PHILIPPINE NATIONAL BANK v.

GAYAM PASIMIO
G.R. No. 205590, September 02, 2015

FACTS:

Pasimio filed suit against PNB for the recovery of a sum of money and damages, she alleged having a peso and dollar
time deposit accounts with PNB in the total amount of P4,322,057.57 and US$5,170.80, respectively; that both
investment placements have matured; and when she sought to withdraw her deposit money with accrued interests,
PNB refused to oblige.

PNB admitted the fact of deposit placement but it claimed that Pasimio is without right to insist on their withdrawal,
the deposited amount having already been used in payment of her outstanding loan obligations to the bank. PNB
narrated how the set off of sort came about: Pasimio and her husband took out three "loans against deposit hold-out"
from the PNB Sucat branch, as follows: Three Million One Hundred Thousand Peso 26 of 99 (P3,100,000) loan on
March 21, 2001; a One Million Seven Hundred Thousand Peso (P1,700,000) loan on April 2, 2001; and a Thirty-One
Thousand One Hundred US Dollar (US$31,1 00) loan on December 7, 2001.

During the trial following the joinder of issues, Pasimio denied obtaining any loan from PNB, let alone receiving the
corresponding loan proceeds. While conceding signing certain documents which turned out to be the Peso Loans
Against Peso/FX Deposit Loan Applications, the Promissory Notes and Hold-out on Savings Deposit/ Peso/FX Time
Deposit and Assignment of Deposit Substitute and the Disclosure Statements of Loan/Credit Transaction (Loan
Documents), she professed not understanding what they really meant. She agreed to affix her signature on these loan
documents in blank or in an incomplete state, she added, only because the PNB Sucat branch manager and Customer
Relations Officer led her to believe that what she was signing were related to new high-yielding PNB products.
Pasimio would also deny re-lending the loan proceeds to Paolo Sun.

The RTC ruled in favor of Pasimio. The disposition is predicated on the postulate that Pasimio had proven by
convincing evidence that she did not obtain any loan accommodation from PNB. As a corollary, the trial court held
that there was no evidence showing the release by PNB of the loan proceeds to Pasimio. CA affirmed the RTC
decision.

ISSUE: Whether or not the CA erred in affirming the RTC Decision granting Pasimio's complaint for a sum of money

HELD: YES. In upholding the RTC's finding respecting Pasimio's never having received any loan proceeds, the CA
doubtless disregarded the rule holding that a promissory note is the best evidence of the transaction embodied therein;
also, to prove the existence of the loan, there is no need to submit a separate receipt to prove that the borrower received
the loan proceeds. Indeed, a promissory note represents a solemn acknowledgment of a debt and a formal commitment
to repay it on the date and under the conditions agreed upon by the borrower and the lender. As has been held, a person
who signs such an instrument is bound to honor it as a legitimate obligation duly assumed by him through the signature
he affixes thereto as a token of his good faith. If he reneges on his promise without cause, he forfeits the sympathy
and assistance of this Court and deserves instead its sharp repudiation.

The Court has also declared that a mere denial of the receipt of the loan, which is stated in a clear and unequivocal
manner in a public instrument, is not sufficient to assail its validity. To overthrow the recitals of such instrument,
convincing and more than merely preponderant evidence is necessary. A contrary rule would throw wide open doors
to fraud. Following this doctrine, Pasimio's notarized promissory notes bearing her signature and that of her husband
must be upheld, absent, as here, strong, complete, and conclusive proof of their nullity.

The promissory notes, bearing Pasimio's signature, speak for themselves. To repeat, Pasimio has not questioned the
genuineness and due execution of the notes. By signing the promissory notes, she is deemed to acknowledge receipt
of the corresponding loan proceeds. Withal, she cannot plausibly set up the defense that she did not apply for any loan,
and receive the value of the notes or any consideration therefor in order to escape her liabilities under these promissory
notes.
But the foregoing is not all. PNB presented evidence that strengthened its allegation on the existence of the loan. Here,
each promissory note was supported by a corresponding loan application form and disclosure statement, all of which
carried Pasimio's signatures. Isolated from each other, these documents might not prove the existence of the loan, but
when taken together, collectively, they show that Pasimio took the necessary steps to contract loans from PNB and
was aware of their terms and conditions.

Finally, it is well to consider this rule: that 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.

Under this rule, parol evidence or oral evidence cannot be given to contradict, change or vary a written document,
except if a party presents evidence to modify, explain, or add to the terms of a written agreement and puts in issue in
his pleadings: (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; (c) the validity of the written agreement; and
(d) the existence of other terms agreed to by the parties or their successors-in-interest after the execution of the written
agreement.

Such evidence, however, must be clear and convincing and of such sufficient credibility as to overturn the written
agreement. Since no evidence of such nature is before the Court, the documents embodying the loan agreement of the
parties should be upheld. WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision of
the Court of Appeals dated January 23, 2013 in CA-G.R. CV No. 94079 is REVERSED and SET ASIDE. Respondent
Ligaya M. Pasimio's complaint in Civil Case No. CV-05-0195 before the Regional Trial Court of Paranaque City,
Branch 196 is DISMISSED for lack of merit.