Case Summary (G.R. No. 79962)
Allegations and Counterclaims
Conrado Salonga alleged that Lucio Cruz borrowed an amount of Php 35,000.00 on May 4, 1982, for business purposes, with only Php 20,000.00 paid back, leaving a balance of Php 15,000.00. Salonga claimed an additional loan of Php 15,250.00 was extended to Cruz, who failed to deliver the fish from the fishpond under a "pakyaw" agreement. Cruz denied the loan, arguing instead that the received amounts were for consideration under the aforementioned agreement, claiming that Salonga owed him additional amounts for unpaid rentals.
Pre-Trial Agreement
During a pre-trial conference on August 24, 1984, both parties agreed to a partial stipulation of facts acknowledging the existence of a "pakyaw" contract and Cruz’s receipt of funds for that purpose. They agreed that Salonga delivered Php 35,000.00 on May 4, 1982, and subsequently made other payments as part of the transactions. Evidence was presented quantifying the financial exchanges between Salonga and Cruz.
Trial Court Findings
At the trial, the court ruled in favor of Cruz, determining that the amounts exchanged constituted valid payments under the "pakyaw" and sublease agreements rather than loans. The trial court awarded Cruz Php 3,054.00, plus costs. The court concluded that Salonga was liable for unpaid amounts and recognized the nature of the agreements between the parties.
Court of Appeals Decision
In a subsequent appeal, the Court of Appeals reversed the trial court’s ruling, categorizing the transactions as loans rather than payments for goods and services. This decision was grounded in the interpretation of documents and testimonies presented, emphasizing that the terms of Exhibit I (a receipt for Php 28,000.00) did not correlate with Exhibit D (the receipt for Php 35,000.00). The appellate court upheld that the evidence did not support Cruz's claims, concluding that the amounts were payments for loans.
Legal Framework: Parol Evidence Rule
The case presents critical discussions regarding the Parol Evidence Rule as stipulated in Section 7, Rule 130 of the Revised Rules of Court. The rule asserts that the terms of an agreement reduced to writing are presumed to contain all terms, and no external evidence can modify them unless specific conditions are invoked, such as intrinsic ambiguities or recognized mistakes. This legal principle formed the basis for the appellate court's rejection of Cruz's argument regarding the nature of the transactions.
Supreme Court Ruling
The Supreme Court ruled that the Court of Appeals erred in disregarding certain testimonies and the stipulation of facts that clarified the nature of the agreements. It reaffirmed that the Php 35,000.00 was meant
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Case Overview
- Parties Involved: Lucio R. Cruz (Petitioner) vs. Court of Appeals and Conrado Q. Salonga (Respondents).
- Case Reference: G.R. No. 79962.
- Date of Decision: December 10, 1990.
- Court: First Division of the Supreme Court of the Philippines.
Background of the Case
- Conrado Salonga filed a complaint for collection and damages against Lucio Cruz in the Regional Trial Court of Lucena City.
- The complaint centered around a business transaction involving the borrowing of money, specifically an amount of P35,000.00, which Cruz allegedly received from Salonga.
- A receipt dated May 4, 1982, served as evidence of this transaction, confirming the receipt of the funds by Cruz.
Claims and Defenses
Salonga's Claims:
- Asserted that only P20,000.00 of the borrowed amount was repaid, leaving a balance of P15,000.00.
- Claimed further agreements relating to exclusive purchasing rights for fish harvests from Cruz's leased fishponds, with additional loans totaling P15,250.00 and a lost receipt of P4,000.00.
Cruz's Defense:
- Denied the loan allegation, asserting that the amounts received were not loans but payments for a "pakyaw" (bulk buying) agreement and sublease arrangements.
- Claimed Salonga owed him money for unpaid rentals and an additional P4,000.00 for fish purchases.