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.