SECOND DIVISION
G. R. No. 171601, April 08, 2015
SPOUSES BONIFACIO AND LUCIA PARAS, Petitioners, v. KIMWA CONSTRUCTION AND DEVELOPMENT CORPORATION, Respondent.
D E C I S I O N
LEONEN, J.:
This resolves the Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure praying that the assailed Decision2 dated July 4, 2005 and Resolution3 dated February 9, 2006 of the Court of Appeals Special 20th Division in CA-G.R. CV No. 74682 be reversed and set aside, and that the Decision4 of Branch 55 of the Regional Trial Court, Mandaue City dated May 16, 2001 in Civil Case No. MAN-2412 be reinstated.5
The trial court's May 16, 2001 Decision ruled in favor of petitioners Spouses Bonifacio and Lucia Paras (plaintiffs before the Regional Trial Court) in their action for breach of contract with damages against respondent Kimwa Construction and Development Corporation (Kimwa).6
The assailed Decision of the Court of Appeals reversed and set aside the trial court's May 16, 2001 Decision and dismissed Spouses Paras' Complaint.7 The Court of Appeals' assailed Resolution denied Spouses Paras' Motion for Reconsideration.8
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."10
On December 6, 1994, 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
The entirety of this Agreement reads:chanroblesvirtuallawlibrary
Pursuant to the Agreement, Kimwa hauled 10,000 cubic meters of aggregates. Sometime after this, however, Kimwa stopped hauling aggregates.16AGREEMENT FOR SUPPLY OF AGGREGATES
KNOW ALL MEN BY THESE PRESENTS:
This Agreement made and entered into by and between:
LUCIA PARAS, of legal age, Filipino, married and resident of Poblacion, Toledo City, Province of Cebu, hereinafter referred to as the SUPPLIER:-and-
KIMWA CONSTRUCTION AND DEVELOPMENT CORP., a corporation duly organized and existing under the laws of the Philippines with office address at Subangdaku, Mandaue City, hereinafter represented by its President MRS. CORAZON Y. LUA, of legal age, Filipino and a resident of Subangdaku, Mandaue City[,] hereinafter referred to as the CONTRACTOR;WITNESSETH:
That the SUPPLIER is [sic] Special Permittee of (Rechanelling Block # VI of Sapang Daco River along Barangay Ilihan) located at Toledo City under the terms and conditions:chanroblesvirtuallawlibraryIN WITNESS WHEREOF, we have hereunto affixed our signatures this 6th day of December, 1994 at Mandaue City, Cebu, Philippines.
- That the aggregates is [sic] to be picked-up by the CONTRACTOR at the SUPPLIER [sic] permitted area at the rate of TWO HUNDRED FORTY (P240.00) PESOS per truck load;
- That the volume allotted by the SUPPLIER to the CONTRACTOR is limited to 40,000 cu.m.;
- That the said Aggregates is [sic] for the exclusive use of the Contractor;
- That the terms of payment is Fifteen (15) days after the receipt of billing;
- That there is [sic] no modification, amendment, assignment or transfer of this Agreement after acceptance shall be binding upon the SUPPLIER unless agreed to in writing by and between the CONTRACTOR and SUPPLIER.
LUCIA PARAS (sgd.) CORAZON Y. LUA (sgd.) Supplier Contractor15(Emphasis supplied)
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.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
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:chanroblesvirtuallawlibraryThe term "agreement" includes wills.
(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.
Without any doubt, oral testimony as to a certain fact, depending as it does exclusively on human memory, is not as reliable as written or documentary evidence. "I would sooner trust the smallest slip of paper for truth," said Judge Limpkin of Georgia, "than the strongest and most retentive memory ever bestowed on mortal man." This is especially true in this case where such oral testimony is given by a party to the case who has an interest in its outcome, and by a witness who claimed to have received a commission from the petitioner.40cralawlawlibraryThis, 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. In Philippine National Railways v. Court of First Instance of Albay,42 this court noted that "if the defendant set up the affirmative defense that the contract mentioned in the complaint does not express the true agreement of the parties, then parol evidence is admissible to prove the true agreement of the parties[.]"43 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.
It is true that petitioners Spouses Paras' Complaint does not specifically state words and phrases such as "mistake," "imperfection," or "failure to express the true intent of the parties." Nevertheless, it is evident that the crux of petitioners Spouses Paras' Complaint is their assertion that the Agreement "entered into on 6 December 1994 or thereabouts"51 was founded on the parties' supposed understanding that the quantity of aggregates allotted in favor of respondent Kimwa must be hauled by May 15, 1995, lest such hauling be rendered impossible by the rechanneling of petitioner Lucia Paras' permitted area. This assertion is the very foundation of petitioners' having come to court for relief.
- Sensing that the buyers-contractqrs and haulers alike could easily consumed [sic] the deposits defendant proposed to the plaintiff-wife that it be assured of a forty thousand (40,000) cubic meter [sic];
- Plaintiff countered that the area is scheduled to be rechanneled on 15 May 1995 and by that time she will be prohibited to sell the aggregates;
- She further told the defendant that she would be willing to enter into a contract provided the forty thousand cubic meter [sic] will be withdrawn or completely extracted and hauled before 15 May 1995, the scheduled rechanneling:
- Defendant assured her that it will take them only two to three months to haul completely the desired volume as defendant has all the trucks needed;
- Convinced of the assurances, plaintiff-wife and the defendant entered into a contract for the supply of the aggregates sometime on 6 December 1994 or thereabouts, at a cost of Two Hundred Forty (P240.00) Pesos per truckload[.]50
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
- The allegation in paragraph six of the complaint is admitted subject to the qualification that when defendant offered to buy aggregates from the concession of the plaintiffs, it simply asked the plaintiff-concessionaire if she could sell a sufficient supply of aggregates to be used in defendant's construction business and plaintiff-concessionaire agreed to sell to the defendant aggregates from her concession up to a limit of 40,000 cubic meters at the price of P240.00 per cubic meter.
- The allegations in paragraph seven and eight of the complaint are vehemently denied by the defendant. The contract which was entered into by the plaintiffs and the defendant provides only that the former supply the latter the volume of 40,000.00 cubic meters of aggregates. There is no truth to the allegation that the plaintiff wife entered into the contract under the condition that the aggregates must be quarried and hauled by defendant completely before May 15, 1995, otherwise this would have been unequivocally stipulated in the contract.
- The allegation in paragraph nine of the complaint is hereby denied. The defendant never made any assurance to the plaintiff wife that it will take only two to three months to haul the aforesaid volume of aggregates. Likewise, the contract is silent on this aspect for in fact there is no definite time frame agreed upon by the parties within which defendant is to quarry and haul aggregates from the concession of the plaintiffs.
- The allegation in paragraph ten of the complaint is admitted insofar as the execution of the contract is concerned. However, the contract was executed, not by reason of the alleged assurances of the defendant to the plaintiffs, as claimed by the latter, but because of the intent and willingness of the plaintiffs to supply and sell aggregates to it. It was upon the instance of the plaintiff that the defendant sign the subject contract to express in writing their agreement that the latter would haul aggregates from plaintiffs' concession up to such point in time that the maximum limit of 40,000 cubic meters would be quarried and hauled without a definite deadline being set. Moreover, the contract does not obligate the defendant to consume the allotted volume of 40,000 cubic meters.52
This Special Permit was, in turn, introduced by petitioners in evidence as their Exhibit "A,"54 with its date of issuance and effectivity being specifically identified as their Exhibit "A-1."55 Relevant portions of this Special Permit read:
6) Prior to or during the execution of the contract[,] the Plaintiffs furnished the Defendant all the documents and requisite papers in connection with the contract, one of which was a copy of the Plaintiff's [sic] special permit indicating that the Plaintiff's [sic] authority was only good for (6) months from November 14, 1994.53
PERMISSION is hereby granted to:Having been admittedly furnished a copy of this Special Permit, respondent Kimwa was well aware that a total of only about 40,000 cubic meters of aggregates may be extracted by petitioner Lucia from the permitted area, and that petitioner Lucia Paras' operations cannot extend beyond May 15, 1995, when the Special Permit expires.to undertake the rechannelling of Block No. VI of Sapang Daco River along Barangay Ilihan, Toledo City, subject to following terms and conditions:chanroblesvirtuallawlibraryName AddressLUCIA PARAS Poblacion, Toledo City1. That the volume to be extracted from the area is approximately 40,000 cubic meters;This permit which is valid for six (6) months from the date hereof is revocable anytime upon violation of any of the foregoing conditions or in the interest of public peace and order.
Cebu Capitol, Cebu City, November 14, 1994.56cralawlawlibrary
Endnotes:
1Rollo, pp. 11-28.
2 Id. at 32-39. The Decision was penned by Associate Justice Isaias P. Dicdican (Chair) and concurred in by Associate Justices Sesinando E. Villon and Enrico A. Lanzanas.
3 Id. at 47-8. The Resolution was penned by Associate Justice Isaias P. Dicdican (Chair) and concurred in by Associate Justices Pampio A. Abarintos and Enrico A. Lanzanas.
4 Id. at 66-70.
5 Id. at 26.
6 Id. at 70.
7 Id. at 38.
8 Id. at 48.
9 Id. at 32.
10 Id.
11 Id. at 36.
12 Id. at 33.
13 Id.
14 Id. at 66.
15 RTC records, p. 97.
16Rollo, p. 33.
17 Id. at 56-59.
18 Id. at 56.
19 Id.
20 Id. at 56-57.
21 Id. at 57.
22 Id.
23 Id.
24 Id.
25 Id.
26 Id. at 60-63.
27 Id. at 60.
28 Id. at 60-61.
29 Id. at 61-62.
30 Id. at 62-63.
31 Id. at 70.
32 Id. at 96.
33 Id. at 70.
34 Id. at 36-37.
35 Id. at 48.
36See Inciong, Jr. v. Court of Appeals, 327 Phil. 364, 371 (1996) [Per J. Romero, Second Division].
37Seaoil Petroleum Corporation v. Autocorp Group, 590 Phil. 410, 418 (2008) [Per J. Nachura, Third Division], citing Spouses Edrada v. Spouses Ramos, 505 Phil. 672, 677-678 (2005) [Per J. Tinga, Second Division].
38Ortanez v. Court of Appeals, 334 Phil. 514,518(1997) [Per J. Francisco, Third Division].
39 327 Phil. 270 (1996) [Per J. Francisco, Third Division].
40 Id. at 276, citing De Leon v. Court of Appeals, 205 SCRA 612, 622-623 (1992) [Per J. Cruz, First Division] and Miller v. Cotten, 5 Ga. 341, 349.
41ACI Philippines, Inc. v. Coquia, 580 Phil. 275, 284 (2008) [Per J. Tinga, Second Division].
42 173 Phil. 5 (1978) [Per J. Aquino, Second Division].
43 Id. at 11, citing Enriquez, et al. v. Ramos, 116 Phil. 525, 531 (1962) [Per J. Bautista Angelo, En Banc], Philippine Sugar E. D. Co. v. Philippines, 62 L. Ed. 1177, 247 U.S. 385, Heirs of De la Rama v. Talisay-Silay Milling Co., 54 Phil. 580, 588 (1930) [Per J. Romualdez, En Banc], and Land Settlement and Development Corporation v. Garcia Plantation Co., Inc., 117 Phil. 761, 765 (1963) [Per J. Paredes, En Banc].
44 REV. RULES ON EVID., Rule 128, secs. 3 and 4 provide:
Section 3. Admissibility of evidence. — Evidence is admissible when it is relevant to the issue and is not excluded by the law of these rules.
Section 4. Relevancy; collateral matters. — Evidence must have such a relation to the fact in issue as to induce belief in its existence or non-existence. Evidence on collateral matters shall not be allowed, except when it tends in any reasonable degree to establish the probability or improbability of the fact in issue.
45Rollo, p. 36.
46 Id. at 37.
47 Id.
48 Id. at 36.
49 Id. at 37.
50 Id. at 56-57.
51 Id. at 57.
52 Id. at 60-61.
53 Id. at 64.
54 RTC records, pp. 93 and 96.
55 Id. at 93.
56 Id. at 96.
57 Id. at 97.
58 REV. RULES ON EVID., Rule 131, sec. 3(d).