Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-47045 November 22, 1988
NOBO S!R"!NE, petitioner,
vs.
T#E COURT O$ !PPE!LS %&' ROMEO (. !CO(E"O, respondents.
Y.G. Villaruz & Associates for petitioner.
Pelagio R. Lachica for private respondent.

REG!L!"O, J.:
he e!tensive discussion and e!haustive dis"uisition in the decision 1 of the respondent Court 2 should
have #ritten finis to this case #ithout further recourse to $s. he assi%n&ent of errors and ar%u&ents
raised in the respondent Court b' herein private respondent, as the petitioner therein, havin% been
correctl' and (ustifiedl' sustained b' said court #ithout an' reversible error in its conclusions, the present
petition &ust fail.
he assailed decision details the facts and proceedin%s #hich spa#ned the present controvers' as
follo#s)
Petitioner brou%ht an action in the Cit' Court of Dipolo% for collection of a su& of
P*,+,-.+* based on pro&issor' notes e!ecuted b' the herein private respondent Nobio
Sardane in favor of the herein petitioner. Petitioner bases his ri%ht to collect on E!hibits
., C, D, E, /, and 0 e!ecuted on different dates and si%ned b' private respondent Nobio
Sardane. E!hibit . is a printed pro&issor' note involvin% Pl,,,-.+* and dated Ma' ,1,
,2-+. E!hibit C is li3e#ise a printed pro&issor' note and denotes on its face that the su&
loaned #as Pl,455.55. E!hibit D is also a printed pro&issor' note dated Ma' 1,, ,2--
involvin% an a&ount of P,55.55. E!hibit E is #hat is co&&onl' 3no#n to the la'&an as
6vale6 #hich reads) 60ood for) t#o hundred pesos 7S%d8 Nobio Sardane6. E!hibit / is
stated in the follo#in% tenor) 6Received fro& Mr. Ro&eo 9co(edo the su& Pesos) #o
housand #o :undred 7P+,+55.558 ON;<, to be paid on or before Dece&ber +*, ,2-*.
7S%d8 Nobio Sardane.6 E!hibit 0 and : are both vales6 involvin% the sa&e a&ount of one
hundred pesos, and dated 9u%ust +*, ,2-+ and Septe&ber ,+, ,2-+ respectivel'.
It has been established in the trial court that on &an' occasions, the petitioner de&anded
the pa'&ent of the total a&ount of P*,+,-.+*. he failure of the private respondent to pa'
the said a&ount pro&pted the petitioner to see3 the services of la#'er #ho &ade a letter
7E!hibit ,8 for&all' de&andin% the return of the su& loaned. .ecause of the failure of the
private respondent to heed the de&ands e!tra(udiciall' &ade b' the petitioner, the latter
#as constrained to brin% an action for collection of su& of &one'.
Durin% the scheduled da' for trial, private respondent failed to appear and to file an
ans#er. On &otion b' the petitioner, the Cit' Court of Dipolo% issued an order dated Ma'
,=, ,2-> declarin% the private respondent in default and allo#ed the petitioner to present
his evidence ex-parte. .ased on petitioner6s evidence, the Cit' Court of Dipolo% rendered
(ud%&ent b' default in favor of the petitioner.
Private respondent filed a &otion to lift the order of default #hich #as %ranted b' the Cit'
Court in an order dated Ma' +4, ,2->, ta3in% into consideration that the ans#er #as filed
#ithin t#o hours after the hearin% of the evidence presented ex-parte b' the petitioner.
9fter the trial on the &erits, the Cit' Court of Dipolo% rendered its decision on Septe&ber
,4, ,2->, the dispositive portion of #hich reads)
IN VIE? O/ :E /ORE0OIN0, (ud%&ent is hereb' rendered in favor of the plaintiff and
a%ainst the defendant as follo#s)
7a8 Orderin% the defendant to pa' unto the plaintiff the su& of /ive housand #o
:undred Seventeen Pesos and #ent'@five centavos 7P*,+,-.+*8 plus le%al interest to
co&&ence fro& 9pril +1, ,2-> #hen this case #as filed in courtA and
7b8 Orderin% the defendant to pa' the plaintiff the su& of P+55.55 as attorne'6s fee and to
pa' the cost of this proceedin%. )
herein defendant Sardane appealed to the Court of /irst Instance of Ba&boan%a del Norte #hich
reversed the decision of the lo#er court b' dis&issin% the co&plaint and ordered the plaintiff@appellee
9co(edo to pa' said defendant@appellant P*55.55 each for actual da&a%es, &oral da&a%es, e!e&plar'
da&a%es and attorne'6s fees, as #ell as the costs of suit. Plaintiff@appellee then sou%ht the revie# of said
decision b' petition to the respondent Court.
he assi%n&ent of errors in said petition for revie# can be capsuliCed into t#o decisive issues, firstl',
#hether the oral testi&on' for the therein private respondent Sardane that a partnership e!isted bet#een
hi& and therein petitioner 9co(edo are ad&issible to var' the &eanin% of the above&entioned pro&issor'
notesA and, secondl', #hether because of the failure of therein petitioner to cross@e!a&ine therein private
respondent on his sur@rebuttal testi&on', there #as a #aiver of the presu&ption accorded in favor of said
petitioner b' Section =, Rule = of the Rules of Court.
On the first issue, the then Court of /irst Instance held that Dthe pleadin%s of the parties herein put in
issue the i&perfection or a&bi%uit' of the docu&ents in "uestionD, hence Dthe appellant can avail of the
parol evidence rule to prove his side of the case, that is, the said a&ount ta3en b' hi& fro& appellee is or
#as not his personal debt to appellee, but e!penses of the partnership bet#een hi& and appellee.D
Conse"uentl', said trial court concluded that the pro&issor' notes involved #ere &erel' receipts for the
contributions to said partnership and, therefore, upheld the clai& that there #as a&bi%uit' in the
pro&issor' notes, hence parol evidence #as allo#able to var' or contradict the ter&s of the represented
loan contract.
he parol evidence rule in Rule ,15 provides)
Sec. -. Evidence of ritten agree!ents.E?hen the ter&s of an a%ree&ent have been
reduced to #ritin%, it is to be considered as containin% all such ter&s, and, therefore,
there can be, bet#een the parties and their successors in interest, no evidence of the
ter&s of the a%ree&ent other than the contents of the #ritin% e!cept in the follo#in%
cases)
7a8 ?here a &ista3e or i&perfection of the #ritin% or its failure to e!press the the true
intent and a%ree&ent of the parties, or the validit' of the a%ree&ent is put in issue b' the
pleadin%sA
7b8 ?hen there is an intrinsic a&bi%uit' in the #ritin%.
9s correctl' pointed out b' the respondent Court the e!ceptions to the rule do not appl' in this case as
there is no a&bi%uit' in the #ritin%s in "uestion, thus)
In the case at bar, E!hibits ., C, and D are printed pro&issor' notes containin% a
pro&ise to pa' a su& certain in &one', pa'able on de&and and the pro&ise to bear the
costs of liti%ation in the event of the private respondent6s failure to pa' the a&ount loaned
#hen de&anded e!tra(udiciall'. ;i3e#ise, the vales denote that the private respondent is
obli%ed to return the su& loaned to hi& b' the petitioner. On their face, nothin% appears
to be va%ue or a&bi%ous, for the ter&s of the pro&issor' notes clearl' sho# that it #as
incu&bent upon the private respondent to pa' the a&ount involved in the pro&issor'
notes if and #hen the petitioner de&ands the sa&e. It #as clearl' the intent of the parties
to enter into a contract of loan for ho# could an educated &an li3e the private respondent
be deceived to si%n a pro&issor' note 'et intendin% to &a3e such a #ritin% to be &ere
receipts of the petitioner6s supposed contribution to the alle%ed partnership e!istin%
bet#een the partiesF
It has been established in the trial court that, the private respondent has been en%a%ed in
business for "uite a lon% period of ti&e@@as o#ner of the Sardane ruc3in% Service,
enterin% into contracts #ith the %overn&ent for the construction of #harfs and sea#allA
and a &e&ber of the Cit' Council of Dapitan 7SN, Gul' +5, ,2->, pp. *-@*=8."#re$$
an%&'() It indeed puCCles us ho# the private respondent could have been &isled into
si%nin% a docu&ent containin% ter&s #hich he did not &ean the& to be. ...
!!! !!! !!!
he private respondent ad&itted durin% the cross@e!a&ination &ade b' petitioner6s
counsel that he #as the one #ho #as responsible for the printin% of E!hibits ., C, and D
7SN, Gul' +=, ,2->, p. >48. :o# could he purportedl' rel' on such a fli&s' prete!t that
the pro&issor' notes #ere receipts of the petitioner6s contributionF 4
he Court of 9ppeals held, and ?e a%ree, that even if evidence aliunde other than the pro&issor' notes
&a' be ad&itted to alter the &eanin% conve'ed thereb', still the evidence is insufficient to prove that a
partnership e!isted bet#een the private parties hereto.
9s &ana%er of the *asnig Sarcado naturall' so&e de%ree of control over the operations and &aintenance
thereof had to be e!ercised b' herein petitioner. he fact that he had received *5H of the net profits does
not conclusivel' establish that he #as a partner of the private respondent herein. 9rticle ,->2748 of the
Civil Code is e!plicit that #hile the receipt b' a person of a share of the profits of a business is pri!a facie
evidence that he is a partner in the business, no such inference shall be dra#n if such profits #ere
received in pa'&ent as #a%es of an e&plo'ee. /urther&ore, herein petitioner had no voice in the
&ana%e&ent of the affairs of the *asnig. $nder si&ilar facts, this Court in the earl' case of +ortis vs.
Gutierrez ,er!anos, 5 in den'in% the clai& of the plaintiff therein that he #as a partner in the business of
the defendant, declared)
his contention cannot be sustained. It #as a &ere contract of e&plo'&ent. he plaintiff
had no voice nor vote in the &ana%e&ent of the affairs of the co&pan'. he fact that the
co&pensation received b' hi& #as to be deter&ined #ith reference to the profits &ade
b' the defendant in their business did not in an' sense &a3e hi& a partner therein. ...
he sa&e rule #as reiterated in -astida vs. .enzi & /o.0 1nc.0 et al. * #hich involved the sa&e factual
and le%al &ilieu.
here are other considerations noted b' respondent Court #hich ne%ate herein petitioner6s pretension
that he #as a partner and not a &ere e&plo'ee indebted to the present private respondent. hus, in an
action for da&a%es filed b' herein private respondent a%ainst the North Ba&boan%a i&ber Co., Inc.
arisin% fro& the operations of the business, herein petitioner did not as3 to be (oined as a part' plaintiff.
9lso, althou%h he contends that herein private respondent is the treasurer of the alle%ed partnership, 'et it
is the latter #ho is de&andin% an accountin%. he advertence of the Court of /irst Instance to the fact that
the casco bears the na&e of herein petitioner disre%ards the findin% of the respondent Court that it #as
(ust a concession since it #as he #ho obtained the en%ine used in the Sardaco fro& the Depart&ent of
;ocal 0overn&ent and Co&&unit' Develop&ent. /urther, the use b' the parties of the pronoun DourD in
referrin% to Dour *asnig, our catchD, Dour depositD, or Dour boserosD #as &erel' indicative of the
ca&araderie and not evidentiar' of a partnership, bet#een the&.
he fore%oin% factual findin%s, #hich belie the further clai& that the aforesaid pro&issor' notes do not
e!press the true intent and a%ree&ent of the parties, are bindin% on $s since there is no sho#in% that
the' fall #ithin the e!ceptions to the rule li&itin% the scope of appellate revie# herein to "uestions of la#.
On the second issue, the pertinent rule on actionable docu&ents in Rule =, for read' reference, reads)
Sec. =. ,o to contest genuineness of such docu!ents.E?hen an action or defense is
founded upon a #ritten instru&ent, copied in or attached to the correspondin% pleadin%
as provided in the precedin% section, the %enuineness and due e!ecution of the
instru&ent shall be dee&ed ad&itted unless the adverse part', under oath, specificall'
denies the&, and sets forth #hat he clai&s to be the factsA but this provision does not
appl' #hen the adverse part' does not appear to be a part' to the instru&ent or #hen
co&pliance #ith an order for the inspection of the ori%inal instru&ent is refused.
he record sho#s that herein petitioner did not den' under oath in his ans#er the authenticit' and due
e!ecution of the pro&issor' notes #hich had been dul' pleaded and attached to the co&plaint, thereb'
ad&ittin% their %enuineness and due e!ecution. Even in the trial court, he did not at all "uestion the fact
that he si%ned said pro&issor' notes and that the sa&e #ere %enuine. Instead, he presented parol
evidence to var' the i&port of the pro&issor' notes b' alle%in% that the' #ere &ere receipts of his
contribution to the alle%ed partnership.
:is ar%u&ents on this score reflect a &isapprehension of the rule on parol evidence as distin%uished fro&
the rule on actionable docu&ents. 9s the respondent Court correctl' e!plained to herein petitioner, #hat
he presented in the trial Court #as testi&onial evidence that the pro&issor' notes #ere receipts of his
supposed contributions to the alle%ed partnership #hich testi&on', in the li%ht of Section -, Rule ,15,
could not be ad&itted to var' or alter the e!plicit &eanin% conve'ed b' said pro&issor' notes. On the
other hand, the presu&ed %enuineness and due e!ecution of said pro&issor' notes #ere not affected,
pursuant to the provisions of Section =, Rule =, since such aspects #ere not at all "uestioned but, on the
contrar', #ere ad&itted b' herein petitioner.
Petitioner6s invocation of the doctrines in Yu /huc20 et al. vs. 3ong Li Po, 7 #hich #as reiterated in
/entral 4uret5 & 1nsurance /o. vs. /. 6. ,odges0 et al. 8 does not sustain his thesis that the herein
private respondent had D#aived the &antle of protection %iven hi& b' Rule =, Sec. =D. It is true that such
i&plied ad&ission of %enuineness and due e!ecution &a' be #aived b' a part' but onl' if he acts in a
&anner indicative of either an e!press or tacit #aiver thereof. Petitioner, ho#ever, either overloo3ed or
i%nored the fact that, as held in Yu /huc20 and the sa&e is true in other cases of Identical factual settin%s,
such a findin% of #aiver is proper #here a case has been tried in co&plete disre%ard of the rule and the
plaintiff havin% pleaded a docu&ent b' cop', presents oral evidence to prove the due e!ecution of the
docu&ent and no ob(ections are &ade to the defendant6s evidence in refutation. his situation does not
obtain in the present case hence said doctrine is obviousl' inapplicable.
Neither did the failure of herein private respondent to cross@e!a&ine herein petitioner on the latter6s sur@
rebuttal testi&on' constitute a #aiver of the aforesaid i&plied ad&ission. 9s found b' the respondent
Court, said sur@rebuttal testi&on' consisted solel' of the denial of the testi&on' of herein private
respondent and no ne# or additional &atter #as introduced in that sur@rebuttal testi&on' to e!onerate
herein petitioner fro& his obli%ations under the aforesaid pro&issor' notes.
On the fore%oin% pre&ises and considerations, the respondent Court correctl' reversed and set aside the
appealed decision of the Court of /irst Instance of Ba&boan%a del Norte and affir&ed in full the decision
of the Cit' Court of Dipolo% Cit' in Civil Case No. 9@,=1=, dated Septe&ber ,4, ,2->.
.elatedl', in his &otion for reconsideration of said decision of the respondent Court, herein petitioner, as
the private respondent therein, raised a third unresolved issue that the petition for revie# therein should
have been dis&issed for lac3 of (urisdiction since the lo#er Court6s decision did not affir& in full the
(ud%&ent of the Cit' Court of Dipolo%, and #hich he clai&ed #as a sine 7ua non for such a petition under
the la# then in force. :e raises the sa&e point in his present appeal and ?e #ill #aive the procedural
technicalities in order to put this issue at rest.
Parentheticall', in that sa&e &otion for reconsideration he had sou%ht affir&ative relief fro& the
respondent Court pra'in% that it sustain the decision of the trial Court, thereb' invo3in% and sub&ittin% to
its (urisdiction #hich he #ould no# assail. /urther&ore, the ob(ection that he raises is actuall' not one of
(urisdiction but of procedure. 9
9t an' rate, it #ill be noted that petitioner anchors his said ob(ection on the provisions of Section +2,
Republic 9ct +2> as a&ended b' Republic 9ct *411 effective Septe&ber 2, ,2>=. Subse"uentl', the
procedure for appeal to the Court of 9ppeals fro& decisions of the then courts of first instance in the
e!ercise of their appellate (urisdiction over cases ori%inatin% fro& the &unicipal courts #as provided for b'
Republic 9ct >51,, a&endin% Section 4* of the Gudiciar' 9ct effective 9u%ust 4, ,2>2. he re"uire&ent
for affir&ance in full of the inferior court6s decision #as not adopted or reproduced in Republic 9ct >51,.
9lso, since Republic 9ct >51, failed to provide for the procedure or &ode of appeal in the cases therein
conte&plated, the Court of 9ppeals en *anc provided thereof in its Resolution of 9u%ust ,+, ,2-,, b'
re"uirin% a petition for revie# but #hich also did not re"uire for its availabilit' that the (ud%&ent of the
court of first instance had affir&ed in full that of the lo#er court. Said &ode of appeal and the procedural
re"uire&ents thereof %overned the appeal ta3en in this case fro& the aforesaid Court of /irst Instance to
the Court of 9ppeals in ,2--. 10 :erein petitioner6s plaint on this issue is, therefore, devoid of &erit.
?:ERE/ORE, the (ud%&ent of the respondent Court of 9ppeals is 9//IRMED, #ith costs a%ainst herein
petitioner.
SO ORDERED.
.elencio-,errera 8/hairperson90 Paras0 Padilla and 4ar!iento0 ::.0 concur.

$oo+&o+e,
, Penned b' 0utierreC, :. E., G., #ith the concurrence of Serrano, M. and .atacan, D.
/l., GG.
+ Special /ifth Division, C9@0.R. No. SP@5>4>4@R, Ro&eo G. 9co(edo, Petitioner0 vs.
6o*io 4ardane and ,on. ;i!alanes -. -uissan, in his capacit' as Gud%e of the Court of
/irst Instance of Ba&boan%a del Norte, Respondents.
1 Rollo, >+@>*.
4 Rollo, -,@-4.
* > Phil. ,55 7,25>8.
> *= Phil. ,== 7,2118.
- 4> Phil. >5= 7,2+48.
= 1= SCR9 ,*2 7,2-,8.
2 See .anila Railroad /o. vs. Attorne5-General, +5 Phil. *+1 7,2,,8.
,5 /or the present procedure, see Sec. ++ ..P. ,+2A Pars. +5, +,, and ++ 7b8 of the
Interi& or ransitional Rules and 0uidelines.