PAROL EVIDENCE RULE

BPI v. FIDELITY & SURETY CO. appeal ; CFI prayer: reformation of a written instrument of gty upon the grd of mistake o mistake: substitution of the words Laguna Coconut Oil Co for Bank of the Philippine Islands

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Defendants entered the land, which Lechugas claims is hers, by virtue of a public Deed of Absolute Sale executed in her favor by Leoncia Lasangue. The DEFENSE: the land w/c Lechugas bought from Leoncia is different from the land now subj of the action presented the vendor herself as their witness On the basis of the above findings and the testimony of vendor Leoncia, who although illiterate was able to specifically point out the land which she sold to the petitioner, CA upheld the trial court's decision except that the deed of sale was declared as not null and void ab initio insofar as Leoncia Lasangue was concerned because it could pass ownership of the lot in the south known as Lot No. 5522 of the Lambunao Cadastre which Leoncia Lasangue intended to sell and actually sold to her (Lechugas).

FACTS: On April 26, 1920, the Laguna Coconut Oil Co. executed a promissory note for P50,000 in favor of the Philippine Vegetable Oil Company, Inc. On May 3, 1920, the Fidelity and Surety Company of the Philippine Islands made a notation on the note reading as follows: "MANILA, May 3, 1920 "For value received, we hereby obligate ourselves to hold the Laguna Coconut Oil Co. harmless against loss for having discounted the foregoing note at the value stated therein. "FIDELITY AND SURETY CO. OF THE PHILIPPINE ISLANDS "By (Sgd.) J. ELMER DELANEY "Vice-President "CedulaF-3443, Jan. 2, 1920, Manila, P. 1. "Attest: (Sgd.) "A. D. TANNER "Secretary-Treasurer "Cedula F-3447, Jan. 2, 1920, Manila, P. L" On May 4, 1920, the Philippine Vegetable Oil Co. endorsed the note in blank and delivered it to the Bank of the Philippine Islands. It was contended that a mutual mistake was made in the reduction of the note of guaranty by substituting the words "Laguna Coconut Oil Co." for "Bank of the Philip pine Islands." ISSUE: Was there mutual mistake adequate to justify reformation? HELD: That the plaintiff bank has not established a mutual mistake by proof of the clearest and most satisfactory character constituting more than a preponderance of the evidence. REFORMATION OF WRITTEN AGENTS; GENERAL RULE: The courts will reform a written agreement where, owing to mutual mistake, the language used therein does not fully or accurately express the agreement and intent of the parties. WHAT NECESSARY TO PROVE.-To justify the reformation of a written instrument upon the ground of mistake, the concurrence of three things are necessary:

ARGUMENTS to support Appeal: Lechugas- GAD on the part of the CA to admit & give credence to the testimony of the vendor regarding the sale of the disputed lot; the testimony being contrary to the contents of the deed of sale executed by the vendor in favor of Lechugas. ISSUE: Was Leoncias testimony admissible? HELD: YES; PER NOT applicable RATIO: PER does not apply, and may not properly be invoked by either party to the litigation against the other, where

at least one of the parties to the suit is not party or a privy of a party to the written instrument in question and does not base a claim on the instrument or assert a right originating in the instrument or the relation established thereby. Petitioner's reliance on the parol evidence rule is misplaced.

The rule is not applicable where the controversy is between one of the parties to the document and third persons. Present Case: The deed of sale was executed by Leoncia Lasangue in favor of Victoria Lechugas. The dispute over what was actually sold is between petitioner and the private respondents. In the case at bar, through the testimony of Leoncia Lasangue, it was shown that what she really intended to sell and to be the subject of Exhibit A was Lot No. 5522 but not being able to read and write and fully relying on the good faith of her first cousin, the petitioner, she just placed her thumbmark on a piece of paper which petitioner told her was the document evidencing the sale of land. The deed of sale described the disputed lot instead.

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that the mistake should be of a fact; that the mistake should be proved by clear and convincing evidence; and,

that the mistake should be common to both parties to the instrument. AMOUNT OF PROOF.-Relief by way of reformation of a written agreement will not be granted unless the proof of mutual mistake be of the clearest and most satisfactory character.

The amount of evidence necessary to sustain a prayer for relief where it is sought to impugn a fact in a document is always more than a mere preponderance of the evidence. ADMISSIONS.-Admissions or declarations to be competent must have been expressed in definite, certain, and unequivocal language. LECHUGAS v. CA - peti to review CAinvokes PER FACTS:

Lasangue's testimony: Q.And how did you know that was the description of the land that you wanted to sell to Victoria Lechugas? A.I know that because that land came from me. Q.But how were you able to read the description or do you know the description? A.Because, since I do not know how to read and write and after the document was prepared, she made me sign it. So I just signed because I do not know how to read. Q.What explanation did she make to you? A.She said to me, 'Manang, let us have a document prepared for you to sign on the land you sold to me.' So, after the document was prepared, I signed.

Q.Did you tell her where that land you were selling to her was situated? A.On the South. Q.South side of what land, of the land in litigation? A.The land I sold to her is south of the land in litigation. Q.Did you tell her that before preparing the document you signed? A.Yes, I told her so because I had confidence in her because she is my first cousin From the foregoing, there can be no other conclusion but that Lasangue did not intend to sell, as she could not have sold, a piece of land already sold by her father to the predecessor-in-interest of the respondents. The fact that vendor Lasangue did not bring an action for the reformation of Exhibit "A" is of no moment. The undisputed fact is that the respondents have timely questioned the validity of the instrument and have proven that, indeed Deed of Absolute Sale does not reflect the true intention of the vendor.