Evidence, 29 January 2015

01:10:00 01:45:00
What is the purpose of the parol evidence rule?
1. It is to give certainty to written agreements, preserve its reliability, accuracy and
protect its integrity.
2. It is to avoid the pitfalls of human memory. Such rule is borne out of the
realization that human memory is treacherous and inherently unreliable, as
compared to written agreements which is more reliable as they speak of a more
uniform language. Records, documents oftentimes do not lie.
The obvious premise of this rule is the preference of written agreements over other forms
of evidence. This rule requires that if there is a dispute as to written agreements, the
written agreement itself must be presented and said dispute as to the terms of the
agreement must be proved by the contents of such agreement. It cannot be proved by
other evidences outside of its contents.
This rule presupposes the existence of a written agreement. If the agreement is not
written, then parol evidence does not apply. It contemplates of a situation wherein you
have a written agreement and there is evidence other than the written agreement, maybe
oral or otherwise, which would tend to vary, alter and modify or contradict the terms of
the written agreement. As between these two, the written agreement itself is presumed to
be more reliable and accurate.
So if the contract was oral in the first place, and the dispute involves the terms of the
written contract, no parol evidence comes into play. Written agreement is the foundation
of the parol evidence rule.
INSTANCES WHEN PAROL EVIDENCE DOES NOT APPLY:
1. When the document does not constitute a contract or an agreement.
Unlike best evidence rule, parol evidence rule only applies to documents
which contains contracts or contractual agreements. So if the document
contains no contractual agreement, parol evidence does not come into
play. In best evidence rule, all documents, whether contractual or not, are
covered. This is not the case for parol evidence. This was the ruling in the
case of Cruz vs. Court of Appeals,
This involves a transaction between Salonga and Cruz, wherein the latter,
in the course of the transaction, received Php 35,000 from the former. The
amount was duly acknowledged by Cruz in the form of an
acknowledgment receipt and signed by him. Alleging that the amount of
Php 35,000 was received by Cruz as a loan from him and also alleging that
Cruz failed to pay the loan despite demand, Salonga filed a complaint for
collection for sums of money. In Cruzs defense, he admitted that he did
receive the amount but not a loan, rather it was Salongas payment to him
of the total amount that arised from two transactions. The first Php 27,000

was Salongas payment under the pakyaw arrangement that they entered
into, namely the sublease agreement wherein Cruz was the lessor of a
fishpond and the sale of fish products to Salonga from Cruz. The Php
5,000 was the advance rentals for the sublease agreement.
Salonga objected to the admission of the testimony of Cruz trying to prove
that the amount of the Php 35,000 was not a loan under the parol evidence
rule because the acknowledgment receipt does not contain any stipulation
as to the specific transactions in connection with the receipt of the Php
35,000.
Supreme Court said that the parol evidence does not apply in this case
because the acknowledgment receipt is not a contract. Parol evidence rule
operates only if the dispute involves the terms of a written contract or the
document. It must therefore contain the elements of a contract, like the
parties, consideration, subject matter and the terms and conditions. A
receipt cannot by any stretch of the imagination be considered a contract
as it does not contain the elements of a contract. It is merely a statement of
fact aknowledging that the amount of Php 35,000 was received by the
recipient from the giver.
TAKE NOTE: Not all documents are covered, only written contractual
agreements.
2. When one party in the suit is not a party or is a stranger to the written agreement,
neither party can invoke parol evidence rule.
Parol evidence rule involves a dispute between the parties because
obviously since parol evidence rule presupposes a contractual agreement,
it therefore applies only to the parties of the contractual agreement. A
stranger is not bound by a contract to which he is not a party. Hence, if a
stranger becomes a party to the case involving a contract wherein he is not
a party thereto, parol evidence rule does not apply. This was the ruling in
the case of Lechugas vs. Court of Appeals,
Victoria Lechugas bought a land from a certain Leoncia Lasangue. After
such purchase, the deed of sale executed by Leoncia in Lechugas favor
specified a certain lot (lot no. 55-22) stated in the contract. When the
Lozas occupied lot 55-22, Lechugas filed an ejectment suit against them
but it was dismissed so she appealed. While the appeal in the ejectment
suit was still pending, Lechugas filed another case in the RTC for recovery
of possession against the same defendants, involving the same lot. During
the trial, Lozas presented Leoncia as their star witness who testified that
the lot she actually sold to Lechugas was not lot 55-22 but lot 54-56. In
effect, Leoncia was saying that the lot reflected in the deed of sale which
she signed in favor of Lechugas erroneously stated a different lot. This
testimony of Leoncia contradicted, varied, altered and modified the term

of the deed of sale. The latter unmistakably reflecting a specific lot

number. The testimony was objected to under the parol evidence rule
because at first blush, the testimony is ordinarily barred.
Supreme Court said parol evidence rule does not apply in this case
because defendants (Lozas) in the case were not parties to the written deed
of sale between Leoncia and Lechugas. When at least one of the parties of
the case is not a party to the written agreement sued upon, the deed of sale
in this case, parol evidence rule may not be invoked because the third
parties, not parties to the agreement but parties to the case, are not bound
by the terms of the written agreement. So they can always introduce
extraneous evidence to vary, alter, modify or contradict the terms of the
written agreement without violating the parol evidence rule since the latter
is inapplicable to them.
But when do you consider one to be a party of a written agreement?
a. parties to the written agreement;
b. their successors-in-interest;
c. persons who may not be the parties but based their claims under the
written agreement or assert a right originating from the same.
Sirs Q: What about a beneficiary who is not a party to the contract but
stands to be benefited out of the terms of the contract, specifically a
stipulation pour autrui? Strictly, he is not a party to the contract but since
he stands to benefit from such agreement, he is deemed, under the law,
covered by the contract. He can even enforce the contract even though he
was not one of those who signed such contract. This was the ruling in the
case of Heirs of Pacris vs. Heirs of Egonia,
There is a landowner who died, leaving 6 children behind. Upon the death,
the property was inherited by the children. But after such time, 4 of the
heirs sold their share in the inherited property to a third party. The other 2
did not sell their shares. One of which was Mario. Years passed, the parties
died and are now survived by their respective heirs. Subsequently, the
heirs of Mario demanded that the heirs of the buyer Egonia comply with
their obligations. It was alleged that at the time of the sale made by the
disposing heirs, the buyer undertook to comply with certain conditions
under their contract for the sale of the shares of the disposing heirs. These
conditions include that the buyer pay all the real estate taxes, including the
arrears; cause the survey of the entire lot; subdivide the lot; and deliver the
individual titles to the respective owners, including Mario, the latter still
the owner since he did not sell his share. For non-compliance with the
conditions, the heirs of Mario filed the complaint for specific performance.
So during trial, the heirs of Mario tried to prove the existence of these
conditions allegedly agreed upon by the buyer and the disposing heirs. All
these conditions were all orally agreed upon and not incorporated in the
deed of sale.

The introduction of the testimonies purporting to prove these conditions

imposed on the buyer was objected to under the parol evidence rule
because this would vary the terms of the deed of sale since the latter does
not contain such conditions orally agreed upon. By way of counterargument, the heirs of Mario argued that the parol evidence rule does not
apply since their predecessor-in-interest Mario was not a party to the deed
of sale entered into the 4 selling heirs in favor of the buyer. Since they are
not bound by the deed of sale, they are likewise not bound by the parol
evidence rule and it cannot be invoked against them.
Such argument was brushed aside by the Supreme Court, it stated that
obviously the heirs of Mario are trying to enforce the alleged oral contract
between the selling heirs and the buyer because obviously the heirs of
Mario wants to have their title now corresponding to their own share. This
makes Mario a beneficiary of the so-called stipulation pour autrui. Being a
beneficiary, Mario is deemed to be a party to the contract and being such,
Mario and his successors-in-interest are bound by the conttract and
therefore bound by the parol evidence rule. Not only that, the right that the
heirs of Mario are trying to assert is obviously based on the alleged
contract, therefore, Mario or his heirs cannot prevent the operation of
parol evidence rule against them and claim that they are mere strangers.
Legally, they are parties on the contract and based their claim on the same.
A stranger is not bound but in the disturbing case of Gaje vs. Dalisay,
Spouses Dalisay bought 2 pieces of land from a third party. Instead of
having his name, Dalisay Sr., reflected as the buyer, the deed of sale
reflected the name of Dalisay Jr., his son, as the buyer. For a long time, the
father stayed in the land and utilized it as banana plantation and leased it
to others until Dalisay Sr. died. The wife, Patricia, took over the
administration of said lands but seeing that the deed of sale reflected his
name, Dalisay Jr. it to a third party. This was complained to by the widow
which led to the dispute in court. During trial, Patricia tried to prove the
fact that the real buyer of the properties was Dalisay Sr. The admission of
such testimony tending to prove the person of the real buyer was
questioned by Dalisay Jr. and the buyers under the parol evidence rule
since the deed of sale reflected the name of Dalisay Jr. as the buyer and
any testimony tending to prove that the buyer was Dalisay Sr. obviously
contradicts, varies, alters and modifies the term of the written agreement.
Supreme Court rejected the contention of the Dalisay Jr. and the buyers
holding among other things that the parol evidence rule applies only to
parties of a written agreement. The widow Patricia was not a party to the
written agreement, she was a stranger to the contract. Therefore she is not
bound by the parol evidence rule.

The problem with this ruling is that Patricia is Dalisay Srs successor-ininterest and parol evidence rule equally applies to the successors-ininterest but instead the Supreme Court considered Patricia as a complete
stranger to the contract.
3. If the collateral agreement does not vary, alter, modify or contradict the written
contract, it can be presented. Not contrary to parol evidence.
Parol evidence rule does not allow the presentation of testimony which
tends to establish prior or contamporaneous collateral agreements which
would vary, alter, modify or contradict the terms of a written contract.
Therefore if the collateral agreement, even if made prior and
contemporaneous, does not contradict the terms of the written contract
since such collateral agreement is independent from the same, parol
evidence rule does not apply. Therefore, the parties can always prove that
prior or contemporaneous collateral agreement without violating the rule.
This is otherwise known as the collateral agreement rule. You have
collateral fact rule under best evidence rule, you also have collateral
agreement rule under parol evidence. This ruling was enunciated in the
case of Robles vs. Hermanos,
Robles Sr. and his wife used to own farm lands, including Hacienda
Nahalinan. When Robles Sr. died and the administration of the estate of
Robles Sr. was taken over by the widow. During such administration,
widow allowed Robles Jr. to lease Hacienda Nahalinan. It was agreed
upon that Robles Jr. would be allowed to introduce improvements on such
lands since it was in a state of disrepair.The lease contract was for the
period of six years. Four years into the contract, the widow died and all the
properties were inherited by the 6 children, including Robles Jr.
Subsequently, the 3 of the 6 children sold their shares to the other 3 and so
the entire estate left by the parents were now owned by 3 of the 6 children.
Robles Jr. was among the 3.
When the leased contract had the remaining life of 2 years, Hermanos
approached the 3 Robles siblings and offered to buy Hacienda Nahalinan
and the properties left by their parents. According to Robles Jr., to
convince him to sell the property, considering that he still had vested
interest in the Hacienda by virtue of the unexpired portion of the lease
contract, Hermanos agreed to pay for the value of the improvements
introduced by Robles Jr. so that the latter would give up the remaining
portion of the lease. The problem, however, is that this oral agreement was
not written in the deed of sale which merely talks about the sale of the
property left by the parents. When Hermanos failed to comply with his
undertaking to compensate Robles Jr. of the value of the improvements the
latter introduced, he filed a petition for recovery of the promised
compensation. Hermanos denied having entered into the agreement and
because such alleged agreement was not incorporated in the deed,

Hermanos objected to the testimony tending to prove the said oral

agreement by virtue of the parol evidence rule since such testimony would
contradict or alter the terms of the written agreement which did not
contain anything regarding the payment of the value of the improvements.
Supreme Court saw it the other way. It said that the scenario contemplated
by parol evidence rule is a situation where a party tries to introduce
extraneous evidence to prove the existence of a prior and
contemporaneous collateral agreement which would vary, alter, modify or
contradict the terms of the written contract. Conversely, if that prior or
contamporaneous collateral agreement would not in any way vary or alter
the terms of the written agreement, this rule does not apply. This is
possible when the prior or contamporaneous collateral agreement is
independent from the written agreement, although it may involve the same
subject as that of the written contract. The oral agreement which was said
to be collateral to the execution of the deed of sale was an independent
agreement, it had nothing to do at all with the latter. The deed of sale only
including the inherited properties left behind by the parents as its subject.
It did not concern itself with the improvements introduced and owned by
Robles Jr. not by virtue of the inheritance but by his own right. So it is
actually a different contract, although it may be related to the main written
agreement.