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FIRST DIVISION

[G.R. No. 80505 : December 4, 1990.]


192 SCRA 28
THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. MARIO TANDOY y LIM,
Defendant-Appellant.

DECISION

CRUZ, J.:

The decision of the Regional Trial Court of Makati, Branch 133 dated October 13,
1987, convicting Mario Tandoy of the crime of violation of Art. II, Sec. 4 of Rep. Act
No. 6425 known as the Dangerous Drugs Act of 1972, is before us on appeal.
The information against the accused-appellant read as follows:
That on or about the 27th day of May 1986, in the Municipality of Makati, Metro
Manila, Philippines, and within the jurisdiction of this Honorable Court, the abovenamed accused without being authorized by law, did then and there willfully,
unlawfully and feloniously sell eight (8) pieces of dried marijuana flowering tops,
two (2) pieces of dried marijuana flowering tops and crushed dried marijuana
flowering tops, which are prohibited drug, for and in consideration of P20.00.
Upon arraignment, Tandoy entered a plea of not guilty. After trial, Judge
Buenaventura J. Guerrero rendered a decision the dispositive portion of which
declared:
WHEREFORE, the Court finds Mario Tandoy y Lim guilty beyond reasonable doubt of
violation of Sec. 4, Art. II, Rep. Act No. 6425, as amended, and is hereby sentenced
to life imprisonment and to pay a fine of P20,000.00 and cost.: nad
The marijuana confiscated in this case is declared confiscated and forfeited and
ordered turned over to the Dangerous Drugs Board for proper disposal.
SO ORDERED.
The accused-appellant raises the following assignment of errors in this appeal:
1. The Court a quo erred in finding accused guilty beyond reasonable doubt of the
crime charged despite lack of evidence to prove that he sold marijuana to the
poseur-buyer.

2. The Court a quo erred in admitting in evidence against the accused Exh. "E-2-A"
which is merely a xerox copy of the P10.00 bill allegedly used as buy-bust money.
The evidence of the prosecution may be summarized as follows:
On May 27, 1986, at about 3:30 p.m. Lt. Salido, Jr. of the Makati Police Station
dispatched Pfc. Herino de la Cruz, and Detectives Pablo R. Singayan, Nicanor
Candolesas, Luisito de la Cruz, Estanislao Dalumpines, Antonio Manalastas and
Virgilio Padua to conduct a buy-bust operation at Solchuaga St., Barangay
Singkamas, Makati.
The target area was a store along the said street, and Singayan was to pose as the
buyer. He stood alone near the store waiting for any pusher to approach. The other
members of the team strategically positioned themselves. Soon, three men
approached Singayan. One of them was the accused-appellant, who said without
preamble: "Pare, gusto mo bang umiskor?" Singayan said yes. The exchange was
made then and there two rolls/pieces of marijuana for one P10.00 and two P5.00
bills marked ANU (meaning Anti-Narcotics Unit).
The team then moved in and arrested Tandoy. Manalastas and Candolesas made a
body search of the accused-appellant and took from him the marked money, as well
as eight more rolls/foils of marijuana and crushed leaves.: nad
The arresting officers brought Tandoy to the Office of the Anti-Narcotics Unit, Makati
Police Station, for investigation by Detective Marvin Pajilan. The accused-appellant
chose to remain silent after having been informed of his constitutional rights.
These events were narrated under oath by De la Cruz, Singayan and Pajilan. 1
Microscopic, chemical and chromotographic examination was performed on the
confiscated marijuana by Raquel P. Angeles, forensic chemist of the National Bureau
of Investigation, who later testified that the findings were positive. The marijuana
was offered as an exhibit. 2
As might be expected, the accused-appellant had a different story. His testimony
was that from 1:30 to 4:00 p.m. of the day in question, he was playing "cara y cruz"
with 15 other persons along Solchuaga St. when somebody suddenly said that
policemen were making arrests. The players grabbed the bet money and
scampered. However, he and a certain Danny (another "cara y cruz" player) were
caught and taken to the Narcotics Command headquarters in Makati. There they
were mauled and warned that if they did not point to their fellow pushers, they
would rot in jail. The accused-appellant denied he had sold marijuana to Singayan
and insisted the bills taken from him were the bet money he had grabbed at the
"cara y cruz" game. 3
The trial court, which had the opportunity to observe the demeanor of the witnesses
and to listen to their respective testimonies, gave more credence to the statements
of the arresting officers. Applying the presumption that they had performed their
duties in a regular manner, it rejected Tandoy's uncorroborated allegation that he
had been manhandled and framed. Tandoy had not submitted sufficient evidence of

his charges, let alone his admission that he had no quarrel with the peace officers
whom he had met only on the day of his arrest.
In People v. Patog, 4 this Court held:
When there is no evidence and nothing to indicate the principal witness for the
prosecution was actuated by improper motives, the presumption is that he was not
so actuated and his testimony is entitled to full faith and credit.
Tandoy submits that "one will not sell this prohibited drug to another who is a total
stranger until the seller is certain of the identity of the buyer."
The conjecture must be rejected.: nad
In People v. Paco, 5 this Court observed:
Drug-pushing when done on a small level as in this case belongs to that class of
crimes that may be committed at anytime and at any place. After the offer to buy is
accepted and the exchange is made, the illegal transaction is completed in a few
minutes. The fact that the parties are in a public place and in the presence of other
people may not always discourage them from pursuing their illegal trade as these
factors may even serve to camouflage the same. Hence, the Court has sustained
the conviction of drug pushers caught selling illegal drugs in a billiard hall (People v.
Rubio, G.R. No. 66875, June 19, 1986, 142 SCRA 329; People v. Sarmiento, G.R. No.
72141, January 12, 1987, 147 SCRA 252), in front of a store (People vs. Khan,
supra) along a street at 1:45 p.m. (People v. Toledo, G.R. No. 67609, November 22,
1985, 140 SCRA 259), and in front of a house (People v. Policarpio, G.R. No. 69844,
February 23, 1988).
As the Court has also held, "What matters is not an existing familiarity between the
buyer and the seller but their agreement and the acts constituting the sale and
delivery of the marijuana leaves." 6
Under the second assigned error, the accused-appellant invokes the best evidence
rule and questions the admission by the trial court of the xerox copy only of the
marked P10.00 bill.
The Solicitor General, in his Comment, correctly refuted that contention thus:
This assigned error centers on the trial court's admission of the P10.00 bill marked
money (Exh. E-2-A) which, according to the appellant, is excluded under the best
evidence rule for being a mere xerox copy. Apparently, appellant erroneously thinks
that said marked money is an ordinary document falling under Sec. 2, Rule 130 of
the Revised Rules of Court which excludes the introduction of secondary evidence
except in the five (5) instances mentioned therein.:-cralaw
The best evidence rule applies only when the contents of the document are the
subject of inquiry. Where the issue is only as to whether or not such document was
actually executed, or exists, or in the circumstances relevant to or surrounding its

execution, the best evidence rule does not apply and testimonial evidence is
admissible. (Cf. Moran, op. cit., pp. 76-77; 4 Martin, op. cit., p. 78.)
Since the aforesaid marked money was presented by the prosecution solely for the
purpose of establishing its existence and not its contents, other substitutionary
evidence, like a xerox copy thereof, is therefore admissible without the need of
accounting for the original.
Moreover, the presentation at the trial of the "buy-bust money" was not
indispensable to the conviction of the accused-appellant because the sale of the
marijuana had been adequately proved by the testimony of the police officers. So
long as the marijuana actually sold by the accused-appellant had been submitted as
an exhibit, the failure to produce the marked money itself would not constitute a
fatal omission.
We are convinced from the evidence on record that the prosecution has overcome
the constitutional presumption of innocence in favor of the accused-appellant with
proof beyond reasonable doubt of his guilt. He must therefore suffer the penalty
prescribed by law for those who would visit the scourge of drug addiction upon our
people.
WHEREFORE, the appeal is DISMISSED and the challenged decision AFFIRMED in
toto, with costs against the accused-appellant.: nad
SO ORDERED
Narvasa (Chairman), Gancayco, Grio-Aquino and Medialdea, JJ., concur.

G.R. No. L-35366

August 5, 1931

THE PROVINCIAL FISCAL OF PAMPANGA, petitioner,


vs.
HERMOGENES REYES, Judge of First Instance of Pampanga, and ANDRES GUEVARRA,
respondents.
Provincial Fiscal Daza in his own behalf.
Monico R. Mercado for respondent judge.
Francisco Lazatin for respondent Guevarra.
VILLAMOR, J.:
The petitioner prays for a writ of mandamus to compel the respondent judge to
admit Exhibits A, B, C, and D (attached to the petition), as evidence for the
prosecution in criminal cases Nos. 4501 and 4502 of the Court of First Instance of
Pampanga.
The provincial fiscal of Pampanga filed two informations for libel against Andres
Guevarra. The informations alleged that the defendant, with malicious intent,
published on page 9 of the weekly paper Ing Magumasid in its issue of July 13,
1930, a squib in verse, of which a translation into Spanish was included therein,
intended to impeach the honesty, integrity, and reputation of Clemente Dayrit
(information in criminal cause No. 4501) and of Mariano Nepomuceno (information
in criminal cause No. 4502).
The defendant demurred on the ground of duplicity of informations, he having
published only one libelous article in the Ing Magumasid for July 13, 1930. The court
overruled the demurrer.
A joint trial was held of criminal cases Nos. 4501 and 4502. The fiscal attempted to
present as evidence for the prosecution, the aforementioned Exhibits A, B, C, and D,
which are copies of the Ing Magumasid containing the libelous article with the
innuendo, another article in the vernacular published in the same weekly, and its
translation into Spanish. Counsel for the defendant objected to this evidence, which
objection was sustained by the court.
The respondents answered the petition for mandamus, praying for its dismissal with
costs against the petitioner.
At the hearing of this case, both parties appeared and moved that they be allowed
to present memoranda in lieu of an oral argument, which memoranda are in the
record.
The petitioner contends that the exhibits in question are the best evidence of the
libel, the subject matter of the information, and should therefore be admitted; while
the respondents maintain that, inasmuch as the libelous articles were not quoted in
the information, said evidence cannot be admitted without amending the
information. The prosecution asked for an amendment to the information, but the
court denied the petition on the ground that it would impair the rights of the

defendant, holding that the omission of the libelous article in the original was fatal
to the prosecution.
The first question raised here is whether an information charging a libel published in
an unofficial language, without including a copy of the libelous article, but only a
translation into Spanish, is valid or not. It is true that in United States vs. Eguia and
Lozano (38 Phil., 857), it was stated: "The general rule is that the complaint or
information for libel must set out the particular defamatory words as published, and
a statement of their substance and effect is usually considered insufficient." But this
general rule does not exclude certain exceptions, such as, cases where the libel is
published in a non-official language. "When the defamation has been published in a
foreign tongue, it is proper, and in general, necessary, to set out the communication
as it was originally made, with an exact translation into English; and if from the
translation no cause of action appears, it is immaterial that the foreign words were
actionable. In some jurisdictions, however, under the influence of the liberality of
laws on practice, it is held unnecessary to set out the communication in the foreign
language in which it is alleged to have been published, so long as the foreign
publication is alleged, with an English translation attached." (37 C. J., 27, sec. 336.)
If the libelous article had been published in one of our official languages, English or
Spanish, it would have been necessary to follow the general rule; but since the
article in question was published in the Pampango dialect, it is sufficient to insert a
Spanish translation in the information. The justice of this exception to the general
rule becomes more evident if we consider a libelous article published, for instance,
in Moro or Chinese, who use characters different from our own.
The second question refers to the admissibility of the aforesaid exhibits. The general
rules regarding the admissibility of evidence are applicable to cases of libel or
slander. The evidence must be relevant, and not hearsay. (37 C.J., 151, sec. 688.)
This being so, the rule of procedure which requires the production of the best
evidence, is applicable to the present case. And certainly the copies of the weekly
where the libelous article was published, and its translation, constitute the best
evidence of the libel charged. The newspaper itself is the best evidence of an article
published in it. (Bond vs. Central Bank of Georgia, 2 Ga., 92.).
The respondent judge undoubtedly has discretion to admit or reject the evidence
offered by the fiscal; but in the instant case his refusal to admit such evidence
amounts to an abuse of that discretion, which may be controlled by this court by
means of mandamus proceedings. In so far as the jurisdiction of this court is
concerned, we believe the doctrine is applicable which was held in Orient Insurance
Co. vs. Revilla and Teal Motor Co. (54 Phil., 919), namely, that the Supreme Court
has jurisdiction to entertain an application for a writ of mandamus to compel a
Court of First Instance to permit the attorney of a litigant to examine the entire
written communication, when part of the same has been introduced in evidence by
the other party.
Wherefore, the writ prayed for against the respondent judge of the Court of First
Instance of Pampanga should be issued, requiring him to admit Exhibits A, B, C, and
D, in question in criminal cases Nos. 4501 and 4502 of that court, and it is so
ordered, without special pronouncement of costs.

Avancea, C.J., Johnson, Street, Malcolm, Romualdez, Villa-Real and Imperial, JJ.,
concur.

G.R. No. L-21438

September 28, 1966

AIR FRANCE, petitioner,


vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.
Lichauco, Picazo and Agcaoili for petitioner.
Bengzon Villegas and Zarraga for respondent R. Carrascoso.

SANCHEZ, J.:
The Court of First Instance of Manila 1 sentenced petitioner to pay respondent
Rafael Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary
damages; P393.20 representing the difference in fare between first class and tourist
class for the portion of the trip Bangkok-Rome, these various amounts with interest
at the legal rate, from the date of the filing of the complaint until paid; plus
P3,000.00 for attorneys' fees; and the costs of suit.
On appeal,2 the Court of Appeals slightly reduced the amount of refund on
Carrascoso's plane ticket from P393.20 to P383.10, and voted to affirm the appealed
decision "in all other respects", with costs against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as " fully supported by the evidence of
record", are:
Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left
Manila for Lourdes on March 30, 1958.
On March 28, 1958, the defendant, Air France, through its authorized agent,
Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket
from Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", but
at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the "first
class" seat that he was occupying because, in the words of the witness Ernesto G.
Cuento, there was a "white man", who, the Manager alleged, had a "better right" to
the seat. When asked to vacate his "first class" seat, the plaintiff, as was to be
expected, refused, and told defendant's Manager that his seat would be taken over
his dead body; a commotion ensued, and, according to said Ernesto G. Cuento,
"many of the Filipino passengers got nervous in the tourist class; when they found
out that Mr. Carrascoso was having a hot discussion with the white man [manager],
they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat
to the white man" (Transcript, p. 12, Hearing of May 26, 1959); and plaintiff
reluctantly gave his "first class" seat in the plane.3
1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of
respondent Court of Appeals. Petitioner charges that respondent court failed to
make complete findings of fact on all the issues properly laid before it. We are asked

to consider facts favorable to petitioner, and then, to overturn the appellate court's
decision.
Coming into focus is the constitutional mandate that "No decision shall be rendered
by any court of record without expressing therein clearly and distinctly the facts and
the law on which it is based". 5 This is echoed in the statutory demand that a
judgment determining the merits of the case shall state "clearly and distinctly the
facts and the law on which it is based"; 6 and that "Every decision of the Court of
Appeals shall contain complete findings of fact on all issues properly raised before
it". 7
A decision with absolutely nothing to support it is a nullity. It is open to direct attack.
8 The law, however, solely insists that a decision state the "essential ultimate facts"
upon which the court's conclusion is drawn. 9 A court of justice is not hidebound to
write in its decision every bit and piece of evidence 10 presented by one party and
the other upon the issues raised. Neither is it to be burdened with the obligation "to
specify in the sentence the facts" which a party "considered as proved". 11 This is
but a part of the mental process from which the Court draws the essential ultimate
facts. A decision is not to be so clogged with details such that prolixity, if not
confusion, may result. So long as the decision of the Court of Appeals contains the
necessary facts to warrant its conclusions, it is no error for said court to withhold
therefrom "any specific finding of facts with respect to the evidence for the
defense". Because as this Court well observed, "There is no law that so requires". 12
Indeed, "the mere failure to specify (in the decision) the contentions of the appellant
and the reasons for refusing to believe them is not sufficient to hold the same
contrary to the requirements of the provisions of law and the Constitution". It is in
this setting that in Manigque, it was held that the mere fact that the findings "were
based entirely on the evidence for the prosecution without taking into consideration
or even mentioning the appellant's side in the controversy as shown by his own
testimony", would not vitiate the judgment. 13 If the court did not recite in the
decision the testimony of each witness for, or each item of evidence presented by,
the defeated party, it does not mean that the court has overlooked such testimony
or such item of evidence. 14 At any rate, the legal presumptions are that official
duty has been regularly performed, and that all the matters within an issue in a
case were laid before the court and passed upon by it. 15
Findings of fact, which the Court of Appeals is required to make, maybe defined as
"the written statement of the ultimate facts as found by the court ... and essential
to support the decision and judgment rendered thereon". 16 They consist of the
court's "conclusions" with respect to the determinative facts in issue". 17 A question
of law, upon the other hand, has been declared as "one which does not call for an
examination of the probative value of the evidence presented by the parties." 18
2. By statute, "only questions of law may be raised" in an appeal by certiorari from a
judgment of the Court of Appeals. 19 That judgment is conclusive as to the facts. It
is not appropriately the business of this Court to alter the facts or to review the
questions of fact. 20
With these guideposts, we now face the problem of whether the findings of fact of
the Court of Appeals support its judgment.

3. Was Carrascoso entitled to the first class seat he claims?


It is conceded in all quarters that on March 28, 1958 he paid to and received from
petitioner a first class ticket. But petitioner asserts that said ticket did not represent
the true and complete intent and agreement of the parties; that said respondent
knew that he did not have confirmed reservations for first class on any specific
flight, although he had tourist class protection; that, accordingly, the issuance of a
first class ticket was no guarantee that he would have a first class ride, but that
such would depend upon the availability of first class seats.
These are matters which petitioner has thoroughly presented and discussed in its
brief before the Court of Appeals under its third assignment of error, which reads:
"The trial court erred in finding that plaintiff had confirmed reservations for, and a
right to, first class seats on the "definite" segments of his journey, particularly that
from Saigon to Beirut". 21
And, the Court of Appeals disposed of this contention thus:
Defendant seems to capitalize on the argument that the issuance of a first-class
ticket was no guarantee that the passenger to whom the same had been issued,
would be accommodated in the first-class compartment, for as in the case of
plaintiff he had yet to make arrangements upon arrival at every station for the
necessary first-class reservation. We are not impressed by such a reasoning. We
cannot understand how a reputable firm like defendant airplane company could
have the indiscretion to give out tickets it never meant to honor at all. It received
the corresponding amount in payment of first-class tickets and yet it allowed the
passenger to be at the mercy of its employees. It is more in keeping with the
ordinary course of business that the company should know whether or riot the
tickets it issues are to be honored or not.22
Not that the Court of Appeals is alone. The trial court similarly disposed of
petitioner's contention, thus:
On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be
no question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1,"
"B-2", "C" and "C-1", and defendant's own witness, Rafael Altonaga, confirmed
plaintiff's testimony and testified as follows:
Q. In these tickets there are marks "O.K." From what you know, what does this OK
mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)
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Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and
Rafael Altonaga that although plaintiff paid for, and was issued a "first class"
airplane ticket, the ticket was subject to confirmation in Hongkong. The court cannot
give credit to the testimony of said witnesses. Oral evidence cannot prevail over
written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie the
testimony of said witnesses, and clearly show that the plaintiff was issued, and paid
for, a first class ticket without any reservation whatever.
Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga
testified that the reservation for a "first class" accommodation for the plaintiff was
confirmed. The court cannot believe that after such confirmation defendant had a
verbal understanding with plaintiff that the "first class" ticket issued to him by
defendant would be subject to confirmation in Hongkong. 23
We have heretofore adverted to the fact that except for a slight difference of a few
pesos in the amount refunded on Carrascoso's ticket, the decision of the Court of
First Instance was affirmed by the Court of Appeals in all other respects. We hold the
view that such a judgment of affirmance has merged the judgment of the lower
court. 24 Implicit in that affirmance is a determination by the Court of Appeals that
the proceeding in the Court of First Instance was free from prejudicial error and "all
questions raised by the assignments of error and all questions that might have been
raised are to be regarded as finally adjudicated against the appellant". So also, the
judgment affirmed "must be regarded as free from all error". 25 We reached this
policy construction because nothing in the decision of the Court of Appeals on this
point would suggest that its findings of fact are in any way at war with those of the
trial court. Nor was said affirmance by the Court of Appeals upon a ground or
grounds different from those which were made the basis of the conclusions of the
trial court. 26
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class
seat, notwithstanding the fact that seat availability in specific flights is therein
confirmed, then an air passenger is placed in the hollow of the hands of an airline.
What security then can a passenger have? It will always be an easy matter for an
airline aided by its employees, to strike out the very stipulations in the ticket, and
say that there was a verbal agreement to the contrary. What if the passenger had a
schedule to fulfill? We have long learned that, as a rule, a written document speaks
a uniform language; that spoken word could be notoriously unreliable. If only to
achieve stability in the relations between passenger and air carrier, adherence to
the ticket so issued is desirable. Such is the case here. The lower courts refused to
believe the oral evidence intended to defeat the covenants in the ticket.
The foregoing are the considerations which point to the conclusion that there are
facts upon which the Court of Appeals predicated the finding that respondent
Carrascoso had a first class ticket and was entitled to a first class seat at Bangkok,
which is a stopover in the Saigon to Beirut leg of the flight. 27 We perceive no
"welter of distortions by the Court of Appeals of petitioner's statement of its
position", as charged by petitioner. 28 Nor do we subscribe to petitioner's
accusation that respondent Carrascoso "surreptitiously took a first class seat to
provoke an issue". 29 And this because, as petitioner states, Carrascoso went to see
the Manager at his office in Bangkok "to confirm my seat and because from Saigon I

was told again to see the Manager". 30 Why, then, was he allowed to take a first
class seat in the plane at Bangkok, if he had no seat? Or, if another had a better
right to the seat?
4. Petitioner assails respondent court's award of moral damages. Petitioner's
trenchant claim is that Carrascoso's action is planted upon breach of contract; that
to authorize an award for moral damages there must be an averment of fraud or
bad faith;31 and that the decision of the Court of Appeals fails to make a finding of
bad faith. The pivotal allegations in the complaint bearing on this issue are:
3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines
for a valuable consideration, the latter acting as general agents for and in behalf of
the defendant, under which said contract, plaintiff was entitled to, as defendant
agreed to furnish plaintiff, First Class passage on defendant's plane during the entire
duration of plaintiff's tour of Europe with Hongkong as starting point up to and until
plaintiff's return trip to Manila, ... .
4. That, during the first two legs of the trip from Hongkong to Saigon and from
Saigon to Bangkok, defendant furnished to the plaintiff First Class accommodation
but only after protestations, arguments and/or insistence were made by the plaintiff
with defendant's employees.
5. That finally, defendant failed to provide First Class passage, but instead furnished
plaintiff only Tourist Class accommodations from Bangkok to Teheran and/or
Casablanca, ... the plaintiff has been compelled by defendant's employees to leave
the First Class accommodation berths at Bangkok after he was already seated.
6. That consequently, the plaintiff, desiring no repetition of the inconvenience and
embarrassments brought by defendant's breach of contract was forced to take a
Pan American World Airways plane on his return trip from Madrid to Manila.32
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2. That likewise, as a result of defendant's failure to furnish First Class


accommodations aforesaid, plaintiff suffered inconveniences, embarrassments, and
humiliations, thereby causing plaintiff mental anguish, serious anxiety, wounded
feelings, social humiliation, and the like injury, resulting in moral damages in the
amount of P30,000.00. 33
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The foregoing, in our opinion, substantially aver: First, That there was a contract to
furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran
leg; Second, That said contract was breached when petitioner failed to furnish first
class transportation at Bangkok; and Third, that there was bad faith when
petitioner's employee compelled Carrascoso to leave his first class accommodation
berth "after he was already, seated" and to take a seat in the tourist class, by
reason of which he suffered inconvenience, embarrassments and humiliations,
thereby causing him mental anguish, serious anxiety, wounded feelings and social
humiliation, resulting in moral damages. It is true that there is no specific mention

of the term bad faith in the complaint. But, the inference of bad faith is there, it may
be drawn from the facts and circumstances set forth therein. 34 The contract was
averred to establish the relation between the parties. But the stress of the action is
put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the start of the trial, respondent's
counsel placed petitioner on guard on what Carrascoso intended to prove: That
while sitting in the plane in Bangkok, Carrascoso was ousted by petitioner's
manager who gave his seat to a white man; 35 and (b) evidence of bad faith in the
fulfillment of the contract was presented without objection on the part of the
petitioner. It is, therefore, unnecessary to inquire as to whether or not there is
sufficient averment in the complaint to justify an award for moral damages.
Deficiency in the complaint, if any, was cured by the evidence. An amendment
thereof to conform to the evidence is not even required. 36 On the question of bad
faith, the Court of Appeals declared:
That the plaintiff was forced out of his seat in the first class compartment of the
plane belonging to the defendant Air France while at Bangkok, and was transferred
to the tourist class not only without his consent but against his will, has been
sufficiently established by plaintiff in his testimony before the court, corroborated
by the corresponding entry made by the purser of the plane in his notebook which
notation reads as follows:
"First-class passenger was forced to go to the tourist class against his will, and that
the captain refused to intervene",
and by the testimony of an eye-witness, Ernesto G. Cuento, who was a copassenger. The captain of the plane who was asked by the manager of defendant
company at Bangkok to intervene even refused to do so. It is noteworthy that no
one on behalf of defendant ever contradicted or denied this evidence for the
plaintiff. It could have been easy for defendant to present its manager at Bangkok
to testify at the trial of the case, or yet to secure his disposition; but defendant did
neither. 37
The Court of appeals further stated
Neither is there evidence as to whether or not a prior reservation was made by the
white man. Hence, if the employees of the defendant at Bangkok sold a first-class
ticket to him when all the seats had already been taken, surely the plaintiff should
not have been picked out as the one to suffer the consequences and to be
subjected to the humiliation and indignity of being ejected from his seat in the
presence of others. Instead of explaining to the white man the improvidence
committed by defendant's employees, the manager adopted the more drastic step
of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are
strengthened in our belief that this probably was what happened there, by the
testimony of defendant's witness Rafael Altonaga who, when asked to explain the
meaning of the letters "O.K." appearing on the tickets of plaintiff, said "that the
space is confirmed for first class. Likewise, Zenaida Faustino, another witness for
defendant, who was the chief of the Reservation Office of defendant, testified as
follows:

"Q How does the person in the ticket-issuing office know what reservation the
passenger has arranged with you?
A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19,
1959)
In this connection, we quote with approval what the trial Judge has said on this
point:
Why did the, using the words of witness Ernesto G. Cuento, "white man" have a
"better right" to the seat occupied by Mr. Carrascoso? The record is silent. The
defendant airline did not prove "any better", nay, any right on the part of the "white
man" to the "First class" seat that the plaintiff was occupying and for which he paid
and was issued a corresponding "first class" ticket.
If there was a justified reason for the action of the defendant's Manager in Bangkok,
the defendant could have easily proven it by having taken the testimony of the said
Manager by deposition, but defendant did not do so; the presumption is that
evidence willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules
of Court]; and, under the circumstances, the Court is constrained to find, as it does
find, that the Manager of the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not give up his "first
class" seat because the said Manager wanted to accommodate, using the words of
the witness Ernesto G. Cuento, the "white man".38
It is really correct to say that the Court of Appeals in the quoted portion first
transcribed did not use the term "bad faith". But can it be doubted that the recital of
facts therein points to bad faith? The manager not only prevented Carrascoso from
enjoying his right to a first class seat; worse, he imposed his arbitrary will; he
forcibly ejected him from his seat, made him suffer the humiliation of having to go
to the tourist class compartment - just to give way to another passenger whose
right thereto has not been established. Certainly, this is bad faith. Unless, of course,
bad faith has assumed a meaning different from what is understood in law. For, "bad
faith" contemplates a "state of mind affirmatively operating with furtive design or
with some motive of self-interest or will or for ulterior purpose." 39
And if the foregoing were not yet sufficient, there is the express finding of bad faith
in the judgment of the Court of First Instance, thus:
The evidence shows that the defendant violated its contract of transportation with
plaintiff in bad faith, with the aggravating circumstances that defendant's Manager
in Bangkok went to the extent of threatening the plaintiff in the presence of many
passengers to have him thrown out of the airplane to give the "first class" seat that
he was occupying to, again using the words of the witness Ernesto G. Cuento, a
"white man" whom he (defendant's Manager) wished to accommodate, and the
defendant has not proven that this "white man" had any "better right" to occupy the
"first class" seat that the plaintiff was occupying, duly paid for, and for which the
corresponding "first class" ticket was issued by the defendant to him.40

5. The responsibility of an employer for the tortious act of its employees need not
be essayed. It is well settled in law. 41 For the willful malevolent act of petitioner's
manager, petitioner, his employer, must answer. Article 21 of the Civil Code says:
ART. 21. Any person who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for
the damage.
In parallel circumstances, we applied the foregoing legal precept; and, we held that
upon the provisions of Article 2219 (10), Civil Code, moral damages are recoverable.
42
6. A contract to transport passengers is quite different in kind and degree from any
other contractual relation. 43 And this, because of the relation which an air-carrier
sustains with the public. Its business is mainly with the travelling public. It invites
people to avail of the comforts and advantages it offers. The contract of air carriage,
therefore, generates a relation attended with a public duty. Neglect or malfeasance
of the carrier's employees, naturally, could give ground for an action for damages.
Passengers do not contract merely for transportation. They have a right to be
treated by the carrier's employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against personal misconduct,
injurious language, indignities and abuses from such employees. So it is, that any
rule or discourteous conduct on the part of employees towards a passenger gives
the latter an action for damages against the carrier. 44
Thus, "Where a steamship company 45 had accepted a passenger's check, it was a
breach of contract and a tort, giving a right of action for its agent in the presence of
third persons to falsely notify her that the check was worthless and demand
payment under threat of ejection, though the language used was not insulting and
she was not ejected." 46 And this, because, although the relation of passenger and
carrier is "contractual both in origin and nature" nevertheless "the act that breaks
the contract may be also a tort". 47 And in another case, "Where a passenger on a
railroad train, when the conductor came to collect his fare tendered him the cash
fare to a point where the train was scheduled not to stop, and told him that as soon
as the train reached such point he would pay the cash fare from that point to
destination, there was nothing in the conduct of the passenger which justified the
conductor in using insulting language to him, as by calling him a lunatic," 48 and
the Supreme Court of South Carolina there held the carrier liable for the mental
suffering of said passenger.1awphl.nt
Petitioner's contract with Carrascoso is one attended with public duty. The stress of
Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a
violation of public duty by the petitioner air carrier a case of quasi-delict.
Damages are proper.
7. Petitioner draws our attention to respondent Carrascoso's testimony, thus
Q You mentioned about an attendant. Who is that attendant and purser?

A When we left already that was already in the trip I could not help it. So one
of the flight attendants approached me and requested from me my ticket and I said,
What for? and she said, "We will note that you transferred to the tourist class". I
said, "Nothing of that kind. That is tantamount to accepting my transfer." And I also
said, "You are not going to note anything there because I am protesting to this
transfer".
Q Was she able to note it?
A No, because I did not give my ticket.
Q About that purser?
A Well, the seats there are so close that you feel uncomfortable and you don't have
enough leg room, I stood up and I went to the pantry that was next to me and the
purser was there. He told me, "I have recorded the incident in my notebook." He
read it and translated it to me because it was recorded in French "First class
passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene."
Mr. VALTE
I move to strike out the last part of the testimony of the witness because the best
evidence would be the notes. Your Honor.
COURT
I will allow that as part of his testimony. 49
Petitioner charges that the finding of the Court of Appeals that the purser made an
entry in his notebook reading "First class passenger was forced to go to the tourist
class against his will, and that the captain refused to intervene" is predicated upon
evidence [Carrascoso's testimony above] which is incompetent. We do not think so.
The subject of inquiry is not the entry, but the ouster incident. Testimony on the
entry does not come within the proscription of the best evidence rule. Such
testimony is admissible. 49a
Besides, from a reading of the transcript just quoted, when the dialogue happened,
the impact of the startling occurrence was still fresh and continued to be felt. The
excitement had not as yet died down. Statements then, in this environment, are
admissible as part of the res gestae. 50 For, they grow "out of the nervous
excitement and mental and physical condition of the declarant". 51 The utterance of
the purser regarding his entry in the notebook was spontaneous, and related to the
circumstances of the ouster incident. Its trustworthiness has been guaranteed. 52 It
thus escapes the operation of the hearsay rule. It forms part of the res gestae.
At all events, the entry was made outside the Philippines. And, by an employee of
petitioner. It would have been an easy matter for petitioner to have contradicted
Carrascoso's testimony. If it were really true that no such entry was made, the
deposition of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in


evidence.
8. Exemplary damages are well awarded. The Civil Code gives the court ample
power to grant exemplary damages in contracts and quasi- contracts. The only
condition is that defendant should have "acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner." 53 The manner of ejectment of respondent
Carrascoso from his first class seat fits into this legal precept. And this, in addition
to moral damages.54
9. The right to attorney's fees is fully established. The grant of exemplary damages
justifies a similar judgment for attorneys' fees. The least that can be said is that the
courts below felt that it is but just and equitable that attorneys' fees be given. 55
We do not intend to break faith with the tradition that discretion well exercised as
it was here should not be disturbed.
10. Questioned as excessive are the amounts decreed by both the trial court and
the Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of
exemplary damages, and P3,000.00 as attorneys' fees. The task of fixing these
amounts is primarily with the trial court. 56 The Court of Appeals did not interfere
with the same. The dictates of good sense suggest that we give our imprimatur
thereto. Because, the facts and circumstances point to the reasonableness
thereof.57
On balance, we say that the judgment of the Court of Appeals does not suffer from
reversible error. We accordingly vote to affirm the same. Costs against petitioner. So
ordered.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and
Castro, JJ., concur.
Bengzon, J.P., J., took no part.

G.R. No. L-28999

May 24, 1977

COMPAIA MARITIMA, plaintiff-appellee,


vs.
ALLIED FREE WORKERS UNION, SALVADOR T. LLUCH, MARIANO LL. BADELLES,
individually and in their capacities as President and Vice-President, respectively of
the Allied Free Workers Union, NICANOR HALEBAS and LAURENTINO LL. BADELLES,
individually and officers of Allied Free Workers Union, defendants-appellants.
Halibas, Badelles, Padilla & Sepulveda and Vicente A. Rafael & Associates for
defendants-appellants.
Rufino J. Abadies, Francisco Obach & Jesus Quijano for appellee.

AQUINO, J.:
Antecedents. - Since the onset in 1954 of litigation between the parties herein, this
is the fifth case between them that has been elevated to this Court. The incidents
preceding the instant appeal are as follows:
On August 11, 1952 the Compaia Maritima and the Allied Free Workers Union
entered into a written contract whereby the union agreed to perform arrastre and
stevedoring work for the consignees. vessels at Iligan City. The contract was to be
effective for one month counted from August 12, 1952.
It was stipulated that the company could revoke the contract before the expiration
of the term if the union failed to render proper service. The contract could be
renewed by agreement of the parties (Exh. J).
At the time the contract was entered into, the union had just been organized. Its
primordial desire was to find work for its members. The union agreed to the
stipulation that the company would not be liable for the payment of the services of
the union "for the loading, unloading and deliveries of cargoes" and that the
compensation for such services would be paid "by the owners and consigness of the
cargoes" as "has been the practice in the port of Iligan City" (Par. 2 of Exh. J).
The union found out later that that stipulation was oppressive and that the company
was unduly favored by that arrangement.
Under the contract, the work of the union consisted of arrastre and stevedoring
service. Arrastre, a Spanish word which refers to hauling of cargo, comprehends the
handling of cargo on the wharf or between the establishment of the consignee or
shipper and the ship's tackle. The service is usually performed by longshoremen.
On the other hand, stevedoring refers to the handling of the cargo in the holds of
the vessel or between the ship's tackle and the holds of the vessel.

The shippers and consignees paid the union oth for the arrastre work. They refused
to pay for the stevedoring service. They claimed that the shipowner was the one
obligated to pay for the stevedoring service because the bill of lading provided that
the unloading of the cargo was at the shipowner's expense (Exh. 1).
On the other hand, the company refused to pay for the stevedoring service because
the contract (Exh. J) explicitly provided that the compensation for both arrastre and
stevedoring work should be paid by the shippers and consignees, as was the
alleged practice in Iligan City, and that the shipowner would not be liable for the
payment of such services.
Thus, the issue of whether the company should pay for the stevedoring service
became a sore point of contention between the parties. The union members labored
under the impression that they were not being compensated for their stevedoring
service as distinguished from arrastre service.
Although the arrastre and stevedoring contract (Exh. J) was disadvantageous to the
union, it did not terminate the contract because its members were in dire need of
work and work, which was not adequately compensated, was preferable to having
no work at all (204, 214-5, 226-7 tsn May 20, 1960).
Upon the expiration of the one-month period, the said contract was verbally
renewed. The company allowed the union to continue performing arrastre and
stevedoring work.
On July 23, 1954 the union sent a letter to the company requesting that it be
recognized as the exclusive bargaining unit to load and unload the cargo of its
vessels at Iligan City. The company ignored that demand. So, the union filed on
August 6, 1954 in the Court of Industrial Relations (CIR) a petition praying that it be
certified as the sole collective bargaining unit.
Despite that certification case, the company on August 24, 1954 served a written
notice on the union that, in accordance with payment of the 1952 contract, the
same would be terminated on August 31, 1954. Because of that notice, the union on
August 26, 1954 filed in the CIR charges of unfair labor practice against the
company.
On August 31, 1954 the company entered into a new stevedoring and arrastre
contract with the Iligan Stevedoring Association. On the following day, September 1,
the union members picketed the wharf and prevented the Iligan Stevedoring
Association from performing arrastre and stevedoring work. The picket lasted for
nine days.
On September 8, 1954 the company sued the union and its officers in the Court of
First Instance of Lanao for the rescission of the aforementioned 1952 contract, to
enjoin the union from interfering with the loading and unloading of the cargo, and
for the recovery of damages.
On the following day, September 9, the lower court issued ex parte a writ of
preliminary injunction after the company had posted a bond in the sum of P20,000.

A few hours lateron that same day the union was allowed to file a counterbond. The
injunction was lifted. The union members resumed their arrastre and stevedoring
work.
Later, the union assailed in a prohibition action in this Court the jurisdiction of the
trial court to entertain the action for damages, and injunction.
A majority of this Court held that the lower court had jurisdiction to issue the
injunction and to take cognizance of the damage suit filed by the company but that
the injunction was void because it was issued ex parte and the procedure laid down
in section 9(d) of Republic Act No. 875 was not followed by the trial court (Allied
Free Workers Union vs. Judge Apostol, 102 Phil. 292, 298).
After trial, the lower court rendered a decision dated December 5, 1960, amended
on January 11, 1961, (1) declaring the arrastre and stevedoring contract terminated
on August $1, 1954; (2) dismissing the union's counterclaim; (3) ordering the union
and its officers to pay solidarily to the company P520,000 as damages, with six
percent interest per annum from September 9, 1954, when the complaint. was filed;
(4) permanently enjoining the union from performing any arrastre and stevedoring
work for the company at Iligan City, and (5) requiring the union to post a
supersedeas bond in the sum of P520,000 to stay execution.
The union filed a motion for reconsideration. On the other hand, the company filed a
motion for the execution pending appeal of the money judgment. It filed another
motion for the immediate issuance of a writ of injunction. That second motion was
filed in the municipal court of Iligan City in view of the absence of the District Judge.
The municipal court issued the writ of injunction. However, this Court set it aside
because it was not an interlocutory order and no special reasons were adduced to
justify its issuance (Allied Free Workers Union vs. Judge Estipona, 113 Phil. 748).
The union on January 6, 1961 had perfected an appeal from the lower court's
original decision. It did not appeal from the amended decision. On March 24, 1962
the lower court issued an order declaring its amended decision final and executory
in view of the union's failure to appeal therefrom. The court directed the clerk of
court to issue a writ of execution. That order was assailed by the union in a
certiorari action filed in this Court. A preliminary injunction was issued by this Court
to restrain the execution of the judgment.
On May 16, 1962 this Court dissolved the injunction at the instance of the company
which had filed a counterbond. Thereupon, the 225 members of the union yielded
their ten-year old jobs to the new set of workers contracted by the company.
The certiorari incident was decided on June 30, 1966. This Court noted that the
lower court amended its decision for the purpose of correcting certain errors and
omissions which were not substantial in character and that its amended decision
was served upon the parties after the union had perfected its appeal from the
original decision.

Under those circumstances, this Court held that the union's appeal should be given
due coarse, subject to the amendment of its record on appeal. This Court reserved
to the members of the union the right to secure restitution under sections 2 and 5,
Rule 39 of the Rules of Court (Allied Free Workers Union vs. Estipona, L-19651, June
30, 1966,17 SCRA 513, 64 O.G. 2701).
Pursuant to that reservation, the union on December 16, 1966 filed a motion for
restitution, praying that its 225 members be restored to their jobs and that the
company be ordered to pay P 1,620,000 as damages, consisting of the lost earnings
during the four-years period from May 8, 1962 to May 8, 1966.
On the other hand, the company in its motion of January 18, 1967 reiterated its
1960 motion for the execution of the lower court's judgment as to the damages, of
P520,000 and the permanent injunction.
Later, the company called the lower court's attention to this Court's decision dated
January 31, 1967. In that decision, this Court affirmed the CIR's decision holding that
the company did not commit any unfair labor practice and reversed the CIR's
directive that a certification election be held to determine whether the union should
be the exonemtod bargaining unit. This Court held that the union could not act as a
collective bargaining unit because the union was an independent contractor and its
members were not employees of the company (Allied Free Workers Union vs.
Compaia Maritima, L-22951-2 and L-22971, 19 SCRA 258).
The lower court in its order of April 25, 1967 (1) denied the union's motion for
restitution and to stay execution of its amended decision on January 11, 1961 and
(2) required the union to file a supersedeas bond in the sum of P100,000 within
thirty days from notice. The bond was reduced to P50,000 in the lower court's order
of August 16, 1967. The union posted the bond on August 24,1967.
The lower court approved the union's amended record on appeal in its order of
October 6, 1967.
The union appealed directly to this Court because the amount involved exceeds
P200,000. The appeal was perfected before Republic Act No. 5440 took effect on
September 9,1968.
Other proceedings. - The company in its original complaint prayed that the union
and its officials be ordered to pay actual damages, amounting to P15,000 for the
union's failure to load and unload cargo in and from the consignees. vessels from
September 1 to 8, 1954; P50,000 as damages, due to the union's inefficiency in
performing arrastre and stevedoring work "during the latter part of the existence" of
the contract; P50,000 as moral and exemplary damages, (not supported by any
allegation in the body of the complaint) and P5,000 as attorney's Considering (1012, Record on Appeal).
On September 15, 1954 the company added a fourth cause ofaction to its
complaint. It alleged that by reason of the acts of harassment and obstruction
perpetrated by the union in the loading and unloading ofcargo the company
suffered additional damage in the form of lost and unrealized freight and passenger

charges in the amount of P10,000 for September 9 and 10, 1954 (66, Record on
Appeal).
On November 2, 1954 the company attached to its motion for the revival of the
injunction against the union an auditor's report dated September 15, 1954 wherein
it was indicated that the company lost freight revenues amounting to P178,579.20
during the period from January 1 to September 7, 1954 (121-143, Record on
Appeal).
On November 27, 1954 the company filed another motion for the restoration of the
injunction. In support of that motion the company attached a trip operation report
showing the unloaded cargoes on the consignees. vessels, when they docked at
Iligan City on September 14, 19, 22 and 26 and October 3 and 5, 1954, as well as
the delays in their departure (157-162, Record on Appeal).
On March 5, 1955 the company added a fifth cause ofaction too its complaint. It
alleged that during the period from September 12 to December 28, 1954 it lost
freight charges on unloaded cargoes in the sum of P62,680.12, as shown in a
detailed statement, and that it incurred an estimated amount of P20,000 for
overhead expenses. for the delay in the dismissal of its vessels attributable to the
union's unsatisfactory stevedoring and arrastre work (225-229, 237-8, Record on
Appeal).
Also on March 5, 1955 the union answered the original and supplemental
complaints. It denied that its members had rendered inefficient service. It averred
that the termination of the contract was prompted by the consignees. desire to give
the work to the Iligan Stevedoring Association which the company had allegedly
organized and subsidized. The union filed a counterclaim for P200,000 as
compensation for its services to the company and P500,000 as other damages,
(239-252, Record on Appeal).
On March 9, 1960 the company filed a third supplemental complaint, It alleged that
the continuation of the stevedoring and arrastre work by the union for the company
from 1955 to date had caused losses to the company at the rate of P25,000
annually in the form of lost freight on shutout cargoes and the expenses. for the
equipment used to assist the union members in performing their work (320-3,
Record on Appeal).
Plaintiff company's evidence. - Jose C. Teves, the consignees. branch manager at
Iligan City, testified that on August 24, 1954 he terminated the arrastre and
stevedoring contract with the union (Exh. J) upon instruction of the head office. The
contract was terminated in order to avoid further losses to the company caused by
the union's inefficient service (85-86 tsn March 11, 1960).
After the termination of the contract, the members of the union allegedly harassed
the company with the help of goons. The cargoes could not be unloaded in spite of
the fact that the company had sought the protection of the law-enforcing authorities
(88). The consignees. last recourse was to go to court. (89).

The company supposedly suffered losses as a result of the union's inefficient service
since September 1, 1954 (91). Teves hired auditors to ascertain the losses suffered
by the company during the period from January 1 to September 11, 1954.
The trial court awarded actual damages, amounting to P450,000 on the basis of the
auditor's reports, Exhibits A to I. It did not carefully examine the said exhibits.
Contrary to the trial court's impression, Exhibits B, C and D are not auditors' reports.
The trial court did not bother to make a breakdown of the alleged damages,
totalling P450,000. The reports of the two hired accountants, Demetrio S. Jayme and
M. J. Siojo, show the following alleged damages, in the aggregate amount of
P349,245.37 (not P412,663.17, as erroneously added by the consignees. counsel,
161,163-4 tsn March 11, 1960):
TABULATION OF ALLEGED
DAMAGES CLAIMED BY COMPAIA MARITIMA
(1) Freight for 74,751 bags of fertilizer

allegedly booked for shipment in the

company's vessels but loaded in other vessels

during the period from Jan. 1 to August 31,

1954, Statement A in Exh. A, CPA Jayme's

report.........................................................
P29,900.40
(2) Lost freight on other shutout cargoes

for January 1 to August 31, 1954, Statement A

in Exh. A, of CPA Jayme .........................


4,339.64
(3) Lost freight on shutout cargoes for

September 2 to 7, 1954 booked for shipment in

M. V. Mindoro, Panay and Masterhead Knot,

Statement B in Exh. A, CPA Jayme's report...


6,167.16
(4) Losses sustained in voyages of M.V.

Panay and Mindoro in four voyages from

September 4 to 11, 1954, with estimates,

Statement B, Exh. A...............................


3,764.50
(5) Other estimated losses for the said

voyages of M.V. Panay and Mindoro for the

same period, based on interviews of parties at

the wharf, Statement B, Exh. A...............

10,000.00
(6) Additional subsistence expenses. for the

M.V. Mindoro and Panay due to the delays in

their dismissal from January 1 to August 31,

1954 as certified by the pursers of the two

vessels, Statement C, Exh. A.....................


4,407.50
(7) Estimated loss in freight and passenger

revenue for the period from January 1 to

August 31, 1954, based on 1953 freight revenue

for the same period Statement D, Exh. A.....


100,000.00
(8) Estimated loss in passenger fares for

the period from September to December 31,

1954, Statement D, Exh. A.......................


20,000.00

(9) Lost freight charges from September

12 to December 28, 1954, as certified by the

chief clerk of the consignees. Iligan office. Exh.

B.............................................................
62,680.12
(10) Estimated overhead expenses for

delay of vessels in port, Exh. B.................


20,000.00
(11) Forklift operating expenses. for 1955,

consisting of salaries and maintenance

expenses, Exh. E- 1....................................


5,677.54
(12) Lost freight revenue for 1955, Exh. E-

2...............................................................
17,838.78
(13) Forklift operating expenses. for 1956,

Exh. F- 1...................................................

3,520.90
(14) Lost freight revenue for 1956, Exh. F-2
3,849.56
(15) Forklift operating expenses. for 1957,

Exh. G- 1...................................................
8,259.08
(16) Lost freight revenue for 1957, Exh. G-

2....................................................................
14,538.10
(17) Forklift operating expenses. for 1958,

Exh. H-1...................................................
7,503.45
(18) Lost freight revenue for 1958, Exh. H-

2.............................................................
10,193.46
(19) Forklift operating expenses. for 1959,

Exh. I-1....................................................
8,745.35
(20) Lost freight revenue for 1959, Exh. I-2
7,959.83

T OT A L P349,245.37
We tabulated the alleged damages, to show that the trial court's award to the
company of P450,000 as damages, is not supported by the evidence. On the other
hand, the statement of the consignees. counsel that the damages, totalled
P412,663.17 (162- 164 tsn March 11, 1960) is wrong.
Teves, the consignees. branch manager, submitted a statement (Exh. K) showing
the alleged cost of three forklifts, 200 pieces of pallet boards, 530 pieces of wire
rope slings and two pieces of tarpaulins in the total sum of P27,215. In that
statement, he claims that the damages, to the company by reason of the
depreciation of the said items of equipment amounted to P38,835 or more than the
cost thereof.
The company's counsel, in his summary of the damages, ignored the alleged
damages, of P38,835 indicated by Teves in Exhibit K. The consignees. counsel relied
oth on the auditors' reports, Exhibits A and E to I and on Exhibit B, the chief clerk's
statement. As already noted, those documents show that the total damages,
claimed by the company amounted to P349,245.37.
The best evidence on the cost of the said equipment would have been the sales
invoices instead of the oral testimony of Teves. He did not produce the sales
invoices.
Teves further testified that Salvador T. Lluch was the president of the union; Nicanor
Halibas, the treasurer; Mariano Badelles, the general manager, and Luarentino
Badelles, a vice president.
Appellants' statement of facts. - To sustain their appeal, the appellants made the
following exceedingly short and deficient recital of the facts:
Sometime in the month of August, 1954, defendant, Allied Free Workers Union filed
an unfair labor practice case against defendant (should be plaintiff) and its branch
manager, Mr. Jose Teves, with the Court of Industrial Relations, Manila, and docketed
as Case No. 426-UPL: defendant union also filed a petition for certification election
docketed as Case No, 175-MC against plaintiff; defendant union also filed a notice of
strike dated August 27, 1954; the Secretary of Labor wired the public defender,
Iligan City, on August 27, 1954 (see annexes 1-4, motion to dismiss, Record on
Appeal, pp. 54-65).
To counteract these legitimate moves of labor, plaintiff filed the complaint docketed
as Civil Case No. 577 in the Court of First Instance of Lanao (now Lanao del Norte)
for damages, and/or resolution of contract with writ of preliminary injunction, On a
decision adverse to their interests, defendants take this appeal.
On the question of jurisdiction taken before this Honorable Tribunal in G.R. No. L8876, it was held:

... for the instant case merely refers to the recovery of damages, occasioned by the
picketing undertaken by the members of the union and the rescission of the arrastre
and stevedoring contract previously entered into between the parties.
The appellants did not discuss their oral and documentary evidence. *
First assignment of error. - The appellants contend that the trial court erred in
awarding to the company actual damages, amounting to P450,000, moral damages,
of P50,000 and attorney's Considering of P20,000, and in holding that the four
officers of the union are solidarily liable for the said damages.
Appellants' counsel assailed the award of actual damages, on the ground that the
auditors' reports, on which they were based, were hearsay.
After analyzing the nature of the damages, awarded, how the same were computed,
and the trustworthiness of the company's evidence, we find the first assignment of
error meritorious.
We have already stress that, on the basis of the reports of the two accountants, the
damages, claimed by the complaint as a matter of simple addition, does not reach
the sum of P 450,000 fixed by the trial court. The damages, shown in the
accountants' reports and in the statement made by the consignees. chief clerk (who
did not testify) amount to P349,245.37, or much less than P450,000.
The company argues that the accountants' reports are admissible in evidence
because of the rule that "when the original consists of numerous accounts or other
documents which cannot be examined in court without great loss-of time and the
fact sought to be established from them is oth the general result of the whole", the
original writings need not be produced (Sec. 2[e], Rule 130, Rules of Court).
That rule cannot be applied in this case because the voluminous character of the
records, on which the accountants' reports were based, was not duly established (U.
S. vs. Razon and Tayag, 37 Phil. 856, 861; 29 Am Jur 2nd 529).
It is also a requisite for the application of the rule that the records and accounts
should be made accessible to the adverse party so that the company, of the
summary may be tested on cross-examination (29 Am Jur 2nd 517-8; 32A C.J.S.
111).
What applies to this case is the general rule "that an audit made by, or the
testimony of, a private auditor, is inadmissible in evidence as proof of the original
records, books of accounts, reports or the like" (Anno 52 ALR 1266).
That general rule cannot be relaxed in this case because the company failed to
make a preliminary showing as to the difficulty or impossibility attending the
production of the records in court and their examination and analysis as evidence
by the court (29 Am Jur 2nd 529).
A close scrutiny of the accountants' reports reveals their lack of probative value.
The propriety of allowing the different items of damages, is discussed below.

Unrealized freight and passenger revenue for 1954 ascertained by Accountant


Demetrio S. Jayme. - In his report (Exh. A, pp. 134 to 147, Record on Appeal), Jayme
used the pronouns "we" and "our" and made reference to the examination made by
the "auditors" and his accounting office.
He did not disclose the names of other "auditors" who assisted him in making the
examination of the consignees. records.
He gave the impression that he was an independent accountant hired by the
company to make a "special investigation" of the consignees. losses for the period
from January 1 to September 7, 1954.
The truth is that Jayme was a "personal friend" of Teves, the consignees. branch
manager at Iligan City. Teves was the consignees. principal witness in this case. He
verified the complaint. herein. He signed for the company the stevedoring and
arrastre contract which he later rescinded. In fact, Teves intervened in the drafting
of the contract. It was his Idea that the company should not pay the arrastre and
stevedoring Considering and that those charges should be borne by the shippers
and consignees.
Jayme was not only the friend of Teves but was also his co-employee. Jayme was the
consignees. branch manager at Ozamis City and later at Cagayan de Oro City (2178 tsn May 20, 1960; Exh. 12). He suppressed that fact in his report of examination.
Apparently, the practice of accounting was his sideline or he practised accounting
and, as the saying goes, he moonlighted as the consignees. branch manager.
Obviously, Jayme would be biased for the company. He violated a rule of the
accountants' code of ethics by not disclosing in his report of examination that he
was an employee of the company (84 tsn June 2, 1960).
Accountant Jayme allegedly found from the consignees. records at Iligan City that its
freight and passenger revenue for the eight- month period from January 1 to August
31, 1953 amounted to P373,333.14 and that for the same period in 1954, that
revenue amounted to P470,716.29, or an increase of P97,383.12 (Statement D of
Exh. A, 145, Record on Appeal).
Jayme interpreted those figures as signifying that the company would have realized
more revenue if the union had rendered better service. He reasoned out that there
was a big volume of business in Iligan City due to the Maria Cristina Fertilizer Plant,
Iligan Steel Mill and NPC Hydroelectric Plant. He imagined that the consignees.
freight revenue during the first eight months of 1954 could have amounted to at
least P600,000 and that since it actually realized oth P 470,716.29, its loss of freight
revenue for that period could be "conservatively" estimated at least P100,000 (item
7 of the tabulation of damages).
He stated that he attached to his report on the comparative statement of gross
revenue a certificate of the captain of the vessel Panay showing the delays in its
dismissal in Iligan City as indicated in its logbook. No such document was attached
to Jayme's report.

And from the fact that the total fares received by the company during the eightmonth period were reduced in the sum of P3,951.58 (Jayme fixed the reduction at
the round figure of P4,000), he calculated that the company suffered a loss of at
least P20,000 in passenger revenue up to December 31, 1954 (Item 8 of the
tabulation of damages).
Jayme also included in his report (a) damages, amounting to P10,000 as his
estimate of losses supposedly "based on interviews with disinterested parties at the
wharf and city proper customers"; (b) damages, amounting to P3,764.50 allegedly
suffered in the operation of the vessels Mindoro and Panay from September 4 to 11,
1954, consisting of extra meals, expenses. for unloading cargo, estimated loss in
passage revenue for four voyages, and estimated loss from 14 re-routed freights to
competing vessels" (consisting of rice, corn and bananas), and (e) the sum of
P4,407.50 as alleged additional subsistence incurred for the crew of the Panay and
Mindoro from January 1 to August 31, 1954 (items 4, 5 and 6 of the tabulation of
damages). The records of the purser and chief steward were allegedly examined in
ascertaining those damages.
It would not be proper to allow Jayme's estimates as recoverable damages. They are
not supported by reliable evidence. They can hardly be sanctioned by the "generally
accepted auditing standards" alluded to in Jayme's report. The pertinent records of
the company should have been produced in court. The purser and steward did not
testify.
The rule is that the auditor's summary should not include his conclusions or
inferences (29 Am Jur 2d 519). His opinion is not evidence.
The trial court unreservedly gave credence to the conjectures of Jayme. Obviously,
his inflated guesses are inherently speculative and devoid of probative value.
Furthermore, his estimate of the unrealized freight revenue for January 1 to August
31, 1954 overlapped with his computation of the lost freight for the unloaded
74,751 bags of fertilizer and other cargoes covering the same period (Statement A
of Exh. A).
The foregoing discussion shows Jayme's unreliable modus operandi in ascertaining
the 1954 losses which the company claimed to have suffered in consequence of the
union's alleged inefficiency or poor service. It is noteworthy that those losses were
not averred with particularity and certitude in the consignees. complaint.
The same observations apply with equal cogency to the damages, amounting to
P40,407.20 as lost freight revenue also for the year 1954 (items 1 to 3 of the
tabulation of damages) which were computed by Accountant Jayme.
Those items refer to (1) the sum of P29,900.40 as lost freight revenue on 74,751
bags of fertilizer, already mentioned, which were booked for shipment in the
consignees. vessels from January 1 to August 31, 1954 but which were allegedly
loaded in other vessels; (2) P4,339.64 as unrealized freight revenue for other
cargoes booked in the consignees. vessels but not loaded therein during the same
eight-month period, and (3) P6,167,16 as unrealized freight revenue on shutout

cargoes not loaded in the consignees. vessels during the six-day period from
September 2 to 7, 1954.
Jayme allegedly based his computations on the records of the company which were
not produced in court. The union objected to Jayme's report as inadmissible under
the hearsay rule or as not being the best evidence.
Even if the presentation of the records themselves as exhibits should have been
dispensed with, yet the complaint to show good faith and fair dealing, could have
brought the records in court (manifests, bills of lading, receipts for the freights, if
any, etc.) and enabled the court and the union's counsel and its expert accountant
to verify the accuracy of Jayme's summaries.
Photostatic copies of some manifests and bills of lading proving that the company
was not able to collect the stipulated freight on the alleged shutout cargoes should
have been proforma. in evidence as supporting papers for Jayme's report. No such
exhibits were presented.
The flaw or error in relying merely on Jayme's summaries is that, as pointed out by
witness Mariano LL. Badelles, cargoes might be shutout due to causes other than
the supposed inefficiency of the union. He testified that cargoes were shutout
deliberately by the company because they could not be loaded in one vessel (for
example, 50,000 bags of fertilizer), or a shipper had no allotment, or because the
company did not want to load cargoes like bananas (189-194 tsn May 20, 1960).
Jayme's summaries did not take into account the probability that a part of the cargo
booked in the consignees. vessel for a certain date might not have been loaded on
that date but was loaded in another vessel of the company which docked at the port
a few days later, In that case, there would be no loss of freight revenue. The mere
shutting out of cargo in a particular voyage did not ipso facto produce loss of freight
revenue.
Our conclusion is that an injustice would be perpetrated if the damages,
aggregating P178,579 computed and estimated in the report of Jayme, a biased
witness, should be accepted at their face value.
Damages computed by Salvador M. Magante. - The company also claims as
damages, for the period from September 12 to December 28, 1954 lost freight
charges on shutout cargoes in the sum of P62,680.12, and the sum of P20,000 as
"overhead expenses. for delay of vessels in port", as set forth by Salvador M.
Magante, the consignees. chief clerk at Iligan City, in his statement, Exhibit B (items
9 and 10 of the tabulation of damages).
Magante did not testify on his statement. Instead, accountant Jayme, substituting
for Magante, testified on that statement. Jayme said that he verified the consignees.
records on which Magante based his statement. Jayme assured the court that the
figures in Magante's statement were supported by the consignees. records.
But as to the damages, of P20,000, Jayme said that he could not certify as to their
company, because he had not finished his investigation (33 tsn March 9, 1955). In
spite of that admission, the trial court allowed that item of damages.

The trial court erred in allowing the damages, totalling P82,680.12 because
Magante's statement, Exhibit B, is hearsay. Magante should have been proforma. as
a witness. Jayme was not competent to take his place since the statement was
prepared by Magante, not by Jayme. More appropriate still, the documents and
records on which the statement was based should have been proforma. as evidence
or at least brought to the court for examination by the union's counsel and its
accountant. The trial court required the production of the manifests supporting
Magante's statement (85-86 tsn march 9, 1955). Only one such manifest, Exhibit C,
was produced. The nonproduction of the other records was not explained.
Lost freight revenue and operating expenses for the forklifts. - The company
claimed as damages, the sum of P87,986.05 (P151,403.85 as erroneously computed
by the consignees. counsel, 163 tsn March 11, 1950) consisting of supposed
unrealized freight charges for shutout or unloaded cargoes for the year 1955 to
1959 (Exh. E to I, Items 11 to 20 of the tabulation of damages).
The claim is covered by the company's third supplemental complaint dated March 9,
1960 wherein it was alleged that due to the acts of the union and its officers the
company had suffered damages, of not less than P25,000 annually since 1955 (3203, Record on Appeal). That supplemental complaint was hurriedly filed during the
trial as directed by the trial court.
The said damages, were computed in the reports of Miguel J. Siojo, an accountant
who, for two days and nights, March 8 to 10, 1960, or shortly before and during the
trial, allegedly examined the consignees. record at Iligan City, such as its cash book,
cash vouchers, reports to the head office, shipping manifests, and liquidation
reports. Those records were not produced in court. Their nonproduction was not
explained. If the accountant was able to summarize the contents of those records in
two days, they could not have been very voluminous. They should have been
offered in evidence.
The alleged expenses. in the operation of the forklifts consisted of (a) the wates of
the operators hired by the company and (b) the cost of gasoline and oil and
expenses. for repair.
The company's theory is that under the 1952 contract (Exh. J) the union was
obligated to provide for forklifts in the loading and unloading of cargo. Inasmuch as
the union allegedly did not have forklifts, the complaint to expedite the arrastre and
stevedoring work, purchase forklifts, hired laborers to operate the same, and paid
for the maintenance expenses. The company treated those expenses as losses or
damages.
Those alleged damages, amounting to P87,986.05 are in the same category as the
depreciation allowances amounting to P38,835 which the company claimed for the
forklifts, pallet boards, tarpaulins and wire rope slings that it purchased for oth
P27,215, We have stated that the consignees. counsel ignored that depreciation in
his recapitulation of the damages, claimed by the plaintiff.

The union contends that Siojo's reports (Exh. E to I) were inadmissible evidence
because they were hearsay, meaning that the original documents, on which the
reports were based, were not presented in evidence and, therefore, appellants'
counsel and the court itself were not able to gauge the correctness of the figures or
data contained in the said reports. The person who had personal knowledge of the
operating expenses. was not examined in court.
We are of the opinion that, to avoid fraud or fabrication, the documents evidencing
the alleged expenses. should have been proforma. in evidence. Siojo's reports were
not the best evidence on the said operating expenses. The explanation of Badelles
with respect to shutout cargoes and our observations on Jayme's summaries are
applicable to accountant Siojo's reports.
A more substantial ground for rejecting Siojo's reports is that the said expenses, if
really incurred, cannot be properly treated as darn ages to the company.
The union's witness, Mariano LI. Badelles, testified that the consignees. forklifts
were not used exclusively on the wharf. They were used in the fertilizer and carbide
plants. Sometimes, the union supplied the driver and the gasoline for the operation
of the forklifts (174-177 tsn May 20, 1960).
Moreover, as stated earlier, the company was not paying the union a single centavo
for arrastre and stevedoring work. The shippers and consignees paid for the arrastre
service rendered by the union. The union did not receive any compensation for
stevedoring work.
The company complained that the union had been rendering unsatisfactory arrastre
and stevedoring services. That grievance was controverted by the union.
The use of the forklifts, tarpaulins pallet boards and wire rope slings immeasurably
benefitted the company. It is not proper nor just that the consignees. investment in
those pieces of equipment should be considered damages, just because it was able
to bind the union to a one-sided contract which exempted it from the payment of
arrastre and stevedoring Considering and which impliedly obligated the union to
purchase the said equipment.
If the service rendered by the union members was unsatisfactory, it must be
because the poor stevedores were underfed and underpaid. They were underfed
and underpaid because the company was astute enough to insure that it would
obtain stevedoring service without paying for it.
If to improve the arrastre and stevedoring service, the company had to incur
expenses. for the purchase of forklifts, pallet boards, tarpaulins and wire rope slings
and for the operation of the forklifts, the union should not be required to reimburse
the company for those expenses. The company should bear those expenses.
because the same redounded to its benefit.
The trial court erred in ordering the union and its officials to pay the amount of the
said expenses. as damages, to the company.

Moral damages and attorney's fees. - Considering that the consignees. claim for
moral damages, was based on the same facts on which it predicated its claim for
actual deduction which we have found to be groundless, it follows that the
company, a juridical person, is not entitled to moral damages.
Anyway, the company did not plead and prove moral damages. It merely claimed
moral damages, in the prayer of its complaint. That is not sufficient (Darang vs. Ty
Belizar, L-19487, January 31, 1967, 19 SCRA 214, 222).
Under the facts of this case, we do not find any justification for awarding attorney's
Considering to the company. Hence, the trial court's award of P20,000 as attorney's
Considering is set aside.
Appellants' first assignment of error, although not properly argued by their counsel,
should be sustained.
Other assignments of error. - The union and its officers contend that the lower court
erred in dismissing their counterclaims. Their counsel did not even bother to state in
their brief the amount of the counterclaims.
The union filed counterclaims for P200,000 as compensation for stevedoring
services from August, 1952 to March 4, 1955; P500,000 as deduction P10,000 as
attorney's Considering and P5,000 as premium on the counterbond (251-2, Record
on Appeal). In their supplemental counterclaim, they demanded P500,000 as
stevedoring charges for the period from March 4, 1955 to March 4, 1960 and
additional damages, of P10,000 (308-10, Record on Appeal). The trial court
dismissed the said counterclaims.
The appellants in their three-sentence argument in support of their counterclaims
alleged that the company's bill of lading provided that the unloading of the cargoes
was at the consignees. expense (Exh. 1); that the company had not paid the sum of
P500,000 as compensation for the stevedoring services rendered by the laborers up
to 1960, and that the stipulation in the arrastre contract, "that the Compaia
Maritima shall not be liable for the payment of the services rendered by the Allied
Free Workers Union for the loading and deliveries of cargoes as same is payable by
the owners and consignees of cargoes, as it has been the practice in the port of
Iligan City" (Exh. J, pp. 14, 334, 359, 500 Record on Appeal), was 'non- operative"
and void, "being contrary to morals and public policy".
That superficial argument is not well-taken. The printed stipulation in the bill of
lading was superseded by the contractual stipulation. The contract was prepared by
the union officials. As already noted, it was stipulated in the contract that the
stevedoring and arrastre charges should be paid by the shippers and consignees in
consonance with the practice in Iligan City. That stipulation was binding and
enforceable.
The supposed illegality of that stipulation was not squarely raised by the union and
its officials in their answer. They merely averred that the contract did not express
the true agreement of the parties. They did not sue for reformation of the

instrument evidencing the contract. The lower court did not err in dismissing
defendants' counterclaims.
The other two errors assigned by the appellants, namely, that the lower court erred
in issuing a permanent injunction against them and in executing its decision
pending appeal, are devoid of merit.
The appellants invoke section 9(d) of the Magna Carta of Labor regarding the
issuance of injunctions. That section has no application to this case because it was
definitively ruled by this Court in the certification and unfair labor practice cases
that there is no employer-employee relationship between the company and the
stevedores. (They work under the cabo system).
The lower court did not execute the money aspect of its judgment. It merely
required the defendants to file a supersedeas bond of P50,000.
As to the injunction, it should be recalled that it was this Court which, in its
resolution of May 16, 1962 in the execution and appeal incident (L-19651, 17 SCRA
513), allowed the company to terminate the stevedoring and arrastre work of the
union and to use another union to perform that work.
The company had the contractual right to terminate the 1952 contract (Taylor vs. Uy
Teng Piao, 43 Phil. 873). The lower court did not err in sustaining the consignees.
rescission of the contract and in enjoining the union from performing arrastre and
stevedoring work.
WHEREFORE, that portion of the trial court's judgment declaring the arrastre and
stevedoring contract terminated, permanently enjoining the union and its officials
from performing arrastre and stevedoring work for the vessels of the Compaia
Maritima, and dismissing defendants' counterclaim is affirmed.
The lower court's award of damages, is reversed and set aside. No costs.
SO ORDERED.

G.R. No. 83377

February 9, 1993

BASILIO DE VERA, LUIS DE VERA, FELIPE DE VERA, HEIRS OF EUSTAQUIA DE VERAPAPA represented by GLICERIA PAPA-FRANCISCO, et al., petitioners,
vs.
SPOUSES MARIANO AGUILAR and LEONA V. AGUILAR, respondents.
Pablo M. Gancayaco for petitioners.
De Mesa, Villarica & Associates for respondents.

CAMPOS, JR., J.:


This is a petition for review on certiorari of the decision * of the Court of Appeals
dated November 27, 1987 in CA-GR CV No. 07448 entitled, "Basilio de Vera, Luis de
Vera, Felipe de Vera, Heirs of Eustaquia de Vera-Papa, represented by Gliceria PapaFrancisco, and Heirs of Maria de Vera-Torres, represented by Luis V. Torres, plaintiffsappellees versus Spouses Mariano Aguilar and Leona V. Aguilar, defendantsappellants", which reversed the decision ** of the Regional Trial Court of Bulacan,
Third Judicial Region, Branch 14, for failure of petitioners to prove the loss or
destruction of the original deed of sale and of all its duplicate original copies.
The undisputed facts are as follows:
Petitioners Basilio, Luis, Felipe, Eustaquia and Maria, all surnamed de Vera and
respondent Leona, married to respondent Mariano Aguilar, are the children and
heirs of the late Marcosa Bernabe who died on May 10, 1960. In her lifetime,
Marcosa Bernabe owned the disputed parcel of land situated in Camalig,
Meycauayan, Bulacan, with an area of 4,195 square meters, designated as
Cadastral Lot No. 3621, Cad. 337, Case No. 4, Meycauayan Cadastre.
The disputed property was mortgaged by petitioners Basilio and Felipe de Vera to a
certain Atty. Leonardo Bordador. When the mortgage had matured, the respondents
redeemed the property from Atty. Leonardo Bordador and in turn Marcosa Bernabe
sold the same to them as evidenced by a deed of absolute sale dated February 11,
1956.
On February 13, 1956, the respondents registered the deed with the Registry of
Deeds of Bulacan resulting in the cancellation of the tax declaration in the name of
Marcosa Bernabe and the issuance of another in the name of the Aguilars. Since
then and up to the present, the Aguilars have been paying taxes on the land.
On July 20, 1977, respondent Mariano Aguilar was issued a free patent to the land
on the basis of which Original Certificate of Title No. P-1356(M) was issued in his
name.
On September 1, 1980, the petitioners wrote to the respondents claiming that as
children of Marcosa Bernabe, they were co-owners of the property and demanded

partition thereof on threats that the respondents would be charged with perjury
and/or falsification. The petitioners also claimed that the respondents had resold the
property to Marcosa Bernabe on April 28, 1959.
On September 27, 1980, the respondents wrote in reply to the petitioners that they
were the sole owners of the disputed parcel of land and denied that the land was
resold to Marcosa Bernabe.
True to petitioners' threat, they filed a falsification case against the respondents.
However, on March 31, 1981, Assistant Provincial Fiscal Arsenio N. Mercado of
Bulacan recommended dismissal of the charge of falsification of public document
against the respondents for lack of a prima facie case.
On March 26, 1981, petitioners filed a suit for reconveyance of the lot covered by
Original Certificate of Title No. P-1356(M).
On July 31, 1985, the trial court rendered its decision *** the dispositive portion of
which reads as follows:
WHEREFORE, judgment is hereby rendered ordering defendants:
1.

To reconvey the property in question to the plaintiffs;

2.

To pay plaintiffs P10,000.00 as litigation expenses;

3.

To pay plaintiffs P5,000.00 as exemplary damages;

4.

To pay P10,000.00 as attorney's fees.

SO ORDERED. 1
In ruling in favor of the petitioners, the trial court admitted, over the objection of the
respondents, Exhibit A purporting to be a xeroxed copy of an alleged deed of sale
executed on April 28, 1959 by the respondents selling, transferring and conveying
unto Marcosa Bernabe the disputed parcel of land for and in consideration of
P1,500.00.
Not contented with the decision, respondents appealed to the Court of Appeals
contending that they never sold back to Marcosa Bernabe the disputed parcel of
land. Furthermore, respondents contended that since the petitioners have failed to
produce the original of the alleged deed of sale dated April 28, 1959, the same was
not the best evidence of the alleged sale hence it should have been excluded and
should not have been accorded any evidentiary value. On the other hand, the
petitioners claimed that the existence of the document of sale dated April 28, 1959
had been duly established by the testimony of the notary public before whom it was
acknowledged and by Luis de Vera who was present during its execution and that
the loss of the original document had been proven by the testimony of the
representatives of the offices of the National Archives and the Provincial Assessor of
Bulacan.

On November 29, 1987, the Court of Appeals rendered its decision reversing the
trial court's decision. It found that the loss or destruction of the original deed of sale
has not been duly proven by the petitioners. Hence, secondary evidence, i.e.,
presentation of the xeroxed copy of the alleged deed of sale is inadmissible.
Hence this petition.
The crux of this case is whether or not the petitioners have satisfactorily proven the
loss of the original deed of sale so as to allow the presentation of the xeroxed copy
of the same.
We rule in the negative.
Section 4 of Rule 130 (now Section 5, Rule 130) of the Rules of Court on Secondary
Evidence states:
Sec. 4.
Secondary evidence when original is lost or destroyed. When the
original writing has been lost or destroyed, or cannot be produced in court, upon
proof of its execution and loss or destruction, or unavailability, its contents may be
proved by a copy, or by a recital of its contents in some authentic document, or by
the recollection of witnesses.
Secondary evidence is admissible when the original documents were actually lost or
destroyed. But prior to the introduction of such secondary evidence, the proponent
must establish the former existence of the instrument. The correct order of proof is
as follows: Existence; execution; loss; contents although this order may be changed
if necessary in the discretion of the court. The sufficiency of proof offered as a
predicate for the admission of an alleged lost deed lies within the judicial discretion
of the trial court under all the circumstances of the particular case. 2
A reading of the decision of the trial court shows that it merely ruled on the
existence and due execution of the alleged deed of sale dated April 28, 1959. It
failed to look into the facts and circumstances surrounding the loss or destruction of
the original copies of the alleged deed of sale.
In the case at bar, the existence of an alleged sale of a parcel of land was proved by
the presentation of a xeroxed copy of the alleged deed of absolute sale.
In establishing the execution of a document the same may be established by the
person or persons who executed it, by the person before whom its execution was
acknowledged, or by any person who was present and saw it executed or who, after
its execution, saw it and recognized the signatures; or by a person to whom the
parties to the instrument had previously confessed the execution thereof. 3
We agree with the trial court's findings that petitioners have sufficiently established
the due execution of the alleged deed of sale through the testimony of the notary
public to wit:
Preponderance of evidence clearly disclosed the facts that Atty. Ismael Estela
prepared Exhibit A. Atty. Emiliano Ibasco, Jr. positively identified the signatures

appearing therein to be that (sic) of the spouses and witnesses Luis de Vera and
Ismael Estela, in his capacity as Notary Public who ratified the document. 4
After the due execution of the document has been established, it must next be
proved that said document has been lost or destroyed. The destruction of the
instrument may be proved by any person knowing the fact. The loss may be shown
by any person who knew the fact of its loss, or by any one who had made, in the
judgment of the court, a sufficient examination in the place or places where the
document or papers of similar character are usually kept by the person in whose
custody the document lost was, and has been unable to find it; or who has made
any other investigation which is sufficient to satisfy the court that the instrument is
indeed lost. 5
However, all duplicates or counterparts must be accounted for before using copies.
For, since all the duplicates or multiplicates are parts of the writing itself to be
proved, no excuse for non-production of the writing itself can be regarded as
established until it appears that all of its parts are unavailable (i.e. lost, retained by
the opponent or by a third person or the like). 6
In the case at bar, Atty. Emiliano Ibasco, Jr., notary public who notarized the
document testified that the alleged deed of sale has about four or five original
copies. 7 Hence, all originals must be accounted for before secondary evidence can
be given of any one. This petitioners failed to do. Records show that petitioners
merely accounted for three out of four or five original copies.
In reversing the trial court, the respondent Court of Appeals considered the
following points:
Asked on the witness stand where the original of the document (Exhibit A) was,
plaintiff-appellee Luis de Vera answered that it was with the Provincial Assessor in
Malolos, Bulacan, whereupon the appellees reserved its (sic) right to present it in
evidence (p. 11, tsn., August 11, 1981, Steno, Tecson). The same question
propounded to the same witness at the next hearing, he replied that in the early
part of 1976 his sister Maria borrowed from him the original document and a
certified true copy thereof and brought them to the Office of the Register of Deeds
in Malolos "for the purpose of having it registered;" and that when she returned she
told him that the original copy of the document was submitted to that office "and it
(the property) was transferred in the name of Marcosa Bernabe instead of Mariano
Aguilar" (p. 8, tsn., December 10, 1981, Steno, Crisostomo; p. 9, tsn., Mar. 16, 1982,
Steno, Vallarta).
Indeed, upon the appellees' own evidence the original of the deed of sale in
question, a purported xerox copy and certified true copy of which are marked as
Exhibits A and B, has not been lost or destroyed. It was submitted to the Office of
the Register of Deeds of Malolos for registration. The appellees, therefore, should
have asked the office to produce it in court and if it could not be produced for one
reason or another should have called the Register of Deeds or his representative to
explain why. That they failed to do. The loss or destruction of the original of the
document in question has not, therefore, been established. Hence, secondary
evidence of it is inadmissible . . . .

Neither did the testimony of notary public Ibasco, Jr. to the effect that he did not
have a copy of the deed of sale in question because his files were burned when his
office at Ronquillo Street, Manila was gutted by fire in 1971 and 1972 (p. 4, tsn.,
November 10, 1981, Steno, Crisostomo) establish the loss or destruction of the
original document in question. What was lost or destroyed in the custody of Atty.
Ibasco, Jr. was but one of the duplicate original copies on file with him. Nor did the
testimony of Hipolito Timoteo, representative of the Assessor's Office of Bulacan, to
the effect that he failed to see the deed of absolute sale annotated on the simple
copy of tax declaration No. 15412 (p. 7, tsn., Aug. 12, 1982, Steno, Vallarta) and of
David Montenegro, Jr. of the National Archives to the effect that his office had no
copy of the document in question because the notary public might not have
submitted a copy thereof; or that it was lost or destroyed during the transmittal;
and that most of the record before 1960 were destroyed by termites (pp. 8-12, tsn.,
Oct. 5, 1982, Steno, Tecson), prove loss or destruction of the original and of all the
duplicate original copies of the document in question. 8
We find no cogent reason to rule otherwise.
WHEREFORE, the decision of the Court of Appeals dated November 27, 1987 is
hereby AFFIRMED.
SO ORDERED.

G.R. No. 170491

April 4, 2007

NATIONAL POWER CORPORATION, Petitioner,


vs.
HON. RAMON G. CODILLA, JR., Presiding Judge, RTC of Cebu, Br. 19, BANGPAI
SHIPPING COMPANY, and WALLEM SHIPPING, INCORPORATED, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil
Procedure, assailing the Decision1 of the Court of Appeals in CA-G.R. CEB-SP No.
00848, dated 9 November 2005, which dismissed the Petition for Certiorari filed by
the National Power Corporation seeking to set aside the Order2 issued by the
Regional Trial Court (RTC) of Cebu, Branch 19 dated 16 November 2004, denying
admission and excluding from the records plaintiffs (herein petitioner) Exhibits "A",
"C", "D", "E", "H" and its sub-markings, "I", "J", and its sub-markings, "K", "L", "M"
and its sub-markings, "N" and its sub-markings, "O", "P" and its sub-markings, "Q"
and its sub-markings, "R" and "S" and its sub-markings.
On 20 April 1996, M/V Dibena Win, a vessel of foreign registry owned and operated
by private respondent Bangpai Shipping, Co., allegedly bumped and damaged
petitioners Power Barge 209 which was then moored at the Cebu International Port.
Thus, on 26 April 1996, petitioner filed before the Cebu RTC a complaint for
damages against private respondent Bangpai Shipping Co., for the alleged damages
caused on petitioners power barges.
Thereafter, petitioner filed an Amended Complaint dated 8 July 1996 impleading
herein private respondent Wallem Shipping, Inc., as additional defendant,
contending that the latter is a ship agent of Bangpai Shipping Co. On 18 September
1996, Wallem Shipping, Inc. filed a Motion to Dismiss which was subsequently
denied by public respondent Judge in an Order dated 20 October 1998. Bangpai
Shipping Co. likewise filed a Motion to Dismiss which was also denied by public
respondent Judge in an Order issued on 24 January 2003.
Petitioner, after adducing evidence during the trial of the case, filed a formal offer of
evidence before the lower court on 2 February 2004 consisting of Exhibits "A" to "V"
together with the sub-marked portions thereof. Consequently, private respondents
Bangpai Shipping Co. and Wallem Shipping, Inc. filed their respective objections to
petitioners formal offer of evidence.
On 16 November 2004, public respondent judge issued the assailed order denying
the admission and excluding from the records petitioners Exhibits "A", "C", "D", "E",
"H" and its sub-markings, "I", "J" and its sub-markings, "K", "L", "M" and its submarkings, "N" and its sub-markings, "O", "P" and its sub-markings, "Q" and its submarkings, "R" and "S" and its sub-markings. According to the court a quo:
The Court finds merit in the objections raised and the motion to strike out filed
respectively by the defendants. The record shows that the plaintiff has been given

every opportunity to present the originals of the Xerox or photocopies of the


documents it offered. It never produced the originals. The plaintiff attempted to
justify the admission of the photocopies by contending that "the photocopies
offered are equivalent to the original of the document" on the basis of the Electronic
Evidence (Comment to Defendant Wallem Philippines Objections and Motion to
Strike). But as rightly pointed out in defendant Wallems Reply to the Comment of
Plaintiff, the Xerox copies do not constitute the electronic evidence defined in
Section 1 of Rule 2 of the Rules on Electronic Evidence as follows:
"(h) "Electronic document" refers to information or the representation of
information, data, figures, symbols or other models of written expression, described
or however represented, by which a right is established or an obligation
extinguished, or by which a fact may be proved and affirmed, which is received,
recorded, transmitted, stored, processed, retrieved or produced electronically. It
includes digitally signed documents and any printout, readable by sight or other
means which accurately reflects the electronic data message or electronic
document. For the purpose of these Rules, the term "electronic document" may be
used interchangeably with "electronic data message".
The information in those Xerox or photocopies was not received, recorded, retrieved
or produced electronically. Moreover, such electronic evidence must be
authenticated (Sections 1 and 2, Rule 5, Rules on Electronic Evidence), which the
plaintiff failed to do. Finally, the required Affidavit to prove the admissibility and
evidentiary weight of the alleged electronic evidence (Sec. 1, Rule 9, Ibid) was not
executed, much less presented in evidence.
The Xerox or photocopies offered should, therefore, be stricken off the record. Aside
from their being not properly identified by any competent witness, the loss of the
principals thereof was not established by any competent proof.
xxxx
WHEREFORE, plaintiffs Exhibits "A", "C", "D", "E", "H" and its sub-markings, "I", "J",
and its sub-markings, "K", "L", "M" and its sub-markings, "N" and its sub-markings,
"O", "P" and its sub-markings, "Q" and its sub-markings, and "R" are hereby DENIED
admission and excluded from the records. However, these excluded evidence should
be attached to the records of this case to enable the appellate court to pass upon
them should an appeal be taken from the decision on the merits to be rendered
upon the termination of the trial of this case.
Exhibits "S" and its sub-markings are also DENIED admission for lack of proper
identification since the witness who brought these pictures expressly admitted that
he was not present when the photos were taken and had not knowledge when the
same where taken.3
Upon denial of petitioners Motion for Reconsideration in an Order dated 20 April
2005, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of Civil
Procedure before the Court of Appeals maintaining that public respondent Judge
acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
denying the admission of its Exhibits "A", "C", "D", "E", "H" and its sub-markings, "I",

"J" and its sub-markings, "K", "L", "M" and its sub-markings, "N" and its submarkings, "O", "P" and its sub-markings, "Q" and its sub-markings, "R", and "S" and
its sub-markings.
On 9 November 2005, the appellate court issued a Decision dismissing petitioners
petition for certiorari, the pertinent portions of which elucidate:
After a judicious scrutiny of the record of the case on hand, together with the rules
and jurisprudence which are applicable in the premises, we have come up with a
finding that the petition for certiorari filed in this case is not meritorious.
It appears that there is no sufficient showing by the petitioner that the respondent
judge acted with grave abuse of discretion in issuing the assailed orders in Civil
Case No. CEB-18662. As what our jurisprudence tells us, grave abuse of discretion is
meant such capricious and whimsical exercise of judgment as would be equivalent
to lack of jurisdiction x x x.
In the case at bench, what has been shown to the contrary by the totality of the
record on hand is that the respondent judge acted correctly and within the pale of
his sound discretion in issuing the assailed order, dated November 16, 2004, in Civil
Case No. CEB-18662.
Indeed, it appears that the pieces of petitioners documentary evidence which were
denied admission by the respondent judge were not properly identified by any
competent witness. As pointed out by the respondent Bangpai Shipping Company in
its comment on the petition filed in this case which reproduces some excerpts of the
testimonies in the court a quo of Atty. Marianito De Los Santos, Engr. Nestor
Enriquez, Jr. and Mr. Rodulfo I. Pagaling, the said witnesses did not have personal
knowledge of and participation in the preparation and making of the pieces of
documentary evidence denied admission by respondent judge x x x. In other words,
there was lack of proper identification of said pieces of documentary evidence. x x
x.
Then another ground for denying admission of petitioners Exhibits A, C, D, E, H, I, J,
K, L, M, N, O, P, Q, R, and S by the respondent judge is that said pieces of
documentary evidence were merely photocopies of purported documents or papers.
There is no gainsaying the fact that the respondent judge acted within the pale of
his discretion when he denied admission of said documentary evidence. Section 3 of
Rule 130 of the Rules of Court of the Philippines is very explicit in providing that,
when the subject of inquiry are the contents of documents, no evidence shall be
admissible other than the original documents themselves, except in certain cases
specifically so enumerated therein, and the petitioner has not shown that the nonpresentation or non-production of its original documentary pieces of evidence falls
under such exceptions. As aptly pointed out by the respondent judge in the order
issued by him on November 16, 2004:
"x x x The record shows that the plaintiff (petitioner herein) has been given every
opportunity to present the originals of the Xerox or photocopies of the documents it
offered. It never produced said originals."

So, the petitioner has only itself to blame for the respondent judges denial of
admission of its aforementioned documentary evidence.
Of course, the petitioner tries to contend that the photocopies of documents offered
by it are equivalent to the original documents that it sought to offer in evidence,
based on the Rules on Electronic Evidence which were in force and effect since
August 1, 2001. However, such a contention is devoid of merit. The pieces of
documentary evidence offered by the petitioner in Civil Case CEB-18662 which were
denied admission by the respondent judge do not actually constitute as electronic
evidence as defined in the Rules on Electronic Evidence. The informations therein
were not received, retrieved or produced electronically. The petitioner has not
adequately established that its documentary evidence were electronic evidence. it
has not properly authenticated such evidence as electronic documents, assuming
arguendo that they are. Lastly, the petitioner has not properly established by
affidavit pursuant to Rule 9 of the Rules on Electronic Evidence the admissibility and
evidentiary weight of said documentary evidence.
Thus, by any legal yardstick, it is manifest that the respondent judge did not commit
grave abuse of discretion in denying admission of the aforementioned documentary
evidence of petitioner.
But even if it be granted just for the sake of argument that the respondent judge
committed an error in denying the aforementioned documentary evidence of the
petitioner, still the petition for certiorari filed in this case must fail. Such error would
at most be only an error of law and not an error of jurisdiction. In Lee vs. People,
393 SCRA 397, the Supreme Court of the Philippines said that certiorari will not lie in
case of an error of law. x x x.
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us
DISMISSING the petition filed in this case and AFFIRMING the assailed orders issued
by respondent judge in Civil Case No. CEB-18662.4
Aggrieved by the aforequoted decision, petitioner filed the instant petition.
The focal point of this entire controversy is petitioners obstinate contention that the
photocopies it offered as formal evidence before the trial court are the functional
equivalent of their original based on its inimitable interpretation of the Rules on
Electronic Evidence.
Petitioner insists that, contrary to the rulings of both the trial court and the
appellate court, the photocopies it presented as documentary evidence actually
constitute electronic evidence based on its own premise that an "electronic
document" as defined under Section 1(h), Rule 2 of the Rules on Electronic Evidence
is not limited to information that is received, recorded, retrieved or produced
electronically. Rather, petitioner maintains that an "electronic document" can also
refer to other modes of written expression that is produced electronically, such as
photocopies, as included in the sections catch-all proviso: "any print-out or output,
readable by sight or other means".
We do not agree.

In order to shed light to the issue of whether or not the photocopies are indeed
electronic documents as contemplated in Republic Act No. 8792 or the
Implementing Rules and Regulations of the Electronic Commerce Act, as well as the
Rules on Electronic Evidence, we shall enumerate the following documents offered
as evidence by the petitioner, to wit:
1. Exhibit "A" is a photocopy of a letter manually signed by a certain Jose C. Troyo,
with "RECEIVED" stamped thereon, together with a handwritten date;
2. Exhibit "C" is a photocopy of a list of estimated cost of damages of petitioners
power barges 207 and 209 prepared by Hopewell Mobile Power Systems Corporation
and manually signed by Messrs. Rex Malaluan and Virgilio Asprer;
3. Exhibit "D" is a photocopy of a letter manually signed by a certain Nestor G.
Enriquez, Jr., with "RECEIVED" stamped thereon, together with a handwritten
notation of the date it was received;
4. Exhibit "E" is a photocopy of a Standard Marine Protest Form which was filled up
and accomplished by Rex Joel C. Malaluan in his own handwriting and signed by
him. Portions of the Jurat were handwritten, and manually signed by the Notary
Public;
5. Exhibit "H" is a photocopy of a letter manually signed by Mr. Nestor G. Enriquez,
Jr. with "RECEIVED" stamped thereon, together with a handwritten notation of the
date it was received;
6. Exhibit "I" is a photocopy of a computation of the estimated energy loss allegedly
suffered by petitioner which was manually signed by Mr. Nestor G. Enriquez, Jr.;
7. Exhibit "J" is a photocopy of a letter containing the breakdown of the cost
estimate, manually signed by Mr. Nestor G. Enriquez, Jr., with "RECEIVED" stamped
thereon, together with a handwritten notation of the date it was received, and other
handwritten notations;
8. Exhibit "K" is a photocopy of the Subpoena Duces Tecum Ad Testificandum written
using a manual typewriter, signed manually by Atty. Ofelia Polo-De Los Reyes, with a
handwritten notation when it was received by the party;
9. Exhibit "L" is a photocopy of a portion of the electricity supply and operation and
maintenance agreement between petitioner and Hopewell, containing handwritten
notations and every page containing three unidentified manually placed signatures;
10. Exhibit "M" is a photocopy of the Notice of Termination with attachments
addressed to Rex Joel C. Malaluan, manually signed by Jaime S. Patinio, with a
handwritten notation of the date it was received. The sub-markings also contain
manual signatures and/or handwritten notations;

11. Exhibit "N" is a photocopy of a letter of termination with attachments addressed


to VIrgilio Asprer and manually signed by Jaime S. Patino. The sub-markings contain
manual signatures and/or handwritten notations;
12. Exhibit "O" is the same photocopied document marked as Annex C;
13. Exhibit "P" is a photocopy of an incident report manually signed by Messrs.
Malaluan and Bautista and by the Notary Public, with other handwritten notations;
14. Exhibit "Q" is a photocopy of a letter manually signed by Virgilio Asprer and by a
Notary Public, together with other handwritten notations.
On the other hand, an "electronic document" refers to information or the
representation of information, data, figures, symbols or other models of written
expression, described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be proved and affirmed, which is
received, recorded, transmitted, stored, processed, retrieved or produced
electronically.5 It includes digitally signed documents and any printout, readable by
sight or other means which accurately reflects the electronic data message or
electronic document.6
The rules use the word "information" to define an electronic document received,
recorded, transmitted, stored, processed, retrieved or produced electronically. This
would suggest that an electronic document is relevant only in terms of the
information contained therein, similar to any other document which is presented in
evidence as proof of its contents.7 However, what differentiates an electronic
document from a paper-based document is the manner by which the information is
processed; clearly, the information contained in an electronic document is received,
recorded, transmitted, stored, processed, retrieved or produced electronically.
A perusal of the information contained in the photocopies submitted by petitioner
will reveal that not all of the contents therein, such as the signatures of the persons
who purportedly signed the documents, may be recorded or produced electronically.
By no stretch of the imagination can a persons signature affixed manually be
considered as information electronically received, recorded, transmitted, stored,
processed, retrieved or produced. Hence, the argument of petitioner that since
these paper printouts were produced through an electronic process, then these
photocopies are electronic documents as defined in the Rules on Electronic
Evidence is obviously an erroneous, if not preposterous, interpretation of the law.
Having thus declared that the offered photocopies are not tantamount to electronic
documents, it is consequential that the same may not be considered as the
functional equivalent of their original as decreed in the law.
Furthermore, no error can be ascribed to the court a quo in denying admission and
excluding from the records petitioners Exhibits "A", "C", "D", "E", "H" and its submarkings, "I", "J" and its sub-markings, "K", "L", "M" and its sub-markings, "N" and
its sub-markings, "O", "P" and its sub-markings, "Q" and its sub-markings, and "R".
The trial court was correct in rejecting these photocopies as they violate the best
evidence rule and are therefore of no probative value being incompetent pieces of
evidence. Before the onset of liberal rules of discovery, and modern technique of

electronic copying, the best evidence rule was designed to guard against
incomplete or fraudulent proof and the introduction of altered copies and the
withholding of the originals.8 But the modern justification for the rule has expanded
from the prevention of fraud to a recognition that writings occupy a central position
in the law.9 The importance of the precise terms of writings in the world of legal
relations, the fallibility of the human memory as reliable evidence of the terms, and
the hazards of inaccurate or incomplete duplicate are the concerns addressed by
the best evidence rule.10
Moreover, as mandated under Section 2, Rule 130 of the Rules of Court:
"SECTION 2. Original writing must be produced; exceptions. There can be no
evidence of a writing the contents of which is the subject of inquiry, other than the
original writing itself, except in the following cases:
(a) When the original has been lost, destroyed, or cannot be produced in court;
(b) When the original is in the possession of the party against whom the evidence is
offered, and the latter fails to produce it after reasonable notice;
(c) When the original is a record or other document in the custody of a public
officer;
(d) When the original has been recorded in an existing record a certified copy of
which is made evidence by law;
(e) When the original consists of numerous accounts or other documents which
cannot be examined in court without great loss of time and the fact sought to be
established from them is only the general result of the whole."
When the original document has been lost or destroyed, or cannot be produced in
court, the offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by a copy, or by
a recital of its contents in some authentic document, or by the testimony of
witnesses in the order stated.11 The offeror of secondary evidence is burdened to
prove the predicates thereof: (a) the loss or destruction of the original without bad
faith on the part of the proponent/offeror which can be shown by circumstantial
evidence of routine practices of destruction of documents;12 (b) the proponent
must prove by a fair preponderance of evidence as to raise a reasonable inference
of the loss or destruction of the original copy; and (c) it must be shown that a
diligent and bona fide but unsuccessful search has been made for the document in
the proper place or places.13 However, in the case at bar, though petitioner insisted
in offering the photocopies as documentary evidence, it failed to establish that such
offer was made in accordance with the exceptions as enumerated under the
abovequoted rule. Accordingly, we find no error in the Order of the court a quo
denying admissibility of the photocopies offered by petitioner as documentary
evidence.
Finally, it perplexes this Court why petitioner continued to obdurately disregard the
opportunities given by the trial court for it to present the originals of the

photocopies it presented yet comes before us now praying that it be allowed to


present the originals of the exhibits that were denied admission or in case the same
are lost, to lay the predicate for the admission of secondary evidence. Had
petitioner presented the originals of the documents to the court instead of the
photocopies it obstinately offered as evidence, or at the very least laid the predicate
for the admission of said photocopies, this controversy would not have
unnecessarily been brought before the appellate court and finally to this Court for
adjudication. Had it not been for petitioners intransigence, the merits of petitioners
complaint for damages would have been decided upon by the trial court long ago.
As aptly articulated by the Court of Appeals, petitioner has only itself to blame for
the respondent judges denial of admission of its aforementioned documentary
evidence and consequently, the denial of its prayer to be given another opportunity
to present the originals of the documents that were denied admission nor to lay the
predicate for the admission of secondary evidence in case the same has been lost.
WHEREFORE, premises considered, the instant petition is hereby DENIED. The
Decision of the Court of Appeals in CA-G.R. CEB-SP No. 00848, dated 9 November
2005 is hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate Justice
WE CONCUR:

REPUBLIC OF THE PHILIPPINES


Petitioner,

- versus

MA. IMELDA IMEE R. MARCOS-MANOTOC, FERDINAND BONGBONG R. MARCOS, JR.,


GREGORIO MA. ARANETA III, IRENE R. MARCOS-ARANETA, YEUNG CHUN FAN, YEUNG
CHUN HO, YEUNG CHUN KAM, and PANTRANCO EMPLOYEES ASSOCIATION (PEA)PTGWO,
Respondents.
G. R. No. 171701
Present:
BRION, J.,*
Acting Chairperson,
VILLARAMA, JR.,**
PEREZ,
SERENO, and
REYES, JJ.

Promulgated:
February 8, 2012
x--------------------------------------------------x
DECISION
SERENO, J.:
Before this Court is a Petition for Review filed by the Republic of the Philippines
assailing the Resolutions[1] issued by the Sandiganbayan in connection with an
alleged portion of the Marcoses supposed ill-gotten wealth.
This case involves P200 billion of the Marcoses alleged accumulated ill-gotten
wealth. It also includes the alleged use of the media networks IBC-13, BBC-2 and
RPN-9 for the Marcos familys personal benefit; the alleged use of De Soleil Apparel
for dollar salting; and the alleged illegal acquisition and operation of the bus
company Pantranco North Express, Inc. (Pantranco).
The Facts

After the EDSA People Power Revolution in 1986, the first executive act of then
President Corazon C. Aquino was to create the Presidential Commission on Good
Government (PCGG). Pursuant to Executive Order No. 1, the PCGG was given the
following mandate:
Sec. 2. The Commission shall be charged with the task of assisting the President in
regard to the following matters:
(a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand
E. Marcos, his immediate family, relatives, subordinates and close associates,
whether located in the Philippines or abroad, including the takeover or
sequestration of all business enterprises and entities owned or controlled by them,
during his administration, directly or through nominees, by taking undue advantage
of their public office and/or using their powers, authority, influence, connections or
relationship.
(b) The investigation of such cases of graft and corruption as the President may
assign to the Commission from time to time.
(c) The adoption of safeguards to ensure that the above practices shall not be
repeated in any manner under the new government, and the institution of adequate
measures to prevent the occurrence of corruption.
Sec. 3. The Commission shall have the power and authority:
(a) To conduct investigation as may be necessary in order to accomplish and carry
out the purposes of this order.
(b) To sequester or place or cause to be placed under its control or possession any
building or office wherein any ill-gotten wealth or properties may be found, and any
records pertaining thereto, in order to prevent their destruction, concealment or
disappearance which would frustrate or hamper the investigation or otherwise
prevent the Commission from accomplishing its task.
(c) To provisionally take over in the public interest or to prevent its disposal or
dissipation, business enterprises and properties taken over by the government of
the Marcos Administration or by entities or persons close to former President
Marcos, until the transactions leading to such acquisition by the latter can be
disposed of by the appropriate authorities.
(d) To enjoin or restrain any actual or threatened commission of facts by any person
or entity that may render moot and academic, or frustrate, or otherwise make
ineffectual the efforts of the Commission to carry out its tasks under this order.
(e) To administer oaths, and issue subpoena requiring the attendance and testimony
of witnesses and/or the production of such books, papers, contracts, records,
statement of accounts and other documents as may be material to the investigation
conducted by the Commission.
(f) To hold any person in direct or indirect contempt and impose the appropriate
penalties, following the same procedures and penalties provided in the Rules of
Court.
(g) To seek and secure the assistance of any office, agency or instrumentality of the
government.
(h) To promulgate such rules and regulations as may be necessary to carry out the
purpose of this order.
Thus, numerous civil and criminal cases were subsequently filed. One of the civil
cases filed before the Sandiganbayan to recover the Marcoses alleged ill-gotten
wealth was Civil Case No. 0002, now subject of this Petition.

On 16 July 1987, the PCGG, acting on behalf of the Republic and assisted by the
Office of the Solicitor General (OSG), filed a Complaint for Reversion, Reconveyance,
Restitution, Accounting and Damages against Ferdinand E. Marcos, who was later
substituted by his estate upon his death; Imelda R. Marcos; and herein respondents
Imee Marcos-Manotoc, Irene Marcos-Araneta, Bongbong Marcos, Tomas Manotoc,
and Gregorio Araneta III.
On 1 October 1987, the PCGG filed an amended Complaint to add Constante Rubio
as defendant.
Again on 9 February 1988, it amended the Complaint, this time to include as
defendants Nemesio G. Co and herein respondents Yeung Chun Kam, Yeung Chun
Ho, and Yeung Chun Fan.
For the third time, on 23 April 1990, the PCGG amended its Complaint, adding to its
growing list of defendants Imelda Cojuangco, the estate of Ramon Cojuangco, and
Prime Holdings, Inc.[2]
The PCGG filed a fourth amended Complaint, which was later denied by the
Sandiganbayan in its Resolution dated 2 September 1998.
The allegations contained in the Complaint specific to herein respondents are the
following:[3]
29. Defendants Imelda (IMEE) R. Marcos-Manotoc, Tomas Manotoc, Irene R. Manotoc
(sic) Araneta, Gregorio Ma. Araneta III, and Ferdinand R. Marcos, Jr., actively
collaborated, with Defendants Ferdinand E. Marcos and Imelda R. Marcos among
others, in confiscating and/or unlawfully appropriating funds and other property,
and in concealing the same as described above. In addition, each of the said
Defendants, either by taking undue advantage of their relationship with Defendants
Ferdinand E. Marcos and Imelda R. Marcos, or by reason of the above-described
active collaboration, unlawfully acquired or received property, shares of stocks in
corporations, illegal payments such as commissions, bribes or kickbacks, and other
forms of improper privileges, income, revenues and benefits. Defendant Araneta in
particular made use of Asialand Development Corporation which is included in
Annex A hereof as corporate vehicle to benefit in the manner stated above.
31. Defendants Nemesio G. Co, Yeung Chun Kam, Yeung Chun Ho and Yeung Chun
Fan are the controlling stockholders of Glorious Sun Fashion Manufacturing
Corporation (Phils.). Through Glorious Sun (Phils.), they acted as fronts or dummies,
cronies or otherwise willing tools of spouses Ferdinand and Imelda Marcos and/or
the family, particularly of Defendant Imelda (Imee) Marcos-Manotoc, in the illegal
salting of foreign exchange[4] by importing denim fabrics from only one supplier a
Hong Kong based corporation which was also owned and controlled by defendant
Hong Kong investors, at prices much higher than those being paid by other users of
similar materials to the grave and irreparable damage of Plaintiff.
Thus, petitioner set forth the following causes of action in its Complaint:[5]
32. First Cause of Action: BREACH OF PUBLIC TRUST A public office is a public trust.
By committing all the acts described above, Defendants repeatedly breached public
trust and the law, making them liable solidarily to Plaintiff. The funds and other
property acquired by Defendants following, or as a result of, their breach of public
trust, some of which are mentioned or described above, estimated to amount to
200 billion are deemed to have been acquired for the benefit of Plaintiff and are,
therefore, impressed with constructive trust in favor of Plaintiff and the Filipino

people. Consequently, Defendants are solidarily liable to restore or reconvey to


Plaintiff all such funds and property thus impressed with constructive trust for the
benefit of Plaintiff and the Filipino people.
33. Second Cause of Action: ABUSE OF RIGHT AND POWER
(a) Defendants, in perpetrating the unlawful acts described above, committed abuse
of right and power which caused untold misery, sufferings and damages to Plaintiff.
Defendants violated, among others Articles 19, 20, and 21 of the Civil Code of the
Philippines;
(b) As a result of the foregoing acts, Defendants acquired the title to the beneficial
interest in funds and other property and concealed such title, funds and interest
through the use of relatives, business associates, nominees, agents, or dummies.
Defendants are, therefore, solidarily liable to Plaintiff to return and reconvey all such
funds and other property unlawfully acquired by them estimated at TWO HUNDRED
BILLION PESOS, or alternatively, to pay Plaintiff, solidarily, by way of indemnity, the
damage caused to Plaintiff equivalent to the amount of such funds or the value of
other property not returned or restored to Plaintiff, plus interest thereon from the
date of unlawful acquisition until full payment thereof.
34. Third Cause of Action: UNJUST ENRICHMENT
Defendants illegally accumulated funds and other property whose estimated value
is 200 billion in violation of the laws of the Philippines and in breach of their official
functions and fiduciary obligations. Defendants, therefore, have unjustly enriched
themselves to the grave and irreparable damage and prejudice of Plaintiff.
Defendants have an obligation at law, independently of breach of trust and abuse of
right and power, and as an alternative, to solidarily return to Plaintiff such funds and
other property with which Defendants, in gross evident bad faith, have unjustly
enriched themselves or, in default thereof, restore to Plaintiff the amount of such
funds and the value of the other property including those which may have been
wasted, and/or lost estimated at 200 billion with interest thereon from the date of
unlawful acquisition until full payment thereof.
35. Fourth Cause of Action: ACCOUNTING
The Commission, acting pursuant to the provisions of the applicable law, believe
that Defendants, acting singly or collectively, in unlawful concert with one another,
and with the active collaboration of third persons, subject of separate suits,
acquired funds, assets and property during the incumbency of Defendant public
officers, manifestly out of proportion to their salaries, to their other lawful income
and income from legitimately acquired property. Consequently, they are required to
show to the satisfaction of this Honorable Court that they have lawfully acquired all
such funds, assets and property which are in excess of their legal net income, and
for this Honorable Court to decree that the Defendants are under obligation to
account to Plaintiff with respect to all legal or beneficial interests in funds,
properties and assets of whatever kind and wherever located in excess of the lawful
earnings or lawful income from legitimately acquired property.

36. Fifth Cause of Action LIABILITY FOR DAMAGES


(a) By reason of the unlawful acts set forth above, Plaintiff and the Filipino people
have suffered actual damages in an amount representing the pecuniary loss
sustained by the latter as a result of the Defendants unlawful acts, the approximate
value and interest of which, from the time of their wrongful acquisition, are
estimated at 200 billion plus expenses which Plaintiff has been compelled to incur
and shall continue to incur in its effort to recover Defendants ill-gotten wealth all
over the world, which expenses are reasonably estimated at 250 million.
Defendants are, therefore, jointly and severally liable to Plaintiff for actual damages
in an amount reasonably estimated at 200 Billion Pesos and to reimburse expenses
for recovery of Defendants ill-gotten wealth estimated to cost 250 million or in
such amount as are proven during the trial.
(b) As a result of Defendants acts described above, Plaintiff and the Filipino people
had painfully endured and suffered moral damages for more than twenty long years,
anguish, fright, sleepless nights, serious anxiety, wounded feelings and moral shock
as well as besmirched reputation and social humiliation before the international
community.
(c) In addition, Plaintiff and the Filipino people are entitled to temperate damages
for their sufferings which, by their very nature are incapable of pecuniary
estimation, but which this Honorable Court may determine in the exercise of its
sound discretion.
(d) Defendants, by reason of the above described unlawful acts, have violated and
invaded the inalienable right of Plaintiff and the Filipino people to a fair and decent
way of life befitting a Nation with rich natural and human resources. This basic and
fundamental right of Plaintiff and the Filipino people should be recognized and
vindicated by awarding nominal damages in an amount to be determined by the
Honorable Court in the exercise of its sound discretion.
(e) By way of example and correction for the public good and in order to ensure that
Defendants unlawful, malicious, immoral and wanton acts are not repeated, said
Defendants are solidarily liable to Plaintiff for exemplary damages.
In the meantime, the Pantranco Employees Association-PTGWO (PEA-PTGWO), a
union of Pantranco employees, moved to intervene before the Sandiganbayan. The
former alleged that the trust funds in the account of Pantranco North Express, Inc.
(Pantranco) amounting to 55 million rightfully belonged to the Pantranco
employees, pursuant to the money judgment the National Labor Relations
Commission (NLRC) awarded in favor of the employees and against Pantranco. Thus,
PEA-PTGWO contested the allegation of petitioner that the assets of Pantranco were
ill-gotten because, otherwise, these assets would be returned to the government
and not to the employees.
Thereafter, petitioner presented and formally offered its evidence against herein
respondents. However, the latter objected to the offer primarily on the ground that
the documents violated the best evidence rule of the Rules of Court, as these
documents were unauthenticated; moreover, petitioner had not provided any
reason for its failure to present the originals.

On 11 March 2002, the Sandiganbayan issued a Resolution[6] admitting the pieces


of evidence while expressing some reservation, to wit:
WHEREFORE, taking note of the objections of accused Marcoses and the reply
thereto by the plaintiff, all the documentary exhibits formally offered by the
prosecution are hereby admitted in evidence; however, their evidentiary value shall
be left to the determination of the Court.
SO ORDERED.
Imelda R. Marcos; Imee Marcos-Manotoc and Bongbong Marcos, Jr.; Irene MarcosAraneta and Gregorio Ma. Araneta III; Yeung Chun Kam, Yeung Chun Ho and Yeung
Chun Fan; and the PEA-PTGWO subsequently filed their respective Demurrers to
Evidence.
On 6 December 2005, the Sandiganbayan issued the assailed Resolution,[7] which
granted all the Demurrers to Evidence except the one filed by Imelda R. Marcos. The
dispositive portion reads:
WHEREFORE, premises considered, the Demurrer to Evidence filed by defendant
Imelda R. Marcos is hereby DENIED. The Demurrer to Evidence filed by defendants
Maria Imelda Marcos Manotoc, Ferdinand Marcos, Jr., Irene Marcos Araneta, Gregorio
Maria Araneta III, Yeung Chun Kam, Yeung Chun Fan, Yeung Chun Ho, and intervenor
PEA-PTGWO, are hereby GRANTED. The sequestration orders on the properties in
the name of defendant Gregorio Maria Araneta III, are accordingly ordered lifted.
SO ORDERED.
The Sandiganbayan denied Imelda R. Marcos Demurrer primarily because she had
categorically admitted that she and her husband owned properties enumerated in
the Complaint, while stating that these properties had been lawfully acquired. The
court held that the evidence presented by petitioner constituted a prima facie case
against her, considering that the value of the properties involved was grossly
disproportionate to the Marcos spouses lawful income. Thus, this admission and the
fact that Imelda R. Marcos was the compulsory heir and administratrix of the Marcos
estate were the primary reasons why the court held that she was responsible for
accounting for the funds and properties alleged to be ill-gotten.
Secondly, the court pointed out that Rolando Gapud, whose deposition was taken in
Hong Kong, referred to her as one directly involved in amassing ill-gotten wealth.
The court also considered the compromise agreement between petitioner and
Antonio O. Floirendo, who disclosed that he had performed several business
transactions upon the instructions of the Marcos spouses.
With regard to the siblings Imee Marcos-Manotoc and Bongbong Marcos, Jr., the
court noted that their involvement in the alleged illegal activities was never
established. In fact, they were never mentioned by any of the witnesses presented.
Neither did the documentary evidence pinpoint any specific involvement of the
Marcos children.
Moreover, the court held that the evidence, in particular, exhibits P,[8] Q,[9] R,[10]
S,[11] and T,[12] were considered hearsay, because their originals were not
presented in court, nor were they authenticated by the persons who executed them.
Furthermore, the court pointed out that petitioner failed to provide any valid reason
why it did not present the originals in court. These exhibits were supposed to show
the interests of Imee Marcos-Manotok in the media networks IBC-13, BBC-2 and

RPN-9, all three of which she had allegedly acquired illegally. These exhibits also
sought to prove her alleged participation in dollar salting through De Soleil Apparel.
Finally, the court held that the relationship of respondents to the Marcos spouses
was not enough reason to hold the former liable.
In the matter of the spouses Irene Marcos and Gregorio Araneta III, the court
similarly held that there was no testimonial or documentary evidence that
supported petitioners allegations against the couple. Again, petitioner failed to
present the original documents that supposedly supported the allegations against
them. Instead, it merely presented photocopies of documents that sought to prove
how the Marcoses used the Potencianos[13] as dummies in acquiring and operating
the bus company Pantranco.
Meanwhile, as far as the Yeungs were concerned, the court found the allegations
against them baseless. Petitioner failed to demonstrate how their business, Glorious
Sun Fashion Garments Manufacturing, Co. Phils. (Glorious Sun), was used as a
vehicle for dollar salting; or to show that they themselves were dummies of the
Marcoses. Again, the court held that the documentary evidence relevant to this
allegation was inadmissible for being mere photocopies, and that the affiants had
not been presented as witnesses.
Finally, the court also granted the Demurrer filed by PEA-PTGWO. While the court
held that there was no evidence to show that Pantranco was illegally acquired, the
former nevertheless held that there was a need to first determine the ownership of
the disputed funds before they could be ordered released to the rightful owner.
On 20 December 2005, petitioner filed its Motion for Partial Reconsideration,
insisting that there was a preponderance of evidence to show that respondents
Marcos siblings and Gregorio Araneta III had connived with their parents in acquiring
ill-gotten wealth. It pointed out that respondents were compulsory heirs to the
deposed President and were thus obliged to render an accounting and to return the
ill-gotten wealth.
Moreover, petitioner asserted that the evidence established that the Yeungs were
dummies of the Marcoses, and that the Pantranco assets were part of the Marcoses
alleged ill-gotten wealth.
Finally, petitioner questioned the courts ruling that the evidence previously
admitted was later held to be inadmissible in evidence against respondents, thus,
depriving the former of due process.
Inadvertently, petitioner was not able to serve a copy of the motion on respondents
Imee Marcos-Manotoc and Bongbong Marcos, Jr. But upon realizing the oversight, it
immediately did so and filed the corresponding Manifestation and Motion before the
court. Nonetheless, this inadvertence prompted Imee Marcos-Manotoc and
Bongbong Marcos, Jr. to file their Motion for Entry of Judgment.
On 2 March 2006, the court issued the second assailed Resolution,[14] denying
petitioners Motion. The court pointed out its reservation in its Resolution dated 12
March 2002, wherein it said that it would still assess and weigh the evidentiary
value of the admitted evidence. Furthermore, it said that even if it included the
testimonies of petitioners witnesses, these were not substantial to hold respondents
liable. Thus, the court said:
WHEREFORE, there being no sufficient reason to set aside the resolution dated
December 6, 2005, the plaintiffs Motion for Partial Reconsideration is hereby
DENIED. The plaintiffs Motion and Manifestation dated January 18, 2006 is GRANTED
in the interest of justice. The Motion for Entry of Judgment filed by defendants Imee
Marcos and Bongbong Marcos is DENIED.

SO ORDERED.
Hence, this Petition.
Petitioner raises the same issues it raised in its Motion for Reconsideration filed
before the Sandiganbayan, to wit:[15]
I.
THE SANDIGANBAYAN ERRED IN GRANTING THE DEMURRER TO
EVIDENCE FILED BY RESPONDENTS MA. IMELDA (IMEE) R. MARCOS AND FERDINAND
(BONGBONG) R. MARCOS, JR., CONSIDERING THAT MORE THAN PREPONDERANT
EVIDENCE ON RECORD CLEARLY DEMONSTRATES THEIR CONNIVANCE WITH FORMER
PRESIDENT FERDINAND E. MARCOS AND OTHER MARCOS DUMMIES AND ABUSED
THEIR POWER AND INFLUENCE IN UNLAWFULLY AMASSING FUNDS FROM THE
NATIONAL TREASURY.
II.
PETITION PROVED, BY MORE THAN PREPONDERANT EVIDENCE, THAT
RESPONDENT-SPOUSES GREGORIO ARANETA III AND IRENE MARCOS ARANETA
CONNIVED WITH FORMER PRESIDENT MARCOS IN UNLAWFULLY ACQUIRING
BUSINESS INTERESTS WHICH ARE GROSSLY DISADVANTAGEOUS TO THE
GOVERNMENT, AND IN A MANNER PROHIBITED UNDER THE CONSTITUTION AND
ANTI-GRAFT STATUTES.
III.
RESPONDENTS IMEE, BONGBONG, AND IRENE MARCOS ARE COMPULSORY
HEIRS OF FORMER PRESIDENT MARCOS AND ARE EQUALLY OBLIGED TO RENDER AN
ACCOUNTING AND RETURN THE ALLEGED ILL-GOTTEN WEALTH OF THE MARCOSES.
IV.
THERE EXISTS CONCRETE EVIDENCE PROVING THAT RESPONDENTS
YEUNG CHUN KAM, YEUNG CHUN FAN, AND YEUNG CHUN HO ACTED AS DUMMIES
FOR THE MARCOSES, AND USED THE CORPORATION, GLORIOUS SUN, AS A CONDUIT
IN AMASSING THE ILL-GOTTEN WEALTH. ACCORDINGLY, THE SANDIGANBAYAN
ERRED IN GRANTING THEIR DEMURRER TO EVIDENCE.
V.
THE DEMURRER TO EVIDENCE FILED BY INTERVENOR PEA-PTGWO WITH
RESPECT TO THE PANTRANCO ASSETS SHOULD NOT HAVE BEEN GRANTED SINCE
AMPLE EVIDENCE PROVES THAT THE SAID ASSETS INDUBITABLY FORM PART OF THE
MARCOS ILL-GOTTEN WEALTH, AS BUTTRESSED BY THE FACT THAT NO JUDICIAL
DETERMINATION HAS BEEN MADE AS TO WHOM THESE ASSETS RIGHTFULLY
BELONG.
VI.
THE SANDIGANBAYANS RULING WHICH REJECTED PEITITONERS
DOCUMENTARY EXHIBITS ALLEGEDLY FOR BEING INADMISSIBLE DIRECTLY
CONTRADICTS ITS EARLIER RULING ADMITTING ALL SAID DOCUMENTARY EVIDENCE
AND WAS RENDERED IN A MANNER THAT DEPRIVED PETITIONERS RIGHT TO DUE
PROCESS OF LAW.
There is some merit in petitioners contention.
The Marcos Siblings and
Gregorio Araneta III

Closely analyzing petitioners Complaint and the present Petition for Review, it is
clear that the Marcos siblings are being sued in two capacities: first, as coconspirators in the alleged accumulation of ill-gotten wealth; and second, as the
compulsory heirs of their father, Ferdinand E. Marcos.[16]
With regard to the first allegation, as contained in paragraph 29 of its Third
Amended Complaint quoted above, petitioner accused the Marcos siblings of having
collaborated with, participated in, and/or benefitted from their parents alleged
accumulation of ill-gotten wealth. In particular, as far as Imee Marcos-Manotoc was
concerned, she was accused of dollar salting by using Glorious Sun to import denim
fabrics from one supplier at prices much higher than those paid by other users of
similar materials. It was also alleged that the Marcoses personally benefitted from
the sequestered media networks IBC-13, BBC-2, and RPN-9, in which Imee Marcos
had a substantial interest.
Irene Marcos-Araneta, on the other hand, was accused of having conspired with her
husband, respondent Gregorio Araneta III, in his being President Marcos conduit to
Pantranco, thereby paving the way for the Presidents ownership of the company in
violation of Article VII, Section 4, paragraph 2 of the 1973 Constitution.[17]
To prove the general allegations against the Marcos siblings, petitioner primarily
relied on the Sworn Statement[18] and the Deposition[19] of one of the financial
advisors of President Marcos, Rolando C. Gapud, taken in Hong Kong on various
dates.
Meanwhile, to prove the participation and interests of Imee Marcos-Manotoc in De
Soleil Apparel and the media networks, petitioner relied on the Affidavits of Ramon
S. Monzon,[20] Yeung Kwok Ying,[21] and Rodolfo V. Puno;[22] and the transcript of
stenographic notes (TSN) taken during the PCGG hearing held on 8 June 1987.[23]
As to spouses Irene Marcos-Araneta and Gregorio Araneta III, petitioner submitted
the Articles of Incorporation of Northern Express Transport, Inc.;[24] the
Memorandum of Agreement[25] and the Purchase Agreement[26] between
Pantranco and Batangas Laguna Tayabas Bus Company, Inc. (BLTBCo.); the
Confidential Memorandum regarding the sale of the Pantranco assets;[27] the
Affidavit[28] and the letter to the PCGG[29] of Dolores A. Potenciano, owner of
BLTBCo.; the Affidavit[30] and the Memorandum[31] of Eduardo Fajardo, who was
then the Senior Vice-President of the Account Management Group of the Philippine
National Bank (PNB), which was in turn the creditor for the Pantranco sale; and the
Affidavit of Florencio P. Lucio, who was the Senior Account Specialist of the National
Investment and Development Corporation.[32]
Petitioner contends that these documents fall under the Rules third exception, that
is, these documents are public records in the custody of a public officer or are
recorded in a public office. It is its theory that since these documents were collected
by the PCGG, then, necessarily, the conditions for the exception to apply had been
met. Alternatively, it asserts that the documents were offered to prove not only the
truth of the recitals of the documents, but also of other external or collateral facts.
[33]
The Courts Ruling
Petitioner failed to observe the
best evidence rule.
It is petitioners burden to prove the allegations in its Complaint. For relief to be
granted, the operative act on how and in what manner the Marcos siblings

participated in and/or benefitted from the acts of the Marcos couple must be clearly
shown through a preponderance of evidence. Should petitioner fail to discharge this
burden, the Court is constrained and is left with no choice but to uphold the
Demurrer to Evidence filed by respondents.
First, petitioner does not deny that what should be proved are the contents of the
documents themselves. It is imperative, therefore, to submit the original documents
that could prove petitioners allegations.
Thus, the photocopied documents are in violation Rule 130, Sec. 3 of the Rules of
Court, otherwise known as the best evidence rule, which mandates that the
evidence must be the original document itself. The origin of the best evidence rule
can be found and traced to as early as the 18th century in Omychund v. Barker,[34]
wherein the Court of Chancery said:
The judges and sages of the law have laid it down that there is but one general rule
of evidence, the best that the nature of the case will admit.
The rule is, that if the writings have subscribing witnesses to them, they must be
proved by those witnesses.
The first ground judges have gone upon in departing from strict rules, is an absolute
strict necessity. Secondly, a presumed necessity. In the case of writings, subscribed
by witnesses, if all are dead, the proof of one of their hands is sufficient to establish
the deed: where an original is lost, a copy may be admitted; if no copy, then a proof
by witnesses who have heard the deed, and yet it is a thing the law abhors to admit
the memory of man for evidence.

Petitioner did not even attempt to provide a plausible reason why the originals were
not presented, or any compelling ground why the court should admit these
documents as secondary evidence absent the testimony of the witnesses who had
executed them.
In particular, it may not insist that the photocopies of the documents fall under Sec.
7 of Rule 130, which states:
Evidence admissible when original document is a public record. When the original
of a document is in the custody of a public officer or is recorded in a public office, its
contents may be proved be a certified copy issued by the public officer in custody
thereof.
Secs. 19 and 20 of Rule 132 provide:
SECTION 19. Classes of documents. For the purpose of their presentation in
evidence, documents are either public or private.
Public documents are:
(a) 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;
(b) Documents acknowledged before a notary public except last wills and
testaments; and
(c) Public records, kept in the Philippines, of private documents required by law to
be entered therein.
All other writings are private.

SECTION 20. Proof of private document. Before any private document offered as
authentic is received in evidence, its due execution and authenticity must be proved
either:
(a) By anyone who saw the document executed or written; or
(b) By evidence of the genuineness of the signature or handwriting of the maker.
Any other private document need only be identified as that which it is claimed to
be.
The fact that these documents were collected by the PCGG in the course of its
investigations does not make them per se public records referred to in the quoted
rule.
Petitioner presented as witness its records officer, Maria Lourdes Magno, who
testified that these public and private documents had been gathered by and taken
into the custody of the PCGG in the course of the Commissions investigation of the
alleged ill-gotten wealth of the Marcoses. However, given the purposes for which
these documents were submitted, Magno was not a credible witness who could
testify as to their contents. To reiterate, [i]f the writings have subscribing witnesses
to them, they must be proved by those witnesses. Witnesses can testify only to
those facts which are of their personal knowledge; that is, those derived from their
own perception.[35] Thus, Magno could only testify as to how she obtained custody
of these documents, but not as to the contents of the documents themselves.
Neither did petitioner present as witnesses the affiants of these Affidavits or
Memoranda submitted to the court. Basic is the rule that, while affidavits may be
considered as public documents if they are acknowledged before a notary public,
these Affidavits are still classified as hearsay evidence. The reason for this rule is
that they are not generally prepared by the affiant, but by another one who uses his
or her own language in writing the affiant's statements, parts of which may thus be
either omitted or misunderstood by the one writing them. Moreover, the adverse
party is deprived of the opportunity to cross-examine the affiants. For this reason,
affidavits are generally rejected for being hearsay, unless the affiants themselves
are placed on the witness stand to testify thereon.[36]
As to the copy of the TSN of the proceedings before the PCGG, while it may be
considered as a public document since it was taken in the course of the PCGGs
exercise of its mandate, it was not attested to by the legal custodian to be a correct
copy of the original. This omission falls short of the requirement of Rule 132, Secs.
24 and 25 of the Rules of Court.[37]
In summary, we adopt the ruling of the Sandiganbayan, to wit:
Further, again contrary to the theory of the plaintiff, the presentation of the originals
of the aforesaid exhibits is not validly excepted under Rule 130, Section 3 (a), (b),
and (d) of the Rules of Court. Under paragraph (d), when the original document is a
public record in the custody of a public officer or is recorded in a public office,
presentation of the original thereof is excepted. However, as earlier observed, all
except one of the exhibits introduced by the plaintiff were not necessarily public
documents. The transcript of stenographic notes (TSN) of the proceedings
purportedly before the PCGG, the plaintiffs exhibit Q, may be a public document,
but what was presented by the plaintiff was a mere photocopy of the purported
TSN. The Rules provide that when the original document is in the custody of a public
officer or is recorded in a public office, its contents may be proved by a certified

copy issued by the public officer in custody thereof. Exhibit Q was not a certified
copy and it was not even signed by the stenographer who supposedly took down
the proceedings.
The rest of the above-mentioned exhibits cannot likewise be excepted under
paragraphs (a) and (b) of Section 3. Section 5 of the same Rule provides that when
the original documents has been lost or destroyed, or cannot be produced in court,
the offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by a copy, or by
a recital of its contents in some authentic document, or by the testimony of
witnesses in the order stated. Thus, in order that secondary evidence may be
admissible, there must be proof by satisfactory evidence of (1) due execution of the
original; (2) loss, destruction or unavailability of all such originals and (3) reasonable
diligence and good faith in the search for or attempt to produce the original. None
of these requirements were complied with by the plaintiff. Similar to exhibit Q,
exhibits P, R, S, and T were all photocopies. P, R, and T were affidavits of persons
who did not testify before the Court. Exhibit S is a letter which is clearly a private
document. Not only does it not fall within the exceptions of Section 3, it is also a
mere photocopy. As We previously emphasized, even if originals of these affidavits
were presented, they would still be considered hearsay evidence if the affiants do
not testify and identify them.[38]
Thus, absent any convincing evidence to hold otherwise, it follows that petitioner
failed to prove that the Marcos siblings and Gregorio Araneta III collaborated with
former President Marcos and Imelda R. Marcos and participated in the first couples
alleged accumulation of ill-gotten wealth insofar as the specific allegations herein
were concerned.
The Marcos siblings are compulsory heirs.
To reiterate, in its third Amended Complaint, petitioner prays that the Marcos
respondents be made to (1) pay for the value of the alleged ill-gotten wealth with
interest from the date of acquisition; (2) render a complete accounting and
inventory of all funds and other pieces of property legally or beneficially held and/or
controlled by them, as well as their legal and beneficial interest therein; (3) pay
actual damages estimated at P200 billion and additional actual damages to
reimburse expenses for the recovery of the alleged ill-gotten wealth estimated at
P250 million or in such amount as may be proven during trial; (4) pay moral
damages amounting to P50 billion; (5) pay temperate and nominal damages, as well
as attorneys fees and litigation expenses in an amount to be proven during the trial;
(6) pay exemplary damages in the amount of P1 billion; and (7) pay treble judicial
costs.[39]
It must be stressed that we are faced with exceptional circumstances, given the
nature and the extent of the properties involved in the case pending with the
Sandiganbayan. It bears emphasis that the Complaint is one for the reversion, the
reconveyance, the restitution and the accounting of alleged ill-gotten wealth and
the payment of damages. Based on the allegations of the Complaint, the court is
charged with the task of (1) determining the properties in the Marcos estate that
constitute the alleged ill-gotten wealth; (2) tracing where these properties are; (3)
issuing the appropriate orders for the accounting, the recovery, and the payment of
these properties; and, finally, (4) determining if the award of damages is proper.

Since the pending case before the Sandiganbayan survives the death of Ferdinand
E. Marcos, it is imperative therefore that the estate be duly represented. The
purpose behind this rule is the protection of the right to due process of every party
to a litigation who may be affected by the intervening death. The deceased litigant
is himself protected, as he continues to be properly represented in the suit through
the duly appointed legal representative of his estate.[40] On that note, we take
judicial notice of the probate proceedings regarding the will of Ferdinand E. Marcos.
In Republic of the Philippines v. Marcos II,[41] we upheld the grant by the Regional
Trial Court (RTC) of letters testamentary in solidum to Ferdinand R. Marcos, Jr. and
Imelda Romualdez-Marcos as executors of the last will and testament of the late
Ferdinand E. Marcos.
Unless the executors of the Marcos estate or the heirs are ready to waive in favor of
the state their right to defend or protect the estate or those properties found to be
ill-gotten in their possession, control or ownership, then they may not be dropped as
defendants in the civil case pending before the Sandiganbayan.
Rule 3, Sec. 7 of the Rules of Court defines indispensable parties as those parties-ininterest without whom there can be no final determination of an action. They are
those parties who possess such an interest in the controversy that a final decree
would necessarily affect their rights, so that the courts cannot proceed without their
presence. Parties are indispensable if their interest in the subject matter of the suit
and in the relief sought is inextricably intertwined with that of the other parties.[42]
In order to reach a final determination of the matters concerning the estate of
Ferdinand E. Marcos that is, the accounting and the recovery of ill-gotten wealth the
present case must be maintained against Imelda Marcos and herein respondent
Ferdinand Bongbong R. Marcos, Jr., as executors of the Marcos estate pursuant to
Sec. 1 of Rule 87 of the Rules of Court. According to this provision, actions may be
commenced to recover from the estate, real or personal property, or an interest
therein, or to enforce a lien thereon; and actions to recover damages for an injury to
person or property, real or personal, may be commenced against the executors.
We also hold that the action must likewise be maintained against Imee MarcosManotoc and Irene Marcos-Araneta on the basis of the non-exhaustive list attached
as Annex A to the Third Amended Complaint, which states that the listed properties
therein were owned by Ferdinand and Imelda Marcos and their immediate family.
[43] It is only during the trial of Civil Case No. 0002 before the Sandiganbayan that
there could be a determination of whether these properties are indeed ill-gotten or
were legitimately acquired by respondents and their predecessors. Thus, while it
was not proven that respondents conspired in accumulating ill-gotten wealth, they
may be in possession, ownership or control of such ill-gotten properties or the
proceeds thereof as heirs of the Marcos couple. Thus, their lack of participation in
any illegal act does not remove the character of the property as ill-gotten and,
therefore, as rightfully belonging to the State.
Secondly, under the rules of succession, the heirs instantaneously became coowners of the Marcos properties upon the death of the President. The property
rights and obligations to the extent of the value of the inheritance of a person are
transmitted to another through the decedents death.[44] In this concept, nothing
prevents the heirs from exercising their right to transfer or dispose of the properties
that constitute their legitimes, even absent their declaration or absent the partition
or the distribution of the estate. In Jakosalem v. Rafols,[45] we said:

Article 440 of the Civil Code provides that the possession of hereditary property is
deemed to be transmitted to the heir without interruption from the instant of the
death of the decedent, in case the inheritance be accepted. And Manresa with
reason states that upon the death of a person, each of his heirs becomes the
undivided owner of the whole estate left with respect to the part or portion which
might be adjudicated to him, a community of ownership being thus formed among
the coowners of the estate while it remains undivided. (3 Manresa, 357; Alcala vs.
Alcala, 35 Phil. 679.) And according to article 399 of the Civil Code, every part
owner may assign or mortgage his part in the common property, and the effect of
such assignment or mortgage shall be limited to the portion which may be allotted
him in the partition upon the dissolution of the community. Hence, in the case of
Ramirez vs. Bautista, 14 Phil. 528, where some of the heirs, without the concurrence
of the others, sold a property left by their deceased father, this Court, speaking thru
its then Chief Justice Cayetano Arellano, said that the sale was valid, but that the
effect thereof was limited to the share which may be allotted to the vendors upon
the partition of the estate. (Emphasis supplied)
Lastly, petitioners prayer in its Third Amended Complaint directly refers to herein
respondents, to wit:
1. AS TO THE FIRST SECOND AND THIRD CAUSES OF ACTION To return and reconvey
to Plaintiff all funds and other property acquired by Defendants during their
incumbency as public officers, which funds and other property are manifestly out of
proportion to their salaries, other lawful income and income from legitimately
acquired property which Defendants have failed to establish as having been, in fact,
lawfully acquired by them, alternatively, to solidarily pay Plaintiff the value thereof
with interest thereon from the date of acquisition until full payment.
2. AS TO THE FOURTH CAUSE OF ACTION to individually render to this Honorable
Court a complete accounting and inventory, subject to evaluation of Courtappointed assessors, of all funds and other property legally or beneficially held
and/or controlled by them, as well as their legal and beneficial interest in such funds
and other property. (Emphasis supplied)
In sum, the Marcos siblings are maintained as respondents, because (1) the action
pending before the Sandiganbayan is one that survives death, and, therefore, the
rights to the estate must be duly protected; (2) they allegedly control, possess or
own ill-gotten wealth, though their direct involvement in accumulating or acquiring
such wealth may not have been proven.
Yeung Chun Kam, Yeung Chun
Ho And Yeung Chun Fan
It is worthy to note that respondents draw our attention to American Inter-Fashion
Corporation v. Office of the President[46] in which they contend that this Court
considered the allegation of dollar salting as baseless. The cited case, however,
finds no application herein as the former merely ruled that Glorious Sun was denied
due process when it was not furnished by the Garments and Textile Export Board
(GTEB) any basis for the cancellation of the export quota because of allegations of
dollar salting. That Decision did not prevent petitioner from adducing evidence to

support its allegation in Civil Case No. 0002 before the Sandiganbayan under a
different cause of action.
Nevertheless, the allegations against Yeung Chun Kam, Yeung Chun Ho and Yeung
Chun Fan in the case at bar were also proved to be baseless. Again, petitioner failed
to illustrate how respondents herein acted as dummies of the Marcoses in acquiring
ill-gotten wealth. This Court notes that the Complaint against the Yeungs alleges
that the Marcoses used Glorious Sun the garment company in which the Yeungs are
controlling stockholders for illegal dollar salting through the companys importation
of denim fabrics from only one supplier at prices much higher than those being paid
by other users of similar materials. Notably, no mention of De Soleil Apparel was
made.
To prove its allegations, petitioner submitted the controverted Exhibits P, Q, R, S,
and T. As earlier discussed in detail, these pieces of evidence were mere
photocopies of the originals and were unauthenticated by the persons who executed
them; thus, they have no probative value. Even the allegations of petitioner itself in
its Petition for Review are bereft of any factual basis for holding that these
documents undoubtedly show respondents participation in the alleged dollar
salting. The pertinent portion of the Petition reads:
To illustrate, the Affidavit dated May 29, 1987 executed by Mr. Ramon Monzon which
was submitted as Exhibit P, showed that respondent Imee Marcos-Manotoc owns
and controls IBC-13, BBC-2 and (R)PN-9, and has interest in the De Soleil Apparel.
The testimony of Mr. Ramon Monzon during the hearing on June 8, 1987 before the
Presidential Commission on Good Government as shown in the Transcript of
Stenographic Notes also affirmed his declarations in the Affidavit dated May 29,
1987. The Transcript of Stenographic Notes dated June 8, 1987 was presented as
Exhibit Q. Moreover, the Affidavit dated March 21, 1986 of Yeung Kwok Ying which
was presented as Exhibit R disclosed that Imee Marcos-Manotoc is the owner of 67%
equity of De Soleil Apparel. The letter dated July 17, 1984 signed by seven (7)
incorporators of De Soleil Apparel, addressed to Hongkong investors which was
presented as Exhibit S confirmed that the signatories hold or own 67% equity of the
corporation in behalf of the beneficial owners previously disclosed to the
addressees. In addition to the foregoing documents, petitioner presented the
Affidavit of Rodolfo V. Puno, Chairman of the Garments and Textile Export Group
(GTEB) as Exhibit T wherein he categorically declared that the majority of De Soleil
Apparel was actually owned by respondent Imee Marcos-Manotoc.[47]
The foregoing quotation from the Petition is bereft of any factual matter that
warrants a consideration by the Court. Straight from the horses mouth, these
documents are only meant to show the ownership and interest of Imee Marcos
Manotoc in De Soleil and not how respondent supposedly participated in dollar
salting or in the accumulation of ill-gotten wealth.
PEA-PTGWO
The PEA-PTGWO Demurrer to Evidence was granted primarily as a consequence of
the prosecutions failure to establish that the assets of Pantranco were ill-gotten, as
discussed earlier. Thus, we find no error in the assailed Order of the Sandiganbayan.
A Final Note
As earlier adverted to, the best evidence rule has been recognized as an evidentiary
standard since the 18th century. For three centuries, it has been practiced as one of
the most basic rules in law. It is difficult to conceive that one could have finished law
school and passed the bar examinations without knowing such elementary rule.

Thus, it is deeply disturbing that the PCGG and the Office of the Solicitor General
(OSG) the very agencies sworn to protect the interest of the state and its people
could conduct their prosecution in the manner that they did. To emphasize, the
PCGG is a highly specialized office focused on the recovery of ill-gotten wealth,
while the OSG is the principal legal defender of the government. The lawyers of
these government agencies are expected to be the best in the legal profession.
However, despite having the expansive resources of government, the members of
the prosecution did not even bother to provide any reason whatsoever for their
failure to present the original documents or the witnesses to support the
governments claims. Even worse was presenting in evidence a photocopy of the
TSN of the PCGG proceedings instead of the original, or a certified true copy of the
original, which the prosecutors themselves should have had in their custody. Such
manner of legal practice deserves the reproof of this Court. We are constrained to
call attention to this apparently serious failure to follow a most basic rule in law,
given the special circumstances surrounding this case.
The public prosecutors should employ and use all government resources and powers
efficiently, effectively, honestly and economically, particularly to avoid wastage of
public funds and revenues. They should perform and discharge their duties with the
highest degree of excellence, professionalism, intelligence and skill.[48]
The basic ideal of the legal profession is to render service and secure justice for
those seeking its aid.[49] In order to do this, lawyers are required to observe and
adhere to the highest ethical and professional standards. The legal profession is so
imbued with public interest that its practitioners are accountable not only to their
clients, but to the public as well.
The public prosecutors, aside from being representatives of the government and the
state, are, first and foremost, officers of the court. They took the oath to exert every
effort and to consider it their duty to assist in the speedy and efficient
administration of justice.[50] Lawyers owe fidelity to the cause of the client and
should be mindful of the trust and confidence reposed in them.[51] Hence, should
serve with competence and diligence.[52]
We note that there are instances when this Court may overturn the dismissal of the
lower courts in instances when it is shown that the prosecution has deprived the
parties their due process of law. In Merciales v. Court of Appeals,[53] we reversed
the Decision of the RTC in dismissing the criminal case for rape with homicide. In
that case, it was very apparent that the public prosecutor violated the due process
rights of the private complainant owing to its blatant disregard of procedural rules
and the failure to present available crucial evidence, which would tend to prove the
guilt or innocence of the accused therein. Moreover, we likewise found that the trial
court was gravely remiss in its duty to ferret out the truth and, instead, just
passively watched as the public prosecutor bungled the case.
However, it must be emphasized that Merciales was filed exactly to determine
whether the prosecution and the trial court gravely abused their discretion in the
proceedings of the case, thus resulting in the denial of the offended partys due
process. Meanwhile, the present case merely alleges that there was an error in the
Sandiganbayans consideration of the probative value of evidence. We also note that
in Merciales, both the prosecution and the trial court were found to be equally guilty
of serious nonfeasance, which prompted us to remand the case to the trial court for
further proceedings and reception of evidence. Merciales is thus inapplicable to the
case at bar.

Nevertheless, given the particular context of this case, the failure of the prosecution
to adhere to something as basic as the best evidence rule raises serious doubts on
the level and quality of effort given to the governments cause. Thus, we highly
encourage the Office of the President, the OSG, and the PCGG to conduct the
appropriate investigation and consequent action on this matter.
WHEREFORE, in view of the foregoing, the Petition is PARTIALLY GRANTED. The
assailed Sandiganbayan Resolution dated 6 December 2005 is AFFIRMED with
MODIFICATION. For the reasons stated herein, respondents Imelda Marcos-Manotoc,
Irene Marcos-Araneta, and Ferdinand R. Marcos, Jr. shall be maintained as
defendants in Civil Case No. 0002 pending before the Sandiganbayan.
Let a copy of this Decision be furnished to the Office of the President so that it may
look into the circumstances of this case and determine the liability, if any, of the
lawyers of the Office of the Solicitor General and the Presidential Commission on
Good Government in the manner by which this case was handled in the
Sandiganbayan.
SO ORDERED.

IN THE MATTER OF THE PETITION TO APPROVE THE WILL OF RICARDO B. BONILLA


deceased, MARCELA RODELAS, petitioner-appellant,
vs.
AMPARO ARANZA, ET AL., oppositors-appellees, ATTY. LORENZO SUMULONG,
intervenor.
Luciano A. Joson for petitioner-appellant.
Cesar Paralejo for oppositor-appellee.

RELOVA, J.:
This case was certified to this Tribunal by the Court of Appeals for final
determination pursuant to Section 3, Rule 50 of the Rules of Court.
As found by the Court of Appeals:
... On January 11, 1977, appellant filed a petition with the Court of First Instance of
Rizal for the probate of the holographic will of Ricardo B. Bonilla and the issuance of
letters testamentary in her favor. The petition, docketed as Sp. Proc. No. 8432, was
opposed by the appellees Amparo Aranza Bonilla, Wilferine Bonilla Treyes Expedita
Bonilla Frias and Ephraim Bonilla on the following grounds:
(1) Appellant was estopped from claiming that the deceased left a will by failing to
produce the will within twenty days of the death of the testator as required by Rule
75, section 2 of the Rules of Court;
(2) The alleged copy of the alleged holographic will did not contain a disposition of
property after death and was not intended to take effect after death, and therefore
it was not a will
(3) The alleged hollographic will itself,and not an alleged copy thereof, must be
produced, otherwise it would produce no effect, as held in Gam v. Yap, 104 Phil.
509; and
(4 ) The deceased did not leave any will, holographic or otherwise, executed and
attested as required by law.
The appellees likewise moved for the consolidation of the case with another case
Sp. Proc. No, 8275). Their motion was granted by the court in an order dated April 4,
1977.
On November 13, 1978, following the consolidation of the cases, the appellees
moved again to dismiss the petition for the probate of the will. They argued that:
(1)
The alleged holographic was not a last will but merely an instruction as to the
management and improvement of the schools and colleges founded by decedent
Ricardo B. Bonilla; and

(2) Lost or destroyed holographic wills cannot be proved by secondary evidence


unlike ordinary wills.
Upon opposition of the appellant, the motion to dismiss was denied by the court in
its order of February 23, 1979.
The appellees then filed a motion for reconsideration on the ground that the order
was contrary to law and settled pronouncements and rulings of the Supreme Court,
to which the appellant in turn filed an opposition. On July 23, 1979, the court set
aside its order of February 23, 1979 and dismissed the petition for the probate of
the will of Ricardo B. Bonilla. The court said:
... It is our considered opinion that once the original copy of the holographic will is
lost, a copy thereof cannot stand in lieu of the original.
In the case of Gam vs. Yap, 104 Phil. 509, 522, the Supreme Court held that 'in the
matter of holographic wills the law, it is reasonable to suppose, regards the
document itself as the material proof of authenticity of said wills.
MOREOVER, this Court notes that the alleged holographic will was executed on
January 25, 1962 while Ricardo B. Bonilla died on May 13, 1976. In view of the lapse
of more than 14 years from the time of the execution of the will to the death of the
decedent, the fact that the original of the will could not be located shows to our
mind that the decedent had discarded before his death his allegedly missing
Holographic Will.
Appellant's motion for reconsideration was denied. Hence, an appeal to the Court of
Appeals in which it is contended that the dismissal of appellant's petition is contrary
to law and well-settled jurisprudence.
On July 7, 1980, appellees moved to forward the case to this Court on the ground
that the appeal does not involve question of fact and alleged that the trial court
committed the following assigned errors:
I.
THE LOWER COURT ERRED IN HOLDING THAT A LOST HOLOGRAPHIC WILL
MAY NOT BE PROVED BY A COPY THEREOF;
II. THE LOWER COURT ERRED IN HOLDING THAT THE DECEDENT HAS DISCARDED
BEFORE HIS DEATH THE MISSING HOLOGRAPHIC WILL;
III. THE LOWER COURT ERRED IN DISMISSING APPELLANT'S WILL.
The only question here is whether a holographic will which was lost or cannot be
found can be proved by means of a photostatic copy. Pursuant to Article 811 of the
Civil Code, probate of holographic wills is the allowance of the will by the court after
its due execution has been proved. The probate may be uncontested or not. If
uncontested, at least one Identifying witness is required and, if no witness is
available, experts may be resorted to. If contested, at least three Identifying
witnesses are required. However, if the holographic will has been lost or destroyed

and no other copy is available, the will can not be probated because the best and
only evidence is the handwriting of the testator in said will. It is necessary that
there be a comparison between sample handwritten statements of the testator and
the handwritten will. But, a photostatic copy or xerox copy of the holographic will
may be allowed because comparison can be made with the standard writings of the
testator. In the case of Gam vs. Yap, 104 PHIL. 509, the Court ruled that "the
execution and the contents of a lost or destroyed holographic will may not be
proved by the bare testimony of witnesses who have seen and/or read such will. The
will itself must be presented; otherwise, it shall produce no effect. The law regards
the document itself as material proof of authenticity." But, in Footnote 8 of said
decision, it says that "Perhaps it may be proved by a photographic or photostatic
copy. Even a mimeographed or carbon copy; or by other similar means, if any,
whereby the authenticity of the handwriting of the deceased may be exhibited and
tested before the probate court," Evidently, the photostatic or xerox copy of the lost
or destroyed holographic will may be admitted because then the authenticity of the
handwriting of the deceased can be determined by the probate court.
WHEREFORE, the order of the lower court dated October 3, 1979, denying
appellant's motion for reconsideration dated August 9, 1979, of the Order dated July
23, 1979, dismissing her petition to approve the will of the late Ricardo B. Bonilla, is
hereby SET ASIDE.
SO ORDERED.

G.R. No. 170633

October 17, 2007

MCC INDUSTRIAL SALES CORPORATION, petitioner,


vs.
SSANGYONG CORPORATION, respondents.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari of the Decision1 of the Court of
Appeals in CA-G.R. CV No. 82983 and its Resolution2 denying the motion for
reconsideration thereof.
Petitioner MCC Industrial Sales (MCC), a domestic corporation with office at Binondo,
Manila, is engaged in the business of importing and wholesaling stainless steel
products.3 One of its suppliers is the Ssangyong Corporation (Ssangyong),4 an
international trading company5 with head office in Seoul, South Korea and regional
headquarters in Makati City, Philippines.6 The two corporations conducted business
through telephone calls and facsimile or telecopy transmissions.7 Ssangyong would
send the pro forma invoices containing the details of the steel product order to MCC;
if the latter conforms thereto, its representative affixes his signature on the faxed
copy and sends it back to Ssangyong, again by fax.8
On April 13, 2000, Ssangyong Manila Office sent, by fax, a letter9 addressed to
Gregory Chan, MCC Manager [also the President10 of Sanyo Seiki Stainless Steel
Corporation], to confirm MCC's and Sanyo Seiki's order of 220 metric tons (MT) of
hot rolled stainless steel under a preferential rate of US$1,860.00 per MT. Chan, on
behalf of the corporations, assented and affixed his signature on the conforme
portion of the letter.11
On April 17, 2000, Ssangyong forwarded to MCC Pro Forma Invoice No. ST2POSTSO40112 containing the terms and conditions of the transaction. MCC sent
back by fax to Ssangyong the invoice bearing the conformity signature13 of Chan.
As stated in the pro forma invoice, payment for the ordered steel products would be
made through an irrevocable letter of credit (L/C) at sight in favor of Ssangyong.14
Following their usual practice, delivery of the goods was to be made after the L/C
had been opened.
In the meantime, because of its confirmed transaction with MCC, Ssangyong placed
the order with its steel manufacturer, Pohang Iron and Steel Corporation (POSCO), in
South Korea15 and paid the same in full.
Because MCC could open only a partial letter of credit, the order for 220MT of steel
was split into two,16 one for 110MT covered by Pro Forma Invoice No. ST2POSTS0401-117 and another for 110MT covered by ST2-POSTS0401-2,18 both
dated April 17, 2000.
On June 20, 2000, Ssangyong, through its Manila Office, informed Sanyo Seiki and
Chan, by way of a fax transmittal, that it was ready to ship 193.597MT of stainless

steel from Korea to the Philippines. It requested that the opening of the L/C be
facilitated.19 Chan affixed his signature on the fax transmittal and returned the
same, by fax, to Ssangyong.20
Two days later, on June 22, 2000, Ssangyong Manila Office informed Sanyo Seiki,
thru Chan, that it was able to secure a US$30/MT price adjustment on the
contracted price of US$1,860.00/MT for the 200MT stainless steel, and that the
goods were to be shipped in two tranches, the first 100MT on that day and the
second 100MT not later than June 27, 2000. Ssangyong reiterated its request for the
facilitation of the L/C's opening.21
Ssangyong later, through its Manila Office, sent a letter, on June 26, 2000, to the
Treasury Group of Sanyo Seiki that it was looking forward to receiving the L/C details
and a cable copy thereof that day.22 Ssangyong sent a separate letter of the same
date to Sanyo Seiki requesting for the opening of the L/C covering payment of the
first 100MT not later than June 28, 2000.23 Similar letters were transmitted by
Ssangyong Manila Office on June 27, 2000.24 On June 28, 2000, Ssangyong sent
another facsimile letter to MCC stating that its principal in Korea was already in a
difficult situation25 because of the failure of Sanyo Seiki and MCC to open the L/C's.
The following day, June 29, 2000, Ssangyong received, by fax, a letter signed by
Chan, requesting an extension of time to open the L/C because MCC's credit line
with the bank had been fully availed of in connection with another transaction, and
MCC was waiting for an additional credit line.26 On the same date, Ssangyong
replied, requesting that it be informed of the date when the L/C would be opened,
preferably at the earliest possible time, since its Steel Team 2 in Korea was having
problems and Ssangyong was incurring warehousing costs.27 To maintain their good
business relationship and to support MCC in its financial predicament, Ssangyong
offered to negotiate with its steel manufacturer, POSCO, another US$20/MT discount
on the price of the stainless steel ordered. This was intimated in Ssangyong's June
30, 2000 letter to MCC.28 On July 6, 2000, another follow-up letter29 for the
opening of the L/C was sent by Ssangyong to MCC.
However, despite Ssangyong's letters, MCC failed to open a letter of credit.30
Consequently, on August 15, 2000, Ssangyong, through counsel, wrote Sanyo Seiki
that if the L/C's were not opened, Ssangyong would be compelled to cancel the
contract and hold MCC liable for damages for breach thereof amounting to
US$96,132.18, inclusive of warehouse expenses, related interests and charges.31
Later, Pro Forma Invoice Nos. ST2-POSTS080-132 and ST2-POSTS080-233 dated
August 16, 2000 were issued by Ssangyong and sent via fax to MCC. The invoices
slightly varied the terms of the earlier pro forma invoices (ST2-POSTSO401, ST2POSTS0401-1 and ST2-POSTS0401-2), in that the quantity was now officially 100MT
per invoice and the price was reduced to US$1,700.00 per MT. As can be gleaned
from the photocopies of the said August 16, 2000 invoices submitted to the court,
they both bear the conformity signature of MCC Manager Chan.
On August 17, 2000, MCC finally opened an L/C with PCIBank for US$170,000.00
covering payment for 100MT of stainless steel coil under Pro Forma Invoice No. ST2-

POSTS080-2.34 The goods covered by the said invoice were then shipped to and
received by MCC.35
MCC then faxed to Ssangyong a letter dated August 22, 2000 signed by Chan,
requesting for a price adjustment of the order stated in Pro Forma Invoice No. ST2POSTS080-1, considering that the prevailing price of steel at that time was
US$1,500.00/MT, and that MCC lost a lot of money due to a recent strike.36
Ssangyong rejected the request, and, on August 23, 2000, sent a demand letter37
to Chan for the opening of the second and last L/C of US$170,000.00 with a warning
that, if the said L/C was not opened by MCC on August 26, 2000, Ssangyong would
be constrained to cancel the contract and hold MCC liable for US$64,066.99
(representing cost difference, warehousing expenses, interests and charges as of
August 15, 2000) and other damages for breach. Chan failed to reply.
Exasperated, Ssangyong through counsel wrote a letter to MCC, on September 11,
2000, canceling the sales contract under ST2-POSTS0401-1 /ST2-POSTS0401-2, and
demanding payment of US$97,317.37 representing losses, warehousing expenses,
interests and charges.38
Ssangyong then filed, on November 16, 2001, a civil action for damages due to
breach of contract against defendants MCC, Sanyo Seiki and Gregory Chan before
the Regional Trial Court of Makati City. In its complaint,39 Ssangyong alleged that
defendants breached their contract when they refused to open the L/C in the
amount of US$170,000.00 for the remaining 100MT of steel under Pro Forma Invoice
Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2.
After Ssangyong rested its case, defendants filed a Demurrer to Evidence40 alleging
that Ssangyong failed to present the original copies of the pro forma invoices on
which the civil action was based. In an Order dated April 24, 2003, the court denied
the demurrer, ruling that the documentary evidence presented had already been
admitted in the December 16, 2002 Order41 and their admissibility finds support in
Republic Act (R.A.) No. 8792, otherwise known as the Electronic Commerce Act of
2000. Considering that both testimonial and documentary evidence tended to
substantiate the material allegations in the complaint, Ssangyong's evidence
sufficed for purposes of a prima facie case.42
After trial on the merits, the RTC rendered its Decision43 on March 24, 2004, in
favor of Ssangyong. The trial court ruled that when plaintiff agreed to sell and
defendants agreed to buy the 220MT of steel products for the price of US$1,860 per
MT, the contract was perfected. The subject transaction was evidenced by Pro
Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2, which were later
amended only in terms of reduction of volume as well as the price per MT, following
Pro Forma Invoice Nos. ST2-POSTS080-1 and ST2-POSTS080-2. The RTC, however,
excluded Sanyo Seiki from liability for lack of competent evidence. The fallo of the
decision reads:
WHEREFORE, premises considered, Judgment is hereby rendered ordering
defendants MCC Industrial Sales Corporation and Gregory Chan, to pay plaintiff,
jointly and severally the following:

1) Actual damages of US$93,493.87 representing the outstanding principal claim


plus interest at the rate of 6% per annum from March 30, 2001.
2) Attorney's fees in the sum of P50,000.00 plus P2,000.00 per counsel's
appearance in court, the same being deemed just and equitable considering that by
reason of defendants' breach of their obligation under the subject contract, plaintiff
was constrained to litigate to enforce its rights and recover for the damages it
sustained, and therefore had to engage the services of a lawyer.
3) Costs of suit.
No award of exemplary damages for lack of sufficient basis.
SO ORDERED.44
On April 22, 2004, MCC and Chan, through their counsel of record, Atty. Eladio B.
Samson, filed their Notice of Appeal.45 On June 8, 2004, the law office of Castillo
Zamora & Poblador entered its appearance as their collaborating counsel.
In their Appeal Brief filed on March 9, 2005,46 MCC and Chan raised before the CA
the following errors of the RTC:
I. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING THAT APPELLANTS
VIOLATED THEIR CONTRACT WITH APPELLEE
A. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING THAT APPELLANTS
AGREED TO PURCHASE 200 METRIC TONS OF STEEL PRODUCTS FROM APPELLEE,
INSTEAD OF ONLY 100 METRIC TONS.
1. THE HONORABLE COURT A QUO PLAINLY ERRED IN ADMITTING IN EVIDENCE THE
PRO FORMA INVOICES WITH REFERENCE NOS. ST2- POSTS0401-1 AND ST2POSTS0401-2.
II. THE HONORABLE COURT A QUO PLAINLY ERRED IN AWARDING ACTUAL DAMAGES
TO APPELLEE.
III. THE HONORABLE COURT A QUO PLAINLY ERRED IN AWARDING ATTORNEY'S FEES
TO APPELLEE.
IV. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING APPELLANT
GREGORY CHAN JOINTLY AND SEVERALLY LIABLE WITH APPELLANT MCC.47
On August 31, 2005, the CA rendered its Decision48 affirming the ruling of the trial
court, but absolving Chan of any liability. The appellate court ruled, among others,
that Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E",
"E-1" and "F") were admissible in evidence, although they were mere facsimile
printouts of MCC's steel orders.49 The dispositive portion of the appellate court's
decision reads:

WHEREFORE, premises considered, the Court holds:


(1) The award of actual damages, with interest, attorney's fees and costs ordered by
the lower court is hereby AFFIRMED.
(2) Appellant Gregory Chan is hereby ABSOLVED from any liability.
SO ORDERED.50
A copy of the said Decision was received by MCC's and Chan's principal counsel,
Atty. Eladio B. Samson, on September 14, 2005.51 Their collaborating counsel,
Castillo Zamora & Poblador,52 likewise, received a copy of the CA decision on
September 19, 2005.53
On October 4, 2005, Castillo Zamora & Poblador, on behalf of MCC, filed a motion
for reconsideration of the said decision.54 Ssangyong opposed the motion
contending that the decision of the CA had become final and executory on account
of the failure of MCC to file the said motion within the reglementary period. The
appellate court resolved, on November 22, 2005, to deny the motion on its
merits,55 without, however, ruling on the procedural issue raised.
Aggrieved, MCC filed a petition for review on certiorari56 before this Court, imputing
the following errors to the Court of Appeals:
THE COURT OF APPEALS DECIDED A LEGAL QUESTION NOT IN ACCORDANCE WITH
JURISPRUDENCE AND SANCTIONED A DEPARTURE FROM THE USUAL AND ACCEPTED
COURSE OF JUDICIAL PROCEEDINGS BY REVERSING THE COURT A QUO'S DISMISSAL
OF THE COMPLAINT IN CIVIL CASE NO. 02-124 CONSIDERING THAT:
I. THE COURT OF APPEALS ERRED IN SUSTAINING THE ADMISSIBILITY IN EVIDENCE
OF THE PRO-FORMA INVOICES WITH REFERENCE NOS. ST2-POSTSO401-1 AND ST2POSTSO401-2, DESPITE THE FACT THAT THE SAME WERE MERE PHOTOCOPIES OF
FACSIMILE PRINTOUTS.
II. THE COURT OF APPEALS FAILED TO APPRECIATE THE OBVIOUS FACT THAT, EVEN
ASSUMING PETITIONER BREACHED THE SUPPOSED CONTRACT, THE FACT IS THAT
PETITIONER FAILED TO PROVE THAT IT SUFFERED ANY DAMAGES AND THE AMOUNT
THEREOF.
III. THE AWARD OF ACTUAL DAMAGES IN THE AMOUNT OF US$93,493.87 IS SIMPLY
UNCONSCIONABLE AND SHOULD HAVE BEEN AT LEAST REDUCED, IF NOT DELETED
BY THE COURT OF APPEALS.57
In its Comment, Ssangyong sought the dismissal of the petition, raising the
following arguments: that the CA decision dated 15 August 2005 is already final and
executory, because MCC's motion for reconsideration was filed beyond the
reglementary period of 15 days from receipt of a copy thereof, and that, in any
case, it was a pro forma motion; that MCC breached the contract for the purchase of
the steel products when it failed to open the required letter of credit; that the
printout copies and/or photocopies of facsimile or telecopy transmissions were

properly admitted by the trial court because they are considered original documents
under R.A. No. 8792; and that MCC is liable for actual damages and attorney's fees
because of its breach, thus, compelling Ssangyong to litigate.
The principal issues that this Court is called upon to resolve are the following:
I Whether the CA decision dated 15 August 2005 is already final and executory;
II Whether the print-out and/or photocopies of facsimile transmissions are
electronic evidence and admissible as such;
III Whether there was a perfected contract of sale between MCC and Ssangyong,
and, if in the affirmative, whether MCC breached the said contract; and
IV Whether the award of actual damages and attorney's fees in favor of
Ssangyong is proper and justified.
-IIt cannot be gainsaid that in Albano v. Court of Appeals,58 we held that receipt of a
copy of the decision by one of several counsels on record is notice to all, and the
period to appeal commences on such date even if the other counsel has not yet
received a copy of the decision. In this case, when Atty. Samson received a copy of
the CA decision on September 14, 2005, MCC had only fifteen (15) days within
which to file a motion for reconsideration conformably with Section 1, Rule 52 of the
Rules of Court, or to file a petition for review on certiorari in accordance with Section
2, Rule 45. The period should not be reckoned from September 29, 2005 (when
Castillo Zamora & Poblador received their copy of the decision) because notice to
Atty. Samson is deemed notice to collaborating counsel.
We note, however, from the records of the CA, that it was Castillo Zamora &
Poblador, not Atty. Samson, which filed both MCC's and Chan's Brief and Reply Brief.
Apparently, the arrangement between the two counsels was for the collaborating,
not the principal, counsel to file the appeal brief and subsequent pleadings in the
CA. This explains why it was Castillo Zamora & Poblador which filed the motion for
the reconsideration of the CA decision, and they did so on October 5, 2005, well
within the 15-day period from September 29, 2005, when they received their copy
of the CA decision. This could also be the reason why the CA did not find it
necessary to resolve the question of the timeliness of petitioner's motion for
reconsideration, even as the CA denied the same.
Independent of this consideration though, this Court assiduously reviewed the
records and found that strong concerns of substantial justice warrant the relaxation
of this rule.
In Philippine Ports Authority v. Sargasso Construction and Development
Corporation,59 we ruled that:
In Orata v. Intermediate Appellate Court, we held that where strong considerations
of substantive justice are manifest in the petition, this Court may relax the strict

application of the rules of procedure in the exercise of its legal jurisdiction. In


addition to the basic merits of the main case, such a petition usually embodies
justifying circumstance which warrants our heeding to the petitioner's cry for justice
in spite of the earlier negligence of counsel. As we held in Obut v. Court of Appeals:
[W]e cannot look with favor on a course of action which would place the
administration of justice in a straight jacket for then the result would be a poor kind
of justice if there would be justice at all. Verily, judicial orders, such as the one
subject of this petition, are issued to be obeyed, nonetheless a non-compliance is to
be dealt with as the circumstances attending the case may warrant. What should
guide judicial action is the principle that a party-litigant is to be given the fullest
opportunity to establish the merits of his complaint or defense rather than for him
to lose life, liberty, honor or property on technicalities.
The rules of procedure are used only to secure and not override or frustrate justice.
A six-day delay in the perfection of the appeal, as in this case, does not warrant the
outright dismissal of the appeal. In Development Bank of the Philippines vs. Court of
Appeals, we gave due course to the petitioner's appeal despite the late filing of its
brief in the appellate court because such appeal involved public interest. We stated
in the said case that the Court may exempt a particular case from a strict
application of the rules of procedure where the appellant failed to perfect its appeal
within the reglementary period, resulting in the appellate court's failure to obtain
jurisdiction over the case. In Republic vs. Imperial, Jr., we also held that there is
more leeway to exempt a case from the strictness of procedural rules when the
appellate court has already obtained jurisdiction over the appealed case. We
emphasize that:
[T]he rules of procedure are mere tools intended to facilitate the attainment of
justice, rather than frustrate it. A strict and rigid application of the rules must
always be eschewed when it would subvert the rule's primary objective of
enhancing fair trials and expediting justice. Technicalities should never be used to
defeat the substantive rights of the other party. Every party-litigant must be
afforded the amplest opportunity for the proper and just determination of his cause,
free from the constraints of technicalities.60
Moreover, it should be remembered that the Rules were promulgated to set
guidelines in the orderly administration of justice, not to shackle the hand that
dispenses it. Otherwise, the courts would be consigned to being mere slaves to
technical rules, deprived of their judicial discretion. Technicalities must take a
backseat to substantive rights. After all, it is circumspect leniency in this respect
that will give the parties the fullest opportunity to ventilate the merits of their
respective causes, rather than have them lose life, liberty, honor or property on
sheer technicalities.61
The other technical issue posed by respondent is the alleged pro forma nature of
MCC's motion for reconsideration, ostensibly because it merely restated the
arguments previously raised and passed upon by the CA.
In this connection, suffice it to say that the mere restatement of arguments in a
motion for reconsideration does not per se result in a pro forma motion. In Security

Bank and Trust Company, Inc. v. Cuenca,62 we held that a motion for
reconsideration may not be necessarily pro forma even if it reiterates the arguments
earlier passed upon and rejected by the appellate court. A movant may raise the
same arguments precisely to convince the court that its ruling was erroneous.
Furthermore, the pro forma rule will not apply if the arguments were not sufficiently
passed upon and answered in the decision sought to be reconsidered.
- II The second issue poses a novel question that the Court welcomes. It provides the
occasion for this Court to pronounce a definitive interpretation of the equally
innovative provisions of the Electronic Commerce Act of 2000 (R.A. No. 8792) vis-vis the Rules on Electronic Evidence.
Although the parties did not raise the question whether the original facsimile
transmissions are "electronic data messages" or "electronic documents" within the
context of the Electronic Commerce Act (the petitioner merely assails as
inadmissible evidence the photocopies of the said facsimile transmissions), we
deem it appropriate to determine first whether the said fax transmissions are
indeed within the coverage of R.A. No. 8792 before ruling on whether the
photocopies thereof are covered by the law. In any case, this Court has ample
authority to go beyond the pleadings when, in the interest of justice or for the
promotion of public policy, there is a need to make its own findings in order to
support its conclusions.63
Petitioner contends that the photocopies of the pro forma invoices presented by
respondent Ssangyong to prove the perfection of their supposed contract of sale are
inadmissible in evidence and do not fall within the ambit of R.A. No. 8792, because
the law merely admits as the best evidence the original fax transmittal. On the
other hand, respondent posits that, from a reading of the law and the Rules on
Electronic Evidence, the original facsimile transmittal of the pro forma invoice is
admissible in evidence since it is an electronic document and, therefore, the best
evidence under the law and the Rules. Respondent further claims that the
photocopies of these fax transmittals (specifically ST2-POSTS0401-1 and ST2POSTS0401-2) are admissible under the Rules on Evidence because the respondent
sufficiently explained the non-production of the original fax transmittals.
In resolving this issue, the appellate court ruled as follows:
Admissibility of Pro Forma
Invoices; Breach of Contract
by Appellants
Turning first to the appellants' argument against the admissibility of the Pro Forma
Invoices with Reference Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E",
"E-1" and "F", pp. 215-218, Records), appellants argue that the said documents are
inadmissible (sic) being violative of the best evidence rule.
The argument is untenable.

The copies of the said pro-forma invoices submitted by the appellee are admissible
in evidence, although they are mere electronic facsimile printouts of appellant's
orders. Such facsimile printouts are considered Electronic Documents under the
New Rules on Electronic Evidence, which came into effect on August 1, 2001. (Rule
2, Section 1 [h], A.M. No. 01-7-01-SC).
"(h) 'Electronic document' refers to information or the representation of information,
data, figures, symbols or other modes of written expression, described or however
represented, by which a right is established or an obligation extinguished, or by
which a fact may be proved and affirmed, which is received, recorded, transmitted,
stored, processed, retrieved or produced electronically. It includes digitally signed
documents and any printout or output, readable by sight or other means, which
accurately reflects the electronic data message or electronic document. For
purposes of these Rules, the term 'electronic document' may be used
interchangeably with 'electronic data message'.
An electronic document shall be regarded as the equivalent of an original document
under the Best Evidence Rule, as long as it is a printout or output readable by sight
or other means, showing to reflect the data accurately. (Rule 4, Section 1, A.M. No.
01-7-01-SC)
The ruling of the Appellate Court is incorrect. R.A. No. 8792,64 otherwise known as
the Electronic Commerce Act of 2000, considers an electronic data message or an
electronic document as the functional equivalent of a written document for
evidentiary purposes.65 The Rules on Electronic Evidence66 regards an electronic
document as admissible in evidence if it complies with the rules on admissibility
prescribed by the Rules of Court and related laws, and is authenticated in the
manner prescribed by the said Rules.67 An electronic document is also the
equivalent of an original document under the Best Evidence Rule, if it is a printout
or output readable by sight or other means, shown to reflect the data accurately.68
Thus, to be admissible in evidence as an electronic data message or to be
considered as the functional equivalent of an original document under the Best
Evidence Rule, the writing must foremost be an "electronic data message" or an
"electronic document."
The Electronic Commerce Act of 2000 defines electronic data message and
electronic document as follows:
Sec. 5. Definition of Terms. For the purposes of this Act, the following terms are
defined, as follows:
xxx
c. "Electronic Data Message" refers to information generated, sent, received or
stored by electronic, optical or similar means.
xxx

f. "Electronic Document" refers to information or the representation of information,


data, figures, symbols or other modes of written expression, described or however
represented, by which a right is established or an obligation extinguished, or by
which a fact may be proved and affirmed, which is received, recorded, transmitted,
stored, processed, retrieved or produced electronically.
The Implementing Rules and Regulations (IRR) of R.A. No. 8792,69 which was signed
on July 13, 2000 by the then Secretaries of the Department of Trade and Industry,
the Department of Budget and Management, and then Governor of the Bangko
Sentral ng Pilipinas, defines the terms as:
Sec. 6. Definition of Terms. For the purposes of this Act and these Rules, the
following terms are defined, as follows:
xxx
(e) "Electronic Data Message" refers to information generated, sent, received or
stored by electronic, optical or similar means, but not limited to, electronic data
interchange (EDI), electronic mail, telegram, telex or telecopy. Throughout these
Rules, the term "electronic data message" shall be equivalent to and be used
interchangeably with "electronic document."
xxxx
(h) "Electronic Document" refers to information or the representation of information,
data, figures, symbols or other modes of written expression, described or however
represented, by which a right is established or an obligation extinguished, or by
which a fact may be proved and affirmed, which is received, recorded, transmitted,
stored, processed, retrieved or produced electronically. Throughout these Rules, the
term "electronic document" shall be equivalent to and be used interchangeably with
"electronic data message."
The phrase "but not limited to, electronic data interchange (EDI), electronic mail,
telegram, telex or telecopy" in the IRR's definition of "electronic data message" is
copied from the Model Law on Electronic Commerce adopted by the United Nations
Commission on International Trade Law (UNCITRAL),70 from which majority of the
provisions of R.A. No. 8792 were taken.71 While Congress deleted this phrase in the
Electronic Commerce Act of 2000, the drafters of the IRR reinstated it. The deletion
by Congress of the said phrase is significant and pivotal, as discussed hereunder.
The clause on the interchangeability of the terms "electronic data message" and
"electronic document" was the result of the Senate of the Philippines' adoption, in
Senate Bill 1902, of the phrase "electronic data message" and the House of
Representative's employment, in House Bill 9971, of the term "electronic
document."72 In order to expedite the reconciliation of the two versions, the
technical working group of the Bicameral Conference Committee adopted both
terms and intended them to be the equivalent of each one.73 Be that as it may,
there is a slight difference between the two terms. While "data message" has
reference to information electronically sent, stored or transmitted, it does not
necessarily mean that it will give rise to a right or extinguish an obligation,74 unlike

an electronic document. Evident from the law, however, is the legislative intent to
give the two terms the same construction.
The Rules on Electronic Evidence promulgated by this Court defines the said terms
in the following manner:
SECTION 1. Definition of Terms. For purposes of these Rules, the following terms
are defined, as follows:
xxxx
(g) "Electronic data message" refers to information generated, sent, received or
stored by electronic, optical or similar means.
(h) "Electronic document" refers to information or the representation of information,
data, figures, symbols or other modes of written expression, described or however
represented, by which a right is established or an obligation extinguished, or by
which a fact may be proved and affirmed, which is received, recorded, transmitted,
stored, processed, retrieved or produced electronically. It includes digitally signed
documents and print-out or output, readable by sight or other means, which
accurately reflects the electronic data message or electronic document. For
purposes of these Rules, the term "electronic document" may be used
interchangeably with "electronic data message."
Given these definitions, we go back to the original question: Is an original printout of
a facsimile transmission an electronic data message or electronic document?
The definitions under the Electronic Commerce Act of 2000, its IRR and the Rules on
Electronic Evidence, at first glance, convey the impression that facsimile
transmissions are electronic data messages or electronic documents because they
are sent by electronic means. The expanded definition of an "electronic data
message" under the IRR, consistent with the UNCITRAL Model Law, further supports
this theory considering that the enumeration "xxx [is] not limited to, electronic data
interchange (EDI), electronic mail, telegram, telex or telecopy." And to telecopy is to
send a document from one place to another via a fax machine.75
As further guide for the Court in its task of statutory construction, Section 37 of the
Electronic Commerce Act of 2000 provides that
Unless otherwise expressly provided for, the interpretation of this Act shall give due
regard to its international origin and the need to promote uniformity in its
application and the observance of good faith in international trade relations. The
generally accepted principles of international law and convention on electronic
commerce shall likewise be considered.
Obviously, the "international origin" mentioned in this section can only refer to the
UNCITRAL Model Law, and the UNCITRAL's definition of "data message":

"Data message" means information generated, sent, received or stored by


electronic, optical or similar means including, but not limited to, electronic data
interchange (EDI), electronic mail, telegram, telex or telecopy.76
is substantially the same as the IRR's characterization of an "electronic data
message."
However, Congress deleted the phrase, "but not limited to, electronic data
interchange (EDI), electronic mail, telegram, telex or telecopy," and replaced the
term "data message" (as found in the UNCITRAL Model Law ) with "electronic data
message." This legislative divergence from what is assumed as the term's
"international origin" has bred uncertainty and now impels the Court to make an
inquiry into the true intent of the framers of the law. Indeed, in the construction or
interpretation of a legislative measure, the primary rule is to search for and
determine the intent and spirit of the law.77 A construction should be rejected that
gives to the language used in a statute a meaning that does not accomplish the
purpose for which the statute was enacted, and that tends to defeat the ends which
are sought to be attained by the enactment.78
Interestingly, when Senator Ramon B. Magsaysay, Jr., the principal author of Senate
Bill 1902 (the predecessor of R.A. No. 8792), sponsored the bill on second reading,
he proposed to adopt the term "data message" as formulated and defined in the
UNCITRAL Model Law.79 During the period of amendments, however, the term
evolved into "electronic data message," and the phrase "but not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or telecopy" in the
UNCITRAL Model Law was deleted. Furthermore, the term "electronic data
message," though maintaining its description under the UNCITRAL Model Law,
except for the aforesaid deleted phrase, conveyed a different meaning, as revealed
in the following proceedings:
xxxx
Senator Santiago. Yes, Mr. President. I will furnish a copy together with the
explanation of this proposed amendment.
And then finally, before I leave the Floor, may I please be allowed to go back to
Section 5; the Definition of Terms. In light of the acceptance by the good Senator of
my proposed amendments, it will then become necessary to add certain terms in
our list of terms to be defined. I would like to add a definition on what is "data,"
what is "electronic record" and what is an "electronic record system."
If the gentleman will give me permission, I will proceed with the proposed
amendment on Definition of Terms, Section 5.
Senator Magsaysay. Please go ahead, Senator Santiago.
Senator Santiago. We are in Part 1, short title on the Declaration of Policy, Section 5,
Definition of Terms.

At the appropriate places in the listing of these terms that have to be defined since
these are arranged alphabetically, Mr. President, I would like to insert the term DATA
and its definition. So, the amendment will read: "DATA" MEANS REPRESENTATION, IN
ANY FORM, OF INFORMATION OR CONCEPTS.
The explanation is this: This definition of "data" or "data" as it is now fashionably
pronounced in America - - the definition of "data" ensures that our bill applies to any
form of information in an electronic record, whether these are figures, facts or ideas.
So again, the proposed amendment is this: "DATA" MEANS REPRESENTATIONS, IN
ANY FORM, OF INFORMATION OR CONCEPTS.
Senator Magsaysay. May I know how will this affect the definition of "Data Message"
which encompasses electronic records, electronic writings and electronic
documents?
Senator Santiago. These are completely congruent with each other. These are
compatible. When we define "data," we are simply reinforcing the definition of what
is a data message.
Senator Magsaysay. It is accepted, Mr. President.
Senator Santiago. Thank you. The next term is "ELECTRONIC RECORD." The
proposed amendment is as follows:
"ELECTRONIC RECORD" MEANS DATA THAT IS RECORDED OR STORED ON ANY
MEDIUM IN OR BY A COMPUTER SYSTEM OR OTHER SIMILAR DEVICE, THAT CAN BE
READ OR PERCEIVED BY A PERSON OR A COMPUTER SYSTEM OR OTHER SIMILAR
DEVICE. IT INCLUDES A DISPLAY, PRINTOUT OR OTHER OUTPUT OF THAT DATA.
The explanation for this term and its definition is as follows: The term "ELECTRONIC
RECORD" fixes the scope of our bill. The record is the data. The record may be on
any medium. It is electronic because it is recorded or stored in or by a computer
system or a similar device.
The amendment is intended to apply, for example, to data on magnetic strips on
cards or in Smart cards. As drafted, it would not apply to telexes or faxes, except
computer-generated faxes, unlike the United Nations model law on electronic
commerce. It would also not apply to regular digital telephone conversations since
the information is not recorded. It would apply to voice mail since the information
has been recorded in or by a device similar to a computer. Likewise, video records
are not covered. Though when the video is transferred to a website, it would be
covered because of the involvement of the computer. Music recorded by a computer
system on a compact disc would be covered.
In short, not all data recorded or stored in digital form is covered. A computer or a
similar device has to be involved in its creation or storage. The term "similar device"
does not extend to all devices that create or store data in digital form. Although
things that are not recorded or preserved by or in a computer system are omitted
from this bill, these may well be admissible under other rules of law. This provision

focuses on replacing the search for originality proving the reliability of systems
instead of that of individual records and using standards to show systems reliability.
Paper records that are produced directly by a computer system such as printouts
are themselves electronic records being just the means of intelligible display of the
contents of the record. Photocopies of the printout would be paper record subject to
the usual rules about copies, but the original printout would be subject to the rules
of admissibility of this bill.
However, printouts that are used only as paper records and whose computer origin
is never again called on are treated as paper records. In that case, the reliability of
the computer system that produces the record is irrelevant to its reliability.
Senator Magsaysay. Mr. President, if my memory does not fail me, earlier, the lady
Senator accepted that we use the term "Data Message" rather than "ELECTRONIC
RECORD" in being consistent with the UNCITRAL term of "Data Message." So with
the new amendment of defining "ELECTRONIC RECORD," will this affect her
accepting of the use of "Data Message" instead of "ELECTRONIC RECORD"?
Senator Santiago. No, it will not. Thank you for reminding me. The term I would like
to insert is ELECTRONIC DATA MESSAGE in lieu of "ELECTRONIC RECORD."
Senator Magsaysay. Then we are, in effect, amending the term of the definition of
"Data Message" on page 2A, line 31, to which we have no objection.
Senator Santiago. Thank you, Mr. President.
xxxx
Senator Santiago. Mr. President, I have proposed all the amendments that I desire
to, including the amendment on the effect of error or change. I will provide the
language of the amendment together with the explanation supporting that
amendment to the distinguished sponsor and then he can feel free to take it up in
any session without any further intervention.
Senator Magsaysay. Before we end, Mr. President, I understand from the proponent
of these amendments that these are based on the Canadian E-commerce Law of
1998. Is that not right?
Senator Santiago. That is correct.80
Thus, when the Senate consequently voted to adopt the term "electronic data
message," it was consonant with the explanation of Senator Miriam DefensorSantiago that it would not apply "to telexes or faxes, except computer-generated
faxes, unlike the United Nations model law on electronic commerce." In explaining
the term "electronic record" patterned after the E-Commerce Law of Canada,
Senator Defensor-Santiago had in mind the term "electronic data message." This
term then, while maintaining part of the UNCITRAL Model Law's terminology of "data
message," has assumed a different context, this time, consonant with the term
"electronic record" in the law of Canada. It accounts for the addition of the word

"electronic" and the deletion of the phrase "but not limited to, electronic data
interchange (EDI), electronic mail, telegram, telex or telecopy." Noteworthy is that
the Uniform Law Conference of Canada, explains the term "electronic record," as
drafted in the Uniform Electronic Evidence Act, in a manner strikingly similar to Sen.
Santiago's explanation during the Senate deliberations:
"Electronic record" fixes the scope of the Act. The record is the data. The record
may be any medium. It is "electronic" because it is recorded or stored in or by a
computer system or similar device. The Act is intended to apply, for example, to
data on magnetic strips on cards, or in smart cards. As drafted, it would not apply to
telexes or faxes (except computer-generated faxes), unlike the United Nations
Model Law on Electronic Commerce. It would also not apply to regular digital
telephone conversations, since the information is not recorded. It would apply to
voice mail, since the information has been recorded in or by a device similar to a
computer. Likewise video records are not covered, though when the video is
transferred to a Web site it would be, because of the involvement of the computer.
Music recorded by a computer system on a compact disk would be covered.
In short, not all data recorded or stored in "digital" form is covered. A computer or
similar device has to be involved in its creation or storage. The term "similar device"
does not extend to all devices that create or store data in digital form. Although
things that are not recorded or preserved by or in a computer system are omitted
from this Act, they may well be admissible under other rules of law. This Act focuses
on replacing the search for originality, proving the reliability of systems instead of
that of individual records, and using standards to show systems reliability.
Paper records that are produced directly by a computer system, such as printouts,
are themselves electronic records, being just the means of intelligible display of the
contents of the record. Photocopies of the printout would be paper records subject
to the usual rules about copies, but the "original" printout would be subject to the
rules of admissibility of this Act.
However, printouts that are used only as paper records, and whose computer origin
is never again called on, are treated as paper records. See subsection 4(2). In this
case the reliability of the computer system that produced the record is relevant to
its reliability.81
There is no question then that when Congress formulated the term "electronic data
message," it intended the same meaning as the term "electronic record" in the
Canada law. This construction of the term "electronic data message," which
excludes telexes or faxes, except computer-generated faxes, is in harmony with the
Electronic Commerce Law's focus on "paperless" communications and the
"functional equivalent approach"82 that it espouses. In fact, the deliberations of the
Legislature are replete with discussions on paperless and digital transactions.
Facsimile transmissions are not, in this sense, "paperless," but verily are paperbased.
A facsimile machine, which was first patented in 1843 by Alexander Bain,83 is a
device that can send or receive pictures and text over a telephone line. It works by

digitizing an imagedividing it into a grid of dots. Each dot is either on or off,


depending on whether it is black or white. Electronically, each dot is represented by
a bit that has a value of either 0 (off) or 1 (on). In this way, the fax machine
translates a picture into a series of zeros and ones (called a bit map) that can be
transmitted like normal computer data. On the receiving side, a fax machine reads
the incoming data, translates the zeros and ones back into dots, and reprints the
picture.84 A fax machine is essentially an image scanner, a modem and a computer
printer combined into a highly specialized package. The scanner converts the
content of a physical document into a digital image, the modem sends the image
data over a phone line, and the printer at the other end makes a duplicate of the
original document.85 Thus, in Garvida v. Sales, Jr.,86 where we explained the
unacceptability of filing pleadings through fax machines, we ruled that:
A facsimile or fax transmission is a process involving the transmission and
reproduction of printed and graphic matter by scanning an original copy, one
elemental area at a time, and representing the shade or tone of each area by a
specified amount of electric current. The current is transmitted as a signal over
regular telephone lines or via microwave relay and is used by the receiver to
reproduce an image of the elemental area in the proper position and the correct
shade. The receiver is equipped with a stylus or other device that produces a
printed record on paper referred to as a facsimile.
x x x A facsimile is not a genuine and authentic pleading. It is, at best, an exact
copy preserving all the marks of an original. Without the original, there is no way of
determining on its face whether the facsimile pleading is genuine and authentic and
was originally signed by the party and his counsel. It may, in fact, be a sham
pleading.87
Accordingly, in an ordinary facsimile transmission, there exists an original paperbased information or data that is scanned, sent through a phone line, and re-printed
at the receiving end. Be it noted that in enacting the Electronic Commerce Act of
2000, Congress intended virtual or paperless writings to be the functional
equivalent and to have the same legal function as paper-based documents.88
Further, in a virtual or paperless environment, technically, there is no original copy
to speak of, as all direct printouts of the virtual reality are the same, in all respects,
and are considered as originals.89 Ineluctably, the law's definition of "electronic
data message," which, as aforesaid, is interchangeable with "electronic document,"
could not have included facsimile transmissions, which have an original paper-based
copy as sent and a paper-based facsimile copy as received. These two copies are
distinct from each other, and have different legal effects. While Congress
anticipated future developments in communications and computer technology90
when it drafted the law, it excluded the early forms of technology, like telegraph,
telex and telecopy (except computer-generated faxes, which is a newer
development as compared to the ordinary fax machine to fax machine
transmission), when it defined the term "electronic data message."
Clearly then, the IRR went beyond the parameters of the law when it adopted
verbatim the UNCITRAL Model Law's definition of "data message," without
considering the intention of Congress when the latter deleted the phrase "but not
limited to, electronic data interchange (EDI), electronic mail, telegram, telex or

telecopy." The inclusion of this phrase in the IRR offends a basic tenet in the
exercise of the rule-making power of administrative agencies. After all, the power of
administrative officials to promulgate rules in the implementation of a statute is
necessarily limited to what is found in the legislative enactment itself. The
implementing rules and regulations of a law cannot extend the law or expand its
coverage, as the power to amend or repeal a statute is vested in the Legislature.91
Thus, if a discrepancy occurs between the basic law and an implementing rule or
regulation, it is the former that prevails, because the law cannot be broadened by a
mere administrative issuancean administrative agency certainly cannot amend an
act of Congress.92 Had the Legislature really wanted ordinary fax transmissions to
be covered by the mantle of the Electronic Commerce Act of 2000, it could have
easily lifted without a bit of tatter the entire wordings of the UNCITRAL Model Law.
Incidentally, the National Statistical Coordination Board Task Force on the
Measurement of E-Commerce,93 on November 22, 2006, recommended a working
definition of "electronic commerce," as "[a]ny commercial transaction conducted
through electronic, optical and similar medium, mode, instrumentality and
technology. The transaction includes the sale or purchase of goods and services,
between individuals, households, businesses and governments conducted over
computer-mediated networks through the Internet, mobile phones, electronic data
interchange (EDI) and other channels through open and closed networks." The Task
Force's proposed definition is similar to the Organization of Economic Cooperation
and Development's (OECD's) broad definition as it covers transactions made over
any network, and, in addition, it adopted the following provisions of the OECD
definition: (1) for transactions, it covers sale or purchase of goods and services; (2)
for channel/network, it considers any computer-mediated network and NOT limited
to Internet alone; (3) it excludes transactions received/placed using fax, telephone
or non-interactive mail; (4) it considers payments done online or offline; and (5) it
considers delivery made online (like downloading of purchased books, music or
software programs) or offline (deliveries of goods).94
We, therefore, conclude that the terms "electronic data message" and "electronic
document," as defined under the Electronic Commerce Act of 2000, do not include a
facsimile transmission. Accordingly, a facsimile transmission cannot be considered
as electronic evidence. It is not the functional equivalent of an original under the
Best Evidence Rule and is not admissible as electronic evidence.
Since a facsimile transmission is not an "electronic data message" or an "electronic
document," and cannot be considered as electronic evidence by the Court, with
greater reason is a photocopy of such a fax transmission not electronic evidence. In
the present case, therefore, Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2POSTS0401-2 (Exhibits "E" and "F"), which are mere photocopies of the original fax
transmittals, are not electronic evidence, contrary to the position of both the trial
and the appellate courts.
- III Nevertheless, despite the pro forma invoices not being electronic evidence, this
Court finds that respondent has proven by preponderance of evidence the existence
of a perfected contract of sale.

In an action for damages due to a breach of a contract, it is essential that the


claimant proves (1) the existence of a perfected contract, (2) the breach thereof by
the other contracting party and (3) the damages which he/she sustained due to
such breach. Actori incumbit onus probandi. The burden of proof rests on the party
who advances a proposition affirmatively.95 In other words, a plaintiff in a civil
action must establish his case by a preponderance of evidence, that is, evidence
that has greater weight, or is more convincing than that which is offered in
opposition to it.96
In general, contracts are perfected by mere consent,97 which is manifested by the
meeting of the offer and the acceptance upon the thing and the cause which are to
constitute the contract. The offer must be certain and the acceptance absolute.98
They are, moreover, obligatory in whatever form they may have been entered into,
provided all the essential requisites for their validity are present.99 Sale, being a
consensual contract, follows the general rule that it is perfected at the moment
there is a meeting of the minds upon the thing which is the object of the contract
and upon the price. From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the form of
contracts.100
The essential elements of a contract of sale are (1) consent or meeting of the
minds, that is, to transfer ownership in exchange for the price, (2) object certain
which is the subject matter of the contract, and (3) cause of the obligation which is
established.101
In this case, to establish the existence of a perfected contract of sale between the
parties, respondent Ssangyong formally offered in evidence the testimonies of its
witnesses and the following exhibits:
Exhibit
Description
Purpose
E
Pro forma Invoice dated 17 April 2000 with Contract No. ST2-POSTS0401-1,
photocopy
To show that defendants contracted with plaintiff for the delivery of 110 MT of
stainless steel from Korea payable by way of an irrevocable letter of credit in favor
of plaintiff, among other conditions.
E-1
Pro forma Invoice dated 17 April 2000 with Contract No. ST2-POSTS0401, contained
in facsimile/thermal paper faxed by defendants to plaintiff showing the printed

transmission details on the upper portion of said paper as coming from defendant
MCC on 26 Apr 00 08:41AM
To show that defendants sent their confirmation of the (i) delivery to it of the
specified stainless steel products, (ii) defendants' payment thereof by way of an
irrevocable letter of credit in favor of plaintiff, among other conditions.
E-2
Conforme signature of Mr. Gregory Chan, contained in facsimile/thermal paper faxed
by defendants to plaintiff showing the printed transmission details on the upper
portion of said paper as coming from defendant MCC on 26 Apr 00 08:41AM
To show that defendants sent their confirmation of the (i) delivery to it of the total of
220MT specified stainless steel products, (ii) defendants' payment thereof by way of
an irrevocable letter of credit in favor of plaintiff, among other conditions.
F
Pro forma Invoice dated 17 April 2000 with Contract No. ST2-POSTSO401-2,
photocopy
To show that defendants contracted with plaintiff for delivery of another 110 MT of
stainless steel from Korea payable by way of an irrevocable letter of credit in favor
of plaintiff, among other conditions.
G
Letter to defendant SANYO SEIKE dated 20 June 2000, contained in
facsimile/thermal paper
To prove that defendants were informed of the date of L/C opening and defendant's
conforme/approval thereof.
G-1
Signature of defendant Gregory Chan, contained in facsimile/thermal paper.
H
Letter to defendants dated 22 June 2000, original
To prove that defendants were informed of the successful price adjustments secured
by plaintiff in favor of former and were advised of the schedules of its L/C opening.
I
Letter to defendants dated 26 June 2000, original

To prove that plaintiff repeatedly requested defendants for the agreed opening of
the Letters of Credit, defendants' failure and refusal to comply with their obligations
and the problems of plaintiff is incurring by reason of defendants' failure and refusal
to open the L/Cs.
J
Letter to defendants dated 26 June 2000, original
K
Letter to defendants dated 27 June 2000, original
L
Facsimile message to defendants dated 28 June 2000, photocopy
M
Letter from defendants dated 29 June 2000, contained in facsimile/thermal paper
faxed by defendants to plaintiff showing the printed transmission details on the
upper portion of said paper as coming from defendant MCC on 29 June 00 11:12 AM
To prove that defendants admit of their liabilities to plaintiff, that they requested for
"more extension" of time for the opening of the Letter of Credit, and begging for
favorable understanding and consideration.
M-1
Signature of defendant Gregory Chan, contained in facsimile/thermal paper faxed by
defendants to plaintiff showing the printed transmission details on the upper portion
of said paper as coming from defendant MCC on June 00 11:12 AM

N
Letter to defendants dated 29 June 2000, original

O
Letter to defendants dated 30 June 2000, photocopy
To prove that plaintiff reiterated its request for defendants to L/C opening after the
latter's request for extension of time was granted, defendants' failure and refusal to
comply therewith extension of time notwithstanding.
P

Letter to defendants dated 06 July 2000, original

Q
Demand letter to defendants dated 15 Aug 2000, original
To prove that plaintiff was constrained to engaged services of a lawyer for collection
efforts.
R
Demand letter to defendants dated 23 Aug 2000, original
To prove that defendants opened the first L/C in favor of plaintiff, requested for
further postponement of the final L/C and for minimal amounts, were urged to open
the final L/C on time, and were informed that failure to comply will cancel the
contract.
S
Demand letter to defendants dated 11 Sept 2000, original
To show defendants' refusal and failure to open the final L/C on time, the
cancellation of the contract as a consequence thereof, and final demand upon
defendants to remit its obligations.
W
Letter from plaintiff SSANGYONG to defendant SANYO SEIKI dated 13 April 2000,
with fax back from defendants SANYO SEIKI/MCC to plaintiff SSANGYONG, contained
in facsimile/thermal paper with back-up photocopy
To prove that there was a perfected sale and purchase agreement between the
parties for 220 metric tons of steel products at the price of US$1,860/ton.
W-1
Conforme signature of defendant Gregory Chan, contained in facsimile/thermal
paper with back-up photocopy
To prove that defendants, acting through Gregory Chan, agreed to the sale and
purchase of 220 metric tons of steel products at the price of US$1,860/ton.
W-2
Name of sender MCC Industrial Sales Corporation

To prove that defendants sent their conformity to the sale and purchase agreement
by facsimile transmission.
X
Pro forma Invoice dated 16 August 2000, photocopy
To prove that defendant MCC agreed to adjust and split the confirmed purchase
order into 2 shipments at 100 metric tons each at the discounted price of
US$1,700/ton.
X-1
Notation "1/2", photocopy
To prove that the present Pro forma Invoice was the first of 2 pro forma invoices.
X-2
Ref. No. ST2-POSTS080-1, photocopy
To prove that the present Pro forma Invoice was the first of 2 pro forma invoices.
X-3
Conforme signature of defendant Gregory Chan, photocopy
To prove that defendant MCC, acting through Gregory Chan, agreed to the sale and
purchase of the balance of 100 metric tons at the discounted price of US$1,700/ton,
apart from the other order and shipment of 100 metric tons which was delivered by
plaintiff SSANGYONG and paid for by defendant MCC.
DD
Letter from defendant MCC to plaintiff SSANGYONG dated 22 August 2000,
contained in facsimile/thermal paper with back-up photocopy
To prove that there was a perfected sale and purchase agreement between plaintiff
SSANGYONG and defendant MCC for the balance of 100 metric tons, apart from the
other order and shipment of 100 metric tons which was delivered by plaintiff
SSANGYONG and paid for by defendant MCC.
DD-1
Ref. No. ST2-POSTS080-1, contained in facsimile/thermal paper with back-up
photocopy
To prove that there was a perfected sale and purchase agreement between plaintiff
SSANGYONG and defendant MCC for the balance of 100 metric tons, apart from the

other order and shipment of 100 metric tons which was delivered by plaintiff
SSANGYONG and paid for by defendant MCC.
DD-2
Signature of defendant Gregory Chan, contained in facsimile/thermal paper with
back-up photocopy
To prove that defendant MCC, acting through Gregory Chan, agreed to the sale and
purchase of the balance of 100 metric tons, apart from the other order and
shipment of 100 metric tons which was delivered by plaintiff Ssangyong and paid
for by defendant MCC.102
Significantly, among these documentary evidence presented by respondent, MCC, in
its petition before this Court, assails the admissibility only of Pro Forma Invoice Nos.
ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E" and "F"). After sifting through
the records, the Court found that these invoices are mere photocopies of their
original fax transmittals. Ssangyong avers that these documents were prepared
after MCC asked for the splitting of the original order into two, so that the latter can
apply for an L/C with greater facility. It, however, failed to explain why the originals
of these documents were not presented.
To determine whether these documents are admissible in evidence, we apply the
ordinary Rules on Evidence, for as discussed above we cannot apply the Electronic
Commerce Act of 2000 and the Rules on Electronic Evidence.
Because these documents are mere photocopies, they are simply secondary
evidence, admissible only upon compliance with Rule 130, Section 5, which states,
"[w]hen the original document has been lost or destroyed, or cannot be produced in
court, the offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by a copy, or by
a recital of its contents in some authentic document, or by the testimony of
witnesses in the order stated." Furthermore, the offeror of secondary evidence must
prove the predicates thereof, namely: (a) the loss or destruction of the original
without bad faith on the part of the proponent/offeror which can be shown by
circumstantial evidence of routine practices of destruction of documents; (b) the
proponent must prove by a fair preponderance of evidence as to raise a reasonable
inference of the loss or destruction of the original copy; and (c) it must be shown
that a diligent and bona fide but unsuccessful search has been made for the
document in the proper place or places. It has been held that where the missing
document is the foundation of the action, more strictness in proof is required than
where the document is only collaterally involved.103
Given these norms, we find that respondent failed to prove the existence of the
original fax transmissions of Exhibits E and F, and likewise did not sufficiently prove
the loss or destruction of the originals. Thus, Exhibits E and F cannot be admitted in
evidence and accorded probative weight.
It is observed, however, that respondent Ssangyong did not rely merely on Exhibits
E and F to prove the perfected contract. It also introduced in evidence a variety of

other documents, as enumerated above, together with the testimonies of its


witnesses. Notable among them are Pro Forma Invoice Nos. ST2-POSTS080-1 and
ST2-POSTS080-2 which were issued by Ssangyong and sent via fax to MCC. As
already mentioned, these invoices slightly varied the terms of the earlier invoices
such that the quantity was now officially 100MT per invoice and the price reduced to
US$1,700.00 per MT. The copies of the said August 16, 2000 invoices submitted to
the court bear the conformity signature of MCC Manager Chan.
Pro Forma Invoice No. ST2-POSTS080-1 (Exhibit "X"), however, is a mere photocopy
of its original. But then again, petitioner MCC does not assail the admissibility of this
document in the instant petition. Verily, evidence not objected to is deemed
admitted and may be validly considered by the court in arriving at its judgment.104
Issues not raised on appeal are deemed abandoned.
As to Pro Forma Invoice No. ST2-POSTS080-2 (Exhibits "1-A" and "2-C"), which was
certified by PCIBank as a true copy of its original,105 it was, in fact, petitioner MCC
which introduced this document in evidence. Petitioner MCC paid for the order
stated in this invoice. Its admissibility, therefore, is not open to question.
These invoices (ST2-POSTS0401, ST2-POSTS080-1 and ST2-POSTS080-2), along with
the other unchallenged documentary evidence of respondent Ssangyong,
preponderate in favor of the claim that a contract of sale was perfected by the
parties.
This Court also finds merit in the following observations of the trial court:
Defendants presented Letter of Credit (Exhibits "1", "1-A" to "1-R") referring to Pro
Forma Invoice for Contract No. ST2POSTS080-2, in the amount of US$170,000.00,
and which bears the signature of Gregory Chan, General Manager of MCC. Plaintiff,
on the other hand, presented Pro Forma Invoice referring to Contract No. ST2POSTS080-1, in the amount of US$170,000.00, which likewise bears the signature of
Gregory Chan, MCC. Plaintiff accounted for the notation "1/2" on the right upper
portion of the Invoice, that is, that it was the first of two (2) pro forma invoices
covering the subject contract between plaintiff and the defendants. Defendants, on
the other hand, failed to account for the notation "2/2" in its Pro Forma Invoice
(Exhibit "1-A"). Observably further, both Pro Forma Invoices bear the same date and
details, which logically mean that they both apply to one and the same
transaction.106
Indeed, why would petitioner open an L/C for the second half of the transaction if
there was no first half to speak of?
The logical chain of events, as gleaned from the evidence of both parties, started
with the petitioner and the respondent agreeing on the sale and purchase of 220MT
of stainless steel at US$1,860.00 per MT. This initial contract was perfected. Later,
as petitioner asked for several extensions to pay, adjustments in the delivery dates,
and discounts in the price as originally agreed, the parties slightly varied the terms
of their contract, without necessarily novating it, to the effect that the original order
was reduced to 200MT, split into two deliveries, and the price discounted to
US$1,700 per MT. Petitioner, however, paid only half of its obligation and failed to

open an L/C for the other 100MT. Notably, the conduct of both parties sufficiently
established the existence of a contract of sale, even if the writings of the parties,
because of their contested admissibility, were not as explicit in establishing a
contract.107 Appropriate conduct by the parties may be sufficient to establish an
agreement, and while there may be instances where the exchange of
correspondence does not disclose the exact point at which the deal was closed, the
actions of the parties may indicate that a binding obligation has been
undertaken.108
With our finding that there is a valid contract, it is crystal-clear that when petitioner
did not open the L/C for the first half of the transaction (100MT), despite numerous
demands from respondent Ssangyong, petitioner breached its contractual
obligation. It is a well-entrenched rule that the failure of a buyer to furnish an
agreed letter of credit is a breach of the contract between buyer and seller. Indeed,
where the buyer fails to open a letter of credit as stipulated, the seller or exporter is
entitled to claim damages for such breach. Damages for failure to open a
commercial credit may, in appropriate cases, include the loss of profit which the
seller would reasonably have made had the transaction been carried out.109
- IV This Court, however, finds that the award of actual damages is not in accord with
the evidence on record. It is axiomatic that actual or compensatory damages cannot
be presumed, but must be proven with a reasonable degree of certainty.110 In
Villafuerte v. Court of Appeals,111 we explained that:
Actual or compensatory damages are those awarded in order to compensate a party
for an injury or loss he suffered. They arise out of a sense of natural justice and are
aimed at repairing the wrong done. Except as provided by law or by stipulation, a
party is entitled to an adequate compensation only for such pecuniary loss as he
has duly proven. It is hornbook doctrine that to be able to recover actual damages,
the claimant bears the onus of presenting before the court actual proof of the
damages alleged to have been suffered, thus:
A party is entitled to an adequate compensation for such pecuniary loss actually
suffered by him as he has duly proved. Such damages, to be recoverable, must not
only be capable of proof, but must actually be proved with a reasonable degree of
certainty. We have emphasized that these damages cannot be presumed and
courts, in making an award must point out specific facts which could afford a basis
for measuring whatever compensatory or actual damages are borne.112
In the instant case, the trial court awarded to respondent Ssangyong US$93,493.87
as actual damages. On appeal, the same was affirmed by the appellate court.
Noticeably, however, the trial and the appellate courts, in making the said award,
relied on the following documents submitted in evidence by the respondent: (1)
Exhibit "U," the Statement of Account dated March 30, 2001; (2) Exhibit "U-1," the
details of the said Statement of Account); (3) Exhibit "V," the contract of the alleged
resale of the goods to a Korean corporation; and (4) Exhibit "V-1," the authentication
of the resale contract from the Korean Embassy and certification from the Philippine
Consular Office.

The statement of account and the details of the losses sustained by respondent due
to the said breach are, at best, self-serving. It was respondent Ssangyong itself
which prepared the said documents. The items therein are not even substantiated
by official receipts. In the absence of corroborative evidence, the said statement of
account is not sufficient basis to award actual damages. The court cannot simply
rely on speculation, conjecture or guesswork as to the fact and amount of damages,
but must depend on competent proof that the claimant had suffered, and on
evidence of, the actual amount thereof.113
Furthermore, the sales contract and its authentication certificates, Exhibits "V" and
"V-1," allegedly evidencing the resale at a loss of the stainless steel subject of the
parties' breached contract, fail to convince this Court of the veracity of its contents.
The steel items indicated in the sales contract114 with a Korean corporation are
different in all respects from the items ordered by petitioner MCC, even in size and
quantity. We observed the following discrepancies:
List of commodities as stated in Exhibit "V":
COMMODITY: Stainless Steel HR Sheet in Coil, Slit Edge
SPEC: SUS304 NO. 1
SIZE/Q'TY:
2.8MM X 1,219MM X C
8.193MT
3.0MM X 1,219MM X C
7.736MT
3.0MM X 1,219MM X C
7.885MT
3.0MM X 1,219MM X C
8.629MT
4.0MM X 1,219MM X C
7.307MT
4.0MM X 1,219MM X C
7.247MT
4.5MM X 1,219MM X C

8.450MT
4.5MM X 1,219MM X C
8.870MT
5.0MM X 1,219MM X C
8.391MT
6.0MM X 1,219MM X C
6.589MT
6.0MM X 1,219MM X C
7.878MT
6.0MM X 1,219MM X C
8.397MT
TOTAL:
95.562MT115
List of commodities as stated in Exhibit "X" (the invoice that was not paid):
DESCRIPTION: Hot Rolled Stainless Steel Coil SUS 304
SIZE AND QUANTITY:
2.6 MM X 4' X C
10.0MT
3.0 MM X 4' X C
25.0MT
4.0 MM X 4' X C
15.0MT
4.5 MM X 4' X C
15.0MT
5.0 MM X 4' X C

10.0MT
6.0 MM X 4' X C
25.0MT
TOTAL:
100MT116
From the foregoing, we find merit in the contention of MCC that Ssangyong did not
adequately prove that the items resold at a loss were the same items ordered by
the petitioner. Therefore, as the claim for actual damages was not proven, the Court
cannot sanction the award.
Nonetheless, the Court finds that petitioner knowingly breached its contractual
obligation and obstinately refused to pay despite repeated demands from
respondent. Petitioner even asked for several extensions of time for it to make good
its obligation. But in spite of respondent's continuous accommodation, petitioner
completely reneged on its contractual duty. For such inattention and insensitivity,
MCC must be held liable for nominal damages. "Nominal damages are 'recoverable
where a legal right is technically violated and must be vindicated against an
invasion that has produced no actual present loss of any kind or where there has
been a breach of contract and no substantial injury or actual damages whatsoever
have been or can be shown.'"117 Accordingly, the Court awards nominal damages
of P200,000.00 to respondent Ssangyong.
As to the award of attorney's fees, it is well settled that no premium should be
placed on the right to litigate and not every winning party is entitled to an
automatic grant of attorney's fees. The party must show that he falls under one of
the instances enumerated in Article 2208 of the Civil Code.118 In the instant case,
however, the Court finds the award of attorney's fees proper, considering that
petitioner MCC's unjustified refusal to pay has compelled respondent Ssangyong to
litigate and to incur expenses to protect its rights.
WHEREFORE, PREMISES CONSIDERED, the appeal is PARTIALLY GRANTED. The
Decision of the Court of Appeals in CA-G.R. CV No. 82983 is MODIFIED in that the
award of actual damages is DELETED. However, petitioner is ORDERED to pay
respondent NOMINAL DAMAGES in the amount of P200,000.00, and the ATTORNEY'S
FEES as awarded by the trial court.
SO ORDERED.