G.R. No.

204289

FERNANDO MANCOL, JR., Petitioner

vs.
DEVELOPMENT BANK OF THE PHILIPPINES, Respondent

DECISION

TIJAM, J.:

Assailed in this Petition for Review on Certiorari1 is the Decision2 dated February 22, 2012 and
Resolution3 dated September 27, 2012 of the Court of Appeals (CA), Visayas Station in CA-G.R.
CEB-CV No. 03030, affirming the Orders dated June 13, 2008,4 November 4, 20085 and April 17,
20096 of the Regional Trial Court (RTC) of Calbayog City, Branch 31 in Civil Case No. 923.

Factual Antecedents

Respondent Development Bank of the Philippines (DBP), scheduled an Invitation to Bid for
Negotiated Sale on October 13, 2004 at the Mezzanine Floor, over a residential lot with a two-storey
building (subject property) covered by TCT No. 2041 located at Navarro Street, Calbayog City, and
with Tax Declaration (TD) Nos. 9901006009317 and 9901006004798 with a purchase price of
₱l,326,000.9

In line with this, Fernando Mancol, Jr. (petitioner) executed a Special Power of Attorney
(SPA)10 appointing his father, Fernando Mancol, Sr. (Mancol, Sr.), to represent and negotiate, on his
behalf, the sale of the subject property. Pursuant to the SPA, Mancol, Sr. signed the Negotiated
Offer to Purchase11 and Negotiated Sale Rules and Procedures/Disposition of Assets on a First-
Come First Served Basis.12 DBP then issued an Official Receipt (O.R.) No. 344001813 dated October
13, 2004, in the name of Fernando R. Mancol, Jr., paid by Fernando M. Mancol, Sr., in the amount
of ₱265,200, as initial payment for the purchase price of the subject property. During the
negotiations, DBP officials allegedly agreed, albeit verbally, to: (1) arrange and effect the transfer of
title of the lot in petitioner's name, including the payment of capital gains tax (CGT); and (2) to get rid
of the occupants of the subject property.14

Petitioner paid the balance in the amount of ₱1,060,800, as evidenced by O.R. No. 344045115 dated
December 10, 2004. Thereafter, DBP, through its Branch Manager Jorge B. Albarillo, executed a
Deed of Absolute Sale,16 in petitioner's favor.

On December 21, 2004, petitioner made a deposit with DBP for the payment of the CGT and
documentary stamp tax (DST) in the amount of ₱99,450. DBP acknowledged the deposit and issued
O.R. No. 3440537.17

Sometime in 2006, DBP reneged on its undertaking based on the oral agreement. DBP returned to
the petitioner all the pertinent documents of the sale and issued a Manager's Check (MC) No.
000095647518 in the amount of ₱99,450.19

In a Letter20 dated February 21, 2006, petitioner through its counsel demanded from DBP to comply
with its verbal undertaking. He returned the MC and all pertinent documents affecting the sale of the
subject property to DBP.
DBP, through its Letter21 dated April 22, 2006, disregarded the subsequent oral agreement and
reminded petitioner that DBP has no obligation to eject the occupants and to cause the transfer of
title of the lot in petitioner's name.

Meanwhile, Mancol, Sr. wrote a Letter22 dated May 15, 2006 to the Bureau of Internal Revenue (BIR)
requesting for a detailed computation of the CGT and DST with penalties and surcharges thereof
affecting the sale of the subject property. The BIR, through its Letter23 dated May 24, 2006 came out
with a detailed computation in the total of ₱160,700.88.

In a Letter24 dated June 2, 2006, petitioner proposed to DBP that he will facilitate the payment of the
CGT and DST but DBP should shoulder the penalties and surcharges. The proposal, however, was
turned down. As of March 7, 2007, the total amount to be paid which is necessary for the transfer of
the title in petitioner's name ballooned to ₱183,553.61 and counting.25

On August 24, 2006, petitioner filed a Complaint26 for damages for breach of contract against DBP
before the RTC of Calbayog City, Branch 31. He prayed that DBP be found to have breached its
obligation with petitioner; that DBP be held liable to pay the aggregate amount of ₱160,700.88 and
surcharges which may be imposed by the BIR at the time of payment; that DBP be ordered to pay
damages and attorney's fees; and that DBP be ordered to return the MC dated February 8, 2006 for
₱99,450.

In its Answer with Counter-Claim,27 DBP alleged that the terms of the

Deed of Absolute Sale stated no condition that DBP will work on the document of transfer and to
eject the occupants thereon.28 Assuming that DBP's officials made such a promise, DBP alleged that
the same would not be possible since the petitioner did not give any money to DBP for other
expenses in going to and from Calbayog City. DBP likewise alleged that it is not the bank's policy to
work for the registration of the instrument of sale of properties.29 DBP further claimed that petitioner's
unilateral act in issuing a check to DBP does not constitute as evidence to prove that DBP assumed
the responsibility of registering the instrument of sale. By way of counterclaim, DBP averred that
petitioner grossly violated the terms and conditions of the agreement of sale.30 Petitioner failed to
pay, reimburse or assume the financial obligation consequent to the initiation and filing of the writ of
possession by DBP against the occupants. Petitioner's failure was contrary to his promise and
assurance that he will pay. Petitioner did not comply with the clear and express provisions of the
Deed of Absolute Sale and of the rules and procedures of sale on negotiation. DBP, thus, prayed
that the complaint be dismissed for lack of jurisdiction and that petitioner be ordered to assume the
burden of initiating the ejectment suit and to pay DBP damages, attorney's fees and cost of suit
amounting to ₱200,000.

On February 20, 2007, the RTC issued an Order31 declaring DBP in default by reason of its counsel's
failure to appear during the pre-trial and to file its pre-trial brief.

Trial ensued.

During the trial, Rodel Villanueva testified32 that he was the one commissioned or ordered by a
certain Atty. Mar De Asis (Atty. De Asis) of DBP, to go to BIR-Catbalogan, and to bring the following
documents: a check worth PhP99,450.00, the amount for the CGT, the title, the TD, and the deed of
sale.33

Mancol, Sr. testified34 that he signed the Negotiated Offer to Purchase and Negotiated Sale Rules
and Procedures/Disposition of Assets on a First-Come First Served Basis on behalf of his son, by
virtue of the SPA.35 He stated that after the execution and delivery of the Deed of Absolute Sale, DBP
verbally agreed to facilitate the transfer of the title, the payment of the CGT, and to cause the
vacation of the occupants of the house and lot. Although he admitted that the verbal agreement
contradicted the negotiated rules and agreement.36 He stated that DBP undertook to get rid of the
occupants, when its lawyer filed an Ex-Parte Motion for Issuance of a Writ of Possession37 dated
January 11, 2005, which is pending in the RTC.38

On April 14, 2008, the R TC Decision39 ruled in favor of the petitioner, and ordered DBP to return to
petitioner the amount of ₱99,450 deposited to it for payment of the CGT and DST; to pay the
surcharges and/or interests on the CGT and DST as may be determined by the BIR from June 12,
2005 up to the date of payment; and to pay the petitioner attorney's fees in the amount of ₱l5,000.
The RTC likewise dismissed DBP's counterclaim.40

Thereafter, DBP moved for the reconsideration41 of the RTC's Decision. DBP alleged, among others,
that the testimonies of Villanueva and Mancol, Sr. were hearsay because their statements were
based on facts relayed to them by other people and not based on their personal knowledge.

On June 13, 2008, the RTC Order42 granted DBP's motion and dismissed petitioner's complaint.

Petitioner moved for the reconsideration43 of the June 13, 2008 Order. For the first time, petitioner
alleged that through his father, Mancol, Sr., he entered into a contemporaneous verbal agreement
with DBP. He argued that since his father was his attorney-in-fact, then his father had personal
knowledge of all transactions involving the sale of the subject property. The motion, however, was
denied in the RTC Order44 dated November 4, 2008. The RTC affirmed with modification its June 13,
2008 Order, to read thus:

WHEREFORE, this court finds no reason to disturb its order dated June 13, 2008, subject only to a
modification that [DBP] is directed to return to the [petitioner], the total amount of ₱99,450.00
deposited to it for the payment of the [CGT] and [DST], with interest of six percent (6%) per
annum from December 21, 2004 until its return to the [petitioner].

SO ORDERED.45

DBP sought reconsideration46 of the RTC Order dated November 4, 2008, which however, was
denied by the RTC in its Order47 dated April 17, 2009. The RTC ruled that DBP has waived its right to
question the return of ₱99,450 to the petitioner since DBP failed to refute such an issue in the RTC
Decision dated April 14, 2008.

Both petitioner48 and DBP49 appealed the RTC Order dated June 13, 2008 and November 4, 2008,
respectively, with the CA.

On February 22, 2012, the CA in its Decision,50 denied both appeals, the dispositive portion of which
reads, thus:

WHEREFORE, in view of the foregoing premises, the appeals filed in this case are hereby DENIED.
The assailed Orders dated June 13, 2008, November 4, 2008 and April 17, 2009 of the [RTC],
Branch 31 of Calbayog City in Civil Case No. 923 are AFFIRMED. Costs to be shouldered equally by
both parties.

SO ORDERED.51
Thereafter, petitioner filed a Motion for Partial Reconsideration,52 while DBP filed a Motion for
Reconsideration,53 seeking the reversal of the CA Decision dated February 22, 2012. Both motions,
however, were denied in the CA Resolution54 dated September 27, 2012.

Henceforth, only the petitioner filed the instant appeal anchored on the following arguments:

I. THE TESTIMONIES OF [PETITIONER'S] WITNESSES, [VILLANUEVA] AND [MANCOL, SR.]

ARE BASED ON PERSONAL KNOWLEDGE AND NOT HEARSAY EVIDENCE, AND THAT THEY
SUFFICIENTI.JY ESTABLISHED THE EXISTENCE AND VALIDITY OF A SUBSEQUENT ORAL
AGREEMENT BETWEEN [PETITIONER] AND DBP TO (1) ARRANGE AND EFFECT THE
TRANSFER OF THE TORRENS TITLE IN THE NAME OF [PETITIONER], INCLUDING PAYMENT
OF [CGT] AND [DSTs], AND (2) TO GET RID OF THE OCCUPANTS IN THE SUBJECT
PROPERTY[;]

II. UNDISPUTED RELEVANT AND MATERIAL EVIDENCE ON RECORD ESTABLISHED THE

EXISTENCE AND VALIDITY OF THE SUBSEQUENT ORAL AGREEMENT BETWEEN MANCOL,
JR. AND DBP, AND THAT TO IGNORE THEM IS TO SANCTION VIOLATION OF MANCOL. JR.'S
DUE PROCESS RIGHTS[; AND]

III. [PETITIONER] IS ENTITLED TO THE PAYMENT OF' MORAL AND EXEMPLARY DAMAGES,
ATTORNEY'S FEES AND COSTS OF SUIT.55

The petition/ails.

The above assignment of errors make it evident that the only issue involved in this appeal is one of
fact: whether or not the testimonies of petitioner's witnesses, Villanueva and Mancol, Sr., should be
given probative value to establish the alleged contemporaneous verbal agreement in the sale
contract, i.e., that DBP bound itself to arrange and effect the transfer of title of the lot in petitioner's
name; and, get rid of the occupants of the subject property.

We answer in the negative.

"The parol evidence rule forbids 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, varying the purport of the written contract."56

This, however, is merely a general rule. Provided that a party puts in issue in its pleading any of the
exceptions in the second paragraph of Rule 130, Section 957 of the Revised Rules on Evidence, a
party may present evidence to modify, explain or add to the terms of the agreement. "Moreover, as
with all possible objections to the admission of evidence, a party's failure to timely object is deemed
a waiver, and parol evidence may then be entertained.58

In the case of Maunlad Savings & Loan Assoc., Inc. v. CA,59 the Court held that:

The rule is that objections to evidence must be made as soon as the grounds therefor become
reasonably apparent. In the case of testimonial evidence, the objection must be made when the
objectionable question is asked or after the answer is given if the objectionable features become
apparent only by reason of such answer, otherwise the objection is waived and such evidence will
form part of the records of the case as competent and complete evidence and all parties are thus
amenable to any favorable or unfavorable effects resulting from the evidence.60 (Citations omitted)
Here, in order to prove the verbal agreement allegedly made by DBP, petitioner invoked the fourth
exception under the parol evidence rule, i.e., the existence of other terms agreed to by the parties or
their successors-in-interest after the execution of the written agreement, by offering the testimonies
of Villanueva and Mancol, Sr.

The bank, however, failed to make a timely objection against the said testimonies during the trial
since DBP was declared in default. Thus, DBP waived the protection of the parol evidence rule.

This notwithstanding, We stress that the admissibility of the testimonial evidence as an exception to
the parol evidence rule does not necessarily mean that it has weight. Admissibility of evidence
should not be confounded with its probative value.

"The admissibility of evidence depends on its relevance and competence, while the weight of
evidence pertains to evidence already admitted and its tendency to convince and persuade."61 The
admissibility of a particular item of evidence has to do with whether it meets various tests by which
its reliability is to be determined, so as to be considered with other evidence admitted in the case in
arriving at a decision as to the truth.62 The weight of evidence is not determined mathematically by
the numerical superiority of the witnesses testifying to a given fact, but depends upon its practical
effect in inducing belief on the part of the judge trying the case.63 "Admissibility refers to the question
of whether certain pieces of evidence are to be considered at all, while probative value refers to the
question of whether the admitted evidence proves an issue."64 "Thus, a particular item of evidence
may be admissible, but its evidentiary weight depends on judicial evaluation within the guidelines
provided by the rules of evidence."65

It is a basic rule in evidence that a witness can testify only on the facts that he knows of his own
personal knowledge, i.e., those which are derived from his own perception.66 A witness may not
testify on what he merely learned, read or heard from others because such testimony is considered
hearsay and may not be received as proof of the truth of what he has learned, read or
heard.67 Hearsay evidence is evidence, not of what the witness knows himself but, of what he has
heard from others; it is not only limited to oral testimony or statements but likewise applies to written
statements.68

The personal knowledge of a witness is a substantive prerequisite for accepting testimonial evidence
that establishes the truth of a disputed fact.69 A witness bereft of personal knowledge of the disputed
fact cannot be called upon for that purpose because his testimony derives its value not from the
credit accorded to him as a witness presently testifying but from the veracity and competency of the
extrajudicial source of his information.70

Guided by these precepts, Villanueva's testimony falls within the category of hearsay evidence.
Contrary to petitioner's claim, Villanueva had no personal inkling as to the contemporaneous verbal
agreement between petitioner and DBP. In fact, there was no such verbal agreement. As admitted
by the petitioner, the alleged verbal agreement was entered into between DBP and Mancol, Sr., by
virtue of the SP A. Villanueva has no personal knowledge of such fact. His testimony related only to
the fact that Atty. De Asis ordered him to go to BIR-Catbalogan, and bring the following documents:
a check worth ₱99,450, the amount for the CGT, title, TD, and the deed of sale. None of Villanueva's
acts would suggest, even remotely, that he personally knew about the verbal agreement.

As correctly pointed out by the CA:

[Villanueva] did not personally witness the perfection of the alleged contemporaneous agreement
between Mancol, Jr. and DBP. Furthermore, he had no personal knowledge of its existence. His
testimony merely touched on the alleged denial by the Revenue Office of the payment of the [CGT]
on the subject property and the subsequent execution of a new deed of conveyance by the DBP. It is
clear then that his testimony did not bolster [petitioner's] allegation to any degree.71

The same conclusion can be drawn from Mancol, Sr.'s testimony. Although the records show that by
virtue of an SP A executed by the petitioner, Mancol, Sr. signed the Negotiated Offer to Purchase,
including the Negotiated Sale Rules and Procedures/Disposition of Assets on a First-Come First
Served Basis, and that he made the initial payment for the sale, there is dearth of evidence to prove
that indeed, he personally entered into a verbal agreement with DBP. Upon being asked what
transpired after the delivery of the Deed of Absolute Sale, Mancol, Sr. simply answered that DBP
agreed to undertake the transfer of title of the lot, and to oust the occupants. There was no mention
as to who actually and personally appeared before DBP or any of its officials in order to forge the
alleged verbal agreement. Thus:

(DIRECT EXAMINATION by Atty. Elino Chin, counsel for

Witness: [Mancol, Sr.])

xxxx

ATTY. CHIN

Q After the delivery of this Exh. "H'', what transpired?

A The bank agreed to facilitate the transfer of the title and the payment of the [CGT] to get rid of the
present occupants of the house and lot.

Q You said that the bank agreed, is that in writing?

A Only verbal.

Q That does not contradict the negotiated rules and agreement?

A Yes, but there was a verbal undertaking for them to do what was agreed upon.

x x x x.72

Additionally, the RTC aptly observed that:

[N]owhere in the records would also reveal that the agreement to arrange and effect the transfer of
title over the subject lot was entered into between [DBP] and [Mancol, Sr.], for and on behalf of the
[petitioner].

x x x The [SPA] authorizes [Mancol, Sr.] to represent the [petitioner] and negotiate before the DBP,
Catarman Branch on the invitation to bid on he sale of the lot covered by TCT No. 2041 scheduled
on October 13, 2004, as well as to sign or execute and receive any paper or document necessary for
said purposes. This explains why it was Mancol, Sr. who signed the Negotiated Offer to Purchase
and the Negotiated Sale Rules and Procedure, and who paid to DBP the initial payment of the
purchase price on October 13, 2004 in [petitioner's] behalf. It was not established however whether
the subsequent payments and other transactions, including the act of entering into an oral
agreement with [DBP] that it will effect the transfer of the subject title, were also carried out by
Fernando Mancol, Sr. in behalf of [petitioner].
The [petitioner] fails [sic] to show with whom the [DBP] agreed to arrange and effect the transfer of
the title in his name. Thus, as there is no showing that it was [Mancol, Sr.] who entered into such
1âwphi1

agreement with [DBP] or that he was personally present during the perfection of the agreement and
witnessed the same, any statement from the latter as to the circumstances relative to the perfection
of such oral agreement would indeed be hearsay.73

Assuming for argument's sake that Mancol, Sr., on behalf of petitioner, entered into a verbal
agreement with DBP, such agreement would remain unenforceable. Despite petitioner's insistence,
the act of entering into a verbal agreement was not stipulated in the SPA. The authority given to
Mancol, Sr. was limited to representing and negotiating, on petitioner's behalf, the invitation to bid on
the sale of the subject lot, which is specifically worded as follows:

I, FERNANDO R. MANCOL, JR., xxx by these presents do hereby name, constitute and appoint my
father Fernando M. Manco, Sr., as true and lawful attorney-in-fact, for me, in my name, place and to
do and perform the following:

1. To represent and negotiate before the DBP Catarman Branch regarding the INVITATION TO BID
FOR NEGOTIATED SALE scheduled on October 13, 2004 at the Mezzanine Floor, the subject
Residential Lot with two storey building (TCT No. 2041) located at Navarro Street, Calbayog City;
and

2. To sign, or execute and receive any paper or document necessary for the above purpose.

x x x x.74

There is nothing in the language of the SP A from which We could deduce the intention of petitioner
to authorize Mancol, Sr. to enter into a verbal agreement with DBP. Indeed, it has been held that
"[w]here powers and duties are specified and defined in an instrument, all such powers and duties
are limited and are confined to those which are specified and defined, and all other powers and
duties are excluded."75 Clearly, the power to enter into a verbal agreement with DBP is conspicuously
inexistent in the SPA.

To adopt the intent theory advanced by petitioner, in the absence of clear and convincing evidence
to that effect, would run afoul of the express tenor of the SPA. It would likewise be contrary to "the
rule that a power of attorney must be strictly construed and pursued. The instrument will be held to
grant only those powers which are specified therein, and the agent may neither go beyond nor
deviate from the power of attorney."76

It is axiomatic that this Court will not review, much less reverse, the factual findings of the CA,
especially where, as in this case, such findings coincide with those of the trial court, since this Court
is not a trier of facts.

All told, therefore, the Court finds no reason or basis to grant the petition.

WHEREFORE, the petition is DENIED. The Decision dated February 22, 2012 and Resolution dated
September 27, 2012 of the Court of Appeals, Visayas Station in CA-G.R. CEB-CV No. 03030
are AFFIRMED.

SO ORDERED.
NOEL GIMENEZ TIJAM
Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice
Chairperson

TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

FRANCIS H. JARDELEZA
Associate Justice

CERTIFICATION

Pursuant to the Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Court’s Division.

MARIA LOURDES P.A. SERENO

Chief Justice