G.R. No. L-4976
A. J. EVELAND, plaintiff-appellee, vs. THE EASTERN MINING COMPANY, defendant-appellant.
November 27, 1909

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FACTS:

A. J. Eveland (plaintiff-appellee) sued The Eastern Mining Company (defendant-appellant) to recover $2,705 (U.S. currency) plus interest, based on two causes of action:

1. First Cause of Action: For $125 in unpaid salary as an engineer and general agent from October 15, 1906, to April 15, 1907, at $250 per month.
2. Second Cause of Action: For $2,580 in unpaid salary and necessary expenses incurred from May 1, 1907, to October 25, 1907. Eveland was employed by the defendant to visit the United States in the company’s interest, at a salary of $250 per month plus necessary expenses. He traveled to the U.S. from May 1 to October 15, 1907.

The contract of employment for the second cause of action was established by:
Eveland’s letter (Exhibit B, dated April/August 1906) offering his services as a mining engineer for $250 gold per month, “and all expenses, including proper quarters, food, etc., traveling expenses where necessary, technical and personal services and assistance, etc.”
The defendant’s Board Resolution (Exhibit A, April 29, 1907) employing Eveland as mining engineer and general manager “according to the terms mentioned in the letter of the said A. J. Eveland,” and giving him full powers of attorney to represent the company in the U.S.

Upon Eveland’s return, he submitted an account of his salary and expenses. The defendant’s auditing committee found the expense bill “excessive” but noted that, “with the exception of a few collars spent as tips to servants, etc., the said expenditures have been validly made.” The committee requested Eveland to reduce his account.

The defendant argued that payment was conditional on the company’s financial comfort or the successful outcome/benefit of Eveland’s efforts in the U.S. The lower court found that the company was financially sound and ruled in favor of Eveland, awarding P5,310 (approximately $2,655) with 6% interest. The defendant appealed, claiming the lower court’s findings were not supported by evidence and its conclusions were contrary to law.

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ISSUE:

Whether the clear terms of a written contract for salary and expenses can be varied by parol evidence or made conditional upon the financial condition of the employer or the successful outcome/benefit of the services rendered.

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RULING:

The Supreme Court AFFIRMED the judgment of the lower court.

The Court held that:

1. First Cause of Action: The defendant admitted responsibility for the $125 claimed, so this amount was not in dispute.
2. Second Cause of Action: Exhibits A and B constituted an “absolute offer and an absolute acceptance,” forming a clear and binding contract for Eveland’s employment, salary, and all necessary expenses.
3. Parol Evidence Rule: The attempt by the defendant to introduce evidence suggesting that payment was conditional upon the company’s financial comfort, or the success or benefit of Eveland’s efforts in the U.S., was inadmissible. Such evidence would contradict or vary the clear terms of the written contract, which did not state any such conditions. The lower court correctly applied Section 285 of the Code of Procedure in Civil Actions (parol evidence rule), holding that such evidence should not be allowed to vary the terms of the written agreement.
4. Contractual Obligation: The payment of Eveland’s salary and expenses was not made dependent upon the result of his efforts or whether the company received a direct benefit from his trip. The contract clearly specified a salary and reimbursement of expenses. The auditing committee’s report, while calling expenses “excessive,” acknowledged they were “validly made,” further supporting Eveland’s claim.

Therefore, the Supreme Court found no reason to modify the lower court’s judgment, concluding that the evidence adduced during the trial was sufficient to justify the findings of fact and the application of law.