2 tests to determine whether an oral contemporaneous agreement is a collateral hence separable and may then be

probable by parole evidence

1. Determine subj matter of written agreement and the oral contemp agreement. If subj matter of oral is different
from the written, then the oral contemporaneous agreement is probable by parole evidence
*Kaya sa Robles.. ung sa written agreement ay ung sale ng hacienda ung reimbursement is another subj. also the
oral contemp did not vary the terms of the written agreement of the sale on the hacienda.

2. Whether the oral agreement is separate from the written agreement even if the subj is the same. If separable
then the oral agreement is probable by parole evid.
*Ex: agreement of reconveyance. May collateral agreement of reconveyance be proved by parole? Yes. Distinct
agreement ito from the sale itself. Pero more often these two are contained in one document which is venta
compacto de retro (sale with right to repurchase). Separate ito although same subj which is the land

PNB V. Seeto
*Seeto had an account with PNB Surigao and nasa Surigao din si Seeto. He asked surigao to encash the check
*sino ang drawee bank ng check? Phil Bank of Communication Cebu branch
*if ur presenting a check ano ang procedure ng bank before encashment? You deposit it for collection. Your bank
will collect from drawee bank. It has to be cleared muna by the drawee bank. The collecting bank will present it for
payment to the drawee bank.
*drawee bank will determine if may sufficient funds and if tunay ang check and ung signature. Surigao then will be
the one collecting in behalf of Seeto. Kaso nangulit si Seeto kailangan na nya pera. Seeto was made to make a
general and qualified indorsement. Eto na ngayon ang subject ng parole evidence.
*Did the bank allow encashment? Yes. Ano reason why bank agreed na iencash when in fact dpa naclear ung check
otherwise si collecting bank will suffer the loss? Seeto made oral assurances that drawer has sufficient funds and
Seeto will refund Surigao if check will be dishonored. So Surigao made encashment
*were the oral assurances admissible in evidence? CA: assurances not admissible because contrary to parole
evidence rule. Baket daw? Because it violates the parole evidence rule.
*SC: Admissible! Why? The assurances constitute merely an inducement for Surigao to encash it. It was not there to
change or vary the terms of the negotiable instrument nor would it affect rights and obligations of the parties to the
indorsement. The obligation of the indorser remains. Liable pa din si Seeto as an indorser.
*it is an independent agreement the purpose is to induce the bank to encash the check.
*always focus sa evil presented by parole evidence
*The verbal assurances given by the respondent to the employees of the bank that he was ready to refund the
amount if the check should be dishonored by the drawee bank is a collateral agreement, separate and distinct from
the indorsement, by virtue of which petitioner herein was induced to cash the check, and, therefore, admissible as
an exception to the parol evidence rule.
*And Wigmore states that "an extrinsic agreement between indorser and indorsee which cannot be embodied in the
instrument without impairing its credit is probable by parole evidence.
*If, therefore, 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 parole, provided, of course, that the assurances or inducements
offered would not vary, alter, or destroy the obligations attached by law to the indorsement.
*assurances…indorsement, same subj is the check pero separable pa din.
*kaso si Surigao ang tagal bago pinresent for payment!!!! Under NIL pag nadelay ka wala ng liab ang drawer dyan.
Other examples of collateral agreements?
May parole evidence be introduced to prove inducements/rep w/c led to the execution of agreement? Yes. Parole
evidence may be introduced to prove inducement/representation because proof of such would not vary the terms of the
agreement.

Woodhouse v. Halili, G.R. No. L-4831, July 31, 1953

*woodhouse entered into agreement with Halili. woodhouse would secure franchise (industrial partner) si Halili would
be the capitalist partner. Eventually nakuha nila ung franchise agreement. So woohouse filed for execution for
partnership agreement. This is because halili ayaw na magpartnership
*Halili’s contention is that he was made to believe that woodhouse is already the exclusive holder of the franchise
where in fact woodhouse was not yet. Defense ni halili ay may fraud, (dolo causante) had he known the truth he would
not have agreed to enter into the partnership agreement.
*To prove the fraud, what evidence did Halili present? drafts of the agreement prior to the final one, which drafts are
presumed to have already been integrated in the final agreement. The prior drafts allegedly showed that Woodhouse
presented himself as the exclusive grantee of the franchise.
*ano nadiscover ni Halili? Woodhouse was not the exclusive franchisee of the company. Woodhouse was only given
franchise for 1 week. (temporary lang)
*Is oral testimony of Halili and presentation of drafts admissible? YES
*SC ruled na admissible. the purpose of considering the prior draft 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.
*reason why TC denied it is because of integration of dural acts (its actually parole evid).
*Issue is was there fraud made by woodhouse? 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 woodhouse 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 (to a relation of the party to a contract), not
to its integration (referring to parole evidence), and are not governed by the rules on integration (not governed by rules
on parole)
*Were 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. (if disallowed pano mopa
maprove ang dolo causante)
*Mr Halili was attacking the validity of the agreement because there was dolo causante. Kaya isa sa mga exceptions sa
parole evidence rule ay youre raising the validity of written agreement. (the word validity is generic). Since it falls under
the exceptions of the parole evidence rule, such rule do not apply.

What is a condition precedent? Probable by parole evid

-on which the happening of which depends the operation of a complete written agreement.
-it may be established by parole kase before happening of the condition there is no written agreement yet to which the
parole evid may apply.
Ex: A executed promissory note in favor of B. at the time of execution of note, it was orally agreed between the two of
them that the note was not to become effective until its signed by X, surety. This oral agreement can be proved by
parole? Yes. Because before the happening of such condition, theres no written agreement to which the parole evidence
rule may apply.
In the American cases however regarding condition precedent relating to the validity of instrument
*but a condition precedent which is stipulated in the writing itself and which appears on the face of the writing to have
already been complied with cannot be varied by parole evidence.
Ex: A executed PM in favor of B. The note stipulated that it was not to become effective until it is signed by X. X signed it
andun na. In a suit on the note, it can’t be proven by parole that besides X the signature of another person was further
required for the note to become effective. Because a condition precedent is already stipulated in the note itself and
appears on the face of note na nacomply na condition. If nagintroduce ka na kailangan pa ng ibang signature, ur
changing the stipulation

Another example relating to that is case of:

Maulini v Serrano
*ano business ni Maulini and Serrano ? Maulini lends money kaso ang taas ng interest. Serrano is a broker looking for
debtors then he will introduce the debtor to Maulini tas may commission si Serrano.
*anong nangyare dito? In this transaction debtor is to issue the PM in favor of Maulini, kaso ano instruction ni Maulini
kay Serrano? To tell the debtor na issue the PM in favor of Serrano. Then serrano will endorse it to Maulini.
*later on the PM was not paid so Maulini sued Serrano since indorser sya ng PM
*ano defense ni serrano? That he was never the real owner of the PM and he was only an indorser. Accommodation
party lang daw sya ni Maulini.
*Serrano orally testified na he is not the real promisee.
*Maulini objected to the oral testimony kase violates parole evidence rule.
*Did the oral testimony of Serrano violate the parole evidence rule? NO. serrano was raising issue on validity of
indorsement and argued that no endorsement ever existed.
*The case at bar is not one where the evidence offered varies, alters, modifies or contradicts the terms of the contract of
indorsement admittedly existing. The evidence was not offered for that purpose.
*The purpose was to show that no 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 a contract; and that there never existed a
consideration upon which such an agreement could be founded
*evidence is to deny that there ever existed any agreement whatever; to wipe out all apparent relations between the
parties, and not to vary, alter or contradict the terms of a relation admittedly existing.
*in other words, the purpose of the parole evidence was to demonstrate, not that the indorser did not intend to make
the particular indorsement which he did make; not that he did not intend to make the indorsement in the terms made;
but, rather, to deny the reality of any indorsement; that a relation of any kind whatever was created or existed between
him and the indorsee by reason of the writing on the back of the instrument; that no consideration ever passed to
sustain an indorsement of any kind whatsoever, kase nga argument ni serrano ay inaccomodate nya lang si Maulini.

Isa pang case sa condition precedent

Land Devt v Garcia Plantation
*Garcia bought tractors from Land Devt. Ano ang written doc here? The letter (Exhibit L). Who wrote and to whom ang
letter? Written by Atty Quintanar for Salud Garcia. The letter was saying na it was granting an extension for the time of
payment for the tractors.
*ano defense ng defendants? Premature daw ang case since binigyan daw sila ng extension dun sa letter
*during trial, Land Devt tried to present evidence sino? Atty Guinto to explain the phrase “this letter has been the matter
of the subj agreement between the parties”.
*inoobject ngayon ung testimony ni Atty. Guinto.
*ano daw ba ang condition between the parties before an extension is granted? They would need to make DP
immediately and upon non payment extension is deemed not granted. (this was the oral contemporaneous agreement)
*admissible ba? Yes. Kapag condition precedent, it does not violate the parole evidence rule. Until happening of such
condition theres no written agreement upon which parole evidence rule can apply. The agreement for the extension is
subject sa suspensive condition.
*u can also say na this is an imperfection in the contract. Aside from raising the validity, pede mo say na “imperfection”
because of the phrase..” this letter has been the matter of the subj agreement between the parties” eh anong
agreement is that all about, the contract itself does not provide what is that agreement.

Jurisprudence relating to conditions

What about conditions subsequent.
-that on the happening of which a complete written agreement becomes inoperative/void. Sa civil code it’s a subject to a
resolutory condition.
-is this probable by parole evidence? NO. because its effect is to render ineffective an otherwise complete agreement

Other exceptions to parole evidence

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;
* one which does not appear on the face of the writing itself but lies hidden in the thing / person / subject whereof
the writing speaks.
* - aka “latent ambiguity
*d kasali dito ang extrinsic ambiguity ha – cant be cured by parole evidence. – ambiguity which appears on the
writing itself. Its patent. Clear andyan. Ambiguity appears on the face of the instrument itself
*Ex of intrinsic ambiguity which is probable by parole? May will. Designated heir is A kaso may 2 or more persons
answering to the name A. (A the 2 nd, A the 3rd..) this is intrinsic ambiguity hidden in the person whereof the writing
speaks. Parole evidence is allowed to show which person is intended.
*Ex: A thought na ung property nya is located in makati wherein fact nasa MNL. Nasa boundary kase property nya.
Intrinsic ambiguity in the thing so pede parole evidence to say na its in MNL not in Makati

Example ng extrinsic – not curable by parole evid. Renders the writing void.
*donation of land w/o a description. Donation is void

Intermmediate ambiguity (nasa gitna)

- one arising from words that is susceptible of different interpretations
- may be cured by parole evidence. Effect is not to alter writing but to show true intent of parties
Ex: deed of sale of distilling apparatus. Deed of sale describes deed as one with 6000 liter capacity. Capacity may be
in 2 senses working or producing capacity. Nasa word na capacity ang ambiguity. So parole evid accepted to
determine ano nirerefer ng capacity sa deed of sale. So probable by parole.

MISTAKE
Going back sa civil code provisions:
Article 1359 - Reformation of Instruments
- When, there having been a meeting of the minds of the parties to a contract (dpt may meeting of the minds in one
and same thing), their true intention is not expressed in the instrument purporting to embody the agreement, by
reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the
instrument to the end that such true intention may be expressed.

Article 1361
When a mutual mistake of the parties causes the failure of the instrument to disclose their real agreement, said
instrument may be reformed

Article 1368
Reformation may be ordered at the instance of either party or his successors in interest, if the mistake was mutual;
otherwise, upon petition of the injured party, or his heirs and assigns.

In Fraud.. ano meaning within concept of mistake?

Article 1362
If one party was mistaken and the other acted fraudulently or inequitably in such a way that the instrument does
not show their true intention, the former may ask for the reformation of the instrument

What is inequitable..
Article 1363
When one party was mistaken and the other knew or believed that the instrument did not state their real
agreement, but concealed that fact from the former, the instrument may be reformed.

Mistake also applies to accident

Article 1364
When through the ignorance, lack of skill, negligence or bad faith on the part of the person drafting the instrument
or of the clerk or typist, the instrument does not express the true intention of the parties, the courts may order that
the instrument be reformed.

(b) The failure of the written agreement to express the true intent and agreement of the parties thereto;
Examples:
Mallari vs CA, G.R. No. 142944. April 15, 2005
*Jose and wife owned 2 storey building in Olongapo. Jose wants to mortgage the property kase gusto magtravel ni
wife sa US , pambayad doon sana. One of the sons of Jose said na wag mo ibenta, assign mo nalang property saken,
don’t worry dad u will continue to occupy it and u can redeem the property.
*Jose agreed. So di na nya minortgage property sa bank instead binenta nila sa anak ung property. Jose found out na
binenta pala ng anak nya ung property kay Madrigal and the latter pinapaalis na si Jose. Jose filed case for
annulment of the sale.
*SC said equitable mortgage ang nangyare, un ang true intent ng parties. The deed does not express true intention
of the parties. So parole evidence is admissible to show true intention of parties.
* Even when a document appears on its face to be a sale, the owner of the property may prove that the contract is
really a loan with mortgage by raising as an issue the fact that the document does not express the true intent of the
parties. In this case, parole evidence then becomes competent and admissible to prove that the instrument was in
truth and in fact given merely as a security for the repayment of a loan
*YOU MUST RAISE IT AS AN ISSUE IN UR PLEADING EITHER AS CAUSE OF ACTION OR DEFENSE NA WRITTEN DOES
NOT EXPRESS TRUE AGREEMENT OF PARTIES AND DPAAT VERIFIED!
* And upon proof of the truth of such allegations, the court will enforce the agreement or understanding in
consonance with the true intent of the parties at the time of the execution of the contract.

Going back sa Robles case

-case din na written agreement does not state complete agreement of parties
-while may deed of sale, may agreement between the parties na may reimbursement sa improvements
-u can also raise as an issue na kulang ang written instrument wala ung regarding sa reimbursement.

(d) The existence of other terms agreed to by the parties or their successors in interest after the execution of the
written agreement
*diba sabe naten parole evidence rule does not apply to subsequent agreements
*kase ur not varying the written agreement. Sinasabi mo lang may subsequent agreement so means may novation.
So probable by parole basta raise mo as an issue in the verified pleading

Subsequent agreements
Canuto v. Mariano, G.R. No. L-11346, March 21, 1918
*this sale involved right of repurchase. When was contract executed? Dec 4 1913 so right of repurchase within 1 yr
so until midnight of Dec 3 of 1914
*What happened? Vendor a retro claims na on Dec 2 1914, she requested for extension of time to repurchase the
land, upon the promise to make the repurchase until end of Dec 1914. Vendee a retro agreed to extend period up to
the end of Dec.
*kaso anong nangyare? Vendor a retro did not respect the extension. Mariano argued na Canuto should not be
allowed to present parole evidence regarding the agreement to extend the time to repurchase the property kase it
would be to alter the terms of the written instrument.
*parole evidence in this case relates to a subsequent agreement to which the parole evidence rule does not apply.
*The rule forbidding the admission of parole or extrinsic evidence to alter, vary, or contradict a written instrument
does not apply so as to prohibit the establishment by parole 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 parole 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
*THE PARTIES can change it naman. But raise it as an issue ha.

Cruz v. CA, G.R. No. 79962, December 10, 1990

*Salonga (creditor) filed a complaint for collection of a sum of money in the amount of P35,000 against Cruz
(debtor).
*Cruz said na cge nareceive ko nga 35k (exhibit D - receipt dated May4), but it was not in nature of loan but this
represents payment of utang ni Salonga kay Cruz. 28k is for the pakyaw kase salonga bought all my fish and the rest
is para sa rent ni salonga kay cruz.
*salonga denied and said na ung 28k for the pakyaw is in a different payment in exhibit I. (receipt dated May 14).
(such receipt indicates: nakatanggap ako ng 28k para sa pakyaw)
*testimony of Cruz corroborated by another fellow
*ano decision ng TC? Ruled in favor of Cruz, admitting parole evidence of Cruz, explaining the 2 receipts
*on appeal, CA, reversed TC. Exhibit I is clear sa non reference dun sa 35k receipt of May 4. If sabihin na exhibit D
and I are one and the same then it violates parole evidence rule.
*tama ba CA? Yes.
*Parol evidence applies only to written agreement
*Is exhibit D an agreement? No. it does not even speak ano subj ng agreement. It’s a receipt w/c is an
acknowledgement that someone received amount from another. Exhibit D does not state what the agreement is all
about.
*Exhibit D is not an agreement. Its only a receipt. Parole evidence rule does not apply
*A receipt — i.e. a written acknowledgment, handed by one party to the other, of the manual custody of money or
other personality — will in general fall without the line of the rule; i.e. it is not intended to be an exclusive memorial,
and the facts may be shown irrespective of the terms of the receipt. This is because usually a receipt is merely a
written admission of a transaction independently existing, and, like other admissions, is not conclusive.
*a receipt is not an agreement.
*assuming parole evidence rule applies, what did court say? , the record shows that no objection was made by the
Salonga when the Cruz introduced evidence to explain the circumstances behind the execution and issuance of the
said instruments. The rule is that objections to evidence must be made as soon as the grounds therefor become
reasonably apparent.
*diba to be admissible 2 rules is relevance and competency.
*assuming this violates parole evidence rule and incompetent, may 3 rd rule, if u do not object to an irrelevant or
incompetent evidence, then it becomes admissible.
*remember amendment to conform to evidence (S5, Rule 10) (pero such rule is not applicable in criminal cases kse
dpt proven beyond reasonable doubt) upon failure to object
*kaya kapag irrelevant/immaterial object ka, otherwise patay ka.

Lechugas v. CA, G.R. No. L-39972, August 6, 1986

*doctrine: The parol evidence rule does not apply 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
*who may invoke the parole evidence rule? Only parties to the agreement. Where stranger presents evidence, then
parole evidence rule does not apply
*who are the parties in this case? Lechugas bought property from Leoncia, evidenced by deed of absolute sale
*Lechugas filed action against defendants (Lozas family), saying that she bought property from Leoncia (from aunt).
Lozas said no, this is our property, which we bought also from Leoncia (iba ung lupa mo Lechugas sa lupa namen,
ung property ni Lechugas ay ung sa south ung north ay kay lozas)
*sa part ni Lechugas, she presented deed of sale.
*ano testimony ni leoncia? It was Lechugas who prepared the deed of sale and since illiterate si leoncia, nagtiwala
nalang daw si Leoncia and ang binenta nya kay Lechugas ay yung southern part. Ung northern part ang binenta kay
lozas.
*who presented leoncia? The lozas.
*Lechugas argued against the Lozas that the the testimony of leoncia has the effect of varying the terms of the
agreement between them and Leoncia.
*ano ruling ng court? Parole evidence rule is not applicable. Doctrine reiterated
*the one who can invoke the parole evidence rule is only when the controversy is between the parties to the
contract. But if the one invoking the parole evidence rule is not privy to the contract and does not base his claim on
the written instrument nor does he assert his right in the written instrument then parole evidence rule does not
apply to the lozas
*controversy here is between lozas and Lechugas. The lozas merely called Lechugas sa witness stand. Can Lechugas
invoke as against lozas the parole evidence rule? No kase lozas was not a party sa contract between Leoncia and
Lechugas and lozas does not base/assert claim on the written instrument thereof
*The rule therefore applies, that as between parties to a written agreement, or their privies, parole evidence cannot
be received to contradict or vary its terms. Strangers(the lozas) to a contract are, of course, not bound by it, and the
rule excluding extrinsic evidence in the construction of writings is inapplicable in such cases; and it is relaxed where
either one of the parties between whom the question arises is a stranger to the written agreement, and does not
claim under or through one who is party to it (of course the lozas does not base their claim on the deed of sale
between Lechugas and leoncia). In such case the rule is binding upon neither.
*In the case of Camacho v. Municipality of Baliuag, this Court held that parole evidence which was introduced by the
municipality was competent to defeat the terms of the plaintiff's deed which the latter executed with the Insular
Government. It should be noted in the first place, that there is no written instrument between the plaintiff and the
municipality, that is, between the parties to the action; and there is, therefore, no possibility of the question arising
as to the admissibility of parole evidence to vary or contradict the terms of an instrument. The written instrument
that is, the conveyance on which plaintiff bases his action was between the Insular Government and the plaintiff,
and not between the municipality and the plaintiff; and therefore, there can arise, as between the plaintiff and
defendant no question relative to the varying or contradicting the terms of a written instrument between them
(parties: plaintiff and municipalicy of baliuag
*an agreement is entered into only between 2 parties to the contract.

Who may invoke protection of parole evid? Only parties to the written agreement and their successors in interest
and not against strangers. Strangers may not also invoke it of course

Next part of parole evid is..

Interpretation of Documents

When is the court allowed to interpret?

*When there is ambiguity. When the terms are clear, DO NOT CONSTRUE. Court should not interpret. Apply only the
law. Sundin ang agreement if clear.

Section 11. Interpretation of a writing according to its legal meaning.

The language of a writing is to be interpreted according to the legal meaning it bears in the place of its execution,
unless the parties intended otherwise.
*In international contracts executed in PH, usually nakalagay: “laws of PH shall be applicable relating to any
interpretation of this contract”
*In absence of what law will apply? : lex loci celebrationis (laws where it was celebrated shall apply)
*BUT if specifically put what law shall apply à then that law shall apply

Section 12. Instrument construed so as to give effect to all provisions

In the construction of an instrument[,] where there are several provisions or particulars, such a construction is, if
possible, to be adopted as will give effect to all
*You should not make any provision there functus officio or render it nugatory or ineffective

if 2 provisions are irreconcilable? Sec 13

In the construction of an instrument, the intention of the parties is to be pursued; and when a general and a
particular provision are inconsistent, the latter is paramount to the former. So a particular intent will control a
general one that is inconsistent with it
*special provision will prevail over general provision bec special prov is an excp to the general provision

Section 14. Interpretation according to circumstances

For the proper construction of an instrument, the circumstances under which it was made, including the situation of
the subject thereof and of the parties to it, may be shown, so that the judge may be placed in the position of those
whose language he or she is to interpret
*Ex: if ur interpreting a doc on whether its sale with right to repurchase or equitable mortgage, u consider
circumstances of the times, let say pandemic nun, would u not believe na more of equitable mortgage sya kase
naforce si debtor na ibenta kahit gusto lang nya umutang. Kase si debtor nawalan work because of pandemic

Section 15. Peculiar signification of terms

The terms of a writing are presumed to have been used in their primary and general acceptation, but evidence is
admissible to show that they have a local, technical, or otherwise peculiar signification, and were so used and
understood in the particular instance, in which case the agreement must be construed accordingly.
*In absence of any definition given by agreement/law, words are used in their general acceptation (punta kanalang
sa dictionary except a particular term as attained technical meaning

Section 16.
Written words control printed. – When an instrument consists partly of written words and partly of a printed form,
and the two [(2)] are inconsistent, the former controls the latter
*written prevails

Section 17. Experts and interpreters to be used in explaining certain writings.

When the characters in which an instrument is written are difficult to be deciphered, or the language is not
understood by the court, the evidence of persons skilled in deciphering the characters, or who understand the
language, is admissible to declare the characters or the meaning of the language

Section 18. Of two constructions, which preferred

*sinong interpretation ang magprevail? that sense is to prevail against either party in which he or she supposed the
other understood it,
*when different constructions of a provision are otherwise equally proper, that is to be taken which is the most
favorable to the party in whose favor the provision was made. (is it to favor the obligor or obligee)
Ex: if lessee fails to pay lessor has the right o padlock apartment, such provision is in favor of lessor any ambiguity is
resolved in favor of party whose provision was made

Sec 19
Statues in derogation of natural rights are interpreted against the state
Ex: penal laws, interpreted in favor of accused against the state
Ex: Taxation laws

Section 20. Interpretation according to usage

*going back sa intermediate ambiguity.. ung sale ng machine with 5k capacity. Ano ung capacity working or
producing? If the said industry, producing capacity ang definition, then use that.

Can u prove existence of agreement by parole evidence ? YES. Kase it does not relate to the contents its only the
existence, kaya rules object evidence na ang apply.