Gurango vs. Intermediate Appellate Court

A written agreement is conclusive upon the parties under the parol evidence rule, and evidence aliunde is inadmissible to vary its terms, except where the writing suffers from a mutual mistake of fact or intrinsic ambiguity; an alleged unilateral mistake in the date, especially by the agreement's own author, does not bring the case within the exception.

Edward L. Ferreira sold to Amado T. Gurango one booklet of one hundred raffle tickets valued at P500.00 in connection with a Makati Jaycees fund-raising project scheduled for the evening of April 14, 1977 at the Manila Peninsula Hotel. The tickets bore numbers 162501 to 162600. The dispute between the parties centered on the effect of a written agreement they executed regarding the raffle stubs and any prize that might be won.

On January 26, 1977, Edward L. Ferreira sold to Amado T. Gurango one booklet of raffle tickets valued at P500.00, consisting of one hundred tickets numbered 162501 to 162600, in connection with a Makati Jaycees fund-raising project scheduled for the evening of April 14, 1977 at the Manila Peninsula Hotel. At around 10:00 p.m. on April 14, 1977, ticket number 162574, in the name of Armando "Boyet" Gurango, the minor son of petitioners Amado and Ester Gurango, but in the custody or possession of Ferreira, won a Toyota Corolla car.

Amado Gurango alleged that on April 14, 1977, he issued Check No. 00730 dated April 12, 1977 for P300.00 for sixty raffle tickets. He called his cashier, Miriam Burgo, and instructed her to fill up the stubs of the one hundred raffle tickets with the names of his family members before surrendering them to Ferreira's messenger, who would collect the check. When Gurango arrived at his office that afternoon, the cashier gave him the one hundred claim stubs and told him that Ferreira's messenger had taken the check and all the raffle tickets. Gurango instructed the cashier to keep the claim stubs because he was in a hurry to return to Cavite City for the induction of officers and directors of the Cavite Jaycees.

The following morning, April 15, 1977, Ferreira called Gurango to say that he had paid Gurango's remaining unpaid balance of P200.00 to the Makati Jaycees the previous night during the raffle and arranged a meeting for the turnover of the forty claim stubs representing the unpaid balance. During that call, Gurango asked whether any of his tickets had won a car; Ferreira said no Jaycee had won a car. When Ferreira arrived at Gurango's office, Gurango asked again, and Ferreira again answered in the negative. Ferreira then asked for the forty claim stubs. Gurango said he was still willing to honor their previous agreement and tendered a P200.00 check dated April 30, 1977, but Ferreira refused, maintaining that the money he had advanced the previous night would be charged against his company and that he only needed the claim stubs to justify the expense. As Gurango was in a hurry to finish his income tax return, he handed all the claim stubs to Ferreira, who selected forty claim stubs representing the unpaid balance. Ferreira then asked Gurango to put their agreement in writing, which Gurango did on a piece of yellow paper in his own handwriting, dated "14 April 1977," stating that the booklet of Makati JC raffle tickets was worth P500.00; that all stubs in their possession remained their respective shares; that any winning number corresponding to the stub numbers each held would belong solely to that holder without the other claiming co-ownership, even if the name printed on the stub was that of one party or another person; that any holder of the winning stub would be printed as sole winner and owner even if it was in another's name; and that it was a "Gentlemen and Jayceely agreement" both would stick to. Both signed it.

On April 18, 1977, Gurango was shown a copy of the Daily Express and learned that ticket number 162574 had won a Toyota Corolla car, but he was surprised to find that the winning stub was among those taken by Ferreira. That evening, at a meeting of the Metropolitan Jaycees at the Metro Jaycee Clubhouse, Gurango confronted Ferreira about the winning stub. Upon being shown a copy of their agreement, Gurango realized that he had dated it April 14, 1977 instead of April 15, 1977, which he distinctly remembered as the date of execution because it was the last day to file his income tax return; he claimed he must have written the wrong date due to his tight schedule that day.

Ferreira, on the other hand, claimed that on April 12, 1977, Gurango told him he was buying only sixty tickets and offered to return the remaining forty because he needed money for income tax on April 15, 1977; Ferreira accepted and agreed to appropriate the remaining tickets for himself. Consequently, in the morning of April 14, 1977, Gurango turned over the one hundred tickets to be dropped in the "tambiolo" and his P300.00 check for the sixty tickets he had bought. Upon noticing that all the returned tickets were in the name of Gurango or members of his family, Ferreira, during their meeting at the Manila Midtown Ramada Hotel at around 6:00 p.m. on April 14, 1977, asked Gurango to write down their agreement, which Gurango did, as shown by the agreement signed by them on April 14, 1977 (Exhibit "A"). Thereafter, Ferreira and Gurango met at the Metro Jaycee Clubhouse, where Ferreira asked Gurango to comply with their agreement, but Gurango refused and wrote a letter to the Makati Jaycees disclaiming the agreement. Eventually, the car was awarded to petitioners' son. Subsequent demands by Ferreira were ignored.

On August 25, 1977, Ferreira filed a complaint for damages against petitioners with the then Court of First Instance of Rizal, Branch XX, in Civil Case No. 27163. The trial court and the Intermediate Appellate Court reached conflicting findings on when the agreement was executed and whether it was valid; the Intermediate Appellate Court found that the agreement was prepared and signed on April 14, 1977 before the raffle and that, considering the parties' business and social backgrounds, Exhibit A or A-1 was the most practical covenant for their mutual protection before the raffle.

• Fraud in Execution: Petitioners claimed that the agreement was executed through fraud, arguing that Amado Gurango's consent was vitiated and that the written agreement should not be enforced against them.
• Mistake in Date: Petitioners maintained that the agreement was actually executed on April 15, 1977, not April 14, 1977, and that Gurango mistakenly wrote the earlier date because he was hurrying to finish his income tax return; this mistake was offered to contradict the written date.
• Ownership of the Winning Stub: Petitioners asserted that the winning stub was among those taken by Ferreira only as the unpaid balance, and that Ferreira had falsely told Gurango that no Jaycee had won a car.

• Validity and Binding Effect: Respondent Ferreira countered that the agreement was valid and binding, having been prepared and signed by Gurango himself on April 14, 1977 before the raffle.
• No Fraud or Mistake: Respondent maintained that there was no fraud or mistake; Gurango, as the author of the agreement, knew its true intent and the date of execution, and the terms were clear and required no interpretation.
• Ownership of the Prize: Respondent claimed that Gurango had offered to return the remaining forty tickets because he needed money for income tax, that Ferreira accepted and appropriated them, and that under the agreement the holder of the winning stub was the sole owner of the prize.

• Validity of the Written Agreement: Whether the agreement executed between petitioner Amado Gurango and private respondent Edward Ferreira on April 14, 1977 is valid and binding upon the parties.
• Parol Evidence and Mistake: Whether evidence aliunde may be admitted to vary the written agreement on the ground of mistake in its date or fraud in its execution.
• Review of Factual Findings: Whether the Supreme Court may review the factual findings of the Intermediate Appellate Court and the trial court due to conflict in their findings.

• Validity of the Written Agreement: Yes. The agreement is valid and binding; the written terms are conclusive under the parol evidence rule, and no exception applies.
• Parol Evidence and Mistake: No. Evidence aliunde is inadmissible to change the written agreement; the alleged mistake in date is not a mutual mistake of fact, and fraud in execution was not established.
• Review of Factual Findings: Yes. Although only legal questions are generally reviewable, review is proper when the appellate court and trial court have conflicting factual findings.

• Validity of the Written Agreement: The principal issue was the validity of the April 14, 1977 agreement. Section 9, Rule 130 of the Revised Rules of Court provides that when the terms of an agreement have been reduced to writing, the writing is considered as containing all such terms, and no evidence of the terms other than the contents of the writing is admissible between the parties and their successors in interest, except (a) where a mistake or imperfection of the writing, or its failure to express the true intent and agreement of the parties, or the validity of the agreement is put in issue by the pleading, or (b) where there is an intrinsic ambiguity in the writing. Under this provision, the contents of the agreement are conclusive upon the parties, and evidence aliunde is inadmissible to change a valid and enforceable agreement embodied in a document. The Court found no exception applicable. The parties' conflicting claims on the true nature of the agreement were resolved in favor of Ferreira because the terms of the agreement were clear and required no interpretation, and the intention of the parties as expressly specified did not contradict each other. The fact that Gurango himself prepared and wrote the agreement indicated that it was entered into freely and voluntarily, rendering his claim of fraud in its execution unbelievable. As the author, Gurango was presumed to have actual knowledge of the true intent of the parties and the surrounding circumstances, including the date of execution. If the agreement had truly been executed on April 15, 1977, Gurango should have written that date instead of April 14, 1977, since one does not usually forget a date of special significance. It was highly improbable that his consent was given through fraud because he prepared and executed the document himself. The agreement was therefore valid and binding.
• Parol Evidence and Mistake: The alleged mistake in the date did not bring the case within the exception to the parol evidence rule. The mistake contemplated as an exception is one which is a mistake of fact mutual to the parties, and no such mutual mistake was present. The written agreement, including its date, was therefore conclusive, and evidence aliunde could not be admitted to vary it. The claim of fraud was likewise rejected because Gurango authored the document and was presumed to know its true intent and the circumstances of its preparation, including its date.
• Review of Factual Findings: Although only legal questions are generally reviewable by the Supreme Court on appeals from decisions of the Court of Appeals, one exception is when there is a conflict in the factual findings of the Court of Appeals and the trial court. Because the Intermediate Appellate Court and the trial court reached conflicting findings on the agreement and its execution, the Supreme Court could review the factual findings. The appellate court's finding that the agreement was prepared and signed on April 14, 1977 before the raffle was upheld.

• Parol Evidence Rule — When the terms of an agreement have been reduced to writing, the writing is considered as containing all such terms, and no evidence of the terms other than the contents of the writing is admissible between the parties and their successors in interest, except (a) where a mistake or imperfection of the writing, or its failure to express the true intent and agreement of the parties, or the validity of the agreement is put in issue by the pleading, or (b) where there is an intrinsic ambiguity in the writing. The Court applied this rule to hold the written agreement conclusive and to exclude evidence aliunde, because no exception was present.
• Mutual Mistake of Fact as Exception — The mistake contemplated as an exception to the parol evidence rule is one which is a mistake of fact mutual to the parties. The Court applied this doctrine by holding that Gurango's alleged unilateral mistake in dating the agreement did not qualify as a mutual mistake of fact, so the exception did not apply.
• Author of Document Presumed Knowledge — Being the author of the agreement, petitioner is presumed to have actual knowledge of the true intent of the parties and the surrounding circumstance that attended the preparation of the document in question, including the date when said agreement was executed. The Court applied this presumption to reject the claim of fraud and to uphold the agreement's validity.
• Review of Factual Findings by the Supreme Court — As a rule, only legal questions are reviewable by the Supreme Court on appeals from decisions of the Court of Appeals; one exception is when there is a conflict in the factual findings of the Court of Appeals and the trial court. The Court applied this exception because the Intermediate Appellate Court and the trial court reached conflicting findings.

• "When the terms of an agreement have been reduced to writing, it is to be considered as containing all such terms, and, therefore, there can be, between the party and their successors in interest, no evidence of the terms of the agreement other than the contents of the writing, except in the following cases: (a) Where a mistake or imperfection of the writing, or its failure to express the true intent and agreement of the parties, or the validity of the agreement is put in issue by the pleading; (b) When there is an intrinsic ambiguity in the writing." — This is the Court's quotation of Section 9, Rule 130, stating the parol evidence rule and its exceptions.
• "Under the aforementioned provision, when the parties have reduced their agreement in writing, the contents of said agreement are rendered conclusive upon the parties and evidence aliunde is inadmissible to change a valid and enforceable agreement embodied in a document." — This is the ratio on the conclusiveness of written agreements and the exclusion of evidence aliunde.
• "The mistake contemplated as an exception to the parol evidence rule is one which is a mistake of fact mutual to the parties, which is not present in this case." — This defines the exception and explains why petitioner's alleged date mistake did not qualify.
• "Being the author of the agreement, petitioner is presumed to have actual knowledge of the true intent of the parties and the surrounding circumstance that attended the preparation of the document in question including the date when said agreement was executed." — This supports the rejection of the fraud and mistake claims and the finding that the agreement was valid and binding.

• Co vs. Court of Appeals, 193 SCRA 198, 206 — Cited for the exception to the rule that only legal questions are reviewable by the Supreme Court on appeals from decisions of the Court of Appeals, namely, when there is a conflict in factual findings of the Court of Appeals and the trial court; the decision also cites Raneses vs. Intermediate Appellate Court, 187 SCRA 397, and Remolete vs. Tibe, 158 SCRA 138.
• Magellan Manufacturing Marketing Corporation vs. Court of Appeals, 201 SCRA 102 [1991] — Cited for the rule that the mistake contemplated as an exception to the parol evidence rule is a mistake of fact mutual to the parties.

• Section 9, Rule 130, Revised Rules of Court in the Philippines — Provides that when the terms of an agreement have been reduced to writing, the writing is considered as containing all such terms, and no evidence of the terms other than the contents of the writing is admissible between the parties and their successors in interest, except (a) where a mistake or imperfection of the writing, or its failure to express the true intent and agreement of the parties, or the validity of the agreement is put in issue by the pleading, or (b) where there is an intrinsic ambiguity in the writing. The Court applied it to hold the written agreement conclusive and to exclude evidence aliunde, because no exception applied.

Feliciano, Regalado, and Campos, Jr., JJ., concurred. Narvasa, C.J., was on official leave.