G.R. No. 171601.  April 8, 2015.

*
 
SPOUSES BONIFACIO and LUCIA PARAS, petitioners,
vs. KIMWA CONSTRUCTION AND DEVELOPMENT
CORPORATION, respondent.

Remedial Law; Evidence; Parol Evidence Rule; 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;
Per this rule, reduction to written form, regardless of the
formalities observed, “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.”—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:
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: (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, “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.”

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*  SECOND DIVISION.
 242

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Paras vs. Kimwa Construction and Development
Corporation

Same; Same; Same; 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.—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[.]” 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, 83 SCRA 569 (1978), 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[.]”  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. Apart from pleading these exceptions, it is equally
imperative that the parol evidence sought to be introduced points
to the conclusion proposed by the party presenting it.  That is, it
must be relevant, tending to “induce belief in [the] existence” of
the flaw, true intent, or subsequent extraneous terms averred by
the party seeking to introduce parol evidence. 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.
Same; Same; Our evidentiary rules impel us to proceed from
the position (unless convincingly shown otherwise) that
individuals act as rational human beings, i.e., “[t]hat a person
takes ordinary care of his concerns.”—Our evidentiary rules impel
us to proceed from the position (unless convincingly shown
otherwise) that individuals act as rational human beings, i.e.,
“[t]hat a person takes ordinary care of his concerns[.]” This basic
evidentiary stance, taken with the supporting evidence
petitioners Spouses Paras adduced, respondent Kimwa’s
awareness of the conditions under which petitioner Lucia Paras
was bound, and the Agreement’s own text specifying exclusive

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  allotment for respondent Kimwa, supports petitioners

Spouses Paras’ position that respondent Kimwa was obliged to
haul 40,000 cubic meters of aggregates on or before May 15, 1995.
As it admittedly hauled only 10,000 cubic meters, respondent
Kimwa is liable for breach of contract in respect of the remaining
30,000 cubic meters.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
  Escasinas Partner & Company for petitioners.
  P.B. Flores & Associates for respondent.

 
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 C.A.-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

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1  Rollo, pp. 11-28.

2   Id., at pp. 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 pp. 47-48. 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 pp. 66-70.
 5  Id., at p. 26.

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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:

AGREEMENT 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:

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6   Id., at p. 70.
7   Id., at p. 38.
8   Id., at p. 48.
9   Id., at p. 32.
10  Id.
11  Id., at p. 36.
12  Id., at p. 33.
13  Id.
14  Id., at p. 66.
  
 
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-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;
W I T N E S S E T H:
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:
1. 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;
2. That the volume allotted by the SUPPLIER to the
CONTRACTOR is limited to 40,000 cu.m.;
3. That the said Aggregates is [sic] for the exclusive use of the
Contractor;
4. That the terms of payment is Fifteen (15) days after the
receipt of billing;
5. 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.
IN WITNESS WHEREOF, we have hereunto affixed our
signatures this 6th day of December, 1994 at Mandaue City, Cebu,
Philippines.

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LUCIA PARAS (sgd.)       CORAZON Y. LUA (sgd.)

Supplier                                 Contractor15
(Emphasis supplied)
  
Pursuant to the Agreement, Kimwa hauled 10,000 cubic
meters of aggregates. Sometime after this, however, Kimwa
stopped hauling aggregates.16
Claiming that in so doing, Kimwa violated the
Agreement, Lucia, joined by her husband, Bonifacio, filed
the Complaint17 for breach of contract with damages that is
now subject of this Petition.
In their Complaint, Spouses Paras alleged that
sometime in December 1994, Lucia was approached by
Kimwa expressing its interest to purchase gravel and sand
from her.18 Kimwa allegedly asked that it be “assured”19 of
40,000 cubic meters worth of aggregates.20 Lucia countered
that her concession area was due to be rechanneled on May
15, 1995, when her Special Permit expires.21 Thus, she
emphasized that she would be willing to enter into a
contract with Kimwa “provided the forty thousand cubic
meter[s] w[ould] be withdrawn or completely extracted and
hauled before 15 May 1995[.]”22 Kimwa then assured Lucia
that it would take only two to three months for it to
completely haul the 40,000 cubic meters of aggregates.23
Convinced of Kimwa’s assurances, Lucia and Kimwa
entered into the Agreement.24

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15  RTC Records, p. 97.

16  Rollo, p. 33.
17  Id., at pp. 56-59.
18  Id., at p. 56.
19  Id.
20  Id., at pp. 56-57.
21  Id., at p. 57.
22  Id.
23  Id.
24  Id.

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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
In its Answer,26 Kimwa alleged that it never committed
to obtain 40,000 cubic meters of aggregates from Lucia. 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 denied
transferring to the concession area of a certain Mrs.
Remedios dela Torre.29
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
On May 16, 2001, 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 con-

_______________

25  Id.
26  Id., at pp. 60-63.
27  Id., at p. 60.
28  Id., at pp. 60-61.
29  Id., at pp. 61-62.
30  Id., at pp. 62-63.

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trary to human experience for Kimwa to have entered

into an Agreement with Lucia without verifying the latter’s
authority as a concessionaire.31 Considering that the
Special Permit32 granted to Lucia (petitioners’ Exhibit “A”
before the trial court) clearly indicated that her authority
was good for only six (6) months from November 14, 1994,
the trial court noted that Kimwa must have been aware
that the 40,000 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
P720,000.00, the value of the 30,000 cubic meters of
aggregates that Kimwa did not haul, in addition to
attorney’s fees and costs of suit.33
On appeal, 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. It noted that the
Agreement was clear that Kimwa was under no obligation
to haul 40,000 cubic meters of aggregates by May 15,
1995.34
In a subsequent Resolution, the Court of Appeals denied
reconsideration to Spouses Paras.35
Hence, this Petition was filed.
The issue for resolution is whether respondent Kimwa
Construction and Development Corporation is liable to
petitioners Spouses Paras for (admittedly) failing to haul
30,000 cubic meters of aggregates from petitioner Lucia
Paras’ permitted area by May 15, 1995.
To resolve this, it is necessary to determine whether
petitioners Spouses Paras were able to establish that
respondent Kimwa was obliged to haul a total of 40,000
cubic meters of aggregates on or before May 15, 1995.

_______________

31  Id., at p. 70.
32  Id., at p. 96.
33  Id., at p. 70.
34  Id., at pp. 36-37.
35  Id., at p. 48.

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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.
  
I
 
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:

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:
(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
contradict-

_______________

36  See Inciong, Jr. v. Court of Appeals, 327 Phil. 364, 371; 256 SCRA
578, 585 (1996) [Per J. Romero, Second Division].

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tion 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.”38 As
illustrated in Abella v. Court of Appeals:39

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.40

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38  Ortañez v. Court of Appeals, 334 Phil. 514, 518; 266 SCRA 561, 565
(1997) [Per J. Francisco, Third Division].
39   327 Phil. 270; 257 SCRA 482 (1996) [Per J. Francisco, Third
Division].
37  Seaoil Petroleum Corporation v. Autocorp Group, 590 Phil. 410, 418;
569 SCRA 387, 395 (2008) [Per J. Nachura, Third Division], citing Edrada
v. Ramos, 505 Phil. 672, 677-678; 468 SCRA 597, 604 (2005) [Per J. Tinga,
Second Division].
40  Id., at p. 276; p. 487, 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.

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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. 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.
Apart from pleading these exceptions, it is equally
imperative that the parol evidence sought to be introduced
points to the conclusion proposed by the party presenting
it. That is, it must be relevant, tending to “induce belief in
[the] existence”44

_______________

41  ACI Philippines, Inc. v. Coquia, 580 Phil. 275, 284; 558 SCRA 300,
310 (2008) [Per J. Tinga, Second Division].
42  173 Phil. 5; 83 SCRA 569 (1978) [Per J. Aquino, Second Division].
43  Id., at p. 11; p. 576, citing Enriquez v. Ramos, 116 Phil. 525, 531; 6
SCRA 219, 220-221 (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; 7 SCRA 750, 752 (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
nonexistence. Evidence on collateral matters shall not be allowed,

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of the flaw, true intent, or subsequent extraneous terms

averred by the party seeking to introduce parol evidence.
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.
 
II
 
Here, the Court of Appeals found fault in the Regional
Trial Court for basing its findings “on the basis of evidence
presented in violation of the parol evidence rule.”45 It
proceeded to fault petitioners Spouses Paras for showing
“no proof . . . of [respondent Kimwa’s] obligation.”46 Then, it
stated that “[t]he stipulations in the agreement between
the parties leave no room for interpretation.”47
The Court of Appeals is in serious error.
At the onset, two (2) flaws in the the Court of Appeals’
reasoning must be emphasized. First, it is inconsistent to
say, on one hand, that the trial court erred on the basis of
“evidence presented”48 (albeit supposedly in violation of the
Parol Evidence Rule), and, on the other, that petitioners
Spouses Paras showed “no proof.”49 Second, without even
accounting for the exceptions provided by Rule 130, Section
9, the Court of Appeals immediately concluded that
whatever evidence petitioners Spouses Paras presented
was in violation of the Parol Evidence Rule.

_______________

except when it tends in any reasonable degree to establish the

probability or improbability of the fact in issue.
45  Rollo, p. 36.
46  Id., at p. 37.
47  Id.
48  Id., at p. 36.
49  Id., at p. 37.

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Contrary to the Court of Appeal’s conclusion, petitioners

Spouses Paras pleaded in the Complaint they filed before
the trial court a mistake or imperfection in the Agreement,
as well as the Agreement’s failure to express the true
intent of the parties. Further, respondent Kimwa, through
its Answer, also responded to petitioners Spouses Paras’
pleading of these issues. This is, thus, an exceptional case
allowing admission of parol evidence.
Paragraphs 6 to 10 of petitioners’ Complaint read:

6. Sensing that the buyers-contractors 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];
7. 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;
8. 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;
9. 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;
10. 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

 
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
petition-

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50  Id., at pp. 56-57.

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ers 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.
Proof of how petitioners Spouses Paras successfully
pleaded and put this in issue in their Complaint is how
respondent Kimwa felt it necessary to respond to it or
address it in its Answer. Paragraphs 2 to 5 of respondent
Kimwa’s Answer read:

2. 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.
3. The allegations in paragraphs 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.

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51  Id., at p. 57.

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4. 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.
5. 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

 
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.

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52  Id., at pp. 60-61.

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III
 
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.
The Pre-Trial Order issued by the Regional Trial Court
in Civil Case No. MAN-2412 attests to respondent Kimwa’s
admission that:
 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

 
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:
 

To All Whom It May Concern:

PERMISSION is hereby granted to:
Name   Address
LUCIA PARAS Poblacion, Toledo City

_______________

53  Id., at p. 64.
54  RTC Records, pp. 93 and 96.  
55  Id., at p. 93.

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Paras vs. Kimwa Construction and Development
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to undertake the rechannelling of Block No. VI of Sapang Daco

River along Barangay Ilihan, Toledo City, subject to following
terms and conditions:
1.  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, 1994.56

 
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.
The Special Permit’s condition that a total of only about
40,000 cubic meters of aggregates may be extracted by
petitioner Lucia Paras from the permitted area lends
credence to the position that the aggregates “allotted” to
respondent Kimwa was in consideration of its
corresponding commitment to haul all 40,000 cubic meters.
This is so, especially in light of the Agreement’s own
statement that “the said Aggregates is for the exclusive use
of [respondent Kimwa.]”57 By allotting the entire 40,000
cubic meters, petitioner Lucia Paras bound her entire
business to respondent Kimwa. Rational human behavior
dictates that she must have done so with the corresponding
assurances from it. It would have been irrational, if not
ridiculous, of her to oblige herself to make this allotment

_______________

56  Id., at p. 96.
57  Id., at p. 97.

258

258 SUPREME COURT REPORTS ANNOTATED

Paras vs. Kimwa Construction and Development
Corporation

without respondent Kimwa’s concomitant undertaking

that it would obtain the entire amount allotted.
Likewise, the condition that the Special Permit shall be
valid for only six (6) months from November 14, 1994 lends
credence to petitioners Spouses Paras’ assertion that, in
entering into the Agreement with respondent Kimwa,
petitioner Lucia Paras did so because of respondent
Kimwa’s promise that hauling can be completed by May 15,
1995. Bound as she was by the Special Permit, petitioner
Lucia Paras needed to make it eminently clear to any party
she was transacting with that she could supply aggregates
only up to May 15, 1995 and that the other party’s hauling
must be completed by May 15, 1995. She was merely acting
with due diligence, for otherwise, any contract she would
enter into would be negated; any commitment she would
make beyond May 15, 1995 would make her guilty of
misrepresentation, and any prospective income for her
would be rendered illusory.
Our evidentiary rules impel us to proceed from the
position (unless convincingly shown otherwise) that
individuals act as rational human beings, i.e., “[t]hat a
person takes ordinary care of his concerns[.]”58 This basic
evidentiary stance, taken with the supporting evidence
petitioners Spouses Paras adduced, respondent Kimwa’s
awareness of the conditions under which petitioner Lucia
Paras was bound, and the Agreement’s own text specifying
exclusive allotment for respondent Kimwa, supports
petitioners Spouses Paras’ position that respondent Kimwa
was obliged to haul 40,000 cubic meters of aggregates on or
before May 15, 1995. As it admittedly hauled only 10,000
cubic meters, respondent Kimwa is liable for breach of
contract in respect of the remaining 30,000 cubic meters.
WHEREFORE, the Petition is GRANTED. The
assailed Decision dated July 4, 2005 and Resolution dated
February 9, 2006 of the Court of Appeals Special 20th
Division in C.A.-G.R. CV No. 74682 are REVERSED and
SET ASIDE. The Deci-

_______________

58  Rev. Rules on Evid., Rule 131, Sec. 3(d).

259

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Paras vs. Kimwa Construction and Development
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sion of Branch 55 of the Regional Trial Court, Mandaue

City dated May 16, 2001 in Civil Case No. MAN-2412 is
REINSTATED.
A legal interest of 6% per annum shall likewise be
imposed on the total judgment award from the finality of
this Decision until full satisfaction.
SO ORDERED.

Carpio (Chairperson), Brion, Del Castillo and

Mendoza, JJ., concur.

Petition granted, judgment and resolution reversed and

set aside.

Notes.—To avoid the operation of the parol evidence

rule, the Rules of Court allows a party to present evidence
modifying, explaining or adding to the terms of the written
agreement if he puts in issue in his pleading the failure of
the written agreement to express the true intent and
 agreement of the parties. (Leoveras vs. Valdez, 652 SCRA
61 [2011])
Unsubstantiated testimony, offered as proof of verbal
agreements which tend to vary the terms of the written
agreement, is inadmissible under the rule. (Saraza vs.
Francisco, 711 SCRA 95 [2013])
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