PIONEER SAVINGS & LOAN BANK, PETITIONER, VS. THE HONORABLE COURT OF APPEALS AND MANUEL P. SANTOS, RESPONDENTS.

This petition for review seeks the reversal of the decision of
the Court of Appeals in CA G.R. CV No. 26670, promulgated on 30 April 1992^[1]
which affirmed in toto the judgment of the Regional Trial Court,
Branch 142, Makati, Metro Manila in Civil Case No. 10311, ordering, among other
things, delivery to therein defendant (herein private respondent) of the motor
vehicle, subject of the complaint for delivery of personal property filed by
petitioner against private respondent Manuel F. Santos.

Respondent appellate court summarized the facts of the case as
follows:

“PLAINTIFF Pioneer Savings and Loan Bank acquired ownership
over a motor vehicle by virtue
of a Deed of Sale (Exhibit
‘B’), executed by and between Finasia Investment and Finance Corporation
and the plaintiff bank. Said motor
vehicle is specifically described as follows: make: Toyota Corolla; type: 4-door Sedan; Motor No.: 4K-1489878; Serial No. KE70-9101485; Plate
No. PBZ-784; Model 1982; and color: Mint Green.

SUBSEQUENTLY, defendant Manuel Santos, in his capacity as manager
of plaintiff bank’s General Services Department, was given the privilege to use
and possess the aforementioned vehicle coterminous with his employment. In a regular board meeting of plaintiff
Pioneer Savings & Loan Bank held on June 28, 1984 at its principal office,
the Board unanimously passed Resolution No. 26, Series of 1984, authorizing any
two among the President, Arturo G. Eudela, and the two First Vice Presidents
namely: Francisco Pangilinan and
Antonio M. Siojo, to jointly sign any deed or contract involving the sale,
transfer or conveyance of bank’s assets or properties, pursuant to the
recommendation of the Executive Committee (Exhibit ‘C’). Pursuant to said authority, the plaintiff
bank, through its President, Arturo Eudela and First Vice President, Atty.
Francisco S. Pangilinan, for a consideration of P40,000.00 in cash actually
received from defendant Manuel Santos in the presence of Noel Pineda, a bank
employee, sold, transferred and conveyed unto the defendant the afore-described
motor vehicle, free from all liens and
encumbrances. Said document of sale is
duly notarized.”^[2]

Sometime in August 1984, respondent Santos ceased to be employed
with petitioner bank. He took the car
with him. On 12 April 1985, petitioner
filed a complaint against respondent Santos for recovery of the motor vehicle,
with a prayer for the issuance of a writ of replevin. Upon posting of a replevin bond by petitioner, the Regional Trial
Court of Makati, Branch 142, issued an order of seizure and the subject car was
thus delivered to petitioner.

After trial, the lower court rendered judgment in favor of
respondent Santos, the dispositive part of which reads as follows:

“Premises considered, the Court hereby renders judgment in
favor of the defendant, ordering the plaintiff:

1.  to deliver to the
defendant the subject motor vehicle complete with its battery and the four tire
replacement;

2.  to pay the defendant
P10,000.00 as moral damages and P10,000.00 as exemplary damages;

3. to pay the defendant
the sum of P10,000.00 as and for attorney’s fees;

4.  to pay the defendant
P2,000.00 as litigation expenses.

Should the motor vehicle no longer be
available, or in defendant’s estimation already in a determinated or
dilapidated condition, the defendant has the option to refuse to accept the
motor vehicle, in which case the plaintiff shall pay to the defendant the sum
of P40,000.00 with interest at the rate of 12% per annum from June 14, 1985
until fully paid.

Cost against the plaintiff.”^[3]

As aforestated, this decision was
affirmed in toto by respondent Court of Appeals. Hence, this petition for review on certiorari
under Rule 45 of the Rules Court.

In this petition, the main contention of the petitioner is that
there was actually no consideration in the sale of the motor vehicle to
respondent Santos. The petitioner
alleges that the deed of sale merely served as security for the time deposit
placements of private respondent’s relatives with the petitioner bank which was
then undergoing financial difficulties and was under consideration for closure
by the Central Bank of the Philippines. Petitioner avers that the “underlying agreement,” a special
arrangement between petitioner and respondent Santos was that in the event
private respondent’s relatives failed to recover their time deposits due to the
bank’s closure, then private respondent could keep the car as recompense.

According to petitioner, the relatives of private respondent were
able to recover their time deposit placements, through the Philippine Deposit
Insurance Corp. (PDIC) after petitioner bank was placed under receivership by
the Central Bank of the Philippines so that there was no further reason for
respondent Santos to keep the vehicle in question. Furthermore, petitioner assails the validity of the deed of sale
for not having been duly notarized because the signatories thereto (the two [2]
officers of the bank) never appeared before the notary public who notarized the
document.

It is further contended by petitioner that respondent Court of
Appeals and the trial court should not have discarded the testimonies of the
two (2) officers of petitioner bank, namely, Messrs. Eudela and Pangilinan, who
clearly denied having received payment of P40,000.00 from respondent Santos, and which testimonies were
supported by the bank’s records that did not reflect any entry at all of the
said amount of P40,000.00.

The petition is devoid of merit.

The core issue in this appeal is whether or not the deed of sale
of the vehicle to respondent Santos may be proved or altered by parol evidence
under the Parol Evidence Rule.

In De la Rama vs. Ledesma,^[4] this
Court held:

“It is a well
accepted principle of law that evidence of a prior or contemporaneous verbal
agreement is generally not admissible to vary, contradict or defeat the
operation of a valid instrument. (American Factors (Phil.) Inc. vs. Murphy Tire Corporation, et al.
[C.A.] 49 O.G. 189.)

“While parol evidence is admissible in a variety of ways to
explain the meaning of written contracts, it cannot serve the purpose of
incorporating into the contract additional contemporaneous conditions which are
not mentioned at all in the writing, unless there has been fraud or
mistake. (Yu Tek & Co. v. Gonzales,
29 Phil. 384.)”

We find merit in the private respondent’s contention that
petitioner failed to produce any instrument or written document which would
prove that the deed of sale in question was only a security for the time
deposit placements of respondent’s relatives in the petitioner bank. The two (2) main witnesses for the
petitioner, namely, Messrs. Eudela and Pangilinan, were not mere employees of
the bank. They were bank officers; one
being a lawyer (Pangilinan), and supposed to be steeped in legal and banking
knowledge and practices. As such, they
were expected to know the consequences of their act of signing a document which
outrightly transferred ownership over the subject vehicle in favor of
respondent Santos. They could have
incorporated in the deed of sale (if such was the intention or agreement of the
parties) a stipulation that transfer of ownership and registration of the
vehicle in Santos’ name were conditioned on the failure of his relatives to
recover their time deposit placements in petitioner bank. No such stipulation was incorporated in the
deed of sale which was an outright and unconditional transfer of ownership of
the motor vehicle to respondent Santos.

Lastly, we see neither
reason nor basis for resolving whether or not the deed of sale was duly notarized
as this question is being raised
in this appeal for the first time. It
is settled doctrine that questions
not raised in the lower court cannot be raised for the first time on appeal.^[5]

WHEREFORE, the appealed decision is hereby AFFIRMED
with costs against petitioner.

SO ORDERED.

Narvasa, C.J., (Chairman), Regalado, Nocon, and Puno, JJ., concur.

^[1]
Penned by Justice Jainal D. Rasul with the concurrence of Justices Santiago M.
Kapunan and Oscar M. Herrera.

^[2]
Rollo, pp. 39-40

^[3]
Ibid., pp. 37-38

^[4]
G.R. No. L-28498, July 14, 1986, 143 SCRA 1

^[5]
Anchuelo vs. Intermediate Appellate Court, G.R. No. 71391, January 29,
1987, 147 SCRA 434