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.