FIRST DIVISION

[G.R. No. 141060. September 29, 2000.]

PILIPINAS BANK , petitioner, vs . COURT OF APPEALS, HON. ELOY R.

BELLO, in his capacity as Presiding Judge, RTC-Manila, Branch 15,
and MERIDIAN ASSURANCE CORPORATION , respondents.

Gella Dañguilan Mabaza & Associates for petitioner.

Datos, Quintos & Lopez Law Offices for private respondents.

SYNOPSIS

Petitioner obtained a money securities and payroll comprehensive insurance policy with
respondent corporation. During its effectivity, petitioner's armored vehicle was robbed. It
filed a formal notice of claim with the insurer, but it was denied on the ground that it did
not cover the deliveries of the withdrawals to petitioner's client. Thus, the filing of a
complaint against the insurer with petitioner claiming that under the provisions of the
policy it was entitled to recover the amount it lost during the robbery. The complaint did
not allege that the terms were ambiguous or failed to express the true agreement between
them. Petitioner, at the pre-trial, stated that it would present a witness to testify on the
negotiations that were held prior to the execution of the insurance contract and those that
led to the attachment warranties to prove that the subject loss is covered by the policy.
The insurer objected when petitioner was about to present the witness on the ground that
it would violate the best evidence rule. The objection was overruled and the witness was
allowed to testify only on the terms and conditions of the policy. Petitioner moved to recall
the witness for him to testify on the intentions of the parties prior to the issuance of the
policy. The trial court denied the motion on ground that it would violate the parol evidence
rule. This was affirmed on appeal by the Court of Appeals which found that there was no
ambiguity in the policy. Thus, this petition.
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 other terms other than the contents of the
written agreement. And for parol evidence to be admissible, there must be a mistake or
imperfection in a written contract or it failed to express the true agreement of the parties.
Otherwise, no evidence can be introduced to vary the terms thereof.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; PAROL EVIDENCE; WHEN ADMISSIBLE. — Section 9,

Rule 130 of the Revised Rules of Court expressly requires that for parol evidence to be
admissible to vary the terms of the written agreement, the mistake or imperfection thereof
or its failure to express the true agreement of the parties should be put in issue by the
pleadings.
2. ID.; ID.; ID.; ID.; CASE AT BAR. — As correctly noted by the appellate court, petitioner
failed to raise the issue of an intrinsic ambiguity, mistake or imperfection in the terms of
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 the Policy, or of the failure of said contract to express the true intent and agreement of the
parties thereto in its Complaint. There was therefore no error on the part of the appellate
court when it affirmed the RTC's Order disallowing the recall of Tubianosa to the witness
stand, for such disallowance is in accord with the rule that 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 other terms other than the contents of the written agreement. aSACED

3. ID.; ID.; ID.; RATIONALE BEHIND REQUIREMENT THAT MISTAKE OR IMPERFECTION

OF WRITTEN AGREEMENT MUST BE PUT IN ISSUE IN THE PLEADINGS. — The rational
behind the foregoing rule was explained in Ortanez vs. Court of Appeals, where we stated:
The parol evidence herein introduced is inadmissible. First, private respondents' oral
testimony on the alleged conditions, 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 undesirable unlike a written
contract which speaks of a uniform language. Thus, under the general rule in Section 9 of
Rule 130 of the Rules of Court, when the terms of an agreement were reduced to writing,
as in this case, it is deemed to contain all the terms agreed upon and no evidence of such
terms can be admitted other than the contents thereof. . . .

DECISION

KAPUNAN , J : p

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, assailing the Decision of the Court of Appeals, Sixth Division dated July 30,
1999 in CA-G.R. S.P. No. 29749 1 which dismissed petitioner Pilipinas Bank's petition for
certiorari, 2 and the Resolution, dated September 17, 1999 3 denying petitioner's Urgent
Motion for Extension of Time to file Motion for Reconsideration, Manifestation and Motion
to Admit Motion for Reconsideration.
The facts of the case are as follows:
On January 8, 1995, petitioner obtained from private respondent Meridian Assurance
Corporation a Money Securities and Payroll Comprehensive Policy which was effective
from January 13, 1985 to January 13, 1986. On November 25, 1985, at about 9:15 a.m.,
while the policy was in full force and effect, petitioner's armored vehicle bearing Plate No.
NBT 379 which was on its way to deliver the payroll withdrawal of its client Luzon
Development Bank ACLEM Paper Mills, was robbed by two armed men wearing police
uniforms along Magsaysay Road, San Antonio, San Pedro, Laguna. Petitioner's driver,
authorized teller and two private armed guards were on board the armored vehicle when
the same was robbed. The loss suffered by petitioner as a result of the heist amounted to
P545,301.40.
Petitioner filed a formal notice of claim under its insurance policy with private respondent
on December 3, 1985, invoking Section II of the Policy which states:
Section II — MONEY AND SECURITIES OUTSIDE PREMISES

The Company will subject to the Limits of this Section as hereinafter provided
indemnify the insured against loss by any cause whatsoever occuring (sic)
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 outside the premises of Money and Securities in the personal charge of a
Messenger in transit on a Money Route . . . . 4

and the warranty/rider attached to the Policy which provides that —

WARRANTED that in respect of PILIPINAS BANK Head Office and all its branches,
pick-up and/or deposits and withdrawals without the use of armored car,
company car, or official's car shall be covered by this policy. . . . 5

Private respondent denied petitioner's claim and averred that the insurance does not cover
the deliveries of the withdrawals to petitioner's clients.
Petitioner thereafter filed a complaint against private respondent with the Regional Trial
Court of Manila. Private respondent filed a motion to dismiss which was later granted by
the RTC. Petitioner then moved to reconsider the trial court's order, but the same was
denied. HaTISE

Aggrieved, petitioner filed a petition for certiorari with the Court of Appeals assailing the
RTC's order dismissing the complaint. 6 The appellate court granted the petition and
remanded the case to the RTC for further proceedings. Private respondent filed with this
Court a petition for review of the appellate court's decision, but the same was dismissed in
a Resolution dated July 5, 1989.
After the case was remanded to the RTC and the latter set the case for pre-trial, petitioner
filed its Pre-Trial Brief, stating among others, that it would present as one of its witnesses
Mr. Cesar R. Tubianosa to testify on the existence and due execution of the insurance
policy, particularly on the negotiations that were held prior to the execution thereof,
including negotiations that led to the attachment warranties, to prove that the loss subject
of petitioner's claim is covered by the Policy. Petitioner identified the issues of the case as
follows: DTIaCS

1. Whether or not the loss due to the hold-up/robbery is covered by the

Insurance Policy;
2. In the affirmative, whether or not, defendant is liable to plaintiff for said
loss, inclusive of other damages prayed for in the Complaint.

On September 18, 1991, when petitioner was about to present Mr. Tubianosa to testify,
private respondent objected and argued that said witness' testimony regarding the
negotiations on the terms and conditions of the policy would be violative of the best
evidence rule. However, private respondent's objection was overruled and Tubianosa was
allowed to take the stand. Private respondent again objected to the questions regarding
the negotiations on the terms and conditions on the policy, and the trial court sustained
the objection in part and overruled it in part by allowing petitioner to adduce evidence
pertaining to the negotiations other than what appears in the insurance policy. Tubianosa's
testimony was completed on said date.
On June 18, 1992, petitioner filed a Motion to Recall Witness, praying that it be allowed to
recall Tubianosa to testify on the negotiations pertaining to the terms and conditions of
the policy before its issuance to determine the intention of the parties regarding the said
terms and conditions. Private respondent objected thereto, on the ground that the same
would violate the parol evidence rule.
The RTC issued an Order dated July 24, 1999, denying petitioner's motion to recall
Tubianosa to the witness stand, ruling that the same would violate the parol evidence rule.
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 Petitioner's motion for reconsideration was also denied by the lower court.
On December 21, 1992, petitioner filed a petition for certiorari with the Court of Appeals
assailing the aforementioned Orders of the RTC. In its Decision dated July 30, 1999, the
appellate court dismissed the petition and held that there was no grave abuse of
discretion on the part of respondent judge. It held that there is no ambiguity in the
provisions of the Policy which would necessitate the presentation of extrinsic evidence to
clarify the meaning thereof. The Court of Appeals also stated that petitioner failed to set
forth in its Complaint a specific allegation that there is an intrinsic ambiguity in the
insurance policy which would warrant the presentation of further evidence to clarify the
intent of the contracting parties.
Hence, the present petition.
We find no cogent reason to disturb the findings of the Court of Appeals.
Petitioner's Complaint merely alleged that under the provisions of the Policy, it was
entitled to recover from private respondent the amount it lost during the heist. It did not
allege therein that the Policy's terms were ambiguous or failed to express the true
agreement between itself and private respondent. Such being the case, petitioner has no
right to insist that it be allowed to present Tubianosa's testimony to shed light on the
alleged true agreement of the parties, notwithstanding its statement in its Pre-Trial Brief
that it was presenting said witness for that purpose.
Section 9, Rule 130 of the Revised Rules of Court expressly requires that for parol evidence
to be admissible to vary the terms of the written agreement, the mistake or imperfection
thereof or its failure to express the true agreement of the parties should be put in issue by
the pleadings. 7
As correctly noted by the appellate court, petitioner failed to raise the issue of an intrinsic
ambiguity, mistake or imperfection in the terms of the Policy, or of the failure of said
contract to express the true intent and agreement of the parties thereto in its Complaint.
There was therefore no error on the part of the appellate court when it affirmed the RTC's
Order disallowing the recall of Tubianosa to the witness stand, for such disallowance is in
accord with the rule that 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 other terms other than the
contents of the written agreement. 8
The rationale behind the foregoing rule was explained in Ortanez vs. Court of Appeals, 9
where we stated:
The parol evidence herein introduced is inadmissible. First, private respondents'
oral testimony on the alleged conditions, 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
undesirable unlike a written contract which speaks of a uniform language. Thus,
under the general rule in Section 9 of Rule 130 of the Rules of Court, when the
terms of an agreement were reduced to writing, as in this case, it is deemed to
contain all the terms agreed upon and no evidence of such terms can be admitted
other than the contents thereof. . . . 1 0

WHEREFORE, the instant petition is hereby DENIED. The Decision of the Court of Appeals is
hereby AFFIRMED.
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 SO ORDERED.
Davide, Jr., C.J., Puno, Pardo and Ynares-Santiago, JJ., concur.
Footnotes

1. Pilipinas Bank, Petitioner-Plaintiff vs. Hon. Eloy R. Bello, Jr. as Judge RTC Manila,
Branch 15 and Meridian Assurance Corporation, Respondents-Defendants.

2. Rollo, pp. 40-52.

3. Id., at 55.
4. Id., at 19.
5. Id., at 20.
6. The case docketed as CA-G.R. No. 14682 CV and entitled "Pilipinas Bank vs. Meridian
Assurance Corporation."
7. Philippine National Railways vs. CIR of Albay, Branch 1, 83 SCRA 569, 575 (1978).
8. Section 9, Rule 130, REVISED RULES OF COURT.
9. 266 SCRA 561 (1997).
10. Id., at 565.

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