Abella vs.

Court of Appeals, 257 SCRA 482

Doctrine:

When parties enter into a contractual agreement and reduce their terms to writing, the written
document shall be deemed conclusive evidence of their mutual intentions, provided that the terms are
clear and unambiguous. In the event of a dispute or disagreement regarding the interpretation of
contractual terms, courts should prioritize the literal meaning of the written provisions, as they
represent the best evidence of the parties' intentions at the time of contracting.

In the case discussed, the doctrine finds application as the Supreme Court prioritized the written receipt
acknowledging payment over oral testimony, emphasizing the clarity and conclusiveness of the written
document in determining the nature of the payment and its implications for the lease contract.

Facts:

Mercedes N. Abella (petitioner) and Conrado Colarina (respondent) entered into a contract of lease for a
portion of a building in Naga City on May 26, 1987.

The lease contract had a duration of four years with a monthly rental of P3,000.

Colarina made improvements to the premises amounting to P68,000.

Colarina stopped paying rent from November 1987 to April 1988.

Abella took possession of the premises on May 1, 1988, with the assistance of the police and barangay
officials.

Colarina filed a case for the enforcement of the lease contract against Abella.

Issue:

Whether or not Colarina violated the lease contract warranting its extrajudicial rescission.

Whether or not possession of the premises may be restored to Colarina.

Ruling:

The Supreme Court ruled in favor of Colarina and reversed the decision of the trial court.

Colarina did not violate the lease contract because he made a payment of P40,000, which was
acknowledged by Abella through a receipt.

The receipt clearly stated that the amount was an advance deposit to answer for any rental that
Colarina may fail to pay.

The Court emphasized that if the terms of a contract are clear and leave no doubt upon the intention of
the contracting parties, the literal meaning of its stipulations shall control.

Abella's oral testimony claiming that the amount was only a "goodwill money" was not as reliable as the
written receipt.
Abella's contention that the receipt should be reformed was rejected, as she was presumed to have
signed it with full knowledge of its contents and import.

The issue of fraud in procuring Abella's signature was not raised in the trial court and lacked evidence.

Abella's rescission of the lease contract was deemed improper.

The second issue was declared moot and academic because the term of the lease contract had already
expired on July 1, 1991.

Colarina no longer had the right to be restored to the possession of the premises.

Ratio:

Contracts should be interpreted based on their clear and literal meaning.

The literal meaning of the stipulations in a contract shall control if the terms are clear and leave no
doubt upon the intention of the contracting parties.

Written or documentary evidence has greater probative value than oral testimony, especially when the
oral testimony is given by a party to the case who has an interest in the outcome.

An issue not raised in the trial court may not be raised for the first time on appeal.

The restoration of possession of the premises was not possible since the term of the lease contract had
already expired.

Note!

In the case presented, the evidence related to Section 2 of Documentary Evidence includes:

Lease Contract: The lease contract signed by Mercedes N. Abella and Conrado Colarina on May 26, 1987,
would be considered documentary evidence. This document contains the terms and conditions agreed
upon by both parties regarding the lease of the premises, including the duration and monthly rental
amount.

Receipt: The receipt issued by Mercedes N. Abella acknowledging the payment of P40,000 by Conrado
Colarina is another piece of documentary evidence. This document serves as proof of the payment made
by Colarina and contains written information regarding the purpose of the payment, which was an
advance deposit to answer for any rental that Colarina may fail to pay.