Pilipinas Bank v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Pilipinas Bank obtained a Money Securities and Payroll Comprehensive Policy from Meridian Assurance Corporation, effective from January 13, 1985, to January 13, 1986. On November 25, 1985, while the policy was in force, the bank's armored vehicle, carrying a payroll withdrawal for a client, was robbed of P545,301.40. Petitioner filed a claim under the policy, invoking Section II and a warranty/rider. Private respondent denied the claim, asserting that the policy did not cover deliveries to clients. Procedural History: Petitioner filed a complaint with the Regional Trial Court (RTC), which dismissed the case. The Court of Appeals (CA) reversed the RTC and remanded the case. This Court dismissed a subsequent petition for review by the private respondent. Upon remand, during pre-trial, petitioner sought to present a witness, Mr. Cesar R. Tubianosa, to testify on negotiations leading to the policy's execution, including warranties. Private respondent objected, citing the best evidence rule and later the parol evidence rule when petitioner sought to recall the witness to testify on negotiations before issuance to determine the parties' intent. The RTC denied the motion to recall the witness, citing the parol evidence rule. The CA dismissed petitioner's subsequent petition for certiorari, finding no grave abuse of discretion by the RTC, and held that the policy's provisions were unambiguous and that the complaint lacked specific allegations of intrinsic ambiguity. The Petition: Petitioner filed a petition for review on certiorari with the Supreme Court, assailing the CA's decision which affirmed the RTC's denial of the motion to recall the witness, arguing that the CA erred in not allowing extrinsic evidence to clarify the parties' intent regarding the insurance policy's terms.
Issue(s)
Whether the Court of Appeals committed a grave abuse of discretion in affirming the RTC's denial of petitioner's motion to recall witness Cesar R. Tubianosa to testify on negotiations concerning the insurance policy; and whether extrinsic evidence is admissible to clarify the terms of the insurance policy despite the absence of specific allegations of ambiguity in the complaint.
Ruling
The petition is denied. The Decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the issue of recalling the witness and admitting extrinsic evidence: The Court affirmed the CA's ruling that the RTC did not commit grave abuse of discretion in denying the motion to recall the witness. The Court reiterated the principle that when the terms of an agreement have been reduced to writing, it is presumed to contain all the terms agreed upon, and no evidence of other terms can be admitted other than the contents of the written agreement, pursuant to Section 9, Rule 130 of the Revised Rules of Court. The Court emphasized that for parol evidence to be admissible to vary the terms of a written agreement, the mistake or imperfection thereof or its failure to express the true agreement must be put in issue by the pleadings. In this case, petitioner's complaint merely alleged entitlement to recovery under the policy's provisions and did not allege any ambiguity, mistake, or failure of the policy to express the true agreement between the parties. Therefore, petitioner had no right to insist on presenting extrinsic evidence to shed light on an alleged true agreement that was not pleaded. The Court cited Ortanez vs. Court of Appeals to underscore that oral testimony on alleged conditions, especially from an interested party, is less reliable than written evidence, and the written contract speaks a uniform language. The appellate court correctly noted the petitioner's failure to raise the issue of intrinsic ambiguity in its complaint, thus validating the RTC's disallowance of further evidence on the matter.
Main Doctrine
The parol evidence rule bars the admission of evidence aliunde to vary the terms of a written agreement unless the pleadings put in issue a mistake, imperfection, or failure to express the true agreement. A party cannot insist on presenting extrinsic evidence to clarify an alleged true agreement if the complaint does not allege ambiguity or failure of the written contract to express the true intent of the parties.