Lapu Lapu vs. Court of Appeals

LAPULAPU FOUNDATION, INC. and ELIAS Q. TAN vs. COURT OF APPEALS (Seventeenth (Seventeen th Division) Divisio n) and ALLIED BANIN! CORP. CORP.

G.R. No. 126006. January 29, 2004 By: Dianne D. Salto

DOCTRINE"

Eviden Evidence ce of a prior prior or contem contempor porane aneous ous verbal verbal agreem agreement ent is genera generally lly not  admissible to vary, contradict or defeat the operation of a valid contract. While  parol evidence is admiss admissibl ible e to explai explain n the meaning meaning of writte written n contr contract acts, s, it  cann cannot ot serv serve e the the purp purpos ose e of inco incorp rpor orat atin ing g into into the the cont contra ract ct addi additi tion onal al contemporaneous conditions which are not mentioned at all in writing, unless there there has been fraud fraud or mistak mistake. e. No such such allega allegatio tion n had been been made made by the  petitioners in this case. FACTS"

Sometime Sometime in 1977, 1977, Elias . !an, t"en #resi$ent #resi$ent o% &a'ula'u &a'ula'u (oun$at (oun$ation, ion, )n*., )n*., o+taine$ %our loans %rom llie$ Ban-in /or'oration *oere$ +y %our 'romissory note notes s in t"e t"e amou amount nts s o% #100 #100,0 ,000 00 ea*" ea*".. s o% 2 Janu Januar ary y 19 1979 79,, t"e t"e enti entire re o+liation amounte$ to #49,66.61 an$ $es'ite $eman$s ma$e on t"em +y t"e Ban-, !an !an an$ t"e %oun$ation %aile$ to 'ay t"e same. !"e Ban- 3as *onstraine$ to le 3it" t"e Reional !rial /ourt o% /e+u /ity, Bran*" 1, a *om'laint see-in 'aym 'aymen entt +y !an an$ an$ t"e t"e %oun %oun$a $ati tion on,, 5oint 5ointly ly an$ an$ soli soli$a $ari rily ly,, o% t"e t"e sum sum o%  #49,66 #49,66.61 .61 re'resent re'resentin in t"eir loan o+liation o+liation,, e*lusi e*lusie e o% interests, interests, 'enalty 'enalty *"ares, attorneys %ees an$ *osts. )n its ans3er to t"e *om'laint, t"e (oun$ation $eni $enie$ e$ in*u in*urr rrin in  in$e in$e+t +te$ e$ne ness ss %rom %rom t"e t"e BanBan- alle allei in n t"at t"at t"e t"e loan loans s 3ere 3ere o+taine$ +y !an in "is 'ersonal *a'a*ity, %or "is o3n use an$ +enet an$ on t"e stren strent" t" o% t"e 'erson 'ersonal al in%or in%ormat mation ion "e %urnis %urnis"e$ "e$ t"e Ban-. Ban-. !"e (oun$ (oun$ati ation on maintaine$ t"at it neer aut"ori8e$ !an to *osin in "is *a'a*ity as its #resi$ent any 'romissory note an$ t"at t"e Ban- %ully -ne3 t"at t"e loans *ontra*te$ 3ere ma$e in !ans 'ersonal 'ersonal *a'a*ity *a'a*ity an$ %or "is o3n use an$ t"at t"e (oun$ation (oun$ation neer +enete$, $ire*tly or in$ire*tly, t"ere%rom.  !"e (oun$ation t"en inter'ose$ a *ross*laim aainst !an !an allein t"at "e, "ain e*ee$e$ "is aut"ority, s"oul$ +e solely lia+le %or sai$ loans, an$ a *ounter*laim aainst t"e Ban- %or $amaes an$ attorneys %ees. (or "is 'art, !an a$mitte$ t"at "e *ontra *ontra*te *te$ $ t"e loans loans %rom %rom t"e BanBan- in "is 'erson 'ersonal al *a'a* *a'a*ity ity. !"e 'artie 'arties, s, "o3eer, aree$ t"at t"e loans 3ere to +e 'ai$ %rom t"e 'ro*ee$s o% !ans !ans s"ares o% *ommon sto*-s in t"e &a'ula'u )n$ustries /or'oration, a real estate rm. !"e loans 3ere *oere$ *oere$ +y 'romisso 'romissory ry notes 3"i*" 3ere 3ere automati* automati*ally ally rene3a+l rene3a+le e ;rolle$oer