AIR PHILIPPINES CO. vs. PENNSWELL, INC., G.R. No. 172835, December 13, 2007, RULE 130, SEC. 26. Privilege relating to trade secrets.

 

RULE 130, SEC. 26. Privilege relating to trade secrets.

AIR PHILIPPINES CO. vs. PENNSWELL, INC., G.R. No. 172835, December 13, 2007

P: CHICO-NAZARIO, J.

FACTS: Pennswell delivered and sold to Air Ph sundry goods in trade. Air Ph failed to comply its obligation amounting to ₱449k. Pensswell filed a Complaint for a Sum of Money. Air Ph alleged that it was defrauded in the amount of ₱592k by Pennswell. Air Ph asserted that it was deceived by Pennswell which merely altered the names and labels of such goods.

RTC directed Pennswell to give Air Ph a detailed list of the ingredients or chemical components of the products. Pennswell contended that it cannot be compelled to disclose the chemical components sought because the matter is confidential and constituted a trade secret which they cannot be forced to divulge. RTC reversed itself and held that the chemical components are Pennswell’s trade secrets and are privileged in character. CA affirmed.

ISSUE: Whether or not Pennswell cannot be compelled to disclose the list of ingredients of their products as it is a trade secret and are privileged in character.

HELD: YES. To compel Pennswell to reveal in detail the list of ingredients of its lubricants is to disregard its rights over its trade secrets. The chemical formulation of the products and their ingredients are embraced within the meaning of "trade secrets."

A trade secret is defined as a plan or process, tool, mechanism or compound known only to its owner and those of his employees to whom it is necessary to confide it.  The chemical composition, formulation, and ingredients of Pennswell’s special lubricants are trade secrets within the contemplation of the law. The ingredients constitute the very fabric of Pennswell’s production and business. To compel its disclosure is to cripple Pennswell’s business, and to place it at an undue disadvantage.

In the case at bar, Air Ph cannot rely on the Consumer Act in order to compel Pennswell to reveal the chemical components of its products. While it is true that all consumer products domestically sold shall indicate their general make or active ingredients in their respective labels of packaging, the law does not apply to Pennswell. Its products are not consumer products and which are not intended for personal, family, household or agricultural purposes. Rather, they are for industrial use, specifically for the use of aircraft propellers and engines.

Indeed, the privilege is not absolute; the trial court may compel disclosure where it is indispensable for doing justice.

 

EMMA LEE vs. CA, G.R. No. 177861, July 13, 2010, RULE 130. SECTION 25. PARENTAL AND FILIAL PRIVILEGE

 

RULE 130. SECTION 25. PARENTAL AND FILIAL PRIVILEGE

EMMA LEE vs. CA, G.R. No. 177861, July 13, 2010

P: ABAD, J.:

Facts: Spouses Lee Tek Sheng (Lee) and Keh Shiok Cheng (Keh) are immigrants from China. They had 11 children (the Lee-Keh children). Lee brought from China, Tiu Chuan (Tiu) to serve as housemaid. After Keh died, the Lee-Keh children learned that Tiu’s children with Lee (the Lee’s other children) claimed that they, too, were children of Lee and Keh. This prompted the Lee-Keh children to request NBI to investigate the matter. NBI concluded that the mother of the other 8 children (Lee’s other children) is most probably Tiu. Lee is in a dilemma in fixing the age of Keh to conform with his making his 8 children as their own legitimate children, elevating the status of his second family and secure their future. NBI found in the hospital records, the eldest of the Lee’s other children, Marcelo (who was recorded as the 12th child of Lee and Keh), was born of a 17-year-old mother, when Keh was already 38 years old at the time and so forth.

The Lee-Keh children filed for the deletion from the certificate of live birth of the Emma Lee, one of Lee’s other children, the name Keh and replace the same with the name Tiu to indicate her true mother’s name.

RTC granted the request of the Lee-Keh children to compel Tiu, Emma Lee’s presumed mother, to testify in the case. Tiu claimed that it violated Sec. 25, Rule 130, the rule on parental privilege, she being Emma’s stepmother. RTC thereafter quashed the subpoena it issued for being unreasonable and oppressive. CA held that Tiu’s advanced age alone does not render her incapable of testifying.

ISSUE: Whether or not Tiu can testify in court as it would violate her parental right not to be compelled to testify against her stepdaughter.

HELD: Yes. Tiu can Testify in court. Sec, 25. Parental and filial privilege. No person may be compelled to testify against his parents, other direct ascendants, children or other direct descendants.

But here Tiu, who invokes the filial privilege, claims that she is the stepmother of petitioner Emma Lee. The privilege cannot apply to them because the rule applies only to "direct" ascendants and descendants, a family tie connected by a common ancestry. A stepdaughter has no common ancestry by her stepmother. Article 965 thus provides:

Art. 965. The direct line is either descending or ascending. The former unites the head of the family with those who descend from him. The latter binds a person with those from whom he descends.

Consequently, Tiu can be compelled to testify against petitioner Emma Lee.

DFA vs. BCA INTERNATIONAL CO. G.R. No. 210858, June 29, 2016, Other privileged communication – RULE 130

 

Other privileged communication – RULE 130 -

DFA vs. BCA INTERNATIONAL CO. G.R. No. 210858, June 29, 2016

P: CARPIO, J.:

FACTS: DFA awarded the Machine Readable Passport and Visa Project (MRPN Project) to BCA International Corporation (BCA). During the implementation of the Project, DFA sought to terminate the Agreement. BCA opposed the termination and filed a Request for Arbitration. An ad hoc arbitral tribunal was constituted. The tribunal approved BCA's request to apply in court for the issuance of subpoena, subject to the conditions that the application will not affect its proceedings and the hearing will proceed whether the witnesses attend or not. BCA filed before the RTC a Petition for Assistance in Taking Evidence. BCA sought the issuance of subpoena ad testificandum and subpoena duces tecum to the following witnesses and documents in their custody: Secretary of DFA, Secretary of Finance, Chairman of COA, Executive Director or any officer or representative of the DTI, DFA Undersecretary. DFA alleged that the presentation of the witnesses and documents was prohibited by law and protected by the deliberative process privilege.

RTC ruled in favor of BCA and held that the evidence sought to be produced was no longer covered by the deliberative process privilege. In Chavez v. Public Estates Authority that acts, transactions or decisions are privileged only before a definite proposition is reached by the agency and since DFA already made a definite proposition and entered into a contract, DFA's acts, transactions or decisions were no longer privileged.

ISSUE: Whether or not the acts, transactions or decisions are privileged only before a definite proposition is reached by the agency.

HELD: No. Chavez does not apply in this case. The constitutional right to information includes official information on on-going negotiations before a final contract. The information, however, must constitute definite propositions by the government and should not cover recognized exceptions like privileged information, military and diplomatic secrets and similar matters affecting national security and public order. In these exceptional cases, even the occurrence of a "definite proposition" will not give rise to the public's right to information. The privileged character of the information does not end when an agency has adopted a definite proposition or when a contract has been perfected or consummated; otherwise, the purpose of the privilege will be defeated.

"Deliberative process privilege contains three policy bases: first, the privilege protects candid discussions within an agency; second, it prevents public confusion from premature disclosure of agency opinions before the agency establishes final policy; and third, it protects the integrity of an agency's decision; the public should not judge officials based on information they considered prior to issuing their final decisions." 

The burden falls upon the government agency to prove that the information in question satisfies both requirements - predecisional and deliberative. It may be overcome upon a showing that the discoverant's interests in disclosure of the materials outweigh the government's interests in their confidentiality. "The determination of need must be made flexibly on a case-by-case, ad hoc basis," and the "factors relevant to this balancing include: the relevance of the evidence, whether there is reason to believe the documents may shed light on government misconduct, whether the information sought is available from other sources and can be obtained without compromising the government's deliberative processes, and the importance of the material to the discoverant's case."

The case is remanded back to RTC to determine whether the documents and records sought to be subpoenaed are protected by the deliberative process privilege as explained in this Decision.

Maximo Alvarez vs. Susan Ramirez, G.R. No. 143439 October 14, 2005, RULE 130. Sec. 23. Disqualification by reason of Marriage.

 

RULE 130. Sec. 23. Disqualification by reason of Marriage.

Maximo Alvarez vs. Susan Ramirez, G.R. No. 143439 October 14, 2005

SANDOVAL-GUTIERREZ, J.:

FACTS: Maximo Alvarez set Susan Ramirez’ house on fire. Susan is Maximo’s sister-in-law. Maximo knew that when he set Susan’s house on fire, Susan and other members of her family including his sister, Esperanza (Maximo’s wife) was inside.

Susan Ramirez is the complaining witness in a criminal case for arson against Maximo pending before the RTC. The prosecutor called Esperanza Alvarez to the witness stand as the first witness against Maximo, her husband. Maximo and his counsel raised no objection. Esperanza testified that he saw his husband pouring gasoline outside Susan’s house.

In the course of Esperanza’s direct testimony, the latter showed "uncontrolled emotions," prompting the trial judge to suspend the proceedings.

Maximo filed a motion to disqualify Esperanza from testifying against him pursuant to Rule 130 of the Revised Rules of Court on marital disqualification.

RTC disqualified Esperanza from further testifying and deleting her testimony from the records.  CA nullified and set aside RTC’s decision.

ISSUE: Whether or not Esperanza can testify against her husband in the criminal case.

HELD: YES. Sec. 22. Rule 130. Disqualification by reason of marriage. – During their marriage, neither the husband nor the wife may testify for or against the other without the consent of the affected spouse, except in a civil case by one against the other, or in a criminal case for a crime committed by one against the other or the latter’s direct descendants or ascendants."

In Ordoño vs. Daquigan, when an offense directly attacks, or directly and vitally impairs, the conjugal relation, it comes within the exception to the statute that one shall not be a witness against the other except in a criminal prosecution for a crime committed by one against the other.

Obviously, the offense of arson by Maximo, directly impairs the conjugal relation between him and his wife. His act, as embodied in the Information for arson filed against him, eradicates all the major aspects of marital life such as trust, confidence, respect and love by which virtues the conjugal relationship survives and flourishes.

As shown by the records, prior to the commission of the offense, the relationship between Maximo and his wife was already strained. They were separated de facto almost 6 months before the incident. The evidence and facts presented reveal that the preservation of the marriage between them is no longer an interest the State aims to protect.

Esperanza is allowed to testify against her husband in the Arson case.

Jose Espineli vs. People G.R. No.179535, June 9, 2014, RULE 130, Sec. 22. Testimony confined to personal knowledge.

 

RULE 130, Sec. 22.  Testimony confined to personal knowledge.

Jose Espineli vs. People G.R. No.179535, June 9, 2014

DEL CASTILLO, J.:

FACTS: Alberto Berbon, a Senior Desk Coordinator of DZMM, was shot in front of his house by Jose Espineli (Jose), Paredes and 3 other unidentified persons who immediately fled the crime scene on board a waiting car. Reyes was arrested for another crime and  confided to the NBI that he was willing to give vital information regarding the Berbon case. NBI Agent Segunial interviewed Reyes where Reyes claimed that he saw Jose and Paredes board a red car while armed with a .45 caliber and armalite and that Jose told Paredes that "ayaw ko nang abutin pa ng bukas yang si Berbon."  The victim’s widow, Sabina Berbon (Sabina) likewise testified. According to her, Reyes sought financial help so he could transfer his family to the province and protect them from any untoward consequence that may result from his giving information. Another witness, Rodolfo Dayao (Rodolfo), testified that he sold his red Ford Escort car to the Paredes and 2 other person who came to his residence. He later identified the said car from the photographs presented to him by the PNP. Dr. Lagat, declared in Alberto’s Autopsy Report that the victim suffered multiple gunshot wounds and based on the size of the gunshot wounds or entrance, high-powered guns were used in the killing.

RTC found Jose guilty beyond reasonable doubt of Murder as charged. CA affirmed RTC. It ratiocinated that since none of the prosecution witnesses saw how the killing of the victim was perpetrated, the qualifying circumstance of abuse of superior strength cannot be appreciated. Neither can nighttime serve as an aggravating circumstance as the time of the commission of the crime was not even alleged in the Information. CA found petitioner guilty only of homicide instead of murder.

Jose anchors on the alleged erroneous admission in evidence of the Sinumpaang Salaysay of Reyes for being hearsay and inadmissible. That there was no direct evidence linking him to the crime. OSG representing People concurs with the Jose and recommends his acquittal.

ISSUE: Whether or not the testimony of Reyes is a hearsay and therefore inadmissible.

HELD: No. Sec. 36. Testimony generally confined to personal knowledge; hearsay excluded. – A witness can testify only to those facts which he knows of his personal knowledge; that is, which are derived from his own perception, except as otherwise provided in these rules.

Regardless of the truth or falsity of a statement, when what is relevant is the fact that such statement has been made, the hearsay rule does not apply and the statement may be shown. The statement itself may constitute a fact in issue or is circumstantially relevant as to the existence of such a fact (Doctrine of independently relevant statements)

The testimony of NBI Agent Segunial of what Reyes confided to him, cannot be regarded as hearsay evidence. The agent’s testimony was not presented to prove the truth of such statement but only for the purpose of establishing that Reyes executed a sworn statement. What is relevant is the fact that Reyes made such statement and the truth and falsity thereof is immaterial. In such a case, the statement of the witness is admissible as evidence and the hearsay rule does not apply. 

DST MOVERS CO. vs. PEOPLE'S GENERAL INSURANCE CORPORATION (PGIC), G.R. No.198627, January 13, 2016, RULE 130, Section 22. Testimony confined to personal knowledge.

 RULE 130, Section 22. Testimony confined to personal knowledge.

DST MOVERS CO. vs. PEOPLE'S GENERAL INSURANCE CORPORATION (PGIC), G.R. No.198627, January 13, 2016

LEONEN, J.:

FACTS: A Honda Civic sedan owned by Fidel Yuboco was hit on the rear by an Isuzu Elf truck owned by DST Movers along the SLEX. PGIC underscored that the sedan was on a stop position when it was hit. The sedan was then allegedly pushed forward, hitting a Mitsubishi Lancer. The driver of the truck then allegedly escaped. The sedan was covered by PGIC’s insurance. As a result of the incident, the sedan’s owner filed a total loss claim with PGIC in the amount of P320k. PGIC paid. Asserting that it was subrogated to Yuboco’s rights and that the proximate cause of the mishap was the negligence of the driver of the truck, PGIC demanded from DST Movers the amount of P90k, which represented the difference between the P320k and the salvage price of P230k, at which PGIC was supposedly able to sell what remained of the sedan.  Its demands not having been satisfied, PGIC filed its Complaint for Sum of Money. In support of its recollection of the events, PGIC relied on a Traffic Accident Investigation Report (Report) prepared by PO2 Tomas of the Muntinlupa City Traffic Enforcement Unit of the PNP. DST Movers acknowledged that it was the owner of the truck. However, it claimed that the truck did not make any trips on that day as it was undergoing repairs and maintenance. DST Movers attached as copies of invoices, receipts, and cash vouchers relating to repairs and maintenance procedures that were undertaken on the truck on the day of the accident.

MTC found DST Movers liable. RTC and CA affirmed.

ISSUE: Whether or not DST Movers liability can be established based on the Traffic Accident Investigation Report

HELD: NO. Rule 130, Sec. 36. Testimony generally confined to personal knowledge; hearsay excluded. A witness can testify only to those facts which he knows of his personal knowledge; that is, which are derived from his own perception, except as otherwise provided in these rules. The Hearsay Rule, however, is not absolute. There are exceptions relevant to this case:  Sec. 44. Entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein stated.

This, however, is only true, for as long the following requisites have been satisfied: (a) that the entry was made by a public officer or by another person specially enjoined by law to do so; (b) that it was made by the public officer in the performance of his duties, or by such other person in the performance of a duty specially enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the facts by him stated, which must have been acquired by him personally or through official information.

Neither PO2 Tomas, nor the person who supposedly reported the events to PO2 Tomas gave a testimony in support of the Report. It was this person who reported and not PO2 Tomas, who had personal knowledge of the facts stated in the Report. Thus, even as the Report embodies entries made by a public officer in the performance of his duties, it fails to satisfy the third requisite for admissibility for entries in official records as an exception to the Hearsay Rule. To be admitted as evidence, it was thus imperative for PO2 Tomas to have himself presented as a witness and then testify on his Report. However, even as the Report would have been admitted as evidence, PO2 Tomas’ testimony would not have sufficed in establishing the identity of the motor vehicle and/or the person responsible for the damage sustained by the sedan. For this purpose, the testimony of G. Simbahon was necessary.

PEOPLE vs. NUÑEZ, G.R. No. 209342, OCTOBER 4, 2017, RULE 130, SECTION 21. Qualification of witnesses

 

RULE 130, SECTION 21. Qualification of witnesses.

PEOPLE vs. NUÑEZ, G.R. No. 209342, OCTOBER 4, 2017

LEONEN, J.:

FACTS: Nunez (allegedly Paul pobre), Marciales, Nabia and alias “Jun”, armed with handguns, rob Caltex gasoline station of 5k. They shoot and killed Regencia, Diaz and Dimatulac. Only Marciales and Nabia were tried at first. RTC found them guilty of robbery with homicide and sentenced them to death. The case against Pobre and Jun was archived subject to revival upon their apprehension. Nunez was apprehended by the PNP on the premise that he was the same ''Paul Pobre" identified in the Informaation. Nuñez moved that the case against him be dismissed as he was not the "Paul Pobre" charged in the Information. However, prosecution witnesses identified him as 1 of the alleged robbers. During trial, the prosecution adopted the evidence already presented in Marciales and Nabia's trial and recalled prosecution witnesses Cruz and Perez where they both positively identified Nunez as among the perpetrators of the crime. RTC found Nunez guilty of robbery with homicide. CA affirmed.

ISSUE: Whether or not Nuñez is the same person, earlier identified as Paul Pobre, who acted in conspiracy with Marciales and Nabia based on the testimony of the eye witnesses.

HELD: NO. The prosecution did not account for the details of the presentation of Nunez to the 2 witnesses after he was arrested. These witnesses' alleged positive identification occurred almost 8 and 9 years from the time of the commission of the offense.

A witness' credibility is ascertained by considering the first two factors, the witness' opportunity to view the malefactor at the time of the crime and the witness' degree of attention at that time, based on conditions of visibility and the extent of time, little and fleeting as it may have been, for the witness to be exposed to the perpetrators, peruse their features, and ascertain their identity.

The totality of circumstances test requires a consideration of the length of time between the crime and the identification made by the witness. Ideally a prosecution witness must identify the suspect immediately after the incident.

The identification made by Cruz and Perez is unreliable. Despite their identification, there remains reasonable doubt if Nuñez is the same Pobre who supposedly committed the robbery with homicide along with Marciales and Nabia. Cruz's admission that she could not identify the fourth robber anathemized any subsequent identification.

The witnesses failed to even give any prior description of him. A prosecution witness failed to exhibit even the slightest degree of certainty when originally given the chance to identify him as the supposed fourth robber. A significantly long amount of time had lapsed since the criminal incident; the original witness' statement that none of his features were seen as to enable his identification; and the positive identification made of him when the case was re-opened. His presentation for identification before and during trial was peculiarly, even worrisomely, suggestive as to practically induce in prosecution witnesses the belief that he, to the exclusion of any other person, must have been the supposed fourth robber.  Nunez is acquitted.

PEOPLE vs. SOTA and GADJADLI, G.R. No. 203121, November 29, 2017, RULE 130, SECTION 21. Qualification of witnesses.

 

RULE 130, SECTION 21. Qualification of witnesses.

PEOPLE vs. SOTA and GADJADLI, G.R. No. 203121, November 29, 2017

MARTIRES, J.:

FACTS: Sota, Gadjadli, close friends and neighbor of the victim, Artemio Eba (Artemio), demanded food from Artemio, Artemio was willing to comply but insisted that he would hand the food through an opening in the wall being afraid to open the door as he might be harmed. Sota and others started to burn Artemio’s house. Artemio’s daughter was able to escape the house.

The following day, Jocelyn, together with her brothers and sisters, found Artemio's body with stab and gunshot wounds. Jocelyn was brought to the police station where she executed her affidavit. The house was totally burned.  Sota and Gadjadli were charged with murder and arson. They pleaded not guilty. Prosecution called to the witness stand Jocelyn and Abelardo. Sota and Gadjadli contends that Jocelyn failed to elucidate who were the actual perpetrators and how the alleged crimes were carried out. They claimed that the tales of the events were all speculations and self-serving perceptions

RTC found them guilty beyond reasonable doubt of the crime of Murder and Arson. CA found Jocelyn a credible witness who held her ground even during the cross-examination. That the requisites in order that circumstantial evidence may be sufficient for conviction had been satisfied in these cases and which proved beyond reasonable doubt that Sota and Gadjadli, together with three other unidentified individuals, killed Artemio and burned his house.

ISSUE: Whether or not Jocelyn is a credible witness

HELD: YES. Although Jocelyn was only 12 years old when the incident happened and when called to the witness stand, she possessed all the qualification and none of the disqualification to testify in these cases:

Sec. 20. Witnesses; their qualifications. - Except as provided in the next succeeding section, all persons who can perceive, and perceiving, can make known their perception to others, may be witnesses. Religious or political belief, interest in the outcome of the case, or conviction of crime unless otherwise provided by law, shall not be a ground for disqualification.

Sec. 21. Disqualification by reason of mental incapacity or immaturity. -The following persons cannot be witnesses: (a) Those whose mental condition, at the time of their production for examination, is such that they are incapable of intelligently making known their perception to others; (b) Children whose mental maturity is such as to render them incapable of perceiving the facts respecting which they are examined and of relating them truthfully.

Jocelyn's young age had no bearing on her qualification to testify on what happened. As the rules show, anyone who is sensible and aware of a relevant event or incident, and can communicate such awareness, experience, or observation to others can be a witness. Significantly, even under the crucible of an intense cross-examination, Jocelyn never wavered in her narration as to the incidents that led to the killing of Artemio and the burning of their house, and in the affirmative identification of Sota and Gadjadli as two of the five persons who were responsible for these crimes.

PNB vs. CUA, G.R. No. 199161, APRIL 18, 2018, RULE 130, SECTION 10. PAROL EVIDENCE RULE

   RULE 130, SECTION 10. PAROL EVIDENCE RULE

 

PNB vs. CUA, G.R. No. 199161, APRIL 18, 2018

MARTIRES, J.:

FACTS:  James Cua (James) and his brother, Antonio maintained a US Dollar Savings Time Deposit with PNB that has a face value of US$50k. He and Antonio had the practice of presigning loan application documents with PNB for the purpose of having a standby loan or ready money available anytime. James learned that he had a loan obligation with PNB which had allegedly become due and demandable. He maintained, that although he had pre-signed loan documents for pre-arranged loans with his time deposit as collateral, he had never availed of its proceeds. James requested from PNB the release of ₱500k. PNB rejected his loan application. PNB explained that his dollar time deposit had been applied in payment to the loans he had with the bank, in accordance with the loan application and other documents he had executed. James Cua filed a Complaint for Sum of Money against PNB. PNB admitted that James had applied for a loan, however, he received the proceeds of his loan.

RTC ruled in favor of James. That aside from the PNB Loan officer's bare testimony, no other evidence was presented to prove that the proceeds of the loan subject were released to and duly received by James. Since it has not been established that James had an outstanding debt to PNB, the latter's application of the former's time deposit to the alleged loan is improper. Necessarily, James is entitled to the return of his dollar time deposit.  CA affirmed.

ISSUE: Whether or not the parol evidence presented by James is clear and convincing and of such sufficient credibility as to overturn the Promissory note (written agreement).

HELD: NO. Parol evidence must be clear and convincing. Rule 130, Sec. 9 of the Rules of Court provides for the parol evidence rule which states that when the terms of an agreement have been reduced into 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.

This rule admits of exceptions. A party may present evidence to modify, explain or add to the terms of a written agreement if he puts in issue in his pleading any of the following: (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.

However, to overcome the presumption that the written agreement contains all the terms of the agreement, the parol evidence must be clear and convincing and of such sufficient credibility as to overturn the written agreement.

In this case, James' uncorroborated allegation that the loan documents were merely pre-signed for future loans is far from being the clear and convincing evidence necessary to defeat the terms of the written instrument. Thus, there is no reason to deviate from the terms of the loan as appearing on the promissory note. RTC and CA erred when they considered James' unsubstantiated claim over the terms of the promissory note and ruled that PNB failed to prove James' receipt of the loan proceeds.

SHEMBERG CO. v. CITIBANK, G.R. No. 216029, September 04, 2019, RULE 130, SECTION 10. PAROL EVIDENCE RULE

  RULE 130, SECTION 10. PAROL EVIDENCE RULE

SHEMBERG CO. v. CITIBANK, G.R. No. 216029, September 04, 2019

INTING, J.:

FACTS: Shemberg Marketing Co. (Shemberg) executed a real estate mortgage in favor of Citibank to secure loan of P28M.  Citibank sent a demand letter to pay its outstanding balance of US$390k under Promissory Note; otherwise, it would be forced to initiate foreclosure proceedings. Shemberg defaulted. Citibank commenced the extra-judicial foreclosure of the mortgaged properties. Upon learning of the foreclosure sale, Shemberg filed a Complaint for rescission or declaration of nullity of the contract of real estate mortgage against Citibank. Shemberg alleged that Citibank required Shemberg to execute a real estate mortgage for the increase and renewal of its credit line. However, despite the execution of the mortgage, Citibank refused to renew and increase Shemberg's credit line. Shemberg asserted that the real estate mortgage was void for lack of consideration, given Citibank's failure to comply with its commitment to renew and increase its credit line with the bank. Citibank countered that it required the execution of the real estate mortgage in order to provide additional security/collateral to augment Shemberg's subsisting chattel mortgage. 

RTC declared the real estate mortgage void for lack of consideration due to Citibank's failure to fulfill its commitment to renew Shemberg's credit line with the bank after it expired. Shemberg, however is liable to pay Citibank the amount of P19M, or the peso-equivalent of its US$390k outstanding obligation.

CA reversed RTC and declared the real estate mortgage valid and imposed the stipulated interest on the unpaid balance of Promissory Note. CA found that the real estate mortgage secured Shemberg's present and future obligations with Citibank.

ISSUE: Whether or not the real estate mortgage is indeed valid and binding between the parties.

HELD: YES. The Real Estate Mortgage shows that the real estate mortgage was executed to secure loan accommodations, as well as all past, present, and future obligations, of Shemberg to Citibank. Sec. 9, or the Parol Evidence Rule, "forbids any addition to or contradiction of the terms of a written instrument by testimony purporting to show that, at or before the signing of the document, other terms were orally agreed on by the parties." The terms of a written contract are deemed conclusive between the parties and evidence aliunde is inadmissible to change the terms embodied in the document. This rule, however, is not absolute. A party may present evidence aliunde to modify, explain or add to the terms of a written agreement if he puts in issue in his pleading any of the four exceptions to the Parol Evidence Rule: 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.

Here, all the exceptions obviously do not apply. The 1^st and 2^nd, as the real estate mortgage contract clearly stated the terms of the mortgage, leaving no doubt as to the contractual intention of the parties by a mere reading of the document. The 3^rd, since Shemberg's purpose for introducing evidence is not to invalidate the contract but to prove that Citibank had reneged on its commitment to renew and increase its credit line. The 4^th, as it was never alleged that the parties had agreed to other terms after the execution of the real estate mortgage contract. Based on these considerations, the Court sees no cogent reason to overturn the CA's factual findings and conclusions. Simply stated, it is clear that the terms agreed upon in the subject real estate mortgage are binding and conclusive between the parties.

SPOUSES BONIFACIO AND PARAS, vs. KIMWA CONSTRUCTION, G.R. No. 171601, April 8, 2015, RULE 130, SECTION 10. PAROL EVIDENCE RULE

 RULE 130, SECTION 10. PAROL EVIDENCE RULE

SPOUSES BONIFACIO AND PARAS, vs. KIMWA CONSTRUCTION, G.R. No. 171601, April 8, 2015

LEONEN, J.:

FACTS: Paras (Lucia) was a concessionaire of a sand and gravel permit. Kimwa is a construction firm that sells concrete aggregates to contractors and haulers. Lucia and Kimwa entered into a contract of supply of aggregates. Kimwa was to pick up the allotted aggregates at Lucia’s permitted area. Pursuant to the Agreement, Kimwa hauled 10k cubic meters of aggregates. Sometime after this, Kimwa stopped hauling aggregates. Lucia filed the Complaint for breach of contract. Kimwa asserted that the Agreement articulated the parties’ true intent that 40kcubic 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.

RTC held in favor of Spouses Paras. The Agreement stipulated that the allotted aggregates were set aside exclusively for Kimwa. Kimwa must have been aware that the 40k cubic meters of aggregates allotted to it must necessarily be hauled by May 15, 1995. As it failed to do so, it was liable to Spouses Paras for the total sum of ₱720k, the value of the 30,000 cubic meters of aggregates that Kimwa did not haul. CA reversed the RTC. It faulted the RTC for basing its findings on evidence presented which were supposedly in violation of the Parol Evidence Rule. It noted that the Agreement was clear that Kimwa was under no obligation to haul 40k cubic meters of aggregates by May 15, 1995.

ISSUE: Whether or not the evidence presented violated the parol evidence rule.

HELD: NO. Rule 130, Sec. 9 of the Rules on Evidence provides for the Parol Evidence Rule, -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: (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.

Reduction to written form, 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."

This, however, is merely a general rule. Provided that a party puts in issue in its pleading any of the 4 items enumerated in the 2nd paragraph of Rule 130, Sec. 9. Raising any of these as an issue in a pleading such that it falls under the exception is not limited to the party initiating an action.

In sum, 2 things must be established for parol evidence to be admitted: first, that the existence of any of the 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.

Contrary to the CA, Spouses Paras pleaded in the Complaint a mistake or imperfection in the Agreement, as well as the Agreement’s failure to express the true intent of the parties. Further, Kimwa also responded to Spouses Paras’ pleading of these issues. This is, thus, an exceptional case allowing admission of parol evidence.

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. Spouses Paras have established that Kimwa was obliged to haul 40k cubic meters of aggregates on or before May 15, 1995. Considering its admission that it did not haul 30k cubic meters of aggregates, Kimwa is liable to petitioners.

RTC is reinstated.

People v. Mabalo, G.R. No. 238839, February 27, 2019, RULE 130, SECTION 4. ORIGINAL DOCUMENT RULE (BEST EVIDENCE RULE)

  RULE 130, SECTION 4. ORIGINAL DOCUMENT RULE (BEST EVIDENCE RULE)

People v. Mabalo, G.R. No. 238839, February 27, 2019

PERALTA, J.:

FACTS: Mabalo have carnal knowledge with AAA, a minor, 14 years old, against her will and consent. AAA and her mother went to the Police Station and executed a sworn statement. AAA was then given a general physical examination and an anogenital examination. The Final Medico-legal Report found anogenital findings are diagnostic of blunt force or penetrating trauma.

Mabalo was arrested. During his arraignment, Mabalo, without the assistance of a counsel and after manifesting his willingness and readiness to be arraigned, entered a plea of not guilty. The prosecution presented the testimonies of AAA, SPO1 Santos, SPO1 Reyes, and Dr. Tan. Mabalo used the defense of denial and alibi.

RTC found Mabalo guilty beyond reasonable doubt of the crime of rape under RA 7610 and imposed the death penalty. CA ruled that even though the prosecution failed to prove that AAA was a minor at the time the incident took place, Mabalo may still be convicted of simple rape under Art. 266-A, par. 1(a) of the RPC and reduced the penalty to reclusion perpetua.

ISSUE: Whether or not the best evidence to prove the age is the original or certified true copy of birth certificate.

HELD: YES. Although the Information alleged that AAA was 14 years old at the time of the incident, no ·proof was presented to attest the truth of such statement.  Without the Certificate of Live Birth and other means by which AAA's age as alleged in the Information could have been ascertained beyond doubt, this Court is constrained to agree with the CA and deem the crime committed as Simple Rape.

In People v. Pruna, the guidelines in determining the age of the victim:

1. The best evidence to prove the age is an original or certified true copy of the certificate of live birth of such party.

2. In the absence, baptismal certificate and school records which show the date of birth.

3. In the absence of 1 and 2, the testimony of the victim's mother/member of the family by affinity or consanguinity who is qualified to testify on matters respecting pedigree such as the exact age or date of birth.

In addition, such positive identification of Mabalo as the one who raped her is corroborated by the result of the medico-legal examination conducted on her. A single and consistent testimony of the victim would suffice to sustain a conviction and the testimony of both officers who both attested to the arrest. The presentation of Dr. Tan's medico-legal report which appear to affirm AAA's version of the story. While it is a rule that medical finding is not an element of rape and cannot establish the one responsible for the same, jurisprudence dictates that it is corroborative of the testimony of the rape victim that she has been raped.