G.R. No. 84358. May 31, 1989.
RAMON CARENAN and SONNY CARENAN, petitioners, vs. HONORABLE COURT OF APPEALS and PASCUAL DE JESUS, respondents.

FACTS

Private respondent Pascual de Jesus filed a complaint for ejectment against petitioners Ramon Carenan and his son Sonny Carenan. De Jesus anchored his claim on a notarized “Kasunduan” (agreement) executed on February 6, 1978, wherein he lent one-half hectare of his land to Ramon Carenan for the crop years 1978-80 under a sharing arrangement “in accordance with existing law,” with the land to be returned after the term. De Jesus alleged the petitioners constructed houses on the land without permission and refused to vacate after the agreement expired.
In their defense, the petitioners claimed they had been tenants of De Jesus since 1969, cultivating the entire one and one-half hectare land on a 50-50 share basis. They alleged the Kasunduan was a sham document, fraudulently procured when De Jesus represented it was only needed for a bank loan application and would not affect their tenancy. At trial, De Jesus and his witnesses testified the petitioners were merely hired laborers, not tenants. The notary public affirmed he read the document to the parties and it reflected their true agreement. Ramon Carenan testified for the defense, but his direct examination was never completed, and his testimony was neither cross-examined nor formally offered in evidence.

ISSUE

Whether the Court of Appeals correctly applied the parol evidence rule to uphold the Kasunduan and reverse the trial court’s finding of a tenancy relationship.

RULING

The Supreme Court affirmed the decision of the Court of Appeals, upholding the Kasunduan under the parol evidence rule. The rule, under Rule 130, Section 7 of the Rules of Court, presumes that a written agreement contains all its terms and prohibits the introduction of extrinsic evidence to vary those terms, except in specific instances such as when a mistake, fraud, or failure to express the true intent is put in issue by the pleadings.
The Court found the petitioners failed to present clear and convincing evidence to overcome the terms of the notarized Kasunduan, a public instrument enjoying the presumption of regularity. Their claim of fraud rested solely on Ramon Carenan’s incomplete, un-cross-examined, and unoffered testimony, which was insufficient to vitiate the agreement. While a clause in the Kasunduan referring to sharing “in accordance with existing law” could suggest a tenancy arrangement, the record did not substantiate how such sharing was implemented. The Court emphasized that parties cannot selectively invoke a contract’s provisions only when favorable. Furthermore, the constitutional policy of social justice and protection for farmers, while vital, does not apply where, as here, no oppression or deception was proven. The balance of justice must be fair to all parties. Consequently, the petition was denied.