Gurango v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: Private respondent Edward Ferreira sold one hundred (100) raffle tickets valued at P500.00 to petitioner Amado Gurango for a fundraising project of the Makati Jaycees. Ticket number 162574, in the name of petitioners' minor son but in the possession of the private respondent, won a Toyota Corolla car during the raffle. Petitioner claimed to have paid P300.00 for sixty (60) tickets and instructed his cashier to fill up the stubs with family members' names before surrendering the check. He alleged that the private respondent's messenger collected the check and all tickets. The following day, private respondent informed petitioner that he had paid the remaining P200.00 balance and arranged a meeting to collect the forty (40) claim stubs representing the unpaid balance. During this meeting, petitioner inquired about winning tickets and was told none won a car. Petitioner eventually handed over all claim stubs, from which private respondent selected forty (40). The parties then executed a written agreement on a yellow paper, handwritten by petitioner, stating that each party would own any prize corresponding to the stub numbers they held, regardless of the name printed on the stub. Petitioner later discovered ticket number 162574 had won the car and realized he had mistakenly dated the agreement April 14, 1977, instead of April 15, 1977. Private respondent claimed petitioner only bought sixty (60) tickets and offered to return the remaining forty (40) tickets due to financial needs, which private respondent accepted. Private respondent alleged that upon noticing all tickets were in petitioner's family's names, he asked petitioner to write down their agreement on April 14, 1977. Petitioner then allegedly refused to comply and wrote a letter to the Makati Jaycees disclaiming the agreement. Procedural History: Private respondent filed a complaint for damages against petitioners. The Regional Trial Court (RTC) dismissed the complaint, ordering the plaintiff to pay defendants moral damages and attorney's fees, but ordering defendants to reimburse plaintiff P200.00 for the balance paid. The Intermediate Appellate Court (IAC) reversed the RTC decision, ordering petitioners to pay private respondent P36,000.00 for the car and P5,000.00 as attorney's fees. The Petition: Petitioners seek to annul and set aside the decision of the IAC.
Issue(s)
Whether the agreement executed between the parties on April 14, 1977, is valid and binding. Whether parol evidence is admissible to alter the terms of the written agreement.
Ruling
The petition is denied for lack of merit. The decision of the appellate court is affirmed.
Ratio Decidendi
On the validity of the agreement: The Court held that the agreement executed by the parties on April 14, 1977, is valid and binding. The terms of the agreement were reduced to writing and signed by both parties. Section 9, Rule 130 of the Revised Rules of Court provides that when the terms of an agreement have been reduced to writing, it is considered as containing all such terms, and no evidence of the terms can be admitted other than the contents of the writing, except in specific cases. The Court found that the exception for mistake or imperfection, or failure to express the true intent, was not applicable here, as the mistake alleged by the petitioner was not mutual. Furthermore, the Court found the private respondent's version more credible because the terms of the agreement were clear and required no interpretation. The fact that the petitioner himself prepared the agreement further indicated that it was entered into freely and voluntarily, making the claim of fraud unbelievable. The Court emphasized that if the petitioner truly intended the date to be April 15, 1977, he should have written that date, given its alleged significance, rather than April 14, 1977. Therefore, the agreement is valid and binding upon the petitioner and respondent. On the admissibility of parol evidence: The Court ruled that parol evidence is inadmissible to alter the terms of the written agreement. Applying Section 9, Rule 130 of the Revised Rules of Court, the Court stated that the contents of a valid and enforceable written agreement are conclusive upon the parties. Evidence aliunde (from another source) cannot be used to change the terms of such an agreement. The Court clarified that the mistake contemplated as an exception to the parol evidence rule must be a mistake of fact that is mutual to both parties. In this case, the petitioner's alleged mistake regarding the date of execution was not shown to be mutual, and the terms of the written agreement were clear and unambiguous, thus precluding the admission of extrinsic evidence to modify its meaning or intent.
Main Doctrine
The terms of a written agreement, reduced to writing and signed by the parties, are considered conclusive and binding, and parol evidence is inadmissible to alter or contradict its terms, unless a mistake or imperfection in the writing, or its failure to express the true intent of the parties, or the validity of the agreement is put in issue by the pleadings, or there is an intrinsic ambiguity in the writing. A mistake contemplated as an exception to the parol evidence rule must be a mistake of fact mutual to the parties.