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FERNANDO MANCOL v. DEVELOPMENT BANK OF PHILIPPINES

FACTS:

The case involves the respondent, Development Bank of the Philippines (DBP), scheduling an Invitation to Bid for a property. The petitioner entered into a verbal agreement with DBP, through his father as his attorney-in-fact, for the transfer of title, payment of capital gains tax (CGT), and eviction of occupants. The petitioner deposited money with DBP for the payment of CGT and documentary stamp tax (DST). The RTC initially ruled in favor of the petitioner, but upon DBP's motion for reconsideration, the RTC reversed its decision and dismissed the petitioner's complaint. The petitioner filed a motion for reconsideration, claiming the existence of a verbal agreement, but this was denied by the RTC. Both parties appealed to the Court of Appeals (CA), which affirmed the RTC's decision. The petitioner filed an appeal before the Supreme Court, arguing that the testimonies of his witnesses establish the existence and validity of the verbal agreement.

ISSUES:

  1. Whether or not the testimonies of petitioner's witnesses should be given probative value to establish the alleged verbal agreement between petitioner and DBP.

  2. Whether or not DBP waived the protection of the parol evidence rule.

  3. Whether the testimony of a witness without personal knowledge of a disputed fact can be considered as evidence.

  4. Whether the witnesses in this case had personal knowledge of the alleged verbal agreement between petitioner and DBP.

  5. Whether the agent had the power to enter into a verbal agreement with DBP

  6. Whether the power of attorney must be strictly construed and pursued

RULING:

  1. The testimonies of petitioner's witnesses should not be given probative value to establish the alleged verbal agreement between petitioner and DBP. The parol evidence rule prohibits any addition to or contradiction of the terms of a written agreement by testimony or other evidence purporting to show that different terms were agreed upon by the parties. The rule allows exceptions, such as the existence of other terms agreed to by the parties or their successors-in-interest after the execution of the written agreement. In this case, the bank, DBP, failed to make a timely objection against the testimonies during the trial and, therefore, waived the protection of the parol evidence rule. However, the admissibility of the testimonial evidence does not necessarily mean it has weight. The weight of evidence depends on its practical effect in inducing belief on the part of the judge trying the case.

  2. DBP waived the protection of the parol evidence rule by failing to make a timely objection against the testimonies during the trial.

  3. The testimony of a witness without personal knowledge of a disputed fact cannot be considered as evidence. Testimonial evidence must be based on the witness's personal knowledge rather than hearsay information. The value and credibility of a witness's testimony are derived from the veracity and competency of the extrajudicial source of their information.

  4. The witnesses in this case did not have personal knowledge of the alleged verbal agreement between petitioner and DBP. Their testimonies only touched upon other matters and did not provide any information or evidence to support the existence of a verbal agreement.

  5. The power to enter into a verbal agreement with DBP is not specified in the special power of attorney (SPA), therefore it is inexistent.

  6. The power of attorney must be strictly construed and pursued. The agent cannot go beyond or deviate from the powers specified in the SPA.

PRINCIPLES:

  • Testimonial evidence must be based on the personal knowledge of the witness. Hearsay information is not admissible as evidence.

  • The value and credibility of a witness's testimony are derived from the veracity and competency of the extrajudicial source of their information.

  • A witness without personal knowledge of a disputed fact cannot be called upon to establish the truth of that fact.

  • Powers and duties specified in an instrument are limited to those that are defined and all other powers and duties are excluded.

  • A power of attorney must be strictly construed and pursued. The agent may not go beyond or deviate from the powers specified in the power of attorney.

  • The Supreme Court will not review or reverse factual findings of the Court of Appeals and trial court, especially if their findings coincide. The Supreme Court is not a trier of facts.