Compania Maritima vs.

Allied Free Workers Union

77 SCRA 24 (1977)
FACTS:

Compania Maritima (company) and the Defendant-

appellant Allied Free Workers Union (union) entered into a
written contract whereby the union will perform arrastre and
stevedoring work for the company’s vessels, effective for 1
month, renewable upon agreement. The company could terminate
the contract if the union failed to render proper service. The union
agreed that the company would not pay for the loading,
unloading and deliveries of cargoes and that these would be paid by
the owners and consignees of the cargoes as has been the practice in
the port of Iligan. However, shippers and consignees refused to pay
the union for the stevedoring
services because the bill of lading provided that the unloading
of the cargo was at the ship owner’s expense. The company, on
the other hand, refused to pay for the stevedoring services because
this was provided for in the contract between the company
and the union. This became the root of all the problems
between the two parties. Despite of the fact that the
set-up was disadvantageous on the Union, it did not
terminate the contract because its members were in dire need
of work, which although not adequately compensated, was
preferable to having no work at all. Thus, upon the expiration of
the one month period, the contract was verbally renewed. Then,
the union sent the company a letter requesting that it be
recognized as the
exclusive bargaining unit. The company ignored the demand.
The union then filed with the CIR a petition that it be certified
as the sole collective bargaining unit. The company then
terminated the contract. The union filed an Unfair Labor
Practice case. Then, the company entered into a new
stevedoring contract with Iligan Stevedoring. On the following
day,the Union
members picketed the wharf and prevented the Iligan Stevedo
ring from performing arrastre and stevedoring work. The
company sued the union. Thereafter, a legal battle ensued
with the trial court in the end ruling in favor of the
company. Also, the Trial court awarded actual damages,
amounting to P450, 000 and other damages on the basis
of the auditor’s reports, Exhibits A to I. Plaintiff Company to
bolster its case presented Teves, the company’s manager who
testified in its favor. One of the pieces of evidence he presented was a
statement showing the alleged cost of 3 forklifts, pallet boards, wire
rope slings and tarpaulins in the sum of P27, 215.(The company
alleges that it was forced to purchase the equipment in order
to improve the arrastre & stevedoring services.) He claims that
the damages to the company by reason of depreciation of the
said equipment amounted to P38, 385 or more than the cost
thereof.Also presented was Accountant Demetrio Jayme who w
as a personal friend of Teves andcompany’s branch manager in
Ozamis. His testimony is basically that the Company due to the a c t
o f U n i o n m e m b e r s , t h e c o m p an y s u f fe r e d l o s s e s as
s h o w n i n t h e b o o k s o f t h e a s t o unrealized freight and
passenger revenue. The Company also claims damages on lost
cargoes and freight as set forth by Salvador Magante, the
company’s chief clerk in Iligan City in his statement.
Magante did not testify on his statement, instead it was
Jayme who testified on behalf of Magante.

ISSUE:

Whether the Trial Court erred in awarding to the plaintiff

company actual damages,moral damages, and attorneys fees
on the ground that the Auditors report on which they
were based were hearsay

RULING:

The company argues that the accountant’s (auditor’s) reports

are admissible in evidence because of the rule that “when the
original consists of numerous accounts or other documents
w h i c h c a n n o t b e e xam i n e d i n c o u r t w i t h o u t g r e at
l o s s o f t i m e an d t h e fa c t s o u g h t t o b e established from
them is only the general result of the whole, the original
writings need not
be produced. That rule cannot be applied in this case because
the voluminous character of therecords on which the
accountant’s reports were based was not duly
established. Moreover, in order for said rule to be applied, the
records and accounts should be made accessible to the adverse
party so that the correctness of the summary may be tested on cross-
examination. What applies 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 o r t h e l i ke . T h e c o m p an y f ai l e d t o m a ke
a p r e l i mi n ar y showing
a s t o t h e d i f fi c u l t y o r impossibility attending the produ
ction of the records in court and their examination and
analysis as evidence by the court

As to the statement presented by Teves, SC said that the best

evidence on the cost of the equipment would have been the
sales invoice instead of his mere oral testimony of. Also, he
should have produced the sales invoice. The same is true with
regard to Jayme’s estimates as recoverable damages. The
pertinent records of the company should have been produced
in Court. As to Magante’s report, Jayme was not competent to
take his place since the statement was prepared by Magante and
not by Jayme. More appropriate still, the documents and records on
which the statement was based should have been presented
as evidence or at least brought to the Court
for examination. Lower court’s award of damages is reversed and set
aside.