as consideration for the agreement. The petitioner and his witnesses testified to show when and
under what circumstances the money was received. Their testimonies do not in any way vary or
contradict the terms of Exhibit I. The statement in Exhibit I of the petitioner's receipt of the money is just
a statement of fact. It is a mere acknowledgment of the distinct act of payment made by the private
respondent. Parole evidence may therefore be introduced to explain Exhibit I.
Even if it were assumed that Exhibits D and I are covered by the parole evidence rule, its
application by the CA was improper. The record shows that no objection was made by the private
respondent when the petitioner introduced evidence to explain the circumstances behind the execution
and issuance of the said instruments. For failure of private respondent to object to the evidence
introduced by the petitioner, he is deemed to have waived the benefit of the parole evidence rule.
ANALYSIS:
The Court correctly applied the Revised Rules on Evidence in this case. The Parole Evidence Rule only
applies when a document embodying the agreement between the parties is present. The case would have
been decided the same way if the Proposed Rules of Evidence were applied since there is no change in the
requirements for the Parole Evidence Rule to apply, under the Proposed Rules.
VICTORIA LECHUGAS v. COURT OF APPEALS
G.R. No. L--39972 & L--40300 August 6, 1986
Doctrine: The parole evidence rule does not apply, and may not properly be invoked by either party to the
litigation against the other, where at least one of the parties to the suit is not party or a privy of a party to
the written instrument in question and does not base a claim on the instrument or assert a right originating
in the instrument or the relation established thereby.
FACTS: Petitioner Lechugas filed a complaint for forcible entry with damages against the private
respondents Lozas, alleging that the latter by means of force, intimidation, strategy and stealth,
unlawfully entered 2 portion of the property owned by the petitioner. Lechugas testified that she bought
the subject land from Leoncia Lasangue as evidenced by a public Deed of Absolute Sale. While Guinta,
tenant of Lechugas, was plowing the land, defendants entered the land and forced him to stop his work
and threatened him. Lechugas reported the incident to the Chief of Police but the defendants stayed
adamantly on the lot and refused to surrender the possession thereof. Defendants, on the other hand,
maintain that the land which plaintiff bought from Lasangue is different from the land now subject of this
action. Defendant's evidence in chief shows that Hugo Loza purchased a 2 parcels of land from Victorina
Limor and Emetrio Lasangue and these two lands were consolidated during the cadastral survey. The
Lozas claim that the land bought by Lechugas is south of the land in question.
Furthermore, Leoncia Lasangue (the vendor) testified for the defendants stating that she sold her
inherited property to Lechugas under a public instrument which was prepared at the instance of Victoria
Lechugas and thumbmarked by herself. Although she was illiterate, she was still able to specifically point
out the land which she sold to the petitioner. This property is south of the land in question. The
complaint was dismissed. Petitioner then appealed to the then CFI of Iloilo. While the above appeal was
pending, the petitioner instituted another action before the CFI of Iloilo for recovery and possession of the
same property against the private respondents. CFI dismissed both complaints. CA affirmed. Petitioner
filed a petition for review invoking the parole evidence rule as it imputes grave abuse of discretion on the
part of the CA for admitting and giving credence to the testimony of the vendor regarding the sale of the
disputed lot. The testimony is contrary to the contents of the deed of sale executed by the vendor in favor
of the petitioner.
ISSUE:
1. Whether the CA erred in considering parole evidence in order to vary the subject matter of the deed of
sale? – NO.
RATIO: The petitioner's reliance on the parole evidence rule is misplaced. The rule is not applicable where
the controversy is between one of the parties to the document and third persons. The deed of sale was
executed by Leoncia Lasangue in favor of Victoria Lechugas. The dispute over what was actually sold is
between petitioner and the private respondents. In the case at bar, through the testimony of Leoncia
Lasangue, it was shown that what she really intended to sell, but not being able to read and write and
fully relying on the good faith of her first cousin, the petitioner, she just placed her thumbmark on a piece
of paper which petitioner told her was the document evidencing the sale of land. The deed of sale
described the disputed lot instead. From the foregoing, there can be no other conclusion but that
Lasangue did not intend to sell as she could not have sold, a piece of land already sold by her father to
the predecessor--in--interest of the respondents.
ANALYSIS:
The Parole Evidence Rule under the Revised Rules on Evidence is not applicable where the controversy is
between a party to the document in question and third persons. The case was decided correctly under
such Rules as well as under the Proposed Rules on Evidence.
BALDOMERO INCIONG, JR. v. COURT OF APPEALS
G.R. No. 96405 June 26, 1996
Doctrine: For the parole evidence rule to apply, a written contract need not be in any particular form, or be
signed by both parties. What is required is that the agreement be in writing since written evidence is so
much more certain and accurate than that which rests in fleeting memory only.
FACTS: Inciong incurred liability through a promissory note in the amount of P50,000.00 which he
signed with Naybe and Pantanosas, holding themselves jointly and severally liable to private respondent
Philippine Bank of Communications, Cagayan de Oro City branch. The promissors were not able to pay
when the note became due. PBC made demands but when they were not heeded, PBC filed a complaint
for collection against the three obligors.
In his answer, Inciong alleged that he was approached by his friend, Rudy Campos, who told him that he
was a partner of Pio Tio, the branch manager of PBC in Cagayan de Oro City, in the falcata logs operation
business. Campos persuaded petitioner to act as a "co--maker" with Naybe in a loan in order to buy a
chainsaw to contribute to the partnership. Petitioner allegedly acceded but with the understanding that
he would only be a co--maker for the loan. Petitioner alleged further that 5 copies of a blank promissory
note were brought to him by Campos at his office. He affixed his signature thereto but in one copy, he
indicated that he bound himself only for the amount of P5,000.00. Thus, it was by trickery, fraud and
misrepresentation that he was made liable for the amount of P50,000.00.
The lower court ruled in favor of PBC noting that that the typewritten figure “50,000” clearly
appears directly below the signature of the petitioner in the promissory note. The lower court also noted
that petitioner was a holder of a Bachelor of Laws degree and a labor consultant who was supposed to
take due care of his concerns. The CA affirmed the decision of the lower court. Petitioner asserted that
since the promissory note is not a public deed with the formalities prescribed by law but a mere
commercial paper which does not bear the signature of attesting witnesses, parole evidence may overcome
the contents of the promissory note.
ISSUE:
1. Whether Inciong can present parole evidence to prove that he was only liable for P5,000.00 and not for
P50,000.00 as provided in the promissory note? – NO.
RATIO: The parole evidence rule does not specify that the written agreement needs to be a public
document. What is required is that the agreement be in writing since written evidence is so much more
certain and accurate than that which rests in fleeting memory only, that it would be unsafe, when parties
have expressed the terms of their contract in writing, to admit weaker evidence to control and vary the
stronger and to show that the parties intended a different contract from that expressed in the writing
signed by them."
Thus, for the parole evidence rule to apply, a written contract need not be in any particular form,
or be signed by both parties. As a general rule, bills, notes and other instruments of a similar nature are
not subject to be varied or contradicted by parol or extrinsic evidence. By alleging fraud in his answer,
petitioner was actually in the right direction towards proving that he and his co--makers agreed to a loan
of P5,000.00 only considering that, where a parole contemporaneous agreement was the inducing and
moving cause of the written contract, it may be shown by parole evidence. However, fraud must be
established by clear and convincing evidence, mere preponderance of evidence, not even being adequate.
Petitioner's attempt to prove fraud must, therefore, fail as it was evidenced only by his own
uncorroborated and, expectedly, self--serving testimony.
ANALYSIS:
Under the Revised Rules on Evidence, the only requirement for the application of the Parole Evidence
Rule is that the agreement be in writing. There is no requirement that the agreement be in a public
document. As such, this case was decided properly. Even under the Proposed Rules on Evidence, this
case will still be decided the same way since there are no additional requirements provided under such
Rules.
RAFAEL S. ORTAÑEZ v. THE COURT OF APPEALS
G.R. No. 107372 January 23, 1997
Doctrine: Although parole evidence is admissible to explain the meaning of a contract, 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.
FACTS: The private respondents Inocentes spouses sold to petitioner Ortanez 2 parcels of registered land
in Quezon City for a consideration of P35,000.00 and P20,000.00, respectively. The spouses received the
payments for the above--mentioned lots, but failed to deliver the titles to petitioner. Ortanez demanded
from the former the delivery of said titles. Private respondents, however, refused on the ground that the
title of the first lot is in the possession of another person, and petitioner's acquisition of the title of the
other lot is subject to certain conditions. Petitioner sued private respondents for specific performance
before the RTC.
In their answer with counterclaim private respondents merely alleged the existence of the
following oral conditions which were never reflected in the deeds of sale: (1) that plaintiff will cause the
segregation of his right of way amounting to 398 sq. m., (2) Plaintiff will submit to the defendants the
approved plan for the segregation, (3) Plaintiff will put up a strong wall between his property and that of
defendants' lot to segregate his right of way, and (4) Plaintiff will pay the capital gains tax and all other
expenses that may be incurred by reason of sale. During trial, private respondent Oscar Inocentes, a
former judge, orally testified that the sale was subject to the above conditions, although such conditions
were not incorporated in the deeds of sale. Despite petitioner's timely objections on the ground that the
introduction of said oral conditions was barred by the parole evidence rule, the lower court nonetheless,
admitted them and eventually dismissed the complaint as well as the counterclaim. On appeal, the CA
affirmed the lower court’s decision.
ISSUE:
1. Whether parole evidence should be admitted on to establish the alleged oral conditions--precedent to a
contract of sale, when the deeds of sale are silent on such conditions? – NO.
RATIO: Private respondents' oral testimony on the alleged conditions, coming from a party who has an
interest in the outcome of the case, depending exclusively on human memory, is not as reliable as written
or documentary evidence. Spoken words could be notoriously unreliable unlike a written contract which
speaks of a uniform language. Considering that the written deeds of sale were the only repository of the
truth, whatever is not found in said instruments must have been waived and abandoned by the parties.
Examining the deeds of sale, we cannot even make an inference that the sale was subject to any
condition. As a contract, it is the law between the parties.
Although parole evidence is admissible to explain the meaning of a contract, 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. No such fraud or mistake exists in
this case. The deeds of sale are clear, without any ambiguity, mistake or imperfection, much less
obscurity or doubt in the terms thereof. The Record shows that private respondents did not expressly
plead that the deeds of sale were incomplete or that it did not reflect the intention of the buyer and the
seller. Private respondents merely alleged that the sale was subject to 4 conditions which they tried to
prove during trial by parole evidence. Obviously, this cannot be done, because they did not plead any of
the exceptions mentioned in the parole evidence rule. Their case is covered by the general rule that the
contents of the writing are the only repository of the terms of the agreement.
ANALYSIS:
This case was decided properly under the Revised Rules on Evidence since the court applied the Parole
Evidence Rule correctly. There was no fraud or mistake shown in the contract between the parties and so
no parole evidence was admissible to explain the meaning of such. Under the Proposed Rules on
Evidence, the case would have been decided the same way since there is no major revision under such
Rules regarding the Parole Evidence Rule.
TITLE:
ROSARIO TEXTILE MILLS CORPORATION and EDILBERTO YUJUICO, petitioners vs. HOME BANKERS
SAVINGS COMPANY, respondent
(G.R. No. 137232; 29 June 2005)
DOCTRINE:
“A trust receipt a security transaction intended to aid in financing importers and retail dealers who do
not have sufficient funds or resources to finance the importation or purchase of merchandise, and who may
not be able to acquire credit except through utilization, as collateral, of the merchandise imported or
purchased (Samo v People). We elucidated further that "a trust receipt, therefore, is a security agreement,
pursuant to which a bank acquires a 'security interest' in the goods. It secures an indebtedness and there can
be no such thing as security interest that secures no obligation." (Vintola v. Insular Bank of Asia and America).”
FACTS:
Sometime in 1989, Rosario Textile Mills Corporation (RTMC) applied from Home Bankers Savings &
Trust Co. for an Omnibus Credit Line for P10 million. The bank approved RTMC’s credit line but for only P8
million. The bank notified RTMC of the grant of the said loan thru a letter dated March 2, 1989 which contains
terms and conditions conformed by RTMC thru Edilberto V. Yujuico. On March 3, 1989, Yujuico signed a
Surety Agreement in favor of the bank, in which he bound himself jointly and severally with RTMC for the
payment of all RTMC’s indebtedness to the bank from 1989 to 1990. RTMC availed of the credit line by making
numerous drawdowns, each drawdown being covered by a separate promissory note and trust receipt. RTMC,
represented by Yujuico, executed in favor of the bank a total of eleven (11) promissory notes. Yujuico contend
that he should be absolved from liability. They claimed that although the grant of the credit line and the
execution of the suretyship agreement. They alleged that the bank gave assurance that the suretyship
agreement was merely a formality under which Yujuico will not be personally liable. He theorized that when
RTMC imported the raw materials needed for its manufacture, using the credit line, it was merely acting on
behalf of the bank, the true owner of the goods by virtue of the trust receipts.After the trial, the Court a quo
rendered a decision in favor of the bank. Dissatisfied, RTMC and Yujuico, herein petitioners, appealed to the
Court of Appeals. The Court of Appeals, however, affirmed the trial court's judgment, holding that the bank is
merely the holder of the security for its advance payments to petitioners; and that the goods they purchased,
through the credit line extended by the bank, belong to them and hold said goods at their own risk.
ISSUE:
Whether or not the Court of Appeals erred when it ruled that petitioners are solidarily liable for the
payment of their obligations to the bank
RULING:
No. The Supreme Court rejected Yujuico’s contention for two reasons. First, there is no record
to support his allegation that the surety agreement is a "mere formality;" andSecond, as correctly held by the
Court of Appeals, the Suretyship Agreement signed by petitioner Yujuico binds him. The terms clearly show
that he agreed to pay the bank jointly and severally with RTMC. The parol evidence rule under Section 9, Rule
130 of the Revised Rules of Court is in point, thus: "SEC. 9. Evidence of written agreements. — When the
terms of an agreement have been reduced in writing, it is considered as containing all the terms agreed upon
and there can be, between the parties and their successors in interest, no evidence of such terms other than
the contents of the written agreement. However, a party may present evidence to modify, explain, or add to the
terms of the written agreement if he puts in issue in his pleading: (a) An intrinsic ambiguity, mistake, or
imperfection in the written agreement; (b) The failure of the written agreement to express the true intent and
agreement of the parties thereto; (c) The validity of the written agreement; or (d) The existence of other terms
agreed to by the parties or their successors in interest after the execution of the written agreement.
Under this Rule, the terms of a contract are rendered conclusive upon the parties and
evidence aliunde is not admissible to vary or contradict a complete and enforceable agreement embodied in a
document. We have carefully examined the Suretyship Agreement signed by Yujuico and found no ambiguity
therein. Documents must be taken as explaining all the terms of the agreement between the parties when
there appears to be no ambiguity in the language of said documents nor any failure to express the true intent
and agreement of the parties.|||
DOCTRINE: Parol evidence may be resorted to if the same does not express the true intent of the parties.
MADRIGAL V CA
GR No. 142944
April 15, 2005
FACTS: In need of money for his wife’s planned travel to the United States, Jose thought of mortgaging the
above property with a bank. However, his son Virgilio Mallari who is residing with his own family somewhere
in San Ildefonso, Bulacan convinced Jose not to proceed with the intended mortgage and to instead assign to
him a portion of the same property, assuring his father that the latter could continue in occupancy of the
property and that he will allow his sister Elizabeth who operates a store thereat to continue with the same.
Virgilio told his father, however, that he will occupy one of the rooms in the house in case he goes to Olongapo
City on vacation and that he will renovate the other room and reserve it for his mother when she comes back
from the States. Virgilio assured his father that he will not dispose of the property without his father’s consent
and that the latter could redeem the said property any time he acquires money.
However, Jose and his wife executed a deed of absolute sale in favor of Virgilio for P50, 000.00 withholding the
promise of Virgilio not to sell the property. Subsequently it was sold to Madrigal without the consent of his
parents.
Jose, now, assails the validity of the sale. Virgilio claimed that the deed of absolute sale is clearly a document
of sale and not a mortgage as the trial court ruled.
ISSUE: Whether or not the trial court erred in receiving parole evidence
HELD: NO. The trial court did not err in ruling receiving the parole evidence.
In any event, at bottom of petitioners’ first submission is their inability to accept the factual findings of the two
(2) courts below that the transaction between petitioner Virgilio Mallari and his parents, albeit denominated as
one of absolute sale, is in reality an equitable mortgage. In short, petitioners would want us to revisit the
factual findings of both courts, scrutinize and examine those findings anew and calibrate the validity of their
conclusions on the basis of our own factual assessment.
PEOPLE v. DE JESUS
G.R. No. L--39087 April 27, 1984
Doctrine: Mental illness does not automatically disqualify a witness from testifying. It is sufficient that the
witness can perceive and communicate in her own way her perceptions.
FACTS: Clara Mina, a feeble--minded single woman of 28, lived with her parents in barrio Amistad,
Alicia, Isabela. At around 2:00 in the afternoon of January 3, 1974, Clara was left in the house when
members of the household went farming. Rogelio De Jesus, a neighbor, entered Calara’s house and with
the use of force, raped the feeble-minded woman. Pastora Simon, Clara’s mother, happened to return to
the house and caught De Jesus in the act. The latter managed to escape. Simon reported the incident to
the police and had her daughter examined by the municipal health officer. De Jesus subsequently
surrendered.
During trial, De Jesus testified in his defense. He claimed that he only admitted to the authorities
that he had sexual intercourse with Clara due to his maltreatment by the jail guards. De Jesus also
testified that he only inserted his finger into Clara’s vagina to “cure” her mental malady. Clara on the
other hand testified for the prosecution and narrated the events leading to her rape albeit with some
difficulty because of her mental condition. Giving great weight to the testimony of Clara, the Circuit
Criminal Court of Isabela found De Jesus guilty of rape. The accused appealed to the Supreme Court
challenging the competency of Clara as a witness.
ISSUE:
1. Whether the feeble--minded Clara qualifies as a competent witness? – YES.
RATIO: It is undisputed that Clara is mentally--ill. However, there is no showing that she could not convey
her ideas by words or signs. Clara gave sufficiently intelligible answers. The Court was satisfied that Clara
can perceive and transport in her own way her perceptions. The ruling of the lower court was affirmed.
ANALYSIS:
The Proposed Rules of Evidence has omitted the current rule on Disqualification by Reason of
Mental Incapacity or Immaturity under Section 21 Rule 130 of the Revised Rules of Evidence. This
demonstrates an adherence to Supreme Court decisions like People v. De Jesus where the Court
deliberately overlooked the fact of mental illness of the witness and determined his competence on the
basis of his capacities of perception, recollection, and relation. Despite the omission, the Proposed Rules
has no foreseeable impact on the ruling in this case because its provision on the qualification of witnesses
has faithfully retained the wording of Section 20 Rule 130 of the Revised Rules of Court which provides
the main standard in determining the competency of a witness.
PEOPLE v. SALOMON
G.R. No. 96848 January 21, 1994
Doctrine: The acceptance of a witness depends on the quality of his perceptions and the manner he can
make them known to the court.
FACTS: Alejandro Salomon and Feliciano Conge were charged with the rape of Sylvia Soria, a 20 year--old
mental retardate. The complaint alleged that while Sylvia was walking along the Maharlika Highway at
Gandara, Samar, the retardate was accosted and taken by the two accused to a nearby rice field where
she was raped by Salomon with the assistance of Conge. After the rape, Sylvia reported her ordeal to her
father Restituto who later initiated the rape complaint in behalf of Sylvia and had her examined at the
Gandara General Hospital. Three days later, Salomon and Conge went missing. The two were arrested in
Masbate after four months.
During trial, Sylvia served as the principal witness for the prosecution. She described how she
was forcibly undressed and raped against her will. Sylvia testified that she couldn’t resist the accused
because the two were stronger than her and Conge was holding a bolo. Her low mentality was
demonstrated in her angry testimony of her refusal to accede to Salomon’s demand that she suck his
penis: “The devil with him, it is not an icedrop.” In their defense, the accused testified that there was no
rape, and that the penetration of the victim’s vagina only happened because she attacked Conge (allegedly
for not being able to borrow a lamp) and the latter retaliated and tried to disable her by inserting his hand
into her vagina. The accused also assailed the credibility of Sylvia by alleging that her testimony was
flawed and unworthy of belief because of her mental state and her previous confinement in a mental
institution. The RTC of Calbayog City found the accused guilty of rape. Salomon and Conge appealed to
the Supreme Court faulting the trial judge for giving credence to Sylvia’s testimony.
ISSUE:
1. Whether the testimony of Sylvia should be given credence despite her mental illness and her previous
confinement in a mental institution? – YES.
RATIO: The acceptance of a witness depends on the quality of his perceptions and the manner he can
make them known to the court. The testimony of Soria was positive, clear, plain, coherent and credible
despite her slurred speech and the use of leading questions. Also, the Court took judicial notice of the fact
that a Filipino woman does not ordinarily expose herself in a rape trial unless she was truly wronged.
ANALYSIS:
The Proposed Rules of Evidence has omitted the current rule on Disqualification by Reason of Mental
Incapacity or Immaturity under Section 21 Rule 130 of the Revised Rules of Evidence. This demonstrates
an adherence to Supreme Court decisions like People v. De Jesus and People v. Salomon where the Court
deliberately overlooked the fact of mental illness of the witness and determined his competence on the
basis of his capacities of perception, recollection, and relation. Despite the omission, the Proposed Rules
has no foreseeable impact on the ruling in this case because its provision on the qualification of witnesses
has faithfully retained the wording of Section 20 Rule 130 of the Revised Rules of Court which provides
the main standard in determining the competency of a witness.
PEOPLE v. MENDOZA
G.R. No. 113791 February 22, 1996
Doctrine: For a child witness to be competent, it must be shown that he has the capacity of (1) observation,
(2) of recollection, and (3) of communication.
FACTS: Rolando Mendoza was charged with Parricide in the RTC of Malolos for killing his wife Gina
Mendoza who died of hypostatic pneumonia and infected fourth degree burns. During trial, the
testimony of Paul Mendoza, the 5 year--old son of Rolando and Gina Mendoza, was presented by the
prosecution. Paul declared that one evening, inside their house, the accused boxed his mother on her
mouth and tied her up. However, the child refused to testify further and appeared to be bothered by
the presence of the accused in the court room. During his rebuttal testimony, Paul finally revealed
the entire story. The child testified that the accused tied Gina and set her on fire using kerosene
because of a heated quarrel. For the defense, Rolando testified that Gina burned herself because she
was “aburido” from all their financial difficulties.
The RTC of Malolos convicted the accused of Parricide. Rolando Mendoza appealed to the
Supreme Court questioning the trial judge’s decision which gave credence to the testimony of Paul.
Rolando attacked the competency of Paul as a witness because of his unintelligible and contradicting
testimonies. He further alleged that Paul’s testimony was easily tainted by the adverse party because
of his very young age.
ISSUE:
1. Whether the tender age of the child witness and his unintelligible and contradicting statements
make him incompetent and unworthy of belief? – NO.
RATIO: The child witness is competent and credible. Underhill states that a child is presumptively
incompetent but if shown otherwise, his age is immaterial. According to Wigmore on the other hand,
there is no rule defining any particular age as conclusive of capacity. Wigmore believes that for a
child witness to be competent, it must be shown that he has the capacity of (1. observation, (2) of
recollection, and (3) of communication. It is the trial court who is called upon to make this
determination. In this case, the RTC of Malolos determined the capacity of Paul Mendoza correctly.
The testimony of Paul shows that he is of above average intelligence, that he is capable of giving
responsive answers, of recalling events, and of relating his recollections. Moreover, the defense
presented no evidence showing the adverse parties’ influence over the testimony of Paul and the
sometimes contradicting statements of the child can be reasonably explained by a child’s natural fear
of his father’s reprisal.
ANALYSIS:
The Proposed Rules of Evidence has omitted the current rule on Disqualification by Reason of Mental
Incapacity or Immaturity under Section 21 Rule 130 of the Revised Rules of Evidence. This
demonstrates an adherence to Supreme Court decisions like People v. De Jesus and People v.
Salomon where the Court deliberately overlooked the fact of mental illness of the witness and
determined his competence on the basis of his capacities of perception, recollection, and relation.
Despite the omission, the Proposed Rules has no foreseeable impact on the ruling in this case
because its provision on the qualification of witnesses has faithfully retained the wording of Section
20 Rule 130 of the Revised Rules of Court which provides the main standard in determining the
competency of a witness.
However, it is interesting to note that the Rule on Examination of a Child Witness has effectively
rejected Underhill’s position that a child is presumptively incompetent which was cited in this case.
Under Section 6 of the said rule, “Every child is presumed qualified to be a witness.”
Title: People vs. Jesus Macapagal, Jr.,
Doctrine/Topic: Qualification of Witnesses
FACTS:
On review is the conviction of appellant, Jesus Macapal, Jr., for the rape of 23 year old mentally
retarded Ligaya Sarino (the victim). The victim was raped by the appellant after forcefully having brought
her to an isolated grassy area. Appellant had a knife poked at victim’s abdomen and threatened to kill her
if she would shout or resist. After the said incident, the victim and her family found out that she was
pregnant.
The victim’s sister filed a complaint for rape against appellant before the MTC. The complaint
however was later on withdrawn after parties forged an agreement whereby the victim agreed to withdraw
the complaint in consideration of appellant’s commitment to shoulder the expenses to be incurred in the
delivery of the child.
After giving birth, the victim filed before the Provincial Prosecutor's office an 'EX-PARTE MOTION
TO RESCIND AND NULLIFY AMICABLE SETTLEMENT [AND] TO REVIVE THE CASE AND TO ORDER
THE REARREST OF [APPELLANT]. Victim alleged that she was forced to enter into a sworn agreement and
that even if they were not forced to sign an agreement, they are under the belief that they can revive the
case as there is nothing in the agreement that would bar them from doing so.
Prosecutor's office filed an information against appellant after finding that the complaint
uncontroverted due to appellant's failure to submit his counter-affidavit and controverting evidence.
A psychiatric evaluation of the victim shows that the patient is suffering from mental retardation,
mild to moderate, characterized by significantly sub-average intellectual functioning (IQ 70 or below)
accompanied by significant limitations in adaptive functioning, with an onset below the age of 18. The
evaluating psychiatrist opined that while the mental capacity of the victim is comparable to that of a child
between 9 to 12 years old, she could testify in court but under closed door and leading questions should
be avoided 'as retarded people may be suggestible and wish to please others.
The RTC found accused guilty beyond reasonable doubt for the crime of rape as charged.
The Court of Appeals affirmed his conviction.
ISSUE: WON trial court erred in assuming jurisdiction over the case despite absence of evidence to prove
the place of incident.
HELD:
No, in rape cases, the victim's credibility is crucial to the determination of the accused's
culpability as the crime generally involves two persons only and usually perpetrated in seclusion. While it
may be difficult to determine the credibility of one who is a mental retardate, it can still be attained by
deducing from the manner he or she testifies in court as to the surrounding facts of the crime committed.
As long as a witness' testimony is straightforward, candid and unflawed by inconsistencies or

contradictions in its material points, and his or her demeanor is consistent with one who has been
victimized to thus bolster credibility with the verity born out of human nature and experience, as in the
herein victim's case, credibility can be accorded to him or her.
Consider the following testimony of the victim which was punctuated with her crying as she
recalled the victim threatening to kill her and the bulging of her stomach.
The straightforward narration of the victim of what transpired, accompanied by her categorical
identification of appellant as the malefactor, sealed the case for the prosecution.
Mental retardation per se does not affect credibility. A mentally retarded may be a credible
witness. The acceptance of his or her testimony depends on the quality of his or her perceptions and the
manner he or she can make them known to the court.
In the case at bar, albeit the victim's testimony was tainted with inconsistencies, these are mere
collateral and minor matters which would not compel this Court from discrediting her testimony, given
her mental retardation. In fact, testimonial discrepancies, which could have been caused by the natural
fickleness of memory, tend to strengthen, rather than weaken, credibility as they negate any suspicion of
rehearsed testimony and do not destroy the substance of the victim's testimony.
On the merits of the defense of denial and alibi, the same must be discredited.
Appellant is alleged by defense witness Sebastian Bermudez to have been working as helper in
the operation of a turtle tractor on the farm of his uncle. Bermudez following testimony on cross-
examination, quoted verbatim, does not, however, rule out appellant's presence on the date and place of
the commission of the crime,
Alibi is a defense that places the defendant at the relevant time and in a place different from the
commission of the crime, so removed therefrom as to render it impossible for him to be the guilty party.
For it to prosper, the following must thus be established: the presence of the appellant in another place at
the time of the commission of the crime and the physical impossibility for him to be at the scene of the
crime at the time of its commission. The accused must not only prove that he was somewhere else when
the crime was committed, he must also convincingly demonstrate the physical impossibility of his
presence at the locus criminis at the time of the incident.
In the case at bar, as earlier stated, the testimony of defense witness Bermudez did not rule out
the presence of appellant on the date and place of the commission of the crime.
In any event, even assuming that appellant was in barangay Magsaysay from May 25 to August
25, 1996, the distance from barangay Manapa, Buenavista where the crime took place to barangay
Magsaysay, Jabonga is about 75 kilometers, as the trial court found, with an average travel time of about
three (3) hours only, to thus render it not physically impossible for appellant to have been at the scene of
the crime on the date and time of its commission.
Moreover, the positive identification by the victim of appellant as the culprit being categorical and
consistent and devoid of any showing of ill motive on her part prevails over alibi and denial which, if not
substantiated by clear and convincing evidence, are negative and self-serving evidence undeserving of
weight in law.
WHEREFORE, the challenged October 1, 2002 decision of the Court of Appeals is hereby
AFFIRMED. Costs against appellant.

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VILLA REY TRANSIT, INC. v.

Issue: Whether the Angara Diary is inadmissible as hearsay evidence?

“November 20, 1956

Manila, June 5, 1912.

The note was indorsed on the back as follows:

(Sgd.) A.G. Serrano.”

The Court of Appeals affirmed his conviction.

As long as a witness' testimony is straightforward, candid and unflawed by inconsistencies or

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