Digested Cases
EVIDENCE
Case No.1
G.R. No. 138941, October 8, 2001
American Home Assurance Company, petitioner
Vs.
Tantuco Enterprises, Inc., respondent
FACTS:
Tantuco Enterprises, Inc. is engaged in
the coconut milling and refinery industry. It owns two oil mills both located
at its factory compound. The two oil mills were separately covered by fire
insurance policies issued by American Home Assurance Company. Both policies are
paid for the full amount of premium covering for the period of March 1, 1991 to
1992. On September 30, 1991, a fire broke out, gutted and consumed the new oil
mill. Insurer was immediately notified of the incident and thereafter sent
appraisers who inspected the burned premises and the properties destroyed.
However, insurer rejected the claim for the insurance proceeds on the ground
that no policy was ever issued by it covering the burned oil mill citing the
erroneous boundaries described in its policy. Further, insurer argues that
Tantuco Enterprises is barred by parol evidence rule from presenting evidence of
its self-serving intention that it intended really to insure the burned oil
mill.
ISSUES:
I.
What is Parol
Evidence Rule?
II.
WON Tantuco
Enterprises is barred by Parol Evidence Rule in presenting evidence aliunde?
RULING:
I. Parol Evidence Rule is a rule of
evidence which states that when the terms of an agreement have been reduced to
writing, it is considered as containing all the terms agreed upon and there can
be between the parties and successors in interest, no evidence of such terms
other than the contents of the written agreement. Put differently, the parol
evidence rule forbids any addition to or contradiction of the terms and
conditions of a written instrument by testimony or other evidence. The rule is
based on the presumption that the parties have made the written instrument the
only repository and memorial of the truth and whatever is not found in the
instrument must have been waived and abandoned.
II. No. The contention cannot pass
judicial muster. It is clear that the source of discrepancy happened during the
preparation of the written contract. The Court holds that the present case
falls within one of the recognized exceptions to the parol evidence rule. A
party may present evidence to modify, explain or add to the terms of a written
agreement if he puts in issue his pleading, among others, its failure to
express the true intent and agreement of the parties. Clearly in the instant
case, the contractual agreement of the parties cannot be understood from a mere
reading of the instrument. Thus, while the contract explicitly stipulated that
it was for the new oil mill, the boundary description written on the policy
concededly pertains to the first oil mill. This irreconcilable difference can
only be clarified by admitting evidence aliunde, which will explain the
imperfection and clarify the intent of the parties.
Case No. 2
G.R. No. 75504, April 2, 1991
Vicente Cu, petitioner
Vs.
The Honorable Court of Appeals, Braulio Abad
and Camaro Paint Manufacturing Enterprises, Inc.,
respondents
FACTS:
Vicente Cu by contract of sale sold his
business to Braulio Abad in anticipation of his projected migration to Canada.
The business sold was one that engages in the manufacture and sale of acrylic
paints with trademark McGill’s and Devices. Camaro then used the trademark of
“McGill’s” with the inscriptions “Formula provided by: John Meek &
Associates, Chicago, Illinois” in advertising its paint and allied products.
However, after the declaration of martial law, all firms were required to prove
foreign tie-ups. Abad wrote Cu requesting a copy of the contract and the
registration papers appertaining to the foreign tie-up with Meek &
Associates otherwise he cannot remit to Cu the 1% royalty stipulated in the
contract of sale between them. Abad and Camaro alleged that the contract of
February 11, 1971 which was hastily prepared by Cu failed to express the true
intent and agreement of the parties for failure to incorporate important
representations and warranties.
ISSUES:
I.
WON Parol Evidence is
admissible in the instant case?
II.
What is the degree of
proof necessary to established allegations of fraud?
RULIING:
I. No. Abad and Camaro failed to back up
their allegations of unincorporated stipulations with convincing evidence. A
contract is the law between the parties. It is deemed to contain all the
agreements arrived at by them. Sec.9, Rule 130 of the Rules of Court provides:
Sec.9 Evidence of Written Agreements- When the terms of
an agreement have been reduced to writing, it is considered as containing all
the terms agreed upon and there can be between the parties and successors in
interest, no evidence of such terms other than the contents of the written
agreement.
This provision is based on the
presumption that the parties had made the written instrument the only
repository and memorial of the truth and whatever is not found in said
instrument must have been waived or abandoned by the parties. Thus, while parol
evidence is admissible in a variety of ways to explain the meaning of written
contracts, it cannot serve the purpose of incorporating into the contract
additional contemporaneous conditions which are not mentioned at all in the
writing unless there has been fraud or mistake.
II. Clearly, there was no convincing
evidence that will prove that Cu employed an active and vitiating fraud that
effectively severed the binding terms of the contract of February 11, 1971. Article
1338 of the Civil Code provides that “there is fraud hen, through insidious
words or machinations of one of the contracting parties; the other is induced
to enter into a contract which, without them, he would not have agreed to.”
Allegations of fraud must, however, be established by clear and convincing
evidence. Mere preponderance of evidence is not sufficient. In this case,
private respondents failed to measure up to this requirement.
Case No. 3
G.R. No. 103959, August 21, 1997
Spouses Regalado Santiago and Rosita Palabyab, Josefina
Arcega, petitioners
Vs.
Hon. Court of Appeals; The Hon. Camilo C. Montesa Jr.,
Presiding Judge of the RTC of Malolos, Bulacan, Branch 19, and Quirico Arcega,
respondents
FACTS:
Sometime in 1970, a strong typhoon
destroyed the house of Paula Arcega and decided to construct a new house.
Cognizant of the shortage of funds, deemed it wise to augment her funds by way
of mortgage with the SSS which only defendants could possibly effect they being
members of SSS. Since the system requires the collateral to be in the name of mortgagors,
Paula Arcega executed a simulated deed of conditional sale on December 9, 1970
over a parcel of land consisting of 937 square meters in favor of Josefina
Arcega and spouses Regalado Santiago and Rosita Palabyab for and in
consideration of Php20, 000.00 and the same was notarized by Atty. Luis Cuvin
who emphatically claimed that no money was involved in the transaction as the
parties have other agreement. On April 10, 1985, Paula died single and without
issue, leaving as heirs her two brothers.
ISSUES:
I.
WON the court erred
by allowing the introduction of Parole Evidence?
II.
WON Parole Evidence
Rule may be waived?
RULING:
I. No. The rule on parole evidence under
Section 9, Rule 130 is qualified by the following exceptions:
“However, a party may present evidence
to modify, explain or add to the terms of the written agreement if he puts in
issue in his pleading:
(a) An intrinsic ambiguity, mistake or imperfection in the
written agreement;
(b) The failure of the written agreement to express the true
intent and agreement of the parties thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or
their successors in interest after the execution of the written agreement.
In this case, private respondent Quirico
Arcega was able to put in issue in his complaint before the RTC the validity of
the subject deeds of sale for being simulated transaction. All told, the failure
of the petitioners to take exclusive possession of the property allegedly sold
to them, or in the alternative, to collect rentals from the alleged vendee
Paula Arcega, is contrary to the principle of ownership and a clear bandage of
simulation that renders the whole transaction void and without force and
effect. Article 1409 of the New Civil Code provides that those absolutely simulated
or fictitious contracts are inexistent and void from the very beginning.
II. Yes. Parole evidence rule may be
waived by failure to invoke it, as by failure to object to the introduction of
parol evidence. And, where a party who is entitled to the benefit of the rule
waives the benefit thereof by allowing such evidence to be received without
objection and without any effort to have it stricken from the minutes or
disregarded by the trial court, he cannot, after the trial has closed and the
case has been decided against him, invoke the rule in order to secure a
reversal of judgment on appellate court. In the instant case, the records are
devoid of any indication that petitioners ever objected to the admissibility of
parole evidence introduced by private respondent in open court. The court
cannot disregard evidence which would ordinarily be incompetent under the rules
but has been rendered admissible by failure of party to object thereto.
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