Inciong v.

CA

G.R. No. 96405, 26 June 1996

FACTS:

In February 1983, Rene Naybe took out a loan from Philippine Bank of Communications (PBC)
in the amount of P50k. For that he executed a promissory note in the same amount. Naybe was
able to convince Baldomero Inciong, Jr. and Gregorio Pantanosas to co-sign with him as co-
makers. The promissory note went due and it was left unpaid. PBC demanded payment from
the three but still no payment was made. PBC then sue the three but PBC later released
Pantanosas from its obligations. Naybe left for Saudi Arabia hence can’t be issued summons and
the complaint against him was subsequently dropped. Inciong was left to face the suit. He
argued that that since the complaint against Naybe was dropped, and that Pantanosas was
released from his obligations, he too should have been released.a

ISSUE:

Whether or not Inciong should be held liable.

RULING:

Yes. Inciong is considering himself as a guarantor in the promissory note. And he was basing
his argument based on Article 2080 of the Civil Code which provides that guarantors are
released from their obligations if the creditors shall release their debtors. It is to be noted
however that Inciong did not sign the promissory note as a guarantor. He signed it as a solidary
co-maker.

A guarantor who binds himself in solidum with the principal debtor does not become a solidary
co-debtor to all intents and purposes. There is a difference between a solidary co-debtor and
a fiador in solidum (surety). The latter, outside of the liability he assumes to pay the debt
before the property of the principal debtor has been exhausted, retains all the other rights,
actions and benefits which pertain to him by reason of the fiansa; while a solidary co-debtor
has no other rights than those bestowed upon him.

Because the promissory note involved in this case expressly states that the three signatories
therein are jointly and severally liable, any one, some or all of them may be proceeded against
for the entire obligation. The choice is left to the solidary creditor (PBC) to determine against
whom he will enforce collection. Consequently, the dismissal of the case against Pontanosas
may not be deemed as having discharged Inciong from liability as well. As regards Naybe,
suffice it to say that the court never acquired jurisdiction over him. Inciong, therefore, may only
have recourse against his co-makers, as provided by law.

CASE: HEIRS OF TEODORO DELA CRUZ represented by EDRONEL DELA CRUZ

vs. COURT OF APPEALS, PACIFICO MARQUEZ, FILOMENO and GREGORIO, both
surnamed MADRID
G.R. No. 117384
October 21, 1998

Petitioners seek the reversal of the decision of the Court of Appeals and affirming the
decision of the Regional Trial Court of Isabela.

FACTS:
On November 20, 1986, petitioners filed an action for reconveyance with
damages against private respondents involving a parcel of land situated in Poblacion,
San Mateo, Isabela with a total area of 3,277 square meters. Petitioners assert that the
subject land was bought by their predecessor-in-interest from the private respondents,
Madrid brothers, for P4,000.00 on May 18, 1959. Since then they have been in actual,
physical, continuous and open possession of the property. However in October 1986,
private respondents managed to obtain a Torrens Title over the said land, the Madrids
denied having executed the said Deed of Sale and alleged that the document was
fictitious and falsified. Meanwhile, Pacifico Marquez contends that he is an innocent
purchaser for value of the property having bought the same from the Madrid brothers in
1976.
 During the trial, petitioners were unable to present the original deed of sale since
it was lost. They were constrained to offer, as Exhibit A, a photocopy of the purported
original carbon copy of the deed of sale in an effort to prove the transaction. The trial
court ruled that Exhibit A was inadmissible in evidence for No proof was adduced that
this remaining copy was lost or destroyed, no attempt was done to produce the copies
retained by the notary public although there is a possibility that the same still exist.
Neither was there any proof that the copy sent to the court as required by the notarial
law is unavailable.

The trial court dismissed petitioner’s complaint, declaring the defendants the
lawful owners and ordering the plaintiffs to vacate the portions of Lots 7036-A-1 0-A,
70360A-10-B and 7036-A-10-C.

Court of Appeals AFFIRMED the decision of the RTC rendering its judgment
which ruled that Exhibit A was admissible in evidence for failure of the private
respondents to object when it was offered during the trial, but it had no probative value
to support the allegation of the petitioners that the disputed land was sold to them in
1959.

Failing in their bid to reconsider the decision, the petitioners have filed the
present petition.

ISSUE:
Whether Exhibit A is admissible as evidence?

HELD:
Exhibit A is admitted in evidence, we agree with the Court of Appeals that its
probative value must still meet the various tests by which its reliability is to be
determined. Its tendency to convince and persuade must be considered for admissibility
of evidence should not be confused with its probative value. A cursory glance will
immediately reveal that it was unsigned by any of the parties and undated as to when it
was executed. In other words, Atty. Tabangay’s failure to determine the accuracy of the
carbon copy requested by the petitioner’s predecessor-in-interest renders Exhibit A
unreliable.
Petitioners explanation that these copies were lost or could not be found in the
National Archives was not even supported by any certification from the said office.

It is a well-settled principle that before secondary evidence can be presented, all

duplicates and/or counterparts must be accounted for, and no excuse for the non-
production of the original document itself can be regarded as established until all its
parts are unavailable.

The decision of the Court of Appeals REVERSED and SET ASIDE. Instead,
petitioners are hereby declared as the legal owners of the subject land.

SECURITY BANK & TRUST CO. VS. TRIUMPH LUMBER AND CONSTURCTION CORP.
G.R. NO. 126696, JANUARY 21, 1999

FACTS: Triumph Lumber and Construction Corp (TLCC) is a depositor of Security Bank and
Trust Co (SBTC). TLCC claims that SBTC was grossly negligent in allowing the encashment of
three (3) checks all payable to cash and all drawn against their deposit account with SBTC
despite the forgery of the drawer’s signature. TLCC requested that the amount wrongfully
encashed amounting to a total of P300,000.00 be credited back to their account but despite
demand, SBTC did not heed their request. Further TLCC claims that per findings of the PC
Crime Laboratory, the signatures the authorized signatories of plaintiff were forged. Petitioner
bank alleged that the failure of TLCC to produce the originals of the checks was a fatal omission
inasmuch as there would be no evidentiary basis for the court to declare that the instruments
were forgeries. Further it is of the contention that the opinion of the PC Crime Laboratory
examiner has no weight and deserves no consideration as she did not use as basis of her
analytical study the standard signatures of Chun Yun Kit and Co YokTeng on the specimen
signature cards.
ISSUE/S: 1. Whether or not forgery was duly established.

2. Whether or not there was proper identification of the handwriting of the authorized
signatories.

RULING:

FIRST: No, forgery was not duly established as Section 3, Rule 130 of the Rules of Court was
not complied with by private respondent. The Section explicitly provides that when the subject
of inquiry is the contents of a document, no evidence shall be admissible other than the original
document itself. It was not also shown that the case falls under the exceptions provided in the
Rules allowing mere photocopies. Thus, the original must be presented.

SECOND: The proper procedure in the investigation of a disputed handwriting was not
observed. Thus, the opinion of the Crime Laboratory Examiner could not be given credence.
The rule is that the genuineness of a standard writing may be established by any of the
following: (1) by the admission of the person sought to be charged with the disputed writing
made at or for the purposes of the trial, or by his testimony; (2) by witnesses who saw the
standards written or to whom or in whose hearing the person sought to be charged
acknowledged the writing thereof; (3) by evidence showing that the reputed writer of the
standard has acquiesced in or recognized the same, or that it has been adopted and acted upon
by him in his business transactions or other concerns. The records only showed mere
photocopies of the specimen signatures. Nobody was presented to prove that the specimens
were those of the authorized signatories. The Crime Laboratory examiner never saw the parties
write the specimen signatures, thus she could not be considered to have adequate knowledge
of the genuine signatures of the parties whose signatures on the questioned checks were
claimed to be forged. That knowledge could be obtained either by (a) seeing the person write
some other documents or signatures (ex visuscriptionis); (b) seeing documents otherwise
known to him to have been written by the person in question (ex scriptisolimvisis); or (c)
examining, in or out of court, for the express purpose of obtaining such knowledge, the
documents said to have been written by the person in question (ex comparationescriptorum).
The examiner could not be a witness under the first and the second and even on the third.
Under the third, it is essential that (a) certain specimens of handwriting were seen and
considered by her and (b) they were genuinely written by the person in question. Now, as
stated above, the examiner had no adequate basis for concluding that the alleged specimen
signatures in the long bond paper were indeed the signatures of the parties whose signatures in
the checks were claimed to have been forged. Moreover, we do not think that the alleged
specimens were sufficient in number.

NIA vs. ESTANISLAO GAMIT

[G.R. No. 85869. November 6, 1992.]

Facts:

On 23 January 1985, the Plaintiff Estanislao Gamit (private respondent herein) filed with
the RTC of Roxas, Isabela, a complaint against the defendant National Irrigation Administration
for reformation of contract, recovery of possession and damages, alleging, among others that
in the contract of lease entered into, the real agreement or intention of the parties was only for
the lease of the twenty five (25,000) thousand square meters by defendant at the rate of P0.10
centavos per square meter, for a period of ten (10) years from date of execution with the right
of defendant to purchase the area upon the termination of the lease, on a price certain or
consideration to be negotiated and agreed upon, by and between the parties after the lapse of
the ten (10) year period; That it was not the real agreement or intention of the parties, at least
that of herein plaintiff, to have the rentals paid as forming part of the purchase price later to be
negotiated or agreed upon, much less was it their intention at least on the part of herein
plaintiff, that the price shall not exceed P25,000.00, otherwise, there will be a gross inadequacy
of the purchase price, enough to shock the conscience of man and that of the court; that it was
not also the intention or agreement of the parties, at least that of herein plaintiff, that in case
the lease contract is not renewed after the lapse of the ten (10) year period, for failure of the
parties to make bilateral communication, the lessor or his successors or assigns are deemed to
have allowed continued use of the land in suit without any additional compensation whatsoever
(see stipulation no. 8, contract of lease) and neither was it the true agreement or real intention
of the parties, at least on the part of herein plaintiff, that upon payment of the rental amount of
P25,000.00, herein plaintiff shall be deemed to have conveyed and ceded all his rights and
interest on the subject property, in favor of herein defendant.

RTC ruled in favor of plaintiff and against herein defendant. CA affirmed.

Hence, the present petition for review.

Issue:

Whether or not the court of appeals has properly interpreted the contract.

Held: NO

A perusal of the complaint at bar and the relief prayed for therein shows that this is
clearly a case for reformation of instrument

In order that an action for reformation of instrument as provided in Article 1359 of the
Civil Code may prosper, the following requisites must concur: (1) there must have been a
meeting of the minds of the parties to the contract; (2) the instrument does not express the
true intention of the parties; and (3) the failure of the instrument to express the true intention
of the parties is due to mistake, fraud, inequitable conduct or accident.

Otherwise stated, the complaint at bar alleges that the contract of lease with right to
purchase does not express the true intention and agreement of the parties thereto due to
mistake on the part of the plaintiff (private respondent) and fraud on the part of the defendant
(petitioner), i.e., by unlawfully inserting the stipulations contained in paragraphs 4, 8 and 9 in
said contract of lease. As a general rule, parol evidence is not admissible for the purpose of
varying the terms of a contract. However, when the issue that a contract does not express the
intention of the parties and the proper foundation is laid therefor — as in the present case —
the court should hear the evidence for the purpose of ascertaining the true intention of the
parties. From the foregoing premises, we hold that the trial court erred in holding that the issue
in this case is a question of law and not a question of fact because it merely involves the
interpretation of the contract between the parties. The lower court erred in not conducting a
trial for the purpose of determining the true intention of the parties. It failed to appreciate the
distinction between interpretation and reformation of contracts. While the aim in interpretation
of contracts is to ascertain the true intention of the parties, interpretation is not, however,
equivalent to reformation of contracts. Since the complaint in the case at bar raises the issue
that the contract of lease does not express the true intention or agreement of the parties due to
mistake on the part of the plaintiff (private respondent) and fraud on the part of the defendant
(petitioner), the court a quo should have conducted a trial and received the evidence of the
parties for the purpose of ascertaining the true intention of the parties when they executed the
instrument in question.

PAROL EVIDENCE RULE; EXCEPTION; REMEDY WHEN AGREEMENT FAILS TO EXPRESS

TRUE INTENT AND AGREEMENT OF PARTIES. — 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 terms other than the
contents of the written agreement, except when it fails to express the true intent and
agreement of the parties thereto, in which case, one of the parties may bring an action for the
reformation of the instrument to the end that such true intention may be expressed.

WHEREFORE, the decision of the trial court dated 20 March 1986 as well as the decision
of the Court of Appeals dated 14 November 1988 are hereby SET ASIDE and the case should
be, as it is hereby, REMANDED to the court of origin for further proceedings in accordance with
this decision. Without costs.