SALAS v. STA. MESA MARKET CORPORATION [SMMC] AND HEIRS OF DOMINGO
2007 / Corona / Public documents
Primitivo Domingo and Ernesto Salas had a
(15 Oct 1984).
Domingo handed the management of his estate (including SMMC) to Salas. Salas, as estate manager, was tasked to ensure SMMC's viability and profitability by redeveloping the Sta. Mesa market and restructuring the finances.
Domingo bound himself to transfer 30% of SMMC's stock to Salas as part of his compensation. If Salas fails to achieve the minimum monthly market revenue of P350k, he has to return the shares of stock.
Domingo (in his capacity as SMMC chairman) and Salas (in his personal capacity and as chairman of Inter-Alia Management Corporation) formalized their agreement under a
property and financial management contract
(28 Dec 1984). SMMC, under Salas, leased the Sta. Mesa market to Malaca Realty. However, it became apparent that Malaca was financially incapable of improving the market--Malaca was actually unable to pay the monthly rent! SMMC terminated the lease contract. The SMMC board became dissatisfied with Salas, so SMMC ended the management contract with Salas and Inter-Alia. Salas filed an
action for specific performance and damages
against SMMC and Domingo.
SMMC's monthly market revenue surpassed P350k, yet Domingo refused to comply with his obligation.
Salas is not entitled to the shares. SMMC suffered additional losses and incurred new liabilities [P1.9M~] over the 21 months under Salas' management.
RTC ruled in favor of Salas.
Copies of SMMC's audited financial statements [audited FS]
showing an improvement in the corporation's monthly average gross income was considered by the court.
SMMC's monthly gross income was increased, and the P350k target was surpassed.
Domingo was ordered to deliver the shares to Salas.
CA held that RTC erred in admitting the copies of audited FS, so it reversed the RTC's ruling.
Salas failed to prove the authenticity of the audited financial statements.
SMMC's external auditor was not presented to testify on the documents' genuineness and due execution.
Salas only presented a memorandum prepared by a member of his management team attesting to the increase in revenue.
The audited FS were self-serving AND hearsay.
Amado Domingo (SMMC VP and heir of Domingo) testified that the audited FS presented were
of those submitted to BIR and SEC for purposes of tax payments, compliance with reportorial requirements.
Hence, A. Domingo admitted genuineness and due execution, which made authentication unnecessary.
ISSUE & HOLDING
WON the copies of audited FS are public or private documents.
Private documents, because they were mere copies and NOT certified true copies
WON the copies of audited FS should be admitted in evidence.
NO, due to lack of proper authentication
Rule 132, Section 19.
Classes of documents.
For the purpose of their presentation in evidence, documents are either public or private. Public documents are:
The written official acts, or records of the official acts of the sovereign authority, official bodies and tribunals, and public officers, whether of the Philippines, or of a foreign country;
Documents acknowledged before a notary public except last wills and testaments; and
Public records, kept in the Philippines, of private documents required by law to be entered therein. All other writings are private.