Evidence Case Digest | DLSU College of Law AY 14-15

CRUZ VS COURT OF APPEALS

G.R. No. 79962 : December 10, 1990
PAROLE EVIDENCE RULE

 The private respondent Conrado Salonga filed a complaint for collection and damages against petitioner Lucio Cruz since he
failed to comply with his part of the agreement by refusing to deliver the alleged harvest of the fishpond and the amount of
his indebtedness.
 During the trial they agreed upon a stipulation of facts:
-plaintiff Conrado Salonga entered into a contract of what is commonly called as 'pakyawan' with defendant Lucio Cruz on
the fishes contained in a fishpond which defendant Lucio Cruz was taking care of as lessee with a verbal contract for the
sum of P28,000.00 sometime in May 1982
-Cruz requested plaintiff Conrado Salonga to advance the money of not only P28,000.00 but P35,000 to meet his
obligations to the owner of the fishpond (Exh. D)
-35k was delivered by plaintiff Conrado Salonga duly received by the defendant Lucio Cruz, as evidenced by a receipt dated
May 4, 1982, duly signed by defendant Lucio Cruz (Exh. D)
-thereafter the aforesaid harvest thereon, they entered again on a verbal agreement whereby plaintiff Conrado Salonga
and defendant Lucio Cruz had agreed that defendant Lucio Cruz will sublease and had in fact subleased the fishpond of
Nemesio Yabut to the herein plaintiff for the amount of P28,000.00 for a period of one year beginning August 15, 1982.
 At the trial, the private respondent claimed that aside from the amounts mentioned in the stipulation of facts, he also
delivered to the petitioner P28,000.00, which constituted the consideration for their "pakyaw" agreement. This was
evidenced by a receipt dated May 14, 1982 marked as Exhibit I
 The petitioner denied having received another amount of P28,000 from Salonga on May 14, 1982. He contended that the
instrument dated May 14, 1982 (Exh. I) was executed to evidence their "pakyaw" agreement and to fix its duration. (That
Exh I was merely an explanation of the transaction evidenced by Exh D)
 RTC DCN: trial court ruled in favor of the petitioner and ordered the private respondent to pay the former.
 CA DCN: Reversed RTC decision. Court then ordered petitioner to pay private respondent. Exhibit "I" is very clear that it is an
entirely separate transaction from Exhibit "D. What only gives the semblance that Exhibit "I" is an explanation of the
transaction behind Exhibit "D" are the oral testimonies given by the defendant and his two witnesses. On the other hand,
Exhibit "I" is very clear in its language. And if it is really the intention of Exhibit "I" to explain the contents of Exhibit "D",
such manifestation or intention is not found in the four corners of the former document.
 Petitioner’s Issue: The public respondent Court of Appeals gravely erred in (1) disregarding parol evidence to Exhibits "D"
and "I" despite the fact that these documents fall under the exceptions provided for in Sec. 7, Rule 130 of the Rules of Court
and thereby in (2) making a sweeping conclusion that the transaction effected between the private respondent and
petitioner is one of contract of loan and not a contract of lease.

ISSUE: w/n the these documents fall under the exceptions provided for in Sec. 7, Rule 130 of the Rules of Court?
HELD: NO. The rule is not applicable in the case at bar, Section 7, Rule 130 is predicated on the existence of a document embodying
the terms of an agreement, but Exhibit D does not contain such an agreement. It is only a receipt attesting to the fact that on May 4,
1982, the petitioner received from the private respondent the amount of P35,000. It is not and could have not been intended by the
parties to be the sole memorial of their agreement. As a matter of fact, Exhibit D does not even mention the transaction that gave
rise to its issuance. At most, Exhibit D can only be considered a casual memorandum of a transaction between the parties and an
acknowledgment of the receipt of money executed by the petitioner for the private respondent's satisfaction. A writing of this
nature, as Wigmore observed is not covered by the parol evidence rule.
The "pakyaw" was mentioned only in Exhibit I, which also declared the petitioner's receipt of the amount of P28,000.00 as
consideration for the agreement. The petitioner and his witnesses testified to show when and under what circumstances the amount
of P28,000.00 was received. Their testimonies do not in any way vary or contradict the terms of Exhibit I. While Exhibit I is dated May
14, 1982, it does not make any categorical declaration that the amount of P28,000.00 stated therein was received by the petitioner
on that same date. That date may not therefore be considered conclusive as to when the amount of P28,000.00 was actually
received.
A deed is not conclusive evidence of everything it may contain. For instance, it is not the only evidence of the date of its
execution, nor its omission of a consideration conclusive evidence that none passed, nor is its acknowledgment of a particular
 Evidence Case Digest | DLSU College of Law AY 14-15

consideration an objection to other proof of other and consistent considerations; and, by analogy, the acknowledgment in a deed is
not conclusive of the fact.

RATIO:
Rule 130, Sec. 7, of the Revised Rules of Court provides:
Sec. 7. Evidence of Written Agreements. — When the terms of an agreement have been reduced to writing, it is to be considered as
containing all such terms, and therefore, there can be, between the parties and their successors in interest, no evidence of the terms
of the agreement other than the contents of the writing, except in the following cases:
a) When a mistake or imperfection of the writing or its failure to express the true intent and agreement of the parties, or the validity
of the agreement is put in issue by the pleadings;
b) When there is an intrinsic ambiguity in the writing. The term "agreement" includes wills.
The reason for the rule is the presumption that when the parties have reduced their agreement to writing they have made such
writing the only repository and memorial of the truth, and whatever is not found in the writing must be understood to have been
waived or abandoned.

A receipt — i.e. a written acknowledgment, handed by one party to the other, of the manual custody of money or other personality
— will in general fall without the line of the rule; i.e. it is not intended to be an exclusive memorial, and the facts may be shown
irrespective of the terms of the receipt. This is because usually a receipt is merely a written admission of a transaction independently
existing, and, like other admissions, is not conclusive
A distinction should be made between a statement of fact expressed in the instrument and the terms of the contractual act. The
former may be varied by parol evidence but not the latter. 5 Section 7 of Rule 130 clearly refers to the terms of an agreement and
provides that "there can be, between the parties and their successors in interest, no evidence of the terms of the agreement other
than the contents of the writing."

The statement in Exhibit I of the petitioner's receipt of the P28,000.00 is just a statement of fact. It is a mere acknowledgment of the
distinct act of payment made by the private respondent. Its reference to the amount of P28,000.00 as consideration of the "pakyaw"
contract does not make it part of the terms of their agreement. Parol evidence may therefore be introduced to explain Exhibit I,
particularly with respect to the petitioner's receipt of the amount of P28,000.00 and of the date when the said amount was received.

Even if it were assumed that Exhibits D and I are covered by the parol evidence rule, its application by the Court of Appeals was
improper. The record shows that no objection was made by the private respondent when the petitioner introduced evidence to
explain the circumstances behind the execution and issuance of the said instruments. The rule is that objections to evidence must be
made as soon as the grounds therefor become reasonably apparent. He is deemed to have waived his benefit of the parole evidence
rule.

it has been repeatedly laid down as a rule of evidence that a protest or objection against the admission of any evidence must be
made at the proper time, and that if not so made it will be understood to have been waived. The proper time to make a protest or
objection is when, from the question addressed to the witness, or from the answer thereto, or from the presentation of proof, the
inadmissibility of evidence is, or may be inferred.

DECISION: CA DCN REVERSED

it was error for the Court of Appeals to disregard the parol evidence introduced by the petitioner and to conclude that the
amount ofP35,000.00 received on May 4, 1982 by the petitioner was in the nature of a loan accommodation. The Court of Appeals
should have considered the partial stipulation of facts and the testimonies of the witnesses which sought to explain the
circumstances surrounding the execution of Exhibits D and I and their relation to one another.
We are satisfied that the amount of P35,000.00 was received by the petitioner as full payment of their "pakyaw" agreement
forP28,000.00 and the remaining P7,000.00 as advance rentals for their sublease agreement.
 Evidence Case Digest | DLSU College of Law AY 14-15

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-46943 June 8, 1978

PHILIPPINE NATIONAL RAILWAYS, petitioner,

vs.
COURT OF FIRST INSTANCE OF ALBAY, Branch I, presided by JUDGE ROMULO P. UNTALAN, CARMEN
MYRICK SALVACION MYRICK, CELSO MILLABAS, JOSEFINA MILLABAS, and CELERINA
MILLABAS, respondents.

Jose B. Calimlim, Marcelino B. Bermudez & Natividad G. Gepiga for petitioner.

Madrid Law Office for private respondents.

AQUINO, J.:

This certiorari and prohibition case is about the parol evidence rule.

On September 28, 1971, Carmen Myrick, Salvacion Myrick, and Celso, Josefina and Celerina, all surnamed Millabas,
filed in the Court of First Instance of Albay a complaint to annul a supposed conditional donation of two parcels of land
located at Comum Camalig, Albay, with areas of "47-52" and "1-25-00" square meters, a donation which they had
allegedly made in !963 to the Philippine National Railways (PNR).

The ground for the annulment was the alleged non-fulfillment of the five conditions of the donation (Civil Case No.
4507). No deed of donation or actionable document was annexed to the complaint. (See. sec. 7, Rule 8, Rules of
Court.)

The PNR in its answer denied the donation for lack of sufficient knowledge thereof but it contradicted 'that denial by
stating in its affirmative defenses that the donation was unconditionally made by the late Antonio J. A. Myrick and that
the plaijtiffs are guilty of laches. No deed of donation was attached to the answer to sustain the defense that the
donation was pure and unconditional. (In the complaint it was alleged that Antonio was deceased brother of plaintiffs
Carmen Myrick and Salvacion Myrick but it was not alleged that he was the donor or that the plaintiffs are his legal
heirs.)

At the hearing of the case on March 6 (11), 1974, while plaintiff Salvacion Myrick was testifying, she was asked to
identify a deed of donation dated August 23, 1962 made by her brother, Antonio, which is reproduced below (Exh. B or
1):

DEED OF DONATION

KNOW ALL MEN BY THESE PRESENTS

This DEED OF DONATION made and executed by ANTONIO J. A. MYRICK, of legal age,
single/married to , with residence at , hereinafter called the DONOR, in favor of the Manila Railroad
 Evidence Case Digest | DLSU College of Law AY 14-15

Company, a government-owned corporation, duly organized and existed under and by virtue of the
laws of the Philippines, with principal office at tutuban Terminal, Azcarraga, Manila, herein represented
by P. T. CASES, its general Manager, hereinafter called the DONEE.

WITNESSETH

That the DONOR is theowner in fee simple of that certain real property with the buildings and/or
improvements thereon, situated in the barrio of Taladong, Camalig, Albay, and more particularly
described in Original/Transfer Certificate of title no. Lot 3118 of the Land Registry of ALBAY
PROVINCE, as follows, to wit:

A portion or 1/4 o fparcel of land situated in the barrio of Taladong, Camalig, Albay, Philippines
containing an area of THIRTEEN THOUSAND SIX HUNDRED THREE (13, 603) square meters more
or less bounded on the N, by Meliton Naz; on the E, by Pedro Moron; on the S, by Louis Myrik; and on
the W, by Pedro Moros; declared under tax No. 19739 in the name of Cenon Zamora and assessed for
ONE THOUSAND TWO HUNDRED THIRTY PESOS (P1,230.00). Said property was acquired by the
donor by way of inheritance from his late father Louis Myrik who likewise acquired the property by way
of Abslute Sale from Felix Nimo.

That for and in consideration of his generosity and benevolence, as well as his love for public service,
the DONOR by this presents, transfers and conveys by way of DONATION, unto the said DONEE, its
successors and assigns, a portion of the above-described real property free from all liens and
encumbrances, tentatively described, as follows:

A portion of SIX THOUSAND ONE HUNDRED EIGHTY-EIGHT (6,188) square meters more or less
traversed and encroached by the MRRCo. Sorsogon RR Ext. Project's right-of-way at Km. 464 ÷ 780 -
÷ 888.86 in the above described property bounded on the N, by Antonio Myrik; on the E, by Dominador
Muyo; on the S, by Antonio J. A. Myrik and on the W, by Lot Nos. 3120-A & 3119-A; subject to the
technical description that may hereinafter be made by the Survey TEam of the MMRCo, and the plan
thereof approved by the Director of lands; said donated portion will be used for railway tracks or railroad
purposes.

That the DONOR does hereby state, for the purpose of giving full effect to this donation that he/she has
reserved for himself/herself in full ownership sufficient property to support him/her in a manner
appropriate to his/her needs.

That the DONEE does hereby accept this donation of the above-described real property, and does
hereby express their gratitutde for the kindness and liberality of the DONOR, and the acceptance
thereof is to be executed in a separate instrument in the City of Manila, Philippines.

IN WITNESS WHEREOF, THE DONOR have hereunto set his/her hand this 23rd day of August, 1962,
at Municipality of Camalig, Albay, Philippines.

(Sgd.) ANTONIO J.A.

MYRIK

DONO
R

WITNESSES
 Evidence Case Digest | DLSU College of Law AY 14-15

1. (Sgd.) SALVACION E. A. MYRIK

2. (Sgd.) LIBORIO MARMOL

(NOTARIAL ACKNOWLEDGMENT IS OMITTED)

DEED OF ACCEPTANCE OF THE AFORECITED

DONATION:

The undersigned duly appointed General Manager of the MRRCo. hereby these presents accept and
receive the abovementioned donation.

MANILA RAILROAD COMPANY

By

(Sgd.) P. T. CASES

General Manager

WITNESSES

1. (Sgd.)ILLEGIBLE 2. (Sgd.) ILLEGIBLE

(NOTARIAL ACKNOWLEDGMENT IS OMITTED)

It may be noted that the alleged donation was made in 1962 to the Manila Railroad Company that it was made by
Antonio J. A. Myrick (Myrick) and not by the plaintiffs, now the private respondents; that the land donated is located at
Barrio Taladong (not Comun) Camalig and that the area of the land donated is 6,188 square meters.

After Salvacion Myrick had Identified the deed of donation quoted above, her counsel propounded the following
questions:

Q. You said that you know of the execution of this Deed of Donation which is marked
Exhibit 1 for the defendant and also marked as Exhibit B for the plaintiffs during the pre-
trial, and which I am also adopting now that the same be marked Exhibit B for the trial
on the merits,

Having known of the execution of this Deed of Donation. will not tell this Honorable
Court why as a brother (sic) and co-heir of your late brother Antonio, why you did not
sign in this Deed of Donation?

A. (of Salvacion Myrick) Because the Philippine National Railways should first comply
with the promise in the donation.

Q. Will you tell this Court the promise of the PNR with respect to the execution of this
Deed of Donation, Exhibit B
 Evidence Case Digest | DLSU College of Law AY 14-15

A. ATTY. ABELLERA (counsel of the PNR): I firmly object to the question. Counsel is
trying to elicit oral evidence which is violative of the parol evidence rule. The Deed of
Donation is very clear. It has no condition whatsoever. If the condition now is place on
the record that will alter the condition of the donation.

In view of that objection, the hearing was suspended. The trial court ordered the parties to submit memoranda on the
issue of Whether or not that question should be allowed under the parol evidence rule. That issue remained pending
until the lower court, through respondent Judge, resolved it ill the third of July 7, 1977, now being assailed herein.

The lower court held that the question should be allowed the objection should be overruled because to allow the
witness answer the question would not be a transgression of tilt parol evidence rule.

We hold that, under the pleadings and considering the defense of lack of cause of action interposed by the PNR, that
lower court committed a grave abuse of discretion in not sustaining petitioner's objection based on the parol evidence
rule. That rule is found in Rule 130 of the Rules of Court which provides:

SEC. 7. Evidence of written agreements. — When the terms of an agreement have been reduced to
writing, it is to be considered as containing all such terms and. therefore, there can be, between the
parties and their successors in interest, no evidence of the terms The agreement other than the
contents of the writing, except in the following case:

(a) Where a mistake or imperfection of the writing, or it failure to express The true intent and agreement
of the parties, or the of the agreement is put in issue by the pleadings;

(b) When there is an intrinsic ambiguity in the writing,

The term 'agreement' includes wills.

Section 7 requires that in order that parol or extrinsic evidence may be admitted to vary the terms of the writing, the
mistake or imperfection thereof or its failure to express the true intent and agreement of the parties should be put in
issue by the pleadings. In the instant case, the plaintiffs did not expressly plead that the deed of donation was
incomplete or that its execution was vitiated by mistake or that it did not reflect the intention of the donor and the
donee.

The plaintiffs in paragraph four of their complaint merely alleged that the donation was subject to five conditions. Then,
they prayed that the donation should be annulled or rescinded for noncompliance with those conditions.

At the trial they tried to prove those conditions by parol evidence. Obviously, they could not introduce parol evidence to
vary the terms of the agreement because they did not plead any of the exceptions mentioned in the parol evidence
rule. Their case is covered by the general rule that the contents of the writing constitute the sole repository of the terms
of the agreement between the parties.

Thus, it was held that where there is no allegation in the complaint that there was any mistake or imperfection in the
written agreement or that it failed to express the true intent of the parties, parol evidence is inadmissible to vary the
terms of the agreement (Villanueva vs. Yulo, 106 Phil. 1170).

On the other hand, if the defendant set up the affirmative defense that the contract mentioned in the complaint does not
express the true agreement of the parties, then parol evidence is admissible to prove the true agreement of the parties
(Enriquez vs. Ramos, 11 6 Phil. 525, 531; Philippine Sugar E. D. Co. vs. Philippines, 62 L. Ed. 1177, 247 U. S. 385;
Heirs of De la Rama vs. Talisay-Silay Milling Co., 54 Phil. 580, 588; Land Settlement and Dev. Corp. vs. Garcia
Plantation Co., Inc., 117 Phil. 761, 765).
 Evidence Case Digest | DLSU College of Law AY 14-15

The plaintiffs or their predecessor, the donor, Antonio J. A. Myrick, could have asked for the reformation of the deed of
donation. Instead of doing so, they asked for its annulment or rescission on the theory that there was non-compliance
with the supra resolutory conditions of the donation (See art. 764, Civil Code: Parks vs. Province of Tarlac, 49 Phil.
142).

But whether the action is for revocation or reformation, it was necessary for the plaintiffs, in order to prove that the
donation was conditional, to plead that the deed of donation did not express the true intent of the parties. Not having
done so, their parol evidence on the alleged conditions is dismissible upon seasonable objection interposed during the
trial by the donee's counsel. (Yu Tek & Co. vs. Gonzalez, 29 Phil. 384; Soriano vs. Cia. General de Tabacos de
Filipinas, L-17392, December 17, 1966. 18 SCRA 999, 1015.)

Other considerations may be adduced to fortify the holding that the plaintiffs cannot prove the conditional character of
the donation.

It should be observed that the action for annulment was brought by the alleged collateral relatives of the deceased
donor. Their capacity to bring the action has not been specifically pleaded (See sec. 4, Rule 8, Rules of Court:
Concepcion vs. Sta. Ana, 87 Phil. 787).

The anomalous or odd situation in this case is that the plaintiffs belatedly filed an action to annul (not reform) a
donation made by their collateral relative. Evidently, they had no copy of the deed of donation because they did not
attach a copy thereof to their complaint. They were not cognizant of the terms thereof. They did not know the exact
date of the donation and the description, location and area of the lands donated- They pretended that five conditions
were engrafted on the deed of donation which to the does not take any condition at all. How they came to know of
those conditions, when they were not the donors, was not pleaded in their complaint.

The private respondents contend that the rulings ot a trial judge on the admission of evidence are reviewable on appeal
and cannot be assailed by means of certiorari (Philippine Air Lines, Inc vs. Teodoro, 9 7 Phi1. 461);

That is the general rule, Where, as in this case, petitioner's contention is clearly tenable and the lower court, in
overruling the objection to the evidence, committed a patent mistake amounting to a grave abuse of discretion, the
error may be corrected by means of certiorari (De Laureano vs. Adil, L-43345, July 29, 1976, 72 SCRA 148, 161).

As to private respondents' contention in their memorandum in the lower court that Antonio J.A. Myrick was not the
absolute owner of the donated properties See page 41 of Rollo). that ultimate fact should likewise have been alleged in
their complaint,

WHEREFORE, the trial court's order of July 7, 1977 is reversed and set aside. Costs against the private respondents.

SO ORDERED.

Fernando (Chairman), Barredo, Antonio and Santos, JJ., concur.

Concepcion, J., took no part.