Lucia Paras (Lucia) was a "concessionaire of a sand and gravel permit at Kabulihan,
Toledo City[.]"9 Kimwa is a "construction firm that sells concrete aggregates to
contractors and haulers in Cebu."
Lucia and Kimwa entered into a contract denominated "Agreement for Supply of
Aggregates" (Agreement) where 40,000 cubic meters of aggregates were "allotted" 11 by
Lucia as supplier to Kimwa.12 Kimwa was to pick up the allotted aggregates at Lucia's
permitted area in Toledo City13 at P240.00 per truckload.14
Pursuant to the Agreement, Kimwa hauled 10,000 cubic meters of aggregates.
Sometime after this, however, Kimwa stopped hauling aggregates. 16
Spouses Paras added that within a few days, Kimwa was able to extract and haul
10,000 cubic meters of aggregates. However, after extracting and hauling this quantity,
Kimwa allegedly transferred to the concession area of a certain Mrs. Remedios dela
Torre in violation of their Agreement. They then addressed demand letters to Kimwa.
As these went unheeded, Spouses Paras filed their Complaint. 25
It argued that the controversial quantity of 40,000 cubic meters represented only an
upper limit or the maximum quantity that it could haul.27 It likewise claimed that it
neither made any commitment to haul 40,000 cubic meters of aggregates before May
15, 1995 nor represented that the hauling of this quantity could be completed in two to
three months.28 It denied that the hauling of 10,000 cubic meters of aggregates was
completed in a matter of days and countered that it took weeks to do so. It also
Kimwa asserted that the Agreement articulated the parties' true intent that 40,000
cubic meters was a maximum limit and that May 15, 1995 was never set as a deadline.
Invoking the Parol Evidence Rule, it insisted that Spouses Paras were barred from
introducing evidence which would show that the parties had agreed differently. 30
The Regional Trial Court rendered the Decision in favor of Spouses Paras. The trial court
noted that the Agreement stipulated that the allotted aggregates were set aside
exclusively for Kimwa. It reasoned that it was contrary to human experience for Kimwa
to have entered into an Agreement with Lucia without verifying the latter's authority as
a concessionaire.
The Court of Appeals reversed the Regional Trial Court's Decision. It faulted the trial
court for basing its findings on evidence presented which were supposedly in violation
of the Parol Evidence Rule.
ISSUE: Whether respondent Kimwa Construction and Development Corporation is
liable to pe Spouses Paras for (admittedly) failing to haul 30,000 cubic meters of
aggregates from petitioner titioners Lucia Paras' permitted area by May 15, 1995.
Ruling: Yes. We reverse the Decision of the Court of Appeals and reinstate that of the
Regional Trial Court. Respondent Kimwa is liable for failing to haul the remainder of the
quantity which it was obliged to acquire from petitioner Lucia Paras.
Rule 130, Section 9 of the Revised Rules on Evidence provides for the Parol Evidence
Rule, the rule on admissibility of documentary evidence when the terms of an
agreement have been reduced into writing: chanroblesvirtuallawlibrary
Section 9. Evidence of written agreements. — When the terms of an agreement have
been reduced to writing, it is considered as containing all the terms agreed upon and
there can be, between the parties and their successors in interest, no evidence of such
terms other than the contents of the written agreement.
However, a party may present evidence to modify, explain or add to the terms of
written agreement if he puts in issue in his pleading: chanroblesvirtuallawlibrary
(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
thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or their successors in interest after the
execution of the written agreement.
The term "agreement" includes wills.
Per this rule, reduction to written form, regardless of the formalities
observed,36 "forbids any addition to, or contradiction of, the terms of a written
agreement by testimony or other evidence purporting to show that different terms were
agreed upon by the parties, varying the purport of the written contract." 37
This rule is animated by a perceived wisdom in deferring to the contracting parties'
articulated intent. In choosing to reduce their agreement into writing, they are deemed
to have done so meticulously and carefully, employing specific — frequently, even
technical — language as are appropriate to their context. From an evidentiary
standpoint, this is also because "oral testimony . . . coming' from a party who has an
interest in the outcome of the case, depending exclusively on human memory, is not as
reliable as written or documentary evidence. Spoken words could be notoriously
unreliable unlike a written contract which speaks of a uniform language."
This, however, is merely a general rule. Provided that a party puts in issue in its
pleading any of the four (4) items enumerated in the second paragraph of Rule 130,
Section 9, "a party may present evidence to modify, explain or add to the terms of the
agreement[.]"41 Raising any of these items as an issue in a pleading such that it falls
under the exception is not limited to the party initiating an action. Moreover, as with all
possible objections to the admission of evidence, a party's failure to timely object is
deemed a waiver, and parol evidence may then be entertained.
In sum, two (2) things must be established for parol evidence to be admitted: first, that
the existence of any of the four (4) exceptions has been put in issue in a party's
pleading or has not been objected to by the adverse party; and second, that the parol
evidence sought to be presented serves to form the basis of the conclusion proposed by
the presenting party.cralawlawlibrary
Considering how the Agreement's mistake, imperfection, or supposed failure to express
the parties' true intent was successfully put in issue in petitioners Spouses Paras'
Complaint (and even responded to by respondent Kimwa in its Answer), this case falls
under the exceptions provided by Rule 130, Section 9 of the Revised Rules on Evidence.
Accordingly, the testimonial and documentary parol evidence sought to be introduced
by petitioners Spouses Paras, which attest to these supposed flaws and what they aver
to have been the parties' true intent, may be admitted and considered. cralawlawlibrary
Of course, this admission and availability for consideration is no guarantee of how
exactly the parol evidence adduced shall be appreciated by a court. That is, they do not
guarantee the probative value, if any, that shall be attached to them. In any case, we
find that petitioners have established that respondent Kimwa was obliged to haul
40,000 cubic meters of aggregates on or before May 15, 1995. Considering its
admission that it did not haul 30,000 cubic meters of aggregates, respondent Kimwa is
liable to petitioners.
