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CASTAÑAGA, JEZREEL D.

JD3A

ASSIGNMENT FOR EVIDENCE CLASS


SECTION JD -3A

1. What is an ORIGINAL of a document?

An original of a document, pursuant to the Revised Rules on Evidence, is the


document itself or any counterpart intended to have the same effect by a person
executing or issuing it.

2. What is a DUPLICATE of a document?

A duplicate is a counterpart produced by the same impression as the original, or


from the same matrix, or by means of photography, including enlargements and
miniatures, or by mechanical or electronic re-recording, or by chemical
reproduction, or by other equivalent techniques which accurately reproduce the
original.

A duplicate, according to the Revised Rules on Evidence is admissible to the


same extent as an original unless:
a. a genuine question is raised as to the authenticity of the original;
b. in the circumstances, it is unjust or inequitable to admit the duplicate in lieu of
the original

3. When is presentation of the ORIGINAL dispensed with?

The presentation of the original document is dispensed with in the following


instances:

(a) When the original is lost or destroyed, or cannot be produced in court, without
bad faith on the part of the offeror;
(b) When the original is in the custody or under the control of the party against
whom the evidence is offered, and the latter fails to produce it after reasonable
notice, or the original cannot be obtained by local judicial processes or
procedures;
(c) When the original consists of numerous accounts or other documents which
cannot be examined in court without great loss of time and the fact sought to be
established from them is only the general result of the whole;
(d) When the original is a public record in the custody of a public officer or is
recorded in a public office; and
(e) When the original is not closely-related to a controlling issue.

4. When is SECONDARY evidence admissible ?

A secondary evidence is admissible is the following instances:

a. When original document is unavailable, or has been lost or destroyed or


cannot be produced in court;
b. When original document is in adverse party’s custody or control.

5. What does DOCUMENTARY EVIDENCE consist of?

Documentary evidence consist of writings, recordings, photographs or any


material containing letters, words, sounds, numbers, figures, symbols, or their
equivalent, or
CASTAÑAGA, JEZREEL D.
JD3A
other modes of written expression offered as proof of their contents. Photographs
include still pictures, drawings, stored images, x-ray films, motion pictures or
videos.

6. What is ephemeral electronic communication?

Ephemeral electronic communication” refers to telephone conversations, text


messages, chatroom sessions, streaming audio, streaming video, and other
electronic forms of communication the evidence of which is not recorded or
retained.

7. How do you prove electronic evidence?

Section 2, Rule 5 of the Rule on Evidence provides that:

before any private electronic document offered as authentic is received in evidence, its
authenticity must be proved by any of the following means:

(a) by evidence that it had been digitally signed by the person purported to have signed
the same;
(b) by evidence that other appropriate security procedures or devices as may be
authorized by the Supreme Court or by law for authentication of electronic documents
were applied to the document; or
(c) by other evidence showing its integrity and reliability to the satisfaction of the judge.”
CASTAÑAGA, JEZREEL D.
JD3A
1. NATIONAL POWER CORPORATION, Petitioner, vs. HON. RAMON G.
CODILLA, JR., Presiding Judge, RTC of Cebu, Br. 19, BANGPAI SHIPPING
COMPANY, and WALLEM SHIPPING, INCORPORATED

FACTS:  

On April 20, 1996, M/V Dibena Win being operated and owned by the herein Bangpai
Shipping Company under its ship agent Wallen Shipping Inc., accidentally bumped the
power barge of NAPOCOR.  The latter filed a complaint for damages. During the
presentation of evidence, the petitioner presented as pieces of evidence Xerox copies,
to which such was admitted by the court.  However, a motion to strike out the evidence
was filed before the court and the court ordered such evidence be stricken out of the
records but has to be attached to the documents for proper disposition. The petitioner
contends that the documents be admitted because it is within the purview of the
electronic evidence.

ISSUE:  

Whether the pieces of evidence submitted by the petitioner should be regarded within
the purview of the electronic evidence.

HELD:  

No. Section 1 of Rule 2 of the Rules on Electronic Evidence provides:


"(h) "Electronic document" refers to information or the representation of information,
data, figures, symbols or other models 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 any printout, readable by sight or other means which accurately reflects the
electronic data message or electronic document. For the purpose of these Rules, the
term "electronic document" may be used interchangeably with "electronic data
message".

An "electronic document" refers to information or the representation of information, data,


figures, symbols or other models 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.

A perusal of the information contained in the photocopies submitted by petitioner will


reveal that not all of the contents such as the signatures of the persons who purportedly
signed the documents, may be recorded or produced electronically. By no means can a
person’s signature affixed manually be considered as information electronically
received, recorded, transmitted, stored, processed, retrieved or produced. Hence, the
argument of petitioner that since these paper printouts were produced through an
electronic process, then these photocopies are electronic documents as defined in the
Rules on Electronic Evidence is obviously an erroneous, if not preposterous,
interpretation of the law. Having thus declared that the offered photocopies are not
tantamount to electronic documents, it is consequential that the same may not be
considered as the functional equivalent of their original as decreed in the law.

Indeed the documents presented by the petitioner as evidence before the court were
not within the purview electronic document or electronic data message.  It will be highly
unacceptable to regard an information manually written down to be regarded as
electronic message.  
CASTAÑAGA, JEZREEL D.
JD3A

2. MCC INDUSTRIAL SALES CORPORATION, petitioner, vs. SSANGYONG


CORPORATION

FACTS:

Respondent is the supplier of MCC. The two corporations conducted business through
telephone calls and facsimile or telecopy transmissions. Respondent would send the
pro forma invoices containing the details of the steel product order to petitioner; if the
latter conforms thereto, its representative affixes his signature on the faxed copy and
sends it back to the respondent, again by fax. Respondent filed a civil action for
damages due to breach of contract against petitioner before the RTC.

Petitioner contends that the photocopies of the pro forma invoices presented by
respondent Ssangyong to prove the perfection of their supposed contract of sale are
inadmissible in evidence and do not fall within the ambit of R.A. No. 8792, because the
law merely admits as the best evidence the original fax transmittal. On the other hand,
respondent posits that, from a reading of the law and the Rules on Electronic Evidence,
the original facsimile transmittal of the pro forma invoice is admissible in evidence since
it is an electronic document and, therefore, the best evidence under the law and the
Rules.

ISSUE:

Whether the print-out and/or photocopies of facsimile transmissions are electronic


evidence and admissible.

HELD:

No. Electronic document shall be regarded as the equivalent of an original document


under the Best Evidence Rule, as long as it is a printout or output readable by sight or
other means, showing to reflect the data accurately. Thus, to be admissible in evidence
as an electronic data message or to be considered as the functional equivalent of an
original document under the Best Evidence Rule, the writing must foremost be an
“electronic data message” or an “electronic document.

The Implementing Rules and Regulations (IRR) of R.A. No. 8792 defines the “Electronic
Data Message” refers to information generated, sent, received or stored by electronic,
optical or similar means, but not limited to, electronic data interchange (EDI), electronic
mail, telegram, telex or telecopy.

Furthermore, when Congress formulated the term “electronic data message,” it intended
the same meaning as the term “electronic record” in the Canada law. This construction
of the term “electronic data message,” which excludes telexes or faxes, except
computer-generated faxes, is in harmony with the Electronic Commerce Law’s focus on
“paperless” communications and the “functional equivalent approach” that it espouses.
Facsimile transmissions are not, in this sense, “paperless,” but verily are paper-based.
The terms “electronic data message” and “electronic document,” as defined under the
Electronic Commerce Act of 2000, do not include a facsimile transmission.  Accordingly,
a facsimile transmission cannot be considered as electronic evidence.  It is not the
functional equivalent of an original under the Best Evidence Rule and is not admissible
as electronic evidence.
CASTAÑAGA, JEZREEL D.
JD3A

3. ELLERY MARCH G. TORRES, Petitioner, vs. PHILIPPINE AMUSEMENT and


GAMING CORPORATION

FACTS:

Petitioner was a Slot Machine Operations Supervisor of PAGCOR. On the basis of an


alleged intelligence report of padding of the Credit Meter Readings of the slot machines
at PAGCOR-Hyatt Manila, PAGCOR's Corporate Investigation Unit allegedly conducted
an investigation to verify the veracity of such report. The CIU discovered the scheme of
CMR padding which was committed by adding zero after the first digit of the actual CMR
of a slot machine or adding a digit before the first digit of the actual CMR. The CIU
identified the members of the syndicate who were responsible for such CMR padding,
which included Torres.

On the same day, another Memorandum of Charges signed by Rogelio Y. Bangsil, Jr.,


Senior Branch Manager, CF Hyatt Manila, was issued to petitioner informing him of the
charge of dishonesty. Petitioner was then required to explain in writing within seventy-
two (72) hours from receipt thereof why he should not be sanctioned or dismissed.
Petitioner was placed under preventive suspension effective immediately until further
orders. Torres wrote Manager Bangsil a letter explanation/refutation of the charges
against him and denied any involvement or participation in any fraudulent manipulation
of the CMR. Subsequently, Torres received a letter dismissing him from his position.

On September 14, 2007, petitioner filed with the CSC a Complaint against PAGCOR
and its Chairman for illegal dismissal, non-payment of backwages and other benefits.
The complaint alleged among other things, that he tried to persuade respondent
PAGCOR to review and reverse its decision in a letter of reconsideration dated August
13, 2007 addressed to the Chairman, the members of the Board of Directors and the
Merit Systems Protection Board and that no resolution was issued on his letter
reconsideration.

ISSUE:

Whether the filing of pleadings through fax machines is admissible.

HELD:

In Garvida v. Sales, Jr., the Court inadmissible in evidence the filing of pleadings


through fax machines and ruled that:

A facsimile or fax transmission is a process involving the transmission and reproduction


of printed and graphic matter by scanning an original copy, one elemental area at a
time, and representing the shade or tone of each area by a specified amount of electric
current. The current is transmitted as a signal over regular telephone lines or via
microwave relay and is used by the receiver to reproduce an image of the elemental
area in the proper position and the correct shade. The receiver is equipped with a stylus
or other device that produces a printed record on paper referred to as a facsimile.

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 of
determining on its face whether the facsimile pleading is genuine and authentic and was
originally signed by the party and his counsel. Moreover, a facsimile transmission is not
considered as an electronic evidence under the Electronic Commerce Act. In MCC
Industrial Sales Corporation v. Ssangyong Corporation, We determined the question of
CASTAÑAGA, JEZREEL D.
JD3A
whether the original facsimile transmissions are "electronic data messages" or
"electronic documents" within the context of the Electronic Commerce Act.
We, therefore, conclude that the terms "electronic data message" and "electronic
document," as defined under the Electronic Commerce Act of 2000, do not include a
facsimile transmission. Accordingly, a facsimile transmission cannot be considered as
electronic evidence. It is not the functional equivalent of an original under the Best
Evidence Rule and is not admissible as elecStronic evidence. 
CASTAÑAGA, JEZREEL D.
JD3A

4. RUSTAN ANG y PASCUA, Petitioner, vs. THE HONORABLE COURT OF


APPEALS and IRISH SAGUD

FACTS:

This case concerns a claim of commission of the crime of violence against women when
a former boyfriend sent to the girl the picture of a naked woman, not her, but with her
face on it.

The public prosecutor charged Rustan before the RTC of violation of R.A. 9262. The
RTC found Rustan guilty and the CA affirmed the decision of the trial court.

Rustan claims that the obscene picture sent to Irish through a text message constitutes
an electronic document. Thus, it should be authenticated by means of an electronic
signature, as provided under Section 1, Rule 5 of the Rules on Electronic Evidence.

The CA denied Rustan’s motion for reconsideration in a resolution dated April 25, 2008.
Thus, Rustan filed the present for review on certiorari.

ISSUE:

Whether the Rules on Electronic Evidence applies on criminal cases and thus, the
picture sent through a cell phone message wherein Sagud’s face was attached on the
body of a nude woman may be used as evidence for violation of Section 5(h) of R.A.
9262.

HELD:

The rules he cites do not apply to the present criminal action. The Rules on Electronic
Evidence applies only to civil actions, quasi-judicial proceedings, and administrative
proceedings.

However, Rustan is raising this objection to the admissibility of the obscene picture,
Exhibit A, for the first time before this Court. The objection is too late since he should
have objected to the admission of the picture on such ground at the time it was offered
in evidence. He should be deemed to have already waived such ground for objection.

In conclusion, this Court finds that the prosecution has proved each and every element
of the crime charged beyond reasonable doubt. 
CASTAÑAGA, JEZREEL D.
JD3A

5. ESPERANZA BERBOSO, Petitioner, v. VICTORIA CABRAL, Respondent.

FACTS:

The subject land was awarded to Alejandro by the DAR on September 11, 1981 by
virtue of a Certificate of Land Transfer. CLT No. 0-056450 was replaced by EP No.
445829 covering 22,426 sq m and EP No. 445830 covering the remaining 1,000 sq m.

On November 17, 1992, after Alejandro had fully complied with all the requirements for
the final grant of title, and was issued TCT No. EP-046 and TCT No. EP-047 in the
name of Alejandro. TCT Nos. EP-046 and EP-047 thereby cancelled EP Nos. 445829
and 445830.

On September 8, 1993, respondent filed with the DAR Provincial Agrarian Reform
Adjudication Board her first petition to cancel EP Nos. 445829 and 445830.

Meanwhile, Alejandro died in 1994. After his death, his heirs settled his estate and
executed an Extra-Judicial Settlement of Estate. Thus, on April 5, 1996, TCT Nos. EP-
046 and EP-047 were cancelled and TCT Nos. 263885(M) and 263886(M) were issued
in the name of the heirs of Alejandro, namely, Esperanza Vda. De Berboso, Juan
Berboso, Benita Berboso Gonzales, Adelina Berboso Villegas and Rolando Berboso.

ISSUE:

Whether the respondents can question the validity of the Torrens title issued to the
petitioner.

HELD:

It is a basic rule of evidence that each party must prove his affirmative allegation. The
party who alleges an affirmative fact has the burden of proving it because mere
allegation of the fact is not evidence of it. Verily, the party who asserts, not he who
denies, must prove. Respondent alleged that petitioner sold a portion of the subject land
to Fernando as evidenced by the Kasunduan dated December 17, 1994. As such,
respondent bears the burden of proving that there is indeed a sale between petitioner
and Fernando, rather than petitioner to prove that there is no sale.

Examination of the records will show that the Kasunduan dated December 17, 1994 is a
mere photocopy and the same cannot be admitted to prove the contents thereof. The
best evidence rule requires that the highest available degree of proof must be produced.
For documentary evidence, the contents of a document are best proved by the
production of the document itself to the exclusion of secondary or substitutionary
evidence.

Accordingly, the offeror of the secondary evidence is burdened to satisfactorily prove


the predicates thereof, namely: (1) the execution or existence of the original; (2) the loss
and destruction of the original or its non-production in court; and (3) the unavailability of
the original is not due to bad faith on the part of the proponent/offeror. Proof of the due
execution of the document and its subsequent loss would constitute the basis for the
introduction of secondary evidence.24

Nowhere in the records will show that the respondent proved that the original of
the Kasunduan dated December 17, 1994 exists. Respondent even failed to explain
why she merely presented a photocopy of the Kasunduan. Respondent likewise failed
to prove the contents of the Kasunduan in some authentic document, nor presented
CASTAÑAGA, JEZREEL D.
JD3A
Fernando, a party to the said Kasunduan or any witness for that matter. As such,
respondent failed to prove the due execution and existence of the Kasunduan.
Therefore, a photocopy of the Kasunduan cannot be admitted to prove that there is
indeed a sale between petitioner and Fernando.

Furthermore, the Kasunduan is merely a private document since the same was not
notarized before a notary public. In this case, the Kasunduan is not authenticated by the
respondent. No one attested to the genuineness and due execution of the document.
Fernando was not presented nor did he submit an affidavit to confirm and authenticate
the document or its contents. Neither was the requirement of authentication excused
under the above-cited instances.
CASTAÑAGA, JEZREEL D.
JD3A
6. PEOPLE OF THE PHILIPPINES, Appellee, vs. NOEL ENOJAS y HINGPIT,
ARNOLD GOMEZ y FABREGAS, FERNANDO SANTOS y DELANTAR, and
ROGER JALANDONI y ARI

FACTS:

The City Prosecutor charged the appellants with murder. PO2 Gregorio testified that
when they were patrolling they spotted a tax that was suspiciously parked and
approached the same with Enojas being the driver and asked for his documents. Enojas
also voluntarily went with the police and left his taxi.

Upon an altercation with 2 suspected robbers, a shootout happened and they


discovered that Enojas had fled. PO3 Cambi and PO2 Rosarito testified that they
monitored the messages in accused Enojas’ mobile phone and, posing as Enojas,
communicated with the other accused. The police then conducted an entrapment
operation that resulted in the arrest of accused Santos and Jalandoni. Subsequently,
the police were also able to capture accused Enojas and Gomez. The prosecution
presented the transcripts of the mobile phone text messages between Enojas and some
of his co-accused.

ISSUE:

Whether the text messages were admissible as evidence.

HELD:

In conformity with the Court’s earlier Resolution which applied the Rules on Electronic
Evidence to criminal actions. Text messages are to be proved by the testimony of a
person who was a party to the same or has personal knowledge of them. Here, PO3
Cambi, posing as the accused Enojas, exchanged text messages with the other
accused in order to identify and entrap them. As the recipient of those messages sent
from and to the mobile phone in his possession, PO3 Cambi had personal knowledge of
such messages and was competent to testify on them.

The accused contends that they were arrested without a valid warrant of
arrest.1âwphi1 But, assuming that this was so, it cannot be a ground for acquitting them
of the crime charged but for rejecting any evidence that may have been taken from
them after an unauthorized search as an incident of an unlawful arrest, a point that is
not in issue here. At any rate, a crime had been committed—the killing of PO2
Pangilinan—and the investigating police officers had personal knowledge of facts
indicating that the persons they were to arrest had committed it. The text messages to
and from the mobile phone left at the scene by accused Enojas provided strong leads
on the participation and identities of the accused. Indeed, the police caught them in an
entrapment using this knowledge.
CASTAÑAGA, JEZREEL D.
JD3A
7. RHONDA AVE S. VIVARES and SPS. MARGARITA and DAVID
SUZARA, Petitioners, vs. ST. THERESA'S COLLEGE, MYLENE RHEZA T.
ESCUDERO, and JOHN DOES,

FACTS:

In January 2012, Angela Tan, a high school student at STC, uploaded on Facebook
several pictures of her and her classmates wearing only their undergarments. Some of
their classmates reported said photos to their teacher, Escudero. Escudero, through a
student’s Facebook account, viewed and downloaded said pictures. She showed the
said pictures to STC’s Discipline-in-Charge for appropriate action. Later, STC found that
they have violated the student’s handbook and banned them from “marching” in their
graduation ceremonies scheduled in March 2012. The issue went to court but despite a
TRO granted by the Cebu RTC enjoining the school from barring the students in the
graduation ceremonies, STC still barred said students.

Subsequently, the mothers of the students filed a petition for the issuance of the writ of
habeas data against the school. They argued, among others, that:

1. The privacy setting of their children’s Facebook accounts was set at “Friends Only.”
They, thus, have a reasonable expectation of privacy which must be respected.

2. The photos accessed belong to the girls and, thus, cannot be used and reproduced
without their consent. Thus, Escudero violated their rights by saving digital copies of the
photos and by subsequently showing them to STC’s officials. The Facebook accounts of
the children were intruded upon;

3. The intrusion into the Facebook accounts, as well as the copying of information, data,
and digital images happened at STC’s Computer Laboratory;

The Cebu RTC eventually denied the petition. Hence, this appeal.

ISSUE:

Whether there was indeed an actual or threatened violation of the right to privacy in the
life, liberty, or security of the minors involved in this case.

HELD:

No, the respondents failed to establish that the uploading or showing the photos
constitute a violation of their privacy. Without any evidence to corroborate their
statement that the images were visible only to the five of them, and without their
challenging Escudero’s claim that the other students were able to view the photos, their
statements are, at best, self-serving, thus deserving scant consideration. Not one of
petitioners disputed Escudero’s sworn account that her students, who are the minors’
Facebook “friends,” showed her the photos using their own Facebook accounts. This
only goes to show that no special means to be able to view the allegedly private posts
were ever resorted to by Escudero’s students, and that it is reasonable to assume,
therefore, that the photos were, in reality, viewable either by (1) their Facebook friends,
or (2) by the public at large. Considering that the default setting for Facebook posts is
“Public,” it can be surmised that the photographs in question were viewable to everyone
on Facebook, absent any proof that petitioners’ children positively limited the disclosure
of the photograph. If such were the case, they cannot invoke the protection attached to
the right to informational privacy.
CASTAÑAGA, JEZREEL D.
JD3A
8. ASSO. JUSTICE DELILAH VIDALLON MAGTOLIS VS CIELITO M. SALUD

FACTS:

Respondent is charged and held liable for offenses on inefficiency and incompetence of
official duty; conduct grossly prejudicial to the best interest of the service; and directly
and indirectly having financial and material interest in an official transaction considering
his undue interest in the service of the order of release and actual release of
Melchor Lagua who was found guilty of homicide and was then detained. Lagua’s
petition for bond was approved in a Resolution where the appellate court directed the
issuance of an order of release in favor of Lagua. The resolution was brought to the
office of Atty. Madarang, Division Clerk of Court, for promulgation.

Meanwhile, Atty. Madarang received a call from a certain Melissa Melchor, who


introduced herself as Lagua’s relative, asking how much more they had to give to
facilitate Lagua’s provisional liberty, and that they sought the help of a certain Valdez of
RTC Pasig, but was told that they still had a balance. When Atty. Madarang was able to
get the mobile number of respondent, he represented himself as Lagua’s relative and
exchanged text messages with respondent for a possible pay-off for the Lagua’s
provisional liberty. Atty. Madarang later discovered that the respondent did not properly
serve the copies of the Resolution and Order of Release upon the accused and his
counsel, but gave them to a certain Art Baluran, allegedly Lagua’s relative.

ISSUE:

Whether the admission of text messages as evidence constitutes a violation of right to


privacy of the accused.

HELD:

No. The respondent’s claim that the admission of the text messages as evidence
against him constitutes a violation of his right to privacy is untenable. Text messages
have been classified as “ephemeral electronic communication” under Section 1(k), Rule
2 of the Rules on Electronic Evidence, and “shall be proven by the testimony of a
person who was a party to the same or has personal knowledge thereof.” Any question
as to the admissibility of such messages is now moot and academic, as the respondent
himself, as well as his counsel, already admitted that he was the sender of the first three
messages on Atty. Madarang’s cell phone.
CASTAÑAGA, JEZREEL D.
JD3A
9. RUSTAN ANG y PASCUA, Petitioner, vs. THE HONORABLE COURT OF
APPEALS and IRISH SAGUD

FACTS:

This case concerns a claim of commission of the crime of violence against women when
a former boyfriend sent to the girl the picture of a naked woman, not her, but with her
face on it.

The public prosecutor charged Rustan before the RTC of violation of R.A. 9262. The
RTC found Rustan guilty and the CA affirmed the decision of the trial court.

Rustan claims that the obscene picture sent to Irish through a text message constitutes
an electronic document. Thus, it should be authenticated by means of an electronic
signature, as provided under Section 1, Rule 5 of the Rules on Electronic Evidence.

The CA denied Rustan’s motion for reconsideration in a resolution dated April 25, 2008.
Thus, Rustan filed the present for review on certiorari.

ISSUE:

Whether the Rules on Electronic Evidence applies on criminal cases and thus, the
picture sent through a cell phone message wherein Sagud’s face was attached on the
body of a nude woman may be used as evidence for violation of Section 5(h) of R.A.
9262.

HELD:

The rules he cites do not apply to the present criminal action. The Rules on Electronic
Evidence applies only to civil actions, quasi-judicial proceedings, and administrative
proceedings.

However, Rustan is raising this objection to the admissibility of the obscene picture,
Exhibit A, for the first time before this Court. The objection is too late since he should
have objected to the admission of the picture on such ground at the time it was offered
in evidence. He should be deemed to have already waived such ground for objection.

In conclusion, this Court finds that the prosecution has proved each and every element
of the crime charged beyond reasonable doubt. 
CASTAÑAGA, JEZREEL D.
JD3A
10. PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. REYNALDO BAGO y
MADRID, accused-appellant, ARMANDO CAPARAS y CUENCO and
RODOLFO ONGSECO y VEGO, accused.

FACTS:

Azkcon has a business arrangement with Power Construction whereby Azkcon buys
cold rolled sheets from the latter. Appellant's job was to go to Power Construction's
establishment in Quezon City to oversee the cutting of the cold rolled sheets and ensure
their delivery to Azkcon using the trucks sent by Hilo.

Appellant and his co-workers went to Power Construction and loaded two cold rolled
sheets in a truck owned by Azkcon. Before entering the premises of Azkcon, appellant
presented to security guard RUBEN DE LA CRUZ MANANGAN two receipts, both
dated April 21, 1992. Ong checked the third receipt and when he failed to find the
materials listed thereon, he reported to Hilo. Upon receipt of the report, Hilo discreetly
conducted a more in-depth investigation. He found out that the materials covered by the
third receipt, worth P192,000.00, were not delivered to Azkcon.

Hilo did not immediately report the matter to his superior. He chose to wait for appellant
to commit a similar misdemeanor and catch him red-handed. He waited in vain. He then
decided to inform his superiors about the theft. The next day, the police apprehended
accused Caparas and Ongseco. Inexplicably, the investigation of Chua was not reduced
to writing. 

ISSUE:

Whether can rely on the best evidence rule.

HELD:

No. The rule cannot be invoked unless the content of a writing is the subject of judicial
inquiry, in which case, the best evidence is the original writing itself.

The rule pertains to the admissibility of secondary evidence to prove the contents of a
document. In the case at bar, no secondary evidence is offered to prove the content of a
document. What is being questioned by appellant, in this case, is the weight given by
the trial court to the testimony of Manangan over the receipt which on its face shows
that the materials in question were delivered to Azkcon's premises. Clearly, the best
evidence rule finds no application on this issue.
CASTAÑAGA, JEZREEL D.
JD3A
11. JOSEPH E. ESTRADA, petitioner, vs. ANIANO DESIERTO, in his capacity as
Ombudsman, RAMON GONZALES, VOLUNTEERS AGAINST CRIME AND
CORRUPTION, GRAFT FREE PHILIPPINES FOUNDATION, INC., LEONARD
DE VERA, DENNIS FUNA, ROMEO CAPULONG and ERNESTO B.
FRANCISCO, JR.,

FACTS:

Estrada was elected President while respondent Arroyo was elected Vice-President.
Estrada then was plagued by a plethora of problems that slowly but surely eroded his
popularity one of which is the allegations of Chavit that his family and friends of
receiving millions of pesos from jueteng lords.

Calls for the resignation of the petitioner filled the air but Estrada refused to resign. The
impeachment trial of the petitioner proceeded. Estrada agreed to the holding of a snap
election for President where he would not be a candidate. Subsequently, CJ Davide
administered the oath to respondent Arroyo as President of the Philippines. It appears
that on the same day, he signed the following letter: "Sir: By virtue of the provisions of
Section 11, Article VII of the Constitution, I am hereby transmitting this declaration that I
am unable to exercise the powers and duties of my office. By operation of law and the
Constitution, the Vice-President shall be the Acting President. (Sgd.) JOSEPH
EJERCITO ESTRADA" The Monday after taking her oath, respondent Arroyo
immediately discharged the powers the duties of the Presidency. After his fall from the
pedestal of power, the petitioner's legal problems appeared in clusters. Several cases
previously filed against him in the Office of the Ombudsman were set in motion. A
special panel of investigators was forthwith created by the respondent Ombudsman to
investigate the charges against the petitioner.

ISSUE:

Whether the President has resigned based on his letter and diary of Angara

HELD:

Yes. Through the diary of Angara, Etrada’s state of mind was determined. The diary
was titled "Final Days of Joseph Ejercito Estrada,". The Angara Diary reveals that in the
morning of January 19, petitioner's loyal advisers were worried about the swelling of the
crowd at EDSA, hence, they decided to create an ad hoc committee to handle it.

The proposal for a snap election for president in May where he would not be a
candidate is an indicium that petitioner had intended to give up the presidency even at
that time. The SC held that the resignation of the petitioner cannot be doubted. It was
confirmed by his leaving Malacañang. In the press release containing his final
statement, (1) he acknowledged the oath-taking of the respondent as President of the
Republic albeit with reservation about its legality; (2) he emphasized he was leaving the
Palace, the seat of the presidency, for the sake of peace and in order to begin the
healing process of our nation. He did not say he was leaving the Palace due to any kind
inability and that he was going to re-assume the presidency as soon as the disability
disappears: (3) he expressed his gratitude to the people for the opportunity to serve
them. Without doubt, he was referring to the past opportunity given him to serve the
people as President (4) he assured that he will not shirk from any future challenge that
may come ahead in the same service of our country. Petitioner's reference is to a future
challenge after occupying the office of the president which he has given up; and (5) he
called on his supporters to join him in the promotion of a constructive national spirit of
reconciliation and solidarity.
CASTAÑAGA, JEZREEL D.
JD3A

12. THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant-appellee, vs.


CARMEN MARTINEZ and DOLORES MARTINEZ

FACTS:

In the cadastral proceedings instituted in the Court of Land Registration for the
settlement of titles to lands in the municipality of Iloilo, Province of Iloilo, Dolores and
Carmen Martinez on May 11, 1914, appeared claiming to be the owners of lots Nos.
873 and 450. They alleged in effect, after describing said lots, that they were in
possession thereof for about twenty-five years, having acquired them by donation from
Maria Sarlabus, and that their predecessors in interest had had possession of the same
for at least three years prior to said donation.

When the case came up for trial, Julio Salvador, through his attorney, entered his
appearance and claimed title to said lots, alleging that he was in actual possession
thereof, and that his predecessors in interest had been in possession before him for at
least fourteen years.

ISSUE:

Whether the trial court err is admitting the copy of the record of the document of sale
without the disappearance or loss of the original document having been previously
proved.

HELD:

While it is true that the record of any document in a public registry is a public document,
yet before the record or a certified copy of the recital made in a public registry of the
contents of a deed of sale, may be admitted as evidence of the contents of said deed, it
is indispensable to establish first that said deed really existed, was duly executed and
was lost; for while it may be true that said document was really presented to the
registry, as stated in the entry or the books of the registry, yet the document actually
presented may have been falsified or simulated, and may not have really been executed
by the parties appearing thereon to have signed the same.

And if it really existed, it should be presented unless it is proven to have been lost, in
which case, and only then, secondary evidence may be introduced.
CASTAÑAGA, JEZREEL D.
JD3A
13. THE CONSOLIDATED BANK AND TRUST CORPORATION
(SOLIDBANK), Petitioners, vs.DEL MONTE MOTOR WORKS, INC., NARCISO
G. MORALES, AND SPOUSE, Respondents

FACTS:

Solidbank filed before the RTC a complaint for recovery of sum of money against
respondents, in order to bind their conjugal partnership of gains. The Bank alleges that
on 23 April 1982, it extended a loan in favor of respondents in the amount of
P1,000,000.00 as evidenced by a promissory note executed by respondents on the
same date. Under the promissory note, Del Monte Motor Works, Inc. and Morales
bound themselves jointly and severally to pay the Bank the full amount of the loan
through twenty-five monthly installments of P40,000.00 a month with interest pegged at
23% per annum. As respondents defaulted on their installments, the full amount of the
loan became due and demandable. Petitioner likewise alleges that it made oral and
written demands upon respondents to settle their obligation but notwithstanding these
demands, respondents still failed to pay their indebtedness which, as of 09 March 1984,
stood at P1,332,474.55. Petitioner attached to its complaint as Annexes “A,” “B,” and
“C,” respectively, a photocopy of the promissory note supposedly executed by
respondents, a copy of the demand letter it sent respondents dated 20 January 1983,
and statement of account pertaining to respondents’ loan.

ISSUE:

Whether the application of best evidence rule which resulted to the exclusion of Exhibit
“E” was proper.

RULING:

No. "Best Evidence Rule" as encapsulated in our Revised Rules of Civil Procedure is
not absolute. The rule accepts of exceptions one of which is when the original of the
subject document is in the possession of the adverse party. As pointed out by petitioner
in its motion to inhibit, had it been given the opportunity by the court a quo, it would
have sufficiently established that the original of Exhibit "A" was in the possession of
respondents which would have called into application one of the exceptions to the "best
evidence rule."

Significantly, respondents failed to deny specifically the execution of the promissory


note. This being the case, there was no need for petitioner to present the original of the
promissory note in question. Their judicial admission with respect to the genuineness
and execution of the promissory note sufficiently established their liability to petitioner
regardless of the fact that petitioner failed to present the original of said note. Indeed,
when the defendant fails to deny specifically and under oath the due execution and
genuineness of a document copied in a complaint, the plaintiff need not prove that fact
as it is considered admitted by the defendant.
CASTAÑAGA, JEZREEL D.
JD3A
14. JOHNSON LEE, petitioner, vs. PEOPLE OF THE PHILIPPINES and
NEUGENE MARKETING, INC., respondents.

FACTS:

NMI sold and delivered to the VMCI 77,500 pieces of empty white bags for the price of
565,750.00. NMI issued Charge Invoice No. 0809 dated June 11, 1987 to VMCI
covering said sale. VMCI again purchased 100,000 pieces of empty white bags from
NMI for 730,000.00 for which NMI issued Charge Invoice No. 0810. In payment of said
purchases from NMI, VMCI drew and issued two BPI Checks. Both checks were
payable to the order of NMI.

On March 22, 1988, Lee, Moreno, Tan and Martin filed a petition with the Securities and
Investigation Clearing Department (SICD) of the Commission praying, among other
things, for the annulment or nullification of the Certification of Filing of Resolution of
Voluntary Dissolution of NMI for being contrary to law and its by-laws.
In the meantime, the trustee wrote the president of the company, requesting him to turn
over to it the P1,500,150.00 he received in payment of the empty bags sold by NMI to
VCMI. However, he failed to do so. Due to nonpayment, a verified complaint for three
(3) counts of estafa was filed against the petitioner and Sonny Moreno with the City
Prosecutor’s Office. Appended to the complaint were photocopies of Charge Invoices,
issued by NMI to VMCI.

ISSUE:

Whether the photocopies of invoices offered as secondary evidence be admitted without


proof of its loss or unavailability and execution of the original.

HELD:

The rule applicable for this case is Rule 130, Section 5 of the Revised Rules of Court.

The Court agreed that the Certification signed by Carolina Diaz was inadmissible in
evidence against him because of the failure of the prosecution to present her as witness
and to testify on said certification.

However, the records show that, in obedience to the subpoena duces tecum and ad
testificandum issued by the trial court directing the VMCI to produce the originals of the
checks and the charge invoices, the Manager for Corporate Affairs, testified that all its
records, including the charge invoices and checks, were destroyed seven years ago in a
flash flood which occurred on November 28, 1995, and that such loss/destruction was
known to all the employees of VMCI, including herself.
Contrary to the claim of the petitioner, the prosecution adduced preponderant evidence
to prove the existence, the due execution and the authenticity of the said checks and
charge invoices consisting of the admission of no less than the petitioner in his counter-
affidavit. The petitioner admitted therein that he received the total amount of
P1,500,150.00 from VMCI in full payment of the delivery and sale of the empty bags by
NMI to VMCI and that the said amount was in the custody of the said corporation. The
decision of the Court of Appeals is affirmed.
CASTAÑAGA, JEZREEL D.
JD3A
15. SIXTO TIMBOL Y MANALO, plaintiff and appellee, vs. JANUARIA MANALO
ET AL., defendants and appellants.

FACTS:

Feijoo, a resident attorney and notary public was called to the house of Timbol, for the
purpose of taking the acknowledgment of Cesarea to her last will and testament. Timbol
was also appointed as executor of the said will, without bond, and given full power to do
all things necessary in connection with the execution of its provisions. A copy of the
aforesaid will was presented before the CFI for probate. Counsel for the defendants
objected to the said probate. But it was admitted to probate as the last will and
testament of the deceased, Cesarea Manalo and issued letters of administration to
Timbol. The original of which said will should have been in the protocol of the said
notary public from whom the aforesaid executor, Sixto Timbol, obtained the copy
bearing his signature and official seal and which copy follows page 52 of the record of
the Supreme Court, in this case.

ISSUE:

Whether the existence and due execution of the will in question was duly proven by the
copy presented before the Court

HELD:

The value of a copy of an instrument as evidence depends upon whether the original
instrument have been lost or not, whatever the cause of the loss might have been. It will
be sufficient to show either by a statement or a certificate to the effect from official who
had the custody of the protocol or by any other accepted means of proof that the
original was lost.

Article 1221 of the Civil Code provides:

Should the original instrument, the protocol, and the original record have disappeared,
the following shall constitute evidence:

1. First copies made by the public official who authenticated them.

2. Subsequent copies issued by virtue of a judicial mandate, after citing the persons
interested.

3. Those which, without a judicial mandate, may have been taken in the presence of the
persons interested and with their consent.

In the absence of the said copies, any other copies, thirty or more years old, shall be the
evidence, provided they have been taken from the original by the official who
authenticated them or by the other in charge of their custody.

Copies less than thirty years old, or which may be authenticated by a public official, in
which the circumstances mentioned in the proceeding paragraph do not concur, shall
serve only as a basis of written evidence.

In the case at bar, it was proved that the protocols and archives of the notary of
Pampanga were lost. We must, therefore, given legal force to the copy of the said will
presented by the executor which although not as old as that contemplated in paragraph
5 article 1221 of the Civil Code, appears to be, however, an authenticated copy of its
original, certified to by the sale notary before whom the will was executed, the said copy
bearing the notary's official seal. It has not been shown that the copy in question is
CASTAÑAGA, JEZREEL D.
JD3A
inexact or not authentic, and, as written evidence, corroborated as it is by the uniform
testimony the attesting witnesses who testified as to the correctness ad authenticity of
the said copy and of the notary's signature, it furnishes the most complete proof of the
fact that Cesarea executed the will in the terms set forth in the said copy, those who
opposed the probate the will having failed to show that the testatrix was unable to
execute the same or that the copy submitted to the court as aforesaid was not
authentic.
CASTAÑAGA, JEZREEL D.
JD3A
16. MODESTO LIMJOCO and TEODORA HONSAYCO, applicants and
appellees, vs. DIRECTOR OF LANDS, DIRECTOR OF FORESTRY,
SANTIAGO QUIJANO, and RAFAEL VILLAROMAN, opponents. DIRECTOR
OF LANDS,

FACTS:

The application for registration filed by the spouses Modesto and Teodora was opposed
by the Director of Lands, the Director of Forestry, Santiago Quijano, and Rafael
Villaroman.

The provincial fiscal of Pampanga, in behalf of the Director of Lands, appealed from the
judgment of the court below to the SC through the proper bill of exceptions, and now
alleges that the trial court erred: (a) in failing to hold that the applicants have not proved
the identity of the land they allege belongs to them and which they seek to register; (b)
in holding that the applicants have sufficient right to warrant the registration and
adjudication of the land described in their application in their favor, among others.

As to the identity of the land in question, the court below held that the applicants and
witnesses explained the difference in the eastern and southern boundaries and that the
land in question is described in plan Exhibit A, and represents the eastern part of the
land described in Exhibit C. They were able to describe the land in question.

Counsel for the appellant contends that the trial court erred in holding the applicants
sufficiently entitled to the registration and adjudication of the land described in the
application. The composition title referred to by the notary who certified Exhibit C has
not been produced for the reason that said document was lost during the confusion
which followed the change of sovereignty. But we believe that said title of composition
with the State was doubtless issued to Isabel Gatbonton, not only on the authority of
Notary Pedro Garcia Enrico’s assurance, but also because of Exhibit D. Exhibit D is
certainly not the composition title issued to Isabel Gatbonton.

ISSUE:

Whether the applicants are entitled to the registration and adjudication of the land
described in the application although they failed to present the composition title with the
State.

HELD:

Yes. The composition title referred to by the notary who certified Exhibit C has not been
produced for the reason that said document was lost during the confusion. But the Court
believe that said title of composition with the State was doubtless issued to Isabel not
only on the authority of Notary Pedro Garcia Enrico’s assurance, but also because of
Exhibit D. Exhibit D is certainly not the composition title issued to Isabel Gatbonton. The
applicants do not allege it, nor has the trial court so held. It is simply a true copy of the
record of a composition of lands in the barrio of Calauitan, within the jurisdiction of the
town of Candaba, Province of Pampanga, initiated by Doña Isabel Gatbonton on April
17, 1884, which record is in the files of the Bureau of Lands, being certified to by the
Director of Lands. Said Exhibit D narrates the steps taken in that proceeding. Failure to
present the composition title with the State cannot prejudice the applicants’ right, for, its,
loss having been proved, its contents could be proved by a copy or a recital of its
contents in some authentic document, or by the recollection of a witness.
CASTAÑAGA, JEZREEL D.
JD3A

17. E. MICHAEL & CO., INC., plaintiff-appellant, vs.ADRIANO ENRIQUEZ

FACTS:

This action is based on a sale with right to repurchase made by Enriquez in favor of E.
Michael and E. Michael & Co., sociedad en comandita, of which MCI claims to be a
successor by reason of an instrument duly executed and delivered by the former to the
latter transferring property, business and assets of every kind including the land which is
the subject of this litigation. It is alleged that the period to repurchase had expired thus
consolidating ownership in MCI. During the trial, MCI sought to prove the execution and
delivery of the conveyance transferring to it the land described in the pacto de retro. The
TC prevented MCI from proving that fact. MCI also attempted to prove the fact that thein
strument so executed and delivered was lost, it being his purpose to lay the basis for
the introduction of secondary evidence as to its contents. The TC also prevented
appellant from proving that. While the efforts of MCI’s counsel to prove the execution
and delivery of the document were at times rather informal and objections to such
questions were properly sustained, at others the questions put for the purpose of
proving those facts were well framed and answers should have been allowed to them;
but, even in such cases, the TC also sustained & objections to the questions and the
evidence sought to be adduced was excluded.

ISSUE:
 
Whether or not the TC erred in prohibiting the introduction of incompetent evidence

HELD:

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 (1) that the document was duly executed and delivered,
where delivery is necessary (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
CASTAÑAGA, JEZREEL D.
JD3A
other investigation which is sufficient to satisfy the Court that the document was indeed
lost.

18. BERNARDINO RAMOS and ROSALIA OLI, petitioners, vs. COURT OF


APPEALS, RODOLFO BAUTISTA and FELISA LOPEZ,

FACTS:

Tolentino, claiming absolute ownership over Lot Nos. 572 and 579 separately sold said
lots to the spouses Bernardino Ramos and Rosalia Oli. The conveyances were
allegedly evidenced by two documents both entitled "Escritura de Compra Venta"  and
acknowledged before a notary public.

However, petitioners instituted an action for reconveyance with damages alleging that


while they were "in open public, adverse, peaceful and continuous possession" of the
subject lots "in good faith and with just title, for not less than fifty (50) years, personally
and through their predecessors-in-interest,". Thus, they concluded that the original
certificates of title as well as TCT Nos. T-31698 and T-31699 obtained by Rodolfo
Bautista were null and void. On the theory that they already acquired the subject lots by
acquisitive prescription, petitioners demanded their return but private respondents
refused to do so, hence, compelling them to file a complaint for reconveyance with
damages.

On the other hand, herein private respondents, the spouses Rodolfo Bautista and Felisa
Lopez, likewise claimed absolute ownership of the lots covered by TCT Nos. T-31698
and T-31699. They alleged that while the records of the Bureau of Lands showed that
during the cadastral survey in Gattaran in 1932, Pedro Tolentino was a claimant over
lands in the cadastre, the same was only with respect to Lot No. 1399 which was
eventually titled under his name as OCT No. 16110. It just happened that Lot No. 1399
was adjacent to Lot No. 572, a portion of which was occupied by petitioners upon the
tolerance of the original registrant Lucia Bautista.

ISSUE:

Whether the documents presented should be accepted and should be binding.

HELD:

The two documents denominated as Escritura de Compra Venta which were executed


in 1939 would have well qualified as ancient documents since they were already in
existence for more than thirty years in 1976 when the case for reconveyance was
initially filed. The original documents, however, were not presented in evidence as these
had been apparently lost in the fire that gutted the office of petitioners' counsel. Under
the circumstances, it should have been the duty of petitioners therefore to prove the
existence of the documents in accordance with Rule 130 of the Revised Rules of Court
which states: When the original document has been lost or destroyed, or cannot be
produced in court, the offerror, upon proof of its execution or existence and the cause of
its unavailability without bad faith on his part, may prove its contents by a copy, or by a
recital of its contents in some authentic document, or by the testimony of witnesses in
the order stated.

It appears that the loss of the two documents of sale was shown by testimonial
evidence of petitioners' counsel, Atty. MacPaul B. Soriano, whose law office was
burned. Upon realizing that the documents involved here had been irretrievably lost
because of the fire, Atty. Soriano suggested to petitioners that they should see their
other lawyer, Atty. Laggui, who could provide them with certified true copies thereof.
CASTAÑAGA, JEZREEL D.
JD3A
Thus, the copies of the documents that petitioners presented in court each contained a
certification

This certification, however, does not imply that the documents certified to were
authentic writings although it proves the existence of the documents purportedly
evidencing the sale. Rule 132 provides the manner by which the due execution and
authenticity of private writings like the deeds involved here, should be established.
CASTAÑAGA, JEZREEL D.
JD3A

19. ONG CHING PO, YU SIOK LIAN DAVID ONG and JIMMY ONG, petitioners, vs.
COURT OF APPEALS and SOLEDAD PARIAN

FACTS:

On July 23, 1947, Ong Joi Jong sold a parcel of land Soledad Parian, the wife of Ong
Yee. The latter, the brother of petitioner Ong Ching Po, died in January 1983 while
petitioner Ong died in October 1986. The said sale was evidenced by a notarized Deed
of Sale written in English. Subsequently, the document was registered with the Register
of Deeds of Manila, which issued TCT No. 9260 dated September 2, 1947 in the name
of private respondent.

According to private respondent, she entrusted the administration of the lot and building
to petitioner Ong Ching Po when she and her husband settled in Iloilo. When her
husband died, she demanded that the lot be vacated because she was going to sell it.
Unfortunately, petitioners refused to vacate the said premises.

On March 19, 1984, private respondent filed a case for unlawful detainer against Ong
Ching Po. The lower court dismissed her case. The dismissal was affirmed by the RTC.
The decision of the Regional Trial Court was, in turn, affirmed by the CA, which
dismissed the petition. The decision of the Court of Appeals became final and
executory.

Petitioners, on the other hand, claimed that on July 23, 1946, petitioner Ong Ching Po
bought the said parcel of land from Ong Joi Jong. The sale was evidenced by a photo
copy of a Deed of Sale written in Chinese with the letter head "Sincere Trading Co."
(Exh. "B").

On December 6, 1983, petitioner Ong Ching Po executed a Deed of Absolute Sale


conveying to his children, petitioners Jimmy and David Ong, the same property sold by
Ong Joi Jong to private respondent in 1947. On December 12 1985, petitioners Ong
Ching Po, Jimmy Ong and David Ong filed an action for reconveyance and damages
against private respondent in the Regional Trial Court, Branch 53, Manila, docketed as
Case No. 85-33962.

On July 26, 1986, private respondent filed an action for quieting of title against
petitioners Ong Ching Po and his wife, petitioner Yu Siok Lian, in the RTC. Upon her
motion, the case was consolidated with the Civil Case No. 85-33962. On May 30 1990,
the trial court rendered a decision in favor of private respondent. On appeal by
petitioners to the Court of Appeals, the said court affirmed the decision of the Regional
Trial Court.

ISSUE:

Whether the CA err when it did not give credence to Exhibit “B” and “C”.

HELD:

No. 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 document. The correct order of proof is as
follows: existence; execution; loss; contents. This order may be changed if necessary in
the discretion of the court.
CASTAÑAGA, JEZREEL D.
JD3A
Petitioners failed to adduce evidence as to the genuineness and due execution of the
deed of sale, Exhibit "B".

The due execution of the document 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.
CASTAÑAGA, JEZREEL D.
JD3A

20. LIGAYA S. SANTOS, Petitioner, v. COURT OF APPEALS and PHILIPPINE


GERIATRICS FOUNDATION, INC., 

FACTS:

PGFI occupied the ground floor of the Geriatrics Center which and later on built a
gymnasium adjacent to said building which was converted into a canteen and occupied
by Ligaya by virtue of a letter-contract executed between her and Pulido. PGFI was then
asked to vacate the premises then asked petitioner to vacate it in a letter advising
Ligaya the termination of the lease contract but the latter refused. PGFI was forcibly
ejected and filed an ejectment case against Ligaya which was dismissed because PGFI
failed to establish the existence of a lease contract between the parties and as claimed
by PGFI, it was lost when they were forcibly ejected from the Geriatrics Center. PGFI
tried to prove the existence of the lost contract by presenting an unsigned photocopy of
the affidavits of the officers of said company. During appeal, PGFI found the copy of the
lease contract signed by petitioner and Pulido. Ligaya asserts that the copy was merely
"reconstructed" by Pulido during the trial of the ejectment case. She cites in support of
this assertion the statement of the CA that Pulido "correctly recalled" the contents of the
contract when he presented an unsigned copy thereof during trial. PGFI contends that
the original contract should no longer be an issue since secondary evidence had
already been presented proving its existence and execution. However, the original
serves to confirm what was proven through the unsigned copy.

ISSUE:

Whether the unsigned copy of the alleged letter-contract of lease executed between
petitioner and PGFI.

HELD:

Yes. The Rules of Court provides, in case the original of the document is lost:

SEC. 5. When original document is unavailable. — When the original document has
been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its
execution or existence and the cause of its unavailability without bad faith on his part,
may prove its contents by a copy, or by a recital of its contents in some authentic
document, or by the testimony of witnesses in the order stated.

In the case at bar, the existence and due execution of the lease contract had been
established by the affidavits of trustees of PGFI who were signatories thereto. The loss
of said contract was likewise established by the affidavit of Vicente Pulido, who attested
to the fact that he kept the original and a duplicate copy of the contract at the PGFI
office at the Geriatrics Center. Secondary evidence, then, may be admitted to prove the
contents of the contract.

The contents of the original document may be proved (1) by a copy; (2) by a recital of its
contents in some authentic document; or (3) by the recollection of witnesses, in the
order stated. There is testimonial evidence on record to prove the contents of the lost
lease contract. The affidavits of the witnesses for PGFI contain a recital of the offer of
petitioner to occupy the subject premises for a specified amount payable every month,
and the conformity to these terms by the trustees of PGFI who signed thereon. Thus,
even dispensing with the unsigned copy that was presented at the trial of this case,
there is still evidence of the contents of the contract in the form of testimonial evidence.
The contents of the lost original copy may not only be proved by a copy thereof but also
by the testimony of witnesses. At best, the original copy of the contract that was later
CASTAÑAGA, JEZREEL D.
JD3A
found merely affirms what had already been established by secondary evidence.

21. CANDIDO CENTENERA, plaintiff and appellant, vs. JUAN GARCIA PALICIO

FACTS:

Centenera was the defendant in foreclosure proceedings instituted by Garcia upon a


mortgage of a certain real estate. Judgement for foreclosure was rendered in favor of
Garcia for the amount of Php 18,000, leaving an unsatisfied balance due him by
Centenera of Php6,000. Thereafter, the parties executed a written agreement to settle
their issues. Stipulated in the agreement is the right of Centenera to repurchase the
property. Seven months later, Centenera seek to exercise the right to repurchase the
property however, Garcia contends that such right is only limited to one month from the
date of the contract and not four years as stipulated in the contract.

The CFI ruled in favor of Garcia. Hence this petition for the specific performance of a
contract for sale of the land.

ISSUE:

Whether Centenera could no longer exercise his right to repurchase.

HELD:

No. The evidence conclusively discloses that, either by fraud or mistake,  the words
"within the period of one month from  this date" were  omitted  from  the  opening
paragraph of this clause as it appears in that  instrument. Both parties were under the
mistaken impression at that time that these words  or their equivalent were  actually
inserted in the final draft of the contract executed by them and that not by fraud, but by
a mere scrivener's mistake these words were omitted by the typewriter who prepared
the final draft of the proposed agreement for the signatures of the parties.

It was further held the improbability that the agreement would have  been entered into in
the form in which it is set forth in the written instrument, confirms our belief, based upon 
the evidence of record, that the time limitation of one month upon the exercise of the
right secured to Centenera in the fifth clause, was omitted from the final draft of the
instrument evidencing the contract  by a mistake of the copyist;  and that when this
instrument was executed, both  parties were under the mistaken impression that it 
contained such a time limit, in accordance with the agreement already entered into as to
the terms and conditions which should be set forth in the document evidencing that
agreement. In this case, the evidence is so strong and convincing as to leave no room
for rational doubt that the time limitation of one month upon the right to exercise the
option contained  in clause 5 of the contract was  agreed upon by both Centenera and
Palicio, and that its omission from the written instrument evidencing the contract was
the  result either of fraud or mutual mistake. 
CASTAÑAGA, JEZREEL D.
JD3A

22. CARLOS PALANCA, plaintiff-appellant, vs. FRED WILSON & CO.,

FACTS:

Palanca, entered into a contract with Fred Wilson and Co. for the purchase of a distilling
apparatus for P10,000. Wilson and Co. ordered the apparatus of Turner, Schon and
Co., London, installing it in January, 1914. On May 18, 1914, or about five months after
the machine was installed, Palanca wrote Wilson and Co. that the rectifying machine
had been examined by a number of competent persons who stated that the machine
was not capable of producing the amount of alcohol stipulated in the contract. Getting
no satisfaction from the reply of Wilson and Co., action for damages for breach of
contract was begun in the Court of First Instance of the city of Manila, praying first that
the defendant be ordered to comply strictly with the terms of the contract and second
that the defendant be ordered to pay as damages the amount of P16,713.80.

Defendant answered with a general denial and a cross-complaint asking judgment


against the plaintiff in the sum of P5,000, the final installment claimed to be due as the
purchase price of the machine. By the judgment handed down by the Honorable James
A. Ostrand, judge of first instance, it was ordered that the plaintiff take nothing by his
action, and that the defendant have and recovered judgment against the plaintiff for the
sum of P5,000, with interest thereon at the rate of 12 per cent per annum from the first
day of September, 1914, without special findings as to costs.

It is around the first clause of the contract (Exhibit D) that all the argument centers. This
clause reads: "Un aparato; 'Guillaume' para la destilacion-rectificacion directa y
continua; tipo 'C,' Agricola, de una capacidad de 6,000 litros cada 24 horas de trabajo,
de un grado de 96-97 Gay Lussac, todo segun el grabado de la pagina 30 del catalogo
Egrot, edicion de 1907." 

ISSUE:

How should clause one be interpreted.

HELD:

The Court thinks that there is intrinsic ambiguity in the contract which needs
explanation. Section 285 of the Code of Civil Procedure providing that a written
agreement shall be presumed to contain all the terms, nevertheless "does not exclude
other evidence of the circumstances under which the agreement was made, or to which
it relates, or to explain an intrinsic ambiguity." Turning to the surrounding circumstances,
the Court finds the following: Wilson and Co. in their offer to Song Fo and Co. on June
9, 1913, while mentioning capacity, only did so in express connection with the name
and description of the machine as illustrated in the catalogue. They furnished Song Fo
and Co. with plans and specifications of the distilling apparatus; and these describe a
capacity of 6,000 liters of jus (ferment). Wilson and Co.'s order to manufacturer, while
mentioning a capacity of 6,000 liters per day, does so again in connection with the
description in the maker's catalogue. And, finally, it was stated during the trial, and it has
not been denied, that a machine capable of producing 6,000 liters of rectified alcohol
every 24 hours from nipa ferment would cost between P35,000 and P40,000.

The Court stated that it is constrained to hold that the proper construction of clause 1 of
the contract, in question in connection with the conduct of the parties and surrounding
CASTAÑAGA, JEZREEL D.
JD3A
circumstances, is that Wilson and Co. were to furnish Song Fo and CO. a distilling
apparatus, type C (Agricola), as described on page 30 of the maker's catalogue,
capable of receiving or treating 6,000 liters every 24 hours of work and of producing
alcohol of a grade 96-97 Gay Lussac.

23. TERESITA C. GERALES, CESAR DELA FUENTE, MARCELA GOLDING,


MARIA VERGARA and PERLITO TRIGERO, petitioners, vs.HON. COURT OF
APPEALS, ENRIQUE E. PIMENTEL and LETICIA FIDELDIA, respondents.

FACTS:

A car owned by Leticia, then driven by Pimentel, hit car, owned by Gerales then driven
by Cesar Dela Fuente with other passengers. Pimentel was charged before the MTC
with the crime of Damage to Property with Multiple Physical Injuries thru Reckless
Imprudence.

During the pendency of the criminal case, particularly on January 11, 1985, private
offended parties (now petitioners) Maria Vergara, Perlito Trigero, Marcela del Rosario
Golding, Cesar Dela Fuente, and Teresita Gerales filed a civil case for Damages in the
total amount of P400,000.00 in the RTC against Pimentel and Leticia.

On April 23, 1985, or after the filing of Civil Case No. 5210 but before the service of
summons upon the defendants , the claims of the offended parties were amicably
settled.

ISSUE:

Whether a notarized instrument is admissible in evidence.

HELD:

Yes.

A notarized instrument is admissible in evidence without further proof of its due


execution and is conclusive as to the truthfulness of its contents, although not absolute
but rebuttable by clear and convincing evidence to the contrary.

A public document executed and attested through the intervention of the notary public is
evidence of the facts in clear, unequivocal manner therein expressed. It has in its favor
the presumption of regularity. In order to contradict all these, there must be evidence
that is clear and convincing more than merely preponderant. Petitioners cannot now
question the validity and/or veracity of the releases of claims on the allegation that the
same were executed on their belief that what they received were only partial
settlements and that they could not have released them forever from all actions arising
from such vehicular accident.
CASTAÑAGA, JEZREEL D.
JD3A

24. MAGELLAN MANUFACTURING MARKETING CORPORATION,* petitioner, vs.


COURT OF APPEALS, ORIENT OVERSEAS CONTAINER LINES and F.E.
ZUELLIG, INC. 

FACTS:

MMMC entered into a contract with Choju Co. of Yokohama, Japan to export 136,000
anahaw fans for and in consideration of $23,220.00. Through its president, James Cu,
MMMC then contracted F.E. Zuellig, a shipping agent to ship the anahaw fans through
Orient Overseas Container Lines, Inc., (OOCL) specifying that he needed an on-board
bill of lading and that transhipment is not allowed under the letter of credit. appellant
MMMC paid F.E. Zuellig the freight charges and secured a copy of the bill of lading
which was presented to Allied Bank However, when appellant's president James Cu,
went back to the bank later, he was informed that the payment was refused by the
buyer allegedly because there was no on-board bill of lading, and there was a
transhipment of goods. As a result of the refusal of the buyer to accept, upon appellant's
request, the anahaw fans were shipped back to Manila by appellees, for which the latter
demanded from appellant payment of P246,043.43. Appellant abandoned the whole
cargo and asked appellees for damages.

ISSUE:

Whether Choju shall be liable to pay MMMC under their contract.

HELD:

No. Under the parol evidence rule, he terms of a contract are rendered conclusive upon
the parties, and evidence is not admissible to vary or contradict a complete and
enforceable agreement embodied in a document, subject to well defined exceptions
which do not obtain in this case.

The parol evidence rule is based on the consideration that when the parties have
reduced their agreement on a particular matter into writing, all their previous and
contemporaneous agreements on the matter are merged therein. Accordingly, evidence
of a prior or contemporaneous verbal agreement is generally not admissible to vary,
contradict or defeat the operation of a valid instrument.

The mistake contemplated as an exception to the parol evidence rule is one which is a
mistake of fact mutual to the parties. Furthermore, the rules on evidence, as amended,
require that in order that parol evidence may be admitted, said mistake must be put in
issue by the pleadings, such that if not raised inceptively in the complaint or in the
answer, as the case may be, a party cannot later on be permitted to introduce parol
evidence thereon. The mistake adverted to by herein petitioner, and by its own
admission, was supposedly committed by private respondents only and was raised by
the former rather belatedly only in this instant petition. Clearly then, and for failure to
comply even only with the procedural requirements thereon, we cannot admit evidence
to prove or explain the alleged mistake in documentation imputed to private
respondents by petitioner.
CASTAÑAGA, JEZREEL D.
JD3A

25. HENRY W. PEABODY & COMPANY, Plaintiff-Appellant, v. J. F. BROMFIELD


and JAMES ROSS, Defendants-Appellees.

FACTS:

This action was instituted by the Henry W. Peabody & Company to recover a sum of
money of the two defendants. The liability which is sought to be established is based
upon a document (Exhibit B) purporting to be a contract of guaranty signed by the two
defendants. At the time when the document in question was executed, the Commercial
Vehicle Company was engaged in the business of selling automobiles and automobile
supplies, its purchases being made in the United States through the plaintiff. The capital
resources of the Commercial Vehicle Company were apparently inadequate for the
business it was conducting, and it was compelled to rely upon the credit extended to it
by the plaintiff. In the year 1912, the officials in charge of the affairs of the Vehicle
Company were informed by the plaintiff that their capital must be increased or the
plaintiff would exercise its right, under the contract then existing between the two
parties, to curtail the credit which the plaintiff had been extending.

ISSUE:

Whether the defendant should be held liable by virtue of the contract of guaranty.

HELD:

No.

It is manifest that said agreement could not reach the state of a completed contract until
the written document should be signed by each of the four who had agreed to put their
names upon it; and when the three gentlemen whose names appear thereon as
guarantors, had affixed their respective signatures, the contract, though externally
perfect, was still incomplete, and it could only be completed by the addition of a fourth
signature, to-wit, the name of P. M. Scott. The intention of the parties as revealed in
their agreement, was that the words "the undersigned," appearing in the contract,
should comprehend four persons; and the contract naturally could not operate in this
sense until it should have passed into the hands of Scott and been signed by him.

Scott knew that the agreement, in the form in which it was transmitted to him was
incomplete and would remain so until his name should be put upon it. By failing, under
these circumstances, to sign, he most undoubtedly placed his principal, Henry W.
Peabody & Company in such a position that it cannot enforce this contract for it is
obvious that there is a lack of essential agreement in its creation, the document
submitted being admittedly different from the agreement which was in fact made. It is
undoubtedly the duty of the courts to lend their assistance to the enforcement of any
contract which has been honestly made; and evasions are not to be tolerated. But it is
to be remembered the performance of the obligations of a contract is a duty incumbent
on both parties; and where it appears, as here, that the agent of the plaintiff, through
whose activities the contract was procured, has evaded the obligation which he
proposed to assume, the enforcement of the contract is wholly out of the question.
CASTAÑAGA, JEZREEL D.
JD3A

26. A. J. EVELAND,Plaintiff-Appellee, vs. THE EASTERN MINING


COMPANY,Defendant-Appellant.

FACTS:

The plaintiff commenced an action against the defendant for the purpose of recovering
a sum of money on two grounds: first, for services rendered by the plaintiff for the
defendant as engineer and general agent of the defendant and second, for the unpaid
salary and necessary expenses. In support of this claim the plaintiff introduced a letter
(Exhibit B) written by him to the defendant where he is expressing his desire to offer his
services to defendant and the resolution (Exhibit A) of the defendant’s board of
directors.

ISSUE:

Whether Exhibits A and B constituted a contract.

HELD:

Yes.

Exhibits A and B above quoted constituted an absolute offer and an absolute


acceptance and therefore together constitute a contract, in accordance with the terms of
the said exhibits. There was an attempt during the trial of the cause to vary the terms of
this contract, and while the court admitted much evidence which tended to vary the
terms of the said contract, yet the court in its decision in accordance with section 285 of
the Code of Procedure in Civil Actions, held that such evidence should not be allowed to
have the effect of varying the terms of the said contract.

The defendant attempted to show that the services rendered by the plaintiff while he
was in the United States were rather against than in favor of the interest of the
defendant. The evidence is not clear upon this question. Even though it should be
admitted, it would operate rather to show that the defendant had made a mistake in
entering into the contract with this particular plaintiff than to invalidate the contract which
it had made. The defendant further contends that it received no benefit whatever from
the services of the plaintiff while he was on his trip to the United States in the interest of
the said company. That fact may be admitted, for the payment of the salary and
expenses of the plaintiff mentioned in said contract were not dependable upon the result
of his efforts in behalf of said company. The evidence admitted for the purpose of
showing that the payment of the salary and expenses of the plaintiff depended upon
whether or not the efforts of the plaintiff in the United States were successful was
inadmissible under the contract. It would be extremely dangerous to permit testimony of
this character to vary the terms of written contracts. There is nothing in the record which
shows that at the time the offer and acceptance were made that the parties to the said
offer and acceptance had the remotest idea that the payment of the salary and
expenses mentioned in said contract depended upon the successful result of the efforts
of the plaintiff while on his trip to the United States
CASTAÑAGA, JEZREEL D.
JD3A
27. MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY
(MCIAA), petitioner,  vs. THE HON. COURT OF APPEALS and VIRGINIA
CHIONGBIAN

FACTS:

The Republic of the Philippines, filed an expropriation proceeding on several parcels of


land in which included Lot 941. Judgment was in favor of the Republic of the
Philippines. Subsequently, the assets of Lahug Airport was transferred to Mactan-Cebu
International Airport Authority including lot 941. Chiongbian filed a complaint for
reconveyance of Lot 941 alleging, that sometime in 1949, the National Airport
Corporation (NAC) ventured to expand the Cebu Lahug Airport. As a consequence, it
sought to acquire by expropriation or negotiated sale several parcels of lands adjoining
the Lahug Airport, one of which was Lot 941 owned by Virginia Chiongbian.

Virginia Chiongbian did not appeal and instead, accepted the compensation for Lot 941
upon the assurance of the NAC that she or her heirs would be given the right of
reconveyance for the same price once the land would no longer be used as airport.

ISSUE:

Whether Chiongbian could prove the existence of the alleged written agreement
acknowledging her right to repurchase Lot No. 941 through parole evidence.

HELD:

No. Chiongbian cannot rely on the ruling in Mactan Cebu International Airport vs.
CA wherein the presentation of parol evidence was allowed to prove the existence of a
written agreement containing the right to repurchase.  Said case did not involve
expropriation proceedings but a contract of sale.

 In the case at bar, the fact which private respondents seek to establish by parol
evidence consists of the agreement or representation made by the NAC that induced
Inez Ouano to execute the deed of sale; that the vendors and their heirs are given the
right of repurchase should the government no longer need the property. Where a parol
contemporaneous agreement was the moving cause of the written contract, or where
the parol agreement forms part of the consideration of the written contract, and it
appears that the written contract was executed on the faith of the parol contract or
representation, such evidence is admissible. It is recognized that proof is admissible of
any collateral parol agreement that is not inconsistent with the terms of the written
contract though it may relate to the same subject matter. The rule excluding parol
evidence to vary or contradict a writing does not extend so far as to preclude the
admission of existing evidence to show prior or contemporaneous collateral parol
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.

This pronouncement is not applicable to the present case since the parol evidence rule
which provides that "when the terms of a written agreement have been reduced to
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" applies to written agreements and has no
application to a judgment of a court.
CASTAÑAGA, JEZREEL D.
JD3A
28. CARLOS PALANCA, plaintiff-appellant, vs. FRED WILSON & CO.,

FACTS:

Palanca, entered into a contract with Fred Wilson and Co. for the purchase of a distilling
apparatus for P10,000. Wilson and Co. ordered the apparatus of Turner, Schon and
Co., London, installing it in January, 1914. On May 18, 1914, or about five months after
the machine was installed, Palanca wrote Wilson and Co. that the rectifying machine
had been examined by a number of competent persons who stated that the machine
was not capable of producing the amount of alcohol stipulated in the contract. Getting
no satisfaction from the reply of Wilson and Co., action for damages for breach of
contract was begun in the Court of First Instance of the city of Manila, praying first that
the defendant be ordered to comply strictly with the terms of the contract and second
that the defendant be ordered to pay as damages the amount of P16,713.80.

Defendant answered with a general denial and a cross-complaint asking judgment


against the plaintiff in the sum of P5,000, the final installment claimed to be due as the
purchase price of the machine. By the judgment handed down by the Honorable James
A. Ostrand, judge of first instance, it was ordered that the plaintiff take nothing by his
action, and that the defendant have and recovered judgment against the plaintiff for the
sum of P5,000, with interest thereon at the rate of 12 per cent per annum from the first
day of September, 1914, without special findings as to costs.

It is around the first clause of the contract (Exhibit D) that all the argument centers. This
clause reads: "Un aparato; 'Guillaume' para la destilacion-rectificacion directa y
continua; tipo 'C,' Agricola, de una capacidad de 6,000 litros cada 24 horas de trabajo,
de un grado de 96-97 Gay Lussac, todo segun el grabado de la pagina 30 del catalogo
Egrot, edicion de 1907." 

ISSUE:

How should clause one be interpreted.

HELD:

The Court thinks that there is intrinsic ambiguity in the contract which needs
explanation. Section 285 of the Code of Civil Procedure providing that a written
agreement shall be presumed to contain all the terms, nevertheless "does not exclude
other evidence of the circumstances under which the agreement was made, or to which
it relates, or to explain an intrinsic ambiguity." Turning to the surrounding circumstances,
the Court finds the following: Wilson and Co. in their offer to Song Fo and Co. on June
9, 1913, while mentioning capacity, only did so in express connection with the name
and description of the machine as illustrated in the catalogue. They furnished Song Fo
and Co. with plans and specifications of the distilling apparatus; and these describe a
capacity of 6,000 liters of jus (ferment). Wilson and Co.'s order to manufacturer, while
mentioning a capacity of 6,000 liters per day, does so again in connection with the
description in the maker's catalogue. And, finally, it was stated during the trial, and it has
not been denied, that a machine capable of producing 6,000 liters of rectified alcohol
every 24 hours from nipa ferment would cost between P35,000 and P40,000.

The Court stated that it is constrained to hold that the proper construction of clause 1 of
the contract, in question in connection with the conduct of the parties and surrounding
circumstances, is that Wilson and Co. were to furnish Song Fo and CO. a distilling
apparatus, type C, as described on page 30 of the maker's catalogue, capable of
receiving or treating 6,000 liters every 24 hours of work and of producing alcohol of a
grade 96-97 Gay Lussac.
CASTAÑAGA, JEZREEL D.
JD3A
29. MILWAUKEE INDUSTRIES CORPORATION, Petitioner, v. PAMPANGA III
ELECTRIC COOPERATIVE, INC

FACTS:

To be able to purchase directly from NAPOCOR, petitioner needed to secure a waiver


from respondent, as the municipality of Apalit was within its franchise area. Parties then
executed a Waiver Agreement for Sale of Electricity where petitioner promised to pay
respondent a waiver or royalty fee of its monthly power bill from NAPOCOR.
Respondent then filed a complaint against the petitioner for the unpaid royalties.
Petitioner denied the same and claimed that respondent allegedly misrepresented that it
had an existing agreement with another corporation, and its agreement therewith
contained the same terms and conditions as the Waiver Agreement between petitioner
and respondent. However, petitioner discovered that the other corporation only paid a
one-time fee for a similar waiver/royalty, while petitioner was required to pay royalties
every month.

The RTC rendered its decision in favor of petitioner and held that although the wording
of the contract makes it appear that petitioner is obligated to pay royalty fees to
respondent every month, there is proof that such was not the real intention of the
parties.

ISSUE:

Whether Milwaukee is liable to pay royalty fees to respondent.

HELD:

Yes. There being no ambiguity in the wording of Item 1 of the Waiver Agreement, its
literal meaning is controlling. To give effect to Item 1 as worded is likewise consistent
with the rule that when the terms of an agreement have been reduced to writing, it is
considered as containing all the terms agreed upon by the parties 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.

Even assuming arguendo that the Waiver Agreement failed to express the real intent of
the parties, and renders necessary a resort to evidence other than the Waiver
Agreement, an examination of the parties contemporaneous acts fails to support
petitioners contention that it is liable to pay royalty fees only when its electric power
consumption in a month exceeds 32 megawatts.

The Court of Appeals correctly held that any agreement between the respondent and
SKK has no relevance to the Waiver Agreement between respondent and petitioner,
since the latter is a contract separate and distinct from that of the respondent and SKK.
Since the terms of the Waiver Agreement are clear, and are not contrary to law, morals,
good customs, public order or public policy, the contract is considered as the law
between petitioner and respondent. Thus, petitioner must comply with its obligations
thereunder in good faith.
CASTAÑAGA, JEZREEL D.
JD3A
30. LAPU – LAPU FOUNDATION INC AND ELIAS TAN VS CA AND ALLIED
BANKING CORPORATION

FACTS:

Sometime in 1977, Tan, then President of the Lapulapu Foundation, Inc., obtained four
loans from the respondent Allied Banking Corporation covered by four promissory
notes. The entire obligation amounted to ₱493,566.61 and despite demands the
petitioners failed to pay the same. The respondent Bank filed with the RTC a complaint
seeking payment by the petitioners, jointly and solidarily, of the sum of ₱493,566.61
representing their loan obligation, exclusive of interests, penalty charges, attorney’s
fees and costs.

The Foundation denied incurring indebtedness from the respondent Bank alleging that
the loans were obtained by petitioner Tan in his personal capacity, for his own use and
benefit and on the strength of the personal information he furnished the respondent
Bank. Tan admitted that he contracted the loans from the Bank in his personal capacity.
The parties, however, agreed that the loans were to be paid from the proceeds of Tan’s
shares of common stocks. The loans were covered by promissory notes which were
automatically renewable ("rolled-over") every year at an amount including unpaid
interests, until such time as petitioner Tan was able to pay the same from the proceeds
of his aforesaid shares.

ISSUE:

Whether the CA erred is applying the parole evidence rule.

HELD:

The parol evidence rule constrains this Court to reject Tan’s claim regarding the
purported unwritten agreement between him and the respondent Bank on the payment
of the obligation. Section 9, Rule 130 of the of the Revised Rules of Court provides that
"when the terms of an agreement have been reduced to writing, it is to be 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."

In this case, the promissory notes are the law between the petitioners and the Bank.
This purported unwritten agreement could not be made to vary or contradict the terms
and conditions in the promissory notes. Evidence of a prior or contemporaneous verbal
agreement is generally not admissible to vary, contradict or defeat the operation of a
valid contract. While parol evidence is admissible 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 writing, unless there has
been fraud or mistake. No such allegation had been made by the petitioners in this
case.

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