Cruz vs CA (G.R. No. 79962 December 10, 1990)

Cruz vs Court of Appeals
G.R. No. 79962  December 10, 1990

Facts: The plaintiff claimed that of this amount, only P20,000.00 had been paid, leaving a balance of P10,000.00; that in August 1982, he and the defendant agreed that the latter would grant him an exclusive right to purchase the harvest of certain fishponds leased by Cruz in exchange for certain loan accommodations; that pursuant thereto, Salonga delivered to Cruz various loans totaling P15,250.00, evidenced by four receipts and an additional P4,000.00, the receipt of which had been lost; and that Cruz 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. Cruz denied having contracted any loan from Salonga. By way of special defense, he alleged that he was a lessee of several hectares of a fishpond owned by Nemesio Yabut and that sometime in May 1982, he entered into an agreement with Salonga whereby the latter would purchase (pakyaw) fish in certain areas of the fishpond from May 1982 to August 15, 1982. They also agreed that immediately thereafter, Salonga would sublease (bubuwisan) the same fishpond for a period of one year. Cruz admitted having received on May 4, 1982, the amount of P35,000.00 and on several occasions from August 15, 1982, to September 30, 1982, an aggregate amount of P15,250.00. He contended however, that these amounts were received by him not as loans but as consideration for their “pakyaw” agreement and payment for the sublease of the fishpond. He added that it was the private respondent who owed him money since Salonga still had unpaid rentals for the 10-month period that he actually occupied the fishpond. Cruz also claimed that Salonga owed him an additional P4,000.00 arising from another purchase of fish from other areas of his leased fishpond.

Issue: Whether or not Parol evidence rule will apply.

Held: No. 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.

The rule, however, 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. 

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